Christopher Shays

Mr. SHAYS

Mr. SHAYS. Well, first off, it is just important that we recognize that the program is growing significantly. The program is growing significantly, it is not being cut. On a per person basis, we are going to allow it to grow as it did last year from $4,800 to $7,000 per beneficiary. We did it without an increase in the copayment, without an increase in the deductibles, and without an increase in the premium. The premium will stay, except we did do something for the wealthiest. Those who make over $100,000 and are single will pay more in their premium. If they make over $150,000 and they are married, they will pay more in their premium. So we did say the very wealthy should pay more. It is not something that Democrats like to say that Republicans do, ask the wealthiest to pay more. Sometimes I have to say sometimes Republicans do not like to acknowledge that we are asking the wealthiest to pay more. But people who are receiving Medicare, it is the best buy in town. Those who can afford it should pay more, and we are asking the very wealthy to pay more. Now, what we are also doing is we are allowing for choice. We are allowing for people to get the same opportunity that the gentleman from Michigan, Mr. SMITH, and I have. I mean, we have the opportunity to choose a whole host of different health care plans. We are not looking into one. If we get a more expensive plan, we have to pay for more dollars. We have to still pay a greater amount if we get a more expensive plan. But we are given choice. Mr. Speaker, under the traditional Medicare system, there is no choice. It is a traditional fee-for-service.

Mr. SHAYS. We have had really three main objectives. One is to get our financial house in order and balance the budget. We came forward with a 7-year plan. We actually have real and absolute cuts, absolute cuts in what we call discretionary spending. We were going to spend less in some programs next year than we spent this year, and we spent less this year than we did in the year before. Those are true cuts. But in 50 percent of the budgets, some programs that are very important in Medicare and Medicaid, we are allowing for significant increases in both of those programs. We are just trying to slow the growth. So our first effort is to get our financial house in order and balance the budget. Our second one is to save Medicare from bankruptcy. We are going to learn tomorrow that the Medicare plan fund, the Medicare part A, which was to remain solvent, not bankrupt, remain solvent to the year 2002 and will actually probably become bankrupt maybe in the year 2000, which is 2 years sooner than we thought.

Mr. SHAYS. We rescinded certain expenditures. In fact what we did do, if I could be a little more precise, we actually cut $20 billion from that budget, but then added $11 billion back that the President requested and would have been in the budget if we had not even made the $20 billion. We had a net savings of $9 billion. But then we had the debate in 1996 and the shutdown of Government. We had the shutdown of Government in part because when we gave the President certain budgets, he vetoed it. We ended up with zero and a disagreement on how much we should spend. Ultimately we have now a full agreement with the President on the 1996 budget, the budget we are in now, and which will end the end of this September. The thing that we need to point out is the President wanted to spend $7 billion more than we spend in 1995, and we ended spending $23 billion less. We ended up making a savings ultimately to his plan of $30 billion, $23 billion of actual reductions in this year less than we are spending, less than we spent last year.

Mr. SHAYS. If the gentleman will yield, that is the budget we were already in.

Mr. SHAYS. Happily.

Mr. SHAYS. To our credit, that is the one area where Congress has greater control than the President. When we spend and appropriate an item and the President vetoes, we get zero.

Mr. SHAYS. But the bottom line to this is that each and every year we vote on about a third of the budget. We do not vote on the interest on the national debt, and we do not vote on half of the budget, which are what we call entitlements, that long list that we have there. So we have been trying over a number of years to try to control spending by just looking at defense and nondefense, what is spend out of the Committee on Appropriations.

Mr. SHAYS. Well, when I was in the statehouse, I was always amazed that our Federal leaders could continually spend more money than they raised in revenues and their incredible reluctance to do it. I kept asking myself how could it happen, and I think that we have to acknowledge that the blame was bipartisan and also shared with Congress and the White House as well. I think it is fair to say that some on our side of the aisle, the Republican side of the aisle, did not see a defense program they did not like and were quite willing to keep spending. And on the other side of the aisle, there was no concern to control the gigantic growth of entitlements. I notice that my colleague may have a pie chart that illustrates that 50 percent or more now of all that we spend are entitlements. Before referring to the chart, I would just like to talk about what that means. It means that half of our budget we do not even vote on each and every year. It is one reason why Congress was simply not getting a handle on that budget and the White House. Almost 50 percent of the budget was on automatic pilot. You fit the title in welfare, you get it. You fit the title in Medicare, you get it. You fit the title in Medicaid, you get it. You fit the title on certain agricultural subsidies, you get it. Mr. Speaker, I did not have to vote in each and every year to set priorities with other priorities. So they just kept growing and growing. I would love to yield to my colleague to talk more about this issue.

Mr. SHAYS. Mr. Speaker, I thank the gentleman for participating. As the gentleman was talking, I thought about when I was elected in 1974 to the statehouse. When I was in the statehouse, we had a law that said you could not spend more than you took in in revenue. I see my colleague from Michigan as well, and I know that he represented, was in the statehouse as well. I think he probably had that same kind of requirement; did he not?

Mr. SHAYS. I would love to just say to the gentleman that I remember well in 1989 he offered an amendment to try to get a handle on government spending and I think there were only 38 Members who supported him. Each year he kept offering amendments to slow the growth of the Federal Government, to not make these deficits so large, and each year he got more and more support. It was just a constant effort on his part. I remember him asking Mr. Greenspan at the hearing he chaired, he said, ``Mr. Greenspan, are you concerned that we will cut spending too much?'' He responded by saying, ``Mr. Chairman, I don't go to sleep at night fearful that when I wake up the next day that Congress will have cut too much.'' But you are not just talking about cutting, because what you are also talking about is growing this economy and to move it from the Federal Government to the State government which is so important.

Mr. SHAYS. I thank the gentleman. Mr. Speaker, we have three primary objectives in our effort to get our financial house in order and balance the Federal budget and save our economy. We have three major objectives as we sit and work on this floor of the House. Our first is, in fact, to get our financial house in order and balance our Federal budget. The next is to save our trust funds, particularly Medicare, from bankruptcy. The third is to transform what I would call our caretaking, social, corporate and farming welfare state into a caring opportunity society. It is probably that last one that ends up being the most controversial; but, clearly, the first is controversial as well, because you cannot separate the budget from politics and from priorities. The bottom line is that we have to set priorities. If we spend money here, we may not be able to spend money there. It is a concept of opportunity cost. We give up an opportunity when we decide to put our priorities here and our resources here. We give up the opportunity to spend them here. Our plan is designed to help Americans earn more so that they can keep more and so that they can do more. The debate we had last year was quite controversial, but there were some basic facts that simply cannot be denied. We tried to increase the earned income tax credit; we tried to increase school lunch programs; we tried to increase the student loan program; and we tried to increase Medicaid and Medicare. Under our plan last year that was vetoed by the President, we had the earned income tax credit, which is presently $19 billion. We sought in the seventh year to increase it to $25 billion. The earned income tax credit is a credit given to those who make money but make so little money that they do not pay taxes. In fact, they get back an earned income tax credit from the taxpayer. Others who make enough who pay taxes pay some, the working poor, more money than they earned. That is called the earned income tax credit. It was said last year when the President vetoed our plan that we were cutting the earned income tax credit, and yet the earned income tax credit went from $19 billion to $25 billion. Only in this Chamber and perhaps in Washington when you spend so much more do people call it a cut. The school lunch program grew from $5.2 billion to $6.8 billion. I can remember seeing the President and some of my Democrat colleagues on the floor of the House talking about this issue but going to schools as well. At schools they were telling the students that they would not under the plan of the new Congress, the Republican Congress, have school lunches in the future. Yet our plan grew from $5.2 billion to $6.8 billion. Instead of it growing 5.2 percent a year, it was going to grow at 4.5 percent a year, of new money, each and every year. So we slowed the growth of the increase, still allowing it to grow from $5.2 billion to $6.8 billion in the seventh year. Again, only in this place when you spend so much more do people call it a cut. But that disease is spreading around the country. The student loan program, the one that we were criticized the most for under our plan last year grew from $24 billion to $36 billion, an increase of 50 percent. Now, if the program is growing from $24 billion to $36 billion, how could people call it a cut? Because the plan was to grow ultimately to about $40 billion? Is that the reason you can say that when you spend $24 billion to $36 billion it is a cut? What we have to do in this country is slow the growth in spending. Now, we were able to do that by a simple effort. Students receive a grace period from when they graduate to when they get their first job 6 months later, and that grace period, the taxpayers pay the interest on their debt. We suggested that the students, once they had their job 6 months later, would pay the interest during that 6-month period. For the average loan, it amounted to $9 more a month amortized over their loan. So we were saying to the students that we would allow them to get the same grants they got in the past, up to $49,000. We were saying, they could still get those loans, they would still quality, but they would pay the interest on that part that accrues from when they graduate to that 6-month grace period. It is $9 more a month, which is the cost of a pizza or the cost of a movie theater and a Coke. I have no problem telling our young people that they can pay that cost when, in fact, it only amounts to $9 a month. Now, why would we want to do this? Why would we want Medicaid to grow from $89 billion to $127 million, Medicare from $178 billion to $209 billions? Hardly a cut. Medicaid growing from $89 billion to $127 billion, Medicare from $178 billion to $289 billion, the student loan program from $24 billion to $36 billion, the school lunch program from $5.2 billion to $6.8 billion, the earned income tax credit from $19 billion to $25 billion. Not a cut, but a slowing of the growth of those programs. Why would we want to do it? Because in the last 22 years our national debt has grown 10 times. It has grown 10 times in 22 years. It has grown from about $480 billion to $5.1 trillion, $5,100 billion, a 10- fold increase. Not a doubling, not a tripling, but a 10-fold increase in the national debt. On a per-person share in current dollars, it grew from $1,800 to $18,000. But even if we do it in constant dollars, it was grown. In 1945, $1,700 per individual to $18,000 today per individual. The Federal debt in today's dollars was only $2,462 billion, now it is $5,100 billion. So it is 50 percent larger, even in today's dollars. Now, as we look at this issue, we have to say, how can it be twice as much now as then? And people said, well, it did not really matter, because it was like that after World War II and it did not really affect us. Let us take what we have right now in today's budget. In today's spending, from 1991 to 1996, we spent $8.7 trillion. From 1991 to 1996, we spent $8.7 trillion. In the next 6 years, we are looking to spend $10.4 trillion. Hardly a cut. An increase in total spending of 20 percent over the last 6 years to the next 6 years. The student loan program under our plan this year will grow 42 percent. It will grow from $26 billion to $37 billion, a 42-percent increase in the student loan program. The earned income tax credit will grow 43 percent. In the last 6 years we spent $109 billion, and in the next 6 years we will spend $155 billion over the next 6 years. Only in Washington when you spend so much more do people call it a cut. Welfare spending. Over the last 6 years, it was $441 billion. In the next 6 years, we will spend $575 billion. Under our plan, we will spend 30 percent more in the next 6 years than we did over the last 6 years. Medicaid spending over the last 6 years was $463 billion. In the next 6 years, it will grow to $731 billion. We will spend in the next 6 years $731 billion. In the last 6 years, we spend $463 billion, hardly a cut in spending, a significant increase of 58 percent. Medicaid growth went from $463 billion to $731 billion. The President is proposing that we spend $749 billion, an increase or difference of $18 billion over a 6-year period. So the President is criticizing the increased spending that this Congress will do, when in actual fact his numbers are almost identical, an $18 billion differences over a period of 6 years, which gets us to what we are going to find out next year. Medicare is divided into two parts, Medicare part A and Medicare part B. Medicare part A is the money we pay in taxes to the trust fund that pays for all our hospital services. That is money that individuals who are working today put into a fund, the Medicare part A trust fund, and that fund should be growing. But we learned that it is starting to actually have a decrease in the amount of money going into the fund. Medicare is going bankrupt, and the trust fund we were told 2 years ago will become bankrupt in the year 2002, we are learning now that it will go bankrupt not in the year 2002 but possibly in the year 2000. What are we doing in spending on Medicare? In the last 6 years we spent $920 billion. In the next 6 years we intend to spend $1,479 billion. We intend to spend 61 percent more on Medicare in the next 6 years as opposed to what we spent in the last 6 years. On a per person basis, Medicare will grow from $5,200, which is what it is in 1996 per beneficiary, to $7,000 in the sixth year, the 2002. That is a 35-percent increase per beneficiary. We are going to spend 61 percent more in terms of Medicare dollars in the next 6 years as opposed to the last 6 years. But in terms of a per person expenditure, we are going to spend 35 percent more, hardly a cut when you go from $5,200 to $7,000. Now we know that Medicare part A is going bankrupt in the year 2000. We know that we have to do something to save that fund from bankruptcy, and so we came forward with a plan last year which was vetoed by the President. In fact, our plan last year would have saved the trust fund until the year 2010, whereas now it is going to go bankrupt in the year 2000. That means that all the money that goes in by the year 2000 will go out, and will simply go out to beneficiaries with no money in the fund and not enough for all the bills that we have to pay. This to me summarizes the challenge that we have and the fact that our plan made so much sense that it is hard for me to understand why the President vetoed it. Our Medicare plan saved Medicare from bankruptcy. It increased spending from $5,200 to $7,000, and it did it without an increase in the premium, without an increase in copayments, without an increase in the deductibles. In addition, we gave Americans choice. For the first time we allowed Americans to have the same opportunity that I have as a Federal employee, not as a Member of Congress but as a Federal employee. I have the opportunity to choose a lot of different health care plans. We devised a plan that allowed beneficiaries, only if they wanted to, to go and choose their own health care. They could stay in the traditional fee-for-service health care plan, or they could choose to leave that traditional fee-for-service that was devised in the 1960's and move from that plan into an HMO or other private health care plan. The only way those other health care plans could offer their service is if they offered better than the fee-for-service. They had to provide some kind of eye care, dental care, a rebate in copayment or a rebate in the deductible. Maybe some private carriers, like they are doing in some States, would pay part or all of the MediGap, which is the 20 percent that seniors pay above and beyond what Medicare pays. Medicare pays the 80 percent and seniors pay the 20 percent unless they buy a MediGap program. Private health care plans want to get into the Medicare system because there is so much money, so much waste in which to realize savings that they could actually save money and provide a better program for seniors. So a senior under our plan does not have to pay an increase in copayment, does not have to pay an increase in the deductible, does not have to pay an increase in the premium, that will remain at 25 percent of program cost, and yet now they can get choice. They can get choice and a private health care plan that will offer them more than the traditional Medicare plan will offer. It will offer eye care, dental care, it will offer rebate in copayment or deductible, or maybe an elimination of premium or maybe part of MediGap. So why was it vetoed? Well, the reason it was vetoed is the President said we were cutting Medicare because we saved over $220 billion by our plan last year, and this plan this year saves about $158 billion. It still grows significantly. From now until the sixth year, it still grows significantly, yet we are able to have savings. We are able to have savings because we allow the private sector to come in and offer programs, and we are able to make savings because they realize savings as well. So this Congress which was elected in 1994, we came in recognizing that the national debt had increased 10 times in simply 22 years. We realized that Medicare was just simply growing and growing and growing, and Medicaid was growing and growing and growing, and the student loan programs were growing and growing and growing, and we had to find a way to slow their growth so that the taxpayers would not have to keep paying more and more of their income in taxes. Mr. Rabin said, before he died, the former prime minister of Israel, he said the politicians are elected by adults to represent the children, and that is what we are trying to do. Because if we fail to get a handle on the growth in Government spending, we are going to find that anywhere from 60 to 80 percent of all the income we make as Americans will go to Federal, State and local taxes if that trend lines continues. So we are trying to slow the growth in spending, still allow it to grow but not grow as quickly, for the good of our children. Our plan will help Americans earn more so that they can keep more and so that they can do more. Our plan also tries to reduce the overall growth in taxes so that ultimately we can return more to the American people, and so that we can downsize the size of Government and have it move from the Federal Government to State and local governments. I notice my colleague is trying to rescue me from my dialogue here.

Mr. SHAYS. I yield to the gentleman from Hawaii.

Mr. SHAYS. Mr. Speaker, I appreciate having this opportunity to speak at this special order. I thank you for presiding. Mr. Speaker, I appreciate also the opportunity to listen to the sincere comments of my colleague from Hawaii. Many of his points I agree with. There is area to find common ground, but there also, obviously, are major disagreements. I think sometimes people look at the debate we have on the floor of the House and it looks like a food fight in a high school cafeteria, but there are significant differences that I think my colleague would agree separate us, and then there are also things that bind us together. Obviously, we care deeply about the future of this country.

Mr. SHAYS

Mr. SHAYS. I thank the gentleman for yielding time. Mr. Speaker, I just want to correct the facts stated on the other side. They are simply not accurate when they say that we will charge seniors more. The fact is on Medicare, we are going to have spending go up from $196 to $284 billion. That is a 45-percent increase. On a per-person basis, it is going to go up to 34 percent, from $5,200 to $7,000. I really believe in our proposal. The bottom line is very simple. We do not increase copayments, we do not increase the deductible, we do not increase the premium, and we say that under the fee-for-service system, you cannot have balance billing. Furthermore, we allow individuals to have choice. If people do not want the traditional fee-for-service, they can have choice, or a whole host of different programs. Under those different programs, they may get eye care, they may get dental care, they may have a rebate in their copayment, their deductible, they may even have their MediGap paid for. The bottom line is when they are in their fee-for-service system, they get what they get now. If they get into private care and choose to, if they get into it and they do not like the plan, they can leave. They have 24 months, each and every month, to leave. So we give them choice, we do not increase copayment, the deductible or the premium. It stays the same. It seems to me like a very good plan. Plus we add 45 percent more to the spending on Medicare, from $196 to $284 billion. We do the same thing with Medicaid. That goes up 46 percent, from $95 to $140 billion. That is a significant increase in spending. Only in this place when you spend more is it called a cut.

Mr. SHAYS

Mr. SHAYS. Mr. Speaker, I thank my colleagues for yielding this time to me. In Psalms we read, ``I would have fainted unless I believed to see the goodness of the Lord in the land of the living.'' This is an excellent debate, and we are having the opportunity on both sides of the aisle and within both parties to debate this issue and speak from our hearts. From my heart I believe in the Riggs-Quinn-English-Martini amendment to increase the minimum wage 50 cents in July and again 40 cents a year later. In my heart I believe that we have got to have a minimum base for a worker so they are not exploited. In my heart I believe this is the right thing to do. Now, the debate we have, this is historic because two-thirds of Congress wants to increase the minimum wage, but two-thirds of the majority party does not. What a credit to the majority party that they have brought out a fair bill, and I just have nothing but admiration from my leadership on both sides of the aisle that they have offered this kind of debate. Now, there is a tradeoff. My colleague from California is right. When we increase the minimum wage, we affect jobs and we affect prices. The issue is how significant is that increase? If we did what the gentleman from New Jersey [Mr. Saxton] did and raised it $20, of course we would increase prices and cause large unemployment. But when we do what we did in 1989 and raise the minimum wage 45 cents, and again a year later 45 cents, unemployment went down, maybe it would have gone down even more, prices were basically stabilized. It was a modest increase. We are at an all-time low in 40 years. The minimum wage in 1968, if it had been indexed for inflation, would be $7.08 today. We are not asking it to be $7.08. We are asking that over a period of 18 months it will be increased by 90 cents. I just have to say that I am proud of my Republicans, I appreciate the Democrats for pushing this issue. The bottom line is we have the best of both worlds. We have an economic engine, we have the Small Business Protection Act, we have $7.5 billion in this bill for tax writeoffs for small business, for expensing, for targeted tax credits, to hire the least employable, the ones who are on welfare. This is a better bill than just standing alone on the minimum wage. I salute both sides in this debate. Let us vote this out. Let us increase the minimum wage.

Mr. SHAYS. Mr. Speaker, before yielding myself time, I would like to ask a parliamentary inquiry of how the speaker intends to divide the question. It is my understanding that there are four parts to this bill and there will be two votes.

Mr. SHAYS. I thank the Speaker for answering my parliamentary inquiry. Mr. Speaker, I yield myself such time as I may consume. The proponents of the minimum wage on this side of the aisle have asked for time and have graciously received it from my colleague, and I thank him very much for giving us this time to express general support for sections a, b and c of this amendment, but in opposition to part d, which is the $500,000 exemption for small businesses. Our concern, very plainly put, is we think it is too broad. We believe that there are basically about 4 million people receiving the minimum wage today and of that number about half are affected by the $500,000 or less. We believe that, ultimately, that when we increase the minimum wage, if we are successful, to the number of $5.15, that we will have another 16 million who will be positively affected in addition to the 4 million. But over half, over half of those individuals, over time, will be exempted from the minimum wage. So we as proponents are encouraging an increase of the minimum wage at the same time we are opening a very large door in which too many people, regretfully, will be exempt from the minimum wage and the 40- hour workweek with time-and-a-half. So, Mr. Speaker, I respectfully request that those Members who had voted for, one, to consider the minimum wage, when they voted to allow the Riggs amendment to come to the floor, and those 77 who voted for the Riggs amendment, will be willing to vote potentially ``yes'' on the first vote, a, b and c, but a definite strong ``no'' on part d, the $500,000 exemption. Mr. Speaker, I reserve the balance of my time.

Mr. SHAYS. Mr. Speaker, I yield 2 minutes to the gentleman from New York [Mr. Quinn], primary proponent of increasing the minimum wage.

Mr. SHAYS. Mr. Speaker, I yield 1 minute to the gentleman from Maryland [Mr. Hoyer].

Mr. SHAYS. Mr. Speaker, I yield 2 minutes to the gentleman from Massachusetts [Mr. Torkildsen].

Mr. SHAYS. Mr. Speaker, I yield 1\1/2\ minutes to my colleague, the gentleman from New York [Mr. Boehlert]. (Mr. BOEHLERT asked and was given permission to revise and extend his remarks.)

Mr. SHAYS. Mr. Speaker, I yield 1\1/4\ minutes to the gentlewoman from New Jersey [Mrs. Roukema]. (Mrs. ROUKEMA asked and was given permission to revise and extend her remarks.)

Mr. SHAYS. Mr. Speaker, I yield 2 minutes to the gentleman from California [Mr. Riggs], one of the primary sponsors of the minimum wage who introduced the bill along with the gentleman from New York [Mr. Quinn], and the gentleman from New Jersey [Mr. Martini], and the gentleman from Pennsylvania [Mr. English].

Mr. SHAYS. Mr. Speaker, I encourage my colleagues to vote ``yes'' and to allow the Riggs amendment to be considered. The Riggs amendment will allow us to vote to increase the minimum wage. Anyone who supports increasing the minimum wage, must vote ``yes'' on this motion. The bottom line is we are encouraging a ``yes'' vote to increase the minimum wage. We need a ``yes'' vote on this motion. The bottom line is we are encouraging a ``yes'' vote to increase the minimum wage. We need a ``yes'' vote on this motion.

Mr. SHAYS. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, I first want to thank my colleague, the gentleman from Missouri [Mr. Clay], for yielding me 14 minutes of his 30 minutes. It was a very gracious effort at bipartisanship which I want to thank him for. I also want to thank the leadership of my party for allowing us to have very honest debates on all these issues, and to have the opportunity to debate our feelings as strongly as we feel. I believe with all my heart and soul in increasing the minimum wage, and while I have little concern about the Goodling amendment, the first part, his three positions on A, B, and C, I urge a strong no vote on part D, the $500,000 exemption. Mr. Speaker, I just would like to point out to my colleagues, before 1989, businesses that were retail services that gross $362,000 or less were excepted from the minimum wage. All other businesses had to have a business of $250,000 or less, and they did not allow for interstate commerce. When I voted for the increase in the minimum wage, I did not vote to except the interstate business. I voted for the minimum wage, to increase it to $500,000, and still leave in the interstate nonexemption. So I would contend this is not an attempt to fix, it simply widens it too large. For those 76 who voted to allow the Riggs amendment to be debated, the 77 who voted for the Riggs amendment, the Quinn amendment, the Martini amendment, the English amendment to increase the minimum wage, voting on Goodling II in my judgment is a killer amendment. We do not have the votes to send it to the Senate if that amendment passes. I urge my colleagues to vote no on Goodling II, and I urge my colleagues to stay consistent with their vote to increase the minimum wage. Mr. Speaker, I yield back the balance of my time.