[Congressional Record Volume 141, Number 166 (Wednesday, October 25, 1995)]
[Senate]
[Pages S15615-S15683]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             THE BALANCED BUDGET RECONCILIATION ACT OF 1995

  The Senate continued with the consideration of the bill.

[[Page S15616]]

  Mr. DOLE. Mr. President, the pending business is what?
  The PRESIDING OFFICER. S. 1357 is the pending business.
  Mr. DOLE. It is my understanding that the ranking member, Senator 
Exon, is now prepared to offer the Medicare amendment. We have not yet 
reached an overall agreement. So I cannot say it will not be second-
degreed, or whatever. At least we can start on that amendment. I guess 
it is a motion to recommit. I did not see the leader on the floor. I 
think we can start on that. That would give us some time to start 
talking back and forth.
  Mr. DASCHLE. Mr. President, parliamentary inquiry. How much time has 
been consumed thus far?
  The PRESIDING OFFICER. The majority leader has used 1 hour 15 
minutes, and the minority leader has used 30 minutes.
  Mr. DASCHLE. Mr. President, it would be our intention to devote an 
hour on this particular amendment.
  Mr. DOLE. On each side?
  Mr. DASCHLE. An hour on this side, and whatever amount of time the 
majority would care to use.
  Mr. DOLE. I ask unanimous consent that we have an hour on each side 
on the motion to recommit.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The senior Senator from Nebraska is 
recognized.
  Mr. EXON. Mr. President, in view of the agreement just reached, we 
are prepared to offer the Medicare amendment. I hope that the chair 
will recognize the Senator from West Virginia for whatever time he 
might need. I remind him that we have an hour each, which can be 
divided between the managers of this particular amendment.
  Mr. DOLE. Mr. President, we will later debate what the Senator from 
Minnesota had to say. I have these figures, which show that about $477 
million per year would go into Minnesota to help families with 
children. I assume those families with children would be happy to have 
tax relief.
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from West 
Virginia.


                            Motion to Commit

  Mr. ROCKEFELLER. Mr. President, I move to commit Senate bill 1357 to 
the Committee on Finance with instructions to report the bill back to 
the Senate within 3 days, not to include any day the Senate is not in 
session, making changes in legislation within that committee's 
jurisdiction to eliminate any reductions in Medicare beyond the $89 
billion necessary to maintain trust fund solvency through the year 
2006, and to reduce revenue reductions for upper-income taxpayers by 
the amount necessary to ensure deficit neutrality.
  The PRESIDING OFFICER. Was the Senator asking unanimous consent?
  Mr. ROCKEFELLER. No. The Senator was laying down a motion, and the 
Senator wishes to speak on that motion.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The text of the motion to commit is as follows:

                   Motion to Commit With Instructions

       Mr. President, I move to commit the bill S. 1357 to the 
     Committee on Finance with instructions to report the bill 
     back to the Senate within 3 days not to include any day the 
     Senate is not in session making changes in legislation within 
     that Committee's jurisdiction to eliminate any reductions in 
     Medicare beyond the $89,000,000,000 necessary to maintain 
     trust fund solvency through the year 2006 and to reduce 
     revenue reductions for upper-income taxpayers by the amount 
     necessary to ensure deficit neutrality.

  Mr. ROCKEFELLER. In about 2 hours, I guess, every U.S. Senator will 
be asked to vote on the future of a program that makes the difference 
between security and insecurity, peace of mind and terror, health and 
illness, and sometimes, obviously, life or death for 30 million older 
Americans--including 330,000 seniors from my own State of West 
Virginia.
  We offer this amendment, Democrats, to give Senators one more chance 
to preserve Medicare, and stop the destruction of one of America's 
proudest, most enduring achievements.
  We make a very straightforward proposition with our amendment to save 
Medicare.
  This amendment calls for sending the Medicare part of this package 
back to the Senate Finance Committee, and says Medicare should not be 
cut beyond the $89 billion needed to keep the trust fund solvent for 
another 10 years. That means we want to restore the $181 billion of 
unnecessary, dangerous Medicare cuts back to the trust fund, back to 
the health care system that seniors depend on every single day of their 
lives.
  This amendment is a final opportunity, quite frankly, for our 
colleagues on the other side of the aisle to defend the Medicare trust 
fund from a mind boggling raid that will cut health care benefits, 
increase seniors' costs, and threaten the very existence of hospitals--
a raid that is designed purely and simply to pay for tax breaks tilted 
in favor of the most affluent, comfortable households in this land.

  The reconciliation bill on the floor cuts Medicare by $270 billion 
over 7 years. We all know that now.
  We have all been told that this will save Medicare, keep it solvent, 
and, indeed, make the program stronger. Wrong, wrong, and wrong. The 
professional experts in charge of keeping the books for Medicare say 
exactly $89 billion is needed to keep Medicare solvent for the same 
number of years.
  Hospitals, doctors, nurses, and other health care providers in every 
one of our States believe with absolute certainty that cuts of this 
size will disintegrate the kind of health care coverage that 30 million 
American senior citizens have counted on for over three decades.
  When the average income of senior citizens is, in fact, $17,750 on a 
national basis, and closer to $10,700 in my own State, and when they 
pay 21 percent of their income for health expenses as it is now--that 
is, unless they are over 84, in which case the figure rises to 34 
percent--no wonder they are incredulous, no wonder they are petrified 
to hear their Medicare is being used to pay for tax breaks, tax 
giveaways to far, far wealthier Americans and every imaginable kind of 
corporation.
  I have no way that I can think of to explain to the 330,000 Medicare 
beneficiaries in my State why their Medicare deductibles will double, 
their premiums will skyrocket, and West Virginia hospitals are 
threatened with the possibility of losing $25 million in 1996 and more 
than $681 million over the next 7 years.
  I keep saying I wish this were some kind of a dream. I keep expecting 
to wake up and find something different. I wish this were some kind of 
a dream. But the threat is real. It is written into the pages of the 
bill before the Senate unless we send it back.
  I can only report what I read in the budget package. Mr. President, 
$270 billion will be cut out of Medicare. That is fact. Mr. President, 
$225 billion will be given away in tax breaks and giveaways. That is 
fact. Then there is the $187 billion sliced out of Medicaid, subject to 
another amendment leaving it in tatters as it is chopped into a block 
grants which States are not ready, in fact, to handle, with virtually 
none of the guarantees left for Americans hurting the most.
  The response on the other side will be that we are exaggerating, that 
we are trying to scare seniors, that we do not understand.
  Mr. President, this budget is a scary budget. It is a very scary 
budget. I am the very first to admit that I fear for my State. I fear 
for 330,000 older West Virginians. I fear for the health care system in 
America. I do not say that as a Democrat or as a Republican. I say that 
as a citizen of the State of West Virginia. I am afraid of the 
consequences of what it is likely we are going to do here, and hence 
this amendment.
  When the very people who are trustees of Medicare say only $89 
billion is needed to keep the trust fund solvent for 10 years, it is 
frightening to see a budget that sucks $270 billion out of the lifeline 
for older Americans. That is what older Americans are now coming to 
truly believe on their own, not because of what we say but because of 
what they are beginning to find out on their own. Their fear is genuine 
and justified.
  Today, we offer one last chance to Senators to protect Medicare and 
older Americans. Vote for this amendment to ensure the solvency of 
Medicare for another 10 years. There is plenty of time for a 
bipartisan, thoughtful effort 

[[Page S15617]]

to plan Medicare's future for the 50 years beyond that period of time. 
Vote for this amendment to protect Medicare from highway robbery, from 
being used to pay for tax breaks, to take money from seniors with an 
average income of $17,500 and hand it over to Americans with incomes 
from $75,000 all the way up to millions. Vote for the right way to 
balance the budget and for a balance in the Nation's priorities.
  We offer this amendment to remind every Senator that he and she can 
respond to the seniors, the families, and the health care providers of 
America who are scared by rejecting the part of this budget that casts 
a dangerous, deep, and dark shadow over Medicare--that is, unless this 
amendment is passed.
  Mr. President, I yield 5 minutes to the Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, if this Republican bill becomes law, it 
will devastate senior citizens, working families, and children in every 
community in America. It is a transparent scheme to take from the needy 
to give to the greedy. It makes a mockery of the family values the 
Republican majority pretend to represent.
  The Republican assault on Medicare is a frontal attack on the 
Nation's elderly. Medicare is part of Social Security. It is a contract 
between the Government and the people that says, ``Pay into the trust 
fund during your working years, and we will guarantee good health care 
in your retirement years.''
  It is wrong for the Republicans to break that contract. It is wrong 
for Republicans to propose deep cuts in Medicare in excess of anything 
needed to protect the trust fund. It is doubly wrong for the 
Republicans to propose those deep cuts in Medicare in order to pay for 
tax breaks for the wealthy.
  The cuts in Medicare are too harsh and too extreme. Mr. President, 
$280 billion over the next 7 years--premiums will double, deductibles 
will double, the age of eligibility will be raised to 67, and senior 
citizens will be squeezed hard to give up their own doctors and HMO's.
  The fundamental unfairness of this proposal is plain. Senior 
citizens' median income is only $17,750. Mr. President, 40 percent have 
incomes of less than $10,000. Because of gaps in Medicare, senior 
citizens already pay too much for the health care they need. Yet the 
additional premiums alone under the Republican plan will add $2,400 to 
the health care of the average elderly over the next 7 years.
  The Medicare trust fund trustees have stated clearly $89 billion is 
all that is needed to protect the trust fund for a decade--not $280 
billion. The Democratic alternative provides that amount. It will not 
raise premiums an additional dime. It will not raise deductibles a 
dime. It will give senior citizens real choices, not force them to give 
up their own doctor.
  The Republican Medicare plan also deserves to be rejected because of 
the lavish giveaways to special interest groups in the House and Senate 
proposals. Insurance companies got what they wanted--the opportunity to 
get their hands on Medicare and obtain billions of dollars in profits. 
The American Medical Association got what it wanted--lower reduction in 
doctors' fees and little on malpractice awards. The list goes on and 
on.
  Clinical labs no longer have to meet Federal standards to guarantee 
the accuracy of tests. Federal standards to prevent the abuse of 
patients in nursing homes will be eliminated. Pharmaceutical firms will 
be given the right to charge higher prices for their drugs.
  Because of this unjust Republican plan, millions of elderly Americans 
will be forced to go without the health care they need. Millions more 
will have to choose between food on the table, adequate heat in the 
winter, paying the rent, or paying for medical care.
  Senior citizens have earned their Medicare benefits. They paid for 
them and they deserve them. The Republican attacks on Medicare will 
make life harder, sicker, and shorter for millions of elderly Americans 
who built this country and made it great. They deserve better from 
Congress. Our Democratic alternative protects senior citizens and 
preserves Medicare, and that is just what the Rockefeller proposal 
offers.
  I see my colleague and friend from North Dakota here. I will be 
interested if he would tell us what his understanding of the 
implications of this program would be to those in rural America.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROCKEFELLER. Mr. President, I yield 5 minutes to the Senator from 
North Dakota.
  The PRESIDING OFFICER. The Chair recognizes the Senator from North 
Dakota.
  Mr. DORGAN. Mr. President, we have been told by some that the $270 
billion reduction to Medicare is not a cut, that Medicare spending will 
still increase under this budget reconciliation bill. That is true. 
But, Mr. President, 200,000 new Americans every month become eligible 
for Medicare. More Americans are becoming eligible for Medicare and 
health care costs are increasing.
  We have determined what it will cost for the Medicare Program over 
the next 7 years based on these facts. The plan is to cut $270 billion 
from that projection, so of course it is a cut. This plan will end up 
offering senior citizens this kind of Faustian bargain: We will offer 
you a deal in which you get less health care and you pay more for it.
  In our country, we have talked about labels recently. When you go to 
the grocery store, there is a label on the food. Pick up a can of peas 
or a box of pasta, and the label says what is in it--how much sodium, 
how much fat. You have to be honest and truthful about labels on a can 
of peas in a grocery store. No such requirement exists here in the 
Congress. You can label it whatever you want to label it and do it with 
impunity.
  This proposal is labeled ``A Proposal To Save Medicare.'' The very 
people who opposed Medicare when it was created 30 years ago--97 
percent of the present majority party voted against Medicare because 
they said they did not believe in it--are now telling us they are the 
ones who are going to save it.
  If these folks were physicians in an emergency room and you came in 
with an ingrown toenail, they would cut off your leg and then boast 
about how your toe does not hurt anymore.
  The fact is, you do not have to cut $270 billion to save Medicare. We 
should make an adjustment in Medicare but it need only be about a $89 
billion adjustment. That is what the experts tell us is needed to 
extend the hospital insurance trust fund. So what is this debate all 
about? It is about getting money from the Medicare Program, with 
substantial cuts, in order to provide tax relief to some other folks. 
That is about pols and pals--politicians and their pals.
  Who gets the tax cut? Well, first of all, let's consider who gets the 
tax increase? The Joint Tax Committee says 50 percent of the people in 
this country are going to pay higher taxes as a result of 
reconciliation bill. Here's a multiple choice question--which people 
will pay higher taxes, those with incomes in the lowest 50 percent or 
those in the highest 50 percent? Guess what, the majority party has 
said to us that the lowest 50 percent of the income earners should pay 
higher taxes, but the top 1 percent shall pay substantially lower 
taxes.
  Where does all that money come from, to provide for the tax break to 
the upper income folks? Out of the $270 billion cut in the Medicare 
Program.
  As I have said repeatedly, this is all about choices and priorities. 
If one thinks Medicare has not been worthwhile in freeing senior 
citizens from the fear of getting sick and not having the money to 
attend to their health care needs, then just decide there should be no 
Medicare Program. I respect that. I do not agree, but I respect that.
  But this is about choices. Those of us who believe there ought to be 
a Medicare Program that senior citizens can rely on --and we are the 
ones who started Medicare, still believe in it and believe it should be 
there in the future--we say, send this legislation back, recommit it, 
and bring it back to the Senate floor with an adjustment in the tax cut 
and use that money to reduce the cuts to Medicare.
  I had an amendment on the floor of the Senate 2 days ago that was 
very simple. It said, let us at least limit the tax cut to those whose 
incomes are at or below $250,000 a year. Just limit the tax cut for at 
least those who make less than a quarter of a million dollars a year, 
and use the $50 billion in savings from that over 7 years to reduce 

[[Page S15618]]

the hit on Medicare--to reduce the hit on senior citizens.
  Do you know what? We could not get that passed. It was a party-line 
vote. Every single Member of the majority party voted against that 
simple amendment.
  This debate is about choices and priorities. Our choices are to save 
Medicare for the long term. Our choice is not to provide tax cuts to 
the richest Americans and send the bill for those tax cuts to some of 
the most vulnerable Americans.
  By far the majority of the senior citizens in North Dakota live on 
less than $15,000 a year in income. To say to those folks that we are 
going to take from your Medicare Program so we can offer tax cuts to 
the richest Americans makes no sense at all. Those are priorities that 
are not in keeping with what the American people would like us to do.
  We need to balance the budget. We need to agree on a sensible way to 
do that. But we do not need to dismantle programs that work. We do not 
need to injure the Medicare Program and place a higher burden on senior 
citizens in order to provide a tax cut to the richest Americans. That 
is a terrible choice and I hope Members of both sides of the aisle will 
vote for this amendment offered by Senator Rockefeller, Senator 
Kennedy, and others.
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROCKEFELLER. Mr. President, I ask the Senator from New Hampshire 
or the Senator from Michigan--a number of questions have been raised on 
this side. We have been listening for months now to the attack on an 
$89 billion cut as opposed to a $270 billion cut.
  I raised the question, what has happened to the $181 billion? Is this 
really going to a tax cut? What about the doubling of the deductible in 
the premiums? Things of this sort.
  I ask if any on the other side care to explain why they would vote 
against my amendment, if, in fact, they are going to? I would just be 
interested if they have anything they choose to say?
  Mr. GREGG addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from----
  Mr. GREGG. If the Senator will yield on his time, I will be happy to 
respond.
  The PRESIDING OFFICER. Will the Senator from West Virginia yield?
  Mr. ROCKEFELLER. I will not yield. Because I would like to hear the 
response from the majority party as to some of the reasons for their 
certainty as to the need for the $270 billion cut which is causing so 
much consternation throughout the land.
  Mr. GREGG. If the Senator from West Virginia is going to propound a 
question to myself and the Senator from Michigan----
  Mr. ROCKEFELLER. The Senator does not have to answer.
  Mr. GREGG. I will be happy to respond to the question in the context 
of his timeframe. It seems rather unusual in speeches to be propounding 
questions and not wish to seek response.
  The PRESIDING OFFICER. Does the Senator----
  Mr. ROCKEFELLER. No; the Senator is not going to engage in this kind 
of game. It is clear the majority does not want to answer some of these 
basic questions. So at this point I will call on the Senator from Iowa.
  Mr. WELLSTONE. Mr. President, while we are waiting I would like to be 
added as an additional cosponsor.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROCKEFELLER. There are Democratic Members on their way down here 
to speak. They have not gotten down here to speak, and I hope they 
recognize they will have to get here very quickly. But I will yield 
myself 5 minutes.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. Mr. President, one of the things that most concerns 
me about all of this is the concept of senior citizens being able to 
keep their own physician. And one of the things that most scares me, 
that puts genuine fear in the heart not just of this Senator but of the 
seniors that I represent, is the fear they are going to lose their 
right to choose their own doctor.
  I say this with a special feeling because, over the last couple of 
years, when we were debating health care, that was one of the things 
that was absolutely going to be able to happen. People are going to be 
able to have their own doctor. But there is this enormous movement in 
the private sector to move people into health maintenance organizations 
to cut costs down.
  I read this, this morning, in the newspaper, that Washington General 
Hospital, now DC General, which is kind of the last resort for the 
people of Washington DC, is thinking, now, of closing down, merging 
with Howard University. That is happening now in the private sector. I 
hesitate to even imagine what happens if you take tens of millions of 
dollars away from them, or institutions like them, over the next number 
of years.
  How many essential services in our city--I know in the city of 
Chicago, I know either seven or eight emergency rooms of hospitals have 
closed down under the current free-market system. And the exacerbation 
of all that, under these drastic Medicare cuts, is something which I 
think is truly terrifying.
  Mr. KENNEDY. Will the Senator yield for a question?
  Mr. ROCKEFELLER. I will be glad to yield.
  Mr. KENNEDY. What is the Senator's understanding of the effect of 
this particular provision in the Republican budget bill and the impact 
on the people of West Virginia, in terms of the seniors there, their 
incomes, and what the Senator thinks would be the impact?
  Mr. ROCKEFELLER. I will answer the Senator from Massachusetts that 
for the average senior in West Virginia, their income would be about 
$10,700 a year, and 21 percent of that they already spend on health 
care. There is little left on the margin just to survive. If this 
happens, the deductible will double, and the premiums will go up. All 
kinds of costs will increase, and services I believe, particularly in 
the rural areas, will decrease.
  I think that, No. 1, they are going to feel like they have been 
abandoned. Whether or not they will be is yet to be fully determined. 
But they are going to believe they are going to be abandoned. Hospitals 
in rural areas are going to close down. They already are closing. That 
will pick up.
  So in a State which is 97 percent mountain and 3 percent flat, as the 
Senator knows, they are going to feel cut off from health care, and in 
many cases they will be cut off from health care because they will have 
no acute care beds that will be available to them because of hospitals 
that are closing down.
  So expenses will go up. Their fear will skyrocket. Their hospitals 
will begin to close down. Doctors are going to become much more 
reluctant to go into the rural areas of West Virginia because of the 
cuts in the graduate medical education. You are going to find the kinds 
of doctors who have traditionally gone into rural areas to service 
seniors are not going to be trained because they are no longer going to 
be funded by the Republican cuts under Medicare because of the cuts in 
graduate medical education.
  So I do not know any way that they win. I can think of no way that 
they win, and I can think of 10 ways they lose.
  Mr. KENNEDY. Just finally, if part B goes up, that is directly 
deducted from your Social Security check. Do you anticipate that part B 
premiums will go up, and, therefore, the Social Security checks will be 
affected for those in West Virginia as well?
  Mr. ROCKEFELLER. It is not necessary to anticipate it. It is a fact. 
They will go up. They will double.
  Mr. KENNEDY. What is the impact on the Social Security check?
  Mr. ROCKEFELLER. That is just more money out of pocket. Of course, 
the ironic thing there is that 40 percent of what it is that the 
majority party is cutting out of Medicare--$100 billion--cannot even be 
used to help the trust fund, cannot even be used because it is from 
part B.
  I yield to the Senator from Iowa.
  Mr. HARKIN. I thank the Senator for yielding. He makes an excellent 
point to the Senator from Massachusetts.
  This comes right out of the Social Security checks. That is where it 
is coming from. It is not coming from some other place when an elderly 
person gets that Social Security check. The amount that they pay in 
that monthly premium is going to double under what the Republicans have 
before us.

[[Page S15619]]

  Mr. President, Halloween is just around the corner. It is trick-or-
treat time. This is a trick-or-treat bill. The trick is on American 
seniors, and the treats are the $245 billion tax cuts for the 
wealthiest in this country. That is what it is. They are saying we are 
trying to scare our seniors. It is not a scare. It is an actual assault 
on the seniors of this country so that we can treat the wealthiest.
  What is this debate really about? Mr. President, here is what the 
debate is about right here on this poster. This is what the debate is 
about. Make no mistake about it. Notice the date on these words. 
October 24, 1995. That was yesterday. Last night in a speech to the 
American Conservative Union here in Washington, here is what the 
majority leader of the Senate said:

       ``* * * I was there fighting the fight--voting against 
     Medicare--one of 12--because we knew it wouldn't work in 
     1965.

  There you have it. The majority leader is saying he is proud of the 
fact that he voted against Medicare in 1965 because he says, ``We knew 
it wouldn't work.'' It will not work? Prior to 1965, only 46 percent of 
our elderly had health care. Today, 99 percent of our seniors have 
health care coverage. Tell me it has not worked. I want the majority 
leader to come out here on the Senate floor and tell the American 
public that Medicare has been a failure, that it has not worked, that 
he was right in 1965 when he voted against it. I wish he would tell me. 
I wish he would tell me. I wish he would tell me about my own family.
  When my father was on Social Security and an ex-coal miner, we had no 
income. All he had was a Social Security check. We lived in a small 
town of 150 people. He had black lung disease. He was in his seventies. 
He had no health care. We had no money. We had no life savings. We had 
a little house and a half acre of property.
  Every winter he would get sick and they would have to take him in to 
Mercy Hospital in Des Moines, and, thank God, the Sisters of Mercy 
would take care of him, and they would send him home. It happened like 
clockwork every year. That was the only health care he had when he was 
sick as a dog and they would have to rush him to the hospital. But 
before he died, Medicare came into existence in 1965. And the last 2 
years of his life was by far the best years he had in his later years 
because then he could get health care. He got it when he needed it, not 
later on when he was so sick. But he got it up front, and he got it 
with his head held high and not coming in the back door to get charity.
  I often think that if my father had had Medicare during the 1950's 
and in the early 1960's, he would have lived longer and he would have 
been a lot healthier.
  So the majority leader better not try to tell this Senator that 
Medicare was a mistake and that it has not worked. I have seen too many 
in my own family. I have seen too many elderly people in Iowa who, 
before 1965, did not have health care living in those small towns and 
communities. Their lives were made better and healthier, and their 
children's lives were made better because Medicare came in and provided 
health care for the elderly.
  I delight in talking to young people about Medicare. They think it is 
just for the elderly. I do this a lot of times with college students. I 
always ask them. I say, ``How many of you have grandparents that are on 
Medicare?'' Most of them raise their hands. I say, ``After you get out 
of school and you start earning money, for every $100 that you earn, 
how much of that money is going to go into the Medicare trust fund to 
pay for Medicare? Out of every $100 you earn, how much goes in so that 
your grandparents get Medicare?'' I tell you, you should hear the 
answers I get: $20 out of $100, $10 out of $100, and all kinds of wild 
guesses. When I tell them it is $1.45, for every $100 they earn, they 
spend $1.45 so their grandparents do not have to live with them, so 
their grandparents get quality, affordable health care, they are 
amazed.
  I asked them. ``Do you think it is worth it? Is it worth $1.45 out of 
$100 to put into the Medicare trust fund?'' When you put it that way, 
they think it is a darned good deal.
  So, yes. We have some problems with the Medicare trust fund, long 
term, short term, and we can address those. The other side is always 
talking about the trustees; how the trustees said it is broke and we 
have to fix it. There is nothing in the trustees' report that says we 
have to take $270 billion out of Medicare. That is what the Republicans 
want to do to--give a $245 billion tax break for the wealthiest in our 
country.
  What our amendment does is send the bill back to Finance, and come 
back with an $89 billion cut in Medicare to make it secure but to keep 
it and to save it for our elderly. Let us not have this trick-or-treat 
bill that the Republicans have brought out here to trick our elderly 
and to take away their hard-earned savings and put it in a $245 billion 
tax break for the wealthiest in our country. That is what this battle 
is about. Make no mistake about it.
  I yield back my time. I thank the Senator for yielding me that time.
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. Mr. President, what is the time remaining?
  The PRESIDING OFFICER. The Senator from West Virginia has 28\1/2\ 
minutes remaining, and the Senator from Michigan has 60 minutes.
  Mr. ROCKEFELLER. Does the Senator from Michigan wish to allocate time 
to anyone?
  Mr. ABRAHAM addressed the Chair.
  The PRESIDING OFFICER (Mr. Frist). The Senator from Michigan.
  Mr. ABRAHAM. At this time I yield myself such time as I may need, and 
I will be very brief. Then I will yield to other Members--the Senator 
from New Hampshire, who has been in the chair.
  We have obviously been hearing a number of claims, accusations, and 
allegations both about the motives of the Republicans as well as the 
substance of the legislation before us. I know that other speakers will 
get into more detail in responding, but I will just point out a few 
things.
  The comments with respect to the condition of the part A trust fund 
are not just whimsical comments, they are inaccurate comments, and they 
are very important comments to America's seniors. They should know 
today that starting in 1996, for the first year the part A trust fund 
will begin to run a deficit. We are no longer talking about problems 
that are somewhere out in the future that we cannot visualize. We are 
talking about concrete problems that are going to be before us in the 
very immediate sense soon.
  Just last year we heard from the entitlement commission, a bipartisan 
group of Members of Congress who reported to us that at the rate of 
growth in entitlement spending in this country in just 15 to 20 years, 
entitlement spending and interest on the Federal debt alone would 
exceed all Federal tax collections combined. These are not problems 
that can be fixed by the old process of finding a few extra dollars and 
throwing them into the Medicare trust fund. These are problems that can 
only be fixed through substantive changes of the sort which we are 
offering here.
  The Medicare Program is like a ship that is badly damaged. It is 
leaking water. There are two ways you can deal with the problem. You 
can pour more water over the side and try to bail your way out, but 
that will not solve the problem in a long-term sense. The alternative 
is to repair the damage. That is what we are trying to do because we do 
not want to just guarantee that Medicare will be safe for an additional 
1 year or 2 years. We want to change the program to make it stronger, 
to protect it, to preserve it well into the future. We want to give 
seniors the right to choose a program that is best for them, and we 
want to make sure that we do that in a way that is not just cover us 
for the next election but, rather, in a way that truly protects seniors 
in the long-term sense.
  And so at this time, I will yield the floor and grant whatever time 
he may need to the Senator from New Hampshire.
  Mr. GREGG. I thank the Chair.
  I associate myself with the comments of the Senator from Michigan. I 
wish to respond to some of the points made here by members of the other 
side who, I am sure, have done so with sincerity but who have been 
inaccurate to say the least.
  Initially, let me state that the purpose of the Medicare reform which 
has 

[[Page S15620]]

been put into this bill is to significantly strengthen the program 
which has cared for our seniors well but which was designed in the 
1960's and which is not functioning well as we move into the year 2000. 
It is like a 1960 automobile trying to drive on a turnpike in 1995. The 
fact is that the muffler has fallen off, the pistons are not working 
very well, the chassis is out of line, and it needs to be fixed.
  In fact, it needs to be significantly strengthened, and that is what 
we have proposed. The basic thrust of the Republican plan is to give 
seniors essentially the same options which Members of Congress have.
  Now, why is that so outrageous? We are saying to seniors, ``You shall 
have choice. You shall have the ability to go into the marketplace, if 
you wish, and choose other options than what you are presently supplied 
under Medicare.'' We are not saying they have to do that. In fact, we 
are making it very clear, under the Senate plan, if a senior decides to 
stay with fee for service, which is what most seniors have today, which 
is where they go out and choose their doctor individually, they can 
continue in that framework, they can continue to do that. That is their 
decision.
  What we are saying, however, is if they should choose, they will have 
other choices. If they should choose, as like many people, their sons 
and daughters, who are in the workplace, to go with some group of 
doctors who practice together in what is known as a PPO, they will have 
that option. If they choose, as many of their sons and daughters do 
today who are in the workplace, to go with an HMO, where you have an 
affiliation of doctors and hospitals and delivery systems, they will 
have that option.
  There are a variety of other options which we cannot even anticipate 
because the marketplace has not created them yet that we will make 
available to our seniors.
  And in giving our seniors those choices, what else do we do? We also 
say we are going to give you some economic benefit from being a 
thoughtful purchaser of your health care. Under the Senate plan, if a 
senior chooses a plan which delivers the same or better care than they 
are presently getting from their fee-for-service plan but happens to 
cost less, we are going to allow the senior to keep that savings. We 
are going to create an incentive amongst seniors to look at other 
options. We are not going to say they have to look at them. We are not 
going to say they even have to take them. We are simply going to say 
you have that option.
  So what is so dastardly about giving seniors the same option which 
Members of Congress have? I do not understand it myself. But the other 
side is outraged for some reason. I think their outrage functions more 
from politics than from substance.
  Let us talk a little bit about substance, about some of the points 
that have been made by the other side. First, they say there is a $270 
billion cut. That is an interesting concept. Only in Washington would a 
program where you are going to increase spending by $346 billion over 
the next 7 years be deemed a cut in spending.
  This is the chart, ladies and gentlemen. Medicare spending goes up 
$349 billion--I was off by $3 billion; I apologize-- $349 billion over 
the next 7 years. That is a cut in spending? It still remains, under 
that spending increase, the fastest growing, most significant 
expenditure in the Federal budget. In fact, if you compare the rate of 
growth of Medicare spending over the next 7 years to the rate of 
Medicare spending over the last 7 years, you would have to conclude 
that over the last 7 years we ``savaged it,'' under the Democrat terms, 
because in the last 7 years it grew to $923 billion spent on Medicare, 
but over the next 7 years we are going to spend $1.6 trillion on 
Medicare.
  So clearly there is no cut here in spending on Medicare. In fact, per 
beneficiary, spending on each beneficiary will go up by approximately 
$2,000 between this year and what would be spent on that beneficiary in 
the year 2002.
  We heard this equally rather interesting argument: Well, there are 
going to be more people in the system; therefore, more should be spent. 
Actually, demographically, there will not be a significant increase in 
seniors going into the system until we hit the year 2007. So that is 
not an accurate statement on its face.
  We heard the statement of essentially, well, but really, to meet the 
obligations of Medicare we have to spend $8,700, or something like 
that, per senior in the year 2002. What does that presume? It presumes 
a rate of growth of Medicare which would be 10 percent per year for the 
next 7 years--10 percent per year. If that is what my colleagues on the 
other side of the aisle want for Medicare, they have just signed on to 
a prescription which the Medicare trustees have said will lead to 
bankruptcy, because it is that 10 percent rate of growth that the 
Medicare trustees, three of whom happen to be members of this 
administration, stated was totally unsustainable--totally 
unsustainable--and that if it is allowed to continue at that rate, if 
Medicare is allowed to continue to grow at an annual rate of 10 
percent, the trust fund becomes bankrupt.
  They gave us a rather definitive chart which reflects that, and that 
is this chart here. It is a plane crash, ladies and gentlemen. A 10-
percent rate of growth leads to insolvency in the trust fund in the 
year 2002. So when my colleagues on the other side of the aisle say, 
``But you are simply not increasing spending enough when you are 
increasing spending by $2,000 per beneficiary over the next 7 years, 
you have to increase it by another $2,000,'' what they are really 
saying is we want insolvency of the trust fund.
  We heard some other rather interesting comments, something about, 
well, the trustees never said that there had to be anything like $270 
billion saved in order to accomplish the rescue of the Medicare trust 
fund. I think my colleague from Iowa said there is no place in the 
trustees' report where that occurs; all we need is $89 billion.
  I strongly suggest that my colleagues on the other side of the aisle 
read the trustees' report. I will read it for them. I have to put on my 
glasses, though.

       The trust fund fails to meet the trustees' test of long-
     range close actuarial balance by an extremely large margin. 
     To bring the HI program into actuarial balance even for the 
     first 25 years--

  Which happens to be their minimum year----
  Mr. HARKIN. Will the Senator yield?
  Mr. GREGG. I am sorry. I will not yield. The other side did not 
yield. I will not yield.
  Mr. HARKIN. I wanted to clarify a point.
  Mr. GREGG. I am not yielding to the Senator from Iowa.
       To bring the HI program into actuarial balance even for the 
     first 25 years under the intermediate assumptions, would 
     require an increase in the HI payroll tax of about 0.65 
     percentage points per employee or employer each or a 
     comparable reduction in benefits.

  What does that language mean in English if you convert it to numbers? 
That means that the trustees are stating that under their most 
conservative approach, on an actuarial basis, which they did not even 
agree should occur because they think it is too short of a timeframe, 
it would take $386 billion--$386 billion--of adjustment over a 5-year 
period in order to accomplish actuarial solvency. So this $89 billion 
number is specious on its face.
  And then we have heard, ``But the premiums of our seniors are going 
to double.'' That is a very interesting argument, because it just 
happens to ignore one major point. This plan that the Republicans have 
put forward does not increase the burden of the seniors on the 
percentage of premium that they pay in the part B premium.
  Under the part B premium--I think this should be explained for those 
who may not be familiar with it; I know most in this room are--but 
under the part B premium, the senior citizen pays 31 percent of the 
cost, the general taxpayers, specifically the senior's children and 
grandchildren who are working, pay 69 percent of the cost.
  Under the Republican proposal, the senior citizen will continue for 
the next 7 years to pick up 31 percent of the cost of his or her part B 
premium, and his children or her children and his or her grandchildren 
will continue to pay 69 percent of the cost of the part B premium.
  We do not change that. Sure, it goes up. Health care costs go up. Of 
course it is going to go up. But as a percentage of the cost that is 
being borne between the senior citizen and their children who are 
paying the taxes, the subsidy, it will remain the same. Now, if 

[[Page S15621]]

we are to follow the logic of my colleagues from other side of the 
aisle, what they are saying is that the subsidy that the senior 
citizens' children should pay and their grandchildren should pay should 
go up.
  That is the only logical conclusion from what they are saying. They 
are essentially saying that the senior citizens should receive a 
greater subsidy from their children and their grandchildren, so that 
they will not be paying 31 percent of the cost of their part B premium, 
so that they may be paying 28 percent or 25 or 26 percent of that cost. 
Who is going to pick up the difference? The senior citizens' children 
and grandchildren.
  Their commitment, their subsidy to that premium paid for by the 
children and grandchildren of seniors will go from 69 percent to 70 
percent, 75 percent. I do not know where they are going to end that 
number. But essentially they are pandering, on that side of the aisle, 
to one constituency at the expense of another constituency.
  It is basically generational politics that are being played. What we 
have said in our bill is, ``Listen, there's a fair distribution of 
subsidy between seniors and their children, the wage earners and the 
payers of their subsidy. Sixty-nine percent is paid for by their 
children; 31 percent by the seniors.'' We are saying we should continue 
it in that reference. We are not suggesting it be changed at all.
  I think most seniors in this country would view that as a reasonable 
approach. I find very few seniors in this country who wish to pass on 
to their children either, one, a country that is bankrupt, two, a 
Medicare trust fund that is bankrupt, or, three, feel their children 
should be hit with a further charge for bearing the cost of their 
health care.
  What else do we say in this plan? We say, let us ask the wealthy 
senior citizens to pay the whole cost or at least a larger percentage 
of the cost of the part B premium. You explain to me why a person who 
is working 40, 50, 60 hours a week on a computer assembly line in New 
Hampshire or at a restaurant or at a garage, why that person should 
have to subsidize the top 100 retirees from IBM last year. But that is 
exactly what is happening.
  Under the present law, the top 100 retirees from IBM may make 
$150,000 a year when they retire. And they have a 69-percent subsidy of 
their part B premium paid for by John and Mary Jones who are working 
real hard just to make ends meet and take care of their families. It is 
not right.
  We have corrected that in this bill. We have said if you have more 
than $75,000 as income as an individual, more than $120,000 of income 
as a married couple, then you have to begin paying a higher percentage 
of your part B premium. In fact, if your incomes get into the real high 
levels, $120,000, I think it is, for individuals and $150,000 or 
$160,000--I have forgotten the number for married folks--then you will 
not get any more subsidy.
  What is wrong with that policy, my friends? Talk about income 
transfer from moderate income to wealthy, this part B premium, as it is 
presently structured, is the ultimate in the wrong way to approach 
income transfer. So we corrected that.
  This whole premium argument is really inaccurate, as I mentioned a 
number of other points they have made. And then I think the core issue 
here becomes this question of solvency. How do you make the trust funds 
solvent so that seniors will have it, so that their children will have 
it? And what we have proposed is to put in place a system which 
generates a marketplace competition atmosphere which will help control 
the rate of growth of costs.
  As I mentioned earlier, the trustees have made it very clear that a 
10-percent rate of growth of the Medicare trust fund leads to 
bankruptcy. It leads to this horrendous event. It seems that some of my 
colleagues on the other side are willing to accept a 10-percent rate of 
growth. The trustees were not. I am not. Republicans on this side are 
not.
  So what we have proposed is to try to slow that rate of growth from 
three times the rate of inflation to twice the rate of inflation. That 
still is a very generous increase. As I mentioned, there is a $349 
billion increase in spending in the Medicare trust fund over the next 7 
years. It is not a dramatic reduction in the rate of growth. You are 
still talking about a rate of growth which is twice the rate of 
inflation. In fact, if you compare it to what is happening in the 
private sector in health care, it happens to be six times the rate of 
growth of premium costs in the private sector today.
  Last year, for example, the health care system which all of us here 
in the Congress benefit from had actually a drop in the rate of growth 
of our premium costs. Why? Because there was competition, because there 
was choice. What we are suggesting is that seniors should have those 
same types of choices that we as Members of Congress have, and as a 
result we will hopefully see a significant drop in the rate of growth 
in premium costs.
  What we are projecting is a drop of 30 percent. We are not even 
expecting to get the same drop as in the Congress. But this is a 
reasonable drop. That is what this chart shows.
  Instead of a 10-percent rate of growth, which my colleagues on the 
other side seem to be ready to endorse, which leads to bankruptcy, we 
are saying let us have a 6.4-percent rate of growth.
  Ironically, the President, when he sent his budget up here in June--
it was just a sheaf of papers that did not happen to make a lot of 
sense in other areas--the numbers in the Medicare area were not that 
far from our number. In fact, they were a lot closer to our number than 
they are to the 10-percent which my colleagues on the other side of the 
aisle seem so enthused for because the administration understands that 
it cannot absorb a 10 percent rate of growth in the Medicare trust 
fund.
  So we have put forward a plan which will lead to a slowing of the 
rate of growth of the Medicare trust fund to 6.5 percent approximately. 
And how do we do it? We do it by using the marketplace and by giving 
seniors more choices, more options, a stronger health care system, 
rather than a weaker health care system. From my standpoint, that is 
what reforming and improving and strengthening the Medicare system is 
all about. That is what this whole issue is all about.
  We have heard a lot of misrepresentation on this by the other side of 
the aisle already. We have only been at this for, what, about 45 
minutes of debate from the other side of the aisle, and we have already 
heard about seven major misrepresentations, all of which I just noted.
  I would hope, however, as we go into the rest of this debate, that we 
will have some integrity in the discussion, we will get back to talking 
about what we need to do in order to make the Medicare trust fund 
solvent, and get off of this issue of trying to scare seniors through 
politics, versus addressing the issue through substance.
  I thank the Senator from Michigan for his courtesy and for his time 
and would yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. I yield 30 seconds to the Senator from Iowa.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. HARKIN. Mr. President, I just have to respond to my friend from 
New Hampshire. He is absolutely wrong. Here is a statement of a 
managing trustee of the Social Security trustees. Let me just read this 
paragraph:

       Simply said, no Member of Congress should vote for $270 
     billion in Medicare cuts believing that reductions of this 
     size have been recommended by the Medicare trustees or that 
     such reductions are needed now to prevent an imminent funding 
     crisis. That would be factually incorrect.

  So I say to my friend from New Hampshire, he is incorrect. The 
trustees never said, and in fact here is a statement just to the 
contrary, as the managing trustee said, it would be factually incorrect 
to say that $270 billion in cuts were recommended by the trustees. That 
was never the case.
  Mr. ROCKEFELLER. Mr. President, I yield 4 minutes to the Senator from 
Louisiana.
  The PRESIDING OFFICER (Mr. Gregg). The Senator from Louisiana.
  Mr. BREAUX. Mr. President, I thank the manager for yielding the time. 
I 

[[Page S15622]]

was in the New Orleans Airport coming back from Washington one time 
during the debate on health care 2 years ago. This elderly lady came up 
to me in the airport and said, ``Senator, are you all working on health 
care in Washington?''
  I said, ``Yes, ma'am, we sure are.''
  She said, ``No matter what you do, please don't let the Federal 
Government take over my Medicare.''
  This was a senior citizen who thought the Medicare Program was 
working just fine. She thought it was the best thing she ever had. It 
was taking care of her and taking care of her family. But it showed how 
concerned they were about Congress messing with Medicare.
  Today, Congress is messing with Medicare in a way that is not 
necessary and is not essential.
  Mr. President, 77 percent of the people in my State of Louisiana, who 
are on Medicare, earn less than $15,000 a year. Do we wonder why a lady 
would come up to me in an airport and say, ``Please don't mess with 
Medicare''? Because if we destroy Medicare, where are these people 
going to go?
  I understand that for some, earning $15,000 a year is something that 
they do not even think exists, that nobody can be that poor. I say that 
because I noticed a quote in the paper this morning from one of our 
colleagues in the other body which I think is just terrific and it says 
something about how some people think. A Congressman from North 
Carolina said:

       When I see someone who is making anywhere from $300,000 to 
     $750,000 a year, that's middle class.

  Middle class? It is not middle class in Louisiana. It is not middle 
class for 100 percent of the people who are on Medicare in Louisiana 
who earn less than $15,000 a year. I would agree with the Congressman 
if middle class is people earning up to $750,000, we do not even need 
Medicare. Let them go buy private insurance. Maybe let them buy a 
hospital if they earn that much money, or buy their own doctor.
  But, Mr. President, seriously, we are talking about people who can 
least afford to be left without some kind of security in their senior 
years with Medicare.
  Why is the Republican plan cutting $270 billion? Very simple, no 
magic about it: They need it to pay for the tax cuts.
  The House created this. It was created over there. It was conceived 
over there. It was born over there. They decided they wanted to put the 
cart before the horse:
  ``We are going to decide if we want to cut taxes by over $300 
billion. You know what, we have to pay for it.''
  ``How are we going to pay for it?''
  ``Oh, I have an idea. Let's cut Medicare, let's cut Medicaid, let's 
cut earned income tax credit, let's cut welfare. By golly, that will do 
it.''
  So, today we have $270 billion taken out of Medicare, not to fix 
Medicare. This is not reform of Medicare. It is the same old status 
quo. It just has less money in it, by $270 billion.
  Is that needed? No. It is very clear that actuaries--these are the 
guys who wear green shades. They are not Democrats or Republicans, they 
are actuaries, CPA's. What do they say we need to do to fix Medicare? 
It is very clear. The actuary for Health and Human Services says 
clearly you can fix Medicare to the year 2006 by reducing the spending 
$89 billion.
  Guess what the Democratic package does? It reduces spending by $89 
billion, not $270 billion, because that is not needed. You wonder why 
the people come up to us in airports and on Main Street and say, 
``Don't let Congress take over Medicare,'' because they are scared to 
death we might do exactly what this plan does: It rips it up, it cuts 
it up in an extreme manner and not to fix it. There is not a real 
innovative idea in their plan, but there are a lot of cuts, and the 
cuts are more than are necessary to fix it.
  That is clear; that is simple. Nonpolitical people have said it, and 
we should get about the business of fixing it with $89 billion, which 
is difficult to do but must be done, and then I will suggest a 
bipartisan commission, with our colleagues on the Republican side 
working with us to come up with a long-term fix. It ``ain't'' going to 
get done by themselves, and we are not going to be able to do it by 
ourselves. Do the short-term fix, appoint a bipartisan commission and 
get the job done.
  Mr. DORGAN. Will the Senator yield? We saw somebody stand up with a 
chart on the other side of the room and say, ``What cut? We are not 
cutting Medicare.'' Can the Senator respond to that?
  Mr. BREAUX. It is $270 billion less money than they had last year. 
You can call that whatever you want to call it, but if it looks like a 
duck, walks like a duck and quacks like a duck, it is probably a duck 
where I come from. This is a duck.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. ROCKEFELLER. I yield 5 minutes to the Senator from Nebraska.
  Mr. KERREY. Mr. President, I hope the Senator from Louisiana was not 
referring to me in his animal comparison.
  I regret to say I support this amendment, not because I believe that 
it is wrong but because I believe Medicare does need to be reformed. I 
do not believe, in fact, we need another bipartisan commission. We have 
a bipartisan commission recommendation that lays out what needs to be 
done long term with Medicare. Unfortunately, in the budget resolution, 
we do not do that. Unfortunately, in this reconciliation agreement, we 
do not do it.
  What we have done is we have identified a short-term need, which is 
to come up with money to fund a series of tax breaks, and we are using, 
among other things, significant reductions in Medicare over the next 7 
years to do it. And worse, Mr. President, we leave the long-term 
problem unchecked. If you doubt it, just look at the cost of mandated 
programs this year versus the cost of mandated programs at the end of 
2002. It is one of the biggest reasons that I seriously doubt that this 
body or the House is going to be able to hang in there and vote these 
kinds of cuts over the next 7 years.
  At the end of this budget cycle, at the end of this 7-year period, we 
will have 25 percent of our budget for appropriated items. That will be 
$400 billion this year for defense and nondefense, and anybody with 
just a rudimentary understanding of the budget would know it is 
unlikely that we are going to be able to get the job done.
  First of all, Mr. President, it does, as many have already said, try 
to come up with savings in the short term in order to be able to fund 
tax breaks. It leaves the long-term problem unchecked. Do not waste 
another million on a bipartisan commission. There is one that Jack 
Danforth and I did. It will not be pleasant when you look at the 
recommendations. The long-term recommendations to phase in changes 
contain many of the things that are asked for by the Republicans, only 
even more so, but over a long period of time, giving people a chance to 
plan.
  One of the reasons that seniors are frightened by this whole debate 
is, as many people have already said, their incomes tend to be low. 
They have a difficult time purchasing insurance and buying health care. 
It tends to be a very high percentage of their disposable income, and 
they are terrified that tomorrow they might receive some health care 
bill that they are unable to pay.
  Second, as far as generational warfare, it is the concern of their 
children and of their grandchildren that they may get stuck with these 
bills as well. So this terror that seniors feel does not come as a 
consequence of Democratic rhetoric, it comes as a consequence of an 
honest evaluation of income and likely expenditures.
  Third, I find objectionable the deals that were made with the AMA, 
particularly on the House side, to get an agreement over there.
  Fourth, it does not reform the system and really use the market and 
allow competition. Mr. President, $152 billion of the savings comes 
from cuts to providers; $71 billion in increased payments by 
beneficiaries; $43 billion by reducing payments to HMO's; only $2 
billion come from increased use of competitive market forces.
  Next, rather than taking a step toward universal coverage, which we 
ought to be doing if we want to have a market economy in the late 20th 
century, when we say to businesses, ``Go out there and be competitive, 
try to keep your costs under control and still have a civil society,'' 
we have to have universal coverage.
  Republicans now have reached a conclusion that they want to preserve 

[[Page S15623]]

Medicare. I suspect Leader Dole will come and say that his remark last 
night was taken out of context. If you want to preserve Medicare, that 
means you recognize at some point the market does not work. Well, it 
does not work for an awful lot of people--over a million in 1994 
alone--who moved into the ranks of the uninsured.
  We need a safety net that provides universal coverage. The problem, 
of course, is that to be able to do that, we are going to have to 
dramatically change the Medicare/Medicaid income tax deduction and the 
VA.
  Next, I have heard it said that we want to give seniors exactly what 
Federal employees have. Please, let us not overpromise again. Our 
salaries are $133,000 a year. Look at the comparisons. We pay $44 a 
month; seniors pay $46, and under the GOP plan, it goes to $89. We have 
unlimited hospital care; theirs is limited. Our prescription drugs are 
covered; theirs are not covered. We have a deductible of $350; they are 
at $816. Here are more extensive services under preventive services, an 
out-of-pocket of $37.50. We do not want to say to seniors--and I have 
heard it said and I know the marketing is going on and this has been 
tested very well. Let us not overpromise here. If we say to seniors 
what we are doing in this proposal is giving you what Federal employees 
have, there is going to come a substantial and a rude awakening.
  In conclusion, Mr. President, I hope that in fact a majority does 
vote for this amendment. I hope we recommit this to the Budget 
Committee and Finance Committee. I would love to participate now in a 
bipartisan effort to control the long-term cost of entitlement and 
mandated spending. I think we are extinguishing our capacity to invest 
in education, transportation, research, child care--those things you 
need in an active economy.
  Mr. President, most particularly, I hope there can be a bipartisan 
consensus begin to emerge as a result of seeing the value of Medicare, 
that we need a new safety net that says if you are a citizen or legal 
resident, you will know with certainty that you are going to be 
covered.
  This proposal takes us away from those goals rather than toward it. 
Therefore, I support the amendment offered by the Senator from West 
Virginia. I hope that a majority of Democrats and Republicans who 
understand the short- and long-term proposal will vote for this 
amendment so we can, hopefully, reach some kind of bipartisan 
consensus.
  Mr. ABRAHAM. Mr. President, how much time is left?
  The PRESIDING OFFICER. The Senator from Michigan has 40 minutes left. 
The Senator from West Virginia has 15\1/2\ minutes.
  Mr. ABRAHAM. At this time, I yield 9 minutes to the Senator from 
Utah.
  Mr. BENNETT. Mr. President, on Monday, October 16, there was a very 
interesting article that ran in the Wall Street Journal. At the 
appropriate time, I am going to ask unanimous consent that it be 
printed in the Record.
  The headline says: ``Clinton Recruits Campaign Team of `Nasty Boys' 
With Reputation as Tough, Savvy Hired Guns.''
  Then the lead paragraph says:

       Gearing up for 1996, President Clinton is fielding a motley 
     crew of re-election strategists with reputations for 
     shrewdness and ruthless tactics. A mainstay on his team, New 
     Yorker Henry Sheinkopf, readily boasts, ``I subscribe to 
     terror.''

  That is a very interesting statement, Mr. President. I have had it 
put on a chart--we are debating this whole thing with charts--``I 
subscribe to terror.''
  He goes on to say in the article:

       Terror tends to work . . . because it is so easy to make 
     people hate.

  Now, back to the article, quoting:

       Mr. Sheinkopf doesn't deny the remarks, but says they were 
     taken out of context. He says he was addressing the strategy 
     for a noncandidate campaign . . .

  A noncandidate campaign. That is very interesting because what we 
have running on the airwaves today is a series of television ads that 
are terrorizing our senior citizens, and this is a noncandidate 
campaign. Mr. Sheinkopf was the architect of this summer's 
unprecedented ad campaign on crime.
  This is the next statement that I have here on a chart. He is part of 
the group that wanted to start the Medicare ads early this summer. 
Quoting now:

       The team wanted to attack the GOP with Medicare ads in 
     early September . . . they got the go ahead.

  Again, he said, ``I subscribe to terror.'' That is the statement of 
the President's strategist on noncandidate campaigns.
  There is more in the article. I will quote a few before I turn 
directly to the Medicare debate. But this demonstrates what we are 
faced with, as far as the ads currently running on television are 
concerned. Quoting:

       Already, friends of the administration peg these 
     mercenaries ``The Nasty Boys.'' Like Mr. Clinton, many of 
     them are accused of lacking an ideological rudder, allowing 
     them to roam from left to right on policies.

  Elsewhere in the article, it says:

       Elizabeth Holtzman will never forget when she first heard 
     about Mr. Sheinkopf. The former New York congresswoman was 
     running for Brooklyn district attorney in the 1980s when, she 
     says, her opponent fired off one of the ``nastiest, sexist 
     ads'' she had ever heard. . . . She found out the spot was 
     created by Mr. Sheinkopf.
       Her reaction? She hired him for her next campaign.
       ``He's very creative,'' Mrs. Holtzman says. And, like other 
     members of this media team, he'll bat for most anyone--as 
     long as they are paying clients.

  Mr. President, I ask unanimous consent that the entire article be 
printed in the Record at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. BENNETT. Mr. President, I found this interesting because it 
demonstrated what is happening to political debate in this country when 
we are not debating the merits or demerits of the proposal before us. 
Instead, we are mounting 30-second spots to attack each other in the 
spirit of terror. That is not my word, but the word of the man whom the 
President of the United States has chosen to advise him on this 
particular issue.
  By contrast, Mr. President, I am aware of some focus groups that have 
been held in an attempt to understand this issue, where the Republican 
plan was described in as neutral a term as possible and the Democratic 
proposal is described in as neutral a term as possible; they were 
presented to a group of senior citizens in a focus group, with the 
first called the Smith plan and the second one called the Green plan. 
Discussion was held, without any prejudice one way or the other. When 
it was over, they found that by about an 80 percent to 20 percent 
margin, in virtually every section of the country where this attempt 
has been made to find out people's reaction, the Smith plan out-polled 
the Green plan. And only then was it unveiled to these people that they 
had, in fact, by a vote of 4 to 1, subscribed to the Republican 
position rather than the Democratic position on this issue.
  I find this very encouraging for this reason, Mr. President. I go 
back to the debate in the last Congress over health care when the 
President unveiled his health care proposal. A very substantial 
majority of Americans were in favor of it. We on this side of the aisle 
felt very lonely in our opposition to it, but we were sustained by this 
knowledge: The more people that knew about the President's plan, the 
less they approved of it. The more the information got out, the more 
the poll numbers fell. So that by the time we finally got to the 
resolution of that issue on this floor, they had switched completely. 
Instead of being 2 to 1 in favor of the President's plan, they were 2 
to 1 in opposition to the President's plan.
  Based on the research that has been done in this nonideological 
fashion, we find that the more people know the facts of the Republican 
proposal on Medicare, the more they support it. So that, over time, the 
American people--as they did with President Clinton's plan--are going 
to move in the direction of supporting the Republican position.
  Right now, if you look at the polls, they are virtually identical. If 
you poll Americans, about 50-50 are saying we are for the Democrat 
position or we are for the Republican position. That would bother me a 
great deal if I did not know that the more people know about the 
particulars of our plan, the more they support it.
  So I urge my fellow Republicans to stand firm with where we are, 
knowing that time is on our side, that facts are 

[[Page S15624]]

on our side, and do not be terrorized by the deliberate program of 
terror that is being mounted primarily out of the White House and from 
the Democratic National Committee.
  I yield the floor.

                               Exhibit 1

             [From the Wall Street Journal, Oct. 16, 1995]

  Clinton Recruits Campaign Team of ``Nasty Boys'' With Reputation as 
                        Tough, Savvy Hired Guns

                         (By Michael K. Frisby)

       Washington.--Gearing up for 1996, President Clinton is 
     fielding a motley crew of re-election strategists with 
     reputations for shrewdness and ruthless tactics. A mainstay 
     on his team, New Yorker Henry Sheinkopf, readily boasts, ``I 
     subscribe to terror.''
       Already, friends of the administration peg these 
     mercenaries ``The Nasty Boys.'' Like Mr. Clinton, many of 
     them are accused of lacking an ideological rudder, allowing 
     them to roam from left to right on policies. Bill Lacy, a 
     strategist for GOP frontrunner Sen. Robert Dole of Kansas, 
     says he expects ``a scorched earth campaign'' from this 
     group.
       The Clinton-Gore re-election campaign will be headed by a 
     prominent Democrat, perhaps a cabinet member, who will set 
     the grand blueprint with the president. But every campaign 
     relies on its savvy strategists and creative media team to 
     fire up voters. And Mr. Clinton has loaded his campaign with 
     the most aggressive war counselors available.
       Led by Dick Morris, of Connecticut, the president's media-
     message team also includes the New York polling firm Penn & 
     Schoen Associates Inc. It's anchored by Washington veteran 
     Robert Squier, a firebrand himself, who plays a calming role 
     on this feisty group. ``We are putting together an exciting 
     creative team that can pick up where the strategic thinking 
     leaves off,'' Mr. Squier says.
       It is Mr. Sheinkopf, a whiz at low-budget ads, who has 
     raised the most eyebrows. A year ago, he shared his trade 
     secrets at a convention of political consultants and talked 
     about using fear to win campaigns. Mr. Sheinkopf told the 
     gathering, ``Terror tends to work . . . because it is so easy 
     to make people hate.''
       Mr. Sheinkopf doesn't deny the remarks, but says they are 
     often taken out of context. He says he was addressing the 
     strategy for a noncandidate campaign, such as a referendum 
     fight, in which the clients don't have much money. ``I'm 
     tough, but I'm not ruthless,'' he insists. ``I fight for my 
     clients.''
       Elizabeth Holtzman will never forget when she first heard 
     about Mr. Sheinkopf. The former New York congresswoman was 
     running for Brooklyn district attorney in the 1980s when, she 
     says, her opponent fired off one of the ``nastiest, sexist 
     ads'' she had ever heard. ``The voice said, `She's a very 
     nice girl. I might like her for my daughter, but not district 
     attorney,''' Ms. Holtzman recalls. She found out the spot was 
     created by Mr. Sheinkopf.
       Her reaction? She hired him for her next campaign.
       ``He's very creative,'' Ms. Holtzman says. And, like other 
     members of this media team, he'll bat for most anyone--as 
     long as they are paying clients.
       Mr. Sheinkopf's claim to fame is hot radio spots for 
     African-American candidates, many of whom are liberals. Yet, 
     he and his partner, Gerry Austin, in the wake of the riots 
     after the Rodney King case, worked on behalf of Los Angeles 
     police officers fighting a reform measure on the ballot. Mr. 
     Morris, a longtime associate of Mr. Clinton, has worked for 
     conservative Republicans, such as Mississippi Sen. Trent 
     Lott. Mark Penn, a partner in Penn & Shoen, worked for 
     maverick Ross Perot in 1992, and the firm does considerable 
     work for corporations.
       Thus far, the consultants, with Mr. Morris calling the 
     shots, have helped bring Mr. Clinton back to life after last 
     fall's GOP sweep. ``They have presented a disciplined and 
     controlled message,'' said Democratic strategist Robert 
     Beckel. ``It has put the president back in the dance.''


                          push for budget plan

       Even Mr. Morris's critics tip their hats to his pushing the 
     president to offer up a balanced-budget plan last spring, a 
     move that embittered other Democrats. Mr. Morris argued it 
     would gain the president credibility on economic issues, 
     opening the door for him to now hammer the GOP for squeezing 
     Medicare and education funds without appearing to be a tax-
     and-spend Democrat.
       Mr. Sheinkopf was the architect of this summer's 
     unprecedented ad campaign--16 months before the election--
     portraying Mr. Clinton as tough on crime. Using his 
     connections, the former New York City police officer lined up 
     cops around the country for the ads.
       Inside the White House, the acceptance of Mr. Morris and 
     his crew is growing, but there are still spats. The team 
     wanted to attack the GOP with Medicare ads in early 
     September, but were blunted by Deputy Chief of Staff Harold 
     Ickes, who doesn't want to get caught short on campaign cash 
     next summer. By late September, however, the media team got 
     the go-ahead.
       Aides say that while Mr. Clinton values his hired guns, the 
     president is comfortable with Mr. Ickes controlling the purse 
     strings and taking charge of relations with the Democratic 
     base--unions, liberals and minority voters.
       The team may prepare one more media hit before January; it 
     is likely to be either a package on the budget battle or 
     about Mr. Clinton cherishing the same values as average 
     Americans.
       Some Democrats privately raise concerns about whether this 
     crew is ready for prime time, however. Mr. Morris, for one, 
     is described by many as brilliant, but has his share of 
     bloopers. Last year, he produced an ad for Tennessee GOP 
     gubernatorial candidate Don Sundquist that people still talk 
     about. It was a high-tech TV spot with a car driving in a 
     video game, crashing into barriers with signs carrying the 
     theme that the candidate was against taxes.
       ``It didn't have the desired effect,'' concedes Ray 
     Pohlman, the campaign manager. But in the next breath, he 
     says Mr. Morris is fabulous at deciphering polling data and 
     crafting a message. And Mr. Sundquist won the election.
       The strategizing on the Clinton campaign goes right down to 
     bringing in an outside expert to do the video work. Mr. 
     Morris, who was responsible for hiring Mr. Sheinkopf, also 
     recruited Marius Penczner, who runs a video production house 
     in Memphis, Tenn. Mr. Penczner, whom Mr. Morris met on the 
     Sundquist campaign, is known more for country music videos 
     than political work. Mr. Clinton has marveled at the quality 
     of Mr. Penczner's Oval Office video shots, which are in most 
     of the president's TV spots.


                           Controversial Poll

       Mr. Morris also picked Penn & Schoen as the campaign 
     pollsters, virtually ousting old Clinton hand Stan Greenberg. 
     Their results, however, are sometimes controversial. Their 
     poll put then-Ohio Rep. David Mann up 28 points in his 
     Democratic primary fight against State Sen. William Bowen. A 
     short time later, fund-raising letters went to political 
     action committees, citing Mr. Mann's lead. He won the race, 
     but by two percentage points. ``We laughed at that poll,'' 
     recalls Mr. Bowen. ``It was just part of their tactical 
     strategy to show him way in front; that wasn't the case.''
       The poll was five months before the election, and undecided 
     voters later turned against the incumbent, says Douglas 
     Schoen. ``We always thought it would be close,'' he says, 
     noting a poll closer to the election showed a tighter 
     contest.
       The new Clinton campaign team raises concerns among 
     presidential scholars. While applauding their cleverness, 
     experts search for the intellectual thrust. Mr. Clinton likes 
     to be compared to President Truman, who overcame a hostile 
     Congress to win re-election. But Fred Greenstein, a Princeton 
     University historian, notes Truman's comeback was fueled by 
     the intellectual energy of Clark Clifford and others--not 
     image-makers. And that, he says, is missing from a Clinton 
     team searching for the best political answer.
       ``Maybe you need someone with substantive fiber to give you 
     advice,'' Mr. Greenstein says.

  The PRESIDING OFFICER. Who yields time?
  Mr. BREAUX. I yield 30 seconds.
  Mr. WELLSTONE. Mr. President, I say on behalf of my good friend, 
Senator Harkin, and myself, the Senator from Utah says the more people 
learn about the plan--we just got there. There has not been one 
hearing. How many pages are there?
  Mr. HARKIN. There are 2,000 pages.
  Mr. WELLSTONE. Mr. President, 2,000 pages, and people do not know 
what is in here. We did not have experts come to committee. People in 
Iowa, Minnesota, and across the country----
  Mr. HARKIN. How many days of hearings have we had?
  Mr. WELLSTONE. Not anything.
  Mr. HARKIN. Zero. The American people have no idea what is in this.
  Mr. WELLSTONE. The people do not know about this.
  Mr. JOHNSTON. Mr. President, 23 years ago I came to the U.S. Senate 
as what we call a Southern conservative. There are not as many of us 
left as I would like there to be, but throughout that time, Mr. 
President, I have frankly given my party some consternation by opposing 
some things which I thought were too liberal, particularly when it came 
to what I thought was income redistribution.
  I can recall opposing the CETA Program because I thought it was sort 
of a make work program that would take money and give it to poor 
people, just sort of without working.
  Now, Mr. President, in spite of the fact that I remained through all 
those 23 years as a Southern conservative, I oppose strongly this 
program.
  Mr. President, this program goes in the exact opposite direction 
because it is income redistribution from bottom to the top.
  Mr. President, I will be leaving this institution in another year. I 
must say that we are leaving, if this passes, we are leaving in its 
wake a real difficult situation for people of modest means in this 
country.

[[Page S15625]]

  While we are taking care of those who are better off--the tax credit 
for children goes up to $110,000, people with those incomes--the top 1 
percent, Mr. President, in this country, are going to get almost $5,000 
per person.
  Mr. President, what this does to poor people, what it does to people 
of modest means in my State--this is not scare tactics, Mr. President--
we are going to have 4,700 fewer people on Head Start, school loans are 
going to be restricted, summer jobs are eliminated by the thousands in 
my State.
  There will be 406,000 children in Louisiana whose nutrition is going 
to be cut because of this program. Mr. President, 60,000 people of 
modest means in my State are going to have to pay more for housing.
  Mr. President, going right down the line--look at Medicare. We will 
have 17 million low and moderate-income people in this country who will 
have an average tax increase of $352. The Medicare people who are 
having their Medicare cut, their average income is $17,750, while we 
are giving tax cuts to those of greater income.
  Now, Mr. President, there is a blizzard of propaganda----
  The PRESIDING OFFICER. The 3 minutes yielded to the Senator has 
expired.
  Mr. JOHNSTON. Mr. President, I oppose this program because it is 
income redistribution from the bottom to the top.
  Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from 
Delaware.
  Mr. ROTH. Mr. President, as chairman of the Finance Committee, I must 
oppose the Democrats' amendment for one simple reason: It does not 
preserve the Medicare Program for this generation, and, especially 
important, not for future generations. That was the conclusion that the 
Finance Committee came to when it voted down this amendment during our 
deliberations.
  My good friends and distinguished colleagues, Senators Moynihan and 
Rockefeller, offered a similar amendment during the Finance Committee 
markup to save $89 billion from the Medicare Program over the next 7 
years. Frankly, it did not go far enough then and it does not go far 
enough now.
  The Congressional Budget Office did a preliminary estimate of the 
Medicare trust fund effects of the Democrats' amendment to save $89 
billion from the Medicare Program. Remember, it is the CBO office that 
the President himself said is the one that should be making these kind 
of determinations.
  Here is what CBO's preliminary estimates showed would happen to the 
Medicare HI trust fund if only $89 billion is saved over the next 7 
years. The Medicare HI trust fund would only be solvent through the 
year 2004. In other words, it would get us through the next election.
  CBO further said that the Medicare HI trust fund would have a 
negative balance of $8.4 billion in the year 2005. This would mean that 
Medicare could not pay its bills on time in the year 2005.
  Even more alarming under the Democrats' proposal, CBO says that the 
Medicare trust fund could not even pay a full year's Medicare benefits 
starting in the year 2001. Mr. President, that is only 6 years from 
now.
  In contrast, CBO says that our proposal meets the Medicare trustees. 
Remember, those trustees are primarily appointed by the President. It 
says it meets the Medicare trustees' 10-year test of financial 
adequacy. In other words, Medicare has enough money in the HI trust 
fund at the end of every year--that is critically important--at the end 
of every year for the next 10 years, to pay the entire next year's 
Medicare benefit.
  Mr. President, the Medicare HI trust fund has a $300 billion balance 
in the year 2005. The Medicare trust fund balance is increasing--would 
be increasing instead of decreasing every year.
  Using CBO's estimate through 2005, we went to the Office of the 
Actuary to get their preliminary estimate of how long solvency would be 
extended under our proposal. The Medicare HI trust fund solvency will 
be extended until about the year 2020 under the proposal. That is our 
estimate, in consultation with the Office of the Actuary. That is a 
quarter of a century from today.
  What a contrast to what would happen under the proposal before when 
it would only be solvent to 2005.
  Mr. President, $89 billion in Medicare savings just is not enough. 
Even the President earlier this year said that at least $127 billion in 
Medicare savings are necessary.
  Let me just say, Mr. President, a few words about the need for 
savings to Medicare part B. Most attention has been focused on the need 
to restore solvency in the part A trust fund.
  But part B spending is a big, big problem. According to Medicare 
public trustees--again, appointed by President Clinton--the Medicare 
part B spending shows a rate of cost which is clearly unsustainable. 
Medicare part B spending was $2 billion in 1970. In 1995 the 
Congressional Budget Office estimates Medicare part B spending to be 
about $66 billion.
  The PRESIDING OFFICER (Mr. Gorton). The time yielded to the Senator 
from Delaware has expired.
  Mr. ABRAHAM. I yield the Senator from Delaware an additional minute 
of time.
  The PRESIDING OFFICER. The Senator from Delaware is recognized.
  Mr. ROTH. Mr. President, let me conclude by saying that without 
savings in the part B program we cannot say that we have effectively 
tackled the problem of fixing Medicare. Therefore, I oppose the 
Democrats' amendment because we have already debated and voted down 
this amendment in the Finance Committee. It does not go far enough to 
help the Medicare HI trust fund, and we do not want to do it in small 
steps that will only cost more and create greater hardship. It appears 
to do nothing, to be candid, to slow Medicare part B spending, which is 
a significant problem. For that reason, I must oppose the amendment.
  I yield back the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. ABRAHAM. Mr. President, I inquire as to how much time is left at 
this point?
  The PRESIDING OFFICER. The Senator from Michigan has 25 minutes. The 
Senator from West Virginia has 11\1/2\ minutes.
  Mr. ABRAHAM. At this time I yield 5 minutes to the Senator from 
Georgia.
  The PRESIDING OFFICER. The Senator from Georgia is recognized.
  Mr. COVERDELL. Mr. President, this whole debate baffles me. I think 
it really boils down to those who want the status quo and those who 
want to confront the fiscal dilemma.
  The entitlement commission was chaired by the distinguished Senator 
from Nebraska who is on the floor right now and that sets the predicate 
for everything that has to be done. I commend the Senator for that 
work. I wish a lot more was being said about it.
  But, in essence, that report says that within 10 years all U.S. 
revenue and wealth is exhausted by five programs: Social Security, 
Medicare, Medicaid, Federal retirement, and the interest on our debt. 
And then there is nothing left.
  So it is entirely appropriate that the new majority confront these 
issues. In the discussion, with repeated frequency, the other side 
tries to link the tax reduction that we are proposing to Medicare. Over 
and over and over we hear that somehow, something is being taken away 
from Medicare to help a tax reduction.
  The President, of course, has already admitted that he raised taxes 
too much in 1993. We are trying to help him fix it, even without the 
support of his colleagues here on the Senate floor.
  But this is not a vacuum in which we are operating. What happens to 
the $245 billion in tax reductions? First of all, the savings on 
Medicare by law stay in Medicare and extend the solvency, which is why 
we have been given assurances that our Medicare proposal will assure 
solvency for a quarter century, 25 years. Their suggestion gives us 24 
months. Is America looking for a Band-Aid or a solution for these 
senior citizens?
  Let us step aside. Why are we coming forward with a tax reduction? I 
read here, from Llewellyn H. Rockwell, of the Ludwig Von Mises 
Institute in Auburn, AL. He says:

       Even as family income has declined since 1970, the Federal 
     Government's tax hike in real terms has increased more than 
     600 percent.

  An average family, making $40,000 a year, with two children, is 
seeing half 

[[Page S15626]]

their total income absorbed and taken away by a Government. In 1950, 
Ozzie and Harriet, the quintessential family, sent 2 cents out of every 
dollar off to Washington. If Ozzie was here today, he would be sending 
24 cents to Washington.
  The point is we have marginalized the average family. We have taken 
so much of their resource away from them that they are unable to 
fulfill their principal obligations to their children --to housing, to 
clothing, to education and health. So, it is important that there is a 
tax reduction. Their President has already acknowledged it. And we are 
fulfilling it.
  Mr. President, 70 percent of this tax relief will go to families with 
incomes under $75,000. This proposal alone, for this family that makes 
$40,000, the combination of the tax reduction and the balanced budget, 
will put between 2,000 and 3,000 new dollars on the kitchen table of 
every family home. That is an equivalent increase of their disposable 
income of 10 to 20 percent, depending on the family. That relief is 
long overdue.
  We will lower their interest payments on their mortgage, probably 
about $50,000, by $1,081. We will lower the interest expense on their 
car loan by about $180 a year; on the student loan, by $220 a year; on 
their credit card. With the two children, they will get $500 for each 
child.
  This is just the beginning, and that is $2,500 to that average 
family. Given the fact we are taking half their income now, do we not 
think it is about time that something got back to the average family? 
This tax relief does not disappear. This goes to real working families, 
real people who are having a hard time making ends meet. To extend 
solvency and to help the middle-income family is entirely appropriate.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The time of the Senator has expired. Who 
yields time?
  Mr. CHAFEE addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from 
Rhode Island.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. CHAFEE. Mr. President, what I would like to do this afternoon, 
briefly, is to address the so-called part B premium situation. It seems 
to me, in all of this political maneuvering around here, the Democratic 
Party has overlooked the unfairness that is occurring in the part B 
premium.
  What is the part B premium? The part B premium is an insurance 
program that those on Medicare take out if they wish. When Medicare was 
set up, under the part B proposal the Federal Government was going to 
pay half the cost of the premium, and the insured was going to pay the 
other half. But over the years that has deteriorated so now, currently, 
the insured is paying 31.5 percent. Not 50 percent of the premium, but 
31.5 percent.
  Do we change that? No, we do not change that at all. That remains 
constant at 31.5. I do not know how anybody could complain about that. 
You get 100 percent of the premium and you only pay 31.5 percent for 
it.
  We then go on to say, wait a minute, this is costing the Federal 
Government a lot of money. It is costing the Federal Government $42 
billion a year to subsidize that part B premium, the other 69 percent. 
So we say, is it not fair for the richer people to pay more of that 
premium? So that is what we provide. We provide for individuals with 
$50,000 of income--this is not some pauper, this is an individual with 
$50,000 of income--or a couple with $75,000 of income, that they will 
then start paying more of that premium than 31.5 percent. Apparently 
they do not think that is fair. I think it is eminently fair. Why 
should some jewelry worker in the city of Providence have his or her 
wages deducted and go into the general Treasury and come out to pay 
some wealthy person's premium under part B of Medicare?
  But does that person at $50,000, or $75,000 a couple, have to pay all 
the premium?
  The answer is no, they do not. They just start paying more than the 
3l.5 percent. When do they start paying the full part of the premium? 
When the individual reaches $100,000 and the couple reaches $150,000.
  So, Mr. President, this is a very fair program. By the way, if the 
person does not want that insurance, they do not have to take it. It is 
an optional program. I do not know. Apparently, over on the other side 
they think it is wonderful that the Federal Government subsidizes these 
insurance programs.
  Jack Kent Cooke, the owner of the Redskins, is having 70 percent of 
his doctors' bills paid for by some worker, somebody who cleans up the 
halls or works in a restaurant. I do not think that is fair.
  I think the program that the Republicans have submitted in connection 
with Medicare is an eminently fair program, and, Mr. President, I urge 
its support in this Chamber.
  I think there is no need for this recommittal motion whatsoever.
  The PRESIDING OFFICER. Who yields time?
  The Senator from West Virginia.
  Mr. ROCKEFELLER. I yield 4 minutes to the Senator from Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Thank you, Mr. President. I thank my friend from West 
Virginia.
  Mr. President, the Senator from Rhode Island said that he thinks it 
is eminently fair. Let me try to just reduce it to the simplest, and I 
think the most truthful assessment of what is fair and what is not 
fair. Most Americans, when they stop and look at what is about to 
happen, are going to wind up asking if it is fair to take an assessment 
by the trustees of Medicare that says there is a $90 billion problem, 
and turn it, through political sophistry, into a $270 billion problem 
so that you can give a $245 billion tax cut. That is absolutely what 
this comes down to.
  This is a zero-sum game. This is a process of balancing the budget. 
And in their balanced budget, they are offering a $245 billion tax 
reduction to Americans. How do they get it? They do not pull it out of 
the sky. It has to be balanced against other items in the budget. And 
in order to find the room to balance the budget and provide the $245 
billion tax cut, they give a $270 billion definition to a Medicare 
problem that the trustees themselves call an $89 billion problem. It is 
that simple. Take away the smoke, take away the mirrors, and take away 
the rhetoric. You cannot balance the budget with a $245 billion tax 
break without finding the money somewhere. And they find the money by 
taking it from seniors. Is that fair?
  They say to Americans they are giving every American family a tax 
break for having children--the $500 credit. But analysis will show 
that, too, is not only not fair, but it is not truthful because not 
every American family will get the tax credit because not every 
American family qualifies because of income to have an income tax 
reduction. Most American families pay their taxes--a large burden--
many, through the payroll tax. And because the tax credit is not 
refundable to them at the lower end of the income scale, they will not 
get the benefit. So not only do you have a skewed tax relief, so to 
speak, but you have a discrimination against the hard-working average 
taxpayer of America.
  But it is even worse than that, Mr. President. Because while they 
give a tax break of about $5,000-plus to the person earning more than 
$350,000 a year, they raise the taxes on the person earning less than 
$30,000 a year.
  That is an extraordinary definition of fairness. I do not know where 
you get that definition of fairness. The Medicare cuts themselves are 
going to be devastating, devastating. There are more and more post-
World War II baby boomers who are reaching the age of 65, and the 
number of people paying taxes to pay for them is diminishing. Today you 
have an estimated four taxpayers supporting a Medicare part A 
beneficiary, four people supporting one. But when the baby boomers 
retire between the years 2010 and 2015 you are going to go down to 
about two people paying for each one of those on part A.
  The result of that with these cuts is going to be that you are going 
to have an overall population increase of 2 percent, but are you are 
going to have a 30-percent increase of people on Medicare looking for 
their retirement benefits under Medicare? The problem is under the cuts 
and the reductions of 

[[Page S15627]]

the total pot that will be made available by the Republicans, you are 
going to be having people come in at a 30-percent increase saying, 
``Where are the benefits that I am due?'' And they are not going to 
have them.
  Mr. President, this is not fair. It is not sensible. And I hope that 
we will adopt the amendment of the Democrats to have a fair 
distribution of solving the problem.
  Mr. President, the Medicare and Medicaid cuts proposed by the 
Republicans hurt people and families.
  The Republican cuts eliminate jobs, and these Democratic amendments 
protect jobs.
  Republican cuts affect the quality of care for nursing home patients, 
and these Democratic amendments maintain care--for seniors, for people 
with disabilities, and for children while still containing costs.
  These Democratic amendments scale back tax breaks for the wealthy to 
help people in my State and around the country who are struggling to 
make ends meet.
  My Republican colleagues are offering a $270 billion solution--at 
least $160 billion more than is necessary to ensure the financial 
solvency of Medicare.
  We have been told by the Medicare trustees that there is a pending 
financial disaster that could result in the total collapse of the 
Medicare part A program unless changes are enacted.
  According to the trustees, the magnitude of the crisis is around $89 
billion. The Republican solution is to make changes impacting both 
beneficiaries and providers that would save $270 billion--three times 
the amount necessary to fix the current financial crisis.
  It is important that people across America recognize that Medicare is 
faced with a short-term crisis that can be fixed without totally 
dismantling a program that has provided economic health security to 
millions of retired Americans since its inception.
  While I fully recognize that there is a financial crisis confronting 
Medicare, and believe it is probably somewhere beyond $89 billion, but 
substantially less than the Republican solution, the Gingrich solutions 
are anything but solutions.
  The solutions being put forth fail once again to take into 
consideration the changing composition of the over-65 population. For 
example, do the solutions being proposed really fit the acute and long-
term care needs of current and future generations of retired Americans?
  With more and more post World War II so-called baby boomers beginning 
to reach age 65, the number of workers paying taxes will continue to 
decline, while the number of Medicare recipients continues to increase.
  Today, an estimated four taxpayers support a Medicare part a 
beneficiary. However, when the baby boomers retire between 2010 and 
2015, the estimated number of taxpayers paying for each Medicare part a 
beneficiary will have dropped by two.
  Thus we will have gone from a 4-to-1 ratio to a 2-to-1 ratio in just 
a few years.
  By 2008, our overall population will increase by 2 percent, but our 
retired population will increase by 30 percent.
  The Medicare changes will, however, cause one additional problem--a 
reduction in health care employment and other jobs that indirectly 
benefit from the health care sector.
  Let us look at the impact on my State: Jim Howell of the Howell Group 
has recently issued a study that shows that the proposed combined cuts 
in Medicare and Medicaid of $452 billion will conservatively result in 
a $13 billion loss to the State over 7 years.
  Massachusetts could lose 71,000--71,000--health sector jobs and the 
indirect employment impact could result in $165,000 lost jobs.
  The hardest hit towns would be Boston, Brockton, Cambridge, Fall 
River, Farmingham, New Bedford, Salem, Springfield, and Worcester.
  The proposed $1 billion cut in funds for graduate medical education 
will have a devastating impact on institutions and it will hurt 
Massachusetts' knowledge-based economy by disrupting the network of 
medical schools, research institutions, health care providers, and 
biotech firms.
  The proposed cuts would result in aggregate personal income losses in 
the State of $2.1 billion.
  The health of seniors and children, and the loss of jobs at a time 
when working families are struggling to make ends meet is just too high 
a price to pay.
  The problems for Massachusetts are intensified when we examine the 
potential impact of the proposed cuts in Medicaid--the health care 
program for poor children disabled persons, and seniors.
  Under the Republican plan, Massachusetts would lose approximately 
$4.6 billion.
  With regard to children, one out of every three low-income who is 
currently receiving health insurance coverage from Medicaid is in 
jeopardy of losing their coverage.
  For elderly persons in Massachusetts, the impact is more severe. 
Currently, 75 percent of all patients in Massachusetts nursing homes 
are dependent upon Medicaid to help pay for the costs of nursing home 
care.
  Under the Republican plan, more than 25,000 seniors would lose their 
Medicaid eligibility by 2002.
  I believe the Republican response to the Medicare crisis can best be 
summed up as follows: it does not focus on the future of the overall 
program; it does not address the growing long-term care crisis facing 
Americans of all ages but particularly elderly Americans; and it does 
not address or take into consideration the impact such dramatic cuts 
will have on employment in the health care sector, and on those 
communities who have become dependent upon this sector as a means of 
fighting or deterring rising unemployment.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. ABRAHAM. Mr. President, at this time I yield to the Senator from 
Tennessee 7 minutes.
  How much time remains?
  The PRESIDING OFFICER. The Senator from Michigan has 15 minutes-plus 
remaining, and the Senator from West Virginia has almost 7 minutes.
  The Senator from Tennessee.
  Mr. FRIST. Mr. President, I rise to speak against the motion. Why? 
Because the plan we have on the table addresses three central issues.
  First, it prevents bankruptcy of not just for part A, not just the 
hospital part of the trust fund, but it prevents the bankruptcy of the 
entire program.
  Second, our plan, our underlying bill, increases spending, increases 
spending from $4,800 by nearly $2,000 per beneficiary to $6,700. That 
is an increase in spending.
  And, third, our program improves Medicare as we know it today.
  As has been pointed out by my colleagues before, we have a program 
that is a good program. I say that as a physician who has taken care of 
thousands of Medicare patients. It is a good program. But it is an 
antiquated, out-of-date program that locks seniors' hands, that 
deprives them of choice. We want to give them choice. We want to give 
them the opportunities that you have, that I have, that most people, 
the majority of people have who are less than 65 years of age today.
  The Democratic motion ignores the fundamental problem. The problem is 
twofold. It really has not been discussed very much over the last hour 
and a half.
  The first part of the problem is that it is an outdated program. It 
does not meet the needs of our senior citizens today, or individuals 
with disabilities, or why would 70 percent of them have to go outside 
and buy additional coverage for Medicare? Why is it that Medicare today 
does not cover prescription drugs?
  As a heart surgeon, as a lung surgeon, as somebody, again, who has 
taken care of so many Medicare patients, I can tell you our senior 
citizens need help with their prescription drugs. Today, we deny 
choice. We deny the right to choose to our senior citizens. Is that 
fair? Does the other side not want to offer the same choice that we 
have to our seniors?
  That is the first part of the problem. To me, that is what is most 
exciting about our solution that is in the underlying bill--is that we 
improve the program.
  Second, it is the program that has unsustained growth. The growth has 
been at about 10 percent a year. It is of the entire program. We talk a 
lot about the trust fund, part A. I think people 

[[Page S15628]]

broadly need to know that part A is one part of the problem. Part A is 
the hospitals. Part B is the doctors. This particular proposal by the 
Democrats today addresses the part A part of the trust fund without 
addressing the overall connection, without addressing the overall 
program.
  That is really in spite of the fact that the trustee report says very 
specifically--and, again, this is the trustee report, six trustees, 
trustees of Medicare, three of whom are in the Clinton Cabinet, and 
they say very clearly, ``We strongly recommend that the crisis''--we 
cannot just put another Band-Aid on this--``presented by the financial 
condition of the Medicare trust funds''--funds, not just part A, funds, 
the overall program--``be urgently addressed on a comprehensive 
basis.''
  We cannot just throw $89 billion at part A, one part of these trust 
funds, and expect to solve the problem long term.
  We address the program in a comprehensive way. We address part A, the 
hospitals; part B, physicians, the complex interaction that comes 
between the two. As a physician who works in a hospital and works in a 
clinic, I can tell you it is a complex interaction and you cannot 
address just part A. If you squeeze part A, part B will balloon out.
  The Democratic motion addresses only part A. And, again, if you go 
back to the trustee report, the trustees say it is not a problem just 
with part A. It is both trust funds. ``Both the Hospital Insurance 
Trust Fund''--that is part A--``and the Supplemental Medical Insurance 
Trust Fund show alarming financial results.'' The part A ``trust fund 
continues to be severely out of financial balance and is projected to 
be exhausted in about 7 years.''
  The distinguished chairman of the Finance Committee just read the 
report from the CBO that says maybe the $89 billion which is in this 
proposal by the Democrats today will extend that trust fund, just that 
part A, for 2 years, maybe 2 years. It does not address the underlying 
problem.
  Going back to the Medicare trustees report: ``The HI Trust Fund 
continues to be severely out of financial balance. * * * The SMI Trust 
Fund''--part B, not addressed by this proposed amendment today--``shows 
a rate of growth of costs which is clearly unsustainable.'' Clearly 
unsustainable.
  My point is, we have a program here you cannot just address one part 
without addressing the overall program.
  Let me go back to a chart that was shown earlier by my colleague from 
New Hampshire that shows that we are going bankrupt in 7 years. In 7 
short years there will be no Medicare part A trust fund.
  Again, the distinguished chairman of the Finance Committee said that 
the CBO's preliminary estimate shows what will happen to the Medicare 
trust fund if only $89 billion is saved over the next 7 years. Their 
conclusion: The Medicare HI trust fund is solvent through the year 
2004.
  So what we have done is taken this curve and shifted it 2 years, put 
a Band-Aid on it without addressing the underlying problem--again, 
short-term solutions. That seems to be so much the approach here.
  We are addressing it long-term.
  Let me see the next chart. Again, this is a chart that shows next 
year, if we do nothing, we will begin deficit spending in the year 
1996. Again, what we do with the motion in the Chamber now is to shift 
this curve out, not change the slope of the curve at all but shift the 
curve out 2 years for some commission to decide in the future.
  In summary, the problem today is an antiquated, outdated system which 
serves senior citizens well but not as well as the private system 
serves people under 64 years of age.
  We address that problem. The proposal in the Chamber currently, which 
I oppose, by the Democrats does not address the overall antiquation of 
the system.
  Second, the Democratic proposal in the Chamber ignores this complex 
relationship between A and B, touches just upon A.
  And third, the Democratic proposal, as Senator Roth pointed out, the 
only thing it does is move these problems out another 2 years beyond 
the next election.
  Ours is a long-term solution.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from West Virginia.
  Mr. ROCKEFELLER. Mr. President, I yield 3 minutes to the Senator from 
Delaware.
  The PRESIDING OFFICER. The Senator from Delaware is recognized.
  Mr. BIDEN. I will be necessarily brief, Mr. President.
  Mr. President, I find it fascinating to hear none of my Republican 
colleagues stand up and say the Medicare system is bad. They say things 
like it is antiquated and outdated, but it serves the senior citizens 
well. How in the heck can that be done? How can it be antiquated, 
outdated, and serve the senior citizens well?
  The second thing I would like to say is in response to my friend from 
Georgia talking about Ozzie and Harriet. Let me tell you how Ozzie and 
Harriet are going to work under this proposal. They are going to find 
out that their mother and their father on Medicare are going to pay 
$800 or $900 a year more come the year 2002. Then when grandmom and 
grandpop come to Ozzie and Harriet, because they have the same middle-
class values as the Senator from Georgia and I do, and mom says, 
``Ozzie, I tell you what, these Republicans gave me a choice; I can pay 
$800 more or I can go into one of these HMO things, but I do not get to 
see Dr. Jones anymore,'' do you think Ozzie is going to stand there and 
say, ``Hey, Mom, tough.''
  Ozzie is going to reach in his pocket, like all the Ozzies in this 
Chamber, and say, ``Don't worry, mom. Even though I can't pay my taxes, 
even though I can't get my kid to school, I am going to increase my 
taxes, in effect, 800 bucks to pay for you and 800 bucks to pay for dad 
because I know your median income is about $18,000, so I will take care 
of it for you.''
  This is a tax increase for middle-class people who care about their 
parents.
  And wait until we get to Medicaid, when Ozzie and Harriet get the 
phone call midyear and mom says, ``Hon, they tell me I got to come 
home; it's June. I gotta come home from the nursing home.'' Watch what 
happens then to decent, honorable, middle-class people who are being 
crunched on the one hand by their children with the cost of a college 
education and the cost of maintaining their standard of living, which 
is slipping from them, and on the other hand, having to pick up the 
costs for mom and dad.
  The last point I would like to make is one of the reasons to send 
this bill back, and that is, fraud, although Senator Roth did much 
better than our House Members did. Everyone acknowledges there is about 
$34 billion a year in fraud in Medicare and Medicaid. This bill hardly 
touches the problem. This is the case, I might add, because health care 
providers do not like us dealing with fraud.
  I have been working to combat health care fraud for over 3 years 
now--ever since I first introduced a health care fraud bill in the U.S. 
Senate and held hearings on health care fraud in the Senate Judiciary 
Committee.
  I found in those hearings--and it has been reported elsewhere ever 
since--that fraud in the entire health care sector accounts for up to 
10 percent of all health care spending.
  The same, unfortunately, is true for Medicare.
  The General Accounting Office estimates that fraud in the Medicare 
Program will total up to $18 billion this year alone. Medicaid fraud is 
another $16 billion.
  Now, the vast majority of doctors and other health care providers are 
honest professionals. But, a few dishonest manipulators are ripping off 
the taxpayers and threatening the integrity of Medicare and Medicaid. A 
few cynical criminals are preying on those who need health care the 
most.
  Going after these crooks and thieves who are defrauding the system 
must be our top priority. If this motion to commit is adopted--and I 
hope it will be--the first place we should try to find savings is in 
Medicare fraud.
  Later in the debate, Mr. President, I will be joining Senator Harkin 
and Senator Graham in offering an amendment specifically on Medicare 
fraud--and I hope my colleagues will support that as well.
  According to one estimate, for every dollar we spend fighting 
Medicare fraud, we save $10. One example of this: 

[[Page S15629]]

in 1994, in the Middle District of Pennsylvania, the Justice Department 
recovered almost $7 million in fraudulent Medicare and Medicaid 
payments--more than what it cost to run the entire Justice Department 
office in that district.
  This is an excellent return on our investment. So, before we raise 
costs to senior citizens--before we impose draconian cuts on benefits--
we need to root the robbers out of Medicare.
  Let me say up again that the Senate bill is much better than the 
House bill on this front. The House bill would make it much more 
difficult to prosecute health care fraud.
  The House bill would change the standard of proof in a civil fraud 
case from ``knows or should know'' to ``deliberate ignorance'' or 
``reckless disregard.''
  The House bill would change the standard for enforcing the Federal 
antikickback laws. The current standard prohibits kickbacks when one of 
the purposes is ``to induce'' referrals. But, the House bill would 
prohibit kickbacks only ``for the significant purpose of inducing 
referrals.''
  Fortunately, these provisions are not in the Senate bill. But, let me 
mention one thing about the Senate bill that troubles me from the fraud 
perspective.
  The Senate bill would repeal all Federal safety protections for 
seniors in nursing homes. Last week, in Delaware, I held a forum on 
Medicare fraud. At that forum, Federal prosecutors said that 
elimination of nursing home standards would create a significant 
problem in both the investigation and prosecution of patient abuse.
  In addition, Mr. President, I believe the antifraud provisions in the 
Senate bill could be--and should be--stronger.
  We need to guarantee that there will be funding to fight fraud--so 
that there are more investigators and prosecutors in the field to go 
after the crooks.
  We should collect the costs of our investigations from those who are 
found guilty. And, we should require the guilty to pay restitution to 
the victims.
  We need to strengthen the penalties for those found guilty of health 
care fraud--including increased fines for those who violate the 
antikickback laws.
  And, we should provide rewards for consumers and patients who uncover 
fraud.
  So, Mr. President, I hope my colleagues will support the motion to 
commit--so that fraud can be made the top priority in achieving Senate 
savings. And, I hope my colleagues will later adopt the Harkin-Graham-
Biden antifraud amendment.
  Now is not the time to make it easier for the crooks and con artists 
to get away with ripping off the American taxpayer. Instead, we need to 
renew and strengthen our efforts to fight Medicare fraud.
  The PRESIDING OFFICER. The 3 minutes have expired.
  Mr. BIDEN. I yield my time. Fraud is a problem. This bill does not 
address it.
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. I yield 1\1/2\ minutes to the Senator from 
Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I have been in the Chamber for 5 hours, 
and what we have not heard from the other side is the justification for 
a $245 billion tax cut for the wealthiest individuals, the wealthiest 
corporations and an increase in the taxes on the working families.
  The challenge of the Rockefeller amendment is to join with us, 
Republicans and Democrats alike, put aside the tax cuts for the 
wealthy, put aside the tax breaks for the large corporations, put aside 
the tax increase on the working families, and join with us in taking 
the recommendations of the trustees' report for $89 billion, work with 
us for a program that will mean no increase in premiums, no increase in 
copays, no increase in deductibles, not lifting the age eligibility 
issue and assuring the senior citizens of a meaningful choice.
  We can do that. We should do it. That is the challenge. That 
effectively is the challenge of the Rockefeller amendment, and I hope 
it will be accepted.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. Mr. President, as I said at the beginning of this 
debate, all of this comes out of the Contract With America. All of the 
$270 billion cut in Medicare comes out of the desire to find the tax 
breaks for wealthy families and corporations.
  When you are looking for that kind of money in the budget that we now 
have, you cannot look to the military. You cannot look to education. 
You have to look to the places where the money is. That is in Medicare, 
that is in Medicaid, to some degree in the earned income tax credit 
and, of course, to some degree in welfare.
  So the Republicans have pounced upon Medicare, and they have decided 
not to solve the Medicare problem but to bury Medicare with the idea of 
making absolutely certain that they could get the most amount of money 
from Medicare for the purposes of their tax breaks for the wealthy that 
they possibly could.
  This vote is about nothing else than that. If it is simply a matter 
of trying to solve the Medicare problem, then the Democratic solution 
in this amendment, which I hope people will support, is the answer: $89 
billion will do it. If it is tax breaks for the wealthy, and that is 
what you are after, then you will want to vote against this amendment 
because that is not what we on this side are trying to do.
  I hope my colleagues will understand the genesis and the nature of 
what this whole argument has been about from the very beginning.
  This is a historic vote. It is a defining moment. It is an extremely 
dangerous moment for the seniors of our country.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Parliamentary inquiry.
  What is the time situation?
  The PRESIDING OFFICER. The Senator from New Mexico has just under 8 
minutes remaining. The Senator from West Virginia has 28 seconds 
remaining.
  Mr. DOMENICI. Mr. President, I yield myself 7 minutes of that.
  Mr. President, there is no question this is a defining moment. It is 
a defining moment because today and tomorrow we are going to decide 
whether we want to have a Medicare program for the senior citizens of 
the United States or whether we want, under this amendment, to protect 
one little part of it for a couple of years.
  Which do the seniors really want? Do they want a Democratic proposal 
which essentially ignores more than half of the Medicare program, does 
not even talk about it? It is in big trouble. And then it says we are 
only going to reform the hospital program sufficiently to keep that 
fund solvent for how many years, I ask Dr. Frist?
  Mr. FRIST. Two additional years.
  Mr. DOMENICI. Two additional years, two additional years.
  Now, for all the talk on that side of the aisle, the truth of the 
matter is, they do not really care about senior citizens. They would 
rather win this fight than protect the senior citizens. They are 
crisscrossing America and using the airwaves to frighten them to death. 
And what is their proposal? Their proposal is to extend the trust fund 
2 years.
  Now, let me suggest, nobody should believe with that dose of reality 
that this is anything more than a political exercise. It has little or 
nothing to do with American senior citizens. It has to do with trying 
to win at the ballot box. And let me say to the seniors, once we have 
resolved this issue, you will find the reality and you will not be 
duped by the debates of today. Rather, you will be convinced by the 
reality of tomorrow, which means we are going to have a Medicare system 
that is solvent, that we can afford, and that our young people who are 
helping pay for it can be proud of.
  Now, there is no question that once again it is proven that the other 
side of the aisle, the Democrats, would rather tax and spend than to 
reduce expenditures and cut the American people's 

[[Page S15630]]

taxes. For what else is this? If there are no tax cuts in this bill, 
part A of Medicare goes broke. Take them off the table and it goes 
broke. That is not this Senator speaking. That is the trustees, four of 
whom work for the President. Forget the tax cut, it goes broke. So what 
are they talking about? They are talking about a political issue, not 
the reality of what we as leaders must do.
  Frankly, there is no question that the trustees talked to us about 
both parts of Medicare. Seniors, you understand very few of you go to 
hospitals every year, but a lot of you go to see your doctors. The 
hospital coverage is the part that will be protected for 2 additional 
years, but the rest of the program will be, according to the Democratic 
version, will be left in the doldrums.
  The trustees told us both part A and part B are in serious, serious 
trouble. And we have explained to everyone, we do not have to change 
things a lot to make this a far better program for the future and give 
seniors a choice rather than have them rattled by the bureaucracy and 
paperwork that frustrates them more than the doctors that serve them.
  If you have ever heard a senior complain, they say, ``Why do we have 
to fill out all these papers? We don't even understand them. We are 
getting defrauded. We can never find out what it costs.'' That will all 
change once we defeat this amendment today and move on with the 
Republican agenda.
  Let me make one last remark. We used to hear that it was the House 
plan that was going to give all these tax cuts to the rich. And we used 
to come down here and say, ``What plan are you talking about?'' They 
would say, ``The House plan.'' They cannot talk about it anymore 
because right here before us is the Senate plan. And the Senate plan 
does not cut taxes for the rich as described on the floor of the Senate 
by the distinguished Democratic Senators. Let me say, once and for all, 
90 percent of the tax cut in this bill--not 60 percent, not 50 
percent--90 percent will go to Americans with $100,000 in income or 
less. And that is not Domenici, that is the Joint Tax Committee--90 
percent.
  Now, they can get up and hypothetically say we are giving the rich 
back tax cuts. Ninety percent go to $100,000 earners and less. Are 
those the rich people of America or are those the people with families 
that need some help in raising their children? That is what this Senate 
bill is about. We have decided that our families raising children ought 
to get a better economic break because years ago we used to give them a 
break. We took it away.
  In fact, I would close by saying a piece of this tax bill goes to 
correct what the Democrats did last time. They raised the marital 
deduction. They made it cheaper to be unmarried than married with the 
same income, another enticement not to get married, not to stay 
together and raise your kids because you get a break if you do not.
  We have fixed that in this bill. Is that helping rich people of 
America or is that helping thousands of Americans that would like the 
benefit of not being treated inferior because they happen to file 
jointly as husband and wife?
  It seems to me we are on the right side of these issues. And all we 
are going to hear is political rhetoric, half-truths. And by the time 
we are finished, and this program is implemented, I suggest it will be 
those prophets of gloom who predict what is unpredictable--because it 
will not happen--they will be the ones to suffer, not the Senators on 
this side who are going to stand up and be counted today.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. DASCHLE addressed the Chair.
  The PRESIDING OFFICER. The minority leader.
  Mr. DASCHLE. Mr. President, I will use leader time to accommodate my 
remarks.
  Mr. President, I was told that the previous speaker just has 
indicated that it is his view that Democrats do not care about senior 
citizens. If that is what he said, I am very disappointed. He knows 
better than that. In fact, the issues in this debate are about finding 
the best approach for senior citizens, and finding a way to ensure that 
the commitment we made three decades ago will remain for as many 
decades as this country exists. These are the issues.
  I think it is all too convenient--all too convenient--that at the 
very time our Republican colleagues propose a $245 billion tax cut, it 
just so happens they also propose to cut Medicare $270 billion.
  I know there are some who say it is sheer coincidence. I know there 
are some who say we could come up with the tax cut or the tax break 
revenue in other ways. But I also know that there are not many pools 
out there that are big enough to accommodate a tax cut, a tax break of 
that size. This is the biggest rollback in health benefits to senior 
citizens in American history. This is the biggest financial transfer 
from low- and middle-income families to the upper-income brackets in 
American history. So no one should be misled. This will be the most 
important vote we will cast during the budget debate.
  So, Mr. President it is with a great deal of concern, grave concern, 
that we offer this amendment this afternoon. There is no question about 
what this proposal in the reconciliation package means for senior 
citizens. I do not think there is any doubt. Any analytical report will 
show that this proposal will cause senior couples to pay more than 
$2,800 more in Medicare premiums and deductibles.
  We know it will double premiums. We know it will double deductibles. 
We know it will increase the age of Medicare eligibility from 65 to 67. 
We know that it eliminates protections for seniors by providing doctors 
and managed care plans with opportunities to charge seniors more than a 
Medicare-approved rate. We know all of that. There is no doubt about 
it. No dispute.
  No one should be misled. This proposal is going to hurt. And if it 
were in some way designed to really reform Medicare, and to bring the 
trust fund into solvency in ways beyond what the Democrats have 
offered, I could understand it. If we were in a position where it was 
this plan or bankruptcy, I could see that we might have to suck it in 
and do it.
  But we know with certainty that is not the case. The actuaries and 
the trustees have told us that we need $89 billion to keep the trust 
fund solvent into the year 2006. Not a penny more. In an analysis of 
the House plan to cut $270 billion, the actuaries also indicated a 
solvency date in 2006. Where does the extra money go?
  Again, no one should be misled. This is not a question about 
solvency. It is a question about where we go for revenue to pay for the 
tax cut that we have been debating now for several months.
  Let me just say, Mr. President, the damage done under this plan 
reaches beyond seniors. The problem with the health care provisions in 
the reconciliation package is that 9 million people in rural America 
could find their clinics closed when they need health care in the 
future. Under these proposals, we know the hurt will be widespread.
  We know that in South Dakota 10 to 15 rural hospitals would likely 
close.
  We know that these proposals will undermine health care provided in 
rural America.
  We know that huge cuts to teaching hospitals will decimate medical 
research and training programs.
  We know that up to $100 billion is going to be cost-shifted on to 
those with insurance in the private sector, according to the Lewin-VHI 
study.
  We know all of these things, and more. So this is not just an issue 
for senior citizens. This is an issue affecting rural America, and 
every single person with private insurance in the country.
  And so, Mr. President, I just hope before we cast this vote that no 
one misunderstands our choices. If we choose to protect the trust fund 
by ensuring its solvency, to recognize the importance of this issue to 
senior citizens and their families, to say no to tax breaks in areas 
where they are not necessary, and to say no to tax breaks to the 
wealthy, then the choice is very clear. Democrats have presented an 
alternative that makes sense, that ensures solvency, that assures, in 
the long term, senior citizens are going to continue to get the best 
care that we could possibly provide and that protects a commitment that 
is now more than 30 years old. We owe them that. We ought to adopt this 
amendment.
  I yield the floor.

[[Page S15631]]

  The PRESIDING OFFICER. Who yields time?
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Parliamentary inquiry, Mr. President. How much time 
remains and who has time?
  The PRESIDING OFFICER. Fifty-seven seconds to the Senator from New 
Mexico; 28 seconds to the Senator from West Virginia.
  Mr. DOMENICI. Does the Senator from West Virginia want to save his 28 
seconds?
  Mr. ROCKEFELLER. I yield back my time.
  Mr. DOMENICI. Mr. President, I just want to finish wrapping up. There 
is a suggestion when we talk about how much is being reformed, how many 
dollars are going to be saved, nobody talks about how much we are going 
to spend. The senior citizens ought to know we are really not intent on 
denying them money for health care. In fact, over 7 years on Medicare 
alone, we will spend $1.65 trillion. In the seventh year, we will spend 
$104 billion more than in the year it starts. It will go up to $104 
billion more, a total of $1.65 trillion, which we cannot hardly 
understand.
  With that, I yield back any time I might have and yield the floor.
  The PRESIDING OFFICER. The time of the Senator from New Mexico has 
expired.
  Mr. BROWN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Colorado.


     Amendment No. 2949 to the Instructions of the Motion to Commit

  Mr. BROWN. Mr. President, I rise to offer an amendment and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Colorado [Mr. Brown] proposes an amendment 
     numbered 2949 to the instructions to the motion to commit S. 
     1357 to the Finance Committee.
       Strike all after ``Finance'' and insert the following: 
     ``With instructions to report the bill back to the Senate 
     forthwith to include the findings of the Trustees of the 
     Federal Insurance Trust Fund that, in order to save Medicare 
     and to keep the Hospital Insurance Trust Fund solvent for 
     future generations, Congress must address both the long-term 
     and short-term shortfalls in the Medicare program.''

  Mr. BROWN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. BROWN. Mr. President, the underlying amendment that is before the 
body suggests that this measure be returned to the committee and deal 
only with the amount of money that would need to keep the fund from 
going bankrupt or being insolvent through the year 2006.
  That figure is based on their intermediate projections. I as one am 
familiar, as I think most Members are familiar, with our process. We do 
a conservative projection. We do an optimistic projection. We do an 
intermediate projection. I might remind Members that in Social Security 
projections, for most of the years we have had those Social Security 
projections, the optimistic projection has not proved to be correct. As 
a matter of fact, the intermediate projection has not proved to be 
correct. As a matter of fact, the conservative projection has not 
proved to be correct. Through most of the years we have had those 
Social Security projections, as a matter of fact, even the conservative 
one proved to be far too optimistic.
  None of us have a crystal ball, but I think it would be foolish in 
the first order for us to assume that the $89 billion is going to be 
enough to keep this fund solvent through the year 2006. If history is 
to be the judge in looking at the projections we have had, it is quite 
clear that we may well see this fund go insolvent if the underlying 
amendment is adopted.
  I think men and women of honesty and fortitude who have discussed 
this issue today can honestly disagree about the projections. It could 
be the intermediate projection is just fine. It could be that the 
conservative projection is far too optimistic, as history as has shown. 
But one thing I do know and one thing is incontrovertible. If you read 
the report of the trustees--and let me remind the Members, the trustees 
are appointed by the President of the United States and all but one of 
them are Democrats; that is, of the seven trustees, all seven have been 
appointed by the President and all but one of them are Democrats--they 
say in their report that after the 10 years that is contemplated in the 
underlying amendment that this fund goes belly up, even if you do the 
$89 billion with the intermediate projections.
  They say, in the long run, it does not meet the 7-year solvency test 
and they say, moreover, it becomes much, much more difficult to meet 
it, as you have the baby boomers coming in after this 2006 period.
  So the suggestion in the underlying amendment is that you should deal 
only with the current crisis and close your eyes to the real insolvency 
that is coming in Medicare. I believe Americans deserve better. 
Frankly, Mr. President, I think Americans expect better. If you go out 
to the working men and women of this country and you tell them that we 
are going to come up with a program that will let you pay taxes for 
another 10 years, but at the end of 10 years, according to our 
intermediate projections, there will not be anything left for you to 
collect on, I think they would be outraged.
  Frankly, I think they deserve to be outraged. The proposal that is 
before the body says, ``Let us slip by for now, make working people pay 
another 10 years and then have nothing for them when we get to the end 
of 2006.''
  That is not Hank Brown projecting with regard to the Medicare trust 
fund. That is not a group of Republicans projecting. That is a report 
by Presidential appointees themselves, six of the seven who are 
Democrats, all appointed by the President of the United States. That is 
not a Republican projection; that, if you want one, is a Democratic 
projection.
  I think we need to do better than that. I think we need to say to the 
working men and women of this country, ``We're not only going to take 
your money for the next 10 years,'' which the current law does, ``but 
we're going to make sure there is something there for you when we 
finish.''
  That is what this amendment does. This amendment makes it quite clear 
that what we are to look at is not just the short term, but the long 
term as well. I believe that is a proper focus. I believe it meets our 
commitment.
  We have a choice with this amendment. We can go with the short-term 
outlook that leaves the fund insolvent after 10 years, or we can go 
with the long-term outlook that requires that this end up being solvent 
in the long run as well.
  Mr. President, I suppose one of the saddest things to see, with 
respect to Federal programs which we have put in place for working men 
and women, where they rely on the Federal Government themselves, is the 
Government being in a position where we cannot meet our 
obligations. This is by a Federal Government that, through ERISA, has 
come forward and said, with regard to private pension plans, that you 
are required to make them financially sound, and we put in place very 
tough rules on the private sector that forces them to fund them, with 
extreme penalties on anyone who would not.

  I do not think anyone would fail to be uncomfortable with the 
proposition that says in the private sector we are going to mandate 
these to be actuarially sound, but in the public sector, trust us. Why 
would people not want to trust us? For exactly the reason for the 
underlying amendment. The amendment says we will fix it in the short 
term and leave a problem for the long term. That is the difference in 
the private sector. What we have done is impose on them burdens to be 
sound, to fund their obligations, and to face up to them. And in the 
public sector what we have done with the underlying amendment is say we 
are only going to fix it up and get by, and at the end of 10 years, 
after taking your money, there will not be a balance left there to help 
you meet your obligations.
  I believe we have to do better. We have had a lot of people quoted 
here. Let me quote the President's nominees on this board. These are 
the conclusions of the board of trustees:

       Under the trustees' intermediate assumptions--

  My own view is that the assumptions are far too optimistic.

       Under the trustees' intermediate assumptions, the present 
     financing schedule for the HI program is sufficient to ensure 
     the payment of benefits only over the next 7 years. 

[[Page S15632]]

      As a result, the HI trust fund does not meet the trustees' 
     short-range test of financial adequacy. Under the high-cost 
     alternative, the fund is projected to be exhausted in the 
     year 2001, approximately 6 years from present. Under the low-
     cost alternative, the conservative one, the trust fund is 
     projected to be exhausted in the year 2006. Currently, about 
     four covered workers support each HI enrollee. This ratio 
     will begin to decline very rapidly in the next century. By 
     the middle of that century, only about two covered workers 
     will support each enrollee.

  Let me pause here, Mr. President. I want to reiterate that because it 
underlines the problem we have and the reason we should address it. 
``By the middle of the next century''--quoting the Democratic majority 
on the board--``only about two covered workers will support each 
enrollee.''
  Mr. President, that is our problem and that is what needs to be 
addressed long term.
  Mr. GREGG. Will the Senator yield for a question?
  Mr. BROWN. Yes.
  Mr. GREGG. I think the Senator highlighted a critical point, which 
was not made by the Senator or by anybody on our side, but made by the 
trustees of the hospital insurance trust fund, three of whom are 
members of this administration--Secretary Rubin, Secretary Shalala, and 
Secretary Reich--which is that the trust fund is headed toward 
insolvency, and that in order to correct the insolvency, there would 
have to be a significant adjustment in the trust fund, either in the 
way of revenue or benefit costs.
  I would like to ask the Senator from Colorado if he noted also on 
page 27 that they put a number on what that adjustment would have to 
be. Their number, as I read it, is .65 percentage adjustment in payroll 
rates for employees and employers, which translates into $387 billion 
of adjustment which must occur over a 7-year period. This is the 
trustees speaking, saying an adjustment must occur over a 7-year period 
in order to get actuarial solvency, under their intermediate 
assumptions--which you say are rather rosy--for a 25-year period, which 
they consider to be a short time. They would rather it be for 75 years. 
That means when the other side comes forward with a proposal that only 
does $89 billion, they are missing the mark, according to their own 
trustees, by somewhere in the vicinity of $300 billion. Is that not 
correct?
  Mr. BROWN. Let me say to the distinguished Senator that I believe his 
analysis is correct. It points out the enormous problem we have here. 
We will have an absolutely catastrophic impact if we do not address it 
now. The longer we wait, the more difficult the problem gets. I am 
reminded by staff that we need to make it clear in this amendment that 
we are exempting part B of the Medicare.


                    Amendment No. 2949, As Modified

  Mr. BROWN. Mr. President, I send to the desk a modification of my 
amendment that clarifies that aspect.
  The PRESIDING OFFICER. The Senator has that right.
  The amendment is so modified.
  The amendment (No. 2949), as modified, is as follows:

       I modify the text of my amendment to read as follows: 
     ``with instructions to report the bill back to the Senate 
     forthwith providing that all savings to Part B of Medicare 
     made by the Balanced Budget Reconciliation Act of 1995 shall 
     be transferred from the general fund of the Treasury to the 
     Federal Hospital Insurance Trust Fund; to include the 
     findings of the trustees of the Federal Insurance Trust Fund 
     that, in order to save Medicare and to keep the Hospital 
     Insurance Trust Fund solvent for future generations, Congress 
     must address both the long-term and short-term shortfalls in 
     the Medicare program.''

  Mr. BROWN. Mr. President, I want to continue, if I may, to make 
available in the Record the exact words of the board of trustees. I 
think they have credibility not only because this is a contentious 
issue between parties and they happen to be--six of them--Democratic 
members, all appointed by the President. I think that renders at 
least--even though they are partisan in their majority, it brings 
certain credibility to these deliberations. Frankly, I think that for 
most Americans looking at this, that is the first question they will 
have about this aspect of it.
  Continuing on with this:

       Not only are the anticipated reserves and financing of the 
     HI program inadequate to offset the demographic change, but 
     under all sets of assumptions, the trust fund is projected to 
     become exhausted even before the major demographic shift 
     begins to occur.

  What we are talking about here, Mr. President, is before you have 
that adjustment from four workers down to two workers supporting the 
persons who receive the benefits--even before that demographic change 
begins, you have problems with the solvency of the fund. The trustees 
go on:

       The trustees note that some steps have been taken to reduce 
     the rate of growth in payments to hospitals, including the 
     implementation of prospective payment systems for most 
     hospitals, and experience to date suggests that this 
     mechanism, together with provisions enacted by Congress, has 
     restrained the growth in hospital payments that improve the 
     efficiency of the hospital industry.

  In their overview, they continue on, and I think this is more 
significant for our purposes:

       Extension of this payment system to other providers of 
     hospital insurance services in further legislation limits 
     payment increases to all hospital insurance providers, could 
     postpone the depletion of the HI trust fund for about another 
     5 to 10 years. Much more substantial steps would be required, 
     however, to prevent trust fund depletion beyond 2010 when the 
     baby boom generation begins to reach age 65.

  Mr. President, that is the nub of it. The trustees have put their 
finger on it. They hit it exactly. You can do a quick fix for 5, 10 
years. That is, apparently, what is behind the thinking of the 
underlying amendment. But in the Democratic trustees' own words:

       Much more substantial steps would be required, however, to 
     prevent trust fund depletion beyond 2010 when the baby boom 
     generation begins to reach age 65. Under present law, as 
     shown by the projections in this report, the Hospital 
     Insurance program costs are expected to far exceed revenues 
     over the 75 year long-range period under any reasonable set 
     of assumptions.

  Under any reasonable set of assumption, Mr. President. As a result, 
the hospital insurance program is severely out of financial balance, 
and the trustees believe that the Congress must take timely action to 
establish long-term financial stability for the program.
  The President's own nominees are admonishing Congress to take timely 
action to establish long-term financial stability.
  I have listened on this floor to Members stand up and say, ``Heavens, 
we do not need to take long-term timely action. No, that is not what 
the trustees said.'' Mr. President, it is in their report. It is in 
black and white. It is on page 4.

       The cost to the hospital insurance program is projected to 
     increase over 1.6 percent of gross domestic product in 
     calendar year 1994, to 4.4 percent of GDP in the year 2065. 
     This rapid growth is attributable primarily to anticipated 
     increases in hospital admissions and in the complexity of the 
     services provided, together with expected changes in 
     demographics.
       With the magnitude of the projected actuary deficit in the 
     hospital insurance program and the high probability that the 
     hospital insurance trust fund will be exhausted in less than 
     10 years, the trustees urge the Congress to take additional 
     actions designed to control hospital insurance program costs 
     and to address the projected financial imbalance in both the 
     short range and the long range through specific program 
     legislation. As part of a broad-based health care reform, the 
     trustees believe that prompt, effective, and decisive action 
     is necessary.

  Mr. President, how much more clearly can it be said? The President's 
own nominees, six of the seven of them Democrats, say it as clearly as 
is humanly possible: You have to take prompt, effective, and decisive 
action.
  What is before the Senate is a suggestion we take a short-term view, 
that we patch it up for 10 years and leave people who paid in all their 
life without any coverage. That is not responsible. It does not conform 
with the guidelines set forth by the President's own nominees.
  They go on:

       To facilitate this effort, the trustees further recommend 
     legislation to establish an advisory council for the Medicare 
     program. This action would help provide critical information 
     that will be needed by the administration and Congress as 
     they deliberate the future of the hospital insurance program.

  Let me pause and simply mention this: The Republican leader himself 
asked the President--he was joined by the Speaker of the House--asked 
the President to help set up a commission to work this through, as it 
was done in Social Security, to come up with an answer in this area 
that was bipartisan, that would lend integrity to the commitments we 
have made to the men and women of this country who 

[[Page S15633]]

have paid into this program--some of them for almost all of their 
lives.
  The President was unwilling to cooperate in that venture in a timely 
manner to get an alternative before Congress.
  Now, Mr. President, the reality is this: This should be a bipartisan 
effort. I do not believe that my Democratic colleagues want this fund 
to go bankrupt in the long run. The American public is wise enough to 
know that many of the things each party says about the other are 
somewhat taken with the heat of the moment and not necessarily meant 
seriously.
  I do not believe Democrats, any more than Republicans, want this 
program to go belly up. I believe the vast majority of Americans, 
whether Democrats or Republicans, would be shocked to know that this 
program will be out of funds in 10 years and we would not have taken 
care of it.
  I do not think anybody--Democrat, Republican, or independent--feels 
that is responsible. I honestly believe that the people of this country 
expect us to come up with the long-term answer. That is why this 
amendment is offered. It talks about looking at the long run, not just 
the short run.
  Mr. President, that is the essence of what this debate is all about. 
Members will have an option. They can vote ``no'' on this amendment and 
opt for a short-term solution only; or they can vote ``yes'' on this 
and help ensure that a long-term solution is in sight.
  Mr. President, let me add a word of warning. The amounts of money in 
this bill are estimated to be adequate with other changes that would be 
made in the long run to help put us on sound footing and make it 
actuarily sound.
  Mr. President, I must say, my own belief is that this does not go far 
enough. My own belief is that we should not be looking at the immediate 
projection. My own belief is we should do much more than what is 
suggested in this bill.
  While we accept the immediate funds, and some would say what we need 
to do is have an $89 billion fix and others would say a fix in excess 
of $270 billion, my own estimate is that the problem is much greater 
than that; that the projections are far too optimistic.
  If we are to be responsible, we should not only do what is in this 
bill, we should set about seriously in an effort to make sure that we 
have solved the problem for all time, that we have adopted the 
actuarial soundness principles that we impose on the private sector. We 
ought to be willing to stand up and do as this Congress does--begin to 
live by the same laws that we impose on others.
  Mr. President, I reserve the remainder of my time.
  The PRESIDING OFFICER (Mr. Thompson). The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I yield myself such time as I might 
consume.
  Mr. President, no one is going to be fooled by this amendment. Our 
Republican friends are scared of this vote. They do not want this vote 
to happen. It is Halloween and they are running scared. It is clear the 
people who are running scared are the Republicans trying to cut the 
Medicare.
  No one is fooled by this Halloween trick. The American people know 
what is at stake. Medicare is at stake and Democrats are trying to save 
it.
  Now, Mr. President, I have been on the floor since the first hours, 
about 10:30 this morning, when we began that debate. I have listened 
hour after hour after hour after hour how our Republican friends 
justify the measure before the U.S. Senate. They talked about the 
different proposals of it. Why it was fair, why it was just, why it was 
equitable, how it was going to enhance health care for our senior 
citizens.
  That is what they have talked about. They would not talk about the 
$240 billion tax cut for the wealthiest individuals, for the 
corporations, the tax increases on working families, the fact that they 
are raising the eligibility age from 65 to 67, the pressures that will 
be on the senior citizens in reducing their options to be able to 
choose their own doctors.
  No, they did not address those particular issues. They did not 
address those particular issues. They said what we have here makes 
sense. It makes sense for those who are interested in the balanced 
budget. It makes sense for those who are interested in quality health 
care.
  Now, our Republican friends have come, on top of this amendment that 
was offered by the Senator from West Virginia, and effectively 
eliminated, emasculated in a way which would have, if it had been 
accepted, preserved what had been recommended by the trustees, the $89 
billion, and ensured there would be no increase in the copays and 
deductible premiums for our seniors.
  But, no, they would not give the Senate a chance to vote on that. 
Instead, they are here saying, instead of your amendment, why not just 
have a study about the medium- and long-term interests of the Medicare 
system.
  We are all for it. Why did you not do it when you had a chance? You 
had the votes to do it. Why did you not do that earlier? You could have 
reported out some kind of measure in the meantime, but you did not do 
it.
  All Members are concerned about what is going to happen after 10 
years of solvency for the Medicare system. Many of us believed that 
what you are concerned about and have offered recommendations and 
suggestions, when you recognize that there is nothing in this 
legislation that is going to do anything about providing preventive 
health care for our senior citizens. I am interested in that. What 
about the 30 percent of overutilization in our hospitals because of 
Medicare entries into the hospitals? I am interested in that.
  What are we doing to expand long-term care? Or home care for our 
seniors? I am interested in that. What are we doing about prescription 
drugs so we can keep people out of the hospital and treat people in 
their homes and save billions of dollars? I am interested in that. Many 
of us are interested in that.
  None of those issues was addressed by our Republican friends. No, 
none of those issues that would have had an impact on the medium- and 
long-term health care needs, none of those issues was addressed.
  But, instead, after 5 hours of debate and justification of their own 
position, they refused--absolutely refused--the effort of many of us 
who want to try to protect Medicare, who want to defend Medicare. If 
they are so correct, as we have been listening to them say for 5 hours, 
why will they not let us vote? Why will they not go and make the 
speeches they have been making here on the floor of the U.S. Senate, 
back into the nursing homes, back in the senior citizens homes, back in 
the plants and factories, and to the elderly people all over this 
country, if they believe that they are so right about it? If they think 
the merits are on their side, why do they take this and defend it for 5 
hours and then say, ``But we will not defend it any longer. We will not 
defend it anymore. We will not defend it at all. We are going to try 
and emasculate what you are trying to do with regard to the protection 
of Medicare.''
  You do not have to be around here a long time to understand what this 
is all about. You only have to be around here about 2 or 3 months to 
know exactly what it is about, and that is you do not want to vote on 
it. You do not want to know about it.
  You came up with this proposal without a hearing on the Medicare 
cuts. You refuse to listen to the elderly people about the impact it 
was going to have on them. You jam this through the Finance Committee 
and the Budget Committee. And you say that it is justified to provide 
$240 billion to the wealthy individuals and corporations and increase 
the taxes for working families.
  You have done all that. You have it going your way, Senators. We have 
a time limitation, restriction in terms of being able to take some days 
and provide some debate on this so the country can know what it is all 
about. You have it going all your way. You can try to jam us because 
you have the votes that way.
  But, no, you refuse to even let us have a vote on accountability. 
Come on. Come on. Your program did not make any sense before and you 
are now demonstrating here on the floor of the U.S. Senate it does not 
make any sense to you either, because you refuse to defend it. You 
refuse to defend it.
  We listened to all those speeches about how correct you were. Why 
will you not let us have a vote on it? No. No, we are, instead, going 
to have a 

[[Page S15634]]

vote on something else, a long-term study on it. We are interested in 
long-term studies. We are interested in intermediate studies. What you 
do not want to face is your $245 billion tax cut that is coming out of 
the Medicare premiums, deductibles and copays for the seniors of the 
country--you do not, and refuse to let us have a vote on it.
  Why? Why is it? Why have the Republicans not spoken about that? Why 
did you not at least say, ``OK, we have addressed the short term and 
medium term of the Medicare. Now we think it is right to get a tax cut 
for the wealthiest individuals and we are proud to defend that 
position.'' I have not heard that. I have not heard that speech. I do 
not think we are going to hear it because it is indefensible, when you 
are looking at what they are attempting to do, and that is to undermine 
the Medicare system which has been a compact with the seniors of this 
country since 1965.
  You know, when I look at the conduct of our colleagues and friends I 
can kind of understand why they do not want to vote on it. I was here 
in 1964 when the Medicare amendment was defeated. I was here 8 months 
later, in 1965, when it passed. I was here when 19 Members who voted 
``no'' in the fall of 1964 voted ``yes'' in April of 1965. Do you know 
what had intervened? An election. An election intervened. Our 
colleagues who were opposed to it then went back home and gave the same 
kinds of comments that were given, evidently, by the majority leader 
last night, according to Tom Harkin, saying the majority leader was 
proud to oppose Medicare when it first came up and is still proud to 
oppose it. Those were the speeches then.
  And then they got a little awakening because the seniors knew what 
was out there. The American people understood what was out there. Not 
just the elderly, but their sons and daughters had a fundamental 
recognition that, when people grow older in our society, they have 
additional kinds of health care needs and, by and large, their incomes 
go down. That is what happens, not only industrial societies, but in 
other societies around the world. And, therefore, if we are going to be 
a compassionate Nation and care about our seniors--the men and women 
who fought in the wars, brought the country out of the Depression, 
sacrificed for their children, many of whom are sitting in the U.S. 
Senate--that there was going to be a compact. They were going to pay in 
and then they were going to be able to receive out.
  The Democratic alternative is not perfect, but it provides for the 
fundamental integrity of the Social Security system for 10 years. That 
has been testified to by the trustees themselves. But what we have not 
done is included the tax goodies for wealthy individuals.
  You ought to be ashamed of yourself. I am not surprised that you do 
not want to vote on this turkey. I can understand that. Refuse? I would 
certainly hope the leader would say, if we are not going to get the 
vote on this one, we are going to keep coming back and coming back and 
coming back, every single time that we have in the 10 hours left, and 
we are going to make every attempt to get a vote on it and let our 
Republican friends pull every kind of trick in the book on it and let 
us take that issue all across this country and let you defend it. You 
cannot defend it. You cannot defend it.
  You come up here and say, ``Let's get back to that trustees' report 
now. Let's see what is going to happen in 10, 15, 20 years down 
there.'' It is wonderful to hear all those voices now. We were 
attempting to deal with the medium- and long-term interests of this 
health care system in our country a year or so ago. It is wonderful 
suddenly to find they are all interested in this now, really interested 
in long-term care.
  Where are the initiatives in home care? Where is a single proposal 
from someone on the other side of the aisle on prescription drugs? That 
is a No. 1 problem for our seniors. Where is it? If you provide 
prescription drug assistance for our seniors you will probably do as 
much or more in terms of reducing long-term costs, because seniors will 
be able to stay home instead of going to the hospitals in order to get 
their prescription drugs. And that is going to be true in a wide 
variety of different areas. Sure we need some advice and counsel on 
those.
  What are we doing on home care, so we can give alternatives to our 
seniors whether they want to go into a nursing home or remain home and 
get some help and assistance? Where is the Senators' proposal on that? 
Where are these proposals on it, to demonstrate that suddenly we are 
interested in the long-term interests of our elderly people? Why do we 
not keep them out of high-cost facilities? Where are your proposals on 
that? Where are these proposals, that, suddenly we really care about 
these long-term interests?
  They are not there. They are not there because at the core of it, 
this program on Medicare has not been a program that you supported over 
its history, and the record shows it. Suddenly, to find out that you 
care about this after, in the House of Representatives, they used $80 
billion of part A for their tax program, and then a month later said, 
``Oh, my goodness, there is some difficulty in the insurance fund.'' 
And some said,
  ``Don't you think we ought to go back and restore the $80 billion?''
  ``Oh, no, we are going to need that for the tax cut, a tax cut which 
is even greater in the House of Representatives.''
  The reason we are debating this is they had no opportunity to do it 
in the House of Representatives--none, closed down. Here we have 1 
hour, and were thinking we were going to at least have a chance to get 
some kind of result, at least get a chance so we can speak on these 
issues, to try to work out, in the time that is available, a series of 
amendments which would be defining in terms of what this debate is all 
about.
  But we are even denied that opportunity, evidently. We are denied 
that opportunity on the first amendment out; denied the chance to have 
a rollcall vote on this issue.
  So, Mr. President, I would have suggested to the minority leader and 
to our friends, Senator Rockefeller and Senator Exon, that if they have 
that amendment and just use that as an add-on, as an add-on to this 
amendment, to have the language included. I had it here a moment ago. 
It is not the wording. Words can be worked out, that you send it back 
the way we suggested that it be sent back with a report for the $89 
billion, and then we also include, if you want, recommendations in 
terms of meeting long-term care.
  I do not understand why the Senator is so concerned about it, why 
that route would not be acceptable. But, oh, no, you cannot have it 
that way. We are not that concerned. We are not that concerned about 
medium and long term. But the Senator is hoping the whole thing will go 
down, that all of it will go down.
  Do not fool us. We know what is going on around here. I do not know 
if the American people do. I hope that they have been watching--at 
least today--this debate and discussion to try to find out who is 
attempting to defend the Medicare system, who believes in it, who, by 
history and tradition, is a party of defending it and supporting it. 
They will know because they sure will not know it on the first 
proposition in defense of the majority leader's legislation that is 
before us.
  So, Mr. President, everyone ought to have a very clear idea. I am 
sure the seniors do. There may be those around here who think they do 
not just because they are challenged with various physical illnesses 
and have difficulty sometimes in being able to hear all of the 
different words or read because their sight is facing difficulty, or 
unable to get around. They know when they are being fooled or when 
there is an attempt to be made a fool of. They can look through.
  If they take the time to read this debate over the time here today, 
they will know who is on their side. It is not those who have 
promulgated this amendment, but it is those who have said, take back 
the giveaways, take back those tax breaks to the wealthy individuals 
and corporations, take back that age restriction for an eligibility 
increase, take back those additional taxes on working families. And let 
us get something out here that will assure our seniors that there will 
not be increases in the copays and deductibles, and that they will have 
the choice of their doctors.
  We have asked to try to work that out together so we can have 
something 

[[Page S15635]]

that will deal with the economic challenges, but, most importantly, 
assure that our senior citizens are going to have their contract 
maintained with the American people and with the Congress.
  Mr. President, I see my friend from Minnesota. I am glad to divide up 
the time.
  How much time is on each side?
  The PRESIDING OFFICER. The Senator's side has 42 minutes and 45 
seconds, and the majority has 39 minutes and 34 seconds.
  Mr. WELLSTONE. Mr. President, I would be pleased to alternate, if my 
colleagues want to do that.
  Mr. COVERDELL. Mr. President, I yield 1 minute to the Senator from 
Colorado.
  Mr. BROWN. Mr. President, we have taken more time than the other 
side. I will try to be brief so the distinguished Senator from 
Minnesota can go ahead. I simply want to respond to the discussion with 
regard to taxes.
  My amendment does not deal with the tax portion. Mr. President, I am 
firmly committed to making sure the money in Medicare stays in 
Medicare, that none of it gets used for any other purposes. Frankly, 
that is what is in the bill.
  Let me suggest this. Sometimes people organize demonstrations and 
they make the signs in advance, and it turns out the signs do not have 
anything to do with what the reality is. That is what has happened 
here. They made up their signs about tax cuts for millionaires, and it 
turned out they no longer apply. What they have done is used the signs 
anyway.
  Mr. President, the biggest portion of this bill deals with the child 
tax credit, and it makes clear that higher income people do not get it. 
They not only do not get what everybody else gets, they do not get 
anything at all from the child tax credit. So the discussion about how 
you are somehow helping the millionaires out is quite misplaced, at 
least in this Member's view. What they have done basically is made up 
their signs in advance and have not been able to adjust them.
  Mr. WELLSTONE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Who yields time?
  Mr. KENNEDY. I yield 10 minutes.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, I really welcome this debate, and in 
the spirit of debate, colleagues, I say to my colleague from Colorado 
that the problem with the tax credit proposal is that it is not 
refundable and that if you are a family with an income under $29,000 a 
year, you are not going to receive it. It makes no sense whatsoever.
  Where is the standard of fairness? In my State of Minnesota, we are 
talking about a significant percentage of the population, families with 
incomes under $29,000 a year. If it is not a refundable credit, it does 
not do any good at all for that family.
  Mr. President, I just want to respond to a couple of comments by my 
colleague that were made earlier. And in the main, what I would like to 
speak to is this argument that somehow part of this debate is a scare 
tactic or this is an effort to ``terrorize senior citizens.''
  Mr. President, I think that, as a matter of fact, that is a bit 
insulting to senior citizens. It is a bit insulting to citizens in our 
country, period. People have their own wisdom.
  I was in a debate the other day with several of my colleagues at U.S. 
News and World Report. I said, forget all of this discussion about 
scare tactics. I wish we were talking about scare tactics so I would 
not use it. People have their own intelligence. People can figure this 
out for themselves.
  And, one more time, we have an amendment here that now is in the 
second degree. Why are my colleagues afraid to have an up-or-down vote 
on this? We had the debate. Now the rubber meets the road.
  We have been saying to you that $89 billion--which is what you needed 
for the trust fund--what you are doing is cutting $270 billion for 
Medicare.
  In addition, we have said, what is the meaning of $270 billion of 
cuts in Medicare juxtaposed with tax giveaways, in the main, and $245 
billion that goes to people with higher income?
  You can vote that up or down, colleagues. It is time now to match 
your votes with your rhetoric. Why are you afraid of an up-or-down 
vote?
  Mr. President, the only people that are terrorized here right now are 
some of my colleagues on the other side who are in terror that they 
might have to vote what they have said they believe all along.
  Mr. KENNEDY. Will the Senator yield?
  Mr. WELLSTONE. I am pleased to yield.
  Mr. KENNEDY. Will the Senator agree with me that if our friends on 
other side of the aisle are really interested in reforming Medicare, 
they would drop the tax cuts for the wealthy and large corporations, 
drop that, and let us see if we cannot find some way of trying to deal 
with this in a medium and long-term way?
  Does the Senator believe, and is it the Senator's view, if they were 
prepared to do that, that this particular proposal would be the 
difference?
  Mr. WELLSTONE. Mr. President, I would say to my colleague from 
Massachusetts his question is right on the mark, because what people 
are saying in Minnesota and around the country is, please permit us to 
be suspicious because you are cutting much more than is necessary for 
the trust fund, and we think you are making Medicare the piggyback for 
tax cuts for wealthy people. And if, in fact, you would give up on 
these tax giveaways--and we were not talking about the $245 billion--
then I think we can get down to a discussion where we can focus on what 
we need to do, I say to my colleague from Massachusetts, for real 
reform.
  Real reform, Mr. President, is universal coverage. Real reform is 
making sure that elderly people can afford prescription drug costs. 
Real reform is home-based care so that people can live at home in as 
near a normal circumstance as possible, with dignity, and not have to 
be institutionalized. Real reform is where there is a standard of 
fairness.
  I tell you what is not real reform--reverse reform, where we cut $270 
billion from Medicare and at the same time we have a $245 billion tax 
giveaway.
  I have been in debates with colleagues, and they have said, I say to 
my colleague from Massachusetts, over and over and over again, no, this 
is all for Medicare. This is what we need to do. This makes Medicare 
solvent. This reforms Medicare. This is for the good. This amendment 
puts them to the test. If that is the case, then vote against this 
amendment. Vote it up or down.
  I find it just unbelievable that after all the speeches that have 
been given and after all the reassurances that have been given, my 
colleagues are unwilling to vote on this. That is what the second-
degree amendment is all about. It is a huge dodge from a vote that 
people should have the courage to make.
  One more time, in my State of Minnesota, 50 percent of senior 
citizens have incomes under $20,000 a year. In my State of Minnesota, 
many of our elderly live in rural communities, and those hospitals and 
those clinics have a huge percentage of their patient payment from 
Medicare and they do not have a profit margin. If you go ask those 
providers--has anybody asked them? Anybody asked the clinics? Anybody 
asked the doctors? Anybody asked the nurses? Anybody asked the 
physician's assistants much less the beneficiaries? They will tell you 
that they cannot survive some of these reductions. They will not be 
there to deliver health care.
  So this is not about scare tactics, I say to my colleagues. This is 
about some unpleasant realities. And one more time, we have in our 
State 635,000 Medicare beneficiaries. It will be about 685,000, or 
675,000, I believe, by 2002. Later on, we will talk about medical 
assistance. We have 425,000 beneficiaries of medical assistance. It 
will go up to 535,000. And anybody who wants to look at the policy 
carefully and understand its impact on citizens understands that the 
way you view health care is you look at the number of people who are 
going to be eligible, what the existing benefits are that people will 
need to have for quality health care and what the medical inflation 
level is, and these reductions fall far short of that.
  I say to my colleagues, you just do not have the credible argument. 
You cannot cut $270 billion from Medicare at the same time you have 
$245 billion 

[[Page S15636]]

of tax giveaways, mainly going to wealthy people. You cannot do it. It 
makes no sense. And with this amendment, introduced by Senator 
Rockefeller, we give you the chance to vote on what you say you believe 
in. We give you the chance for an up-or-down vote where you can match 
all of your speeches with your votes, where you can look the American 
people in the eye and you can say we believe that all $270 billion is 
necessary in order to, as you say, save Medicare.
  I do not think you are saving Medicare. I think in the name of saving 
Medicare you are destroying part of Medicare. That is what this vote 
would have been about. I think the only people who are terrorized are 
colleagues on the other side of the aisle who are terrorized that they 
have to vote what they have been talking about for the last 6 or 7 
months.
  Mr. KENNEDY. Will the Senator yield?
  Mr. WELLSTONE. I will be pleased to yield.
  Mr. KENNEDY. Again for a question. If this is such a great deal for 
the seniors, why do all of the seniors themselves and their principal 
representatives, the American Association of Retired Persons, Council 
of Senior Citizens, National Committee to Preserve Social Security/
Medicare testify in opposition to the plan? If this is such a great 
deal--we listened to these Senators talk about it this morning for 5 
hours--5 hours--and then the time came to call the roll. Oh, no, you 
cannot even have a vote on your amendment, even though we think it is 
so great. If it is so great, why will they not defend that back home to 
their seniors? Why will they not be able to go into their senior 
citizens homes and be able to justify it?
  They cannot do it. They cannot do it. And the proposal and the idea 
that we want to look at medium or long term, they could have done that 
before. They could have reported out something with those kinds of 
provisions. But no, suddenly when they are just about to call the roll, 
they pull this amendment out and send it to the desk.
  As we have said before, this is Halloween, and it is trick or treat 
time. This amendment is a trick on the seniors of this country, and it 
should not be accepted.
  Mr. WELLSTONE. Mr. President, let me respond and then just simply 
yield the floor to some of my other colleagues who would like to speak.
  First of all, let me just say to the Senator from Massachusetts and 
my colleague from Iowa--if I could get their attention just for a 
moment--it is very interesting; you asked the question, if this is so 
good for senior citizens and represents such good reform, with all the 
promises that have been made, how come all of the organizations and all 
the people who are going to be affected by this are opposed to it?
  The answer is there is a huge disconnect between these proposals and 
the lives of people back in the States. These proposals are very 
reckless with the lives of senior citizens. And it is the intelligence 
of senior citizens in Minnesota not because anybody is leading them 
around by their noses; it is their own intelligence and their own 
insight which tells them that these proposals are not in their best 
interests.
  I have to say to my colleagues on the other side of the aisle that 
your refusal to vote on your own proposal does nothing to reassure 
them. We have been hearing your speeches forever. We have been seeing 
your ads on television. You have been telling the senior citizens this 
is going to be so great, and now you have a chance to vote what you say 
you believe in, and all of a sudden, I say to my colleague from Iowa, 
we see them just running away, running away.
  That is my first point. My second point is that--I do not even 
remember my second point.
  Mrs. BOXER. Will the Senator yield to me for a question?
  Mr. WELLSTONE. I would be pleased to yield for a question and then by 
then I will get my second point.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. WELLSTONE. Mr. President, I ask unanimous consent for 3 more 
minutes so I can come up with my second point.
  The PRESIDING OFFICER. The Senator has 3 more minutes off his side's 
time.
  Mrs. BOXER. What I would love to do is simply say to my friend the 
reason he did not get to his second point is his first point was so 
good. But I have to say that in listening to my colleagues--and I truly 
was not going to participate in this particular amendment. I had come 
over here expecting a vote on it. What do I find? We are blocked from 
voting. What is the other side afraid of if they are so excited about 
their plan? They are afraid to vote.
  I will tell you why they are afraid. Because they know that the 
American people are waking up and they understand now it only takes $89 
billion to keep Medicare solvent, and they are cutting $270 billion. We 
know they need to cut that much to come up with what Newt Gingrich 
calls the crown jewel of the contract, the tax breaks for the wealthy. 
And I say to my friend, because he has been working on these issues a 
long time, in his hometown and his home State, do seniors understand 
why the Republicans want to give $5,500 a year back to people who earn 
over $350,000 while they destroy Medicare, Medicaid, student loans, and 
for God sakes repeal nursing home standards? Do the people in his State 
understand that?
  Mr. WELLSTONE. Mr. President, I would say to the Senator from 
California, no. And I think this becomes an issue of Minnesota fairness 
and people just do not find it credible--$270 billion in cuts in 
Medicare but only $89 billion needed for the trust fund, and at the 
same time $245 billion in tax cuts, disproportionately going to people 
on the top. No, that violates the Minnesota standard of fairness.
  My second point, which came to me, is that this whole business about 
some sort of a study of what the consequences of all this will be, 
Senators, we have this that just came to us--2,000 pages. And my 
colleague from Utah, whom I deeply respect, said the more people in the 
country get to know about our plan the better they like it. People do 
not know what is in this plan.
  I say to my colleague from California, I have said for the last month 
this is a rush to recklessness, and it is because when you talk to the 
people who live in the communities that are affected by this and 
deliver the care to Medicare beneficiaries, they are saying this will 
not work. There is a disconnect. Anyone can add numbers and subtract 
numbers, but, for gosh sakes, colleagues, look at the connection 
between your numbers and people's lives.
  We never had one hearing on your final set of proposals, not one 
hearing, not one expert flown in from anywhere in the country, much 
less the opportunity to take this back to our homes and ask the people 
who are affected by this whether or not it will be beneficial to them. 
If we had an up-or-down vote on this amendment----
  The PRESIDING OFFICER. The Senator's 3 minutes have expired.
  Mr. WELLSTONE. Then I think we would have had an opportunity for 
everybody to speak.
  I yield the floor. I thank my colleagues.
  Mr. ROCKEFELLER addressed the Chair
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. Mr. President, this is an interesting----
  The PRESIDING OFFICER. Who yields the Senator time?
  Mr. ROCKEFELLER. The Senator from Massachusetts, I believe, is 
yielding me time.
  Mr. KENNEDY. I yield the remainder of the time to the Senator from 
West Virginia.
  Mr. ROCKEFELLER. Mr. President, I guess it is my general impression 
that the other side, the Republican party, does not want to vote on 
this amendment which we started hours and hours ago. We have had all 
kinds of delaying tactics and we had second-degree and first-degree 
amendments, talks about all kinds of time agreements, but not a vote, 
not a vote.
  I have not been on the floor. I have been working with our leader, 
but I assume that this point had been made over and over again. One of 
the things that I think seniors should be aware of is--which has not 
been talked about at all in the Republican amendment for Medicare, 
which cuts $270 billion out of Medicare--is something called the 

[[Page S15637]]

BELT agreement. It is not GATT, it is not NATO, it does not have 
forces, but it has lethal effect, absolutely lethal effect. And it is 
tucked away inside the Republican Medicare plan. And BELT, because I 
know you are anxious to find out, stands for the ``budget expenditure 
limit tool.'' Interesting phraseology.
  It is a budget gimmick that poses a very dangerous threat to our 
senior citizens. And when our colleagues on the other side of the aisle 
say we are trying to scare senior citizens, one of the things that 
comes back at me is, do our senior citizens even know the beginning of 
what they would be getting into if we ended up with the Republican 
amendment to cut $270 billion and other matters, for example, the BELT 
agreement?
  Now, let me tell you what the BELT agreement does. This is the 
Republican device that will make automatic cuts in Medicare for years 
to come--for years to come--automatic cuts, no legislative authority, 
automatic cuts. And what will the cuts be made for? They will be made 
for the GOP tax breaks for the wealthy.
  The budget gimmick is labeled, as I indicated, the ``budget 
expenditure limit tool.'' And it is the Republican secret plan to make 
automatic cuts in the traditional--now catch my words--fee-for-service 
Medicare Program. Now, remember what we have been hearing this 
afternoon at great length is that ``No, no, no, don't worry about these 
things called HMO's. Don't worry about that, because 90 percent of 
seniors are already in the fee-for-service program. Of course they'll 
be staying in the fee-for-service program.''
  So all seniors are meant to relax when they hear that argument. But 
they do not understand the BELT agreement, the BELT agreement, which is 
the ``budget expenditure limit tool.'' And what it does is makes 
automatic cuts in the traditional fee-for-service Medicare Program, 
without any action by Congress or the President, for the next 7 years 
into the future.
  Now, how would it work to hit seniors? First of all, it would put 
GOP, Republican, priorities ahead of seniors' health care needs in 
three ways.
  First, the BELT--this budget limitation tool for seniors on fee-for-
service Medicare, ordinary Medicare, 90 percent of seniors--it would 
set a fixed annual target on Medicare spending. Oh, we have not talked 
about that this afternoon. We have not talked about a fee or an 
expenditure limit on Medicare spending. I have not heard that from the 
other side this afternoon, because everything was geared to have 
seniors believe, so long as they were in the Medicare fee-for-service 
portion that they are now in, that life continues to be cheerful and 
wonderful and there is no worry. ``Don't worry about that, HMO's.'' But 
they did not tell us about BELT.
  So a fixed annual target is set on Medicare expenditures representing 
the amount necessary to secure the funds that Republicans need for tax 
cuts for the wealthy. And it becomes an absolute limit on what Medicare 
will contribute to seniors' health care. May I repeat that? It becomes 
an absolute limit, a ceiling, on what Medicare will contribute to 
Medicare regular enrollees, non-HMO seniors' health care.
  Second, if Medicare's bill exceeds this limit, the BELT, which is the 
budget expenditure limit tool, imposes automatic--what is my next 
word?--reductions, reductions, arbitrary in nature, in key Medicare 
spending in the following year, imposing cuts in Medicare; for example, 
inpatient hospital services, reductions in expenditure for inpatient 
hospital services, inpatient hospital services for seniors; home health 
services, reductions; hospice care services, reductions; diagnostic 
tests, reductions; physician services and outpatient hospital services, 
reductions, Mr. President.
  I am sorry, I am sorry, this is in the Republican plan. No, we have 
not heard about it because we did not have much time. And, no, we did 
not hear about it in the Finance Committee because we spent about a 
total of 10 minutes debating this entire thing--10 minutes per side.
  Mr. HARKIN. Would the Senator yield?
  Mr. ROCKEFELLER. I would be happy to, although I have my third 
Draconian measure that I would like to mention.
  Mr. HARKIN. This is startling news to this Senator. I am not on the 
Finance Committee.
  Is the Senator saying that this BELT provision, which sounds to me 
like the old sequestration, whereas, if you do not hit certain targets, 
there is automatic across-the-board cuts, is that what is going to 
happen, automatic, in all these services?
  Mr. ROCKEFELLER. The word ``sequestration'' is the perfect word.
  Mr. HARKIN. Well, what the Senator from West Virginia is talking 
about, are these BELT provisions, are they in this 2,000-page 
reconciliation bill? Is that what the Senator is saying? They are in 
this big thick bill someplace?
  Mr. ROCKEFELLER. Yes.
  Mr. HARKIN. I wonder what else is hidden in here. Two thousand pages, 
and we got it yesterday--2,000 pages. Who knows what is hidden in 
here--2,000 pages. We have not had 1 day of hearings on it, not 1 day. 
And now the Senator from West Virginia has brought up something that 
this Senator was totally unaware of, I will be frank to admit to 
everyone.
  Why? We have not had a chance to look at this or have hearings and 
know what is in it. What the Senator is saying is buried in these 2,000 
pages, which no one knows what is in there, is a provision that will 
allow for services to the elderly, in all the areas the Senator just 
outlined, to be automatically cut, automatically without any vote of 
this body or of the Congress of the United States. I find that 
incredible. I almost cannot believe it.
  Mr. ROCKEFELLER. If the Senator will yield to his incredulity and 
mine. I would add that under the Republican $270 billion cut, Medicare 
will be squeezed in its growth rate at 4.9 percent per person. Now, you 
go into the private market, private health insurance, that is going to 
grow at 7.1 percent. But they are going to hold it down to 4.9 percent 
for Medicare.
  Now, this is for your Medicare. So what is going to happen? 
Obviously, spending for Medicare, because you do not reduce the price 
of health services simply because you reduce the amount of money that 
you are willing to pay, to make available to pay for them, the price 
will continue to rise as it has in the past, but the amount of money 
will be much less. So what, in fact, you have guaranteed is this BELT 
procedure.
  Mr. HARKIN. Not only that, if the Senator would yield further, not 
only that, not only the price increase, but the number of elderly is 
going to increase. People are living longer. They are healthier so they 
are living longer. So you will have more people in that bracket in the 
future.
  So the belt is going to tighten even harder and faster because of 
both of those. I am just shocked about this. I am glad that the Senator 
brought this up. I daresay, there are very few people who understand 
this. We are indebted to the Senator from West Virginia for pointing 
this out. I just still find this incredible that this would be buried 
in this bill.
  Mr. ROCKEFELLER. That is the point, I say to my friend from Iowa. And 
what is absolutely incredible is I have sat here under limited time, to 
be able to discuss any of this, this afternoon for hours, and I have 
heard all of this talk about this glorious--``All those seniors in the 
fee-for-service Medicare Program are going to be happy. We don't do 
anything. They are just there. They don't have to join the HMO's. They 
will be in that 90 percent of happy folks that we are going to do 
nothing to cut their services and life will go on.'' But this BELT 
procedure is reserved exclusively for them, I say to the Senator from 
Iowa.
  So they are going to cap this at 4.9 percent, even though the private 
cost of health care costs are going to be 7.1 percent. So it is 
automatically guaranteed there is going to be a shortfall, at which 
point the sequester falls in, the BELT falls in, the reductions are 
made in inpatient hospital services, home health services, hospice 
care, diagnostic tests, physician services--that means visiting a 
doctor--and outpatient hospital services. That is the whole ball game 
in health care. There is not much else you can do.
  I will say, I made a mistake, because the third part of this is that 
under the plan, since the first-degree amendment of the Senator from 
Colorado wiped out the $89 billion reduction in Medicare and supplanted 
it with a $270 billion Republican one, what I failed to say 

[[Page S15638]]

was that, in fact, they have been at least kind enough to say that the 
Congress could adjust this BELT or do something with this BELT 
procedure, but only under a supermajority.
  I am not sure what a supermajority is, but it has to be at least 60 
percent. It is probably closer to 66\1/3\ percent, which means that the 
Congress would not do it, so the BELT would be in effect.
  Of course, BELT threatens access to choice. It applies only to 
Medicare fee-for-service expenditures. It hits only seniors who want to 
keep their current doctors. As a result, this budget gimmick will 
discourage doctors from accepting fee-for-service patients, senior 
patients, which, for reasons which we now understand much more clearly 
because of what is hidden in this Republican plan since obviously their 
payments will be cut, the physician payments will be cut, threatening 
the access of seniors to doctors' offices of their choice.
  If there is anything you can say to a senior that will justifiably 
terrify that senior, it is that you are going to take that senior's 
doctor away.
  All afternoon we have been hearing that is not going to happen, but 
it is the current beneficiaries who are going to be hit the hardest. I 
just would very much like for my colleagues to understand a new concept 
called BELT, budget expenditure limit tool, which automatically, if 
costs go up too much--which, of course, they will--it automatically 
sequesters and then reduces virtually all health care services for 
seniors. Nobody in this building knows about it.
  Mr. HARKIN. Will the Senator yield?
  Mr. ROCKEFELLER. Virtually nobody in the Finance Committee knew about 
it, because we only debated the thing for about 10 minutes. Now, the 
Senator from Iowa and the Senator from West Virginia know about it, and 
perhaps some others do, too.
  Mr. HARKIN. Will the Senator yield for another question?
  Mr. ROCKEFELLER. Of course, I will.
  Mr. HARKIN. Again, I want to thank the Senator for pointing this out. 
I daresay, not too many people know about this hidden in these 2,000 
pages. I just received a piece of paper on this which indicates that 
BELT applies only to Medicare fee for service. So it would hit only 
those elderly who want to keep their current doctors; is that right?
  Mr. ROCKEFELLER. That is correct. The Senator is 100 percent correct.
  Mr. HARKIN. Wait a minute. I had been led to believe by the other 
side that they want to give seniors choices, more choices; that they do 
not want to shoehorn or force the elderly into managed care systems but 
leave them their choices and their options.
  But now what this says is that this BELT, this thing which would have 
these across-the-board cuts in all these areas, would apply only to fee 
for service. Again, am I correct, I ask the Senator from West Virginia, 
in saying that with this BELT provision, it is just another way of 
taking away more choice for the elderly?
  Mr. ROCKEFELLER. The Senator is correct, but I will add a further 
dimension. It is another aspect in what it is that our Republican 
colleagues have to do, driven by this Contract With America, in order--
you see, there is a reason for this. You do not do it because you want 
to do it, you do it because you have to get that tax-break money.
  Mr. HARKIN. I am beginning to see.
  Mr. ROCKEFELLER. That is why you have to come up with gimmicks like 
this which you do not talk about on the floor of the U.S. Senate, 
because you do not want anybody to know about it.
  Mr. HARKIN. I ask the Senator from West Virginia if he will yield for 
another question. Then in the substitute that was offered by the 
Senator from West Virginia earlier today, on which they will not allow 
us to vote, it looks like, that BELT provision is not in the substitute 
of the Senator from West Virginia?
  Mr. ROCKEFELLER. There is nothing--nothing--in the Democratic 
amendment which has that.
  Mr. HARKIN. And one last question of the Senator from West Virginia, 
then. The only reason he can discern for having this provision in there 
is only so the Republicans can get their $270 billion cut in Medicare 
to fund the $245 billion tax break; is that correct?
  Mr. ROCKEFELLER. To the Senator I say, you have to get your money 
somehow. If you are going to cut to get all this tax-break money, you 
have to go to where the money is. The money is in Medicare. The money 
is in Medicaid. There is some money in the earned income tax credit, 
which they call a welfare program, which is very interesting to me, 
because how come those same people then pay a personal income tax and 
Social Security tax? I did not think people on welfare paid those 
taxes.
  It is just a very depressing aspect of how far they will go.
  Mr. HARKIN. I am going to ask the Senator to yield. Again, I hold up 
this poster. I talked about it earlier. But just in light now of what I 
have found out from the Senator from West Virginia of what is hidden in 
this bill reminds me of what the majority leader said just last night, 
and I will quote again for the Record:

       I was there fighting the fight--voting against Medicare--
     one of 12--because we knew it wouldn't work in 1965.

  That was the majority leader just last night.
  So I guess I would say, who do you trust? I keep hearing from the 
other side that they want to save Medicare. From what the Senator from 
West Virginia just pointed out on this BELT, it ought to be called the 
``knife,'' because it is really cutting Medicare. That is what they are 
doing.
  I thank the Senator. He has done a great service in bringing this to 
our attention.
  Mr. ROCKEFELLER. I thank the Senator from Iowa. I just simply say 
that it is a shocking thing. It is a hidden thing. It is malicious to 
seniors, and it is particularly embarrassing, I think, in the context 
of fair debate, when people all afternoon have been talking about the 
fact that seniors on Medicare in the regular fee-for-service Medicare 
system, which is 90 percent of the system now, will continue to have 
this wonderful existence, when they know perfectly well that what they 
are doing is they are capping expenditures. They are capping 
expenditures several percentage points below what they know the cost of 
expenditures will rise in health care and then guaranteeing, therefore, 
the sequestering followed by the reduction in services on all fronts of 
health care for Medicare patients. Then the only way you can get out of 
it is through a supermajority, which I would assume is two-thirds of 
the Congress, both the House and the Senate, which I think would be 
very hard to do.
  It is also interesting that--well, Medicare recipients on top of this 
will pay more out-of-pocket expenses. In other words, there is going to 
be $700 less per beneficiary in the year 2002. It is going to double 
deductibles, raise premiums, raise the Medicare eligibility age to 67. 
These are all very important, very troublesome problems. Private health 
premiums will be increased, as the minority leader indicated, by cost-
shifting. Hospital closings will take place in States like West 
Virginia and, I assume, Iowa. I think most rural States.
  Frankly, it is my judgment that doctors will be driven out of the 
program and will be turning away Medicare recipients.
  Mr. HARKIN. If the Senator will yield again on that point, I will 
just say, if you have fee for service and the doctor is taking fee for 
service, and then you have this automatic provision to cut all these 
provisions, then it would be very discouraging to doctors to take fee-
for-service elderly. Thus, once again, that would be lying--the 
intention of the Senators on the other side of the aisle that they want 
to provide more choices for seniors. They can say it all they want. You 
can say the Moon is made out of cheese, but that does not make it so. 
The facts are that this bill is going to push the seniors out of their 
fee for service.

  If the Senator will yield further for a question, I want to ask the 
Senator what the Republicans are trying to do here with their $270 
billion cut--and now with this BELT gimmick that I never heard about 
before--how that would work for an elderly person who just wrote me 
this letter from Iowa. A husband and wife--I will not use their names, 
because I do not have their permission yet. I will get in touch with 
them to ask for permission. Their total income per year with Social 
Security, plus they have an old house rental, is 

[[Page S15639]]

$20,000 or less. She adds up all of their health expenses and premiums, 
which totals $7,668 a year, out of a $20,000 income. She has diabetes 
and her husband has heart disease and a fractured hip socket. She had a 
stroke 3 months ago. She is talking about how wonderful Medicare has 
been for them. She said, ``People around here are worried that Congress 
is destroying the best programs in our country, which have made 
people's lives so much better. My late grandparents lived in poverty 
receiving $40 a month welfare. Could we live on that?''
  I ask the Senator from West Virginia, how could someone like this, 
making $20,000 a year--and I might add this: When I hear people on the 
other side of the aisle talk about the elderly, I swear all the elderly 
they know live in Beverly Hills, or Palm Beach, or something like that, 
because in my State of Iowa, 80 percent of the senior citizens make 
less than $20,000 a year, and 50 percent of the elderly in Iowa have 
incomes of $10,000 a year or less. That is what we are talking about.
  Mr. WELLSTONE. Will the Senator yield for a second? How much out-of-
pocket do they pay on health care expenses right now?
  Mr. HARKIN. Well, right now about 21 percent of their income. So if 
they have $20,000 a year, you can figure right away that 21 percent of 
that--about $4,000 a year--is going for out-of-pocket expenses. One-
fifth of their income is going out. Under the Republicans' proposal, 
that will go up, over the next several years, to 31 or 32 percent. So 
it will be one-third of their income that would go out. Right now, for 
us who are working, it is around 7 percent, 8 percent of our total 
income that goes for health care. So in Iowa, where we have 50 percent 
of our people making less than $10,000--and I have this letter which is 
a heartbreaking letter, where she talks about how much they have to pay 
for their premiums, what they have to pay for their deductibles and 
their prescription drugs. Their income is $20,000 a year, Mr. 
President, and they are paying $7,668 a year out-of-pocket. I ask the 
Senator from West Virginia, what hope would there be for this couple 
under the Republican proposal, cutting $270 billion out of Medicare? 
What could you tell this couple when their premiums and deductibles are 
going to double, yet, their income is not going to go up?
  Mr. ROCKEFELLER. Well, of course, Social Security will be cut, too, 
will it not, under the Republican plan?
  Mr. HARKIN. That is right. Not only that, but for some of the low-
income elderly in Iowa making less than $10,000 a year, they are 
cutting the Low-Income Home Energy Assistance Program where they get a 
measly $80 or $100 a year to help out in that respect.
  Mr. ROCKEFELLER. If the Senator will yield, after a period of 7 
years, I believe it is, they are saying that you can no longer get 
Medicare when you are 65; you can only get it when you are 67.
  Mr. HARKIN. It is going to go up to 67, right. The Senator is 
absolutely right.
  If the Senator will yield further, the only thing I can come up 
with--and I really do not know why they are doing what they are doing 
on the other side of the aisle. I know they want to give tax breaks to 
their special interest friends. I understand that. That is what they 
want to do. They made their agreements and their contract, and they 
want to do that. But why do they believe they can take it out of the 
elderly? The only thing I can assume is that they think the elderly are 
so gullible that they are not going to pay attention. Maybe they are so 
busy, like this couple, paying their bills and making ends meet that 
they are not going to pay attention to what happens here. Maybe they 
feel that. I hope not because, I am telling you, the elderly have to 
understand that this is going to hurt and hurt badly for the next 7 
years.
  Mr. ROCKEFELLER. If the Senator will yield, I think there is a very 
interesting point that goes along with all of this. The majority 
party--the Republican Party--has accused us of ``fear mongering,'' and 
scaring seniors. Yet, for a long period of time--and in telling the 
truth, everybody is entitled to their own opinion but not their own 
facts. We have been talking about some of the facts which the Senator 
and I have discussed this afternoon, a relatively new fact in that 
2,000 pages. But, hopefully, more people will know about that. What is 
interesting is that the American Hospital Association really did not 
get very much--even though they are getting terrible cuts, they did not 
get involved too much in taking all of this on.
  The PRESIDING OFFICER. The time of the Senator has expired.
  The Senator from Michigan has 38 minutes.
  Mr. ABRAHAM. At this time, I yield 7 minutes to the Senator from 
Minnesota.
  Mr. GRAMS. Mr. President, if this is a contest of volume and rhetoric 
and half truths, we are going to probably come in second best. I would 
like to try to concentrate on some common sense and some truth about 
what we are trying to debate here on the floor.
  We are really talking about a couple of major issues, and that is 
that a lot of the debate is whether we are going to put a Band-Aid over 
the Medicare Program and extend it for maybe 2 years into the future of 
solvency, as the Democrats have proposed, and then be back here in 
another year or two and debate this all over again, or we are going to 
look at some real reform. We are going to talk about extending this 
program to 2012 and into the next generation, to make sure that we 
secure, that we improve, and that we protect the Medicare system, not 
only for those who depend on it today, but for the next generation as 
well.
  If we do not begin real basic reform--that is, to reduce the rate of 
growth in this program, and we are not talking about cuts, we are 
talking about trying to put some common sense into this program and put 
out there a Medicare Program that not only provides good service but is 
one that we can afford. If we do not, the alternatives are just a 
couple. Either we can do as the Democrats have proposed, and that is 
extend the life of this program for just 2 years so we can come back 
here and debate this all over again after the next election. Or we can 
do nothing and we can let the trust fund go broke, as the trustees have 
told us it will do, in the year 2002. Or the other option would be that 
we can go back to the taxpayers with business as usual and say we need 
another $388 billion to keep this program status quo--business as 
usual.
  That is what the Democratic answer has been over the last 30 years. 
Seven times they have gone to the taxpayers and said, ``We need more 
money for this program,'' and raising taxes has always been the 
answer--never real reform, never restructuring the program, never 
trying to make it sound. Just more taxes. Throw more money at the 
problem and get us by another couple of years; just limp into the next 
century, and we will come back and address the question then. Then the 
linkage, the demagoging, of always $270 billion in reduced growth--not 
in cuts, but reduced growth--and they link this always to $245 billion 
in tax relief. They seem to have some kind of an objection to letting 
Americans keep more of their own money.

  If this were a repeat of the 1993 record increase in taxes they would 
be down here in a second to vote to raise your taxes. But if there is 
any talk about tax relief for American families, hard-working families, 
they just demagog this to death. They do not want you to keep any more 
of your money.
  Somehow, somehow the thought and the notion in this Capital City has 
been that the money belongs to Washington. We are going to decide how 
much to dole back to you, the hard-working Americans.
  Those who get up every morning, go to work and put in 40-plus hours a 
week, husband and wife trying to take care of their family--they do not 
think you can spend their money as wisely as they can in Washington. If 
they allow you to keep this $245 billion over the next 7 years, you 
might spend it foolishly--like on food, clothing, shelter, education 
for your children. You might do something stupid with your money. So, 
send it to Washington and they will make sure that it is spent more 
wisely.
  And talk about the scare tactics. Fearmongering--they do not 
fearmonger. They are not throwing out scare tactics. For the last hour, 
we have sat here and listened to nothing but scare tactics, that we are 
somehow gutting this program, that there will 

[[Page S15640]]

not be a dime for Medicare, for our senior citizens over the next 7 
years or beyond.
  If that is not a scare tactic, telling every senior citizen in 
America if we do not buckle under and not give any tax relief or raise 
taxes, that somehow all Medicare will disappear. My grandmother is one 
that got one of these scare tactic letters from her Democratic 
Congressman in northern Minnesota. It said that somehow the Republicans 
are going to put you into the street because they are going to take 
away Medicare.
  Now, for a 92-year-old bedridden woman to get a letter like this, if 
this is not scare tactics, I do not know what is. To hear the rhetoric 
we have heard and will continue to hear, if that is not scare tactics, 
without addressing the problem, if the problem is so bad, where have 
the Democrats been over the last 30 years? How come all of a sudden we 
are on the brink of disaster, if they have all the answers today?
  I do not know why a $500 per child tax credits somehow does not work 
in with their plan.
  Another thing, the $270 billion in reforming Medicare. Now, if we do 
not do this, again, the trustees are saying it will go broke, that 
somehow Medicare--we know that over the next 7 years any savings in 
Medicare has to remain within the trust fund. There is a fire wall.
  In fact, Republicans have an amendment, as our amendment notes, using 
Medicare savings for tax cuts would be illegal under the Finance 
Committee bill. The Senate committee bill says it would be illegal to 
use it for anything but Medicare.
  There is no linkage. The only way we can have tax relief is if we 
reform it and balance the budget. If we can do that, then the benefits 
are going to be some tax relief for hard-working Americans who have 
been paying $245 billion--do you realize that is only 1.5 percent of 
our total expenditures over the next 7 years?
  But it sounds like that if somehow we give this small tax relief to 
American residents and hard-working middle-class families, that somehow 
this whole country is going to unravel; if we take this $245 billion 
and shift it out of Washington and into the hands of families, that 
somehow this whole country is going to collapse, because we have taken 
another $245 billion from bureaucrats in Washington to spend as they 
want.
  So, again, one other thing I want to mention, if the Government is 
going to somehow pay for all of this, if we cannot afford it ourselves, 
how can we afford to pay taxes to let the Government do it? We cannot.
  If we cannot as a society, as individuals or as families, somehow 
afford this, is the Government automatically going to have enough money 
in Washington? They will tax it away. Washington does not create 
wealth. It collects it and redistributes it.
  Is this good for seniors? Yes, Mr. President, it is good for seniors. 
It will make sure that Medicare is protected and preserved.
  Mr. WELLSTONE. Will the Senator yield?
  Mr. GRAMS. I just have a few minutes left.
  The PRESIDING OFFICER (Mr. Abraham). All time has expired.
  Mr. GRAMS. I think this is something that is so important that we 
cannot ignore it, and we have to make sure that Medicare is preserved 
and protected not for an additional 2 years but for the next 
generation.
  I yield the floor.
  Mr. FRIST. Mr. President I yield 8 minutes to the Senator from 
Wyoming.
  Mr. THOMAS. Thank you, Mr. President.
  I come to change the tone a little bit. I have been sitting here for 
5 hours and have heard nothing but negative, depressing kind of things.
  I am excited about the opportunities that we have. I am excited about 
the opportunities that we will have to do something that the people who 
have been complaining here have not done for 30 years. We will have a 
chance to balance the budget. We have not done it for 26 years. We will 
have a chance to do something about welfare. We have not done it for 
all these years. We will save Medicare. We have not had a plan to do 
that. We will leave a little more money in the pockets of Americans.
  Now, that is not a bad idea. That is a pretty positive kind of a 
thing, it seems to me.
  Frankly, I get a little weary of the same folks that have been here, 
who have brought us where we are, that we need changes, and they resist 
changes, and expect something different to happen by doing the same 
thing. I do not understand that.
  That is what we have heard all afternoon. Do not change anything. 
Things are not good, but do not change them.
  Someone mentioned the difficulty in rural States. I come from a rural 
State. As a matter of fact, there are a number of things here that I 
think will be greatly strengthened, including the health program in 
rural areas.
  There are several specific things here that I want to mention. One is 
limited service hospitals. We have, over time, developed hospitals. We 
were encouraged over the years--properly--to develop full service 
hospitals in small towns. Quite a few of them sometimes were just 20 
miles apart.
  In Wyoming, we had a hospital with 4 percent occupancy. It cannot 
exist at that. So it has to fail.
  So we will change in this bill the qualifications of a hospital so 
that you can have a limited service hospital, still be reimbursed by 
HCFA, the Federal Government for stabilizing facilities, for emergency 
facilities, so you can move to the next hospital. It would be a great 
asset. You need something in a town but you will not be able to have a 
full service hospital. That will be done here.
  Medicare dependent hospitals--the 1993 budget let this program 
expire. We are going to reinstate that. The purpose is to assist 
facilities in high Medicare patient loads to continue.
  The extension of the sole community hospital status, hospitals that 
have less than 50 beds, 35 miles away from the nearest hospital, will 
continue. This is good stuff for rural America.
  It levels HMO payments in Medicare. There is a great disparity now. 
We settled that on the basis of fee-for-service as it existed. In Bronx 
County, New York, $678 can be paid per month for HMO's and Medicare; 
Fall River County, South Dakota, on the other hand, gets $177. We will 
fix that. That is good for rural America.
  Medicare bonus payments to physicians will be increased from 10 
percent to 20 percent. We talk about bringing service providers into 
the rural area. This will do that. Telemedicine grants--we have a great 
opportunity to increase services with telemedicine grants in rural 
communities.
  I understand the marketing device, of being opposed--there are some 
very positive things here, starting with the fact if you do not do 
something, it fails. Second, you can preserve it for 2 years or you can 
preserve it for longer than that, and we are going for the long haul.
  There are positive things here. One of them is the help for rural 
areas, like my State of Wyoming. I am very pleased we are looking 
forward, in these next 2 days, to do some positive things. I hope we 
begin to talk about the benefits that can accrue, benefits that will 
accrue, rather than seeking to worship the depressing scenario we have 
been going through for the last couple of hours.
  I yield the floor.
  Mr. SARBANES. Mr. President, I rise today to join my Democratic 
colleagues in expressing deep disappointment and outrage at the way in 
which those on the other side of the aisle have chosen to handle this 
critical issue.
  Several weeks ago, I participated in hearings organized by Senators 
Kennedy and Rockefeller because it was--and remains--my view that the 
public ought to have the opportunity to review and understand what is 
being proposed by congressional Republicans with respect to the 
Medicare Program.
  During these hearings, we heard testimony from the trustees of the 
Medicare Trust Fund. We believed it was important to hear from the 
trustees in order to give them the opportunity to clarify any 
misrepresentation of their annual report on the future solvency of the 
Hospital Insurance Trust Fund and to get their analysis of the 
Republican proposal to cut $270 billion from the Medicare Program.
  What we found was that the Medicare trustees do not even suggest that 
$270 billion is required to address the problems of the trust fund. In 
fact, the 

[[Page S15641]]

trustees made it very clear that $89 billion over the 7 years is all 
that is required to address short-term solvency issues of the Hospital 
Insurance Trust Fund. In a recent letter to Republican leaders Dole and 
Gingrich, Secretary Rubin specifically states, and I quote him:

       No member of Congress should vote for $270 billion in 
     Medicare cuts believing that reductions of this size have 
     been recommended by the Medicare Trustees or that such 
     reductions are needed now to prevent an imminent funding 
     crisis.

  The amendment offered by Senator Rockefeller gets right to the heart 
of this issue. Senator Rockefeller's amendment would recommit the 
Medicare portion of the reconciliation bill with instructions to the 
Finance Committee to eliminate cuts beyond the $89 billion that the 
Medicare actuaries certify is necessary to ensure solvency of the trust 
fund through 2006.
  Now, we find out that we will not be permitted a straight up-or-down 
vote on this amendment. I say to my colleagues on the other side of the 
aisle, if you believe as you say you do, that a $270 billion cut is 
needed to save the Medicare Program, then this vote should be simple 
and we should all have the opportunity to make our position clear on 
this important matter.
  The effort to prevent a clear, recorded vote on Senator Rockefeller's 
motion is even more distressing in light of the absolute refusal of the 
Republican leadership to hold the kind of open, public hearings that an 
issue of this magnitude requires. What they have done is spring the 
legislation on us and then immediately move to mark it up and report it 
to the floor without any chance for careful examination or thought as 
to what its implications are for our senior citizens. They try to move 
it so fast that people cannot, in effect, identify what is being done.
  The best description of what they are doing was given, in my 
judgment, by the Republican political analyst, Kevin Phillips, in a 
recent radio interview where he was quoted as saying--now this is not 
me talking; this is the Republican political analyst Kevin Phillips. 
And he said, and I quote him:

       This revolutionary ideology driving the new Republican 
     Medicare proposal is all so simple. Cut middle-class programs 
     as much as possible and give the money back to private-sector 
     business, finance and high-income taxpayers. Rhetoric about 
     the cuts being to save Medicare is politics, not underlying 
     GOP motivational reality. Remember, at the same time as the 
     Republicans propose to reduce Medicare spending by $270 
     billion over seven years, they want to cut taxes for 
     corporations, investors and affluent families by $245 billion 
     over the same period. This is no coincidence.

  The fact of the matter is, the Republican Medicare reform proposals 
are not about saving Medicare or about protecting senior citizens. They 
are not about true reform. To reform, by definition, means to make 
better or improve by removing faults. I submit that this entire 
reconciliation package is driven by an insatiable desire to give 
further large tax benefits to very wealthy people.
  Mr. President, it would be truly irresponsible for the Congress to 
approve sweeping and drastic changes to the Medicare system without a 
thorough discussion of what those proposals mean to our Nation's health 
care system, and to the people it serves. We have not been afforded the 
opportunity for such a discussion and I regret that we will also not be 
afforded the opportunity to have straight up-or-down vote on this 
amendment.
  The PRESIDING OFFICER. Who yields time?
  Mr. FRIST. Mr. President, I yield 4 minutes to the Senator from Iowa.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, the amendment that has been offered by 
the other side of the aisle is a statement that the Members on the 
other side of the aisle have lost their nerve. They have lost their 
nerve to really do something big about Medicare before it is too late.
  We all know from the President's own people that Medicare will be 
bankrupt in the year 2002. This bill put forth by the majority party 
guarantees that Medicare will not be bankrupt by the year 2002.
  The plan that is put before us addresses only the part A trust fund. 
We all admit that there is a crisis in part A, because it is growing at 
a very robust clip of 8.4 percent. But their plan does nothing to 
address part B. Part B is growing, as we know, at 14.5 percent, an 
unsustainable rate. So I think we all have to question their logic, 
that they raise a point about 8.4 percent being a crisis but will 
forget about the part of Medicare that is growing almost twice as fast, 
at 14.5 percent.
  It is a simple fact, if we do not act now, there will not be a system 
around when baby boomers retire. The longer we put this off, the harder 
it will be to address. Just look at how difficult a time we are having 
to apply a stitch in time. The scare tactics being used now by the 
Democrats, of course, will look like Halloween compared to what we will 
see if we continue to put these reforms off until the years 1999, 2000, 
2001. Maybe they will not even be dealing with it in the year 2002.
  Then I look at the recent discussion from the other side of the aisle 
on the provisions dealing with what is called the BELT.
  We have been fed a lot of horror stories by the other side. If I get 
any message from the seniors of America, it is this. They think the 
cost of medical care is too high and they blame us, because it is a 
Government program, for it being too high. They expect us to do 
something about the bills. They expect us to do something about the 
cost of Medicare. This provision only makes sure that Congress lives 
within its spending targets.
  Ask any senior anywhere in America if they believe in a balanced 
budget. They will tell you that they do believe in a balanced budget.
  Ask them if they think there ought to be some limits on what is spent 
on a Government program, health care or anyplace else, and they will 
say, yes, there should be.
  That provision is in the bill to guarantee that costs do not exceed 
spending targets.
  The impression was left from the debate between my colleague from 
Iowa and my colleague from West Virginia that this has never happened 
before. It did happen before. In 1987 there was a reduction of 2 
percent, so do not say this is a provision that has never been applied 
before. It has been applied before. Do not say that this is a system 
Congress has no control over, because the law provides for a review by 
Congress. And if Congress wants to bite the bullet and take action 
before the President does, we can and we should and we will.
  The PRESIDING OFFICER. Who yields time?
  Mr. FRIST. Mr. President, I yield 7 minutes to the Senator from 
Oklahoma.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, first I wish to compliment Senator Frist, 
Dr. Frist from Tennessee, for his leadership on this issue. I think he 
has brought a great deal of experience and expertise on the entire 
health care issue. I compliment him for it.
  I also wish to compliment the Senator from Colorado for this 
amendment. The amendment that we have basically says this reports with 
instructions back to the Finance Committee to make sure that we have a 
lockbox provision to make sure all the savings or changes that we have 
in part B go into the savings in part A so it will help make sure part 
A does not go bankrupt.
  Our colleagues on the other side do not have that in their provision, 
but I think it is a very good, solid provision. It is one the Finance 
Committee adopted. This is kind of a second key on the lockbox to make 
sure that of any of the costs that would be incurred by beneficiaries, 
that 100 percent of those costs go directly into the solvency of part 
A. I think that is an excellent amendment, so I compliment my colleague 
and I urge my colleagues to support this amendment.
  Some people have alluded to the fact, well, we do not really have a 
problem with Medicare. I beg to differ. The trustees report clearly 
states we do. We have seen charts that next year under Medicare we 
start paying out more money than we take in, and that over a 7-year 
period of time the trust fund is totally used up and then they cannot 
pay the bills. That is not acceptable. That is not an alternative that 
is agreeable or acceptable to anyone.
  Some say the $89 billion would solve the problem. It does not solve 
the problem. It does not even come close to 

[[Page S15642]]

solving the problem. If we take the changes that we have proposed in 
the Finance Committee, reiterated by the amendment that we have from 
the Senator from Colorado, we are ensuring the trust fund. We are 
saying we are going to make some changes in part B, as the trustees 
said we should, because the part B trust fund has problems, it is 
running out of money. We take those savings and use that to ensure the 
solvency of part A. That makes sense.
  We are going to keep part A solvent, not just for 2 years but, 
really, for more than 10 years. I think that is an excellent step in 
the right direction. What have we done in the past when we had a 
problem under Medicare? In the past we have had problems. We have had 
reports from the trustees, as was alluded to by some of our colleagues, 
that it is running out of money. What have we done? Every time in the 
past what we have done is we have increased payroll taxes and we have 
had big, big increases in payroll taxes.
  There are only two ways you can solve the Medicare trust fund 
problem. You either increase the money going in--that is paid for by a 
payroll tax. Presently we are paying 1.45 percent; the employee pays 
that. The employer matches that. So it is 2.9 percent of payroll going 
to fund Medicare. That is what we are doing today.
  When we have had problems in the past, how have we financed it? We 
have financed it with a big increase in payment, in taxes. That is what 
the trustees said we are going to have to do. We are going to have to 
have big payroll tax increases to solve the problems in the trust fund 
or we are going to have to reduce the rate of growth of expenditures.
  We elected not to increase taxes. That is unheard of. Because I will 
tell you something--I want to put something in the Record. In the past, 
all Congress has ever done is increased payroll taxes. I just ask a 
question, does anyone know what the maximum tax rate is, if someone 
paid maximum taxes in Medicare in 1978, what the total tax was for them 
and their employer combined? It was $177.
  Do you know what the maximum tax rate was in 1993? It rose a little 
bit. It went from $177 to $3,915. And today it is even more, because we 
took the cap off. So it went from $177 to over $4,000 in a period of 
15, 17 years. There are unbelievable increases in premiums, and that is 
still not enough. It is an unbelievable increase in taxes, and it is 
still not enough.
  So what did we do? We said, let us reduce the rate of growth in 
spending. Some people said, you are cutting $270 billion. We are 
spending, today, $178 billion in Medicare; in the year 2002 we are 
going to spend $286 billion. That is an increase. I am going to put 
into the Record how much Medicare spending is increasing every year. 
Most people said 6.4 percent. I have said that. Actually, it averages 
out right at 7 percent. So I will put this into the Record.
  It is interesting. I went back to see what the President's figures 
were when he revised his budget on June 22, 1995, what the President's 
figures were for Medicare. Guess what? He proposed changes. He uses 
OMB. He uses a different baseline, uses different growth rates, but the 
differences in outlays are minuscule.
  In 1995, he estimates we are going to spend $4 billion less than what 
CBO does. He says 174. In 1996, we estimate we are going to spend 193 
in our proposal; the President says we are going to spend 192--almost 
identical. In 1997, we estimate we are going to spend $207 billion, a 7 
percent increase. The President says we are going to spend $208 
billion. In 1998, there is only $3 billion difference. In 1999, the 
President said we should spend $5 billion more.
  My point being there is very little difference in outlays estimation. 
Granted, the President is using OMB, he is using a rosier scenario, 
forecasting a lower growth rate in Medicare costs, but there is very 
little difference in outlays between what the President is estimating 
we are going to spend in Medicare than what we estimate using the 
Congressional Budget Office. Why did we use the Congressional Budget 
Office? Because that is what we agreed to use. That is what the 
President said he would use when he gave his State of the Union 
Message. He said he was going to use the Congressional Budget Office. 
Now he is not doing it. Now he is not doing it. But we are.

  Mr. President, I am going to ask unanimous consent to have printed in 
the Record the Medicare spending comparisons, both by this budget 
resolution that we have before us and by the President, and tell my 
colleagues that over the 7 years, our plan says we should spend $l.655 
trillion, and the President, over that same period of time, spends 
$l.676 trillion, a minuscule difference in the total spending over that 
period of time, of $21 billion--the difference in outlays between the 
President's budget and our budget granted that he uses OMB and a rosy 
scenario.
  Also, Mr. President, I am going to ask unanimous consent to have 
printed in the Record the growth rates of the maximum amount taxable 
for Medicare, the tax rates, and the maximum amount paid, because it 
will shock our colleagues to find out that in 1978 we were spending 
total taxes of $177, and today the maximum tax is over $4,000. That is 
still not enough. That says we need to reduce the rate of growth in 
this program, not increase taxes.
  I compliment my colleagues for this amendment.
  I yield the floor.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                                                  MEDICARE SPENDING COMPARISONS                                                                                 
                                                                      [Gross mandatory outlays; dollar amounts in billions]                                                                     
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                         7-yr   
                                                                    1995         1996         1997         1998         1999         2000         2001         2002      7-yr total    average  
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Senate Reconciliation.........................................         $178         $193         $207         $220         $234         $250         $267         $286       $1,655  ...........
 Growth over 1995.............................................  ...........          $16          $29          $42          $56          $72          $89         $108         $411  ...........
Percent growth................................................  ...........            9            7            6            6            7            7            7           61          7.0
President II..................................................         $174         $192         $208         $223         $239         $254         $271         $289       $1,676  ...........
Growth over 1995..............................................  ...........          $18          $34          $49          $65          $80          $97         $115         $458  ...........
Percent growth................................................  ...........           10            8            7            7            6            7            7           66          7.5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: CBO & OMB: Provided by Senator Don Nickles, 10/24/95.                                                                                                                                  


 INTENSIVE CARE--MEDICARE TAX RATES AND WAGES SUBJECT TO TAX FOR A SELF-
                  EMPLOYED INDIVIDUAL 1966 THROUGH 1995                 
------------------------------------------------------------------------
                                    Maximum    Contribution             
              Year                  taxable        rate         Amount  
                                     amount      (percent)              
------------------------------------------------------------------------
1966............................       $6,600          0.35       $23.10
1967............................        6,600          0.50        33.00
1968............................        7,800          0.60        46.80
1969............................        7,800          0.60        46.80
1970............................        7,800          0.60        46.80
1971............................        7,800          0.60        46.80
1972............................        9,000          0.60        54.00
1973............................       10,800          1.00       108.00
1974............................       13,200          0.90       118.80
1975............................       14,100          0.90       126.90
1976............................       15,300          0.90       137.70
1977............................       16,500          0.90       148.50
1978............................       17,700          1.00       177.00
1979............................       22,900          1.05       240.45
1980............................       25,900          1.05       271.95
1981............................       29,700          1.30       386.10
1982............................       32,400          1.30       421.20
1983............................       35,700          1.30       464.10
1984............................       37,800          2.60       982.80
1985............................       39,600          2.70     1,069.20
1986............................       42,000          2.90     1,218.00
1987............................       43,800          2.90     1,270.20
1988............................       45,000          2.90     1,305.00
1989............................       48,000          2.90     1,392.00
1990............................       51,300          2.90     1,487.70
1991............................      125,000          2.90     3,625.00
1992............................      130,200          2.90     3,775.80
1993............................      135,000          2.90     3,915.00
1994............................     no limit          2.90    unlimited
1995............................     no limit          2.90    unlimited
                                 ---------------------------------------
  Total taxes paid (1966-93)....  ...........  ............    22,938.70
------------------------------------------------------------------------

  Mr. FRIST. Mr. President, parliamentary inquiry. How much time 
remains?
  The PRESIDING OFFICER. The Senator has 13 minutes and 40 seconds.

[[Page S15643]]

  Mr. FRIST. I yield 7 minutes to the Senator from Wyoming.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. SIMPSON. Mr. President, I too listened with great interest to 
some of the rather vigorous debate, I believe is the phrase. It was 
rather strained a time or two, and almost a little bit hysterical, I 
thought a time or two also, just hearing snatches of it from those on 
the other side of the aisle. It would, indeed, as my good old friend 
from Wyoming has indicated, make you weary. And indeed it will.
  What will make you even more weary is to read once again, which has 
been alluded to many times in this debate, ``The Status of the Social 
Security and Medicare Programs in the United States of America,'' this 
wonderful little yellow pamphlet which has been recommended to all 
Americans for many months now. And I wish I could put it in more 
earthly vernacular, and I could ordinarily, but this forum does limit 
one in that particular dependency, so let us just say that Social 
Security is going to go broke and Medicare is going to go broke. So if 
you want to have another TV ad of somebody smashing into their oatmeal 
with the pitch that the Republicans are doing something horrid, get a 
real picture of someone who is watching Medicare go broke in the year 
2002, where you do not have a ``less'' benefit in the years out; you 
have ``no'' benefit. Try that one on.
  So too even with the hard work we have done here, be of stout heart. 
For medicare will not go broke in the year 2002. It will now go broke 
in the year 2008. So gird your loins, cheer yourselves, and know that 
the draconian activity we have undertaken here on our side of the 
aisle--and we will do it, and we will do it by ourselves--will ``save'' 
it till then. And in a year we will tell the American people what we 
did, and they will be very pleased. This is what we are about.
  I have not heard a single recommendation from the other side of the 
aisle that would do anything, and certainly $89 billion is not going to 
do anything because they did not even talk about part B. How phony can 
you get to come in and talk about you only need $89 billion to save 
Medicare, and leave off part B? How really phony can you get when you 
want to know, ladies and gentleman of America, that part B premiums are 
totally voluntary, they are not part of any Contract With America, and 
they were not part of any contract with senior citizens. In every 
sense, it is an income transfer. It is a welfare program because right 
now the senior citizen who has chosen to accept this is paying 30 
percent of the premium, and the people who maintain this magnificent 
building at night when we are not here are paying 70 percent of the 
premium. I hope somebody will figure that one out.
  So I want to watch the votes. Again, how we are going to handle part 
B premiums when we have this peculiar situation, to say the least, 
where ``Joe Six-Pack'' is paying 70 percent of the premium for somebody 
who is ``Mr. Megabucks.'' If you want to get into this business about 
``the little guy,'' let us get really into this one. This is about the 
little guy, the guy that does not have anything, and he or she is going 
to work every day to pay 70 percent of the premium for everybody in 
Medicare part B. That is absolutely absurd.
  So I am anxious that we do cast some votes in that area. We will 
smoke them out and see who really is for ``the little guy''.
  Then, of course, we will see a unique and remarkable experience. We 
will get there in conference. The President of the United States has 
said that Medicare will not be allowed to go up over 7.1 percent, and 
we are saying we will not let it go up over 6.4 percent.
  Does anybody in America believe we will not get there? There is not a 
single person on the other side of the aisle that does not know the 
President of the United States of America has already recommended that 
Medicare not be allowed to increase over 7.1 percent and not 10.5. We 
all know that. I hope the American people cut through the babble on 
that one.
  We all know the President of the United States has now said we will 
have a 7-year budget instead of a 10-year budget. It is good that he is 
calling it a 7-year budget because his 10-year budget thing was just a 
thing. It was not a budget. So we will address that.
  Now he has admitted that he went too far in raising taxes. I saw a 
fellow get beat on that once in a campaign--two of them, in fact. Now, 
surely, perhaps three.
  So we are ready to go. We will go over the cliff together. We will 
not get a single vote from the other side of the aisle. And between now 
and next October, next election season, we will describe to the 
American people just exactly what we did, how we saved Medicare, how we 
began to get on track again all over the United States, and all over 
the world with our work, with our debt limit, our deficit, our savings 
rate with all of the things that are critical to us, and be a solvent 
country.
  But in the next few days, and weeks, we will be accused of being the 
party that broke all the ketchup bottles over the heads of every child 
in the first grade, threw all the bed pans out of the nursing homes, 
destroyed every possible facility that shelters the homeless, the aged, 
and the infirm. And be ready for that.
  And the charge may be led by the AARP, which is a group of 33 million 
Americans bound closely together by a love of airline discounts, 
automobile discounts, and insurance discounts--one of the biggest 
businesses in America who even have a thing called ``tax advice'' for 
their members. And this is a group that has paid the IRS $135 million 
in back taxes. Boy, I would love to have them giving tax advice! They 
need all the money they can to figure out how to get back $135 million. 
So be ready for it. Dig in. We are going to have a lot of fun. And when 
it is all over, we will have the votes. And when it is really 
completed, the American people are going to be very excited and pleased 
months from now when they figure it all out as to what we did and what 
they on the other side of the aisle did not do.
  Mr. D'AMATO. Mr. President, will the Senator yield for a question?
  The PRESIDING OFFICER. The Senator's time has expired.
  Who yields time?
  Mr. FRIST. Mr. President, I give the Senator from Wyoming an 
additional 2 minutes.
  Mr. D'AMATO. Mr. President, will the Senator comment on--how much? I 
think the Senator previously talked about, how much does the AARP have 
in investments?
  Mr. SIMPSON. They are a ragged lot. They are just a tattered band of 
ragamuffins. They have a building downtown here which could be 
described as ``the Taj Mahal,'' and their lease rental there per year 
is $17 million--$17 million a year on a 20-year lease. They have $314 
million in the bank in T bills. They get $106 million a year from 
Prudential Life Insurance, taking 3 percent of every premium. They get 
premiums and royalties from Scudder on investments, from New York Life, 
from the R.V. insurance. They are a big, big, big business, and they 
also get $86 million from the U.S.A. to run some of their programs on 
top of all that.
  Mr. D'AMATO. I thought it was interesting that they have over $300 
million in Treasury bills that they have invested.
  Mr. SIMPSON. That is true. But they are just struggling along. And we 
want to continue to send our $8 dues to them because my mail is running 
16 to 1 against the AARP, and most of it comes from their own members 
who say, ``I am still going to pay the 8 bucks, but go hit `em a 
lick.'' And I am certainly going to be delighted to do that.
  Mr. FRIST. Mr. President, parliamentary inquiry. Time?
  The PRESIDING OFFICER. Five minutes remain on the Senator's side, no 
time remaining on the other side.
  Mr. FRIST. I would like to yield the remaining 5 minutes to the 
Senator from New York.
  The PRESIDING OFFICER. The Senator from New York has the floor.
  Mr. D'AMATO. Mr. President, I thank the Senator from Tennessee. He 
has done a magnificent job in attempting to combat the demagoguery that 
comes from nothing but partisan politics. And I have to tell you 
something. If it is not the drumbeat of the AARP, which is bad enough, 
scaring seniors, you cannot make a call into my office because they 
have got these poor people absolutely frightened. And I wish to 
apologize to the senior citizens for all 

[[Page S15644]]

of the fright that they have gone through. I think it is a shame. I 
think it is a shame that maybe we have not done a better job of getting 
the message through. I think it is a shame that some people who call 
themselves champions of the underprivileged have engaged in demagoguery 
that has hit new heights.
  Only in Washington can you spend $110 billion more for a program, 
which we will be doing in Medicare over the next 7 years, $110 billion 
more, increasing expenditures at twice the rate of inflation, and call 
that a cut. Only in Washington can you be taking the average recipient 
who gets about $4,800 a year in benefits and almost increasing it by 
$2,000 so they will be getting $6,700 a year and call that a cut. Only 
in Washington can my colleagues on the other side demagog it and get up 
there with the big voice: Oh, we are going to cut; we are going to 
kill, totally negate, forget what is going to take place and come forth 
with not one constructive suggestion as it relates to how you are going 
to keep Medicare from going bankrupt.
  They do not come forth and say anything. No, just spend it and spend 
it and bankrupt us in less than 7 years. There will not be any 
Medicare. Then what happens to the seniors? What do they say? They say 
you are cutting so you can give taxes to the wealthy. Nonsense. Mr. 
President, 70 percent of any tax advantages are going to go to working 
families in America; $141 billion out of the $224 billion that will be 
coming in cuts go just for the $500 per child tax credit-- $141 
billion. That is about 60 percent.
  We hear yelling and screaming about the families, when we do 
something for adoption, when we do something to take care of the 
marriage penalty, when we do something to equalize and strengthen the 
family and give people IRAs, working families, middle class families, 
not millionaires, not businesses, when we say, by the way, that those 
people who have incomes of $150,000 should pay for their own health 
insurance. A retired person with $150,000, by gosh, should pay for it, 
not working middle-class families subsidizing the wealthy.
  That is what we do here. We hear nothing but demagoguery. I cannot 
believe it. I wish to tell you something. You do a great disservice to 
the American people with that kind of rhetoric. I think we will 
demonstrate quite clearly that we are the party that is responsible.
  Here is the President's status of Social Security and Medicare 
Program, a summary. This comes out by the President, his commission. 
Three of his Cabinet officials are there. And I read the first page. It 
says, ``The Federal Hospital Insurance Trust Fund will be able to pay 
benefits for only about 7 years and is severely out of financial 
balance long range.''
  What do our friends on the other side say about correcting that? 
Nothing. And we come forth with a program. They have had months and 
months to work with us. Do they offer any constructive suggestions? No. 
They demagog the issue. They say to people, they are going to cut your 
benefits. That is not true. They say, they are going to cut your 
benefits and give tax breaks to the wealthy. That is not true. They 
say, they are going to give you less. And, indeed, we are increasing 
that program again by $110 billion more.
  Somehow we have to do a better job to get the message out. But that 
does not negate the negativism, the demagoguery, the sheer hypocrisy 
that comes from the other side. I have to tell you something. I make no 
apologies for branding their brand of legislative acumen in that manner 
because that is what it amounts to--sheer demagoguery.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time? There are 25 seconds.
  Mr. DOMENICI. How much time do I have to yield?
  The PRESIDING OFFICER. The Senator has 25 seconds.
  Mr. DOMENICI. Just 25 seconds. Does anybody want 25 seconds on our 
side? Does the majority leader want 25 seconds?
  Mr. DOLE. No. Keep counting.
  Mr. DOMENICI. Let me thank Senator Brown from Colorado for originally 
coming to the floor with this second-degree amendment and helping us 
out. He did a very good job. And for those who spoke the last 2\1/2\ 
hours on our side, I think we have all done a good job.
  The PRESIDING OFFICER. Time has expired.
  Mr. DOMENICI. Now, Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GORTON. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Ms. Snowe). Without objection, it is so 
ordered.
  Who yields time to the Senator from Washington?
  Mr. ABRAHAM. Madam President, the majority leader yields to the 
Senator from Washington such time as he needs off the bill.
  The PRESIDING OFFICER. The Senator may proceed.
  Mr. GORTON. I thank the Senator from Michigan.
  Madam President, we are at the beginning of a debate over the most 
important piece of legislation that this body has considered during the 
course of the last decade. We have before us a proposal which will lead 
the United States to its first balanced budget in 26 years. Yes, Madam 
President, 26 years.
  That proposal includes with it a plan to preserve, to protect, and to 
strengthen Medicare to see to it that the Medicare trust fund or 
hospital insurance does not go bankrupt; fairly to distribute the costs 
of Medicare part B, fees for physicians and for medical care across the 
course of the population; to provide our seniors with a greater degree 
of choice than they have at the present time and the selection of the 
way in which they receive their health care, one which will allow the 
expenses for Medicare to increase in each and every year during the 
time during which we are balancing the budget; a plan, a budget which 
will also ultimately include in it genuine welfare reform, reform of a 
system which has actually made worse the very conditions it was 
designed to alleviate in the first place, a welfare reform which will 
emphasize work, families, and hope for the future; and finally, but not 
at all incidentally, Madam President, tax relief for the hard-working 
American families in the middle class, those who are working and 
contributing to their society, those who are providing for their 
families and for their future.
  Madam President, in the almost 13 years during which I have served in 
this body, we have never previously had an opportunity to do correctly 
and well any one of these things, much less all four of them together.
  It is not as though we were presenting one alternative vision of the 
future and the opponents were presenting another valid, arguable vision 
of the future. We are presenting a plan, an idea, a course of action, 
and the other side is defending the status quo. They do not wish to 
propose an alternative.
  The President of the United States has, in vague and general terms, 
proposed an alternative budget, a budget based not on projections made 
by our Congressional Budget Office, the office the President himself 
said should be the common ground of all proposals on future spending 
and tax policies. No, the President's proposal is based on his own 
figures, taken almost out of thin air, but, nonetheless, it is a 
proposal, Madam President, a proposal which was rejected by a vote of 0 
to 96 in this body earlier this week. The President's party in this 
body does not propose to follow the course of action that the White 
House has outlined.
  It simply proposes to vote no on all of the changes which we have 
advanced in this reconciliation bill.
  But perhaps most significant, I believe, in connection with this 
debate is the estimate, the projection that our Congressional Budget 
Office has made conditioned upon our adopting these spending reforms 
and passing a statute which will lead to a balanced budget even 7 years 
from now in the year 2002.
  The Congressional Budget Office has said that if there is in law a 
realistic and effective set of statutes, which it and independent 
economists can say with a high degree of confidence will balance the 
budget even after the turn of the century, then, in its view, the 

[[Page S15645]]

economy will grow sufficiently to provide an additional $170 billion in 
revenue as a result of a growth of the economy itself and as a result 
of lower inflation and lower interest rates--$170 billion, Madam 
President, for the Government of the United States. But that figure is 
not the total of the benefit to the people of the United States; it is 
only the share of the Federal Government. The total benefit--roughly 
four times that--will approach $1 trillion.
  Where will the balance over that $170 billion be? It will be in the 
pockets of the American people in the form of higher wages, in the form 
of lower interest payments on the homes that they purchase, in the form 
of better jobs because of greater opportunity that the society will 
create. That is the reward--the cautious and conservative reward--that 
this country and its economy and its people can and will receive from a 
balanced budget. That is an argument which has been almost totally 
overlooked in this debate over specific programs and precise benefits, 
tax breaks, and the like, that simply by engaging in this action we 
will provide Americans with a brighter and a better economic future.
  Of course, Madam President, that $170 billion of additional resources 
for the Government of the United States represents, itself, the 
overwhelming bulk of the tax relief which is contained in this 
proposal, and is conditioned upon this proposal becoming law in a way 
that will in fact balance the budget. When you add to that the closure 
of various corporate loopholes, the overwhelming majority of the tax 
reductions have as their source either those loophole closings or the 
fiscal dividend--the $170 billion dividend we get--simply because we 
will have balanced the budget. And it is our firm view that that 
dividend ought to be returned to the American people in the form of 
lower taxes and not retained by the Government for its programs.
  As I said, Madam President, we do not have an alternate vision; we 
have an alternate set of criticisms. No, we cannot do this. No, we dare 
not do that. No, we cannot reduce that program and, above all, we do 
not dare reduce taxes on the American people. That alternative course 
of action is one which says, essentially, that the status quo is the 
best we can do; that whatever we have done in the past, we ought to 
continue to do in the future; that we can afford to ignore almost 
completely, but not quite, all of the challenges and problems of the 
most rapidly growing of our major entitlements--Medicare; that we can 
and should continue to say that the overwhelming bulk of the cost of 
Medicare should be paid by today's working people, even when that means 
that hard-working, middle-income Americans are paying for more than 
two-thirds, almost three-quarters, of the health expenses of wealthy, 
retired Americans--millionaire retired Americans. No, we cannot make 
these reforms. We should not make any changes. Everything that Congress 
has done in the past, all of the programs it has passed in the past 
should and must be continued.
  Well, Madam President, I must say that the choices are relatively 
easy choices. With all of the difficulties and with all the changes in 
direction, with all of the groups with genuine or imagined concerns, we 
have a plan, we have a vision that will lead to a stronger America. Our 
opponents do not. It is time for us to move ahead, to do what we 
committed ourselves to do during the course of last year's election 
campaigns--to pass this proposal, to settle our differences with the 
House, and then, from a position of strength, to persuade the President 
to keep the commitments that he has made at one time or another, which, 
of course, included all of these elements--a reform in our Medicare 
system, a balanced budget, changing welfare as we know it, and a tax 
cut for middle-income Americans.
  Every one of these four elements in our program is something that the 
President of the United States has promised or committed to at some 
time in the past and has since, to a greater or lesser degree, 
repudiated. We want to keep our commitments; we want to keep his 
commitments. The only way we can do so is by passing this 
reconciliation bill.
  Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. ABRAHAM. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ABRAHAM. Madam President, I yield myself such time as needed.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ABRAHAM. We have heard today a number of arguments made on each 
side relative to the topic of the tax cut provisions in this 
legislation, and I think it is important for the American people to 
understand the clear distinction that exists on the two sides of the 
aisle over the issue of taxes.
  Today, the Republican tax cuts that are part of this legislation have 
been described as tax cuts for wealthy Americans. They have been 
described as unfair. They have been described as unneeded. They have 
been described in a variety of other ways.
  I think it is important before we analyze those tax cuts and who they 
really benefit, to begin by just stepping back from today and looking 
at some of the things that have transpired here in Congress in recent 
years. I find it interesting that the people who are on this floor 
attacking the tax cut provisions of this legislation are the very same 
people who just in the last Congress voted to raise the taxes of 
working Americans by $270 billion, the largest tax increase in history.
  Indeed, it is very simple, I think, to differentiate between the 
parties and their positions on taxes. There is one party, the 
Republican Party, that is presenting Americans today with middle-class 
tax cuts; there is another party that in the last Congress raised taxes 
a record level of $270 billion.
  I think that the opposition to the Republican tax cuts that are 
proposed in this legislation should not surprise anyone. It is coming 
from the people who already raised our taxes by a record amount, and 
who would hate to see those taxes go down at all.
  The fact of the matter is, Madam President, that taxes represent the 
hard work of people in this country who are out playing by the rules. 
In my State of Michigan they are doing the things we need to keep our 
economy strong. They are average men and women whose income, at least 
in my State, for a family is about $32,000. They work hard for those 
dollars.
  Some time ago in the 1950's and 1960's, those average families in 
Michigan like my own sent $1 to Washington for every $50 they earned; 
today that average family in Michigan spends $1 in Washington for every 
$4 it earns.
  In part, I came here to the U.S. Senate and ran for this office so 
that families who are sending too many of their dollars to Washington 
would get a chance to keep more of what they earn.
  We talk a lot today, and we have seen charts in the Senate over the 
last few months in which we talk about the problems of the so-called 
middle-class squeeze, the economic pressure on hard-working average 
middle-class families in our country to make ends meet.
  We are often told it is so unfortunate today that it is now necessary 
often for two people in the household to work in order to be able to 
attain the same economic conditions that used to be available to 
middle-class families with only one person out there in the work force.
  A lot of speculation goes on in the U.S. Senate as to why it is; why 
is that middle-class squeeze happening? Why is it that two people have 
to work to make ends meet?
  A big part of the answer, Madam President, is the taxes have gone up 
so dramatically during the last 30 to 40 years in this country, and 
dramatically in just the last 2 years alone.
  The fact is if the average family in Michigan was still sending $1 in 
Washington for every $50 it earned, the financial security of those 
families would be a lot greater today. The combination of paying higher 
taxes and paying higher interest rates on all the sorts of things that 
people in my State have to pay interest on, whether it is a mortgage 
for a home or interest on a car payment or interest with regard to 
consumer items or interest on student loans, if those interest rates 
were lower, people in my State would be better off as well. But they 
are not low.
  One reason they are not low is because the Federal Government has not 


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balanced its budget in the last quarter of a century. As we run up red 
ink in Washington, as the Federal Government is forced to borrow money 
from lending institutions, from individuals, from whomever, we have 
driven up interest rates.
  The middle-class families find themselves in two separate ways 
dramatically affected by the policies here in Washington. On the one 
hand, it does not get to keep as many dollars as it earns because it 
has to send more dollars to Washington in taxes; and then with those 
fewer dollars that remain it has to pay more in the way of interest 
because Government policies have helped to drive up interest rates, 
because we cannot live here in Washington within our means.
  That is why in this legislation we are trying to correct the two 
problems that afflict those middle-class families.
  On the one hand, we are trying to give middle-class families the kind 
of Federal Government fiscal responsibility they have to exercise in 
their own homes. What we are trying to do is to bring about ultimately 
at the end of 7 years the balanced budget that has eluded us here in 
Washington for a quarter of a century.
  As we bring down the deficit and as we maintain a balanced budget, 
and as we maintain a balanced budget after the year 2002, the impact of 
that will be a dramatic effect on middle-class families, because as we 
bring down the deficit, as we recognize in our own CBO reports here, 
interest rates that the Federal Government has to pay will go down.
  That will save money for the Federal Government. It also will mean 
that interest rates in the private sector go down. It means the 
interest that people who are watching today and hearing all these 
frightening stories, as they go out into the housing market, as they go 
out to buy a car for the family, as they go out to make other purchases 
that are affected by interest rates, they will find their interest 
rates, just like the Federal Government interest rates that they have 
to pay, will be coming down, which will make items more affordable.
  That is one reason we are trying to bring this budget into balance. 
At the same time, we are trying to address the other problem that 
affects average American families, the problem of sending too many 
dollars to Washington. That, of course, leads us to the issue of our 
tax cut.
  There have been many, many descriptions of the tax cut. The tax cut 
was being described before it was ever even talked about in the Senate, 
before it was addressed, before anybody put a pen to paper to try to 
draft a tax cut. It was always described the same way it is being 
described today, as a tax cut principally desired by Republicans to be 
given to the wealthiest of Americans.
  I was astonished when the other day in our Budget Committee meeting 
when we finally passed the reconciliation package to the floor, to hear 
talk that over half--over half--of those benefits from the tax cut were 
going to go to the wealthiest families in America.
  That was not the tax cut I had heard about. It was not the way I had 
seen it described. I had even read the Washington Post in which the 
Washington Post described the tax cut as ``family friendly.''
  I went out and asked for statistics and I was presented with the 
Joint Committee on Taxation's specific results of their analysis. Here 
is what I found: In the first year of this tax cut, 90 percent of the 
tax cut goes to those making under $100,000 in the first year; 77 
percent of the proposal's tax cuts go to those making under $75,000 in 
that first year. Less than 1 percent of the proposal's tax cuts will go 
to those making over $200,000 in the first year. Over four-fifths, 84 
percent of the proposal's tax cuts go to those making under $100,000 in 
the first 5 years. And 70 percent of the proposal's tax cuts go to 
those making under $75,000 in those first 5 years. Less than 6 percent 
of the proposal's tax cuts will go to those making over $200,000 in the 
first 5 years.
  That is a completely different set of statistics than the ones 
presented to us at the Budget Committee. It is not the case that over 
half of the tax cuts are going to people making over $100,000, quite 
the contrary.
  This is a family friendly tax cut. It is designed to address the 
second problem I earlier mentioned, the problem that middle-class 
families have had, the squeeze that has been put upon them because they 
have had to send too many dollars to Washington.
  I did not want to just leave it at the Joint Tax Committee's numbers. 
Now, we had competing sets of statistics so I thought the next and most 
important thing I could do would be to look at the specific components 
of the tax cut to see which of the two versions was accurate. What I 
discovered was that, of course, the Joint Tax Committee's version, 
their statistics, are right on the mark.
  Let us tell the American people some of the things that comprise this 
tax bill.
  First, it provides a $500 per child tax credit for American families. 
That constitutes $141 billion of the $225 billion in tax relief under 
this bill, over 62 percent.
  Some say for some of those children, they are part of families that 
make lots of money. That may be true. But, of course, this tax bill has 
been limited in its scope. Indeed, the $500 per child tax credit begins 
to be phased out, in the case of families with a single head of 
household at $75,000, in the case of a couple at $110,000. So, unless 
people between $100,000 and $110,000 have a vastly disproportionate 
number of children, the argument that many of the tax breaks from the 
family tax credit are going to go to wealthy people, as defined by some 
people here in Washington, just is simply not the case. Of course it is 
not the case.
  Madam President, $141 billion, 62 percent of the tax cut, is the 
family tax credit, $500 per child, letting families keep $500 per child 
to spend, to try to make ends meet to provide those children with a 
better way of life.
  Another important part of our tax credit in the family tax relief 
section is an adoption credit. That accounts for almost $2 billion of 
this tax cut. It is a nonrefundable tax credit allowing for the 
exclusion of up to $5,000 in adoption costs. The credit phases out. 
This is important. It phases out between the taxable income levels of 
$60,000 and $100,000 for both individuals and couples. In other words, 
not $1 of the adoption credit, the $2 billion of tax cuts that form the 
basis for that tax relief, will go to anybody making more than 
$100,000. Indeed, again, it is aimed at helping people in this country, 
middle-income categories, to be able to expedite the adoption of 
children, to provide children with loving homes and a few of the 
dollars necessary to make it possible for those adoptions to be carried 
out in a way that provides children with a better chance for their 
future.
  The next part of it, another family-related tax section, is $12.3 
billion to try to provide relief from the marriage penalty that we 
impose under our Tax Code. Maybe some people who make more than 
$100,000 will benefit from the elimination of the marriage penalty, but 
I hardly think anybody wants to come to the floor of the U.S. Senate 
and argue we should not eliminate this marriage penalty. It makes no 
sense for us to have ever done it in the first place.
  Another part of our family tax relief is student loan interest 
deduction. That is another $1 billion. Once again, it is limited in 
scope to people who have adjusted gross incomes of between $40,000 and 
$55,000 for singles and between $60,000 and $75,000 for married 
couples. After that, this deduction is not available. Again, a 
deduction aimed at helping people of moderate means to try to better 
and more easily finance college educations.
  On and on I went through this tax program. What I discovered was that 
in almost every section, the entire focus has been to try to provide 
middle-class families with tax relief, to try to let people keep more 
of what they earned, to try to allow families in this country to offset 
some of the hardships that come about when the Federal Government 
consumes too many of their dollars.
  That does not mean that every part of the bill primarily benefits 
people of middle-income backgrounds. Yes, there are sections aimed at 
trying to create growth in our economy, that disproportionately benefit 
people and, to some extent corporations, people of greater means and 
corporations. Interestingly, though, a very substantial percentage 

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of the benefits of those pro growth tax reductions and tax cuts go to 
the benefit of average working families in this country because, as we 
unleash the benefits of some of these growth-oriented tax cuts, what 
will it produce? It will produce more jobs, better paying jobs. As 
companies expand and grow, we will hire more people, we will provide 
more opportunities for Americans.
  Remember this, too, Madam President, a great number of the people who 
benefit from capital gains tax cuts are families who are selling the 
family home, who are selling other capital assets, who own or are part 
of pension programs that invest in stocks and corporations and 
ultimately realize capital gains.
  Moreover--and I think it is important to note--this bill does not 
have simply an up side for those in these wealthy categories or for 
corporations, because we are also closing a substantial number of tax 
loopholes. In fact, the closing of loopholes largely offsets the tax 
advantages that are provided to corporations and upper-income 
individuals under this bill.
  In short, we are paying for most of the benefits derived by those 
individuals by the closing of these loopholes. In short, once again, 
this tax cut bill is designed to aid families in the middle class above 
all other families in this country.
  For those reasons, I intend to come to the floor again as may be 
necessary to keep reminding our colleagues exactly who the 
beneficiaries of this tax cut are. It is simply, as you analyze the 
data as to where the tax cuts go and how specifically the tax cuts have 
been developed, you realize once again that the claims that our tax cut 
is designed to help so-called wealthy people simply miss the point. It 
is a tax bill designed to help middle-income families to address a 
problem that has been growing in this country for the last 40 years, 
the problem of the Federal Government getting too big, consuming too 
many resources, making it much more difficult for average families to 
make ends meet. By balancing the budget and thereby bringing down 
interest rates, by giving families tax cuts, we can try to help 
alleviate the middle class squeeze. That is what we are trying to 
accomplish in no small measure with this legislation.
  At this time, I yield the floor.
  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER. Who yields time to the Senator from Iowa?
  Mr. ABRAHAM. I yield to the Senator from Iowa such time as he may 
need off the bill.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Madam President, first of all, I thank the Senator from 
Michigan for an outstanding review of all of the various profamily, 
progrowth tax measures that are in this bill. This tax bill is a 
memorial to the proposition that we believe taxpayers' money comes to 
the Treasury for legitimate Government purposes, and the expenditure 
for those purposes and not one more penny should come from the pockets 
of the taxpayers. When we give this tax cut this year, we are just 
giving people back money that was ruthlessly taken from them in the 
last Congress by the President's budget.
  We give it back in the way of helping middle-class working families 
who pay the bulk of the taxes in this country. We do it in a way that 
says that the foundation of our society is families and that we want to 
encourage the family as an institution. That is why three-quarters of 
the tax cuts in this bill go to families, primarily through the $500 
per child tax credit. That is a tax credit that is off the bottom line 
of taxes otherwise owed to the Federal Treasury.
  Whereas, the Senator from Michigan gave a very good explanation of 
what is in the tax provision, I want to speak about our efforts to 
balance the budget, our efforts to reduce the role of Government in our 
economy by reducing the size of the budget, by reducing the percentage 
of the budget to the gross national product over time, meaning a 
lessening of the amount of money that is run through the inefficient 
operation of the Federal budget, because we believe that the free 
market, the segment of the economy out there that comes from the 
private sector, the nonpublic part of our budget, is the most efficient 
distributor of goods and services, where the jobs are created, where we 
have efficiency within our economy.
  Getting to a balanced budget sets a very, very good starting point 
for the reduction of interest rates. And it is projected that interest 
rates will go down 1.5 to 2 percent if we pass this year a budget that 
will balance by the year 2002. And we are gradually and responsibly 
reducing expenditures to get to that point that interest rates will go 
down. In fact, we started to reduce Government expenditures with a 
rescissions bill of $14 billion for fiscal year 1995, just completed.
  By reducing interest rates, we are setting the stage, then, for 
growing the economy, for creating jobs and expanding, as we must be. 
There is so much of the job creation which comes from the private 
sector and the small business sector of the private sector that with 
interest rates going down, it is really going to encourage small 
businesses to create more jobs. They are the engine. Small business is 
the engine that drives our economy.
  Getting to this point has been about a 10-month process. Remember, 
just 12 months ago there was a Republican program called the contract 
that had 10 features in it that was in a sense a national program. When 
normally we have 435 different races for Congress and campaigns for 
Congress, the Republican Party had one national campaign. And the 
centerpiece of that national campaign was to deliver a balanced budget. 
Twelve months ago we may not have foreseen a Republican victory the 
size that it was, we may not have foreseen the people's response to the 
program, but that program called for a balanced budget.
  We took control of both Houses of Congress in January for the first 
time in 40 years. In a sense, when we took over in January we 
transformed our contract into New Year's resolutions with the American 
people. We said that we are going to put this bloated Government on a 
diet. Then for the last 10 months, we have been following a regime to 
achieve our resolution.
  What happens in the Senate on Wednesday, Thursday, and Friday of this 
week, as far as delivering upon one of the major promises of the last 
campaign--to balance the budget, to reduce taxes, and to reduce taxes 
that are paid for by cutting spending--that is all of that 10 months of 
work. Everything that the people have been expecting since they voted 
12 months ago for a new Congress is coming to an end on Wednesday, 
Thursday, and Friday. What decides whether or not we are successful is 
if we have 50 votes to pass this reconciliation bill. We Republicans 
then have been following a regime to achieve our resolution that we 
started on last January.
  The other side of the aisle, meaning my Democratic friends, have been 
carping with neither shame nor credibility. They have no credible 
alternatives. Oh, the President said in June, after 6 months of finally 
waking up to what the people decided in the last election, that he was 
for a balanced budget, not in 7 years as the Republicans planned but in 
10 years. But when the Congressional Budget Office, the nonpartisan 
Congressional Budget Office, looks at the President's program to 
balance a budget in 10 years, they do not find a budget balance in 10 
years. They still find $200 billion deficits as far as you can see into 
the future.
  That is no different than the President's program of 1993, which he 
claims has reduced deficits more than in any other 3-year period than 
any other President ever had. But the point is the President's program 
of 1993 still saw beyond the year 1997 $200 billion deficits as far as 
the eye can see. Two years later, in June 1995, the President says he 
is for a balanced budget by 2005. But when you score it the same way we 
score our budgets, it is still the same old story--unbalanced budgets 
as far as you can see into the future.
  Maybe I should not say the other side has no alternative, because the 
President did say the budget ought to be balanced. He did not send up a 
program to do it. He just said that is something that he is for. But 
never before was he for a balanced budget. Then later on he said, well, 
maybe it can be done in 9 years. Then I believe it was just last week, 
or near to now, he said he could agree with the Republicans, that it 
ought to be done in 7 years and can be done in 7 years.

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  But for the most part, all we have heard from the opposition is 
naysayers. This diet that we Republicans want to put the Federal 
bureaucracy on, the other side has been saying no to, naysayers. It is 
kind of like those little voices that you hear in your head when each 
of us say that we ought to go on a diet, or we are going to go on a 
diet. That little voice in our head says, ``I cannot do this. I cannot 
do this.'' That little voice says, ``Let us wait until manana.'' Or it 
says, ``I do not feel like doing anything today, do it tomorrow. Maybe 
tomorrow I will start, I will start my diet.'' Then you hear those 
little voices with millions of excuses why you cannot go on a diet.
  The Republican program is putting the Federal bureaucracy and Federal 
programs on a diet. It is being downsized. That is the essence of our 
reconciliation bill before us. The other side, without shame or 
credibility, are naysayers to this process.
  Madam President, sometimes to achieve the best results we ought to 
tune out those little voices, not listen to those little voices in our 
head who say, ``I cannot do this,'' or, ``I will do it tomorrow,'' or 
any of those other million excuses that we hear. Tune out those little 
voices.
  So that is why I speak to my colleagues, particularly my colleagues 
on the other side of the aisle, because this is a very important debate 
about turning things around and no longer business as usual when it 
comes to the fiscal policy of the Federal Government because business 
as usual has been for 30 years, do not be concerned about a balanced 
budget. Or maybe I can say the last 10 years, be concerned about a 
balanced budget, but not really doing anything about it. That is 
business as usual.
  The people in the last election sent us a clear signal that they no 
longer want business as usual in Washington. And the reconciliation 
bill up for debate on Wednesday, Thursday, and Friday for 20 hours of 
debate in this body, and then hence to final passage, is our statement 
of no longer business as usual, that we are going to deliver on the 
promises of the last election. For once, Congress is going to perform 
according to the rhetoric of the last campaign. Our performance will be 
commensurate with what we said in the last election. And the essence of 
that is our Government programs and our bureaucracy must go on a diet.

  And so during this debate then, just tune out those little voices 
that say, ``I can't do this. I can't go on a diet.'' Because we will. 
We must. And we sense the responsibility not only because it 
philosophically comports with what we feel Government must do, but it 
is also a behavioral change that comes from the large voice of the 
electorate that spoke in the last election.
  This very important debate can be summed up in just one word. That 
one word is six letters, future, f-u-t-u-r-e. This budget plans for the 
future; this budget provides for the future; and by so doing gives our 
children and our grandchildren a future, the sort of future that we 
have a responsibility to leave them. It is not a responsibility that we 
judge our own. It is a responsibility that we have inherited from past 
generations of Americans who have given my generation and younger 
generations a great country to live in, a better future than our 
ancestors had and the generation that preceded it.
  That would not be possible, Madam President, without providing a 
balanced budget and the secure future that it allows. In effect, it is 
a necessary forerunner to a guaranteed future as we know it and better 
for our younger generations.
  This budget provides a positive vision for our country's future, a 
future in which we have a balanced budget that will help increase 
productivity, lower interest rates, create more jobs and, most 
importantly, lessen the tax burden we are placing on today's children.
  Let us be clear. We talk about fiscal policy. We talk about doing 
economic good. We talk about a secure future in materialistic terms. 
But this is not just a debate about material betterment. It is not a 
debate about abstract fiscal policy or economic issues. This is more a 
moral issue than anything else.
  The Republican Party simply believes it is not right for our 
generation to live high on the hog and to pass the bills on to the next 
generation of young people. We are saying that finally Congress 
realizes that is just not right. That is what we said in the last 
election. We did not know when we said it that people would respond 
positively to it. But the voters did respond positively to it by the 
biggest shakeup in Congress since the 1930 election. That 1930 election 
turned things around politically so much in Congress and Washington, 
DC, that there has not been a change from that direction until now.
  Now, whether there was a whole new political environment ushered in 
by the election in 1994, I do not know for sure. I suppose the 1996 and 
1998 elections will answer that question for me. But I do know this, 
that we got the message of the last election. We are responding to it. 
And we are passing a budget that is balanced based upon the fact that 
it is immoral for us to go in the hole, to deficit spend and not care 
who pays the bill while we live good and live well.
  While we are worried about what the 1996 election or the 1998 
election might mean for securing a long-term political change in 
Washington, DC, we have the responsibility to do what the voters asked 
us to do in the last election. So this budget states that we believe 
Americans know how to spend their hard-earned dollars better than 
bureaucrats as we decrease the size of Government as a proportion of 
the gross national product, as we reduce the number of Government 
employees, as we reduce and eliminate deficits by the year 2002. We 
show our faith in the American people by giving back to them $224 
billion of their hard-earned tax dollars for them to decide how to 
spend for their future because we believe it will be more efficiently 
spent by them than by Government.
  Finally, this budget ensures that the future of our seniors and the 
baby boomers who will soon be retiring is secure because we preserve 
Medicare in this budget and we ensure that it does not go bankrupt. 
Republicans have offered a comprehensive vision of the future. We have 
kept the promise of the last election. If we pass this resolution in 
the next 2 days, we have kept our New Year's resolution to the voters 
to put Government on a diet. We have not listened to those little 
voices in the minds who say, ``I can't go on this diet. I can't do this 
today. I will do it tomorrow.'' We have listened to the loud voice of 
the electorate.
  Now, incredibly, I have heard the President claim that the Republican 
balanced budget would mortgage our future--would mortgage our future. 
Can you imagine the nerve of the President saying the Republican 
balanced budget will mortgage our future when we have been mortgaging 
our future for the last 30 years because it was 1969--not quite 30 
years, 26 years--since we have had a balanced budget. He did not say 
that out of ignorance because the President is a very intelligent 
person. I do not know really why he said it. I would like to know why. 
It seems to me that it could be part of a program to muddy the waters.
  It is clear to the people what is going on up here on the Hill 
because this budget, this reconciliation bill before us, does not 
mortgage the future. The failed policies of the big spenders have 
already done that. We Republicans, with this balanced budget 
resolution, are successfully ridding ourselves of the deficit, the so-
called mortgage that is on our future, so that we can have a bright 
future for our young people.
  Unfortunately, the Democratic side offers nothing for the future. It 
seems the White House is happy to have a growing deficit that continues 
to mortgage our future. The White House, by not cooperating with 
Congress to balance the budget, is sending a clear message that they 
want in essence to take out a second mortgage to fund increased 
spending instead of doing the responsible thing of balancing the 
budget.
  The White House policy will have our children and grandchildren 
continuing to pay not only the first mortgage but the second mortgage.
  I guess, Mr. President, the essence is that the other side of the 
aisle has no New Year's resolution. They can only offer working 
families more of the same. They do not even want to sit down at the 
table with us to negotiate. Right after our summer recess in August, we 
returned after Labor Day, the President was invited to the Hill--not to 
the Hill, wherever the President 

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wants to sit down with Republican leadership to talk compromise, work 
out differences. The President then would have to put his wares on the 
table for the whole world to see. Evidently, he was not ready to do 
that. No response.
  October 1 comes, the end of the fiscal year. We have to move forward. 
We moved the time ahead to November the 13th, but we could not wait any 
longer to fulfill the constitutional responsibilities that the Congress 
has to provide a budget; and implicit in our Constitution, a balanced 
budget, because we have had more balanced budgets in peacetime than we 
have deficits throughout the history of our country.
  Just last Thursday, the Speaker of the House and the Senate majority 
leader offered the President to sit down and talk. No response. So we 
move forward. I think this can be resolved. But it cannot be resolved 
by the other side having no program and at the same time carping and 
criticizing what the majority is doing. More of these same policies are 
going to bankrupt Medicare.
  This bill before us solves that problem, as the trustees, the 
Democrat trustees, asked us to do on April 2. Not the President's 
proposal, it is going to provide for more out-of-control spending, with 
$200 billion deficits that will destroy our children's futures because 
that is what the President's 10-year balanced budget program--even 
though he did not give us specifics--would provide. That is not my 
determination. That is the determination of the nonpartisan 
Congressional Budget Office. And you know in this proposal it is going 
to still continue to give us more taxes, more taxes, and more taxes. 
And if there are not more taxes this day, because the President may not 
be proposing to change tax policy--he did it with the biggest tax 
increase in the history of the country in 1993--for the young people of 
America it is going to mean into the next century tax increases of 80-
some percent because of irresponsible spending today.
  So I think it is clear which New Year's resolution the American 
people want us to keep. It is the one of promising a future for our 
young people, a future for our country, a future for the world, as this 
engine of the United States, this economic engine of the United States, 
drives the rest of the world.
  We have that opportunity to fulfill that promise for our future 
generations by adopting this resolution and to avoid being influenced 
by the carping from the other side of the aisle and from the White 
House that has no program to reach the goals that we do.
  I yield the floor.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER (Mr. Kyl). The Senator from Nebraska.
  Mr. EXON. Mr. President, I am pleased to yield 5 minutes to the 
Senator from Arkansas and, following that 5 minutes, to the Senator 
from Alabama from our time.
  The PRESIDING OFFICER. The Senator from Arkansas is recognized.
  Mr. BUMPERS. Mr. President, we have now been on this bill 6 hours--
let us see, I believe a little over 6 hours, 6 hours, 30 minutes, and 
we have yet to vote. We only have 20 hours on the entire bill. And my 
question is this: This bill, which everybody on the other side of the 
aisle is so proud of, why do you not want to let us offer the 
amendments and let you defend it?
  That is all we want. If you are so proud of that tax cut, let us 
offer an amendment to make that tax cut refundable for the people who 
really need it. You call it a middle-class tax cut. That does not even 
stand the giggle test. A family with four children, making $20,000 a 
year, probably pays no income tax. And they do not get the $500 per 
child tax credit. They get nothing. The $500 credit is only available 
if you pay $500 in income tax.
  Contrast that situation with this: A man and wife with one child, and 
they pay, we will say, $500 in taxes. Under the Republican budget, they 
will get that $500 back through the child tax credit. But if you happen 
to have a house full of kids, your dependent exemptions will probably 
result in you paying no income taxes, so you will not be eligible for 
the same credit wealthier families get. That is a middle-class tax cut? 
We all know now that 49.5 percent of the people in this country make 
less than $30,000 a year. What do they get out of this middle-class tax 
cut? They get a tax increase, 50 percent of the people in this country 
are going to wind up paying more.
  Now, I will never forget in 1981 when Ronald Reagan came to town on 
the promise he was going to balance the budget, and I was hot for him. 
I am one of three Senators in the U.S. Senate--I want to cleanse my 
skirts--who voted for every one of President Reagan's spending cuts, 
but I voted against that massive tax cut. If everybody had voted the 
way Fritz Hollings, Bill Bradley and Dale Bumpers voted, we would have 
had a balanced budget. But, no, we had to give the store away. General 
Electric made----
  Mr. INHOFE. Will the Senator yield?
  Mr. BUMPERS. No.
  General Electric made $3.7 billion in 1983 and got a $700 million tax 
cut. That was all $3 trillion ago, $3 trillion from the promise of a 
balanced budget. In only 8 years, our $1 trillion debt went to $3 
trillion. You talk about snake oil.
  So what are we doing here? Are we going to pass an amendment that 
says the tax cut cannot come out of the Social Security trust fund? If 
you want to balance the budget, forget the tax cut. CBO says that 
without the tax cut we can balance the budget in the year 2001, a year 
earlier than under this budget. How is the tax cut being paid for? Out 
of Medicare, out of school lunches, out of Social Security, out of 
student loans, out of the earned income tax credit, out of agricultural 
programs. It does not make any difference which spending cut you say is 
the source of the tax cut. It does not matter.
  What matters is that we are giving away $220 billion to $240 billion 
in taxes that ought to go on the deficit or, at a minimum, be placed 
back in those programs like school lunches and Head Start and student 
loans and things that give people at the bottom of the ladder a 
fighting chance to become somebody.
  I got that chance when I went to one of the best law schools in the 
country on the GI bill, and I have been trying to pay it back ever 
since by reaching from the top of the ladder down to people on the 
bottom rung and bringing them up, because I think that makes me better 
and it makes our country stronger.
  I consider this 2,000-page monstrosity of a bill, that must weigh at 
least 10 pounds, I consider it one of the worst disasters to befall 
this institution called Congress. You think of it--penalizing the 
elderly, penalizing poor children, penalizing the most vulnerable among 
us while we give away 76 percent of the capital gains tax cut to the 
wealthiest people in America. Meanwhile, we continue to sell lands for 
$100 an acre when the mineral rights are worth thousands of dollars an 
acre. So the StillWater Mining Co. in Montana will pay $200,000 for a 
plot of land worth $38 billion in platinum and palladium. We are giving 
away taxpayers' property while we penalize the most vulnerable among 
us.
  Thank you, Mr. President.
  The PRESIDING OFFICER. The Senator from Alabama is recognized for 5 
minutes.
  Mr. HEFLIN. Mr. President, the Senate will soon be faced with an up-
or-down vote on proposals of mammoth proportions. These proposals will 
directly affect virtually every segment of the government and every 
citizen of this country. For some, the consequences will be positive. 
For the vast majority, however, the consequences will be bad--in some 
cases, like for the elderly, students, and working class, the effects 
will be economically devastating.
  While this package as written will significantly reduce the deficit, 
at least in the short term, there is considerable doubt as to whether 
or not it will ultimately balance the budget by 2002. Some of the 
savings are artificial or even lose money despite producing CBO-scored 
savings. As we all know, future congressional action is likely to 
reduce other savings currently assumed by this plan. A major portion of 
the projected savings in this plan come from Medicare and Medicaid. 
Welfare reform, nutrition programs, the earned income tax credit, farm 
programs, and student loans are other areas facing enormous cuts.
  I am strongly in favor of deficit reduction and, ultimately, the 
elimination of the national debt. I have long supported a balanced 
budget amendment to the Constitution. I supported 

[[Page S15650]]

the 1993 reconciliation bill which has already led to significant 
reductions in our annual deficits. But as with any omnibus legislation 
of this type, there is a right and wrong way to pursue the same goal. 
Themes and patterns emerge. Priorities and process do matter, and it 
appears that on balance, the priorities in the package before us are 
seriously misguided.
  What our colleagues on the other side are attempting is to place a 
vastly disproportionate share of the pain which will inevitable result 
from cuts of this magnitude on those least able to absorb it--working 
people, the elderly, students. There is a bitter flavor that this 
package produces, and you do not have to bite off and chew on its 
details to taste its bitterness. Its basic ingredients were listed in 
the blue-print the Senate passed several months ago, but as they have 
been mixed together and as they have simmered in the context of this 
reconciliation package, they have become dramatically more bitter.
  The theme throughout is to benefit those who have already benefitted 
greatly in this society, and to punish those who are simply trying to 
get by or to realize a share of the American dream.
  I have several major concerns surrounding this legislation, but the 
most disturbing are the cuts in Medicare and Medicaid. The plan is to 
cut Medicare growth by $270 billion over 7 years. In addition to 
slowing the growth of spending from 10 percent a year to about 6.4 
percent, it mandates a major restructuring of the program to supposedly 
give Medicare enrollees a wide range of options to join private health 
plans. I am concerned that instead of options, however, senior citizens 
will instead be faced with fewer alternatives, and will be forced into 
certain plans because they have no choice.
  It is my understanding that $89 billion in savings would rescue the 
Medicare Program, but we are considering a bill which cuts it by $270 
billion. The proposed $270 billion of savings is vastly more than is 
needed to preserve the solvency of the program. Therefore, we need 
honest answers as to why we are attempting to write into law a $270 
billion reduction.
  The direction we are going will ultimately cause senior citizens to 
be charged more for health care while receiving less in Medicare, all 
the while financing a tax break for those in the upper income brackets.
  A great portion of the savings in Medicare would result by raising 
the part B premium. The premiums that our senior citizens pay would 
rise from the $46.10 per month to more than $90 by the Year 2002.
  I have reservations and misgivings with regard to any Medicare reform 
that threatens the access to, and quality of, health care for senior 
citizens. Specifically, this bill would cut inpatient hospital service, 
home health care services, extended care services, hospice care, 
physicians services, outpatient hospital services, diagnostic tests, 
and other important services to our senior citizens.
  In addition to reduction in services, the following immediate burdens 
would be placed on our senior citizens: For Fiscal Year 1996, the 
monthly premium would rise to $54. Participants in the part B program 
would be required to pay the first $150 of expenses out-of-pocket 
rather than the current $100 deductible. This would rise by $10 
annually through the year 2002. All these in combination with the 
proposal to raise the eligibility age to 67 leads me to believe that 
seniors are being singled out to bear the brunt of budget cuts.
  We all realize that the Medicare Program cannot continue functioning 
indefinitely as it is now, but the cure is certainly not the Republican 
plan.
  Not only do these proposals cut Medicare, but Medicaid is being 
reduced by $187 billion over the next 7 years. For the past 30 years, 
the Medicaid Program has been America's health and long-term care 
safety net. The Republican proposal is to repeal Medicaid, slash its 
Federal funding over the next 7 years by 20 percent, and to turn 
remaining Federal funds over to the States in the form of a block 
grant. According to the American Health Care Association, in 1993, 43 
percent of the cost of Medicaid payments was born by the States. Under 
the block grant proposal, by 2002, the state share would be 56 
percent--a 13-percent increase in just 7 short years. In a State like 
Alabama, which is habitually faced with budget proration, the effects 
of such additional burdens will be huge and devastating.
  The National Association of Counties strongly opposes the block 
granting of Medicaid and the loss of a Federal guarantee to benefits. 
In a letter sent to my office yesterday, its executive director, Larry 
E. Naake, wrote,

       We do not believe that states will find enough budgetary 
     efficiencies without reducing eligibility . . . Individuals 
     will continue to have health needs, regardless of the payor 
     source. That is why we have always supported the 
     intergovernmental nature of the Medicaid program and the 
     assurance that there is some minimum level of coverage 
     guaranteed to eligible individuals, regardless of the state 
     in which they reside.

  The Democratic plan would reform Medicaid, not repeal it. It would 
restrain the rate of growth in Federal Medicaid spending in a 
responsible manner, not slash spending so much that huge cutbacks in 
eligibility, benefits, and payments to providers are inevitable. It 
would maintain a Federal fiscal partnership with the States for health 
and long-term care, not break the commitment to assist States and 
localities in paying for care to vulnerable Americans.
  These proposed cuts in Medicare and Medicaid funding would also have 
a devastating impact on hospitals and health care systems since 
providers will take the brunt of $270 billion Medicare reductions. 
Alabama would get $1.45 billion less in Federal Medicaid assistance 
over the next 7 years. Such a drastic cut will have a profound effect 
on the ability of health care providers to meet the ever-increasing 
needs of the community and will also increase costs for those with 
private insurance plans. On the other hand, the right kinds of 
decisions could set the course for restructuring these programs in ways 
that will enable providers to deliver quality care more efficiently.
  These extreme cuts to Medicare also threaten health care for millions 
of people of all ages living in rural America. Medicare spending in 
rural communities will be cut by $57.9 billion over the next 7 years--a 
21-percent reduction by 2002. Since rural hospitals rely on Medicare 
for a significant proportion of their revenue, they will be 
particularly hard hit. Some will be forced to close altogether. 
Hospitals in rural areas are few and far between. A hospital closing 
affects all rural residents in the vicinity, not just seniors on 
Medicare. Under the GOP plan, these Americans will be forced to drive 
further to the nearest hospital, putting lives at risk.
  As an alternative to closing, rural hospitals could turn to local 
residents to pay more for services or to pay higher taxes to subsidize 
their hospitals. So, taxpayers in rural America will be forced to pay 
more in order to protect access to health care as well as the quality 
of their services. Seniors in rural areas already have a limited choice 
for doctors and this plan will result in fewer doctors accepting 
Medicare patients or doctors charging seniors more.
  Also with regard to rural America and agriculture, there are several 
provisions which have potential hidden costs. The savings from the 
Wetlands Reserve Program, for example, do not continue in the years 
beyond 2002. CBO anticipates that in those years, the program would 
actually be more expensive under this legislation than under current 
law. In addition, the removal of the requirement to purchase crop 
insurance will expose additional farmers to losses from poor weather, 
floods, and other natural disasters. In the past, Congress has 
responded to such events with supplemental appropriations for disaster 
relief. The removal of the crop insurance requirement provides budget 
savings for reconciliation but undermines a key element of last year's 
crop insurance reforms, which were intended to end the temptation for 
Congress to pass costly disaster assistance bills. If our past 
experience is any guide, the end result will be even higher Federal 
spending.
  I am also deeply dismayed over the $10.8 billion cuts in student 
loans, most of which will come out of students' and parents' pockets 
through higher interest payments. Each school would be required to pay 
a 0.85 percent fee on the amount of Federal loans made for students 
attending the school. This would 

[[Page S15651]]

undoubtedly be passed on to the students in some form. It would cap the 
direct lending program at 20 percent of student loan volume. Rather 
than saving money, this change would only produce paper savings as a 
result of new scoring rules adopted by the majority.
  Mr. President, in this Nation, we have prided ourselves on the 
quality and accessibility of our system of higher education. Today, 
through student loans, Pell grants, work-study, and other programs, 
virtually every person who wants to attend college is able to do so. We 
have made the correct decision that economic circumstances should not 
prevent a bright, young mind from being able to obtain a college degree 
if that is what they want to pursue. Why on Earth would we want to 
retreat from that commitment by making higher education less accessible 
to millions of academically qualified students? The bottom line is that 
to the vast majority of families who depend on student loans to pay 
tuition, slashing student loans will mean the difference between 
enrolling their children in college and not sending them.
  Finally, Mr. President, I want to discuss my concerns over the 
changes to the earned income tax credit, which former President Reagan 
once described this way: ``The EITC is the best anti-poverty, the best 
pro-family, the best job-creation measure to come out of Congress.'' 
Republicans in the Senate as well have supported the EITC for many 
years.
  The plan before us dramatically increases taxes on the working poor 
by scaling back the EITC that so many Republicans have strongly 
supported in the past. The plan increases taxes by $43 billion over the 
next 7 years. This means an immediate $281 average tax increase on 17 
million low-income American taxpayers. By the year 2005, 21 percent of 
all families currently eligible for the EITC would no longer be 
eligible. While its supporters praise hard work and self-reliance, 
their plan will make life more difficult for millions working in 
demanding, low-paying jobs.
  In 1993, when the EITC was expanded, the Treasury Department 
estimated that approximately 374,700 Alabama families would qualify for 
a financial break under the plan. Actually, almost 388,000 families 
ultimately qualified under the EITC, a total of 22 percent of the 
entire returns filed. If this plan is adopted, these hundreds of 
thousands of families and millions of others across the country will 
see this benefit evaporate. Approximately 17 million low-income working 
Americans will see an immediate tax increase averaging $302; that tax 
increase will grow to an average of $471 per year by 2005. Treasury 
Secretary Robert Rubin has stated: ``Low-income working families will 
suffer if the Senate Finance Committee's cut to the earned income tax 
credit becomes law. It is fundamentally unwise to raise income taxes on 
America's working families while high-income taxpayers are receiving 
the benefits of a tax cut.''
  As I stated before, this reconciliation package's priorities are 
misplaced, its effects unfair, and its assumptions dubious. In its 
current form, it will and should be vetoed. We should and will be 
forced to start over after the veto. It would be to our benefit and the 
benefit of the American people to return this legislative bitter pill 
back to its container now and come up with a plan that is equitable and 
that gets the job done the right way.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Mr. President, I want to take a moment from our time, if I 
might, to thank both my friend from Alabama and my friend from 
Arkansas, who preceded the Senator from Alabama, for excellent remarks.
  The Senator from Alabama is the former chief justice of that State. I 
have served with the distinguished Senator from Arkansas since 1971 
when we both were elected and began service to our States as Governors. 
They are extremely talented and dedicated people. I want to thank them 
for their excellent comments to try and recognize the serious problems 
with this budget bill that I addressed at some length at the beginning 
of the morning, about 10:30 this morning.
  To all I want to say that while I am disappointed that we have not 
had a single vote yet, I advise all that some progress is being made, 
and I suspect that in the possibly not too distant future we may have 
some kind of an announcement by the majority leader and the minority 
leader, or the chairman of the Budget Committee, Senator Domenici, who 
is on the floor, and we can maybe move more progressively ahead and 
stop the talking and start the voting.
  I thank the Chair.
  Mr. INHOFE addressed the Chair.
  The PRESIDING OFFICER. Does the Senator from New Mexico yield time?
  Mr. DOMENICI. Yes, are we just open-ended on time?
  The PRESIDING OFFICER. The time is off the resolution, so the Senator 
can yield time.
  Mr. DOMENICI. Mr. President, how much time does the Senator want?
  Mr. INHOFE. Three minutes.
  Mr. DOMENICI. I yield 3 minutes to the junior Senator from Oklahoma.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. INHOFE. Mr. President, I thank the Senator from New Mexico for 
yielding. I wanted to ask a question of the distinguished Senator from 
Arkansas when he was very eloquently expressing his position. He was 
unable to yield to me.
  What I was going to ask him is, I heard him state several times on 
the floor of this body the tax reductions that took place under the 
Reagan administration. There is a fact that has to be stated at this 
time, every time someone talks about that, and that is the total 
revenues for marginal rates in 1980 amounted to $244 billion; in 1990, 
from the marginal rates that had been decreased, the total tax amounted 
to $466 billion. In other words, we almost doubled the revenue during 
that 10-year period, and what happened during that period, as was 
pointed out by the Senator from Arkansas, is that we had the most 
significant tax reductions during that period of time. In other words, 
we increased revenue by reducing taxes, and that has gotten lost in 
this debate somehow.
  Then another observation I had after listening to the Senator from 
Arkansas was that those same individuals who are fighting the tax 
reduction that we are proposing in this resolution are the same ones 
that supported the largest tax increase in the history of America, as 
it was characterized by not a conservative Republican, Jim Inhofe, but 
by the chairman of the Senate Finance Committee in 1993: The Clinton 
tax increase was the largest single tax increase in the history of 
America or the history of public finance.
  Who are the ones who voted for that? Those individuals who voted for 
that tax increase were the big spenders as ranked by the National 
Taxpayers Union, National Tax Limitation Committee and all of the other 
organizations that ranked big spenders in Congress.
  So you had the big spenders who were for a tax increase at that time. 
All we are trying to do is say, ``Mr. President, you made a mistake 
back in 1993 by passing a big tax increase. We want to repeal some of 
that tax increase.''
  So the same individuals that are opposing our reduction in taxes now, 
to give some of the taxes back to individuals in America, are the ones 
who were supporting a major tax increase.
  The last thing I want to mention is that those individuals who in 
1993 supported the huge tax increases, a very large percentage of them 
are not around to vote today because those who came up for reelection 
during the 1994 election, when that was the major issue in their 
campaign, were defeated. We have shown that with charts on the floor 
many times before.
  I thank the Senator for yielding.
  The PRESIDING OFFICER. Who yields time?
  Mr. EXON. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. ABRAHAM. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ABRAHAM. Mr. President, I ask unanimous consent that the pending 
Rockefeller motion and the amendment thereto be laid aside in the 
status quo and that I may be recognized to offer an amendment.

[[Page S15652]]

  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 2950

        (Purpose: To provide for beneficiary incentive programs)

  Mr. ABRAHAM. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Michigan [Mr. Abraham] proposes an 
     amendment numbered 2950.
       At the end of chapter 6 of title VII, insert the following:

     SEC.  . BENEFICIARY INCENTIVE PROGRAMS.

       (a) Program to Collect Information on Fraud and Abuse.--
       (1) Establishment of program.--Not later than 3 months 
     after the date of the enactment of this Act, the Secretary of 
     Health and Human Services (hereinafter in this section 
     referred to as the ``Secretary'') shall establish a program 
     under which the Secretary shall encourage individuals to 
     report to the Secretary information on individuals and 
     entities who are engaging or who have engaged in acts or 
     omissions which constitute grounds for the imposition of a 
     sanction under section 1128, section 1128A, or section 1128B 
     of the Social Security Act, or who have otherwise engaged in 
     fraud and abuse against the medicare program for which there 
     is a sanction provided under law. The program shall 
     discourage provision of, and not consider, information which 
     is frivolous or otherwise not relevant or material to the 
     imposition of such a sanction.
       (2) Payment of portion of amounts collected.--If an 
     individual reports information to the Secretary under the 
     program established under paragraph (1) which serves as the 
     basis for the collection by the Secretary or the Attorney 
     General of any amount of at least $100 (other than any amount 
     paid as a penalty under section 1128B of the Social Security 
     Act), the Secretary may pay a portion of the amount collected 
     to the individual (under procedures similar to those 
     applicable under section 7623 of the Internal Revenue Code of 
     1986 to payments to individuals providing information on 
     violations of such Code).
       (b) Program to Collect Information on Program Efficiency.--
       (1) Establishment of program.--Not later than 3 months 
     after the date of the enactment of this Act, the Secretary 
     shall establish a program under which the Secretary shall 
     encourage individuals to submit to the Secretary suggestions 
     on methods to improve the efficiency of the medicare program.
       (2) Payment of portion of program savings.--If an 
     individual submits a suggestion to the Secretary under the 
     program established under paragraph (1) which is adopted by 
     the Secretary and which results in savings to the program, 
     the Secretary may make a payment to the individual of such 
     amount as the Secretary considers appropriate.

  Mr. ABRAHAM. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DOMENICI. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, on our time, I know a lot of Senators 
are in their offices and are wondering what we are doing. They have a 
right to wonder. I will explain that we had an understanding with the 
Democratic leadership that we would set aside in a status quo the 
previous motion to recommit and the amendment to it, leave it in a 
status quo format, and proceed to another amendment.
  The other amendment is the amendment that Senator Abraham offered. It 
is being reviewed, but I believe we ought to proceed with it. Why are 
we doing this? I think everyone knows that, since shortly before noon, 
we have been working with the Democratic leadership, and they have been 
working very hard, from what I can tell--and I truly believe that--to 
see if we cannot narrow down the number of amendments and establish 
some process which will be more orderly than just waiting until the end 
and having hundreds of amendments just offered. We are working on that, 
and we have not yet reached an agreement. We have agreed to take up the 
Abraham amendment in the normal course. We will take an hour, and that 
side can take what time they need. This will give us some time to 
further our negotiations, which will continue in a very lively manner.
  I yield the floor.
  Mr. FORD. Will the chairman of the Budget Committee answer a 
question?
  Mr. DOMENICI. Of course.
  Mr. FORD. As I understand it, we have a motion before the Senate and 
then we have a first-degree amendment. We do not have an amendment in 
the second degree here; is that right?
  Mr. DOMENICI. We have a motion to recommit.
  Mr. FORD. And then we have an amendment in the first degree. We have 
used up all of the time allotted, unless we get unanimous consent on 
both of those; is that correct?
  Mr. DOMENICI. That is correct.
  Mr. FORD. We have set both of those aside in this agreement here, and 
we have an amendment in the first degree.
  Mr. DOMENICI. Which is totally separate and distinct, yes.
  Mr. FORD. Now, this amendment has 2 hours. At the end of the 2-hour 
period, an amendment in the second degree, which would have an hour, 
would be in order; is that right?
  Mr. DOMENICI. Correct.
  Mr. FORD. I thank the Senator.
  Mr. EXON. Will the Budget Committee chairman yield for a further 
question?
  Mr. DOMENICI. Sure.
  Mr. EXON. If I have understood what you have said, this is a 
Republican amendment, and 1 hour is allocated on that side and 1 hour 
on this side. If this side of the aisle only uses 5, 10, 15, or 20 
minutes, then we would only be charged with that on our total 10-hour 
allotment; is that correct?
  Mr. DOMENICI. The Senator is correct.
  The PRESIDING OFFICER. That is not correct.
  Mr. DOMENICI. What would happen, Senator, is 1 hour and 10 minutes is 
charged against the bill if you use 10 minutes and we start from that 
point to allot time again; if you used an hour and we use 10 minutes, 1 
hour and 10 minutes would be charged against the total hours of the 
bill and we start from that new point.
  That is no different than it has been forever.
  The PRESIDING OFFICER. The time is divided equally in that case.
  Mr. DOMENICI. Thereafter, the time is divided equally.
  The PRESIDING OFFICER. The time is allocated equally.
  Mr. DOMENICI. That is a different way of saying what I said.
  Mr. FORD. Mr. President, the question is, What happens if the 
Democrats just take 10 minutes? They lose half of 50 minutes, which is 
25 minutes?
  The PRESIDING OFFICER. The Senator from Kentucky is correct.
  Mr. FORD. So we are caught in the dilemma here now that if the 
Republicans take a full hour and we do not take but say 10 minutes, 
then we lose 25 minutes of which they could get on the next amendment.
  It seems like there ought to be some other way. If we did not want to 
use our time or the Republican side did not want to use their time, we 
could save that for an amendment we would like. But the rules are the 
rules, and I understand.
  Mr. DOMENICI. Maybe I ought to clarify it.
  I think I expressed it my way but I would rather express it this way: 
It has been the rule since we had reconciliation on the floor in the 
Senate that whatever amount of time is used on an amendment by both 
sides is charged equally to both sides.
  Is that not correct?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. DOMENICI. I told that to the distinguished Senator yesterday. We 
were discussing it. We are not changing a thing here. The shoe is on 
both sides. Sometimes it works the other way. It has worked both ways 
in the times I have managed the bills.
  It will come out all right in the end. You will have your amendments, 
from what I can tell. We can use more time this way.
  Mr. EXON. If I might just add some editorial comment here, the 
problem that we have is that at 9 o'clock this morning I was in the 
first meeting. We have been meeting and talking and advising and 
cajoling now going on almost 12 hours.
  The point I make is that I think it is time we start voting. I simply 
say that the delaying tactics thus far are just cutting down the time 
that I think we would like to use on this side of the aisle on several 
very key, very important amendments.
  I am not saying that the amendment being offered by the Senator from 
Michigan is not an important one. It 

[[Page S15653]]

probably is. But compared with the many amendments we have ready to 
offer and want to vote on this side--another way of saying this, I am 
very much disturbed by the fact we are continuing to use up the time.
  We only have a total of 20 hours to debate the most far-reaching 
reconciliation bill, maybe the most far-reaching bill that has ever 
been presented to the U.S. Senate, when you consider all of its 
implications.
  I recognize we may be playing by the rules but the rules in this 
particular instance might not be fair. I appeal once again as one who 
has worked on this all day long, I wish we could start voting up or 
down on the important amendments.
  I do not believe that we should or could under the dictates of the 
20-hour maximum limit, that we should be taking an hour on each side to 
debate the amendment that is being offered by the Senator from 
Michigan. It may be something, when I know more, that I will fully vote 
for.
  I think time is wasting and I wanted to make that point. I yield the 
floor.
  Mr. DOMENICI. I just want to say I think we have explained that we 
are using the time usefully. We are using the time usefully to try to 
make a better arrangement for the rest of the bill. We ought to be 
through with that soon.
  Mr. ABRAHAM. Mr. President, I have sent an amendment to the desk 
which has been read.
  Mr. President, the savings necessary to rescue the Medicare program 
from bankruptcy will not be found solely through eliminating waste, 
fraud and abuse. Nevertheless, I believe it is incumbent upon us to 
diligently pursue and root out every vestige of inefficiency in the 
system.
  Therefore, I am offering this amendment which I think will produce 
additional vigilance in the ballots against Medicare waste and fraud. 
This amendment calls on the Secretary of Health and Human Services to 
establish programs that enlist Medicare beneficiaries in our efforts to 
eliminate waste, fraud and abuse in the Medicare system.
  These beneficiary incentive programs, as they would be called, would 
come in two forms: One program would reward individuals who report 
fraudulent activities; the other program would reward individual 
beneficiaries for suggestions they make which result in greater 
efficiency and overall savings to the program.
  The Secretary of Health and Human Services would be responsible for 
setting up each program and for providing financial remuneration to 
those individuals reporting instances of tangible fraud and waste.
  The Senate Finance Committee's reconciliation package currently does 
not contain a beneficiary incentive program or provision. The amendment 
I offer would include in the Senate reconciliation bill language which 
is similar to that currently in the House proposal.
  It is difficult to explain to Medicare beneficiaries why dramatic 
changes in the program are necessary to keep it from going bankrupt 
when many of these same individuals have firsthand experience with 
waste and fraud in the system.
  Indeed, Mr. President, in my own State we recently had an incident 
where a Congressman had a constituent come to him with an overcharging 
of something in the vicinity of $400,000 that was made in error. 
Nevertheless, it has been paid.
  Those kind of circumstances make at least my constituents who are 
part of the Medicare Program frustrated, angry, and especially 
concerned when they hear about changes we are making in the program. 
They do not want to see us just address the growth issues or just the 
solvency issues. They also want us to address the problems they see 
every day with fraud, waste, and abuse in the program.
  That, in my judgment, has to be addressed in our bill. That is why I 
offered this amendment.
  If our efforts at Medicare reform are to succeed we must demonstrate 
our seriousness about ending these abuses. I believe enlisting the aid 
of Medicare beneficiaries, showing our resolve to combat the problem 
can prove to be a valuable asset in exposing and eliminating waste and 
fraud from the system.
  Just to clarify, Mr. President, my amendment authorizes the Secretary 
of HHS to within 3 months establish two separate programs, one which 
would basically be called a beneficiary incentive program designed to 
allow seniors to report fraud, waste and so on, and if the fraud is 
significant, allow the Secretary to provide a financial reward to the 
individual who reports it.
  The second program, also designed to allow Medicare beneficiaries to 
benefit from ideas and suggestions in improving the program, would 
provide Medicare beneficiaries awards for providing us with 
recommendations specifically to the Secretary of HHS for improvements 
to the Medicare Program by way of promoting greater efficiency. Once 
again, if the savings are significant, the Secretary of HHS may provide 
a financial award to the individual whose recommendation was submitted.
  Mr. President, we are addressing the growth of Medicare and its 
expense in many different ways in this legislation. I think a key 
component in the long-term control of those costs has to be ferreting 
out this abuse and waste.
  I believe this amendment, as part of a package of similar reform, can 
make a significant impact in reducing those kind of costs that stem 
from either inefficiencies in the program or fraud or mismanagement in 
the program.
  I am pleased to offer this amendment tonight and I urge my colleagues 
to support the amendment.
  Mr. EXON. Mr. President, I yield 10 minutes to the Senator from 
California.
  Mrs. FEINSTEIN. Mr. President, all day I have listened attentively to 
both sides of this debate. Increasingly, I have grown deeply saddened 
because I see the polarization that is taking place between the two 
sides of the aisle. I tried to reflect on the profound impact this bill 
will have on people, specifically, the 32 million people in the State 
of California.
  In a sense, it is ironic that this bill is called a 
``reconciliation'' bill, for in reality, other than in Washington-
speak, it is far from a reconciliation that we have here on the floor 
today.
  If one just looks at the size of the Medicaid and Medicare cuts, one 
cannot help but be staggered by what its impact will likely be. 
Overall, the $450 billion cut in Medicaid and Medicare, would affect my 
State of California to the tune of $54 billion in losses during the 
next 7 years. That breaks down as $36 billion in Medicare cuts and $18 
billion in Medicaid cuts. Those cuts will have an enormous impact on 
the people of California.
  Let me give you an example of this bill's harsh consequences. In 
California, 15 percent of the current Medicare recipients are also 
receiving Medicaid. That is 540,000 of the poorest seniors in the State 
of California. They need Medicaid to meet their Medicare premiums and 
copayments. Premiums are being doubled and, under the bill, they will 
not have the assistance of Medicaid. What is, obviously, the likely 
result? Without Medicaid to assist these seniors meet their payments, 
many will lose their benefits and be placed at higher risk.
  Further, for people suffering with HIV/AIDS, Medicaid is the most 
important program in the Nation. With these Medicaid cuts, what 
happens? It puts added stress on the public hospital, the county 
hospitals, in the State.
  So let's turn and look and see what is happening to the county 
hospital. In the 58 counties of my State, county hospitals--like San 
Francisco General in San Francisco or Martin Luther King, Jr., General 
in Los Angeles, will lose an estimated $150 million over the next 7 
years.
  Now let's turn to the great teaching hospitals in my State. The 
University of California system is a great system, probably the best in 
the world, with five great, major teaching hospitals. They are 
projected to lose $444 million over the next 7 years.
  In a letter from the university system, they inform me that, for the 
first time in history, the University of California's teaching 
hospitals will go into deficit.
  Great teaching hospitals going into deficit.
  Public hospitals not being able to keep up.
  Medicaid cuts that will prevent the poorest in our Nation from being 
able to use Medicare.
  I really had to ask myself the question--is it really necessary to do 
it this way? This is where the bill becomes, I 

[[Page S15654]]

must honestly say, immoral. Because the answer to the question has to 
be, no, it is not necessary.
  When you add it all up, you know that these cuts are as deep as they 
are for one reason, and one reason alone--to provide an enormous tax 
cut in this bill, while the poor get hit hard by the changes in the 
earned income tax credit.
  I am one Democrat who supports a cut in capital gains, but not on the 
backs of poor people. It is simply not what we are supposed to do--
either party, Republican or Democrat.
  I have a basic philosophical belief. What Government should do is 
those things that the private sector cannot do. So Medicare and 
Medicaid are an important part of that philosophy. To take these deep 
cuts at this time, all at once, without any hearings or full knowledge 
of how these cuts will fall?
  What does happen to the five great teaching hospitals?
  When do they have a chance to give testimony and indicate what they 
can or what they cannot save? What does happen to 540,000 seniors who 
depend upon Medicaid to make their Medicare premium and copayments? 
What happens to them? We have not discussed it. Nobody knows.
  What happens to the county hospitals, already cut deeply, the major 
providers of indigent care in many areas across California? The DSH 
payments are not going to be enough. What happens to the affected AIDS/
HIV community, more dependent on Medicaid than any other single 
program?
  These are questions that deserve a hearing. These are questions that 
deserve the wisdom of both parties sitting down and working it out.
  Mr. President, I am delighted to see the Senator from Arizona in the 
chair, because we just had an example of where we can work together. He 
and I both know that the majority leader, and you as a major author, 
did not have to compromise on the Jerusalem bill we recently considered 
on the floor.
  You had the votes to do it without it. And, yet, your feeling was--
and I think correctly so--that it would be a better bill, with less 
divisiveness, if we sat down and tried to work out our differences. 
And, Mr. President, you and I and others sat down at least twice and we 
worked out our differences and we were able to produce a bill that got 
all but five votes in this esteemed body.
  I really think that is the way our people--those people who elected 
us--think that is what they elected us to do. They didn't elect us to 
be so partisan that we drive a divisive wedge into two of the most 
important programs, Medicaid and Medicare, that touch human lives in 
this country.
  I will tell you honestly--God strike me dead if it is wrong--I do not 
know how the State of California is going to cope with these cuts. They 
are deep, they are wide and they are enormous for a State that has a 
growing poor population, that is the site of 40 percent of all of the 
foreign born, that has more illegal immigrants in it than all the other 
States, combined, and has probably the largest number of needy people.
  We recently considered welfare reform on the Senate floor. I voted 
for welfare reform, yet welfare reform is a $7 billion cut to 
California--no question--by any independent analyses. I voted for it 
because I felt there was a redeeming value in making the necessary 
changes and moving off chronic dependency.
  Yet, how can I vote for this budget bill and show up back in 
California when I know the reason the cuts are so deep is simply to 
give a tax cut?
  Who benefits?
  My husband is a merchant banker. He deals in this kind of financial 
area. He would love to have a capital gains cut. He pays major income 
taxes. They went up in 1993, just like 275,000 other families out of 13 
million taxpayers in the State of California.
  But does he want to get a capital gains cut under these conditions? 
Anybody can call him and he will say no. It is morally wrong. It is not 
right to do it this way. And that is the gut-level problem that I have 
with this bill that so saddens me.
  The Republican Party has been known as the party that is most 
concerned about the national debt. True, we have a national debt of 
$4.9 trillion, which has developed, largely, over the past 25 years. 
But this budget bill will add to the deficit over its 7 years. Under 
this bill, the Nation's debt will increase by about $670 billion over 
the next 7 years--about $245 billion more than if no tax cut is 
enacted. This is not fiscally responsible action.
  Further, I recently learned that June O'Neill of the Congressional 
Budget Office reports that, if off-budget items, such as Social 
Security, where not incorporated into the deficit calculation, the 
budget would show a $105 billion deficit in 2002 under the Republican 
leadership's plan, not the balanced budget they claim. Now is not the 
time for an excessive, and misdirected, tax cut.
  The current deficit is $160 billion and that is too high and needs to 
be eliminated. But the deficit has been as high as $290 billion only a 
few years ago. True, the deficit picks up in the outyears of this 
decade. And true, Medicaid and Medicare are partially responsible for 
it and need to be changed.
  I will support changes in these programs, like an age of eligibility 
change. I will support means testing of premiums, not because I want 
to, but because I believe it has to be done.
  But to take the cuts this way, for the purpose of being able to 
rationalize a tax cut directing billions to the investment banker types 
of this country, is absolutely wrong. It is morally wrong.
  And to go back to California and tell senior citizens, some of whom, 
in my State are eating dog food--true story, eating dog food, and using 
Medicaid to pay their premiums, is something I cannot accept. The lower 
you are on the economic ladder the more difficult it is.
  I am sure I have exceeded my time. I apologize. I got a bit wound up. 
But I think it suffices to say that I do not know how anyone can vote 
for this bill and return to their people and say, ``You are not going 
to be hurt by it.'' I know I cannot.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Mr. President, I want to thank my friend and colleague from 
the State of California for a very excellent statement, and, as usual, 
she puts it into perspective so we can all understand it. I think the 
personal remark that she made with regard to her husband should set the 
tone of understanding that I think is very lacking on the budget 
reconciliation document that we have been addressing and that I 
addressed along similar lines this morning.
  Mr. President, I would simply like to say that, subject to their 
recognition by the Chair, I yield 10 minutes, first to the Senator from 
Nebraska, Senator Kerrey, and followed by that 10 minutes to the 
Senator from Arkansas, Senator Pryor.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized for 10 
minutes.
  Mr. KERREY. I thank the Chair.
  Mr. President, several Members, Republicans and Democrats, have come 
to the floor and have decided to use the bipartisan Entitlement 
Commission--actually established by President Clinton last year--as 
either the basis for supporting the reconciliation agreement or the 
basis for opposing it. My opposition I must say is reluctant. I would 
love to be able to join with Senator Gregg, Senator Simpson, and others 
who participated in this effort and understand that the severity of the 
long-term problems with entitlements is not just Medicare and Medicaid, 
and other entitlements, but the big one, Social Security. The long-term 
problem is not something that we can afford to put off. Every year that 
we wait the problem gets worse.
  All of us who look at the situation of retirement understand that the 
sooner you begin to plan the less you have to put away.
  So those that say we will wait until 1997 to deal with Social 
Security are not doing beneficiaries any favor. The longer we wait the 
more severe the problem is, and the more the severe the adjustments we 
have to make. And we should recognize that when you are dealing with 
retirement or with health care, if there is a requirement to save money 
and accumulate reserves, as there is with our trust funds, that you 
have to do it over a prolonged period of time.
  Mr. President, the reconciliation agreement does not solve that long- 


[[Page S15655]]

term problem. The appropriated accounts this year are about 26 percent 
of the whole budget at the end of the 7-year period. We are seeing a 
decrease in the appropriated accounts--a continuation. I mean it is the 
most dramatic chart that we have in the entitlement report. I commend 
it to colleagues who are interested in it, because when you get to the 
back and see what Senator Danforth, I, and Senator Simpson recommended 
you can see that you are dealing with real tough choices.
  So I am not objecting to making tough choices. I am not objecting to 
saying that I will cast a vote for something that might be unpopular. I 
am not going to criticize the Republicans, for example, for choosing to 
increase the eligibility age. I think it has to be increased. But what 
we observe is a long-term problem. Again, when you say long-term 
problem the presumption is that we can wait a long time before we deal 
with it. You cannot because the longer you wait the more serious the 
issue becomes.
  Mr. President, I want Members to understand that there are facts here 
in the Entitlement Commission report, as well as recommendations in the 
Entitlement Commission, that I believe need to be considered. I regret 
the President did not take those recommendations and make it a part of 
his budget. I think we would be in a different shape right now, if, in 
fact, the observations of the recommendations of the Entitlement 
Commission were accepted by the administration. But they were not. But 
there is still bipartisan support for action, and a willingness to risk 
political careers using facts and using the truth, and hoping the 
American people trust that we have to make change.
  In short, Mr. President, the goal for us in this exercise cannot just 
be to balance the budget because, if all we do is balance the budget, 
we have other problems that will still need to be addressed. I have 
identified a second one.
  The second one is the growing cost of entitlements as a percent of 
our Federal budget. With all the rhetoric on both sides of the issue, 
the amount of money that the Congress extracts from the U.S. economy 
has remained relatively constant over the last 50 years. It went up 
during World War II, and it went up during the Vietnam war, but it 
remained roughly 19 percent of GDP. It is unlikely that is going to 
change. It is likely that is going to remain the same even with the 
proposal to reduce taxes that is in this piece of legislation. It 
really does not make a dent in that. You are still going to be pulling 
about 19 percent of GDP. That means the more that we allocate for 
mandated programs the less we have; not just for defense but for 
nondefense appropriations accounts. It severely restricts our ability 
to build roads, our ability to educate our people, to do training, and 
to do things that I think Republicans and Democrats can agree need to 
occur.
  So not only do we need to balance the budget but we need to interrupt 
this trend where America is moving in a direction which our Federal 
Government is moving in--a direction of becoming an ATM machine. Again, 
time is not on our side. You may say, ``Oh, my gosh. I do not want to 
increase the eligibility age because that will make me unpopular. I do 
not want to deal with Social Security because it is too 
controversial.'' But we have to.
  We have obligations on the table right now that we cannot meet. We 
can meet them over the next 5 or 6 years. We are not going to be able 
to meet them long term.
  The flaw in the Republican proposal, in my opinion, comes from the 
need to satisfy a relatively small number of people that campaigned on 
a promise to reduce taxes. It is the tax cut that makes it imperative 
to get more over the short term and less over the long term. That is 
why I think this thing may have run aground. But Americans should not 
suffer under the illusion that is there is an absence of bipartisan 
willingness to look at the future, and say, ``We are going to change 
our laws so as to change that future.'' Not only should we be moving 
toward the balanced budget, but, second, we need to get consensus that 
we are going to cap all entitlement programs at a fixed percent of our 
budget--64 percent this year. I would be thrilled to get an agreement 
on 70 percent instead of the 74 percent that it is going to be in the 
year 2002.
  Third, Mr. President, I have strong objections to this proposal 
because instead of building a new safety net for a changed economy, 
which I think we need, we are saying as businesses are downsized they 
become more productive, and more competitive. But as they do it 
dictates that we examine our safety net and build a different one. I 
think on the top of the list, if you are trying to rebuild a safety 
net, is to change the way we establish eligibility for health insurance 
in this country. And rather than saying we are going to just change 
Medicare and reform Medicare, we ought to be reforming Medicare, 
Medicaid, the income tax deduction, and the VA system--establishing a 
simplified system of eligibility saying, if you are an American and a 
legal resident, you are in but you have to participate personally in 
controls. We are not going to subsidize you, if you do not need to be. 
We have to, rather than block granting for budgetary reasons, have a 
new safety net.
  If we want to remain an aggressive market economy where our 
businesses have an incentive to maintain their productive edge, we have 
to have a safety net that enables people when they find themselves out 
of work to still know that they have health insurance, and still know 
that they are going to be able to pay the medical bills.
  I was down in Texas over the weekend and discovered in the State of 
Texas, a relatively conservative State, that 50 percent of all babies 
delivered in the State of Texas are paid for by Medicaid--Medicaid, Mr. 
President. This is supposed to be a poverty program, and it is supposed 
to be a minimal safety net.
  The reason that it is increasingly being used by working people is 
that we do not have a very good and a very flexible program. We are 
saying, as many Republicans have come to the floor and said, there is 
something wrong when I have working people without insurance paying a 
2.9 percent payroll tax to fund health care programs for some that can 
afford to pay the bills. There is something wrong with that.
  But to reconstruct the health care safety net, we cannot just adjust 
the payment system in Medicare. We cannot just block grant Medicaid. We 
ought to be saying let us re-establish a fundamentally different way of 
becoming eligible for health care, and then let us make sure subsidies 
go to those who need it, and make sure we provide people with the basis 
as well, as both Republicans and Democrats have talked about, and 
accumulating the resources to be able to pay for it.
  Mr. President, if this proposal in addition to balancing the budget 
fixes the cost of entitlements, instead of the Republicans looking 
across the aisle and saying we are in the majority, we have looked at 
this Entitlement Commission report, we agree, we have to control the 
cost of entitlements, here is the proposal to fix it--if the 
Republicans had said we now come to the table in an understanding that, 
as well as the market working right now to control the cost of health 
care, there are some individuals that are not going to be able to 
purchase it, that is the basis for Republicans supporting Medicare.
  We understand that after 65, a lot of people cannot afford to pay the 
bills because health care gets more expensive. Well, if it is true for 
75-year-old people, it is also true for 25-year-old people in the work 
force. We ought not just be changing Medicare to save money. We ought 
to reform our health care system so that every single American knows 
with certainty they are going to be covered.
  If the Republican proposal did those three things at a minimum, then 
I would be standing here as a Democrat supporting it. I would love to 
be able to get to that point. I know there are many people on the other 
side of the aisle very uncomfortable with the tax cuts, very 
uncomfortable in particular with the Joint Tax Committee that has 
disclosed to Americans that every single person with a family income of 
$30,000 or under is going to have a tax increase. I know they are not 
comfortable about that and would prefer to have it changed. I know they 
understand that the entitlements are a problem, that we have to do 
more, not less, 

[[Page S15656]]

if we expect to have the resources to invest in our future.
  I know there is the basis to produce a bipartisan reconciliation bill 
that we could send on to the President hopefully for his signature.
  Unfortunately, that does not appear to be the direction we are 
heading. Unfortunately, we appear to be heading in a direction where we 
are going to sort of rigidly hold on, have a minimum amount of debate, 
limit the number of amendments offered, pass legislation for the short 
term and hope the people do not discover we left the long-term problem 
in place; that we have constructed a safety net that is not adequate 
for the kind of market economy we face today and unfortunately will 
have left our children, rather than blessed in the future, still cursed 
by an insufficient amount of investment.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Senator from Arkansas.
  Mr. PRYOR. Mr. President, I thank the Chair for recognizing me.
  I am just going to speak a very few moments on a subject that is and 
has been very near and dear to my heart during my entire period, you 
might say, in the field of public life. It relates to nursing home 
standards, Mr. President.
  The legislation that we are considering tonight in this Chamber--I do 
not know how many thousands of pages, about 2,000, I think--includes 
what we might think of as just about everything, that nothing was 
forgotten, nothing was left out, nothing was omitted from the budget 
reconciliation bill that we are considering this Wednesday evening in 
the Senate. But there is something very critical left out of the budget 
reconciliation brought to us by our friends from the other side of the 
aisle. What was left out, what is notably absent is any Federal 
national nursing home standards.
  Mr. President, only this week, in Time magazine, we see a remarkable 
article entitled ``Back to the Dark Ages,'' which predicts what is 
going to happen in the American nursing home to some 2 million 
residents if we totally do away with Federal standards.
  Mr. President, it was in 1987 when the late John Heinz, the Senator 
from Pennsylvania, the former Senator from Maine, Senator Mitchell, and 
many of us joined on this side of the aisle with our friends on the 
other side of the aisle to enact for the first time Federal standards 
for nursing homes.
  If I might, Mr. President, I ask unanimous consent to place in the 
Record this article from Time magazine.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                         Back to the Dark Ages

                         (By Margaret Carlson)

       Anyone pondering his or her sunset years will remember the 
     expose of the shocking conditions in nursing homes circa 
     1970. Woefully undertrained workers strapped patients to 
     hard-backed chairs, fed them cheap diets and kept them in a 
     whimpering state of sedation. There were tales of urine-
     soaked hospital gowns and of false teeth collected at night 
     and thrown into a communal vessel that patients had to fish 
     through in the morning. All this and more was documented by 
     the National Academy of Sciences in 1986. The next year 
     Congress passed legislation to address decades of abuse of 
     the elderly by profiteering nursing-home operators.
       But in the blink of an eye these days, a carefully built 
     construct of regulations can be blown away without so much as 
     a formal hearing. As part of a crusade to curb federal 
     authority, and with only a simple assertion that the 
     regulations are burdensome, two congressional committees have 
     sent to the floor for a vote this week legislation that would 
     repeal federal standards. There would be no protection 
     against patients being restrained, no standards on staffing 
     or when someone could be discharged after using up all his or 
     her money. Niceties like nurses would be optional, since 
     there is no requirement in the new legislation that a 
     licensed nurse be present. Instead there would be so-called 
     patient rights--to receive mail, keep personal belongings and 
     be free from abuse and forced labor--rights that may 
     duplicate, but do not exceed, the Geneva Conventions for 
     prisoners of war.
       Republicans justify the changes by saying the states know 
     best how to run nursing homes. Of course, it was the failure 
     of state regulation that got the reforms passed in the first 
     place. It is unlikely that with $182 billion less in federal 
     Medicaid money over seven years the states will embrace high-
     quality care. The market solution would be to replace that 
     nurse's aide at $10 an hour with an unskilled worker at $5 
     and to substitute thin soup and macaroni for meat and 
     vegetables.
       In fact, it turns out that being humane actually saves 
     money. Catherine Hawes of the nonprofit Research Triangle 
     Institute estimated that after the 1987 reform legislation 
     was passed, $2 billion was saved by 269 nursing homes from 
     fewer emergency hospitalizations, less malnutrition, a 30% 
     decrease in the use of catheters and a 25% reduction in the 
     use of restraints. Says Sarah Burger of the National Citizens 
     Coalition for Nursing Home Reform: ``Operators didn't know 
     until they were forced to stop doing it that the main cause 
     of incontinence and bedsores is being restrained and not 
     being able to get to the bathroom.'' But wholesale budget 
     slashing will no doubt pressure some facilities to cut 
     corners. Senator William Cohen of Maine, one of the few 
     Republicans to oppose the rollback, warns, ``If we weaken 
     federal enforcement, we will be sent back to the dark days of 
     substandard nursing homes, with millions of elderly at 
     risk.''
       Republicans may have entered the slaphappy phase of their 
     revolution, killing regulations simply because they can. 
     Indeed, the nursing-home industry has not even asked for 
     regulatory relief, in part because it would allow 
     unscrupulous operators to flourish and bring shame on all of 
     them. But Speaker Gingrich is hurtling along, fearless about 
     sending Mom and Dad back to the future, to the day of nursing 
     homes that lack nurses and feel nothing like home.

  Mr. PRYOR. I shall read only one sentence. ``Indeed, the nursing home 
industry has not even asked for regulatory relief, in part because it 
would allow unscrupulous operators to flourish and bring shame on all 
of them.''
  Mr. President, that is going to be exactly the status of the 
residents who are living today in the American nursing home.
  First, I would like, if I might, to show our colleagues the projected 
growth in the nursing home population. Today, we have approximately 2 
million residents in American nursing homes. By the year 2003, just a 
few years from now, we are going to see 4.3 million American citizens 
residing in American nursing homes. In fact, most of the people who 
reach the age of 65 are going to be in this category. They are going to 
be living in a nursing home.
  I can only imagine. If the 2 million nursing home residents in this 
country could be surveyed or polled on how they felt about removing all 
Federal nursing home standards, it does not take a great amount of 
imagination to know what the results would be. Of course, in 
overwhelming numbers, undoubtedly, they would vote to continue these 
present Federal standards.
  For example, the choice of a physician, the care and the treatment in 
choosing a physician, the freedom from chemical and physical 
restraints, is this something that our colleagues on the other side of 
the aisle want to remove? Just last week in the Senate Finance 
Committee, on a vote of 10 to 10, every Democrat voted for retention of 
these Federal standards, every Republican except one, Senator Chafee of 
Rhode Island, voted to eliminate all Federal standards in nursing 
homes.
  What about the issue, Mr. President, of privacy in receiving mail and 
communications? What about the confidentiality of medical records? What 
about the protection from unwarranted transfer to another nursing home 
or discharge in the middle of the night from the particular nursing 
home the resident finds himself or herself in?
  Mr. President, another chart indicates something that I think is 
extremely dramatic and once again indicates the real need for us to 
retain at least the minimum of Federal standards for nursing homes. 
Look at the characteristics of the nursing home patient or resident 
today: 77 percent need help in dressing; 63 percent need help in 
toileting; 91 percent need help in bathing; 66 percent have a mental 
disorder. And there is one more figure that did not make it to the 
chart, Mr. President. That is that over 70 percent of the patients 
today residing in America's nursing homes have no relative and no 
advocate out there on a daily basis visiting them or advocating their 
cause or trying to support bringing them a better quality of life.
  Mr. President, there is also a letter being circulated dated October 
24 addressed to our colleague, Senator Dole, making one final plea to 
Senator Dole and all of us in this body to restore these meaningful 
nursing home standards. It is signed by the American Health Care 
Association, by the American Association of Homes and Services for the 
Aging, by the Catholic Health Association, and down the line.

[[Page S15657]]

  I ask unanimous consent that this letter all of us received in the 
Senate be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                 October 24, 1995.
       Dear Senator Dole: As providers of long-term care services, 
     we are concerned that the current Finance Committee proposal 
     to impose a block grant financing mechanism for Medicaid 
     fails to ensure that adequate resources will be made 
     available to meet the needs of our nation's elderly, 
     disabled, and infirm. We fear that the proposed annual 
     increases in federal Medicaid funding for state programs will 
     be insufficient to meet the quality of care needed by 
     residents of long-term care facilities and subsequently 
     reduce access to services. Furthermore, the failure to meet 
     the resources needs anticipated in future years for these 
     services will negate the many advances made in this area as a 
     result of the enactment of the nursing home reform provisions 
     of OBRA '87.
       We urge you to support the retention of federal oversight 
     of nursing home quality linked to a statutory provision 
     ensuring that adequate financial resources are made available 
     to meet prescribed levels of service. Although this linkage 
     can take several forms, the current formulation which backs 
     the nursing home reforms of OBRA '87 to a statutory direction 
     that payors of services (both federal and state) must ensure 
     the payment of adequate rates has proven a workable mechanism 
     and should not be repealed.
       Federal nursing home reform standards, joined with existing 
     reimbursement standards have resulted in a steady improvement 
     in the quality of long-term care services. Without such a 
     linkage, this quality of care can not be sustained. It is our 
     sincere desire to move forward with the quality of care 
     provided in nursing homes, and recognize that the ability to 
     do so is dependent upon the provision of adequate financial 
     resources.
           Sincerely,
       American Health Care Association (AHCA)
       American Association of Homes and Services for the Aging 
     (AAHA)
       Catholic Health Association
       InterHealth
       Horizon CMS
       Clinton Village Nursing Home, Oakland, California
       Qualicare Nursing Home, Detroit, MI
       Westmoreland Manor, Greensburg, PA
       Services Employees International Union (SEIU)
       American Federation of State, County, and Municipal 
     Employees (AFSCME)
       United Auto Workers (UAW)
                                                                    ____


   Statement of Stewart Bainum, Jr., Submitted to the Senate Special 
                  Committee on Aging, October 26, 1995

       As the Chairman and Chief Executive Officer of Manor Care, 
     Inc., I want to express our strong support for retention of 
     the Nursing Home Reform Act of 1987 (OBRA '87). Manor Care 
     owns and operates 170 skilled nursing facilities in 28 
     states, and provides care to over 20,000 residents.
       The OBRA '87 reforms represent the most comprehensive 
     revision of nursing home regulations since the inception of 
     the Medicare and Medicaid programs in the sixties. As I 
     recall, the bill was over 1000 pages long, and addressed 
     critical areas of care, such as resident assessment and care 
     planning, nurse aide training and testing, resident rights, 
     nurse staffing ratios, and enforcement. The final product 
     reflected the agreement reached among 60 national 
     organizations, representing consumers, seniors, providers, 
     and state regulators. It was a painstaking process that 
     worked. In fact, OBRA might depict one of the finest 
     collaborative achievements ever in the history of health care 
     legislation.
       Manor Care proudly supported OBRA in 1987 because the 
     legislation offered a valuable means of protecting and 
     promoting the quality of life for one of the most vulnerable 
     segments of our population. We must afford nursing home 
     residents an environment which is safe and ensures their 
     physical and mental well-being. OBRA '87 has been widely 
     successful in accomplishing this goal.
       Manor Care pledges to continue to meet these federal 
     quality standards because they are reasonable, and have led 
     to significant improvements in the care delivered to our 
     residents. As a national company, we are supportive of the 
     uniformity and consistency these standards provide across the 
     states.
       OBRA created a system of care delivery to help guarantee 
     the dignity and respect of institutionalized seniors. Do not 
     undo the valuable work that has been done. We ask that 
     Congress support retention of the Nursing Home Reform Act and 
     its standards. Stated most simply, it is the right thing to 
     do.

  Mr. PRYOR. Mr. President, these particular standards which have been 
on the books now not even for quite a decade are already paying 
dividends. For example, if we would just look at an additional chart to 
see what is happening in improved resident outcomes, the maintenance of 
the ADL function, what it takes to daily exist, we see the pre-OBRA 
functional status in the purple, we see the red, the post-OBRA 
functional status showing a dramatic increase in the very basic quality 
of life because of these nursing home standards.
  We look, Mr. President, and see what is happening in improved care 
for the nursing home resident. ``Decreases in Problem Areas.'' Physical 
restraints are going down; dehydration is going down; indwelling 
urinary catheters, 29 percent, going down.
  What we are seeing here, Mr. President, are hard-won gains that we 
are about to eliminate in one fell swoop simply because this particular 
budget reconciliation does not contain Federal nursing home standards 
to protect the American nursing home resident.
  Finally, Mr. President, let me ask, how would we vote in this body--
when this issue comes before the Senate, how would we vote if we knew 
that Monday our mother or our father or our son or our daughter or even 
ourselves were about to enter a nursing home and become yet another 
statistic? How would we vote, Mr. President?
  I ask my colleagues to strongly consider the opportunity, when it 
becomes available, to retain these basic nursing home standards and to 
continue them as a part of the law of this land and the basic 
protections that we must not take away from these 2 million, and going 
to soon be 4 million, American citizens residing in our nursing homes.
  Mr. President, I yield the floor.
  Mr. ABRAHAM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. ABRAHAM. Parliamentary inquiry.
  How much time is left on each side?
  The PRESIDING OFFICER. The Senator from Michigan has 48\1/2\ minutes, 
and the other side has 26 minutes.
  Mr. ABRAHAM. Thank you, Mr. President.
  Mr. President, I yield myself such time as I may need to make a few 
brief comments with regard to my amendment, which I would like to bring 
us back to for a moment.
  First of all, the issue of fraud and abuse in Medicare is a problem 
that has been widely recognized by Members of the Senate, and I would 
like to call attention to several Members who have been actively 
engaged in trying to ferret out these problems so that we might address 
them in ways such as the amendment I am presenting here tonight.
  First, I would like to acknowledge the efforts of Senator Kyl and 
Senator McCain--Senator McCain in particular, who has worked in this 
area a lot, who has separate legislation, I know, on this topic; and 
his leadership on this issue has helped to bring it to our attention.
  More recently, I would also like to acknowledge, and then quote, from 
a report, an ongoing, actual effort by Senator Cohen, who is also 
chairman of our Senate Special Committee on Aging, an investigative 
staff report which he conducted and which was released July 7, 1994. It 
has identified countless examples of Medicare fraud and abuse, the kind 
of abuse and fraud that, hopefully, this amendment which I have 
presented tonight can address.
  Without going into all the details at this time--although I may from 
time to time during the debate mention specific cases--let me just 
focus on an area that was just touched on by the Senator from Arkansas; 
namely, the area of nursing homes.
  The investigative report revealed a considerable number of cases 
involving direct targeting of nursing home patients in which both the 
industries that supply products and services to the homes and the 
owners and administrators of the homes are involved in fraudulent and 
abusive practices.

       Nursing home owners have been convicted of charging 
     personal luxury items like swimming pools to Medicaid cost 
     reports. HCFA, the HHS [inspector general's office], and the 
     Minority committee staff are continuing to investigate 
     nursing homes * * * 

as was the case at the time this report was revealed.
  Let me cite two specific cases.

       A Minnesota speech therapist submitted false claims to 
     Medicare for services provided to nursing home residents. The 
     therapist also received Medicaid payments for speech therapy 
     he never actually performed--and the investigation revealed 
     that he had been paid for services ``rendered to patients'' 
     several days after they had died. He was also observed using 
     flash cards with a blind resident, and then billing for 
     reimbursement.

  Another case:


[[Page S15658]]

       The owner of a Pennsylvania rehabilitation service was 
     indicted for allegedly operating a scheme to defraud Medicare 
     by submitting false claims for speech therapy provided to 
     patients in nursing homes. The owner allegedly told speech 
     therapists to recruit Medicare clients even though he knew 
     their therapy would not be covered under Medicare.
       Before submitting the paperwork for reimbursement, the 
     speech therapists would rewrite their patient reports so that 
     they would appear to be medically necessary rehabilitation 
     services. The employees then allegedly falsified bills 
     submitted to Medicare, including certifications by doctors 
     that patients needed continued speech therapy, and also 
     falsified patients' medical records.

  Mr. President, we can talk about the different problems in the 
nursing home issue, one many of us are concerned about. One of the 
reasons this amendment which I have offered tonight is before us is 
because it helps to address some of the problems that do go on in 
nursing homes.
  I will cite other examples in other contexts in which Medicare fraud 
is running up the costs of Medicare, costs that we should address 
through this amendment that I am offering, as well as some of the other 
items included in the reconciliation bill before us.
  At this time, Mr. President, I would like to yield 10 minutes of our 
remaining time to the Senator from Ohio.
  Mr. DeWINE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. DeWINE. Let me thank my colleague from Michigan for yielding time 
and say that I rise in strong support of the Abraham amendment.
  My friend from Michigan said a moment ago that he has many examples 
of constituents who have had firsthand experiences. My guess is that 
there is not a Member of this body who could not say the same thing. As 
I travel the State of Ohio, I talk to people about the Medicare issue 
and what we need to do, the steps that we will have to take to preserve 
and protect and strengthen Medicare. And people will always talk to me 
about the fraud, talk to me about abuse. Many times I travel the State. 
And they have specific examples. I suspect that every single Member of 
this body could say the same thing.
  I have had my staff go through some of the letters that we have 
received. Here are just a few of them, people who have written to us, 
people who I have talked to personally, who have described specific 
incidents that they believe constitute fraud.
  I think my colleague from Michigan is right on point, because I think 
one of the things that we have to do is to enlist the public's help in 
this effort to deal with the fraud and abuse. It has been my 
experience, Mr. President, that the American people are generally 
right. And in this particular case, the American people, the people who 
are on Medicare, the children of people who are on Medicare who have 
been involved in maybe paying the bills or overseeing some of the 
finances, they are not wrong. They are right. There is fraud. There is 
abuse. There are things that need to be done.
  So I would like to congratulate my colleague from Michigan and give 
him my full support for this particular amendment.
  Mr. President, the reconciliation bill that we are debating tonight 
and will be debating tomorrow, probably also into Friday, has great 
historic significance. It has many different parts to it, as has 
already been pointed out tonight.
  One of the provisions in this bill that my colleague from Michigan 
mentioned several hours ago when he was on the floor I would also like 
to briefly comment about, and that has to do with the tax credit, the 
$500 tax credit for those couples, those families, who have children. 
There has been a lot of talk about what this might do to help stimulate 
the economy, a lot of talk about what impact this has on this 
particular bill.
  But I think the main reason, Mr. President, for having this 
provision, and why so many of us on this floor tonight insisted that 
this provision be in the bill, is because it is a question of fairness, 
it is a question of equity.
  If we look at the tax burden that our Government has placed on 
working men and women and on their families, what we find is that that 
burden has really impacted how people live their lives today. Let me 
give you a statistic. If you took a family with four children in 1960 
and compared them with a family of four children in 1995, what you find 
when you strip away inflation is that the tax burden on that family has 
gone up in real dollars 220 percent--220 percent. So each one of us has 
constituents back in our home States who are working second jobs, or 
third jobs or where the spouse has taken a second job or maybe taken a 
first job, who would not do that but for the fact that this tax burden 
has been imposed on them.
  And so you have one of the spouses working one job full-time just to 
pay the taxes, just to keep the family standard of living where they 
believe it should be and to help educate their children. That is the 
perverse impact that the Tax Code has had on families, and the fact 
that the Tax Code has not, over the years since 1960, for example, kept 
up in any way, shape or form with inflation.
  What this $500 tax credit does is helps to rectify that injustice and 
bring some equity to the tax system.
  Mr. President, another major provision of this bill that we have in 
front of us has to do with welfare. I believe that this bill is an 
essential step toward creating jobs and opportunity for the American 
people, and I believe that the welfare provision goes a long way in 
doing that.
  This particular provision encourages the culture of work instead of 
the culture of welfare. In the case of the welfare provision, again, 
there has been a lot of talk about dollars and cents, and those 
certainly are important. In the long run, I think this provision is 
going to save money, but that is really not the main reason it is in 
this bill.
  It is really not the most significant thing about this welfare 
provision, because in this bill, we are changing the culture. In this 
bill, we are turning our back on the last 30 years where what we really 
have been doing in this society--it has been unintended--but what we 
really have been doing is keeping people alive. We have been feeding 
people, we have been keeping them on welfare.
  I guess we have done a pretty good job in that respect. But what we 
really should be doing is what we are doing with this bill, and that 
is, moving from a system of welfare, whose goal is to maintain people, 
to a system of welfare whose goal is to help people realize the 
American dream, to help them get themselves off welfare so they can 
fully participate in the great American dream.
  Let me briefly discuss, if I can, Mr. President, how this bill does 
this. This bill promotes work, not welfare. It proposes radical change 
based on the principle that the only way to succeed in reforming 
welfare is to get welfare out of Washington, DC. We are only going to 
change welfare when we turn the power back to the local communities, we 
turn the money back to the local communities. Washington, DC, has 
demonstrated for decades that it cannot reform welfare.
  The innovation that has occurred in the welfare area in the attempt 
to get people to work has not occurred over the last few years in 
Washington. Where you see the innovation is in the 50 States. The 
States have truly become the laboratories of democracy. And so what we 
have seen in the last few years is Governors and State legislatures who 
have had to petition Washington, have had to come hat in hand to 
Washington and deal with some unelected bureaucrat to ask permission to 
be bold and innovative and to try a new program back in their home 
State.
  What we are saying with this bill is enough is enough, we trust the 
States. That is where the innovation has been. That is where the 
changes are going to be made. Let us get the money out of Washington, 
get the power out of Washington.
  Real change is only going to come, Mr. President, at the State level. 
And so the thrust of this bill is, as I said, to get the power and the 
money and the decisions out of Washington, DC.
  It will take the States time to fix this broken system. I think we 
have to be very realistic about this. Welfare did not become a wreck 
overnight, and it is not going to be fixed overnight. In fact, it will 
not get fixed at all if the power course stays here at the Federal 
level.
  The welfare provisions contained in this bill will help accomplish 
this historic transfer of power away from 

[[Page S15659]]

Washington. It will transfer welfare responsibility to the States in 
the form of block grants.
  The bill would also establish a tough new uniform work requirement 
for welfare. Next year, under this legislation, to continue receiving 
block grant money, States will have to make sure that at least 25 
percent of the people on welfare are working in return for the benefits 
that they receive.
  I ask for 3 additional minutes.
  Mr. ABRAHAM. Mr. President, I yield 3 minutes to the Senator from 
Ohio.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. DeWINE. Mr. President, that percentage will continue to rise 
every year, and by the year 2000 at least 50 percent of those receiving 
welfare will have to work.
  The only long-term solution to welfare is work. This reconciliation 
bill recognizes this basic commonsense fact.
  I am especially pleased by some of the improvements we were able to 
make during floor consideration of the bill. We established, when we 
were debating the welfare bill, a rainy-day fund to help cover economic 
emergencies, creating a grant fund of Federal money that will help tide 
States over in the event of a recession.
  We also made it easier to track deadbeat parents. We know that we 
could reduce the welfare rolls by up to two-thirds if deadbeat parents 
would just pay their child support. Years ago, I was a prosecutor in 
Greene County, Ohio, and I learned then firsthand how difficult it can 
be to track down these deadbeat parents. You get banking information 
about them on a yearly basis, you find out their assets, find out their 
location, just in time to discover they vanished once again.
  This bill would provide this vital tracking information on a 
quarterly basis, once every 3 months, not once a year. It will be a big 
plus for our efforts to track down the deadbeats and, thus, reduce 
welfare costs and, perhaps most important of all, we will give States 
credit for helping people avoid falling into the welfare trap.
  We have found that helping people before they get on welfare through 
job training, job search assistance, and similar measures is a cheaper 
and more effective way to help them than simply waiting for them to 
fall off the economic cliff and become full-fledged welfare clients.
  In conclusion, Mr. President, I strongly support the idea that we 
have to make welfare recipients work, but we need to make sure that 
meeting the work requirement does not become an end in and of itself. 
The goal, after all, is to help people avoid getting caught in the 
welfare trap in the first place. This bill gives States credit toward 
the work requirements for the efforts they make to help people stay off 
welfare. It will help keep States focused on the real problem: Making 
sure fewer and fewer people need welfare in the first place.
  With these changes and the underlying idea of promoting work and 
getting welfare out of Washington, the Senate welfare reform package is 
a major step toward breaking the cycle of welfare dependency once and 
for all.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. ABRAHAM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. ABRAHAM. Mr. President, I yield 10 minutes to the Senator from 
Tennessee.
  Mr. THOMPSON. Does the Senator from North Dakota wish to go next?
  Mr. DORGAN. How much time remains on each side?
  The PRESIDING OFFICER. There are 26 minutes on the minority side and 
30 minutes on the majority side.
  Mr. DORGAN. I defer to the Senator from Tennessee.
  Mr. THOMPSON. Mr. President, I thank the Senator from Michigan. I 
also am strongly in support of his amendment. I think, as he says, 
eliminating fraud and abuse from the Medicare system certainly is not, 
in and of itself, going to cure the problem we are faced with. But it 
has to be part of the package and it represents doing something. I 
applaud his efforts in that regard. I also applaud the comments just 
made by the distinguished Senator from Ohio and his comments about the 
welfare portion of the reconciliation package.
  Mr. President, I speak from a little bit different perspective than 
many of those who have spoken on the reconciliation package. I am a new 
Member to this body. I have not run for elected office before. I ran 
for the U.S. Senate. I decided to run for this body because I felt--as 
I think a lot of other people in this country feel today--that our 
country is at a crossroads, that our chickens have come home to roost, 
and it is time to make some strong decisions, and they are going to 
have to be made by people of courage and conviction. I felt that I 
could play a small part in making the difference, in helping make that 
happen.
  It is all coming down now to these last few days, and that 
opportunity is going to be given to me, and it is going to be given to 
everybody in this body. Everything we have done in the last 10 days has 
led up to this time, has led up to this day of judgment. This is a day 
of judgment for ourselves as individuals. Some would say it is for our 
party, but it is more importantly for us as a body and us as a nation. 
I think those difficult choices have to be made.
  We are talking essentially here about change, Mr. President--change 
from the way that we have done things in the past. Change is always 
somewhat painful. Change is never easy, but change we must have.
  There are legitimate issues to be debated and discussed, without 
question. I think it is quite clear that there are basically two 
different philosophies in this Chamber, as we approach these issues and 
problems. One believes that the Government, by growing larger and 
spending more money, can solve these problems, in the face of all the 
evidence to the contrary. We, on the other hand, believe that 
Government ought to do those things that Government does best, that we 
should shrink the size of the influence of the Federal Government on 
people's lives, give more power back to the States, back to the 
localities, and leave more dollars in the pockets of people who earn 
those dollars. It is a pretty simple proposition.
  But there are legitimate issues. There is a legitimate issue as to 
how far we should go with regard to Medicare. Should we apply a Band-
Aid? Sometimes a Band-Aid can work perfectly well for short periods of 
time. But the question is whether or not we should apply that Band-Aid 
or do something more serious for the future. Although, surely, we agree 
that something must be done.
  There is legitimate debate as to what extent we should keep 
centralized here, control of the welfare program, or to what extent we 
should give those responsibilities back, closer to where the problem 
is. Although, surely, there can be no debate that we indeed have a 
failed welfare system and that something must be done.
  There is even a legitimate debate with regard to a balanced budget. A 
while back, some were thinking maybe we did not really need one. 
Apparently, now we are all in agreement. We can debate those 
priorities, but, surely, we are all in agreement that we cannot 
continue down the road we are traveling on now, and that the next 
generation does not deserve it.
  We can debate tax cuts. We can debate the effects of those tax cuts. 
But, apparently, we even agree across party lines and with the White 
House with regard to the need for tax cuts--the President having 
acknowledged that tax cuts are indeed needed.
  So these are legitimate items of debate, and I have been looking 
forward to a discussion of those issues. We are in the midst of it now. 
I think the discussion tonight has been good. I must say that, 
throughout the day, it has not always reached a level that I would like 
to see reached in this Chamber. We have seen some mean-spiritedness, 
and we have seen some calls to fear. We have seen appeals to envy and 
appeals to greed. One Member, today, suggested that those who espouse 
our philosophy should be ashamed of ourselves. Another Member today, on 
the other side, said that apparently the only elderly people we know 
are those who live in Beverly Hills, which would come as a real shock 
to my mama in Franklin, TN. But that was said today. It has been 
implied that those on the other side of the aisle are the only ones who 
have any concern, any care, any compassion because, indeed, they are 

[[Page S15660]]

the ones who are willing to send out more dollars from Washington to 
solve those problems, as they have solved them in times past.
  Mr. President, it has come now to a time where we must put 
partisanship aside. We can have legitimate debate on legitimate issues. 
I think the time is well past when we should be attacking other 
people's motivations as we reach to solve these problems, because some 
of us must take note of the fact that some of the ones arguing and 
screaming so loudly about these changes being made have been here for 
some time and have witnessed this legislation that has come out of this 
body and the other body, which has contributed to the problem over the 
last 40 years--much more than it has contributed to the solution, it 
has contributed to the policy of neglect and one that has, in every 
respect, failed. It has operated under false assumptions and false 
policies that must now be corrected. It is on our watch now--those who 
are coming in and who have been here a while. It is on our watch now, 
and we have to do something about what has been going on here for the 
last 40 years.
  We have a lot of talk about the blame and partisanship on this side 
of the aisle and the other side of the aisle. I suggest that there is 
enough blame to go around, Mr. President. But we are now cleaning up 
after the act of the last few decades that was based on the proposition 
that we can eradicate welfare in this country, that we can eradicate 
poverty by spending more dollars on it. We spent $5 trillion and got 
about the same level of poverty, along with a lot of other socially 
undesirable results, which we surely must all agree on.
  In 1965, the Ways and Means Committee estimated that the hospital 
insurance part A Medicare would cost $9 billion to finance by 1990. In 
1990, hospital insurance actually cost $67 billion. That is quite a bit 
of disparity, even by congressional standards. Medicaid was intended to 
cost a billion dollars annually. Expenditures ballooned to $76 billion 
in 1992. In 1995, it went to $89 billion. That is just the Federal 
Government part alone. The States contributed $67 billion, in addition 
to that. False assumptions, which led to bad policies, which basically 
said, let us put this down and get to the next election and get an 
issue for the next election and on down as far as we can carry it, 
election after election, and let somebody else take care of the 
consequences. Well, we are now taking care of the consequences, we are 
taking care of those estimates that turned out to be so wrong.
  What has that wrought? It is certainly more than an academic 
exercise. It has wrought a Medicare trust fund that is virtually 
bankrupt, a welfare system that is morally bankrupt; it has wrought a 
fiscal situation that is going to bankrupt the next generation if we do 
not do something about it. It has led us to a point where we have the 
lowest savings rate in the industrialized world. We have one of the 
lowest investment rates. We have a growth rate now that is about half 
of what it should be, about half of what it normally is coming out of a 
recession. That has resulted in leaving a legacy to those who come 
after us in a few short years of even higher and higher payroll taxes, 
of even higher interest rates, of not being able to compete in the 
international marketplace, and depending more and more on foreign 
dollars to subsidize our debt. That is what these miscalculations have 
wrought.
  Yet, from everybody in this body, on both sides of the aisle, all you 
hear talk about is the ``working person,'' or the ``working family.'' 
Everybody is looking out for the working family. Everybody is taking 
care of those workers, and talking about the people in the upper income 
levels as if they were born that way and none of them ever worked. We 
know who we are talking about.
  What have we done for the working family? Those are the folks who put 
me where I am standing here today. Those are the folks that elected 
most of us in this body. We ought to be looking out for them. But have 
we been doing that? Do our actions belie the words ``looking out for 
the working family''? We have seen income levels stagnate, and in 
looking out for the working family we have seen among young working 
people actually income levels decline in this country.
  Among working people, we have seen greater and greater tax burdens 
laid upon them, up to 220 percent. The Senator from Ohio a minute ago 
was exactly right. The very people who benefit from this $500-per-child 
tax credit--that is what we have been doing for the working family. I 
can hear working folks all across America saying, ``Please don't help 
us out anymore. We can't stand it.''
  What is the solution to all of this? We have seen the President's 
first budget which gave $200 billion deficits as far as the eye could 
see. Nobody took it seriously, and it did not get one vote in this 
Chamber.
  We saw the President's second so-called budget that created $245 
billion out of thin air by changing some assumptions. Nobody is taking 
that seriously either. Apparently it did not get one vote in this 
Chamber.
  Apparently, the idea is not to come forth with any constructive idea 
at all, not to help contribute to the solution, but lay the wood on 
those who are trying to solve the problem, and to keep on taxing and 
keep on spending.
  With regard to the Medicare solution, my friends on the other side 
are correct in claiming that their $90 billion solution would keep the 
Medicare trust fund solvent until 2006, but in 2010, the last year the 
Republicans would keep the trust fund in the black, the Democrats would 
leave it in the red.
  That date is important, because 2010 is the year the human wave of 
baby boomers really hits--those baby boomer retirees. Everyone 
acknowledges that further changes in Medicare will undoubtedly need to 
be made at that time. It is a different situation entirely. To meet it 
on an equilibrium is what we are trying to do, or not to meet it 
already $300 billion in arrears.
  My time is running out. I want to address the tax component that we 
have heard so much about. The claim, of course, that the problem here 
really is that we want tax cuts for those who do not need them, and, 
therefore, the Medicare problem would not be as big, I can only hope 
the Washington Post--every knowledgeable observer, Mr. President, and 
traditionally Democratic, have basically made the same statement. The 
Washington Post on September 25, 1995, said, ``The Democrats have 
fabricated the Medicare tax cut connection because it is useful 
politically.''
  Mr. President, this business about tax cuts for those who do not 
really need them--I find it interesting, kind of parenthetically, and 
this is historically espoused by those who want higher and higher 
taxes. We just had the largest tax increase in the history of the 
country and now that is supposed to be locked in and not touched.
  We meet every year, practically, in this body, and decide who does 
need it, who deserves it. This group this year deserves a tax break. 
This group this other year does not deserve a tax break. So we have a 
tax bill. We had a tax bill in 1969, in 1971, 1976, 1978, 1980, 1981, 
1982, 1984, 1986, 1990, 1993--major tax bills. That does not include 
the miscellaneous tax bills. And every time, we in this body decide who 
is deserving and who is not--passing judgment on our fellow citizens as 
to whose money we ought to take and who we ought to give a little back 
to, continuously focusing on the ``who,'' the ``who''--not the what.
  In other words, who is going to be hit? Continuing to focus on how to 
divide up the pie, not focusing on policies as to how to make the pie 
bigger.
  My time, I am sure, is close to being expired, so I will address this 
in a little bit more detail at a later time.
  In conclusion, I urge that we get down to serious business, that we 
put the details of this aside. It is painful. There are things in this 
bill of this magnitude that are going to pain us in various areas.
  The bottom-line question is whether or not we will get this fiscal 
house in order. We take the first step, which is only a first step. If 
we do everything we are talking about and go through all the pain, this 
is just the first step. We will have to continue to do it year after 
year after year. I suggest we get used to it and get on with it.
  Mr. EXON. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator has 26 minutes 50 seconds, and the 
other side has 15 minutes.
  Mr. EXON. Mr. President, in order of their recognition by the Chair 
in this 

[[Page S15661]]

order, I wish to allocate the time remaining with 8 minutes to the 
Senator from North Dakota, followed by 10 minutes to the Senator from 
Illinois, and then 5 minutes to the Senator from New Mexico. I yield 
myself 3 minutes at this time.
  All day long, Mr. President, we have had Republicans beating up on 
the President of the United States. I simply say that today the 
President announced that the year-end budget deficit was 160-some 
billions of dollars. That is the lowest deficit we have had for a long, 
long time in the United States of America.
  I simply say to those who have been in this body now not a full year, 
none of them can hardly take any credit for the deficit going down 
dramatically under the leadership of the President of the United 
States.
  While we all tend to beat up on the President of the United States 
once in a while, I think it is well to note that under his leadership 
and under his direction, under his determination, and in the policies 
that he has fostered, he has put his political muscles where his mouth 
is, and the deficit has come down dramatically.
  I simply say that the last time we had a deficit this low was way 
back in 1989 at $153 billion. The intervening years it has been $221 
billion, $270 billion, $290 billion, $255 billion, $203 billion, and so 
forth.
  I simply say, Mr. President, that once again the President of the 
United States should be saluted for at least bringing the deficit down 
into the $160-billion range. I want to get that for the record because 
there have been so many brick bats thrown at the President of the 
United States today.
  I yield the floor.
  Mr. DORGAN. Mr. President, I have listened in recent hours to 
discussions by people who talk about what has been going on around here 
for the past 40 years in some disappointing way. Let me put in a good 
word for what has been going on in this country for the past 40 years.
  I wonder how many people think that somebody would like to live 
elsewhere? Do you think that we have not progressed in this country in 
40 years? Do you think Medicare does not matter to people? Do you think 
things are not better for a lot of Americans than they used to be? Do 
you think in this century the fact that we decided to provide 
electricity to the farms, that somehow that was not relevant? Created a 
Social Security system; that did not matter? Marshaled the will and the 
strength to beat back the forces of fascism and Nazism? Survived the 
Depression and created a period post-Second World War of unprecedented 
growth and opportunities?
  I guess it is fine to talk about what has been going on the last 40 
years. I happen to think this is a pretty good place. I do not see 
people rushing to leave. If they go, I do not know where they would go. 
Would they go to Tegucigalpa because the mail service is better? 
Krakow, because they have better roads? Budapest, because they have a 
better telephone system? I do not think so.
  The fact is we ought to talk about what is right in this country for 
a while. Some of the things that are right in this country are now to 
be taken apart by 1,950 pages of legislation on which there has been no 
hearings, which we received yesterday afternoon about 4 o'clock, and on 
which we now have 10 hours of debate left.
  It is a fairly disappointing thing to watch here in the Senate today. 
This 1,950 pages contains substantial policy changes--Medicare 
especially. Medicare matters to a lot of senior citizens. We offered an 
amendment today about 8 hours ago. It is very simple. It does not take 
10 staff people to explain it to anybody here. It is not rocket 
science. It is very simple. It says those who propose to reduce the 
amount needed for Medicare by $270 billion--and that is what the 
proposal is--$270 billion less than is needed to fund Medicare in the 
next years, we say to those who want to do it, look, you also want to 
give a tax cut. We would like you to modify the tax cut and not provide 
tax relief to the upper income Americans, and use the savings from that 
limitation to reduce the hit on Medicare so that we are reducing 
Medicare by about the $89 billion that the trustees say are necessary 
to make it solvent.
  Shorthand--reduce the cut on Medicare to about $89 billion. That is 
all you need to cut in Medicare to make it solvent, and get the money 
for that by eliminating the tax cut for the affluent Americans.
  Very simple. It does not take 8 hours to figure out what you will do 
about this. We do not need people sitting around with fingernail files 
and clippers and just ruminating about the world.
  We have 20 hours on this bill. We offered this amendment 8 hours ago. 
Do Members know what we are talking about now? We are talking about an 
amendment on Medicare fraud. This amendment ought to be accepted in a 
nanosecond. Want to talk about this forever? God bless you, come and 
get time next week and talk to the whole world for 40 hours until you 
are blue.
  This amendment is fine. It is not controversial. Why are they talking 
about it? Why are they eating up time on this clock? Because they do 
not want to talk about our amendment. They certainly do not want to 
vote on our amendment. And it is not just this amendment. There are 
others exactly like it.
  We have family farmers out there who know that the farm bill is in 
this piece of--reconciliation, this reconciliation bill. This budget 
bill has the farm bill in it.
  We are supposed to write a farm bill this year. We did not. So what 
do they do, they put whatever they have written in this. There are no 
hearings, nobody knows what is there, really. I mean, it is a real a 
slap in the face for family farmers. This will cut farm income in North 
Dakota by 25 percent. The first time in history they throw a farm bill 
in a reconciliation bill --first time.
  What else is here? Oh, a note to families in middle-income 
circumstances that we want to make it tougher for you to send your kids 
to college because we cannot afford student financial aid. So we tell 
the old folks we cannot afford Medicare. We can afford a tax cut for 
the wealthy; cannot afford Medicare. We cannot afford student aid for 
middle-income families whose kids are about to go off to college, but 
we can afford a tax cut for the affluent. We cannot afford Head Start 
for 55,000 kids in the appropriations bill, but we can afford a tax cut 
for the most affluent people in the country.
  And people over there say, ``You are being too sharp in your 
criticism. Class warfare.'' You bet it is class warfare. It is all 
here, 1,950 pages of class warfare, in this bill. And do not take it 
from me, take it from your colleague, Senator Specter, who said it on 
the floor yesterday. It took a little courage for him to say it, and I 
admire him for saying it.

       . . . the pain of the spending cuts goes to the elderly, 
     the young, and the infirm while allowing tax cuts for 
     corporate America and those in higher brackets.

  You know what he said yesterday, and in your secret moments you know 
what he said was right. He said that if it were a secret ballot, 20 of 
you on the other side of the aisle would vote against this because you 
know it is the wrong priorities.
  We have spent 8 hours and have not had a vote. We have several more 
people who want to speak to the amendment on Medicaid fraud. I 
compliment the Senator for offering it. I support it and think we ought 
to accept it in 4 minutes. But instead, we will take 2 hours on this, I 
suppose, because the other side does not want to vote on an issue that 
deals with hundreds of billions of dollars of Medicare for the elderly 
juxtaposed against tax cuts for some of the most affluent Americans.
  I know there has been a lot of nonsense on this floor these days, but 
I just want one person to bring a chart to the floor that tells me this 
statistic is wrong: on average, the 51 percent of American families 
with incomes under $30,000 get a tax hike in these 2,000 pages. That is 
a fact. It comes from the Joint Tax Committee. We do not run that. Half 
of the American families, on average, get a tax hike. Guess which 
half--the top half? Oh, no. The bottom half, the very folks the people 
who are pushing this say they want to help. It is a curious way to help 
people, in my judgment, with a tax hike.
  Who gets the benefit? For everybody that finds a loaf someplace, 
somebody else is getting it buttered. So who gets their bread buttered 
here? The top 1 

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percent, of course--big tax cuts. I want somebody to come to the floor 
in the next day or so, just to tell me this chart is wrong and tell me 
how it is wrong. You know it is right. Senator Specter knew it was 
right yesterday when he spoke. And you can do all the high-wire acts 
and you can do all the half gainers and all the gyrations you want, 
build all the word castles in the sky forever, and it is not going to 
change the central facts.
  Old folks are going to pay more and get less health care. They are 
going to pay more for it and get less. Family farmers get the short end 
of the stick. Middle-income families are told college education is not 
so important for your kids. And young kids are told education is not a 
high priority for you--whether it is Head Start and dozens of other 
programs.
  So I just ask people around here, when are we going to vote on 
something we offered 8 hours ago? A simple proposition. I do not have 
to read it again. Everybody in here understands it and everybody here 
understands why we are not voting on it. We are going to have 40 or 50 
votes, I suppose, on this bill. But we are draining off all of this 
debate time on a noncontroversial issue. I understand why, but it is 
not right.
  The rules provide 20 hours on this bill. We have limited time to deal 
with things that literally affect people's lives more than almost any 
measure in the last 30, 40 years. And we are told we just cannot vote 
on these issues up or down. We want to go talk about Medicare fraud.
  I see Senators on the floor who have been working on this for a long 
while, and I commend them. I have worked on it. But I tell you, our 
constituents would much sooner understand how this bill affects their 
lives in a real way than deal with this noncontroversial amendment, an 
amendment we should have accepted 2 hours ago.
  I yield the floor.
  The PRESIDING OFFICER. The time of the Senator has expired. The 
Senator from Illinois is recognized.
  Ms. MOSELEY-BRAUN. Mr. President, I commend my colleague from North 
Dakota for a brilliant statement. He has such a way with words, and I 
congratulate him for putting the issue in context.
  Mr. President, at the outset, I want to make it clear that I am one 
Senator who believes that major changes are critically needed if we are 
to bring the federal budget back under control. I also believe that 
major changes in our Tax Code are necessary to help generate new 
economic growth and to create new jobs.
  I do not think any of us should fear change. Indeed, change is 
critically important if we are to succeed in meeting the challenges the 
future holds for us, for our children, and for future generations. The 
right kinds of changes can help create a climate that will produce the 
new jobs and economic growth that all of us want to see. The right kind 
of changes can open up opportunity, and help make this an America that 
makes use of all of the talents of all of its people, which benefits us 
all. The right kind of changes can help create a climate that will help 
Americans provide for their families and give them what we have had--
the opportunity to live better than our parents did.
  There is no argument but that change is needed. I strongly agree with 
the statement made in a letter written by the Competitiveness Policy 
Council on October 12 when the council issued its report entitled 
``Lifting All Boats--Increasing the Payoff from Private Investment in 
the U.S. Economy.'' The cover letter, talking about the report's 
conclusions, stated: ``many of the Federal laws and regulations that 
influence private investment decisions were developed before World War 
II, and are out of sync with current economic and financial market 
conditions.'' That is exactly right!
  Another of the council's recently issued major reports, entitled 
``Saving More and Investing Better--A Strategy for Securing 
Prosperity'' makes it very clear why we must change Federal budget and 
tax policies, and other Federal policies. That report found, among 
other things, that:

       More Americans are employed, yet they are working longer 
     hours and for less pay;
       Productivity growth has improved since 1990, yet it has not 
     translated into higher compensation for workers;
       * * * public dissaving has been reduced by 2 percent of GDP 
     since 1992 through cuts in the Federal deficit, [yet] the net 
     national savings rate continues to fall * * * primarily due 
     to the downward trend in household saving, as Americans 
     currently consume 97 percent of their household income;
       * * * private investment is growing yet the stock of 
     existing plant and equipment is flat; and
       * * * improvements in product quality and delivery, lower 
     wages, corporate restructuring, the depreciating of the 
     dollar and government support have helped American goods and 
     services gain a greater share of world markets, yet the trade 
     deficit is reaching historic highs.

  The council set out three goals--goals that I believe make a great 
deal of sense--to deal with these and other problems raised by its 
reports:
  First, doubling productivity growth to at least 2 per cent per year;
  Second, achieving 3 percent annual GDP growth, in order to reemploy 
workers made redundant through productivity improvements; and
  Third, eliminating our current account deficit, in order to reduce 
U.S. reliance on foreign capital, and helping ensure that the other 
goals can be sustained over the long run.
  I think these are goals this Congress must pursue, both through the 
Tax Code through Federal spending decisions, and through the other 
actions of the Federal Government. One critical question the Senate 
should be asking is whether this reconciliation bill moves us toward 
these goals or not. After all, restoring Federal budget discipline is 
not just an accounting game. Changing Federal policies is not just 
about making the numbers line up. The reason we are want to deal with 
the deficit problem, the reason the right kinds of changes are so 
important, is what they will mean to the American people, to the kind 
of opportunities our children will enjoy, and to our collective future 
as a nation. Tragically, this reconciliation bill does not move us 
toward these goals. It does not pursue the right changes. It is 
contentious and controversial precisely because it is shortsighted. We 
currently enjoy solid economic growth and low unemployment. Yet 
Americans are increasingly anxious about the future.
  More and more Americans worry about whether they will be restructured 
out of their jobs. Americans entering the work force worry about 
whether there are enough good jobs out there for them to find. And most 
Americans increasingly worry about being priced out of the American 
dream.
  Unfortunately, there is substantial cause for this anxiety and this 
worry. All too many Americans have been restructured into lower paying 
jobs. Eighty percent of Americans are not seeing any real increase in 
their pay. Yet between 1989 and 1990:
  The average price of a home increased from about $76,000 to almost 
$150,000, an increase of almost 100 percent;
  The average price of a car went from about $7,000 to $16,000, an 
increase of over 125 percent, and the number of weeks an American had 
to work to pay for the average car increased from about 18 weeks to 
over 24 weeks, an increase of about one-third;
  The cost of a year's tuition at a publicly supported college 
increased from $635 to $1,454, an increase of almost 130 percent, and a 
year's tuition at a private college increased from an average of $3,498 
to $8,772, an increase of 150 percent; and
  Health care costs increased at close to or at double digit rates each 
year.
  We have a responsibility to do what we can to help address the causes 
of that anxiety. We have a responsibility to help ensure that the 
opportunity to achieve the American dream is open to every American--
and that the dream is not priced out of reach for many Americans. We 
have a responsibility to ensure that Government tax, spending, and 
regulatory policies do not undermine the opportunity for Americans to 
find a good job, to keep a good job, to be able to provide for their 
families, and to help their children get ready to succeed in an ever 
more competitive world economy. We have a responsibility to adopt 
policies that encourage, rather than discourage, the creation of the 
new good jobs we so greatly need, and the kind of solid, sustainable 
economic growth on which our individual and collective futures so 
fundamentally depend. We have a duty to ensure that Government policies 
help, rather than hinder, Americans who want 

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nothing more--and nothing less--than what we have all had: the 
opportunity to live better than our parents did.
  We have to meet these responsibilities based on as complete an 
understanding as possible of the way our economy works now, and the way 
it is likely to work in the future, and not simply on the way it may 
have worked in the past. We have to meet these responsibilities without 
falling into the trap of doing the tax and budgetary policy equivalents 
of fighting the last war, instead of preparing for the next one.
  Yet, that seems to be exactly what this reconciliation bill is all 
about. It does not meet our responsibilities to our children and to our 
future. Its remedies are based on a foundation of myths, and a time 
that has long since passed, instead of the economic realities that the 
American people live every single day.
  There is no question that our budgetary situation has changed 
dramatically since the Federal Government last balanced its budget in 
1969. In 1969, the national debt was $365 billion; now it is almost 
$4.9 trillion. In 1969, interest on the national debt cost only $12.7 
billion; this year, interest alone will consume over $230 billion--over 
$40 billion more than total Federal spending in 1969. And the future 
holds even greater problems. Last year, I served on the Bipartisan 
Commission on Entitlement and Tax Reform. Finding No. 1 of the 
Commission's interim report to the President made it abundantly clear 
what will happen if we do not address the critical budget problems 
facing this country. The chart accompanying that finding was headlined, 
``Current Trends Are Not Sustainable''--a very understated way of 
pointing to the very real crisis we face. If we do nothing, by the year 
2012, entitlement spending and interest expense consume every single 
dollar of Federal Revenue. If we do nothing, by 2030, Federal outlays 
could consume 37 percent of the entire U.S. economy, up from 22 percent 
today. If we do nothing, by 2030, just paying the interest on the 
national debt will take over $1 of every $10 our economy produces.
  The Commission's reports are compelling evidence that we must act to 
get the Federal Government's fiscal house in order. They make it clear 
that we cannot afford to act based on any political party's or interest 
group's budgetary mythology. They reinforced my conviction that an 
amendment to our Constitution is good public policy.
  That same objective--a balanced budget, restoration of fiscal 
discipline--is the stated objective of the reconciliation bill we are 
now considering. But what kind of message is being sent, what are the 
American people really being told, if the same bill that takes $893 
billion out of the spending side of the budget over the next 7 years 
also takes $245 billion out of the revenue side of the budget. What 
kind of message is being sent if a bill that is supposed to lower 
deficits actually increases them by $93 billion over the next 7 years 
in order to help finance tax cuts?
  The reason greater fiscal discipline is important is that we owe more 
to our children than a legacy of debt. How is that consistent with 
giving ourselves a tax cut now, thereby creating more debt for them to 
repay?
  The tax changes now contained in this bill are very substantial in 
comparison to the deficits we face. They amount to 15 percent of the 
$1.6 trillion in deficits forecast for the next 7 years if we do not 
act to put our fiscal house in order. And they are an even larger 
percentage--38 percent--of the $638 billion in deficits forecast for 
that period in the budget resolution we are now working under. That is 
why the tax cut provisions of this bill have such an impact on the 
deficit reduction objective that both Democrats and Republicans want to 
achieve.
  A tax cut right now is inconsistent with achieving real deficit 
reduction. And it is important to keep in mind that, even if the Senate 
does not act on these tax proposals, we would not be choosing to move 
toward a balanced budget by increasing the burden on American 
taxpayers. Whether these tax proposals become law or not, Federal 
revenues are not growing faster than our economy. Federal taxes 
consumed 19 percent of the U.S. Gross Domestic Product (GDP) in 1994. 
That is 1 percentage point less of GDP than Federal revenues accounted 
for a quarter of a century earlier, when the Federal Government last 
balanced its budget, back in 1969, by the way.
  The rationale for tax cuts is that they will help promote savings, 
economic growth, and the creation of the kind of new, well-paying jobs 
Americans need. And it is true that $245 billion in tax cuts sounds 
like a number large enough to provide a substantial opportunity for 
those kinds of changes to happen. When compared to Federal revenues 
that will total more than $11.3 trillion over the next 7 years, 
however, that figure shrinks dramatically. It amounts to a tax cut of 
only about 2.1 percent. And, according to the Joint Tax Committee, it 
amounts to a cut in average effective tax rates for American taxpayers 
of only eight-tenths of 1 percent.
  Moreover, even this tax reduction is illusory for many Americans. The 
reconciliation bill, to cite one example, creates a student loan 
interest tax credit, an idea I support. This tax credit puts 
approximately $1.5 billion in the hands of American taxpayers to help 
pay student loan expenses. However, the reconciliation also contains 
provisions designed to save $10.8 billion over that same 7-year period 
by making student loans more expensive. On a net basis, therefore, 
families with students are likely to be worse off, not better off.
  The bill also creates a $500 per child tax credit for families. But 
many EITC families won't see much net relief, because once the EITC 
cuts are fully phased in, they will lose, on average, $457 in annual 
tax relief they are now receiving. For many of them, therefore, the 
effect of the tax provisions in this bill is simply to move their tax 
benefits from one line of their tax returns to another line.
  And even middle income Americans will not receive much relief from 
the tax provisions in this reconciliation bill. Both the Joint Tax 
Committee and the Treasury Department agree that Americans with annual 
incomes of $30,000 or less, which is over half of all Americans, will 
see no net tax relief at all from this bill.
  In the health care area, the bill calls for creating medical savings 
accounts, providing more favorable tax treatment for long-term care 
insurance, and a number of other changes. The benefit to American 
taxpayers of these changes amounts to approximately $12 billion. 
However, the bill also makes changes in Medicare and Medicaid that will 
take $452 billion out of those two programs over the next 7 years. The 
changes include doubling the Medicare part B premium, and the Medicare 
part B deductible. For most Medicare and virtually all Medicaid 
recipients, the tax relief they will receive under this bill, 
therefore, will probably not come close to covering their increased 
health care costs. And if, as many believe, one result of these 
Medicare and Medicaid changes is to put additional upward pressure on 
health insurance costs, than it is not just the elderly, the disabled, 
and the poor who will see their tax relief overwhelmed by increased 
health care costs, millions of other Americans who are not currently 
using these two health care programs will also face that same reality.
  Cutting taxes is the oldest political trump card, and it has not lost 
its power. And tax cuts are easy to understand. The temptation to 
promise the proverbial ``chicken in every pot,'' is too great for some 
to resist. But imposing new costs on American families while only 
partly offsetting these new costs with tax cuts does not represent real 
tax relief; instead, it is, at best, no more than a cynical shell game.
  And the proposed tax cuts are far from the only problems with this 
bill. The bill makes student loans more expensive, adding an 85 basis 
point fee to the cost of every loan, most, if not all, of which will be 
passed on to students. It adds 100 basis points, or one full percentage 
point, to the cost of what are called PLUS loans, which could add up to 
$5,000 in student loan costs for American families who use that student 
loan program. It ends the interest free, 6-month grace period which is 
designed to provide an opportunity for students to find a job after 
they complete their education, which adds another $700 to $2,500 in 
costs to student loans. And it actually increases, rather than 
decreases, the redtape and administrative costs associated with student 


[[Page S15664]]

loans, by backing away from direct loans in favor of using the banks to 
make student loans guaranteed by the Federal Government.
  The net effect of all of these cuts is to price college out of reach 
for more Americans. A study by two higher education economists--Michael 
McPherson of Williams College and Morton Shapiro of the University of 
Southern California concluded that each $250 increase in the cost of 
college will result in a 1-percent drop in the number of low-income 
students enrolling in college.
  And low-income students will not be the only students affected by 
these changes in student loans. Middle class American families with 
students in college or approaching college-age will also be affected--
all too many people will be unable to meet the new, higher costs, which 
means that their children will have their opportunities diminished by 
this bill, instead of expanded. We want a brighter future for our 
children, but if we are simply moving costs from the Federal balance 
sheet to the budgets of American families, we aren't helping them at 
all. That kind of approach does not meet our responsibility to American 
families or to our children, and it does not meet our obligation to the 
future.
  These kinds of changes may produce budget savings in the short run, 
but they are not in the long-term interests of our country; this is not 
the kind of legacy we want to leave our children. After all, our people 
are the most important asset our country has. If we are to compete 
successfully in the future, if we are to generate the kind of economic 
growth we need, and if we want expanded, rather than diminished, 
opportunities for our children--and their children--we simply cannot 
skimp on essential investments in education.
  We all know that education is the one of the most important 
determinants of the amount our children will earn in their lifetimes. 
In this increasingly technological age, education is ever more 
important. How, therefore, does it make budget sense, or any other kind 
of sense, to cut our investment in education, when one of the top 
purposes of this bill is to improve the legacy we are leaving our 
children, and to create a brighter future for our children.
  The bill's approach to health care is as shortsighted and misguided 
as its approach to education. Advocates of the bill's Medicare and 
Medicaid provision argue that the reconciliation bill does not ``cut'' 
either program; what is actually going on is simply a reduction in the 
rate of growth of these two programs from their current double digit 
increases to a bit more than 4 percent annually. They also argue that 
action is required in order to keep the Medicare trust fund solvent.
  If the only important thing is the narrow budget numbers themselves, 
that argument is correct. If, however, the economic and health care 
realities behind those numbers are also considered, the argument 
collapses.
  The truth is that this bill calls for reductions in Medicare of $270 
billion--three times what is needed to protect the trust fund. And the 
truth is that the aggregate spending levels are not the whole story, 
but only the beginning of the story. There are two factors driving up 
the cost of Medicare and Medicaid, and health care costs generally: 
demographic change, and cost inflation. The simple fact is that the 
number of older Americans is increasing far more rapidly than the 
population generally, and that the increases in the number of elderly 
Americans will accelerate even further early in the next century when 
the ``baby boomers'' begin to hit retirement age. This fact has 
profound implications for Medicare, and also for Medicaid--because 
spending for older Americans takes 70 cents of every dollar spent on 
that program. Both Medicare and Medicaid must increase substantially 
just to keep pace with the increasing number of Americans using those 
programs.
  Health care cost inflation is a perhaps even more important factor. 
Medicare and Medicaid inflation rates have been at double digit levels, 
or close to them, for a long time, and it is true that we have to get 
that inflation under control. However, this bill has no real plan for 
reducing health care inflation. Instead, its impact will be to reduce 
the quality of care and the health care choices available to millions 
of Americans. Under this bill hospitals and other health care providers 
will see over $200 billion less in reimbursement for services provided 
to Medicare patients, which will literally drive some of them into 
bankruptcy, and cause others to reject Medicare patients; Medicare 
premiums will double, as will deductibles; the two-thirds of all 
nursing home residents who depend on Medicaid will be thrown into 
jeopardy; and almost 9 million people, including almost 4\1/2\ million 
children, could be thrown off the Medicaid rolls.
  Again, what seems to be happening is that costs are not being 
eliminated by making the delivery of health care cheaper and more cost-
efficient, but by simply transferring costs from the Federal budget to 
the budgets of individual Americans. Medicare beneficiaries will not 
only see higher costs from the Medicare Program directly, but higher 
private insurance costs, as so-called Medigap insurance, which involves 
higher administrative costs and more inefficiency than Medicare--
becomes more expensive due to this bill. Medicaid recipients will also 
face higher costs--the average cost of a year in a nursing home is 
$38,000--for less health care. And every American will likely see 
higher health insurance costs, as hospitals push costs formerly paid by 
Medicare and Medicaid over to privately insured patients. Lewin-VHI, an 
independent research firm, found that the $452 billion in Medicare and 
Medicaid changes will force doctors and hospitals to raise their fees 
for private patients by at least $90 billion.
  Under this bill, Americans will get $245 billion in tax cuts, but if 
even half of the $452 billion in Medicare and Medicaid reductions show 
up in the budgets of individual Americans, then Americans are not 
better off at all. They deserve more than budgetary shell games. They 
deserve real reform--we need real reform--but all this bill provides is 
the rhetoric of reform, instead of the reality. The only reality it 
will deliver is less care and higher costs for every American. It takes 
a meat ax approach to health care system reform when a scalpel would do 
a better job.
  I have focused a lot on the impact this reconciliation bill will have 
on all Americans, Mr. President, but I cannot conclude without 
expressing my outrage and my dismay on how it treats the poorest 
Americans. The proponents of this bill say it reforms welfare, that it 
``reforms'' the EITC, that it ``reforms'' health care for the poor, 
that it ``reforms'' nutrition programs, and that it, along with the 
appropriations bills that encompass the rest of the program advocated 
by the other side of the aisle reform the rest of the social safety 
net. But these reforms are even less real than the health care reforms. 
Instead, these proposals represent a shredding of the social safety 
net. This reconciliation bill walks away from the working poor. It 
walks away from the welfare recipients who want to work. It walks away 
from poor children who want the opportunity to escape their poverty.
  It walks away from opportunity, from inclusion, and from making use 
of all of the talents of all of our people. It walks away from the 
problems of our cities, and of economically distressed rural areas.
  It calls for further reductions in welfare, even though welfare 
benefits per beneficiary have been declining for years. It fails to 
recognize the real problems involving child care, and access to jobs, 
and job training that have to be addressed in order to make real 
progress in reducing our welfare rolls by bringing people into the 
workforce. It ignores the fact that two-thirds of welfare recipients 
are children. It divides us from one another, viewing the poor as a 
cost to be cut, instead of as an asset to be developed. I could go on, 
and on, and on.
  Considering the overall impact of the bill, one has to ask the 
question, ``What do the supporters of this bill have against poor 
people?'' After all, Americans who make less than $20,000 get a tax 
increase, instead of a tax cut, under this bill. Americans who make 
less than $30,000 get no tax cut at all. And the poorest 20 percent of 
American families have to bear half of the total cuts in Federal 
spending. This reconciliation bill is so unbalanced that the 
distributional impact is--or should be --a stunning embarrassment.
  It is the long term that I believe must guide our deliberations. We 
must 

[[Page S15665]]

deal with Federal budget problems, but our objective must be to deal 
with our budget problems in a way that enhances our country's future, 
and our children's future. A bill that undermines education, that 
simply transfers costs from the Federal Government's balance sheet to 
the budgets of American families, and that needlessly jeopardizes, 
instead of reforming, our health care system, cannot end the anxiety so 
many Americans are experiencing.
  How can making education more expensive that is already too expensive 
be in our long-term national interest? How can cutting taxes by $245 
billion, at a time when we have $4.9 trillion in Federal debt 
outstanding, and at a time when we are experiencing nine-figure budget 
deficits every year, be in our long-term national interest. And how 
does lowering taxes for some Americans while pushing more health care 
costs, education costs, and so many other costs onto every American 
family help them better meet their own long-term objectives. Finally, 
how is walking away from the poor--and particularly poor children--
consistent with either our own long-term interests or our own core 
values.
  The answers are, of course, obvious. It cannot, it does not, and it 
is not. It does not meet the long-term needs of American families. It 
does not prepare our Nation or our children to meet the challenges the 
future holds. It does not include the kinds of reforms we need. All 
this bill offers is diminished opportunities, a loss of 
competitiveness, and a continuation of the current anxieties that so 
plague the American people. When it inevitably fails, its only lasting 
result will be to further increase the already pervasive cynicism that 
so poisons our public dialog.
  We can and must do better. We have an obligation to our country, to 
American families, to our children, and to their children to enact the 
kind of reforms that will help make our individual and collective 
futures brighter. However, the only way for this Senate to do the right 
thing is to first defeat the wrong one. I therefore urge my colleagues 
to join me in opposing S. 1357, the Balanced Budget Reconciliation Act.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. CHAFEE. Mr. President, I wonder if the distinguished Senator from 
Illinois would answer a question.
  The PRESIDING OFFICER. The time of the Senator from Illinois has 
expired.
  Mr. CHAFEE. Maybe I could have 5 minutes off the bill, if I might.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CHAFEE. Mr. President, the distinguished Senator from Illinois is 
a member of the Finance Committee. So she is familiar with some of 
these items, obviously. But I heard her say that under the Republican 
measure the Medicare part B premiums are going to double. What is her 
source of information for that? What is she basing that on?
  Ms. MOSELEY-BRAUN. I am going to have to find the record. But I would 
be delighted to get back to my colleague with regard to the effect as 
to some of the recipients of Medicare. The premium will double, and 
those are the numbers provided for us in committee. I would be 
delighted to get the base information. I do not have it.
  Mr. CHAFEE. I wonder if the Senator from Illinois is objecting to the 
affluent testing of the part B premiums.
  Ms. MOSELEY-BRAUN. Objecting to the affluent testing? No. I would say 
to my colleague that the point I have been trying to make in this 
statement today is that we are with this bill in all 20 instances 
robbing Peter to pay Paul, taking from one pocket to put in another, 
and that, therefore, the notion that we are just restraining, 
restoring, and saving the program becomes illusory given the overall 
impact of the changes that are suggested in this reconciliation bill.
  There do have to be changes. That is the main import of my statement 
as well. There have to be changes in the way that this program works. 
Certainly, affluent testing is one. Some parts of the affluent testing 
proposed in the Finance Committee are laudable and will help the 
program overall. But the overall impact on the way we treated the part 
B premiums will be to increase the cost on senior citizens and will 
double the costs in some instances.
  Mr. CHAFEE. Let me just say this. As the Senator knows, we both 
worked together in the Finance Committee on the Medicare matters. To 
say that the Republicans are doubling the premiums on part B is an 
inaccurate statement, if I may say so to the Senator. We maintain the 
percentage that an individual pays under the part B premium at exactly 
the same amount that is there now, the same amount that was there under 
a Democratic administration and under us. It is 31.5 percent.
  Now, if the predictions show that the costs of the premiums are going 
up, that has nothing to do with Republicans being in charge. That is a 
fact of costs of health care. But to say it is a Republican fault is a 
charge that I think is a very unfortunate one to make.
  I say to the distinguished Senator from Illinois that what we have 
done on the Medicare Program is justified. Have there been some 
deductibles increased? Yes, there have. But the part B premium remains 
at exactly the same percentage that exists now. And if the 
distinguished Senator from Illinois objects to the affluence testing, 
then she is on a different course than I am and I think most of the 
American public.
  Ms. MOSELEY-BRAUN. I would like to reclaim my time and to read to the 
Senator some numbers:

       Under this plan, increased premiums alone will cost every 
     elderly couple an additional $2,800 over the next 7 years. By 
     the year 2000, premiums will double to more than $1,100 per 
     beneficiary per year. Upper income beneficiaries--

  And this gets to the affluence testing that the Senator mentioned.

     will pay even more. For some of them, the premiums will 
     triple.

  It is documented. So maybe----
  Mr. CHAFEE addressed the Chair.
  Mr. DORGAN. Will the Senator yield to me?
  Ms. MOSELEY-BRAUN. I yield.
  The PRESIDING OFFICER (Mr. Santorum). The Senator from Rhode Island 
controls the time.
  Mr. CHAFEE. It is my time, Mr. President. I believe I am on my time.
  The PRESIDING OFFICER. The Senator from Rhode Island controls the 
time.
  Mr. CHAFEE. All right. Now, I would just say this, that those 
premiums she is discussing would go up no matter which administration 
and under whose program you are talking about.
  Ms. MOSELEY-BRAUN. But that does not make my statement in error, does 
it?
  Mr. CHAFEE. If the premiums are going up--and who knows what the 
costs are going to be out there because we do not set forth a dollar 
amount, as the distinguished Senator knows. We stay at exactly the same 
percentage. And if health care costs should go down, then the premiums 
will go down. If health care costs go up, then the premiums go up. To 
blame that on the Republicans and on our Medicare program is just a 
charge that I believe is highly unfair.
  Ms. MOSELEY-BRAUN. I would like to claim my time.
  Mr. CHAFEE. I yield back the remainder of my time.
  The PRESIDING OFFICER. The Senator yields back his time.
  Who yields time on the amendment?
  Ms. MOSELEY-BRAUN addressed the Chair.
  Mr. ABRAHAM. Mr. President, I believe the previous agreement----
  Ms. MOSELEY-BRAUN. Mr. President, I have not yet yielded the floor.
  The PRESIDING OFFICER. The time of the Senator from Illinois has 
expired.
  The Senator from Rhode Island claimed time under the Republican side 
on the bill and was recognized for 5 minutes. He has yielded back his 
time.
  Who yields time?
  Mr. ABRAHAM. Mr. President, just as a point of clarification, I 
believe the Senator from Nebraska is not in the Chamber now, but he had 
previously sought and obtained consent for the Senator from New Mexico 
to proceed at this point.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized for 
5 minutes.
  Ms. MOSELEY-BRAUN. Will the Senator from New Mexico allow me, because 
I think we got into a parliamentary pickle here for a second, and I 
just want 30 seconds.

[[Page S15666]]

  Mr. BINGAMAN. I would be glad to yield 30 seconds to the Senator from 
Illinois.
  Ms. MOSELEY-BRAUN. I thank the Senator.
  Again, to Senator Chafee, the Office of Management called. Part B 
here more than doubled. That is to be found on page 8 of the statement 
of policy. And I would like to provide that for the Senator. I did not 
misspeak. We may have a different interpretation, but the statement 
that I made was factual with regard to the impact on part B premiums. I 
yield the floor, and I thank the Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, let me speak for just a few minutes 
about the Republican tax plan, the plan which is before us. It is title 
XII of the bill. It begins on page 1463 and runs through page 1949. In 
case some of my colleagues have not read all aspects of it, I have not 
either, but I do think I understand the main thrust of it. The main 
thrust of it is that it does place an additional burden on those who 
are least able to pay. In doing so, it provides tax breaks to those who 
are doing the best in our economy.
  The Joint Committee on Taxation, which has been referred to many 
times here in this debate, has released some findings that I think all 
of us have to agree are accurate, and those findings are that people 
who earn $30,000 a year or less will be shouldering a heavier tax 
burden once this bill becomes law. The new data are the result of the 
effort and the proposal to reduce by $43 billion the earned-income tax 
credit.
  Mr. President, this chart here, I think, makes the point about as 
well as anyone could. We have here the people who have $10,000 of 
income or less. Their taxes will be expected by the year 2000 to rise 
9.6 percent. In the case of people with $20,000 of income, it is 2.2. 
In the case of people with 30,000, it is a smaller percentage. But 
everyone in that entire range would see their taxes increased. At the 
same time, those above $30,000 would see a decrease.
  Mr. President, what we have, which is a fairly remarkable result, in 
my opinion, is a bill that cuts Federal taxes, reduces Federal taxes by 
$245 billion and at the same time increases taxes on more than half of 
all Americans who pay tax.
  Let me point to one other chart here which I think makes the point 
very dramatically.
  The Senator from North Dakota earlier was saying that the bottom 50 
percent of all taxpayers are the ones who are going to see their taxes 
go up. In my home State--and we have State-by-State breakdowns of 
this--in my home State of New Mexico, it is not the bottom 50 percent 
who are going to see their taxes increased; it is the bottom 70 
percent. Because we are a low per capita income State, we have a 
substantial number of people who are in that income category that puts 
them at $30,000 or less. So 70 percent of the taxpayers in my State 
will in fact see their taxes rise under this bill according to the 
Joint Tax Committee.
  What is most disturbing about this is that this is happening at a 
point in American history where the average American worker is having a 
tougher time making ends meet. They are seeing their wages, the real 
spending power of their wages decline. Families are increasingly 
finding themselves without adequate health care coverage or pension 
options. It is a time when the stock market is at new highs, when 
corporate profits have never been higher than they are at this time in 
our history.
  In fact, talking about the stock market and corporate profits, there 
have been many times in the last month or so when I wished I owned some 
stock. We own very little stock. And I am sure there are many working 
families in this country who look at the rise in the stock market and 
wish they had a piece of that pie. But the reality is they do not.
  What we are doing here is the rich are taking a bigger share of the 
Nation's economic pie than ever before. We are proposing in this bill 
to reduce the burden on those who are relatively well off.
  Some have recently argued that the $500 child tax credit is more than 
an adequate offset to those working poor who will be getting tax 
increases. This is simply not true. Clearly, a family has to have 
substantial enough income on which to pay taxes for a $500 credit to 
make a difference. More than a third of the Nation's children will not 
benefit at all or will only receive partial credit from this proposal. 
If we are serious about giving tax relief to the working poor, then the 
child tax credit should be refundable or offset against payroll taxes, 
not just against the income tax.
  A working family in my State with two children and $15,000 adjusted 
gross income has no Federal tax liability and thus has no opportunity 
to receive any benefit from the child tax credit. This worker, however, 
has a real increase in tax burden by the reduction in EITC that helps 
the family keep working, not falling back into welfare programs. But 
this same worker has payroll taxes of $1,148.00. If the child tax 
credit were an offset against these taxes, then this might do some 
good.
  Mr. President, this Senate has been here before--in fact, 14 years 
ago. In 1981, it was the passage of the Kemp-Roth bill which was a 
major cause of the deficit we are now struggling with. In 1983, 1985, 
and at other subsequent times, this Congress has quietly undone parts 
of Kemp-Roth, which cut taxes during a time when the Nation's financial 
circumstances could not bear the pressure. But we have never 
recovered--and that is why the budget balancing process today is so 
terribly difficult. It is very unwise to attempt to cut the programs 
that we are cutting toward the noble cause of balancing the budget, and 
at the same time cut taxes for the wealthy. It was the wrong thing to 
do in 1981, and it is the wrong thing to do today.
  Mr. President, if we are going to promise tax relief, it needs to be 
equitable. We must go back to the drawing board and reverse these EITC 
reductions.
  The Republican tax plan, as it now reads, benefits the wealthy at the 
expense of the poor. We would be better off leaving the whole issue of 
taxes to another day when we can afford it, and when it can be done 
fairly.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Senator from Michigan.
  Mr. ABRAHAM. Mr. President, at this time I would like to yield 10 
minutes of our remaining time to the Senator from Maine, but before I 
do I just want to recognize and commend the efforts of the Senator from 
Maine.
  It was Senator Cohen who last year served as the ranking minority 
member of the Senate Special Committee on Aging, and it was his staff 
that produced the document which I have read from several times tonight 
pertaining to investigations of the kinds of Medicare fraud and abuse 
which the amendment I have brought this evening tries to address. It 
was his fraud and abuse legislation, in fact, introduced earlier this 
year, which served as the basis for the antifraud and abuse provisions 
contained in the legislation before us. His earlier legislation had 
bipartisan support.
  Provisions in the pending legislation are tough. They are 
comprehensive and they are unprecedented in their effectiveness. I 
believe that this is the first time health care fraud and abuse 
provisions have been scored by the Congressional Budget Office as 
generating savings.
  In fact, according to CBO, these provisions yield over $4 billion in 
savings. So, I want to commend the Senator from Maine for these 
efforts. They are productive ones. And I applaud what he has done. And 
at this time I turn the floor over to him.
  The PRESIDING OFFICER. The Senator from Maine is recognized for 10 
minutes.
  Mr. COHEN. I thank my colleague and friend from Michigan. I want to 
join in support of the amendment that he has offered to make what I 
believe to be very strong antifraud measures even stronger.
  Mr. President, I have listened at length to the debate today, and I 
think the American people are wondering, why are we here at this point 
in time debating this issue in the fashion that we are debating it?
  We are here because there has been a lot of politics involved in the 
entire debate. Ever since the release of the trustees' report on the 
Medicare trust fund last spring, Republicans have said, ``We have to do 
something.'' I recall that Senator Dole, the majority leader, last 
spring urged that President 

[[Page S15667]]

Clinton try to put together some kind of a bipartisan commission or 
committee or group of Senators and House Members to see if we could not 
resolve this on a bipartisan basis.
  There were no takers. There were no takers at that time. They simply 
said there is not a problem. ``There is no problem with Medicare, and 
you Republicans are simply trying to blow it out of proportion.'' Well, 
there is a problem. There is a problem that has to be fixed.
  Let me say very candidly, as we talk about taxes, that I, for one--I 
may be a minority of one--do not favor tax cuts at this time. I think 
that we should be balancing the budget, period, at this time. But I 
think we have to separate out the issue of the reformation of the 
Medicare fund itself.
  I compare it to a situation of a home in Maine, by way of example. We 
are going into the winter season. We have a home that needs to be 
heated. And there is frost on the walls, and the inside of the walls, 
not the outside. That is how cold it is. We have a home that is losing 
heat. We need to get heat into the home to keep people warm. The 
problem is, you have several holes in the roof, and the windows are 
broken, and we have an inefficient furnace in the basement.
  Now, there are one or two ways that we can keep warm in that home. We 
can try to buy more fuel. We do not have enough money, so we have to 
get a second or third job, assuming you can find a second or third job. 
And so we have to buy more fuel to put more fuel into the home to keep 
the frost from freezing us inside. That is one way of doing it. That 
way would be to simply increase taxes. If you want the analogy to be 
made properly, we just have more taxes to keep the system going at a 
rate of 10 percent growth. That is what we have to do, increase the 
taxes.
  I have not heard one single person on the other side call for a 44-
percent increase in taxes, in the payroll tax of part A of the Medicare 
trust fund. So we know that we would have to get more fuel oil or get a 
second or third job to buy more fuel oil to put oil in that house.
  Or we could make the house more energy efficient. We could fix the 
holes in the roof. We could fix the windows that are broken. We could 
put a new furnace that is energy efficient in the basement and conserve 
energy as opposed to allowing it to go out through the chimney and the 
holes in the roof and the windows.
  That, basically, is what the Republicans have tried to do in terms of 
slowing down the growth of the Medicare fund as such to make it more 
efficient, to stop growing at a rate of 10 percent to 6.3 or 6.5. Now, 
President Clinton, to his credit, admitted that we have a problem, and 
he suggested that we slow the growth down to 7.5 percent.
  Mr. President, I suggest that there is room for agreement between our 
two parties, between the President and the Senate and the House. And 
right now, unfortunately, we are in a stage where we are setting the 
posture for a potential agreement sometime down the line.
  But let us not make any mistake about it, we still need to reform the 
Medicare system. Part A and part B have to be reformed if we are going 
to ever stop the growth rate of 10 percent a year, which cannot be 
sustained under anyone's calculations without a major tax increase. And 
no one on that side of the aisle is talking about a major tax increase.
  I would like to come back to a subject matter which I think has been 
addressed earlier but is of great importance to me because it deals, 
not with Medicare, but Medicaid. One of the mistakes, I believe, that 
has been made in the bill as reported out of the committee is that we 
are suddenly waiving many of the standards and regulations that have 
been hard fought in the field of nursing home care.
  One of the first bills that I introduced back in 1973, in December 
1973, was the Nursing Home Patients' Bill of Rights. That came in the 
wake of a number of congressional investigations into absolutely 
intolerable conditions in nursing homes where patients were tied to 
their beds or wheelchairs, where they were medicated and overmedicated 
to the point where they were practically zombies, where a Senate aging 
committee called them warehouses for the dying.
  As a result of the expose of the abuses that were taking place in the 
nursing home industry itself, we were able to, over a period of time, 
establish nursing home patients' rights. Many of them have been put 
into place by Executive order. Finally, under OBRA 87, the Omnibus 
Reconciliation Act of 1987, we finally were able to put into law 
specific regulations and standards about how these homes should be run 
and maintained.
  We have, for all practical purposes, eliminated that under the bill. 
I hope that we can correct that. I believe that we can correct that, 
and we should correct it.
  But tomorrow we are holding a hearing in the Aging Committee in which 
we will again discuss the reasons why we need a continuation of the 
Federal standards and oversight and enforcement of nursing homes.
  Let me give you just a couple examples. By the way, this is not a new 
issue.
  I ask unanimous consent to have this material printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 Congressional Hearings and Reports Leading Up to the Enactment of the 
                    Nursing Home Reform Act in 1987

       May 1986: Nursing home care: The unfinished agenda--an 
     information paper.
       May 21, 1986: Nursing home agenda: The unfinished agenda, 
     vol. 1.
       Feb. 26, 1985: Sustaining quality health care under cost 
     containment.
       July 1985: America's elderly at risk.
       July 9, 1985: Health care cost containment: Are America's 
     aged protected?
       Sept. 10, 1985: The long term care ombudsman program: A 
     decade of service to the institutionalized elderly.
       Sept. 18, 1985: The rights of America's institutionalized 
     aged: Lost in confinement.
       October 1985: Dying with dignity: Difficult times, 
     difficult choices.
       October 1, 1984: Discrimination against the poor and 
     disabled in nursing homes.
       November 1983: Staff data and materials related to Medicaid 
     and long term care.
       February 2, 1982: Medicare coverage and reimbursement of 
     skilled nursing facility services.
       March 22, 1982: Long term care for the elderly in Florida.
       March 27, 1982: Medicaid fraud: A case history in the 
     failure of state enforcement.
       July 15, 1982: Nursing home survey and certification 
     assuring quality and care.
       July 16, 1982: Nursing home inspections: New Jersey.
       December 9, 1981: Oversight of HHS inspector general's 
     effort to combat fraud, waste, and abuse.
       May 15, 1980: Medicare and Medicaid fraud.
       October 17, 1979: Special problems in long-term care.
       July 25, 1978: Medicaid anti-fraud programs: The role of 
     state fraud control units.
       August 11, 1978: Medicare-Medicaid administrative and 
     reimbursement reform act.
       March 1977: Fraud and abuse in nursing homes: 
     Pharmaceutical kickback arrangements.
       June 8, 1977: The national crisis in adult care homes.
       June 17, 22, 23, 30 and July 1, 1977: Civil rights of 
     institutionalized people.
       June 30, 1977: Kickbacks among Medicaid providers.
       March 1976: Nursing home care in the United States: Failure 
     in public policy.
       June 3, 1976: The tragedy of nursing home fires: The need 
     for a national commitment for safety.
       August 1976: Fraud and abuse among practitioners 
     participating in the Medicaid program.
       September 1976: The tragedy of multiple death nursing home 
     fires. The need for a national commitment to safety.
       January 1975: Nursing home care in the United States: 
     Failure in public policy.
       February 1975: Nursing home care in the United States: 
     Failure in public policy.
       August 1975: Nursing home care in the United States: 
     Failure in public policy.
       September 1975: Nursing home care in the United States: 
     Failure in public policy.
       September 26, 1975: Medicare and Medicaid fraud.
       November 11, 1975: Society's responsibilities to the 
     elderly.
       November 13, 1975: Medicare and Medicaid fraud.
       December 5, 1975: Medicare and Medicaid fraud.
       December, 1974: Nursing home care in the United States: 
     Failure in public policy--an introductory report.
       December 1974: The litany of nursing home abuses and an 
     examination of the roots and controversy, supporting paper 
     #1.
       February 11, 1965: Conditions and problems in the nation's 
     nursing homes, part-1.
       February 15, 1965: Conditions and problems in the nation's 
     nursing homes, part-2.
       February 17, 1965: Conditions and problems in the nation's 
     nursing homes, part-3.
       February 23, 1965: Conditions and problems in the nation's 
     nursing homes, part-4.
       August 9, 1965: Conditions and problems in the nation's 
     nursing homes, part-6.
       August 13, 1995: Conditions and problems in the nation's 
     nursing homes, part-7.

[[Page S15668]]

       May 5, 1964: Nursing homes and related long term care 
     services, part-1.
       May 7, 1964: Nursing homes and related long term care 
     services, part-3.
       For a listing of Congressional hearings and reports related 
     to nursing home care since 1987 and/or for a listing of state 
     and national reports on nursing home care, please contact The 
     National Citizens' Coalition for Nursing Home Reform.
                                                                    ____


              [From the Indianapolis Star, Oct. 10, 1995]

                          Existing Protections

       The Republican Congress has taken steps to eliminate 
     burdensome federal regulations, many of which are unnecessary 
     and costly to individuals and businesses.
       But when it comes to abolishing nursing home regulations, 
     which protect the health and safety of elderly citizens, some 
     caution is in order.
       Before repealing a law that has vastly improved conditions 
     at nursing homes in Indiana and nationwide, lawmakers should 
     study the sordid history that led to its enactment. They are 
     likely to find this is one area where uniform federal 
     standards make sense.
       At issue is the Nursing Home Reform Act of 1987, the final 
     phase of which took effect just this past July. As part of 
     the move to turn Medicaid into block grants for the states, 
     Congress is trying to repeal the law and drastically reduce 
     funding of the nursing home enforcement system.
       The 1987 law--which requires nursing homes that receive 
     Medicaid dollars to follow good nursing practices and protect 
     residents' rights--was the result of years of study, public 
     hearings and documentation of abuses, such as the use of 
     unnecessary physical restraints and excessive reliance on 
     drugs for behavior control.
       The standards have been gradually phased into effect over 
     the past eight years. As of July 1, agencies such as the 
     Indiana State Department of Health have federal authority to 
     levy fines and ban admissions at homes that violate the 
     standards. As recent experience has shown, the law has 
     dramatically changed how officials police bad facilities.
       For example: During the entire 11-year period from 1984 to 
     1995, Indiana assessed only 33 fines against nursing homes 
     for violating regulations. In the three months since July 1, 
     28 state fines have been levied, three homes barred from 
     accepting new residents pending resolution of problems and 
     four homes scrutinized by state monitors inside their 
     facilities. In addition, the federal government denied 
     Medicaid to 12 homes and issued 48 civil financial penalties.
       If the proposed legislation passes, it is highly unlikely 
     states will replicate the federal law. In fact, they will be 
     under intense pressure from the nursing home industry to 
     deregulate facilities to compensate for Medicaid 
     reimbursement cuts. Beds for those who depend on Medicaid 
     will become sparse since long waiting lists are already 
     common.
       Scott Severns, an Indianapolis attorney and president the 
     National Citizens' Coalition for Nursing Home Reform, 
     believes federal rules may actually save taxpayers' money 
     spent on the elderly. As a result of the '87 law, he notes, 
     hospitalizations of nursing home residents have dropped 25 
     percent, which means less spent through Medicare.
       ``Nursing home residents who are hospitalized for broken 
     bones, bedsores and infections from neglect cost far more 
     than residents who receive proper care,'' he says.
       If Congress wants a compelling reason to preserve the 
     federal protection, it need look no further than Ritter 
     Health Care Center in Indianapolis.
       Last month, state inspectors found Ritter residents tied 
     with gauze to rails and beds and smeared with food and body 
     wastes. Some were confined to rooms by greased door handles 
     because too few staff were available to supervise. One 
     resident on a liquid diet choked on a piece of food.
       Ritter had been cited for numerous violations since 1993, 
     but never really punished. Thanks to the new federal tools, 
     the health department moved swiftly this time. The owners 
     have been fined and denied Medicaid eligibility. Tragically, 
     residents must now move elsewhere because of the facility's 
     failure to correct its problems.
       That is how the federal law was designed to work. That is 
     how it is working in Indiana. At this point, it would be a 
     mistake to repeal what isn't broken.
                                                                    ____


                    [From USA Today, Sept. 27, 1995]

           Dropping Federal Regs Is an Invitation to Tragedy

       Eight years ago, after 15 years of argument, Republicans 
     and Democrats in Congress got together to correct a public 
     embarrassment. They passed a law to stop nursing home 
     operators from abusing or neglecting the elderly.
       They had ample incentive. Reports of residents lying in 
     excrement, dehydrated, malnourished or overmedicated were 
     commonplace. State regulation was a failure. Public outrage 
     was high.
       It should be just as high now. The regulations created by 
     that law are about to be weakened or stripped away--victims 
     of a ideological crusade to curb federal authority, good or 
     bad.
       Control would return to the state, despite their history of 
     failure.
       Those pushing the new plan, House and Senate Republicans, 
     claim their legislation is not a repeal. They say the law is 
     ineffective. And they say it's hugely expensive.
  All three claims are fiction.
       Not a repeal? Under existing regulations violators are 
     subject to financial penalties, decertification, denial of 
     payments or takeover by temporary managers if they violate 
     health and safety standards. Proposed changes would weaken 
     enforcement by states that are vulnerable to powerful lobby 
     groups. The Senate wouldn't require inspections, nurse 
     staffing or protections against restraints or medication.
       Not effective? A government study of 269 homes in 10 states 
     cited impressive results. The study found hospitalization of 
     nursing home residents down 25%, use of restraints down 25%, 
     and detection and punishment of abuses increasing.
       Too expensive? Quite the contrary. A study of 9,000 Georgia 
     nursing-home residents reports a monthly $76,738 savings by 
     curtailing unnecessary drug therapy, thanks to the 
     regulations. And that's not an isolated case. The National 
     Citizens Coalition for Nursing Home Reform, a resident 
     advocacy group, says the changes saved billions in costs 
     attributed to poor treatment.
       Even the American Health Care Association, representing 
     nursing home owners, says costs have not been a problem.
       In fact, nursing home owners signed onto the legislation 
     when it passed in 1987. So did consumer groups. So did state 
     officials. So did the Institute of Medicine, research arm of 
     the National Academy of Sciences, whose 1986 report on 
     nursing home conditions led to the reform.
       No credible evidence exists to justify reversing course. If 
     changes are necessary they should be based on the same kind 
     of thorough study and public hearings that produced the 
     original regulations.
       Seniors are in nursing homes because of advanced age, 
     mental or physical disabilities, to recover from 
     hospitalization or because they have no one to care for them. 
     They are frail and vulnerable. They deserve all the 
     protection the public can provide.
                                                                    ____


                [From the New York Times, Oct. 18, 1995]

                      Keep Nursing Home Standards

       In its ongoing effort to give more power to the states, 
     Congress wants to scrap Federal standards for quality of care 
     in nursing homes. Given past abuses that the standards were 
     designed to guard against, and the future need for even more 
     nursing homes, this is an invitation to trouble. There may 
     well be room to revise the Federal standards to make them 
     simpler and less costly. But with vast changes occurring in 
     the health-care system, the need for Federal standards to 
     insure minimal quality is greater than ever.
       It was only about 20 years ago that a series of media 
     exposes, state government reports and legislative hearings 
     revealed widespread abuses in nursing homes, from unsanitary 
     conditions and malnutrition to overmedication, neglect and 
     sexual, and physical abuse. In 1987 Congress passed the 
     Nursing Home Reform Act, which set national standards for 
     staff training, individual assessments of patients and 
     protection of basic patient rights, including the right not 
     to be physically restrained, the right to voice grievances 
     and the right to be notified before transfer or discharge.
       The law has begun to make a difference. In the mid-1980's, 
     about 40 percent of nursing home patients were physically 
     restrained; now, less than 20 percent are. Improved care has 
     also led to savings on medications and unnecessary 
     hospitalizations.
       Now Congress is trying to reshape the health-care system by 
     sharply cutting Medicaid, which provides about 60 percent of 
     nursing home funding, and shifting the money to state control 
     through block grants. Congress wants to cut $182 billion out 
     of Medicaid over seven years, which would likely lead to 
     reduced reimbursement rates for nursing home services and 
     facilities.
       Many states are insisting that, if they are to assume 
     control of a reduced pot of money, they must have the power 
     to set their own nursing home standards to eliminate needless 
     costs. House and Senate committees have separately passed 
     bills that would give states primary responsibility for 
     setting quality-of-care standards for nursing homes, with 
     Washington offering only general categories to be covered. 
     Nursing home providers could lean on states to cut back on 
     standards that they will not be able to live up to for lack 
     of funds.
       Nearly two million people now reside in nursing homes. But 
     with an estimated 43 percent of people over 65 years of age 
     likely to spend some time in a nursing home, and an aging 
     baby-boomer population, the demand for these facilities will 
     only grow. To abandon national standards now may invite a 
     return to the nursing home disasters of the past.

  Mr. COHEN. We have had over 50--at least 50--congressional hearings 
and reports over the years dealing with nursing homes, going back all 
the way to 1965. This only starts in 1986. We have had many more since 
that time.
  But let me just cite you some examples of what is taking place, even 
as I speak.
  Recently in Maryland, a resident expired due to strangulation from an 
opposing restraint because the resident was not properly wearing a 
restraint.
  In Ohio, we had a resident who died due to strangulation from a vest-
type restraint that was incorrectly applied.

[[Page S15669]]

  In Florida, we had a resident who was sexually assaulted by a nurse's 
aid.
  In Indiana, a resident was found with maggots in wounds.
  In Ohio, a resident was being fed with a syringe and aspirated. The 
staff was unaware what to do. The resident became cyanotic and was 
subsequently hospitalized.
  In Louisiana, we had a resident who was left unattended in a 
geriwalker and fell. She hit her head and required hospitalization.
  In Texas, a resident was force fed with a syringe and aspirated and 
was hospitalized.
  In Maine, we had a resident die of pressure sores.
  In Indiana, a resident fell down the stairs and was killed.
  In Indiana, a resident in respiratory distress was left unattended 
for 7 hours. The resident died.
  In North Carolina, a resident required thickening liquids to prevent 
choking. It was not provided. The resident developed aspiration 
pneumonia.
  In Indiana, a resident was missing from the facility. He was found 
two blocks away.
  I could go on for some length this evening, which I will not do. I 
suggest we have to make modifications to this legislation to make sure 
that we tell the States, ``No, we are not simply turning it all over to 
you, that, because Medicaid has been turned over in the form of a block 
grant as such, we still expect some standards and oversight and 
enforcement on the part of the Federal Government.''
  This is not something that the States can say, ``Wait a minute. This 
is a Federal mandate here.'' We have $800 billion going to the States 
in the next 7 years, $800 billion. That gives us some right, it would 
seem to me, to say that there ought to be standards that have been set. 
They ought to be enforced, and we ought to maintain a level of 
oversight that will, in fact, make sure that we do not have a 
repetition of some of the things that I have outlined here tonight. 
These are just symptomatic; these are just a small sample.
  I know my friend from New Mexico is sensitive to this. He served with 
me on the Aging Committee. The Presiding Officer sitting in the chair 
also serves in that committee. And we will hear more about this. We 
need to make sure that when you finally come to that position in life 
where you have to take a parent or a grandparent and turn them into the 
arms of those who run our nursing homes--that is just the beginning--we 
have to make sure that those facilities are well run, they are well 
managed, that the residents are properly cared for, so that the people 
who have entrusted their loved ones into the hands of these individuals 
who are running the nursing homes do, in fact, treat them with loving 
care, and make sure that we are satisfied that that is so.
  Now, Mr. President, I will not take the time this evening--I have, I 
think, just a few moments remaining--other than to indicate that my 
friend from New Mexico is aware of my concern about this. I know that 
he and others are working along, hopefully, with others on both sides 
to make sure that this is corrected. I believe it is a deficiency. We 
need to correct it. And it should be done, if not this evening, 
certainly tomorrow before we proceed further. And I yield back.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. DOMENICI addressed the Chair.
  Mr. DOMENICI. I yield 2 minutes to the Senator from California.
  Mrs. BOXER. I thank the Senator very much.
  I would like to commend the Senator from Maine for his words about a 
hidden part of this bill.
  It is a very large bill, and in it is a repeal of Federal nursing 
home standards. In the Budget Committee on which I serve, I raised this 
issue. I have spoken about this issue on the floor. It is truly music 
to my ears to hear you speak about this as eloquently as you have.
  I am sure you are aware that Senator Pryor has put together an 
amendment. I know he was looking forward to working with you on it, and 
I am a cosponsor of that amendment.
  I happen to have had the sad circumstance of losing my mother a few 
years ago, and she died in a nursing home. Even with the Federal 
standards, I say to my friend, it is an awfully difficult situation. 
The people are so vulnerable. They are as vulnerable, in many ways, as 
little babies. It just tears your heart out.
  To think that we would allow 50 separate legislatures and 50 separate 
Governors to say, ``Well, gee, maybe we don't have enough money in 
this, maybe we do,'' I think is just too important.
  I am so pleased to hear the Senator from Maine say that the Senator 
from New Mexico, my chairman, is concerned about this matter. I hope we 
can reach across the aisle and maybe restore those national standards.
  I think it is something we did because there was a crying need. I 
agree that change is wonderful, but sometimes it does not make sense to 
change something when we learned how rough it was out there in those 
nursing homes.
  I want to thank my friend very much. I yield the floor.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. DOMENICI. Mr. President, do I have time remaining?
  The PRESIDING OFFICER. Two minutes and twenty-two seconds.
  Mr. DOMENICI. Mr. President, I yield myself 3 minutes off the bill.
  I want to thank Senator Cohen for his statement tonight and his 
efforts in the past on the Aging Committee. He has done excellent work. 
Everybody knows the committee is a factfinding committee, but you have 
turned it into more than a factfinding committee because much 
legislation has come from the hearings you held.
  We had one in the recent past, which you actually brought forth, with 
reference to fraud, saving money, some abuses on the side of the SSI 
Program, which were clearly brought out by your committee. I thank you 
for that, and I can assure you we have your concerns under our serious 
consideration, as we move through in an effort to get a good bill that 
passes the Senate and goes on its way to a conference in the House.
  Let me also compliment Senator Abraham for this particular amendment 
that we are now addressing. Actually, nothing bothers senior citizens 
more than what they consider to be a rat's nest as they look at their 
bills and they look at the processes and they receive documentation on 
what they owe and what Medicare owes or what Medicaid owes--total 
confusion.
  Some of them try to find out if they have been gouged. Some try to 
find out if they have been overcharged or even that they have been 
charged for something they do not remember getting.
  Frankly, it is so complicated that they give up. We are losing 
because of that. One of the most credible and reliable ways to control 
costs is by having an informed patient concerned about costs. In fact, 
I think that everyone would agree that over the past 30 years, one of 
the reasons that health care costs have spiraled is because we are 
developing a culture where the recipient of the benefits pays so little 
or nothing that they never challenge the bills and, as a result, if it 
goes unchallenged long enough, it gets pretty loose, to be kind of 
modest in one statement.
  This amendment says we want to take back the patient, the senior 
citizen and make them part of the army that polices fraud and abuse. 
This says if, in fact, the senior finds that they are going to share, 
by way of a portion of the recovery that is made, it will be an 
incentive to them.
  This is new and different. Some might say it will not work but, 
frankly, what we have been doing is not working. So it seems to this 
Senator that what we ought to do is adopt this amendment, make sure it 
becomes part of the law, and as we move through our reform, give 
seniors more choice which is going to permit them to be more selective, 
more concerned and to gain more from watching the bills. This ought to 
become part of the substantive law of the land.
  Mr. President, I yield back the remainder of my time, and I suggest 
the absence of a quorum.
  Mr. HARKIN. Before the Senator puts in a quorum call, I hope he will 
yield for a question.
  Mr. DOMENICI. Without losing my right to the floor I will.
  Mr. HARKIN. This Senator came to the floor in good faith because I 
thought that when time was through, then there would be an opportunity 
for 

[[Page S15670]]

an amendment. I was going to offer a second-degree amendment. I wonder 
why that is not appropriate to do at this time.
  Mr. DOMENICI. Mr. President, I humbly apologize. What is the 
Senator's question again? I was trying to get your question answered, 
but I did not listen to you. So that is not very good.
  Mr. HARKIN. My question was, I thought under the rules, after the 
time on the amendment ran out, that it would be open for amendment. I 
had a second-degree amendment I was going to offer. I was going to do 
it at this time.
  Mr. DOMENICI. Mr. President, let me tell you what I understood the 
situation was, and we have the minority leader here. I think what we 
said is the Abraham amendment will be second-degreed, and you all can 
amend it, but we would like to see the amendment before we agree to 
that. I just got the amendment, and I would like very much just to look 
at it for a minute and get right back to you, during which time I will 
ask for a quorum call. I reinstate my request.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DOLE. Mr. President, I ask unanimous-consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                       Unanimous-Consent Request

  Mr. DOLE. Mr. President, let me sort of outline here what we have 
agreed to do. I want to thank the Democratic leader and the Senator 
from New Mexico and others who have been working on this, along with 
the Senator from Kentucky, Senator Ford.
  As I understand it, we have laid aside the Rockefeller Medicare 
amendment and the Brown amendment to Rockefeller. The Abraham amendment 
is pending, and that will be second-degreed by Senator Harkin. After 
that debate, that will be laid aside, and then the Senator from New 
Jersey [Mr. Bradley] will offer a motion to recommit EITC, and 
Republicans will offer a first-degree amendment.
  Following that, we will recess for the night, leaving approximately 8 
hours remaining. Then tomorrow morning, the Senator from New Jersey 
will have an additional 20 minutes or 30 minutes starting at 9 o'clock 
on the EITC.
  Mr. DOMENICI. How much time is Senator Bradley getting? Is he getting 
a special privilege or the regular time?
  Mr. DOLE. The regular time. He will save 30 minutes of his allotted 
time.
  Mr. DOMENICI. I think the Senator should speak tonight. The whole 
world will turn him on and turn the baseball game off.
  Mr. BRADLEY. If the Senator will yield, I think the Senator is 
quoting me in my conversation with him, and he should attribute that to 
me.
  Mr. DOMENICI. I was merely repeating what the Senator said.
  Mr. DOLE. Anyway, there will be 30 minutes, and then after that, that 
would be laid aside and then there would be a motion to recommit 
Medicaid, and there will be no first-degree amendments to that. That 
will be followed by either an amendment or a motion on education, and 
then a amendment or motion on deficit reduction, or an amendment or 
motion on rural restoration.
  That takes us to approximately 12:30, at which time we hope to be 
able to say that we have worked out some agreement, where they will 
have either up or down votes on their first-degree amendments or 
motions to recommit, and we will have up or down votes. There will not 
be any second-degrees on, say, the Abraham amendment, or on the other 
amendments, but vote on or in relation to, and motions to table. I 
think that fairly well covers it. In other words, if we reach an 
agreement, Republicans may withdraw all second- and first-degree 
amendments and have votes in relation to the major amendments. 
Democrats will do the same on the amendments pending. That will take us 
to 12:30 p.m. tomorrow. Do I properly State the understanding, I ask 
the Democratic leader?
  Mr. DASCHLE. Mr. President, that clearly articulates, I think, the 
agreement that we have. We will have a series of amendments tomorrow 
morning. I urge all Democratic Senators to be on the floor to offer the 
amendments and participate in the debate. We will continue to negotiate 
during that time, with an expectation of having some final 
understanding of whether or not we can reach an agreement by tomorrow 
noon. And then we will work from there.
  Mr. DOLE. That would, in effect, take care of your so-called tier 1 
amendments.
  Mr. DASCHLE. That is correct.
  Mr. DOLE. I make that request. Is there any objection to my request?
  The PRESIDING OFFICER. Is there objection to the request?
  Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, it has been accepted, but might I ask 
both leaders this. It is clear that if we do not have an agreement and 
all of the first-degree amendments that were offered by the Democrats 
that have been set aside, we can offer our second-degrees to them, is 
that understood?
  Mr. DOLE. That is the understanding of the two leaders. Hopefully, we 
can reach an agreement where they can get up or down votes or motions 
to table and we can have the same. If we cannot, we are back to square 
one and we start voting.
  Mr. DOMENICI. Mr. President, might I thank the minority leader and 
those who worked with him, including Senator Exon and others. We 
offered you something a little different than that and, frankly, I 
think this accommodates both, and we are very pleased you were able to 
help us work it out. I thank you very much.
  Mr. FORD. Mr. President, may I ask the distinguished majority leader, 
when do we vote? Are all the votes going to be stacked? It appears to 
this Senator that once you debate an amendment, you debate the second-
degree, you ought to vote on it and then we lose--maybe that is what 
you want to do--but it seems to me that once an amendment is debated, 
if there is a second-degree amendment, that is debated and, at that 
point, we ought to vote on it rather than keep stacking. I know you are 
trying to work out an arrangement here, but something is going to be 
retroactive based on whatever the agreement might be.
  I just hope that at some point we will get to where we can vote and 
get that part behind us. We understand probably the numbers of the 
votes, but there might be a surprise or two in this.
  Mr. DOLE. I do not disagree with the Senator. But I think until we 
have an agreement, it probably would not work, because we would be 
forced, in effect, to offer amendments and may not want to offer 
amendments. We will keep that in mind. I think you are right, we ought 
to have the amendment and second degree, and then vote. I think while 
we are trying to work this out--well, we should know by 1 o'clock 
tomorrow.
  Mr. DASCHLE. In addition to that, Mr. President, I share with the 
distinguished minority whip that it is our intention to try to utilize 
the time we have and to avoid second-degrees, if it is at all possible, 
to allow us more opportunities to offer our amendments.
  I ask the majority leader, we have shared the first and the second 
tier with the leader. I am wondering if you might have the list of 
Republican amendments that you are planning to offer so that we might 
have the evening to take a look at them. If that could be accommodated, 
that would be helpful.
  Mr. DOLE. The majority whip is working on a list and when it is 
available, we can do that. I think the majority whip is working on that 
list as I speak.
  Is there any objection?
  The PRESIDING OFFICER. It has been agreed to.
  Mr. DOLE. That will be the last vote today. There will be no more 
votes today or during the evening.


                Amendment No. 2957 to Amendment No. 2950

 (Purpose: To strengthen efforts to combat Medicare waste, fraud, and 
                                 abuse)

  Mr. HARKIN. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Iowa [Mr. Harkin] proposes an amendment 
     numbered 2957 to amendment No. 2950.

  Mr. HARKIN. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.

[[Page S15671]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. HARKIN. Mr. President, this amendment is an amendment to the 
amendment offered by the Senator from Michigan, Senator Abraham, and it 
deals with waste, fraud, and abuse in the Medicare system. I might just 
say at the outset that while I have no real disagreements with the 
amendment offered by the Senator from Michigan--it is not a bad 
amendment--it just does not go very far. There is a lot more that I 
think needs to be done in the whole area of waste, fraud, and abuse 
than is encompassed either in the underlying bill or the amendment 
offered by the Senator from Michigan.
  Mr. President, for the last several years, I have been privileged to 
chair the Appropriations Subcommittee on Labor, Health and Human 
Services, Education and Related Agencies.
  In that capacity, at least once a year, I had a hearing on the issue 
of waste, fraud, and abuse in Medicare. Just about every year I asked 
the GAO to do a study on one facet or another of the waste, abuse, or 
fraud in the Medicare System.
  We have had several of those, and two or three inspector general 
reports on that subject also during that period of time.
  It seems that every year we would uncover something and try to take 
some action to stop it, and it would only pop up in another place and 
be even worse.
  I became convinced over the last couple of years that major changes 
had to be made in the way we address the issue of waste, fraud, and 
abuse in the Medicare Program.
  Mr. President, these GAO reports that we have had done are available 
to Senators. Here is one that we had on medical supplies that was done 
over the last year, issued in August 1995.
  Let me say for the record what the GAO found in their study of the 
purchase of medical supplies. They went in and did a random sample of 
supplies that were paid for by Medicare. They went behind the supplies 
to get an itemized list.
  When they looked at it, the result was startling. The GAO found that 
89 percent of the claims should have been partially or totally denied; 
61 percent of the money paid out should never have been paid out.
  That is a lot of money, Mr. President, because last year Medicare 
paid out about $6.8 billion for medical supplies. If that sample that 
GAO took was representative, and I believe it probably was, you are 
talking somewhere in the neighborhood of $4 billion going for wasteful, 
duplicative, and fraudulent spending.
  While we may not get all of that, we certainly ought to be able to 
get a good share of that money back for our taxpayers who are paying 
this money in.
  There are a lot of other programs. The computer system that HCFA 
used, for Health Care Financing Administration, the computers are 
outdated. It is as if we were all using manual typewriters, that is how 
outdated their hardware and software is. Here is another report we had 
from the GAO outlining that.
  Very briefly, what the amendment I have offered does is add to the 
amendment offered by the Senator from Michigan. Basically, it 
strengthens the sanctions against providers who rip-off Medicare. Those 
convicted of health care fraud and felonies would be kicked out of 
Medicare. Maximum fines would be increased. What we also did, Mr. 
President, I think the heart and soul of the whole thing, is that we 
have to go to competitive bidding.
  We found, for example, that Medicare was paying up to 86 cents for a 
bandage that the Veterans Administration only pays 4 cents for. We 
found in durable medical equipment that Medicare was paying up to 
$3,600 a year for an oxygen concentrator that only costs $1,000. The 
Veterans Administration was reimbursing at only about $1,200 a year--
one-third of what Medicare was reimbursing. Same for oxygen equipment 
and everything.
  Time and again, we have found the Veterans Administration was 
substantially below what Medicare was paying for the same items. The 
reason for that is because the Veterans Administration competitively 
bids for durable medical equipment, services, and for supplies; 
Medicare does not.
  Usually, when I tell audiences that, they cannot believe it. They 
cannot believe we would not do something so simple and straightforward 
and so market-oriented as to require competitive bidding for supplies, 
services, and durable medical equipment.
  This started when Medicare first came in 1965--a fee schedule was set 
up for the items, and it has rolled on year after year after year.
  Quite frankly, Mr. President, I say in all candor, those entities, 
those companies involved in this, have had a sweetheart deal. They have 
opposed efforts in this Congress and in other Congresses to do away 
with the fee schedule and go to competitive bidding. I can understand 
why--because they are really ripping off the system.
  Mr. President, we had a study done on duplicative claims. Case after 
case where a doctor put in for, say, two X rays; the GAO found out he 
should have only been paid for one X ray. On and on.
  Again, this is because GAO's computers could not pick it up. We had 
testimony from one private insurance carrier who also did the billing 
for Medicare. They had one set of computers and software for their 
private side of what they did; they had another set for what they did 
for Medicare.
  The examples were astounding about how for the same claims, covering 
the same items, under the private side the computers and their programs 
would pick up duplicative claims and spit those out so they would not 
pay it. On the Medicare side, because of the old software and 
computers, they would not catch it and out would go the money for two X 
rays when only one was required.
  So our amendment, the amendment I offered, requires competitive bid. 
That, I believe--we can do anything we want to Medicare. Want to cut 
money, want to save money in Medicare you can do all you want to and 
jimmy the system, but until we have competitive bidding we are really 
not going to get to the bottom of the extensive amount of money that 
goes out.
  What are we talking about? GAO estimates that up to 10 percent of 
Medicare spending goes for waste, fraud, and abuse. You figure $170 
billion this year in Medicare, if we took 10 percent, that is $17 
billion a year. We are talking about 7 years here. Mr. President, $17 
billion a year for 7 years, and you have more than enough to take care 
of fixing up the Medicare system just by clamping down on waste, fraud, 
and abuse.
  I realize we cannot get all of that but if we could just get half of 
it, if we could just get half of it, we would save our taxpayers and we 
would save the beneficiaries from having to pay more money.
  Our amendment provides for that competitive bidding. It would 
specifically prohibit also Medicare payments for a number of items 
clearly not related to quality patient care.
  For example, we found, Mr. President, that Medicare was paying for 
tickets to sporting events, personal use of automobiles, and we even 
found that they were paying for travel to Italy to examine art to be 
put into a hospital. Medicare was picking that up. Our amendment 
expressly prohibits that.
  Another part of our amendment clamps down on improper payment for 
ambulance services. Again, another GAO report that we had done shows 
that ambulance services are charging the highest rate for ambulance 
services even though they are not using all of the equipment or they 
are not using the more expensive ambulance services when they go out to 
pick up a patient.
  Also, our amendment, as I said, puts funds in there so they can get 
updated computers, so they can stop the double billing.
  GAO estimated that if this amendment, this part of the amendment that 
we offered, to require Medicare to employ the commercial software that 
is available and to do it within 6 months--and GAO said they could do 
it within 6 months--that in the first year we could save $600 million 
just by employing this software.
  Mr. President, our amendment would strengthen the criminal penalties 
and also provide rewards up to $10,000 to individuals who report 
violations of the law which result in criminal convictions for health 
care fraud.

[[Page S15672]]

  Our amendment also provides for uniform application process for 
health care providers seeking to participate in Medicare and Medicaid. 
Right now, there is just too much paperwork. Our amendment says one 
standardized form for the submission of claims under Medicare and 
Medicaid. Again, Mr. President, that would save countless millions of 
dollars.
  So, in sum, Mr. President, this amendment builds on what the 
amendment offered by the Senator from Michigan does and what is in the 
bill. What is in the bill, and even with the amendment offered by the 
Senator from Michigan, really does not get to the real problem.
  I repeat for emphasis' sake, the real problem in Medicare is lack of 
competitive billing. All of those who believe in the market system and 
who believe the market system gets you the best services and the best 
prices, you ought to be for this amendment. We ought to, for once and 
for all, require competitive bidding for Medicare just like we do the 
Veterans Administration.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. ABRAHAM. Mr. President, I yield myself such time as I may use to 
briefly comment on the amendment before us, and then I will yield 
further time to other Members on our side.
  Mr. DOMENICI. Will the Senator yield 5 minutes to me first and then 
proceed?
  Mr. ABRAHAM. I will.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized for 
5 minutes.
  Mr. DOMENICI. In the short timeframe of this evening, not even an 
early part of the day, because I did not keep tabs on all times, but 
Senators on the other side of the aisle--this evening it was Senator 
Dorgan and my colleague, Senator Bingaman--took to the floor and talked 
about the distribution of the tax cuts. And Senator Dorgan said nobody 
has disavowed and disproved that 50 percent goes to the very wealthy 
people.
  Mr. President, the truth of the matter is that was first reported in 
the Wall Street Journal article, and the Joint Tax Committee writes the 
chairman of the Finance Committee a letter on October 24. Let me read a 
paragraph.

       No factual basis exists for the assertion (since retracted) 
     contained in the Wall Street Journal of last week asserting 
     that one-half of all households would experience a tax 
     increase under the Senate Finance Committee revenue 
     [package].

  In other words, it was retracted by the Wall Street Journal but it 
continues to be used. And in this letter the Joint Tax Committee states 
the following, and let me read it. Calendar year 1996, without EITC 
changes.
  Some will say wait, you have to have EITC in it. I will put it in. 
Just a minute.
  For 1996, it says, ``Under $75,000 is 77 percent; under $100,000 is 
90 percent.'' In 1996, they confirm that the tax cut, that 77 percent 
goes to people under $75,000 in earnings.
  In the year 2000, because there are some changes--let us put it all 
on the table--68 percent of the then-completed tax cuts go to $75,000 
and under, and 83 percent to $100,000 and less.
  Now, let us use EITC, since Chairman Roth asked them: Check about the 
EITC. So we make sure we got that. With the EITC tax changes, this 
confirmation letter says the following. In 1996, the tax distribution 
is as follows: ``Under $75,000, 75 percent. Under $100,000, 89 
percent.'' It has been changed by 1 percent, from 90 percent to 89 
percent.
  In the year 2000, with the EITC tax changes, 65 percent of the 
distribution is wage earners under $75,000 and 81 percent under 
$100,000.
  If you are talking about taxes, that is the authentic story, from the 
authentic source. And this one, even the President has decided not to 
do his own. Everybody uses the Joint Tax Committee. And they are saying 
this.
  So, when anyone comes down on the other side and says nobody has 
disproved it, disavowed it, we are going to put the letter in the 
Record.
  I ask unanimous consent it be printed in the Record at this point, 
the letter dated October 24, and I yield the floor.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                    Congress of the United States,


                                  Joint Committee on Taxation,

                                 Washington, DC, October 24, 1995.
     Hon. William V. Roth, Jr.,
     Chairman, Senate Finance Committee,
     Senate Office Building, Washington, DC.
       Dear Chairman Roth: I am writing in response to your letter 
     of October 23, 1995, in which you asked me to address several 
     questions with respect to the revenue recommendations 
     approved by the Senate Finance Committee on Thursday, October 
     19, 1995, and previously approved reforms to the Earned 
     Income Credit (``EIC''). The highlights of my response to 
     your questions are set forth immediately below. Detailed 
     answers to each of your questions are provided in the 
     supplemental submission which accompanies this letter.
       No factual basis exists for the assertion (since retracted) 
     contained in the Wall Street Journal of last week asserting 
     that one-half of all households would experience a tax 
     increase under the Senate Finance Committee revenue 
     recommendations--even if one were to include the effects of 
     the EIC reforms previously approved by the Senate Finance 
     Committee.
       The Joint Committee on Taxation did not change its 
     distribution analysis of the Senate Finance Committee's 
     revenue recommendations. Our analysis of this set of 
     proposals indicates:

              PERCENTAGE OF TAX REDUCTION TO INCOME CLASSES             
------------------------------------------------------------------------
                                                           Percent      
                                                   ---------------------
                   Calendar year                      Under      Under  
                                                     $75,000    $100,000
------------------------------------------------------------------------
1996..............................................         77         90
2000..............................................         68         83
------------------------------------------------------------------------

       The distribution analysis does not change significantly if 
     one also includes the EIC reforms (including the EIC outlay 
     reductions) approved by the Senate Finance Committee in a 
     separate mark-up (as requested by Senator Moynihan):

              PERCENTAGE OF TAX REDUCTION TO INCOME CLASSES             
------------------------------------------------------------------------
                                                           Percent      
                                                   ---------------------
                   Calendar year                      Under      Under  
                                                     $75,000    $100,000
------------------------------------------------------------------------
1996..............................................         72         88
2000..............................................         61         79
------------------------------------------------------------------------

       At Senator Nickles' request we also prepared an analysis of 
     the Senate Finance Committee's revenue recommendations, 
     including the effects of EIC reforms previously approved by 
     the Senate Finance Committee, but limited to the revenue 
     effects of the EIC reforms, i.e., excluding the outlay or 
     spending portion of the proposed EIC reforms. That analysis 
     indicates the following:

              PERCENTAGE OF TAX REDUCTION TO INCOME CLASSES             
------------------------------------------------------------------------
                                                           Percent      
                                                   ---------------------
                   Calendar year                      Under      Under  
                                                     $75,000    $100,000
------------------------------------------------------------------------
1996..............................................         75         89
2000..............................................         65         81
------------------------------------------------------------------------

       With respect to the Senate Finance Committee's previously 
     approved EIC reforms, our analysis of the combined effects of 
     the Senate Finance Committee's EIC reforms, the $500 child 
     credit and marriage penalty relief for 1996 indicates that 
     less than 1.5 percent of all households will have in income 
     tax increase as a result of the EIC reforms. Other key points 
     to consider include: 3.6 million households without children 
     would no longer receive an EIC beginning in 1996. This reform 
     reinstates the pre-1993 policy of providing an EIC only to 
     families with children. Approximately 1.2 million households 
     will owe income taxes as a result of this change.
       Of the remaining 14.7 million households with children who 
     would be eligible for the EIC, approximately 14 million would 
     not have an increase in their income taxes over current law. 
     Approximately 700,000 households would owe income taxes 
     because of the Senate Finance Committee's EIC anti-fraud and 
     illegal alien provisions and the affluence reforms that count 
     certain types of income in determining eligibility for the 
     EIC.
       Families who are currently eligible for the maximum EIC 
     (families with children and having adjusted gross income 
     under $12,000) will receive an even larger EIC next year and 
     thereafter. For example: (i) The maximum EIC for a family 
     with one child will increase from $2,094 in 1995 to $2,156 in 
     1996. (ii) The maximum EIC for a family with two or more 
     children will increase from $3,110 in 1995 to $3,208 in 1996.
       In addition, since these families would not owe any taxes 
     under the Senate Finance Committee's revenue recommendations, 
     the full amount of their EIC would represent an outlay 
     payment from the Federal government.
       Families living at or near the poverty line (one-child 
     families with earnings under $12,500 and two-child families 
     with earnings under $15,500) would continue to receive an EIC 
     in excess of the family's Federal payroll taxes (employee and 
     employer shares).
       Even after the Senate Finance Committee's EIC reforms, the 
     cost of the EIC would exceed $20 billion in 1996 and 
     thereafter.
       The share of federal taxes paid by higher-income 
     individuals under the Senate Reconciliation bill would 
     actually increase as compared with Federal taxes paid under 
     current law.

[[Page S15673]]

       If you have any questions about this information, please do 
     not hesitate to contact me.
           Sincerely,
                                                  Kenneth J. Kies,
                                                   Chief of Staff.

  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. ABRAHAM. Mr. President, I yield myself as much time as I may need 
just to make a couple of comments on the second-degree amendment to the 
first-degree amendment, and then I will yield the balance of time on 
that point.
  The Senator from Iowa commented that the first-degree amendment was a 
good amendment, but not nearly adequate to deal with the issues of 
fraud and abuse in the Medicare system. I do not disagree with that 
point. It was not intended to be the comprehensive solution to fraud 
and abuse problems with Medicare.
  Indeed, we do not need that in my amendment because the 
reconciliation bill includes a whole variety of projects and sections 
which try to address these problems.
  First, the Senate Republican proposal directs the Secretary of HHS, 
through the inspector general, and the Attorney General to establish a 
joint program to coordinate Federal, State, and local law enforcement 
efforts to combat health care fraud and abuse.
  Second, our bill creates a new health care antifraud and abuse 
account to cover the cost of this coordinated health care antifraud and 
abuse program between the inspector general at HHS, the FBI, State 
fraud control units, and Department of Justice prosecutors. All moneys 
collected in the form of penalties, fines, forfeitures, and damages 
from health care fraud cases will be turned back over to the Medicare 
hospital insurance trust fund.
  Third, the bill establishes new health care antifraud and abuse 
guidelines relating to safe harbors, interpretative rulings, and 
special fraud alerts. For instance, under this provision, any person 
may request the HHS inspector general investigate and issue a special 
fraud alert informing the public about suspected fraudulent activities 
against Medicare or Medicaid.
  Fourth, the bill strengthens current sanctions by requiring the 
Secretary of HHS to exclude from receiving Medicare or Medicaid payment 
individuals and entities against whom there have been convictions for 
fraudulent activities.
  Fifth, we create intermediate sanctions for the Secretary of HHS to 
use against Medicare HMO's which fail to live up to contractual 
responsibilities. Civil monetary penalties range from $10,000 to 
$100,000.
  Sixth, our bill establishes a national health care fraud and abuse 
data collection program and requires the information collected be made 
available to Federal and State government agencies and health care 
plans.
  Seventh, this proposal increases the amount of civil monetary 
penalties for current law, adds new offenses to those subject to civil 
monetary penalties, and requires that all civil monetary penalties be 
used to reimburse the Medicare or Medicaid program and any remaining 
dollars be returned to the health care fraud account.
  Eighth, for the first time, a health care fraud section is added to 
the criminal code.
  Ninth, this measure extends the authority of State health care fraud 
control units by allowing the Units to investigate other Federal fraud 
abuses and allowing investigation and prosecution in the case of 
patient abuse in non-Medicaid board and care facilities.
  Finally, Mr. President, the 10th reason the Senate Republican bill is 
tough on fraud and abuse is that it will clarify existing provisions of 
the criminal antikickback law in the areas of discounting and managed 
care related to Medicare choice plans. Direct the Secretary of HHS to 
study the benefits of volume and combination discounts to the Medicare 
Program and develop regulations based on the findings of such a study.
  And I just conclude my statement by saying we have worked hard 
already in this legislation to address the areas of fraud and abuse in 
Medicare to try to save the taxpayers' dollars. I would just add this 
point. As I inspected the things that we had already done, it struck me 
the one missing ingredient, important missing ingredient was to provide 
an incentive whereby the Medicare beneficiaries themselves could help 
us to solve these problems in the years ahead and to provide an 
incentive for the Medicare beneficiaries to help us solve these 
problems in the twin approaches which we have outlined in our 
amendment.
  That said, at this point----
  Mr. HARKIN. Will the Senator yield just to engage in a 2-minute 
colloquy?
  Mr. ABRAHAM. I committed time at this point to other Members. Maybe 
they would be able to yield at this point, but I have to, at this 
point, yield my time to the Senator from New Hampshire.
  Might I make an inquiry as to how much time we have left?
  The PRESIDING OFFICER. The Senator has 22\1/2\ minutes.
  Mr. HARKIN. I just wanted to ask one very small thing.
  Mr. ABRAHAM. Sure.
  Mr. HARKIN. The Senator was very thoughtful. As I said, I do not 
really have much argument with what is in the bill. I am not trying to 
undo what is in it, nor the Senator's amendment. But I still think the 
heart and soul of this is competitive bidding. I hope the Senator will 
think about that. Maybe we might reach some agreement on this. But I 
think the time is long past when we should put out competitive bidding 
just like they do in the Veterans Administration. I hope your side 
might take a look at that.
  I thank the Senator.
  Mr. ABRAHAM. At this point, I would like to yield 12 of our remaining 
minutes to the Senator from New Hampshire, to be followed by 10 minutes 
to the Senator from Idaho.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized 
for 12 minutes.
  Mr. GREGG. Mr. President, I thank the Senator from Michigan for 
yielding this time. I think it is important at this juncture in the 
debate, because so much has been discussed relative to the impacts of 
the Medicare activity within this bill and all these numbers that have 
been put on the floor, to maybe go back and review where we are, 
especially in the context of this amendment that has been brought 
forward by the Senator from Michigan, which is an excellent amendment, 
and the amendment which has been brought forward by the Senator from 
Iowa, because the Senator from Iowa keeps referring to the fact that 
the essence of cost control in Medicare should be competitive bidding.
  If that is the Senator's position, and that is the position of the 
Members on the other side of the aisle, then they should be embracing 
with enthusiasm the proposal for strengthening Medicare which we have 
put forward in this bill because our proposal is competitive bidding. 
What we are saying to the senior citizens of this country is today you 
are locked into a single-source provider, or approach called fee for 
service. But we are going to open the marketplace up to you. We are 
going to give you, the seniors of this country, choices--essentially 
the same choices in concept that Members of Congress have. We are going 
to allow you to choose between groups of doctors practicing together in 
what is known as PPO's, and doctors practicing together with hospitals 
in what is known as HMO's, and groups of doctors and hospitals 
practicing together in all different kinds of imagination for which we 
do not have names and titles for, euphemisms, initials, and titles for; 
medical savings accounts, and your present fee-for-service proposal 
which you can participate in. We will not limit your ability to 
participate in that. But we will open the marketplace to competitive 
bidding for your dollars that you are spending on Medicare today and on 
your health care.
  That is the essence of our proposal. It is to bring the marketplace 
into the Medicare system, something that has been ignored over the last 
20 years as we have seen Medicare evolve.
  The impact of doing that is essentially what the Senator from Iowa 
has mentioned. He thinks the impact of bringing competitive bidding 
into a narrow band of purchasing activities on Medicare, the impact of 
bringing competitive bidding to the entire concept of health care and 
the marketplace into the Medicare system, is to control the rate of 
growth of costs of the Medicare system. Why are we doing this? We are 
doing it because if we do not control the rate of growth for the 
Medicare system we have been told by 

[[Page S15674]]

the Medicare trustees that the Medicare system will go bankrupt. 
Unfortunately, earlier today we heard about the fact that statements 
were made on the other side of the aisle from some of the Members that 
we, in controlling the rate of growth of the Medicare system, are 
undermining the Medicare system; the fact we are trying to keep the 
Medicare system from growing at the 10-percent rate of growth, which 
the trustees have said is going to lead to bankruptcy, is being 
construed on that side of the aisle as somehow irresponsible.
  I find it very difficult to follow the logic of that argument 
because, as the trustees have told us, a 10-percent rate of growth is 
not sustainable, and will lead to bankruptcy. How can you come forward 
on the floor of this Senate and say that, when we are trying to control 
that rate of growth and allow a rate of growth which is sustainable 
which allows the trust fund to remain solvent, we are being 
irresponsible?
  The irresponsibility lies with those who continue to allow the costs 
to escalate uncontrolled at a 10-percent rate of growth and, therefore, 
would lead to bankruptcy of the system. The way we are planning to 
control those costs is through competitive bidding, using the 
marketplace, giving seniors options which they presently do not have, 
to go out and choose different forms of health care delivery; being 
absolutely clear at the same time that, if they want to stay in the 
system they want today, if they want to stay in fee for service, they 
can do that.
  What has been the experience that leads us to believe that by giving 
seniors more choices we will end up being able to control the rate of 
growth in health care costs? It is what has happened in the private 
sector. The private sector, over the last 5 years especially, has seen 
a major move of employee insured groups going from fee for service into 
some sort of coordinated care delivery, some sort of fixed cost 
insurance program. The experience has generated some fairly clear 
guideposts for us in the public sector as we attempt to give our 
seniors who are getting Medicare today the same type of options that 
those of us in the Senate have, and that many people in the private 
sector have, which is the opportunity to choose different types of 
health care delivery services.
  This chart that I have here reflects what has happened in the private 
sector as we have seen a movement of approximately 60 percent of the 
population from fee for service into different types of coordinated 
care, or care with a fixed cost paid up front. This red line is the 
rate of inflation in health care costs. The blue bars indicate the rate 
of enrollment in managed care types of plans. As you see with the 
managed care enrollment going up, the rate of health care costs, 
inflation, has gone down. In fact, it has dropped by about 50 percent. 
It has dropped so much that, for example, in the Federal employee plan, 
which is the plan that basically we are tracking at least in concept--
not specific but in concept--with what we are going to offer senior 
citizens, last year the Federal employee plan had no health care 
inflation. This year it will have no health care inflation. Last year 
it actually had a drop in health care inflation. So there was actually 
a negative increase in premium costs.
  That is why we believe that when we give seniors the option to 
participate in a marketplace, why when we bring the marketplace forward 
to compete for the seniors' dollars, we will see the type of efficiency 
which is inherent in a capitalist system, in a marketplace system, in 
the type of approach which the Senator from Iowa has said will work in 
a narrow band. It will work in a broad band also.
  Therefore, under our plan we are essentially going to be able to 
address not just the narrow costs of how much a bandage costs but the 
broad costs, the overall health care delivery system cost for our 
senior citizens. That, of course, should be our goal. Why should it be 
our goal? Let us get back to why that should be our goal--controlling 
the rate of growth of health care costs. Because, if we do not control 
that rate of growth, once again it is important to emphasize the fact 
that the hospital trust fund goes broke. It goes bankrupt.
  Once again, I want to point out that I keep hearing this number on 
the other side of the aisle that all we need is $89 billion to adjust 
the Hospital Health Care Trust Fund. That number is simply not accurate 
according to the trustees' report. The trustees' report was very 
definitive in stating that in order to get actuarial solvency of the 
hospital trust fund of the most minimal nature, the absolute bare 
minimum actuarial solvency, you need an adjustment that amounts to $387 
billion over 7 years, not $89 billion.
  So by using the method of creating competition for seniors, we expect 
to be able to control the rate of growth of costs. And we are really 
not controlling it all that much, quite honestly. We are talking about 
still allowing the rate of growth of Medicare to be 6.5 percent, 
essentially the same rate of growth of health care that the President 
wanted. As pointed out earlier by Senator Nickles on this floor, the 
President's budget, as it was sent up, allowed for a rate of growth in 
Medicare which was essentially the same as our rate of growth in 
Medicare.
  Why did the President send those numbers up? Because the President 
understands or at least his trustees understand that a rate of growth 
which we are presently suffering from--the 10-percent rate of growth--
is unsustainable, and will lead to bankruptcy. You have to slow that 
rate of growth. But a 6.5-percent rate of growth is a huge--an 
absolutely huge--infusion of money into the Medicare system. That 
infusion of money--I will return to another chart which I had earlier--
which represents $349 billion of new spending on Medicare over the next 
7 years will be the type of dollars necessary to generate competition 
in the marketplace for our senior citizens as they go out in the 
marketplace and look for different types of health care to obtain.
  How much time do I have remaining?
  The PRESIDING OFFICER. The Senator has 1 minute and 6 seconds 
remaining.
  Mr. GREGG. I am running out of time. I probably will not have time to 
touch on it. But let me simply say in concluding on this point that the 
plan which we as Republicans have put forward is a plan which 
fundamentally strengthens the Medicare system.
  It says to seniors that we are going to give you an opportunity to 
participate in similar programs that Members of Congress and Federal 
employees have, the opportunity to go out in the marketplace and look 
at different health care plans and decide which one is best for you.
  And remember, we also say in our plan that if you, the senior, happen 
to purchase a health care program which costs less than what it 
presently costs us as a Federal Government to pay for your fee-for-
service health care, we are going to let you keep the savings.
  For example, in New England, for the average senior we are paying 
about $5,000. To the extent that senior is able to go out and find a 
health care plan that has to supply the same basic benefits and will 
probably supply many more--eyeglasses, some sort of drug benefit--to 
the extent that senior gets that plan because the marketplace prices 
that plan at a lower price, say they get it for $4,500 instead of 
$5,000, we are going to let the senior under our plan keep up to a 
minimum 75 percent of that $500 or possibly the whole $500, which is 
another huge marketplace incentive to control costs because it makes 
seniors thoughtful and, yes, cost-conscious purchasers of their health 
care.
  It also creates in the marketplace a tremendous dynamic to compete 
for those senior dollars, which is the whole theory behind what we 
think is known as capitalism and what we think will generate, first, 
better and higher quality care and, second, care which will be more 
cost-effective and therefore will be affordable and therefore will 
guarantee the solvency of the trust fund.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. GREGG. I thank the Chair.
  The Senator from Idaho.
  Mr. CRAIG. Mr. President, I join my colleagues tonight to debate this 
most important provision of the Senate reconciliation bill that is 
before us and the Republican proposal that I am so proud to support 
because of the kind of elements that we have put before the American 
public as truly positive change, while at the same time recognizing I 
think some of the very real needs that many of our citizens have.

[[Page S15675]]

  The one that the Senator from New Hampshire has just addressed and 
the one I will spend some time with this evening that I think is 
critical for us to understand, of course, is Medicare and the changes 
we are proposing to bring stability and strength to the system and the 
kind of choice and independence that the seniors of this country, who 
are the recipients, the beneficiaries of this program, have expected 
and deserve to expect from their Medicare program.
  The Senator from Iowa this evening has introduced a competitive bid 
bill in the antifraud and abuse provision of Medicare reform, and for a 
few moments this evening I think it would be very important to spend 
some time with that and to understand it.
  The Senator from Michigan has put forth an amendment that addresses 
many of the provisions and adds to many of the provisions of the 
Republican proposal as it relates to Medicare reform; that I think is a 
tremendously positive approach; that in combination with the 10 reforms 
already in our legislation, when scored by the Congressional Budget 
Office, represents a proposed savings to Medicare of $4.1 billion.
  Now, I must say that I am told the amendment of the Senator from Iowa 
has not been scored, and I wish he were in the Chamber so that I could 
seek that out with him, and if he returns I will ask him that question, 
because as we strive to balance the budget and keep ourselves on course 
as the American people have asked us to, it is important that 
amendments that come to the floor, if they are credible, if they really 
want to vote on them, ought to be scored. Ours has been, and it does 
represent a $4.1 billion savings.
  What is significant about that is representative of what is going on 
in health care delivery today in this country and the fact that there 
are dedicated efforts at defrauding both the American taxpayer and the 
consumer of Medicare benefits.
  Senator Cohen was in the Chamber this afternoon or later this 
evening. He serves as the chairman of the Senate Special Committee on 
Aging. I have the privilege of serving on that committee with him. Over 
the last several years, both he and Senator Pryor, who chaired that 
committee before him, and I and others who have served on that 
committee have held a series of hearings to try to ferret out and 
understand the kind of waste, fraud, and abuse especially being 
perpetrated on the seniors of this country that would have the kind of 
impact on Medicare that it currently has.
  Let me give you a couple of figures, Mr. President. As much as 10 
percent of U.S. health care spending or about $100 billion is lost each 
year to health care fraud and abuse. That is a phenomenal figure. And 
yet we believe it is reasonably accurate. Over the last 5 years, 
estimated losses from these fraudulent activities have totaled $408 
billion.
  Now, that is not the only program or benefit that would have gone to 
the senior. That is tax money. That is the hard-working, tax-paying 
American citizen's dollar that some charlatan is making off with 
because they have learned to game the system and because we have not 
been able to catch them in gaming the system, or at least we certainly 
have not caught them at the level that I think all of our taxpayers 
would want.
  So the 10 provisions that are in our Medicare reform bill, that were 
spoken to earlier this evening, along with the additional provision in 
the amendment from the Senator from Michigan, will register a savings 
of about $5 to $6 billion, and that is significant. That is big dollars 
where I come from, big dollars in anybody's estimation, and when it 
comes to delivering health care needs to our seniors, those are truly 
important dollars.
  One of the things that is most significant in all of this, while we 
create brand-new bureaucratic schemes to ferret out all of this, is the 
very simple concept with which the Senator from Michigan has come 
forward. That is that individual Medicare beneficiaries report 
suspected fraud and abuse and we create an incentive program to allow 
them to do that.
  Let me tell you why that is important. I think if every Senator would 
stop for just a moment, they could remember almost instantly that 
within the last several months they have had 1, 2, 3, 5, 10 letters 
from Medicare recipients in their State questioning whether their bill 
was accurate, whether they had been bilked out of a service that was 
not delivered and whether in fact their account had been charged.
  Mr. President, less than 3 months ago, a former citizen from my 
State, who now lives in California, called my office one day. I had not 
heard from this man in years. He had happened to be from my hometown. 
He is now retired and living in California, and he had major surgery, 
and he is on Medicare. For some reason, he thought something was wrong 
with the billing; that he not only had been overcharged but there were 
fraudulent charges involved.
  He sent me all of his material and said, ``Senator, I know I no 
longer live in your State but we have known each other over the years. 
Would you look into it?''
  Mr. President, we looked into it. It was thousands of dollars of 
billing that he was questioning. Within a period of about a month, we 
had discovered, in working with HCFA and working with Medicare, that 
this was, in fact, fraudulent billing.
  Now, that is only one example, and I have chosen not to use his name 
tonight because I did not ask his permission, but I have done that on 
many occasions in working with my constituents, and I know nearly every 
Senator in the Senate has. We recognize without question that the 
current structure of Medicare simply cannot get at the kind of waste, 
fraud, and abuse that is current and prevalent within the program, and 
in trying to secure it, trying to make it stable, being able to turn to 
our citizens and say to them that Medicare will be there in the out 
years, strong and ready to serve them and their needs, we must get at 
these programs. They must result in the kinds of savings, more 
importantly, the kind of tightening up of it, that I think is so 
critically necessary.
  So the 10 provisions we have talked about, certainly the one that the 
Senator from Michigan has offered that creates the incentives for the 
beneficiaries themselves to become involved, working with Federal, 
State, and local law enforcement units to combat especially the fraud 
sides of the program, are going to be increasingly valuable, and this 
is what I am proud to say we have offered. It has been scored. It saves 
$4.1 billion over the period of this legislation, and that is of 
critical need to all of us.
  Mr. President, may I inquire how many minutes are remaining in my 
time?
  The PRESIDING OFFICER. The Senator has 1 minute.
  Mr. CRAIG. As we continue the debate over the next 12 to 14 hours, 
Mr. President, I hope that those citizens of our country who are 
watching will recognize the importance of what we do; and that is, for 
the first time in my time in public service for the State of Idaho, 
that this Congress will truly bring about a balanced budget proposal, 
and one that will set our Government in motion toward a balanced 
budget.
  This is exactly what the American people were asking for last 
November. They were asking us not only to change the way Government 
thinks and acts, most assuredly the way Congress thinks and acts, but 
to do the kinds of things that we are doing in the Medicare reform, to 
clean it up, to stabilize it, to give them choice, to give them the 
freedom of not just fee for service, but the kinds of options that the 
private citizen of this country has, and to keep the program.
  We know we can balance the budget and allow these programs to 
continue to serve the truly needy in our country and those that are 
direct participants, like the Medicare beneficiaries, and to do so in a 
way that allows the program to remain strong and assures that in the 
long term we will be able to have a balanced budget, turn to the 
American people and say, ``We've done it. Your debt is now under 
control.'' Let us then begin to work on debt structure.
  The PRESIDING OFFICER. The Senator's time has expired.
  Who yields time?
  Mr. BRADLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. BRADLEY. Mr. President, I ask unanimous consent to lay the 
pending amendment aside.

[[Page S15676]]

  The PRESIDING OFFICER. Without objection, it is so ordered.


                            Motion to Commit

  Mr. BRADLEY. Mr. President, I send a motion to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from New Jersey [Mr. Bradley] moves to 
     commit the bill S. 1357 to the Committee on Finance with 
     instructions that the Committee on Finance report the bill 
     back to the Senate within 3 days (not to include any day 
     the Senate is not in session) with identical language, 
     except that the Committee on Finance shall strike sections 
     7462, 7463, 7464, and 7465 of the bill. The Committee on 
     Finance shall also include provisions which offset the 
     revenue losses from the striking of such sections with an 
     elimination of corporate tax welfare provisions.

  The PRESIDING OFFICER. The Senator from New Jersey is recognized for 
one-half hour.
  Mr. BRADLEY. Mr. President, I know that this debate is being held 
opposite the eighth inning of the World Series. And I will keep all 
Members in the Senate guessing as to what the score is, so we can focus 
on the issue before us, which is the earned-income tax credit.
  Mr. President, the earned-income tax credit is a way to provide tax 
relief to working Americans of modest income. It is the most 
significant tax relief provided to working Americans of modest income 
that we have seen in the last 20 years. It has given many who are 
striving to make a better life for themselves and their families under 
very difficult circumstances the money they need to send their kids to 
parochial school, the money they need to maybe buy a little bigger 
apartment, pay the utility bills. It gives them the money that allows 
them to continue up the ladder of upward mobility.
  Mr. President, the bill that we are considering now raises taxes on 
those working Americans. It essentially defers the third year of the 
tax cut that was passed in 1993 for those working Americans. In 1981, 
we passed a tax cut that benefited disproportionately the wealthy, and 
Democrats constantly made the debate that we should defer the third 
year of that tax cut because the wealthy did not need more tax relief.
  We now have a proposal where the third year of a tax cut is about to 
be provided to working Americans of modest income, and the Republicans 
are attempting to defer that tax cut for working Americans of modest 
income.
  Mr. President, I oppose this effort. I opposed it in the committee. I 
think that it is shortsighted. I think that it is not progrowth. I 
think it is not profamily. I think to raise taxes on families earning 
under $28,000 a year in income is an antifamily, antigrowth measure.
  Mr. President, in this bill, according to the Department of the 
Treasury, almost 50 percent of the tax breaks go to people making more 
than $100,000 a year; at the same time, families with incomes below 
$30,000, which represent over 40 percent of the American families, face 
a tax increase.
  Now, Mr. President, if this were the only measure in this bill, this 
tax increase on working families, I would oppose it. If it were the 
only measure in the bill, I would oppose it. But it is not the only 
measure in the bill. There are many other provisions that benefit many 
special interests, but there is one provision, in addition to this tax 
increase on working Americans of modest income, that I think draws the 
distinction between the parties very clearly, and that is the estate 
tax provision in this bill.
  The estate tax is, of course, a tax assessed when one passes one's 
estate on to one's heirs. There is a $600,000 exemption, meaning that 
if you have an estate, when you pass away, if it is under $600,000 you 
pay no estate tax. Every year only 1 percent of those who die pass on 
estates of more than $600,000. Only 0.2 percent of those who die in a 
year pass on estates of more than $2 million.
  Embodied in this bill that increases taxes on families working and 
earning under $30,000 a year, is a tax cut for estates of $5 million, a 
tax cut of $1.7 million on average. Let me repeat that. In this tax 
bill is a tax cut of $1.7 million for estates valued at $5 million.
  Once again, Mr. President, the distinction is stark. While on the one 
hand, a $1.7 million tax cut is given to estates of $5 million, we have 
a tax increase on families earning under $30,000. I personally cannot 
understand the politics of this. I do not understand the politics of 
why. I do not understand the politics of really to whose advantage it 
lies, except those who get the $1.7 million tax cut.
  So, Mr. President, the amendment that I have offered says, ``Let's 
not increase taxes through eliminating the earned-income tax 
credit.'' I will get to that in a minute.

  But the other thing that this tax cut does is, frankly, increase the 
national debt. Let me repeat that. This tax cut increases the national 
debt. This is a deficit reduction package. A deficit reduction package 
is for the purpose of reducing the national debt. This increases the 
national debt.
  Why? Because in the budget resolution, there is a provision that says 
if there is an economic benefit from all this budget cutting, then that 
economic benefit, in its total amount, will be spent as a tax cut. That 
is what the budget resolution said.
  The CBO says if we enact this budget with these budget cuts that it 
will save about $170 billion that according to the budget resolution, 
over a period of 5 to 7 years, would be used for a tax cut.
  But this tax cut costs $221 to $224 billion. So this tax cut adds 
about $54 billion to the national debt over this period. There is no 
disputing those numbers. There are no mysterious letters from the Joint 
Tax Committee. There are no nuances on words, no playing on the 
difference between income, Social Security, and excise. There is just a 
stark number, a $54 billion more increase of the national debt.
  So it seems to me that on two grounds, this is not merited. First, 
because it gives it away to estates of $5 million a $1.7 million tax 
cut and raises taxes on families earning under $30,000.
  In addition to that, it increases the national debt by $54 billion 
over the period of this bill. But that is not the worst when it comes 
to the question of the national debt, because immediately after the 
window of 7 years, there is an explosion of debt.
  For example, the capital gains provision will cost about $40 billion 
in the first years, which is about $5 to $6 billion a year, but in the 
remaining years, it costs $30 billion. So it jumps from $10 billion, 
$11 billion, $12 billion a year. Or take the IRA proposal; the 
backloaded IRA cost $7 million in the first 7 years, and $12 billion, a 
little less than $2 billion a year, and in the next 3 years costs $21 
billion, which is another $7 billion a year.
  So talking about the budget deficit, this is an explosion of the 
debt, an explosion of the debt in the outyears. On both those grounds, 
I strongly oppose these provisions.
  The question is, is this a tax increase? We have a very skillful 
maneuvering being exercised by the other side. The distinguished 
Senator from New Mexico reported his numbers that for people earning 
under $75,000, 72 percent of the tax cut goes to people earning under 
$75,000 a year. True. But let us look a little deeper. The bulk of that 
goes to people earning between $30,000 and $75,000. The tax increase on 
families earning under $30,000 is still there.
  In other words, what the distinguished Senator from New Mexico said 
can be true and still not refute the fact that there is a dramatic tax 
increase on families earning under $30,000.
  Then, of course, we have this famous joint tax study which concludes 
that less than 1.5 percent of all households will have an income tax 
increase as a result of EITC reforms. ``There it is,'' says the Senator 
from New Mexico and the Senator from Delaware, ``only 1.5 percent have 
an income tax increase.''
  Maybe, but what about Social Security taxes? If you are earning 
$25,000 a year, the income tax is going to be a big problem; you are 
going to pay it. The big tax you pay is a Social Security tax, and the 
earned income credit is for the purpose of offsetting taxes and Social 
Security taxes. So everything that the Joint Tax Committee says in 
their letter can be true and a $20 billion increase in Social Security 
taxes can still be valid.
  So, Mr. President, anyway you cut this, this results in a tax 
increase for families earning under $30,000 a year. In my State, which 
has the second highest per capita income, that means about 13 percent 
of the families in my State will have a tax increase.

[[Page S15677]]

  I saw the distinguished Senator from New Mexico on the floor saying 
40 percent of the families in his State would have a tax increase 
because they earn under $30,000 a year. That is because their per 
capita income is lower.
  So, Mr. President, we are going to hear a lot about errors and yet in 
the opponents' provision, only $1.6 billion deals with anything related 
to compliance. If they are so interested in fraud and error, why are 
they not doing more to deal with compliance?
  In the amendment I have suggested, I keep $1.6 billion in compliance 
measures. And then, of course, the other side will show a graph. ``This 
is a gigantic explosion of growth in this program, an explosion of 
growth.''
  Mr. President, when you give somebody a tax cut, you lose revenue. In 
1993, we chose to give families earning under $30,000 a year a 3-year 
tax cut, which means that tax cut grows. So when you see the chart that 
they might show that shows a figure with a line going up saying 
``Growth of EITC,'' translate in your mind: Increasing tax cut for 
families earning under $30,000 a year. Yes, and if you do not want to 
give them a tax cut, then you would support the Republican position. If 
you believe they should have the third year of their tax cut, just as 
the wealthy had the third year of their tax cut under the bill passed 
in 1981, then you would support the Democratic position. Do we want to 
raise taxes on working families or not? Which is the progrowth, 
profamily policy? I do not think that there is much of an argument on 
the other side.
  They will say, ``Oh, no, we have a child credit.'' Bravo. Let me 
compliment them. I wish they had supported my amendment in the Finance 
Committee that would have stricken everything in this bill except the 
child credit, the adoption credit, the student loan interest deduction. 
They voted against it. Why? Because you want to have that other 
provision in the bill, the estate tax provision.
  Remember? A $5 million estate gets an average tax cut of $1.7 
million. That is why you did not support the amendment and simply have 
a tax cut for working families, because you wanted the tax cut for 
estates of $5 million. Strike it from the bill, show us that you want 
only tax cuts for working families. If not, admit to what this game is 
all about.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time? The Senator from Delaware.
  Mr. ROTH. I yield myself 10 minutes.
  The PRESIDING OFFICER. The Senator is recognized for 10 minutes.
  Mr. ROTH. Mr. President, you have heard a great deal of demagoging 
during the past few days from the President, from congressional 
Democrats, and from the Treasury Department, a lot of bogus claims 
about our tax package. We are here this evening to bring you the truth 
about the Republican tax package. The bottom line is this: American 
families will be better off next year under our tax package than they 
are today. Our tax relief package is the biggest tax cut for middle-
income families in more than a decade.

  Mr. President, I agree with the President of the United States when 
he says that the tax increase of 1993 was a mistake--the largest tax 
increase in the history of this country. I would hope that there would 
be bipartisan support for our tax cut, in view of the President's 
message.
  Under our reform, more than 98 percent of all U.S. households will 
receive either a tax cut or no tax increase. And this includes our 
reforms to the earned income tax, the $500 per child credit, and the 
marriage penalty relief in the Senate Republican bill. Those are the 
facts.
  I challenge the Administration and Congressional Democrats to prove 
their assertion that 51 percent of all taxpayers would receive a tax 
increase under our bill. This assertion has no basis in fact, and it 
seriously strains the credibility of the Treasury Department. The Joint 
Tax Committee analysis, released today, shows that the facts are on our 
side. Republicans are focusing the earned income credit on the working 
poor with children--the people for whom it was originally intended. We 
give a tax cut to most families that pay income tax, and we preserve 
the EIC for those who need it the most. The indisputable fact is that 
more than 98 percent of all U.S. households will either receive a tax 
cut or have no tax increase with the Senate Republican bill.
  The earned income credit program started in 1975 in an environment 
focused on reforming welfare policies for families with dependent 
children. Senator Long was a driving force behind the establishment of 
the earned income credit program, and this program provided cash 
assistance to working low-income families with children. The Finance 
Committee report on the Tax Reduction Act of 1975 stated that the 
program should be of importance in inducing individuals with families 
receiving Federal assistance to support themselves. There is no doubt 
that since the inception of the earned income credit, its focus has 
been on hard-working, low-income families with children.
  In 1993, the program strayed from its original intent of helping 
working families with children, when President Clinton expanded the 
program to include childless, able-bodied working adults. My colleagues 
across the aisle often point out that President Reagan supported the 
program. Yet, when President Reagan lauded the earned income credit, 
the program only covered working parents of children and cost about $2 
billion in 1986.
  Today, the program makes payments to childless adults, and its costs 
have skyrocketed to over $20 billion. The reforms of the earned income 
credit contained in the Republican Senate bill will return the program 
to its original goals, those lauded by Senator Long and President 
Reagan, of a welfare program focused on low-income working families 
with children.
  My colleagues across the aisle should realize that this will help 
children. Under our bill, the earned income credit will be available 
only to individuals who are eligible to work in the United States. 
Illegal aliens will no longer benefit at the expense of hard-working 
taxpayers.
  Make no mistake about it, Mr. President, EIC is a cash transfer 
program, a welfare program, administered through the Tax Code, rather 
than through a Federal agency like the Department of Labor. If Congress 
were to reduce the amounts paid to food stamps, no one would say that 
Congress is raising taxes. Changes to the EIC are the same as changes 
to the Food Stamp Program. We are not raising taxes on EIC recipients.
  The Democrats are arguing that changes to the EIC will raise people's 
taxes. In response to these concerns, I have asked the Joint Committee 
on Taxation to perform a detailed analysis of the Senate proposal to 
reform the EIC. This information is now available, and I released it 
earlier today to the public.
  Mr. President, the purpose of the changes in EIC is to focus the 
program on the working poor with children. We do make four policy 
changes. We eliminate any EIC payment for individuals with no children. 
As I indicated, this program was intended to help families with 
children, and that should continue to be the policy of this program. We 
also prevent illegal aliens from obtaining this benefit. We also 
provide that outside income should be considered in determining whether 
or not one is eligible for the EIC. Why is tax-free interest not 
considered in determining eligibility? Why is tax-free Social Security 
or pensions not considered in determining eligibility for the earned 
income credit? Fourth, we take steps to eliminate the fraud and abuse 
in this program. Unfortunately, this program has had deplorable rates 
of fraud and abuse, as high as 30 to 40 percent a year. Recently, there 
has been, hopefully, some improvement in that. But it is estimated that 
it could still be as high as 20 percent. People are outraged and 
shocked with the waste, fraud, and abuse in food stamps or AFDC, but 
they only amount to 5 to 6 percent. In this program--the EIC--it 
amounts to as high as 20 to 30 percent.
  Now, some Democrats have claimed the EIC reform results in those in 
the lower-income brackets--51 percent or less--paying higher taxes. 
That is totally false, inaccurate, and misleading. As I mentioned, I 
recently wrote the Joint Committee on Taxation to answer a number of 
questions. I pointed out that on Thursday, October 19, 1995, an article 
appeared in the Wall Street Journal entitled ``Tax Analysis Now 

[[Page S15678]]

Shows GOP Package Would Mean Increase For Half the Payers.''
  Is there any validity to the assertion that the Senate Finance 
Committee revenue recommendations would result in a tax increase for 
one-half of all households?
  In responding to this question, please consider the impact of the 
earned income credit reforms approved by the Senate Finance Committee 
in a separate markup last September.
  We received the answer, and the answer says, ``No factual basis 
exists for the assertion, since retracted, contained in the Wall Street 
Journal of last week asserting that one half of all households would 
experience a tax increase under the Senate Finance Committee revenue 
recommendations.''
  Even if one were to include the effects of the EIC reforms previously 
approved by the Senate Finance Committee, our analysis indicates that 
less than 1.5 percent--let me repeat that, 1.5 percent--of all 
households would experience an income tax increase.
  I think that shows the falseness of the claim that 50 percent of the 
American families would suffer a tax increase because of this package 
we are considering today.
  Now, during the Senate Finance Committee's markup of revenue 
recommendations on October 18-19, 1995, various assertions were made 
with respect to the impact of the EIC reforms previously approved by 
the committee.
  I asked the Joint Committee on Taxation to address the following 
questions: Would any households receiving an EIC today pay more income 
taxes under the combined efforts of the Senate EIC reform, $500 per 
child credit, and marriage penalty relief? If so, provide how many 
households will be impacted in this manner and explain why.
  The answer is that, ``with respect to the Senate Finance Committee's 
previously approved EIC reform, our analysis of the combined effects of 
the Senate Finance Committee EIC reforms, the $500 child credit, and 
marriage penalty relief for 1996 indicate that less than 1.5 percent of 
all households will have an income tax increase as a result of the EIC 
reforms.''
  Would families with children who are currently eligible for the 
maximum EIC--that is, families with earnings under $12,000 --continue 
to receive in future years at least as much EIC as they now receive?
  Again, the answer is, ``families who are currently eligible for the 
maximum EIC with children and having adjusted gross income under 
$12,000 will receive an even larger EIC next year and thereafter. For 
example, the maximum EIC for a family with one child will increase from 
$2,094 in 1995 to $2,156 in 1996. The maximum EIC for a family with two 
or more children will increase from $3,110 in 1995 to $3,208 in 1996.''
  This is illustrated here on the chart. It shows, for example, that a 
family with children that has income of $10,000 would receive this year 
$3,110; that would go up to $3,208 in 1996. The same is true for a 
family with children that has income of $15,000. This year they would 
get $2,360; that would rise to $2,488 in 1996. Not only would they 
continue to get EIC, but it would continue to increase.
  Mr. President, let me just again emphasize that the claim that people 
with incomes below $30,000 would have a tax increase is totally false. 
First, what the Democrats are doing is calling a reduced welfare check 
a tax increase.
  The PRESIDING OFFICER. The time of the Senator is expired.
  Mr. ROTH. I yield myself 5 additional minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ROTH. Second, if someone receives a check from the Government for 
$50 in 1995, and then in 1996 under our reforms receives a check for 
$75, that is $25 higher. Republicans and most people would call that a 
bigger check from the Government. But the people on the other side of 
the aisle call it a tax increase if the person was supposed to receive 
a check for $100 in 1996.
  What we are doing is slowing the rate of growth of this program. In 
the last 10 years this program has grown something like 1,000 to 1,200 
percent. The tax credit which was 14 percent plus 5 years ago is now 36 
percent.
  What we are trying to do is to slow down the rate of growth so that 
we can balance the budget.
  Now, I listened, Mr. President, with great interest to my Democratic 
colleagues' description of what we are doing. People are saying that 
they do not like the tax package. They make fun of the changes in the 
estate taxes. Just let me say, as I have gone around back home and 
talked to the family farmer or to the owner of a family farm, as I talk 
to the owner of a small business, one of their greatest concerns is 
that they are not going to be able to turn over that farm or that 
business to their children.
  What we are seeking to do in our changes in the estate taxes is to 
make that possible, make it possible for the family farm to continue as 
it has in the past, or to make it possible for the entrepreneur who is 
successful in creating a small business to leave it to his children.
  We think our package is a humane package. We are proud of the fact 
that it means tax cuts for the American people. We agree with President 
Clinton when he says that the big tax increase of 1993 was too high.
  Mr. President, I yield back the floor.
  Mr. BRADLEY. Mr. President, I yield 5 minutes to the distinguished 
Senator from Massachusetts.
  Mr. KERRY. Mr. President, at the outset of the comments of the 
Senator from Delaware, he talked about telling the truth versus bogus 
claims. Then he refers to a Joint Taxation Committee study to try to 
refute some comments made by the Senator from New Jersey.
  If we want to talk about bogus claims, the Joint Taxation Committee--
which I might add is chaired by the majority party --sends a statement 
saying there is no linkage and no increase, but refers only to income 
tax.
  Here you have another sleight-of-hand, bogus effort to avoid the 
reality, the same way the reality is being avoided right now with the 
debate on the thousands of pages that takes place during the World 
Series. It is a great way of avoiding accountability.
  The fact is that the earned income tax credit is a credit not just 
against income tax but also against the payroll tax. The Joint Taxation 
Committee says nothing about the payroll tax impact. So, in effect, it 
is another sleight of hand.
  If you want to talk about bogus--you just heard the chairman of the 
committee say, Mr. President, that we are going to slow down the rate 
of growth of the program.
  What is the program? The program is a tax cut for working poor--by 
his own admission--when what he has come to the floor and said is we 
will slow down the capacity of working poor Americans to participate 
because we are not going to give as much of a tax cut to them. It is 
that simple. This is not complicated. We are going to slow down the 
rate of growth in the tax cut for working poor Americans, but we are 
going to increase the tax break for people who have it already in 
America. That is what this is all about.

  If you happen to have a $5 million estate, you are going to get a 
$1.7 million tax break. But if are a working poor person--and I have 
194,000 families in Massachusetts that will be affected by the cut in 
this program, 194,000 families in Massachusetts are going to pay $370 
more in taxes because they want to slow down the rate of growth in the 
program. That may not be a lot to the person who has a $5 million 
estate, but let me tell you something, for somebody who is working, 
working, working--which is what we all talk about here--to get off of 
welfare and make it, $370 is a lot of money. People count those nickels 
and dimes when they are in that position. It is whether or not they are 
riding on the T.
  There was a front-page story in the New York Times, I think last 
Monday. It talked about the impact of the earned income tax credit on 
working people. Here was a woman in New York City who, because she got 
the tax credit for working, was able to cut back on her apartment rent. 
She went back and got rid of a $700 rent, went down to a $400 rent so 
she could add it to the money that she got from the earned income tax 
credit. Do you know what she did? She bought herself a 15-year-old car 
so she could drive outside of the area that is served by public 
transportation so she could get a better job that earned more money. 
And that is exactly what she did. She broke out of 

[[Page S15679]]

poverty by making hard choices because she had the earned income tax 
credit.
  Our friends are coming along here. They are giving people who earn 
$300,000 a very nice, fat break. And they are taking away from the 
people who earn $30,000 or less.
  There is no way for them to cut it any other way. Is there some fraud 
in the program? Yes, there is some fraud in the program. Can we cure 
that without reducing the program for eligible people? Sure we could. 
But that is not what they are choosing to do. They are going to throw 
everybody in the pot of fraud.
  I keep hearing about illegal immigrants. That is a nice hot button in 
America now. I do not know many people who think illegal immigrants 
ought to be getting a lot. But that has now entered into this debate. 
That is not what we are talking about here.
  It just is beyond comprehension that in this country we are going to 
play such games with definitions and reality when everybody understands 
what the reduction means.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. KERRY. Mr. President, I really hope we are going to have a better 
sense of fairness here than is being exhibited in this approach to 
people who are working and trying to break out of the cycle of poverty.
  The PRESIDING OFFICER. Who yields time? The Senator from Delaware.
  Mr. ROTH. Mr. President, if I might just yield myself 1 minute?
  The PRESIDING OFFICER. The Senator is recognized for 1 minute.
  Mr. ROTH. The one question we asked of the Joint Tax Committee is:

       Would families with children living below the poverty line 
     continue to receive an EIC in excess of the family's Federal 
     payroll taxes?

  And the answer is that:

       Families living at or near the poverty line, one-child 
     families with earnings under $12,500 and two-child families 
     with earnings under $15,500, would continue to receive an EIC 
     in excess of the family's Federal payroll taxes, including 
     both employee and employer shares.

  So the answer is that EIC more than offsets the payroll and other 
taxes of the family.
  I yield the floor.
  Mr. BRADLEY. Will the Senator yield at that point for a question?
  Mr. ROTH. Yes.
  Mr. BRADLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. BRADLEY. The Senator said--would the Senator read again, once 
again, what was it the Joint Tax Committee said about the various taxes 
that were offset?
  Mr. ROTH. The question was:

       Would families with children living below the poverty line 
     continue to receive an EIC in excess of the family's Federal 
     payroll taxes?

  And the answer is:

       Families living at or near the poverty line, one-child 
     families with earnings under $12,500 and two-child families 
     with earnings under $15,000, would continue to receive an EIC 
     in excess of the family's Federal payroll taxes, employee-
     employer shares.

  Mr. BRADLEY. Mr. President, no one disputes what the Senator has just 
said. EIC is available for families under to $28,000. He is saying at 
the same time this is nothing but a welfare program. He is saying, 
fine, we will keep the welfare part of this. But if you start to make 
it a little bit--sorry. We will not offset your payroll taxes.
  I mean, that is not an answer to the problem that we posed. Yes, they 
posed it so that if you have poverty and you are right at the poverty 
level and you have family now, you have kids--not if you are single and 
poor, but if you have kids, then, yes, it will offset the Social 
Security earned income. Of course, you do not pay a whole lot of income 
taxes in poverty. You pay virtually no income tax when you are in 
poverty.
  So you only have Social Security. So the earned income would offset 
Social Security in poverty. But not at $28,000. Not when the family 
starts to make a little money. Not when they are making $20,000, 
$25,000, $28,000, $29,000. Not there, no, no, no. That way, you pay 
more taxes. Welcome to the middle class, the Republican middle class.
  You are middle class. You begin to make it? Pay more taxes. If you 
have that estate of $5 million, you get a $1.7 million tax cut. That is 
the story here. There is no other story. It has not been refuted. A 3-
year tax cut in 1993 for working families? Republicans say do not give 
them that third year. Do not give them that third year of tax cut.
  Pro-family? Pro-growth? Hardly.
  The PRESIDING OFFICER (Mr. Brown). The Senator from Oklahoma is 
recognized.
  Mr. NICKLES. Mr. President, how much remains on this amendment?
  The PRESIDING OFFICER. There are 10 minutes and 8 seconds remaining.
  Mr. NICKLES. Mr. President, I would like to answer my colleague from 
New Jersey. He said, ``What about a family that makes $28,000.'' Under 
current law they have a great big earned income tax credit of $116. 
But, look out, they pay income taxes of $1,665.
  Under our proposal they are going to get a $1,000 tax cut. Under the 
proposal of the Senator from New Jersey, they get $165. My figures 
calculate they come out better by $835, under our proposal. And that is 
only dealing with the tax credit for children. It does not include the 
fact we are reducing the marriage penalty, so that gives them another 
$100, I will just tell my colleague from Massachusetts said you did not 
calculate the fact that you are offsetting payroll taxes.
  My friend is wrong.
  Mr. KERRY. Will the Senator yield for a question?
  Mr. NICKLES. He will not yield.
  Mr. KERRY. Will he yield for a correction?
  Mr. NICKLES. I will not. I want to answer a couple of allegations 
that were made. When somebody said you did not refute it, I want to 
refute a couple of them.
  Mr. KERRY. Will the Senator yield?
  Mr. NICKLES. No.
  The PRESIDING OFFICER. The Senator is advised that the request should 
be made through the Chair, when addressing another Member.
  The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, a couple of statements were made that the 
Republicans do not know that the EIC is used to offset payroll costs. 
That is wrong. This program not only offsets income taxes and payroll 
taxes, in most cases it offsets them and gives a check back.
  In looking at incomes of less than $15,000--my colleague from New 
Jersey is right--in most cases, income tax liability is zero. But this 
not only offsets income tax, but it also offsets the so-called FICA, or 
payroll taxes.
  Does it offset what an individual pays? That is 7.65 percent of their 
payroll. Yes, but it also offsets what the employer pays. That is 15.3 
percent.
  So not only does it offset all payroll taxes, but it offsets it them 
by 233 percent.
  This is a program that is writing out checks. This is a program, Mr. 
President, that will cost $23 billion this year, $3 billion of it 
offsetting taxes, and $20 billion were cash payments--Uncle Sam writing 
checks. This cash outlay program now exceeds the cost of Aid for 
Families with Dependent Children, a program that costs $18 billion. 
This program costs $20 billion.
  Families making $25,000 pay income taxes. For families that are 
paying income taxes, we give a tax cut. If they have children, we give 
$500 per child. That is pretty easy to figure. You have two children. 
That is $1,000. If they have four, that is $2,000. So our tax cut is 
very family friendly and very positive.
  I want to mention some of the reforms that we make on EITC because 
they are long overdue, and they are part of our overall budget plan. We 
do have a budget. We have a budget that is balanced. President 
Clinton's budget is not balanced. We had a vote on it, thanks to my 
colleague from Pennsylvania. His budget is not balanced. We use the 
Congressional Budget Office for estimating purposes. He said he was 
going to use the Congressional Budget Office, and they say at the end 
of 7 years his budget has a deficit of $210 billion. At the 7 years, 
our budget has a $13 billion surplus.
  We will have a balanced budget. President Clinton does not have one, 
certainly not by using the Congressional Budget Office. My colleagues 
on the Democrat side do not have one. They disowned the President's 
budget. They do not have their own budget. It is nonexistent.
  Mr. SANTORUM. Will the Senator from Oklahoma yield for a question 

[[Page S15680]]

just so I understand the point he just made? It is an interesting 
point. I am not too sure I was fully aware of it. What the Senator is 
suggesting is that the earned income tax credit for low-income 
Americans actually pays out money in excess of all their Federal tax 
obligations. Is that correct?
  Mr. NICKLES. That is correct.
  Mr. SANTORUM. The new definition of what is a tax increase is when 
the Federal Government does not pay out more money to you, and you 
already do not pay, that is a tax increase. So if you are entitled to 
get more welfare--let us call it what it is. It is a welfare check. It 
is a check not to offset taxes, but it is a cash payment to families or 
to individuals. If you were expected to get more money, then by not 
giving them more money, we are giving them a tax increase even though 
they do not pay taxes.
  Mr. NICKLES. The Senator is exactly right.
  Mr. SANTORUM. That is an amazing statement. How can anyone call not 
getting more money from the Federal Government when you pay no taxes a 
tax increase?
  Mr. NICKLES. I appreciate the statement.
  Mr. SANTORUM. I would love the Senator from New Jersey--I know he is 
a Rhodes scholar--but redefine for me, please, how someone who does not 
pay taxes----
  Mr. NICKLES. I say to my colleague that I have the floor.
  Mr. SANTORUM. On his time, I would love to have him answer that 
question.
  Mr. NICKLES. I only have 6 minutes. I have several points that I want 
to make. The point being when someone says they are offsetting FICA, 
the amount not only offsets FICA, but 200 percent, actually 235 percent 
of FICA, and that includes employer and employee. The employees 
actually only pay half of that amount. In reality, it is about four and 
a half times what an employee pays on FICA.
  The cost of this program is exploding--my colleague from New Jersey 
said he knows the Senator is going to stand up and show how this 
program has exploded. I grinned at him because I am. This program cost 
less than $2 billion in 1985; in 1986, less than $2 billion. Today the 
program costs $23 billion. That is 11 times what it cost in 1986.
  This is an entitlement program. What is the definition of an 
``entitlement'' program? It is when you pass a law under which, if you 
met certain criteria, you are going to get a check. That is what the 
EITC is. It is a cash payment program--$23 billion in payments.
  Actually, I will give the exact figure. In 1995, the figure is $23.7 
billion, over $20 billion of it is a cash outlay with Uncle Sam writing 
checks--not reducing somebody's cash income taxes and/or payroll taxes 
on a monthly basis. It is Uncle Sam, in 99 percent of the cases, 
writing a check once a year, a cash outlay program that I mentioned 
before which exceeds Aid for Families with Dependent Children. AFDC is 
paid out in a monthly basis to help low-income families. This is a 
lump-sum payment that is paid out at the end of the year at a cost of 
$20 billion.
  This program was lauded by President Reagan and others when it was a 
$2 billion program and when the maximum benefits were $435. The maximum 
benefit in 1985 was $550. By 1990, it had increased to $953. It was 
actually $1,500 in 1992, and President Clinton doubled it again. It 
went up to $3,110.
  So we are talking about a program, if you have two or more children, 
where your maximum benefit went from $500 to over $3,000.
  Some people said these Republicans have just slashed this program, 
and people are going to receive less. I saw a program on CBS tonight, 
they interviewed a woman who had a couple of kids. She had a couple of 
jobs. I compliment her. They made her think that she was going to get 
less money than she got this year. The facts are, if she is getting 
$3,110 this year, next year she gets over $3,200, and the next year she 
gets over $3,300. Under our proposal the benefit rises from $3,110 to 
$3,888, an increase of over $700 in the next 7 years.
  So we did not freeze this program. We did not cut it. We do say some 
people should not be eligible because we found hundreds of thousands of 
people that make over $30,000 a year who are qualifying for it. They 
should not be. We found out that illegal aliens are receiving benefits, 
and they should not. So we eliminate them.
  Frankly, we agree with Senator Russell Long that we should drop the 
benefit for individuals without children. This program was always 
formulated with the idea of helping individuals and families with 
children.
  We are reforming the system. We are trying to target the assistance 
to those people who really need it. But then we allow the system to 
grow. That is my point. It really is bothersome to have individuals 
stand up and say, you are increasing somebody's taxes when I know what 
the facts are. I will read the figures. If you have two or more 
children, the maximum benefit today is $3,110. The maximum benefit next 
year is $3,208. The maximum benefit the next year is $3,312. And, 
again, it increases over $100 per year to the maximum benefit. In the 
year 2002, it is $3,888, a significant increase every single year. It 
grows with inflation.
  So how can people say, ``Well, you are increasing taxes''? It does 
not make sense.
  The PRESIDING OFFICER (Mr. Santorum). The Senator's time has expired.
  Mr. NICKLES. Has all time expired on our side on this amendment?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. NICKLES. I will wait until my colleague from New Jersey 
concludes. At that point in time, I will send an amendment to the desk.
  The PRESIDING OFFICER. The Senator from New Jersey has 5 minutes, 20 
seconds remaining.
  Mr. BRADLEY. Mr. President, the assertions by the other side that the 
child credit is more generous than the earned income tax credit for 
families with children at all income levels bewilders me. I have four 
kids. I make $15,000 a year. I have a very tiny income tax liability, 
very tiny. The child credit is not refundable. I get no benefit at all 
from the child credit--zero. I lose about $3,500 in benefits with the 
loss in the EITC at $28,000.
  The Senator picks the absolute perfect number. Why? Because the 
earned income tax credit loses its value the higher the income level. 
So when it gets to $28,000, it is not worth anything. At that point, 
clearly the child credit is more valuable. That is not policy. That is 
mathematics.
  Then the issue of--well, the chart that the Senator had with the 
growth of the EITC, it grows because we are giving them bigger tax 
cuts. That is why it grows. So you put that chart up, and you see the 
bars go higher and higher. That means a bigger tax cut for families 
earning under $28,000 a year. If you do not want a tax cut, then you 
want to support the program that would curtail this. Deny the third 
year of the tax cut. That is what you are saying essentially.
  Basically, the tax cut for working families was put in in 1993. It 
was phased in over 3 years and the other side is saying do not give the 
third year.
  That is why it grows. Once you get to the next year, it is flat 
because the tax cuts will have been provided. There will be no more tax 
cut in the fourth year. It is not some kind of conspiracy. It is 
mathematics. You give a bigger tax cut, you lose more revenue. We chose 
to give a big tax cut to offset Social Security, to offset income taxes 
for working families. And you know what. There are a lot of provisions 
in the Tax Code that say you get a credit against income. They are 
largely corporate. The other side is not calling that welfare. That is 
not welfare. But somehow when it offsets the income of a working family 
with kids, that is welfare.
  Mr. President, it is beyond me; 78 percent of the earned income tax 
credit goes to offset Social Security and income tax. The other portion 
is a refundable credit to those families making $13,000, $14,000 a year 
who otherwise would not get anything.
  The distinguished Senator from Pennsylvania is correct. If you want 
to give those families something because they are working, but they do 
not pay any income tax and they are at a low enough income, they do not 
pay enough Social Security tax, you have to make it refundable and then 
you have to appropriate the money.

[[Page S15681]]

  That is what we do here. And this vast amount of money that is 
appropriated, as the distinguished Senator from Oklahoma says, is 
appropriated because there is not a way to offset the Social Security 
taxes. It is pretty simple. It is not complicated. And it boils down to 
whether you want to give a break to families with children or whether 
you do not.
  There is the big deal about families that do not have children. We do 
not want to give them anything. If you are making $16,000, $17,000 a 
year, you do not have any kids, somehow or another you do not get 
anything here. Forget it. You are not worth it. You are struggling. You 
are working hard. But somehow you do not qualify for this. In fact, we 
do not care about it. We do not care what your Social Security taxes 
are. Somehow you are a nonentity.
  We do not think that. We think that if you earn under $28,000 a year, 
you ought to get a break, particularly in a bill that gives $1.7 
billion in relief for estate taxes.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Senator from Oklahoma.


                           Amendment No. 2958

  Mr. NICKLES. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Oklahoma [Mr. Nickles], for himself and 
     Mr. Brown, proposes an amendment numbered 2958 to the 
     instructions of the Bradley motion to commit S. 1357 to 
     Finance Committee:
       Strike all after ``Finance'' and insert:
       ``With instructions to report the bill back to the Senate 
     forthwith including a provision stating:
       ``The maximum earned income credit for a family with one 
     child will increase from $2,094 in 1995 to $2,156 in 1996 and 
     the maximum earned income credit for a family with two or 
     more children will increase from $3,110 in 1995 to $3,208 in 
     1996.'';
       ``And the effective date for section 7461, `Earned income 
     credit denied to individuals not authorized to be employed in 
     the US', shall be moved to taxable years beginning after 
     December 31, 1994.''

  The PRESIDING OFFICER. Who yields time?
  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, this is an amendment offered by myself 
and Senator Brown that tried to clarify a couple things.
  One, we want to state very clearly exactly what we did in the bill 
and that is an increase in the earned income credit for individuals 
with one child from $2,094 in 1995--that is present law--to $2,156 in 
1996.
  That is an increase of about--whatever the difference is--$60 some-
odd, and an income credit for a family of 2 from $3,110, to $3,208. 
That is an increase of about $100--$98. So we make that very clear.
  The second part of that is we say we want to deny benefits to illegal 
aliens and make the effective date December 31, 1994. Some people are 
shocked to find out that they were eligible. I was surprised. But I 
looked at a GAO report, and it said:

       Illegal alien receipts. IRS expects more than 160,000 
     illegal aliens received the EIC in 1994.

  We ought to stop that. Right now it is legal.
  It says:

       The Internal Revenue Code does not prohibit illegal aliens 
     from receiving EIC if they meet prescribed eligibility 
     requirements.

  Well, they should be, and so let us make that illegal. If they are 
here illegally, why in the world should we be giving them a check, 
especially a check if you are talking about to the tune of $3,000. So 
let us tighten that up. That is a loophole that needs to be tightened. 
We need to tighten up loopholes.
  Senator Roth mentioned several. I compliment Senator Roth because he 
has shown great courage and leadership in trying to tackle the fastest 
growing entitlement program in Government. No other program is growing 
as rapidly, as fast as the so-called EIC. No other program costs over 
10 times as much as it did 10 years ago and continues to explode. So it 
needs to be reformed. And no other program that I know of has error 
rates and fraud rates at such astronomical levels as the EIC.
  This is a GAO report that is dated March 1995: ``Earned Income Credit 
Targeting to the Working Poor.''
  Well, we should target. I just read from a couple of their 
highlights. It says the IRS did a study in 1994 on electronic returns 
only. They said 29 percent of the returns received too much EIC, and 13 
percent were judged to have received intentional errors. In other 
words, that is fraud. It also mentioned, it says that the most recent 
taxpayer compliance measured showed that about 42 percent of EIC 
recipients received too large a credit and about 32 percent were not 
able to show that they were entitled to any credit. One out of three in 
the comprehensive study were not able to show they were entitled to any 
credit. And that is about 34 percent of the total EIC.
  What other program has a 34 percent failure rate, or 30 some-odd-
percent error rate? This program does. And part of it is because the 
cost has just exploded. You have a program that grows at 10 times the 
rate it was just a few years ago, and you have a program where the 
maximum benefit is six times what it was 10 years ago, you realize you 
have a program that is rife with fraud and needs to be reformed. It has 
not been yet. The IRS is trying to tighten down around the edges, but 
they have not been totally successful. They may have reduced it 
somewhat, and I compliment them, but they have a long way to go if you 
have an error rate of 30, 40 percent. And so we need to make some 
changes. Senator Roth has made many of those changes.
  We say that we must count almost all income. We find hundred of 
thousands of people who receive benefits that make a lot more than the 
income eligibility called for, people making a lot more than $30,000, 
some making more than $50,000. They have interest income that is tax 
free. It does not count toward their income eligibility and therefore 
they can continue receiving EIC benefits.
  Mr. President, we need to make some reforms and we need to make clear 
that we want to target these benefits to those people who are truly 
needy. That is the kind of reforms that we are making today.

  I want to answer my colleague from New Jersey. He said, what about 
the--maybe I could get his attention. My friend from New Jersey asked 
about a couple that made $15,000. Well, in 1995, they received an EIC 
of $2,360. In 1996, under our reform proposal, they are going to have 
an EIC of $2,488. That is a $128 increase.
  Now, my colleague from New Jersey would like that increase to be 
$400, but we have it increased by $128. They have an increase. And, 
again, they did not pay any income taxes. They are getting a return in 
excess, or at least 100 percent of all their FICA taxes, including what 
their employer paid, and we are giving them $100 more than they had 
last year. That is not a tax increase.
  My colleague from Pennsylvania said, ``Well, how in the world can you 
call something a tax increase if you are giving somebody $3,000, and 
next year you are going to give them $3,200? How can you call that a 
tax increase?''
  Well, let us just take, for example, that you have a rich uncle. The 
rich uncle wants to encourage certain behavior, saying if you work a 
little bit, he is going to give you a bonus. If you work about $10,000 
or $12,000 worth, he is going to give you a $3,000 bonus because he 
wants you to work. Is that not nice?
  The uncle says, ``I'm going to give you $3,000. Next year I am 
planning to give you $3,500.'' But your uncle's board of directors said 
you cannot afford that, you are breaking the bank. So instead, they 
gave you $3,000 next year--actually $3,100 next year instead of giving 
you $3,500. ``We cannot afford it. Let's give him $3,200. Let's keep it 
to a more moderate growth. Give him an increase, $100, but not $400 or 
$500. Don't do that; the program is growing too fast. But it is a 
bonus.''
  It does not have anything to do with taxes. This is far in excess of 
any tax liability, either FICA or income tax. That recipient said, 
``You increased my tax base. I hoped I was going to get more money.'' I 
do not think so.
  This body is going to show, I believe, that we have the courage to 
curtail the growth of Medicare, which is a very popular entitlement 
program. And we are going to have that program grow about 7 percent per 
year. We have a program here that continues to grow. The total growth 
in the EIC program is 

[[Page S15682]]

going to grow about 10 percent over the next few years. The out-of-
pocket costs in fiscal year 1995 are about $20 billion. It will be 
about $23 billion in the year 2002. That is an increase of 15 percent 
in 7 years.
  That is an increase in outlays, so the program grows. It does not 
grow as fast as some people would like. President Clinton and others 
would like it to grow up to $30 billion. Well, frankly, we cannot 
afford that. We can never balance the budget if we do not have the 
courage to at least control the growth of entitlement programs. And 
this is the fastest, most fraudulent entitlement program in Government.
  We need to curtail its growth. That is what we are trying to do. We 
allow the EIC benefits to go up for individuals with two or more 
children. They do not grow as fast as some people would like. President 
Clinton and others would like it to grow faster. We cannot afford it. 
So we allow the benefit to go up by over $100 a year.
  For individuals who have one child, we make no change. Individuals 
that have one child get the exact same benefit as they get under 
present law, under our proposal or President Clinton's proposal. We did 
not make a change. We did eliminate the benefits for individuals 
without children.
  And I think about that. I have kids that could qualify. Other people 
do. We are expanding eligibility by several million people. How much 
money are we talking about? We are talking about $308, I think, this 
year, giving that benefit to lots of people. And you say, ``Why do you 
care about that? That is a small amount of money.''
  Well, look at what this program cost a few years ago. The maximum 
payment on families with two or more children was $500 in 1985. Today, 
10 years later, it is $3,000. What is the benefit going to be for that 
individual that happens to be $300 or $400 today? Ten years from now 
maybe it is $3,000. We will have a program again that continues to 
escalate.
  This program, Russell Long mentioned it. I have an article in which 
he states this program should not have been expanded. Russell Long was 
one of the fathers of this program. He said it should not have been 
expanded for individuals without children.
  I might mention in the 1993 tax bill, there was no Republican that 
voted for it, and when it passed the Senate it did not have a benefit 
for individuals without children. That was added on in the House. And, 
unfortunately, the Senate concurred with the House in conference. But 
it was not in the bill that passed in the Finance Committee in the 
Senate nor in the bill that passed on the floor of the Senate. It was 
added in conference. That was a mistake. It was a massive expansion of 
entitlement, added entitlement to several million people.
  So we changed that. We eliminate illegal aliens. And we say we should 
count almost all income. You should count tax-exempt interest as far as 
determining who is eligible for this program. You should count other 
income in determining who is eligible. We allow eligibility, and the 
amount of income to determine eligibility, to increase.
  Right now you qualify for this program if you have income up to 
$26,673. Some people say, ``You really cut that back.'' No. The facts 
are, under our proposal, by the year 2002 you can have income up to 
$29,200 and qualify.
  Now, that does not grow quite as fast as President Clinton would like 
for it to. He allows people to receive the benefit if they have income 
equal to $34,600. Let us think about that. Are we going to have Uncle 
Sam writing checks--remember, 85 percent of this program is Uncle Sam 
writing a check, not reducing anybody's taxes, but writing checks--for 
families that have incomes less than $34,000. You are going to be 
talking about a majority of American families. And old Uncle Sam is 
going to be paying people. So we use this income for a massive income 
redistribution program.
  Contrast that to what we are trying to do on the Republican side. We 
are saying, ``No. We are going to give a tax cut for families, a tax 
cut for people who pay taxes,'' not just come up with schemes to have a 
negative income tax and have Uncle Sam write big checks at the end of 
the year. No. We are going to try to reduce all families paying taxes, 
reduce their taxes so they can take the tax reduction on a monthly 
basis and keep more of their own money. That is what we are talking 
about doing. That is what is fair.
  Then my colleague from New Jersey, or one of my colleagues, was 
denigrating the fact that we made some changes on the inheritance tax, 
said how terrible that was. Maybe they should come into my State and 
talk to some of the members of the Oklahoma Farm Bureau or Farmers 
Union or some of the wheat growers, because you have a situation where 
inflation has built up the value of some of these farms and ranches, 
estates, machine shops, whatever, to say they are worth something.
  Uncle Sam comes in and says, ``We want to--'' Somebody dies. They 
want to pass the property on to their family, and Uncle Sam says, 
``Well, we want 18 percent of it or we want 55 percent of it.'' That 
makes it very difficult to pass on to succeeding generations.
  So what did we do? Well, we said for a family estate, let us increase 
right now the exemption from $600,000 and increase that over 6 years to 
$750,000. We increased that amount $25,000 per year. And then we also 
say if it is a family-held business, we want to encourage that. We 
happen to be profamily, and we happen to be probusiness. We want to 
encourage family-owned corporations, whether it is a janitor service or 
whether it is a car dealership or whether it is an insurance company. 
We want to encourage family ownership, whether it is a farm or a ranch 
or a dairy operation. We want to encourage that.
  We say, if they are going to pass the property on to their own heirs, 
they should be able to have a better deal. So we raise that estate 
exemption up to $1.5 million. And we cut the rate down for those 
between $1.5 million and $5 million so they can keep it in the family 
and not have to sell it, not have to sell a family business just to pay 
an inheritance tax. I think that is a fair and a good idea.
  I think that is profamily and that is going to encourage growth and 
encourage a father, instead of saying, ``Well, I might as well spend 
the money because I cannot pass it on. I do not want to give it to 
Uncle Sam,'' we want to encourage people to build up businesses, to 
expand, to hire more people, to create more jobs, and give that to 
their children, and let their children build it up and be second, 
third, fourth, fifth generations in some of these family-owned 
operations or businesses.
  Now, we limit it really to the lower size family operations. We did 
not help the people that have the very largest estates. But I think we 
were very family friendly. And I think this entire tax bill is very 
family friendly. And again I want to compliment the chairman for 
crafting, I think, a very good, targeted approach, one that has 70-
some-odd percent--three-fourths of this package is very family 
friendly. If you look at the tax credits for children, you look at the 
gradual reductions in the marriage penalty, you look at the estate tax 
exemptions that we make for family-owned farms and ranches and 
businesses, this is a very family friendly tax bill, probably the most 
profamily bill that Congress has ever seen.
  I would encourage my colleagues to support it and to reject those who 
say we should not make any reduction whatsoever in the growth of EIC, 
which is the fastest growing, most fraudulent program that we have in 
Government today.
  Mr. President, I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. NICKLES. Mr. President, I suggest the absence of a quorum, and I 
ask unanimous consent that the time be equally charged.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. NICKLES. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                      unanimous-consent agreement

  Mr. NICKLES. Mr. President, I ask unanimous consent that when the 
Senate resumes consideration of the reconciliation bill tomorrow, that 
the Democrats have 5 hours remaining on the bill and the Republicans 
have 3 hours and 15 minutes remaining.

[[Page S15683]]

  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________