Christopher Shays

Mr. SHAYS

Mr. SHAYS. We had to compromise.

Mr. SHAYS. And following your very model of listening, we would be listening to him as well as to how he would do it, and then we could, I would think, hope to marry that vision that we have, but clearly I think I would be saying to the President of the United States, ``Mr. President, we need to balance the budget within 7 years, and you need to understand our determination on that issue. Over 300 Members of Congress, Republicans and Democrats, felt that balancing the budget within that time was the outer limit. Now what goes in that budget can be a combination of our vision and your vision. How we do it is clearly open for debate. We think there also should be a tax cut. You think there should be a tax cut. We should determine how that should happen. But again that's a shared responsibility.'' So we are really just saying to him, ``Give us a balanced budget within 7 years.'' Now what we could do when he did that is to say we have given you our 7-year budget, now you give us your 7-year budget. Let us see where the differences are, let us see what the similarities are, but by the President refusing to even agree to a 7-year budget, he has been able to basically stand on the sideline, almost as someone just watching this, and not weighing in. Ultimately he is the President, he has to weigh in.

Mr. SHAYS. I was thinking, if the gentleman will yield, just in terms of determination. You know, I have had some people say, ``What's so magical about a 7-year budget,'' and, as I pointed out, nothing is magical about it if we can do it in 4 or 5 years. If I were running for the President of the United States, I would want to tell the American people I would do it under my watch and not under somebody else's watch. So, nothing magical about 7 years. We could do it sooner. But I was thinking, if I asked you, Mr. Hoekstra, and if the President of the United States said to you, ``How do I get out of this mess?'' I mean you all are insisting on a balanced budget amendment. I do not want to--I do not want to do what you are doing. How would you reach out to the President and say to him you need to be a part of this, and what are we asking the President to do?

Mr. SHAYS. Like every State in this country has to balance its budget, and obviously during times of emergencies, then during times of emergencies we can have a deficit budget, but only in emergencies.

Mr. SHAYS. Mr. Speaker, half of our budget are entitlements: Social Security, Medicare, Medicaid, and a whole host of other entitlements, food stamps, welfare. You fit the title, you get the benefit. That is half of our budget. I do not get to vote on it. You do not get to vote on it. It does not come out of the appropriations committee. It is on automatic pilot. Basically we have another 15 percent of our budget that is on automatic pilot, too. It is mandatory spending. It is interest on the national debt. I have been here 8 years now. I voted on one-third of the budget. The reason why Gramm-Rudman failed, one of the reasons that process that was intended to control the growth of spending because it only looked at what we call discretionary spending, the spending that funds the executive branch, the legislative branch, and the judicial branch, all the different departments and agencies in the executive branch, all the grants there, then foreign aid and then defense spending. That is what it basically looks at. And we have been trying to control the growth of spending by just focusing on domestic spending, when we know and Mr. Panetta, when he was a Member of Congress, the chairman of the Committee on the Budget, he said, we are ultimately not going to control the growth of spending until we control the growth of entitlements. This is the first Congress that has taken on that task. It is leading me to the point, my colleague may have wondered where I was headed here. He made the point that we have this incredible opportunity to balance the budget in 7 years. But even when we do it, we still have to come to grips with the baby boomers that start entering Social Security in the year 2010. And by the year 2030, you have 65- to 85-year-old baby boomers in the system, totally utilizing all the funds. And the system quickly becomes bankrupt. So if we cannot come to grips with getting, slowing the growth of entitlements now, if we cannot do that now, we are doomed in the future. That is the bottom line. So we have to begin to slow the growth of entitlements and then ultimately we will have to revisit this issue on a bipartisan basis. I will tell you this, I do not think it is going to be possible for one party to take that issue on like we are trying to take this issue on now. When the experts came in last week and they talked about the advantages in how getting to a balanced budget is going to free us up, I mean it is going to drive to a stronger economy. But as we have talked about reforms that need to take place here in Washington, about just about how we budget, they said, you know, just think, when you actually lay out a plan, and you start going down the path of a balanced budget, think of how it will free us up to make the reforms that we need to make. If we actually--what is one of the stronger arguments against a balanced budget amendment? Well, nobody has laid out a path. Well, we have actually, we are going down the path. Maybe we can find that one more Senator, or we can find that one more person in the other body, that will vote for a balanced budget amendment so that balancing the budget does not become a nice to every year, it becomes a have to, it becomes the law of the land that we will not fall into this trap again.

Mr. SHAYS. It is. And it has not been easy. But the bottom line is, we are doing our best. I am really proud of the job we have been doing.

Mr. SHAYS. Mr. Speaker, I think the key point is that we believe that at the very latest we should balance the budget in 7 years. Someone said what is so magical about 7 years. Nothing except for the fact that over 300 Members of this House, Republicans and Democrats, have voted for a balanced budget amendment to be balanced in 7 years. So over 300 or more than three-quarters, almost three-quarters of the Members here voted for a 7-year balanced budget. Candidly, nothing magical about a 7-year budget. I think it should be 4 or 5. But at the very least, within 7. I think the gentleman's point that the President could make it a better budget, we are not saying it has to be our 7-year budget, ``our'' being Republican. It can be ``our'' being Democrat and Republican, a 7-year budget.

Mr. SHAYS. Mr. Speaker, I yield back and I hope, Mr. Speaker, I have the opportunity to be at the dais and have you have a special order. It is a quarter of 12. You have been here a very long time and we thank you from the bottom of our heart.

Mr. SHAYS. Mr. Speaker, I thank my colleague for yielding, and just to say to him that about a year and a half ago, actually a little longer, I went to my then-minority whip, Newt Gingrich and said to him, ``The problem is not term limits, because if it is term limits, then you are the problem. The problem is,'' I said, ``is 40 years of one- party control. Forty years of one-party control is wrong, whether it be Republican or Democrat.'' Mr. Speaker, the next thing I knew was that I was being asked to participate in a group that the gentleman from Michigan [Mr. Hoekstra] heads. That is one of the things that I think people do not realize about the Speaker, is that if you go to him with a suggestion or concern, and the next thing he has empowered you and you are now a part of the process. He put me on a group of people that you headed, Congressman Hoekstra, and it was basically an effort of how to decide how do we end 40 years of one-party control. This was the group that ultimately worked on the Contract With America, and the Capitol steps event. Why was there a Capitol steps event? We wanted to catch the imagination of the American people and let them know that, if they were to elect us, that it would not be business as usual. It would be like in Great Britain or in Canada when there is a change of government. Mr. Speaker, we said, ``Elect us and this is what we are going to do.'' We had a signed Contract With America and we invited all the challengers to participate. I remember the incredible outcry that people had at first. ``How can you sign a Contract With America?'' And I said, ``Well, have you read what is in it?'' They said, ``No.'' I said, ``Why don't you look at it and then tell me what you think.'' The press was critical, and I remember the press being critical before the election. I said, ``What do you think the majority party's Contract With America, the 10 things, the 8 things they want to do on opening day, the 10 things they want to do in the first 100 days is?'' Is not it remarkable that this Contract With America does not criticize President Clinton, it does not criticize Democrats? It is a positive plan for America. So one of the things that I want to do, since I have not had a special order with the gentleman from Michigan, is I wanted to thank him for his leadership in helping to devise this Contract With America that gave us a real vision and a strategy for accomplishing change. The gentleman talked about a ``listen, learn, help, and lead model.'' The gentleman has talked in a sense about our vision strategies and our projects and our tactics, and all of it was positive. When people said to me, ``Well, you had this Contract With America, and admittedly, it helped you get elected, but you will not implement it.'' We implemented those eight reforms on opening day. Then in the first 100 days, we implemented 10 major reforms. I look at those 10 major reforms, and one of them was a balanced budget amendment. People said, ``You voted for a balanced budget amendment but you would not be so stupid as to vote to balance the budget.'' Whether they call it stupid or not, I guess they meant it from the political context; that it is heavy lifting and we are taking on a lot of special interests. But my pride is that we have this Contract With America which is a positive plan for this country. We voted for a balanced budget amendment, but we did not stop there. We voted to balance the budget. If the gentleman would just let me continue just a little longer, we are slowing the growth in spending as the gentleman has pointed out. In some cases we are cutting programs, particularly in discretionary programs, but in a lot of cases we are merely slowing the growth of programs. The earned income tax credit that helps those who are the poorest, they end up not paying taxes. They are the working poor, and they actually get something in return. People are saying on the other side of the aisle that we are cutting the earned income tax credit. Today it is $19.8 billion. In the seventh year it grows to $27.5 billion. That is a significant increase. The School Lunch Program. They said we were cutting the School Lunch Program. It is $6.3 billion today. In 5 years it will be $7.8 billion. The Student Loan Program. They are saying we are cutting the Student Loan Program. All we are asking is that students pay interest on a period after graduation for the next 6 months, when the Federal Government has paid the interest. Now we are saying the students will pay the interest and they can defer it and amortize it over the length of the program. We are going to spend $25.5 billion today and it will grow, by 2002, to $36 billion; $36 billion from $24 billion. It is a 50-percent increase. Only in this place when we spend 50 percent more do people call it a cut. Then I look at Medicaid and Medicare. Medicaid, we are going to spend $329 billion of additional dollars in the next 7 years that we did not spend in the last 7. We are going to go from $89 to $124 billion. In Medicare, which is an incredible program that we have devised to give people choice, it is going to grow from $178 billion today to $273 billion in 7 years. We are going to spend $674 billion more in the next 7 years than we did in the last 7. Again, I say only in this place when we spend $674 billion more do people call it a cut. On a per capita basis, they say more people are getting into the program. But we are going on a per capita basis from $4,800 per beneficiary, per elderly, to $6,700 per beneficiary, per elderly. That is a 47-percent increase per beneficiary. That is an increase any way we look at it. Mr Speaker, I am so proud of what this Republican majority is doing. And I speak to my constituents in my district who are Republican, Democrat, unaffiliated, who do not vote at all. There are things that my party can be criticized for, but one thing it cannot be criticized for is that it cannot be criticized for not doing some heavy lifting and not trying to save this country from bankruptcy, because we are trying to save Medicare from bankruptcy. We are ultimately trying to save this country from bankruptcy. Mr. Speaker, we want to stop mortgaging the farm so that our kids have such a great debt that they cannot pay it back. We want to begin to say no more debt, no more annual deficits which at the end of the year add to the national debt. In the seventh year, our deficits disappear. They become zero. Our national debt does not keep going up and we have done it by allowing spending to go up. We simply want to slow the growth in that spending. And in the process, we allow for this social corporate welfare state to be transformed into what is truly an opportunity society. There is going to be much more opportunity. We can go on. What is the benefit of getting this deficit down? I mean the gentleman from Michigan [[Page H 12344]] has pointed out obviously interest rates go down. Mortgages go down. Car loans go down. Student loan costs go down. Even though we ask students pay a little more interest for 6 months, they are going to pay a lot less interest during the entire period of their loan. Businesses will start to invest more because money will be cheaper. When they invest more, they are going to create more jobs. We borrow 42 percent of the money that is available for investment. We, the Federal Government, borrow 42 percent of all savings to fund the national debt. That has to end. Mr. Speaker, I notice we are joined by my colleague from Maine. I would like to welcome him and yield back time to the gentleman from Michigan if he would like to go on, and then I would love, Mr. Longley, if you would like to enter in. He looks like he is ready to enter in.

Mr. SHAYS. Not to pay back the debt, but just to pay the interest on the national debt.

Mr. SHAYS. Mr. Speaker, I know the time is getting late. You have been very gracious for being here for a long time, and I hope I can return the favor to the gentleman. Mr. Speaker, I have been in elective office for 21 years, 13 years in the State House in Connecticut, and now 8 years in Congress. When I was in the State House, I was always amazed that Congress could spend more money than it raised in revenues and deficit spend. I knew you did that when times were difficult and in times of war, but I could never understand how we could do that in times of peace. For the first basically 180 years of our history, our national debt was only $375 billion; in 1975, $375 billion. That funded the Spanish-American War, World War I, World War II, the Korean war, the Vietnam war, these real crises in our country. After the Vietnam war, our deficit was $375 billion. Since 1975, our deficits have grown to 4,900 billion. That is a thirteen-fold increase in our national debt, when times were good. I vowed that when I came to Congress, I would be on that part of the equation that would look to get our financial house in order. This is our moment. Our moment is right now, to get our financial house in order, balance our budget. That is the first effort. The second effort is to save our trust funds, particularly Medicare, which is going insolvent next year, and becomes bankrupt in 7 short years. The Medicare fund that goes bankrupt funds all of hospital costs. Our third effort is to transform our social and corporate welfare state into an opportunity society. That is a conservative word. It is a very important word. We are trying to give opportunity to people. Instead of being a caretaking government, we are looking to be a caring government. Instead of people giving them the food, we are looking to help them grow the seeds, and be able to self-sufficient. I look at our society and I see too many 12-year-olds having babies, I see 14-year-olds selling drugs, I see 15-year-olds killing each other, I see 18-year-olds who cannot read their diplomas, I see 24- year-olds who have never had a job, not because jobs do not exist, but because they simply do not feel those jobs are for them, or maybe do not have the qualifications or feel they do not have the qualifications. I see 30-year grandparents. [[Page H 12342]] In my political career, I have seen now three generations of welfare recipients. That has to end. We have an opportunity to end it in the next 2 years. I am joined by my colleague, the gentleman from Michigan, and I am really grateful that he is here. Before yielding to him, I would just like to enter into this whole debate of whether what we are doing is cutting spending, slowing the growth in spending, or simply not coming to grips at all with spending. During the last 7 years, we spent about $9 trillion. In the next 7 years, we expect to spend $12 trillion; in other words, $3 trillion more in the next 7 years, a significant sum. What we are trying not to do is spend over $13 trillion. We are looking to not have the debt go up $2 trillion more. In this 7-year budget plan that we have, it still would go up $1 trillion. That is embarrassing in one way, but it certainly should give an indication that we are not being radical. We are spending more, the national debt goes up $1 trillion, but it will not go up $2 trillion if we have our way. In the seventh year, we have slowed the growth of spending to the point where it intersects with revenue, and in the seventh year, we will have had a balanced budget. What we are asking the President of the United States to do is join in that effort to balance the budget in 7 years. Obviously, we would like him to agree to our balanced budget of 7 years, but we are not requiring that to happen. He has his priorities, I am sure, and we have ours. We would have to sort that out. But the one thing we should be able to agree on on a common basis is getting our budget balanced in 7 years. To that end, that is what we are during. We are working to do that. It makes it a lot easier if the President weighs in and helps us in that effort, but if he does not, we are still going to keep on in this effort. Someone said to me, and then I will yield to my colleague, just about polls they said, ``The President seems to be catching the imagination of the American people, that they have more faith in him right now than Congress. You are not looking too good in Congress with the polls.'' I thought, ``I don't know entirely how valid those polls are, but the one thing I know is that if President Lincoln had taken a poll during the height of his effort to keep our Union together, and he had decided based on the polls, he would have simply ended the war and not confronted the South.'' We would not be one nation under God, indivisible, we would have been, if President Lincoln had listened to polls and reacted to them, two nations, a North and a South. For me, this is as epic a struggle. I feel for our Federal employees who are kind of caught in the middle of this. Ultimately we know we are going to downsize Government and they will be affected. I feel for them not knowing if they should come to work tomorrow. But it is much bigger than our Federal employees. It is not a matter of getting our Federal employees back to work, it is a matter to getting an agreement with the White House that gets us on a glide path to a balanced budget. With that, Mr. Speaker, I yield to the gentleman from Michigan [Mr. Hoekstra], and thank my colleague for participating in this special order.

Mr. SHAYS

Mr. SHAYS. I would just love to weigh in, if I could. I know we are running out of time, but the bottom line is my heart goes out to the Federal employees about whether there is a shutdown, but this is far bigger than Federal employees. This is an issue of whether, once and for all, we are going to get our financial house in order, and balance our budget, save our trust funds and change and transform this social and corporate welfare state into an opportunity society. That is what this battle is about.

Mr. SHAYS. Well, if the gentleman will yield, I just would point out that the premium that we pay now is $46.10, and the President has decided that he is going to lower the premium to $43.70 per month, and then, after the election, it goes up to $48, to $53, to $59, to $67, to $74, to $82, and the 7th year the President's premiums go to $82, and ours are at $87, a difference of $4.80, and if I could just say, when we get to this issue of what is a cut, the administration says we are cutting the earned income tax credit; that is going from $19 billion to $27 billion. They say we are cutting the School Lunch Program, but that is going up from $6.3 billion to $7.8 billion. They say we are cutting the student loan, and that is going from $24 billion to $36 billion, a 50-percent increase in student loans. They say we are cutting Medicare and Medicaid. It has gone from $89 billion to $124 billion. They say we are cutting Medicare, and it is going from $178 billion to $273 billion. In every instance there is a significant increase.

Mr. SHAYS

Mr. SHAYS. If they stay in the current system they cannot be removed. In other words, they can only be changed into private care if they proactively ask to. It is not like the telephone, where you find yourself switched. You can stay right where you are.

Mr. SHAYS. If I can just qualify that and make the point that no student is going to be allowed a student loan. They are going to get their student loans. What we do with this increased money is allow for more student loans. So we are going to go from about [[Page H 11751]] 6,700,000 in the 5th year, which is that $33 billion. There are going to be 8,400 students getting student loans. So more students are going to get student loans, and that is why this number goes up. There is going to be a lot more money in this system.

Mr. SHAYS. Significantly less more money.

Mr. SHAYS. I would just like to elaborate on this. I mean the significant point is that in overall spending of the Government and the taxpayer we are going to spend $12.1 trillion in the next 7 years. We could, if we did nothing, like President Clinton basically advocated in his February budget and his budget of 2 years ago, we would go to $13.3 trillion. What we are trying to do is slow the growth so ultimately spending will intersect with revenue in that 7th year, and I just make the point that I want to elaborate a little bit about we made some cuts, and we are proud of some of the cuts that we have made. We slowed the growth in other programs, and our disagreement with our colleagues on the other side of the aisle is sometimes they call a cut a cut when the spending is going to go up significantly, and that is where we disagree with them. It is true we have a cut in foreign aid. We cut foreign aid. We are going to spend less dollars next year than we spend this year. That is a cut. I am willing to take the heat for that, but we did not cut EITC, we did not cut Medicare, we did not cut Medicaid, we did not cut the School Lunch Program, we did not cut the Student Loan Program and so on. A lot of the entitlements will still be allowed to grow.

Mr. SHAYS. One of the points that I love about what we are doing with the Commerce Department, we are going to take all the trade functions and put them under one category because we do believe that a significant part of our economic growth is going to be the products that we export overseas. So we are going to consolidate our Trade Representative and all the trade functions within the Commerce Department under the Trade Representative. Makes a lot more sense, it seems to me, to do it that way.

Mr. SHAYS. Will the gentleman slow down a little bit? This is really important, and we have time to really make sure that we are making this point clear.

Mr. SHAYS. Yes, there is plenty to talk about, but this is very important.

Mr. SHAYS. This is the President's own Cabinet that said this in addition to the head of the Social Security trust fund, basically saying that Medicare becomes insolvent next year, and then what happens?

Mr. SHAYS. I wonder if I could just point out what those numbers are in the trust fund in 1995 there is $136 billion. It only drops a billion next year to 135, but in 1997, it goes to 129, then it goes to 117, then it goes to 98. In the year 2000, it goes to 72; in the year 2001 it drops 37, and then in the year 2002 it will have a minus 7 billion. That is the fund that pays for all the hospital care. And then the only way that if we do not save this fund from bankruptcy the only way hospital care will be taken care of is, as the payroll tax brings in money it immediately is grabbed out, but there is not enough to pay for all the costs of the Medicare part A trust fund needs of hospital care.

Mr. SHAYS. It is really amazing when we think about it. We have taken a program that will have $4,800 per beneficiary and in the 7th year they will have $6,700 per beneficiary, so that takes into consideration all the new people in the system, more than we need even to deal with the basic inflation. Yet people, and you have it right at the bottom of your chart, where is the cut? Where is the cut? Where is the cut?

Mr. SHAYS. Yes, it sure would.

Mr. SHAYS. Mr. Speaker, does the gentleman have another chart on Medicare? I would love to just make the point by saying we save money in the program by doing a host of things, but one of the things we do, we provide that health care fraud will now be a Federal offense, and not just Medicare frauds, but Medicaid fraud and other not private health care fraud will be a Federal offense, and we are going to go after the extraordinary waste in the system. Do you know that in Medicare, I would just make the point, when we look at what HCFA, who runs this program, is able to do, believe it or not, HCFA cannot tell you what hospitals were given what money a month after the fact, 2 months after the fact. They cannot tell you why the hospitals were given certain sums of money. Home Depot, on the other hand, when they open their store at 6 o'clock in the morning, at 9 o'clock in the morning they can tell you what products sold in their store from 6 to 8:59. They have already started to reorder their inventory. There is extraordinary waste, fraud, and abuse in this system. I have men tell me that they have been sent bills for giving birth. I have women tell me that they have been charged for operating that are not humanly possible on a woman. We have had story after story of how people can abuse this system, and we are, for the first time, going to be in a very focused way getting at the waste, fraud, and abuse in this system. That is where we get some of the savings. We get some of the savings by the fact that people will opt into private care, which is far more efficient, and will provide a better service for a lower cost. So the actual beneficiary, though, pays no more in copayment, no more in deduction. The premium stays the same, unless you are very affluent. You can stay in your fee-for-service system, and if you want, and only if you want, you can leave. If you leave and you do not like it, for the first 2 years you can go back every month into your old fee-for- service system. Only in the 3d year are you locked into that program for a whole year.