[Congressional Record (Bound Edition), Volume 156 (2010), Part 1]
[Senate]
[Pages 582-585]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         CONRAD-GREGG AMENDMENT

  Mrs. FEINSTEIN. Mr. President, I wish to say a few words in favor of 
the Conrad-Gregg amendment which will shortly be before us and in 
opposition to the Baucus amendment.
  I have worked for some time to try to produce legislation that would 
create a commission which could be like a BRAC commission and deal with 
what I consider to be the most formidable problem facing this 
government.
  Every Wednesday during the summer and spring, I have a constituent 
breakfast. One of the things I do at that breakfast is show what debt 
and deficit really means. One of the best ways--you learn this when you 
do a budget, and I learned it when I was mayor of San Francisco and for 
9 years put together a budget--is to look at what is actually spent, 
total numbers. That gives you the real clue. It is called outlays, 
Federal outlays.
  What have Federal outlays been? In 2009, 50 percent of everything the 
Federal Government paid out went to entitlements. What are 
entitlements? Medicare, Social Security, veterans' benefits--things 
that cannot be controlled--if you are entitled to them, you get them. 
Look at interest on the debt, which is 5 percent. If you look at 
discretionary defense, it is 18 percent. And if you look at everything 
else the Federal Government does that everybody talks about--education, 
agriculture, justice, the 22 agencies in Homeland Security--it is just 
16 percent of what is spent. If you add together the 50 percent and the 
5 percent of interest, we see 55 percent of everything the Federal 
Government spends this year cannot be controlled. We have to spend it. 
All the rest that is discretionary is rather small in comparison. If we 
project that out 10 years--and I must say that new numbers are coming 
out tomorrow, so this is the latest number I have--entitlements go up 
to 56 percent and interest on the debt to 14 percent; that is, 70 
percent of everything that will be spent in the year 2019 if things are 
projected forward cannot be controlled. Discretionary defense is 16 
percent, and nondiscretionary--again, everything else--is 14 percent. 
If you wanted to balance out, you could eliminate everything in 
discretionary spending and you could not solve the problem.
  That is what is happening. Entitlements are expanding to an 
inordinate amount of what the Federal Government pays out every year. 
It does not matter whether something is in the budget or not in the 
budget; if you

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have to pay for it and spend it, it contributes to the deficit and that 
translates into debt. It is a very major problem.
  That is why I rise today in support of the amendment offered by 
Senators Conrad and Gregg to establish a bipartisan commission to 
tackle this issue and look at these programs--namely, Social Security 
and Medicare--and make some recommendations as to how they can be 
changed, amended, melded to essentially be able to maintain themselves 
over time. We know both these programs are the third rail of American 
politics. Past Congresses and past Presidents have failed to take the 
steps necessary to ensure their long-term viability. Social Security 
will start running out of money in 2037, and Medicare will start to run 
out of money before the end of this decade. In 7 years, in 2017, 
Medicare will begin to run out of money.
  This is an opportunity to take a concept which has worked before--
namely, the Greenspan Commission, which in 1983 added years to Social 
Security solvency--and have a 1-year commission, which is the Conrad-
Gregg commission, to deal with this debt. It would be an opportunity to 
get our Nation's finances back on track. If we could have done it, we 
would have done it. If we could have done it, why didn't we? Why year 
after year do we refuse to face the issues? The Greenspan 
recommendations, including a change to the trust fund revenue 
structure, actually won bipartisan support. Those recommendations were 
adopted, and they were credited with saving Social Security at the 
time.
  More recently, the base realignment and closure process, known as 
BRAC, and the Homeland Security commission following 9/11 made 
recommendations. Many of those recommendations were accepted. The BRAC 
Commission had a process which all of us sort of derided and did not 
like, but it got the job done. They presented recommendations to the 
Congress; the Congress could vote them down. That decided the question. 
That is what the Conrad-Gregg amendment would do.
  We all see the gravity of what is happening. As we vote to increase 
the debt limit for the ninth time in 8 years, we are not able to do 
anything about the biggest consumers of debt--entitlements--because 
they are such valuable programs to people and no one wants them 
touched.
  This commission would be bipartisan. It would be composed of 18 
members--10 Democrats, 8 Republicans; specifically, 16 Members of 
Congress split evenly between each party and 2 administration 
officials. Their charge would be to come to grips with this situation 
and make a series of recommendations on an expedited procedure that 
would come to the Congress, and we would either vote it up or vote it 
down. Everything would be on the table. The scope of the commission is 
broad enough to include all possibilities for improving our budgetary 
outlook. The commission would issue this report before the end of the 
year. Mr. President, 14 of the 18 Members must approve the report 
before it could be presented to us, and Congress would be required to 
vote on the report, as I said, with expedited consideration before the 
end of this year. So for the first time, in a matter of months, we 
would have before us some recommendations. How do we tweak Social 
Security to enable it to go past its doomsday? How do we handle 
Medicare to see that it is viable throughout the next three, four, five 
decades? It does not circumvent congressional procedures, nor does it 
exclude elected officials from shaping the final report.
  The Social Security trust fund runs out of money in 2037. If we do 
not do anything, it is going to happen sooner. Today, 50 million people 
depend on Social Security. By 2050, 82 million people--another 32 
million people--will receive Social Security.
  Most people do not realize that one-half of American workers today 
have no retirement or pension benefit from their company. I did not 
know this. One-half of all retiring workers have no retirement or 
pension benefit from their company. Social Security is what they will 
have. With the problems in the workplace today, with the increase in 
bankruptcies, we can be sure that Social Security is only going to 
become more important as the decades go on.
  In 2007, Social Security alone kept 35 percent of older Americans out 
of poverty. That is how important it is. Thirty-five percent of our 
seniors would be living in poverty if it were not for Social Security. 
And for almost two-thirds of people, Social Security makes up more than 
half their income. So Social Security is really the breadbasket, it is 
the opportunity for many seniors and pensioners and retirees to 
continue to live and stay out of poverty.
  Medicare is in even worse shape. By 2017, the hospital insurance 
trust fund will be depleted. In last year's Trustees report, insolvency 
was projected in 2019. Medicare is unsustainable over time.
  That is something that none of us wants to admit, none of us wants to 
face. The record is clear: None of us has faced it. None of us has done 
anything about it, and yet the time is ratcheted sooner and sooner.
  So once the hospital trust fund is exhausted, it will be necessary to 
reduce the amount of benefits payable. What does that mean? That means 
after 2017, only 81 percent of benefits will actually be paid. Think of 
that. Is it all right to let that happen? Is it all right to do 
nothing? Is it all right to say: OK, we know that come 2017 only 81 
percent of the benefit an individual should get will be paid, and it is 
because we are not willing to do anything about it? That is what we are 
saying if we vote no on the Conrad-Gregg resolution.
  Medicare Part B and Part D prescription drug coverage will 
increasingly outpace beneficiary income over time. So funds won't be 
there to pay for prescription drug benefits. That is the simple result. 
Without finding an adequate way to fund these obligations, those funds 
will have to be borrowed or will be nonexistent, and this further adds 
to the debt we see coming down the pike. All of it adds together to the 
financial insolvency of both Social Security and Medicare.
  That is why a commission is needed--because we haven't done what we 
should have done. We haven't made the tweaks, the changes, the 
adjustments. We haven't looked at means testing. These programs were 
founded on the belief that no matter how wealthy you are, you should 
get these benefits. My own view is that should change. They should be 
looked at more as insurance programs. If you don't need them, if you 
are a millionaire, why should you have these benefits? If you need 
them, if you are part of the half of America that has no pension or 
retirement benefit, if you earn under, let's say, $250,000 a year as a 
retiree, maybe you should still get them. But if you earn more than 
$250,000, with this picture facing us, maybe you should pay your own 
way.
  These are some of the decisions that have got to be made, and we 
can't keep putting them off because they are unpleasant, because the 
more we put them off, the bigger the troubles get. That has been the 
case in the 17 years I have been here. I have watched this, and it 
keeps going up and up and up. So the problem is apparent, but it has 
been ignored. It has been shoveled under the rug. It has never been 
addressed, and that is why we need a commission.
  I cosponsored a bill two Congresses ago with Senator Domenici and I 
cosponsored a bill this Congress with Senator Cornyn to create a Social 
Security-Medicare commission. Mine was not composed of Members of 
Congress, but there was opposition. People felt, well, if this body is 
going to have the ability to make a recommendation that may result in 
having to put more money into the system, either by increasing the 
payroll tax or any other way, then it ought to be the Members of the 
Congress or the Senate who make that recommendation. Senator Conrad and 
Senator Gregg took that as a kind of mandate and said: All right, we 
will do that, and here is what we propose.
  I am very glad the Senator from Florida is on the floor. We have 
worked as part of this group together, come to several meetings. I 
guess it would be

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fair to say there are about 16 or 17 of us who have worked together 
with Senator Conrad on the Democratic side on this, and we do so 
because we recognize doing nothing doesn't save Medicare and doing 
nothing doesn't save Social Security. But doing something may, so that 
is why we need a commission. This will never get done if we follow 
regular order in the Congress. For 17 years, I have watched that 
regular order year in and year out, and nothing has happened. I 
remember Fritz Hollings standing right there on the floor talking about 
keeping money from going out of the trust funds. As you know, now it is 
an accounting judgment. Everything goes into one fund, but there is 
just an accounting judgment. He advocated separating it out so it 
couldn't be used to balance the budget. Right now the trust funds are 
used to balance the budget. They are not set aside for a special fund 
to see that Social Security remains secure. It is the good faith and 
credit of the government that does that. Well, I say that isn't enough. 
We have to face the consequences, bite the bullet. We have to find a 
way to see that our national credit card is fiscally responsible.
  The ACTING PRESIDENT pro tempore. The Senator's time has expired.
  Mrs. FEINSTEIN. I know my time is up, but I want to indicate my very 
sincere support and my thanks to both Senator Conrad and Senator Gregg 
for their work, for their leadership, and for their strong advocacy. 
They have friends. We will support them. And I very much hope this body 
will as well.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Florida.
  Mr. NELSON of Florida. Mr. President, I am speaking today in favor of 
the Conrad-Gregg amendment, of which I am a cosponsor also.
  While the Senator from California is here, I want to go back 27 years 
ago to one of the times in which government came together and worked 
best on a crisis. It was 1983. I had come to Congress a few years 
before, and we were suddenly at the point at which Social Security was 
going to run out of money within 6 months. Obviously, something had to 
be done. The good news was there were two wily old Irishmen who were 
leading the government. One was in the White House--his name was 
Reagan--and the other one was the Speaker of the House--and his name 
was O'Neill. Those two were great examples. They could fight like cats 
and dogs during the day, but when they walked out the door, they were 
personal friends. They had a personal relationship. When it came time 
to cutting a deal to get the performance of the government, they could 
do it.
  Realizing that Social Security was about to be in financial cardiac 
arrest, they said: We are going to do this. They appointed a blue 
ribbon panel, much like what we are talking about here in this Conrad-
Gregg amendment. The difference between then and now is that we had 
leaders of both parties who were committed to making it work. I am not 
sure what we are going to see out here on the landscape today, unless 
the American people rise up and say: A pox on both your Houses. You 
guys better get together.
  That is what we are trying to do with this bipartisan amendment. The 
good news is that because of the deliberations of that panel and 
because those two Irishmen, President Reagan and Speaker O'Neill, said: 
We are going to take this off the table at the next election as a club, 
a bludgeon, to hit our opponents over the head with, that blue ribbon 
panel came forth, was presented to the Congress, passed overwhelmingly 
in the Congress, and it made Social Security solvent from 1983 well 
into this century.
  That is the kind of example we need here, of our coming together in a 
bipartisan way, with commonsense solutions. That is what I rise to talk 
about today. I thank the Senator from California for being not only 
erudite but eloquent in her presentation.
  Mrs. FEINSTEIN. I thank the Senator.
  Mr. NELSON of Florida. Mr. President, there is a reason for this, and 
it is our Nation's budget is on a path toward crisis. We have to do 
something extraordinary, just as we did back in 1983. Over the last 
decade, we have spent billions to wage two wars, but we still proceeded 
with a tax cut for the wealthy and a prescription drug benefit that 
gave too much to the pharmaceutical industry as well as the health 
insurance industry, and what happened was the debt doubled.
  The Obama administration had to stem the bleeding, putting a 
tourniquet on the pending nationwide economic collapse, so it pumped 
money into the economy. That was primarily for infrastructure spending, 
teachers' salaries, targeted tax relief for small business, and 
targeted tax relief for the middle class.
  That same economic collapse did what one expects recessions, near 
depressions to do: It lowered the tax receipts, and thus put us in an 
even tighter spot. So now we have to face the realities of this fiscal 
situation. Due to the economic downturn, tax revenue, as a share of the 
economy, is at its lowest point in 50 years. It is less than 15 percent 
of GDP, whereas spending is now above. It is at 26 percent of GDP. You 
know when you take in less revenues but you spend more, that 
difference, which we call the annual deficit, means you are headed for 
trouble. The analysts are telling us that by 2019, the debt could be 
114 percent of the GDP.
  We saw in the charts of the Senator from California how the interest 
rate in 2019 would balloon up to three-fourths of $1 trillion. The 
rising trend continues at an alarming rate even after 2019. Former Fed 
Chairman Alan Greenspan said:

       The challenge to contain this threat is more urgent than at 
     any time in our history. Our Nation has never before had to 
     confront so formidable a fiscal crisis as is now visible just 
     over the horizon.

  This is not to mention this also affects our national security. Guess 
who is the biggest holder of our foreign debt. It is China. What 
happens if they suddenly want us to pay off all of those bonds they 
hold? Do you think China is an adversary? Well, if you don't, do you 
think they are an economic adversary? Do you think they would like to 
be a military adversary? Do you realize what they are doing in space in 
order to become a world power?
  I came to Congress a long time ago, and I have been talking about 
balanced budgets, but now this problem is so massive it can't be 
solved, as the Senator from California said, by regular order. We are 
going to have to take a good look at the whole picture. We need some 
commonsense folks who will work together, who will respect each other--
did you hear what I said, respect each other--and who will recommend 
the tough decisions that must be made in order to get this Nation's 
fiscal policy back on track.
  I realize on the one side you have folks saying: Does that cut Social 
Security? Does that cut Medicare? Then on the other side you have folks 
who say: Does that mean you worry about raising taxes? Those are 
legitimate concerns. Every one of us, every family member in America 
has to deal with these kinds of questions in their own family's budget. 
When we spend more than we bring in, we have to make choices. We have 
to make adjustments. It is the responsible thing to do.
  It will not be easy. It will not be easy politically, especially with 
people holding that club of the next election over their heads saying: 
I am going to beat you into the ground and beat you politically to 
death if you make these tough choices. But in the end I trust, because 
of the understanding of the American people of their government and 
their understanding of their own family budgets, they will trust a 
bipartisan group of lawmakers accountable to the American people who 
will have examined the budget, hashed out their differences, and agreed 
to a plan that will make us solvent again.
  Without drastic measures we risk saddling our children with debt that 
can never be repaid and credit that cannot be restored. We have the 
opportunity right now to try to fix it. I urge our colleagues to 
support this amendment, and I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Tennessee is 
recognized.

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