Spencer Abraham

Mr. ABRAHAM

Mr. ABRAHAM. We are trying to determine if that reserved 10 minutes will be used or not.

Mr. ABRAHAM. That is my understanding.

Mr. ABRAHAM. That is correct.

Mr. ABRAHAM. It is my understanding that Senator Nickles reserved 10 minutes of time to speak on this topic. I am trying to ascertain whether he intends to use it.

Mr. ABRAHAM

Mr. ABRAHAM. Mr. President, I will take 2 minutes on our side and then I will yield the remainder of our time to the Senator from Delaware. I use my 2 minutes very briefly to be responsive to some of the comments that have been made here already about the nature of the tax cut. I am sure the Senator from Delaware, the chairman of the Finance Committee, will elaborate in more detail. But I was very concerned recently when I began to see this chart appear and some of the comments related to it that suggested somehow the tax cut that is being proposed as part of this reconciliation bill would disproportionately fall on the shoulders of the less affluent and tremendously benefit the wealthiest among us which is the frequently used term that we hear. So I said to myself, gee, that does not sound like the tax bill the Finance Committee passed. And indeed, I then began looking into the tax bill the Finance Committee passed, and according to the Joint Tax Committee calculations, in the first year of this tax bill 90 percent of the tax cuts will go to people whose earnings are below $100,000 a year. Over three-quarters or 77 percent of the proposal's tax cuts will go to those making under $75,000 in the first year. Less than 1 percent of the proposal's tax cuts will go to those making over $200,000 in the first year. Over four-fifths, 84 percent, of the proposal's tax cuts will go to those making under $100,000 in the first 5 years; 70 percent of the proposal's tax cuts will go to those making under $75,000 in the first 5 years, and so on and so on. Indeed, charts and statistics can always yield certain kinds of inferences, but those are the actual numbers that the Joint Tax Committee produced when it evaluated this plan. I said maybe there has to be a discrepancy here. What could it be? Let me look at the individual provisions of this tax cut and see. In order to fulfill the numbers we have been hearing, they must all be tax cuts that benefit the wealthiest people in America. So I looked and I found a $500 per child tax credit; $141 billion of the total tax cut is the child tax credit, and it is phased out for people beginning at family incomes of $110,000.

Mr. ABRAHAM

Mr. ABRAHAM. Mr. President, I suggest the absence of a quorum.

Mr. ABRAHAM. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. ABRAHAM. Mr. President, I ask unanimous consent that the pending Rockefeller motion and the amendment thereto be laid aside in the status quo and that I may be recognized to offer an amendment.

Mr. ABRAHAM. Parliamentary inquiry. How much time is left on each side?

Mr. ABRAHAM. Mr. President, I yield 3 minutes to the Senator from Ohio.

Mr. ABRAHAM. Thank you, Mr. President. Mr. President, I yield myself such time as I may need to make a few brief comments with regard to my amendment, which I would like to bring us back to for a moment. First of all, the issue of fraud and abuse in Medicare is a problem that has been widely recognized by Members of the Senate, and I would like to call attention to several Members who have been actively engaged in trying to ferret out these problems so that we might address them in ways such as the amendment I am presenting here tonight. First, I would like to acknowledge the efforts of Senator Kyl and Senator McCain--Senator McCain in particular, who has worked in this area a lot, who has separate legislation, I know, on this topic; and his leadership on this issue has helped to bring it to our attention. More recently, I would also like to acknowledge, and then quote, from a report, an ongoing, actual effort by Senator Cohen, who is also chairman of our Senate Special Committee on Aging, an investigative staff report which he conducted and which was released July 7, 1994. It has identified countless examples of Medicare fraud and abuse, the kind of abuse and fraud that, hopefully, this amendment which I have presented tonight can address. Without going into all the details at this time--although I may from time to time during the debate mention specific cases--let me just focus on an area that was just touched on by the Senator from Arkansas; namely, the area of nursing homes. The investigative report revealed a considerable number of cases involving direct targeting of nursing home patients in which both the industries that supply products and services to the homes and the owners and administrators of the homes are involved in fraudulent and abusive practices. Nursing home owners have been convicted of charging personal luxury items like swimming pools to Medicaid cost reports. HCFA, the HHS [inspector general's office], and the Minority committee staff are continuing to investigate nursing homes * * * as was the case at the time this report was revealed. Let me cite two specific cases. A Minnesota speech therapist submitted false claims to Medicare for services provided to nursing home residents. The therapist also received Medicaid payments for speech therapy he never actually performed--and the investigation revealed that he had been paid for services ``rendered to patients'' several days after they had died. He was also observed using flash cards with a blind resident, and then billing for reimbursement. Another case: The owner of a Pennsylvania rehabilitation service was indicted for allegedly operating a scheme to defraud Medicare by submitting false claims for speech therapy provided to patients in nursing homes. The owner allegedly told speech therapists to recruit Medicare clients even though he knew their therapy would not be covered under Medicare. Before submitting the paperwork for reimbursement, the speech therapists would rewrite their patient reports so that they would appear to be medically necessary rehabilitation services. The employees then allegedly falsified bills submitted to Medicare, including certifications by doctors that patients needed continued speech therapy, and also falsified patients' medical records. Mr. President, we can talk about the different problems in the nursing home issue, one many of us are concerned about. One of the reasons this amendment which I have offered tonight is before us is because it helps to address some of the problems that do go on in nursing homes. I will cite other examples in other contexts in which Medicare fraud is running up the costs of Medicare, costs that we should address through this amendment that I am offering, as well as some of the other items included in the reconciliation bill before us. At this time, Mr. President, I would like to yield 10 minutes of our remaining time to the Senator from Ohio. Mr. DeWINE addressed the Chair.

Mr. ABRAHAM. Mr. President, I yield 10 minutes to the Senator from Tennessee.

Mr. ABRAHAM. Mr. President, I believe the previous agreement----

Mr. ABRAHAM. Mr. President, just as a point of clarification, I believe the Senator from Nebraska is not in the Chamber now, but he had previously sought and obtained consent for the Senator from New Mexico to proceed at this point.

Mr. ABRAHAM. I yield to the Senator from Iowa such time as he may need off the bill.

Mr. ABRAHAM. We have heard today a number of arguments made on each side relative to the topic of the tax cut provisions in this legislation, and I think it is important for the American people to understand the clear distinction that exists on the two sides of the aisle over the issue of taxes. Today, the Republican tax cuts that are part of this legislation have been described as tax cuts for wealthy Americans. They have been described as unfair. They have been described as unneeded. They have been described in a variety of other ways. I think it is important before we analyze those tax cuts and who they really benefit, to begin by just stepping back from today and looking at some of the things that have transpired here in Congress in recent years. I find it interesting that the people who are on this floor attacking the tax cut provisions of this legislation are the very same people who just in the last Congress voted to raise the taxes of working Americans by $270 billion, the largest tax increase in history. Indeed, it is very simple, I think, to differentiate between the parties and their positions on taxes. There is one party, the Republican Party, that is presenting Americans today with middle-class tax cuts; there is another party that in the last Congress raised taxes a record level of $270 billion. I think that the opposition to the Republican tax cuts that are proposed in this legislation should not surprise anyone. It is coming from the people who already raised our taxes by a record amount, and who would hate to see those taxes go down at all. The fact of the matter is, Madam President, that taxes represent the hard work of people in this country who are out playing by the rules. In my State of Michigan they are doing the things we need to keep our economy strong. They are average men and women whose income, at least in my State, for a family is about $32,000. They work hard for those dollars. Some time ago in the 1950's and 1960's, those average families in Michigan like my own sent $1 to Washington for every $50 they earned; today that average family in Michigan spends $1 in Washington for every $4 it earns. In part, I came here to the U.S. Senate and ran for this office so that families who are sending too many of their dollars to Washington would get a chance to keep more of what they earn. We talk a lot today, and we have seen charts in the Senate over the last few months in which we talk about the problems of the so-called middle-class squeeze, the economic pressure on hard-working average middle-class families in our country to make ends meet. We are often told it is so unfortunate today that it is now necessary often for two people in the household to work in order to be able to attain the same economic conditions that used to be available to middle-class families with only one person out there in the work force. A lot of speculation goes on in the U.S. Senate as to why it is; why is that middle-class squeeze happening? Why is it that two people have to work to make ends meet? A big part of the answer, Madam President, is the taxes have gone up so dramatically during the last 30 to 40 years in this country, and dramatically in just the last 2 years alone. The fact is if the average family in Michigan was still sending $1 in Washington for every $50 it earned, the financial security of those families would be a lot greater today. The combination of paying higher taxes and paying higher interest rates on all the sorts of things that people in my State have to pay interest on, whether it is a mortgage for a home or interest on a car payment or interest with regard to consumer items or interest on student loans, if those interest rates were lower, people in my State would be better off as well. But they are not low. One reason they are not low is because the Federal Government has not balanced its budget in the last quarter of a century. As we run up red ink in Washington, as the Federal Government is forced to borrow money from lending institutions, from individuals, from whomever, we have driven up interest rates. The middle-class families find themselves in two separate ways dramatically affected by the policies here in Washington. On the one hand, it does not get to keep as many dollars as it earns because it has to send more dollars to Washington in taxes; and then with those fewer dollars that remain it has to pay more in the way of interest because Government policies have helped to drive up interest rates, because we cannot live here in Washington within our means. That is why in this legislation we are trying to correct the two problems that afflict those middle-class families. On the one hand, we are trying to give middle-class families the kind of Federal Government fiscal responsibility they have to exercise in their own homes. What we are trying to do is to bring about ultimately at the end of 7 years the balanced budget that has eluded us here in Washington for a quarter of a century. As we bring down the deficit and as we maintain a balanced budget, and as we maintain a balanced budget after the year 2002, the impact of that will be a dramatic effect on middle-class families, because as we bring down the deficit, as we recognize in our own CBO reports here, interest rates that the Federal Government has to pay will go down. That will save money for the Federal Government. It also will mean that interest rates in the private sector go down. It means the interest that people who are watching today and hearing all these frightening stories, as they go out into the housing market, as they go out to buy a car for the family, as they go out to make other purchases that are affected by interest rates, they will find their interest rates, just like the Federal Government interest rates that they have to pay, will be coming down, which will make items more affordable. That is one reason we are trying to bring this budget into balance. At the same time, we are trying to address the other problem that affects average American families, the problem of sending too many dollars to Washington. That, of course, leads us to the issue of our tax cut. There have been many, many descriptions of the tax cut. The tax cut was being described before it was ever even talked about in the Senate, before it was addressed, before anybody put a pen to paper to try to draft a tax cut. It was always described the same way it is being described today, as a tax cut principally desired by Republicans to be given to the wealthiest of Americans. I was astonished when the other day in our Budget Committee meeting when we finally passed the reconciliation package to the floor, to hear talk that over half--over half--of those benefits from the tax cut were going to go to the wealthiest families in America. That was not the tax cut I had heard about. It was not the way I had seen it described. I had even read the Washington Post in which the Washington Post described the tax cut as ``family friendly.'' I went out and asked for statistics and I was presented with the Joint Committee on Taxation's specific results of their analysis. Here is what I found: In the first year of this tax cut, 90 percent of the tax cut goes to those making under $100,000 in the first year; 77 percent of the proposal's tax cuts go to those making under $75,000 in that first year. Less than 1 percent of the proposal's tax cuts will go to those making over $200,000 in the first year. Over four-fifths, 84 percent of the proposal's tax cuts go to those making under $100,000 in the first 5 years. And 70 percent of the proposal's tax cuts go to those making under $75,000 in those first 5 years. Less than 6 percent of the proposal's tax cuts will go to those making over $200,000 in the first 5 years. That is a completely different set of statistics than the ones presented to us at the Budget Committee. It is not the case that over half of the tax cuts are going to people making over $100,000, quite the contrary. This is a family friendly tax cut. It is designed to address the second problem I earlier mentioned, the problem that middle-class families have had, the squeeze that has been put upon them because they have had to send too many dollars to Washington. I did not want to just leave it at the Joint Tax Committee's numbers. Now, we had competing sets of statistics so I thought the next and most important thing I could do would be to look at the specific components of the tax cut to see which of the two versions was accurate. What I discovered was that, of course, the Joint Tax Committee's version, their statistics, are right on the mark. Let us tell the American people some of the things that comprise this tax bill. First, it provides a $500 per child tax credit for American families. That constitutes $141 billion of the $225 billion in tax relief under this bill, over 62 percent. Some say for some of those children, they are part of families that make lots of money. That may be true. But, of course, this tax bill has been limited in its scope. Indeed, the $500 per child tax credit begins to be phased out, in the case of families with a single head of household at $75,000, in the case of a couple at $110,000. So, unless people between $100,000 and $110,000 have a vastly disproportionate number of children, the argument that many of the tax breaks from the family tax credit are going to go to wealthy people, as defined by some people here in Washington, just is simply not the case. Of course it is not the case. Madam President, $141 billion, 62 percent of the tax cut, is the family tax credit, $500 per child, letting families keep $500 per child to spend, to try to make ends meet to provide those children with a better way of life. Another important part of our tax credit in the family tax relief section is an adoption credit. That accounts for almost $2 billion of this tax cut. It is a nonrefundable tax credit allowing for the exclusion of up to $5,000 in adoption costs. The credit phases out. This is important. It phases out between the taxable income levels of $60,000 and $100,000 for both individuals and couples. In other words, not $1 of the adoption credit, the $2 billion of tax cuts that form the basis for that tax relief, will go to anybody making more than $100,000. Indeed, again, it is aimed at helping people in this country, middle-income categories, to be able to expedite the adoption of children, to provide children with loving homes and a few of the dollars necessary to make it possible for those adoptions to be carried out in a way that provides children with a better chance for their future. The next part of it, another family-related tax section, is $12.3 billion to try to provide relief from the marriage penalty that we impose under our Tax Code. Maybe some people who make more than $100,000 will benefit from the elimination of the marriage penalty, but I hardly think anybody wants to come to the floor of the U.S. Senate and argue we should not eliminate this marriage penalty. It makes no sense for us to have ever done it in the first place. Another part of our family tax relief is student loan interest deduction. That is another $1 billion. Once again, it is limited in scope to people who have adjusted gross incomes of between $40,000 and $55,000 for singles and between $60,000 and $75,000 for married couples. After that, this deduction is not available. Again, a deduction aimed at helping people of moderate means to try to better and more easily finance college educations. On and on I went through this tax program. What I discovered was that in almost every section, the entire focus has been to try to provide middle-class families with tax relief, to try to let people keep more of what they earned, to try to allow families in this country to offset some of the hardships that come about when the Federal Government consumes too many of their dollars. That does not mean that every part of the bill primarily benefits people of middle-income backgrounds. Yes, there are sections aimed at trying to create growth in our economy, that disproportionately benefit people and, to some extent corporations, people of greater means and corporations. Interestingly, though, a very substantial percentage of the benefits of those pro growth tax reductions and tax cuts go to the benefit of average working families in this country because, as we unleash the benefits of some of these growth-oriented tax cuts, what will it produce? It will produce more jobs, better paying jobs. As companies expand and grow, we will hire more people, we will provide more opportunities for Americans. Remember this, too, Madam President, a great number of the people who benefit from capital gains tax cuts are families who are selling the family home, who are selling other capital assets, who own or are part of pension programs that invest in stocks and corporations and ultimately realize capital gains. Moreover--and I think it is important to note--this bill does not have simply an up side for those in these wealthy categories or for corporations, because we are also closing a substantial number of tax loopholes. In fact, the closing of loopholes largely offsets the tax advantages that are provided to corporations and upper-income individuals under this bill. In short, we are paying for most of the benefits derived by those individuals by the closing of these loopholes. In short, once again, this tax cut bill is designed to aid families in the middle class above all other families in this country. For those reasons, I intend to come to the floor again as may be necessary to keep reminding our colleagues exactly who the beneficiaries of this tax cut are. It is simply, as you analyze the data as to where the tax cuts go and how specifically the tax cuts have been developed, you realize once again that the claims that our tax cut is designed to help so-called wealthy people simply miss the point. It is a tax bill designed to help middle-income families to address a problem that has been growing in this country for the last 40 years, the problem of the Federal Government getting too big, consuming too many resources, making it much more difficult for average families to make ends meet. By balancing the budget and thereby bringing down interest rates, by giving families tax cuts, we can try to help alleviate the middle class squeeze. That is what we are trying to accomplish in no small measure with this legislation. At this time, I yield the floor. Mr. GRASSLEY addressed the Chair.

Mr. ABRAHAM. Madam President, I yield myself such time as needed.

Mr. ABRAHAM. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. ABRAHAM. At this time I yield 5 minutes to the Senator from Georgia.

Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from Rhode Island.

Mr. ABRAHAM. Mr. President, at this time I yield to the Senator from Tennessee 7 minutes. How much time remains?

Mr. ABRAHAM. Madam President, the majority leader yields to the Senator from Washington such time as he needs off the bill.

Mr. ABRAHAM. I yield the Senator from Delaware an additional minute of time.

Mr. ABRAHAM. At this time, I yield 9 minutes to the Senator from Utah.

Mr. ABRAHAM. Mr. President, how much time is left?