Frank Pallone

Mr. PALLONE

Mr. PALLONE. I appreciate the gentlewoman for speaking up as she did. I think you are absolutely right, that one of the, if not the, major benefit from this continuing resolution was the fact that it establishes the President's and the Democrats' priorities with regard to Medicaid, Medicare, education, and the environment. What you were saying particularly about Medicaid and Medicare, I wanted to point out, I see that our leadership is here and I want to yield to them, but I would like to point out at some point how this budget conference actually makes the situation even worse with respect to some aspects of Medicaid and Medicare. It was not an improvement. It made it worse for our area hospitals. resignation as member of committee on science The SPEAKER pro tempore (Mr. Barr) laid before the House the following resignation as member of the Committee on Science: Washington, DC, November 18, 1995. Hon. Vic Fazio, Chairman, House Democratic Caucus, Washington, DC. Dear Chairman Fazio: I hereby resign my seat on the Committee on Science. Sincerely, Pete Geren, Member of Congress.

Mr. PALLONE. The gentlewoman can speak as long as she likes.

Mr. PALLONE. Absolutely.

Mr. PALLONE. Mr. Speaker, I will try not to use the entire hour this evening. But I did want to get to address the House tonight because I do feel that the two major bills or resolutions that we passed today are rather significant. First of all, the continuing resolution, which, as I think most of us know, allows the Government to continue to operate, prevents the partial shutdown of the Federal Government, which forced many Federal employees to go home and not provide the services that they normally provide to the public. Second, I would like to address the budget reconciliation or the budget bill that was passed today in final form before it goes to the President, which obviously seeks to plan or map out our budget priorities for the next decade in this Nation. I have to start out by saying with regard to the continuing resolution and the effort which was successful today to prevent the continued Government shutdown, Mr. Speaker, I was very pleased to see that it was passed. I think it was very wrong to have the Federal Government partially shut [[Page H 13637]] down. There were Federal employees who were home, I guess, for almost a week. They were not working, but of course were going to be paid anyway, and there were many hardships, if you will, for Americans who wanted to sign up for Social Security, for Medicare, for veterans' benefits, those who wanted to join the Army at the recruiting stations; all of these things were prevented over the last few days as we argued in the House and in the Senate over our budget priorities. As happy as I am over the fact that we were able to come to an agreement on that continuing resolution and the fact that the Government is back to work, I do not think it was necessary to close the Government down, and I hope it does not happen again. Mr. Speaker, I do not really think that tonight is the place to talk about who to blame, but there is no doubt in my mind that the reason for the partial shutdown was because Speaker Gingrich and the Republican leadership were determined to impose their own ideology about the budget on the Congress, and on the Democrats, and on the President, and this is really an unprecedented situation. In the past, when we have had disagreements on the budget between Democrats and Republicans or between the President and the Congress, we have not prevented the Government from operating because of our ideological differences. Essentially what happened today was that the continuing resolution was adopted with language that said that the Congress will try to achieve, and the President will try to achieve, a balanced budget no later than fiscal year 2002, or 7 years from now, and that the balanced budget must protect future generations for such important priorities as Medicare, Medicaid, education, and the environment, and there are others. Well, if you look at this resolution, what it basically says is that we will adopt, or we will try as a goal, to achieve a 7-year balanced budget, and we will try in the context of that 7-year balanced budget to make sure that we do not cut Medicare, that we do not cut Medicaid too much, that we provide adequate funding for the environment and adequate funding for education. Well, frankly, Mr. Speaker, we knew that this was the reality a few weeks ago. We all were very much in favor of a balanced budget, and Speaker Gingrich felt that that budget should be balanced in 7 years. We all were very much in favor of trying to make sure that certain programs were protected, but the President insisted that Medicare, Medicaid, the environment, and educational programs, in particular, be protected. So, if we knew that 2 weeks ago or 1 week ago, and if those are still the goals that we are trying to achieve, why was it necessary to shut the Government down? It was not, and I hope it does not happen again. I hope that over the next few weeks, as these budget priorities on which there are differences are worked out and negotiated, that we do not find ourselves on December 15 in a situation again where the Speaker and the Republican leadership says, ``Look, if you don't meet our goals or our priorities, we are going to shut down the place again.'' It is not necessary. We can continue to work while we work out our differences over the budget. Now, the second thing that happened today is that we passed the budget reconciliation or the Republican leadership budget bill. It was passed without the support of most of the Democrats. I opposed it. And the reason why the Democrats, or most of the Democrats, opposed it and the reason why President Clinton opposes it is because it essentially provides tax breaks, if you will, tax cuts or tax breaks, primarily for wealthy Americans to the tune of $245 billion, and it takes those tax breaks basically by cutting funds from Medicare and Medicaid as well as for education and environmental programs. So what the Democrats are saying, what President Clinton is saying, what I am saying, is that we have to go back; now that this budget has been passed, the President will veto it; we have to go back and negotiate a balanced budget over the next few weeks that will not cut Medicare and Medicaid so severely and that will make sure that there is adequate funding for education and also for the environment. Just to give you an idea of some of the problems with this budget, when I talk about increased tax breaks for wealthy people, at the same time the budget actually provides tax increases for working people and people at a lower income but who continue to work, and just as an example of that, Mr. Speaker, I have a statement, if you will, or a phrase from the Citizens for Tax Justice which did a distributional analysis of the conference or budget agreement, and it shows the following, that the average tax cut for those in the top 1 percent of taxpayers who get a tax cut would be $15,438, but 99.7 percent of all taxpayers in the bottom fifth would have a tax increase or see no change. For those in this group, who have a tax increase, would see their taxes go up by an average of $173 a year. So here we have it, really for the first time that I can think of in American history, we are passing a budget that is going to give these tax breaks to wealthy Americans but actually increases taxes on working families or lower income families who are still working and still paying taxes. Now you might say to yourself how is it there is a tax increase on lower income people. Well, basically the reason for that is because of the cuts in the earned income tax credit. The earned income tax credit is basically something that was implemented a few years ago in a bipartisan way to try to encourage people to get off welfare and to start working and paying taxes, and so, therefore, people in a lower income bracket who are still working get a tax credit essentially to encourage them to continue working rather than go on the welfare rolls. Well, right now in this budget, the conference agreement, the changes in the earned income tax credit will basically hurt 4 million childless workers who have incomes less than $9,520. That type of person, the childless worker, if you will, loses up to $324 per year. The cuts in the earned income tax credit affect millions of families with children as well. For example, it affects families with two or more children who have incomes between $18,000 and $28,000. Some of these families will benefit from the children's tax credit that is in the bill, but not all. Put a different way, those who will get something from the children's credit will have much or all of that benefit taken away by cuts in the earned income tax credit. Essentially what we are doing here is, while we may be giving some of those low-income people a tax credit because they have children, the tax credit they will lose because of the cut in the earned income tax credit will more than make up for that so they will be paying more in taxes, and if they do not have children, then they are going to lose even more in the tax credit because they do not have the children's credit to make up for it. Again, I know it is complicated, and sometimes it is difficult to understand, but the bottom line is that, if you are an individual who is making less than $30,000 a year, you are more likely to get a tax increase under this Republican leadership budget than a tax cut. Now I want to walk briefly though about the main concerns that I have with this budget, this Republican budget, in terms of how it affects Medicare and Medicaid because that is where the deepest cuts take place. Those are the two programs, the two health care programs, that are run by the Government which are most deeply impacted by the priorities in the Republican budget. Medicare, for one, is not abolished. It continues to exist. But the nature of the program changes, and essentially senior citizens are asked to pay more to get less in terms of their health care coverage. Just as an example of that, the part B premium that seniors now pay for their doctors' care--part A Medicare, part A, takes care of the hospital care; Medicare part B takes care of physicians' care--and seniors pay now a premium per month for Medicare part B. Well, Medicare part B premiums are doubled under this Republican budget proposal. At the same time though that seniors are paying more for their physicians' care under Medicare part B, what is happening is that the amount of money that is available to the Medicare Program, particularly for both hospitals, as well as physicians, is significantly decreased. [[Page H 13638]] Now what that means is that hospitals will not get the same level of reimbursement rate that they need, or that they get now, or will need in the future in order to make ends meet, and so what we are predicting and what we know will happen if you talk to the American Hospital Association, for example, is a lot of hospitals will close, or alternatively they will have to cut back on services, and they are essentially squeezed so that they cannot provide the same quality of care. I know in my own State of New Jersey we have a large number of hospitals that depend on Medicare and Medicaid for a majority of their income. So if that income is significantly cut back, they either close or they cut back on what they can provide. The other thing that the budget does with Medicare in a very sort of sneaky way is that right now, if you are a senior citizen, most senior citizens simply go to a doctor of their choice, and that doctor gets reimbursed by the Federal Government in what we call a fee-for-service system. You get the service, the Government pays the fee. Well, what this Republican budget bill does is it changes the emphasis and basically encourages seniors to enroll in HMO's or managed care programs because over the life of the 7-year budget or over the life of the budget essentially the amount of money that is reimbursed to individual physicians as opposed to HMO's is skewed. Higher reimbursement rate, more money going to HMO's or managed care systems, less money as the years go by going to doctors who stay in the traditional fee-for-service system. So essentially seniors are encouraged, or almost forced because of their doctors, into HMO's or managed care systems, and a lot of doctors probably would not even take Medicare any more on an individual basis the way we operate now. So what I believe will happen, and I think this is what the intent is, is that this budget will increasingly force more and more seniors into HMO's or managed care where they do not have a choice of doctors. The effect on the other health care program, Medicaid, which is for low-income people, is just as bad, if not even worse, because essentially Medicaid, which right now is a guaranteed program; if you are below a certain income, you get Medicaid, and you have your health insurance paid for by the Federal Government because you cannot work, or you are a child, pregnant woman, whatever, who is without work, or you are disabled; right now that is guaranteed, that you get Medicaid, you get the health care coverage. But this budget bill abolishes the entitlement status of Medicaid. In other words, about 36 million Americans who are now eligible for Medicaid automatically are no longer eligible necessarily, and essentially the States are given money in block grants to try to continue to run health care programs for low- income people. But what the budget does, and again in a very sneaky way, is it says ``OK, now the States are going to get money, and they're going to decide what kinds of Medicaid programs they are going to have for low-income people.'' But 18 percent less is available in Federal dollars, 18 percent less than what our Congressional Budget Office says is necessary in order to cover the people that would be eligible for the Medicaid Program over the next 7 years. So what is happening here is again just like the squeeze in Medicare, the squeeze exists in Medicaid. States are told, look, it is up to you to decide now who you want to cover, but you are going to get a lot less money to provide that coverage, and you do not have to cover the people that previously were entitled to Medicaid, and so what are the States going to do? They are going to cut back. A lot of them will decide that certain categories of disabled people are not going to be eligible for Medicaid or that certain other people will not be eligible for Medicaid, and they do not really have a choice because their only alternative is to raise taxes somehow, and the States obviously are going to be reluctant to do that. The other aspect of the Medicaid Program that is particularly damaging is with regard to seniors. I mentioned before that under Medicare, the part B program for Medicare which seniors use to pay for their doctor bills, the premiums are doubled under this budget bill; but on the Medicaid side, the guarantee for low-income seniors, that premium that was paid for by Medicaid is eliminated. So if you are a senior who can afford to pay for your Medicare coverage, you see your premiums doubled. If you are a senior who right now cannot afford to pay your Medicaid part B premium, and it is covered by Medicaid and you do not have to pay, you now have no guarantee that the Medicare coverage is going to be paid for. What is going to happen? A lot of senior citizens will simply not take Medicare part B or physician coverage because they cannot afford to pay for the double premium; or, alternatively, if they are too poor and they have had their Medicare part B paid for by Medicaid, they simply will not have Medicare part B coverage, and they will not have any doctors to take care of them. What we are seeing here more and more with regard to the two health care programs is that the budget, this Republican budget, the budget put forward by Speaker Gingrich, is going to put a lot more Americans, provide that a lot more Americans do not have health insurance at all. They either will not have physician's coverage, or in some cases they will not have hospital coverage, and we are going to see an increase in the number of Americans who have no health insurance. Right now it is estimated that something like 40 million Americans have no health insurance. Various estimates, responsible estimates, have said that under this proposal, under this budget, we could easily see over the next 7 years as many as 60 millions Americans or more that will have no health care coverage. The other aspect of this bill that is particularly troublesome to me when it comes to Medicaid funding, as well as Medicare funding, relates to how States will finance both programs. In other words, right now Medicaid is a program where the States have to put up one dollar for every dollar that the Federal Government provides. So when I say that Medicaid is cut by 8 percent over the next 7 years, I am assuming that a State, for example, my home State of New Jersey, would put up $1 for every $1 that comes from the Federal Government. But when this budget bill went to conference and came back on an agreement between the House and Senate, I found that it had another provision that even makes the situation for Medicaid and for States that are making an effort to try to provide coverage even worse, because it says that a State only has to spend 40 cents of a dollar in order to get 60 cents in Federal money. What that means is that instead of putting up $1 and getting $1 in Federal money, the States may decide they will only put up 40 cents and get 60 cents in Federal money, which means that there is only $1 available for Medicaid as opposed to the $2 that is available under the current law. So not only will States see a lot less money coming from the Federal Government, but if they decide that they do not want to put up theirs, there may be half as much money available to the Medicaid recipients in that State than is available right now. The other thing that really upsets me is that so many times on this floor I have heard the other side, my colleagues on the other side, basically give the impression that somehow, as this bill has moved through committee, through the House, through the Senate, and then in the House and Senate conference until it finally came to the floor today for final consideration before it goes to the President, the suggestion that somehow they have been trying to improve the situation with regard to the States' ability to continue Medicare and Medicaid in an inadequate quality way. Particularly in my home State of New Jersey, I have been troubled by the fact that, unlike previous to today, most of the Republicans decided to support this budget conference when it came back because of changes that were made supposedly for New Jersey that would help with our ability to continue Medicare and Medicaid coverage. I basically disagree with what my Republican colleagues or most of my Republican colleagues from New Jersey have been saying in this regard. I think that the bill that has come back to us, [[Page H 13639]] and that we voted on today, did not make any real significant changes in the Medicaid or Medicare Programs that help the State of New Jersey. Particularly with regard to our hospitals and the amount of money they are going to be getting from Medicare, it created a very biased system in favor of certain hospitals, and at the expense of other hospitals.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, this Republican budget bill should be opposed because it repeals Medicaid, the health care program for low- income people, in order to pay for tax breaks for the rich. In effect, this is Robin Hood in reverse, and I cannot believe that our country has come to this. Thirty-six million people will no longer be guaranteed coverage. They will be dependent upon the States which will receive 18 percent less in Federal funds than the Congressional Budget Office estimates is necessary to maintain current coverage. That means more than 8 million people who would have been covered by Medicaid would likely be without insurance because hard-pressed States would be forced to keep them off the roles. The States do not have the money; where are they going to get it? They are not going to raise taxes, and people will be without health insurance. The bill, when it came back from conference, also says that States are allowed to spend only 40 cents on a dollar in order to get 60 cents in Federal dollars. So that means that a lot less money could be coming to the States than even is anticipated because States would not have to put up their matching funds. The bill says it is going to provide protections for women and children up to 100 percent of poverty, but allows States to define the benefits package. It also purports to protect the disabled, but allows the States to define who the disabled are and how they will be treated. What does that mean? A lot of disabled would not be covered; a lot of pregnant women and children would not be covered; and lastly what it does, it also repeals the current law guarantee of payment of Medicare part B premiums on behalf of the elderly. Speaker Gingrich told us a couple weeks ago that that guarantee would be there, that low-income seniors would have their Medicare part B premium paid for. There is no such guarantee in this bill. It is up to the States like everything else. Mr. Speaker, in this continuing resolution that was adopted today for the first time President Clinton got into the continuing resolution that the budget should provide adequate funding for Medicaid. I hope that this bill is defeated and that, when the negotiations start with the President and the Republican leadership, that that principle that President Clinton has so well articulated, provide adequate funding for Medicaid, is finally accomplished. This bill will not accomplish that goal. Hopefully, once this bill is defeated and the President vetoes it, we will have some negotiations to that effect.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I am very pleased that the Federal Government is back to work today and that there was agreement on the continuing resolution to keep the Government working. I am also happy that one of the principles that was articulated by President Clinton and included in that continuing resolution was adequate funding for the environment. We must make sure that in these budget negotiations that take place over the next few weeks that there is adequate funding for the environment. One of the concerns I have is that late today we will be taking up an appropriations bill on the EPA which does not provide sufficient funding for the environment. The bill undermines protection of the environment, increasing associated health risks by significantly decreasing EPA funding by about 20 percent with enforcement being the hardest hit in terms of cuts, almost 25 percent. I have always taken the position that it is great if we have all good environmental laws on the books. But if we do not have the money to enforce them, to make sure that the polluters are not out there violating the laws, then there is no point in having those laws on the books. I hope that we defeat this bill today and that it serves as an example of why we have to provide adequate funding in the budget for the environment.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I must say that I am very pleased today so to see that we have worked out the continuing resolution between the President and the Republican leadership in Congress, and that Federal employees are back to work. I cannot emphasize enough how pleased the Federal employees in my district are. Some of them have been calling the district office to say that. Even more or just as important, though, is the fact that the language of this agreement essentially says not only that will we have a balanced budget, but that the priorities which I have been talking about, which President Clinton, the Democratic leadership have been talking about, which are to preserve Medicare, to make sure that Medicaid is adequately funded, to make sure that this budget provides ample funding for education and also for the environment, that those are included in the language of the continuing resolution. So I hope that with these principles that are so important to President Clinton, so important to Democrats and important, I believe, to the American people, that those principles will guide the negotiations over the larger budget agreement that must be reached over the next few weeks. Let me tell you why I think that these principles are important. I have said it over and over again on the floor, but I am going to say it again today. When we talk about Medicare and Medicaid, the Republican budget essentially says that those programs are going to be cut by a significant amount of money, 270 million for Medicare, 170 million for Medicaid, in order to pay for a tax break, mostly for wealthy Americans. What I hope is that this budget agreement will put more money back in Medicare and Medicaid, retain the entitlement status particularly for Medicaid, so that those who have low incomes and are on Medicaid now, get their health insurance through the Government, will continue to be entitled to health insurance. What we can do is reduce those tax breaks or eliminate those tax breaks for the wealthy in order to make sure that these programs continue the way they have.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, when I was having the dialog with the gentlewoman from Texas before, one of the things that I found out, again in response to the fact that some of my colleagues on the Republican side from New Jersey were sort of touting the changes that happened in the conference with regard to Medicare funding, what they were saying was that $55 million in additional money would be coming to New Jersey hospitals because of changes in Medicare. What I found out was particularly disturbing to me because of the inequities of the formula that had been put into the conference bill. Essentially, what the formula said was that if a hospital in New Jersey, and of course this is throughout the country, so it applies in every State, if a hospital had more than 60 percent, 60 percent or more Medicare patients, it was going to get a small increase in its reimbursement rate for Medicare. But then on further discovery, I found out that that was only true if the hospital was not a disproportionate share hospital or a teaching hospital. A disproportionate share hospital is a hospital that has a high number of Medicaid patients, in other words, low-income patients, or patients that receive Social Security disability benefits. Of course, the teaching hospital is a major institution that provides teaching to residents and to young doctors; and which also tends, in many cases, many of the teaching hospitals, happen to be in urban areas. So what essentially this new formula said was, in my interpretation, if you have a high number of seniors at your hospital, we are going to give you extra money, but not if those seniors happen to be low-income seniors or if they happen to be people who are receiving Social Security disability, or other types of low-income individuals. That is an incredible inequity. Here we have some of the major teaching hospitals, which serve the underprivileged, disproportionate share hospitals that serve large numbers of poor people, and have the greatest need for help from the Federal Government in terms of their reimbursement rate, and they are being cut at the same time as the hospitals who have a high number of Medicare patients, but do not have a lot of poor people, are being given an increase. That really says a lot about the way Speaker Gingrich and the Republican leadership have gone about dealing with this bill. It is not fair; there are a tremendous number of inequities in this bill. Mr. Speaker, with regard to Medicaid and, again, talking about my home State of New Jersey, my colleagues were touting the fact that there was an increase from Medicaid funding to New Jersey of something like $200 million, largely because now the effort or the services that you provide to illegal immigrants were going to be included, whereas they had not been in the original bill. But what they fail to point out is that New Jersey loses $6 billion in Medicaid funding over the next 7 years under this Republican budget. So here we have some slight increase, because you are serving illegal aliens, of $200 million, but a shortfall overall of $6 billion. This prompted one of my local newspapers, the Home News and Tribune, to write an editorial which I would like to quote from briefly. They said, and they complimented Governor Whitman because she had tried to get some extra money for Medicaid in part of this conference. But then they said that the latest GOP plan still doesn't do enough to help needy New Jersey residents. The new game plan would leave New Jersey with almost $6 billion less than the State would have received under existing law. The undeniable fact is that New Jersey still takes a big hit. So whether you talk about Medicare or you talk about Medicaid, the bottom line is that, around the country, both programs suffer considerably, and in many ways will not be the type of quality health care programs that they are now. Before I finish, I wanted to go into two other aspects of this Republican budget bill that I find very objectionable. The gentlewoman from Texas [Ms. Jackson-Lee] mentioned both of them. I just want to get into a little more detail about how this conference bill, the one that we voted on today and that I oppose, specifically affects certain education programs and certain environmental programs. The most negative impact in terms of higher education is on what we call the direct student loan program. The Republican proposal basically caps direct student loans at 10 percent of total loan volume. What we know that this [[Page H 13641]] is going to do is to force up to 1,000 colleges and universities out of the direct student loan program and cut the number of direct student loans that actually go to students by 1.9 million. So 1.9 million students probably will not have access to these loans and 1,000 colleges and universities will be cut from the program because of this 10-percent cap. Some people, though, have said to me, well, so what? We do not have a direct student loan program; we can go back to the old guaranteed student loan program that the banks used to operate and still operate under. Why do we need the direct student loan program? I would point out that the direct student loan program, of course, comes directly from the college or university, as opposed to the guaranteed loan program, which is financed; you go to a bank or a loan institution. Well, there is a key difference, there is a key difference, and this is why so many students will not be able to get a loan and why so many colleges are complaining about this change and this downgrading of the direct student loan program. One key advantage of direct loans over guaranteed loans is that the direct loans create more flexible repayment terms. Direct lending guarantees students the option of paying their loan back as a percentage of their income. When graduates are starting a family, working in their first job or starting a business, they can choose to make smaller payments. Guaranteed loan holders in the vast majority of cases do not provide this kind of flexibility. Also, and this is the experience that I can talk to directly because Rutgers University in my district was one of the schools that first started with the direct student loan program and has had tremendous success with it, students have found that their loan money comes through faster under direct loans. There is just a lot less red tape. Direct loans provide one-stop shopping for students. Borrowers make single loan payments to the Education Department for the life of the loans. The application process is simpler. Students do not have to submit a separate loan application to a bank and students do not wait in lines to endorse bank checks because schools receive the loans electronically from the Federal Government. There are a tremendous number of reasons, and I do not want to keep talking about them all night, about why this direct loan program has been such a success. But I would like to look at it from the other point of view, which is why is it that the Republicans want to go back to the other guaranteed loan program administered by the banks? For what possible reason? Well, I would maintain it is because of the special interest groups that are involved. They are the only winners, okay? Just to quote here from the New York Times, and then I would like to yield to the gentlewoman from Texas, the guaranteed student loan program as always been a favorite program for the Nation's banks. The New York Times pointed out in an editorial recently that, ``Banks have long treasured the guaranteed student loan program which offers profits with much less risk than they have on the direct loan program ever since it was created in 1993 as unwanted competition. Here we go. We are going back to this other program where we have to go through the banks, only that they can make a profit. There is no benefit. And from my own experience with Rutgers University and what the administrators there are telling me, the direct loan program is much better. Mr. Speaker, I yield to the gentlewoman from Texas.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, the Gingrich budget severely hurts seniors in order to provide hefty tax breaks for the wealthy. Seniors are asked to pay more to get less. The bill is bad for America. It is also bad for New Jersey. My four Republican colleagues who voted ``no'' on this budget before should still vote ``no'' today. As the gentleman from New Jersey [Mr. Smith] said in today's papers in New Jersey, our State will lose $12 billion, half in Medicare and half in Medicaid, over the next 7 years. Hospitals will close. Seniors will be forced into HMO's where they lose their choice of doctors, many seniors will simply have no health care coverage because of the doubling of part B premiums, and low-income seniors, those that Speaker Gingrich promised on the floor previously will have their part B premiums paid for, they have no guarantees under this budget bill that that part B premium will be paid for. Mr. Speaker, this bill is about promises broken. The promise that we made 30 years ago in Medicare will no longer exist. I urge my colleagues, vote ``no,'' and I urge President Clinton, veto, veto, veto.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I just want to address some of the issues that were raised by the previous speaker. First of all, with regard to the government shutdown and with regard to what some of the freshman Democrats have said, I am very much in favor of their position. I think that we should stay here. We should not be going out of session. We should stay here through Sunday, obviously, in order to see what we can do to work out an agreement so that the Government does not have to continue to be shut down or slowed down as it is right now. I have a lot of Government employees in my district, and I think that is the only right thing for us to do. The other thing I wanted to mention with regard to the previous speaker is, I do not really think the issue here is a balanced budget because most of the Members in this body on both sides of the aisle feel that we should have a balanced budget. Obviously the President feels that we should have a balanced budget. But what is happening here is that Speaker Gingrich and the Republican leadership are essentially holding the government hostage to their view or their ideology with regard to a particular type of balanced budget. Mr. Speaker, that is not fair, and that is certainly not what has happened here in the past. That is the major difference, if you will, about what is happening in Washington right now as opposed to previous years. In previous years, when there were disagreements about the budget between the two parties or between the President and the Congress, they allowed the Government to continue, they allowed operations to continue, so Americans were not hurt in any way while they argued over their differences about the budget. That should be allowed to occur here now, that is what President Clinton has been saying, that is what most of the Democrats are saying, but that is not what happens because basically Speaker Gingrich wants to hold the Government shut down, if you will, hostage to his particular ideology about the budget. It is not fair. I wanted to speak a little bit, if I could, about this, about this budget that was considered today which I was very much opposed to. What I would like to say basically is that the budget that was adopted today and which I did not support, essentially what it does is it takes a huge amount of money from the Medicare Program, from the Medicaid Program, and essentially hurts seniors and those people on low incomes who receive Medicaid right now, and it cuts those programs and really hurts the people that take advantage of those programs in order to provide these hefty tax breaks primarily for the wealthy. If we were to eliminate the tax breaks for the wealthy, we would not have to cut Medicare or Medicaid as much as is being proposed, and at the same time, and even worse, we are asking seniors to even pay more for essentially less health care coverage. I just like to give some examples of how this plays out in a little more detail, if I could, in the time that I have left. First of all, we have information that shows that the average tax cut for those in the top 1 percent of taxpayers who get a tax cut would be about $15,000, but for 99.7 percent of all taxpayers in the bottom fifth, they would actually have a tax increase or see no change at all. For those in this group who have a tax increase, their taxes would go up by an average of $173 a year, so this is only a tax cut for wealthy Americans, it is actually a tax increase for a lot of the taxpayers at the bottommost part who are also working and paying taxes. With regard to the Medicare Program, because you are taking so much out of the Medicare Program, what essentially happens is that the reimbursement rate to hospitals, to doctors, to health care providers, becomes so much lower in overall terms that it causes them to cut back. Hospitals will close, particularly in my home State, because so many of them are Medicare and Medicaid dependents. A lot of doctors just will not take Medicare any more because of the reimbursement rates, and even more importantly, what they do with the Medicare Program, what the Republican budget does with the Medicare program, is that it changes the emphasis on the dollars towards HMO's and managed care and against the traditional fee-for-service system where the senior had the opportunity to go and choose their own doctor. It does that in a very insidious way, by saying that the growth that is allowed, if you will, in funding is more in the HMO or managed care side and less on the traditional fee-for-service side where you choose your own doctor, and then, even worse, if you look at this conference agreement on the budget, it says that if they cannot save the $270 billion in cuts that are proposed in what they propose by moving so many seniors into managed care, then what they do is they have what they call a fail-safe mechanism that basically makes even more cuts again in the traditional fee-for-service system. So what you are going to have is a lot of seniors that cannot find a doctor of their choice.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, after several weeks now of secret negotiations with the Republicans in the House and Senate, we finally get the Gingrich budget today, and it is the same thing as what we expected, it hurts seniors to provide tax breaks for the wealthy. Essentially, seniors are going to be asked to pay more to get less; their part B Medicare premiums are going to double, hospitals and health care providers are squeezed so much that we will see hospitals close and the quality of care they provide reduced, and seniors will lose their choice of doctors because they will be pushed into HMO's where they do not have a choice of doctors. It is not fair to America; it is not fair to the average American. It means that the quality of health care goes down, all to pay for more tax breaks for the wealthy and for the corporations. Mr. Speaker, I would urge my colleagues, we have to defeat this budget. The President has to veto it so we can get back to do something that balances the budget and at the same time protects Americans and does not hurt American seniors.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I oppose the rule. The Republicans met in secret the last few weeks and they hammered out this budget deal without Democratic participation, and what happened is that a bad budget bill got even worse. The Gingrich Republican budget reconciliation conference report cuts Medicare by $270 billion in order to pay for a $245 billion tax break for the wealthy, despite the fact that the Medicare cuts are 3 times greater than what the trustees recommended in order to make Medicare solvent. The Medicare premiums for seniors are doubled. At the same time the wealthy are being given huge tax breaks, working Americans will get a tax increase, that is a tax increase for working Americans, of $32.2 billion cut in the earned income tax credit, $9 billion more than the House-passed bill. And upon the date of enactment of this legislation, Medicaid is repealed and 36 million Americans will lose guaranteed health insurance and long-term care. The worst part of it in my opinion is this Republican bill repeals the current law guarantee of payment for those widows. They will not have their Medicare part B premiums paid.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise to speak about the end of an era on the Jersey Shore as our community pays tribute to Chief Anthony L. Paduano of the Neptune Township, NJ, policy department on the occasion of his retirement. Chief Paduano will be honored in a tribute at the Squire's Pub in West Long Branch, NJ, on Friday, November 17, 1995. Chief Paduano is a life-long resident of Neptune. He was born in the township and attended the local public schools. After serving as a paratrooper in the 11th Airborne Division, he joined the Neptune Police Department in 1961. Throughout his distinguished career, Chief Paduano has moved up the rank from sergeant to captain to deputy chief. He was appointed chief in 1983, commanding the 65-member police department. The list of Chief Paduano's accomplishments and associations is a long one: He has been involved with the Monmouth County Police Chief's Association, the board of directors of the Monmouth County Police Academy, the New Jersey Traffic Officers Association, the Monmouth County DWI Strike Force, the Monmouth County Prosecutors Advisory Committee, the Neptune Township PBA, Local 74, and the Fraternal Order of Police, Neptune Township, Lodge 19. In all of these endeavors, Chief Paduano has done far more than to just lend his name; he has been a leader, motivating others through his hard work and his solid example-- just as he did every day on the job at the Neptune Police Department. Chief Paduano is also a devoted family man, and it is my pleasure to extend my best wishes to his wife Nancy, their three children and two grandchildren. It is an honor for me to pay tribute to Chief Paduano on the occasion of his retirement, as well as his having been named the 1995 Man of the Year by the Kiwanis Club of Neptune-Ocean Township. I hope the chief enjoys his retirement, but continues to lend his talents and energy to the betterment of our community.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, the Republicans have been meeting in secret the last few days to hammer out their differences over the budget bill, which they will probably bring to the floor tomorrow. This is the bill that cuts Medicare and effectively destroys Medicare in order to pay for tax cuts for the wealthy. Mr. Speaker, they have not allowed the Democrats to participate in their secret negotiations, and as a result of that, a bad budget bill, as the New York Times says today, only gets worse. If I could just read, according to the New York Times, ``The House GOP budget will take about $900 worth of benefits on average from families earning less than $30,000, but only $155 from families earning above $100,000. At the same time, it will cut taxes by virtually nothing on the low-income families, but cut them by about $1,600 for high-income families.'' The Republicans work in secret and they come up with a budget bill that we will get tomorrow that provides even more tax cuts for wealthy Americans while it destroys Medicare and destroys Medicaid and provides us with a much worse health care system than we have now in America.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I want to urge my colleagues to defeat this rule on the continuing resolution, because it does not allow an amendment that would take out the budget language that is objectionable to the President. Mr. Speaker, I think it is wrong for us to cut back or close down on Government agencies because of a disagreement in this House over the budget. That is essentially what we have here. The President says that he does not want to be bogged down by this 7-year budget language and the language that is in the CR with regard to the Congressional Budget Office. I personally feel that the budget is wrong, as I have said many times, because it cuts Medicare in order to pay primarily for tax cuts for the wealthy. But I think that what we really should be doing is allowing a continuing resolution to pass that is clean, that does not get involved in the budget battle, and spend the time over the next few days or the next few weeks trying to come up with a compromise on the budget that is acceptable to both sides and that is acceptable to the President. What is happening now is that basically the American people are being asked to pay the price of the bickering that is going on in this House, that is going on, I should say, in this Congress. It is simply not fair. We know a lot of people came down to Washington the last couple of days and they want to see the monuments. Some of them had been waiting for the bill a year or two to do that. I have people in my office that have not been able to apply for Social Security benefits, for veterans' benefits, those who wanted to join the Armed Forces who have not been able to see a recruiter. What the Republican leadership is basically saying is that ``You have to have it our way. You have to go for the 7-year budget. You have to go with the CBO estimates. Otherwise, we are going to continue to close down the Government.'' They are essentially holding the Government, if you will, hostage to their view of the budget. It is not the proper way to proceed. We know there are disagreements on the budget. The way this rule provides, it does not allow for a clean CR. I think it is wrong, and for that reason it should be defeated.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I think it really comes down to the intransigence, if you will, of the Republican leadership and Speaker Gingrich, basically not willing to compromise, not willing to negotiate common ground. The thing that amazes me is how this continuing resolution, which is basically a stopgap way of keeping the Government going until we finally resolve the larger budget issues, this continuing resolution, which historically, at least as long as I have been here, whenever we had one, it was basically what we call clean, a clean continuing resolution. It just tried to provide the money to keep the Government going, without being loaded down with all kinds of extraneous material. This time, however, the Republican leadership put this Medicare premium increase in the continuing resolution, so that I think we are talking about $11 more per month that seniors would be paying for their part B Medicare as of January 1. This was included in the continuing resolution, so the President, when he received it, had to veto it. I am proud of the fact that he vetoed it in order to guarantee that senior citizens' Medicare premiums would not go up January 1. This is the kind of nonsense we are getting. We are being told, instead of just trying to pass a continuing resolution that keeps the Government going while we try to work out our differences on the budget, it is loaded up with Medicare increases and all these other things.

Mr. PALLONE. I wanted to comment, I was listening to what the two Congresswomen said. One of the things I think they are getting at, which is so important, is the whole interrelationship with all these things and what it all means for our economy and the future of the country. One of the things that bothers me about Speaker Gingrich is that he always seems to get involved in class warfare, age warfare, putting one group or pitting one group against the other, and these things are all so interrelated. Now we talked tonight about the Medicare cuts, and I know to some extent the leadership, the Republican leadership, tries to get the idea out, well, you know, maybe the seniors are getting too much, you know, that they need to pay a little more, and you know, try to get into this thing that it is seniors against young people, almost a generation gap, and what they fail to tell us and fail to explain is that these Medicare cuts and the Medicaid cuts have a terrible impact on hospitals, for example. In my own area almost every hospital that is in any district is, a majority of their funding comes from Medicare and Medicaid. If these draconian cuts are put in place in order to finance the tax cuts for the wealthy, a lot of those hospitals will close, a lot of them will cut back on services. That affects everyone, not just the senior citizens. It affects everyone in the community. The same thing is true with the student loans. I do not understand how you can talk about cutting back on student loans. I remember I think there was a rally a couple of months ago in New York City, and Mayor Giuliani, I think it was him or it was some other Republican, made some statement about how, you know, why do not these students, why do they not just go to work, why are they looking for a student loan handout? They can work like I did for, you know, 15 to 20 years, and then they can go back to school and pay for their college education. Well, that is such a waste of energy. In other words, we are competing with other countries. We have got to have a productive work force. We have got to have people who are educated in their younger years so they can go out, and work, and compete with others abroad. We cannot defer their education for 10, 15, 20 years because they are competing with people elsewhere in the world. The same thing is true with the earned income tax credit. We cut back on the earned income tax credit, what is going to happen? More people will be on welfare, and who is going to pay when they are on welfare, and how much does that cost to society? So many of these Republican initiatives that are in this budget just make no sense in terms of the future of this country, the future of the work force, and even dollars. Dollars are not going to be saved in the long run. It is going to cost us more, and you brought that out, I think, in various ways tonight.

Mr. PALLONE. If you would just yield for a second, I just wanted to follow up on what you said about capital gains. I actually support the concept of capital gains, if it is geared in the right direction, but you have hit on the two points. In other words, you know, capital gains, it is going to help the middle-class person, the home owner, OK. Capital gains that is going to help the corporation that reinvests in the United States, but that is not what we have in this bill, those types of investments, those sort of directed investments that are going to improve the economy or help the middle-class person. That is not what is in this bill. One of the worst aspects, Congresswoman Kaptur, that--and I understand that the conference between the House and the Senate has not corrected this, is the proposal to take pension moneys in the House- passed version, and I understand the Senate is going to go along with this. They have actually allowed the corporations to dip into workers' pension funds and to use that money for investments. You know, they could use it for a hostile takeover of another corporation. Again you know I do not even like the idea of being able to take the pension funds at all, but, if you are going to allow that, at least do it in a way that you know is going to benefit the local economy or the American economy, and they do not even to that. So there are all kinds of things that benefit the large corporations, benefit the wealthy, that do not benefit the average person or even encourage investment in the United States.

Mr. PALLONE. Absolutely.

Mr. PALLONE. Absolutely not. There is absolutely no reason it should be included within the continuing resolution.

Mr. PALLONE. Mr. Speaker, I am saying that the debate over the budget, and I would like to get into that a little bit, is ongoing, and will be dealt with either by the end of this week or within the next few weeks, but while that debate is ongoing, it is necessary for the Government to keep operating the way it normally does. [[Page H 12336]]

Mr. PALLONE. Right.

Mr. PALLONE. Well, I think that the only answer is that there has to be recognition on the Republican side that they are just not going to be able to take money from Medicare and also from Medicaid in these large amounts, these cuts, and use them for a tax cut for the wealthy. I think it would be very easy to come to agreement between both sides of the aisle, as well as with the President, by simply cutting back on, or I should say putting back a lot of the cuts on Medicare as well as Medicaid, not increasing premiums as much as has been proposed here, and, as a consequence, also cutting back on this tax cut for the wealthy. That is the basis for an agreement on the budget I think we can all live with.

Mr. PALLONE

Mr. PALLONE. Madam Speaker, I learned this morning that the President had exercised his veto to prevent an increase in Medicare premiums for our Nation's elderly by vetoing the continuing resolution early this morning. Again, Madam Speaker, I want to congratulate the President on doing that, because if he were to allow the Medicare premiums to rise, it would be the beginning of this whole process that the Republican leadership is trying to impose on the American people where Medicare premiums and costs rise, the program is cut back, and Medicare ceases to be the effective health care program for the elderly that it has been in the past. I think also it was significant because last night there was a private meeting where Republicans heard the details of the much-awaited budget compromise bill. I was appointed by the Democrats as a conferee on the budget reconciliation. As has been the case with all budget matters this year, as well as with the Medicare issue, the Republicans meet in secret and do not have meetings with the Democrats and the Republicans together to try to resolve their differences on the budget. Madam Speaker, it has characterized the Medicare debate from the very beginning, when there were not hearings, when we were asked to vote on bills in committee within 24 hours or even the very morning when the bills were sent to us, and there was no serious debate, there was no effort to have a hearing; and now, in dealing with the budget and hammering out a bill that will come to the floor probably today or tomorrow or Thursday, once again, the Republican leadership has excluded the Democrats. Why do they do that? Well, they do it because they do not want the public to know what is happening with Medicare and Medicaid. They know what they are doing is taking money from Medicare and from Medicaid in order to pay for tax cuts, primarily for wealthy Americans and large corporations, and they know that if there are actual meetings or conferences with the Democrats on some of these issues, that we will hammer the point home, that they need to eliminate some of these cuts in Medicare, that they need to eliminate these increased premiums in Medicare if they want to have a budget, and if they want to balance the budget over 7 years in a way that does not hurt seniors, that does not hurt the average American. Unfortunately, that is not what is happening, and once again, we are faced with the reality that today the Government is partially shut down because the Republicans want to make an issue over Medicare. Madam Speaker, I want to read this quote again which I carry around with me from Speaker Gingrich where he says, ``Now, we didn't get rid of Medicare in round one because we don't think that is politically smart and we don't think that that is the right way to go through a transition, but we believe it is going to wither on the vine because we think people are voluntarily going to leave it.'' That is what this is all about, and it is to the credit of President Clinton that he does not allow us to go down that slippery slope and that he vetoed these increases in the Medicare premiums, because if he allows that to happen, if he allowed those premiums to go upon January 1, it would be the beginning of this Republican effort to cut Medicare in order to pay for tax cuts for the wealthy and the beginning of the end for the Medicare Program.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I was just listening to the gentleman from Florida talk about Medicare and the budget, and I guess my response, initially, is that I just wish I knew what was in this budget reconciliation, as we call it, and what is coming out of the conference. Because one of the things that outrages me is the whole process that the Republican leadership has used from the very beginning in dealing with Medicare and the budget, and that is that we, as Democrats, do not know what is going on. Mr. Speaker, they started out by bringing up the bill in the Committee on Commerce, in the Committee on Ways and Means, in some cases without any hearings, in some cases with very few hearings, giving us drafts of the bill either on Medicare, Medicaid, or the other reconciliation items either the night before or sometimes the morning that we were expected to vote on it. This process continued today. I was really outraged when I went over to the Senate today. Last night those of us who were conferees on the budget, those of us who were supposed to work out the differences between the House and the Senate, were told last night that there was to be a conference at 3 o'clock this afternoon over on the Senate side. When I went over there with my other colleagues from the Committee on Commerce and from other committees we were first of all told there were not going to be any opening statements, that we were not allowed to speak; then we were told we were not allowed to ask questions; and finally, we were not even given a copy of the conference bill that has been mostly worked out in secret by the Republican leadership in the House and the Senate. So once again, Mr. Speaker, this process continues. The Republican leadership does not want the American people, and certainly not the Democrats in this House, to know what they are doing. They hammer out secret agreements, in the case over the budget, over Medicare and Medicaid, without having any Democrats participate in the process. It certainly is not fair, it is outrageous, and it goes against the very democratic process that this House and this institution are supposed to be all about. These are important issues. The differences between the House and the Senate bill on Medicare and on Medicaid are significant. For example, in nursing home standards. We know that in the Senate bill they continue the Federal nursing home standards. They do not in the House bill. How do I know what the difference is and what has been worked out in conference? I will probably have to read about it in tomorrow's newspaper. We also know there was a significant difference with regard to pensions, because in the House version basically corporations are allowed to dip into their employees' pensions to use for various purposes. In the Senate bill they were not allowed that. I read this morning in the Washington Post that the conference has worked out a plan which says that a controversial provision that would allow corporations to withdraw excess money from workers' pension funds to pay for other employees and retirement benefits is apparently in the conference bill. It is nice I read it in the newspaper, but there is no indication at this point as to what really happened. Certainly not the intricacies of what happened. I also got a press release today with regard to my home State of New Jersey. Some of my Republican colleagues, in fact half of them on the other side, voted against the Medicare bill and against the Republican budget bill, as did I, because they thought it was unfair to the State and it would hurt senior citizens in the State of New Jersey. An AP story comes out and says New Jersey office estimates higher Medicaid funds for the States. Apparently, the conference, which I have not seen, includes another $654 million in additional money beyond the House version in the bill for the State of New Jersey. Of course, they failed to point out that current law would provide $6 billion more. So, in effect, we have lost about $5.5 billion because of what came out in the conference report. Again, Mr. Speaker, it is a constant effort to be secretive about what is going on, to reveal items in press releases or in the newspapers the next [[Page H 12316]] day and try to put a positive spin on them, but there is no positive spin. The bottom line is that this Medicare bill will cut Medicare to basically provide tax cuts for wealthy Americans and that is what this conference report is apparently doing. The bottom line is that it is going to destroy the Medicare program as we know it and make it impossible for seniors to stay in a traditional Medicare program, forcing them into HMOs where they will not have a choice of doctors. With regard to Medicaid, the same thing is true. Medicaid will no longer be an entitlement. People who are poor, who fall below a certain income, whether they are disabled or pregnant women, whether they are children, in many cases they are not going to be entitled to health care coverage in the way that they have it now, because this bill, no matter how it is hammered out, is not going to provide them the same level of health care, and in some cases a lot of them may not get any health care at all. I am really outraged again that here we are at the eleventh hour before being told by the gentleman from Texas [Mr. Armey] that on Friday we will most likely vote on the budget bill that includes these terrible changes in Medicare and Medicaid, and to this day, even those who have been appointed to the conference, who are supposed to work out the details of this bill, have not been told the details of the bill. It is an outrage.