[Congressional Record Volume 141, Number 183 (Friday, November 17, 1995)]
[House]
[Pages H13295-H13297]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE BALANCED BUDGET ACT

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Connecticut [Mr. Shays] is recognized 
until midnight as the designee of the majority leader.
  Mr. SHAYS. Mr. Speaker, I guess I have 12 more minutes, and I am 
delighted that you are willing to stay and allow me to have this 
special order with my friend from Kentucky. I would just like to 
express extraordinary gratitude for the opportunity I have, and my 
colleagues have, to serve in this House at this historic moment in the 
history of our country.
  For the last 30 years, our national debt has gone up from $375 
billion to over $4,900 billion, a 13-fold increase. During a good part 
of that time, I served in the State House and I wondered how Congress 
could do such a thing to its children. I could not comprehend how they 
could do it. The White House as well, of both parties.
  We have seen this incredible deficit increase, continue every year 
adding to the national debt 13-fold and this Congress has decided to 
put an end to it. Today, we passed the Balanced Budget Act of 1996, 
which gets us on a glidepath to a balanced budget in 7 years.

                              {time}  2350

  When we first started out last election, we had a Contract With 
America and a number of people said that will cause the defeat of 
moderate Republicans in particular and that it was not a very wise 
thing to have done politically.
  I remember being asked by one of my editorial boards how I could have 
signed it. I asked this question, what do you think of the Contract 
With America that the majority party at that time has? And there was 
deafening silence because they did not have any program in the opening 
day for reforms.
  They did not have 10 major reforms during the first 100 days. They 
had nothing. I wondered why people would be critical of a contract that 
did not criticize the President of the United States, did not criticize 
the Democrats in Congress, but was a positive plan for what we wanted 
to accomplish.
  After we got elected with no incumbent Republican losing, fighting 
for a very positive program, people said, well, you used it to get 
elected but you will not implement it.
  We started to implement it. And then they said, well, you are not 
going to be able to, moderates, of which I think I am one, pretty much 
more in the center, and I think my colleague from Kentucky would 
probably consider himself more to the right and more conservative, they 
said, you all will not get along well together.
  We get along tremendously, because there is so much common ground 
that 

[[Page H 13296]]
binds us in wanting to save this country from bankruptcy and to do two 
other things. We want to get our financial house in order and balance 
our Federal budget. We want to save our trust funds, particularly 
Medicare. And the third thing we want to do is we want to change and 
transform this care-taking social and corporate welfare state into what 
I would call a caring opportunity society, a word that we would hear 
conservatives use more than a moderate. But that is what we want. We 
want opportunity in this country. So we started to implement this plan 
and getting along well with each other for a common purpose.
  Then they said, well, you will not get along with the Senate. 
Frankly, we get along quite well with the Senate, as I think my 
colleague will agree. Then they said, well, you voted for a balanced 
budget amendment but you would not be so foolish as to try to pass 
a balanced budget in 7 years and take on all the special interests in 
the process. And we proceeded to do that.

  If someone wants to know the determination we have, I would describe 
it this way: We left the old world and we traveled by ship to the new 
world and we got to the new world. We set out to conquer this new 
world, knowing that we would never go back to the old world. We burned 
our ships. There is no retreat. We do not want to go back to the old 
world. We want to save this country from bankruptcy and transform this 
corporate and welfare state into an opportunity society.
  Before yielding to my colleague in just a few seconds here, a few 
minutes, we proceeded to take on every special interest in the process.
  I want to express gratitude to the Washington Post, which in a sense 
has been watching us for the past nine months and has been critical of 
certain things we have done. But they had an editorial yesterday 
entitled, The Real Default. And I just will read what they said about 
what we have attempted to do.
  They started, ``The budget deficit is the central problem of the 
Federal Government and one from which many of the country's other, most 
difficult problems flow. The deficit is largely driven in turn by the 
cost of the great entitlements that go not to small special classes of 
rich and poor but across the board to almost all Americans in time.''
  Then it goes on to say, ``Bill Clinton and the congressional 
Democrats were handed an unusual chance this year to deal 
constructively with the effect of Medicare on the deficit and they blew 
it. The chance came in the form of the congressional Republican plan to 
balance the budget over 7 years.''
  Then they said, finally, ``Some other aspects of the plan deserve to 
be resisted, but the Republican proposal to get at the deficit partly 
by confronting the cost of Medicare deserves support.''
  The Washington Post grades us pretty tough. They have given us an A 
plus. I just want to express my gratitude to the people at the Post for 
recognizing that there has been incredible courage on the part of all 
Republicans, conservatives and moderates, to save this country from 
bankruptcy.
  Mr. Speaker, I yield to the gentleman from Kentucky [Mr. Lewis].
  Mr. LEWIS of Kentucky. Mr. Speaker, it is absolutely true. We are 
unified in this effort. We realize that we have this historic 
opportunity and now is the time. We have a window of opportunity. I 
believe with all my heart if we do not do it now, that we are not going 
to have the opportunity. I do not know when we draw the line and say, 
after this there is no hope. But we are going to reach a time when the 
debt is going to get out of control. The interest will be out of 
control. We will not be able to solve the problem.

  I would like to ask the gentleman, do you not feel that this is it, 
this is our chance? This is our opportunity.
  Mr. SHAYS. This is truly an historic moment for all of us and an 
opportunity that I think my colleague from Kentucky would agree has 
presented itself after a tremendous amount of work. We want to seize 
this opportunity. When we talk about getting our financial house in 
order and balancing our budget, we are doing it by still allowing 
government to grow but in many cases we are slowing the growth of 
government. In some cases we are eliminating programs, cutting back in 
others, consolidating departments, eliminating some units within 
departments. Having real cuts, spending less the next year, eliminating 
the Department of Commerce as one of our first steps in consolidation.
  In other cases, with entitlements, we are allowing them to grow. 
Medicare and Medicaid will grow significantly. We have had talk about 
the earned income tax credit and talk on the other side that we were 
cutting this program, when in fact it is going to go from $19 billion 
to $27 billion, excuse me, $25 billion, an increase of 28 percent, not 
a cut. Only in Washington, when you spend so much more, do people call 
it a cut. The school lunch program is going to go from $6.3 billion to 
$7.8 billion, an increase. The student loan program is going to go from 
$24 billion to $36 billion.
  I do not know how my colleagues on the other side of the aisle can 
say it with a straight face and say we are cutting the student loan 
program when it is going to grow, 6.7 million students, it is going to 
grow to 8.4 million. Medicaid is going to grow from $89 billion to $127 
billion. Medicare from $178 billion to $289 billion. We are cutting 
programs. We are slowing the growth of others. But these programs have 
significant increases. Yet our colleagues call it a cut.
  Ultimately in 7 years, we will have slowed the growth of spending so 
it will intersect with revenue and we will have no more deficits. That 
is an important element of this. But another important element of it 
is, in the process of reducing our government, we are also going to 
transform it from a welfare state, both on social programs and even on 
corporate programs.

  We are going to transform it into an opportunity society. We are 
going to teach people how to grow the seeds instead of just giving them 
the food.
  Mr. LEWIS of Kentucky. Mr. Speaker, that is exactly what we are 
doing. We will not ever forsake those who truly need help. We are going 
to help those. There is always going to be that social safety net for 
those who cannot help themselves. But we want to be a helping hand up 
and out of poverty, not keeping them in poverty with the welfare system 
that holds people down and keeps them dependent upon the government.
  We want to free people. We want to allow them to achieve all the God-
given gifts that they have to be the best that they can be in this 
wonderful country that we have. I think to be criticized and to be 
called mean-spirited and other words that have been applied to us for 
trying to save this country by balancing the budget is truly wrong. We 
are doing what we feel and what the American people have asked us to 
do. It will save this country.
  Mr. SHAYS. Mr. Speaker, the bottom line is, we are going to get our 
financial house in order. We are going to save our trust funds in the 
process. We are going to transform this welfare state into an 
opportunity society. And in the process, we are going to save America.
  Mr. Speaker, I include for the Record the editorial to which I 
referred.

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

                            The Real Default

       The budget deficit is the central problem of the federal 
     government and one from which many of the country's other, 
     most difficult problems flow. The deficit is largely driven 
     in turn by the cost of the great entitlements that go not to 
     small special classes of rich or poor but across the board to 
     almost all Americans in time. The most important of these are 
     the principal social insurance programs for the elderly, 
     Social Security and Medicare. In fiscal terms, Medicare is 
     currently the greatest threat and chief offender.
       Bill Clinton and the congressional Democrats were handed an 
     unusual chance this year to deal constructively with the 
     effect of Medicare on the deficit, and they blew it. The 
     chance came in the form of the congressional Republican plan 
     to balance the budget over seven years. Some other aspects of 
     that plan deserved to be resisted, but the Republican 
     proposal to get at the deficit partly by confronting the cost 
     of Medicare deserved support. The Democrats, led by the 
     president, chose instead to present themselves as Medicare's 
     great protectors. They have shamelessly used the issue, 
     demagogued on it, because they think that's where the votes 
     are and the way to derail the Republican proposals generally. 
     The president was still doing it this week; a Republican 
     proposal to increase Medicare premiums was one of the reasons 
     he alleged for the veto that has shut down the government--
     and never mind that he himself, in his own budget, would 
     countenance a similar increase.

[[Page H 13297]]

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