Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent to proceed for 10 minutes as in morning business.

Mr. GREGG

Mr. GREGG. Mr. President, I want to also speak on another subject which is of equal importance. It is of importance, however, to the next generation in a different way. It is of importance in the area of fiscal policy, and that is the question of Social Security. There is an atmosphere, of course, which has pervaded American politics, and especially politics in Washington, that discussing substantive reform to Social Security laws of our country is to commit political hari-kari; that any discussion of Social Security must be done in the most passive and benign way or else a person in public office will suffer great consequence. But we can no longer afford to take this head-in-the-sand approach to this absolutely critical and core issue of public policy. We know that the Social Security system is fundamentally broken and that it is headed toward an enormous bankruptcy. We know that if we take no action, purely as a function of demographics, we will see a collapse of the Social Security system in the early part of the next century, and with it probably a collapse of our Nation's finances, as we will simply be unable to bear the load of paying for the system. This is not a result of having a failed system for the last 40 years. We have had an extraordinary system for the last 40 or 50 years. It is a result simply of the fact that the Social Security system was not structured to deal with the generational demographics which we are headed toward. The post-war baby-boom generation is going to turn the tables of productivity upside down and the tables of who gets and who gives relative to the Social Security system. Today, approximately 3.1 people pay into the system for every 1 person who takes out. By the time the post-war baby-boom generation is fully taking down its share of Social Security, we will only have two people paying into the system for every one person taking out. That means that by the year 2020, the Social Security system will be running approximately a $216 billion deficit which will be escalating in a geometric progression. This deficit will essentially absorb all the discretionary dollars of the U.S. Government, and we simply will be unable to fund the operation of Government, beyond either paying for Social Security or choosing some other course. What will happen is, we will have to create a massive economic disruption to address the issue, probably a national inflation on the order of what happened in the German Weimar Republic after World War I. So this issue must be addressed. It is like that television ad for an oil filter that says, ``You can pay me now or pay me later.'' By paying now, by doing something now, we can alleviate the problem for the next generation or reduce it dramatically at a low cost, but if we wait until later, the cost to the next generation will be astronomical, and we will not have fulfilled our obligation as passers of the torch. So I have proposed a piece of legislation which addresses this issue. I recognize that stepping into this water maybe doesn't make political good sense, but I happen to believe that if we do not step into this water, or if somebody doesn't begin to step into this water, nothing will happen. So I put on the table a proposal on Social Security, which I introduced last week, which addresses the underlying problems of the system. It has four basic elements, and, as a practical matter, it addresses the next generation--my generation--and younger people's generations as to how they will be impacted. It has very little significant impact on the people who are presently receiving benefits from the Social Security system. The first element of it, and probably the most magic, unique--I won't use magic, that will be too egotistical a term--the most unique is I am suggesting we take now what is presently the surplus in the system, which surplus we expect to run through the year 2010, and we refund that surplus to the wage earners. Today, $20 billion more is paid into the system than is paid out of the system for benefits. That means the wage earners in this country are paying $29 billion more in taxes than they need to pay under Social Security to support the Social Security system. My suggestion is that we refund that by reducing the payroll tax by that 1 percent, from 7.5 percent to 6.5 percent, which works out to about 12 percent actually, but a 1-percent reduction. And we allow the wage earner to take that 1-percent savings and put it into a savings account, into a savings vehicle like an IRA or some other personal savings vehicle and invest it for their future. This would allow us to begin to prefund the liability of a system which is now subject to contingent funding. We now have a pay-as-you-go system. There is no account which is set up for anybody who is on Social Security. What is paid in today is paid out today. This would allow us to begin to prefund that liability and to give working Americans who are under the age of 50 an opportunity to start to save for their retirement. And it would do it without impacting at all--at all--the present benefit structure of senior citizens. In addition, we must acknowledge that our society is living longer and being more productive. When the Social Security system was officially created, the average life of an American male was 61, and the retirement age was set at 65. Franklin Roosevelt was no fool. Today, the average life expectancy of an American male is 72 and is moving toward 78. Retirement age remains 65. My proposal, for people who are under the age of 45, would scale up the retirement age and give them lead time to anticipate that. Again, it would affect nobody who is on the system or about to come on the system. In addition, I do something which is called changing the bench points, which is essentially affluence testing, not for people who are on the system today but people who are under the age of 45. These are some changes that would bring about a solvent system. They are different, but they are proposals that need to be put on the table and discussed. Mr. President, I thank the indulgence of the Chair.

Mr. GREGG

Mr. GREGG. Mr. President, I rise to address an issue which has been raised by other Members on this floor, which I believe is of great significance and which must be resolved in the next few days. That is that the Clinton administration has a difficult matter of rendering a decision, in consultation with the Secretary of State, as to whether or not to certify Mexico as a nation that is cooperating in the area of our war on drugs. There are many factors to consider before making such a decision, but the primary factor for me is what effect does such a decision have on our ability to fight the use of drugs here in the United States? Drug abuse continues to be one of the primary serious problems, primary and most serious problems, our Nation is facing, especially among our young people in our inner cities. Fighting drugs has to be one of the most important goals of this administration and of this Congress. Since the so-called certification process was begun in the mid- 1980's, Mexico has always been deemed to be a nation that is making a strong effort in the drug war, and many of us in Congress have had concerns, and continue to have concerns, about Mexico's progress. So at some point, you have to evaluate the effects of bestowing certification status on Mexico. Has certification improved Mexico's ability to deal with drug cartels? Have cocaine seizures increased? Are drug dealers being arrested and convicted? Are antimoney-laundering bills being enacted into law in Mexico? And finally, and perhaps most important, are the Mexican law enforcement agencies cooperating with us and are they free of corruption? It is this last point that I think remains the most single significant concern and impediment to certification. The arrest of the Mexican General Jesus Gutierrez Rebollo, the Mexican drug czar in charge of Mexico's counternarcotics efforts, on a charge of bribery, cocaine trafficking and for having ties to organized crime leaders in Mexico's drug cartels, was, in the words of our own United States drug czar, General McCaffrey, a ``terrible blow.'' It really is more than that, of course. To have the chief law enforcement officer in the area of drug enforcement in Mexico turn out to be nothing more than a front man for the Mexican drug cartels undermines all credibility of the effort of Mexico in the area of fighting drugs. Our intelligence agencies are now conducting a damage assessment to establish how many of our agents, informants and counterdrug operatives were put at risk. It is believed that a very large number have been put at risk, and, in fact, the damage to this intelligence network may exceed the damage that was created in the CIA by the Aldrich Ames case. If you remember, in the Aldrich Ames case a large number of agents and operatives for the CIA died. When you add up the evidence about the results of certification, you have to wonder what effect it has had on stemming the flow of drugs into this country. Mexico is the source of 70 percent of the cocaine on American streets and is the growing source of the most violent types of drugs. The primary cartels which are now shipping their drugs to the United States are no longer centered in Colombia. They are two cartels centered in Mexico. The antimoney-laundering laws are incomplete and not yet implemented. In short, the battle against drugs being shipped to the United States from Mexico is being lost in Mexico. In light of the ongoing corruption and the flow of drugs into our Nation, I believe the United States must withhold full certification. The cost of drug abuse to our society remains too high to take any other course. There is no doubt that on the domestic front, we can do a great deal more, and we must. In fact, it was unfortunate that this administration essentially ignored this problem during its first term, but the administration has now turned its attention to this issue, and, hopefully, we can make greater progress. We need strong leadership from the White House. The President does control the bully pulpit and, as we saw with Mrs. Reagan's efforts under the ``Just Say No'' program in the eighties, the White House can have a dramatic effect on utilization. But at the same time, we must pursue a more effective policy that will cut off the flow of drugs from source countries like Mexico. I believe that withholding full certification to Mexico would send the right message from the American people to the Government of Mexico, and that message is that the status quo is not acceptable. I urge the President to hear the concerns of our agents on the front lines who cannot trust their Mexican counterparts for fear of being compromised. As the DEA Administrator, Mr. Constantine, stated, ``There is not one single law enforcement institution with whom DEA has a really trusting relationship.'' It is time, Mr. President, to take strong action, and I strongly suggest that we not pursue certification.

Mr. GREGG

Mr. GREGG. I thank the Presiding Officer for his courtesy and the chairman for his courtesy. Mr. BIDEN addressed the Chair.

Mr. GREGG. Who controls the time?

Mr. GREGG. I thank the chairman of the Foreign Relations Committee for yielding me time on this nomination. I rise in support of this nomination of Congressman Richardson to be America's Ambassador to the United Nations. I had the pleasure of serving with Bill Richardson while he was in the House. We arrived at nearly the same time. He was a joy to serve with, and I have a lot of respect for what he has done since that time, especially in the area of international affairs where he has in a number of instances been able to extricate Americans from very difficult situations. However, on this issue of the nomination, I think we also need to address the question of the status of the United Nations and especially the relationship of this Government to the United Nations, and a few caveats need to be pointed out. Specifically, my concern, and I think the concern of a number of Members of Congress, is with the payment of arrearages to the United Nations. The administration, we hear by rumor, is going to send to this Congress a supplemental, which supplemental will include in it a $900 million plus request for payment of arrearages to the United Nations. There are two major issues raised by this. First, the question of whether $900 million is the correct number. There is some serious concern by those of us who have looked at this issue that that number may be too high and that the proper number should be less because we as a government have not received proper credit for costs of peacekeeping which we have incurred and should have been credited for. Second, independent of what the right number is relative to arrearages, there is the question of what the money will be spent for in the future. The United Nations has some very serious problems in its management. The new Secretary General, Kofi Annan, has made a commitment to try to address those problems, and we respect that commitment. But we need to go beyond verbiage. We need to go beyond language, and we need to have specifics, and we need to have enforceable and identifiable and ascertainable standards we can look to. Specifically, we need to have from the United Nations a system to review where the money is spent. There is not now available to those who wish to review, those member countries that wish to review, an effective accounting procedure for where the money goes once it arrives at the United Nations, and we need to have that. Second, we need to have an effective process for determining the personnel policies of the United Nations. There is not now a structure for adequately reviewing how personnel decisions are made at the United Nations. There is a legitimate concern that there are a significant number of political appointees at the United Nations, patronage, for lack of a better word, and that these appointees do vote in many instances. That is the representation. It may or may not be correct. But because there is no system to be able to review the personnel policies of the United Nations, because they do not have a systematic personnel policy system, it is impossible to evaluate the accuracy of these representations. Third, we need to have the process for evaluating the full services delivered by the United Nations, the programmatic initiatives taken by the United Nations and whether or not they are being efficiently and effectively handled. This is a very genuine concern because there is a very significant amount of anecdotal evidence, at least, that many of the activities and dollars that have been spent to support those activities may not have produced the results sought, or in many instances the dollars may have just been misplaced in at least a few cases that have been found by the present inspector general, even misappropriated. So until we get in place these three major accounting processes, which are typical of any major structure of government or of the private sector, an accounting structure for knowing where the money goes, an accounting structure for knowing what the personnel policies are, and an accounting structure that allows you to follow programmatic activity as to its efficiency and effectiveness, until we get something in place that shows us we are going to have those types of systems in place that allow us to review and know whether or not our dollars are being spent effectively, it is very hard for us as the fiduciaries of our citizens' dollars, as the managers of our taxpayers' hard-earned income that is sent here as taxes, to say to the United Nations you shall have this money in a carte blanche type of approach. So there will be a significant debate in the Senate, and I suspect in the Congress generally, as to how we structure any payment on arrearages, and it is going to be my position, which I intend to aggressively pursue--and it really is a position where I follow the lead of the chairman of the committee--that we have effective accounting procedures in place and that they be ascertainable and that they be structured in a way that we are sure we are getting our dollar's worth of effective administration, personnel management and services.

Mr. GREGG

Mr. GREGG. Mr. President, I want to speak briefly this morning about the status of the President's budget. Obviously, this is always a very significant event when the President presents a budget. This year, I think the climate and the substance of the budget is significantly different than what has occurred in past years. There is a commitment by this Congress to get to a balanced budget by the year 2002. A year ago, we sent a budget that would have accomplished that to the President, and he, regrettably, vetoed it. Now the President has come forward and accepted this challenge and said that he also believes that we should get to a balanced budget by the year 2002. He sent up to us a proposal to accomplish that. His budget, as proposed, has many constructive functions in it. It also has many questions. Regrettably, it has a lot that is left undone and unaddressed. On the constructive side, he does get to a balanced budget --at least as he claims--using his numbers. Unfortunately, the questions that are raised by the way in which he gets there are significant. For example, next year, the deficit will go up and the following year the deficit will go up, under his budget. Even in the following year, the deficit goes up under his budget. It is not really until he is about to leave office that he alleges or represents he is going to put in place programs which would bring the deficit down. That, to me, is not what I would call a good glidepath to a balanced budget. The glidepath should be a downhill glidepath, not a roller-coaster graph. The President proposes about $258 billion of not cuts, but attempts to slow spending over the next few years. Of this, it appears that about $80 billion comes from defense, about $58 billion comes from domestic discretionary programs, and about $21 billion comes from entitlement issues. Those are good, solid numbers--well, not necessarily solid numbers, but good starting numbers, and we will see whether they are solid numbers. At the same time he is proposing $121 billion in savings over the next few years in the rate of growth of entitlements, he is also proposing $60 billion of new spending on entitlement programs, such as new Medicare benefits, Medicaid benefits, food stamp and SSI benefits, new health insurance benefits. And under his education initiative is a brand new entitlement program for school instruction, allegedly, and a brand new entitlement program for school literacy--$60 billion in new spending, which gives you basically a net in the entitlement areas over 5 years of $60 billion in reduction, which is not a very significant number. That is about $10 billion a year on entitlement spending which annually represents almost 55 percent of the Federal budget and is closing in on $700 billion. So it is not a big number. In fact, it is not a strong enough number in order to get to a solid balanced budget because what happens is that, even if we get to the balanced budget, even if we accept the figures which the President has proposed in his budget as getting to the balanced budget in the year 2002, we see those deficits exploding after that period. Why is that? Because there is no fundamental proposal for structural reform of the major entitlement programs in the President's budget. That is where I believe this budget is inappropriate. There has to be fundamental reform if we are going to honestly address this issue, if we are not going to simply pass it off onto the next administration, as would occur in this case, or the next Congress as might occur in our case, or, unfortunately, the next generation, which is exactly what we are doing as a Congress and a Presidency if we pursue a tentative course in addressing the entitlement reform. In the area of entitlement reform, there is in the President's budget no initiative to try to put in balance for any extended period of time the Medicare trust fund, part A, or the Medicare system. The President of the Senate today has been one of the leaders on the issue of how you can reform Medicare in a substantive way so we can have a strong insurance system for our seniors. I have also put together something called Medicare Choice, or Choice Care, which would be a substantive structural reform which would use the marketplace to try to create an incentive for efficiency in the Medicare system which would give seniors choices, much as we have as Members of Congress, to go into the marketplace and choose a variety of different health care programs, the type of structural reform which myself and the Senator from Tennessee, who is in the chair today, have talked about, are trying to energize and for which we have a lot of support, by the way, here in Congress. It is nowhere to be found in the President's proposal, nor is there any other structural reform which would address the underlying Medicare concerns to be found in his proposal; just a variety of traditional provider payment slowdowns and possibly an accounting mechanism that would significantly adjust the way we pay for home health care. Neither is there a long-term solution, but one which is a totally inappropriate accounting gimmick. There is no long-term solution as to how we make Medicare solvent. So the proposal does not address Medicare reform. The proposal also does not address the reform of our tax laws, which it should. It calls for a $98 billion cut in taxes. It also calls for an increase in taxes of about $76 billion. So essentially there is no tax cut in this package. More importantly, there is no attempt to address the underlying problem which our tax laws have. We just saw where the IRS spent $4 billion to put in place a computer system to try to make the tax system work in this country, and it appears it can't even figure out who is filing what returns when and how much they are owed. After spending $4 billion, the IRS has openly admitted that it has failed; $4 billion down the drain. Why is that? Is it because they cannot produce such a computer system? In large part, yes. More significantly, it is because our tax laws are so complex and convoluted that they are simply unenforceable and ineffective, and is not a way that we should be raising revenues for the citizenry. The IRS has become a totally overbearing and, in many instances, inept organization which the American people no longer have confidence in. That undermines constitutional government when your tax-raising organizations lose the confidence of the people. So there should be a proposal, or at least a discussion of or an initiative for how you reform the tax laws, how we take this great, huge, byzantine morass called the IRS and bring it into the 21st century and simply make it understandable and give the American people an opportunity to file a tax return on a postcard, pay taxes, and know that they are being accounted for correctly and recognize that we need more efficiency. So there is no proposal in here for fundamental tax reform, and there should be. The President has missed an opportunity. It is basically a budget which is based on optimistic economic assumptions, has in it new entitlement proposals for spending, and has a very low net tax cut, none of which really accomplishes the basic goals of the balanced budget. If we are going to balance the budget, we have to fundamentally reform the underlying drivers of our budget problem, which is the entitlement system and our tax laws. Yet, that is not addressed in this budget proposal. It is, however, a starting point. We as a Senate, and I as a member of the Budget Committee, intend to take it as such and to work with the President to try to put in place something that should not only lead us to a balanced budget in the year 2002 but will give us an opportunity at least to see some light at the end of the tunnel for a long-term resolution of the major underlying public policy questions which we have in this country--Medicare, Social Security, and our tax laws. So I appreciate the time, Mr. President, of the body. I yield back my time at this point.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG. Mr. President, can I ask what the present proceedings are before the Senate?

Mr. GREGG

Mr. GREGG. I ask unanimous consent for an additional 3 minutes, Mr. President.

Mr. GREGG. That means the President is saying, let us spend another $43 billion in education, new dollars on new programs. Well, how can he say that when we are not paying what we have already got on the books? That is the point. How can we go out and put on the books new programs for building construction, which clearly is not a Federal role to begin with, new programs for a variety of different initiatives in education which may be only marginally in the role of the Federal Government, brand new programs, when we are not paying the cost of special education, when we are pitting the special-education students and their parents against the average students and parents in a school system, when we have created this horrendous situation in the local communities where the local school dollars are being drained off to pay for a Federal obligation because the Federal Government is not willing to step up to the bar and make its payment? It is wrong. What we have done is wrong. Yet now we have the President suggesting a whole new group of expenditures in education. I suggest, before we step down this road of new education initiatives, before we start building schools for school districts-- something that is clearly not a Federal role--that we pay for what is a Federal role, and that we relieve this problem, and that we take out from over the head of the special-needs students the cloud that the Federal Government has failed to pay its fair share. So I am just putting the Senate on record that I am going to work with the Senate leadership and other Senators who I know feel this way--and there are a lot of us here who feel this way because S. 1 is a consensus bill amongst Republican Senators--to make sure that, before we begin any new education initiatives, we fund the one we have on the books, we fund the special-needs program, and we fund it appropriately. So every amendment, every proposal that comes to this floor for a new education initiative will have with it, I assure you, an amendment which will say, special ed is our first obligation, the special-needs child is our first obligation. Let us look to that before we start a new program. Let us fulfill our obligations, before we start a new program, to the special-needs students and to the local taxpayer. Mr. President, thank you for your courtesy and for the extra time. I yield back my time.

Mr. GREGG. Mr. President, I rise today to speak a little bit about the issue of education, which was raised so aggressively by the President in his State of the Union Address last night. I congratulate him, once again, for focusing the country's attention on this critical concern. It is something that we, as a nation, have focused our energies on ever since we began, and many could argue that one of the really unique miracles of American society has been our educational system. With each generation, we have asked ourselves, is our system working well, is it working right, is it producing individuals who are trained and capable of participating in the issues which their generation will face? In many instances, the answer has regrettably come back, no, maybe we aren't or we are not doing quite enough. I, for example, remember that in 1980, we had the report of ``A Nation at Risk,'' and that report identified as a country, because of our educational failings, we were falling behind, falling behind our sister nations in the industrial world in the area of educating our students and their capacity to compete, especially in areas such as science and math. So a major initiative was undertaken as a result of that. Then when I was Governor of New Hampshire back in 1988, President Bush had just been elected, and he proclaimed that he would be the education President and gathered, for the first time, I believe--maybe it was the second time in history--all the Governors in one location for the purpose of taking on a one-item agenda. That was in Charlottesville, VA, and the issue was education. At that time, Governor Clinton from Arkansas was, I believe, the chairman of the Governors conference and played a major role in identifying five major policies which would be the goals to get us to the year 2000 to improve our educational system. One of those policies involved being a leader in the world by the year 2000, I believe it was--it might have been earlier--in the area of math and science education. Now we have President Clinton coming forward and saying, again, and accurately so, that our educational system is not accomplishing what we need as a nation. It is not educating our children to the level that is necessary for us, as a nation, to compete. And so we revisit the issue. The question is, how do we revisit the issue? Do we learn from our mistakes of the past, or do we simply go forward with another new set of initiatives which may or may not accomplish our goals or may not accomplish more than what was accomplished in the last efforts. This is what I want to discuss, because I think the President, for all his energy and his enthusiasm and his rightly directed purpose, which is to improve education, has, to some degree, missed the point. There are a lot of issues of education, but there are parts of education which work well, and one of the core parts of education that works well is the ability to keep the control over education at the local level. The essence of quality education, the formula for quality education is not a formula which says dollars equal better education. It is a formula that has variables in it, including dollars, including teachers, including principals, including school boards. But that formula doesn't necessarily have as a major function in it--we are talking now about secondary and elementary education--the Federal Government deciding the purposes, the roles, the curriculums of education. Rather, the essence of that formula is that the local community, the teachers, the parents, the principals, the school boards collaborate to produce quality education. So the Federal role in education is narrow, because there could be nothing more disruptive or, in my opinion, nothing that would undermine education more fundamentally than to move the decision process out of the hands of the parents, out of the hands of the teachers, out of the hands of the principals to Washington. We would end up with a bureaucratic structure which would not respond to the needs of better education. No, the Federal role is narrow. It should be focused, focused on places where it can make an impact, and that is what we tried to do or attempted to do. Sometimes we tried to go beyond that. Basically, that is what we tried to do. The Federal role has been, for example, in postsecondary education. The Federal role is significant, important, and appropriate in assisting students in being able to move on past their high school years to higher education, and the President's initiatives in this area are something that we want to look at because they could be a valuable addition. The Federal role in the secondary school level has been really limited and focused to a couple of specific areas where we felt the Federal Government could play a major part--chapter 1, Head Start, and special needs students. But now the President comes forward and lays out a whole brand new set of initiatives, new spending programs, $43 billion in new programmatic activity, not pursuing programs that are on the books, but setting off on brandnew programs, and you have to ask yourself: First, how many of those programs are appropriate to the Federal Government and, second, and even more important, is that the best use of those dollars, because there is something that is missing here. At the local school level, the Federal Government has said you must educate the special needs child under Public Law 94-142. This was an excellent decision, that we require that the special needs child would be able to be educated in the least restrictive, most mainstreamed environment, and it has worked well. But when we passed that law, the Federal Government also said that we were going to be a partner in that education; that we, the Federal Government, because we were insisting that the local government undertake this role in the elementary and secondary schools, that we, the Federal Government, would pay for 40 percent of the cost of special education in this country. Today, the Federal Government doesn't pay for 40 percent of the cost of special education, it pays for approximately 6 percent, and the impact on the local school systems of the Federal Government not stepping forward and doing what it said it would do to assist in educating special needs students has been dramatic. We have seen a shift in resources at the local level which has been arbitrarily created because of the Federal Government's failure to live up to its responsibility. In the local schools in my State, for example, the local property taxpayer bears the burden of education primarily, and this is true throughout New England to a large degree, and many other States, I am sure. What happens is that because the Federal Government is unwilling to pay the 40 percent it said it would pay for a special needs student, the local property taxpayer has to pick up that 40 percent, or the difference between what the Federal Government is paying and what it said it would pay, which is about 34 percent. That has meant that resources which might have been used for the average student, maybe to have an extra art class or an extra language class or an extra math class, or might have been used for the athletic program or for the cultural programs in the school system or might have simply been left with the local property taxpayers so that they could meet their mortgage payments more easily or their car payments more easily, that money is going to educate the special-needs student. What we have created is a conflict, an inappropriate, unfair conflict, especially to the special-needs student, because what has happened is that in many communities where you have children who need special assistance, that special assistance is extremely expensive, and the parents of the students who are not special-needs students look at the parents of the students who are special-needs students and say, ``Why is your son or daughter getting $10,000, $20,000, $30,000 spent on their education annually when my son or daughter is only having $3,000 or $4,000 or $5,000 spent on him or her?'' ``It's just not fair,'' they are saying. So you have this conflict. And it is not right. There is no reason why that special-needs student should be separated out and find that they are looked upon in a jaundiced way by the community, by the other parents, and parents conflicting with parents, the school board conflicting with parents. The only reason it is occurring is because the Federal Government has failed to live up to its obligations on this special education. We said we would pay 40 percent of the cost of special education, and instead we are paying 6 percent. That has created this conflict at the local level, which has placed the special needs student in a really unfair and inappropriate position. You have to ask yourself, why do we do this? Why does the Federal Government do this? Well, it is called an unfunded mandate. The first act of the Republican Congress 2 years ago was to pass a bill, which I helped author but which was really energized and driven by the Senator from Idaho, Senator Kempthorne, which said we will not pass unfunded mandates any longer. Unfortunately, this one is already on the books. It is the largest unfunded mandate in the education arena; maybe outside of a couple of environmental unfunded mandates, the largest unfunded mandate in the country. It has had this really perverse effect, both of the tax burden on the local communities and the States, but, more importantly, the relationship between the students in a school system. And it is not right. What we have said is we are going to correct this. We said it in the unfunded mandate language that we passed. More recently we made a commitment, as a Republican Senate anyway, to try to redress this. As we closed out the last budget year, we passed the omnibus appropriations bill. In that appropriations bill, at my suggestion, but with Senator Lott's leadership, we put in $780 million more into special education over what had originally been planned. It does not get us up to 40 percent. Maybe it got us up to 7 percent from 6 percent or 8 percent from 6 percent, but it was a downpayment. For example, in New Hampshire an extra $3.5 million coming to special needs kids toward the Federal obligation. So we showed we were serious, as a Republican Congress. Then to confirm and dot the ``i'' and cross the ``t'' and put the exclamation point in, we have introduced Senate bill 1. Senate bill 1 says that we, as a Republican Senate, commit ourselves to getting to full funding of the special education accounts in a 7-year period on a ramped-up basis, which means that this year we need to add additional moneys in the special education accounts. Why does this all relate to the President's speech? It relates to the President's speech for this one very obvious reason. The President has proposed $43 billion in new spending on education. We have not yet seen his budget to know where he is going to get this money. We do not know what accounts he is going to take the $43 billion from. We have heard him say he is going to do this in the context of reaching a balanced budget by the year 2002, which is our goal and our purpose. Taking that at face value, that he is going to have legitimate accounting mechanisms and have made hard decisions for the purposes of generating these dollars, it means that a large amount of new dollars is being reallocated from some other accounts into the education accounts.

Mr. GREGG

Mr. GREGG. Mr. President, what is the regular order? Are we in morning business?

Mr. GREGG. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG

Mr. GREGG. Mr. President, this piece of legislation which I have just sent to the desk is an update of the legislation which I introduced last year to address what is obviously one of the most critical issues which we face as a Congress, and that is the question of the solvency of the Medicare trust funds and the proper way to deliver health care to our senior citizens. Last year the bill that I am introducing was basically used as the core concept for the structural reform which was included in the balance budget bill which was passed by this Senate and by the Congress and sent to the President, which he unfortunately decided to veto. The bill that I have just introduced is an attempt to once again bring forward what I consider to be a number of very constructive and important initiatives in the area of making Medicare a more effective system of health care for our senior citizens. We have all heard the facts, the facts being that the Medicare system is broken, that it is not only broken but that it is headed aggressively toward bankruptcy, that this year it lost $9.2 billion or spent $9.2 billion more in the part A trust fund than it had taken in, that the losses are increasing and will be more than $40 billion annually by the year 2000, and that, as I mentioned, the part A trust fund in Medicare will be broke, will be insolvent as of the year 2001, the early part of 2001, actually January. I think the actuaries may have fudged a little bit there so they would not have to say 2000. I think we are going to find quickly that the insolvency of the trust fund is going to occur in the year 2000, which is not very far away from us. What happens when the part A trust fund goes insolvent? Basically, the senior citizens do not have a health care system and do not have an insurance system. There is no provision in the law today that allows us to supply health care if there are no funds to pay for it in the part A trust fund. So the system will literally not exist, and senior citizens will be without a health insurance system. We should have addressed this last year, of course. And there was an attempt to address it last year. But because of the politics of the season, because we were in an election year--both for this Congress and for the Presidency--it was not addressed, even though sincere attempts were made from this side of the aisle. Those sincere attempts included, in significant part, the bill which I have just reintroduced. But they were confronted by an opposition which demagoged the issue and said that the proposals to try to bring about solvency in the Medicare part A trust fund were actually going to undermine that system when in fact what is undermining the system is the pending insolvency of the trust fund. President Clinton, this year, to his credit, has decided to step up to the issue of Medicare or at least said he is going to publicly, and suggested that he will propose $138 billion in savings in the Medicare accounts. Of course, last year when Republicans proposed savings in the Medicare accounts, they were accused of cutting Medicare. I will not use that term because I believe that we need to pursue an effort of constructive dialog here. But it is ironic that this year the President would be calling his proposal to save $138 billion as a constructive attempt to address Medicare when last year it was characterized as a savaging and extreme act, both by members of the President's party and by the Vice President, when we proposed savings not much higher than what are being proposed by the President today. Unfortunately, in proposing his $138 billion in savings, the President has used a lot of old ideas and what you might call attempts to address the Medicare system at the margin. Unfortunately, also, although not accounted for allegedly in the $138 billion of savings, he has also used a massive bookkeeping gimmick of moving home health care out of the part A trust fund allegedly into the part B trust fund, so actually it is under the taxpayers of America and into the general fund. It is an incredible act of flim-flam and one which hopefully will not be accepted by this Congress. Independent of that, the real problem of the $138 billion is not that it is inappropriate; it is that it does not address the underlying structural problem of Medicare. It addresses lower payments to providers, mostly. But the problem of Medicare is not the extra dollar we are paying to this provider or the extra 5 percent we are paying to that provider, it is the fact that it is presently structurally not supportable, the fact that the costs of Medicare are simply going up much faster than the cost of the Government generally and the rate of inflation. Not only generally, but also the rate of inflation in the health care industry. The system is designed as a 1960's automobile. It was created in the 1960's. In the 1960's it was not a Cadillac system. Everybody knows that. It was probably an Oldsmobile. But it is the exact same Oldsmobile designed in the 1960's that is now on the road in the 1990's. It has been patched and repaired and fixed up here and there, but we are still driving down the road in the 1990's in a 1960's car. It is not working. It is not working because it does not acknowledge the fact that the health care delivery system in this country has changed fundamentally since the 1960's. In the 1950's and 1960's most people had a doctor by name, an individual. Most people pursued what was known as fee-for-service medicine where they hired their doctor. Their doctor referred them to another doctor if they had a problem. They hired that doctor, and they went around hiring individual doctors. Today, health care is not provided that way in the private sector, or, for that matter, in the public sector, if you are a member of the Federal Government. Today, the way it is provided, usually you have a prepaid plan where you pay an amount upfront and you participate in a plan that provides you a variety of options with a variety of different physicians to go to. It may be in the form of an HMO or PPO or PSO, or it may be in the form of some hybrid, but there are usually a variety of different ways you get health care. Only rarely today in the private sector and in the Federal employee sector is that health care provided in the manner of going out and hiring an individual physician and then moving forward on a fee- for-service basis through the system. Yet, we still have Medicare delivering the vast amount of its care, the vast amount of its service, under the fee-for-service system, which has created an inflation factor in the Medicare system in the cost of delivery of that system which is basically making it unaffordable and leading to the bankruptcy of the part A trust fund. Because there is no competition today in the senior citizens' health dollars, because the system remains a closed system where fee-for-service really is only the viable way--there are a few HMO's, but they are very limited in their applicability--then, as a result, we have not brought the market force into the system, we have not brought efficiencies into the system, and we have not seen occur in Medicare what has occurred in the general health care delivery system in this country. Over the last 3 years, the rate of inflation of health care costs in this country, the inflationary rate of growth of health care costs in this country, were less than the general rate of inflation. The general rate of inflation was about 3 percent. The rate of growth of health care costs was below that number in the last 3 years in the private sector. Yet, in the Medicare system, the rate of growth of health care has remained about 10 percent. What my legislation does essentially is give seniors more options. That is why it is called choice care. It says to senior citizens, you can go out in the marketplace and participate in the system you presently have if you want to, in the fee-for-service system. There is no reason you cannot stay in the system you are presently in, or, alternatively, you can go into one of the other delivery systems--HMO, PPO, or PSO--whatever you want to pursue. It gives the senior citizen, if you want to simplify it, it gives the senior citizen the same options, essentially, that a person who works for the Federal Government has who is under the Federal employee health benefits program. I, as a Member of Congress, have an option to choose a number of different health care plans. Why should not the senior citizens have that same option? Basically, we asked that question, and we say they should. They should. Not only would it be more advantageous for a senior citizen to be able to go out and pick any number of health care programs, but it would be more advantageous for us, the Federal Government, and for the taxpayers to have those options, because we would bring competition into the system and hopefully, as a result, bring market forces into the system and, as a result, help to reduce the rate of growth of health care costs to something closer to what we are seeing in the private sector. We never expect that a program designed for seniors will have the same rate of growth of health care costs as the private sector because seniors, regrettably, have more health problems. We know we can do better than a 10-percent annual rate of growth. In fact, to make the trust fund solvent, we do not have to get to the private sector rate of growth. We do not have to get to a 3 percent or less rate of growth. We can make the trust fund solvent with rate of growth somewhere between 6 or 7 percent annually. We are only talking about reducing the rate of growth of the Medicare trust fund by 3 percent; we are talking about continuing to allow it to grow by 6 to 7 percent. This is a huge increase, a huge amount of new dollars flowing into the health care system every year. It is a result of the fact we are able to still balance the trust fund and make it solvent with that type of rate of growth that we create a huge marketplace incentive for people to compete for senior dollars in health care. It is that desire for competition, that use of competition which will lead us to a more competitive system, a more efficient system, and for a system which will actually deliver better health care to seniors. We put some protections in here, also, to make it clear that seniors are not giving up anything by participating in choice care. First off, as I mentioned, they have the right to stay with fee-for-service, their present plan, if they want to. Second, any plan that wants to compete for a senior citizen dollar must provide the core services which are presently provided under the Medicare system. You may say, if that is the case, why are they ever going to be able to charge less if they have to provide the same amount as the senior presently gets? It is called the marketplace. There are ways to provide the same services and pay less for them and have them cost less by having more efficiencies in the provider. The marketplace will produce that sort of efficiency and you will have less costs. Also, we give seniors the right to opt out if they choose another type of health care delivery service. If they are uncomfortable with it, they can disenroll from that service. Furthermore, and most importantly, we do not allow people who are competing for the seniors' dollars to discriminate. In other words, if you are a provider and you are going to make yourself available to supply senior citizens with health care, you have to take all comers. There cannot be any attempt to screen out people because they have preexisting conditions. So it will not have adverse risk selection. The practical implications of this are that a senior will annually receive a booklet or proposal, much like we receive as Federal employees, which will outline the various health care systems which are available to that senior. What I see happening is that there are going to be a lot of health care providers who will say, ``Hey, we can provide that senior with the same health care they are getting today,'' because of the 6 to 7 percent annual increase. ``We can provide that senior with that same health care and throw some other benefits in, too. We can offer prescription care, we can offer eyeglasses, we can offer a variety of things that are not presently available under Medicare because we know that we can more efficiently deliver the service than the senior is presently getting on fee-for-service.'' What I expect will happen and what I am pretty confident will happen and what people who have looked at this in depth say will happen is that the marketplace will bring forward a variety of different options from which seniors will have a choice. At the same time, we will give seniors an incentive to go out and look at those choices because what we will say to seniors is, ``Listen, today, we pay about $4,800 a year for your health care per senior. You, senior citizen, to the extent you choose a health care delivery service,'' which, again, has to have the core delivery services that you presently get so they cannot reduce their price because they are not delivering you what you need,'' to the extent you choose a delivery service which costs less than $4,800, we will let you, the senior, keep 75 percent of the savings.'' So if the annual premium of an HMO supplying seniors with the same service is say $4,500 and the senior chooses to go with that HMO because the senior maybe has a family member--a son or daughter who is working and a member of that HMO--and the son or daughter say, ``They can give us pretty good service,'' that senior will get to keep the difference between $4,800 and $4,500, or $300. That senior will get to keep 25 percent of that difference, and 75 percent will be returned to the trust fund. So what we have created here is a market event where a senior citizen can get a savings by shopping thoughtfully and efficiently for their health care, and where the health care providers have an incentive to come in and compete for that health care dollar. What does that cause? That causes efficiency. It causes the marketplace to create efficiency. We have learned that the Federal Government can't produce efficiency. We have learned that by having a nationalized system, which is what Medicare is, you do not have an efficient system; that you have an inefficient system. What we know from experience is the way you create efficiency and lower costs is by having competition and having a playing field where the consumer is protected, which is exactly what this does. So this proposal would give the seniors an incentive to be thoughtful purchasers, and would give the marketplace an incentive to come in and be thoughtful competitors, or strong competitors for the senior citizen dollars. Another issue that is raised and is legitimate is the question of reimbursement and how we are going to reimburse these provider groups. The President has proposed that we cut the rate of reimbursement for HMO's from 95 to 90 percent arbitrarily across the board. I am not going to criticize the President for trying to address the cost of growth. I think that is important. But there is a better way to do this. The fact is that the reimbursement system as it is presently structured is out of kilter. For health care services which are identical--and in some cases they are better in the lower-cost States than the higher-cost States--the reimbursements are not identical. They are totally out of whack. For example, there is a beneficiary reimbursement in South Dakota of about $200 per person. But on Staten Island it cost about $767 per person. Studies by Dr. Weinberg at Dartmouth, and a number of other professionals, have concluded that the service isn't any better but that it is simply an issue of regional disparity. And in fact in New Hampshire, which happens to be one of the lowest-cost health care States in the country--a little more than South Dakota but not much more--we are rated the No. 1 State in the country for health care delivery systems. Yet, our delivery systems are done at a cost which is one-third the price of what it cost on Staten Island. So this regional disparity has basically penalized States and areas that are trying to be efficient and effective in delivering their health care. Take Hawaii, for example. Hawaii has one of the highest costs of living in the country because of the fact that it is an island, and everything has to be shipped in, I guess. But at the same time Hawaiian medical care is one of the most efficient cost delivery systems in the country. So they are penalized. Those health care systems are penalized by a lower reimbursement rate. What we suggest--and this is a complicated issue--we are suggesting that as we go forward with this Choice Care proposal that we begin to level out the playing field on reimbursement so that we no longer are rewarding the inefficient, and so that the efficient receive the proper payment. We do this by not cutting anybody because we are increasing funding for Medicare throughout this period by 6 to 7 percent. We do not have to cut anything. What we are going to do is slow the rate of increase to those areas that have a much higher reimbursement and accelerate the rate of increase to those with lower reimbursement areas. As a result, we will at some point--there is a timeframe in our bill that allows for this--about 5 to 7 years from now get to a period where we have everybody in a much narrower band of reimbursement which leads to a much more efficient market. So the underlying theme here is simple. Under the Choice Care plan, which as I mentioned was adopted in significant proportions, or the concepts were adopted in significant proportions in the last budget, seniors should be given essentially the same choices that members of the Federal Government have and that the average working American has-- the ability to go out in the marketplace and choose from a variety of different health care providers. And in making that choice they should be given an incentive to be efficient. So we are going to reward them by giving them a return on the amount that they save, and at the same time we are going to say to the marketplace we are no longer going to disproportionately reward inefficient areas at the expense of efficient areas, and at the same time we are going to say to the seniors, ``You have a variety of options to choose from. But, if you want to stay where you are, and you are happy where you are, you can do that.'' So how does this help the Federal Government in the end? How does this get Medicare costs under control? It basically amounts to a major structural reform of the system. It is not playing at the edges the way the President proposes. It is a major structural reform. In the end we will have brought the marketplace into the system, we will have created an atmosphere where seniors will be looking at a variety of choices for health care, and where efficiency will be something that will have to be undertaken by the provider groups. They are going to be able to get the seniors' participation, and those seniors today who are in their fee-for-service probably are not going to opt into this overly aggressively because they were raised in the 1950's and 1960's with fee-for-service. We understand that. But what we also understand is that the coming generation of seniors has been in a workplace environment where the variety of health care service delivery system has been available to them. They are comfortable with a variety of health care delivery systems. And as such they are not going to shy away from taking advantage of the marketplace. So, as we go down the road we will get the type of savings we need. We will see that rate of growth reduced from 10 percent back to 6 or 7 percent. That is still a substantial rate of growth. Then we will have put in place something that can give us a long-term lasting hope for restructure of reform, or reform in the Medicare trust fund in order to avoid the bankruptcy. If we do not do this, the trust fund part A goes bankrupt. It is that simple. That is not acceptable. If we do not undertake structural reform, if we simply undertake the reform at the margins, like the President has proposed, we put off that bankruptcy maybe for 2, 3, or 4 years. But it still occurs. Our obligation as policymakers is to make the more fundamental broader changes that are needed for a long-term solution to this problem. And this is one major step in that direction. Mr. President, I appreciate your time and yield the floor.

Mr. GREGG. Mr. President, I introduce a bill that will have a significant impact on the promotion of long-term investment through a reduction in the capital gains tax. I believe the Congress has a responsibility to enact laws promoting long-term capital investment and savings by all Americans. Part of fulfilling this obligation must include implementing a plan that would reduce the current capital gains tax rate on long-term investments. We must also, however, balance this important economic goal against the moral issue of adding increasing debt onto our children's shoulders. This becomes an unavoidable issue in the capital gains debate because the Joint Committee on Taxation scores capital gains a big revenue loser. This scoring issue is an unfortunate fact that we in Congress cannot ignore. Accordingly, I have developed legislation that would encourage long- term investment by amending the current capital gains tax using a sliding scale plan. My bill encourages an individual to hold an asset over a number of years, thus, allowing a greater tax reduction on investments, with the maximum benefit being reached after 4 years. It would reward individuals who look toward contributing to a savings plan over a number of years, while at the same time making quick-fix investments less attractive. This sliding scale plan would encourage investments that benefit long-term savings, such as a child's education, an individual's retirement, or other non-speculative holdings. The theory behind the sliding scale reduction on capital gains hinges upon an agreed goal: the promotion of savings and long-term investment through a capital gains cut, while recognizing our current fiscal realities. The Joint Committee on Taxation estimates this plan would lose just $7.4 billion in revenue over the 1995-2000 period. Finally, Mr. President, I ask unanimous consent that a Washington Post op-ed by Louis Lowenstein, professor of finance at Columbia University, be included in the Record. Professor Lowenstein's piece outlines the current fiscal problem this legislation attempts to address. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG. Are we in morning business?

Mr. GREGG

Mr. GREGG. Mr. President, this piece of legislation which I have just sent to the desk is an update of the legislation which I introduced last year to address what is obviously one of the most critical issues which we face as a Congress, and that is the question of the solvency of the Medicare trust funds and the proper way to deliver health care to our senior citizens. Last year the bill that I am introducing was basically used as the core concept for the structural reform which was included in the balance budget bill which was passed by this Senate and by the Congress and sent to the President, which he unfortunately decided to veto. The bill that I have just introduced is an attempt to once again bring forward what I consider to be a number of very constructive and important initiatives in the area of making Medicare a more effective system of health care for our senior citizens. We have all heard the facts, the facts being that the Medicare system is broken, that it is not only broken but that it is headed aggressively toward bankruptcy, that this year it lost $9.2 billion or spent $9.2 billion more in the part A trust fund than it had taken in, that the losses are increasing and will be more than $40 billion annually by the year 2000, and that, as I mentioned, the part A trust fund in Medicare will be broke, will be insolvent as of the year 2001, the early part of 2001, actually January. I think the actuaries may have fudged a little bit there so they would not have to say 2000. I think we are going to find quickly that the insolvency of the trust fund is going to occur in the year 2000, which is not very far away from us. What happens when the part A trust fund goes insolvent? Basically, the senior citizens do not have a health care system and do not have an insurance system. There is no provision in the law today that allows us to supply health care if there are no funds to pay for it in the part A trust fund. So the system will literally not exist, and senior citizens will be without a health insurance system. We should have addressed this last year, of course. And there was an attempt to address it last year. But because of the politics of the season, because we were in an election year--both for this Congress and for the Presidency--it was not addressed, even though sincere attempts were made from this side of the aisle. Those sincere attempts included, in significant part, the bill which I have just reintroduced. But they were confronted by an opposition which demagoged the issue and said that the proposals to try to bring about solvency in the Medicare part A trust fund were actually going to undermine that system when in fact what is undermining the system is the pending insolvency of the trust fund. President Clinton, this year, to his credit, has decided to step up to the issue of Medicare or at least said he is going to publicly, and suggested that he will propose $138 billion in savings in the Medicare accounts. Of course, last year when Republicans proposed savings in the Medicare accounts, they were accused of cutting Medicare. I will not use that term because I believe that we need to pursue an effort of constructive dialog here. But it is ironic that this year the President would be calling his proposal to save $138 billion as a constructive attempt to address Medicare when last year it was characterized as a savaging and extreme act, both by members of the President's party and by the Vice President, when we proposed savings not much higher than what are being proposed by the President today. Unfortunately, in proposing his $138 billion in savings, the President has used a lot of old ideas and what you might call attempts to address the Medicare system at the margin. Unfortunately, also, although not accounted for allegedly in the $138 billion of savings, he has also used a massive bookkeeping gimmick of moving home health care out of the part A trust fund allegedly into the part B trust fund, so actually it is under the taxpayers of America and into the general fund. It is an incredible act of flim-flam and one which hopefully will not be accepted by this Congress. Independent of that, the real problem of the $138 billion is not that it is inappropriate; it is that it does not address the underlying structural problem of Medicare. It addresses lower payments to providers, mostly. But the problem of Medicare is not the extra dollar we are paying to this provider or the extra 5 percent we are paying to that provider, it is the fact that it is presently structurally not supportable, the fact that the costs of Medicare are simply going up much faster than the cost of the Government generally and the rate of inflation. Not only generally, but also the rate of inflation in the health care industry. The system is designed as a 1960's automobile. It was created in the 1960's. In the 1960's it was not a Cadillac system. Everybody knows that. It was probably an Oldsmobile. But it is the exact same Oldsmobile designed in the 1960's that is now on the road in the 1990's. It has been patched and repaired and fixed up here and there, but we are still driving down the road in the 1990's in a 1960's car. It is not working. It is not working because it does not acknowledge the fact that the health care delivery system in this country has changed fundamentally since the 1960's. In the 1950's and 1960's most people had a doctor by name, an individual. Most people pursued what was known as fee-for-service medicine where they hired their doctor. Their doctor referred them to another doctor if they had a problem. They hired that doctor, and they went around hiring individual doctors. Today, health care is not provided that way in the private sector, or, for that matter, in the public sector, if you are a member of the Federal Government. Today, the way it is provided, usually you have a prepaid plan where you pay an amount upfront and you participate in a plan that provides you a variety of options with a variety of different physicians to go to. It may be in the form of an HMO or PPO or PSO, or it may be in the form of some hybrid, but there are usually a variety of different ways you get health care. Only rarely today in the private sector and in the Federal employee sector is that health care provided in the manner of going out and hiring an individual physician and then moving forward on a fee- for-service basis through the system. Yet, we still have Medicare delivering the vast amount of its care, the vast amount of its service, under the fee-for-service system, which has created an inflation factor in the Medicare system in the cost of delivery of that system which is basically making it unaffordable and leading to the bankruptcy of the part A trust fund. Because there is no competition today in the senior citizens' health dollars, because the system remains a closed system where fee-for-service really is only the viable way--there are a few HMO's, but they are very limited in their applicability--then, as a result, we have not brought the market force into the system, we have not brought efficiencies into the system, and we have not seen occur in Medicare what has occurred in the general health care delivery system in this country. Over the last 3 years, the rate of inflation of health care costs in this country, the inflationary rate of growth of health care costs in this country, were less than the general rate of inflation. The general rate of inflation was about 3 percent. The rate of growth of health care costs was below that number in the last 3 years in the private sector. Yet, in the Medicare system, the rate of growth of health care has remained about 10 percent. What my legislation does essentially is give seniors more options. That is why it is called choice care. It says to senior citizens, you can go out in the marketplace and participate in the system you presently have if you want to, in the fee-for-service system. There is no reason you cannot stay in the system you are presently in, or, alternatively, you can go into one of the other delivery systems--HMO, PPO, or PSO--whatever you want to pursue. It gives the senior citizen, if you want to simplify it, it gives the senior citizen the same options, essentially, that a person who works for the Federal Government has who is under the Federal employee health benefits program. I, as a Member of Congress, have an option to choose a number of different health care plans. Why should not the senior citizens have that same option? Basically, we asked that question, and we say they should. They should. Not only would it be more advantageous for a senior citizen to be able to go out and pick any number of health care programs, but it would be more advantageous for us, the Federal Government, and for the taxpayers to have those options, because we would bring competition into the system and hopefully, as a result, bring market forces into the system and, as a result, help to reduce the rate of growth of health care costs to something closer to what we are seeing in the private sector. We never expect that a program designed for seniors will have the same rate of growth of health care costs as the private sector because seniors, regrettably, have more health problems. We know we can do better than a 10-percent annual rate of growth. In fact, to make the trust fund solvent, we do not have to get to the private sector rate of growth. We do not have to get to a 3 percent or less rate of growth. We can make the trust fund solvent with rate of growth somewhere between 6 or 7 percent annually. We are only talking about reducing the rate of growth of the Medicare trust fund by 3 percent; we are talking about continuing to allow it to grow by 6 to 7 percent. This is a huge increase, a huge amount of new dollars flowing into the health care system every year. It is a result of the fact we are able to still balance the trust fund and make it solvent with that type of rate of growth that we create a huge marketplace incentive for people to compete for senior dollars in health care. It is that desire for competition, that use of competition which will lead us to a more competitive system, a more efficient system, and for a system which will actually deliver better health care to seniors. We put some protections in here, also, to make it clear that seniors are not giving up anything by participating in choice care. First off, as I mentioned, they have the right to stay with fee-for-service, their present plan, if they want to. Second, any plan that wants to compete for a senior citizen dollar must provide the core services which are presently provided under the Medicare system. You may say, if that is the case, why are they ever going to be able to charge less if they have to provide the same amount as the senior presently gets? It is called the marketplace. There are ways to provide the same services and pay less for them and have them cost less by having more efficiencies in the provider. The marketplace will produce that sort of efficiency and you will have less costs. Also, we give seniors the right to opt out if they choose another type of health care delivery service. If they are uncomfortable with it, they can disenroll from that service. Furthermore, and most importantly, we do not allow people who are competing for the seniors' dollars to discriminate. In other words, if you are a provider and you are going to make yourself available to supply senior citizens with health care, you have to take all comers. There cannot be any attempt to screen out people because they have preexisting conditions. So it will not have adverse risk selection. The practical implications of this are that a senior will annually receive a booklet or proposal, much like we receive as Federal employees, which will outline the various health care systems which are available to that senior. What I see happening is that there are going to be a lot of health care providers who will say, ``Hey, we can provide that senior with the same health care they are getting today,'' because of the 6 to 7 percent annual increase. ``We can provide that senior with that same health care and throw some other benefits in, too. We can offer prescription care, we can offer eyeglasses, we can offer a variety of things that are not presently available under Medicare because we know that we can more efficiently deliver the service than the senior is presently getting on fee-for-service.'' What I expect will happen and what I am pretty confident will happen and what people who have looked at this in depth say will happen is that the marketplace will bring forward a variety of different options from which seniors will have a choice. At the same time, we will give seniors an incentive to go out and look at those choices because what we will say to seniors is, ``Listen, today, we pay about $4,800 a year for your health care per senior. You, senior citizen, to the extent you choose a health care delivery service,'' which, again, has to have the core delivery services that you presently get so they cannot reduce their price because they are not delivering you what you need,'' to the extent you choose a delivery service which costs less than $4,800, we will let you, the senior, keep 75 percent of the savings.'' So if the annual premium of an HMO supplying seniors with the same service is say $4,500 and the senior chooses to go with that HMO because the senior maybe has a family member--a son or daughter who is working and a member of that HMO--and the son or daughter say, ``They can give us pretty good service,'' that senior will get to keep the difference between $4,800 and $4,500, or $300. That senior will get to keep 25 percent of that difference, and 75 percent will be returned to the trust fund. So what we have created here is a market event where a senior citizen can get a savings by shopping thoughtfully and efficiently for their health care, and where the health care providers have an incentive to come in and compete for that health care dollar. What does that cause? That causes efficiency. It causes the marketplace to create efficiency. We have learned that the Federal Government can't produce efficiency. We have learned that by having a nationalized system, which is what Medicare is, you do not have an efficient system; that you have an inefficient system. What we know from experience is the way you create efficiency and lower costs is by having competition and having a playing field where the consumer is protected, which is exactly what this does. So this proposal would give the seniors an incentive to be thoughtful purchasers, and would give the marketplace an incentive to come in and be thoughtful competitors, or strong competitors for the senior citizen dollars. Another issue that is raised and is legitimate is the question of reimbursement and how we are going to reimburse these provider groups. The President has proposed that we cut the rate of reimbursement for HMO's from 95 to 90 percent arbitrarily across the board. I am not going to criticize the President for trying to address the cost of growth. I think that is important. But there is a better way to do this. The fact is that the reimbursement system as it is presently structured is out of kilter. For health care services which are identical--and in some cases they are better in the lower-cost States than the higher-cost States--the reimbursements are not identical. They are totally out of whack. For example, there is a beneficiary reimbursement in South Dakota of about $200 per person. But on Staten Island it cost about $767 per person. Studies by Dr. Weinberg at Dartmouth, and a number of other professionals, have concluded that the service isn't any better but that it is simply an issue of regional disparity. And in fact in New Hampshire, which happens to be one of the lowest-cost health care States in the country--a little more than South Dakota but not much more--we are rated the No. 1 State in the country for health care delivery systems. Yet, our delivery systems are done at a cost which is one-third the price of what it cost on Staten Island. So this regional disparity has basically penalized States and areas that are trying to be efficient and effective in delivering their health care. Take Hawaii, for example. Hawaii has one of the highest costs of living in the country because of the fact that it is an island, and everything has to be shipped in, I guess. But at the same time Hawaiian medical care is one of the most efficient cost delivery systems in the country. So they are penalized. Those health care systems are penalized by a lower reimbursement rate. What we suggest--and this is a complicated issue--we are suggesting that as we go forward with this Choice Care proposal that we begin to level out the playing field on reimbursement so that we no longer are rewarding the inefficient, and so that the efficient receive the proper payment. We do this by not cutting anybody because we are increasing funding for Medicare throughout this period by 6 to 7 percent. We do not have to cut anything. What we are going to do is slow the rate of increase to those areas that have a much higher reimbursement and accelerate the rate of increase to those with lower reimbursement areas. As a result, we will at some point--there is a timeframe in our bill that allows for this--about 5 to 7 years from now get to a period where we have everybody in a much narrower band of reimbursement which leads to a much more efficient market. So the underlying theme here is simple. Under the Choice Care plan, which as I mentioned was adopted in significant proportions, or the concepts were adopted in significant proportions in the last budget, seniors should be given essentially the same choices that members of the Federal Government have and that the average working American has-- the ability to go out in the marketplace and choose from a variety of different health care providers. And in making that choice they should be given an incentive to be efficient. So we are going to reward them by giving them a return on the amount that they save, and at the same time we are going to say to the marketplace we are no longer going to disproportionately reward inefficient areas at the expense of efficient areas, and at the same time we are going to say to the seniors, ``You have a variety of options to choose from. But, if you want to stay where you are, and you are happy where you are, you can do that.'' So how does this help the Federal Government in the end? How does this get Medicare costs under control? It basically amounts to a major structural reform of the system. It is not playing at the edges the way the President proposes. It is a major structural reform. In the end we will have brought the marketplace into the system, we will have created an atmosphere where seniors will be looking at a variety of choices for health care, and where efficiency will be something that will have to be undertaken by the provider groups. They are going to be able to get the seniors' participation, and those seniors today who are in their fee-for-service probably are not going to opt into this overly aggressively because they were raised in the 1950's and 1960's with fee-for-service. We understand that. But what we also understand is that the coming generation of seniors has been in a workplace environment where the variety of health care service delivery system has been available to them. They are comfortable with a variety of health care delivery systems. And as such they are not going to shy away from taking advantage of the marketplace. So, as we go down the road we will get the type of savings we need. We will see that rate of growth reduced from 10 percent back to 6 or 7 percent. That is still a substantial rate of growth. Then we will have put in place something that can give us a long-term lasting hope for restructure of reform, or reform in the Medicare trust fund in order to avoid the bankruptcy. If we do not do this, the trust fund part A goes bankrupt. It is that simple. That is not acceptable. If we do not undertake structural reform, if we simply undertake the reform at the margins, like the President has proposed, we put off that bankruptcy maybe for 2, 3, or 4 years. But it still occurs. Our obligation as policymakers is to make the more fundamental broader changes that are needed for a long-term solution to this problem. And this is one major step in that direction. Mr. President, I appreciate your time and yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, I introduce a bill that will have a significant impact on the promotion of long-term investment through a reduction in the capital gains tax. I believe the Congress has a responsibility to enact laws promoting long-term capital investment and savings by all Americans. Part of fulfilling this obligation must include implementing a plan that would reduce the current capital gains tax rate on long-term investments. We must also, however, balance this important economic goal against the moral issue of adding increasing debt onto our children's shoulders. This becomes an unavoidable issue in the capital gains debate because the Joint Committee on Taxation scores capital gains a big revenue loser. This scoring issue is an unfortunate fact that we in Congress cannot ignore. Accordingly, I have developed legislation that would encourage long- term investment by amending the current capital gains tax using a sliding scale plan. My bill encourages an individual to hold an asset over a number of years, thus, allowing a greater tax reduction on investments, with the maximum benefit being reached after 4 years. It would reward individuals who look toward contributing to a savings plan over a number of years, while at the same time making quick-fix investments less attractive. This sliding scale plan would encourage investments that benefit long-term savings, such as a child's education, an individual's retirement, or other non-speculative holdings. The theory behind the sliding scale reduction on capital gains hinges upon an agreed goal: the promotion of savings and long-term investment through a capital gains cut, while recognizing our current fiscal realities. The Joint Committee on Taxation estimates this plan would lose just $7.4 billion in revenue over the 1995-2000 period. Finally, Mr. President, I ask unanimous consent that a Washington Post op-ed by Louis Lowenstein, professor of finance at Columbia University, be included in the Record. Professor Lowenstein's piece outlines the current fiscal problem this legislation attempts to address. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today to celebrate the 100th anniversary of Berlin, NH, and to introduce legislation that will assist Berlin in preserving this history. While the city of Berlin is 100 years old this year, its history goes back further. The first settlers came to Berlin for no apparent reason. They were farmers and the land there did not promise to be any more fruitful than the land they left just down the Androscoggin River; but, they were restless and independent so they came across the mountains to start a new community in this isolated area. The Plantation of Maynesborough, as Berlin was called, was named after the most illustrious of the English gentlemen to whom it was granted by the Crown in 1771. Although the land was rugged and it was a hard place to live, food was plentiful. The woods consisting of seemingly endless stands of timber were filled with deer and game; the brooks and river were loaded with trout. Those first farmers who made the move from down the river found good farmland upstream from the falls. In 1824, William Sessions cleared 5 acres of land on the east side of the river and came back in 1825 with his nephew to plant crops and build a log house. William Sessions did not stay around long enough to see Maynesborough become officially incorporated as the city of Berlin 1897, but his nephew Cyrus Wheeler did. Nearly half a century before, however, the character of Berlin began its change from farms to industry. In 1851, J.B. Brown and three other businessmen from Portland, ME, formed a partnership under the name of H. Winslow & Co. and purchased the land on top of the falls. They started a successful lumber business in the thick forest and used the natural water power of the river to power their mill. The J.B. Brown Co., saw the railroad coming to Berlin, thus, opening a direct line of transportation to Portland and market centers for the first time. In the 1920's, Berlin, NH, was the capital of the papermaking world and was becoming known as the city that trees built. The Brown family's Berlin Mills Co., controlled 3 million acres in New England and Quebec and was world renowned for cutting-edge forestry, research, and papermaking. The mills along the Androscoggin River made not only pulp and an array of paper products but also lumber, wood flour, conduit pipes, and furniture. Brown's staff of 4,000 to 5,000 swelled Berlin to a population of 20,000. The growth of Berlin reflects the diversity of people who came to stay: French Canadians, Yankees from northern New England farms, Norwegians, Italians, Irish, and Russians. They sought a chance to make a better living and found it in the mills, blacksmith shops, machine shops, farms, stores, railroad yards, and in the winter logging camps. Berlin deserves recognition for many other reasons as well. For example tupperware and the Feron Rap and Rule, the first retractable ruler, were invented in Berlin. But one aspect of the city calls for special attention: Its heritage as a leader in introducing skiing to America. Scandinavian immigrants were highly sought after by mill recruiters not only for their expertise in logging, but also because they were acquainted with long, severe winters similar to those of the North Country. They chose to develop their individual neighborhoods in clusters as did most of the immigrants. As a whole, the entire Scandinavian neighborhood was commonly known as Norwegian Village. Because of their love for winter, they, more than any other groups, forged the way for winter sports in Berlin. Both cross-country ski racing and competition ski jumping were introduced to the region by the Scandinavian community. These events were featured at many of the winter carnivals that Berlin hosted. Other than its socioeconomic forest-based heritage, Berlin is probably best known for its major contribution to the development of skiing in the country. The use of skis by newly arriving Scandinavians was at first utilitarian, winter travel around the community. In time, cross-country ski racing became popular and Berlin became known as the Cradle of Nordic Skiing in America. The Nansen Ski Club, which is named in honor of arctic explorer Fridtjof Nansen, was founded in 1872 as the Skii Klubbin. Today, it remains the oldest continuously organized ski club in the United States. Starting in the 1890's, skiers used a small hill in Norwegian Village to practice and perform their jumps. Then, in 1936, a new jump was constructed here at this site thanks to a cooperative effort between the city of Berlin and the Nansen Ski Club. This 80-meter jump has a 171.5-foot tower, a 225-foot vertical drop, and a descent angle of approximately 37.5 degrees. For almost 50 years, this was the largest ski jump in the Eastern United States and the foremost jump in the country. Also, this was the site of all major championship ski jumping competitions, as well as many Olympic tryouts. Several famous ski jumpers were competitors here including a host of Berlinites who went on to compete in the Olympics. Mr. President, I have only touched on a few of the historical aspects that make Berlin, NH, unique. The legislation that I am introducing, the Androscoggin River Valley Heritage Area Act, will establish a locally oriented commission to assist the city of Berlin in identifying and studying its region's historical and cultural assets of the past 100 years.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today to celebrate the 100th anniversary of Berlin, NH, and to introduce legislation that will assist Berlin in preserving this history. While the city of Berlin is 100 years old this year, its history goes back further. The first settlers came to Berlin for no apparent reason. They were farmers and the land there did not promise to be any more fruitful than the land they left just down the Androscoggin River; but, they were restless and independent so they came across the mountains to start a new community in this isolated area. The Plantation of Maynesborough, as Berlin was called, was named after the most illustrious of the English gentlemen to whom it was granted by the Crown in 1771. Although the land was rugged and it was a hard place to live, food was plentiful. The woods consisting of seemingly endless stands of timber were filled with deer and game; the brooks and river were loaded with trout. Those first farmers who made the move from down the river found good farmland upstream from the falls. In 1824, William Sessions cleared 5 acres of land on the east side of the river and came back in 1825 with his nephew to plant crops and build a log house. William Sessions did not stay around long enough to see Maynesborough become officially incorporated as the city of Berlin 1897, but his nephew Cyrus Wheeler did. Nearly half a century before, however, the character of Berlin began its change from farms to industry. In 1851, J.B. Brown and three other businessmen from Portland, ME, formed a partnership under the name of H. Winslow & Co. and purchased the land on top of the falls. They started a successful lumber business in the thick forest and used the natural water power of the river to power their mill. The J.B. Brown Co., saw the railroad coming to Berlin, thus, opening a direct line of transportation to Portland and market centers for the first time. In the 1920's, Berlin, NH, was the capital of the papermaking world and was becoming known as the city that trees built. The Brown family's Berlin Mills Co., controlled 3 million acres in New England and Quebec and was world renowned for cutting-edge forestry, research, and papermaking. The mills along the Androscoggin River made not only pulp and an array of paper products but also lumber, wood flour, conduit pipes, and furniture. Brown's staff of 4,000 to 5,000 swelled Berlin to a population of 20,000. The growth of Berlin reflects the diversity of people who came to stay: French Canadians, Yankees from northern New England farms, Norwegians, Italians, Irish, and Russians. They sought a chance to make a better living and found it in the mills, blacksmith shops, machine shops, farms, stores, railroad yards, and in the winter logging camps. Berlin deserves recognition for many other reasons as well. For example tupperware and the Feron Rap and Rule, the first retractable ruler, were invented in Berlin. But one aspect of the city calls for special attention: Its heritage as a leader in introducing skiing to America. Scandinavian immigrants were highly sought after by mill recruiters not only for their expertise in logging, but also because they were acquainted with long, severe winters similar to those of the North Country. They chose to develop their individual neighborhoods in clusters as did most of the immigrants. As a whole, the entire Scandinavian neighborhood was commonly known as Norwegian Village. Because of their love for winter, they, more than any other groups, forged the way for winter sports in Berlin. Both cross-country ski racing and competition ski jumping were introduced to the region by the Scandinavian community. These events were featured at many of the winter carnivals that Berlin hosted. Other than its socioeconomic forest-based heritage, Berlin is probably best known for its major contribution to the development of skiing in the country. The use of skis by newly arriving Scandinavians was at first utilitarian, winter travel around the community. In time, cross-country ski racing became popular and Berlin became known as the Cradle of Nordic Skiing in America. The Nansen Ski Club, which is named in honor of arctic explorer Fridtjof Nansen, was founded in 1872 as the Skii Klubbin. Today, it remains the oldest continuously organized ski club in the United States. Starting in the 1890's, skiers used a small hill in Norwegian Village to practice and perform their jumps. Then, in 1936, a new jump was constructed here at this site thanks to a cooperative effort between the city of Berlin and the Nansen Ski Club. This 80-meter jump has a 171.5-foot tower, a 225-foot vertical drop, and a descent angle of approximately 37.5 degrees. For almost 50 years, this was the largest ski jump in the Eastern United States and the foremost jump in the country. Also, this was the site of all major championship ski jumping competitions, as well as many Olympic tryouts. Several famous ski jumpers were competitors here including a host of Berlinites who went on to compete in the Olympics. Mr. President, I have only touched on a few of the historical aspects that make Berlin, NH, unique. The legislation that I am introducing, the Androscoggin River Valley Heritage Area Act, will establish a locally oriented commission to assist the city of Berlin in identifying and studying its region's historical and cultural assets of the past 100 years.

Mr. GREGG

Mr. GREGG. Mr. President, what we have here is a great political game. There are a lot of people who don't want a constitutional amendment to balance the budget because they don't want the Federal Government to be put under the restraint of fiscal responsibility, and they ought to step forward and say that. They should not be hiding behind the Social Security argument, because it is fallacious, as I have just mentioned. Or--here is another point--if they are going to make this point with the Social Security trust fund, that it should be outside the unified budget, that it should not be part of the budgeting process and the surplus should not be accounted for under the process, but that we create a new accounting method, which has the same effect as a practical matter, then why aren't they making the same point with the Medicare trust fund? Why? Well, I will tell you why. Because if they were to make that point with the Medicare trust fund, you would see that their argument would require them to fill a huge Medicare hole. Medicare is going broke. The trust fund is going broke. It does not have a surplus. Here is a chart that has just been put up. This chart reflects how much the Medicare trust fund is going broke. This is a bar chart, and we can see the Medicare trust fund began last year, I guess, actually, in the deficit. Then next year, it is a $48 billion deficit; in 2005, it is a $91 billion deficit, and it is a geometric progression from there, reflecting the tremendous imbalance in the Medicare trust fund, which we all know exists which, unfortunately, was denied during the election and any proposals to address it. I happen to have a couple that are fairly substantive which have been met with a bit of demagoguery. The fact is, this exists, and the question becomes, why wouldn't the practical arguments that are being made on Social Security for taking it off budget be made on the trust fund for Medicare to take it off budget? The obvious reasons are that the folks on the other side who are making this argument are not making this argument for substantive purposes, they are making it for political purposes. The politics of the situation require that they not talk about the Medicare trust fund problem, but rather that they talk about a nonexistent Social Security issue, as of today--a major Social Security issue down the road, but as of today, a nonexistent Social Security problem. But if they were to raise the Medicare issue, then they would have to ask about how they are going to address the fund question, because if you use their logic for the Medicare trust fund, they would have to come up with a proposal this year, if the balanced budget amendment were passed with the Social Security language that has been proposed, but if that Social Security language was also applied to Medicare-- Medicare being a trust fund as important to seniors as Social Security, I would argue, and, in many instances, even more important because it is a health care insurance--well, then this year they would have to come up with a proposal to bring into balance the Medicare trust fund to the tune of $48 billion--$48 billion. And that would create some significant policy questions. That is exactly what we should do, of course, and exactly what I hope we will do. But the fact is, the reason it is not being discussed in this debate is because it means you have to face up to the hard policy decisions that are involved in balancing the Medicare trust fund. So if you are going to separate the Social Security trust fund, why not separate the Medicare trust fund? The fact that they are not separated, I think, shows the political nature of this Social Security argument. So that is just a quick recitation or response, if you will, to those folks who got on the floor today giving us the Social Security sales pitch. The fact is that the initial proposal to take Social Security out of the balanced budget amendment proposal means one of two things: One, they either want to privatize the surplus and have it invested in places other than the Federal Government or, two, they are just going through a bookkeeping game, because the Federal Government will continue to borrow the money. The fact that they haven't included the Medicare trust fund only reinforces the superficiality of their position and the fact that their position is political and not substantive. There is going to be a lot more discussion about the balanced budget amendment before we get to the end of this road, before we get to a vote. We are going to hear a lot about Social Security. But I do hope that people will look beyond the language of the debate and actually look at the substance, because on the substance, the Social Security argument, as presented--the Social Security position, as presented-- does not have any legs. You could present it so it did have legs, but, in this instance, that is not the case. Mr. President, I yield back the remainder of my time. I suggest the absence of a quorum.

Mr. GREGG

Mr. GREGG. Mr. President, I rise to introduce legislation which I now send to the desk. Mr. President, I am sure that my colleagues are familiar with the report recently released by the Social Security Advisory Council. That group, appointed by HHS Secretary Donna Shalala, was charged with making recommendations as to how to place our largest and most popular program--Social Security--on a stable and secure path for the 21st century. Their recommendations have accelerated an already vigorous debate concerning the eventual course of Social Security reform. As someone who is greatly concerned about the future of Social Security, let me offer my view that we cannot afford the kind of gridlock and partisanship in rescuing that program that we have seen in the Medicare debate. It is vitally important that all of us come together to address problems of retirement security in a bipartisan way--one that involves all of the important players in this debate-- both in Congress and within the administration. My legislation, Mr. President, would simply establish an additional safeguard for the solvency of the Social Security system on which so many American senior citizens depend. Specifically, it will require the Commissioner of Social Security--at the same time each year that the Social Security trustees report to Congress on the solvency of the Social Security system--to recommend those legislative actions which the Commissioner deems necessary to place the Social Security system in long-term actuarial balance. Mr. President, I believe that there is broad bipartisan consensus about certain aspects of Social Security. Certainly there is wide bipartisan support for the view that protecting the stability and solvency of the system should be among our highest national priorities. And, most of us recognize the stark fiscal realities facing the Social Security system. I refer to the fact that according to the Social Security trustees, beginning in the year 2012, the Social Security system will face annual operating deficits, meaning that there will then be inadequate revenues coming into the system to support current benefits. From that year onward--indeed for most of the 75-year period during which actuarial solvency is measured--there is an ever widening gap between the promises of Social Security and the means available to pay for them, unless we act to change the law. It is beyond those points of agreement, however, that our bipartisan consensus breaks down. Even though we all know that it will take bipartisan action to safeguard this system, the Social Security system could well become a sharpening focus of partisan political activity. Apparently the temptations here are simply too great for politicians to resist. It is the easier--though less responsible--course to ignore the problems within the system, and to take political advantage of those who seek to repair them. We thus find ourselves in a peculiar situation. Each year, the Social Security trustees send information to Congress about Social Security's troubled future, and call upon Congress to act to restore the system to long-term solvency. Yet, at the same time, the custodians of that system--indeed, the soon-departing Social Security Commissioner herself--remain utterly silent as to how this is to be done. It is astounding to me that an individual will again be placed in charge of this most enormous and vital Government program, and yet not be required under the law to forward proposals to keep it stable and secure. Toward the end of last year, the staff of the Budget Committee were briefed by representatives of the Social Security Administration as to how they were meeting their established performance goals under the Government Performance and Results Act. One of the goals established by the Social Security Administration was to improve public confidence in Social Security. Meanwhile, no recommendations are coming from the Commissioner of Social Security as to how to justify that confidence in the long term. It is long past time to repair this discontinuity. I believe that this legislation should not be controversial. It stands to elementary reason that it should be part and parcel of the duties inherent in the position of Social Security Commissioner, to make such recommendations as are necessary to protect the future of the Social Security system. I hope that Congress will act quickly, and will pass this legislation early in this session.

Mr. GREGG

Mr. GREGG. Mr. President, I rise to introduce legislation which I now send to the desk. Mr. President, I am sure that my colleagues are familiar with the report recently released by the Social Security Advisory Council. That group, appointed by HHS Secretary Donna Shalala, was charged with making recommendations as to how to place our largest and most popular program--Social Security--on a stable and secure path for the 21st century. Their recommendations have accelerated an already vigorous debate concerning the eventual course of Social Security reform. As someone who is greatly concerned about the future of Social Security, let me offer my view that we cannot afford the kind of gridlock and partisanship in rescuing that program that we have seen in the Medicare debate. It is vitally important that all of us come together to address problems of retirement security in a bipartisan way--one that involves all of the important players in this debate-- both in Congress and within the administration. My legislation, Mr. President, would simply establish an additional safeguard for the solvency of the Social Security system on which so many American senior citizens depend. Specifically, it will require the Commissioner of Social Security--at the same time each year that the Social Security trustees report to Congress on the solvency of the Social Security system--to recommend those legislative actions which the Commissioner deems necessary to place the Social Security system in long-term actuarial balance. Mr. President, I believe that there is broad bipartisan consensus about certain aspects of Social Security. Certainly there is wide bipartisan support for the view that protecting the stability and solvency of the system should be among our highest national priorities. And, most of us recognize the stark fiscal realities facing the Social Security system. I refer to the fact that according to the Social Security trustees, beginning in the year 2012, the Social Security system will face annual operating deficits, meaning that there will then be inadequate revenues coming into the system to support current benefits. From that year onward--indeed for most of the 75-year period during which actuarial solvency is measured--there is an ever widening gap between the promises of Social Security and the means available to pay for them, unless we act to change the law. It is beyond those points of agreement, however, that our bipartisan consensus breaks down. Even though we all know that it will take bipartisan action to safeguard this system, the Social Security system could well become a sharpening focus of partisan political activity. Apparently the temptations here are simply too great for politicians to resist. It is the easier--though less responsible--course to ignore the problems within the system, and to take political advantage of those who seek to repair them. We thus find ourselves in a peculiar situation. Each year, the Social Security trustees send information to Congress about Social Security's troubled future, and call upon Congress to act to restore the system to long-term solvency. Yet, at the same time, the custodians of that system--indeed, the soon-departing Social Security Commissioner herself--remain utterly silent as to how this is to be done. It is astounding to me that an individual will again be placed in charge of this most enormous and vital Government program, and yet not be required under the law to forward proposals to keep it stable and secure. Toward the end of last year, the staff of the Budget Committee were briefed by representatives of the Social Security Administration as to how they were meeting their established performance goals under the Government Performance and Results Act. One of the goals established by the Social Security Administration was to improve public confidence in Social Security. Meanwhile, no recommendations are coming from the Commissioner of Social Security as to how to justify that confidence in the long term. It is long past time to repair this discontinuity. I believe that this legislation should not be controversial. It stands to elementary reason that it should be part and parcel of the duties inherent in the position of Social Security Commissioner, to make such recommendations as are necessary to protect the future of the Social Security system. I hope that Congress will act quickly, and will pass this legislation early in this session.