[Congressional Record Volume 141, Number 190 (Thursday, November 30, 1995)]
[House]
[Pages H13852-H13856]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               THE BUDGET

  The SPEAKER pro tempore (Mr. White). 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 60 
minutes, but I do appreciate the opportunity to address my colleagues 
about the budget.
  As I am sure that most of us can tell from listening to the debate on 
the House floor, the biggest issue right now is the budget which is 
being negotiated between the President, the White House, and Congress, 
both the Senate and the House, and over the next couple of weeks or so 
hopefully decisions will be made so that there can be a compromise 
worked out between the Republican leadership budget which passed the 
House and the Senate about a week ago and the priorities that have been 
articulated by President Clinton and most of the Democrats in Congress.
  The chief concern of myself as well as most of the Democrats is the 
fact that the Republican budget as passed essentially cuts Medicare and 
Medicaid by 

[[Page H13853]]
significant amounts in order to provide tax breaks primarily for 
wealthy Americans. If you look at the chart over here which I have 
pointed to many times, you can see that the cuts in the Medicare 
Program, the health care program for seniors, of $270 billion roughly 
translate into the tax breaks primarily for wealthy Americans of $245 
billion.
  I contend that during this budget negotiation, the only way that we 
are going to preserve and protect Medicare as well as Medicaid, which 
is the health care program for low-income Americans, is if we eliminate 
most if not all of these tax breaks for the wealthy and put that money 
back into the Medicare or Medicaid Program. Without that happening, and 
I hope that the budget negotiators accomplish that, but without that 
happening, it would not be possible in my opinion to preserve the 
Medicare and Medicaid Program.
  The consequence would be that many seniors and many low-income people 
would not have health care, would not have health insurance, or if they 
do have it, they would have the quality of that care significantly 
reduced. This not only impacts seniors and low-income people but also 
all Americans, because the cuts in Medicare and Medicaid directly 
impact every hospital in this country, every health care provider. The 
quality of our hospitals will deteriorate. Many of our hospitals will 
close because we are taking so much money out of the health care 
system, because of the dependence of hospitals and health care 
providers on the Medicare and the Medicaid programs and the Federal 
dollars that go along with it.
  One of the things that I wanted to start out with this evening is to 
point out that repeatedly the Republican leadership has suggested that 
these tax breaks that are in the budget bill that they approved would 
somehow be helpful to all Americans, it would not primarily be for 
well-to-do Americans. In fact, the gentleman from Texas [Mr. Archer], 
who is the chairman of the House Committee on Ways and Means, has 
repeatedly defended the budget bill by saying that there will be 
benefits for all Americans, proportionately and in a fair way.
  Well, the Treasury Department just came out in the past couple of 
days with an analysis of this Republican budget, and it was put forward 
or summarized, so to speak, in an editorial a few days ago on November 
23 in the New York Times that definitively showed, in my opinion, that 
the Treasury's analysis is correct and essentially shows that most of 
the tax breaks go to wealthy Americans.
  I just wanted to read briefly, if I could, from the editorial in the 
New York Times. It says that the Treasury Department estimated that the 
richest 1 percent would rake in almost twice as much, or 17 percent of 
the tax breaks. The Treasury figures are solid evidence that the 
Republican tax cut is heavily weighted toward the rich.
  If you look at this analysis on the chart here, it shows the 
Treasury's version based on the fully phased-in law, and as can be 
seen, the significant amounts of the tax breaks go to wealthy 
Americans: 23.8 percent to those that make more than $200,000; 23.7 
percent to those that make between $100,000 and $200,000; 19 percent 
for those who make between $75,000 and $100,000; 19 percent again to 
those who make between $50,000 and $75,000; to the point where if you 
are making less than $20,000, you actually pay a tax increase under 
this Republican budget.
  I just want to put that to rest, because I know we have heard a lot 
of discussion and statements on the other side of the aisle suggesting 
that this is not the case, but it is the case.
  One of the reasons why, and again I will go back to the New York 
Times editorial, one of the reasons why the Republican analysis is 
wrong and the Treasury Department is correct is because of the 
Republican distribution tables and the way they distort the bill. The 
New York Times says that the Republican distribution tables are 
distorted in at least four ways. I would like to go through those four 
ways.
  First, they underestimate the benefit to wealthy investors of the cut 
in the tax on capital gains. There is a major cut in capital gains that 
goes mostly to wealthy Americans.
  Second, the Republicans' estimates ignore the distribution of 
corporate tax cuts which help the wealthy more than the poor. Again, a 
big part of these tax cuts are for corporations.
  Third, the gentleman from Texas [Mr. Archer], again the Republican 
chairman of the Committee on Ways and Means, his numbers look only at 
the first 5 years of the tax cut. The Treasury's estimates calculate 
the benefit when the taxes are fully phased in, so we are looking here 
at the full phase-in of the taxes over the 7 years of the budget bill.
  And, fourth, the figures of the gentleman from Texas [Mr. Archer] 
fail to consider the fact that many low-income families will lose 
rebates they now receive under the earned income tax credit, a subsidy 
for low-wage workers. Again, the Republican analysis ignores the fact 
that if you are in this $20,000 or below, you are getting what we call 
an earned income tax credit, which means that if that is taken away, 
which the Republican bill does in significant ways, you are actually 
going to pay more in taxes than you pay now.
  I think that this is important because I honestly believe that the 
only way, and I will repeat, the only way that we can arrive at a 
budget bill negotiated between the President and the Republicans in 
Congress that actually saves Medicare and Medicaid is if we eliminate 
or at least significantly cut back on these tax breaks for the wealthy. 
I hope, I sincerely hope, that that is a big part of the budget 
negotiations, so that we can save Medicare and save Medicaid.
  I wanted to next, if I could, move to two reports that came out in 
the last week that talk about the impact of these Republican budget 
cuts on Medicare and Medicaid.
  The first report was done by the Leadership Council of Aging 
Organizations. They put out a report this Tuesday, November 28, that 
essentially identifies nine different ways how the budget hurts older 
Americans, our senior citizens. I would like to just go through those 
nine points and then maybe give a little more detail about some of the 
more important ones.

  The nine ways that the budget hurts older Americans, according to the 
Leadership Council are, first, that Congress cuts Medicare by $270 
billion, and that means that part B premiums rise from $46.10 to almost 
$90 a month by the year 2002. Beneficiaries needing certain hospital 
outpatient services would pay even more than the 50 percent co-
insurance they now pay, and many would lose extended home care 
coverage.
  So not only are we cutting Medicare, but we are also charging our 
senior citizens more. Part B is the health insurance program that 
covers their physician's care. The premiums that they pay for part B 
are doubled over the 7 years of the budget.
  Second, Congress cuts Medicaid long-term care. Medicaid spending 
would be cut by $164 billion over 7 years. Federal standards for 
eligibility, services, payment and quality would be seriously weakened. 
In other words, in order to accomplish this cut in Medicaid, the health 
insurance program for low-income people, Federal standards would either 
be eliminated or relaxed.
  There would no longer be an entitlement to Medicaid. It would be up 
to the States, because the money from the Federal Government, a reduced 
amount of money in real terms, would go in a block grant to the States 
and they would decide who they would cover and how. So a lot of low-
income people, whether they be children, senior citizens, disabled, 
would simply not be covered by Medicaid any longer because the States 
would not have the money to pay for their care. That includes seniors.
  Third, Congress cuts Medicaid acute care. So current Federal 
requirements to pay Medicare deductibles and co-insurance for low-
income Medicare beneficiaries would be ended.
  What that means is that right now if you are a senior citizen, 
instead of paying your premium for your part B Medicare which covers 
your physician's care, right now if you are below a certain income, 
Medicaid pays that premium.

                              {time}  1645

  However, under the Republican bill, Medicaid would no longer be 
required to pay that premium. Again, it would be up to the States, and 
if the States decided they did not want to pay, then Medicare part B 
premium for low-income seniors, they would not have to, 

[[Page H13854]]
and a lot of those seniors would go without having part B and having 
their physicians' bills covered by Medicare or Medicaid.
  Fourth, under human services, the Older Americans Act, Legal 
Services, aging research, training senior volunteers, cuts would mean 
6.2 million fewer meals at senior centers, 5.6 million fewer to 
homebound elders, research on aging issues funded under the Older 
Americans Act. Right now, a lot of the programs that exist and that 
help senior citizens are funded under the Older Americans Act. Those of 
you who have been to a senior center in your community know a lot of 
times meals are provided to seniors at the senior center, nutrition 
programs, or if they are homebound, meals are delivered to them in 
their home. There are other services the Older Americans Act provides 
for senior citizens.
  That takes a huge cut in this budget and can be translated into fewer 
meals and fewer services for the elderly.
  Fifth, during the last decade the number of grandparents raising 
grandchildren climbed 40 percent, and most have household incomes under 
$20,000 per year. Reforms in the welfare system will make it more 
difficult to obtain aid for grandchildren.
  So incorporated in all of this is the fact, and in this budget, is 
the fact that a lot of children who are now raised by their 
grandparents will not get assistance to pay for various activities that 
are important to child care.
  Sixth, food stamps; block grants offer no assurance even minimal 
protections for older people would be retained by States by making 
access to benefits still more difficult. A lot of senior citizens 
depend on food stamps. The cutbacks in that will affect them.
  Seventh, supplemental security income, individual States may slash or 
eliminate SSI supplementary benefits. Again, a lot of senior citizens 
who are disabled and who receive cash benefits pursuant to social 
security disability programs would be cut.
  Eighth, housing assistance, older people make up approximately one-
third of all public housing residents. Operating subsidies and 
modernization funds for public housing would be cut by 3.5 and 33 
percent, respectively, from 1995 levels. When we talk about public 
housing, a lot of people forget a third of the public housing is for 
senior citizens. If you cut back on money available for new 
construction, modernization, they are also impacted and, again, have 
fewer and fewer places to live or more expensive costs to continue to 
rent or to live in subsidized housing.
  And lastly and ninth on this list is low-income home energy 
assistance programs. The Senate recommendation is for a 32-percent cut. 
Nearly 2 million households could lose their energy assistance. A lot 
of senior citizens right now basically have their energy assistance, 
their utility bills, if you will, supplemented through what we call 
this LIHEAP program. That also is cut.
  So our point and the point I am trying to make here is that not only 
with regard to Medicare and Medicaid but also with a lot of other 
programs, the impact on senior citizens in this budget is really great. 
They are disproportionately singled out for cuts that will make it much 
more difficult for them to have health care, for them to have proper 
nutrition, for them to be able to live in decent housing, and that is 
not fair.
  What we are doing is making those cuts in order to provide tax breaks 
primarily for wealthy Americans.
  The other report that came out this week and that I would like to 
briefly mention was a report that was put out by the Consumers Union 
and the National Senior Citizen Law Center. It is entitled ``What the 
Congress Isn't Telling You.'' Families of nursing home residents may 
face financial ruin under Federal Medicaid bills. And basically, what 
the report shows is that, under the Republican budget, an estimated 
395,000 nursing home patients are likely to lose Medicaid payments for 
their care next year. Families of nursing home patients will face 
significant new financial burdens.
  This was actually put out; this is the report here that was put out 
within the last week or so, and again trying to highlight some of the 
people that the report makes, again it talks about the impact of the 
cuts in the Medicaid program which, again, is for low-income people, 
but affects seniors, children, disabled people. Basically, what they 
stress is that the budget transforms the Medicaid Program into a block 
grant called a Medigrant, a cash grant to each State, and there are few 
requirements as to how the money is spent, virtually no guarantees for 
benefits for any individual regardless of how poor or sick the 
individual is. Cuts in the Medicaid Program are $163 billion, and these 
cuts will reduce projected Federal spending on Medicaid by 
approximately 30 percent by the time the seventh year of the 7-year 
program goes into effect.
  What the Republican budget does is it caps the amount of money that 
is spent on Medicaid, and it basically sends a block grant to the 
States with that smaller amount of money than is necessary to keep the 
Medicaid going as a viable program.
  So what we are saying is that because of that reduced level of 
funding and because the States now have to administer Medicaid with 
less funding, millions of current Medicaid recipients and those needing 
services in the future are likely to lose all access to health 
insurance and not have their health care provided for.
  Now, this report basically says that an estimated 395,000 long-term 
patients are likely to lose Medicaid payments for their nursing home 
care if this bill is approved. The combination of drastic cuts and 
projected spending and elimination of important patient and family 
protections will cause State Medicaid programs and private nursing 
homes to adopt policies that will place additional financial pressures 
on families of people needing long-term care.
  Right now, Medicaid pays for the nursing home care for all of these 
low-income people that are on Medicaid. But if this bill passes, not 
only will the same amount of money not be available, but what the 
States will do, because they do not have enough money to pay out to 
nursing homes for these patients' care, is they will simply go after 
the families, the children, the grandchildren, whatever, and the 
assets, if you will, of those nursing home patients in order to make up 
the difference.
  Just to give you an idea of the type of things that will go on, if 
the Medicaid law is changed, basically families of nursing home 
patients may be forced to spend funds previously earmarked for their 
children's education or retirement. Family assets may be sold or even 
seized by Medicaid liens. Adult children, previously protected from 
liability, may now be held responsible for the nursing home bills of 
their patients. Protections against nursing homes that charge more than 
the amount Medicaid pays are weakened by the bill. Right now it is 
difficult for the nursing home to charge you more than what Medicaid 
pays. Families become vulnerable; there is no longer a guarantee of 
Medicaid eligibility for anyone. Liens on property and claims against 
the States are unrestricted under the proposed legislation. Hearings to 
dispute issues, such as who receives coverage, are completely 
eliminated. Financial planning for disabled children is no longer 
protected. States may even narrow coverage to exclude chronic nursing 
home care from their programs, and the limited income protections 
included in the bill for husbands and wives do not provide financial 
security for families.
  What we are basically saying here, and it is very clear, and this is 
what this study demonstrates, that the proposed transformation of 
Medicaid may force American families into financial ruin if a loved one 
needs a nursing home. It is a major change from the current law which 
provides, which basically says Medicaid right now guarantees nursing 
home coverage for those low-income seniors or any senior who runs out 
of money and does not have enough money to pay for their nursing home 
care. I am not sure if a lot of people realize that there are very few 
Americans who, if they become disabled and have to go to a nursing 
home, can afford to pay for that nursing home care for very long. 
Sometimes people can pay privately for a few months or even a couple of 
years, but eventually they run out of assets. That is where Medicaid 
comes in and pays for the care under current law, but would no longer 
be guaranteed under this Republican budget.

  I talked mostly so far about the impact of this budget on health 
care, and 

[[Page H13855]]
I believe that that is the worst impact of this Republican budget, the 
fact that our health care system, in general, will be negatively 
impacted and a lot of people will not receive health care or have 
access to health care and the quality of care will also be reduced.
  But there are other major impacts and other major impacts that 
President Clinton has specifically talked about. He has talked also 
about the need to make sure there is adequate funding for education, 
particularly student loans, and he has also talked about the need to 
prioritize funding for the environment. Because if you look at this 
budget, this Republican budget, as well as some of the appropriation 
bills that have been moving through the House of Representatives, you 
certainly notice that, again, like with senior citizens, the 
environment and the effort to protect the environment has taken too 
much of a cut in this overall budget bill. In other words, the amount 
of money that is taken away from those agencies on a Federal level that 
protect the environment or the money that goes to the States in grants 
and loans to protect the environment is cut back considerably more than 
a lot of other areas. Again, that is not fair, and that is totally 
inconsistent with the priority that most Americans give to 
environmental protection.
  Just to give you an idea of how this budget, not only the budget but 
also some of the appropriation bills that have been moving in this 
House, would impact the environment, again, a report was recently put 
out by the National Wildlife Federation that is entitled ``Funding 
Worth Fighting For: Your Guide to Proposed Reductions for Environmental 
Spending in Congress' Budget and Appropriation Bills.'' Again, this was 
produced and made available within the last couple of weeks or so.
  Essentially, it points out how this budget and how the appropriation 
bills make drastic cuts in environment protection. It is a very 
sinister aspect of this whole budget process because I think that many 
people in the beginning did not realize that the Republican leadership 
was trying to make such drastic changes in environmental protection. 
And so in putting together this report, the National Wildlife 
Federation, I think, did a very good job in explaining how these 
cutbacks affect the quality of our environment in this country.
  Basically, in its introduction, the report says that the 
congressional leadership intends to achieve its aims to weaken, 
dismantle, or dismiss environmental safeguards through the budget 
process. The tactic is to legislate through appropriations, to tear 
away at the enforcement and fabric of environmental laws in the budget 
process without the scrutiny of public debate and the straight votes on 
the merits. Oftentimes these things are put into the bills, and we are 
not necessarily made aware of it. There have not been public hearings. 
There has not been an opportunity to even comment on it, which is one 
of the reasons, I think, this report takes note of these changes.
  The budget and appropriation bills passed to date by Congress contain 
a regressive environmental and natural resource agenda that has no 
precedent in modern American history. If enacted, these measures will 
mark the first time the Nation has legislated a retreat in water and 
air quality, in conserving valuable wetlands, protecting beaches from 
being fouled by contamination and enforcing environmental protections 
for public health.
  In effect, this Republican leadership is proposing lower 
environmental quality of life for the average American as well as huge 
public land and asset giveaways to narrow special interests.
  As documented in this report, the hallmarks of this assault, and they 
basically say four areas where this budget assaults, if you will, the 
environment: One, sharp cuts to the core budgets of the agencies that 
protect the environment; two, elimination, in some cases, of entire 
environmental programs; third, suspension of environmental safeguards; 
and, last, expansive concessions to narrow interest groups.
  Now, I say this in the overall context of knowing, not only because I 
talk to people in my own district but also because of public opinion 
surveys that have been done, that show that Americans are very 
supportive of environmental protection and seek to prioritize funding 
for environmental protection and not have these kinds of cutbacks. I 
think the solid majority of Americans support upholding the 
environmental progress that we have seen in the last 10 or 20 years in 
this country and do not want to see us turn back the clock as is being 
proposed by the Republican leadership in this budget and these 
appropriation bills.
  I just want to summarize, if I could, because again I do not want to 
use all the time allotted to me, but I do want to summarize, if I 
could, some of the major provisions, some of the major changes that the 
National Wildlife Federation in its report points out are occurring or 
will occur if this Republican budget is passed, if these Republican 
appropriation bills are passed.
  Congress' fiscal year budget bill that we have talked about and the 
five appropriation bills discussed in this report contain changes in 
environmental, public lands, wildlife, and natural resources policy 
that would do the following, and let me just list some of these: First, 
it would open the Arctic National Wildlife Refuge to oil and gas 
drilling. Many are not aware that in Alaska the Arctic National 
Wildlife Refuge now is a very pristine area where oil and gas drilling 
is not allowed. This would allow it to occur.

  Second, the budget and appropriations would trigger sale of public 
lands under an industry-sponsored rewrite of the 1872 mining law. 
Essentially, what we are doing is giving away a lot of our public 
lands. It would also end the EPA's enforcement of wetlands law, very 
important in my home State of New Jersey. We have a lot of area that 
needs to be protected, a lot of wetlands that could be the subject of 
development, and right now the EPA provides a certain amount of 
protection for those wetlands.

                              {time}  1700

  That would be eliminated under this budget and under these 
appropriations bills.
  It would also slash national wetlands inventory funding by 48 
percent, reduce wetlands habitat conservation funds by 24 percent, and 
cut endangered species funding. Right now we have a very good 
endangered species protection program. This would cut out a lot of the 
funding for that protection. It would also suspend new listing for 
imperiled species and terminate endangered marine species research.
  It would slash funds for stabilizing world population by 38 percent. 
The United States contributes through international organizations in 
efforts to basically support family planning around the world, in many 
parts of the world. That is also slashed by a third under this budget.
  The Republicans would also reduce the Superfund budget by $400 
million. We have in the United States and at the Federal level now a 
program that seeks to clean up the most seriously polluted hazardous 
waste sites pursuant to what is called the Superfund Program. The 
program has been successful in starting and in many cases actually 
completing the cleanup of many of these hazardous waste sites around 
the country. That budget would be reduced by $400 million under this 
proposal. It also stops new cleanups at hazardous waste sites, so if 
you are not already a Superfund site, the site cannot be added to the 
Superfund list for possible cleanup.
  It increases timber cuts in the Tongass National Forest. It cuts 
funding for drinking water and wastewater treatment. In my own area, I 
represent a good part of the New Jersey shore. We have made great 
progress in cleaning up our water, basically because of grants and 
loans from the Federal Government to upgrade sewage treatment plants. 
These are severely slashed under this budget proposal.
  It also cuts enforcement for strip mining law by 28 percent. It cuts 
funds for international environmental programs by 32 percent. It allows 
agribusiness to avoid $117 million in repayment obligations in 
unbudgeted new Army Corps of Engineers construction projects, and cuts 
global climate change research funds.
  Those of you who have been reading the newspapers in the last few 
weeks have noticed, I am sure, there has been a lot of information that 
has come out about how global climate changes are having negative 
impact on the environment around the world. We have contributed over 
the years to research on 

[[Page H13856]]
an international basis to try to study the problems related to global 
climate change. Again, that is cut significantly by this budget bill 
and by some of the appropriations.
  The list goes on and on. I do not want to continue going through it 
tonight. I think it is important over the next few weeks, as the 
negotiations take place between President Clinton and the Congress over 
where this budget bill is going and how a compromise is going to be 
achieved, that we continued to prioritize environmental protection, 
that we do what is necessary to make sure that Medicare and Medicaid 
are good programs and continue to serve our senior citizens and our low 
income people, because ultimately, I believe that if environmental 
protection is significantly degraded or if our health care system is 
significantly impacted in a way that the quality suffers or a lot more 
people are no longer eligible for health insurance, that ultimately, if 
any of those things happen, it is going to impact every American, and 
it is going to impact the quality of life for every American.
  So I think we need to continue to speak out to say that it is very 
important that money be put back in the budget for those health care 
programs, for environmental protection, and the easiest way to do that 
is to eliminate these tax breaks for wealthy Americans.

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