[Congressional Record Volume 142, Number 7 (Monday, January 22, 1996)]
[Senate]
[Pages S179-S181]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    CONCERN OVER FAILED BUDGET TALKS

  Mr. SPECTER. Mr. President, during the course of the past several 
weeks, there has been an opportunity to talk to constituents at home to 
discuss the problems in Washington, DC, and, as many of my colleagues 
have reported, I have found great concern about the inability, the 
failure, of the negotiators to come to an agreement on the budget 
talks.
  I urge the negotiators to continue to talk. As I have reviewed the 
details as to what has been undertaken, talking to my colleagues in the 
Senate and the House, talking to administration officials, it is my 
view that the parties are not too far apart. I believe that the absence 
of an agreement is a lose-lose situation for everyone in Washington. 
There is no real opportunity, as I see it, for political advantage, and 
the American people watch what goes on in Washington, DC, with 
amazement and frequently revulsion at our failure to come to some 
terms.
  I go back to a wise statement made by the former distinguished 
Senator from Maine, Margaret Chase Smith, who said, ``We have to 
distinguish between the compromise of principle and the principle of 
compromise,'' and when we are talking about the budget issues, we are 
talking really about compromising mostly on a dollars-and-cents basis.
  There are some structural issues which have to be addressed, and it 
is my sense that they can be solved as well, but we are not talking 
about first amendment issues, freedom of speech, or freedom of 
religion, so we are not compromising principle. We do have to have the 
principle of compromise and accommodation in Washington, DC, to come 
out of this matter.
  As I look at the figures overall, the parties have come much closer 
together than they were at the original stage. With respect to 
Medicare, initially the conference report adopted by the Congress 
called for cuts in Medicare of $270 billion, with the administration at 
one point insisting that the cuts--rather it is not cuts, but it is a 
reduction in the growth of increase. That is a characterization which 
is very, very hard to avoid.
  Before going further on that point, Mr. President, let me cite some 
statistics which are very, very frequently overlooked as too often the 
Medicare situation and the Medicaid situation has been characterized as 
proposals, especially by the Republican Congress, for cuts when the 
fact of the matter is that there are very, very substantial increases. 
What we are really talking about is slowing the rate of increase.
  In fiscal year 1996, for example, Medicare expenditures will be $193 
billion. These are figures from the Congressional Budget Office which 
have been rescored as recently as last month. After an expenditure of 
$193 billion in 1996, the figures are as follows: 1997, $207 billion; 
1998, $218 billion; 1999, $229 billion; the year 2000, $248 billion; 
2001, $267 billion; 2002, $289 billion. So that from 1996 until the 
year 2002, on Medicare expenditures it is projected to move from $193 
to $289 billion for a 50-percent increase.
  Similarly, in Medicaid, where there is frequently talk about cuts, 
there are, in fact, not cuts but there are increases. What we are 
dealing with is trying to slow the rate of increase. In fiscal year 
1996, Medicaid expenditures totaled $97 billion; 1997, $104 billion; 
1998, $109 billion; 1999, $113 billion; the year 2000, $118 billion; 
the year 2001, $122 billion; the year 2002, $127 billion, for a total 
increase from 1996 to the year 2002 of some 31 percent.
  I think it is very important to focus on that basic fact. There are 
not cuts, but what we are talking about are ways to slow the rate of 
increase. As the negotiators have discussed the matters, they have come 
much closer together. 

[[Page S180]]
 In the original conference report agreed to by the House and Senate, 
the rate of increase on Medicare would have been slowed by some $270 
billion. The initial position taken by the administration was to slow 
the rate of increase by $102 billion. Now, in the most recent proposals 
advanced by the negotiators for the Congress, as recent as January 6, 
the figure is cutting the rate of increase to $168 billion, and the 
administration now talks about cutting the rate of increase to $124 
billion. So the gap has been very, very materially narrowed. 
Originally, the gap was $168 billion. Now it has been narrowed to $44 
billion.
  Similarly, on cutting the rate of increase in Medicaid, the original 
conference report from the House and Senate placed the curtailment of 
the rate of growth by $133 billion. In the most recent negotiations 
advanced by the congressional negotiators, the rate of increase was at 
$85 billion, with the administration at $59 billion. So, there again, 
the figures are much, much closer.
  Similarly, on the tax cut, the original conference report was at $245 
billion. That has been reduced to $203 billion, with the administration 
at a tax cut of $130 billion, so that difference has been narrowed 
quite considerably.
  When we talk about the objective of a balanced budget, we are talking 
about something which is really critical for the future financial 
stability of this country. That is an objective which is very important 
to reach and is worth an accommodation. When this body, the U.S. 
Senate, took up the reconciliation bill, this Senator was very 
concerned about a number of items in it and disagreed with the majority 
on many of the items. For example, it seemed to me that there ought not 
to be a tax cut at all. I took that position not because I did not want 
a tax cut, because I would very much like to see a tax cut. I favored 
the IRA's, the independent retirement accounts, when we voted them out, 
back in 1986. I would like to see a child tax credit. But at a time 
when we are seeking to balance the budget, it seems to me it is 
inappropriate, when we are asking so many Americans to tighten their 
belts, to talk about a tax cut for some Americans at the same time. It 
is my view that Americans are willing to have shared sacrifice and to 
balance the budget so long as it is fair. But when we are asking 
people, with the earned-income tax credit, earning about $20,000, to 
pay more taxes at a time when we are offering certain tax cuts to those 
who earn $120,000, then it is bad public policy, and it is very bad 
politics.
  So that when many accommodations have been made and many of us have 
seen the reconciliation bill come for final passage, with many 
provisions that individually we did not like, nonetheless we supported 
that with a majority vote. After having voted against many of the 
individual items, I voted for final passage because I think the 
balanced budget is that important. I understand there are many in 
Congress, some in the Senate and even more in the House, who do not 
like the present arrangement and who want to have more by way of tax 
cuts and who want to have more by way of decreases in Medicare and 
Medicaid, on their rate of increase. But I believe that the balanced 
budget is so important that when the administration agreed to the 
balanced budget in 7 years with the Congressional Budget Office 
figures, that was the time to declare a victory, to say we will accept 
the deal, and then to work out the balance of the arrangements as best 
we could. But the core of the arrangement was in place. I believe we 
ought to do that yet. That ought to be our principal objective, to 
obtain the balanced budget within 7 years.
  We are talking about structural changes in addition, but I believe 
that they are not well understood. After talking to key people in the 
administration as well as my colleagues in the Congress, going through 
these structural changes, it is my view that there can be a reasonable 
accommodation. I am in the process of putting together a side-by-side 
comparison, which I will share with my colleagues in the course of the 
next several days, with a suggestion as to what ought to be middle 
ground.
  There is a philosophical difference between the block grants, where 
we give more authority to the States, and the categorical requirements, 
where the Congress of the United States establishes the rules and 
regulations. My own sense is that it is time to give more authority to 
the States under the 10th amendment, that the States are much closer to 
the problems than we are here in Washington, DC. I am going to talk 
about that in a few minutes under a separate topic on the problems of 
the disaster across the northeastern part of the United States, and 
especially my home State of Pennsylvania, why disaster relief could be 
much better handled at the local level than out of Washington, DC. But 
I think we see opportunities to do that, especially in the welfare 
line, where the Senate passed a welfare reform bill with a very, very 
substantial majority, and we had block grants on AFDC and emergency 
assistance and the jobs program into a single mandatory block grant. We 
had separate allocations for child care. We had the maintenance of the 
foster care and the adoption system which is retained as an 
entitlement. But I believe as we go through these lines one by one on 
the many considerations as to how we deal with the illegal immigrants, 
how we deal with children under SSI, addicts under SSI, teen mothers, 
how we deal with education under the student loan provisions and the 
direct lending programs, and what we are going to do with many of these 
structural matters, that there is middle ground. There is middle ground 
on allowing flexibility to the States on many of the items and 
retaining congressional control on specific requirements as to some 
others. But we are at this point very, very close and yet very, very 
far.

  Last week on the Senate floor I made a few comments about the 
necessity to continue funding the Government with a continuing 
resolution without another threat of a shutdown on the Government, and 
that if, in fact, we are ultimately unable to come to terms on a budget 
agreement, that I believe today, as I articulated on this floor from 
this podium back on November 14th on the second day of the first 
shutdown, that we ought to crystallize the issues and submit them to 
the American people in the 1996 election. But the way to do business is 
not to have a shutdown of the Federal Government which makes the 
Congress and the administration really the laughingstock of the 
country.
  At that time, I expressed the hope that we would not use the debt 
ceiling as a lever, as a blackjack, or as blackmail; that the full 
faith and credit of the United States is too important to be 
maintained, so that it ought not to be used to try to coerce 
concessions from the administration in the context of political 
blackmail; that the American people can well discern the difference 
between legitimate political pressure and what is political blackmail.
  One of the illustrations is from the very famous statement by former 
Supreme Court Justice Potter Stewart about obscenity, saying that he 
could not define it but that he knew it when he saw it. Or I think of 
the famous statement by Justice Oliver Wendell Holmes that even a dog 
knows the difference between being kicked and being stumbled over. When 
there is inappropriate political pressure, when it is political 
blackmail by coercing the Federal Government, or political blackmail by 
attempting to have the debt ceiling as a hostage, the American people 
are well aware of what is going on. And although some in this body and 
some in the other body may have thought that there was political 
advantage to closing the Government, the American people responded with 
a resounding no.
  With the polls showing that more people favor the President's 
handling of the emergency than the Congress, the figures were close. 
But with the Presidential advantage of 50 to 46--50 percent approved of 
what the President did, 46 percent disapproved--when it came to the 
Congress, only 22 percent approved and 78 percent disapproved. So that 
when we were really articulating bad public policy on closing the 
Government, we were articulating bad politics as well.

  So it is my hope that we will not close the Government again, that we 
will have a continuing resolution which will maintain the status quo, 
difficult as that is, without cherry picking and trying to fix some 
programs that some may like better than 

[[Page S181]]
others, because once we get into that kind of a selection process, 
there will be no end to it. If the House sends us a bill financing 
programs which some of them like but eliminating programs that they do 
not like, when the issue comes to the Senate with our opportunity for 
unlimited amendments, we will never agree to that kind of cherry 
picking with financing programs that one group likes and eliminating 
all others; and that we will keep the Government going as it need be, 
crystallize the issue for the 1996 election, and not use the debt 
ceiling as political blackmail.
  But most fundamentally, Mr. President, as I look over these complex 
charts and look over the figures, they are very, very close indeed. And 
even with the structural changes, there is middle ground available.
  So it is my hope that the negotiators will continue talking. There is 
a bipartisan group of some 20 U.S. Senators evenly divided--almost 
evenly divided between Democrats and Republicans--who will seek to come 
to middle ground and to accommodate these differences of opinion, most 
of which boil down to dollars and cents, and structural changes 
themselves boil down to dollars and cents, remembering the foremost 
point that there is agreement on a balanced budget within 7 years with 
the real figures, the Congressional Budget Office figures; and we ought 
to declare victory on both sides, make it a win-win situation, and not 
try to achieve political advantage in the context where it is a lose-
lose for all parties if we continue this stalemate.
  But, as I say, to repeat very briefly, I intend to put before the 
Senate a side-by-side comparison showing how close we are on the 
figures themselves and on the structural changes.

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