[Congressional Record Volume 141, Number 190 (Thursday, November 30, 1995)]
[Senate]
[Pages S17851-S17853]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               THE BUDGET

  Mr. KERREY. Mr. President, before I yield the floor and suggest the 
absence of a quorum, I noted earlier there were a number of Republican 
colleagues that came down and talked about the budget. There were some 
statements made that I feel compelled to respond to. Some came down and 
said the Democrats are not really serious. They do not have a plan. 
There is no attempt here, no willingness here to, in fact, address 
these budgetary difficulties.
  (Mr. GORTON assumed the chair.)
  Mr. KERREY. Mr. President, I respectfully say, just the opposite is 
the case. There is unanimous desire on the part of the Democrats to 
come up with a change in our law so as to get to a point where our 
budget is balanced, but we have a different vision. We have competing 
visions and competing ideas on how to do that.
  I appreciate, for example, the willingness of Republicans to say that 
they want to preserve and protect Medicare. It is a very important 
change. At least I hear it as a change. One of the things that must be 
understood with Medicare as a fundamental principle is that we said in 
1965, when people hit the age of 65, they are going to have difficulty 
purchasing health insurance, so we are going to create a change in the 
Federal law under the Social Security Act to provide a mechanism for 
Americans over the age of 65 to get insured.
  The question is, has it worked? Ask your Representative or Senator, 
``Has this worked?'' Is that an example of something that has 
accomplished the job? In 1965, 43 percent of people over 65 were 
uninsured. Today, it is less than 1 percent. The answer is 
unquestionably yes. Mr. President, 100 percent of the people over the 
age of 65 are today insured. It has worked surprisingly well.
  However, there is a problem, and the problem is, first, we allowed 
customary and usual reimbursement, so we had no cost controls to begin 
with and the costs have blown completely off the chart. We came back in 
the eighties and implemented a system called perspective payment system 
and started to reimburse according to diagnostic groups and, 
unfortunately, that tended to shift costs over into the physician 
services and costs continued to escalate.
  Today, they are growing, I guess, 10, 11, or 12 percent, somewhere in 
that area. We are facing a tremendous increase in costs. I completely 
agree with the Republicans who say that we have to control those costs. 
We do not need to cut Medicare, but we have to slow the growth of the 
program. There is no question that that needs to be done.
  However, the point of departure that I have, and I have made it a 
number of times--I feel like I am running a broken record here in 
saying it--there is a short-term problem and a long-term problem with 
Medicare, and it is the long-term problem that is enormous.
  The long-term problem with Medicare begins about the year 2008 when, 
as I indicated earlier, the largest population group, the largest 
generation in the history of this country, the baby 

[[Page S17852]]
boomers, begin to retire. We cannot meet the promises with the current 
rate of taxes. We do not even come close. We are either going to have a 
tremendous tax increase out there or a very quick cut, not in the 
growth of the program, we are going to have real cuts in the program 
itself. So we have to slow the growth, not just in the short term, we 
have to slow the growth in the long term for Medicare.

  I hope as we move through these deliberations, the Democrats, in 
addition to coming to the floor and saying we want to protect Medicare 
and preserve Medicare and we want to make sure the cuts there and in 
Medicaid do not fall in a disproportionate or unnecessarily harsh 
fashion, I hope we also come to the floor and say, as I have done now 
two or three times, I think we should drop the tax cut.
  I am for reforming our Tax Code so as to promote economic growth, but 
one of the odd anomalies in this whole debate is that a $245 billion 
tax cut, according to CBO, actually decreases growth. It does not 
increase growth, it decreases. I am for having a debate about how do 
you relieve, in a fair fashion, particularly not just on working 
Americans, but families from some of the penalties that they currently 
face.
  But if we drop the tax cut--I ask unanimous consent for 2 minutes.
  Mr. ASHCROFT. Mr. President, I want to propound a unanimous-consent 
request.
  Mr. KERREY. I will be pleased to yield.
  Mr. ASHCROFT. Mr. President, I ask unanimous consent that the period 
of morning business be extended, with Senators permitted to speak for 
up to 10 minutes each.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. Mr. President, again, I will not go on this little 
diatribe about entitlements, but I will summarize what I was saying 
earlier.
  I hope we do not get a continuation of visitations to the floor 
asserting that Democrats do not want to balance the budget or we do not 
have a plan or, conversely, that Republicans are all heartless and do 
not care about the poor and have no desire--it may score relatively 
well, but it will not enable us to solve this problem.
  The problem, to be clear, is, not only is the budget out of balance, 
but the growth of entitlements are continuing at an unsustainable pace, 
not only eroding our ability to pay for appropriations but also, Mr. 
President, eroding our long-term ability to be able to do anything.
  We will, by the year 2012, convert the entire Federal Government into 
an ATM machine if we continue. That is all we are going to be doing, is 
transferring money: collect it and transfer it. Everything else is 
going to be shut down.
  To solve that problem, if you really want to create a revolutionary 
change, indeed, if you want to vote for something that is tough as heck 
this year, but every year afterward is going to get easy, as opposed to 
this budget--this budget is relatively easy to vote for because the 
cuts occur later--next year's vote is going to be tougher and the year 
after that is going to be tougher. It gets tougher every single year, 
because we are squeezing these appropriations accounts, and we have not 
tackled the entitlements as we ought to.

  I will give you some things you have to do. Can we get it out of the 
farm program, cut defense? The answer is no, there is not much room in 
those things. Here is something you have to be willing to vote for: You 
have to be willing to vote to reduce the CPI, I would say at least by 
half a point. I would vote for a full point. The full point pushes the 
insolvency rate of Social Security back 30 years. That is the kind of 
revolutionary change which produces change not only in the short term, 
that enables us to put more money back into Medicare, Medicaid, and 
education, if that is what you want to do, which I think would be a 
reasonable thing, but in the long term the impact is tremendous.
  Second, we ought to think about an affluence test not just on part B, 
not just on COLA's, but on the whole shebang. If you have a contract 
with a retiree where they paid in, that is fine; do not break a 
contract we have in place. But if it is merely a transfer of payment 
being made because we presume somebody needs it, when their income goes 
up, they do not need it; when their income goes back down, let them 
have it again. Do not take it away from them, but adjust it according 
to income. It produces tremendous savings, both in the short term and 
in the long term.
  Lastly, if you want to produce some real change out there in the 
future that will enable us to look at beneficiaries under the age of 40 
and say there is going to be a Medicare Program for you and a Social 
Security Program for you, let us adjust the eligibility age both for 
Medicare and Social Security to 70. That is what the entitlement 
commission recommended. The Kerrey-Simpson proposal on Social Security 
does that.
  I say to all those who are listening, what will typically happen is I 
make a statement like that and somebody will interview a 70 year old: 
What do you think of that proposal to have the eligibility age changed?
  That is a terrible idea. It would hurt me.
  It does not affect anybody over the age of 50. We can phase it in. 
But the longer we wait, the quicker the change has to occur. The longer 
you wait, the more painful the decision is. Those are the kinds of 
things the Democrats need to come down and say to Republicans, as we 
look for a way not only to balance the budget but balance the growth of 
entitlements and enable us to have a Federal Government that can, when 
we agree what it ought to do--this whole thing started with me in a 
discussion of the Safe Drinking Water Act. Senator Bond, chairman of 
the committee, pointed out accurately that we are authorizing more than 
we have. We have a certain amount of infrastructure just for safe 
drinking water over the next several years, and we are going to 
struggle to come up with the money, as a consequence of being unwilling 
or unable, whatever, to vote a change in the law that will produce the 
changes in the outlays on those mandatory programs.
  That is a tough vote. But if you had a bipartisan vote on something 
like that, I think we can take a lot of political rhetoric out of it 
and it would still be tough. But every year after that it gets easier. 
Whereas, whether it is the Republican proposal, by the way, or the 
Democratic alternative, either one, the easiest vote is this year. Next 
year is tougher, and it gets tougher and tougher and tougher. And these 
mandatory programs continue to grow.
  So I hope that as we come to the floor and talk about our own ideas 
for solving this problem, we do not say that one party is insincere, or 
the other party is heartless; I hope we will actually come to the floor 
and suggest things that might not only balance the budget in 7 years, 
but put us on a track where we are able to say to every single 
beneficiary that there is going to be something there for you, and we 
are able to say to our people that once Republicans and Democrats have 
decided what we ought to be doing in research, education, space, 
defense, or law enforcement--once we have decided what it is we ought 
to do--and the disagreements are typically a lot more at the margin 
than meets the eye--once we have made a decision, I hope we have the 
money to do it.
  I would like to see that happen. I do not have a lot of optimism 
given the current lay of the land. But I would like to see sooner, 
rather than later, us making those kinds of changes because it is 
inevitable to me.
  I challenge any staff that happens to be listening--I assume Members 
would not listen to all this stuff--to try to figure out what I am 
talking about. Take the number $445 billion and then go to the 13 
appropriations accounts and add up what we are currently spending, 
because $445 billion is what we are allocating in 2002 under the 
Democratic budget and under the Republican budget. You cannot do it. 
Take $260 billion out for defense--and very often people say, ``I know 
how to save the money, we will cut defense.'' Well, you cannot cut it 
enough. You cannot cut waste, fraud, and abuse enough to be able to get 
it done. You can take our salaries to zero and it would not impact the 
sort of choices we are going to have to make. Constructive budget, 
defense and 

[[Page S17853]]
nondefense, was $445 billion. Then you begin to see the dilemma if we 
do not vote for the changes in our mandatory programs that will enable 
us to have the Federal Government do those things that I believe the 
American people want us to do.
  I yield the floor.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER (Mr. Ashcroft). The Senator from Washington is 
recognized.

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