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[Congressional Record Volume 141, Number 88 (Thursday, May 25, 1995)]
[House]
[Pages H5603-H5606]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                    MEDICARE AND THE FEDERAL BUDGET

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Connecticut [Mr. Shays] is recognized for 20 minutes.

                        recognizing our veterans

  Mr. SHAYS. I thank the Speaker. I know the Speaker has appointments 
he has to make. I appreciate his willingness to stay and be here for 
these special orders, and also to thank those that are working on 
behalf of the House so that we have this opportunity.
  I do not often seek the opportunity to address the House in a special 
order, but I do so today to talk about our Federal budget and what we 
as the Budget Committee have done to try to get our financial house in 
order.
  But I first want to say that as I listened to the gentleman from 
California [Mr. Dornan] in talking about the atrocities that took place 
with Americans under captivity by the Japanese during World War II, I 
just could not help but think how important it is that that story be 
told, as gruesome as it is, and that the families of those men know 
that we will not be silenced in making sure that the truth be told.
  When I think of Memorial Day and the men and women who gave their 
life to this great country, I know, as someone who never served in the 
armed forces, that when I look at the flag behind me, that the flag 
means a great deal to me obviously as a Member of Congress and as an 
American citizen. But to someone who fought in battle, the American 
flag means something more than we could ever imagine. 
[[Page H5604]] When they think of the American flag, they think of the 
soldiers, their friends, their comrades, their brothers who died in 
battle. They think of the people, the families they contacted to let 
them know about how their brother or sister or son or grandson died in 
battle.
  And when I think of Memorial Day, and when I think of how blessed we 
are as American citizens for their ultimate sacrifice, I also think of 
the families. I think of the mothers who held their sons, who never 
will be able to hold their sons again. I think of the fathers that went 
and saw their sons or their daughters playing baseball or go to a 
dance, or be there when their children were sad and needed a reassuring 
arm, and I think of what those parents have to live with.
  I also think of the brothers and sisters who lost their brothers or 
sisters and the memories that they
 have. I think of the precious children who were denied the opportunity 
to have their father or their mother, particularly their fathers in the 
case of World War II, come to their baseball games, come to their 
schools, see them get married.

  So as a Member of Congress, I just count my blessings every day, 
absolutely every day, for the opportunity I have to serve here.
  When I listened to the debate that was taking place and the comment 
made by the Speaker and the ruling made by the Speaker, I thought of an 
experience that happened to me a bit earlier when I brought a complaint 
against a chairman of a committee after he had been indicted, and I 
wanted to do just what these two Members had done. I wanted to share my 
complaint and my letter, and I was ruled out of order.
  I did not like it at the time, but I began to think about it and I 
began to realize, first, the rule that you invoked, Mr. Speaker, has 
existed for over 70 years. And part of the reason for that rule is that 
in this Chamber it is important that a Member who is being accused of 
something have the opportunity to be present and to defend themselves.

                              {time}  1400

  I also realize that you did not make up a new ruling, you just 
enforced a ruling that was enforced on me under Democrats, a rule that 
was in their rules for as long as we can remember and we just continued 
their rule.
  So, as disappointed as I was when I was not able to submit my letter, 
I realize that in this Chamber we work with each other, we deal with 
each other and we have to be fair to each other. There is nothing to 
prevent me, as I ultimately did, to just speak directly to the public 
but not in this Chamber.
  With regard to what we are trying to do in this Chamber, last year in 
an election we established what we thought would be a very important 
dialogue with the American people, we established a concept that said 
we were going to make a contract with the American people, and we had 8 
things that we wanted to do on opening day and we had 10 things that we 
wanted to do during the course of the first 100 days.
  What was memorable about that for me was when I was up for reelection 
and I met with an editorial board they said how could you have signed 
such a document, and the question I answered this way by
 asking a question, I asked: What do you think of what the majority 
party, then the Democrats, were going to do on the opening day; what 
did you think about the 10 things they were going to do in the first 
100 days; what did you think about their plan and their contract with 
the American people? And I just waited for the answer. Obviously there 
was not a contract with the American public, there was no sense of what 
they wanted to do on the first day, the 8 reforms we wanted to do and 
the 10 major pieces of legislation in the first 100 days. And I think I 
take extraordinarily pride in the fact that when we were up for 
election as the minority party we came forward with a plan, and it did 
not criticize Democrats, it did not criticize the President, we said we 
want to change this place. We want to downsize Government, we want to 
have open rules, we want to pass legislation which I helped author 
saying Congress should abide by the same laws that we impose on the 
private sector. The first bill that passed that Chamber, signed by the 
President, it was bipartisan. But we came forward with a plan, and one 
of the parts to that plan was a balanced budget amendment.

  Over 300 Members voted for a balanced budget amendment. But last week 
we did something more important. We voted to balance the budget, and to 
my left I have a chart which describes what we intend to do and what we 
will be doing. The red line is the spending that seems to go parallel 
with the bottom line which is revenues; they never meet. As long as I 
have been a Member of Congress we have had deficits. In fact, when I 
was a State legislator and I watched Congress in the State legislature, 
we have to balance our budgets, but in Congress we have not. And when I 
was in the State legislature I kept waiting for Congress to get its 
financial House in order. Thirteen years I waited and then I had an 
opportunity to serve in Congress, and I worked and waited for an 
opportunity to finally vote on a budget that would get us balanced. And 
that is what we do. We slowed the growth in spending; spending still 
goes up on the average in the aggregate and it ultimately meets the 
growth of revenues in the 7th year.
  We are going to spend more money each year on the aggregate in our 
Government. We are just slowing the growth, and what we are trying to 
do is end deficit spending. There are some young people in this 
audience who may not know that if we do not succeed in
 slowing the growth in spending, by the time the young people are 
adults they will be paying 70 percent of every dollar they earn in 
taxes to the Federal Government to help pay for the debt that is taking 
place today. And what is starting to happen in our dialog is we are 
having the elderly say you cannot do this, and we have the young who 
are not aware of what we need to do, and hopefully during the course of 
the next few months we will have an open dialog, young and old, talking 
about what we need to do. We need to slow the growth in revenue, and 
that is what we are going to do and that is what we voted to do last 
week.

  The second chart shows spending in three ways. The yellow is the 
national debt, the interest that we pay each year on the national debt. 
we pay $235 billion of interest payments on the national debt. That 
could go for housing, it could go for our military, it could go for our 
schools, it could go for a whole host of other things if past 
generations had not deficit spent, but they have. We have just such a 
large debt that our interest is now 15.4 percent of our budget.
  Only about a third of our budget is domestic spending and defense 
spending, what we call discretionary spending. There is foreign aid in 
here. I vote on one-third of the budget as a Member of Congress; as a 
Member of Congress I do not vote on anything over here in the blue. All 
of that is entitlement. These are Social Security, Medicare, Medicaid 
and other entitlements, food stamps, agricultural subsidies. They are 
an automatic pilot, they just keep happening and happening and 
happening.
  But I vote on this, what is in the pink, what is discretionary 
spending, and what we are looking to do is actually have real cuts in 
discretionary spending. We are going to try to slow the growth of 
entitlements but still allow entitlements to grow, and we are going to 
try to keep down the interest payments that we are making every year.
  Half of the budget is on automatic pilot.
  I am happy to yield to the gentleman fro Michigan [Mr. Ehlers].
  Mr. EHLERS. I would like to thank the gentleman for yielding, and I 
rise to comment on the charts and to compliment the gentleman for what 
he has done.
  I had two town meetings last weekend and I used charts similar to 
those the gentleman is using, and I
 deeply appreciate the work the gentleman has put into this. I have 
found that in my town meetings by the use of the charts the gentleman 
is displaying the public was fully understanding of the problems that 
we are trying to address, recognized the importance of them, and are 
able to get past all of the rhetoric they have heard from those who are 
trying to make political hay out of the [[Page H5605]] problems of 
Medicare and the problems of balancing the budget.

  I simply want to commend the gentleman and I hope many people hear 
his message, and I certainly thank the gentleman for preparing these 
charts, and I find them a valuable educational tool.
  Mr. SHAYS. That was a nice treat, and I thank the gentleman from 
Michigan and thank him for his work in trying to get this story out. 
The bottom line is what we want to do is slow the growth in Government 
spending and get our financial house in order so future generations 
will not have so much debt.
  In particular, what I have singled out as a focus is the amount of 
money we spend on Medicare and Medicaid. You cannot see it very easily, 
but it amounts to about 17 percent of our entire Federal budget. It is 
equal to all domestic spending. Medicare and Medicaid are equal to 
everything we spend in the legislative branch, everything we spend in 
the judicial branch, everything we spend in the executive branch under 
the President of the United States, all the various departments and 
agencies, all of their grants are equal to 16.7 percent or $256 
billion. Medicare and Medicaid are greater than that amount. The 
difference is Medicare and Medicaid are growing at alarming rates and 
we need to find a way to slow that growth.
  Defense spending is equal basically to discretionary spending. But a 
third of the budget is what we vote on in the House.
  Some people say to us well, why did not Gramm-Rudman make a 
difference? The reason is Gramm-Rudman only focused in on the pink part 
of that pie, only on discretionary spending. It did not focus at all on 
entitlements.
  What we have done in defense spending is to have a basic level 
playing field. It is not going to go up; it is not basically going to 
go down. Discretionary domestic spending is going to go down, and 
foreign aid is going to go down.
  Then we come to Medicaid. Medicaid is health care
   for the poor. It is also health care for poor elderly as it relates 
to nursing care, and it is going up. Medicaid spending is going to go 
up by about 36 percent in the next 7 years. We are not cutting 
Medicaid; we are allowing it to grow.

  Some Members of Congress say we are cutting Medicaid and/or we are 
cutting Medicare. We are cutting them if you use this definition, if it 
costs $100 million to run a program this year and the next year to run 
the same program with the same level of service, not changing the 
program, it costs $105 million and we appropriate $103 million, in my 
home, in business, that is a $3 million increase.
  Congress, the White House, the press in Washington, and only in 
Washington, they call that a $2 billion cut. Medicare is going to go up 
by 36 percent in the next 7 years. We are going to spend $324 billion 
more in the next 7 years than we spent in the last 7 years.
  Now admittedly we are not going to allow it to grow as quickly, but 
the important point, when you look at this, is to recognize that 
Medicare is going to go up, Medicaid is going to go up in terms of what 
we will spend in the next 7 years by 36 percent more than the growth in 
the population.
  What is happening to Medicare? Medicare is actually having an 
extraordinary challenge facing us. The challenge that faces us with 
Medicare, and it is Medicare part A, that is Medicare that goes for 
hospitals, Medicare part B is what goes for health care services, 
Medicare part A is starting to go bankrupt next year. In other words it 
is going to take in less money than it spends out, but it still has 
money in the trust fund. Ultimately in 7 years Medicare part A goes 
bankrupt, it literally runs out of money. In other words, in the 
seventh year there will be a $7 billion deficit in the trust fund. The 
trust fund will have run out of money.
  What we are looking to do with Medicare is to save it. We are looking 
to improve the service. We are looking to preserve Medicare. We are 
looking to save it. And this is not a report done by Republicans or 
Democrats in Congress, this is a report given to us by the trustees of 
the Medicare system. It is going bankrupt unless we save it, and that 
is what our objective is.
  The way we save it is to slow the growth in Medicare, by slowing the 
growth in Medicare so that it
 does not grow at over 10 percent a year, but grows approximately 5 
percent a year.

  If we allow Medicare to grow each year, in other words spend more, 
not cut, grow, and spend more, we are going to allow it to grow by 45 
percent in the next 7 years. Only in Washington is a growth in spending 
of 45 percent called a cut, only in Washington.
  And unfortunately we are hearing people saying we want to cut 
Medicare. No, we want it to grow; we want it to grow at 45 percent. We 
just want to make sure when it grows it does not bankrupt the rest of 
the country. So it will go from $178 to $259 billion.
  What that means is that we want to spend $659 billion more in the 
next 7 years than we spent in the last 7 years. We want to spend that 
amount of money.
  What will we spend, almost $1.6 trillion as opposed to $925 billion 
in the past 7 years.
  I think the most important statistic though is the one that shows 
what we do per beneficiary. We want to spend $4,116 per beneficiary 
instead of $6,000 and have it grow to $6,361 in the seventh year. We 
are going to spend 45 percent more in Medicare. We are going to allow 
it to grow, and the increase per beneficiary is 32 percent. Only in 
Washington would an increase per beneficiary of 32 percent, 32.1 
percent be called a cut, only in Washington. I do not know anywhere 
else where when you spend even more money you call it a cut. We are 
going to spend 45 percent more total in Medicare and 32 percent more in 
the next 7 years per beneficiary.
  Which gets me to the last point that I want to make. If we do not 
control the growth in Medicare and Medicaid, we are doomed. We are 
already to balance the budget in the next 7 years going to see foreign 
aid go down 5.4 percent more a year. We are already going to see 
domestic discretionary spending go down 1.6 percent a year, that is a 
cut, that is a cut any way you look at it. We are going to spend less 
dollars in the next year. Defense spending goes up one-half percent, 
and there are some, and I am one, who would like it not to be as high. 
The challenge we have in defense spending is we are $150 billion 
oversubscribed in defense. We have to find a way to reduce defense 
spending $150 billion in the next 7 years just to stay within this 
number. And how do we get oversubscribed? Because Congress and the 
White House kept pushing off the procurement of certain defense systems 
to the sixth year and we were working on 5-year budgets so the full 
cost of these programs never truly showed up.
  We are going to have a difficult time staying within this number, 
only because we are oversubscribed in defense.
  But what is happening in Social Security? It is going up 5.1 percent. 
What is happening in Medicare? It is going up 5.5 percent. What is 
happening in the Medicaid? It is going to go up 4.5 percent a year? 
What is happening in other elements? They are going to go up 3.9 
percent.
  Recognize this is the growth in spending and this is half of the 
Federal budget. It is going to grow. Sadly, the interest payments we 
make are going to go up about 1 percent a year, but before we passed 
our budget they were going to go up 5 percent a year.
  So we have slowed the growth of interest payments, we have slowed the 
growth of defense, we are actually making real cuts in foreign aid and 
domestic spending.
                              {time}  1415

  And I have to say this in conclusion about domestic spending, there 
are some cuts I do not want to make in domestic spending. I mean, there 
probably is not any Member of Congress who likes every part of our 
budget, but if we take the logic, ``I do not like 10 percent of the 
budget, I am voting against it,'' that is just going to duplicate what 
has happened during the last 10 years. We can always find something we 
do not like in the budget.
  What do I like in this budget? I like the fact that we are getting a 
handle on Government spending. I like the fact that we are slowing the 
growth of entitlement programs. I like the fact that we are saving 
Medicare from bankruptcy. I like the fact that for the first time in my 
20 years in public life I got to vote for a budget that gets us 
balanced. [[Page H5606]] 
  Admittedly, it is going to take us 7 years, but we are doing it, and 
I am proud to be part of that effort.
  I will just conclude by saying ultimately what we do is going to have 
to be worked out with the President of the United States. He has to 
sign this legislation. I am hopeful he will finally weigh in on trying 
to find ways to save Medicare. I do not mean that sarcastically. I just 
mean it as openly as I can, because right now there is no plan coming 
out of the administration. But ultimately we need to pass a budget that 
gets us balanced in the next 7 years. We need to do it for the people 
who are in this country today, and we need to do it for our children 
and for our children's children, and for our children's children's 
children.
  We have simply got to wake up and do it, and in the process of our 
plan, we are going to spend more on health care for the elderly, more 
on health care for the poor. We are going to spend more on some of our 
entitlement programs, But we are going to reduce spending in a whole 
host of areas.
  Farmers are going to feel the reductions. People in urban areas are 
going to feel the reductions. People in rural areas are going to feel 
the reductions. We are all going to be part of this effort. We are 
going to save this country. We are going to save this country so it can 
be the great Nation it has been for so long.
  And, Mr. Speaker, I really thank your kindness in staying. I know you 
needed to go. I appreciate the time you have afforded me.

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