[Congressional Record Volume 141, Number 186 (Monday, November 20, 1995)]
[House]
[Pages H13349-H13351]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             PRESIDENTIAL PROMISES ON BALANCING THE BUDGET

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Florida [Mr. Stearns] is recognized during 
morning business for 3 minutes.
  Mr. STEARNS. Mr. Speaker, I am certainly glad the President finally 
agreed to balance the budget in 7 years.
  It really should not have been quite as difficult as it turned out to 
be, because really when you go back and look at what the President said 
in his State of the Union Address in 1993, and what he said when he ran 
for the Presidency in 1992, and when you put them all all together, it 
would not have been possible for him to continue to say he was not for 
a balanced budget in 7 years.
  Let me quote what the President said in 1993 in the State of the 
Union Message.

       My budget plan will use independent Congressional Budget 
     Office numbers. I did this so no one could say I was 
     estimating my way out of this difficulty. I did this so that 
     the American people will think we are shooting straight with 
     them.

 
[[Page H 13350]]

  That is our President, 1993, using CBO numbers.
  In 1992, the President, while on the ``Larry King Show,'' stated 
emphatically that his first piece of legislation would be a balanced 
budget in 5 years. Then again as recently as last week, the President 
was saying, ``CBO numbers are unacceptable to us because it commits us 
to accepting Republican cuts.''
  Well, now I am glad the President finally agreed to a 7-year balanced 
budget using CBO numbers. My point again, Mr. Speaker, is that the 
debate we had on that issue is going to be the same debate we will have 
on Medicare.
  The American people should know that the President, while he accuses 
us of hurting Medicare recipients, is again not remembering what he 
proposed with his ill-fated Health Security Act of 1993. The numbers 
speak for themselves. Let's compare his plan of 1993 with our plan 
today.
  Now, under our plan, we would allow the Medicare Program to grow at 
the rate of about 6\1/2\ percent after 1999. President Clinton, who 
claims Medicare is one of his chief concerns and does not want to see 
it hurt the elderly unfairly, proposed in 1993 that his program would 
grow at less, less than 5 percent a year. There were 130 colleagues 
over there that sponsored his bill back then.
  Now that was reported today in the Investors Business Daily. Mr. 
Speaker, I would like to include this complete article as a part of 
this official Record.

          [From the Investor's Business Daily, Nov. 20, 1995]

                     How Radical Is the GOP Budget?

                           (By John Merline)

       If you listen to the rhetoric from both political parties, 
     it appears the GOP wants a revolution.
       From the Clinton camp, words like ``radical,'' 
     ``extremist,'' ``terrorist,'' and so on pepper comments about 
     the Republican's seven-year balanced budget plan.
       ``America can balance the budget without extreme cuts in 
     Medicare, Medicaid, education or the environment--and that is 
     what we must do,'' President Clinton said last week.
       The GOP itself likes to characterize its budget plan as 
     revolutionary. House Speaker Newt Gingrich, R-Ga., has called 
     the bill an ``heroic fiscal achievement.''
       But how radical is it?
       Put in context, the seven-year plan is a relatively modest 
     one. And, many of the specific reforms have been pitched by 
     Clinton himself in the past.
       ``It is in both parties'' interest to exaggerate the 
     changes proposed,'' said former Congressional Budget Office 
     head Robert Reischauer.
       He did say, however, that the GOP is offering fundamental 
     changes in federal entitlement programs.
       Here are the basics:
       In 2002--the year the budget is supposed to be balanced--
     federal spending will be $267 billion higher than in 1996. 
     Federal spending will consume 19% of the economy in 2002, 
     down from 22% today.
       Revenues climb $449 billion between the first and last year 
     of the seven-year plan. In 2002, taxes will eat up the same 
     share of GDP--19%--as they do today.
       Over the course of seven years, the GOP wants to cut 
     spending a total of $952 billion, according to an analysis of 
     the plan by the Congressional Budget Office. That's ``cut'' 
     in the Washington sense, meaning a reduction in the planned 
     spending increase.
       Most of those cuts come in the last two years of the budget 
     plan. For the first five years, the cuts add up to $432 
     billion. In the last two years they total $520 billion.
       That's raised eyebrows among some fiscal hawks.
       ``The Republican budget pushes off most of the pain of 
     cutting spending into the next century,'' said Stephen Moore, 
     director of fiscal policy studies at the Washington-based 
     Cato Institute.
       Keep in mind that there will be two presidential elections 
     before those final two years' worth of cuts kick in.
       Under the GOP plan, the federal government will spend a 
     total $12 trillion dollars by 2002.
       That's a mere 8.6% less than what would have been spent 
     without the Republican cuts. And, if you take out interest 
     savings, program cuts trim only 7% off total spending.
       Fiscal conservatives complain that the GOP failed to 
     eliminate enough programs. While many saw their funding 
     levels clipped, too many objectionable programs remain on the 
     books, they say.
       The Appalachian Regional Commission, the National 
     Endowments for the Arts and Humanities, Legal Services Corp., 
     and the Economic Development Administration have long been on 
     conservative hit lists. All get funded in the GOP bill.
       Moore estimates that of the 300 programs slated to get the 
     ax in the original House budget proposal, all but about 50 
     will live to see another day.
       The tax cuts total $245 billion over the next seven years. 
     The total amount of gross domestic product expected over 
     those seven years is more than $60 trillion. So the tax cuts 
     are equal to 0.4% of the total economy.
       Those cuts do little to offset the two tax hikes imposed on 
     the economy by Presidents Bush and Clinton. Clinton's $240 
     billion in hikes makes a misleading comparison--that figure 
     counts only the five-year cost of the levy. That's because in 
     previous years, budget plans were only made over five-year 
     time horizons.
       But the GOP plan is for seven years. So all their numbers 
     are larger.
       Clinton has offered a tax-cut plan in many ways similar to 
     Republican proposals.
       For example, his own 1996 budget plan has a $500 credit for 
     each child under age 13 for taxpayers with incomes up to 
     $60,000.
       Clinton's credit is refundable, meaning that people with 
     little or no income taxes would get a check from the 
     government. The GOP's $500 per-child credit is not. And, 
     Republicans propose to let families with higher incomes get 
     the credit.
       He also wants to expand individual retirement accounts, 
     also included in the GOP plan.


                               less bold

       Clinton has suggested that he could support a cut in the 
     capital gains tax. His 1993 budget included a cut in gains 
     taxes for investments in small companies held at least five 
     years. The GOP would cut the gains tax for all investment.
       The Republicans' seven-year deal is less bold than plans 
     offered up by lawmakers and presidents in the past.
       Since 1969, presidents have introduced 13 budgets that, 
     they said at the time, would produce a budget surplus within 
     five years.
       The so-called Gramm-Rudman-Hollings Act, passed in 1985, 
     was designed to balance the budget by 1991. The revised law 
     moved the target back to 1993.
       President Bush's first budget would have turned a $161 
     billion deficit in 1989 to a $33 billion surplus by 1994.
       The GOP now wants to take seven years to move from a 
     deficit of $178 billion in 1996 to a surplus of $4 billion in 
     2002.
       To be sure, the GOP plan is different than many of its 
     predecessors for one simple reason: there are no tax hikes.
       ``It is a departure from virtually all previous deficit 
     reduction efforts, which were divided in some form between 
     spending cuts and tax increases,'' said Price Waterhouse 
     budget expert Stanley Collender.
       Medicare and Medicaid cuts have proved to be a major 
     sticking pointing point with Clinton, who says they will 
     severely harm seniors and the poor.
       But the changes proposed by Republicans are nearly 
     identical to those offered by Clinton two years ago as part 
     of his ill-fated Health Security Act.
       Medicare: In the first five years of Clinton's Medicare 
     plan, spending would get trimmed by $124 billion. The GOP 
     proposes cuts of $135 billion in the first five years.
       The Medicare cuts were to get even harsher in the out years 
     under Clinton's plan. He wanted Medicare to grow at less than 
     5% a year after 1999. The GOP wants to leave the growth rate 
     at about 6.5%.
       Like the Republicans' plan, Clinton got most of his 
     savings--70%--from cuts in payments to providers serving 
     Medicare patients.
       Clinton also wanted to raise premiums for Medicare's Part B 
     program to cover 25% of the costs of that insurance plan. The 
     GOP sets it as 31.5% of costs.
       And, Clinton wanted to means-test the premiums, so high-
     income seniors would pick up a greater share of Part B costs. 
     Republicans want rich seniors to pay even more.
       Clinton also proposed new private-sector options similar to 
     Republicans' ``Medicare Plus'' reform.
       A summary of the Health Security Act released by the White 
     House in September 1993 said its plan would offer 
     ``beneficiaries greater choice of managed-care options.''
       And, like the GOP bill, Clinton would let new retirees keep 
     their old company-provided health plans.
       The only difference between Clinton's and the Republican's 
     reforms on this score is that the GOP wants to offer seniors 
     one extra choice: the option to select a medical savings 
     account.
       A favorite among conservatives, MSAs let seniors opt for a 
     high-deductible, catastrophic insurance policy. Premium 
     savings are placed in a savings account, which seniors can 
     draw on to pay up-front medical costs. Unspent funds in the 
     account at the end of the year can be rolled over or 
     withdrawn.
       Senate Democrats tried to strip the MSA option out of 
     Medicare reform using a parliamentary procedure.
       But Democratic lawmakers have in the past supported similar 
     ``choice'' reforms.
       In 1980, Minority Leader Richard Gephardt, D-Mo., co-
     authored a bill that gave seniors ``the option of remaining 
     with the present Medicare system or of choosing to receive 
     benefits of plans being offered by the competitive system.''
       Both Gephardt and Clinton say that they object to the GOP's 
     Medicare plan because it's not part of comprehensive health 
     care reform.
       Medicaid: In his Health Security Act, Clinton wanted to 
     strip $114 billion from Medicaid over five years. The GOP's 
     five-year cuts total only $72 billion.
       Under Clinton's health plan, Medicaid would have 
     effectively been abolished, replaced with fixed payments to 
     private health 

[[Page H 13351]]
     plans. The poor would sign up with one of these plans to get health 
     benefits.
       The GOP proposal would block grant Medicaid payments to 
     state governments, which could then set up their own delivery 
     systems.
       The Clinton administration has also made a fuss over 
     changes to Medicaid's long-term care program. At one point, 
     the GOP planned to overhaul federal nursing home standards, 
     replacing detailed standards with broad goals to be enforced 
     at the state level.
       But as governor of Arkansas, Clinton had proposed similar 
     changes. In fact, in 1989, Clinton joined 47 other governors 
     to urge an end to federal ``micromanagement'' of nursing 
     homes.
       Clinton complained that restricting eligibility for long-
     term care would throw 300,000 old folks onto the street. Of 
     course, he had already tightened eligibility as part of his 
     1993 budget.
       The goal then: ``Restrict further the diverting of property 
     to qualify for Medicaid,'' according to the administration's 
     1993 budget blueprint.

  Mr. STEARNS. Mr. Speaker, what we have today is the President 
agreeing with us on the 7-year balanced budget, using CBO number. I 
think eventually when the President looks at the difference between his 
Medicare Program and Medicare and Medicaid and all the other programs, 
he really should accept the balanced budget of 1995.

                          ____________________