[Congressional Record Volume 143, Number 110 (Wednesday, July 30, 1997)]
[Senate]
[Pages S8314-S8355]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             BALANCED BUDGET ACT OF 1997--CONFERENCE REPORT

  The Senate continued with the consideration of the conference report.
  The PRESIDING OFFICER. Who yields time?
  Mr. DOMENICI. Mr. President, I suggest the absence of a quorum and 
ask unanimous consent that it be charged equally.
  The PRESIDING OFFICER (Mr. Coats). Without objection, it is so 
ordered.
  The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DOMENICI. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, I understand Senator Grams would like to 
speak for up to 10 minutes. I yield him that time off the bill from our 
side of the 10 hours.
  The PRESIDING OFFICER. The Senator from Minnesota is recognized to 
speak for up to 10 minutes.
  Mr. GRAMS. Mr. President, I want to give my congratulations to the 
chairman of the Budget Committee and all the others who have worked so 
hard over the last couple of weeks to work out an especially very 
important tax package, which I believe is going to be a step in the 
right direction of relieving some of the tax burden placed on American 
families over the last several years.
  So with that, Mr. President, I rise to express my strong support for 
the tax relief package that will be coming before the Senate tomorrow. 
I want to take this opportunity, again, to commend and thank the 
majority leader,

[[Page S8315]]

Chairman Domenici, Chairman Roth, and the negotiators for the 
administration for all of their efforts to bring us to this historic 
point here today.
  Mr. President, when my good friend Tim Hutchinson and I went to the 
floor as freshmen members of the House in June 1993 to introduce a 
budget plan we called Putting Jobs and the American Family First, I 
could never have guessed the long road we would have to travel to reach 
the point we find ourselves at today--on the verge of enacting the $500 
per-child tax credit that served as the centerpiece of our 1993 
legislation.
  Our proposal did not have a lot of support in Washington in 1993, and 
family tax relief did not even make the radar screen of most lawmakers. 
But that was not important, because we had support where it mattered 
the most: with the American taxpayers. In the years since, I have 
watched the enthusiasm for the $500 per-child tax credit continue to 
grow until it could no longer be ignored here in Washington. After 
being embraced by the President and congressional leaders in both 
parties, 1997 is the year in which the $500 per-child tax credit will 
finally become law.
  I have been pleased with many of the changes we been able to bring 
about in our Government during my service in Congress--but the vote 
we'll take tomorrow on our tax relief plan charts an important new 
course. This week, we fulfill what I consider to be a fundamental 
promise we made 2\1/2\ years ago to the American taxpayers: that 
Washington would finally listen to the people and let them keep a 
little bit more of their own money at the end of the day.
  This legislation is a victory--not for the Senate, or the House, or 
the President, but for the working families of America. Those are the 
men and women who go to work every day--and sometimes to a second job 
at night--in the summer when the heat is horrific and the winter when 
the car will not start and the snow is piled up to their knees. They 
put in their 8 hours and often stay for another 3 or 4 for the overtime 
if they are struggling to save for a new furnace or the kids need 
braces. They do not ask for much--just to be treated fairly. These are 
the folks who look at their checkbooks each week and wonder ``Where did 
it all go?''--the same folks who stare at their tax returns each April 
and ask ``How come the government takes so much?''
  Thanks to the $500 per-child tax credit, the Government will be 
taking a little less on tax day.
  Mr. President, I am pleased with the improved $500 per-child tax 
credit provision contained in the fiscal year 1998 reconciliation 
conference agreement. It is a needed improvement over the Senate-passed 
version, which I voted against in June.
  At that time, I opposed the Senate tax bill because of the way it 
restricted the use of the $500 per-child tax credit, and in the 
process, diluted its value. The Senate plan offered a $250 tax credit 
in 1997 for children under the age of 13, which increased to $500 per-
child in 1999. For children age 13 to 16, the tax credit was available 
only if parents dedicated it toward their children's education. While I 
fully support the idea of putting away those tax credit dollars for 
college, I do not believe the Government should mandate exactly how the 
taxpayers should spend their own money. That is not the place of 
Congress and the President.
  When I cast my vote against the Senate's tax cut bill in June, it was 
to send a signal to budget negotiators that we must craft a $500 per-
child tax credit that does more for working families. With the recent 
improvements made by the House and the Senate, it is clear Washington 
finally got the message--as a result, more families will keep more of 
their hard-earned tax dollars.
  The $500 per-child tax credit remains the centerpiece of the our tax 
relief plan. Under the agreement, working families will be provided a 
$400 per-child credit in 1998, which increases to $500 per-child in 
1999 for dependent children below age 17. The credit is phased out for 
families earning more than $110,000 per year. The result is that the 
families of 43 million children nationwide will receive more than $70 
billion in tax credits over the next 5 years.
  It is the Nation's middle-income families who will benefit most once 
this provision is enacted. In my State of Minnesota, nearly 700,000 
children from middle-class families will be the primary beneficiaries. 
Those families will see over $300 million in tax relief. That is $300 
million that will not go to Washington to fund the priorities of the 
Federal Government. Instead, families can use that money to fund their 
own priorities, whether that is groceries, medical expenses, insurance, 
or education.
  An additional 170,000 Minnesota children will receive the tax credit 
under this expanded version than would have under President Clinton's 
plan.
  Another notable improvement is that the agreement broadens the child 
tax credit to low-income families.
  When Senators Hutchinson, Coats, and I introduced our most recent 
version of the child tax relief legislation earlier this year, we urged 
Congress to provide immediate tax relief to families effective in 1997, 
provide it to as many families with children under age 18 as it 
possibly can, regardless of their income, and make it available against 
all taxes paid by workers, including payroll taxes. I am pleased the 
agreement adopted our proposal and offset this tax relief by tightening 
the earned income tax credit.
  For a typical family of four, the $500 per-child tax credit means 
$1,000 in tax relief, which would pay 1 month's mortgage and grocery 
bills, or 11 months' worth of electric bills, or nearly 20 months' 
worth of clothing for the children.
  More significantly, the $500 per-child tax credit will reverse a 16-
year tide of rising Federal taxes to finally reduce a family's total 
Federal income tax burden. This is the first tax cut in 16 years, but, 
in the meantime, there have been 10 tax increases in that 16 years. 
This begins to reverse the tide.
  For a family of four earning $30,000 per year, $1,000 in tax relief 
would cut their income tax burden by 51 percent. Meanwhile, a family of 
four earning $40,000 would see their tax burden cut by 30 percent, a 
family earning $75,000 would see their tax burden reduced by 12 
percent, and a family earning $100,000 per year would receive a tax cut 
of 7.4 percent.
  This tax relief will restore some fairness for the taxpayers of my 
State. Over the past several decades, the Federal tax load on Minnesota 
residents has grown larger and larger while their share of Federal 
spending has gotten smaller and smaller. Minnesotans last year paid an 
average of $5,563 per person in taxes to the Federal Government, $203 
more than the national average. But Minnesota received back only 78 
cents in Federal spending for every $1 its taxpayers sent to 
Washington, among the lowest return of any State. This regional 
disparity is an additional financial burden to Minnesota residents.
  Mr. President, I also applaud the inclusion in the agreement of 
important pro-economic-growth and pro-prosperity tax provisions such as 
capital gains relief and estate tax reduction. Although these tax cuts 
are rather small and hardly keep pace with inflation, it is nonetheless 
a move in the right direction. These tax cuts will spur job creation 
and economic growth. In doing so, they will reduce the cost of capital, 
increase worker productivity, and provide higher salaries for the 
American people.
  However, I believe Congress could have done much more in the way of 
tax relief for working Americans if Washington would just spend less 
and allow working families to keep more of their hard-earned money.
  I personally would prefer a full and immediate $500 per-child tax 
credit for all families with children under 18 without any 
restrictions, zero capital gains tax, elimination of the death tax, and 
ending double taxation. But those battles will have to wait for another 
day.
  My greatest disappointment with the tax deal is that it contains no 
real tax reform. Instead of simplifying the Tax Code, this tax bill 
increases its complexity. Tax policy is still used as a tool for the 
redistribution of private incomes and for social engineering. Nothing 
is done to end the IRS as we know it. Unfortunately, these defects 
greatly diminish the positive impacts of the tax bill. I pledge to 
continue to work with my colleagues on real tax reform in the future.

[[Page S8316]]

  Although the tax relief in the improved bill is still tiny when 
compared against both the total tax burden of the American taxpayers 
and total Government spending, it is the first time in 16 years that 
the Government has acknowledged that working families are being heavily 
overtaxed. That is reason enough to celebrate.
  Mr. President, ever since the people of Minnesota sent me to 
represent them in Congress--first in the House and now in the Senate--
Americans have been writing me to share their dreams for themselves and 
for their nation. Their letters fill dozens of files in my office. Some 
of the most passionate stories have come from families--working 
families who heard that I had proposed a $500 per child tax credit and 
wanted to tell me what a difference such a seemingly simple piece of 
legislation would make in their lives.

  I would like to share just a few of their letters. A family in 
Illinois wrote:

       We are a one-paycheck family struggling to keep our heads 
     above water . . . It is encouraging to know there are members 
     of the government who understand our struggle and are working 
     on our behalf.

  ``Thank you for your efforts in trying to help families receive a tax 
credit of $500 per child,'' wrote another family, this one from Texas. 
``As parents of three children, we truly appreciate your endeavors in a 
time when other politicians are trying to get more and more of our 
hard-earned money.''
  From Michigan came this letter:

       There are not very many people in Washington who remember 
     the pro-family community--and even fewer in Washington who 
     will support the family.

  And a family in my own State of Minnesota sent me this heartfelt 
letter:

       As the mother of seven children with one income, I am 
     especially interested in the $500 per child tax credit. We 
     refuse to accept aid from federal or state programs that we 
     qualify for.

       We believe this country was built with hard work and 
     sacrifice, not sympathy and handouts. We also believe that we 
     can spend this money more effectively than the government, 
     which has only succeeded in creating a permanent dependent 
     welfare class with our money over the last 40 years. Let us 
     get back to basics.

  Let us get back to basics.
  I think ``getting back to basics'' is what this debate is all about, 
Mr. President. The American family has always been our Nation's most 
basic level of government. The power begins with the family and it 
ought to remain with the family at the end of the day. By enacting the 
$500 per child tax credit into law, Congress and the President will at 
last send a message to real Americans--the folks outside the confines 
of this Capitol--that we understand what it means to be a working 
family in the 1990's, that we know government demands too much while 
delivering too little, and that we can put aside the politics that too 
often divide us and do what is right by the American taxpayers.
  Mr. President, the $500 per child tax credit is not going to make 
anybody rich, but we cannot measure its value in just dollars and 
cents. After 16 years without a drop of tax relief, we are finally 
going to let the taxpayers keep a little bit more of their own money at 
the end of the day. From the vantage point of this Senator, that is a 
priceless investment in the American family.
  Again, after 4 years of hard work to bring about at least this 
portion of the tax bill, which has been called ``the crown jewel,'' we 
are going to finally succeed in giving the American family some hard-
earned tax relief.
  Thank you, very much, Mr. President.
  I yield the floor.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, thank you for recognizing me.
  I want to make an announcement for Senators. The bill--the very large 
bill that you have seen kind of appear on the desk--is available to 
those who have access to the Internet. You can view the bill through a 
link in the Budget Committee office. You can do it in your own offices 
on the Budget Committee home page, and the bill will be here no longer 
than a half-hour from now in sufficient numbers for those who want to 
view it in its entirety.
  As you know, the House is voting on the bill now--debating and voting 
on it. Then it will officially be transmitted to us. We have decided to 
start debating this so that we could all use this time during the day 
and not have to be here all night to get this done in a timely manner.
  Mr. President, I want to make a few observations. Obviously, Senator 
Lautenberg will have his, and then I would like very much to say to 
Senators that we are using time out of the 10 hours allowed.
  I understand from our majority leader that we intend to get this bill 
done, if possible, tonight; if not, clearly tomorrow morning. So that 
means we are going to spend a lot of time here on the floor between now 
and the time we quit tonight.
  So, if Senators have comments they would like to make, or if they 
have questions, I would particularly suggest if you have questions with 
reference to the Byrd rule--one of the rules that apply to these bills 
that do not apply anywhere else because it has to do with a special 
test for extraneousness--I wish they would talk with us, or talk with 
Senator Lautenberg's staff or our respective leadership offices about 
the Byrd rule violations that we are aware of and kind of documented 
now. We would all like to have a chance to work together on them. When 
it comes to that issue, I would like to make the following statement so 
that everybody understands. I am sure my friend, Senator Lautenberg, 
will concur.
  The White House has been involved from the very beginning in the 
preparation of this legislation. And from time to time both the 
Republicans and the White House have been involved with Democratic 
legislators. But let me make it very clear. This is a historic document 
in another procedural context because last evening the White House 
staff stayed until late in the evening--in fact, until the early 
morning hours--before they would sign off on this. They read every 
single word of legislative language. And, indeed, they read every word 
in the accompanying report language. Frankly, I have been around here a 
long time and working with administrations and the White House with 
legislation up here, and I think this may be the first time that has 
ever happened.
  I only say that because, obviously, it was hard to put this package 
together. In the process there are many wordsmiths, and there are many 
things that have to be put together in terms of language. But every bit 
of it, including those few instances where there are Byrd rule 
violations--and that sounds rather ominous, but it really means that we 
have a technical rule that says you ought not be legislating in this 
bill. You ought to be doing deficit reduction. And on some occasions it 
is hard to keep that altogether and not fall into something that is 
legislative in a 1,000-page document.
  So let me stop the process part, and just remind Senators who would 
like to speak today if you have some thoughts and things that you want 
the public to hear from the floor of the Senate, as soon as you can 
start calling us for time, we would be very, very glad to accommodate. 
And I think we can accommodate most people on a rather short notice 
because from my standpoint I have said an awful lot. I don't intend to 
be here on the floor saying a lot more. I am just trying to get this 
bill completed.
  But let me start by saying this morning that the headline in the 
Washington Post, which has not been very supportive of this, used five 
very nice words. They said, ``This is a Big Deal.'' Maybe they don't 
like the ``big deal,'' but it is nice that they recognize what all of 
us know--that this is a big deal for the American people. It carries 
out a bipartisan budget agreement that in itself was historic between 
the President and the leadership of Congress back in May. It is a big 
deal in this town when we could do what the American people asked us to 
do, and that is to work together to live by our commitments, to reduce 
spending and reduce taxes, and get our work done.
  So it is pretty obvious that this is a big deal. It balances the 
budget for the first time in 30 years. And I know there are many who 
will continue to be skeptical until that day arrives. Frankly, I am 
here saying I am a pretty good budgeteer. I understand all of these 
nuances about budgeting, and how the economy impacts on it--how 
inflation impacts, how the growth in the economy impacts. But absent a 
real major

[[Page S8317]]

catastrophe, which nobody can plan for, this budget will be balanced. 
Frankly, it is because of a number of things. The economy is doing 
splendidly. That could change. But it looks like things are in place 
like they haven't been for a long, long time in terms of those things 
that make an economy go into recession or into an inflationary cycle. 
And we are not growing out of control. It is kind of a measure of good 
solid growth.

  So I think we are entitled to use conservative estimates for the next 
5 years, which we have done, Mr. President. The economics in this 
bill's projections for the future are not overly optimistic. So when 
you add it up, for those who say we have some new programs and we spend 
some money, that is correct. For some there isn't enough by way of 
cutting the budget in this--cutting the expenditures. But I will get to 
that in a minute.
  Just remember, it is a Democratic President elected by the people and 
a Republican-controlled Congress with Democrats in the minority who had 
to put a package together that did something significant, or spend the 
next 3\1/2\ years, in my opinion, doing nothing. We would have been 
around here fighting. We would have at every juncture on every bill 
have had stalemates. We might have even closed down Government again.
  So from my standpoint, if you look at 10 years--and I am not saying 
everything in these 10 years is locked in stone, but 5 years of it is--
we reduce what we would have otherwise spent by about $1 trillion. This 
time we have not included in that estimate the savings that will come 
from debt service because as you reduce the amount that you borrow you 
take off of that baseline that had calculated in it interest.
  Yes, this balanced budget is a bipartisan budget agreement. We 
followed it as well as any differing groups could follow it. We put it 
together with a different group than had to implement it. So that is 
not easy, for they always second-guess us and claim they should have 
been in. I wish everybody in the Senate could have been in on the 
negotiating. I wish every chairman could have been. I guess as I wish 
it I speak the truth--that had they we wouldn't be here. That is the 
reality of trying to do this kind of thing.
  But we said in that agreement that we were going to spend $24 
billion. We did agree to provide $24 billion in new spending for 
children's health programs for insurance. We also agreed to make 
changes in last year's welfare reform, which results in some additional 
national spending.
  I want to correct myself. The bipartisan agreement said $16 billion 
in new spending for child health care coverage. The U.S. Senate voted 
in $24 billion, and the Senate version prevailed in the final outcome 
of negotiations.
  I note on the floor of the Senate now, along with Senator Lautenberg, 
is the distinguished Senator from Delaware, Senator Bill Roth.
  Let me make sure that everybody understands that his chairmanship and 
his committee made this the big deal that it is. I say to the Senator, 
I just commented that finally the Washington Post, after being against 
this budget, at least recognized one thing. They said, ``It Is a Big 
Deal.'' And I am saying there would have been no big deal without the 
Senator from Delaware and the marvelous bipartisan committee that he 
has. I thank him right here publicly for that.
  Let me just go on through. After Senator Lautenberg speaks, our 
distinguished chairman of the Finance Committee, which had jurisdiction 
over about 85 percent of this bill, wants to speak. I want to yield 
quickly.
  I want to say, however, that Republicans for a long time said we 
ought to balance the budget. It has now become everybody's cry. The 
President wants it. Many Democrats want it. But I take a great deal of 
pride in behalf of Republicans in my capacity as chairman and ranking 
member of this Budget Committee.
  I have been trying to get there for a long time. And I think we have 
done a great job as Republican leaders in pushing this. That is not 
trying to detract from those who have joined us, including the 
President of late. We also wanted some tax cuts.
  Many of us thought American families were in desperate need of some 
help--especially middle-income American families with kids. We have 
done that. Again, even though most of that originally started on our 
side of the aisle, I don't tend to, nor do I want to, denigrate the 
fact that it has broad support on the other side, and the President of 
the United States is supportive of it.
  The capital gains differential has been part of what Republicans 
thought we should have in this Tax Code for decades. As a matter of 
fact, it is very interesting that we got a capital gains differential 
in this bill. We joined the industrial nations of the world with 
capitalistic societies that have moved that way already, and I think 
that bodes well for the future.

  Everybody knows the other provisions that my friend, the chairman, 
will speak to. But I just wanted to make the point, for those who seem 
from time to time to give up on causes and to be for them for a few 
years and say we can't get them done, I believe Republicans ought to be 
proud of the fact that we have stood pretty fast for those issues, the 
ones I just described, and some others, and most of them are coming 
true here.
  That is not to say some issues that the Democratic Party and this 
President have pushed very hard for are not in this bill, also. I am 
sure, knowing my friend, Senator Lautenberg, he will remind us--and 
that is what he ought to do. And those are some things I want, too. I 
am not running around apologetic about trying to cover children that do 
not have health insurance. I am not sure we know how to do it quite 
right yet, I say to the occupant of the chair, who shares that concern 
with me, but I think we have to get started, and we have done that.
  One last thing is we all know the Medicare Program for the seniors of 
America--39 million of them almost right now--we know that program is, 
for many of them, something they build their confidence on as they get 
older and as some of them get sick, and as they get sick, they know 
they have this great hospitalization program. Now, there is no one who 
ought to be anything but proud of the fact that we have taken a system 
that is falling apart financially, and we fixed it for 10 years. It 
probably would have gone bankrupt in 2, maybe 2\1/2\ years, so we fixed 
it for 10 years.
  Now, I am kind of tempted to say that is a big deal. But I think it 
is. Now, it is not fixed permanently. It still continues to have big 
problems out there in 15 years, 20 years, but, frankly, I am not 
apologizing that a budget resolution and essentially this plan did not 
solve that. Actually, I do not believe it could have. I believe it is 
such a big issue in and of itself that it will be solved only when a 
bipartisan national commission, which is provided for in this bill, 
goes out into America and tells everybody the problems and comes up 
with some solutions that are bipartisan that Presidents and Congress 
will support. We started that here.
  But I believe in the meantime we had to make that program more 
efficient. We have done that. In fact, we made it $115 billion more 
efficient by changing the rules of the game. In the meantime, we are 
trying to give seniors the best of health care at the most reasonable 
prices, putting some competition into the program, and that is there, 
alive and kicking and strongly voicing itself in this bill--
competition.
  So there are HMO's, there are professional provider organizations, 
there are private fee-for-service programs, and there are PSO's. It 
also has a demonstration program, a medical savings account of 390,000 
beneficiaries.
  Now, when you put all that together, along with a new $4 billion 
preventive program that I am not going to discuss in detail, we have 
done fairly well by the people who pay for Medicare, the working 
people, and pretty well by the seniors. You package this all together--
a balanced budget, which means we are not going to have our children 
paying our bills too much longer. That is what a deficit and a debt 
are. It is asking our kids and our grandkids to pay our bills. A 
balance says we are not going to do that anymore.
  Now, it is a long time coming, and we owe a lot of money, so we 
cannot stand up and say to our kids they are not going to pay some of 
our bills, because the debt is so big we cannot get rid of it. But at 
least we can stop it. So that was No. 1.

[[Page S8318]]

  No. 2 was fix Medicare, and I have described it.
  No. 3 was to make sure that we had a tax bill that was fair to the 
American people. Frankly, after all the bickering on the edges--and 
that is what it all was, on the edges. All this argument about how many 
children are covered and how far down do you go were really on the 
edges, small, small things, small numbers. The people that need tax 
cuts and tax breaks are the American people earning between $25,000 and 
$30,000 and $110,000. They are the middle-income Americans, two 
jobholders, two professionals, two people working, and they are paying 
the taxes, they are following the rules, and they haven't had anything 
from their Government saying we would like to make it a little easier 
for you--until this bill.
  Now, they have three very significant new things they can look to. It 
isn't like we are giving them a present. It is saying to them, keep 
some of your own money and let Government grow less and let you make 
your decisions on what you do for your children rather than have us 
build a bigger and bigger Department of Education. Those are the kinds 
of tradeoffs that are going to occur and are starting to occur, 
although, when it comes to education, this bill is strong on college 
education, strong as anything you can have. When it comes to the new 
programs appropriations, we have been very generous. We have been very 
generous to the education programs that our country has.
  I am not sure before we vote on this that I will have another chance 
to thank everyone, so I just wish to thank Senator Lautenberg, and I 
thank our distinguished Republican leader--he did a great job--Senator 
Roth, and all the other chairmen, our House counterparts, including 
Representative Kasich.

  But I want to make one statement on the floor. It might seem it ought 
to be done on the House floor, but I want to make it here, and I think 
my friend, Senator Roth, would concur. The Speaker of the House, Newt 
Gingrich, in negotiations from the beginning until the end, was 
absolutely a fantastic leader. I have to say to those who doubt, 
because he was under a lot of pressures, I did not notice for a minute 
that had anything to do with his single-mindedness, his tremendous 
intellect and the way he could put things back together and get us 
moving in the direction of getting things done. So my compliments to 
the Republican leadership in both Houses from my side, and obviously we 
had great support from Democrats.
  At this point I am going to yield the floor.
  Mr. ROTH. Could I ask the distinguished chairman to yield just for a 
minute?
  Mr. DOMENICI. Of course, yes.
  Mr. ROTH. There are many people who are responsible for bringing 
together this important piece of legislation, and I strongly agree with 
what the distinguished Senator from New Mexico said about the Speaker 
and the majority leader. They provided not only strong leadership but 
ideas, were able to move ahead, and I have to say I could not agree 
more that the Speaker showed every ability of providing the kind of 
leadership we needed from the House in order to get this complex piece 
of legislation through.
  I would just like to say to my distinguished friend and colleague, 
Senator Domenici, that the legislation would have gotten nowhere if it 
had not been for him. I know no one in the Senate, or House for that 
matter, that has a better understanding of the budgetary process, knows 
the issues with which we are dealing and who has devoted, what is it, 7 
or 8 months' time to getting this job accomplished.
  I would also like to say in the same context I think Bill Hoagland 
has been a tremendous strength for this whole process.
  I, too, join the Senator in congratulating the ranking member, my 
colleague and friend from New Jersey, for his outstanding work.
  Mr. DOMENICI. I thank the Senator very much.
  Mr. LAUTENBERG. I thank the Senator.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, I am pleased to join the chairman of 
the Budget Committee, Senator Domenici, in supporting the conference 
report on this budget reconciliation bill, which, along with the 
conference report on the tax bill, will finally implement a bipartisan 
plan to balance the budget.
  I have to ask Senator Domenici, because he talked about the five 
words that appeared in the Washington Post, I wonder whether it read 
like this. I heard him say, ``This is a big deal.'' Or did it say, 
``This Is A Big Deal?'' I wasn't sure quite where the emphasis was. But 
I assume it was the way it was intended.
  Mr. DOMENICI. The way I said it.
  Mr. LAUTENBERG. The way the Senator read it himself as opposed to, 
``This is a Big Deal?''
  I want to say to Senator Roth, who was pulled from so many 
directions, I was amazed to see him arrive in one piece each day. He 
listened with great patience--great patience and great interest. 
Everybody is pleased. I will speak about it from the Democratic side. 
People don't realize, when there is a majority and a minority, the 
minority doesn't always get a chance to present their views. But Bill 
Roth, Senator Bill Roth of Delaware, is known as someone who is a fair-
minded person, and while he would not always agree, he would almost 
always listen. I have never found him to say ``no,'' and I appreciated 
that. I think it produced a very good product. It is, under the 
circumstances, I think, perhaps the best that could have been gotten. 
All of us wish there were other things in there--everybody. If you ask 
any Member of the Senate whether they did not think there was another 
thing that should have been in or another thing that should have been 
out, they would have, I guarantee, a menu of things they would like to 
select from.
  I am so pleased that we are joined in the Chamber by the ranking 
member of the Finance Committee, my good friend and colleague from New 
York, Mr. Moynihan. Senator Moynihan is a man with vast knowledge about 
so many things that I often say I would enjoy, even with all my white 
hair, going to college with Professor Moynihan and hearing his views on 
things. But there is always a background of information that adds so 
much to the dialog and the debate, and I congratulate him for his role 
and for his willingness to hear the arguments and to work to try to get 
a consensus in the legislation which we now have in front of us.
  Mr. DOMENICI. Will the Senator yield without losing his right to the 
floor?
  Mr. LAUTENBERG. Be happy to.
  Mr. DOMENICI. I note the presence of Senator Moynihan, and I had not 
said anything about him in his absence. I would like now to say there 
are many points, as you look at the last 7\1/2\ months, when you would 
say this is critical, this is where it might end. And I believe the 
thing that gave us momentum to get it done was the Finance Committee's 
bipartisan addressing of most of the issues in this bill.
  Now, I am sure the Senator from New York didn't get everything he 
wants, but I believe it was one of the big turning points when the 
Senator joined with Senator Roth and between the two of them had such a 
large cadre of Senators from both sides supporting some very, very 
powerful things, and I thank the Senator personally for that.
  Mr. MOYNIHAN. Mr. President, might I thank with great gratitude the 
senior Senator from New Jersey and my friend from the day I entered 
this Chamber, the chairman of the committee. They speak to what I think 
is an important fact. But, of course, the person who made it possible 
was Senator Roth, the chairman of the committee. I was with him in this 
regard and proud to have been. I thank Senators.
  Mr. DOMENICI. Mr. President, could I say that under the rule under 
the Budget Act somebody is designated to manage, and I am it for today, 
but I can give that to someone else. I am giving that to Senator Roth 
until I return, and he will be our floor leader now. I thank the 
Senator.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, I will continue to extend 
congratulations to some who are not here. I have to take my time to 
salute the efforts of Senator Daschle, who was ever present in his 
encouragement to get this job done--let's see what we can negotiate 
together, let's see if we can make this adjustment or that adjustment, 
or talked to his counterpart on the other

[[Page S8319]]

side. And I want to say for Senator Lott, the majority leader, he, too, 
was someone who wanted to get this bill behind us, get this job done, 
and he has shown his interest in doing that as he runs the Senate from 
the majority leader's position that we do move things along. There were 
Members on both sides of the aisle who also helped, too numerous to 
mention, but I think it is fair to say that those whom we have talked 
about had a significant role.
  Pete Domenici and I were among the four elected representatives to be 
negotiating, and we were often closeted days at a time. Though the 
atmosphere got stuffy, I think neither one of us did, and we were able 
to continue talking in a civilized fashion.
  The bill before us is the culmination of those many months of intense 
effort and people of both parties deserve to be proud of this 
accomplishment. This budget proves that when leaders with good will 
come together, we can overcome partisan divisions and find common 
ground. That is good news for all Americans.
  I will say this. We have gotten a lot of salutations, a lot of 
compliments about getting this job done. Threaded through those 
comments were the kinds of remarks that might surprise, like: Finally, 
the bickering has stopped, there is no partisanship involved; hurrah, 
the Senate and the House are working to get our interests put up front. 
I think that was kind of a noteworthy thing. It's not that we spend all 
of our time in the boxing ring here. But sometimes, when people's 
positions on legislation get too entrenched, they lose sight of the 
fact that we have to stop the argument and get on with producing a 
product. So, I think the Nation is going to be better off because of 
this.
  The budget agreement is not perfect. It is not drafted exactly as I, 
as I said, nor any other Senator would have written it. But it is an 
honorable compromise that, on balance, is an enormous step forward. It 
will lead to the first balanced budget in this country since 1969. It 
invests in education and helps ordinary Americans afford college. It 
provides health coverage for many of America's uninsured children. And 
it provides tax relief for middle-class families. It provides important 
protections for kids and legal immigrants, people who were invited to 
come here and who later became disabled. And it helps accomplish 
something that President Clinton has had on the agenda for a long 
time--to move people from welfare to work, and to provide the means 
with which to make that transition.
  More generally, it shows we can both be fiscally responsible and true 
to our highest values as a nation. This budget agreement will produce 
roughly $900 billion in net deficit savings over the next 10 years. It 
will give us the first balanced budget in a generation. It will build 
on President Clinton's tremendous success in reducing the deficit. And 
one cannot ignore--and Senator Domenici knew this was coming--one could 
not ignore the incredible accomplishments, economic accomplishments 
that have been made since President Clinton has been in office--with a 
budget deficit that was at $290 billion when he took over in 1993, and 
at the moment looking like it is going to be something less than $50 
billion for the year 1997. It will build on President Clinton's 
tremendous success in reducing that deficit. It will build on the 
success that we have had in getting new jobs for people in our 
country--12 million new jobs created. And the stock market--one can't 
help but notice that indicator. I noticed today, after hearing the news 
and yesterday after hearing the news, the market continued to move 
upward. Inflation is in check. People feel very good about the strength 
of the United States, leading the world's most developed countries in 
competing in the marketplace. That is a terrific record upon which to 
build.
  This balanced budget amendment is an extension of all of those good 
things. But I think the President is due a lot of credit for having 
brought that deficit down to where it was, based on his hard work and, 
yes, a turn of very good events at the same time. But it was his 
foresight and his planning that helped enable us to get to this point.
  The budget agreement, also, will move our Nation into the 21st 
century by providing the largest investment in education in 50 years. 
I, as a recipient of the benefits of the GI bill--I served in the war. 
I don't always like discussing which one. Sometimes people ask me if it 
was the Spanish American? It was not. It was World War II. But, without 
the GI bill, my widowed mother, age 36 when my father died, and the 
poor circumstances in which our family found ourselves when I was 
discharged from the Army--never, never would have enabled me to get a 
college education and get a start on a career that has been very 
satisfying for me and, I hope, worthwhile for the country. So I saw the 
value of helping someone get a head start in life, someone getting an 
education and being able to contribute to our society. That is what I 
want to see us do and the President certainly led us to that point.
  The tax bill we are going to be considering also will include a 
$1,500 tax credit to make the first 2 years of college universally 
available. There will be a tuition tax credit for all working Americans 
who want to pursue lifelong learning, continue to learn. That enriches 
the mind, enriches the body, and enriches the quality of life. That is 
what we have seen in so many cases. If you look in the universities and 
research laboratories and so forth, you see the people who continue to 
learn and who gain vitality and youth, even as they do that. These 
provisions are critically important to the future of our economy.
  In addition, the budget agreement also includes $24 billion for 
children's health care, the largest increase in children's health care 
since the enactment of Medicaid in 1965. This will help provide health 
insurance to millions of uninsured children and it is a tremendous 
achievement.
  The budget agreement also protects Medicare and extends the solvency 
of the Medicare trust fund by roughly another 7 years. Unlike earlier 
proposals, it does not ask senior citizens to bear unfair burdens and 
it doesn't threaten the quality of their health care. Instead, it 
reforms and modernizes the program and includes significant new 
preventive benefits.
  We all know there is going to be a more thorough review of Medicare 
in the years ahead, to see whether we can comprehensively make changes 
that will guarantee that solvency for as long as one can imagine.
  In addition, the agreement provides tax relief for the middle class. 
As we will discuss when we turn to the tax bill, the agreement provides 
a $500 tax credit for children under the age of 17, to help families to 
be able to bring up their children in the fashion that would provide 
them with sustenance and direction, and perhaps help them get started 
on their education. Importantly, that credit will be available to 
working families with lower incomes. This sounds a little mysterious 
but there are people whose incomes are supported by assistance from the 
Government, earned-income tax credit, in which a family that is below a 
certain level of income gets a stipend or a tax refund from the 
Government. It often makes their lives livable. But there was a huge 
debate about whether or not this credit would be available for people 
who do not pay taxes in the first place. But we know they are working 
families and they do pay payroll taxes and we decided, jointly, that it 
would be appropriate to give some credit on those payroll taxes that 
they pay.
  We, the Democrats, made that a priority. With support from our 
Republican friends we won an important victory for millions of ordinary 
Americans.
  The conference report also restores a basic level of fairness for 
people who have come into this country legally, who have obeyed the 
law, paid their taxes, and then fate delivers them a disability whether 
through accident or just sickness. Last year the Congress pulled the 
rug out from under these people and eliminated their disability 
benefits; for some, the only provision that they have that enables them 
to get along. But today we are restoring that basic safety net. It is 
the right thing to do. As the Senate sponsor of this amendment I am 
particularly pleased that it will be enacted into law.
  Another important section of the conference report will protect 
30,000 disabled children who otherwise would lose Medicaid coverage. 
This corrects a serious defect in last year's welfare

[[Page S8320]]

legislation and will make a huge difference for these children and 
their families. I am also pleased that the budget agreement includes a 
renewed commitment to environmental protection. We will be enacting new 
incentives to clean up thousands of contaminated, abandoned sites in 
economically distressed areas. That not only will improve the 
environment, but it will help encourage redevelopment of these areas, 
known as brownfields.
  I have seen it in towns in New Jersey, industrial cities that had a 
glorious past but now suffer from the delinquency that often results 
from industrial pollution. Some of these communities have had these 
sites, dormant sites, small sites that were unused, yet with people 
begging for work not blocks away, able to get there; people begging for 
retail facilities--they are not used. We have seen, in New Jersey, 
where we have cleaned up a few of these sites, good retail activity--in 
one site in Hackensack, NJ, with a couple of hundred people working in 
a discount store, a marketplace that people can go to, to get their 
goods, buy their food. It has been a miracle, almost, to see these 
things. And it is, often, for very small sums of money.
  So we now have brownfields that I worked very hard on. It's now in 
place. It's a win-win approach that will make a difference for 
communities around the Nation.
  Additionally, the conference report includes important provisions to 
move people from welfare to work as I mentioned. One million long-term 
welfare recipients stand to benefit from this initiative. And the 
Nation as a whole will benefit, as more Americans leave welfare and 
become productive members of our economy, lift their heads high, lift 
their spirits, provide some vision for themselves and their families. 
It is a wonderful vision and I am pleased to see we are putting the 
resources there to make it happen.
  Mr. President, I am going to leave to others the discussion on some 
of the other details of this legislation. But I once again take the 
opportunity to congratulate the President, President Clinton, for his 
outstanding leadership in this effort. We are here today on a 
bipartisan basis only because the President decided it could happen and 
he wanted to make it happen. His people were all over the place, 
working alike with Democrats who occasionally disagreed and Republicans 
who occasionally disagreed. He brought us all together and we are 
grateful for that. I think his commitment will be acknowledged for many 
years to come.
  Mr. President, I don't think, as I said earlier, there is anyone who 
would say they are 100 percent happy with this agreement. But, while no 
one sees it as perfect, everyone should see it as good. It is fair, it 
is balanced, and it will serve our country well. It will balance the 
budget. It will invest in education and training. It will provide tax 
relief to the middle class. It will protect Medicare. It will provide 
health care coverage to millions of children. It will throw a life vest 
to disabled legal immigrants. It will invest in environmental 
protection, move people from welfare to work, and will make life better 
for millions of ordinary working Americans.

  So I urge my colleagues to put aside as much challenge as they can. 
Yes, everybody in this place is free to make their statements, to say 
what they want. But I hope in the final analysis they are going to 
support this budget agreement enthusiastically, because it sends a 
message to the American people. It will say yes, this wasn't something 
that was nurtured through an inch at a time. This is something that was 
supported by people across the room from different States and from 
different parties. That is the way it ought to be. It is the right 
thing for America and I am proud to have been a part of it.
  With that, Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Gregg). Who seeks recognition?
  Mr. ROTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.


                         Privilege of the Floor

  Mr. ROTH. Mr. President, I ask unanimous consent that Rick Werner, a 
detailee to the Finance Committee from the Department of Health and 
Human Services, be granted the privilege of the floor for the duration 
of the debate on this conference report.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ROTH. Mr. President, the budget reconciliation conference between 
the Senate and House has come to an end. All sides have weighed in. The 
process has been long and involved, around the clock, through the 
weekends. But I must say the result is well worth the exercise.
  What we have achieved is a balance, a carefully crafted compromise 
between the Senate and the House, between Republicans and Democrats, 
between Congress and the White House. I can say with certainty that no 
Senator, no Congressman, not even the President got everything he or 
she would have liked. Undoubtedly there are specifics in this final 
package that I would prefer to have seen written differently. But I can 
say that, while there were necessary compromises to achieve balance and 
to deliver the budget reconciliation to the American people, there was 
no compromise on principle. Differences? Certainly, but I cannot 
remember the last time I saw such a positive, bipartisan willingness to 
work together in a budget effort.
  This, I believe, is because there has been a profound change in the 
nature and character of Washington. Two recent proclamations 
demonstrate this change. The first was President Clinton's declaration 
in his State of the Union Address that the era of big Government is 
over. And the second came from our distinguished colleague, Senator 
Daschle, when, during this debate, he agreed that the question in 
Congress is no longer whether or not taxes should be cut, rather a 
question of how much they should be cut.
  Cutting taxes and achieving a balanced budget have long been 
Republican objectives. For years now, we have advocated the need to 
change the way Washington does business. Now President Clinton and the 
distinguished minority leader demonstrate the growing bipartisan 
consensus on these objectives, objectives that underscore this 
reconciliation package.
  It is a strong first step. It signals that the era of big government 
is over. Certainly government has its place. There are moral and 
contractual obligations that the Federal Government must maintain with 
the American people. Many are enumerated in the Constitution. Others, 
like Medicare and Medicaid, are more recent and have become critically 
important to those who depend on them now and to those who rely on them 
for the future.
  Having said this, I believe a clear and growing majority realizes 
that the Federal Government is not the answer to all that challenges 
us. In fact, in some cases, the Government is shown to be the problem, 
particularly when it comes to waste, fraud, abuse, inefficiency, and a 
top-heavy, unresponsive bureaucracy. The ability of both sides to 
compromise on this bill demonstrates that Washington acknowledges this 
reality and that Washington is responding to the attendant frustration 
and legitimate concerns felt by Americans everywhere.
  Beyond signaling an end to big and inefficient government, this 
package meets several other shared criteria. It places us squarely and 
honestly on the road to a balanced budget by the year 2002. We all know 
how important this is. The United States has not balanced a Federal 
budget since 1969. This, despite the fact that our Founders made it 
clear that saddling future generations with debt is immoral. According 
to Thomas Jefferson, the question of whether one generation has a right 
to bind another by the deficit it imposes is a question of such 
consequence as to place it among the fundamental principles of 
government. Jefferson said that we should consider ourselves 
unauthorized to saddle posterity with our debts; we are morally bound 
to pay those debts ourselves.
  This budget reconciliation package is the first in years that puts us 
back where we must be. It is balanced. It begins to address the dilemma 
of big government's licentious legacy, a legacy that burdens every man, 
woman, and child with almost $20,000 in public debt. I am happy to say 
that our majority leader, Senator Lott, made it clear at the beginning 
of the 105th Congress that balancing the budget in 5 years would be one 
of our top priorities. Mr. President, we have delivered on that 
promise.

[[Page S8321]]

  Our third objective has been to strengthen the programs that would be 
influenced by our actions. The reforms to entitlement that are 
contained in this package are, indeed, historic. We make significant 
and important changes to Medicare and Medicaid. We strengthen 
assistance to children. We return authority and means to our States so 
they can better meet the needs of their citizens. It was not enough to 
simply change entitlement programs to reduce their rate of growth. We 
sought in the process to improve, to strengthen them, to preserve them, 
and, again, we succeeded.
  Let me give you the specifics. But before I do that, let me reiterate 
that we were able to accomplish these significant objectives because of 
a growing consensus on both sides of the political aisle, and because 
of our willingness to compromise, compromise not on principles but for 
principles.
  In our effort to control spending, the largest program we addressed 
was Medicare. Our objective here was not just to control its spending, 
but to strengthen the Medicare Program for the long term, and we did 
this. We did this by increasing choice and competition within the 
program. Choice within the Medicare Program will give beneficiaries 
myriad options. It will allow them to participate in HMO's, PPO's, 
PSO's and private fee-for-service programs. We have based our expansion 
of choice in the Medicare Program on the successful Federal Employees 
Health Benefits Program. Through these options, seniors will be able to 
obtain important benefits, like prescription drugs, that are not 
covered by traditional Medicare.
  These changes and the money they will save also allow us to expand 
Medicare coverage for certain important preventive services, including 
mammography, prostate colorectal screening, bone mass measurement, and 
diabetes management. Beyond increasing choice and competition within 
Medicare, we strengthen and preserve the program by slowing its rate of 
spending growth. Our measures save Medicare for another 10 years, while 
still increasing program spending per beneficiary from $5,500 this year 
to $6,800 in the year 2002.

  Beyond encouraging choice and competition, this bill introduces 
important innovations into the Medicare Program, innovations that could 
go a long way toward strengthening the program for future generations.
  One very important innovation is the creation of a demonstration 
project that will explore the advantages of having medical savings 
accounts available within the Medicare Program. This demonstration 
project will allow up to 390,000 Medicare beneficiaries to opt into an 
MSA program, a program that will allow them to choose a high-deductible 
Medicare choice plan.
  I believe medical savings accounts will be an important component of 
Medicare's long-term viability, and to study and recommend other 
innovations, our legislation creates a national bipartisan commission 
on the future of Medicare. Senator Moynihan and I called for this 
commission back in February as we realized that to realize long-term 
solutions for the program, we needed a commission that would be above 
politics. This will be a 17-member commission established for a little 
more than a year. Its task will be to make recommendations to Congress 
on actions necessary to ensure the long-term fiscal health of the 
Medicare Program. It will report back to Congress on March 1, 1999, and 
these changes to Medicare will result in a net savings of $115 billion 
over 5 years, savings that will not only help us balance the budget, 
but savings and reforms that will preserve the Medicare Program while 
ensuring that it continues to serve those who depend on it now.
  Concerning Medicaid, we were able to achieve a total savings of $13 
billion. This savings will come largely from a reduction in 
disproportionate share, or DSH payments, and by giving our States more 
flexibility in how they run the program.
  For more than a decade, there has been a tug of war between the 
Federal Government and the States over Medicaid. Each side has tried to 
assert its will over the other. From the mid-1980's and through the 
early 1990's, the Federal Government imposed mandates on the States 
and, in turn, the States shifted costs to the Federal Government. The 
result was devastating to all of our budgets as Medicaid routinely grew 
at a double-digit pace, reaching as high as a 29-percent increase in 
1992.
  This legislative package marks a new beginning, a new trend. It marks 
a change in the Washington mindset that has sought, since the days of 
the New Deal over 60 years ago, to centralize power in this city. With 
this substantive change in the Medicaid Program, we are offering our 
Governors the tools they need to control this program. This, I believe, 
is the way things should be done.
  With this bill, they will be able to move more individuals into 
managed care without waiting years for waivers from the Federal 
Government. They will be able to contract with selected provider for 
services. The States will be able to ask families to take some 
responsibility for the decisions they make when seeking health care 
services. This power at the State level will go a long ways toward 
stretching Government health care dollars.
  As I said, beyond making significant and important changes to 
Medicare and Medicaid, we have strengthened assistance to our children 
to meet the health care needs of the most vulnerable among us. It 
became clear through the conference that both sides of the aisle are 
equally committed to increasing access to health care for as many 
children as we can. Both sides of the aisle are committed to finding an 
answer to the problem of uninsured children in this country, and this 
legislation represents an important agreement in this area. It creates 
a new program, a program that covers low-income, uninsured children. 
The process of providing insurance and health care coverage to 
vulnerable American children is complex. As I have said before, of the 
71 million children in the United States, more than 86 percent are 
already covered by some type of health insurance. Two-thirds of our 
children are covered by insurance through the private sector. Twenty-
three percent of all children in the United States under age 18 are 
covered by Medicaid, and another 3 percent are covered by other public 
insurance programs.
  Our plan provides $24 billion over the next 5 years to be used by 
States in a manner that provides them flexibility in how they will 
expand health care coverage to our children.
  Our States will have two mechanisms of establishing programs. They 
can expand their Medicaid coverage or they can create their own program 
to address the particular needs of the children in their States. And 
while the Governors are given certain flexibility in the way they can 
use this money, our bill requires that they meet specific standards 
regarding health care coverage for children.

  Expanding Medicaid is certainly a choice States have made. Thirty-
nine have expanded Medicaid eligibility for pregnant women and children 
beyond the Federal requirements. But States are also developing other 
strategies for increasing coverage of children as well. There are 
already public-private partnerships in more than half of our States. 
There are successful programs such as New York's Child Health Plus and 
Florida's Healthy Kids. These innovative programs and programs like 
them can grow with these additional resources provided by this 
legislation.
  These, Mr. President, are the major provisions of this legislation. 
They signal a new beginning in Washington--real reforms to make 
programs more cost-effective, more efficient, more responsive to the 
needs of our people and our States. Great care has been taken to assure 
that the most vulnerable among us are protected, and this includes our 
provision to restore benefits to all legal noncitizens who were 
receiving Social Security when last year's welfare bill was signed into 
law.
  With this legislation, we also restore the ability to receive 
benefits to legal noncitizens who were residing in the United States as 
of that date should they become disabled in the future. These 
protections, however, are handled appropriately and in keeping with our 
overarching goal of restoring fiscal responsibility to Government.
  With this reconciliation package, we have establish the first 
balanced budget since 1969. We have met the criterion given us in the 
May 2d budget compromise, and we will give Americans the first real tax 
relief package that they have had in 16 years.

[[Page S8322]]

  Did we accomplish everything I would have liked to accomplish? No. I 
would have preferred to see some deeper, more significant fiscal 
restraint. I would have preferred to see a few other major reforms to 
Medicare, reforms that would have gone a long way toward strengthening 
the program, and these include the provisions that were in the original 
Senate package.
  But recall, Mr. President, the history of the balanced budget debate; 
recall Congress' effort in November 1995 to balance the budget by the 
year 2002; recall the consequent Government shutdown and Bill Clinton's 
veto; recall the President's 10-year balanced budget plan and Congress 
insisting that balance could be achieved 5 years earlier.
  Keep the history in mind, and the success of this legislation becomes 
clear. We have a balanced budget. That balanced budget will be achieved 
in 5 years, not 10. And we have achieved it without acrimony, without 
Government shutdowns, and without vetoes.
  This is a bipartisan effort. It is an excellent beginning. And I am 
grateful to my colleagues on both sides of the aisle for their work, 
for the spirit of cooperation that existed on the Finance Committee, on 
the floor of the Senate, and throughout the conference.
  I am especially grateful to my friend, Pat Moynihan, for his wise 
counsel, his leadership, and cooperation in helping to bring about the 
success of this package. I am also grateful to the professional staff 
members on the Senate Finance Committee, as well as the Senate Budget 
Committee.
  Likewise, I want to thank the staffs of the Congressional Research 
Service and the Congressional Budget Office, the Office of Legislative 
Council in the Senate, the Prospective Payment Assessment Commission, 
the Physician Payment Review Commission, the General Accounting Office, 
and all others who have worked long and hard for this package. The list 
of names is too long to read here, but I ask unanimous consent that 
these names be printed in the Record.
  There being no objection, the names were ordered to be printed in the 
Record, as follows:


                           finance committee

       Lindy Paull, Julie James, Alexander Vachon, Gioia 
     Bonmartini, Dede Spitznagel, Dennis Smith, Donna Ridenour, 
     Alexis Martin, Mark Patterson, David Podoff, Faye Drummond, 
     Rick Werner, Kristen Testa, and Doug Steiger.


                       senate legislative counsel

       Jim Fransen, Mark Mathiesen, Ruth Ernst, John Goetcheus, 
     Janell Bentz, and the rest of the Legislative Counsel's 
     Office.


                      congressional budget office

       Murray Ross, Tom Bradley, Cyndi Dudzinski, Jeanne De Sa, 
     Anne Hunt, Jennifer Jenson, Jeff Lemieux, Robin Rudowitz, 
     Kathy Ruffing, Paul Cullinan, Sheila Dacy, Joe Antos, and 
     Pete Welch.


                     congressional research service

       Celinda Franco, Beth Fuchs, Tom Gabe, Jennifer O'Sullivan, 
     Richard Price, Richard Rimkunas, Kathy Swendiman, Madeleine 
     Smith, Melvina Ford, Jean Hearne, Jennifer Neisner, Pat 
     Purcell, Vee Burke, Christine Devere, Larry Eig, Gene Falk, 
     Carmen Solomon-Fears, and Joyce Vialet.


                  physician payment review commission

       Lauren B. LeRoy, David C. Colby, Anne L. Schwartz, John F. 
     Hoadley, Christopher Hogan, Kevin Hayes, Katie Merrell, 
     Michael J. O'Grady, David W. Shapiro, Sally Trude, and 
     Christine M. Cushman.


               prospective payment assessment commission

       Donald A. Young, Laura A. Dummit, and Stuart Guterman.

  Mr. ROTH. Mr. President, it is my hope that the spirit of 
bipartisanship that carried us through this effort continues as we now 
consider the final package and send the bill to President Clinton for 
his signature.
  I yield the floor.
  The PRESIDING OFFICER. Who seeks time?
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. KERREY. I yield myself such time from the Democratic side.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. KERREY. Mr. President, I come to the floor and offer what I would 
call my reluctant support for this budget agreement.
  Today, the subject at hand is the spending portion of this bill. And 
I wish it was completely different, I must say, than what is in here.
  Yesterday, I spent most of the day in mourning for the loss of the 
provisions relating to structural changes in Medicare that would have 
added $8 billion to the HI hospitalization trust fund by imposing very 
reasonable and progressive change in the premium--it would have added 
$40 billion a year in spending relief in the year 2030 by accommodating 
this tremendous change in the baby-boom generation between 2010 and 
2030--and other provisions. I spent the day grieving those. I have 
overcome my grief, and I am prepared to support this because I believe 
it does balance the budget by the year 2002. I believe it finishes the 
job that we started in 1990 and 1993. I voted for both of those bills, 
and I find myself compelled once again to come and vote for a bill that 
I am not altogether pleased with.
  In this morning's New York Times there was an op-ed piece written by 
William Safire talking about an age-old problem in the West where 
cattlemen, because they had an interest in keeping the range open, and 
sheepherders, because they had an interest in keeping the range fenced 
in, were at constant odds and warring with one another. Their animals 
had different needs. They, as the guardians of those animals, went to 
war in order to protect the needs of those animals.
  It was not until just recently that the people who manage these range 
animals have come together. They came together as a consequence of a 
common enemy, in this case, a rather pesky weed called leafy spurge 
that has roots that can go down as deep as 150 feet, impossible to, by 
any reasonable estimate, get rid of once it is in the grassland. It 
will spread and take over the entire prairie.
  So the cattlemen are out there saying the leafy spurge will eliminate 
the grass. ``I'll have nothing for my cattle to graze on. What am I 
going to do? No herbicide is effective. No burning is effective. 
Nothing seems to work.'' Until one day they discover that what works is 
to put a few hundred sheep out on the grassland. As a consequence of 
the sheep's appetite for the leafy spurge, the sheep eliminates the 
weed, and thus is joined a battle between the cattlemen and the 
sheepherders. Suddenly they come together as a consequence of the 
common enemy.
  I am impressed that Republicans and Democrats have come together with 
this bill to address a common enemy--the deficit. I wish that the 1993 
bill had been bipartisan. I believe that if we had a few more spending 
cuts in 1993, that might have been possible. We missed an opportunity. 
It was bipartisan in 1990. It was not in 1993. And it is today. I am 
impressed with it.
  I believe the Nation wants us to be bipartisan. I believe the Nation 
makes our greatest progress when we set aside not only our partisan 
differences, but we are able to find a common opponent, in this case, 
the deficit, a common objective, and we say that we are willing to risk 
a bit--in some cases, risk it all--for the larger goal.
  I must say, after having made that observation, and to be specific, 
praising the distinguished chairman of the Budget Committee, Senator 
Domenici, the ranking Democrat, Senator Lautenberg, and on our Finance 
Committee, Senator Roth of Delaware, Senator Moynihan of New York, they 
have worked hard to say we have a common enemy--in this case, the 
deficit.
  We see the connection between deficit reduction and jobs. We believe 
that jobs, and good jobs, can solve almost any problem that we have. 
And thus, we are willing to join forces against a common enemy.
  I am reluctant to become enormously enthusiastic about this, as I 
say, because I do not believe it is asking of Americans the sort of 
tough decisions and choices that would enable us to say that we are 
tasking the American people to do something that is truly great.
  We will balance the budget. It is true, we are reforming Medicare to 
give seniors more choice. I think the Federal Employee Health Benefit 
provisions in this bill will have long-lasting impact, give seniors 
more comfort as they make a choice to buy alternative care. The 
provisions for increased coverage for children, the provisions having 
to do with welfare reform, all these are good provisions and deserve 
attention.

  We have, in addition, a lot of provisions--and I thank all four of 
the Members who have been involved with this for their assistance in 
making sure that rural America has an adequate reimbursement rate under 
managed care,

[[Page S8323]]

that we are able to take advantage of managed care and see increased 
penetration in rural America. I appreciate, as well, the change to 
increase budget enforcement to tighten some of the loopholes that were 
in law.
  There are a lot of things in this bill, in short, that are good. It 
does, it seems to me, represent a successful compromise between 
Republicans and Democrats, and we have produced a piece of legislation 
that all of us, or most of us, anyway, are going to be able to come 
down and be enthusiastic about.
  There are four things, Mr. President, that I would like to discuss 
which I would put in the category of unfinished business. First is 
entitlements. I appreciate that there is a commission in this bill. I 
believe it is 20 months that they have. I can save them a lot of time. 
We had a bipartisan entitlement commission, Senator Danforth and I. The 
distinguished occupant of the chair was on that commission as well.
  There are a limited number of choices that one can make. There are 
roughly 10 or 15 choices you can make. They are all ugly. They are all 
difficult. And they all accommodate a demographic problem, not a 
problem caused by secular humanists or by Phyllis Schlafly or Ronald 
Reagan or George McGovern. This is not an ideological problem. It is a 
problem of birthrates during the period of time 1945 to 1965, and the 
birthrates following that. It is called the baby-boom generation.
  Seventy-seven million Americans will begin to retire in 2010. And 
what we attempted to do, with what I consider to be a relatively modest 
change in the law with eligibility age and means testing and a 
copayment on home health care, was to accommodate that large generation 
of people. The sooner you do it, the better. You do not do them any 
favors by saying, we will do a commission for 2 years and perhaps do 
something in 1999. Then you have a Presidential campaign going. You 
will probably have to wait until 2001. The longer you wait, the harder 
the choices are.
  As I said, the choices are fairly limited. If you do not like moving 
the eligibility age, if you do not like doing some means testing, the 
only thing you can hope to do is get some increases in the revenue 
stream, proposing to increase taxes or increase the premium. If that is 
your choice, make it now, because the longer you wait, the more likely 
it is that the people you are trying to help are going to pay a lot 
more. They are going to pay a bigger price. They have not been warned.
  We missed an opportunity, and I am hopeful that by surfacing this in 
the debate and getting strong support, bipartisan support here in the 
Senate, we can keep these issues alive.
  In addition to the long-term problem of entitlements is another 
problem with entitlements inside of our budget. Yes, it is true, we 
will have taken the final step to balance the budget with this bill, 
although I note parenthetically that one of the curious things about 
this particular proposal is we are going to balance the budget by 
rather substantially increasing spending in some areas and lowering 
taxes in others. It is an exciting proposition. We are going to balance 
the budget, it is true, but the budget has another big problem, and 
that is the growing percent of that budget that goes for mandatory 
programs.
  Many of my colleagues have come down to give great, impassioned 
speeches about why we should not do all of these things. But the 
question that needs to be asked in a very calm environment is, what are 
you going to do about these numbers?
  In this budget agreement, the amount of money we allocate for 
mandatory, plus interest, will go from entitlements, plus interest, the 
mandatory portion from about 66 percent, as I understand it--I haven't 
seen the final numbers--to about 70 percent in 2002. The Senator from 
New Mexico is shaking his head, but it does unquestionably increase. I 
do not know if it goes to 70 percent, but it increases, and it 
continues to increase. And it will increase even more when the baby 
boomers retire. It is not a flat number.
  The head of the Congressional Budget Office, June O'Neill, prepared a 
report some time ago that shows how the cost of these programs 
continues to go up as a percent of our overall budget, and they are 
squeezing out our capacity to keep our defenses strong, our capacity to 
invest in education or infrastructure, or research, and all the other 
sorts of things that are being done in the other part of the budget. 
One of the reasons it was made easier to do our appropriation this year 
is, we put a little more money in the appropriated accounts in this 
fiscal year than you are going to see in the outyears.
  So I alert Members that see the appropriations bills sailing through 
this year and are wondering why, there is more money this year than 
there will be next year and the year after that and the year after 
that. In years 4 and 5, we will have very tough decisions to make in 
discretionary spending--far tougher than I believe people realize. 
Thus, there is the second problem of the growing cost of entitlements 
inside of the budget. It sets up tough choices. It doesn't set up easy 
choices. It sets up very difficult choices that we have to make.
  The second big area for me is, I must say, with the economy growing 
the way it is--and one of the great pieces of news for me in this 
budget debate is that as a result of the growth in the economy, I think 
there are very few people left that don't understand that, in addition 
to defending the Nation as the first order of business, whatever we do 
with our taxes, regulatory policy, and spending policy, we do need to 
ask ourselves: will this create jobs? Because if the economy is 
growing, it is producing jobs, and there is a demand for labor as a 
consequence of a growing economy. Lots of things get solved in a hurry. 
Not only does the Treasury have lots of revenue that makes our job 
easier, but the gap between rich and poor narrows, the number of people 
on welfare is reduced. A lot of problems we have get solved quickly if 
our economy is growing. If we recall from the recession of 1991, the 
problems are made a lot worse if you have the opposite in place.
  So this growth we have out there in the economy is exciting. My view 
is that this is the time when we need to be investing in that public 
infrastructure--research, the transportation base, education, and all 
those things that will produce increased productivity and increased 
economic growth sometime out in the future. We may not get an immediate 
benefit from it, but we will benefit somewhere out in the future. It 
connects with this entitlement problem. For my friends on this side of 
the aisle who love to get up and get fired up and tell me why we can't 
do anything about entitlements, the question occurs: If you don't want 
to do that, Senator, where are you going to get the money to make these 
public investments?
  I haven't heard many people that are enthusiastic about a tax 
increase. I have heard them being enthusiastic about going in the other 
direction. The only way you can find the resources to invest in the 
long-term growth of this country is by containing and controlling the 
pace of growth of entitlements. It is a question of whether or not we 
are going to endow the future, or are we going to convert the Federal 
Government into an ATM machine, entitling the present solving of the 
problems of me, me, me, now, now, now, but not solving the problems of 
future generations.
  The third issue I speak of today is health coverage. I am of the 
opinion that the additional $24 billion that is in this particular 
budget is going to cover a lot fewer people than leading advocates 
predict. I don't believe that it is going to be a terribly efficient 
way to increase coverage. Again, I don't think you are going to be able 
to get the kind of increased coverage that is necessary, unless you 
come to grips with the rising costs of these mandated programs. For all 
the terrible things that were forecast and said about the proposal to 
add a $5 fee for home health, to add a means-tested and an income-
related premium on Part B and increase the eligibility age, you thought 
we were not spending any money at all on Medicare.
  No account in our budget grows as fast as Medicare. It will go up, on 
average, $24.5 billion per year for 10 years. Nothing grows that fast. 
We are allocating more and more of our gross domestic product into 
Medicare and other entitlements. Now, I am prepared to do more for low-
income seniors, and help people who are in serious trouble out

[[Page S8324]]

there, having a tough time paying the bills. But the choice that we 
have to make, not only when it comes to investing in our future, but 
also being able to provide additional coverage, is between one group of 
Americans and another, or allocating $24.5 billion of additional money 
for children over 5 years and $24.5 billion per year for 37 million 
people over the age of 65.
  Now, I think that is the kind of debate we need to have on this 
floor. It is a tough debate, and it involves telling the American 
people and, very often, giving them the facts. And the facts may be 
painful and difficult for us to face, but they are the facts. I, for 
one, as I said, am skeptical that $24 billion over 5 years is going to 
result in the kind of increased coverage projected for children. I must 
say again that I think the only way we are honestly going to be able to 
increase the coverage for Americans is to get after entitlements. There 
is a question of the legitimacy not only of the means test, but we must 
ask ourselves fundamental questions about requiring an eligibility test 
on age, another program based upon poverty, the veterans' programs, 
saying if you get blown up in a war, we have a good program for you. 
The final one, of course, is the income tax deduction.

  The fourth problem that I think this country faces, which is not in 
this bill, but it will be taken up in the tax bill and I will talk 
about it later, but I think it's a big problem. We have a window into 
the problem of looking at the estate tax issue, and that is the 
difficulty Americans are having generating wealth. I will talk about it 
at greater length when we get on the tax bill. But income and wealth 
are not the same thing. It is not uncommon to pick up a newspaper and 
hear a story talking about this tax bill does this or that for the 
wealthy, and what they are talking about is income. They are not the 
same thing. I can have a half a million dollars a year in income and 
have no wealth, just as I can have $20,000 in income a year and if I 
save a little bit, I can get wealth. The estate tax debate is focused 
on about 2 percent of Americans who have estates at $600,000 or over. I 
believe estate tax relief is reasonable. I support doing that in the 
tax bill. But there are 98 percent of the American people that do not 
have wealth in excess of $600,000. It would not take much of a change 
in the Social Security program to enable somebody in the work force, 
indeed from the moment they were born, to have a savings account that 
enables them to say that when it comes time for me to retire, as I look 
forward to growing old, I know that in addition to some kind of an 
income transfer I am also going to have the opportunity to have 
security as a result of wealth. I think wealth distribution, identified 
as a problem repeatedly, cannot be solved by simply transferring 
income. It can only be solved by establishing that we are going to try 
to help working Americans acquire the wealth and use the principal 
retirement program, Social Security, that we have in place to get that 
done.
  Mr. President, I close by saying that I intend to vote ``yes'' on 
this bill, and I intend to vote ``yes'' on the tax relief bill that 
follows. I wish it had done considerably more. I have great praise and 
great appreciation for the work done by the chairman of the Budget 
Committee, by the ranking Democrat, the chairman of the Finance 
Committee and the ranking Democrat on that committee as well. They set 
the tone of bipartisanship, which must be set if you are going to deal 
with these controversial issues, if we are going to be able to go after 
the common enemy, not just of deficit spending but other tempting, 
irresponsible things that might produce a round of applause, but might 
not be good for the United States of America.
  Mr. DOMENICI. Will the Senator yield?
  Mr. KERREY. I am pleased to yield.
  Mr. DOMENICI. Senator, first let me make an observation, perhaps not 
as eloquently. I believe the Senator from New Mexico could, someplace 
or another in the United States, make a very similar speech. I think 
most of what you talked about I agree with. But I would like to make 
sure that everybody knows just how much you can do in a budget 
resolution and in a bill that is forced by a budget resolution and how 
difficult it is to try to do more than fits the bill. I want to say to 
the American people that while I agree with your statement 
wholeheartedly that we have to do much more with the entitlements--and 
let's be very precise, the one that is really, really in need of a 
long-term fix is Medicare--not because anybody wants to deny anyone 
anything, but the stark fact is that it, by itself, can break this 
country in another 15, 20 years all by itself.
  Frankly, I never believed that we could fix Medicare in its totality 
in a budget resolution and a bill that was thrust by a budget 
resolution. Senator Gramm is chairman of the Subcommittee on Health. I 
think he would agree with me that, while we probably could have done 
better, and should have, on the three items that would have helped, we 
can't force the total change of Medicare in a bill like this under a 
budget resolution format. First of all, a budget resolution is only 
applicable for 5 years. You are permitted to project for 10. I assume 
when Senator Gramm starts that reform, he is going to start beyond 10 
in terms of the real dollar impact, because that is when it is in 
trouble. It is not in trouble in the next 5 years. One might have a 
different mix as to how you get it to a state of solvency.
  Senator, I would like you to know I never thought that we could do 
much more in Medicare. But I think the three changes you made in the 
Finance Committee, with your support, if we could have held them, it 
would have been a good first step. I still believe the spirit of 
getting this done may get us, within the next 2 or 3 years, to facing 
the issues for major, permanent reform of the entitlement programs. I 
am hopeful you are not giving up because we can't do it in this budget 
bill, because it is a very, very big issue that requires much debate in 
the Senate. I don't know exactly how that debate is going to be framed, 
but I don't think it is going to be framed in a reconciliation bill 
with no debate to speak of and no amendments to speak of. That is just 
the U.S. Senate's way of doing things. I thank you for yielding. Maybe 
you can comment on that.

  Mr. KERREY. Mr. President, first of all, I say that the man who 
taught me about entitlements is the distinguished Senator from New 
Mexico. I recall coming to the floor, I believe it was on a budget 
resolution that the distinguished Senator from New Mexico and the now-
departed Senator from Georgia, Senator Nunn, when they had the famous 
Nunn-Domenici amendment that controlled the growth of entitlements. The 
first time he proposed it, I voted against it. I listened to the 
opponents of it and said, ``That makes sense to me; this is not a good 
amendment, so I will vote no.''
  Then I started looking at the facts, and I was very uncomfortable to 
have to conclude that I voted wrong. The next time the Senator brought 
it up, I voted for it and I became interested in this issue as a result 
of both you and Senator Nunn and your elaborations and your education 
that you did 3 or 4 years ago.
  The point that I am trying to make, which I am afraid is sometimes 
lost, is that the longer you wait, the harder the choice is. This is 
not a problem that you can avoid forever. The more time you let expire, 
the more difficult the choice is--that is, on Medicare. The same is 
true on the budget item when it comes to Social Security. We have 
people under the age of 40 who will be beneficiaries out in the future, 
26 and 27 years from now, under current law, for whom we have to say, 
are we going to be able to keep the promise that's on the table? We 
have to say no. Social Security Commissioner designate Shirley Chater, 
in 1996, when asked about it, said, ``You can expect Social Security to 
have to be reduced by 30 or 40 percent in benefits, unless some change 
occurs.''
  Well, there is a presumption that those of us who proposed altering 
these programs today are proposing cuts. But the truth is, if you do 
nothing, that is what is going to happen; only the cut isn't going to 
occur to a future beneficiary, it will occur to a current beneficiary. 
Long after the time has passed when you can plan and make adjustments, 
suddenly the Congress is going to pop up and say, ``Sorry, folks, we 
have to cut the programs big time,'' in order to be able, as the 
Senator said, to save either the fiscal health or the program itself.

[[Page S8325]]

  So my fear is that we missed an opportunity when the distinguished 
Senators from New Mexico and Georgia were down here. I recall people 
coming in the one year and pulling off veterans first, and once the 
floodgates were open, it was ``Katie bar the door,'' everybody got down 
here and got exempt and there was nothing left. There was no group that 
is entitled to payment left, and they were all exempted and there was 
no real reform that occurred.
  So I am not going to give up on the issue. I am not going to stop 
talking about the need for these long-term changes. But I am just 
saying to the American people, especially those who understand the 
importance of Medicare and these entitlement programs, who consider it 
a victory that the conferees were unable--and I know the Senator from 
New Mexico fought for these things, but the conferees were unable to 
hold these provisions. There are many people who are advocates of these 
programs that consider that a victory. It is not a victory. It weakens 
the program long term. And some beneficiary out in the future is not 
going to thank us for this action. Maybe it gains a few votes in 
elections. I doubt it. I believe the American people once they hear the 
facts of the matter will be persuaded.

  Anyway, it is a much longer answer. I know the Senator from Texas is 
not very appreciative of the fact that the Senator caused me to talk 
longer than I intended to.
  But I want to underscore in closing that I do appreciate the fact 
that the Senator from New Mexico, Senator Nunn, and others led on this 
thing. It probably torments the Senator now to see his student come 
back here speaking in this fashion.
  I just close by saying that I am prepared to vote for this agreement 
on the balanced budget. I believe that is good for the economy. I wish 
and hope that we are able in a bipartisan spirit to do much more, if 
not this year sometime relatively soon.
  The PRESIDING OFFICER. Who yields time?
  Mr. DOMENICI. Mr. President, I yield to Senator Gramm as much time as 
he may desire.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. GRAMM. Mr. President, let me first thank our chairman for 
yielding.
  I would like to begin by congratulating some people and thanking them 
for their leadership.
  First of all, I want to thank Senator Domenici for his leadership. I 
have had the opportunity to serve with Senator Domenici now for 13 
years. I have been on the same side as Senator Domenici. I have been on 
the opposite side of Senator Domenici. I have noticed that when we are 
together we generally win. I wish Senator Domenici could be right more 
often.
  But I want to congratulate him for his leadership. I don't have any 
doubt in my mind that Senator Domenici will go down as one of the great 
legislators of this era, and that I will always be proud to tell my 
grandchildren that I served with him. I want to congratulate him for 
his great work on this bill.
  I also want to congratulate Chairman Roth. This is the first full 
term that Senator Roth has been chairman. He became chairman in the 
middle of the last Congress. And I think he has done a terrific job in 
chairing the Finance Committee and in building bipartisanship to a 
level that I would not have thought beginning this process that we 
could have ever had on the tax bill. I want to congratulate Chairman 
Roth for his leadership, which I really think has been outstanding, 
having had the opportunity to be in committee, to be actively 
participating in the debate on the tax bill on the floor, and having 
had a chance to be in much of the conference.
  I think our colleagues ought to know, or at least hear someone say 
what a great job that Chairman Roth did.
  I also believe that our Democratic colleagues, especially Senator 
Moynihan, have made a great contribution to this bill. Whether you like 
the product, or whether you do not like anything else we do--it is as 
thick as this package that many like and many dislike--I think you have 
to clearly say that a tremendous amount of work has gone into the 
process.
  Let me begin by talking about what I believe in this bill is 
unambiguously positive, and what is clearly going to be greatly 
appreciated by the American people--some of it immediately, and some of 
it over time--as people come to understand it.
  I would like then to talk about the disappointments I have about some 
parts of the bill--opportunities lost, things done. And then I would 
like to conclude by simply talking about the future in the next 5 years 
as we try to implement what the Congress is clearly going to adopt, and 
then say a little bit about balancing the Federal budget. So I will try 
to do those things.
  Mr. DOMENICI. Will the Senator yield?
  Mr. GRAMM. I am happy to.
  Mr. DOMENICI. I must leave the floor. I will tell the Senator that I 
look forward to reading the Senator's remarks. I think the Senator 
knows that I mean that. I believe what he has outlined is so typical. I 
mean the Senator is going to state the good things, things that are not 
as good as they could be, and he is going to lay them out with clarity. 
I say thank you for the generous remarks which the Senator made about 
me. But I also want to say I reciprocate.
  It doesn't matter in the U.S. Senate whether you agree with another 
Senator half the time, all the time, or none of the time. What is 
important is that you respect them. That is all we can get in this 
place--is that somebody respects what we are doing. I want to tell the 
Senator from Texas, whether it is his way and I am not right enough, or 
whether it is my way and he is wrong too often, it doesn't matter. You 
can't be in the Senate and serve with Phil Gramm of Texas without 
respecting him. The Senator has a great mind, and he has learned to 
apply it to our problems in a way that really means something to a lot 
of us. It strikes our minds, and makes us think. I don't think the 
Senator from Texas can expect to do more, and he wins plenty of them 
because of the clarity and the philosophy, and the way he digs into the 
issues.
  There are many things that we are experimenting with in this bill 
that may not work, and the Senator is going to certainly find them and 
tell us why. And they have an awful lot to do with the child health 
care package. The Senator is going to say something about that. And I 
am not trying to preempt him because I know there are problems there. I 
don't believe the people who say if it had gone straight under Medicaid 
that it would have covered many, many more. I don't believe that at 
all. The Medicaid Program that has not worked well in the past that we 
have been struggling to fix ought not be mimicked. It ought to be 
changed. And if you can, you ought to do the same thing in a different 
way. That is the theory of the Senator from Texas, and he has said that 
from the beginning. We are trying. But we are not there yet, and many 
other things.
  I want to tell you, we struggled mightily on the welfare side, on the 
Fair Employment Labor Standards Act, and whether the myriad of laws 
should apply to trainees. And the Senator is going to speak about that. 
But I want to tell him, I couldn't win. I couldn't get it done. That is 
all there is to it. Everyone now knows, including the White House--and 
they will admit it--that the welfare program will not work in terms of 
the people that most need the training without some relief from some of 
the laws that apply across the board to people permanently employed in 
companies that make enough money to get by and have to pay them. And 
there is no doubt that the issue has been framed in a false way.
  It is not a minimum wage issue. We have already agreed to the minimum 
wage. I heard the President yesterday speak of minimum wage again. That 
is not the issue. The issue is the rules that are going to govern a 
nonprofit organization that we asked to train 10 people. Isn't that 
right? They are going to say, ``Why should we do that?'' Every law on 
the books governs these trainees, and we didn't even pick them. You 
picked them for us.
  So I am aware of those and many others. But I think the Senator is 
going to also say that there are some good things in this bill.
  I thank the Senator very much for yielding.
  Mr. GRAMM. I thank the Senator from New Mexico.

[[Page S8326]]

  Mr. President, let me begin with the tax cut.
  First of all, I think if you are going to judge what has been done, 
you have to first begin by looking at the fact that we are cutting 
taxes by approximately 1 percent. The tax cut on average over the next 
5 years will lower the tax burden on the American people by slightly 
less than 1 percent.
  So for all of those who are saying, ``Well, the Tax Code becomes more 
complicated, the changes that are made are piecemeal,'' all of that was 
driven by the fact that with the bipartisan nature of this bill and the 
fact that we have a President who was adamantly opposed to cutting 
taxes until 3 years ago, who only endorsed the concept of trying to 
balance the budget 2 years ago, that we had a very limited amount of 
resources. Obviously, for people who have listened to much of this 
debate and have gotten the idea that we are talking about a huge tax 
cut, they are going to be disappointed. But there are some people who 
are going to be directly affected, and in a very positive way. Right at 
the top of the list will be people who have families and who have 
children. Nearly all of the $85 billion net tax cut we have in this 
bill goes directly to families with children.

  Why single them out? I am sure there are people who say, ``Well, 
children are important. Families are important. But why such a focus of 
this tax bill on children?'' Let me explain why.
  In 1950, the dependent exemption--the amount you got to deduct from 
your income because you had a dependent--was $500. As a result of that 
$500 dependent exemption for children in 1950, 65 percent of all income 
of the average income working family was not subject to income taxes in 
the average family of four in America. Today the dependent exemption is 
$2,500. But to cover the same expenses and to protect the same level of 
income that it did in 1950, it would have to be twice that big, or 
$5,000 per child.
  So what has happened since 1950 is that the real dependent exemption 
in terms of letting working families keep their money to invest in 
their own children has effectively been cut in half.
  If you look at the Tax Code, what has happened is this: In 1950, rich 
people paid a lot of taxes. And today rich people pay a lot of taxes. 
In 1950, poor people didn't pay any income taxes to speak of. And today 
poor people do not pay any income taxes to speak of. But the explosion 
of Government between 1950 and today has been almost totally funded by 
a massive growing tax burden on working families with children. And we 
have literally starved the one institution in America that really 
works--the family.
  So our primary focus--first, in the Contract with America, then the 
budget 2 years ago, then the budget a year ago, and now the budget this 
year--has been to give a $500 tax credit per child and to let working 
families invest in their own children, their own family, their own 
future, recognizing that the best housing program, nutrition program, 
and education program is to let working families keep their own money 
and invest in their own children, their own family, and their own 
future.
  Second, in this tax cut bill we begin the long process of eliminating 
the death tax. People work a lifetime to build up a farm, or a small 
business, or to build up assets. And they do it for their children and 
their future. And they make the country rich in the process. But when 
they die, even though they pay taxes on every penny they earned along 
the way, when they try to pass these assets on to their children, the 
Government comes in and takes up to 55 cents out of every dollar.
  So it routinely happens in America every day that parents die, and 
then their children have to sell the fruits of their lifetime labors--
their business, their farm, their home, their assets--in order to give 
Government 55 cents out of every dollar of its value.
  Republicans believe that is wrong. We believe you ought to tax income 
once, and not twice. And I think the changes we made in this area, 
especially for small businesses and family farms, is very, very 
important.
  I believe that people who are trying to educate their children will 
be beneficiaries of this program.
  Quite frankly, my favorite part of the tax bill in the area of 
education is not the President's initiative. It is instead an 
initiative that came from Senator Roth. That is the initiative that 
lets people when they get out of school treat student loan interest 
payments as a business expense. Think about it for a minute. If you go 
out and buy a tractor, you can depreciate that tractor--write its value 
off against your income. But if you invest in going to college, or 
graduate school or medical school by borrowing a bunch of money on a 
guaranteed student loan, when you get out of college and you start to 
work with that big heavy burden of debt, none of the expenses you 
incurred in getting the education that economists call ``human 
capital'' can be written off as a business expense.
  So our society's Tax Code has historically discriminated against 
investing in our own people.
  One of the provisions of this bill that is critically important is 
the provision that for the first time will let a young wage earner who 
has gotten out of school, who has a big guaranteed student loan, to 
write off that interest against the income they are earning as a result 
of the earning power they got from going to college, or graduate 
school, or professional school. And I believe this is going to 
encourage people to go to school longer and to accumulate greater human 
capital.
  There are a lot of provisions in the tax bill. I believe the tax bill 
is basically a good bill, and the American people are going to benefit 
from it. Not everybody is going to benefit. The top 5 percent of income 
earners pay 50 percent of the taxes. They are going to benefit from 
none of the general tax provisions. They will benefit marginally from 
the death tax change. They will benefit from the capital gains tax. But 
the focus of our benefit, quite frankly, with simply a 1-percent cut in 
taxes, is where it ought to be--on working middle-income families.

  We have had a long debate with the President, and the President has 
won the debate in this bill. But what is the old saying? He, convinced 
against his will, is unconvinced still. And let me say I think it is a 
fundamental error, even though I am going to vote for the tax package, 
it is a fundamental mistake in a tax bill that only provides $17 
billion of tax cuts a year, it is fundamentally unfair to take part of 
that tax cut away from working two-income families in order to give a 
tax cut to people who do not pay income taxes. I believe that tax cut 
bills should be aimed at cutting taxes for people who pay them. In any 
case, that is where we are in the tax bill.
  Let me turn now to the spending bill. The best provision in the 
spending bill, from my point of view, is expanded choice on Medicare. 
Medicare has grown by 12 percent a year in cost in the last 20 years. 
No major program has ever grown that fast before, and, as a result, 
even with the reforms we have instituted, even under the best of 
circumstances, Medicare is destined to become the largest and most 
expensive program in the history of the American Government. But by 
letting our senior citizens have more choices, by encouraging 
competition, by allowing a broad range of choices between the 
traditional HMO and fee-for-service medicine, we are going to for the 
first time bring the forces of competition to bear on controlling the 
cost of Medicare.
  Since 1965, we have tried to use Government regulation to control 
Medicare costs, and it has been a total and absolute failure. We are 
now going to try the forces of competition. I believe that they are 
going to be successful, and I believe that the most remembered part of 
the spending bill that is before us will be the expanded choices that 
we provide under Medicare. If we allow each of these choices to 
develop, if we continue to refine them and promote competition, I 
believe we can and will over time drive the cost of Medicare growth 
down to roughly the cost of medical care in the market system.
  Last year, the cost of medical care in the private sector of the 
economy actually grew less than the Consumer Price Index. Medicare 
continues to outpace inflation by a wide margin. I believe that by 
bringing the forces of competition to bear, we have made a fundamental 
change in at least part of the Medicare problem. Our failure to deal 
with the long-term Medicare problem is my greatest disappointment with 
the bill before us.

[[Page S8327]]

  Someone said in the newspaper this morning that the subtitle of this 
bill ought to be ``Opportunity Lost.'' I agree with that. I believe 
that we have missed a golden opportunity to begin the reform that will 
be required to keep Medicare solvent. I am proud of the Senate. I am 
proud of the three votes we cast to keep provisions in our bill that 
would have raised the eligibility age on Medicare to conform to Social 
Security, that would have asked very high-income retirees to pay their 
full part B premiums, that being the voluntary part of Medicare that 
you don't pay a penny for during your working life, and finally to have 
a simple $5 copayment for home health care.
  Home health care is the fastest growing part of Medicare. The 
President had a 10-percent copayment in his national health insurance 
bill. The Democratic leader, Senator Mitchell, when he offered the 
final version of the President's plan 3 years ago, proposed a 20-
percent copayment. Prior to 1972, we had a 20-percent copayment. And 
the rejection of a simple $5 copayment to try to induce people to be 
cost conscious was, I believe, a sad commentary on the lack of 
leadership both at the White House and in the Congress. I believe we 
missed a real opportunity to reform Medicare, and I believe that each 
and every one of these things will be done.
  Going back to a point that our colleague, Senator Kerrey from 
Nebraska, made earlier, the longer we wait to institute these reforms, 
the more difficult it is going to become to make these reforms work 
because the problem is going to get bigger.
  Some people are encouraged by the fact that we have set up a 
commission in this bill. Forgive me for being underwhelmed at setting 
up yet another commission. We have already had an entitlement 
commission. It has already reported. We know what the situation is.
  Let me just summarize it. Under the best of circumstances, if 
everything goes right, if the economy stays strong, if we have the best 
possible circumstances that we could expect over the next 25 years, our 
current policy on Medicare and Social Security will require the payroll 
tax to double from 15 percent to 30 percent on every working person in 
America. Under the best of circumstances, if we do not change policy, 
we are going to have a doubling of the payroll tax in 25 years, and 
nobody disputes it. Under the pessimistic scenario of lower growth, we 
are going to have to triple payroll taxes.
  Let me remind you what that means. It means that a low-income worker 
who is paying 15 percent of his income in taxes and 15 percent in 
payroll taxes will go from a 30-percent marginal tax rate to a 45-
percent marginal tax rate. What it will mean, if we do not do something 
to reform Medicare and Social Security, is that, with absolute 
certainty, 25 years from today the average working American will be 
paying over 50 cents out of every dollar they earn in payroll taxes and 
income taxes.
  For those people who said, do not make these hard choices in 
Medicare, they are the people who are going to have to explain why we 
are doubling payroll taxes over the next 25 years.
  I believe we have a crisis in this area, and let me say the first 
week we are back, as chairman of the Medicare subcommittee, we are 
going to hold a series of hearings on Medicare. Senator Kerrey and I 
are going to reintroduce our reforms as a freestanding bill, and we are 
not going to let this issue die. I am also going to expand our hearings 
to begin to look at private investments and ownership of assets 
especially by young workers as a way to guarantee that they have Social 
Security benefits when they retire and as a way of guaranteeing that 
they have Medicare benefits.
  If we do not change this program, with the baby-boom generation 
retiring in 14 years, we are going to have a generation of Americans 
that will be paying 30 percent payroll taxes to pay benefits to 
retirees who will never get benefits out of these programs that are in 
any way related to what they paid in. Only if we begin to reform these 
programs now and only if we begin to restructure the system so when a 
young person is setting aside money for their retirement, it is not 
going to some phantom account with the Social Security Administration 
but where it is going in a real investment in something they own and 
can depend on and trust, until we collateralize or securitize the 
Social Security and the Medicare contributions of our young people, 
their retirement is not going to be secure.
  Senator Domenici said that I was going to talk about the welfare 
reform, and I am. One of my biggest disappointments in this bill is 
that, as it is currently structured, we have gone a long way toward 
killing welfare reform, and let me explain why. First of all, we made 
some tough decisions about denying benefits, setting higher standards 
and saying, especially to immigrants, you come to America. You have to 
come with your sleeves rolled up ready to go to work. You cannot come 
to America with your hand held out ready to go on welfare. We have 
partially reversed that in this bill, and we are going to spend tens of 
billions of dollars providing benefits to people who are denied 
benefits under our welfare bill, but that is the smallest part of the 
problem.
  As a result of the administration responding to special interest 
groups, especially organized labor, we now have provisions that will 
make it virtually impossible for States to require welfare recipients 
to work, and let me explain why.
  If a State has a mandatory work requirement, and let us say they want 
to require welfare recipients who are young mothers who have one skill, 
and that skill is taking care of children, and let us say they set up 
in Government housing projects a day care center, and they ask some 
welfare recipients to do part of the baby-sitting under supervision, 
under the provisions of this bill and under the new requirements that 
have been set by the administration, we would have to pay minimum wage. 
We would have to provide fringe benefits. We could not count all the 
welfare benefits they are getting like Medicaid and housing subsidies 
as part of those wages. And so it is going to cost States substantial 
amounts of money to put welfare recipients to work where they would 
acquire skills that would let them go out in the marketplace and work.
  The net result is going to be that we are in reality coming very 
close to killing the very welfare reform bill that was the greatest 
achievement of the last Congress.
  These are trainees. They are people who are receiving public 
benefits, and to ask them, in return for those benefits, to do 
productive work is the most reasonable thing imaginable. It was 
something that a large percentage of Senators and Congressmen on a 
bipartisan basis agreed to last year, and yet 1 year later, with 
administrative action by the President and through this bill, we are 
going to make it virtually impossible for the States to have a work 
program for welfare recipients.
  Now, I am hopeful that we can in the future come out with a bill that 
will at least let the States count all the benefits that are received 
by people who are receiving welfare in calculating what their effective 
wage is by working. But this is a very, very serious matter.
  I am also very concerned about this massive new program to give 
health insurance to children. Who can be opposed to health insurance 
for children? Nobody. Bismarck once said, never does a socialist stand 
on firmer ground than when he argues for the best principles of health. 
And I would just paraphrase Bismarck by saying, never does a socialist 
stand on firmer ground or higher ground than when he argues for the 
best principles of health for children.
  But here is the problem. We started off with a bill that had a broad 
consensus and it was a bill where we were going to spend $16 billion to 
try to help the States get access for health coverage for children from 
very low-income families. What happened in the process is that the 
piling on of the tobacco industry got caught up in this, so, whereas 
the President started out with $16 billion, it has now already grown to 
$24 billion before we adopt the bill, and does anybody believe that 
this program is not going to explode in the future?
  Here is the problem. Once you get up to roughly 200 percent of 
poverty, 82 percent of the children are covered by private health 
insurance. So, unless we are very fortunate, what is going to happen to 
us in this bill is that we are going to end up having four children

[[Page S8328]]

who will give up, through their families, private health insurance, for 
every one new child we get covered. So 80 percent of our money will 
simply displace private health insurance. And how can you blame them? 
If you have a moderate-income family, having trouble making ends meet, 
and we are going to give their children private health insurance, what 
rational parents are going to continue to pay for it themselves?
  So, we have the very real specter, here, of spending a tremendous 
amount of money and covering almost no additional children. Let me say, 
I totally agree with Senator Domenici. I think the worst choice we 
could have made was simply going through Medicaid, when all 50 
Governors, 2 years ago, told the Congress that they could do what 
Medicaid was doing for 30 percent less if we would let them do it. But 
I think we have to be very concerned about this program. I hope we are 
as committed to monitoring what we are doing as we are to doing it. If 
it becomes clear that all we are doing is displacing private health 
insurance, I hope we will be willing to go back and try to adjust this 
program to try to prevent that from happening.
  I am also very concerned about all of these new benefits. Again, they 
are not benefits anybody can be against. We are cutting the copayment 
for outpatient care under Medicare. We are adding a whole bunch of new 
benefits to Medicare. The problem is, Medicare is going broke as 
quickly as it can go broke. The only reason we can claim we have saved 
it for 10 years is we, in the process, were forced to give in to the 
administration's demand that we take the fastest growing part of 
Medicare and take it out of the trust fund and put it into general 
revenue. As I said when we first debated this, I can make Medicare 
solvent for 100 years by simply taking hospital care out of the trust 
fund. But have we changed anything by doing it? The answer is no.
  I am concerned that, by creating these new benefits, all of which are 
popular, that we have to look and see whether, in fact, we made the 
problem better or worse. I am very skeptical that cutting 
reimbursements to doctors and hospitals will really save money. The 
reason I am skeptical is that, as we have gone back and looked at our 
reforms in the past, that has not been a very effective way to save 
money. Because what tends to happen is that doctors and hospitals--
basically, doctors are smart people or they wouldn't be doctors; 
hospitals tend to be run by smart people--what they do is they figure 
out how they can change the billing so they end up billing for more and 
getting the same amount of money.
  So, I am concerned about these add-on benefits. I am worried that 
these new programs are like little baby elephants, they are little and 
pretty now, but if we are not careful they are going to all grow, each 
one, into a big elephant. And, as we talk about balancing the budget, 
the final subject I wanted to talk about, this could be a problem for 
us.
  Finally, let me talk about balancing the budget. I have been involved 
in budget debates since I first came to the House of Representatives. 
We have, on many occasions, claimed to have balanced the budget. Many 
of us on various occasions have thought we had really done it. And I 
think, on balancing the budget, it is important to remember an adage 
that Abraham Lincoln used to be fond of. Abraham Lincoln once said, 
``The hen is the wisest of all birds. She never cackles until the egg 
is laid.''
  I believe that a lot of work is going to be required to make this 
budget ultimately produce a balanced budget. Much of this budget is 
based on assumptions about a strong economy--which today is very 
strong. Obviously, we all want it to stay strong and we are going to 
try to make it stronger. It is also based on the premise that these 
programs are not going to grow beyond the levels we have set out in our 
budgets, even the new programs, and that we are going to live up to 
these discretionary spending caps. Obviously, it is hard to live up to 
them. As everybody knows, we pass emergency appropriations bills for $8 
billion, and we end up breaking the budget, not only in the year we are 
in but for the next 3 or 4 years. We don't write money for emergencies 
into the bill, knowing we will have an emergency bill. It is going to 
take a tremendous amount of concerted, bipartisan effort to live up to 
the commitments we made on discretionary spending. I hope our 
colleagues are as committed to living up to this budget as they are to 
adopting it. I think, if they are, we might have a fighting chance. But 
clearly, balancing the budget is not something you buy on a one-time 
payment. You buy it on the installment plan.
  And the weakness of the program is it is based on the assumption that 
this very strong economy is going to continue into the future. It may 
and it may not. We are in the second-longest peacetime expansion in 
American history. I think it is highly improbable that we would go 5 
years without an adjustment. But we could still balance the budget with 
a minor recession if we could control the growth of these programs. I 
wish, as I said numerous times during the budget debate, we could have 
done more to control spending. I wish we could have bought more 
insurance.
  But, in conclusion, let me say that the reforms in Medicare, the 
expanded choices, represent a fundamental change in policy. And I 
believe we will all benefit from them. I think we did about as good a 
job, given that we had a Democrat President who had very strong goals 
in the tax bill, especially a belief that you can't cut taxes for 
people who pay taxes unless you give money to people who don't pay 
income taxes. I think, given that we had 1 percent of taxes to deal 
with and we had a President who didn't share our fundamental goal, I 
think overall we did a pretty good job on the tax bill and I think we 
have reason to be proud of that.
  I think the reforms and choice on Medicare are good reforms. But I 
think there is really reason to be concerned about what we have allowed 
to happen on welfare reform, and much of our budget is assuming that 
the progress we have made on reducing the welfare rolls is going to 
continue. I think we have to be concerned about growth, especially in 
these new programs. We have to enforce the discretionary spending caps 
to have any chance of balancing the Federal budget.
  So my message today is that there is a lot of work to be done. I look 
forward to participating with Senator Domenici and with our colleagues 
to try to get that work done.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Hutchinson). The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, Senator Kennedy has been waiting. I am 
only going to take a minute, Senator.
  I did not get to hear Senator Gramm's entire remarks. I pledged to 
him before that I would read them in their entirety, and I will. But 
let me make just a couple of quick observations.
  I think everybody knows--my good friend from Texas said--you can't 
get a balanced budget overnight. You do buy it on the installment plan. 
When you buy it on an installment plan that is 3 years, 5 years, or 10 
years, you have to make some assumptions. I think, distinguished 
economist that he is, he would know that.
  The Senate should know we did not use optimistic economic 
assumptions. In fact, we used CBO's very modest economic assumptions. 
There is no way we could provide an assumption, outright, that, if we 
have a serious recession, that we provided for it. But CBO's economic 
assumptions versus others, more optimistic, at least build into their 
model that, indeed, there could be a slowdown and, thus, they take 
something off the growth edge. So I don't think we have an unduly high 
one.
  Senator, I am agreeing with you that unless we seek to look at the 
new programs we created, in terms of are they performing as we 
expected, we won't make it. And, second, I am not terribly interested 
in being the enforcer on appropriations caps--which are very strenuous 
after 1998. In fact, I will give you the number. The baseline for 
discretionary, if we did nothing, is $2.943 trillion. Under this bill 
it is $139 billion less, which means for a period of time it is going 
to grow very little, in fact five-tenths of 1 percent.

  But I am not going to run around being the enforcer if entitlements 
are going wild again. You might, and I would respect you for it. But, 
essentially, we cannot balance the budget on

[[Page S8329]]

the appropriations accounts. We have to make sure we control the 
entitlements and I think you agree with that. You are not agreeing with 
me that we should not worry about appropriations. I would worry less 
than you about correct appropriations. But what the Senator has said 
about making sure we get there, and making sure we do some things to 
assure that this commitment and this path is, indeed, realized--which 
is what you are saying, I believe--I think that's correct.
  I think--so long as everybody leaves knowing that, in terms of making 
sure we don't let things within this slip and say, ``Oh, well, $10 
billion didn't matter, we thought it was that but we are wrong,'' and 
just pass those tens of billions by--we will get there. And that's not 
an exceptional thing to expect of a group which is out claiming a 
balancing budget. Would you agree? We are out there claiming it. We 
ought to be willing to say we will do what's necessary. And I think if 
we do what's here that's enough. We don't have to do a lot more over 
the next 5 years, but if we are going to do less, it is not going to be 
enough and we are all going to be ashamed.
  I thank the Senator for those observations which prompted me to say 
this because I believe that's absolutely true. I yield the floor and I 
yield to Senator Kennedy.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I yield myself such time as I require.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. KENNEDY. Mr. President, this is a great day for America's 
children. With this agreement, we have taken a giant step toward giving 
all American children the healthy start in life they deserve.
  The establishment of a new, $24 billion program to provide low and 
moderate income families the help they need to purchase health 
insurance for their children is a landmark achievement. It represents 
the most far-reaching step that Congress has ever taken to help the 
Nation's children and the most far-reaching advance in health care 
since the enactment of Medicare and Medicaid a generation ago.
  The funds provided under this bill are sufficient to assure that 
every American family has access to affordable insurance for its 
children.
  President Clinton deserves tremendous credit for his leadership in 
achieving this milestone. His fight for health security for all 
Americans in the first 2 years of his administration laid the 
foundation for the progress we made in the last Congress and for 
today's agreement.
  The Kassebaum-Kennedy legislation enacted in the last Congress 
guarantees that workers can change jobs without losing their health 
insurance coverage, or being denied coverage because of a pre-existing 
condition. The vast majority of Americans obtain health insurance for 
themselves and their families through their jobs, and ending insurance 
discrimination against those in poor health was a significant step 
toward greater health security for all families.
  Today's expansion of health insurance coverage for children could not 
have happened without President Clinton's strong support. The President 
fought hard to include a $16 billion commitment for children in the 
budget agreement. And it was his unwavering support that assured the 
additional $8 billion added by the Senate was included in the final 
bill.
  I also commend several others who contributed to this victory for 
children. Mrs. Clinton has made the issue of good health care for 
children a lifetime of commitment, and I thank her for her strong 
support. Senator Hatch's courageous leadership in the battle for health 
insurance coverage financed by a cigarette tax was absolutely critical. 
Senator Rockefeller, Senator Chafee, Senator Jeffords, Senator Kerry, 
Representatives Nancy Johnson, Bob Matsui, and Marge Roukema and others 
were effective leaders in reaching this bipartisan goal.
  Among many outside groups that worked to make this day possible, the 
Campaign for CHILD Health Now, co-chaired by the Children's Defense 
Fund and the American Cancer Society, was indispensable in its tireless 
efforts to inform and mobilize the public in support of children's 
health insurance. Marian Wright Edelman, as always, was outstanding in 
these efforts.
  When Senator Hatch and I introduced our children's health insurance 
proposal in March, we said that it would help guarantee good health 
care for millions of children who have been left out and left behind. 
These children come from hard-working families. Their parents work 40 
hours a week, 52 weeks a year--but they still cannot afford the health 
care their children need. Whether the issue is eyeglasses, or hearing 
aids, or asthma, or prescription drugs, too many children do not get 
the care they need for the healthy start in life they deserve.
  The agreement today brings new hope to these children and their 
families. It means that they will have a better opportunity to achieve 
a long and healthy life. It means that our country has at last given 
children's health the high priority it deserves.
  I am also pleased that there will be an increase in the cigarette 
tax, but I am disappointed that the cigarette companies still wield 
sufficient power in the back rooms of Congress to roll back the tax 
below the 20-cent increase approved by an overwhelming bipartisan vote 
in the Senate. A higher tobacco tax is an effective means to discourage 
children from smoking. This issue will not go away, and I expect the 
Senate to return to it later this year, either in the context of 
legislation on the tobacco settlement or as part of other bills.
  Finally, it is gratifying that the agreement drops the harsh and ill-
thought-out proposals on Medicare, such as raising the eligibility age, 
imposing a means test on premiums, and requiring copayments for home 
health care that would have penalized the oldest, sickest, and poorest 
senior citizens. Long-run reforms are needed to keep Medicare strong, 
but any reform worth the name deserves careful deliberation by 
Congress, not the short-circuited consideration imposed by the strict 
rules on budget bills.
  Finally, I express my very personal appreciation for the strong 
leadership that was provided by Senator Daschle, on our side, and for 
his strong commitment on health care. Senator Daschle had indicated 
that health care for children was going to be one of our Democratic 
strong priorities in this Congress. His unflagging strength and 
commitment and support for this program was invaluable in seeing its 
achievement.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  Mr. DOMENICI. Mr. President, I ask unanimous consent that the time be 
charged equally to both sides.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DASCHLE. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DASCHLE. Mr. President, I want to take a few moments to talk 
about the budget agreement, and this reconciliation bill in particular.
  Let me begin by complimenting the distinguished majority chairman, 
Senator Domenici, and the ranking member, Senator Lautenberg, for their 
outstanding work in this whole effort. As has been said now by many 
Members, this would not have been possible were it not for their effort 
and the leadership they have demonstrated.
  Let me commend the administration's negotiators--Secretary Rubin, 
Chief of Staff Erskine Bowles, John Hilley, and others--for the 
extraordinary effort they have made in working with us on the 
President's behalf.
  The majority leader deserves a great deal of credit. This would not 
have been possible without his direct participation. He ought to take 
great pride in this agreement's accomplishments.
  Many others on both sides of the aisle have worked diligently over 
the last several weeks to bring us to this point, and they too deserve 
credit. I am very appreciative of their efforts. This agreement is one 
of the most extraordinary accomplishments achieved, at least since I 
have been leader and perhaps since I have been in the Senate.
  I think the message in the last election on the part of the American 
people all over the country was very simple:

[[Page S8330]]

 We want Republicans and Democrats to cooperate, to work on major 
problems together, to address the major problems in a way that gives 
them and gives us hope that there is a better future, a stronger 
future. They recognize, as we do, that the deficit is a major problem 
and has been a major problem. I think this agreement--as spelled out in 
both the spending and tax reduction bills--is clear evidence that we 
understood that message and have responded as consequentially and as 
sincerely as we possibly can.
  This agreement is the final downpayment on a budget process that has 
now been underway for several years. In fact, it goes back to the vote 
of 1993, as some of my colleagues have already articulated.
  This chart, Mr. President, very clearly illustrates from where we 
have come and what we have left to do. The projected deficits prior to 
the enactment of the 1993 economic package are represented in the top 
line.
  In 1993, we made the tough choices, the very critical decisions in 
1993. As a result, we have been able to reduce the actual and projected 
deficits by $2.4 trillion over the period from 1993 to 2002. Were we to 
stop at this point and do nothing, annual deficits for the next 5 years 
are currently projected to remain in the range of $100 billion. If, as 
I expect, we pass this bill by week's end, we will have completely 
eliminated the deficit no later than the year 2002. In other words, the 
net savings over the next 5 years that will be generated by enacting 
this budget agreement will total over $200 billion.
  So we will achieve our goal of a balanced Federal budget by the year 
2002, if not sooner, as a result, first, of adoption of the 1993 budget 
agreement, and, second, enactment of the 1997 budget agreement. Passage 
of these two pieces of legislation will bring us to a balanced Federal 
budget for the first time since 1969.
  There were many fears expressed about what would happen to our 
economy and the deficit if we were to enact the spending and tax 
policies contained in the budget agreement of 1993. I will not belabor 
the point or go over those fears at this time. Instead, I will simply 
concentrate on what has been said about the economy since the passage 
of the 1993 package by people outside of the Senate, in particular the 
Chairman of the Federal Reserve Board, Alan Greenspan.
  Here's what he says about the state of our economy since the adoption 
of our 1993 budget plan: we are ``now in the 7th consecutive year of 
expansion, making it the third longest post-World War II cyclical 
upswing to date.''
  In addition, he said:

       This strong expansion has produced a remarkable increase in 
     work opportunities for Americans. . . . Our whole economy 
     will benefit from their greater productivity.

  Finally, he said:

       Consumers are also enjoying low inflation . . . financial 
     markets have been buoyant . . . in a relatively stable, low-
     inflation environment.

  That is about as optimistic a series of statements as I have ever 
heard the Chairman of the Federal Reserve make. He has a reason for 
making them--the economy is strong, we have been able to reduce the 
deficit, and we have an optimistic outlook about our future. And it is 
universally held. Whether we turn to the Chairman of the Federal 
Reserve Board, or Members of Congress, or the business community, or 
members of labor, the response is the same: Our country is stronger 
today.
  There can be no doubt that we are strong.
  Unemployment and inflation right now are at a combined rate of 8.7 
percent. That is the best since Lyndon Johnson was President of the 
United States.
  Inflation is at a 2.8 annual percentage rate. That is the best since 
John Kennedy was President.
  The employment picture, with 12 million new jobs, is the best 
employment situation our country has faced in its history. Construction 
jobs are stronger now than at any time since I was born, since Harry 
Truman was President.
  Consumer confidence has increased 14 percent in the last 4 years, 
which is the best we have seen since President Eisenhower.
  Deficit reduction has been reduced to under 1 percent of gross 
domestic product in 1997. That is the best we have seen in all the 
years that I have lived. One would have to go back to Harry Truman's 
Presidency to find a time when it was this good.
  Home ownership has increased from 63 percent to 65 percent, the best 
ever. Never in our Nation's history have two-thirds of all Americans 
lived in their own homes.

  The stock market has gone from 3,500 to more than 8,000, a growth 
record that has been matched only once, and that was during World War 
II.
  Median family income is up $1,600 since 1993, the best since Lyndon 
Johnson was President of the United States.
  So, Mr. President, we feel very good about the circumstances and 
about the economic progress and performance of the last 4 years.
  At the same time, we have said repeatedly over the last several 
months that there are four categories by which we would judge any 
agreement that would attempt to make further progress on the deficit: 
fairness, fiscal responsibility, education, and how we target the 
investments that we will make as a result of this legislation. Those 
are the four criteria. How fair is it? How responsible is it fiscally? 
How good an educational program can we achieve? And how well are we 
going to be able to target our investments?
  Let us take the first category. How do Americans do under this 
agreement on the issue of fairness? Many of us talked for some time 
about how important it was that we benefit all income categories, not 
just the top income category, but those working families in the $20,000 
to $30,000 income categories, people who pay a portion of their income 
to income taxes but an even greater portion to payroll taxes. Are we 
going to be able to provide tax relief to families such as those?
  We will provide a child tax credit to 27 million working families. 
Families who pay thousands of dollars in payroll taxes, families who 
pay income taxes, families who try to make ends meet, each and every 
week, each and every month, those families are going to benefit very 
directly as a result of what we were able to do with the child tax 
credit.
  And $24 billion has been committed in the first 5 years for a 
children's health program, which is the largest single investment in 
health care since the passage of Medicaid in 1965. That is just the 
beginning, because we have also committed another $24 billion in the 
second 5 years. For the first time in history, thousands of South 
Dakotans and millions of Americans are going to benefit from a Federal 
health program that for the first time will provide meaningful health 
care to children who are not getting it today.
  And $1.5 billion is going to be committed to low-income seniors to 
help pay for Medicare premiums.
  So, Mr. President, from a fairness point of view, there can be no 
doubt, when it comes to health, when it comes to the array of 
opportunities that we present working families, this bill deserves our 
support.
  Mr. President, we also, as I indicated, made a very important point 
of arguing the need for targeted investment. Indeed, this legislation 
provides opportunities for targeted investment in environmental 
cleanup, in enterprise communities, and targeted job tax credits, 
ensuring that family farms and family businesses are going to be 
protected as one generation transfers its property to the next.
  Employer tax deductions are going to be made available for employee 
education and training.
  In a number of ways, we say we are going to take the resources 
available to us and target them to where they can be used to the 
greatest advantage--on environment, on communities, on jobs, on farms 
and small businesses. We provide an array of opportunities in that 
regard to do what Democrats said was very critical: provide the kind of 
targeted investment that is so essential to ensuring that all aspects 
and all elements of our American society benefit from what we are doing 
today.
  The third criteri we spelled out was fiscal responsibility. How well 
do we do in that regard? We said at the very beginning, we do not want 
to see an explosion of deficit in the outyears. We wanted to be 
absolutely certain that, regardless of what else we do, we did not want 
to pass a tax cut we cannot afford and place ourselves back in the same 
box we created for this country in

[[Page S8331]]

the 1980's. We did not want to relive the bad old days of those 
extraordinarily high deficits. Instead, we now recognize that achieving 
a balanced budget in 2002 is only the first step in maintaining a 
balanced budget in the years beyond 2002.
  So we do not index capital gains. We put income limits on individual 
retirement accounts. We do not index the estate tax exemptions, simply 
because we were afraid of the extraordinary explosion in outyear 
deficits that these changes would trigger.
  I recognize the fact that we did not go as far as some of us would 
have liked to ensure fiscal responsibility, to ensure with a high 
degree of confidence that we will be able to maintain a balanced 
budget. However, I also believe we took a number of steps that allow 
for some confidence that once we have balance the Federal budget, it 
will stay balanced in the years 2003, 2004, 2005, and beyond.
  Mr. President, the last category is one that is probably of greatest 
importance to many working families because they are trying to make 
ends meet and still send their children to college. In this information 
age, it is important that we do all we can to make available to working 
families the tools and the resources necessary to allow every child who 
graduates from high school the opportunity to get more education. So 
this bill provides the single largest investment in higher education 
since Harry Truman passed the GI bill almost 50 years ago.
  We provide a $1,500 HOPE credit in the first 2 years of college and a 
20 percent tuition credit for college juniors and seniors and lifelong 
learning opportunities. There are families of all ages with many 
different sets of circumstances involving children who want to go to 
college, involving a spouse who may want to get additional education. 
An array of different challenges confront all working families as they 
attempt to cope with the circumstances we are facing in this 
information age. We provide that mechanism and those tools to working 
families in ways that we have not done in more than four decades.
  So, Mr. President, as a result of this President's advocacy, we are 
committing resources to education that we have not done in the period I 
have served in the Congress.
  There are no Pell grant reductions. There are opportunities for 
people to use other tools as well and not be penalized for using the 
credits that we now make available.
  In the end, Mr. President, it all comes down to real names and real 
families, people that are truly going to be affected. While there are 
many families who have come before us over the course of the last 
several weeks to describe their situation, and talk about their 
circumstances, I think the Richards family in Sioux Falls, SD, who 
talked to us via television camera just a couple of days ago, is a 
clear example of what this legislation means for a typical American 
family.
  Charlie Richards is a teacher. He is not only a teacher; he has two 
extra part-time jobs. There are many people in South Dakota who work 
not just one job, but two and three jobs in order to make ends meet. 
Charlie Richards is that kind of an individual, hard working. He 
believes that his family must have the very best that he can provide 
them, and he is willing to commit the extra time and effort and hours 
to see that provides his family with a quality of life that he now only 
dreams of.
  His wife Karen is pregnant with their second child. Their income is 
about $24,000 a year. As a result of what we are doing this afternoon 
and what we will do this week, Charlie and Karen will get a $975 child 
tax credit. This figure was zero under the legislation originally 
drafted and passed by the House. Both children, once the second child 
is born, will get health care coverage, perhaps for the first time. 
Both children will be eligible for HOPE credits when they are ready for 
college. Both children will be eligible for KidSave and other 
individual retirement accounts when savings increase.
  For the first time, Charlie and Karen will be able to perhaps set a 
little money aside for savings, maybe to buy a home, maybe to improve 
the home they are living in now, maybe to give their family just a 
little bit more hope that they are going to be able to make ends meet 
and do the kinds of things that every family dreams of doing, not just 
with the one child they have now, but with two.
  So to Charlie and Karen, and to families just like them across the 
country, let us say today that we give them hope of a better future, a 
brighter and more realistic opportunity of achieving their goals.
  We heard our constituents last year when they told us we have got to 
work together to solve problems, when they told us it is important that 
they have the kind of economic strength and security that they want so 
badly, when they told us we have got to continue to work and put our 
best effort forward to reduce the debt. We heard them on all these 
fronts. As a result of the extraordinary leadership and work done on 
both sides of the aisle, we are responding today in a way that makes me 
very proud.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Stevens). Without objection, it is so 
ordered.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, this conference report comes before the 
Senate in an atmosphere of near euphoria. While I have signed the 
conference report--I was a Democratic conferee from the Finance 
Committee on these matters--and while I will vote for each of the 
bills, I cannot share the elation. I say this with the greatest respect 
for the Senators who managed this through the Budget Committee and, of 
course, for our own revered chairman of the Finance Committee--Senator 
Roth--and others who have worked so very hard on the legislation. 
Surely, there is much to applaud in both bills. But the agreement does 
little to address, in a serious way, either short run or long-run 
budget problems.
  In the short-run, the Federal budget is already on the verge of 
balance. This is due to a strong 7-year economic expansion. The 
expansion is attributable, in part--very probably in large part--to the 
budget decisions made by the President and this side of the aisle in 
the Senate in 1993. Indeed, my respected colleague, Bob Kerrey, 
suggests that the Omnibus Budget Reconciliation Act of 1993 be renamed 
the Balanced Budget Act of 1993. The deficit reduction brought about by 
OBRA 93, as our usage has it, is expected to reduce the deficit by a 
cumulative $924 billion through 1998. That is almost a trillion 
dollars.
  I stood on the floor at this desk, with my great and good friend, 
Senator Sasser, as the chairman of the Budget Committee at that desk. I 
was chairman of the Finance Committee. In the end, we enacted that 
measure by one vote, which has brought us to where we are today. I 
don't know that the Nation, having heard so much for so long about 
deficits, had been properly concerned about them so much and for so 
long. It is not easy to grasp the possibility that the deficit for this 
fiscal year, which will end September 30, will come in under $30 
billion. That is about one-third of 1 percent of gross domestic 
product--an insignificant number. If the present trends continue, we 
could well be in a surplus in a year's time--the first such surplus, if 
I rightly recall, since 1969.
  And then having reached the point where we have free resources, we 
would be in a very proper position to turn to questions of, do we want 
to cut taxes, which clearly we might do? I would much prefer to see tax 
rates reduced--and I will talk about that tomorrow--or to provide new 
benefit programs of the kind that we are providing, but not before we 
have done what we said we would do first, which was to balance the 
budget.
  Over the long run, too, this legislation does less than many of us on 
the Finance Committee would have liked. Indeed, I can say, sir, that 
all of us on the Finance Committee would have liked, as the measure I 
am referring to, passed unanimously in the Finance Committee, 20 to 0, 
on June 18. In particular, we chose to confront the long-run issues in 
Medicare. We are told that our two major retirement programs--Social 
Security and Medicare--

[[Page S8332]]

are in grave difficulties. That is not so clear in the case of Social 
Security.
  Four rather simple steps would bring us into actuarial balance for a 
full 75 years--the usual way solvency is measured for the Social 
Security program. It could be done by four simple measures.
  Construct an accurate cost of living index--rather than a consumer 
price index--in the manner that has been proposed by the chairman of 
the Federal Reserve Board, the previous director of the Office of 
Management and Budget, Dr. Rivlin, and the Boskin Commission 
established by the Finance Committee when Senator Packwood was 
chairman--he and I jointly did that.
  Tax Social Security retirement benefits in the way that all other 
pensions are now taxed.
  Include all workers in the Social Security system. To this day, in a 
kind of exasperating holdover from the 1930's, there are several 
million State and local government employees who are not in the Social 
Security system as government employees, but who acquire the benefits, 
in any event, through part-time work outside.
  Increase the computation period from 35 to 38 years.
  Just take those four measures, and a few other odd things, and we put 
Social Security in fine fiscal condition into the second half of the 
next century.
  This is not the case with Medicare. Medicare is a health program, and 
it provides health care to a population that grows older and does so in 
the setting where medical science grows ever more successful in the 
treatment of the diseases associated with aging. But those treatments 
are, of necessity, ever more expensive. There is a true problem in 
Medicare. We have made many changes in the present program, so as to 
provide another 10 years of trust fund solvency. But in fact, sir, 
since 1992, the revenues from the Medicare payroll taxes have not 
equaled the outlays. And we have used general revenues to fund the 
shortfall, and since the Federal budget has been in a deficit 
situation, we have had to borrow money to do it. We can say, if you 
like, that we have 10 years of solvency. There is not now and there 
won't be until we do very important things.
  We began that effort in the Finance Committee on June 18. We took the 
decision to increase the age of eligibility for Medicare from 65 years 
to 67, in very gradual steps over the next quarter century, and 
bringing it into line with the increased age of eligibility for Social 
Security benefits, provisions adopted in 1983 in the aftermath of a 
commission, headed by Dr. Greenspan, on which Senator Dole and I 
served, among others. That measure just responds to the age profile, 
the demographic profile of the American people. We are living longer. 
And I would say, Mr. President, also, while we are living longer, we 
are retiring earlier. The majority of Americans now retire at age 62, 
when a reduced benefit on Social Security is available, and some 70 
percent have retired by age 65. It is not entirely clear why. Some have 
sufficient resources and they simply want to stop working, and others 
have not gotten work, or others find the work no longer possible for 
them. But the fact is that most people now are retired before age 65, 
and on actuarially reduced benefits, so the trust funds are left 
unaffected. We proposed to do that with Medicare.
  If there is a problem of interim insurance from the time you leave 
employment to the time you are retired, well, we can resolve that 
problem. We could be thinking about it right now, in terms of those who 
retire early on Social Security. The problem of health care insurance 
does not deter, so far as we can tell, persons from doing that. It is 
not an admirable fact; it is a distressful fact that the last time the 
Social Security Administration did a survey asking persons the reasons 
why they retired early was about 15 years ago. The Social Security 
Administration is very slow in providing the kind of information we 
would like to have to make these decisions.
  We also, in the Finance Committee, unanimously agreed to increase the 
part B premiums for upper-income beneficiaries. That is to say, to 
reduce the part of the Medicare Program paid for by general revenues. 
When the program was begun--and I was involved if not peripherally, but 
with some measure of consequence as an Assistant Secretary of Labor for 
Policy Planning and Research in the Johnson administration--we provided 
that this program, Part B, should be paid for half by premiums paid by 
beneficiaries and half by general revenues. Over the years, as a 
technical result of having constrained the increase in premiums to the 
same percentage increase in Social Security benefits, while the cost of 
medical care increased faster than the consumer price index--which 
itself was an inadequate measure of the cost of living--that 50/50 
share dropped to 25 percent for beneficiaries and 75 percent for the 
Government.
  We would simply provide that persons with higher incomes would pay 
more than the simple 25 percent that the great majority of persons 
would pay. We are talking about a very small number of people--about 6 
percent of all beneficiaries--but the principle is that if you have the 
income, you don't need the subsidy. Indeed, the overall subsidy would 
still be much greater than it was originally envisaged in 1965--with 
the Federal Government financing 72 percent of program costs out of 
general revenues. The time has come to do that.
  Equally, the time has come to provide some measure of copayment for 
home health care, which has been growing at extraordinary rates, and 
which is evidently subject to serious abuse. This was widely reported 
in the press just this week. These items have come to be known as the 
big three Medicare changes. They were adopted on June 25 here on the 
Senate floor by a vote of 73 to 27. However, they are not included in 
the conference agreement. The House was not willing to do this, and I 
can only regret that we have not done so. I stand here and say, 
however, that the Senate has led the way and has shown you can do it. 
The response in public opinion has been quite moderate. The comment in 
the press has been almost unvaryingly supportive.

  These are necessary, sensible things to do. And it is time we set 
about doing them. There is an opportunity that we will not miss, 
particularly if the Finance Committee--under the leadership of Chairman 
Roth--continues to work in a bipartisan manner.
  About 80 percent of the savings in mandatory programs in this bill 
before us, this extraordinary large bill--I would hate to see it 
dropped on anyone's foot--about 80 percent of those savings came from 
actions by the Finance Committee. The 5-year savings for Medicare are 
$115 billion. That is a decrease in the increase, in a manner we have 
come to be familiar with, and, as I have said, the trust fund will be 
in technical balance for about 10 years.
  This does buy us time for an important provision in the bill, the 
provision for the creation of a national bipartisan commission on the 
future of Medicare--time for such commission to do its work. The 
statute provides that it issue its report by March 1, 1999, a year and 
a half from now.
  The commission is required, in the first instance, to review and 
analyze the long-term financial condition of the Medicare Program, 
which is not an easy matter because we are talking about the long-term 
progress of medicine in an age of discovery that has proved 
extraordinarily creative and fruitful but equally and not 
unsurprisingly costly, and to identify the problems that threaten the 
financial integrity of Medicare, including the extent to which Medicare 
update indexes do not accurately reflect inflation.
  If I could say parenthetically, Mr. President, we have had a great 
deal of talk about the accuracy, or inaccuracy, or sufficiency, or 
insufficiency of the Consumer Price Index. The fact is, we have at 
least four distinct price indexes in our present statutes and in our 
practices. They are spread all over the Government. One of them indexes 
Medicare expenses in ways that it seems to me probably overstate 
inflation.
  Next the commission is asked to make recommendations regarding the 
financing of graduate medical education, including consideration of 
alternative broad-based sources of funding for medical education. This 
could not be a more important matter. The question of medical schools 
and medical education is absolutely essential as we begin the process 
of economic rationalization in the provision of health

[[Page S8333]]

care, as we do in this measure making a wide range of HMO's available 
to Medicare beneficiaries and Medicaid recipients.
  In this regard, Mr. President, might I just go back to 1994 when the 
Finance Committee was taking up the health care proposal sent to us by 
the administration in the last days of the first session of the 103d 
Congress. I was in New York City and asked the distinguished head of 
the Memorial Sloan-Kettering Cancer Center in New York--Dr. Paul 
Marks--if he would arrange a seminar to bring me up to date on the 
thinking of medical deans and medical academic researchers in the area 
of health care generally. We met one morning in a conference room in 
January at 10 o'clock. And at about 10:20, one of the deans, who comes 
from another part of the country, said, ``You know, the University of 
Minnesota may have to close its medical school.'' That was said to me 
and I knew I had heard something important. Minnesota is the kind of 
State where they open medical schools. They don't close them. I asked, 
``How could that be?'' They said, ``Well, managed care is making its 
way from the west coast to the east coast. It has reached the high 
plains, and is now widely used in Minnesota.''
  Persons enrolled in managed care plans are not sent to teaching 
hospitals because they are, by definition, more expensive. If you do 
not have a teaching hospital, you can't have a medical school. And, 
indeed, the teaching hospital at the University of Minnesota has since 
merged with another health care institution.
  We are dealing with something profoundly important. An ancient 
practice of medicine goes all the way back to the Greeks. The 
establishment of medicine doesn't go back just to the Greeks, but the 
idea of a profession of medicine with a code of ethics, a Hippocratic 
oath, certain responsibilities, certain immutabilities in medicine--
something of a mystery, something of a guide. In my youth, doctors 
would prescribe medicines taken from drugstores in a handwriting that 
was illegible to the laymen. Only the pharmacist could read it. All of 
that is disappearing.
  In our hearings in the Finance Committee, Msgr. Charles J. Fahey, a 
professor at Fordham University said to us, ``What you are seeing is a 
`commodification' of medicine.'' There is a striking image here on the 
Senate floor. For generations, we have argued the issue of whether 
labor is a commodity. Finally, in the Clayton Antitrust Act of 1914, we 
said labor is not a commodity. Well, medicine is becoming one.
  The next week, Dr. Raymond G. Schultze, at the time the head of the 
UCLA Medical Center volunteered, and said, ``Can I give you an example 
of that?'' We were discussing it with our witnesses, saying that is a 
new idea. He said, ``In southern California, we now have a spot market 
of bone marrow transplants.'' Well, when you get into that, that is 
good. It keeps control on prices. It brings rational decisionmaking 
into this market. But it doesn't provide for the public good. Markets 
won't provide for the public good that a teaching hospital and a 
medical school constitute.
  So our commission must pay special attention to these institutions.
  Finally, we ask the commission to make recommendations on modifying 
the age of eligibility for Medicare so that it corresponds to the 
changes in the age of eligibility for Social Security. I would simply 
suggest that this provision--the instruction to the forthcoming 
commission to deal with this matter of age of eligibility--obviously 
reflects the decision in the Finance Committee and the Senate that it 
ought to be increased to be in harmony with that of Social Security.
  The Medicaid changes in this legislation will save about $10 billion 
over 5 years by providing greater flexibility to the States, and at the 
same time, as I have remarked earlier, the Medicaid recipients will be 
encouraged to participate in HMO's just as Medicare recipients do. When 
we began Medicaid and Medicare, there were very few arrangements which 
we now call health maintenance organizations. Fee-for-service medicine 
was almost the universal experience. So, naturally, when people 
retired, they continued it, and Medicaid recipients took it up. That 
has changed with the general population and ought to change with this 
population as well.
  To the one bit of really strikingly good news in this measure, we 
have taken action to provide health coverage for uninsured children, 
$24 billion over 5 years. This will be the largest expansion in 
Government health insurance since the enactment of Medicare and 
Medicaid in 1965. We have done something that has not been done in a 
generation, and something that is needed. It will be financed by an 
increase in the cigarette tax that will eventually reach 15 cents per 
pack. Both of these measures were also an initiative of the Senate 
Finance Committee.
  I would also note that the conference committee, even prior to our 
commission, includes provisions to ensure an adequate stream of Federal 
funding for teaching hospitals. Financing of health care continues to 
undergo dramatic change. We will have a more comprehensive proposal 
from our commission. But we have done some things in this bill.
  Medicare payments to HMO's now reflect the higher cost of providing 
care in teaching hospitals. Under the legislation before us, these 
payments will be carved out, as we say, and sent directly to the 
teaching hospitals, thereby ensuring that the money will go where it is 
intended.
  In addition, while payments for medical education have been reduced 
as part of the overall reduction in payments to hospitals and 
physicians that are inevitable in a deficit reduction bill, the 
conference report includes the Senate language which limits the cuts to 
about $5.5 billion rather than $6.5 billion recommended by the House.
  Again, sir, I would say that had we not decided to go for a large tax 
increase, which we will talk about tomorrow, we wouldn't have had to 
make some of these reductions which I think we will find difficult, if 
not indeed painful.
  Finally, it should be noted that this bill sensibly increases the 
statutory debt limit from $5.5 trillion to $5.95 trillion, which will 
be sufficient to take us through December 1999--a much smaller increase 
would be required if we decided simply to stay the course that we set 
in 1993.
  So, Mr. President, I will support this conference report. It is the 
product of a long and difficult effort to reach compromise between the 
Congress and the President. It was characterized by extraordinary 
unanimity in the Finance Committee, where 80 percent of the mandatory 
program reductions are to be found, and by very large majorities here 
on the Senate floor.
  I think that speaks to the sincerity of the participants and, I hope, 
to our knowledge. If I consult my hopes in this matter, there is no 
real alternative. And, in the meantime, we have done some things that 
we surely can be proud of.
  I see my friend, the Senator from West Virginia, is on the floor. I 
know what particular pleasure he will take in the provision of $24 
billion in health insurance for children, the largest such increase in 
health care in a generation since the enactment of Medicare and 
Medicaid was done.
  With that, Mr. President, and seeing that there are other Senators 
present, I yield the floor.
  I thank the Chair.
  The PRESIDING OFFICER. Who seeks recognition?
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DOMENICI. Mr. President, I do not know who is controlling time, 
but certainly the Senator can take as much time as he desires. There is 
nobody here on your side. I give it to you off my side.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized 
under the time under the control of the Senator from New Jersey.
  Mr. DORGAN. Mr. President, I thank very much the Senator from New 
Mexico for his courtesy, and I will take the time under the control of 
the Senator from New Jersey.
  Mr. President, I will make a couple of general comments first, and 
then I want to speak specifically about a provision in the conference 
report which is before us that is enormously troubling.
  First let me explain that I intend to vote for this legislation. The 
Senator from New Jersey and the Senator from

[[Page S8334]]

New Mexico and others have, I think, done a remarkable job of crafting 
a bill that represents a compromise with the White House, with the 
Republicans and the Democrats, putting together a piece of legislation 
that tackles this budget deficit, and is the second step of several 
steps that we have taken, first in 1993 and then now in 1997, which 
will lead to a fiscal policy that is under control in this country--not 
only tackling the deficit but doing so in a way that makes a great deal 
of sense, cutting spending in some areas and increasing investment yet 
in other areas.
  This builds on accomplishments that we began earlier by tackling the 
budget deficit effectively but also by saying there are several other 
things in this country that are enormously important. One is children's 
health, what to do about children's health care in this country. The 
fact is this piece of legislation and the accompanying piece of 
legislation will make available a substantial amount of money to 
provide health insurance for children who are not now covered with 
health insurance. The question of whether a sick child gets health 
treatment or gets treatment in the medical care industry when that 
child is sick ought not ever be a function of whether that child has a 
parent with money in their checkbook. This piece of legislation will 
provide substantial additional coverage to provide health care to 
children, especially those who come from impoverished families.
  This piece of legislation also says education matters, education is a 
priority in this country. This bill puts on track 1 million additional 
kids to be enrolled in Head Start by the year 2000. Head Start matters 
and Head Start works. Anybody who has been to a Head Start center and 
seen those bright little eyes of children who are getting a head start, 
coming from circumstances of difficulty getting a head start, 
understands this program works. This program saves money. And this 
program invests in the young lives of young people who otherwise would 
not have had an opportunity.
  Mr. President, 300,000 more eligible college students will get 
additional help in Pell grants. This agreement places a priority on 
education, and that is exactly where the priority in this country ought 
to be. And finally this agreement solves a problem that caused me to 
vote against this legislation when it left the Senate. When the 
legislation left the Senate, it had two things that I did not support. 
One, increasing the eligible age of Medicare from 65 to 67 and, two, 
means testing Medicare.
  Let me explain quickly I am willing to support means testing of 
Medicare. I am not willing to support providing a means test for 
Medicare for any purpose other than making Medicare solvent --certainly 
not for the purpose in a reconciliation bill of making room for some 
tax cut somewhere else. We will have to and we must find a way to deal 
with the ticking time bomb, the demographic time bomb that is going to 
cause us problems both in Medicare and also in Social Security because 
of the aging of our population. I understand that. In the construction 
of solving these problems, I am willing to cast hard votes on the issue 
of Medicare with respect to means testing. I am unwilling to do so in 
the construct of a reconciliation bill. This is not where that sort of 
thing should have been done, and I did not support it when it left the 
Senate. That has been solved. Those provisions are out of this 
legislation. This legislation is better because of it.
  Let me mention one additional point. Senator Rockefeller, from the 
State of West Virginia, is here to discuss another subject with me, but 
the point about health care and Medicare especially is one that all of 
us ought to understand. Even though it is a challenge, we ought to 
understand that this is born of success. Mr. President, 100 years ago, 
the average life expectancy in America was 48 years of age. Nearly a 
century later it is 78 years of age. Why? A lot of things. Better 
nutrition, better lifestyle, breathtaking changes in health care, new 
knees, new hips, cataract surgery, open up the heart muscle when it has 
been plugged, give people additional life, breathtaking medical 
advances, and therefore a 30-year increase in life expectancy in our 
country in one century. It is wonderful. It is born of enormous 
success. It is also very expensive, and that is also causing part of 
our strain with respect to the Medicare Program, and we must make that 
program solvent for the long-term because it is too valuable a program 
for us not to fix it for the long-term.

  So I wanted to make a few comments. I intended to make more, but I 
will abbreviate them because we have another subject that is critically 
important. I want to make a few comments about the job that I think was 
done by the Senator from New Mexico, the Senator from New Jersey, the 
President and many, many others. It is nice for a change to be talking 
about something that is bipartisan. The American people tend to 
believe, and in many cases rightly so, that instead of getting the best 
of what both political sides have to offer we often end up with the 
worst. At least in this circumstance we have engaged in a bipartisan 
agreement that I am going to vote for, I am going to support.
  Is everything here the way I would like or the way I would write it? 
No. But we have advanced in the area of education and health care and 
tackling the deficit and a number of other areas in a way that is 
significant and in a way that will be beneficial to this country's 
future, and I am going to vote for it.
  Now, having said that in laudatory terms, let me say there are a 
couple things that give me enormous heartache here, and one of them is 
a problem the Senator from West Virginia and I want to talk about for a 
couple of minutes. And at the end of this I intend to make a point of 
order under the Byrd rule against the universal service provisions in 
this conference report.
  Let me describe it very briefly and then yield to the Senator from 
West Virginia. There is, in my judgment, a fundamental mistake being 
made in the conference report in this reconciliation process. And that 
mistake is this: This conference report will use universal service 
funds in the Telecommunications Act for the purpose of plugging a hole 
in the budget process.
  In my judgment, that is totally and completely inappropriate and 
without foundation. Those who were involved in it were repeatedly told 
this is inappropriate and yet somehow through the mechanisms of the 
Congressional Budget Office and the Office of Management and Budget and 
a range of other interests it got stuck into this piece of legislation.
  Let me describe it very briefly. We have in this country something 
called the universal service provision in the Telecommunications Act. 
What does that mean? It means that in this country, even if you are in 
an area where it is very expensive to provide telephone service, we 
want to make sure you have good telephone service at an affordable 
price. If you happen to live in an area where it is very expensive to 
provide telephone service, we have a universal service fund that 
collects resources from all of the users in the country and uses it to 
drive down the cost to those in the highest cost areas of the country 
so that everyone in this country has affordable telephone service.
  That is what universal means. It has been around forever and for a 
good purpose. Every telephone in this country is more valuable because 
there is a telephone in the smallest highest cost area of this country 
and we have decided to drive down those costs so that telephone service 
is universally affordable.
  Now, the universal service fund produces the money to do that. It is 
not a fund that comes into the Federal Government. It is not Federal 
money. It is not a fund that has money that the Federal Government 
spends. It is completely apart and separate from the Federal coffers.
  Two years ago, we passed something called a Telecommunications Act 
and now we are told by the Congressional Budget Office and by some 
others that the way the universal service fund is worded in the 
Telecommunications Act there is justification for the Congressional 
Budget Office and the Office of Management and Budget to rule that the 
universal service fund can be used in the construct of a Federal budget 
as both revenues and outlays.
  That is pure nonsense. This has nothing to do with the Federal 
budget--nothing. And those who believe it does have either misread the 
law or don't

[[Page S8335]]

know the foggiest thing about what they are reading.
  Now, we have tried very hard to pull this out of this conference 
report because it is a couple, I guess it is a $3 billion plug they 
stuck in, just like a cork in a big hole. They walk around with corks 
in their pocket down at OMB or CBO, and say, well, here is a big hole 
we can't explain; we will stick a cork in there. This cork is the 
universal service fund. And the minute you start using that as a cork 
the cork will get bigger every year they manipulate it. This is a 
misuse of the fund. And the Congressional Budget Office and the Office 
of Management and Budget had no business and no capability of 
suggesting that this is a part of the Federal Treasury.
  Now, I would like to yield for purposes of discussion. At the end of 
the process, I am going to make a point of order, a Byrd rule point of 
order. And let me, as I yield to the Senator from West Virginia, say 
that the Presiding Officer, who is on the Senate Commerce Committee and 
was integrally involved in the issue of the construction of the 
Telecommunications Act and the universal service fund, has been 
involved in signing letters and discussions with other Members of 
Congress about this very subject. The Senator from Arizona, the current 
chairman of the Senate Commerce Committee, feels the same way I do. It 
is inappropriate to have it in this conference report in this manner. 
The Senate minority leader feels the same way. A good number of us feel 
the same way. And yet we seem powerless at this point to pull it out of 
this conference report. I expect that my challenge on the Byrd rule is 
probably not going to survive for reasons that I will understand, but I 
think it is critically important that we raise this issue now so it 
will not become habit forming; this will happen once and only once. And 
between now and the next time someone has an urge to do this with the 
universal service fund, I hope we have the law changed to disabuse 
anybody that they can interpret any language in the Telecommunications 
Act with the universal service fund in any way which suggests it is 
part of the Federal Treasury assets receipts or outlays.
  Mr. President, the Senator from Arizona I notice is in the Chamber. I 
just mentioned him. He is the distinguished chairman of the Senate 
Commerce Committee. I know the Senator from West Virginia also wishes 
to be recognized. I would be happy to yield the floor so the Senator 
from Arizona may speak.
  The PRESIDING OFFICER. Who yields time?
  Mr. DOMENICI. How much time would the Senator like--10 minutes?
  Mr. McCAIN. Three minutes.
  Mr. DOMENICI. I yield 5 minutes to the Senator from Arizona.
  The PRESIDING OFFICER. The Senator from Arizona is yielded 5 minutes 
from the time under the control of the Senator from New Mexico. The 
Senator from Arizona.
  Mr. McCAIN. Mr. President, I understand and appreciate Senator 
Dorgan's concerns. I would disagree with the action of challenging it. 
The Senator from North Dakota is quite correct in one sense; Federal 
finagling with the universal service fund ought to raise concerns over 
any potential impact on the provision of essential phone service to 
rural and high-cost areas and low-income consumers.
  Mr. President, I think it is important to put its genesis and its 
likely real life effect into perspective.
  I reluctantly concurred with the last-minute--I emphasize 
reluctantly--inclusion of this provision in the bill. I am sure I am 
telling the worst-kept secret in town when I tell you this provision 
was dreamed up by the Clinton administration and essentially imposed on 
the Commerce Committee conferees by OMB. It is not a provision we liked 
and not a provision we wanted, but it was made very clear to us that 
our failure to include it would likely result in our losing control of 
the bill. And if this were to occur, the probability was that not only 
this provision but numerous others that would be worse, such as 
spectrum fees, would get added to the bill if that happened.
  So including this provision was by far the lesser of two evils. This 
is particularly so because it is hard to see how this provision is 
likely to have any real life effect on maintaining essential telephone 
service. Basically, what this provision does is shift $3 billion in 
funds between the Treasury and the universal service fund in 
alternating fiscal years in an attempt to cover a residual $3 billion 
savings shortfall in the outyears.
  Because industry universal service fund subsidies today total over $6 
billion and are projected to soar as high as $12 billion to $20 
billion, there can be no doubt that the telephone industry will be 
financially able to sustain a $3 billion loan for the limited time 
period prescribed. Similarly, if we really think that the Treasury will 
not be in a position to repay a $3 billion loan, we have far worse 
deficit problems than this bill can ever hope to cure. And because the 
bill explicitly provides that telephone companies may not raise their 
rates to recover this $3 billion, it attempts to assure that telephone 
rates will not increase, at least for this reason.
  So, I believe it extremely unlikely that essential telephone service 
is likely to be hurt in any way by the enactment of this provision. In 
saying this, however, I do not wish to trivialize the validity of 
concerns over the Federal Government reaching into private, 
nongovernmental pockets to help plug a budget hole. That's a terrible 
precedent to set, regardless of whether it is the universal service 
fund or the airline safety funds, and I have consistently voted against 
such schemes in the past.
  I suggest the better remedy is to pass this bill today, then enact 
new legislation that will prevent this kind of action in the future. We 
should not risk bringing down this historic agreement because of one 
such scheme that, however objectionable in concept, will have no 
practical impact on the public.
  Let me emphasize again, this administration provision is designed to 
have no adverse effect on the consumer. For the information of my 
colleagues, I have already stated I will hold conference committee 
hearings early next year to make sure that we need do nothing more 
legislatively or in terms of FCC oversight to further assure that the 
universal service provision before us will not, in fact, cause any loss 
in essential service or raise telephone rates.
  I want to tell my colleague from North Dakota, we will have hearings. 
We will take action to make sure that this provision does not raise 
phone rates nor impair the ability of people to have universal service. 
I want to point out that the Presiding Officer in the chair, the 
distinguished chairman of the Appropriations Committee, also a member 
of the Commerce Committee, has pledged to do exactly the same. I don't 
like it. You don't like it. He doesn't like it. In fact, in a rather 
unusual move, the chairman of the Appropriations Committee was more 
vociferous in his opposition to this provision than I was.
  So I want to point out I think it is important the Senator from North 
Dakota raised this concern. I know the Senator from West Virginia has 
the same concern and will articulate it. But I want to say that we will 
have hearings. We will do whatever is necessary to make sure this does 
not impair--either raise phone rates or impair the ability of people to 
obtain universal service. I also want to reiterate, as did the Senator 
from North Dakota, it's a lousy way to do business, Mr. President. It's 
not a good way to do business. But I also, with some sympathy to my 
dear friend from New Mexico, realize that he was in a position where 
they were $3 billion short and they had to make it in order to make 
this budget work.
  So I want to thank my colleague from North Dakota. I want to thank 
the Senator from Alaska as well, for his commitment to fix this 
situation. There is, quite simply, no reason to endorse this provision 
or the kind of tactic it employs. But neither is there any reason to 
vote against this balanced budget bill because of it. I urge my 
colleagues to take that into consideration.
  I yield the floor.
  Mr. DOMENICI. Mr. President, I thank my good friend from Arizona. I 
am sorry if we waited until the last minute to notify you. We had 
plenty of time. You could have come down slowly and taken your time.
  Mr. President, I yield myself 5 minutes, and then I will yield to 
Senator Rockefeller.

[[Page S8336]]

  The PRESIDING OFFICER. The Senator from New Mexico is recognized for 
5 minutes.
  Mr. DOMENICI. I surmise the distinguished Senator from West Virginia 
is going to stand up and agree with what has been said. I just ask him 
if he would consider seriously, with me, what the miner protection fund 
looks like. It is exactly like this, and it is on budget. The Federal 
Government orders mining companies to pay into a fund, but the Federal 
Government does not disburse the money. That is your bill. You are 
famous for it, Senator. That is on budget. It has been on budget from 
the beginning.
  Now, let's look at this. It's exactly the same. We order companies to 
pay into this fund so that we can get universal service out of the 
fund. Who disburses the fund? The companies; not the Government. That 
resonates very well with a mining bill, miners' protection, the same 
way it has been on budget for 4 years. Frankly, it doesn't matter to 
this Senator.
  But the point of it is, we are bound by an interpretation that 
essentially was this. The reason I didn't cite this is because it never 
became law. But you might recall, I say to the Senator, when we had the 
universal health plan from the White House, noted by some as the 
Hillary health plan, the distinguished chairman, then, of the 
Congressional Budget Office--not this one; one that you-all had 
appointed from the other side--ruled one morning, to the amazement of 
everyone, that the bill had a tax in it because the procedure was that 
we were ordering money to be paid by somebody, and then, in the various 
States, we would disburse the money. The Federal Government was not 
disbursing the money.
  So the White House thought they would have a bill that was without 
taxation in it. And what did he rule? He ruled that if the Government 
orders payment of money into a fund, then the fund is on budget, even 
if the Government doesn't control the fund.

  I know my friend in the chair does not agree. I might not agree. But 
I am merely explaining what the facts are. I understand that you would 
like to make a point of order. I will be here and we can talk a little 
more about it, Senator. I do believe we have just reason to ask the 
Senate not to impose that point of order under the circumstances 
surrounding it, but I understand you, and I will speak to that later.
  I yield the floor at this point.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. Mr. President, I yield myself, off the time of the 
Senator from New Jersey, 10 minutes.
  The PRESIDING OFFICER. As the Senator present and in charge of the 
bill he has that right. The Senator is recognized for 10 minutes.
  Mr. ROCKEFELLER. Mr. President, I appreciate that very much. I also 
appreciate very much, as I always do, what my good friend, the Senator 
from New Mexico, said. I would draw one small point, however of 
difference. That is, in the miners' health retirement bill there has 
never been any thought, any action, any suggestion that any of that 
money should be used for anything but the health care of miners, 
period. It doesn't go anywhere else. In the case of what we are now 
talking about, the universal service fund, it is something which was 
set up for one purpose and which is being used for an entirely 
different purpose. The Senator may wish to come back--
  Mr. DOMENICI. Will the Senator yield?
  Mr. ROCKEFELLER. Of course.
  Mr. DOMENICI. Senator, when we first proposed this, we could find no 
way to do this without doing exactly what you said. But the White House 
came along, and they are a little more ingenious than are we. They 
offered us a proposal that is now in this bill. It does not change 
universal service, nor does it use that fund in any way other than what 
it was originally intended to do. All we have is, those who were paying 
into it get a 1-year reprieve, to the tune of $3 billion. Then they pay 
it in the next year. I think they are delighted. They get a reprieve 
because we lend them the money for the year and everything is exactly 
as you want it, and in the following year the companies that would have 
been paying it pay into it the next year. That happens to give us the 
$3 billion credit on the budget. That was dreamed up by the White 
House. We said, ``It's extremely ingenious and it fits all the tests,'' 
and that is why we are here.
  Thank you for yielding.
  Mr. ROCKEFELLER. I thank my friend and ask unanimous consent the time 
used by my friend from New Mexico be used on his side and not from the 
time of the Senator from New Jersey.
  The PRESIDING OFFICER. It has been so accounted.
  Mr. ROCKEFELLER. Mr. President, I strongly agree with what Senator 
Dorgan of North Dakota has said. I expect that, if the Presiding 
Officer were in a position to take the floor, he might say something 
not that dissimilar.
  There is an enormous amount of anger among those of us who worry 
about rural America, that for the first time in its history --hopefully 
for the last time in its history--the universal service fund is 
literally being raided for the purpose of a gimmick. The Senator from 
New Mexico is correct, I think, in the way he describes the process of 
what will happen. He is incorrect in one small matter, which doesn't 
really make that much difference but happens to make some difference to 
me as a Democrat, and that is that the idea came first from the 
Congressional Budget Office, not from the White House. It came from the 
Congressional Budget Office, this so-called gimmick fix. Then it was 
upheld by, so to speak, the Office of Management and Budget, which is 
something that I am very angry about, as a Democrat, because that 
happened on the President's watch.
  I think the problem with this is that universal service is sacred. 
When the Senator from North Dakota described equal phone calls--as he 
sometimes says, Donald Trump can call into Minot, ND, and that is good 
for Donald Trump in New York City and that's good for Minot, ND, and 
the possessor of that phone. But the purpose of universal service is, 
in fact, that rural areas are able to be sustained in part of their 
rate-paying because some States have to be more generous than others. 
That is what universal service is about. That is what the money is 
there for. It is not there for black lung, it's not there for retired 
miners, it's not there for environmental purposes. It's there for one 
purpose, and that is to guarantee that universal service on the 
telephones is available and affordable by people no matter where they 
live, and people particularly in rural areas.
  Part of my objection to all of this, of course, is that this whole 
process of working out this reconciliation bill--which I do support. I 
am not jumping up and down, but I do support it. That will be another 
speech at another time. But basically there were a lot of meetings held 
in a lot of rooms in which a lot of us were not allowed to be. I have a 
feeling that this decision was made at the last moment by OMB. Their 
people tried vainly to convince Senator Dorgan and his folks and myself 
and my folks that this was all really nothing but just a shifting of 
money here and there. But that is not the case. If you look at the 
historic proportions of raiding the universal service fund, no matter 
for what purpose--it's not for telephone service, it's not for making 
it possible in rural New Mexico or rural West Virginia or rural North 
Dakota for people who have telephones not to have to pay exorbitant 
rates.

  So here we have this one very unfortunate example. It's a budget 
gimmick. It's lousy policy. It's using the service fund as a piggy 
bank. There is no excuse for it. It's in the bill. I understand that we 
are probably not going to be able to do very much about it, but it is 
wrong. It is not only wrong because of what it does to universal 
service, but it's also very wrong because of what it does to libraries 
and schools and health care center telemedicine programs, which I will 
talk about in a moment.
  I will say the fact that Senator McCain was on the floor, that 
Senator Stevens has strong feelings about this, and Senator Hollings 
has strong feelings about this, Senator Daschle has strong feelings 
about this, Senator Dorgan, myself, many others, Senator Snowe--many 
others--this is a problem that we are going to come back to and fix. As 
the Senator from Arizona indicated, he's going to hold hearings. But we 
are going to come back on this until we can fix this problem. We can't 
fix it today, but we will be back, we will be

[[Page S8337]]

back again, until we get this eliminated--eliminated and changed. 
Because it is wrong.
  I recognize the universal service fund isn't recognized by most 
people. They don't know what it means. But it's something of such 
incredible importance to affordable phone rates for rural citizens that 
it is something people better understand very, very thoroughly. When a 
group of us passed and fought hard for something called the Snowe-
Rockefeller-Exon-Kerrey amendment, we extended the promise and the idea 
of universal service to something which fits in that category; that is, 
schools, libraries and rural health care facilities that use 
telemedicine. There are 116,000 schools in this country, Mr. President, 
and we are going to make every classroom applicable and every one of 
those classrooms, every one of those schools, we are going to make them 
fully wired up, ready for Internet, so there won't be any first- and 
second-class society in our country.
  I never, ever thought during the battle that we had to get to pass 
that Snowe-Rockefeller-Exon-Kerrey amendment, I never ever for a moment 
thought that we would be dealing with budget negotiators, but much more 
significantly I think, in this case, the Office of Management and 
Budget and their intransigence in trying to work out some kind of a 
Federal budget worked out that was not--I was shocked when I heard 
about that.
  Unfortunately, the budget has a neat trick, and as the Senator from 
New Mexico points out, it will work. It will loan universal service 
funds in the year 2001 and it will repay that in the year 2002, solely 
to have enough money appear on the books to make it possible to say 
that the Federal budget was balanced in that particular year, 2002. It 
violates the promise made to telecommunications providers that the 
universal service money was for telecommunications only. They are 
offended by it.
  I ask unanimous consent to have printed in the Record a letter from 
Bell Atlantic and Nynex expressing exactly that view.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                Bell Atlantic,

                                                   Washington, DC.

                                                        Nynex,

                                    Washington, DC, July 25, 1997.
     Hon. Jay Rockefeller,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Rockefeller: We urgently request that you 
     delete the universal service ``tax'' from the budget 
     reconciliation legislation. This proposed ``tax'' is a direct 
     assault on the policy of universal, affordable telephone 
     service for all Americans.
       Section 3006 of the Budget Reconciliation Bill is bad 
     public policy and it should be deleted from the Budget 
     Reconciliation legislation. This budget gimmick borrows money 
     from a fund established to ensure universal telephone service 
     in order to ``balance'' the federal budget.
       Because this fund is privately administered and not funded 
     through the federal budget, it is questionable whether the 
     federal treasury can ``borrow'' from this fund. If passed, 
     this provision would surely be the target of litigation.
       This section sets a dangerous precedent of using funds 
     intended to support affordable phone service as a ``trust 
     fund'' or ``piggy bank'' to balance the federal budget each 
     cycle. As a result, this proposal raises serious concerns for 
     the future viability of universal telephone service.
       We urge you, in the strongest terms, to delete the 
     universal service section from the budget reconciliation 
     legislation.
           Sincerely,
     Aubrey L. Sarvis,
       Vice President, Federal Relations, Bell Atlantic.

     Thomas J. Tauke,
       Executive Vice President, Government Affairs, Nynex.

  (Mr. ABRAHAM assumed the chair.)
  Mr. ROCKEFELLER. The provision that will probably become law, in this 
gigantic stack of papers, is opposed by telecommunications companies. 
It is opposed by education groups. It is going to be opposed by a lot 
more groups before this process is finished.
  The universal service fund is private money. It comes from telephone 
companies. We don't own the telephone companies. They are their own 
property. It is managed by nonprofit NECA, the National Exchange 
Carriers Association. This is private money--private money--that should 
not be used for budget gimmicks.
  At this point, we are caught between a rock and a hard place. The 
bill is before us. It is a good bill on balance. It is a bill that I am 
going to vote for. It is something that all of us have worked hard for 
since 1993, and probably before that. It is going to have to be 
changed, I fear, in the future. I tried to reach Franklin Raines this 
afternoon. I could not do so. I have spoken to the Vice President about 
it. I have spoken to everybody I possibly could, because it is terribly 
bad public policy.
  I am committed to protecting the integrity of universal service, and 
I intend to work with Senator Dorgan, Republican colleagues, industry 
leaders, and advocates to protect universal service and its promise of 
affordable access to rural America.
  I urge interested parties to join me in this fight. Universal service 
is not just about putting computers in classrooms. It is about fairness 
to rural Americans. It is a sacred trust. The universal service fund 
has been briefly violated. One can hope that this will be the only 
time, and one can hope that even this time, it will only last for about 
a year before we clear it up.
  Mr. President, I thank the Presiding Officer and yield the floor.
  Mr. STEVENS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. STEVENS. Will the Senator from New Mexico yield me 10 minutes?
  Mr. DOMENICI. I yield as much time as the Senator from Alaska 
desires.


                         Privilege of the Floor

  Mr. STEVENS. Mr. President, I send to the desk a request for 
privilege of the floor for my staff for today through August 1:
  Antonette Advincula; Kai Binkley; Larissa Sommer; Matt Hopper; 
Melissa Kassier; James Hayes; Kate Williams; Bronwyn Rick; Jay McAlpin; 
and Jessica Huddleston.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. STEVENS. Mr. President, first, let me thank the distinguished 
occupant of the chair. I was fearing that this issue might come up for 
a ruling while I had the privilege of sitting in that chair and was 
fearful what I might do, because I can tell the Senate that if one 
examines the signatures sheets for reporting this bill, you will find 
that I excepted from my approval of the bill as a conferee on the 
Commerce Committee side this provision on the universal service fund.
  Mr. President, I am not going to raise a proper point of order, and 
there is a proper point of order, but it would bring down the whole 
bill, and it is not timely. I would raise it if this went into effect 
next year. It will not go into effect until October 1 in the year 2000. 
So we have time to work this out and find a way to make peace on this 
subject.
  I intend to pursue that after the hearings that the Senator from 
Arizona has announced, as chairman of the Commerce Committee, he will 
hold.
  I don't think anyone really realizes what this does. I will say, and 
I know the Senator from New Mexico was trying to get it to me, the 
first time I saw this was today, although it had been described to me, 
and that is why I would not approve the Commerce Committee portion of 
the bill pertaining to the service fund. As a matter of fact, this is 
the old interstate rate pool, Mr. President. People in the business 
still refer to that in many ways. It became the universal service fund. 
I was the one who dreamed this up about 5 years ago when we first 
introduced the bill to modify the old Communications Act of 1934, and 
really that was carried through in the Telecommunications Act that 
passed.
  I am pleased to have been part of that, because what this does is it 
gives us a fund which the industry itself can use to equalize the costs 
of assuring service anywhere in the United States so that our 
telecommunications will, in fact, be capable of being delivered 
wherever there is a person seeking to send or receive communications as 
defined by our act.
  This money is kept by the National Exchange Carriers Association, 
[NECA]. It is not Federal money. It is not subject to Federal control. 
As a matter of fact, it is not even enforced by the Federal Government 
in terms of payment into the fund. It cannot be a tax.

[[Page S8338]]

  With due respect to my friend from New Mexico, I think we have a 
Supreme Court of the United States that will determine eventually what 
is on budget and what is not. The Director of the Congressional Budget 
Office, in my judgment, has made a serious mistake, and we are pursuing 
that mistake here. But there is more than just his mistake. The basic 
mistake has been made by the White House itself, when it conjured up 
this new approach to using this fund which is not Federal money, it is 
not taxpayer's money. It is paid by the ratepayers, not the Federal 
Government. You might have dipped into the Postal Service surplus in 
the bank right now under this theory. That is ratepayer money, too.

  It is not on budget, but, as a matter of fact, this money is not 
subject to Federal control. But this bill says there is appropriated $3 
billion to put into this fund that NECA manages for the 
telecommunications world, and it sits there for a year, Mr. President. 
Of course, it is going to earn interest, right? At the end of the year, 
it is paid back by the fund, and the fund can keep the interest it 
earned during that period.
  Once more, the people who would have paid into the fund don't have to 
make a payment for a year. They keep that money that they would have 
paid the fund in their own banks and they pay it to NECA the following 
year, and guess what? They make money off it, too. So this is one of 
the greatest shell games I have ever seen with Federal money. The 
Federal money being fooled with is the $3 billion from the Treasury 
that goes into the fund before the game begins, and these guys get to 
play poker with this for a year, and then after a year, they can keep 
whatever they earned with it and pay back $3 billion to Treasury. It is 
a win-win thing for everybody but the people who should be served, 
because the earnings for the fund ought to accrue to the fund, the 
people who are the recipients of universal service, and this is just 
too cute. This, in my opinion, is the worst gimmick since the Budget 
Act was enacted, and I am glad the Senator from New Mexico has 
indicated he really didn't dream this one up, because I think he is 
smarter than that, and I think he is embarrassed to have to carry it, 
as I would be.
  The proper point of order, Mr. President, is a constitutional point 
of order. I will not raise it because it will pull the whole bill down, 
and we have to have this to bring about a balanced budget. It will take 
place in the year 2000, as I said. But I warn the Senate, before 2000 
gets here, we will raise a constitutional point of order to take this 
out of here unless it is straightened out, because it is nothing but 
smoke and mirrors. It is the worse case of smoke and mirrors that ever 
came out of the White House.
  Somehow or another, someone has to understand that it is not right to 
play with money, that $3 billion of taxpayer's money goes into this 
fund, managed by a private association; it stays there for a year, the 
interest on it accrues to private associations, and at the end of the 
year, they pay back $3 billion. Meanwhile the people who should have 
been paying in for a year have earned their own money, and guess what? 
It is not a wash in the sense of everybody who keeps their own 
checkbook and everyone who pays bills and the people who need this 
service, this universal service; it is a wash under the Budget Act, 
which I thought was a stupid act to begin with, and now I know it is a 
stupid act, if it can conjure up something like this. It is not in the 
public interest.
  So, Mr. President, I am now satisfied that I was right. I signed this 
bill and approved it, except for this provision. I urge everyone to 
read it, section 3006. If there is anything that demonstrates we need a 
new Budget Act, this is it, if people can sit in the basement of the 
White House and dream up a charade like this and say that it balances 
the budget. This is why people don't believe us. They really don't 
believe us, because they think we play funny games with their money, 
and this demonstrates they are right, Mr. President, unfortunately.
  I will swear to you--I am glad you came, Mr. President, because I 
would be hard pressed not to approve the point of order that is raised 
by the Senator from North Dakota, and I would have hated to be in that 
chair and to have said what I don't believe. I am not saying you have 
to believe it either, Mr. President, just follow what the 
Parliamentarian tells you and we will pass this bill, and we will live 
to the year 2000.
  Meanwhile, someone has to put down a marker on these people. They 
have to stop using smoke and mirrors. That is why we don't have a 
balanced budget now, because people play games with money, and those of 
us who don't have much money don't understand it.
  It took me a little time to find out what they were trying to do, I 
say to the Senator from New Mexico. I see him smiling a little bit. He 
is my great friend, and I know he is embarrassed to have to carry 
someone else's brainchild like this. I hope we will find some way to 
stop this business, to give us a chance to deal with straight up-and-
down money, and straight up-and-down provisions and not more smoke and 
mirrors.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I just say to my good friend--who is my 
good friend, perhaps one of the best here--there are plenty of smoke 
and mirrors in the appropriations bills, and I am not here saying we 
should abolish the appropriations process. If you would like a debate 
someday, we will go through 20 bills, and I will find you more smoke 
and mirrors than $3 billion in any given year in the appropriations 
process. I yield the floor.
  Mr. STEVENS. Mr. President, if the Senator will let me have a couple 
minutes, it would be nice to have this discussion. There are no smoke 
and mirrors in the appropriations bills. We sometimes have devices in 
order to enable us to meet the objectives of the Budget Act, but we 
never end up by appropriating money to an account that is not 
controlled by the Federal Government, nor do we give up interest on 
that $3 billion for a year and expect just to get the straight $3 
billion back. If there is something like that going on in an 
appropriations bill, I don't know about it.
  He is right, we have our devices for making sure that we have control 
on spending money, and sometimes that is subject to criticism, similar 
to what I have just given him.
  Mr. DOMENICI. I appreciate that. That is plenty for me. I appreciate 
it very much.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, I thank the distinguished Senator from 
North Dakota, the Senator from West Virginia, and the distinguished 
chairman from the Appropriations Committee, the Senator from Alaska, as 
to the point being made relative to the universal service fund.
  In the 4-year tour of work of trying to reconcile and bring up into 
the modern technological age communications law, there was one thing 
that was sacrosanct and generally agreed upon by everyone--and there 
really are no exceptions to it, because it was sort of a private 
endeavor. I know the distinguished occupant of the chair believes very 
strongly in the private market and the forces of private industry vis-
a-vis those within the Government. But those within the 
telecommunications industry, years back, by way of the entities in 
which they belong, determined the volume of business, and with that 
volume of business and the costs, they then factored in each month 
through this private universal service fund the amount to be 
contributed thereto. And it is operated that way. From time to time the 
FCC has rules and regulations about it, but, generally speaking, it is 
a well-administered fund, not participated in, really, by Government 
law. The Government does not say or the 1996 Telecommunications Act 
does not require this.

  So it came with some amazement that, in all the machinations in 
trying to work for the Balanced Budget Act of 1997, we were hearing 
that they were going into the universal service fund. We raised the 
point in discussions. We had resolutions about it. We put amendments 
up. And we thought we had gotten the clear, crystal word through to the 
negotiators and conferees. Now it appears that that has been 
disregarded.
  For one, we can see what was really bringing it about. They came in 
with the spectrum auctions, which this Senator and the Senator from 
Alaska

[[Page S8339]]

joined in in the original instance, tried to raise money and factor in 
the market forces. But we have found in the more recent auctions that 
we sort of are scraping the cupboard dry or bare, as the expression is, 
whereby on an auction of last year, agreed upon in October to bring in 
$3.9 billion, only factored in or received $13.1 million instead of 
billions up there--few millions. So when they came with the factored-in 
$26.1 billion in spectrum auctions, they realized that the 
Congressional Budget Office, and anyone else estimating it, was going 
to have to downgrade it, so they put in a catchall, the universal 
service fund with a blank amount, until now, I guess. It is marked at 
the desk.
  I understand from the debate it is $3 billion. This cannot happen. 
You do not want to take what is really working and turn it into a slush 
fund for budgeteers or for conferees or for any other kind of nonsense 
that is going on along here--smoke and mirrors, as they call it.
  So I am glad the point is being made here in a most eloquent fashion 
by the distinguished Senator from North Dakota, Senator Rockefeller of 
West Virginia, and now Senator Stevens, who was the ranking member on 
our Commerce and Communications Subcommittee for many, many years. We 
worked in this field. We fashioned out some funds that would be 
available for the schools, for the libraries, the hospitals, and 
otherwise.
  We really have, I would say, one of the finest elements of the 1996 
Telecommunications Act, passed by a vote of 95 Senators here in this 
body, that the outstanding innovative feature was the agreed-upon 
embellishment of the universal service fund in order to bring in the 
libraries and schools and hospitals and otherwise of America, to bring 
to all of America communications services in the Internet and 
otherwise.
  Now, we just passed that early on, and we turned our backs, and, 
heavens above, budgeteers have turned it into a slush fund. I hope that 
does not occur. I hope the point is made. I do appreciate the 
leadership of our colleagues who pointed it out this afternoon.
  I yield the floor.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. I appreciate very much the comments made by the Senator 
from West Virginia, the Senator from South Carolina, the Senator from 
Alaska, the Senator from Arizona, and others. I say that the Senate 
minority leader, Senator Daschle, feels very strongly in opposition to 
this particular provision.
  I was very careful when I began this discussion. I was not critical 
of the distinguished chairman of the Budget Committee. I said that I 
thought they had brought a product to the floor that is a compromise 
which represents the best of public service.
  There is much in here to commend this. I am going to vote for this. 
This is what we are going to vote on. It is a pretty good piece of 
work. This page is what I am talking about, coming right out of the 
middle of this provision, ``Universal Service Fund Payment Schedule.''
  There was a story once about a fellow--I do not have backwoods in 
North Dakota. In fact, we rank 50th in America in the amount of our 
native forest lands. So we do not have any backwoods stories. But down 
in your part of the country, we hear all these backwoods stories.
  There was a story I heard once about a fellow that came over a hill 
in the backwoods, and he found a couple of old codgers there sitting 
over a pot that was hanging over a fire, and they were making 
something. He said, ``What are you fellows making?''
  They said, ``Stew.''
  ``What kind of stew?''
  ``Horseradish stew,'' they said.
  ``How on Earth do you make horseradish stew,'' they asked.
  ``Well,'' one said, ``You take one horse and one radish.''
  That is the menu here--``horse'' and ``radish.''
  You have to look through this whole thing to find out what has been 
brewed, what has been cooked. And I like a lot of this. I think a lot 
of this advances this country's interests. The provision I brought to 
the floor today to talk about is a terrible provision. It is a terrible 
provision and ought not be here.
  Mr. President, I heard discussion earlier by the chairman of the 
Senate Commerce Committee, chairman of the Senate Appropriations 
Committee, and others, that there will be legislation--first a hearing, 
and then legislation to deal with this. We may never again be back at 
this intersection, an intersection where we are having to come to the 
floor to say, ``You can't use money, you can't count money that never 
comes to the Federal Treasury as part of a calculation to balance the 
budget.'' Why, in my hometown of 300 people, you would be laughed out 
of the cafe in 2 seconds. You can't count money that does not come to 
the Federal Government.
  So, despite the fact that I am going to offer a point of order under 
the Byrd rule--and my understanding is that I will probably not 
prevail--I do not intend to ask then for a vote to appeal the ruling of 
the Chair. I will accept the ruling of the Chair as a ruling, and will 
disagree with it, I suspect, if the ruling is what I expect it to be. 
But I will say this: I expect us never to be back to this intersection 
because I expect that those of us on the authorizing committee who know 
what the fund is and what it is for and what it is about, we will never 
again allow a discussion to go on somewhere in the bowels of this 
building in which OMB and CBO bring to the table a menu of items that 
say, ``By the way, here is a way to count money to make things look 
different than they really are.''
  I say, the Senator from New Mexico talked about this being a White 
House creation. My understanding is that, indeed, the Office of 
Management and Budget and the White House have agreed that this 
provision is part of this budget process. In fact, the latest 
provision, which is, I think, the third provision of this type, this 
was, in fact, brought to the table by the White House. Originally, I 
understand it came from the Congressional Budget Office, agreed to by 
the Office of Management and Budget. But notwithstanding what its 
conception was, I think it is terrible, terrible public policy, and I 
hope that we never again are at this point.
  I think the discussion we have had is a useful discussion, which has 
served notice to every Member of Congress that while we cannot get at 
this provision at this point, there will be a time when we will no 
longer debate this because we will have changed Federal law to prevent 
this sort of thing from happening.
  Mr. BURNS. Mr. President, the Federal Government should not 
manipulate the universal service fund to balance the Federal budget. I 
believe this for several reasons.
  The provision in the conference reconciliation package which 
manipulates the Federal universal service fund and allows the Federal 
Government to use this fund to balance the Federal budget is 
outrageously bad policy, and is, I believe, an unconstitutional 
takings.
  In States like Montana, the universal service fund is absolutely 
critical to the provision of basic telephone service at reasonable and 
affordable rates. However, lately it seems that this fund is becoming 
the ``ox that gets gored'' to resolve a variety of high profile 
problems or issues. Universal telephone service is a privately funded 
support system that works without Federal monetary aid. Unfortunately, 
due to its present on-budget status, this privately financed program is 
subject to the whims of the budgeteers. A couple of months ago, the 
FCC, at the urging of the Vice President, decided to add a further 
burden of $2.25 billion a year on the contributions to the fund to pay 
for linking schools, libraries, and rural health care facilities to the 
Internet. Now the Congress, by this reconciliation package, is seeking 
to balance the budget at the cost of universal telephone service. This 
will have extremely negative impacts upon basic telephone service in 
rural and remote areas of the country which depend upon the fund to 
keep prices for telephone service reasonable; consequently, here we 
are, in the name of balancing the Federal budget, effectively raising 
rates for telephone service for all customers who happen to live in 
states like mine. This effectively targets the rural customers and is 
simply unacceptable. Sound telecommunications policy must not be 
manipulated to comport with fleeting budgetary concerns. Rural 
Americans--and those others who receive affordable

[[Page S8340]]

service as a result of universal telephone service--must not be 
subjected to the uncertainty of this process.
  Furthermore, I believe that, even if this provision were not such 
outrageously bad policy, we should not adopt it because it will likely 
be struck down by the courts as an unconstitutional taking of private 
property. Contributions to the Federal universal service fund are made 
by telephone companies and wireless telephone providers and, as such, 
are not the property of the Federal Government. The Telecommunications 
Act clearly establishes the manner in which universal telephone service 
funds are to be collected and disbursed. Pursuant to the act, universal 
telephone service moneys logically should not be classified as either 
Federal receipts or Federal disbursements and thus should not be 
associated with the Federal budget, as the administration has insisted, 
and as some in Congress have allowed. Clearly these are not Federal 
funds.
  Thus, the Federal Government's use of these funds interest free is, 
in effect, a governmental taking of that interest. Consequently, I 
believe that a constitutional challenge to this provision will likely 
be successful. Regardless, there is one thing of which we can be 
absolutely certain: this provision will end up in the court system, 
thus wasting phone company, and by extension phone company customer, 
and taxpayer money. Folks, this provision is a bad idea for any of a 
number of reasons, and I urge my colleagues to join me in opposing any 
efforts by either the administration or Congress to use the universal 
service fund to balance the Federal budget.
  Additionally, this ill-advised raiding of the universal service fund 
sets an absolutely terrible precedent. While I am confident that the 
budget agreement is based on sound numbers, what will happen if the 
economy takes a turn for the worse and the economic assumptions on 
which the balanced budget plan is based come up short? Will the 
budgeteers not look to increase the amount of money that is borrowed 
from the universal service fund? Even if that's not the case, and even 
if the money borrowed from the fund will be repaid, this amounts to a 
back-door tax increase levied on every American through his or her 
telephone bill. I don't believe that we need to raise taxes in order to 
balance the budget--that's why I joined every other Republicans member 
of Congress in voting against the ill-conceived Omnibus Budget 
Reconciliation Act of 1993--but if we're going to raise taxes, we ought 
to be forthright about it. This scheme to raid the universal service 
fund is anything but forthright.


                           universal service

  Mr. KERREY. Mr. President, I support the Dorgan point of order 
against the provisions in the reconciliation bill which manipulate the 
universal service support system to create a book-keeping gimmick which 
is disguised to look like deficit reduction.
  Universal service support is the complex system of intercompany 
payments between phone companies designed to ensure that telephone 
rates are reasonable and affordable. The universal service support 
system assures that phone rates and services are comparable in rural 
and urban areas. This system of payments and shared costs does not 
touch the U.S. Treasury.
  For the first time, the reconciliation conference agreement would 
manipulate the universal service support system for budgetary gains. 
This is a terrible precedent which if abused will drive up phone rates, 
especially for rural Americans.
  The idea of universal service is profound. It is one of the most 
fundamental principles of telecommunications law and economics. The 
concept was introduced in the original Communications Act of 1934 which 
promised ``to make available to all Americans a rapid, efficient, 
nationwide and world-wide wire and radio communications service * * *''
  From 1934 to 1996, regulation and monopoly were the primary means of 
ensuring telephone services to all Americans. In 1996, the Congress 
embraced the idea that competition would best deliver 
telecommunications services to all Americans at affordable rates.
  The Congress also recognized that there were some markets which 
competitive companies would not serve and some areas where costs are so 
high that rates would drive citizens off of the phone network. In those 
markets, universal service support would keep rates affordable and 
comparable to urban areas.
  The principle of universal service is that all Americans should have 
modern, efficient, and affordable communications services available to 
them regardless of where they live.
  Universal service support is not a subsidy, and it is not a tax. It 
is a shared cost of a national telecommunications network.
  What makes the American phone network valuable is that almost anyone 
can be reached. Affordable phone service is not just important to the 
citizens of Valentine, NE or Regent, ND, it is of value to the citizens 
who live in New York, Chicago, and other urban areas who need to reach 
Americans in all 50 states.
  The basic bargain of the Telecommunications Act of 1996 was that the 
gates of competition would open, provided all telecommunications 
carriers contribute to the support of universal service. Under the act, 
support would be sufficient, predictable, and the burdens would be 
shared in a nondiscriminatory manner.
  To assure that all Americans shared in the benefits of the 
information revolution, the Congress also adopted the Snowe-
Rockefeller-Exon-Kerrey amendment which provided for discounts to 
schools, libraries, and rural health care facilities. The bottom line 
was that no American would be left behind.
  The precedent that the reconciliation conferees have set is 
dangerous. It threatens to undermine the promise of sufficient and 
predictable support for universal service. It does so to gain a smoke 
and mirrors bookkeeping advantage in the budget.
  If the universal service support system is manipulated for this 
purpose, consumers will lose.
  The very system which assures affordability should not be jeopardized 
by an attempt to avoid the real choices necessary to produce a balanced 
budget.
  Mr. DOMENICI. I ask the Senator, are you ready to at least make your 
statement about this? I understand your points. I hope everybody 
knows--I should have gotten recognition. Are you through?
  Mr. DORGAN. I ask the Senator from New Mexico if he could hold for a 
moment. I will be happy to yield the floor and take a moment.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. DOMENICI. I would like to ask the Senators, we have now been on 
this bill since 12 o'clock, which has been for 5 hours, 25 minutes, all 
of which I believe is counted against the 10 hours. I very much wonder 
what Senators would like to do with reference to the bill.
  Are there more Senators who would like to speak? The bill is not 
subject to amendment. There is a list of Byrd rule violations that is 
around. It is not hidden. I just am wondering what the pleasure of the 
Members is. I think that most of the Byrd rule violations have been 
clearly worked by Democrats and Republicans and are consistent with the 
bill and should be waived. But we cannot do that without conferring 
with a number of Senators, including the distinguished Senator Byrd, in 
due course.
  There is a conference going on, so I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, I appreciate the indulgence of the 
chairman of the Budget Committee. I was prepared to make a point of 
order, a Byrd rule point of order, on this universal service provision. 
I am persuaded that making a point of order, in which the 
Parliamentarian would likely rule that this provision is not violative 
of the Byrd rule, would put us in the position of having a ruling by 
the Chair blessing an approach that I think deserves not a blessing but 
condemnation. So I am not going to proceed to make the point of order.
  I am persuaded to decide that by the fact that the Senator from 
Arizona, the

[[Page S8341]]

chairman of the authorizing committee, of which I am a member, 
indicates, first of all, a determination to hold hearings in support of 
changing the law to prevent this from occurring again and statements by 
the Senator from Alaska, Senator Stevens, and Senator Rockefeller and 
others, including Senator Hollings.
  It is clear to me that we will not likely come to this point again. 
We will likely see a law change that says universal service funds 
cannot be used for this purpose. For that reason, I will not require 
the Chair to rule on a Byrd rule point of order on the universal 
service provision because I simply don't want anybody to believe there 
was any blessing applied to this approach in this piece of legislation.
  Let me make one additional point. The Senator from New Mexico made a 
point some while ago, and I suspect he thinks that we are here in some 
ways jabbing away, and so he made a point that, gee, this isn't the 
only place this stuff goes on. Everybody in the Chamber would agree 
with that assessment. We understand that there are games and there are 
games. We also understand that this piece of legislation, the 
reconciliation bill, this year provides significant traction toward the 
goals we all want for this country: getting our fiscal house in order, 
making the right investments, cutting spending, and doing other things. 
I understand all that.
  My point was--and I was not critical of the Senator from New Mexico--
there is a provision right in the middle of this, which is a tiny 
provision, that is fundamentally wrong and ought to never be put in a 
piece of legislation like this. I am now believing from this discussion 
this afternoon that we will not likely be forced to discuss this again 
on the floor of the Senate, because those of us who are involved in 
describing what a universal service fund was in the Telecommunications 
Act will join and conspire, in a thoughtful way, to change the law, so 
no one--OMB, or CBO, or anyone--can misinterpret whether those revenues 
touch the Federal Government. They do not and they cannot, therefore, 
be used to plug some kind of a hole in the budget process.
  Mr. President, I yield the floor.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I yield myself 5 minutes. First, while 
Senator Stevens is on the floor, he has made some very good points, 
and, certainly, the distinguish Senators on the Democrat side have made 
some good points. The Senator from New Mexico wants to do nothing in 
this budget bill that will adversely affect our movement toward 
universal service. There is no intention in this budget reconciliation 
bill, which I ended up agreeing to--and I have already explained why--
but there is nothing in it that is going to deny the march toward 
universal service that is prescribed and was your thoughtful, visionary 
idea, Senator Stevens. I just ask you, so we have the record straight, 
is that your interpretation, also?
  Mr. STEVENS. Mr. President, I say to the Senator from New Mexico that 
we have studied this and there is no impact on any universal service 
provider or universal service beneficiary that is adverse. There may 
actually be a beneficial effect, in terms of some of the providers. But 
it is not a provision that harms universal service. It is a provision 
that tinkers with the funding of universal service, but not adversely 
to the system. I will agree with that.
  Mr. DOMENICI. Now, Mr. President, might I say while a number of 
Senators are present--and hopefully others have access to what we are 
saying--we have now been on this bill on the floor for 6 hours, or we 
will be in 15 minutes. As everybody knows, there are 10 hours on 
reconciliation. Frankly, there are no amendments in order, and, 
clearly, the Senator from New Mexico will stay here if there are other 
speeches or other comments that people want to make. But I very much 
think we ought to be able to vote at a time certain tomorrow morning.
  Now, I am just wondering if there is anybody who--Senator Byrd?
  Mr. BYRD. Mr. President, I thank the distinguished Senator. I have a 
question. Under the rule with respect to extraneous material, I read an 
excerpt therefrom:

       The Committee on the Budget of the Senate shall submit for 
     the Record a list of material considered to be extraneous 
     under subsections b(1)(A), b(1)(B), and b(1)(E) of this 
     section to the instructions of the committee as provided in 
     this section.

  Is that list available?
  Mr. DOMENICI. Senator Byrd, that list is not only available, it has 
been sent to the desk in accordance with the statute.
  Mr. BYRD. May I see a copy of it?
  Mr. DOMENICI. Yes, indeed. This is the list that we submitted.
  Mr. BYRD. I thank the distinguished Senator. Now, I have been 
supplied by the minority with a list of extraneous provisions, and it 
appears that, on a cursory examination, they are not the same; the two 
lists are not in agreement on all fours.
  Mr. DOMENICI. Senator, we don't know what might be different, but we 
are certainly willing to look and see what is different. We have been 
in contact with them and working together, as you might suspect.
  Mr. BYRD. Mr. President, I think if there is going to be a list, it 
should be a complete list, and I am only raising the question because I 
have been supplied with two different lists--one list by the minority 
and one by the majority--and there may be some of the same things on 
both lists, but I am not sure. It appears to me that some of the items 
on the minority list are not on the majority and perhaps vice versa.
  Could we have a clarification of this matter?
  Mr. DOMENICI. Staff for the minority is approaching. I will ask him 
the question.
  Could I get a quorum call?
  Mr. BYRD. Absolutely.
  Mr. DOMENICI. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DOMENICI. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, I yield to the other side.
  Mr. REED addressed the Chair.
  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
  Mr. REED. Mr. President, I request such time as I may consume from 
the Senator from New Jersey.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Could the Senator kind of guess? How much; 15 minutes?
  Mr. REED. No. Close to 5 minutes.
  Mr. DOMENICI. Why doesn't the Senator ask for up to 10?
  Mr. REED. I ask for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REED. Thank you, Mr. President.
  Mr. President, I rise to speak in favor of this bill. As one who 
voted against the Senate version of this legislation, I am especially 
pleased today to be able to support this initiative--an initiative 
that, among other things, provides 10 years of solvency to the Medicare 
Program, and makes a substantial investment in the health care of our 
children. I would like to remind my colleagues that we were able to 
craft this agreement because of the tough vote that I and others cast 
in 1993 for President Clinton's deficit reduction plan--a plan that has 
reduced the deficit from almost $300 billion to approximately $40 
billion or perhaps lower.
  I am particularly pleased that this bill makes a remarkable 
investment in the health care of our children by providing $24 billion 
to States to spend for children's health care. This new program 
represents the most significant and far-reaching expansion in our 
social programs since the passage of Medicaid and Medicare in the mid-
1960's. These children's health provisions will give our children the 
healthy start that they deserve, and the healthy start that is 
necessary to help young people become effective students and help these 
students become effective workers, and help all of us raise a 
generation of American citizens who will serve this country and lead 
the world.
  Congress is committing significant resources to children's needs. And 
now we must turn our attention to the days ahead to ensure that these 
resources are used wisely. I remain cautious about this new initiative. 
As with any investment of our taxpayer's dollars,

[[Page S8342]]

the Federal Government needs to ensure that the investment is well 
spent. The plan which is being offered today provides a wide array of 
options and benefit plans with a high degree of flexibility. And it is 
crafted in a such a way that it could perhaps be gamed--not for the 
benefit of the children but for the benefit of those who will be 
enriching themselves from the system. As this program is implemented, 
we need to provide adequate oversight to ensure that the children are 
the beneficiaries of this program, and that they receive the benefits 
they need, that their health care is protected, and that we as a Nation 
can prosper. The Secretary of the Department of Health and Human 
Services, along with the Congress, has her work cut out for her. And 
together we must ensure that this program is implemented wisely and 
benefits the children that we so desperately and appropriately want to 
serve.
  In addition, this conference agreement makes significant changes in 
the Medicare Program. Most importantly, this bill brings 10 years of 
solvency to the Medicare Program--a program that more than 30 million 
Americans depend upon, and that more than 170,000 Rhode Islanders 
depend upon.
  Like the amendment I offered during the debate on the Senate version 
of this bill, this legislation does not include the provisions which I 
believe take the wrong approach to solving our Medicare problems--
provisions like raising the eligibility age, means testing for the part 
B premiums, and a home health copayment for home health services. This 
legislation strikes those provisions, as my previous amendment struck 
those provisions.
  A home health care copayment would have negatively impacted the 
sickest and poorest of Medicare beneficiaries. And an increase in 
Medicare's eligibility age is a step in the wrong direction. Simply 
put, raising the eligibility age for Medicare increases the ranks of 
the uninsured. Already, 13 percent of the 21 million people age 55 to 
64 lack health insurance. It makes no sense at all for Congress to 
eliminate Medicare as an option for seniors who have nowhere else to 
turn. These and other issues will be debated in the context of long-
term Medicare reform as we address the problems faced by Medicare for 
the next generation.
  During the Senate debate on this bill, as I indicated, I offered an 
amendment to strike these provisions. My amendment failed. But I am 
glad to see that today we have reached an agreement which protects 
Medicare, extends the life of the program for at least 10 years and 
does not attempt an ad hoc approach to structural reform.
  This bill includes many improvements to Medicare. For example, it has 
expanded preventive health care benefits for mammography, pap smears, 
diabetes, prostate, and colorectal cancer screening, bone density 
measurements, and vaccines. This bill also requires the Medicare 
Program and managed care plans to give more information to 
beneficiaries about their choices and their coverage, and the quality 
of that coverage. All of these are welcome developments.
  I am also pleased that this bill contains $1.5 billion for protecting 
low-income Medicare beneficiaries against an increase in Medicare 
premiums. However, I am disappointed that this comes in the form of a 
block grant to the States that ends after 2002. This approach has the 
potential to fall short of providing real protection for low-income 
Medicare beneficiaries. Any increase in Medicare premiums can result in 
significant hardships for low-income seniors, and these individuals 
deserve a permanent guarantee of protection.
  This bill also includes numerous changes in Medicare reimbursement 
policies--changes that will have a great impact on those individuals 
and institutions that provide health care to Medicare beneficiaries. I 
will keep a vigilant eye on the implementation of these changes, paying 
particular attention to their impact on the access to and quality of 
care provided to Medicare beneficiaries.
  This legislation also establishes a bipartisan national commission to 
examine the long-term solvency of the Medicare Program. The creation of 
this commission lays an important foundation to work on long-term 
reforms and solutions, and to tackle those issues that are not suitable 
for the narrow confines of a budget debate. Such reform is needed to 
address the challenges that the Medicare Program will face as members 
of the baby-boom generation become recipients of Medicare. This 
commission provides that framework, and I am encouraged that the 
commission is established by this legislation.
  I am prepared to vote in favor of this bill. As with any piece of 
legislation, it is not perfect. Indeed, many individuals will benefit 
from various provisions of the bill. Medicare beneficiaries will have 
the security of an additional 10 years of solvency in the program. The 
families of uninsured children will now have new State programs to turn 
to. Medicare beneficiaries will have new choices and increased 
preventive health care benefits.
  But this is no time to rest on our laurels. To ensure that Medicare 
beneficiaries continue to have access to high-quality care in the face 
of constrained payments to providers, to ensure that the $24 billion 
for children's health care is well spent, and to ensure the long-term 
viability of the Medicare Program, we will need continued vigilance on 
the part of many, including the Congress, the Secretary of Health and 
Human Services, and those persons served by the Medicare and Medicaid 
Programs.
  We also must recognize that within this budget, as we continue to 
draw down discretionary spending over the next several years, harder 
and harder choices will ensue. We have to ensure that we make the right 
choices. We have to ensure that the spirit today--a spirit that reaches 
out to help our children, a spirit that reaches out to help and 
maintain our seniors--will be the spirit that dominates our future 
budget deliberations as it has ennobled our past efforts to strengthen 
America.
  I yield the remainder of my time.
  Mr. COATS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Indiana.
  Mr. COATS. Mr. President, on behalf of Senator Domenici, I yield 
myself up to 15 minutes. I don't believe I will take that long.
  But I also ask that the Senator from Montana be allowed to take a 
minute to introduce legislation.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BURNS. I thank my friend from Indiana.
  (The remarks of Mr. Burns pertaining to the introduction of S. 1090 
are located in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  The PRESIDING OFFICER (Ms. Collins). The Senator from Indiana.
  Mr. COATS. Madam President, I don't believe I will take all 15 
minutes.
  I want to express, however, the reason I am voting against this 
budget agreement. When the budget resolution came before the floor of 
the Senate initially, I voted against it because it did not contain the 
entitlement reforms--the structural reforms that I felt were absolutely 
necessary if we are ever going to have a sustained, consistent effort 
at balancing our budget. Clearly, we all know that the entitlements--
the mandatory spending--have not been structurally reformed for a long, 
long time, and we are on a collision course with their ability to meet 
the demands on those funds in the future. Some changes were made in 
this bill. I want to talk about those in a minute. But they were not 
the structural reforms.
  Then when the budget reconciliation bill came before the Senate, I 
supported the budget reconciliation bill because the Senate had the 
courage to stand up to the plate and address the need for entitlement 
reforms. I doubt that there is a Member of this Congress, House or 
Senate, or anyone else who has paid attention to this issue, that 
doesn't recognize that this is something that we have to do. We are on 
a collision course with bankruptcy for Medicare.
  We hear all of this wonderful talk about preserving Medicare for the 
benefit of our elderly. Yet, the quality of Medicare services continue 
to decline because we continue to impose restraints and restrictions on 
the providers, and it squeezes the quality of care. And we fail to have 
the will to step up to the plate and deliver any kind of structural 
reform in the program--even reform that takes place well into the next 
century. The Senate addressed that issue. The Senate by a fairly 
substantial vote passed legislation which

[[Page S8343]]

would begin that process of structural reform. So I supported the bill 
on that basis, hoping that it would survive conference. Due to a number 
of factors which I will talk about, it didn't survive. And it is back 
here now without those reforms.
  All the wonderful promises and rhetoric about addressing the Medicare 
problem is more of the same that we have been promising for the last 
several budget resolutions, most of which has not come to fruition.
  So I approach this conference spending bill with a sense of sadness 
and feeling of resignation--a sense of sadness because I know that the 
Senator from New Mexico and others who have been involved in this 
process have worked very, very hard to put together a bill which moves 
us toward a balanced budget. They have incorporated a number of 
provisions in here which I believe are important provisions, and 
provisions which I support; but a sense of sadness because we have 
dropped in the negotiations what I think were the most important parts 
of this budget reconciliation bill--the structural reforms and 
entitlements.
  It is entitlements that are eating up our revenues. It is the 
entitlements, were it not for a booming economy which is pouring 
revenues into our coffers for the present time--it is the entitlements 
which would be squeezing other aspects of the budget, whether you are 
for education, or roads or safe water, or environmental issues, or a 
whole number of other things. Those are being squeezed because we don't 
have the political will and courage to address the entitlements.
  It is resignation that I feel because lasting structural reform of 
Government spending seems to be beyond the ability of the Congress and 
the executive branch.
  The measure before us today is significant not for what it contains 
but for what it does not contain--commitment to fundamental 
institutional change. And that failure is most obvious, as I have said, 
when we look at the entitlement parts of this bill.
  Here, for whatever reason--probably a lack of political will--we have 
dropped the three measures which maybe signaled the best hope of future 
ability to contain entitlement growth. Instead, we have what is 
estimated as a $115 billion reduction in Medicare spending, but this is 
an evasion, not a reform, because these projected savings are achieved 
by the typical way we have done this: decreasing payments to providers. 
It has been tried over and over again, and it has failed. Costs have 
continued to rise under reduced payment schemes while the quality of 
care has decreased.
  The plan also shifts the home health care program, the fastest 
growing part of Medicare, from Medicare part A to part B. That is a 
shift, at taxpayer expense, by the way, that simply delays the overall 
failure of this program by not reforming its faults but simply making 
it sustainable. In addition, the measure drops the Senate provisions 
that would have set the stage for future reforms, measures that, as I 
said, were adopted as a result of the leadership of Senator Gramm, who 
offered the amendment, and support on a bipartisan basis--Senator 
Kerrey of Nebraska and others--for these reforms. The Senate bit the 
bullet. The Senate exercised the political will. The Senate put itself 
out on a limb only to see all of these reforms dropped in these 
negotiations.
  Means testing provision dropped, the increase, very gradual increase 
in eligibility from 65 to 67 that would not affect anybody 46 years of 
age and older, and the increase in copayments for home health care 
service dropped, all killed, and along with that any hope for 
meaningful reform.
  The President bears some of this responsibility, a lot of this 
responsibility, because we all know that we cannot accomplish this 
without Presidential leadership, and that leadership was tepid at best. 
There was no sustained active involvement on the part of the executive 
branch and the President to bring about these reforms. And support from 
the House, not this body, but support from the House was weak, and I 
regret that. It falls on the shoulders of both parties.
  Left unchecked, CBO projects that Medicare spending will explode to 
$470 billion a year by the year 2007, representing an average annual 
increase of 8 percent over the next 10 years. This is a growth rate of 
nearly double the estimated growth of the overall economy for the same 
period. In the period from 2010 to 2030, when 80 million baby boomers 
move into retirement, Medicare's expenses are expected to surge to 14 
percent of our gross domestic product as compared with 2.5 today. This 
cannot be sustained. This is a train coming down the track headed for a 
wreck, and yet time after time after time, as we are faced with the 
prospect of that train wreck, we blink. We pass it off to the next 
Congress and the next Congress, and we defer and pass that debt off to 
future generations.
  The $115 billion in promised reduced payments does nothing to avert 
this long-term disaster. By dropping the reforms passed by the Senate, 
budget negotiators have brought the looming crisis one step closer to 
reality. And just yesterday in the Washington Post, there was an 
article entitled, in fact, ``Billions Wasted, Medicare Audit Says.'' 
The article opens by stating that nearly 40 percent of the home health 
care services provided to frail elderly Americans under the Medicare 
Program are unjustified either because the service is not necessary or 
the agency administering the care is not sanctioned to do so or the 
person is not covered--40 percent. I think the figure was $23 billion a 
year in fraud and waste and abuse of one part of the Medicare system.
  We had a provision in the bill that began to address the problem, and 
we passed on it. We could not even turn to seniors and say that the 
program which benefits you, home health care--and I used that for my 
father when he was home in need of that health care--the program that 
benefits you is so fraught with waste and abuse it is jeopardizing the 
entire Medicare system. And yet, the Congress refuses to even impose 
the most minimal of corrections to try to address that problem.
  So what do we offer our seniors? A so-called bipartisan commission to 
study the problem. Madam President, there is nothing left to study. We 
have studied this thing to death. The problem is not a lack of 
knowledge. It is a lack of political will. Confronting the Medicare 
crisis will take political courage and it will take sacrifice. But 
these values, which should come easier in a time of economic growth and 
prosperity, are absent in the spending plan. That is to say nothing 
about Social Security. That is another problem that we don't even touch 
here and we also need to address.
  All of this, as I said, is deeply disturbing, but then when you add 
to that a new entitlement program, a $24 billion health care 
entitlement, paid for with a tax hike on cigarettes and tobacco, you 
compound the problem--not because we do not need a health care program 
for children; we do, but because this one was designed with no rational 
basis. It was created without an assessment of the need. The level of 
funding was arbitrary. We were throwing figures around here--how much 
can we add? How much can we subtract? Pulling figures out of thin air 
in a mindless bidding war rather than having an adult policy debate.
  We are creating in this measure future entitlement problems that we 
cannot even imagine because we have not taken the pains to consider 
those problems.
  I am not speaking against the need for health care for children. I am 
saying let us determine what the need is and tailor a program that 
addresses the specific need without just throwing a new entitlement 
program in place that will probably go the way of all other entitlement 
programs and that will grow beyond our means to check it, and we will 
not be able to put reforms in that either.
  What is absent from this agreement is any type of fundamental, 
lasting structural reform in our Government and its spending. That 
reform is now possible because of the strength of our economy. This is 
when we ought to be putting these reforms in place.
  We always hear that we cannot make structural reforms during times of 
economic slowdown, because that would have too much negative impact on 
our economy. And now we hear the argument that we cannot make reforms 
during economic prosperity because it is too difficult, because a 
strong economy signals to us that we do not need to make reforms. We 
will just reap the benefits of the new revenues that are

[[Page S8344]]

coming in. And so when the economy is down, we cannot do it because it 
hurts the economy, and when the economy is doing well, we say we do not 
need to do it; there is no sense of urgency anymore.
  Our entitlement crisis is lurking around the corner, just below the 
surface of this strong economy. The same irrational and bloated 
bureaucracies that choke our economy in hard times hide in the shadows 
of economic boom because this legislation does nothing to reform and 
limit the Federal Government.
  Sooner or later the economy is going to slow. I wish it would not, 
but it will. And when it does, the reckoning will be even more severe. 
We have squandered a unique opportunity--a President who is not running 
again, a Congress led by Republicans who are willing to walk out on a 
limb again for entitlement reform, who will support a President if he 
would just provide leadership on entitlement reform, a prosperous 
economy where people are at work, revenues coming in.
  Is there ever going to be a better time to bring entitlement reform 
to our budget process? I doubt it. And yet we are squandering this 
marvelous opportunity to make changes now that will be incremental and 
small in nature but will provide great dividends and great benefits for 
the future. Instead, in the interest of political expediency, we 
postpone those tough decisions to a future Congress, to future 
generations, and we look myopically at the immediate election 
consequences, what we perceive them to be. I do not believe they are 
there. I think people are looking for politicians who will exercise 
political will, make the tough decision, step up and do what is right, 
and I think they will be rewarded in the polls. Instead, we say let us 
pass on this one more time.
  We will never have a better moment. We will never have a better 
opportunity. We will never be in a position where we are 3 years out 
from a general election, more than a year out from the next off-term 
election, with an Executive who does not ever have to stand for 
election again in his life, with a Senate that has already made the 
decision to go out on the limb. We will never be in a better position, 
and yet we have squandered this moment.
  For that reason, for all of the hard work that the Senator from New 
Mexico and others have put in this agreement, for all of the benefits 
in this agreement and the positive things in this agreement, I cannot 
support this resolution, because my litmus test, as I stated when I 
voted against the budget resolution and for the budget reconciliation, 
included entitlement reforms. But now, because they have been drawn 
out, that litmus test was not met.
  That is a minimal litmus test. I was willing to accept minimal 
reforms, anything, anything that moved us in a path of structural 
reform, addressing a problem that we know is going to impact negatively 
on the people of this country and the economy of this country. We know 
it passes on debt to future generations. We know it places our elderly 
people in a precarious position for the future of Medicare. And yet at 
this golden time, which may not come again, for political expediency or 
whatever reason--I wasn't in the budget negotiations--we once again 
pass, we once again take a powder on this and say we will do it another 
time; let's form a commission; let's study it some more; let's have 
some more recommendations.
  How many studies, recommendations and conditions do we have to put in 
place to keep telling us what we already know?
  So, Madam President, I know I am a skunk at the party here, the 
celebration for the passage of this so-called balanced budget 
agreement, and I hope it does balance the budget, and it may, mostly, I 
think, not because of new spending we put in place but because the 
economy is roaring along and pouring money into the coffers of the 
Government. I wish we could get more of that money back to the people 
who have earned that money. Instead, we are creating new entitlements. 
We passed on the opportunity to reform existing entitlements, and I 
just regret that very much.
  So I may be a lonely voice in this vote, but I cannot for the reasons 
I have stated support this resolution.
  I yield back whatever time I have remaining.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.
  Mr. HOLLINGS. Madam President, I have spoken with the distinguished 
chairman of our Budget Committee. He has allocated 20 minutes. I think 
I will take far less.
  Madam President, when Alice in Wonderland asked the cat where they 
were headed, the cat replied, ``before you decide where you are going, 
you must first decide where you are.''
  And as we look at this so-called Balanced Budget Act of 1997, we 
should look to see, before anything is enacted, exactly where we are. 
At this very minute, we have a pretty good estimate from the 
Congressional Budget Office.
  We know, Madam President, that as of May 19, CBO estimated the 
deficit for this year, 1997, to be $180 billion. We also know that both 
the CBO and the Office of Management and Budget have agreed that this 
year's revenues are now exceeding their original estimates by as much 
as $40 billion. So, the August estimate for 1997 will be revised to 
show a deficit of about $140 billion.

  The idea is to balance the budget and remove the deficit. If you are 
going to remove your deficit, you have to do it one of two ways--or 
both ways; namely, you have to cut back on your spending and you have 
to increase your revenues or do both. The present Balanced Budget Act 
of 1997 proposed increases in spending, rather than cuts in spending. 
And, instead of increasing the revenues, it reduces revenues by some 
$90 billion.
  So, Madam President, I have studied this document, and I have to 
stand here as a matter of conscience, because I have been the chairman 
of the Budget Committee. I have been in the committee itself since its 
institution in 1974. I cannot mislead the people with a vote that would 
approve what this budget resolution is all about. I could go at length 
as to the various smoke and mirrors, backloading, excessive spectrum 
auctions and other deceptions contained in this bill, but let me go to 
one that is not just a simple smoke or a simple mirror. The fact of the 
matter is, it is an illegal smoke and an illegal mirror. Why do I say 
that? We had some struggle during the original enactment of the 
Greenspan Commission report in 1983. Social Security was about to go 
broke, but its bankruptcy was avoided by the National Commission on 
Social Security Reform. I hold a section of the report, dated January 
1983, in my hand.
  Section 21 of the Greenspan Commission report recommended taking 
Social Security off budget. That is the core of the misunderstanding--
or the understanding. We stated categorically, in accordance with the 
Greenspan Commission, that when we were calculating deficits, whether 
or not we were in the red or in the black, that we would not include 
Social Security trust funds.
  I ask unanimous consent at this point to have printed in the Record a 
table of the various pension fund moneys that have been expended and, 
so there will be no misunderstanding, I would also like to include the 
``Budget Reality'' table that I referred to earlier which contains the 
CBO figure of a $180 billion actual deficit this year.
  There being no objection, the tables were ordered to be printed in 
the Record, as follows:

                  TRUST FUNDS LOOTED TO BALANCE BUDGET
                [By fiscal year, in billions of dollars]
------------------------------------------------------------------------
                                                 1996     1997     2002
------------------------------------------------------------------------
Social Security..............................      550      629    1,095
Medicare:
  HI.........................................      126      116      -58
  SMI........................................       27       22       34
  Military Retirement........................      117      126      173
  Civilian Retirement........................      394      422      561
  Unemployment...............................       54       61       77
  Highway....................................       21       23       40
  Airport....................................        8        5      -28
  Railroad Retirement........................       17       18       20
  Other......................................       60       62       78
                                              --------------------------
      Total..................................    1,374    1,484    1,992
------------------------------------------------------------------------


[[Page S8345]]


                                           HOLLINGS' BUDGET REALITIES
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                        Annual
                                                                Unified       Actual                  increases
        President and year          U.S. Budget    Borrowed     deficit      deficit      National   in spending
                                                 trust funds   with trust    without        debt         for
                                                                 funds     trust funds                 interest
----------------------------------------------------------------------------------------------------------------
Truman:
    1945..........................         92.7          5.4        -47.6  ...........        260.1  ...........
    1946..........................         55.2         -5.0        -15.9        -10.9        271.0  ...........
    1947..........................         34.5         -9.9          4.0        +13.9        257.1  ...........
    1948..........................         29.8          6.7         11.8         +5.1        252.0  ...........
    1949..........................         38.8          1.2          0.6         -0.6        252.6  ...........
    1950..........................         42.6          1.2         -3.1         -4.3        256.9  ...........
    1951..........................         45.5          4.5          6.1         +1.6        255.3  ...........
    1952..........................         67.7          2.3         -1.5         -3.8        259.1  ...........
    1953..........................         76.1          0.4         -6.5         -6.9        266.0  ...........
Eisenhower:
    1954..........................         70.9          3.6         -1.2         -4.8        270.8  ...........
    1955..........................         68.4          0.6         -3.0         -3.6        274.4  ...........
    1956..........................         70.6          2.2          3.9         +1.7        272.7  ...........
    1957..........................         76.6          3.0          3.4         +0.4        272.3  ...........
    1958..........................         82.4          4.6         -2.8         -7.4        279.7  ...........
    1959..........................         92.1         -5.0        -12.8         -7.8        287.5  ...........
    1960..........................         92.2          3.3          0.3         -3.0        290.5  ...........
    1961..........................         97.7         -1.2         -3.3         -2.1        292.6  ...........
Kennedy:
    1962..........................        106.8          3.2         -7.1        -10.3        302.9          9.1
    1963..........................        111.3          2.6         -4.8         -7.4        310.3          9.9
Johnson:
    1964..........................        118.5         -0.1         -5.9         -5.8        316.1         10.7
    1965..........................        118.2          4.8         -1.4         -6.2        322.3         11.3
    1966..........................        134.5          2.5         -3.7         -6.2        328.5         12.0
    1967..........................        157.5          3.3         -8.6        -11.9        340.4         13.4
    1968..........................        178.1          3.1        -25.2        -28.3        368.7         14.6
    1969..........................        183.6          0.3          3.2         +2.9        365.8         16.6
Nixon:
    1970..........................        195.6         12.3         -2.8        -15.1        380.9         19.3
    1971..........................        210.2          4.3        -23.0        -27.3        408.2         21.0
    1972..........................        230.7          4.3        -23.4        -27.7        435.9         21.8
    1973..........................        245.7         15.5        -14.9        -30.4        466.3         24.2
    1974..........................        269.4         11.5         -6.1        -17.6        483.9         29.3
Ford:
    1975..........................        332.2          4.8        -53.2        -58.0        541.9         32.7
    1976..........................        371.8         13.4        -73.7        -87.1        629.0         37.1
Carter:
    1977..........................        409.2         23.7        -53.7        -77.4        706.4         41.9
    1978..........................        458.7         11.0        -59.2        -70.2        776.6         48.7
    1979..........................        503.5         12.2        -40.7        -52.9        829.5         59.9
    1980..........................        590.9          5.8        -73.8        -79.6        909.1         74.8
Reagan:
    1981..........................        678.2          6.7        -79.0        -85.7        994.8         95.5
    1982..........................        745.8         14.5       -128.0       -142.5      1,137.3        117.2
    1983..........................        808.4         26.6       -207.8       -234.4      1,371.7        128.7
    1984..........................        851.8          7.6       -185.4       -193.0      1,564.7        153.9
    1985..........................        946.4         40.5       -212.3       -252.8      1,817.5        178.9
    1986..........................        990.3         81.9       -221.2       -303.1      2,120.6        190.3
    1987..........................      1,003.9         75.7       -149.8       -225.5      2,346.1        195.3
    1988..........................      1,064.1        100.0       -155.2       -255.2      2,601.3        214.1
Bush:
    1989..........................      1,143.2        114.2       -152.5       -266.7      2,868.3        240.9
    1990..........................      1,252.7        117.4       -221.2       -338.6      3,206.6        264.7
    1991..........................      1,323.8        122.5       -269.4       -391.9      3,598.5        285.5
    1992..........................      1,380.9        113.2       -290.4       -403.6      4,002.1        292.3
Clinton:
    1993..........................      1,408.2         94.3       -255.0       -349.3      4,351.4        292.5
    1994..........................      1,460.6         89.2       -203.1       -292.3      4,643.7        296.3
    1995..........................      1,514.6        113.4       -163.9       -277.3      4,921.0        332.4
    1996..........................      1,560.0        154.0       -107.0       -261.0      5,182.0        344.0
    1997..........................      1,622.0        110.0        -70.0       -180.0      5,362.0       359.0
----------------------------------------------------------------------------------------------------------------
Historical Tables, Budget of the US Government FY 1998; Beginning in 1962 CBO's 1997 Economic and Budget
  Outlook, May 19, 1997.

  Mr. HOLLINGS. Fortunately--and we are all enthused about it--the 
deficit is going to come down to about $140 billion this year. It may 
come down to $135 billion, but I doubt that. I have talked to the 
authorities. But we know we are spending over $100 billion more than we 
are taking in. We cannot, under the law, use Social Security trust fund 
surpluses to mask this deficit. The Senate voted on October 18, 1990, 
by a vote of 98-2, to take Social Security off budget. It took us quite 
a while in the Budget Committee, but we finally got it done. That is a 
law, section 13301, signed by President Bush, to take Social Security 
off budget.
  So, this was a very deliberate act. I am not just trying to impassion 
senior citizens or any of that nonsense. I am trying to inflame the 
intellects and the consciences of the Senators. Because every Senator 
present here today who was here in 1990, voted and said, I believe in 
that particular policy. No Senator since 1990 has tried to change that; 
there has been no amendment or bill or otherwise. We had the policy 
itself reaffirmed in the Retirement Protection Act of 1994 which barred 
businesses from using the pension moneys to pay the debt.
  Then, the Senate passed an amendment in the budget bill, barring 
corporations from pension misuse, known as the Pension Reform Act of 
1994.
  Madam President, when I look at this particular budget, I say how in 
the world, if you are spending over $100 billion more than you are 
taking in, can you remove the deficit by increasing spending and 
decreasing revenues? It is quite obvious it cannot be done, except 
under subterfuge, misuse, misappropriation or other fraudulent acts. 
Because the Balanced Budget Act of 1997 --and we have examined the 
document now--uses $465 billion of Social Security trust funds to make 
it appear balanced.
  There is no gimmickry here about Government moneys and buying bonds. 
When you spend the money out of the fund--and that is what we are doing 
because we don't have it--then it has to be replaced. Under the chart I 
included earlier, you can see that over $600 billion from the Social 
Security trust fund has already been expended, and now they will spend 
an additional $465 billion in this bill. This means that by the year 
2002 we will owe Social Security over $1 trillion.
  They say, ``Oh, it's the baby boomers in the next generation that are 
going to bankrupt Social Security.'' No, not at all, my colleagues. It 
is the senior citizens, the adults on the floor of the U.S. Congress 
that are decimating Social Security. It is going on. It continues to go 
on. It is absolutely fraudulent. It is absolutely illegal.
  I ask unanimous consent to have section 13301 printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     SEC. 13301. OFF-BUDGET STATUS OASDI TRUST FUNDS.

       (a) Exclusion of Social Security from All Budgets.--
     Notwithstanding any other

[[Page S8346]]

     provision of law, the receipts and disbursements of the 
     Federal Old-Age and Survivors Insurance Trust Fund and the 
     Federal Disability Insurance Trust Fund shall not be counted 
     as new budget authority, outlays, receipts, or deficit or 
     surplus for purposes of--
       (1) the budget of the United States Government as submitted 
     by the President,
       (2) the congressional budget or
       (3) the Balanced Budget and Emergency Deficit Control Act 
     of 1985.
       (b) Exclusion of Social Security From Congressional 
     Budget.--Section 301(a) of the Congressional Budget Act of 
     1974 is amended by adding at the end the following: ``The 
     concurrent resolution shall not include the outlays and 
     revenue totals of the old age, survivors, and disability 
     insurance program established under title II of the Social 
     Security Act or the related provisions of the Internal 
     Revenue Code of 1986 in the surplus or deficit totals 
     required by this subsection or in any other surplus or 
     deficit totals required by this title.''.

  Mr. HOLLINGS. Then, Madam President, I refer to the document itself. 
They do not have to list in this reconciliation bill the annual 
deficits, the outlays, budget authority, and the debt itself. But the 
document of last month, the conference report, does--and I refer to Mr. 
Kasich's bill: ``From the committee of conference submitted on the 
conference report on the concurrent resolution on the budget for fiscal 
year 1998.''
  If you turn to page 4--and I am going to ask the first 15 lines, just 
those 15 lines, be printed in the Record at this particular point. I 
ask unanimous consent to have that printed.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       (4) Deficits.--For purposes of the enforcement of this 
     resolution, the amounts of the deficits are as follows:
       Fiscal year 1998: $--173,000,000,000.
       Fiscal year 1999: $--182,200,000,000.
       Fiscal year 2000: $--183,200,000,000.
       Fiscal year 2001: $--157,100,000,000.
       Fiscal year 2002: $--108,300,000,000.
       (5) Public Debt.--The appropriate levels of the public debt 
     are as follows:
       Fiscal year 1998: $5,593,500,000,000.
       Fiscal year 1999: $5,841,000,000,000.
       Fiscal year 2000: $6,088,600,000,000.
       Fiscal year 2001: $6,307,300,000,000.
       Fiscal year 2002: $6,481,200,000,000.

  Mr. HOLLINGS. Madam President, on line 1 it says, ``fiscal year 
2002''; line 2, subsection 4, it says ``deficit.''
  Then you look down on line 8 at ``fiscal year 2002,'' and you will 
not see a balance, but a deficit of $108,300,000,000.
  The reason it shows this deficit is because of section 13301, which 
says you cannot include Social Security trust fund surpluses.
  But, if you go down to line 15 and see that the fiscal year debt, 
from year 2001 to 2002, goes up, not into balance. The debt doesn't go 
into balance from the year 2001 to 2002. Instead, the debt increases 
$173.9 billion. This is not a balanced budget.
  It's a tragic thing that you can't get this reported. It is a matter 
of fact. It is a matter of law. It is a matter of conscience. We should 
all come together and say we won't use pension funds to pay off our 
debt. We passed a formal rule here some time ago for all corporate 
America which made this illegal. Denny McLain, the Cy Young Award 
winning pitcher for the Detroit Tigers, when he got out of baseball, 
became the head of a corporation, and, unfortunately, used the 
corporate pension fund to pay off the debt. He was sentenced to 8 years 
in prison. Tell our friend Denny, if you can catch him in whatever 
prison, to please run for the U.S. Senate because, rather than sending 
us off to prison here when we use the pension funds to make the debt 
look smaller, we get the Good Government Award. Everybody is standing 
up with the President and the Speaker and the majority leader and 
saying, ``How wonderful, boys. It is Christmas in July.'' It is a total 
fraud, absolute farce, and everybody ought to know it. Because what we 
are doing is breaking into the airport trust fund, the highway trust 
fund, the military retirees' pensions, the Civil Service retirees' 
pensions, and everything else I have included in the record. There it 
is. I have had it typed up.
  As a matter of conscience I cannot engage in this deception. I was 
always taught, some 50 years ago when I got into public service, in 
1948--that public office was a public trust. I believe Social Security 
is a public trust. I think the consummate 98 Senators said we ought to 
make it a public trust. They said, not only for us but for corporate 
America, we ought to make certain that some fast-moving merger artist 
can't come in on a takeover and abscond with the pension funds to pay 
the debt and pay himself a good bonus and leave everybody else hanging.
  So we have it in formal law, we have it in formal policy. But, when 
it comes to us, we run around and say ``unified, unified.'' There is 
nothing unified. It is expended moneys in violation of the formal 
statutory law of the United States of America, section 13301 of the 
Budget Act.
  I can't vote to violate that law and, therefore, will have to oppose 
the bill.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
  Mr. CHAFEE. Mr. President, I would like to offer my congratulations 
to the leaders on both sides of the aisle, the chairmen and ranking 
minority members of the Finance and Budget Committees, for all of their 
hard work in consummating this very significant, bipartisan budget 
agreement. While this bill is not everything I had hoped for, it is an 
important step toward getting our fiscal house in order.
  Moreover, it is grounded in a philosophy that I strongly believe in--
that bipartisanship is the key to making government work. On difficult 
national problems, such as balancing the budget, neither party alone 
can get the job done, nor garner the public consensus needed for such 
action.
  Indeed, this was the genesis behind establishing the so-called 
Chafee-Breaux centrist budget coalition, which I believe deserves 
considerable credit for advancing the terms of debate on the issue of 
long-term Medicare reform. Regrettably means-testing of the part B 
premium, increasing the age of eligibility from 65 to 67, and the $5 
home health copayment were dropped from the final package. However, the 
credit for getting them into the Senate version of this bill belongs to 
the centrist budget coalition. Each of these provisions was added to 
the Senate bill with a big, courageous bipartisan vote--something which 
would have been unthinkable just a few years ago.
  As a result of these pioneering Senate votes and the growing national 
consensus on the need for long-term reform, President Clinton has now 
pledged to stand with those Members of Congress who vote for means-
testing of the part B premium, an important step toward creating the 
political environment which will be needed to secure this program for 
future generations of retirees.
  I would further urge the President, as well as Democratic party 
leaders, to disavow and distance themselves from candidates who resort 
to mediscare demagoguery in their future political campaigns. The 
American people deserve a responsible debate on this difficult subject, 
and the centrist coalition will be working to see that this happens.
  This bill does include a number of helpful changes for Medicare 
beneficiaries, low-income children, and legal immigrants which I would 
like to briefly highlight.
  Medigap provisions included in this bill, which I was pleased to 
author earlier this year, will do for Medicare beneficiaries much of 
what the Kassebaum-Kennedy health insurance bill did for working 
Americans: It vastly improves portability and bans preexisting 
condition limitations for Medigap policy holders.
  This bill also improves access to emergency services for Medicare 
beneficiaries enrolled in managed care plans, which is derived from 
legislation Senator Graham authored and I was glad to cosponsor earlier 
this year. This provision establishes a prudent layperson definition of 
emergency medical conditions to ensure that emergency services are 
properly covered.
  This legislation also includes expanded preventive health care 
benefits for Medicare enrollees, including mammography, colorectal and 
prostate cancer screening; testing for osteoporosis; and improved 
coverage for diabetes and other important prevention measures. These 
enhanced services will be helpful to the more than 174,000 Medicare 
beneficiaries in Rhode Island.
  One of my most important priorities, that of expanding access to 
health insurance for low-income children, is also addressed in this 
bill. I am especially pleased that we are providing $24 billion for 
this purpose. This is a critical step forward for Rhode Island's

[[Page S8347]]

children, 19 percent of whom live in poverty. Many of these poor 
children--38 percent--live in families where at least one parent is 
working, yet they are still poor. These funds are targeted to help 
these families especially.
  While I would have preferred greater specificity in terms of the 
benefits to be provided to children under this program, the final 
package is a significant improvement over some of the earlier 
proposals. I want to thank and acknowledge Senator Rockefeller for his 
leadership and expertise in working to advance the cause for children's 
health insurance. He was a strong partner in helping to make this a 
stronger and better program than it otherwise would have been.
  I also want to thank Senator Roth for helping me to ensure that Rhode 
Island can take full advantage of the funding provided under this 
program to continue its children's health initiatives. The Finance 
Committee chairman was very responsive to the problems this legislation 
posed for States, like Rhode Island, that have already expanded 
coverage. We were able to work together to ensure that Rhode Island 
will not be penalized for choosing to expand coverage on its own.
  This bill also gives States critical new flexibility by allowing them 
to enroll Medicaid beneficiaries into managed care without obtaining a 
waiver from the Department of Health and Human Services. At the same 
time, the legislation includes important safeguards for these 
beneficiaries, many of which were contained in legislation I introduced 
earlier this year. For example, disabled children, children in foster 
care and special needs children who have been adopted are protected 
from mandatory enrollment in managed care. Women enrolled in Medicaid 
managed care programs will continue to have the freedom to choose their 
family planning provider, even if that provider is not part of their 
managed care plan.
  This bill also restores Medicaid coverage to thousands of children 
who were removed from the SSI rolls as a result of eligibility changes 
made in the 1996 welfare reform law. This will be enormously helpful to 
many low-income families whose children may no longer be considered 
statutorily disabled but who nevertheless have significant special 
health care needs.
  Let me take a moment to describe the provisions of this bill dealing 
with legal immigrants. As my colleagues know, the 1996 welfare reform 
law placed severe restrictions on the Federal benefits that legal 
immigrants may receive. Among these restrictions was a complete and 
immediate cut-off of supplemental security income [SSI] and food stamp 
benefits, not only for future immigrants but for those already in this 
country legally.
  For the elderly and disabled legal immigrants who last August were in 
the United States--including nearly 4,000 in my own State of Rhode 
Island--the new SSI ban represented nothing short of a crisis. For 
many, the loss of this critical Federal aid would mean losing the 
ability to live independently. In turn, this would present a serious 
community and fiscal challenge to State and local governments, as 
immigrants who had lost benefits and faced destitution turned to 
nursing homes or other costly facilities for support.
  I was sorely troubled by these restrictions on immigrants, and 
pledged to do what I could to mitigate the most harsh of these during 
this Congress. I am delighted to say that in this regard, we have been 
successful. The conference report before us now is identical to the 
Senate-passed bill on which I and others of my colleagues worked very 
hard.
  It restores benefits to those legal immigrants who were receiving SSI 
as of last August. It also allows immigrants who were in the United 
States last August and who may become disabled in the future to receive 
SSI. For my State, this means that 3,753 currently elderly and disabled 
Rhode Island residents--and many others who may become disabled in the 
future--will be able to receive basic SSI assistance to allow them to 
live with dignity.
  Now, the immigrant provisions of this bill are not perfect. And I am 
disappointed that it does not contain the Chafee-Graham amendment on 
legal immigrant children and Medicaid, or the provision dealing with 
SSI for those too disabled to naturalize. But the bill before us goes a 
long way toward restoring fair treatment for the thousands of legal, 
tax-paying immigrants who were in the country and playing by the rules 
when welfare reform was enacted.
  I want to commend Senators D'Amato, Feinstein, DeWine, and Graham for 
all of their hard work in helping to solve this problem. Since the 
introduction of our Fairness for Legal Immigrants Act in April, we have 
been working as a united team toward fair treatment for legal 
immigrants. With passage of this bill, our efforts will have met with 
success.
  In closing, I am hopeful that we can build upon the bipartisanship 
that was necessary to make this bill a reality when we turn to the more 
challenging task of advancing long-term budget and entitlement reforms 
in the future.
  I particularly want to address the entitlement reforms I strongly 
believe are necessary for Medicare. Although the provisions we worked 
hard on--means testing the part B premium, increasing the age of 
eligibility from 65 to 67, the $5 home health care copayment--were 
dropped in the final package, nonetheless, I think it behooves all of 
us to continue our work on each of these measures, and certainly I will 
do everything I can to advance them. I thank the Chair.
  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Idaho is recognized.
  Mr. GRASSLEY. I yield myself such time as I might consume.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. GRASSLEY. Madam President, I rise to address the Balanced Budget 
Act of 1997.
  This is an important moment. This bill represents the triumph of the 
idea that we must get our national accounts in order. This is an idea 
that Republicans, with the help of many Democrats, have labored for 
years to put at the top of the national agenda.
  Finally, it is close to being done.
  As a member of the Finance and Budget Committees, and as a Budget 
Committee delegate to the conference, I have been deeply involved in 
the consideration of this bill. And I have been in a position to 
witness the dedication Senator Roth, Senator Domenici, and Senator Lott 
hve brought to the difficult task of giving birth to this balanced 
budget legislation. I want to congratulate them on the success of their 
efforts.
  I would particularly like to thank Chairman Domenici, Chairman Roth, 
Senator Lott and the other Senate conferees for protecting a number of 
excellent Senate provisions in the conference committee. Believe me, 
Madam President, it wasn't easy.
  The Medicare portions of the bill will bring about very positive 
changes in the program.
  The bill calls for necessary savings in Medicare, and thereby will 
help put Medicare, and particularly the Medicare hospital trust fund, 
on a sounder financial footing. The bill also contains a number of 
innovations that I think will improve the Medicare Program.
  First and foremost is the new Medicare Plus Choice Program, reforming 
Medicare managed care.
  From my perspective, representing the State of Iowa, the inclusion in 
this bill of a 50-50 local/national blended rate for Medicare managed 
care reimbursement is extremely important. Also critical is the bill's 
inclusion of a minimum payment of $367 in 1998, with annual updates 
thereafter.
  The opportunity for additional types of health plans, other than 
HMO's, to participate in the Medicare Choice Program will open 
additional opportunities to Medicare beneficiaries. Based upon what I 
have been hearing from Iowa, I think the reformed payment system and 
the additional types of plans should truly broaden choice for Medicare 
beneficiaries in Iowa.
  These provisions together should go a long way toward giving Iowans 
the same kinds of choices Medicare beneficiaries in other parts of the 
country have.
  I also want to thank the chairman and my colleagues on the Senate 
Finance Committee and the House and Senate conference committees for 
including many provisions contained in S. 701, legislation I introduced 
earlier this year regarding Medicare managed care standards. I am 
especially pleased to see that, beginning in 1998 and annually 
thereafter, beneficiaries will receive comparative user-friendly charts

[[Page S8348]]

listing health plan options in their area. The only way to foster 
consumer choice and competition is by informing Medicare beneficiaries 
of their options and their rights under the Medicare Choice Program. 
The lack of information currently distributed to Medicare beneficiaries 
is astonishing.
  The Medicare conference agreement will ensure that beneficiaries have 
the information they require to make the right health plan choice for 
their individual health care needs.
  Another important protection for Medicare beneficiaries is a fair 
appeals process. I have been advocating for an objective review of 
health plans' decisions to deny care.
  I am pleased that the Medicare conference agreement adopted my 
provisions to provide Medicare beneficiaries increased protections 
during the appeals process. Now, all Medicare beneficiaries will have 
the assurance that the Medicare program will provide an independent 
review of all denials of care by health plans prior to beneficiaries 
appealing to the Department of Health and Human Services.
  This increased protection will hold health plans more accountable in 
their decision making process regarding medically necessary care and 
will give beneficiaries greater confidence in Medicare managed care, if 
they choose this option.
  Madam President, I am also very pleased that we have preserved in the 
conference agreement rural health provisions that I have been working 
on for several years.
  These provisions include:
  My Medicare dependent hospitals bill, which will help a large number 
of rural hospitals in Iowa suffering from negative Medicare margins;
  Senator Baucus' bill on critical access rural hospitals, on which 
Senator Rockefeller and I have been close collaborators;
  Reform of the Medicare disproportionate share hospital program, so 
that deserving hospitals will be treated fairly whether they are 
located in urban or rural areas----
  Mr. DOMENICI. Would the Senator yield on that point?
  Mr. GRASSLEY. Yes.
  Mr. DOMENICI. I say to the Senator, I have been listening to your 
remarks and analysis.
  I want to tell the Senate, and anybody interested, if not for Charles 
Grassley, the Senator who has been speaking, we would not have gotten 
that provision. That is a fair provision because those parts of 
America--your State, my State, and others--that have done a good job of 
keeping costs way down, can't make it if we build the program on 
keeping them down while the very expensive States do not come down. And 
this is a formula we did not get exactly what we wanted, but thanks to 
your efforts we came very close to something that you can say is fair 
and much better for your people.
  Mr. GRASSLEY. Yes. I thank the Senator from New Mexico for his kind 
remarks. And he has spoken better than I can on that issue. But 
basically what his constituents do not realize and my constituents do 
not realize, is that we have a very cost-effective delivery of medicine 
in rural America, very high quality by the way, but because of the 
historical basis for the reimbursement of Medicare, based upon that 
cost-effective medicine, we are at a very low level, and the options 
that metropolitan areas have will not come to rural America; but the 
provisions of the legislation he just described will make that possible 
now.
  And so I can say this, that in 1995, it would not have been included 
in the legislation without the intervention of the Senator from New 
Mexico, even though it was my basic legislation. And he helped us this 
time at a very, very critical time in the negotiations between the 
House and the Senate. So I may have authored this legislation, but the 
fact that it is in the final package is a tribute to the leadership of 
Senator Domenici.
  I will continue on and say that we have also for rural areas 
the provisions for:

  Expanding the existing telemedicine demonstration project, in order 
to improve the delivery of health care to underserved areas;
  Reform of the eligibility requirements for rural health clinics, 
enabling this vital program to operate as originally intended; and
  My legislation assisting rural referral centers.
  I am also pleased to finally see my legislation to provide direct 
reimbursement at 85 percent of the physician fee schedule to nurse 
practitioners, clinical nurse specialists, any physician assistants is 
finally going to become law. Similar measures were included in the 
President's Medicare proposal and in the House Ways and Means Medicare 
bill and were part of the Balanced Budget Act of 1995.
  Senator Conrad and I introduced these bills in the last three 
Congresses. We reintroduced them again in this Congress and were 
successful in getting them included in the Senate Finance Committee 
bill. This legislation will reform Medicare policies which, under 
certain circumstances, restrict reimbursement for services delivered by 
these providers.
  Direct reimbursement to these nonphysician providers will improve 
access to primary care services for Medicare beneficiaries, 
particularly in rural and under served areas.
  There has been much deliberation in this Congress over proposals to 
address the problem of uninsured children in our Nation.
  I am very pleased that the bill before us today includes a strong 
bipartisan package addressing this matter. This bill includes a total 
of $24 billion to be spent on children's health insurance initiatives 
for those who are not currently enrolled in Medicaid or who do not have 
access to adequate and affordable health care coverage. This is $10 
billion more than the President's original proposal.
  We should view this achievement not only as an important piece of 
health care policy, but also as a giant step toward improving the 
quality of life for our Nation's children. I commend the Senate 
leadership, particularly Chairman Roth and Chairman Domenici, for their 
leadership and commitment to this important matter.
  These funds will be provided to States in the form of block grants. 
States are allowed considerable flexibility in designing health 
insurance programs, yet States must meet important Federal guidelines 
in their efforts to provide quality health care coverage.
  I am confident that this proposal will be successful in meeting our 
goals to cover our Nation's uninsured children.
  Yet, it is important that Congress remain committed to this goal and 
we must closely monitor the developments of the proposal set forth in 
this legislation.
  This budget bill includes a number of improvements to the Medicaid 
Program to ensure that high-quality of care is provided to our Nation's 
most vulnerable population. And, this bill reforms Medicaid to give 
States much more flexibility in managing their programs.
  In recent years, States have undertaken numerous initiatives to 
control spending in Medicaid. As a result, Medicaid spending has slowed 
significantly. This budget saves a total of $13.6 billion in the 
Medicaid Program over 5 years. Most savings are achieved through new 
policies for payments to disproportionate share hospitals. Funds have 
been retargeted to hospitals that serve large numbers of Medicaid and 
low-income patients.
  Other improvements made to the Medicaid Program include changes to 
last year's welfare reform law so that benefits are restored to legal 
immigrants needing long-term care services. Also, a number of important 
reforms were made to managed care policies for Medicaid programs 
serving children, people with disabilities, and other Americans.
  Of course, I do have a number of concerns, Madam President. Does this 
bill represent a long-term solution to the problems facing the 
entitlement programs? No, it most certainly does not. But I note that 
the proposal of Senators Roth and Moynihan to establish a Medicare 
Reform Commission is included in the conference agreement. We will look 
to the work of this commission to make proposals for reform and to help 
us produce the consensus we need to act to put the Medicare Program on 
a sound footing for the retirement of the baby-boom generation. Make no 
mistake: we will need to do more. But on balance, I believe that we 
have made a good start.
  I want to conclude by again thanking Senators Roth and Domenici and 
their

[[Page S8349]]

hard-working staffs for the efforts they have made, for several years 
now, to bring us to this point.


                Restoring Benefits for Legal Immigrants

  Mr. KENNEDY. Mr. President, the balanced budget agreement represents 
major progress in restoring benefits to legal immigrants. The harsh 
welfare law passed last year wrongfully denied access by legal 
immigrants to most Federal assistance programs. It permanently banned 
them from SSI benefits and food stamps. It banned them for 5 years from 
AFDC, Medicaid, and other programs. And it gave the States the option 
of permanently banning them from these programs.
  Americans across the country were rightly concerned about these 
unfair provisions, and Congress soon agreed that the legislation had 
gone too far.
  If the provisions of last year's welfare law remain in effect, many 
elderly legal immigrants would be forced out of nursing homes. Legal 
immigrants injured on the job and those with disabled children would 
lose assistance. Some 500,000 legal immigrants who were already living 
in the United States would have been affected. In Massachusetts, 15,000 
elderly and disabled legal immigrants would have lost their SSI 
benefits.
  Some said in last year's welfare debate, ``Let the immigrant's 
sponsor support them.'' But, Congress now realizes that legal 
immigrants often do not have sponsors. Refugees, for example, do not 
have sponsors. In cases of many older immigrants, their sponsor has 
died or is no longer able to provide support.
  Immigrants affected by last year's harsh cuts are individuals who 
came to this country legally. Many are close family members of American 
citizens. They play by the rules, pay their taxes, and serve in our 
Armed Forces. They are future citizens trying to make their way in this 
country.
  The $12 billion restored for legal immigrant assistance over the next 
5 years in this bill is urgently needed. It will allow most legal 
immigrants who currently receive SSI benefits to stay on the rolls. In 
addition, legal immigrants who were in the United States at this time 
last year's welfare bill was enacted in August 1996 can receive SSI in 
the future if they become disabled. These changes will help a very 
large number of people hurt by the welfare law.
  Unfortunately, those who are too disabled to go through the process 
of naturalization to become citizens are left out of the final bill. I 
proposed an amendment, which was accepted by the Senate, to receive SSI 
benefits after their first 5 years in the United States, and I hope we 
can revisit this important issue in the near future.
  I had also hoped the final budget agreement would allow legal 
immigrant children to continue to receive Medicaid. Currently, they are 
banned from Medicaid for 5 years. Some States may even act to ban legal 
immigrant children from Medicaid forever. The Senate bill included a 
Chafee-Graham amendment to enable these children to receive Medicaid 
benefits, and I regret that it was dropped from the first bill.
  There is still much more to be done to correct the problems created 
for legal immigrants by last year's welfare bill. The Senate version of 
this bill restored less than 50 percent of the cuts made last year in 
their benefits. We are making worthwhile progress in this legislation, 
and I intend to do all I can to see that additional progress is made in 
future legislation.
  I yield the floor.
  The PRESIDING OFFICER. Who seeks recognition?
  Mr. CRAIG addressed the Chair.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. DOMENICI. How much time does the Senator desire? Fifteen minutes?
  Mr. CRAIG. Yes.
  Mr. DOMENICI. I yield 15 minutes to the Senator.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Madam President, let me thank the chairman of the Budget 
Committee for yielding, and let me also recognize him this evening and 
the chairman of the Finance Committee, Senator Roth, for the work that 
both Senators have done with their ranking members over the last good 
many months to craft the legislation that is before us today, tomorrow, 
and through the balance of the week dealing both with the budget and 
with tax cuts.
  I rise in support of H.R. 2015, the Balanced Budget Act of 1997.
  Madam President, in 1993 and 1994, we had a President who said 
balancing the budget probably was a bad thing to do. We had a high 
administration official who actually had written a book that said it 
was a loophole whenever children could inherit some of their parents' 
money. Congress had increased spending and joined with the President in 
the passing of the biggest tax increase in the history of our country. 
That was not a decade ago. That was just a few years ago.
  Then came November 1994. And what a difference an election makes. 
What a great transformation of the mind and the political thought can 
occur when the American people have spoken and said, ``We've had 
enough.''
  We asked the Congress to change their thinking. And we changed the 
Congress to think differently. And the first Republican Congress in 40 
years began in 1995, with promises to do several very important, 
necessary things--to reform welfare, to cut back bureaucracy, to 
balance the budget, and to provide some tax relief for American 
taxpayers who work hard, have families, and create jobs.
  In 1996, the voters rewarded a Congress and President who 
accomplished the first two of these items and who promised to bring 
about the rest.
  This week, the Republican majority in Congress, joined by now many 
reform Democrats in a bipartisan majority, will deliver on those 
promises.
  Madam President, this week, as we consider the Balanced Budget Act, 
and especially the Tax Relief Act of 1997, we are talking about more 
freedom for more of America's people.
  Freedom is not something that the Government gives the people. Our 
Nation's founders knew that the people's freedom is, in the words of 
the Declaration of Independence, ``self-evident,'' ``unalienable,'' and 
``endowed by their Creator.''
  Freedom comes from limiting Government to its necessary functions. 
Freedom is what remains when Government is not excessively burdensome 
or coercive.
  This week, we take modest but very significant steps toward restoring 
freedom to the American people--freedom from the most severe tax burden 
on families in our Nation's history, freedom from an oppressive 
national debt, freedom from the growth of an ever-larger, ever-more 
intrusive Federal Government.
  A couple from Idaho and their four daughters visited my office just 
this week and we discussed taxes, and particularly death and 
inheritance taxes. They told to me they run a small farm in Idaho that 
their great-grandparents had established in 1882. And they reminded me 
that people turned to Government to take care of them when the 
Government, usually through taxes, takes away their ability to take 
care of themselves.
  And as Ronald Reagan said: A Government big enough to promise you 
everything you need is a Government big enough to take away everything 
you have.
  The Tax Relief Act that we will begin debating tomorrow, combined 
with balancing the budget, will help more families take care of 
themselves the way they want, by keeping more of their own hard-earned 
money; by bringing about the ability to save more for their retirement, 
their children's education, and other priorities they have; by making 
it easier to own your own family farm or small business or home; by 
making it easier to do the kinds of things that Americans like to do, 
without having to think twice or three times whether they can afford 
to, or worry whether the Government will take more of their money; by 
creating, in other words, the economic atmosphere that will allow 
Americans to invest in creating more and better jobs for themselves, 
their children, and the future of our country.

  The bills we will pass this week mark the triumph of the principle 
that the Federal budget should be balanced and should stay balanced.
  In 1994, when the American people spoke so clearly about changing the 
political thought in this country and the political attitudes, the Dow 
Jones was hovering at about 3000. Today, it is at 8000. We have, by 
these efforts to balance the budget and provide tax relief,

[[Page S8350]]

unleashed a dynamic of this economy that is, without question, 
historic.
  We are now seeing the reverse of what happened about 40 years ago, 
when an elite group of liberal economists sold liberal politicians on 
the idea that you could promise your voters a free lunch. Their 
intellectual justification was the so-called enlightened discovery that 
unlimited borrowing could pay for unlimited social spending without 
much consequence.
  It's easy to understand the political appeal of this proposition. 
What is incredible is that anyone really believed it, or that they 
would follow it for nearly 40 years and create a $5 trillion borrowed 
debt--almost beyond understanding.
  But that is where we are today. That is clearly why the American 
people have spoken, and that is why this Congress and this Senate 
finally said we have to change the way we do business.
  You can't borrow your way to prosperity over the long term. We tried 
and we saw our economy grow even more sluggish. We saw people become 
even more dependent on Government largess. Thank goodness, Americans, 
enlightened as they always are, recognizing that they are the 
Government, took charge and said, ``No more.''
  A huge national debt means our Government has spent the last 
generation mortgaging the future for the next generation.
  That is not a matter of green-eyeshades accounting; it really is an 
immoral assault on the well-being of our children and their ability to 
produce for themselves and their prodigies.
  Balancing the budget is not about numbers, it is about people. 
Balancing the budget means more and better jobs, making it more 
affordable to buy a home, and more families affording a good education 
for their children without having to come to the Government and say, 
please help me. They can do more of it for themselves. Balancing the 
budget means that essential Federal programs like Social Security and 
Medicare will be there for those who need it and not become a liability 
and a burden on future generations.
  There will be more freedom because of a balanced budget, because 
people will get no more Government than they are willing to pay for. 
Balancing the budget means Americans--all Americans--win. And we have 
the actions of the last 3 years now--an economy responding to spending 
restraint and real efforts to balance the budget and cut taxes--to 
demonstrate that what I am talking about tonight has a very strong 
foundation of truth.
  I want to pause for a moment and review one critical reason why we 
are here this week passing legislation that promises to balance the 
budget by fiscal year 2002. This die was cast when Congress, by the 
narrowest of margins, defeated the balanced budget amendment to the 
Constitution.
  Only the threat of the ultimate legal sanction--a constitutional 
amendment--and the overwhelming public support for that amendment 
finally convinced Congress, most important, some of my colleagues and 
some in the administration, that we had to quit talking the talk and 
start walking the walk.
  In other words, I have heard so many on the other side throw up their 
hands and say, we do not need a constitutional amendment to make us 
balance the budget; all we have to do is do it; all we have to do is 
exert fiscal responsibility. But we also have to have this program and 
we have to have that program, and we have to spend here and there. And 
2 years running, by one vote, the people almost began to take control 
of their Government again. It frightened the Congress.
  A President who once said a balanced budget is a bad idea is now out 
strutting around talking about his balanced budget and all of the 
wonderful things that will be reaped by it. Well, it is always 
surprising to me that people like our President think the American 
public has such a short memory. They don't. His record suggests he 
doesn't believe it is a good idea. He also knows politically that he 
has to do it. And there are some in Congress who sometimes choose to do 
something differently than we otherwise may like to do, but who know 
what they have to do because the American people expect it. Balancing 
the budget has always been the right thing to do. We are here tonight 
because it is now also, at last, the politically correct thing to do, 
and I suggest that that vote occur.
  Mr. LAUTENBERG. Will the Senator yield?
  Mr. CRAIG. No, not at this time. I'd like to finish my thoughts. I 
know that 2 years running, with the House having passed a balanced 
budget amendment and this Senate missing by just one vote--finally, it 
is recognized by all in a bipartisan gesture that, the closer the 
people come to changing their Constitution and exerting that control 
over Congress, the more motivated Congress becomes in doing it, doing 
it ourselves, and that is exactly what is occurring here. I believe 
that, without the constitutional discipline, we will always risk the 
return to more spending and more borrowing. Ultimately, to safeguard 
the future, the balanced budget amendment to the Constitution must come 
into place.
  Some may suggest that passage of this year's balanced budget 
agreement means we no longer need the constitutional amendment. I 
suggest that is not true. One balanced budget in 30 years hardly means 
that we have fixed the system or that we have systemically changed the 
attitude of some who serve here. It will never be easier than it is 
right now to balance the budget.
  In the past, the temptation always was to put off the hard choices; 
Members have thought, it will be easier in the future than it is now. 
But in fact, it will never again be as easy as it is right now to begin 
that long march to arrest the growth of a $5 trillion national debt.
  That is what the long-term economic and demographic trends tell us. 
This year's budget discipline and hard choices are nothing compared to 
what Congress must wrestle with in just the next few years.
  For what we have committed ourselves to tonight and for the balance 
of this decade will not be easy choices. It was difficult enough to 
arrive at the agreement that we now have, and I will say, even though I 
differ sometimes with the President and others, that this is now a 
bipartisan effort, and I accept that and I honor them in their 
recognition that, finally, they are willing to offer to the American 
people what the American people have asked for.
  When we finally pass this balanced budget and then the balanced 
budget amendment and send it out to the States for ratification--and I 
believe that will occur in my lifetime and probably within the decade--
we will show we understand, as the American people clearly understand, 
that a nation so indebted ultimately cannot survive, and that to clean 
up our debt, to balance our budget was ultimately the necessary thing 
to do.
  The Balanced Budget Act of 1997 is a mixed bag. I don't support every 
portion of it. I have reservations about some of it.
  It creates new social spending; it locks in, in the form of 
entitlements, that social spending. It could use stronger enforcement 
provisions. For example, I continue to support the idea that caps on 
spending should extend to spending overall and not only to annual 
appropriations. It does not address the long-term economic and 
demographic trends that drive entitlement spending and cry out for 
reform.
  The chairmen of our committees and some Senators tried hard to get 
those reforms. That was bipartisan. Some partisans on my side, too, 
could not accept that. But, ultimately, we will get there. We have to 
get there. I don't want my grandchildren turning to me and saying, 
Grandpa, we love you dearly, but we can't afford you and afford to 
provide for ourselves. We want to buy our own home, educate our 
children, and we cannot afford the amount of money that would come from 
our paycheck to go to the Federal Government because that government 
promised to provide for everyone's future. I don't want that to happen, 
and the chairman doesn't want that to happen. The future demands that 
we address it, that we help people prepare themselves for it, and that 
we will try to do.
  Today, annual discretionary appropriations make up only one-third of 
the total budget, and that share will continue to shrink. The Kerrey-
Danforth entitlement commission of a couple of years ago estimated that 
in just 14 years, 2011, entitlement spending and interest payments will 
consume all

[[Page S8351]]

available tax revenue. That means we will either have to borrow 
incredible amounts for deficit spending; or go without defense, 
highways, law enforcement, parks, forestry, education, science, and 
medical research; or raise taxes to ruinous levels.
  We are not going to do that. We are smarter than that. More 
important, we wouldn't be here to do it if we tried, because the 
American people won't tolerate it. They will demand reform before we 
get to that point, and if we can't give it to them, they will find the 
candidate willing to do so.
  While this bill before us today does establish another commission to 
address the need for long-term entitlement reforms, we have already had 
that kind of commission, chaired by Senator Kerrey of Nebraska. We 
already know what the current trends are and have some idea of what 
needs to be done.
  But there is also considerable good in this bill. It does accomplish 
more in the way of spending control and entitlement reform than many 
thought possible even a year ago. There are significant repairs to the 
Medicare System. Medicare will be solvent for at least another decade 
and will continue to be there for seniors who need it.
  Last, we will begin the process of injecting consumer choice into the 
system. Why should our seniors not have some of that? The Medicare 
System, based on market principles, means better care and more economic 
care. I am always amazed when the bureaucracy thinks it can outperform 
the marketplace. We know it can't, we know it never has, and, in this 
instance, we finally recognize that by putting some market principles 
in.
  The fundamental reforms in last year's historic welfare reform bill 
will remain in place. We continue to move toward a system that rewards 
work and allows the States the freedom to develop new and better 
approaches.
  Enforceable caps on discretionary appropriations spending--virtually 
the only thing out of the 1990 budget agreement that worked--will 
continue through the year 2002.
  Overall, the growth in spending will slow by $270 billion over the 
next 5 years and $1 trillion over the next 10 years, a saving that will 
be locked in by permanent law and not be subject to year-to-year 
political whims.
  New spending will be accomplished with a minimum of bureaucracy and a 
maximum of State flexibility.
  This is far from the ideal balanced budget bill. But it takes the 
first major step away from demagoguery and toward genuine entitlement 
reform. It delivers on and locks in the promise of a balanced budget, 
something I have demanded and worked for my entire time here serving 
the State of Idaho.
  Why do I demand that? Because the citizens of my State know that a 
government that continually spends beyond its means, a government that 
mounts a $5 trillion debt, a government that allows interest on debt to 
rapidly move toward becoming the largest single item in its budget, is 
a government that cannot sustain itself. That we recognize. The 
chairman of our Budget Committee and the chairman of our Finance 
Committee recognize that. We all recognize that. That is what our party 
has stood for. That is what the majority here in Congress has demanded 
because the citizens of our country have said it is a requirement of 
government.
  I must say that the Balanced Budget Act of this year and the 
Taxpayers' Relief Act of this year are responses to demands of the 
American people. I am proud to have been a part of helping craft them. 
I look forward to the opportunity to vote for them, to cause them to 
become law, and to see this economy remain dynamic, create jobs, and 
provide opportunities for this generation and generations to come.
  I yield the floor.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER (Mr. Allard). The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, let me say to my friend, Senator Craig, 
perhaps if we had adopted what he has been recommending for many 
years--a constitutional amendment to balance the budget--we wouldn't be 
here with the kind of circumstances that confront us.
  I don't think the Senator from Idaho has to stand up here, or with 
his people, and talk about where he stands in terms of overspending by 
our National Government because his record is excellent in that regard. 
I think his remarks today indicate that, when you have a Democrat 
President, a Republican Congress, and a strong Democratic minority in 
both Houses, you can't get everything that you want. As a matter of 
fact, the Democrats differ from their President, and the President 
differs from us.
  What we have done, I think, is borderline on being a miracle. The 
only thing that keeps me from saying that is that I don't know whether 
the product deserves being labeled a miracle. But in terms of getting 
it put together, coming here today and getting it finished and voted on 
tomorrow--I am sure we are going to get in excess of 75 votes 
tomorrow--that is pretty good.
  As I said this morning when I opened up, even the Washington Post 
finally said, ``That Is a Big Deal.'' I think it is.
  I am very glad that the Senator from Idaho is going to support it and 
that he has been helping us as much as he has. I thank him for that.
  Mr. CRAIG. Mr. President, I thank the Senator from New Mexico. I 
recognize the bipartisan nature in which this was created, and I 
support that. I hope that we can sustain that in years to come to truly 
get our budget in balance and to do so in a way that remains or creates 
or participates in a vibrant economy.
  There is no question that this effort was accomplished not by us 
alone but in a bipartisan effort. Certainly the ranking member, who 
stands here this evening, was a major contributor. And I recognize 
that.
  I am always a bit surprised when for the 17 years that I have been 
here I have always heard, ``Oh, we don't need to worry about that. We 
can balance the budget. We have the will to do it.'' Well, we didn't 
have the will until the American people demanded it of us. Now we do 
have that will. It will only come by a bipartisan effort. I recognize 
that this evening. I appreciate it. I think it is a great 
accomplishment, and the Senator from New Mexico is to be congratulated 
for it.
  I thank both Senators.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I mentioned that this was a ``big 
deal.'' Every time I say that I want to make sure that I say, ``and a 
good deal for all Americans'' because that is what is important--not 
that it is big, not that people think it is a big deal, but that it is 
good for our people. And that it is.
  I yield the floor. Senator Lautenberg wants to speak.
  Mr. LAUTENBERG. Just for a few minutes, Mr. President.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, in the almost afterglow of feeling 
pretty good about things, we worked hard, everybody together. There 
were no fingers pointed.
  I chided the chairman of the committee this morning when he excerpted 
from the headline of the Washington Post. He said that the headline in 
five words said, ``This is a Big Deal.'' I asked a question. Was the 
intonation properly affixed, or did it say, ``This is a good deal?'' It 
is quite a different meaning.

  Mr. DOMENICI. We read the story. They were saying it is a ``big 
deal.''
  Mr. LAUTENBERG. It is a big deal; a giant deal. I think, without 
breaking our arms or patting ourselves on the back, there was a lot of 
goodwill that was injected into the discussion and into the debate.
  My colleague from Idaho, who is a man who has a way with words, kind 
of laid it on us and included the President in there as someone who did 
buy into the balanced budget notion but was dragged kicking and 
screaming.
  Mr. President, I wish it was 1 o'clock in the afternoon and we were 
all energized and we had a chance to talk a little bit. But I will not 
prolong the process except for a minute or two to say, since it took 
what I thought was a slight partisan turn--it makes me unhappy when 
things have gone this well this way to say that I have been here long 
enough to remember Presidents Reagan and Bush. I like them both. They 
are nice people. But people on their watch, as we say, who managed to 
have this deficit of ours skyrocket

[[Page S8352]]

right up into the air--turn up the tax cuts and let the deficits run. 
That is what they did.
  When our President and the Democratic Party took over in 1992, 1993, 
he inherited a deficit that year of $290 billion without a balanced 
budget amendment but with the interest that was generated. Yes, we were 
profligates, and we spent too much money, and perhaps we did a few 
things wrong. But it was an honest try all the way. And the assertion 
or the insinuation that these guys didn't care or those guys didn't 
care, it is not a way to do business. I don't care if we never get a 
balanced budget amendment. I want to tell you right now. As a matter of 
fact, I hope you don't. I love the Constitution, and the Constitution 
loves America, and it is the best document ever written. The fact that 
we have altered it so few times is a testimony to the strength and the 
wisdom of the Founders and those who have written amendments.
  The only time we wrote an amendment that kind of restricted our 
activity was prohibition, and it was soon canceled. It is a wonderful 
prescription for how a society should function, preserving individual 
rights and making sure that the freedoms as much as possible are 
extended to every citizen in our country.
  So I just felt like I had to respond. No one worked harder than the 
man on my right, the distinguished chairman of the Budget Committee, 
Senator Domenici. I didn't always agree with him, but nobody worked 
harder, and no one assembled a more honest attempt to do it in a 
bipartisan fashion. There were things that he wanted that we on my side 
of the aisle didn't want. But he was willing to explain them and 
willing to take a deep breath when necessary not to fight them. I have 
gained great respect for him, as well as personal affection, honestly.
  Mr. President, I just want to change the tone for a minute, and let 
off a little steam and say that I hope we will move on to pass this 
document into law and make sure that everybody understands there was a 
good attempt by everybody working in this place to get it done with, to 
get on with the task that we have a very good start on because of the 
shape of the deficit that we see now.
  So, Mr. President, I yield the floor. I know the Senator from New 
Mexico has a UC that he would like to propose. I hope that we will have 
a chance to hear that.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I note the presence on the floor of the 
junior Senator from Oregon. Might I ask, did he desire to speak on the 
budget?
  Mr. WYDEN. On the budget.
  Mr. DOMENICI. I wonder if I could propose a UC regarding the budget. 
When I am finished I will try to work in an exception for him.
  How long does the Senator desire to speak?
  Mr. WYDEN. Fifteen or twenty or minutes would be plenty.


                      Unanimous-Consent Agreement

  Mr. DOMENICI. Mr. President, I ask unanimous consent that the Senate 
resume the pending conference report at 9:15 a.m., Thursday, and that 
the remaining hour be equally divided between the chairman and the 
ranking minority member of the Budget Committee; and that, at 10:15 
a.m., the Senate proceed to vote on adoption of the conference report 
without any intervening action. I further ask consent that this evening 
Senator Wyden of the State of Oregon be allowed 15 or 20 minutes on the 
bill after which we will be finished for the evening.
  Is that satisfactory with the Senator?
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. DOMENICI. Mr. President, there will be no further votes tonight.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon is recognized.
  Mr. WYDEN. Thank you, Mr. President.
  Mr. President, first, let me say to my good friend, Senator Domenici, 
the chairman of the Budget Committee, I just want him to know how much 
I have appreciated the chance to be a member of his committee. I think 
this is a historic occasion and a chance to work very closely with him 
on a variety of issues. Coming to the Senate has been a special 
pleasure.
  I also want to commend our good friend, Senator Lautenberg of New 
Jersey, who in my view has done yeomen work in terms of keeping this 
whole effort together and keeping it bipartisan.
  Mr. President, the balanced budget agreement that will be passed this 
week has been a long time in coming. I think our challenge is to now 
make sure that actually getting a balanced budget takes a shorter 
period of time.
  I do believe that we are finally on the right track because this 
budget provides an opportunity for the Federal Government to get its 
fiscal house in order while still making a handful of extremely needed 
investments in the people of our country and in U.S. productivity.
  Most importantly, I am of the view that this is a historic moment 
because it has been achieved by working together. If ever there was an 
issue that required bipartisan cooperation, this is it. It seems to me 
that this is an example of what can happen when you put down for just a 
few moments the political cudgel and focus on the needs of our country 
first.
  Let me also say that I would like to make a special effort in the 
days ahead to address the Medicare provision of this legislation. In my 
view, in the 21st century, Medicare is not just going to be a part of 
the Federal budget; it is going to be the Federal budget. There is no 
program in America growing at the rate of Medicare. I think it is well 
understood that in the 21st century our country will be faced with a 
demographic tsunami. We are going to have upwards of 50 million baby 
boomers retiring, and it is quite clear that efforts must be made now 
to modernize Medicare and get this program ready for the 21st century.
  I sought to begin those efforts by introducing S. 386, the Medicare 
Modernization and Patient Protection Act, in the spring. And the 
fundamental principle of that legislation was to make sure that 
Medicare began to introduce the kind of competition and choice and 
emphasis on quality for older people that is available in private 
sector health care.
  What we are seeing in our country today is that Medicare has 
essentially been engaging in purchasing practices and management 
practices that the private sector threw in the attic years and years 
ago. In much of the United States, Medicare has been rewarding waste 
and penalizing efficiency, and we all saw that emphasized again this 
week when the Inspector General of the United States indicated that 
more than $20 billion is lost each year in the Medicare Program due to 
fraud and waste.
  The issue of inefficiency and the rewards for waste that you see in 
the Medicare Program are particularly important to those I represent at 
home in Oregon. We have gone a long way to reinventing the health care 
system in our State, particularly in the metropolitan areas. We have 
competition. We have extensive choice for older people. We do not have 
the gag clauses in the managed care plans where physicians are 
restricted from telling older people about their options. We have done 
a lot to come up with a health plan for seniors that will be good for 
older people and taxpayers in the 21st century.
  The reward to Oregon for doing the heavy lifting to reform Medicare 
over the last few years has been lower reimbursement collection. In 
effect, what the Federal Government told the people of Oregon over the 
last 10 years is you would have gotten higher reimbursement, you would 
have received higher payments, if you had gone about the process of 
offering wasteful, inefficient health care. And so what happens in much 
of my State, an older person, say, in the Klamath Valley will call 
their cousin or their sister in another part of the United States and 
ask them about their Medicare. And a senior in another part of the 
country where health care isn't provided so efficiently will say to the 
Oregonian, you know, my Medicare is great; I get prescription drugs for 
free; I get eyeglasses at a discount; I get all these extras that are 
not covered by Medicare.
  Seniors in Oregon and other States where health services have been 
efficient say, I pay the same into Medicare as seniors in those States. 
Why don't I get the same benefits?
  Medicare is a national program. Why shouldn't the senior in Oregon 
get the

[[Page S8353]]

same benefits as the senior in another State, which on top of 
everything else is offering care that is more costly and inefficient?
  The reason for this bizarre situation is a very technical 
reimbursement system, an eye-glazing concept known as the average 
adjusted per capita cost. And the long and short of it is that it 
rewards waste, penalizes efficiency and in parts of the country like 
mine has meant that many of the health programs have difficulty even 
providing the basic benefits to older people let alone some of the 
additional benefits such as prescription drugs.
  Under this legislation, because of exceptional bipartisan work--and 
here I want to particularly commend Senator Grassley of Iowa, the 
chairman of our Aging Committee, who has worked very closely with me, 
for his perseverance in correcting this inequity. As a result of the 
work of our bipartisan coalition, this reimbursement system is going to 
change. We will see all counties in our country get a minimum payment 
for these health care plans that are holding costs down while giving 
good quality, and over a period of time there will be a blending of 
reimbursement rates to consider both local reimbursement patterns and 
national patterns.
  What this means is that areas like Oregon that have held costs down 
while giving good quality will get higher reimbursement, and my 
constituents, older people, are pleased because they will be in a 
position to get better benefits. But what is especially important is 
this is the kind of reimbursement change that is essential to save this 
program in the 21st century.
  I would submit that what will happen as a result of the bipartisan 
work to change the Medicare reimbursement process--Senator Grassley, 
myself, and others have spent so much time--is we will start seeing 
competition and choice come to health care programs in parts of the 
country where there is no competition and there is no choice. So we are 
talking about a change that, in my view, is going to really pay off for 
our country and pay off greatly in the years ahead.
  Mr. President, I want to turn very briefly to the question of the 
other changes in Medicare that the Senate has debated and we are going 
to have to tackle in the days ahead. Particularly now I turn to the 
question of raising the age of eligibility for the Medicare Program and 
the question of a means test or some sort of ability-to-pay test being 
incorporated into Medicare.
  I have long felt that Lee Iacocca ought to be paying more for his 
Medicare than should an older woman who is 75 and has Alzheimer's and 
has an income of $10,000 a year. So I think it is clear there is going 
to have to be an ability-to-pay feature added to the Medicare Program. 
But it is extraordinarily important that this be done right and that 
this be done carefully. I and other Members of the Senate felt that to 
try to do this over just a few months with so many questions about how 
this would be administered was precipitous action. But it must be done. 
Let us make no mistake about it. That change is going to have to be a 
part of 21st century Medicare. It has to be done fairly. My 
constituents were concerned that at a time when already they did not 
get a fair shake under the Medicare reimbursement formula, they were 
going to be asked to pay more immediately under Medicare.

  So there are some real questions about how to do this and do it 
fairly. But I want it understood I am of the view that there will have 
to be an essential change, and I am very hopeful the Senate will not 
wait for a bipartisan commission to make recommendations but with the 
completion of this legislation will start on that issue as well.
  With respect to the question of the age of eligibility for the 
program, here, too, there are very important technical questions of how 
it is done and how it is done fairly. There have been a number of 
analyses of late that have shown there is a significant increase in the 
number of uninsured Americans between the age of 55 to 64. So if that 
group of uninsured individuals is growing, to then add more, those 
between the ages of 65 and 67, would cause a hardship. So what I and 
others hope will be done as this effort to examine the age of 
eligibility is addressed is that there will be a buy-in opportunity, an 
opportunity for those individuals without insurance in that age group 
to be able to buy into the Medicare Program on a sliding scale.
  Again, I think this is an opportunity the Senate ought to examine 
carefully, ought to look at in a bipartisan way, and not wait for a 
commission to make recommendations as to how it ought to be done.
  Finally, Mr. President, let me say that as these significant changes 
in Medicare are made, beginning with the reimbursement formula changes 
that are being made now, changes that will bring fairness and 
competition and choice to the program, at every step of the way we have 
to keep the focus on protecting the rights of the patient. In this body 
Senators Akaka, Kennedy, and myself have led the push to ban gag 
clauses from managed care health plans. Health care is a complicated 
issue, we could all agree. But one issue we all should agree on is that 
patients have a right to know all the information about the kind of 
medical services and options that would be made available to them.
  Under this legislation, that significant protection for patients is 
in place and I think it is just the beginning of the kind of new focus 
that should be placed on patients' rights and the protection of quality 
health care which older people deserve. At a time when the health care 
system and Medicare specifically are in transition, protection for the 
rights of the patients is even more important than ever. At a time when 
there is a focus on more competition and choice, it ought to be met 
with an equal emphasis of protecting the rights of the patients, and 
that has begun in this legislation as well.
  Mr. President, I come from a part of the country that is proud to 
have led the Nation in the cause of health care reform and efficiency. 
Under the leadership of our Governor, Gov. John Kitzhaber, we have 
reinvented the Medicaid Program with the Oregon Health Plan.
  For more than a decade, as a result of work done by Democrats and 
Republicans and older people and health care professionals, we have 
reinvented the Medicare Program in much of our State. So there is a new 
emphasis on choice and quality. What this legislation does is it 
removes the penalties against those programs that have been creative, 
those programs that have led the Nation in reforming Medicare and 
Medicaid. It is high time that those changes are made.
  Mr. President, I think those changes lay the foundation for the other 
critical changes that are going to be needed to strengthen health care 
services in the days ahead. I look forward to working with our 
colleagues on a bipartisan basis to achieve those changes.
  Mr. President, I yield the floor.
  Mr. SANTORUM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SANTORUM. Mr. President, I ask unanimous consent I may speak for 
10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SANTORUM. I thank the Chair.
  Mr. President, I wanted to make a couple of comments also on the 
budget bill that we have before us here this evening and that we will 
be voting on, I guess, tomorrow morning.
  I come here excited in a sense that we are finally doing something 
that when I first ran for office back in 1990 I pledged to do, which 
was to come here and try to balance the Federal budget. Not to put 
schemes out there that say, well, we will target this and we will 
adjust to this number when we get there, but actually pass a law that 
will get us there without Congress having to do one more thing.
  I think that is what we have accomplished here in this legislation. 
We will pass the changes, the needed reforms, in the entitlement 
programs that will get us to a balanced budget, that will save an 
estimated $270 billion over the next 5 years, will require no further 
Federal action other than just passing our appropriations bills under 
the limits we have set, and we do a pretty good job at that. If there 
is anything I can say Congress has done in the past few years it is 
that we have kept to the budget caps. I do not anticipate that being a 
problem. In fact, I think many of us would advocate trying to come in 
below those caps. So I think this bill

[[Page S8354]]

will accomplish what we set out to do, balance the budget by 2002. And 
hopefully, if we do not have any kind of major recession, we will be 
able to balance it sooner than 2002.
  So, I am very excited about that. We have been able to face that 
problem, and we have been able to deal with it in a responsible 
fashion.
  I must admit, though, that I am somewhat disappointed at some of the 
things we did not accomplish here that we, in fact, passed in the 
Senate bill. We took, I think, some courageous political stances here 
in the U.S. Senate in dealing with the issue of Medicare. The Senator 
from Oregon was talking about that just a few minutes ago, some of the 
changes that were not made that he believed in. In fact, some of them, 
even though I notice he didn't support them, need to be made.
  Senator Gramm, during the debate here on the budget last month, 
talked about the demographic cliff that we are going to fall off in the 
year 2011. I share that with you again this evening. In the year 1995, 
in fact for the years pretty much throughout the 1990's, roughly 
200,000 people will turn 65 per year--200,000 people. In the year 2011, 
1.6 million people will turn 65. That is just a cliff. That is 1.6 
million people going into a system, no longer paying into that system, 
into a system that today cannot absorb 200,000 a year. It is going 
bankrupt absorbing 200,000. We are asking that same system, that same 
program, to now absorb eight times the number, and that is not just a 
blip. It is not 1.6 million in the year 2011 and then back down to 
200,000. No; it's 1.6 million and then it levels off to about 1.5 
million a year throughout the years of the baby boom generation and 
their retirement.
  It has been estimated that if we don't change Medicare and Social 
Security in the next few years, the payroll tax will double within a 
generation. That is from 15 percent of every dollar that is earned in 
America up to $60,000 for Social Security tax and 1.45--actually 3 
percent if you take the employee and employer share for every other 
dollar, irrespective of income. We are going to have to double that 
payroll tax. That's an optimistic projection. Pessimistically, we will 
have to triple the tax if we keep Medicare and Social Security just the 
way they are.
  So, to the people who run around and say, ``We don't need to fix 
Medicare now, we don't need to fix Social Security now, everything is 
fine; those people who want to change Medicare and Social Security are 
just out to get the elderly,'' I would just suggest this: Anybody who 
is not talking about long-term structural changes to those two programs 
is out to get the elderly who are yet to be elderly, who are waiting to 
be elderly, because those are the folks who are going to pay--and big. 
I think it is only fair that we spread this out a little bit and we 
begin to make changes now.
  The two major things I wanted to see done that were not done were, 
No. 1, as the Senator from Oregon talked about, means testing part B 
benefits. This is a chip shot. I mean, this is a layup. I can't think 
of any other term. This is an easy one. This affected about 4 percent 
of the population of seniors in this country who were the highest 
income-earning seniors. What were we going to do? For Medicare, part A, 
part B--there are two parts to Medicare. Part A is hospitalization, 
major medical; part B covers some of the other things. It is a 
voluntary program. It covers some outpatient, labs, doctors, things 
like that. It's a voluntary insurance program. You don't pay one penny 
into Medicare part B over the course of your earnings before you turn 
65. But when you turn 65 you can opt into this, in a sense, public 
insurance program. It is voluntary. If you choose to get into part B, 
you pay a premium. It is about $45 a month.
  That $45 only covers 25 percent of the cost of the program. Who picks 
up the other 75 percent? Mr. and Mrs. Taxpayer. That's fine if you are 
a senior who needs subsidies from the Federal Government to be able to 
afford insurance, but in my mind it's not fine to give a subsidy to 
people who don't need a subsidy. I am not someone who comes to the 
floor on many occasions and talks about class warfare. I don't believe 
in that. I don't believe in a lot of the arguments that the rich don't 
pay their fair share. I think a lot of it is just hooey, and in fact 
class warfare.
  What we are talking about here is we are talking about subsidizing 
people at a higher income. I am not for that. I am not for taxing them 
more, but I am not for subsidizing them, either. So, to the extent that 
we subsidize, we said, ``Look, if you are earning over $70,000 as a 
couple, you are going to pay a little bit more for your Medicare part B 
premium.'' It's still a good deal. It's a pretty big group, and you get 
a nice group rate.
  We should have done that in this bill. I can tell you, I have been to 
senior center after senior center after senior center, and I have 
gotten up and I talked about this. I have never heard an objection. No 
one has ever objected to this. They thought that's pretty reasonable. 
We should not be subsidizing Ross Perot in his Medicare part B premium. 
It's crazy. He doesn't need it. Most of these people don't need it, and 
they probably wouldn't want it if they realized what it was costing the 
Federal Government to do it and what it was costing their children and 
grandchildren. So that's one of the things we missed, in my opinion. 
It's unfortunate.
  The second--I know this is a tougher issue--and that is raising the 
eligibility age for Social Security. I know this is not a very popular 
issue, but I can tell you we got 62 votes here in the U.S. Senate, I 
will say very proudly, in a bipartisan vote. The eligibility age for 
Social Security, to be able to qualify for full Social Security 
benefits, is going up. Most people in this country don't know that, but 
it is. It is going up. In 1983, when they passed the Social Security 
reform, they did a couple of things. They raised taxes and they raised 
the eligibility age from 65 to 67. They didn't start doing it, though, 
for 20 years. The first people who turn 65 who are going to be affected 
by this raise in the eligibility age are people who retire in the year 
2003, 20 years after the bill passed.
  You will hear the people who were here in the Congress who said, ``We 
waited 20 years to enact this so people could prepare for this time.'' 
It is funny, because I talked to a lot of people who are planning to 
retire who are about that age, in their fifties right now, who are 
going to be retiring, late fifties, retiring in 2003. Most of them 
don't know the retirement age is being moved back. I talked to most 
younger people, and they have no idea the retirement age is being moved 
back. These people, as far as I am concerned, who passed this thing in 
1983 and put it off 20 years, put it off 20 years because they will be 
gone in 20 years, most of them, and so they won't have to take the 
wrath of the American public, if there is going to be some. I hope 
there will not be, once they understand the problem of having to deal 
with the issue. I think we should deal with the issue now.
  We should tie the Medicare eligibility age to Social Security, which 
phases up over a 20-year period. It doesn't hit 67 as a retirement age 
until the year 2025. We should tie the two together, because most 
people, most lower and middle income people, are not going to be able 
to retire prior to being eligible for Social Security, so there should 
not be much of a problem with tying in Medicare because they are going 
to retire when they hit the retirement age for Social Security. That 
will also be the retirement age, in a sense eligibility age, for 
Medicare.
  For those who can afford to retire sooner, they probably are more 
well off, by and large, or they may have a disability. But in that case 
they qualify for Government benefits through disability. But, for those 
who are more well off, then we should create an option for them to buy 
in at age 65, they can buy into Medicare if they can't continue their 
private insurance.
  There was a way to work this out that I think would have been, again, 
the right thing to do for the long term for Medicare. If you really 
care about providing a health safety net for the future, those were two 
things that were really missed opportunities. It is unfortunate we 
missed them.
  I will say, overall, we have taken a positive step here. I think we 
missed an opportunity to do something really lasting, really 
significant. We stood up and made a courageous vote, a vote that, 
frankly--if Members would go out and take the time to talk to people 
and explain the demographic problems that we have, the fact that people 
are living substantially longer and they are substantially healthier, 
that these kinds

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of changes only make sense to make sure that future generations have 
these retirement security programs like Medicare and Social Security to 
rely on for the future.
  So, I am disappointed that we blinked, the White House was not 
supportive, and frankly our colleagues in the House were not 
supportive. I think that is unfortunate for both of those entities. I 
stand with particular pride at the U.S. Senate, that it had the courage 
to look ahead, to not make decisions just based on short-term fixes. 
Frankly, the Medicare provision here is a short-term fix. We had long-
term fixes in the Senate bill and we didn't follow through, and I think 
that is unfortunate.
  We did do a lot of other positive things in this bill, and I will 
support it as a result of that. But I think this piece of legislation, 
given what the Senate did in their courageous action by going out on 
Medicare and setting the course, missed a tremendous opportunity.
  One final comment. There is an additional concern I have about a 
provision in the welfare bill. There is welfare reform--or, in my 
opinion some of it is a backtracking on reform from the last bill. We 
have some positive things in this bill with respect to work, but we 
also have a provision in there that is very worrisome for me, as far as 
the ability for work programs, workfare, to work in the States. This 
gives the President and the Department of Labor the opportunity to 
designate people on workfare in an employment setting as workers 
covered by the Fair Labor Standards Act, the minimum wage laws, and all 
the other laws that apply to all other employees. The problem with that 
is that you get into a whole host of complex things that drive up 
significantly the cost of providing a work slot for someone on welfare.
  If you believe, as I do, that the most important thing for most of 
the people on welfare today is to get them into the workplace, to teach 
them the value of work, to give them the sense of pride which so many 
millions of Americans for the first time are feeling now, to get off 
the welfare rolls and get them into the workplace where they are doing 
positive works, where they are getting positive reinforcement for the 
things that they are accomplishing, where they are learning the ability 
to get up, get their children off to school or to day care or to a 
relative and get to work, keep those hours, work hard and come back 
home and manage their life--those are important life skills. If we put 
the barrier too high for the States, we are going to limit the number 
of work spots available for, really, millions of people and, I think, 
destroy a lot of the tremendous progress that we have made in creating 
an environment under this welfare reform bill that we passed last year 
for people to rise out of poverty, to get the kind of experience 
necessary to get the sense of accomplishment and self-pride that is 
necessary to rise out of poverty.
  I am very concerned about that. I hope the administration does not 
pull the trigger. They are getting immense pressure from the unions to 
do so because the unions want to protect their piece of the pie when it 
comes, particularly to the public sector spots that will be filled in 
some cases by welfare recipients.
  So, I hope the President does not bow to the unions at the expense of 
millions of people who want to get out of welfare and who need these 
work opportunities to be able to do so.

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