[Congressional Record Volume 141, Number 180 (Tuesday, November 14, 1995)]
[House]
[Pages H12313-H12314]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           THE BUDGET BATTLE

  (Mr. BARTON of Texas asked and was given permission to address the 
House for 1 minute and to revise and extend his remarks and include 
extraneous material.)
  Mr. BARTON of Texas. Madam Speaker, last September the Republicans 
sent a continuing resolution to the President so that the Government 
would not shut down on October 1. We put in that continuing resolution 
enough time and money so that we could operate through all of October 
and part of November.
  What did the President do? He ordered in travel brochures to see 
about his pending trip to Japan this week. When we asked him last week 
what he was going to do, he went out on the golf course last Friday.
  We think there is a fundamental policy difference between ourselves 
and the President. We think that we need to protect our children's 
future. We need to come up with a plan that balances the budget in the 
year 2002 without any tax increases.
  The President thinks it is a little bit better to work on his putting 
stroke out on the south lawn of the White House. We are not going to 
vote for a debt ceiling that does not have fundamental change in it.
  We believe, as the last Democratic CBO director does, that the 
President is defending the low ground when he talks about Medicare 
premiums.
  Let us make a few things perfectly clear. Medicare part B is 
optional. If the senior citizens do not want to pay the premium, they 
do not have to.
  Madam Speaker, I submit for the Record the following article from the 
Wall Street Journal about the Medicare part B premium:

             [From the Wall Street Journal, Nov. 14, 1995]

  Medicare Premiums Are Taking Center Stage In Budget Battle Between 
                          Clinton, Republicans

                 (By Hilary Stout and Laurie McGinley)

       Washington.--Laura Tyson, one of President Clinton's top 
     economic advisers, went on national television this weekend 
     to declare a ``defining difference'' between the White House 
     and Republicans in the escalating budget debate: the issue of 
     Medicare premiums.
       And last night, President Clinton vetoed legislation to 
     keep the government from temporarily closing down today 
     largely because of an $11 difference in monthly Medicare 
     premiums.
       The irony is that the GOP Medicare measure, which would 
     raise the monthly premiums a few dollars to $53.50 instead of 
     lowering them on Jan. 1 as current law prescribes, is 
     something that the administration could probably support in 
     another context.
       ``I think, in a sense, the president is defending the low 
     ground on this'' says Robert Reischauer, former director of 
     the Congressional Budget Office, now an economist at the 
     Brookings Institution.


                              best weapon

       Mr. Clinton objected to the stopgap spending bill for a 
     number of reasons--including, he said, because its deep, 
     across-the-board cuts would hurt education and environmental 
     protection programs. But the White 

[[Page H 12314]]
     House chose to make Medicare premiums the focus of its public attacks. 
     The president's advisers believe Medicare is their best 
     weapon in the budget fight, and they have sought to turn the 
     entire budget debate into a battle over the federal health 
     program for senior citizens. Public opinion polls suggest 
     this strategy is working.
       Yet the Medicare premium increase itself isn't a do-or-die 
     issue for many elderly and consumer groups, not even for the 
     powerful American Association of Retired Persons. ``What we 
     have said is that we recognize that seniors need to be part 
     of the solution,'' says John Rother, legislative director for 
     the group, which has 33 million members. ``And that sacrifice 
     is better borne by premium increases'' rather than through 
     higher deductibles and copayments, which affect the sickest 
     beneficiaries the most.
       Here's what the premium battle is all about: Five years 
     ago, the last time the federal government shut down because 
     Congress and a president were squabbling over the budget, the 
     eventual legislative deal wrote into law the dollar-amount of 
     Medicare premiums for the ensuing five years. The idea was to 
     set the amount elderly beneficiaries would pay at 25% of the 
     total program cost, with general tax revenues subsidizing the 
     rest. (When Medicare was first enacted 30 years ago, the 
     elderly were expected to pay 50% of the premiums.)
       But because the program costs didn't rise as much as 
     lawmakers anticipated, the 1995 charge, $46.10 a month, 
     actually amounted to 31.5% of the premium costs. That was to 
     be rectified Jan. 1, 1996, when the law prescribed that 
     premiums would be set at 25% of costs, no matter what the 
     dollar amount was. That means they were scheduled to actually 
     drop, to $42.50 a month.
       But Republicans want to save the Treasury money--and, 
     Democrats charge, pay for their proposed tax cuts--by keeping 
     the premiums at 31.5% of costs, which would amount to $53.50 
     a month. Administration officials accuse Republicans of 
     trying to balance the budget on the backs of the elderly and 
     trying to sneak their budget priorities past the president by 
     attaching them to the temporary spending measure. Republicans 
     contend that it would be irresponsible to lower premiums.


                       a responsible thing to do

       The decision to set premiums at 25% of costs, despite the 
     dollar amount, was part of President Clinton's 1993 deficit 
     reduction package, which passed Congress without a single 
     Republican vote. A number of Democrats involved in those 
     negotiations say that they didn't expect premiums to actually 
     decrease because of it. In fact, many privately believe that 
     keeping premiums at lest at current levels is the responsible 
     thing to do.
       Mr. Reishauer said, ``31.5% as part of a fundamental 
     structural change in Medicare is entirely appropriate, 
     especially when combined with a surcharge on upper-income 
     beneficiaries,'' as called for in the GOP plan. ``Medicare is 
     a very expensive program. And it's going to have to be one 
     that's supported not just by the general taxpayer and those 
     paying payroll taxes, but also by the beneficiaries.''
       An idea put forth by some Senate Republicans to freeze 
     premiums at $46.10 in the stopgap spending measure 
     stumbled yesterday afternoon, but some lawmakers were 
     hoping to make it the basis of a future compromise. An 
     administration official involved in the budget 
     deliberations privately concedes that keeping Medicare 
     premiums at the current level ``wouldn't be the worst 
     thing in the world'' in the context of an overall 
     balanced-budget package. But, the official adds, accepting 
     any Medicare compromise with the GOP would be politically 
     tough.
       The other objection is a procedural one--but it, too, is 
     laden with politics. Instead of saving the Medicare premium 
     increase for the giant balanced-budget package, Republicans 
     attached it to the temporary spending measure, designed 
     simply to keep the government running while the White House 
     and Republican congressional leadership negotiate a balance-
     budget deal. President Clinton calls this ``blackmail.''


                          a strong motivation

       But the GOP has a strong motivation for pushing the issue 
     now. Most elderly people might not notice the proposed 
     increase if it is enacted soon.
       That's because Medicare premiums are deducted from 
     beneficiaries' monthly Social Security checks, and Social 
     Security recipients are scheduled to get a 2.6% cost-of-
     living increase as of Jan. 1. That means the average Social 
     Security check will rise to $720 from $702, according to the 
     government. If Medicare premiums grow to $53.50 on Jan. 1, 
     recipients' checks will still be higher after the monthly 
     Medicare deduction--$666.50 on average, compared with $655.90 
     today.
       But if Republicans wait to negotiate higher Medicare 
     premiums in a budget deal, Medicare premiums will fall on 
     Jan. 1 as scheduled, then spike up. And the GOP would most 
     likely take the public blame at the worst possible time--the 
     beginning of a presidential election year.
       The timetable for the GOP becomes even more urgent because 
     the Social Security Administration needs to know the premium 
     by tomorrow in order to make the changes for the monthly 
     checks that go out Jan. 3, according to an agency spokesman. 
     He said the agency's computer experts are trying to figure 
     out a way to move the deadline back a few days.
       The AARP's Mr. Rother insists that higher premiums should 
     be considered only as part of a comprehensive Medicare-
     overhaul package, not as an add-on to the stopgap spending 
     bill. ``The issue of premiums is part of the larger questions 
     surrounding the shape and size of Medicare,'' Mr. Rother 
     says.
       Both he and other advocates of the elderly are concerned 
     about the premium increase in the context of the entire GOP 
     health program. ``When it comes to 31.5%, assuming it's in 
     the Medicare budget bill,'' and not in the stopgap spending 
     bill, ``we can live with it, provided there are protections 
     for low-income people,'' says Gail Shearer, director of 
     health-policy analysis for the Washington office of Consumers 
     Union, which publishes Consumer Reports magazine.
       Currently, the poorest beneficiaries receive Medicaid 
     subsidies to help pay for Medicare premiums, copayments and 
     deductibles. Under GOP plans to revise Medicaid, the health 
     program for the poor would be turned over to the states in 
     the form of block grants. The legislation would require 
     states to spend a certain percentage of their funds on the 
     poor elderly, but, with premiums rising, advocates are 
     worried the aid won't cover everyone who needs it.

                         STILL COMING OUT AHEAD                         
------------------------------------------------------------------------
                                                         1996           
                                                1995   current  1996 GOP
                                                         law    proposal
------------------------------------------------------------------------
Average monthly Social Security payment.....     $702     $720      $720
Monthly medicare premium deduction..........    46.10    42.50     53.50
Actual monthly Social Security check........   655.90   677.50    666.50
------------------------------------------------------------------------

                                                                

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