[Congressional Record Volume 143, Number 69 (Thursday, May 22, 1997)]
[Senate]
[Page S4994]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 ACCURATE MEASURE OF THE COST OF LIVING

  Mr. KERREY. Mr. President, this budget may solve our short-term 
budget problems, but my concern remains that it does not do enough 
about the long-term budget problems we face. If we want to keep the 
budget in check over the long-haul, we need to adopt policies that will 
slow entitlement spending in a rational, equitable way.
  At present, we use the Consumer Price Index [CPI] to determine cost-
of-living adjustments in our Federal tax and entitlement programs. 
There is wide, although not universal, agreement among leading 
economists, that the CPI overstates the cost-of-living and should be 
adjusted. Indeed the December 4, 1996 final report to the Senate 
Finance Committee from the Advisory Commission to Study the Consumer 
Price Index concluded that:

       The Commission's best estimate of the size of the upward 
     bias looking forward is 1.1 percentage points per year. The 
     range of plausible values is .8 to 1.6 points per year.

  Mr. President, we ought not to make the problems we face in funding 
our entitlement programs even worse by paying benefits based on an 
overstated cost of living. Spending on entitlement programs is already 
crowding out spending for the traditional discretionary functions of 
Government like clean air and water, a strong national defense, parks 
and recreation, education, our transportation system, research and 
development, and other infrastructure spending.
  If steps are not taken to reverse this trend, nearly all Federal 
revenues will be consumed by entitlement spending and interest on the 
debt shortly after the year 2000. By 2030, revenues may not even cover 
entitlement spending, much less interest on the debt or a single dollar 
of discretionary spending. This is an unsustainable trend.
  Adjusting the cost-of-living adjustments triggered by the CPI, by 1 
percentage point, would produce nearly a trillion dollars in savings 
over 12 years and $46 billion in 2002 alone. To illustrate what just 
half of this amount--$23 billion--in domestic discretionary spending 
could fund, I have a list of programs and what they will cost in 
inflation-adjusted numbers in 2002. This entire list of programs could 
be funded by half of a 1 percentage point reduction in CPI, with money 
to spare.
  I ask unanimous consent that the list be printed in the Record.
  There being no objection, the list was ordered to be printed in the 
Record, as follows:


                                               Cost in fiscal year 2002
Cleaning up environmentally damaged sites....................\1\ $6.356
Head Start....................................................\1\ 4.455
Agriculture Research..........................................\1\ 2.005
National Park Service.........................................\1\ 1.770
Safe Drinking Water...........................................\1\ 1.425
Superfund.....................................................\1\ 1.421
Fish and Wildlife Service.....................................\1\ 1.417
Clean Water Programs............................................\2\.736
NSF Education and Human Resources...............................\2\.682
Education Technology............................................\2\.370
Solar and Renewable Energy......................................\2\.281
Violence Against Women..........................................\2\.214
Juvenile Justice Program........................................\2\.185
National Endowment for the Humanities...........................\2\.123
National Endowment for the Arts.................................\2\.111
                                                             __________
                                                             
      Total in billions of dollars...............................21.551

\1\ In billions of dollars.
\2\ In millions of dollars.

  Mr. KERREY. Expressed another way, $23 billion could fund nearly all 
of the Highway Trust Fund--$25.2 billion in 2002--or all of NIH--
$14.294 billion in 2002--and all of EPA--$7.398 billion in 2002.
  Mr. President, if we are making a mistake, we ought to correct it. 
Surely if it was almost universally believed that we were understating 
the cost-of-living, we would have already taken care of that problem. 
Although the time for making this change this year appears to have 
passed, I hope that the distinguished chairman and ranking member of 
the Finance Committee will continue their fine work to see that we 
correct this error sooner, rather than later.

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