[Congressional Record Volume 141, Number 186 (Monday, November 20, 1995)]
[House]
[Pages H13636-H13640]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               THE BUDGET

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from New Jersey [Mr. Pallone] is recognized for 
60 minutes as the designee of the minority leader.
  Mr. PALLONE. Mr. Speaker, I will try not to use the entire hour this 
evening. But I did want to get to address the House tonight because I 
do feel that the two major bills or resolutions that we passed today 
are rather significant.
  First of all, the continuing resolution, which, as I think most of us 
know, allows the Government to continue to operate, prevents the 
partial shutdown of the Federal Government, which forced many Federal 
employees to go home and not provide the services that they normally 
provide to the public.
  Second, I would like to address the budget reconciliation or the 
budget bill that was passed today in final form before it goes to the 
President, which obviously seeks to plan or map out our budget 
priorities for the next decade in this Nation.

                              {time}  1915

  I have to start out by saying with regard to the continuing 
resolution and the effort which was successful today to prevent the 
continued Government shutdown, Mr. Speaker, I was very pleased to see 
that it was passed. I think it was very wrong to have the Federal 
Government partially shut 

[[Page H 13637]]
down. There were Federal employees who were home, I guess, for almost a 
week. They were not working, but of course were going to be paid 
anyway, and there were many hardships, if you will, for Americans who 
wanted to sign up for Social Security, for Medicare, for veterans' 
benefits, those who wanted to join the Army at the recruiting stations; 
all of these things were prevented over the last few days as we argued 
in the House and in the Senate over our budget priorities.
  As happy as I am over the fact that we were able to come to an 
agreement on that continuing resolution and the fact that the 
Government is back to work, I do not think it was necessary to close 
the Government down, and I hope it does not happen again.
  Mr. Speaker, I do not really think that tonight is the place to talk 
about who to blame, but there is no doubt in my mind that the reason 
for the partial shutdown was because Speaker Gingrich and the 
Republican leadership were determined to impose their own ideology 
about the budget on the Congress, and on the Democrats, and on the 
President, and this is really an unprecedented situation. In the past, 
when we have had disagreements on the budget between Democrats and 
Republicans or between the President and the Congress, we have not 
prevented the Government from operating because of our ideological 
differences.
  Essentially what happened today was that the continuing resolution 
was adopted with language that said that the Congress will try to 
achieve, and the President will try to achieve, a balanced budget no 
later than fiscal year 2002, or 7 years from now, and that the balanced 
budget must protect future generations for such important priorities as 
Medicare, Medicaid, education, and the environment, and there are 
others. Well, if you look at this resolution, what it basically says is 
that we will adopt, or we will try as a goal, to achieve a 7-year 
balanced budget, and we will try in the context of that 7-year balanced 
budget to make sure that we do not cut Medicare, that we do not cut 
Medicaid too much, that we provide adequate funding for the environment 
and adequate funding for education.
  Well, frankly, Mr. Speaker, we knew that this was the reality a few 
weeks ago. We all were very much in favor of a balanced budget, and 
Speaker Gingrich felt that that budget should be balanced in 7 years. 
We all were very much in favor of trying to make sure that certain 
programs were protected, but the President insisted that Medicare, 
Medicaid, the environment, and educational programs, in particular, be 
protected.
  So, if we knew that 2 weeks ago or 1 week ago, and if those are still 
the goals that we are trying to achieve, why was it necessary to shut 
the Government down? It was not, and I hope it does not happen again. I 
hope that over the next few weeks, as these budget priorities on which 
there are differences are worked out and negotiated, that we do not 
find ourselves on December 15 in a situation again where the Speaker 
and the Republican leadership says, ``Look, if you don't meet our goals 
or our priorities, we are going to shut down the place again.'' It is 
not necessary. We can continue to work while we work out our 
differences over the budget.
  Now, the second thing that happened today is that we passed the 
budget reconciliation or the Republican leadership budget bill. It was 
passed without the support of most of the Democrats. I opposed it. And 
the reason why the Democrats, or most of the Democrats, opposed it and 
the reason why President Clinton opposes it is because it essentially 
provides tax breaks, if you will, tax cuts or tax breaks, primarily for 
wealthy Americans to the tune of $245 billion, and it takes those tax 
breaks basically by cutting funds from Medicare and Medicaid as well as 
for education and environmental programs.

  So what the Democrats are saying, what President Clinton is saying, 
what I am saying, is that we have to go back; now that this budget has 
been passed, the President will veto it; we have to go back and 
negotiate a balanced budget over the next few weeks that will not cut 
Medicare and Medicaid so severely and that will make sure that there is 
adequate funding for education and also for the environment.
  Just to give you an idea of some of the problems with this budget, 
when I talk about increased tax breaks for wealthy people, at the same 
time the budget actually provides tax increases for working people and 
people at a lower income but who continue to work, and just as an 
example of that, Mr. Speaker, I have a statement, if you will, or a 
phrase from the Citizens for Tax Justice which did a distributional 
analysis of the conference or budget agreement, and it shows the 
following, that the average tax cut for those in the top 1 percent of 
taxpayers who get a tax cut would be $15,438, but 99.7 percent of all 
taxpayers in the bottom fifth would have a tax increase or see no 
change. For those in this group, who have a tax increase, would see 
their taxes go up by an average of $173 a year.
  So here we have it, really for the first time that I can think of in 
American history, we are passing a budget that is going to give these 
tax breaks to wealthy Americans but actually increases taxes on working 
families or lower income families who are still working and still 
paying taxes.
  Now you might say to yourself how is it there is a tax increase on 
lower income people. Well, basically the reason for that is because of 
the cuts in the earned income tax credit.
  The earned income tax credit is basically something that was 
implemented a few years ago in a bipartisan way to try to encourage 
people to get off welfare and to start working and paying taxes, and 
so, therefore, people in a lower income bracket who are still working 
get a tax credit essentially to encourage them to continue working 
rather than go on the welfare rolls.
  Well, right now in this budget, the conference agreement, the changes 
in the earned income tax credit will basically hurt 4 million childless 
workers who have incomes less than $9,520. That type of person, the 
childless worker, if you will, loses up to $324 per year. The cuts in 
the earned income tax credit affect millions of families with children 
as well.
  For example, it affects families with two or more children who have 
incomes between $18,000 and $28,000. Some of these families will 
benefit from the children's tax credit that is in the bill, but not 
all. Put a different way, those who will get something from the 
children's credit will have much or all of that benefit taken away by 
cuts in the earned income tax credit.
  Essentially what we are doing here is, while we may be giving some of 
those low-income people a tax credit because they have children, the 
tax credit they will lose because of the cut in the earned income tax 
credit will more than make up for that so they will be paying more in 
taxes, and if they do not have children, then they are going to lose 
even more in the tax credit because they do not have the children's 
credit to make up for it.
  Again, I know it is complicated, and sometimes it is difficult to 
understand, but the bottom line is that, if you are an individual who 
is making less than $30,000 a year, you are more likely to get a tax 
increase under this Republican leadership budget than a tax cut.
  Now I want to walk briefly though about the main concerns that I have 
with this budget, this Republican budget, in terms of how it affects 
Medicare and Medicaid because that is where the deepest cuts take 
place. Those are the two programs, the two health care programs, that 
are run by the Government which are most deeply impacted by the 
priorities in the Republican budget. Medicare, for one, is not 
abolished. It continues to exist. But the nature of the program 
changes, and essentially senior citizens are asked to pay more to get 
less in terms of their health care coverage.
  Just as an example of that, the part B premium that seniors now pay 
for their doctors' care--part A Medicare, part A, takes care of the 
hospital care; Medicare part B takes care of physicians' care--and 
seniors pay now a premium per month for Medicare part B. Well, Medicare 
part B premiums are doubled under this Republican budget proposal. At 
the same time though that seniors are paying more for their physicians' 
care under Medicare part B, what is happening is that the amount of 
money that is available to the Medicare Program, particularly for both 
hospitals, as well as physicians, is significantly decreased.

[[Page H 13638]]


  Now what that means is that hospitals will not get the same level of 
reimbursement rate that they need, or that they get now, or will need 
in the future in order to make ends meet, and so what we are predicting 
and what we know will happen if you talk to the American Hospital 
Association, for example, is a lot of hospitals will close, or 
alternatively they will have to cut back on services, and they are 
essentially squeezed so that they cannot provide the same quality of 
care.
  I know in my own State of New Jersey we have a large number of 
hospitals that depend on Medicare and Medicaid for a majority of their 
income. So if that income is significantly cut back, they either close 
or they cut back on what they can provide.
  The other thing that the budget does with Medicare in a very sort of 
sneaky way is that right now, if you are a senior citizen, most senior 
citizens simply go to a doctor of their choice, and that doctor gets 
reimbursed by the Federal Government in what we call a fee-for-service 
system. You get the service, the Government pays the fee. Well, what 
this Republican budget bill does is it changes the emphasis and 
basically encourages seniors to enroll in HMO's or managed care 
programs because over the life of the 7-year budget or over the life of 
the budget essentially the amount of money that is reimbursed to 
individual physicians as opposed to HMO's is skewed. Higher 
reimbursement rate, more money going to HMO's or managed care systems, 
less money as the years go by going to doctors who stay in the 
traditional fee-for-service system. So essentially seniors are 
encouraged, or almost forced because of their doctors, into HMO's or 
managed care systems, and a lot of doctors probably would not even take 
Medicare any more on an individual basis the way we operate now.
  So what I believe will happen, and I think this is what the intent 
is, is that this budget will increasingly force more and more seniors 
into HMO's or managed care where they do not have a choice of doctors.
  The effect on the other health care program, Medicaid, which is for 
low-income people, is just as bad, if not even worse, because 
essentially Medicaid, which right now is a guaranteed program; if you 
are below a certain income, you get Medicaid, and you have your health 
insurance paid for by the Federal Government because you cannot work, 
or you are a child, pregnant woman, whatever, who is without work, or 
you are disabled; right now that is guaranteed, that you get Medicaid, 
you get the health care coverage. But this budget bill abolishes the 
entitlement status of Medicaid. In other words, about 36 million 
Americans who are now eligible for Medicaid automatically are no longer 
eligible necessarily, and essentially the States are given money in 
block grants to try to continue to run health care programs for low-
income people. But what the budget does, and again in a very sneaky 
way, is it says ``OK, now the States are going to get money, and 
they're going to decide what kinds of Medicaid programs they are going 
to have for low-income people.'' But 18 percent less is available in 
Federal dollars, 18 percent less than what our Congressional Budget 
Office says is necessary in order to cover the people that would be 
eligible for the Medicaid Program over the next 7 years.
  So what is happening here is again just like the squeeze in Medicare, 
the squeeze exists in Medicaid. States are told, look, it is up to you 
to decide now who you want to cover, but you are going to get a lot 
less money to provide that coverage, and you do not have to cover the 
people that previously were entitled to Medicaid, and so what are the 
States going to do? They are going to cut back. A lot of them will 
decide that certain categories of disabled people are not going to be 
eligible for Medicaid or that certain other people will not be eligible 
for Medicaid, and they do not really have a choice because their only 
alternative is to raise taxes somehow, and the States obviously are 
going to be reluctant to do that.

                              {time}  1930

  The other aspect of the Medicaid Program that is particularly 
damaging is with regard to seniors. I mentioned before that under 
Medicare, the part B program for Medicare which seniors use to pay for 
their doctor bills, the premiums are doubled under this budget bill; 
but on the Medicaid side, the guarantee for low-income seniors, that 
premium that was paid for by Medicaid is eliminated.
  So if you are a senior who can afford to pay for your Medicare 
coverage, you see your premiums doubled. If you are a senior who right 
now cannot afford to pay your Medicaid part B premium, and it is 
covered by Medicaid and you do not have to pay, you now have no 
guarantee that the Medicare coverage is going to be paid for.
  What is going to happen? A lot of senior citizens will simply not 
take Medicare part B or physician coverage because they cannot afford 
to pay for the double premium; or, alternatively, if they are too poor 
and they have had their Medicare part B paid for by Medicaid, they 
simply will not have Medicare part B coverage, and they will not have 
any doctors to take care of them.
  What we are seeing here more and more with regard to the two health 
care programs is that the budget, this Republican budget, the budget 
put forward by Speaker Gingrich, is going to put a lot more Americans, 
provide that a lot more Americans do not have health insurance at all. 
They either will not have physician's coverage, or in some cases they 
will not have hospital coverage, and we are going to see an increase in 
the number of Americans who have no health insurance.
  Right now it is estimated that something like 40 million Americans 
have no health insurance. Various estimates, responsible estimates, 
have said that under this proposal, under this budget, we could easily 
see over the next 7 years as many as 60 millions Americans or more that 
will have no health care coverage.
  The other aspect of this bill that is particularly troublesome to me 
when it comes to Medicaid funding, as well as Medicare funding, relates 
to how States will finance both programs. In other words, right now 
Medicaid is a program where the States have to put up one dollar for 
every dollar that the Federal Government provides. So when I say that 
Medicaid is cut by 8 percent over the next 7 years, I am assuming that 
a State, for example, my home State of New Jersey, would put up $1 for 
every $1 that comes from the Federal Government.
  But when this budget bill went to conference and came back on an 
agreement between the House and Senate, I found that it had another 
provision that even makes the situation for Medicaid and for States 
that are making an effort to try to provide coverage even worse, 
because it says that a State only has to spend 40 cents of a dollar in 
order to get 60 cents in Federal money.
  What that means is that instead of putting up $1 and getting $1 in 
Federal money, the States may decide they will only put up 40 cents and 
get 60 cents in Federal money, which means that there is only $1 
available for Medicaid as opposed to the $2 that is available under the 
current law. So not only will States see a lot less money coming from 
the Federal Government, but if they decide that they do not want to put 
up theirs, there may be half as much money available to the Medicaid 
recipients in that State than is available right now.
  The other thing that really upsets me is that so many times on this 
floor I have heard the other side, my colleagues on the other side, 
basically give the impression that somehow, as this bill has moved 
through committee, through the House, through the Senate, and then in 
the House and Senate conference until it finally came to the floor 
today for final consideration before it goes to the President, the 
suggestion that somehow they have been trying to improve the situation 
with regard to the States' ability to continue Medicare and Medicaid in 
an inadequate quality way.

  Particularly in my home State of New Jersey, I have been troubled by 
the fact that, unlike previous to today, most of the Republicans 
decided to support this budget conference when it came back because of 
changes that were made supposedly for New Jersey that would help with 
our ability to continue Medicare and Medicaid coverage.
  I basically disagree with what my Republican colleagues or most of my 
Republican colleagues from New Jersey have been saying in this regard. 
I think that the bill that has come back to us, 

[[Page H 13639]]
and that we voted on today, did not make any real significant changes 
in the Medicaid or Medicare Programs that help the State of New Jersey. 
Particularly with regard to our hospitals and the amount of money they 
are going to be getting from Medicare, it created a very biased system 
in favor of certain hospitals, and at the expense of other hospitals.
  Ms. JACKSON-LEE. Mr. Chairman, will the gentleman yield?
  Mr. PALLONE. I yield to the gentlewoman from Texas.
  Ms. JACKSON-LEE. Mr. Speaker, I thank the gentleman from New Jersey 
for yielding to me. I was in my office and listening to his very 
detailed explanation and very important explanation.
  I think it is very crucial on the eve of this Thanksgiving, away from 
what we experienced this whole last week, and we were together this 
whole weekend, I recall being with the gentleman and debating this 
issue of adjournment on Saturday, of course a separate issue on the 
continuing resolution. But we decided together not to leave for our 
home States, which many of us had obligations, to stay here to demand 
that this Congress deal first of all with the question of the 
Government shutdown. And in the midst of that discussion, of course, 
and we have heard a lot of people talk about wins and losses, and 
knowing your commitment to this whole issue of Medicare and Medicaid, I 
have not heard the gentleman say that, but what we did get out of the 
continuing resolution, which I think is very important for the American 
public to know, is a listing of priorities that includes Medicare and 
Medicaid. That is a separate issue.
  Because the Democrats stayed in, we were here yesterday, we were here 
when this Congress reconvened late last night to give us the 
opportunity to vote on the 1-day CR. And then, of course, today it was 
voted on. It is giving direction, or that listing of priorities will 
now give us direction for this budget bill, which of course this budget 
reconciliation came again to the House floor, and it was not responsive 
to what you have been highlighting.
  If I might just add to what you have said----
  Mr. PALLONE. Absolutely.
  Ms. JACKSON-LEE. We may not have heard the collective voices from the 
hospitals like we would have liked to. I know they were spending time 
trying to review all of the numbers, they were concerned that they 
would not speak precipitously. But now they have come and they have 
spoken. Five thousand hospitals and health systems nationwide have 
written, and I am not sure whether the Republicans have read this 
language, but I would just like to share with you, because your 
hospital association, the Texas Hospital Association, and the New York 
Hospital Association, it simply reads: ``The undersigned national, 
state, and metropolitan organizations representing more than 5,000 
hospitals and health systems nationwide, cannot support the conference 
report on H.R. 2491.'' It did not say we want to reconsider the budget 
reconciliation bill. ``Our reason is straightforward as it stands. This 
legislation, viewed in its entirety'' it did not say a piece here or a 
piece there, ``Is not in the best interests of patients, communities, 
and the men and women who care for them.''

  This is from caregivers with no axe to grind, no political or 
partisan position. In fact, they waited this length of time, and 
obviously, they agree with your interpretation.
  In my State in particular, with the Texas Medical Center nearby my 
district, but the Harris County Hospital District largely in my 
district, we are finding that on the Medicaid issue we are losing some 
$5 billion in Medicaid. I think if people understand what that means, 
if we were to have a recession, in Houston we have the Johnson Space 
Center, and many people were hurt on this furlough and large numbers of 
individuals were furloughed. That is an employment base.
  I am very glad to see that we have certainly made some commitments on 
funding on the space station, but just think, if something might happen 
which would create some sort of recession in Houston or in surrounding 
areas, the State, which the Republicans have so much bragged about as 
giving them block grants, would be cut off from helping those who newly 
need health care under Medicaid, because it would be in a block grant 
and they would already have lost some $5 billion out of the State of 
Texas.
  It indicates in the gentleman's State, and he has already given the 
numbers, but it just lists all of the States that would do so.
  If I could just show you one other plan here, or sort of a graph if I 
could, because you mentioned this as well, and that is that we seem to 
be in this trouble because of the Republican tax plan. Certainly I do 
not think there is one of us who has stood here, many people we know 
could benefit, if you will, and this is not an issue where you do not 
want to take credit for giving people money. But we have to, as we did 
with the continuing resolution-- there is a question of priorities.
  If you look, the lowest income individuals, and some of those are 
people working--some people work for between $6,000 and $10,000 a 
year--would be taxed, and in actuality, would be losing $168. Then, if 
you want to take the average American, we understand average Americans 
make about $41,000; somewhere between $30,000 or $41,000, if you are 
$30,000, say $27,000, you get $226 in a refund.
  Of course, I do not give any negatives to any amount of money, but 
someone was on the House floor today saying you could invest this money 
for your youngsters' college education. I think I could interview a 
number of people making $27,000 and find out whether they could get any 
college education money out of investing $226. Then for someone making 
$41,000, they would get $514. Certainly a color TV is welcome into the 
household, but we misrepresent to the American people that they are 
getting a benefit by getting this tax back but yet losing direct 
student loans.
  Then, as I conclude, to say to you that they would likewise, if they 
were making $606,000 they would be getting back $13,628. That is a 
question of priorities. I applaud the gentleman for his persistence. I 
think he has spoken to me on the House floor and has been asking for 
Medicare hearings more fully so we can understand the facts. I want to 
join him in that, because I think this is an important question. I did 
say I was going to conclude, but if you would just allow me on one 
point.

  Mr. PALLONE. The gentlewoman can speak as long as she likes.
  Ms. JACKSON-LEE. I notice we had the VA-HUD rule, and interestingly 
enough, we were prepared to debate that legislation, and it was 
mysteriously pulled. I would simply say, coming from Texas, I certainly 
applaud the work that we did in securing the space station. That is 
important to us. I would argue vigorously that that creates the work of 
the 21st century. I was proud to be able to support the funding for 
that, and not to eliminate or undermine some of the great works of 
those individuals.
  Yet, what we are doing to housing, and then juxtaposing it against 
the space station, and that effort and science, which that really is 
not the right scapegoat, it is the $270 billion tax cut, we find in the 
housing area we are literally gutting an opportunity for what has been 
the new trend in America, creating affordable housing. My city is just 
on the precipice of going in and building housing for those who need 
housing, and here we are, gutting that.
  We are gutting historic preservation provisions to protect historic 
buildings, we are gutting the environment, and interestingly enough, I 
hope that bill goes back so that we can be fair. We have been fair to 
those in the science with space station and NASA, and we need to be 
fair to those who would create the opportunities, young people who will 
be raised up in these houses, so they can be the next scientists and 
engineers.
  I think this tells a story of that continuing resolution. I will go 
back to it, which is establishing priorities. No one wins or loses. It 
is bringing your experience, bringing my experience of my parents who 
did not have the same opportunities that I had, bringing them to this 
House of Representatives, to create the doors of opportunity for those 
seniors, for those young people, for those working people.
  I applaud your remarks, and I hope that someone will listen to what 
we are saying. We are not against the balanced budget. We have all said 
it. But 

[[Page H 13640]]
what we have emphasized is the importance of priorities. It appreciate 
the gentleman yielding to me.
  Mr. PALLONE. I appreciate the gentlewoman for speaking up as she did. 
I think you are absolutely right, that one of the, if not the, major 
benefit from this continuing resolution was the fact that it 
establishes the President's and the Democrats' priorities with regard 
to Medicaid, Medicare, education, and the environment.
  What you were saying particularly about Medicaid and Medicare, I 
wanted to point out, I see that our leadership is here and I want to 
yield to them, but I would like to point out at some point how this 
budget conference actually makes the situation even worse with respect 
to some aspects of Medicaid and Medicare. It was not an improvement. It 
made it worse for our area hospitals.


             resignation as member of committee on science

  The SPEAKER pro tempore (Mr. Barr) laid before the House the 
following resignation as member of the Committee on Science:

                                               Washington, DC,

                                                November 18, 1995.
     Hon. Vic Fazio,
     Chairman, House Democratic Caucus,
     Washington, DC.
       Dear Chairman Fazio: I hereby resign my seat on the 
     Committee on Science.
           Sincerely,
                                                       Pete Geren,
                                               Member of Congress.

  The SPEAKER pro tempore. Without objection, the resignation is 
accepted.
  There was no objection.


        resignation as member of the committee on small business

  The SPEAKER pro tempore laid before the House the following 
resignation as member of the Committee on Small Business:

                                     House of Representatives,

                                Washington, DC, November 20, 1995.
     Hon. Vic Fazio,
     Chairman, House Democratic Caucus,
     Washington, DC.
       Dear Chairman Fazio: I hereby resign my position on the 
     House Small Business Committee. This resignation is to take 
     place immediately.
           Sincerely,
                                               Patrick J. Kennedy,
                                               Member of Congress.

  The SPEAKER pro tempore. Without objection, the resignation is 
accepted.
  There was no objection.
  Mr. FAZIO of California. Mr. Speaker, will the gentleman yield?
  Mr. PALLONE. I yield to the gentleman from California.

                          ____________________