[Congressional Record Volume 141, Number 199 (Thursday, December 14, 1995)]
[House]
[Pages H14918-H14925]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               THE BUDGET

  The SPEAKER pro tempore. 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 want to start off by following up on what 
the previous speaker said about tomorrow. As many of us know, tomorrow 
is the day when the continuing resolution expires. This was the 
agreement that both Democrats and Republicans, both Congress and the 
President, agreed a few weeks ago that they would extend operations, 
Government operations and not shut down the Government while we 
continued to try to work toward a budget agreement.
  It is unfortunate that tomorrow is about to arrive and we still have 
not worked out that budget agreement. But I think the most important 
thing is that the Government not shut down again and that tomorrow, 
even if a budget agreement is not going to be reached, which I do not 
think is likely at this point, that we pass another continuing 
resolution so that the Government continue to operate.
  I was very upset this morning when I read that, although President 
Clinton had offered a continuing resolution to continue the operations 
of the Government for at least another week or possibly beyond, and 
although the Republican leadership in the Senate had agreed to a 
similar continuation, that Speaker Gingrich and the Republican 
leadership in this House had not. I would hate to see, once again, that 
after tomorrow the Government shuts down.
  I would urge the Speaker Gingrich and the Republican leadership in 
this House, along with what the Senate has decided and what President 
Clinton has decided, which is that we should put our differences aside 
and not use the Government shutdown as leverage toward trying to 
pressure one group or the other into its own ideology. My view is that 
the Government should continue to operate while the President and the 
Congress, while the Democrats and the Republicans try to find common 
ground on the budget.
  Let me also add that as the previous speaker said, there really is no 
disagreement anymore that we should achieve a balanced budget or even 
on the timetable of approximately 7 years. But there are still major 
disagreements over the priorities. I would suggest that part of that 
agreement a few weeks ago on the continuing resolution to keep the 
Government open specifically said that the priorities would include 
Medicare, Medicaid, the environment and education and that these 
programs, particularly Medicare and Medicaid, would continue to be 
viable and cover the people who are now eligible for them in a manner 
which ensures quality health care for Medicare and Medicaid recipients.
  The President put forth a 7-year balanced budget within the last week 
or so that made sure that Medicare and Medicaid, the environment and 
education were properly provided for and guaranteed that those programs 
would continue to cover everyone and that quality health care would be 
ensured for seniors and low-income individuals under the two Federal 
health care programs. But the Republican leadership has not come back 
with a similar proposal. So far they have not put forward any 
compromise plan that would not only achieve a balanced budget in 7 
years but also put sufficient funds in the Medicare and Medicaid 
programs and provide a guarantee that those people who are now eligible 
for Medicare and Medicaid would continue to be provided for.
  I want to stress today in the time that I have allotted to me the 
problems that would occur, particularly with regard to the Medicaid 
program, if the budget that was passed by the Republicans in this House 
and in the Senate and the one that was vetoed by the President were to 
take effect. We now know that this budget is not going to take effect 
because the President has vetoed it. When he vetoed it in his message 
he specifically said that Medicaid was a major reason for the veto and 
that the major problem he had with the Republican Medicaid proposal 
under this budget was that it failed to guarantee health care coverage 
for those people who are now covered by Medicaid. When we talk about 
Medicaid, we are talking about health insurance for low-income people 
in this country. Most of those are either senior citizens or children 
or the disabled or, in some cases also, pregnant women.
  Right now under Federal law people below a certain income who are not 
covered by any other health insurance are eligible for Medicaid. The 
Federal Government guarantees them that as an entitlement, as we say. 
And they are also provided with certain standard coverage. In other 
words, not only are they guaranteed health insurance but they are given 
certain things as part of an overall health care package which is 
similar to what most Americans get, although in many cases maybe not 
quite the same quality or the same extensive coverage. It is a pretty 
good health care package.

  The problem that the President has with the Republican budget and the 
problem that I and most of the Democrats have is that this Medicaid 
program under the Republican proposal would basically be turned over to 
the States. The money would be block granted. It would be up to the 
States to decide who would be eligible and what they would be eligible 
for. So for the first time in probably 30 years since Medicaid was 
enacted here in this House, for the first time you would no longer have 
an entitlement or a guarantee that the people who now receive Medicaid 
could continue to have the coverage.
  If we block grant the money and the amount of money which is 
allocated is significantly less, which it is under the Republican 
proposal, it is a cut of about $163 billion. Then we are not only not 
guaranteeing coverage for a lot of the people who now have Medicaid 
coverage, but we are also making sure that because less money is going 
to the States in real terms, that the States will have to cut back on 
who is eligible or perhaps cut back on the kind of benefits that are 
provided to those who they plan to cover under Medicaid.
  This is a major problem. It is a major problem because what it 
ultimately would lead to is that the ranks of the uninsured in this 
country would grow. Right now we estimate that there are about 35 to 40 
million Americans who have no health insurance, many of them working. 
If we are now going to increase the ranks of those people and add 5 or 
10 million more people to the 

[[Page H14919]]
ranks of the uninsured, that puts a tremendous burden on our health 
care system that either people do not get care or someone else has to 
pay for it.

                              {time}  1630

  You pay for it yourself either because your Blue Cross or your health 
insurance rates will go up to cover these other people's care or they 
do not get any care at all.
  One of the problems that--these are just some of the general 
problems, I should say, that exist with the Republican Medicaid 
proposal, but I wanted to get into a few more specific ones, some of 
which have been cited by the President, that have an impact not only on 
low-income Americans, but also on many other Americans. One of the 
things that needs to be pointed out is that right now the majority of 
the people who receive nursing home care in this country have that 
nursing home coverage paid for by Medicaid. In fact we estimate that 68 
percent of all nursing home residents rely on Medicaid to pay bills 
that average $38,000 a year.
  Now just as there is no guarantee that children, or disabled people, 
or people who are in the community would be covered by Medicaid under 
the Republican proposal, there is a guarantee that nursing home 
coverage would be provided or that the people who now receive Medicaid 
to cover their nursing home bills will continue to have the Federal 
Government pay for their nursing home care. In fact, based on the level 
of cuts that is provided under this Republican budget, we estimate that 
about 330,000 people could be denied nursing home coverage at the end 
of the 7-year period that the budget covers, in other words, the year 
2002. And then the question becomes who is going to pay, where are 
those people going to get the money if the Federal Government under 
Medicaid does not pay for it?

  Well, one of the things that is built into this Republican proposal 
is basically an effort or the ability for the first time for the 
Government, be it the State or whatever level of government, to go 
after the spouses or the children of nursing home recipients, those who 
would be eligible for nursing home care, and to seek the spouses' 
assets or the children's assets in order to pay for the care that is 
not covered by the Federal Government. What happens is that the right 
of individuals essentially right now under the current law, certainly 
assets of the spouse or the children are simply not eligible as assets 
for the Government to take, but that is essentially repealed or changed 
significantly under this Republican budget so that what we will see is 
a lot of people, a lot of spouses and children, having to contribute 
perhaps in a major way in order to pay for their parents' or their 
spouse's nursing home coverage.
  The other thing that is kind of insidious, I would say, in this whole 
proposal is that right now, under current law, Medicaid is a matching 
fund. Fifty percent is paid by the Federal Government, and 50 percent 
is paid by the State government. So, if the Federal Government puts up 
50 cents, or say the Federal Government puts up a dollar, the State has 
to match it, and $2 are then available, so to speak, for Medicaid 
recipients. But the funding formula was changed in the Republican 
budget so that essentially no State would have to spend more than 40 
cents to qualify for 60 cents in Federal money. What that means is that 
some States may decide because of a budget crunch that rather than put 
up the full dollar to match the Federal dollar they will only put up 40 
cents and get 60 cents in Federal dollars, which means that half as 
much money is then available, or significantly less money is then 
available, for the Medicaid Program. This simply contributes again to 
the whole question of how much money is going to be available for 
Medicaid under the Republican proposal and how much the States are 
going to seek to cut back, either by denying eligibility to certain 
individuals or cutting back on the coverage that is available for the 
individuals who are now eligible for Medicaid.
  I want to, if I could, get into some of the other problems that have 
been raised with regard to Medicaid in this budget, but before I do 
that, I think maybe the best thing, because someone always says to you, 
well, what is your answer; my answer is very simple. If you look at the 
level of Medicaid cuts and Medicare cuts in this Republican budget 
bill, basically what it is being used for is to finance tax breaks 
primarily for wealthy Americans. There are about $243 billion in tax 
breaks primarily for wealthy Americans that are included in this 
budget. If you were to eliminate those tax breaks, money could go back 
into Medicaid as well as into Medicare, and we would continue to have 
viable programs, we would not have to block grant, we would not have to 
change the current guarantee of eligibility. So that is the real answer 
in my opinion in this whole budget deal and what needs to be done as 
part of the whole budget negotiations.
  Mr. Speaker, I yield to the gentleman from Ohio [Mr. Brown].
  Mr. BROWN of Ohio. Mr. Speaker, I am troubled by the Gingrich budget, 
makes $270 billion cuts in Medicare, as you have pointed out, makes 
about $180 billion in cuts in Medicaid. Much of that, much of those 
cuts, will be money taken from senior citizens that may live on 10, or 
12, or $15,000 a year. Much of the Medicaid cuts come from people who 
have spent down the money that they might have and have a husband or a 
wife in a nursing home, and, as you point out, might lose their home 
that they have paid for over 35 or 40 years of marriage.
  But all of this to pay for this tax break for the wealthiest people 
in the country, a tax break eliminating a tax on corporations that 
required some minimum payment dealing with some overseas tax issues 
that will ultimately hurt, cost American jobs, and it is, as you said, 
it is a tax break mostly for the richest people in the country, and 
then I hear our friends, some of the Gingrich freshmen, as they are 
termed around here, that are on the floor a moment ago talking about 
how the Democrats always engage in class warfare.
  Well, the fact is when you increase taxes on people making $15,000 a 
year, and then you cut taxes on people making 10 times that, $15,000 a 
year, that is the most insidious kind of class warfare. You take money 
from the working poor people that are working at Wal-Mart, or working 
at Kmart, or working at a minimum-wage job, and maybe her husband or 
wife are working in similar kinds of jobs, and their taxes are 
increased when they are playing by the rules. They may not even have 
health insurance with their full-time jobs, and they have a tax 
increase at the same time somebody making 2, or 3, or $400,000 a year 
gets a tax break that amounts to in many cases $20,000.
  At the same time they cut Medicare, they cut Medicaid, much of which 
goes to not just elderly people in nursing homes, but goes to disabled 
kids and other people that have some sort of disability that they have 
very expensive medical care, and that is, as I said, the most insidious 
kind of class warfare where people playing by the rules and working 
hard have their taxes go up. They may not make much, they have their 
taxes go up, and people that are getting much, much more get a whole 
lot more tax breaks, and I do not think that is the values that this 
country represents, to penalize those people who are struggling, and 
playing by the rules, and barely making it without health care, trying 
to raise their kids, not be on welfare, working hard. Their taxes go 
up, and this whole Gingrich budget is taking money from the middle 
class and the poor and transferring that money to the richest people, 
people that do not even live in my district--I have a lot of wealthy 
people in my district.

  They are not coming to me saying, ``Hey, give us a tax break for the 
wealthiest of us.'' They are saying, ``Get this budget balanced, and 
don't hurt Medicare and Medicaid doing it,'' and that is what troubles 
me the most about this Gingrich budget is that it is waging class 
warfare on the most vulnerable people and people that are working hard, 
and trying to pay their bills, and trying to buy a house, and trying to 
save a little money for their kids' college, and then giving money, 
taking that money from the working poor in many cases and people of the 
middle class and transferring that money to the richest people. It 
simply does not make sense.
  Mr. PALLONE. I appreciate the gentleman from Ohio [Mr. Brown] for 
coming here today and expressing what he just said, and I would just 
like to follow up on two points, and maybe you 

[[Page H14920]]
could, you know, respond to what I am saying.
  There are many points that you made, but the two that stick in my 
mind right off the bat: First of all, you are pointing out that not 
only are a lot of these tax breaks going to wealthy Americans; we know 
that the lion's share does, but that actually for many Americans who 
are working that are lower income, they are actually having to pay a 
tax increase because this Republican Gingrich budget actually repeals 
the earned income tax credit. So maybe we should get into that a little 
bit and explains how that works.
  The way I understand, and you correct me, is that right now people 
who are below $25,000 to $30,000, whatever, who are working, they are 
able to get a tax credit which can be something like $1,500 a year, 
whatever, depending on their income, and that what the Republican 
budget has done is to either eliminate that for some or cut back 
significantly so that if you are making under $30,000 now, you may 
actually be paying more taxes under this budget proposal.
  Mr. BROWN of Ohio. If the gentleman would yield, that is exactly 
right. If you are making $15,000 or $20,000 or $25,000 a year under the 
Gingrich plan your taxes will go up on the average of about $25 or $30 
a month. Similarly, if you are now a Medicare beneficiary, your premium 
in this Gingrich budget plan will go up about $40 to $50 a month.
  Now to a Member of Congress, whether it is Newt Gingrich or any of us 
as Members of Congress, $25 or $50 a month probably does not matter 
much, and that is unfortunately the way, I think, that the people that 
voted for this bill think about it, that it is only $25 a month or $50 
a month. It is $25 a month for that family making $20,000 a year; it is 
only $50 a month for that senior citizen that brings in $10,000 or 
$12,000 a year. But the fact is, that is a lot of money if you are in 
that income bracket. Twenty-five dollars a month for some family making 
$20,000 a year means new shoes for their kids in September when they go 
to school, it might--it means maybe once in a while taking their kids 
to a ball game, it means a lot to a family like that.

  Fifty dollars a month for a Medicare beneficiary means medicine, or 
means paying for a rent increase, or means paying if it is a 
particularly cold winter and paying those heating bills, and that is 
what the Gingrich plan, the people for that plan, do not think about, 
is that $25 increase, $25-a-month tax increase for somebody making 
$15,000 a year, is pretty hard on them. That $50 premium increase, that 
monthly $50 premium increase for a Medicare beneficiary, that hits them 
pretty hard when they are seeing the cost of prescription drugs go up 
and they are seeing their own heating bills go up or whatever--whatever 
difficulties they are facing.
  That is why this is wrong in order to give that big tax break to the 
richest people in this country. That is wrong.
  Mr. PALLONE. The other thing is that one of the major concerns that 
we have had in this Congress, in the previous Congress, on a bipartisan 
basis is the need for welfare reform, to get people off of welfare and 
to have them work, and if you cut back on this earned income tax 
credit, which basically is affecting many people who maybe just got off 
welfare and have been encouraged to work, they will find, if they are 
not making that much money, that maybe it is more beneficial for them 
to stay on welfare.
  Also, and you were in the State legislature so you know, as I was, 
that oftentimes what happens is if--the State legislature have made the 
effort over the last 10 years to try to expand Medicaid coverage to 
cover working people, even though Medicaid is for low-income people, 
oftentimes it covers people who work. And we have expanded Medicaid 
coverage to people that are working who may be making a little more 
than people on welfare to encourage them to work because now they have 
Medicaid benefits. Well, if those are likely to be the first ones that 
are back because they are a little higher income than the people on 
welfare, so that if you deny them their Medicaid benefits, and you deny 
them their earned income tax credit, they will have less incentive to 
work, and we actually end up reversing what we are trying to 
accomplish. More people go back to welfare, and less people work, so it 
makes no sense.

  I would like to yield--joined by the gentleman from Massachusetts 
[Mr. Olver].
  Mr. OLVER. I thank the gentleman for yielding, and I very much 
appreciate that you have provided us with this time to talk about some 
of these issues, and since we are talking about the earned income tax 
credit and its effect upon people with moderate income, I wonder how 
many people really understand how extensive this is. There are 
something like 12 million people who end up losing that earned income 
tax credit. Remember earned income tax credit means that, if you have 
been working and you are paying taxes out of your paycheck, that you 
were eligible, if your income was very low--if even with working, one 
or both persons in the family working, your income was still under the 
$25,000 or so level, you were eligible for some money back, and it is 
12 million American families that are in that category.
  Now from my State, which is a little smaller than each of yours--in 
fact, a little smaller than all of us standing here--from my State it 
is, oh, about 400,000 or so families in the State. My guess is that for 
the gentleman from Ohio it must be close to a million families in--
well, it would not be quite that many.
  Mr. BROWN of Ohio. About 500,000 in Ohio.
  Mr. OLVER. And that--those 12 million families lose $30 billion total 
in loss of that credit that means increased taxes. Is it not ironic 
that in this process of giving tax reductions and selling the whole 
thing as if it is a great thing for middle-class Americans, that people 
who are of low income, but working, are going to actually see their 
taxes increased?

                              {time}  1645

  There will be $30 billion of increase of taxes, and that 12 million 
American families is going to get translated into giving $125 billion 
of tax reduction to only about 2 million families who already start 
with more than $100,000 of income per year. Those families at the very 
upper end of the scale are going to get a huge amount of money from 
this process, but the $30 billion that is taken away from families who 
have less than $25,000 a year to live on, those are the people who are 
going to pay right through the nose for the process of giving the tax 
breaks to families who really do not need them, who are already doing 
pretty well, who have made their way very well with the American dream. 
There is nothing wrong with the American dream, that is a great idea. 
But they are not the ones who need it in these very tight times.
  Mr. STUPAK. If the gentleman will yield, in northern Michigan where I 
am from, it is about 35,000 families who will lose that earned income 
tax credit. I had a young mother who had three children. She was 
divorced. Even though her husband was paying child support, she said 
what the earned income tax credit meant to her. She said, ``When I 
would receive my earned income tax credit, it allowed me to get caught 
up on my bills. If I got a little behind in the last year, or if the 
car needed a new set of tires, I had money for a new set of tires for 
the car,'' so she could go back and forth to work, to support her 
family. It kept them a degree of respect and dignity and off public 
assistance.
  So this earned income tax credit, which is being eliminated just so 
we can give a tax break to the wealthiest 1 percent in this country and 
the large corporations who no longer will have to pay the alternative 
minimum corporate tax, is really in this time of a Christmas season, 
really, if I can say the word ``heartless.'' I mean the folks who need 
the help the most, to give them a little respect, a little dignity, a 
little pride, to help them keep off of public assistance, to help them 
to make it on their own, the whole philosophy here is being rejected 
while we are giving the corporations a tax break. I really have a 
great, great problem with that aspect of this Gingrich contract on 
America plan.
  You were talking about Medicaid. Besides the earned income tax 
credit, Medicaid, if I may quote from the Michigan Health and Hospital 
Association which says, ``We fear that the 

[[Page H14921]]
Medicaid block grant program, health services for the most vulnerable 
populations, the elderly living in nursing homes, the poor, the 
children, may be jeopardized as hospitals who continue to bear a 
disproportionate share of the burden of caring for these individuals, 
face reduced payments.''
  What that means to me, if I can read between the lines here, not only 
the financial impact on these families that need the assistance, but in 
my district, northern Michigan, my biggest town is maybe 17,000 people. 
I have many, many, small hospitals. They have, as the letter says from 
the Michigan Hospital Association, they bear a disproportionate share 
of the burden for caring for these people. But under these block grant 
proposals, the Medicaid, the hospitals in the rural areas, which are 
usually my largest employers, will be faced with tremendous cuts, which 
means lost revenue and cuts in staff.
  Here is the mother who finally got through school, thanks to the 
earned income tax credit and a couple of other things, who is not 
working, and probably has the lowest seniority; she will probably be 
the first one to be laid off when all these cuts go through. The 
rippling effect here of not only the Medicare and Medicaid cuts, and 
they are cuts, make no mistake about it, it is going to be devastating 
on small rural communities as well as our urban areas.
  Mr. PALLONE. Mr. Speaker, I think one of the things the gentleman is 
pointing out and that the gentleman from Ohio stressed is that, if 
anything, our support for the Medicaid Program and our concern about 
the low-income people who are impacted by the Medicaid Program is not 
an issue of class warfare, but just the opposite.
  What you are pointing out is that everyone suffers because of these 
Medicaid, becauses Medicaid cuts, and when you eliminate the Federal 
guarantee of Medicaid, because what happens if more people pursuant to 
these Republican proposals go on welfare, the cost to the government at 
every level grows, and you are not going to even be able to balance the 
budget if you start to get more and more people on the welfare roles.
  Similarly, so many hospitals, not only in rural and urban areas but 
even in suburban areas, and most of my district is suburban, every one 
of the hospitals that I have is heavily Medicaid-Medicare dependent, 
and if they have to cut back, they lay people off, some of them close, 
and it impacts everyone. They cut back on services and quality of care 
and everyone's health care suffers.
  I see the gentlewoman from Connecticut [Ms. DeLauro] is here, who has 
done so much to raise the attention of the Congress to these issues. I 
yield to her.
  Ms. DeLAURO. Mr. Speaker, I thank the gentleman very much, and I want 
to thank all of my colleagues. It is a pleasure to join with them this 
afternoon, and I particularly thank the gentleman from New Jersey [Mr. 
Pallone] for his invitation to participate and for his being here, 
tirelessly, just about every single evening.
  Mr. Speaker, I would like to talk about the Medicaid issue from the 
same perspective, but maybe a slightly different one. First of all, I 
think sometimes people misunderstand what Medicaid is all about, and 
they have an impression that it truly in fact does not affect their 
lives, that this is a program, if you will, for poor people or people 
who are out there that they have nothing to do with, and it does not in 
some way affect their own lives. The fact of the matter is that two-
thirds of the expenditures of the Medicaid program are for people who 
are in nursing homes.

  Let me give an example of the people in Connecticut. Sixty percent to 
seventy percent of seniors who are in nursing homes in the State of 
Connecticut today have their health care paid for either partially or 
in whole by the Medicaid Program, so that millions of families, 
intergenerationally, really are dependent upon Medicaid to provide 
essential, essential health care.
  What the Gingrich plan does is, it is a raid on Medicare, and 
essentially this raid is an unconscionable assault on the values of 
middle-class Americans.
  I would like to mention a couple of things about what is intended, as 
well as the cutback. The Congress voted last month to turn Medicaid 
into a block grant program, to slash the program by $163 billion. That 
is over the next 7 years. Particularly startling about the block grant 
approach and the one other one-third cut in the Medicaid program is the 
repeal of the family protections which have to do, quite honestly, with 
all of us, if we have senior loved ones, parents, or relatives who may 
potentially have to go to a nursing home. The family protections will 
be repealed if this bill sees the light of day, if it becomes law.
  Mr. Speaker, I want to mention a couple of points here. I will, by 
the way, say that the President vetoed the budget due to its extreme 
agenda as it has to do with Medicaid.
  There is a report that all of us had a chance to look at, by the 
Consumer Union. These are the folks who put together the Consumer 
Reports, when you go out to look to buy a car or a computer, and you 
know whether you are buying something good or you are buying a lemon, 
or you are going to get a bum deal. You make your decision. People look 
at these Consumer Reports.
  This is the group, the Consumer Union, that issues those reports and 
that issued the report on this proposal by the gentleman from Georgia 
[Mr. Gingrich] and the budget. They talked about this potential 
nightmare that is going to be placed on working families with parents 
who need nursing home care. They have estimated that there will be 
395,000 long-term care patients that are likely to lose their Medicaid 
payment for their care next year if this bill is approved. That is an 
unbelievable and staggering number of people who, one, will not have 
the care, but whose families, working families today in our country, 
are going to pick up the slack somewhere.
  You are not going to see your mother, your father, a dear aunt or 
uncle or so forth, be out in the street. What is more, what is of equal 
concern, is that with the repeal of these family protections you are 
going to see that adult children--you can put a lien on the home of an 
adult child if you do not meet the State median in terms of income.
  If you fall below your State median in income, and in the State of 
Connecticut it is $41,000, and if you make more than $41,000--and in 
many middle class homes today with two working parents you see above 
that number, and it may be slightly above that number--you then are now 
liable to pick up costs for your parent or your loved one's nursing 
home care. They can come in and put a lien on your house. If you are in 
rural America or in farm country, they can put a lien on your farm to 
help to pay the cost of nursing home care. This is written in the fine 
print in this Medicaid law, which many people do not know about.
  In addition to that, there is no longer a requirement, there are no 
more Federal regulations on nursing home standards; every State can do 
what they want. No one wants to believe that States are going to be 
evil, bad, or that State legislatures are bad people, but the fact of 
the matter is that is you have a money crunch in your State and it is 
going to cost more to make sure of those nursing home standards, and 
those are the ones where they could retrain your father or your mother, 
they could use mind-altering drugs, that was all changed--I might add 
that was under Ronald Reagan--that all changed. Now they do not have to 
comply with any Federal nursing home standards, so it really is a 
monetarily devastating effect, a quality of care. It has to do with the 
individual who is in a nursing home and who gets that care paid for by 
Medicaid, but it falls on the backs of the families of folks who are in 
nursing homes, and that is what will happen if this law on Medicaid 
passes in the next several weeks here.
  Mr. STUPAK. Mr. Speaker, if the gentleman from New Jersey [Mr. 
Pallone] will continue to yield, the gentlewoman mentioned some of 
these things found in the fine print. Actually, in the Committee on 
Commerce, on which I and the gentleman from New Jersey [Mr. Pallone] 
sit, the Democrats offered 10 amendments. If you wanted to block grant, 
OK, fine, but there are 10 areas we want to protect.
  Nursing home standards is one of them. We feel there is a need for 
nursing home standards across this country. Public children's 
hospitals. They 

[[Page H14922]]
provide money under Medicaid. Why can they not continue to have some 
funding? That was defeated. The cost-sharing for the poor seniors, to 
pick up part of their premium for part B, for Medicare, we wanted to 
keep that for poor seniors. That comes out of Medicaid.
  Ms. DeLAURO. It is gone.
  Mr. STUPAK. That was defeated. Pregnant women and infants who need 
some medical help, pregnant women, and infants, that amendment was 
defeated. Rural health clinics, I mentioned my rural district. In many 
areas the only access to health care is through Federal rural health 
clinics, so you can have access to it. That was defeated.
  You mentioned estate protection, the family farm liens; two separate 
amendments, both defeated. Alzheimer's disease. If you have a loved 
one, a parent or grandparents who have Alzheimer's disease, we always 
provided for their care in nursing homes under the Medicaid Program. 
That was defeated.
  Transitional benefits to move from welfare to work, to help you out, 
give you a little bit of health insurance coverage while you move off 
public assistance into the work force, that was defeated. Women with 
breast cancer who receive help under the Medicaid Program, at least 
allow them to have some help in coverage to pay their medical bills, 
and that was defeated.
  We tried in the Committee on Rules to make these amendments in order, 
but they were all defeated, not even an opportunity. What did we do? We 
did a motion to recommit, so the Democrat Party has been here, standing 
for just 10 basic elements to give you some dignity if you get ill, to 
provide for care for your parents or grandparents if they need a 
nursing home, and to leave you with a little something left in the 
estate. It was all defeated.
  Ms. DeLAURO. Mr. Speaker, I will make one more comment, because I 
know there are a number of colleagues on the floor who want to engage 
in this conversation.
  If you could make the case that some of this cut were going, in fact, 
to balancing the budget or bringing down the deficit, you might be able 
to make a case in some ways for it. I do not know how in terms of 
nursing home standards and putting working middle-class families at 
risk, but the fact of the matter is here there is, as part of this 
budget, a $245 billion tax break to the wealthiest Americans in this 
country.
  I do not deny people the opportunity to increase their salary and 
achieve a good status. That is a part of what the American dream is all 
about. No one questions that. But at this moment if you are going to 
cut Medicare, as they will, $270 billion, cut Medicaid $163 billion, in 
order to pay for that tax break for the wealthy, it is wrong, it is not 
part of the American tradition, and we need to fight it with every 
single breath we have.
  I compliment my colleagues, and I am proud to join with you this 
afternoon in having this conversation.

                              {time}  1700

  Ms. DeLAURO. I would be delighted to yield to my colleague there of 
Massachusetts.
  Mr. OLVER. Mr. Speaker, I do not want to let the gentlewoman from 
Connecticut [Ms. DeLauro] get away, because she has raised so many 
provocative issues here that allow us to play off of those in some way.
  The gentlewoman mentioned the misunderstanding about what Medicaid 
covers here in Washington and around the country. Well, it is really 
quite deliberate. I am convinced that it is quite a deliberate effort 
to convince people that it is really those unworthy welfare cheats and 
only those illegal immigrants who are part of the Medicaid Program. 
Because if you can somehow demonize the process, it is derogatory; it 
is an abstraction and a derogatory extraction. It is even inflammatory. 
If you can do that, then it is all the more possible to make this very 
severe cut, the $163 billion in cuts, and eventually to dismantle the 
program, which is ultimately the purpose of this, this pillar which has 
provided wonderful health care for a group of people who otherwise 
could not afford it, and for older citizens who have used all of their 
resources.
  When we think about who actually is covered by it, they are our 
neighbors and our friends and our family members who are covered by 
Medicaid. It is the mothers and fathers in the nursing homes who have 
used all of their other resources somewhere along the way, and have 
only that to get their health care. It is the widows who have too 
little income to be able to even pay for their share of the Medicare 
that then gets picked up and paid for by Medicaid. It is the people who 
are disabled by birth defects or by crippling diseases that mean that 
they cannot be independent any longer. Yet somewhere along the way it 
is mothers of young children who are struggling and need that care, 
that health care for their kids, and it is for two-parent families.
  Mr. Speaker, one of the grand ironies that we were talking about just 
before the gentlewoman from Connecticut [Ms. DeLauro] came in was the 
business of taking $30 billion away from low-income families, people 
who are working, who have been paying in their withholding tax money 
out of their pocket; and if their income was under $25,000, they were 
working on the various sliding scales in that range, then they could 
get a tax credit. Well, in fact, the ones at the lower end of that 
scale are also people who, under these provisions, are in danger, in 
serious danger of losing their medical care as well.
  So when we are talking about trying to get people to work, we are 
taking the incentive to work, because if you work, you are going to 
lose your health care, or you are going to lose your earned income tax 
credit, which was the thing that may have helped you get off poverty. 
You are driven back toward poverty and your kids are going to maybe 
lose their health care in the process.
  Mr. Speaker, think of what this means in terms of family values. How 
can one talk about this being family values when so many of those 12 
million families that will lose their earned income tax credit are 
families with kids and those kids then become more in danger of growing 
up in poverty?
  So what you say is a double whammy, and we could go on about other 
kinds of whammies that are built into this system, because you take 
away and take away and take away, and ultimately, it is all, all of 
those monies that come out of the Medicaid cuts for kids and all of 
those that come out of the ITC are less in total than just the amount 
of money that is given in tax breaks to the small couple of percent of 
families, those couple of million families at the very upper end of the 
scale who already have incomes among the top couple percent of American 
families. It is really ironic, and it is highly unfair.

  Ms. DeLAURO. Mr. Speaker, the gentleman from Massachusetts [Mr. 
Olver] is absolutely right.
  Mr. PALLONE. Mr. Speaker, I see that the gentleman from Hawaii [Mr. 
Abercrombie] is here joining us, and I would like to yield to him at 
this point.
  Mr. ABERCROMBIE. Mr. Speaker, I thank the gentleman very much for 
yielding to me. I am very happy to be here today, because you are 
looking at a new million-dollar man here in the House of 
Representatives. I am here to collect from this man right here: Haley 
Barbour.
  This is one about the Republicans cutting Medicare. He has an 
advertisement in the Roll Call magazine this week, and he is offering 
anybody who can show the following: In November 1995, the U.S. House 
and Senate passed a balanced budget bill. It increases total Federal 
spending on Medicare by more than 50 percent from 1995 to 2002, 
pursuant to Congressional Budget Office standards. He says he will give 
$1 million to anybody who can prove that is not true.
  Mr. Speaker, you are looking at the guy that can do it. You put my 
name, Mr. Haley Barbour, right there. It says, your name here, 
Abercrombie, A-b-e-r-c-r-o-m-b-i-e, I will fill in the rest, it is OK, 
just like Abercrombie and Fitch, in case you cannot remember it, and I 
will see that that million dollars goes to the people that deserve it: 
the children that you are attacking, the elderly that you are 
attacking, the disabled that you are attacking.
  Now, Mr. Speaker, I know, I am used to seeing jolly Republican guys 
like Haley Barbour out there attacking weak people, but when he says he 
is going to give $1 million, and by the 

[[Page H14923]]
way, it is interesting that the Republicans have millions to give away, 
millions of dollars on Medicare, they say, let us see who they are 
going to give it to. They do not have a balanced budget by the 
standards of the Congressional Budget Office.
  Mr. Speaker, I have been in my special orders down here, and I say to 
the gentleman from New Jersey [Mr. Pallone] that I will not take all 
the time up today, but the gentleman knows that I can show and have 
shown in these special orders over and over again, and I think my good 
friend, the gentlewoman from California [Ms. Pelosi], is going to be 
able to show you some figures from her area, that proves there is no 
balanced budget here.
  On the contrary, the deficit is going to go up by billions and 
billions of dollars. They are going to expropriate from the Social 
Security trust fund money to try and make up that deficit. Mr. Speaker, 
I will tell my colleagues where that money is going to go from this 
unbalanced budget. We can prove that budget is not balanced. It is not 
going to be spending on Medicare. On the contrary, we assume, and the 
average American assumes, when you say Medicare spending, that is going 
for expenditures having to do with the medical needs of the people of 
this country. Yet, what is it that is being proposed by the Republicans 
in Medicare?
  This is from the New York Times, October 31 of this year. The plan 
would give doctors new ways to make money. It is not Medicare for your 
mom and my dad. This is Medicare-looting for the doctors and the 
insurance scams all over this country.
  Mr. Speaker, this is not me saying it. Let me tell my colleagues what 
the New York Times says.

       Medicaid measures working their way through Congress would 
     remold the role of many doctors, turning them into medical 
     entrepreneurs, permitting them to engage in business 
     enterprises now forbidden. The House version of the 
     legislation would allow doctors to start physician-run 
     health groups without financial and regulatory 
     requirements that States impose on similar organizations. 
     The bill would make it easier for doctors to set prices in 
     ways that now violate the antitrust rules.

  Can you imagine what a boondoggle this is? It is not being spent on 
Medicare; it is being spent on people who are going to give campaign 
contributions to the guys that are bringing them the Medicare money. 
That is what it is all about, and their medical savings accounts.
  I have the analysis right here by the Henry J. Kaiser Family 
Foundation that proves that these medical savings accounts is another 
scam artist activity for the insurance companies that will have the 
following effect. Under these medical saving plans unhealthy 
individuals are going to be unlikely to gain. Under certain scenarios, 
the traditional Medicare Program may cease to exist or exist in a 
reduced form.
  I am telling the gentleman from New Jersey [Mr. Pallone], friends and 
neighbors, colleagues, we are in the chips. I want Haley Barbour to 
have that pen ready to write my name on that check so that we can 
follow up, and we are going to be down here every day exposing how the 
Republicans have taken something as serious as Medicare, as serious as 
that is, to the mothers and fathers and the families of this country, 
having to count on Medicare, and take it and try to turn it into a joke 
where they are putting a $1 million check up there as if it is some 
kind of a sideshow that they want to put on.
  Well, we are taking them up on it. We are showing people that this 
Medicare expenditure is a serious issue with the Democrats in this 
Congress, a serious issue for the families in this country, a serious 
issue for children, for the elderly and for the disabled; and we are 
going to expose this for what it is.
  Mr. PALLONE. Mr. Speaker, I appreciate the comments of the gentleman 
from Hawaii, and I totally agree.
  I just want to say one thing before I introduce our next participant 
here. Even though that Roll Call article talks about how more money 
theoretically is going into Medicare, what we are really talking about 
here is the amount and the level of growth.
  When I say that something like 18 percent of the people who are now 
eligible for Medicaid are not likely to be eligible in 7 years, that is 
because the amount of money that the Republicans are putting into the 
plan will be 18 percent less than what it would be under current law. 
If you translate that into the number of people who would be ineligible 
for Medicaid, as the gentlewoman from Connecticut said, in nursing home 
care, the children, the disabled, whatever, that is what we are talking 
about. It may be that in actual dollar terms there is more money, but 
in real terms, it is an 18 percent cut, and 18 percent less people are 
going to be eligible.
  Mr. ABERCROMBIE. Mr. Speaker, if the gentleman would be kind enough 
to yield for a moment, I agree with what the gentleman is saying, 
although I think the gentleman is being entirely too kind. Not only was 
the gentlewoman from Connecticut [Ms. DeLauro] correct in the analysis 
that she made, but I was showing even further cost transfers that are 
being made.
  Mr. Speaker, we cannot say that we are spending more on Medicaid, 
except by an accounting trick, if at the same time, simultaneously, we 
are increasing the deficit and the interest that must be paid on that 
deficit. If we are transferring money out of the Social Security trust 
fund, which must be paid back with interest, what happens is, on a net 
basis, not only are we not spending more on Medicare per se, but we 
have actually increased the indebtedness of the people of the United 
States with respect to that budget.
  So on any grounds that we want to put it, if we want to compare the 
tax cut, I should say the tax giveaway that they want to put out there 
is in the neighborhood of $240 billion to $250 billion, and even Mr. 
Barbour, at his most hyperbolic, says that under their plan, the 
government spent $289 billion on Medicare, just on the tax giveaway 
alone, 250 that is already gone. That leaves 30 right there that we are 
dealing with.
  As I said, that can be made up just with the other points that the 
gentlewoman from Connecticut (Ms. DeLauro) made up and that the 
gentleman made up. So the plain fact of the matter is that on paper and 
paper only, by way of illusion, and by accounting trickery can we even 
presume that we are going to spend more on Medicare.
  The actual facts of the matter are that the public debt will increase 
from $5.2 trillion to $6.8 trillion over this 7-year period by the 
accounting methods that are used in the Republican budget document 
itself.
  Mr. PALLONE. Mr. Speaker, I appreciate what the gentleman is saying.
  I would like to yield now to the gentlewoman from California [Ms. 
Pelosi].
  Ms. PELOSI. Mr. Speaker, I thank the gentleman for yielding. I thank 
the gentleman from New Jersey [Mr. Pallone] for his leadership on this 
issue and for his untiring efforts to call to the attention of the 
American people and this Congress what is at stake in this fight that 
we are having.
  I welcome the opportunity to convey to my colleagues what the impact 
is on my community in San Francisco and on the State of California. 
Before I do, I wanted to follow up on the remarks of our colleague from 
Hawaii in terms of generally what these cuts mean in terms of balancing 
the budget.
  We all know, Mr. Speaker, that any proposals that are being put forth 
on the Republican side now do not represent balance in terms of the 
values that our country holds dear. When we would cut all of the kinds 
of money we have out of investments in our children, we cannot be 
talking about a balanced budget. It is unbalanced and imbalanced.
  In addition to that, I think it is very important to recognize that 
the proposal being put forth by our Republican colleagues will not 
fiscally balance the budget either for the some of the reasons that the 
gentleman from Hawaii [Mr. Abercrombie] has put forth, but also, we 
will have a better chance of balancing the budget to the extent that we 
invest in our children, in their education and in their health and in 
their well-being. Only then will that investment make our economy more 
dynamic, a healthy and educated work force, make our country more 
competitive, and therefore produce the revenues that are necessary to 
balance the budget within 7 years or beyond, depending on what our 
basis is. I say that, meaning in the foreseeable future.
  Mr. Speaker, I do think that the cuts that we are talking about here 
have to 

[[Page H14924]]
be recognized, as the gentleman has done so eloquently, as to what the 
impact is on the individual and that individual's family, but also in 
terms of what the impact is on the local communities which will be 
impacted by these cuts, their budgets, as well as the economies of 
those regions when you take away the personal assistance and the 
assistance that goes to the area.

                              {time}  1715

  In the State of California, I do not have my California chart right 
here but I have used it many times to show that under the Gingrich 
budget, the Republican budget, over $72 billion will be cut over the 
next 7 years just in the Medicare-Medicaid cuts, we call it MediCal in 
California, earned-income tax credit, school nutrition programs, those. 
Not even going into the cuts in appropriation, in terms of protecting 
the environment or assistance to disadvantaged children in chapter I 
and on many other cuts that will be made through the appropriation 
process. Just looking at what is being done on the entitlement, the 
guaranteed side, guaranteed to this point.
  It is something that just does not affect those individuals but as I 
mentioned it affects their local government's budget and the economy of 
the area.
  Our State probably, if you take the appropriations into consideration 
over that 7-year period, will be over $100 billion. Our State budget is 
about $57 billion a year. So you are talking about nearly 2 years of a 
budget of the State of California being cut out of the 7-year, and 
think of what that means to the economy of a State like California. And 
then just take it to your own States and figure out how it relates to 
your own States. I know you have all done that and made presentations 
to that effect.
  But in California with such a heavy weight, \1/8\ of the country, if 
it has a very negative impact on California, of its nature it will have 
a heavy impact on the country over and above what it does to your 
States individually.
  In the city of San Francisco, and I have this chart to show some of 
these figures. As you can see right now, employer coverage and 
privately purchased insurance covers about 48 percent of our 
population; uninsured are 21 percent; MediCal, which is Medicaid 
recipients, represent about 16 percent; Medicare recipients the 
remainder, 15 percent.
  If the cuts being suggested are made, that will move our uninsured to 
nearly 30 percent of the population. In the high 20's to 30 percent of 
the population of the city will fall into the uninsured. Those people 
who may need emergency care, the costs are shifted again to employer 
coverage and privately purchased.
  That is where we were when President Clinton came in and said, we 
need to improve, we need to reform health care coverage in our country. 
that is the real answer. We missed that opportunity because of the 
complexity of the issue, the partisan nature of the debate, et cetera. 
But nonetheless, that is the answer to reducing the increase in health 
care cost and the impact on the public budget.
  But nonetheless, when you make those cuts, that means 40,000 people, 
13,000 families now covered by Medicaid, would be losing their health 
coverage, would be severely impacted.
  As a result, even if we say it just goes to 25 percent, the impact 
would not be just on the poor. according to a recent study sponsored by 
the National Leadership Coalition on Health Care, cost-shifting would 
cost the private sector payers $87 billion--now we are talking 
nationally--over the next 7 years. most of the cost shift would be 
passed on to workers by employers in the form of forgone wages and an 
increased cost for health insurance premiums.
  But to San Francisco. Our San Francisco city comptroller has 
estimated that the Republican budget will impose $600 million in cuts 
to the city budget over 7 years, with half of these cuts alone 
for Medicare and Medicaid programs alone.

  The city will have little choice, and I say this, substitute the name 
of any city, will have little choice except to greatly reduce services 
or increases local taxes.
  Because of the impact on local budgets and public hospitals, you will 
have a problem finding lifesaving trauma care if you or a family member 
are involved in a serious accident requiring emergency care, and that 
is assuming that you are in this employer coverage and privately 
purchased care. So it would even affect you in that category.
  The severe cuts in Medicaid are required in order to fund this 
massive tax break, and that is what the saddest part of this story is. 
Because here we are in a situation where we are hitting people--I heard 
one of my colleagues say earlier, we do not want to be engaged in class 
warfare. Of course we do not. But fair is fair. Not welfare. But 
fairness. And it does not seem right.
  Most people that I know who are in the brackets which would benefit 
from these tax breaks say, ``We don't need this tax break. We have 
decided we want to balance the budget, so don't give us this tax break. 
If that is your value, then don't balance it. But don't take it from 
the poorest of the poor.''
  How could it be fair for the earned-income tax credit for the working 
poor to be cut, to be eliminated for many families, many people, while 
we give a tax break at the high end?
  Now our Republican colleagues will say, ``Oh, we're just taking it 
away from people without children.'' Well, these young people would 
like to have a family, too. They are families, they are potential 
families, and they want to be strong families.
  So when you talk about the cuts in earned-income tax credit, and I 
just want to add one more point on this tax fairness issue. The much-
heralded family tax credit that our colleagues have talked about in 
their tax plan, $500 per child, you have heard of it. It ironically is 
retroactive until October 1 of this year, while the capital gains tax 
break for the high end is retroactive until January 1, giving them the 
full benefit of the tax break, while families only get 25 percent of 
the break, so that $500 tax break for this year is $125, and you cannot 
collect it until October 1, 1996. Yet if you are in the upper brackets 
and you get the capital gains reduction, we can accommodate you until 
January 1 of last year.
  This is about fairness. It is not about class warfare. But if you are 
stomping on the people at the low end who need a safety net at some 
period of time in their lives in order to give a tax break to the 
wealthy who are not clamoring for it but who do want a balanced budget, 
you have to have a balance in values, you have to have an investment in 
children in order to produce the revenues in order to reach balance in 
a very fair way.
  I say to our colleagues, look to what it does to individuals. But see 
what it does to the local budgets in your area and the impact on the 
economy in your area to have, say in our case, about $100 billion 
pulled out over the next 7 years.
  With that, I yield back to my colleague and thank him for the 
opportunity to present the concerns of my community on this unfair 
approach to Medicaid, particularly Medicaid, in this instance in this 
budget.
  Mr. PALLONE. I thank the gentlewoman. I yield to the gentleman from 
Massachusetts. I know we only have a minute or two left.
  Mr. OLVER. I thank the gentleman.
  The gentlewoman has given very dramatic data there as to what it is 
that happens in your home State. I would just like to connect it to 
what the gentleman from Hawaii had said.
  In your chart, the uninsured group gets increased, it gets increased 
by taking people who presently have insurance, the only kind of 
insurance they have, from the Medicaid Program, out your MediCal 
recipients, increases the uninsured, the people who are really 
destitute and do not have health insurance.
  The thing that is offered in return is the medical savings account 
which you have to already to able to have a large amount of income that 
you can risk in the process, $4,000, $5,000, $6,000 that you can risk 
in the first place, which is only people who are very wealthy.
  So the medical savings account does not do anybody any good who is in 
the red category or that white category of uninsured. All we are doing 
is increasing the uninsured and making it harder for those who are 
modestly and marginally insured and trying to transfer it to people who 
already have a not in this society.
  Mr. PALLONE. I want to thank everyone who participated in this 
special 

[[Page H14925]]
order today. I think we really brought out a lot of good points.

                          ____________________