Ted Kennedy

Mr. KENNEDY

Mr. KENNEDY. I yield 4 minutes to the Senator.

Mr. KENNEDY. How much do I have remaining?

Mr. KENNEDY. Mr. President, I want to express my admiration and respect to my friend and colleague from Indiana on his maiden speech. It is an important speech because it deals with the economic future of our Nation. He brings a perspective to this issue as someone who has been an effective Governor and has had a broad reputation, not only in his State but throughout the country, as someone who understands the economics of his State well and has a reputation as a skilled Governor, making sure his State prospered and the benefits were going to go to the people. Now he speaks in the Senate as we are making a judgment, at a very important, critical time, given the change in our financial situation with the size of the surplus, and he has given us a great deal to think about. It is quite clear from his statement he has given it a good deal of thought. I thank him for his statement.

Mr. KENNEDY. I just yield myself a minute and a half.

Mr. KENNEDY. Mr. President, how much time do I have?

Mr. KENNEDY. I yield time to the Senator from North Dakota.

Mr. KENNEDY. And the other side?

Mr. KENNEDY. How much time remains, Mr. President?

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

Mr. KENNEDY. Mr. President, over these past 2 days, we have had some good debates and discussions about what is in the budget, and also what is not in the budget; and the particular emphasis and thrust of these various debates and discussions have been primarily on the issues of Medicare and Social Security. The thrust of the amendment that I offer today, on behalf of myself and others, is targeted on the issue of Medicare. It basically gives an opportunity for the Senate of the United States to say we are going to deal with the shortfalls in terms of the financial situations in Medicare prior to the time that we are going to consider a tax cut for wealthy individuals in this country. That will be the real choice for the Members here--whether we are going to say that at least meeting the financial obligations of Medicare comes before the tax breaks for wealthy individuals. As we have seen over the past 2 days, there is broad agreement that we not only need to provide financial security for the Medicare system, but we are also going to have to deal with the serious kinds of changes in the Medicare system. One of the important changes, I believe, is to put in place an effective prescription drug benefit for the elderly. In 1965, I remember being on the floor of the Senate when this issue came up. At that time, most health care plans did not include a benefit program for prescription drugs. At that time, we were attempting to follow what was a generally agreed benefit program. We did that. We did not include prescription drugs. Now prescription drugs are part of about 98 percent of all of the private company programs. We want to make sure we have an effective prescription drug benefit, not only because most companies have that benefit, but because of the enormous need our elderly have for getting prescription drugs at reasonable prices, and also because as we have all seen the breakthroughs in the use of prescription drugs in relieving suffering, illness, and sickness. So it is very simple, Mr. President. We are saying, let's move toward what has been recommended by the President, what we have referred to in general debate on other Social Security and Medicare issues, that before we are going to expend, over the 10-year budget period, $778 billion in tax cuts, we will put aside some $320 billion over the 10- year period in order to meet the financial needs of Social Security. That is basically what this amendment is all about. The fact is, Mr. President, if you look through the budget recommendation that has come from the Budget Committee, there is not one single penny in this budget resolution, in addition to current services, being put aside for the protection and the continuity of the Medicare system--not one, not a single penny. There will be references out here during the course of the debate that we have put aside $190 billion, which is a new infusion of resources. That really represents current services. If you didn't do that, you would be having cuts in existing Medicare benefits. That $190 billion, over the 10-year period, which is referred to by the Budget Committee members, is just the current services program. To say we are going to keep what we are currently providing in the Medicare system, that has been understood and recognized. Secondly, there is a reference by some on the Budget Committee that, well, we have an additional $100 billion that can be used at some time for the Medicare system. But as we have seen over the course of the debate, those funds are also being designated, on the one hand, for natural disasters. It has been pointed out by members of the Budget Committee that they average about $9 billion to $10 billion a year over a 10-year period. There is the $100 billion. When our Budget Committee friends are asked how we are going to deal with the issues of natural disasters, the response is that we have the $100 billion in there to deal with natural disasters. If Budget Committee members are asked how are we going to provide additional funds for Medicare, they say, well, we have a $100 billion reserve that can be used for Medicare. Then when they are asked, well, where in this program is there a prescription drug benefit, they say, oh, haven't you seen the part of the Budget Act that is going to provide for prescription drugs? This is the most overutilized $100 billion that we can possibly imagine. As I pointed out in the Record, we will not see any of those funds realized, really, for the first 5 years. There is effectively a deficit in the first year of more than $6 billion, and effectively zero for the next 4 years is returned. So none of those funds are going to be available to try to deal with Medicare or any of these other issues for at least 5 years. Mr. President, what we are saying is that the money is out there. The other point that is made and has been recently debated is, you really can't get the 15 percent of the budget surplus earmarked for Medicare because it will be IOUs. I think my friend and colleague from North Dakota addressed that issue in the earlier debate and discussion. I found it interesting that they can use the IOUs for tax breaks, but they cannot use IOUs for Medicare. Clearly, you can use it for Medicare. That is what we are attempting to do. The vote will be very clear: whether we, on the one hand, are going to set aside the $320 billion--over the 10-year period--of the $778 billion and say we are going to do that first. After we set aside that $320 billion, there will still be $458 billion that will be remaining. There is a difference in this body on whether that money should be used for the Republican tax cuts or whether we ought to use $273 billion out of that for the President's tax cuts. We can debate that at another time. But there will still be a generous amount of resources available there for tax reduction. This amendment assures that we put priorities first. That is a very simple and fundamental concept--that is, whether we are going to put tax breaks first or whether we are going to be putting the protection of Medicare first. That is the choice. That is the issue that will be before the Senate. Without this particular amendment, we are not going to provide the needed financial resources in time for the preservation of Medicare. Now, Mr. President, I think it is important to realize who those funds we are talking about really belong to. The amounts I am talking about--$320 billion in this amendment, or the GOP tax cut, $778 billion--those are basically the revenues that have been paid in by hard-working men and women in recent years. They have been paying into the Medicare system as well as into Social Security. That reflects the resources of hard-working men and women that are paid into the Federal Government. The question now is whether those resources that effectively have been paid in by working families, we are asking whether we ought to use those resources to protect the Medicare system, or whether they ought to be used for tax breaks for wealthy individuals. I don't think there is really a question about what the answer would be. This amendment gives the opportunity to do so. That is what we are attempting to do. Now, Mr. President, let's look at who these people are. The average Medicare recipient's income is $10,000 a year, is 76 years old, lives alone, has one or more chronic diseases, and is paying 19 percent of their income primarily for prescription drugs. That is the profile across this Nation of the Medicare recipient. When we talk about Medicare recipients on the higher end of the level, we are talking about individuals who are getting $25,000. But the overwhelming number of Medicare recipients are below the $12,000 or $13,000 level. We now asking in the Senate whether we are going to protect the health care system which they depend on prior to granting the tax break. That is the issue. We couldn't be clearer. As this chart shows, 80 percent of the Medicare expenditures are used for recipients with annual incomes of $25,000 or less. These are not individual incomes, these are household incomes. So you have 60 percent with $15,000 or under, you have 21 percent with $25,000 or under. Effectively, 80 percent of all the expenditures are in that area-- families, individuals, elderly people, or elderly couples, who have worked hard, paid into the system. As we have heard, the Medicare system has serious challenges, serious problems. No one denies that. The issue is, given the fact that the system is going to face ``financial instability''--to use it lightly-- by the year 2008, should we effectively put in place, as the President has, the recommended resources that will stabilize that to the year 2020, and then move ahead and implement the kinds of recommendations? That is the issue. These are hard-working retirees who have devoted their lives to this country, built this country, and they depend upon the Medicare system for their livelihood. If we do nothing at all, what will the alternatives be? If we are going to try to keep the Medicare system functioning to the year 2020 without this, there will be $686 billion necessary in benefit cuts or premium hikes for these elderly people. If we do nothing at all, we are going to have to collect that amount in benefit cuts or premium hikes. Those aren't my figures, those are the figures that have been given by the Commission, by the Budget Committee, by the independent actuaries, by the trustees. Those are the choices. I doubt if there will be a clearer opportunity for us to go on the record on the issue of priorities. The budget items are issues of national priorities, where we as the elected membership of the people feel the priorities ought to be. We are saying to those who are going to support this amendment that we believe the priority ought to be to provide financial security and stability for the Medicare system to the year 2020 before we give tax breaks to wealthy individuals. It is as simple as that. Mr. President, I yield such time as the Senator from North Dakota might want. Mr. CONRAD addressed the Chair.

Mr. KENNEDY. Mr. President, I ask unanimous consent reading of the amendment be dispensed with.

Mr. KENNEDY. Mr. President, through an agreement with the floor managers, I send an amendment to the desk and ask for its immediate consideration.

Mr. KENNEDY

Mr. KENNEDY. If I could ask the floor managers, the Senator from New York would like to have general time for 15 minutes, and then we will move ahead with this amendment. We will try to move it along rapidly and not take all the time.

Mr. KENNEDY. As I understand it, and the Senator could correct me-- maybe this is better directed to the Senator from Louisiana--even with the Commission's recommendation--according to the Commission's own report, that will only extend the solvency of the Medicare system 3 to 4 years, on the one hand, even if we went ahead. I am not disputing that there may be recommendations filed by the Commission that may be worthwhile. But on the one hand we have the opportunity to extend it 12 years under the transfer. On the other hand, even if we accept the Medicare Commission, it is only 3 or 4 years. So as I understand the position of the Senator, we ought to have the longer extension, we ought to consider the Breaux commission report, and then move ahead and take what steps we need to take in order to strengthen and improve the program, which would certainly include the prescription drugs. I thank the Senator from North Dakota for yielding.

Mr. KENNEDY. Mr. President, I wonder if the Senator from North Dakota will respond to a question? I listened to my friend from Louisiana. He talked about the IOUs. I find it somewhat difficult to understand how the IOUs can be used for a tax cut of some, I guess, $778 billion but cannot be used for the Medicare trust system. I have in my hand, from the Office of the Actuary of the Department of Health and Human Services in his submission to the Finance Committee--he is the chief actuary for HHS, and I will make this part of the Record--but it says, under this budget proposal, referring to the President's proposal, it would postpone the exhaustion of the trust fund for an estimated 12 years. I guess we have Members of the Senate saying these are IOUs and you are not going to really do anything by getting that kind of IOU for the Medicare trust fund. Here we have the chief actuary for HHS saying exactly the opposite, that it will extend it to the year 2020. I fail to follow the logic, where you have the IOUs and they are going to be used by our majority, our Republican friends, for tax breaks for wealthy individuals. I wonder if he can help clarify this dichotomy for me? I ask unanimous consent the letter dated January 27, 1999, be printed in the Record.

Mr. KENNEDY. Madam President, will the Senator yield?

Mr. KENNEDY. If I could just ask, because I see others on their feet, on page 2 of the proposal, at the bottom, line 22 says, ``The President's budget framework does not devote 15-percent budget surpluses to the Medicare Program.'' This has been the intention of the Senator from New Jersey and the Senator from North Dakota. It is a goal I support--that we provide at 15 percent. The Senator's resolution says it does not devote the 15 percent. Would the Senator tell us whether he would support the 15- percent allocation? He has it in the resolution, saying that the Federal budget does not devote the 15 percent. Does the Senator want us to devote that 15 percent, or not?

Mr. KENNEDY. Just to clarify it further, then, it is the position of the Senator from Delaware to go ahead and pass a budget resolution that commits us on a course for significant tax cuts prior to the time that we are going to have the hearings in the Finance Committee to develop a bipartisan proposal on Medicare; that is his position? Or are you going to recommend that we defer the tax cuts until we have the kind of hearings the Senator has suggested and really shape a proposal to put Medicare on both a sound fiscal basis and also to deal with some of the inadequacies of Medicare, like the prescription drug issue?

Mr. KENNEDY. Maybe you should ask the author of the proposal. I ask the author of the proposal whether there is any provision in this part that says we are going to defer tax cuts for wealthy individuals, across-the-board tax cuts that are mentioned in the report of the budget--that we are going to defer that until we get Medicare on a sound financial basis? Is there any reference to that in the proposal? Or if we accept this proposal, is it still the position that we are still going to go ahead and have the tax cuts now in the budget?

Mr. KENNEDY

Mr. KENNEDY. Twenty minutes.

Mr. KENNEDY. Mr. President, I want to congratulate our friends and colleagues from Maine and from Oregon for their focus on the issue of prescription drugs. I look forward to the proposal that we are going to have tomorrow. I am looking through the reserve fund language now. There are a number of constraints on the reserve fund. For example, before that reserve fund can be triggered, there has to be the guarantee that there is going to be financial solvency for Medicare from anywhere from 9 to 12 years, without any revenues from the President's program or other sources. I wonder how we could possibly meet that requirement without having dramatic and significant cuts in the Medicare program. I welcome the opportunity to have a reserve fund that can really do the job on this issue. I welcome the chance to work with our colleagues to make sure that it is done. Hopefully, we can do it in a way that is going to be meaningful, because we do not want to represent that we are making significant progress in the area of expanding access to prescription drugs without really doing so. I know the Senators from Maine and Oregon are really interested in the substance of it. I know they want to do the right thing. The current proposal is unacceptable, but I look forward to supporting efforts to make sure that we get a substantial downpayment to provide prescription drugs in Medicare this year. Mr. LAUTENBERG addressed the Chair.

Mr. KENNEDY. Mr. President, may I have 2 minutes?

Mr. KENNEDY. May I just ask one final question? If we do not do what is included in the Conrad amendment, if we are looking at the financial security of Medicare to the year 2020, is it the understanding of the Senator that we would have to somehow find $686 billion that would either have to be a combination of tax increases or benefit cuts in order to reach the $686--in order to ensure that the Medicare trust fund would be financially sound by 2020, if we do not accept the Conrad amendment?

Mr. KENNEDY. May I just ask a final question of the Senator? I notice in the report itself, under ``Revenues'' on page 75, it states this in the third paragraph: The net tax cut in the Committee-reported resolution can accommodate a substantial tax cut package (the contents of which will be determined by the tax-writing committees), which may include across-the-board cuts in tax rates. . . . The sentence does continue and list others, but it lists, No. 1, across-the-board tax cuts. Is that the kind of tax cut, if we were moving in that direction, the Senator believes would be the fairest to working families and to small farmers and the smaller business men and women of this country?

Mr. KENNEDY

Mr. KENNEDY. Mr. President, Senator Dodd and I offer this amendment to do more to help working families secure quality child care. Child care is one of the most important challenges facing the Nation. The need to improve the affordability, accessibility, and quality of child care is indisputable. Every day, millions of parents go to work and entrust their children to the care of others. An estimated 13 million children under 6 years old are regularly in child care. Every working parent wants to be sure that their children are safe and well cared for. Yet child care can be a staggering financial burden, consuming up to a quarter of the income of low-income families. Child care can easily cost between $4,000 and $10,000 for one child. But about half of all young children live in families with incomes below $35,000. And two parents working full-time at the minimum wage earn only $21,400. These parents--working parents--constantly must choose between paying their rent or mortgage, buying food, and being able to afford the quality care their children need. Existing child care investments fall far short of meeting the needs of these parents and their children. Today, 10 million low-income children theoretically qualify for services under current Federal child care programs. But because of lack of funding, only one in ten of these children actually receive it. The need is great and a ratio like that is unacceptable. Making sure that all children receive quality care especially in the early years, is one of the best possible investments in America's future. We know the enormous human potential that can be fulfilled by ensuring that all children get adequate attention and stimulation during the first three years of life. Quality child development increases creativity and productivity in our workforce. There is less need for remedial education and less delinquency. Safe, reliable care offers stable relationships and intellectually stimulating activities. Child care that fulfills these goals can make all the difference in enabling children to learn, grow, and reach their potential. If we are serious about putting parents to work and protecting children, we must invest more in child care help for families. President Clinton has put families first by giving child care the high priority it deserves. Senate Democrats have proposed an increase in our commitment to child care by at least $7.5 billion in mandatory spending over the next 5 years, almost doubling the number of children served from 1 million to 2 million in 2005. The benefits from investing in children are substantial and many. A lifetime of health costs are lower when children are supervised, educated about their health, and taught to develop healthy habits. Parents' productivity improves when they know that their children are well cared for. Education costs decrease when children enter school ready to learn. By expanding child care and child development programs, we invest in children, their future, and the country's future. Yet this budget resolution allots no funds for increased child care and development programs. In fact, the Republican budget slashes funds for critical programs for children. It denies 100,000 children the Head Start services that help them come to school ready to learn. It makes it impossible to reach the goal of serving a million children in Head Start by 2002. The message contained in the budget resolution is clear--children are not a priority. The Nation's children and families deserve a budget that invests in the right priorities--not the priorities of the right wing. This Republican budget makes children a non-priority--and gives high priority to an $800 billion tax cut for the wealthy. Those priorities are wrong for children, wrong for Congress, and wrong for the Nation. Now, when we have a large national surplus and a strong economy, it is time to invest in our most valuable resource--our children. I urge my colleagues to support this amendment. Mr. VOINOVICH addressed the Chair.