[Congressional Record Volume 142, Number 114 (Tuesday, July 30, 1996)]
[House]
[Pages H8810-H8816]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INCREASES, NOT CUTS, IN MEDICARE, MEDICAID, AND STUDENT LOANS
The Speaker pro tempore. Under the Speaker's announced policy of May
12, 1995, the gentleman from Connecticut [Mr. Shays] is recognized for
60 minutes as the designee of the majority leader.
Mr. SHAYS. Mr. Speaker, I would say right off that I have tremendous
disagreement with the presentation that was just made by my
distinguished colleagues on the other side of the aisle. I look forward
to filling in some of the missing pieces that I think were left out, to
give people a better idea of clearly what happened last year and what
we are attempting to have happen this year.
Mr. Speaker, we have three primary objectives in this new Republican
majority. Our first objective is to get our financial house in order
and balance the Federal budget, not because balancing the Federal
budget is the end-all and be-all, it is just the basic commonsense
logic that is required before you build on top of it. We want a strong
foundation.
But the foundation is not what we want to have as the ultimate. We
want to have a stronger economy that has to be built on a strong
foundation of getting our financial house in order and balancing the
Federal budget.
Our second interest and concern is to save our trust funds,
particularly Medicare, for future generations. I will get into great
depth about the reason why we need to save this trust fund and the
reason why our plan did save this trust fund.
Our third objective is to transform our caretaking social and
corporate and, frankly, farming welfare state into a caring opportunity
society. We want to teach people how to fish, not just give them the
fish. We just do not have that problem in social welfare for welfare
mothers, where we have had now three generations of welfare mothers,
but we have the same challenge in corporate assistance that is not
necessary, that is carved out for special interests, that was created
basically during the last 40 years when this majority was in the
minority. We see it as well with our effort to reduce the subsidies
that exist to our agricultural sector.
Mr. Speaker, getting our financial house is order to us is kind of
basic stuff. The challenge is that one-third of the budget is what we
call discretionary spending. We vote on a third of the budget each
and every year. We do not vote on 50 percent of the
budget. Fifty percent of the budget are entitlements:
Medicare, which is health care for the elderly and health
care for the disabled; Medicaid, which is health care for
the poor and nursing care for the elderly poor; and
programs like agricultural subsidies, food stamps. You fit
the title, you get the money, you get a benefit from the
program, even, in fact, without a specific vote each and
every year by Congress.
So Congress votes on a third of the budget. Fifty percent of the
budget is on automatic pilot. Then there is about 15 percent left,
which is interest on the national debt, also on automatic pilot.
What we did was we cut domestic spending. We made Government smaller.
In the parts of the budget, the 13 bills that we report out each and
every year, we made the Government smaller. We eliminated 240 program.
Some of them might have been large programs, some were small, but we
eliminated 240 programs in Government and made Government smaller.
We had a freeze on defense spending; not an increase, not a cut. We
basically attempted to freeze defense spending last year when we voted
out our budget. Then what we looked to do was slow the growth of
entitlements.
My colleagues on the other side of the aisle made reference to the
fact the Republicans are claiming we are slowing the growth of
entitlements. We are not claiming it, that is what we are doing, we are
slowing the growth of entitlements. Some entitlements were growing at
10 percent and 11 percent and 12 percent a year. We are allowing them
to grow at 7 percent a year. We are going to spend 7 percent more on
some entitlements, where before we spent 10 percent. We are slowing the
growth of entitlements. That is the reality.
Look at what we did and then tell me if you think it is a cut. Last
year we looked to slow the growth of the school lunch program from $5.2
billion to allow it to grow to $6.8 billion. Last year it was $5.2
billion, and in 2002, the 7th year, it would be $6.8 billion.
If Members remember, the President of the United States actually went
to schools and told young schoolchildren and the world community that
we wanted to cut the student loan program. When I heard the President
do that, I was pretty outraged, because I thought, my gosh, what are we
doing? Who in my conference, Republican Conference, would do that?
When I got back over the weekend and came back down to Washington, I
immediately went to the individuals who were on the committee that
would have jurisdiction, pretty unhappy that they would ``cut the
school lunch program.'' I learned they were going to allow it to grow
from $5.2 billion to $6.8. That is obviously not a cut, that is an
increase. What they did do is they slowed its growth ever so slightly,
but hen allowed 20 percent of the funds to be reallocated to the most
needy areas.
I represent three urban areas. I represent Bridgeport, Connecticut, a
middle class community with a lot of poor people and a declining tax
base. I represent a community, the city of Norwalk, and another city of
Stamford. These cities have young children, in particular, who need
school lunches. I represent some very wealthy communities, vibrant,
wonderful communities, suburban communities around these cities.
Under our present school lunch program, these students are
subsidized. My daughter is subsidized, as all students are in the
country, 13 cents per lunch. I am hard-pressed to know why my daughter,
who has a father who is a Congressman and a mother who teaches, whose
income collectively is quite satisfactory, obviously more than
satisfactory, well above the median income, why does my daughter need
to be subsidized? She does not. Republicans passed a bill allowing 20
percent of the program to be reallocated to the most needy areas, our
urban and rural areas, where we may have young children who need a
better school lunch program. So we allowed the program to grow from
$5.2 to $6.8 billion, still staying in the school system.
The student loan program last year was $24 billion, $24.5 billion.
Members have been told that we cut the student loan program, yet the
student loan program under our plan will be, in the seventh year, $36
billion. That is a 50-percent increase in the program in a 7-year
period. Only in this place, and frankly, from my colleagues on the
other side of the aisle, when you spend 50 percent more do people call
it a cut. Every student will be given the same basic grant programs
that they had in the past. They will be given the same grant program.
What we did try to do, and we ultimately withdrew this, and I regret
that we did, we said that students would pay the interest from when
they graduate to the 6-month grace period before they have to start
paying the loan. Taxpayers were required in the past to pay for that
and presently pay for it. Taxpayers pay that interest.
What we said is the student can pay for it, and it would be amortized
during the life of the loan, the 10 to 15 years students are allowed to
pay back the loan. That meant for an average student loan, it means $9
more a month. So we were asking students once they were out of school,
6 months later when they were working, to pay $9 more a month. That is
the price in my area of a movie and a Coca-Cola, or basically the price
of a pizza.
That is what we did. We allowed the program to grow from $24 billion
to $36 billion, and then said students would pay the interest after
they graduated, 6 months after they graduated, and they could amortize
that part of the interest and pay it over the course of the next 10
years. I have no problem looking at any student and saying, for the
good of the country, you can afford and should pay that $9 more a
month.
Why would we want to ask anyone to make any sacrifice, if it is
viewed as even a sacrifice? I view that as an opportunity, because
during the last 22 years our national debt has grown 10 times. It has
grown from about $480 billion, that is what it was 22 years ago,
[[Page H8811]]
and now it is over $5,000 billion, or actually it is $5.1 trillion. So
we have a situation where during our lifetime, during the last 22
years, during a time of relative peace, we have allowed the national
debt to increase tenfold.
What we are trying to do is get our financial house in order. We are
trying to balance the budget and we are trying to say to all Americans,
if we all do our part, we can eliminate those deficits that are robbing
future economic growth and basically bankrupting our children. That is
what it is doing, it is basically saying to our children that they have
to pay the bill for our expenditures.
Mr. Speaker, we did not cut the student loan program, it grows from
$5.2 billion to $6.8 billion, and allow for 20 percent of the program
to be reprogrammed, so allow the wealthier kids, basically allow
communities to take these sums that go to people like me, who do not
need to have our families subsidized, and provide it for children in
urban areas and rural areas and some suburban areas, where they simply
cannot afford and sometimes actually go hungry at night. We can help
them.
We allow the student loan program to grow 50 percent, from $24
billion to $36 billion. Again, I would say, only when you increase 50
percent do people call it a cut. They call it a cut usually on that
side of the aisle.
Mr. Speaker, the earned income tax credit is a program that a lot of
people believe in. I sure believe in it. The earned income tax credit
is a program that basically says, you are working but you do not make
enough money to really survive, pay your room and board; basically, to
pay your living accommodations, pay for your food. You just simply do
not have enough.
What we do is for people who earn so little, they do not pay it.
Under the earned income tax credit, they are actually given money from
other taxpayers. Taxpayers are giving some taxpayers or some working
Americans money. They do not pay a tax, they are given the money. That
is called the earned income tax credit for the very poor. We allow that
program to grow from $19.9 billion to $25.4 billion in the next 7
years, last year versus now in the year 2002. Only in Washington when
you go from $19.9 billion to $25 billion do people call it a cut.
What I want to get into is just two very important programs. They are
sure important to me, and I think most Members on both sides of the
aisle. Medicaid, under our plan on Medicaid, we allow the program,
which is $89 billion of expenditure on health care for the poor and
nursing care for the elderly, which also has a State match in addition
to that money, to grow from the seventh year to $127 billion, so going
from $89 billion to $127 billion. Only when you grow that much do
people call it a cut. It is not a cut. It was $89 billion. It is
growing to $127 billion, a significant increase in the program.
What I am going to talk about in more detail, though, however,
because my colleagues on the other side of the aisle basically totally,
frankly, got it all wrong--that is a generous way to say it. The
ungenerous way would basically be to say that they simply do not have
their facts right, and they do not. I know they would not intentionally
mislead people, but the end result of their presentation was
misleading.
Because our Medicare program last year, on a basis of $178 billion,
grew to $289 billion. So that is a 60 percent increase in our program.
Basically what we said was that Medicare would grow at 10 percent a
year, the traditional Medicare program would grow at 10 percent a year.
We want it to grow a 7 percent a year. Want it to grow 60 percent, from
last year to the seventh year, the year 2002. When you grow from $178
billion to $289 billion, my colleagues call it a cut on the other side
of the aisle, even though it is a 60 percent increase.
One of my colleagues on the other side of the aisle, said, they may
have spent more and are slowing the growth, but there are more people
in the system. That is a fair point. There are more people in the
system. So what we did is we broke it down on a per person basis to
know if we were cutting the program, because the last thing we want to
do and can afford to do is literally cut the program. Health care costs
more. We are going to need more to pay for additional health care
costs.
Last year we spent $4,800 per senior, per senior on Medicare. Under
our plan, the plan went to $7,100. That is a 49 percent increase, a 49
percent increase in Medicare. Now, per person, only when you go from
$4,800 per person to $7,100 per person do people call it a cut. That is
not a cut. By any definition, when you go from $4,800 per person to
$7,100 per person, growing at 50 percent per person, that is not a cut.
In terms of total dollars, when you go from $178 billion to $289
billion, that is a 60 percent increase. You cannot call it a cut. It is
a 60 percent increase in spending.
How were we able to do it? How were we able to have the program grow
from $178 billion to $289 billion, and save, our colleagues said $270
billion, which they call a cut, how were we able to save $240 billion?
Because that is how CBO scored that number. As one time they said it
was $270 billion. Then they rescored it to say it was $240 billion.
{time} 1915
When we allowed the program to grow overall 60 percent, per person 49
percent, we still save $240 billion.
How can it save $240 billion? What happens is, instead of allowing it
to grow at 10 percent a year, we allow it to grow at 7 percent a year.
How do we do that? How can we provide the same level of service and
have it grow at 7 percent a year instead of 10 percent? The fact is we
not only do that but we provide a better service. How could that be?
How could you have a program that is growing at 10 percent a year, now
you say it is going to grow at 7 percent a year, you are going to save
$240 billion, and you say it is going to be a better program?
The fact is, it is quite simple to understand. We did not do it,
contrary to what my colleague said, by increasing the co-payment. We
did not do it by increasing the deductible that seniors pay. We did not
do it by increasing the premiums that seniors pay except for the very
wealthiest. This is something that some people on my side do not always
like to acknowledge. We are asking the wealthiest to pay more on
premium, the very wealthy. We are saying that the very wealthy should
not get free Medicare services premium without paying more.
So we say that someone who is single that makes over $100,000 should
pay all of Medicare Part B. We are saying a married couple that earns
$175,000 should pay all of Medicare part B. So we are asking the very
wealthiest under our plan to pay more. But the 99.5 percent of the
American people, we are not increasing the premium at all. We did not
increase the deduction, we did not increase the copayment, we kept the
premium at 31.5 percent.
What happened? What was so significant about 31.5 percent? The
taxpayer pays 68.5 percent of Medicare Part B. Why would we want to
save $240 billion? The reason we want to save $240 billion is that is
wasted money. The program is gong bankrupt. Medicare is going bankrupt.
The program my colleagues on that side of the aisle and this side of
the aisle appreciate, respect, know it is very important for our
country, that program is going bankrupt.
Mr. Speaker, the problem is that my colleagues on that side of the
aisle choose not to deal with the issue. Our colleagues on this side of
the aisle had the courage, frankly, to deal with the issue and deal
straight with the American people. We said that the premium should stay
at 31.5 percent.
What is significant about that? Taxpayers are paying 68.5 percent.
What some may not know is that the premium under the tax plan that
President Clinton passed in 1993 had the seniors pay increases up to
31.5 percent by last year, but then in the election year, they allowed
it to drop to 25 percent. So seniors last year were paying $46 per
month. Now they are paying $42 a month. It dropped $4. We said keep it
at 46; not increase it, keep it at the 31.5 percent.
Why would we have wanted to do it? Because the program is literally
running out of money. So we kept the co-payment the same, the deduction
the same, the premium the same. We did not let the premium drop, and we
saved $240 billion.
How would we save $240 billion? Because we went to the private
sector. Why would we have gone to the private sector? We went to the
private sector because we felt that the public sector
[[Page H8812]]
was providing a plan with too much waste, fraud, and abuse. We said
that the Federal Government simply was not policing the system well.
So we asked people in the private sector, if we allowed Medicare to
grow at 7 percent a year, could you provide a better program? They said
we could provide the same level of program. They said we not only can
provide the same level, we can provide a better program at 7 percent.
We can provide eye care, dental care, maybe a rebate on the co-payment
and the deductible. Some plans said we could even pay all of the
premium. Some even went to say we can do a rebate on the co-payment,
the deduction, pay all the premium and MediGap, MediGap which is paid
by the seniors, the 20 percent paid by seniors for health care
services. These plans said we could do it.
How could they do it? They said, if you allow it to grow at 7 percent
a year, you are spending 7 percent each year; that is a lot of new
money. They know we are going from $178 to $289 billion. We are not
spending less, we are spending more. They know, if we spend more they
can provide more.
What we did is we devised a plan that my constituents have asked for
for a long time. They said you, meaning me, a Member of the Federal
Government, a Member of Congress, have many choices of health care. We
want the same kind of choices you have. So what we did is we devised a
plan to give them choice. Seniors will be allowed under our plan to
keep their traditional fee-for-service plan or they can get all these
different private health care plans that will provide the eye care, the
dental care, a rebate on the co-payment and the deductible, no premium
cost or maybe even some reduction or contribution to the MediGap
payment. They will get those benefits and get better care.
Mr. Speaker, I was trying to understand how the President of the
United States first off would veto that plan. We made, this side of the
aisle, a very real mistake. We did not think the President of the
United States would veto a plan that did not increase the co-payment on
the deductible or the premium, gave seniors a choice. We simply did not
think he would veto it. Maybe we should have realized that, this being
a political year, it was too tempting not to demagogue the issue and
veto it.
This is ultimately what the President did. He vetoed a plan that
would have taken that $240 billion and put it into the program so that
Medicare parts A and B would have been solvent to 2010. What we have
learned subsequent to his veto, that the health care providers, the
people who administer the Medicare plan have pointed out, that the plan
now goes bankrupt, not in 2002. And by bankrupt I mean there is no
money left in the fund. What is that money that goes in the fund? It is
the money that every taxpayer pays, the 1.45 percent that the employee
pays and the 1.45 percent matching that the employer pays. If you are
self-employed, the 2.9 percent that you pay for Medicare goes into a
trust fund.
Last year that fund lost $35 million. This year it is losing already
over $5 billion, and it is going to go bankrupt by 2001, not the end of
2001, the beginning of 2001, basically at the end of 2000. That plan is
going bankrupt. Our plan would have injected into Medicare Part B about
half of that $240 billion and saved that fund to 2010 when our big
challenge is that we start to have the children that are basically the
baby boomers.
Our challenge is quite simple: We passed a plan that did not increase
the co-payment, did not increase the deduction, did not increase the
premium, allowed the program to grow from $4,800 to $7,100, a 49-
percent increase per beneficiary, a 60-percent increase in total cost,
gave seniors choice. The President vetoed the plan.
How would I explain the effect of that? The only way I have come up
with to explain how stupid it was and how irresponsible it was for that
plan to be vetoed is to basically give the following analogy.
If I had, and I would not do this for my daughter, but if I said to
my daughter she could have $20,000 to buy a basic, say, Taurus
automobile which would not give her bucket seats and leather seats,
power windows, and it would not give her basically, say, a sunroof,
some of the amenities, I would say: Honey, you cannot buy those things.
Here is the money. You are to buy a basic car that will serve you well
in the years to come.
I give my daughter $20,000, which I will not do. So I say: Honey, do
not think you will get that. But if I did and she went out and she
looked at different automobiles and she came back to me with tears in
her eyes because she had disobeyed me, and I said: Honey, did you get a
car? She said: I bought a car, Dad. And I said: Now, Jeramy, you got
the kind of car I asked you to get, right? She said: Well, Dad, not
quite. I said: What do you mean not quite? I gave you $20,000 to buy a
basic Taurus automobile. And she said: Dad, well, I did not do what you
asked; I did not do what you asked. I bought a car with leather seats,
a sunroof, and other amenities. I even got not a cassette, but I got a
better hi-fi system.
I start to get mad at her. She says: And furthermore, Dad, I did not
spend $20,000; here is $2,000 back. She hands me that $2,000. She
bought a better automobile, but she disobeyed me.
I say to her: Honey, you did not do what I asked; you cut $2,000.
Well, obviously she did not cut $2,000. She saved $2,000, and
obviously I would not be unhappy with it. I would have said that she
did the right thing, and I would have congratulated her on saving
$2,000 and getting a better product.
That is what we did with Medicare.
And so what is the tragedy? The tragedy is that we could have saved
$240 billion over the next 7 years. Now we have not. It is an
opportunity lost. Our failure to save the Medicare system, slow its
growth, provide a better program, and our failure to do that means that
we are going to have to make severe reductions in other programs
because it is a basic concept of opportunity lost.
If you continue to spend so much money on entitlements, your other
programs are going to have to be reduced more. If you can make some
savings here, your programs here do not have to be as tightly regulated
and cut as much, because we are cutting some programs; not cutting the
earned income tax credit, not cutting the school lunch program, not
cutting the student loan program, not cutting Medicaid, not cutting
Medicare and allowing all those programs to increase.
This get me to a basic point, the third point. We want to get our
financial house in order and balance the Federal budget. We cannot
allow these gigantic annual deficits to continue at the end of each
year to add to our national debt. We want to save our trust funds,
particularly Medicare, from bankruptcy, and we did that with our plan.
Regrettably the plan was vetoed by the President. But the third thing
we want to do is we want to transform this caretaking social and
corporate and agricultural welfare state into a caring opportunity
society. We want to help people in this country grow the seeds, we want
to help people in this country learn how to grow the food, and want to
help people in this country to fish rather than to be given the fish,
and it seems kind of basic, and I have to say as a centrist or moderate
Republican, someone who has voted for some programs that were meant to
do good things but ultimately did not accomplish what we wanted to
accomplish, I have had to say we have to be up-front with ourselves and
with the country. Some of what we have done has been destructive. We do
not have 12-year-olds having babies and 13-year-olds and 14-year-olds
having babies by accident. We do not have young people selling drugs
without some factors contributing to it. We do not have 15-year-olds
killing each other without some factors contributing to it. We do not
have 18-year-olds who cannot read their diplomas and not recognize that
the government has been a contributor to that. Or the fact that 24-
year-olds have never held a job, not because jobs do not exist. Jobs
exist. The problem is that some people think it is a dead-end job.
If I had ever said to my dad that I did not want that job because it
was a dead-end job, my dad would have asked me how long I had worked
there and doubled the amount of time I worked. Because my dad would
have known that a job teaches you to get up in the morning, it teaches
you to be of service to people, it teaches you to recognize that you do
something, you make a contribution, and in return you are
[[Page H8813]]
paid for it. A job that some would call a dead-end job is the beginning
to a job of greater opportunity when you learn basic skills.
This Republican majority wants to end welfare as we know it. We do it
by providing day care and job training. We just want the job training
and the day care to be purposeful to helping get people off welfare.
When I was growing up, my dad used to commute into New York. When he
commuted into New York, he would read three papers in the morning and
he would read three papers in the evening and he would come back filled
with so many wonderful stories. My three older brothers were 11, 8, and
7 years older, so for part of my childhood in junior high school and
high school and part of even elementary school, I was really an only
child. My dad would come home at night and we would talk about so many
different issues. Sometimes he would come back and read something that
maybe Ann Landers had said, a crazy question someone asked Ann Landers
and her response that usually was quite sensible and we would always
try and anticipate what she would say. My dad would say this was the
question, what do you think she is going to say?
I was looking at a calendar I have and each day there is a kind of a
quote identified with someone who is usually a well-known person.
{time} 1930
It is really the quote of that day. On April 3, I was looking at my
calendar, thinking about the very things I am talking about now, and
there was a quote from Ann Landers. In the quote she said, ``In the
final analysis, it is not what you do for your children, but what you
have taught them to do for themselves that will make them successful
human beings.''
I want to read that again. This is her quote. She said, ``In the
final analysis, it is not what you do for your children but what you
have taught them to do for themselves that will make them successful
human beings.''
I began to think about this and think of what I have done in the last
few years. Whenever I have someone in my office who talks to me or I am
meeting with someone who really started at a lower economic echelon in
terms of they just grew, they are not poor now but they were poor, and
they did not particularly have a life where their mom and dad had the
kind of hopes and dreams that they have, but they have become very
successful, I ask them why. What was it that enabled them to be
successful?
To a person they had someone who cared about them, someone who loved
them, who mentored them, who sometimes basically kicked them in the
butt and told them to get off their rear end and get working; who did
not give them excuses about maybe they had encountered something and
they wanted to feel like a victim. Their mentor got them to stop
thinking of themselves as victims and realize they could take control.
What a gift to teach someone, that they can take control. They also
said they had people who taught them to dream.
Now, we have to wrestle with the fact that we have young kids who
basically have a disadvantage because they do not have someone giving
them a lift, they do not have good parenting, they do not have the
advantage of someone who helps them to realize they are not a victim,
that they have the ability. But every one who I have encountered has
made it clear to me that in their case they did.
So I have asked them if they would do for their child what government
does for so many of our citizens, and they have said there is not a
chance that they would ever do that. They know that the kind of welfare
system we have now is a caretaking type of system. It makes us feel
good because we care for them and we are being caretakers, but we truly
are not caring for them because if we cared for them our focus would be
on what we have taught them to do for themselves.
We know that is what is going to make them successful human beings.
It is not giving, it is teaching, it is guiding, it is helping people
dream. That is the motivation, the very caring motivation of this
Republican majority.
Out the window goes this caretaking approach. We want a caring
society. We want health care, we want day care, we want job training
for our poor, but we want to encourage them, push them out a little
bit, help them know that they are going to have to get a job, and we
are going to have to encourage them and guide them and teach them how
to dream. We are going to have to teach parents how to be parents, when
we have kids raising kids. We are going to have to do all of that. That
is caring.
We have to stop just giving people something and then allowing them
to just expect that more is going to be given to them. This is probably
the most important thing that can come from this new Republican
majority.
Now, I cannot say that this new Republican majority is going to win
reelection, because we have had to deal with a tremendous amount of
demagoguery. We have had to deal with people who have said we are
cutting Medicare and Medicaid and we are cutting welfare when we are
not doing those things.
I talked about what happened last year, and what I want to do is just
talk about what is in our plan for the next 6 years and use these
charts. During the last 6 years we spent $8.7 billion. During the next
6 years we are looking to spend $10.4 billion. We are looking to have
basically a $2 billion increase in the total. Trillion, I am sorry.
This is $8.7 trillion spent in the last 6 years and this is $10.4
trillion spent in the next 6 years. We are basically looking to spend
in the next 6 years $2 trillion more than we spent in the last 6 years.
Now, I talked about what we did with the student loan program in our
budget last year. Now we are in the next year of the budget. It is not
$24 billion, it is $26 billion, as we expected. This is the student
loan program. We are allowing the student loan program, now not in the
next 7 years in the next 6 years, it is going to grow 42 percent. In 7
years it would grow more than 50 percent, but in the next 6 years it
will grow 42 percent.
Our budget is identical, basically in the turquoise, with the
President's budget, which is in the red: $26 billion this year, $37
billion in the 6th year of our program, by the year 2002. Both the
President and this Congress want to spend the same amount for the
student loans.
The earned income tax credit. During the last 6 years we spent $109
billion on the Earned Income Tax Credit. Now, the earned income tax
credit is money that is given to people who work who make very little,
so little, in fact, that they do not pay taxes other than social
security. They actually get money back from the taxpayers, and it cost
us during the last 6 years $109 billion. In the next 6 years it is
going to cost us $156 billion.
Only in Washington, when we have spent in the last 6 years $109
billion and then have it grow to $156 billion, do people call it a cut.
But some on the other side of the aisle actually call that a cut. And
by the way, that program, like the student loan program, grows over 40
percent during that 6-year period.
Welfare spending. We have heard the Republicans are basically cutting
welfare spending. But how is it, if welfare spending was for the last 6
years $441 billion and in the next 6 years, under our plan, we are
going to spend $576 billion? How is it when it grows 30 percent, we are
going to spend 30 percent more dollars, can people call it a cut? It is
an increase and, frankly, it is a sizable increase. We are talking
about well over $100 billion of new additional dollars being spent.
In our plan what we do is we get welfare recipients off welfare and
we get them back into work, and they are provided job training and day
care and health care benefits. They are allowed to keep their health
care benefits even though they are working. They are allowed to keep
some of their welfare benefits, even though they will be working.
Medicaid spending. During the last 6 years we spent $463 billion.
During the next 6 years we are going to spend $731 billion. This is the
Medicaid program. The Medicaid program was $463 billion. We will be, in
terms of the last 6 years and in the next 6 years, it will grow to $731
billion. Only when we grow from $463 billion to $731 billion do people
call it a cut, but they call it a cut. It blows my mind. They call it a
cut when we are spending so much more.
This gets me now to the Medicare trust fund. The Medicare trust fund
is
[[Page H8814]]
going bankrupt. It is kind of a scary thing to contemplate, because
basically this side of the aisle is really the only one who has truly
attempted to deal with the issue of making sure that it will not go
bankrupt by the year 2001, right here.
Now, we are in the year 1996, and we know that the program is losing
billions of dollars. This chart here illustrates how much it is losing.
Last year we were told the program was going to grow by $4 billion.
Instead of being zero, we were going to add $4 billion to the trust
fund. Now, it is kind of hard to see, but there is a small red line
here and it amounts to $35 million less money in the fund at the
beginning of 1995 until the end of 1995. The fiscal year 1995.
So we ended up with less money, $35 million less. Now, in terms of
this fund, that is not a tremendous amount of dollars, considering how
many dollars are in the fund. But when we realize we were not supposed
to have a $35 million loss, we were supposed to have over a $5 billion
increase, and then in this year, when we were told the program was
going to begin to go bankrupt already, and I am talking by April, we
have $4.2 billion less in the fund than we started out in the beginning
of that fiscal year.
We are being told now by the trust fund that in spite of the fact and
because of, frankly, the President vetoing our bill, that the trust
fund is going to go bankrupt not at the end of the year 2002 but
beginning in the year 2001. And that was just a nice political way to
say the end of the year 2000. It will go bankrupt 2 years sooner.
I just have two more charts, and I would just love to just point out
that our Medicare spending during the last 6 years, we spent $920
billion. In the next 6 years we are going to spend $1.4 trillion. Only
in this place, when we have spent $920 billion and then we are going to
spend $1.4 trillion, do people call it a cut. It is a 61-percent
increase in a 6-year period of more dollars spent.
On a per-person basis, now remembering that this plan is now a 6-year
plan instead of a 7, it grows from $5.2 to 7,000.
I have a colleague who would like to join me, but I would just like
to touch on one last point. When I was elected in this last election
and I was meeting with people from the editorial boards, they asked how
could I as a moderate Republican have signed on to the Contract With
America. I answered them by asking them a question.
Now, remember, we were many the minority then. We were in the
minority. And we came out with a Contract With America which said the
eight reforms we wanted to do on opening day and the ten major reforms
we wanted to do in the first 100 days. I answered their question by
asking a question. I said, ``What do you think of the majority party's
Contract With America?'' Meaning in this case the Democrats who had
been in control for 40 years and still were in control.
I just enjoyed the silence, because there was no plan. They had no
plan. I said is it not amazing that the minority party then, the
Republican Party, had a plan of reforms for the first day, eight
reforms, and a plan for the first 100 days, major reforms, balancing
the Federal budget, dealing with tort reform, malpractice reform,
saving our trust funds, all of those very viable important programs, I
said is it not amazing that the minority party has a plan and the
majority party does not?
Then I said something that means more to me than almost anything
else. First off, there was not a Member who signed that who did not
have a role to play in fitting it together, and I am joined now by my
colleague who played a major role in making sure that this contract
actually came to fruition, who was not an incumbent at the time, who
helped us write it. And the exciting thing was that this was put
together by over 390 Members of Congress or challengers. This was a
positive plan that did not criticize President Clinton, did not
criticize Congress, it just said if you elect us, this is what we will
do.
I want to emphasize before yielding to my colleague this point. The
press is constantly saying why do we always criticize the other side?
Why are we so partisan? I am thinking, when we finally had a clear-cut
plan that did not criticize the President, did not criticize Congress,
then the Democrats in Congress, but just simply said you elect us and
this is what we will do, they were critical of it. Then when we started
to implement it and do what we said we would do, they started to
criticize us again.
It just made me realize that doing the kind of changes that we need
to do to save this country are not easy, but I count my blessings each
and every day that I have the opportunity to be part of that change.
Mr. Speaker, with that, I would like to recognize my colleague, who I
am very pleased has joined me.
Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman for yielding to me,
and it is almost like yesterday. In some respects it is like yesterday
and in some respects it is like many, many years ago, when we stood on
the floor of this House on the very first day of this 104th Congress
and I was given the high honor of representing the freshmen and being
the freshmen spokesman in leading the debate on the adoption of the
rule for the Shays Act.
A lot of people have forgotten how important that was, but I think
that was a very, very important act. In it we said that Congress is now
going to have to live by the same laws as everybody else. And the
interesting thing is, outside of Washington, outside of the circle that
we call Washington, DC, beyond the Potomac, that made perfect sense.
But here in Washington, that was considered sort of a radical idea.
{time} 1945
Because for many, many years, we had developed this reputation here
in Washington, particularly in Congress, that everybody else had to
live by this set of rules, but Congress somehow would exempt itself
from those same rules. And today we had a vote on a very important bill
which allowed for employers and employees to negotiate and work
together to say, would you like to have time and a half for overtime or
would you like to have compensatory time?
One of the reasons I think that bill passed today and one of the
reasons it became an important bill is all of a sudden Congress had to
live by the Fair Labor Standards Act. And some weeks our staff work 60
hours and some weeks we are on district work period and they do not
have to work quite as many hours. So many of us thought why can we not
give our staff some time off in months where the workload is a little
lighter around here because we know there are going to be months when
we have to work them even harder.
So I was so pleased and honored and privileged to have been an
important part of the debate on that very first bill. And frankly, and
you know this, Representative Shays, that I became the first freshman
in over 100 years to be invited to the first bill signing down at the
White House. And my staff, I remember that day they thought it was a
much bigger deal than I did. But I have had a chance to reflect on that
and it was really a very historic moment to have a freshman for the
first bill signing.
Mr. SHAYS. I have to say when you brought out the rule on the
congressional accountability bill which was to get Congress to live by
all the laws that we impose on everyone else, you were not speaking for
the freshmen, you were speaking for the majority in this Congress and
the vast majority of American people who knew it was ludicrous,
immoral, and harmful for Congress not to be under the laws that we
impose on the rest of the country.
Our Founding Fathers, as you pointed out in that early debate, and I
have used your quote since, our Founding Fathers, Madison in
particular, and in his Paper 57, basically said, of course, the
protection to the people would be that of course Congress would live
under the same laws it imposes on the people and it would not impose
laws on itself that it could not live by. Little did Madison know that
for about a 30-year period, Congress did not want to live under certain
laws but was willing to impose the laws on everyone else.
If the gentleman would allow me to continue, you did a superb job of
just making sure that the American people heard the plainness and
sensibility of that effort. And I was instantly very proud. I have to
tell you, at first my nose was a little out of joint. I have to tell
you I thought these freshmen, they are just here and they are taking
over. And I said, thank God, because you all did us proud. You took the
floor that opening day on every rule, and you spoke for all of us. And
I was never
[[Page H8815]]
more proud to be associated with an effort than when you came and
brought this bill to the Chamber and to join you when it was signed and
it was a bipartisan effort. It happened under this Republican Congress
but it was a bipartisan effort.
The interesting thing, and I am holding the floor probably longer
than I should, but you talked about today what we did. What we did
today, or what we had not had to do before, was before this bill passed
we did not have to give overtime and we did not have to give
compensatory time. We did not have to pay someone 40 hours plus time
and a half. And we did not have to live under OSHA and a lot other
laws. But now all of a sudden we are living under the laws that we
impose on others, the 40-hour work week and time and a half.
In the past, there are some employees who are actually behind you,
who were unhappy that we had a situation where we were denying them the
opportunity to have compensatory time. I am talking generally about
employees who worked in Congress. And so today what did we do? We
passed a law, with basically very little support from the other side of
the aisle, that said if an employer is willing and an employee wants,
and the employee has to want this, an employee can get instead of time
and a half pay, they can get time and a half overtime. So, if they
worked 20 days, they can get 30 days off with pay. Or they can cash in
their 20 days of work and get 30 days of pay immediately and continue
to work.
We gave that choice to the employee and employer. And amazingly, some
of my colleagues on the other side of the aisle just thought that was
wrong.
Mr. GUTKNECHT. If the gentleman would yield back, and this is where
it began to ring home, when the various agencies started to report to
us exactly what we were going to have to live by, and the Fair Labor
Standards Act was one of them, I remember in our office I said, why can
we not just say that obviously there are some weeks when the
legislative business is so rigorous around here that our staff has to
work 45, 50, even 60, perhaps even 75 hours. Why in some of these other
weeks, can we not give them time off? And frankly, some of my staff
said gee, we would love to have some time off to go shopping, or visit
our family, or do some other things. And we came right up against the
Fair Labor Standards Act that said you cannot do that.
The beauty of the bill that we passed today, and hopefully the
President will sign it, I do not know what the President is going to
do. I understand there are certain special interest groups who want to
block this legislation, but the beauty is that it gives not only us the
opportunity to work with our employees, but it gives all Americans, all
employers around the country, the same. And the beauty of the
Congressional Accountability Act, and I told people, the point was not
to punish Congress. The point was to sensitize Congress to what every
employer around the United States has to deal with, whether it is an
insurance agency or a large corporation, small business, whatever it
happens to be. And once you begin to see how difficult it is for us to
deal with it, then you realize how difficult it is for that three-
person insurance agency, or that large independent company, whatever it
happens to be.
The point was not to punish us, the point was to sensitize us to how
difficult it is to deal with. That was a very, very important role
I appreciate all the work that you have done on the Shays Act, and
making Congress live by the same laws, but one of the things that
brought me down to the well, and you were showing in your charts,
because I think there are still an awful lot of Americans who do not
understand how much under the House-passed plan we are going to
increase Medicare spending, a lot of people keep using the term
``Medicare cuts.'' As a matter of fact, we cannot require this by
statute, but I would hope that responsible members of the press, every
time they hear or quote someone from this body, or Washington, or the
administration, or whomever, whenever they use the term ``Medicare
cuts,'' I wish they would put ``from $4,800 to $7,100.'' Put that in
parentheses: The Republican Medicare cuts from $4,800 to $7,100,
whatever the numbers are, or from $5,000 to approximately $7,200.
But the point is, no Americans really believe that when you increase
spending from $4,800 to $7,100 over a 6-year period that that is a cut.
But if we can do that, we can actually increase the life, make the
Medicare trust fund solvent not only for this generation of Americans,
but hopefully as we begin to make these reforms we can save the
Medicare system for the next generation.
Mr. SHAYS. It is a fair debate to say you are spending $4,800. Let us
take what we did last year that the President vetoed. We went from
$4,800 per beneficiary to $7,100, a 49-percent increase in terms of
per-beneficiary costs. We allowed it to grow 49 percent from $4,800 to
$7,100. Now, it is fair to say if someone wants to, well, you are
allowing it to increase and you are allowing it to increase quite
significantly because that is not enough. We want it to grow to $7,500.
That is a debate that is valid and then we have that debate.
But what happened was that I would go back to my district and my
constituents would say well, some of your congressional colleagues from
around the State said that you have cut Medicare, and I give them the
number and they say that is not a cut.
Mr. GUTKNECHT. Please hold up that chart again. I do not think you
can hold it up too many times.
Mr. SHAYS. This chart that I have here is what we are doing this
year. This is Medicare in terms of what we are spending over the last 6
years versus----
Mr. GUTKNECHT. Those are the gross dollars.
Mr. SHAYS. The collective gross dollars. We are spending $920
billion, or we spent in the last 6 years $920 billion. In the next 6
years, $1,479 billion or $1.4 trillion. This clearly is a significant
increase. Now if our colleagues on the other side of the aisle say we
should be spending $1.6 trillion, then let us have that debate.
But then the question is why? I ask myself why would we want to spend
more when we did not increase the copayment, did not increase the
deductible, did not increase the premium except for the very wealthy?
And if they do not like the choice programs, they do not have to go to
the choice programs. They can stay in the traditional fee-for-service.
But if they went to a program that had eye care and dental care and did
not like the doctor, they can go right back to their traditional fee-
for-service Medicare plan. And we saved $240 billion. If we saved $240
billion, what happened it? What happened is it went into the program to
make sure it does not go bankrupt for the next 14 years.
Mr. GUTKNECHT. And the other point that our colleagues sometimes make
is they say you are cutting Medicare to offer tax cuts to the rich. And
I will tell you, that is one charge that absolutely makes me furious.
But they know, we know, and I think everyone in this body knows that
that is a separate trust fund and it is completely divorced from
whatever happens on the other side of the budget. We cannot use changes
in the Medicare system to fund a tax cut. That is absolutely false. And
they know it is false because it is a trust fund, and nothing that we
do on the other side of the budget can be used to alter the Medicare
trust fund. And that really disturbs me when people say that because
they absolutely know that that is not true.
Mr. SHAYS. It is inaccurate for two reasons. First off, recognizing
that part of it is a trust fund, the Medicare Part A is a trust fund
and Medicare Part B is funded out of the taxes. And we tax revenues and
the premium that people pay. By our saving $240 billion, half of that
goes into the trust fund and the other half basically reduces the
burden to the taxpayer of continuing to spend more for a program where
we do not have to spend more.
But the other part is that they are not tax cuts for the wealthy. The
two-thirds of the tax cut that we proposed was a $500 tax cut
basically, not a tax cut, well it was a tax cut, $500 tax credit per
child for families making under $100,000. So if you had a family of
four children, and you were making under $100,000, you would have in
your payroll $2,000 more.
What was the logic of that? It is not a tax cut to the wealthy; it is
a tax cut to families. And if you were making $30,000 or $40,000, you
may end up paying no taxes because that $2,000 reduction may eliminate
all of your Federal
[[Page H8816]]
taxes except for the Social Security tax. That was a tax cut, a tax
credit for families. Not wealthy people, for families.
Mr. GUTKNECHT. And it was based on the basic notion that families can
spend this money far more efficiently than the Federal bureaucracy. And
I doubt if there is anybody in this room or anybody in Congress or
anybody who is watching this at home who doubts the basic wisdom of
that. Families are very responsible for the resources that they have.
Let me tell a quick personal story. We have just a couple of minutes
and I will close with this. I was raised in a family with three boys.
My dad was a life-long member of the AFL-CIO. He worked in a factory.
The largest single payment that my family made when I was growing up
was their house payment. But for the average family today, the largest
payment they make is to the government. The average family trying to
raise three kids today spends more for taxes than for food, clothing,
and shelter combined, and we believe that they ought to have some tax
relief.
Mr. SHAYS. Thirty-eight percent of their income is paid in taxes,
where when my parents were raising me it was about 15 percent. And my
parents were allowed a much larger deduction per child than families
are today.
Let me close and thank my colleagues for joining me by saying that
this new Republican majority has three basic objectives: to get our
financial house in order and balance the budget; and the second, to
save our trust funds particularly Medicare from bankruptcy; and our
third effort is to transform our caretaking society into a caring
society, to transform our caretaking social and corporate and
agricultural welfare state into a caring opportunity society.
We are looking to bring money, power, and influence out of Washington
back to people in local communities. And we are going to do this for
the good of the children because, as Mr. Rabin said, the former Prime
Minister of Israel, politicians are elected by adults to represent the
children. And this Republican Congress is looking to represent the
children so that they have a brighter future than we had.
With that, Mr. Speaker, I truly thank you for giving us this
opportunity, and I am going to yield back the balance of my time.
____________________