[Congressional Record Volume 143, Number 111 (Thursday, July 31, 1997)]
[Senate]
[Pages S8493-S8498]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 CONFERENCE AGREEMENTS ON H.R. 2015 AND H.R. 2014, THE BALANCED BUDGET 
                        AND TAXPAYER RELIEF ACTS

  Mr. McCAIN. Mr. President, I congratulate our leader, Senator 
Domenici, Senator Roth, our colleagues in the House, our colleagues in 
the other party, and all those who worked so diligently to hammer out 
the details of these agreements. I admit that I was somewhat skeptical 
that the Congress and the Clinton administration could come to an 
agreement on these two very important bills. While I have some concerns 
about certain aspects of these measures, I am pleased to be able to 
support the legislation.
  These two bills will put our Nation back on the road to Federal 
responsibility. The Balanced Budget Act will reduce Federal spending by 
$270 billion over the next 5 years, eliminating our annual deficits and 
resulting in a balanced budget by the year 2002. At the same time, we 
are providing $96 billion in much-needed tax relief over the next 5 
years.
  Mr. President, our Founding Fathers recognized the basic principle 
that the Federal Government must not spend beyond its means. Thomas 
Jefferson said, ``We should consider ourselves unauthorized to saddle 
posterity with our debts, and morally bound to pay them ourselves.'' 
Unfortunately, we have strayed far from Mr. Jefferson's wise advice.
  Today, our Nation is burdened with a national debt in excess of $5.3 
trillion--or about $20,000 for every man, woman, and child in America. 
Our debt is still growing by about $4,500 per second--about the same 
amount it would cost to send three people to a community college.
  Although Congress has talked endlessly about balancing the budget, 
the budget has not been balanced since 1969. We--the Congress and the 
President--have ignored our responsibility to put our fiscal house in 
order, choosing instead to leave future generations of Americans with 
an overwhelming legacy of debt.
  Because Federal spending has been out of control, the American people 
have been saddled with an unconscionable tax burden. In 1960, Americans 
paid approximately one dollar in taxes for every $50 they earned. 
Today, one out of every three dollars goes to the tax man. These 
confiscatory tax policies are blatantly unfair to those who work hard 
to provide for their families.
  The Balanced Budget Act reduces Medicare and Medicaid spending 
without reducing benefits, provides $24 billion for children's health 
initiatives, and mandates savings in other Federal programs. It also 
provides for effective enforcement of the discretionary spending 
limitations necessary to balance the budget by 2002.
  The Taxpayer Relief Act will ease the unconscionable burden on 
American taxpayers by reducing estate and capital gains taxes, 
providing a $500 tax credit for children, and providing more 
flexibility in Individual Retirement Accounts. Small businesses will 
gain tax relief by restoring the deductibility of home office expenses 
and self-employed health insurance costs. These and other provisions 
will allow Americans to keep more of the their hard-earned dollars, 
rather than turning them over to pay for a bloated Federal bureaucracy.
  The American people have waited a long time for deficit reduction and 
tax relief. With this legislation, we are showing the American people 
that we take our duties seriously, and I am pleased to support these 
bills.
  Mr. President, there are several matters contained in these bills 
that I would like to discuss at greater length, some good and some not 
so good.


                           amtrak tax credit

  Mr. President, I wish to remark on the conference agreement provision 
giving $4.3 billion to Amtrak under the guise of so-called ``tax 
relief.'' Given that Amtrak is exempt from most Federal tax burdens, 
this scheme represents the greatest train robbery since the James 
Brothers retired.
  How we can give a corporate tax refund to a quasi-governmental 
corporation that has NEVER paid Federal corporate income taxes defies 
imagination. It's too bad the American taxpayers aren't so favorably 
treated. I think every taxpayer would like the chance to receive a tax 
refund they aren't legally owed. Of all the charades I have seen over 
the years, this Amtrak ``special'' tax provision takes the cake.
  I want the public to be aware, this bill contains $2.3 billion for 
Amtrak to be doled out over two years not subject to appropriation or 
congressional oversight. This is the same outfit that has drained $20 
billion from the Federal Treasury to serve a small percentage of 
commuters in the northeast.
  This windfall would be accomplished through a far fetched tax scheme 
that

[[Page S8494]]

will give Amtrak tax credits for the operating losses incurred by 
freight railroads. The provision instructs the Internal Revenue Service 
to sift back through the tax returns of the freight railroads and 
determine the losses they incurred from their passenger service from 
1917 to 1971, before Amtrak ever existed. Those losses, which no one 
can quantify today, will then be provided to Amtrak in the form of $2.3 
billion in tax credits.
  Mr. President, give me a break. Are we supposed to be fooled by this? 
If we're going to permit a giveaway to Amtrak let's just be straight 
with the American people. Let's not insult them with this bogus 
charade. It's a mockery of our tax policy and an insult to the public.
  Why didn't the conferees simply give $2.3 billion to Amtrak, without 
all the machinations? Because proponents of this provision know that if 
funding were subject to appropriations, which is the normal process, 
Congress wouldn't fund it because its simply not our top transportation 
priority. So, we're supposed to buy this ludicrous notion that Amtrak 
is owed a tax refund on taxes they never paid. To think that anyone is 
supposed to buy such a fairy tale strains the imagination, and adds to 
the cynicism about how Congress operates.
  Let me take a moment to recap how we got to this novel provision. As 
my colleagues remember, the Senate-passed tax reconciliation bill 
included an Amtrak funding provision touted by its sponsors as a half 
penny for Amtrak. But the truth is that new money--some $2.3 billion in 
new Federal subsidies--came at the expense of the tax cut promised to 
the American people as part of the balanced budget agreement negotiated 
by the Administration and the Congress.
  During the Senate floor debate, I strongly objected to that 
provision. I also urged the conferees to reconsider the fiscal 
ramifications of funneling such money to a system already losing more 
than $700 million annually and serving less than 1 percent of the 
traveling public. Unfortunately, the merits for sound Federal policies 
too often lose out to political will. That was the case during the 
original Senate debate and it is still the case today.
  Again, the conference agreement which we are considering today 
provides for a new and even more generous funding proposal for Amtrak--
one not previously considered by either the House or Senate. This 
proposal effectively provides more than $1 billion annually to Amtrak 
during the next two years rather than the approximately $700 million 
annual subsidy over three years. This new pot of gold for the 
bottomless pit known as Amtrak will not, let me repeat, will not, be 
subject to appropriations nor to Congressional oversight. Under the new 
proposal, the U.S. Treasury will be in charge.
  One has to question just how far Congress is willing to go in its 
quest to find funny-money for Amtrak. Today, Congress is telling the 
American public that they should believe there is some sort of 
justification for deeming Amtrak to have had operating losses prior to 
its existence. The American public is to believe Amtrak is entitled to 
a tax credit for losses dating all the way back to 1917, even though it 
wasn't created until 1971.
  What precedent does that set for our Federal tax policy? What type of 
signal does this send to private corporations and citizens on how the 
whimsy of Congress can retroactively recreate their tax histories? This 
proposed scheme is indefensible to the American public and sets an ill-
advised precedent.

  Mr. President, while I adamantly object to the tax credit scheme for 
Amtrak, I do what to note that at least one shred of responsibility 
remains in the bill with respect to Amtrak. It's small consolidation 
but the bill does link the disbursement of this unprecedented gift to 
the enactment of comprehensive Amtrak reform legislation.
  I would like to recognize Senator Hutchison for her leadership and 
tireless work to try to move true Amtrak reform legislation through 
this Congress. While reform legislation was not included in this bill, 
I am confident Senator Hutchison will continue her endeavors to bring 
legislation passed by the Commerce Committee to the full Senate. And 
finally, I would like to thank the Majority Leader for the many hours 
he devoted to resolving this and all the other provisions in this tax 
legislation.
  Before final passage of this bill, I look forward to entering into a 
colloquy with the Majority Leader and the Chairman of the Finance 
Committee regarding the linkage of Amtrak's access to this new windfall 
to the passage of a comprehensive reform bill. We will, in that 
colloquy, clarify that when we say a reform bill, that does not mean a 
couple of lines tucked into an appropriations bill or a rider making 
some cosmetic change to Amtrak. It means comprehensive, substantive 
meaningful, reform to ensure that Amtrak operates more efficiently and 
to set up a process that will protect taxpayers if Amtrak does not meet 
its financial goals.
  I say to my colleagues and to the public, watch very carefully. 
Meaning no disrespect to any member of this body, the same minds that 
devise schemes like ``tax credits'' for Amtrak will employ their 
creative powers to hatch clever ways of ``reforming'' Amtrak in order 
to release the money without Congress ever suspecting that's what we 
did.
  I hope that's not the next chapter in this charade. But, sadly, it 
wouldn't surprise me and I respectfully urge my colleagues--stay tuned.


                   communications and spectrum issues

  Mr. President, as one of the principal architects of Title III of the 
Balanced Budget Act, dealing with communications and spectrum 
allocations, I would like to briefly summarize its major provisions and 
give you my perspectives on several of them. I spoke briefly on this 
issue yesterday, but I wanted to make very clear my views on these 
important issues.
  This title is scored to achieve a total of $23.4 billion in budgetary 
savings by the year 2003. Of this amount, all but $3 billion would be 
brought in by spectrum auctions.
  This spectrum to be auctioned will be derived from several different 
sources. Some of it consists of analog broadcast TV channels that will 
be reclaimed from TV broadcasters as they move to their new digital TV 
channels. Ten channels of this TV spectrum located between Channels 60 
and 69 will be cleared of current users and reallocated for different 
uses ion an expedited basis. Of these ten channels, four--a total of 24 
megahertz of spectrum--will be reallocated for use by the nation's 
police, fire, and emergency medical personnel and essential public 
safety communications.
  As demonstrated at a Commerce Committee hearing earlier this year, 
public safety users have endured severe spectrum shortages over the 
course of the last decade. This spectrum shortage has hindered them 
from using advanced video and data transmission technologies, but it 
has had an even more devastating impact on their ability to communicate 
acceptably using current technology. As demonstrated in the recent 
tragedies in Oklahoma City and the World Trade Tower, public safety 
officials found they could not rely on their radio communications to 
reach individuals working at different places at the disaster scene.
  Reallocating this 24 megahertz to public safety will take a big step 
forward in remedying what has truly become a national disgrace. I am 
profoundly glad that in this budget agreement today we have 
acknowledged the debt we owe those whose job it is to protect our lives 
and property by giving them a resource that is badly needed and too 
long denied.
  The remaining 36 megahertz of spectrum in this band will be 
reallocated to other commercial uses and made available by auction. 
Clearing the band of incumbent low-power users to accelerate its 
availability for auction and to maximize its auction value will be 
furthered by a complementary provision of the bill that will allow the 
major incumbent low-power television licensees moved from this band to 
be accommodated in available spectrum below Channel 60. The bill also 
preserves the value of the spectrum below Channel 60, however, by 
stipulating that any such accommodation of qualifying low-power 
stations shall only be made if otherwise consistent with the FCC's 
digital table of allotments for those channels. This is a key provision 
in that it assures that we do not accommodate low-power stations, which 
are and will remain a secondary broadcast service, at the expense of 
possibly

[[Page S8495]]

disrupting the planned transition to digital television that will free 
up the broadcasters' analog broadcast channels for auction in the 
future.
  The bill provides that the remaining analog TV channels below Channel 
60 will be auctioned in the year 2002, notwithstanding the fact that 
they will not be turned back and available for use until December 31, 
2006 at the earliest. I say ``at the earliest,'' Mr. President, because 
it is important to note that the bill contains several specified 
circumstances under which the FCC may extend this date for stations in 
individual television markets. Generally stated, the FCC may extend the 
date under any of these circumstances: first, if one of the market 
stations affiliated with one of the four largest national television 
networks is not broadcasting a digital signal, and that failure is not 
for lack of due diligences; second, that digital-to-analog converter 
technology isn't generally available in the market; or third, if more 
than 15 percent of the television households in the market do not 
subscribe to a multichannel digital program service that carries the 
local signals, do not have a digital television receiver, and do not 
have at least one analog TV receiver equipped with a digital-to-analog 
converter.
  Mr. President, this waiver standard is a compromise between the 
original provision in the House bill, which was so liberal it 
potentially would have caused the analog broadcast channels to never 
have had to have been returned for auction, and the Senate version, 
which was more rigorous in that it would have required the return of 
analog channels given the general availability to consumers of other 
means of receiving digital signals.
  I would clearly prefer the more rigorous test. In saying this, I am 
not giving short shrift to the interests of TV viewers in my desire to 
have some reasonable assurance that the government may reclaim this 
extraordinarily valuable analog TV spectrum by a specified date and 
auction it to help defray the deficit. Rather, I agree with 
organizations like Consumer Federation of America, Consumers Union, 
Public Citizen and the National Taxpayers Union, all of whom favor a 
hard-and-fast analog channel turnback date of 2006 and all of whom say 
that the consumer electronics industry is being perfectly realistic in 
its projections that digital-to-analog converter technology will, in 
fact, be generally available by the year 2006 at a cost comparable to, 
or less than, the cost of the cheapest black-and-white TV sets today.
  So, Mr. President, when it comes to the bill's provisions on the 
analog channel turnback date, I fear we have inadvisedly undercut the 
value this spectrum might otherwise bring at auction by including a 
waiver standard in this bill that unnecessarily signals to bidders in 
2002 that the spectrum they're bidding on may not become available on 
any definitive date.
  The only way to remedy this problem, Mr. President, is to expand the 
pool of bidders who, notwithstanding this uncertainty, have a 
particular incentive, plus substantial financial resources, to bid on 
this spectrum anyway. The bill does this in an innovative but careful 
fashion by waiving otherwise-applicable FCC ownership restrictions to 
allow television licensees and newspaper owners in cities having a 
population of over 400,000 to bid on this spectrum and use it for 
whatever use the FCC finds it to be suitable, including television.
  The infusion of capital these multibillion-dollar mass media players 
will bring to the analog auctions in these markets will be substantial. 
And yet, Mr. President, our bedrock concern over assuring a diversity 
of mass media viewpoints will not be compromised in any significant 
way.
  I say this because this waiver is limited in scope, applying only to 
stations and newspapers in our 33 largest cities. In the smallest of 
these large cities--which happens to be Tucson, by the way--there are 
over forty broadcast stations. The largest city in terms of number of 
broadcast outlets, Los Angeles, has 72 radio and TV stations. In 
thinking about diversity in today's world, we also need to remember the 
role cable television and the Internet now play in giving people 
instant access to a variety of sources of news and information 
unimaginable when the FCC first developed these ownership restrictions 
decades ago.
  So, Mr. President, this provision will re-infuse into the analog 
auctions capital we may have otherwise drained by our provisions for 
waiving the analog turnback date, and it will do this only in those 
places where the positive effect on auction values can be expected to 
be greatest while, at the same time, the tremendous diversity of 
information sources available today assures that consumers will suffer 
no meaningful loss of viewpoints as a result.
  One final category of new broadcast spectrum auctions should be 
mentioned. This bill would revoke the FCC's authority to use lotteries 
to select the licensees of new commercial radio and television stations 
where there is more than one mutually-exclusive applicant, and instead 
provides for the use of auctions.
  This measure, Mr. President, is not designed to raise revenues, 
although it will unquestionably do so; but rather to provide a 
straightforward and sensible alternative to the FCC's old, time-
consuming comparative hearing process. In addition to the length of 
time this process took to ultimately determine which party would get 
the license--oftentimes years--the application of the convoluted system 
of comparative criteria often selected winners based on essentially 
meaningless differences between the applicants. Not surprisingly, this 
approach was essentially struck down by the court several years ago. 
Auctions will provide an efficient way to dispose of the many hundreds 
of cases that have stacked up undecided since the court's decision, and 
provide a similarly efficient way of selecting licensees in the future. 
Those applicants who have applications pending before the Commission 
will be given a special period of 180 days in which to settle their 
applications and avoid auctions. In view of the different circumstances 
pertaining where multiple applicants for noncommercial educational 
stations are involved, the FCC may use lotteries to select licensees 
for such stations.
  So much for analog television spectrum, Mr. President. In addition to 
all this spectrum, the bill also provides for the accelerated auction 
during the out-years of 45 megahertz of spectrum previously identified 
for this purpose by NTIA and the FCC. The bill further tasks NTIA and 
FCC to cause 75 more megahertz of spectrum, 55 of which is specifically 
identified in the bill, to be reallocated from its current shared or 
exclusive government use and made available for auction. Concerns over 
the possible inability to find suitable substitute spectrum for 
incumbent users are mitigated, and the auction revenues preserved, by 
further provisions enabling the President to nominate spectrum for 
reallocation other than the bands specified in the bill if these 
substitute bands can be shown to bring comparable auction revenue. 
Further enhancing the likely value of this reallocated government 
spectrum at auction are complementary provisions authorizing private 
suers to reimburse incumbent federal government licensees in these 
bands for the cost of moving to their new spectrum bands on an 
expedited basis.
  In addition, the bill contains several provisions designed to enhance 
the revenues spectrum auctions will bring in by improving the auction 
process itself. Specifically, the bill would require the FCC to test 
contingent combinatorial auction bidding, a system which many believe 
helps bidders optimize their bidding strategy and thereby increases 
auction proceeds. It also requires the FCC to allow sufficient time 
prior to an auction to develop and promulgate auction rules that 
potential bidders can have an opportunity to factor into their bidding 
and business strategies. It also requires the FCC to establish reserve 
prices and minimum bids. Finally, it eliminates the entrepreneurial 
uncertainty, and consequent lessened auction revenues, that is caused 
when spectrum is allocated for any and all unspecified uses. It does 
this by stating certain, limiting conditions and procedures under which 
the FCC will be permitted to allocated spectrum for flexible use in the 
future. Collectively these provisions should result in increased 
revenue from spectrum auctions.
  This brings me, Mr. President, to one final provision of the bill 
intended to bring in an additional $3 billion: namely, the stratagem 
whereby $3 billion is

[[Page S8496]]

shifted between the Treasury and the universal service fund in such a 
way that it appears that $3 billion in new revenue will be deposited in 
the Treasury in fiscal year 2002. This provision, which has been 
foisted on us by the Administration and its Office of Management and 
Budget, is nothing more than a contrivance designed to make it appear 
that a $3 billion budget deficit has been plugged, when all that will 
really happen is that the fund will pay back to the Treasury precisely 
the amount that the Treasury will first have given the fund. It's a 
disingenuous and dangerous policy to pursue, and one I intend to 
examine critically in Commerce Committee hearings in September.
  In the meantime, the important thing to stress is that the telephone 
industry universal service fund will not lose a dime. And because 
telephone companies' payments into the fund are rescheduled, the amount 
of money they ultimately pay in will not be affected, and this should 
assure that telephone bills won't go up either, at least for this 
reason.
  Nevertheless, Mr. President, let's be plain: a scam is a scam is a 
scam, and we should not condone scams, even those that don't appear to 
actually hurt anything. But I suggest that the better remedy is to pass 
legislation that will not only address this particular scam, but also 
make sure that others like it won't be foisted on us again. The 
Commerce Committee will address this in September, to guarantee the 
integrity of the universal service fund and the continuity of the 
essential telecommunications services subsidized it.
  This brings me to more fundamental concerns I have with the bill--
concerns I have stated before, but concerns that must be stated once 
more. I have not believed, and I remain unconvinced, that the spectrum 
auctions provided for in the bill will generate anywhere near the $21.4 
billion that CBO estimates they will. I believe this is too much 
spectrum to put on the market in too compressed a timeframe. 75 percent 
of the revenues estimated to be generated is to come from auctions held 
in the out-years of 2002 and 2003. Even under the best of 
circumstances, it is counterintuitive to think that flooding the market 
with spectrum in those years will not substantially depress its value.
  And these aren't even the best of circumstances, Mr. President. I 
have already alluded to the devaluation that will inevitably result 
from bidding on spectrum that is variously unavailable for a number of 
years after the auction or encumbered with existing users who must be 
relocated. But the bottom line is, the scoring process and the demand 
to bring the revenues in within the five-year budget balancing window 
have made better approaches impossible.
  None of this should be interpreted as an indirect way of saying that 
spectrum auctions are a failure. But I have advocated them as an 
efficient way of assigning spectrum licenses that allows the public, to 
whom the spectrum belongs, to realize the benefit of its market value. 
But it cannot be forgotten that spectrum auctions are not, and never 
were, intended to be a kind of ATM for Congress to run to every time it 
needs a certain amount of money. Like any auction, spectrum auctions 
are subject to unpredictable vagaries that cannot be forecast, much 
less satisfactorily defended against. For this reason, like any 
auction, spectrum auctions cannot be relied upon to produce any given 
amount of money. But despite this fact, Mr. President, that's exactly 
what you're banking on--and I do mean ``banking on'' in its literal 
sense--when you rely on spectrum auctions to wipe out a substantial 
chunk of the budget deficit by 2003.
  Let me just say that I do not think it likely that spectrum auctions 
will realize the $21.4 billion in revenue that has been estimated. 
Nevertheless, the bill we vote on today will at least set us on the 
road to achieving a balanced budget. For this reason, and despite my 
misgivings about the credibility of achieving the amount of budget 
savings we hope to achieve from this part of the package, I support the 
legislation.


                         medicare improvements

  The Balanced Budget Act contains important changes to the Medicare 
system which will strengthen the program and protect it for current and 
future beneficiaries. The bill preserves and protects the Medicare 
program, while increasing choice within the program and expanding 
benefits for beneficiaries. The Medicare Choice program created in this 
bill will allow seniors to select from a wide variety of options, 
including HMOs, PPOs, PSOs, and Private Fee-for-Service programs. In 
addition, the bill creates a Medical Savings Account demonstration 
program which will allow 390,000 beneficiaries to select a high-
deductible Medicare Choice plan.
  Key provisions of the bill will help eliminate waste and fraud in the 
Medicare system which could result in significant savings. Significant 
portions of the ``Medicare Whistleblower'' legislation which I 
introduced earlier this year are incorporated into the fraud prevention 
section of this bill. Seniors will now have the ability to request 
copies of their Medicare billing statements. In addition, seniors will 
be able to easily report suspected fraud and abuse in the system.
  Overall, the Medicare reforms in this plan will produce $115 billion 
in savings over the next five years, which protects the program for 
today's senior citizens and ensures Medicare will be available for 
future beneficiaries. In addition, the bill establishes a commission to 
study the Medicare system, with a mandate to make recommendations by 
March of 1999 on comprehensive reform of the program. I firmly believe 
that our priority must remain protecting the Medicare system from 
bankruptcy by the year 2001, and I believe that this bill is an 
important first step in working toward that goal.


                         children's health care

  The Balanced Budget Act provides $24 billion to improve access to 
health insurance for uninsured children in our country and put 
affordable health care insurance within the reach of every family. This 
new federal funding will allow states to expand Medicaid coverage or 
create innovative new programs which will address the specific health 
care needs of low-income children.
  Providing access to health care for uninsured children has been a 
priority for me since coming to the Senate. During the 103rd Congress, 
I offered legislation to address this problem, and I am pleased that we 
are able now to implement this new program for our nation's children.


                             welfare reform

  Last year, Congress made significant progress in reforming our 
welfare system when we passed the Personal Responsibility and Work 
Opportunity Reconciliation Act. This much-needed legislation is 
dramatically improving our nation's welfare system and reducing the 
costs of the system, by requiring able-bodied welfare recipients to 
work and encouraging individuals to become self-sufficient.
  However, the welfare reform law denied certain forms of public 
assistance to legal immigrants who were residing in this country prior 
to enactment of the legislation. At the time, I had concerns about the 
potentially disastrous impact this law would have on children, the 
disabled, and elderly legal immigrants who would lose vital support 
services such as Medicaid and Supplemental Security Income (SSI). I am 
pleased that this bill restores SSI eligibility for certain legal 
immigrants and refugees. In addition, children who are legal immigrants 
will be eligible for health insurance coverage as a part of the new, 
expanded health insurance coverage contained in this package. These 
provisions will provide necessary safeguards for these vulnerable 
populations as we continue implementing the new welfare law.


                           medicaid programs

  Five states, including Arizona, operate managed care Medicaid 
programs, through a Section 1115 waiver. Each of these states have 
expanded coverage to children and vulnerable uninsured people beyond 
the traditional Medicaid categories. They have been able to provide 
these expanded services by using their disproportionate share hospital 
(DSH) funds.
  I worked with my colleagues from the five affected states to protect 
the option to provide this expanded coverage. The Balanced Budget Act 
clarifies that states which use their DSH payments for Section 1115 
health care expansions would not be penalized by

[[Page S8497]]

the limitations being placed on DSH payments as a part of Medicaid 
reform in this bill. Our states will be able to continue providing 
innovative and cost effective health care coverage to otherwise 
uninsured populations.
  I am concerned, however, that the Medicaid reforms in this bill do 
not include several important provisions.
  The conferees eliminated an important provision contained in the 
Senate bill which would provide incentives for states to devise 
innovative ways to meet expanding demand for access to Medicaid-funded 
health care coverage. This provision would have authorized the 
continuation of a state's successful Section 1115 waiver program and 
allow the states to expand coverage using state resources. This 
provision would have lowered both state and federal costs of these 
programs, and allowed states to expand coverage to their most 
vulnerable populations. I am very disappointed that the conferees did 
not include it in the conference agreement.


                             school choice

  After the negotiations on the Balanced Budget Act were completed, 
President Clinton made a last-minute threat to veto the bill because it 
contained an innovative and important educational provision that he 
claimed would ``undermine public education''. This provision would have 
given parents the freedom to choose a school for their children based 
on their unique educational needs. Parents would have been able to 
withdraw funds from education savings accounts to pay tuition at the 
school of their choice--public, private or sectarian. I find it greatly 
disconcerting that President Clinton used the threat of a veto to force 
Congress to eliminate a provision which would have granted equal 
educational opportunity to all students.


               medicare subvention for military retirees

  I am pleased that the conferees retained the Senate provision to 
authorize a pilot program to demonstrate the cost-effectiveness of 
allowing Medicare reimbursement to military medical facilities that 
treat Medicare-eligible military retirees. This provision will 
significantly decrease costs to both the federal government and 
military retirees.
  The provision authorizes the Secretary of Defense and the Secretary 
of Health and Human Services to establish a demonstration project 
wherein the Secretary of HHS would reimburse the Secretary of Defense 
from the medicare trust funds for health care services furnished to 
medicare-eligible military retirees or dependents. The three-year 
project, beginning on January 1, 1998, is limited to six sites within 
the military TRICARE regions. The TRICARE enrollment fee would be 
waived for persons enrolled in the managed care option of TRICARE and 
the minimum benefits would include at least the Medicare benefits. The 
demonstration project is expected to cost $55 million in 1998, $65 
million in 1999, and $75 million in 2000.
  There are currently 1.3 million military retirees age 65 and older, 
about 97% of whom are eligible for Medicare. About 230,000 currently 
use military treatment facilities on a regular basis when space is 
available, at a cost of $1.2 million per year.
  The cost of providing health care to military retirees through 
civilian Medicare providers has been estimated to be significantly 
higher than the care that is provided at a military treatment facility. 
In fact, the Department of Defense (DOD) found that the cost of care at 
a military treatment facility is 10-24 percent less than that at a 
civilian facility. DOD has testified to the Congress that they would be 
able to enroll and treat more Medicare-eligible beneficiaries at a 
lower cost to the government.
  I am disappointed that the Senate provision to provide this critical 
medical benefit to our nation's veterans was not included in the 
conference agreement. I hope that this pilot program for military 
retirees will provide the impetus for legislation to extend the program 
to veterans.


                          pork-barrel spending

  I am sorry to say that the Balanced Budget Act does contain some 
earmarks and special interest provisions, although I am happy to report 
that there are very few in this bill.
  It is unconscionable that the Congress would have the audacity to 
protect special interests in this bill, when the money wasted could 
have been used to provide additional tax relief for working Americans, 
higher funding for children's health care, improved education programs, 
or just to reduce the deficit.
  I ask unanimous consent that the list of special interest items be 
printed in the Record.


                          debt limit increase

  Finally, Mr. President, I note with some dismay that the Balanced 
Budget Act increases the limit on the amount of debt the federal 
government can incur to $5.95 trillion. I just want to point out to my 
colleagues the irony of increasing the debt limit in a balanced budget 
act. Even as we pass this legislation to reduce federal spending by 
$270 billion over the next five years, we are forced to acknowledge 
that annual deficits will continue to add to our enormous national debt 
for several more years.


                               conclusion

  Mr. President, I hope that these two bills will provide the deficit 
reduction and tax relief promised to the American people. Certainly, it 
has not been possible to thoroughly analyze each provision of the 
legislation in the short time it has been available to Senators. If, 
however, we remain committed to the fiscal responsibility embodied in 
the Balanced Budget Act and the tax fairness of the Taxpayer Relief 
Act, the American people will soon reap the benefits of both lower 
taxes and a declining national debt.
  There being no objection, the list was ordered to be printed in the 
Record, as follows:

Objectionable Provisions in the Conference Agreement on H.R. 2015, The 
                          Balanced Budget Act


                             Bill Language

       Sec. 4011: Mandates establishment of Medicare Prepaid 
     Competitive Pricing Demonstration Projects, initially in 4 
     areas (including one rural area), and then in up to 3 
     additional areas
       Sec. 4016: Mandates establishment of 9 Medicare Coordinated 
     Care Demonstration Projects, 5 in urban areas, 3 in rural 
     areas, and 1 in the District of Columbia ``operated by a 
     nonprofit academic medical center that maintains a National 
     Cancer Institute certified comprehensive cancer center''
       Sec. 4019: Extends for two more years the Community Nursing 
     Organization demonstration projects in Mahomet, Illinois; 
     Tucson, Arizona; New York, New York; and St. Paul, Minnesota
       Sec. 4921 and 4922: Creates two new grant programs for 
     children diabetes and diabetes in Indians--NOT IN EITHER BILL
       Sec. 4201: Grandfathers ``any medical assistance facility 
     operating in Montana'' as a federally certified critical 
     access hospital ``if such facility . . . is otherwise 
     eligible to be designated by the State as a critical access 
     hospital''; report language states that the intent of the 
     conferees is that ``there be no gap in grant money from HCFA 
     to Montana''.
       Sec. 4207: Mandates establishment of a single, four-year 
     Informatics, Telemedicine, and Education Demonstration 
     Project, using a telemedicine network that is defined as ``a 
     consortium that includes at least one tertiary care hospital 
     (but no more than 2 such hospitals), at least one medical 
     school, no more than 4 facilites in rural or urban areas, and 
     at least one regional telecommunications provider'' and that 
     meets certain criteria, including that the consortium ``is 
     located in the area with a high concentration of medical 
     schools and tertiary care facilities in the United States''
       Sec. 4408: Reclassifies Stanly County, North Carolina, as 
     part of the larg urban area of Charlotte-Gastonia-Rock Hill--
     North Carolina--South Carolina for purposes of Medicare PPS 
     payments to impatient hospitals
       Sec. 4417: Extends the status of a long-term care hospital 
     ``a hospital that was classified by the Secretary on or 
     before September 30, 1995, as a [long-term care] hospital . . 
     . notwithstanding that it is located in the same building as, 
     or on the same campus as, another hospital''.
       Sec. 4418: Designates as a PPS-exempt cancer hosptial ``a 
     hospital that was recognized as a comprehensive cancer center 
     or clinical cancer research center by the National Cancer 
     Institute of the National Institutes of Health as of April 
     20, 1983, that is located in a States which, as of December 
     19, 1989, was not operating a demonstration project under 
     section 1814(b), that applied and was denied, on or before 
     December 31, 1990, for classification as a hospital involved 
     extensively in treatment for or research on cancer . . ., 
     that . . . is licensed for less than 50 acute care beds, and 
     that demonstrates for the 4-year period ending on December 
     31, 1996, that at least 50 percent of its total discharges 
     have a principal finding of neoplastic disease. . . .''
       Sec. 4643: Establishes Office of Chief Actuary for HCFA--
     NOT IN EITHER BILL
       Sec. 4725: Increases Federal medical assistance payments to 
     Alaska (increase of 9.8%) and the District of Columbia 
     (increase of 20%)

[[Page S8498]]

       Sec. 4758: Exempts Kent Community Hospital Complex and 
     Saginaw Community Hospital in Michigan from classification as 
     institution for mental disease through December 31, 2002
       Sec. 9301: Requires that the Federal share of food-related 
     disaster assistance for Kittson, Marshall, Polk, Norman, 
     Clay, and Wilkin Counties in Minnesota shall be at least 90 
     percent


                            Report Language

       States conferees' intention that HHS grant waivers of 
     transitional rules for Medicare HMO programs to the Wellness 
     Plan in Southeastern Michigan and the Watts Health Foundation

                          ____________________