Ted Kennedy

Mr. KENNEDY

Mr. KENNEDY. I have a final question, if I could, of the Senator. Would this, now, be the longest period of financial security for the Medicare system that we would have had since, actually, Medicare has been established? It is my understanding with the additional revenues we would effectively guarantee the financial security of the Medicare system for the longest period since the Medicare system has been established.

Mr. KENNEDY. Is it the position of the Senator, when you have the extension of the Medicare system, that at that time there would be the opportunity to consider the kinds of other reforms that might continue the Medicare system even beyond the 2020 period?

Mr. KENNEDY. I know the time has moved along, so I will just take a moment. If I understand the Senator's amendment effectively, what will be the situation under your amendment with regard to the continued solvency of the Medicare system? As I understand it, besides strengthening Social Security, one of the purposes was to extend solvency of the Medicare system in order to permit time to consider sensible reforms. Will the Senator just tell me this: Under the Conrad amendment, what is the life expectancy of the Medicare system, and what would it be without the Conrad amendment under the budget resolution that is now before the Senate?

Mr. KENNEDY. Mr. President, will the Senator yield for a question?

Mr. KENNEDY. I had a chance to talk about some of the matters during the course of the afternoon, so I will be glad to work out a reasonable time with the floor manager.

Mr. KENNEDY. Could I ask the Senator to open up the copy of S. Con. Res. 20 to page 5? As I understand it, as you go down to lines 18, 19, 20 and 21, under the Republican budget, even for that fund that has been designated, $100 billion as I read that, there would be a deficit in the year 2000 of $6 billion; in fiscal year 2001 it is zero; in 2002 it is zero; in 2003 it is zero; and in 2004 it is only $2.8 billion. So even under the proposal that our friends talk about, there will not be any funds available, as I understand this, for the next 5 years. So, whether you are talking about disaster relief or inadequate funding for Medicare, even with the kind of restrictions that have been put on this fund that might be used for prescription drugs, we are talking about 5 years where there really is not anything there. Am I correct?

Mr. KENNEDY. Will the Senator yield for one more question?

Mr. KENNEDY. Even if they use the $100 billion, what part of the Medicare deficit would that make up? It is my understanding that would not even begin to make a downpayment in terms of the financial insecurity of the Medicare trust fund. Could the Senator address that issue? Because I agree with the Senator, it has been pointed out by those on the other side about how much they have done for Medicare when, as the Senator has pointed out, there is not one additional cent, not one new cent. They are going to fund the program with $190 billion which would be expended on the Medicare for current services. But not one additional cent. But even if they allocated the $100 billion for Medicare, given what the Medicare trust fund trustees have indicated was going to be a deficit of some $686 billion, how significant would that really be in terms of giving a guarantee to our elderly people in this country?

Mr. KENNEDY. Will the Senator yield for a question?

Mr. KENNEDY. Mr. President, the alternative under the Lautenberg amendment is, we will not have the tax cuts until we have the solvency of Social Security and Medicare. Is that the effect of the Lautenberg amendment?

Mr. KENNEDY. Will the Senator yield?

Mr. KENNEDY. Mr. President, I yield myself 1 minute 15 seconds. Mr. President, I want to direct the chairman's attention to page 90 of the report. Here is the reserve fund for Medicare and the prescription drugs. I hope that anyone who believes we are really establishing a reserve fund in here for prescription drugs will take a little time to read it. We don't have the time to do so right now. The point I want to make is this: When my good friend from New Mexico is talking about the $190 billion that is going to Medicare, as I mentioned, that is what will be necessary to just continue the program without any kind of adjustment. Then they have this $100 billion out there. In this report they say it can be used for prescription drugs, it can be used for disaster relief, it can be used for anything. Any time I hear someone come over and talk about a particular subject, it seems that they are using the same $100 billion for that particular purpose. Now back to page 90 and restrictions placed here in terms of prescription drugs. There is absolutely no reason to expect there will be a prescription drug provision under this particular provision that has been added in the budget legislation. We will have an opportunity later in the afternoon to debate it, but there is nothing here to guarantee the availability of even one additional dollar for Medicare.

Mr. KENNEDY. Mr. President, I have listened over the course of the presentations earlier this morning about how the Republican budget is going to try and solve the problems in Medicare and also with regard to prescription drugs, and how inadequate the President's program has been in terms of resolving Social Security and Medicare. I am glad to hear the interpretations of my good friends on the other side. The fact of the matter is, the President's program, in allocating the resources for Social Security with 62 percent of the surplus, has been basically endorsed by eight Nobel laureates in economics and over 100 economic professors, along with Alan Greenspan. If you listen to our colleagues out here, you would think it was a nondescript program. But the fact is, it is a solid program. It is a sensible program and a responsible program. The chairman of the Budget Committee talks about all the money that is going to be there in Social Security. He talks about how they are going to add $190 billion to Medicare. They have to have it. They are not adding any money. That is what the cost of the program is going to be in the outer years. They do not dare cut back on that program. That is necessary for the very existence of the program over that period of time. So when they come out and say, ``We're adding all of this money and protecting the Medicare program,'' that is poppycock; otherwise, they would have to justify further cuts in the program. These are the best estimates for a continuation of the program at the present rate. That is all. They have this wonderful other program that they talk about that is going to be available. I just refer our colleagues to the Budget Committee report for the concurrent resolution on the budget, and look on page 4, at about the middle of the page, about ``Additional On- Budget Surpluses.'' They talk about: It is estimated, at this time, that nearly $133 billion in on-budget surpluses could result if the resolution were . . . implemented. That has been revised to $100 billion. Now, listen--listen--to this fund that is going to be there. At one moment it is for prescription drugs and at another moment it is for Medicare and at another moment it is for the transition to Medicare reform and at another moment it is for national disasters. Look what they say: These additional funds, if estimates prove accurate, would further retire debt held by the public or could be made available to assist funding of any transition costs to implement reforms in the Medicare programs that would significantly extend the solvency of that program through a reserve fund mechanism adopted by the Committee. Alternatively, the on-budget surplus projected by the resolution could be needed for funding unexpected disasters and emergencies over this period. It does not even refer to prescription drugs. It does not even mention it. You talk about double counting--you can come over to page 90, and you will see how they double count it over there. We will come back to that. You tie up that fund in terms of prescription drugs in such a way you will not even get an aspirin out of this particular proposal, Mr. President. I just want to point out that they talk about the fund that they are going to have with the $100 billion surplus. It may be for emergencies. The Budget Committee knows you average $9- or $10 billion a year in that particular program. But if we look at the payout for the budget-- and I just refer you to the budget, S. Con. Res. 20. Look on page 5, look at line 18. For the year 2000, is there going to be anything in there for Medicare? No. It is $6 billion in debt. How about line 19, fiscal year 2001? Anything in there for Medicare transition? Anything in there for prescription drugs? Anything in there for emergencies? Zero. What about line 20, for the fiscal year 2002? Zero. What about for fiscal year 2003? Zero. What about for fiscal year 2004? There is $2,899,000,000. Isn't that something? This is their program for saving Medicare. This is their program, their own figures. If I have ever heard something that makes absolutely no sense--how can any member of the majority in the Budget Committee stand up on this floor and say that they have anything worthwhile in here to protect Medicare? I say to the Senator, it is $686 billion. Even if you use the whole $100 billion, it is $686 billion you are going to need over 15 years, so you do not have enough in here to even begin to save Medicare. All we are trying to get is honesty in budgeting. Under the Democratic program, we take all 15 percent and set it aside. You can make these debatable points that, well, you can't really transfer the funds. Of course you can't. You have to change the law to be able to do it. But we understand what is being done out here, Mr. Chairman and Senators. We understand what is being done. We are allocating and indicating what our priorities are. And we are going to save Social Security on the one hand, and we are going to use that 15 percent for Medicare. And we are not going to use this $100 billion that does not provide a single cent for 5 years and can be used either for disasters or for any other program that has been outlined in the Budget Committee's report. That is not saving Medicare. The amendment of the Senator from New Jersey, Senator Lautenberg, does the job. And the amendment of Senator Conrad does the job. We will also have an opportunity to offer something that will do it. So Mr. President, I think it is worthwhile going beyond the rhetoric and giving our Members a chance to look through both the report and the legislation to try and find out who really is interested in preserving Medicare. The votes that are going to be offered here later this afternoon, starting with Senator Lautenberg's, and Senator Conrad's, will give us an opportunity to do that. The principle set forth in the Lautenberg amendment goes to the heart of this budget debate: We should not liquidate the surplus by enacting tax cuts before we solve the significant financial problems facing Social Security and Medicare. I wholeheartedly agree. Placing Social Security and Medicare on a firm financial footing should be our highest budget priorities. The surplus gives us a unique opportunity to extend the long-term solvency of those two vital programs without hurting the vulnerable elderly who depend upon them. We should seize that opportunity. Two-thirds of our senior citizens depend upon Social Security retirement benefits for more than fifty percent of their annual income. Without it, half of the nation's elderly would fall below the poverty line. These same retirees living on fixed incomes rely upon Medicare for their only access to needed health care. For all of them, this budget does absolutely nothing. It does not provide one new dollar to support Social Security or to support Medicare. It squanders the historic opportunity which the surplus has given us. On the subject of Social Security, the Republican budget is an exercise in deception. The rhetoric surrounding its introduction conveys the impression that the Republicans have taken a major step toward protecting Social Security. In truth, they have done nothing to strengthen Social Security. Their budget would not provide even one additional dollar to pay benefits to future retirees. Nor would it extend the life of the Trust Fund by one more day. It merely recommits to Social Security those dollars which already belong to the Trust Fund under current law. That is all their so-called ``lockbox'' does. By contrast, President Clinton's proposed budget would contribute $2.8 trillion new dollars of the surplus to Social Security over the next fifteen years. By doing so, his budget would extend the life of the Trust Fund by more than a generation to beyond 2050. Not only does the Republican plan fail to provide new revenue to extend the life of the Social Security Trust Fund, it does not even effectively guarantee that the existing payroll tax revenues will be used to pay Social Security benefits. In essence, there is a trap door in the Republican ``lockbox''. Their plan would allow Social Security payroll taxes to be used to finance unspecified ``reforms''. This opens the door to risky schemes that would use the Social Security surplus to finance private retirement accounts at the expense of Social Security's guaranteed benefits. Such a privatization plan could actually make Social Security's financial picture far worse than it is today, necessitating deep benefit cuts. A genuine ``lockbox'' would prevent any such diversion of funds, but not the Republican version. A genuine ``lockbox'' would guarantee that those dollars would be in the Trust Fund when needed to pay benefits to future recipients. The ``lockbox'' in this budget does not. While the Republicans claim that they too support using the surplus for debt reduction, they are still unwilling to use it in a way that will help save Social Security for future generations. There is a fundamental difference between the parties on how the savings which will result from debt reduction should be used. The federal government will realize enormous savings from paying down the debt. As a result, billions of dollars that would have been required to pay interest on the national debt will become available each year for other purposes. President Clinton believes those debt service savings should be used to strengthen Social Security. So do I. But the Republicans refuse to commit those dollars to Social Security. Their budget does nothing to increase Social Security's ability to pay full benefits to future generations of retirees. Currently, the federal government spends more than 11 cents of every budget dollar to pay the cost of interest on the national debt. By using the Social Security surplus to pay down the debt over the next fifteen years, we can reduce the debt service cost to just 2 cents of every budget dollar by 2014; and to zero by 2018. Such prudent fiscal management now will produce an enormous savings to the government in future years. Since it was payroll tax revenues which made the debt reduction possible, those savings should in turn be used to strengthen Social Security when it needs additional revenue to finance the baby boomers' retirement after 2030. Rather than paying interest to bond- holding investors today, our plan would use that money to finance Social Security benefits tomorrow. This is analogous to the situation of a couple with young children and a mortgage. They know they will have a major expense fifteen years down the road when their children reach college age. They use their extra money now to pay down their home mortgage ahead of schedule. As a result, in fifteen years the mortgage will be greatly reduced or even paid off. Thus, the dollars that were going to pay the mortgage each month will become available to finance college for the children. In the same way, the federal government is reducing its debt over the next fifteen years, so that it can apply the savings to Social Security when the baby boomers retire. That is what the President's budget proposes. It would provide an additional $2.8 trillion to Social Security, most of it debt service savings, between 2030 and 2055. As a result, the current level of Social Security benefits would be fully financed for all future recipients for more than half a century. It is an eminently reasonable plan. But Republican members of Congress oppose it. During the budget debate, the Republicans will proclaim that this year, unlike last year, Social Security tax dollars are not being used to pay for their tax cut. This year they are not proposing to loot billions of dollars from the Social Security Trust Fund. Undeniably a step in the right direction. But hardly sufficient progress. They are still unwilling to use the surplus to save Social Security, still unwilling to use surplus dollars to extend the ability of the Social Security Trust Fund to pay full benefits to future generations. Sadly, the Republican response to the financial problems facing Medicare is the same. The crisis facing Medicare is much more severe than the financial problems facing Social Security. Medicare will become insolvent in less than a decade unless we take decisive action to extend it. President Clinton's budget would do that. It would devote fifteen percent of the surplus, nearly $700 billion, over the next fifteen years to financially strengthening Medicare. As a result, it would have sufficient resources to fully fund current health care benefits to at least 2020. This would give us the time which is necessary to gradually reform the program in a way which will protect the elderly beneficiaries who depend upon it. However, the Republicans rejected this initiative to save Medicare. Their budget will not extend the life of the Medicare Trust Fund for one day. I will have a great deal more to say later in the debate about the harm that this budget will do to Medicare. The budget Republicans have brought to the floor does not provide one new dollar to finance Social Security or Medicare benefits. What it does provide is nearly $800 billion new dollars for tax cuts over the next decade. Tax cuts, not strengthening Social Security and Medicare, is their first priority. Budgets speak louder than words. The Republican budget tells us much more candidly than their rhetoric where the GOP's real commitment lies. The Republican budget would devote $778 billion to tax cuts during the next ten years--before fixing Social Security, and before funding Medicare for the next generation. Those who wrote this budget were not thinking about the two-thirds of our senior citizens who rely on Social Security retirement benefits for more than half their annual income. They clearly were not thinking of the elderly who depend on Medicare for their only access to health care. The pleas of the elderly have fallen on deaf ears. When the Republicans wrote this budget, they had a very different group of people in mind. While the budget itself does not specify the precise form of tax cut, the Republican leadership has already called for a 10% across-the-board tax rate cut. Such a tax cut would disproportionately benefit the nation's highest-income taxpayers. The Treasury Department's analysis of this proposal shows that the top one percent of earners would receive 35% of the benefits. The top twenty percent of earners would receive 65% of the benefits. By contrast, approximately 45 million Americans would get no benefit at all. While an across-the-board income tax cut may sound fair at first hearing, it would in fact be grossly inequitable. Under the Republican leadership's proposal, sixty percent of American taxpayers would share just nine percent of the total tax savings, an average of less than $100 per person per year. Clearly, the Republicans are not thinking about the needs of working families and their elderly parents. This amendment offered by Senator Lautenberg would set us on a different, more responsible course. It would prevent using the surplus to fund tax cuts until we have solved the financial problems facing Social Security and Medicare. This approach would preserve the resources which are needed to guarantee the long-term solvency of these two historic programs without harming future beneficiaries. It is the right thing to do.

Mr. KENNEDY. Six minutes.

Mr. KENNEDY. Will the Senator yield 6 minutes?

Mr. KENNEDY

Mr. KENNEDY. I see my friend and colleague on the floor, the Senator from California. I will come back later in the day. I thank the Chair.

Mr. KENNEDY. Fine.

Mr. KENNEDY. Mr. President, I yield myself 15 minutes. First of all, I want to express appreciation to the members of the Budget Committee and, in particular, to our ranking minority member, Senator Lautenberg, for the work that he and our other colleagues did in developing a series of positions in the Budget Committee. I will address one of those this morning and refer to another which I hope, over the course of the next couple of days, to come back to. I think those who are interested in the Nation's priorities, as reflected in the Budget Committee, should read the transcript of the discussion and debate. I had the opportunity to do so. I think they will get a very clear indication, as a result of that review, as to exactly what the priorities were for the Democrats in the budget consideration, which was the preservation of Social Security and the preservation of Medicare. During the course of debate and discussion, it becomes quite clear-- and also by the votes--as to those who are strongly committed to that program. Over the next several hours, we will have a chance to move beyond the rhetoric and into the details of the budget itself. That is going to be quite revealing, Mr. President, because we will have a clear opportunity to make a judgment at the end of these 3 or 4 days as to the very strong position that has been taken by the Democrats in the preservation of Social Security and also the strong commitment that we have in the preservation of Medicare. I know there are those who have said, ``We have a certain amount of funds that have been allocated within this budget for Medicare; all we are waiting for is the President to make some judgment, make some recommendation.'' The President has made the most important recommendation, and that is to allocate 15 percent of the surplus to preserve the Medicare Program through the year 2020, some 12 additional years of security for the Medicare Program. That will be the longest period of time of solvency for the Medicare system since the enactment of Medicare. I will take a few moments later on in the day to comment further on this when we talk about the particular amendment that I will offer, but we have seen over the history of Medicare where there have been interventions for the preservation of Medicare to continue it and continue it in a financially sound way. Now we have heard the President of the United States say we ought to allocate the resources that are going to preserve this for another 12 years and give it the greatest solvency we have had in the history of the Medicare Program, and then let's get about trying to put in place the kind of reforms that will be sound, taking into consideration the various recommendations that have been made by the Medicare Commission, a few which make sense and others with which I take serious issue. We will have an opportunity to examine those. I hope our Republican friends--who virtually have been silent in proposing Medicare recommendations, other than to use the 15 percent that the President has recommended and allocate it for tax breaks for wealthy individuals--I hope that they will, during the time that we are out here at least, review with us what their recommendations are, what their proposals are, what their solutions are, rather than constantly harp on the President. He has taken a giant step forward in the allocation of solvency for the Medicare system, and he has also indicated, now that the Medicare Commission has reported, that he will make future recommendations. If we were to accept the recommendations of our Republican friends, there will be very little in the till at the end of the day to provide protections for our senior citizens. That, I think, is a glaring, glaring loophole in this budget proposal, and one which I know the ranking member of the committee, Senator Lautenberg, will address with an amendment and Senator Conrad with another excellent amendment. And I will offer an amendment, along with others, to give focus and attention to these issues. There will be a very clear indication, hopefully at the end of the day, as to what really are the priorities for this body in terms of the future of the Medicare system. Every budget is a statement of national priority. Every budget is really the investment in the future, but the year 2000 budget is extremely important, not just because it is the first year of the new millennium, but this budget will determine whether the large surplus will be used wisely for the benefit of all or squandered on tax preferences that disproportionately benefit the few. The President, in his program, after the preservation of funding for Social Security and Medicare, also targeted tax programs that others will address later in the course of this debate. I think those are in areas of very special needs--providing assistance to families with the disabled, child care, and other areas. We will have a chance to review those. They all recognize what is urgent and of great importance, and that is the preservation of Social Security, the preservation of Medicare, and then the targeted tax cuts. This budget will determine whether Medicare will offer the protections that are so essential for senior citizens in the years ahead. This is the budget that will determine whether we keep medical care in Medicare. The Republican budget resolution is a thinly veiled assault on Medicare and I think an affront to every senior citizen who has earned the right to affordable health care through a lifetime of hard work. It is a proposal to sacrifice the future of Medicare in order to finance the tax cuts for the wealthy. Equally as serious is the Republican attempt to privatize Medicare, to misuse the current financial problems of Medicare as an excuse to turn the program over to the tender mercies of the private insurance companies. Of course, there is where the problem started in the 1960s. This is the same extreme agenda the Republicans pursued unsuccessfully in 1995, 1996, and it was an agenda rejected by President Clinton and Democrats in Congress and the American people, but now our Republican friends are at it again. According to the most recent projections of the Medicare trustees, if we do nothing else, keeping Medicare solvent for the next 25 years will require benefit cuts of almost 20 percent--massive cuts of hundreds of billions of dollars. The President's plan makes up most of that shortfall, without any benefit cuts, by investing 15 percent of the surplus in Medicare. This investment avoids the need for any benefit cuts in Medicare for at least the next 21 years. It also gives us the time to develop the policies that can reduce the Medicare costs without also reducing the health care that the elderly need and deserve. But Republicans in Congress have a different agenda for the surplus. They want to use it to grant the undeserved tax breaks for the wealthiest individuals and corporations in our society regardless of what happens to Medicare. Republicans on the Budget Committee had a clear opportunity to preserve, protect and improve Medicare. All they had to do was adopt the President's proposal for investing the 15 percent of the surplus in Medicare. Instead of protecting Medicare, they use the surplus to pay for billions of dollars in new tax breaks. You do not need a degree in higher mathematics to understand what is going on here. The Republican budget, I believe, is Medicare malpractice. Every senior citizen knows and their children and grandchildren know, too, that the elderly cannot afford cuts in Medicare. They are already stretched to the limit, and sometimes beyond the limit, to purchase the health care they need. The out-of-pocket payments by those over 65 now is almost the same percent of what it was prior to the time of the passage of Medicare. They just cannot afford to have the significant and sizable increases that would be assumed if we are not going to provide this 15 percent. Because of the gaps in Medicare and the rising health care costs, Medicare now covers only 50 percent of the health bills of senior citizens. On average, senior citizens spend 19 percent of their limited income to purchase the health care they need, a larger proportion of what they had to pay before Medicare was enacted a generation ago. Many have to pay more as a proportion of their income. By 2025, if we do nothing, that proportion will have risen to 29 percent--29 percent, Mr. President. Too often, even with today's Medicare benefits, too many senior citizens have to choose between putting food on the table, paying the rent, or purchasing the health care they need. The typical Medicare beneficiary is a single woman, 76 years old, living alone, with an annual income of approximately $10,000. She has one or more chronic illnesses. She is a mother and a grandmother. Yet, we want to cut her Medicare benefits in order to pay for tax breaks for the wealthy. These are the women who will be unable to see a doctor, who will go without needed prescription drugs or without meals or heat, so that wealthy Americans, earning hundreds of thousands of dollars a year, can have additional thousands of dollars a year in tax breaks. This is the wrong priority. And America knows it is the wrong priority--even if Republicans in Congress do not. We all recall that 4 years ago Republicans in Congress also tried to slash Medicare to pay for new tax breaks for the wealthy. They tried to slash Medicare by $270 billion to pay for $240 billion in tax cuts for wealthy individuals and corporations. We all remember. It was not that long ago. Mr. President, under the GOP proposal, senior citizens would have seen their premiums skyrocket an additional $2,400 for elderly couples over the budget period. The deductible that senor citizens pay to see a physician would have doubled. The Medicare eligibility age would have been raised to 67. Protections against extra billing by doctors would have been rolled back. I can remember the debates we had on that, Mr. President, where you effectively have double billing, where they go on and they take what they get from Medicare, and then they send you another bill on top of that. We spent a long time to address that particular issue. And now it would be reopened again. Under the guise of preserving Medicare, Republicans had proposed to turn the program over to private insurance companies and force senior citizens to give up their family doctors and join HMOs. But President Clinton and Democrats in Congress stood firm against these regressive proposals, and they were not enacted into law. Now the Republicans on the Finance Committee and Ways and Means Committee are at it again. They are already drafting new so-called reforms for Medicare. No details have been revealed, but the funds already earmarked for tax breaks for the wealthy under the Republican budget mean there is no alternative to harsh cuts in Medicare. As we debate these issues this week, the Republican response is predictable. They will deny they have any plans to cut Medicare. They will talk about $190 billion additional over the period of time. The $190 billion they will say they are giving additional. That is just to keep the program going. If you cut any of that, you are providing additional kinds of cuts in Medicare. That is what the budget figures themselves show. Mr. President, they will deny they have any plans to cut Medicare. The American people will not be fooled. They know that the President's plan will put Medicare on a sound financial footing for the next 2 decades without the benefit cuts, tax increases, and raising the retirement age. They also know the Republican plan will take the surplus, intended for Medicare, and squander it on the tax breaks. They know that the Republican plan for Medicare benefits means benefit cuts for the elderly, not the honest protection of our senior citizens. This week the Democrats will offer amendments to assure this year's budget protects Medicare, not destroys it. Under our proposal, all the funds the President has proposed to earmark for Medicare will be placed in the Medicare trust fund. Our proposal will assure the solvency of Medicare for the next 21 years without benefit cuts or tax increases or raising the retirement age. Republicans will have a chance to vote on whether they are sincere about protecting Medicare. The vote on our proposal will test whether they care more about senior citizens or tax breaks. The Republicans also try to confuse the issue. They will say it is wrong to put the surplus into Medicare. I say the workers of this country are the ones who earned this surplus. They want to use it to protect and preserve Medicare. Our Republican friends say that dedicating 15 percent of the surplus will not solve Medicare's financial problems beyond 2020. That is true. But assuring the solvency of Medicare for the next 21 years is a giant accomplishment and a clear statement of our national priorities, and it gives us time to develop longer-term programs that will bring down Medicare costs while protecting beneficiaries. If we fail to dedicate the surplus to Medicare, the only alternative is harsh benefit cuts and steep payroll tax increases to make up the resources that our Democratic plan provides. The choice is clear. Congress must act to preserve the Medicare benefits that seniors depend on.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I commend my friend and colleague for sharing with all of the Senate the really enormously sensitive, informed, and wonderful comments of Brendan. I, too, have known this young, extraordinary man, and know what a difference he has made in so many different lives. He really ought to be commended. Brendan shared with the Senate, with all of us, these very eloquent words. I thank my friend and colleague, and join with him in commending Brendan and for all he has done, not only for my friend and colleague, but for all of those who are facing challenges in the area of learning disabilities.

Mr. KENNEDY. Mr. President, I ask consent for 30 seconds?

Mr. KENNEDY

Mr. KENNEDY. Madam President, few individuals have made a greater contribution to the cause of peace in Northern Ireland than our friend and former Senate colleague, Senator George Mitchell. His leadership was indispensable in helping the political leaders of Northern Ireland achieve the historic Good Friday Peace Agreement of 1998. Last Wednesday, on St. Patrick's Day, President Clinton presented Senator Mitchell with the nation's highest civilian honor, the Presidential Medal of Freedom. In accepting the award, Senator Mitchell demonstrated again why he has been so vital to the peace process. He spoke directly and movingly to the political leaders on both sides of Northern Ireland, many of whom were in the White House audience. He reminded them of how far they had come in their search for peace. He urged them to resolve the current difficulties and enable the peace agreement to continue to be implemented. As he said so eloquently, ``History might have forgiven failure to reach an agreement, since no one thought it possible. But once the agreement was reached, history will never forgive the failure to carry it forward.''

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I yield myself such time as I might use. If others arrive on the floor and I have exceeded my 10 or 12 minutes, I will yield to them.

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

Mr. KENNEDY

Mr. KENNEDY. Mr. President, this week we will have the budget for the Nation before the Senate for consideration. I want to speak now on that budget, and give special focus and attention to the concerns I have about how that budget was put together and its particular implications with regard to Social Security and to Medicare, and also with regard to other domestic priorities. Then I will express my concern on the priority that the Republican budget has given to tax cuts and how that relates to the Nation's priorities and to the Nation's needs. Mr. President, the Republican FY2000 budget resolution fails to meet the nation's priorities. It claims that it will extend the solvency of the Social Security Trust Fund. In reality, it would prevent President Clinton's proposed transfer of surplus funds to protect this important program for future generations. The Republican budget claims that it will set aside money for Medicare. In reality, it squanders those funds to pay for a tax cut for the rich. The Republican budget claims that it will improve education. In reality, it slashes funds for critical programs like Head Start, job training, and student aid to pay for increases in education. On the subject of Social Security, the Republican budget is an exercise in deception. The rhetoric surrounding the budget itself conveys the impression that the majority have taken a major step towards protecting Social Security. In truth, they have done nothing to strengthen Social Security. Their budget would not provide one additional dollar to pay benefits to future retirees, nor would it extend the life of the trust fund by even one day. It merely recommits to Social Security those dollars which already belong to the Trust Fund under current law. That is all their so-called ``lockbox'' does. By contrast, President Clinton's proposed budget would contribute 2.8 trillion new dollars of the budget surplus to Social Security over the next 15 years. By doing so, his budget would extend the life of the trust fund by more than a generation--to beyond 2050. Not only does the Republican plan fail to provide the new revenue to extend the life of the Social Security trust fund, it does not even effectively guarantee that the existing payroll tax revenue will be used to pay Social Security benefits. In essence, there is a trapdoor in the Republican lockbox. Their plan would allow Social Security payroll taxes to be used to finance unspecified ``reforms''. This loophole opens the door to schemes to privatize Social Security by turning it over to the tender mercy of the private insurance industry. Such a privatization plan could actually make Social Security's financial picture far worse than it is today, necessitating deep benefit cuts. A genuine ``lockbox'' would prevent any such diversion of funds. A genuine ``lockbox'' would guarantee that those payroll tax dollars would be used to protect Social Security, not undermine it. While the Republicans claim that they, too, support using the surplus for debt reduction, they are still unwilling to use it in a way that will help save Social Security for future generations. There is a fundamental difference between the parties on how the savings which will result from debt reduction should be used. The Federal Government will realize enormous savings from paying down the debt. As a result, billions of dollars which would have been required to pay interest on the national debt will become available each year for other purposes. President Clinton believes those debt savings should be used to strengthen Social Security. I wholeheartedly agree. But the Republicans refuse to commit those dollars to Social Security. Their budget does nothing to increase Social Security's ability to pay full benefits to future generations of retirees. Again, they are short- changing Social Security while pretending to save it. Currently, the Federal Government spends more than 11 cents of every budget dollar to pay the cost of interest on the national debt. By using the Social Security surplus to pay down the debt over the next 15 years, we can reduce the debt service cost to just 2 cents of every budget dollar by the year 2014 and to zero by 2018. Such prudent fiscal management now will produce an enormous savings to the Government in future years. Since it is payroll tax revenues which made the debt reduction possible, those savings should, in turn, be used to strengthen Social Security when it needs additional revenue to finance the baby boomers' retirement. Rather than paying interest to bond-holding investors today, our plan would use that money to finance Social Security benefits tomorrow. This is analogous to the situation of a couple with young children and a mortgage. They know they will have a major expense 15 years down the road when their children reach college age. They use their extra money now to pay down their home mortgage ahead of schedule. As a result, in 15 years the mortgage will be greatly reduced or even paid off. Thus, the dollars that were going to pay the mortgage each month will be available to finance college for their children. In the same way the Federal Government is reducing its debt over the next 15 years so that it can apply the savings to Social Security in the future. That is what the President's budget proposes. It would provide an additional $2.8 trillion to Social Security, most of it in debt service savings, between 2030 and 2055. As a result, the current level of Social Security benefits would be fully financed for all future recipients for more than half a century. It is an eminently reasonable plan, but Republican Members of Congress oppose it. The budget Republicans have brought to the floor does not provide one new dollar to finance Social Security benefits. What it does provide is nearly 800 billion new dollars for tax cuts over the next decade. Tax cuts, not strengthening Social Security, is their first priority. Budgets speak louder than words. The actual Republican budget tells us much more candidly than their rhetoric about the GOP's goal of tax cuts at the expense of Social Security. Mr. President, in addition to claims of extending the solvency of the Social Security trust fund, this budget would prevent the President's proposed transfer of surplus funds to protect important programs for future generations. The Republican budget claims that it will set aside money for Medicare, but in reality it squanders those funds to pay for a tax cut. This is unacceptable. Even worse is the Republican attempt to privatize Medicare--or use the crisis in Medicare financing that their budget will create as an excuse to promote their extreme agenda of slashing Medicare benefits and turning over the program to private insurance companies. This is the same agenda that Republicans pursued unsuccessfully in 1995 and 1996, and it was the agenda rejected by President Clinton and Democrats in Congress and the American people. But now our Republican friends are at it again. According to the most recent projections of the Medicare Trustees, if we do nothing else, keeping Medicare solvent for the next 25 years will require benefit cuts of almost 20 percent--massive cuts of hundreds of billions of dollars. The President's plan makes up that shortfall, without any benefit cuts, by investing 15 percent of the surplus in the Trust Fund. This investment avoids the need for any benefit cuts for at least the next 21 years. It also gives us time to develop policies that can reduce Medicare costs without also reducing the health care that the elderly need and deserve. But Republicans in Congress have a different agenda. They want to use the surplus to grant undeserved tax breaks to the wealthiest Americans--and then use the Medicare shortfall as an excuse to slash the program and turn it over to private insurance companies. Republicans on the Budget Committee had a clear opportunity to preserve, protect and improve Medicare. All they had to do was to adopt the President's proposal for investing 15% of the surplus in Medicare. Instead of protecting Medicare, they use the surplus to pay for billions of dollars in new tax breaks for the wealthy. You don't need a degree in higher mathematics to understand what is going on here. Because the Republican budget does nothing to preserve and protect Medicare, their proposals add up to billions of dollars in Medicare cuts. Every senior citizen knows--and their children and grandchildren know, too--that the elderly cannot afford cuts in Medicare. They are already stretched to the limit--and sometimes beyond the limit--to purchase the health care they need today. Because of gaps in Medicare and high health care costs, Medicare now covers only about 50% of the health care costs of senior citizens. On average, senior citizens spend 19% of their limited incomes to purchase the health care they need-- almost as large a proportion as they had to pay before Medicare was enacted a generation ago. Many senior citizens have to pay even more as a proportion of their income. By 2025, if we do nothing, that proportion will have risen to 29%. Too often, even with today's Medicare benefits, the elderly have to choose between putting food on the table, paying the rent, or purchasing the health care they need. The typical Medicare beneficiary is a single woman, seventy-six years old, living alone, with an annual income of approximately $10,000. She has one or more chronic illnesses. She is a mother and a grandmother. These are the women whose benefits Republicans want to cut to pay for new tax breaks for the wealthy. These are the women who will be unable to see a doctor, or will go without needed prescription drugs, or who will go without meals or heat, so that wealthy Americans earning hundreds of thousands of dollars a year can have additional thousands of dollars a year in tax breaks. This is the wrong priority--and Americans know it is the wrong priority, even if Republicans in Congress do not. We all recall that four years ago, Republicans in Congress also tried to cut Medicare to pay for new tax breaks for the wealthy. They sought to cut Medicare by $270 billion to pay for $240 billion worth of tax cuts for the wealthiest individuals and corporations. Under their proposals, senior citizens would have seen their premiums skyrocket--an additional $2,400 for senior couples over the budget period. The deductible that senior citizens pay to see a physician would have doubled. The Medicare eligibility age would have been raised to 67. Protections against extra billing by doctors would have been rolled back. Under the guise of preserving Medicare, Republicans also proposed to turn the program over to private insurance companies, and force senior citizens to give up their family doctors and join HMOs. But President Clinton and Democrats in Congress stood firm against these regressive proposals, and they were not enacted into law. Now, Republicans on the Finance Committee and House Ways and Means Committee are at it again. They are already drafting new Medicare ``reform'' plans. No details have been revealed. But the funds already earmarked for tax breaks for the wealthy under the Republican budget proposal means that there is no alternative to the harsh cuts in Medicare. No wonder so many senior citizens believe that G.O.P. stands for ``Get Old People.'' The Republican elephant never learns. As we debate these issues this week, the Republican response is predictable. They will deny that they have any plans to cut Medicare. But the American people will not be fooled. They know that the President's plan will put Medicare on a sound financial footing for the next two decades--without benefit cuts, without tax increases, and without raising the retirement age. They also know that the Republican plan will take the surplus intended for Medicare and squander it on new tax breaks for the wealthy. They know that the Republican plan for Medicare is benefit cuts and additional burdens on the elderly, not the honest protection our senior citizens deserve. This week, Democrats will offer amendments to assure that this year's budget protects Medicare, rather than destroying it. Under our proposals, all of the funds the President has proposed to devote to Medicare will be put into the Medicare Trust Fund. Our amendments will assure that Medicare will be solvent for the next 21 years, without benefit cuts or tax increases or raising the retirement age. Republicans will have a chance to vote on whether they are sincere about protecting Medicare--and the vote on our amendments will test whether they care more about senior citizens or the wealthy. The choice is clear. The Congress must act to preserve the benefits that senior citizens have earned, instead of granting new tax breaks for the wealthiest Americans. Just as important as preserving and protecting Medicare is improving it. And the most important single step we can take to improve Medicare is to provide prescription drug coverage for senior citizens. Medicare is a compact between workers and their government that says, ``Work hard, pay into the system when you are young, and Medicare will provide health security in your retirement years.'' But that commitment is being broken every day, because Medicare does not cover prescription drugs. When Medicare was enacted in 1964, coverage of prescription drugs by private insurance was not the norm--and Medicare followed the standard practice in the private insurance market. Today, ninety-nine percent of employment-based health insurance policies provide prescription drug coverage--but Medicare does not. Medicare is caught in a 35 year old time warp--and too many senior citizens are suffering as a result. Too many seniors take half the pills their doctor prescribes, or don't fill needed prescriptions--because they simply cannot afford the high cost of prescription drugs. In 1983, before the most recent surge in drug costs, one in eight senior citizens said they sometimes had to choose between prescription drugs and food on the table. Too many elderly Americans are paying twice as much as they should for the drugs they need, because they are forced to pay the full price, while other Americans pay less because their health plans grant discounts. As a result, too many senior citizens are ending up hospitalized--at immense cost to Medicare--because they are not receiving the drugs they need or are not taking them correctly. As we enter the new century, pharmaceutical products are increasingly the source of miracle cures for more and more diseases--but senior citizens will be left out and left behind if we do not act. The 21st century may well be the century of life sciences. With the support of the American people, Congress is on its way to the goal of doubling the budget of the National Institutes of Health to support additional basic research, so that scientists can develop new therapies to improve and extend the lives of senior citizens and all citizens. These miracle drugs save lives--and they save dollars too, by preventing unnecessary hospitalization and expensive surgery. All patients deserve affordable access to these medications. Yet, Medicare, the nation's largest insurer, does not cover out-patient prescription drugs, and senior citizens and persons with disabilities pay a heavy price for this glaring omission. Up to 19 million Medicare beneficiaries are forced to fend for themselves when it comes to purchasing these life-saving and life- improving therapies. They have no prescription drug coverage from any source. Other Medicare beneficiaries have some coverage, but too often it is inadequate, unreliable and unaffordable. Prescription drugs are the single largest out-of-pocket cost to the elderly for health services. The average senior citizen fills an average of eighteen prescriptions a year, and takes four to six prescriptions daily. Many elderly Americans face monthly drug bills of $100 to $200 or more. Some of the newer drugs that can produce miraculous results for those who can afford them cost $10,000 a year or more. Misuse of prescription drugs results in preventable illnesses that cost Medicare an estimated $16-$20 billion annually, while imposing vast misery on senior citizens. What are needed are effective ways to encourage proper use. Large savings to Medicare will result if physicians, pharmacists and senior citizens are better educated about identifying, correcting, and preventing these problems. Too often, elderly Americans skimp on their medicine--they take half doses or otherwise try to stretch their prescription and to make it last longer. This is not right. And it doesn't have to happen. If the prescription drugs they need are covered by Medicare, needless hospitalizations will be avoided and physician visits will be reduced. The Senate Budget Committee recognized the need for prescription drug coverage by adopting a reserve fund for this coverage. But the Committee reserve fund is hedged with unacceptable conditions that could retard rather than enhance the cause of ensuring a meaningful drug benefit. The Congress can do better--and it must. The provision in the budget resolution does not actually provide funds for a prescription drug benefit. Instead, it allows a prescription drug benefit to be enacted if certain conditions are met, but those conditions are far too limited. Senior citizens need a drug benefit more than the wealthy need new tax breaks. Every senior citizen understands that--and so do their children and grandchildren. Finally, it is vital that we continue to make investments in education programs that serve Americans of all ages. The Republican budget claims it will improve education. In reality, it slashes funds for critical programs like Head Start, job training, and student aid to pay for increases in education. It is vital that we continue to make investments in education programs which serve Americans of all ages. The Nation's children and families deserve the opportunity for a good education throughout their lives. Student performance is rising across the nation by many indicators. The federal-state-local partnership is working--we shouldn't do anything to undermine it. Instead, we should do more to accelerate positive change. Student achievement is improving. Performance on the National Assessment of Educational Progress has increased, particularly in reading, math, and science--critical subjects for success in learning. Average reading scores increased from 1994 to 1998 in 4th, 8th, and 12th grades. U.S. students scored near the top on the latest international assessment of reading, with 4th graders outperforming students from all other nations except Finland. Average performance in math has improved since 1978, with the largest gains made by 9-year- olds. Between 1992 and 1997, the combined verbal and math scores on the SAT increased by 15 points. Students are taking more rigorous subjects than ever--and doing better in them. The proportion of high school graduates taking the core courses recommended in the 1983 report, A Nation At Risk, had increased to 52 percent by 1994, up from 14 percent in 1982 and 40 percent in 1990. Since 1982, the percentage of graduates taking biology, chemistry, and physics has doubled, rising from 10 percent in 1982 to 21 percent in 1994. With increased participation in advanced placement courses, the number of students who scored at the highest levels on AP exams has risen nearly five-fold since 1982, from 132,000 in 1982 to 636,000 in 1998. But too many students in too many schools in too many communities across the country fail to achieve that standard. More children need to come to school ready to learn. More children need modern schools with world-class teachers. More students need opportunities for after-school programs. And more qualified students should be able to afford to go to college. The Republican budget proposal is a welcome improvement over past years. Previous Republican plans drastically cut funding for education. In one of their first acts as the majority party in 1995, Republicans rescinded education funding by $1.7 billion and proposed to abolish the Department of Education. In subsequent years, they proposed to cut education by $3.9 billion and $3.1 billion. With the strong leadership of President Clinton, these cuts were never enacted, and Federal funding for education has steadily increased. Republicans have finally begun to listen to the American people on education. The Senate Republican FY2000 Budget Resolution increases funding for elementary and secondary education by $2.6 billion over a freeze. But that increase in elementary and secondary education comes at an unacceptable and irresponsible cost. The Republicans proposed a reasonable increase in funding for elementary and secondary education, but at the same time they cut funding for critical programs like Head Start, job training, and aid for college students by at least 10 percent in FY2000 and by more than 20 percent in FY2004. It is wrong to rob Peter to pay Paul, and it is wrong for the Republicans to propose this irresponsible budget. It is irresponsible to increase funding for elementary and secondary education programs in order to improve the Nation's public schools and slash funding that helps young children and college students. It is irresponsible to deny 100,000 children Head Start services that help them to come to school ready to learn. It is irresponsible to eliminate 73,000 summer jobs and training opportunities for low-income young people. It is irresponsible to jeopardize funding that helps make college more accessible and affordable for all qualified students. It is irresponsible to ignore the needs of communities that need help in modernizing their school buildings. Schools across the nation face serious problems of overcrowding. Antiquated facilities are suffering from physical decay, and are not equipped to handle the needs of modern education. Across the country, 14 million children in a third of the nation's schools are learning in substandard buildings. Half the schools have at least one unsatisfactory environmental condition. It will take over $100 billion just to repair existing facilities nationwide. It is irresponsible to do nothing to see that key education priorities will be met, such as reducing class size, improving teacher recruitment and training, expanding after-school programs, and ensuring strong accountability for how federal education dollars are spent. Mr. President, a nation's budget is a reflection of its priorities. The nation's children and families deserve a budget that invests in their priorities--not the priorities of the right wing. Clearly, this Republican budget contains the wrong priorities for the nation's future. It gives priority to large tax cuts for the wealthy, instead of saving Social Security and Medicare, and at the expense of programs for college students, young children, and young adults. I urge my colleagues to oppose this misguided budget. I yield the floor. Mr. HOLLINGS addressed the Chair.

Mr. KENNEDY

Mr. KENNEDY. I thank the Senator, and the Chair. Mr. President, let me just add my voice in support of the Specter- Harkin amendment. Basically, as we all know, the States have waived the Federal Medicaid rights. So they understand that there are Federal interests. I think it is pretty understandable to all of us, because we understand how the Medicaid Program was established. The really compelling interest that was successful in the States that brought about the settlement in the first place related to the health hazards that individuals were afflicted with. This seems to me to be an eminently fair and reasonable balance between the Federal interests and the State interests. It seems to be focused in the areas of health care, and also the prevention of smoking. I think that is basically what the families of this country want. It makes a good deal of common sense. It is consistent with what this whole battle has been about, and this is a well targeted, well thought out, and a very compelling amendment to be able to do so. One of the most disturbing aspects of the Supplemental is the inclusion of the Hutchinson Medicaid Amendment. This issue does not belong in an emergency appropriations bill. If approved, the long-term cost to Medicaid of this amendment could be as high as $125 billion. No serious consideration has been given to the enormous impact that cost could have on national health policy. Instead of being used to deter youth smoking and to improve the nation's health, the language in the committee bill would permit states to use these federal Medicaid dollars to pave roads, to build prisons and stadiums, and to fund state tax cuts. Those are not appropriate uses for Medicaid dollars. Congress has a vital interest in how these federal dollars are used. Fifty-seven cents of every Medicaid dollar spent by the states comes from the federal government. The cost of Medicaid expenditures to treat people suffering from smoking-induced disease was at the core of state lawsuits against the tobacco industry. While the federal government could legally demand that the states reimburse Washington from their settlements, I believe the states should be allowed to keep one hundred percent of the money. However, the federal share must be used by the states for programs that will advance the goals of protecting children and enhancing public health which were at the heart of the litigation and are consistent with the purposes of Medicaid. That is what the Specter-Harkin amendment would accomplish. I am pleased to be an original cosponsor of it. It is a fair and reasonable compromise of this contentious issue. While there were a variety of claims made by the states against the tobacco industry, the Medicaid dollars used to treat tobacco-related illness constituted by far the largest claim monetarily, and it formed the basis for the national settlement. As part of that settlement, every state released the tobacco companies from federal Medicaid liability, as well as state Medicaid liability. Medicaid expenditures heavily influenced the distribution formula used to divide the national settlement amongst the states. In light of these undeniable facts, the dollars obtained by the states from their settlements cannot now be divorced from Medicaid. States are free to use the state share of their recoveries in any way they choose. However, Congress has a clear and compelling interest in how the federal share will be used. In exchange for a waiver of the federal claim, states should be required to use half of the amount of money they receive from the tobacco industry each year to protect children from tobacco and improve the nation's health. If the funds are used in that way, this investment will dramatically reduce future Medicaid expenditures. Under the Specter amendment, at least twenty percent of a state's recovery would be spent on programs to deter youth smoking and to help smokers overcome their addiction. This would include a broad range of tobacco control initiatives, including school and community based tobacco use prevention programs, counter-advertising to discourage smoking, cessation programs, and enforcement of the ban on sale to minors. Three thousand children start smoking every day, and one thousand of them will die prematurely as a result of tobacco-induced disease. Prevention of youth smoking should be, without question, our highest priority for the use of these funds. The state settlements provide the resources to dissuade millions of teenagers from smoking, to break the cycle of addiction and early death. We must seize that opportunity. An additional thirty percent would be used by states to fund health care and public health programs which they select. States could either use the additional resources to supplement existing programs in these areas, or to fund creative new state initiatives to improve health services. Smoking has long been America's foremost preventable cause of disease and early death. It has consumed an enormous amount of the nation's health care resources. At long last, resources taken from the tobacco companies would be used to improve the nation's health. A state could, for example, use a portion of this money to help senior citizens pay for prescription drugs, or to provide expanded health care services to the uninsured. Funds could be used to support community health centers, to reduce public health risks, or to make health insurance more affordable. For years, the tobacco companies callously targeted children as future smokers. The financial success of the entire industry was based upon addicting kids when they were too young to appreciate the health risks of smoking. It would be particularly appropriate for resources taken from this malignant industry to be used to give our children a healthier start in life. Congress has an overwhelming interest in how the federal share of these dollars is used. They are Medicaid dollars. They should not be used for road repair or building maintenance. They should be used by the states to create a healthier future for all our citizens. I thank the Senator from Pennsylvania for yielding this time.