William Roth

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent there now be a period for the transaction of routine morning business with Senators permitted to speak for up to 10 minutes each.

Mr. ROTH. Mr. President, I would like to make a further unanimous- consent request to finish my statement as in morning business for up to 10 minutes, and have my remarks appear in the Record as uninterrupted.

Mr. ROTH. I would say, morning business will be until 1:15.

Mr. ROTH

Mr. ROTH. Mr. President, as chairman of the Finance Committee, I must oppose the Democrats' amendment for one simple reason: It does not preserve the Medicare Program for this generation, and, especially important, not for future generations. That was the conclusion that the Finance Committee came to when it voted down this amendment during our deliberations. My good friends and distinguished colleagues, Senators Moynihan and Rockefeller, offered a similar amendment during the Finance Committee markup to save $89 billion from the Medicare Program over the next 7 years. Frankly, it did not go far enough then and it does not go far enough now. The Congressional Budget Office did a preliminary estimate of the Medicare trust fund effects of the Democrats' amendment to save $89 billion from the Medicare Program. Remember, it is the CBO office that the President himself said is the one that should be making these kind of determinations. Here is what CBO's preliminary estimates showed would happen to the Medicare HI trust fund if only $89 billion is saved over the next 7 years. The Medicare HI trust fund would only be solvent through the year 2004. In other words, it would get us through the next election. CBO further said that the Medicare HI trust fund would have a negative balance of $8.4 billion in the year 2005. This would mean that Medicare could not pay its bills on time in the year 2005. Even more alarming under the Democrats' proposal, CBO says that the Medicare trust fund could not even pay a full year's Medicare benefits starting in the year 2001. Mr. President, that is only 6 years from now. In contrast, CBO says that our proposal meets the Medicare trustees. Remember, those trustees are primarily appointed by the President. It says it meets the Medicare trustees' 10-year test of financial adequacy. In other words, Medicare has enough money in the HI trust fund at the end of every year--that is critically important--at the end of every year for the next 10 years, to pay the entire next year's Medicare benefit. Mr. President, the Medicare HI trust fund has a $300 billion balance in the year 2005. The Medicare trust fund balance is increasing--would be increasing instead of decreasing every year. Using CBO's estimate through 2005, we went to the Office of the Actuary to get their preliminary estimate of how long solvency would be extended under our proposal. The Medicare HI trust fund solvency will be extended until about the year 2020 under the proposal. That is our estimate, in consultation with the Office of the Actuary. That is a quarter of a century from today. What a contrast to what would happen under the proposal before when it would only be solvent to 2005. Mr. President, $89 billion in Medicare savings just is not enough. Even the President earlier this year said that at least $127 billion in Medicare savings are necessary. Let me just say, Mr. President, a few words about the need for savings to Medicare part B. Most attention has been focused on the need to restore solvency in the part A trust fund. But part B spending is a big, big problem. According to Medicare public trustees--again, appointed by President Clinton--the Medicare part B spending shows a rate of cost which is clearly unsustainable. Medicare part B spending was $2 billion in 1970. In 1995 the Congressional Budget Office estimates Medicare part B spending to be about $66 billion.

Mr. ROTH. Mr. President, let me conclude by saying that without savings in the part B program we cannot say that we have effectively tackled the problem of fixing Medicare. Therefore, I oppose the Democrats' amendment because we have already debated and voted down this amendment in the Finance Committee. It does not go far enough to help the Medicare HI trust fund, and we do not want to do it in small steps that will only cost more and create greater hardship. It appears to do nothing, to be candid, to slow Medicare part B spending, which is a significant problem. For that reason, I must oppose the amendment. I yield back the floor.

Mr. ROTH. I yield myself 5 additional minutes.

Mr. ROTH. Yes. Mr. BRADLEY addressed the Chair.

Mr. ROTH. The one question we asked of the Joint Tax Committee is: Would families with children living below the poverty line continue to receive an EIC in excess of the family's Federal payroll taxes? And the answer is that: Families living at or near the poverty line, one-child families with earnings under $12,500 and two-child families with earnings under $15,500, would continue to receive an EIC in excess of the family's Federal payroll taxes, including both employee and employer shares. So the answer is that EIC more than offsets the payroll and other taxes of the family. I yield the floor.

Mr. ROTH. Mr. President, if I might just yield myself 1 minute?

Mr. ROTH. Second, if someone receives a check from the Government for $50 in 1995, and then in 1996 under our reforms receives a check for $75, that is $25 higher. Republicans and most people would call that a bigger check from the Government. But the people on the other side of the aisle call it a tax increase if the person was supposed to receive a check for $100 in 1996. What we are doing is slowing the rate of growth of this program. In the last 10 years this program has grown something like 1,000 to 1,200 percent. The tax credit which was 14 percent plus 5 years ago is now 36 percent. What we are trying to do is to slow down the rate of growth so that we can balance the budget. Now, I listened, Mr. President, with great interest to my Democratic colleagues' description of what we are doing. People are saying that they do not like the tax package. They make fun of the changes in the estate taxes. Just let me say, as I have gone around back home and talked to the family farmer or to the owner of a family farm, as I talk to the owner of a small business, one of their greatest concerns is that they are not going to be able to turn over that farm or that business to their children. What we are seeking to do in our changes in the estate taxes is to make that possible, make it possible for the family farm to continue as it has in the past, or to make it possible for the entrepreneur who is successful in creating a small business to leave it to his children. We think our package is a humane package. We are proud of the fact that it means tax cuts for the American people. We agree with President Clinton when he says that the big tax increase of 1993 was too high. Mr. President, I yield back the floor.

Mr. ROTH. The question was: Would families with children living below the poverty line continue to receive an EIC in excess of the family's Federal payroll taxes? And the answer is: Families living at or near the poverty line, one-child families with earnings under $12,500 and two-child families with earnings under $15,000, would continue to receive an EIC in excess of the family's Federal payroll taxes, employee- employer shares.

Mr. ROTH. Mr. President, you have heard a great deal of demagoging during the past few days from the President, from congressional Democrats, and from the Treasury Department, a lot of bogus claims about our tax package. We are here this evening to bring you the truth about the Republican tax package. The bottom line is this: American families will be better off next year under our tax package than they are today. Our tax relief package is the biggest tax cut for middle- income families in more than a decade. Mr. President, I agree with the President of the United States when he says that the tax increase of 1993 was a mistake--the largest tax increase in the history of this country. I would hope that there would be bipartisan support for our tax cut, in view of the President's message. Under our reform, more than 98 percent of all U.S. households will receive either a tax cut or no tax increase. And this includes our reforms to the earned income tax, the $500 per child credit, and the marriage penalty relief in the Senate Republican bill. Those are the facts. I challenge the Administration and Congressional Democrats to prove their assertion that 51 percent of all taxpayers would receive a tax increase under our bill. This assertion has no basis in fact, and it seriously strains the credibility of the Treasury Department. The Joint Tax Committee analysis, released today, shows that the facts are on our side. Republicans are focusing the earned income credit on the working poor with children--the people for whom it was originally intended. We give a tax cut to most families that pay income tax, and we preserve the EIC for those who need it the most. The indisputable fact is that more than 98 percent of all U.S. households will either receive a tax cut or have no tax increase with the Senate Republican bill. The earned income credit program started in 1975 in an environment focused on reforming welfare policies for families with dependent children. Senator Long was a driving force behind the establishment of the earned income credit program, and this program provided cash assistance to working low-income families with children. The Finance Committee report on the Tax Reduction Act of 1975 stated that the program should be of importance in inducing individuals with families receiving Federal assistance to support themselves. There is no doubt that since the inception of the earned income credit, its focus has been on hard-working, low-income families with children. In 1993, the program strayed from its original intent of helping working families with children, when President Clinton expanded the program to include childless, able-bodied working adults. My colleagues across the aisle often point out that President Reagan supported the program. Yet, when President Reagan lauded the earned income credit, the program only covered working parents of children and cost about $2 billion in 1986. Today, the program makes payments to childless adults, and its costs have skyrocketed to over $20 billion. The reforms of the earned income credit contained in the Republican Senate bill will return the program to its original goals, those lauded by Senator Long and President Reagan, of a welfare program focused on low-income working families with children. My colleagues across the aisle should realize that this will help children. Under our bill, the earned income credit will be available only to individuals who are eligible to work in the United States. Illegal aliens will no longer benefit at the expense of hard-working taxpayers. Make no mistake about it, Mr. President, EIC is a cash transfer program, a welfare program, administered through the Tax Code, rather than through a Federal agency like the Department of Labor. If Congress were to reduce the amounts paid to food stamps, no one would say that Congress is raising taxes. Changes to the EIC are the same as changes to the Food Stamp Program. We are not raising taxes on EIC recipients. The Democrats are arguing that changes to the EIC will raise people's taxes. In response to these concerns, I have asked the Joint Committee on Taxation to perform a detailed analysis of the Senate proposal to reform the EIC. This information is now available, and I released it earlier today to the public. Mr. President, the purpose of the changes in EIC is to focus the program on the working poor with children. We do make four policy changes. We eliminate any EIC payment for individuals with no children. As I indicated, this program was intended to help families with children, and that should continue to be the policy of this program. We also prevent illegal aliens from obtaining this benefit. We also provide that outside income should be considered in determining whether or not one is eligible for the EIC. Why is tax-free interest not considered in determining eligibility? Why is tax-free Social Security or pensions not considered in determining eligibility for the earned income credit? Fourth, we take steps to eliminate the fraud and abuse in this program. Unfortunately, this program has had deplorable rates of fraud and abuse, as high as 30 to 40 percent a year. Recently, there has been, hopefully, some improvement in that. But it is estimated that it could still be as high as 20 percent. People are outraged and shocked with the waste, fraud, and abuse in food stamps or AFDC, but they only amount to 5 to 6 percent. In this program--the EIC--it amounts to as high as 20 to 30 percent. Now, some Democrats have claimed the EIC reform results in those in the lower-income brackets--51 percent or less--paying higher taxes. That is totally false, inaccurate, and misleading. As I mentioned, I recently wrote the Joint Committee on Taxation to answer a number of questions. I pointed out that on Thursday, October 19, 1995, an article appeared in the Wall Street Journal entitled ``Tax Analysis Now Shows GOP Package Would Mean Increase For Half the Payers.'' Is there any validity to the assertion that the Senate Finance Committee revenue recommendations would result in a tax increase for one-half of all households? In responding to this question, please consider the impact of the earned income credit reforms approved by the Senate Finance Committee in a separate markup last September. We received the answer, and the answer says, ``No factual basis exists for the assertion, since retracted, contained in the Wall Street Journal of last week asserting that one half of all households would experience a tax increase under the Senate Finance Committee revenue recommendations.'' Even if one were to include the effects of the EIC reforms previously approved by the Senate Finance Committee, our analysis indicates that less than 1.5 percent--let me repeat that, 1.5 percent--of all households would experience an income tax increase. I think that shows the falseness of the claim that 50 percent of the American families would suffer a tax increase because of this package we are considering today. Now, during the Senate Finance Committee's markup of revenue recommendations on October 18-19, 1995, various assertions were made with respect to the impact of the EIC reforms previously approved by the committee. I asked the Joint Committee on Taxation to address the following questions: Would any households receiving an EIC today pay more income taxes under the combined efforts of the Senate EIC reform, $500 per child credit, and marriage penalty relief? If so, provide how many households will be impacted in this manner and explain why. The answer is that, ``with respect to the Senate Finance Committee's previously approved EIC reform, our analysis of the combined effects of the Senate Finance Committee EIC reforms, the $500 child credit, and marriage penalty relief for 1996 indicate that less than 1.5 percent of all households will have an income tax increase as a result of the EIC reforms.'' Would families with children who are currently eligible for the maximum EIC--that is, families with earnings under $12,000 --continue to receive in future years at least as much EIC as they now receive? Again, the answer is, ``families who are currently eligible for the maximum EIC with children and having adjusted gross income under $12,000 will receive an even larger EIC next year and thereafter. For example, the maximum EIC for a family with one child will increase from $2,094 in 1995 to $2,156 in 1996. The maximum EIC for a family with two or more children will increase from $3,110 in 1995 to $3,208 in 1996.'' This is illustrated here on the chart. It shows, for example, that a family with children that has income of $10,000 would receive this year $3,110; that would go up to $3,208 in 1996. The same is true for a family with children that has income of $15,000. This year they would get $2,360; that would rise to $2,488 in 1996. Not only would they continue to get EIC, but it would continue to increase. Mr. President, let me just again emphasize that the claim that people with incomes below $30,000 would have a tax increase is totally false. First, what the Democrats are doing is calling a reduced welfare check a tax increase.

Mr. ROTH. I yield myself 10 minutes.

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent that Mr. Andrew Eschtruth, a detailee to the Senate Finance Committee from GAO, be granted Senate floor privileges for the duration of the Senate's consideration of the budget reconciliation legislation.

Mr. ROTH

Mr. ROTH. Mr. President, this is certainly a momentous time. Change is the order of the day. And it is a time to renounce old and unworkable programs and philosophies and adopt those that will move America forward, those that will offer prosperity, security, opportunity, and growth to our families and to our communities. As Henry George once said, ``The sailor who raises the same sail regardless of changes in the direction of the wind will never reach his port.'' In this Congress, we have not only trimmed the sails but we have set a bold new course for the future. For the first time in more than a decade, we are serious about balancing the budget, and we have a plan to do it. For the first time in 50 years, we have changed the dynamics of the welfare State, creating incentives that encourage work and strong families, incentives that balance rights with responsibilities. At last, we have changed the questions concerning Government. No longer do we ask: ``How big can we make it?'' No longer do we ask: ``How can we control the States? How can we concentrate more power in Washington?'' These are not the questions anymore. Rather, the new questions are: ``What is Government's proper role? How can we make it more cost-effective and efficient? And what do we need to do to create an environment of security for those who legitimately need Government assistance but an environment for economic growth and opportunity for the valiant taxpayers who provide that assistance?'' And for the first time in my memory, we are returning power back to where it belongs, back to the States. This is what we were sent here to do. It is the message we heard last November. And the job is getting done. At home we have energetic Governors with innovative plans, many with success stories. We have friends, neighbors, and constituents who want, once again, to feel like they have a powerful voice in the system. These are men and women who over the years have come to build this franchise as their Government has moved further and further away. We are in the process of putting the power back where it belongs, in the States, where our friends, our neighbors, our constituents have a stronger voice and are more active. As I watched this 104th Congress move forward, I have thought on many occasions that I can think of no other Congress in which I have been more honored to call myself a Member than this one. And I am grateful for my colleagues, colleagues on both sides of the aisle, who have come to agree that the old way just is not good enough, not for America, not for Americans. In many ways there has been an immeasurable amount of cooperation in this Congress, and it should not be overlooked. In other areas I would like to see more. But I believe a part of the cooperation that is apparent, of course, is borne by the fact that we all know what needs to be done. Republican and Democrat, we all realize the challenges that must be addressed. Even President Clinton, from time to time, has indicated his insight and understanding, saying that his record-setting tax increase was a mistake and finally agreeing with House and Senate Republicans that the budget could be balanced in 7 years. With the reconciliation bill we bring to the floor today, we again need this cooperation, perhaps more than ever, as we turn our attention to saving and strengthening the Medicare system, toward curbing runaway spending and toward giving Americans what they most need now after a decade of tax increases: a real, workable, economy-expanding tax cut. Frankly, Mr. President, there should be cooperation. President Clinton himself has been a most certain voice in expressing the importance of making real and lasting changes. As I said, he has admitted his tax increases were too high. He knows spending is out of control. He has proposed his own child credit, a credit of up to $800 per child. He has stated that it is possible to balance the budget in 7 years. And almost 2 years ago, he took a firm stand on Medicare, saying that--and I quote --``Today * * * Medicare [is] going up three times the rate of inflation. We propose to let it go up at two times the rate of inflation. This is not a Medicare * * * cut.'' End of the President's quote. President Clinton understands what needs to be done. After all, he was the one who ran on the platform of bringing change to Washington. Now, he cannot have it both ways. We either change the old and failed ways of doing business, or we keep business as usual. Well, Mr. President, I vote for change. I encourage my colleagues on the other side of the aisle to join us in making change possible, rather than retreating into gridlock and defending 30-year-old policies that have spent some $3 trillion to have more children living below the poverty line today than when those programs began. This is not progress. According to economist Walter Williams, the taxpayers' money that Washington has spent on these programs to cure social ills over the last three decades could have bought the entire assets of the Fortune 500 companies and virtually all the U.S. farmland. But today the problems not only remain, they are even worse. The fact is, we cannot afford business as usual. Americans do not deserve business as usual, especially those Americans who in the last 30 years have fallen prey to the pathologies that attend poverty: dependency, crime, unwed mothers, broken families, decaying neighborhoods. Certainly we must keep a safety net. None here argues that we should not. But we must change the system. I believe that except for politics, President Clinton and many of his allies in Congress would be with us on most of the proposals we have included in the reconciliation package, even on our historic efforts to save and to strengthen Medicare. Remember, it was the President's own Medicare trustee report that so vividly outlined the problems we are attacking today. According to that report: . . . the Hospital Insurance Trust Fund (Part A) continues to be severely out of financial balance and is projected to be exhausted in about seven years. The SMI Trust Fund (Part B), while in balance on an annual basis, shows a rate of growth of costs which is clearly unsustainable. Moreover, this fund is projected to be 75 percent or more financed by general revenues, so that given the general budget deficit problem, it is a major contributor to the larger fiscal problems of the Nation. The Medicare program is clearly unsustainable in its present form. Mr. President, as I said, this is from the administration's own trustees. There has been no question about the absolute need to restore the integrity of the Medicare Program, to save, to strengthen it, so that Government can meet its contract with the American people. Similarly, there has been no question concerning the need to control runaway Government spending. Government has grown accustomed to living beyond its means. This must change, and reform efforts must be real. They must maintain the agreements Washington has made with the American people. They must see that the needy are cared for. They must keep the contract that exists between the Government and our retired constituents concerning Medicare. They must ensure the integrity of the program for a sufficient period of time to allow us to chart the distant future of that program so it can absorb the baby-boom generation. And in doing all this, our efforts at reform must also create conditions, an environment, if you will, where our economy can expand and the harvest for coming generations can be planted. The reconciliation package we present today accomplishes just that. It keeps our promise to the American people. Our proposal does not engender dependency on Government like the failed policies of the past. It does not perpetuate the negative incentive that feed the welfare bureaucracy and those who maintain their political power base by pandering to that bureaucracy. Of course, our policies address the needs of citizens who cannot care for themselves, but, more importantly, they create conditions for upward mobility, conditions for economic opportunity, incentives for self-reliance. And I cannot express how important it is that we create these kinds of conditions. At the moment our economy is not growing as strongly as it should be growing, and perhaps this is why President Clinton now believes his record-setting tax increases were a mistake. At the moment, there is little incentive for Americans to save and invest. Perhaps this is why today the average 50-year-old is so ill-prepared for retirement and why, among the industrial nations of the world, we lag behind even our competitors in our rate of personal savings. Incidentally, this, according to Federal Chairman Alan Greenspan, is one of the most pressing problems confronting our Nation economically. At the moment, the Medicare Program stares into the abyss of bankruptcy, and this is why many of our seniors are living with fear and uncertainty. But not just our seniors; fear and uncertainty grip their children and grandchildren because they know that, left unchecked, entitlement spending is growing so fast that, along with interest on the national debt, it will consume almost all Federal revenues in the year 2010, just 15 short years from now. Left unchecked, by 2030, Federal revenues will not even cover entitlement spending alone. Though we live in a Nation of infinite possibilities, we are, of course, a land of finite resources. At the moment, the Federal debt is approaching $4.9 trillion, deficit spending is well over $150 billion a year, and the fact is, Medicare, Medicaid, and earned income tax credit are some of the fastest growing entitlement programs on the books. Strengthening and restoring the integrity of these programs will not only benefit those who should appropriately receive them, but it will also help us balance the budget, and this, Mr. President, is what the vast majority of Americans not only want but demand. A balanced budget is necessary for economic security. A balanced budget would increase job opportunity. Some forecast that over 6 million jobs would be created if the budget were balanced. Interest rates would be lower. They would fall by almost 2 percent, some say even higher. And Americans everywhere would enjoy a higher standard of living. There would be a reduced burden of debt on our children and our grandchildren, and people would be able to keep more of their hard- earned money rather than sending it to Washington. To balance the budget, we must control the growth of entitlements. I am not suggesting these programs be abolished or even cut. We simply need to get them back within our budget, within our ability to pay for them. It is easy to see how they got out of control. Simply put, these programs escape the discipline of the annual budget process. Increased entitlement spending occurs automatically, covering any individual who meets eligibility criteria. These increases are heavily influenced by the rapid rise in health care costs, the growing number of beneficiaries and real benefit expansion. Of course, today America is aging. Our population is getting older as people are living longer. This is a good thing. It is indicative of progress. These changing demographics, however, must be accompanied by changing policies and programs. Programs that were created in 1965 when the average American lived to be 61 and when our Nation had five workers to support every one retiree must be modified to reflect current reality. Today, the average American lives more than 76 years, and there are less than four workers to support each retiree. In 1965, when Medicare was enacted, the average American who reached retirement age could expect to collect benefits for 15 years. Today, the average 65-year-old will receive benefits for 18 years. This is where we are now, Mr. President. Looking into the future gives us even greater reason to make the necessary changes we are proposing. The chart, which we will bring out a little later, demonstrates just how important it is that we begin now to make necessary changes in entitlement programs. Today, there are less than 40 million Americans who qualify to receive Medicare. By the year 2010, the number will be approaching 50 million. By 2020, it will be over 60 million. While these numbers are increasing, there will be fewer workers to support each retiree, and while we have almost four workers per retiree today, we will have about two workers per retiree by the year 2030. So, Mr. President, we must change the program. We cannot move into the future with blueprints that were designed for the past. Medicare and Medicaid have been the most significant contributors to entitlement growth in recent years. It is projected that these programs will cripple as a share of the economy within the next 35 years. Thus, they are unsustainable. In 1994, Medicare spending was $160 billion. Over the past decade, Medicare grew by about 10 percent per year, and CBO projects similar growth over the next decade. Because of this rapid growth, the Medicare Hospital Insurance Trust Fund, part A, is projected to go bankrupt in 2002. As the baby-boom generation retires, Medicare costs will continue to soar. The Medicare trustees project that between 1995 and 2020, Medicare will grow from 2.6 percent of the economy to 6 percent, an increase of over 200 percent. Likewise, Medicaid is out of control. This program alone is scheduled to grow at an annual rate of 10.4 percent between fiscal year 1995 and 2002, devouring both Federal and State budgets. Already, Medicaid consumes about 20 percent of State budgets, exploding from $15 billion in 1980 to a projected $180 billion in 2002. These are serious concerns, and keeping in mind the demographics that I cited earlier, it is easy to see that without real change in policies and programs, there is no way the Federal Government will meet its obligation. There is no way that we can offer assurance to even the next generation of retirees that they will have coverage under Medicare and Medicaid. The year 2002 is only 74 months away. However, as I have said on many occasions, I am an optimist. I am an optimist because we know what works. We know the right kinds of policy and program changes that need to be made, changes that will allow Medicare and Medicaid to meet their current obligations while at the same time saving these programs for future beneficiaries. We know how to restore sound financial practices to the Federal Government, practices that can strengthen the economy, create an environment for employment growth and an environment where Americans are encouraged to work, save and invest. And achieving these conditions should be our primary responsibility. Towards this end, we must see our proposal in this budget reconciliation process in its entirety, for its overall balance and how all components work together to benefit Americans at all ages and in all income groups. To single out one reform in our proposal, without looking at the others, is to do a great disservice to what this reconciliation package offers. It is balanced, it is workable, and it is long, long overdue. It changes business as usual in Washington. It answers the clarion call from our constituents to make the kind of changes that so obviously need to be made. I remember that an astute political adviser once warned his boss that there is nothing more difficult to take in hand, more perilous to conduct or more uncertain than to take the lead in the introduction of a new order of thing. I believe, with some of the inflammatory rhetoric we have heard surrounding this important debate, there is good reason to say that this adviser knew what he was talking about. Change is difficult, but change is more necessary now than ever before. Where some may feel they lose in one aspect while single- mindedly absorbing one component of these changes, they are sure to gain in others. What we seek to achieve here is balance, balance that improves conditions and opportunities for all. It is not the voices of individual special interest groups that govern our actions, but the collective voice of America. And we understand one fundamental truth about reform--a truth stated eloquently by Vaclav Havel: The more half-measures we take, and the longer they drag on, the greater the sacrifices will be, the longer they will have to be made, and the more pointless sacrifices will have to be piled on top of those that are unavoidable. We must be resolved; we must have confidence in the balance that our program offers. I have that confidence--as do other Members who join me today in introducing this reconciliation package. Quite simply, there are four components to our program--promises we made to the American people--promises we are now keeping: First, we provide for a balanced budget; Second, we strengthen and preserve Medicare and Medicaid, thus allowing these two important programs to continue to protect Americans into the future; Third, we reform welfare; and finally, once we show that the budget is balanced; We create an environment for economic expansion through tax cuts that offer relief to our families and encourage Americans to work, to save, and to invest. To give a little history, the EITC was a bipartisan program, created to offset the sting of payroll taxes on working families with children. The fact is, each dollar Government taxes creates a disincentive to work, while each dollar that people keep for themselves is an incentive to work. History has proven this point. The economies of nations that have cut taxes have thrived, while those nations who have increased taxes--even to the point of taking everything the people earn--have fallen into ruin. The EITC was to create incentives for low-income parents to work. It was that simple. But as they say about too much of a good thing becoming dangerous, such is what happened to this once-well-intended program. Over the years, the EITC has been expanded by a welfare- oriented Congress into another Federal handout. And today, some 85 percent of the EITC is a Federal outlay paid directly to individuals. No longer do individuals need to have families or children to qualify; no longer does the EITC encourage work, as it once did; no longer is the program fair and cost-effective. Much of the EITC cannot even be considered tax relief because those who receive a direct payment from the Government pay no income taxes at all. Make no mistake about it, most of the EITC is a welfare check. Beyond this, the EITC is plagued by fraud and abuse. It sports a fraud and error rate between 24 and 40 percent, making it the most fraudulent welfare program on the books. Though the administration has worked to reduce these high rates, there is no evidence that current rates are below double digits. Many of those who commit fraud are not even legally able to work in the United States. And the fact is, since the program's inception, American taxpayers have lost $25 billion to fraud, waste, and abuse in the program. The GAO estimates that if this kind of fraud continues over the next 5 years, the EITC could waste another $37 billion. We can't afford this. We need to get the program back to its original purpose: to help families with children offset the sting of payroll taxes. And that is exactly what we do with our proposal. We focus the program on the population for whom it was originally intended. We return it from being just another welfare program to where it belongs as a legitimate tax break for lower income working Americans with children. Our reforms will place an important degree of control on this program. They successfully address the problems of rampant growth, fraud, and abuse. The key phrase here is ``controlling growth.'' Remember, EITC will continue to grow. It will continue to meet the needs of those most vulnerable among us. According to the Joint Committee on Taxation, families with children, who now receive the maximum earned income tax credit, will continue to receive a larger earned income credit in the future. When combined with the $500 child credit and marriage penalty relief--issues that I will speak about in a minute--low-income working families will be better off under our bill than they are today. Finally, we will continue to spend in excess of $20 billion on the EITC, keeping it as a significant program for the working poor. medicare Our second major objective with the proposal we are introducing is to strengthen, preserve, and protect the Medicare system--not only for those who depend on the system today, but for those who will need Medicare tomorrow. We accomplish this by allowing the program to grow at about twice the rate of inflation, and by introducing choice in the system. In this way, seniors are guaranteed continued coverage as well as the ability to choose those plans and health care providers that best meet their needs. In our proposal, Medicare spending increases form $178 billion in 1995 to $286 billion in 2002. Average spending per beneficiary grows from $4,800 to $7,000. Our proposal controls runaway costs by introducing choice into the system, giving our seniors the ability to remain in the current fee- for-service plan, if that is what they want. On the other hand, we also offer them an unlimited number of health care plan options that they may choose to better meet their needs. We call this Medicare choice, and it includes, beyond the current fee-for-service plan, the opportunity for our seniors to join plans sponsored by local hospital and physician groups, health maintenance organizations, point-of- service plans, or preferred provider organizations. It also allows for seniors to join high deductible medical savings account plans, union or association plans, and, in fact, any other kind of health plan that meets the standards we set to protect the beneficiaries. Beneficiaries will be protected under our proposal. Despite the plan they choose, all seniors will receive coverage for the same services and items that are currently covered by the traditional Medicare Program. The good news is that as these new plans compete with each other for business, it's likely that they will offer even more benefits and improved services. The private sector, which has done much better in keeping costs down than the Government, has proven that choice creates competition, and competition is good for the consumer. And the fact is, in our proposal we are offering seniors even more efficient and effective health care plan options than are available to most working Americans through their employers. By introducing private market incentives into the Medicare Program-- by giving consumers options and encouraging providers to compete for business--we could control program growth sufficiently enough to save it in the longterm. It is no surprise that the private sector has been much more successful at controlling health care costs, with innovative programs based on market principles, than the Government, which has depended largely on price controls. To survive, the Medicare system must allow patients and providers to use health resources efficiently through a choice of plans. This is not a new idea; it is an approach that's been tested and proven. Offering choice in Medicare is based on the highly successful Federal employees health benefit plan. Largely because of choice, this year the average FEHBP premium was reduced by 3.3 percent. Next year, the average increase will only be 0.4 percent, proving that choice brings competition and savings. In fact, choice could work so well that our current projctions--projections that keep Medicare solvent through 2020--could be understated. Beyond using choice to strengthen the program, beneficiaries will continue to pay 31.5 percent of the premium for part B. In 1997 we will phase out the taxpayer subsidy of the affluent for part B; we will increase the deductibles from $100 to $150, and then increase it $10 every year, thereafter. Savings will also be made on the part of Medicare providers, predominantly through reductions in scheduled payment increases. Despite these restraints, providers will continue to enjoy annual growth rates of between 4 and 10 percent over the next 7 years. Our proposal also aggressively attacks fraud and abuse in the Medicare Program. The GAO estimates that the loss to Medicare from fraud and abuse equals some 10 percent of the program's total spending, and law enforcement officials claim that the majority of Medicare fraud goes undetected. What we propose is to earmark a portion of trust fund money, starting in its first year with $200 million, to use for investigation and prosecution of health care fraud. We also offer a number of new tools to assist investigators and prosecutors in attacking this problem. The CBO has estimates that our provisions in this area will save the program more than $4 billion over 7 years. Under our program, reforms would extend the solvency of Medicare for about 18 years. According to the CBO estimates, under our proposal, the Medicare HI trust fund balance will total $300 billion in the year 2005. The CBO states, ``the HI trust fund would meet the Trustees' test of short-range financial adequacy.'' In other words, for the next 10 years, the HI trust fund balance, at the end of every year, will be more than enough to pay Medicare benefits for the following year. More importantly, using the CBO's estimates through 2005, our Finance Committee staff, in consultation with the Office of the Actuary within the Department of Health and Human Services, estimates that the Medicare Hi trust fund will be solvent through about the year 2020. That's 10 years--10 years--after the baby- boom generation begins to retire, a quarter of a century from today. Concerning Medicaid, our objective is, again, quite simple, to control the unsustainable growth rate of this program--a rate which reached as high as 30 percent in 1993. Even at its current 10.4 percent, the growth rate is too high. We bring it down to a manageable and more realistic 5 percent. We can accomplish this by moving the program back to where it belongs--back to the States. In fact, Governors have said that they can manage the program with the more moderate spending increases if the Federal Government will simply get out of their way. Medicaid is best addressed by giving States adequate funds and the authority necessary to meet the needs of their most vulnerable citizens, without interference and excessive regulation from Washington. Governors have been asking for this authority since 1989, when Bill Clinton, then Arkansas' chief executive, signed a resolution calling for a freeze on the enactment of further Medicaid mandates. By extending States' authority, allowing Governors the opportunity to find innovative ways to provide for the unique needs of their respective States, we can keep the program at a manageable 40 percent growth rate by 2002, rather than the 100-percent increase in spending now projected by CBO. Certainly, under this new structure, the States will have certain requirements that must be met. For example, they will be accountable for how Federal dollars are spent. States will spend 85 percent of what they are now spending on mandatory benefits for the three of the most vulnerable populations: low-income pregnant women and children, the disabled, and the elderly. There will also be protection from nursing home costs against impoverishing spouses living at home. Likewise, States will be allowed to use Medicaid funds to see that children are immunized. We must remember that Medicaid was designed to be an equal partnership between the Federal Government and the States. However, the Federal Government in recent years has effected what can only be seen as a take-over. Toward this end, all three branches of the Federal Government have played critical roles. Congress and the courts have expanded eligibility while the bureaucracy has paralyzed the States with regulations. The time has come to release the choke hold. Medicaid now consumes 20 percent of State budgets--20 percent. That means fewer dollars for education, for fighting crime, and rebuilding infrastructure. Since 1990, the number of Medicaid recipients have increased by nearly one-third, as the current law has created over 70 different ways for people to become eligible for benefits. Promising more benefits for more people plus using the political system to negotiate supply and demand is a prescription for failure. The price for this now includes annual deficits of up to $200 billion and a second mortgage on the future which our children and grandchildren will be forced to pay. Today we change these dynamics. Today business as usual is over. The reconciliation package we offer allows us to meet the needs of low-income individuals, while at the same time controlling costs, improving the program, and working toward a balanced budget. Under our proposal, Medicaid spending continues to grow, but at a slower, more predictable rate. The money is given to the States with the flexibility to design effective and innovative programs--programs to meet the individual needs of their low-income citizens. States can cover individuals and families with income below 250 percent of the Federal poverty level--that's $31,475 for a family of three. What we get away from are the thousands of pages of Federal mandates that stifle creativity and our States' ability to develop programs that are both efficient and effective. Under our proposal, we repeal all mandates. We allow States to standards and provider payment rates. And we no longer require Federal waivers to implement many of the innovative delivery systems that have proven to be so successful in the private sector. In fact, we encourage States to combine programs and experiment. However, as a safeguard, we ask States to develop a State plan and to submit annual reports and independent evaluations as well as provisions for fighting fraud and abuse. As under current law, the Federal Government will match State funding, up to an aggregate cap. Under this proposal, total Federal Medicaid spending will continue to increase over the period 1996-2002. In this period, the Federal Government will provide $776 billion to the States to meet the needs of poor children, the elderly, and people who are disabled. This is the equivalent of half of the total of today's Federal budget. Between 1995 and 2002, total Federal spending on Medicaid will still grow by over 40 percent. Mr. President, the States will make these reforms work. Federal funding will continue to increase while we provide the States with control over how these funds will be spent. After 30 years of Federal control, it is time to put the State in charge. Capping Federal spending will allow the States to enforce fiscal discipline. They will clearly know that the deep pockets of the Federal Government are not bottomless. With firm control over these funds, we will unleash the creativity of the States in meeting the needs of the low-income citizens. The States will be able to expand managed care without asking permission of the Washington bureaucracy. Coupled with the welfare reform package just passed, the States will be able to experiment with ways to move families off welfare and into work. The States will be able to design health insurance coverage so that the loss of Medicaid will no longer be a barrier to leaving welfare. The States will plan, design, and implement Medicaid reform which will meet their own unique needs in ways Washington has not even started to think about. Taxpayers and beneficiaries alike will benefit from Medicaid reform and from achieving a balanced budget. tax reform These are important reforms. Without them, the Medicare trust fund will become insolvent within a few years, and Medicaid will eat away at our children's future, forcing Federal and State governments to borrow money for generations yet unborn. According to University of California economist Alan Auerbach, if current spending trends and benefit formulas continue, ``the tax burden would be very close to absorbing all the lifetime income of future workers.'' To escape from this, we must prepare to move quickly and successfully beyond our first objective of passing the budget resolution to embrace what should be our second, adopting initiatives that create an environment for economic growth. The only way to break out of deficit spending, without cutting off essential services and forfeiting on the contracts the Federal Government has made with our senior citizens, is to renew healthy economic growth--growth which is above the 2.3- or 2.5-percent range currently projected by official forecasting agencies. This environment will be created only as Government adopts real tax reform--reform that shifts the bias against savings and investment in the current Tax Code to a system that encourages saving and investment over consumption. Among the means to tap into the consumption base are: The flat tax, a national sales tax, or an expanded IRA. While some have emphasized the differences between these three plans, they are grounded in the same economic concept of taxation, and I am pleased to see their growing acceptance among Americans. Ultimately some kind of compromise, possibly including elements from all of them, should be possible. The current income tax system has not only undermined economic growth, it has also undermined the economic position of American families. We must act to provide tax relief for families that are already facing intense pressures on other fronts. It is my desire to provide tax relief in the context of the current reconciliation package, but I also believe we must not overlook the opportunity to provide the additional tax relief in future tax reform, financed by continued restraint in Federal spending growth. The tax relief offered in this reconciliation package is very much in the realm of current possibilities. We offer a $245 billion tax cut which goes into effect only when the CBO has certified that deficit reduction is being achieved. Despite what some may say for political reasons, this tax relief does not come at the expense of Medicare. As the generally more liberal Washington Post admitted, ``The Democrats have fabricated the Medicare-tax cut connection because it is useful politically.'' In an earlier editorial, the Post opined that, The Democrats are engaged in demagoguery, big time. And it's wrong. . . . [The Republicans] have a plan. Enough is known about it to say it's credible; it's gutsy and in some respects inventive--and it addresses a genuine problem that is only going to get worse. What Democrats have [on the other hand] is a lot of expostulation, TV ads and scare talk. That is the end of the quote from the Washington Post. Under the bill we propose today, using Medicare savings for tax cuts is illegal. The law requires that money saved on the Medicare Program will stay in the Medicare Program. These are trust funds, the assets of which may not be used for any other purpose. And to say otherwise, as the Post points out, is little more than politically motivated scare tactics. The fact is, our efforts preserve and strengthen the Medicare trust fund. This is a promise made and a promise kept. Likewise our efforts bring the Federal budget into balance and provide substantial tax relief for middle-income Americans. Again, promises made and kept. I can only guess that these scare tactics are being used by some because for so long these individuals have gotten by politically by making promises without keeping them. Well, you cannot have it both ways. You are either working for the kinds of changes the American people want, or you are locked into business as usual. You are either working for reform, or you are an agent of big Government, runaway spending, and political gridlock. Let this reconciliation package show Americans who stands where on these important issues. Our plan offers a $500-a-child tax credit, encourages savings and investment, and offers other incentives for economic growth. Our proposal to cut taxes by $245 billion, offers relief for our middle class--with over 70 percent of the $245 billion going to families making less than $75,000 a year. These provisions mean more security for our families, more jobs for Americans, and greater stability in our communities. Of the $245 billion Senate relief package, a full $223 billion will go to families. The remaining $22 billion will strengthen businesses and lead to increased employment opportunity. It will also improve America's ability to compete in the global community, with other nations that provide their businesses with strong incentives to compete with us. The four pillars of our proposal are: First, a $500 child tax credit; second, restoration and strengthening of individual retirement accounts; third, relief from overbearing estate taxes on families and businesses; and, fourth, reduction of the top rate of capital gains on individuals and corporations. These measures meet our promise to the American people. They represent a bold beginning in our effort to break with the failed policies of the past. The current tax system double-taxes savings, thwarts investment, hinders productivity, increases prices, stifles wages, and hurts exports. It is complex, controlled by special interest groups, and places disincentives on work. We move to correct these deficiencies, and because we have cut spending, our bill balances the budget while making room for tax relief. Americans need relief. Our economy needs a shot in the arm. Even Bill Clinton has admitted as much. I call on him to join us in our efforts to unleash the potential our economy has to move us into a bold and exciting future.

Mr. ROTH. Mr. President, will the distinguished Senator from New York yield? I have about three more pages. May I finish?

Mr. ROTH

Mr. ROTH. Mr. President, here we go again. It is not enough that President Clinton has admitted that he and his allies have raised taxes too much, but here his allies in Congress are already seeking to undermine real tax relief for middle-class Americans. These folks cannot have it both ways. What Senator Dorgan's amendment amounts to is little more than business as usual. At home and on the campaign trail, the President and his allies talk about change--real change--but here in Washington they continue a game that has been playing out for three decades, a game that has led our Nation into a debt that is almost $4.9 trillion, a game that has run us into $200 billion deficits, and a game that has done little, if anything, to improve the conditions of the most vulnerable among us. Why do they persist? Because they want it both ways. In some quarters this is called talking out of both sides of the mouth. Even the Washington Post has identified this symptom. According to the Post, the Democrats have fabricated the Medicare tax cut connection because it is useful politically. In an earlier editorial, the Post opined that The Democrats are engaged in demagoguery, big time. And it's wrong. . . . [The Republicans] have a plan. Enough is known about it to say it is credible; it's gutsy and in some respects inventive--and it addresses a genuine problem that is only going to get worse. What Democrats have, on the other hand, is a lot of expostulation, TV ads and scare talk. What my colleagues on the other side of the aisle will not tell the American people is that under the plan we are proposing, using Medicare savings for tax cuts would be illegal. The law requires that money saved on the Medicare Program will stay in the Medicare Program. Remember, these are trust funds, the assets of which may not be used for any other purpose. And to say otherwise, as the Post points out, is little more than politically motivated scare tactics. The sense-of-the-Senate amendment completely undermines the progress we have made toward saving Medicare. Without our plan, the trust fund is bankrupt in 2002. It is that simple. Without our plan, the Government will not be able to live up to its obligations. We assure solvency of the program until the year 2020. This gives us a sufficient time to focus on the needs that will arise when the baby-boom generation reaches the age of eligibility. It is important to note that Senator Dorgan's plan is not even based on the [[Page S 15493]] Senate Finance Committee proposal. It is based on the Clinton administration assessment of the House plan. How in the world are we supposed to make an intellectual judgment call when the amendment Senator Dorgan asks us to vote on mixes apples and oranges, citing what only can at best be called partisan economic data. Let us restore intellectual honesty to the debate. According to the Joint Committee on Taxation, 70 percent of the benefits of the Finance Committee tax bill will go to families making under $75,000 a year. Seventy percent. Our bill provides a $500 per child tax credit to our hard-working families. It eliminates the marriage penalty for many, creates a credit for adoption expenses, and helps with student loan payments. We also provide much-needed incentives for savings and investment. These are all middle-class provisions that go to help the people President Clinton has admitted to raising taxes on. What we are doing is trying to help the President and his allies correct a mistake. Let us make it right for the American people. Mr. President, I move to table the pending Dorgan amendment.

Mr. ROTH. I ask for the yeas and nays.

Mr. ROTH. Mr. President, I move to reconsider the vote.

Mr. ROTH

Mr. ROTH. Mr. President, on September 29, 1995, at the Dupont Country Club in Wilmington, DE, the 5th annual Roger Crozier Invitational Golf for Adoption was held. This event benefits the Gladney Center, which places children for adoption throughout the United States, and the National Council for Adoption. It was created by an accomplished athlete, a successful [[Page S 15139]] businessman, and a strong advocate for the cause of adoption, Mr. Roger Crozier. During the evening of the event, a special ceremony was held honoring Mr. Crozier for his achievements and efforts on behalf of adoption. The well-known sports writer, Tony Kornheiser, wrote a befitting tribute for the evening and I ask that the tribute by Mr. Kornheiser be printed in the Record. The tribute follows: Remarks by Tony Kornheiser Many of you in the audience may be young enough that you are not familiar with the great career Roger had in hockey. So let me fill you in a bit: He played 14 years in the National Hockey League as a goalie. Of all the sports that I've covered, I think hockey is the toughest to play. You're hardly in motion at all in baseball. You're in motion all the time in basketball--but when you touch somebody in basketball you're called for a foul. In hockey, there is continuous motion and frequent violent hitting. True, the hitting is harder in football, but there is more rest between plays. So I think hockey stands alone in what it asks of you physically. And of all the sports I've covered, I think playing goalie is the toughest position. The puck is flying at you, frequently at speeds exceeding 100 miles an hour. And often there are people between you and the puck, screening off your vision, so you don't even get a good look at the puck as it hurtles towards you. Sometimes, just before it gets there, just as you have your glove out to snatch it, somebody will nudge it with a stick or a skate, and you have to readjust instantaneously. As a goalie you are asked to be a wizard with your stick and glove, and an acrobat on your skates. And don't you ever forget that every eye in the place is on you. And should that puck trickle through your legs, or skip over your stock, or rip into the net behind you . . . you will hear boos that will make your ears burn. No matter how many pads a goalie wears, he's always naked out there. Sometimes I think goalies wear those masks less for protection from the puck than to hide their faces, so the booing fans won't know who to chase after the game. Roger Crozier did this for 14 years at the highest level of hockey in the world. Can you imagine the skill and courage and reflexes it took to do it for that long. You can't be ordinary and last 14 years. They'd have shipped you out long before that. Roger was very good from the start. He was named Rookie of The Year in his first season in the league; his name is on the Calder Trophy along with people like Bobby Orr, Mario Lemieux and Denis Potvin--giants of the game. In Roger's rookie season a Canadian hockey writer said of Roger, ``Few goaltenders have descended on the National Hockey League in the past 10 years with the impact of the acrobatic Crozier. This sprawling, weaving, twisting hockey octopus is a fan's delight.'' Later in his career Roger played for Buffalo and Washington, expansion teams where there were so many holes in the defense that a goalie feels he's skating through swiss cheese. When a goaltender gets hot people say, appreciatively, ``He stood on his head tonight.'' Well, with an expansion team even standing on your head can't help. But in those early days with the Detroit Red Wings, Roger played on a team that gave him a chance to strut his stuff. Canadian columnist Red Burnett talked about Roger's goaltending style then, saying. ``He usually makes a last second lurch with the speed of a striking rattler to block or glove the puck. Some say he has the fastest catching hand in the business.'' Roger was in fact so fast and so good that in 1966, even though Detroit loss the Stanley Cup final to Montreal, Roger was named the Most Valuable Player in the playoffs. His name is engraved on the Conn Smythe trophy with Wayne Gretzky, Jean Beliveau and Guy Lafleur. That's very elite company. Every generation throws another hero up the charts. People my age look back with awe and reverence at athletes like Jerry West, Oscar Robertson, Willie Mays and Mickey Mantle. But my children don't even recognize those names. For them it's Shaquille O'Neal and Ken Griffey Jr. When I go back even further and mention Bob Cousy or Ted Williams they look at me like I must have fought in the Civil War. So it is that Roger Crozier's deeds on the ice grow a little dimmer with each passing year and each successive crop of wizard goaltenders. But as a sportswriter, and particularly as a grateful adoptive parent, I thought you'd like to know what this fine man did before you knew him.

Mr. ROTH

Mr. ROTH. I appreciate the clarification from my distinguished colleague from New Mexico. I am greatly concerned about the impact of the proposed appropriations reductions on the ITC. I hope the conferees will provide the maximum level of funding possible for the ITC in the final bill.

Mr. ROTH. Mr. President I would like to inquire of the Senator from New Mexico as to the intent of his amendment with regard to the International Trade Commission.

Mr. ROTH

Mr. ROTH. Mr. President, I rise as a cosponsor of the Brown amendment--the NATO Participation Act Amendments of 1995. No other issue is more crucial to European security than NATO's relationship with Central and Eastern Europe. Today, we are in the midst of an historical era, an era of transition. It is a phase in which the strategic landscape of Europe is particularly malleable--a phase that will not last forever. How the Alliance manages its relationship with the nations of this region during this period will determine whether or not Europe will ultimately have the benefits of an enduring and stable peace. Careful, gradual, but undeterred enlargement of NATO should be the geopolitical priority of America's Europe policy. The Alliance is uniquely qualified to provide the institutional foundation for regional security and peace. No other institution combines the two necessary requisites to serve in this role: a transatlantic dimension and proven operational capability. The Brown amendment explicitly endorses and facilitates a process of NATO expansion. Passage of this amendment is an important step toward establishing a system of European security consisting of two pillars: an enlarged NATO and a strategic partnership between the Alliance and Russia. Since I have endorsed this legislation before in this Chamber, allow me, Mr. President, to briefly review the key reasons why we should support the process of NATO enlargement and why we should vote for the NATO Participation Act Amendments of 1995: First, extending the Alliance's membership to the nations of Central and Eastern Europe, beginning with Poland, Czechia, Slovakia, and Hungary, will help transform this region from a source of instability into a cornerstone of peace. Both recent and long-term history show us that the region's strategic vulnerability has been a source of danger on the continent--with calamitous consequences that drew the United States into two World Wars. Second, NATO enlargement would help facilitate the economic and political integration of this region into the West. Passage of this amendment would demonstrate America's commitment to consolidating an enlarged Europe, and it would give more incentive to all the nations of Central and Eastern Europe to continue their reforms. Third, the extension of NATO membership to Central and Eastern Europe would positively influence the evolution of two great powers, Germany and Russia. These two nations are now undergoing very complex and sensitive transformations. The outcomes will be significantly shaped by the future of Central and Eastern Europe. NATO enlargement would further lock German interests into a transatlantic security structure and thereby consolidate the positive role Bonn plays in European affairs. Moreover, and this leads to my fourth point, NATO enlargement into Central and Eastern Europe benefits Russia. By enhancing and reinforcing stability in Eastern Europe, an enlarged NATO would bring greater stability to Russia's frontiers and would enable Russia to direct more of its energy to the internal challenges of political and economic reform. Mr. President, this point is too often forgotten in this debate. There has been too strong a tendency in United States policy to overreact to outdated Russian sensitivities at the expense of strategic realities and objectives central to the interests of the Alliance, as well as to the United States. Finally, Mr. President, let me emphasize the NATO Participation Act Amendments endorse a vision of European security in a manner fully consistent with the spirit and charter of the Washington Treaty. It calls upon the President to undertake programs that will help the nations of Central and Eastern Europe prepare themselves for the responsibilities of NATO membership, Enlargement is a process for which the Alliance has always been geared. Indeed, Article 10 of the Washington Treaty provides for the enlargement of the Alliance to any European state ``in a position to further the principals of this Treaty and to contribute to the security of the North Atlantic area.'' Mr. President, America's policies toward Europe must be structured to shape a strategic landscape that enhances economic, political, and military stability in all parts of Europe. This is in our Nation's best interest, and it is the intent of the NATO Participation Act Amendments to see such policies embraced. For this reason, I call upon my colleagues to pass this legislation.

Mr. ROTH

Mr. ROTH. Mr. President, the American people are united by the fundamental issues of welfare reform which have divided us throughout much of this debate. It is clear that they have demanded a dramatic change to a system which they view as ineffective and indeed as an impediment to the progress of both the individual and society as a whole. The $387 billion welfare system has sapped the spirit of many, most especially of our young people, and our national economic strength. It has now been 60 years since the Social Security Act was passed which created the aid to families with dependent children program. According to the act itself, the purpose of title IV of the Social Security Act, is in part, to help maintain and strengthen family life and to help such parents or relatives to attain or retain capability for the maximum self-support and personal independence. For too many, this is no longer a system which helps to maintain and strengthen family life in America. Many, in fact, believe the welfare system has the opposite effect on families. The theories which supported public policy in the past have been dispelled by the last 30 years of experience. The misplaced hope that Washington could somehow correctly calculate the formula to solve the problems of poverty is simply wrong. What happens in the home, in the neighborhood, in schools and churches is far more powerful than the Federal Government. We have known this all along. But knowing is different than doing. Today is the day we do something about what we know. We know that work is necessary to attain self-support and personal independence, Today, we elevate the value of work to its proper level of esteem in public assistance programs. We know that if welfare is to be only a temporary means of support, the key to personal independence is work. We know this basic fact of life is true for all families, at all levels of income. It is true for past generations. It is true for this generation and all future generations. Work is not only necessary as the means for obtaining our daily bread, it is part of our social fabric. Whether in the neighborhood or in the world, work brings order to chaos. Many other freedoms flow from the freedom to work. We know the current welfare system is designed for failure. Under the heavy hand of the ponderous and paralizing bureaucracy of the Potomac, non one is accountable for results. Today, we will provide the States with the responsibility and authority they need to break down the barriers and false promises of the present system. Properly understood, welfare reform is about reforming how Government works. The American people will greatly benefit from the rejuvenation of the States' role in our system of federalism. The lines of accountability have been blurred for far too long. Mr. President, today is the day to leave the past behind. To sum up what this debate is truly about, let me quote from a letter sent last week by Governor Allen of Virginia: What the debate really boils down to is who does the U.S. Senate trust to make these policy decisions--the Federal bureaucracy or the elected representatives of the people at the State level. This is a basic philosophical question. The choices you make will determine whether the bold innovations that are occurring in Virginia and other States can move forward, or whether Federal bureaucrats will continue to micromanage and second guess the decisions of the people of the States and their duly elected representatives. I respectfully urge you to place your trust in the States, which are leading the way. Mr. President, I urge my colleagues to put our confidence and faith in the sovereign States. Let us break from the past and free the States and the families who need a temporary hand-up from the system which has failed us all. Mr. President, there are a number of Members and staff who deserve our recognition and appreciation for moving this legislation forward. Above all, the majority leader has done a masterful job in delivering on the promise of welfare reform. At several points over the past few months, it looked as though a comprehensive bill would slip through our fingers. Once again, he has demonstrated his skills as a true leader. I congratulate Senator Moynihan on his tireless efforts on this legislation. His knowledge of these issues cannot be matched. Let me also thank those Senators who did remarkable jobs managing this legislation under very demanding and trying circumstances, especially Senators Nickles, Santorum, Grassley, Chafee, Hatch, and Simpson. Few people will understand or appreciate the enormous job done by the staff in helping to get this legislation passed. The bill itself was nearly 800 pages long at the beginning of consideration. We added more than 200 amendments into the process. The staffs from Finance, Agriculture, and Labor Committees as well as from the leadership offices, the Congressional Budget Office, and legislative counsel accomplished a rather remarkable feat. In particular, let me thank and commend Sheila Burke in the leader's office, and Lindy Paull, Kathy Tobin, Rick Grafmeyer and Joe Zummo from Finance for their great efforts and dedication. Other staff members who deserve our thanks are Dave Johnson, Peg Brown, Susan Hattan, and Shannon Royce. From the Democratic side, Margaret Malone, John Secrest, Joe Gale, and Mark Patterson made special contributions to this legislation. There is still much work ahead of us as some of the details differ between this legislation and welfare reform as passed by the House last March. But the most important test, the strength of our will to break the cycle of poverty, has been met. I look forward to completing our work and to sending real welfare reform to the President.

Mr. ROTH

Mr. ROTH. Mr. President, I am pleased Senator Lieberman proposed his performance standards amendment and that we have been able to collaborate on this important initiative. I also want to thank Senator Hatfield for his interest in this issue and for his support. Mr. President, the last time Congress passed major welfare legislation was in 1988 to create the job opportunities and basic skills training [JOBS] program. The intent of this legislation was to move families from welfare to work. Since then, Federal and State governments have spent almost $8 billion on this program alone. This does not include JTPA or a variety of other employment and training programs. GAO has issued a number of reports on the JOBS Program. One need not read past the title of a recent statement by GAO before the Committee on Labor and Human Resources which states, ``AFDC Training Program Spends Billions, But Not Well Focused on Employment.'' GAO testified, ``Today, more than 5 years after JOBS was implemented, we do not know what progress has been made in helping poor families become employed and avoid long-term welfare dependence.'' After spending $8 billion on this program, what has the program achieved for the taxpayers or the welfare recipients? GAO does not know. The Department of Health and Human Services does not know. The existing AFDC quality control system cannot tell us. We simply do not know. Over the years, Congress has created a confused and confusing system which rewards idleness and punishes work. The goal of employment has been lost in an excessive bureaucracy. Education and training have been separated from employment when a job is the real education and training program people need. That is a system which makes sense only in a Lewis Carroll story. Mr. President, by now, it is generally well known that the Republican welfare reform bill eliminates the JOBS Program and gives the power to the States to design their own work solutions. However, we have also taken an additional step to ensure that we will know whether the States are effective in moving toward the goal of reducing dependency by incorporating performance standards into the legislation. Senator Lieberman's ideas and support strengthen this proposal. These performance standards are consistent with the quality assurance system already being discussed among the States. The National Association of Human Services Quality Control Directors has stated that, ``with the numerous welfare reform waivers being implemented across the Nation, one essential component is the provision of performance outcome measurements.'' The idea of establishing performance standards is not new. In the Family Support Act of 1988, Congress required the Secretary of Health and Human Services to develop and transmit to Congress a proposal for measuring State progress. Those recommendations are nearly 4 years overdue. Much of the testimony during the welfare hearings held since March supported the idea of outcome-based performance standards. I do not believe we need to wait any longer to implement that which we called for 7 years ago. Earlier this year, the quality control directors helped develop eight specific outcome-based measurements. These measurements were developed by State officials from Delaware, Illinois, California, Oregon, Kentucky, Georgia, Massachusetts, Minnesota, Virginia, and West [[Page S 13507]] Virginia. The measurements included in the Republican bill are consistent with those recommended standards. Let me also point out there are inherent benefits to be realized in whatever progress the States make toward these performance measurements. Block grants should not mean simply giving money to the States and turning our backs on what they do with it. The purpose of public assistance is to help families temporarily in need to return to financial independence. Establishing performance standards will help us hold the States accountable for this $16 billion program. Properly understood, welfare reform is about reforming how Government works. Under the present system, no one is accountable for results. In 1993, Congress took an important step toward outcome-based performance through the Government Performance and Results Act. For the welfare system and for other governmental programs as well, block grants to the States are another important step in reform. This next step in welfare reform may well become a giant leap in reinventing Government. In the future, Government funds will no longer be simply distributed to provide a good or service. By instituting a quality assurance system based on performance standards, the American people will know whether their hard-earned dollars worked as intended. Over the past 30 years, we have spent $5.4 trillion on our longest war, the war on poverty. Now is the time, before another 30 years go by, to establish a system which will tell us whether the goals we have set are being achieved. Performance standards will enable us to do exactly that and we will not need the miles of regulations and thousands of bureaucrats which now drive the system. Again, I want to recognize and thank Senator Lieberman and Senator Hatfield for their efforts on this legislation. I want to also express my deep appreciation to Senator Dole for including my amendment in the Republican substitute. We have taken a bold and important step in changing the way Government works.