[Congressional Record Volume 141, Number 165 (Tuesday, October 24, 1995)]
[Senate]
[Pages S15510-S15513]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      CHANGE THE BUDGET STATUS QUO

  Mr. THOMPSON. Mr. President, I appreciate the recognition.
  First of all, I want to commend the distinguished Senator from South 
Carolina for his usual eloquence. I 

[[Page S 15511]]
think if I ever had a case to litigate in court that I want him on my 
side. Apparently, a lot of people in South Carolina over the years have 
felt the same way.
  He brings to this discussion a unique perspective of someone who has 
been in this body for many years, having served as Governor before his 
service in this body. Great experience--he has been through the budget 
years, budget battles.
  It is always enlightening to hear an analysis of history--ancient 
history, recent history--as to how we got into the fix that we are in 
this country, whose fault it has been in the past, and what 
calculations that were made in the past that turned out not to be 
correct, and the political battles back and forth.
  It is also interesting to hear from someone with such vast knowledge 
and experience as to how these deficits are figured, whose figures are 
to be used, whose figures are to be trusted and all of that.
  However, Mr. President, I cannot bring to this discussion that kind 
of richness of historical perspective. I bring, as many of my 
colleagues here in the Senate, including my colleague from Tennessee 
who occupies the chair now, a different perspective.
  That is, one from someone who has not been in this body, has not been 
in politics as far as that is concerned, over the years, and perhaps 
who views this a bit differently, from a different perspective.
  That is, simply--regardless of all of that--we are simply spending 
more than we are taking in. We are simply bankrupting the next 
generation. We simply have to do some things differently in this 
country.
  I think probably the best service that analysis of the past can be is 
an example of what we should not do. Sometimes I wonder whether or not 
we should not, with regard to our fiscal policies in the past, with 
regard to so many of our social policies, we should not carefully 
analyze what we have done over the years and do the exact opposite.
  I think as far as these fiscal problems are concerned, all I know is 
that we have that problem; the American people know we have that 
problem. They sent some of us here to address that problem in a 
different way than has been addressed in times past.
  We stand here now on the brink of what I feel is a historic 
opportunity to address this for the first time in decades. Others would 
disagree and say we have tried various things before and they have 
failed. We tried some things and they worked for a while and we backed 
off again, which to me is a pretty good argument for a constitutional 
amendment to balance the budget. That is a debate for a different time.
  The chairman of the Budget Committee, as I read in this morning's 
paper, called this reconciliation package the culmination of his life's 
work. He is not a person to use language loosely, and I am sure he 
feels that way, and I am sure it is the case.
  It has been a remarkable life's work and I think it points out the 
way in which serious people view this serious problem and where we are. 
That is, on the brink of perhaps a historic occasion for the first 
time, perhaps, in this generation, to really try to get a grip on a 
problem that is strangling our Nation, that will undoubtedly engulf the 
next generation if we do not face up to it and do something about it.
  Anyone who reads history will see that history is full of occasions 
of great powers having great economic viability and power and success 
and great military powers, and countries come to the top and they rule 
the world on occasion for periods of time, in ancient times, and they 
become the major economic powers of the world for periods of time.
  Invariably, as the Bard would say, they strut and fret their brief 
hour upon the stage and then they move on. They decline, through 
laziness, laxity, corruption, for whatever reason, they move on. And 
they fade into the sunset and they are no longer militarily or 
economically powerful.
  One looking at the United States of America by any measurable 
criteria--economic, socially, or perhaps any other criteria--could make 
a pretty good case that the United States of America is on the 
beginning stages of that kind of decline. I think just within the last 
few years that people have taken note and made a decision in this 
country that we are not going to let that happen to the United States 
of America, that we are going to do something really unprecedented in 
world history, and that is to stop ourselves in mid-decline and to 
correct that course.
  For years in this country we have somewhat recognized these problems, 
but basically roll them over for the next generation to deal with. We 
have thought that we could have our cake and eat it too. We have 
thought that we could socially engineer our ways out of almost any 
problem and do it from Washington, DC.
  These things have not worked. Now we are in a position of having to 
correct some false assumptions that we have made and some false basis 
for policies that we have had in this country for some time now. That 
should not be a remarkable occurrence and it should not be something 
that should be extremely disturbing to many of us.
  This must happen in an individual's life. In the life of a nation, 
Thomas Jefferson, as we heard so often quoted in the balanced budget 
debate back a few months ago, pointed out that we need to reexamine 
ourselves every once in a while. Even our form of government, in some 
basic ways, should be reexamined and challenged from time to time. 
Different way of doing business. Certainly these policies that are 
based on nothing more than a series of legislative enactments should 
undergo that kind of scrutiny. That is what we are doing now. That is 
what we are doing.

  We have operated under the assumption that we could cure poverty in 
this country by spending our way out of it, that as long as we were 
spending vast sums of money this was demonstrating our commitment to 
those less fortunate. It made us feel good.
  Basically, of course, we were spending other people's money, folks 
out there working for a living, paying taxes, and they were footing the 
bill as always. But we felt basically the end would justify that, 
because we could eradicate poverty in this country, basically. We, of 
course, gave no account, apparently, to basic tenets of human nature, 
that we could not spend $5 trillion on a problem such as this without 
creating dependency. We gave no accounting to the obvious fact that we 
cannot micromanage people's behavior from Washington, DC. But we spent 
$5 trillion and now we have, perhaps, basically the same rate of 
poverty that we had in this country when we started.
  We developed a program for health care coverage for the elderly back 
in 1965. A lot of Democrats and Republicans joined together at that 
time to institute Medicare and also Medicaid. At the time the Ways and 
Means Committee estimated the hospital insurance part A would cost $9 
billion to finance in 1990. In 1990 hospital insurance actually cost 
$67 billion. Medicaid, a narrowly defined program buried in the 1965 
bill that created Medicare, of course provides health care for low-
income Americans. It was intended to cost about $1 billion annually. By 
1992, expenditures had ballooned to $76 billion. In 1995 it was $89 
billion. Of course that is the Federal Government's share alone, the 
States spent another $67 billion.
  So it is clear that we miscalculated, that we have operated under 
false assumptions, and that we must have some midcourse correction here 
in order to save the very thing we say we want, because the results of 
these policies, the results of this miscalculation, has left us in a 
sea of debt. It has slowed down the economy. We now have the lowest 
savings rate in the industrialized world. We have one of the lowest 
investment rates among our trading competitors, and it has left our 
growth rate at about half what it usually is coming out of a recession 
in this country. It is making it more difficult for us to compete in a 
global economy with nations that measure their wages in pennies instead 
of dollars, and our work force here is insufficiently trained to meet 
that. This is all in the context of an economy about which a good 
argument can be made, based upon our savings rate and our growth rate, 
that our investment rate is basically, long range, long term, slowing 
down--slowing down.
  We have seen the result of our social policies. Mr. President, it is 
not going to matter all that much whether we 

[[Page S 15512]]
balance the budget or not if out-of-wedlock births become the norm in 
this country. It is not going to matter whether we have a tax cut or 
not if juvenile crime makes it so that nobody can even get out on the 
streets anymore in this country--and that is what it is coming to.
  At a time when many of our prime statistics are leveling off, 
juvenile crime is now skyrocketing. Drug use among the juvenile 
population is now skyrocketing. So we have a slowing economy and 
terrible social indicators, where out-of-wedlock births exceed 50 
percent in most of the major cities now.
  Probably worst of all, I think, is a growing cynicism among the 
American people. The dissatisfaction you see, the third parties we hear 
being talked about, the aftermath of these activities of some of our 
law enforcement agencies, have people who are big, strong, conservative 
law enforcement people saying, ``Wait a minute, this is not the way it 
ought to be. This is not the Government I know. I feel disassociated 
from that kind of Government, that way of doing business.'' This is in 
a country where 75 percent of the people consistently say they want a 
particular policy--term limits is one example--and nothing ever 
happens.
  All of that, all of that is a result, a culmination of years and 
years and years of policies that may have worked for a while and that 
certainly were based on good intentions by those who instituted them. 
Certainly some remnants and some parts of some policies are worth 
saving, and then there are some that were outright wrong from their 
inception and were based on fraudulent premises. A combination of all 
of that has led us here with these problems.
  We talk about the last election. I do not think people got up on 
Election Day last time and started loving Republicans across the 
country. I think we benefited from the fact that we were not in, that 
we were out. I think, more than anything else, it had to do with people 
wanting some kind of fundamental change in the way we were doing 
business in this country on a fundamental basis, and they were willing 
to give us a narrow window of opportunity to see if we could do 
something about it. That is why so many of us came together and decided 
we would take a handful of things, but a handful of the most important 
things facing this country, and try to do something about them that is 
different fundamentally--and they are come together in this 
reconciliation package.
  It had to do with the commitment to balance the budget of this 
country. It had to do with a Medicare system that everybody knows 
cannot continue the way it is. Changes have to be made or it will not 
be with us. It had to do with a failed welfare system where $5 trillion 
has created more social havoc than we would have believed imaginable. 
And it had to do with leaving a few more dollars in the pockets of 
those who earned the dollars in the form of a tax cut. They were laid 
out in the campaigns last time and people responded to them, and they 
are looking to see now whether or not we are going to keep that 
commitment.
  Everyone can be debated and will be debated, but I think it is good 
for the system and the American people to see it all debated out, 
because there are two sides to most of these issues. But after all is 
said and done, the time is running out for us to make fundamental 
change and it is going to have to be done and it is going to happen on 
our watch.
  I am proud to be here for that historic occasion, when I think that 
will happen. The easy thing to do, always, is to maintain the status 
quo, to nibble around the edges, to really do just enough to make 
people think you are doing something without doing enough to really 
have any effect on anybody's life so you will be subject to criticism. 
We can argue over whose figures to use and all that. But I think the 
President's so-called second budget is a good example of that. He 
apparently comes up with $245 billion simply by changing a few 
estimates. Again, I suppose folks that have been around here a long 
time are used to that. That is the way you make your money, mostly, is 
to change your estimates, change your growth estimates, change your 
inflation estimates and all that, and you can come up with $245 billion 
out of thin air without having to make any changes.
  Regarding the Congressional Budget Office, we do not have anyone who 
everyone can agree is omnipotent, who is all-knowing and can give us 
figures that everyone will agree on. I suppose the Congressional Budget 
Office is the nearest we have been able to come to that. The President 
always thought so until recently. According to the Congressional Budget 
Office, the President's so-called second budget does not balance. It 
gives us $200 billion deficits as far as the eye can see.
  So the status quo is always easier. The same thing as far as the 
Medicare situation is concerned. We take the position we have to have 
$270 billion in Medicare savings. Our colleagues on the other side, so 
many of them, say, ``Yes, we acknowledge first of all that we would 
have to have a balanced budget,'' which is progress right there. And 
second, ``Yes, we must do something about Medicare.'' But again, just 
as with the balanced budget, ``You are going too far, you are going too 
fast.''
  Mr. David Broder wrote in the Washington Post earlier this month on 
this subject, and he pointed out the real problem, when you cut through 
all the rhetoric on both sides of the aisle as far as the health care 
problem is concerned, is that the growth in spending for health care is 
devouring the Federal budget. He pointed out the Presidential 
commission, headed by our colleagues Senator Kerrey of Nebraska and 
Senator Danforth, reported earlier this year that unless current trends 
are changed, by 2010 or 2012, 15 to 17 years from now, all Federal 
revenues will be consumed by entitlement programs and interest on the 
national debt. So we clearly cannot continue down that road.

  He further states that the Republican approach comes closer to the 
scale of changes that the country needs. He points out that in the 
House Ways and Means Health Subcommittee, they point to some estimates 
given to the committee by Guy King, former chief actuary for the 
Federal agency that runs Medicare and Medicaid.
  Mr. King says that the Democrats are correct in claiming that their 
$90 billion solution would keep the Medicare trust fund solvent until 
2006, but in 2010--the last year that the Republican plan would keep 
the trust fund in the black--he said the Democrats would leave it with 
a $309 billion figure in the red. He says that date is terribly 
important because 2010 is the year the huge wave of baby-boomer 
retirees really hits.
  Everyone acknowledges further changes in Medicare will be needed by 
then. But, as Thomas points out, it is one thing to be dealing with the 
retiree wave from a position of fiscal parity--which is what our plan 
would do--but it is much harder to do it when you are already $300 
billion in arrears.
  So all he is saying is that, sure, the plan that would say let us 
just have $90 billion in savings would get us over the hump. That is 
what we are used to doing in this country--getting over the hump 
usually until the next election, hopefully until the next generation, 
just pushing it on down the road just a little bit further, and do not 
let me have to deal with it because I do not want to have to go home 
and explain anything unpleasant to anybody. But if we do that when 
those retirees hit, when those baby boomers start retiring, we will be 
hopelessly insolvent.
  But we are not getting a reasoned debate in many instances on this. 
We are getting scare tactics. We are getting the 30-second sound bites 
which the American people have grown to love so much in our political 
races, 30-second television commercials that appeal to the most basic 
instincts and that are invariably flawed from the factor standpoint.
  Mr. President, has my time expired?
  The PRESIDING OFFICER (Mr. Inhofe). The time has expired.
  Mr. THOMPSON. I ask unanimous consent for an additional 5 minutes.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. THOMPSON. Mr. President, Mr. Tim Penny, former Democratic 
Representative from Minnesota, wrote earlier in the Washington Post, 
last month, and said that members of both parties should be working 
together on this important issue just as many Republicans joined 
Democrats in voting for Medicare in 1965. Unfortunately, 

[[Page S 15513]]
Democratic leaders in Congress have decided otherwise, choosing to 
attack the Republican Medicare plan rather than offering an 
alternative. By politicizing the issues, Democrats are threatening the 
viability of the very program that they created.
  Mr. President, we are better than that. We can do better than that. 
Those on both sides of the aisle have pointed out that this is not an 
accurate representation of what we are doing, the rhetoric that we are 
hearing now.
  The Washington Post, on September 25, 1995, pointed out that as far 
as saying the tax cut proposal is simply a tax cut for the rich to 
finance the Medicare cuts, they said, ``The Democrats have fabricated a 
Medicare tax cut connection because it is useful politically''.
  Mr. President, the stakes are too high. The opportunities are too 
great. We must get down to what we all know is the task at hand; that 
is, saving this Nation from insolvency, saving the Medicare trust fund 
from insolvency, and putting some money back into the hands of working 
people.
  Mr. President, only in Washington, DC, do we still think that $1 of 
tax cuts of any kind, capital gains or otherwise, is $1 of revenue to 
the Federal Government. It simply does not work that way. In 1981, for 
example, when the rates were cut for capital gains, revenues went up. 
In 1996, when rates were increased, revenues went down.
  So I believe, as Senator Domenici has pointed out, the chairman of 
the Budget Committee, this is a culmination of not only his last work 
but a lot of people's last work. It is an historic occasion. We have an 
opportunity to do something that probably will not present itself 
again, certainly in our lifetime, as far as this reconciliation package 
is concerned.
  I urge its prompt consideration and its approval.
  I yield the floor.
  The PRESIDING OFFICER. Under a previous order, the Senator from 
Michigan [Mr. Levin] is recognized to speak for up to 15 minutes.
  Mr. LEVIN. I thank the Chair.

                          ____________________