Robert Bennett

Mr. BENNETT

Mr. BENNETT. Mr. President, I ask unanimous consent that when the Senate considers the conference report accompanying H.R. 1158, the supplemental rescissions bill, that it be considered under the following time agreement: 20 minutes under the control of the chairman and ranking minority member of the Appropriations Committee; 30 minutes under the control of Senator McCain; 10 minutes under the control of Senator Feingold; 15 minutes under the control of Senator Wellstone; and that following the conclusion of the debate, the Senate vote, without any intervening action or debate, on adoption of the conference report. I understand this has been cleared with the minority side.

Mr. BENNETT

Mr. BENNETT. Mr. President, I appreciate the concern that everyone is showing here on the floor for Medicare and Medicaid and the desire that they have to keep these programs well and healthy and viable for the people who depend upon them. Unfortunately, Mr. President, the desire to keep these programs healthy and well has been translated into a desire to keep them as they are. And life being what it is, if they stay as they are, they will be neither healthy nor stable for the people who depend upon them; indeed, they will ultimately disappear. Let us talk about Medicare for just a moment and go through the history of that program. Although I am a newcomer to the Senate, I am not a newcomer, if you will, to this issue. Back in 1962, when my father was running for reelection to the Senate, I was his campaign manager, and this was an issue in his campaign. Yes, that is right, Mr. President, in 1962; it has been around that long. At the time, there was no Medicare. It was passed by the Congress after the 1962 election. There were all kinds of projections about how much it would cost and what it would do. As we look back over this last 30-year period, we see that all of those projections were wrong, and they were wrong on the wrong side; that is, they were all too low. Medicare has been growing much more rapidly than its initial authors ever thought it would, and it has been costing the Federal Government an ever-increasing percentage of gross domestic product. There have been charts on that, and I will not repeat the charts because people have seen all of those. However, when people talk to me about Medicare and how it must be preserved, I go back to the 1960's and my memory of that debate, and I make this point. I say Medicare is a wonderful program as it is currently structured and would work perfectly, indeed we could afford it, if people would just have the courtesy to die at the same rate they did in the 1960's when Medicare was established. And, indeed, if we went back to practice medicine the same way we did in the 1960's, they probably would. But we practice medicine in a vastly different way now than we did in the 1960's. I have been told that 90 percent of the medicine we practice today did not exist in the 1960's. It has all been invented since that time. The treatments have changed, the equipment has changed, the facilities have changed. But the program by which it is financed has not changed. It is still built around the notions that we had when we watched that 1960's television program, ``Marcus Welby,'' a single practitioner who operated out of a single facility set in an idyllic setting, assisted by the most caring, wonderful nurse in the world, Consuela. He would sit there and somehow figure out all of your ills, and not only take care of your medical problems; he would solve your divorce, take care of the teenage child that was in trouble, and counsel you in your employment problems. Well, Dr. Welby does not exist anymore. Medicine has changed. Our way of delivering it has changed. And the old notion of having a ``Dr. Welby'' who will be reimbursed from the Federal Government for all of his skill and all of his counsel has to change, too. I am standing here in support of the underlying budget proposal not because I hate Medicare, not because I am heartless toward those in the aging population. I am not unfamiliar with those. I guess I am aging a little myself. But within the past year, year and a half, my wife and I have buried three of our children's four grandparents. We have had the Medicare experience with my father, my father-in-law, and my mother-in- law. The forms are incomprehensible. They create a regulatory thicket that virtually no one can plow through. I have a constituent who tells me, ``Senator, I have to take care of an aging mother. The idea that she would be able to understand any of the forms she gets from Medicare is on its face ridiculous. I am a college graduate, I am a successful business woman, and I think I know my way around, but I cannot figure out these forms, let alone my mother.'' So she said, ``I wasted a lot of time trying to figure out what they meant until I finally adopted the following strategy. I realize it is high risk, but it is low stress. Every form from Medicare I throw away, and at the end of the month I call the Salt Lake Clinic and say, `Do I owe you any money for my mother?' I let them do the bookkeeping and do not worry about the form that says `This is not a bill' and is covered with numbers and that says we cover this percentage and you that percentage.'' She says, ``I throw them all away, and once a month, I call the Salt Lake Clinic and I say, `Do I owe you any money for my mother?' They say, `Yes, according to our computers, you owe us X amount,' and I write out a check and do not pay any attention to the rest of it.'' I hope the Salt Lake Clinic, for her sake, is keeping good books. That is the kind of program we have under Medicare. Is that what we want to preserve exactly as it is? Or do we want to say: Wait a minute; the time has come to restructure; the time has come to reform. And we are convinced if we do restructure and reform, the time has come to have a handle on the costs that make sense. To repeat that which has been said here on the floor so many times-- and it may be wearing out now, but it needs to be repeated--we are not talking about cutting Medicare below its present rate of reimbursement; we are talking about increasing Medicare above its present rate of reimbursement on the basis of roughly 7 percent per year compounded. Anybody who has been in the business world long enough to know the power of compound interest rates knows how powerful a 7-percent per year compounded increase can be in raising the benefits for Medicare. Right now, the per capita spending is around $4,300 per person, and at the end of the 7-year period outlined in this bill, it will be $6,300 per person, and that rate of increase is roughly the same as the rate of increase for health [[Page S6992]] costs in the private sector today. So we know that health care can survive, indeed thrive, with that rate of increase. What we need to do is say we are going to take the private rate of increase, lock it into the Federal circumstance so that it cannot grow any more rapidly and then, within those parameters, make the kinds of administrative changes necessary to make this thing work. What is wrong with that? What is threatening about that? I assure you, as one who has had to deal with these forms and had to deal with aged parents and had to struggle with the medical challenge, and as an administrator, if you will, for my father and in-laws, I would welcome that kind of circumstance. I am not threatened by it. No one in our senior population should be threatened by it. There is a saying that I learned in college. I wish I could quote it all. I do not have the photographic memory that the Senator from West Virginia possesses, so I will do my best. It is out of the literature that talks about King Arthur and Camelot. That should strike a chord somewhere around here. There are people that have talked about Camelot with respect to a past administration. At the moment where Camelot is over, in the epic poem by Sir Walter Scott, there are those who mourn the loss of the Knights of the Round Table and say how terrible it is that this is gone. Then this phrase: The old order changeth, yielding place to new, lest one good custom should corrupt the world. Mr. President, we are at that point in Medicare. The old order has been a good order. It has helped a lot of people. But if we try to preserve it absolutely as it was written and established and laid down over 30 years ago as we move into the next millennium, that one good custom will corrupt the world. The old order changeth, and we must change the law to go with it. I repeat and summarize, Mr. President, I am not here in any sense to challenge the need of our senior citizens for the Federal Government to stay fully involved and fully committed to the notion that they are entitled--entitled, yes, I use the fatal word--they are entitled to support in their medical costs in their declining and retired years. I support that absolutely. I stand here fully committed to a budget that will cause that support to increase at a rate of 7 percent per year compounded. But I say to those who want to keep the old system exactly as it is and keep pouring money down the black hole that it has become, those people are wedded to a mechanism of the 1960's while we are living in the 1990's and preparing for the new century and the new millennium. When we do that, regardless of how pure the intent, we are doing our senior citizens no favor. We are doing them no benefit. We must recognize that the old order and everything changeth, yielding place to new, lest one good custom should corrupt the world. With that attempt, Mr. President, to sound at least somewhat as classical as the Senator from West Virginia, recognizing that I could never truly approach him, I yield the floor.

Mr. BENNETT

Mr. BENNETT. Thank you. The President of the United States came to the American people and said, ``This is the situation we are facing. If we do not do something about it, we are in serious trouble,'' and he demanded sacrifices from the American people. He was up front with them. He made no bones about the difficulties that we face. How disrupting was that experience in the lives of Americans? Hundreds of thousands of them lost their lives. Millions had their lives disrupted. They did it because they recognized that there was a purpose for doing it and that their Government was being honest with them. For far too long in this Chamber, our Government has not been honest with our people and, therefore, of course, they do not want to sacrifice, of course, they do not want to have their lives disrupted. I do not want to have my life disrupted. I want everything to go on as good as it has been going, but the time has come to recognize that we are facing a long-term crisis as severe as any we have faced, and we have to be as honest as we have ever been. So I say, all right, you do not want to do this by restraining the growth of Medicare, even though the rate of growth of Medicare is not sustainable either in this circumstance or, frankly, by comparison to what is going on in health care in the private sector with this circumstance. All right, you do not want to do it with that one? What do you want to do it with? This budget says we do it with everybody. This budget says we do not single out a single sector to balance the budget on the backs of any particular group. We say to everybody, the time has come to recognize the crisis with which we are dealing and deal with it evenhandedly. I would say to those who are complaining about this budget, then give us your alternative that is equally evenhanded that deals with all political groups with the same courage with which this deals with political groups and let us get forward. But do not tell us we cannot adopt this budget because it disturbs this or that or the other sector in terms of their status quo because that kind of circumstance, Mr. President, is simply not being honest with the American people, and the time for honesty is here. Mr. President, I yield back the remainder of my time.

Mr. BENNETT. Mr. President, I am interested in the various references that are made from time to time on this floor about business practices; comments such as, ``Why, if we did this in a business the way we are doing it in Government, we would go to jail. We can't do that on a filing for the SEC.'' Mr. President, as you may know, I have run a business, run several. I have filled out forms for the SEC. I have signed 10 Q's, I have signed 10 K's. I understand the requirements of honest accounting. And I assure the Chair and this Senate that what I am about to say is honest accounting. I am not trying to mislead anybody as to what we are facing as a Nation. I am not trying to make rhetorical points on fine shavings of definitions within committee language. I am trying to be as direct and straightforward as I know how. I will start out with a chart that we have seen before and we will no doubt see again but which we need to keep in front of us throughout this whole debate. The information, Mr. President, on this chart comes from the Entitlements Commission which shows that if we listen to all of the rhetoric that says, ``Why, you can't do this. This will hurt this group. You can't do that. It will hurt this group,'' which ends up being ``You can't do anything,'' the present trends are simply not sustainable. I remind the Chair and the Chamber, once again, that if we do nothing, we let things go as they are going, within 10 years, by the year 2006, we will be in a circumstance where the cash outlays and the cash revenues of the Government comes to the condition that everything we spend as a Government will have to be borrowed. That which we do not have control over in the budget, which is in the red bar--entitlement spending and interest--we have no control over that. We are contractually obligated to that. The entitlements, by law, have to go out. The interest, by law, has to be paid. That means everything else--which includes the Defense Department, includes building highways, includes everything else the Government does--will have to be borrowed. This is the reality with which we live. It is real. I see the distinguished chairman of the Entitlements Commission on the floor. I thank him for his work and his courage. This is the situation in which we find ourselves. Let us not kid ourselves by saying, ``Oh, this particular phrase of the budget document does not apply here and we will look at this.'' This is cash outlays. I have managed a business. I will tell you the most important way to manage a business is on cash flow. You may have a balance sheet that says you have a whole lot of money, but if that money is all tied in inventory and receivables and you do not have the cash with which to pay your bills, you are in trouble. And you can go to the SEC all you want and say, ``Oh, this is the way I keep my books.'' You pay taxes, you pay wages, in cash. And this is the cash picture of what happens if we do not do anything. Now, we are told, ``Oh, we can't hurt this group. We can't hurt that group. Look at these terrible cuts.'' I give you the second chart prepared by the Budget Committee on the terrible cuts that we are talking about in this budget. What are the terrible cuts we are going to inflict on Medicare? Well, actually, you know, Medicare is going to go up by $105 billion. I am a businessman. In my vocabulary a $105 billion increase is not a cut. I had to come to Washington to learn the definition of ``cut.'' It means you spend more this year than you spent last year, but you just spend less than somebody else promised you would in some previous year. That is the Washington definition of ``cut.'' All this reference to business; I am a businessman. This, to me, is an increase. Put it on a per capita basis right now, Mr. President, and we are spending per Medicare recipient per year just under $5,000. That is today's figure, 4,900 and-some-odd dollars. Under the budget proposed by the Budget Committee, by the time we get to 2002, that number will be $6,450. So we are going to punish the Medicare population by raising their per capita expenditures from $4,900 to $6,400. That is how we are going to punish them. To me, that is not a cut. Now, we talk about trends. ``Oh, but the Medicare population is growing. The Medicare population is so big we have to spend more than that. That will not work.'' As I say, that is a per capita number, Mr. President, from $4,900 to $6,400 per capita. But what is the overall number? Here is the chart I used in a previous statement I made on this subject. Medical expenditures, where the distinguished minority leader had said, ``You know, our problem is that public funds are growing at the same rate as private funds,'' and I said, ``No, that is not true.'' I got the information from the Congressional Reference Service of the Library of Congress. Here are the trends. The dark figures are the percentage of increase in public expenditures for medical activity. This is combined Medicare and Medicaid. The light figures are for the private rate of increase. Here we are, the worst year, 1990, public expenditures in health care went up 13.2 percent that year. The private rate of increase was 10.6. Still unsustainable. In the private sector, they went to work on that, brought it down, cut it in half the next year, in 1991. Public expenditures came down from 13.2 to 12.6. The following year, they could not hold it down on the private side. It came up to 9.9, then 7.2, and then last year, 1994, brought it down to 5.3. The public expenditures came down from 12.6 to 10.8 to 8.5, and last year, 7.8. That is the level, Mr. President, at which this budget calls for it to stay--a 7-percent annual rate of increase in Medicare is what this budget is talking about. We have done it in 1994. Can we not do it for the next 5, 7 years? I will say, this combines both Medicare and Medicaid and, therefore, that overall figure is misleading and it is not proper for me--I said I am going to be honest in my accounting--it is not proper for me to say that applies directly to Medicare because Medicare at the moment is closer to 10 percent and Medicaid is the lower figure, and that is why the average is there. But that is the target we have to have, that is the target we do have in this budget and that is the target I believe we can meet. The Senator from Wisconsin says, you cannot do it to our older population, you cannot balance this by attacking one segment of the population, you cannot single out one sector. And then he talks about education, you cannot single out education. And pretty soon, if you follow that logic, you end up with no sector at all that can be cut. I go back to the other chart. I referenced this before strictly on the Medicare side pointing out that we are talking about a $105 billion increase in Medicare. We are also talking about $146 billion increase in Social Security, a $36 billion increase in Medicaid, a $51 billion increase in other mandatory programs. The only thing that gets cut is domestic discretionary spending. Defense remains the same in this budget. Interest has to go up because the debt is coming up. But what is the total? Nearly $1.9 trillion. I am reminded of the cartoon that appeared in the paper where the Republican was writing on the board the budget for 2002, $1.9 trillion, and the other person said: ``Is that all?" Mr. President, I have been involved personally in the challenge of downsizing a company. I grant immediately this challenge is vastly greater, but the principles are the same. Time and again, I would say, ``We have to take something out of the overhead of this company.'' People would come in to me and say, ``I agree, we have to take something out of the overhead, but don't cut my department'' for this reason or that reason and how vital it was. Finally, I had to get their attention, and I said: All right, I won't cut your department, I won't cut anybody's department. I'll let everybody walk out of here feeling comfortable, happy and wonderful right up to the point where you file for unemployment, because the company is going broke. Oh. Well, now, you explained it to me. Maybe I can find something in my department to cut. That was the company equivalent, Mr. President, of this chart. This is the chart I began with, this is the chart I come back to. This is the situation we are facing. Do we have the courage to recognize this is the situation we are facing and do what has to be done? Mr. President, we celebrated this year a number of anniversaries relating to the Second World War. I am one who is old enough to remember the Second World War. I did not fight in it. I was just a little kid. My brother went over in the Second World War. He was in Okinawa when President Truman decided to drop the bomb. Mr. President, may I inquire, how much time do I have remaining?

Mr. BENNETT

Mr. BENNETT. I ask unanimous consent that I be allowed to continue for up to 15 minutes as in morning business.

Mr. BENNETT

Mr. BENNETT. Here are medical expenditures. The dark figure--no metaphor intended--the dark figure is for public expenditures for health care; the light figure is for private expenditures. The expenditures are calculated in terms of percentage growth. That is, if we look at 1985, in that year, public expenditures for health care went up at a rate of 8.8 percent per year, while private expenditures went up 10.3 percent. We can see in these years there is a disparity. Some years public ones go up faster than private; other years private expenditures go up substantially faster than public expenditures. We can see that, in general terms, it is around 8 or 9 percent in public expenditures and slightly more than that in private expenditures. increase for public expenditures went to its highest level--11.9 percent; private levels going up at 10.3 percent. Then, in 1990, public expenditures went up 13.2 percent; for the second year in a row, public expenditures went up faster than private, a trend that has continued to this day unabated. In 1991, public expenditures are still up in the double digits--12.6 percent, but market forces are beginning to assert themselves in the private marketplace, and the private expenditures only increased 5.6 percent. It did not stay down that low the next year. They came up to 6.9; but public expenditures stayed in double digits at 10.8 percent. Now they have been getting better. In 1993, public expenditures 8.5, but private is 7.2. In 1994, public expenditures come down to 7.8; but private drops to 5.3 percent. For the minority leader to say that the reason we cannot do something about the expanding growth of Medicare is because Medicare expenditures are going up at the same rate as private expenditures, is to ignore the facts of the case. Private expenditures are coming down in terms of the percentage growth at a faster rate than public expenditures are coming down. Indeed, Madam President, if we were to take the minority leader's statement at face value, where he says: Medicare Program costs are increasing because all health care insurance costs are increasing on a per capita basis. Medicare and Medicare costs are increasing at the same rate as privately insured costs. If that statement were true, that would mean that Medicare and Medicaid costs would be increasing at 5.3 percent per year, which figure, Madam President, is within the band the Budget Committee is considering for increases for Medicare and Medicaid. I have sat in on the budget briefing and I have heard the budgeteers say, ``If only we could get the rate of increase down to 5 percent, we could solve all of our problems.'' The rate of increase is down to 5 percent in private expenditures. The minority leader thinks the two are the same. Perhaps he has them confused and thinks that the private people have not done a good enough job and the private expenditures are up in this kind of level for public expenditures. In fact, they are not. They have, ever since 1989, come down at a faster rate than the public expenditures come down and they are leading the way. This is the point we need to keep in mind, then, Madam President, with respect to Medicare and the reforms that are necessary. We cannot demagog this issue. We must stick with the facts. Our goal is to make the system that takes care of our elderly as stable, as secure, and as certain for the future as the system that takes care of the rest of the population. If we can do it as responsible public servants at the same rate of increase that exists in the rest of the population, we can solve all of our budgetary problems and the disastrous circumstance indicated in this table will go away. Madam President, I have nothing but respect for our distinguished minority leader. I consider him a friend and one of the more reasonable and certainly most thoughtful Members of this body. I feel that the information that he shared with the Senate last night is inaccurate, and it becomes Members in this debate to make sure that the record is set straight as quickly as possible, because the stakes in this debate are so high. I thank the Chair. I yield the floor. Exhibit No. 1. CBO estimates for total medical and health care spending in the public and private sector from 1985 until 1994. The figures include spending for administrative costs, construction, and research and development as well as personal health care costs associated with doctors and hospitals. The figures shown represent a percentage increase over the previous year's spending level.

Mr. BENNETT. Madam President, last evening, as I sat in the chair, the distinguished minority leader came on the floor and made a statement about, among other things, Medicare. There were many of the things he said on that occasion with which I disagree and so I take this opportunity, while my memory is still fresh on the minority leader's comments, to register my disagreement. The reason I am doing it this quickly, and I hope this completely, is because I believe that the issue of Medicare's impending bankruptcy is so important that we should not allow statements that are incorrect to stay on the Record uncorrected. We should make sure this debate is as careful and as correct as it can possibly be. The stakes are much too high for this debate to take place in an atmosphere that some might consider demagogic. I will take several of the minority leader's statements now and respond to them specifically. The first one: He said--and I am quoting from this morning's Congressional Record, page 6128: Republicans have discovered that the Medicare Program faces challenges in the years ahead. Democrats told them and the Nation that 2 years ago when we shored up the Medicare Program and cut the deficit, all without Republican votes. Madam President, I apologize for not having this particular chart made up in a chart big enough to show the world. Perhaps the television can pick it up for those that are watching. But I am sure those in the Chamber can at least see the direction of the curve, which is the hospital insurance trust fund balance, in billions, starting in 1994; it goes up slightly in 1995 and then begins a precipitous plunge to zero in the year 2002. The reason I hold this chart up is because the minority leader has said, ``Democrats told the Nation that 2 years ago.'' This chart, Madam President, became available on April 5, 1995, not necessarily 2 years ago. I sat in the Chamber in the other body when the President of the United States addressed the House of Representatives in September 1993, roughly 2 years ago, and gave a masterful discourse on health care. He did not mention anything relating to the facts contained in this chart. If, in fact, Democrats told Members this 2 years ago, the President of the United States neglected to mention it when he made his statement to the joint session of Congress. I will not claim to have participated in all portions of the health care debate last year. I do not think any Member can make that claim. I watched the health care debate very closely. I cannot recall a single instance where a single Democratic spokesman told Members in last year's debate that the Medicare trust fund was in any kind of trouble. The minority leader talked about the budget. I participated in the budget debate when the new administration came in. The adoption of the budget of which the minority leader is so proud, and I cannot recall-- and I would like to have him point out to me if I am wrong--a single instance during that budget debate where the Democrats told Members that this trust fund was headed for disaster, indeed, extinct, in the year 2002. I think the minority leader is incorrect when he says the Republicans are just discovering something that the world has known and that the Democrats openly told Members about 2 years ago. Second, he says: House Republicans are considering reductions in Medicare growth on the order of $300 billion. Senate Republicans have said they will need to reduce normal Medicare growth by $200 to $250 billion. Then he goes on to say this is normal growth; the Republicans are cutting this growth in a way that is irresponsible. What he does not tell Members is that during the health care debate last Congress, the President himself projected that we needed to reduce Medicare by $118 billion. I am not going to quibble with him--yes, the $200 billion figure that is talked about in the Senate now is obviously much higher than the $118 figure that the President talked about. The point is that the President, in last year's debate, and Democrats on this floor in last year's debate said, ``We must reduce Medicare,'' and the figure the President came up with was $118 billion. I do not think it is appropriate to say the Republicans have suddenly discovered the idea of reducing Medicare in the hundreds of billions of dollars, and is that not terrible, when the President himself was saying we have to reduce Medicare from the projected rates by in excess of $100 billion. That was OK, then. Now, Republicans are being bashed. The one I feel the most strongly about, Madam President, is this statement where the minority leader said: Medicare Program costs are increasing because all health insurance costs are increasing. In fact, on a per capita basis, Medicare and Medicaid costs are increasing at the same rate as privately insured costs. On this one, Madam President, I did go to the chart makers and I have produced a chart. I will put it here and share it with the Members of the Senate and ask unanimous consent that the figures contained in this table be printed in the Record following my Statement. (See exhibit No. 1.)

Mr. BENNETT

Mr. BENNETT. I move to lay that motion on the table. The motion to lay on the table was agreed to. Vote on Amendment No. 623

Mr. BENNETT

Mr. BENNETT. There is another point I want to make, Madam President. During the debates 2 years ago there was a lot of conversation about small business. Everyone loves small business. Everyone recognizes that small business is the engine that drives the economy, because all of the new job growth comes not in the big businesses but in small business. The new job growth comes from the entrepreneurial effort, the young man or young woman who starts his or her own business, hires a couple of neighbors, then takes on a few more and pretty soon you have 8, 10, 12 employees where you had none before. If you multiply that by the thousands, tens or hundreds of thousands of opportunities around the country, you realize that is where the new jobs come from. As the big businesses are downsizing, the small businesses are providing the new job engine and opportunity. In the debate that went on with respect to the economy 2 years ago, everyone said kind things about small business. But when it came to talking about the realities of small business I, as a former small businessman, found an enormous amount of misunderstanding or, frankly, plain ignorance about the way small businesses work. Two areas concerned me the most and I am hoping that this vote that occurred last night signals as big a change in understanding of these two areas as it does with respect to how we are going to handle our fiscal affairs. The first area that upsets small business people the most, as I go around and talk to them, is the area of regulation, overregulation, but perhaps even more frustrating, simply stupid regulation--lack of common sense. It has been my experience that we in the Congress write legislation and we have a relatively focused attitude as to what will be regulated--about the distance between my two hands. We legislate to this regard. Then, when the people in the executive branch receive that piece of legislation they move the hands out and they start writing regulations within these parameters--like the fish that got away, when it is being discussed later on around the campfire. Then, after these regulations are sent out the enforcers get ahold of them and they enforce them as if there are no parameters, and the hands spread even wider. So the small business person comes to us in Congress and says, ``What are you doing to us?" We say, ``This is the legislation that we wrote''--back to the original distance between the hands. And they say, ``But we are faced with inspectors who are regulating as if there are no parameters at all.'' We have, within this Congress, a proposal that would say after we legislate, and then the regulations are written, the regulations have to come back before the Congress and for 45 days we get an opportunity to cut them back to the level that we had in mind when we passed the law. If we can make that stick we will make a significant contribution to the health and welfare of every small business in this country and, indeed, back to my comments about the anonymous Federal bureaucrat, we might even see some signs that Government is being brought under control, and not so many people are in the cafeteria after 2 p.m. The second area that was discussed last year with respect to small business that frustrated me as a small businessman coming to the Senate had to do with tax policy. It was very clear to me, with all of the wonderful things people were saying about small business, that most of the Members of this body did not understand how small businesses really operate, and did not understand the impact of our tax changes on small businesses. We were told, for example, that the tax increase would fall only on the rich. I remember clearly the chart which President Clinton referred to in his address to the Nation, where he had a series of bar graphs and the bar graphs at this end were very small. He said these are the people in this income bracket who will pay more taxes and these are the people in this income bracket who will pay more taxes. These are the people in this income bracket. Now look at the people in this income bracket. These are the people who earn over $250,000 a year. They are going to pay all the increased taxes and that is what we want. It is for the rich people to pay the taxes. As if only Michael Jordan was going to have to pay more taxes; nobody else was going to have to pay any more taxes. Now, $250,000 a year is a lot of money for an individual, but it is not a lot of money for a small business that is growing. Many times, $250,000 a year is a problem. Why? Because the business is growing and it needs money for inventory, it needs money for receivables, it needs money for additional facilities. Where is the money going to come from? It is going to come from the profits being generated. And the business, for tax reasons, is being taxed as an individual. I said in this body before, has anyone here ever heard of a K-1? That is the tax form that a small businessman or small businesswoman uses to report that income on his or her individual tax return. I pointed out in that bar graph that the President pointed to, 77 percent of the tax returns filed by people who were represented in that bar graph contained K-1 income. They were people who were reporting business income as if it were personal income in order to avoid double taxation. Yet, in this body, we were saying they were the rich and they had to have the tax increase put on them. I hope that on the basis of last night's vote, we will recognize that the way to balance the budget is not to say let us soak the rich, let us soak those who show this kind of income on their personal tax returns, ignoring the fact that in many, many instances, it is not personal income, it is business income that is being reported. And the business needs that money desperately to continue the job creation pattern. We would say, on the basis of last night's vote, the way to balance the budget is the way we did it last night, with a 99-0 vote in favor of spending cuts rather than the siren song of tax increases. I conclude with this comment, Madam President, with respect to this question of tax increases and spending cuts. In a business, you know what your costs are. And I look at what would happen if you were to cut your costs, cut your overhead. You can project that with some degree of accuracy. The thing you cannot project in a business with any degree of accuracy--well, maybe some degree, but it is pretty dicey--is how your sales are going to go, how your revenue is going to go up. So if you were facing a shortfall in your business, you can cross your fingers and hope that the sales will go up to cover that shortfall. I assure you, I have done that many times in my career, hoping against hope that the sales will go up. But the one thing you can be sure of is that if you cut your overhead, those savings will be there in the are hoping for, the increased revenues that you are hoping for are not there in the following month. Last night, we cut the overhead in ways that are predictable. When we raise taxes we are doing the same thing a business does when it raises prices and then hopes that the customers will not react negatively, hopes that it can raise prices and still continue to sell the same number of units it sold before the price increase. We in the Federal Government have a miserable track record of projecting how those price increases are going to work. I will give you two quick examples. Back as a result of the 1990 budget summit, we raised prices--``we,'' the Government--raised prices on two items, luxury boats and luxury cars. We projected that we would get more revenue out of both of these. To show what wonderful forecasters we are, on the luxury boat side, we took an industry that had over capacity, that desperately needed a price cut to survive, and mandated a price increase that destroyed the industry, caused massive layoffs and huge unemployment compensation bills. We missed that forecast terribly. But before we say, ``Oh, is that not awful that we missed that forecast,'' let us look at the forecast for the price increase on luxury cars. We missed that one just as bad, Madam President. But fortunately, for the Treasury, we missed that one on the other side. The revenue that came in from the increase in tax on luxury cars was three times what we forecast it would be. What is the lesson to be drawn from that? To me, it is very simple; it is that the Federal Government, regardless of how much we have invested in computers and economists and experts, does a lousy job of forecasting what will happen as a result of its changes in tax policy. But we can do a better job of forecasting what will happen as a result of changes in spending policy. So I think the lesson that comes out of last night's action and our examination of the contrast between this year and 2 years ago is this: We can get our fiscal affairs under control. We can cut through all of the rhetoric and the crying wolf and the horror stories and produce bipartisan support for spending cuts. Let us put the primary emphasis, like good business people would, on controlling the spending rather than crossing our fingers and hoping for the increased sales. If we do that, we are on the right course. And I, for one, take great comfort out of what happened here last evening and hope it will be the harbinger for many more headlines that say that the Senate votes unanimously for substantial spending cuts. I thank the Chair. I yield the floor.

Mr. BENNETT

Mr. BENNETT. Madam President, I ask unanimous consent that I be allowed to speak in morning business for up to 15 minutes.

Mr. BENNETT

Mr. BENNETT. Madam President, I have several matters I would like to call to the attention of the Senate. First, in this morning's Wall Street Journal, we have ``A Bureaucrat's Guide to Smaller Government.'' The following was sent in by a Federal employee who asked to remain anonymous so she can keep her cushy Government job. She describes the way in which she talked to her other Federal employees or fellow Federal employees, asking them, ``How will you know that the Government is truly shrinking?'' They came up with their top 10 list. These are the top 10 ways we can know that the Government is truly shrinking: (10) When the Equal Employment Opportunity [EEO] office has a layoff. She says: Our EEO chief gets paid more than $70,000 a year to coordinate ``diversity'' events and spout aphorisms at meetings. When that sacred cow gets a real job, I'll know the change has come. Which brings me to * * * (9) No more paid time off for diversity or charity events. She says employees can get away with murder because of the Federal culture. It lacks an urgency to produce. A lazy but savvy employee can spend most of his or her workweek attending such vital events as Earth Week, Women's Equality Day, AIDS Awareness Day, or helping in the annual United Way shakedown. She says: I'll know the cuts have had an impact when agencies like mine no longer can afford to have an $80,000-a-year employee take ``a few months off'' to work on the United Way fund drive. (8) When upper management is replaced for not making cuts fast enough. (7) When the entourage for agency heads disappears. She says: My agency has about 600 people--small by Federal standards. Even so, the guy who runs the place has a scheduler who's paid $70,000 a year, a public relations staff to write his speeches and press releases, and a clutch of assistants and advisers * * *. A Congressman or Senator can get by with fewer helpers. Why not a bureaucrat? (6) When the newspaper subscriptions stop. Scientific or trade journals are one thing, but why does the Federal Government need to buy thousands of subscriptions to The Washington Post or the New York Times? (5) When somebody gets canned--and quickly--for running a business from his desk. This one struck me, interestingly. She says: I saw my first answering machine in 1979 on the desk of a Federal employee who was running a real estate business ``on the side.'' Moonlighting on the job is still lucrative, as the chance of being punished, let alone fired, is very small. If the White House caves in to union pressure and won't push for streamlined firing procedures, then the Hill should do it and get these thieves off the payroll. She talks about the hiring freezes at lower levels, but not at the top. (3) When nobody says ``because we've always published this report.'' ``Hundreds of Federal documents,'' she says, ``are published out of habit, not need.'' No. 2, Madam President, as to how we will know the Government is being cut back: When they take ``solitaire'' off the computer. And (drum roll) the No. 1 way Federal workers will be able to tell when big Government is being cut: When there's nobody in the cafeteria at 2 p.m. She says: I believe the Federal culture can change. But does the GOP Congress have the guts to give the Federal bureaucracy a long-overdue kick in the pants? Some of us will be watching for the signs. I found that amusing, and having served in the executive branch myself, somewhat familiar, Madam President. I ask unanimous consent to have the entire article printed at this point in the Record.

Mr. BENNETT

Mr. BENNETT. Now, Madam President, I rise this morning to talk about what happened in this Chamber last night. I am interested in the fact that neither the Washington Post nor the New York Times--the paper that considers itself the paper of record in the United States--took proper notice of what happened here last night. I would like to correct that and talk about it for just a minute. I have here a copy of the Washington Times, the upstart newspaper, and it says in the headline ``Senate Votes 99 to 0 for $16 Billion in Cuts.'' Now, Madam President, we were here 2 years ago, when the Senate was fighting about $16 billion--interesting symmetry in numbers--for a stimulus package which we were told was absolutely essential to get the economy on its feet. Indeed, we were told on this floor that if we did not pass this stimulus package of $16 billion in increased spending, the economy would collapse, people would be out of work, everything would fall apart. We Republicans opposed the stimulus package. We did not have enough votes to defeat it, but we had enough votes to prevent cloture, and we kept talking about it and ultimately it was taken down. That is, for those who do not understand the language of this place, ``taken down'' means that the majority leader removed it from the floor and it was left for dead. We were told at that time, we have dealt the economy a serious blow. Indeed, that stimulus package was an appropriations bill referred to as ``an emergency.'' It was an emergency appropriations bill, the advantage of that being that it did not have to come under the budget requirements. You see, we have budget caps here and they say this is what is required. But if you have an emergency appropriation, that goes above the budget caps. We had this $16 billion stimulus emergency before us and promises of all kinds of dire disastrous events that would occur if we did not pass it. We did not pass it. The disastrous events did not come to pass. And then, in this Congress, to show the difference, we had a bill on the floor, a rescission bill--meaning we were cutting out of the present fiscal year's activities $16 billion. In business terms this is a $32 billion turnaround. While we were debating these $16 billion in rescissions, in cuts, we were told, again on this floor: Disaster. If you make those cuts you will be throwing children out into the snow. If you make those cuts you will be trying to balance the budget on the backs of those people least equipped to handle it. We were told how terrible that would be. And we persisted. We stood firm. When I came on the floor last night to vote I expected the vote on this bill stimulus package was, because we had heard all these terrible things. Then, when the vote started to come in, I was stunned to hear the people who were voting for these $16 billion in cuts. I thought maybe I am on the wrong side. Maybe this is a motion to table, because I am going to vote for this. But the other kinds of Senators, who are voting for it, are not the ones I expected to be for these cuts, having heard all this rhetoric. But I looked around--no, everybody was voting for it. As the headline says in this morning's paper, ``Senate Votes 99 to Zero for $16 Billion in Cuts.'' That demonstrates the change that has occurred in just 2 years. We have gone from $16 billion in a stimulus package that we had to have or the economy would collapse, bitterly fought over, highly partisan, narrow vote--to a unanimous vote in the Senate that says $16 billion can come out of the current fiscal year's activities without hurting the economy. Indeed, I would suggest, it would help the economy. So I am delighted to have been 1 of the 99 that voted for those cuts. I am delighted to welcome the new converts to the side of those of us who believe that the Government can survive, that we can downsize the bureaucracy, that we can get some progress toward bringing our fiscal affairs in order, regardless of the rhetoric that has gone around.

Mr. BENNETT

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

Mr. BENNETT. Mr. President, I have had to learn a new vocabulary since I have come to Washington. I would like to explain to people of America and particularly the people of Utah about this vocabulary, because they may have been watching this debate and have not learned the things that I have had to learn since I have been a Senator. When I came to the Senate, I came naively from the private sector thinking that the word ``cut'' meant that we would spend less on a program than we were previously spending. Indeed, when I talked to my children and I say, ``We are going to cut your allowance,'' that means we will give them less money per month than we were giving them before. When my wife and I sit down and we say we have to cut our household budget, that means we will spend less this month than we were able to spend last month. That is what the word ``cut'' means to me in the outside world. When I come to Washington, however, I had to learn, as I say, a new vocabulary. I learned that the word ``cut'' does not mean that we spend less this year than we spent last year. In many instances, in Washington vocabulary, the word ``cut'' means that we spend more this year than we spent last year. But you do spend less than someone promised that you might spend at some future time. So, I have had my staff look through this rescission bill to help me understand this vocabulary, and they have come up with the list of cuts, Washington style, and then compared those to cuts as the term is used outside of Washington. I would like to share a few of those. One that caught my attention--I got letters from Utah saying, ``Senator, this rescission bill will cut $42 million from Head Start. I do not want to do that. I am a very strong supporter of the Head Start Program.'' Mr. President, $42 million, under my definition of the word ``cut'' means that we would spend $42 million less this year on Head Start than we would have spent last year. However, in Washington terms that $42 million cut means that we will only spend $168 million more this year than we spent last year.

Mr. BENNETT. I will be happy to yield.

Mr. BENNETT. Like the Senator from Minnesota I do not have those figures at my fingertips. I do know that the Head Start Program from fiscal 1990 to fiscal 1995 has had a 128 percent increase during that period, and as I said in my statement, in this rescission bill it will have a $168 million increase over fiscal 1994, for a total of $3.492 billion.

Mr. BENNETT. I will be happy to yield.

Mr. BENNETT. Mr. President, the Senator from Minnesota has given us the theoretical, with respect to his own employment which may or may not constitute a cut. He has not produced any figures in it. But ultimately the basic disagreement here has two points. No. 1, with respect to his issue regarding Head Start, is it not a cut because we have not fully funded it? That is based on the assumption that money alone will solve the issue of poverty that he raises when he talks about the number of children being born into poverty every year. That is a managerial decision involving an analysis of Head Start and its contribution, how well it works, how often it does not work, what the various problems are, what problems are addressed by Head Start, what problems are not. That is not the issue I am talking about here.

Mr. BENNETT. Let me finish my point here, if I may. I am not talking about that because that is not what is going out over the television to the American people. I am responding to letters, not addressing the question of whether Head Start is adequately funded or inadequately funded; whether it is being properly managed or improperly managed; whether it is achieving its goal or not achieving its goal. I am getting letters saying, ``You are cutting back Head Start by the rate of $42 billion. Senator, we do not want to cut Head Start from its present level. We do not want to cut Head Start from the job it is currently doing.'' The point I am making is that we are not cutting Head Start back from its present level. The semantics of Washington are deceiving the American people by leading them to believe things are happening that, in fact, are not happening. And Head Start in this rescission bill does, in fact, receive an increase of $168 million, more than it had in fiscal 1994; and over the total period of time from fiscal 1990 to fiscal 1995, it has had a 128-percent increase. I want to say to the people of Utah and the people throughout the country who are saying, ``Do not cut us back $42 million from last year's level,'' we are not cutting back $42 million from last year's level. Begin to understand the Washington mentality and the Washington vocabulary. When we use the word ``cut'' on this floor, we do not mean what 99 percent of the American people think we mean, and we do not mean what 99 percent of the American people themselves mean when they use the word ``cut.'' That is the point I am trying to make. If the Senator wants to debate with me the issue of the efficacy of Head Start or the wisdom of Head Start on the adequacy of funding for Head Start in terms of what it does, that is a separate issue for a separate time. If the Senator has a further question on the issue, I will be glad to yield to him.

Mr. BENNETT. I thank the Senator for his kind remarks. I appreciate his comments and I reciprocate the personal friendship that we have because we do have a genuine personal friendship even though on the political spectrum we are probably about as far apart as we can get. But one of the delightful things that comes out of the service of this body is you become friends with people with different pasts, different attitudes, different backgrounds, different parties as well as different parts of the country, and you form the warm personal friendships that the common experience of serving in this body gives us. I thank the Senator for his comments. I do say that perhaps we should have the debate as to whether or not Head Start is the logical way to spend money in an attempt to eradicate poverty or, if there are other places to spend it more effectively I think that is the debate for another day and another time. I will return now, Mr. President, to some of other items that are on this list that I think appropriately belong in this debate. Here is one, Goals 2000. That was in the debate last year with respect to education. We are told that there is going to be a $55.8 million cut in Goals 2000. Well, after that cut, the Washington vocabulary which is applied to the bill, we find that the increase for Goals 2000 is $224 million more will be spent on Goals 2000 in fiscal year 1995 than was spent in fiscal year 1994. So people who are worried about that, ``Gee, you are cutting back Goals 2000,'' be reassured we are spending $224 million more on Goals 2000 than we did last year. Chapter 1, this is a very emotional area. If the Senator from Minnesota was concerned about Head Start, I am sure he is very concerned about chapter 1 children. In this bill, there is a cut, Washington style vocabulary, of $80.4 million. However, be reassured those of you who are afraid that there is going to be an $80 million cut from the level spent in 1994, the actual number spent in fiscal year 1995 will be $321.6 million more in fiscal 1995 than was spent in fiscal year 1994. The total spent on chapter 1 money is $7.1 billion. Again, Mr. President, $321 million more this year than last, not the $80 million cut that a lot of people think they are protesting. The Eisenhower Professional Development State Grant, a $69 million cut. I list this in the name of fairness because this is the only one on the list where I cannot say, in fact, we are going to spend more in 1995 than we spent in 1994. The effect of this action in the rescission package will be that the Eisenhower Professional Development State Grant Program will be frozen at the same level in 1995 as it was in 1994. So if you are concerned about that, you can be reassured there will be exactly the same amount of money this year as there was last year. There are more on the list. I will just touch a few of them. School to Work, people say, ``Oh, there is a $15 million cut in School to Work. We love School to Work.'' In fact, School to Work has more than doubled in fiscal year 1995 over the level it had in fiscal year 1994. So if you like School to Work in fiscal year 1994, be reassured there is more than double the money available in fiscal year 1995, and so on it goes on through. Mr. President, I ask unanimous consent that this list appear in the Record at the conclusion of my remarks.

Mr. BENNETT. Mr. President, I will leave this issue without getting into the merits of the cuts, or the Washington style cuts, rather, that we have been debating here. But I think it is something that everyone in America needs to understand. In these programs I've listed, we are not talking about afraid we are. We are simply talking about holding down the increases, increases that in many cases, as I say, are double what they were last year, which seems to me in many cases that is enough. To my colleagues who say, no, these problems are so pressing that even a doubling of the money is insufficient to solve the needs, I share with you my perspective from the experience I have had in the business world, which is that many times the worst thing you can do to a promising program or a business circumstance, product development activity, is to give it too much money too fast. There are many times the temptation to say, ``Oh, this problem is not solving itself fast enough. Let us give it more money. This problem is not moving as rapidly. Let us fully fund it.'' And you push money at a problem at such a rate that the managers of the program simply cannot absorb it and spent it intelligently. I served, Mr. President, in the executive branch. I can tell you the most hectic day in the life of anyone who serves in the executive branch is the last day of the fiscal year because on that day the spending authority expires, and all effort is exerted to get the money spent before the year ends. And money is being pushed out the door as rapidly as it possibly can be because they live on a use-it-or-lose-it circumstance. They say, ``If we do not spend the money this year, we will not get the same appropriation next year.'' Then the managerial data come back. And they say, ``You know. We had to spend it so fast that we had to take care of this artificial requirement that we do it by the end of the fiscal year that we spent it badly, we spent it sloppily, in many cases we spent it in a fashion that was counterproductive to the program we were supporting.'' That is the real reason for these rescissions, Mr. President. As a Member of the Appropriations Committee I can assure you and the American people that we went through these programs, and said, ``Where is the money that is not likely to be fenced in 1995 for intelligent management reasons? And, if we can find money of that kind, let us rescind the budget authority and only give them the amount of money they can intelligently and properly spend as good managers.'' And for that we are being accused of cutting vital programs and throwing people out into the snow, and all of the other rhetoric that has come along on this floor. I hope, Mr. President, that the information developed by my staff and available to readers of the Record following my remarks will make it clear that in many programs, we are not cutting, we are simply rescinding money that could not be intelligently spent and properly spent during this fiscal year, and, in fact, in the programs listed we are funding at a level equal to, or in some cases double, that of the level of fiscal year 1994. With that, Mr. President, I yield the floor. Exhibit 1

Mr. BENNETT

Mr. BENNETT. I thank the Chair and I thank the distinguished Senator from New Mexico. He has taken this time this morning to talk about a project that he and the senior Senator from Georgia [Mr. Nunn] initiated in the 103rd Congress, of which I was delighted to be a member. This is the program called character counts, whereby we are talking on the floor of the Senate and in our home States about the six pillars of character which the Senator from New Mexico and the Senator from Georgia have outlined, along with others in the character counts coalition, others outside of Government. I will not review all of those details because they have been spread on the record, but I think it is appropriate for us to pause for a moment and talk about the impact that we have had with this effort. As I have talked about this in my own home State, the reaction has been: ``Why are you doing this? Why take the time to talk about something so much a cliche as character-- character counts for our kids. Well, everybody is for that. It is like the old cliche, truth, justice and the American way coming out of the comic book character. We don't need to talk about that. Everybody agrees about that.'' And then, as I talk about it, some more people begin to realize that maybe we do need to talk about it. Because bit by bit over the years, the American commitment to individual character, the American commitment to teaching individual character attributes to our children has diminished, not by design but more by inertia. If you watch the television today, that being our principal source of entertainment and information, you find that references to character are constantly being eroded. For the sake of today's television drama, we glorify selfishness. For the sake of today's television action, we glorify someone who triumphs in a physical way out of a sense of selfishness, and cleverness and character and commitment and cooperation all seem to be disappearing. What we have done with the character counts coalition is reintroduce into the national dialog those aspects of character that we ought to be talking about. Have we made a dramatic impact? No. Have we caused great national consciousness to rise on these issues? No. But have we begun to turn over one little pebble at a time in the great national mosaic references to selfishness and self-glory and turn them over to become references to cooperation and character? Yes. Over time, that is the slow, steady process that will change the mosaic, that will change the overall look of the national scene. So we are in this, I say to the Senator and to the Senate as a whole, for the long term. We are in this to keep When we view it in that fashion, I am very gratified by the progress we have made since the last Congress. As we keep the dialog going, as we keep the steady drumbeat going, we have hopes and, indeed, indication that we are succeeding in quietly and slowly turning around this debate. So I hope that we can keep this up. I commend the Senator from New Mexico for his diligence and his persistence, and that in some future Congress, people will look back and say, ``You know, it was slow and steady, but ultimately those people determined to inject character education into our national fabric have produced the long-term effects that they were hoping for.'' Thus, Mr. President, I am delighted to be associated with this. I pledge myself to stay in for the long term, the way the Senator from New Mexico is in for the long term, and I have hope that in the long term we will see the deterioration of character that has been going on in this country for so long begin to turn around and change and go in the right direction. I thank the Senator for his leadership and pledge my myself to this effort.

Mr. BENNETT

Mr. BENNETT. I thank the chairman. Several Senators addressed the Chair.

Mr. BENNETT. I wish to bring to the attention of the chairman a small matter that is of importance to me and the people of my State. It involves a correction in cost allocation of the recently completed Little Dell Lake project in Utah. The Army Corps of Engineers acknowledged that an adjustment in cost allocation is warranted and is in the process of designing recreation facilities and redoing the cost allocation between the Federal and local participants of this project. We expect the correction to be finalized in a revised agreement between the Department of the Army and the non-Federal sponsors toward the end of fiscal year 1995. This is a matter of equity. The non- Federal sponsors of the project paid for 100 percent of the costs allocated to water supply and 25 percent of the costs allocated to flood control. However, because the local sponsors were inappropriately asked to cost share the joint costs of recreation, the costs for recreation quadrupled and were unaffordable. This raised the costs for water supply and flood control by several million dollars. This error was only recently discovered and the Assistant Secretary of the Army has expressed a willingness to correct the matter. Is it the understanding of the chairman that the inclusion of recreation facilities, the reallocation of costs, and the adjustment in the Federal and non-Federal cost sharing can be accomplished with funds heretofore appropriated?

Mr. BENNETT. I thank the chairman and would urge that the revised local cooperation agreement be consummated in fiscal year 1995 and that the funds be reprogrammed in the current fiscal year as well.