Christopher Shays

Mr. SHAYS

Mr. SHAYS. That was a nice treat, and I thank the gentleman from Michigan and thank him for his work in trying to get this story out. The bottom line is what we want to do is slow the growth in Government spending and get our financial house in order so future generations will not have so much debt. In particular, what I have singled out as a focus is the amount of money we spend on Medicare and Medicaid. You cannot see it very easily, but it amounts to about 17 percent of our entire Federal budget. It is equal to all domestic spending. Medicare and Medicaid are equal to everything we spend in the legislative branch, everything we spend in the judicial branch, everything we spend in the executive branch under the President of the United States, all the various departments and agencies, all of their grants are equal to 16.7 percent or $256 billion. Medicare and Medicaid are greater than that amount. The difference is Medicare and Medicaid are growing at alarming rates and we need to find a way to slow that growth. Defense spending is equal basically to discretionary spending. But a third of the budget is what we vote on in the House. Some people say to us well, why did not Gramm-Rudman make a difference? The reason is Gramm-Rudman only focused in on the pink part of that pie, only on discretionary spending. It did not focus at all on entitlements. What we have done in defense spending is to have a basic level playing field. It is not going to go up; it is not basically going to go down. Discretionary domestic spending is going to go down, and foreign aid is going to go down. Then we come to Medicaid. Medicaid is health care for the poor. It is also health care for poor elderly as it relates to nursing care, and it is going up. Medicaid spending is going to go up by about 36 percent in the next 7 years. We are not cutting Medicaid; we are allowing it to grow. Some Members of Congress say we are cutting Medicaid and/or we are cutting Medicare. We are cutting them if you use this definition, if it costs $100 million to run a program this year and the next year to run the same program with the same level of service, not changing the program, it costs $105 million and we appropriate $103 million, in my home, in business, that is a $3 million increase. Congress, the White House, the press in Washington, and only in Washington, they call that a $2 billion cut. Medicare is going to go up by 36 percent in the next 7 years. We are going to spend $324 billion more in the next 7 years than we spent in the last 7 years. Now admittedly we are not going to allow it to grow as quickly, but the important point, when you look at this, is to recognize that Medicare is going to go up, Medicaid is going to go up in terms of what we will spend in the next 7 years by 36 percent more than the growth in the population. What is happening to Medicare? Medicare is actually having an extraordinary challenge facing us. The challenge that faces us with Medicare, and it is Medicare part A, that is Medicare that goes for hospitals, Medicare part B is what goes for health care services, Medicare part A is starting to go bankrupt next year. In other words it is going to take in less money than it spends out, but it still has money in the trust fund. Ultimately in 7 years Medicare part A goes bankrupt, it literally runs out of money. In other words, in the seventh year there will be a $7 billion deficit in the trust fund. The trust fund will have run out of money. What we are looking to do with Medicare is to save it. We are looking to improve the service. We are looking to preserve Medicare. We are looking to save it. And this is not a report done by Republicans or Democrats in Congress, this is a report given to us by the trustees of the Medicare system. It is going bankrupt unless we save it, and that is what our objective is. The way we save it is to slow the growth in Medicare, by slowing the growth in Medicare so that it does not grow at over 10 percent a year, but grows approximately 5 percent a year. If we allow Medicare to grow each year, in other words spend more, not cut, grow, and spend more, we are going to allow it to grow by 45 percent in the next 7 years. Only in Washington is a growth in spending of 45 percent called a cut, only in Washington. And unfortunately we are hearing people saying we want to cut Medicare. No, we want it to grow; we want it to grow at 45 percent. We just want to make sure when it grows it does not bankrupt the rest of the country. So it will go from $178 to $259 billion. What that means is that we want to spend $659 billion more in the next 7 years than we spent in the last 7 years. We want to spend that amount of money. What will we spend, almost $1.6 trillion as opposed to $925 billion in the past 7 years. I think the most important statistic though is the one that shows what we do per beneficiary. We want to spend $4,116 per beneficiary instead of $6,000 and have it grow to $6,361 in the seventh year. We are going to spend 45 percent more in Medicare. We are going to allow it to grow, and the increase per beneficiary is 32 percent. Only in Washington would an increase per beneficiary of 32 percent, 32.1 percent be called a cut, only in Washington. I do not know anywhere else where when you spend even more money you call it a cut. We are going to spend 45 percent more total in Medicare and 32 percent more in the next 7 years per beneficiary. Which gets me to the last point that I want to make. If we do not control the growth in Medicare and Medicaid, we are doomed. We are already to balance the budget in the next 7 years going to see foreign aid go down 5.4 percent more a year. We are already going to see domestic discretionary spending go down 1.6 percent a year, that is a cut, that is a cut any way you look at it. We are going to spend less dollars in the next year. Defense spending goes up one-half percent, and there are some, and I am one, who would like it not to be as high. The challenge we have in defense spending is we are $150 billion oversubscribed in defense. We have to find a way to reduce defense spending $150 billion in the next 7 years just to stay within this number. And how do we get oversubscribed? Because Congress and the White House kept pushing off the procurement of certain defense systems to the sixth year and we were working on 5-year budgets so the full cost of these programs never truly showed up. We are going to have a difficult time staying within this number, only because we are oversubscribed in defense. But what is happening in Social Security? It is going up 5.1 percent. What is happening in Medicare? It is going up 5.5 percent. What is happening in the Medicaid? It is going to go up 4.5 percent a year? What is happening in other elements? They are going to go up 3.9 percent. Recognize this is the growth in spending and this is half of the Federal budget. It is going to grow. Sadly, the interest payments we make are going to go up about 1 percent a year, but before we passed our budget they were going to go up 5 percent a year. So we have slowed the growth of interest payments, we have slowed the growth of defense, we are actually making real cuts in foreign aid and domestic spending. And I have to say this in conclusion about domestic spending, there are some cuts I do not want to make in domestic spending. I mean, there probably is not any Member of Congress who likes every part of our budget, but if we take the logic, ``I do not like 10 percent of the budget, I am voting against it,'' that is just going to duplicate what has happened during the last 10 years. We can always find something we do not like in the budget. What do I like in this budget? I like the fact that we are getting a handle on Government spending. I like the fact that we are slowing the growth of entitlement programs. I like the fact that we are saving Medicare from bankruptcy. I like the fact that for the first time in my 20 years in public life I got to vote for a budget that gets us balanced. [[Page H5606]] Admittedly, it is going to take us 7 years, but we are doing it, and I am proud to be part of that effort. I will just conclude by saying ultimately what we do is going to have to be worked out with the President of the United States. He has to sign this legislation. I am hopeful he will finally weigh in on trying to find ways to save Medicare. I do not mean that sarcastically. I just mean it as openly as I can, because right now there is no plan coming out of the administration. But ultimately we need to pass a budget that gets us balanced in the next 7 years. We need to do it for the people who are in this country today, and we need to do it for our children and for our children's children, and for our children's children's children. We have simply got to wake up and do it, and in the process of our plan, we are going to spend more on health care for the elderly, more on health care for the poor. We are going to spend more on some of our entitlement programs, But we are going to reduce spending in a whole host of areas. Farmers are going to feel the reductions. People in urban areas are going to feel the reductions. People in rural areas are going to feel the reductions. We are all going to be part of this effort. We are going to save this country. We are going to save this country so it can be the great Nation it has been for so long. And, Mr. Speaker, I really thank your kindness in staying. I know you needed to go. I appreciate the time you have afforded me.

Mr. SHAYS. I thank the Speaker. I know the Speaker has appointments he has to make. I appreciate his willingness to stay and be here for these special orders, and also to thank those that are working on behalf of the House so that we have this opportunity. I do not often seek the opportunity to address the House in a special order, but I do so today to talk about our Federal budget and what we as the Budget Committee have done to try to get our financial house in order. But I first want to say that as I listened to the gentleman from California [Mr. Dornan] in talking about the atrocities that took place with Americans under captivity by the Japanese during World War II, I just could not help but think how important it is that that story be told, as gruesome as it is, and that the families of those men know that we will not be silenced in making sure that the truth be told. When I think of Memorial Day and the men and women who gave their life to this great country, I know, as someone who never served in the armed forces, that when I look at the flag behind me, that the flag means a great deal to me obviously as a Member of Congress and as an American citizen. But to someone who fought in battle, the American flag means something more than we could ever imagine. soldiers, their friends, their comrades, their brothers who died in battle. They think of the people, the families they contacted to let them know about how their brother or sister or son or grandson died in battle. And when I think of Memorial Day, and when I think of how blessed we are as American citizens for their ultimate sacrifice, I also think of the families. I think of the mothers who held their sons, who never will be able to hold their sons again. I think of the fathers that went and saw their sons or their daughters playing baseball or go to a dance, or be there when their children were sad and needed a reassuring arm, and I think of what those parents have to live with. I also think of the brothers and sisters who lost their brothers or sisters and the memories that they have. I think of the precious children who were denied the opportunity to have their father or their mother, particularly their fathers in the case of World War II, come to their baseball games, come to their schools, see them get married. So as a Member of Congress, I just count my blessings every day, absolutely every day, for the opportunity I have to serve here. When I listened to the debate that was taking place and the comment made by the Speaker and the ruling made by the Speaker, I thought of an experience that happened to me a bit earlier when I brought a complaint against a chairman of a committee after he had been indicted, and I wanted to do just what these two Members had done. I wanted to share my complaint and my letter, and I was ruled out of order. I did not like it at the time, but I began to think about it and I began to realize, first, the rule that you invoked, Mr. Speaker, has existed for over 70 years. And part of the reason for that rule is that in this Chamber it is important that a Member who is being accused of something have the opportunity to be present and to defend themselves. I also realize that you did not make up a new ruling, you just enforced a ruling that was enforced on me under Democrats, a rule that was in their rules for as long as we can remember and we just continued their rule. So, as disappointed as I was when I was not able to submit my letter, I realize that in this Chamber we work with each other, we deal with each other and we have to be fair to each other. There is nothing to prevent me, as I ultimately did, to just speak directly to the public but not in this Chamber. With regard to what we are trying to do in this Chamber, last year in an election we established what we thought would be a very important dialogue with the American people, we established a concept that said we were going to make a contract with the American people, and we had 8 things that we wanted to do on opening day and we had 10 things that we wanted to do during the course of the first 100 days. What was memorable about that for me was when I was up for reelection and I met with an editorial board they said how could you have signed such a document, and the question I answered this way by asking a question, I asked: What do you think of what the majority party, then the Democrats, were going to do on the opening day; what did you think about the 10 things they were going to do in the first 100 days; what did you think about their plan and their contract with the American people? And I just waited for the answer. Obviously there was not a contract with the American public, there was no sense of what they wanted to do on the first day, the 8 reforms we wanted to do and the 10 major pieces of legislation in the first 100 days. And I think I take extraordinarily pride in the fact that when we were up for election as the minority party we came forward with a plan, and it did not criticize Democrats, it did not criticize the President, we said we want to change this place. We want to downsize Government, we want to have open rules, we want to pass legislation which I helped author saying Congress should abide by the same laws that we impose on the private sector. The first bill that passed that Chamber, signed by the President, it was bipartisan. But we came forward with a plan, and one of the parts to that plan was a balanced budget amendment. Over 300 Members voted for a balanced budget amendment. But last week we did something more important. We voted to balance the budget, and to my left I have a chart which describes what we intend to do and what we will be doing. The red line is the spending that seems to go parallel with the bottom line which is revenues; they never meet. As long as I have been a Member of Congress we have had deficits. In fact, when I was a State legislator and I watched Congress in the State legislature, we have to balance our budgets, but in Congress we have not. And when I was in the State legislature I kept waiting for Congress to get its financial House in order. Thirteen years I waited and then I had an opportunity to serve in Congress, and I worked and waited for an opportunity to finally vote on a budget that would get us balanced. And that is what we do. We slowed the growth in spending; spending still goes up on the average in the aggregate and it ultimately meets the growth of revenues in the 7th year. We are going to spend more money each year on the aggregate in our Government. We are just slowing the growth, and what we are trying to do is end deficit spending. There are some young people in this audience who may not know that if we do not succeed in slowing the growth in spending, by the time the young people are adults they will be paying 70 percent of every dollar they earn in taxes to the Federal Government to help pay for the debt that is taking place today. And what is starting to happen in our dialog is we are having the elderly say you cannot do this, and we have the young who are not aware of what we need to do, and hopefully during the course of the next few months we will have an open dialog, young and old, talking about what we need to do. We need to slow the growth in revenue, and that is what we are going to do and that is what we voted to do last week. The second chart shows spending in three ways. The yellow is the national debt, the interest that we pay each year on the national debt. we pay $235 billion of interest payments on the national debt. That could go for housing, it could go for our military, it could go for our schools, it could go for a whole host of other things if past generations had not deficit spent, but they have. We have just such a large debt that our interest is now 15.4 percent of our budget. Only about a third of our budget is domestic spending and defense spending, what we call discretionary spending. There is foreign aid in here. I vote on one-third of the budget as a Member of Congress; as a Member of Congress I do not vote on anything over here in the blue. All of that is entitlement. These are Social Security, Medicare, Medicaid and other entitlements, food stamps, agricultural subsidies. They are an automatic pilot, they just keep happening and happening and happening. But I vote on this, what is in the pink, what is discretionary spending, and what we are looking to do is actually have real cuts in discretionary spending. We are going to try to slow the growth of entitlements but still allow entitlements to grow, and we are going to try to keep down the interest payments that we are making every year. Half of the budget is on automatic pilot. I am happy to yield to the gentleman fro Michigan [Mr. Ehlers].

Mr. SHAYS

Mr. SHAYS. Mr. Speaker, earlier this month, one of the most respected leaders in the advertising industry, John E. O'Toole, former President and chief executive of the American Association Of Advertising Agencies, and a resident of Connecticut's Fourth Congressional District passed away in New York. John O'Toole's four decades in advertising were distinguished by the highest standards he demanded of himself and demanded of his industry. That dedication and determination to provide the American public with quality and seamless honesty earned him his induction this year into the Advertising Hall of Fame. John O'Toole's leadership, his creativity, his wit, and his friendship will be sorely missed by his family and many, many friends. My heartfelt condolences go out to his wife, Phyllis and his two daughters.

Mr. SHAYS

Mr. SHAYS. Mr. Chairman, I yield 2 minutes to the gentleman from Pennsylvania [Mr. Shuster], the distinguished chairman of the Committee on Transportation and Infrastructure.

Mr. SHAYS. Mr. Chairman, I yield 1 minute to the gentleman from California [Mr. Baker].

Mr. SHAYS. Mr. Chairman, I yield 2 minutes to the distinguished gentleman from Florida [Mr. Mica], a distinguished member of the Committee on Government Reform and Oversight.

Mr. SHAYS. Mr. Chairman, I yield two minutes to the distinguished chairman of the Committee on Government Reform and Oversight, the gentleman from Pennsylvania [Mr. Clinger]. (Mr. CLINGER asked and was given permission to revise and extend his remarks.)

Mr. SHAYS. Mr. Chairman, I yield 1\1/2\ minutes to the gentlewoman from New York [Ms. Molinari].

Mr. SHAYS

Mr. SHAYS. Mr. Chairman, I yield 1\1/2\ minutes to the gentlewoman from Utah [Mrs. Waldholtz].

Mr. SHAYS. Mr. Chairman, I would say to the gentleman, we are not quite sure. If the gentleman wants to come over here, I am happy to talk to him.

Mr. SHAYS. Mr. Chairman, I yield 1 minute to the gentleman from California [Mr. Dellums].

Mr. SHAYS. Mr. Chairman, it is my distinct honor to yield the balance of our time to the gentleman from Texas [Mr. Armey], our majority leader.

Mr. SHAYS. Mr. Chairman, I yield 1\1/2\ minutes to the distinguished gentleman from New York [Mr. Lazio], a member of the Committee on the Budget.

Mr. SHAYS. Mr. Chairman, I yield such time as he may consume to the gentleman from Arizona [Mr. Stump], chairman of the Committee on Veterans' Affairs. (Mr. STUMP asked and was given permission to revise and extend his remarks.)

Mr. SHAYS. Mr. Chairman, I yield 2 minutes to the distinguished gentleman from Ohio [Mr. Boehner], the chairman of the Republican Conference.

Mr. SHAYS. Mr. Chairman, I yield 2-\1/2\ minutes to the distinguished gentleman from California [Mr. Herger], a member of the Committee on the Budget.

Mr. SHAYS. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from Illinois [Mr. Hastert], the distinguished deputy whip.

Mr. SHAYS. Mr. Chairman, I yield such time as he may consume to the gentleman from Iowa [Mr. Latham]. (Mr. LATHAM asked and was given permission to revise and extend his remarks.)

Mr. SHAYS. Mr. Chairman, I yield 1 minute to the gentleman from Virginia [Mr. Goodlatte].

Mr. SHAYS

Mr. SHAYS. Mr. Chairman, I thank the gentleman. I, with all sincerity, thank the gentlewoman from Missouri. It is important we keep our promises. I am looking at quote after quote where she says we need to balance the Federal budget, and that is what we are doing. This is our opportunity. In Missouri, we give $3.7 billion to Missouri in Medicare funding. It is going to go up to $5.2 billion. It is an increase of 39 percent. The per beneficiary of individuals in Missouri get $4,493. That is going to go up to nearly $6,000, an increase per beneficiary. Cutting school lunch, it is going to go up 4.5 percent. It is an increase. Only in Washington will the gentlewoman say that an increase in spending in Medicare, an increase in spending in school lunch, is a cut. Only in Washington.

Mr. SHAYS. Mr. Chairman, this is not fun and games, this is very serious business, and for any of us. on both sides of the aisle, we know that and do not need to be reminded of it. We are talking about saving this country, and we have different alternatives for doing that. Mr. Chairman, I just hope we do not waste this opportunity. As I said in the beginning, I have waited 20 years for the opportunity to help this country get its financial house in order. This is our moment, and this is the moment we have to seize. We need to get our financial house in order for our children and our children's children. We need to slow the growth in spending. Now, when we talk about Medicare, because it has come up continually and we continually hear Members talk about cuts in Medicare, the previous Member who spoke, the gentlewoman from the District of Columbia, talked about cuts in Medicare. And yet in our plan it goes up 45 percent in the next 7 years. The gentleman before that from New York talked about cuts in Medicare, and yet it goes up 35 percent. The per beneficiary costs are going to go from $5,312 to $7,000. We are taking into consideration the increase in beneficiaries and we are providing more money. In general, our plan goes from $178 to $259 billion. I keep saying it, because anywhere else this is an increase, but in Washington, among some on that side, it is a cut. When we talk about what we are spending in Medicare, in the last 7 years we spent $925 billion. In the next 7 years we are going to spend $1.6 trillion on Medicare. In this city an increase in spending is called a cut. Only here. The per beneficiary expenditure for all beneficiaries is going to go up from $48,000 to $63,000 per beneficiary. We are taking into consideration beneficiaries. Yes, it is not going to go up 10 percent, it is going to go up 5 percent. The reason it is going to go up 5 percent is the fund is projected to be exhausted in the year 2001 if it goes up 10 percent. If it goes up at 10 percent, it is exhausted, and if it is exhausted, we run out of money. If we run out of money, we cannot pay beneficiaries. In our plan CBO points out in the year 2002, 2003, and 2004, we provide more money for beneficiaries in Medicare than letting the plan go bankrupt. That is obvious, if it goes bankrupt. We want to change that. The bottom line to this debate is we believe that Medicare recipients deserve choice. We believe they deserve the opportunity to have the same kind of plans their children and their children's children have. We believe if they want to join a plan that gives them a $1,000 rebate, who should they not be able to join that kind of plan? If they are given a plan that allows them to be part of an HMO and save money, why should they not be allowed? Under our present system, we do not allow it. If we think spending is going to go up at 10 percent, then you can say it is a cut. We know it is going to go up 5.

Mr. SHAYS. I would like to ask the gentleman, when it goes bankrupt, how are you able to pay the beneficiaries?

Mr. SHAYS. Mr. Chairman, will the gentleman yield?

Mr. SHAYS. Mr. Chairman, let me just say to the gentleman from Michigan I have tremendous respect for him and I know his question is very sincere. It is really an issue of whether you believe Medicare and Medicaid spending should and will continue to grow at 10 percent. No, we do not think that we are going to improve service by providing less. We believe we can provide less by improving service.

Mr. SHAYS. Mr. Chairman, will the gentleman yield?