[Congressional Record Volume 141, Number 180 (Tuesday, November 14, 1995)]
[House]
[Pages H12341-H12348]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             IT IS TIME WE GET OUR FINANCIAL HOUSE IN ORDER

  The SPEAKER pro tempore. (Mr. Taylor of North Carolina). Under the 
Speaker's announced policy of May 12, 1995, the gentleman from 
Connecticut [Mr. Shays] is recognized for 60 minutes.
  Mr. SHAYS. Mr. Speaker, I know the time is getting late. You have 
been very gracious for being here for a long time, and I hope I can 
return the favor to the gentleman.
  Mr. Speaker, I have been in elective office for 21 years, 13 years in 
the State House in Connecticut, and now 8 years in Congress. When I was 
in the State House, I was always amazed that Congress could spend more 
money than it raised in revenues and deficit spend. I knew you did that 
when times were difficult and in times of war, but I could never 
understand how we could do that in times of peace. For the first 
basically 180 years of our history, our national debt was only $375 
billion; in 1975, $375 billion. That funded the Spanish-American War, 
World War I, World War II, the Korean war, the Vietnam war, these real 
crises in our country.
  After the Vietnam war, our deficit was $375 billion. Since 1975, our 
deficits have grown to 4,900 billion. That is a thirteen-fold increase 
in our national debt, when times were good.
  I vowed that when I came to Congress, I would be on that part of the 
equation that would look to get our financial house in order. This is 
our moment. Our moment is right now, to get our financial house in 
order, balance our budget. That is the first effort. The second effort 
is to save our trust funds, particularly Medicare, which is going 
insolvent next year, and becomes bankrupt in 7 short years. The 
Medicare fund that goes bankrupt funds all of hospital costs.
  Our third effort is to transform our social and corporate welfare 
state into an opportunity society. That is a conservative word. It is a 
very important word. We are trying to give opportunity to people. 
Instead of being a caretaking government, we are looking to be a caring 
government. Instead of people giving them the food, we are looking to 
help them grow the seeds, and be able to self-sufficient.
  I look at our society and I see too many 12-year-olds having babies, 
I see 14-year-olds selling drugs, I see 15-year-olds killing each 
other, I see 18-year-olds who cannot read their diplomas, I see 24-
year-olds who have never had a job, not because jobs do not exist, but 
because they simply do not feel those jobs are for them, or maybe do 
not have the qualifications or feel they do not have the 
qualifications. I see 30-year grandparents.

[[Page H 12342]]

  In my political career, I have seen now three generations of welfare 
recipients. That has to end. We have an opportunity to end it in the 
next 2 years.
  I am joined by my colleague, the gentleman from Michigan, and I am 
really grateful that he is here. Before yielding to him, I would just 
like to enter into this whole debate of whether what we are doing is 
cutting spending, slowing the growth in spending, or simply not coming 
to grips at all with spending.
  During the last 7 years, we spent about $9 trillion. In the next 7 
years, we expect to spend $12 trillion; in other words, $3 trillion 
more in the next 7 years, a significant sum. What we are trying not to 
do is spend over $13 trillion. We are looking to not have the debt go 
up $2 trillion more. In this 7-year budget plan that we have, it still 
would go up $1 trillion. That is embarrassing in one way, but it 
certainly should give an indication that we are not being radical. We 
are spending more, the national debt goes up $1 trillion, but it will 
not go up $2 trillion if we have our way.
  In the seventh year, we have slowed the growth of spending to the 
point where it intersects with revenue, and in the seventh year, we 
will have had a balanced budget.
  What we are asking the President of the United States to do is join 
in that effort to balance the budget in 7 years. Obviously, we would 
like him to agree to our balanced budget of 7 years, but we are not 
requiring that to happen. He has his priorities, I am sure, and we have 
ours. We would have to sort that out. But the one thing we should be 
able to agree on on a common basis is getting our budget balanced in 7 
years.
  To that end, that is what we are during. We are working to do that. 
It makes it a lot easier if the President weighs in and helps us in 
that effort, but if he does not, we are still going to keep on in this 
effort. Someone said to me, and then I will yield to my colleague, just 
about polls they said, ``The President seems to be catching the 
imagination of the American people, that they have more faith in him 
right now than Congress. You are not looking too good in Congress with 
the polls.''

  I thought, ``I don't know entirely how valid those polls are, but the 
one thing I know is that if President Lincoln had taken a poll during 
the height of his effort to keep our Union together, and he had decided 
based on the polls, he would have simply ended the war and not 
confronted the South.'' We would not be one nation under God, 
indivisible, we would have been, if President Lincoln had listened to 
polls and reacted to them, two nations, a North and a South.
  For me, this is as epic a struggle. I feel for our Federal employees 
who are kind of caught in the middle of this. Ultimately we know we are 
going to downsize Government and they will be affected. I feel for them 
not knowing if they should come to work tomorrow. But it is much bigger 
than our Federal employees. It is not a matter of getting our Federal 
employees back to work, it is a matter to getting an agreement with the 
White House that gets us on a glide path to a balanced budget.
  With that, Mr. Speaker, I yield to the gentleman from Michigan [Mr. 
Hoekstra], and thank my colleague for participating in this special 
order.
  Mr. HOEKSTRA. I thank my colleague, the gentleman from Connecticut, 
for yielding to me.
  Mr. Speaker, my colleague and I have been working with many of our 
friends in the House in developing a new process on how we work on the 
Republican side of the aisle, a process of participative involvement. 
It is one of the reasons that we as a group have really been able to 
get behind a unified vision.
  The first step in our process as colleagues, as we work together, is 
to listen. We have developed a process for listening to each other, but 
more importantly, we have developed a process for listening to the 
American people. We did it a year and a half ago, as we went through 
the campaign process in 1994. We spend a lot of time listening to the 
American people, having them tell us what was important. They said, 
``We want an agenda in Washington that will reform Washington, that 
changes the way Washington does business.''
  We continued to hear people, in 1994, very anxious and concerned 
about where we were going with the deficit, with the budget, very 
concerned about the debt we were piling on our children. So I think we 
spent a lot of time listening to each other, but more importantly, 
listening to the American people and trying to understand their 
problems.
  After we won the elections in 1994, we spent a lot of time trying to 
learn and understand the problem. We recognized, I think as you just 
pointed out, that to get to a balanced budget, we did not have to cut 
spending. We could grow spending, we just could not grow it as fast as 
what maybe Congress would like to have grown it; that if all we did was 
grow spending but grow it a little slower than what we had anticipated, 
we would get to a balanced budget.
  We also learned that as we looked out into the year 2010 and a little 
beyond that, if we did not reform entitlement spending in, what is it, 
the year 2013, 100 percent of the revenues that the Government would 
collect would be used to pay for entitlement spending and interest on 
the debt, and there would not be any money left for anything else.
  As we looked even closer, we looked out and we learned that 7 years 
out, the Medicare part A trust fund would be broke, so we learned a lot 
of things about the budget. For the last number of months, we have been 
trying to help, help people understand, help our colleagues here in 
Washington understand what the implications were of the information 
that we have gathered, help the American people understand that if we 
continue down this irresponsible and reckless path of increased 
spending, increased spending beyond our limits, we are going to be 
facing some serious problems: children born today, in 1995, and over 
their lifetime, paying $182,000 in taxes, not for anything that is 
going to benefit them, but for things that are benefiting us today. 
That $182,000 is only going to cover the interest on the debt, their 
share of the interest on the debt, and that is for kids born today.

  Mr. SHAYS. Not to pay back the debt, but just to pay the interest on 
the national debt.
  Mr. HOEKSTRA. That is correct. They would pay an effective tax rate 
of around 82 percent over their lifetime if we did nothing, so we have 
listened to the American people, we have learned, and we have 
understood the problems. We are helping people understand the problems, 
and hopefully engaging them in the process to develop appropriate 
solutions, because the next thing is if we have listened, we have 
learned, and we have helped, the responsibility now comes, and this is 
what we are doing this week, we are leading.
  Earlier this year we led with the Contract With America. We told 
people what we were going to do, then we went out and did it. All year 
we have been doing what we said we were going to do in 1994. We said we 
were going to get on a path to a balanced budget. We are leading. That 
is our vision, to get to a balanced budget, but more importantly, the 
benefits--and we talked about shared sacrifice for getting to a 
balanced budget.
  Last week we had a policy committee hearing where we had outside 
experts come in and talk to us about the benefits of balancing the 
budget. They said, ``We do not know where you are talking about shared 
sacrifice. Number one, Federal spending is still going up. It is going 
to go up from $1.5 trillion in 1995 to $1.8 trillion, a 27-percent 
increase in Federal spending. There is plenty of money to address the 
needs that this country is facing.''
  They said, ``You should not be talking about shared sacrifice. You 
ought to be talking about shared benefits of balancing the budget.'' 
The vision is the shared benefits of lower interest rates, of an 
economy that is stronger because we are going to be more able to 
compete internationally, we are going to be better equipped to create 
new jobs, better-paying jobs. This impacts the kids that are going out 
and getting a student loan, they are going to pay less in interest 
rates. It affects the homeowners because they are going to be paying 
lower interest rates.
  Greenspan came, and my colleague, the gentleman from Connecticut, and 
I are both on the Committee on the Budget. Alan Greenspan has come in 
and said we will face lower interest 

[[Page H 12343]]
rates if we demonstrate to the financial markets that we are serious 
about balancing the budget. That is what it is about this week.
  We have this vision where we are going. We would like to do it with 
our colleagues on the other side of the aisle. We would like to do it 
with the President, but they have to share our vision of getting to a 
balanced budget and getting there within 7 years. We have our 
strategies for doing that. We are going to not cut spending, we are 
going to slow the growth of Federal spending. We are going to allow the 
American people to share with us in some of the benefits of decreasing 
the rate of spending increases. The projects we now face, I mean 
everything is coming together at one point in time.

                              {time}  2300

  We do need to finish the appropriations projects. Later on this week 
we are going to have the Balanced Budget Act of 1995, which changes 
entitlement spending to put it in line with the balanced budget. We are 
going to have to increase the debt limit. I know my colleague from 
Connecticut and I are not real excited about doing that, but we 
recognize that we cannot get to a balanced budget in 1 year or 2 years. 
I think that 7 years might be too long, but I think it is a reasonable 
time for us to change our behavior in Washington, to move to where we 
are today from deficit spending to a balanced budget.
  Mr. Speaker, I yield to my colleague.
  Mr. SHAYS. Mr. Speaker, I thank my colleague for yielding, and just 
to say to him that about a year and a half ago, actually a little 
longer, I went to my then-minority whip, Newt Gingrich and said to him, 
``The problem is not term limits, because if it is term limits, then 
you are the problem. The problem is,'' I said, ``is 40 years of one-
party control. Forty years of one-party control is wrong, whether it be 
Republican or Democrat.''
  Mr. Speaker, the next thing I knew was that I was being asked to 
participate in a group that the gentleman from Michigan [Mr. Hoekstra] 
heads. That is one of the things that I think people do not realize 
about the Speaker, is that if you go to him with a suggestion or 
concern, and the next thing he has empowered you and you are now a part 
of the process.
  He put me on a group of people that you headed, Congressman Hoekstra, 
and it was basically an effort of how to decide how do we end 40 years 
of one-party control. This was the group that ultimately worked on the 
Contract With America, and the Capitol steps event.
  Why was there a Capitol steps event? We wanted to catch the 
imagination of the American people and let them know that, if they were 
to elect us, that it would not be business as usual. It would be like 
in Great Britain or in Canada when there is a change of government. Mr. 
Speaker, we said, ``Elect us and this is what we are going to do.'' We 
had a signed Contract With America and we invited all the challengers 
to participate.
  I remember the incredible outcry that people had at first. ``How can 
you sign a Contract With America?'' And I said, ``Well, have you read 
what is in it?'' They said, ``No.'' I said, ``Why don't you look at it 
and then tell me what you think.''
  The press was critical, and I remember the press being critical 
before the election. I said, ``What do you think the majority party's 
Contract With America, the 10 things, the 8 things they want to do on 
opening day, the 10 things they want to do in the first 100 days is?''
  Is not it remarkable that this Contract With America does not 
criticize President Clinton, it does not criticize Democrats? It is a 
positive plan for America. So one of the things that I want to do, 
since I have not had a special order with the gentleman from Michigan, 
is I wanted to thank him for his leadership in helping to devise this 
Contract With America that gave us a real vision and a strategy for 
accomplishing change.
  The gentleman talked about a ``listen, learn, help, and lead model.'' 
The gentleman has talked in a sense about our vision strategies and our 
projects and our tactics, and all of it was positive.
  When people said to me, ``Well, you had this Contract With America, 
and admittedly, it helped you get elected, but you will not implement 
it.'' We implemented those eight reforms on opening day. Then in the 
first 100 days, we implemented 10 major reforms. I look at those 10 
major reforms, and one of them was a balanced budget amendment.

  People said, ``You voted for a balanced budget amendment but you 
would not be so stupid as to vote to balance the budget.'' Whether they 
call it stupid or not, I guess they meant it from the political 
context; that it is heavy lifting and we are taking on a lot of special 
interests.
  But my pride is that we have this Contract With America which is a 
positive plan for this country. We voted for a balanced budget 
amendment, but we did not stop there. We voted to balance the budget.
  If the gentleman would just let me continue just a little longer, we 
are slowing the growth in spending as the gentleman has pointed out. In 
some cases we are cutting programs, particularly in discretionary 
programs, but in a lot of cases we are merely slowing the growth of 
programs.
  The earned income tax credit that helps those who are the poorest, 
they end up not paying taxes. They are the working poor, and they 
actually get something in return. People are saying on the other side 
of the aisle that we are cutting the earned income tax credit. Today it 
is $19.8 billion. In the seventh year it grows to $27.5 billion. That 
is a significant increase.
  The School Lunch Program. They said we were cutting the School Lunch 
Program. It is $6.3 billion today. In 5 years it will be $7.8 billion.
  The Student Loan Program. They are saying we are cutting the Student 
Loan Program. All we are asking is that students pay interest on a 
period after graduation for the next 6 months, when the Federal 
Government has paid the interest. Now we are saying the students will 
pay the interest and they can defer it and amortize it over the length 
of the program. We are going to spend $25.5 billion today and it will 
grow, by 2002, to $36 billion; $36 billion from $24 billion. It is a 
50-percent increase. Only in this place when we spend 50 percent more 
do people call it a cut.
  Then I look at Medicaid and Medicare. Medicaid, we are going to spend 
$329 billion of additional dollars in the next 7 years that we did not 
spend in the last 7. We are going to go from $89 to $124 billion.
  In Medicare, which is an incredible program that we have devised to 
give people choice, it is going to grow from $178 billion today to $273 
billion in 7 years. We are going to spend $674 billion more in the next 
7 years than we did in the last 7. Again, I say only in this place when 
we spend $674 billion more do people call it a cut.
  On a per capita basis, they say more people are getting into the 
program. But we are going on a per capita basis from $4,800 per 
beneficiary, per elderly, to $6,700 per beneficiary, per elderly. That 
is a 47-percent increase per beneficiary. That is an increase any way 
we look at it.
  Mr Speaker, I am so proud of what this Republican majority is doing. 
And I speak to my constituents in my district who are Republican, 
Democrat, unaffiliated, who do not vote at all. There are things that 
my party can be criticized for, but one thing it cannot be criticized 
for is that it cannot be criticized for not doing some heavy lifting 
and not trying to save this country from bankruptcy, because we are 
trying to save Medicare from bankruptcy. We are ultimately trying to 
save this country from bankruptcy.
  Mr. Speaker, we want to stop mortgaging the farm so that our kids 
have such a great debt that they cannot pay it back. We want to begin 
to say no more debt, no more annual deficits which at the end of the 
year add to the national debt.

  In the seventh year, our deficits disappear. They become zero. Our 
national debt does not keep going up and we have done it by allowing 
spending to go up. We simply want to slow the growth in that spending. 
And in the process, we allow for this social corporate welfare state to 
be transformed into what is truly an opportunity society.
  There is going to be much more opportunity. We can go on. What is the 
benefit of getting this deficit down? I mean the gentleman from 
Michigan 

[[Page H 12344]]
has pointed out obviously interest rates go down. Mortgages go down. 
Car loans go down. Student loan costs go down. Even though we ask 
students pay a little more interest for 6 months, they are going to pay 
a lot less interest during the entire period of their loan. Businesses 
will start to invest more because money will be cheaper. When they 
invest more, they are going to create more jobs.
  We borrow 42 percent of the money that is available for investment. 
We, the Federal Government, borrow 42 percent of all savings to fund 
the national debt. That has to end.
  Mr. Speaker, I notice we are joined by my colleague from Maine. I 
would like to welcome him and yield back time to the gentleman from 
Michigan if he would like to go on, and then I would love, Mr. Longley, 
if you would like to enter in. He looks like he is ready to enter in.
  Mr. HOEKSTRA. I would like to make a couple of points, building off 
of what my colleague from Connecticut talked about. I think they really 
do talk about how we want to work as a majority, the kind of vision 
that we have for how we want to whole House to work. It is that we want 
to focus on a positive message.
  Mr. Speaker, we have a positive message. We have, I think, all a 
positive vision for where this country needs to go and what we want to 
do. So we can talk about where we want it to be in the future. We can 
talk about it in a very, very positive way.
  In a way, that reaches across to the other side of the aisle, and 
reaches out to the President and says, ``We have a vision and a very 
positive vision. And we really would like you to work with us.''
  I think again on the Committee on the Budget, we are willing to work 
with Members who share this vision of financial stability and financial 
soundness. In the meetings that we had where we kicked off the year in 
the Committee on the Budget, we were joined by one our colleagues from 
the other side of the aisle who said, ``I share your vision for 
restoring this country to financial soundness,'' and that gentleman 
participated in all of our meetings because he recognized that where we 
wanted to go was where he wanted to go.
  We recognized that it was going to be hard work. Getting to a 
balanced budget, I think we have found out, has not been easy. We have 
many differences from the Northeast to the West, to the South, to the 
Midwest. We all have our different priorities. But when we have come 
together as 234 Members and said, ``We share this vision of getting to 
a balanced budget,'' and we keep our focus on that end goal, we have 
all been able to put aside some of our personal desires and our 
personal priorities and say, ``It is more important for us to reach 
that goal together, because that is the only way that we are going to 
get there.''

                              {time}  2310

  We are willing to put aside part of our personal interests because we 
share that objective of getting to a balanced budget. It is going to be 
hard work. I hope that the President, that he comes out and says, I 
will do it with you. I will balance it, because we will get a better 
solution because we will have 435 Members and the President taking a 
look and scrubbing our proposals. It will get better if we hang onto 
that balancing the budget within 7 years.
  Mr. SHAYS. Mr. Speaker, I think the key point is that we believe that 
at the very latest we should balance the budget in 7 years. Someone 
said what is so magical about 7 years. Nothing except for the fact that 
over 300 Members of this House, Republicans and Democrats, have voted 
for a balanced budget amendment to be balanced in 7 years. So over 300 
or more than three-quarters, almost three-quarters of the Members here 
voted for a 7-year balanced budget. Candidly, nothing magical about a 
7-year budget. I think it should be 4 or 5. But at the very least, 
within 7. I think the gentleman's point that the President could make 
it a better budget, we are not saying it has to be our 7-year budget, 
``our'' being Republican. It can be ``our'' being Democrat and 
Republican, a 7-year budget.
  Mr. HOEKSTRA. We have seen that. This is not your 7-year budget. It 
is not mine. If you developed one, it probably would have been 
different than mine. But we have put aside our differences and agreed 
on one that we can get that kind of unanimity on. I just want to say, 
we are also making some key structural changes in programs that are 
going to reform programs and that are going to make these programs 
better for the long term.
  I think the other thing that we have to recognize is, maybe one of my 
colleagues would like to share on this, the dynamics, after the year 
2000, especially on entitlement programs do not get any better. If we 
blink in 1995, what happens in 2005 with the baby boomers, the dynamics 
are working against us. All the entitlement spending on Medicare, 
Social Security, and all of these programs is going to skyrocket as the 
baby boomers get there. And so if we do not solve or start addressing 
this problem in 1995, it is not going to go away. It is only going to 
get worse. That is why today, yesterday and the next 7 to 10 days are 
so, so critical to get this under control.
  I yield to the gentleman from Maine [Mr. Longley].
  Mr. LONGLEY. Mr. Speaker, I appreciate the comments. I think the 
first thing that I would like to pick up on is what both of you have 
been saying which is that we have a positive agenda. We are not here to 
criticize anyone else. We are here to deal constructively with the 
Nation's problems, try to respond to what the public demanded last 
November. And I think it is important that we make a point that the 
easiest thing in the world for us to do as Members of Congress is to 
come in here and pretend that these problems do not exist. The easiest 
thing in the world is to say, sure, Mr. President, spend all the money 
you want. Go ahead and borrow all the money you want. But we know that 
it would not be right. And it has been a darn tough challenge over the 
last 10 months to take a look at a $1.5 trillion budget and make the 
kinds of adjustments, frankly, not the kinds of cuts that are being 
described, but adjustments in terms of a slower rate of growth in 
Government spending so that we can get to a point of having a balanced 
budget by the year 2002.
  But again, I want to go back particularly because earlier this 
evening, there were Members on the floor that were discussing the fact 
that we should have had all our work done by July or August. The point 
that I would like to make is, yes, prior Congresses have had all their 
work done by July or August. They spent as much money as they wanted to 
spend. And when they did not have enough money, they just raised taxes 
to pay for it.

  Mr. HOEKSTRA. Mr. Speaker, I think my colleague from Connecticut 
probably will want to jump in, our research shows that there have been 
nine Government shutdowns since 1981. And in that same period of time, 
there have been 57 continuing resolutions. Congress has not always 
gotten its work done in the first part of September.
  Mr. SHAYS Mr. Speaker, I think we can be very candid. I would love it 
if we had had this budget done by October 1. I am not going to say 
because it happened in the past we should have done it, because we 
would like to think that we are different. I think the challenge has 
been that for the first time we are trying to balance the budget and 
get our financial house in order. We have taken on every special 
interest group you can imagine. By special interest group, I do not 
even mean that in a derogatory way. We have just taken every group and 
said that they need to share in this wonderful, and I say wonderful, 
opportunity to get this financial house in order. Because ultimately 
the benefits will be extraordinary. But it has not been ready by 
October 1.
  But the one point I make is that by Friday we will have the job done. 
We will give the President a balanced budget. It will get us on a 
glidepath to a balance in 7 years. It will still allow spending to 
increase, and it would be easier if our colleagues on the other side of 
the aisle were contributing to helping.
  Someone said, why have you not downsized Government, and we said we 
are, and we are in the process. But when a private company downsizes, 
the corporate people get together in a room. They decide the policy and 
they speak with unanimity. In this case, you have a government. We are 
trying to downsize the Government. And you have part of the board of 
directors on the other side saying, no, we should not downsize 
government and we should 

[[Page H 12345]]
not control the growth in spending. But we are going to get the job 
done.
  Mr. HOEKSTRA. In downsizing government, I came from a company that 
downsized. Actually, when we downsized in the private sector, when we 
got done the number of employees and our costs were actually less. 
Remember when we are downsizing in Washington, we are downsizing a $1.5 
trillion budget. And in 7 years it will be $1.8 trillion budget. So 
downsizing in the private sector is a little different than downsizing 
in Washington.
  Mr. SHAYS. It is. And it has not been easy. But the bottom line is, 
we are doing our best. I am really proud of the job we have been doing.
  Mr. LONGLEY. Mr. Speaker, I think that the other point that needs to 
be made is that we have been given literally three or four different 
plans by the administration. And I think that it has been a challenge 
for us to sort through these different options in terms of trying to 
reach the honest objective of a balanced budget.
  I think one of the things that was just astounding to me as a new 
Member of Congress was to come to Washington, to come to this body and 
to discover that there is a significant portion of the Congress and the 
administration that has no intention whatsoever of balancing the 
budget.
  In fact, I think it is fair to say that this entire debate that we 
are now engaged in that began in earnest last night with the failure of 
the President to come to some agreement with the leaders of the 
Congress is that the bottom line is, they do not want to balance the 
budget. And I think I would defer to what the gentleman from 
Connecticut said, the issue is no later than 7 years. We will be lucky, 
frankly, if we have 7 years to balance the budget. And within that 7-
year time frame, we are going to be willing to be as accommodating as 
we can in terms of different senses of priorities. But we have got to 
put an end to this mindlessness of just continuing debt as far as the 
eye can see because it is just not going to work for this country. It 
is going to destroy this country.

  Mr. SHAYS. Mr. Speaker, half of our budget are entitlements: Social 
Security, Medicare, Medicaid, and a whole host of other entitlements, 
food stamps, welfare. You fit the title, you get the benefit. That is 
half of our budget. I do not get to vote on it. You do not get to vote 
on it. It does not come out of the appropriations committee. It is on 
automatic pilot.
  Basically we have another 15 percent of our budget that is on 
automatic pilot, too. It is mandatory spending. It is interest on the 
national debt. I have been here 8 years now. I voted on one-third of 
the budget. The reason why Gramm-Rudman failed, one of the reasons that 
process that was intended to control the growth of spending because it 
only looked at what we call discretionary spending, the spending that 
funds the executive branch, the legislative branch, and the judicial 
branch, all the different departments and agencies in the executive 
branch, all the grants there, then foreign aid and then defense 
spending. That is what it basically looks at.
  And we have been trying to control the growth of spending by just 
focusing on domestic spending, when we know and Mr. Panetta, when he 
was a Member of Congress, the chairman of the Committee on the Budget, 
he said, we are ultimately not going to control the growth of spending 
until we control the growth of entitlements. This is the first Congress 
that has taken on that task.
  It is leading me to the point, my colleague may have wondered where I 
was headed here. He made the point that we have this incredible 
opportunity to balance the budget in 7 years. But even when we do it, 
we still have to come to grips with the baby boomers that start 
entering Social Security in the year 2010. And by the year 2030, you 
have 65- to 85-year-old baby boomers in the system, totally utilizing 
all the funds. And the system quickly becomes bankrupt.
  So if we cannot come to grips with getting, slowing the growth of 
entitlements now, if we cannot do that now, we are doomed in the 
future. That is the bottom line. So we have to begin to slow the growth 
of entitlements and then ultimately we will have to revisit this issue 
on a bipartisan basis.
  I will tell you this, I do not think it is going to be possible for 
one party to take that issue on like we are trying to take this issue 
on now.

                              {time}  2320

  When the experts came in last week and they talked about the 
advantages in how getting to a balanced budget is going to free us up, 
I mean it is going to drive to a stronger economy. But as we have 
talked about reforms that need to take place here in Washington, about 
just about how we budget, they said, you know, just think, when you 
actually lay out a plan, and you start going down the path of a 
balanced budget, think of how it will free us up to make the reforms 
that we need to make. If we actually--what is one of the stronger 
arguments against a balanced budget amendment? Well, nobody has laid 
out a path. Well, we have actually, we are going down the path. Maybe 
we can find that one more Senator, or we can find that one more person 
in the other body, that will vote for a balanced budget amendment so 
that balancing the budget does not become a nice to every year, it 
becomes a have to, it becomes the law of the land that we will not fall 
into this trap again.
  Mr. SHAYS. Like every State in this country has to balance its 
budget, and obviously during times of emergencies, then during times of 
emergencies we can have a deficit budget, but only in emergencies.
  Mr. HOEKSTRA. So that we have a realistic chance then of getting to 
that, changing the law of the land. It will enable us perhaps to do 
budget reform so that we can identify capital spending versus expense 
spending so we can do some budget reform. We maybe actually can even 
run the budget like the private sector does so that when accountants 
came in and took a look at our books, they would say, ``Yeah, that 
makes sense.''
  How does Washington run today? The biggest budget in the country; how 
do we run it? We run it on a cash basis. No company in the country 
would pass any financial test by any auditing firm if they ran on a 
cash basis. The do accrual accounting. We have got liabilities out 
there for Federal employees who are earning pensions. If we are in the 
private sector, we would have to be setting money aside to make sure 
that that money is there to pay their pensions. We do not do that for 
Federal employees because we run on a cash basis.
  I mean it is unbelievable, but, if we get to a balanced budget, maybe 
we can make that reform. Like the gentleman said, if we get to a 
balanced budget, maybe Congress can grab back this entitlement monster, 
not to change the programs, but to assume the responsibility each and 
every year, which is ours, that says, yes, we are going to spend this 
much money to provide these services rather than it being automatic. 
Entitlement spending is one of I do not know how it ever got here, but 
when Congress gave that authority away and said we are automatically 
going to spend that money without reviewing it each and every year, we 
gave up our responsibility in loss--well, we did not lose 
accountability, but we put in place a monster that has gotten out of 
control. If we actually get, as we move to a balanced budget, these are 
the kinds of reforms that we can get back in, and we can say we are 
actually going to run this country under the types of financial rules 
and regulations that insure long-term financial soundness.
  I yield to the gentleman.
  Mr. LONGLEY. I just would pick up on what the gentleman from Michigan 
is saying.
  You have I think, and again I want to speak as a new Member and as 
somebody who is new to this body, albeit we have been here now for 10 
or 11 months. It has been amazing to me to see the extent to which 
those who have been in Washington, particularly those who have been 
here much longer than any of the three of us, just take it for granted 
that we continue to spend and acquire the level of debt that we have 
been acquiring, and not only do they take it for granted, but even the 
entire, all of the, committee structures, the language that we use, 
everything is built on the assumption that Washington will take more 
and more of what the public is producing and having less and less go to 
the average citizen who is across the country, that it is almost--it is 
a mind set that we here in 

[[Page H 12346]]
 Washington have a right to take the money from the public and spend it 
the way that we want to and that it is almost heretical to even suggest 
the idea that we should be restoring power to individual citizens 
across the country, the most basic form of power, which is the ability 
to control your own income, and again the extent to--the public is 
confused about what we are discussing here, and again there is not 
anybody that regrets the partisanship more than I do and wishes that we 
could get constructive dialog from the other side of the aisle.

  But the fact of the matter is this is all about whether or not we are 
going to balance the budget.
  Mr. SHAYS. I was thinking, if the gentleman will yield, just in terms 
of determination. You know, I have had some people say, ``What's so 
magical about a 7-year budget,'' and, as I pointed out, nothing is 
magical about it if we can do it in 4 or 5 years. If I were running for 
the President of the United States, I would want to tell the American 
people I would do it under my watch and not under somebody else's 
watch. So, nothing magical about 7 years. We could do it sooner.
  But I was thinking, if I asked you, Mr. Hoekstra, and if the 
President of the United States said to you, ``How do I get out of this 
mess?'' I mean you all are insisting on a balanced budget amendment. I 
do not want to--I do not want to do what you are doing. How would you 
reach out to the President and say to him you need to be a part of 
this, and what are we asking the President to do?
  Mr. HOEKSTRA. Well, we are asking the President to sit down, 
understand our vision for where we want America to be, where we want 
America to be in 7 years, understand the vision, understand what we 
want America to look like, understand what we perceive the benefits of 
moving in this direction, and understand what we believe to be a very 
rational way of getting there, by just slowing the growth of the 
Federal spending.
  Mr. SHAYS. And following your very model of listening, we would be 
listening to him as well as to how he would do it, and then we could, I 
would think, hope to marry that vision that we have, but clearly I 
think I would be saying to the President of the United States, ``Mr. 
President, we need to balance the budget within 7 years, and you need 
to understand our determination on that issue. Over 300 Members of 
Congress, Republicans and Democrats, felt that balancing the budget 
within that time was the outer limit. Now what goes in that budget can 
be a combination of our vision and your vision. How we do it is clearly 
open for debate. We think there also should be a tax cut. You think 
there should be a tax cut. We should determine how that should happen. 
But again that's a shared responsibility.''
  So we are really just saying to him, ``Give us a balanced budget 
within 7 years.''
  Now what we could do when he did that is to say we have given you our 
7-year budget, now you give us your 7-year budget. Let us see where the 
differences are, let us see what the similarities are, but by the 
President refusing to even agree to a 7-year budget, he has been able 
to basically stand on the sideline, almost as someone just watching 
this, and not weighing in. Ultimately he is the President, he has to 
weigh in.
  Mr. HOEKSTRA. Well, I mean the process that we could use with the 
President is very similar to what we did in the Committee on the 
Budget. I mean we spent what, 3, 4 months, the first 4 months of this 
year, going through it saying, ``OK, we've agreed as what, 18-20 
Members, that we are going to balance the budget. We brought in experts 
from all the different departments. We brought in our own knowledge, 
our own staff, our own biases.''

                              {time}  2330

  We said, ``OK. We have to get to here, we have to get to there.'' You 
had some ideas, I had some ideas, and we all shared our ideas.
  Mr. SHAYS. We had to compromise.
  Mr. HOEKSTRA. We fought through the issues. I do not know if we 
compromised, but we listened to each other, we learned from each other. 
At the end, the gentleman from Ohio, John Kasich, he led. He said, ``I 
have listened to all of you, I have taken your input. You know, some of 
you are going to win, some are going to lose, but we have to get off 
the dime. Here is where we are going.''
  We sat down at the end of the day and said, ``I do not agree with all 
the decisions that were made, but you know what, this package is 
something that we can all get behind and we are going there.'' If the 
President says ``I am going to balance the budget in 7 years,'' he can 
put his plan and we will get in the room again and we will start doing 
the same give and take, and if we are all agreed on that vision, it 
would free us all up to have a wonderful dialog and a wonderful debate 
about how we are going to get to a very positive future.
  Mr. LONGLEY. If the gentleman will continue to yield, let us put the 
whole issue in its simplest terms, Mr. Speaker. There are some people 
who believe the budget should be balanced today. There are also some 
people who believe the budget should never be balanced, so you have 
today versus never.
  In between, there are some that say 3 and 4 years, there may be some 
that say 10 years. The President at different times has said either 5 
years, 10 years, never, and sometimes he said 8 or 9, depending on what 
day of the week it is. The fact of the matter is that we have settled 
on 7 because not only is it a reasonable compromise, but we have also 
looked at what the gentleman from Connecticut [Mr. Shays] has 
anticipated in terms of the baby boomers and the tremendous pressure we 
face in the early part of the 21st century. These are some tough issues 
we need to deal with today to get them behind us, so that we can 
protect Medicare, protect Social Security for the generations to come.
  But there is also something else that is very important, because 6 or 
8 months ago we voted on the floor of this House for a balanced budget 
amendment. Three hundred Members of the Congress voted in favor of 
balancing the budget by the year 2002. That is what 300 Members said.
  I guess the point that I would like to make is that sometimes there 
is a difference between what people say and what people are willing to 
do. The fact of the matter is that we have had 300 votes on record in 
this body for a 7-year balanced budget pursuant to the terms of the 
balanced budget amendment, and we are only doing exactly what we said 
we were going to do. That is what I find remarkable about all the 
disagreement and hullabaloo that we have been hearing on the floor of 
this House.
  Mr. HOEKSTRA. What is that?
  Mr. LONGLEY. Hullabaloo.
  Mr. HOEKSTRA. It is a northeastern term.
  Mr. SHAYS. It comes from Maine. I do not even know in Connecticut.
  Mr. LONGLEY. I could come up with more terms, but I will save the 
dignity of this Chamber.
  Mr. SHAYS. Mr. Speaker, if the gentleman will yield, I was thinking 
that the President did come in with a 10-year budget. I got excited. At 
least we had a 10-year budget. But he did not have any details. Then we 
gave it to the Congressional Budget Office, and they said the 10-year 
budget is never in balance. They point out in the last 6 years, 
basically in 1997 his deficits would be $205 billion, then it goes to 
$203 billion, $250 billion, $221 billion, $215 billion, $209 billion, 
$207 billion, $206 billion. In the year 2005 it is at $209 billion of 
deficits.

  Really, what I think we would be asking the President to do is come 
in with a 7-year plan, your plan. We have our plan. Then let us compare 
it. Let us see where the similarities are. Let us see how we can go 
forward.
  Mr. Speaker, we have 15 minutes left, and I would love to weigh in on 
one issue, that is Medicare. It is just an example of a program that we 
designed which I think saves money and also improves the system. If the 
gentlemen do not mind, I would love to just kind of weigh in.
  This is an example of a program that simply was growing at more than 
10 percent to 12 percent a year, doubling every 5 to 7 years, depending 
on which years it was growing, and we said that we felt that we could 
make a savings in the program, allow it to grow at about 6.5 percent a 
year, save $270 billion in the process. We were able to do it by 
actually improving the service.

[[Page H 12347]]

  I have had people say, ``How could I vote for the Medicare plan?'' I 
say, ``Describe it to me.'' They describe a plan described by my 
colleagues on the other side of the aisle, which is not our plan. Our 
plan has no copayment, no increase in the copayment, no increase in 
deduction, no new deduction. The premium stays at 31\1/2\ percent. As 
health care costs go up, the premium will go up at 31\1/2\ percent of 
additional health care costs. Who pays the other part of that Medicare 
Part B premium? The taxpayer. They pay 68\1/2\ percent.
  We are saying that the taxpayers will continue to pay 68\1/2\ 
percent. Taxpayers will pay more and more of Medicare. Now, we have 
this plan and we basically do not change in a negative way any 
beneficiary except, candidly, some in my district that tend to be 
wealthy. Those who are the wealthiest, if you make $100,000, you would 
start to pay more for Medicare part B. If you make more than $125,000 
and you are married, you start to pay more for Medicare part B. The 
wealthier, more affluent will pay more for a certain part of Medicare, 
but only the wealthiest.
  Then I have people who say, ``Congressman, I want the same kind of 
health care you have: Choice.'' What we have done with our Medicare 
plan is give them choice. We allow people to stay in the traditional 
fee-for-service system they have, or we say they can go and get any 
host of new programs.
  The only way that they have to leave, they never have to leave, they 
can stay as long as they want in the present Medicare System, they keep 
their same doctors, and they would only leave if they proactively 
decide to leave. If they leave and get into private care plans, they 
can come back every month for the next 24 months, the next 2 years. We 
allow people to go in, and if they do not like it, they can come back 
and get what they always have had.
  I think to myself, how can anyone oppose it? No increase in 
copayment, no increase in deduction, the premium stays at 31\1/2\ 
percent, and now they have MedicarePlus. They get to choose. Why would 
they leave the system they have? They can get eye care, dental care, 
they might get a rebate on their copayment or deduction, or they may 
have their Medigap paid for the new plan, or there may be no Medigap 
costs.
  We devised a plan that gives them choice, allows them to keep what 
they have, allows the program to grow from $4,800 per beneficiary to 
$6,700 per beneficiary. To me this is just one of the good examples 
that we have found a way, nothing magical about it, just good common 
sense, to save money in Medicare and increase and improve the plan for 
everyone, and in the process save Medicare.

  I would just make this final point: What happens to the $270 billion 
of savings? One hundred and thirty-three billion dollars of it goes 
into the Medicare part A trust fund that is going bankrupt. One hundred 
and thirty-seven billion dollars of it goes into Medicare part B, so 
that $270 billion is saving the program from bankruptcy. It is not 
going into the general fund, it is not being used for tax cuts. It is 
going directly into saving the Medicare plan.
  Mr. LONGLEY. Mr. Speaker, if the gentleman will continue to yield, I 
think one of the things we forget about Medicare is that this is a 
program that is paid for by taxes on the wages of working people, or by 
seniors through their premiums.
  We have an obligation, a serious fiduciary duty, to act in the best 
interests of the trusts and in the participants in the program. As the 
gentleman says, any dollars that are saved are staying in the program, 
but when we looked at the problems, and I want to speak to this, 
because I campaigned on the trustees' report, not this past year but 
over a year ago, in April 1994 when the trustees came out and said that 
all three of the major trust funds were going to run out of money, 
including the disability fund, the Medicare fund, and even the general 
trust fund.
  I decried the fact that Congress and past Congresses had just blown 
this off, as if it was no big deal and nothing to worry about. I 
thought that was outrageous, and I think many of the voters that I 
spoke to felt exactly the same way.
  When this later report came out in April 1995 and said exactly the 
same thing, I went back to my district and said, ``This is exactly what 
I have been talking about for the last year.'' There is something else. 
Forget the fact that the trustees have warned us that the fund goes 
into deficit next year, and goes bankrupt by the year 2002. Let us 
forget the fact for a minute that despite all of the false accusations, 
we are actually going to provide a rate of increased funding that is 
twice the rate of inflation, maybe three times the rate of inflation, 
depending on the rate of inflation, but roughly, we are looking at 
about a 6 percent to 7-percent annual increase in spending, a per 
beneficiary increase from $4,800 to $6,700 per beneficiary per year, an 
astounding amount of money. Forget all of that for a minute. Let us 
assume none of these problems exist.
  When I look at the choices that the gentleman from Connecticut and 
the gentleman from Michigan and others have developed, I see options 
that are potentially very positive, particularly for a State like mine, 
the State of Maine. We have a problem with rural health care.
  We have a big government program in the form of Medicare that is 
highly consolidated, which drives participants and drives costs to the 
urban centers. We are going to be creating options in this plan for 
local physicians to establish their own provider service networks, 
which will give local seniors the ability to choose a health plan that 
is actually oriented to their own communities.
  I see this as potentially helping reverse the trend toward 
elimination of rural health care, and consolidation in the urban areas. 
I think it is an exciting option, which, frankly, we ought to be 
considering whether or not there were problems with the Medicare 
System.
  Mr. HOEKSTRA. If the gentleman will yield, I think if we go back and 
say, ``Why can we do this?'' When we are taking a look at Medicare, we 
are taking a look at a program that started in the 1960's; that 
basically for 30 years has remained unchanged.
  I entered the work force in 1977. From 1977 to 1992, before I came 
into Congress, in the private sector we saw an explosion of, sure, 
health care costs, but also an explosion of health care options.

                              {time}  2340

  Changes, innovations in terms of the choices I had to make, the 
services that the company that I worked for provided. The options that 
they provided me and my family for health care coverage, all kinds of 
innovations going on in the health care field, none of which made their 
way into Medicare.
  So now, finally, in 1995, we are bringing and we are catching up to 
1960's program, fee-for-service, traditional fee-for-service. The most 
expensive, inefficient way to provide health care to individuals. We 
are updating that.
  For those that like that program, I had that at my own employer. I 
said, ``If you want to keep a traditional program, you can do that, but 
here are some other options which may be more exciting and more 
advantageous to you. Take a look at them.''
  Mr. Speaker, and that is the same thing we are doing. If you like the 
traditional fee-for-service Medicare Program, can you keep it. Your 
premiums stay the same. Your copays do not change. It is the same 
program.
  Mr. LONGLEY. Again, I want to reemphasize exactly what the gentleman 
from Michigan is saying. What we are really saying to the seniors of 
this country is that we are going to guarantee them the right to keep 
Medicare as they know it, if that is what they want. We are also going 
to be providing choices in either managed care type programs, or what I 
also view as an exciting opportunity, the possibility that they could 
obtain an association-sponsored plan or a union-sponsored plan or a 
company-sponsored plan that could continue after they turn 65 and would 
normally be in the Medicare Program.
  By the way, if they do not like any of those programs, we are going 
to guarantee them the right on a monthly basis to go back into 
Medicare. It is astounding to me that we would be criticized for 
providing this kind of choice.
  Mr. SHAYS. If the gentleman would yield, I was asked by a Time 
magazine reporter, she wanted to follow me around because she heard 
that so many people did not like the Medicare plan. She came to 
Greenwich and I had a dialog on the radio and people seemed 

[[Page H 12348]]
comfortable with it. She was disappointed and she said ``I know that 
people do not like it.'' I said, ``You come to Bridgeport and we will 
get on Tim Quinn's program and I will let him get the troops all riled 
up.''
  We got there a half an hour after he started the program. The first 
call, I noticed that the Time reporter was very excited. The first call 
was, ``Mr. Shays, I have a problem with my heart and I have Dr. So-and-
so. I have a problem with my kidney, and I have Dr. So-and-so. My 
regular doctor is So-and-so.'' And they said, ``Am I going to be denied 
the ability to have those doctors?'' The answer was a simple, ``No.''
  Just to reiterate the point, the calls from that point on, when 
people understood the plan was, ``Tell me more about the plan.'' We can 
talk a long time about Medicare. The bottom line is that it is an 
exciting program that we are doing with MedicarePlus. Participants can 
keep the old system or get a new system.
  Mr. HOEKSTRA. We can go back to how we started this special order. We 
went through a process in designing this new Medicare program of 
listening to seniors; listening to providers; listening to doctors; 
taking a look; listening; learning.
  We are now in a process, we are still listening and learning as we 
roll out this program, but we are helping people understand what we are 
doing and we are leading which is our responsibility. We have gone 
through the steps. Listen, learn, help, lead.
  Mr. LONGLEY. Something else, and this is important, we are daring to 
shatter the stereotypes that Washington will not respond to the 
problems that the average Americans are experiencing. It is 
demonstrating to me how entrenched many of the vested interests are in 
this city and how absolutely desperate they are to avoid any type of 
change whatsoever.
  I think it is exciting that we are willing to stand up to the special 
interests and make the kinds of changes that we need to make; not only 
improve these programs to strengthen them for the future, but candidly 
on a positive basis to provide the kinds of choices that up to now 
Americans will not have ever had.
  Mr. SHAYS. The concept of listening, learning, helping. We helped to 
make this program a better program and now we are going through the 
process of leading, and leading takes some heat. I am more than eager, 
because I believe so strongly in what we are doing, to take that heat.
  Mr. Speaker, I give my colleague the minute left to close up this 
discussion.
  Mr. HOEKSTRA. Mr. Speaker, I think we told the staff that has been so 
gracious in staying that we are going to let them out early. We will do 
this in the Republican way. We will not take the full hour; we will 
take 59\1/2\ minutes.
  Mr. LONGLEY. I say to my colleagues, I appreciate the opportunity to 
be on the floor with you tonight.
  Mr. SHAYS. Mr. Speaker, I yield back and I hope, Mr. Speaker, I have 
the opportunity to be at the dais and have you have a special order. It 
is a quarter of 12. You have been here a very long time and we thank 
you from the bottom of our heart.

                          ____________________