[Congressional Record Volume 144, Number 50 (Wednesday, April 29, 1998)]
[Senate]
[Pages S3755-S3756]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SOCIAL SECURITY

  Mr. BREAUX. Mr. President, it is always interesting in the morning to 
start your day by reading the newspapers. I did that as well this 
morning. I think that most of the things that we read are pretty 
accurate and pretty correct. But every now and then I think what we 
read, while it may be accurate and correct, doesn't tell the entire 
story. I think this morning, if you look at the papers around the city, 
most of the headlines that I saw were accurate in the sense that they 
talked about Social Security and the condition of Social Security. The 
stories in the press this morning dealt with that. That was all based 
on the recent Social Security report.
  It talked about the good news dealing with Social Security. I look at 
the headlines in the Washington Post, ``Forecast Brightens for Social 
Security.'' The Wall Street Journal headline was ``Economy gives Social 
Security a Reprieve.'' A New York Times article, ``Surging Economy is 
Lifting Social Security, U.S. finds.'' The headline in the USA Today 
was ``Social Security Wins Three-Year Reprieve.''
  All of that is very accurate. All of it is very, very true. All of it 
is based on the Social Security trustees' annual report that they give 
to Congress and to the American people and to the President of the 
United States.
  If you just read those headlines, you will say, ``Well, things are 
really good in the area of Social Security.'' The good news, I think, 
was based on the fact that the trustees' report pointed out that the 
payroll tax that we pay every month will be able to cover Social 
Security benefits through the year 2013 as opposed to the early 
projections that the payroll tax is only going to be enough to pay for 
benefits through the year 2012. They say that when you combine the 
payroll tax and the interest paid on the reserves that are in the 
Social Security trust fund, that would be enough money to cover the 
benefits to retirees through the year 2021 instead of just through the 
year 2019.
  They further point out that it is good news that the Social Security 
trust fund, when you add everything up, will not be depleted until the 
year 2032 instead of the year 2029. All of that is good news. The 
President correctly spoke about the fact that we added 3 more years to 
the Social Security program because of the strength of the economy 
basically. But the reason I take the floor today is to point out ``the 
rest of the story,'' as the words go, in other areas, because there is 
another part of the story that didn't seem to get the attention that I 
think it should have gotten from the press, because the stories don't 
highlight the other trust fund that I think is equally important and 
was also released yesterday by the trustees' report. The other trust 
fund that I am referring to is the Medicare trust fund, the Medicare 
part A trust fund, which basically pays the expense of 38 million 
Americans going to the hospital to receive health care.

  But the story that is only sort of mentioned as a footnote is that 
not only have we not run a surplus in the Medicare trust fund since 
1995, including deficit spending of $9.3 billion last year, they did 
not point out that the part A trust fund is going broke 2 years earlier 
than we had anticipated just this past January.
  What the report says is that instead of going broke in the year 2010, 
it is going to be depleted in the year 2008. And the numbers I just 
cited for Social Security, talking about 2032 and 2013, those are dates 
that are at least a little bit further out. But the report said that we 
are going to be going broke in the Medicare trust fund 2 years earlier 
than they had in January. I think that is incredibly significant.
  Prior to the balanced budget bill that we passed last year, the 
hospital insurance fund, which pays for Medicare hospital coverage, was 
estimated to become insolvent in the year 2001, just around the corner. 
So last Congress we struggled and did what I call the ``SOS'' approach, 
``same old, same old,'' by essentially reducing reimbursements to 
doctors and hospitals. And particularly in addition to that, what we 
did to sort of save the program in Medicare was to transfer home health 
care from part A to part B, at least we transferred part of it. We 
transferred about 60 percent of it, which amounts to about $174 billion 
over the next 10 years. We just took it out of this column, which was 
having a lot of trouble being paid for by the payroll tax and moved it 
over to part B, which is 25 percent paid for by a premium, and then the 
75 percent is paid for by the General Treasury of the country out of 
general revenues.
  So what we did, we put a Band-Aid on Medicare. We tried to save it 
from going busted in the year 2001 and we extended it out to the year 
2008.
  It is interesting that the Congressional Budget Office earlier this 
year had said, well, we thought the trust fund was going to be solvent 
until the year 2010. But now we have this new report just out 
yesterday, brand new, overlooked generally by the press, in my opinion, 
that said the Medicare trust fund was going to be insolvent not in the 
year 2010, but that the trust fund will be depleted in the year 2008. 
So unlike Social Security, where people are saying it is getting better 
than we first thought, Medicare is getting worse, and it is getting 
worse more quickly than was originally anticipated even in January of 
this year.
  We look at the year 2021 as the key year in Social Security because 
that is the year when you add taxes and the interest in the trust fund. 
It will no longer be enough to cover Social Security benefits. That is 
the year we all talk about Social Security, that we are not going to 
have enough money to pay benefits--when you add money coming in plus 
the interest on that money, we are not going to have enough to pay the 
benefits in the year 2002.
  I want to tell my colleagues that we passed that point in Medicare a 
long time ago. Medicare is already passed the point where the money 
coming in and the interest on the money coming in is not enough to pay 
for the benefits. We passed that in 1995 when the accumulated taxes and 
interest in Medicare were no longer enough to pay the benefits of 
Medicare. So we are not talking the year 2021 as in Social Security. We 
are talking about we already passed that point when it comes to 
Medicare. That is how much more difficulty the Medicare system is in 
than the Social Security system. We have been running a deficit in the 
program since 1995. Last year, it was $8.3 billion more in benefits 
than we had in money coming in and the interest in the trust fund. It 
is obvious we cannot continue that.

  I would like to quote a couple of the other highlights from the 
report which I think are significant. The trustees' report says that to 
bring the health insurance Medicare part A trust fund into balance over 
the next 25 years under their intermediate assumptions would require 
either that outlays be further reduced by 18 percent, or that taxes be 
increased by 22 percent or some combination of the two over that 
period. That is, they say, ``the current HI payroll tax of 1.54 percent 
would have to be immediately raised to about 1.81 percent or the 
benefits reduced by a comparable amount.''
  I haven't heard anyone in my State of Louisiana that I have the 
privilege of representing telling me to raise their payroll tax by 22 
percent, and I have not heard a single person come in and say, 
``Senator, would you please cut my benefits by 18 percent.'' More of 
what I hear is, ``Don't increase my taxes and don't decrease my 
benefits.''
  But I will say to all of our colleagues that that is not an option. 
That is not an option. The report further says that prior to the 
Balanced Budget Act of last year, the part A expenditures were 
estimated to grow at an average rate of about 8 percent a year in 
Medicare. From 1998 to the year 2002, what we did last year in the 
balanced budget amendment reduces annual growth to an estimated average 
of 3 percent. Thereafter, however, expenditure growth is expected to 
return to the level of about 7-percent increases every year in Medicare 
costs.
  The report further says that ``the balanced budget provisions are 
estimated to substantially reduce the gap between income and 
expenditures over the next 5 years, but with a return to steadily 
increasing deficits in the year 2003 and later. After 2002, the gap 
between income and expenditures will

[[Page S3756]]

widen steadily so that by the year 2007 there would be a $26 billion 
shortfall in that year alone.''
  Those are very sobering statistics. Unfortunately, I think they are 
very accurate. I have long been very concerned that we in the Congress 
and the public have this sort of false sense of security that because 
every year I get my Medicare benefits and I still get the coverage I 
need, there really is not a problem; that the people who are talking 
about a problem are sort of like Chicken Little who ran around the 
country saying, ``The sky is falling. The sky is falling.'' It never 
fell, and they didn't believe Chicken Little any longer. I think people 
don't believe Congress anymore. If you look at the headlines I talked 
about, I think they miss the point about Medicare which is much more 
immediate. It is around the corner, good news and bad news. Good news 
that Social Security is in pretty decent shape. We made 3 more years 
extra out of the program. But the bad news and the very legitimate 
concern we should have is that Medicare is predicted to go insolvent 
even earlier than before, 2 years earlier than we had previously 
predicted.
  So I hope that more people will take a look at the trustees' report. 
It is a good report. It is a sobering report and one that every 
American, whether they are on Medicare or whether their parents are on 
Medicare or their grandparents are on Medicare, should take a look at 
and know that there must be a growing awareness among all people in our 
country that if we are going to continue to have the greatest system of 
health care for America's seniors, we have to start making decisions 
now and recommendations now if we are going to prevent what this report 
says is going to happen in the not too distant future.
  The trustees' report noted--I will conclude with this:

       More far-reaching measures will be needed to prevent the 
     trust fund's depletion as the baby boom generation starts 
     reaching age 65 and starts receiving their benefits. . . . In 
     this regard, the work of the Bipartisan Commission will be of 
     critical importance to the Administration, the Congress and 
     the American public.

  I could not agree more. I commend this very sobering report to all 
Americans, because it, indeed, is a wake-up call as to what this 
Congress needs to be seriously considering in the very short period of 
time we have left.
  I yield the floor.

                          ____________________