Bill Bradley

Mr. BRADLEY

Mr. BRADLEY. Mr. President, I find it ironic that the Senator from Pennsylvania is aggressively defending all the special interest provisions in the Tax Code, while at the same time he is for a flat tax. How can the Senator be for a flat tax and want to eliminate all the special interest tax provisions. I yield 5 minutes to the distinguished Senator from Louisiana.

Mr. BRADLEY. Will the Senator yield?

Mr. BRADLEY. Mr. President, how much time is remaining on my time?

Mr. BRADLEY. Mr. President, I yield 7 minutes to the distinguished Senator from Nevada.

Mr. BRADLEY. Mr. President, how much time remains?

Mr. BRADLEY. I ask the distinguished Senator from Oklahoma, is it his intention to offer the amendment at the conclusion of all time on this amendment?

Mr. BRADLEY. At which point there would be, under the rules, an hour of debate on the second-degree amendment; is that correct?

Mr. BRADLEY. It does pertain to the earned income tax credit?

Mr. BRADLEY. Mr. President, other speakers will be able to speak in that half hour. I would simply like to make a few points in the remaining minutes we have before this amendment will come to the point of second degree. First, the argument that we are having is that there is an explosion in this program, that this program has exploded, says the opponent of this [[Page S7151]] amendment. Do you know why it has exploded? It has exploded because in 1975, if you earned over $8,000, you could not get this benefit. You could not get any tax relief from this. Now you can earn up to $28,000. There are millions more Americans that are now eligible for this tax cut. There are millions of Americans eligible for the tax cut. And, indeed, we have broadened it, as the distinguished Senator from Oklahoma has pointed out, from a few hundred dollars in the mid-1980's to $2,500 today, heading up to $3,000. So it is a bigger tax cut. So lo and behold, a ray of insight, a stroke of wisdom; if you give a bigger tax cut to more people, it will cost more money. That is the explosion that the Senator is talking about. I thought giving tax cuts was a good idea. That is all we have heard from the other side. We want a tax cut, a tax cut, a tax cut. Here is a tax cut. But no. For families earning under $28,000 a year, we want a tax increase. Oh no, no, no, they say. They do not pay any income tax. Just for the record, 48 percent of the people who receive the earned income credit with children pay income tax; just for the record, the facts. But that is not the point. The point is the earned income credit is meant to offset not only income tax but other taxes, such as Social Security tax, and also the loss of certain benefits as you earn more money so that you are not pushed farther down the ladder. So the fact of the matter is that this is a significant tax cut. It offsets not only income tax, if you pay income tax, and 48 percent of the families with children who are eligible for this do, but it offsets the Social Security tax. That is the cruelest tax on families, and it offsets the loss of certain benefits as you earn more income going up the scale. So there is no dispute that under the proposal before us on the other side, that families earning under $28,000 a year will pay more in taxes. They will pay more on the Social Security taxes that they do not have offset with this, or they will pay more in income taxes. Let us make a point about the Senator's data. ``Oh, what a terrible error rate; oh, what a terrible fraud, a waste.'' Of course, all of his numbers are from 1988. Well, a few things have happened since 1988 that tightened this program up. In fact, many things have happened since 1988. For example, we repealed the supplemental credit for health insurance. We repealed the supplemental credit for children under the age of 1. We denied it to nonresident aliens. We denied it to anybody who is a prisoner. We required a taxpayer identification number. The Department of Defense is required to report both the IRS and the military personnel nontaxable earned income credit paid. We also said if you have investment income over $2,500 you do not get it. We said that now you have to have a Social Security number provided for children, as well as adults, and on and on. We have made major steps to correct this. This is not the time to increase taxes on working families. I am really surprised that that is the position, inconsistent as it is with the espousal of the other insight.

Mr. BRADLEY. Will the Senator yield?

Mr. BRADLEY. I do not dispute the numbers, but to argue that this is not a tax increase is a little bit like arguing that when Ronald Reagan wanted to phase in tax cuts over 3 years, if we did not phase in the third 10 percent of the tax cut, that would not have resulted in higher taxes.

Mr. BRADLEY. The question is, does the Senator dispute that under the proposal offered in the budget resolution working families will pay more in taxes? Does he deny that working Americans would end up paying more income tax or have less relief for Social Security taxes than under the amendment that is offered by the Senator from New Jersey?

Mr. BRADLEY. Will the Senator yield on that point?

Mr. BRADLEY. You do something else. You mean to equal the amount of revenues that the Finance Committee will be asked to raise under this proposal. You mean to raise other kinds of taxes as opposed to raise taxes on these working people. That is what you mean. So, by the Senator's own admission, this is a tax increase. It is a requirement of the Finance Committee to raise taxes.

Mr. BRADLEY. Will the Senator yield on that point?

Mr. BRADLEY. Will the Senator yield on that point?

Mr. BRADLEY. The Senator said one-third fraudulent. Could the Senator justify that? Could he give us some documentation that says one-third fraud?

Mr. BRADLEY

Mr. BRADLEY. The distinguished Senator from Oklahoma says this is not a tax cut that I am trying to save, but, instead, that this is a spending program. And he continually refers to AFDC. Then why are you telling the Finance Committee to raise an additional $20 billion? In effect, the budget resolution tells the Finance Committee to increase revenues by $20 billion--that is what this does, by $20 billion. Now, the Senator thinks he will do it by increasing taxes on families with under $28,000 in income. The Finance Committee might choose to do something else. But make no mistake, this results in increased taxes.

Mr. BRADLEY. Mr. President, how much time remains?

Mr. BRADLEY. I yield 3 minutes to the distinguished Senator from Connecticut.

Mr. BRADLEY. How much time remains?

Mr. BRADLEY. I yield myself 2 minutes. Mr. President, the earned income credit is called the earned income credit for a very specific reason. You do not get it unless you earn money. You do not get it as a gift. You get it because you work. You get it because you work and have earned money. You do not earn much money, but you do earn some money. And you also frequently are eligible for various benefits. As you earn more money, you lose those benefits. As you earn more money, you pay more Social Security. What the earned income tax credit is supposed to do is to give that working family that earns money some break for the Social Security and other taxes they pay and for the benefits that they lose as they earn more money. It is a very simple concept in terms of the Social Security tax. It could have the same impact as a tax credit against Social Security. But we do not have a credit against Social Security taxes. The earned income credit is essentially giving people who pay significant Social Security taxes some of that back. So it is clearly a reduction of an overall Federal tax burden, both income tax and Social Security tax. While people who are at $16,000 or $17,000 a year do not pay in a lot of income tax, they pay in over $2,000 in Social Security taxes. With the earned-income tax credit, because they work, they get a break for those Social Security taxes. They get a refund from the Government so they pay less Social Security tax, in reality.

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

Mr. BRADLEY

Mr. BRADLEY. Mr. President, due to an unfortunate miscommunication, my vote on the Harkin amendment to restore education funding, which was the second of two back-to-back amendments, was not recorded. There is no one in the Senate who is a stronger advocate for education programs than I am, and I am disappointed that this error occurred. If it had been recorded, my vote would have been ``yea.'' raise taxes on working families to pay for tax cuts benefiting the wealthy? That's the Republican plan

Mr. BRADLEY

Mr. BRADLEY. Mr. President, I come to the floor today to express my very serious concerns about the cuts to Medicare and Medicaid which are contained in the budget resolution. Mr. President, my colleagues across the aisle have stated repeatedly that they are not touching Social Security. But at the same time over a third of the cuts which they have proposed, including over 40 percent of the cuts in the year 2002, come from Medicare and Medicaid. Mr. President, I would like to spend a few minutes discussing what the proposed Medicare and Medicaid cuts will mean to our most vulnerable citizens. As I discuss these impacts, I would like my colleagues to ask themselves how they can credibly claim that this budget does not reduce these people's security. Let me start with Medicare. This budget cuts spending for the Medicare program by $256 billion over 7 years. I would like to spend a minute discussing what these numbers mean in human terms. They mean that seniors will have to find an average of $3,447 more to pay for their health care over the next 7 years. In my home State of New Jersey, seniors will have to come up with an additional $932 in the year 2002 alone just to pay for the additional Medicare costs which this budget imposes on them. For many seniors across the country, these new costs will be extremely difficult to bear. In 1992, the median income of seniors in this country was only about $17,000 a year, and about a quarter of elderly households had incomes under $10,000. Of these incomes, seniors already spend more than one of every five dollars on medical costs. For the millions of seniors across the country who live on fixed incomes, finding an additional $3,447 over 7 years will mean having to give up something else which is important to them. It is estimated that there are already nearly 8 million seniors nationwide who are forced to choose each month between paying for their medications and paying for food. I can't help wondering how many millions more seniors will be faced with this horrible choice once the proposed cuts go into place. An increased financial burden on seniors is only one of the negative consequences which will result from the proposed Medicare cuts. Along with having to pay more, seniors will likely find that their ability to choose their own doctor is restricted--perhaps not explicitly, but because financial limitations leave them with no choice but to join a managed care plan. Also, doctors, hospitals, and others providers are all likely to face reduced payments. They already receive far lower payments from Medicare than from private insurers, and if Medicare rates are reduced much further some may find that they can no longer afford to take Medicare patients. Those who do keep accepting Medicare will be forced to shift even more costs onto their privately insured patients, creating a hidden tax on employers and individuals. And that's just Medicare. In addition, this budget cuts Medicaid by $175 billion. That's an 18 percent cut, relative to what spending would be if there were no change in law. I think it is very important that we all understand exactly who these cuts will affect. Medicaid now insures about one of every four American children. It pays for roughly one of every three births in this country. And it pays for over three-fifths of the people who need long-term care services, either in nursing homes or at home. Over half of Medicaid funds go for persons who are either elderly, blind, or disabled. Most elderly recipients of Medicaid are people who spent their whole lives as members of the middleclass. But when faced with nursing home costs averaging almost $40,000 a year, it doesn't take long for their entire life savings to disappear. Once they reach this point, these people have nowhere else to turn. Thank goodness Medicaid has been there to provide a safety net for them. This resolution caps Federal Medicaid spending at an average annual growth rate of 5 percent. We all know that Medicaid spending is expected to grow much faster than that in the future. By setting a 5 percent cap, the Federal Government is essentially saying to the States: ``It's all your problem now. We can't figure out how to deal with the growing number of uninsured and the rising costs of health care, so you do it. We wash our hands of any responsibility to help you deal with these critical needs.'' But, if we are honest with ourselves, we must admit that States can't cope with these problems alone. So, Mr. President, let me tell you what is expected to happen once these proposed Medicaid cuts go into effect. By the year 2002, the number of uninsured children in American is predicted to rise by more than 6 million. By that same year, there will be an additional 3 million persons who need--but can not get assistance with--the costs of long-term care. These will be people who will be required to leave nursing homes, or will never be able to enter one, despite the fact that they need more care than their family and friends are able to provide, either financially or physically. As I stated earlier, many of these people are now members of the middle-class, but the astronomical costs of long-term care will impoverish them rapidly. For those persons who are able to enter and remain in nursing homes the picture is not much brighter. Medicaid now pays significantly less than the private sector for long-term care. When Medicaid cuts these payments even further--as it will have to do in response to the budget cuts--nursing homes will have to do even more with less. This means that staff will be stretched even thinner, and each resident will receive even less personal attention. The proposed cuts will mean that the quality of life of nursing home residents will deteriorate even further. Mr. President, I hope that my remarks have helped put a human face on all the numbers which have been floating around the floor of this chamber the last few days. I recognize that reducing the deficit will require painful choices. But in making these choices, we can not ignore how these decisions, will impact the persons whom we have been elected to represent. My colleagues across the aisle claim that they are concerned about the impact of deficit reduction on our oldest and most vulnerable citizens. They have stated repeatedly that Social Security is ``off the table'' -- that it has not been cut. To them I respond: Medicare and Medicaid are vital parts of our social security system. They provide security at a time when people are most vulnerable--when they are sick. To [[Page S7077]] take over a third of your proposed cuts out of Medicare and Medicaid is to deny security when it is most needed.