Judd Gregg

Mr. GREGG

Mr. GREGG. I yield the rest of my time back to the manager of the bill.

Mr. GREGG. At the end of my statement, I will be happy to yield for a question. The point is that Medicare is a system which is out of kilter, and that if you want to move it into a system that is in the 21st century instead of in the 1960's--which is where it is now--you It is the public sector that is failing to keep the costs under control, not the private sector. The idea that we need to nationalize the private health care system in order to get to a correction of the Medicare and Medicaid system is ridiculous. The President has, in fact, acknowledged that. Secretary Shalala, before the Budget Committee, said they were no longer perceiving that they needed comprehensive health care reform in order to get Medicare reform. They expected to have targeted--I presume they meant insurance market reform, which we will probably have down the road. All of that can be accomplished, of course, and Medicare reform can be accomplished at the same time. So we, as Republicans, are not proposing the devastation of the Medicare system. In fact, we are proposing just the opposite. This chart reflects what the trustees have told us, which is that the Medicare system is going to be bankrupt in 7 years, that there will be no system. That has to be corrected, and the senior citizens of this country will be given a system which is solvent. We have done it with a budget that happens to get in balance at the same time. Is that inconsistent or ironic? No. Statements like the minority leader made may be inconsistent or ironic. But it is fairly logical that if one of the primary reasons you are spending more than you are taking in is that you have a Medicare system on the verge of bankruptcy, when you correct that system and get that self-righted, at the same time you are going to assist in getting your budget under control, which is exactly what we end up doing--getting the budget under control--and the Medicare effort is part of that exercise. And in the process, we make the Medicare system solvent. What is it all about in the end? Very simply, it is about making sure that when our children get to the year 2015, when we pass on to them this great and wonderful Nation, that at that point, they have a Nation whose Government is not in bankruptcy; that they have a Nation which is able to sustain their prosperity the way it was able to sustain our prosperity. If we do not do that--by that, I mean the Bill Clinton postwar baby boom generation, of which I happen to be a member--we will end up being the first generation in the history of this great country that has passed less on to our children than was given to us by our parents. That is not right and it is not fair. We were sent here to do a job and that was to straighten out the fiscal house of this country. This budget does that job. And in doing that, it also addresses the fiscal house of the Medicare insurance system, which is equally destitute and insolvent. Therefore, I strongly urge the Senate to reject the amendment which has been proposed by the Senator from South Dakota. I will be happy to yield, if I have any time left, to the Senator from West Virginia for a question.

Mr. GREGG. I thank the Senator from New Mexico. I wish to simply congratulate him on his excellent brief and incidental statement because I think it summarizes a lot of the concern that many of us have as to the duplicity of this administration on the issue of Medicare and how we should address it. And I wish to get into that in some depth. Initially, I simply must respond to much of what the Democratic leader said, or some of what the Democratic leader said because I found it to be inconsistent in the extreme for him to come to the floor and make the statement, as a number of his colleagues have said, that, oh, we all now believe in a balanced budget. We all believe in a balanced budget. And, yes, we are even willing to accept the year 2002. We have heard this from a number of Members on the other side. But at the same time he gives us a litany, a litany of areas where we can take no action, of areas where we must spend more money. He gives us no suggestions as to how they would get to this balanced budget. There is no program from that side. There is no budget. There is no proposal. All we had was the President's proposal and the President's proposal, as we now recognize, has been rejected by everyone in this Chamber who voted, the 99 Senators who were present. The President's proposal was rejected because, on its face, it was outrageous. It presented a budget which would have given us deficits of $200 billion or more for as far as the eye can see. It would have added $1.8 trillion of new debt to our children's backs over the next years. And it did not in the slightest way even address the core issues of what are confronting this country in the area of fiscal policy, which are the issues of how we manage Federal spending in the area of the entitlement accounts. It did not have one suggestion in the entire budget on that issue, even though some of the leaders in his administration have said that that is the core concern and even though he, 2 years ago now or a year and a half ago, said that that was a major concern, as the statement from Senator Domenici so adequately reflected. So I think it is critical for those who are following this debate to understand the inherent and incontrovertible inconsistency of the Democratic leader's [[Page S6969]] statement--that they are for a balanced budget, but do not touch anything that is important, do not touch anything that we deem to be critical, do not try to reform a system which is so out of control that it has generated this huge deficit and debt that is bankrupting our country. And if we are talking about a commitment to a better standard of living for our children, nothing could be more critical to a commitment to a better standard of living for our children than to bring under the control the debt of this country and the deficit. I brought along a chart to reflect that fact. This is the critical issue of this debate. This is why we, as Republicans, have brought forth a budget which is in balance. It is because if you look at what is going to happen to the Federal Government in the spending we are undertaking, we are on a nosedive to bankruptcy, which we are going to end up passing on to our children. The blue squares represent discretionary spending, the yellow squares represent interest payments, and the red squares represent spending on entitlements. The green line is the revenues of the Federal Government, which have been fairly constant over the last few years. If you notice--and these are numbers which come from CBO--if you will notice, beginning in about the year 2010, our Federal Government, because of the explosion in spending we have undertaken as a Government, will only be able to pay for entitlement spending and interest on the Federal debt. That means all the discretionary spending will not be affordable--things like national defense, libraries, roads, education, things the minority leader was talking about, things which we are concerned about. Then around the year 2015, we will not be able to pay interest on the Federal debt. What does that mean? That means we are bankrupt; that we, as a nation, are insolvent. That means our children will be living in a country like our unfortunate neighbor of Mexico, which does not have the capacity to pay for the cost of the burden for carrying its own debt. What happens at that point? Well, our children's futures become destroyed because the country will either have to go through some huge economic calamity or else it will have to inflate the economy so much that the dollar will be virtually valueless. So we, as Republicans, recognize this. We accept the fact that something has to be done about this, and we have put forward a budget which gets us to balance over the next 7 years. This is our budget line, the black line. It goes to balance over the next 7 years. This is the President's line, the purple line, estimated by CBO. This is what he told us it was, but he would not use CBO figures, even though he said he was going to. Even as he told us, we still have a huge gap, $1.8 trillion of new debt added to our children's backs as a result of the President's proposal. But if we get on the course of this budget, we will get this under control and we will have us down to balance in 7 years, which is the obligation that we owe our children. And there is something else that should be noted. When we get out to this point here, get out to this point here, there is, of course, another way that you could address all this Federal spending. You could tax people. What does the President's budget--not of this year, because he did not want to put this number in--but of last year tell us the tax rate on all Americans would be in order to bear a Government of this size? It would be 82 percent; 82 percent of everybody's income in this country would have to go to the Government in order to bear the burden of the Government if we allow it to continue to grow at that rate. Obviously, we cannot afford that. Now, a large part of this debate has been about the issue of Medicare. And, boy, there has been some significant misinformation about that issue floated around here. And I am glad the Senator from New Mexico started out by pointing out the distinct difference between what President Clinton said a year and a half ago and what he is saying today about the Republican efforts in this area. But I think it is important to start on this issue with what the problem is. The problem is pretty clear. It was not defined by us. It was not defined by myself or the Republicans, or the Democrats, for that matter. It was defined by the trustees of the Medicare trust fund, ironically, four of whom were appointed by the President of the United States and are members of his Cabinet, including Donna Shalala, Secretary of HHS, and Secretary Rubin. And the problem is that the Medicare trust fund is going bankrupt on a much faster time track than the country, in fact, and it will be bankrupt, according to the trustees in the very near future. They are telling us--and this is the trustees' report--that ``the Medicare program is clearly unstable unsustainable in its present form.'' Why are they saying that? Because of this chart here. This is the fund of the Medicare trust fund. It goes into bankruptcy in the year 2002. Beginning in about next year, it starts to draw more out of the trust fund than goes in. What is the practical effect of bankruptcy of the Medicare insurance trust fund? It is that there is no health insurance for our senior citizens. None. Because, under the law, they cannot pay out health insurance proceeds if they have no sources to pay it from. And the trust becomes bankrupt and does not have any sources in the year 2002. Now I suppose the Democratic position or the President's position now appears to be, ``Well, let's wait until the year 2002 and face the problem then.'' That only compounds the problem if you do that, of course. It is much more logical, as the President suggested a year and a half ago, to address it and address it in a constructive and thoughtful way, which is the proposal we have put forward in this budget specifically to do that. Now there has been a lot of debate about the number necessary to get this trust fund into actuarial solvency, and the fact that this number that we have in our budget is somehow outrageous, the number of $256 billion of adjustment in this fund over the next 7 years, which is the number that we feel will put this fund in some form of solvency and assure that seniors have health insurance, which is our goal, to give seniors health insurance and make sure they have a health insurance fund. Now we heard the leader come down here and say that this idea of addressing the insurance trust fund by adjusting it by $256 billion over the next 10 years, or Medicare by that amount, is a number that is just outrageous and not obtainable and is a ridiculous number. Well, let me refer them to the number that came from Secretary Donna Shalala and Secretary Rubin and the other members of the trustees of the Medicare trust fund. Their number was, in order to get actuarial solvency in the health trust fund over the next 5 years, we would have to adjust it by $262 billion. That is in 2 years. Remember, ours is 7 years. And, over 7 years, to get actuarial solvency, we would have to adjust it by $387 billion. So the number that we are talking about, which is $256 billion, approximately, over a 7-year period, is clearly in the ballpark of the numbers which are being given to us by the people who are responsible for managing this fund, although there is obviously a merger of A and B trust fund issues, which is a really complex issue. In any event, the numbers are clearly in the same ball park. So the idea that our adjustment is unreasonable or our proposal is unreasonable in this area is just a lot more smoke and mirrors that we are hearing from the other side as they attempt to dance around the basic responsibility that we have, which is to assure solvency in this trust fund. So Members on our side have put forward a proposal which, remember, does not cut Medicare funding. In fact, it allows Medicare funding, as Senator Domenici noted earlier, to grow at about 7 percent. This shows 6 percent. We actually ended up with about 7 percent. Today, the Medicare trust funds are growing--the rate of growth of the cost of health care costs is around 10.5 percent. That is three times the rate of growth of inflation in this country today. You might say, ``It's health care; therefore, it has to grow faster than inflation.'' Let me simply note that last year in the private sector, the health care inflation rate was actually a negative number. It was about negative 1.9 [[Page S6970]] percent for the rate of growth of premium costs in health care last year in the private sector. So not only is it three times faster than the basic inflation rate in the economy, 10.5 percent, the rate of growth of Medicare costs, but it is actually 10 times the rate of growth of health care inflation generally in the private sector. So it is explosive, and it is clearly not sustainable. It is not sustainable from the standpoint of financial viability of our country. More important, it is not sustainable from the viewpoint of having a trust fund that is solvent and having a health care system for our seniors that is solvent. What we are suggesting is not radical or unreasonable. We are suggesting a response which was in the same frame of reference as what the trustees are talking about. We are talking about slowing the rate of growth of the Medicare trust funds from 10.5 percent down to approximately 7 percent--7 percent rate of growth. Is that unreasonable? I do not think so. It represents twice the rate of growth of inflation generally and seven times the rate of growth in health care insurance premiums in the private sector. As was noted by the chart put up by Senator Domenici, it happens to be the same number that back in 1993 President Clinton thought was pretty reasonable. Not only did he think it was reasonable, but Hillary Clinton, his wife, thought it was fairly reasonable. She said: We feel confident we can reduce the rate of increase in Medicare without undermining the quality of Medicare recipients. And Ira Magaziner, her guru of health care, said: Slowing the rate of growth actually benefits beneficiaries considerably because it slows the rate of growth of premiums they have to pay. So the administration, a year and a half ago, when they were not thinking about reelection so aggressively, was talking about slowing the rate of growth of the health care fund, just about what we were talking about today. Maybe they were going to slow it a little more, in fact, if you look at their numbers. So what is the practical application of how do you get to a 7-percent rate of growth, because that is where the rubber hits the road. Who is going to be impacted? Who is going to be affected? Who is going to have to take the slowing down? Basically, what we have seen in the private sector is that as the marketplace is changed and health care delivery has moved into the 1990's and on, that the manner in which health care is delivered has changed and, as a result, we have seen more efficiencies in health care delivery, and that is why the price of health care has gone down, that is why we have seen the inflation rate in the private sector drop. What we are going to suggest as a party, and we think it is fairly reasonable, is that we take the public health care insurance system and apply to it some of the same attitudes and approaches that are being used today in the private sector. We are essentially going to say to senior citizens, ``We're going to give you more choices,'' because that is what has driven the price of health care down in the private sector--competition, choices--and in giving seniors more choices, we are going to not force them into other programs, we will make it voluntary. For example, I have a proposal--it may not be the one finally adopted, but I think it makes sense--which says to senior citizens: ``You essentially will have the same choices that I, as a Member of Congress have, or other Federal employees have. You don't have that choice today.'' Most seniors are in fee for service, the most expensive form of health care. They are in fee for service because they grew up that way in the fifties, sixties, even in the seventies. The only way we delivered health care in this country was fee for service. You had your doctor, you dealt with your personal doctor, but it is the most expensive form of medicine. Ninety percent of seniors are in a fee-for- service approach to medicine. What I suggest in the proposal I have put forward, basically the proposal we are talking about generally, is that seniors be given a choice, not only to use fee for service, but to use other forms of health care, health care which is less costly in its rate of growth but delivers just as good health care--managed care, fixed-cost care, PPO's, HMO's, things that most Americans, especially in the private sector, are familiar with today. We are not saying to seniors, ``You have to go into a PPO or HMO.'' We are going to say, ``Listen, if in your area of the country it costs $5,000 a year to take care of your fee-for-service health care, then, senior citizen, to the extent that you can go out in the private sector and you can buy a health care system which delivers you the same basic benefits package, and maybe even more because there will be competition there, but for less, let's say it is for $4,500, we will let you keep 75 percent of the savings. Seventy-five percent of that $500 savings will go to you.'' So there will be a significant economic incentive to senior citizens to move from fee for service into managed care, if they decide to do so--they do not have to do it--if they decide to do so. That type of approach creates three different positive events. No. 1, it gives senior citizens the opportunity to look at other health care plans and gives them a financial incentive to do it and, obviously, health care incentives to do it. No. 2, it creates in the marketplace competition. It means a lot of different plans are going to come forward that we cannot even imagine, because the marketplace is much more imaginative than the Government, and we will propose different approaches to caring for seniors, things that are attractive to one senior group over other seniors--one for eyeglasses, for drugs, one might take out the part B premium. Who knows; there will be a lot of variables, a lot of options. And No. 3, it gives the Federal Government a fixed cost over an extended period of time as to how much health care is going to inflate. It is only reasonable to assume, although obviously difficult to score, that that fixed cost is going to track fairly closely to what has happened in the private sector. In the private sector, what we have seen is there has been a 50-percent drop in the inflation rate in relationship to the amount of people going into HMO's and fixed-cost- based health care plans, and we may not get that precipitous a drop, but we do not have to, because all we are looking for is a 3-percent drop in the inflation rate. We are not looking to reduce the inflation rate down to zero, as has happened in the private sector. We are looking to reduce it just twice the rate of growth of the inflation rate, a 7-percent rate. It is very reasonable that we will get that number. There are ways to assure we can score that number, and we make those proposals in our package. So what we are talking about is not limiting seniors' opportunities, we are talking about giving them more choices, more chances to go to the marketplace and find better care, types of care that will be more attractive to them and more appropriate to their personal position. In the process, we hope to get these types of reductions in the inflation rate that the Federal Government is paying. Is this not reasonable? I suggest to you that the President thought it was reasonable a year and a half ago; that Ira Magaziner thought it was reasonable a year and a half ago; that Hillary Clinton thought it was reasonable a year and a half ago. What has happened? The argument is, ``Well, this isn't part of a comprehensive health care reform.'' I remember comprehensive health care, and I am sure you do, too. That is this chart here where the Federal Government comes in and takes over the private sector. I do not think we have to do this in order to get Medicare's inflation rate down to twice the rate of inflation in the private sector. I do not think we need to have comprehensive health care reform, and I think that has been shown by a number of factors.

Mr. GREGG. A half-hour.

Mr. GREGG. A half-hour.

Mr. GREGG

Mr. GREGG. Mr. President, it was my understanding that by 9:15, we would go to a statement by Senator Dodd on your side.

Mr. GREGG. No.

Mr. GREGG. There were not any amendments offered as to how to get to a balanced budget.

Mr. GREGG. Mr. President, what is the time situation?

Mr. GREGG. I was just wondering, if I might ask the Senator from Connecticut, if it is the request of the Senator that we offer the President's budget next week as our second amendment?

Mr. GREGG. Mr. President, if the Senator from Pennsylvania will yield, he has put it absolutely correctly. Of those worthy amendments, the vast majority of amendments--I have forgotten the number, 17 amendments--offered by the members of the Democratic Party on the Budget Committee, and everyone wanted to spend the dividend, which results from the lower interest rates as a result of getting to a balanced budget.

Mr. GREGG. Mr. President, I yield the Senator from Colorado an additional minute.

Mr. GREGG. I yield the Senator from Colorado 5 minutes.

Mr. GREGG. I simply say we were looking forward with great enthusiasm to hearing the Senator from Wisconsin and also the Senator from Connecticut, and whatever order the leader of the Democratic side, the manager of the bill on the Democrat Party side, wishes to go forward with, that is fine with this side. We were just trying to get clarification of what was happening as to the priorities as we understood the gentlemen's agreement. [[Page S6953]]

Mr. GREGG. Mr. President, parliamentary inquiry.

Mr. GREGG

Mr. GREGG. Mr. President, will the Senator from Washington yield for a question?

Mr. GREGG. To the Senator from Washington, is it not my understanding that this budget resolution brought forward by the Republican Senate Members on the Budget Committee, for which no Democrats voted, has in it language which says that to the extent there is this tax cut as a result of the bonus that would occur to the American people by getting to a balanced budget, the dividend occurs as a result of interest rates coming down, this $170 billion tax cut--and as the Senator points out the actual bonus to the American people would be lower interest rates on everything, and it would represent billions and billions of dollars in savings to the American people. But if that happens, does this resolution state that 90 percent of this tax cut, to the extent it is instituted, should go to people with incomes under $100,000? And is that the new definition of wealthy from the other side of the aisle, people with incomes over $100,000?

Mr. GREGG

Mr. GREGG. Mr. President, I ask my Senate colleagues to join me in recognizing the city of Franklin, NH, on the occasion of its centennial and in appreciation of the contributions its citizens have made to our Nation. Founded at a gathering spot of the Penacook Tribe, where the Pemigewasset and Winnipesaukee Rivers meet to form the Merrimack River, Franklin proudly traces its roots deep into the history of our State and our Nation. It is here, at the original settlement of Lower Falls, where Franklin's most famous native son, Daniel Webster, would commence a career as lawyer and statesman and, eventually, go on to establish both an honored place in this Senate and a prominent role in the shaping of America. From this settlement, Capt. Ebenezer Webster, Daniel's father, would lead a company of local men to earn distinction in the Revolutionary War and help win the independence of a new nation. Their heroics during the campaign at Saratoga begins an unbroken line of Franklin's sons and daughters serving our Nation and the cause of liberty with honor, loyalty, and valor. Successful in commerce, Franklin was incorporated as a town in 1828 and as the city of Franklin in 1895. The historic mill town would give rise to the engineering ingenuity of Boston John Clark and the technological innovations of Walter Aiken and make significant economic contributions to our society. Spurring inventions from the deceptively simple hacksaw and the latch needle to the complexity of the circular knitting machine, Franklin would again play a pivotal role in the second industrial revolution, which propelled us forward as a modern nation. Today, the city of Franklin continues to exhibit the character and enterprise of its distinguished past. Hardworking, first in citizenship, and steadfast in its sense of community, Franklin continues to show the can-do spirit that marked its beginnings and first 100 years as a city. Recently, named one of the 100 best small communities in America, a base for advanced industry, rich in heritage, and energetic in shaping its future, Franklin is truly a ``Small City on the Move.'' Join me to proudly salute Franklin, NH, the birthplace of Daniel Webster, and the enterprising spirit that has enriched a community, the State of New Hampshire, and our Nation.

Mr. GREGG

Mr. GREGG. Thank you, Mr. President. I want to take this opportunity today to talk a little bit about what is going to happen relative to the budget of this country as we move forward through the next couple of months when we are taking up key issues involving the budget, and to talk a little bit about Medicare, which is obviously an issue of considerable concern for our senior citizens and of equal concern for those of us who served in the Senate and in the House of Representatives as we move through the process of trying to restructure, first, the budget of the country to put us into solvency and, second, to make sure that the Medicare system remains solvent, and that our seniors will be able to benefit from this, the largest insurance program in the Nation. As I think everybody knows, this country faces some fairly significant crises in the coming years over the issue of the deficit. In fact, if we continue on our present course, it is projected that by about 2015, or thereabouts, this Nation will essentially end up in bankruptcy. It will be a bankruptcy which had been generated primarily by the fact that we, as a Government, have failed to address the spending side of the ledger of the Federal budget. It will also be a bankruptcy which passes on to our children a Nation where their chances for opportunity, their chances for a lifestyle which is prosperous, is essentially eliminated. Unfortunately, if we do not take action soon, we will end up like Mexico is today; we will be a Nation unable to pay its bills. This is not fair or right, as I have said on a number of occasions on this floor. In fact, the way I have characterized it is--and I have talked about the postwar baby boom generation, the Bill Clinton generation--we will be the first generation in the history of this great and wonderful country to pass less on to our children than was given to us by our parents. Such an action cannot occur and should not occur. It is not right and it is not fair. We need to address the issue of the deficit. In order to do this, it is, I think, informative to look at some of the proposals that are on the table and which have been evaluated by various agencies which review the deficit. Each year, the Congressional Budget Office subjects the President's budget to its own independent analysis. It then publishes the analysis in a little book, the latest version of which was released last week. It is this blue book here. This is a very significant document because, as you will recall, when the President was elected, during his first speech to the Congress he stated he would use CBO as the fair and honest arbiter of the numbers of his budget. This year, CBO has found some highly significant differences between what the President said will happen under his budget and what CBO believes will actually occur. If you will recall, in February, when the President's budget was shown--when it was first delivered--it showed basically a steady state of deficits of $200 billion each year for as far as the eye can see; $200 billion a year, basically until the end of the budget cycle and beyond, with no progress toward a balanced budget, but at least no deterioration from the present position, which was pretty bad. It would have added, for example, a trillion dollars of new debt to the Federal deficit over the next 5 years. CBO, however, says that this is not true; the President's budget is not accurate. CBO's analysis found that the President's budget proposal would actually cause the deficit to climb by $100 billion over the next 5 years. From $177 billion in the year 1996 to $276 billion in the year 2000. This chart here shows this problem. This is the President's budget as he proposed it. This would be balanced down here. There would be $200 billion deficits for as far as the eye could see. But CBO has taken a look at the President's budget and found that not only is he giving us a $200 billion deficit for as far as the eye could see, it appears that it is now on an upward trend and well above $200 billion. In other words, the President's budget will actually result in adding $1.2 trillion of new debt to the national debt over the next 5 years. That is on top of the $4.8 trillion which we already owe as a country, and it is debt which our children will have to pay. It is debt which is going to finance current expenses which we are undertaking. The President's budget, it seems, was subject to some unfair criticism back in February, in fact. Republicans--and I must include myself among them--and some Democrats criticized it as a do-nothing budget. Well, now it appears that it is not a do-nothing budget, it is a make-things-worse budget. Congress also received some additional information which is fairly significant in the last couple of weeks. It received a report from the trustees of the Social Security and Medicare trust fund. That is this report here. This is important because the trustees of the Medicare trust fund are independent individuals who are given the obligation of managing the Social Security and the trust fund program and who are theoretically, outside the political process, although three of them are political appointees. For those who do not know that, the trustees include, for example, the Secretary of the Treasury, the Secretary of Labor and Human Resources, the Commissioner of Social Security, the Administrator of Health Care Financing Administration. In addition, there are two public trustees. These two are not administration officials, but private citizens, who were appointed to their positions. The alarming nature of this year's report results from the trustees' telling that the Medicare system is in a full-blown crisis, that it will go bankrupt in just 7 years if we do not take decisive action to fix it. Let me show another chart which reflects the seriousness of this situation. This is the hospital trust fund, Medicare. As we see under the present scenario, it is solvent. Beginning in about the year 1997, it starts to have a negative cash flow, and by the year 2002, 2003, or 2004 it goes into deficit. In other words, it becomes bankrupt. This is the most important trust fund after Social Security that we deal with as a nation. The Medicare trustees are saying that the trust fund will confront a negative cash flow in just 2 years. This means that the Medicare program will be spending more than the Medicare payroll tax brings in. The Medicare will go insolvent in 7 years, or the year 2002. That is, the trust fund will not only have a negative cash flow, but that it will also have spent all the surplus reserves that it has accumulated. In other words, it will be bankrupt. ``It is important to remember,'' the trustees said, ``that under present law there is no authority to pay insurance benefits if the assets of the hospital trust fund are depleted.'' That means at this point, when we cross this line, there will be no money to pay for health care for senior citizens. Medicare benefits would simply be cut off, or seniors would have to fend for themselves for their health care. While Congress would probably do something about that, right now the state of the law is that in the year 2002 senior citizens will have no health care insurance. How big is the Medicare financial problem? The trustees report says the following: Short term, to restore actuarial balance over the next 25 years, an immediate payroll benefits would have to be reduced in a comparable fashion. That 1.3 percent translates into $263 billion over 5 years or $387 billion over 8 years. In the long term, to restore balance over a 75-year period, the payroll tax would have to be hiked 3.5 percent immediately or a cut in benefits would have to be made that is comparable. That translates into $565 billion over 5 years or $1.1 trillion over 7 years. These are the numbers required to restore actuarial balance. But these figures give an idea of the magnitude of the problem that Medicare confronts. Another important element of this year's Medicare trustees report is that the public trustees--the citizen trustees, not the Clinton administration trustees--took the highly unusual step of including their own message, a dissent, in the statement. This statement sounds much more urgent and alarming than the overall report. Remember, it was given by the independent folks who serve in this commission. And the overall report is pretty severe. The public trustees begin the message by saying there has been an acceleration of the deterioration of the trust fund. They say that the deterioration results from some unforeseen events, but also from the absence of prompt action in response to clear warnings that changes are necessary. Here they are basically scolding the Congress. They are saying, ``We have been telling you of this problem for some time but you have ignored it. But you have a major crisis on your hands now and you can't delay any longer.'' The trustees also go on to say two things which are rather striking, and I have had them reproduced here because they are so significant. They say: ``The Medicare Program is clearly unsustainable in its present form.'' Unsustainable in its present form. They also say, and this is the independent trustees speaking: ``We strongly recommend that the crisis presented by the financial condition of the Medicare trust funds be urgently addressed on a comprehensive basis, including a review of the program's financing methods, benefit provisions, and delivery mechanisms.'' In other words, the Medicare Program is insolvent, is bankrupt, and it is unsustainable in its present form. It has to be restructured. In light of these two reports, the CBO report and the Medicare trustees report, Congress really confronts what I would call a political gut check. Are we going to try to save the Medicare system and balance the budget despite the political demagoguery that will surely result? Are we going to do these things in the face of a President who has basically washed his hands of both problems and taken the Pontius Pilate approach to budgeting, Pontius Pilate approach to Medicare, washed his hands and said there is no problem and walked off the stage? Or are we going to pursue politics as usual and just pretend for another year there is no problem at all? For my part, I believe we must reject the politics as usual and move decisively to restore this country's fiscal standing. We must do so to save the Medicare trust fund and to assure our seniors that they have a health insurance plan that is solvent, and we must do so to balance the budget, whether or not we get the President's help. Why? Because it is the right thing to do. It is the necessary thing to do. Quite simply, it is our job to do it. First, we must save the Medicare trust fund from bankruptcy. To do this we must pursue two tracks. We must make some changes to head off the bankruptcy in the year 2002 and restore the short-term solvency, and we must also undertake some structural improvements so that the Medicare trust fund remains sustainable into the next century. This involves some immediate adjustments, and it involves opening up the system to market-based incentives. We must follow the lead of the private sector and allow senior citizens to choose from a wide variety of health care plans, including traditional Medicare. If we allow seniors to have a wide variety of choices similar to those that we have as Members of Congress or as Federal employees, then the Medicare inflation will come under control and we will be able for bring this system into solvency. This can be done by giving our seniors choice. We can do it not by cutting Medicare. We do not have to cut spending on Medicare. All we need to do is reduce its rate of growth. Last year, the Medicare trust fund and the Medicaid fund, which is a separate fund and is a welfare fund, both grew at 10.5 percent, three times the rate of inflation in the economy. It happens to be 10 times the rate of inflation in the private sector health care arena, which actually dropped last year as a rate of growth. They had a minus 1.9 percent inflation rate. Obviously, we cannot sustain double-digit inflation rates in the Medicare accounts. But we could sustain a growth rate which was as high as 7-percent, or twice the rate of inflation, and seven times the rate of inflation in the private sector health care accounts. We can obtain that goal of reaching a 7 percent rate of growth in Medicare by giving seniors more choice and creating a market-place incentive for them to move into health care provider proposals which are more cost efficient. I have laid out a fairly significant program to do that, and have talked about it before on the floor. Along with moving to resolve the bankruptcy of the Medicare system, we also must act decisively to resolve the problem with the deficit and the Federal budget. We must not only save Medicare but we must reform the rest of Government as well, because we must be able to pass on to our children a country which is solvent. This can be done by improving the way the Government delivers its services. Welfare, including Medicaid, has some of the fastest growing programs of the Federal Government but they are also some of the areas where the Federal Government has had its biggest experiences of failure. In fact, if there is one item you can point to in the liberal welfare state as having been a failure over the last 40 years, it is welfare itself. It has created generations of dependency and despondency: People who are locked into a system from which they cannot escape; people who should not be in the system who are in the system; people who should be getting assistance who are not getting assistance. We must admit that the status quo of the welfare system, and the Medicaid system, for that matter, which is part of it, is indefensible. We must move the responsibility for these programs and the power to administer these programs back to the States through using flexible funds and returning the dollars and the authority over these programs to the States. This loss of power on the Federal level will upset a lot of people around here and there will be a lot of shrill rhetoric. But the basis of that rhetoric will be the concern for loss of power. We will hear it couched in terms of compassion. We will hear this outrageous statement, which is so often made by some of my colleagues on the left, that State Governors and State legislatures and town governance individuals do not have the compassion or the knowledge to manage these programs; that somehow, the knowledge to manage these programs is uniquely retained in a few bureaucrats here in Washington and their assistants here on the floor of the Senate and in the House of Representatives. But that argument of compassion is, as we all know, a smokescreen for the real argument or the real concern, which is one of power. Controlling the dollars and controlling the programs means controlling people and having power. There are many Members around this arena who do not wish to give up the power of the purse or the power of the programs. But if we are to get better programs--better managed, more efficiently managed, delivering better services--the way to do that is to return the responsibility to the States and to the communities along with the dollars that support those programs. So in the welfare and Medicaid accounts, we can do both. In fact, the Governors have come forward and suggested to us that they will take over these programs and they will take them over at a fixed price. They will deliver these programs and deliver them even better than we do because they know how to deliver them and they have the flexibility to deliver them if we will simply give them the authority to do that. And, in doing program. We also need to address other entitlements. For example, the Federal retirement program is one of the largest categories of entitlements. It cannot escape reform as we undertake a fair and balanced approach to entitlement reform. The American taxpayers bear the full cost of Federal retirees' annual COLA adjustments, a feature that virtually no private pension plan shares and that was not part of the Government's original retirement contract with Federal workers, and we must do something to control that growth. There are innumerable--literally hundreds--of smaller entitlement programs, including some popular ones in the area of agriculture, unemployment compensation, and a variety of others. But all of these should be put under the microscope of review and we should ask the questions: Do they work? Should they continue to exist? Can they be improved? If we ask those questions, we will find in all instances the answer is they can be improved, and they can be delivered more efficiently and for less cost. While balancing the budget will mean examining the operation of some sacred political cows, it can be done. While in some cases we will decide that the Federal Government just cannot afford to continue funding some activities, in most cases entitlement reform will simply result in better Government being delivered, probably, to more people. Unfortunately, however, it appears that the Congress will have to go it alone. The President is offering absolutely no help. In fact, as the CBO report and the President's recent appearances tell us, his actions seem to be just making things worse. Just when the national predicament calls out for strong fiscal leadership, the President is doing exactly the opposite. He is telling every interest group he appears before that they deserve more money. He just told the Iowa farmers that they need to spend more money on pigs, more pork. It really is outrageous. Still, Congress must forge ahead. We must act to preserve the Medicare system so our seniors are not faced with a bankruptcy, which cannot be debated, and which has been predicted by their trustees, so that they will have an insurance trust fund that is there for them and for the next generation. We must act to preserve our children's future by moving to balance the budget by the year 2002. These will not be an easy 2 months as we go through the process of accomplishing these goals. We will have to make serious and difficult decisions. But I hope this Congress will not take the course that the President has and walk away from the matter. We need to undertake this issue of bringing solvency into the Medicare fund for the benefit of our seniors. We need to undertake balancing the budget for the benefit of our children. Mr. President, I yield the floor.

Mr. GREGG

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

Mr. GREGG. Mr. President, I ask unanimous consent that I be allowed to proceed as in morning business for approximately a half hour.

Mr. GREGG

Mr. GREGG. Madam President, I wish to address the underlying legislation and also generally about how we stand in this budget process, because obviously this piece of legislation has an impact on the budgets generally. We are about to break here for a couple of weeks, and when we return from this break, we will have a chance to debate the basic budget resolution before the Congress. This rescission package which we are presently taking up is sort of a precursor to that whole debate, the budget resolution of the Congress. What it all comes down to is an issue of how we preserve the American dream for our children. What this debate is about is whether or not we are going to start putting fiscal discipline into the Congress and into the Federal Government in a manner which will allow Members to avoid an economic catastrophe which is looming over the horizon and which, unfortunately, our children will be the recipient of. amount of debt which the Federal Government is running up, we will essentially pass on to the next generation a nation which is bankrupt. In fact, the national debt today stands at about $5 trillion. It will stand at about $8 trillion by the year 2010. Today, about every American owes about $19,000 if we take the national debt and divide it by the number of Americans. As a result, we are essentially creating a situation where the next generation will not have the capacity for paying the costs of Government which has been passed on to them by our generation. We will be the first generation--talking about the postwar baby boom generations that dominates the membership of this Congress-- we will be the first generation in the history of this great country which passes less on to our children than was given by our parents. The opportunity to survive and have a lucrative and a prosperous lifestyle will essentially have been snuffed out for our children by our actions. Federal taxes today consume about 25 percent of the median income of an American. In the year 1970 it was only 16 percent. Combined Federal and State taxes consume about 50 percent of the incomes of an average American. That is today. That is a huge amount of money. By the time that our children begin to earn and produce, unless we get control over the growth of the Government, taxes will consume 84 percent--84 percent of their income. Now, that is not my number. I did not come up with that number. That was a number that was actually in the President's prior budget, not in the one he presented this year but the one he presented a year ago. He took it out of this year's budget, I suspect, because it was such a startling number he did not want to disclose it again. Madam President, 84 percent of all the earnings of all Americans will be absorbed simply to pay for the Government as we move into the beginning of the next century unless we do something, unless we begin to bring under control the rate of growth of our Federal Government. The current spending policies of this Government also directly affects the cost of doing business and the cost of living in this country. For example, the national debt adds nearly 2 percent to interest rates, and that, of course, directly affects everyone's lifestyle. For example, those 2 percent in additional interest points represents $900 on the cost of financing a $15,000 car and represents $37,000 on the cost of financing a $75,000 house. CBO has projected that interest rates would fall, however, if we were able to bring under control Federal spending. In fact, if we were able to balance the budget and put in place a balanced budget, interest rates would fall by fully 1 percent. In addition, we know if we look into the outyears, what is driving this deficit, what is driving this rate of growth of the Federal Government is entitlement spending. It is not that this country is essentially an undertaxed country, it is not that the people of this Nation do not pay enough in taxes, it is that the people of this country are being asked to spend too much by the Federal Government. This chart reflects that, and the problem. The green line, which is hard to see, which runs across the middle of the chart, shows what the revenues of the Federal Government are, as we project out into the future years what they have been since 1970 and what they are as we project in future years. The blue spaces represent discretionary spending. The yellow space represents interest on the Federal debt. And the red space represents entitlement spending. What this chart essentially says is by the year 2010, we as a Government are going to be spending so much on entitlement programs and interest on the Federal debt that it will absorb all the revenues of the Federal Government. We will not be able to pay for things like national defense, education, roads, libraries, all the services which are discretionary spending. Unless, of course, we wish to tax people at 84 percent of their earnings. Then, around about the year 2015, what this chart essentially says is that because of the force of the cost and the rate of growth of the cost of entitlement spending, this country essentially goes bankrupt. Ironically, the Medicare system, which is one of the major entitlement programs and which is the primary health care system for senior citizens, that goes bankrupt in about the year 2002, around here. But as a result of demographics and the fact that a large number of citizens in the postwar baby boom generation become senior citizens beginning in about the year 2007, and that group starts to peak around the year 2020, as a result of the huge number of people then receiving benefits under things like Social Security and Medicare, the whole country essentially goes bankrupt in about the year 2015. We end up like Mexico, essentially, a country unable to pay for the operation of its Government and unable to secure or provide a prosperous lifestyle for its people. All of this occurs not as a result of the fact that people in this country are not paying enough taxes. You would believe they are not paying enough taxes if you listen to many of the Members on the other side of the aisle, that simply raising taxes will address this issue. But that is not the case. As the next chart shows, all of this occurs because we are simply spending too much money. Taxes have remained fairly constant over the last 20 years and will remain constant over the next 20 years as a percent of our national income. But spending has gone up dramatically and stays up and then goes up even more dramatically as we head into the outyears. So it is spending that we must address and addressing the issue of spending we must also address the entitlement spending. How has the other side decided to do this? How has the President and his party approached this issue? The President sent us a budget about a month ago which projected $200 billion deficits for as far as the eye could see--$200 billion deficits. It added $1 trillion of new debt, just in the next 5 years, to our children's shoulders. It made no major proposals to control any costs in any of the entitlement programs. Imagine that. Entitlement spending makes up 60 percent of the Federal accounts--60 percent. And not one proposal was made in the President's budget to address any of the entitlement accounts. It was, to say the least, a political document--not designed to address the substance of the major issue confronting this country, which is the fiscal viability of our children's future; not designed to address the fact that we are facing an impending bankruptcy in the Medicare system and a bankruptcy of this Nation for our next generation--but a budget designed to get reelected in 2 years from now. I call it the Pontius Pilate school of budgeting. Essentially, the President and his party washed their hands of the issue of addressing the deficit and the issue of controlling spending and the issue of how we protect our children's future, and walked off into the distance and said they would give us $200 billion deficits for as far as the eye can see. This, in my opinion, was an outrage, an inexcusable act, and one which clearly did not reflect the need to manage this Government correctly and to face up to what is the most significant issue we as a Government confront. On the other side, we, as Republicans, have proposed substantive proposals to address this deficit problem. Today we are taking up this rescission bill. It represents specific reductions in spending for the next 6 months, the balance of this fiscal year, reductions in spending which actually exceed in 6 months what the President has allegedly sent up to us over 6 years. He suggested another $13 billion in spending cuts. We are proposing $13 billion more--more than $13 billion in spending cuts in the next 6 months. He is talking about it over the next 5 years and actually does it through budget gimmicks on top of that. So that is the first step in this exercise, in this critical exercise of protecting our children's future. But the more important step is how we address the major budget for the next 5 years and how we address specifically the entitlement spending that is driving the issue of the deficit. If you look at the entitlement accounts there are obviously a large number of them. Many people do not understand what they are. Basically, those are accounts where you have the legal right to receive a payment from the Federal Government, unlike discretionary accounts, where the Federal we have the option to spend the money. In education we have the option to spend the money. In building roads we have the option to spend the money. But in entitlement accounts, if you meet certain criteria, you have the right to be supported by the Government or have the Government pay you. In the entitlement accounts are such areas as Social Security--it is considered an entitlement account although it is really an insurance account--health care, especially Medicare and Medicaid, farm programs, SSI, EITC, pensions for Civil Service and military retirees. Those are some of the biggest ones--welfare. Those are all entitlement accounts. To begin with, Social Security is something that in the short run is not a problem and we have not proposed doing anything that would impact that in a negative way. Why is that? For the next 7 years, actually, Social Security runs a surplus. Every year more money is paid into the Social Security system than is paid out: $60 billion this year, by the year 2000 it will be $100 billion annually. That is a factor of demographics and a tax increase that occurred back in 1983. After the year 2005 the postwar baby boom generation hits the system. Then Social Security becomes a major problem. But for people who are over the age 50 there is no proposal and there should be no proposal that would impact their Social Security benefit. So we have not addressed that in the short run of the next 5-year budget. So we take Social Security off the table but we leave--that leaves on the table the other major entitlement issues. Of those health care is 55 percent of the spending, health care accounts. In the health care accounts we are talking about two major areas, Medicare and Medicaid. Medicaid is essentially a welfare proposal, where moneys come out of the general fund to support people who cannot afford their own health care and their own long-term care; Medicare is an insurance proposal for the most part, where people pay into it through their earnings. What we propose, as Republicans, is not to cut Medicare, not to cut Medicaid. There has not been any proposal to do any of that. What we propose is to change those programs to make them deliver a better service to the people who are receiving them and, in the process, slow their rate of growth. Today the Medicare and the Medicaid accounts are growing at about 10.5 percent annually--10.5 percent. That is three times the rate of inflation. It is actually about 10 times the rate of inflation in the health care community in the private sector. Last year the health care community in the private sector actually had a negative rate of growth. So it is actually 10 times that. But it is three times the rate of growth of the general economy. That is simply too fast and it cannot be afforded. What we are suggesting is we should slow that rate of growth from 10.5 percent down to about 7 percent. That is still twice, in the Medicare area, twice the rate of growth of inflation. How do we do that? How do we slow that rate of growth? We are going to do it by suggesting to senior citizens that they should have more choices. In fact, we are going to say to them essentially we are going to try to give you the same type of choices a Member of Congress has. That seems pretty reasonable to me. They do not have that today. Today most seniors function out of what is known as a fee-for-service service in health care. Why? Fee for service is where you go out, hire your local doctor, you know him personally, and you pay him personally, and you pay whoever he refers to personally. It is a one-on-one type of relationship to health care. Most seniors in the fifties, sixties, seventies when they were growing up, that was the health care provided in this country, about the only health care, and they were comfortable with it. So the culture of senior citizens today use the fee for service. It happens to be fairly expensive. In fact, it is the most expensive form of health care. It is why health care is growing so fast as a function of cost. So we are going to say to seniors, I hope, as a way to control the rate of growth of cost, if you want to stay with fee-for-service, fine, do that. We are not going to limit your ability to do that. You can keep that program. But if you as a senior decide to choose a program which is captivated, where the fee for that program is fixed, you go and buy the program at the beginning of the year, they supply you all your health care needs, and the needs they supply are the same as you get as under your fee for service, if you go into that type of program, and that type of program costs less even though it supplies the same type of care--it has to supply the same type of care as you get today-- if that program costs less, and it probably will, these are HMO's, PPO's, we are going to let you, the senior, say keep part of your savings. In other words, if it costs $5,000 to get fee for service and you can go out and buy into an HMO for $500, you get to keep 75 percent of the $500 you saved. That is a pretty good deal for seniors. They are going to get the same, probably better, health care in many areas and it is a good deal for the Federal Government. Why? Because it gives us a predictable amount of cost for health care and its rate of growth. We know that if we can move people out of the fee-for-service system into a captivated system, we can in the outyears save a dramatic amount of money and be assured of the rate of growth. We can afford, instead of the 10-percent rate of growth, closer to the 7-percent rate of growth which we need to reach. It also creates a huge attitude in the marketplace where you will see competition rise, and you will see seniors given all types of choices. Who knows what will come forward. The market has imagination. They will be able to get programs today that we cannot conceive of, probably offers to give them drugs, long-term care, and probably offers to give them all sorts of different opportunities that they continue to have today under their present plan. That is a result of marketplace forces competing for those dollars, as a thoughtful senior out there purchasing and make the senior a smarter purchaser. As a result the Federal Government and the seniors are the winners. We will see a reduction in the rate of growth. That is one approach which we will take. We call that creating a better program. Medicare was created in the 1960's. It is a sixties health care program. It no longer functions in the present climate effectively as a way to deliver health care. We need to change it. Unfortunately, the forces of the status quo which have dominated this place for the last 30 years resist any type of change. But this type of change is needed in order to bring these costs under control, and in order to assure that our children have an opportunity to have health care and that the Medicare system does not go broke so that our seniors get health care after the year 2002. Medicaid accounts, and the welfare accounts, two major entitlements where we have essentially said--and I think most people would agree with this, especially in welfare--the Federal Government has failed. If there is an example of the failure of the liberal welfare state, it is welfare. We have created generations of dependency and despondency. People are locked into their system and told they cannot be productive citizens, and if they try to be they are beaten down by a bureaucracy which says you are not capable of being productive. We are going to keep you in this atmosphere, this endless cycle of dependency on the Federal Government and on the Federal dole. It has not worked. Welfare is a failure. The vast majority of Americans know that. The only folks who do not seem to know that are some of our more liberal colleagues who appear to be tied inexorably to this holdover from the concepts of the past. What we are going to suggest is that the States should have the responsibility of managing the welfare systems, and they are willing to do it. Given the imagination, the creativity and the flexibility the States have shown in all sorts of areas, release that sort of enthusiasm and energy on the issue of welfare reform and Medicaid, and you will see programs which are better. You will see the recipients and the people who need the care and the assistance get better care, better assistance programs, and the States feel they can do it at less cost. We will design these programs in relationship in conjunction with the Governors so that they will be Governor-driven, so to say. They will be imaginative. They will be and a much better approach to welfare and to Medicaid. We will get a better program, and we will get it for less money again because the States freed of this huge overhead of Federal bureaucracy can deliver more for the dollar, deliver it for less because they do not have to comply with all of this endless paperwork and bureaucracy. As Governor of New Hampshire, I knew that if I did not have to comply with an overwhelming morass of Federal red tape and the number of people that we had to keep on the payroll just to comply with the absurd regulations, the massive regulations that were coming out of Washington, that I could have taken that dollar and gotten more dollars out of my welfare for recipients who needed it, make sure the folks who did not need it did not get it, make sure the people who you had to help transition out of welfare were helped transitioned out of welfare, and in the process do it for considerably less and be more efficient. The Governors feel that way too. That is why they have supported this initiative. So we will undertake that process in reforming that type of program. In other entitlement accounts we can take the same type of approach-- imaginative, creative approaches which will slow the rate of growth. That is what we are talking about; slowing the rate of growth of these entitlement accounts. Why? For two simple goals. First, to make sure that these programs work a lot better because they are not working today very well. But, second, to make sure that we do not bankrupt our children's future. That must be one of our primary thoughts. So as we go forward in this budget debate, we need to be sure that we understand what is at risk here. We can follow the course which has been laid out by some of our colleagues on the other side of the aisle which is to resist every proposal that comes forward to impact any of these programs, and to say that it is wrong--wrong to change one ``i'' or change one ``t'' as it has been dotted and crossed for the last 20 years. But we can attempt to go in and fundamentally change and reform the manner in which Government is delivered in this country, to slow the rate of growth of Government, to downsize the size of the Federal Government, to return power to the States, the power to the people, to have a Government which understands the delivery of these programs to be significantly improved through delivering them at the State level, and with the programs that we retain here make sure we take a number of imaginative, more creative approaches such as giving choice to our seniors in the area of health care. Those are the types of changes we need to undertake in order to assure that our children have some opportunity for a prosperous lifestyle. If we make those choices here on this rescissions bill, and when we come back on a budget bill which would substantially reduce the rate of growth over the next 5 years, then we will see a budget that will come into balance. That is what this black line means. The red line happens to be the President's budget as it is projected out over the next 5 years, with the $200 billion deficits, continuous $5 trillion new debt. But the type of budget we are going to propose will be a budget that will lead us to a balanced budget by the year 2002. Yes. The decisions will be challenging, and I suppose the votes will be defined as tough, hard-to-make votes. But they really are not. They really should be fairly easy votes because what we are talking about here is how to reform this Government so that it delivers the services it is supposed to deliver, but delivers them in a manner which can be afforded not only by our generation but by the next generation which is going to have to pay for the costs which we are passing down to them. I believe we can accomplish that. I believe we must reject the debate tactics which we have heard on this floor for the last few days which has essentially demagoged every cut as an act that shows no compassion to whatever constituency has been identified for the moment and acknowledge the truth of the matter, that if we are truly concerned about our children--and there has been so much rhetoric from the other side about this program or that program being an issue of caring for children and compassion for children--if we really care about our children, then we have to be willing to address the deficit and the fiscal crisis which we are facing today and the fact that we are going to pass into a bankrupt Nation if we do not act and act quickly and act now. We should also reject the view that all compassion is retained here in Washington, that the only people who can run a program that really is caring and thoughtful is some small cadre of bureaucrats aided by their assistants here in the Congress of the United States out of Washington. How arrogant that is. How elitist that is. It assumes that Governors are not compassionate, State legislators are not compassionate, that the people on the main frontline of the issue, the folks in the towns and cities across this Nation who deliver these programs do not have the compassion to manage them themselves; they must be told how to do it by this cadre of self-appointed experts here in Washington. That theory of compassion holds no substance. It is not defensible. This debate, when you hear those terms, is not about compassion. This debate is about power. That is all it is about, the fact that there are folks in this city who have built their careers around the capacity to control the dollars which flow back to run these programs. And they understand that when we move these programs back to the States and the dollars back to the States, they will lose that power and they do not like it. And so they mask their fear of losing that power or they cover up their desire to retain that power with this inflammatory language about compassion which on the face of it is not defensible because it presumes that they are the only ones who possess such traits and that elected officials at the local level and at the State level cannot equal their level of compassion, which is absurd. So as we move out back to our States over the next couple of weeks and we discuss the issue of the deficit and of the budget, and as we take on issues such as this rescission package and later this budget itself, I think it is absolutely critical that we be honest with the American people, that we explain to them that if action is not taken very soon on bringing this deficit under control, on bringing the rate of growth of this Federal Government under control, our senior citizens will find a Medicare system that goes bankrupt in the year 2002 and that our children will find a nation that goes bankrupt in the year 2015, 2020, somewhere in that range; that we will have passed on to the next generation a nation that is unable to supply them the opportunities for prosperity and hope that we were given by our parents. And as I said at the beginning of this talk, it is not right and not fair for any generation to do that to another generation. So I hope that as we go forth over these next few weeks we will honestly discuss what is truly at risk here, and what is at risk is the future of our children. Mr. President, I yield back the time. Mr. President, I make a point of order that a quorum is not present.

Mr. GREGG

Mr. GREGG. Madam President, I say to the chairman of the Budget Committee, as I understand it, my quick calculation is that the $13 billion of cuts which the President is proposing over 5 years represents one-twentieth of 1 percent of the spending that is going to occur over that 5-year period. Whereas the bill that we are bringing forward tomorrow, under Senator Dole's leadership and under Senator Packwood's leadership, represents a real $13 billion in cuts-- ironically, the same number. It is going to occur this year, immediately. Is that correct? the $13 billion is about 3 percent of the appropriated accounts, whereas the dollar number the President has in his of just the appropriated accounts over the next 5 to 7 years is far less than half a percent --of just the appropriated accounts--perhaps as low as a quarter of a percent. I have not done the arithmetic, but almost unnoticeable in the cuts and restraints and reductions that we are going to have to make.

Mr. GREGG. Will the Senator from New Mexico yield for a question?

Mr. GREGG. So, if the Senator will yield for an additional question, Madam President, if you wish to undertake real budget savings, what you should be doing is supporting the rescission package that is coming forward and then work with the President to take the $13 billion of additional cuts and maybe raise it up to a level that is a real reduction in spending so we move toward a balanced budget over 5 years?