[Congressional Record Volume 141, Number 193 (Wednesday, December 6, 1995)]
[House]
[Pages H14136-H14137]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


  SEVEN-YEAR BALANCED BUDGET RECONCILIATION ACT OF 1995--VETO MESSAGE 
     FROM THE PRESIDENT OF THE UNITED STATES (H. DOC. NO. 104-141)

  The SPEAKER pro tempore (Mr. Ensign) laid before the House the 
following veto message from the President of the United States:
To the House of Representatives:
  I am returning herewith without my approval H.R. 2491, the budget 
reconciliation bill adopted by the Republican majority, which seeks to 
make extreme cuts and other unacceptable changes in Medicare and 
Medicaid, and to raise taxes on millions of working Americans.
  As I have repeatedly stressed, I want to find common ground with the 
Congress on a balanced budget plan that will best serve the American 
people. But, I have profound differences with the extreme approach that 
the Republican majority has adopted. It would hurt average Americans 
and help special interests.
  My balanced budget plan reflects the values that Americans share--
work and family, opportunity and responsibility. It would protect 
Medicare and retain Medicaid's guarantee of coverage; invest in 
education and training and other priorities; protect public health and 
the environment; and provide for a targeted tax cut to help middle-
income Americans raise their children, save for the future, and pay for 
postsecondary education. To reach balance, my plan would eliminate 
wasteful spending, streamline programs, and end unneeded subsidies; 
take the first, serious steps toward health care reform; and reform 
welfare to reward work.
  By contrast, H.R. 2491 would cut deeply into Medicare, Medicaid, 
student loans, and nutrition programs; hurt the environment; raise 
taxes on millions of working men and women and their families by 
slashing the Earned Income Tax Credit (EITC); and provide a huge tax 
cut whose benefits would flow disproportionately to those who are 
already the most well-off.
  Moreover, this bill creates new fiscal pressures. Revenue losses from 
the tax cuts grow rapidly after 2002, with costs exploding for 
provisions that primarily benefit upper-income taxpayers. Taken 
together, the revenue losses for the 3 years after 2002 for the 
individual retirement account (IRA), capital gains, and estate tax 
provisions exceed the losses for the preceding 6 years.
  Title VIII would cut Medicare by $270 billion over 7 years--by far 
the largest cut in Medicare's 30-year history. While we need to slow 
the rate of growth in Medicare spending, I believe Medicare must keep 
pace with anticipated increases in the costs of medical services and 
the growing number of elderly Americans. This bill would fall woefully 
short and would hurt beneficiaries, over half of whom are women. In 
addition, the bill introduces untested, and highly questionable, 
Medicare ``choices'' that could increase risks and costs for the most 
vulnerable beneficiaries.
  Title VII would cut Federal Medicaid payments to States by $163 
billion over 7 years and convert the program into a block grant, 
eliminating guaranteed coverage to millions of Americans and putting 
States at risk during economic downturns. States would face untenable 
choices: cutting benefits, dropping coverage for millions of 
beneficiaries, or reducing provider payments to a level that would 
undermine quality service to children, people with disabilities, the 
elderly, pregnant women, and others who depend on Medicaid. I am also 
concerned that the bill has inadequate quality and income protections 
for nursing home residents, the developmentally disabled, and their 
families; and that it would eliminate a program that guarantees 
immunizations to many children.
  Title IV would virtually eliminate the Direct Student Loan Program, 
reversing its significant progress and ending the participation of over 
1,300 schools and hundreds of thousands of students. These actions 
would hurt middle- and low-income families, make student loan programs 
less efficient, perpetuate unnecessary red tape, and deny students and 
schools the free-market choice of guaranteed or direct loans.
  Title V would open the Arctic National Wildlife Refuge (ANWR) to oil 
and gas drilling, threatening a unique, pristine ecosystem, in hopes of 
generating $1.3 billion in Federal revenues--a revenue estimate based 
on wishful thinking and outdated analysis. I want to protect this 
biologically rich wilderness permanently. I am also concerned that the 
Congress has chosen to use the reconciliation bill as a catch-all for 

[[Page H 14137]]
various objectionable natural resource and environmental policies. One 
would retain the notorious patenting provision whereby the government 
transfers billions of dollars of publicly owned minerals at little or 
no charge to private interests; another would transfer Federal land for 
a low-level radioactive waste site in California without public 
safeguards.
  While making such devastating cuts in Medicare, Medicaid, and other 
vital programs, this bill would provide huge tax cuts for those who are 
already the most well-off. Over 47 percent of the tax benefits would go 
to families with incomes over $100,000--the top 12 percent. The bill 
would provide unwarranted benefits to corporations and new tax breaks 
for special interests. At the same time, it would raise taxes, on 
average, for the poorest one-fifth of all families.
  The bill would make capital gains cuts retroactive to January 1, 
1995, providing a windfall of $13 billion in about the first 9 months 
of 1995 alone to taxpayers who already have sold their assets. While my 
Administration supports limited reform of the alternative minimum tax 
(AMT), this bill's cuts in the corporate AMT would not adequately 
ensure that profitable corporations pay at least some Federal tax. The 
bill also would encourage businesses to avoid taxes by stockpiling 
foreign earnings in tax havens. And the bill does not include my 
proposal to close a loophole that allows wealthy Americans to avoid 
taxes on the gains they accrue by giving up their U.S. citizenship. 
Instead, it substitutes a provision that would prove ineffective.
  While cutting taxes for the well-off, this bill would cut the EITC 
for almost 13 million working families. It would repeal part of the 
scheduled 1996 increase for taxpayers with two or more children, and 
end the credit for workers who do not live with qualifying children. 
Even after accounting for other tax cuts in this bill, about eight 
million families would face a net tax increase.
  The bill would threaten the retirement benefit of workers and 
increase the exposure of the Pension Benefit Guaranty Corporation by 
making it easy for companies to withdraw tax-favored pension assets for 
nonpension purposes. It also would raise Federal employee retirement 
contributions, unduly burdening Federal workers. Moreover, the bill 
would eliminate the low-income housing tax credit and the community 
development corporation tax credit, which address critical housing 
needs and help rebuild communities. Finally, the bill would repeal the 
tax credit that encourages economic activity in Puerto Rico. We must 
not ignore the real needs of our citizens in Puerto Rico, and any 
legislation must contain effective mechanisms to promote job creation 
in the islands.
  Title XII includes many welfare provisions. I strongly support real 
welfare reform that strengthens families and encourages work and 
responsibility. But the provisions in this bill, when added to the EITC 
cuts, would cut low-income programs too deeply. For welfare reform to 
succeed, savings should result from moving people from welfare to work, 
not from cutting people off and shifting costs to the States. The cost 
of excessive program cuts in human terms--to working families, single 
mothers with small children, abused and neglected children, low-income 
legal immigrants, and disabled children--would be grave. In addition, 
this bill threatens the national nutritional safety net by making 
unwarranted changes in child nutrition programs and the national food 
stamp program.
  The agriculture provisions would eliminate the safety net that farm 
programs provide for U.S. agriculture. Title I would provide windfall 
payments to producers when prices are high, but not protect family farm 
income when prices are low. In addition, it would slash spending for 
agricultural export assistance and reduce the environmental benefits of 
the Conservation Reserve Program.
  For all of these reasons, and for others detailed in the attachment, 
this bill is unacceptable.
  Nevertheless, while I have major differences with the Congress, I 
want to work with Members to find a common path to balance the budget 
in a way that will honor our commitment to senior citizens, help 
working families, provide a better life for our children, and improve 
the standard of living of all Americans.
                                                  William J. Clinton.  
  The White House, December 6, 1995.

                              {time}  1845

  The SPEAKER pro tempore (Mr. Ensign). The objections of the President 
will be spread at large upon the Journal, and the message and the bill 
will be printed as a House document.
  Mr. KOLBE. Mr. Speaker, I ask unanimous consent that the message of 
the President and the bill be referred to the Committee on the Budget.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Arizona?
  There was no objection.

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