[Congressional Record Volume 141, Number 85 (Monday, May 22, 1995)]
[Extensions of Remarks]
[Pages E1092-E1093]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                THE REPUBLICANS' BUDGET HAS GOT IT WRONG

                                 ______


                           HON. MARCY KAPTUR

                                of ohio

                    in the house of representatives

                          Monday, May 22, 1995
  Ms. KAPTUR. Mr. Speaker, the Republican budget proposal can be 
summarized as gouging Medicare recipients, nursing home patients, and 
college students to fund over $300 billion in tax breaks for the 
privileged few and to increase defense spending. This is not the 
formula to achieve a balanced budget. What it does is squeeze our 
middle class to reward those at the high end.

                                                            In billions
Medicare benefit cuts.............................................288.4
Medicaid benefit cuts.............................................186.5
                                                               ________

  Total cuts......................................................475.0

Transferred to:

Tax cuts..........................................................353.0
Defense increase...................................................76.3
                                                               ________

  Unnecessary new spending........................................429.3

  Over one-third of the cuts in the Republican budget come from 
sacrifices that will be forced on our senior citizens in the form of 
reduced Medicare benefits and nursing home care. But their budget does 
nothing to actually reduce the cost of health care in our country. Why 
not rein in the insurance companies, the doctors, the pharmaceutical 
companies rather than take it from our seniors? Anyone who has studied 
the Federal budget over the years knows that the most important factor 
driving our budget deficit has been increased health cots.
  I favor balancing the budget. I have voted for a balanced budget. I 
fight everyday to cut wasteful spending. The Republicans want to 
balance the budget on the backs of our grandmothers to turn over nearly 
$350 billion in tax breaks to the rich and powerful. Instead, why not 
get rid of the ``Benedict Arnold'' tax break that allows a U.S. citizen 
who has made his millions here to renounce his citizenship and take his 
millions to some Caribbean island tax free. To balance the budget, 
health services are being cut for those who are most in need of our 
attention: seniors on Medicare, nursing home residents, disabled 
veterans.


                                medicare

  The best way to look at the effects of the budget proposal on 
Medicare recipients is to look at per capita benefits under the 
program. Republicans argue that there are no cuts in Medicare and that 
spending increases over the 7 years of their budget. This is a half-
truth. Their budget falls far short of keeping benefit levels where 
they are today. Their future projections do not offset health insurance 
inflation, rising costs of services, and the 3.5 million more Americans 
who will reach 65 in the next 7 years. Under their plan even the 
current level of Medicare benefits will not be maintained into the 
future. Seniors will end up $3,000 short. This translates into cuts in 
services, rising out-of-pocket expenses, and higher deductibles and 
copyaments for every senior in this Nation--no matter how in need they 
are.
  Medicare population increases: 37.0 million--1996; 40.5 million--
2002.

------------------------------------------------------------------------
                         Money                                          
                      required to     Money                   Additional
                        maintain   proposed in    Medicare       cost   
        Year            current     Republican   short-fall   shifted to
                        services      budget     (billions)    seniors  
                       (billions)   (billions)                each year 
------------------------------------------------------------------------
1995................        179.0        179.0          0.0        $0.00
1996................        196.0        168.0         28.0       744.00
1997................        217.0        180.5         36.5       955.00
1998................        238.0        191.7         46.3      1196.00
1999................        262.0        206.1         55.9      1426.00
2000................        286.0        215.4         70.6      1773.00
2001................        319.5        218.3        101.2      2523.00
2002................        353.8        229.0        124.8      3081.00
------------------------------------------------------------------------

  The Republican budget will ration health care for millions of seniors 
while other Americans who are better off will not face health care 
rationing, but they will continue to pay ever higher prices for health 
care services because the fundamental challenge of health inflation is 
not solved.
  For every senior, this $3081-reduction over current benefits means 
the average American senior has to make it up, either by increased out-
of-pocket payments, reductions in covered services, limitation of 
physician choice, or reductions in already limited physician or 
hospital reimbursements.
  In regard to Medicaid, the Republican budget cuts Medicaid by $187 
billion over the 7 years and shifts the burden of caring for the 
[[Page E1093]] long-term chronically ill from the Federal Government to 
the States.
  Ohio's Medicaid budget is $5.1 billion in 1995. Nursing home benefits 
account for $1.9 billion of that budget or 37 percent. The State 
estimates that Medicaid spending will increase at 8-9 percent a year. 
If the State has to absorb that increase, it will jeopardize OhioCare. 
OhioCare is a health care reform plan which would put all current low-
income recipients on Medicaid into managed care plans and use the 
savings to expand Medicaid coverage to working poor families, thereby 
reducing overall health care costs. In Ohio we are trying to get health 
care costs under control. The Republican budget does nothing about 
them, and it may very well sabotage Ohio's efforts.
  Who benefits from the $353 billion in tax breaks assumed in this 
budget? Fifty-one percent of these breaks go to people who earn over 
$100,000 annually. The most wealthy 1 percent of Americans will get a 
tax cut of more than $20,000. The poorest 20 percent of Americans will 
get an average tax cut of $36. Let's look at some of these.
  Eliminating the alternative minimum tax by 1999 will cost $16.9 
billion--for the first 5 years. The alternative minimum tax requires 
profitable corporations including many foreign corporations operating 
in the United States to pay a minimum amount of corporate income tax 
even if under normal tax rules they can write off all their profits.
  Before the 1986 tax reform, highly profitable corporations were able 
to eliminate their tax liability through various tax loopholes. A 1986 
survey found that 130 of America's largest and most
 profitable corporations managed to pay absolutely nothing in Federal 
income taxes at least 1 year between 1981 and 1985. Forty-two of these 
companies paid no taxes at all for all those years. Congress, in 1986, 
decided that made no sense and established the alternative minimum tax 
so that profitable corporations doing business in the United States had 
to pay something, if only a minimal amount, in taxes to our country.

  The Republican plan includes a $500 tax credit for children for 
families with incomes as high as $250,000. A responsible proposal to 
limit this credit to families making under $95,000 was rejected earlier 
this year.
  Mr. Speaker, over $300 billion in tax breaks in the face of huge 
budget deficits Americans must pay are irresponsible. Tax breaks that 
overwhelmingly favor the richest corporations and individuals are 
wrong. I cannot support them.
  We must get on track to a balanced budget first before we consider 
tax cuts.
  The Republican budget changes the cost of living calculation for 
Social Security benefits, in effect lowering the cost of living by 0.6 
percent. This will reduce the average Social Security benefit by an 
estimated $240 a month by 2002. Their budget commits us to tax cuts for 
the wealthy while cutting essential income for seniors. I can't 
countenance that.
  The Republican budget would make student loan recipients pay interest 
on their loan while attending school. This will increase the average 
student's indebtedness by $3,400. Over the life of the loan the student 
would pay an extra $41 a month, $5,000 in all. The cut would amount to 
$18.7 billion over 7 years. How can anyone justify making it more 
difficult to get a higher education in our country as we enter a new 
century which will be characterized by increased international economic 
competition? I ask you, are the Japanese or the Germans making it 
harder for their children to get the education they need?
  Mr. Speaker, I cannot support this Republican budget proposal. It's 
anti-family at its core. It is ironic that some Members of Congress, 
who earn over $130,000 a year, may think that a budget which gives a 
$20,000 tax break to the richest 1 percent of Americans and pays for it 
by reducing health benefits for our grandmother is good for the 
country. I don't and I won't vote for it.


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