[Congressional Record Volume 141, Number 82 (Wednesday, May 17, 1995)]
[House]
[Pages H5175-H5180]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          EFFECTS OF THE PROPOSED BUDGET ON TAXES AND MEDICARE

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Minnesota [Mr. Gutknecht] is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. GUTKNECHT. Mr. Chairman, I have listened and I assume most of the 
Members have listened today to the debate. I have found it particularly 
interesting, and I would like to share some of my time with the 
gentleman from Michigan [Mr. Hoekstra] tonight.
  I would like to also share with the Members and those who may be 
watching at home from, and I hope this is not an ethical violation 
because I get no residuals from this book, but this is a book that I 
read during the district work period that was written by my 
predecessor, Tim Penny. I commend it to all of the Members, and other 
people who are interested in the budget debate that is going on, 
because I think it is very instructive. He has an awful lot to say. I 
would like to share some of those things with the body tonight.
  First of all, Mr. Speaker, after listening to some of the debate 
earlier today, I just wanted to talk a little bit, too, about one of 
the things we have heard so much about in the last 2 or 3 days, and 
that is the tax cuts for the wealthy.
  I'm not particularly good in math, and I do not serve on the 
Committee on Ways and Means. I did serve on the Committee on Ways and 
Means when I was in the State legislature back in Minnesota, so I have 
a little bit of understanding.
  However, based on what I do understand about the tax cuts that we 
passed earlier this year, about 75 percent, about three-quarters of the 
benefits of the family tax credit, will go to families earning $75,000 
a year or less. Perhaps in some places of this great National people 
earning $75,000 are considered rich, but I do not think in most places 
families earning $75,000 and less are necessarily considered rich.
  Another part of that tax cut proposal that I think is important that 
will ultimately lead to economic growth is the cut in the capital gains 
tax rate. Representing an awful lot of farmers and small businesses in 
my district, I think I do understand something about capital gains 
taxes. As a matter of fact, one of the things I really understand is 
that 44 percent of the people who get stuck with a capital gains tax 
are rich for one day during their life, the day they sell their farm or 
sell their business.
  I do not think, back where I come from in Minnesota, when a farmer 
who has worked hard all of his life and sells his farm, does he really 
consider himself rich? Obviously, in economic terms, in real dollar 
terms, many people would say that when you sell a farm for half a 
million dollars or whatever the particular price of that farm, you 
would say that they are rich, but these are people who have worked 
hard, who have lived poor all of their lives, who have made their 
payments, who have paid their taxes, and all of a sudden, because on 
one particular day they sell an asset, they get stuck with a capital 
gains tax.
  I think if people will think about that in those kinds of terms, I 
think they will look at this whole thing and say ``Wait a second, we 
are not talking about tax cuts for the rich.''
  Second, I wanted to talk a little bit about Medicare tonight, because 
I think there has also been a good deal of misunderstanding and 
disinformation spread about what we are doing with Medicare. It has 
been alluded to earlier today, but I would call attention to the 
Members and folks around the country to an article that appeared, I 
believe, in today's Investors' Business Daily. In that, there is a 
quotation that just literally jumps off the page.
  It says:

       Today, Medicaid and Medicare are going up at 3 times the 
     rate of inflation. We propose to let it go up at 2 times the 
     rate of inflation. That is not a Medicare or Medicaid cut. So 
     when you hear all this business about cuts, let me caution 
     you that this is not what is going on. We are going to have 
     to increase Medicare and Medicaid at a reduced rate of 
     growth.

  Now, I did not say that, Newt Gingrich did not say that. That came 
from Bill Clinton. I think that is what we are doing. We are not 
talking about cutting Medicare, we are talking about reducing the rate 
of growth.
  Mr. Speaker, I also served back in Minnesota on the Health and Human 
Services Committee in the State legislature. I remember just 2 years 
ago when we were talking about health care and how much health care 
costs were going up, everyone predicted that we were going to see 
double-digit increases in the cost of health care for the next 5 or 6 
years.
  In the private sector, and I visited during the district work period 
with a number of health care providers, with representatives of some of 
the biggest insurance companies and HMO's in the State of Minnesota, 
they assured me that what is happening in the private sector, because 
of some of the changes and reforms that are going on with more managed 
care and preferred provider networks, we are seeing health care costs 
virtually at or below the inflation rate. We are seeing health care 
costs going up at less than 3 percent in the State of Minnesota.
  Using the mathematics that we have heard about today and the last 
several days, we could assume that some of the health care providers in 
the State of Minnesota could be saying ``Compared to what we thought 
health care was going to go up, we are seeing a 7 to 8 percent cut, 
because we thought health care costs were going to go up by 10 percent, 
but because of market-based reforms that are happening without the 
Clinton health care reform plan, without a whole lot of Government 
[[Page H5176]] intervention, we are seeing health care inflation rates 
going down by about one-third or less of what they were expected to 
be.'' So using the arithmetic and some of the rhetoric we have heard 
today, I think we could say that we have seen dramatic cuts in health 
care in Minnesota.
  Somehow, providers, hospitals and others, are adjusting to this new 
system. My sense is that if we
 allow some real reform in health care, in the Medicare system, that we 
can easily live within the guidelines that have been proposed by the 
House Committee on the Budget.

  I just want to say that by just assuming that this is going to go up 
by 10\1/2\ percent per year, if we assumed it was going to go up 16 
percent per year, then obviously you could say that this is a 12-
percent cut, or some other number. However, the truth of the matter is 
that we know that health care costs can be controlled by the private 
sector, because it is happening.
  With that, Mr. Speaker, I will yield to the gentleman from Michigan 
[Mr. Hoekstra], who has some remarks perhaps to share with us.
  Mr. HOEKSTRA. Perhaps we can get into a little bit of a dialog, 
because I think it is very instructive to understand what we are 
talking about with Medicare, Mr. Speaker, and also when we take a look 
at what we do with the rest of the budget. If we take a look at and 
listen to much of the rhetoric that has gone on during this 6 to 7 
hours of debate that we had today, you would think that we were 
dramatically cutting the budget.
  In reality, the standard that we are setting for the Federal 
Government to get to a balanced budget, you know, I came out of the 
private sector, and this is my third year here. The aggressive posture 
that we are going to take to get to a balanced budget is something that 
the private sector would look at and they would basically laugh at. 
They would say ``This is an aggressive plan to get to a balanced budget 
under the dire circumstances that you are under right now? You have a 
$4.7 trillion debt. A child born this year, in their lifetime, if we do 
not change how we spend and tax, would have to pay what, $187,000 as 
their share of interest in the debt, and you are going to slow the 
growth of Federal Government to 3 percent per year?''
  During the break I had an opportunity to go to a number of companies 
in my district. I listened to what they had done. You gave some 
examples about what they had done to control health care costs. I 
looked, and they explained to me what they had done to control product 
costs. There was a company in my district that, through participative 
management, employee involvement, creative thinking, new technology, 
new thinking about new ways to do things, for 12 years
 they have not had a price increase on their product, so they now are 
exporting around the world, because they have been able to control 
costs, not at a rate equal to inflation, but at a rate 3 or 4 percent 
below inflation, reducing costs every year, reducing actual costs.

  There was another company in my district that made an electronic 
component. In the early 80's they were making it for $44. The Japanese 
came in and said ``We have taken a look at this part and we can build 
it for $13.'' The company got together, they got together with the 
management and the employees, and today they are building it for less 
than what the Japanese quoted to them in the early 1980's, so they took 
a $44 part and they are now building it for less than $12.
  Here we are in Washington, the only thing, the thing we are going to 
do is slow the growth to 3 percent. I really believe that much of what 
has been applied in the private sector can and should be applied to 
Washington, and that what we are looking at doing to balance the budget 
is not that unreasonable and is very, very doable.
  I think we can do it like we did it with the Contract With America. 
The Contract With America said ``We are going to do this within 100 
days,'' and we did it within 93. I think if we energize Federal 
employees, build a partnership with State and local governments, build 
a partnership with people at the local level, and come together on this 
budget issue, we can improve performance, we can deliver a better 
solution to the American people, and we can balance the budget, and we 
can balance it quicker than 7 years if we focus and recognize that it 
has to be done.
                              {time}  2130

  Mr. GUTKNECHT. The private sector is a great example, and I have had 
the same story told to me around the district where people found 
themselves under competitive pressure. They have found a way to 
increase productivity or do something to reduce their costs. It has 
happened in big business and small business.
  I have one particularly fairly large business in my district that was 
facing very competitive measures and in a difficult situation, and they 
went in and it was not easy but they found ways to produce their 
products at a much lower cost today than they had 3 or 4 years ago.
  Incidentally, that same company has found ways to cut their health 
care costs. Now that has meant that, you know, perhaps there are fewer 
visits to the doctor, it may means some other things, it may mean 
managed care in some respects. I am not sure what all they have done, 
but the point is necessity is the mother of invention. That is the way 
the free enterprise system worked.
  The problem in Washington is the solution to every problem seems to 
be more money, and the only way we can get control of the problem is 
with more money. But the truth of the matter is I think the American 
people are saying if we are talking about this program or that or 
another program that enough is enough; you have enough tax revenue, you 
are going to have to figure out how to make this thing work. And I 
think if we work together I think we can.
  Mr. HOEKSTRA. If the gentleman will yield, we are really talking 
about the future of America. We are talking about security for seniors 
and we are talking about opportunities for our kids.
  You know Alan Greenspan came in and said here was his vision of the 
benefits of balancing the budget: Children will have a higher standard 
of living than their parents, part of the American dream; there will be 
improvements in the purchasing power of everybody's incomes; there will 
be a rise in productivity, a reduction in inflation, strengthening of 
financial markets, acceleration of long-term economic growth, and a 
significant drop in long-term interest rates. This is going to benefit 
everybody in this country, just getting back to a basis where we have 
fiscal soundness, good fiscal policy, get to a balanced budget, and I 
think one of the goals and objectives
 which we had, which we put into the budget resolution during the 
debate in the Budget Committee is saying as we move to a balanced 
budget we cannot forget the fact that when we get to a balanced budget 
we need to develop a surplus, because balancing the budget is not good 
enough. We need to make the next step, which is developing a surplus 
and putting a plan in place to actually pay down the debt. The old 
American saying is what, we used to pay off the mortgage and give our 
children the farm. If Congress keeps going the way that it had been 
going, what we were going to do was sell the farm and give our kids the 
mortgage.

  We are now, tomorrow, we are going to start that historic process 
that we are going to go through the next 6 months. We are going to put 
in a balanced budget plan for 7 years which is going to guide the 
authorizing and the appropriations committees so that by the end of 
this year we will have put a plan in place in May, and for the next 6 
months we will manage our fiscal resources to hit that plan.
  Mr. GUTKNECHT. The interesting thing to me, and you alluded to it, I 
was home this weekend and talked to some constituents and tried to 
explain essentially what the outline of the budget plan was going to 
be, and the people that I talked to said, you mean that is all there 
is. As a matter of fact, a few of them said we expected real cuts. We 
expected you to really cut programs and what you are talking about does 
not sound like the kind of cuts that we were expecting. As a matter of 
fact, I think my own sense is that the American people, at least out 
there in the great Midwest, are fully prepared for more, to shoulder 
more of the responsibility in terms of some of these reductions in 
spending than I think this budget is proposing. As a 
[[Page H5177]] matter of fact, some I think may actually see this 
budget resolution as a bit too timid.
  Mr. HOEKSTRA. Maybe too timid, but I think they will look at the 
policies in place and ask how are we changing decisionmaking here in 
Washington, moving more decisionmaking back to empowering the 
individuals. What is the $500-per-child tax credit? It is just a basic 
recognition that a family and parents are a better place to make 
decisions on how to spend that $500 than sending that money to 
Washington.
  We are returning power and control to the States and localities, 
bringing decisionmaking back close to
 the problems, fine tuning the solutions for the specific problems 
within the graphic area.

  My district is nine counties, it is a medium-sized district, but the 
problems in the southern part of the district or characteristics of the 
southern part of the district are very, very different than the 
northern part of the district. But what we are finding today is the 
decisions are all made here in Washington for a number of programs, 
whether it is school lunch, whether it is public housing, the decisions 
are made here in Washington. What we are trying to do is move decisions 
locally. We want to move a Federal bureaucrat from being between a 
child and a school lunch, let that decision be made at the local or 
State level. We want to move the Federal bureaucrat in Washington away 
from being the connecting point between a tenant and a landlord. Why is 
a Federal bureaucrat trying to make those arrangements? Same thing, we 
are proposing eliminating the Commerce Department. Why do we need a 
Federal bureaucrat in Washington being between a customer and a 
potential vendor? It does not make any sense. That is not a good use of 
our resource, so we are moving power back to States and localities. We 
are at the same time discarding needless bureaucracies, eliminating 
duplication and waste.
  One area where we really are cutting, where the number is actually 
going to be less, it is a true cut, it is a cut as defined in the rest 
of America, and here in Washington now it also means a cut, is the 
foreign aid. That will be I think an absolute reduction of somewhere in 
the neighborhood of 30 or 35 percent.
  We are reducing corporate subsidies. We are going after just about 
every area of the budget, except Social Security. We are promoting 
personal responsibility. The end result is we are all coming together 
in a plan to save the future and save the future for our kids.
  Mr. GUTKNECHT. I went through a sales training program many years 
ago. I did not sell insurance, but it was actually designed for 
insurance salesmen, and I never forget the story they used to use, some 
of the salesmen used to use where they would bring with them a marble, 
it was a marble, a Ping-Pong ball, a baseball, and a bowling ball and 
they would tell potential customers, you know, if you buy your 
insurance now it will be like carrying around this
 marble. You can put it in your pocket and you will barely know it is 
there. But if you wait another 10 years and buy that insurance, it is 
going to be like carrying that ping-pong ball, and if you wait 10 years 
after that it is going to be more like carrying that baseball, and it 
gets real difficult to carry it around in your pocket. But if you wait 
until you are about ready for retirement, its going to be like carrying 
around that bowling ball. That is what we are talking in the Federal 
budget. The sooner we get started in solving the problem, the less pain 
in terms of solution. If we wait another 5 years, I think everybody 
knows, the American people know if we wait another 5 years, whether we 
are talking about Medicare or impending bankruptcy or whether we are 
talking about the growing national debt, if we wait another 5 years the 
problem is going to be just that much more difficult to solve, and so 
rather than having to carry around a ping-pong ball in your pockets we 
are going to have a bowling ball, and the weight of that ball is going 
to be hung around the necks of our children.

  Mr. HOEKSTRA. We know what the statistics are. We know within 7 years 
Medicare will be bankrupt. We know if we do not change our spending 
priorities that by the year 2012 all the revenues we collect in taxes 
will be used to pay for two things: entitlements, and that thing that 
returns so much value to the country, interest on the debt. I mean that 
is just money that is gone away. You know, in 2012 we could be talking 
about student loans; there will not be any money for them. We can talk 
about building highways; there will not be any money. We talk about 
national defense; there will not be any money, unless, what? We ask the 
American people to share more of their income with us. What is it, the 
generational accounting which came out in the President's budget a year 
ago said if we continue at taxing and spending or spending at this 
rate, the next generation could see an effective tax rate of 84 
percent. Which means that for young people going out and working, for 
anybody going out and working, 84 cents would come to Washington or, 
yes, and you would get to keep 16 cents of it for yourself, which means 
Tax Freedom Day would move to somewhere in November.
  Mr. GUTKNECHT. Thanksgiving.
  Mr. HOEKSTRA. At least we would have something else to be very 
thankful for, that we only had to work until Thanksgiving to pay the 
Government their share
 to keep the Government running and we could then work from 
Thanksgiving to the first of the year.

  We need to be moving in the other direction of getting to the 
balanced budgets and paying the debt down.
  Mr. GUTKNECHT. I was going to share one of the stories I tell a lot 
of folks. When I graduated, most people do not remember who the speaker 
was at their commencement address when they graduated from college, I 
do not remember his name, but I remember who it was and what he talked 
about that day. It was the director of the United States Census, and I 
graduated from college, I was 22 years old, graduated in 1973. I was 
born in 1951. And he said something interesting talking about 
demographics, and I think it is very important, I think the American 
people need to understand this. I was born in 1951, and he told us that 
day at our graduation that there were more kids born in 1951 than any 
other single year. He said, ``You are the peak of the baby boomers, and 
that is going to be important as you go through your life, whether 
people are selling insurance or encyclopedias or automobiles,'' and you 
can see that reflected in the advertising. But I think we need to think 
about this as well. Those baby boomers are going to start retiring at 
about the year 2011 or 2012, and I think the American people need to be 
reminded that if we have a problem now with Medicare, if Medicare is on 
the verge of bankruptcy now, and will be insolvent by the year 2002, 
imagine, the people we are dealing with here are people who were born 
essentially during World War II, and the birth rate during World War II 
was incredibly low. Imagine what is going to happen to us when the baby 
boomers start to retire in the year 2010 and 2011, and that is why it 
is critical in my opinion we have real Medicare reform and begin the 
process this year. I think if we do we can guarantee Medicare will be 
there for baby boomers and beyond. If we do not, I think it is pretty 
certain it will not be. I think there is growing concern among people 
my age that the sins of our fathers are now being visited upon us and 
will ultimately be visited upon our children.
  Mr. HOEKSTRA. The demographics do not work in your favor, but I think 
as we talk about reforming Medicare we are talking about putting in 
place a number of policies and practices that have already worked and 
are working in the private sector.
  Medicare basically has not been reformed or enhanced or modified or 
had any creative thinking applied to it for the last the 20 to 25 
years, and we are still allowing spending per beneficiary, spending per 
person receiving Medicare is going to increase by somewhere between 33 
to 40 percent depending upon what State you are in, but on average we 
are spending $4,800 per person in 1995. We are allowing within this 
budget to be spending up to $6,400 on average per person by the year 
2002. That gives us a lot of leeway to examine what is going on in the 
private sector, to reform and enhance Medicare to take a look at the 
discrepancies by State.
  I think one of the speakers today made the comparison about what you 
spend per person on Medicare in Minnesota, which has a fabulous health 
[[Page H5178]] care system, and compare it I think it was somewhere in 
the neighborhood of $3,000, going up to something like $5,000 compared 
to the expenditures in Connecticut, which was like $5,000 going up to 
somewhere near $6,000 to $7,000, and saying you know we can take a look 
and what we need to be doing is taking a look at the different programs 
in different States and say what are the dynamics in this State that 
are driving costs to this level and to be very efficient and effective, 
and there are some things in these areas that we can learn and transfer 
to the high-cost States because like I said, Minnesota, my area, I 
think we are at about two-thirds of the national average for many of 
the health care costs.
  Ms. DeLAURO. Mr. Speaker, will the gentleman yield?
  Mr. HOEKSTRA. I yield to the gentlewoman from Connecticut.
  Ms. DeLAURO. Mr. Speaker, representing Connecticut, I just wanted to 
correct the numbers that you just talked about with regard to 
Connecticut. There are over 503,906 Medicare enrollees in Connecticut, 
and in fact what would be the case is that they would pay $1,167 more 
in the year 2002 alone, and $3,885 more over the next 7 years. Overall, 
just so that the record will show, the State of Connecticut would lose 
$1.2 billion in Medicare funding in 2002 alone and $4.1 billion over 7 
years.
  So I just wanted to present that in terms of the record on this 
issue. I thank the gentleman.
  Mr. GUTKNECHT. Reclaiming my time, and I think the gentleman over 
here said at the end of 7 years the program goes bankrupt, then we will 
not pay any benefits at all if we do not make any changes. I think that 
is the issue we are talking about, and all of this is built on 
assumptions. If you assume there can be no changes in all of this, this 
assumes there can be no changes in the way the Medicare system is 
managed.
  Ms. DeLAURO. You know, there is.
  Mr. GUTKNECHT. Reclaiming my time, we assumed in the State of 
Minnesota a couple years ago that health care costs were going to 
continue to go up at double-digit inflation rates. Without any 
significant reform in the Federal level we have demonstrated that that 
was not necessarily the case.
                              {time}  2145

  That is the issue. The system can be reformed. Medicare, in my 
opinion, is the worst of all worlds. What you have is a fee-for-service 
system that cranks down fees. We have cost controls in a fee-for-
service system. That is a prescription for disaster. That is why you 
see the Medicare system going up as fast as it is going without any 
changes.
  I yield to the gentleman from Pennsylvania [Mr. Walker].
  Mr. WALKER. The fallacy of everything they are talking about is the 
fact they go out to the year 2002. Where they have all the figures they 
run up. The whole system collapses, and people end up with nothing, or, 
and this is what we suspect is really the agenda of the other side, 
they come back to the employers and the employees, and they say the 
whole system is collapsing, we now have to ante up. That is a 125-
percent increase on both employers and employees at that point and a 
300-percent increase in copayments for the beneficiary in order to 
maintain the system they now say we ought not touch, there ought not to 
be any change.
  They are willing to risk bankruptcy of the Medicare system. That is 
what they have said all day long on the floor, that bankruptcy is an 
option, because they keep talking about figures that drive the system 
into bankruptcy.
  I think most Americans looking at it think that bankrupting the 
Medicare system in order to serve political purposes is a tragedy. It 
just makes no sense whatsoever.
  Mr. BONIOR. Mr. Speaker, will the gentleman yield.
  Mr. GUTKNECHT. I yield to the gentleman from Michigan [Mr. Bonior].
  Mr. BONIOR. I thank my colleague for yielding.
  I would just like to ask the gentleman from Pennsylvania, who on the 
floor, you just alleged that someone on this floor on our side of the 
aisle made a statement that we were for bankrupting Medicare. Who did 
that?
  Mr. WALKER. If the gentleman will yield.
  Mr. BONIOR. That is an outrageous statement. No one on this side of 
the aisle made that statement.
  Mr. WALKER. You did not listen very carefully. What I said was all of 
the assumptions that were used on the floor today were predicated on 
the fact we only had to worry about the system out until 2002, and that 
all the figures you used that you call cuts in Medicare are, in fact, 
cuts off of a baseline that drives the system into bankruptcy, and so, 
therefore, my point is that the assumption that you are raising is that 
we can continue to spend at the present rates, which we know all know, 
according to the trustees' report, drives the system into bankruptcy, 
and so my point is that virtually your entire argument on your side 
today was predicated on the fact you are willing to allow the system to 
go bankrupt.
  Mr. BONIOR. If the gentleman will yield on that point, I would like 
to respond.
  Mr. GUTKNECHT. Let me respond. Let me just say again, we did not make 
this up. We did not write the report. And we read today in the paper 
this quote: ``Today Medicaid and Medicare are going up at 3 times the 
rate of inflation.'' That is absolutely true. We propose to let it go 
up at 2 times the rate of inflation. That is not Medicare or Medicaid 
cut.
  So, when you hear all of this about cuts, let me caution you that 
this is not what is going on. I did not say that. We did not say that. 
Although we are saying that that is what President Clinton said just 
last year. And so all of this scare-mongering that is going on over the 
Medicare issue, we believe, and I think you would agree, that this 
system can be reformed, we can control costs if we put the right 
incentives. It is happening in the private sector today. That is what 
this debate is about, and I think what the gentleman from Pennsylvania 
[Mr. Walker] is saying, is some people are saying it cannot be 
reformed, it must be allowed to continue to grow at exponential rates 
and that ultimately it will just go bankrupt, and then we will figure 
out how to do something different.
  But if we make the changes this year, we can avoid bankruptcy. We can 
protect, we can preserve, in fact, we believe you can improve the 
Medicare system, provide better care to the senior citizens, keep the 
system solvent and really have a system we can all be proud of. It is 
happening today in the private sector, and those who say it cannot 
happen in Medicaid and Medicare I think are arguing against the facts 
that are happening every day out in the private sector.
  I yield to the gentleman from Michigan [Mr. Hoekstra].
  Mr. HOEKSTRA. I thank the gentleman for yielding.
  What we have been doing for the last number of months, actually what 
we started doing in 1993, we came forward with a budget alternative, 
major conflict within our conference, but we said we wanted to stand 
for a budget alternative and we wanted to have a document out there 
that said that is who we are and what we stand for, and we presented a 
very credible alternative budget.
  We did the same thing in 1994. And what both of those budgets did is 
they prepared us to be able to lead in 1995 to present a credible 
budget, to present a solid plan to get us to a balanced budget by the 
year 2002, to save the future for our kids, and we have a President 
who, running for election, promised that he would be driving toward a 
balanced budget, and we started the budget debate in the Committee on 
the Budget in 1995. What did we see, we saw more of the same, 
continuing $200 billion deficits, no plan to save Medicare, no plan to 
drive down the deficit. As a matter of fact, we saw exploding deficits 
as you went out 5, 6, and 7 years.
  So what we have done is we have put together, we have put down on 
paper, we are out here saying we have a plan. Remember when people used 
to say, ``Why don't those guys stand for anything?'' For 3 years we 
have demonstrated, and now we are going to have the opportunity to 
drive a plan that does exactly what we have been talking about: Tax 
relief for families, a balanced budget. We do go through; you know, we 
eliminate three Cabinet departments. We eliminate the Energy 
Department, we eliminate the Commerce Department, we eliminated 
Education, areas where we do not think the Federal Government has a 
primary [[Page H5179]] role in setting policy. We eliminate 284 
programs.
  In many cases, right now, and in the Economic and Educational 
Opportunities Committee, I think is a great example, we are going 
through a process right now where we have something like 153 different 
job training programs. Take a look at this from a consumer standpoint. 
You are an American citizen out there, and you are taking a look and 
saying, ``I need some help to acquire new skills,'' recognizing that 
jobs are changing, technology is changing, ``I need some help.'' You 
look at this, and you say, ``Whoa, where do I go? There are 153 
different programs? What little box do I fit into? Am I a displaced 
worker? Am I a senior? Am I somebody right out of school? Where is a 
box?'' That does not work.
  What we are doing is we are consolidating that back down into four 
block grants. The money goes back to the States so that for west 
Michigan they can design a training program in conjunction with the 
industry and the people in west Michigan and the local colleges to put 
together a program that works for west Michigan. They can go to 
Detroit, which has different problems, very different opportunities. 
They can develop a program for Detroit. They can build off of successes 
in Detroit. They can go to Minnesota, and the Governor there can put 
together a program.
  What we have done is we have basically eliminated, you know, again we 
are eliminating that bureaucrat in Washington that is standing between 
an individual and that person's need to get new skills, to make them 
more employable in higher paying jobs.
  Mr. GUTKNECHT. So much of what we have seen in the development of the 
bureaucratic welfare state and all the Federal programs, I think they 
all started with good intentions, the problem is they are all built on 
the basic premise the Federal Government knows best. I think what we 
are really seeing is the dabate between those people who believe the 
Federal Government is too big, spends too much, is too bureaucratic, 
has too many rules, and those who believe the status quo has to be 
defended.
  What we have said from the very beginnning, and I think the American 
people said last November the status quo should not live there anymore, 
it is time for some real changed and to shake up Washington, and to 
that end, that is what we are going.
  I want to just remind Members of some campaign
   promises a few years ago. One was to end welfare as we know it. The 
second was to balance the budget within 5 years. And the third was to 
provide a tax cut for the middle class.

  You know, it has been amazing to me the harsh tone of some of the 
rhetoric around here over the last several weeks, because in many 
respects what we are really trying to do is to help President Clinton 
keep some of those campaign promises, because that is essentially what 
we are trying to do. And, frankly, we would expect a little more 
cooperation from 1600 Pennsylvania Avenue than we have had, because 
when you look at our program, it basically is to end welfare as we know 
it, to balance the budget. I personally would like to do it in 5 years. 
I am willing to live with 7. I plan to vote for the Neumann budget. I 
think it can be done, and to provide tax cuts for the middle class. We 
want to keep the economy going. We want to provide more hope, growth 
and opportunity in the private sector. Those are the things we really 
want.
  I yield maybe for some last comments to the gentleman from Michigan 
[Mr. Hoekstra], and then we will finish up and give the other folks a 
chance at this.
  Mr. HOEKSTRA. I think, you know, in summary, you said exactly what 
the key building blocks of what our plan are, much of which were 
outlined in the 1992 election campaign, where at one time they were 
part of President Clinton's agenda, tax relief, reforming welfare, and 
balancing the budget, three components of this plan.
  The reason they are so important is what we talked about earlier. 
This is the type of plan that really puts America back on the right 
road. I mean it is going to mean 7 hard years of work just doing this 
plan. It does not mean we have implemented it. We now are going to have 
to hold our feet to the fire to actually go through and make the tough 
decisions each and every year to stick to this plan, but it is a 
wonderful start.
  I think for you as a freshman, the first budget proposal that you are 
going to have an opportunity not only to vote on but the first one that 
you are going to have an opportunity to pass, because I do believe we 
will pass it tomorrow, I mean I think tomorrow will be a historic day 
where we actually now lay out that plan. We vote on it, and we will 
pass it, and we will pass it in a bipartisan way.
  We are laying the long-term foundation for the contract with our 
children, saying this is the America that we want to leave you, one 
that is fiscally sound, one that will be on a road to balancing the 
budget and one that will also then enable us to start the discussion 
about how we are going to pay down the debt.
  We are going to cut spending. We are returning power to families. We 
are protecting Social Security. We are preserving and protecting and 
improving Medicare, and the most important thing, not only do we have 
the right vision for what we want to accomplish, I believe that 
tomorrow and actually what we have done for the first 4\1/2\ months of 
this year, we have a vision for America, and now we are also providing 
the leadership to actually implement it.
  We need much more than vision. I think, you know, we were talking 
about 1992. Anybody can have a vision. What you have to have is you 
have to have the courage and the demonstrated leadership and the 
capability to lead to make that vision a reality.
  So now we are reaching for that vision. We are putting that vision in 
place for a balanced budget, for more economic opportunity, for a 
better future for
 our kids, and as we start moving there, we can actually start 
expanding our vision for even more improvement in America and a better 
future, so that I think that is a great way to start, and we could not 
have done it without 73 new freshmen here to join us, and thank you 
very much for all that you have contributed to help make these first 5 
months such a historic opportunity not only for the House of 
Representatives but for all of America.

  I thank the gentleman for yielding.
  Mr. GUTKNECHT. I thank the gentleman from Michigan [Mr. Hoekstra].
  I want to close with a few quotes, some of them from this book, 
which, as I say, I read during the district work period, and I found it 
very insightful and instructive.
  I know that some of the Members around here will read this, and there 
are some things in it that are brutally honest, particularly by 
Washington standards, about the culture of Washington and some of the 
things that have happened, and part of the reason we have some of the 
problems in Washington we do have.
  But let me just read one of the quotes that he opens chapter 3 with, 
and it is from Thomas Jefferson. He said:

       I, however, place the economy among the first and most 
     important Republican virtues, and public debt as the greatest 
     of the dangers to be feared, 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.

  I think Jefferson said it so well, and then Tim Penny goes on and 
begins his chapter with these sentences, and I think it really got to 
me. He said:

       This republic is entering its 219th year, and remains the 
     most admired and copied form of government in the world. For 
     192 of 219 of those years, this government shared something 
     that no longer exists, an ethic of frugality.

  I think that is what we are really trying to put back in this 
government, an ethic of frugality.
  If you few look at the back of the book, on the back page there is a 
quotation I paraphrase only slightly, from former Senator Paul Tsongas, 
from the State of Massachusetts, and I love this. He says, ``When the 
inevitable consequences of massive debt are visited upon our children, 
they will ask us why and how it was allowed to happen. There will be no 
good reason to the why.''
  But I think the Members in this body will know how.
  The Chinese philosopher, Lao Tsu, said, ``The journey of a thousand 
leagues begins with a single step''. [[Page H5180]] 
  Tomorrow, as my colleague said, we have an opportunity, in fact I 
think we have an obligation to take the first giant step toward 
balancing this massive Federal budget and bringing this debt into line.

                              {time}  2200

  I think we owe it to ourselves, we owe it to our fellow citizens, but 
most importantly I think we owe it to our children and grandchildren. I 
think it is time for a little common sense here in Washington. I think 
it is time for us to begin the process of living up to our obligation, 
and I think it is time for us to balance the budget. I think the 
American people are way out in front of us, I think they expect no 
less, and I think tomorrow we will make good on that pledge and we will 
begin that process.


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