[Congressional Record Volume 141, Number 182 (Thursday, November 16, 1995)]
[House]
[Pages H13138-H13139]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            THE REAL DEFAULT

  (Mr. SCARBOROUGH asked and was given permission to address the House 
for 1 minute and to revise and extend his remarks and to include 
therein extraneous material.)
  Mr. SCARBOROUGH. Well, well, well, there they go again. But if we 
want to talk about something that has gotten out into the public, it is 
the fact that the Democrats have shamelessly been demagoguing on 
Medicare to try to scare senior citizens.
  Read the Washington Post this morning. It tell you what the real 
deficit is. It says, it is a deficit in leadership on the President's 
part and on the House Democrats' part. The Post says, the Democrats, 
led by the President, choose instead to present themselves as 
Medicare's great protectors. They have shamelessly used the issue, 
demagogued on it, because they think that is where the votes are, and 
that is what the President is still doing this week.
  If the Democrats play the Medicare card and win, they will have set 
back for years, for the worst of political reasons, the very cause of 
rational government in behalf of which they profess to be behaving. 
This has finally come out in the open. They know the President's plan 
does the same thing as our plan. It is indefensible, and the American 
people, and even the Washington Post, has caught on.
  By the way, read the front page. Robert Rubin is now raiding the 
Federal retirees' trust fund to get out of this crisis. That is the 
real shame.

               [From the Washington Post, Nov. 16, 1995]

                            The Real Default

       The budget deficit is the central problem of the federal 
     government and one from which many of the country's other, 
     most difficult problems flow. The deficit is largely driven 
     in turn by the cost of the great entitlements that go not to 
     small special classes of rich or poor but across the board to 
     almost all Americans in time. The most important of these are 
     the principal social insurance programs for the elderly, 
     Social Security and Medicare. In fiscal terms, Medicare is 
     currently the greatest threat and chief offender.
       Bill Clinton and the congressional Democrats were handed an 
     unusual chance this year to deal constructively with the 
     effect of Medicare on the deficit, and they blew it. The 
     chance came in the form of the congressional Republican plan 
     to balance the budget over seven years. Some other aspects of 
     that plan deserved to be resisted, but the Republican 
     proposal to get at the deficit partly by confronting the cost 
     of Medicare deserved support. The Democrats, led by the 
     president, chose instead to present themselves as Medicare's 
     great protectors. They have shamelessly used the issue, 
     demagogued on it, because they think that's where the votes 
     are and the way to derail the Republican proposals generally. 
     The president was still doing it this week; a Republican 
     proposal to 

[[Page H 13139]]
     increase Medicare premiums was one of the reasons he alleged for the 
     veto that has shut down the government--and never mind that 
     he himself, in his own budget, would countenance a similar 
     increase.
       We've said some of this before; it gets more serious. If 
     the Democrats play the Medicare card and win, they will have 
     set back for years, for the worst of political reasons, the 
     very cause of rational government in behalf of which they 
     profess to be behaving. Politically, they will have helped to 
     lock in place the enormous financial pressure that they 
     themselves are first to deplore on so many other federal 
     programs, not least the programs for the poor. That's the 
     real default that could occur this year. In the end, the 
     Treasury will meet its financial obligations. You can be 
     pretty sure of that. The question is whether the president 
     and the Democrats will meet or flee their obligations of a 
     different kind. On the strength of the record so far, you'd 
     have to be on flight.
       You'll hear the argument from some that this is a phony 
     issue; they contend that the deficit isn't that great a 
     problem. The people who make this argument are whistling past 
     a graveyard that they themselves most likely helped to dig. 
     The national debt in 1980 was less than $1 trillion. That was 
     the sum of all the deficits the government had previously 
     incurred--the whole two centuries' worth. The debt now, a 
     fun-filled 15 years later, is five times that and rising at a 
     rate approaching $1 trillion a presidential term. Interest 
     costs are a seventh of the budget, by themselves now a 
     quarter of a trillion dollars a year and rising; we are 
     paying not just for the government we have but for the 
     government we had and didn't pay for earlier.
       The blamesters, or some of them, will tell you Ronald 
     Reagan did it, and his low-tax, credit-card philosophy of 
     government surely played its part. The Democratic Congresses 
     that ratified his budgets and often went him one better on 
     tax cuts and spending increases played their part as well. 
     Various sections of the budget are also favorite punching 
     bags, depending who is doing the punching. You will hear it 
     said that someone's taxes ought to be higher (generally 
     someone else's), or that defense should be cut, or 
     welfare, or farm price supports or the cost of the 
     bureaucracy. But even Draconian cuts in any or all of 
     these areas would be insufficient to the problem and, 
     because dwelling on them is a way of pretending the real 
     deficit-generating costs don't exist, beside the point as 
     well.
       What you don't hear said in all this talk of which programs 
     should take the hit, since the subject is so much harder 
     politically to confront, is that the principal business of 
     the federal government has become elder-care. Aid to the 
     elderly, principally through Social Security and Medicare, is 
     now a third of all spending and half of all for other than 
     interest on the debt and defense. That aid is one of the 
     major social accomplishments of the past 30 years; the 
     poverty rate for the elderly is now, famously, well below the 
     rate for the society as a whole. It is also an enormous and 
     perhaps unsustainable cost that can only become more so as 
     the baby-boomers shortly begin to retire. How does the 
     society deal with it?
       The Republicans stepped up to this as part of their 
     proposal to balance the budget. About a fourth of their 
     spending cuts would come from Medicare. It took guts to 
     propose that. You may remember the time, not that many months 
     ago, when the village wisdom was that, whatever else they 
     proposed, they'd never take on Medicare this way. There were 
     too many votes at stake. We don't mean to suggest by this 
     that their proposal with regard to Medicare is perfect--it 
     most emphatically is not, as we ourselves have said as much 
     at some length is this space. So they ought to be argued 
     with, and ways should be found to take the good of their 
     ideas while rejecting the bad.
       But that's not what the president and congressional 
     Democrats have done. They've trashed the whole proposal as 
     destructive, taken to the air waves with a slick scare 
     program about it, championing themselves as noble defenders 
     of those about to be victimized. They--the Republicans--want 
     to take away your Medicare; that's the insistent PR message 
     that Democrats have been drumming into the elderly and the 
     children of the elderly all year. The Democrats used to 
     complain that the Republicans used wedge issues; this is the 
     super wedge. And it's wrong. In the long run, if it succeeds, 
     the tactic will make it harder to achieve not just the right 
     fiscal result but the right social result. The lesson to 
     future politicians will be that you reach out to restructure 
     Medicare at your peril. The result will be to crowd out of 
     the budget other programs for less popular or powerful 
     constituencies--we have in mind the poor--that the Democrats 
     claim they are committed to protect.
       There's a way to get the deficit down without doing 
     enormous social harm. It isn't rocket science. You spread the 
     burden as widely as possible. Among much else, that means 
     including the broad and, in some respects, inflated middle-
     class entitlements in the cuts. That's the direction in which 
     the president ought to be leading and the congressional 
     Democrats following. To do otherwise is to hide, to lull the 
     public and to perpetuate the budget problem they profess to 
     be trying to solve. Let us say it again: If that's what 
     happens, it will be the real default.

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