[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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