[Congressional Record Volume 141, Number 162 (Thursday, October 19, 1995)]
[Senate]
[Pages S15333-S15334]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     BUDGET FANTASY VERSUS REALITY

  Mr. KYL. Mr. President, I would like to continue discussing the same 
subject that the Senator from Wyoming and the Senator from Minnesota 
have been discussing, and to do so by, first of all, focusing on some 
of the myths that have been created by the President and by some of his 
supporters here in the Senate. I am talking about the difference 
between the budget fantasy and the reality that faces us here today. It 
is almost an ``Alice in Wonderland'' exercise where words take on 
meanings that are only in the eye of the beholder and have no 
relationship to actual reality.
  Frankly, they are the last desperate attempts by proponents of big 
Government to cling to the status quo, which means more spending, 
higher taxes, and greater regulation. That is really what this exercise 
in opposition to a balanced budget and tax cuts is all about.
  Many of the Democrats cannot believe, let alone accept, that the 
American people overwhelmingly rejected their approach to governing in 
that way in last fall's election. Rather than attempting to fulfill the 
mandate which the American people gave us, they are now cynically 
pandering to the mandates while doing everything they can to undermine 
it.
  In this topsy-turvy ``Alice in Wonderland'' change, the meaning-of-
words situation they have created, spending cuts are increases; 
spending increases are cuts. For example, claiming that a Medicare 
spending increase of $2,000 per person over the next 7 years is 
actually a cut when, in fact, it is a $2,000 increase.
  Tax cuts, they say, are spending increases. Tax relief for families 
become tax cuts for the rich. A volunteer in AmeriCorps is actually 
paid by the taxpayers $20,000, $30,000, or $40,000 a year. Tax 
payments, the President says, are contributions. Preserving Medicare is 
slashing Medicare. And, of course, bankrupting Medicare is saving it.
  President Clinton is even now so bold as to blame Republicans, not a 
single one of whom supported his budget in 1993, for forcing him to 
raise taxes. It is like ``the old devil made me do it'' skit that we 
used to see on TV. He says he wishes he had not increased the taxes. I, 
too, wish he had not increased taxes. But at least our attempt to 
reduce taxes by $245 billion is a beginning, a partial rollback of this 
tax increase which he now wishes he had not imposed upon the American 
people.
  Here are some examples of increases that the Democrats claim are 
cuts.
  The Republican Party has said all year that we would not balance the 
budget at the expense of Social Security. The budget reconciliation 
bill will 

[[Page S 15334]]
not touch Social Security retirement benefits or cost-of-living 
adjustments, COLA's. Social Security will increase 43 percent, from 
$336 billion this year to $482 billion 7 years from now.
  Medicare--we are going to increase Medicare spending, not cut it. 
Medicare will grow from $178 billion in 1995 to $274 billion in 2002, a 
54-percent increase. Spending per beneficiary will rise from an average 
of $4,800 today to more than $6,700 in the year 2002, almost a $2,000 
increase, as I said before.
  Student loans--we have heard a lot about that. Student loan volume 
will grow from $24 billion in 1995 to $36 billion in the year 2002, a 
50-percent increase. The maximum Pell grant will be raised to $2,440 
next year, the highest level it has ever been.
  By the way, we could send a whole lot more needy kids to school with 
Pell grants, eight or nine for every single AmeriCorps volunteer that 
we pay a salary to.
  Here are some examples of cuts that the Democrats claim are actually 
increases.
  Defense spending declines from $270 billion in 1995 to $264 billion 
in 1996. That is $6 billion less. Defense spending is not going up. It 
is going down.
  Here is an example of spending increases that many of the Democrats 
not only call cuts but claim are tax increases as well. Only in 
Washington can such distorted logic have any semblance of credibility.
  Talking first about the earned income tax credit, we will spend more 
on the EITC program every year between now and the year 2002. Spending 
will rise from $19.8 billion in 1995 to $22.8 billion in the year 2002. 
The maximum credit for families with one child will rise from $2,094 in 
1995 to $2,615 in the year 2002. For families with two children, it 
rises from $3,100 next year to $3,888 in the near 2002, and the 
examples go on.
  The Democrats not only call that a cut, but a tax increase on low-
income families. If you are eligible, you get a check from the 
Government to offset any income tax liability you might have under that 
program, plus any excess to which you are entitled. Eighty-four percent 
of the program costs are cash grants. The program is run through the 
Tax Code because it is more efficient. It requires less bureaucracy. 
But it is just not possible that you can be hit by a tax increase if 
you get back all of your tax payments plus more. It cannot be a tax 
increase.
  Here are some examples of tax cuts that they claim are spending 
increases. They claim that allowing individuals and businesses to keep 
more of what they earn is a subsidy that is equivalent to direct 
spending. But as Llewellyn Rockwell, Jr., pointed out in a column in 
the Washington Times on September 18 of this year, I am quoting:

       A subsidy means the Government is giving money to you that 
     originally belonged to somebody else. Dairy farmers, for 
     example, are subsidized. That means they get money that the 
     tax man extracted from the taxpayers.

  ``Next word: deduction. That's when you were allowed to count some of 
your income as off limits to the tax man. You can take a deduction for 
mortgage interest. A portion of your own money stays in the bank.''
  Democrats claim the tax relief for families is a tax cut for the 
rich. The fact is over 70 percent of the tax cuts included in the 
Finance Committee bill go to families with incomes of less than $75,000 
a year.
  Let us talk about the AmeriCorps for a moment. The GAO estimated that 
the program cost nearly $27,000 for each ``volunteer,'' and I put 
quotation marks around that word ``volunteer'' since they are paid that 
salary. In fact, that salary is more than the average American earns in 
a year. Paying people makes them employees, in my view, not volunteers.
  For the average of $20,000 to $30,000 cost per year for each student 
in AmeriCorps, as I said, eight needy students could get Pell grants at 
$2,400 apiece. The fact is Americans aged 18 and up volunteer 19.5 
billion hours of their time, which is a 50-percent increase in the 
number of hours since 1981. We do not need to pay people to be 
volunteers under AmeriCorps.
  Another one of these Alice in Wonderland meaning changes is calling 
taxes contributions. Referring to tax increases he would be proposing, 
President Clinton, in an address to the public from the Oval Office on 
February 15, 1993, said:

       We just have to face the fact that to make the changes our 
     country needs more Americans must contribute today so that 
     all Americans can do better tomorrow.

  I have an idea, Mr. President. Let us just call these contributions 
voluntary and we will see how much in the way of contributions are 
received. There is nothing voluntary about the income tax.
  On Medicare, President Clinton says, ``The Republican plan would 
dismantle Medicare as we know it''--the Washington Post, September 16, 
1995--despite the fact that six Medicare Board of Trustees, five of 
whom are Clinton administration appointees, issued a report in April, 
with which we are all familiar, which stated that ``The Medicare 
Program is clearly unsustainable in its present form and will become 
insolvent within the next 6 to 11 years.''
  Mr. President, the reality is clear. Medicare benefits will be cut 
off completely unless we act now. If Medicare goes bankrupt, which 
could happen as early as the year 2002, according to the trustees, by 
law no payments could be made to Medicare beneficiaries for hospital 
care, doctor services, or any other covered benefit.
  Even the Washington Post has condemned the duplicity of those who 
would oppose solving this Medicare problem. In a lead editorial on 
September 25, 1995, the Post wrote:

       The Democrats have fabricated the Medicare tax connection 
     because it's useful politically. It allows them to attack and 
     duck responsibility, both at the same time. We think it's 
     wrong.

  The editorial, by the way, was entitled, ``Medagogues, Cont'd.''
  It is no wonder, Mr. President, that the American people are 
frustrated and angry. We need to keep the promise we made to the 
American people to balance the budget by the year 2002.
  The Congressional Budget Office has certified that our budget will do 
just that. We have abided by the Congressional Budget Office, the 
agency that the President praised for its accuracy in budget 
forecasting in 1993. But while we have abided by the CBO's 
scorekeeping, the same entity the President praised 2 years ago, the 
President himself has changed the numbers to make his alternative 
budget balance by the year 2005. He has used the numbers from his own 
office rather than the Congressional Budget Office. As former CBO 
Director Robert Reischauer put it, ``He lowered the bar and then 
gracefully jumped over it.''
  Let me close by saying that it is unfortunate that the President 
would change the numbers in order to get his budget balanced rather 
than face the tough realities we have had to face in putting together a 
budget which we know will balance by the year 2002. I think we owe it 
to our children and grandchildren to do that, not to hand them the debt 
that we have accumulated over the years we have been here.
  We have a historic opportunity this year. Not since 1969 has Congress 
had a chance to vote on a balanced budget. And I do not think we can 
miss this opportunity. It is not just because of the politics of it. It 
is because of the children and grandchildren who are going to follow us 
and who do not deserve to have to pay off the debts that we have 
accumulated.
  So I am very hopeful that we can support the budget that will be 
presented, the reconciliation bill that will be before us next week. I 
think if we do that the American people will say thank you for keeping 
the commitment that you made to us in 1994.
  Mr. COCHRAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Mississippi.

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