[Congressional Record Volume 141, Number 203 (Monday, December 18, 1995)]
[Senate]
[Pages S18806-S18808]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            THE PRESIDENT SIGNED AN AGREEMENT WITH CONGRESS

  Mr. GRASSLEY. Mr. President, first of all, I thank the Senator from 
Florida for a very clear-cut statement about why we are where we are 
and how we can get out of it. Basically, it is the President of the 
United States doing what he said he would do.
  We are where we are today, Mr. President, because on November 20, the 
President signed an agreement with Congress. This is the wording of 
that agreement:

       The President and the Congress shall enact legislation in 
     the first session of the 104th Congress to achieve a balanced 
     budget not later than fiscal year 2002 as estimated by the 
     Congressional Budget Office * * *

  We have said several times that the President himself on November 20 

[[Page S18807]]
  signed legislation that said he agreed to three things: One, that he 
would send a budget to the Hill that was balanced. That budget he was 
going to send to the Hill would be the third one, because remember, he 
sent one in February, he sent one again in June and this would be the 
third one. It would be balanced by the year 2002, the same as when 
Congress said that we would balance the budget.
  What is magic about 2002? It could be 2001, it could be 2003, but 
really what is magic about 2002 is that in February of this year, we 
had 66 Senators--that is Republicans and Democrats, because there are 
not 66 Republican Senators--a bipartisan vote that the budget should be 
balanced by the year 2002. The House of Representatives had a vote 
about a week or two earlier with 301 votes. That is Republicans and 
Democrats. That is a bipartisan vote that said we should do it by 2002.
  There is nothing revolutionary about 2002. That is an evolution to a 
balanced budget. That is a Republican evolution to a balanced budget.
  For a lot of people, it is too, too slow. We probably got more people 
in this country mad at us because we are taking until the year 2002 to 
balance the budget than by 2002. The President says that is extreme. 
Well, it cannot be extreme if he signed the agreement that he was going 
to be in favor of balancing the budget by 2002, because if that is 
extreme, the President is extreme. I do not think anybody in this town 
is extreme.
  The most difficult process in this town is just making the tough 
decisions. For our constituents, taking 7 years to balance the budget 
is not a tough decision. That is too evolutionary of a process for 
balancing a budget. They would like us to be more extreme than that. 
They would like us to do it sooner.
  Do you know why they think we should do it sooner? Because each month 
they have to balance their checkbook, live within their income or, if 
they are a small business or small farmer, they have to live within 
their income. They cannot be like Government, borrowing money all the 
time.
  But the President signed that he would submit by December 15 a 
balanced budget and that it would be scored by the Congressional Budget 
Office. Those three things are pretty key to the President keeping his 
word when he signed this.
  The first budget that they sent up here about 2 weeks ago was not in 
balance, $400 billion out of balance, as scored by the Congressional 
Budget Office; $115 billion deficit even the last year.
  We are here today because we are still waiting for the President to 
deliver on what he signed into law on November 20. Where I come from, 
that means you sit down to make a deal, you put some numbers on the 
table, and those numbers should be within the guidelines of the debate. 
The debate is to have it balanced and scored by CBO, the Congressional 
Budget Office. By the way, the nonpartisan Congressional Budget Office, 
not scored by the Office of Management and Budget which is part of the 
White House which is headed by a Presidential appointee. The 
Congressional Budget Office, nonpartisan, people who do things based 
upon their study of forecasting the future and what programs are going 
to cost in the outyears, not what some Republican or Democrat says it 
is. Their reputation of being a true judge of what things are going to 
cost when they score it is at stake.
  Last Friday, they made another attempt to come up here. I suppose 
that would be the fourth budget this year. It was still off. But what 
did they do about the Congressional Budget Office scoring? They said, 
``Well, we don't agree with it.'' This does not say anything about 
agreeing with it. You just simply present your numbers and let the 
nonpartisan budget office score it. Let the chips fall where they may.
  ``Mr. President, if you come up short someplace, we understand. Just 
go back to the table and submit a new number, but get something that 
the Congressional Budget Office can say is in balance.''
  The only thing we Republicans--maybe I should not speak so 
definitively--the only thing we Republicans care about is that the 
budget is balanced by 2002, because I suppose each one of us has an 
opinion on that. But I have heard enough of the people who do the 
negotiating for the Republicans--and for a few days I was one of the 
eight doing the negotiating--that when the President puts a budget that 
is balanced, as scored by the CBO, on the table, then within the 
parameters, anything is on the table, including what to do about 
Washington spending, which we call discretionary spending, where we let 
the Washington bureaucrats spend it, those programs. Entitlements like 
Medicare and Medicaid, and even defense and taxes, are all on the 
table.

  All we want the President to do is to play in the same boundary. If 
you want to keep the cows within the pasture, that means you build a 
fence around the pasture. Then you operate within that. And what you do 
within that fence is all in the ball game. Everybody negotiating with 
the White House and the Congress can reach an agreement. But what is so 
important about the fence, what is so important that is scored by the 
nonpartisan Congressional Budget Office, is simply that it is an end to 
business as usual here in Washington, that the big black hole of 
Government borrowing can go on and you can spend any amount of money. 
For the first time in 27 years, we are saying, once again, there is 
some limit on what you can spend--just some limit.
  Now, I came to the floor to speak about another point because we 
always talk about the budget deficit. But there are two deficits that 
we can defeat in the process of balancing the budget deficit. The 
Senator from Florida spoke very well about what good is going to come 
to the economy. There was an economist quoted in a USA Today article, 
``What Life Would Be in the Year 2002 With a Balanced Budget.'' Some of 
the things they spoke to have been referred to by my colleagues on the 
floor. A larger economy by $150 billion--this is by the year 2002--a 
$150 billion bigger economy, more in goods and services, and lower 
interest rates. We would see 30-year fixed-rate mortgages below 5 
percent. The last time I remember mortgages for under 5 percent was 
when I purchased a house in 1960. I think it was 4\3/4\ percent. Half a 
percent was for FHA insurance for the 4\1/4\ percent. You have to go 
back a long way to see the good that can come to the pocketbooks of the 
American people, such as $2,300 per person--that is a figure for my 
State of Iowa--$2,300 less per mortgage that families will be paying. 
If they have student loans, they will be paying $608 less in interest 
on that student loan. Our economy will grow dramatically. So we are 
going to have lower inflation besides lower interest, we are going to 
have higher incomes, and we are going to have a stronger dollar.
  Then the second deficit that will be eliminated besides the budget 
deficit is the trade deficit. Now, since, I think, 1982, 1983, or 1984 
at the latest, we have been worried and scared to death about the trade 
deficit--that we import more than we sell and that we need to do 
something about it. This article quotes an economist at Meyers & 
Associates, who said that when we do away with the budget deficit by 
the year 2002, we will also be doing away with the trade deficit, as 
well.
  So here we have a chance to accomplish this and kill two birds with 
one stone--get rid of the budget deficit, if we make the tough 
decisions that must be made on the budget deficit, and get lower 
interest rates, a stronger dollar, and reduce the trade deficit as 
well. As chairman of the International Trade Subcommittee of the U.S. 
Senate, there is nothing I would rather have happen than to get rid of 
the trade deficit at the same time we get rid of the budget deficit.
  Another reason we are here is that we have been hearing for a long 
time, Mr. President, about how the President wants to protect Medicare. 
Well, my friend who is still here, the Senator from Utah, Senator 
Bennett, spoke a half hour ago about how we are very dramatically 
increasing Medicare spending. But do not forget why we are dealing with 
the Medicare issue at all. It is because the President's trustees--
three members of the President's Cabinet, the Commissioner of Social 
Security and two private citizens, appointed by the President of the 
United States last year--studied the problems with Medicare funding and 
the fact that there was a potential bankruptcy of Medicare. A potential 
bankruptcy of 

[[Page S18808]]
Medicare means that at some time Medicare is going to run out of money. 
With the insolvency of Medicare, it will run out of money. There is no 
authority in the law to borrow money for Medicare, so no bills would be 
paid after a date stated by the trustees.
  These trustees are Robert Rubin, Secretary of the Treasury; Robert 
Reich, Secretary of Labor; Donna Shalala, Secretary of HHS; Shirley 
Chater, Commissioner of Social Security, and two trustees are private 
citizens who are expert in this area of economic forecasting, Sanford 
G. Ross and David M. Walker. They unanimously, on April 2, asked the 
Congress of the United States to take very drastic action to end the 
pending insolvency of Medicare by the year 2002.
  As shown on this chart, you can go back to 1985, and this is what you 
see--money coming in, money being paid out. Next year is the first year 
that there is more money being paid out of Medicare than is being paid 
in in taxes to the Medicare trust fund. And then it spends down very 
dramatically to the year 2002 when it goes into deficit. You do not pay 
anything on the deficit because there is no authority there to borrow.
  So we responded to the appointees of the President of the United 
States, the trustees of the Medicare system, in their report to us. We 
made the commitment earlier this year to respond to that need, to save 
Medicare, but not only to save Medicare, but to strengthen Medicare, 
and not only strengthen it, but go beyond strengthening it to give 
people, for the first time in 30 years, some choice in the type of 
medicine that they want applied to them by giving them the opportunity 
of keeping what they have had for 30 years if they want to do so, or 
taking the $4,900 this year that we paid for each beneficiary per year 
and let that be used by that individual, by their own free choice, to 
buy a managed care plan if they want to do that; let them roll their 
own dollars by giving them the $4,900 to put in a medical savings 
account; or, lastly, that they could keep a plan that they had where 
they last worked, like a union or association plan. That would be a 
choice that the individual Medicare enrollee could choose to do. You 
could choose to do that once a year. You could choose to leave the 
traditional Medicare plan and go into a managed care plan for a year. 
If you did not like that, come back to Medicare, or go over to a 
medical savings account, or go over to an association plan that you 
might want to have.

  We responded to that. It was in the Balanced Budget Act of 1995 that 
we sent to the President a month ago, the same one that the President 
vetoed.
  Mr. President, the Senate majority leader would like to have me 
yield. I yield as long as I do not lose my right to the floor.


                     A Step in the Right Direction

  Mr. DOLE. Let me indicate that the President did call both myself and 
Speaker Gingrich this afternoon about 3 o'clock. Without getting into 
the details of what the conversation was, I am pleased that the 
President indicates a willingness now to accept our invitation to get 
serious about the budget and balance the budget in 7 years.
  I will be meeting with Speaker Gingrich a little later this evening. 
I think the President's call does demonstrate that he has at least 
heard our pleas over the weekend and indicates a willingness to talk 
about a balanced budget in 7 years, using CBO figures. Of course, he 
has certain concerns that he feels are a priority, and we have concerns 
we feel are a priority. I will not get into what we discussed about 
those but to say I think it is a step in the right direction.
  I want to thank the President for agreeing to sit down with the 
principals because I think it is time the principals become involved. 
It is time for adult leadership. It is time for us to start making 
decisions.
  The American people want a balanced budget. They know the benefits of 
a balanced budget, what it means in interest rates, what it means when 
you buy a car, borrow money for a student loan, buy farm machinery, a 
home, whatever. That is the purpose for this struggle for a balanced 
budget and why we feel so determined it should be done.
  Hopefully, there will be discussions yet today, but if not tonight, 
at least tomorrow.
  Mr. GRASSLEY. Mr. President, I believe I will yield the floor. Based 
upon what the Senate majority leader has said, if the President is 
going to start to sit down and negotiate the way he signed into law 
November 20 from the point of view of submitting a balanced budget, 
scored by the nonpartisan Congressional Budget Office--at least that is 
the first good news we have had of reaching an agreement--there is no 
point of my taking any more time to point out the shortcomings of the 
White House in not living up to the November 20 agreement that they 
said, albeit today, the 18th of December, November 20 until now, would 
be 28 days. This was all supposed to be done by September 15. I am 
happy to know the President would take that initiative and that we will 
avoid the rhetoric and get down to real negotiating within that 
boundary of a balanced budget, scored by the nonpartisan Congressional 
Budget Office.
  I do want to complete one point. I started the point on Medicare 
because I wanted to point out where the President had been condemning 
us, as cutting Medicare. This chart, again, is just illustrative of 
what the Senator from Utah has already said about 45 minutes ago. We 
are right now spending $178 billion on Medicare; we are going to 
gradually increase that expenditure up to $290 billion or thereabouts, 
maybe a little over $300 billion by the end of this period that it 
takes to balance a budget.
  There is no way that in the Midwest where I come from any taxpayers 
that I am ever going to talk to are ever going to consider that to be a 
cut. Just in case, for people who are cynical about those of us in 
Congress--and there is plenty of reason to be cynical, I know--I want 
to quote what President Clinton had to say about cuts versus increases 
like this. He was referring to increases like this, but he was 
evidently having somebody say you are cutting Medicare. This is what 
the President said on October 5, 1993, when he was commenting about the 
opposition of his saying he was cutting Medicare.

       Medicare is going up at three times the rate of inflation. 
     We propose to let it go up two times the rate of inflation. 
     This is not a Medicare cut. So when you hear all this 
     business about cuts, lets me caution you this is not what is 
     going on. We are going to have increases in Medicare and 
     Medicaid, and a reduction in the rate of growth will be more 
     than overtaken by new investments that we are going to make.

  That is the President as reported on ``MacNeil-Lehrer News Hour,'' 
October 5, 1993.
  Nobody who is intellectually honest, if you are increasing things 
twice the rate of inflation--Republicans are doing that, the President 
proposed to do that--if it was not a cut in 1993, it is not a cut in 
1995. If we are going to be sitting across the table from each other 
negotiating, we ought to be able to do it in an intellectually honest 
way.
  This is what the facts are, Mr. President. The facts are that we are 
very dramatically increasing Medicare. It is not being cut. It is often 
being increased at the rate of inflation. If anyone wants to know how 
billions of dollars affect them, they are getting $4,000 a year now, 
per beneficiary, per year, of Medicare recipients. This year, it will 
be $7,100.
  I hesitate to say that because there are a lot of constituents out 
there like the one that the Senator from Utah read to us about who are 
going to be mad because we are not even freezing this. There are very 
dramatic increases.
  I thank the President for coming forth. I hope this time we see real 
negotiations.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. BENNETT. Mr. President, I ask unanimous consent I may proceed as 
in morning business for up to 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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