[Congressional Record Volume 141, Number 189 (Wednesday, November 29, 1995)]
[Extensions of Remarks]
[Pages E2254-E2255]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         BUDGET RECONCILIATION

                                 ______


                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                      Wednesday, November 29, 1995

  Mr. HAMILTON. Mr. Speaker, I would like to insert my Washington 
Report for Wednesday, November 29, 1995, into the Congressional Record.

                 Why I Opposed the Gingrich Budget Plan

       Earlier this month, the House considered two different 
     budget reconciliation plans that would balance the federal 
     budget in seven years. The first plan, proposed by Speaker 
     Gingrich, was approved by the House and Senate, but vetoed by 
     President Clinton. I opposed this version. The second plan, 
     drafted by a group of conservative Democrats known as the 
     ``Coalition'', was defeated by the House. I supported this 
     version.
       Congress is taking serious steps to address the budget 
     deficit. I support a balanced budget and a line-item veto and 
     have voted for a balanced budget amendment to the U.S. 
     Constitution. I will continue to urge the President and my 
     colleagues in Congress to reach a bipartisan agreement to 
     balance the budget in seven years.
       The Gingrich plan.--This budget plan includes the following 
     major provisions:


                            health care cuts

       The plan would cut back an estimated $270 billion from 
     projected spending in the Medicare program. It would increase 
     Part B premiums paid by beneficiaries; cut back payments to 
     hospitals and doctors; and give beneficiaries a wider choice 
     of health insurance options. The plan also would cut back an 
     estimated $170 billion from the federal share of Medicaid by 
     converting it into a capped block grant to the states, 
     limited the amount of federal funds a state could receive.


                               tax breaks

       The Gingrich budget would provide $245 billion in tax cuts, 
     including: a $500-per-child tax credit for families with 
     incomes up to $110,000; an expanded Individual Retirement 
     Account (IRA); and a reduction in taxes on capital gains 
     income. It also would scale back the Earned Income Tax 
     Credit, which benefits the working poor, by $32 billion.


                               other cuts

       The plan would reduce spending on welfare by $82 billion by 
     converting the current program into several block grants to 
     the states. It would cut back spending on farm programs by 
     $13.8 billion by reducing export supports and replacing 
     current programs for 

[[Page E 2255]]
     major commodities with declining annual cash payments which are not 
     tied to crop prices. It would also increase borrowing costs 
     for college students, and reduce spending on veterans' 
     programs by $6.7 billion.


                          the coalition budget

       The conservative ``Coalition'' budget I voted for asks 
     every American to do their fair share with more evenly 
     distributed spending cuts. This plan would reduce spending by 
     more than $850 billion over seven years. It reforms welfare, 
     preserves Medicare and Medicaid for the future, cuts 
     corporate subsidies, and makes farm programs more market-
     oriented. It also includes a line-item veto and tough 
     enforcement measures.
       The Coalition budget is a promising middle ground between 
     the White House and the Speaker's budgets. It eliminates the 
     federal budget deficit in seven years, as the Republicans 
     want, uses realistic cost estimates, ensures that work pays 
     more than welfare, and reduces the burden of the debt, while 
     requiring less drastic cuts in social programs, such as 
     Medicare and Medicaid, because it is without tax breaks. 
     Furthermore, the Coalition budget reduces the deficit right 
     away, while the Gingrich budget adds to the deficit (and the 
     debt) in 1996 and 1997 because the tax breaks are front-
     loaded.
       My position.--I opposed the Republican budget plan for four 
     reasons.
       First, the job of balancing the budget is made much more 
     difficult by huge tax breaks. We cannot justify large tax 
     cuts until the budget is balanced--especially when the tax 
     breaks start early and most of the spending cuts are delayed. 
     If and when a surplus does occur, then Congress should pass 
     the tax cuts. It does not make sense to borrow more money to 
     give ourselves a tax cut. My preference would be for a more 
     balanced tax package. A good portion of the Gingrich tax 
     breaks would favor wealthier Americans.
       Second, my spending priorities are different. Half of the 
     total savings come from health care and assistance to the 
     poor and elderly. We should not ask the poor to bear more 
     than their share of the burden. The cuts in Medicare and 
     Medicaid are too steep. My preference is for fair, across-
     the-board cuts in most programs; deep cuts in ``corporate 
     welfare;'' and more modest increases in defense spending. We 
     should also preserve funding for long-term investments in 
     education, research and infrastructure. These are necessary 
     to continue economic growth, increase revenues, and reduce 
     the deficit.
       Third, the plan delays most of the tough spending cuts 
     until 2001. Until then, we will have deficits in excess of 
     $100 billion per year. My preference is to reduce spending 
     gradually each year, rather than postponing action.
       Fourth, the process for consideration of the bill was 
     flawed. The bill is too large (it runs over two thousand 
     pages) and covers too many important issues. Speaker Gingrich 
     only allowed two hours of debate on the measure, without an 
     opportunity for amendment. This process places too much power 
     in the Speaker's hands and subverts the legislative process.
       Conclusion.--I am encouraged by the recent agreement 
     between the President and congressional leaders which 
     establishes a basic framework for negotiations on the budget. 
     The President agreed to support a seven year balanced budget 
     plan and to use Congressional Budget Office assumptions to 
     get there, provided the budget plan is balanced, fair and 
     does not devastate key federal programs, particularly 
     Medicare, Medicaid and education.
       The budget clash taking place in Washington today is not 
     just a squabble among politicians who have forgotten their 
     manners. The policy debate reflects a nation at a crossroads 
     and turns on fundamental questions about the size and role of 
     the federal government and whether there should be any safety 
     net for the poor and the elderly.
       At the end of the year, if the Republicans refuse to 
     moderate their more extreme demands and if the President's 
     vetoes are sustained, then we will simply have to take the 
     debate to the voters next fall. In the interim, we should not 
     allow the country to be hurt by government shutdowns and high 
     wire management of the national debt.

                          ____________________