[Congressional Record Volume 141, Number 184 (Saturday, November 18, 1995)]
[Senate]
[Pages S17446-S17447]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          THE BALANCED BUDGET

  Mr. CHAFEE. I thank the Chair. I want to return to the balanced 
budget amendment discussions that we have had here previously. I 
listened to some of the discourse that took place here. I thought there 
was a lot of common sense here on the floor.
  The Senator from Georgia spoke, the Senator from Nevada, the two 
Senators from Nebraska and others. I thought what was said here gives 
us ground for arriving at a very reasonable compromise in the days 
ahead.
  Clearly, the President will veto the balanced budget amendment. We 
all accept that. The question is, where do we go from here? Mr. 
President, I want to continue on the discussion that took place here 
previously.
  First of all, it seems to me to ask for the balanced budget in 7 
years is a reasonable request. I think the Republicans and indeed all 
of us have a sound basis for saying, ``Look, 7 years is not too early 
to balance this budget.'' So, I think it is quite proper for the 
Republicans to hang firm on that particular position. I heard the 
Senator from Georgia say that 7 years is reasonable.
  What about the other side? I heard discussion on the tax cut. I think 
it is perfectly reasonable for others to say we have to back off that 
tax cut. Now, should we back off to zero tax cut? Perhaps that is going 
too far. Perhaps we could settle on something in the neighborhood of 
what the President himself has discussed. As I recall, that was 
something in the area of $107 billion, if I am not mistaken.
  I am not in favor of the tax cut, period, never have been. 
Nonetheless, there are those, particularly in the other body, who feel 
very, very strongly about having a tax cut. So, perhaps a suitable 
compromise would be to back off to the area of the vicinity where the 
President himself discussed a tax cut.
  What about some of the other areas? I certainly hope that those who 
have discussed Medicare here will recognize that the 31.5 percent 
premium that we are now requiring for part B is a fair requirement, and 
it seems to me those who are talking about going down to 25 percent 
must recognize that that has to be picked up by the general treasury. 
That is where the money comes from.
  All of us have to use some common sense and reasonableness here, but 
I have great difficulty understanding those who would want to take the 
premium, in effect, have it dropped--have those who are receiving the 
benefits of Medicare, an entitlement that goes right across the board 
to everybody, rich or poor--to say that they are going to pay less for 
their part B premium. So I hope that we would agree on the 31.5 
percent.
  Now, I have not heard a dissenting voice that we should not go to the 
affluence testing. We can argue about that--whether it should be 
$50,000 for the individual and $100,000 for the married couple and 
phasing out--we can argue over that. Clearly, going to affluence 
testing makes a lot of sense.
  Now, the CPI. I hope we will do the recomputation of the CPI. That is 
perfectly fair. If we are paying too much, we ought to recognize it.
  Another area that I think the Republicans should give ground on is on 
the Medicaid and the reductions that are provided in that--reductions 
from rate of growth, yes; but I have grave concerns over whether in the 
Medicaid we are keeping a suitable safety net for those lower income 
individuals in our society.
  Yes, we are protecting children up through the age of 12 at 100 
percent of poverty or less. But is that enough? As you know, now it 
goes up every year so that we cover those at the age of 13, 14, and so 
forth up to the age of 18 by the year 2002.
  I, personally, would hope we would go higher than the current 
category, which as I said is up to the age of 13 at 100 percent of 
poverty or less.
  Mr. President, I think we have the ground here, from the discussions 
I have heard on the floor, for arriving at a reasonable compromise. To 
get any compromise, people have got to go in with a certain amount of 
flexibility.
  If the Republicans say ``Not a nickel reduction in the tax cut that 
we have provided,'' or if the Democrats say ``Nothing doing on the year 
2002; nothing doing there,'' if each of us get dug in, we will not get 
anywhere.
  I think we have the basis here for a reasonable compromise. I hope 
the administration and the negotiators from the House and the Senate 
would pay attention to the suggestions made here on the floor today.
  Mr. KERRY. Will the Senator yield?
  Mr. CHAFEE. I am happy to yield to the Senator.
  Mr. KERRY. I am delighted to hear our friend on the other side of the 
aisle talk common sense, which seems to have been lacking here in much 
of the dialog over the last days. Many of us over here feel very 
strongly that the issue of a tax cut in the face of this deficit is a 
morality question, but I think the Senator from Rhode Island has 
appropriately suggested, we all need some flexibility.
  I ask the Senator, then, does he not think, if there ought to be some 
tax cut, if that is part of the gospel here, does the Senator not agree 
that at least that tax cut ought to be targeted toward those Americans 
who can most benefit from it and also most need it?
  Mr. CHAFEE. There is no question that that is right.
  I must say as we start on this, if I could use a word of caution, I 
hope that we would avoid the word ``morality'' here, that one side is 
moral and the other side is immoral. I do not want to pursue this too 
far, but I think all of us have to watch our rhetoric--me, us on this 
side, all of us in this Chamber--if we are going to arrive at a 
satisfactory resolution of these very difficult problems.
  The answer to the question, have a tax cut to help those who most 
need it--sure. Of course, we recognize those who most need it are not 
paying much of a tax to start with, so how much a reduction would be of 
assistance to those individuals, I do not know.
  I think we also have to recognize--as I said before, I am not for the 
tax cut. But there are those who feel very, very deeply about it, 
particularly in the other body. That does not mean that we cannot back 
off from the size of the tax cut that was proposed.
  If the Senator from Massachusetts has some suggestions on how we 
could reduce the tax cut and make it directed 

[[Page S 17447]]
more toward the group he was suggesting, I think that sounds sensible 
to me.
  Mr. KERRY. Mr. President, I believe there was an effort on the floor 
to try to suggest that the tax cut ought to go to people--and I 
understand the Senator is absolutely correct, if you are talking about 
the folks under $30,000 with the earned-income tax credit, you are 
obviously talking about a group of people who also need an additional 
amount of money that comes in the form of a check at the lower end of 
that scale in order to make it meaningful.
  That is not what we are talking about. There was a suggestion on the 
floor of the Senate that the tax cut ought to be limited to those 
people earning $100,000 or less, and that can certainly be framed in a 
combination of payroll credit-family credit or any combination thereof, 
but at least in terms of keeping faith with the notion of fairness 
there is a clear juxtaposition, is there not, between those earning 
$100,000 or less, a broad-based capital gains tax that might go to old 
investments versus new investments?
  Or, for instance, an estate tax break that goes to people only with 
$600,000 or $700,000 of estate value. It seems those are difficult 
fairness issues to try to suggest to the American people that we are 
approaching this seriously.
  Mr. CHAFEE. I agree with the Senator from Massachusetts that we want 
to look at these. We want to be careful we are not giving tax breaks to 
the very wealthy when we are trying to balance this budget.
  One of the suggestions that has come up here as I understand is that 
we really concentrate more on rewarding those who save. How can we do 
it? Should the interest on savings accounts be tax-exempt? Or reinstate 
the IRA's for those who previously have been eclipsed because they had 
pension plans of some kind?
  All of those I think are fruitful ideas. All I am saying is, I think 
we have the basis here for a resolution to this problem. Again, it will 
require all of us to back off from entrenched positions.
  I hope that the Democrats would agree to the 7-year time schedule. I 
think that is a reasonable request. If we cannot do this by the year 
2002, then we have real problems in this country.
  We have no war. We are in peacetime. The country is relatively 
prosperous. Clearly, we ought to be able to pay our bills and have 
outgo match income in the year 2002.
  Mr. KERRY. Will the Senator yield?
  The PRESIDING OFFICER. The Chair will advise the Senator from Rhode 
Island his time has expired.
  Mr. GLENN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio.

                          ____________________