[Congressional Record (Bound Edition), Volume 151 (2005), Part 15]
[Senate]
[Pages 20013-20014]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         BUDGET RECONCILIATION

  Mr. GREGG. Mr. President, I rise to speak a little bit about the 
schedule of the reconciliation bill which this Congress was supposed to 
actually take up this week. As we all know, reconciliation is one of 
the key procedures by which the Congress addresses spending, 
specifically spending in mandatory programs and tax policy. In the 
budget which we passed about 5 months ago, we included reconciliation 
instructions which essentially say to committees within the Senate and 
within the House that they are to change the entitlement programs they 
have jurisdiction over in order to slow the rate of growth of a number 
of those programs or in order to generate revenues from those programs 
which might not otherwise be coming in in order to reduce the size of 
the deficit and in order to make the Government more affordable.
  This reconciliation proposal which came forward requested 
approximately $34 billion in savings on the entitlement side, $70 
billion in tax policy changes. It was to be executed on or preceded 
with this week with a reconciliation bill on the spending side of the 
ledger. In consultation with the leadership, who obviously makes the 
final decisions, and with the House, we have decided to move the date 
of reconciliation so the Budget Committee will report a reconciliation 
bill on October 26. This will essentially allow committees, especially 
the authorizing committees, which are now heavily engaged in the issue 
of trying to address the catastrophe brought on by Katrina, the 
opportunity to have time to order their reconciliation changes so they 
can bring forward effective bills which will accomplish the 
instructions as proposed.
  Some have asked, why go forward with reconciliation at all in light 
of the Katrina situation? I think it is important to recognize what 
reconciliation is in relationship to a disaster, a catastrophe of the 
size of Katrina. Obviously, the impact on the Gulf States has been 
enormous and we have to do whatever we can to help the people of the 
Gulf States rebuild and reestablish their lives in some semblance of 
order and give them some opportunity for hope. And we are doing that as 
a Congress. The administration is trying to do that and obviously the 
States and local governments are trying to pursue that activity.
  We will get past the Katrina problem. The people of the Gulf States 
are energetic, enthusiastic, and productive people, as are all 
Americans, and America has come to their aid as a nation, which we 
should. Obviously it is going to take time, but this is a one-time 
event--hopefully never will happen again, and has never happened 
before--of this magnitude, and we should be able as a nation to manage 
and correct the situation and give relief to the people of that region 
and do the reconstruction that is necessary. That is a one-time 
spending event.
  What the reconciliation instructions address are the long-term 
implications especially of entitlement spending. We know that over the 
next 10, 20, 30, 40 years we are looking at massive increases in 
spending on mandatory programs, especially the health programs of the 
Federal Government, primarily because of the aging of the baby boom 
generation. As a nation, we need to set policies in place today which 
will allow us to be able to afford the costs which this huge generation 
is going to incur in order to maintain its health and also its 
retirement.
  Reconciliation is a very small step down that road of trying to 
improve the policy so we can better deliver services to seniors who get 
Medicaid and other people who get Medicaid--obviously children--and at 
the same time make it affordable. The reconciliation instructions cover 
5 years. In fact, the Medicaid instruction, which has been the most 
contentious, anticipates no savings in the next year. So clearly it has 
no impact on the Katrina event, most of which money for that 
restoration will occur within the next year.
  Over the next 5 years, what we proposed is slowing the rate of growth 
of Medicaid under the reconciliation instructions from 41 percent back 
to 40 percent. I had hoped we would go from 41 percent to 39 percent. I 
thought 39 percent was a pretty good rate of growth, but that was not 
acceptable so we are going to a 40-percent rate of growth over the next 
5 years, on a $1.1 trillion spending program. That is what Medicaid 
will be over the next 5 years. We are suggesting that we will save $10 
billion--$34 billion over the whole reconciliation instruction--on a 
$1.1 trillion spending program over 5 years, with none of it occurring 
next year.
  How can we do that? We can actually do it by delivering more services 
to more people. If we give Governors greater flexibility with their 
Medicaid funds, Governors have told us with more flexibility they can 
cover more people and do it at lower cost. That is called good 
management. It does not take a lot of good management to shave 1 
percent off the rate of growth, which will be around 40 percent. So it 
is a very doable event, and we need to proceed with it.
  There are other committees that have received reconciliation 
instructions that actually want those instructions, that want to be 
able to proceed forward because they see opportunities to improve 
Government and to generate a better return for taxpayers. One, of 
course, is the Commerce Committee. Another is the HELP Committee which 
has reported out an incredibly strong higher education bill where they 
are basically going to expand rather significantly the dollars 
available to people who go to college through Pell programs and other 
programs, under the leadership of Chairman Enzi. That bill has been 
reported out, has saved about $7 billion, but has also generated about 
$6.5 billion which will go back into student loans. It has done it 
without impacting student loans but actually expanded student loans by 
taking action in the area of lenders accounts. Chairman Enzi deserves 
lot of credit for it and we should proceed with that.
  Chairman Enzi also reported out a bill, along with the Finance 
Committee, to address the pension reform issue. We need to address 
pension reform. We are not going to be able to do it unless we do it in 
reconciliation. We know we have major bankruptcies coming at us. 
Regrettably some of them are in the airline industry, maybe even this 
week. There are rumors about that. We know when people go into 
bankruptcy, their pension funds go into the PBGC. We know the PBGC has 
somewhere between a $30 billion and $50 billion projected unfunded 
liability or deficit. If we are going to be able to maintain those 
accounts so that people who have been planning all their life to 
receive pensions, if they are in a company that goes bankrupt, still 
receive some percentage of their pensions rather than get completely 
wiped out, we have to have a solvent PBGC. So Chairman Enzi and 
Chairman Grassley have both reported out bills to try to accomplish 
that and they are using reconciliation to proceed in that direction, 
and that is very possible. So we need the reconciliation bill to put in 
place policies which do not address the immediate problem of today, 
which is obviously the Katrina issue, or the problem even of next year 
or the year after.
  These policies under reconciliation will address 5 years, 10 years, 
15 years down the road and address them in a positive way. They are 
small steps, but they are important steps, and that is why we need to 
go forward with reconciliation. That is why we have set this date and 
moved it a month but only a month.


                         Katrina Relief Effort

  On another issue, and that is the issue of Katrina and how we are 
funding Katrina and the relief effort, we

[[Page 20014]]

have now passed two supplementals totaling about $61 billion. We know 
we are going to get another supplemental probably within 3 or 4 weeks 
for another $50 billion. We also know that moving through the Congress 
is a whole series of initiatives relative to trying to give relief to 
the people in the Gulf States, which is the goal of all of us. We 
recognize that things such as tax packages, such as WERDA, such as the 
COPS program, we have on this bill--in fact, I think there is an 
amendment for the COPS program of $1 billion. There is an amendment 
dealing with Medicaid which will cost $4 billion to $6 billion. There 
are flood insurance issues. The simple fact is that the cost of this 
disaster, catastrophe, is going to be huge. The problem we have, as I 
see it right now--and we are willing to pay that price, by the way. I 
am perfectly willing to pay whatever is the appropriate price to make 
sure we give these people an opportunity to rebuild and restore their 
region in a logical manner. I have suggested that we set up a 
commission with a single leader along the lines of the Hoover 
activities in the post-1927 flood where there would be a focal point 
where all the Federal programs would come together and the money would 
be distributed in an orderly and planned manner working with the States 
and the local region. Then we can set up such an authority and put a 
person on the ground who has a national reputation and knows what he or 
she is doing and can manage this in a way that is orderly and has a 
reasonable audit function and reasonable management function so we make 
sure we get value for the dollars so they are not wasted. We have seen 
some proposals that would not work and would have wasted money already.
  What we are not seeing is that sort of cooperation in the Senate or 
Congress. We have ideas come from all different sides. We have ideas 
coming from every committee--we have creative people on every 
committee--and we have ideas coming from the administration, but there 
does not appear to be any focal point for management of these ideas so 
we are prioritizing what we need, how we need it, and where it should 
come from and where it should go.
  We have ideas coming out of one committee that are for flood 
insurance, or amendments on the floor that already represent $4 billion 
to $10 billion of new spending, or we have ideas coming out of the tax 
committees or ideas coming out of the appropriating committees. Since 
everybody wants to respond and respond effectively, there ought to be a 
management process in the Congress--and in the White House, by the 
way--that says this is what we prioritize as needed. This is what we 
want the Congress to move on quickly. Let's take a hard look at what 
will work and what will not work.
  I am sorry we have not seen that yet. As chairman of the Budget 
Committee, I have been extremely concerned about this because I think 
we are going to wake up 6 months from now or 3 months from now and 
realize that a haphazard approach has not been effective either in 
resolving the problems in the gulf coast or in managing the taxpayers' 
money effectively.
  I am hopeful we will see a little more order in this process. I 
implore our leadership to give us such order.
  I yield the floor.

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