[Congressional Record Volume 143, Number 14 (Thursday, February 6, 1997)]
[Senate]
[Pages S1050-S1051]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    THE PRESIDENT'S BUDGET PROPOSAL

  Mr. GREGG. Mr. President, I want to speak briefly this morning about 
the status of the President's budget. Obviously, this is always a very 
significant event when the President presents a budget. This year, I 
think the climate

[[Page S1051]]

and the substance of the budget is significantly different than what 
has occurred in past years. There is a commitment by this Congress to 
get to a balanced budget by the year 2002.
  A year ago, we sent a budget that would have accomplished that to the 
President, and he, regrettably, vetoed it. Now the President has come 
forward and accepted this challenge and said that he also believes that 
we should get to a balanced budget by the year 2002. He sent up to us a 
proposal to accomplish that. His budget, as proposed, has many 
constructive functions in it. It also has many questions. Regrettably, 
it has a lot that is left undone and unaddressed.
  On the constructive side, he does get to a balanced budget --at least 
as he claims--using his numbers. Unfortunately, the questions that are 
raised by the way in which he gets there are significant. For example, 
next year, the deficit will go up and the following year the deficit 
will go up, under his budget. Even in the following year, the deficit 
goes up under his budget. It is not really until he is about to leave 
office that he alleges or represents he is going to put in place 
programs which would bring the deficit down. That, to me, is not what I 
would call a good glidepath to a balanced budget. The glidepath should 
be a downhill glidepath, not a roller-coaster graph.
  The President proposes about $258 billion of not cuts, but attempts 
to slow spending over the next few years. Of this, it appears that 
about $80 billion comes from defense, about $58 billion comes from 
domestic discretionary programs, and about $21 billion comes from 
entitlement issues. Those are good, solid numbers--well, not 
necessarily solid numbers, but good starting numbers, and we will see 
whether they are solid numbers.
  At the same time he is proposing $121 billion in savings over the 
next few years in the rate of growth of entitlements, he is also 
proposing $60 billion of new spending on entitlement programs, such as 
new Medicare benefits, Medicaid benefits, food stamp and SSI benefits, 
new health insurance benefits. And under his education initiative is a 
brand new entitlement program for school instruction, allegedly, and a 
brand new entitlement program for school literacy--$60 billion in new 
spending, which gives you basically a net in the entitlement areas over 
5 years of $60 billion in reduction, which is not a very significant 
number. That is about $10 billion a year on entitlement spending which 
annually represents almost 55 percent of the Federal budget and is 
closing in on $700 billion. So it is not a big number. In fact, it is 
not a strong enough number in order to get to a solid balanced budget 
because what happens is that, even if we get to the balanced budget, 
even if we accept the figures which the President has proposed in his 
budget as getting to the balanced budget in the year 2002, we see those 
deficits exploding after that period. Why is that? Because there is no 
fundamental proposal for structural reform of the major entitlement 
programs in the President's budget. That is where I believe this budget 
is inappropriate. There has to be fundamental reform if we are going to 
honestly address this issue, if we are not going to simply pass it off 
onto the next administration, as would occur in this case, or the next 
Congress as might occur in our case, or, unfortunately, the next 
generation, which is exactly what we are doing as a Congress and a 
Presidency if we pursue a tentative course in addressing the 
entitlement reform.

  In the area of entitlement reform, there is in the President's budget 
no initiative to try to put in balance for any extended period of time 
the Medicare trust fund, part A, or the Medicare system. The President 
of the Senate today has been one of the leaders on the issue of how you 
can reform Medicare in a substantive way so we can have a strong 
insurance system for our seniors.
  I have also put together something called Medicare Choice, or Choice 
Care, which would be a substantive structural reform which would use 
the marketplace to try to create an incentive for efficiency in the 
Medicare system which would give seniors choices, much as we have as 
Members of Congress, to go into the marketplace and choose a variety of 
different health care programs, the type of structural reform which 
myself and the Senator from Tennessee, who is in the chair today, have 
talked about, are trying to energize and for which we have a lot of 
support, by the way, here in Congress. It is nowhere to be found in the 
President's proposal, nor is there any other structural reform which 
would address the underlying Medicare concerns to be found in his 
proposal; just a variety of traditional provider payment slowdowns and 
possibly an accounting mechanism that would significantly adjust the 
way we pay for home health care. Neither is there a long-term solution, 
but one which is a totally inappropriate accounting gimmick. There is 
no long-term solution as to how we make Medicare solvent. So the 
proposal does not address Medicare reform.
  The proposal also does not address the reform of our tax laws, which 
it should. It calls for a $98 billion cut in taxes. It also calls for 
an increase in taxes of about $76 billion. So essentially there is no 
tax cut in this package. More importantly, there is no attempt to 
address the underlying problem which our tax laws have. We just saw 
where the IRS spent $4 billion to put in place a computer system to try 
to make the tax system work in this country, and it appears it can't 
even figure out who is filing what returns when and how much they are 
owed. After spending $4 billion, the IRS has openly admitted that it 
has failed; $4 billion down the drain. Why is that? Is it because they 
cannot produce such a computer system? In large part, yes. More 
significantly, it is because our tax laws are so complex and convoluted 
that they are simply unenforceable and ineffective, and is not a way 
that we should be raising revenues for the citizenry. The IRS has 
become a totally overbearing and, in many instances, inept organization 
which the American people no longer have confidence in. That undermines 
constitutional government when your tax-raising organizations lose the 
confidence of the people.
  So there should be a proposal, or at least a discussion of or an 
initiative for how you reform the tax laws, how we take this great, 
huge, byzantine morass called the IRS and bring it into the 21st 
century and simply make it understandable and give the American people 
an opportunity to file a tax return on a postcard, pay taxes, and know 
that they are being accounted for correctly and recognize that we need 
more efficiency.
  So there is no proposal in here for fundamental tax reform, and there 
should be. The President has missed an opportunity. It is basically a 
budget which is based on optimistic economic assumptions, has in it new 
entitlement proposals for spending, and has a very low net tax cut, 
none of which really accomplishes the basic goals of the balanced 
budget. If we are going to balance the budget, we have to fundamentally 
reform the underlying drivers of our budget problem, which is the 
entitlement system and our tax laws. Yet, that is not addressed in this 
budget proposal. It is, however, a starting point.
  We as a Senate, and I as a member of the Budget Committee, intend to 
take it as such and to work with the President to try to put in place 
something that should not only lead us to a balanced budget in the year 
2002 but will give us an opportunity at least to see some light at the 
end of the tunnel for a long-term resolution of the major underlying 
public policy questions which we have in this country--Medicare, Social 
Security, and our tax laws.
  So I appreciate the time, Mr. President, of the body. I yield back my 
time at this point.

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