[Congressional Record Volume 141, Number 183 (Friday, November 17, 1995)]
[House]
[Pages H13182-H13206]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         SEVEN-YEAR BALANCED BUDGET RECONCILIATION ACT OF 1995

  Mr. SABO. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Minnesota [Mr. Vento].
  (Mr. VENTO asked and was given permission to revise and extend his 
remarks.)
  Mr. VENTO. Mr. Speaker, I rise in opposition to this reckless 
restructuring of our priorities.
  Mr. Speaker, I rise in strong opposition to this extreme Republican 
budget reconciliation conference report. The bill represents a reckless 
restructuring of national priorities which advocates a shift of 
resources and commitment away from working American families and 
granted to the most affluent segments of our society. This Republican 
Gingrich reconciliation bill abandons the goal of equality of social, 
health, education, and economic responsibility for members of our 
American society.
  I have supported in the past and will continue to support responsible 
deficit reduction policies. I voted for the alternative coalition 
budget, a difficult vote but appropriate, which would reach a budget 
surplus in 7 years, end corporate subsidies, and permit higher spending 
on crucial national investment priorities without lavishing tax breaks 
on the wealthy. I supported the 1993 reconciliation measure which has 
to date exceeded its targets; with 3 straight years of deficit 
reduction resulting in the lowest annual deficit as a percent of GDP 
since the late 1970's. I certainly do not support the Republican 
reconciliation bill, which slashes proven programs that ensure economic 
and health security for working Americans, families, and seniors in 
order to finance tax breaks principally for investors, corporations, 
and affluent individuals. The legislation includes deep cuts and new 
fees for student loans, and deep cuts in Medicaid and Medicare. 
Further, it includes provisions to put American pensions at risk and 
promote environmental degradation. This measure disassembles the 
Federal commitment and structure that has built and empowered our 
Nation to unprecedented economic and social achievement.
  At the same time this reconciliation measure cuts deeply $270 billion 
from Medicare, the bill gives $245 billion in tax breaks to the 
wealthiest members of our society and corporate America. In fact, the 
wealthiest 12 percent of American families, those with an income over 
$100,000, will get 45 percent of the tax break benefits, over $110 
billion in tax breaks. The Republicans continue to insist on a cut in 
the capital gains tax rate for big investors, a reduction of the 
alternative minimum tax for corporations, and a limited child tax 
credit which is actually denied to 33 percent of kids because they are 
low income. In addition, the Republican Gingrich reconciliation bill 
cuts the existing earned income tax credit by over $32 billion, thereby 
producing a tax increase for the working poor. In fact, the Joint 
Committee on Taxation reported that families with under $30,000 in 
income will actually pay more in taxes--that's right, pay more under 
the Republican Gingrich tax break measure. Some break--it's more on the 
backs of hard-working families.
  Policymakers who are serious about deficit reduction do not push a 
package which includes $245 billion in tax breaks, skewed to the 
wealthiest in our society. Not only is it unwise to reduce revenues in 
this time of fiscal constraints, but it is unfair to dole out benefits 
to the well-heeled when everyone else in society is being told they 
must sacrifice.
  The new Republican Gingrich majority in the House has made the 
Medicare and Medicaid Programs its target for nearly 50 percent of the 
total spending cuts contained in the Republican reconciliation package. 
Medicare is one of our Nation's most successful programs. It was 
established over 30 years ago as a national commitment to assure 
seniors health care coverage. The Republican Gingrich scheme is going 
to threaten the integrity of this program and make seniors pay more for 
less health care coverage. With $270 billion in cuts, overall Medicare 
spending will be cut by a cumulative $6,795 per senior over the next 7 
years, meaning that in 2002 there will be $1,700 less in Medicare 
dollars per senior in that year alone. Even the trustees of the 
Medicare trust fund strongly oppose the Republican plan because the 
extensive cuts go far beyond program reform or trust fund stability. 
The Republican plan is not designed to save Medicare, it is a scheme to 
let Medicare wither on the vine.
  In the name of balancing the budget, the Republican reconciliation 
bill not only creates a social deficit in our Nation, but also creates 
a serious environmental deficit. This legislation amounts to a 
wholesale degradation of America's natural resource legacy, evoking the 
tradition of 19th century robber barons who exploited the West. We see 
the imprint of special interests, including the mining, oil, and gas 
industries, throughout the Republican reconciliation measure. In 
particular, the decision to destroy forever the Arctic National 
Wildlife Refuge [ANWR] by permitting oil and gas exploration and 
drilling demonstrates the true spirit of the Republican majority. ANWR 
is the last great piece of American wilderness and opening the refuge 
area to drilling will assure destruction of this pristine wilderness. 
Folding this measure into this bill is a sleight of hand way to 
circumvent the process and force this wholesale policy change upon the 
American public without open debate on its merits.

  The question really is about the direction our Nation should be 
heading and what values we want to cultivate to enhance our future. 
This Republican Gingrich reconciliation bill reveals a significant 
change in national priorities and values under the GOP leadership. 
Republicans' misplaced priorities are to pull back 

[[Page H13183]]
from proven, albeit not perfect, policies for health care, housing, 
education, and the environment in order to give tax breaks to the 
wealthy and placate special interests. We in Congress should do better, 
surely we should know better. A balanced budget mantra does not 
disguise the true intent or effect of the Republican reconciliation 
bill, which polarizes and balkanizes our society, reneging on the basic 
social contract and abandoning families and the very programs that have 
permitted us to take care of those who are vulnerable and in need, in 
essence to take care of one another when we face crisis in our lives.
  Apparently the GOP thinks that if they claim to balance the budget, 
anything goes, but they are wrong--the American people care. The 
American people do not want an abandonment of valued principles and 
policies which allow the most vulnerable in our society to live with 
dignity. They also do not want a redistribution of wealth which makes 
it more difficult for working American families to get ahead while 
giving special benefits to corporations and special interests. This 
Republican reconciliation bill is an affront to all who believe in the 
concept of community and the commitment of the Federal Government to 
protect Americans' health, environment, and economic security. I urge 
my colleagues to vote against this bill.
  Mr. KASICH. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Ohio [Mr. Hobson].
  (Mr. HOBSON asked and was given permission to revise and extend his 
remarks.)
  Mr. HOBSON. Mr. Speaker, I rise in support of this bill.
  It's difficult leading a majority. People pay attention to the 
promises you make--and they expect you to keep them.
  The promise to balance the Federal budget has been perhaps the 
hardest political promise to keep. The President hasn't been able to do 
it. And Congress hasn't been able to do it in 26 years. To be fair, 
past Democrat and Republican leaders backed away from the challenge.
  Despite repeated promises, the loud and convincing voice of special 
interests always have carried the day. But today we are looking toward 
the future. We are listening to the quieter voices of our children, and 
hearing what we have always known: That this generation has a 
responsibility to the next.
  We began working toward this moment in 1992--the year President 
Clinton was supposedly elected as an agent of change. Although the 
President was unable to fulfill his promise to balance the budget in 5 
years--or at all--John Kasich was working behind the scenes on a 
balanced budget called cutting spending first. By 1994, the call for 
change had grown, and voters elected a new, Republican majority to 
Congress.
  From that majority came extraordinary leadership. Our budget chairman 
drives this process with eagerness and integrity. Our Speaker provides 
a clarity of vision and purpose that unites moderates and conservatives 
in a single agenda for our American future.
  Today our agenda is clear. I look forward to joining the majority of 
you in fulfilling our responsibility--and our promise--to the American 
people.
  Vote ``yes'' on the Balanced Budget Act.
  Mr. KASICH. Mr. Speaker, I yield such time as he may consume to the 
gentleman from California [Mr. Gallegly].
  (Mr. GALLEGLY asked and was given permission to revise and extend his 
remarks.)
  Mr. GALLEGLY. Mr. Speaker, I stand in strong support of this bill.

                              {time}  1445

  Mr. KASICH. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Missouri.
  (Mr. EMERSON asked and was given permission to revise and extend his 
remarks.)
  Mr. EMERSON. Mr. Speaker, I rise in strong support of the balanced 
budget proposition before the House.
  Mr. SABO. Mr. Speaker, I yield such time as she may consume to the 
distinguished gentlewoman from New York [Mrs. Maloney].
  (Mrs. MALONEY asked and was given permission to revise and extend her 
remarks.)
  Mrs. MALONEY. Mr. Speaker, I rise in opposition to the bill.
  Mr. Speaker, I rise today in opposition to the Omnibus Budget 
Reconciliation Act of 1995.
  Change is needed in the Federal Government. Many programs need to be 
modernized. But we need fair change. And there is nothing fair about 
this budget.
  Simply put, the painful cuts in this budget disproportionately hurt 
the old, the sick, the poor, the disabled, low-income children and, to 
an extreme degree, urban areas.
  During my first term in Congress, I sat on the Banking, Finance, and 
Urban Affairs Committee. I sit on that same committee now. Only now 
it's called Banking and Financial Services. It's as if urban areas are 
no longer a part of America. And this budget reflects that attitude. No 
place in the country will be hit harder by this budget than New York 
City.
  Make no mistake: if the Medicare and Medicaid plans in this bill were 
signed into law, health care for the poor and the elderly will be 
severely affected.
  The Medicare trust fund needs $90 billion to remain solvent for the 
next 10 years. But this budget tries to solve a $90 billion problem 
with a $270 billion solution. It will double premiums over the next 7 
years for some seniors, and sextuple them for others.
  Recently, Speaker Gingrich told a group of insurance lobbyists that 
he expects Medicare to ``wither on the vine,'' and said he wouldn't try 
to ``get rid of it'' right now because it wasn't ``politically smart.''
  Senate Majority Leader Dole bragged in a recent campaign speech that 
he voted against creating Medicare in 1965 because he knew it wouldn't 
work.
  The views of the leaders of the House and Senate are way out of the 
mainstream. So, too, are their draconian solutions to what ails 
Medicare.
  This budget also cuts $170 billion from Medicaid. Tragically, this 
budget seeks to end the guarantee of universal health care for our 
poorest citizens. And one out of every four children in the United 
States is born into poverty.
  The economic consequences for New York City of the Medicare and 
Medicaid cuts are catastrophic. Over the next 7 years, Medicare and 
Medicaid cuts alone will cost the city of New York more than $24 
billion. Mount Sinai and Beth Israel Medical Centers will, combined, 
lose $1 billion in Medicare and Medicaid funding. New York City could 
lose up to 140,000 jobs. Our local economy simply cannot absorb cuts of 
that magnitude.
  New York City's most vulnerable children will also be drastically 
impacted by cuts to nutrition and protection programs which help them 
survive extreme poverty, neglect, abuse, and deprivation. The extremely 
successful School Lunch Program will be among the programs cut. So will 
the earned income tax credit, which will be reduced under this budget 
to effectively raise taxes by $400 dollars on the working poor.
  All tolled, cuts to programs assisting New York City's children will 
be impacted by a staggering $25 billion over 7 years.
  These cuts might be more palatable if they were absolutely necessary 
to balance the budget in 7 years, which is a sincere and honorable 
objective. But they are not necessary. They are reflections of the new 
majority's skewed priorities.
  They're making these cuts because they are increasing defense 
spending by $8 billion more than even the Pentagon requested.
  They're making these cuts because they refuse to cut $30 billion in 
corporate welfare that even the Republican House Budget Committee 
chairman says do not help the economy.
  And they're making these cuts because they want a $245 billion tax 
cut that this country simply cannot afford right now. Only the working 
poor will be asked to pay more in taxes.
  Mr. Speaker, there has been much rhetoric in this debate about 
balancing the budget for our children and grandchildren. But you cannot 
save children in the future by abandoning children in the present. This 
budget disinvests in all the things that prepare our children for a 
better future: nutrition, education, health care and protection from 
abuse and neglect.
  This is not a thoughtful budget; it is a reckless budget. It is not a 
budget that fairly distributes the pain; it is a budget which punishes 
those least capable of absorbing the pain.
  Mr. Speaker, I favor and have voted for reform and restructuring of 
our Government. But the restructuring in this bill is shortsighted, 
unfair, and unwise.
  America did not become the greatest country on earth by deserting 
seniors in their time of need. Or by disinvesting in our children's 
education. Or by raising taxes on people who don't have two dimes to 
rub together. Or by denying health care and nutrition to our neediest 
citizens, especially our innocent children.
  The American people believe in fairness. They will not suffer this 
budget lightly. Because there is nothing fair about this budget.
  Mr. SABO. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Maryland [Mr. Wynn].
  (Mr. WYNN asked and was given permission to revise and extend his 
remarks.)
  Mr. WYNN. Mr. Speaker, I rise in opposition to this mean-spirited 
notion of a budget.
  Mr. SABO. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Massachusetts [Mr. Olver], a committee member.
  (Mr. OLVER asked and was given permission to revise and extend his 
remarks.)

[[Page H13184]]

  Mr. OLVER. Mr. Speaker, I rise in opposition to the reconciliation 
legislation.
  Mr. Speaker, the United States has the widest gap in the 
industrialized world between those who can readily afford housing, 
education, health care, and retirement security and those who must 
struggle every day to get by.
  And the gap is growing faster in the United States than in any of the 
other G-7 countries.
  Into this scenario, step congressional Republicans and the President 
with competing approaches to balance the budget--approaches which have 
a diametrically opposed set of priorities.
  Republicans are for B-2 bombers and ballistic missile defense systems 
we don't need; in total, $33 billion in increased defense spending over 
what the Pentagon says it needs to defend the nation.
  Republicans are also for big tax breaks to those earning over 
$100,000 a year; $245 billion in tax breaks in all.
  The Republicans can only fit these tax breaks into their budget plan 
by taking away housing, nutrition, health care, and educational and 
economic opportunities from the very Americans who are struggling to 
build a better life for themselves.
  To begin with, their budget takes over $400 billion in health care 
away from seniors and poor families by draconian cuts in Medicare and 
Medicaid, cuts that are not part of any kind of constructive reform of 
the Health care system which would allow it to accommodate reductions 
of this magnitude.
  Other harmful cuts to families come in a variety of critical areas: 
$30 billion to veterans' benefits, including veterans' health care; 
nearly $20 billion in child nutrition; $15 billion in Federal workers' 
pensions; over $10 billion in agriculture support; $10 billion in 
student loans; $10 billion in winter heat assistance for elders and the 
poor; $10 billion in vocational and adult education; $3 billion in mass 
transit assistance; and $3 billion to keep our children's schools safe 
and drug-free--just to name a few.
  Republicans also want to scale back the earned income tax credit 
[EITC] to the working poor by close to $32 billion, pushing low-wage 
earning families, who shouldn't be paying taxes in the first place, 
back into poverty, ensuring that they will no longer be able to make it 
on their own.
  The President, on the other hand, in outlining his balanced-budget 
plan, has made it abundantly clear that he stands for a different set 
of priorities--priorities that lie 180 degrees from where Republicans 
stand.
  The President is for student loans, safe schools, school lunches, 
health care for veterans, job opportunities for young adults, and 
income and health security for our Nation's elders.
  We Democrats think these things are more important than giveaways to 
the wealthiest 10 percent of Americans, so we would not give big tax 
cuts, and we would hold down defense spending.
  We believe in helping low-income, working families gain back some 
ground on their slipping standards of living.
  But the Republicans don't care about that. They're not the least bit 
concerned about the growing gap between the haves and the have nots. 
They would make the gap much worse, taking us in the opposite direction 
from where we should be going.
  Thus, for its terribly misplaced priorities, I oppose this 
reconciliation bill. For our future's sake, we should all oppose it.
  Mr. SABO. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan [Mr. Bonior], the distinguished minority whip.
  Mr. BONIOR. Mr. Speaker, this debate is not about who got to sit in 
the front or the back of the plane. It's not even about whether we 
balance the budget in 7 years, 8 years, or 10 years. The American 
people think this numbers debate is petty.
  This debate is about the values we believe in . . . and the values we 
uphold . . . as we work to get to a balanced budget.
  There's a reason why 75 percent of the American people oppose this 
budget today.
  They don't want to cut Medicare to pay for tax breaks for the 
wealthy. They don't want to let Medicare whither on the vine.
  They don't want to take college loans from kids . . . roll back 25 
years of progress on the environment . . . or raise taxes on working 
families. But that is the price this budget asks us to pay.
  This budget is so extreme that Speaker Gingrich had to manufacture a 
crisis . . . and shut down government . . . to try to force the 
President to accept it. Well, we know the President won't sign this 
budget.
  Mr. KASICH. Mr. Speaker, point of order. Mr. Speaker, I would ask my 
colleagues to show the gentleman respect, let him make his talk, and 
show each other a little respect here. Let him finish.
  Mr. SABO. I thank the gentleman from Ohio.
  Mr. BONIOR. I would make a similar request when the gentleman from 
this side of the aisle speak; that we, in addition, show them the 
respect to have their arguments made in this Chamber.
  The SPEAKER pro tempore (Mr. Boehner). The gentleman from Michigan 
[Mr. Bonior] may proceed.
  Mr. BONIOR. Mr. Speaker, I would ask the Chair, do I have any time 
remaining?
  The SPEAKER pro tempore. The gentleman from Michigan has 1\1/2\ 
minutes remaining.
  Mr. BONIOR. Mr. Speaker, the President won't sign a budget that 
dismantles Medicare. And he won't sign a budget that takes opportunity 
away from our kids.
  The American people oppose the Gingrich budget because it does not 
reflect our values.
  Six days from now, America will celebrate Thanksgiving. And we'll all 
give thanks that we live in a nation where our parents don't have to 
beg to see a doctor, where every child has the chance to go to school, 
and where we care enough about the environment to protect it. And we 
should not undermine that progress here today. We all know it's not 
easy to balance the budget.
  But we reject the idea that we have to ask seniors to sacrifice their 
health care--and kids to sacrifice their opportunity--just so we can 
give a tax break to people who don't really need one.
  Mr. Speaker, we must work to balance the budget. But the Gingrich 
budget is too extreme, too short-sighted, and too out of step with the 
values of the American people. And I urge my colleagues to reject it.
  Mr. KASICH. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas [Mr. Armey] the very distinguished majority leader.
  Mr. ARMEY. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, I had not anticipated that I would speak twice on this 
subject. Earlier I made the point this is big change. It is serious 
business. It is very important, and yes, in fact, it will make a big 
difference in the lives of the American people for generations to come.
  When we face a change of this size it can be unnerving, and yes, 
there are those of us committed to this change that are concerned that 
perhaps the public might not understand, but the fact is that there are 
others who are equally concerned that the public will understand. That 
is why we are getting all this mean-spirited, extreme political 
rhetoric.
  The time has come for us to get serious about the vote we are about 
to make, put aside any concerns we might have about the political 
rhetoric, understand the public does understand. To illustrate that 
point, let me read a note that was passed to a congressional aide on 
the Amtrak train this morning by a woman who had overheard a concerned 
conversation regarding how grave this moment is in the lives of 
America.
  This woman said: ``Dear sir: I am a Federal employee. Please tell the 
Republicans to stick to their guns. We need a balanced budget.'' Put 
aside your concerns. The public knows and the public appreciates what 
we are daring to do on behalf of their children. Do not be bothered by 
the extreme, mean-spirited, personal political rhetoric.''
  Mr. SABO. Mr. Speaker, I yield 4 minutes to the gentleman from 
Missouri [Mr. Gephardt], the distinguished minority leader.
  (Mr. GEPHARDT asked and was given permission to revise and extend his 
remarks.)
  Mr. GEPHARDT. Mr. Speaker, it should come as no surprise that I 
oppose this budget. I think that when we take one bad budget and 
reconcile it with another bad budget, we wind up with a bad budget.
  The Republicans say that this bill is about balancing the budget for 
our children and our grandchildren, but the question we have to ask 
today and in the days ahead is not whether we have balanced the budget 
in 5 or 6 or 8 years. The question is whether we have the right 
balanced priorities in the way that we have balanced the budget: Is it 

[[Page H13185]]
fair? Is it just/ Does it create a sense of equity and justice in our 
country, so that the people who live with the consequences of the 
budget will accept our decision?
  In my view, this budget is not that. It asks too much, in my view, of 
people in the middle class and people trying to get into the middle 
class, the people that are really struggling in this country to get 
ahead, people who have almost given up on the American dream. It does 
too much to give privileges and breaks to people, frankly, who have 
done well, and in most cases are not even asking, are not even asking 
today to be advantaged.
  I know my friends on this side will disagree, but in our view and 
lots of people's views, these cuts are deeply damaging to the health 
care system in this country, but more importantly, damaging to people. 
We believe that if the cuts go through as they are in the budget now in 
Medicaid and Medicare, that one-fourth of the hospitals in this country 
will close. They will close in the wrong places, the places we can 
least afford to have them close. Almost all of the hospital 
associations in the country have today said these cuts are too deep.

  We think the increase in the premiums and the other changes in 
Medicare are unfair to senior citizens. We can say a lot of seniors 
have a lot of money, but a lot of them do not. Millions of widows live 
on their Social Security alone.
  I met woman in Michigan who told us at one of the events there that 
she lives on $9,000 a year she gets from her Social Security, and that 
a doubling of her premium would devastate her monthly situation. We 
have to think about that person. There are flesh-and-blood human beings 
at the other end of this budget.
  I have a family in my district whose son, in repairing the roof at 
age 15, fell off the roof, broke his neck. Now he lives in a 
wheelchair. He has to be fed by his parents. They both work. They did 
not have medical insurance. They came to our office so they could get 
him onto Medicaid, so he could be put for long periods of time in a 
nursing home, so he could be taken care of.
  If the program was block granted and we put this choice in front of 
State legislatures and cut it by a third, do we take care of the 
seniors? Do we take care of the disabled? Do we take care of the 
children? It is an impossible choice, and one that we should not be 
putting on the States.
  School lunches. I know it has been changed and hopefully made better. 
I sat with a woman in Ohio and she told me how she has had three 
children on school lunches while she could go back to school. She said, 
``I am about now to go back to work.'' She said, ``When I get that job, 
because I could go to school and I had the school lunch program to help 
me, now I am going to be able to get my kids off of school lunch and be 
able to have it for somebody else.''
  So I guess when we say we are balancing this for our children and our 
grandchildren, we have to ask an additional question: Are we balancing 
this budget in a way that is good for our children and our 
grandchildren?
  When it comes to taxes, as I have said here on the floor before, this 
budget takes my breath away. How in the name of common sense and 
decency can we say to someone who is earning $25,000 a year, who is 
struggling to get off of welfare and into the work force, that their 
taxes will go up by, about, we think $300 a year on average, while we 
are giving a $15,000 tax break to somebody who is earning $300,000 or 
$500,000 a year? It is unfair.
  In conclusion, Mr. Speaker, this budget is unbalanced in its 
priorities. It is unfair to the people in the middle class and people 
trying to get into the middle class. Ultimately the economic estimates 
that are on, and we have had this raging debate the last few days about 
7 years and the economic estimates, but in truth we all know this is a 
1-year budget. The estimates of what will happen in 7 years depends 
upon the fairness and the equity and the decency of what we do in this 
budget.
  The President will veto this budget. Then we must come back. After 
that veto, the real work must begin. Then we must sit down together, as 
Americans who are all interested in the future of this country. We must 
work overtime, and as hard as humanly possible, to come up with an 
agreement. This Government runs by agreement and by consensus, not by 
dictation. We must come to an agreement.
  I hope and pray that it will be a budget that does not overly damage 
important programs like Medicare and Medicaid, does not damage the 
education of our children through too severely cutting student loans 
and school lunches, and finally, that will be fair to the middle class 
more than it is fair to the people who have it made at the top.
  If at the end of that we can say we have done that, then, truly, we 
will leave balanced this budget for our children and our grandchildren. 
Vote no on this budget today.
  Mr. HOBSON. Mr. Speaker, a lot of people promised they would balance 
the budget. Nobody believed that it could be done, but one person 
believed and one person persevered. He persevered for the future of our 
children.
  Mr. Speaker, I yield the balance of our time to the gentleman from 
Ohio, John Kasich, my fellow Buckeye, and the chairman of the Committee 
on the Budget.

                              {time}  1500

  Mr. KASICH. Mr. Speaker, let me say, I am glad I do not have to ask 
for unanimous consent to use these charts, because I think there would 
be more objection over here than there would be over there. I do not 
know, I say to the gentleman from Missouri [Mr. Gephardt], if you have 
this problem. Our people feel so passionately, they have all written my 
speech in big pieces, coming down and telling me how they feel. It has 
been a good debate. We keep saluting one another.
  The gentleman from Minnesota [Mr. Sabo] cannot help himself but to do 
right. He is a good man, and he deserves to be complimented because, at 
the end of the day, he cannot help himself. He has to do the right 
thing for our country, and I think he is a great guy.
  Well, we have the gentleman from New York [Mr. Solomon], the 
gentleman from Texas [Mr. Archer] left the floor, and I do not know 
where my buddy, the gentleman from Louisiana [Mr. Livingston] is, and 
right here is the gentleman from Illinois [Mr. Hyde], and I can go on 
and on.
  This stays for them, the warriors who never thought this day would 
come. These gentlemen, and the gentleman from Florida [Mr. Young], it 
is a little present for all of them, what we are going to do here 
today.
  They were the ones that were out there first, and they deserve an 
awful lot of credit for their hard work.
  Mr. Speaker, the American people are watching this debate while the 
Government is closing down, and they were out in California and they 
stopped a guy on a bicycle, and they said, ``Did you know the 
Government closed down?'' He said, ``Look, I am riding my bike; do not 
bother me.'' He says, ``It is just those politicians.''
  I think that both sides would agree with this. This is not business 
as usual. Frankly, both sides are fighting today, last week, and 
probably tomorrow, on deeply held principles. I mean, frankly, what the 
public does not like is when the politicians compromise their 
fundamental principles and then it becomes business as usual.
  I deeply respect the passion with which you hold your views. I do not 
have any doubt that you are sincere in believing that you need to stand 
up for some folks. We are the same way. So, to the American people, 
understand this debate over principle is good. It is not business as 
usual; it is good because, for the first time in my lifetime, we are 
trying to make sure that this country realizes its destiny.
  Now, folks, in the history of America, in the very beginning, 1776, 
all the way until now, guess what? We have had these fights over 
principles consistently. The North fought the South; it was about 
principles. We know about the Vietnam war. The fights in this Chamber 
were about principles.
  However, I would inquire of my colleagues if they know what the 
bottom line has always been. At the end of the day, the people of this 
House, as Tip O'Neill said, were good people; the people of the country 
were good at the end of the day. We were able to stand on principle and 
at the end of the day reach some agreement and move the country 
forward, and we will at some point do it again.

[[Page H13186]]

  Mr. Speaker, to the American people, this is what you sent us to do 
here, to stand up for our heartfelt beliefs.
  To my colleagues on the Republican side, the Committee on the Budget 
members, you started it. My colleagues started it back last December. 
God bless them all for that they did. For my colleagues here, who have 
gone home, who had to walk across hot coals, the Washington Post was 
written for you. Read it. Send it to your wife, send it to your 
husband, send it to your children; because it is about principle, and 
they understand that we are making hard decisions that need to be made.

  Now, our plan is described as extreme. Look, going from $443 billion 
on Medicaid to $791 billion, that is not extreme; that is a significant 
increase. Medicare going from $926 billion to $1.6 trillion, that is 
not extreme; that is an increase. Going from $492 billion in welfare to 
$878 billion, an increase over the next 7 years, that is not extreme; 
that is an increase.
  The total Federal spending going from $9.5 trillion over the last 7 
years to $12 trillion, a $2.5 trillion increase in spending, that is 
not extreme. In fact, many Americans are going to say, why is it going 
up so much?
  Let me say to my colleagues, we are going to have a lot of debate 
here, and I want to say to my colleagues on the Democratic side, Mr. 
Panetta asked me the other day, why? Why are you doing this? I said, 
because, Mr. Panetta, we think this is the last best chance to do it.
  We look into the future, 15 years down the road, and we wonder, if 
the country continues to slide economically, as the newspaper pointed 
out, when children buy a home, adult parents buy a home in 15 years, 
what are they going to buy, a shack? Or are they going to be able to 
buy what we bought? Are they going to be able to afford a college 
education? Are there going to be decent jobs left within the boundaries 
of this country?
  Mr. Speaker, I say to my colleagues, we are sincerely convinced that 
if we do not forgo that extra $1 trillion in spending, we will collapse 
the country. We believe the country will melt down economically. And as 
I have said before, in good times, the rich get richer; in bad times, 
the rich get richer.
  The only time the poor get rich is when the economy grows. That is 
our sincere conviction.
  This is not about politics, this is not about the Republican Party, 
it is not about Newt, it is not about me, it is not about Gephardt, it 
is not about the President. It is about all of us standing on principle 
to deliver what we believe is right for the United States of America, 
and at the end of the day, as we have through all of these terrific and 
tremendous arguments over principle, we will figure it out. We will 
figure it out.
  I have one last chart I have to show you, because this one touched 
me. I was in Illinois, and a group of high school kids came to see me 
on a Saturday afternoon. There was a miracle going on. Northwestern was 
winning another football game.
  This is a check. It is a little check, and I want to read it. It is 
1996, U.S. Treasury, and it is written from the young people of 
America, pay to the order of the U.S. House of Representatives.
  The amount? Thank you.
  The memo? Our future is looking brighter.
  Mr. Speaker, my favorite memo, my favorite little note of these young 
people who I am told stood in their classroom and applauded when they 
heard the balanced budget amendment passed in this House, my favorite 
one here says, ``Thanks, Bro.'' That is my favorite notation.
  Look, we are going to struggle a little bit longer, we are going to 
fight a little bit more. I went to the Senate conference, and I said 
that single women with children are the most vulnerable people in our 
society, and we walk out of there with our earned income tax credit so 
that nobody will do worse, no one will do worse than the current law as 
we go into 1996. Why? Because we are compassionate in the treatment of 
people as well.
  We think balancing this budget and slowing the growth of Federal 
spending is the key to making sure that, in fact, these young people's 
future continues to look brighter.
  Mr. Speaker, God bless us all; let us pass the Balanced Budget Act of 
1995.
  Mr. MARTINI. Mr. Speaker, I rise today to share with my colleagues 
what a rare honor it is indeed to be able to vote today on such an 
historic piece of legislation. In fact, it is the embodiment of the 
principles I campaigned on just 12 months ago. The Balanced Budget Act 
of 1995 represents the very essence of what I believe in: a fiscally 
sound and responsible Federal Government that passes on a better 
America to its future generations. This truly is a defining moment in 
our Nation's history.
  The Balanced Budget Act is not a smoke and mirrors sham attempt to 
fool the electorate. This budget is a real, honest plan that offers the 
people we serve the first balanced Federal budget in a quarter of a 
century. This bill is right for New Jersey, and more importantly, right 
for America. I am proud to cast my vote in favor of it.
  All of this year we have been witnessing a debate between two 
competing visions. On one side there are the advocates of the status 
quo, and on the other, a group of legislators committed to offering 
real solutions to real problems.
  Sadly, the advocates of the status quo have only been able to offer 
us echoes of the very sentiments that put our country in the red to 
begin with. Their answers to the very real questions we must face are, 
disappointingly, more of the same. They believe more spending, more 
taxes, and more debt are the answer to our budget ills. Well, they are 
wrong.
  The taxpayers deserve better than that, Mr. Speaker. I am the last 
person to turn this debate into a rabidly partisan issue. Saving the 
future of our country should be above such partisanship. But 
regrettably, that is what our President and the Members of the other 
party have responded with. They insist on fueling the fires of 
skepticism and despair, choosing to resort to demagoguery and doomsday 
scenarios at a time when our constituents deserve more.
  I suppose this reaction could be expected at such an historic time of 
change. As we stand on the threshold of truly monumental reform, it is 
only natural to experience a certain amount of anxiety about what comes 
next. But real leadership demands that the response to this anxiety be 
hard work and commitment, not homage to the failed policies of the 
past.
  The defenders of the status quo serve as a very important and stark 
contrast to the Members of Congress who are about to cast their votes 
to solve our fiscal problems. I am ready to work in a serious, 
bipartisan fashion to obtain the real solutions we owe the people we 
represent.
  I want to offer the residents of New Jersey's Eighth Congressional 
District the much-needed change they voted for in 1992, but have so far 
been refused. They were told they would get a balanced budget, the end 
of welfare as we know it, and tax relief for middle class families. 
They have received none of them to date. I, however, am ready to 
deliver where others have failed.
  I want to balance the budget in order to relieve our children and our 
children's children of a crushing debt. I want to foster an opportunity 
society that creates jobs, lowers interest rates, and keeps the economy 
growing. On behalf of our constituents I want to knock $37,000 off of 
the price of a new home, $900 off the price of a new car, and $2,160 
off of the price of a college education. Balancing the budget is not 
only a moral imperative, but good economic policy and we should do it 
now.
  By voting ``aye'' today, I will also be working to reduce the tax 
burden on the American middle class. The size and scope of this tax cut 
has been and will continue to be a matter over which we can negotiate. 
But what a difference 2 years make, for it was only last Congress that 
the largest tax increase in American history was imposed after the 
people in power had campaigned on a tax cut for the middle class. That 
was disingenuous. The American family deserves to be allowed to spend 
more of their own money, Mr. Speaker. Passage of this tax cut 
represents more than a promise fulfilled, it is the right thing to do.
  Similarly, the people are tired of watching our misguided welfare 
system trap more and more families into a vicious cycle of poverty and 
illegitimacy. Since 1965 we have made no dent in the Nation's poverty 
rate and have watched the illegitimacy rate quadruple. Campaigning on a 
platform of changing this dismal system is not enough. After $5 
trillion and 30 years, enough is enough: we have no choice but to bring 
necessary reform to a system that needs an overhaul.
  And finally we come to the subject of Medicare. We have proposed a 
fair and reasonable plan to address a very real problem: the bankruptcy 
of the Medicare trust fund. Creating a plan to save this program was 
not easy. It was done in an effort to maximize the effectiveness of its 
provisions and minimize the impact on current beneficiaries. At all 
times during the developmental process of the bill, the goal of its 
authors was to save a Government program that serves an important and 
often very 

[[Page H13187]]
vulnerable population, not just for tomorrow, but well into the next 
century.
  The Medicare Preservation Act accomplishes this goal, yet we have 
still not seen any recognition of that fact from the other side. The 
November 16 edition of the Washington Post said it best, Mr. Speaker, 
when it said, ``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 plans 
generally.'' Sadly I must agree. In defense of the status quo, we have 
seen only politics, not leadership.
  Like many of my colleagues in this body, I have had the privilege of 
spending a lot of time recently with a group of men and women whom I 
deeply respect and admire, the veterans of our armed forces. I never 
cease to be impressed at how courageous and committed these people were 
in the face of such clear and dangerous crises to our Nation's safety. 
They fought bravely on our behalf, and were prepared to pay the 
ultimate price to keep our country safe and prosperous. They were 
successful in battle, and kept us safe from a dangerous world.
  But history has shown us that great civilizations fall victim to the 
crises from within just as often as they fall prey to the threats from 
without. Sometimes these threats are much less visible. They might not 
be tangible or have a face or a name readily associated with it. But 
that makes these threats no less real, and perhaps even more dangerous.
  The debate today is a perfect example of a very serious and deadly 
internal threat. Though it may not be apparent to Americans in their 
everyday lives, the effects of deficit spending and out of control 
growth in the Federal Government pose a very real and dangerous 
problem. We in Congress are charged with the duty of dealing with these 
problems, and this is what the debate today concerns. The inability of 
our Federal Government to get our fiscal house in order is the crisis, 
and the discipline to make the difficult but important choices that 
must be made to avert financial ruin is the only solution.
  We must rise to this occasion and meet the challenge before us. This 
may be our last chance to do it. If we fail to carry out our vital 
mission, if we allow the misinformation and distortions to defeat our 
efforts, no Congress is the near future will have the courage to try 
what we are trying. On the contrary they will cower in fear of the 
political ramifications surrounding the process of setting reasonable 
spending priorities, much to the detriment of the people they 
supposedly should be serving. I take my obligations to govern more 
seriously, and refuse to back down at this important juncture.
  Mr. Speaker, it is not difficult to figure out what the people want 
and deserve. Our constituents want a fiscally sound and responsible 
Federal Government. They don't want any more gimmicks or Washington 
doubletalk. They don't want us to look back. They just want to pass 
along to their children a future filled with prosperity and hope, not 
debt and despair. This Balanced Budget Act is the very reason I serve 
in Congress, and I will not let the President, my Democratic 
colleagues, or any of the naysayers around here deter me from the all-
important goal of balancing our budget. I will stand firm on my 
principles.
  Vote in favor of future generations, vote for this defining piece of 
legislation.
  Mrs. MINK of Hawaii. Mr. Speaker, the compromise budget 
reconciliation bill agreed to by House and Senate Republicans fails the 
fairness test. While Republicans argue that their reconciliation bill 
maintains the ``glide path to a balanced budget by the year 2002,'' 
they conveniently gloss over the fact that this glide path descends 
from a $245 billion tax break for the rich to a deeper-than-necessary 
scale back in programs that benefit the poor, the middle-class, and the 
elderly.


                                 taxes

  The gulf separating the richest from the poorest Americans has 
widened considerably over the past 20 years. While social historians, 
economists, and politicians cannot agree on the cause of this 
disparity, they do agree that the incomes and assets of the richest 
Americans grew considerably during the 1980's and early 1990's as the 
incomes and assets of poor and middle-class Americans stagnated. Yet, 
the Republicans direct much of the benefits of their $245 billion 
package of tax cuts to the rich--not to the poor of the middle-class.
  The budget reconciliation bill includes a $16 billion 7-year 
reduction in the alternative minimum tax [AMT] which mainly benefits 
corporations and their stockholders. The bill refunds any AMTs that 
have to be paid temporarily.
  The Budget Reconciliation Bill also includes a $500 per child tax 
credit for the years after 1995 and a $125 retroactive child tax credit 
for 1995. The bill phases out the credit for single parents with 
adjusted gross incomes of $75,000 and married couples with adjusted 
gross incomes of $110,000.
  Unlike the AMT, the $500 per child credit is not refundable. 
Accordingly, the credit is of little or no benefit to moderate- or low-
income families with minimal adjusted gross incomes. For example, a 
family with 3 children and a $1000 tax obligation can claim over $1000 
in child tax credits, since the credit is not refundable. Yet, another 
family with 3 children but with a higher adjusted gross income and a 
tax obligation of, say, $5,000 can claim all $1,500 in child tax 
credits and reduce its tax obligation to $3,500.
  As the previous example illustrates, Republicans are being 
disingenuous when they claim the child tax credit will benefit mostly 
middle class taxpayers. The Republican claim is true only to the extent 
that most taxpayers are middle class. What the Republican claim 
conveniently glosses over is the fact that most of the benefits of the 
child tax credit will go to the affluent.
  With respect to the tax on capital gains, the reconciliation bill 
includes a 50 percent exclusion and inflation-indexing for individuals. 
The bill also lowers the corporate capital gains rate.
  While I realize that it is not just the rich and affluent who report 
capital gains, the fact remains that by and large, capital remain 
concentrated in the hands of the very affluent. For example, Internal 
Revenue Service data for 1988 indicates that 87 percent of dollar 
capital gains were reported by taxpayers with incomes of over $100,000. 
And, these were not one-time capital gains. IRS data over a 10-year 
period indicates the most affluent 4 percent of taxpayers account for 
70 percent of capital gains. Accordingly, the capital gains 
modifications in the reconciliation bill must be considered tax breaks 
for the rich.
  As the reconciliation bill provides tax breaks for the affluent, it 
imposes a de facto tax increase on the working poor by scaling back 
$32.4 billion worth of the Earned Income Tax Credit [EITC] over 7 
years. This scale back of the EITC is accomplished by rescinding a 
provision that provides the EITC to families without children, 
broadening the definition of what constitutes income for purposes of 
determining eligibility for the EITC, and reducing the maximum income 
at which families can receive the EITC.
  When all is said and done, the benefits of the $245 billion package 
of tax cuts that lies at the heart of the Republican Budget 
Reconciliation Bill are tilted to the affluent. For example, the most 
affluent 10 percent of taxpayers get 40 percent of the tax package's 
benefits while the most affluent 12 percent gets 45 percent of the 
benefits. And, because of the scaling back of the EITC and the 
nonrefundable nature of the $500 per child tax credit, the taxes of the 
lowest-income earners will go up.
  The concept of fairness and shared sacrifice is lacking in the budget 
reconciliation bill. This is underscored by the following:


                                welfare

  The welfare reform compromise included in this budget bill is a 
package containing provisions far more brutal than provisions in either 
the House- or Senate-passed welfare plans. The net effect will add 
millions of children to the 14 million already living in poverty in 
this country,
  Most egregious in this proposal is the elimination of entitlement 
status basic to the safety net of Federal programs supporting low-
income families, and the conversion of these programs into State block 
grants. This decimates a system of support that has been in place since 
FDR, which had the approval of Presidents Reagan and Bush.
  Regarding child care and cash assistance block grants, the proposal's 
further reductions to 75 percent from the Senate-passed 80 percent 
requirement in State ``maintenance-of-effort'' provisions allow States 
to withdraw an additional $3 billion without jeopardizing these block 
grants. The proposal also threatens State block grants with a mandate 
that States put at least half of their welfare caseload in jobs or work 
programs by 2003.
  Revisions and cuts in the Supplemental Security Income [SSI] program 
by 2002 would deny or severely curb assistance to 300,000 or 80 percent 
of the low-income disabled children who would qualify for SSI under 
current eligibility rules, according to the Congressional Budget 
Office. The Republican proposal would save billions of dollars on the 
backs of children who are only allowed to be classified as ``moderately 
disabled''--including children with cerebral palsy, Down syndrome, 
muscular dystrophy, cystic fibrosis or AIDS.
  Across-the-board reduction in the Food Stamp Program would reduce 
assistance by about one-fifth, the same as decreasing average benefits 
of 78 cents per person per meal to a mere 62 cents per meal. The 
proposal would increase homelessness among families with children, 
repealing a measure soon to take effect that would prevent these 
families from choosing between feeding and housing themselves. Another 
change makes benefits contingent on tougher work standards that 

[[Page H13188]]
would terminate Food Stamps for many low-income individuals. In 
addition, the work program funding in the proposal is only sufficient 
to provide a handful of work slots to allow these people to maintain 
their eligibility.
  Finally, legal, taxpaying immigrants are penalized with provisions to 
deny eligibility to SSI and Food Stamps and increase deeming periods 
for immigrant sponsors. States are given the option to cut legal 
immigrants for Medicaid, AFDC and Title XX Services. Immigrant children 
would be restricted from receiving school lunch and WIC benefits; WIC 
would also be denied to pregnant immigrants whose children would be 
born as Americans. These immigrants, by playing by our rules, 
rightfully deserve the assistance they need from the Federal 
government.


                            child nutrition

  This bill preys upon the most basic needs of children, by cutting $6 
billion from child nutrition programs, including the school lunch and 
breakfast programs. What could be more basic than assuring that our 
children do not go hungry. The Republicans have found it more important 
to give tax cuts to the rich and reach a zero budget deficit than to 
feed poor children in our Nation.
  Under the republican plan states will have the option of running the 
school lunch program as a block grant, eliminating the individual 
entitlement of low-income children to a free or reduced-price lunch. 
The bottom line is that cuts in this program will mean fewer children 
will receive fewer meals.


                                Medicaid

  This bill eliminates the guarantee to basic health care for the most 
needy children in our nation. For decades our national Government has 
upheld this commitment on the grounds that every child no matter how 
rich or poor deserves the chance to be healthy and survive in this 
world. The Republican plan rejects this commitment and replaces the 
national guarantee with a state block grant and cuts the funds to the 
states by $167 billion over seven years.
  By terminating this guarantee for needy children and families, the 
republican Medicaid proposal jeopardizes the health care of 36 million 
individuals, most of whom are children. Republicans claim that they 
have protected children in poverty, yet under their plan while states 
are required to provide health services to women and children up to 100 
percent of poverty it leaves it up to states the kinds of health 
services to be provided. With less money states will have no choice but 
to reduce services or limit eligibility.
  In my State of Hawaii we will receive 27 percent less Medicaid funds 
in the year 2002, 10 percent less over the 7 year period. Can we make 
up the costs. The simple answer is no. Hawaii has taken the lead in 
implementing an innovative Medicaid program, which covers not only the 
Medicaid eligible population, but other who do not have health 
insurance. Instead of encouraging and rewarding states for such 
innovation, the Republican proposal will cut funds, and jeopardize the 
viability of our program.
  Like the cuts in Medicare, the republican proposal singles out the 
elderly and their families to assume the greatest burden of the budget 
cuts. Medicaid is the primary funding source for long-term care in this 
nation. Some 52 percent of nursing home bills are paid for by the 
Medicaid program. Under current law, seniors are guaranteed Medicaid 
coverage of their nursing home bills once they have exhausted their own 
financial resources. However, the Republican bill terminates this 
guarantee of coverage and under the state block grant scheme, states 
are under no obligation to continue paying for long-term care services. 
Nursing home residents are at great risk of losing their funding source 
for long-term care, and their families will have to sacrifice 
everything to pick up the costs which average over $40,000 per year. 
The bill also allows states to place liens on the home, family farm or 
other real property of the nursing home resident and their spouse to 
recover nursing home costs.


                                medicare

  The Medicare Program continues to be targeted in the Republican's 
budget reconciliation bill in order to pay for tax breaks for the 
wealthy. The GOP is determined to carry out Medicare cuts of $270 
billion to compensate for the revenues lost to the tax breaks. This is 
all with complete knowledge of the fact that the proposed Medicare cuts 
are $180 billion more than what the Medicare Trustees estimate is 
necessary to insure solvency until 2006.
  The Republican Medicare Plan will put the traditional Medicare fee-
for-service system at a distinct disadvantage. The Republican plan is 
designed to cause the Medicare system to, as one of my distinguished 
colleagues put it, ``whither on the vine.'' The Republicans admit that 
it attempts to encourage beneficiaries to move to managed care plans. 
What they conveniently neglect to say is that the youngest and 
healthiest will transfer to other plans while the oldest, most sickly 
and most costly to care for will be left in Medicare. This is certain 
to drive up cost-per-beneficiary in the Medicare system and later could 
become the base for Republican claims that the Medicare system is a 
failure. This Republican Plan will send the Medicare system into a 
downward spiral.
  Republicans promote Medicare cuts by claiming that beneficiaries will 
have more choice. They claim that MedicarePlus plans would be required 
to offer at least the same benefits as the traditional Medicare 
program. The impression that health plans would be prevented from 
charging beneficiaries additional premiums for basic Medicare benefits 
is erroneous, however. It has been indicated, and the GOP has not 
denied, that the bill is intended to allow health plans to charge an 
additional premium if the price of benefits exceed Medicare's 
contribution.
  The failsafe mechanism will also result in disadvantages for 
Medicare. The failsafe mechanism will automatically reduce payments to 
providers in the traditional Medicare fee-for-service sector but not 
from the managed care sector should spending limits fail to be met. 
Lower Medicare payments will discourage physicians from accepting 
Medicare patients thus encouraging beneficiaries to transfer to a 
managed care plan. I believe it is logical to infer that providers 
would be reluctant to accept Medicare beneficiaries should the payments 
not adequately compensate for the costs.
  A horde of reductions will cripple various segments of the health 
industry. Payments to hospitals with a disproportionate share of low-
income patients will be cut by 5 percent in fiscal year 1996, and will 
continue to be reduced until it is thirty percent below current levels 
in fiscal year 2000. Additionally, a single conversion factor will be 
used to determine the fee schedule for surgical services, primary care 
services and all other services. The current system of three conversion 
factors is intelligent because specialized and complicated services 
require more training and are more costly to perform.
  Overall average annual growth in the Medicare program will be reduced 
from ten percent to about five percent. This is below even what the 
private sector calculates will be necessary. Hospital payment updates 
will be reduced by 2 percentage points in each of the next 7 years. The 
Indirect Medical Education adjustment will be reduced from 10 
percentage points to 5 percentage points between 1996 and 2001. 
Payments for clinical laboratory services, ambulatory surgery, 
ambulance services and durable medical equipment--including oxygen--
would be frozen for 7 years. This ``slowing of growth'' will prevent 
Medicare from keeping up with inflation and an increasing population.
  This bill relaxes regulations that were created to prevent fraud and 
abuse. The Budget Reconciliation bill removes all prohibitions against 
physicians referring patients to entities in which they have a 
financial arrangement. It also makes it more difficult for the Federal 
Government to prove fraud for the purposes of imposing civil monetary 
penalties.
  Additionally the quality of services provided would be threatened. 
Office labs would be exempt, for most services, from performance 
standards set by the Department of Health and Human Services. The bill 
grants States the power to establish regulations and standards for 
managed care organizations but it would waive these standards and 
regulations if a State failed to act on an application within 90 days 
or the Health and Human Services Department determined that the state 
imposed standards are unreasonable.
  Finally, the GOP plan panders to powerful special interest groups, 
providing protections for physician fees under Medicare from any actual 
reductions from 1995 levels. Additionally the bill contains anti-trust 
exemptions for physician groups leaving beneficiaries susceptible to 
higher costs. Meanwhile Seniors, unprotected by such a powerful 
lobbying organization, will see their premiums double in 7 years.
  The excessive detrimental effects of these cuts to Medicare alone 
should be enough to cause any compassionate member of Congress to 
oppose this bill. Even more so when bundled together with all of the 
other appalling cuts.


                             student loans

  Cutting $5 billion from the student loan program is another example 
of the Republican's backward investment strategy in which providing tax 
cuts to the wealthy is more important than investing in the education 
and training of our nation's young people. Over the next 7 years the 
student loan program, the largest college aid program, will be squeezed 
to produce $5 billion of the funds necessary to meet the balanced 
budget target and provide tax cuts to the rich.
  The result for students and parents will be reduced access to loans, 
which has helped educate 2 generations of students. The Republican plan 
caps the new Direct Student loan program, in which students get their 
loans directly from the Federal Government rather than through a bank, 
at 10 percent of the total student loan volume. While at the 

[[Page H13189]]
same time they eliminate current financial incentives for banks and 
other lending institutions to participate in the traditional student 
loan program. Imposing increased fees on banks and guaranty agencies 
will only weaken the traditional student loan program and could cause 
institutions to leave the program, limiting access to student aid. And 
because the Direct Loan program is capped students many students will 
be turned away and nowhere else to go for aid.


                                housing

  The Budget Reconciliation Bill would attack the poor, elderly and 
disabled who depend on housing assistance. The bill reduces the annual 
subsidy increase provided to low income housing projects receiving 
Section 8 rental assistance. The Federal Housing Administration's [FHA] 
mortgage assignment and foreclosure relief would be reduced from 3 
years to 1 year. Additionally, the bill would repeal the low-income 
housing credit after 1997.


                           alaska provisions

  Our country's precious natural resources in Alaska are being doomed 
to decimation under another provision in the budget legislation before 
us. This bill includes language to open the 1.5 million acre Coastal 
Plain of the Arctic National Wildlife Refuge [ANWR] to oil and gas 
leasing. I strongly oppose this provision in its attempt to relax 
environmental restrictions on ANWR--the last remaining lands in America 
home to a rich mixture of wildlife: caribou, polar bears, grizzly 
bears, wolves and several migratory birds. Habitat for these endangered 
and threatened species must be conserved and managed as wilderness to 
save them from extinction.
  This devastating attack on Alaska's natural resources seeks to 
provide fewer environmental safeguards than those supported in the past 
by Presidents Bush and Reagan. The language exempts ANWR leasing from 
basic environmental laws and laws governing gas and oil leasing. This 
effort by the new Majority to exploit ANWR's supposedly tremendous 
petroleum find is furthermore based on erroneous assessment--the U.S. 
Geological Survey recently reported that previous estimates were logged 
too high. This ANWR provision displays a lack of foresight and denial 
of understanding about the tragic oil and gas leasing would bring 
about.
  Mr. CASTLE. Mr. Speaker, I strongly support the conference report to 
H.R. 2491. It is comprehensive legislation to finally balance the 
Federal budget. I believe it is the single most important thing we can 
do for the American taxpayer and the Nation. This bill begins a true 
effort to end deficit spending and ultimately reduce the mountain of 
debt that threatens our children's economic future.
  This legislation completes the effort to reconcile mandatory spending 
with the Budget resolution's requirement to balance the budget by 
fiscal year 2002. It overhauls nearly every major Federal program 
except Social Security, and incorporates compromise versions of 
legislation passed earlier this year by the House, including welfare 
reform, Medicare reform, and tax relief for American families and 
businesses. Today's conference report vote is the culmination of 
Republican efforts to end the cycle of debt, deficit spending, and 
constantly growing Government that has come to epitomize the out-of-
control practices of past Congresses. Republicans have shown that they 
can promote growth, strengthen defense, save, preserve and protect 
Medicare, provide working families with tax cuts, and advance personal 
responsibility unlike any other Democratically-controlled Congress in 
40 years. Today, this new congressional majority delivers on this 
commitment to Americans.
  Unfortunately, the President and most Democrats in Congress have not 
participated in this historic challenge because they have no plan and 
no desire to turn back the tide of yearly deficit spending that has 
continued since man walked on the moon. Contrary to what he has 
publicly stated, the President does not have a detailed plan that 
balances the budget, and has thus been AWOL--absent without leadership 
on our Nation's No. 1 mandated top priority. Not only has he not been 
present, he has not been willing to negotiate with Congress on a 7-year 
balanced budget. It is fine to fight over the priorities, but we must 
agree on the principle. Our plan is not perfect. In fact, there will 
never be a perfect plan. But our plan is a real plan toward balance, 
with real numbers, contrary to the President's. We have accepted the 
challenge, unlike the President and the Democrats in Congress.
  The Balanced Budget Act of 1995 contains no draconian cuts. We are 
simply limiting the growth of Federal spending to a level we can 
afford. Over the next 7 years total Federal spending will increase by 
$3 trillion. During the 7 years from 1989 to 1995, Federal spending 
totaled $9.5 trillion. During the next 7 years, the Balanced Budget Act 
of 1995 calls for spending $12.1 billion. The Congressional Budget 
Office [CBO] has estimated that if Congress did not make any changes to 
the budget, spending would rise by 37 percent and revenues by 44 
percent. Under the plan we are to vote on today, spending will rise by 
about 25 percent and tax revenues by 41 percent. Stop and think about 
these numbers. They seem to represent a reasonable path toward an 
objective that most all Americans share: a zero deficit. By contrast, 
the Congressional Budget Office reported that the general budget 
outline, the President offered as a balanced budget proposal would 
leave $200 billion deficits as far as the eye can see. Not even one 
Senate Democrat recognized President Clinton's plan as a legitimate 
budget and the Senate defeated it 96 to 0.

  In 1995 Federal spending was $1.5 trillion. If current irresponsible 
spending policies were to continue, spending, according to the CBO, 
would be $2.1 trillion in 2002. That is an increase of $600 billion, or 
40 percent. Under this legislation, spending will rise between 1995 and 
2002 by $358 billion, or about 25 percent. This is slightly ahead of 
inflation if it increases 3 percent annually. Only in Washington would 
a $358 billion increase be called a cut.
  The real question for voters assessing this 7-year balanced budget is 
where the additional $358 billion in Federal spending in 2002 is going. 
The answer is entitlements: Social Security will cost $146 billion more 
in 2002 than in 1995, Medicare--for the elderly--will cost $86 billion 
more and Medicaid--for the poor--will cost $35 billion more. 
Miscellaneous entitlements--food stamps, the earned income tax credit, 
military retirement and so forth will rise $63 billion. Add interest on 
the national debt, and the total additional spending exceeds $358 
billion. By deciding to preserve and increase these entitlements, 
Congress had nothing left for increasing the discretionary side of the 
budget, where outlays will total $515 billion in 2002, down from $548 
billion in 1995.
  Defense comprises most of discretionary spending, and it will be flat 
at roughly $270 billion. Transportation spending will fall from $39 
billion to $32 billion; education and training will drop from $39 
billion to $35 billion; foreign aid and other spending on international 
affairs from $21 billion to $15 billion.
  Of course, I have differed on some of the spending priorities, and 
have worked to include a greater priority and more Federal funding for 
education and training, the environment, housing, tax cuts for those 
families who earn below $95,000, and health care. We will continue to 
debate these priorities. But once we decided to balance the budget, 
keep Social Security intact and pare back expected tax revenues 
slightly, the choices are fairly limited. But we have agreed on the 
principle.
  Consider Medicare. Medicare spending per beneficiary increases for 
$4,800 today to $6,700 in 2002. Today, the Federal Government spends 
$178 billion on Medicare. In 2002, the Federal Government will spend 
$274 billion--$86 billion higher than in 1995, an increase of more than 
6 percent annually. Republicans are also making it more affordable for 
seniors to purchase long-term care insurance, and are providing 
families caring for a dependent elderly parent a $1,000 tax deduction.
  The President's Medicare trustees have concluded that Medicare will 
be insolvent by 2002 if we postpone reform. The trustees report states 
that the Medicare hospital insurance [HI] program is ``severely out of 
financial balance and is unsustainable in its present form.'' In 
addition, Medicare part B, the supplemental medical insurance [SMI] 
program, must be reformed to ensure it can meet the needs of older 
Americans. The public trustees ``urge prompt, effective and decisive 
action'' to ensure the long-term financing of Medicare SMI.

  Medicare part B may not be going bankrupt, because the Federal 
Government picks up 68.5 percent of the cost of Medicare part B 
premiums, and as long as the Federal Government is solvent, Medicare 
part B is technically solvent. On the other hand, costs in Medicare 
part B are increasing at a completely unsustainable rate, and the rate 
of growth simply must be slowed. It is growing at a rate our country 
cannot afford. It has grown at an average of 15 percent per year over 
the last 20 years. Medicare part B spending grew from $38.3 billion in 
1989 to $58.6 billion in 1994. It is disingenuous for anyone to suggest 
that changes do not need to be made to Medicare part B.
  The Republican budget plan recently passed by the House would save 
Medicare from bankruptcy by increasing spending $1,600 over 7 years for 
each beneficiary without threatening the program or adding debt for our 
children to pay. No one--not Democrats, not Republicans--invented 
Medicare's financial crisis. The program has been heading toward 
bankruptcy for years. During the last Congress, President Clinton 
created a bipartisan Commission on Entitlement and Tax Reform, on which 
I was selected to serve, to try to transcend politics and address 
entitlement programs in a responsible, bipartisan manner.

[[Page H13190]]

  In forming the Commission, President Clinton said ``This Commission 
will be asked to grapple with real issue of entitlement reforms * * * 
Many regard this as a thankless task. It will not be thankless if it 
gives us a strong and secure and healthy American economy and society 
moving into the 21st Century.'' While the final report did not endorse 
specific proposals, it stated, ``We must act promptly to address this 
imbalance between the Government's promises and its ability to pay.'' 
However, neither the Democratic leadership in Congress or the President 
took further action. In contrast, congressional Republicans have 
bravely confronted the issue, recognizing that we simply must control 
the program's spiraling growth rate to guarantee the program well into 
the future. Republicans held 38 public hearings on Medicare and invited 
seniors' organizations, provider groups, and health care experts to 
submit their recommendations on how best to solve Medicare's fiscal 
crisis.
  The Republican plan maintains the present beneficiary part B premium 
percentage at 31.5 percent of total premium cost. When enacted in 1966, 
Medicare part B participants paid for approximately 50 percent of the 
program costs through their monthly premiums. Its premium was set at 25 
percent in 1982. Then in the 1990's, Congress spelled out specific 
dollar figures in law; the current $46.1 per month covers 31.5 percent 
of costs. The Balanced Budget Act would keep the percentage at 31.5 
percent, and does not raise copayments or deductibles.
  Medicare would be restructured to allow beneficiaries to purchase a 
private health plan with the Government paying the premium. This will 
allow Medicare beneficiaries to stay in the current system or to choose 
from a range of HMO's, PPO's, and MSA's, without a change in copayments 
or deductibles. Also, the plan generates savings by rewarding 
beneficiaries who report incidences of waste, fraud, and abuse and 
imposes significant penalties on anyone who defrauds Medicare. To 
ensure that Medicare savings are used only to strengthen Medicare, 
the Balanced Budget Act contains a lockbox. This provides additional 
legislative assurance that Medicare savings will be used only to save 
and strengthen Medicare.

  In its entirety, the Balanced Budget Act is realistic, sensible and 
fair. It saves Medicare from bankruptcy and dramatically reforms the 
program.
  The Balanced Budget Act also reforms Medicaid, the joint Federal-
State matching entitlement program that pays for medical assistance for 
low-income persons who are aged, blind, disabled, members of families 
with dependent children, and certain other pregnant women and children. 
Within Federal guidelines, each State designs and administers its own 
program. The program meets an important need for a safety net, and the 
Balanced Budget Act recognizes this.
  In fiscal year 1995, total Medicaid spending was $155 billion. The 
Federal Government spent $89 billion, and States contributed $66 
billion. The Congressional Budget Office projects that 38.4 million 
persons will be enrolled in Medicaid in fiscal year 1966. Under current 
law, Medicaid costs are expected to grow at an average of about 10 
percent per year over the next 7 years. CBO has projected that Federal 
Medicaid expenditures in fiscal year 2002 will be $178 billion. Based 
on current trends projected over the next 7 years, CBO estimates that 
the Federal Government will spend $954.7 billion on Medicaid.
  This cannot be sustained. Both Congress and States are interested in 
curbing growth because the program is consuming increasing shares of 
the Federal and State budgets. This conference report addresses this 
issue by ending the open-ended entitlement nature of Medicaid and block 
granting funds to the States. States have considerable flexibility to 
meet the health care needs of their low income citizens. Under the 
Conference Report, States will be required to maintain spending on 
poor, pregnant women and children, nursing home residents, senior 
citizens who cannot afford to pay their monthly part B Medicare 
premiums, and the disabled. In addition, States are required to pay 
immunization costs for poor children. The Balanced Budget Act also 
combats fraud and waste by instituting routine audits and State fraud 
units to investigate fraud and abuse.
  I am particularly pleased that the conference report has made 
significant changes to the House-passed funding formula, which was 
originally disadvantageous to States in the Northeast, including 
Delaware. Those States were only allowed to grow 2 percent a year, 
while other States were allowed to grow from 6 percent to 9 percent a 
year. Using 1994 as a base year also had a detrimental impact on these 
States. The conference report, however, is substantially more fair to 
the Northeast and I thank the leadership for being so willing to 
address the concerns voiced by myself and my colleagues from the so-
called 2 percent States.
  And with regard to education, this package recognizes that education 
should be one of our Nation's top priorities. The productivity and 
performance of our economy is inextricably entwined with the 
investments in education that we individually, and collectively, make 
as a Nation. According to a study by the Brookings Institution, over 
the last 60 hears, education and advancements in knowledge have 
accounted for 37 percent of our Nation's economic growth. Higher 
education is the surest ticket to a better future for our Nation's 
citizens, as it opens their horizons and increases their earning 
potential. Clearly, higher education is a valuable commodity and it 
behooves us to make it readily available to our young people, our 
veterans, and to all Americans.

  For much of the 104th Congress, the debate on access to higher 
education has focused on Federal financial aid. I submit that this is 
an important component in making higher education accessible to 
students, but not the only component. I find it curious one of the most 
important determinants of student access, college tuition, is given so 
little attention. It is an indisputable fact that tuition costs are 
rapidly rising. I realize that over the last 3 years, tuition costs 
have been rising at roughly 6 percent, which is a vast improvement over 
prior years. Nevertheless, years of unchecked growth not entirely 
necessary growth, are bound to have left a legacy of inefficiency in 
our colleges and universities which ultimately needs to be addressed.
  Financial aid programs do play an important role in making higher 
education accessible for many Americans. The Balanced Budget Act 
actually increases the volume of student loans by 50 percent over the 
next 7 years. Eligibility and access does not change; more loans will 
be available next year than ever in the history of the program. This 
package reforms the student loan program thereby saving $4.9 billion. 
Students, however, are not affected by the reform--their interest 
subsidies continue, their grace period remains intact, and origination 
fees are not increased. The package reduces subsidies for leaders, 
thereby requiring them to streamline and become more efficient. The 
package also preserves direct lending, in spite of its costliness to 
the Federal Government. However, the benefits from the competition in 
student loans will hopefully outweigh costs in the long run.
  This conference report recognizes and preserves a national investment 
in higher education, while moving us toward the important goal of 
balancing our Nation's Federal budget. A highly educated and flexible 
work force, combined with a balanced budget, will ensure U.S. 
prosperity as we enter a new century of economic growth and 
competitiveness.
  Each year that we continue to finance the Government with debt, we 
essentially steal from the economic prosperity of future generations, 
or more concretely, from our children, our students, and our 
grandchildren. This is wrong. It is wrong for us to send our bills to 
future generations simply because we lack the will or the desire to 
reduce spending. So we are here today with an important task.
  Congressional Republicans believe that strong American families form 
the soul of our Nation, shaping our values while building our future. 
That is why this report targets the lion's share of tax relief--73 
percent--to strengthen families through the most important moments of 
life: marriage, birth, education, illness, and the twilight for our 
elderly. The tax package provides good benefits to middle-income 
families so that overtaxed middle-income families don't have to wait 
for their share of the balanced budget bonus. I am pleased this report 
includes an income threshold for the $500 per-child tax credit for 
those individuals who earn $75,000 and those joint filers who earn 
$110,000. Twenty-nine million Americans will benefit from this credit.
  Tax laws should not penalize people whose filing status changes 
because they fell in love and married. Married couples who claim the 
standard deduction--generally those with average incomes of $50,000--
will receive 8 billion dollars' worth of relief from the marriage tax 
penalty, equating to about $217 of annual tax relief for 23 million 
taxpayers. More than 3 million self-employed Americans will receive a 
phased-in deduction of 50 percent of their health insurance costs.

  Republicans also know that strong families need good jobs. That's why 
this report provides targeted tax relief aimed at the engine of 
economic growth--our private sector. Unlike the 1993 Democrat plan 
which raised taxes in the name of economic growth, the Balanced Budget 
Act of 1995 provides tax cuts so the private sector can create more 
high-paying jobs. This includes a 50 percent capital gains deduction, 
with a maximum capital gains tax rate of 19.8 percent for individuals. 
Six million of the nine million will have incomes less than $100,000 a 
year.
  This historic legislation also makes a number of beneficial changes 
to the Personal Responsibility Act, the welfare reform bill that passed 
the House. The conference report increases to $800 million over 5 years 
the 

[[Page H13191]]
amount of funding for supplemental grants to States for population 
increases--the House-passed bill contained $500 million.--The report, 
as one of my recommendations requires States, in order to receive the 
full temporary assistance block grant, to spend at least 75 percent of 
the amount they spent in fiscal year 1995 for the first 4 years--the 
House passed bill contained no such requirement.--It also establishes 
an $800 million contingency fund to provide matching grants to States 
with unemployment rates above specified levels--the House contained no 
such provision.
  This report also includes modifications I supported and forwarded as 
recommendations to the House-passed prohibitions on cash aid under the 
family assistance block grant. It permits States to deny aid, rather 
than strictly prohibiting as in the House bill, to children who are 
born to an individual or family either currently receiving family 
assistance benefits or who received benefits at any point during the 
10-month period leading up to the birth of the child. It also permits 
States to exempt up to 15 percent--up from 10 percent in the House 
bill--of their caseload for reasons of hardship from the 5-year limit 
on receiving cash benefits, a recommendation I forwarded to the welfare 
reform conferees as well.
  Thus, there are beneficial changes that have been made as a result of 
this conference report. President Clinton has stated that he will not 
let balancing the budget serve as a cover for destroying the social 
compact. The truth is, if the Balanced Budget Act of 1995 becomes law, 
the social compact will actually be strengthened. Not only will we keep 
our commitment to the elderly and the poor on health care, we will also 
meet an even more important obligation to the public that was abrogated 
30 years ago--to spend no more than we take in. This legislation 
demonstrates that Republicans are steadfast in our determination to do 
the most important thing we will ever do: balance the budget. I urge 
passage of the conference report and I respectfully urge President 
Clinton to join this effort and negotiate with Congress to enact 
legislation to balance the budget.
  Ms. FURSE. Mr. Speaker, I would like to submit to the Congressional 
Record the following article written by Dr. Lawrence Korb, Assistant 
Secretary of Defense during the Reagan administration and current 
senior fellow in foreign policy studies at the Brookings Institution.
  At this moment when we are attempting to balance our Federal budget, 
we cannot ignore the Pentagon budget. Dr. Korb provides excellent 
guidelines as to how we can responsibly achieve some savings there. His 
article appears in the November-December 1995 issue of Foreign Affairs.

                      Our Overstuffed Armed Forces

                         (By Lawrence F. Korb)


                          REASONS TO CUT MORE

       Despite their differences, President Clinton and the 
     Republican-controlled Congress have agreed on two things. The 
     first is that the federal deficit should be eliminated by 
     slashing federal spending rather than increasing taxes; 
     indeed, both sides want to cut taxes. They have also agreed 
     that projected levels of defense spending will not be part of 
     any deficit reduction package. In fact, both the 
     administration and Congress have called for increases for 
     defense for the rest of the decade. In 1996 and 1997 alone 
     Congress wants to add $20 billion to what the Pentagon 
     requested, and it has established firewalls between defense 
     and nondefense areas of the budget so that funds cannot be 
     shifted to cushion cuts in social programs. Under the terms 
     of the joint budget resolution Congress adopted in June, 
     between 1995 and 2002 domestic discretionary funding will 
     fall from $248 billion to $218 billion while military 
     expenditures will rise from $262 billion to $281 billion.
       With the demise of the Soviet threat and the emerging 
     consensus on the need to deal with the deficit, one might 
     have expected defense spending to bear some portion of the 
     reductions, or at least not be increased. In the budget 
     reduction plans of 1990 and 1993--both of which were much 
     less severe than the current version--defense cuts played a 
     major role. Moreover, by about a 2-to-1 margin Americans 
     support reducing defense to bring down the deficit and oppose 
     the Clinton-Republican plan to boost spending on the armed 
     forces.
       Proponents of a larger defense budget are quick to point 
     out that military spending has declined for a decade and is 
     now about 35 percent lower in real terms than in 1985. Or 
     that the share of GDP consumed by defense (4.0 percent) is at 
     a 70-year low. Or that the proportion of the federal budget 
     that goes to defense is at its lowest level since Pearl 
     Harbor. Or that the active force is smaller than at any time 
     since the eve of the Korean War.
       While all these statements are true and historically 
     interesting, they are meaningless as a guide for policy. 
     Defense spending should be measured against the efforts of 
     potential adversaries and allies, not past U.S. 
     administrations. According to figures from the International 
     Institute for Strategic Studies, the United States will spend 
     on national security this year more than three times what any 
     other country on the face of the earth spends, and more than 
     all its prospective enemies and neutral nations combined. Its 
     $262 billion defense budget accounts for about 37 percent of 
     global military expenditures; its NATO allies, along with 
     Japan, Israel, and South Korea, account for 30 percent. The 
     15 other NATO nations will spend some $150 billion on defense 
     in 1995. Russia, the second-biggest spender, will lay out 
     about $80 billion, Japan about $42 billion, and China about 
     $7 billion (though this last is subject to more than the 
     usual debate over defense figures). The world's six rogue 
     states--Iran, Iraq, Libya, Syria, North Korea, and Cuba--have 
     a combined annual military budget of $15 billion.
       Speaking at the National Policy Forum in May, Ronald 
     Reagan's secretary of defense, Caspar Weinberger, illustrated 
     just how distorted the debate has become. While acknowledging 
     that the United States need not spend as it did during the 
     Cold War, Weinberger maintained that Clinton was virtually 
     disarming. But the United States will pay $15 billion more 
     for defense this year, in inflation-adjusted dollars, than it 
     did in 1980 at the height of the Cold War.
       What accounts for this state of affairs? The military 
     advocates and politicians who back an excessive defense 
     budget stress three strategic and operational arguments: the 
     new and multiple threats to U.S. interests that have 
     arisen with the collapse of the Cold War order; what they 
     claim is a crisis in military readiness; and a supposedly 
     severe underfunding of agreed-on programs. All three 
     arguments are flawed.


                            two wars at once

       The threat against which U.S. forces would be deployed has 
     been vastly exaggerated. The Clinton military strategy, 
     developed in the Pentagon's 1993 Bottom-Up Review of post-
     Cold War defense needs, postulates armed services capable of 
     fighting and winning two major regional conflicts at the same 
     time, one in southwest Asia and the other on the Korean 
     peninsula. Even if one accepts the somewhat dubious 
     proposition that two such wars will occur simultaneously, the 
     number of U.S. troops said to be necessary to fight them is 
     drastically inflated.
       Since its unveiling, the Bottom-Up force structure has been 
     criticized by many as inadequate to fight two major regional 
     contingencies. These critics include highly placed 
     politicians like Senate Majority Leader Bob Dole (R-Kan.) and 
     South Carolina Republicans Strom Thurmond, chairman of the 
     Senate Armed Services Committee, and Floyd Spence, chairman 
     of the House National Security Committee. They argue that in 
     a future Persian Gulf crisis the United States would have to 
     send about as many divisions, tactical aircraft, and ships to 
     the Gulf as it did in 1990-91. This assumes that the Iraqi 
     military is as strong as it was when it invaded Kuwait and 
     that the United States would once more stand by and let 
     Saddam Hussein conquer his neighbor, then go in alone to 
     oppose him. But if, for example, the United States reinforced 
     its troops on duty in the Gulf, as it did in October 1994 
     when some Iraqi army units again moved toward Kuwait, 200,000 
     troops would be more than enough. Indeed, in October 1994 the 
     dispatch of 13,000 additional troops to the Gulf was enough 
     to stop Saddam's military buildup. Adding forces from Middle 
     Eastern and European allies would provide an extra cushion.
       These same critics of the Bottom-Up force structure take at 
     face value the Pentagon's assumption that the United States 
     would need 400,000 troops to roll back a North Korean 
     invasion of South Korea. This is a startling number--more 
     people than the United States deployed in the Korean War. 
     At the outset of that so-called Forgotten War there was no 
     South Korean military to speak of, and four months into 
     the conflict the Chinese sent in one million men. Today 
     South Korea has 650,000 well-equipped and well-trained 
     troops, and it is difficult to conceive of China sending 
     any troops to support a North Korean attack.
       In an interview published in the October 1994 issue of 
     Naval Institute Proceedings, then-Secretary of Defense Les 
     Aspin, who conducted the Bottom-Up Review, said the Joint 
     Chiefs arrived at the 400,000 figure by postulating that a 
     South Korean soldier is 70 percent as effective as an 
     American but that a North Korean is equally effective. A more 
     reasonable calculation would be that the average North Korean 
     soldier, less well trained and using older weapons, is half 
     as effective as an American and somewhat less effective than 
     a South Korean. That would drop the demand for U.S. troops in 
     Korea to fewer than 200,000.
       Thus even if two wars were to occur simultaneously, the 
     United States would have to deploy only 400,000 troops to 
     both theaters--about 16 percent of the current total force of 
     2.5 million active duty and reserve personnel, far less than 
     the 30 percent most strategists would deem sound. Moreover, 
     since no enemies of the United States took advantage of 
     American involvement in the Korean, Vietnam, or Persian Gulf 
     conflicts to launch an attack, one can question the validity 
     of planning for two wars in the first place.


                             ready or not?

       Another reason for the unwillingness to consider reducing 
     the Clinton defense program is the trumped-up crisis in 
     military readiness, or the ability of units to perform as 
     expected. Ever since the late 1970s, when the armed forces 
     suffered a real readiness crisis because they had been 
     allowed to become hollow--undermined by significant 

[[Page H13192]]
     numbers of unqualified and poorly trained people in the ranks--
     political leaders have lived in fear of appearing soft on the 
     subject. Every secretary of defense since 1980 has said on 
     taking office that readiness was his highest priority. 
     Anytime President Clinton speaks about military issues, he 
     too recites the readiness mantra.
       Since March 1993, when Clinton reduced Bush administration 
     defense-spending projections by less than two percent per 
     year, the president's Republican critics have been warning 
     about the looming crisis in readiness and the imminent return 
     to the hollow military. Representative Floyd Spence argued in 
     mid-1994 that readiness was already in a downward spiral; at 
     about the same time John McCain (R-Ariz.) a member of the 
     Senate Armed Services Committee, issued a report titled 
     ``Going Hollow'' based on testimony by the military chiefs of 
     the four services. Dick Cheney, Bush's defense secretary, was 
     also writing and traveling around giving speeches about the 
     hollow force.
       Members of the Clinton administration inadvertently fanned 
     the flames of the readiness fire. After receiving anecdotal 
     reports of problems, new defense secretary Aspin in 1993 
     appointed a group of high-ranking retired officers to a 
     readiness panel. After the November 1994 Republican 
     congressional victory, the army leaked the news that three of 
     its twelve divisions were not ready, and Secretary of Defense 
     William Perry failed to note that the three were late-
     deploying divisions, that two of them were in the process of 
     being disbanded, and that the problem occurred only because 
     about $100 million in training funds had been diverted from 
     these stateside units to support the invasion of Haiti.
       Many alarmed by this fictitious crisis are unaware of what 
     readiness means to the Pentagon, how it is measured by the 
     military, and what caused the crisis of the late 1970s. 
     Readiness is not a synonym for military preparedness or 
     capability. Rather, it is only one of four components of 
     military capability, and not necessarily the most important. 
     Compared with the other three--force structure, 
     modernization, and sustainability--it is the most arbitrary, 
     subjective, transient, and easily manipulated. Thus a unit 
     can be very ready but not capable if it is too small, too 
     old, or unable to fight very long; the French military of 
     1939, among the most ready in the world, was easily overrun 
     by the more capable German army. Readiness often lies in the 
     eyes of the beholder: the rating officer. Finally, readiness 
     can decline rapidly, at least on paper. For example, an army 
     division that is fully manned and has all its equipment in 
     good working order can be rated not ready if even one 
     brigade misses or postpones a required training exercise.
       The readiness crisis of the 1970s resulted from the poor 
     quality of entering recruits, low retention rates, and lack 
     of funding in the readiness account. Today the quality of 
     recruits is high (96 percent are high school graduates, 
     compared with 68 percent in 1980), and retention rates are so 
     good that the Pentagon is forcing people to leave the service 
     before they wish. Moreover, spending on readiness is not only 
     50 percent higher per military person that in the late 1970s, 
     but higher than during the Reagan and bush years, when 
     readiness indicators hit all-time highs. In 1995 the Clinton 
     administration will spend $4 billion more on readiness than 
     the Bush administration had projected.
       Arriving at the final major argument for increasing 
     military spending, some assert that Clinton's $1.3 trillion 
     five-year defense program, unlike its predecessors, has been 
     severely underfunded. Estimates of the shortfall range up to 
     $150 billion in a report by the General Accounting Office, 
     while the Pentagon admits to about $25 billion. But even if 
     the higher figure is correct, this is not a new problem for 
     defense planners; for example, a decade ago the Reagan-
     Weinbeger five-year defense program was underfunded by about 
     $500 billion. Moreover, the figure is a technical estimate 
     based on assumptions about inflation and projected costs 
     overruns, and Clinton has pledged to make up the difference 
     if his inflation estimates prove overly optimistic. In 
     December of 1993 and 1994 he did just that, adding some $36 
     billion to his defense plan. If today's weapons systems face 
     costs overruns, the Defense Department will adjust as it 
     always has, by buying smaller quantities or stretching out 
     the purchasing period. And it is difficult to believe, for 
     instance, that the program for the current transport 
     aircraft, the C-17, will experience more overruns than its 
     infamous predecessor, the C-5, which cost so much more than 
     expected that its maker, Lockheed, needed a federally 
     guaranteed loan to avoid bankruptcy.


                           overweight baggage

       Perhaps the most important reason defense has not been 
     subjected to the same scrutiny as other federal programs is 
     the political baggage the White House and many members of the 
     Republican Congress carry. While there has always been a 
     certain amount of politics and parochialism in the defense 
     debate, they have rarely reached their present levels.
       Clinton's widely publicized avoidance of military service 
     during the war in Vietnam and his lack of foreign policy 
     experience made him reluctant to confront the military on 
     money matters or other major policy issues, or to risk being 
     perceived as weak on defense. His unwillingness to stand firm 
     on gays in the ranks or American involvement in Bosnia set 
     the tone early for White House dealings with the Pentagon 
     defense spending. In his original defense program, included 
     in his March 1993 economic package, the president called for 
     spending about $1.3 trillion on defense for 1994-98, or 
     roughly $260 billion a year. But in the Bottom-Up Review the 
     Pentagon argued that it could not meet its new objective of 
     winning two simultaneous major regional wars with a mere $1.3 
     trillion. Rather than challenging the assumptions of the 
     review or asking why $260 billion a year was not enough to 
     oppose the rouge states that might start a conflict, Clinton 
     promised to make up the shortfall.
       In December 1993 the president added $11 billion to his 
     defense program, and in his first State of the Union address 
     in January 1994 he announced that there would be no further 
     reductions in this plan. Shortly after the Republican victory 
     in last year's congressional elections he called a press 
     conference to reveal that he was adding another $25 billion 
     to his defense program. Clinton's politically inept handling 
     of the issue and his appointees' refusal to take any heat for 
     him on it have compounded the problem.
       The president's critics have made much of the fact that 
     Clinton's $120 billion in defense cuts in the March 1993 plan 
     were double what he promised during the campaign. But neither 
     Clinton nor his supporters retorted that the critics were 
     comparing apples and oranges. The campaign promises referred 
     to defense programs through 1997, while Clinton's economic 
     package ran through 1998, which accounted for $40 billion of 
     the lowered figure for defense; the new 
     administration's readjustment of the Bush program to 
     reflect different assumptions about pay and inflation 
     accounted for the final $20 billion. Nor did Clinton and 
     his advisers advance the obvious comparison to the defense 
     spending of America's friends and foes or point out that 
     their plan kept military outlays at 85 percent of the 
     average Cold War level, allocating more for defense in 
     1995 than Richard Nixon had for 1975. Finally, they did 
     not mention that Bush shrank the five-year defense program 
     he inherited from the Reagan administration by more than 
     $300 billion and reduced his projected levels of defense 
     spending each of his four years in office.
       The Republicans too are victims of their own rhetoric and 
     history. In their Contract with America--a major factor in 
     their electoral triumph--the G.O.P. promised to restore the 
     portions of national security funding they deemed essential 
     to strengthening defense and maintaining America's 
     credibility around the world, and pledged to reinstate a 
     national missile defense system to protect against a limited 
     or accidental nuclear attack. Because of this plank in their 
     contract, and because they perceive Clinton as vulnerable on 
     defense, Republicans were determined to jack up whatever 
     number the president named for defense spending. The 
     Republican plan sees Clinton's proposed $25 billion increase 
     and raises him another $25 billion over the next seven years. 
     Like Clinton, the Republicans upped the ante without 
     specifying what programs needed to be funded or how the 
     increase would affect national security.
       One area on which Republicans seem determined to spend 
     additional funds is the revival of the Strategic Defense 
     Initiative, now known as National Missile Defense. Support 
     for strategic defense has become a litmus test of loyalty to 
     the Reagan legacy; for Republicans, National Missile Defense 
     is the foreign policy equivalent of abortion. Thus, almost in 
     lockstep, Republicans in Congress are voting to double the 
     amount currently spent on defending the United States against 
     a missile attack and to deploy the new system early in the 
     next century. Republicans want to throw some $40 billion or 
     $50 billion at a multi-site continental defense system 
     although there are serious doubts about necessity and cost 
     effectiveness and although such a system would violate the 
     1972 Antiballistic Missile Treaty, negotiated by a 
     Republican president. Even Colin Powell, former chairman 
     of the Joint Chiefs of Staff and potential Republican 
     presidential contender, who has been a strong supporter of 
     the Strategic Defense Initiative, has told Republicans 
     that a national missile defense is entirely unnecessary.


                             Guns and Jobs

       Yet another political reason for not cutting military 
     spending is that both the administration and Congress 
     increasingly view defense as a federal jobs program. Weapons 
     programs like the B-2 bomber, the Seawolf submarine, and the 
     V-22 Osprey, designed to combat the Soviet threat, live on 
     because of the temporary economic problems that taking them 
     out of production would cause. The two sides in the debate 
     over whether to build a system are no longer hawks and doves 
     but those who have defense contractors in their district and 
     those who do not.
       Clinton set the tone in the spring 1992 Connecticut 
     primary. In a futile attempt to win that contest, he endorsed 
     the $13 billion Seawolf submarine program based in Groton, 
     Connecticut, which President Bush was trying to cancel. The 
     program has been kept alive on Capitol Hill primarily by the 
     largely liberal Democratic delegation from New England, 
     despite the strenuous efforts of Republican hawks like John 
     McCain of Arizona. When Bob Dole became a presidential 
     candidate he too discovered the merits of this Cold War 
     relic.
       Four years ago two members of the House Armed Services 
     Committee, liberal Ron Dellums (R-Calif.) and conservative 
     John Kasich (R-Ohio), brokered a compromise on the B-2 

[[Page H13193]]
     strategic bomber, which had been developed to penetrate the highly 
     sophisticated air defenses of the Soviet Union and drop 
     nuclear bombs. Rather than kill the program outright because 
     the Soviet threat was defunct, Congress would authorize 
     production of 20 of the bombers at a cost of $44 billion so 
     that the country could recoup its investment in research and 
     development. Even the Air Force accepted this as reasonable. 
     But as the production lien wound down the California 
     delegation sprang into action, led by senior senator Dianne 
     Feinstein, who inadvertently declared on the floor of the 
     Senate that the B-2 should be saved because it delivered a 
     heavy payroll (corrected the next day to ``payload''). 
     Congress ordered Defense to study whether the department 
     needed 20 more of the planes to prosecute its two-war 
     scenario. The Institute for Defense Analysis, directed by 
     General Larry Welch, a former head of Strategic Air 
     Command and Air Force chief of staff, concluded that the 
     answer was no. Kasich wrote an excellent piece, published 
     in The Washington Post, making the case against continued 
     production of the bomber. Nonetheless, in a close vote the 
     House decided to proceed with the next 20 bombers, at a 
     cost of at least $30 billion. Putting the bill over the 
     top were 17 members of the Congressional Black Caucus 
     concerned primarily about jobs in their districts.


                           hardly streamlined

       Again, it is largely politics that has kept cutbacks in the 
     Pentagon's overhead lagging behind those in its force 
     structure. A decade ago the Defense Department had enough 
     bases to support a total force of 12 million people. Through 
     the efforts of the Base Realignment and Closure Commission, 
     which met in 1988, 1991, and 1993, the number of major excess 
     bases was halved, from 140 to 70. This year the Defense 
     Department was supposed to close the remaining 70 bases; as 
     its comptroller noted, it cannot live without the projected 
     savings from the last round of closures. But with one eye on 
     the political calendar, the Clinton administration proposed 
     shutting only 32. When the commission added two bases in 
     politically crucial California and Texas to the 
     administration's list, Clinton accused the commissioners, 
     whom he had appointed, of political motives, and directed the 
     Pentagon not even to begin phasing out McClellan Air Force 
     Base in California and Kelly Air Force Base in Texas for five 
     years and then to privatize the jobs. This will make it 
     difficult to have another round of base closures or even to 
     achieve the full savings from the current round. The Pentagon 
     spends about $5 billion annually on unnecessary bases.
       At about the same time the administration was playing 
     politics with base closures, it missed another opportunity to 
     streamline military operations. Early last year, under 
     pressure from Congress, the Pentagon established a commission 
     to analyze the roles and missions of the armed forces, 
     essentially unaltered since 1948. Even though the nature 
     of the threat and the nature of warfare have changed 
     significantly in the last half century, the commission, 
     headed by Deputy Secretary of Defense John White, found no 
     duplication or overlap in the four armed services in such 
     areas as close air support, space warfare, air strikes 
     deep behind enemy lines, and defense against enemy 
     aircraft and missiles. General Merrill McPeak, then the 
     Air Force chief of staff, told the commission in the fall 
     of 1994 that the division of roles and missions among the 
     services was outdated and that the current defense program 
     had more than enough money if the Defense Department would 
     only organize itself rationally. But his fellow chiefs dug 
     in their heels against major changes, and even McPeak's 
     successor declined to support his position. The commission 
     members, apparently not wanting to challenge the chiefs, 
     contented themselves with a few bromides on privatization 
     and jointness.
       Finally, there are the unneeded units in the Army National 
     Guard, which Clinton and Congress have conspired to retain. 
     When the Cold War ended in 1990 the Bush administration 
     wanted to cut the Army National Guard by roughly the same 
     proportion as the active army, but the National Guard 
     Association mounted a furious lobbying campaign on the Hill 
     to forestall the cuts. During the 1992 campaign Clinton 
     endorsed the association's position, and his Pentagon has 
     maintained 42 combat brigades in the guard even though the 
     Joint Chiefs' war plans, which formed the basis for the 
     Bottom-Up force structure, call for only 15. The extra 27 
     brigades and 100,000 people cost about $3 billion annually.


                     how to save $40 billion a year

       In this year's debate over the size of defense 
     appropriations, Speaker of the House Newt Gingrich (R-Ga.) 
     stated that the present military budget is far above what is 
     necessary to defend the nation. But, Gingrich says, the 
     excess is a premium the United States pays to carry out its 
     role as a world leader. The question then is how much above 
     defense needs that premium should be.
       The Clinton defense program, which will cost about $260 
     billion a year, calls for maintaining a total force of 2.5 
     million people, 1.5 million active and 1 million reserve. 
     There will be 19 ground divisions, 12 carrier battle groups 
     with 346 ships, 20 air wings, and 184 bombers. This 
     conventional force will be backed by 3,500 strategic nuclear 
     weapons.
       This is the force considered necessary to win two major 
     regional conflicts. However, taking a more realistic view of 
     the threats in the Persian Gulf and Korea, the total force 
     can safely be reduced to 2 million (1.3 active and 700,000 
     selected reservists), which could support 15 ground 
     divisions, 9 carrier battle groups with 300 ships, 20 
     tactical air wings, and 150 bombers. In addition, the United 
     States should lower the number of strategic nuclear weapons 
     in its arsenal to 1,000. These manpower and force structure 
     reductions alone would save about $15 billion a year. 
     Readiness spending per military person can be pared down from 
     Cold War levels because there is no longer danger of a sudden 
     massive attack on U.S. forces. These two changes could save 
     about $10 billion a year.
       Spending on modernization can also be reduced. Given the 
     technological edge of current U.S. weapons systems, there is 
     no real need to procure larger numbers of next-generation 
     weapons like tactical aircraft. For example, because the 
     military can perform its mission of maintaining air 
     superiority with upgrades of existing planes, instead of 
     buying all 400 F-22 Stealth fighters for $72 billion as 
     currently proposed, the United States should produce only 50 
     to 75 of the planes. This will enable the Pentagon to remain 
     on the cutting edge of technology, and the planes will be 
     available for sophisticated missions, as were the 55 F-117s 
     bought in the 1980s and used so successfully in the gulf war. 
     Similarly, since the Seawolf will be built, the United States 
     can delay the follow-on Centurion-class submarines and keep 
     the Los Angeles-class submarines in service to the end of 
     their useful life. Finally, National Missile Defense can be 
     retained as a research program, and if proliferation of 
     nuclear weapons and ballistic missile technology makes 
     deployment necessary, a $5 billion single-site system 
     augmented by space-based sensors will be more than 
     sufficient. These measures would save at least another $5 
     billion annually.
       Completing the base closure process, rationalizing the 
     roles and missions of the four services, and taking such 
     commonsense steps as privatizing two-thirds of the 
     maintenance work at the Pentagon instead of the current one-
     third could easily save another $10 billion.
       Together these actions could lower defense spending by some 
     $40 billion a year, bringing the annual defense budget down 
     to about $220-$225 billion. It would take time to get there 
     from here, so the savings would not come all at once. But if 
     the nation reduced defense spending by $20 billion a year 
     from its projected levels, the savings over seven years would 
     be enormous. This would also free up funds to buy more 
     airlift and sealift as well as more minesweepers and to 
     invest in new concepts like missile-firing ships.
       An annual defense budget of about $225 billion would be in 
     keeping with the American public's preferences and the need 
     for deficit reduction. It would also give the United States 
     the wherewithal not only to defend itself but to play the 
     role of world leader envisioned by Speaker Gingrich. It is 
     not a dearth of money or forces, after all, that keeps the 
     United States out of messy conflicts like the Balkans, but 
     lack of leadership and will.
  Mr. CONYERS. Mr. Speaker, this bill continues to constitute an 
unbridled attempt to bribe doctors by offering them legal goodies which 
have little to do with the underlying legislation and have no positive 
budget impact. The process has also been abhorrent--we only today 
received a several-thousand page bill, without any prior opportunity to 
review or debate its provisions in conference.
  The bill continues to include a new antitrust exemption which 
protects physician networks from the usual per se rule against price 
fixing.
  As the ``New York Times'' recently wrote, easing the rules for PSN's 
would ``invite doctors to engage in blatant anti-competitive behavior 
[and] allow doctors who have no intention of going into business 
together to conspire among themselves to impose high fees and 
needlessly expensive treatment practices on health plans using their 
services.'' This antitrust loophole is strongly opposed by both the 
Department of Justice and the Federal Trade Commission. Amazingly, the 
provision was included without any review, hearing, or consideration by 
the Judiciary Committee in either the House or the Senate, even though 
it constitutes one of the most far reaching antitrust changes adopted 
in the last 20 years.
  The bill also continues to be weak on white collar fraud committed by 
doctors and other health care providers. Among other things, the 
legislation includes a shameful provision that changes the law to 
prevent private citizens form brining ``whistle blower'' suits against 
health care organizations that fraudulently receive funds from Medicare 
or Medicaid programs.
  Considering the amount of money saved by these suits, it is difficult 
to understand why we are eliminating them. To date, the government has 
recovered nearly $1 billion dollars through these so-called ``qui tam'' 
actions. Moreover, some of the biggest health care fraud recoveries 
began as whistleblower suits. For example, a total of $139.8 million 
dollars was recovered from qui tam actions filed against National 
Health Laboratories, Metpath, and Metwest based on allegations that the 
Medicare program was overcharged for unnecessary laboratory tests.
  This republican reconciliation bill has been bought and paid for 
through a series of back-room legal concessions granted to powerful 

[[Page H13194]]
health care interests. If we adopt these provisions, Congress will be 
sending the special interests a message that any objections they may 
have to controversial legislation can be overcome by unrelated legal 
concessions. The ultimate victim will be the American public.
  Mr. REED. Mr. Speaker, this Republican budget represents a set of 
values and priorities that are extreme, short-sighted, and out of touch 
with the direction in which Rhode Islanders and the American people 
want our country to move.


                           medicare/medicaid

  Perhaps the most glaring examples of the extreme provisions in this 
bill are the massive cuts in the Medicare and Medicaid programs. This 
bill represents nothing less than a reversal of a generation of 
guaranteed health care for our most vulnerable citizens. For more than 
30 years, the Medicare and Medicaid programs have exemplified our 
national commitment to care for seniors, disabled Americans, and low-
income Americans. In essence, it is the tangible evidence that, in the 
most affluent and productive country in the world, we would not let 
millions of Americans suffer because they were too old, too poor, or 
too ill to fend for themselves.
  The cuts to the Medicare program represent the most sweeping changes 
to the program since its establishment in 1965. And what makes these 
cuts so objectionable is that they are not about reforming Medicare, 
they are about providing tax cuts for the rich. These cuts are three 
times what is needed to keep Medicare solvent.
  Republicans claim that this budget enables Medicare to grow at a 
healthy rate. The truth is that this bill reduces Medicare growth by 33 
percent below that of private sector health-spending growth. What kind 
of health care can the elderly purchase at these below-market rates 
when we all know that their health needs are much greater than those of 
the working-age population?
  This bill also eliminates Medicaid. No longer will the 18 million 
children who currently qualify for Medicaid be guaranteed health care 
coverage. No longer will seniors who have entered nursing homes and 
exhausted their resources be guaranteed that they will be able to 
remain there. Republicans have substituted this guarantee with a block 
grant to States that cuts Federal spending by an average of 18 percent 
over the next 7 years. The State of Rhode Island will be faced with 
attempting to continue access to vital health care services with a 37-
percent reduction in Federal Medicaid dollars--clearly a daunting, if 
not impossible, task.


                        education/direct lending

  This bill also represents another example of accounting gimmicks used 
by Republicans to deliver on their promise of reaching their arbitrary 
budget targets. Republicans have created a special budget scoring rule 
for direct student loans. It is no wonder that the public has become so 
disenchanted with Congress--only Congress could change accounting rules 
so that a program that saved money last year is miraculously deemed to 
``cost'' money this year.

  The proposal to cap the direct loan program at 10 percent of total 
loan volume was not chosen because the program is not working; this 
program has achieved high grades from students, parents, and 
participating colleges and universities. Students and parents should 
know that the Republicans have chosen to reward banks instead of 
supporting the direct loan program which offers better service and more 
flexible repayment terms for students, simplified administration for 
schools, and greater accountability for taxpayers.
  The proposal to cap direct loans at 10 percent of total loan volume 
eliminates the current choice that colleges and universities have 
between participation in the direct student loan program or the 
guaranteed student loan program. This year, 40 percent of student loans 
are direct loans--with 1,350 schools and approximately 2.5 million 
students participating in the program. In Rhode Island alone, there are 
8 direct lending schools and 17,855 direct loans have been made. We 
must be clear--under this package, many colleges and universities that 
prefer the direct loan program would no longer be able to offer it to 
their students. It has been estimated that, as a result of this 
proposal, over 13,000 direct loans would be lost in Rhode Island. This 
cap denies colleges and universities the right to choose what is best 
for their students and undercuts free competition.


                                welfare

  President Clinton and a majority of Democrats, including myself, have 
indicated a willingness to support meaningful welfare reform. But 
instead, Republicans have opted for a welfare reform plan that is just 
plain mean to women and children. I supported a welfare reform bill 
that was tough on work and fair to children. I supported a welfare 
reform bill that has work at its heart and did not shred the safety net 
for children.
  Mr. Speaker, I urge my colleagues to reject this bill so that we may 
continue to work toward a balanced budget that reflects the priorities 
and values of the American people.
  Mr. STOKES. Mr. Speaker, I rise in opposition to the conference 
report on H.R. 2491. This bill--is the $270-billion cut in Medicare, 
and--the $163-billion cut in Medicaid--measure that the Republican 
majority has been trying to force down seniors' throats. And, this is 
the Republican bill that will result in gutting billions of dollars 
from ``quality of life programs and services'' from education to school 
lunches.
  Yes, this is the Republican budget that the majority leader proudly 
referred to, in January, when he said, ``The fact of the matter is once 
Members of Congress know exactly the pain the Government will live with 
in order to get to a balanced budget the knees will buckle.''
  Let me assure my colleagues, the American peoples' knees will buckle 
as they see the Republicans' budget taking the food out of the mouths 
of hungry children; taking critical prenatal care away from pregnant 
women; taking health care coverage away from children; taking critical 
health care services away from seniors; and taking financial aid away 
from college students.
  Mr. Speaker, I know the backs of seniors, children, and hard-working 
families in my district will weaken as the Republicans' budget buckle 
their knees. I know the knees of Ohio's seniors will buckle--as the 
Republicans' budget doubles their health care premiums. I know the 
knees of Ohio's children will buckle--as the Republicans' budget takes 
away their school lunches. I know the knees of Ohio's hard-working 
families will buckle--as the Republicans' budget increases their taxes.
  It is a shame--that the Republicans will break the backs of seniors, 
children, and hard-working families just to give a tax cut to the rich. 
The Republican budget is bad for children, bad for seniors, bad for 
families, and bad for the country. Ramming a bad bill through the 
Congress is not only wrong, it is an insult to the American people.
  Mr. Speaker, there is no tantrum big enough to justify the 
Republicans' shutting down the Government. There is no smoke and 
mirrors big enough to hide or disguise the pain, suffering, and hurt 
that would result from passage of the Republicans' budget. And, there 
is no Republican sound bit slick enough to hide the Republicans' tax 
break for the rich.
  Mr. Speaker, there is no balance in the Republicans' budget. I 
strongly urge my colleagues to stand up for children, and to stand up 
for seniors. Vote ``no'' on the conference report to H.R. 2491.
  Mr. TOWNS. Mr. Speaker, we should make no mistake, this 
reconciliation package removes the basic health safety net for 
America's neediest citizens, women, children, and the disabled for 
example, the conference report does not retain the Senate language 
which would have retained authority for CDC to continue the purchase of 
a discounted price of some of the vaccines necessary to immunize 
Medicaid children.
  This agreement not only allows States to define how is ``disabled,'' 
this agreement also repeals the current law which guarantees payment of 
Medicare Part B premiums on behalf of elderly. As a Medicaid conferee, 
I am truly dismayed that the American people will face a tremendous 
setback in the quality of their health care delivery systems. I urge 
the President to uphold his commitment to veto this package in hopes 
that we can provide something better for those who are ``the least of 
these.''
  Mr. HOYER. Mr. Speaker, I want to express my strong opposition to 
this omnibus bill. As a supporter of the Balanced Budget Amendment to 
the Constitution, I like the title but not the contents.
  As the details of this plan are made available to the American 
people, I believe they will join resoundingly with President Clinton in 
rejecting this extreme package.
  I remain committed to insuring our Nation's fiscal integrity. As I 
have said before, our obligation to our future and our children demands 
decisive action to affect a disciplined conduct of the fiscal business 
of this country.
  But this Republican package is not the answer. It is quite simply an 
attack on the middle class and poor Americans.
  It cuts $270 billion from Medicare over 7 years and would force 
seniors to pay higher part B premiums.
  The bill cuts $170 billion from the Medicaid program. This, combined 
with a cut in the earned income tax credit that is even more severe 
than in the original House bill, would have dramatic consequences for 
less-fortunate Marylanders.
  The Republican plan for welfare reform, included in this bill, is 
tougher on kids than it is on deadbeat dads. Their plan is weak on work 
provisions and ought to be rejected.
  The bill before us places a cap on direct student loans and makes 
major cuts in farm programs.
  An especially disturbing provision of this Republican bill is its 
attack on hard-working Federal employees. The measure saves more 

[[Page H13195]]
than $10 billion from increased taxes on Federal employees and other 
provisions that will dramatically decrease their benefit packages.
  I want to balance the budget and I believe we can do it in 7 years. 
The Orton-Stenholm substitute which we offered on this floor would have 
achieved a balanced budget without devastating America's working 
people. That alternative would have provided more than $850 billion in 
deficit reduction over seven years through real spending reductions.
  Most importantly, the Democratic alternative did not cut funding for 
seniors and for our children. It was a realistic bill that used honest 
numbers, shared sacrifice, sound priorities, and common sense to get us 
to a balanced budget in 2002.
  In my view Thomas Jefferson was right when he said:

       The question whether one generation has the right to bind 
     another by the deficit it imposes is a question of such 
     consequence as to place it among the fundamental principles 
     of government. We should consider ourselves unauthorized to 
     saddle posterity with our debts and morally bound to pay them 
     ourselves.

  Balancing the budget is the responsible and the essential thing to 
do. But the American people should not be fooled that the Republican 
plan is the best way, the only way, or even an acceptable way to do 
that.
  The Republican measure before us is so severe because of the 
additional cuts necessary to fund $245 billion in tax breaks. I believe 
the appropriate time to consider tax reductions is when we have 
balanced the budget. And, most importantly, I believe those reductions 
should benefit working Americans, not the wealthiest of Americans.
  Mr. Speaker, we have only 2 hours of debate on a measure that, if 
enacted, would be a major step backwards for our Nation. I am glad the 
President has committed to vetoing it and I hope that we will defeat it 
here in the House.
  Mr. LAZIO of New York. Mr. Speaker, I am proud to support the 
Balanced Budget Act of 1995. We have proven that we can do what's right 
for our children, our parents, and our grandparents--and balance the 
budget. However, as chairman of the Housing and Community Opportunity 
Subcommittee, I am concerned that the Low Income Housing Tax Credit 
[LIHTC] is not part of the reconciliation package.
  As chairman of the Subcommittee on Housing and Community Opportunity, 
I am troubled by the sunsetting of the Low Income Housing Tax Credit 
Program. This sunsetting will impact America's ability to provide safe, 
affordable housing for our working families. My hope is that there will 
be an opportunity in the not-too-distant future to reinstate the LIHTC 
Program.
  Congress created the LIHTC Program to provide an effective, efficient 
mechanism for encouraging private investment in badly needed housing. 
The program leverages a small amount of Federal support into successful 
housing development for low-income, working families. Almost half of 
the rental housing produced and virtually all of the housing currently 
being built for low-income families is a result of the Tax Credit 
Program. In addition, the LIHTC Program generates nearly 100,000 jobs 
and 3.1 billion in construction wages annually.
  The LIHTC Program is not a corporate welfare program. The program, in 
fact, is a terrific example of incentives--long-term incentives--that 
work. The sunsetting of the LIHTC Program may very well inhibit 
investor enthusiasm just as businesses have begun to invest personal 
and financial resources in the program. Over the past 2 years, 
businesses like USAA, San Diego Gas and Electric, IBM, and Chevron have 
begun to take an active role in building affordable housing for low-
income families. The LIHTC Program is the catalyst. Sunsetting the 
program at this time may have the effect of weakening the confidence of 
business in the overall private-public partnership that is central to 
many of this Congress' actions.
  The effect of sunsetting this program on the long-term, low-income 
housing industry and availability of affordable housing, is also 
problematic. Because housing providers require substantial time to put 
together a financing and development package and to work with State 
authorities, sunsetting the program might limit the scope of 
developments in the pipeline.
  The LIHTC Program is vital to housing in this country. I strongly 
urge this House to consider the need for, and effectiveness of, the 
LIHTC Program in future deliberations. I plan to hold hearings on the 
LIHTC Program early next year. Chairman Archer, for whose judgment I 
have the highest regard, has indicated a willingness to work with me on 
this issue. I recognize we must balance the need for affordable housing 
with the need for tax revenue. However, I am hopeful that we can work 
together and give the LIHTC Program a new birth.
  Mr. GUNDERSON. Mr. Speaker, today as the House considers the 
conference report on the Seven-Year Balanced Act of 1995, we move one 
step closer to a goal I have supported for a long while. The first bill 
I cosponsored as a freshman Representative in 1981 amended the U.S. 
Constitution to require a balanced Federal budget. At that time, I 
firmly believed it was time to get our fiscal house in order, when the 
deficit was $79 billion and the national debt stood at $994 billion.
  Fifteen years later, the deficit has grown to $206 billion--nearly 3 
times of what it was in 1981. The national debt was jumped to $4.9 
trillion or nearly 5 times the 1981 level. Further, in fiscal year 
1995, we spent $234 billion on interest on the national debt alone. 
That's 17 percent of the Federal budget. It also represents more than 
we spent on education, job training, child nutrition, and public works 
projects combined.
  Unless we balance the budget, interest on the debt will continue to 
eat into spending on other worthwhile Federal programs. Just look at 
how interest on the debt dwarfs our spending on certain vital human 
resources programs: In fiscal year 1995, we spent 66 times more on 
interest on the national debt than we did on the Head Start Program. We 
spent 32 times more on interest on the national debt than we did on the 
title I programs which benefit disadvantaged grade-school kids. We 
spent 149 times more on interest on the national debt than we spent on 
all elementary and secondary school improvement programs. We spent 158 
times more on interest on the national debt that we did on Federal aid 
to vocational education, 180 times more than on the JOBS Program to get 
people off welfare, and 212 times more than on Job Corps. Clearly this 
is a distorted sense of priorities.
  If we continue our spending priorities for the next 7 years, the 
deficit would balloon from $210 billion in fiscal year 1996 to $349 
billion. That's a 66 percent increase. The national debt would increase 
by $1.7 trillion during that same period.
  Just as increased debt interest threatens programs, the lack of 
balance between our coveted entitlement programs and discretionary 
programs is alarming. Entitlement programs such as Social Security, 
Medicare and Medicaid make up 64 percent of the Federal budget. 
Discretionary programs, such as defense, education and job training 
make up only 36 percent. This disparity is growing and without 
significant changes in spending priorities, by 2012 entitlement 
spending will consume the entire budget.


               the seven year balanced budget act of 1995

  I believe that we have made the right choices to put this country on 
a path toward a balanced budget. Back in June, the House approved the 
budget blueprint that laid the foundation for this change. Today, we 
actually implement the changes necessary to slow the rate of Federal 
spending over the next 7 years.
  Over the next 7 years we will reduce spending growth and reduce the 
Federal deficit by a total of $1.2 trillion. But it is important to 
note that slowing the rate of growth in spending is not a cut. The 
numbers amply demonstrate this assertion.
  Over the last 7 years, between 1989 and 1995, we spent a total of 
$9.5 trillion. Over the next 7 years, while balancing the budget, we 
will spend $13.3 trillion. That's 2.6 trillion more than in the past 7 
years. If we do nothing, we would spend $13.3 trillion over 7 years. We 
are not cutting the budget, but are finally putting our own house in 
order within a reasonable time frame.
  A comparison between spending levels in fiscal year 1995 and levels 
in fiscal year 2002 shows the effect of imposing fiscal discipline. 
Under current assumptions, spending would increase by $600 billion or 
40 percent. Under the assumption of a balanced budget, spending would 
increase by $358 billion or 24 percent. Only in Washington would a $358 
billion increase be called a cut.


               a look at key areas for the third district

  A quick review of the provisions of the Seven Year Balanced Budget 
Act reveals challenging but acceptable changes in Medicare, student 
loan funding and tax policy. It also reveals a glaring deficiency--the 
failure to reform Federal dairy programs.


                                medicare

  The Medicare Program has continued to grow exceedingly fast in recent 
years. The Medicare trustees reported earlier this year that without 
strengthening the system, Medicare will go broke by 2002. I believe 
that the budget package maintains the vital commitment to health care 
for seniors while ensuring that the program will be around far into the 
future.
  Under the budget package, average per beneficiary spending would 
increase from $4,800 to $6,700 over the next 7 years, or a $1,900 
increase per retiree. Most importantly, premiums would remain at 31.5 
percent of part B costs. Just as they have since the program was 
started, premiums would increase slightly every year.

[[Page H13196]]



                          Student Loan Reform

  The student loan program has provided essential opportunities to 
those who wish to further their education. But in order to preserve 
those opportunities far into the future, the House and Senate agreed to 
reduce the costs of the student loan program by $4.9 billion over 7 
years.
  Perhaps what is most important about the House-Senate agreement is 
that it does not increase costs to students or parents. The plan does 
not eliminate the in-school interest subsidy for undergraduate or 
graduate students. It does not eliminate the 6-month grace period for 
students leaving school to begin repaying their loan. It does not 
modify eligibility or access to student loans, not does it increase the 
origination loan fee paid for by students.
  Now, let's look at what the plan would do. The budget package would 
cap the administration's direct student loan program at its current 10 
percent level of the student loan volume. As many know, I do not 
believe the Government should become banker to students. At a time when 
Congress is trying to refocus the role of the Federal Government toward 
functions that it does well, the direct loan program heads in the wrong 
direction.
  The budget package would also gain savings from banks, secondary 
markets and guaranty agencies by lowering reimbursement fees for 
defaulted loans and other technical changes. Finally, the package would 
limit certain administrative expenses borne by the Department of 
Education. I am confident that the budget package does the most to help 
the budget at the least cost to students, parents and schools.


                         Pro-Growth Tax Policy

  The budget package agreement between the House and Senate provides 
for $245 billion in tax cuts over 7 years, just 2 percent of the 
Federal budget. Like many of us, I was genuinely leery of providing tax 
cuts at the very time we are trying to balance the budget. However, as 
we are limiting the growth in Federal programs, we still need to 
promote economic growth in the private sector. The tax package 
accomplishes this in a reasonable fashion.
  The conference agreement would impose a 50-percent capital gains tax 
cut for individuals and a 25-percent reduction for corporations 
retroactive to January 1, 1995. There is a misperception that a capital 
gains tax is important only to rich people, but actually most capital 
gains deductions are taken by middle class families. In 1993, the last 
year for which we have data, 60 percent of the tax returns claiming 
capital gains had adjusted gross incomes below $50,000, and 77 percent 
had adjusted gross incomes of below $75,000.
  Many in western Wisconsin will benefit from the reduction in the 
capital gains taxes. Most important among these is the retiring farmer 
that wants to sell his farm and rely on the proceeds for retirement 
income. At the present time, he must pay a 38-percent tax. Homeowners 
and small businesses--the businesses that create the most jobs--will 
also benefit from this middle-class initiative.
  The package before us will also benefit western Wisconsin because it 
includes expanded individual retirement accounts to spur savings. 
People would be able to contribute taxable amounts to the account, and 
then after 5 years would be able to withdraw money tax-free for certain 
purchases, including first-time home, long-term care expenses, post-
secondary needs, and retirement income. This account is pro-savings, 
pro-investment and pro-growth.
  The package also includes a tax credit of $500 per child under 18 
years for all individuals with income below $75,000 a year and all 
people filing joint returns with incomes below $110,000. Although 
uneasy with the House-passed version which allowed tax cuts for 
families with incomes of up to $200,000, I find the reduced income 
limit is much more acceptable.


                    Reform of Federal Dairy Program

  What is most troubling about the package brought to us today is that 
it is devoid of any reform whatsoever in Federal dairy programs. The 
Congressional Budget Office has consistently estimated that artificial 
incentives to produce fluid milk in Federal milk marketing orders, the 
so-called class I differentials, cost taxpayers over $100 million in 
additional spending on the dairy price support program and the Dairy 
Export Incentive Program [DEIP] annually.
  Obviously, class I differentials which are set by statute without 
regard to class I utilization also increase the cost of milk in grocery 
stores to consumers and the cost of the Federal WIC and special milk 
programs by millions of dollars annually. Their only purpose today is 
to provide additional revenue to dairy producers in a couple of areas 
of the country at the expense of producers in other areas as well as 
taxpayers and consumers around the country.
  Simply stated, there is no single Federal program more in need of 
substantial reform than Federal milk marketing orders. Even the most 
ardent advocates of the order system acknowledge that fact. That's why 
our country and our constituents cannot afford to let a small minority 
of Members forestall these reforms when the time comes to put a second 
balanced budget package together.
  In sum, today we are one step closer to our central goal of balancing 
the budget. A balanced budget will ensure sustained growth for the 
future, more opportunity for education, job growth and a better 
competitive position in the world market. I look forward to the day 
when we can say that we took the high road toward fiscal responsibility 
and put our national fiscal house in order.
  Mr. HASTINGS of Washington. Mr. Speaker, I rise in strong support of 
this package.
  Balancing the Federal budget is not about keeping tidy books, it is 
about saving our children's future. A child born today will pay 
$187,000 in taxes, just to pay their share of interest on the debt. 
According to the President's own budget, our children and grandchildren 
will face lifetime tax rates of over 80 percent to pay our bills.
  Budget deficits sap private investment and drive up interest rates. 
Debt service costs the average taxpayer nearly $800 a year in taxes. 
Ending these deficits is the most important economic program this 
Congress can pass.
  Under our plan, the budget is balanced not through cuts as some have 
alleged but through reductions in the rate of spending growth. Under 
our plan, revenues continue to climb even after our tax relief is 
enacted and even using conservative economic growth estimates. There 
are no smoke and mirrors here. If this plan is enacted, we will reach a 
balanced budget in the year 2002.
  A balanced budget will lower interest rates by as much as 2 percent. 
Families, farmers, small businesses, students, anyone who buys a home 
or finances a car will benefit from this legislation. A family with an 
average mortgage of $75,000 will save $37,000 in interest over the life 
of the loan, an annual savings of $1,200. A student with an average 
loan of $11,000--over 10 years--will save $2,160 in interest over the 
life of the student loan, an annual savings of $216. A family buying a 
$15,000 car will save $900 in interest over the life of the car loan, 
an annual savings of $225.
  What is more, balancing the budget will allow us to finally start 
reigning in the ballooning Federal debt and reducing the huge sums we 
spend on interest--$227 billion this year alone--on the debt.
  This is a historic day. We are going to pass the first balanced 
budget in more than a quarter century. This blueprint will give 
American families the right to keep more of their hard earned money, 
lead to lower interest rates and security for our seniors.
  Mr. Speaker, in 1994, the American people spoke loudly and clearly 
about changing the direction of Government--away from unending 
deficits, away from out-of-control spending and soaring debt, and away 
from big Government policies that waste taxpayers' dollars. I am proud 
of this Congress--the first Congress in years to truly keep its word 
with the American people.
  Mr. SCHAEFER. Mr. Speaker. I rise today in strong support of the 
conference report to accompany H.R. 2491, the Seven-Year Balanced 
Budget Act of 1995.
  As my colleagues know, I was the House sponsor of the Balanced Budget 
Amendment to the U.S. Constitution, which overwhelmingly passed the 
House earlier this year. Though this effort subsequently stalled in the 
Senate by just one vote, its large margin of victory in the House 
showed that the 104th Congress is serious about carrying out the 
mandate given to it by the American people last November.
  Mr. Speaker, I want to congratulate Mr. Archer and all the House and 
Senate conferees who put together this conference report. They have 
done an outstanding job in crafting this budget plan--one which guides 
us toward a balanced budget by the year 2002. Our children and 
grandchildren should be especially thankful, for with each step we take 
toward a balanced budget, we lighten the future financial burden they 
will have to bear. I do not want our grandchildren to be saddled with 
the bill for the carefee spending of this generation.
  I would like to express my particular appreciation to Mr. Archer and 
to the conferees for heeding the call of 85 Members of Congress 
representing 31 States who joined me in a letter calling for the 
retention of the wind and closed-loop biomass energy production tax 
credit. This tax credit, as you know, was supported by a large majority 
of Members as part of the Energy Policy Act of 1992 and was scheduled 
to expire in 1999. It is estimated that the repeal of the tax credit 
would have raised less than $20 million per year.
  We supported the retention of this tax credit because wind and 
biomass energy are becoming increasingly competitive providers of 
electricity to American consumers. In reliance of the tax credit, the 
wind and biomass industries have spent over $100 million on technology 
development, marketing and product development. I believe its repeal 
would have 

[[Page H13197]]
jeopardized the many small, entrepreneurial firms around the country 
which had placed faith in the tax credit running its full term.
  Mr. Speaker, someday our grandchildren will thank us for balancing 
the budget. Today's vote on the conference report to accompany H.R. 
2491 is an important vote for a balanced budget.
  And someday, Mr. Speaker, when fossil fuels become scarcer and more 
expensive, I believe our grandchildren will also thank us for having 
the foresight to lay the groundwork for the development of important 
renewable energy sources such as wind and biomass.
  Thank you, Mr. Speaker.
  Mrs. MORELLA. Mr. Speaker, the Balanced Budget Act is an important 
step toward achieving a balanced budget. This debate, however, is far 
from over. I have been involved in negotiating changes from the 
original House version, and this budget represents a substantial 
improvement.
  After voting against the House Reconciliation Bill, I lobbied for 
specific improvements, and a significant number of important changes 
were made. This bill continues the higher education direct lending 
program, restores the grace period for interest payments on student 
loans for the first 6 months, and provides a tax deduction for interest 
on student loans. The package improves Maryland's Medicaid funding 
formula, restores Federal nursing home standards, increases funding for 
welfare reform block grants and the school lunch program, and lowers 
the income level at which the $500 per child tax credit is phased out 
to $75,000 for single parents and $110,000 for married couples.
  This budget is a good first start--but we still have more work to do. 
I am committed to finding common ground with the President and 
Congressional leaders to further improve this package. Further 
improvements are needed to insure an adequate safety net for our low-
income families and elderly, and the provision to open up the Arctic 
National Wildlife Refuge to oil drilling must be removed. I still have 
deep concerns about enacting a tax cut before the budget is balanced. 
The lower threshold for the child tax credit in this package is an 
improvement, and the size of the tax cut and the tax relief for lower-
income Americans will be an important component of any compromise.
  Balancing the budget is one of the most important actions Congress 
can take to improve the Nation's economy. We are saddling our children 
with our debt, and that's not fair. Unless we rein in spending, 
children born today will pay $187,000 in taxes just to pay for their 
share of interest on the debt. A balanced budget would mean less 
Government borrowing and lower interest rates for consumers.
  Congress has attempted to lower the deficit and failed several times. 
During the 1980's, Congress enacted Gramm-Rudman-Hollings I and II, and 
in 1990 we enacted the Budget Enforcement Act. These measures were 
passed to control deficit spending, yet we still face deficits that are 
spiraling out of control and a $4.9 trillion debt.
  Up until now, Congress has avoided tough votes on the programs that 
comprise over half of the budget: entitlements. Entitlements, along 
with interest on the debt, are the fastest growing parts of our budget. 
Medicare constitutes 11 percent of the budget, and its costs rise 
approximately 10 percent annually. This budget limits the growth of 
Medicare, and responds to the Medicare Trustees Report that stated that 
the Medicare part A Trust Fund will be bankrupt by 2002. In fiscal year 
1995, interest on the debt encompassed 15.3 percent of the Federal 
budget and it continues to grow. The same year, we spent only 16.5 
percent of the budget on all science, education, transportation, 
housing, urban development and other non-entitlement domestic programs 
combined. Do we really want to be spending important resources on 
interest on the debt instead of making investments in our future? These 
are tough decisions, but the consequences of doing nothing are much 
more severe.
  This vote moves the process forward toward a balanced budget. I 
commend the Conference Committee for the improvements that have been 
made, and I look forward to working on a bipartisan basis with the 
President to finalize a package that achieves our common goal while 
also protecting our most vulnerable populations.
  Mr. LEACH. Mr. Speaker, I rise to express concern with the ``Medi-
goguery'' and ``Mega-social splintering'' involved in debate of the 
week on the House floor.
  With regard to Medicare, credible arguments can be made for holding 
the program at current levels of spending, increasing it somewhat, or 
increasing it substantially. The Republican option is one of taking an 
approach in between the last two alternatives--that is, increasing 
spending at over double the projected inflation rate for the next 7 
years, and in this process reforming the system so that rural counties, 
which now get one third the reimbursement of many urban areas, will 
receive an annual Medicare reimbursement increase three to six times 
the inflation rate. For these rural areas the Republican approach is 
substantially more generous than the status quo endorsed by the 
President.
  While politically attractive in the short run, the President's 
Medicare approach would lead to early insolvency in the system itself. 
The Republican approach may be more controversial, but it is thoroughly 
irresponsible to suggest, as has been done on the House floor, that a 
plan that increases per-recipient Medicare spending from $4,800 to 
$6,700 in 7 years implies ``gutting'' the program. Those who make this 
kind of fear-inducing claim should be held to account by the American 
public.
  With regard to the socially divisive argument employed by liberals in 
the balanced-budget debate, it is credible to make a case against a tax 
cut at this time or to oppose particular ingredients of the Republican 
tax cut approach. But when senior leadership of the Democratic party 
describe it as a ``tax cut for the rich,'' they are misleading the 
American people.
  It is true that the capital-gains reduction, which is designed to 
unlock assets and spur economic growth, disproportionately benefits 
high-income individuals, but it is a very small part of the Republican 
tax-cut package. The main ingredients are the following:
  A $500 per child per family tax credit for families with annual 
incomes under $110,000. According to the Tax Foundation, those earning 
below $75,000 will receive almost $87.5 percent of the Family Tax 
Credit;
  A tax credit of up to $145 to married couples who file joint tax 
returns to offset the current ``marriage tax penalty'';
  The deductibility of up to $2,000 in IRA contributions for each 
spouse, including homemakers;
  Repeal of the 1993 tax increase on Social Security benefits;
  The provision of tax incentives for the purchase of long-term health 
care insurance;
  The provision of a refundable tax credit of up to $5,000 for families 
adopting a child; and
  An increase over five years in the earnings limit for those receiving 
Social Security benefits to $30,000.
  The brunt of these tax cuts are clearly aimed at the middle-class.
  With regard to the tax cut package, two perspectives should be kept 
in mind: First, the Republican approach rolls back only 30 to 40 
percent of the total tax increases put in place by President Clinton in 
1993 and leaves untouched the increases in the top rates established by 
the Democrats; second, while $245 billion may seem a large sum for a 
tax cut, it should be seen in the context of the 7 years over which it 
will be spread. During this period the GNP will be in the $50 trillion 
range. The tax package is thus more modest and more middle-class 
directed than the rhetorical imagery suggested on the House floor.
  As for other priorities, I am convinced that the Republican approach 
of restricting spending increases to 3 percent a year--an inflation 
adjusted freeze--makes sense, although I might prefer some of the 
programmatic numbers to be shifted, particularly in the area of 
education.
  Whereas the rhetoric of the President's party is to accentuate age 
group division and thus socially divide the country, it is impressive 
that the changes Congress has in mind for programs like Medicare do not 
precipitate generational division.
  The argument that the young and the old have a vested interest in 
Democratic deficits is open to question. It is the young, after all, 
who will be spending their working lives paying for past legislative 
excesses. It is they who will benefit most from lower interest rates; 
they who would prefer to save for a home and to provide for their kids' 
education than pay taxes to legislators to take care of interest on the 
national debt.
  As for the baby-boom generation--those 40 to 55--they deserve a 
solvent Medicare system upon retirement. And the elderly deserve to be 
protected from the ravages of inflation, which so capriciously robs 
them of their savings.
  Mr. Speaker, as I have repeatedly stressed, no age group in America, 
young or old, has a vested interest in fiscal profligacy.
  But working Americans' of all ages have a stake in establishing a 
more responsible fiscal policy. It is simply incontrovertible that the 
economy will create more jobs for more people with lower interest rates 
made possible by lower deficits.
  In one sense, the difference between the parties does not appear 
great, with the Republicans advocating a 3 percent a year growth in 
spending and the Democrats 5\1/2\ percent. But since the 2\1/2\ percent 
differential is accumulative, the approximate $30 billion deficit 
difference in the first year grows to approximately a $200 billion 
difference in the seventh year. Over the full 7 years, the Democratic 
approach thus adds over $800 billion more to the deficit than the 
Republican alternative and leaves a gap at the end of the period 
comparable to the one at the beginning, whereas 

[[Page H13198]]
the Republican approach leads to a balanced budget.
  Finally, it would appear that the national spotlight is on the 
personality and ambition aspects of the issues, whereas the historic 
point is that the Congress is attempting to reestablish fiscal 
discipline. This personality interplay underscores the difficulties of 
hubris in the American political process.
  The President, for instance, appears to have made a mistake in the 
middle of negotiations with Congress to accede to an interview with Dan 
Rather in which Rather pinned him down on whether he could accept a 
``clean'' continuing resolution--precisely as the President requested 
that the Republicans give him--with the only stipulation being a 7 year 
balanced budget--which from time to time the President has endorsed.
  Once he encapsulated his veto intention into a firm sound-bite, 
rational reconsideration became impossible. The pride of utterance 
preceded the capacity to review quietly and thoughtfully what was on 
the table and the best interests of the Government and average American 
citizen took a back seat to prideful exclamation.
  Likewise, Republicans should be cautioned about expressing putsch-
like intentions which misunderstand the nature of the constitutional 
process whereby, however weak a particular legislator may perceive this 
President, the Presidency itself is a profoundly important institution 
that should not be eviscerated.
  Republicans may be right that a re-ordering of fiscal priorities is 
in order, but there is no call for delegitimizing government. The 
American national interest requires respect for process as well as 
outcome.
  Ms. DUNN of Washington. Mr. Speaker, today we take a historic step in 
reducing the size of the Federal Government, providing families and 
employers with badly needed tax relief, and providing for a balanced 
budget in 7 years. We are building a path to the future that restores 
both hope and opportunity for all Americans--now and in the future.
  We are dramatically changing the fiscal direction of our country. 
From a path of out-of-control growth of Government to a path of 
sustained expansion of the economy and job creation. Achieving a 
balanced budget will produce lower interest rates, higher productivity, 
improved purchasing power for all Americans, more exports and 
accelerated long-term growth. That will revive the American dream.
  In addition to reducing Government spending and eliminating the 
deficit, we are providing incentives for growth of our economy. Two 
years ago, the Clinton administration imposed the largest tax increase 
in the history of our Nation, placed squarely on the backs of the 
American people. Those tax increases took real money out of the pockets 
of real American families.
  This budget resolution unlocks the door to a prosperous, deficit-free 
future. Real incomes will grow faster, long-term interest rates will 
fall significantly, and Americans can once again look forward to their 
children doing better than they.
  Our balanced budget is about more than just accounting and tidy 
bookkeeping. Budget deficits sap private investment, drive up interest 
rates, and debt service costs the average taxpayer nearly $800 a year 
in taxes. Ending these deficits is the most important economic program 
this Congress can enact. In my district, a family from Eatonville with 
an average mortgage of $75,000 will save $37,000 in interest over the 
life of the loan--an annual savings of $1,200. A University of 
Washington student with an average loan of $11,000--over 10 years--will 
save $2,160 in interest over the life of the student loan--an annual 
savings of $216. A Issaquah family buying a $15,000 car will save $900 
in interest over the life of the car loan--an annual savings of $225.
  Mr. Speaker, our Nation is at a crossroads. There are two competing 
visions of America's future. We can either adhere to the status quo as 
the President suggests--which means higher taxes on families, more 
spending, more debt, fewer jobs, and less opportunity for our 
children--or we can embark on a new responsible course by balancing our 
Nation's budget, cutting taxes, and restoring hope, confidence, 
opportunity, and prosperity.
  It has not been easy making the tough choices needed to reach a 
balanced budget, but they are decisions that we have been willing to 
confront. They have been decisions that we had no choice but to 
confront--to do anything less would have been to neglect our 
responsibility as elected representatives. I cannot and will not turn 
my back on my country's future. I urge my colleagues to support the 
Balanced Budget Act of 1995.
  Mr. FRELINGHUYSEN. Mr. Speaker, today, November 17, Congress will 
approve a historic plan which balances the Federal budget in 7 years. 
This is the critical debate about the future of the United States--are 
we going to balance the budget or aren't we?
  I am as frustrated as anyone over the temporary shutdown of some 
Federal agencies. Indeed, this gridlock adds yet another reason for 
good citizens to lose faith in government. Nonetheless, I was elected 
to keep a number of promises, the most important being balancing the 
budget. We are actually doing this, not just talking about it. The way 
to restore faith in our system of government is to keep promises--
especially this one.
  America has a clear choice: we can continue to spend beyond our 
means, borrow from our children's futures, and run up the public debt 
over $5 trillion. Or, we can balance the budget with reasonable changes 
in programs, slow exploding costs of various entitlements, root out 
waste, fraud, and abuse, and yes, determine whether government must do 
everything for everyone.
  Having listened to thousands of people in our area and answered more 
than 25,000 letters, I think I know the answer: balance the budget, 
carefully and with compassion.
  When the rhetorical fog lifts, America will see an accurate and 
complete picture of our vision for this country. We are making 
fundamental changes to the Federal Government. We will balance the 
budget, reform welfare, and preserve Medicare and Medicaid, all the 
time spending more, not less. That's right, despite all the talk about 
cuts, the Government will spend $300 billion more over the next 7 years 
and still balance the budget by the year 2002. There is nothing extreme 
about keeping the public trust.
  I am here in Washington, keeping my promises to the people of the 
11th Congressional District who have written and called in saying 
``hang tough,'' ``hold your ground,'' balance the budget.
  Our children and grandchildren deserve nothing less.
  Mr. SERRANO. Mr. Speaker, I rise in emphatic opposition to the 
Republican conference report on budget reconciliation that is before 
the House today.
  The House passed a bad bill, and Republicans in conference have made 
it much, much worse. Thank goodness Democrats don't have to answer for 
that mess. The only bright spot is that, after the President vetoes 
this horror, we will be able to step back and, hopefully on a 
bipartisan basis, do a better job.
  All thinking Members agree that we must bring the Federal deficit 
under control, but reaching balance in 7 years requires the kind of 
mindless slashing the Republicans propose rather than thoughtful 
changes over a longer period. But the Republicans insist on 7 years and 
on their misguided priorities and won't even permit our side to offer 
an alternative.
  It is ridiculous that the Republicans' crown jewel is a $245 billion 
tax cut favoring corporations and the wealthy when they say balancing 
the budget is so important. It only makes tax increases for working 
families and deeper cuts in spending necessary.
  But the moral flaws in this bill are more fundamental.
  For decades, we have recognized a national commitment to the most 
vulnerable among us--children, families, the elderly, immigrants, the 
working poor, the sick and disabled. The Republicans end that 
commitment and make people in desperate circumstances the subjects of 
State-run experiments. No longer will children and families in dire 
straits be guaranteed some modest assistance. It will be up to the 
States to decide who is eligible and for what. This is not just bad 
public policy, it is immoral.
  Republicans say this bill is necessary to save future generations 
from debt, but in this bill they punish the children who are our 
future, unless their parents are already well-off.
  Far from encouraging work and supporting efforts to attain self-
sufficiency, the Republicans pull the safety net out from under the 
working poor and raise taxes on 13 million working families. They cut 
health care coverage, child care, school nutrition, food stamps, and 
other supports, provide no resources for jobs and job training, 
threaten the viability of pension funds, and make it far more expensive 
for the children to improve their futures through higher education.
  The Republicans continue the ongoing immigrant-bashing that began 
with H.R. 4, denying public assistance on the basis of legal 
immigration status, even denying immigrant children school breakfasts 
and lunches. This is outrageous. We know immigrants don't come here for 
public assistance; they come to join family members and to provide a 
better life for their children. They work, they pay taxes, they 
participate in community life, and they play by the rules. Why should 
they be treated as second-class citizens?
  The Republicans make huge, untested changes in our health care 
system, threatening the health of our population as well as the ability 
of our urban and rural hospitals to survive. Unless States are willing 
to invest substantial amounts of their own funds, millions of low-
income people, from the youngest children to the oldest seniors, will 
lose coverage for health care and long-term care. Seniors could even be 
thrown out of nursing homes if they run out of money, and that's after 
their spouses are evicted from their homes and 

[[Page H13199]]
their adult children are forced to divert all their resources from 
their own families.
  Many of the national programs the Republicans are gutting were 
created because some States were unable or unwilling to provide the 
most basic safety net for their vulnerable populations without Federal 
support. Now, the Republicans undo that by dumping huge new 
responsibilities on the States with no time to plan, establish new 
programs and bureaucracies, or hire and train State employees.
  Who knows how quickly--even whether--States can rise to meet these 
new challenges.
  Mr. Speaker, there is a great deal more to condemn about this bill, 
but I am out of time. In closing, I strongly urge my colleagues to 
reject this terrible conference report.
  Mr. BORSKI. Mr. Speaker, I rise today in opposition to the House-
Senate conference report on H.R. 2491, the Republican Budget 
Reconciliation Act. This legislation cuts from the heart of the 
programs and benefits that matter most to working and retired Americans 
in order to give huge tax breaks to wealthy individuals. The House 
should defeat this disgraceful bill and instead consider a reasonable 
budget plan that reduces the deficit in a fair and equitable manner.
  Despite the outcry from Americans--young and old--across the country, 
the bill we have before us today has not changed much since it was 
first approved by the House. H.R. 2491 still cuts Medicare by $270 
billion and Medicaid by $165 billion in order to lavish $245 billion in 
tax breaks to wealthy Americans. It still raises taxes on working 
Americans who benefit from the earned income tax credit--the best 
incentive we have for rewarding work and discouraging welfare. And it 
still slams the door on the future of our Nation's children by cutting 
student loans.
  Since Speaker Gingrich unveiled his budget, my office has been 
deluged with letters and phone calls from concerned senior citizens in 
my congressional district--the 20th oldest in the Nation. Approximately 
100,000 of my constituents rely on Medicare. They are not fooled, Mr. 
Speaker, by the claims that this budget will reform Medicare and 
Medicaid and give them more choices in the health care. They know quite 
well that the opposite is true: The Republican budget will require them 
to pay more--for fewer choices and lower quality care.
  A large portion of the Medicare cuts included in H.R. 2491 come 
directly out of the pockets of senior citizens. The bill will double 
the premiums currently paid by seniors for Medicare coverage, from $46 
to about $90 per month. For the average senior citizen, whose annual 
income is only $13,000 a year, this is hardly small change. For seniors 
at or below the poverty line, the Federal law which pays for their 
Medicare out-of-pocket expenses will be repealed.
  Under H.R. 2491, seniors will pay more, but receive far, far less in 
quality care and choice of service. In Philadelphia, our health care 
system and entire economy will be endangered by these insidious cuts. 
Many hospitals in my district, whose beneficiaries are predominantly 
Medicare and Medicaid patients, may have no alternative but to shut 
their doors. Health care workers--as many as 25,000 in Philadelphia and 
up to 6,000 in my district--will be at risk of losing their jobs. The 
hospitals that do survive will be forced to shift their costs to their 
customers who have private insurance.
  As their out-of-pocket costs rise, and hospitals close, senior 
citizens will have fewer places to turn for their health care needs. 
Doctors will flee the traditional Medicare system to join the 
MedicarePlus Program created under the bill, under which insurance 
plans could charge seniors additional fees above and beyond what 
Medicare pays for. Those seniors who do not join MedicarePlus will be 
susceptible to the $36 billion unspecified fail safe Medicare cuts that 
are included in H.R. 2491. These cuts will automatically reduce 
payments to providers in the fee-for-service sector--but not in the 
MedicarePlus plans.
  Senior citizens--and their children and grandchildren--will take an 
equally harsh hit by the Medicaid cuts included in H.R. 2491. In 
Pennsylvania, 65 percent of all long-term care costs are paid for by 
Medicaid. After our seniors have exhausted their lifetime savings, they 
rely on Medicaid to pay for the nursing home care they so desperately 
need. With the costs for a modest nursing home averaging about $4,000 a 
month, it is easy to understand how typical Philadelphia seniors could 
easily drain their savings in a short time.
  Under the majority's budget, that safety net that Medicaid provides 
is eliminated. H.R. 2491 repeals the Federal guarantee that Medicaid 
will pay for nursing home care for seniors who have exhausted all their 
assets. As a result, seniors will need to seek other sources to pay for 
their long-term care. Inevitably, this burden will fall on the 
shoulders of their children and grandchildren.
  While H.R. 2491 strips away the guarantees that Medicare and Medicaid 
provide to seniors, it also threatens the ability of their children and 
grandchildren to fulfill the American dream. The Republican budget 
disinvests the tools that American families need to work for a living, 
maintain self-sufficiency, and provide for a better future for their 
children.
  H.R. 2491 actually increases the taxes on the earned income of more 
than 14 million working American families--including 21,000 in my 
congressional district. The budget increases taxes for these families 
through a series of reductions in the highly successful earned income 
tax cuts [EITC] program. This program provides a refundable tax credit 
to lower income, working Americans in order to keep them off welfare 
and in the work force.
  H.R. 2491 also unfairly targets middle-income American families by 
cutting Federal student aid and child nutrition programs. It forces up 
to 1,000 colleges and universities across the country out of the 
Federal Direct Student Loan Program, cutting the number of direct loans 
available by about 1.9 million. It also cuts child nutrition programs, 
including school lunches and breakfasts, which allow our children to 
start each day well-nourished and ready to learn.
  The majority in Congress claims that all of this pain for our 
Nation's working and retired families is needed to balance the budget 
in 7 years. Ironically, by 2002, this budget will still borrow money--
$115 billion from the Social Security trust funds. According to the 
Congressional Budget Office, this budget runs a $105 billion deficit if 
you exclude the trust funds surplus. How can you call a budget balanced 
if it still relies on borrowing?
  This raid of the Social Security trust funds adds insult to injury 
for the working families in my district who work longer and longer 
hours for less pay. While H.R. 2491 cuts the benefits and raises the 
taxes of these families, it borrows their hard-earned Social Security 
retirement benefits--and then gives billions of those dollars to those 
who have contributed the lowest percentage of their income into the 
Social Security trust funds.
  Mr. Speaker, H.R. 2491 is not a balance budget measure. It is an 
attempt to redistribute the wealth of this Nation--from hard-working, 
middle-income Americans to the wealthiest individuals and corporations 
of this country. The very wealthiest American families--those earning 
over $350,000--will receive a tax windfall of $14,050 a year, while 
families with incomes under $50,000 will see a $648 loss.
  H.R. 2491 achieves this huge transfer of wealth by enacting the 
Speaker's crown jewel--the $245 billion tax breaks for wealthy 
Americans. More than 52 percent of the tax benefits go to families with 
incomes over $100,000 per year, and 28 percent go to families with 
income over $200,000. H.R. 2491 also weakens the alternative minimum 
tax, which will result in a $16 billion windfall for large 
corporations.
  Mr. Speaker, I do not believe it is fair to slash vital programs like 
Medicare, Medicaid, and student loans, while at the same time giving 
big tax give-aways to the highest paid individuals. Working Americans 
and senior citizens did not cause the budgetary program we now face. 
Our deficits resulted from the failed trickle-down policies of the 
eighties, which benefited the rich at the expense of the rest. Any 
serious and fair deficit reduction measure should seek to reverse those 
policies--not repeat them.
  Mr. EVANS. Mr. Speaker, this Republican budget will destroy economic 
opportunity for millions of hard working men and women. They have made 
a choice to balance the budget on the backs of seniors, students, 
veterans, and the working poor.
  They speak of sacrifice and responsibility, yet they are forcing low- 
and middle-income Americans to shoulder this burden while they give the 
wealthy and corporate America over $245 billion in tax breaks.
  I have introduced legislation that would reduce the deficit by 
closing loopholes that the wealthy and corporate America use to dodge 
their responsibility of paying taxes and reducing the deficit.
  While my bill eliminates more than $6 billion in tax loopholes that 
allow corporations to manipulate the foreign tax credit system, the 
Republicans choose to rob our children by slashing school lunch 
programs by the same $6 billion.
  While my bill closes more than $1.6 billion in tax loopholes that 
give foreign investors complete capital gains exemptions and interest-
free bonds, the majority cheats students of a college education by 
slashing direct lending for student loans by $1.6 billion.
  While my bill closes more than $23 billion in tax breaks that allow 
multinationals to increase profits by decreasing their U.S. tax 
liability, the majority slashes the same amount from the earned income 
tax credit, seizing any opportunity from working families to stay off 
welfare.
  We need balanced judgment in cutting spending wisely. But we cannot 
do that when the only choice before us is to leave loopholes for 
multinationals virtually untouched and economic opportunity for 
millions of Americans out of reach.

[[Page H13200]]

  Mr. MILLER of California. Mr. Speaker, I rise in strong opposition to 
the conference report. On the basis of the flawed natural resources 
provisions in title V alone, Members should reject this misguided 
legislation.
  This is not a serious effort to balance the Federal budget. The 
conferees have both ignored opportunities to raise real revenues by 
reducing wasteful subsidies, and missed a chance to improve the 
management of our public resources.
  Instead, this conference report resorts to sacrificing a national 
wildlife refuge to oil exploitation, sanctioning the continued giveaway 
of miner-rich public lands at a fraction of their fair market value, 
and providing even more corporate welfare for subsidized irrigators. 
This bill undermines serious efforts at reform, such as those that have 
passed the House on a bipartisan basis in recent years, by providing 
inconsequential revenues to qualify their proindustry, 
antienvironmental policies for the sound efforts at modernizing 
resource management and saving the taxpayers billions of dollars.
  The President has remained firm in his commitment to veto any budget 
reconciliation bill which would open the Arctic National Wildlife 
Refuge to oil and gas development. To include ANWR in this bill not 
only denies Members an opportunity to full debate and amendments under 
an open rule, but is an exercise in futility.
  The majority of the revenues in this title are assumed to come from 
oil and gas leasing of ANWR. But don't bank on it, There's a phony bait 
and switch going on here.
  To start with, don't believe the accuracy of CBO's assumption of $1.3 
billion in Federal revenues from ANWR. Those estimates were based on 
old projections of $40 a barrel oil, currently less than half that 
price. By contrast, the administration projects just $850 million in 
Federal revenues, assuming a 50-percent share goes to the State of 
Alaska.
  What the conference report doesn't tell you is that the State of 
Alaska currently is entitled to a 90-percent share under the Statehood 
Act of 1958, and Congress may not be able to change that entitlement 
unilaterally to 50 percent as the conference report proposes. If an 
all-but-guaranteed lawsuit reduces the Federal share to only 10 
percent--a lawsuit predicted by the senior Senator from Alaska as well 
as the chairman of the House Resources Committee, among others--the 
Treasury would receive only $260 million instead of the estimated $1.3 
billion, using CBO's estimates.

  And if the administration's lower estimates are correct, then the 
Treasury will only receive $170 million. That's one-tenth the amount 
purported to be in this reconciliation bill.
  The conference report further resorts to trickery in the sections of 
the bill addressing mining law. The Conferees pretend this is real 
mining reform and that the taxpayers will finally get a fair return 
from those who have profited royalty free from public minerals for the 
last 123 years.
  But on Wednesday of this week, 230 Members voted to recommit the 
Interior appropriations conference report in part because the mining 
provisions in the budget bill were deficient. Now, these very same 
provisions that Members have rejected are back before us today, 
insulated from amendment.
  The mining language purports to abolish the patenting of public lands 
for pennies. What the Conference Report really does is to grandfather 
both the existing patent applications and many existing claim holders, 
exempting them from any royalties. Patent holders would only have to 
pay for the public's resources based on the surface value of the land, 
which is like selling Fort Knox for the value of the roof.
  The few mining companies that don't make it through the patenting 
loophole don't need to worry much either. They would pay only the 
surface value for the mineral-rich land. The 5 percent net royalty is 
so riddled with deductions that payments would be just $12 million over 
7 years according to CBO. Twelve million dollars for billions of 
dollars in gold, silver and other valuable minerals. By contrast, in 
1993 the House passed a comprehensive mining reform bill that would 
have collected $90 million annually according to CBO.
  The conference report also includes more corporate welfare for 
western irrigators. It approves a prepayment proposal that will allow 
water districts to prepay at a discounted rate the highly subsidized 
debt that they owe the Treasury for reclamation projects, thereby 
exempting themselves from the requirements of Federal reclamation law. 
That means that these farmers, who have grown rich on the subsidies 
provided by the taxpayers of this Nation that were intended for small 
farmers, would be relieved from paying the unsubsidized cost for 
Federal water that is delivered to more than 960 acres of irrigable 
land.
  By allowing prepayment at a discounted rate, the notorious irrigation 
subsidies will be locked in place forever. Only the largest and 
wealthiest irrigation districts will be able to participate in this 
program.
  This bill also contains a very harmful and unwise decision to 
transfer land from the Bureau of Land Management to the State of 
California for use as the Ward Valley low level radioactive waste 
disposal facility. This issue has been under intense debate and 
scientific scrutiny for some time. The National Academy of Sciences 
review panel raised some concerns about the safety of the site and 
recommended additional tests before moving forward with the 
construction of the facility.
  Secretary Babbitt was involved in final negotiations with the State 
of California, but those talks broke apart when the State inexplicably 
refused to provide assurances that the safety tests would, in fact, be 
conducted by the State prior to construction. And since those talks 
broke off last month, additional scientists have admitted concealing 
information about radioactive seepage at another facility run by the 
Ward Valley contractors in Nevada.
  This provision is wholly inappropriate to the reconciliation bill 
because the tiny amount of funding involved--$500,000--is insignificant 
in budgetary terms. This is a fig leaf being used to drag through a 
major policy decision that could have serious safety implications for 
millions of Americans. The Senate version of this amendment was removed 
for procedural reasons, but it has sneaked back into this 
reconciliation bill. It is yet another example of the Republican 
majority trampling over sound science and environmental concerns to do 
the bidding of private industry.
  It is instructive to note what is not in this legislation. We could 
have ended double subsidies to farmers who receive federally subsidized 
water to grow surplus crops that we are paying other farmers not to 
grow. We could have eliminated below-cost national forest timber sales 
that cost more to administer than they raise in revenue. I offered 
these amendments and others in the Rules Committee which would have 
raised over $1.5 billion in 7 years--more than even the illusory 
revenues that the conference report assumes from ANWR.
  Simply put, the natural resource provisions of this legislation are 
an outrageous abuse of the public trust. The President will be fully 
justified in vetoing the conference report.
  Mr. BUYER. Mr. Speaker, Winston Churchill once observed that 
sometimes doing our best is not enough. Sometimes we have to do what is 
required. The fundamental issue at stake between the Clinton 
administration and Congress is not just about balancing the budget but 
about our future as a nation, as a people. In passing the Balanced 
Budget Act, we will have done our best--we have done what is required.
  The President has been talking about balancing the budget for 1,261 
days, yet we see nothing. He sent two budget bills to the Congress this 
year, neither balancing the budget. In fact, the second would create a 
deficit of $210 billion in 2002, the same year our budget is projected 
to reach zero.
  While the supporters of this plan to balance the budget are fighting 
for change, the President is fighting for the status quo. We want to 
cut spending; the President wants to keep spending. Before the year is 
out, America's debt could top the $5 trillion mark. Every Hoosier child 
born today will pay a whopping $187,000 in taxes just to underwrite 
their share of the public debt, a debt to which they were not a party.
  This Balanced Budget Act takes a giant step in a new direction and 
the middle class is the big winner. It leaves more money with the 
people who earned it, rather than with a Washington bureaucracy that 
spends it. As a result of this legislation, a Fifth District family 
will pay $2,400 less a year on a $75,000 home mortgage, $1,000 less 
over the 4-year period on a new car loan, and almost $2,000 less on a 
student loan.
  President Clinton wants to spend more of our money, borrow more from 
our children, have more bureaucrats in Washington, and have more power 
over our lives. This is the fight. Morally, we cannot continue to spend 
money that we simply do not have and continue to hand the bill to our 
children and grandchildren.
  This is a historic moment for America. I support this measure because 
it is vitally important to put our country on sound fiscal ground. We 
can assure the American Dream for all families, but most importantly 
ensure that our children have a future. Balancing the Federal budget is 
the most important issue that faces our country. The Balanced Budget 
Act puts America on the path to a balanced budget and America will be 
all the better because of it.
  Mr. METCALF. Mr. Speaker, I rise to express my support for the low-
income housing tax credit. A week ago, I presented the Speaker with a 
list of 129 Members who signed my letter supporting maintaining the 
permanent status of this vital program. I ask that this letter with the 
signatures be submitted into the Record after my remarks.
  The low-income housing tax credit is a market driven program which 
provides affordable housing for many disadvantaged families. 

[[Page H13201]]
Ending the permanent status would make it difficult for local 
government, investors, and developers to make appropriate long-term 
planning decisions. Consequently, this would undermine the 
effectiveness of this program and reduce the number of participants 
willing to build affordable housing.
  The Balanced Budget Act we are debating today will sunset this 
program. I am disappointed that the conferees did not accept the Senate 
version. However, I believe that we will find a resolution to this 
issue in the future. We must continue to provide affordable housing to 
the families and communities most in need.
  I would like to thank all the Members who signed my letter.

                                    Congress of the United States,


                                     House of Representatives,

                                 Washington, DC, October 30, 1995.
     Hon. Newt Gingrich,
     Speaker of the House,
     Capitol, Washington, DC.
       Dear Speaker Gingrich: We are writing to express our 
     concerns regarding the elimination of the permanent status of 
     the Low-Income Housing Tax Credit (LIHTC) in the 
     Reconciliation bill and the possibility of sunsetting this 
     program at the end of 1997.
       Since its inception in 1986, the LIHTC has been successful 
     at attracting private investment for affordable rental 
     housing. Both nonprofit and for-profit developers compete for 
     these credits to construct or renovate affordable housing for 
     low income individuals. According to the National Association 
     of Home Buildings, this program creates approximately 90,000 
     jobs a year, resulting in $2.8 billion in wages and $1.3 
     billion in tax revenue.
       The LIHTC is a decentralized program administered by states 
     according to their specific housing needs. The LIHTC is 
     successful because it is a market driven program, free of 
     interference from Washington. Investors exercise strict 
     business discipline over the operation and development of 
     this housing. As you know, building housing requires a great 
     amount of time. A developer or builder needs adequate time to 
     obtain the appropriate forms and meet building codes before 
     constructing or renovating a unit. Ending LIHTC permanent 
     status would make it difficult for state and local 
     governments, investors and developers to make appropriate 
     long-term planning decisions. Consequently, this would hinder 
     the effectiveness of this program and reduce the number of 
     participants willing to invest in, and build affordable 
     housing.
       We would like an opportunity to review all tax credits next 
     year. However, we see no reason why we can't achieve this 
     task while maintaining the permanent status of LIHTC. Once 
     the GAO reports its recommendations, we can make 
     administrative changes to safeguard this program.
       We are asking you to please restore the permanent status of 
     the Low-Income Housing Tax Credit. This credit is a form of a 
     tax block grant which provides state and local governments 
     with the resources to meet housing needs. The Low-Income 
     Housing Tax Credit is a valuable program and critical in 
     providing affordable housing for our citizens.
           Sincerely,
     Jack Metcalf.
     Rick Lazio.
                                                                    ____



                                     House of Representatives,

                                Washington, DC, November 10, 1995.
     Hon. Newt Gingrich,
     Speaker of the House,
     Capitol Bldg., Washington, DC.
       Dear Mr. Speaker: On Tuesday, November 7, 1995, my 
     colleagues and I sent you a letter of support for maintaining 
     the permanent status of the Low-Income Housing Tax Credit. 
     Since then, additional members have asked to be included on 
     this letter. Please add the signees below to the original 116 
     members who support the LIHTC.
       I plan to submit the original letter with the updates 
     signess into the record. Thank you for your attention to this 
     important matter.
           Sincerely,
                                                     Jack Metcalf.

Low Income Housing Tax Credit, Members signing Mr. Metcalf's letter to 
                            Speaker Gingrich

       Member, Republicans: Mr. Lazio, Mr. Young (AK), Ms. Johnson 
     (CT), Mr. McCrery, Mr. Nethercutt, Mr. English, Mr. Camp, Mr. 
     Chrysler, Mr. Baker (LA), Mr. Fox, Mr. LoBiondo, Mr. Smith 
     (NJ), Mr. Bereuter, Mr. Calvert, Ms. Roukema, Ms. Chenoweth, 
     Mr. Ney, Mr. Hayworth, Mr. Klug, Mr. Torkildsen, Ms. Kelly, 
     Mr. Blute, Mr. Hoke, Mr. Whitfield, Mr. Foley, Mr. Bunn, Mr. 
     Walsh, Mr. Barrett (NE), Mr. Salmon, Mr. Taylor (NC), Mr. 
     Castle, Mr. Bono, Mr. King, Mr. Jones (NC), Mr. Horn, Mr. 
     Weller, Mr. Bateman, Mr. Davis, Mr. Knollenberg, Mr. Longley 
     (ME), Mr. Bilbray, Mr. Tate, Ms. Morella, Mr. Cunningham, Mr. 
     Gilman, Mr. Forbes, Mr. Bartlett (MD), Mr. Heineman (NC), Ms. 
     Seastrand, Mr. Shays, Mr. Upton, Mr. Rogers, Mr. Boehlert, 
     Mr. Bachus, Mr. Quinn, Mr. Funderburk, Mr. Flanagan, Mr. 
     Colbe, Mr. Lewis (KY), Mr. Moorhead, Mr. Doolittle, Mr. 
     Hobson, Mr. Bryant, Mr. Diaz-Balart, Mr. Dickey, Mr. Ehlers, 
     Mr. Canady, Mr. Bonilla, Mr. White, and Mr. Crapo.
       Additions: Mr. Cooley, Mr. Gilchrest, Mr. Hutchinson, Mr. 
     Gunderson, Mr. Lewis (CA), Mr. McHugh, and Mr. Callahan.
       Member, Democrats: Mr. Matsui, Ms. Kennelly, Mr. Barrett 
     (WI), Mr. Luther, Mr. Holden, Mr. Pomeroy, Mr. Baldacci, Mr. 
     Berman, Mr. Rush, Ms. Lofgren, Mr. Fattah, Ms. Meek (FL), Mr. 
     DeFazio, Mr. Oberstar, Mr. Evans, Mr. Johnson (SD), Mr. 
     Dicks, Mr. Costello, Mr. Williams, Mr. Bentsen, Mr. Barcia, 
     Mr. Vento, Mr. Minge, Ms. DeLauro, Mr. Lantos, Mr. Frank 
     (MA), Mr. Wyden, Mr. Menendez (NJ), Mr. Stupak, Mr. Frost, 
     Mr. Meehan, Mr. Clay (MO), Mr. Markey, Mr. Lewis (GA), Mr. 
     Reed, Mr. L.F. Payne, Mr. Farr, Mr. Mascara, Mr. Browder, Mr. 
     Mfume, Mr. Abercrombie, Mr. Hilliard, Mr. Deutsch, Mr. 
     Gutierrez, Mr. Torricelli, and Mr. Conyers.
       Additions: Mr. Wynn, Ms. Woolsey, Mr. Ford, Ms. Eshoo, and 
     Mr. Hinchey.
       Member, Delegate: Mr. Victor O. Frazer.

  Mr. LaTOURETTE. Mr. Speaker, the primary focus of the 104th Congress 
has been to tackle the immoral and ever-growing Federal debt. This 
Congress has embarked on a historic plan to balance the budget in 7 
years, or by 2002.
  For far too long, the Congress has thought only of today, with little 
thought of tomorrow. For decades, the Congress has irresponsibly 
continued to pour truckloads of money into programs that provide 
marginal results at best, programs which overlap services, and programs 
which provide services no longer needed.
  America recognizes that what we are doing in Washington--scaling back 
government, reversing decades of fiscal irresponsibility, is a 
revolutionary process, and one that is often painful. All I have asked 
in this budget process is that we go about it fairly, that we level 
with the American people and refrain from the monkey business of the 
past.
  Recently, I was one of ten Republicans in the House to vote against 
the House-authored version of the budget. While I wholeheartedly agree 
with the necessity of balancing the budget in 7 years, I could not in 
good conscience support that version of the budget because it contained 
numerous favors to special interests. I promised my constituents that 
if a majority of my concerns were addressed and corrected, I would 
support final passage of the budget plan.
  No legislation is perfect, and the Balanced Budget Act of 1995 is no 
exception. On the whole, however, I feel this is a budget plan that is 
fair; it is based on real numbers and it enables us to reach our goal 
of balancing the budget in 7 years. Furthermore, many of my concerns 
have been addressed and corrected. Nursing home standards have been 
restored; problems with the Medicaid funding formula have been fixed, 
including a spousal impoverishment clause; several environmental areas 
of concern are now addressed, and greater protections have been added 
to the pension provisions area.
  We could wrangle over the details for years to come, but the clock is 
ticking and we must address our country's horrific debt now. In the 
coming 7 years, the lives of all Americans will be changed as a result 
of having a balanced budget. Economists agree a balanced budget will 
lead to falling trade deficits, rising productivity and a higher 
standard of living for Americans. Reductions in interest rates will be 
substantial. For example, the 30-year Treasury bond, now at 6.4 
percent, could decrease by as many as 2 percentage points.
  Lowered borrowing costs will be tremendous for business investment 
and other areas of the economy sensitive to changes in interest, 
including housing and the automotive industry--something vital to the 
economy of northeast Ohio. Also, a balanced budget is expected to free 
up billions of dollars for our States and cities. A Senate Budget 
Committee study shows that $919 million will be freed up for Ohio, and 
$56 million for Cleveland.
  What will a balanced budget mean to you on a personal level? How will 
it impact your daily lives? Here are some of the highlights:
  Interest on home loans for the average 30-year mortgage will drop as 
much as 2.7 percentage points, according to a National Association of 
Realtors study. With a 30-year $50,000 mortgage at 8.23 percent, 
families would save more than $1,000 annually, or more than $32,400 
over the life of the loan.
  Interest on car loans will drop by as much as 2 percentage points, 
according to a Joint Economic Committee study. Hence, if you take out a 
5-year $15,000 loan at 9.7 percent, you will see an extra $900 in 
savings for your family budget. Meanwhile, interest on student loans 
also will drop as many as 2 percentage points, according to an Economic 
and Educational Opportunities Committee study. If your son or daughter 
borrows $11,000 at 8 percent interest, they will pay $2,167 less for 
schooling.
  When our goal of a balanced budget is realized in 2002, the changes 
in our economy will be significant. Companies will be able to invest in 
new equipment and productivity will rise; this will lead to higher 
wages and better living standards. Best of all, a balanced budget will 
help create an estimated 6.1 million new jobs, according to a Joint 
Economic Committee study. These jobs will benefit the middle-class, 
welfare recipients, and high school and college graduates.

[[Page H13202]]


  It is time we, as Americans, return to a life of fiscal 
responsibility; the Federal Government should and can be a role model. 
Americans are conditioned to believe Washington only does what is right 
for itself, not for America. This Congress is different. This Congress 
is committed to putting the needs of America and its financial future 
first, above all else, including our own re-elections. I am proud to 
vote for the Balanced Budget Act of 1995, a vote for the future of 
America.
  With a balanced budget, we can return to an America we can all be 
proud of, one where every American has an opportunity to succeed, and 
one where all Americans can provide for their families and save for 
their futures. A balanced budget is truly our last, best hope to 
restore the American dream.
  Mr. JOHNSON of South Dakota. Mr. Speaker, I rise in strong opposition 
both to the pending budget reconciliation bill and to the parliamentary 
rules under which it is being considered.
  It is wrong to consider this wide-ranging legislation without the 
opportunity for any amendment or even for an alternative bill or 
recommittal motion. While I am a strong supporter of balancing the 
Federal budget, I will not permit myself to be forced by these rigid 
rules to support the outrageous budget priorities contained within this 
bill.
  By spending $245 billion in tax favors, this legislation creates a 
situation where it has become necessary to cut deep into Medicare, 
Medicaid, education, and even to kill the entire farm program 
altogether. These are radical budget priorities that do not make sense 
to South Dakota families. It is particularly offensive to me that this 
legislation substantially increases income tax liabilities for families 
making less than $30,000 per year but provides a tax cut bonanza for 
millionaires.
  There is no doubt in my mind that President Clinton will veto this 
budget reconciliation bill, and it is my hope that we can then begin a 
serious bipartisan effort at balancing the Federal budget in a manner 
which is fair to middle class and working families, the elderly, 
veterans, and rural America.
  Mr. POSHARD. Mr. Speaker, I rise in opposition to the budget before 
us today and in strong support of the more reasonable alternative which 
I cosponsor along with many of my moderate Democratic colleagues.
  We are at a momentous time in our Nation's history. It does appear 
the will exists to put this country on stable financial ground and 
balance our Federal budget.
  There is no alternative. Our country cannot manage a debt of $5 
trillion and billions of dollars in red ink in our annual budgets. 
unless we act, shortly after the turn of the century our tax dollars 
will go entirely to entitlement programs and interest on the national 
debt. There will be no money for environmental protection, 
transportation, law enforcement, education, medical research, or any of 
the other functions of government upon which people rely.
  But I reject the notion that there is only one way to accomplish this 
goal--the option before us today. There is a better way--the coalition 
budget which I support.
  Our budget restores the fiscal integrity to the Medicare trust fund 
and controls spending in that program by $170 billion to help us reach 
a balanced budget. That is in stark contrast to the $270 billion in 
Medicare controls in the Republican plan. That is $100 billion more 
than necessary to maintain the program, $100 billion which will be used 
to pay for tax cuts for wealthy Americans. This will be a tremendous 
burden on Medicare beneficiaries and will put hospitals in my district 
out of business. This is the most substantial argument against the 
Republican plan, and I will not vote for a budget which takes so much 
from the Medicare Program and gives it away in tax cuts.
  The changes in the earned income tax credit hits the 19th District 
harder than any district in the State of Illinois. The list of concerns 
is long.
  I've voted for a balanced budget amendment and now cosponsor a bill 
which will get us to balance in 7 years, as scored by the Congressional 
Budget Office. It is better for the American people in health care, 
education, agriculture, and the host of domestic needs which are 
important to our people. And it represents the broad middle ground 
where most Americans live their daily lives.
  I will vote against this budget today because I know we can do 
better. I urge the President to work with us to balance the budget in 7 
years. If we are to have a tax cut, I urge the Republicans to lower the 
income limits and let us target those breaks to the working people of 
this country.
  We can reach an agreement that respects our obligation to care for 
our people and, at the same time, rid this nation of its burdensome 
debt. We are not there yet. I am voting against this bill today in the 
hope that we will get there with a better bill.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, I rise today in 
strong opposition of the Republicans' Balanced Budget Act for fiscal 
year 1996. The Republican budget is a noncaring budget, it has no 
compassion for the American people and is one that the American people 
cannot be proud of. It not only balances the budget on the back of the 
disenfranchised, the measure is nonresponsive to the housing, health, 
education, environment, and employment training needs of the American 
people.
  The Republicans' budget reconciliation holds our elderly hostage to 
their compromised health care condition and economic status, we need a 
budget that treats the elderly with the dignity and respect that they 
not only deserve--but have earned. We need adequate funding that 
provides for the older Americans' programs including essential 
nutrition programs, low-income home-energy assistance, and assisted 
housing. And of course we must ensure that Medicare is preserved.
  The lives of more than 2 million Medicare seniors in Texas would be 
dramatically impacted, and by the year 2002 each Medicare senior in 
Texas would be asked to pay an additional $1,122 out-of-pocket 
expenses. Each would be forced to pay $4,000 more for fiscal years 1996 
through 2002 to make up for the cuts. We want the future to be free but 
not on the backs of seniors and those most vulnerable.
  The Republicans' budget proposal which forces our elderly to choose 
between food and heat, does not improve their quality of life. We need 
a budget that is kind to our Nation's children including those yet to 
be born. And one that provides adequate funding for healthy start, 
child care, and Head Start. Our children are our future. They have 
placed their future in our hands, we cannot sacrifice the trust.

  In addition, we need a budget that strengthens support for higher 
education, student aid, trio, education for the disadvantaged, school 
reform, biomedical research, and community infrastructure. I have heard 
the voice of the American people and they want us to respond with a 
sound budget that is fair, responsible, and overturns the Republicans' 
assault on our Nation's most vulnerable citizens--the children, the 
elderly, the veterans, and hard-working families.
  Mr. ALLARD. Mr. Speaker, when I ran for Congress in 1990, I made one 
principle commitment to the people of Colorado, I would do everything I 
could to balance the Federal budget. That is why I am so proud to stand 
here today.
  The process of balancing the budget began last fall with the Contract 
With America. Despite intense criticism from the media and the 
liberals, the voters liked our contract, and they elected the first 
Republican Congress in 40 years.
  After we won our majority, we did something really shocking: we kept 
our contract. The pundits said we never would. They said we couldn't 
actually balance the budget. They were wrong.
  Immediately after the election, those of us on the Budget Committee 
set to work on a massive 6-year plan to restore fiscal discipline to 
our Government. We worked through the spring under the enthusiastic 
leadership of our Chairman John Kasich. We never gave up.
  This plan was then endorsed by our full conference and implemented by 
the Appropriations Committee and the authorizing committees. It was a 
monumental achievement. It is the proudest achievement that I have been 
part of in my 5 years in Congress.
  Today, we will make history, we will balance the Federal budget for 
the first time in 33 years.
  This new Congress has kept its commitment to our children and 
grandchildren. We said we would balance the budget, and we did it. The 
only remaining obstacle to a balanced budget is President Clinton. He 
has stated time and time again that he supports a balanced budget. 
Again, the truth will come out this weekend when he is presented with 
this plan. He has no intention of balancing the budget.
  Judging by the rhetoric of those who oppose this plan one might get 
the impression that it contains devastating cuts. This charge indicates 
how far removed from reality the defenders of deficits have drifted. 
This budget does not cut spending at all, it simply slows the rate of 
increase.
  Let me review some very important numbers. Over the last 7 years 
Federal spending totaled $9.5 trillion. Over the 7 years of this 
balanced budget plan, 1996-2002, the Federal Government will spend a 
total of over $12 trillion. Where I come from that is an increase, and 
it is a very substantial one.
  Even the Washington Post has recognized the courage of our budget, 
particularly in the area of Medicare. We have made very modest changes 
in Medicare, and in the process we have saved the program from 
bankruptcy. Spending per beneficiary will rise from the current $4,800 
to $6,700 per year. Let me quote from today's Post editorial:

       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.

  Mr. Speaker, we know the Democrats have already played the Medicare 
card, let's just 

[[Page H13203]]
hope they don't win. We want to save Medicare, our opponents want to 
postpone the tough choices for another day. By then it may be too late.
  It is important to keep in mind why we must balance the budget. This 
endeavor is about much more than numbers. It is about the future 
standard of living for our children.
  I have been particularly gratified by the large number of letters I 
have received from constituents who say ``just do it.'' They realize 
that some sacrifice will be required of them, but they want the budget 
balanced.
  Last year, we made a Contract With America. This balanced budget 
represents the very essence of that contract--a Federal Government that 
will be smaller, less intrusive, and more efficient.
  We have kept our contract, and this has restored faith in our form of 
government. It proves that Promises Made--Promises Kept was much more 
than just another campaign slogan.
  Mr. DOYLE, Mr. Speaker, when I came to Congress last January the 
people sent me here with instructions to stop the partisan bickering 
and work toward solutions. The people of western Pennsylvania continue 
to tell me that they want a balanced Federal budget. Well this Democrat 
supported a Balanced Budget Amendment which the other body did not 
pass. This Democrat supported a plan to balance the budget in 7 years 
which did not include a $245 billion tax cut when we can least afford 
one. The Gingrich budget is not fair and is not one I can support. 
People in western Pennsylvania do not understand why one-half of the 
burden is placed on senior citizens and students, while one-half of 
those who benefit from the tax cuts have annual incomes or more than 
$100,000. The American people are willing to share the sacrifice for as 
many years as it takes to balance the budget, but they will not support 
a budget that unfairly targets senior citizens, students, and low-
income families, to award a tax cut for those with upper incomes. Let's 
stop the partisan grandstanding and work together to find a fair budget 
that can win the long-term support of the American people. Mr. Speaker, 
I urge my colleagues to defeat the Gingrich budget.
  Mr. COYNE. Mr. Speaker, I rise today to oppose this conference report 
on the budget reconciliation bill.
  The core provisions of the bill are still the same as the bill passed 
by the House. The conferees cut Medicare, Medicaid, antipoverty 
programs, and the earned income tax credit deeply in order to pay for 
tax cuts that primarily benefit the well-to-do. This legislation makes 
life more difficult for the most vulnerable members of our society in 
order to provide benefits to people who need help the least. 
Consequently, this bill is still completely unacceptable.
  The conference report on reconciliation contains $80 billion in cuts 
in welfare and $30 billion in cuts in the earned income tax credit. The 
low-income housing tax credit is eliminated after 1997. Most low-income 
working families will not be helped by the bill's much-touted family 
tax credit. That is no way to make work pay. Republicans used to say 
``a hand-up, not a hand-out''. Now that they have won control of 
Congress and they do not have to worry about additional handouts, it 
appears that they want to withdraw the hand-up as well.
  The new majority wants to make $170 billion in cuts in Medicaid as 
well. Is there any doubt that the health of poor children, impoverished 
senior citizens, and disabled Americans will suffer as a result? Does 
anyone really believe that health care services in poor neighborhoods 
will improve after these changes are enacted? Does anyone really think 
that emergency rooms in inner cities will remain open when they lose 
money as a result of these cutbacks? These cuts are simply 
irresponsible.
  The Republicans in Congress want to make $270 billion in cuts in 
Medicare as well. These premium increases would be hard for many low-
income seniors to meet. Seven dollars a month does not sound like much 
to many people, but to someone living on a couple of hundred dollars a 
month, that premium increase would be a real hardship. Moreover, the 
shift to managed care that is encouraged--or should I say imposed--by 
the bill will compel many senior citizens to give up their choice of 
doctor in order to keep their medical bills from going up. They may 
also find it more difficult or expensive to see the specialist they 
need--or to get the most effective treatment for a particular ailment.
  In addition, I have deep concerns that the shift to managed care will 
actually end up costing the taxpayer money in the long run--rather than 
saving money. The proposed Medicare-plus system has the potential to 
create a real problem with adverse selection. Healthy individuals can 
be expected to take advantage of private managed care plans, leaving 
the older, sicker Medicare beneficiaries in the fee-for-service plan. 
The sickest 10 percent of Medicare beneficiaries account for 70 percent 
of total program costs. It is unlikely that any of these beneficiaries 
would switch to managed care plans, or to medical savings accounts 
linked to high-deductible insurance plans. The cost to Government of 
providing insurance to the sickest people will increase as the risk 
pool shrinks to the most expensive cases.
  In short, Mr. Speaker, this is no way to balance the budget. It is 
shortsighted, unwise, and inequitable. If this bill is adopted by 
Congress--and I anticipate that it will be--I hope that President 
Clinton will veto it. Then we can get down to the tough but necessary 
job of working out a fair, thoughtful, responsible budget plan.
  Mr. KIM. Mr. Speaker, I rise today in strong support of H.R. 2491, 
the Balanced Budget Act.
  The bill we are considering today is truly historic. For too many 
years, politicians have promised to balance the budget without 
achieving results to back up their rhetoric. The reason for this is 
simple: It is easy to promise to balance the budget, but it is 
incredibly hard to actually make the spending cuts needed to do so.
  But this year is different. Last November, the American people said 
enough to empty promises and hollow rhetoric and elected a Republican 
Congress committed to balancing the budget. And Republicans have put 
our money where our mouths are. We have brought to the floor today a 
bill that makes real spending cuts that the Congressional Budget Office 
has certified will balance the budget by 2002.
  Let me say that it hasn't been easy to get to this point. Almost 
every special interest group in this city that has a place at the 
Federal trough has tried to stop us. Since last January when 
Republicans took control, the media said it couldn't be done. And, most 
important, my Democratic colleagues have pulled out all the stops to 
protect the big government empire that they have built over the last 40 
years.
  But we have persevered, and we are here today with a bill that does 
exactly what we said we would do: Balance the budget by 2002.
  You don't have to take my word for it though--let's look at what the 
Balanced Budget Act really does:
  The Balanced Budget Act saves $900 billion--nearly a trillion 
dollars--over 7 years by reducing the rate of growth of--not cut--
Federal spending. That's because we don't actually have to cut Federal 
spending to reduce the deficit. All we have to do is let Government 
spending grow slower than tax revenues and we can balance the budget.
  And that's exactly what the Balanced Budget Act does. Under our plan, 
Federal spending will still grow--but by $900 billion less than it 
would if Congress did nothing. The result is a balanced budget in 2002.
  Much of these savings are achieved by reducing the rate of growth of 
entitlement programs. As my colleagues know, much of the reason for the 
current budget crisis has been the inability of Congress to address the 
exploding cost of entitlement programs. Spending on such programs as 
Medicare and Medicaid makes up over two-thirds of the Federal budget 
and will soon consume the entire budget if Congress does not act.
  The Balanced Budget Act finally addresses this problem. The bill 
fulfills our promise to leave Social Security alone but reforms all 
other entitlement programs.
  The most important reforms occur in Medicare and Medicaid. Under the 
bill, Medicare spending growth will be reduced from its current 10% 
growth rate to about 6% a year. Medicaid spending growth will be 
reduced from 11% to 7% a year. By reducing the rate of growth in this 
way, we will save $270 billion in the Medicare Program and $160 billion 
in Medicaid.
  More important, by slowing the growth of Medicare, the Balanced Act 
saves the Medicare Program from bankruptcy. As many of my colleagues 
are aware, the Medicare trustees, three of whom were appointed by 
President Clinton, recently warned that the Medicare trust fund would 
be bankrupt by 2002 if Congress did not act.
  In response to this dire situation, Republicans have proposed a plan 
to save Medicare from bankruptcy. By attacking waste and fraud, giving 
seniors the option of joint a private health insurance plan, and 
slowing the growth of payments to doctors and hospitals, the Balanced 
Budget Act keeps Medicare solvent until 2011--the year the baby boomers 


[[Page H13204]]
start to retire. In doing so, the Balanced Act ensures that Medicare 
will continue to be available for current and future generations of 
seniors.
  But make no mistake about it: Even with these growth reductions, 
spending will still grow considerably in Medicare. Per-person spending 
in Medicare will increase from $4,800 today to $6,700 in 2002--a 43 
present increase. Total spending on the Medicare Program will increase 
from $160 billion today to $247 billion in 2002. The fact is, under the 
Republican budget, Medicare will remain one of the fastest growing 
programs in the Federal budget.
  In short, the Balanced Budget Act imposes much needed restraint on 
the growth of Federal spending--while still allowing vital programs to 
grow substantially. In addition, the bill provides a reasonable and 
fair plan to protect Medicare from the financial disaster.
  But this bill does more than just reduce Federal spending and save 
Medicare: The Balanced Budget Act also provides much-needed tax relief 
for the middle class.
  As my colleagues know, this bill provides $245 billion in tax cuts 
targeted toward middle class families making less than $110,000 per 
year. This tax credit will provide $147 billion in tax relief for 
middle class families, making up 60 percent of the tax cuts in the 
bill. The bill also provides tax credits to help for health care 
expenses, establishes tax incentives to help small businesses, and 
makes needed reforms to estate tax rules. Finally, the bill 
substantially reduces capital gains taxes--which are taxes on job-
creating savings and investment.
  These tax cuts are reasonable and fair. Predictably, however, our 
opponents are trying to gain political advantage by accusing us of 
providing a tax cut for the rich. Let me assure you that nothing could 
be farther from the truth. Under our bill, 65 percent of the tax cuts 
will go to families making less than $75,000 per year. much of the rest 
of the tax cuts go toward helping small businesses or establishing 
incentives for the creation of middle class jobs.
  Finally, let's keep these tax cuts in perspective. While they are 
important for middle class families, they are not massive: The tax cuts 
in the Balanced Budget Act represent less than 2 percent of Federal 
revenues over the next 7 years.
  In short, the bill provides badly needed tax reductions that will 
help average Americans--particularly working families--make ends meet. 
These tax cuts are not a giveaway. They are a rebate to working 
Americans of some of the cost that liberal big government policies have 
imposed on them over the last 40 years.
  In sum, Mr. Chairman, the Balanced Budget Act is a reasonable and 
fair approach to balancing the Federal budget for the first time in a 
generation. The bill reduces the rate of growth of Federal spending 
while still preserving funding for vital programs. The bill provides 
much needed tax relief for the middle class, who for too long have 
shouldered too much of the cost of big government. and, most important, 
the bill keeps our promise to balance the budget by 2002.
  Finally, let me finish by saying a few words about why we are 
undertaking this massive and politically risky project. the fact is, if 
we do not get Federal spending under control, we risk leaving our 
children and grandchildren with a mountain of Federal debt that will 
never be able to be repaid. If we do nothing, our children will face a 
country with higher interest rates, lower economic growth and fewer 
jobs than there would be under a balanced budget. If we do nothing, the 
safety net that supports the poor, the elderly, and the disadvantaged 
will collapse under the sheer weight of Government debt.
  My Democratic colleagues accuse us of lacking compassion, but I say 
to them: How compassionate is it to borrow from our children and leave 
them to pay the bills? How compassionate is it to duck the hard 
choices, just to make things more difficult for those who come after 
us?
  Mr. Chairman, it is time to face the music. Balancing the budget will 
not be easy or painless, but it must be done. The Balanced Budget Act 
is the way to do it. I urge my colleagues to support the bill.
  Mrs. VUCANOVICH. Mr. Speaker, I rise in strong support of the 
conference report to H.R. 2491, the Seven-Year Balanced Budget Act.
  We are balancing the budget today, Mr. Chairman, and instead of fear 
mongering and scare tactics, we have solutions. We have solutions to 
preserving and protecting Medicare, we have solutions to reducing the 
overwhelming tax burden on every American, we have solutions to 
returning government back to the States where it serves the people 
best, and, most important, we have solutions to eliminating this 
crushing debt our generation is in danger of leaving our children and 
grandchildren.
  Mr. Chairman, in balancing the budget, we have listened to the pleas 
of the Clinton Medicare Board of Trustees and we save Medicare from 
bankruptcy. Seniors can breathe easy knowing that Medicare will be 
there for them and their children when they need it. Seniors will get 
increased benefits and will have more choice of how to obtain health 
care services.

  On a personal note, Mr. Speaker, this bill provides Medicare coverage 
for oral cancer drugs for breast cancer patients, something the 
President has vetoed twice in the past week. As a breast cancer 
survivor, I am thankful that we are giving women another chance at 
life.
  A good life is what we are trying to give all of our citizens. That 
is why the biggest falsehood of all is that this bill will hurt our 
children and our poor. The welfare and Medicaid provisions ensure that 
Federal funding goes to people who need it, rather than endless 
bureaucracies. States can finally put their ideas to the test while 
ensuring the health and welfare of low income children, seniors, and 
the disabled. And the taxpayer can feel good about providing a hand up, 
not a handout.
  This is a historic vote, Mr. Chairman, because this vote will decide 
whether we leave our children the American dream or hand them the 
American debt. The choice is simple. Support this bill. Thank you Mr. 
Chairman.
  Mr. SKAGGS. Mr. Speaker, I support balancing the budget. But I 
support doing it the right way. So, I cannot support this conference 
report.
  Last month, when the House debated this bill, I voted to balance the 
budget the right way. I voted for the Democratic alternative. That 
alternative provided for balancing the budget in 7 years, without tax 
cuts we can't now afford, without undue cuts in Medicare and Medicaid, 
without raising taxes on lower income workers, and while making 
possible investments we need to keep our country strong in the future.
  This is sharp contrast to this Republican bill, which I oppose. Under 
the Republican plan, the budget would be balanced in 7 years, but there 
the similarity ends. It includes a tax cut we cannot afford, most of 
which goes to the wealthy who least need it. And it sacrifices 
important parts of our future--including the future of our young people 
and priceless natural resources--for short-term savings.
  To pay for their tax cuts, the Republicans' bill cuts Medicare and 
Medicaid more than necessary, with over half of the total spending cuts 
coming from those important programs. It also actually raises taxes on 
lower income workers, by revising the earned income tax credit. This 
will hurt 4 million low-income childless workers. It will also mean 
that some surviving spouses, who get Social Security, will lose EITC 
dollars, as will some older people with dependents--including some 
grandparents who care for dependent grandchildren. Remember, the earned 
income tax credit goes only to working people with low incomes--it 
helps keep people on the job, not on welfare.

  The Republican bill also makes deep cuts in student loans, by nearly 
$10 billion over the next 7 years. In other words, it reduces our 
investment in America's future and makes it more difficult for our 
young people to get the education and training that they will need to 
get good jobs in an increasingly competitive marketplace.
  And the Republican bill would sacrifice the wilderness and wildlife 
values of the Arctic National Wildlife Refuge's coastal plain, by 
opening it to oil and gas drilling--hoping for a gusher of oil company 
cash and hoping that the State of Alaska will accept a smaller share of 
that gusher than is now provided for by law.
  Compared to this Republican bill, the substitute I supported would 
have cut about $100 billion less in Medicare, $100 billion less--that 
is, less than half as much--in Medicaid, $40 billion less in direct 
assistance to individuals, $10 billion less in student loans, $9 
billion less in agriculture, and about $80 billion less in other 
discretionary spending. It would not have opened the Arctic refuge's 
coastal plain. And it still would have balanced the budget in 7 years.
  Some may ask, how could that be possible? Mr. Speaker, it is 
possible. It's possible if we refuse to dig the hole of Federal debt 
deeper--that is, by refusing to cut taxes before we can afford to. And 
by ending billions of dollars' worth of particularly ill-advised 
subsidies to corporations.
  That's the right way. That's the way that reflects better priorities 
and wiser policies than the Republican bill. That's what we should do.
  We should maintain the earned income tax credit, which used to enjoy 
strong bipartisan support as an effective, nonbureaucratic way to 
enable lower income people to work their way into the middle class. We 
should close tax loopholes that let multinational corporations 
manipulate their books to avoid paying 

[[Page H13205]]
their fair share of U.S. taxes and end other corporate welfare.
  We should protect Medicare and Medicaid, and not--like the 
Republicans--be driven to cut them deeper than necessary in order to 
pay for a misguided tax cut.
  We should provide adequate resources for nutrition, education, 
transportation, research, and crime control. We should make real 
welfare reforms, with flexibility for States, a crackdown on fraud, and 
enough funding for day care, training, and the other needs of people 
moving off welfare and into jobs. We should maintain funding for 
student loans, while protecting the benefits of Federal retirees and 
veterans' compensation.
  We should protect the wilderness and wildlife of America's last 
untouched stretch of Arctic coastline, the coastal plain of the Arctic 
National Wildlife Refuge, and we should put an end to corporate 
welfare, including bargain-basement sales of the gold, silver, and 
other hardrock mineral resources of our public lands. The Republican 
bill goes the wrong way here.
  So, Mr. Speaker, while this Republican bill is called a 
reconciliation measure, I can't be reconciled into thinking that it's 
anything but bad for the country. We can do better--in fact, we have a 
duty to do better. We should reject this Republican bill and instead do 
what should be done--balance the budget, but the right way.
  Mr. PORTER. Mr. Speaker, this is a defining moment in our Nation's 
history, a moment when we say goodbye to the irresponsibilities of the 
past and hello to living within our means, to smaller, more efficient 
government, to spending targeted at achieving results, and ultimately 
to lower taxes.
  We have had a welfare system that doesn't work, and this bill aims to 
reform it. We have had student financial assistance that leaves the 
taxpayers holding the bag on millions of dollars of loan defaults, and 
this bill aims to fix that.
  We have had a Medicare system that while providing the best health 
care in the world has done so at an unsustainable cost that we know we 
must change to protect the integrity of the system, and this bill aims 
to provide increases in Medicare funding but at a slower rate and 
choices for seniors in health care delivery that will help to drive 
down costs. We have had a Medicaid system whose costs have spiraled out 
of control leaving many of our States' budgets in shambles, and this 
bill leaves the States essentially in charge of how best to serve their 
poor but with substantial Federal help.
  But, most of all, this legislation defines a change from serving each 
special interest in our country regardless of the cost and asking our 
children and grandchildren to pay the bills to being responsible for 
the bottom line and paying ourselves for the benefits we receive. 
America's private sector has largely reinvented itself in the wake of 
the cold war victory of freedom over communism. Now, government must do 
the same thing. It will mean higher standards of personal 
responsibility for each of our people, higher standards that will 
change our society and make certain that we remain the strongest 
economy on Earth and preserve the compact that each succeeding 
generation will live better than the last.
  Many, unfortunately our President among them, apparently will have to 
be carried kicking and screaming into this future and find it extremely 
difficult to give up the special interest politics that has dominated 
America for so long a time. They refuse to understand that with rights 
go responsibilities and with all the rights and privileges enjoyed by 
the American people, all of us have responsibility for the Nation as a 
whole. All of us must give something of ourselves to make our society 
work. That's what this debate is all about. A balanced budget, yes, but 
more, a profound change in personal accountability for every person in 
our country that, in the end, will make it better and ensure the 
opportunities and mobility which are the genius of our system.
  The SPEAKER pro tempore (Mr. Boehner). Pursuant to House Resolution 
272, the previous question is ordered on the conference report.
  The SPEAKER pro tempore. The question is on the conference report.
  Pursuant to House Resolution 245, the yeas and nays are ordered.
  The vote was taken by electronic device, and there were--yeas 237, 
nays 189, not voting 7, as follows:

                             [Roll No. 812]

                               YEAS--237

     Allard
     Archer
     Armey
     Bachus
     Baker (CA)
     Baker (LA)
     Ballenger
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Bereuter
     Bilbray
     Bilirakis
     Bliley
     Blute
     Boehlert
     Boehner
     Bonilla
     Bono
     Brownback
     Bryant (TN)
     Bunn
     Bunning
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Canady
     Castle
     Chabot
     Chambliss
     Chenoweth
     Christensen
     Chrysler
     Clinger
     Coble
     Coburn
     Collins (GA)
     Combest
     Cooley
     Cox
     Crane
     Crapo
     Cremeans
     Cubin
     Cunningham
     Davis
     Deal
     DeLay
     Diaz-Balart
     Dickey
     Doolittle
     Dornan
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Ensign
     Everett
     Ewing
     Fawell
     Fields (TX)
     Flanagan
     Foley
     Forbes
     Fowler
     Fox
     Franks (CT)
     Franks (NJ)
     Frelinghuysen
     Frisa
     Funderburk
     Gallegly
     Ganske
     Gekas
     Geren
     Gilchrest
     Gillmor
     Gilman
     Gingrich
     Goodlatte
     Goodling
     Goss
     Graham
     Greenwood
     Gunderson
     Gutknecht
     Hall (TX)
     Hancock
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Heineman
     Herger
     Hilleary
     Hobson
     Hoekstra
     Hoke
     Horn
     Hostettler
     Houghton
     Hunter
     Hutchinson
     Hyde
     Inglis
     Istook
     Johnson (CT)
     Johnson, Sam
     Jones
     Kasich
     Kelly
     Kim
     King
     Kingston
     Klug
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Laughlin
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Lightfoot
     Linder
     Livingston
     LoBiondo
     Longley
     Lucas
     Manzullo
     Martini
     McCollum
     McCrery
     McDade
     McHugh
     McInnis
     McIntosh
     McKeon
     Metcalf
     Meyers
     Mica
     Miller (FL)
     Molinari
     Montgomery
     Moorhead
     Morella
     Myers
     Myrick
     Nethercutt
     Ney
     Norwood
     Nussle
     Oxley
     Packard
     Parker
     Paxon
     Petri
     Pombo
     Porter
     Portman
     Pryce
     Quillen
     Quinn
     Radanovich
     Ramstad
     Regula
     Riggs
     Roberts
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roth
     Roukema
     Royce
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaefer
     Schiff
     Seastrand
     Sensenbrenner
     Shadegg
     Shaw
     Shays
     Shuster
     Skeen
     Smith (MI)
     Smith (TX)
     Smith (WA)
     Solomon
     Souder
     Spence
     Stearns
     Stockman
     Stump
     Talent
     Tate
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Thomas
     Thornberry
     Tiahrt
     Torkildsen
     Upton
     Vucanovich
     Waldholtz
     Walker
     Walsh
     Wamp
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     White
     Whitfield
     Wicker
     Wolf
     Young (AK)
     Young (FL)
     Zeliff
     Zimmer

                               NAYS--189

     Abercrombie
     Ackerman
     Andrews
     Baesler
     Baldacci
     Barcia
     Barrett (WI)
     Becerra
     Beilenson
     Bentsen
     Berman
     Bevill
     Bishop
     Bonior
     Borski
     Boucher
     Browder
     Brown (CA)
     Brown (FL)
     Brown (OH)
     Bryant (TX)
     Cardin
     Chapman
     Clay
     Clayton
     Clement
     Clyburn
     Coleman
     Collins (MI)
     Condit
     Conyers
     Costello
     Coyne
     Cramer
     Danner
     de la Garza
     DeFazio
     DeLauro
     Dellums
     Deutsch
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doyle
     Durbin
     Edwards
     Engel
     Eshoo
     Evans
     Farr
     Fattah
     Fazio
     Filner
     Flake
     Foglietta
     Ford
     Frank (MA)
     Frost
     Furse
     Gejdenson
     Gephardt
     Gibbons
     Gonzalez
     Gordon
     Green
     Gutierrez
     Hall (OH)
     Hamilton
     Hastings (FL)
     Hefner
     Hilliard
     Hinchey
     Holden
     Hoyer
     Jackson-Lee
     Jacobs
     Jefferson
     Johnson (SD)
     Johnson, E. B.
     Johnston
     Kanjorski
     Kaptur
     Kennedy (MA)
     Kennedy (RI)
     Kennelly
     Kildee
     Kleczka
     Klink
     LaFalce
     Lantos
     Levin
     Lewis (GA)
     Lincoln
     Lipinski
     Lofgren
     Lowey
     Luther
     Maloney
     Manton
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy
     McHale
     McKinney
     McNulty
     Meehan
     Meek
     Menendez
     Mfume
     Miller (CA)
     Minge
     Mink
     Moakley
     Mollohan
     Moran
     Murtha
     Nadler
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Orton
     Owens
     Pallone
     Pastor
     Payne (NJ)
     Payne (VA)
     Pelosi
     Peterson (FL)
     Peterson (MN)
     Pickett
     Pomeroy
     Poshard
     Rahall
     Rangel
     Reed
     Richardson
     Rivers
     Roemer
     Rose
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Sawyer
     Schroeder
     Schumer
     Scott
     Serrano
     Sisisky
     Skaggs
     Skelton
     Slaughter
     Smith (NJ)
     Spratt
     Stark
     Stenholm
     Stokes
     Studds
     Stupak
     Tanner
     Tejeda
     Thompson
     Thornton
     Thurman
     Torres
     Torricelli
     Towns
     Traficant
     Velazquez
     Vento
     Visclosky
     Volkmer
     Ward
     Waters
     Watt (NC)
     Waxman
     Williams
     Wilson
     Wise
     Woolsey
     Wyden
     Wynn
     Yates

                             NOT VOTING--7

     Brewster
     Collins (IL)
     Fields (LA)
     Harman
     McDermott
     Neumann
     Tucker

                              {time}  1528

  So the conference report was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  
[[Page H13206]]


                              {time}  1530
                             GENERAL LEAVE

  Mr. KASICH. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days in which to revise and extend their remarks and 
include extraneous material on the conference report on H.R. 2491, just 
considered.
  The SPEAKER pro tempore (Mr. LaHood). Is there objection to the 
request of the gentleman from Ohio?
  There was no objection.

                          ____________________