J. Kerrey

Mr. KERREY

Mr. KERREY. The Senator from Alabama's speech was earlier. It was helpful. I have to pick up some groceries on the way home. But I did not find it to be terribly helpful in this debate, saying that Democrats have no accountability, that Democrats are not willing to make hard choices, that we are for the politics of the status quo. That is just bunk. I just stood out on the Capitol steps a little while ago endorsing a Democratic proposal that balanced the budget in 7 years, making very tough choices but without this tax cut. And one of the hard truths that we have to face right now is, the truth of the matter is Republicans in America, Mr. President, not Republicans in this Congress, by the New York Times poll this morning, Republicans in America oppose the tax cut. Indeed, more Democrats in America support the tax cut. And the most revealing thing of all is that the lower the income goes of working people, the more they favor a tax cut. Unfortunately, they do not benefit from this tax cut. Indeed, as a consequence of change in the earned income tax credit, and according to the Republican Joint Tax Committee, every family under $30,000 will have a tax increase. It is remarkable, Mr. President, in addition to not needing to cut taxes, we have got plenty of tough choices to make, and I hope we are able to vote in a bipartisan fashion for tough choices, that break the status quo of deficit financing and move us to a balanced budget. But those are not the only goals that we need to move toward. That is not the only status quo that we need to make. We had another million Americans that moved into the ranks of the uninsured in 1994. We have another 1.5 million that will move to be uninsured in health care as a consequence of what is happening in the health care industry. Almost 50 percent of the babies born in the State of Texas are paid for by Medicaid, working people, Mr. President, as a consequence of the status quo. There are lots of changes that need to be made. I am willing to make tough votes to change the status quo and move to a balanced budget, but not with a $245 billion tax cut that does not benefit the Americans that need to be benefited.

Mr. KERREY

Mr. KERREY. I thank the Chair. Mr. President, several Members, Republicans and Democrats, have come to the floor and have decided to use the bipartisan Entitlement Commission--actually established by President Clinton last year--as either the basis for supporting the reconciliation agreement or the basis for opposing it. My opposition I must say is reluctant. I would love to be able to join with Senator Gregg, Senator Simpson, and others who participated in this effort and understand that the severity of the long-term problems with entitlements is not just Medicare and Medicaid, and other entitlements, but the big one, Social Security. The long-term problem is not something that we can afford to put off. Every year that we wait the problem gets worse. All of us who look at the situation of retirement understand that the sooner you begin to plan the less you have to put away. So those that say we will wait until 1997 to deal with Social Security are not doing beneficiaries any favor. The longer we wait the more severe the problem is, and the more the severe the adjustments we have to make. And we should recognize that when you are dealing with retirement or with health care, if there is a requirement to save money and accumulate reserves, as there is with our trust funds, that you have to do it over a prolonged period of time. Mr. President, the reconciliation agreement does not solve that long- term problem. The appropriated accounts this year are about 26 percent of the whole budget at the end of the 7-year period. We are seeing a decrease in the appropriated accounts--a continuation. I mean it is the most dramatic chart that we have in the entitlement report. I commend it to colleagues who are interested in it, because when you get to the back and see what Senator Danforth, I, and Senator Simpson recommended you can see that you are dealing with real tough choices. So I am not objecting to making tough choices. I am not objecting to saying that I will cast a vote for something that might be unpopular. I am not going to criticize the Republicans, for example, for choosing to increase the eligibility age. I think it has to be increased. But what we observe is a long-term problem. Again, when you say long-term problem the presumption is that we can wait a long time before we deal with it. You cannot because the longer you wait the more serious the issue becomes. Mr. President, I want Members to understand that there are facts here in the Entitlement Commission report, as well as recommendations in the Entitlement Commission, that I believe need to be considered. I regret the President did not take those recommendations and make it a part of his budget. I think we would be in a different shape right now, if, in fact, the observations of the recommendations of the Entitlement Commission were accepted by the administration. But they were not. But there is still bipartisan support for action, and a willingness to risk political careers using facts and using the truth, and hoping the American people trust that we have to make change. In short, Mr. President, the goal for us in this exercise cannot just be to balance the budget because, if all we do is balance the budget, we have other problems that will still need to be addressed. I have identified a second one. The second one is the growing cost of entitlements as a percent of our Federal budget. With all the rhetoric on both sides of the issue, the amount of money that the Congress extracts from the U.S. economy has remained relatively constant over the last 50 years. It went up during World War II, and it went up during the Vietnam war, but it remained roughly 19 percent of GDP. It is unlikely that is going to change. It is likely that is going to remain the same even with the proposal to reduce taxes that is in this piece of legislation. It really does not make a dent in that. You are still going to be pulling about 19 percent of GDP. That means the more that we allocate for mandated programs the less we have; not just for defense but for nondefense appropriations accounts. It severely restricts our ability to build roads, our ability to educate our people, to do training, and to do things that I think Republicans and Democrats can agree need to occur. So not only do we need to balance the budget but we need to interrupt this trend where America is moving in a direction which our Federal Government is moving in--a direction of becoming an ATM machine. Again, time is not on our side. You may say, ``Oh, my gosh. I do not want to increase the eligibility age because that will make me unpopular. I do not want to deal with Social Security because it is too controversial.'' But we have to. We have obligations on the table right now that we cannot meet. We can meet them over the next 5 or 6 years. We are not going to be able to meet them long term. The flaw in the Republican proposal, in my opinion, comes from the need to satisfy a relatively small number of people that campaigned on a promise to reduce taxes. It is the tax cut that makes it imperative to get more over the short term and less over the long term. That is why I think this thing may have run aground. But Americans should not suffer under the illusion that is there is an absence of bipartisan willingness to look at the future, and say, ``We are going to change our laws so as to change that future.'' Not only should we be moving toward the balanced budget, but, second, we need to get consensus that we are going to cap all entitlement programs at a fixed percent of our budget--64 percent this year. I would be thrilled to get an agreement on 70 percent instead of the 74 percent that it is going to be in the year 2002. Third, Mr. President, I have strong objections to this proposal because instead of building a new safety net for a changed economy, which I think we need, we are saying as businesses are downsized they become more productive, and more competitive. But as they do it dictates that we examine our safety net and build a different one. I think on the top of the list, if you are trying to rebuild a safety net, is to change the way we establish eligibility for health insurance in this country. And rather than saying we are going to just change Medicare and reform Medicare, we ought to be reforming Medicare, Medicaid, the income tax deduction, and the VA system--establishing a simplified system of eligibility saying, if you are an American and a legal resident, you are in but you have to participate personally in controls. We are not going to subsidize you, if you do not need to be. We have to, rather than block granting for budgetary reasons, have a new safety net. If we want to remain an aggressive market economy where our businesses have an incentive to maintain their productive edge, we have to have a safety net that enables people when they find themselves out of work to still know that they have health insurance, and still know that they are going to be able to pay the medical bills. I was down in Texas over the weekend and discovered in the State of Texas, a relatively conservative State, that 50 percent of all babies delivered in the State of Texas are paid for by Medicaid--Medicaid, Mr. President. This is supposed to be a poverty program, and it is supposed to be a minimal safety net. The reason that it is increasingly being used by working people is that we do not have a very good and a very flexible program. We are saying, as many Republicans have come to the floor and said, there is something wrong when I have working people without insurance paying a 2.9 percent payroll tax to fund health care programs for some that can afford to pay the bills. There is something wrong with that. But to reconstruct the health care safety net, we cannot just adjust the payment system in Medicare. We cannot just block grant Medicaid. We ought to be saying let us re-establish a fundamentally different way of becoming eligible for health care, and then let us make sure subsidies go to those who need it, and make sure we provide people with the basis as well, as both Republicans and Democrats have talked about, and accumulating the resources to be able to pay for it. Mr. President, if this proposal in addition to balancing the budget fixes the cost of entitlements, instead of the Republicans looking across the aisle and saying we are in the majority, we have looked at this Entitlement Commission report, we agree, we have to control the cost of entitlements, here is the proposal to fix it--if the Republicans had said we now come to the table in an understanding that, as well as the market working right now to control the cost of health care, there are some individuals that are not going to be able to purchase it, that is the basis for Republicans supporting Medicare. We understand that after 65, a lot of people cannot afford to pay the bills because health care gets more expensive. Well, if it is true for 75-year-old people, it is also true for 25-year-old people in the work force. We ought not just be changing Medicare to save money. We ought to reform our health care system so that every single American knows with certainty they are going to be covered. If the Republican proposal did those three things at a minimum, then I would be standing here as a Democrat supporting it. I would love to be able to get to that point. I know there are many people on the other side of the aisle very uncomfortable with the tax cuts, very uncomfortable in particular with the Joint Tax Committee that has disclosed to Americans that every single person with a family income of $30,000 or under is going to have a tax increase. I know they are not comfortable about that and would prefer to have it changed. I know they understand that the entitlements are a problem, that we have to do more, not less, if we expect to have the resources to invest in our future. I know there is the basis to produce a bipartisan reconciliation bill that we could send on to the President hopefully for his signature. Unfortunately, that does not appear to be the direction we are heading. Unfortunately, we appear to be heading in a direction where we are going to sort of rigidly hold on, have a minimum amount of debate, limit the number of amendments offered, pass legislation for the short term and hope the people do not discover we left the long-term problem in place; that we have constructed a safety net that is not adequate for the kind of market economy we face today and unfortunately will have left our children, rather than blessed in the future, still cursed by an insufficient amount of investment.

Mr. KERREY. Mr. President, I hope the Senator from Louisiana was not referring to me in his animal comparison. I regret to say I support this amendment, not because I believe that it is wrong but because I believe Medicare does need to be reformed. I do not believe, in fact, we need another bipartisan commission. We have a bipartisan commission recommendation that lays out what needs to be done long term with Medicare. Unfortunately, in the budget resolution, we do not do that. Unfortunately, in this reconciliation agreement, we do not do it. What we have done is we have identified a short-term need, which is to come up with money to fund a series of tax breaks, and we are using, among other things, significant reductions in Medicare over the next 7 years to do it. And worse, Mr. President, we leave the long-term problem unchecked. If you doubt it, just look at the cost of mandated programs this year versus the cost of mandated programs at the end of 2002. It is one of the biggest reasons that I seriously doubt that this body or the House is going to be able to hang in there and vote these kinds of cuts over the next 7 years. At the end of this budget cycle, at the end of this 7-year period, we will have 25 percent of our budget for appropriated items. That will be $400 billion this year for defense and nondefense, and anybody with just a rudimentary understanding of the budget would know it is unlikely that we are going to be able to get the job done. First of all, Mr. President, it does, as many have already said, try to come up with savings in the short term in order to be able to fund tax breaks. It leaves the long-term problem unchecked. Do not waste another million on a bipartisan commission. There is one that Jack Danforth and I did. It will not be pleasant when you look at the recommendations. The long-term recommendations to phase in changes contain many of the things that are asked for by the Republicans, only even more so, but over a long period of time, giving people a chance to plan. One of the reasons that seniors are frightened by this whole debate is, as many people have already said, their incomes tend to be low. They have a difficult time purchasing insurance and buying health care. It tends to be a very high percentage of their disposable income, and they are terrified that tomorrow they might receive some health care bill that they are unable to pay. Second, as far as generational warfare, it is the concern of their children and of their grandchildren that they may get stuck with these bills as well. So this terror that seniors feel does not come as a consequence of Democratic rhetoric, it comes as a consequence of an honest evaluation of income and likely expenditures. Third, I find objectionable the deals that were made with the AMA, particularly on the House side, to get an agreement over there. Fourth, it does not reform the system and really use the market and allow competition. Mr. President, $152 billion of the savings comes from cuts to providers; $71 billion in increased payments by beneficiaries; $43 billion by reducing payments to HMO's; only $2 billion come from increased use of competitive market forces. Next, rather than taking a step toward universal coverage, which we ought to be doing if we want to have a market economy in the late 20th century, when we say to businesses, ``Go out there and be competitive, try to keep your costs under control and still have a civil society,'' we have to have universal coverage. Republicans now have reached a conclusion that they want to preserve Medicare. I suspect Leader Dole will come and say that his remark last night was taken out of context. If you want to preserve Medicare, that means you recognize at some point the market does not work. Well, it does not work for an awful lot of people--over a million in 1994 alone--who moved into the ranks of the uninsured. We need a safety net that provides universal coverage. The problem, of course, is that to be able to do that, we are going to have to dramatically change the Medicare/Medicaid income tax deduction and the VA. Next, I have heard it said that we want to give seniors exactly what Federal employees have. Please, let us not overpromise again. Our salaries are $133,000 a year. Look at the comparisons. We pay $44 a month; seniors pay $46, and under the GOP plan, it goes to $89. We have unlimited hospital care; theirs is limited. Our prescription drugs are covered; theirs are not covered. We have a deductible of $350; they are at $816. Here are more extensive services under preventive services, an out-of-pocket of $37.50. We do not want to say to seniors--and I have heard it said and I know the marketing is going on and this has been tested very well. Let us not overpromise here. If we say to seniors what we are doing in this proposal is giving you what Federal employees have, there is going to come a substantial and a rude awakening. In conclusion, Mr. President, I hope that in fact a majority does vote for this amendment. I hope we recommit this to the Budget Committee and Finance Committee. I would love to participate now in a bipartisan effort to control the long-term cost of entitlement and mandated spending. I think we are extinguishing our capacity to invest in education, transportation, research, child care--those things you need in an active economy. Mr. President, most particularly, I hope there can be a bipartisan consensus begin to emerge as a result of seeing the value of Medicare, that we need a new safety net that says if you are a citizen or legal resident, you will know with certainty that you are going to be covered. This proposal takes us away from those goals rather than toward it. Therefore, I support the amendment offered by the Senator from West Virginia. I hope that a majority of Democrats and Republicans who understand the short- and long-term proposal will vote for this amendment so we can, hopefully, reach some kind of bipartisan consensus.

Mr. KERREY

Mr. KERREY. Mr. President, Tuesday night in Houston, and last Friday as well, the President of the United States made a comment where he said specifically, ``I had to raise your taxes more than I wanted and cut spending less than I wanted to, which made a lot of you furious.'' Well, the comment made those of us who voted for that proposal even more furious than it made, apparently, the audience to which the President was speaking. Mr. President, the President of the United States has since said that he did not intend to say that the package was bad. He did not intend to mean that he was not proud of the people who voted for it. But he left the unmistakable impression that he would have cut more given the opportunity. The fact is that, in 1993, Congressman Penny and Congressman Kasich presented $105 billion in additional spending cuts after the budget deficit reduction bill was passed. I think it has done a tremendous amount of good for the U.S. economy. It did reduce the deficit--as now estimated, by nearly a trillion dollars. But Congressman Penny and Congressman Kasich, and later myself and Senator Brown on the Senate side, offered nearly identical proposals to cut over $100 billion over 5 years, and the administration opposed it. They did not just send a letter about it. They sent various Members up here, saying this was draconian and it was going to hurt--all the things that are mentioned, typically, when a spending cut is made. Maybe this is part of a triangulation strategy that we hear about a lot. But, Mr. President, it is strangulating the confidence that we have in Congress that whatever it is we do is going to continue to enjoy the support of the President. Now, I do not want to drag it much farther than that. I actually had a very harsh speech that I had written yesterday, and, fortunately, I think both for myself and the President, there was not time to get to the floor to give it. I have calmed down a bit since then. But a larger point needs to be made here, rather than, did the President misstate or not what it was he was trying to do? Not only did Congressman Penny and Congressman Kasich and Senator Brown and myself present spending cut proposals, but the President put together a bipartisan entitlement commission, with 32 people on it. Senator Danforth and I chaired that effort. We presented to the President, in 1994, the recommendations of that commission, and those recommendations are what I would like to talk about here today. They still need the full consideration of this body. Mr. President, it is fairly obvious that this place is still controlled by men. I am a man myself, and so it does not bother me most of the time. But we men behave differently than women in certain things. One of the things women have noticed over the years is that we have a tendency to exaggerate the size of things sometimes. That is, in fact, occurring in this entire budget debate. The Republicans get up and talk about this being revolutionary, and we heard Speaker Gingrich talking about a great revolution, and the Democrats say, no, it is draconian, it is terrible, destructive, and on and on. The American people get kind of confused and wonder what is going on. Mr. President, these are the facts. We will spend $1.5 trillion in 1995, the fiscal year ending September 30. At the end of 2002, under the Republican budget resolution, it will be roughly $1.858 trillion. If you use the Congressional Budget Office baseline, with no change, it is about $2.1 trillion. So it is some $240 billion less. That is a lot of money, but hardly what I would put in the category of revolutionary. Nor is it fair to say they are draconian, and on and on. In some cases, I have had serious disagreements with the way the money is being allocated, but it is a relatively modest change. If you look at the tax revenue generated and total spending over the next 7 years compared to the past 7 years, we will spend nearly $2.4 trillion more, and we are going to have $3.2 trillion more in tax revenue--a lot more tax revenue coming in and a lot more money going out as well. Mr. President, the goal that has been set over and over again by the Republicans in this budget resolution and debate--and last night you heard it again--is that we are going to balance the budget. Yes, that ought to be one goal. There is no question that it is accomplished under this budget resolution. I am for balancing the budget. I would like to be able to vote for the particular resolution that is going to come back to us at some point. In its current form, I will not be able to do it. Mr. President, there is another goal this budget resolution ought to address, and it was identified by the bipartisan budget commission as more troubling than the budget deficit. That is, as a percentage of our budget, overall entitlements--not to the poor, but to the middle class--overall entitlement growth is at an unsustainable level. Today, it is 64 percent of our budget. In 2002, at the end of this resolution, it will be 74 percent of our budget. In 2008, when my generation--the biggest generation in the history of this country--starts to retire, it will very rapidly go to 100 percent--100 percent, Mr. President. The Federal Government is going to be an ATM machine. Some will say that is fine, let it transfer payments out. Mr. President, there are things that we appropriate that not only strengthen our economy but improve the quality of life. I made a lot of money as a consequence of my parents helping to build the interstate highway system. And as a consequence of their grandparents doing the GI bill, I have made a lot of money. This country has made investments in the past that have improved the quality of our life. We spend $1.7 billion a year on parks, and 17 million Americans a year enjoy them, but we are going to cut it back. We are going to cut $1 billion out of the FAA. We already have $3 billion a year in increased costs to shippers as a result of delays. God knows what kind of disasters may occur as a result of underfunding that program. We are going to have a real decline in education expenditures from $34 to $32 billion over the next 7 years. Transportation is going to be cut. We will be spending less on space and research and all sorts of things that we ought to be doing. The reason is, of the $358 billion increase in spending between this year and the year 2002, that incremental increase--all of it, more than 100 percent--goes for entitlements and net interest on the debt. Almost half of it, Mr. President, goes for an item that we have decided we do not want to talk about--Social Security. If you want to have a revolution, let us bring Senator Simpson's and my proposal into consideration. People say, well, let us postpone that, and ``we are going to do it in 1997,'' says Speaker Gingrich. When you are saving money for retirement, time is not on your side. You can exercise, jog, watch your diet, quit smoking, get massages, or whatever else, but you do not get the time back. Every year you wait, that is less wealth you generate. You may want to generate it in a collective pool or a individual pool, as Senator Simpson and I are proposing. Mr. President, to leave Social Security off the table makes it impossible to do what we want to do with this budget resolution--not only balance the budget by 2002, but balance the relationship between mandated programs and appropriated programs. We ought to decide collectively that it is going to be some fixed percentage of our budget, so we have money for schools, so we have money for roads, so we have money for Head Start, or whatever else it is we decide we want to spend it on. Mr. President, when the former chairman of the Appropriations Committee came to this body 35 years ago, 75 percent of the budget was allocated in appropriated accounts; 30 percent was entitlements and interest. The second objective we ought to be setting for ourselves is a big one. It is going to require us to change the eligibility age in these programs from 65 to 70, to phase it in. You cannot afford to do it any other way. It is why I said in the beginning that we describe it as big, either on the positive side or a negative side. But it is kind of a male sort of thing. The truth is that it is smaller than it needs to be. We need to take stock of the growth of entitlements. Otherwise, we are not going to have the money to be able to improve the quality of our lives, whether it is parks, natural resources development, or to increase the productivity of our people and narrow this widening gap that we see right now with the economic haves and have nots. Next, Mr. President, now that Republicans say they want to preserve and protect Medicare, what that means is the market does not work. When I hear the majority leader say the market is rational, the Government is stupid, here is one Government program he does not think is stupid. For people over the age of 65 who depend upon Medicare, the market does not work. The same is true for somebody who is 25, that is out there in the work force today making $8 an hour, being told they cannot have health insurance because they cannot afford it. That is the principle underneath the Medicare Program. What we need to do is to say that we are going to radically alter-- what a revolution--radically alter the system of eligibility and say to every American, if you are a legal resident or American citizen you are in. You do not have to doubt that you will have coverage. The goal of universal coverage is just as desirable today as it was in 1993 and 1994 when we debated it all the time. Medicare, Medicaid, the income tax deduction, the Veterans Administration programs are fiscal political and structural barriers to getting that job done. Democrats who for 35 years have supported Medicare because we understand the market does not work, need to say to recent convert Republicans that to get everybody covered we have to do things much differently. That would be a revolution. That would be something big that men and women would seize properly. The last thing I say, Mr. President, contained in the debate yesterday in the Finance Committee was lots of conversation about the need to promote growing. I am for it. We should have a debate about fundamental tax reform. You cannot cut tax on those who have stocks and bonds and have a substantial amount of our income coming from stocks and bonds while raising taxes on people that make $7 an hour, depending on the earned income tax credit. It is not fair. It does not wash. All you can hope is they do not notice and they do not vote as a consequence. We are not being asked to reduce the capital gains tax by low-income people who may benefit when they sell their home. We are being asked by wealthy Americans who have stocks and bonds and who have accurately said, in my judgment, that the economy does need to grow through productive investment. We regard productive investment as replacing our income tax with a progressive consumption tax. It gives Americans an unlimited opportunity to save money and accumulate wealth over the course of their working life and promote economic growth at the same time. Do not put a capital gains tax cut out at the same time we cut and raise taxes for people that are at or below $25,000 a year, and to use that money--they do not use it for television sets. I heard a colleague who is critical of the program say all they are doing is buying television sets. They use that few dollars to pay medical bills, buy cars that have 80,000 miles so they can go to work and drop the kids at the child care center. Many are using it to make a downpayment on rental deposits. They are using it the way the working people ought to, to consume the things that are increasingly making it difficult for them to cover their costs. Finally, I say it again, I wish that the Republicans on the other side that currently control the majority of this Senate, I wish they would turn across the aisle and say we should start negotiating. What do you want, Senator Kerrey? My answer is simple. What I want is to fix the cost of entitlements as a percent of our budget. What I want is to say now you support the idea that the marketplace does not work, agree that we will get universal coverage so every American knows they are covered in health care. You cannot make the system work any other way. Rather than block granting Medicaid to the States, we ought to bring that and say to the States that $40 billion we will pay for, but you have to take $40 billion, whether for education, job training, transportation--something you do well. We have agreement; we will use the marketplace. We do not have to get down and fill the air with rhetoric about Government taking over health care. We know the market is doing a good job of controlling cost. There is consensus that that is what ought to be done. Unless we change our notion of how people are going to become eligible for health care, you cannot get that job done. Last, I say for my friends on the other side of the aisle, there is consensus on our tax system, whether it is the U.S.A. tax that Senator Domenici and Senator Nunn have worked on or other tax proposals, we know we should not just be concerned about how much money we generate to pay whatever is mandated or whatever we want to appropriate. We need to think about generating the money so the economy grows and so Americans out there who are producing the tax revenue have the opportunity to save enough to accumulate wealth over the course of their working life. Finally, Mr. President, I hear an awful lot, and I put out a lot myself from time to time about how bad the Government is and how terrible it does. I want to declare to my colleagues and people I represent in Nebraska that one of the reasons I stay in the job and am excited about the job, you can use the Government of the United States of American to save lives. It saves lives. It will be interesting to see what Colin Powell says when we ask him about health care. The Government of the United States of America, the hospitals that provide health care for U.S. Army servicemen have saved lives. Those people are Government employees. You could change lives, enrich lives, improve lives. That is what it ought to be about. We need to improve the Government and make it operate more effectively, but we need to tell the American citizens there is no free lunch in this deal. This Government in this country cannot be any better than our people are willing to make it. Our people are willing to make it a heck of a lot better than we allow. We are frightened of universal health care. We got our brains beat out in 1993 and 1994. We do not want to talk about it. The American people want to talk about it. We do not want to talk about fixing the costs of entitlements based on facts and truth as the Speaker calls for. We know if we give the facts and truth, we have to do Social Security, we have to change eligibility age, we have to change the method of eligibility. Instead of working Republican and Democrats, I just hope that in the next 60 days or however long it takes to do this deal, rather than looking to always negotiate with the White House and try to cut a deal--I fear that more than I do anything right now--look across the aisle and work with us. We are prepared to cast the tough votes. We want to embrace the future. We are not for the status quo. We are for change. We want to alter the course of our Nation's future and give investments to our children and be able to give them a brighter future than they have right now. We are prepared, I believe, to cast the tough votes to change the course of this Nation's future, not based upon some calculation of triangulation, trying to determine whether the President is more popular or less popular, trying to figure how to get reelected, but trying to decide what is best for the people we represent, and most important what is best for our future. Every single day of our lives has Americans--I do not care what your status is, what your name is, where you live--not a bad exercise to do as opposed to jogging is get up in the morning and go to bed at night and thank God for the things we have. We are a wealthy Nation, blessed with enormous freedoms and opportunities. I got out of high school in 1961. The cold war was on and our class thought whether we would go in the Army, Navy, or Marine Corps because we knew we were likely to go to Vietnam. That is not the future of today. There is tremendous opportunity. Seize that opportunity rather than hyperventilate and exaggerating each other's position. Seize the opportunities and try to put in place a change in the law that sends this Nation in a different direction, that does not just balance the budget but satisfies other needs and concerns and desires that the American people have today. I yield the floor.

Mr. KERREY

Mr. KERREY. Mr. President, I have said about all I need to say on this subject, having talked on it previously. I just say again, I would love to vote for a piece of legislation. I hope the conference committee comes back with one in a form I am able to vote for it. I am prepared not to just embrace the future but to make a bet, based on my strong belief that there is tremendous opportunity in education, tremendous opportunity for jobs in these new technologies. But there are 100 million households in this country and each one of those individual households has very little economic power. When it comes time for them to make a purchase of cable service or phone service, when they are buying information services they are not buying at $1 million a month. They are buying at $20, $30, $40, $50 a month; very little economic power, very little. And the 16,000 school districts in America that operate individual schools at the local level, they have very little economic power. Both as a consumer of telecommunications services and as somebody who has been working with school districts in Nebraska, trying to get them hooked up to the Internet, trying to get them enhanced information services, I can tell you that when you do not have much economic power you do not have much choice. You do not have much leverage. You do not have much opportunity. These guys who are doing these deals, they have real power. When you have a couple of billion dollars you can leverage an awful lot. But when you do not have much economic power you cannot. The importance of this is not only consumer choice, not only the kinds of decisions that our citizens will be making as a consequence of who tells them what is going on in the world--and they are getting fewer and fewer numbers of people telling them what is going on in the world--not only is it relevant for those individuals in the household, but it is terribly relevant for our economy. Our economy has been robust and develops as a consequence of a competitive environment. The competition that matters the most is that entrepreneur who starts in business, who says, ``I would like to approach that household, I would like to sell packaged information services in the households in Omaha, the households throughout this country, I would like to be able to approach those consumers and try to give them a competitive option and a competitive alternative.'' Those are the people that this legislation ignores. This legislation has been put together with far more concern about the national companies, the regional companies--whether it is long distance or local--who come here and say this is what this is going to do for me, this is what it is going to do for the other guy. This has been a balancing act from the beginning, between a range of corporations, long distance and local versus cable versus publishers versus all these big guys and gals who come into Washington and have access and are able to come and talk to us. This has not been put together by the entrepreneurs of America. It has not been put together by the consumers of America. It has not been put together by people who are either going to create the jobs--and most of the new jobs are not going to be created by these megacompanies. They are going to be created by the smaller startup companies. It has not been put together, in my judgment, in a fashion that is going to enable competition to really produce the benefits this Nation, I think, deserves and needs and expects.

Mr. KERREY. I have the floor, Mr. President. I yielded to the distinguished Senator from Montana to ask a question and we have gone beyond that. I am perfectly willing to have a debate about the comparative analysis between the Homestead Act and private property and franchises granted to phone companies to have a monopoly to deliver a local telephone service or to a television station or radio station to broadcast over public airspace. I am perfectly willing to acknowledge certainly there is a similarity in having granted that franchise that people make substantial investments.

Mr. KERREY. I wonder if my friend from North Dakota will yield?

Mr. KERREY. I ask the Senator from Montana a question: Does he believe that the people of the United States, having granted a franchise to somebody to operate a service using a piece of the frequency bandwidth, should say, ``You own it, do whatever you want? It is yours, have some fun with it. If you want to show pornography on television at 6 o'clock go do it.'' I am asking the Senator from Montana, does he believe that the people's laws should be written to protect against pornography, or does he believe we ought to change the laws to say, no, you own that, we get rid of pornography laws, let the market take care of it?

Mr. KERREY. First of all, I ask my friend from North Dakota, Mr. President, is it not the case that one of the arguments we have heard all along for this bill that we are going to get more competition? Are Time Warner and Turner competitive?

Mr. KERREY. It is not the same. Mr. President, I ask the Senator from Montana, did the Senator believe we should not pass laws restricting what broadcasters can put over the airwaves? We do not have similar laws for people in their home. I can engage in any kind of discussion I want inside my house. Do you think, I ask the Senator from Montana, should we have pornography laws in place or let the market dictate--they own it, for gosh sakes. Let them put whatever they want over the airwaves. Does the Senator from Montana believe the Government should not write decency laws in place to protect the communities?

Mr. KERREY. Will we not get less competition as a consequence of bringing these two companies together?

Mr. KERREY. I am pleased to acknowledge that is the case, in fact. No question that it is true that when we give somebody a monopoly franchise, when we give them that and say it is yours, there is no question they have to make an investment.

Mr. KERREY. If you want to talk of the Homestead Act, it has many specific requirements for the individual to develop, and if they worked the land and developed the land, they owned the land.

Mr. KERREY. I am happy to yield to the Senator.

Mr. KERREY. Mr. President, first of all, I thank my friend from North Dakota for this presentation. I would like to be able to vote for a piece of legislation. I have spent a great deal of time on telecommunications. I am prepared to not only embrace the future but place a bet that there is tremendous opportunity for us in technology. Many of our systems need to rapidly acquire the transmission capacity to use these new technologies, as the computer moves from a calculating device to a communication device--I think, especially, for example, for our university systems. I just had a meeting a couple of weeks ago in Nebraska with an individual with a very large software company who happens to be from a farm not far from Ashland, NE, and who came back to try to help us bring computer technology into our university. It is a tough transition. The university is sitting there with a real problem. They [[Page S 15148]] have increased enrollment as people recognize that a college degree is worth an awful lot more than a high school degree. Student enrollment has almost doubled in a 4-year period as that demand goes up. In addition, what a person needs to know coming out of college is that there is a doubling, tripling, quadrupling of the requirements of the universities and they cannot get the professors and instructors to do more for less. The tax base will not allow us to build more buildings rapidly enough to be able to accommodate the demands. Only one thing can do that for us, and that is computer technology. We are trying to figure out how to get these systems into an old system that does not replace the old system but augments it. Well, there are real serious problems trying to make those adjustments. We just got a couple of grants to match local commitments for three schools in the State through the Department of Education, and that will leverage a great deal of the private sector, as well as local money, to get the job done. But those are a couple of schools amongst many who are trying to bring this technology into the educational environment. I was pleased that a majority of this body, the Senate--I do not believe it is in the House bill--but in the Senate language we included a provision I cosponsored which provides for preferential rates for local K-12 schools. Connectivity may represent only 17 percent of the total cost of bringing information technology into local schools, but it is an awful lot of money. It is a principal barrier for many communities that do not, as I say, have competitive choice; they do not have competitive choice now, and they are not likely to see it for a long period of time. So I do not want anybody to suffer under the illusion that I do not support change. I believe our telecommunications laws need to be changed. I am prepared to embrace the future. I am prepared to put down a bet. I am prepared to help institutions from the K-through-12 environment through the postsecondary, and indeed for Congress to bring this technology in so it becomes part of our core competency so that we are able to improve our efficiency. We are going to debate in reconciliation the earned-income tax credit. One of the biggest reasons EITC has had trouble has nothing to do with the merits of being able to help people at the lower end of the economic scale--a woman, for example, that you see at your checkout stand at the grocery store making $7, $8 an hour, $12,000 to $15,000 a year, trying to support a couple of kids. That is better than being on welfare. So we want to refund your taxes and give you a couple thousand dollars so you can buy health insurance. Well, the IRS has a tough time doing it because it does not have a good information system. I am prepared to embrace technology and place a bet because I believe there is tremendous merit in it. However, if we change the law to produce less competition, not more, to concentrate the power into fewer and fewer hands, to concentrate not only the power of economic decisions--but, I point out to Americans, it will concentrate the power of the individuals to be making decisions about what to tell us is going on in the world--these deals being done in anticipation of this law being changed will present Americans in their homes with fewer news choices. Fewer people will be telling us what is going on out there in the world. I would love to be able to stand on this floor and vote for a piece of legislation that changes the law. I believe strongly, first of all, that there needs to be preferential rates for education. I believe strongly what the Senator from North Dakota is saying, that concentration in television stations would be a mistake. I believe strongly, as well, that we are far better off, instead of having a 10- part test that the Federal Communications Commission is going to look at to determine whether there is competition, to have the Department of Justice with a role in making the decision regarding entry by the regional Bell operating companies into the long distance market. Mr. President, earlier, before I came to the floor, I was discussing with staff the reconciliation bill, trying to prepare myself for that debate. There is a lot about it that we do not know yet. We have not seen the details on the Medicaid proposal or the Medicare proposal, and there is a lot of discussion on the tax side of it and so forth. One of the things I have said to staff is--and I will say to the people at home when discussing this--before we can talk about what kind of a budget we have here in Washington, we have to have jobs and growth and income out there in the private sector. That is where the money comes from. One of the most remarkable constants in this town over the last 70-80 years, really--is that the percentage of money that we withdraw for Federal expenditures from the economy has stayed, except for World War II and the Vietnam war, roughly 19 percent. It is about $1 out of $5 we bring to Washington for a variety of things. One of the disturbing things I find is that we are transferring more and more of that and investing less of it. Almost 7 cents out of every 10 cents, or 70 cents out of every dollar today, is transferred out for retirement, health care, or other sorts of things. That is a real concern. We now know there is a great deal of consensus--and some may not believe this, but I believe that it is important for us to have laws, whether it is the regulations we have or the tax laws we have, and it is important for us to have expenditure patterns that produce economic growth. Without economic growth, without people out there that are willing to invest money and willing to run the risk, whether it is a big or small business, it seems to me that we have serious problems. Indeed, during the week that we took off to be at home last week, the Census Bureau came out with numbers that showed that as a result of the economic growth that we have been enjoying in the last 15-some months, we have seen the rates of poverty drop--not just the rates of poverty, but the number of people who are trapped in poverty has decreased. In almost every State--certainly in Nebraska--as a result of economic growth, we saw a substantial decrease of almost 20 percent in the number of people who are in poverty. Now, the alarming thing in that--we know if we have rules and regulations and tax structure and expenditure patterns that produce economic growth, which we have to constantly watch and make sure that we have, if we have economic growth then we do see the boats of those who are poor begin to lift, a good piece of news. However, the Census Bureau said there is a continuation of the widening between the economic haves--those in the work force, not on welfare, at the lower end of the economic spectrum --and those like Members of Congress that are at the higher end of the economic spectrum. There is a widening gap. The market growth all by itself does not seem to be fixing that problem. One of the downward pressures upon wages in this country is the concentration of power. No question about it. You cannot read whether it is a bank merger or a megamedia deal that the Senator from North Dakota talked about earlier, every single one of the transactions talks about thousands of people being laid off. Every one. You have the Time-Warner-Turner deal up there earlier, that was the most egregious example, because they said 5,000 to 10,000 jobs would be lost. However, the good news is Ted Turner will get $20 million a year for 5 years and a convicted felon will get $50 million--Mike Milken. Workers out there are saying, well, we are doing everything we are supposed to be doing; should the laws of this country be written so that people can come in and merge the deal? And maybe it is a good deal. I am not coming down here proposing we change the law to prohibit this, but it is painfully obvious that inside of this transaction we are creating something that will create significant problems: 5,000 to 10,000 people being laid off, and a couple of guys making a heck of a lot of money. It is not like we are talking about somebody starting a chain of restaurants or somebody--a doctor or somebody--that started a business from scratch. These are companies that made their money as a consequence of a Government franchise. They were given the right to broadcast. They were given the [[Page S 15149]] right to operate cable companies. They did not go out there and start this business out there in the wild blue yonder.

Mr. KERREY. One of the things the public needs to understand, it seems to me, is that these companies have been given public franchises. They made their money not as a consequence of going out and starting a business and trying to get customers to buy their product. Their business began by coming to Washington, DC, and getting a public franchise, in many cases a monopoly franchise. The phone company is a monopoly. It is not a competitive business. It is not a farm in North Dakota or a manufacturer in Nebraska. This is not a person who said, ``Gee, I have an idea. I want to go to my bank, borrow a little bit of money, put a little bit of my money on the line, go into business and get customers to buy my products.'' You have 12 stations on that list on the left. These are franchises granted by the people's Government to these businesses. In the case of each of these stations, even if some of them do not make any money, just by holding a contract with the Government, the franchise that they have been given has value. They sometimes sell these stations for 20 times earnings simply because people know that there are a limited number of franchises. There are only so many that we can grant to these companies. So they own something that the people have given them, they have made money as a consequence of the Government having granted them a license, and now they come in and object, very often, to us putting rules in place. They say, ``Oh, no, let the market take care of this.'' They did not make their money off the market to begin with. Certainly, they are out there selling and certainly there is a competitive environment. It seems to me, however, that it is a different kind of business than most small businesses and most entrepreneurs and most free enterprise capitalists who start off and try and engage in the competitive exercise of producing revenue from customers.

Mr. KERREY. Mr. President, I ask the Senator from Montana, what is the point? I acknowledge that is the case.

Mr. KERREY. I can answer the question, now I understand what the Senator is saying. You are saying that bandwidth and a piece of real estate are the same? They are not the same. In that regard they are not the same. The people's airwaves are licensed.

Mr. KERREY. I wonder if my friend will yield for an additional question.

Mr. KERREY. I wonder if my friend also will talk about something else that I think is terribly important. That is, all of us, when we go home and talk to people who are working, they feel a great deal of insecurity about their jobs today. As I saw that announcement, it seems to me I heard them say that there may be somewhere between 5,000 and 10,000 fewer jobs as a consequence of this merger, that they are expected to have some savings, as they call it, as a consequence. I believe I also saw Ted Turner is going to get $20 million a year for 5 years and Mike Milken got $50 million for shaking hands, none of which I doubt will benefit those people who will lose their jobs. James Fallows the other morning talked about the fact that a single corporation, Boeing, laid more people off in the last 5 years than every corporation in Japan has over that comparable period of time. What is going on, I ask my friend from North Dakota? We heard all through this debate that this piece of legislation was going to create jobs, that we are going to get more opportunity, that this is going to be good for the American worker? Do you see it that way?

Mr. KERREY

Mr. KERREY. Mr. President, this moment comes only after hours of hard work by Chairman Chafee, Senator Kempthorne, Senator Baucus, and Senator Reid. I want to take this opportunity to thank them for all of their commitment to this much needed reauthorization. Coming to agreement on this bill has not been easy. It is the product of many different points of view and carries important public health protection while providing reasonable regulatory relief for small communities. Last year I became involved in the safe drinking water discussion because it is critical to the State of Nebraska. Ninety percent of our public water systems serve communities that are 2,500 or less in population. Those communities need and deserve flexibility to achieve the safest water possible for their citizens. This bill strikes an even balance between providing States with flexibility and the ability to affect decisionmaking; and allowing EPA to provide guidance and regulation. I am an advocate of cost-benefit analysis which this bill contains. It allows public water systems to allocate their limited resources to those contaminants that will cause the greatest threat to public health. I know the concept is a tough one to write into legislation and I expect there will be some, including me, that want to make small changes. Overall, I have to say the language looks fair and I believe this bill achieves a carefully crafted balance. For the last 2 years I have led the fight to keep EPA from publishing a drinking water standard for radon. The reason I did this is because the known health threat for radon is through inhalation, not ingestion. The greatest public threat from radon in drinking water is when you're in the shower. If left to the current process for setting standards, EPA would set the level for radon well below the level found in the air outside. The result of that standard would cost Nebraska's communities millions. I am quite pleased to see that the bill includes language that provides a permanent fix for the radon in drinking water issue. The Safe Drinking Water Act exists to protect public health. In reviewing how EPA sets standards I saw a need to involve the Department of Health and Human Services and the Centers for Disease Control. This bill includes an active role for HHS and I strongly support that. In fact, I would like to see a larger role for HHS and I'm willing to work with the chairman on that point. Again, I would like to thank Chairman Chafee, Senators Kempthorne, Baucus, and Reid and let them know that I am committed to helping them see this bill pass as quickly as possible. It is important to Nebraskans and all Americans.

Mr. KERREY

Mr. KERREY. Mr. President, this moment comes only after hours of hard work by Chairman Chafee, Senator Kempthorne, Senator Baucus, and Senator Reid. I want to take this opportunity to thank them for all of their commitment to this much needed reauthorization. Coming to agreement on this bill has not been easy. It is the product of many different points of view and carries important public health protection while providing reasonable regulatory relief for small communities. Last year I became involved in the safe drinking water discussion because it is critical to the State of Nebraska. Ninety percent of our public water systems serve communities that are 2,500 or less in population. Those communities need and deserve flexibility to achieve the safest water possible for their citizens. This bill strikes an even balance between providing States with flexibility and the ability to affect decisionmaking; and allowing EPA to provide guidance and regulation. I am an advocate of cost-benefit analysis which this bill contains. It allows public water systems to allocate their limited resources to those contaminants that will cause the greatest threat to public health. I know the concept is a tough one to write into legislation and I expect there will be some, including me, that want to make small changes. Overall, I have to say the language looks fair and I believe this bill achieves a carefully crafted balance. For the last 2 years I have led the fight to keep EPA from publishing a drinking water standard for radon. The reason I did this is because the known health threat for radon is through inhalation, not ingestion. The greatest public threat from radon in drinking water is when you're in the shower. If left to the current process for setting standards, EPA would set the level for radon well below the level found in the air outside. The result of that standard would cost Nebraska's communities millions. I am quite pleased to see that the bill includes language that provides a permanent fix for the radon in drinking water issue. The Safe Drinking Water Act exists to protect public health. In reviewing how EPA sets standards I saw a need to involve the Department of Health and Human Services and the Centers for Disease Control. This bill includes an active role for HHS and I strongly support that. In fact, I would like to see a larger role for HHS and I'm willing to work with the chairman on that point. Again, I would like to thank Chairman Chafee, Senators Kempthorne, Baucus, and Reid and let them know that I am committed to helping them see this bill pass as quickly as possible. It is important to Nebraskans and all Americans.

Mr. KERREY

Mr. KERREY. Mr. President, I rise in opposition to this amendment. I believe the intent to preserve the Job Corps is a good intent. The Job Corps in the main has been a program that has had a substantial amount of success. However, the purpose of S. 143, of this piece of legislation, is to give not just the States more flexibility but provide, for the first time, taxpayers with a real system of accountability, requiring States to develop a plan, present benchmarks for that plan and suffer monetary penalties if they do not meet the objectives under the plan. This says we are not just going to block grant money back to the States and allow them to willy-nilly spend the money. This legislation creates, for the first time, an accountable system and allows Governors and people in the States to preserve their Job Corps Program, but it says that we are going to transfer primary responsibility for any Job Corps Center to the State in which the Job Corps Center is located. States rather than the Federal Government under this legislation, we believe, are in the best position to manage and operate these centers and, most important, to integrate them with their statewide work force development system. I would actually make the case that this is a good area for us to begin to consider what kind of swaps we might be able to work with the States entirely. We are not only talking about giving the States responsibility. We are collecting a lot of taxpayer money here and shipping it back to the States to do a function that I believe is largely something that the States do better than the Federal Government anyway, which is to work with small business, to work with big business, to work with educational institutions to try to develop programs that will help individuals acquire skills they need to either get in the work force for the first time, which is typically what Job Corps does, or to acquire the skills to enable them to move up the economic ladder. I actually would love to get into a debate, into a discussion as we talk about shifting more power back to the States about whether we want to not just shift power back to the States but whether we want to shift all funding responsibilities. I think it was a mistake for us to block grant, for example, Medicaid and give Medicaid back to the States under a block grant program. I did not support the welfare bill because I do not think income maintenance programs can be run by the States. But some kind of a swap as we are trying to decide what does the Federal Government do well and what do the States do well it seems to me to be appropriate rather than just assuming that everything ought to be shifted back to the States. Some things the Federal Government does quite well. One of them, however, Mr. President, I do not believe is in the area of job training and economic development. There I believe very strongly the States should be given the principal responsibility and be given not just flexibility but as long as they are asking us for tax dollars that we on behalf of our taxpayers need to hold them accountable for what is going on. Again, this legislation, S. 143, as I said yesterday when I spoke on it, is one of the very small number--in fact, I only have two on my list right at the moment--of changes in the law where I am certain a couple of years from now people on the street in Nebraska are going to come up and say, ``You know, that work force development legislation, I have a job today because of that. I am earning $5,000 more a year because of that. My family survived as a consequence of that legislation.'' This piece of legislation will produce real change that people will appreciate at the local level, where they are asking increasingly, what is this Congress all about? What are you doing that is relevant to our lives? The other one, I point out again for emphasis, is S. 1128, the health insurance reform legislation. Mr. President, [[Page S 14967]] 25 million Americans will benefit if we end the practice of excluding people on the basis of preexisting conditions and allow people to port their insurance from one job to another. Last year, in the debate over health care, it seemed no one was for that, and this year it has become popular to suggest it; 25 million Americans benefit from that. Again, by coincidence, it is sponsored by the Senator from Kansas and the Senator from Massachusetts. S. 143, like S. 1128, will enable you in townhall meetings to have people stand up and say: This one made a difference in my life. My family is stronger; my income is higher; I have that job; I have adjusted to the marketplace; I have skills and am able to do things I was not able to do before. So those who are wondering whether or not you are voting against Job Corps, you are not voting against Job Corps by voting against this amendment. Job Corps is still alive under S. 143. We do not kill Job Corps with this proposal. I have a letter--I suspect all my colleagues do--with a very impressive list of many of my friends here in Washington, DC, advocacy groups urging me to vote for this amendment. I will vote against this amendment and say to my friends and those at-risk youths I believe the States will in fact do a much better job. We have a Job Corps facility in Nebraska. My guess is my Governor is going to say it does a good job; they are going to integrate it into their plan; they are not going to shut down the Job Corps Program in Crawford, NE, but they are going to integrate it into their development program. If it fails to do the job, Mr. President, they will know that they cannot come back to Washington and have the Congress bail them out. They will know if they do not do the job, they will have to turn to their legislature and their own Governor and try to make a losing program still get funding by the taxpayers. So I believe this amendment should be defeated because I think it actually undercuts long-term the support for the Job Corps Program. It is much more likely that this particular piece of legislation does the right kind of empowering, does empower people at the local level, empowers small business to participate in economic development markets, enables us to turn to taxpayers and say these 90 different job training programs have been consolidated into one and we have tough requirements for benchmarking and tough requirements for standards. You know that you are going to get your money's worth in this program and much more likely that taxpayers will be satisfied as well. Perhaps most important for me, S. 143 is going to empower people at the local level to get involved, trying to figure out what we can do to make sure that half of the graduating class that goes directly into the work force has the skills that the market says they need in order to get a job. Increasingly, I talk to citizens who say: We are cut out of it; we do not seem to have much power, much opportunity. We try to get to our school boards to get help but we are not able to. Mr. President, I request 2 additional minutes.

Mr. KERREY. I say in conclusion, Mr. President, I think the amendment is well intended and I understand there is strong support for the Jobs Corps. I have been a strong supporter of Job Corps as well. But it is much more likely to survive if the taxpayers say: We are getting our money's worth if it is integrated into the State plan for job training and economic development. So I hope my colleagues who support Job Corps will oppose this amendment and make sure that S. 143 does in fact empower the people at the local level.

Mr. KERREY. It is entirely possible that you are going to get situations where Governors are less friendly to the Job Corps than I would be or he might be, I say to the Senator from Pennsylvania, but one of the things that I have a difficult time with in general when it comes to Federal programs is people at the local level say: We know this thing is not working but the power to determine whether it survives reverts back to Washington. And again I wish to say for emphasis there are some things that I do not want to shift to the States. I do not want to shift income maintenance to the States. I do not want to shift Medicaid to the States. I would like to empower people to make more decisions when it comes to health care, empower them to make more decisions. I do not want the Federal bureaucracies to control all the decisions, but when it comes to job training and economic development I really see it as a State role. I would love to get into a discussion of how we get a swap with the States taking over things that are Federal responsibilities but saying to them where it is a State responsibility, you are going to be required to come up with your own money. I would say to the Senator from Pennsylvania as well----