[Congressional Record (Bound Edition), Volume 147 (2001), Part 4]
[House]
[Pages 4849-4854]
[From the U.S. Government Publishing Office, www.gpo.gov]



          COMPARISON OF THE REPUBLICAN AND DEMOCRATIC BUDGETS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from Texas (Mr. Bentsen) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. BENTSEN. Mr. Speaker, the House today adopted a budget which is 
pretty much in line with the budget that President Bush sent up to 
Congress just a few short weeks ago.

                              {time}  1845

  This budget, while it is a budget for one year, it would set America 
on a fiscal policy course impacting us for 10 years and really, quite 
frankly, impacting us for many years beyond that as it relates to very 
important and successful Federal programs, the Medicare program and the 
Social Security program.
  Now, there is a clear divergence on which path to take between the 
Democrats and the Republicans. While there is commonality between the 
two parties in terms of many of the spending priorities on the 
discretionary side and, I would argue, commonality between the two 
parties in saying that there should be a tax cut, the diversion occurs 
really in two areas. It occurs as it relates to how much or what we 
will do with respect to Medicare and Social Security; and it occurs in 
what we will do with respect to paying down our obligations, that is, 
the publicly held debt.
  The Republican-passed budget is predicated in large part, if not in 
total, on funding a very large tax cut on the basis of 10-year economic 
assumptions, which I will talk about shortly. But the tax cut that the 
Republican budget assumes starts out at about $1.6 trillion, the figure 
that the President used during the 2000 Presidential campaign. We know 
now that that tax cut is more around $2 trillion to $2.5 trillion 
before we include the additional interest on the debt associated with 
it. Because we know the income rate tax portion which the House has 
already adopted exceeds what the President assumed by about $150 
billion over 10 years, and we also know that the estate tax provision, 
the estate tax phaseout that the President proposed, is now estimated 
by the Joint Committee on Taxation, the nonpartisan arbiter and scorer 
of tax bills for the Congress, that bill is now estimated to cost about 
$660 billion over 10 years as opposed to the $250 billion that the 
President proposed. So already, we are seeing that the upper limit of 
the tax cut is increasing.
  But what is important between the two parties is that the Republican 
budget not only does nothing to extend the solvency of Social Security 
and Medicare; in fact, we would argue that the budget proposal will 
hasten the insolvency of Social Security and Medicare. Let me start 
first with the President's and the Republicans' plan for Social 
Security.
  The projected surplus for Social Security is about $2.5 trillion over 
the next 10 years. Now, the Republicans and the Democrats agree that we 
ought to dedicate that to pay down the national debt, but the 
difference occurs in that the Republicans do not believe that we can 
pay down as much debt as the Democrats do. In fact, nobody really knows 
how much debt is payable. We would argue we ought to keep paying it 
down until we cannot buy any more bonds in the open market at a fair 
price. But nonetheless, the President's budget and the Republicans' 
budget assumes this would take about $600 billion of the projected 
Social Security surplus and would use that for some form of 
privatization of the Social Security system.
  Now, the problem is that any scheme which we have to privatize or 
reform Social Security is going to cost money on top of what is already 
projected to be spent on the program, because we have to make up for 
any changes that might affect current and what are called ``near 
future'' retirees, or near future beneficiaries. Those would be people 
who are about 50 to 55 years old who might be affected by the 
privatization plan. All of the proponents of privatization, as well as 
the opponents, have come to the conclusion that the cost of a 
privatization plan much like what the President proposed during the 
campaign of diverting 2 percent of the FICA payroll tax to private 
accounts would cost about $1 trillion on top of what is already 
obligated to the system.
  Now, the President proposes in his budget that he is going to take 
$600 billion of the projected proceeds under the current FICA tax 
scheme and use it against that $1 trillion cost. The problem is, we can 
only spend that money once, we cannot spend it twice. So if we take the 
$600 billion and we use it for something else, we end up taking money 
out of the Social Security revenue stream, which would cause the Social 
Security system as we know it today to incur a shortfall as much as 10 
years earlier than what was projected just last week. That is, by 
taking the $600 billion out of the Social Security trust fund and using 
it for privatization, we shorten the life span of Social Security as we 
know it today.
  The only way that we can make up that $600 billion is through benefit 
cuts in the Social Security system, which I have not heard anybody 
saying they want to do that; through raising payroll taxes, which I 
have not heard anybody say that they want to do that; or incurring even 
additional debt on top of the debt that is already outstanding.
  So this is the first problem that we have with the Republican budget.
  The second problem that we have with the Republican budget is that 
they take about $400 billion of the projected Medicare hospital 
insurance trust fund, the part A portion of Medicare, the end-patient 
portion of Medicare for when one goes into the hospital, and they take 
$153 billion of that and use it for their prescription drug program. 
They take the remaining $240 billion of it and hold that for some form 
of Medicare modernization.
  Now, we do not know exactly what that means, but we are told that 
that is some form of a privatization insolvency. Again, the same 
problem that would occur with the Social Security trust funds occurs 
with the Medicare trust funds. Because even if we take Medicare trust 
fund dollars and spend them on a new benefit within the Medicare system 
like the proposed prescription drug plan of the President, which is 
unworkable in any event, but if we spend it on that, we are not 
spending it on the benefits for which it is already obligated. As a 
result, we have to make up that $150 billion; and we have again 
hastened the insolvency of the Medicare trust fund, and we have a chart 
to show that.
  Again, like the Social Security, where just last week the actuaries 
for the Medicare trust fund said that Medicare hospital insurance, part 
A of Medicare, would be solvent until about 2028, this proposal, the 
Republican proposal of carving out at least $150 billion

[[Page 4850]]

would have the effect of shortening the life span of the Medicare trust 
fund by as much as about 6 to 8 years. So the only way we can make that 
up again is by cutting benefits, raising payroll taxes, or incurring 
more debt.
  Now, the problem with that is that if we incur more debt, we are 
going in the opposite direction than we want to be going in at a time 
when we are achieving some surpluses in the economy. It is a misuse of 
the trust funds on the part of the President's and the Republicans' 
budget resolution.
  Now, on top of that, we believe that the Republican budget resolution 
cuts it a little too close in trying to build around this huge tax cut, 
in addition to including the President's own new spending request. The 
President in his budget resolution requests $260 billion of new Federal 
spending on top of that that is already there, not including other 
programs that he says will come later. Defense buildup, national 
missile defense, which is estimated to cost from as much as $100 
billion, additional educational funding that the President wants. So 
the President's own budget increases Federal spending and, at the same 
time, puts at risk the trust funds. It is all predicated on these very 
rosy scenario projections of what the surplus is going to be.
  If we look at what CBO tells us about the surplus, we know right now 
the projected 10-year surplus is to be about $5.6 trillion over 10 
years, with two-thirds of it occurring in the latter 5 years. But what 
CBO, the Congressional Budget Office, the nonpartisan budget arbiter of 
the Congress, tells us is that the margin of error increases 
dramatically the further out we go in that 10-year period. In fact, we 
could increase to the good, but we could also increase very much to the 
bad. They tell us that the margin of error on the first year is about 1 
percent of GDP. The margin of error over 5 years is about 2 percent of 
GDP; and with respect to the margin of error over 10 years, the CBO 
tells us quite frankly, they do not have any confidence in giving us an 
estimate of what the margin of error would be.
  What that means is that we have a budget which may not pay down very 
much debt and may, in fact, drive us back into deficits, and most 
certainly could end up and would end up spending Social Security and 
Medicare trust fund dollars today that are obligated for tomorrow.
  Again, there are really only a few ways to make it up: cut benefits, 
raise payroll taxes, or incur more debt. What is the problem with 
incurring more debt? Because we know in the out-years, long beyond this 
10-year window that we are looking at, when the baby boomers retire in 
earnest, and keep in mind that the baby boomers start retiring in just 
8 short years, but in about 20 years when they are retiring in earnest, 
we know that the debt-to-GDP ratio will go much higher than we have 
seen since the Second World War. So if we do not prepare ourselves 
today, we will find ourselves in a much more difficult situation.
  The Democrats believe that we can do better. We believe that we ought 
to dedicate more to debt reduction; and at the same time, we also 
believe, rather than cutting the solvency of Medicare and Social 
Security, we believe we ought to extend the solvency of Social Security 
and Medicare. That is what we propose in our budget resolution.
  On top of that, Democrats believe that rather than taking money that 
is already obligated for Medicare beneficiaries and the hospital 
insurance trust fund that people have paid with their FICA tax every 
month or every week on their paycheck and taking that money and 
spending it on something else that if the American people really want a 
prescription drug program under the Medicare program, and we believe 
they do; in fact, both major Presidential candidates in the last 
election believed it, so much that they offered it, that we ought to be 
willing to put one up that is not only a real plan that benefits all 
senior citizens who want to participate in it, but also is a plan that 
does not shorten the life span of the Medicare trust fund.
  At this point, Mr. Speaker, I would like to yield to the gentleman 
from Washington (Mr. McDermott), my colleague on the Committee on the 
Budget and a member also of the Committee on Ways and Means, who has 
worked on this issue for many years to talk about our prescription drug 
plan.

                              {time}  1900

  Mr. McDERMOTT. Mr. Speaker, I think this issue of Medicare is one 
that I think people have a lot of interest in, and earlier today we 
have talked about some of the kind of shell game aspects of this whole 
business.
  I brought this out here. The gentleman knows this, of course, is the 
blueprint for New Beginnings. That is what President Bush stood up here 
and outlined for us a few weeks ago.
  On page 14, he says that we have a $645 billion shortfall over the 
next 10 years in Medicare. That means we are $645 billion short of 
paying for what we actually promised people.
  I put this chart up here because he says right on page 14 of his 
budget that we are $645 billion short. But if we read further, and we 
always have to read the whole thing, if we go back to page 51, and by 
that time most people are asleep, but if we read it, he says, I am 
going to put in $156 billion.
  Mr. Speaker, we do not have to be a rocket scientist or a CPA or a 
great investment banker or anything to see that that is not enough 
money to fill that hole. I do not know how they could put something 
together like this and have it be so obvious.
  Now, that is for the program of Medicare that already exists. Now, 
they play another game here which is a sort of interesting one. They 
talk about the fact that they are going to have this surplus in the 
Medicare plan of $526 million. It is interesting, that is what the 
House says they have, but the President says they only have $392 
million. So we have CBO and OMB giving different figures about all this 
business.
  But the President says, we have this $526 billion. He is going to put 
it in a contingency fund. He is going to save it, use it in the future 
only for Medicare. Then he comes out here and proposes a $153 billion 
Medicare prescription drug benefit out of that $500 million.
  Now, we saw that we have a $600 billion problem, which the $500 
million would seem to fill, almost. But no, no, they are going to use 
some of that money for the drug benefit.
  Last year the gentleman and I sat through on the Committee on Ways 
and Means when we passed a bill, or I am on the Committee on Ways and 
Means, and the gentleman is on the Committee on the Budget with me, but 
we sat in our committees and watched them propose out here a 
prescription drug benefit for $153 billion, for $153 billion. He says 
he is going to put $156 billion into it now, but the CBO has already 
said that that is really $200 billion that it would take to do that. 
They reestimated the figures. So what they are promising people is not 
even going to be there.
  It is the most complicated shell game. I got going today in thinking 
about how this works. When I was a kid, we went down to central 
Illinois or southern Illinois, and there was a county fair. There was a 
guy there who had this game. We had to guess where the pea was, a 
little tiny pea.
  He had these four walnut shells. He put the pea down, put a walnut 
shell over it, he had these three there, and he started moving the 
shells around. Our job, we would bet $1, was that we would be able to 
figure out where it is.
  Members have all seen me put it here, so they know where it is. They 
have not forgotten. If I move it around over here, bring this around 
over here, Members would still be able to find it, right? That is what 
this game is. They are double-counting. They are moving the money 
around between a contingency fund and fixing Medicare and buying a 
prescription drug benefit. They are going to use the same money for 
three different things.
  If I was sitting at home, and my mother watches this stuff, she is 
91, she is sitting there wondering if she is going to get a 
prescription benefit or not. The answer I would have to give her is, I 
do not know which pea it is going to be under, which shell it is going 
to be under, because they are

[[Page 4851]]

using it to buy benefits, they are using it for shoring up the whole 
issue, and they are still saying, we are going to give a wonderful drug 
benefit.
  The Democrats in our budget today offered $330 billion in drug 
benefits, twice as much as the Republicans. It is what CBO says we 
would have to put into the program to actually make it work.
  What the President is proposing with that $153 billion is to give 
little bits of money to every State; he calls it Helping Hands. What 
that means is he gives the Governor of Texas or the Governor of Oregon, 
as my colleagues are here, or the Governor of the State of Washington, 
gives them some money and says, ``Put together a program to help the 
poor old people in your State.''
  So if one's mother is poor and has drug needs, pharmaceutical needs, 
she has to go down to the State and say, ``I am poor, and I need some 
money to help me pay for my prescriptions.'' What kind of dignity is 
there in that?
  The Democrats are spending $330 billion because we want it to be for 
all seniors. We do not want to make old people say, ``I am poor, and I 
need help.'' Most of these people, they have raised us, they have put 
us through college, they have taken care of us, and now when they get 
old, we say, we will help you if you are poor enough. That is what the 
Helping Hands program of President Bush is. It is not a program that 
goes for everybody in Medicare.
  The gentleman's point made earlier was absolutely correct. If we do 
not keep this half a trillion dollars for use between now and 2011, we 
are going to have a bigger hole.
  It is easy to explain why that is true. If there is a diet, let us 
say I am going to lose 10 pounds between now and the first of the year. 
I am going to lose 1 pound between now and the first of September, and 
then by the first of November I am going to lose a second pound, and 
then I am going to lose 8 pounds in the last 2 months of the year, 
through the Christmas and Thanksgiving season. If I said that, 
everybody would laugh. They would say, ``That is a stupid diet. You 
have to lose 1 pound a month and get into a rhythm of doing it.''
  If we do not start saving money now, when those baby boomers, those 
people who are right now about 55 years old, when they come to 2010 and 
they get on the Medicare program, the numbers in Medicare are going to 
go from 40 million to 80 million, double. That is what is happening to 
us. We know it. They are all out there living, paying taxes and so 
forth. They all believe that Medicare is going to be there for them.
  If we do not save this money now, we are not going to have it when 
they get there and come to need their hospital benefits. I think that 
the hardest thing for those of us who are in the Congress, and the 
gentleman has been here almost as long as I have, people do not want to 
think about something 10 years out. It is kind of too far out beyond. I 
am only elected for 2 years. I could be gone in a year. My term ends 
next year. I have to get elected four more times to get down to 2010.
  People tend to think, let us give them a big tax break. That is why 
the President has given $1.6 million. He is looking at the 2004 
election. That is the only thing on his mind, is how do I give this 
money back to the people, and they will think I am a wonderful guy, and 
they will reelect me in 4 years. That is what it is all about.
  As an additional benefit, though, for the Republicans who do not want 
to do social services, there will not be any money left. This 
particular thing, which says that we start with a $5.6 trillion excess 
and take out the $2.5 trillion for Social Security the gentleman was 
talking about earlier, and then we take out the half a trillion for 
Social Security, then we only have $2.5 trillion left. Then we take the 
$1.6 trillion that the President is promising as a tax break for 
everybody, take it and run, have a good time.
  What he does not tell us is that if we do not use that money to pay 
off debt, we wind up paying another $400 million in interest, because 
the government has to borrow that money. So if we do not take the $1.6 
and pay down the debt, we wind up having to borrow more money.
  The second thing that happens with this new proposal of the President 
that he never tells anybody about is that because of the tax law, there 
are going to be about 28 million people who start to have to figure 
their income tax twice.
  We have something called the AMT. That is the adjusted minimum tax. 
That is put into the law because we do not want rich people to some way 
figure out how to not pay anything, so we have said that everybody 
ought to pay at least a minimum tax.
  All this machination is going to wind up with 25 million people, 
instead of 2 million today, 2 million have to figure it twice. Suddenly 
it is going to 25 million. If we fix that in the Congress, which I 
think we will, it is going to be $300 million.
  Now, that leaves us $200 billion for everything else that could 
happen to the country in 2010, if we believe this estimate, as the 
gentleman showed in this chart. Who knows what is going to be in 10 
years? But if we believe that there is going to be $5.6 trillion, we 
have $200 billion to deal with all the problem.
  The President has promised this prescription drug benefit. He has 
promised defense. There is not anybody in this building who believes 
that defense is not going to get a boost up.
  How about if we are going to do something about education? Everybody 
says we cannot leave any child behind, and we have to do educational 
things, so that is going to come out of that $200 billion. 
Conservation; shall we save land, save parks and so forth? Or dealing 
with crime, that all has to come out of that $200 billion over the next 
10 years. That is $20 billion a year.
  If we want to give tax cuts to people for long-term care, that is, 
buying nursing home insurance, and if someone buys their own health 
insurance, that is another $40 billion. And then we have the faith-
based initiatives. We are going to give money to churches to do various 
things. That all comes out of the $200 billion.
  That does not talk about crop failures. My good friend, the 
gentlewoman from North Carolina (Mrs. Clayton), is going to be here to 
talk about agriculture. It does not say anything about crop failures or 
earthquakes, like we just went through in Seattle. It does not say 
anything about any natural disasters or wars, or any kind of military 
action we get into, like Bosnia or anything else. Every bit of that has 
to come out of this $207 billion.
  That is just reckless. This is a reckless plan because of that $1.6 
trillion. It is particularly reckless for a program like Medicare.
  I appreciate that the gentleman would take the time to come out here 
and run this special order here tonight, because I think people need to 
sit and think about the three shells: How much can they move this money 
around? Can they confuse the people? It really is based on making the 
people believe something is over here when, in fact, we are also using 
it in two other places.
  People get confused. Even listening to me, I am sure people do not 
really understand all the technicalities. I am telling the Members that 
I have been doing this for 30 years. This is the biggest shell game I 
have ever witnessed. The people are the ones who are going to suffer.
  Mr. BENTSEN. I appreciate the gentleman taking the time. I might 
quickly ask a question. I think there are a couple of points here.
  One is, I think, as the gentleman points out, in the Democratic 
prescription drug plan not only do we fund a universal prescription 
drug plan for every senior who wants to participate in it, but in 
addition to that, we do not fund it out of the Medicare Trust Fund.
  The other point that I think is important is we heard a lot during 
the debate on the budget last night and today that Democrats were just 
trying to scare senior citizens about this. I think I would ask the 
gentleman, before I yield to my colleague, the gentlewoman from Oregon, 
are we not trying to explain what our proposal is versus the 
consequences of their proposal?
  Sometimes people do not like to hear consequences, but, in fact, 
again, the

[[Page 4852]]

truth is the truth. If we take money out of the trust funds and spend 
it on something else, we are going to have to make it up. That may seem 
scary to some, but is that not the truth?
  Mr. McDERMOTT. Mr. Speaker, I thank the gentleman for asking. I sat 
on the Medicare Commission for a year listening to this whole debate. 
People want to talk about it, and they use the word ``modernization,'' 
and use all these fancy words, but what they are talking about is 
trying to move senior citizens from a program where they have 
guaranteed benefits, hospitalization, seeing the doctor, laboratory 
work, X-rays, and adding the pharmaceutical benefit, that is a 
guaranteed benefit package; what the Republicans are trying to do when 
they say ``modernization,'' what they mean is we are moving to a 
guaranteed contribution. That is, they give a voucher. They give a 
voucher to my mother and to the gentleman's mother. Everybody gets the 
same amount in the whole country. Every senior citizen would get about 
$5,500.

                              {time}  1915

  Mr. Speaker, with that $5,500, they would have to go out and buy 
their own plan.
  My mother is 91. I do not know how old other people's mothers are, 
but there are not very many insurance companies who want to insure 
somebody who is 91. Here, instead of guaranteeing my mother gets these 
benefits, they say to her, here, Mrs. McDermott, here is your $5,500, 
you can go out and shop and find the deal you can. That is what is in 
their presentation.
  We are not scaring anybody. That is what they said in the Medicare 
commission.
  Mr. BENTSEN. Mr. Speaker, reclaiming my time, I might also say that 
one of the sponsors of that in the other body, the senior senator from 
Louisiana, has even said that that program alone will not achieve the 
savings that are proposed to modernize or privatize, but certainly to 
extend the solvency of Medicare, that there must be other things that 
have to be done.
  Mr. McDERMOTT. We will have another night to talk about this issue.
  Mr. BENTSEN. Mr. Speaker, I thank the gentleman for his remarks.
  Mr. Speaker, I yield to the gentlewoman from Oregon (Ms. Hooley), my 
colleague who is also a member of the Committee on the Budget.
  Ms. HOOLEY of Oregon. Mr. Speaker, I thank the gentleman from Texas 
(Mr. Bentsen), my colleague, and I am going to talk about something 
very specific tonight. When you do a budget, whether you do it at home 
or you do it for any agency, one of the things you do is you have 
priorities, you put money into those priorities.
  For example, you just watched the gentleman from Washington (Mr. 
McDermott), my colleague, go through the budget. The Republican budget 
tax cuts are a priority, they have $1.6 trillion over a 10-year period 
on estimated surpluses, that is coming in over 10 years.
  They also talk about a priority being education. Part of the problem 
with that priority is they have not put any money in that priority.
  We had started a program, for example, to reduce class sizes. Well, 
why do you want to reduce class sizes? You want to reduce class sizes 
because if you do that, particularly in kindergarten through third 
grade, kids learn better. They do better in school and they do better 
in school, not only in kindergarten through third grade, but they do 
better in school throughout their educational career.
  We started a program saying let us put 100,000 new teachers in the 
schools to help reduce class sizes. That program is going away.
  When you talk to school districts, they say what is really important. 
We have across this country about $100 billion worth of school repair 
and modernization that needs to occur. Again, this budget diverts $1.2 
billion out of that program, and then it eliminates it for the next 
year.
  There are still things in the budget. For example, President Bush has 
suggested testing, vouchers and so forth, that all has to come out of 
their budget, but their budget is only a 5.7 percent increase, which 
has to take care of inflation, new programs and population increase.
  Mr. Speaker, one of those programs that I am terribly concerned about 
is a promise that we made 26 years ago to our school districts and to 
our students and to the people in our districts that said those 
students that have disabilities are special needs students, they need 
an appropriate free education like every student does. And the Federal 
Government said, school districts, if you do this, we are going to pay 
40 percent of those excess costs. Well, we have not done that.
  I grew up in a family that said if you make a promise, you have to 
keep a promise. If you make a commitment, you have to keep a 
commitment. We have said we want to fund that at 40 percent and, yet, 
right now, we are only at 14.9 percent. So we have a long ways to go.
  The Democratic budget is $129 billion over 10 years more than the 
Republican budget. We have put our money where our mouth is and we say 
education is important. Here is what we want to do for our school 
districts. We wanted to reduce the classroom size. We want to help with 
modernization for schools, because that is a perfect program for the 
Federal Government.
  We have said we want to help with special education, with students 
with disability. So we put money into those programs. And you heard 
from the gentleman from Washington (Mr. McDermott), my colleague, 
talking about that money that is left over, which is $200 billion over 
the next 10 years.
  If you funded the disability excess costs to our schools and you did 
it over the next 5 years, getting up to that 40 percent level, which is 
what the Federal Government promised, just that program alone is $3 
billion a year each year for the next 5 years.
  If you divide that 10 years into the $200 billion, $20 billion a 
year, and you are trying to in one little program take $3 billion out 
of it, you can see that money does not go very far.
  Again, if you believe that education is a priority, then you show 
that it is a priority, not by just talking about it, but by putting 
your money there. I know that is what the Democrats have done. They 
have put that additional money into education. We have set it as a 
priority. We need to have the best education system in the world.
  We are the richest Nation. We are the most powerful Nation, and that 
is one thing that we should do for all of our students is to give them 
opportunities by funding education. I would like to see us increase 
that education budget.
  I would like to see us keep our commitment to individuals with 
disabilities. And, again, I think if you make it a priority, you have 
to put your money there.
  Mr. BENTSEN. Mr. Speaker, I thank the gentlewoman from Oregon (Ms. 
Hooley) for her remarks. I think the gentlewoman made an interesting 
point, I think what the Democrats are saying is that we are trying to 
keep the promises that we made. The promises we made on special 
education, but also the promises we made on Social Security and 
Medicare.
  Really, the difference we have with our Republican colleagues is we 
believe that they are overcommitting. They are overcommitting on the 
basis of overly optimistic projections. They are overcommitting on the 
basis of using the Medicare and Social Security trust funds while not 
extending the solvency of those programs.
  We laid out in our budget alternative our idea for extending solvency 
of Social Security and Medicare and meeting the public's desire for 
prescription drug coverage.
  We do not believe that the Republicans or the President have 
adequately laid that out. In fact, while they have problems 
mathematically, we also have concerns because they give us a lot of 
adjectives as to modernization and privatization, but they do not fill 
in the details and tell us what it is. All we are saying is 
mathematically, you have a problem.
  If you reduce the solvency of Social Security or Medicare, the 
solvency time period, you have to make it up,

[[Page 4853]]

and there are only three ways to make it up; more debt, higher payroll 
taxes, or reduced benefits.
  All we are saying is, if that is the proposal, then lay that proposal 
on the table, but do not overcommit us to the point where we either 
drive the country back into more debt or that we have to make those 
choices as a last resort, without having to debate those with the 
American people.
  We do not favor those choices. We favor paying down more debt. We 
favor extending the solvency of Social Security and Medicare. And we 
think we can do that and have a tax cut, but we do not believe you can 
overcommit and achieve those goals.
  Mr. Speaker, I yield to the gentlewoman from North Carolina (Mrs. 
Clayton), my colleague.
  Mrs. CLAYTON. Mr. Speaker, I thank the gentleman from Texas (Mr. 
Bentsen) for yielding to me.
  I also thank the gentleman for holding this important hearing and 
Special Order on our budget and, in particular, I want to focus again 
on Medicare trust funds, because we are so worried about that, and as 
my other colleagues said, I would be remiss if I did not talk about 
agriculture.
  Let me say I think that the Democratic budget approach was a very 
simple approach; that we were at a unique opportunity where we could 
indeed give a tax cut. We could indeed be fiscally responsible, and 
apply one-third of those funds for writing down the debt, and one-third 
of those would be for priorities like securing Medicare and Social 
Security trust funds.
  That is the principle, not that we should not give a tax cut, but it 
should be a reasonable tax cut that all working Americans could benefit 
from, not just the rich. When you start from the premise that only the 
rich get it, you, indeed, have difficulties.
  We surely have to do everything to ensure the integrity of the 
Medicare trust fund, because this is a major health issue. There are 
thousands and thousands of senior citizens in my district who would get 
no health care whatsoever, unless they are dependent on Medicare. It is 
not sufficient, but indeed it is the only thing they have.
  As I said, the President's proposed $1.6 trillion tax cut over the 
next 10 years has now been passed, and if that is the case, it is going 
to cost approximately $2 trillion, not $1.6 trillion when you account 
for the debt that is involved.
  The Congressional Budget Office has reminded us that the Medicare 
beneficiaries are expected to pay $1.5 trillion for prescription drugs 
during the next 10 years. So we do not cover that. That is the costs 
that are coming out of senior citizens pockets or their children's 
pockets or they are doing without that care.
  The Medicare trust fund indeed will be further encumbered by the 
fact, the gentleman from Texas (Mr. Bentsen) is right, that the $153 
billion they proposed, that amount comes out of the Medicare trust 
fund. So the trust fund which, indeed, must be there for the 77 billion 
new baby boomers that we know actually will be drawing on that. They 
will have to know now that there will be less to draw on, because we 
need to deal with the prescription drug.
  I agree with the majority that we need to work on prescription drugs. 
I just think we need to fund it in a separate way rather than taking 
from already committed funds for another cause to do that. We agree on 
the need to have a prescription drug, because in my district, I can 
tell you the population is getting older. Because of the climate and 
the weather we have in our areas, a number of retirees are coming to 
the community; and we are going to find ourselves in a community where 
there are less working people and mostly senior citizens and yet they 
will be drawing on the resources of local government. And it would be 
unfortunate if they would not be able to do that.
  If we do not do that, by the year 2029, when they say that we have 
moved the insolvency, we are going to find it not to be solvent because 
we, indeed, draw these extra dollars from that.
  If President Bush's plan, as it has now been passed, which is 
unfortunate, if we act under the assumption, and this is what he says, 
he says that he makes the assertion that Medicare is not running a 
surplus. That is in his blueprint. It is not running a surplus. He is 
not taking the surplus from Medicare.
  If he is making that assertion then, would you not think if indeed he 
is adding a new program of $153 billion, would he not be adding that to 
it, or if not that amount, be adding as much of a surplus from other 
resources to the Medicare surplus if his assumption is true that we do 
not have a surplus?
  I think we do have a surplus in Medicare, because the Medicare 
surplus is based on Social Security and those who are paying for Social 
Security are paying for their Medicare. It is just a matter of how they 
want to describe that. I predict in 10 years, indeed, we do not have to 
predict, we know that the 77 million baby boomers will become and will 
retire by year 2010.
  Let me just say a word about this ever-dependent contingency fund. We 
have more claims on this contingency fund than there really are 
dollars. Anything you asked in the Committee on the Budget, we have 
this reserve fund. We have this contingency fund. They say the 
contingency fund is larger than that, the truth of the matter is the 
contingency fund really has fuzzy numbers. At best, given this number 
to be true, we need to not only secure a Medicare trust fund, but we 
also need to keep the commitment that we say we are going to do about 
defense.
  We do not know what that will cost. We also are talking about 
agriculture policy. We are writing a farm bill this year which means 
that we should anticipate putting new initiatives and new opportunities 
to make our farmers more competitive internationally. Yet, at the 
baseline, we are not even considering our last 3-year experience.
  Let us not say what we will do for the next 5 years, we do not even 
consider the experience that has been documented, $9 billion 
consecutively for 3 years.

                              {time}  1930

  We simply ask them just put it in at what our experience has been, $9 
billion. Now, most of the agriculture sector that is coming to the 
Committee on Agriculture said that we need more than the $9 billion, we 
need $12 billion. The Blue Dogs put that in their budget.
  So, indeed, if we find that this ever-shrinking contingency fund is 
going to meet all this need, this is really going to be a false 
promise. There is no way that the budget that we have passed can be the 
budget that will indeed secure the opportunity for having the 
priorities and the opportunities as we go forward.
  We can give a tax cut, and we should give a tax cut, but we also 
ought to pay down the debt. We ought to be meeting the ever-evolving 
priorities and those emergencies as we know it. Education, prescription 
drugs, our defense, our environment, and our agriculture, those are 
issues we know that are evolving. The energy issues, those are 
evolving. They will be greater issues, not less of an issue. We see 
them. We do not have to wait for them.
  I come from an area that was flooded 2 years ago. I can tell my 
colleagues I hope that does not happen to anyone else. But it is going 
to happen somewhere, maybe even my State. We have not planned for those 
contingencies. So not only Medicare and agriculture, but all of the 
priorities and the contingencies that are so necessary to respond to 
the needs of the American people.
  I will say all the money belongs to the American people, not just to 
a select people. All of the tax revenues belong to all of the American 
people, not a select people. All working people pay taxes. They may not 
pay their taxes as income, but they pay Federal taxes in proportion to 
their income. Many of them pay higher proportion for payroll than some 
people pay for their income.
  So I think it is disingenuous to suggest and to segregate and to make 
one taxpayer seem less honorable than another taxpayer. If we are going 
to have a tax break and give a tax incentive, and the President is now 
saying the tax incentive is to respond to the recession, well, what 
better way of making that tax break more affordable and accessible to 
those who would use the

[[Page 4854]]

dollars and be consumers than to put it back in the economy.
  By the way, most of the taxes that we just passed on the tax bill 
will not be retroactive, not like we passed it. So they would have to 
do something else to that bill in order to make it effective to 
stimulate the economy.
  So not only is it failing to stimulate the economy, not only are we 
not being fiscally responsible, not paying down our debt, but, also, we 
are not having the opportunity to meet our priorities, and we are not 
making that tax cut as equitable and fair as we have. So it is a 
misopportunity.
  I hope, indeed, that the Senate will improve upon the product that we 
are sending them. I thank the gentleman from Texas (Mr. Bentsen) for 
giving me this opportunity.
  Mr. BENTSEN. Mr. Speaker, I thank the gentlewoman from North Carolina 
(Mrs. Clayton) for giving us her views.
  Let me just close, if I might, Mr. Speaker, in making a couple of 
brief comments. Our Republican friends like to say, ``We want a tax 
cut. We think it is your money, not the government's money. And the 
Democrats really do not want a tax cut.'' I think that is wrong.
  The Democrats have put forth a tax cut time and again. But we also 
say, in addition to wanting a tax cut for the American people, we also 
want to meet the obligations that we have made. We want to be honest 
about meeting those obligations, be it Social Security, be it Medicare, 
be it paying down the national debt.
  We have had this argument of how much debt we can pay down. The 
President in his budget said there is $1.1 trillion, $1.2 trillion that 
we absolutely cannot pay down. The Congressional Budget Office said 
there is about $880 billion that we think we might not be able to pay 
down without paying a premium. The Republican budget ended up being 
closer to the CBO number than the President's number. But, in fact, 
nobody really knows.
  There has been an argument that we would not want to pay any premium 
whatsoever in paying down the debt when, in fact, that has been our 
debt management policy for the last several years when we have been 
buying back debt and paying down debt.
  Just like every American who refinances their mortgage when rates 
come down, sometimes it is economically efficient to pay a slight 
premium. We should try and pay down every dollar of debt we can as 
quickly as we can.
  But on top of that, we are concerned that the Republicans are 
overcommitting on the tax side. The $1.6 trillion tax cut grows 
dramatically every day, not including interest on the debt. Already, as 
I mentioned, the income tax rate cut that the House passed a couple of 
weeks ago is almost $150 billion greater than what the President 
proposed in his budget. The estate and gift tax bill that the President 
proposed has now been scored by the Joint Committee on Taxation as $400 
billion greater than what the President proposed. So, quickly, we are 
pushing harder and harder against that contingency fund.
  What concerns us as Democrats is, not only that we will not meet our 
obligations, but because of the hard work done by the American 
taxpayers and the American economy over the last 18 years to dig us out 
of the hole of debt that quadrupled our national debt when we had 
deficits as high as $300 billion a year to now when we are finally 
seeing blue skies with surpluses and not deficits, that we might miss 
this window of opportunity so soon before the baby boomers retire and 
push us back into a much more difficult economic situation in the 
future.
  We have our differences with the Republicans and with the President 
on this. We believe there can be a tax cut, but we believe we must meet 
our obligations equally with that tax cut. That is a very distinct 
difference that we have with the Republicans.
  We will continue to work as we spend the rest of this year putting 
through this budget and trying to put through a budget that, not only 
gives tax relief to American families, but also ensures that American 
families will not be saddled with more debt today and in the future.

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