J. Exon

Mr. EXON

Mr. EXON. Oh, we are going to keep the Senate open?

Mr. EXON. I have not been advised, but I see the Senator from Wisconsin seeking recognition. Can he tell us about how much time he would like to have?

Mr. EXON. Is that the plan, to go on that at 9:30 in the morning?

Mr. EXON. Mr. President, more than a third of the savings from a CPI adjustment suggested here would come from families with annual incomes under $30,000 per year. Ratchet it up just a little bit and 56 percent of the burden falls on families with incomes under $50,000 per year. This proposed change in the CPI will hit most middle and lower income American families. I suggest, for this reason, this is not shared sacrifice, at least in this Senator's book. As I previously mentioned, the proposed change in the CPI exacts too much from another group of our citizens, the retirees. Under the Breaux-Chafee budget, two-thirds of the savings come from retirees regardless of income. Let us not forget that Social Security contributes 90 percent or more of the income for about a third of our beneficiaries. It is also the major source of income for two-thirds of all of our beneficiaries. When we come up with these easy charts that show how simple and really ``no hurt'' this proposition is, I think we need to look at where it is coming from and who is taking the hit. In addition, the very oldest American would be hit the hardest. COLA reductions accumulate, so that the biggest reductions are experienced by the retirees at the very end of their lives. It is simply not right to take the bread off the table of an elderly citizen--in many cases, a widow who is really now counting every penny. Yes, that is hard for many of us to believe, but that is going on today with many of our citizens who are certainly not well off.

Mr. EXON. I will yield at the end of my remarks, and I will be happy to do it at that time. It is not right and it is something that I cannot do. That does not mean there cannot be changes in COLA's. During the Senate Budget Committee markup of the budget resolution, I supported Senator Brown's amendment to cap COLA's for upper income Federal and military retirees within the context of means testing. Some adjustments to cost of living may very well be warranted, but I cannot support a broad CPI adjustment that does nothing to protect the very neediest. I also point my colleagues to the fact that those areas where a firm scientific consensus exists about CPI bias have already been incorporated into the budget baselines both of the Office of Management and Budget and the Congressional Budget Office. So the changes that have been suggested by the bureau are already in place. It is being suggested here that we add 0.5, a half of 1 percent, on top of that. That is where I think we should take a look, take a listen and have more talk. Beyond these areas, there is wide disagreement on many subjects. I, for one, do not believe that we should hazard the livelihoods of the elderly or the working families on such speculation to reach a balance. Let us let the professionals at the Bureau of Labor Statistics improve the CPI based on sound logic and not political necessity. Indeed, research done at the Bureau of Labor Statistics, which produces the CPI, suggests that the elderly's cost of living may increase faster than the CPI because they, the elderly, spend far more for out-of-pocket medical expenses than do consumers generally. Back to the situation in another way that I mentioned earlier, when you spend every dollar you receive, these kinds of changes must be looked at very carefully to make sure they are fair. Mr. President, I ask unanimous consent that a copy of the research paper to which I referred just a moment ago be printed in the Record at the conclusion of my remarks. That is entitled ``Experimental price index for elderly consumers.''

Mr. EXON. Another thing, it seems to me we should realize and recognize it is one thing to ask Social Security beneficiaries to contribute more as a part of a general reform of the Social Security system, but it is another thing, another thing altogether, to get savings out of Social Security to help make room for maybe a tax cut.

Mr. EXON. Mr. President, it seems to me, if I heard the leader of the committee correctly, that he has essentially all but endorsed the bipartisan commission with the one exception of Social Security. And if we are that close maybe--just maybe--we can solve the problem. But I would remind all that when we get that close there is going to have to be some give and take on both sides in a compromise. So, Mr. President, I want to salute my friends, Senator Chafee from Rhode Island, Senator Breaux from Louisiana, and all of their associates for their stamina in their efforts to find a middle ground in this very, very important debate. Yet, I must say that, while I think this has been extremely helpful, I suggest that they keep on searching. But since I am convinced that they are searching in the crunch of numbers much closer to the President's budget than the Republican budget, there is no question in my mind that they can be helpful in reaching a workable compromise that I have not heard anybody object to tonight. I think everybody is saying we are closer than some people think. But I suggest that they keep working, and I will outline some of the--only three--key points that I have some concern about, and I suggest that the President might have some concerns about. That does not mean that we do not want to talk. That does not mean that we are saying the Republican budget is impossible to work with. That does not mean to say that we do not think that the coalition budget is a sincere effort because obviously it is. So there is much merit to the Breaux-Chafee budget et al. There are many savings that I would simply emphasize once again are very close to those contained in proposals that I have made and, indeed, close to the numbers in the President's budget. But there are three areas--three glaring problems--that I see that I want to comment on that force me to say we have to do better. That does not mean that we are not willing to compromise. That does not mean we are not willing to talk. The chairman of the committee said that he hoped maybe that as a result of these discussions the President would call us down to the White House in the morning. Well, the President has had an invitation out for us to come down to the White House every day on the hour, it seems to me, in the past several weeks, and he has been frustrated, I am sure, with the fact that the Republicans will not come down. In fact, the chairman of the Budget Committee on the Republican majority on the House as much as said that there is no reason to go down there because we are so far apart. But I see that there are problems in three areas which I want to discuss for just a little bit to show that, while we are close, everything is not hunky-dory. We can stand out on the floor of the Senate and pat each other on the back, but I, for one, am saying there are still some problems. They are not insurmountable, but there are problems. The first problem that I have is the change in the Consumer Price Index; second, the cuts and the change in the direction of the Medicare Program; and third, the tax cuts. Nonetheless, this proposal is far superior, in my view, than the one offered out of the Budget Committee. The proposed adjustment in CPI, I simply say, is no small matter, and it should be fully understood. It amounts to $126 billion. The numbers speak for themselves. Mr. President, it would be very difficult, if not impossible, to scrap the CPI adjustments and not bring down the entire Breaux-Chafee budget. I believe that was discussed in some detail in the negotiations that were held between the chairman of the committee and the Breaux- Chafee group. Therefore, the CPI and the amount of the CPI is absolutely essential to make the Breaux-Chafee budget work unless-- unless--the Breaux-Chafee group is willing to forgo most of their big tax cut. I oppose the change in CPI for the reason that it asks the most from those who have the least. A change in the CPI will not affect the lifestyles of Senators or the wealthiest Americans, but it could deliver a devastating blow to seniors and the disabled who depend solely on Social Security and supplemental security income, commonly known as SSI, or those low-income families who get little relief from the earned income tax credit. More than 40 percent of the dollars the proposal raises comes from a reduction in projected Social Security benefits. That is plain and that is simple. Mr. President, when one says ``adjust the Consumer Price Index,'' it almost sounds reasonable. Everyone is in favor of an accurate CPI. But let us call this proposal for what it really is--a proposal to cut cost-of-living adjustments by half a percent no matter what the accurate CPI would be. What that means is that benefits will be cut below projected levels for Social Security, for earned income tax credit and supplemental Social Security income, for veterans' compensation and pensions for the elderly. Is that where we as a government should be looking first for deficit reduction? I suggest not. Over the next 10 years, a half-percent COLA change means $110 billion in less Social Security benefits, $16 billion less in EITC, earned-income tax credits, $11 billion less in SSI benefits, and $5 billion less in veterans' compensation and veterans' pensions. Let me take a moment to talk about the chart that has been moved over here behind me now. It is a very interesting chart, and it tends to show the minimal differences. While they appear minimal, I suggest, to people with the income of those of us in the Senate, it purports to show how little one-half a percent Consumer Price Index change would actually cost the beneficiaries, if you do the arithmetic, Mr. President, and you add up all the cuts that are suggested on that chart, they come up to $1,200 per beneficiary, which is real money, which is real money for people on Social Security. I am not saying that we are not willing to talk about this, but to minimize how small this is should be put in the context of the lowest income Americans as far as the fairness test is concerned. And, oh, by the way, there is something that has not been mentioned that we should look into. It seems to me, if we were to proceed along this basis, it also means about a $106 billion tax increase over the same period because it would bring back bracket creep that we thought we had eliminated. Mr. President, I have a table which shows the current estimates of the Congressional Budget Office as to where these savings would come. I ask unanimous consent that this table be printed in the Record.

Mr. EXON. I yield myself additional time off the resolution that is held in my name.

Mr. EXON. Mr. President, I thank my friend and colleague from New Mexico. Mr. President, to rephrase the statement that the chairman of the committee just indicated, he yielded me 15 minutes in opposition. Well, it puts it in a negative term that I did not want to put it in. But I am going to outline some of the concerns that I have here. But I agree that this has been a very informative discussion tonight and it will be informative tomorrow. I want to join in the general tenor of what I have heard here on the floor tonight. I would like to have one of those charts, if you could leave them here for me. I was going to say, Mr. President, that most of the Members of the coalition group--at least on the Democratic side--have been Senators that I have been intimately involved with on fiscal matters ever since I have been in the U.S. Senate. I agree with Chairman Domenici that possibly out of these discussions tonight and the general tenor of the responses on each side lead me to also agree that we can have a breakthrough. I would simply say that I happen to feel that the President of the United States has been trying very, very hard to have a breakthrough. Maybe we are sowing the seeds of that accomplishment tonight. I will be consulting with the minority leader tomorrow on this. And in the next few days, if we can just separate our differences for what they are-- firm differences of opinion--and maybe come to the realization that, indeed, we are closer perhaps than we think, just let me note for the Record that, I think, further substantiates this. And in conversations that I have had with members of the 22-member coalition, just let me note that for the record the Chafee-Breaux budget is closer to the President's budget than to the Republican budget in all key areas. I ask unanimous consent that a table demonstrating this be printed in the Record.

Mr. EXON. I would be willing to consider changes to the COLA's, if they would be used as part of a Social Security overall reform package which we all know we are going to have to face. But I suggest we should not foreclose that next option and use it in the context that it is being advanced in this area at this time. Mr. President, I believe, and I hope others will believe, we will need a whole lot of savings to address the needs of the baby boom generation in the next century, especially with regard to Social Security and Medicare. I believe we would be better served if we reserved any savings from Social Security for legislation that will address that problem so that we can ensure that the burden is going to be shared fairly and equitably. In short, I am for honest changes in the cost-of-living adjustment. I am not for cuts in COLA's that are not a part of a major overhaul of the Social Security fund, which everyone agrees is not the case in the present legislation. Mr. President, I have concerns about the Breaux-Chafee centrist budget. And I also think there are some excellent things in there. I think it is unnecessary, though, to go after Medicare beneficiaries for the amount of savings that they have outlined. Once again, I will say in the spirit I started with, it seems to me the Breaux-Chafee group and the Democrats and the President are not far apart on those numbers. I think they can be worked out. Although it does shield those in the very lowest income brackets, vast numbers of Americans making less than $50,000 would see their share of the premium costs rise, as proposed, rise from 25 to 31 percent. The President's budget, I might say, maintains a 25-percent level and still ensures the solvency of the trust fund through the year 2005. Let us not forget, too, that Medicare beneficiaries already pay 21 percent of their income for health care expenses. We should not add to their burden now. In addition, by raising the eligibility age from 65 to 67 years of age--I am willing to look at that, but I want to look at both the upside and the downside. This amendment also denies Medicare benefits to a significant number of elderly Americans who have planned on that coverage in their retirement. Remember, most of the 65 and 66-year-olds are by no means affluent. As well, Mr. President, the tax cuts in the amendment are larger than those in the President's budget. Again I say--and it has been said by several Senators here on the floor--I wish we could put off all tax cuts of any kind until we are better assured that we will balance the budget by the year 2002. That is the way I would like to have it. But I think it is clear that there is such a drive for this, and there has been so much publicity about it that, notwithstanding the concerns of this Senator, it is obvious, realistically, that some tax cut will be included because the President is for it as well. In conclusion, I believe the amendment drafters need to keep working. They do not have to start all over again but I think they have to keep working with us. I simply say without the Breaux-Chafee group, or the Chafee-Breaux group, we probably would not have much of a chance to come up with a workable package. While I have some concerns about their proposal that I have outlined in an honest fashion tonight, I want to join with them in an effort to challenge and change and bring us around, and we can bring them around, maybe we can bring the Republicans around, to begin negotiations once again with the President at the White House. As we compare budgets, all of the budgets that are on the table, I still believe--even with its warts, and I think there are some warts in the President's budget, and I introduced and asked us to use that as the mark--I think the President's budget is the best standing alone of any that I have seen. Having said that, I realize and recognize and want to emphasize once again that the President wants to work together. He has met at the White House with the Chafee-Breaux group and he has told me that he was very much interested in their presence, their attitude, and what he interpreted as a very sincere effort to get something done. That is the bottom line. I say, let us keep working. But I, like the other Members of the Senate who have spoken on this tonight, feel this has been a very interesting, very challenging debate, and I am more optimistic than I was, when we started the debate on the budget resolution, of reaching some kind of compromise after the talks tonight than I was when we began this important exercise. I yield 5 minutes of my time to the Senator from Illinois. [From the Monthly Labor Review, May 1994] Exhibit 1 Experimental Price Index for Elderly Consumers (By Nathan Amble and Ken Stewart) (An experimental consumer price index for older Americans rose somewhat faster than each of two published BLS Consumer Price Indexes; as might be expected, expenditures for medical care accounted almost entirely for this difference) The Consumer Price Index (CPI) of the Bureau of Labor Statistics measures the average change in prices over time for a fixed market basket of goods and services for two population groups. The CPI for All Urban Consumers (CPI-U) represents the spending habits of about 80 percent of the population of the United States. The CPI for Urban Wage Earners and Clerical Workers (CPI-W) is a subset of the CPI-U and represents about 32 percent of the total U.S. population. The 1987 amendments to the Older Americans Act of 1965 directed the BLS to develop an experimental index for a third population of consumers: those 62 years of age and older. In its 1988 report to Congress, the BLS observed that from December 1982 to December 1987, the experimental consumer price index for older Americans rose slightly faster than the CPI-U and CPI-W.\1\ (See table 1.) --------------------------------------------------------------------------- \1\ Charles C. Mason, ``An Analysis of the Rates of Inflation Affecting Older Americans Based on an Experimental Reweighted Consumer Price Index,'' report presented to Congress, June 1988. During the period from December 1982 through December 1987, the CPI-U rose 18.2 percent, the CPI-W increased 16.5 percent, and the experimental index for older Americans grew 19.5 percent. Over the 11-year period from December 1982 through December 1993, the CPI-U rose 49.4 percent, the CPI-W increased 46.2 percent, and the experimental CPI for older Americans grew 53.8 percent.

Mr. EXON. That seems very reasonable to me.

Mr. EXON. You would use 3 hours tonight and 1 hour tomorrow?

Mr. EXON. From what I can gather, probably in the neighborhood of 6 o'clock.

Mr. EXON. How much time is allowed?

Mr. EXON. Mr. President, will the Senator yield me time?

Mr. EXON. You just lost your time.

Mr. EXON. Mr. President, I would first like to yield 4 minutes of the opposition time to the Senator from Illinois, who has been patiently waiting.

Mr. EXON. I will be glad to yield the Senator time, but I guess he has some over there.

Mr. EXON. Senator Simon wants to be recognized.

Mr. EXON. Or vice versa.

Mr. EXON. Mr. President, I yield myself what additional time off the bill that I may need. I want to drive home again how dire our circumstances are with the constraints of time. As I had announced earlier, we have 20 rollcall votes scheduled and more than 5 hours of voting time on Tuesday. If we start voting at 12 noon, we would be voting until 5 o'clock in the afternoon. In addition to that, we have an hour or two that will have to be taken out, obviously, for the memorial service for Admiral Boorda. In addition to that, we have the usual two caucuses, or conferences, of the two parties, which takes place at noon. I am also advised that sometime during the evening tomorrow, there is a dinner planned for Senator Simpson, one of our most distinguished Members, who is retiring from the Senate. So with that complicating factor, it makes good sense for Senators who can to now come to the floor and offer amendments. I see that, while I have been talking, my colleague from Texas has come to the floor, as I understand it, to offer an amendment. With that, I am pleased to yield the floor for the chance for the Senator from Texas to offer what I understand is an amendment.

Mr. EXON. It enhances debate.

Mr. EXON. Mr. President, I thank the Senator from Tennessee who made a very excellent case on a very difficult problem. I happen to feel that this amendment should be accepted unanimously, and it might be. If not, I hope when we have a rollcall vote that we would recognize and agree with the Senator from Tennessee who has a lot of experience in the particular field that he partially cited in his remarks. I would like to ask the Senator from Tennessee if I might be a cosponsor of the amendment.

Mr. EXON. Reserving the right to object.

Mr. EXON. Or weaknesses.