[Congressional Record Volume 141, Number 188 (Tuesday, November 28, 1995)]
[House]
[Pages H13711-H13718]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         BOSNIA AND THE BUDGET

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Connecticut [Mr. Shays] is recognized for 
60 minutes as the designee of the majority leader.
  Mr. SHAYS. Mr. Speaker, I yield to my colleague, the gentleman from 
Georgia [Mr. Kingston] to complete his presentation.


                      increasing medicare benefits

  Mr. KINGSTON. Mr. Speaker, I thank the gentleman for yielding. I will 
just say real quickly something that is very appropriate to the subject 
that the gentleman from Connecticut [Mr. Shays] is going to address, 
which is the budget, and that is that in Washington, a decrease in the 
anticipated increase is considered a cut, which means if you are 
wanting to spend $15,000 and you only spend $10,000 more than you did 
last year, then that is a $5,000 cut instead of a $10,000 increase.
  Therefore, so much of the debate I think is tainted by the fact that 
we use what are normal, every day, commonplace words, but we change 
them into an illegitimate-type usage so that the word ``cut'' again is 
a decrease in the anticipated increase.
  Again, Mr. Speaker, I will say in that context we are increasing 
Medicare benefits per recipient from about $4,800 to $6,700 over a 7-
year period of time, and we are doing that by giving seniors more 
options than normal Medicare. We are going to opt to have Medicare 
Plus, we are going to have managed care options, health maintenance 
organizations options; we will have medical savings account options and 
physician service network options, preferred provider organizations, 
all kinds of things which I think are very exciting. I have discussed 
these options with my parents and other senior citizens that I know, 
and they are excited about it and they are glad that we are going to 
move to protect and preserve Medicare.
  Mr. Speaker, I now need to yield back to the gentleman from 
Connecticut his time, and maybe we can have a good discussion on the 
budget.
  Mr. SHAYS. Mr. Speaker, I thank the gentleman and I would encourage 
him to participate in this special order. We are joined also by the 
gentleman from Maine [Mr. Longley].
  Mr. Speaker, this is obviously a time that many of us are focused in 
on Bosnia, and whether or not we are going to be committing troops. We 
are going to devote most of this special order to the budget, not 
Bosnia. However, I just want to put on the record that the vote on what 
Congress does and decides to do on the issue of whether we commit 
troops to Bosnia is going to be not a partisan debate.
  Each member of a vote like that is going to look to his own 
conscience, is going to be checking and talking with people in the 
administration and outside of the administration to know ultimately 
what is the proper vote. I know that if I had to vote today, I would 
not be sending troops to Bosnia, but I have pledged to have a very open 
mind about this issue.
  The President has committed our Government to send 20,000 troops, has 
made it very clear that he intends to work with NATO, and that 
obviously has to count for a lot. He is the Commander in Chief. 
However, then we 

[[Page H 13712]]
have to wrestle with whether or not there is a defined national 
interest, whether we know exactly what that mission is, and if we know 
what that mission is, how we are going to carry it out and ultimately 
what will be our exit policy. We cannot be there indefinitely, how do 
we ultimately exit Bosnia and leave it better off than it is.

                              {time}  2045

  I am tempted to suggest to my leadership that we invite the 
participants who signed the agreement to come to Washington and 
convince us that they truly want peace. Because if we are just going 
there sending our troops, 60,000 sounds like a lot, ultimately, 20,000 
Americans, but spread over such a wide part, a large area, there will 
not be a heavy concentration of troops practically in any one area, our 
troops will be at risk if the warring factions are not committed to the 
concept of peace.
  So I want to start out this special order by just being on record as 
saying that I intend to keep an open mind, though if I had to vote, I 
would vote no, that it is not a partisan kind of decision, that we know 
we are talking about the lives of Americans, men and women who while 
volunteering trust us to engage them when there is a national interest 
and not when there is not a national interest. I do not know if either 
one of you would care to comment.
  Mr. LONGLEY. If the gentleman would yield, I just would add to what 
the gentleman from Connecticut has said, that the most serious decision 
that any President can make is the decision to send American men and 
women into harm's way, and that I know that every Member of this body 
feels a very heavy responsibility to evaluate honestly and fairly the 
decision that the Commander in Chief is now presuming to make. As 
speaking for myself, I have been very skeptical about what the benefit 
and certainly any number of risks that American service men and women 
would confront on the ground in Bosnia but I also feel that the 
President needs to be given every benefit of the doubt. Again, that 
does not necessarily mean that we may ultimately agree with him but 
again we respect the fact that this is about the lives of young 
American men and women and our role in the world.
  But I think it is also important to mention Bosnia in the context of 
the budget, as two of the many very serious issues that we are dealing 
with, and I guess it is, for whatever purpose or reason at this point 
in time we are not only faced with the prospect of American ground 
troops in Bosnia but we are also debating how we might best balance 
this budget and finally get this country on the track to a balanced 
budget over the next 7 years. Frankly as we debate in this Chamber, we 
still do not know whether or not, even though the President last night 
spoke to the country about his need or his feeling that we needed to 
send American ground troops to Bosnia, we still do not have a decision 
as to whether he is willing to accept the defense budget that has been 
passed by this body and the Senate and sent to him for his signature. 
Again there is a strange irony in the fact that the President as 
Commander in Chief is now planning to commit American forces overseas 
in Bosnia, yet we are faced with the possible veto of the defense bill 
that was passed by this body. Again given the issues in Bosnia, given 
the significance of national defense and the fact that we may be asking 
men and women to risk their lives in pursuit of what the President 
deems to be our national interest, given the issues that are underlying 
the need, I feel, for once and for all finally getting Washington to 
accept the discipline of a balanced budget, I have no doubt that the 
public is watching us very closely, in fact, perhaps far more closely 
and with far more scrutiny than sometimes we may come to appreciate.
  Mr. KINGSTON. One of the things that I think the gentleman from 
Connecticut [Mr. Shays] said that is extremely important and I wish we 
could really front-page bold-type your words about the warring factions 
asking for our troops to come there to help them keep peace. Because 
they are not asking. You had said that you were part of a group 
inviting them to come to Washington and assure us that it was their 
wish and desire to have American troops there as an integral part of 
them resolving their problems peacefully. They are not going to do 
that.
  As you recall in Ohio last week, they would barely shake hands and 
they avoided eye contact. So I think you have really hit something very 
key to this whole debate. Are we thrusting our troops and our American, 
quote, good will on these folks, or are they saying, ``We can't do it 
without you''? I am not sure. We need to find out.
  Mr. SHAYS. The bottom line is that that is an important question to 
have answered along with what the President said, a well-defined 
mission after describing what our national interest is. That as yet has 
not been described to us. So we are going to be doing everything 
possible to get answers to those questions and then ultimately to vote 
intelligently. It is an extraordinarily important vote.
  It is just one of many votes obviously that are important in the days 
and weeks and months to come. I am happy my colleagues have joined me 
to just have a dialog about kind of what we have seen happen in the 
last year, and what we might expect ultimately to be the result of this 
effort.

  It seems to me that we have had as a majority party three primary 
objectives: One is to get our financial house in order and balance our 
Federal budget within the timeframe of 7 years, or less. Ideally less.
  The other is to save our trust funds, particularly Medicare, from 
insolvency and then ultimate bankruptcy, and ultimately to work on the 
long-term savings. We have a short-term crisis, then we have a long-
term, when the baby boomers start to enter in as retirees in 2010 to 
the year 2030. By year 2030, all the baby boomers will be in. There 
will be a gigantic group from age 65 to 85. The third issue, and it is 
a little harder to define but is probably as important as the other two 
and maybe even more important, and I describe it this way. We are 
looking to transform our caretaking social and corporate welfare state 
into what I would describe as a caring opportunity society where 
American citizens feel that this is truly the land of opportunity. 
Instead of giving them the food to eat, we give them the seeds and 
teach them how to grow the seeds into food, ultimately has to be our 
biggest interest.
  We set out last year with a Contract With America and it has been 
amply described and we do not need to get into all aspects of it but 
what I was so proud about was that this was a positive agenda of what 
we wanted, of what we were going to do as a majority party, a firm 
commitment to the American people. A number of reforms in the opening 
day of the session, meaningful reforms, and then a long-term, 100-day 
effort with 10 major bills.
  Nowhere in the contract did we criticize Democrats in Congress, and 
nowhere did we criticize the President. It was interesting that the 
Contract With America was criticized. Yet if you analyzed it, we were 
doing something that they say politicians do not always do and, that 
is, instead of criticizing the other side, we said. ``This is what we 
stand for, this is what we are going to do,'' and none of it was 
negative. It was all positive.
  Mr. KINGSTON. I was in the State legislature before I got here. One 
of the things I have always heard about politicians is you make one set 
of promises on the campaign trail and then you vote a different set of 
philosophies once you are in elected office.
  This was the first time in my knowledge in my political experience 
that Members of Congress, elected officials, actually kept the campaign 
brochure in their front pocket. And as you remember, it was even read 
each day, the first 1-minute of each day was to read the Contract With 
America.
  Again as you are saying, this is what we are going to do, this is 
what we promised we would do, this is what we are doing, and now after 
the first 100 days, that is what we did.
  Mr. SHAYS. I notice we have been joined by a new Member, the 
gentleman from Kansas [Mr. Brownback]. We welcome you here. I think of 
how important the new Members have been as a catalyst, obviously one to 
give us the opportunity to be in the majority but the second thing, a 
strong base of new Members that have been determined that we will 
fulfill the commitments that we made. I am happy to yield to my friend. 


[[Page H 13713]]

  Mr. BROWNBACK. That is what I find out when I go home, that people 
are surprised that we are. That they go and say, ``I really support and 
agree with what you guys are doing. You know what, I love it because 
this is what you said you were going to do and you're doing it.'' I 
even have had people that said, ``I didn't vote for you but I'm going 
to this next time because you're doing exactly what you said you were 
going to do.''
  I do not know why this should be any great shock but it is in a 
political system that we are getting that done.
  I would like to if I could compliment the gentlemen as well on the 
reform efforts we are getting done, gift ban passed 2 weeks ago, on the 
verge of lobby reform. Campaign finance next year. Those are key things 
that the gentleman from Connecticut [Mr. Shays] has done a tremendous 
amount of work on.
  Mr. KINGSTON. If the gentleman would yield a second, putting Congress 
under the same laws as the American people, the Shays Act, from the 
gentleman from Connecticut.
  Mr. BROWNBACK. An amazing thing to think that we were not under the 
same laws but we were not. But right now we are about to engage in one 
of the most historic things in reshaping this Federal Government right 
now and that is balancing the budget. I do hope the administration is 
watching and going to participate in actually forming a 7-year budget 
that goes to balance, zero deficit in year 7, so that we can get rid of 
this deficit.

  I get worried that the administration is not going to participate in 
this. I certainly hope that they are going to and that they are not 
just going to criticize the budget plan that we are putting forward. We 
have put forward a very specific budget plan and I hope the 
administration puts forward an equally specific budget plan of how we 
get to balance in 7 years. It is critical for our future, it is 
critical for our priorities, and we need to have a legitimate dialog 
and debate just about that.
  Mr. LONGLEY. If the gentleman would yield, I would just like to point 
out again, we just celebrated the Thanksgiving holiday last week. 
Certainly all of us in our own way pause to give thanks for the great 
blessings that we have received as individuals, as families, and as a 
country.
  I have been fortunate enough to live overseas for a year or two of my 
life, and it just really makes me realize how fortunate and how lucky 
we are as Americans to live in this country. But is also gives me an 
opportunity to kind of reflect back over the last 18 months, and one of 
the thoughts that came to my mind was, as important as the Contract 
With America was, the one aspect of the contract that really stood 
above all of the others is the need to get this country on the track to 
a balanced Federal budget.
  I mention that because when I look at the 850 plus or minus votes 
that we have cast over the last 10 months, the dozens of issues that we 
have had very strong and maybe even very heated debates about, a lot of 
that has obscured the fundamental reason that many of us got into 
politics and decided to run for this office and to serve in this body, 
which is to get the country on the track to a balanced budget.
  To pick up on what the gentleman from Kansas just said, I as a 
citizen, as a Member of Congress, as someone who is concerned about the 
welfare of this country, in listening to the President speak last 
night, in the back of my mind I am saying to myself, is the 
administration truly committed to balancing the budget in the 7-year 
timeframe?
  Again, the President campaigned on the fact that he wanted to balance 
the budget in 5 years. We not have an agreement to do it in 7 years. 
Given the fact that he has been in office for 2 years already, 
effectively what we have done is provided a mandate of a 9-year 
balanced budget when in fact the administration, the President, 
campaigned on a 5-year budget.
  The only reason I mention that is that I want to be positive and I 
want to believe that we can count on the President and his 
administration to deliver on this commitment. I say I thought about 
that last night because one of the feelings that I know any American 
soldier or marine will have, and I have to confess that I felt that 
myself, having served during Desert Storm in northern Iraq, you always 
wonder. You realize that your fate is in the hands of powers far 
greater than you are.
  I hope that the administration is serious about working with us. We 
are going to have policy disagreements. Republicans and Democrats can 
disagree, but we need to disagree within the context of balancing the 
Federal budget and taking no more than 7 years to do it.
  In my view, the President's commitment to that objective is just as 
sacred a commitment as his duties as Commander in Chief when he orders 
American men and women into service overseas. I see a linkage between 
the two issues.
  I will feel, frankly, far greater confidence in the administration's 
commitment to send troops to Bosnia if I know that they are also 
serious about keeping their commitments in other areas. Because if they 
are serious about keeping their commitment on the budget, then I know 
that they are going to be serious about keeping their commitment to act 
in the best interests of our men and women who may be called to duty 
over overseas.
  I would yield back to the gentleman, but I wanted to pick up on the 
point he just made so very well.
  Mr. BROWNBACK. I appreciate that very much from the gentleman from 
Maine.
  I yield to the gentleman from Michigan [Mr. Smith].
  Mr. SMITH of Michigan. We do not want to spend a lot of time 
eulogizing the gentleman from Connecticut [Mr. Shays].
  Mr. SHAYS. Do not spend any time. We do not have much left.
  Mr. SMITH of Michigan. But I am proud to work with you, Chris. 
Everybody knows the guy that is just consistent, that is soft-spoken, 
that has good ideas and follows through on them. I am certainly proud 
to work with you on all of these issues, from campaign finance reform 
to balancing the budget.
  See, we just need to shout out and say, look, does everybody realize 
what a predicament this huge, overbloated Government has gotten us into 
and the imposition that it is placing on our kids and our grandkids.

                              {time}  2100

  You know, we say balance the budget, but even at the end of 7 years 
we are still borrowing $100 billion from the trust funds. And yet the 
whining and the moaning and the criticizing about our going too far, we 
are hurting our economic future and we are putting this load on our 
kids. you know, we have got unfunded liabilities in Social Security and 
Medicare, Medicaid, promises we have made to retirees. We have now 
guaranteed that we are going to hold harmless all the private pension 
funds just in our overzealousness to try to do good things to people so 
we will get reelected.
  We have really made some commitments that are placing us in great 
jeopardy.
  Mr. SHAYS. I thank the gentleman for how incredibly persevering he 
has been in waking us to the fact that we cannot continue to increase 
our national debt until we get our financial house in order, and this 
made an incredible difference making sure people recognize increasing 
the national debt is very much related to the deficit that we have 
every year. We have deficits because we spend more than we raise 
in revenue each year, and the end of each year they just keep getting 
added to the national debt.

  I was thinking about my colleagues talking about Thanksgiving and how 
much we have to be grateful for. This is a very bountiful Nation, but 
we are mortgaging our children's future and we need to wake up to that 
fact.
  Thirty years ago, as one of the documents that you gave us pointed 
out, we had a debt of only $375 billion, and as your document pointed 
out, we had World War I, World War II, the Korean War, Vietnam War that 
was financed by debt, and now, with no war basically, we have gone from 
$375 billion to $4,900 billion, a 13-fold increase in a short period of 
time.
  Mr. SMITH of Michigan. If the gentleman will yield, the interest on 
our public debt subject to the debt limit now is almost $330 billion. 
You compare that with 1977 of a total Federal budget of $370 billion, 
it is disrespectful.
  Mr. SHAYS. We have been joined as well by the gentleman from Arizona. 
I 

[[Page H 13714]]
would like to get us to begin to focus on what we are trying to do. 
What we are trying to do is get our financial house in order and 
balance the Federal budget at least within 7 years. There is nothing 
that says we could not do it in 6 or 5. We can talk about whether this 
is a difficult task or not.
  In one sense, the gentleman from Kansas was pointing out people have 
said, you know, you vote for the balanced budget amendment, and there 
were over 305 Members who did that; and we are voting to balance it in 
7 years, which is the balanced budget amendment said do it within 7 
years. We are doing it for a logical reason. We just want to care about 
our children.
  Mr. KINGSTON. Let me ask the gentleman a question. I am on the 
Committee on Appropriations. You guys are the budgeteers. I want to ask 
you something many constituents ask me, and that is you look at the 
Bush tax deal in 1990, look at Gramm-Rudman, you look at all these 
grand crescendos we had in Washington followed by a lot of bipartisan 
hugging and kissing, backslapping, are we not great? Then we wait. The 
budget is never balanced.
  Is this going to be the case? Why 7 years? Those of us who are here 
in this Chamber tonight, we may not be elected in 7 years. Now we may 
cut the budget and start it. What is going to make sure that in the 
year 1997, 1998, 1999, 2000?
  Mr. SHAYS. I would like to take a first crack at that. Basically, 
there are two parts of this budget we are focused in on. One is the 
appropriations the gentleman is very much involved in. That is only 
one-third of our budget.
  Congress, for so many years, attempted to control the growth of 
spending by focusing on one-third of the budget. By entitlements, you 
fit a title, you are given a certain sum of money, a certain benefit, 
whether it is Medicare, Medicaid, welfare, food stamps, and so on. You 
get that benefit. Those entitlements have been growing. Gramm-Rudman 
never focused in on entitlements.
  This is the first Congress, and the gentleman from Kansas was talking 
about those who said, you know, good, you are following through, and 
the positive response. We are getting some negative response. We have 
to be very up front about it. We are taking on a lot of special 
interests. It mostly focuses in on the entitlement side. I do not think 
people realize we are cutting some programs. We are eliminating some 
programs. The vast bulk of programs, most of them entitlements, will 
grow at significant rates. Medicare is going to grow at 7.2 percent, 
Medicaid at over 5 percent.

  In some cases, we are seeing a lot of expansion. We are still trying 
to ultimately have spending slow the growth of spending so it 
ultimately intersects with revenue by the seventh year, and no balanced 
budget.
  I yield to my colleague, the gentleman from Arizona, who has joined 
us.
  Mr. HAYWORTH. I thank my good friend from Connecticut. He raises a 
point that is absolutely valid and cannot be repeated too often. That 
is the fact in the span of little more than 40 weeks in a majority in 
this Chamber we are looking to reverse the course of 40 years of a 
philosophy predominated by the notion of bigger is better in a 
centralized government, in a centralized bureaucracy.
  The gentleman from Connecticut is quite correct to point out that 
what we have decided to do at long last, after almost a half century, 
is to seriously evaluate the efficiency and the practicality of the 
entitlement programs in addition to discretionary spending.
  I look in the well, I see my good friend from Michigan, and I know 
that he has been a watchdog on these issues. I know that at times he 
quite accurately, I believe, voices some frustration that we hear from 
many of our constituents saying it is not happening fast enough. What I 
would say, Mr. Speaker, to those who join us tonight here in this 
special order is we get the message.
  But a journey of 1,000 miles, in this case a journey of $12 trillion, 
to mix metaphors here, begins not with a single step but in this single 
session dedicated to making the fundamental change necessary.
  Mr. SHAYS. I did not answer the second part. Obviously, we have to be 
vigilant each and every year. We have to make sure we do the heavy 
lifting this year and next year and not ask the next Congress and the 
Congress after that one. But one thing that is quite significant, if we 
can make changes in entitlements, still allow them to grow but slow 
their growth, that becomes written in law and becomes an automatic 
process.
  So if we can make some significant changes in entitlements today, 
they will be in law, not sunsetted. So that is our effort.
  Mr. BROWNBACK. If the gentleman will yield for just a moment, I think 
there is another pressure point here. I do not know how many people 
caught what Chairman Greenspan said yesterday of the Federal Reserve in 
front of the Senate Banking Committee. He said if Congress fails to 
balance the budget in 7 years, interest rates are going up, they are 
going up. This is the chairman of the Federal Reserve saying to 
Congress there are many incentives and one of the key ones is what will 
happen to this economy if you fail and what will happen immediately and 
directly as a consequence of your failure.
  To just hook onto one of the points of the gentleman from Arizona, we 
are talking spending $12 trillion over 7 years. This is $12 trillion in 
Government spending. This is a lot of money that we are going to spend 
for the Government, $12 trillion. It is enough to run this Government 
on.
  Mr. LONGLEY. If I could just add something to that, you know, and I 
respect the comments of the gentleman from Arizona, but we have built 
this Government up over 40 years, and there is not a single vote that I 
do not cast that I am not concerned about what is the impact of this 
vote, if it is in changing the funding pattern for a program or 
possibly eliminating a program, and I respect the fact that many of 
these programs, much of the spending that Washington now engages in, 
was built up in good faith on the assumption that we were going to be 
able to make positive changes in society. But I think what we have come 
to realize is that the money is not the issue.

  Yes, money is part of the issue. But it is not the entire issue.
  What has happened is that money and Government have become ends in 
themselves in Washington to the detriment of the values that make this 
country what it is, and the lack of accountability, the distance that 
Washington has from what is going on in local and State Government, and 
I have no doubt in my mind that we are making the tough decisions that 
we need to make because money is not the only issue.
  It is now recognizing that individuals and local government and State 
Government need to have the authority and the responsibility to be able 
to do what only they can do and that much of what we have pretended 
Washington could do has not worked, and we have got to find new ways to 
do it.
  Mr. SMITH of Michigan. If the gentleman will yield further, I think, 
Mr. Speaker and colleagues, that the American people should know that 
we are now at a turning point. Will the President work with us in 
changing the welfare programs and the entitlements? Because those 
programs represent 60 percent of the savings that need to be made to 
finally achieve a balanced budget, and the President right now, I do 
not know if you heard the reports from leadership when they met with 
the White House, they are still discussing how CBO will do the scoring.
  Is the President serious about having a balanced budget in 7 years? 
Will he work with Congress in developing the kind of changes for the 
welfare programs so that we no longer have welfare as we know it?
  Mr. SHAYS. Maybe the gentleman would just explain the significance of 
what the Congressional Budget Office is, a nonpartisan office, not 
partisan office, that sets the economy, that determines where the 
economy is going to go. What is so significant about how CBO scores the 
budget?
  Mr. SMITH of Michigan. The Office of Management and Budget works for 
the President of the United States, takes their directions from him, 
and so they are able to say, look, the economy is going to expand by 3 
or 4 percent. They are able to present a rosy scenario and predict 
tremendous amount of revenues coming into the Federal Government so 
that the President or anyone else that wants to say it, look, 

[[Page H 13715]]
with all of these revenues coming in, we do not have to cut any 
spending and we will still achieve a balanced budget. So the danger is 
having somebody that is bipartisan, that is impartial, developing the 
projections for those 7 years.
  Mr. SHAYS. That partly answers the question the gentleman from 
Georgia [Mr. Kingston] raised about how come we failed in the past. I 
can speak from direct experience. I voted for the 1990 budget 
agreement. The part I liked in it that said if you expanded an 
entitlement you either had to come up with revenue or cut spending to 
pay for an expanded entitlement.
  What I failed to fully grasp was the budget being presented and being 
scored by the Office of Management and Budget, a Republican 
administration at the time, projected a tremendously rosy scenario 
which said the budget would be balanced in no time without a lot of 
heavy lifting. They said the economy is going to grow at a rate it 
never came close to growing.
  The challenge we had, and the President when he addressed it in the 
State of the Union Address 2 years ago, said let us use the 
Congressional Budget Office, a fair referee for determining how the 
economy will grow. Obviously, if the Congressional Budget Office scores 
it less than the Office of Management and Budget, we will have to do 
greater heavy lifting, we will have to make greater cuts to some 
programs and slow the growth in others, which I think we really have to 
do.

  Mr. KINGSTON. If the gentleman will yield, if we look at a private 
sector example, the big motor companies, the tractor manufacturers who 
are out there, they have all in the last decade had to downsize, and as 
a result most large United States manufacturers can produce more now at 
less cost and at a higher quality than they could in 1980, and the 
Federal Government has to go through this process as well. But it is 
not easy.
  You know, it has taken the fuel of the freshman class and the votes 
provided by the freshman class to get this through. But, you know, 
long-term players like you know that if this was easy we would have had 
a balanced budget since 1969, and, you know, I think the Speaker, has 
said nobody said that when you are going to start cutting the programs 
they are going to come up here and say this is great, you are cutting 
out my job but you are balancing the budget, I am so proud of you. That 
is just not happening.
  Mr. LONGLEY. The gentleman has made an important point. The Federal 
Government is the least changed major institution in the United States, 
and as tough as the decisions have been that we have had to make, and 
we are going to be asked to make more of them and very serious 
decisions, the fact also remains that we need to succeed at what we are 
doing. We need to work with the President to make sure this happens 
because if we are not successful in making these kinds of changes, as 
modest as they are, and when I say modest, you know, the gentleman from 
Kansas referred to the $12 trillion that we are going to spend in the 
next 7 years versus the $12.8 trillion or $12.9 trillion that the other 
party would like to spend, or, if you will, the big difference between 
the mean, cold Republicans and the warm-hearted Democrats is that the 
mean Republicans are only going to let the Federal Government increase 
spending by $3 trillion, whereas the Democrats are going to have to 
increase by $4 trillion. But that $1 trillion, that trillion-dollar 
difference in a $12 trillion or $13 trillion budget is all the 
difference in the world between adding $1 trillion in national debt on 
top of the trillions of dollars of debt that we already have or finally 
getting to a balanced budget and starting to work towards eliminating 
our debt and not just adding to it.
  Again, I remind myself I was barely two aisles away I was sworn in in 
January, and I had my 7-year-old daughter, Sarah, and my 11-year-old 
son, Matt, and while I am being sworn in, it is drawning on me this 
government today is spending the money that my 7-year-old and my 11-
year-old will spend their working lifetimes paying back, just paying 
the interest let alone retiring any of the debt.
  Mr. SHAYS. Which raises the question, where are we headed right now? 
What we have is an agreement with the White House, and I take them at 
their word that they will work within the parameters of balancing the 
budget within 7 years and also, very important, that they will use real 
numbers scored by the Congressional Budget Office, not the bipartisan 
office, the nonpartisan office.

                              {time}  2115

  So we have now the framework to have a meaningful dialog. We have 
presented our budget. Candidly, there are parts of that budget I do not 
like. I am proud of what we have done. I am in awe of what we have 
done. But there are parts I do not like.
  Maybe some of the parts I like the gentleman from Michigan may not 
like or the gentleman from Georgia or the gentleman from Maine or 
Arizona. Even in that conference, we had our disagreements. Ultimately, 
we agreed as the majority party to do something no Congress has ever 
done, and that is take the initiative to balance the budget and get our 
financial house in order.
  Now we have the right, and the President has the obligation to 
respond, we have the right to ask him where is his 7-year budget, where 
are your priorities, Mr. President, and then we will evaluate them and 
say we agree here and we disagree here. Candidly, I have some 
suggestions on how he could make our budget better. I would like to see 
it a little more friendly to urban areas. The gentleman from Michigan 
may want to see it more friendly to farming areas. We may be lobbying 
the White House to weigh in in a particular way.
  Ultimately, if we can agree to balance the budget in 7 years, 
interest rates will not go up, they will go down. Maybe one of my 
colleagues would like to talk about the benefits of getting the 
balanced budget and what it means in terms of the interest rates.
  Mr. SMITH of Michigan. Mr. Speaker, another situation I am sure that 
the people that want to spend more money have already started arguing 
is let us not have any tax cuts. So I think it is important to remind 
ourselves where we have been over the last 5 years, based on the tax 
increase over a 7-year span. In 1990, we had a tax increase of $235 
billion. In 1993, a little over 2 years ago, we had a tax increase of 
$350 billion spread out over 7 years. Now the tax increase in this 
proposal is $222 billion. It is just a question that if you start 
increasing taxes too much, I mean, everybody knows and the economists 
all say that you start depressing the economy and depressing jobs. So 
the question is should we give some of those tax increases back.
  Mr. LONGLEY. Mr. Speaker, is what the gentleman really saying is we 
are proposing a tax cut that is literally less than half of the two 
prior tax increases that were passed in this body?
  Mr. SMITH of Michigan. That is correct. And the goal has got to be to 
expand business and jobs in this country, at the same time that we 
achieve a balanced budget, to say, just like the gentleman said, the 
wages that your kids have not even earned yet are going to have to pay 
for our overindulgence as a Federal Government living beyond our means.
  Mr. HAYWORTH. Mr. Speaker, coming back off of break and spending time 
at home reminds me of the fact that on Saturday, John Micah Hayworth 
turns two, our youngest child. And if we do nothing to change the 
culture of taxing and spending, if we are somehow able to hold this 
remarkable experiment together with the legislative equivalent of 
chewing gum and bailing wire, postponing the decisions we need to make, 
John Micah Hayworth over the course of his lifetime as a working adult 
will pay over $185,000 in taxes to the Federal Government just to 
service the debt. Just to service the debt.
  The President, to his credit, a couple of years ago, in sending his 
budget proposals up to Capitol Hill, included a page called 
generational accounting, measuring the effects of expenditures 
in governmental services, projecting it on the next generation of 
taxpayers.

  The results were astonishing. Mr. Speaker, I do hope that those who 
join us are seated at home when they hear the figures, because they are 
mind boggling and terrifying. To maintain the current culture of 
spending and governmental services at all levels, the average taxpayer 
of the next generation would be looking at surrendering 82 percent of 
his or her income in taxes to provide those services.

[[Page H 13716]]

  Now, look at the steady increase. In 1948, an average family of four 
surrendered 3 percent of its income in taxes to the Federal government. 
By 1994, it was almost one-quarter of income, 24 percent. Clearly there 
is nothing ignoble, there is nothing selfish, in saying and recognizing 
that the people of this country, liberal and conservative, Republican 
and Democrat and Independent, all work hard for the money they earn. 
They should hang on to more of it and send less of it to the 
Government, because, as the gentleman from Michigan points out, it is a 
matter of allowing the market to flourish and to prosper and to 
rekindle the economic engines that have driven this country so 
dynamically.
  That is the challenge we face. It is not a matter of downsizing; it 
is a matter of right sizing. What is right for the future? Good honest 
debate can take place. The gentleman from Connecticut mentioned it. I 
championed the fact that the gentleman at the other end of Pennsylvania 
Avenue, the President of the United States, has put his signature now 
on what is in effect a contract agreeing to the parameters of a 
balanced budget in 7 years with honest numbers.
  Mr. KINGSTON. Mr. Speaker, if the gentleman will yield, and I hate to 
stop his peroration. He is on a roll and sounding good, but I wanted to 
make a point that I think is very important. We do not discuss this as 
much when we talk about that middle class tax burden, which as the 
gentleman said, has gone from about 3 percent in the early 1950's to 24 
percent now, and the gentleman from Maine points out how the middle 
class is just piling on more and more. the gentleman from Michigan 
talked about we got hit with new taxes under Bush, new taxes under 
Clinton, and this tax cut is less than those new taxes.
  But the point is, there are also a lot of tax loopholes that this 
balanced budget bill actually stops. So often American people say, 
``You know, I don't mind paying my fair share, but I want to make sure 
everybody is paying their fair share.'' In many cases, there is a lot 
of fine print that it is stopping some of these loopholes in this 
balanced budget bill. A lot of this corporate welfare is stopped. But 
it never makes it into print or debate, but it is in there.
  The gentleman from Connecticut talked about what the impact is on the 
middle class family of having a lower interest rate. If you have a 
$75,000 mortgage over a 30 year period of time, you save something like 
$39,000 with lower interest rates. That is big money for middle class 
America.
  Mr. HAYWORTH. Will the gentleman repeat that? We have to amplify what 
is in effect a balanced budget bonus that will be there.
  Mr. KINGSTON. This all comes back, and the gentleman from Michigan 
[Mr. Smith] mentioned it earlier as to why, Alan Greenspan, the 
chairman of the Federal Reserve, when he testified to the Congress, and 
it was actually months ago, he said that balancing the budget could 
bring down the interest rate as much as 1.5 percent. Other economists 
have said 2 percent. Most everyone agrees it will be at least 1 
percent. That is 1 percent, 2-percent lower, on a student loan, a house 
mortgage, a car payment, your Visa bill, your MasterCharge bill down 
the line. That is going to help the middle class of America.

  Mr. SHAYS. Not to confuse the matter, it is rally one point down. If 
someone was paying 8 percent, they would pay 7 percent. It is a 
significant drop in the total amount they would have to pay.
  I was thinking about the gentleman raising the issue of taxes. We 
could even in this group here have argument or discussion as to when 
the tax cut should take place. But we all know that we pay for tax cuts 
with spending cuts. They amount to 1.5 percent of the total revenue we 
are going to raise in the next 7 years. So we are just reducing the 
revenue flow by 1.5 percent. One of those, the capital gains exemption 
in the minds of many will create revenue rather than cause a loss. We 
have to score it by the nonpartisan Congressional Budget Office as a 
revenue loss.
  Mr. SMITH of Michigan. If the gentleman would yield, everybody should 
still understand that revenues from taxes significantly increase over 
this 7-year time period, so there are going to be more revenues coming 
in from taxes, even though we have a modest reduction in the rate of 
some of those taxes.
  Mr. KINGSTON. I wanted to say one of the things that people are 
overlooking so often are the cuts for the rich. Seventy four percent of 
the people who benefit from the tax cuts have a combined household 
income of less than $75,000. Last week I was speaking to the AARP. I 
said, ``You know who the rich are getting this tax cut? It is you, the 
senior citizens. You are going from $600,000 to $750,000 on your estate 
tax exemption, from $11,000 to $30,000 as the exemption for Social 
Security earnings limitation. You or your family will be getting a $500 
tax credit for having a dependent senior living in your home.'' These 
are helping senior citizens as much as anybody.
  Mr. LONGLEY. If I could interject, I think all of us would agree we 
need to provide tax relief, particularly to the middle class and to 
working families. I think that the public has been served a tremendous 
injustice to the extent to which they do not understand that some of 
the provisions in this tax cut that we are looking at are heavily 
geared towards working families. Radical ideas like eliminating or 
easing the marriage penalty, so a couple that gets married does not pay 
more tax to be married than they would pay if they lived together 
without being married. We are going to provide a tax credit for 
adoptions, to increase adoptions and the incentive to adopt, hopefully 
to make that an easier process for people. We are going to give people 
a deduction to take care of elderly parents in their homes. What an 
outrageous idea, that we could actually let a family try to take care 
of a loved senior in their own home.
  We are going to be providing an increased health deduction for health 
insurance for the self-employed. Medical savings accounts. We are going 
to give spouses the opportunity to have a full IRA if they stay home to 
take care of the children. We are going to allow additional interest 
payment deductions on student loan repayments.
  It is just outrageous to me that the public is not being told the 
full extent of the types of measures that we are targeting, that this 
is not some big tax cut for the rich. Frankly, anyone that suggests 
that is not paying attention to the facts.
  Mr. SHAYS. If the gentleman would yield, more than half of the tax 
cut is a $500 tax credit to families who, if it is a single mother, 
would be any family under $75,000, and a dual family, husband and wife, 
father and mother, $115,000. Not above that income level. It is focused 
in on truly those most in need.

  To illustrate the argument for it, it is a very clear one. You were 
talking about families in the 1940's. I was 1945 baby. My three older 
brothers were raised by my family in the 1940's and 1950's. My parents 
were given in today's dollars the equivalent of $8,200 per child tax 
deduction off their income, an equivalent of $32,800 off their total 
income in today's dollars. A family today is given $2,500 as a 
deduction. My family raised me when they paid less than 15 percent of 
their income in taxes. Today a family raising children are faced with 
anywhere from 25 to 40 percent of their income going to taxes. So there 
is just no question why we want to do it.
  Someone asked me this question. They said, ``Isn't the most important 
issue balancing the budget and getting the economy moving again?'' The 
answer is yes, I say taxes would be second to that. But if we are going 
to balance the budget and take 7 years to do it, we can afford a tax 
cut. If we agreed that we could balance the budget in 4 years, maybe we 
could not do it with a tax cut. But that is not what is before us. It 
is a 7-year balanced budget effort. So we clearly can reduce the burden 
on taxpayers over that period of time.
  Mr. HAYWORTH. If the gentleman would yield, some of the debate has 
been characterized, and indeed some have talked about letting people 
hang onto more of their hard-earned money as if it were the equivalent 
of free candy. I have heard that expression used by some who would try 
to envelop themselves in a populist mantra.
  Again, this is money earned by working Americans. It is their money. 
And, 

[[Page H 13717]]
again, we come back to the central realization: This Government does 
not create the wealth. In our free market economy, this Government does 
not create the wealth. The wealth and the economic well-being results 
from the fruit of labor and work.
  So what we are simply saying is for working Americans, you deserve to 
hold on to more of your money, because you know best how to care for 
your family. You know best the dreams and the aspirations of your 
children. You know best the dreams that you have for your children. You 
should have that money to spend as you see fit, to save, to invest, 
because in doing so, you will not only be caring for your family, you 
will be caring for your community.
  Mr. SMITH of Michigan. If the gentleman will yield, just the 
frustration so many Americans have felt that are working so hard for 
the dollars that they have to raise their families, and then if you go 
out to the check out counter at the grocery store, very often you see 
food stamps that are being misused for all kinds of non-nutritious food 
items. So as you look at the welfare recipients that may be have ended 
up with a snowmobile or whatever that you cannot afford, while you are 
paying taxes, you know part of your tax dollars are being wastefully 
spent in so many areas. So I think the only way we are going to achieve 
this is for the American people to say ``Look, enough is enough. Just 
do it.'' I think that is what the American people are starting to say.

                              {time}  2130

  Mr. KINGSTON. Mr. Speaker, if the gentleman will yield.
  I am a Congressman in a car pool line. I have four kids. I drive a 
car pool every Monday before flying up to here. As I look at the other 
dads and moms in the car pool line and I think about that $500, I know 
where the money will go. It will go to buy new shoes, maybe a new book 
or two, maybe a downpayment on a computer or some software program. It 
will go to positive things.
  And what happens is most of that money will be spent locally and it 
will be spent in small businesses. Those small businesses, as we all 
know, will expand, they will create jobs, and new people will be 
working. People will get off of public assistance benefits. And what 
will then happen? More revenue comes in.
  I believe, Mr. Speaker, getting back to what the gentleman from 
Connecticut said, that the tax cut is very much in line with balancing 
the budget and will, in fact, grow the economy.
  Mr. SHAYS. Mr. Speaker, if the gentleman will yield.
  This was a commitment we made to the American people in our Contract 
With America and we are fulfilling it. We did not say before the 
election we will cut taxes and afterward forget that pledge. That is an 
important part of this whole effort.
  We talked about the significance of balancing the budget, and as the 
gentleman from Michigan, Nick Smith, has pointed out, in that wonderful 
document I keep referring to, he points out that 42 percent of all of 
our savings goes to pay for our national debt. Just think if some of 
that could go somewhere else, like investing in new plants and 
equipment. We know that when interest rates go down businesses say, I 
can be competitive, I can afford to buy this new plant and equipment 
because the cost of money is less.
  If we could, I want to get into this one area, we have about 9 
minutes left, and it is the whole issue of what are we doing; are we 
cutting earned income tax credit, are we cutting the school lunch 
program, are we cutting the student loan program, are we cutting 
Medicaid and Medicare?
  I would love to go through this list because it has been such a 
difficult thing for me to hear some Members say, well, of course, 
everyone wants to balance the budget, then they tell us what they do 
not want to cut or they accuse us of cutting things we are not cutting.

  On the table, when we talk to the President, we want him to know the 
earned income tax credit is going to go from $19 billion to $25 
billion. Only in Washington when we go up 28 percent do people call it 
a cut. The school lunch program, just within a 5-year period, will go 
from $6.3 to $7.8 billion in 5 years. That is an increase, but in 
Washington they call it a cut. The student loan program, and this 
really gets me, it goes from $24 billion to $36 billion. We are going 
to spend in the 7th year $36 billion. That is a 50-percent increase, 
but in this place some people call it a cut. Medicaid will go from $89 
to $127 billion. Clearly an increase in spending, not a cut. Medicare 
from $178 billion to $289 billion. That is a 7.2 increase each and 
every year.
  So the bottom line is we are cutting some programs and we are 
actually eliminating some. We are consolidating the Commerce Department 
and we are making some tough decisions. But on some of these programs, 
that are basically entitlement programs, they are going to grow quite 
significantly. In fact, some people are embarrassed to admit how much 
they are growing, but at least we have to say to people these are 
increases.
  Mr. Speaker, I hope the President realizes that, and I hope he 
focuses in on where his priorities are. He has a tax cut he would like. 
It is a tax credit for families who are paying to have their children 
go to college and are giving them some benefit. Maybe that is something 
to be on the table and we talk about taking one of our taxes off.
  Mr. Speaker, I would be happy to yield to my colleague.
  Mr. SMITH of Michigan. Let me mention that the Speaker tonight for 
the U.S. House of Representatives is the gentleman from Michigan, Dick 
Chrysler. The gentleman just mentioned the Department of Commerce. Mr. 
Chrysler led the way to make a consensus that we are now moving towards 
cutting the waste in that department out, abolishing it as a named 
institution. He has introduced legislation now also that gives that tax 
credit for education. So my compliments to the Speaker.
  I throw that in and will yield to the gentleman.
  Mr. HAYWORTH. I thank the gentleman from Michigan for saluting the 
other gentleman from Michigan, who tonight serves as our Speaker pro 
tempore, and who, indeed, led the way with a tangible action to right 
size the government borne of his experience in the working world.

  Mr. SHAYS. And, I might add, saved about $7 billion in the process.
  Mr. HAYWORTH. That is real money, and I thank the gentleman from 
Connecticut for making that vital point.
  Mr. Speaker, I think it is important to note, and my colleagues here 
gathered on the floor on both sides of the aisle, I think it is worth 
noting that in the wake of this historic shift, with the changes that 
have taken place, there has been a great deal of heat generated on this 
floor. We recognize the fact that good people can disagree, but, Mr. 
Speaker, I do not believe it is too much to ask the American people to 
join with us now to take a look simply at the proposals which we have 
outlined; coolly, objectively, yes, compassionately, divorced from the 
venom and vitriol and exaggeration that so often takes the place of 
sound public policy discussion.
  Indeed, what has happened here, tragically, has been almost the 
utilization of political theater instead of rational policy discussion.
  So, Mr. Speaker, I simply have a challenge to the American people 
and, indeed, to our friends on the other side and, indeed, to our 
President at the other end of Pennsylvania Avenue, echoing what the 
gentleman from Connecticut has said. There are philosophical 
disagreements. There may be a different way of looking at what should 
happen in the future. We believe, in the new majority, that we have 
fashioned a plan that indeed complements very nicely, ironically, the 
path first endorsed by candidate Clinton in 1992, many of the 
objectives he said he had hoped to reach as a candidate.
  Again tonight, Mr. Speaker, as we have done on so many occasions, 
recognizing that some things are nonnegotiable, the notion of balancing 
this budget in 7 years, the notion of providing adequate funding to 
reevaluate what transpires with entitlements to evaluate and better 
understand how to make sure that we have a safety net instead of a 
hammock in terms of social spending, but once again, Mr. Speaker, we 
would be remiss if we did not say again the hand is extended from 
this legislative branch to the executive branch, from the Congress of 
the United States to the White House. 

[[Page H 13718]]
Again, Mr. Speaker, we would simply ask the President of the United 
States to join with us and govern, to set the stage for a balanced 
budget in 7 years, because the American people deserve nothing less.

  Mr. SMITH of Michigan. Mr. Speaker, I would like to compliment the 
gentleman from Connecticut [Mr. Shays] for organizing this special 
order and would ask for his conclusion.
  Mr. SHAYS. Mr. Speaker, I thank the gentleman. I know we have about 2 
minutes left, and the bottom line is that what is not negotiable is 
getting our financial house in order within at least 7 years and to use 
real numbers scored by the Congressional Budget Office.
  We are not saying the President has to accept our budget. We are 
eager to see his budget and then work out where our differences are. 
Obviously, we will have our differences. People have said to me this 
must be kind of tough being down in Washington, the polls are somewhat 
negative about what is going on both to the President and the Congress, 
even more so to the Congress. And I have responded in a like response 
to say we are doing some heavy lifting.
  I am proud of what we are doing. If we just looked at the polls, I am 
reminded of thinking if Abraham Lincoln had looked at polls we would 
not be one Nation under God, indivisible, we would be two nations. When 
President Lincoln was bringing about change and fighting the great 
conflict, his poll ratings were, according to historians, practically 
nonexistent. He was considered a bumbler. He had to be snuck into the 
city. Ultimately, it was not until the fourth year people began to 
realize the significance of what was taking place.
  The bottom line for us is we are going to get our financial house in 
order. We will do it ultimately, I think, on a bipartisan basis. We 
will do it with an extended hand, as the gentleman has pointed out, but 
we are determined. We have left the old world for the new world, and we 
are not going back to the old world. We burned our ships. We are either 
going to succeed or fail, but we are not going to return to business as 
usual.
  With that I thank my colleagues who have joined us and thank you, Mr. 
Speaker, for your attention and your willingness to preside over this.

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