John Chafee

Mr. CHAFEE

Mr. CHAFEE. Mr. President, I ask unanimous consent for an additional minute.

Mr. CHAFEE. Mr. President, I have a very simple amendment. Some will say we have been over this ground before. I do not think that is quite accurate in that this is far narrower--

Mr. CHAFEE. Amendment No. 3840, and I ask unanimous consent that Senator Mack be added as a cosponsor.

Mr. CHAFEE. There are two points I would like to make. First, Mr. President, why in the world do we provide these benefits for illegal aliens if we do not think they are important for the national health and benefit of the Nation? I mean, we have decided as a nation that it is important that any woman have proper prenatal care because we want that baby that is born to be healthy, healthy when born, healthy throughout its life. So we do not argue, we do not say, ``You're here illegally. Go back to where you came from.'' We say, ``You're here illegally, and we're going to see that you get proper prenatal care. We're going to see you are immunized.'' That is one of the provisions we have made here. So, if it is that important that we are going to pay for that person, then it seems to me likewise for the person who is here legally-- without going through a lot of song and dance about the sponsorship or deeming or tracing that person down, making sure that sponsor pays for it--get it over with, give them the immunization. I say, Mr. President, that this is not something new I am bringing up here. In two of these categories, as you note on this sheet here, that the managers of the legislation in committee or on the floor, or someplace, have agreed to, is the fact that the legal alien should indeed get two of these benefits. What are they? Nutrition programs. We say the illegal alien is entitled to the nutrition programs. And we say the legal alien is likewise entitled. You do not have to go to your sponsor or get involved with this deeming business. You just get it. Nutrition programs. If a nutrition program is important, it seems to me an immunization program is just as important. So, Mr. President, to me this is not any budget buster. This is very narrow. This is not your entitlement for all of Medicaid. It is very, very limited. I hope, Mr. President, that the managers of the bill will accept the amendment. I want to thank the Chair. Mr. DOLE addressed the Chair.

Mr. CHAFEE

Mr. CHAFEE. I should like to say to the distinguished Senator that I encounter fellow Senators who say, ``I'm all for your plan except I don't like the tax cut,'' or, ``I am all for your plan except I don't like that change in the Consumer Price Index,'' or, ``That's an excellent plan, but the Medicare number isn't the one I like.'' Now, my question to the Senator from Louisiana is, What other vehicle is going to be presented that fixes these problems? If they do not accept our proposal, the proposal of the distinguished Senator from Louisiana and I and this wonderful group of bipartisan Senators working with us, if they do not like that, what else has a chance at being enacted that is going to balance this budget, not only at the end of the seventh year but in the outyears as well?

Mr. CHAFEE. Mr. President, first, I want to thank each of the speakers who took the trouble to come here today in support of this effort that Senator Breaux and I have the privilege of leading. Second, I would like to say that what this is all about is future generations. Unless we do something about these entitlements, this country of ours is going to be in great financial and economic peril. If we take these steps now that we have outlined, then there is a wonderful chance--it is not only a chance, it is a fact--that we can reverse the trends that are now underway in our two largest spending programs--Social Security and Medicare--as well as Medicaid and welfare. So this is it. It is easy to criticize, and people, as I mentioned earlier, will say, ``I'm all for it, except for the CPI,'' or ``I'm all for it, except for the Medicare number,'' or ``I don't like your tax figure.'' But nobody else has come forward with a program that has the support of Senators on both sides of the aisle, Democrats and Republicans. So this is it, and we hope that everybody, every single Senator in this body will carefully consider what we have come up with. We sincerely hope that they will join with us. We want more people. There are 22 of us who have worked together on this since October. But 22 is not enough, and it is not enough for Senators to say, ``Well, that's pretty good. We'll see what else is going to come along.'' Nothing else is going to come along that we know of. We have been involved with this for some time. So we do seek support from our fellow Senators on both sides of the aisle. The beneficiaries will be our children and our grandchildren, and that is a pretty worthwhile goal. I thank the Chair and certainly thank my distinguished colleague, Senator Breaux, who has been terrific in the leadership he has given to this program right from the beginning.

Mr. CHAFEE. I thank the Senator from Colorado for those excellent remarks. I yield what time the Senator from Utah needs.

Mr. CHAFEE. Mr. President, I thank the Senator from Washington for those very generous remarks. I appreciate the kind words he said. Let me just say that we cannot go too far wrong if we are doing something right for the future generations of this Nation. It is absolutely clear that, if we continue on the present course, trying to fund these entitlements--Medicare, Medicaid, Social Security, welfare--without changes, it is clearly going to bankrupt the Nation. You see some projections that estimate an individual will have to pay 80 percent of his or her earnings to the Federal Government in order to sustain these programs in future years. They are clearly out of control. That is why we try to bring them under control. It is not just us predicting this. It is already happening, and ahead of schedule, as we see with the Medicare Program. The Senator from Colorado is here, the senior Senator from Colorado. I will be delighted to hear his comments.

Mr. CHAFEE. Mr. President, I agree with the Senator from Louisiana that this step is simply the right thing to do. All we are doing is saying, let the Consumer Price Index be accurately stated. That is what we have chosen to do here. Some have labeled that a very courageous step. We did not look on it that way. We think of it as the logical step to take to state the CPI more accurately. Likewise, there is, as the Senator from Louisiana so aptly stated, a tremendous benefit to doing that. Otherwise, unless we do it, the Social Security system is going to go under water. I see the Senator from Washington here, and I am glad to hear his comments.

Mr. CHAFEE. But we chose not to do that, as the Senator recalls.

Mr. CHAFEE. I think the answer to this is that people really do not want to get into trying to solve these dramatic problems that are out there in connection with the entitlements. The word ``entitlement'' is one we toss around here, but what are entitlements? Entitlements are, principally, Social Security. But they are also Medicare, Medicaid, and welfare. We believe--and it is not just us but every serious student of the deficit of this Nation and the direction we are going has said so-- it is essential to get the expenditures in these entitlement programs under control or there just plain will not be money to pay for them in the future years. So when we began looking into this in the Finance Committee, as the Senator from Louisiana indicated, Chairman Alan Greenspan of the Federal Reserve came and testified before us and he said you should look into the Consumer Price Index, and whether it is accurately stated? It was his view, which was corroborated by further studies, that the Consumer Price Index is overstated and the Consumer Price Index is the basis on which the cost of living adjustments are computed for Social Security, for pensions, indeed, for the Tax Code. So we looked into this further. As the Senator said, we set up a commission to look into what is the accurate Consumer Price Index. As the Senator said, the preliminary report has come back saying that as currently computed it is overstated somewhere between, on the low side 0.7 percent, on the high side 2 percent. So we looked at that, here is 2 percent way up here, 0.7 percent here. We said we will not go as high as either of those figures. We will only make an adjustment of 0.5 percent, from the Consumer Price Index. Actually, we would make really tremendous savings if we, for example, took the 2 percent.

Mr. CHAFEE. That is the point that I would like to get across to our listeners and viewers--that it is easy to be critical. It is easy to say, ``oh, no. Do not fool with that CPI, that Consumer Price Index, and the Medicare figure is too high. We do not like what you have done on welfare. The Republican Governors do not like what you have done totally on welfare an area that has been mentioned before briefly. We make some savings out of Medicare, or actually what we do is we reduce the rate of growth over the next 7 years. Medicare, unless something is done, is truly going to go broke. People say, ``Oh, we have heard you people say that around here on this floor before.'' All right, let us just look and see what has happened. We have two recent reports. The New York Times reported last Tuesday that the Medicare hospital insurance trust fund--which is the fund that pays the hospital bills for the elderly--operated at a loss for the first 6 months of this current fiscal year. It fell short, the outflow as compared to the income, fell $4 billion short in that brief time. So once upon a time we were bringing in more revenue than we were expending and we built up a surplus. Now the lines on the graph have crossed and the expenditures are exceeding the income. That is not going to change unless we do some things. Yesterday's Washington Post reported the Congressional Budget Office now believes the Medicare trust fund will become insolvent in the year 2001. When we started on this exercise just a few months ago we thought it was going to go insolvent in 2002, so in just a few months we have seen the fiscal situation of the trust fund deteriorate by a year. So, unless something is done in this Medicare Program, along the lines that we have suggested, the Medicare trust fund, which pays the hospital costs of the elderly in this Nation, is going to go broke. That is something we ought to take very, very seriously. I read a comment the other day in the newspaper where somebody said, ``Oh, don't believe that. We are going to take care of it.'' It is not easy to take care of some of these situations once the downward spiral starts and the expenses exceed the income. Once that starts there is really serious trouble ahead. I would like to now touch briefly on the Consumer Price Index. The Consumer Price Index has clearly been overstated. What we do, as the Senator from Louisiana pointed out, in our group, we say let us state the Consumer Price Index accurately. So that is what we have done. That results, fortunately, in dramatic savings, not just over this 7-year period, but for the outyears as well. So, a key part of our proposal here is the recognition of the fact that the Consumer Price Index is overstated. We hope our fellow Senators, paying attention, listening and studying this situation, will come to the conclusion that we have, that it is essential to state the Consumer Price Index in an accurate form. That results, as I mentioned, in our calculations, of a $110 billion savings over the 7-year period with dramatic savings in the outyears, and which will mean, as the Senator from Louisiana briefly said, that Social Security and Medicare will be here in the future years. Mr. BREAUX addressed the Chair.

Mr. CHAFEE. So when those others say do it this way or do it that way, there is no other train leaving the station that I am aware of that is going to reach the terminal point successfully. In other words, the President has indicated that, and the Democratic leadership has indicated that they do not want high tax cuts. Am I correct in that?

Mr. CHAFEE. Mr. President, I thank the senior Senator from Pennsylvania for his kind remarks and for the wonderful work and help which he has given us on this. I would like to turn back, if I might, to the Senator from Louisiana because both of us have encountered, as I have previously mentioned, objections to specifics here. But this is not exactly unknown territory. Let me suggest to the Senator from Louisiana that a bill went through this body which had high tax cuts. It did not have the corrections to it in the CPI. And that bill, as I recall, did not get enacted into law. In other words, one approach was tried which many people here say, ``Oh, we need more taxes. We do not like this. You only have $130 billion in taxes. You ought to have $245 billion.'' OK. We tried that. Am I correct in saying that?

Mr. CHAFEE. Mr. President, first I would like to thank the Senator from Vermont for his effective comments. I notice the senior Senator from Pennsylvania is here. I would be glad to hear his views on this subject. Mr. SPECTER addressed the Chair.

Mr. CHAFEE. The distinguished Senator from Vermont is here and has some comments on this, and I know he has duties presiding in a few minutes, so I would like to yield whatever time he wishes.

Mr. CHAFEE. Mr. President, I want to ask the Senator from Louisiana a couple of questions, if I might, on my time.

Mr. CHAFEE

Mr. CHAFEE. I thank the Chair. (The foregoing tally has been changed to reflect the above order.) Criminal Alien Tracking Center

Mr. CHAFEE. Mr. President, on vote 94, the Kennedy amendments Nos. 3820 and 3823 en bloc, I voted ``nay,'' and I would ask unanimous consent that I might be recorded as ``yea.'' That will not affect the outcome of the vote.

Mr. CHAFEE. I wonder, Mr. President, if I might have a brief intervention here.

Mr. CHAFEE

Mr. CHAFEE. Mr. President, today there will be a period for morning business until the hour of 10 a.m. Immediately following morning business, the Senate will resume consideration of S. 1664, the immigration bill, and the pending Graham amendment. Additional amendments are expected to be offered during today's session. Therefore, Senators can expect rollcall votes throughout the day, possibly prior to 12:30. A cloture motion was filed to the immigration bill last night, and in accordance with rule XXII, Senators have until 12:30 today to file first-degree amendments to the bill. The Senate will recess between the hours of 12:30 and 2:15 for the weekly policy conferences to meet. I thank the Chair. I yield the floor.

Mr. CHAFEE

Mr. CHAFEE. Mr. President, I yield 4 minutes to the Senator from Vermont.

Mr. CHAFEE. Mr. President, I yield 3 minutes to the Senator from Kansas.

Mr. CHAFEE. Mr. President, 4 months ago Senator Breaux and I asked a small group of our colleagues to get together on a bipartisan basis to discuss how we might reenergize the stalled negotiations on a balanced budget. At that time neither the White House nor the congressional budget negotiators were making the compromises necessary to reach a final balanced budget agreement. You may recall, Mr. President, at that time there could not even be agreement on what economic assumptions were to be used as the starting point. In advancing our efforts, Senator Breaux and I hoped to demonstrate to the Republican congressional leadership and to the White House, the administration, that a group of Senators--Democrats and Republicans, from the middle of the political spectrum--were willing to set aside partisanship to reach a balanced budget agreement. We strongly believe that the single most important action that this Congress can take for the benefit of our Nation is balancing the budget. The members of our group come to this effort with a wide range of perspectives on how we ought to solve the budgetary problems. Each of us, if left to our own devices, might come up with a different balanced budget agreement than the one we arrived at. But nonetheless, all of us made concessions and compromises in order to forge our plan. This chart shows the problem that faces the Nation. And by the way, these figures come from the Congressional Budget Office. That is the official group that provides budget projections to this body. These are not the administration's figures, they come from our own budget office. Here is the deficit today, somewhere around $140 billion. Left unchecked, it will increase each and every year, until in the year 2006, which is only 10 years from now, Mr. President, it is projected to exceed $400 billion. Those are the bills that we are sending to our children because we refuse to take the steps that are necessary to balance this budget. Senator Breaux and I and our group of some 22 Senators, 11 Republicans and 11 Democrats, have come up with a proposal, and this chart compares the different plans. The first column is the Chafee- Breaux plan. The second is what the leadership of the Republican Party has presented. The third is what the administration has presented. It is a fairly busy chart so I will not go into all the details, but I will point out one distinct feature in our approach that is different from the others' approach, and that is discretionary spending. What is discretionary spending? Discretionary spending is all the normal things that occur in the budget--defense, libraries, the FBI, highways, the payment for the State Department and our Ambassadors around the world, all of those normal things. You will see that we believe we can save out of this category $268 billion over the next 7 years. How do we do that? We do that by some very, very tough measures. We say that the spending in discretionary will be frozen for the next 7 years, without any increases for inflation. That is tough medicine, and we think that is as far as we can go, and it is unrealistic to suggest that savings can be achieved above and beyond this level. But here you will see the administration and, indeed, the Republican proposals go way beyond that. We consider that totally unrealistic, and that when the appropriations bills come up in 1998 and 2000 and 2002, Congress will not make those cuts and we will not realize these savings. The point I am making here is the Chafee-Breaux plan is a realistic proposal, whereas the other budgets in this particular area are totally unrealistic. So how do we make up the money? Others save, as we see in the Republican proposal, nearly $100 billion more than we do. And we do it with an item that you will see at the bottom of this chart called the Consumer Price Index. What is the Consumer Price Index? The Consumer Price Index is used as an estimate of what inflation is for the year. And the Consumer Price Index, according to studies that have been made, overstates inflation. In other words, the estimate of the inflation for the year is too high. It is not accurate. And we recognize that. So we make a modest correction in the Consumer Price Index as follows: We lower the Consumer Price Index by five-tenths of 1 percent in the first 2 years and by three-tenths of 1 percent in every year thereafter. Indeed, the Advisory Committee to Study the Consumer Price Index, which was established by the Finance Committee to study this issue, has said that the Consumer Price Index is overstated by as much as 2 percentage points. The Commission's range of overstatement is between seven-tenths of 1 percent and 2 percent. So we take a more conservative approach. We do not go as far as they do. We are not as tough, if you would. We say we will only reduce it by 0.5 in the first 2 years and 0.3 thereafter. That is a very, very important step, because when you deal with the inflation index and take the steps that we have taken in the Consumer Price Index by reducing it by a very modest amount, that yields tremendous savings in the outyears. So this is not a budget that we presented that only just squeaks into balance in the year 2002 and then the lid comes off in future years; not at all. This is a budget that is going to produce these savings in future years as well, and the country will thus be in balance, not only in the year 2002, but 2003, 2004, and the outyears as well. Some of these steps are tough steps. The only way these savings can be achieved, particularly in the Consumer Price Index, is through a bipartisan effort. We feel very, very strongly that now is the time. Now is the time for the Senate to set the pace, to set the standards and to adopt a budget that will achieve balance. Others will be talking on particular features of our plan as we go along, but I want to take this opportunity to thank every Senator, all 22 Senators who participated in this effort. Each of them showed his or her commitment to solving this problem. We are driven by the fact we do not want to continue to send bills for expenditures we are making to our children and our grandchildren. In particular, I thank Senator John Breaux, who has been tremendous in his dedication to this effort. Without his participation and his leadership, this would have failed a long time ago. So, for his unswerving dedication and invaluable leadership, I thank him. He deserves a tremendous amount of credit. Mr. President, there will be other speakers. Mr. BREAUX addressed the Chair.

Mr. CHAFEE

Mr. CHAFEE. Mr. President, I believe that Senator Breaux and I have an hour of morning business starting now.