[Congressional Record (Bound Edition), Volume 149 (2003), Part 2]
[House]
[Pages 2019-2025]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    THE PRESIDENT'S CREDIBILITY GAP

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 2003, the gentleman from New Jersey (Mr. Pallone) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. PALLONE. Mr. Speaker, I took to the floor this morning during our 
morning hour debate to express my concern over what I call the 
President's credibility problem. I talked about a credibility problem 
in the context of not only what we expect to be in tonight's State of 
the Union Address, but also by reference to the State of the Union 
Address that the President made last year.
  What I am talking about essentially when I mention a credibility 
problem is the fact that the President essentially makes promises about 
what he is going to do to solve the Nation's problems, particularly the 
economic downturn; but when we look at what he proposes, the action 
that he proposes to solve the problem, it does not really solve the 
problem.
  So the promise is made essentially by the President that we are going 
to turn around the economic downturn, but when we look at the proposals 
that he announces to accomplish that goal, there is no way that they 
could accomplish that goal, because they are not designed to accomplish 
that goal.
  The credibility problem exists in so many areas. It is not only with 
regard to his economic plan, his so-called stimulus plan, it is also 
relative to the deficit. The President indicated last year that the 
deficit would be small, that it would be taken under control. Now we 
know that the deficit is likely to be at least $300 billion, and I 
would venture to say that if the President were able to get his 
economic stimulus package, his promise to make his tax cuts from last 
year permanent, to follow through and pay for a potential

[[Page 2020]]

war in Iraq, that we would probably end up with a deficit that could be 
upwards of $2 trillion.
  That credibility problem also exists with regard to a number of other 
issues; for example, health care. The President says that we are going 
to reform Medicare and we are going to provide a prescription drug 
benefit for seniors in the context of Medicare. What we find out, and 
we will hear about tonight, supposedly, is a privatization plan for 
Medicare that does not guarantee a prescription drug benefit unless you 
leave traditional Medicare and you join an HMO or some other type of 
private insurance.
  The list goes on. We are told that we are going to do things for 
veterans, and then we see cuts in money for veterans' health clinics. 
We are told that we are going to implement a situation where no child 
is going to be left behind in terms of public education. That is the 
President's theme. But then we find that there is a huge credibility 
gap, a huge difference between the rhetoric and the reality, because, 
in fact, money for education is being cut.

                              {time}  1445

  Affirmative action is another example. The President says he wants 
diversity, and he appears to give the impression that he is favorable 
to affirmative action. But then he asks the Justice Department to file 
a suit against the University of Michigan because of their affirmative 
action program. And I am not trying to imply the President is 
purposefully trying to deceive anyone, but I think the reality is that 
his ideas of what are going to accomplish the goals that he sets out to 
accomplish are very different from reality. And whether it is an 
economic plan, whether it is his idea of affirmative action, whether it 
is his idea of the deficit or his idea on health care, most of these 
ideas do not actually translate into any action that will accomplish 
the goals that the President commits himself to.
  I guess the worst example in this respect right now and the one that 
I think is the most injurious is with regard to the economy. We know 
that the economy has taken a significant down- turn. We know that some 
action needs to be taken here in Congress so it does not get worse. And 
yet if you look at what the President has proposed, it does not 
accomplish the goal. He calls it an economic stimulus package that is 
going to boost the economy. Well, let me go through some of the things 
that he claims he is going to do with regard to the economy and then 
talk about the reality of what would really happen with his proposal.
  He claims that his plan will have an immediate boost to the economy. 
That is why he calls it a stimulus package. But the Bush plan fails on 
the most basic level by not delivering the immediate stimulus needed to 
help boost the economy in the short term. By the White House's own 
projection, less than 10 percent of the package's total spending comes 
this year in 2003 when the economy is weak and people are out of work; 
and as a consequence, even by his own estimates, the Bush plan will 
create only 190,000 jobs this year, only 11 percent of the jobs lost 
since President Bush took office.
  Let me give you another claim. The President claims that his plan is 
fair and is going to provide 92 million taxpayers with an average tax 
cut of $1,083. Unfortunately, as with the last tax cut that we had from 
the President in 2001, this one overwhelmingly benefits the wealthy. 
Once it is fully phased in, the Bush plan provides more than 40 percent 
of the tax breaks to the richest 1 percent, with less than 17 percent 
going to the vast majority of Americans.
  I could go on and on. I see one of my colleagues is here, and I would 
like to yield time. I just want to mention the one thing, though, that 
is perhaps the most important in terms of what I call the ``credibility 
gap'' with regard to the President.
  He talks about the fairness of his economic plan because it stops the 
double taxation of stock dividends. Well, first, double taxation of 
stock dividends is not a huge problem because much of corporate income 
is not taxed at all now. Corporations often make aggressive use of tax 
shelters to avoid paying any tax on profits. Take, for example, the CSX 
Corporation. Over the 4 years, 1998 to 2001, CSX had a cumulative net 
profit of $934 million but received a net Federal income tax refund of 
$164 million. And it paid dividends in every quarter.
  I think if there is anything that is in his economic plan that has 
received the most attention in terms of its inability to accomplish the 
goal of giving the economy a boost is his effort to eliminate the 
taxation on dividends. Because, really, no economist that I know has 
suggested that somehow that is going to accomplish the goal. And it has 
gotten so bad that even a significant amount of Republicans oppose his 
dividend tax cut. In fact, today, most significantly the House 
Committee on Ways and Means chairman, the gentleman from California 
(Mr. Thomas), Republican, had said that he had serious questions about 
the dividend tax cuts. It is an article that is in today's Washington 
Post. And we will develop this a little more. But I just want to stress 
over and over again how important it is to look at the President's 
actions and what he proposes, not his rhetoric about what he is going 
to accomplish.
  Mr. Speaker, I recognize the gentleman from California (Mr. Schiff).
  Mr. SCHIFF. Mr. Speaker, I thank the gentleman, and I thank him for 
his leadership on this issue.
  Tonight the President will deliver his State of the Union address 
setting out the challenges facing America in the war on terrorism and 
his plans for economic recovery. From my seat in this Chamber, I will 
be listening for one word in particular, ``sacrifice.''
  The word sacrifice should be a natural for a State of the Union 
address given at a time when the Nation is at war, when we are 
confronted with the need to defend against new and varied threats to 
our security, everything from small pox to shoulder-launched missiles 
that can shoot down commercial aircraft.
  Our men and women in uniform are certainly sacrificing. Tens of 
thousands have been called up, leaving their jobs, their families, 
often on very short notice and at great financial and personal costs. 
But what about the average American who is not on active duty or in the 
reserves? How will we be called upon to make our own contribution to 
the security and prosperity to the United States?
  The centerpiece of the administration's new agenda, and likely his 
speech tonight, is a $674 billion tax cut weighted heavily towards 
America's wealthiest families. Can this be the sacrifice that we will 
be called upon to make with our most prosperous families being asked to 
make the largest sacrifice by suffering their taxes to be cut the most? 
In every conflict since the Civil War, the Commander in Chief has 
called for an increase in revenues to meet the national defense. Can we 
have more butter, more guns and no sacrifice? Apparently not.
  Senate appropriators just cut $8 billion for increased security at 
our ports, cut $362 million for border security, cut $500 million for 
police and fire departments who will be first on the scene of any 
terrorist disaster, cut $534 from job training, cut $1 billion from our 
schools, underfunding the President's own education initiative. The 
President's proposal also does nothing to alleviate the States' own 
budget crises and their correspondingly massive cuts in health care, 
education and welfare.
  Ending the taxation, the double taxation of dividends might be good 
policy in a vacuum, taking some of the vast fluctuations out of the 
market. Coupled with reforms that end the no-taxation of other 
corporate earnings, the provision could be made revenue-neutral; but 
the administration's proposal is not coupled with other reforms and at 
a cost of $364 billion is far from revenue-neutral. Because the plan 
would have little effect on current spending and is permanent, it would 
also do little to boost our sagging economy, while doing a lot to 
increase our long-term national debt.
  But most importantly, the President's proposal is not made in a 
vacuum. We have so much work to be done to protect the homeland, and we 
still

[[Page 2021]]

suffer the lingering effects of a recession. We have lost almost 2 
million jobs in the last 2 years and cannot afford tax cuts that would 
neither stimulate the economy nor help those most in need. Many of us 
that supported tax cuts when we were at peace and enjoying historic 
surpluses must vigorously oppose them now that we are at war and in 
debt.
  As the President's own economic advisors will be the first to admit, 
small business is the driving force for economic growth and the 
government's ability to positively impact the economy through fiscal 
policy is limited.
  Probably the most significant contribution the Federal Government 
made to the prosperity of the 1990s was the difficult decision to 
balance the budget and keep interest rates low. But now we are back to 
the days of deficits as far as the eye can see. White House budget 
director Mitch Daniels can only say that the new red ink is nothing to 
hyperventilate about, which raises the question, where have the fiscal 
conservatives gone?
  Americans are a proud and generous people who are more than willing 
to sacrifice in a worthy cause. If, instead, we are to give ourselves a 
gift no other war generation has given itself, we will denude our 
ability to defend the homeland or, at best, shift to our children 
responsibility to pay for our economic health and safety.
  Mr. PALLONE. Mr. Speaker, I want to thank the gentleman from 
California (Mr. Schiff), and I want to, in particular, mention two 
things that he stressed which I think fit into this concern that I have 
about what I call the credibility gap: the fact that the President 
makes certain commitments about how he is going to deal or solve the 
problems we have, but then he does not follow through with his actions.
  One thing the gentleman made a very good point about was the homeland 
security. What is really in many people's minds, the most important 
issue right now, is homeland security, worried about another attack by 
terrorists. The President made much of the fact that he was creating a 
new homeland security department and that this was going to be a 
priority. And, yet, as the gentleman said, when we go back to our 
districts, literally, a week does not go by when one town or someone 
who is from a civil defense program or a fire department or a mayor or 
a State legislator complains to me about how the funds have not come 
back to the counties or to the municipalities to deal with homeland 
security issues. These are basic things. You need money for certain 
purposes if you are going to make us more secure.
  In my case in New Jersey in the counties I represent, we had over 200 
people die at the World Trade Center. I remember during that whole 
incident one of the things that a lot of the local defense people 
talked about is the need to upgrade communication systems, and they 
were looking for Federal funds for that.
  The President makes a big to-do about homeland security, and I am 
sure he will mention it tonight in his State of the Union address, but 
does not follow through with the funding so that we can improve 
communication, for example, in New Jersey for homeland security 
purposes. Then again he is not making good on his commitment.
  The gentleman also mentioned the issue with regard to State aid which 
I think is so crucial. The Democrats have said that as part of an 
economic stimulus package we will give a significant amount of money 
back to the States. I think it is $30 to $40 billion, or something like 
that, because we know that they face a huge fiscal crisis. But not only 
is he not providing for any money to go back to the States for any kind 
of significant purpose, but as I understand it with this tax dividend, 
elimination of the tax dividend, it actually makes the States' fiscal 
crises even worse.
  The way it does this is, first, the Bush plan to eliminate Federal 
taxes on corporate dividends will lead to a drop in State revenues; 
since State income tax laws are tied to the Federal law, the States 
will also generally stop taxing dividends. And his proposal to end 
taxation of dividends will cost State governments $4 billion this year 
and $45 billion to $50 billion over the next decade according to Harley 
Duncan, executive director of the Federation of Tax Administrators.
  So he will make the situation of the State even worse, and I am glad 
that the gentleman pointed that out among the other things he did.
  Mr. Speaker, I see our new colleague from Maine is here. I just 
wanted to say, I know this is not necessarily on point, although I 
think it is related to what we are talking about, I just wanted the 
gentleman to know I admire him greatly for his role with the 
prescription drug plan in Maine, and what he and the gentleman from 
Maine (Mr. Allen) and others have tried to do as Democrats to improve 
the situation with regard to the costs of prescription drugs.
  Once again tonight we understand that the President is going to talk 
about Medicare reform, but again his promise of Medicare reform falls 
flat because he is talking about a prescription drug benefit that you 
would only get if you go outside of Medicare and buy a private plan. I 
remember the gentleman from Maine (Mr. Allen) talking about the 
problem. I do not know if this gentleman has any HMOs that take 
Medicare in Maine anymore, but these gentlemen are doing a good job 
trying to deal with that issue, and I think the President is just 
coming up with smoke and mirrors.
  Mr. MICHAUD. Mr. Speaker, I rise on the day when President Bush will 
deliver his State of the Union address to America. I can tell you that 
in Maine we are proud of America and hopeful about the future. But we 
are also concerned about where we are today. We are concerned because 
Maine's rate of unemployment keeps rising, in some counties as high as 
9 percent, and in some labor-market areas as high as 32 percent 
unemployment. We are concerned because we have lost over 23,000 
manufacturing jobs in the last 8 years. And we are concerned because 
just 3 weeks ago we received devastating news that Great Northern Paper 
Company, where I worked for 29 years and one of the largest employers 
in my district, has filed Chapter 11, and both mills have been shut 
down since December 26.
  I know that across the country people are hurting and they need our 
help. Unfortunately, I do not believe that the plan the President will 
discuss tonight will bring that help.

                              {time}  1500

  The so-called economic stimulus package is based on tax cuts that go 
primarily to the wealthiest Americans. It does nothing to create jobs 
or fuel the economic activity that would help folks back home at Great 
Northern Paper Company.
  Mr. Speaker, there is another way. Today I ask the President along 
with my colleagues here on both sides of the aisle to at least consider 
the Democratic stimulus plan. This plan means targeted tax relief for 
working families, 1 million new jobs, money in the pockets of average 
Americans, a boost for consumer demand and business investment.
  The Democratic plan does all this, and it does it living within our 
means. It is fiscally sound. It does not borrow from our children or 
our grandchildren, burying them with debt and taxing them with interest 
on that debt.
  Mr. Speaker, we all have to work together on this because today 
Americans' number one worry is the economy. Americans are worried about 
whether their jobs will be there tomorrow. Americans are worried about 
earning a decent wage, and Americans are worried about being able to 
afford the same medicines as everyone else. That is why making 
prescription drugs affordable for all Americans should be a central 
part of our economic plan.
  In Maine we created a law that allows the State to negotiate with 
drug companies that uses the free market to get a better deal for 
consumers. We called it the Maine Rx program. In the coming weeks I 
will introduce legislation in this House to bring that historic 
innovation to the rest of the Nation. It is called America's Rx because 
all Americans deserve to have their government work on their behalf and

[[Page 2022]]

using the free market system to get them affordable medicines.
  This means a lot to real people. A friend of mine, a man who worked 
next to me at the paper mill for almost three decades, has cancer. He 
cannot retire. He would have no health benefits if he does, and he 
cannot afford his medicine on his own. He has to keep working while he 
is sick, but now, with the company in bankruptcy, he does not know what 
he is going to do.
  These are the kind of people we need to help. This is why the cost of 
prescription drugs is so important, and this is why keeping people 
working in their jobs is so important, and this is why the health of 
our economy is so very important.
  I look forward to working with my colleagues here in Congress to 
create a real economic stimulus package, and to create real job 
security, and to create real health policies that works for all the 
people.
  Mr. PALLONE. Mr. Speaker, again, I want to thank my colleague from 
Maine for his comments, and let me say, first of all, that when he 
introduces his America's Rx bill, I would be glad to be one of the 
cosponsors because I looked at it, I read about it, and I think it is a 
very good and needed legislation. He points out very effectively again 
why it is important for us to speak out on the Medicare issue and on 
the prescription drug issue.
  And again, I sound like I am just being critical of the President, 
but I think on this one, it is just a perfect example of where he is 
going to be giving the impression tonight that somehow he is going to 
reform Medicare, he is going to provide a prescription drug program, 
but then when we look at the data, it is just not there.
  It is essentially a privatization of Medicare. It essentially says if 
a person is willing to join an HMO or if they are willing to take 
Federal dollars and get into some other kind of private program, we 
will provide them with a prescription drugs benefit, but for the vast 
majority of the Americans who either will not want to get out of 
traditional Medicare or will not even have the option, because in a lot 
of States, particularly more rural States, they do not even have the 
option of an HMO, it is not going to be meaningful.
  We have worked for a couple of years now, and we know that there are 
very simple ways of addressing this problem. One of the ways to deal 
with the costs is our colleague from Maine's proposal, we call it the 
Allen bill, that would basically limit how much prescription drugs can 
be charged for, and I have been a cosponsor of that, but we also have a 
Democratic plan for a benefit package that would simply expand 
Medicare, create a new Part C or D, which is very much like what we do 
now for Part B with the doctor bills. A person pays $25 a month, they 
get 80 percent of the cost of their prescription drugs paid for by the 
Federal Government. They have a $100 deductible, and it is guaranteed 
to everybody. Everybody who wants it under Medicare gets it. They do 
not have to join an HMO. They do not have to go outside of traditional 
Medicare to get it, and that is the only way or the most effective way 
that we are going to accomplish the goal of guaranteeing a prescription 
drug benefit.
  The President not only does not do that, but he is looking to 
basically revamp Medicare itself and privatize it because he says there 
is not enough money, and I just hope that the public understands that 
we need to keep the drumbeat going so they understand what he is really 
doing, that he is really not credible on this issue. And I appreciate 
the fact that my colleague is here, and I will make sure that I 
cosponsor that bill when he is about to introduce it.
  I yield to the gentlewoman from Texas, who was already here this 
evening talking about the problems with the Bush economic stimulus 
plan.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, as the gentleman from New 
Jersey (Mr. Pallone) knows, I was here earlier, and I just wanted to 
add two or three points to the discussion that I think are very 
important.
  One of the points that I did not get a chance to make is to report 
some of the numbers that we are entertaining as relates to this whole 
idea of war. We made it very, very clear that as it relates to fighting 
terrorism, there is clearly no divide, and for some reason or another, 
there seems to be a media block, a mental block or some translation 
block that in this Congress no one disagrees on the fight against 
terrorism. In fact, right now we are spending $1 billion a month in 
Afghanistan, where most of us joined in the vote to give the President 
the authority to do so and, of course, the expenditures to do so.
  The real issue is making choices. Right now we can make a choice as 
relates, of course, to the Iraqi war. That is looking to cost at least 
$100 billion or maybe upwards to a trillion dollars. So when we talk 
about these choices, my colleague's legislation from Maine that I hope 
to join as well, we are talking about making the political solution or 
looking to the political solution as relates to Iraq so that we can put 
the dollars in to fight terrorism, to build up the Homeland Security 
Department, to do what the motion to recommit just offered to do, which 
is to pay more dollars for the first responders.
  I am particularly concerned of getting dollars to the city. The U.S. 
Congress and mayors just met recently talking about the devastation 
they are facing. I just mentioned that the State of Texas has billions 
of dollars in debt, and I would like to see us get block grants to the 
State, but, more specifically, dollars to the city, so that money for 
first responders, paramedics, firefighters, police, that can really 
address the question of terrorism in all segments of cities.
  Cities have inner cities. They have housing developments. They have 
high stock housing. They have low stock housing. They have 
neighborhoods that are better off than others, but all of those people 
will have to be protected if we are under attack in terms of a 
terrorist attack, and clearly those cities who need resources to 
rebuild, to fight off a bioterrorist attack, to do the various 
immunizations that may be necessary, and we do not have the necessary 
funds.
  Secretary Ridge will need the dollars to, in fact, put his Department 
together, even though many people say 170,000, they will just be moving 
over. There is a lot of logistical dollars that have to be utilized in 
order to make it work. So I wanted to lay the choice on the table that 
we have to make, and if we made the choice to completely fund a 
guaranteed Medicare prescription drug benefit, we would not have to 
worry about an HMO plan. We would not have to worry about what happened 
to me in my community just about 2 years ago where six HMOs abruptly 
left HMO-Medicare, left the community, which left seniors with no HMO 
to provide them coverage.
  So I have seen what happens when HMOs leave a market and say the 
reason why we are leaving it is because we cannot make any money. It is 
far better to address specifically the Medicare prescription drug 
benefit, but let me also say it is far better to address the whole 
concept of health care in America to the extent that we have so many 
uninsured, and we need to respond to that as quickly as we can.
  I believe that we can use the moneys that are now being used for war 
for expanded unemployment benefits to 52 weeks; to increase the minimum 
wage, which we have not talked about for a long period of time; full 
funding of Head Start; and then, of course, the full funding of 
Medicaid for public hospitals; and, of course, the Medicare fix that I 
think we need that our letter suggests should go forward, and that is 
to make sure physicians' money are either frozen or increased. I wanted 
to just overemphasize that.
  And let me close by saying, I have always offered these words. These 
are frightening words because for some reason or another we have taken 
to believing a country that was built on immigrants now at the fault, 
that we have a problem that we have because of immigration. I think 
not. I think that we can be secure in homeland security by strong 
funding, but I think that as well we need to look at some of the issues 
that require enhanced funding of

[[Page 2023]]

the INS so they can do their job of enforcement, but also do their job 
of allowing people to access legalization, like a bill that many of us 
supported, Republicans and Democrats, the restatement or the 
reinstatement of 245(i) to allow families to be reunited. That takes 
dollars in order to work.
  We need to pass the legislation, but in order to implement it, these 
are the kinds of values and legislative initiatives that I would hope 
that we would hear about. But more importantly, I would hope that we 
would energize the Congress by passing this kind of approach to 
governing America's business, a stimulus that is long term, Medicare 
guaranteed drug benefit that answers the cries of seniors for about 6 
years, and other legislative initiatives that I have just mentioned 
that truly help to rebuild the country and ease the pain of so many 
Americans now that are suffering under this economic crisis that we are 
in.
  I thank the gentleman very much and for his leadership on some of 
these issues. I hope we will get to work in the 108th Congress.
  Mr. PALLONE. Mr. Speaker, absolutely, and again, particular 
statements the gentlewoman made about homeland security and the 
potential war, it goes back to what I was talking about, this whole 
idea of, I call it the State of the Union credibility gap. In other 
words, the President promises to accomplish a goal, but no action is 
taken that would achieve that goal, and I think it is very true with 
the homeland security issue.
  In other words, we get up and talk about how we are going to protect 
the homeland, but then when the money comes for the first responders 
back at home in our towns or counties, money has not been there; and 
even the war in terms of a potential war in Iraq, the budget does not 
include, the President's budget does not include the cost of fighting 
the war. So when we talk about this deficit, which we estimate to be 
about $300 billion at this point, it does not include the cost of the 
war, which could be 2-, 300-, maybe as much, and put us in deficit to 
$600 billion, and I think that is the problem.
  We are getting a lot of rhetoric from the President, but we are not 
getting the action that goes along with it, and I know I have my 
colleague here from Ohio who is going to talk about that also in the 
sense of the veterans' benefits. I had said earlier, and I know he is 
going to get into this in more detail, but the President gets up here 
and talks about how he is a champion of the veterans, but then the 
White House cuts funding for VA health clinics, forcing 164,000 
veterans to be turned away, and I am hearing this all the time in my 
district about how the money is not there.
  I appreciate the gentleman coming down here, and I yield to the 
gentleman.
  Mr. STRICKLAND. Mr. Speaker, I thank my colleague for yielding to me.
  In just literally a few hours the President is going to walk into 
this Chamber. It is going to be filled with all of the Representatives 
and Senators and President's Cabinet, members of the Supreme Court, 
some members of the diplomatic corps. The press is going in the 
balcony. It is going to be one of those great occasions, and the 
President is going to stand and deliver the State of the Union Address, 
and he is going to talk about priorities, and he is going to use a lot 
of words.
  And I have been here long enough to know that talk is easy, action is 
sometimes difficult, and I want to speak specifically about the 
priorities that this administration is pursuing.
  At a time when we are on the brink of war, hundreds of thousands of 
our young men and women sent across the sea, possibly to engage in a 
conflict that could cost them their lives, what message are we sending 
to those who have already fought the battle, who have fought in past 
wars, who have paid with their health, sometimes their limbs? What 
message are we sending when we start nickel and diming the veterans of 
this country?
  I have an older gentleman who is coming into this chamber tonight as 
my guest from Woodsfield, Ohio, a little town along the Ohio River. His 
name is Herman Zerger.

                              {time}  1515

  Herman is a World War II veteran. He voted for the very first time 
crouched in a foxhole in France. And he said a runner brought a ballot 
by and he was able to mark his ballot for Franklin Delano Roosevelt. 
Herman has not missed voting in an election since that very first time 
that he voted.
  I asked him to come here tonight because he is a World War II 
veteran. He is a treasure. He is a treasure to me and to my district. 
He is the kind of person that this country ought to be honoring and 
showing respect for and gratitude toward. But what is this 
administration doing to the Herman Zergers across this country? Let me 
tell my colleagues what they are doing.
  About a year ago, the VA made a decision to increase the copayment 
for the cost of a prescription drug that our veterans must pay from $2 
a prescription to $7 a prescription. Many veterans that I represent get 
10 or more prescriptions a month. That is $70 a month. And then they 
get a 3-month supply at a time through the VA, which is $210 for a 
veteran who may be on a fixed income. Think about it. At a time when we 
are contemplating giving over $600 billion in a tax cut to the richest 
5 percent of the people who live in this country, we are increasing the 
cost of medicine for our veterans.
  Let me talk about another decision the Veterans Administration has 
made. Last August, they sent out a memo to all of their health care 
providers; and they said to their health care providers, too many 
veterans, and I am paraphrasing obviously, but this is what they said, 
too many veterans are coming in for services. We do not have enough 
money to provide those services, and so this is how we are going to 
deal with it. As a health care provider, you are no longer able to 
participate in a community health fair to tell veterans what services 
they are entitled to. You cannot send out newsletters telling veterans 
what services they are entitled to. You cannot make public service 
announcements telling veterans what services they are entitled to.
  It is a gag rule on the VA health providers, an absolute gag rule. I 
call it the ``If they do not ask, we will not tell policy.'' We are 
saying to the veterans, if you do not ask what you are entitled to, we 
will not tell you what you are legally entitled to receive. It is a 
shameful policy.
  And then the VA made a more recent decision, which my colleague 
referred to briefly. There are seven priority groupings within the 
veterans system. The VA system took group seven, priority group seven, 
and divided it and made a new priority group, priority group eight they 
call it. And then they told these priority group eight veterans, and 
these are people who have served our country honorably, they told them 
they can no longer participate in the VA health care system. Now, if 
they are already in there, they will not kick them out. But if they 
need to enroll, they cannot.
  How much money does a veteran have to make to be in a priority eight 
group? Well, it depends on where they live in the country, but 
somewhere between $26,000 and $30,000 a year. So if a veteran makes 
more than that, the VA says, no, no, you cannot enroll in our health 
care system. You may have high prescription drug costs, you may have 
serious health conditions, but we cannot afford to provide you care.
  Now, think about it. We are raising the prescription drug costs for 
our veterans, we are placing a gag order on our VA health care 
providers, telling them they cannot tell veterans about the services 
that they are entitled to, and then we take an entire group of veterans 
and we just say, you make too much money.
  I want to tell my colleague what a veteran said to me a couple of 
days ago. He said, ``Congressman Strickland, when they drafted me into 
the Armed Services and asked me to go fight for my country, they never 
asked me how much money I made then. But now they are saying, well, if 
you make $30,000, that is too much money; we cannot afford to provide 
you with VA health care.''
  Let me mention just one more thing in closing. I visited a group of 
veterans

[[Page 2024]]

in Steubenville, Ohio, about 4 days ago, and they told me about a 
health fair that they conduct in this little county, Jefferson County, 
Ohio. They do it every year at the local high school. They do it on a 
Saturday, using all volunteers. The nurses and the doctors that 
participate in this health fair give of their own time on a Saturday. 
They average annually about 500 veterans coming to that health fair. 
Last summer, they were able to detect four cases of mouth cancer. Four 
cases. And those people are now getting treatment.
  Under this rule that the VA has imposed, this gag order, that group 
of veterans can no longer conduct this annual health fair. Think about 
that. Think about that. What have we become if in our country, as rich 
as we are, we are willing to take over $600 billion and give it to the 
wealthiest among us and yet we are cutting back on the services that we 
are providing to those who have served this country in the military? It 
is a shameful set of circumstances.
  I hope the President talks about veterans tonight. And when he talks 
about veterans, I hope he remembers what this administration is doing 
and that he reverses course. I would love for the President to announce 
tonight that he is removing the gag order on the veterans health care 
providers. I would like for the President to say we are reversing the 
decision to increase the cost of prescription drugs for veterans. I 
would like for the President to say priority eight veterans are welcome 
into the VA health care system because they served our country and we 
owe them.
  So I thank the gentleman for giving me a chance to talk about this 
issue. It is one that really troubles me because I think it says 
something about the values that our country is embracing at this point 
in our historical time period. I believe we need to change course, to 
reverse course and start treating our veterans with the respect and the 
honor due them.
  So I thank the gentleman for giving me a chance to speak to that 
issue, and I look forward to hearing from others of our colleagues as 
we talk about the economic circumstances facing this country.
  Mr. PALLONE. I want to thank my colleague, Mr. Speaker. I know that 
he has always been a champion for veterans. And that gag rule, I read 
about it in the paper; and it upset me a great deal.
  In fact, in the last 2 weeks something similar happened with Medicare 
providers. They sent out to the contractors who run the Medicare 
program a memo essentially saying the same thing, that we do not want 
you to go out and do any kind of outreach to tell people about what 
services are available under Medicare. The sad thing about it is that 
we are often dealing with frail people. We are dealing with a lot of 
elderly people with Medicare and also with these veterans benefits. As 
the gentleman mentioned, in some small towns they may not have the 
normal means of finding out about what is available.
  So it is really unfortunate, and again it goes back to this 
credibility gap I keep talking about. The President gives the 
impression, I am sure he will do it again tonight, about how he wants 
to provide Medicare coverage and expand for prescription drugs and all 
these great things in the health care sphere, but in reality we find 
these memos telling the departments not to tell anybody what is even 
available now, let alone expand the program. It is totally 
inconsistent.
  Mr. STRICKLAND. If my colleague will yield, I believe the VA has 
broken the law when they imposed this gag order. I have asked the 
General Accounting Office to make a determination regarding whether or 
not the law was broken.
  It is my understanding that before such a policy change can be made, 
that any agency of the Federal Government must bring that policy change 
back to this Congress for approval or disapproval. The VA has failed to 
do that. So I am looking forward to getting a determination, perhaps 
within the next few days; and I believe I am correct in my assumption 
that the law has not been followed and that the VA is in violation of a 
law that was passed by this House and by the Senate requiring them to 
inform the Congress whenever such a policy change occurs. They did not 
do that in this case.
  Mr. PALLONE. Well, I appreciate what the gentleman has said; and I 
thank him for coming down here, as he often does.
  Mr. Speaker, I would like to yield now to my colleague from 
Wisconsin.
  Mr. KIND. Mr. Speaker, I thank the gentleman from New Jersey for 
organizing this very important Special Order talking about the State of 
health care in our country. And before the gentleman from Ohio leaves 
the well, I want to commend him too for all the work that he has done 
in regards to veterans issue and also for highlighting for a few 
minutes this afternoon before the State of the Union address the 
current state of affairs in regards to health care funding for our 
veterans in this country generally.
  Another very important topic that the gentleman did not address this 
afternoon is the whole concurrent pay issue, and it is something we 
have all supported, dealing with veterans benefits and disability 
payments which are currently offset, and that we are trying to correct; 
but the administration has refused to fund that.
  Now, in a few hours, as my colleagues have indicated, the President 
will be here in the well addressing the Nation, and really the world, 
in giving us his speech on the State of the Union. We will hear a lot 
of discussion in regards to Iraq this evening, in regards to probably 
some of the other international crises which are currently confronting 
the world and this Nation. Not just Iraq, but the situation in North 
Korea, the conflict in the Middle East, the situation down in 
Venezuela, all are very serious. But we have an obligation in this 
Congress to do all that we possibly can to ensure the safety and the 
security of our citizens, and we will move forward as a Nation in 
addressing those concerns.
  One of the things I continuously hear from folks back home in my 
Third Congressional District in western Wisconsin is they also expect 
us to walk and chew gum at the same time; to not just deal with the 
national security threats that exist against us, but also deal with the 
domestic challenges that now confront us.
  As I travel around my congressional district, and I am sure it is 
true for my friend from New Jersey as well, one of the paramount issues 
that people want to talk about, because they are so concerned about it, 
is the State of our health care system and the deficiency that they are 
currently seeing; the fact we have so many people on the uninsured 
rolls in this country, close to 44 million this year alone; the fact 
there is a lot of cost shifting going on by our providers because of 
the inadequacy of reimbursements rates and the impact that has on 
double-digit premium increases on insurance policies that large and 
small employers are offering their employees.
  This is killing the backbone of our economy, and small business 
owners in particular. We need to think of bold and creative solutions 
to the health care crisis that we are facing, not to mention the 
inadequacy of the current Medicare program and the lack of a 
prescription drug program, which is long overdue. That is as key and 
important a part of modern health care today, prescription drugs and 
access and the affordability of prescription drugs, as hospital beds 
were back in the mid-1960s when the Medicare program was first created.
  One of my chief concerns as we move forward in this 108th Congress is 
really the economic plan being pursued by the administration. It is one 
being pursued with fiscal reckless abandon. They are currently 
projecting close to a $300 billion deficit this year, which would set a 
record, an all-time record, in budget deficits for our country. If the 
economic plan that is currently being pursued with large new spending 
increases and large new tax cuts continue to be pursued, we will be 
looking at massive budget deficits throughout the remainder of this 
decade and perhaps beyond.
  This is all occurring at exactly the wrong moment, when we have an 
aging

[[Page 2025]]

population, close to 80 million baby boomers all marching in lockstep 
to their retirement, which is going to start in a few short years. We 
are not making the type of decisions that we need to make today in 
order to prepare our country for that inevitability, which is just 
around the corner.
  It is kind of the 800-pound gorilla in this Chamber. Everyone knows 
about it, but nobody really wants to talk about it or address it. I 
would hope tonight that during the President's State of the Union 
address he will touch upon the concerns that the health care industry 
has, that our providers have in regards to the inadequacy of 
reimbursements rates, but also what plan he has to turn the budget 
around so we can get back to balance; so we can exercise some fiscal 
discipline again in our budgetary decisions; so we can prepare the next 
generation of Americans, our children and grandchildren, to deal with 
the challenges that they will face in their lifetime.
  One of my greatest fears, as the father of two little boys who are 
only 4 and 6, is that we are setting them up for failure.

                              {time}  1530

  Mr. Speaker, I am referring to the future generation of Americans who 
we are going to leave a legacy of massive debt to, and at the same time 
ask them to afford the programs for this massive baby boom retirement 
which is going to start in a few short years.
  Those are some of the issues that hopefully the President will also 
delve into given the limited amount of time that he will have in the 
State of the Union Address. I think these are crucial issues to the 
people back in my district who are wondering how are we going to deal 
with the massive budget deficits which jeopardize the long-term 
economic security of our Nation, while also being able to make the 
crucial investments that need to be made in the health care system, in 
our education systems so our kids can stay competitive, and also in 
preserving and conserving our natural resources in this country.
  We need to walk and chew gum at the same time. We need to do this 
together. Hopefully we will have an atmosphere of bipartisanship as we 
move forward on these important issues in the weeks and months ahead.
  Mr. PALLONE. Mr. Speaker, I am glad the gentleman brought up this 
issue of the debt. I would like to end this Special Order with that 
issue because I think it is so important.
  I remember when I was first elected, which was about 15 years ago 
now, and a Member used to come down every afternoon or evening during 
this time of Special Orders with a huge sort of digital clock that ran 
the length of this podium here that had the amount of the debt and how 
it was increasing every minute or 15 minutes, and the Republican Party 
were in the minority then, and they made that a basic premise. We had 
to get rid of this Federal deficit.
  Finally when we did under President Clinton, the last couple of years 
we had a surplus, that is when the economy was in the boom times. We 
all know if we create a surplus, it helps the economy. The Federal 
Government is not taking away money that private industry uses to 
create new jobs and new production.
  Even in the President's State of the Union Address last year, the 
President said that he wanted to control the debt. If there was any 
debt, it would be short-term, it would not continue to grow. Now all of 
a sudden silence as if it does not matter anymore.
  I have one statistic. It was in the New York Times January 16 when 
the OMB Director Daniels suggested that the budget is not likely to be 
in surplus in the next 10 years. I do not want to say that Republicans 
do not care, but they seem to be really downplaying this as if it does 
not matter. The gentleman from Wisconsin is right, this is essentially 
an inheritance tax on our children. They are going to have to pay it 
back.
  I wish we would hear something from the President about how he is 
going to deal with this deficit because from what I can understand, if 
we were able to implement his economic stimulus package, if we then 
made the tax cuts that were passed last year permanent, and then add 
the cost of the war in Iraq, which might be 2- to $300 billion, if that 
happens, we could be talking about a couple-trillion-dollar deficit. I 
do not understand how, and again it goes back to the credibility gap. 
He makes commitments how we are going to keep the deficit under 
control, and then we find out it is very much the opposite.
  Mr. Speaker, I yield to the gentleman from Wisconsin.
  Mr. KIND. Mr. Speaker, I believe now is as good a time as any for the 
baby boom generation, this massive demographic bubble that is working 
its way through our society and aging ever so gracefully, to step into 
this political debate. I think the message is being delivered to them 
that they can have it all, that they can have massive tax cuts today 
and retirement security tomorrow, when it is really their generation 
and the challenge that their generation poses that we need to come to 
grips with.
  I have to believe that the President is a good son, loyal and dutiful 
and listens to his mom and dad. I think it would be wise if the 
President were to listen to what his father said when it was proposed, 
this type of economic plan was proposed to him back in the early 1980s, 
where they would have huge increases in spending, coupled with large 
tax cuts, which would lead to large budget deficits, which did occur 
during the decade of the 1980s and the early 1990s. The first President 
Bush called it voodoo economics because he knew what would transpire.
  It is like deja vu all over again, the economic policies coming out 
of this White House: Huge increases in spending, although they want to 
claim to be the party of fiscal constraint. We had a 10 percent growth 
in government spending last fiscal year alone. On the current track, we 
are going to be pretty close to that this fiscal year. Double that with 
the large tax cuts which have been enacted, with the increased spending 
and the reduction in revenue, we are going to have massive budget 
deficits forming. That is why the Office of Management and Budget, 
their own economic analysts are saying $300 billion in projected 
deficits this year alone without even counting a military obligation in 
Iraq, which could blow the lid off everything else.
  I feel there is time to recover. We have not slid too far down that 
road yet where, without further budgetary discipline, we could not turn 
this ship of state around in the nick of time. Unlike the decade of the 
1980s and the early 1990s when these huge deficits accumulated, we do 
not have the luxury of a decade of the 1990s to reduce the deficit and 
start running some surpluses again in time for this massive retirement 
that is about to begin with the baby boom generation.
  We have a lot of work cut out for us this year, and hopefully some 
people are starting to pay attention to the looming economic crisis 
that budget deficits most assuredly will bring, and we will act 
accordingly.
  Mr. PALLONE. Mr. Speaker, I thank the gentleman. The whole goal of 
this Special Order is to say do not mislead us. If we have a State of 
the Union Address tonight, be honest where we are going, what we are 
going to accomplish and what it is going to cost. We are not going to 
be able to do it all, and the President basically has to confront that 
issue, and I hope he does.

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