[Congressional Record Volume 143, Number 45 (Wednesday, April 16, 1997)]
[House]
[Pages H1597-H1599]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               THE BUDGET

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 1997, the Chair recognizes the gentleman from Oklahoma [Mr. 
Coburn] for 60 minutes.
  Mr. COBURN. Mr. Speaker, I have two charts that I would like for the 
American public to see because I think they very importantly make some 
cases for where we are today; and I have committed that I will spend 
the time that is necessary to communicate to the people in my district 
and people throughout this country what is really happening to us in 
terms of our budget.
  We hear a completely different rhetoric today than what we heard just 
2 years ago. And the question that comes to my mind is, Why has the 
rhetoric changed? And I think the rhetoric has changed because people 
are fearful for their jobs.
  It was not that the rhetoric was wrong. The rhetoric was right, but 
the results of not communicating the importance of what our job is and 
not communicating exactly where we are.
  I would want people to look at these two charts. One is from 1972, 
and the other is for this fiscal year, 1997. And they really show the 
heart of the problem that this country faces with its budget.
  If we look at 1972, what we realize is that our entire Federal budget 
was $231 billion. Whereas, in 1997, we are going to spend $1,632 
billion, which is a significant, 700-percent increase, in a mere 25 
years in the amount of dollars that we actually spend.
  Critics will say, well, that is not real dollars. But it is a 
significant increase in real dollars to the 700 percentage points.
  When we look at the total, the other thing that we first notice is 
that, of the interest payments that we made on the national debt in 
1972, that it was a mere $16 billion, that, in fact, we were spending 
about 7 percent of our budget on interest; and now we spend 15 percent 
of our budget on interest, and no small number whatsoever, $248 
billion, which is more than the entire amount that we spent on 
ourselves in 1972.
  The other thing that these pie charts show is they show the fix that 
we are in unless we have the courage to make the changes in the 
programs that are driving the budget deficit.
  We have three choices. As the yellow portion shows that, in 1972, 
discretionary spending, the things that your Representative truly gets 
to make a choice on every year and vote on, accounted for 55 percent of 
the budget. Today, as we can see, it accounts for 34 percent. In the 
year 2002, it will account for approximately 20 percent.
  So what is happening is, the areas where your Representative can make 
a difference in terms of the discretionary budget is slipping every 
year in terms of both total dollars and in terms of the percentage of 
the budget.
  The other thing to note is that the interest portion of that has 
risen 1,600 percent. So if we go to the red area and we see that in 
1972 mandatory spending was 38 percent and it is now 51 percent

[[Page H1598]]

and was projected to continue to rise to approximately 80 percent, we 
can see that unless we make the necessary changes to make those 
programs viable, efficient, and affordable, that it does not matter if 
we do not do anything now.

                              {time}  1715

  We will be in such a financial catastrophe in the year 2012, that we 
will be forced to do it. So the question is, do we take our medicine 
now or do we take our medicine later? Do we do the right things?
  I have a couple of questions that I think are important. One is, 
remember the debate on Medicare over the last 2 years? Everybody 
agreed, including the trustees, that Medicare is going bankrupt. We 
have not heard people talking about it. Is it still going bankrupt?
  The plans put forward in the last Congress were necessary, quality, 
good plans to save Medicare. The plans that are being put forward in 
this Congress are simply band-aids on Medicare. They will not solve the 
structural problems, they will not solve the long-term equity and 
viability that is necessary for a health care program for our seniors, 
and, in fact, every year that we do not make the right decision to fix 
the Medicare Program, we will, in fact, make it harder and more 
expensive when we do finally face the fact.
  So the question is, why are people not talking? Were people 
untruthful in the last 2 years about the Medicare Program? The board of 
trustees, matter of fact, last year said we were wrong, 2002 is not 
right when it will go broke, it is probably going to go broke in the 
year 2000. I expect the trustees this year to tell us that Medicare 
will go broke in the year 1999 or very close to the year 2000.
  So if the problem is still there, why are people not addressing the 
problem? Why? Because of the falsity and the demagoguery associated 
with the political system in our country, where if we do the right 
thing, even though a special interest might not understand the issue, 
we get beat up on it when we go to run for reelection.
  So we have to move to the question, what is more important, doing the 
right thing for our country or getting reelected to this body? And I 
hope the American public would be incensed that their Representatives 
had not addressed the problem of Medicare, because if we really care 
about seniors in this country, we will make the decisions this year, 
not next year. Not when President Clinton is no longer President and 
not when the gentleman from Georgia, Newt Gingrich, is no longer 
Speaker of the House, but this year, when it will make the most 
difference, save the most money and afford health care to the most 
seniors.
  It either is going broke or it is not. It is going broke. So why 
would this body not in fact address the Medicare problem?
  The second area in this red that we do not have any control over, and 
we made some attempts in the last Congress, but needs to be addressed, 
that is further refinement of the food stamp program.
  The fact is there is a large portion of the $27 billion that the 
taxpayers pay in this country for food stamps that goes for beer, 
cigarettes and crack cocaine. The system needs to be changed. The 
system needs to be a hard ID'd limited program that provides the basic 
essentials and basic needs for those who are dependent upon us for good 
reason. We should not be supplying those things that in fact will harm 
them.
  To continue to accept a system that will waste $7 or $8 billion of 
taxpayer money because we do not have the courage to tackle what may be 
a very controversial issue, means we do not have the courage to be here 
in the first place.
  The third point I would make, and if the gentleman from Wisconsin, 
[Mr. Neumann] will stay here, the third point I would make within 
Medicare is we have good testimony, both from the Inspector General, 
from the FBI, that of the money we spend on Medicare, somewhere between 
$20 and $40 billion a year is fraudulent; in other words, is billed to 
the Federal Government through Medicare for services that were not 
rendered.
  Why should we accept that? Why should we not completely revamp the 
Medicare rules and regulations to take the incentive for fraud out of 
Medicare? Why have your Representatives not done that? Why has the 
President not led on that? Why have the Senators not done that? They 
have failed to do that.
  The same question: What is the issue? The issue is the courage to do 
the hard thing but the right thing so that the most people in this 
country will benefit from it.
  We have home health care in this country. The Inspector General of 
HHS testified this year before this Congress that somewhere between 19 
and 63 percent of every bill that is submitted to Medicare for home 
health care is fraudulent. The services were not performed. And yet we 
continue to have home health care guidelines issued by the Health Care 
Financing Administration that allows that to continue, and we have 
known that for 2 to 3 years.
  We need action, and we need action that is based on courage and is 
based on the principle to do the right thing regardless of what it 
costs to someone's political career. So we need to fix it to where we 
can make changes in the red. The area of yellow is going to get 
smaller, the area of blue is going to balloon in terms of interest, and 
the area of red is eventually all we are going to have, is blue and 
red, mandatory spending and interest on the national debt.
  I do not think that is acceptable for our country. I know it is not 
acceptable for the future generations that are going to pay for it.
  I notice my friend from Wisconsin is here and I welcome him to this 
discussion.
  Mr. NEUMANN. Mr. Speaker, I would just point out to the gentleman, 
and I saw his charts down on the floor, but I would just point out, and 
I think it is very important that all our colleagues remember that even 
though that area that is called discretionary spending seems to be 
shrinking, that from 1987 to 1996 the nondefense discretionary 
spending, that is for all of the programs that we hear so much about, 
that nondefense discretionary spending program is up by 24 percent.
  We have been told out here or we have been led to believe that in 
fact the only problem we have to deal with is the entitlements. The 
reality is it is not only the entitlements, it is also those other 
areas that just seem to grow out of proportion. Somebody starts a 
program, and the next year they decide the program should be bigger, 
and pretty soon the programs are growing by 10 percent, even though 
inflation is only 3 percent.
  And of course that is how we got to a 24 percent growth in real 
dollars, or constant dollars, over a 10-year period of time.
  Mr. COBURN. Or a 400 percent increase in the last 25 years in nonreal 
dollars, or inflated dollars.
  Mr. NEUMANN. Right. I noticed the gentleman talked about Medicare. 
Should we talk about the Social Security Program a little bit?
  Mr. COBURN. I think we should. One thing I want to address is this 
bogeyman everybody talks about called the Consumer Price Index, or the 
CPI. Because, in fact, when we ask politicians and we ask Members of 
the House of Representatives how many of them want to talk about that 
with their constituency, very few will say, ``Yes, I will be happy to 
talk about that.'' They are afraid of that issue. I think we should 
talk about that issue.

  The very people who are receiving Social Security today are the 
people in this country that went through the Depression and fought the 
great war. They won World War II. And the real issue surrounding the 
CPI is, does the CPI accurately represent the increase in the cost 
associated with the standard of living for people on Social Security?
  Mr. NEUMANN. Us country folks from East Troy, WI, call that 
inflation. That is really what we are measuring. In very simple 
English, we are measuring inflation.
  Would the gentleman like me to walk through how they determine 
inflation in this country today?
  Mr. COBURN. I think we should.
  Mr. NEUMANN. The CPI today is determined by looking at 90,000 
different articles, 90,000 goods. They call it the basket of goods. 
They go into 22,000 different stores across America and they look at 
35,000 rental units.

[[Page H1599]]

  So this is a huge number of items that are being analyzed each year. 
And we can think of it like looking at how much do these 90,000 things 
in the basket cost on January 1 of this year and how much do they cost 
January 1, 1 year later, and that is how they determine the rate of 
inflation today.
  Now, some people say that that basket of goods does not contain 
current items and is not updated frequently enough. An example of this 
would be in the basket of goods today we would not be looking at 
typewriters. If typewriters were in there, we would want to replace 
typewriters with computers.
  So some people are saying that basket of goods, the 90,000 items they 
are looking at, are not actually the items that people in America today 
are buying. I would suggest, if that is the case, the Bureau of Labor 
Statistics needs to update the basket of goods.
  But that is a very different concept from politicians stepping in and 
saying even though it appears inflation is 3 percent, we deem it 
appropriate to make it 2 percent. A politically motivated adjustment to 
CPI is something that I think I would personally find very, very 
unacceptable. As a former math teacher, this looks like a math problem 
to me.
  Mr. COBURN. The principle is, if the underlying purpose of the CPI 
increment, cost of living adjustment, was to reflect that, then what we 
ought to have is that it reflects the cost of living. If it is 
overstated, it ought to be lowered; and if it is understated, it ought 
to be raised.
  I have not found any senior in my district that disagrees with that 
once they understand what the issue is with it. It is not a political 
fix, it is doing the right thing.
  So, again, what we should be saying is that that CPI should 
accurately reflect, and we have large numbers of people as far as 
economists and other statisticians that tell us today that that is not 
accurate. Now, how we solve that is to ask them to do their job and to 
do it correctly and bring us and the American public that number.
  If they will do that, that will not be an issue anymore. But it also 
brings us back to what our problems are, is we are not demanding 
excellence in large areas in our Nation. And the first place we should 
demand excellence is in our Government, and we should demand excellence 
in the Bureau of Labor Statistics.
  Mr. NEUMANN. I think just to make this very, very clear, we are both 
opposing a politically motivated adjustment to CPI, or a political 
adjustment, and we are both supporting a mathematical computation that 
is accurate and that accurately reflects inflation in our Nation today.
  I think virtually all of the American people would support that. That 
is what the Bureau of Labor Statistics is supposed to be doing.
  Mr. COBURN. So let me ask the gentleman a question, if I might. Is it 
possible to balance our budget and pay off the debt; and can we do that 
and meet the obligations that we have made to the people in this 
country that depend on us?
  Mr. NEUMANN. Well, to answer that I think we need to understand how 
Social Security fits into that picture. Because, in fact, Social 
Security is a very big part of whether or not we can balance the 
budget.
  A lot of people would like to take the Social Security Trust Fund 
money, the extra money that is being collected over and above what is 
being paid out to our senior citizens in benefits this year, the money 
that is supposed to be put in a savings account, they would like to 
take that money out of the savings account, put it in a government 
checkbook, spend it, and call the checkbook balanced, even though they 
are spending the money from the Social Security trust fund.
  Mr. COBURN. But the answer to the question is we can meet the needs 
and commitments we have made in this country, and we can balance the 
budget and we can pay off the debt; is that correct?
  Mr. NEUMANN. That is absolutely correct, and we can do it without 
going into the Social Security trust fund money and spending that trust 
fund money on other Government programs.
  Mr. COBURN. As a matter of fact, we can do it putting that money into 
investments that will enhance the Social Security; is that not true?
  Mr. NEUMANN. Such as a negotiable Treasury bond or a CD, something 
which our senior citizens are very familiar with. In fact, I think it 
is very important that we understand that the money that is being 
collected for Social Security today, and I have a chart that shows that 
money we are collecting, $418 billion today for the Social Security 
trust fund.
  We are collecting $418 billion for the Social Security trust fund 
today and we are spending $353 billion on benefits for our senior 
citizens. That leaves us $65 billion surplus.
  Let me translate this into English so it is easy for everyone to 
understand. If we think about this, it is like we are going into the 
paychecks and collecting $418, like our own checkbook at home. We put 
$418 in our checkbook and write out a check for $353 and our checkbook 
is in pretty good shape. We have $65 left in the checkbook.
  The idea in the Social Security trust fund is that $65 left over, it 
is actually $65 billion, that money is supposed to go into this savings 
account. Because we all know that in the not too distant future, as the 
baby boom generation moves towards retirement, there will not be enough 
money coming into the Social Security System to pay the Social Security 
checks back out to our senior citizens.
  When there is not enough money coming into Social Security, the idea 
is we are supposed to be able to go into the Social Security trust fund 
savings account, get the money out of the savings account, put it in 
our checkbook and make good on the checks. That is no different than 
the way we would run our own house. If we have $418 in our checkbook 
today, and we have this problem coming in the future, and we spend 
$353, so we have $418 in there and we spend $353, we would put the $65 
in a savings account and, later on, when we had the problem, we would 
go to the savings account, get the money, and make good on our checks.

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