[Congressional Record Volume 141, Number 181 (Wednesday, November 15, 1995)]
[Senate]
[Pages S17080-S17082]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       THE CONTINUING RESOLUTION

  Mr. NICKLES. Mr. President, I want to respond to a couple of comments 
made by my friend and colleague from the State of Massachusetts.
  I heard two or three statements that Republicans have a budget and 
they are trying to balance the budget on the backs of senior citizens 
and making unrealistic cuts in Medicare would be the thrust. I 
disagree.
  Mr. President, if you look at the Medicare fund, it is going broke. 
The Medicare system is funded by a payroll tax. All the money goes into 
one fund. It is financed by a tax that costs right now 1.45 percent of 
payroll, matched by employer. That is 2.9 percent.
  Now, next year the fund pays out more than it takes in. You cannot 
continue to do that indefinitely. The fund is going broke. The 
President's own trustees said it is going broke.
  Some of us do not want that to happen. Some of us think that would be 
unfair to seniors. Maybe some of my colleagues on the other side of the 
aisle say, ``Well, do not do anything. We will not solve that 
problem.'' I disagree.
  Now, there are two ways to solve the problem--either reduce the rate 
of growth of spending in Medicare, which is, frankly, what we are 
proposing, or you increase payroll taxes, which is what Congress has 
done in the past.
  Just for my colleagues' information, I looked up years ago what was 
the history of Medicare taxes. The maximum tax in 1977 was $177. That 
is employee and employer maximum tax. The maximum tax in 1993 was 
almost $4,000. So it went substantially from $177 to almost $4,000.
  Guess what? The fund is still going broke. So we have increased the 
tax rates, we have increased the basis. We are spending a lot more 
money, and still spending exceeds the revenues. Next year, the spending 
is greater than the revenue in spite of the fact that now there is no 
cap. It is 2.9 percent of payroll. It can be well over $4,000 and the 
fund is still going broke.
  If it goes broke, it cannot pay the bills. It cannot pay the 
hospital. It cannot pay the doctor. How is it responsible to allow that 
to happen? I do not believe it is responsible. So we need to fix it. 
That is part of our budget.
  Somebody says, ``Well, you are cutting Medicare.'' I disagree. This 
year we are spending $178 billion in Medicare. By the year 2002, we 
will be spending $286 billion in Medicare. That is an increase. That is 
an increase at twice the rate of inflation. So, Medicare under our 
proposal grows twice the rate of inflation, and it stays solvent. We 
keep the Medicare trust fund solvent for beyond the year 2010. The 
President keeps it solvent for a couple more years. That is not 
satisfactory. We are trying to be responsible. Some people are playing 
politics.
  The President is playing politics. The Republicans wanted a 25-
percent increase in beneficiaries' payments. That is so demagogic. The 
facts are, just to be very simple, part B, part B is voluntary. It pays 
for the doctors. When the system started 30 years ago, it was supposed 
to be 50-50. Now the percentage that beneficiaries pay is 31.5 percent. 
That means taxpayers pay 68.5 percent. That means my son and daughter, 
who are not wealthy by any means but they have jobs, they are helping 
to subsidize the wealthiest persons' Medicare--they help pay 68.5 
percent of the Medicare premium of the wealthiest persons in America.
  We are trying to make some changes in that. One, we try and keep the 
perk 

[[Page S17081]]
at 31.5 percent under our proposal. Anybody that has looked at the 
problem of financing Medicare says that the Medicare beneficiary should 
probably pay at least 31.5 percent. Here you have the President of the 
United States saying that is an outlandish increase in Medicare 
copayments. No, we were trying to keep the percentage at 31.5 percent.
  People should know the country's law says it will drop to 25 percent. 
Should it drop to 25 percent when it is going broke? We are trying to 
keep it at that level. Is that an unfair attack on senior citizens to 
give rich people tax cuts as was alluded to on the floor? Definitely 
not.
  As a matter of fact, we passed a provision that says any increase 
between the 25 percent and 31.5 percent, 100 percent of that goes into 
the part A trust fund, which is going broke. Any of the changes that we 
made in part B, any of the changes we made as increased contributions--
and we say wealthier people--we will drop off the subsidies. If they 
make over $150,000 or something, they have to pay 100 percent of their 
Medicare payments. We will eliminate the subsidies for wealthier 
people. I believe that subsidy phaseout begins at $60,000 for an 
individual and $90,000 for a couple. We say above those amounts --and 
it takes $50,000, I think, to get to where there is no subsidy--we say 
above that amount people should pay their own.
  I think that is a good proposal. Why should our kids be subsidizing 
people who have incomes of over $150,000? That is a good proposal. Does 
that wreck the Medicare system? No. It helps save the Medicare system. 
It reduces the subsidy that a lot of people are paying for people who 
can well afford to pay for their own.
  I want to make a couple of comments concerning the stopgap spending 
measure that we in Washington, DC, call a continuing resolution. The 
President vetoed one that we sent him the other night, on Monday night. 
I wish he had not. He vetoed it because of the part B, and he 
demagogued it and maybe scored some points. It might have helped 
electionwise, but it was bad policy for him to do that. I regret that.
  What else did he veto? I met with the negotiators yesterday. And I 
compliment Senator Domenici and Congressman Kasich. And we met with Mr. 
Panetta and Secretary Rubin representing the administration, we said we 
will not mess with Medicare. We say what we really want is a commitment 
to balance the budget in 7 years. So we want to pass a continuing 
resolution, a stopgap spending bill, that will allow Government offices 
across the country to stay open, but we want a commitment from them to 
balance the budget in 7 years.
  Mr. Panetta said that is not acceptable. Why? Because we want to use 
Congressional Budget Office economics because we feel those are more 
realistic than the Office of Management and Budget, than the 
President's economic figures. They said it was not acceptable. I will 
just remind you, Mr. President, that the President of the United States 
in a speech in the House of Representatives, in a State of the Union 
speech, said that he would use Congressional Budget Office figures. He 
did not want smoke and mirrors. He did not want to play games. He said, 
let us use the same numbers. There was a big round of applause.

  Now the President does not want to use the Congressional Budget 
Office. You say, what difference does that make? I will tell you. Over 
a 10-year period of time it makes $475 billion difference, the 
difference in economic assumptions. So you are talking about a lot of 
difference. That is twice what we are talking about for changes in 
Medicare and so on. So we are talking about a significant difference.
  The President says we can balance the budget just by having greater 
economic expectations and so on. We are saying, no, let us use 
realistic numbers, let us use the same numbers the President said he 
would use 2 years ago. So that is what we are saying. Then we said we 
want to balance the budget in 7 years.
  President Clinton, as a candidate in June 1992, said we can balance 
the budget in 5 years. In the last 4 months, he has said we should 
balance the budget in 10 years, 9 years, 8 years, 7 years, and more 
than 7 years. He said all the above. We believe it should be done in 7 
years.
  Do we know what is right? Why did we pick 7 years? Because, when we 
had a balanced budget amendment on the floor of the Senate, we said we 
would balance the budget by the year 2002, and we said we would try to 
do it whether we had a balanced budget amendment or not. We happened to 
think that was the right thing to do. We should balance the budget. 
That is what this is all about.
  Do we want to fund Government? Do we want to shut Government down? 
No. Do we want to pass a responsible short-term spending resolution? 
Yes. But we also want the President to start working with us to balance 
the budget. And, so far, he has been AWOL: absent without leadership. 
He has not been at the table.
  His negotiators have said, send us a bill, we will veto it, and then 
we will negotiate. Why should we not negotiate now? Why should we not 
try to solve the problems now, not later, but now? We have not been 
able to get anybody's attention in the White House to make it happen. 
We want it to happen. We want to save Medicare and we want to balance 
the budget and we want to be able to give American families tax relief.
  Then I just have to answer the claim that I heard two or three times 
by my colleague from Massachusetts, when he said Republicans want to 
make all these changes, they are cutting all this spending, and they 
want to do it so they can give their wealthy friends tax cuts. I 
disagree.
  Are we cutting spending? Not really. Today we are spending $1.5 
trillion. In 7 years we are going to spend almost $1.9 trillion. 
Spending rises every single year.
  Do we slow the growth of spending? Yes. Do we curb the growth of 
entitlements? Yes. Have we done that before? For the most part, no. 
Congress has never really had the courage or the leadership to slow the 
growth of entitlements, and some entitlement programs have been 
exploding. So now we are saying, let us control their growth. In most 
cases, like Medicare, it is growing at over twice the rate of 
inflation. But we can do that and balance the budget, moderate their 
growth and save Medicare.
  All the savings in Medicare go in to help save the Medicare fund, so 
Medicare reductions in growth have nothing whatsoever to do with tax 
cuts. But we are saying we can make this slope. We can actually make it 
happen, balance the budget by the year 2002, and allow American 
families to keep more of their hard-earned dollars.

  Over 70-some-odd percent of our budget, 75 or 76 percent, is directed 
toward American families. The bulk of that is the $500 tax credit per 
child. Most all that--we passed it in the conference--it comes out to 
individuals who make less than $70,000 or families who make less than 
$110,000. So we target it toward working families who are paying taxes. 
Then they can use that.
  If you have two kids, that is $1,000 a year. If you have four kids, 
that is $2,000 a year. If you have an income of $24,000, you will not 
pay any income tax. If you have income of $30,000 with two kids, we 
just cut your tax in half. If you have income of $40,000, we just cut 
your income tax by a fourth. If you have income of $75,000, we did not 
reduce your tax very much percentagewise, but we still allow that 
person to have $2,000 more. If they have four kids and they can send 
their kids to college, that will help them make that decision. People 
will be able to make that decision, not Government. To me, that is very 
profamily.
  We do some other things. We have some IRA enhancement so people can 
be encouraged to save. We have some inheritance tax changes so people 
can be encouraged to build a small business and pass that on to their 
children and grandchildren. There are some very positive things in this 
bill that I think would be supported and should be supported by both 
Democrats and Republicans, and we do it in a responsible fashion.
  Mr. President, I have been here for 15 years and we have never voted 
for a balanced budget. We have never voted for the implementing 
legislation to make it happen. Now we are talking about doing it.
  Granted, the White House does not want to participate. They do not 
want it to happen. But we are really serious 

[[Page S17082]]
about making it happen. We want to balance the budget.
  To me, this battle is not about who wins, Democrats or Republicans. 
It is who wins as far as our children are concerned. Are we to continue 
piling up debt after debt after debt?
  The President's budget, according to CBO, has $200 billion deficits 
as far as the eye can see. For 7 years, 10 years, it is over $200 
billion and climbing. That is not acceptable. That is not realistic. It 
needs to be changed.
  We are trying to convince the President he is going to have to 
negotiate with us to get us to a balanced budget. He says he is for a 
balanced budget; he just does not have one. We are producing one, and 
hopefully in the next couple of days we will vote on one.
  Mr. President, I am optimistic. I hope the President and his advisers 
would quit saying ``what makes me look better in the polls'' instead of 
saying what is right for America. I know some of the President's 
advisers, and I know they know we can never ever get to a balanced 
budget unless we start curbing the growth of entitlements, which is 
about $1 trillion out of a budget today that is $1.5 trillion. They 
know you cannot say we are going to balance the budget and only work on 
a third of the budget. They know you have to work and really look at 
the entire budget, and that is what we are trying to do.
  So I urge the President--I hope we send the President a short-term 
spending bill tonight. I believe the House will be taking up one soon. 
That bill will be a continuation--it will be a short-term spending 
bill, and it will also have language that we should balance the budget 
with real economics by the year 2002.

  I hope the President receives that bill tonight. I expect he will 
receive that bill tonight, and I hope he will sign it. Thousands of 
people can go back to work and we can go back to work and we can finish 
our business, and that business should include balancing the budget. To 
me, that is not a victory for Republicans or Democrats; it is a victory 
for Americans. That is what we should be doing. That is what this 
Congress has been working on for the most part of this year, and now it 
is coming to a crisis point; it is coming to a head. Now is the time to 
do it. In my opinion, if we send the President a clean CR with language 
that we should be balancing the budget in 7 years, he should sign it, 
and I hope he will.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee.

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