[Congressional Record Volume 145, Number 56 (Thursday, April 22, 1999)]
[Senate]
[Pages S4112-S4114]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LAUTENBERG (for himself and Mr. Conrad):
  S. 862. A bill to protect Social Security surpluses and reserve a 
portion of non-Social Security surpluses to strengthen and protect 
Medicare; to the Committee on the Budget and the Committee on 
Government Affairs, jointly, pursuant to the order of August 4, 1977, 
with instructions that if one Committee reports, the other Committee 
have thirty days to report or be discharged.


               social security and medicare lock box act

  Mr. LAUTENBERG. Mr. President, today, along with Senator Conrad, I am 
introducing legislation, the Social Security and Medicare Lock Box Act, 
to reserve budget surpluses for both Social Security and Medicare.
  Mr. President, this bill is an alternative to the Abraham-Domenici-
Ashcroft lock box legislation now before the Senate. There are several 
differences between the two versions. But I want to highlight this, 
most importantly: the Republican proposal claims to protect Social 
Security, but it doesn't even pretend to protect Medicare. This bill 
would reserve surpluses for both Social Security and Medicare. And the 
main question for the Senate is whether we care enough about Medicare 
to provide it with a real lock box.
  Mr. President, as I explained earlier, the Republican lock box has 
three major flaws.
  First, it fails to protect Social Security, and actually threatens 
benefits.
  Second, it reserves nothing for Medicare.
  And, third, it could result in a government default, which could 
trigger a world-wide economic catastrophe.
  Our plan corrects each of these problems in a responsible way that 
will work. It provides an ironclad guarantee that 100 percent of the 
Social Security surplus will be saved for Social Security. It reserves 
40 percent of the non-Social Security, on-budget surplus for Medicare. 
And, the lock box is enforced not by a risky new limit on public debt, 
but though the same budget procedures that produced the first budget 
surplus in 30 years.
  With respect to Social Security, Mr. President, our lock box would 
create a new point of order against a budget resolution that spends the 
Social Security surplus. This provision is also in the Republican 
amendment. But our point of order requires a supermajority to waive 
while theirs can be waived by a simple majority vote.
  The Republican amendment also contains a trap door that would allow 
Social Security contributions to be diverted for purposes other than 
Social Security benefits, such as risky new privatization schemes. Our 
proposal includes no such trap door. To the contrary, its enforcement 
procedures would remain in effect until legislation is enacted 
certifying that Social Security's life has been extended for the long-
term.
  In addition to protecting Social Security, Mr. President, our lock 
box extends similar protections to the Medicare program. The proposal 
creates supermajority points of order against a budget resolution or 
any subsequent legislation that fails to reserve roughly 40 percent of 
the on-budget surplus for Medicare over the next 15 years.
  Mr. President, the Medicare Trust Fund is now expected to be bankrupt 
by 2015. We should move quickly to reform and modernize the program. 
But it's also clear that we'll need additional resources when the baby 
boom generation starts to retire. Even with reforms that substantially 
reduce costs, the revenues coming to the Medicare Trust Fund will not 
support this larger number of beneficiaries. Nor will they provide the 
resources needed to modernize the program or provide a prescription 
drug benefit.
  In case anyone has any doubt about that, consider the so-called 
Breaux-Thomas plan that was considered by the bipartisan Medicare 
Commission.
  By their own calculation, that plan would save $100 billion over ten 
years and extends the Trust Fund for only 3 additional years. In the 
scheme of things, that's not very long. But even this meager extension 
of the Trust Fund relies on several controversial proposals, including 
raising the age of eligibility for Medicare, establishing unlimited 
home health copayments, and completely eliminating the Direct Medicare 
Education program from Medicare.
  The bottom line, Mr. President, is that we need more resources for 
Medicare. And our amendment would give us an opportunity to provide 
them.
  Under our proposal, in the short term, the Medicare reserve would be 
used to reduce the debt. Over the next ten years, our proposal would 
reduce debt held by the public by $30 billion more than the Republican 
plan. By reducing debt held by the public, our lockbox would 
dramatically reduce the government's interest costs. And that would 
free up resources to allow the government to meet its existing 
commitments to Medicare. By contrast,

[[Page S4113]]

under the Republican plan, every penny of the non-Social Security 
surplus is consumed. That would increase interest costs and almost 
guarantee further cuts in benefits in the future.
  Mr. President, not only does our lockbox do more to protect Medicare 
and reduce debt, it also has a stronger lock and more responsible 
enforcement procedure for both Social Security and Medicare.
  As I've explained, Mr. President, the Republican amendment includes a 
reckless new scheme that relies on the threat of a default to enforce 
its provisions. That not only could permanently damage our credit 
standing, it could force the government to stop issuing Social Security 
checks.
  We have a better idea, Mr. President. As I said earlier, we have a 
60-vote point of order against including Social Security in the budget 
totals, as well as a 60-vote point of order against using any of the 
Medicare reserve. Then, even if Congress tries to spend that money, our 
lockbox blocks it through automatic across-the-board cuts, rather than 
creating a crisis.
  Mr. President, this is the best way to ensure fiscal restraint. Not 
by causing a crisis after money has already been committed. But by 
using the tools of the budget process to block those commitments in the 
first place. That's why our legislation would enforce the lock box 
through the tried and true mechanisms of the pay-go rules and across-
the-board cuts.
  If Congress attempts to spend part of the Social Security surplus or 
Medicare reserve, the sequester rules of the Balanced Budget Act would 
make automatic spending cuts in order to keep the reserve intact. This 
is far better than triggering a debt crisis, and threatening a 
government default, as the Republican amendment proposes.
  To sum up, Mr. President, the Republican amendment claims to protect 
Social Security, but it really threatens Social Security benefits. Ours 
is a real lockbox that protects both Social Security and Medicare. It's 
a more responsible alternative that avoids the risk of default. And it 
would reduce debt by more than the underlying amendment.
  I hope my colleagues will support it and I ask unanimous consent that 
a copy of the bill, along with certain related materials, be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 862

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Social Security and Medicare 
     Lock Box Act''.

     SEC. 2. DEFINITIONS.

       Section 3 of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following:
       ``(11) The term `Medicare surplus reserve' means the 
     surplus amounts reserved to strengthen and preserve the 
     Medicare program as calculated in accordance with section 
     316.''.

     SEC. 3. PROTECTION BY CONGRESS

       Congress reaffirms its support for the provisions of 
     section 13301 of the Omnibus Budget Reconciliation Act of 
     1990 that provides that the receipts and disbursements of the 
     Social Security trust funds shall not be counted for the 
     purposes of the budget submitted by the President, the 
     congressional budget, or the Balanced Budget and Emergency 
     Deficit Control Act of 1985.

     SEC. 4. SOCIAL SECURITY OFF-BUDGET POINT OF ORDER.

       Section 301 of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following:
       ``(j) Social Security Off-Budget Point of Order.--It shall 
     not be in order in the House or the Senate to consider any 
     concurrent resolution on the budget (or amendment, motion, or 
     conference report on the resolution) that violates section 
     13301 of the Budget Enforcement Act of 1990.''.

     SEC. 5. MEDICARE SURPLUS RESERVE POINT OF ORDER.

       Section 301 of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following:
       ``(k) Medicare Surplus Reserve Point of Order.--It shall 
     not be in order in the Senate to consider any concurrent 
     resolution on the budget (or amendment, motion, or conference 
     report on the resolution) that would decrease the surplus in 
     any of the fiscal years covered by the concurrent resolution 
     below the levels of the Medicare surplus reserve for those 
     fiscal years calculated in accordance with section 316.''.

     SEC. 6. ENFORCEMENT OF MEDICARE SURPLUS RESERVE.

       Section 311(a) of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following:
       ``(4) Enforcement of the medicare surplus reserve.--After a 
     concurrent resolution on the budget has been agreed to, it 
     shall not be in order in the House of Representatives or the 
     Senate to consider any bill, joint resolution, amendment, 
     motion, or conference report that would cause a decrease in 
     the Medicare surplus reserve in any of the fiscal years 
     covered by the concurrent resolution. This paragraph shall 
     not apply to a provision that appropriates new subsidies from 
     the general fund to the Medicare Hospital Insurance Trust 
     Fund.''.

     SEC. 7. SUPERMAJORITY.

       Subsections (c)(2) and (d)(3) of section 904 of the 
     Congressional Budget Act of 1974 are amended by inserting 
     after ``301(i),'' the following: ``301(j), 301(k), 
     311(a)(4),''.

     SEC. 8. MEDICARE SURPLUS RESERVE.

       Title III of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following:


                       ``medicare surplus reserve

       ``Sec. 316. (a) In General.--Subject to adjustment pursuant 
     to subsection (b), the amounts reserved for the Medicare 
     surplus reserve in each year are--
       ``(1) for fiscal year 2000, $0;
       ``(2) for fiscal year 2001, $3,000,000,000;
       ``(3) for fiscal year 2002, $26,000,000,000;
       ``(4) for fiscal year 2003, $15,000,000,000;
       ``(5) for fiscal year 2004, $21,000,000,000;
       ``(6) for fiscal year 2005, $35,000,000,000;
       ``(7) for fiscal year 2006, $63,000,000,000;
       ``(8) for fiscal year 2007, $68,000,000,000;
       ``(9) for fiscal year 2008, $72,000,000,000;
       ``(10) for fiscal year 2009, $73,000,000,000;
       ``(11) for fiscal year 2010, $70,000,000,000;
       ``(12) for fiscal year 2011, $73,000,000,000;
       ``(13) for fiscal year 2012, $70,000,000,000;
       ``(14) for fiscal year 2013, $66,000,000,000; and
       ``(15) for fiscal year 2014, $52,000,000,000.
       ``(b) Adjustment.--
       ``(1) In general.--The amounts in subsection (a) for each 
     fiscal year shall be adjusted in the budget resolution each 
     fiscal year through 2014 by a fixed percentage equal to the 
     adjustment required to those amounts sufficient to extend the 
     solvency of the Federal Hospital Insurance Trust Fund through 
     fiscal year 2027.
       ``(2) Limit based on total surplus.--The Medicare surplus 
     reserve, as adjusted by paragraph (1), shall not exceed the 
     total baseline surplus in any fiscal year.''.

     SEC. 9. PAY-AS-YOU-GO AND DISCRETIONARY CAP EXTENSION.

       (a) In General.--Notwithstanding any other provision of 
     law, sections 251 and 252 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 and section 202 of H. 
     Con. Res. 67 (104th Congress) shall be enforced until 
     Congress enacts legislation that--
       (1) ensures the long-term fiscal solvency of the Social 
     Security trust funds and extends the solvency of the Medicare 
     trust fund through fiscal year 2027; and
       (2) includes a certification in that legislation that the 
     legislation complies with paragraph (1).
       (b) Discretionary Cap Extension.--Section 251(c) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 is 
     amended by adding after paragraph (7) the following:
       ``(8) for each fiscal year after 2002, the current services 
     baseline based on the discretionary spending limit for fiscal 
     year 2002;''.

     SEC. 10. ADJUSTMENT OF BUDGET LEVELS AND REPEAL.

       (a) Adjustments.--Upon the enactment of this Act, the 
     Chairmen of the Committees on the Budget shall file with 
     their Houses appropriately revised budget aggregates, 
     allocations, and levels (including reconciliation levels) 
     under the Congressional Budget Act of 1974 to carry out this 
     Act.
       (b) Repeal.--Section 207 of H. Con. Res. 68 (106th 
     Congress) is repealed.

                         Two Lock Box Proposals


                          republican lock box

       The Republican lock box purports to protect Social Security 
     surpluses by establishing new limits on debt held by the 
     public. The proposal creates a new super majority point of 
     order against legislation that would increase the limits on 
     public debt. The limits are set at levels that would allow 
     all non-Social Security surpluses to be used for tax cuts or 
     spending.
       The GOP lock box has three major problems:
       (1) It does nothing to protect Medicare. Instead, it allows 
     Congress to use funds needed for Medicare to provide tax 
     cuts.
       (2) It threatens Social Security. If the economy slows, the 
     government could be unable to issue Social Security or other 
     benefit checks. Also, the GOP amendment includes a provision 
     that would allow Social Security surpluses to be used for 
     purposes other than Social Security benefits, if labeled as 
     ``Social Security reform.''
       (3) It threatens default. Secretary Rubin is concerned that 
     the proposal could permanently damage our credit standing. 
     The risk of default would increase interest costs for 
     American taxpayers.
       In November 1995, a debt crisis was precipitated when 
     Government borrowing reached the debt limit and in January 
     Moody's credit rating service placed Treasury securities on 
     review for possible downgrade.
       The proposal could trigger an actual default based on 
     factors beyond Congress's control. Although the GOP proposal 
     adjusts the debt ceiling for discrepancies between the actual 
     and projected Social Security surpluses, it does not make 
     similar corrections for unanticipated developments on the 
     non-Social Security side of the budget. This means that an

[[Page S4114]]

     economic slowdown, a reduction in anticipated revenues, or an 
     unexpected increase in mandatory spending could cause 
     publicly held debt to exceed the new limits and create a debt 
     crisis.


                          democratic lock box

       The Democratic Lock Box creates a supermajority point of 
     order against a budget resolution or any legislation that 
     does not save at least 40 percent of the on-budget surplus 
     for Medicare over the next 15 years and adds a new 
     supermajority point of order against a budget resolution that 
     violates the off-budget treatment of Social Security. (The 
     budget act already contains supermajority points of order 
     against a budget resolution or any legislation that reduces 
     the Social Security surplus.)
       The Democratic Lock Box has several advantages over the 
     Republican approach.
       (1) It protects Social Security. The language reserves all 
     Social Security surpluses for Social Security, and does not 
     allow these surpluses to be used for anything that does not 
     increase the Solvency of the Social Security program.
       (2) It protects Medicare. The Democratic bill reserves 40 
     percent of the on-budget surplus for Medicare; allows 
     sufficient funding to extend the life of the Medicare HI 
     Trust Fund through at least 2027.
       (3) It relies on responsible enforcement mechanisms. The 
     Democratic approach does not establish binding limits on 
     publicly held debt and does not create a risk of default. 
     Enforcement is through current budget procedures and across-
     the-board cuts. The Lock Box also restores the current pay-
     as-you-go point of order, which makes certain that no on-
     budget surplus can be used. Without a change in law, the 
     Republican tax cuts will result in a pay-as-you-go sequester, 
     which will come largely from Medicare.
       (4) It reduces more debt. The Democratic Lock Box reduces 
     more debt than the Republican proposal, which will lower 
     future interest costs and free up government resources to 
     meet its existing Social Security and Medicare obligations.
                                  ____


       COMPARISON OF DEMOCRATIC AND REPUBLICAN LOCK BOX PROPOSALS
------------------------------------------------------------------------
                Democratic                           Republican
------------------------------------------------------------------------
Reserves 77 percent of unified surplus for  Claims to reserve 62 percent
 Social Security and Medicare.               of unified surplus for
                                             Social Security but
                                             includes ``trap door''
                                             loophole.
Prevents Social Security surplus from       Allows Social Security
 being used for other purposes.              surplus to be used for
                                             anything labeled ``Social
                                             Security reform'' including
                                             tax cuts.
Reserves 40 percent of on-budget surplus    Reserves nothing for
 for Medicare; allows solvency through       Medicare.
 2027.
Enforcement through existing budget rules   Enforcement through debt
 and across-the-board cuts; procedures       crisis; putting United
 that created the first budget surplus       States credit worthiness at
 since 1969.                                 risk and jeopardizing
                                             Social Security benefits.
Requires 60 votes to violate off-budget     Requires 60 votes to violate
 treatment of Social Security or for using   off-budget treatment of
 Medicare reserve.                           Social Security; reserves
                                             nothing for Medicare.
Reduces debt held by the public to $1.6     Reduces debt held by the
 trillion in 2009, $300 billion below the    public to $1.9 trillion in
 Republicans.                                2009.
------------------------------------------------------------------------

                                             
                                  ____
               Social Security and Medicare Lock Box Act

       The ``Social Security and Medicare Lock Box Act'' creates 
     new budget points of order and budget enforcement mechanisms 
     that would preclude any portion of the Social Security 
     surplus or any portion of the surplus reserved for Medicare 
     from being used for new spending or tax cuts. Over the next 
     15 years, the lockbox would save 77 percent  of the total 
     unified surplus. The Medicare reserve would save 15 percent 
     of the unified surplus and 40 percent of the on-budget 
     surplus over the next 15 years.


                         Section 1: Short Title

       Titles the bill the ``Social Security and Medicare Lock Box 
     Act.''


                         Section 2. Definitions

       Amends section 3 of the Congressional Budget Act of 1974 by 
     adding a definition of the term ``Medicare surplus reserve.'' 
     The Medicare surplus reserve refers to surplus amounts 
     reserved to strengthen and extend the Medicare program.


          Section 3: Protection of Social Security Trust Funds

       Section 3 reaffirms Congress's support for the off-budget 
     treatment of Social Security (section 13301 of the Omnibus 
     Budget Reconciliation Act of 1990).


          Section 4: Social security Off-Budget Point of Order

       Section 4 creates a supermajority point of order in the 
     House and Senate against a budget resolution that violates 
     the off-budget treatment of Social Security (section 13301 of 
     the Omnibus Budget Reconciliation Act of 1990).


           Section 5: Medicare Surplus Reserve Point of Order

       Section 5 creates a supermajority point of order in the 
     House and Senate against a concurrent resolution on the 
     budget (or amendment, motion, or conference report on the 
     resolution) that would decrease the surplus in any of the 
     fiscal years covered by the budget resolution below the level 
     of the Medicare surplus reserve.


           Section 6: Enforcement of Medicare Surplus Reserve

       Section 6 creates a supermajority point of order in the 
     House and Senate against any bill, joint resolution, 
     amendment, motion, or conference report that would decrease 
     the Medicare surplus reserve in any of the years covered by 
     the budget resolution.


                Section 7: Supermajority points of order

       Section 7 makes all new points of order created in this 
     amendment waivable only by a three-fifths supermajority vote.


                  Section 8: Medicare Surplus Reserve

       Section 8 lists the amounts reserved for Medicare in each 
     year from 2000-2014. These amounts total $65 billion over 
     2000-2004; $376 billion over the period 2000-2009, and $707 
     billion for the period 2000-2014. This section also creates a 
     procedure that requires these amounts to be adjusted annually 
     in the budget resolution to make certain that they are 
     sufficient to extend the solvency of the Hospital Insurance 
     Trust Fund through 2027. The Medicare surplus reserve, 
     however, cannot exceed the total on-budget surplus in any 
     year so as not to deplete the Social Security surplus.


        Section 9: Pay-As-You-Go and Discretionary Cap Extension

       Section 9 extends current budgetary discipline embodied in 
     the discretionary spending caps, the paygo rule in the 
     Senate, and the paygo sequestration provisions of the Budget 
     Enforcement Act until Congress enacts legislation certifying 
     that it has ensured the long-term fiscal solvency of Social 
     Security and extend the solvency of Medicare through fiscal 
     year 2027.


           Section 10: Adjustment of Budget Levels and Repeal

       Section 10 directs the Chairmen of the Budget Committees to 
     revise the budget resolution to make it consistent with this 
     Act and repeals the provision of the budget resolution that 
     weakened the paygo rule in the Senate by allowing the on-
     budget surplus to be used for tax cuts.
                                 ______