[Congressional Record Volume 141, Number 149 (Friday, September 22, 1995)]
[Senate]
[Pages S14132-S14134]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. MACK (for himself, Mr. Dole, Mr. Lott, Mr. D'Amato, Mr. 
        Kyl, Mr. Shelby, Mr. Bennett, Mr. Gramm, Mr. Nickles, Mr. Roth, 
        Mr. Frist, Mr. Craig, Mr. Santorum, Mr. Bond, Mr. Faircloth,  
        and Mr. Cochran):
  S. 1266. A bill to require the Board of Governors of the Federal 
Reserve System to focus on price stability in establishing monetary 
policy to ensure the stable, long-term purchasing power of the 
currency, to repeal the Full Employment and Balanced Growth Act of 
1978, and for other purposes; to the Committee on Banking, Housing, and 
Urban Affairs.


          THE ECONOMIC GROWTH AND PRICE STABILITY ACT OF 1995

 Mr. MACK. Mr. President, today I am introducing the Economic 
Growth and Price Stability Act of 1995. This legislation aims to 
accomplish two major goals. First, it focuses the Federal Reserve on 
achieving price stability. Second, it repeals the Full Employment and 
Balanced Growth Act of 1978--the 

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Humphrey-Hawkins Act--which codified the Keynesian principles that 
advocate government fine-tuning of the economy.
  Based on the fundamentally flawed premise that government can manage 
the economy, the Humphrey-Hawkins Act set targets for the economy to 
reach an unemployment rate of 3 percent for individuals over 20 and 4 
percent for individuals over 16 and an inflation rate of 3 percent 
eventually moving to zero. Almost 20 years later, we know that this law 
has never achieved any of its intentions. This law proves that 
government cannot legislate prosperity--the reality is that individuals 
create jobs and free markets lead to prosperity.
  By codifying unrealistic goals, the Humphrey-Hawkins Act gives the 
Fed an unachievable mission to artificially boost growth and employment 
while keeping inflation and interest rates low. This promotes fine-
tuning of monetary policy by the Fed in response to current economic 
trends. While this may lead to short-term economic boosts, over the 
long term such intervention by the Fed leads to higher inflation, 
higher interest rates, and more frequent recessions. The Economic 
Growth and Price Stability Act corrects this problem by focusing the 
Fed on the only goal it can effectively achieve: price stability. 
Focusing the Fed on price stability will lead to a sounder dollar, more 
stable financial markets, increased employment, and greater long-term 
economic growth.
  The Economic Growth and Price Stability Act gives the Fed the 
responsibilities of defining price stability, charting its own course 
toward achieving and maintaining it, and setting its own timeframe for 
accomplishing the price stability goal. By allowing the Fed to create 
its own timetable, we can rest assured that transitional effects on 
employment and output will not occur.
  Under my legislation, the Fed will still be required to report to 
Congress on a semiannual basis, but it will additionally be required to 
explain, in verbal and numerical terms, its definition of and its 
methods for attaining price stability. By not mandating inflation 
targets, this legislation places the burden on the Fed to appropriately 
define price stability. As we all know, the market is a harsh task 
master, and I believe it will be the best judge of the Fed's progress.
  The Fed will have a strong incentive to make correct decisions about 
its definition of price stability and its method for achieving it, 
because the markets will be quick to express their views. The Fed will 
pursue price stability honestly and openly, because if it does not, 
long term interest rates will rise.
  Instead of countercyclical, command and control, government 
interventionist economics, the Economic Growth and Price Stability Act 
sets in place a free market paradigm. Under the Economic Growth and 
Price Stability Act the principal economic responsibilities of 
government are to establish and ensure an environment conducive to 
long-term economic growth and increases in living standards by 
maintaining free markets, low taxes, respect for private property, and 
the stable long-term purchasing power of the U.S. currency.
  If the elections in November 1994 taught us anything, they taught us 
that the American people want less government, not more. The Economic 
Growth and Price Stability Act recognizes that the American people know 
what is best for them and directly responds to their demands. I hope 
you will join me in this vital effort to free our economy from 
government mishandling.
 Mr. D'AMATO. Mr. President, I am proud to cosponsor with 
Senator Mack, the Economic Growth and Stability Act. As chairman of the 
Joint Economic Committee and a member of the Banking Committee, Senator 
Mack has studied economic issues studiously. I commend him for this 
initiative.
  This bill would repeal the Humphrey-Hawkins Act, which sets the 
current guidelines for the Federal Reserve's conduct of monetary 
policy. The multiple goals of Humphrey-Hawkins, however laudable, are 
conflicting and unattainable. In the long term the Fed can only address 
inflation. Unemployment and other such matters are the responsibility 
of the administration and Congress--which we control through our 
spending and tax decisions. Under this bill, we could no longer lay the 
blame of failed fiscal policy at the foot of the Federal Reserve.
  Senator Mack's bill would recognize that the appropriate goal for the 
Federal Reserve is maintaining price stability in the long term. The 
Economic Growth and Price Stability Act recognizes that a key factor in 
encouraging growth is a stable environment in which to make decisions 
about the future. In an atmosphere of assured price stability, American 
families and corporations would be better able to budget and plan for 
the future. Assuring this steady level of capital investment and growth 
will create the jobs necessary to keep Americans' working.
  The policies and school of thought behind this legislation are sound. 
Federal Reserve Board Chairman Alan Greenspan has testified that ``a 
key ingredient in achieving the highest possible levels of 
productivity, real income, and living standards is the achievement of 
price stability.'' The Economic Growth and Stability Act is a critical 
step in this direction.
  Working together, the Federal Reserve can tackle inflation while the 
Congress, with the right fiscal policy, can stimulate long-term growth. 
We must return to a period of strong growth for our country to prosper 
and remain globally competitive. We owe it to ourselves and our 
children.
                                 ______

      By Mr. THOMAS (for himself, Mr. Grassley, Mr. Jeffords, Mr. 
        Frist, Mr. Simpson, and Mr. Burns):
  S. 1268. A bill to provide assistance for the establishment of 
community rural health networks in chronically undeserved areas, to 
provide incentives for providers of health care services to furnish 
services in such areas, and for other purposes; to the Committee on 
Finance.


                    the rural health development act

  Mr. THOMAS. Mr. President, I rise today to introduce the Rural Health 
Development Act, an act that I have worked on for some time, to help 
rural communities design a delivery system that fits their unique 
health care needs. It has been a project, in fact, that I have worked 
on since the day I arrived in the House, more than 5 years ago. This 
issue and these items continue to be a top priority for me here in the 
Senate. I am pleased that my colleagues, Senators Grassley, Jeffords, 
Simpson, Burns and Frist, have joined me in this effort. They, too, 
have worked feverishly on behalf of the rural communities in their 
States.

  Rural health care, Mr. President, as you know from your State, is at 
a crossroads. My bill provides for an infrastructure needed to create a 
system of quality health care for rural families. There are a number of 
problems that are unique to rural areas--the lack of physicians, 
nurses, health care extenders, nurse practitioners, and physician 
assistants. We are troubled by the closure of small hospitals where the 
utilization has been relatively low, and leaves a community without 
some kind of emergency medical service.
  Inadequate and unequal Medicare reimbursement is a problem today. So 
we have what we think is a solution. It helps communities develop their 
own health care delivery system. It assists in recruiting and retaining 
physicians. It improves educational opportunities for nurses, 
physicians, physician extenders, and other kinds of health 
professionals. It allows hospitals to downsize without losing their 
emergency room capacity. In short, it is a long-term solution tailored 
to the needs of rural areas.
  Specifically, it provides technical assistance. Small grant funds are 
provided to help communities to design their own network, not one 
designed by outside consultants who are only familiar with the 
characteristics of larger places. Second, these funds can be used for 
two purposes--to build telemedicine systems to assist rural areas, and 
coordinate arrangements between primary care clinics, emergency medical 
centers, and tertiary care facilities.
  Finally, the result to rural individuals, families and employers is 
the ability to take advantage of cost savings that occur elsewhere, 
which has not been able to occur in rural America.
  We equalize the Medicare reimbursement rates. Rural counties receive 
significantly less reimbursement from 

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Medicare managed care programs. For example, Fall River County in South 
Dakota, receives $177 per month, per beneficiary versus $678 for Bronx 
County in New York--a 367 percent difference.
  My bill reduces this variation and reimburses rural providers 
relative to their metropolitan counterparts. The result, of course, is 
that Medicare beneficiaries in rural areas will have the opportunity to 
participate in managed care plans.
  Third, it improves the educational opportunities for nurses. Nurses 
are a critical component to rural health care. My bill guarantees that 
20 percent of all scholarships offered through the National Health 
Service Corps go to nurses in rural areas. Since 1972, over 70 health 
care providers have served in Wyoming through the services of the 
National Health Service Corps Program. So we put greater emphasis 
there.
  Regarding recruiting and retaining physicians, Medicare currently 
provides a 10 percent bonus in rural areas. Ten percent is not much of 
an incentive. So it is increased to 20. To compensate for the increase, 
the bonus is restricted to primary care physicians in rural areas.
  In addition, the bill guarantees 24-hour emergency care. Medicare 
currently restricts States from establishing limited-service hospitals. 
As a result, many facilities either have to operate as full-service 
hospitals, with very low utilization, or close. We are suggesting they 
be recategorized as a rural emergency access care hospital so that 
indeed they can be reimbursed from HCFA for these emergency services.
  In conclusion, Mr. President, as we search for solutions to deliver 
health care throughout the country, the Rural Development Health Care 
Act is one proposal that should be added to the list. Many of the 
provisions have received a favorable response--so much so that they are 
likely to be folded into the reconciliation package.
  More important, the Rural Development Health Care Act provides the 
answer to rural communities that are looking to keep up with the 
rapidly changing health care environment.

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