[Congressional Record Volume 141, Number 184 (Saturday, November 18, 1995)]
[Senate]
[Pages S17451-S17454]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           BUDGET PRIORITIES

  Mr. KENNEDY. I am very hopeful that we can reach a satisfactory 
compromise today on the legislation needed to end this indefensible 
shutdown of the Federal Government and move on to the real debate over 
what this controversy is all about.
  We all agree on the need to balance the Federal budget. The 
fundamental issue is not whether or when to balance it, but how to 
balance it fairly.
  President Clinton is right to take a strong stand against the 
Republican plan. That plan is based on the same old Republican trickle-
down ideology of plums for the rich and crumbs for everyone else. The 
Republican plan is filled to overflowing with tax breaks for the 
wealthy and give-aways to powerful special interest groups. And to pay 
for all those give-aways, the Republican plan imposes heavy burdens on 
senior citizens, students, the needy, the environment, and working 
families struggling to make ends meet.
  The American people did not vote for priorities like that in 1994, 
and they are not going to vote for priorities like that in 1996.
  You cannot judge the Republican book by its title. They call it the 
Balanced Budget Act of 1995. That soothing title is a fraud. The 
Republican budget is a scorched-earth scheme that imposes unprecedented 
sacrifices on senior citizens, students, children, and working families 
in order to pay for lavish tax breaks for the wealthiest individuals 
and corporations in America. It is a program to bash Medicare, slash 
education, and trash the environment, and it eminently deserves the 
veto it is about to get.
  The Republican budget raids private pension funds, and slams the door 
of colleges and universities on the sons and daughters of working 
families. It dumps over a million more children into poverty in the 
misguided Republican version of welfare reform.
  It even raises taxes--yes, raises taxes--on those who can least 
afford it--the lowest income working Americans.
  I hope all those Florida Republicans who are voting in their straw 
poll today will ask why Senator Dole and Senator Gramm want to raise 
taxes on working Americans. How very Republican--tax breaks for the 
wealthiest families, and tax increases for working families.
  And for the wealthiest families of all, the Republicans leave no 
stone unturned. All year, Democrats have tried to close the most 
notorious tax loophole of all--the billionaire's tax loophole. That 
loophole lets wealthy Americans renounce their American citizenship and 
evade their fair share of taxes on the massive wealth they have 
accumulated in America.
  It is difficult to imagine a more obscene or less justified loophole. 
Every time we have challenged it in the Senate, the Senate has voted 
almost unanimously to close it tight--no ifs, ands, or buts.
  But once again, behind closed doors, the Republicans have quietly 
saved it. The billionaire's tax loophole is alive and well in this 
Republican bill. Shame on the Republicans for catering to billionaires 
and clobbering senior citizens on Medicare.
  The Republican attack on Medicare is unprincipled and unconscionable. 
Nothing in their budget better illustrates the harsh and extreme 
approach the Republicans are taking to the needs of the elderly. Every 
senior citizen in Florida voting in the straw poll today should vote 
for ``None of the Above'' if they care about Medicare.
  Under the Republican budget, Medicare is cut $270 billion over 7 
years, three times the amount necessary to protect the Medicare trust 
fund, in order to finance $245 billion in new tax breaks for wealthy 
Americans.
  Medicare part B premiums are raised by $52 billion over the next 7 
years, compared to what they would be under current law. Premiums will 
rise from $553 this year to $1,068 by the year 2002. Every senior 
citizen will pay $2,240 more than under current law. Elderly couples 
will pay $4,480 more.
  Senior citizens will be coerced into giving up their own doctor. They 
will be herded into HMO's or forced to join other private insurance 
plans. They will lose the current protection that prevents doctors from 
charging more than Medicare will pay--that change alone means 
additional costs to elderly patients of $5 billion a year.
  The Medicare cuts are so deep that they will ``jeopardize the ability 
of hospitals to deliver quality care, not just to those who rely on 
Medicare and Medicaid, but to all Americans,'' according to a statement 
by organizations representing 5,000 hospitals nationwide. Cuts in 
research and medical education will be devastating to the quality of 
health care in communities across the Nation.
  Medicaid will bear a heavy burden too. It will be cut by $160 billion 
over 7 years. By 2002, Medicaid will be cut by a full one-third.
  And 4.4 million children will lose coverage; 1.4 million disabled 
will lose coverage; 920,000 seniors will lose coverage. Guarantees of 
coverage and services will be eliminated.
  Nursing home standards will be weakened, despite a 98 to 1 Senate 
vote to maintain them. Families will be forced into poverty by high 
nursing home costs. States will be allowed to recover the cost of 
nursing care from adult children with incomes in excess of $36,000 
annually. States will be allowed to put liens on the homes of nursing 
home residents, even if spouses or children are living there, despite a 
vote by the Senate to eliminate these provisions.
  In a shameful giveaway to the pharmaceutical industry, the bipartisan 
Medicaid drug rebate program is weakened, at a cost to taxpayers and 
patients of $1 billion a year, despite a vote by the Senate to preserve 
this program.
  Federal clinical lab standards to ensure the accuracy of medical 
tests are eliminated.
  On education, the Republican budget cuts the Federal investment in 
education by one third over 7 years. We should be investing more in 
education, not less, How can every Republican possibly justify an 
assault like that on education.
  Student loans are cut by $4.9 billion, at a time when student 
financial need is greater than ever. College costs are rising faster 
than family income. Grants make up less than one quarter of Federal 
aid. Student debt is skyrocketing. The average student leaves college 
owing $9,000. Many graduate and professional students owe over $100,000 
before they start their first job.
  The Republican budget is a triumph of special interests over student 
interests. It is rigged to funnel over $100 billion in new business to 
banks and money-lenders at the expense of colleges and students.
  It is hard to find a more vivid or disgraceful example of the 
prostitution of Republican principles. When profits are at stake, 
Republicans are more than willing to roll over and sell out free-market 
competition, and replace it with the heavy hand of a government-
guaranteed monopoly.
  Under the Republican bill, beginning next year, only 102 colleges 
will be allowed to participate in direct lending. 

[[Page S 17452]]
1,250 colleges and 1.8 million students already in the program will be 
forced out of direct lending against their will.
  In Massachusetts alone, 32 colleges and universities and almost 
100,000 students will be required by law to give up the advantages of 
direct lending. They will be required to return to the bureaucratic 
maze of the old guaranteed loan program, where 7,000 lenders and 41 
guaranty agencies bury students in redtape. Students at Boston 
University, MIT Mount Holyoke, Springfield Technical and Community 
College, and many others, will be forced out of direct lending.
  Colleges and universities across the country are outraged at being 
forced out of one of the most successful reforms in the history of 
Federal aid to education. And 472 colleges and universities across the 
country have written urging Congress to reject this arbitrary limit on 
their ability to choose the loan program that best serves their 
students.
  Over 100 of the colleges that signed the letter are not in direct 
lending. But they recognize its benefit for their students too. As they 
put it:

       Those of us who represent institutions that are satisfied 
     with the guaranteed student loan program also support the 
     continued availability of the direct loan program to 
     institutions. The competition created by direct lending has 
     induced banks and guarantors to improve the efficiency of 
     their delivery process, and has, for the first time, provided 
     the student loan industry with market-based incentives to 
     provide better service. The guaranteed student loan system 
     has improved more since the phase-in of direct lending two 
     years ago than it did over the more than two decades of 
     existence prior to 1993.

  The colleges in direct lending speak first-hand of its benefits for 
their students--simplified applications, the expedited receipt of 
funds, the disappearance of the endless lines of students waiting to 
endorse their checks at registration time, the welcome drop in the 
number of emergency loans issued to students waiting to hear about 
their regular loans from their banks, and fewer trips to the financial 
aid office to clean up redtape.
  As these colleges write:

       Direct lending has eliminated redundant paperwork, reduced 
     staff time allocated to dealing with thousands of lenders and 
     dozens of guarantors and other intermediaries, and vastly 
     improved our overall aid delivery processes because it 
     seamlessly integrates with other federal aid programs.

  The issue does not get much clearer. Colleges and universities across 
the country are unanimous. The student loan system needs more 
competition, not less. Banks and guaranty agencies do not deserve this 
protection. The guaranteed loan program is not a free market program to 
begin with. The banks and guaranty agencies reap all the profits and 
take none of the risks, because Uncle Sam is guaranteeing the loans.
  Direct lending also saves money for the taxpayer if honest accounting 
is used. It is a measure of the special interests' power that they have 
even managed to corrupt the budget scoring process. They persuaded the 
Republican majority in Congress to include a provision in the budget 
resolution forcing the Congressional Budget Office to score this issue 
dishonestly, and thereby show savings to the Federal budget of $775 
million over 7 years capping direct lending at 10 percent. An honest 
accounting would show that eliminating direct lending costs--costs the 
Federal Government almost $1.5 billion. Not only are the Republicans 
doing the wrong thing, they are actually increasing the deficit to do 
it. You cannot blame President Clinton for rejecting CBO scoring, when 
Republicans rig CBO scoring so shamelessly.
  It is unconscionable for the Republican majority to use their 
majority power to undermine education and protect the profits of banks 
and guaranty agencies. Few issues in this budget debate more clearly 
demonstrate whose side Democrats are on, and whose side Republicans are 
on. Democrats are proud to stand with families struggling to educate 
their children. Republicans are content to cast their lot with the 
well-connected few, and thumb their nose at colleges and students.
  On pensions, protections in current law are weakened to allow a raid 
of $20 billion on workers' pension funds by large corporations and 
corporate raiders. This provision was eliminated from the Senate bill 
by a 94 to 5 vote, but has now been restored behind Republican closed 
doors.
  On children, the Republican budget slashes essential safety-net 
programs for low-income children and families by $82 billion.
  The Republican budget slashes essential child care funding and 
eliminates health and safety protections for children in child care. 
Many more children will be left home alone and countless others will 
find themselves in danger.
  The Republican budget slashes $6 billion from school lunch programs. 
It slashes $9 billion from benefits that allow one million children 
with disabilities to continue to live at home with their families.
  In page after page of their legislation, Republicans offer an open 
hand to powerful special interests and the back of their hand to 
everyone else.
  As people learn more and more about the Republicans' agenda, they 
like it less and less. They understand why this battle is so important. 
We are talking about fundamental principles and the kind of country we 
want to be in the years ahead.
  It is wrong for the Republicans to slash Medicare in order to pay for 
tax breaks for the wealthy. It is wrong for Republicans to slash 
education and raid employee pension funds. It's wrong for Republicans 
to dismantle the basic bipartisan environmental protections we've 
enacted to keep the air clean, to keep the water clean, to keep our 
food safe.
  The American people did not vote for priorities like that in 1994--
and they will certainly be voting against priorities like that in 1996.
  Mr. President, I have listened with great interest to my friend and 
colleague from Rhode Island talking about the state of the American 
economy and who is really serious in this Chamber and which political 
party has been serious about dealing with the budget of the United 
States. Of course, he understands very well that when the Republicans 
came into power in 1980 there was $460 billion in deficit, and when the 
Republicans left power in 1992 it was $4.4 trillion.
  All during that period of time the moneys which were actually 
appropriated by Democratic Congresses was less than was requested by a 
Republican President. So, we are very glad that our Republican friends 
want to get serious about the deficit now. But I think as we are 
talking about this issue, and as we have listened to a President who 
says that he is committed to a balanced budget, we are also paying 
attention to a President who initiated a proposal that passed this body 
without a single vote from the Republicans that has paid off $600 
billion of the deficit, something that has already been done, an 
achievement and accomplishment, not just particular rhetoric. And there 
was not a single Republican vote that was for it.
  In the last few days we hear our Republican friends chide the 
President and say, ``Well, he really didn't mean it now. And so we're 
going to try to take care of it.'' But I have yet to hear one Senator 
on that side of the aisle say that we wish that was repealed and how 
they would make up the $600 billion which has already been paid off on 
the deficit. They have not talked about that. They have not mentioned 
that.
  All they do is continue along to try and reach the legitimate 
concerns that the American people have in trying to bring the economic 
house in order, and very little time is spent, quite frankly, in 
reviewing how they would do that. And that is basically the issue that 
is before this body. The Democrats have, under President Clinton, 
reduced the Federal deficit by $600 billion. The Republicans have 
talked about it. And now we have a President that is committed, and all 
of us are moving toward the balanced budget.
  But I want to point out very clearly, Mr. President, that it 
certainly will not be this way. It certainly will not be this way. It 
will not be the way of cutting back on the Medicare opportunities for 
our senior citizens, the $270 billion that is going to be required to 
be paid by our senior citizens, with increased out-of-pocket costs for 
all of our seniors in this country over this period of time, and the 
$245 billion in tax breaks.
  There is only one tax that has been increased, Mr. President, in this 
whole proposal, only one tax that has been increased, and it is the 
earned-income tax credit. And who does that apply to? Does that apply 
to the billionaires? Oh, 

[[Page S 17453]]
no. The billionaires were taken care of. We voted in here to eliminate 
the billionaire's tax loophole. For those who do not understand it, it 
says, if you have been able to accumulate $3 million or $4 million or 
$5 million or $600 million, or up to even $1 billion, or even more, you 
can escape your payment into the Federal Treasury by renouncing your 
citizenship, renouncing your citizenship, escape payment, become a 
Benedict Arnold, escape payment and, what happened? This body went on 
record by over 92 or 93 Senators that said we ought to close that 
loophole, no ifs, ands, or buts. We had statements and comments by the 
members of the Finance Committee that it was going to be closed at the 
earliest opportunity. Many of us required a vote to make sure that that 
was going to be done, and members fell over themselves trying to go on 
record and say, ``We are not going to permit that unseemly, 
unconscionable practice to continue.''

  And then what happens? You hardly get the doors closed over there in 
that conference committee, and what comes out? The billionaire's tax 
loophole; cuts in Medicare for our seniors and the billionaire's tax 
loophole that will take hundreds of millions, billions of dollars out 
of the Federal Treasury to benefit a handful of individuals, and you 
want us to just go behind the screen--``We're for the balanced budget 
and you're not.''
  Let us look at what this budget is. You are increasing the taxes on 
those individuals who are making less than $35,000, and a giveaway to 
the billionaires. That is in here--charging our senior citizens, 
elderly people who are unsure, wondering whether their health care 
coverage is really going to be there, wondering about all these 
statements that are being made about Social Security and seeing their 
cost-of-living adjustment eaten up next year by the premiums that will 
be advanced under this proposal; cutting back on Social Security, 
cutting back on the Medicare protections, cutting back on veterans' 
protections, moving many of our senior citizens out of the fee for 
service where they know their doctors into these plan programs.
  This is a beauty, Mr. President. This is an absolute beauty. Under 
the current law, we prohibit double billing. What is double billing? 
Double billing says if the repayment is going to be a certain number of 
dollars under Medicare, that is what the doctor will take for that 
particular procedure, paid in full.
  But you just look, there are a couple of lines in this Republican 
budget that says, ``That isn't going to be the way it is anymore. That 
isn't the way it is going to be anymore, Mr. Senior Citizen,'' who has 
worked so hard to build this country and make it the great country it 
is. That is not the way it is going to be anymore. Those doctors can 
charge you in addition--in addition. We have 70 percent of the seniors 
at an income of $15,000 and 83 percent of them are below $25,000, who 
are paying more out of pocket now in terms of health care because we do 
not cover prescription drugs, we do not cover dental care, we do not 
cover foot care, we do not cover eye care.

  Go into any senior citizen home in any part of the country and ask 
how many are paying $50 a month for prescription drugs and see half the 
hands in the hall go up. That is what is happening out there, eating 
away at scarce resources. And now those 35 million Americans who 
participate in Social Security and Medicare are wondering, ``Look, they 
are squeezing me on Social Security; if I am a veteran, they squeeze 
those benefits; Medicare, they are squeezing benefits and if I get sick 
and lose all my money and go into a nursing home, they have done 
something wonderful as well.'' Instead of the payment in full for the 
nursing home, they say the nursing home can charge you in addition to 
that, too. First time. That is what is in this bill. That is what is 
behind this bill. Make no mistake, those are some of the offensive 
aspects of this bill. They will raise the funds on senior citizens who 
are poor to qualify for Medicaid and put a lien on their homes, take 
their homes away from them.
  That is what is in this bill. Just a few words change, just a few 
sentences change. That is what is in their bill.
  No wonder the seniors are frightened. We hear from the other side, 
``Don't frighten our senior citizens.'' They ought to know what is in 
here. That is the kind of assault on senior citizens that is 
unwarranted and unjustified and you do not have to balance this budget 
on the backs of the senior citizens. You do not have to.
  You are frightening the whole framework of retirement and security of 
our senior citizens. That is what you are doing.
  After a recognition over a long period of time and after Medicare 
being passed in the mid-1960's, a recognition that our elderly people 
earn less in their later years and health care needs go up more in 
their later years, that was true then, it is true now. That may be an 
old idea, but I daresay it is still a fundamental value for our 
society.
  I would like to see those who want to offer and have the guts to 
offer an amendment to repeal either the Social Security or Medicare, 
even though we listened to the two leaders talk about their historic 
role in opposition to the Medicare programs and how they are hopeful 
that it will ``wither on the vine.'' Then people say, ``Well, you 
shouldn't scare our senior citizens.'' Well, you have had the two 
Republican leaders that have taken such pride in the achievement of 
this budget and have made that kind of commitment and statement. Of 
course, they ought to know about it.

  Mr. President, there is one other area which I will talk about. You 
talk about those workers, you talk about the problem that those workers 
are facing.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. KENNEDY. Can I just have a final 5 minutes? I ask unanimous 
consent for 5 more minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KENNEDY. I yield myself 4\1/2\ minutes, so I know when there are 
30 seconds left.
  Mr. President, those families working all that period of time now 
find they are going to have to pay more in taxes. They might have a 
number of children that may be getting some kind of health care covered 
under the Medicaid Program. Eighteen million children in that program; 
4.5 million of them are going to be dropped from any kind of coverage 
under these Medicaid cuts. That is what we are talking about in this 
Republican bill: The raising of the Medicare premiums, the indifference 
in dropping children from health care coverage, dropping the 
fundamental commitment for day care for children, cutting even the 
existing program for day care for children of working families, and 
then, wonderfully, eliminating the regulations that provide health and 
safety protection for those children.
  I was here when Senator Dodd and Senator Hatch worked out that 
program, with President Bush. It was so interesting. We had strong 
requirements for protecting children in the bill that came out of our 
Human Resources Committee. Those strong requirements that had been 
worked out over a long period of time, in terms of making sure those 
children are going to be protected in child care, were watered down but 
still maintained the essential protections for children. That was 
agreed to in a bipartisan way and passed.
  Four weeks later, I offered the same bill with the same standards to 
be applicable to the military, 94 to 6--94 to 6. We did not hear any 
question then about too much regulation, too much protection for the 
sons and daughters of those who are in the military. No, we went ahead 
and did it.
  And now, if any Member of this body goes and visits a child care 
center on a military base in this country and compares it outside, they 
are going to find that the ones serving the sons and daughters of our 
servicemen and women are first rate, and those that are outside do not 
come up to par.
  What is going to happen with the changes in this legislation is you 
are going to find a deterioration in the protection of children. I 
cannot wait to hear the first speech from some of those who have been 
indifferent to this problem say, ``Look, that whole program that is 
supported by the Federal Government is a disaster.'' That is what is 
going to happen, and then there will be pressure to cut that back and 
give more tax breaks to the very wealthy. 

[[Page S 17454]]

  Mr. President, I can look at the American worker today, as has been 
pointed out, and see how their real income has been going down, down, 
down, over a period of time. What they have done is put something away 
in terms of savings in their pensions, and then out of the Finance 
Committee came this ability for corporate raiders to raid pension 
funds, those pension funds paid in by the employees who sacrificed an 
increase in their wages, their health benefits so that they would have 
a secure retirement, and so we brought that up here on the floor of the 
U.S. Senate, a bipartisan amendment, Senator Kassebaum and myself, and 
others--and Senator Moynihan has been a leader in this area--and we 
passed it 94-5, to prohibit the corporate raiders from plundering the 
pension funds. They could not even get the door closed over there in 
that conference, and they came right on back and opened it up again.

  So every worker ought to understand that this is a threat to their 
own security. Why? Because, again, it is the tax breaks, the $240 
billion tax breaks. So, Mr. President, these are some of the items that 
are troublesome to many of us. We can work out in a way to try and deal 
with some corporate welfare and some of the unreasonable increases in 
terms of our defense and in tightening belts on many of the different 
programs. I have cosponsored those with Senator McCain and others.
  We can get to a balanced budget, but not when you are going to have 
that kind of cut and slice on working families, parents and their 
children. That is not what the 1994 election was about, and the 1996 
election will be about it. I thank the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota.

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