[Congressional Record Volume 141, Number 145 (Monday, September 18, 1995)]
[House]
[Pages H9035-H9036]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            MEDICARE REFORM

  Mr. GOSS. Mr. Speaker, the rhetoric has gotten pretty thick and 
possibly even a little sick around here recently, even by Washington 
standards. That is why I thought it would be helpful to take a look at 
the bigger picture. Specifically, I would like to take a moment this 
morning to investigate the long-term ramifications if we heed the 
advice of House Democrats and ignore the pending bankruptcy of the 
Medicare reform situation.
  This chart, compiled by the bipartisan Kerrey Commission on 
entitlements, which I served on last year, states in no uncertain terms 
the dire consequences of inaction, of doing nothing. As you can see, in 
this area here, under current trends, by the year 2012, this year right 
here, which is only 17 years away, outlays for entitlement spending and 
interest on the national debt will consume all tax revenues. That is 
the green line. When this line is exceeded by any one of these columns, 
we are spending more than we are taking in. And in this case, 
entitlement spending and interest alone on the national debt will 
consume all the revenues we have collected by the Federal Government. 
There will be nothing left for anything else, law enforcement, 
military, or anything like that.
  By the year 2030, entitlement spending alone will consume all tax 
revenues collected by the Federal Government. This is a major crisis, 
albeit it is a little hard to grasp and it threatens every Federal 
program, including the entitlement programs themselves, whether they 
are Medicare, Medicaid, veterans, even Social Security. You name it. We 
have to do something.
  Mr. Speaker, what is driving this explosion in entitlement spending 
which we are seeing in this chart? There, in fact, are many factors, 
but primarily it is the out-of-control and gigantic increases in 
Medicare spending. We all know that the Medicare trustees' report 
states that the Medicare part A trust fund will be bankrupt in 7 years, 
in the year 2002. Ninety percent of Americans understand that according 
to the polls.
  Mr. Speaker, essentially we have two options. We can reduce costs and 
reform the system now, which is what the Republicans are trying to do, 
or we can wait and raise taxes again later, which seems to be the plan 
of the Democrats.
  A study conducted by John Berthoud of the Alexis de Toqueville 
Institute underscores the dire ramifications of raising taxes rather 
than addressing the inefficiencies in the current system right now 
today.
  His study backs up the Medicare trustees' own numbers showing the 
potential disaster for future beneficiaries and taxpayers. If we do not 
act until 2002, as the other side seems to advocate, the payroll tax 
would have to more than double, rising from the current 2.9 percent 
level to 6.81 percent just to bring the fund into long-term balance. A 
tax hike that steep would mean over $1 trillion in taxes over the next 
7 years alone on American taxpayers.
  Mr. Speaker, to bring that astounding number into human terms, a 
worker earning $45,000 would have to pay an extra $1,500 in 
nonrefundable payroll taxes annually. That would be $4 a day more every 
day, Saturday and Sunday and holidays included, $4 more in taxes every 
day just to cover the trust fund of Medicare if we do not act now. And 
that is just part A.
  Assuming middle-of-the-road projections, the part B taxpayer subsidy 
will grow to $147 billion by 2004 if allowed to remain in auto pilot, 
which is where it is now. That is four times what it is today.
  Mr. Speaker, where are we going to get that kind of money, $147 
billion? You guessed it, from the taxpayers. The leadership on the 
other side of the aisle last week in the Washington Post accused 
Republicans of playing a shell game and disguising the real costs of 
Medicare reform. What they really should acknowledge is the tremendous 
cost of maintaining the status quo and the increasing cost of the 
future status quo they advocate.
  Mr. Speaker, my constituents gave me a clear message over the August 
break: Go back to Washington and do what it takes to fix the problem. 
They have seen payroll taxes increase before, in fact, 23 of them in 
the past 27 years. Twenty-three payroll taxes and they know that isn't 
the answer.

[[Page H 9036]]

  By expanding choice and utilizing reforms that have worked in the 
private sector, we cannot only save the Medicare program and strengthen 
it for our current and future beneficiaries, but we can also provide a 
brighter future for our children and grandchildren. We do have a 
program that will work and that is what we are going to do, hopefully 
with the bipartisan support and hopefully with constructive cooperation 
from the White House. Meanwhile, all the scare ads on TV, the class 
warfare stirred up by the liberals, and the generational debate hyped 
by the cynics does not solve the problem and does not make America a 
better place to live.
  Mr. Speaker, the Republicans are trying to offer a positive solution 
to a real problem. Even if we do not get all the details exactly right 
the first time, we will get the details right and we will have made an 
important change for every American's quality of life and pocketbook.

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