[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[Senate]
[Pages 2468-2470]
[From the U.S. Government Publishing Office, www.gpo.gov]



                        PRESIDENT BUSH'S BUDGET

  Mr. KENNEDY. Mr. President, last night I listened with great interest 
as President Bush outlined his budget proposal. It was a strong speech, 
and I commend the President for his encouraging comments on education, 
as well as his kind words for our good friend Congressman Joe Moakley. 
But our challenge now is to produce a realistic budget. As the 
President describes it, the surplus is so big that the American people 
can now have it all--huge tax cuts for everyone, increased spending on 
national priorities, and elimination of the national debt.
  I fully agree with President Bush that budgets are fundamentally 
about our values and priorities, but I strongly disagree with him on 
what those priorities should be. While President Bush made the benefits 
of his plan appear real and the costs painless, I think the American 
people correctly suspect that his words sound too good to be true. Just 
as there's no such thing as a free lunch, there's no such thing as a 
free $2 trillion tax cut.
  I support a substantial tax cut, but not one that is so large that it 
crowds out continued debt reduction and investment in national 
priorities like education, health care, and worker training and 
protection efforts. Not one that is so large that it jeopardizes 
Medicare and Social Security.
  This budget claims to provide massive tax cuts and maximize reduction 
of the national debt and keep our commitments under Social Security and 
Medicare and make the investments needed to keep the nation strong. It 
makes five claims that are arithmetically impossible. The numbers 
simply do not add up.
  First, this budget argues that the nation can afford a $2 trillion 
tax cut right now. The White House claims that its proposed $1.6 
trillion tax cut ``uses only one fourth of the budget surplus.'' This 
is highly misleading. Make no mistake about it--President Bush's tax 
cut really consumes about 90% of the available budget surplus.
  The tax cut now sought by the Administration would consume well over 
$2 trillion of the budget surplus. When President Bush cites the $1.6 
trillion figure, he neglects the increased cost of interest on the 
larger national debt caused by the tax cut, and he ignores the added 
cost of his plan to make the tax cut retroactive.
  We must be clear about the real size of the surplus. While the 
Congressional Budget Office projects that the federal government will 
collect $5.6 trillion more than it spends over the next ten years, only 
$2.7 trillion of this amount can properly be called a ``surplus.'' The 
other $2.9 trillion is money that workers deposit with the government 
so they'll be protected by Social Security and Medicare when they 
retire. Workers pay this $2.9 trillion in payroll taxes for specific 
retirement and medical benefits. It is wrong to include money from 
workers' Social Security and Medicare payroll taxes in the same pot 
used to finance the Administration's income tax and estate tax cuts.
  Thus, at most $2.7 trillion in available surplus is projected over 
the next ten years. Even the Congressional Budget Office acknowledges 
the great uncertainty of its own surplus estimate. CBO itself 
recognizes that a small reduction in economy's growth would reduce its 
surplus estimates by trillions of dollars. Any responsible budget would 
reserve a significant share of the projected surplus in case the 
projections prove too optimistic. Without such a reserve, any shortfall 
could return the nation to large deficits and raids on the Social 
Security Trust Fund. Yet the Administration's budget commits every last 
dollar of the projected on-budget surplus and more,

[[Page 2469]]

sacrificing the fiscal caution that uncertainty in the surplus 
projection demands.
  President Bush's tax cuts would consume well over $2 trillion of the 
$2.7 trillion available surplus, leaving precious little over the next 
ten years--to strengthen Social Security and Medicare before the baby 
boomers retire, to begin the quality prescription drug benefit that 
seniors desperately need, to provide the education increases that the 
nation's children deserve, to train and protect the American workers 
whose increased productivity has proved essential to our strong 
economy, to advance scientific research, to improve the nation's 
military readiness, to improve the security of family farmers, and to 
avoid burdening our children with the debt that we have accumulated.
  After the Bush tax cut, we will simply not have the resources to meet 
these urgent challenges.
  All American workers deserve a tax cut, but its total size must be 
reduced far below the $2 trillion Bush proposal so that we can address 
our legitimate national needs.
  Second, this budget pretends to protect Social Security and Medicare. 
More than half of what President Bush terms the ``surplus'' is actually 
money that workers deposit with the government through the payroll tax 
to pay for their future Social Security and Medicare benefits. Just 
because the government does not pay those dollars out this year does 
not make us free to spend them. Over the next ten years, Social 
Security will take in $2.5 trillion more dollars than it will pay out 
and Medicare will take in $400 billion more dollars than it will pay 
out. But every penny of this will be needed to provide Social Security 
and Medicare benefits when the baby boomers retire.
  If we use that money for other purposes now, we would be increasing 
the long term deficits in the Social Security and Medicare programs, 
accelerating the date on which each of those programs will not have 
sufficient revenue to pay the full cost of the benefits provided under 
current law. The only fiscally responsible use for the so-called Social 
Security and Medicare ``surpluses'' is to set those funds aside to pay 
future retirement and medical benefits owed under current law.
  The Administration's budget fails to set the entire $2.9 trillion 
aside to cover the cost of future Social Security and Medicare 
benefits. It only protects $2 trillion of that amount. The remaining 
$900 billion is used for other purposes. This seriously threatens the 
retirement benefits of current workers. While the Bush budget is vague 
on just how this money will be used, it appears that more than $500 
billion of it will be used to finance the Administration's scheme to 
create private retirement accounts. Money is diverted from the Social 
Security Trust Fund to finance those accounts. I believe it would be 
terribly wrong to take money out of Social Security to finance private 
accounts. Without the guarantee of Social Security's monthly benefit 
check, one half the nation's elderly would be living in poverty. Taking 
money out of the Social Security Trust Fund will weaken the program's 
ability to meet its legal obligations to the senior citizens it serves.
  The President also plans to use current payroll taxes to finance 
prescription drug assistance for some seniors. But these dollars 
already belong to Social Security and Medicare, and they are needed to 
pay current benefits. The Bush plan really just tells Medicare to offer 
a prescription drug benefit without providing one new dollar to fund 
that benefit. His plan spends the same dollars twice. It is a cruel 
hoax.
  The Bush budget also allows part of this $900 billion in payroll tax 
revenue to be used for purposes ranging from military preparedness to 
farm aid, flagrantly violating what I have taken to be broad bipartisan 
agreement to protect payroll taxes for Social Security and Medicare.
  The threat posed by the Bush budget to Social Security and Medicare 
is very real. Not only does it fail to reserve any of the on-budget 
surplus to financially strengthen Social Security and Medicare by 
paying down the debt; it invades the Social Security and Medicare Trust 
Funds by removing $900 billion that already belong to these essential 
programs.
  Democrats are committed to keeping Social Security and Medicare 
strong. We do this by reserving all payroll taxes to pay for the 
retirement and medical benefits that are now promised to seniors under 
current law. No qualifications, no exceptions. This commitment means 
that workers' payroll taxes are not available to fund income tax and 
estate tax cuts, private retirement accounts, or new spending.
  Third, this budget alleges that it meets the nation's core health 
needs. America's seniors desperately need access to prescription drugs, 
but this budget provides only a placebo. President Bush said the right 
things about how high a priority prescription drugs are for America's 
seniors, but the numbers in his budget show that his words can't pass 
the truth in advertising test.
  While the Administration's budget lavishes new tax breaks on the 
wealthy, it leaves little for the elderly whose lives often depend on 
prescription drugs. The budget gives five times more money to the 
wealthiest one percent of taxpayers than it allows for the Medicare 
drug benefits that 39 million senior and disabled citizens need.
  There can be no question about the urgent need for a Medicare 
prescription drug benefit. A third of senior citizens--12 million 
people--have no prescription drug coverage at all. Only half of all 
senior citizens have prescription drug coverage throughout the year. 
Meanwhile, last year alone prescription drug costs increased an average 
17 percent.
  President Bush's budget responds with baby steps toward prescription 
drug coverage. After adjusting for inflation, President Bush's budget 
actually proposes one-third less than the inadequate amount he proposed 
in his campaign. His ``immediate helping hand'' program for the lowest 
income senior citizens virtually exhausts the resources that he 
allocates, leaving the majority of seniors with nothing. This plan is 
even less generous than the Republican bill passed by the House last 
year. And the Congressional Budget Office said that the House 
Republican plan was so underfunded that over half of all senior 
citizens with no coverage today would not be able to participate under 
it. Yet this budget allocates less money than the House Republican 
plan.
  Medicare is a solemn promise to senior citizens.. It says, ``Work 
hard, pay into the trust fund during your working years, and you will 
have health security in your retirement years.'' But this promise is 
being broken each and every day, because Medicare does not cover 
prescription drugs. The sad reality is that the Bush budget does not 
mend that broken promise--and it is now the responsibility of the 
Congress to keep faith with senior citizens.
  The Administration's budget also fails to address the needs of the 
nation's uninsured. An uninsured family is exposed to financial 
disaster in the event of serious illness. Unpaid medical bills account 
for 200,000 bankruptcies annually. Over 9 million families spend more 
than one fifth of their total income on medical costs.
  The health consequences of being uninsured are even more devastating. 
In any given year, one-third of the uninsured go without needed medical 
care. Eight million uninsured Americans fail to take medication their 
doctors prescribe because they cannot afford to fill the prescription. 
Four hundred thousand children suffering from asthma never see a 
doctor. Five hundred thousand children with recurrent earaches never 
see a doctor. Thirty-two thousand Americans with heart disease go 
without life-saving and life-enhancing bypass surgery or angioplasty--
because they are uninsured. Twenty-seven thousand uninsured women are 
diagnosed with breast cancer each year. They are twice as likely as 
insured women not to receive medical treatment until their cancer has 
already spread in their bodies.
  The chilling bottom line is that eighty-three thousand Americans die 
every year because they have no insurance. Being uninsured is the 
seventh leading cause of death in America. Our

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failure to provide health insurance for every citizen kills more people 
than kidney disease, liver disease, and AIDS combined.
  The Administration's budget provides only a small amount for 
refundable tax credits to purchase health insurance policies--an amount 
too small to help the vast majority of the uninsured. In this time of 
unprecedented budget surpluses, isn't it more important to assure that 
children and their parents can see a doctor when they fall ill than it 
is to provide new tax breaks for millionaires?
  Fourth, this budget does not meet the education needs of school 
children. The claim that this budget increases education funding by 
$4.6 billion or 11.5 percent is just plain wrong. This budget contains 
little more than a cost of living increase for our nation's schools, 
and few new investments to improve them.
  The Administration's budget counts $2.1 billion that President 
Clinton and Congress approved last year as part of this year's 
increase. If President Bush did nothing on education, almost half of 
his ``increase'' would happen anyway. The real increase that he 
proposes is $2.4 billion only 5.7 percent above current levels. The 
reality is that President Bush proposes only $1.8 billion in new money 
for education next year, a mere 4 percent above inflation.
  We need strong new investments to turn around our failing schools. 
But this budget does not even keep up with the average 13 percent 
annual increase Congress has provided for education over the last 5 
years, and it will not enable communities and families across the 
country to meet their education needs.
  I applaud President Bush for trying to make education a top priority. 
I applaud him for challenging the nation to ``leave no child behind.'' 
But I am disappointed that this budget fails to provide the resources 
needed to produce the action that we all agree is necessary.
  President Bush says that he will increase funding for ESEA programs 
by $1.6 billion, including $600 million more for the Reading First 
program. I support the Reading First increase, but it leaves only $1 
billion for new investments in all other elementary and secondary 
education priorities.
  This year, schools confront record enrollments of 53 million 
elementary and secondary school students, and that number will continue 
to rise steadily, reaching an average six percent increase in student 
enrollment each year. The Administration's budget fails to keep pace 
with population growth in schools, and it is possible that under the 
budget he proposes, federal education support per student will decrease 
over the next ten years.
  Schools and communities will have to educate millions more children 
and help them meet higher standards of learning while addressing 
overcrowded classrooms, a shortage of qualified teachers, increased 
safety concerns, and a lack of adequate after-school programs. Schools 
simply cannot face these challenges alone. They need the help of their 
communities, their states, and the federal government to provide the 
best opportunities for all children.
  I am prepared to work with the President to enact his proposal for 
annual testing. But communities will need resources to develop and 
implement the tests, and ensure that they are of the highest quality. 
If overall education funding per student does not increase 
significantly, the nation cannot expect to achieve the right balance 
between investing in strategies that work and increasing accountability 
for results.
  Parents across the country will give President Bush and Congress a 
test at the end of the year. If our education investments do not help 
communities turn around every failing school, help all qualified 
students afford to go to college, and ensure that workers have the 
training they need, this Republican Congress and this Republican White 
House will deserve a failing grade on education.
  I hope we will work together to make the improvements in President 
Bush's budget that will be needed to earn an A+ from the nation's 
parents.
  Finally, this budget claims that its tax cut is fair to working 
families. In reality, the wealthiest 1 percent of taxpayers, who pay 20 
percent of all federal taxes, would receive 43 percent of the tax 
benefits from Bush's plan. Their average annual tax cut would be more 
than $46,000, more than a majority of American workers earn in a year.
  The contrast is stark. Eighty percent of American families have 
annual incomes below $65,000. They would receive less than 30 percent 
of the tax benefits under Bush's plan. The average tax cut those 
families would receive each year is less than $400. Twelve million low-
income families who work and pay taxes would get no tax cut at all 
under Bush's plan. If we are going to return a share of the surplus to 
the people, that certainly is not a fair way to do it.
  Because the Bush tax cut is slanted so heavily to the wealthy, it is 
possible to enact a tax cut that costs less than half of President 
Bush's proposal, yet actually provides more tax relief for working 
families. That is what Congress should accomplish this year.
  A close look at the Administration's budget only confirms that indeed 
we cannot have it all. There is no way to eliminate the national debt, 
provide massive tax cuts, and meet all of the nation's legitimate 
needs.
  President Bush's budget asks working families to sacrifice while the 
wealthiest families in America collect far more than their fair share. 
Overall, this budget threatens our prosperity and ignores the most 
fundamental national needs.
  Governing is all about choices. And I believe that this budget makes 
the wrong choices for working families in America.

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