[Congressional Record Volume 142, Number 57 (Tuesday, April 30, 1996)]
[Senate]
[Pages S4369-S4375]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE CENTRIST COALITION PROPOSAL
Mr. BREAUX. Mr. President, for colleagues who may be watching by
their TV monitors, Senator Chafee and I have taken this time this
morning to talk, once again, about the so-called Chafee-Breaux centrist
coalition proposal, which I think is monumental legislation in that it
presents to the Senate a way to achieve a balanced budget in a 7-year
period and do so in a bipartisan fashion.
A lot of people have said that something of this nature cannot be
accomplished in an election year. Our operations and the legislation
that we offer proves that it can be done. We have met since October
1995, last year, on a regular basis, sitting down and discussing the
difficult problems that are facing this Congress. It is very clear that
the alternative of doing nothing is not a real alternative.
Unless we get a handle on entitlement spending, and unless we make
major changes in the entitlement programs, our country is going to be
in very, very serious trouble. The alternative, I think, is a bright
future for this country and for our children. With a balanced budget,
people see a number of benefits that are real, that are tangible, that
affect their daily lives--lower interest rates on home mortgages, lower
interest rates on car notes, more spendable money to spend at home on
the things that families need in terms of education and health care.
We have presented a package for our colleagues to consider, and we
hope that after reading our plan, they will join with us in a true
bipartisan fashion and move on and enact a balanced budget in this
Congress. It is not too late. It is only too late if we do nothing. It
is absolutely critical that we take this step in this Congress.
I point out that here we talked about how close we are in the various
proposals. There is much similarity in the administration's latest
proposal and the proposal from the Republicans and the proposal from
our centrist coalition, the Chafee-Breaux proposal. There is no reason
that, with all of these things that we have already agreed on, we
cannot take the next step and work out the differences that still
exist.
All three proposals have a balanced budget using CBO numbers. We save
between $600 and $700 billion over the life of this plan, and we do it
while protecting the needs of the must vulnerable in our country--the
people on Medicaid, Medicare, and welfare. So it is not to say that you
cannot save between $600 and $700 billion and not at the same
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time protect the most vulnerable in our population.
Our Medicare proposal is real reform. It is not just cutting
Medicare, but it is real reform in a major way in the programs, giving
beneficiaries more choices, which will increase the solvency of the
trust funds. We make reductions in spending. It is not as much as some
would like, but it is more than others would like. In Medicaid, we have
worked with the Governors in a bipartisan fashion to come up with our
Medicaid plan, which I think has gotten a lot of support from the
Governors. Democratic Governors have said they would like this to be
done. Republicans, I think, would agree with the direction we are
moving in. It maintains flexibility and some of the standards. It is
basically a Federal program working with the States.
Yes, there should be Federal standards about how the programs are
going to be worked out. On welfare, as President Clinton said, a
welfare reform bill should be tough on work but good for kids. Our plan
does that. Our plan takes care of children. It provides more child
funding for parents who are working, for child care and day care. At
the same time, we have vouchers for children after their parents are
terminated off of welfare. If the parents are able to work, they should
work. Welfare cannot be a permanent way of life. We have time limits.
We have a block grant to the States. Yes, there is more cooperation
between the States and the Federal Government as to what they have to
do.
Yes, we have a tax cut. Some say we need a $245 billion tax cut.
Well, we have a real $105 billion tax cut, with $25 billion of loophole
closings, which I think most people can agree to. We have a tax cut for
families, $250 per child tax cut, which goes up to $500 per child if
they invest in an individual retirement account in that child's name.
We have reductions for education. This is a family friendly tax
proposal in the sense that it helps working families. We have some
alternative minimum tax relief, which many people will agree we should
have. We have a capital gains tax cut, which we think is important to
create economic incentives for individuals and for corporations in this
country.
Finally, we have an adjustment in the Consumer Price Index. A lot of
people said you cannot do that. Well, we have done that in a bipartisan
fashion. Economists who are both Republican and Democrat have told us
that the CPI, Consumer Price Index, which is the vehicle that is used
to project all of the cost-of-living adjustments, is overstating what
those adjustments should be.
So we have taken the step of saying we are going to have a reduction
of five-tenths of 1 percent, one-half of 1 percent for 2 years and then
three-tenths of 1 percent for the remaining years in our budget plan.
That saves $110 billion. For a Social Security recipient, it means,
instead of getting the normal increase, they would still get an
increase in their benefits, but it would be approximately $3 less than
they would normally get per month. But what it does is help save the
system.
I suggest that most people who are on retirement programs would say
it is important to save the system, not only for me as a selfish reason
but for my children and my grandchildren, and we are asking everybody
to have a more realistic adjustment in what their increases should be--
still get an increase if the cost of living goes up, of course, but
guaranteed, guaranteed in a better fashion because the system is going
to be stronger. All of the retirement programs will be stronger and
more solvent as a result of our Consumer Price Index adjustment. People
will get an increase. The increase will be smaller than it might have
been, but the principle is that the formula is incorrect, and we are
trying to correct the formula. What is wrong with that?
So, Mr. President, let me reserve my time and conclude by saying that
there is going to be an opportunity perhaps in the next couple of weeks
to present our budget in this Chamber, to have our colleagues take a
look at it and to, yes, vote for it because we think it truly
represents the only bipartisan effort that has a real chance of passing
and getting the job done.
Mr. CHAFEE addressed the Chair.
The PRESIDENT pro tempore. The able Senator from Rhode Island is
recognized.
Mr. CHAFEE. Mr. President, I want to ask the Senator from Louisiana a
couple of questions, if I might, on my time.
Mr. BREAUX. Sure.
Mr. CHAFEE. I should like to say to the distinguished Senator that I
encounter fellow Senators who say, ``I'm all for your plan except I
don't like the tax cut,'' or, ``I am all for your plan except I don't
like that change in the Consumer Price Index,'' or, ``That's an
excellent plan, but the Medicare number isn't the one I like.''
Now, my question to the Senator from Louisiana is, What other vehicle
is going to be presented that fixes these problems? If they do not
accept our proposal, the proposal of the distinguished Senator from
Louisiana and I and this wonderful group of bipartisan Senators working
with us, if they do not like that, what else has a chance at being
enacted that is going to balance this budget, not only at the end of
the seventh year but in the outyears as well?
Mr. BREAUX. If the Senator will yield for a response to the question,
the Senator has outlined a formula for failure, a formula for disaster.
If every Member comes up and says, ``I like what you have done except
one little item,'' we will never get any agreement. The essence of the
agreement on this issue is a compromise between those who want to do it
all one way or all the other way. So, yes, there will be differences,
as there was--and I know the Senator remembers this--in our own
discussions. The Members said, ``It is a little too far in this
direction,'' or, ``It is not far enough in that direction.''
What we have shown, however, is that you can come together in a
bipartisan fashion and reach an agreement that gets the job done. I
think it is a genuine compromise. That is the only way the job can get
done.
Mr. CHAFEE. The distinguished Senator from Vermont is here and has
some comments on this, and I know he has duties presiding in a few
minutes, so I would like to yield whatever time he wishes.
Mr. JEFFORDS. I thank the Senator very much, my good friend from
Rhode Island. I am pleased to be here again this morning to talk about
the importance of adopting a balanced budget in this Congress.
As the speakers before me have outlined, it is extremely serious, and
this may be the only opportunity we have now that we have a group of
moderates who believe very strongly that there is a solution and that
if we all sit down together and reason, we can have a balanced budget.
I believe that very strongly.
The last time I spoke here, I spoke as a member of the Appropriations
Committee and of the dire need with respect to the ability to
appropriate to bring the entitlements under control. I suggested at
that time that we had some difficult decisions to make in that regard.
In particular, we have to look at the CPI and also we have to look at
entitlements, especially those in the area of Medicaid and Medicare, to
find ways to better handle them so that we do not continue the rapid
increase we have in expenditures, which has made it imperative that we
get together on a balanced budget.
Today I would like to speak to you as the chairman of the Senate
Education Committee. Those of us who depend upon discretionary funds to
accomplish those goals which we have set out look at the future and
realize that with the increasing needs we have because of international
competition in the area of education, there is no way we can reach
those by depending upon our State and local governments to raise those
funds, especially if you take a look at what the present trends show
would be necessary to cut back on discretionary spending, especially
the nonmilitary discretionary spending.
Let me briefly outline to you some of the dire consequences with
respect to education.
On the one hand, we have recognized now for over a decade the
incredible need we have to improve our educational system, in
particular to meet the demands of international competition. Study
after study has shown that if we do not change and improve our
educational system, then in the next century the United States will no
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longer be an economic power but will be a second-rate power.
What is the rationale and what are some of the reasons for that
conclusion? First of all, international studies comparing our young
people with those of other nations have shown that this country, which
has been proud of its educational system, ranks dead last when it comes
to the ability of our young people with respect to mathematics, with
China, a growing economic power, being by far the leader with respect
to education of its students in mathematics.
In addition, even a more horrible situation is the fact of the so-
called forgotten half. The forgotten half are those individuals who are
not college bound. We have not paid much attention to that group. In
fact, studies that have been done by those who measure literacy found
that half of our students who graduate from high school are
functionally illiterate. That has to be turned around.
That is not even taking into consideration the fact that in some
cases up to 30 percent of the students have already dropped out of high
school. If you add those percentages together, you can see that this
Nation's might with respect to education capacity is not there.
What do we do to change that? I am not one who would be up there to
disagree with those who say you just cannot throw money at and improve
education. That is a fact. What you cannot do is say you must cut back
on education. Now we have suddenly gotten the message, at least from
the people as well as from those who are discussing it, that cutting
education is the poorest thing we can do.
But, again, I wish to point out that if we do not do something about
balancing the budget, the impact upon discretionary spending is going
to be so dramatic we cannot escape the fact we may have to start
cutting back on education. That would put this Nation in dire peril.
The public agrees with this; 86 percent say do not cut education, and
80 percent of those who said balance the budget said, yes, but do not
cut education.
Congress heard that message this time, and we were able to escape.
Due to the efforts of the Senator from Maine and others, we were able
to stop, for instance, the tendency to seriously cut back on funding
with respect to higher education. We were able to stop that and to keep
it steady rather than having the dramatic cuts that were suggested by
the other body.
In addition to that, the work of the senior Senator from Pennsylvania
was very dramatic in the final analysis on the need not to cut back on
education, and we finally recognized that we could not and we did not
this time cut education. But the pressures in the future are going to
be very dramatic.
Let me conclude by pointing out again there are dramatic needs in
education that must be fulfilled. For instance, if we were to match
what other countries do with respect to days spent in education--China
spends 250 days a year in education; we spend 180, and all of the other
nations, our international competition in Asia and Europe, average
about 220 days--we would have to appropriate, in order to get even with
the average, some $76 billion to spread over the States. That is just
one example. I could go on.
Let me just stop and say we have an opportunity here through the
leadership of Senator Chafee and Senator Breaux to be able to bring
into check the decrease in the spending of the discretionary funds
which will be necessary if we do not adopt a plan such as theirs.
I commend them for their effort. I intend to work as hard as I can in
order to bring the spending under control so that we do not have to
have the negative impact upon education which we will have to have if
we do not do so.
I yield the floor.
Mr. CHAFEE addressed the Chair.
The PRESIDENT pro tempore. The distinguished Senator from Rhode
Island, Senator Chafee, is recognized.
Mr. CHAFEE. Mr. President, first I would like to thank the Senator
from Vermont for his effective comments.
I notice the senior Senator from Pennsylvania is here. I would be
glad to hear his views on this subject.
Mr. SPECTER addressed the Chair.
The PRESIDENT pro tempore. The able Senator from Pennsylvania,
Senator Specter, is recognized.
Mr. SPECTER. Mr. President, I thank the Chair. I thank my colleague
from Rhode Island for yielding to me, and I congratulate him and the
distinguished Senator from Louisiana, Senator Breaux, for the
tremendous amount of work and success which they have brought into a
program for a 7-year balanced budget.
My sense is that with a centrist approach, which is represented by
the charts which Senator Breaux has spoken about and the one which is
next to Senator Chafee, we can have a balanced budget, and we can do it
with a scalpel and not with a meat ax.
The bill which we passed last week and which was signed by the
President is illustrative, in my judgment, of what we can do if we
really set our minds to it. I chair the Subcommittee on Labor, Health,
Human Services and Education. And, as I have said on this floor, it has
been an embarrassment to me that that bill could be brought to the
floor at a much, much earlier time. I will not review the bidding as to
why it could not be brought to the floor, but suffice it to say that
there were riders which kept it from consideration by the Senate.
Then Senator Harkin, the ranking member on the subcommittee, and I
crafted an amendment to add $2.7 billion, significantly for education,
but also for health, human services, and worker safety. That amendment
passed the Senate by a vote of 84 to 16, which is obviously a very
strong bipartisan showing.
We then went to conference with the House of Representatives. The
very difficult part is finding the figures which will be signed by the
President and which will be acceptable to the House of Representatives.
We had 20 hours of negotiations over 2 days, and we finally worked it
through on the House-Senate conference with the House conferees to
bring it to a narrow 6-to-5 vote, but it was accomplished.
I believe that is indicative of what we can do with this centrist
approach. It is my hope that this will be reduced to bill form and that
we will put it forward.
I have urged my colleague, Senator Chafee, to bring the proposal to
the floor and to bring it to a vote because I believe that there are
many Senators, besides the 20 or so who have joined in these meetings,
who would be willing to support it if it came to the Senate floor for a
vote.
It is reminiscent of the tremendous job which the distinguished
Senator from Rhode Island, Senator Chafee, did on health care back in
1992, 1993, and 1994. He had so many meetings in his office at 8:30 in
the morning every Thursday that most of us should have been lessees. We
should have paid rent over there.
One of the concerns that I had on the tremendous job which he did was
that it never came to the floor for a vote under the time of pressure
for which I think we would have enacted that bill. He did set the
stage, I think, for those of us working with him, and under Senator
Chafee's leadership, for the legislation which was passed last week,
the Kassebaum-Kennedy bill. This bill, which is targeted, did not have
the problems of the administration's bill which was a complete
revolution.
So that with this centrist approach, I think we have it. I hope we
will bring it to the floor. I think it is the model for accommodation,
and I am glad to be a part of the team.
Again, I thank my colleagues who yielded the floor.
Mr. CHAFEE addressed the Chair.
The PRESIDING OFFICER (Mr. Jeffords). The Senator from Rhode Island.
Mr. CHAFEE. Mr. President, I thank the senior Senator from
Pennsylvania for his kind remarks and for the wonderful work and help
which he has given us on this.
I would like to turn back, if I might, to the Senator from Louisiana
because both of us have encountered, as I have previously mentioned,
objections to specifics here. But this is not exactly unknown
territory.
Let me suggest to the Senator from Louisiana that a bill went through
this body which had high tax cuts. It did not have the corrections to
it in the CPI. And that bill, as I recall, did not get enacted into
law. In other words, one approach was tried which many people here say,
``Oh, we need more
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taxes. We do not like this. You only have $130 billion in taxes. You
ought to have $245 billion.'' OK. We tried that.
Am I correct in saying that?
Mr. BREAUX. The Senator is absolutely correct. We discussed and had
heated discussions about the size of all of these reductions in
spending as well as the size of the tax cut. But this is reflective of
a genuine compromise reached between people of differing opinions. But
it reflects, I think, the only way we can get the job done.
Mr. CHAFEE. So when those others say do it this way or do it that
way, there is no other train leaving the station that I am aware of
that is going to reach the terminal point successfully. In other words,
the President has indicated that, and the Democratic leadership has
indicated that they do not want high tax cuts.
Am I correct in that?
Mr. BREAUX. The Senator is correct. I think both sides have sort of
polarized on whether to have a tax cut or not. But we have tried to
listen to both sides and try to come up with a recommendation that
meets the concerns of both sides but reflects a true compromise.
Mr. CHAFEE. That is the point that I would like to get across to our
listeners and viewers--that it is easy to be critical. It is easy to
say, ``oh, no. Do not fool with that CPI, that Consumer Price Index,
and the Medicare figure is too high. We do not like what you have done
on welfare. The Republican Governors do not like what you have done
totally on welfare an area that has been mentioned before briefly.
We make some savings out of Medicare, or actually what we do is we
reduce the rate of growth over the next 7 years. Medicare, unless
something is done, is truly going to go broke.
People say, ``Oh, we have heard you people say that around here on
this floor before.'' All right, let us just look and see what has
happened. We have two recent reports. The New York Times reported last
Tuesday that the Medicare hospital insurance trust fund--which is the
fund that pays the hospital bills for the elderly--operated at a loss
for the first 6 months of this current fiscal year. It fell short, the
outflow as compared to the income, fell $4 billion short in that brief
time.
So once upon a time we were bringing in more revenue than we were
expending and we built up a surplus. Now the lines on the graph have
crossed and the expenditures are exceeding the income. That is not
going to change unless we do some things.
Yesterday's Washington Post reported the Congressional Budget Office
now believes the Medicare trust fund will become insolvent in the year
2001. When we started on this exercise just a few months ago we thought
it was going to go insolvent in 2002, so in just a few months we have
seen the fiscal situation of the trust fund deteriorate by a year. So,
unless something is done in this Medicare Program, along the lines that
we have suggested, the Medicare trust fund, which pays the hospital
costs of the elderly in this Nation, is going to go broke. That is
something we ought to take very, very seriously.
I read a comment the other day in the newspaper where somebody said,
``Oh, don't believe that. We are going to take care of it.'' It is not
easy to take care of some of these situations once the downward spiral
starts and the expenses exceed the income. Once that starts there is
really serious trouble ahead.
I would like to now touch briefly on the Consumer Price Index. The
Consumer Price Index has clearly been overstated. What we do, as the
Senator from Louisiana pointed out, in our group, we say let us state
the Consumer Price Index accurately. So that is what we have done. That
results, fortunately, in dramatic savings, not just over this 7-year
period, but for the outyears as well. So, a key part of our proposal
here is the recognition of the fact that the Consumer Price Index is
overstated. We hope our fellow Senators, paying attention, listening
and studying this situation, will come to the conclusion that we have,
that it is essential to state the Consumer Price Index in an accurate
form. That results, as I mentioned, in our calculations, of a $110
billion savings over the 7-year period with dramatic savings in the
outyears, and which will mean, as the Senator from Louisiana briefly
said, that Social Security and Medicare will be here in the future
years.
Mr. BREAUX addressed the Chair.
The PRESIDING OFFICER. The Senator from Louisiana is recognized.
Mr. BREAUX. Mr. President, I yield myself such time as I may consume.
I would like to ask a question of the distinguished Senator from
Rhode Island, because he was talking about the Consumer Price Index
adjustment. He and I served on the Senate Finance Committee together.
We know we had asked for a study by a commission to report to the
Finance Committee. I think the commission was asked for by the
distinguished Senator from New York, Senator Moynihan, and, at that
time, Senator Packwood, to report to us as to whether the CPI, the
Consumer Price Index, was correctly reporting the cost of living or
not. That commission made a preliminary report and said no, it is
incorrect, in that it overstates inflation by anywhere between 0.7
percent up to 2 percent.
So what we have done is suggest we make an adjustment, that we make a
correction, that we make it more accurate than it was before. Our plan
says we are going to take a low estimate--let us use one-half of 1
percent--and make the adjustment there.
It seems to me, and I ask the Senator, that what we are suggesting
makes such great sense I am wondering if he could comment on why there
is so much opposition. It seems no one wants to touch this part of our
plan for fear of the political consequences. Could the Senator shed
some light on why something that seems so reasonable is such a problem
to do?
The PRESIDING OFFICER (Mr. Santorum). The Senator from Rhode Island.
Mr. CHAFEE. I think the answer to this is that people really do not
want to get into trying to solve these dramatic problems that are out
there in connection with the entitlements. The word ``entitlement'' is
one we toss around here, but what are entitlements? Entitlements are,
principally, Social Security. But they are also Medicare, Medicaid, and
welfare. We believe--and it is not just us but every serious student of
the deficit of this Nation and the direction we are going has said so--
it is essential to get the expenditures in these entitlement programs
under control or there just plain will not be money to pay for them in
the future years.
So when we began looking into this in the Finance Committee, as the
Senator from Louisiana indicated, Chairman Alan Greenspan of the
Federal Reserve came and testified before us and he said you should
look into the Consumer Price Index, and whether it is accurately
stated? It was his view, which was corroborated by further studies,
that the Consumer Price Index is overstated and the Consumer Price
Index is the basis on which the cost of living adjustments are computed
for Social Security, for pensions, indeed, for the Tax Code.
So we looked into this further. As the Senator said, we set up a
commission to look into what is the accurate Consumer Price Index. As
the Senator said, the preliminary report has come back saying that as
currently computed it is overstated somewhere between, on the low side
0.7 percent, on the high side 2 percent.
So we looked at that, here is 2 percent way up here, 0.7 percent
here. We said we will not go as high as either of those figures. We
will only make an adjustment of 0.5 percent, from the Consumer Price
Index. Actually, we would make really tremendous savings if we, for
example, took the 2 percent.
Mr. BREAUX. Yes.
Mr. CHAFEE. But we chose not to do that, as the Senator recalls.
Mr. BREAUX. Let me thank the Senator for that comment. I want to talk
about why we did what we did with regard to the CPI adjustment, because
it is controversial. But I think, as our colleagues understand better
what it actually does in the real world, they will agree with us that
it is the right thing to do. I think it is the correct thing to do, not
only economically, I think politically it is the correct thing to do
because we are telling senior citizens and everybody else who benefits
from programs that are indexed for inflation, that we are going to take
the steps necessary to make sure the program is there for the future.
Unless some corrections are made, you are
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going to have an indexed program that does not have any money in it. So
if the program is broke, what in the world is the benefit of having it
indexed to inflation if there is no money left in the Treasury?
I will give an example. Just with the Social Security Program, the
estimates are, by the year 2030, the number of people receiving
benefits is expected to rise to 43 beneficiaries for every 100 workers.
Right now it is 27 beneficiaries for every 100 workers. There is an
explosion with the baby boomers who are going to be retiring. What that
means in real terms is that by the year 2013, not that far off--by the
year 2013, Social Security benefit payments will exceed the tax
revenues dedicated to the program.
That simply means we are going to be paying out more than we are
taking in. So if we are going to pay out more than we are taking in,
what benefit is it to say it is indexed and I will get an increase
every year to make up for inflation? If you do not have any money left
in the pot, it does not matter it is indexed to any kind of standard
because there is no money left to pay a person.
So what we have suggested is a fix in this area. It is not the only
way to solve the problem, but it is part of a package. Increasing
gradually the retirement age is part of that suggestion, and that I
support as well.
Let me tell you what that means in the real world. I ask unanimous
consent to have printed in the Record a table which is entitled
``Impact of 0.5 percent CPI Change on Social Security Beneficiaries.''
There being no objection, the table was ordered to be printed in the
Record, as follows:
IMPACT OF 0.5 PERCENT CPI CHANGE ON SOCIAL SECURITY BENEFICIARIES
--------------------------------------------------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001 2002
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average Monthly SS Benefit...................................... 637 656 676 696 717 738 761 783
Average Monthly SS Benefit CPI--0.5 Percent..................... 637 653 669 686 703 721 739 757
Average Monthly Difference...................................... ......... 3 7 10 14 18 22 26
Average Yearly Difference....................................... ......... 38 79 121 166 213 263 315
--------------------------------------------------------------------------------------------------------------------------------------------------------
Mr. BREAUX. What this simply shows is that it has a very small dollar
impact on a retiree when you look at the great benefits of shoring up
the system. For instance, the average Social Security monthly benefit
in 1995 was $637 a month. With no change at all, that will go up to
$656 a month in 1996.
With our change--and people say, ``Oh, it's so difficult. It is
impossible to do politically. You will have all the seniors unhappy. It
is a terrible thing to do''--with our change the person who is
averaging $637 per month in 1995 will still get an increase next year;
it will go up to $653 instead of $656. That is $3 less. It still is a
substantial increase.
What is more important, it is a more accurate increase because it
more accurately reflects what the adjustment should be. How can anyone
stand up and say, ``Not only am I going to have my benefits increased
for inflation, guaranteeing an annual increase, but I want it to be
overstated, I want it to be inaccurate, and I want it to be a mistake,
which determines how much I get.''
How can anyone stand up and say, ``I want an error in the adjustment
of what the increase should be to determine how much I'm going to get
from my Government,'' putting in jeopardy the entire program for future
generations? I cannot think of a senior who would ever want to stand up
and say, ``I want more than an inflation adjustment accurately says I
should get,'' when it runs the risk of destroying the very program that
their children and grandchildren, as well as themselves, have come to
depend on.
So we have taken a great, courageous political step, some say. I
think it is a factual step that has to be taken in order to preserve
the system. I reserve the remainder of my time.
Mr. CHAFEE addressed the Chair.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. CHAFEE. Mr. President, I agree with the Senator from Louisiana
that this step is simply the right thing to do. All we are doing is
saying, let the Consumer Price Index be accurately stated. That is what
we have chosen to do here.
Some have labeled that a very courageous step. We did not look on it
that way. We think of it as the logical step to take to state the CPI
more accurately. Likewise, there is, as the Senator from Louisiana so
aptly stated, a tremendous benefit to doing that. Otherwise, unless we
do it, the Social Security system is going to go under water.
I see the Senator from Washington here, and I am glad to hear his
comments.
The PRESIDING OFFICER. The Senator from Washington.
Mr. GORTON. Mr. President, last Thursday, I appeared with the two
distinguished Senators from Rhode Island and Louisiana and a large
number of others to speak in favor of their bipartisan balanced budget
proposal on which I have worked under their tutelage over the course of
the last several months.
I do not need to repeat the history which led to this point or, for
that matter, the details of the proposal itself, except to say, Mr.
President, that this is, in fact, a balanced budget, a truly balanced
budget by making real changes in the way in which we manage spending
programs in this country, true reforms in entitlement programs, to a
certain extent, and, in particular, reforms that were not even included
in the balanced budget that were passed by this body in December. So
from a substantive point of view, it is very real.
Mr. President, the only other comment about the program that I have
to say is this. At one level, of course, balancing the budget is almost
a moral course of action. It is simply wrong morally and ethically for
us to continue year after year spending hundreds of billions of dollars
on services that we want but are unwilling to pay for, and then sending
the bill for those services to our children and to our grandchildren.
Beyond it simply being wrong, Mr. President, it is destructive of
opportunity for future generations.
We are convinced and we are told by those who are economic experts
that a balanced budget, even the clear promise of a balanced budget,
with policy changes that will lead to that point, will mean more money
for the Federal Government from the present tax system because of lower
interest rates and greater prosperity, but, more significantly than
that, more money in the pockets of American citizens, more jobs, better
jobs, lower interest rates on homes and automobiles and other major
purchases people make. There is a tremendous fiscal dividend to be had
from a balanced budget, not only for the Government but more
importantly for our citizens.
I will conclude, Mr. President, by saying that I believe that the two
Senators who have led this effort deserve the gratitude not just of the
Members of the Senate and of the Congress, but of the American people.
They have not to this point gotten the publicity, the public
acceptance, the public knowledge, for that matter, of this proposal
that they deserve. But they have soldiered on to a point at which this
is a very real alternative and one I hope that Members of both parties
and the President of the United States will accept.
Mr. CHAFEE addressed the Chair.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. CHAFEE. Mr. President, I thank the Senator from Washington for
those very generous remarks. I appreciate the kind words he said. Let
me just say that we cannot go too far wrong if we are doing something
right for the future generations of this Nation.
It is absolutely clear that, if we continue on the present course,
trying to fund these entitlements--Medicare, Medicaid, Social Security,
welfare--without changes, it is clearly going to bankrupt the Nation.
You see some projections that estimate an individual
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will have to pay 80 percent of his or her earnings to the Federal
Government in order to sustain these programs in future years. They are
clearly out of control.
That is why we try to bring them under control. It is not just us
predicting this. It is already happening, and ahead of schedule, as we
see with the Medicare Program.
The Senator from Colorado is here, the senior Senator from Colorado.
I will be delighted to hear his comments.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. BROWN. I thank the Senator from Rhode Island and the Senator from
Louisiana for their leadership on this project.
Mr. President, why in the world would you have a budget process going
on separately from the committee? I think there are some simple truths
that lay out why. The reality is that this Congress tried to control
spending. They did it by proposing increases last year of roughly 3-
percent. That may not sound like cuts to people outside the U.S.
Congress, but in reality a 3-percent increase was less than the rate we
had been on and less than what the natural law provides with the
automatic increases in a variety of programs.
The President honestly, sincerely felt that we ought to increase
spending at least 4, 4.5 percent. Thus, they did not reach agreement.
Mr. President, that fact has not gone away. The reality is that the
President of the United States wants much more in the way of an
increase in spending than the Republican Congress wants. There is no
way around that. It is not going to change tomorrow.
I think we all hope that the President will sit down with Congress
and work out an arrangement. But that has been tried, and the reality
is, the two parties have dramatically different views of what is good
for the country. The President sincerely believes we need to increase
spending more than the Republicans want to increase spending.
Mr. President, the only salvation for us is a bipartisan effort in
Congress that comes up with enough votes to override the President's
veto. That is a simple reality and a simple fact. If we did not develop
a budget that does that, we did not achieve any progress. That is why I
think this proposal has so much merit.
It is a bipartisan proposal. Is it as strong as I would like? Of
course not. The reality is we ought to be cutting spending, not
increasing it at a slower rate. Anybody who looks at their family
budget knows that. But this is dramatically better than no progress at
all, and it is the one alternative we have this year to make some
progress.
There are some other facts that are realistic, too. Medicare is going
to be insolvent. We can debate about whether it is going be 5 years or
6 years or 4 years, but it is going to be insolvent. The American
people are not well served if you let it go to a position where it is
insolvent. Social Security is going to be insolvent. It may be 20
years, it may be 25 years, but it will be insolvent.
To pretend you are somehow helping the American people by running
these trust funds into insolvency is ludicrous. The American people
know it is ludicrous. The American people want a Congress that will
deal with the problems, not hide from them, not gloss them over, not
pretend they do not exist. They want it done fairly, they want it done
evenhandedly. Mr. President, this budget offers a bipartisan way to
resolve our financial difficulties.
Mr. CHAFEE addressed the Chair.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. CHAFEE. I thank the Senator from Colorado for those excellent
remarks.
I yield what time the Senator from Utah needs.
The PRESIDING OFFICER. The Senator from Utah is recognized.
Mr. BENNETT. Mr. President, I rise to pay tribute to the two Johns--
Chafee of Rhode Island and Breaux of Louisiana--for the leadership they
have shown and for the tenacity which they have maintained throughout
this process.
As I go home to Utah, I have two reactions from people, as they go
through the process and go through what we have done here. The first
one that comes from people, who are, perhaps, more partisan than some
others, is to find some aspect of this thing and complain. ``How can
you, Senator Bennett, support''--fill in the gap--and the reaction is,
``No, I do not support that. You are right, I campaigned against
that.'' ``Well, how can you stand here and say that this was a good
thing that you have been involved in?"
And then we get to the second reaction, which comes from many of the
same people, but includes a broader spectrum, and it is summarized,
``Can you guys not get your act together back there and solve some of
these problems?'' ``Why are you so partisan that you cannot address the
fundamental issues of the country.'' ``Instead of a Democratic or
Republican solution,'' one of my constituents said, ``is there not an
American solution?'' I am not so filled with hubris as to say the
result here is the ``American solution'' as opposed to the Republican
or Democratic solution.
I remember something my father used to say when talking about his
experience in the Senate. He said, ``We legislate at the highest level
at which we can obtain a majority.'' I think that is the driving force
here--that we have recognized that there will be things in the bill
that I will hate. There will be things in the bill that I will really
like and that folks on the other side will hate. But we legislate at
the highest level at which we can obtain a majority. And the way we
obtain a majority is to talk to each other and work things out and make
the kinds of changes and understandings that we have to make in order
to get there.
Unfortunately, in the circumstance we live in today, a majority is
not 51 votes; a majority is 60 votes. And you cannot get 60 votes in
the Senate if you do not have some give and take. So I salute the
tenacity of the folks who have been involved in this process to keep at
it and to keep both sides together and to keep both sides equal. I
think that is a powerful, powerful idea.
What are we doing, Mr. President? We are trying to solve the
financial problems of the United States. What are the financial
problems of the United States? Quite simply, spending exceeds income at
an increasing rate. That is very fundamental. So we have to address
ways of increasing income and ways of decreasing the growth of
spending.
The thing that I endorse the most out of this is the recognition that
there are ways to increase income that defy the wisdom of the computers
that make straightforward extrapolations. The willingness of everyone
to put a capital gains tax cut in this package is the most encouraging
thing for me. The computers say it is going to cost us money. I know
the computers are wrong. I know that when we get actual experience, we
will find that cutting the capital gains tax rate, as this package
does, will increase capital gains tax revenue. Every time we have done
that in history, that has been the result. Every time we have raised
the capital gains tax rate, we have reduced capital gains tax revenue.
Why we cannot get the computers programmed to recognize that fact is
something I have quit arguing about, because I have been unable to
budge anybody who programs the computers. But the willingness of both
sides to say, OK, we will score this as a revenue loss, even though I
know it is not, and we will pay for it because it is the right thing to
do, shows a degree of understanding that I think is terrific.
The other thing we do in this package that I salute is that we have
the willingness to confront the CPI. We have the willingness to say the
Consumer Price Index is out of whack. The Consumer Price Index is
driving the increase in spending. We have to confront it, even though
it produces a bonus for a lot of our citizens.
I am heartened by the courage of all 22 members of this group,
Democrats as well as Republicans, who looked each other in the eye and
said, ``It is time for a little truth telling. Even though the CPI is
politically sensitive, it is time to do the right thing.''
So, Mr. President, as I said, I salute the two Johns for their
leadership, and the other 20 members of the group, who stood together
on these crucial issues. I recognized immediately that there are things
in the deal I do not like. But, ultimately, the direction in which
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it moves us is the direction in which the country must go, in a
bipartisan manner, lowering the temperature of the partisan arguments
that occur on this floor. I am proud to have been a part of the overall
effort.
Mr. BREAUX. Mr. President, I will yield whatever time he needs to the
Senator from Wyoming. I will conclude by pointing out that I think we
have laid out a good package. We have indicated that there will be an
opportunity in the next week or so to present our package on the floor
of the Senate as an amendment on a substitute to the Budget Committee
resolution. We hope that between now and then we will have a chance to
talk to our colleagues and go into greater detail with them as to what
our package contains, to try and answer the questions they have,
knowing that it is not perfect, but that we think it represents a true
and fair compromise.
With that, I yield to the Senator from Wyoming.
Mr. SIMPSON. Mr. President, I ask unanimous consent that we continue
for an additional 5 minutes in morning business, which will enable me
to speak 4 minutes and conclude with either Senator Chafee or Senator
Breaux.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SIMPSON. I am pleased to join with Senators Chafee and Breaux,
and the others of the centrist coalition, in announcing this plan. This
is very comprehensive. I hope our colleagues will take a very clear
look at it. But I just so admire Senators Chafee and Breaux--tireless,
able, caring, sensible people, trying to do a sensible thing. We cannot
continue this raucous partisanship about who is doing what to who.
Medicare cannot be touched and now, of course, it is going to go broke
a year, maybe 2 years, earlier than we thought 6 months ago. Here we
rock along and, finally, we are addressing it in this proposal.
I am particularly pleased that we are looking at the Consumer Price
Index, and that we propose to reduce that CPI by one-half of a
percentage point in 1997 and 1998, and by three-tenths of a percentage
point after that, for the purposes of computing the COLA's, the cost of
living allowances. And, of course, the AARP will shriek like a gut-shot
panther and leap off their pinnacle down there at their temple, for
which they pay $17 million a year rent. Please go see it. I hope
everybody goes there. Get your shoes cleaned off before you go in, or
you will hurt the marble floors. It is quite a place. They will go
crazy on this. They will wail about tearing the back door down and the
terrible effort to get Social Security benefits. And we are not cutting
Social Security benefits. That is not what is driving this issue.
What we are striving to do is have a more accurate CPI that reflects
the true level of inflation. This is the issue that is most important
to the senior citizens of this country--inflation. This certainly does
drive seniors into doubt and concern. That is what we must do. It is
inflation that eats away the seniors' lifetime savings.
So we have had the testimony from Alan Greenspan, and others, who
believe the CPI is off the mark. We think this is a very valid step--
$110 billion in savings over 7 years. That may not be a popular
proposal, but it is critically important. If we were to do that for 10
years on a 1 percent, which we are not dealing with, but that would be
$680 billion over 10 years. The figures are huge and, exponentially,
they go on out.
So it is a total package. Some are not going to like things here, but
it is a very good first step. We achieve some really significant
reversal of what is happening to us as a country. I served on the
Entitlements Commission, and we all know where we are headed.
I like the one about making Medicare eligibility link up with the
Social Security retirement age by gradually increasing that eligibility
age. That acknowledges that life expectancy is higher now.
We are going to affluence test Medicare part B. I would have done
more of that. We say those who have annual incomes exceeding $50,000
and couples who have incomes exceeding $75,000 will be affluence
tested. I certainly think we could do that at a lower income sometime,
but we do not have the votes to do it at this time.
We limit Medicaid. I would have liked to have seen more flexibility,
but I am not going to let that deter me from supporting this.
Everything here will have an objection from somebody, but the
totality of it overwhelmingly outweighs the concerns I have about these
other things.
So in many other areas--taxes--I had my concerns. Here is a tax
package. I did not think we should just give away $250 for every child
under the age of 17, but in the spirit of cooperation and consensus, we
were able to address some of my concerns. There was not a single thing
I addressed that was not met with the finest courtesy and genuine
regard of what we were trying to do.
So I urge all my colleagues to consider the plan. Those who
automatically reject the notion of a bipartisan budget will have no
trouble at all finding one or two items to oppose it, but I am
convinced anyone who approaches the plan with an open mind and a
recognition that all true bipartisanship requires a great degree of
compromise--compromising an issue without compromising ourselves--will
conclude this as an impressive plan. No tricks, no gimmickry, none of
the usual stuff. It makes the tough, politically unpopular decisions
Republicans and Democrats alike have been putting off for far too long.
I again thank sincerely Senator Chafee and Senator Breaux. They are
statesmen.
Thank you.
Mr. CHAFEE addressed the Chair.
The PRESIDING OFFICER (Mr. Campbell). The Senator from Rhode Island
[Mr. Chafee] is recognized.
Mr. CHAFEE. Mr. President, first, I want to thank each of the
speakers who took the trouble to come here today in support of this
effort that Senator Breaux and I have the privilege of leading.
Second, I would like to say that what this is all about is future
generations. Unless we do something about these entitlements, this
country of ours is going to be in great financial and economic peril.
If we take these steps now that we have outlined, then there is a
wonderful chance--it is not only a chance, it is a fact--that we can
reverse the trends that are now underway in our two largest spending
programs--Social Security and Medicare--as well as Medicaid and
welfare.
So this is it. It is easy to criticize, and people, as I mentioned
earlier, will say, ``I'm all for it, except for the CPI,'' or ``I'm all
for it, except for the Medicare number,'' or ``I don't like your tax
figure.'' But nobody else has come forward with a program that has the
support of Senators on both sides of the aisle, Democrats and
Republicans.
So this is it, and we hope that everybody, every single Senator in
this body will carefully consider what we have come up with. We
sincerely hope that they will join with us. We want more people. There
are 22 of us who have worked together on this since October. But 22 is
not enough, and it is not enough for Senators to say, ``Well, that's
pretty good. We'll see what else is going to come along.'' Nothing else
is going to come along that we know of. We have been involved with this
for some time.
So we do seek support from our fellow Senators on both sides of the
aisle. The beneficiaries will be our children and our grandchildren,
and that is a pretty worthwhile goal.
I thank the Chair and certainly thank my distinguished colleague,
Senator Breaux, who has been terrific in the leadership he has given to
this program right from the beginning.
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