[Congressional Record Volume 146, Number 72 (Monday, June 12, 2000)]
[Senate]
[Pages S4943-S4944]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            MEDICARE LOCKBOX

  Mr. VOINOVICH. Mr. President, according to the latest estimates put 
forth by the Congressional Budget Office, the United States is 
projected to achieve an on-budget surplus of $26 billion in fiscal year 
2000, the current fiscal year. What many Americans do not realize is 
that Medicare Part A, that portion of every person's paycheck that is 
deducted for hospital insurance, is the largest component of our 
Nation's on-budget surplus. It accounts for approximately $22 billion 
of the $26 billion fiscal year 2000 surplus. Of the on-budget surplus 
of $26 billion, $22 billion is actually money that has been paid into 
Medicare that is not being used for Medicare recipients today. It is 
overpayment.
  Of that $26 billion on-budget surplus, the fiscal year 2001 budget 
resolution assumed that $14 billion of that on-budget surplus would be 
used to pay for military operations in Kosovo, natural disaster relief 
in the United States, Colombian drug eradication assistance, and other 
supplemental spending. Fourteen billion of the $26 billion has been 
spoken for, and for all intents and purposes, it is off the table. It 
is gone.
  That leaves approximately $12 billion in on-budget surplus dollars 
available and unallocated--quite a tempting target.
  If we don't use this $12 billion to pay down the national debt, I am 
concerned Congress will just spend the money. However, there is another 
option. In the very near future, Senator Allard and I and several of 
our other colleagues will propose an amendment that will direct the 
remaining $12 billion to be used for debt reduction instead of allowing 
it to be squandered on additional spending. We have given a lot of 
lipservice to being in favor of reducing the national debt. We have 
heard it in the House and the Senate. This will be a wonderful 
opportunity for everybody to vote to put $12 billion of the on-budget 
surplus into debt reduction.
  In addition, once the CBO releases its revised baseline this summer, 
we will come back again and propose another amendment that will 
allocate whatever additional fiscal year 2000 on-budget surplus dollars 
are achieved towards debt reduction. We know in July we will have new 
numbers so there will be more money. At that time, we will come back 
and say: Let us use that additional money to pay down the debt.
  Ever since the Congressional Budget Office first projected we would 
have a budget surplus back in 1998, Congress and the administration 
have been falling all over themselves to spend our on-budget surplus 
dollars. Indeed, if we include the supplemental appropriations, fiscal 
year 2000 discretionary

[[Page S4944]]

spending will increase $37 billion, or 6.4 percent, over fiscal year 
1999. Again, when we use the $14 billion of the on-budget surplus and 
add it to what we have already allocated for 2000, we are now talking 
about a 6.4-percent increase in spending in the year 2000 over 1999. 
That is tremendous growth in Government spending.

  On another note, we hear that Vice President Gore now supports a 
Medicare lockbox, a lockbox similar to the one we created.
  As I stated earlier, Medicare Part A is the largest component of our 
Nation's on-budget surplus, accounting for approximately $22 billion. 
Because of our strong economy and high employment, more money has come 
into the Medicare program via the payroll tax than has been spent in 
benefits. Again, we are either going to spend those on-budget surplus 
dollars on unrelated Government spending, or we can use it to reduce 
the national debt.
  Last November, Senator Ashcroft introduced the Social Security and 
Medicare Safe Deposit Act to wall off both the Social Security and 
Medicare Part A trust fund surpluses; in essence, to put them in a 
lockbox so the only other purpose for which they could be used would be 
to pay down the national debt. That is what we were going to do with 
it. The Senate had a chance this year to vote on a Medicare lockbox on 
April 7, when Senators Ashcroft, Brownback, Grams, and I offered an 
amendment to the fiscal year 2001 budget resolution. Unfortunately, 
Senator Ashcroft had only 2 minutes to speak on the subject. I didn't 
get a chance to speak on it at all because no one was very interested 
at that time.
  I remind my colleagues, the vote on the Medicare lockbox amendment 
was opposed by 43 Members of this Senate on the opposite side of the 
aisle; that is, 43 Democratic Members of the Senate voted ``no'' on the 
Medicare lockbox amendment. I thought the Medicare lockbox was a good 
idea then; I think it is still a good idea. Now, apparently, the Vice 
President thinks it is a good idea.
  We need to lockbox Medicare to make sure that the excess money paid 
into Medicare Part A goes for debt reduction and is not going to be 
used for more spending or tax cuts. We need to use it for debt 
reduction, period, just as all the experts have said. Alan Greenspan, 
Chairman of the Federal Reserve Board; Daniel Crippen, head of CBO; 
David Walker, head of the GAO--all have said we should take the on-
budget surplus and use it to pay down debt. I am pleased the Vice 
President is on board with a Medicare lockbox. I hope he will be able 
to convince Senators on the other side of the aisle that we need to 
make sure the on-budget surplus funds coming into the Treasury, which 
are mostly Medicare Part A dollars, are used to pay down the debt.
  If my colleagues on the other side agree with the Vice President that 
we need to lockbox the Medicare surplus, which comprises $22 billion of 
the on-budget surplus, then they should have no problem supporting 
using $12 billion to pay down the debt.
  We are going to have an opportunity twice this year--once perhaps 
this week on the Defense appropriations bill--to use the remaining on-
budget surplus to reduce the national debt or to pay for more spending. 
I think it will be one of the best budget votes my colleagues will have 
all year long. Not only will it keep down spending, it will help bring 
down our publicly held debt. We have to make sure we make the right 
decisions in terms of our on-budget surplus.
  I would like to also take advantage of this opportunity to quote the 
Vice President. This quotation was in the Washington Post:

       The temptation has always been to treat Medicare the way 
     Social Security used to be treated--as a source of money for 
     spending or tax cuts. And now that we have succeeded in 
     taking Social Security off budget and using it to pay down 
     the debt, we need to do the same thing with Medicare and put 
     it in a lockbox.

  I remind my colleagues that when the issue of the Social Security 
lockbox came up on the floor of the Senate, our colleagues on the other 
side of the aisle, on six occasions, all 45 of them voted against--
voted against--the Social Security lockbox. My feeling is that we will 
find out this year whether or not the administration is in favor of 
lockboxing Social Security and lockboxing Medicare.
  I think it is time we level with the American people and let them 
know that the on-budget surplus we have been talking about is primarily 
made up of overpayment of Medicare Part A payroll taxes, and that what 
we have been doing is proposing to use that for more spending or for 
reducing taxes. Let's lock it up. Let's put it in a lockbox. Let's make 
sure that the money that is being paid into Medicare is money for 
insurance for the elderly and is not used for tax reductions or, in the 
alternative, used to pay for other Federal spending. Now is the time to 
make that point. Now is the time to be counted.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  (Mr. VOINOVICH assumed the chair.)
  Mr. THOMAS. 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. THOMAS. Mr. President, I believe we have about 15 minutes left in 
morning business, is that correct?
  The PRESIDING OFFICER. That is correct.

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