[Congressional Record (Bound Edition), Volume 151 (2005), Part 14]
[Senate]
[Pages 19615-19616]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      RECONCILIATION INSTRUCTIONS

  Mr. GREGG. I rise today basically to speak about another issue, and 
that is a letter which I have received as chairman of the Budget 
Committee and which was sent to the majority leader, the Speaker of the 
House, and the chairman of the Budget Committee on the House side by 
the leadership of the Democratic membership of the Senate and the 
House--Congresswoman Pelosi; John Spratt, who is ranking member on the 
House Budget Committee on the Democratic side; Senator Reid, who, of 
course, is the Democratic leader; and Kent Conrad, who is the ranking 
Democratic member of the Budget Committee.
  The letter asks that we indefinitely postpone reconciliation, 
reconciliation being the mechanism by which we address the entitlement 
spending and tax policy here at the Federal level. It is an outgrowth, 
of course, of the budget process.
  Now, the letter itself, if I can look at it, although I can hardly 
see it--I wish they would send these letters in larger fonts so those 
of us getting older would not have to take out our glasses to read 
them. But, in any event, the letter itself is structured in a way to 
assert a number of items, boldly assert items which essentially are 
inaccurate. In fact, the boldness of these inaccuracies is such that it 
would be humorous if they were not going to, I am sure, become part of 
the nomenclature of the left in the country and, indeed, be carried 
forth by the echo chambers, such as National Public Radio, which speaks 
for the left.
  But their language says this:

       Now is not the time to cut services for our most 
     vulnerable, cut taxes for our most fortunate, and add $35 
     billion to the deficit.

  That is the basic theme of the letter.

       If allowed to go forward, this bill--

  They are talking about the reconciliation bill--

     would likely cut programs that many victims of Hurricane 
     Katrina will be relying on, including Medicaid, food stamps, 
     and student loans.

  Those two statements are, as I said, boldly inaccurate and reflect a 
failure to accept history and a failure to look at the specifics of the 
reconciliation bill as it passed the Senate.
  Now that does not surprise me. I have to admit, and the folks who 
signed this letter readily admit, they did not vote for the budget when 
it first passed 8 months ago or 7 months ago, however long ago, 6 
months ago. When it first passed, these four individuals and their 
caucuses strongly opposed putting in place here in the Congress a 
budget that had fiscal discipline, and they voted against it. So it 
should not come as a surprise and this letter should not come as a 
surprise that they are still against it and they still want to 
indefinitely postpone the key mechanisms which will make this budget 
effective.
  But what is a little surprising is that they would assert such 
inaccuracies in their letter. Let's begin with the tax inaccuracy. They 
must be ignoring or they must not just look at history. They must not 
look at the history of the Kennedy tax cuts and the Reagan tax cuts, 
and most recently the George W. Bush tax cuts because one thing we 
proved beyond any reasonable doubt is that when you significantly cut 
taxes on the productive side of the American economy, you create 
economic activity, and as a result, you create jobs and you give people 
work and you create revenues for the Federal Government.
  The numbers are incontrovertible. In the last 3 years, revenues have 
been jumping dramatically relative to the base we hit as a bottom as a 
result of the recession we experienced as a result of the bubble 
bursting, the Internet bubble of the 1990s, and the effects of 9/11. In 
fact, 2 years ago revenues jumped by 9 percent.
  This year, revenues are literally going to jump by more than that. 
The revenue projections for the next few years are projected to 
increase by 7 percent, 6 percent, 7 percent. And the deficit has 
dropped by over $150 billion from the original estimates purely as a 
result of economic activity that has been stimulated in large part 
because we have reduced the tax burden on the productive side of the 
ledger and created an incentive for people to go out and invest. As a 
result, there is an incentive for people to create jobs.
  We had some of the best job creation in the history of this country 
over the last 2 years. As a result, people are paying taxes and 
revenues are going up. It is totally ignored and misrepresented in this 
letter. More specifically, and I think the thing that I find most 
unreasonable about the terms of this letter--or, as I say, most boldly 
inaccurate--is its representation that the reconciliation instructions, 
as they relate to the mandatory accounts, will somehow affect programs 
that benefit people relative to the problems which we have in the South 
today as a result of Hurricane Katrina. Nothing could be further from 
the truth, be more inaccurate, or be more of an attempt to use the 
trauma and tragedy of Katrina to assert a political agenda here in the 
Congress of the United States, which they have been trying to assert, 
as I said, since they voted against that budget 6 months ago. The two 
have no substantive relationship, but there is an attempt now to use 
the political arena to try to link them up.
  The fact is that the reconciliation instructions in this bill will in 
no way reduce student loans. In fact, the committee which has 
jurisdiction over this issue, under the extraordinarily able leadership 
of Senator Enzi, is proposing a bill which will expand rather 
aggressively student loans, while saving money for the Federal taxpayer 
by addressing excesses in the lending community.
  In fact, the proposal from the HELP Committee will increase Pell 
grants, will increase the availability of loans to students, and will 
reduce the interest rates on those loans. If we do not go forward with 
reconciliation and use reconciliation as a vehicle to protect

[[Page 19616]]

this higher education initiative that comes out of the HELP Committee, 
we will actually end up increasing the costs to students. This letter 
is totally and obscenely inaccurate on that point.
  It is equally inaccurate on the issue of pensions. Without 
reconciliation instructions on pensions, we are going to see more and 
more companies thrown into bankruptcy. As a result, the taxpayers are 
going to have to pick up the pension obligations of those companies. 
The people who benefit from those pensions are going to see their 
pensions dramatically reduced because, under the bankruptcy rules, you 
can significantly cut your pension liability. But if we correct the 
pension laws and if we use reconciliation to increase the premium cost 
of the pensions, which will be paid primarily by the corporations, we 
will be able to save some of the pensions which are now in dire 
straits.
  The only way we can do this is probably through reconciliation. So if 
you don't have reconciliation, you are going to see more companies 
going into bankruptcy. You are going to see more pensions being wiped 
out. And you are going to see more employees--who have worked their 
whole life, invested in their company--find that that pension, which 
they thought they had, is actually going to be cut, if you follow the 
thought process which is being proposed here by the Democratic 
leadership of the Senate and the House of Representatives and which is 
totally the opposite of what their language in this letter talks about.
  It is a total inaccuracy; 180 degrees different from the actual 
language of this letter will occur. People will lose their pensions. 
The cost to the American taxpayer will go up if we do not have 
reconciliation dealing with pensions.
  The third area which this language talks about is Medicaid. Let's 
talk about Medicaid. The reconciliation instructions suggest that we 
reduce the rate of growth in Medicaid over the next 5 years from 41 
percent to 40 percent. It was originally going to be back to 39 
percent, but we went from 41 percent to 40 percent, a $10 billion 
reduction in the rate of growth--not in spending increases, in rate of 
growth, not a cut, on a $1.3 trillion base. In other words, we are 
going to spend $1.3 trillion on Medicaid over the next 5 years. What we 
asked in the budget was that we slow that rate of growth by 1 percent. 
We let it grow by 40 percent over the next 5 years instead of 41 
percent or $10 billion.
  And how was that going to be accomplished? It was going to be 
accomplished in concert with the Governors who are going to get much 
more flexibility in the way that they deliver the Medicaid services. 
Almost every Governor who came to us said: We will be able to deliver 
better services and cover more people if we get this flexibility than 
if we don't get the flexibility. As a result, we can certainly handle 
the 1-percent slowing of rate of growth of increase in exchange for 
getting the flexibility which will give us the capacity to cover more 
people. Dramatically more people will be covered if we use our 
reconciliation vehicle to change the law so that Governors don't have 
to go through all the hoops they have to go through today in order to 
address Medicaid, so that we don't have people defrauding the system as 
we have today but, rather, have a system that is honest and covers 
people who need to be covered. But you can't get there from here unless 
you use reconciliation because you can't pass a bill in this Senate 
with 60 votes. You can't get 60 votes because the party on the other 
side of the aisle simply refuses to do anything constructive in this 
area, and they have talked walked away from the table. So you need 
reconciliation protection. In fact, there will be no services cut.
  To tie it into Katrina is so gross in its representation as to its 
inaccuracy as to be beyond blatant politics. The simple fact is, the 
reconciliation instructions assume no savings in Medicaid over the next 
year. All the savings come in years two, three, four, and five. 
Obviously, most all the spending for the Katrina situation is going to 
occur in the next year. To tie it into Katrina is absurd.
  This letter is not surprising because it comes from people who oppose 
discipline in the budget to begin with, but its assertions are, even by 
the standards of politics in this body, bold in their inaccuracy.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Kansas.

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