[Congressional Record Volume 141, Number 106 (Tuesday, June 27, 1995)]
[House]
[Pages H6389-H6394]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                          BALANCING THE BUDGET

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Connecticut [Mr. Shays] is recognized for 
60 minutes as the designee of the majority leader.
  Mr. SHAYS. I thank the Speaker for giving me the opportunity to speak 
at this special order and to thank him for his willingness to stay. I 
know the hour is certainly a little late in the east part of the 
country.
  My purpose for speaking tonight is to talk about really a monumental 
event that is taking place this week when the House of Representatives 
and hopefully the Senate will also be voting for the first time in 24 
years to get our financial house in order and balance our Federal 
budget deficits.
  There is a revolution taking place in this country, and I do not 
think people fully grasp it. With the Contract With America, I remember 
during the course of the campaign I would have editorial boards ask me 
how could I have signed this Contract With America. And I responded by 
asking a question. I said what do you think of the majority party's 
Contract With America, the 8 things they are going to do on the opening 
day of the session, the 10 things they are going to do in the first 100 
days? And there was silence, because the majority party did not have a 
plan in the opening day or it did not know what it wanted to do in the 
first 100 days.

                              {time}  2245

  And I said to the editorial boards, is it not remarkable that you 
have a minority party, the Republican Party, that has come forward with 
a plan that does not criticize President Clinton, that does not 
criticize Democrats. It simply outlines what we intend to do if we are 
fortunate enough to get elected.
  This past week, the House and the Senate have agreed to a plan that 
gets us to a balanced budget. And the differences between the House and 
the Senate were not all that different. And yet hearing in the press, 
you would have though that they were very different. What we did is we 
made a determination that in 7 years, we wanted to slow the growth in 
spending so that it would ultimately intersect our revenues by the 
seventh year. And so that by the time we were going to have revenues at 
$1.8 trillion, we would have our spending at $1.8 trillion.
  The red line that you see on this chart illustrates almost a parallel 
line between spending and revenue. They never meet because we always 
spend at deficits. So this was our objective, to get our financial 
house in order and to do it in 7 years.
  The challenge in dealing with this effort was that I, as a Member of 
Congress, along with my colleagues, vote on about one-third of the 
budget. We vote on the pink part of the diagram, of this pie chart. We 
vote on what we call domestic discretionary spending. We vote on 
foreign aid. And we vote on defense spending through the Committee on 
Appropriations. Social Security, Medicare, Medicaid, and what we call 
entitlements, other entitlements, they just happen automatically. They 
are on automatic pilot. They do not get voted on every year. They are 
just part of the law.
  So I do not vote on half of this budget. I vote on one-third, what is 
in the pink. And what is the yellow part is interest on the national 
debt. This year we are paying about $235 billion interest on the 
national debt. That is money that could go for education or 
infrastructure, investment. It is going for interest because past 
Congresses have simply been willing to deficit spend.
  And the whole effort was to not only just look at the red part of 
this budget, what comes out of the Appropriations Committee, but it was 
to look at our entitlements, excluding Social Security, because in
 our Contract With America, we said the one thing that we would not 
change was Social Security, the contract of retirement payments to our 
elderly. But we would look at Medicare and Medicaid to save these 
programs and preserve them and also to slow their growth. We would look 
to slow the growth of other entitlements. We would look to actually 
have absolute cuts in domestic spending and foreign aid and to not go 
higher on defense spending than we are going today. Then we hoped by 
doing that we would shrink what is the yellow and shrink our annual 
interest payments.

  So this was our challenge, to try to deal with the entire budget.
  Now, when people look at this and they say, what did we do? Domestic 
spending, we actually are cutting spending. We are going to spend less 
money next year in domestic spending. That is what runs the judicial 
branch, the legislative branch, the executive branch, all the 
departments in the executive branch that are not defense. And we are 
looking to actually have real cuts, absolute cuts there. Foreign aid, 
we are going to reduce the budget significantly. Defense spending, we 
are looking to hold the line. And the challenge there is that we are 
oversubscribed by $150 billion in the next 7 years, because what 
Congress has done, regretfully, is it has pushed out the expenses of 
some of our procurement for our weapons systems and not had it show up 
in our 5-year budget because they pushed it to the sixth year. So we 
are oversubscribed in our defense spending.
  So what do we have to do? We have to slow the growth of entitlements. 
We have to make real and absolute cuts in our domestic spending, and we 
want to bring interest down.
  Now, people said, when you do that, you are cutting certain programs 
that we are not cutting. One of them was Medicaid. Medicaid is health 
care for the poor, and it is nursing care for the elderly, long-term 
care for the elderly.
  This chart shows that we are actually going to be spending more 
money. In fact, subsequent to the agreement with the Senate, we are 
going to be spending more than you see here. But it goes from $89 
billion, in 1995, to $121 billion. It increases over 30 percent in the 
next 7 years. We are going to be spending more. That is not a cut; that 
is an increase.
  Now, the reason why some people call it a cut is they say they want 
to spend more and we are not spending to that level. We are going to be 
spending to $121 billion. How does that become a cut in some people's 
language? Because, and this is only in Washington that this happens, at 
least I do not know of it happening in people's own family environment 
or in their work place, but in Washington, if it costs $100 million to 
run a program and people say, it will cost $105 million to run the 
program the next year and Congress appropriates $103 million, in 
Washington that would be called a $2 million cut, even though we are 
spending $3 million more. In your home and in your workplace, you would 
be saying, if you spent $100 million and you are spending $103 million, 
that is a $3 million increase in the next year. So we are going to be 
spending more on Medicaid.
  In fact, under Medicaid, we are going to spend over $324 billion more 
in the next 7 years than we did in the last 7. This line shows the 
increase in spending that takes place under Medicaid.
  Only in Washington, when you spend $324 billion more in the next 7 
years 

[[Page H 6390]]
than you did in the past 7 years would some people call it a cut. It is 
not a cut. It is an increase. It is an increase that is quite 
substantive, quite significant.
  Now, when it got to Medicare, we had heard the same argument that 
this Congress was going to be cutting Medicare. The first thing that 
needs to be pointed out very strongly is that Medicare is going to go 
bankrupt in 7 years, Medicare part A. That is the part that goes to pay 
hospital costs. You have Medicare part A, it is funded by taxpayers. 
They put a certain amount of all their income into the Medicare part A 
trust fund. Employers and employees put money in. If you are self-
employed you have to put both sides in. And you put into this trust 
fund.
  This trust fund, as noted in the blue line, starts to go down, it 
starts to go down next year. We have $136 billion in the trust fund 
now. In 1966, next year, it will be $135 billion. Then it goes to $129, 
$117, $98, $72, $37, minus $7 in the year 2002. It literally goes 
bankrupt. There will be no money in the trust fund. The only money that 
will come to the trust fund is the annual amount that will be put in by 
the taxpayer. It goes bankrupt, and we need to rescue this fund. We 
need to save it. Spending is that red line. And what we need to do is 
slow the growth of
 Medicare.

  Now, Medicare is health care for the elderly and the disabled. And it 
is growing at 10 percent. And we need to preserve it. We need to 
protect it, and we need to save Medicare. The way we are going to save 
Medicare is not by taxing more. That is just not going to happen. We 
can affect the beneficiaries, those who receive the benefits; we can 
affect the providers, those who are giving services to the 
beneficiaries. Or we can change the system. And just like with 
Medicaid, Medicare, we are going to change the system.
  We are going to allow people to have the same kind of program they 
have today with a slight increase for some, not all. If you are 
wealthy, I for one am going to be advocating that, if you make $90,000 
as a married couple, you should pay a little more on your premium and 
your copayment. I will be arguing that, if you were single and making 
$70,000, you should be paying more than someone who is below that 
income level.
  But there are other ways that we are going to change this program. We 
are going to strive to move people and encourage them to go from a fee-
for-service into a whole host of different private plans that will 
provide a whole host of different choices. For instance, if you are a 
senior and you only want catastrophic care, you will be able to join a 
plan and you will get an actual rebate. You will get a refund.
  We are going to allow people to have a savings account that will be 
tax-free. You can use it for health care needs tax-free. And if you do 
not have health care needs, you will be able to save it for your 
retirement.
  We are going to allow individuals to join HMO's. The bottom line is 
that, at least from my perspective, we want seniors to be allowed to 
have the same health care that their children and their children's 
children have. And we want those who are poor or individuals on AFDC 
who get Medicaid, we want them to basically have the same health care 
that other Americans have.
  We want in some cases to have managed care for those who want it. And 
in other cases, we want people to be able to have their own 
relationship with their doctor, if they are a Medicare patient and they 
choose to without breaking the law. We want Medicare and Medicaid 
patients to examine their bills and when they find mistakes, and there 
are mistakes, to get 10 percent of whatever they found in mistakes.
  I happen to be the chairman of the Subcommittee on Human Resources 
and Intergovernmental Relations of the Committee on Government Reform 
and Oversight, and we oversee HHS. We are aware of billings that were 
for $16.50 that actually were $16,500. Or it is not unusual and it has 
happened that it has actually been in the hundreds of thousands when it 
was only a bill for $10 or $20.
  Colossal mistakes. The State of Connecticut has determined that their 
hospitals have mistakes in 30 percent of their billings.
  We want people to catch those mistakes. They are going to save the 
Government a lot of money. They are going to save the health care 
system a lot of money, and we would like them to benefit. But Medicare 
part A is going to go bankrupt if we do not slow the growth.
  So what do we propose? We propose to allow Medicare to go up from 
$178 billion to $259 billion. That is a 45-percent increase. Now, only 
in Washington, when you spend 45 percent more in the seventh year than 
you spend today would some people call that a cut. That is a gigantic 
increase. It just does not happen to be as large as some people want.
  In terms of the total dollars, what we spent in the last 7 years to 
what we spend today in the last 7 years, we spent $925 billion. We are 
going to spend $1.5 trillion. In fact now with the agreement with the 
Senate, it is going to go up even more than that. We are going to spend 
$659 billion more over the next 7 years compared to the last 7 years. 
Only in Washington, when you spend $659 billion more in the next 7 
years over the last 7 years do some call it a cut. It is not a cut. It 
is an increase in spending and a quite significant one.
  Some have said, you are going to spend more on Medicare, but what is 
going to happen to the per beneficiary? They are not going to get any 
more because there are more beneficiaries in the system. There are more 
people who need the care.
  What this chart illustrates is that in 1995 we spent $48,000 per 
beneficiary in Medicare, and in the year 2002, under the House, it was 
$61,361. And I will illustrate in a new chart that that number is going 
up now that we have our agreement with the Senate.
  These next two charts illustrate the annual growth in spending that 
will take place if we do nothing. If we do nothing, Social Security 
will go up at 5.4 percent a year. If we do nothing, Medicare will go up 
at 10.1 percent a year and become bankrupt and run out of funds in the 
seventh year. If we do nothing, Medicaid is going to go up at 10.8 
percent and other entitlements at 8.4 percent. Interest will go up 
nearly 6 percent. Defense spending will go up a percent a year. Foreign 
aid will go up over 2 percent a year. Domestic discretionary will go up 
2.3 percent a year.
                              {time}  2300

  There is if we do nothing. What we are looking to do, Mr. Speaker, is 
to change the growth of these programs. What happens, and Members can 
compare the chart at the bottom now to the one at the top, we are going 
to allow Social Security to go up at 5.1 percent a year, Medicare is 
going to go up at 5.5 percent a year, not 10.1 percent, Medicaid is 
going to go up 4.5 percent a year, not 10.7 percent.
  Other entitlements, which we have made significant changes on, that 
is welfare, it is food stamps, it is agricultural subsidies, we are 
controlling the growth of these programs so they will go up at 3.9 
percent a year. All of the entitlements are going to go up. They are 
simply not going to go up as much as they would if we allowed or took 
no action.
  Interest becomes quite significant. Instead of it going up at nearly 
6 percent a year, because of the budget changes we are making, the 
total payment on interest will go up less than 1 percent.
  In this chart, defense spending is going up a half a percent a year, 
but with the new agreement with the Senate, it will not go up basically 
at all during the next seven years. It will not decline, but it will 
not go up. Foreign aid will go down 5.4 percent each year, and domestic 
discretionary will go down 1.6 percent a year.
  It is fair to say that Republicans are going to cut domestic 
spending. We are going to have not just real cuts, we are going to have 
absolute cuts in those programs. Foreign aid will go down. Defense 
spending will stay basically the same. Interest payments will go up 
slightly, and then we have true growth in Medicare and Medicaid and 
other entitlements.
  What I would like to do now, Mr. Speaker, is just go through a number 
of charts, since the President has come in with his proposal on what we 
should do to balance the budget. Before I talk about what the President 
is actually doing, what Members see in this chart, the green line is 
the Congressional Budget Office. They are the ones that look at 
everything we do in Congress and make sure our numbers add up. 

[[Page H 6391]]
The White House has its Office of Management and Budget. They do the 
same thing.
  Historically, the Congressional Budget Office and the Office of 
Management and Budget in the executive branch do not always agree on 
their economic forecasts, but they have consistently, the White House 
has consistently said to us that we need, that we need to make sure 
that we use one group to analyze our numbers. The organization that the 
White House has said we should use is the Congressional Budget Office. 
They are the ones who have said ``Use the Congressional Budget Office 
when you use your numbers.'' That is what we are doing.
  All our projections are based on what the Congressional Budget Office 
says in terms of their analysis of everything that we do in Congress. 
Regretfully, the Congressional Budget Office and the Office of 
Management and Budget are going in two different directions.
  The Office of Management and Budget has basically said, OMB, that 
revenues will come in stronger than we think they will in the 
Congressional Budget Office, and expenses will not be as strong. They 
said if we take no action in the 7th year, the Office of Management and 
Budget, our deficit would be $266 billion. The Congressional Budget 
Office said that if we take no action, our deficit will be $454 
billion.
  The next chart illustrates what happens to the President's own 
projections when the Congressional Budget Office looks at it. Members 
may remember that the President chose not to come in with a budget to 
reduce our deficits. He basically said ``Congress, you do it.'' We are 
doing it. We are happy to do it. We have waited a long time to have 
this opportunity to lead this country, so we said that we wanted to 
balance the budget in 7 years. The President was critical of that 
effort, and basically said that we did not need to be focused so much 
on reducing our annual deficits.
  I need to make this point, because it is central. Not only are we 
trying to get our financial house in order, we are trying to change 
this government. We are trying to change this social corporate welfare 
mentality into an opportunity society. We are trying to change this 
caretaking government into a caring government.
  We are trying to change an experience that we are seeing throughout 
this country of 12-year-olds having babies, of 14-year-olds selling 
drugs, of 15-year-olds killing each other, of 18-year-olds who cannot 
read their own diplomas, of 24-year-olds who have never, ever had a 
job, not necessarily because there are not any jobs, and 30-year-old 
grandparents. A society that exists with that type of thing happening 
cannot long endure.
  Therefore, we are not just trying to get our financial house in 
order, we are trying to change our government in the process. We are 
trying to make it smaller, we are trying to make it more efficient, we 
are trying to reduce the layers of bureaucracy within departments, 
where 11 people might have to make a decision on what action government 
should take, when in the private sector they try to get it down to two, 
three, or four layers.
  What did the Congressional Budget Office say about the President's 
10-year plan to balance the budget? Because Members may remember, a 
week or so ago the President said that we needed to balance our budget, 
not in 7 years, but in 10 years. In the process of doing that, there 
were some Republicans who were critical of his effort, more Democrats 
who were critical, but a number of Republicans welcomed the President 
stepping in and saying balancing the budget was important. I happen to 
think we should be balancing the budget in 5 years, not 7, so I 
certainly do not think 10 is good enough.
  However, what was important is that the President recognized the need 
to balance the budget. He validated in that process the fact that we 
can do it with no tax increase. He validated the fact that we are not 
cutting Medicare and Medicaid, we are slowing the growth. Those are his 
words, and those are our words. That is exactly what we are doing. He 
even validated the fact that we can balanced the budget and have a tax 
cut at the same time, because we are paying for the tax cut.
  What did they say happens, the Congressional Budget Office? There are 
four lines in this chart. The current law is, if we do nothing, the 
national debt, the annual deficit will be $454 billion under current 
law. In the seventh year, really the year 2002, and we are using the 7-
year budget, and we are going to balance the budget in 7 years, if we 
do nothing, our annual deficit that year will be $340 billion. Mr. 
Speaker, a deficit is not the debt. The deficit is the difference 
between revenues, revenues and expenses, and when you have expenses 
above revenues, you have this deficit.
  They are saying that this deficit will be here, expenses will be 
here, revenues will be here, and we have $340 billion of deficit. At 
the end of the year it is taken and added on top of the national debt, 
and the national debt just keeps getting bigger and bigger and bigger. 
Our national debt keeps going up every year, even if our deficits get 
smaller, because our deficits keep adding to the national debt.
  They said under current law, the deficit will be $340 billion. They 
then said under the President's own plan in February that the deficits 
keep going up. He did not give us a 7-year budget, he gave us a 5-year 
budget, but in the fifth year the deficit goes, in the fourth year, 
256, the fifth year 276. It just keeps going up. This is the reason why 
we 2 years ago opposed the President's plan. We knew his annual 
deficits would keep going up and that he had not resolved that.
  Mr. Speaker, what we did is we came in with a 7-year plan. Our 7-year 
plan is the green line that touches zero in the seventh year. That is 
scored by CBO, and they point out, in fact, that we will have a $1 
billion surplus, not a lot of money compared to all those deficits, but 
what a change. Then what they did is they analyzed the President's new 
budget, and when they analyzed the President's new budget, it is the 
red line. Members will notice it is parallel. It stays around $200 
billion in deficits each year.
  The President's new budget goes from $175 billion to $196 billion to 
212. These are deficits. Then it goes to 199, to 213, to 220, to 211, 
210, 207. It is just above that $100 billion amount. It never becomes 
balanced. When the President said in the 10th year, scored by the 
Office of Management and Budget, yes, they say it becomes balanced, but 
when we use the Congressional Budget Office, the organization the 
President told us all of us should use, it never becomes balanced.
  Mr. Speaker, let me just show a few more charts. I noticed my 
colleague, the gentleman from Michigan [Pete Hoekstra], has come to the 
Chamber. I would love to engage him in this dialogue, because he is 
really one of the key experts on this issue.
  If I could just continue to go through these charts, I do not know if 
on the TV screen Members can see the difference between the two red 
lines and the two green lines. The red lines are the President's budget 
and the green lines are the House budget scored by OMB and scored by 
CBO, CBO being the congressional budget.
  When we compare the President's budget to the House budget, it is 
interesting to note that the President said ``I am going to balance it 
in 7 years.'' That is the one with the red lines and the dots. In the 
10th year he says it is balanced. That is when his budget is scored by 
the Office of Management and Budget. It is balanced in 10 years.

                              {time}  2310

  When the Congressional Budget Office scores his budget, they say it 
never becomes balanced. It is basically that parallel line to the zero 
deficits.
  When the Congressional Budget Office scores our budget, they say we 
are balanced in 7 years. But this is really, I think, an interesting 
point.
  When the Office of Management and Budget takes a look at our budget, 
when they are forced to use their projection of revenues and expenses, 
they basically say, we will balance the budget now in 6 years and not 
7.
  What the President has done is he has compared his OMB scoring of 10 
years to our CBO scoring of 7. He has either got to compare his OMB to 
our OMB or his CBO to our CBO. The bottom line is we are going to 
balance it in 7 years under CBO and scored by his office, we balance it 
in 6 years.
  I have 4 more charts. I will run through them fairly quickly.
  Medicaid Spending. The President said he is only going to slow the 

[[Page H 6392]]
  growth of Medicaid by $54 billion. That is the red line. He said, ``But 
the House Republicans are going to cut the growth by $187 billion.''
  The problem is he is comparing OMB scoring of his budget to CBO. If 
we compare OMB to OMB, if he has $54 billion of cuts in the growth, 
then we are only $119 scored by OMB. But, more importantly, if we are 
slowing the growth by $187 billion, we have to score his number $122 
billion. He is not $54 billion scored by CBO. He is $122 billion. In 
other words, we need to compare the same scoring. When you do that, you 
realize that the President is cutting a lot more from the growth in 
spending than he wishes to claim.
  The same analogy on Medicare. He says he is going to slow the growth 
of Medicare by $127 billion, scored by OMB. But when the Congressional 
Budget Office scores what he does, they say he slows the growth by $192 
billion. When you compare the $192 billion to our number of $288 
billion, they are a lot closer.
  In fact, when you consider the per-beneficiary, and this is before we 
had our agreement with the Senate, the per-beneficiary goes from, the 
President, from $4,700 to over $7,000, and the House, $4,800 to $6,300.
  This chart, the last chart, illustrates the per-beneficiary cost of 
Medicare. Now with the House and Senate agreement, you will realize 
that the President is slightly higher in per-beneficiaries but not all 
that much. The problem with the President is, in terms of his plan, he 
attempts to slow the growth of Medicare. He goes from $4,700 to $7,128 
in the seventh year. We in our House and Senate agreement go from 
$4,800 to $6,667. We are less than $400 apart.
  The difference is we want to change the system. We want to save 
Medicare, we want to preserve it, but we want to change it. We want 
people to have the opportunity to have a whole host of different plans, 
whereas the President has not said how he will slow the growth of 
Medicare.
  There are extraordinary things taking place down here. I do not think 
people fully grasp it. There is a revolution going on. I will conclude, 
and I would like to invite my colleague to add some comments. I will 
conclude by making this comment:
  When we had our Contract With America, which my colleague, the 
gentleman from Michigan [Mr. Hoekstra], helped lead and helped create, 
created the idea, created the Capitol steps event and had a lot to do 
with what went in our contract, as my colleague knows, before the 
election, people said, well, this would cost Republican votes. We did 
not lose one Republican who ran who was an incumbent and we picked up a 
whole new number that gave us a majority.
  Then people said, well, this was a contract but you used it to get 
elected but you wouldn't implement it. We implemented it in the first 
day and then the first 100 days.
  Then people said, well, moderate Republicans would not get along with 
conservative Republicans. This is what the press was saying. We got 
along just fine, thank you, because we have waited 40 years for the 
opportunity to help lead this country and candidly to help save it.
  Then they said, ``Well, you're getting along all right in the House 
but you're not going to get along with the Senate.'' I happen to like 
the Senators. I think a lot of my colleagues like the Senators. We meet 
together and we talk about this shared problem of how we save this 
country.
  Then they said, ``Well, you voted for the balanced budget amendment 
but you're not going to vote to balance the budget.'' We are voting to 
balance the budget. In fact, I remember some saying, ``You know, you 
boxed yourself in. Now you're going to have to do
 it.'' You know, in a way we did. In a way we did what Cortez did when 
he sailed to the new world. He sailed to the new world with this 
opportunity, as he saw it, to claim this land for Spain and for the old 
world, but what he did, he saw his sailors looking back to the east and 
longing to be back in the old world. So he burned the ships. In a sense 
that is what we have done as Republicans. There is no going back for 
us. We are not looking back at the old world. We are looking at this 
new world. We have burned our ships. If we don't get our financial 
house in order, my feeling is we don't deserve to come back. If we 
don't change this government, my sense is we don't deserve to come 
back.

  I mean, that is what we are about. The old world is behind us, the 
new world is in front of us. I appreciate the patience of my colleague. 
I would love at this time to invite him to make some comments, because 
I know you have been at the very center of what I have been talking 
about.
  Mr. HOEKSTRA. I thank my colleague for yielding.
  Mr. Speaker, I could not help but watch this special order when the 
gentleman started about 30 minutes ago, and remembering my commitment 
that I would come down and join if he started before 11:00.
  Mr. SHAYS. But I kept you waiting a long time, did I not?
  Mr. HOEKSTRA. That is fine.
  I think the words that you started your special order with were 
talking about the discussions that we really had 14, 15 months ago, 
talking about what kind of an agenda and what kind of platform are we 
going to run on as Republicans, in walking away from the easy answer 
which is saying, let's run a negative campaign, and talking about now, 
let's not worry about what the other side is doing, what the other side 
is saying, let's identify our agenda, what we want to do, the positive 
message that we believe we can carry to the American people because of 
the great faith that we have in our country, in the American people, in 
our ability to bring all of these people together to re-create and to 
renew this country. We ran on a positive agenda.
  We then came in and, as my colleague recounted, we did what we said 
we were going to do. We are continuing to do it.
  I went back and got this document, this is the Congressional Record 
for yesterday. It is pretty much a pro forma day. But the first 
document that was put in there was Permission to Have until Midnight 
Tonight to file the Conference Report on House Concurrent Resolution 
67, the Concurrent Resolution on the Budget for Fiscal Year 1996. This 
is it. This is the document that a year ago, 6 months ago, 6 weeks ago, 
6 days ago all the critics were saying we could not do, that first we 
could not as House Members on the Committee on the Budget get to a 
budget resolution that would balance the budget within 7 years. Then 
they said, ``Well, yeah, you're right, the House could do it but you'll 
never get a similar-type document out of the Senate.'' The Senate came 
through in great form and they delivered a budget document that got the 
balance.
  As happens, their document was different than ours, and the people 
came back and said, ``Now there's no way you'll ever reconcile the 
differences between the two.'' We now have, and I believe on Thursday 
we will have the opportunity, hopefully in both the House and the 
Senate, to pass a budget resolution, the same budget resolution which 
gets us to a balanced budget by the year 2002.
                              {time}  2320

  So we have moved from a process of talking about change, having a 
positive message, to taking one more step to actually delivering 
positive change, and as we have had so many people come into the Budget 
Committee and testify, Alan Greenspan coming in and talking about what 
the importance is of having a balanced budget, not only to business and 
industry, but to families, people buying a mortgage. I believe a number 
Mr. Greenspan has quoted is we may see up to a 2-percent benefit on 
home mortgage and long-term interest rates and short-term interest 
rates.
  Mr. SHAYS. I would love the gentleman to yield to me, because I 
remember when we were there, when Mr. Greenspan was before the Budget 
Committee and one of our colleagues said, ``Are you not concerned that 
Congress will cut too much?'' He responded in the way that only he 
does. He said, ``You know, Mr. Congressman, I do not go to sleep at 
night fearful that when I wake up Congress will have cut too much.''
  Mr. HOEKSTRA. I do not think that has been a problem. The nice thing 
about going through this process is we have recognized, despite all of 
the rhetoric, and Mr. Greenspan knew this, to get a balanced budget we 
did not have to radically go through and cut spending; we had to slow 
the growth of the 

[[Page H 6393]]
Federal Government. And coming from the private sector, I would have 
taken these kinds of budgets and these kinds of cuts almost any time 
because the private sector is going through much more difficult and 
aggressive cost-cutting procedures than what we are doing. We are 
slowing the growth. We are still spending at a roughly 3-percent to 4-
percent increase.
  Mr. SHAYS. About a 3-percent increase. In fact when we looked at what 
we are spending now we spend about $1.5 trillion. In the seventh year 
it will be $1.8 trillion. That is an increase in spending by anybody's 
definition.
  Mr. HOEKSTRA. That is right; and as we have taken a look we are 
increasing spending, we are going to have to reassess some priorities, 
because we are going to be moving money into high-priority programs, 
programs like Medicare, Medicaid, those types of programs, as we reform 
them we are still going to be increasing this per beneficiary from I do 
not know of the latest numbers, but I know in the House budget 
resolution we are looking at going from roughly $4,700 or $4,800 per 
beneficiary to over $6,000 per beneficiary.
  Mr. SHAYS. Actually with the Senate agreement, it is going to be 
about $6,600.
  Mr. HOEKSTRA. So we are significantly going to grow. We are expecting 
that we are going to have reform, so we are going to be able to deliver 
the same if not better health care to our seniors than what we are 
getting today.
  So we have an opportunity to go through programs, yes, we are going 
to have to downsize and eliminate some programs. We are going to have 
an opportunity to go after waste, fraud and abuse more aggressively, 
but as we take those savings some of those will go toward deficit 
reduction, others of those dollars will go towards programs we have 
identified as having a high priority, and we are still going to be 
getting increased revenue. So we are going to be spending more money in 
7 years than what we are today, and all we have to do is now manage 
ourselves and discipline ourselves over the next 7 years and we will 
get to a place where we wanted to be for a long period of time.
  Mr. SHAYS. I was elected to the State House in Connecticut in 1974, 
and started by first year in 1975, and I continually watched Congress 
deficit spend, and in the State House I was not allowed to do that, 
thank goodness; we always had to have a balanced budget. And when I was 
elected 7 or 8 years ago, and as the gentleman was elected shortly 
after that, I mean we weighed in and said the most important thing 
obviously before we do all of the other things is to get our financial 
house in order. So I cannot emphasize how thrilling this week is for 
me. It is one reason why I wanted this special order. I basically 
waited 20 years for this opportunity, and now you and I are able to be 
part of an effort to get our financial house in order. As the gentleman 
pointed out, we are still going to allow spending to go up, we are just 
going to slow the growth.
  I do not know if the gentleman has thought much about the challenge 
we had when we had the debate on the school lunch program and the 
incredible feeling I had when I went home one weekend and I saw the 
President in a school saying we were eliminating the school lunch 
program, apropos of your whole issue of whether we are spending more. I 
thought, what idiots.
  Why would this Congress be doing this. I remember coming back and 
saying how could you of all things cut
 the school lunch program. And speaking to the appropriators, they said 
wait a second, we are taking it off as an entitlement. We are going to 
spend 4.5 percent more each year for the next 5 years, 4.5 percent more 
each year instead of 5.2 percent. Then they said, but we are going to 
also allow State and local governments to be more flexible with how 
they use it so they can target the funds better. I can remember the 
President saying we are going to eliminate school lunch for poor kids. 
Then I thought of my daughter, if I can just make this last point, I 
thought of my daughter who comes from a family who obviously makes a 
decent amount of income, and I realized that my daughter's lunch is 
subsidized, 17 cents in cash and 13 cents in commodity. Why would my 
daughter's school lunch be subsidized? Because we have a Federal 
program that subsidizes everyone.

  Mr. HOEKSTRA. I am well aware of what went on with school lunch. It 
came out of the Committee on Economic and Educational Opportunities.
  Mr. SHAYS. The gentleman's committee.
  Mr. HOEKSTRA. My committee. I can only say I think our committee let 
our colleagues on the Republican side of the aisle down, because when 
we went through this, we had discussions about where are we taking the 
school lunch program. We said, No. 1, we are going to reform it, we are 
going to take the program from Washington and we are going to move the 
program to the States and the local school districts, so we are going 
to get Washington out of the way and out of this program. Why are 
people in Washington monitoring what kids are eating in Holland, MI, or 
Zeeland, MI, or anywhere in the country. It is a bureaucracy that does 
not need to be there.
  So let us get rid of the bureaucracy, which will do a couple of 
things. It will free up more money for buying food and actually getting 
food to kids, and very different from all of the other block grants, 
this is one where we then went through and we said OK, we are going to 
increase spending. Other block grants, Governors have come back to us 
and said if you get rid of all of the rules and regulations, all of the 
red tape, we can deliver the same level of service at 90 percent of the 
dollars, 95 percent of the dollars, and we said well in school lunch, 
it is too risky, we want to make sure that these kids are fed. We are 
going to give them a 4\1/2\ percent increase for each of the next 5 
years. So we thought fine, we have gotten rid of the red tape, the 
rules and regulations, the bureaucracy. They are getting more money. 
This cannot be controversial.
  Mr. SHAYS. It is a win-win, right?
  Mr. HOEKSTRA. It is win-win. All of a sudden we come to the floor and 
we see people on TV, and it is the sky is falling, and you know, this 
is my second term, so this is my third year here, and you are kind of 
looking around and saying, ``Whoa, what's happening to us here, we are 
giving them more money, we have gotten rid of this, and there are 
people that are going out and saying we are eliminating the program.'' 
Then you take a look at it and you say, ``There are even people 
printing this as fact.'' It has taken a while, but there are other ways 
to get information out, and the truth eventually comes out, and the 
truth has come out on that program.
  Mr. SHAYS. Basically it was an excellent opportunity for all of us to 
learn a lesson, and we talk about not being school-lunched again on 
other issues. It is the same way with Medicaid and Medicare. We are 
going to be spending more money and we are going to make sure that we 
are not being school-lunched on these two programs, that people truly 
understand what is happening.
  Mr. HOEKSTRA. I know that as I went back for a whole series of town 
meetings in April when the school lunch debate was at its peak, you 
kind of go back and say, ``Wow, I am really going to be prepared to 
address the issue, because I am going to get a lot of questions on 
it.'' It was very surprising, because even as I think much of the media 
had not covered the debate very accurately, it came up, and people 
understood the issue, and they understood it a lot better than what I 
thought they might. They had gone through the clutter and taken a look 
at what was really going on. The gentleman brought up his daughter. I 
had people actually coming to me and saying, ``Can you explain to me 
exactly why the Federal Government is even doing a school lunch 
program?'' We have moved a significant distance away from, ``Whoa, you 
are cutting these programs out.''
  But the gentleman is absolutely right. We are going to spend a lot of 
time over the next 6 months because the process now is the 
authorization bills, the appropriations bills, that put a real life 
into this budget document.
                              {time}  2330

  Because those are the bills that now actually carry out the budget 
document. Those are the ones that change our policies. They change our 
priorities. They focus dollars where we want them focused. They change 
the way that we actually start doing business.

[[Page H 6394]]

  And I think as you said earlier, they start changing the way that 
America works so that we can use these dollars in a much more 
constructive way.
  We have recognized the problems that ineffective Washington spending 
has reaped on this country. The symptoms are here in Washington. They 
are around in our urban centers around the country. They are in our 
smaller communities, our rural communities.
  We are going to go after those problems and we are going to move 
accountability and responsibility to where change can be affected most 
efficiently and most quickly, which is at the local level.
  Mr. SHAYS. You know, during the course of your last comments, you 
pointed out that our budget resolution, which is really a plan and an 
agreement between the House and the Senate on how we are going to reach 
a new deficit by the seventh year, has to be implemented by the 
Appropriations Committee that will make decisions on defense spending 
and domestic spending; will have to be implemented by the Ways and 
Means Committee that makes decisions on taxes; Ways and Means and 
Energy Committee making decisions on entitlements.
  So all of this, we are going to be doing a lot of wrestling in the 
next three or four months. And the key point as far as I am concerned 
is that the President needs to weigh in in a positive way. And I have 
made a determination, with a number of my colleagues, that I am not 
voting to increase the Federal debt ceiling. If the President is not 
going to weigh in on getting this budget balanced, our financial House 
in order, too often we have allowed the debt ceiling to climb, we are 
willing to shut down government.
  Not essential services, but we are simply willing to shut down the 
government and call the question. And I wish it had happened 10 years 
ago. If it had happened 10 years ago, we would not be in the mess we 
are in today.
  But as you point out, a lot of what we intend to do is to move this 
government from the Federal to the State and local level. And as I 
think about it, and I have to admit that I did not use to think this 
way. I used to think if people had different shoe sizes, the Federal 
Government would make sure that everybody had the right shoe size.
  Instead, Washington tries to make one size fit all. So if people have 
a size 3, or some 18 or 16 or 15 or 10, they create and we create the 
shoes in the size of 9 and say: Everybody has got to wear them.
  I would prefer Mississippi to have a system that fits them; Michigan 
to have a system that fits them; and for us in Connecticut to have a 
system that fits our needs and our concerns.
  Mr. HOEKSTRA. I think of much of what we do in Michigan would work in 
Connecticut. We will export our solutions over to you.
  Mr. SHAYS. I will jump in, because that is what you do with your 
governor. Governor Engler has made a lot of exciting reforms and the 
reforms are coming from states like Michigan where you have seen 
welfare reform and other reforms that the Federal Government has been 
reluctant to take.
  Mr. HOEKSTRA. Yes, the next 5 or 6 months will be tough. We have a 
lot of work to do, even though we now have a budget document. There are 
issues that you and I will disagree on.
  I think the exciting thing about the process that we have gone 
through in the last 6 months, and that we look forward to in the next 6 
months, is that we have a large group of Members who do have their 
sights on the same vision: Creating a better America; understanding the 
things that we need to do to get there; understanding the many 
different strategies. Differing on some of the projects, but 
recognizing that an ability to dialogue, an ability to work together in 
a partnership, both on this side of the aisle, across the aisle, to the 
Senate, hopefully to the President, back to grassroots America. That 
through that dialogue and through that partnership, and only through 
that dialogue and only through that partnership, will we reach the type 
of solutions that get us to our objective and get us there in a very 
positive and constructive way.
  So we are going to have to work through lots of differences on 
projects, but we recognize that we have to work through those 
differences. We have to reach agreement. And that as we reach 
agreement, we, together, will reach the goals and the missions that we 
have outlined.
  So I think it is going to be a tough 5 or 6 months. It is going to be 
a very satisfying 5 or 6 months, because at the end we will have made a 
difference. We have been working at it for a long period of time. And 
we are going to take some gigantic steps in 1995 and then we have 6 
more years of work to do to make sure that we get to that zero, because 
we have to stay disciplined for that time.
  I thank the gentleman for sharing this time with me.
  Mr. SHAYS. I thank the gentleman. I agree so strongly with the 
gentlemen words, I would like them to be what is the last words and I 
yield back my time.


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