[Congressional Record Volume 141, Number 104 (Friday, June 23, 1995)]
[Senate]
[Pages S8996-S8997]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE BUDGET CONFERENCE AGREEMENT

  Mr. GREGG. Mr. President, I want to talk a little bit here today, 
however, about the budget conference agreement which has just been 
reached, because I do think there has been some information presented 
in the community at large that is inaccurate and misleading. This 
budget conference, which I had the opportunity to serve on, has reached 
agreement between the House and the Senate as announced last night by 
Leader Dole and Speaker Gingrich. It is a very positive event for 
America. It is the first balanced budget in 25 years, something we are 
in dire need of if we are as a nation to put our fiscal house in order 
and to pass on to our children a country which is prosperous rather 
than a country which is bankrupt.
  Those of us who have been working hard in the effort of trying to 
bring fiscal responsibility to this Government, to make sure we have a 
nation that does not continually spend away the legacy of our children, 
are proud that we have been successful in developing this budget. I 
think there are some points about the balanced budget that need to be 
noted. As we go into the debate next week, I am sure there will be a 
lot of discussion and a lot of hyperbole. But I hope we begin from a 
basis of fact.
  Some of the facts that are important are these. First, if we continue 
on our present course of spending, the Medicare trustees have told us--
and four of the Medicare trustees happen to be members of the 
administration, including the Secretary of HHS and the Secretary of the 
Treasury--have told us that the Medicare trust fund will go bankrupt in 
the year 2002. Under the law, once the Medicare trust fund goes 
bankrupt it cannot spend any money. There will, therefore, be no health 
insurance program for our seniors. This needs to be addressed. The 
conference agreement which we have reached addresses that issue and 
reverses that insolvency situation.
  Second, we know that if the Federal Government continues to spend in 
the pattern which is presented in the original budget of the President 
and in the President's budget as recalculated, the President's most 
recent budget as recalculated by CBO, that we would add over $1 
trillion of new debt to our children's shoulders over the next 7 years. 
That would be a burden that would be unfair to load on them and which 
we cannot afford to do. I am glad to report that this budget conference 
does not do that.
  This conference leads us to a balanced budget and, as a result of 
leading us to a balanced budget, it takes out of the debt stream almost 
$1 trillion. That is debt our children will not have to pay. That is 
interest on that debt that we and our children will not have to pay. 
That is very important.
  Of course there are a lot of side effects that are very positive to 
reaching a balanced budget and to passing this resolution. They include 
the fact that for the first time in 25 years, the world community will 
be able to look at this country and say we have our fiscal house in 
order. As a result, interest rates will come down for Americans and 
that will benefit us as a Government, but more important, it will 
benefit our citizens for, in borrowing to buy a home or improve on 
their home or to buy a car or to educate themselves or their children, 
they will pay significantly less because interest rates will have come 
down as a result of us passing this conference report, which is a 
balanced budget. So that is some of the good news that comes from this 
proposal.
  I heard reported on the news--and this is what I wanted to 
specifically address this morning--as I was coming in, by a national 
organization funded by the Federal Government, that this budget 
proposal cuts Medicare by $270 billion and increases defense spending 
by $33 billion. If you wish to compare apples to oranges, and you wish 
to take great leave with the English language, maybe you could say 
something like that. But if you wish to be at all accurate or fair, you 
would have trouble defending that statement.
  The fact is, Medicare spending goes up significantly under this 
budget. Under the present projected spending patterns, Medicare will 
increase at 10 percent annually for as far as the eye could see. We 
cannot afford that rate of growth. That is three times the rate of 
inflation. It happens to be 10 times the rate of inflation in the 
private sector's premium costs on health care. And if it continued to 
grow at that rate, as I mentioned earlier, the trustees of the Medicare 
trust fund have told us that the Medicare system would go bankrupt.
  But there is no proposal to cut Medicare. There is no proposal at all 
to cut Medicare. There is a proposal to slow that rate of growth, to 
slow that rate of growth to 6.4 percent, which happens to be twice the 
rate of inflation. What does that mean in real dollars? It means over 
the next 7 years we will be adding in spending to Medicare, $349 
billion over what would be a freeze baseline. In other words, if you 
froze spending today, you would pull that straight line out, and this 
is what we spend on Medicare today. How much will we spend over the 
next 7 years? We will be increasing spending by $349 billion. In fact, 
over the next 7 years, we will spend more on Medicare than was spent 
over the last 7 years. What will the average recipient see as a result 
of this increased spending? They will see that instead of getting 
$4,300 today in benefit support payments, they will be getting $6,300 
by the year 2000. And in the year 2002 alone, the increase in Medicare 
spending will be $96 billion.

  How some national news media say we are cutting Medicare is beyond 
me, but they say it. Unfortunately, they are supported in that frame of 
reference by folks who are activists here in Washington. But it is 
inaccurate. It is inappropriate.
  What we are doing in this proposal is proposing to slow the rate of 
growth in Medicare. That is accurate. We are proposing it because, if 
we do not do that, the Medicare trustees have told us that the system 
will go bankrupt. The way we are proposing to slow that rate of growth 
is, I think, constructive. We are going to say to senior citizens in 
this country, you can have more choices for health care. Instead of 
using fee-for-service, which is the most expensive system, we are going 
to give you the choice of also using fixed-cost health care such as 
HMO's, PPO's, things like that. It will allow you to purchase a health 
care system at the beginning of the year for a fixed cost and get all 
of the health care provided to you by one group. It will not say that 
you have to do that. You can still stay with fee-for-service, if you 
want. But if you decide to go to an HMO, we will encourage you to do 
that. As a result, we will slow the rate of growth.
  There will also be some other action taken but it will be directed at 
making the system more efficient, more cost responsive, and continue to 
deliver first-class quality care. But under no circumstances will there 
be any cut in Medicare.
  The same is true of Medicaid. There is no proposal to cut Medicaid. 
Yet, if we are to listen to some of the media descriptions of this 
budget conference, you would assume there was, because they say there 
is. Actually, Medicaid spending will go up $149 billion over the next 7 
years. Yes, we are going to slow the rate of growth in Medicaid 
spending again. We have to. Otherwise, we end up bankrupting our 
children's future. But there is no proposal here to cut it; it is to 
slow the rate of growth. And we will continue to deliver first-class 
service and, in fact, I think we will end up with better services 
because hopefully we will send these dollars back to the States with 
fewer strings attached. As a result of doing that, I am sure the State 
governments--as the Presiding Officer, who was Lieutenant Governor from 
the great State of Ohio, knows--will deliver those services much more 
efficiently and better once they are freed from this huge bureaucracy 
which is

[[Page S8997]]

the Federal Government. More people get more dollars in support of 
their needs, rather than more bureaucrats getting more dollars in 
support of their needs.
  So the statement that we are cutting Medicare is inaccurate on its 
face. We are increasing Medicare spending by almost $349 billion over 
what would be a freeze level of 6.4 percent annually, a huge increase. 
Probably most healthy, it will still be the fastest growing function of 
the Federal Government.
  Yet, if you were to listen to this news report, you would presume 
that we were slashing Medicare in order to increase defense. Well, 
Medicare will be the largest and fastest growing function of the 
Federal Government as result of this conference report.
  And what will happen to defense? It goes down. It does not go up, it 
goes down. The representation that we are increasing defense spending 
is once again on its face wrong. If you were to take today's defense 
number and freeze it for 7 years, of that number defense spending will 
go down by $15 billion over next 7 years. Essentially, it is flat 
funding. That would be the best way to describe it. But in real terms, 
it goes down $15 billion.
  So the Defense Department accounts go down, and the Medicare accounts 
go up dramatically, which is the policy that is correct, by the way. 
That is exactly what we should be doing. We should be trying to get the 
Medicare system into a position where we can afford it, and into a 
position where the trust fund will be solvent. We must face the fact 
that we are going to have to downsize the military in the face of the 
post-cold-war period, and as a result of downsizing the military, less 
military spending will occur.
  This is what this conference accomplishes. Overall, what the 
conference accomplishes is something that no other Congress has been 
able to do for 25 years. It balances the Federal budget. It slows the 
rate of growth of the Federal Government. It does not actually cut 
spending over that period, overall Federal outlays. In fact, overall 
Federal outlays will go from $l.5 trillion in 1995 up to $1.875 
trillion in the year 2002. There will be an annual rate of growth of 
the Federal Government of 3 percent. But, as I stated earlier, in 
getting to a balanced budget, it eliminates almost $1 trillion of what 
would have been deficit spending had we stayed on the glidepath 
presented by the President. Well, there was no glidepath presented by 
the President. It was sort of a take-off path by the President in the 
deficit area; or if we just let things be as they are.
  The reason we have done this is very simple. If we continue to run 
these deficits, if we do not address this issue now, as I said earlier, 
we will pass on to our children a nation which is bankrupt. That is not 
fair, and it is not right. It has been said many times on this floor by 
many members of our party that our reason, our purpose, in seeking this 
position here in the Senate is to put the fiscal house of the Federal 
Government in order--to downsize the Federal Government, and to return 
authority and the dollars to the States. This budget is the first step 
in accomplishing that goal.
  I certainly congratulate Senator Domenici, who is the driving force 
behind developing this budget on the Senate side; Chairman Kasich, on 
the House side; and, obviously, Speaker Gingrich and Leader Dole, for 
having the foresight, the vision, and the courage to put together this 
most extraordinary budget which will pass to our children a very 
critical gift, which is the gift of a Government that is fiscally 
sound.
  Mr. President, I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. DeWINE). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DOLE. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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