[Congressional Record Volume 141, Number 29 (Tuesday, February 14, 1995)]
[Extensions of Remarks]
[Pages E345-E346]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                         BALANCED BUDGET BINGO

                                 ______


                        HON. ANDREW JACOBS, JR.

                               of indiana

                    in the house of representatives

                       Tuesday, February 14, 1995
  Mr. JACOBS. Mr. Speaker, the following article is journalism at its 
best; it effectively translates something that is obscure, yet vital to 
our well being as a nation. And the translation itself is not simply 
one more frustrating attempt to breach the portals to the arcane.
              [From the Indianapolis News, Feb. 11, 1995]

                         Balanced Budget Bingo

                          (By David L. Haase)

       Washington.--Can an average American citizen balance the 
     federal budget without starving the needy, abandoning the 
     elderly or taxing businesses out of business?
       More to the point, after a middle-aged reporter does the 
     deed, will his 71-year-old mother on Social Security still 
     talk to him?
       I dared to think so when I stepped into the basement office 
     of the Bipartisan Commission on Entitlement and Tax Reform, 
     ready to tackle the deficit using its computer.
       The deficit is a hot topic on Capitol Hill. Two weeks ago, 
     the U.S. House approved an amendment to the Constitution that 
     would require the government to balance the federal budget. 
     The Senate is debating the issue.
       But what does a balanced budget mean for Americans? The 
     commission, now out of business, had a computer game that 
     could tell us.
       Sen. Bob Kerrey, D-Neb., forced President Clinton into 
     naming the commission as the price of his support for the 
     1993 budget deal.
       It was never a Clinton priority. Its office in the basement 
     of the Russell Office Building showed that it wasn't much of 
     a priority for the Senate either.
       The staff worked at used computers plopped on aged wooden 
     government-issue desks and tables.
       The commission went kaput without its 32 members ever 
     agreeing on a way to halt the growth of entitlement spending. 
     The task proved too painful.
       Entitlement spending is mandatory. Neither Congress nor the 
     president can deny these funds to any eligible comer.
       On the other hand, discretionary spending, which Congress 
     approves from year to year, amounts to only 40 percent of 
     federal spending.
       In the commission's view, entitlements are THE problem with 
     the federal budget.
       [[Page E346]] These programs include Social Security, 
     Medicare, Medicaid, federal pensions, farm subsidy programs, 
     unemployment compensation and certain welfare programs.
       Without a change in policy, entitlement spending and 
     interest on the national debt will consume almost all federal 
     revenues in 2012--about the time David Letterman reaches 
     retirement age.
       By 2030, when Michael Jordan and Julia Roberts turn 65, 
     federal revenues won't even cover entitlement spending.
       So, there I stood in the commission's doorway, eager to 
     reverse the tide of history with the help of the commission's 
     Budget Shadows computer game.
       Heather Lamm, a commission researcher, explained the rules.
       Cut enough spending and raise enough taxes to score 100 
     points, and you balance the entitlement side of the budget.
       In other words, you keep the deficit equal to 2.3 percent 
     of GDP, or gross domestic product. That's the value of all 
     goods and services in the U.S. economy.
       Without big changes, the commission figures the deficit 
     will skyrocket to 18.9 percent of GDP by 2030.
       The perfect score of 100 does not balance the entire 
     federal budget. To do that, you have to score 115. But 100 
     does keep the problem from getting worse.
       David Modaff, the commission's computer consultant, put it 
     a little more bluntly.
       ``All the screaming now (about how large the deficit is), 
     that's your goal,'' he said. ``To keep it at that level.''
       (And, I added to myself, keep Mom talking to me.)
       Budget Shadows offered me 50 options in four categories:
       Health care
       Taxes
       Social Security
       Other federal entitlements
       I started in health care. Spending in this part of the 
     economy grows far faster than anything else.
       After reviewing 16 options and getting confused by Medicare 
     Part A, Medicare Part B and Medicaid, I decided to move on to 
     a section where they speak English.
       Not a great start, but I had learned something.
       I needed a strategy so I would make decisions in each 
     category based on the same logic.
       First, cut spending before raising taxes.
       Second, do something about COLAs--the automatic cost-of-
     living increases that kick up federal spending without 
     Congress or the President ever saying yea or nay.
       Third, means-test everything. In essence, if you make more 
     than a certain amount, I decided you don't need this 
     government program.
       Leaving health care behind (just like Congress and the 
     president last year). I charged into the non-Social Security 
     entitlements like Medicare, unemployment and veterans' 
     compensation benefits and started making decisions.
       1. Means test non-Social Security entitlements. Score: 15 
     points. Only 85 to go.
       2. Adjust the Consumer Price Index, the leading formula for 
     measuring price increases, to better measure inflation for 
     non-Social Security entitlements--10 more points. One-quarter 
     of the way home and Mom was still talking to me.
       This stuff was easy!
       Next stop--either taxes or Social Security. I figured I 
     would tax as a last resort, so on to Social Security.
       3. Means test Social Security. Social Security was never 
     intended to replace retirees' savings or be the sole source 
     of their retirement income.
       This option would keep it available as an income floor for 
     the neediest but would also encourage others to plan better 
     for their retirements. Nine points. That gives me 34. 
     Cruising.
       4. It's COLA time. Budget Shadows offers two options: 
     Cancel the Social Security COLA for one year or revise the 
     way it is calculated.
       I picked the revision. Four points.
       5. Gradually raise the retirement age.
       Americans can now retire with full Social Security benefits 
     for the rest of their lives at age 65. That is scheduled to 
     change in 2000 when the retirement age will gradually rise--
     to age 67 by the year 2022.
       I got three options here: Phase in the 67 retirement age 
     sooner, raise it to 68 or raise it to 70. I picked age 70. 
     Take 5 more points. At 43 points, I'm not even halfway there.
       In the interest of fairness, I did pass up the chance to 
     tax more Social Security benefits.
       6. Include all new state and local government employees in 
     Social Security.
       This is too complex to explain, but it helps cash flow now 
     and defers payments until later. Two more points. Makes the 
     total 45.
       7. Index the Social Security benefits formula for overall 
     inflation instead of just increases in average wages. Seven 
     points.
       I passed up the chance to change the Social Security 
     payroll tax base or raise the tax rate. They sounded too 
     taxing.
       Budget Shadows liked what I had done.
       ``Congratulations,'' it beeped at me. ``You have restored 
     Social Security to actuarial balance.''
       I didn't know what ``actuarial balance'' meant, but it 
     sounded good.
       At this point, I passed the halfway mark, and I had not 
     increased a single tax.
       ``Amazing,'' the computer told me. ``You've cut the 2030 
     deficit to 11 percent of GDP.''
       That's down from the 18.9 percent the entitlement 
     commission thinks we're headed toward.
       I liked this computer.
       Now it was on to taxes. Watch
        my restraint.
       8. Limit the home mortgage interest deduction.
       Once again, two options: Kill it. (Not me.) Or reduce the 
     maximum mortgage from $1 million to $300,000. (Done.) One 
     point.
       I refused to tinker with boosting the capital gains tax on 
     estates, with curtailing itemized deductions for charitable 
     contributions and with eliminating the tax deduction for 
     state and local taxes.
       Taxes only gave me one point, so the next choices would 
     demand big impact.
       Only one place to go. Back to health care--and catastrophe.
       I discovered that somewhere along the way I had pushed 
     buttons I had not meant to. I'd selected two options here 
     already.
       That made my first choice--means test non-Social Security 
     entitlements--look like a 15-point hit when in fact it got me 
     only six-tenths of a point. When I corrected everything, my 
     score of 52 plunged to 37.
       I had caused all that havoc in Social Security; Mom 
     wouldn't talk to me, and, instead of being halfway home, I 
     was barely one-third of the way there.
       What a dumb game.
       Just to be sure, I recalculated everything and my score 
     rose to 41. ``Interaction'' among the choices can change 
     things as much as 10 percent, Lamm explained. At least this 
     10 percent ``interacted'' in my favor.
       More decisions. Would they never end?
       9. Means-test health care benefits for Medicare. I got nine 
     points, but ``interaction'' only raised my score to 47.
       It was lunch time now, and I had been hunched over that 
     computer almost three hours.
       I needed bigger cuts faster, but I was running out of 
     options.
       10. Tackle Medicare Part B. This is the voluntary part of 
     Medicare that pays for doctors' visits, lab work and 
     outpatient hospital visits. The elderly pay a monthly premium 
     and a $100 deductible.
       I raised the deductible to $300 a year and indexed premiums 
     so the enrollees' share would stay at current levels. That 
     gave me 11 points, but ``interaction'' allowed only a 57 
     score.
       I could have raised eligibility age and costs on Medicare 
     Part A, the hospitalization part, but I figured older people 
     need this. Were you listening, Mom?
       Medicare/Medicaid outlay savings. This single option 
     represents a blizzard of changes in the way doctors and 
     hospitals are paid for Medicare services and also caps 
     Medicaid payments to the states.
       I had to make big savings, and this option spread for pain 
     around. Fourteen points.
       My score was 71. My bladder was full. My stomach was empty. 
     And my bottom was sore. [No federal funds were wasted on the 
     charts at the entitlement commission.]
       I had combed all four categories of options for something 
     acceptable--and BIG. Now I had to go back to taxes.
       So far, I though, I had placed the burden of balancing 
     entitlement spending on those who receive the entitlements.
       As a result of my choices:
       Benefits paid to the elderly, the sick and the poor would 
     rise more slowly.
       Old folks would pay more of their health care costs.
       My generation--the baby boomers--would retire much later in 
     life than our parents.
       Mom stopped talking to me ages ago.
       I made my last decision. After this, my working wife 
     wouldn't talk to me. My brother and sisters wouldn't talk to 
     me. My co-workers wouldn't talk to me. And I would likely die 
     in a driveby shooting.
       But this last choice gave me 24 points and boosted my score 
     to 95, within ``interaction'' reach of holding the line on 
     the deficit.
       In fact, my score chart showed the deficit would inch up to 
     only 3 percent of GDP over the next 35 years. Instead of 
     rising to 18.9 percent, as the commission feared.
       The computer liked me. ``Amazing,'' it said.
       I was grateful someone liked me.
       Starting in the year 2000, phase in over five years 
     taxation of employer-provided health care benefits as though 
     they were cash income.
       That's right. You would pay income taxes on your health 
     insurance if your boss buys it.
       This would more accurately reflect an employer's true cost 
     of hiring someone. It should get people thinking about health 
     care costs and how much is paid on their behalf.
       I had to do it to balance the budget. Really.
       Hello. Hello? Anybody out there?
       Mom?
       

                          ____________________