[Congressional Record Volume 142, Number 10 (Thursday, January 25, 1996)]
[Senate]
[Pages S374-S376]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            BALANCED BUDGET

  Mrs. HUTCHISON. Mr. President, I thank the Senator from Massachusetts 
for yielding the rest of his time, because I want to talk about the 
very important issue that I think all Americans are looking at right 
now, and that is the balanced budget and what is going to happen here 
and what will be the result after we finish the negotiations.
  The great philosopher, Yogi Berra, once said, ``When you come to a 
fork in the road, take it.''
  We are at a fork in the road in this country, and I think the 
American people are beginning to see how very difficult it is when you 
have a President and Congress on very different tracks, on very 
different tracks about what they believe is the right course for our 
country.
  We in Congress believe that we must change the direction of our 
country, 

[[Page S375]]
that we have been hurling, in deficits upon deficits upon deficits, our 
economy into oblivion.
  So we promised in 1994 that we would change the way they do business 
in Washington, that we would stand firm for a balanced budget. And now 
we have put forward a very responsible plan to do exactly that.
  Our balanced budget is over 7 years. Many of us go around the country 
talking about 7 years. Why 7 years? Why not 5 years? Why not 10 years? 
Would it be easier if it were 10 years?
  Seven years is very important, because 7 years was what we reasonably 
believed we could achieve with numbers that we could estimate with a 
prediction that would be reasonable. We believe that we can predict 
over 7 years. Any more than that would be very hard.
  There will be changes in Congress. Will there be the same commitment? 
Will the promises be the same? Those would be the questions if we went 
beyond 7 years.
  Why not shorter? Why not 5 years? We believed that cutting spending 
and cutting the rate of growth of spending in such a drastic way might 
hurt our economy by causing a recession, having some sort of drastic 
impact. That is why we believed 7 years was achievable by slowing the 
rate of growth rather than cutting spending in such a harsh way that we 
might have a recession, but yet to be predictable. That is why 7 years.
  Now we have the nugget of the problem. The nugget of the problem is 
what we are going to do with Medicare, Medicaid, welfare reform, and 
the tax cuts. I think you have heard people speaking on the floor in 
both Chambers of the Congress for the last few days about the tax cuts. 
Some people think they are terrible. Some people think it is awful to 
consider giving money back to the people who earned it. I do not 
subscribe to that theory, but it is one of the nuggets upon which the 
President and the Republicans in Congress disagree. So let us talk 
about these nuggets.
  The President says we can come together on the numbers if we can just 
put aside welfare reform, Medicaid reform, and Medicare reform. I think 
the President of the United States knows that if you put aside those 
three items, you are not going to be able to talk about taking the 
first step to a balanced budget, because if you do not reform the two 
basic entitlements, Medicaid and welfare, you will not have a balanced 
budget.
  It is not a matter of how much we spend, it is a matter of who makes 
the decisions. Is it going to be the Federal Government dictating to 
the States, or is it going to be the State's right to decide what is 
best for the people of that State and to have the money from the 
Federal Government without the strings so they can do it more 
efficiently? That is the only way it will work.
  But the President believes that we must keep welfare and Medicaid 
with the Federal strings. He will not allow entitlement reform, and 
that is the crux of the disagreement between the President and 
Congress. We cannot set those things aside and have any predictability. 
So we are saying, give Medicaid to the States to produce their own 
programs in the most efficient way, and we are giving the President the 
ability to change our welfare system in a most responsible and unique 
way. And that is to turn it back to the States with very few strings, 
and the strings are that there will be limitations on how long an able-
bodied person can receive welfare. It would be 18 months and a lifetime 
limitation of 5 years.

  I know a number of people who are barely making ends meet. It is very 
important for these hard-working, taxpaying citizens to know that if 
they are going to work hard to do something for their families that 
they are not supporting people who can work but do not. Mr. President, 
that is the welfare reform package.
  The President vetoed our welfare reform package, but we have not seen 
a substitute from the President. If he is going to take off the table 
that we would have entitlement reform, then we will not be able to have 
welfare reform because it will continue to grow out of control, just as 
it has for years in this country.
  Tax cuts--that is the other major issue, that and Medicare reform. 
Let us talk about Medicare reform because that is the third piece of 
the reform package. We are trying to save the Medicare system. The 
President's own Cabinet officers have said publicly we start this year 
going into a deficit in our Medicare system. This year we will spend 
more than we take in, and we will use up the trust fund by the year 
2002. Now, that is the fact.
  So what can we do to save it? In fact, we are slowing the rate of 
growth of Medicare at an even slower rate of growth than the President 
presented himself in his own health care plan. We are going to save the 
Medicare system if the President will work with us. So far, he has 
refused to do that.
  Now let us talk about tax cuts, the other issue upon which we 
disagree so strongly.
  I think it is a legitimate question, why tax cuts when we are trying 
to bring down the deficit? It is all part of the package that would 
ease the impact on the economy. If we are going to slow the rate of 
growth of spending, that is going to have an impact on the economy. It 
is going to stop spending in some areas to which people have become 
accustomed. People who provide these services are going to get less.
  So in order to ease that transition, we have decided to put money 
back in the system, not by more Government programs but by giving 
people back the money that they earned. We are letting them have the 
right to spend their money. And by allowing them to do that, we will 
spur the economy, where we have slowed it down in the slowing of the 
rate of spending. So we now have tax cuts that will go to the middle-
income families of this country--a $500 per child tax credit. So a 
four-person family with two adults and two children will get $1,000 
back in the mail. Now, that is going to help them be able to spend that 
money for their families.

  Capital gains tax relief. We are trying to spur the economy by 
allowing people to sell assets and trade assets, and that is going to 
put more money into the economy. All of the economists agree on that. 
It will put money and investment into our capital, so that we will be 
able to have the jobs that that will create. We are going to spur jobs 
by having capital gains tax relief.
  The third area is one that I have worked on since I came to the U.S. 
Senate, and that is equity for our homemakers in this country for their 
retirement security. We talk about the importance of the work done 
inside the home. Mr. President, I think the work done inside the home 
is more important than the work done outside the home. Yet, we say to a 
homemaker, ``You cannot set aside $2,000 a year like those who work 
outside the home are able to do.'' So the homemaker, who is sacrificing 
to stay home and raise children will have the added disadvantage of not 
having the security in retirement that can be built up with the full 
$2,000 set aside; or if the homemaker loses his or her spouse after 15 
or 20 years of marriage, there he or she is without that security in 
his or her own name that would allow that security to be there for 
their futures.
  Mr. President, that is why we have tax cuts, so that we can provide 
more of an incentive for people to save. We have a new IRA that would 
apply to homemakers, as well as those who work outside the home, so 
they could put money aside that will build up tax free, and when you 
take it out, you will not have to pay taxes on any of that income. Now, 
that will be a spur for retirement security for our seniors. When you 
put that incentive in, now you are going to have the ability for people 
to take care of themselves better in their retirement years. Mr. 
President, that will make for a more stable America.
  So we are fighting for a strong and stable America. We are really 
fighting for what made this country strong in the first place. Strong 
families built this country. If we are able to give tax breaks to 
families and more incentives to save for retirement security, that is 
going to strengthen the American family. That is one of the good 
results of tax cuts and allowing people to spend more of their own 
money.

  So, Mr. President, we are at a fork in the road and we have a choice. 
We are standing for getting this country back on the right road so that 
we will have a strong America and the opportunity that a strong America 
will give for our children. 

[[Page S376]]

  Mr. President, that is what the budget fight is about. That is why it 
has been so difficult, because our vision for the future of our country 
may be the same as the President's vision, but our ways of getting 
there differ greatly.
  We believe that the only way we can make our country strong again is 
to stand firm for a 7-year balanced budget, with help for our families, 
giving incentives to people to save and invest, and giving people back 
the money they worked so hard for. Mr. President, we are standing for 
the hard-working, taxpaying, middle-class people of this country that 
deserve a break, and we are trying to give it to them. That is what 
this impasse is all about.
  Mr. President, I yield the floor.
  Mr. CHAFEE. I ask unanimous consent that I may be permitted to 
proceed for 10 minutes as in morning business.
  The PRESIDING OFFICER (Mr. Jeffords). Without objection, it is so 
ordered.

                          ____________________