Robert Bennett

Mr. BENNETT

Mr. BENNETT. Is there, in fact, a limitation if someone enters into the voluntary incentive system?

Mr. BENNETT

Mr. BENNETT. Mr. President, I thank the Senator from Georgia. I am interested that he refers to the Senator from Texas and his comment about groceries, because I have a somewhat similar analogy that I think illustrates the issue we are talking about here. Come with me in your mind's eye, Mr. President, to a job interview at an imaginary company that operates under the principle that we use for health insurance in this country today. You are going through the interview, and you have arrived at a salary discussion and arrangement. You know your job duties. Now you say to your prospective employer, ``Tell me about the benefit package that you have.'' Your employer says, ``Well, Mr. Frist, we have a wonderful clothing care system here at XYZ Industries. You will really like it. Clothing, of course, is absolutely essential to your survival. It goes back as long as civilization because people have had to have clothing to protect them from the elements. We have the greatest clothing program in the world.'' You say, ``Wonderful, I will come to work for XYZ Industries, and under your clothing benefit plan, I will be properly taken care of.'' Then you come to clothe your family and you are told, ``Well, at XYZ, we cover two suits a year and one sport coat.'' You say, ``Well, I would like to buy two sport coats.'' They say, ``No, you cannot have it. Our benefit package only covers two suits and one sport coat. And, by the way, we only provide for black shoes and not brown shoes to go with those suits. Now, under the benefits that are covered by our clothing plan, we will cover walking shoes, but not running shoes. And there is a limit, of course. We have cost containment, as clothing costs have been going through the roof. There is a limit on the number of pairs of socks that will be covered under your clothing plan that we have decided is the appropriate number of socks.'' And you then get a memo through the mail that says, ``Our clothing costs at XYZ industries have gone out of sight, and so we have changed to a clothing maintenance organization, and now we have made a deal with Sears Roebuck. You go down to Sears Roebuck and they will provide all of your clothing.'' You have to go through a clothing counselor, who will meet you when you walk through the door of Sears, and he will size you up and may say, ``Well, before we will replace the suit you are wearing, we will make the decision that it has more wear left in it and, therefore, we will not authorize a new suit until there is more wear and tear in the knees of the suit that you currently have on.'' That is how we will get some cost containment and cost control. I could go on and on. But I think you understand, Mr. President, how absurd this looks to American workers and American wage earners. They would say, ``Please, Senator, eliminate this vision and take us back to the present circumstance where our employer does indeed pay for all of our clothes, but he does it by giving us some money. And we decide how many suits we want. We decide what color shoes we want. We decide whether we want to shop at Sears, or Nordstrom's, or the Gap, or Wal- Mart, or wherever. Leave it up to us to make the choices.'' We do not do that in health care. The health care circumstance is just as I have described it with clothing. No, you cannot decide that you want this kind of treatment because it is not covered under our plan. You cannot decide you want this particular doctor. We have decided that we are going in another direction. What if we did the same thing with health care that we do with clothing, or food, or shelter, or transportation, or any of the other necessities of life, and said, ``You make your own decisions and pay for it with dollars that you have set aside in savings''? What if we recognized that we have, in fact, destroyed the insurance principle in health care by saying we are not ensuring against risk; we are, in fact, paying for everything? Let me shift analogies for just a minute. I have said on the floor before in the health care circumstance that I have a homeowner's policy on my home, and it is a wonderful policy. If my house burns down, I get everything I need. The paintings on the wall get replaced. The silver in the drawers in the kitchen gets replaced. The dishes, my clothes-- everything that is destroyed in the fire gets replaced. The fire is a catastrophe. I have insurance against catastrophe. But there is nothing in my homeowner's policy that covers the cost of mowing the lawn. There is nothing in my homeowner's policy that covers the cost of repainting the front door when the dog scratches it. Do you know how much my homeowner's policy would cost if I had to file an insurance claim every time I wanted the lawn cut? ``How do you pay, Senator Bennett, for the cost of mowing the lawn and painting the front door?'' I have a savings account, and I pay American money to the son of my next door neighbor to come over and mow the lawn. And insurance is reserved for catastrophe. I am insured against catastrophe, and my insurance policy is very, very reasonable. Why are we not smart enough to do that with health care, and say, all right, the little things that we handle in health care we pay for out of savings, and we have insurance to cover the catastrophic circumstances? I have talked to insurance people. I have said, what is the number that we need as a deductible in order to make this kind of a system work? We have heard, for medical savings accounts, the figure of $3,000. The insurance people say the difference between a $1,500 deductible and a $3,000 deductible is de minimis. It really does not make that much difference. If you had a $1,500 deductible, you are only saving pennies, if you go to a $3,000 deductible. I then went to the leading hospital in Salt Lake City. I said, ``What would happen if every bill that was less than $1,500 was paid for in cash?'' They kind of blinked at me because they assumed that everything that comes in gets paid for by filing an insurance claim. They said, ``Senator, 80 percent of our emergency room admissions come to less than $1,500.'' I said, ``How much administrative savings would you have if you didn't have to process insurance claims for that 80 percent of your business?'' They said, ``Good heavens, it would save us enormously.'' We have a control group that we can refer to, Mr. President, that demonstrates the wisdom of paying for things with cash as opposed to filing insurance claims for a flu shot, filing insurance claims for an office visit, filing an insurance claim for everything that comes along. You may have heard of it. I hope more people have heard of it. The Shriners Hospital system. The Shriners are a fraternal organization that raises money that it spends to take care of children who cannot pay. The only requirement for you to get into a Shriners Hospital is that you do not have the capacity to pay for the treatment. That is it. You have to be sick, of course. But if you are sick, and you do not have the capacity to pay for your treatment, you can get into a Shriners Hospital. Here are the numbers from the Shriners Hospital in Salt Lake City, UT: 4 percent of their budget goes for administration; 96 percent goes for health care. Why? Because they do not deal with a single insurance company, and they do not deal with a single Government agency. They do not have to fill out any forms or screen anybody for eligibility beyond convincing themselves that these people cannot pay. What is the cost of treatment in the Shriners Hospital? Here is the number: $95 a day. I have said this, somehow you are missing a decimal point. It has to be $950 a day. That is what it cost in a modern hospital: $95 a day because they do not have any of these administrative costs. It does not pass the Bob Newhart test. I ask unanimous consent that I might have another 3 minutes to explain the Bob Newhart test.

Mr. BENNETT. Here is the Bob Newhart test. Have you ever heard Bob Newhart discuss, as if he had no previous experience at all, the smoking of tobacco with Sir Walter Raleigh? Bob Newhart is on the phone, and he is saying, ``Let me get this straight, Walt. This is a weed, right? This has no food value, and you want to bring it over here? Tell me, Walt, what do you do? You roll it up? And, yeah, OK, Walt. Now you stick it in your ear. Right? No, no. You stick it in your mouth? Come on, Walt. What do you do with it? You roll this weed up and stick it in your mouth? Yeah, Walt. You set fire to it, and you start breathing the fumes?'' Bob Newhart has made a great comedy career out of doing that kind of analysis of the stupidities of the things that we do in our lives. Our medical system of insurance does not pass the Bob Newhart test. I have tried to put it in that context by saying this is what would happen if we bought clothing the way we buy health care, if we had to file an insurance claim for the cost of mowing the lawn, and everybody laughs. But that is where we are, and the people who are opposing medical savings accounts are the people who do not realize the absurdity of the present circumstance, who have gotten themselves in the mindset that since we have done it this way, this is the way it always has to be. If you can only step back and look at it honestly, you realize how many problems you solve if you say that health insurance should be like car insurance and homeowners insurance and flood insurance and earthquake insurance and tornado insurance. Health insurance should insure us against a catastrophe, just as we use money to make the decision whether we want brown shoes or black shoes, just as we use money to make our own decisions on whether we want to replace the suit or wear a sport coat. We should use money to say, ``I am going to get a flu shot; I am going to take care of this hangnail; I am not going to file an insurance claim with all of the administrative costs connected with that.'' It is just plain common sense, and it more than passes the Bob Newhart test. I thank the Chair. I yield the floor.

Mr. BENNETT

Mr. BENNETT. Mr. President, I am interested to find out that Alan Greenspan and the Fed are now responsible for the disparity between the rich and poor, according to this morning's paper. The fact is, Mr. President, there are fundamental economic laws that have operated in the 1950's, the 1970's, the 1990's, and will operate into the next century. The most fundamental of these is: You cannot repeal the law of supply and demand. Attempts to artificially repeal the law of supply and demand by artificial fiat make us feel good in the short run, but they get us into trouble in the long run. The most significant thing the Fed can do is control the money supply in such a way as to keep prices stable so markets can operate. When we try to fiddle with markets by Government fiat, we get into all kinds of trouble and end up paying tremendous prices for that later on. I support Chairman Greenspan's nomination, and I support his stewardship at the Fed. I am proud to be a cosponsor with my friend from Florida of the bill to change the Humphrey-Hawkins Act so that the primary focus of the Fed becomes price stability. Mr. SIMON addressed the Chair.

Mr. BENNETT. Reserving the right to object, Mr. President, I had planned to speak in relation to Alice Rivlin once all the time had expired. If the agreement is going to extend time, then I want to be included. If time is going to be allowed to expire, I will await my time and ask for unanimous consent in the due course of events. I ask the Senator from Florida to decide whether he wants to go for that or let me take my chances.

Mr. BENNETT. No. I think we said all we need to say about Fed policy. I do wish to reserve my right at some point to comment about Alice Rivlin.

Mr. BENNETT. Mr. President, I am tempted to go on with this debate, but I think it has probably been exhausted sufficiently on both sides. I will use the time granted to me under the UC agreement to discuss another issue.

Mr. BENNETT

Mr. BENNETT. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. BENNETT

Mr. BENNETT. I thank the Senator. Mr. President, we here in the greater Washington area have been celebrating the remarkable baseball career of Cal Ripken. I sometimes do not like sports analogies, but I would like to draw on one relating to Cal Ripken, and other sports heroes, to give you my take on the majority leader, the Senator from Kansas, Bob Dole. We have sports heroes in the various sports that we follow in this country, who will have a brilliant season, and as a result of that brilliant season, be all over the papers as a tremendous performer. And then something happens and they fade from our consciousness. If I can switch from the Orioles for just a moment and go back to the New York Yankees, I would like to talk about Roger Maris, who set a record for the most home runs in a single season. When you think of the primary home run hitter of the Yankees, you do not think of Roger Maris, you think of Babe Ruth, or of the modern counterpart to Babe Ruth, Hank Aaron. Babe Ruth had a brilliant season, with 60 home runs. But the reason we remember him is because he endured over a long period of time and set the record for the most home runs in an entire career, which stood until Hank Aaron came along and did more over an entire career. We must judge Senators, public leaders, not on the basis of a brilliant season, or a brilliant speech, or a brilliant campaign, but by what they do over a long career. Bob Dole came to the U.S. Senate in 1969, the year Richard Nixon assumed the Presidency. I was in Washington at the time and had the privilege of serving in the Nixon administration. It was known around town that Bob Dole was the ``rookie of the year.'' Bob Dole was the brightest star of the new Senators taking office as a result of the 1968 campaign. Now, did he have a single brilliant season? Fast-forward the tape. In 1976, Bob Dole was chosen as the party's Vice Presidential nominee. It was not a flash in the pan in his first experience in the Senate. He was a national figure chosen to be number two on the ticket. That ticket failed. Did Bob Dole fade? In 1985, after Howard Baker retired from the Senate, Bob Dole was chosen by his colleagues to be the majority leader, and then he went on to serve longer in that position than any other Republican in history. When we look at this man, we can pick out the brilliant seasons here and there, but the real legacy of Bob Dole is the long career, putting together a string of brilliant seasons and a long legacy of service. I remember, as a new Senator, listening to the then majority leader, George Mitchell, talk about service in the Senate. He said that it is a great honor to serve in the Senate of the United States, and that very few people have had that honor. And then he went on to say, with some truthfulness and a little wry smile, that many of those people disappear and are forgotten after they have left the Senate and leave behind no legacy whatsoever. He said that only a few make a serious difference by virtue of their service in the Senate. And then he said that one of those that we serve with, whom we know will be remembered for his towering contribution--and these are not his exact words, but I am not doing violence to them--will be Bob Dole. I thought that was a particularly generous tribute for George Mitchell to pay to his adversary across the aisle. That comes to mind now as we contemplate Senator Dole leaving this arena in order to compete in another. It is not the brilliant season, it is not one particular campaign, or one particular legislative accomplishment that we remember. We honor the fact that this man has been at the center of American politics for longer than any of the rest of us, in a serious way, in the serious debates, addressing the serious issues. So we wish him all the best, regardless of party, on a personal basis, and as a personal tribute to the fact that we have been privileged to serve with one of the great Americans of our history, the Senator from Kansas, the majority leader, our friend, Bob Dole.

Mr. BENNETT

Mr. BENNETT. I thank the Senator from Georgia for his courtesy and his support and his leadership in putting together this afternoon's objectives. As I understand it, we are talking this afternoon about the crossroads that America finds itself at in this quadrennial year, 1996. It is leap year; it is the year for the Olympics; and it is the year Americans decide who gets to stay in the White House until the next leap year and the next Olympics. As I look back on 1992, the last time we had one of these elections-- I have a very clear memory, because 1992 was the year that I ran for the Senate. It was a very interesting year. President Clinton was then Governor Clinton, and he was attacking an incumbent President. Ultimately, the Clinton message in 1992 came down to a single word. The word was ``change.'' President Clinton was campaigning in favor of change and was calling upon Americans to vote resoundingly for change. I had a very strong reaction to that, because ultimately my campaign for the Senate came down to a single word, and that word was ``change.'' I campaigned for change. I got here and met the other freshman Senators in that group and found that virtually every one of them, regardless of party, had campaigned for change. I remember one of my colleagues on the Democratic side saying that she received a phone call some 3 weeks after the election and the voter said: ``I voted for change. Where is it?'' She said: ``I haven't even taken office yet.'' The caller said: ``Well, you promised me change, and you haven't produced, and I'm impatient.'' What kind of a change did President Clinton give us once he did take office and take the oath of office? It was very interesting here as a Member of this body to see what happened. He became, if you will, co- opted by the Democratic leadership in this House and in the other one. Senator Mitchell said, ``You don't need to talk about reducing the size of the congressional staff, we already did that.'' ``Oh,'' said President Clinton, ``I didn't know that, so we'll allow spending as usual to go on in the Congress.'' ``Well, what about changing the Tax Code?'' ``Oh, you don't need to do that,'' said Senator Mitchell and Speaker Foley, ``we've already taken care of the Tax Code. As a matter of fact, what changes you do need in the Tax Code should be on the upside rather than the downside.'' ``Oh,'' said President Clinton. ``Well, as long as you tell me that's what it ought to be, I will do it.'' I remember the first major battle we had in this Chamber on the issue of change. The President proposed an emergency appropriations bill. Now, Mr. President, what does it mean when you say ``an emergency appropriations bill''? I had to ask that question. I was new; I didn't understand. They explained it to me. If you have an emergency appropriations bill, that means it does not have to fall under the restrictions of the reconciliation bill or the budget bill. That means it goes directly into the deficit without stopping any way through. We had a $19 billion emergency appropriations bill on this floor that we had to have to meet all the emergencies. What were the emergencies? Well, there was a warming hut that needed to be built by a skating rink somewhere in New England. Great emergency. Somehow they had gotten by skating on that pond or that local rink for a long time, but now there was an emergency; we had to have that warming hut. We had to have a whole series of things that were in that genre, and Bob Dole from this desk stood up and said, ``No.'' I realized, from that desk way over there, as a very new freshman, that what we were seeing was not change; it was business as usual. Promise one thing, then when you get to the Congress, when you get in office, cloak everything you do in confusing terms, call this an emergency; but basically pork-barrel spending for the President's political base in the same pattern as it had always been. What we were seeing was an attempt at business as usual and from Senator Dole an attempt to stop business as usual and produce change in the way things were done. From this very desk where I stand today, Bob Dole organized the Republicans in this Chamber who stood together in defiance of business as usual and brought about the first demonstration of real change in the way business is done when, by use of the filibuster, they stopped the President's stimulus package and insisted that those spending items had to be put in the budget. I remember, Mr. President, we wore buttons that said, ``Just pay for it.'' Do not let it go directly to the deficit and borrow money. Find a place where you would pay for it with some kind of spending cuts someplace else for these emergencies. When it finally happened, the Presiding Officer remembers, we ended up passing that portion of that appropriations bill that was really needed, but somehow the rest of it disappeared and the Republic survived. The emergency passed and no dire consequences occurred. I must confess, I do not know if the warming hut on the skating rink ever got built. I rather suspect that it did, if the local community that wanted it wanted it badly enough. But somehow we saw the beginning of real change by virtue of Bob Dole's leadership standing up to political business as usual in that circumstance, and that went on all through the 103d Congress, until in the election of 1994, the American people said, ``We want change,'' even more loudly than they said it in 1992. Only this time the President got the message in a different fashion. Not one single incumbent of the party opposing the President was defeated in that election. Not one. That is an extraordinary historical fact. This has never happened before, that I know of, in American history. The Republicans took control of both Houses of Congress and the President suddenly got very, very nervous on the issue of change, because the Republicans were determined to produce change, the change that President Clinton promised before he slipped into the control, if you will, of the Democratic leadership of the Congress, and blame the advocate of business as usual. As I say, we are coming up to another election. I was at a dinner party a month or so ago where a number of people were talking politics. It is hard to go to a dinner party in this town where people do not talk politics. The host said, ``I want to pose a couple questions.'' He said, ``If Bill Clinton is reelected, what will he do in his second term?'' or, conversely, ``If Bob Dole is elected, what will he do in his first term?" Interesting. No one at the party had the slightest idea what the answer to the first question was. Nobody knew what Bill Clinton will do in his second term. Will he revive health care as a major issue? No one knew. Will he try to restructure the Tax Code, either raising or lowering? Nobody knew. What will he do about balancing the budget? Nobody had the slightest idea. Then someone said, ``Well, what would Bob Dole do if he got elected?'' ``Oh, he'll work on restructuring the Tax Code. He'll work toward a balanced budget.'' He will do a whole list of things. I said, ``Wait a minute. Bob Dole is supposed to be the candidate with no vision. Bill Clinton is supposed to be the candidate that has a clear idea where he wants to take the country. Why can't any of you tell me what Bill Clinton will do in his second term, but you all can give me answers to what Bob Dole would do in his first term?" We all looked at each other as if we made a great discovery, that Bill Clinton talks about this and he talks about that, and he gives speeches saying we have to reform welfare, and he says the Republicans are right on a whole bunch of issues, and he seems to be co-opting all of the Republicans' positions, but he never really makes it clear what he intends to do if he gets elected. In the language of the business world, he is keeping his options open. In other words, he is keeping himself in a circumstance where he can go wherever he wants if he gets elected without ever tipping his hand as to what his intentions really are. Mr. President, let me tell you what I think his intentions really are. I have tried to examine the entrails of this particular owl and see if I can read them and come up with a prediction of the future. So let me take a stab at it. I believe Bill Clinton does have a clear idea of where he wants to take America. I go back to the 1992 campaign when he was asked for his vision and he said, ``I am concerned about the security of every American, the security of their job, the security of their income. I want an America that will make everyone secure.'' Have we heard this before? Yes, Mr. President. This sounds like the rhetoric of most European politicians. I believe Bill Clinton wants to make the United States a modern European industrial state. Let us pick one as an example. I do not know whether he has this one in mind. Germany is a modern industrial European state. I think it is no accident that the first priority that President Clinton had was to give America a health care system modeled on the German model. What happens in a modern European industrialized state? Well, there is a lot of security. If you lose your job in Germany, the Government steps in and you can live for a long time on the kinds of payments the Government will give you. Indeed, unemployment in Europe is twice as high as it is in the United States and four and five times as long. If you lose your job in the United States, statistically you are likely to find a new one in 6 months. The majority of people who are unemployed find a job within 6 months or less in the United States. Something like 60, 70 percent of the people who are unemployed in Europe stay unemployed for 4 and 5 years. This is the kind of country we would have if we were a modern European industrialized state: Unemployment twice what it is in the United States today, a tax burden of higher income taxes, higher payroll taxes, and consumption taxes, to boot, that would be close to something like a 14 percent national sales tax--that is the value-added tax level in Europe, different maybe in different countries, but basically around 14 percent--a much higher deficit, and a much higher national debt in proportion to the size of our economy. As concerned as we are about our national debt, our national debt is the lowest of all of the industrialized countries in the world. President Clinton would like to take us in that direction. I sit on the Joint Economic Committee. President Clinton's principal economic adviser, Dr. Laura Tyson, testified before the committee after the Clinton administration took power. She said to us on that committee--I still remember it very clearly-- she said, ``Compared to the other industrialized nations of this world, the United States is seriously undertaxed,'' and then implied this administration is going to fix that. No. I think we know the direction in which President Clinton would go in a second term. It is the direction toward turning the United States into a North American version of Germany or France or Sweden, just as those countries are desperately trying to get out from under the kind of governmental control that has grown up there since the Second World War and are grasping to become more like the United States. There is an alternative, of course, in November. That is the candidate for whom, in my belief, the principal interest is not security, but opportunity, an opportunity for a good job, an opportunity for a good education, an opportunity to contribute, to build, to save, to create circumstances for one's family that can make those circumstances better. Opportunity is a little scarier than security. But throughout history, opportunity pays better. Countries that are built on opportunity do a whole lot better than countries that focus entirely on security. So, Mr. President, I thank the Senator from Georgia for giving us this opportunity to talk about the differences that are going to be starkly portrayed between now and November. As I get ready for the November election, I am going to go back to 1992 in my old play book and pull out the word ``change'' that worked so well in 1992 for all of us, and recognize that in 1996 Bob Dole will be the candidate of change and Bill Clinton will be the candidate of the status quo. Bob Dole will be the one who wants to take the Tax Code and turn it into an engine of opportunity. Bill Clinton will be defending the Tax Code and saying, it is just fine except it needs to be a little higher here or there. Bob Dole will be the one who is saying we must change welfare so these people have an opportunity to get off of it. Bill Clinton is the one who will be saying, no, let us hang on to the basic principles of the status quo and across the board. In 1992, the American people said, ``We want change.'' They got business as usual. In 1994, the American people even said more loudly, ``We want change.'' Unfortunately, they have gotten gridlock because the White House has not gone along with the change that came by virtue of the Congress. In 1996, the American people will have one more opportunity to say, ``We want change,'' and this time achieve it if they give Bob Dole the opportunity to carry out that which he has told us he will do instead of voting to keep the status quo. Mr. President, I yield the floor. (Mr. BENNETT assumed the chair.) Mr. COVERDELL addressed the Chair.

Mr. BENNETT

Mr. BENNETT. I thank the Chair. Mr. President, money does not come from the budget. Money comes from the economy, and we have to learn in this body and the other body and in the White House to pay attention to the results from the economy instead of spending all of our time reviewing the numbers of the budget and listening to the computers of the budget who project blindly into the future without making the midcourse adjustments. The record is very clear. The tax program that was followed during the Reagan years produced record revenues--not reduced revenues, record high revenues. The problem of the deficit occurred on the spending side, and it occurred on the spending side because of the changing demographics in the country and the growing spending on entitlements. Nobody is to blame for that except the elderly who do not have the courtesy to die with the same regularity that they used to, and I, for one, do not want to call upon them to start doing that now just to balance the budget. But that is the new reality of the marketplace, that is the new reality of the economy, and we must adjust our rhetoric to that reality instead of trying to go back and fuzz the factors of the past and say, somehow, President Reagan is responsible for all of our difficulties. No, our difficulties are rooted in the changes that are occurring in the country. We must recognize that fact, and we must put in place the structural discipline that will force us to recognize that fact in the form of the balanced budget amendment. I thank the Chair. I did not want to leave the statements made by the Senator from Nebraska unresponded to, responding to in my own name, recognizing, as I said, that the majority leader is more than capable of responding in his own behalf.

Mr. BENNETT. Mr. President, I have listened with some interest while my colleague from Nebraska has spoken. I am sure it will come as no surprise that I disagree with just about everything he has had to say, particularly with respect to the majority leader and his position. But I will not speak for the majority leader. He is more than capable of speaking for himself. I would like to get a few facts on the record that I think need to be part of this debate. Fact No. 1: Money does not come from the budget. I know that comes as a great surprise to this body, but money comes from the economy, and if the economy is growing and vibrant, there is lots of money in the Treasury. If the economy is shrinking or depressed it does not matter how much the budget projected would be there, it will not be there. So the one thing that frustrates me the most, coming from the business world into the Congress, is this insistence upon making projections, all neat and balanced down to the last dollar, and then assuming that is the way things will turn out. It is like a businessman who says at the beginning of the year, ``I project we will have so much revenue from our business this year. Accordingly, I will adopt a budget for x amount to spend that much revenue.'' I have been in that circumstance. We made projections for a business that I was CEO of. As it turned out, we fell 10 percent short of our projections. That should not bother too many people. Ten percent is not that much money. The problem is, our spending was based on the projection of revenue, and we had to change the spending pattern midyear, indeed midmonth, when it became clear to us we were not going to make as much as we thought we were going to make. We had projected a 100-percent increase in that business, and we had been doing that every year up to that point. As it turned out, we only had a 90-percent increase. As I say, we missed it by 10 percent. We had to adjust immediately or we were headed for a loss year. We do not do that around here. We say oh, no, the budget projects such and such, so we will spend such and such, regardless of what happens in the real economy. Let me give the Senate an example. We stood here, my first Congress, the 103d Congress, and heard projections of how much money would come from the tax increase that President Clinton proposed. We heard numbers, hundreds of billions of dollars will come if this is done and we need to do this to balance the budget. The deficit is so much, we are going to get so much, this is how this is all going to work out. I put in the Record before, so I will not do it again, an article by Marty Feldstein, one of the more distinguished economists of this country, who, looking back after 2 years, said, in terms of actual revenue, the Clinton tax increase produced only one-third as much money as was projected. Why? Simply because the economy reacted. People were faced with tax increases in one category of their investments so they switched investments to someplace else to avoid taxes. You do not have to be, really, very smart to figure out how that happens. So President Clinton proposed a tax increase. It was passed by the previous Congress, and then the results came in and the results were that we only got one-third as much revenue as the President had projected we would. People changed their behavior. It is very hard to convince a computer that is what is going to happen. The computers are programmed around here to assume the static analysis, on and on and on. The Senator from Nebraska heaped great scorn upon the supply-siders and carried on with the kind of rhetoric we have heard before in this Chamber about how it was the terrible tax cuts under Ronald Reagan that produced the runaway deficits we are all living with. That has been repeated so many times that people are beginning to believe it. Mr. President, I do not have the time to give this argument again. I have given it before, but I have discovered in the Senate there is no such thing as repetition. But I will do my best to summarize it. In 1989, which was the last fiscal year we operated under the tax structure that was created by Ronald Reagan, income taxes produced 8.6 percent of gross domestic product coming back to the Government. So, however big the economy was, 8.6 percent of that came back to the Government in revenue. Then said those: ``Oh, no, the terrible Reagan tax cuts have caused us to not have enough revenue. Tell you what we are going to do, we are going to have first the tax increase that occurred at Andrews Air Force base and then the Clinton tax increase that came in the 103d Congress.'' And with those two successive tax increases, what did we get in fiscal 1995? The tax increase hit in 1993. What did we get in fiscal 1995? If we got only 8.6 percent of gross domestic product under the disastrous Reagan proposals, should we not be expecting 9, 9\1/2\, maybe even 10 percent? The fact is, instead of going up, revenues went down. Yes, down. In fiscal 1995, income taxes produced 8 percent of gross domestic product, almost 10 percent less of gross domestic product than was the case before. It is very clear that the tremendous deficits that we have heard about and we have talked about and we spend time on did not come as a result of the Reagan tax cuts. Federal revenues went up every single year under President Reagan. The economy grew rapidly. Once we came out of the recession that occurred at the beginning of Reagan's term, we had the longest period of economic expansion peacetime in our history.

Mr. BENNETT. Mr. President, I ask unanimous consent that I be allowed to continue for 3 additional minutes.

Mr. BENNETT

Mr. BENNETT. Thank you, Mr. President. This problem, like the poor, seems to always be with us. I can remember debates about balancing the budget and dealing with the budget deficit that go back 30 and 40 years. In the 1992 election, when President Clinton ran, this was a major issue, primarily because of Ross Perot. Ross Perot raised it, Ross Perot made an issue out of it and Ross Perot, I think, got his finest reaction on the television, when he was being attacked for his lack of experience, when he responded by saying, ``You're right; I don't have experience. I have never run up a $4 trillion deficit in any of the businesses I have run. I don't know how to do that.'' I am not a supporter of Ross Perot. I voted for George Bush and campaigned for George Bush and think the country would be better off if George Bush had won. But I do give Mr. Perot his due for having focused our attention on this issue. I ran in 1992 as well, so was heavily involved in it. At the time, the deficit was around $300 billion a year. I remember saying to those people who came to my town meetings and heard me as I was campaigning, ``Let me make a prediction. I predict that no matter who wins the election, the deficit will go down, and it will go down fairly significantly, and every politician in Washington will take credit for having made it go down, and none of them will have had anything to do with it at all.'' I think I predicted correctly. The deficit has gone down. It is roughly half what it used to be. Let me remind everybody, lest they fall into the trap of misunderstanding what I am saying, the deficit is not the debt. To say the deficit is half what it was in 1992 is like saying to your teenaged child, ``You're overspending by $200 a month your allowance, but that's all right because you used to overspend by $400 a month, so your deficit has been cut in half.'' No. The debt keeps going up with every dollar of the deficit. But the deficit has indeed been cut in half. Why was I able to predict that the deficit would be cut in half in 1992 with such accuracy? Two things. As I say, the politicians had nothing to do with either one of them. No. 1, the cold war is over. President Clinton talks about the number of Government employees who have been severed from Government service since he has been President. He says, ``We've eliminated some 270,000 civilian jobs.'' He is right. Over 200,000 of those are in the Defense Department. This is the so-called peace dividend that we heard about for so long. We are now at peace. The cold war is over. We are not spending nearly as much on the Defense Department as we used to. We have eliminated some 200,000 jobs of civilians in the Defense Department. As a result of that, the deficit has come down. Did any politician here have anything to do with it? No. In my opinion, the politician who should be most credited with ending the cold war is named Ronald Reagan. And he left town some time ago. The second reason the deficit has come down is because the savings and loan bailout has been taken care of. I am a businessman. Anybody who has been in business knows what an extraordinary expenditure is. An extraordinary expenditure is something you have to pay that is not part of your everyday activity. We had to pay hundreds of billions of dollars to the depositors at savings and loan institutions whose money was insured by the Federal Government. These S&L's went under, and while we can prosecute the owners and the managers of the S&L's if they have committed fraud, we have an obligation to pay off the depositors. So the cost of paying those depositors was going through the budget process like a pig in a python--a big bulge. Once it was digested, the python went back to its normal size. We paid off the last of the savings and loans obligations a year or so ago. Somewhat to our surprise, we found out the properties we were left with, those S&L assets we seized in order to pay off the obligations, are worth more than was anticipated. So we got more in selling those properties than we expected, and we did not have to pay as much as we had expected in the obligations. Put those two facts together and what do you get? You get a reduction in the deficit short term, one time. That is what I want to emphasize. This reduction in the deficit that was so predictable is a short-term, one-time phenomenon. Look at the future and you see what June O'Neill, the Director of the Congressional Budget Office, told us in the Appropriations Committee last week; by the time some of the young folks who are here in the galleries observing the Senate operate are into their careers, that is, in the year 2020, 2030, not that far away, if we do not do something about the structural deficit--not this extraordinary expenditure kind of deficit that we had--if we do not do something about the structural deficit, June O'Neill says, at that point the national debt will be 180 percent of gross domestic product. In other words, we will owe 180 percent of everything we produce in a single year. That is the same as saying, ``OK, if you have a $100,000- a-year salary, you have $180,000 in debt.'' The highest point in our history in terms of our debt was at the height of the Second World War when our debt stood at 130 percent of our gross domestic product. That was when we were at war fighting for our survival. We were willing to risk the debt under those circumstances. The regular structural debt--that has nothing to do with war, nothing to do with emergencies, nothing to do with drought--in the working careers of the young people who come on their spring breaks and vacations to see us in the gallery, in their working careers you will see the debt higher than it was at the height of the Second World War if we do not do something about it. We do not seem to be able to do anything about it. We passed balanced budgets. The President has vetoed them. We have come up with ways of controlling the spending. The President has vetoed them. Again and again we have had a legislative fix, and the answer has been, ``We'll deal with that tomorrow.'' I have said on this floor before, I think the theme song of this administration should be from the musical ``Annie'' because Annie was always singing about ``tomorrow, tomorrow,'' we will balance the budget tomorrow. It is always a day away. When we say, let us start today, it is always, well, if you start today, it will start to hurt a little bit, so we will promise to hurt you tomorrow, but we will continue to spend today. Apparently, the only way to get anybody's attention finally in this circumstance is to put it into our basic law. I have resisted this all my political career. I felt the Constitution should not be tampered with. I am a very reluctant and late-coming convert to the idea of a balanced budget amendment to the Constitution. I am there because I have come to the conclusion that there is, in fact, no other way. So I join with my colleagues rising on the floor today to say, not tomorrow, today, and not through hopes and pledges and expressions of good intentions, but through writing it into our basic law and putting into our basic structure on which all other laws are built the requirement that we get our financial affairs in order, so that the young people who come to see us can send their children to come to see our children and have the debates over substantive ways to spend the taxpayers' money, instead of being in a circumstance where we have no choices because everything has to go to service the enormous national debt that we are looking at if we do not get this circumstance under control. For that reason, Mr. President, I join with my colleagues in endorsing a balanced budget amendment and hope that we are successful this week in seeing it pass. I yield the floor. Mr. COVERDELL addressed the Chair.

Mr. BENNETT

Mr. BENNETT. Thank you. Mr. President, I want to join in paying tribute to Senators Chafee, Breaux, and Domenici. Even though Senator Domenici is not part of our group, he has given us at least a friendly handshake as we have gone about this and made it clear that he is not opposed to our effort. I certify my support for these Members of the Senate because, as I sit here and listen to them, I realize that unlike some of our colleagues on both sides of the aisle, indeed, unlike myself on occasion, they have approached this problem with a desire to legislate the solution rather than craft a political position. And I think that is in the highest tradition of this body. I am proud to be associated with them, and I am proud of them. There are those who have tried to craft a political position out of the budget on both sides of the extreme. And there are those, frankly, who have tried to craft a political position in the middle and posture as the reasonable ones in the middle. The problem with those who have tried that is that they have never reached across the partisan aisle and tried to bring in people who really disagree with them in an effort to legislate. My father used to say, ``We legislate at the highest level at which we can obtain a majority.'' I find that to be a good summary of the process around here. I congratulate, again, these Senators for their effort to try to obtain a majority and try to legislate the problem. Now, when I am out in my home State and I tell people about this group and then say to them that I am part of it, I receive the highest applause and the highest praise of any position that I take. The people of my State, who are viewed generally in the Nation as being fairly right-wing--Utah is viewed as being the most reliable Republican State in the Nation--are as excited about the idea of a bipartisan solution to this problem as they are about any Republican position that I present to them as I am there in town meetings and in other conversations. Now, this is an enormously complicated problem. We have heard some of the details from the Senator from California, and we have heard some of the statistics and details from the Senator from Rhode Island. We will hear more as this goes on. Whenever you are faced with a problem as complicated as this one--I know of none more complicated--the one thing you want to be absolutely sure you are working with is correct numbers. You cannot run the risk of making these gigantic decisions on the basis of numbers that are wrong because, if you do, you are going to get a result that is wrong sure as you are sitting here. If I may go back to my private life experience and give you an example that comes to mind as I deal with this, I was once a consultant to a business that was having some problems. One of their problems was that they were shifting from a manual accounting system over to a computer accounting system. That dates me, I suppose. This obviously took place in the last decade when computers were new. As a result of their shifting from a manual accounting system to a computer-driven system, they flew for about 6 months without any accurate numbers. They did not really know what their sales were. They did not really know what their costs were. Most important, in retrospect, they did not know that they had by a very small amount missed the percentage of their sales that should be ascribed to inventory costs. Their inventory costs were off just a small percentage all the way through. When they finally finished the transfer from the manual accounting to the computer accounting, now they were 6 months behind and they had to bring these other statements up to speed. Finally, they got to the end of the year and they did what every business does at the end of the year. They took physical inventory. They were flying along knowing that they were losing a little bit of money, and they took physical inventory where they were forced to adjust to reality, and, instead of a narrow loss, they had a $3 million loss. For a company that size, that was sufficient to cause the bank to call the loan, the board to fire the chief executive officer, and a series of assets to be sold to try to make up the difference. If they had only known while they were flying in that mission that they had made this small adjustment that kept chipping away at their profits at every single sale, a few cents here, a few cents there, a dollar or two here, a dollar or two there, and as the sales washed through for a whole year, a $3 million inventory adjustment at the end of the year. We are doing the same thing, Mr. President. The CPI is wrong. It is wrong on the high side, and everybody knows it. But we are flying just as blind as that business did, and we are letting that adjustment chip away every day in every Social Security check, in every Medicare payment, and in every wage adjustment that little error gets chipped away again and again and again. When the bill finally comes, not in the form of the physical inventory at the end of the year but in the form of an enormous national debt and national deficit, we will not be able to solve it by firing the Chief Executive. We renew his contract every 4 years anyway, and we only give him two shots at the job by the Constitution. We will not be able to solve it by selling off a few assets. We will not be able to solve it by renegotiating our line of credit at the bank. The most important thing in this centrist coalition proposal is the courage to face the facts that the CPI is wrong. I have heard on the floor we have not had hearings on this. Yes, we have. The Finance Committee has had enough hearings. The leading and senior members of the Finance Committee take the floor and say to us that this is something we must do. We are being told it is going to hurt people too much. Is it going to hurt people as much as having the whole program go bankrupt? Is it going to hurt people too much to make that little adjustment and thereby avoid the end of the year inventory adjustment that hits you like an atomic bomb? No; Mr. President, the most important thing you have to do when you are faced with the problem of this complexity is to have good numbers. The most important people in the world, dry and dull as they may be in this kind of a circumstance, are the cost accountants, the ones who give you the sound numbers that you are dealing with. Once they have given you the numbers, fine, get them out of the room and let the policymakers make the decisions, but let them make the decisions on sound numbers. So there are many things in this proposal that I disagree with. There are many things in this proposal that I really do not like, and I would have gone a lot farther than the centrist coalition would have gone in a number of areas. There were times when I was willing to walk out of the room and say, ``No. You have crafted something I can't possibly support.'' The thing that brings me back and the thing that brings me to the floor tonight is the courage of this group to move in the direction of right numbers, to move in the direction of properly monitoring what is really happening in the economy and thereby avoiding that inevitable day of reckoning that comes when you let the wrong numbers chip away at you day after day, month after month, and year after year. In the chart that the Senator from Rhode Island gave us, we see the result of that constant chipping away, and we see the projection of where it will be. Mr. President, this is a courageous act of proper legislation, and I am happy to be a part of the effort. Mr. BREAUX addressed the Chair.

Mr. BENNETT. Yes.

Mr. BENNETT

Mr. BENNETT. Mr. President, I ask the distinguished Chairman, Mr. Dominici, to clarify an item in the budget resolution regarding the Natural Resources and Environment budget outline. The third point under discretionary assumptions states that the chairman's mark assumes the elimination of the discretionary funding of the Colorado Salinity Control Program and not the termination of the program. The Colorado River Basin Salinity Control Program is a very important water quality program for the seven basin States, including my own State of Utah and the chairman's great State of New Mexico. Elements of the program are found in the U.S. Department of Agriculture, and the U.S. Department of the Interior, Bureau of Reclamation, and Bureau of Land Management. Am I to understand that the word ``elimination'' refers only to the discretionary funding, since the program is now funded on the mandatory side of the budget?

Mr. BENNETT. I thank the chairman for helping to clarify this item.

Mr. BENNETT

Mr. BENNETT. Mr. President, I am introducing a bill to amend the 1993 Utah School and Lands Improvement Act, Public Law 103-93. The purpose of this legislation is to correct boundary problems on the Goshute Indian Reservation in Utah. The Goshute Tribe is a federally recognized tribe whose reservation is located on the western border of Utah. Approximately one-half of the Goshute Reservation is in Utah, the other half is in Nevada. This legislation would transfer about 8,000 acres of state land to the Tribe along with about 400 acres of public land administered by the BLM. The public law to be amended by this bill was enacted without opposition in 1993. This law transferred approximately 200,000 acres of Utah state lands to the federal government with the understanding that the federal government would compensate the state in an amount equal to the appraised value of the transferred land. When the law was passed, it was done so with the understanding that state lands located within the reservation boundaries of both the Navajo and Goshute Tribes would be transferred to the United States to be held in trust for the respective tribes. At that time, the Goshute tribe requested that the Utah delegation address a boundary issue on the reservation. After some initial negotiation, the Tribe agreed to withdraw their request to address the boundary issue, contingent upon a commitment that we would resolve the issue at a later date. Mr. President, I want to follow through on that commitment now. The ``southern boundary issue'' refers to a block of land which consists of 8,000 acres in a very irregular shape. Because of the remoteness and the configuration of the tract of land, it is almost impossible to properly manage and as a result, there have been several instances of poaching and trespassing. This legislation seeks to create a much clearer and more definitive boundary. The lands would be held in trust by the Federal Government for the benefit of the Goshute Tribe, which with the help of the BIA will be able to regulate grazing and other uses in the area. The Tribe has agreed to be responsible for the cost of appraisal of the additional lands in the bill. This is quite a commitment, given the limited resources of the Tribe. I appreciate their willingness to assume such a commitment. The legislation is supported by the State of Utah, Juab County, and the Board of Trustees of the School and Institutional Trust Lands Administration. From what I understand, the Department of Interior does not oppose the bill. Perhaps most surprisingly, the Utah Wilderness Coalition does not oppose it either. The Goshute Tribe has met at length with representatives from this very vocal group and have obtained their support. Mr. President, I hope my colleagues will support me in this effort to assist the Goshute Tribe in creating a more manageable border to their reservation.

Mr. BENNETT

Mr. BENNETT. I say to the Senator, the Government----

Mr. BENNETT. That is correct. The Senator is exactly right. He is describing the way health care works in this country.

Mr. BENNETT. That is correct.

Mr. BENNETT. That is correct.

Mr. BENNETT. Mr. President, I was listening to the presentation of the Senator from West Virginia and felt I had to respond in some particulars. I appreciate the Presiding Officer giving me relief from the chair so that I might do this. I hear the Senator from West Virginia use the statement that we have heard many times on the floor, that the purpose of the Republican number for Medicare is to pay for tax cuts for the wealthy. I say once again, if these tax cuts are going to benefit the wealthy, the wealthy have to have awfully big families because the tax cut is limited to $500 per child and I do not know anybody who is really wealthy who is going to make any money off of this at $500 per child. The people who need this are the people who have low incomes and big families. Those are the people in my State who are getting a little tired of the rhetoric that this is a tax cut for the wealthy. I have heard the statement made on the floor that this is going to mean $10,000 in tax cuts to some people. They have to have an awful lot of kids to get $10,000 at $500 per child. Second, ``slash and burn'' is a phrase that was used, on the amount of money to be spent on Medicare; the incredible cuts. I was a Member of this body when the Senator from West Virginia cosponsored the Clinton health care plan. In the Clinton health care plan, as explained in hearings before the Congress by Mrs. Clinton, the growth of Medicare spending was to be slowed. Mrs. Clinton made the very specific point, and some of us have seen that on videotape as it has been replayed, that we are not cutting Medicare, she said, we are simply slowing its growth so that we can pay for all the things we need to do in health care. The bill that is before us slows the growth of Medicare less than the amount proposed by Mrs. Clinton in the bill that she proposed, and which the Senator from West Virginia cosponsored. I do not consider that it was slashing and burning Medicare when Mrs. Clinton proposed it, and I do not think it is slashing and burning Medicare now. I hope we will stay with the numbers as they really are. We are proposing increasing spending on Medicare, and the Republicans are proposing increasing spending on Medicare at a higher rate than Mrs. Clinton proposed, and that was in the bill that the Senator from West Virginia cosponsored. Mr. President, the Senator from West Virginia has talked about the repeated actions of the Finance Committee in dealing with short-term solvency problems. An analogy sprang to my mind. We have watched the Government of the District of Columbia give us repeated short-term solutions to their short-term solvency problems, and the long-term solvency problem has gotten continually worse until finally the District of Columbia is facing the crisis that it is. I am not proud--I did not participate, so I was not involved--but I am not proud of the actions of the Finance Committee over the years in the way they have solved the short-term solvency problem. I am not proud of administrations that I would call my administration--that is the Bush administration--in the way it has addressed the short-term solvency problem, because all they have done repeatedly is postpone the day of reckoning, and to say, ``Well, we've been able to do it on a bipartisan basis.'' All right, shame on both parties. But what happens again and again when you are faced with the short-term solvency problem in Medicare is, say we are going to reduce the amount we will reimburse to the doctors and we will make those greedy doctors and hospitals pay by putting a lid on the amount they can charge. There is another word for that, Mr. President. It is called wage and price controls. We have been trying to solve our inflation problems in this country with wage and price controls perhaps from the beginning of time. They have never worked in any other arena, and they have not worked in Medicare. Every time the Finance Committee or the administration puts wage and price controls on Medicare payments, the people who are faced with those wage and price controls find ways around them. Then the costs start going up again, so we have to have another short-term fix with wage and price controls. The only solution is to forget the pattern of the past and make systemic changes in Medicare, and my party has had the courage to attempt that. The party of the Senator from West Virginia has said, ``No, we will not attempt systemic changes in Medicare. Let's have a commission.'' I would be happy to serve on such a commission and endorse such a commission if the charge of that commission was to say that we are not going to do what we have historically done because it is what we have historically done that has brought us to the point we are today. We have to face the fact that Medicare is a wonderful 1960's program frozen in time by virtue of its having been made a Government monopoly. We have to break the monopoly, open this thing up to free market forces, recognize that wage and price controls do not work, and start with a clean sheet of paper. If we had that kind of circumstance, I would be happy to do whatever is necessary to cooperate with the Senator from West Virginia in a bipartisan fashion. But more of the same, a repeat of what we have done in the years that have gotten us to this, is not the kind of call we need to deal with Medicare. Mr. President, I recognize that I have opened a can of worms or a hornet's nest here, and I should return to the chair, but if the President will grant me the indulgence, I recognize that the Senator from West Virginia is now on his feet and wants to defend himself, and I congratulate him for that. If I may be allowed to stay here and defend myself and we have this debate, I think it will be a worthwhile circumstance. With that, Mr. President, I yield the floor, in anticipation of hearing a rebuttal from my friend from West Virginia.

Mr. BENNETT

Mr. BENNETT. Mr. President, I am introducing a bill to amend the 1993 Utah School and Lands Improvement Act, Public Law 103-93. The purpose of this legislation is to correct boundary problems on the Goshute Indian Reservation in Utah. The Goshute Tribe is a federally recognized tribe whose reservation is located on the western border of Utah. Approximately one-half of the Goshute Reservation is in Utah, the other half is in Nevada. This legislation would transfer about 8,000 acres of state land to the Tribe along with about 400 acres of public land administered by the BLM. The public law to be amended by this bill was enacted without opposition in 1993. This law transferred approximately 200,000 acres of Utah state lands to the federal government with the understanding that the federal government would compensate the state in an amount equal to the appraised value of the transferred land. When the law was passed, it was done so with the understanding that state lands located within the reservation boundaries of both the Navajo and Goshute Tribes would be transferred to the United States to be held in trust for the respective tribes. At that time, the Goshute tribe requested that the Utah delegation address a boundary issue on the reservation. After some initial negotiation, the Tribe agreed to withdraw their request to address the boundary issue, contingent upon a commitment that we would resolve the issue at a later date. Mr. President, I want to follow through on that commitment now. The ``southern boundary issue'' refers to a block of land which consists of 8,000 acres in a very irregular shape. Because of the remoteness and the configuration of the tract of land, it is almost impossible to properly manage and as a result, there have been several instances of poaching and trespassing. This legislation seeks to create a much clearer and more definitive boundary. The lands would be held in trust by the Federal Government for the benefit of the Goshute Tribe, which with the help of the BIA will be able to regulate grazing and other uses in the area. The Tribe has agreed to be responsible for the cost of appraisal of the additional lands in the bill. This is quite a commitment, given the limited resources of the Tribe. I appreciate their willingness to assume such a commitment. The legislation is supported by the State of Utah, Juab County, and the Board of Trustees of the School and Institutional Trust Lands Administration. From what I understand, the Department of Interior does not oppose the bill. Perhaps most surprisingly, the Utah Wilderness Coalition does not oppose it either. The Goshute Tribe has met at length with representatives from this very vocal group and have obtained their support. Mr. President, I hope my colleagues will support me in this effort to assist the Goshute Tribe in creating a more manageable border to their reservation.