[Congressional Record Volume 142, Number 2 (Thursday, January 4, 1996)]
[House]
[Pages H178-H184]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 DEBATE IS ABOUT WHETHER THE WHITE HOUSE AND CONGRESS ARE IN AGREEMENT 
                       OVER BALANCING THE BUDGET

  The SPEAKER pro tempore (Mr. Metcalf). Under the Speaker's announced 
policy of May 12, 1995, the gentleman from Connecticut [Mr. Shays] is 
recognized for 55 minutes as the designee of the majority leader.
  Mr. SHAYS. Mr. Speaker, I understand I have 55 minutes and the 
gentleman from New York [Mr. Owens], the gentleman after me, has 55 
minutes?
  The SPEAKER pro tempore. That is true.
  Mr. SHAYS. Mr. Speaker, I am happy to be joined by the gentleman from 
Iowa [Mr. Ganske].
  Mr. Speaker, I was elected to the State House of Representatives in 
1974, and it never ceased to amaze me, when I saw my colleagues in 
Congress having to form a budget, that they did not have to balance the 
budget. It never ceased to amaze me that unlike the State house, where 
our revenues had to equal expenditures, men and women in Congress 
continued to deficit spend and put us in an incredible hole of 
obligations.
  Mr. Rabin, before he was assassinated, said that he was elected by 
adults to represent the children and the children's children. And this 
is what this issue is all about. We have Federal employees who 
are innocent victims, but, ultimately, they will be paid. But they have 
to now survive without pay. They are caught in the middle.

  But this is not about Federal employees. This is not even about the 
disruption of services. It is about whether or not there is an 
agreement in Congress with the White House to finally balance our 
Federal budget, get our financial house in order, Save Medicare from 
bankruptcy and, ultimately, to change this social and corporate welfare 
State into what I would refer to as an opportunity society, an 
opportunity for all Americans.
  So, Mr. Speaker, we are gathered here now in a very significant 
debate. I have differences with my colleagues on the other side, as I 
am sure others of my colleagues on this side of the aisle have. We are 
trying to get our financial house in order and balance our Federal 
budget.
  We presented a budget that we worked on for 11 months. Our budget, in 
some cases with discretionary spending, which is the running of 
Government, the various departments and agencies, we made real 
reductions. We spent less in some programs and departments than we did 
in this year's budget.
  We eliminate a department, we reduce the size of other departments, 
we consolidate agencies, and we attempt to, in a 7-year plan, balance 
the Federal budget.
  In terms of entitlements, which are half of our Federal budget, we 
are looking to slow the growth of entitlements. We are not cutting 
them; we are spending more. I am just going to read the expenditures of 
five programs that our colleagues just previously made reference to. 
They called it cuts. Only in this place, in this city of Washington, 
when you spend so much more do people call it a cut.
  The earned income tax credit is a credit that goes to people who do 
not pay taxes. It is an assistance to the working poor, and we are told 
that we are cutting it when we go from $19.9 billion to $25 billion in 
the 7th year. That is an increase of 20 percent, and yet our colleagues 
call it a cut.
  The School Lunch Program, which they went to schools and told the 
children they would no longer have a school lunch program. What an 
outrage. That program goes from $5.1 billion to $6.8 billion.
  Our Student Loan Program, we are told we are cutting the Student Loan 
Program, and it goes from $24.5 billion to $36.4 million, a 50-percent 
increase in student loans. Only in Washington when you spend 50 percent 
more do people call it a cut.
  And then, before yielding to my colleague, the gentleman from Iowa 
[Mr. Ganske], I will just make reference to two very important 
programs, I know to Mr. Ganske, and certainly to me as well, because we 
worked on these programs very closely. Medicaid. This is health care 
for the poor. We go from $89 billion now to $127 billion. Only in 
Washington when you go from $89 billion to $127 billion do people call 
it a cut.
  And then with Medicare, we go from $178 billion to $289 billion. I 
would love to just make reference to some very specific points in this 
program. The bottom line to this program is that when we talk about it, 
we are going to go on a per capita basis from $4,800, in this past 
year, to $7,100 in the year 2002, which is now 6 years from now. 

[[Page H179]]
Now, that is a 45-percent increase per capita, and yet I am told that 
is a cut. We are allowing Medicare to increase on an annual basis of 
7.2 percent, and yet I am told by my colleagues on the other side of 
the aisle that that is a cut.
  I have a difficult time with that. It is not a cut, it is a 
significant increase. Admittedly, it is not a 10-percent growth, it is 
a 7.2-percent growth each and every year.
  I know my colleague, who happens to be a doctor, is very near and 
dear to the concerns of Medicaid and Medicare. Medicaid is health care 
for the poor. And also Medicaid is nursing care for the elderly poor. 
Medicare, which is health care for the elderly and the disabled, these 
are two very important programs that we are trying to save. I would 
love at this time to yield to my colleague to discuss whatever he would 
like as it relates to these issues.

                              {time}  2215

  Mr. GANSKE. I thank my colleague from Connecticut. It is such a 
pleasure to share time with him, and we can have a civilized 
discussion. There has been so much hot rhetoric on the floor of 
Congress in the last few weeks that I think it will be important 
tonight to cover some areas and present the facts to the public and 
discuss these issues in a rational way.
  I think we ought to spend a little bit of time on the so-called tax 
cuts for the rich. I think we ought to spend some time on some of the 
specific items in Medicare that were discussed by the previous 
discussants. But I think maybe we should just start with where are we 
at with this budget? Why do we have furloughed Government workers?
  Well, it has been about I think 7 weeks since the President signed a 
continuing resolution in which he promised to present Congress with a 
balanced budget, one that balances in 7 years by honest numbers, 
Congressional Budget Office numbers. It was just a few years ago that 
the President, right here, told Congress that he felt that the 
Congressional Budget Office provided the most accurate estimates for 
economic growth. Well, why do we have Government employees that are not 
working or those who are working are not getting paid in some areas? It 
is basically the President has not kept his promise. He has not 
presented or brought to the table a balanced budget that balances in 7 
years utilizing the Congressional Budget Office that he said he would 
do.
  In return for our last continuing resolution, Congress said we will 
consider everything, we will put everything on the table, tax cuts, 
health care, education, whatever your priorities are. But I tell my 
constituents back home that this has been very frustrating, because it 
is like if I go to an auto dealer, and I see a car on the lot and I 
really like it, I want to purchase it from that auto dealer and I say I 
will you $10,000 for that car, and the auto dealer says it is not 
enough, and I say, well, how much do you want? And he will not tell me. 
He just says, spend more or pay more. You know, it is hard to make an 
agreement with that.
  Mr. DREIER. Mr. Speaker, I would like to inquire, it was not in a 
DeSoto dealership, since I know that my friend drove around his 
district in a DeSoto automobile in the last campaign.
  Mr. GANSKE. If I would help the budget negotiations, I would bring 
the DeSoto to Washington and drive it down to the White House.
  Mr. DREIER. My friend is absolutely right that there has been very 
clear confusion on this issue because we saw in November, on the 20th 
of November, a commitment made by the President that he would come 
forth with a balanced budget that would use what we describe as honest 
numbers in Washington lingo. It is the Congressional Budget Office 
scoring, and he said when he stood behind where my friend is in his 
first State of the Union Message on February 17, 1993 that he believed 
the most honest numbers and responsible scoring procedure was to 
utilize the Congressional Budget Office, and tragically, while that 
indication was made when it was signed by the President November 20, 
and we have failed to receive that balanced budget, it has 
understandably created a high level of frustration, not only for those 
who serve in the Congress, but for those Federal workers who have 
been furloughed and the American people who have been anticipating a 
response.

  Mr. GANSKE. Mr. Speaker, I think people back home get all mixed up 
when we are talking about CBO, Congressional Budget Office, or OMB, 
Office of Management and Budget. That is the administration's 
predictors of economics. But I try to explain it to them this way: you 
have to work from the same set of books using the same accounting 
system in order to understand where you are both at. You cannot use one 
type of accounting system and a different accounting system and come to 
an agreement. That is why it was so important and why I was hopeful for 
a period of time, when the President first agreed to doing this, that 
he would actually put his numbers there, that we would be comparing 
them apples to apples and not apples to oranges.
  Mr. SHAYS. Mr. Speaker, if the gentleman would yield, that is the key 
point, that we compare the same basic accounting numbers. And Mr. 
Dreier is right on target, the President was right behind you saying 
use the Congressional Budget Office numbers. Congressional Budget 
Office is not bipartisan. It is not partisan, it is nonpartisan. These 
are not political appointees like the Office of Management and Budget.
  Mr. GANSKE. The gentleman is on the Committee on the Budget, and he 
very well knows that when Congress passes budgets, we certainly did not 
get every economic prediction that we wanted to from the Congressional 
Budget Office.
  Mr. SHAYS. Did we get any that we wanted?
  Mr. GANSKE. We had to work with the assumptions that they gave us, 
just like we would expect the President to work with the CBO on their 
assumptions.
  Mr. SHAYS. So it has been since November 20 and the President made it 
very clear that we would balance the budget using the Congressional 
Budget Office numbers. And what has happened since then? Has he 
submitted a budget? Has it been scored by the CBO? And the answer is 
no.
  That is really the point that we find ourselves. We have been authors 
and we have authored since January and we have struggled and debated 
and made decisions on Medicare and Medicaid; on the school lunch 
program; yes, on taxes as well. We set out priorities, and now we want 
the President to tell us what his priorities are. Instead, he has been 
a critic on the sidelines saying what he does not like, and not an 
author, and we are asking him to be an author. The challenge we have 
right now is the Government shutdown. Why is it shut down?
  Mr. DREIER. If the gentleman would yield, I think we as Republicans 
made a mistake. The mistake that we made was in believing that when on 
November 20, 1995, just about 6 weeks ago when this agreement was 
signed, we believed that the President would come forward and, in fact, 
offer this balanced budget with the honest numbers, the Congressional 
Budget Office scoring. Our mistake was in believing that, because 
tragically it has not happened. That is what has created this high 
level of frustration.
  Mr. GANSKE. If the gentleman would yield, the President signed that 
continuing resolution. That was an act and that is a law. He has broken 
his promise on that. Because the President has not kept his promise, I 
think it has really created a level of frustration and distrust with 
Congress at this point in time.
  I believe that if the President really wanted to get the workers back 
to work, the most constructive step that he could take would be today--
I mean, he has 500 workers in the Office of Management and Budget. He 
has had almost 2 months.
  Mr. SHAYS. And you want him to do What?
  Mr. GANSKE. I think if he would finally put a plan on the table that 
the CBO scored as balanced, it does not matter what is in it. He can 
put his priorities in it. It would be a sign of good faith with 
Congress, if the President is truly interested in doing this.
  Mr. SHAYS. If the gentleman would yield, I watched the President give 
his press conference yesterday and he said Republicans are trying to 
basically ram down our proposal, which is simply not true. Because we 
are not saying that he has to present our proposal. We 

[[Page H180]]
are saying he needs to present his proposal with his priorities.
  For instance, if he wants no tax cut, he can submit a budget with no 
tax cut. If he wants more spending on Medicare or Medicaid, he can do 
that. The only requirement is that it be balanced, scored by real 
numbers. So, that is the issue and it is simply not true.
  Mr. GANSKE. If the gentleman would yield, the gentleman has pointed 
out before that this is hard work coming up with a 3,000-page document, 
as this Congress did, that balances. We went through every program. We 
had to make some tough decisions when we did that. We have to decrease 
the rate of growth in some areas. And I believe that the reason the 
President has not done this is because he has not been willing to make 
some difficult decisions. It brings into question, truly, whether the 
President wants to balance the budget or has the moral courage or the 
spine to do that.
  Mr. SHAYS. Ultimately, this Government is going to be shut down until 
the President doe his job and provides this Congress with his balanced 
budget. That is a fact. It is not something that either you or I like, 
but we know what the cause is. This is the cause that only happens and 
an opportunity that only happens once in a lifetime.
  For over 30 years, particularly since the end of the Vietnam war, our 
national debt his gone up from over $300 billion to $4.9 trillion or 
$4,900 billion, and that has happened in peacetime. Both the gentleman 
from Iowa and I and other Members, particularly on this side of the 
aisle, want to put an end to that. We want to end the deficits so we 
have lower interest rates; so our mortgages cost us less; so our car 
payments cost us less; and so that businessmen and women, when they 
want to invest in new plant and equipment to make their workers more 
efficient and more productive, do not have to pay so much for the cost 
of money to invest in new plant and equipment.
  What I would like to do is I would like to get into one particular 
issue to illustrate what we did during the last 11 months, and that was 
the whole issue of Medicare. We know that Medicare is going up from 
$178 billion to $289 billion. first off, we know that Medicare is going 
bankrupt. It becomes insolvent starting this year. Less money is put in 
the fund than goes out the first time ever in Medicare Part A.
  We know it ultimately starts to go insolvent and becomes bankrupt in 
the seventh year. With our Medicare plan, we are looking to spend a 
considerable amount more in the next 7 years than we did in the last 7. 
We spent in the last 7 years $926 billion. We are looking to spend $1.6 
trillion. $1.6 trillion. We are going to spend $727 billion more in the 
next 7 years than we did in the last 7.
  On a per capita basis, we are going to go from $4,800 per beneficiary 
to $7,100. and it is important to say ``on per beneficiary,'' because 
people are saying ``You are getting more people in the system.'' Yes, 
even with more people in the system, we are still going to spend 45 
percent more for each of those individuals.

  Mr. GANSKE. That is more than twice the projected rate of inflation. 
But the importance of this matter is tremendous. As a physician who has 
treated Medicare patients, the facts are staggering. It is an absolute 
fact that in 6 years there will be insufficient revenues coming into 
the system to cover the bills.
  Now, the Health Care Financing Administration has recognized this for 
a number of years. What they have done through a system of price 
controls is gradually tightened the tourniquet. They have tightened the 
tourniquet on rural hospitals, on providers, and even with their price 
controls, they have not been able to bring down the rate of growth 
because they have not addressed an essential issue of overutilization.
  Now, President Clinton has proposed a smaller amount of savings from 
Medicare, from the Medicare Program, from what we proposed. When we 
originally proposed our Medicare bill, our savings were projected at 
$270 billion. In fact, tonight on the floor this was the figure that 
was mentioned. It would be much more accurate to say what the current 
levels are, because the Congressional Budget Office has readjusted 
their figures, and so we are now at a level of about $205 billion in 
savings.
  Mr. SHAYS. But still allowing, if the gentleman would yield.
  Mr. GANSKE. But still allowing 7.2 percent growth each year on the 
average. Remember when President Clinton and Mrs. Clinton presented 
their plan just a year and a half ago, they proposed an increase of 
about 6.8 percent. At that time they said that was not a cut. But now 
when we have proposed spending more than they did, now, of course, this 
is a Draconian cut. We have got to get past this Washington language 
about cuts. It confuses people back in the district.
  Mr. SHAYS. I would like to just emphasize this point though. The 
bottom line is that the White House, when they were presenting their 
plan on Medicare, suggested that Medicare could only grow at 6.8 
percent a year; that we needed to slow the growth. That is what we are 
doing. Admittedly, we failed to keep it as low as the White House 
originally suggested and it is going to grow at 7.2 percent.

                              {time}  2230

  And now we had basically four ways to make these savings generically. 
One is we could change and affect beneficiaries. The second is we could 
change and affect providers. The third is we could raise taxes to save 
the Medicare trust fund part A, and that simply was ruled not an 
option. And the fourth is we could change the system.
  I would love to get into the whole issue of how we are looking to 
change the system, but first before yielding I will make this point: We 
did not advocate making any change in copayments. We did not advocate, 
and do not, any change in the deduction. We do not advocate changing 
the beneficiary rate, the premium rate on the Medicare part B. We leave 
that at 31.5 percent, with the taxpayers still paying 68.5 percent.
  Now, Medicare part A, which is going bankrupt is the hospital 
payments. Medicare part B is the services. In Medicare part B, we keep 
the premium, the cost to the beneficiary, at 31.5 percent.
  As health care costs go up, that 31.5 percent will continue to be a 
higher amount, much as it has been in the last 7 years. That will be 
that gradual increase.
  I would love to later on, but I will yield to my colleague, I will 
just point out that in the year 2002 the President basically would have 
a premium of $82.80, at 25 percent of the cost, because the President 
fails to slow the growth of Medicare, and at 31 percent of the cost, 
our charge is only $87.50. It is less than $4 and some change, the 
difference in the premium cost, and yet the President has called this 
Draconian.
  The bottom line is I would love my colleague to talk about what we 
have done. We have not increased the copayments. We have increased 
deductions. We keep the beneficiary rate at 31.5 percent.
  Mr. GANSKE. I think, if the gentleman would yield, there has been a 
lot of confusion and sort of half-truths related to the premiums. It 
has been reported in my local paper that this is a bad plan because 
premiums would double. It is a half-truth, because what was neglected 
to be said was over 7 years. And how much would the premiums have 
increased if you had done nothing to the program? Because premiums have 
increased in Medicare 29 out of the last 30 years, and it is my 
understanding that premiums have increased $14 since President Clinton 
became President.
  You know, health care costs do keep rising, and if a Medicare 
recipient is paying the same percent of his part B premium, then 
because there is a gradual rise, just as there is a rise in the 
Consumer Price Index, which will increase the Medicare beneficiaries' 
Social Security payments over 7 years from $700 to $935, then you have 
to tell the whole truth. And the gentleman is exactly right. I mean, 
how are these savings achieved? The only thing asked of Medicare 
beneficiaries was that they pay the same percent of their part B 
premium for the next 6 years that they paid last year, no increase in 
deductibles, no increase in copayments.
  At the same time, hospitals were asked to take a reduction. Providers 
were asked to take a reduction, and they agreed to do that if there 
were some structural changes in the program.

[[Page H181]]

  If you only tightened the tourniquet like the Health Care Financing 
Administration has done for the last 15 years, then you reach a point 
where, instead of just stanching the blood flow, you cut off the blood 
supply completely, and you will end up with gangrene.
  So what we needed were some structural changes to go along with a 
decreased rate of growth, something that would be reasonable. But it 
should be pointed out that no senior citizen is going to be asked to 
change their current policy. They can stay exactly in the same type of 
Medicare program that they are right now. If they want to, there will 
be some options for them.

  Mr. SHAYS. I would make this point, it is not like the telephone 
company where you found you were with AT&T, the next moment you found 
yourself part of MCI or another telephone service. You will stay in 
Medicare, the traditional fee-for-service, the Blue Cross/Blue Shield 
model, the 1960's version that exists today; you will stay in that 
program unless you proactively decide to become part of another 
program. And I make this point, that you, as a Member of Congress and I 
as a Member of Congress, who are Federal employees and get Federal 
health care, we get choice, and we are saying to beneficiaries that 
they for the first time will have choice.
  They will stay in the present system unless they get a getter choice, 
and the better choice is they may get eyeglass care, they may get 
dental care, they may have a health care plan that says their 
beneficiary cost will not be as high or that they will pay no 
copayment, they may get a rebate in the amount that they pay, and they 
will decide.
  Now, let us just say they make a choice, and they did not like the 
service. We are allowing them for the next 24 months to go right back 
into that fee-for-service. So they sign up, they do not like it, they 
are not locked in for a year or 2 or 3. Now, after 24 months, when they 
make a choice, it will be on an annual basis as it is for me. As a 
Federal employee, once I choose a health care plan, of which I pay 28 
percent, I am locked in for a year. Every year I can decide to get out 
at a certain point.
  So we are offering choice, something that I know my constituents have 
asked for for a long time, but we are allowing them to stay.
  I know my colleague has some more to add on this issue.
  Mr. GANSKE. If the gentleman will yield further, I am appreciative of 
the fact that you have brought up the issue of benefits that Medicare 
beneficiaries can receive, because in the current program, the way 
Medicare is right now, there is some real unfairness in the system. 
There is some real inequity. This particularly affects my home State of 
Iowa as well as some other rural States.
  Let me explain what this is. There is such a thing as the AAPCC, the 
annual adjusted per capita cost. This is a funding formula that 
Medicare uses to determine how much they will provide for benefits per 
beneficiary, if, for instance, they are in a managed care plan.
  Mr. SHAYS. Are you saying this is based on determining health care 
costs county by county by county?
  Mr. GANSKE. County by county. Every county in the country has a rate 
determined by the Health Care Financing Administration, by Medicare. 
Unfortunately, the difference between some counties and other counties 
is huge.
  Let me give you an example. This chart shows that the disparity 
between the top 10 percent of counties in this country and the bottom 
half of the counties will increase if nothing is done. For instance, in 
my congressional district, one county is reimbursed on a monthly basis 
per Medicare beneficiary at about $245. There are counties in this 
country where the reimbursement rate is over $700.
  Mr. SHAYS. Particularly in urban areas?
  Mr. GANSKE. Particularly in urban areas, and this is a situation 
where everyone in my counties are paying exactly the same Medicare tax 
as everyone in the other counties that are getting more than twice as 
much per beneficiary. That is why, for instance, in New York City, 
somebody can sign up for a plan, get eyeglasses, membership in a health 
fitness club or some other benefit or have their premium paid that they 
cannot get in Adair, IA.

  Mr. SHAYS. Just to clarify, that is because that beneficiary 
basically has $600 that they bring to a plan on a monthly basis, 
whereas in a county like your own, a rural county or counties like your 
own, it may only be $200 or $300?
  Mr. GANSKE. Exactly. And that has been a flawed funding formula based 
on over-utilization in certain areas.
  Mr. SHAYS. So what did we do about it?
  Mr. GANSKE. So our plan addresses that. Our plan immediately bumped 
the lower counties up.
  Mr. SHAYS. If the gentleman, before leaving that, just put that chart 
that he just took off, my understanding is the average starts somewhere 
between $4,000 and $5,000 on an annual basis, and the bottom 50 percent 
are actually below $4,000, yet just the top 10 percent are $6,000 and 
climbing.
  Mr. GANSKE. If we look at it on an annual basis the benefit that a 
Medicare beneficiary would get, for instance, in Nebraska or Iowa or 
Oregon, ti would be in this range, below $4,000 on an annual basis. In 
some parts of the country it is $6,000. The average is about $4,500.
  But look at what happens over time as you go out to the year 2002. If 
nothing changes in Medicare, you can see that the difference between 
these two increases over time.
  Let me just show you how this affects my particular State. The dark 
blue areas are counties that are more than 30 percent below the 
national average. Light blue is 20 to 30 percent. I practiced medicine 
for a while in the State of Oregon. Oregon has been very efficient in 
their health care. Look at the State of Oregon, for example; the whole 
western part of the State is reimbursed at levels 30 percent or more 
less than the average. Our plan addresses this inequity because it 
immediately bumps up the baseline, the minimum amount that any county 
could receive.
  Some counties in Nebraska, for instance, receive $170 or $180 per 
month. That is immediately increased to $300, the next year to $350, 
and when you get that initial bump up to a minimum floor, then you have 
a differential rate of growth from those countries at the top compared 
to those at the bottom. The ones at the bottom will grow over the next 
7 years at twice the rate as those at the top. So the ones at the top 
are still growing. They are still getting more each year, but the ones 
at the bottom are growing a little faster. And so what that means then 
is that over a period of time you narrow the difference between those 
counties that have very low reimbursement rates now and those that are 
very generous.

  This is just one of the small details in the Medicare plan that we 
have passed that improves the system and will improve it for everyone 
across the country.
  Mr. SHAYS. I would just make a point that in representing an urban 
area, it was hard for me to comprehend at first that there would be 
such a low reimbursement to rural areas, and as this gentleman and some 
of your colleagues from rural areas pointed out to those of us from 
urban areas, that we had to deal with this issue. I think we have made 
a very good-faith effort to try to deal with this inequity. That is one 
area that we looked at.
  Another area I would love to focus in on before our time runs out is 
that health care fraud, which is pretty rampant, has been a State-by-
State process. In our legislation, for the first time we make it a 
Federal offense to defraud both Medicare and Medicaid and CHAMPUS. 
CHAMPUS is the Federal program for our military and some other Federal 
employees. And for the first time we are making a concerted effort to 
deal with the State-by-State fraud and have a more greater team effort 
to go after this fraud.
  I do not know if my colleague would like to speak to this issue as 
well.
  Mr. GANSKE. One of the provisions in our plan says that if a Medicare 
beneficiary identifies an area of fraud or abuse, that they can 
participate in recovering some of the cost.
  Mr. SHAYS. It is astounding when we find out what some of the fraud 
is. Some of it is perceived to be in a mistake where they were sent a 
$16 bill, it turned out to be $160 or $16,000, or a man being charged 
for giving birth to a 

[[Page H182]]
child, just things that were so preposterous, but not, frankly, all 
that uncommon.
  Mr. GANSKE. One of the things that is currently happening in the 
Medicare Program is a trend toward increased utilization or increased 
opportunity for health maintenance organizations. This is happening. It 
is going to continue to happen, whether there is any change in the 
Medicare Program at all. But as the gentleman knows, we were aware of 
this, and we put in some significantly stronger patient and consumer 
protections in this bill in terms of notification, in terms of making 
sure that senior citizens cannot be taken advantage of by certain 
health plans.
  I mean, there are a lot of good things in this bill, not the least of 
which has been discussed earlier this evening by the Members of the 
opposition party, related to medical savings accounts. This is one of 
those options that a senior citizen can use if he wants to. It is not 
for everybody. But it is something that is reasonable for people to 
think about. The way that it works is this: You receive a set amount of 
funds from which voucher you can then purchase a high deductible 
insurance plan. With the difference between what the plan costs, you 
can then put that amount into a savings account to pay the deductible. 
However, what you do not use stays and grows in that account, which is 
your account. And if you maintain a certain balance, then you can use 
that for additional medical provisions, if you want to.

                              {time}  2245

  Mr. SHAYS. If my colleague would yield, I have a number of 
constituents who manage their own care and manage their own health. 
They do not smoke, they may not drink, they try to lead healthy lives. 
They are a tremendous savings to our country because they are in fact 
healthier people.
  Mr. GANSKE. If the gentleman would yield, those individuals who live 
healthy lives would then be able to purchase plans at less cost, 
because they would have less risk. Therefore, their healthy behavior is 
rewarded. That is part of personal responsibility. I think that this is 
something that is not for everyone, but I believe that what it does do 
is to reestablishes a connection between the payer and the recipient.
  If somebody else pays for something, then you are never as concerned 
about what it costs. But if this is coming out of your account, you now 
have a personal financial interest in making sure that you are getting 
good value for your dollar, for your health care dollar. That means you 
are going to look at your bills.
  For instance, that will mean if you are going to a family 
practitioner for a routine checkup, you may find that the family 
practitioner on one side of the street charges $20 for a visit, the 
family practitioner on the other side charges $25. If they give 
equivalent care, now you have a personal interest in being a good 
shopper.
  I have had many Members of the opposition side say ``I don't think 
senior citizens can do that.'' It is sort of like they do not think 
senior citizens are capable.
  Let me tell you, a lot of the senior citizens I know know exactly 
where the grocery bargains are. They are good shoppers. They have a 
network. They communicate with each other when they get together for 
coffee as to where is the best place to go. ``Did you know they are 
having a sale there?'' That kind of information will be spread around. 
I have confidence in senior citizens to be able to make wise decisions 
for themselves.
  Mr. SHAYS. My colleague, what we have been talking about is one of 
the many plans that are part of our Balanced Budget Act which the 
President vetoed. We have some major differences with the President on 
Medicaid and on Medicare. He has some differences on whether or not to 
have tax cuts and where. We do not yet see his plan, and we are waiting 
for his plan.
  But we have been very strongly criticized by some on the other side 
of the aisle that talk about a ``cut'' to Medicare. What we have talked 
about is the fact Medicare is going up from $4,800 per beneficiary to 
$7,200. We have talked about the fact there are no copayments, no 
deductions, the premium stays the same.
  We are going to have a higher premium for the wealthier. The most 
affluent will pay more on Medicare Part B, something the colleagues on 
the other side of the aisle advocated, but now criticize. We are 
slowing the growth to a significant increase of 7.2 percent. Only when 
you spend 7.2 percent more each year do some, and only in this city, do 
they call it a cut.
  Now we have talked about now a plan that has choice, yet you do not 
have to choose if you do not want. You can stay where you are. We have 
talked about the fact you have been trying for a number of years and 
have been critical, first when you were not part of Congress, to get us 
to address the fact that some counties do not get the kind of payment 
allotted for Medicare that they deserve to, and there is this 
extraordinary disparity, and the only way choice is ultimately going to 
work is increase what we do in rural areas. We dealt with that.
  We have made significant changes to get at fraud, waste and abuse, 
and that we are allowing this choice for all our seniors.
  So I am very proud of this program. I hope we do not change it much 
from what we have proposed. I believe we need to spend more on Medicaid 
than we have appropriated, but I think our Medicare numbers are pretty 
good. I hope when the President finally does his job and comes in with 
a budget, he recognizes that we have $12 trillion to spend in our 
overall budget in the next seven years. And it is an issue of how he 
wants to spend $12 trillion and how we want to spend it. If we do 
nothing, we will spend $13.3 trillion and continue to have deficits ad 
infinitum.

  Mr. GANSKE. If the gentleman will yield, let us put this on a common 
basis and tie this back in with senior citizens, because senior 
citizens have children and they have grandchildren. Their grandchild 
who is born today inherits $187,000 worth of debt, just interest 
payments in his lifetime.
  The facts are staggering. A 21-year-old today faces a bill of 
interest payments of $115,000. Senior citizens tell me, look, we are 
willing to do our fair share, and it is a matter of what is fair when 
we look at this? But this is so important, because I agree with what 
you said earlier. We have a chance here to do something good for the 
country that does not come around very often. It may be our last chance 
to do this.
  If this balanced budget work fails, then I think the message will be 
to Congresses not to try it. Do not take on a difficult job. Just kind 
of go along until we reach a crisis.
  What we are really talking about now is the ability of a democracy to 
look ahead and see a problem coming, of knowing that this problem is 
coming. But it is not quite yet the crisis that throws all the economy 
into disarray, where it is not quite at the point where we would see 
500 or 1,000 percent inflation in one year. But we can see that coming 
if we do not address this issue.
  So the question is, can a democracy gather itself together, do 
something that is not easy, when you have not got your back totally 
against the wall like it is going to be in about 15 years?
  Mr. SHAYS. Well, I know that you are a newer Member of Congress, and 
I know that you decided to run because you looked at how you saw 
Congress operate and said how can grown men and women fail to get our 
financial house in order? And that is what we are about.
  I have had constituents who said to me, how could you shut down the 
government? Well, part of the government is shut down, and the reason 
it is shut down is that the President has vetoed some budgets that we 
have given him, that he has not given us a balanced budget, and we are 
determined basically for the long haul to seek a balanced budget. We 
are not going to miss this opportunity. We are going to pursue it.
  I had some Members say to me, well, the polls say the President is 
taking the right position and Congress is taking the wrong position. It 
is interesting when we get in the polls. I will make two points.
  One is that the Time Magazine, when they did a poll, said that just 
recently in the last edition, 47 percent feel we are ``cutting too 
much''; 46 percent said we were cutting just right on or not enough. 
When they learned in fact Medicare was going to grow per beneficiary 45 
percent, that Medicaid was 

[[Page H183]]
going to grow significantly, that when they learned that the Earned 
Income Tax Credit goes from $19 to $25 billion, the school lunch from 
$5 to $6.8 billion, student loan from $24 to $36 billion, a 60 percent 
increase, Medicare from $178 to $289 billion, when they learned that; 
in other words, when the pollsters go back, they realize that there is 
a shift. And then two to one they say we are cutting just about right 
or not enough, when they realize in fact we are not doing the kind of 
cutting that they think we are doing.
  I will just make this last point, if I could. I have been asked about 
the polls. I have answered it this way. If Abraham Lincoln during the 
height of our crisis in the battle between the North and the South on 
whether we would be one nation, under God, indivisible, if he had taken 
a poll and he has responded the way the press has asked us, how can you 
continue when the polls say this, when Abraham Lincoln was President, 
it was clear that most Americans did not support the war during the 
first few years. They wanted the way to end, and they wanted him to 
settle.
  But he did not listen to the poll, thank God, because if he had, we 
would be not one Nation under God, indivisible; we would be two 
nations, and we would be very much divided.
  So for me the polls ultimately will happen this November, and I can 
say, I am very willing to sink or swim on this issue, to live or die, 
to be reelected or not. I am willing to face what my constituents say. 
If they do not feel we need to balance this Federal budget and get our 
financial house in order and they disapprove of the way we are 
proceeding, then I am out of sync with the constituents I represent. 
Then I do not deserve to be reelected. But for me, this is something 
that comes from my heart and my mind. I believe in it with all my heart 
and soul, and I am very willing to live with the consequences, whatever 
the consequences may be.
  Mr. GANSKE. Mr. Speaker, if the gentleman would yield, people ask me 
why is Congress being so strong on this? Many of my constituents say 
hold the line. They understand. But others say, ``Maybe a balanced 
budget is not so important.'' This is what I tell them. For the last 25 
or 30 years, the average income family in this country has stagnated. I 
mean, you can talk to the President of the AFL-CIO. He will tell you 
exactly the same thing. Part of that is because in 1950, the average 
income family was sending 5 percent of their income to Washington for 
Federal taxes, and today the average income family is sending over 25 
percent of their income. That means to Washington for Federal taxes 
alone. That is not counting State and local property taxes. So it means 
almost they have to work until July 4 before they can start to work for 
themselves each year. That is not the rich, that is an average income 
family.

  So what we know will happen is that if we can balance the budget, 
when the government does not take so much of the discretionary income 
into itself, that leaves more out there. There are more jobs. We are 
talking about 5 to 6 million more new jobs in the next six years if we 
balance our budget. We are talking about interest rates dropping 1\1/2\ 
to 2 percent. For a young couple buying a $75,000 home, at 2 percent 
lower interest rates on their home, on their 30-year mortgage, they 
save $36,000. If a young person buys a car for $12,000 and their 
interest rates are 2 percent lower, they have just saved almost $1,000 
on their car. That means if we balance the budget, family incomes will 
go up, there will be more jobs, the economy will grow. But let me just 
read to you what will happen if we do not balance the budget.
  On November 2, this year, Alan Greenspan, the Federal Reserve Board 
Chairman said:

       If for some reason the political process fails and a 
     balanced budget agreement is not reached, it would signal 
     that the United States is not capable of putting its fiscal 
     house in order, with serious adverse consequences for 
     financial markets and economic growth.

  Then he goes on to say:

       I think if you don't balance the budget, we would find that 
     with mortgage rates higher and other related rates moving up, 
     interest sensitive areas of the economy would begin to run 
     into trouble.

  Now, that is a remarkable statement for the Federal Reserve Board 
Chairman to make. That is about as strong a statement about what bad 
things will follow if we do not balance the budget as you will ever get 
from an economist.
  Mr. SHAYS. And some people are not listening.
  Mr. GANSKE. And some people are not listening.
  Mr. SHAYS. I have had Mr. Greenspan come before my Committee on the 
Budget, and Mr. Greenspan was asked one time, do you think Congress 
will cut too much? And his answer was this: ``Mr. Congressman, I don't 
go to sleep at night fearful that when I wake up the next morning 
Congress will have cut too much.''
  Given the battle that we have had with some of our colleagues on the 
other side of the aisle, I understand his lack of concern on that 
issue.
  But we know right now that interest rates have come down in the 
expectation that we will win this battle to balance our Federal budget 
and get our financial house in order. If we fail, there is no doubt in 
anyone's mind what the bond market will do, what the stock market will 
do, and ultimately what will happen to our economy.
  Mr. GANSKE. Some people will say, oh, that is just economics. But 
those are economics that affect real people. I have a lot of farmers in 
my district. They run expensive farm operations. It costs a lot to run 
a farm these days. Most of them do not have the kind of capital to 
finance, so they have to take out loans to buy their seed, their fuel, 
to put in the crops. I will tell you, every farmer in my district 
understands very well the benefits that will accrue to them if we 
balance the budget, and they understand full well what the bottom line 
will be for them if we do not balance the budget.
  Mr. SHAYS. Whether it is a farmer that has to invest in new 
facilities or new equipment for their farming or a businessman in some 
of the urban areas, or businesswoman in urban areas I represent, they 
look at the cost of money, and then they say ``If I build this new 
plant and equipment and hire these workers, will I get a return?'' The 
higher the interest rates, the less building of new plant and equipment 
you have and the purchase of new plant and equipment.
  I know we have about 4 minutes left before we conclude. I would just 
like to reiterate the fact that we are looking to balance our Federal 
budget and get our financial house in order. We are looking to save our 
trust funds, particularly Medicare, from insolvency and ultimate 
bankruptcy. And the third thing we are looking to do is to transform 
our care-taking social and corporate welfare state into a caring 
opportunity society. This is our objective.

                              {time}  2300

  We are asking the President and hoping that he keeps his word to 
ultimately come in with a balanced budget, scored by the Congressional 
Budget Office, using real numbers. We are not saying he has to agree to 
our tax cuts. We are not saying he has to agree to our Medicare 
Program, our Medicaid Program, or what we have done in discretionary 
spending or with food stamps or whatever else that we have set our 
priorities. We are saying to the President to set his priorities. Where 
we agree, then we can simply say there we agree; where we disagree, 
then we work out our differences.
  I believe if the president were to submit a balanced budget, in a 
very short period of time we would come to an agreement. I know Mr. 
Ganske, and I certainly know it for myself, we will not be happy with 
every part of that agreement, but we cannot be happy with every part of 
an agreement where we are compromising.
  I think we need to ultimately find common ground. I know the 
gentleman has worked with other people, people on the other side of the 
aisle to find areas where we can agree. We are reaching out to our 
Democratic colleagues, because, clearly, we are Members of Congress. We 
are not Republicans first or Democrats first. We are Americans first, 
looking to get our financial house in order not in the short run but in 
the long run for the good of our children.
  Mr. GANSKE. If the gentleman would continue to yield. Again I will 
bring this all the way around the circle back to the furloughed 
government workers. One thing should be known, and that is that, at 
least in my district, there is a 

[[Page H184]]
Federal credit union that is open and available to provide interest 
free loans to Federal employees if things are pretty tight.
  I certainly would like to get my Federal employees back to work as 
soon as possible. I think that I will only speak for myself, I am not 
speaking for the Republican conference when I say this, but if the 
President would truly bring to the table a balanced budget, that is 
certified as balanced by the Congressional Budget Office, and if there 
are not any funny gimmicks in it, then I personally would consider that 
to be a good faith effort on the part of the President.

  Mr. SHAYS. And so would I.
  Mr. GANSKE. And I personally think that that would be the time then 
that we should bring the Federal employees back.
  I think it should be noted, though, that I am not saying that the 
President has to agree with our plan. I am not saying we have to come 
to agreement on that. All that I personally would ask is that the 
President finally honor his commitment and bring a plan, his own plan 
to the table, so that we could get on with the job of comparing apples 
to apples and oranges to oranges in this budgetary process.
  It is hard to make progress unless the President makes that first 
step and honors the signature he put on the line.
  Mr. SHAYS. The commitment that the gentleman has made is one that I 
share. The President submits the balanced budget, scored by the 
Congressional Budget Office, using real numbers, not necessarily our 
numbers, his numbers, his priorities, and then we know that we can go 
to our conference in good conscience and say that we need a temporary 
continuing resolution.
  I want to inquire of the Chair. I know we were given 55 minutes. We 
are prepared to speak a little longer or we are prepared to end our 
discussion.
  The SPEAKER pro tempore. The gentleman has 6 more minutes unless the 
other party shows up.
  Mr. SHAYS. I understand.
  Mr. Speaker, I am happy to yield back to my colleague.
  Mr. GANSKE. And I would just like to point out some of the facts 
versus the myths that we have heard so much of over the last several 
weeks.
  The first myth is this: Congress' budget is cutting Medicare 
spending.
  Mr. SHAYS. Not.
  Mr. GANSKE. What is the fact? What are the numbers in the last 7 
years we spent? $926 billion. And we propose spending $1,600 billion in 
the next 7 years.
  Mr. SHAYS. Sounds like a significant increase.
  Mr. GANSKE. Myth: Congress' budget guts student loans. What is the 
fact? The fact is that in 1995 we spent $24 billion; in 1996 we spend 
$26 billion; in 1997, $28 billion; 1998, $30 billion; 1999, $32 
billion; in the year 2000, $33 billion; the year 2001, $34 billion, and 
we end up spending $36 billion a year in the year 2002. Every year it 
increases.

  Mr. SHAYS. And the total increase, if I might add, of 50 percent 
during that time. From $24 billion to $36 billion. Only in this city 
would someone call that a cut.
  Mr. GANSKE. Let us talk about the next myth. The next myth is 
Congress' budget makes draconian cuts in welfare funding. I think I 
have heard that word draconian about a thousand times in the last 3 
weeks. Well, how much did we spend on welfare in the last 7 years? We 
spent $492 billion. How much do we propose spending in the next 7 
years? This will just flabbergast most of the viewers. We propose 
spending $838 billion.
  Mr. SHAYS. I wonder if the gentleman could give me those numbers 
again? This is on welfare?
  Mr. GANSKE. This is on welfare reform. Spending on welfare. And this 
is a combination of the welfare programs. And this is a combination of 
the welfare programs. In the last 7 years we spent $492 billion. We 
propose in our budget spending $878 billion. That is an increase, 
folks, of $386 billion in welfare spending.
  Mr. SHAYS. Another myth?
  Mr. GANSKE. If we go from 492 to 878, I do not know anyone in my 
district that calls that a decrease.
  Mr. SHAYS. My colleague has pointed out a number of myths. We have 
presented our program. We are proud of our program. We are looking to 
the President to be an author and not just a critic.
  We stand ready to work with the President and with our colleagues on 
the other side of the aisle to have a true balanced budget.
  With that, Mr. Speaker, I would be more than happy to yield back the 
balance of our time.

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