[Congressional Record (Bound Edition), Volume 149 (2003), Part 4]
[House]
[Pages 4417-4423]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         THE PRESIDENT'S BUDGET

  The SPEAKER pro tempore (Mr. Beauprez). 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, this evening I wanted to talk about the 
President's budget, but I also want to point out, using something very 
specific examples of how the President's rhetoric, if you will, with 
regard to what he wants to accomplish in this session of Congress, 
whether it be turn the economy around, create more jobs, reform 
Medicare, create a prescription drug benefit, the various things that 
he talked about in his State of the Union Address are not essentially 
backed up with the budget that he has presented to Congress and that we 
first had unveiled here a few weeks ago.
  And it is disturbing to me because I think it creates what many have 
called a credibility gap between what the President promises versus 
what he delivers. He creates the illusion that he will create new jobs, 
reverse our Nation's current economic woes, ensure all Americans have 
access to healthcare, and provide seniors a prescription drug benefit; 
but then when we look at his budget for the year 2004, for the next 
fiscal year, we see that essentially what it does is mire the Nation's 
future in record deficits, undermine the future of the social security 
and the Medicare system at the time that they should be strengthened in 
anticipation of the baby boom generation which will at some point in 
the near future become 65 years of age, and we only have to look at the 
promises the President made in the State of the Union Address that he 
gave a year ago to see how ineffective he is at following up on his 
rhetoric once he leaves the Capitol.
  Last year, the President assured the Nation that ``our budget will 
run a deficit that will be small and short lived.'' But 1 year later, 
according to President's budget message, annual deficits will run close 
to $300 billion a year for the next 2 years. Even more troubling under 
the President's watch, the red ink does not appear to go dry any time 
in the near future, with deficits reaching over a trillion dollars by 
2007.
  Just last week during the President's Week recess, there was an 
article in the New York Times that said that the Federal debt was near 
a ceiling for a second time in 9 months, and I would just read the 
first couple paragraphs of that article, which was dated February 20, 
last Thursday, Mr. Speaker. It says ``With budget deficits climbing 
rapidly, the Bush administration acknowledged today that the government 
had reached its legal limit on borrowing and would run short of cash by 
early April unless Congress once again raised the debt ceiling.
  ``Because Congress inevitably does raise the ceiling after intense 
jousting, the announcement will have little, if any, effect on 
operations. But it highlights the new era of red ink that the 
government faces even before President Bush's latest proposals for more 
than $1 trillion in tax cuts over 10 years . . . the White House now 
projects a deficit of more than $300 billion this year and next, as 
well as deficits at least for the next decade.''

                              {time}  2045

  If you talk about the deficit, Mr. Speaker, if you think about what 
the President has been saying versus reality, he really has no 
credibility.
  When he took office in 2001, the Federal budget had a surplus of $5.6 
billion. Not only has he reversed those fortunes, but on this 
President's watch the red ink does not appear to go dry anytime in the 
near future, with deficits reaching $2.1 trillion over the next 10 
years. There again, I just use that as one example. There are so many 
examples of it.
  I guess one of the things that is so obvious in this regard is what 
the President says about the tax cuts. He implemented some tax cuts 
about a year ago. He now proposes additional tax cuts and is talking 
about maybe a third set of tax cuts in another 6 months or so.
  There was an article in today's New York Times that, once again, 
talks about the President's credibility gap in the context of the tax 
cuts. I just wanted to go to some of those statistics, because I think 
they are so important in terms of what the President says these tax 
cuts are going to do, who is going to benefit from them, how they are 
going to impact the economy, versus what the reality is. This was an 
article in today's New York Times, and it is entitled ``The President's 
Tax Cut and its Unspoken Numbers.''
  It starts out by saying, ``The statistics that President Bush and his 
allies use to promote his tax cut plan are accurate, but many of them 
present only part of the picture. For instance, in a speech in Georgia 
last week, the President asserted that under his proposal, 92 million 
Americans would receive an average tax reduction of $1,083 and that the 
economy would improve so much that 1.4 million new jobs would be 
created by the end of 2004.''
  Now, no one disputes the size of the average tax reduction. But what 
the President did not say is that half of all income taxpayers would 
have their taxes cut by less than $100, 78 percent would receive 
reductions of less than $1,000, and the firm that the White House 
relied on to predict the initial job growth also forecast the plan 
could hurt the economy over the long run.
  You say, how does the President talk about an average tax reduction 
of $1,083 and then you find out that most Americans do not benefit in a 
significant way? The reason is because only a few rich taxpayers, in a 
sense, get the largest reduction. So if you take the number of 
taxpayers and you put it into the total reduction, you get an average 
of $1,083, but most of the money is going to a very few wealthy 
taxpayers at the high end of the spectrum.
  The cut for those with incomes of $40,000 to $50,000, according to 
calculations by the Brookings Institution and the Urban Institute, 
would typically be $380. For those with incomes of $50,000 to $75,000 
it would be $553. But if you are someone at the high end, then you are 
getting tens of thousands of dollars back in tax cuts.
  The President primarily when he talks about this tax reduction 
package talks about the stock dividends and how that is going to help 
not only turn the economy around, but help the average person, because 
there are so many people, particularly seniors, he claims, that are 
going to benefit from eliminating the tax on stock dividends.
  But this article in the New York Times today addresses that and 
basically explains again the President has a credibility gap in how he 
is spinning it, because among the points that he makes is that more 
than half of all taxable dividends are paid to people 65 and older and 
that their average saving from eliminating the tax on dividends would 
be $936, and that 60 percent of people receiving dividends have incomes 
of $75,000 and less, and he goes on.
  But what we find is only slightly more than one-quarter of Americans 
65 and older receive dividends and that two-thirds of the dividends the 
elderly receive are paid to the 9 percent of all elderly who have 
incomes of over $100,000.
  Essentially what you are having, again, is that most of the money, 
even with the stock dividend elimination, the tax on that, is going to 
very few senior citizens who have incomes over $100,000. The average 
senior citizen is not benefiting from it in any significant way.
  I mention this because, again, I think it is important that we all 
understand that the President says something, and he spins it and makes 
it sound like it is going to benefit everyone and turn the economy 
around, but then the reality is that it is not. It does not accomplish 
that goal at all.
  Let me just give you some information, if I can, about job creation. 
Last month during his State of the Union address, the President said we 
must

[[Page 4418]]

have an economy that grows fast enough to employ every man and woman 
who seeks a job.
  Of course, obviously, I agree with that statement. Who would not? 
But, unfortunately, a huge gap again exists between his rhetoric of 
employing all Americans and the economic stimulus plan that even the 
White House says is only going to create about 190,000 jobs this year.
  He says everyone should have a job. He talks about an economic 
stimulus plan that will theoretically create 190,000 jobs. But you have 
8.6 million Americans now actively looking for a job. He does not have 
any credibility because----


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Renzi). The Chair would like to remind 
the gentleman from New Jersey that it is out of order to question the 
credibility of the President.
  Mr. PALLONE. Mr. Speaker, I accept your ruling. I did not realize you 
could not talk about the credibility, but I certainly will not use that 
term again.
  I just want to point out that when the President took office in 
January 2001, unemployment had reached a 40-year low. Two years later, 
1.7 million jobs have been lost. That gives President Bush the dubious 
distinction of having the worst job creation record of any 
administration in the last 58 years.
  So when we talk about job creation and how his economic package is 
somehow going to create more jobs, it may create a few more, but it is 
not doing anything significant in terms of job creation as opposed to 
the amount of jobs that we have seen lost in this economic downturn.
  Now I want to talk a little bit in the same vein about some of the 
health care initiatives that the President has put forward, because the 
bottom line is that over the next few weeks we are probably going to 
hear more specifics about what he wants to do with Medicare, with 
Medicaid, with access to health insurance, and also with some of the 
money that is going back to the States, other than through Medicare and 
Medicaid, to pay for some health care programs.
  Again, if you listen to what the President said during his State of 
the Union address, basically he said that he wanted to not only 
strengthen Medicaid and Medicare, but also provide a prescription drug 
benefit in the context of Medicare for senior citizens.
  Again, I would like to point out the fact that most of what has been 
proposed with regard to Medicare and Medicaid, in my opinion, will not 
only not strengthen the programs but weaken the programs, and that when 
he talks about providing a prescription drug benefit under Medicare, it 
is not a prescription drug benefit that most seniors will be able to 
avail themselves of.
  In fact, again, in yesterday's New York Times, Monday, February 24, 
there was an article on the front page entitled ``Bush Proposes Major 
Changes in Health Plans. Critics See Less Security and Fewer 
Benefits.''
  I would stress that critics see less security and fewer benefits 
because, the gist of this article says, essentially what the President 
is proposing with regard to not only Medicare and Medicaid, but also 
with regard to Social Security, are radical changes in the programs and 
the way these programs are essentially set up.
  What I would like to do, if I could, is just highlight some of the 
major changes in the programs that I call radical or fundamental 
changes that are being proposed in these three very important programs 
that are relating to the health care of not only seniors, but poor 
people of all ages.
  I start out by highlighting the first paragraph of this article in 
the New York Times. It says, ``President Bush has begun one of the most 
ambitious efforts to reinvent Medicare and Medicaid since the programs 
were created 38 years ago. Combined with his earlier plan for Social 
Security, the proposals offer a fundamentally different vision of 
social welfare policy, many experts say.
  ``Several architects of those programs, the people that put the 
Medicare, the Medicaid and the Social Security programs together years 
ago, argue that the Bush administration is retreating from the goals of 
the Great Society and the New Deal and the promises that government 
made across the generations.
  ``The Bush plans,'' they say, ``are essentially an effort to limit 
the Federal Government's financial responsibilities and to cap what is 
now an open-ended guarantee of specific benefits, in an effort to move 
from a defined benefit to a defined contribution.''
  Essentially what the critics are saying, and this is brought out in 
this New York Times article, is that these were programs, you talk 
about Medicare, you talk about Social Security, these were retirement 
security programs, in the case of Medicare for health care for seniors, 
in the case of Social Security retirement benefits for seniors, that 
were basically guaranteed. You paid into this system and you worked 
over the years, and then when you reached the age of 65, you knew that 
you had certain benefits that were defined and guaranteed.
  What the President is proposing now and the reason it is so radical 
is because he is basically saying they are not going to be defined or 
guaranteed anymore. He is saying in the case of Medicare that 
essentially what you will get is a voucher. You will get a certain 
amount of money, and you can go out in the private sector and see if 
you can buy health insurance with that voucher, if you will. But you 
may or may not be able to find it, and you do not know exactly what it 
is going to provide you with in terms of the benefit package.
  With regard to Social Security, of course, he is talking about 
privatizing, and your being able to take the money out and invest it in 
the stock market or other types of things, so that there is a certain 
amount of risk, if you will, that the money will not be there because 
of those kinds of decisions that you made when you took the money away.
  Let me just get a little more into some of the specifics, because I 
think it is interesting to see how the New York Times has analyzed 
this, and also talk a little bit about what the Democrats would like to 
do differently with regard to the Medicare prescription drug proposal 
and how the Democratic proposal is consistent with the guarantees and 
the tradition and the history of the Medicare program, as opposed to 
the President's proposal, which is not.
  What it says in this New York Times article, again from Monday, is 
that Mr. Bush's Medicare proposal, being revised after an earlier draft 
drew fire on Capitol Hill, would encourage many beneficiaries to leave 
traditional Medicare and get their benefits through private health 
insurance associated with the program.
  Now, some of the Congressional Republicans, some of my colleagues on 
the Republican side of the aisle, have specifically been opposed or 
have expressed reservations about the President's Medicare proposal, 
because what he seems to be saying is if you want the benefit of a 
prescription drug plan, that you have to go outside of Medicare. In 
other words, you have to choose a private plan, an HMO or something 
like an HMO, in order to get the benefits of a prescription drug plan.
  It says in the New York Times, ``Criticism has come from even 
influential Congressional Republicans, alarmed at the possibility that 
the administration might be overreaching. They have been particularly 
scathing about the possibility that the Bush plan would require the 
elderly to leave traditional Medicare and join a private plan to get 
drug benefits discussed in the earlier draft.''
  Now, the problem with this, again, is a fundamental change in the way 
we operate the Medicare program, because those who are in Medicare now 
know it is a guaranteed plan, it is a defined benefit; if you stay in 
the traditional plan, you can go to any doctor or any hospital and you 
get your health care covered. But what the New York Times says is that 
the architects of Medicare said the program was created with some 
fundamental precepts that the Bush proposal would undermine; that all 
working Americans pay into the same Medicare system, that the healthy 
and the sick, the rich and poor,

[[Page 4419]]

end up in the same program and all have the same core benefits when 
they retire.
  The idea that the elderly would be better served by a private 
nonprofit insurance market is anathema to those veterans of the Great 
Society. They say before Medicare, the private health insurance market 
was a failure for the elderly, nearly half of whom have no hospital 
coverage, and they fear that private health plans would be attempted to 
recruit the healthiest of the elderly, leaving sick or more costly 
patients in the original fee-for-service Medicare program.
  So basically the problem with what the President is proposing for 
Medicare is not only a practical problem, in the sense that we are not 
really sure and we really have no reason to believe based on past 
performance that the elderly would be able to take this voucher and buy 
a good health insurance program, but the real danger is it undermines 
the traditional fee-for-service Medicare program for those who stay 
behind, because they are going to be the sicker and the more expensive 
people to take care of. So the problems, if you will, and the costs of 
Medicare, are aggravated by the fact that now the Federal Government is 
paying for an older population, if you will.

                              {time}  2100

  So it is almost a prescription, if you will, to destroy the 
traditional Medicare program.
  Now, what does the President do or propose with regard to Medicaid? 
Medicare, as we know, is the program for seniors, those over 65, 
primarily. Medicaid is a health insurance program for poor people who 
fall below a certain income.
  Well, again, I am going back to the New York Times article from 
yesterday: ``The issues raised in the Medicaid debate revolve largely 
around the role of the Federal Government. The administration proposal 
would offer States advanced new power to reduce, eliminate, or expand 
health benefits for low-income people, including many who are elderly 
or disabled. In return for the flexibility and a temporary increase in 
Federal assistance, States would eventually have to accept a limit on 
the Federal contribution to the program.''
  Now, critics assert it would replace the poors' entitlement to health 
care with a block grant to the States just when the number of uninsured 
is rising. Again, Medicaid a program for poor people, is partially 
funded by the States, partially by the Federal Government. What the 
President is saying is, we will give you, the States, the flexibility 
to determine what kind of benefits and who is covered, if you will, by 
Medicaid. In return for that, though, in the long run, we are going to 
give you less money. So it is really a cost-saving device. But what it 
does is undermine the guarantee that if you are poor and you are below 
a certain income that you are going to have your health benefits.
  It is the same thing in a different way that the President is 
proposing with Medicare in the sense that a program that is provided 
with a guarantee, an entitlement, now ceases to be and the person is 
not sure whether they were going to get their health care or how they 
are going to get their health care or what kind of benefits they are 
going to receive.
  Now, the last thing that is mentioned in The New York Times article 
yesterday is: ``Mr. Bush's proposal for Social Security, first offered 
in the 2000 campaign, would also break sharply with the past by 
allowing workers to divert some of their payroll taxes to individual 
accounts that would be invested in stocks. While its political 
prospects have been dampened by the declining stock market, Mr. Bush 
reiterated his support for the idea last month in his State of the 
Union address. Both sides agree that the coming debate over these 
proposals,'' that is all of them, Medicare, Medicaid, Social Security, 
``will be a fundamental clash of political philosophies over the 
obligations of government, the rights of the individual, and the role 
of the private sector.''
  Again, I am not an ideologue, Mr. Speaker, and I am not talking about 
this in the context of the ideology, whether it is a conservative or a 
liberal idealogy or whatever; I am just very concerned, and I think we 
all need to be, about the practical implications of what the President 
has proposed. When we have programs like Medicare and Social Security 
that are so fundamental to so many people in this country and we talk 
about radical restructuring of those programs in a way that may save 
the Federal Government money, but also risks the types of guarantees 
that are provided traditionally to seniors, I think it is something 
that we better watch very closely. I fear, Mr. Speaker, that with so 
many other things going on, that it may be possible somehow to pass 
significant changes here without us focusing sufficiently on what they 
really mean and what the impact is going to be.
  Now, before I finish, I did want to say that in all of this argument, 
if you will, about health care, I think that there are two things that 
are crucial. One is that the number of uninsured in the country not 
continue to go up, which it has in the last couple of years; and, 
secondly, that we do, in fact, find some way to provide a prescription 
drug benefit for seniors. Because when I am home, when I am in the 
district, I hear primarily those two concerns when it comes to health 
care, which is: I was working, I lost my job, I do not have health 
insurance anymore. Or, I have my job, but the employer decided to drop 
health insurance. Or, my employer still offers health insurance, but 
now he is providing a package that costs me so much out-of-pocket that 
I cannot afford to buy it anymore or to take that option.
  The other thing I hear, of course, very frequently is from seniors 
who complain about the fact that Medicare does not provide a 
prescription drug benefit and that they have tried maybe, in some cases 
in New Jersey, to join an HMO that would give them a prescription drug 
benefit; but they signed up for it, and then later they were dropped 
because the HMO decided it really was not profitable to provide a drug 
benefit to seniors, or now the copay, what it costs them out-of-pocket 
to pay for the prescription drug coverage, again is so high that it 
does not make sense for them to continue to stay in the HMO because the 
benefit is so limited and the cost out-of-pocket is so high.
  So I think we have to understand that for Democrats, we feel that 
these two issues must be addressed: the fact that more and more people 
have no health insurance and the fact that we need a prescription drug 
benefit for seniors. But I would venture to say that with regard to 
that prescription drug benefit, to go the way the President is 
proposing, which is to say that one has to go out into the private 
sector and join an HMO or a PPO or something like that to get one's 
drug coverage, is not the answer.
  In fact, the week before the recess, I actually participated in a 
press conference with Public Citizen; and they did a report on Medicare 
privatization. Basically, the report showed dramatically that HMOs and 
private insurance for seniors does not work; that the experience that 
we have had in the last few years where seniors tried to opt for HMOs 
in many parts of the country were not available, and where they were 
available, maybe they lasted for a few years and then they either 
dropped the seniors or it became unaffordable.
  In my own State of New Jersey, in the last 2 years alone, nearly 
80,000 seniors who had contracted with private HMOs lost their health 
coverage. In other words, the HMOs simply dropped them. So I just do 
not think, if we look at this Public Citizen report, we can come to any 
conclusion other than the fact that saying to seniors that in order to 
get your drug benefits you have to go into an HMO or something like 
that, some kind of private insurance is the answer. It is not. We know 
it is not. It does not work; it has not worked.
  So what the Democrats have proposed and what makes the most sense is 
simply expanding our traditional Medicare fee-for-service program to 
include a prescription drug benefit that would be guaranteed for anyone 
who wanted it. We use the example of part

[[Page 4420]]

B. As many people know, Medicare part A is hospitalization and Medicare 
part B pays for doctor bills, and under Medicare part B, you pay a 
certain amount of premium per month and the Federal Government pays for 
a certain percentage of the doctor bills. We have come up with a plan 
that would essentially do the same thing with a drug benefit. You would 
pay a premium of $25 a month, a $100 deductible, so that would be out-
of-pocket and then after that, 80 percent of the prescription drugs 
would be paid for by the Federal Government and you would have a copay 
of 20 percent. Because of high bills, if one ends up spending as much 
as $2,000 out-of-pocket, then the Federal Government would pay 100 
percent of your costs.
  The last thing and the most important thing, I think, in many 
respects of what the Democrats propose is that we have a clause in our 
proposal that was introduced and voted on last session that says that 
the Secretary of Health and Human Services who administers the Medicare 
program has to negotiate for lower prices for drugs, because now he has 
40 million seniors and he can negotiate for lower prices.
  So basically, what the Democrats are saying is, yes, we want to 
expand Medicare to include prescription drugs; but we want to do it in 
the traditional way, so everyone has it, no one has to go to a private 
insurance or opt for an HMO to get it, you just get it; and the system 
is very similar to what we do with part B under Medicare now for doctor 
bills.
  Mr. Speaker, I see one of my colleagues and I yield to him.
  Mr. RODRIGUEZ. Mr. Speaker, I thank the gentleman, first of all, for 
coming out here tonight and talking a little bit about some of those 
issues that concern us. I know that as the gentleman talks about 
health, one of the things that really bothers me is now, the 
President's proposal, as it deals with the issue of health, one of the 
things that he has done is that he has begun to look at Medicaid, which 
is the monies that go to the most indigent of this country, and he has 
also looked at what we call the disproportionate share. That is the 
money that goes to those hospitals out there that are providing that 
indigent care that have no reimbursement except what we provide them. 
So these are two areas of serious concern because it deals with the 
most indigent, the most needy in our country.
  In addition, he has also looked at what we call the CHIP program. The 
CHIP program for Americans out there is the program that addresses the 
needs of those youngsters, of those parents that are hard-working, they 
are working, they are making $20,000, $30,000, $40,000; but they do not 
qualify for Medicaid because they are not poor enough and they are 
hard-working. When they go to the hospitals, they do not get reimbursed 
on the disproportionate share. So here we have three programs: the 
Medicaid for the most indigent, the disproportionate share for those 
hospitals to help them out, for providing that care, and the CHIP 
program that addresses the needs of those youngsters of those parents.
  He is proposing to lump them all up. Here is a program that is a 
direct attack on the most needy of this country, the ones that are 
hurting the most in health care; and instead of responding and 
providing the needed resources that are needed out there, he is looking 
at providing a block grant and, at the same time, providing those 
resources to the States. But as the gentleman well knows, those States 
are in need right now. Those States are hurting when it comes to health 
care. These are programs that have worked and have somewhat been 
responsive to some of those needs. What is he doing? He is attacking 
the most needy of our population. So that really concerns me. It really 
bothers me. I wanted to share that, because I know the gentleman has 
talked about health care and the importance of health care, and I know 
the gentleman has also been touching on the budget.
  What also bothers me is that as he looks at the budget, he is also 
doing the same thing when it comes to the most needy of our children. 
Under the Department of Health, we have a program that is called Head 
Start, one of the most beautiful programs that we have had for a long 
time. It has been very good. Statistics indicate, it has been shown 
that it has been the program that has responded and has been real good 
for those kids that are out there and has been meeting the needs of our 
youngsters. Yet we know it only represents 40 percent of the kids that 
qualify for Head Start that we are funding at the present time, and it 
only has 2 percent of the early childhood, those kids that are 2 and 3 
years old.
  Yet the President is choosing to destroy this program because his 
proposal is to block grant those monies and give it to the States, when 
right now those programs are being run locally, they are locally 
controlled, and he is going to create, by moving that money from the 
Department of Health to the Department of Education, it is a very 
serious move because right now the Department of Health also with Head 
Start, they work with our parents, they work with our kids; and they 
provide not only cognitive skills and educational skills, but also 
reach out to them in terms of services and needs. So what he is 
choosing to do is he sees these dollars out there, and he is choosing 
to put them in a block grant and throw them at the States.
  Well, I can attest to my colleagues, if they come to Texas where I am 
from, Texas has had a history of not funding full-day kindergarten. We 
only fund half; the rest of the day is funded only by the taxpayer 
through local school districts. So if that occurs, I can attest that we 
will have a real problem, and they are going to destroy a program that 
has been there providing for those needs. By doing this, they are going 
to use that money to supplant because of the fact that they do not have 
the resources to provide the existing services that they have 
throughout this country. So I am real disappointed, after what has 
happened in his efforts that when it comes to education, he has not 
been there.
  I also want to share, and I do not mean to take too much of the 
gentleman's time, but I want to share a couple of other things, because 
there is a pattern here. He decided to attack Head Start and try to put 
it into a block grant; he has attacked the most needy of this country 
with Medicaid, CHIP, and disproportionate share in terms of health; and 
he is also now attacking our veterans. These are the individuals that 
have fought for this country. At a time that we have declared war, he 
is asking Priority 7 and Priority 8 veterans, those veterans that are 
making just about $30,000 or so, for them to begin to pay more than 
what they already do for the services. And at the same time, not only 
is he attacking the resources for our veterans, but he is also 
attacking their kids. Not the kids of the veterans, but kids of the 
servicemen who now we are asking, or who are out there in Afghanistan, 
we are asking them to go to the Middle East, we are asking them to go 
to the Philippines, we are asking them to be in Colombia.

                              {time}  2115

  So those are the same soldiers of those kids that now we are saying 
we do not plan to help fund their education through the assistance. So 
those are the types of proposals that we have before us. At the same 
time, he brings to us a tax cut when we do not have sufficient 
resources.
  If we do have a war, if we do have one, who is going to pay for that 
war? At some point in time every war, and I asked for a CRS study from 
the Congressional Research Office, I have found that for every single 
war we have had, with very few exceptions, we have always had a tax to 
pay for that war. In this case, we do not. It is being paid out of the 
deficit, which means we are asking our soldiers to go out and fight, 
and then we are asking them and their kids in the future to pay for it 
because of the debt.
  So, Mr. Speaker, I am hoping that as we move forward we will have an 
opportunity to talk about these issues and concerns that confront us.
  I want to touch base just a minute on education, because here we have 
a bill that is basically the President's bill. It

[[Page 4421]]

is the Leave No Child Behind Act. Well, for 2003 we are already going 
to leave some children behind, because he has cut $7 billion from that. 
As the proposal comes out for 2004, it is a $9 billion cut.
  So when we talk about a promise, and then we come back on that 
promise of leave no child behind and we cut $9 billion from the 2004 
proposal, and this is at the same time that our States are having a 
rough time, I have difficulty comprehending what the rationale is. I 
have difficulty understanding, when he has verbalized his concerns for 
education, but at the same time he does not display that through the 
form of a good budget.
  The budget basically determines everything. If he cuts taxes and we 
do not have the resources, I do not care what we say about anything 
else, it is not going to be there. So it becomes really important that 
we are forthright about that.
  Now we hear that he is willing to come up with about $50 billion on 
foreign aid to try to pull off this war, not to mention that the war 
might cost us from $100 billion to $200 billion additional. These are 
issues that we really need to go and talk about before the American 
people.
  I want to thank the gentleman for coming up tonight and allowing us 
an opportunity to talk a little about the budget and the issues that 
concern us. I know that the gentleman has been a constant worker, 
especially in the area of health care. I want to personally thank the 
gentleman, and I know we have another colleague that might want to say 
a few words.
  Mr. PALLONE. Mr. Speaker, I appreciate the gentleman's coming down. I 
know he has been a leader on the health care issue as well. Let me just 
make a couple of comments about the things that he said. I think we 
have about 20 minutes or so left.
  The thing the gentleman mentioned when he talked about education, 
that is so important. I do not want to talk about credibility gaps, I 
will not use that word again; but the idea that one makes a promise 
with no child left behind, which means very obviously that no child is 
going to be left behind, when we know that in many parts of this 
country in the public school system children are being left behind 
either because they do not have the money or because they cannot 
locally get the teachers, or whatever the reason.
  So the President gets up with much fanfare a couple of years ago and 
says no child is going to be left behind. But when we get a budget with 
a $9.7 billion shortfall from what would be necessary to authorize and 
carry forth that act, that no-child-left-behind program, it is 
essentially hypocritical to continue to talk about no child left 
behind. So I think this is a perfect example of the kinds of things 
that I have been trying to point out tonight.
  Going back to the health care issue again, the other thing that I 
think is so important is that this week the National Governors 
Conference is taking place. I think it is here in Washington. I am not 
exactly sure. What the President has been trying to do is to sell this 
Medicaid proposal to the Governors by saying, look, we are going to 
give you a lot more flexibility with this program, but you may get less 
money. We may cap the amount of money that you get.
  The Governors have already been coming back on a bipartisan basis, 
some of them, saying this is not such a great idea because we do not 
have the resources. We know that, as the gentleman mentioned, in the 
States because of the economic downturn, most of the States do not have 
the money to continue to pay for these health care programs for poor 
people; or even for those who are working, like in the CHIP program, we 
call it kid care in New Jersey, providing health insurance for kids.
  So what we are seeing is with what the President is proposing and the 
fewer dollars that he is giving out, with the number of uninsured, the 
number of kids that are going to be covered by CHIP are going to be 
reduced. The problem is if we implement this Medicaid program, the 
States are going to have the ability to basically cut back on that as 
well, so we will see more and more people that have no health 
insurance.
  I am not talking pie in the sky here to my colleague. It has already 
happened in my home State of New Jersey. Some States have already 
expanded the CHIP program to cover the parents of the kids, or single 
adults who are working but do not get health care on the job. In New 
Jersey, the Governor has already announced that he has to get rid of 
those. There is even a question now about whether all the kids are 
going to be covered. So this is not something that is abstract.
  The President would have to make sure that he provided significantly 
more resources to programs like S-CHIP or to Medicaid in order to 
guarantee that the programs continue to exist at the current levels, or 
to take in the people now that, because of the economic downturn, are 
not covered by health insurance.
  What the Democrats propose, the gentleman remembers, in our economic 
stimulus package is that we would give more money to the States for 
Medicaid. We would up it by another 2 percent so they would not have to 
put out as much State dollars, which they do not have to cover everyone 
eligible for Medicaid.
  We are saying in these hard economic times the Federal Government 
should do more to guarantee that working people that cannot get health 
insurance are covered. The President is doing the opposite at the very 
time when there are more and more people who have the need. It really 
is a wrong thing to do.
  Let me just indicate, the gentleman from Texas (Mr. Rodriguez) said 
it, we have a problem in health care out there. We would think that as 
a way of responding with the stimulus package, that we would not only 
answer a problem that exists out there such as health care, but we 
could also address the problems that our States are having.
  One of the biggest problems and one of the biggest budget problems 
they have is health. So not only do we help the States in addressing 
the problem of the issue of health care and the deficits, but we would 
also be stimulating the economy by doing just that, and solving a 
problem and doing a good deed in terms of making sure that people have 
access to good quality health care.
  So Mr. Speaker, if I can, I have seen the President in terms of his 
pattern. In Texas, he did exactly the same thing. He reached out to the 
Democratic side, and he was very open about reaching out and trying to 
help in education; but he also did a tax cut.
  In Texas right now they have about a $12 billion deficit also. Now, 
yes, they have a great education bill, but they have no money to fund 
it, very similar to what he did over here. He came out here and reached 
out to Senator Kennedy and the liberals and the Democrats and talked 
about education, did his tax cut and did the education. Now we do not 
have the resources, or we do not have the priority of the resources, to 
fund that same education bill that he has authored, and that same bill 
that he ought to be proud enough to put in the $9 billion that he 
agreed to when he cut that agreement. So we are hoping that he does not 
go back on his word, and that he fulfills that promise of leaving no 
child behind.
  Mr. PALLONE. Mr. Speaker, I appreciate the comments of the gentleman. 
I thank him for coming down.
  I yield to the gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, it is interesting to have two 
Members of the House from the State of Texas. It is a pleasure to join 
my distinguished colleague, the gentleman from New Jersey (Mr. 
Pallone), because he has been a leader on focusing us on the choices 
that have to be made.
  Certainly, my good friend, the gentleman from Texas (Mr. Rodriguez), 
chairman of the Hispanic Caucus, in his prior life was such an advocate 
for health care issues in our own State. I know that the State 
legislature misses him and his leadership. He spoke eloquently of so 
many important issues.
  It concerns me to bring Texas to the forefront again, but as we do 
so, we use

[[Page 4422]]

it as somewhat of a model. It is symbolic, if you will, of the plight 
of States around the Nation, which is one of the reasons why I support 
the Democratic economic stimulus package and our approach to the 
budget, which is to make the choices but make the choices as it relates 
to the domestic agenda, if you will, and, as well, be very cognizant 
that we cannot have it all.
  Whatever side of the war question we happen to be on, and many of us 
have expressed our opposition, but whatever side Members are on, we 
have to realize that this war, if we enter into it, is going to cost at 
least $9 billion to $13 billion a month. That means that we will have 
to make choices as to how we design the budget; whether or not we take 
the leadership of our colleague, the gentleman from South Carolina, who 
has raised a very important question of making sure that we respect or 
show concern for the deficit and make choices for helping people climb 
out of poverty and climb out of a state of economic, if you will, 
deterioration.
  But, unfortunately, I come to the floor to share the laundry list of 
concerns that I have that are not being considered by the present 
administration, that are now the fallout because of the proposed tax 
cut of the present stimulus package, but really the impact of the tax 
cut of just the last fiscal year that is now trickling down to the 
States.
  I left Houston under the very terrible shadow of my community coming 
together to reach out, with community leaders pleading to prevent cuts 
in mental health services. We are at a point now where we are actually 
closing down services, closing offices that serve outpatients in our 
community for mental health, mental illness, because we do not have the 
funding.
  We have policemen, firefighters, counselors, academicians, city 
council persons, mayors, coming together to plead with our State 
legislature. Let me say that the State legislators are certainly 
struggling with the $10 billion to $12 billion deficit in the State 
itself, trying to be responsive; but frankly, the counties and cities 
are feeling the brunt. We are literally closing facilities in Houston 
as we speak. We are literally not responding to the needs of our 
constituents for services dealing with mental illnesses.
  Just yesterday I spoke to a constituent who had a family member 
living with them who truly needed to have outpatient services, truly 
was suffering; one who was in denial and needed services for the mental 
illness that they had but could not get it.
  This is part of the laundry list. If we do not look at a budget that 
is able to be grounded not in a huge $600 billion-plus tax cut to the 
top 1 percent of the Nation, leaving those in the working middle class 
economic level without any remedy whatsoever, this is the real face of 
the huge deficit that this administration is building, people who are 
now being closed out of services.
  Let me mention something that only gets mentioned, I guess, when we 
go to town hall meetings. I think we frankly, and this is to the 
Speaker, need to address this, and this is what we call the notch 
babies, or the question of making fair that unequal pension program 
where teachers are not able to access the Social Security system 
because of a certain pension system that they are in in particular 
States. That hits Texas a lot and several other States. Those are some 
of our senior citizens who are in a program that now cannot be funded, 
or they cannot move out of that program to access Social Security, and 
they are barely making ends meet.
  The gentleman has been a leader on the guaranteed prescription drug 
benefit through Medicare. One of the issues that Democrats, I believe, 
to a person, have made a commitment to see through, and frankly I 
believe we have made a very strong and valiant commitment to see it 
through in this session; but that, of course, is a choice that would 
have to be made in a budget designed to make choices for social needs 
and needs of individuals' domestic agendas as opposed to the agenda 
that may lead us into war.
  That is a concern that I have: Are we going to be able to tell those 
seniors who are today making choices of rent, making choices of 
utilities, and making choices of cutting their drug prescriptions in 
half? Of course, what they do is, they do that themselves. Therefore, 
they cause detriment to their health because of the fact that we are 
not able to build into our budget or be able to fund a guaranteed 
Medicare prescription drug benefit.
  I just came from a reception honoring a group that deals with world 
hunger. I was told at this meeting that we are not able, or that we 
have some of the highest percentages of malnutrition in the United 
States, that our children are malnourished.
  I will say to the gentleman that Texas is again at the top of the 
list for malnourished children and children living in poverty. The key 
is that many people complain about the school breakfast and lunch 
program. We are being told that some children in America are not even 
able to match the 40 percent amount that they need to be able to pay 
for lunch and pay for breakfast.

                              {time}  2130

  I have heard a lot of complaints. I remember 2 years, 4 terms ago, I 
am trying to remember, 1995, I guess, when we had a valiant fight to 
preserve school lunches or to make sure that people knew, this Congress 
knew, in fact, some of our colleagues knew that school lunches or the 
cuts in school lunches were just unacceptable. I think we prevailed 
upon that. But here we are now, full circle, where the funding for 
school lunches, where the States are suffering, and the children of 
families cannot afford the matching amount. This is a question of 
making choices, of living in poverty or accepting the fact that our 
children live in poverty and are malnourished.
  I heard my good friend from Texas talking about Medicaid, but I hope 
it was mentioned that we have a trickle-down effect from that because 
we have HHS regulations loosening the, if you will, the sort of 
guidelines that the State may utilize. What is the reason? Not to make 
it easy on the State to be able to serve its constituency but to make 
it easy on the State to cut people off of Medicaid.
  I think in this day and time, some of those very families on Medicaid 
have young men and women now facing harm's way in the United States 
military. Some of those very same families are families that are in 
need of Medicaid. And now because of loosening guidelines, the State 
may pick and choose who will be able to access health care in our 
community. We just passed a welfare bill, and you heard the debate on 
the floor of the House. We had a bill that would provide a safety net 
for those who are trying to move themselves out of welfare who may be 
coming to a point of reaching sort of a cap on Medicaid and child care. 
And now we have passed a bill that did not provide a safety net in 
child care. In fact, there were not enough dollars for those mothers 
who want to be able to move or those parents, single parents, whoever 
it might be, to step out of welfare and have children that need child 
care. Here is a safety net that is going by the wayside.
  So I believe the budget approach that we want to take is reasonably 
adjusting to and addressing a domestic agenda that this Nation can be 
proud of; a domestic agenda that would include a guaranteed Medicare 
prescription drug benefit, that would include recognizing the needs of 
the individuals suffering from mental illness. We have always had a 
problem with that. We have yet to pass in this Congress the issue of 
parity. And I say that I always have to bring up my dear friend and all 
of our friend, Senator Paul Wellstone, who was a vocal fighter for 
parity in mental illness. We have not reached that. And the reason why 
we could not complete that deal, if you will, was on the question of 
the budget and finances and choices. Why should we, this Congress, year 
after year and session after session deny people who rightly deserve 
the consideration of the people's house and their representatives in 
Washington to be able to provide funding or at least matching funds to 
their State governments?
  Frankly, I believe that it is a shame on us, shame on our House and 
shame

[[Page 4423]]

on all of us that we are not able to address these questions. We will 
not be able to do this if we do not sit down in a reasonable manner and 
put forward a budget that does not spend all of its time carving out 
the needs of others just in order to respond to a $600 billion 
permanent tax cut or more. And I want to put the word in there 
``permanent,'' and I think my good friend who is on the floor said in 
times of need we always made sacrifice.
  I am not a supporter of the war but if, for example, that occurred, 
that is time for sacrifice. A sacrifice does not entail a $600 billion-
plus permanent tax cut to individuals at the 1 percent tax bracket. But 
let me add this as I close. Not only the 1 percent tax bracket but the, 
I believe, nonsensical explanation of giving relief on dividend income 
suggesting that it has been taxed twice. It has not been taxed twice. 
It is taxed as income to the corporation. They then give the dividend 
to the recipients of the dividend. It is income and the income of the 
individuals. So you are taxing the dividend. The dividend should not 
have a life of its own. It is taxing the individuals who, I believe, 
would be willing to sacrifice while we are in a state or a condition 
that requires sacrifice of all individuals. That is ridiculous.
  And let me close on a personal note, because it is very near and dear 
to us in my community and that is NASA. And, of course, there is a 
great debate and will be a great debate on the human space shuttle, but 
I am very gratified that over the years we have gained friends in this 
House realizing that the human space shuttle generates research in HIV/
AIDS and stroke, heart disease and cancer. And all of us have offered 
our deepest sympathies to the Columbia 7 families and to the NASA 
family, people who are committed to expanding our horizons. Well, that 
is something that we considered a part of America's culture and 
achievement.
  Now, I hear discussions of budget cuts that may be looking at cutting 
human space flight before we even find the answers of the Columbia 
tragedy and not looking at it for what it has done for Americans and 
America and the world, giving us the opportunity to push the 
intellectual research, scientific and medical envelope to provide new 
discoveries that would help create better lives not only for Americans, 
for people around the world.
  We have to make those kinds of choices if we continue along these 
lines of deficit building, huge tax cuts and a budget that does not 
focus itself on the needs of people in this Nation, and of course the 
pending winds of war that may cause us to spend enormous amounts of 
money, and not only at this time but in the rebuilding of the nations 
that may be impacted as we are already doing in Afghanistan.
  So I want to thank the distinguished gentleman for coming to the 
floor and bringing these very vital issues up. It pains me to have to 
be able to say to constituents over and over that we are trying to work 
on your issues and we are seeking relief when they are suffering on a 
daily basis. I think we need to get to work and focus on a budget that 
focuses on a domestic agenda that makes sense to Americans, but most 
importantly addresses the pain that many Americans are suffering right 
now today.
  Mr. PALLONE. Mr. Speaker, I think we have just a few more minutes, 
but I am really pleased that the gentlewoman raised the issue, first of 
all, of the cost of war and some of the aid packages like to Turkey 
that has been in the paper the last few days and also to NASA. Again, 
my point this evening when we started this Special Order was to discuss 
the President's rhetoric versus what he is actually doing with the 
budget and all of promises, if you will, that are made about turning 
the economy around, creating more jobs, providing health care, 
providing prescription drugs, not raising the deficit. And then what we 
find is that these tax cuts do not really help the average guy, do not 
do anything really to stimulate the economy and are creating these huge 
deficits.
  But what the gentlewoman is pointing out is that in addition to that 
is we do not have a true budget at all because we are not including the 
cost of the war which, as the gentlewoman said, is estimated at 
something like $100 to $200 billion. And that does not include the AID 
package. Of course, I point to Turkey because that has been in the 
paper. I do not know how many other countries will be asking for money. 
I think that was in the tens of billions, what is being discussed.
  None of this is in the budget. And so the reality is we may wind up 
with a situation that by the time this budget is adopted in the 
appropriation bills by the end of the fiscal year where there have to 
be even more cuts if you are going to implement, more cuts in health 
care, more cuts in the things that we were discussing, education, if 
you are still going to have these tax cuts and pay for the cost of the 
war or perhaps bigger deficits.
  Again, it is just a very sad situation because I think that the 
President has to be forthright with what he is really doing and not say 
that we are going to be able to turn the economy around and do all of 
these things and give tax cuts and fight a war and not increase the 
deficit. It does not add up. It just does not add up. And it is really 
incumbent upon us over the next few weeks as we move forward and adopt 
some sort of budget to make the points that the two of you have been 
making tonight because we are not, I do not think we are being honest 
with what is really going on around here and we are trying to be 
honest. And we have to call the President and the Republican leadership 
to task about what they are really going to be able to accomplish. So I 
want to thank my colleagues.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, just for a moment, I want to 
make sure the gentleman emphasizes that they are promises made, but 
they are promises not kept.
  The one point I want to make on a prescription drug benefit, while we 
have such a disagreement, if you will, is because the one that has been 
promised that has not yet been consummated, if you will, still requires 
seniors to take money out of their pocket, still is sort of a managed-
care-type proposal. And my only fear, as I mentioned by starting out by 
saying that I have doors closed on those suffering from mental illness, 
is that I have experienced 2 or 3 years ago HMOs just closed up shop on 
my seniors and left. So I just do not want to see that happen again, 
and that is why I think this is an important challenge.
  Mr. PALLONE. Mr. Speaker, the notion that we will be able to rely on 
the HMOs in the private sector to provide the drug coverage or any kind 
of coverage is totally belied by the reality of what has happened in 
the last few years. In New Jersey alone in the last 2 years 80,000 
seniors taken off, HMOs dropped them.
  If we do not provide across-the-board prescription drug plans the way 
the Democrats have devised, we have no guarantee that the seniors will 
get their drug coverage. I cannot believe after the experience we have 
had the last few years that has dramatically shown that HMOs will not 
provide the seniors with the drug coverage, that anyone, including the 
President, could suggest that somehow that is not the answer. It is, 
again, the suggestion or the promise that you will do something. The 
reality will be very different because they will not be able to find 
that kind of coverage. It will not exist.

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