[Pages S17247-S17315]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page S 17247]]

THE 7-YEAR BALANCED BUDGET RECONCILIATION ACT OF 1995

(Continued)

Mr. ABRAHAM. Mr. President, I yield myself such time as I may
consume.
Mr. President, I say very briefly there is once again information on
the floor that must be corrected: the argument that the tax cuts
included in the Balanced Budget Act of 1995 are going to the very
wealthy in our country. In fact, Mr. President, 65 percent of all the
tax cuts that are being provided for in this legislation go to people
who are making less than $75,000 a year, 80 percent goes to people
making less than $100,000.
If you are in those categories, according to what we have just heard,
you are rich. In my State of Michigan, people making less than $75,000
a year are not the wealthiest people in America, and I do not think
they are the wealthiest people in America or any other State.
The other claim, Mr. President, with respect to children, I think it
is hard to argue that the policies which we are changing with this
legislation are going to be worse for children than what we have seen
under the policies that have been in existence for so many years.
Today, more children and more people are in poverty than when the war
on poverty began. Today, children in America born this year are faced
with huge debts that we have been running up on the Federal
Government's unlimited credit card. There can be no greater punishment
for the children in America today than to let the spending spree in
Washington continue. That will continue if we do not pass the Balanced
Budget Act which we are dealing with right now.
I yield 11 minutes to the Senator from Rhode Island, of the 15 we
have allotted, and then 5 minutes to the Senator from Alaska.
Mr. CHAFEE. Mr. President, first I want to say I listened to the
Members of the Democratic side speak this afternoon and, with the
exception of the Senator from Nebraska, I have not heard one of them
step up to the plate and try to do something about the deficits the
country is facing.
Yes, they attack everything we have done, every proposal we have, but
they have not offered a single proposal of their own to address what I
believe is the most serious domestic problem facing this Nation of
ours, which is the continuing deficits.
True, there is a lot of mileage in being against it and they are
experts at it. The word ``shame'' was used by the Senator from
Massachusetts about the approach we have taken. I say shame to those on
that side who criticize but offer no alternatives.
With few exceptions, there is little willingness on that side of the
aisle to tangle with this desperate problem that our country faces.
Mr. President, I believe that we truly do face a historic choice: to
put our Nation on a path to a balanced budget by passing this Balanced
Budget Act, or to continue business as usual, borrowing from our
children and grandchildren to meet current Federal obligations.
This is the first time, Mr. President, in my 19 years in the Senate
that we have had the opportunity to vote on a balanced budget. Yes, we
have made attempts in the past to reduce the deficit. We had the Gramm-
Rudman plan, firewalls, all kinds of approaches, but never have we had
the political courage in both branches to make the tough choices to
produce a balanced budget.
Whether one agrees with this legislation or not, it clearly
represents a bold and a decisive step. Those courageous enough to vote
for it deserve kudos, particularly in the House of Representatives,
where they face the voters every 2 years.
As a Senator, as a parent, as a grandparent and as a concerned
citizen, Mr. President, I have come to believe, as I mentioned before,
that the deficit is the most pressing domestic problem our Nation
faces. We cannot continue on this reckless course of spending more than
we take in. Individuals and families, obviously, have to live within
their budgets. So should our national Government.
Now, the Federal deficit is literally snowballing downhill, totally
out of control. In 1980, we had a national debt of $1 trillion. This
amount was amassed over a period of 200 years, from the inception of
the Republic. Yet from 1980 to the present--just 15 years, we have run
up $4 trillion more--four times what it took us 200 years to
accumulate. So now our national debt has reached almost $5 trillion.
Absent decisive action, we are looking at annual deficits continuing
out into the future of $200 billion a year. In other words, every 5
years we will add another $1 trillion of debt to the bill we are
sending to future generations of Americans to pay.
Interest alone, never mind paying down that principal, is the third
largest expenditure in the Federal budget. The largest is Social
Security, the second largest is defense, the third largest is interest
on the debt.
Mr. President, $235 billion a year. That is nearly a quarter of a
trillion dollars that will not be available for better education,
better schools, more help to college students, disease prevention,
improved health, better housing, and more environmental protection.
This staggering debt burden prevents us from making those expenditures,
and obviously the $235 billion this year will go up every year.
Thus, I am committed to reaching a balanced budget within a specified
time period, and the Balanced Budget Act will accomplish that objective
within 7 years, by the year 2002.

[[Page S 17248]]

Whether one agrees with all of the provisions of this or not, there
is another very important reason to vote for the Balanced Budget Act.
It will get us beyond the current budget impasse and on to direct
negotiations with the President.
As far as I am concerned, the sooner we get to the negotiating table
with the administration, the better. We need to get beyond the finger
pointing and on to negotiations. We must get past this veto--which
everyone agrees is going to take place--and on to constructive,
bipartisan dialog with the White House, and congressional Democrats, to
balance this Federal budget within 7 years.
Now, a new forecast was conducted at the University of Rhode Island
indicating that my State is still languishing in the doldrums of a
protracted recession. At best, the recovery we have experienced over
the past several years has been uneven and anemic. This continued
stagnation is sapping the vitality of my State and dashing the hopes of
many of its citizens.
We need to get this entire economy moving--from one end of the
country to the other--and balancing the budget is the single most
important step we can take to make this country prosper. This is not me
saying this. This is the Chairman of the Federal Reserve, Dr. Alan
Greenspan, and a host of economists that testified before the Finance
Committee earlier this year.
The very action of enacting legislation to put us on the path to a
balanced budget, with annual deficits on a downward trend, would
provide an almost immediate reduction in short and long-term interest
rates. This, in turn, would do several things. It would free up capital
to fuel growth, increase demand for goods and services, and increase
employment in our country.
For consumers, the cost of financing a college education for their
children, buying an automobile, or financing a home, would all come
down in response to falling interest rates. For businesses, the cost of
borrowing capital would become more affordable, enabling them to
expand, and to create new jobs.
Now, Mr. President, I do not agree with every aspect of this massive
bill. I say without hesitation or regret that I fought the good fight
on a number of issues about which I care deeply, with some success and
some failures.
However, when the goal is as important as securing the economic
future of our Nation, as I believe it is, one works to advance the
process despite any misgivings one might have.
That said, I would like to offer a few of my own thoughts to those
who will have the difficult task of negotiating a final agreement with
the administration once this bill is vetoed. When the negotiations
convene in early December, I am confident an agreement can be reached
if both sides come to the table in good faith.
Here are my suggestions for them.
At a time when we are trying to balance the budget, I believe tax
cuts are difficult to justify. I, personally, am against any the tax
cuts. However, if we are to have some tax reductions, they should not
become effective until substantial progress has been made toward
reaching our goal of a balanced budget by the year 2002.
Both sides have proposed tax cuts. The administration rails against
our tax cut proposal but, indeed, the President has also proposed tax
cuts totaling more than $100 billion. I believe both sides should defer
the implementation of any tax cuts.
Second, congressional Republicans are exactly right in taking
significant steps to control the future growth of Medicare. The long-
term financial problems facing this program must be addressed in a
forthright manner. The President and congressional Democrats must step
up to the plate on this issue.
By the way, I hope everybody saw the editorial in yesterday's
Washington Post, hardly a mouthpiece for the Republican Party, which
excoriated the Democrats for their failure to face up to this issue of
Medicare. The President and the congressional Democrats are equally to
blame for failing to offer real solutions to the problems confronting
the Medicare program. We Republicans believe in income-testing,
requiring wealthier citizens to pay more for Medicare, as well as other
entitlement programs. In addition, steps must be taken to conform
Medicare administration and management with modern insurance practices.
Moreover, we should give seniors more choices, such as choosing an HMO,
or Preferred Provider Organization. I strongly believe we should not
reduce Part B premiums because doing so would require additional tax
dollars, further increasing the deficit of our Nation. In this regard,
the Republican budget plan keeps the premiums at exactly the same
percentage that they are today, 31.5 percent.
Republicans are right in insisting upon a fixed timetable of 7 years
to reach a balanced budget. We have repeatedly promised fiscal
discipline and repeatedly failed to deliver it. So, when people
suggest, oh, you can do it in 9 years, in 10 years, or 15 years--
beware. Let us set an early date. I believe 7 years is a reasonable
one. That is not tomorrow, that is not the year after next. Within 7
years--by 2002--we ought to be able to deliver a balanced budget. We
are in peacetime. There is no war. There is relative prosperity. We
ought to be able to balance the budget in 7 years.
Severing the individual entitlement and turning the Medicaid program
over to the States as a block grant causes me grave concerns, and could
end up costing our health care system a lot more than the present
program. A per capita cap on the Federal entitlement and much greater
State flexibility are the appropriate solutions to the problems
confronting this program. I also question the wisdom of trying to find
such a high level of savings from Medicaid.
Next, the Senate welfare reform bill was a sound package which won
significant bipartisan support, and I hope the result which emerges
from negotiations----
The PRESIDING OFFICER. The 11 minutes of the Senator have expired.
Mr. CHAFEE. If I might have 1 more minute?
Mr. ABRAHAM. I yield the Senator an additional minute.
Mr. CHAFEE. I hope the result which emerges from negotiations on the
welfare part of the Balanced Budget Act will be closer to the Senate
bill. The conference agreement appears to depart significantly from the
Senate bill in areas such as foster care and children's Supplemental
Security Income, for example. In addition, it is unreasonably
restrictive with respect to the treatment of legal immigrants, which I
find quite troubling and unacceptable.
We should bite the bullet and correct the Consumer Price Index, which
is a measure of inflation used to compute cost-of-living adjustments
for Social Security benefits, as well as to conform Federal tax
brackets with inflationary changes. There is growing bipartisan
consensus within Congress, and among economists, that the CPI
overstates inflation. Even a modest correction of five-tenths of 1
percent would reduce outlays by about $122 billion over 7 years,
affecting only a $4 or $5 reduction in the increase the average
beneficiary would receive.
The approaches I have outlined will help the respective parties reach
an agreement to balance the budget by providing the flexibility needed
to reduce the reliance on savings from Medicaid and other programs
serving the needy, particularly those serving poor children.
Mr. President, in conclusion, this legislation presents us with a
tremendous opportunity to fulfill our responsibilities to put our
fiscal house in order. I urge passage of this legislation so that we
can move on to direct negotiations with the White House toward a final
budget agreement. I thank the Chair and the manager.
Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from
Alaska.
The PRESIDING OFFICER. The Senator from Alaska.
Mr. STEVENS. Mr. President, I do support this Balanced Budget Act of
1995. I want to make a few comments about the continuing resolution
that is going to go to the President and its relationship to this bill.
I was deeply disturbed when the President vetoed the second
continuing resolution. This will be the third one, because, you know,
we did have one from October 1 to November 13. I do hope the messages
are getting through to the President. I have been heartened every
morning when I come into the office and review the logging-in of the

[[Page S 17249]]
public opinion messages that come to my Alaska offices and here in
Washington. I want to tell the Senate, of all the calls we have
received during this period, about 15 percent of those calls agree with
the President; 4 percent rightly urge us to get together and settle
this problem; but over 80 percent of all the calls we received so far
tell me to stay the course and balance the budget. They tell me to
continue this fight that we have, to try to bring about some
restoration of, really, the fiscal solvency of the country and to
realign our laws so they make sense.
Alaskans, really, who have sent us here, tell us a balanced budget is
worth fighting for. It is time we dealt with this issue. I just managed
the defense bill. Most people realize how large that defense bill is,
and we were criticized on reporting it because it was so large.
I wonder how many people realize that the interest on the national
debt this year is the same as the amount of money we are spending for
national defense. The difficulty is, the debt is rising now at an
astounding rate of $335,000 a minute, $20 million an hour, $482 million
a day. We have a deficit already standing at $176 billion, and it is
projected to remain roughly at that level through the end of the
century--almost $200 billion a year through the end of the century.
Alaskans realize we cannot use the Federal credit card to get out of
this debt. We have to find some way to meet it. We also have to find
some way to provide the services that we need.
It will be the small States that are squeezed out if these interest
payments continue to rise, and we know that. We rely on things like the
Coast Guard and the FBI and FAA and so many groups that are involved in
our livelihood, the fisheries and forestry programs of NOAA. All of
that is discretionary spending that is wiped out as interest rates go
up. The reason we are committed to reducing this deficit and trying to
balance the budget is to preserve the kind of services that small
States need.
We could commit ourselves to just reducing the rate of growth to 3
percent across the board or 5 percent across the board. Instead, we
have a very complicated bill before us. It is a bill that makes sense.
The year 2002 makes a lot of sense to me. That is the first midterm
election following the election that will take place in the year 2000.
It gives the American public a chance to really react if Congress has
failed to meet its commitment.
I really have come to the floor today to say I just do not believe
the President can reject this continuing resolution that we have sent
to him. In my judgment, he has campaigned for a 5-year balanced budget
during his campaign in 1992. He has accepted the 7-year period on
several occasions. We are asking for no more than he himself has
pledged in the past to the American public. And in the State of the
Union Message, when he came before us in 1993, he urged us to use the
Congressional Budget Office, not the political appointees of the Office
of Management and Budget, to determine whether the bills that Congress
sends him would meet the goals of balancing the budget.
I think that we need to have this bill which is before us passed.
There is no question about that. But I say to the President, I urge you
to sign the continuing resolution. We are seeing the collision between
the two massive entities of our Federal Government--the executive
branch and the legislative branch--one under the control of one and the
other under the control of the other, and there is no way for them to
get together unless we have some time. This continuing resolution would
give us that time and keep the commitment not only to balanced budget
by 2002, but to do so using sensible economics as delineated by the
Congressional Budget Office.
I thank the Chair.
Mr. DORGAN addressed the Chair.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. DORGAN. Mr. President, under a previous agreement I am allowed 15
minutes, as I understand it.
Mr. President, let me begin doing what someone recently alleged on
the other side of the aisle that no one has done.
Let me compliment the Republicans of the majority party. I think some
of what they have done in this reconciliation bill makes a lot of
sense. Some of the proposals are courageous proposals. Some of them
move us in the right direction.
I am not going to support this bill. I think there are some terrible
ideas in here as well. But let me say all of us have to work together
to find common ground. Some of the proposals make a lot of sense. There
are a good number of the proposals that I do support.
Mr. President, the debate is not about whether we balance the budget
in 7 years. Frankly, if we could get the Federal Reserve Board to take
its foot off the brake and get a little economic growth, we ought to be
able to balance the budget in 5 years. The Federal Reserve Board cranks
up interest rates because they say our economy is growing too fast. Let
us get the Fed to get its foot off the brake, get some growth, and we
can do it before 7 years. That is not the debate, 7 years, 5 years, 8
years.
Mr. President, the Senate is not in order.
The PRESIDING OFFICER. The Senate will be in order.
Mr. DORGAN. Mr. President, the budget reconciliation bill that we are
now debating should have come to the floor of the Senate by June 15.
That is what the law requires. Now we are 5 months later and we have a
bill.
Of course, no one in this Chamber has read it--no one. Not one Member
of the Senate, in my judgment, has read this entire bill. It just came
yesterday. It was put in the Congressional Record in legislative
language of I guess probably 1900 pages long. But I wanted to explain
to my colleagues some of what is in this bill. I think some of what I
will explain is not understood by anybody in the Senate. It is just
there.
We are told now that this bill is going to balance the budget, this
plan must be adopted, this plan or no plan, this is the plan that will
save America, and this is the plan that will solve the fiscal policy
problems. Well, there are other ways to do the same thing and to do it
the right way. So let me go through some of the things that I think can
be changed and must be changed in this plan.
If you go through this plan in some detail, what you will see is the
choices that are made on spending cuts and the choices that are made on
tax cuts seem always to be overweighed in terms of helping those who
have money with additional blessings of tax cuts and hurting those who
do not have much with the added burdens of budget cuts.
Let me show my colleagues something that I will bet no one in the
Senate understands is there. In fact, let me do it by talking about
cows, if the Senate will permit me to do that.
Section 1240, chapter 4, ``livestock and environmental assistance,''
which is a fancy way of saying--it is called LEA, ``livestock and
environmental assistance.'' It includes something called ``manure
management.'' I will bet not many can visit with me about this. You do
not know it is in there--LEA, manure management.
Who gets the money under manure management? If you have up to 10,000
beef cows, or a big herd, you are eligible for $50,000 in manure
management.
But what if you have a small herd? Not beef cows, but dairy cows. If
you have a small herd of dairy cows, and you have more than 55, you are
eligible for zero. Big herd of cows, you get $50,000 for manure
management. But a cow with spots, 56 of them, zero.
Look, this is a cow that wakes up at 5 in the morning and offers
herself to give milk. This is a working cow.
With these cows, if you have 10,000 and they are in a feed lot, they
sit around, eat all day and belch a lot. They do not shift much. So you
have a big herd, small herd; big interests, little interests; big
folks, little folks.
The entire bill does exactly what it does to cows. Tax cuts? The big
interests can smile. They get a lot. Little guys, little folks? There
is not much there. Spending cuts? The little folks, they bear the
burden. Big folks, no problem.
I have not had an opportunity to have the analysts look at this, but
they were able to look at the Senate's version of this bill, and here
is what they said. And let me talk about this in terms of people,
because that's what our country is all about.
Let us take a roomful of people, just a roomful the size of my
hometown of 400 people, and set up chairs so they are all seated. You
say, ``By the way, let's figure out who in here has what money. Let's
take the 20 percent in

[[Page S 17250]]
here with the lowest income, and you all move your chairs over to this
side of the room.'' So we have all of you with the lowest income, 20
percent of you sitting over there. Now we are going to tell you about
your spending cuts. The folks with the 20 percent of the lowest incomes
in this room, we will give you 80 percent of the burden of the spending
cuts.
The news is not all bad, however. You folks with the 20 percent of
the highest incomes, move your chairs over to this side of the room
because we have some awfully good news for you. We are going to cut
taxes, and you folks, you 20 percent that have the highest incomes in
this room, you get 80 percent of the tax cuts.
Let me repeat that. Under this bill, the 20 percent with the least
income get hit with 80 percent of the burden of the budget cuts or
spending cuts. And the 20 percent with the highest incomes get 80
percent of the rewards of the tax cuts.
Some of us think that is not a fair way to apportion the burden of
spending cuts and the blessings of tax cuts.
Let me talk about some other provisions that are in this bill. I will
bet there are not 1 or 2 percent of the Senate who understand what they
are. A couple of people put them in here, so they probably know.
Go to page H 12680 of the Record, which is where this bill was placed
last evening, and you find ``Repeal of inclusion of certain earnings
invested in excess passive assets.'' It reads, ``Paragraph 1 of section
951(a) relating to amounts included in gross income of U.S.
shareholders'' et cetera, ``Repeal of inclusion amount, Section 956(a)
is repealed.''
What does that mean? I will bet there is not anyone on the floor who
knows what that means. Not one person, I will bet, knows what that
means.
I will tell you what it means, Mr. President. It means several
hundreds of millions of dollars is given to the largest corporations
around, who move their jobs overseas, earn income overseas, and under
today's law must repatriate that income and pay taxes on it to this
country.
But this bill on this page says we are of a different mind. We would
like in this bill to put a bow and some wrapping and a little package
which we want to give those companies to encourage them to continue to
keep their jobs outside of this country--several hundred millions of
dollars in a tax cut to encourage companies to stay out of this country
with their jobs. That is one.
How about page 12638, ``corporate alternative minimum tax reform"?
Not many will know what this means, except in the old days you would
read a story that said XYZ corporation made $2 billion in income and
paid zero in income taxes. So the Congress said that is not very fair.
So let us have an alternative minimum tax so that we do not have to
read stories like that.
The House of Representatives wanted to repeal this alternative
minimum tax completely. This conference report agreement would in
effect repeal the alternative minimum tax with respect to depreciation.
What does that mean? It means 2,000 corporations in America will get
a $7 million tax cut each, on average--$7 million apiece for 2,000
corporations buried on page 12638.
Is this what we are supposed to vote for? If we do not vote for this,
are we somehow thickheaded? Or is this a gift?
Is this one of those special little prizes like the ones that go to
the big herd for manure management, one of those little prizes that
goes to the big interests that we are not supposed to see and we are
not supposed to debate?
Maybe this would come to the floor under normal circumstances and we
could debate the wisdom of such a policy at a time when we say to
55,000 kids on Head Start: We do not have enough money for you. You are
going to get kicked off the Head Start program; you kids going to
college, you are going to pay more to go to college. We do not have
enough money for student financial aid; you folks on Medicare pay more
and get less for your health care; you people on Medicaid, we will
block grant that money to the States and maybe they will have money for
your health care, or maybe not.
But we say we have plenty of money to give a tax break to companies
that move their jobs overseas, and we have plenty of money to virtually
repeal the alternative minimum tax.
Some of us think that is not a priority that makes much sense.
Mr. President, how much time is remaining?
The PRESIDING OFFICER (Mr. Frist). About 5 minutes.
Mr. DORGAN. Mr. President, yesterday, I spoke in the Chamber about
priorities and choices. Let me in the middle of my remarks again
compliment the Republicans, the majority party. Their desire for a
balanced budget is commendable. I compliment them genuinely for it. The
desire ought to be universally shared on this floor.
The question of how you achieve that goal, the choices and the
priorities you make, are important. They are important to a lot of
people.
I was in the Chamber yesterday talking about a little program called
Star Schools, a tiny little program. It tries to create Star Schools in
math and sciences, at an annual cost of $25 million. This bill would
cut Star Schools by 40 percent--40 percent in a tiny little program.
There's another program called star wars. That one is increased 100
percent. The majority's priority is star wars, which is not ordered,
not needed, not wanted. In the defense spending bill they boosted the
Pentagon's star wars program by 100 percent. Supposedly we have plenty
of money, hundreds of millions of dollars, for that program because the
sky is the limit. We are all loaded when it comes to the star wars
program, but a 40 percent cut in a tiny program called Star Schools.
Nowhere is there a better example of warped priorities, in my
judgment.
Tax cuts. I would like to see tax cuts for every American, but I
would say this. I offered an amendment in this Chamber saying let us at
least limit the tax cuts to those who make $250,000 a year or less and
use the savings from that limitation to reduce the hit on Medicare. Of
course, that did not pass. Everybody here knows that every dollar of
tax cut in this bill is borrowed. No one can deny that. The facts
demonstrate it. Every single dollar that is given in a tax cut is going
to be borrowed. Every dollar of tax cuts will increase the Federal debt
by a dollar.
Balanced budget. We are told this is the balanced budget. Well,
again, let me commend the Republicans because I think there needs to be
a greater and more energetic effort to try to balance the budget, but
this budget is not balanced.
The Director of the Congressional Budget Office says it is not a
balanced budget. It will have a $108 billion deficit in the year 2002.
I can read the letter if you want. She wrote it on October 19.
You can call it a balanced budget if you misuse $110 billion in
Social Security funds in the year 2002, but, of course, that would be
dishonest, and it would also violate the law.
This is not a balanced budget. It has a $108 billion deficit in 2002.
In fact, the very budget bill that was brought to the floor that was
described as the Balanced Budget Act has on page 3 under the category
``Deficits,'' $108 billion in deficits in the year 2002. So it is not a
balanced budget.
We are not talking about the facts when people assert that it is a
balanced budget.
There are many ways to create a balanced budget. There are many
competing interests in this country. There are almost unlimited needs,
and there are limited resources. We would do this country a favor in my
judgment by creating a fiscal policy that balances the budget the right
way. As we do it, let us still continue to invest in the things that
make America great; let us continue to make our promises.
What makes America great? Investment in education and investment in
our children advance this country's economic interests.
You have all heard the admonition: if you are worried about a year,
plant rice; if you are worried about 10 years, plant some trees; if you
are worried about a century, educate your children. Education advances
this country's interests. That is an investment. We do this country no
favor by deciding that the way to balance the Federal budget is cut
education and build star wars. The choices, it seems to me, are
difficult, but they are not choices in which we have to reach the wrong
result time after time after time.

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There are many things, as I said when I started, in this proposal for
which we should commend the Republicans, but there can be a much better
approach to balancing the budget, fairer to all Americans if we could
get together and understand the consequences of these choices on all of
the interests, big interests and little interests, big folks and little
folks and all Americans.
I yield back the remainder of my time.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. ABRAHAM. Mr. President, at this time I would yield 10 minutes to
the Senator from Iowa.
Mr. GRASSLEY. Mr. President, at the close of Tuesday's first budget
meeting with White House officials, I expressed to Chief of Staff Leon
Panetta and Treasury Secretary Rubin my disappointment with their
inflexible posture.
I told Mr. Panetta, and these are my exact words:

Don't assume the President isn't going to change his
position. He's changed his mind before.

Mr. Panetta did not respond and just walked off.
It was suggested to me that this may have been taken as a slap at or
insult to the President.
Let me assure you that I meant no malice, nor did I intend it as a
partisan swipe at the President.
I was simply making a statement of fact.
And the fact is, the President changes his mind quite frequently.
And if the President refuses to negotiate in person with
congressional leaders, then those he sends must fully appreciate the
fact that the President changes his mind a lot and that they as White
House negotiators must be more flexible and open-minded.
The fact that the President changes his mind frequently may not be
well known by the public at large, but it is something that those of us
who work with him know very well.
The House Appropriations ranking Democrat, Congressman David Obey
understands this.
In June Mr. Obey told the Associated Press:

I think most of us learned sometime ago that if you don't
like the President's position on a particular issue, you
simply need to wait a few weeks.

Again, that was an observation, a simple statement of fact, from a
Democratic congressional leader, that President Clinton changes his
mind quite frequently.
President Clinton has changed his mind frequently on the question of
a balanced budget. On January 8, President Clinton promised to
``present a 5-year plan to balance the budget.''
On May 20, he said he thought balancing the budget ``clearly can be
done in less than 10 years.'' So you see, he changed his mind again.
He changed his mind again on June 13, when he said, ``It took decades
to run up this deficit; it's going to take a decade to wipe it out * *
*.''
On October 19, President Clinton changed his mind again about
balancing the budget. He stated ``Well, I think we could reach it in
seven years * * *''
So you see, Mr. President, my point to Mr. Panetta was that if he and
the other White House negotiators would be a bit more flexible, we
could quickly resolve this impasse that has shut down the Government.
I am sure Mr. Panetta is persuasive enough to convince the President
to change his mind again * * * to do the right thing by committing to
supporting a CBO certified? Well, CBO has long been recognized as the
reliable, unbiased, nonpartisan budget scorer.
Unfortunately, on this point, President Clinton has also changed his
mind again.
In 1993, President Clinton touted CBO as the independent and more
accurate budget scorer.
But then he changed his mind. He now is trying to convince Americans
that OMB, which is controlled by President Clinton, is the reliable,
unbiased, and nonpartisan budget scorer.
President Clinton offered what he claimed was a 10-year balanced
budget plan that was cooked up by the OMB that he controls.
Even the chairman of the Democratic Senatorial Campaign Committee,
Senator Bob Kerrey, criticized the President's so-called 10-year
balanced budget plan by stating

They cooked the numbers . . . He needs to get back to the
CBO numbers.

And, of course, as we all know, CBO's analysis exposes the fact that
the President's budget does not balance, not in 5 years, 7 years, 10
years or ever.
Instead, CBO shows that it would compound the burden of our children
and grandchildren by increasing the deficit to the tune of over $200
billion each of those 10 years.
This is why President Clinton's budget was defeated in the Senate by
a vote of 96 to 0. Not one Democrat voted for President Clinton's
budget, not one Republican.
President Clinton has changed his mind on taxes. He campaigned
promising a large tax cut.
Once elected President, he changed his mind. He instead pushed for
and signed into law the largest tax increase in our Nation's history--
$251 billion. It was a tax increase that hit our elderly and young
people alike.
Recently, he changed his mind again about his 1993 tax increase. He
told people in Houston that, and I quote:

Probably there are people in this room still mad at me at
that budget because you think I raised your taxes too much.
It might surprise you to know that I think I raised them too
much, too.

I do not suppose it is any more than a mere coincidence that he had
that particular change of mind during his Presidential campaign
fundraiser in Texas.
President Clinton has changed his mind on Medicare spending a good
number of times as well.
At the AARP Presidential Forum in 1993, President Clinton proposed to
restrain the growth of Medicare spending to two times the rate of
inflation. He said, and I quote:

Today. . . . Medicare (is) going up at three times the rate
of inflation. We propose to let it go up at two times the
rate of inflation. That is not a Medicare--cut . . .

Mr. President, guess what? President Clinton has changed his mind
again--on two different counts here.
The Republican plan to save Medicare allows Medicare spending to go
up--now listen carefully--two times the rate of inflation.
That is exactly what President Clinton proposed in 1993, but now he
attacks Republicans for proposing the same.
Furthermore, whereas in 1993 he argued before AARP that doing this
was not a cut, now that the Republicans are recommending this,
President Clinton says that it is a cut.
Mr. President, we could go on and on and on, if we attempted to list
every time President Clinton changed his mind, but I will not suffer my
colleagues through such an ordeal.
But the point should be clear to White House negotiators such as Mr.
Panetta, that the President does change his mind often, and thus, they
should not be so closed-minded and entrenched in our negotiations.
Almost everything we Republicans and Americans want, and that
remarkably has led to this unfortunate juncture, the President has at
one time or another, has said that he supports as well.
There is no justified reason for him to disagree with us now.
He said we could balance the budget in 7 years, so let us do it.
If he can come up with a plan to do it in 5 years as he said he
would, then let us consider that instead.
He said CBO is the most reliable budget scorer, so let us use their
numbers, instead of those rosy numbers cooked up by his OMB.
He said he wanted to restrain the growth of Medicare spending to two
times inflation like we Republicans are currently proposing, so let us
do it.
He promised Americans a major tax cut, so he should join us
Republicans and just do it.
It is time President Clinton quit listening to his Democrat campaign
consultants who brag about subscribing to terror to make people hate,
and start listening to some sound advice that is good for the country,
class warfare and generational/warfare tactics.
Mr. President, it is time to do the right thing.
There is no reason President Clinton cannot change his mind one more
time--one more time to do what is right.
As the ad campaign says, ``Just Do It.''

[[Page S 17252]]

President Clinton, Just Do It.
I yield the floor, and I reserve the remainder of my time for the
rest of the speakers.
Mr. ABRAHAM. I yield 10 minutes to the Senator from Oklahoma.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. NICKLES. First, Mr. President, I would like to compliment my
colleague and friend from Iowa, Senator Grassley, for an excellent
speech. Also, I would like to compliment Senator Domenici for his
leadership in bringing this budget package to the floor, as well as
Senator Dole and Senator Roth, and Senator Abraham, who is managing the
floor, and I think doing an exceptional job.
Mr. President, in my opinion, this is probably the most important
vote that we will cast in my 15 years in the Senate. We had historic
votes during President Reagan's term and President Bush's. But we
really never really had a vote to balance the budget. We never had a
vote that would enact into law changes necessary to balance the budget.
Tonight we are going to have that vote. And I understand that our
colleagues on the Democrat side of the aisle and the President will not
support us. I think that is unfortunate. I hope that after this vote
maybe they will work with us to enact a balanced budget.
For the first time in history, we are going to have the courage to do
what is right and actually balance the budget. Such action by Congress
has not happened in decades. You would have to go back to 1969 to find
the last time we balanced the budget.
I think it is important, too, that we use facts. I have several
charts I am going to put in the Record to back up some of the comments
I am going to make.
One, I want to refute some of the statements that President Clinton
has made. He said, his 1993 budget reduced deficits by $500 billion. I
heard him say that as recently as yesterday.
Mr. President, I ask unanimous consent to have printed in the Record
a chart that shows the CBO baseline in January 1993, which had very
high deficit projections, and the CBO baseline in August of 1995, which
had significantly lower deficits. This chart shows why those deficits
are lower. I ask unanimous consent to have that chart and others
printed in the Record at this time.
There being no objection, the charts were ordered to be printed in
the Record, as follows:

SOURCE OF DEFICIT DECLINE SINCE PRESIDENT CLINTON TOOK OFFICE
--------------------------------------------------------------------------------------------------------------------------------------------------------
Clinton term Out Years
------------------------------------------------------------------------
103d Congress 104th Congress 105th Congress Total
------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
--------------------------------------------------------------------------------------------------------------------------------------------------------
CBO deficit baseline (January 1993)................................. 310 291 284 287 319 357 1,848
Tax and fee increases............................................... 0 (28) (47) (54) (65) (64) (259)
Spending increase/(cuts)............................................ 4 9 3 (18) (39) (56) (98)
Technical, economic, and debt service............................... (59) (69) (79) (24) 2 (7) (236)
CBO deficit baseline (August 1995).................................. 255 203 161 189 218 229 1,255
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office reports.
Amounts which reduce the deficit are shown in (parenthesis). Details may not add due to rounding.

MEDICARE SPENDING COMPARISONS
[Gross mandatory outlays in billions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
7 year 7 year
1995 1996 1997 1998 1999 2000 2001 2002 total average
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Balanced Budget Act........................................... 178 196 211 217 228 250 270 293 1,664
Growth over 1995.............................................. 18 33 39 50 72 92 115 417
Percent growth................................................ 10 8 3 5 10 8 8 64 7.4
President II.................................................. 174 192 208 223 239 254 271 289 1,676
Growth over 1995.............................................. 18 34 49 65 80 97 115 458
Percent growth................................................ 10 8 7 7 6 7 7 66 7.5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: SBC Majority & OMB data. Includes GME outlays.

BUDGET PLAN COMPARISON
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sum 1996- Compared to
1995 1996 1997 1998 1999 2000 2001 2002 2002 a freeze
--------------------------------------------------------------------------------------------------------------------------------------------------------
Balanced Budget Act (CBO
scoring):
Outlays.................... 1,518 1,590 1,629 1,660 1,703 1,764 1,801 1,857 12,004 1,378
Revenues................... 1,357 1,412 1,440 1,514 1,585 1,665 1,756 1,861 11,233 607
(Deficit)/surplus........ (161) (178) (189) (146) (118) (100) (46) 4 (773)
Clinton budget (OMB scoring):
Outlays.................... 1,518 1,579 1,655 1,713 1,777 1,847 1,903 1,966 12,440 1,814
Revenues................... 1,357 1,415 1,474 1,549 1,628 1,716 1,817 1,903 11,492 1,993
(Deficit)/surplus........ (161) (163) (179) (161) (146) (125) (91) (58) (923)
Clinton budget (CBO scoring):
Outlays.................... 1,518 1,611 1,680 1,737 1,822 1,904 1,983 2,073 12,810 2,184
Revenues................... 1,357 1,416 1,467 1,538 1,608 1,684 1,772 1,864 11,349 1,850
(Deficit)/surplus........ (161) (196) (212) (199) (213) (220) (211) (210) (1,461)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: CBO and OMB.

EARNED INCOME CREDIT
----------------------------------------------------------------------------------------------------------------
Minimum income Maximum income
Year Maximum credit for maximum for maximum Phaseout
credit credit income
----------------------------------------------------------------------------------------------------------------
Two or more children

Historical
1976............................................ $400 $4,000 $4,000 $8,000
1977............................................ 400 4,000 4,000 8,000
1978............................................ 400 4,000 4,000 8,000
1979............................................ 500 5,000 6,000 10,000
1980............................................ 500 5,000 6,000 10,000
1981............................................ 500 5,000 6,000 10,000
1982............................................ 500 5,000 6,000 10,000
1983............................................ 500 5,000 6,000 10,000
1984............................................ 500 5,000 6,000 10,000
1985............................................ 550 5,000 6,500 11,000
1986............................................ 550 5,000 6,500 11,000
1987............................................ 851 6,080 6,920 15,432
1988............................................ 874 6,240 9,840 18,576
1989............................................ 910 6,500 10,204 19,340
1990............................................ 953 6,810 10,730 20,264
1991............................................ 1,235 7,140 11,250 21,250

[[Page S 17253]]

1992............................................ 1,384 7,520 11,840 22,370
1993............................................ 1,511 7,750 12,200 23,049
1994............................................ 2,528 8,425 11,000 25,296
1995............................................ 3,110 8,640 11,290 26,673

Clinton expansion

1996............................................ 3,564 8,910 11,630 28,553
1997............................................ 3,680 9,200 12,010 29,484
1998............................................ 3,804 9,510 12,420 30,483
1999............................................ 3,932 9,830 12,840 31,510
2000............................................ 4,058 10,140 13,240 32,499
2001............................................ 4,184 10,460 13,660 33,527
2002............................................ 4,320 10,800 14,100 34,613

Balanced Budget Act

1996............................................ 3,564 8,910 11,630 25,425
1997............................................ 3,680 9,200 12,010 26,254
1998............................................ 3,804 9,510 12,420 27,145
1999............................................ 3,932 9,830 12,840 28,059
2000............................................ 4,058 10,140 13,320 28,940
2001............................................ 4,184 10,460 13,660 29,856
2002............................................ 4,320 10,800 14,100 30,821

One child

Historical

1976............................................ 400 4,000 4,000 8,000
1977............................................ 400 4,000 4,000 8,000
1978............................................ 400 4,000 4,000 8,000
1979............................................ 500 5,000 6,000 10,000
1980............................................ 500 5,000 6,000 10,000
1981............................................ 500 5,000 6,000 10,000
1982............................................ 500 5,000 6,000 10,000
1983............................................ 500 5,000 6,000 10,000
1984............................................ 500 5,000 6,000 10,000
1985............................................ 550 5,000 6,500 11,000
1986............................................ 550 5,000 6,500 11,000
1987............................................ 851 6,080 6,920 15,432
1988............................................ 874 6,240 9,840 18,576
1989............................................ 910 6,500 10,240 19,340
1990............................................ 953 6,810 10,730 20,264
1991............................................ 1,192 7,140 11,250 21,250
1992............................................ 1,324 7,520 11,840 22,370
1993............................................ 1,434 7,750 12,200 23,054
1994............................................ 2,038 7,750 11,000 23,755
1995............................................ 2,094 6,160 11,290 24,396

Clinton expansion

1996............................................ 2,156 6,340 11,630 25,119
1997............................................ 2,227 6,550 12,010 25,946
1998............................................ 2,305 6,780 12,420 26,846
1999............................................ 2,380 7,000 12,840 27,734
2000............................................ 2,455 7,220 13,240 28,602
2001............................................ 2,533 7,450 13,660 29,511
2002............................................ 2,615 7,690 14,100 30,462

Balanced Budget Act

1996............................................ 2,156 6,340 11,630 23,055
1997............................................ 2,227 6,550 12,010 23,814
1998............................................ 2,305 6,780 12,420 24,637
1999............................................ 2,380 7,000 12,840 25,454
2000............................................ 2,455 7,220 13,240 26,252
2001............................................ 2,533 7,450 13,660 27,085
2002............................................ 2,615 7,690 14,100 27,957

1976............................................ (\1\) (\1\) (\1\) (\1\)
1977............................................ (\1\) (\1\) (\1\) (\1\)
1978............................................ (\1\) (\1\) (\1\) (\1\)
1979............................................ (\1\) (\1\) (\1\) (\1\)
1980............................................ (\1\) (\1\) (\1\) (\1\)
1981............................................ (\1\) (\1\) (\1\) (\1\)
1982............................................ (\1\) (\1\) (\1\) (\1\)
1983............................................ (\1\) (\1\) (\1\) (\1\)
1984............................................ (\1\) (\1\) (\1\) (\1\)
1985............................................ (\1\) (\1\) (\1\) (\1\)
1986............................................ (\1\) (\1\) (\1\) (\1\)
1987............................................ (\1\) (\1\) (\1\) (\1\)
1988............................................ (\1\) (\1\) (\1\) (\1\)
1989............................................ (\1\) (\1\) (\1\) (\1\)
1990............................................ (\1\) (\1\) (\1\) (\1\)
1991............................................ (\1\) (\1\) (\1\) (\1\)
1992............................................ (\1\) (\1\) (\1\) (\1\)
1993............................................ (\1\) (\1\) (\1\) (\1\)
1994............................................ 306 4,000 5,000 9,000
1995............................................ 314 4,100 5,130 9,230

Clinton expansion

1996............................................ 324 4,230 5,290 9,520
1997............................................ 334 4,370 5,460 9,830
1998............................................ 346 4,520 5,650 10,170
1999............................................ 357 4,670 5,830 10,500
2000............................................ 369 4,820 6,020 10,840
2001............................................ 380 4,970 6,210 11,180
2002............................................ 392 5,130 6,410 11,540

Balanced Budget Act

1996............................................ 0 (\1\) (\1\) (\1\)
1997............................................ 0 (\1\) (\1\) (\1\)
1998............................................ 0 (\1\) (\1\) (\1\)
1999............................................ 0 (\1\) (\1\) (\1\)
2000............................................ 0 (\1\) (\1\) (\1\)
2001............................................ 0 (\1\) (\1\) (\1\)
2002............................................ 0 (\1\) (\1\) (\1\)
----------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.

[[Page S 17254]]
EARNED INCOME CREDIT--REDUCING PROGRAM COSTS
[Fiscal year, billions of dollars]
------------------------------------------------------------------------
Revenue
Fiscal year Outlay cost cost Total cost
------------------------------------------------------------------------
Historical

1985............................. 1.179 0.482 1.661
1986............................. 1.498 0.586 2.084
1987............................. 1.552 0.553 2.105
1988............................. 2.996 1.033 4.029
1989............................. 4.276 1.655 5.931
1990............................. 4.669 1.943 6.612
1991............................. 5.430 1.681 7.111
1992............................. 7.955 2.756 10.711
1993............................. 10.062 3.091 13.153
1994............................. 12.254 3,489 15.743
1995............................. 16.730 3.117 19.847

Clinton expansion

1996............................. 20.257 3.505 23.762
1997............................. 22.039 3,831 25.870
1998............................. 22.922 4.025 26.947
1999............................. 23.893 4.184 28.077
2000............................. 24.938 4.400 29.338
2001............................. 25.897 4.639 30.536
2002............................. 26.912 4.823 31.735

Balanced Budget Act

1996............................. 20.094 3.445 23.539
1997............................. 18.771 2.648 21.419
1998............................. 19.409 2.731 22.140
1999............................. 20.137 2.793 22.930
2000............................. 20.893 2.907 23.800
2001............................. 21.607 3.012 24.619
2002............................. 22.453 2.978 25.431
------------------------------------------------------------------------
Source: Joint Committee on Taxation.

Mr. NICKLES. Mr. President, what this chart shows is that the
President did not make any spending cuts in his first 3 years
whatsoever, none. He did have significant tax increases, actually, the
largest tax increase in history. But the bulk of the so-called deficit
reduction was technical changes, economic changes and debt service
savings, in other words, reductions that were not the result of his
policies.
But I wanted to note, of that $500 billion in so-called deficit
reduction, in the first 3 years there were no spending cuts. Actually,
spending increased over the CBO baseline $4 billion in 1993, $9 billion
in 1994, $3 billion in 1995. So now, those facts are in the record.
Also, we heard the President say in one press conference that he wanted
to balance the budget. He mentioned the word ``balanced budget'' 16
times in a recent short press conference. As a matter of fact, he has
mentioned several times about his desire to balance the budget.
As a candidate in 1992, he said that he would submit a 5-year plan to
balance the budget. On May 20 of this year he said, ``I think balancing
the budget clearly can be done in less than 10 years.'' In June he
said, ``It's going to take a decade to wipe out the deficit.'' In
October he said that ``We could reach it,'' balancing the budget, ``in
7 years.'' Also, in October he said, ``We can do it in 8 years.'' Also,
in October he said, ``We can do it in 9 years.'' The President has been
all over the lot on how long it would take to balance the budget.
The point is, Republicans actually have a bill--not a statement--we
have a bill before us which, if enacted, will balance the budget in 7
years. I think that is real. It is significant. It is substantive.
Now, I heard some of my colleagues on the floor say, ``Well, if we
enact your plan, it is going to devastate Medicare, it is going to
devastate Medicaid, and it is going to give all these wealthy people
big tax cuts. They say that we are going to cut these programs and
transfer more wealth to the wealthy.''
That is totally, completely, irrefutably false. And I will put the
facts in the record to prove it. But first, I want to talk about these
cuts for a second.
For example, Medicare spending rises under our plan. This year it is
$178 billion. In the year 2002, it is $293 billion. That happens to be
a 65-percent increase. Not a decrease, an increase. Medicaid spending
rises from $89 billion to $122 billion. That is a 37-percent increase.
Overall mandatory spending increases from $739 billion to over $1.93
trillion. That is a 48-percent increase.
Maybe we did not cut spending enough. Those are big increases. Today
we are spending about $1.5 trillion. In 7 years, we are going to spend
$1.85 trillion. In other words, spending increases every single year.
Do we slow the growth of spending down? Yes. Do we make these
programs grow at more affordable rates? Yes. Do we offer some tax
relief for middle-income Americans? Yes. Should we make apologies for
that? I say definitely not.
I think this package that we have put together is a fair package. I
think it is a good package.
Also, I have to say, Mr. President, we have to compare it to the
President's budget. What has he submitted as his plan? In January 1995,
he submitted a budget that never came into balance. His budget actually
had deficits rising substantially.
He submitted a revised budget in June. According to CBO, the deficits
in his new budget go up as well. Let me give you his deficit figures.
This year, the deficit was $164 billion. Under the President's plan, it
rises to $210 billion in the year 2002.
Our budget has a surplus in the year 2002 of $4 billion. We actually
balance the budget in 7 years. The President's budget deficits continue
to escalate to over $200 billion for as far as the eye can see. That is
the difference in our visions for the future.
Those are the only two proposals on the table. I might mention, the
President's proposal was about 20 pages on a fax machine. Not a
significant, substantive document. It was more a theoretical document.
We have a real budget that says if we curb these entitlement programs
and make other spending cuts, we are going to have a balanced budget.
Republicans are going to change budget laws. We did not balance the
budget under President Reagan, and I love President Reagan. We did not
do it under President Bush, and I think very highly of President Bush.
But we never had the votes or the courage to curtail the growth of
entitlement programs.
Some of these programs are exploding in cost. Over the last several
years Medicaid grew at 28, 29, 30, 31 percent. The earned-income credit
grew from $2 billion in 1985 to $23 billion in 1994. That is an
unbelievable growth rate, 11 times what it was just 9 years ago. In
other words, we had a lot of entitlement programs just exploding in
cost.
Now, for the first time, we are curtailing the growth of those
programs. Some people say we are slashing those programs. I take issue
with that.
Medicare is probably the one issue that has been demagogued by
opponents of this package more than any other. I mention, in our
budget, that in 1995 in Medicare we spend $178 billion. By the year
2002, we spend $293 billion. That is a 65 percent increase.
Mr. President, what is shocking--I hope my colleagues on the other
side of the aisle will look at this chart--as I compare the spending
that we propose in Medicare every year to the spending proposed in the
President's June budget--and I find very, very little difference. Under
our proposal, Medicare grows at an annual rate of 7.4 percent. Under
the President's proposal, Medicare grows at 7.5 percent.
Under our proposal, for which we are being lambasted so much--I heard
people say we are killing Medicare and we are being unfair to senior
citizens--actually, our budget proposes spending more in the year 2002
than the President's proposal in Medicare. That is kind of surprising.

My point is, these cuts are not draconian, they are not drastic.
Somebody said, ``The Republicans are trying to cut Medicare $270
billion and the President is only trying to cut $124 billion.''
The President uses different economic assumptions. He assumes the
health care costs are going to grow at a slower rate than we do on the
Republican side.
Our point is that we are using the Congressional Budget Office. I
might mention, President Clinton originally said that he would use the
Congressional Budget Office. It does make a difference. Over a 10-year
span, the President's budget comes to balance by assuming a more
favorable economic situation that equals $475 billion more that he
would like to spend.
But the President, in his State of the Union Address in 1993,
explained to Congress why he used CBO numbers to score his budget
proposal. He said:

I did this so that we could argue about priorities with the
same set of numbers. I did this so that no one could say I
was estimating my way out of this difficulty. I did this
because if we can agree together on the most prudent revenues
we're likely to get if the recovery stays and we do the right
things economically, then it will turn out better for the
American people than we say.

The President was right: We should use the same numbers. But
unfortunately, now he is trying to estimate his way out of difficulty.
We need to balance the budget. We need to make difficult decisions.
It is not always easy to do, but I think we have a very balanced
proposal, one that does not inflict undue paid. Somebody said, ``Oh,
look at all the pain.'' I do not see pain in this proposal. I see us
doing what we should do.

[[Page S 17255]]

Let us look at Medicare. My Democrat colleagues on the Finance
Committee offered to cut Medicare part A, the hospital portion, by $89
billion. They offered that as an amendment on the floor too. So we
basically agree on the amount of cuts on hospitals.
Then they said, ``Republicans are trying to raise premiums on part B
beneficiaries, the doctor portion.'' What do we really do? We keep the
premium rate at 31.5 percent of program costs. That is what the
beneficiaries pay today. That is fair; that is reasonable. The program
started out at 50 percent. Keeping it at 31.5 percent, I think, is
fair.
Do premium costs increase? Yes, but they increase under the
President's proposal too. As a matter of fact, the President's increase
in part B premiums follow right along with ours. There is only, I
think, a $5 difference in the year 2002 in premiums. What he did not
tell people is, ``Present law goes down to 25 percent, and I am going
to take credit for that and really lambaste and demagog the
Republicans.''
The fact is, keeping premium levels at 31.5 percent is fair. We also
say wealthier people should pay a little more. We should not be asking
everybody who is making $20,000 to be subsidizing wealthier people on
their part B premium.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. NICKLES. I ask unanimous consent for 2 additional minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. NICKLES. We also made some tax changes that are fair to American
families. I have heard a lot of colleagues say, ``Well, that's not
fair.'' The heck it is not. We are giving tax relief to individuals and
families who have kids, a $500 per child tax credit. Somebody says that
does not mean very much. Well, I disagree. I only have one child now
who would qualify, because they have to be under the age of 18. I used
to have four kids who would qualify.
A lot of American families need help. Four kids is $2,000 in tax
relief. That is targeted toward the American family. That will help. An
individual or couple who has two kids gets $1,000. That is $1,000 that
they get to spend on themselves instead of sending it to Washington,
DC, to have politicians spend on a multitude of items.
It is the idea that they can choose. They may want to spend it on
education or a home or transportation or to buy food or pay utilities.
We want to let families make that decision, not the Government.
We have targeted the bulk of tax relief to American families. We did
it with the inheritance tax; we did it with the child credit; we did it
with IRA savings accounts; we did it with medical savings accounts.
Mr. President, I think this is a balanced package, it is a good
package, and it is the only package we have before us that will balance
the budget.
We said we were going to do it. We are going to do it. I think what
we are doing is vitally important. I thank the manager of the bill and
I yield the floor.
Mr. EXON addressed the Chair.
The PRESIDING OFFICER (Mr. DeWine). The Senator from Nebraska.
Mr. EXON. Mr. President, I yield 15 minutes to the Senator from
Massachusetts.
Mr. KERRY. I thank the Chair and the distinguished minority manager
of the bill.
Mr. President, I just heard one speaker say that this will be the
most important vote in the Senate in 15 years. I respectfully disagree.
I think the most important vote in the Senate in 15 years will be the
vote when we return with a reconciliation package that has been
negotiated and which fairly reflects the administration, the minority
and the majority in the Senate, as an expression of all of our desires
to balance the budget. That will be the most important vote. But I do
not want to quibble or deny the notion that this is not an important
statement.
I would like to say that, from at least this Senator's perspective,
our colleagues on the other side of the aisle deserve credit. I think
it is appropriate for us to talk more honestly about what is at stake
here and, perhaps, depart from some of the partisan rhetoric, though it
is hard because of the circumstances.
The fact is that the majority is proving what many of us said as we
opposed the balanced budget amendment. What we said was that we do not
need an amendment, we simply need legislators with the courage to
balance the budget. And indeed, the Republicans have picked up that
challenge and they deserve credit for having returned to the floor with
a budget that, in their view, expresses their values and their
direction for the country.
So they are offering a balanced budget. Regrettably, their choices,
which are more unilateral than most of us would have hoped we would
arrive at because in effect it represents exclusively the Republican
House and Republican Senate to the exclusion of most of the efforts of
the rest of us. Theirs is a statement of values. Their budget sets
forth the Gingrich-Republican view of how America ought to be. And the
fact that some of us oppose that view does not mean that we oppose
coming to the floor and voting for a balanced budget.
I will vote ``no'' on this view of America, with the hopes that after
the President has vetoed it we will return with a more compromised,
centrist, and hopefully more diverse, shared view of where this country
should go in this important statement of a budget.
It is my hope that many of us who want to balance the budget and do
it responsibly, with a fair reflection of the values of this country,
will have an opportunity to do so after the real negotiations take
place.
Mr. President, I have already voted for a balanced budget. It was the
so-called Conrad plan. It was a plan that I did not agree with every
part of, but I think it was far more fair than the plan or any other
plan that we have had on the floor. It was a plan that gave tax breaks
to middle-class working families. It closed tax loopholes, reduced
corporate welfare. But instead, in this plan we are now confronted
with, contrary to the fairness that we tried to achieve previously, the
Republicans are raising $32 billion worth of taxes from Americans
earning less than $30,000 a year.
I voted for a balanced budget plan that was honest about the need to
do something about Medicare. I agree with my colleagues. There has been
a lot of heightened rhetoric about it. The truth is that we have to
restrain the growth on entitlements generally, and we have to retain
the growth particularly in Medicare and Medicaid the fastest-growing
portions of the budget. I voted for a budget, Mr. President, that was
fair in what it asked seniors to do in sharing that burden. It saved
the Medicare plan without cutting twice as much as we need to, twice as
much as is currently reflected in this budget. I voted for a
commonsense reduction in Medicare to save the system. The Republicans
are essentially, in order to give a tax cut, taking the heart out of
Medicare with the $270 billion reduction.
I voted, Mr. President, for a balanced budget that would preserve
access to health care for those people with disabilities, for pregnant
women, and for children. While we reduced--in our budget--Medicaid by
about $125 billion, the Republicans have come to the floor with a
budget that reduces it by $182 billion over 7 years.
I voted for a balanced budget that invested in our children's
education. It saved educational access, vital for job growth and
competitiveness. But the Republicans now want to cut student loan
programs by more than $5 billion, at a time when it is harder and
harder for average Americans to send their kids to college. They also
are going to wind up taking 1.8 million kids off of student loan rolls,
and reducing by 1,250 the number of colleges that can participate in a
direct lending plan. That is good for banks, Mr. President, but it is
not good for students or for our colleges.
I voted for a balanced budget that would feed hungry children in this
country, and it added back more than half of the funds for food and for
children. But instead the Republicans are going to slash $46 billion
over the next 7 years that would leave literally millions of children
hungry in this country.
I voted for a balanced budget that would honor the service of
veterans, not leave them scot-free, because we did in our budget reduce
veterans' payments by about $5 billion, but the Republicans want to
recklessly cut those

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programs in a way that may close 35 of 170 hospitals, and certainly
five next year.
Mr. President, this budget process is the truest statement about any
party's priorities or any individual's sense of what is fair. The
bottom line is that this budget is about people. With this Republican
budget tonight, they reverse some 60 years of a certainty that was
built into the fabric of the American political structure--a certainty
that our senior citizens would not grow old and be left with nothing--a
certainty that families would be part of a community and that we would
care for people, even if they were in the street, even if they were
suffering or in need of help.
I wonder whether this budget is really representative of what America
has become in 1995, because if it is, then I think this Senate will
long be remembered as the Senate that took away the good part of the
certainty of American life, not the bad part, not the part that we know
with respect to welfare and other programs has distorted values. I am
talking about the good part, the part that allowed people to lift
themselves up by their bootstraps, that allowed people in a nursing
home to not have to get rid of every cent they had in order to stay
there, the part that guaranteed that we are not going to suddenly have
seniors strapped into wheelchairs again because nursing home standards
are lifted. Those were certainties that we built into American life.
This budget takes away those certainties, Mr. President. With this
budget, thousands and thousands of women and children, our fellow
citizens, thousands of families, thousands of seniors, who are
struggling to pay for food or pay for health care, or simply meet the
rent or save something for the future, they will be hurt. As my friend
from North Dakota pointed out, they will be hurt in juxtaposition to
countless millions of people who do not need that help, who will be
helped.
This budget violates everybody's fundamental sense of fairness, Mr.
President. And that is something that we ought to care about as we care
about the fabric of values and of life in this country.
There will, as a result of this budget, no longer be a certainty in
America that children will not go hungry. There will no longer be a
certainty that an elderly widow in a Massachusetts hospital will not
lose everything that she has. There is no longer a certainty that their
children, who are already struggling, getting more and more behind,
will be able to pay for her care without jeopardizing their future.
There is no certainty in this budget that American children will get
a better shot at a decent education or a better shot at a job, and
there is no certainty that a pregnant mother or a disabled veteran will
get the helping hand that we have always promised.
There is not even the certainty that our drinking water will get
cleaner or our wilderness will be protected or that toxic waste will be
cleaned up or that we will hand down to our children a better country,
Mr. President.
I think the least we can do in a budget is express our responsibility
to protect the certainties that those who came to this floor before us
fought for.
I can only say to my colleagues who tell us this budget is a sure
thing that in the words of Robert Burns, ``There is no such uncertainty
as a sure thing.''
This budget will create uncertainties, uncertainties with respect to
the environment, uncertainties with respect to people's capacity to
strive to make the best of their own opportunities to get an education,
to try to touch the new marketplace.
Mr. President, there is an enormous giveaway to mining companies in
this budget. There is oil drilling in the Arctic National Wildlife
Refuge. There are water subsidies to America's largest agricultural
corporations. There is a royalty exemption from oil leases in the Gulf
of Mexico. There are lots of little goodies in this budget which do not
speak to the issue of fairness in this country.
I might just say, Mr. President, with respect to some of the most
important things we hear talked about on the Senate floor, values with
respect to children, this budget is not friendly.
We have heard a lot of talk about the number of children who are born
out of wedlock, the number of kids who desperately need an opportunity
through Head Start, or who desperately need a hot lunch. This budget
creates an enormous shift of wealth from those who are at the lower end
struggling to make ends meet and working families, not people on
welfare but working families, and it takes that wealth from those
struggling and gives it to people at the upper end who do not need it.
Mr. President, in the name of fairness, I am pleased that the
President has said he will veto this budget. The most important vote
will be the vote that occurs after we have the negotiations that will
take place in the next weeks, and I hope it will not take longer than
weeks. It is my fervent plea in the course of that process more voices
of America be heard and reflected in our budget.
Again, I say, Mr. President, there are many on this side of the aisle
who looked forward to the ability to be able to help shape that
process. It is our hope we will join together around reasonable
figures, perhaps some combination of CBO or OMB--figures that are
reasonably arrived at and reflect the future economic growth of this
country, and that we will use those figures to come up with an
intelligent budget that all of us can take to America as we ask people
to share the sacrifices necessary to balance the budget.
It is my hope that day will come soon. That will be the most
important vote in the U.S. Senate. I yield back my remaining time to
the Senator from North Dakota.
Mr. CONRAD. Mr. President, this is a critically important debate. It
ought to be informed, I think, by fact and reason and by law.
Mr. President, we have heard a lot of talk that what we have before
us is a balanced budget. The fact is, the law says something different.
The law says we do not have a balanced budget before the Senate.
That is because if you look at subtitle C of Social Security, the
off-budget status of Social Security trust funds, it makes very clear
that Social Security surpluses are not to be included in any
calculation of the deficit.
The only way the Republican plan achieves balance is to use every
penny of Social Security surplus generated between now and the year
2002 --$636 billion of Social Security surplus funds will be raided so
that the Republicans can claim their plan is balanced.
Mr. President, this is not just my view. This is, in fact, the
certification from the Congressional Budget Office. We have been
through this debate before, and on October 20, Senator Dorgan and I
asked the head of the CBO, if we follow the law, a law that 98 Senators
voted for, and excluded Social Security surpluses, what would the
deficit look like in 2002 under the Republican plan?
The head of the CBO responded by saying the deficit in 2002 under the
plan presented would be $105 billion.
In the conference committee that number has grown. We now have a
deficit in the year 2002 under this plan, if we obey the law, of $111
billion. I think it is important to make that point for the record.
This chart shows the looting of the Social Security trust fund that
will go on during this period, from 1996 to 2002. These are the yearly
totals that will be taken of Social Security surplus funds. This is the
total over the 7-year period--$636 billion.
Mr. President, we have heard from the other side assertions that the
Democrats have no alternative balanced budget plan. It makes me wonder
where some of our colleagues have been. We have had a series of
alternatives offered on the floor of the Senate.
The one I was most deeply involved in was the Fair Share balanced
budget plan we offered during the budget resolution. It was an honest
balanced budget plan but with a substantially different set of
priorities than those contained in the Republican plan.
Let me talk about some of the differences. The Fair Share Plan
balanced the budget, without counting Social Security surpluses, by the
year 2004--9 years without counting any Social Security surpluses. It
produces more deficit reduction in 2002 than the Republican plan.
In fact, the Fair Share Plan that 39 Democrats in this body voted for
had $100 billion more in deficit reduction than the Republican plan.

[[Page S 17257]]

At the same time, it had a substantially different set of priorities
than the Republican balanced budget plan. The Democratic balanced
budget plan restored $100 billion of the $270 cut in Medicare.
I know many on the other side of the aisle have said they are not
cutting Medicare. I ask them this simple question: If they are not
cutting Medicare, how is it that they have achieved $270 billion of
savings from what current law provides in Medicare? How can it be, if
they have not cut anything, that they have saved $270 billion over the
next 7 years? Of course they have cut. They have cut in quality and
service what our seniors will receive through that program.
Some say, ``I hear the Republicans saying they are spending more
money on Medicare.'' Yes, that is true. They are spending more money.
Of course they are spending more money. There is 7 years of medical
inflation that has to be covered. Medical inflation is growing at three
times the rate of normal inflation.
In addition, there are 5 million new people who are going to be
eligible for Medicare during this 7-year period. So of course they have
to spend more.
But the fact is, they are not spending as much more as would be
required in order to provide the same level of quality and services as
the current program provides. That is why they have $270 billion of
savings out of the Medicare Program. But those savings are going to
mean less quality, less service to seniors than the services and
quality of service they receive now.
In addition, the draconian changes that the Republicans have proposed
for Medicare are going to mean we are going to have rural hospitals all
across America forced to close. In my own State, the hospital
association tells me 26 of the 30 rural hospitals are going to negative
margins on their Medicare-eligible patients. Of course, most of their
patients are Medicare eligible. That means many of those hospitals will
be forced to close. That is the harsh reality of what is being proposed
here.
Do we need to generate savings out of Medicare in order to balance
the budget over 7 years? Absolutely. But $270 billion of reductions is
too much. It is draconian. It is extreme. It will have severe
consequences.
The plan that 39 Democrats voted for restored $100 billion of the
$270 billion of cuts in the Republican plan. In addition, we restored
about $40 billion of the cuts to Medicaid. Let me just indicate, we now
have a new analysis from Consumers Union that indicates we are going to
see 12 million people lose their medical coverage because of the
serious reductions to the Medicaid Program provided for in this
Republican plan.
Education? The plan that 39 Senate Democrats voted for did not cut
education. We did not have a dime of cuts in education because we
believe education is the future. If there is one place that should not
be cut it is those funds that make it more possible for people to
develop their full potential through education and all of the
opportunities that education creates, not only for the individual but
for all of the rest of us who benefit from what people are able to
achieve who have gotten as much education as they possibly can.
Nutrition and agriculture? We restored $24 billion in order to have
less of a cut to food programs and to agriculture programs. Let me just
say with respect to agriculture, the Republican program is to indicate
they are going to kill all agriculture programs after 7 years. They
have now come forward and admitted what their plan really is. We will
not have an agriculture program after 7 years. They are destroying the
foundation of the agriculture programs of this country by ending the
authorization that exists in law that has been there since 1938.
Let me just say, the Republican plan for agriculture is not a plan
for American farmers. It is a plan for the French farmer. It is a plan
for the German farmer. It is a plan for the farmers of every country
with whom we compete, because that is who is going to benefit from the
Republican farm plan.
One of the ways we were able to have a balanced budget that 39
Democrats voted for and to be able to restore some of the draconian
spending cuts contained in the Republican plan, was to eliminate tax
cuts. We did not have any tax cuts. Because under the Republican plan,
disproportionately those tax reductions go to the wealthiest among us.
I just do not think it makes much sense to say to somebody who is in
the top 1 percent of income earners in this country, you get a $10,000
tax reduction, but if you are somebody who is earning less than $30,000
a year who qualifies for earned-income tax credit, you are going to get
a tax increase.
Mr. President, 7.7 million families in America under the Republican
plan are going to get a tax increase. Those who are at the top of the
income ladder, the top 1 percent on average are going to get a $10,000
tax cut. I do not know how they justify it. It is not my idea of
targeted tax relief. But that is in this plan.
Finally, in the Fair Share plan that 39 Senate Democrats voted for,
we asked the wealthiest among us to participate in this battle to
reduce the budget deficit. We asked them to curtail the growth of the
tax entitlements that they primarily benefit from. If we are going to
reduce the growth of the spending entitlements, and we must, then why
not reduce the growth of the tax entitlements, $4 trillion of tax
entitlements? It is the biggest single pot of money in the whole
Federal budget.

This chart shows entitlement spending from 1996 to 2002. Tax
entitlements, $4 trillion--much bigger than the next biggest
entitlement, Social Security. That is nearly $3 trillion over the next
7 years. Medicare is $2 trillion over the next 7 years, and Medicaid is
about $1 trillion. But the biggest one of all is the tax entitlements,
the tax preferences, the tax loopholes.
We say if we are going to reduce the rate of growth of the spending
entitlements, let us reduce the rate of growth of the tax entitlements
as well. Let us reduce that growth to inflation plus 1 percent.
Our friends on the other side say there is no tax entitlement, no tax
preference, no tax loophole that we want to close. We want to keep them
all. We think they are all valid. We think they are all essential.
We, on our side of the aisle, do not.
Mr. President, these are critical issues that will be decided for the
first time tonight. But I think we should all remember, the President
is going to veto this bill, as he should, and then the real debate is
going to begin. Then the real discussion, the real negotiation will
start.
One of the key issues will be, should we really be providing a tax
cut when we are adding $1.8 trillion to the debt under this Republican
plan? That is what is going to happen. We have $5 trillion of debt now.
Under this plan, we are going to add another $1.8 trillion, which means
every penny of this tax cut is going to have to be borrowed money.
Does that make sense to anybody in this country? We have to borrow
money in order to give a tax cut? Give a tax cut when we are adding
$1.8 trillion to the debt? I thought the idea was to eliminate the
growth of the debt, to reduce the growth of the debt. Why do we add to
it?
Mr. President, I think one of the things we have to start focusing on
is what is happening to the distribution of wealth in America, because
what we have seen is a dramatic change. In 1969, the top 1 percent of
households in America held about 20 percent of the wealth. In 1979, the
top 1 percent had increased their share of the wealth of America to 30
percent. In 1989, the top 1 percent of the income earners in this
country held nearly 40 percent of the wealth of this country.
The other side accuses those of us on this side of wanting to
redistribute the wealth. Let me just say, our friends on the other side
of the aisle are the champions at wealth redistribution. But their idea
is to redistribute the wealth upwards, upwards in our society. The
history of that kind of concentration of wealth is very clear. It leads
to political instability and it leads to trouble. We should not allow
that to occur.
U.S. News, in this quote from David Gergen, says:

U.S. News & World Report reported last week . . . that the
lowest 20 percent of the population would lose more income
under these spending cuts than the rest of the population
combined. At the other end, the highest 20 percent would gain
more from the tax cuts than everyone else combined.

He goes on to say:

[[Page S 17258]]

[N]o one disputes the basic contention that the burdens and
benefits are lopsided. In a nation divided dangerously into
haves and have-nots, this is neither wise nor justified.

Mr. President, David Gergen has it right, but he is not alone in this
observation.
I will share with you the final part of my presentation, the
observation of Kevin Phillips, Republican political analyst, who said:

If the budget deficit were really a national crisis instead
of a pretext for fiscal favoritism and finagling, we'd be
talking about shared sacrifice, with business, all industry
and the rich, people who have the big money, making the
biggest sacrifice. Instead, it's the senior citizens, it's
the poor, students, and ordinary Americans who'll see
programs they depend on gutted while business, finance,
and the richest 1 or 2 percent, far from making
sacrifices, actually get new benefits, and tax reductions.
The PRESIDING OFFICER. The Chair advises the Senator that his time
has expired.
Mr. CONRAD. I thank the Chair. I yield the floor.
Mr. ABRAHAM addressed the Chair.
The PRESIDING OFFICER. The distinguished Senator from Michigan is
recognized.
Mr. ABRAHAM. Mr. President, I yield 7 minutes to the Senator from
Georgia.
Mr. COVERDELL. I thank the Senator from Michigan.
Mr. President, if I might, I would like to pause for just a minute to
comment on this historic moment and the opportunity to vote for the
first balanced budget concept in over three decades and to outline the
predicament, or the situation, that has prompted these actions on the
part of the majority in the 104th Congress.
The bipartisan Entitlement Commission reported to the Congress and
the President earlier this year that, without change, without
modification, the totality of all U.S. resources will be exhausted by
but five programs. Those five programs are Social Security, Medicare,
Medicaid, Federal retirement, and the interest on our debt. And by the
year 2006, which is not long--less than 10 years--there will not be
enough resources to debate many of these programs we are responsible
for in America. We will not be debating the School Lunch Program. There
will not be one.
Five programs take all U.S. revenues, and in but 10 years--Social
Security, Medicare, Medicaid, Federal retirement, and just the interest
on our debt--and there is nothing left to fulfill the responsibilities
of this great democracy to its own citizens and to the world.
The solution to avoid that predicament is to move to balanced
budgets. All America knows this. It just seems that people in
Washington are late arriving at the conclusion.
These balanced budgets that have been fashioned by the Budget
Committee and the Finance Committee are absolutely mandatory to avert
the disaster that is but 10 years away. The balanced budget deals with
all but one of these problems. It, obviously, by balancing itself,
quits adding debt and, therefore, lowers the interest payments. It
begins to restructure Medicaid and send it to the States for more
efficient management. It takes Medicare, which is destined to go
bankrupt in but 6 years according to the President's own trustees, and
restructures it in a way to guarantee solvency for a quarter of a
century.
What a relief that must be to all the beneficiaries of Medicare to
understand that these changes will give them more choices, but, more
importantly, give them a program that is solvent for a quarter of a
century.
It begins to deal with the subject of Federal retirement. And Social
Security is not dealt with directly, but I would say indirectly it is,
because it has engaged the Nation in the discussion of entitlements and
their solvency and their future.
Mr. President, what are the benefits if the Nation seizes the
responsibility of managing its financial affairs? They are just
stunning. The average family in America will see the interest payment
on its mortgage drop dramatically. It would save the average family
which makes about $40,000 a year $1,000 a year on their mortgage. It
would save the average family $180 a year on the car payment interest
payments. It will save the average family another $200 a year because
of all the other debt that they carry. If the average family has two
children, it will have $1,000 removed of tax liability.
The bottom line here, Mr. President, is that the average family in
America will have $2,000 to $3,000 of new disposable income in their
hands instead of Washington's so that they can make choices about
education, housing, and the health of their own families.
I have mentioned Ozzie and Harriet more than once here. When Ozzie
was the quintessential family, he sent 2 cents of every dollar to
Washington. If he were here today, he would be sending 24 cents of
every dollar to Washington. We have marginalized the average family
because of the tax pressures and tax burden. The most important thing
we can do is lighten that financial burden on those families, give them
options, and give them the opportunity to deal with the responsibility.

As I have listened to the debate, my good friend, the Senator from
Nebraska, seems to feel that it is best for Ozzie to send the money
here, and for us to decide what is good or not for their family. Wrong.
Wrong. They want the opportunity to make the decisions about what is
best for their families.
Under this proposal, the families of 51 million American children, or
28 million tax-paying families, are eligible for the $500 per child tax
cut. Under this proposal, 3\1/2\ million families will have over $2.2
billion in tax relief. Millions of American families will be taken off
the tax rolls altogether.
What is the President's response about balancing the budget? First
and foremost, he opposed the balanced budget amendment. Secondarily, he
said he would balance the budget in 5 years when he ran for President.
That is a long-forgotten promise. Then he said he would send us a
balanced budget in 10 years. And by everybody's estimate, that budget
never balances. And when it was put to a vote in this Senate, it failed
100 to nothing. How much more discredited could a budget proposal be?
Mr. President, I yield the floor with this conclusion. This whole
battle is about balancing the budget. This new Congress wants to do it.
The President does not. America should tell the President now is the
time to balance our budget.
I yield the floor.
Mr. EXON. Mr. President, I yield 2 minutes to the Senator from Rhode
Island.
Mr. PELL. Last week, the National Goals Panel issued an extensive
report on the progress American schools are making towards meeting the
national goals. That report was a mixed one. We have made gains in
areas such as mathematics achievement and making sure that our children
enter school ready to learn. In other areas, such as reading
achievement and teacher preparation, we are only holding our own. And
in some areas, most notably safe and drug free schools, our problems
appear to be growing.
In my opinion, there is a clear conclusion we can draw from this
report. This is not the time to either relax or diminish the small, but
critical Federal role in education. Quite to the contrary, it is time
to strengthen our commitment if we are to sustain the gains we have
made, move off of dead center in other areas, and reverse the decline
in still others.
Most clearly, this is not the time to have the largest education cut
in our history. It is not the time to risk a 30-percent cut in Federal
education spending over the next 7 years. It is not the time to freeze
the title I program and halt progress in basic skills achievement. It
is not the time to cut spending on education reform. And, it is
definitely not the time to reduce our commitment to safe and drug free
schools.
With respect to higher education, I believe deeply that we should not
put our student aid programs at risk. Yet, that is precisely what the
Republican budget does. If we cut education by more than 30 percent
over the next 7 years, it is clear that every education program will be
in harm's way. We have already engaged in a hard-fought battle to
protect students and their families from cuts in the guaranteed student
loan program, and I am pleased that in large part, we have been
successful.
While I had reservations about the Direct Loan Program when it was
originally proposed, I am encouraged by how well the program has
operated

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in its initial stages. Students are getting their loans more quickly
and with less problems. The competition between direct lending and the
regular guaranteed loan programs has also produced dramatic
improvements in the private sector program. Because of this, I believe
it unwise to move back and place a 10 percent cap on direct lending.
This would mean that between two-thirds and three-fourths of current
direct lending schools would be dropped from the program, and to my
mind, that would be most unfortunate.
I also fear that we will face difficult battles with respect to our
other student aid programs, and that Pell grants, supplemental grants,
Perkins loans, college work study, and the TRIO programs could well be
placed on the chopping block.
Mr. President, education is a capital investment in our future. The
climb up the economic ladder for American after American is directly
related to their level of educational achievement. Every study we know
shows a correlation between an educational attainment and an increase
in income. If we pull back on education, we pull back on the American
people. That is not the direction in which we should be moving.
I agree wholeheartedly with President Clinton when he says that,
today, we face both a budget deficit and an education deficit, and that
both must be addressed.
I favor reducing the budget deficit. I do not favor doing it on the
backs of senior citizens, the unfortunate in our society, our children
who need a good, solid general education, or our students and families
who are already hard-pressed to make ends meet in paying for a college
education.
In my view, one of the best ways we can reduce the budget deficit is
through a strong and vibrant economy driven by a well-educated, well-
trained work force. It is time that we increased our investment in
education. It is not a time for retreat.
Mr. President, it is time to calm the shrill voices of partisanship
that have echoed through our Chamber. It is time to move away from the
abyss of brinkmanship. It is time for all parties to come together, and
to fashion a budget that enjoys wide bipartisan support. For comity to
be practiced. And most of all, it is time that we got on with governing
in a way that the American people can respect.

student loan provision

Mr. President, I want to call to my colleagues' attention and call
into question an important student loan provision included in the
budget reconciliation conference agreement reached by the majority
without the involvement of the minority.
This provision with which I am concerned requires State guaranty
agencies to use 50 percent of their reserves to purchase defaulted
loans. Once purchased, the agency has 180 days before it can submit
claims for reimbursement. The idea is that this will allow additional
time to bring defaulters into repayment, thus decreasing the total
amount of claims for reimbursement.
There are at least two problems with this provision. First, it
appears to assume that these reserves are the property of the State
guaranty agency and not the Federal Government. If that is the case, we
may well be relinquishing any claim for almost $1 billion in
outstanding and quite possibly excess reserves that are Federal
property and could be returned to the Federal Government to produce
savings in the guaranteed student loan program.
If we assume they are not the property of the State guaranty agency,
then we are simply permitting Federal funds to be used to purchase
defaulted loans guaranteed by the Federal Government in the first
place. If this is the case, we will be engaging in a shell game that
produces illusory savings.
Second, the provision allows defaulted loans that are purchased with
these funds to be considered reserves. This diminishes the required
reserve ratio, also reduced in this legislation, used to help determine
whether or not an agency is strong and solvent. It would quite possibly
allow an otherwise bankrupt agency to use defaulted loans as assets to
meet the decreased reserve ratio. To my mind, this is not good public
policy.
Further, in my view, it is difficult, under any circumstance, to see
how a defaulted loan can be construed as an asset. This is potentially
bad paper. We may never be able to collect the debt, and yet under this
provision, Federal law would decree that a defaulted loan, a debt, is
an asset.
Requiring agencies to purchase defaulted loans with reserves that may
or may not be their property is a roll of the dice. They may well be
bad investments with minimal chance of collection. To say that they
should be considered assets is, to my mind, very unwise. And, to take
the chance that they also take reserves out of the reach of the Federal
Government is equally imprudent.
Also, I am concerned that during the 180-day period that State
guaranty agencies hold the defaulted loans, the Federal Government may
well continue to pay special allowance and other interest payments on
these loans. I wonder whether or not this produces an unwarranted
windfall for these agencies by giving them income on a defaulted loan.
Finally, I would point out that had we had the opportunity to be
involved in the budget reconciliation negotiations between the House
and Senate, this would have been pointed out at the staff level.
Unfortunately, for the first time in seven reconciliation and budget
reduction conferences involving the guaranteed student loan program,
the minority was not permitted to come to the table and make its case.
This is an unfortunate departure from the bipartisanship that has been
the traditional practice in education, and in this instance, I am
afraid it has resulted in a highly questionable provision.

submitting changes to the budget resolution revenue allocations

Mr. DOMENICI. Mr. President, upon the submission of a conference
report on a reconciliation bill, section 205(b) of House Concurrent
Resolution 67 requires the chairman of the Senate Budget Committee to
appropriately revise the budgetary allocations and aggregates to
accommodate the revenue reductions in the reconciliation bill
conference report.
Pursuant to section 205(b) of House Concurrent Resolution 67, the
1996 budget resolution, I hereby submit revisions to the first- and
five-year revenue aggregates contained in House Concurrent Resolution
67 for the purpose of consideration of H.R. 2491, the Balanced Budget
Act of 1995, and ask unanimous consent that the revisions be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

------------------------------------------------------------------------
1996 1996-2000
------------------------------------------------------------------------
Current revenue aggregates.. $1,042,500,000,000 $5,691,500,000,000
Revised revenue aggregates.. 1,036,780,000,000 5,543,726,000,000
------------------------------------------------------------------------

The Congressional Budget Office has reviewed the conference report on
H.R. 2491, and has certified that the enactment of the Balanced Budget
Act of 1995 would produce a small budget surplus in 2002.
Mr. EXON. Mr. President, I believe that the majority's desire to
include tax breaks in this bill has caused two points of order to lie
against this bill.
It has long been my belief that the tax breaks have been the tail
that has wagged this dog of a budget. They have driven the majority to
make extreme cuts in Medicare and education.
And their desire for tax breaks for the wealthy has also driven the
majority to jump through some pretty high procedural hoops. I hope to
demonstrate over the next few minutes that the majority has abused the
budget reconciliation process and violated the conditions of the budget
resolution to pave the way for these misguided tax breaks.
The budget resolution that created this budget reconciliation bill
provided that the majority could cut taxes if and only if two
conditions were met: One, they had to balance the budget in 2002. And,
two, the reconciliation legislation had to ``compl[y] with the sum of
the reconciliation directives for the period of fiscal years 1996
through 2002'' in the budget resolution. These two conditions are
plainly spelled out in section 205 of the budget resolution. I ask
unanimous consent that the full text of section 205 of the budget
resolution be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[[Page S 17260]]

SEC. 205. BUDGET SURPLUS ALLOWANCE.

(a) CBO Certification of Legislative Submissions.--
(1) Submission of legislation.--Upon the submission of
legislative recommendations pursuant to section 105(a) and
prior to the submission of a conference report on legislation
reported pursuant to section 105, the chairman of the
Committee on the Budget of the Senate and the House of
Representatives (as the case may be) shall submit such
recommendations to the Congressional Budget Office.
(2) Basis of estimates.--For the purposes of preparing an
estimate pursuant to this subsection, the Congressional
Budget Office shall include the budgetary impact of all
legislation enacted to date, use the economic and technical
assumptions underlying this resolution, and assume compliance
with the total discretionary spending levels assumed in this
resolution unless superseded by law.
(3) Estimate of legislation.--The Congressional Budget
Office shall provide an estimate to the Chairman of the
Budget Committee of the Senate and the House of
Representatives (as the case may be) and certify whether the
legislative recommendations would balance the total budget by
fiscal year 2002.
(4) Certification.--If the Congressional Budget Office
certifies that such legislative recommendations would balance
the total budget by fiscal year 2002, the Chairman shall
submit such certification in his respective House.
(b) Procedure in the Senate.--
(1) Adjustments.--For the purposes of points of order under
the Congressional Budget Act of 1974 and this concurrent
resolution on the budget, the appropriate budgetary
allocations and aggregates shall be revised to be consistent
with the instructions set forth in section 105(b) for
legislation that reduces revenues by providing family tax
relief and incentives to stimulate savings, investment, job
creation, and economic growth.
(2) Revised aggregates.--Upon the reporting of legislation
pursuant to section 105(b) and again upon the submission of a
conference report on such legislation, the Chairman of the
Committee on the Budget of the Senate shall submit
appropriately revised budgetary allocations and aggregates.
(3) Effect of revised allocations and aggregates.--Revised
allocations and aggregates submitted under paragraph (2)
shall be considered for the purposes of the Congressional
Budget Act of 1974 as allocations and aggregates contained in
this resolution.
(c) Contingencies.--This section shall not apply unless the
reconciliation legislation--
(1) complies with the sum of the reconciliation directives
for the period of fiscal years 1996 through 2002 provided in
section 105(a); and
(2) would balance the total budget for fiscal year 2002 and
the period of fiscal years 2002 through 2005.

Mr. EXON. Section 205 of the budget resolution gives the majority the
authority to lower the revenue floor in the budget resolution. Without
section 205, the majority would violate the revenue floor in the budget
resolution by including tax cuts in this bill.
But the facts are that the conference report before us today fails to
meet the two conditions in section 205 for including tax cuts. The
budget resolution directed committees to come up with $632 billion in
deficit reduction over the next 7 years in order to be allowed to
include tax cuts in this bill. The bill before us includes only $577
billion in spending cuts, plus $3.7 billion in revenue increases in the
jurisdiction of a committee with instructions to increase revenues, for
a net of $581 billion in deficit reduction.
That is $51 billion short of the amount committees were instructed to
achieve by the budget resolution. The bill is thus $51 billion short of
the amount necessary to allow the chairman of the Budget Committee to
lower the budget resolution's revenue floor to allow for the tax
breaks.
As a consequence, the tax cuts cause this bill to violate the budget
resolution's revenue floor.
Therefore, Mr. President, a point of order should lie against this
conference report because it violates section 311(a) of the
Congressional Budget Act of 1974.
Mr. President, I ask unanimous consent that the full test of the CBO
cost estimate on this bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Congress,

Congressional Budget Office,

Washington, DC, November 16, 1995.
Hon. Pete V. Domenici,
Chairman, Committee on the Budget, U.S. Senate, Washington,
DC.
Dear Mr. Chairman: The Congressional Budget Office has
reviewed the conference report on H.R. 2491, the Balanced
Budget Act of 1995, and has projected the deficits that would
result if the bill is enacted. These projections use the
economic and technical assumptions underlying the budget
resolution for fiscal year 1996 (H. Con. Res. 67), assume the
level of discretionary spending indicated in the budget
resolution, and include changes in outlays and revenues
estimated to result from the economic impact of balancing the
budget by fiscal year 2002 as estimated by CBO in its April
1995 report, An Analysis of the President's Budgetary
Proposals for Fiscal Year 1996. On that basis, CBO projects
that enactment of the reconciliation legislation recommended
by the conferees would produce a small budget surplus in
2002. The estimated federal spending, revenues and deficits
that would occur if the proposal is enacted are shown in
Table 1. The resulting differences from CBO's April 1995
baseline are summarized in Table 2, which includes the
adjustments to the baseline assumed by the budget resolution.
The estimated savings from changes in direct spending and
revenues that would result from enactment of each title of
the bill are summarized in Table 3 and described in more
detail in an attachment.
Sincerely,
June E. O'Neill,
Director.

TABLE 1.--CONFERENCE OUTLAYS, REVENUES, AND DEFICITS
[By fiscal year, in billions of dollars]
----------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Outlays: Discretionary............. 534 524 518 516 520 516 515
----------------------------------------------------------------------------
Mandatory:
Medicare \1\................... 196 210 217 226 248 267 289
Medicaid....................... 97 104 109 113 118 122 127
Other.......................... 506 529 555 586 618 642 676
----------------------------------------------------------------------------
Subtotal..................... 799 843 881 925 984 1,031 1,093
============================================================================
Net interest....................... 257 262 261 262 260 254 249
----------------------------------------------------------------------------
Total outlays................ 1,590 1,629 1,660 1,703 1,764 1,801 1,857
============================================================================
Revenues........................... 1,412 1,440 1,514 1,585 1,665 1,756 1,861
Deficit............................ 178 189 146 118 100 46 -4
----------------------------------------------------------------------------------------------------------------
\1\ Medicare benefit payments only. Excludes medicare premiums.

\2\ Notes.--The fiscal dividend expected to result from balancing the budget is reflected in these figures.
Numbers may not add to totals because of rounding.

\3\ Source.--Congressional Budget Office.

TABLE 2.--CONFERENCE BUDGETARY CHANGES FROM CBO'S APRIL BASELINE
[By fiscal year, in billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total 1996-
1996 1997 1998 1999 2000 2001 2002 2002
--------------------------------------------------------------------------------------------------------------------------------------------------------
CBO April baseline deficit \1\................................ 210 230 232 266 299 316 349 *
Baseline adjustments: \2\
CPI rebenchmarking \3\................................... 0 0 0 -1 -3 -6 -9 -18
Other adjustments \4\..................................... 1 1 1 2 2 1 1 10
-----------------------------------------------------------------------------------------
Subtotal................................................ 1 1 1 1 -1 -4 -8 -9
=========================================================================================

[[Page S 17261]]

Policy changes:
Outlays: Discretionary \5\
Freeze \6\............................................ -8 -9 -12 -35 -55 -75 -96 -289
Additional savings.................................... -10 -21 -27 -24 -20 -24 -25 -151
-----------------------------------------------------------------------------------------
Subtotal............................................ -18 -29 -39 -59 -75 -99 -121 -440
=========================================================================================
Mandatory:
Medicare.............................................. -7 -14 -27 -42 -49 -60 -71 -270
Medicaid.............................................. -2 -6 -13 -21 -30 -40 -50 -163
Other................................................. -8 -18 -20 -24 -25 -24 -25 -144
-----------------------------------------------------------------------------------------
Subtotal............................................ -17 -38 -60 -87 -104 -125 -146 -577
=========================================================================================
Net interest.................................................. -1 -4 -8 -15 -25 -39 -58 -150
-----------------------------------------------------------------------------------------
Total outlays........................................... -36 -71 -107 -161 -203 -263 -325 -1,167
=========================================================================================
Revenues \7\.................................................. 6 36 34 35 36 38 30 215
-----------------------------------------------------------------------------------------
Total policy changes.................................... -31 -35 -73 -126 -167 -225 -295 -952
=========================================================================================
Adjustment for fiscal dividend \8\............................ -3 -7 -14 -23 -32 -41 -50 -170
Total adjustments and policy changes.......................... -33 -41 -86 -148 -200 -271 -353 -1,131
Conference policy............................................. 178 189 146 118 100 46 -4 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Projections assume that discretionary spending is equal to the spending limits that are in effect through 1998 and will increase with inflation
after 1998.
\2\ The budget resolution was based on CBO's April 1995 baseline projections of mandatory spending and revenues, except for a limited number of
adjustments.
\3\ The budget resolution baseline assumed that the 1998 rebenchmarking of the CPI by the Bureau of Labor Statistics will result in 0.2 percentage point
reduction in the CPI compared with CBO's December 1994 economic projections.
\4\ The budget resolution baseline made adjustments related to revised accounting of direct student loan costs, expiration of excise taxes dedicated to
the Superfund trust fund as provided under current law, the effects of enacted legislation, and technical corrections.
\5\ Discretionary spending specified in the Concurrent Resolution on the Budget for Fiscal Year 1996 (H. Con. Res. 67).
\6\ Savings from Freezing 1996-2002 appropriations at the nominal level appropriated for 1995.
\7\ Revenue decreases are shown with a positive sign because they increase the deficit.
\8\ CBO has estimated that balancing the budget by 2002 would result in lower interest rates and slightly higher real growth that could lower federal
interest payments and increase revenues by $170 billion over the fiscal year 1996-2002 period. See Appendix B of CBO's April 1995 report, ``An
Analysis of the President's Budgetary Proposals for Fiscal Year 1996.''

Notes.--*=not applicable; CPI=consumer price index.
Source.--Congressional Budget Office.

TABLE 3.--RECONCILIATION CONFERENCE SAVINGS BY TITLE
[By fiscal year, in billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 1996-2002
--------------------------------------------------------------------------------------------------------------------------------------------------------
I--Agriculture: Outlays....................................... -1.3 -1.6 -1.5 -1.5 -1.6 -2.5 -2.4 -12.3
II--Banking and Housing: Outlays.............................. -5.2 -0.1 0.2 0.1 (\1\) (\1\) (\1\) -4.9
III--Communication and spectrum allocation: Outlays........... -0.2 -1.8 -2.7 -3.6 -3.1 -2.7 -1.4 -15.3
IV--Education: Outlays........................................ -1.0 -0.5 -0.5 -0.7 -0.8 -0.8 -0.8 -5.0
V--Energy and Natural Resources: Outlays...................... -0.6 -2.3 -0.4 -1.1 -0.7 -0.6 -0.5 -6.2
VI--Federal retirement:
Outlays................................................... -0.5 -1.1 -1.0 -1.6 -1.1 -1.1 -1.1 -7.5
Revenues \2\.............................................. -0.2 -0.4 -0.6 -0.6 -0.6 -0.6 -0.7 -3.7
Deficit................................................... -0.7 -1.5 -1.6 -2.2 -1.7 -1.7 -1.7 -11.1
VII--Medicaid: Outlays........................................ -2.2 -5.7 -13.4 -21.5 -30.0 -40.3 -50.4 -163.4
VIII--Medicare: Outlays....................................... -6.8 -14.3 -27.2 -42.0 -49.0 -59.8 -70.9 -270.0
IX--Transportation: Outlays................................... -0.1 -0.2 -0.1 -0.1 -0.1 -0.1 -0.1 -0.8
X--Veterans: Outlays.......................................... -0.3 -0.4 -0.5 -1.3 -1.4 -1.3 -1.5 -6.7
XI--Revenues:
Outlays................................................... 0.0 0.0 0.0 (\1\) (\1\) (\1\) -0.1 -0.1
Revenues \2\.............................................. 5.9 37.3 35.6 37.4 38.6 39.9 32.4 227.1
Deficit................................................... 5.9 37.3 35.6 37.4 38.6 39.8 32.4 227.0
XII--Teaching hospitals, asset sales, and welfare:
Outlays................................................... 0.6 -10.3 -13.1 -14.1 -15.7 -15.4 -17.2 -85.1
Revenues \2\.............................................. -0.1 -1.2 -1.3 -1.4 -1.5 -1.6 -1.8 -8.9
Deficit................................................... 0.5 -11.5 -14.4 -15.4 -17.2 -17.0 -19.0 -94.0
Interactive effects: Outlays.................................. 0.0 0.0 0.0 (\1\) (\1\) (\1\) 0.1 0.1
-----------------------------------------------------------------------------------------
Total Outlays........................................... -17.4 -38.1 -60.1 -87.2 -103.5 -124.6 -146.2 -577.2
Total Revenues \1\...................................... 5.7 35.7 33.7 35.5 36.5 37.6 29.9 214.5
Total Deficit........................................... -11.7 -2.4 -26.4 -51.8 -67.0 -87.0 -116.3 -362.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Less than $50 million.
\2\ Revenue increases are shown with a negative sign because they reduce the deficit.

Sources.--Congressional Budget Office; Joint Committee on Taxation.

Attachment

direct spending and revenue effects by title of the conference report
on h.r. 2491, the balanced budget act of 1995, congressional budget
office, november 16, 1995

ESTIMATED BUDGETARY EFFECTS OF TITLE I: AGRICULTURE AND RELATED PROVISIONS
[In millions of dollars, by fiscal year]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1996-2002
1996 1997 1998 1990 2000 2001 2002 total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in direct spending

Freedom to Far contracts in lieu of deficiency payments:
Estimated budget authority.................................. -874 -804 -804 -937 -1,194 -1,998 -1,989 -8,600
Estimated outlays........................................... -874 -804 -804 -937 -1,194 -1,998 -1,989 -8,600
Cap crop price-support loan rates:
Estimated budget authority.................................. -16 -85 35 -70 -49 -55 -38 -108
Estimated outlays........................................... -16 -85 35 -70 -49 -55 -38 -108
Cap 7-year cotton step-2 payments at $701 million:
Estimated budget authority.................................. .............. 1 2 2 2 -69 -116 -178
Estimated outlays........................................... .............. 1 2 2 2 -69 -116 -178
End cotton 8-month loan extension:
Estimated budget authority.................................. .............. -55 -5 -5 -5 -2 0 -72
Estimated outlays........................................... .............. -55 -5 -5 -5 -2 0 -72

[[Page S 17262]]

$40,000 payment limit per ``person'':
Estimated budget authority.................................. -21 -41 -45 -43 -39 -32 -31 -252
Estimated outlays........................................... -21 -41 -45 -43 -39 -32 -31 -252
Reform peanut program:
Estimated budget authority.................................. .............. -95 -69 -69 -67 -68 -66 -434
Estimated outlays........................................... .............. -95 -69 -69 -67 -68 -66 -434
Reform sugar program (increased assessments):
Estimated budget authority.................................. .............. -8 -8 -8 -9 -9 -9 -51
Estimated outlays........................................... .............. -8 -8 -8 -9 -9 -9 -51
End emergency feed assistance programs:
Estimated budget authority.................................. -60 -80 -80 -80 -80 -80 -80 -540
Estimated outlays........................................... -60 -80 -80 -80 -80 -80 -80 -540
End honey program:
Estimated budget authority.................................. .............. .............. .............. -1 -2 .............. .............. -3
Estimated outlays........................................... .............. .............. .............. -1 -2 .............. .............. -3
End farmer-owned reserve:
Estimated budget authority.................................. .............. -18 -18 -18 -18 -18 -18 -108
Estimated outlays........................................... .............. -18 -18 -18 -18 -18 -18 -108
Livestock Environmental Assistance Program:
Estimated budget authority.................................. 100 100 100 100 100 100 100 700
Estimated outlays........................................... 48 88 91 94 96 98 99 614
Limit CRP to 36.4 million acres:
Estimated budget authority.................................. .............. -41 -118 -109 -102 -100 -99 -569
Estimated outlays........................................... .............. -41 -118 -109 -102 -100 -99 -569
Cap WRP acreage and limit easements:
Estimated budget authority.................................. -24 -66 -66 -66 -66 54 54 -180
Estimated outlays........................................... -3 -47 -90 -94 -92 -74 13 -387
Reduce Market Promotion Program spending:
Estimated budget authority.................................. -1 -8 -10 -10 -10 -10 -10 -59
Estimated outlays........................................... -1 -8 -10 -10 -10 -10 -10 -59
Cap Export Enhancement Program spending:
Estimated budget authority.................................. -329 -532 -281 -130 0 0 0 -1,272
Estimated outlays........................................... -329 -532 -281 -130 0 0 0 -1,272
End mandatory crop insurance catastrophic coverage:
Estimated budget authority.................................. -27 -27 -28 -28 -29 -29 -29 -197
Estimated outlays........................................... -10 -27 -28 -28 -29 -29 -29 -180
Provide disaster assistance for seed crops:
Estimated budget authority.................................. 7 7 7 7 7 7 7 49
Estimated outlays........................................... 3 7 7 7 7 7 7 45
Direct access to Agriculture Quarantine Inspection Fund:
Estimated budget authority.................................. 8 9 10 10 13 17 21 88
Estimated outlays........................................... 8 9 10 10 13 17 21 88
Increase CCC commodity loan interest rate:
Estimated budget authority.................................. -20 -40 -40 -40 -40 -40 -40 -260
Estimated outlays........................................... -20 -40 -40 -40 -40 -40 -40 -260
-------------------------------------------------------------------------------------------------------------------------------
Total changes in direct spending:
Estimated budget authority.............................. -1,257 -1,613 -1,418 -1,495 -1,588 -2,332 -2,343 -12,046
Estimated outlays....................................... -1,275 -1,606 -1,451 -1,529 -1,618 -2,462 -2,385 -12,326
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ESTIMATED BUDGETARY EFFECTS OF TITLE II: BANKING, HOUSING AND RELATED PROGRAMS
[In millions of dollars, by fiscal year]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1996-2002
1996 1997 1998 1999 2000 2001 2002 total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in direct spending

Deposit insurance funds:
Estimated budget authority.................................. .............. .............. .............. .............. .............. .............. .............. ..............
Estimated outlays........................................... -5,000 400 800 800 700 700 700 -900
Limit staff of RTC oversight board:
Estimated budget authority.................................. .............. .............. .............. .............. .............. .............. .............. ..............
Estimated outlays........................................... (\1\) .............. .............. .............. .............. .............. .............. (\1\)
FHA single-family assignment program:
Estimated budget authority.................................. -119 -216 -234 -268 -308 -317 -317 -1,779
Estimated outlays........................................... -119 -216 -234 -268 -308 -317 -317 -1,779
Assisted housing rent adjustments for operating costs:
Estimated budget authority.................................. .............. .............. .............. .............. .............. .............. .............. ..............
Estimated outlays........................................... -18 -66 -126 -177 -210 -229 -249 -1,075
One-percent reduction in assisted housing rent adjustments: \2\
Estimated budget authority.................................. .............. .............. .............. .............. .............. .............. .............. ..............
Estimated outlays........................................... -42 -170 -216 -211 -198 -182 -170 -1,189
-------------------------------------------------------------------------------------------------------------------------------
Total estimated changes in direct spending:
Estimated budget authority.................................. -119 -216 -234 -268 -308 -317 -317 -1,779
Estimated outlays........................................... -5,179 -52 224 144 -16 -28 -36 -4,943

Changes in spending subject to appropriations

Rent adjustments for section 8 housing:
Estimated authorization level............................... 30 50 85 90 95 120 130 600
Estimated outlays........................................... 1 13 37 64 83 102 118 418
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.
\2\ If the VA/HUD appropriations bill is enacted before this provision, and if it includes a similar provision applying only to fiscal year 1996, the reconciliation provision would produce no
savings in 1996 and lower savings in subsequent years.

ESTIMATED BUDGETARY EFFECTS OF TITLE III: COMMUNICATIONS AND SPECTRUM ALLOCATION PROVISIONS
[In millions of dollars, by fiscal year]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1996-2002
1996 1997 1998 1999 2000 2001 2002 total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in direct spending

Spectrum auctions:
Estimated budget authority.................................. -150 -1,800 -2,650 -3,550 -3,100 -2,650 -1,400 -15,300
Estimated outlays........................................... -150 -1,800 -2,650 -3,550 -3,100 -2,650 -1,400 -15,300
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page S 17263]]
ESTIMATED BUDGETARY EFFECTS OF THE CONFERENCE AGREEMENT TITLE IV, EDUCATION AND RELATED PROVISIONS
[In millions of dollars, by fiscal year]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1996-2002
1996 1997 1998 1999 2000 2001 2002 total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Asset sale receipts \1\

Sale of Connie Lee stock:
Estimated budget authority.................................. -7 .............. .............. .............. .............. .............. .............. -7
Estimated outlays........................................... -7 .............. .............. .............. .............. .............. .............. -7

Changes in direct spending

Changes in student loans:
Estimated budget authority.................................. -1,144 -429 -550 -763 -756 -791 -831 -5,264
Estimated outlays........................................... -955 -464 -496 -678 -754 -784 -817 -4,948
Total: Mandatory spending (asset sales plus direct
spending changes):
Estimated budget authority.................................. -1,151 -429 -550 -763 -756 -791 -831 -5,271
Estimated outlays........................................... -962 -464 -496 -678 -754 -784 -817 -4,955
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Under the 1996 budget resolution, proceeds from asset sales are counted in budget totals for purposes of Congressional scoring. Under the Balanced Budget Act, however, proceeds from asset
sales are not counted in determining compliance with the discretionary spending limits or pay-as-you-go requirement.

ESTIMATED BUDGETARY EFFECTS OF TITLE V: ENERGY AND NATURAL RESOURCES
[In millions of dollars, by fiscal year]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1996-2002
1996 1997 1998 1999 2000 2001 2002 total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Asset sale receipts \1\

U.S. Enrichment Corporation:
Estimated budget authority.................................. -500 -1,100 -21 -54 -55 -46 -47 -1,823
Estimated outlays........................................... -500 -1,100 -21 -54 -55 -46 -47 -1,823
Sale of DOE assets:
Estimated budget authority.................................. -20 -15 -15 -15 -15 -15 -15 -110
Estimated outlays........................................... -20 -15 -15 -15 -15 -15 -15 -110
Sale of Weeks Island oil:\2\
Estimated budget authority.................................. -100 -188 -182 .............. .............. .............. .............. -470
Estimated outlays........................................... -100 -188 -182 .............. .............. .............. .............. -470
California land sale:
Estimated budget authority.................................. -1 .............. .............. .............. .............. .............. .............. -1
Estimated outlays........................................... -1 .............. .............. .............. .............. .............. .............. -1
Sale of helium reserves:
Estimated budget authority.................................. .............. -3 -8 -9 -9 -9 -9 -47
Estimated outlays........................................... .............. -3 -8 -9 -9 -9 -9 -47
Arctic National Wildlife Refuge:
Estimated budget authority.................................. .............. -1,601 -1 -1,001 -1 -1 -1 -2,606
Estimated outlays........................................... .............. -1,601 -1 -1,001 -1 -1 -1 -2,606
Collbran Project:
Estimated budget authority.................................. .............. .............. .............. .............. -13 .............. .............. -13
Estimated outlays........................................... .............. .............. .............. .............. -13 .............. .............. -13
Sly Park:
Estimated budget authority.................................. .............. -4 .............. .............. .............. .............. .............. -4
Estimated outlays........................................... .............. -4 .............. .............. .............. .............. .............. -4
Sale of DOI assets:
Estimated budget authority.................................. -1 -3 -3 .............. .............. .............. .............. -7
Estimated outlays........................................... -1 -3 -3 .............. .............. .............. .............. -7
Alaska PMA sale:\3\ \4\
Estimated budget authority.................................. -77 .............. .............. .............. .............. .............. .............. -77
Estimated outlays........................................... -77 .............. .............. .............. .............. .............. .............. -77
Outer continental shelf:\4\
Estimated budget authority.................................. -15 -25 -20 -20 -20 -20 -20 -140
Estimated outlays........................................... -15 -25 -20 -20 -20 -20 -20 -140
-------------------------------------------------------------------------------------------------------------------------------
Subtotal, asset sales:
Estimated budget authority.............................. -714 -2,939 -250 -1,099 -113 -91 -92 -5,298
Estimated outlays....................................... -714 -2,939 -250 -1,099 -113 -91 -92 -5,298

Changes in direct spending

NRC fees:
Estimated budget authority.................................. .............. .............. .............. -330 -330 -330 -330 -1,320
Estimated outlays........................................... .............. .............. .............. -330 -330 -330 -330 -1,320
U.S. Enrichment Corporation:
Estimated budget authority.................................. .............. .............. .............. .............. .............. .............. .............. 0
Estimated outlays........................................... 306 8 -10 -88 -159 -80 -20 -3
Lease of excess SPR capacity:
Estimated budget authority.................................. .............. .............. -24 -37 -64 -49 -67 -241
Estimated outlays........................................... .............. .............. -24 -37 -64 -59 -71 -255
Arctic National Wildlife Refuge:
Estimated budget authority.................................. .............. 800 5 560 6 6 6 1,403
Estimated outlays........................................... .............. 800 1 502 12 43 28 1,386
Prepayment of construction charges:
Estimated budget authority.................................. -166 -17 4 29 29 29 29 -63
Estimated outlays........................................... -166 -17 4 29 29 29 29 -63
Hetch Hetchy fees:
Estimated budget authority.................................. -2 -2 -2 -2 -2 -2 -2 -14
Estimated outlays........................................... -2 -2 -2 -2 -2 -2 -2 -14
Collbran Project:
Estimated budget authority.................................. .............. .............. .............. .............. 1 3 2 6
Estimated outlays........................................... .............. .............. .............. .............. 1 3 2 6
Sly Park:
Estimated budget authority.................................. .............. .............. (\5\) (\5\) (\5\) (\5\) (\5\) 1
Estimated outlays........................................... .............. .............. (\5\) (\5\) (\5\) (\5\) (\5\) 1
Central Utah prepayment:
Estimated budget authority.................................. .............. -67 -127 2 2 -31 2 -219
Estimated outlays........................................... .............. -67 -127 2 2 -31 2 -219
Federal oil and gas royalties:
Estimated budget authority.................................. -6 -12 -8 -7 -7 -6 -5 -51
Estimated outlays........................................... -6 -12 -8 -7 -7 -6 -5 -51
Hardrock mining:
Estimated budget authority.................................. 2 1 1 -40 -40 -40 -41 -157
Estimated outlays........................................... 2 1 1 -40 -40 -40 -41 -157
Bonneville Power refinancing:
Estimated budget authority.................................. -16 -14 -15 -13 -12 -25 -25 -120
Estimated outlays........................................... -16 -14 -15 -13 -12 -25 -25 -120
Alaska PMA sale:\3\ \4\
Estimated budget authority.................................. 4 11 11 11 11 11 11 70
Estimated outlays........................................... 4 11 11 11 11 11 11 70
Outer continental shelf:\4\
Estimated budget authority.................................. .............. .............. .............. .............. .............. 3 7 10
Estimated outlays........................................... .............. .............. .............. .............. .............. 3 7 10
Exports of Alaskan oil:\4\
Estimated budget authority.................................. -5 -14 -10 -7 -6 .............. .............. -42

[[Page S 17264]]

Estimated outlays........................................... -5 -14 -10 -7 -6 .............. .............. -42
Ski area permit charges:
Estimated budget authority.................................. e -1 -1 e e e e -1
Estimated outlays........................................... e -1 -1 e e e e -1
Park fees:
Estimated budget authority.................................. -7 -11 -11 -8 -12 -7 -13 -69
Estimated outlays........................................... -7 -13 -14 -11 -14 -10 -14 -83
Concession reform:
Estimated budget authority.................................. .............. .............. -5 -11 -16 -22 -28 -82
Estimated outlays........................................... .............. .............. -5 -11 -16 -22 -28 -82
-------------------------------------------------------------------------------------------------------------------------------
Subtotal: Direct spending:
Estimated budget authority.............................. -196 674 -182 167 -440 -460 -454 -889
Estimated outlays....................................... 110 680 -199 -2 -595 -516 -417 -937
===============================================================================================================================
Total: Mandatory spending (asset sales plus direct
spending changes):
Estimated budget authority.............................. -910 -2,265 -432 -932 -553 -551 -546 -6,187
Estimated outlays....................................... -604 -2,259 -449 -1,101 -708 -607 -509 -6,235
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Under the 1996 budget resolution, proceeds from asset sales are counted in budget totals for purposes of Congressional scoring. Under the Balanced Budget Act, however, proceeds from asset
sales are not counted in determining compliance with the discretionary spending limits or pay-as-you-go requirement.
\2\ This estimate for sale of oil from the Weeks Island facility reflects changes to current law; but if the appropriations bill for interior and Related Agencies is enacted prior to enactment
of this title, the savings for this title would be reduced by $100 million.
\3\ The sale of the Alaska PMA is contingent upon provisions in Title XI providing tax-exempt financing for certain projects.
\4\ Similar provisions regarding sale of the Alaska PMA, OCS leasing, and exports of Alaskan oil are also contained in S. 395, which was recently cleared by the Congress.
\5\ Less than $500,000.

Note.--This title would also affect spending that is subject to appropriations action, but CBO has not completed an estimate of the potential changes in discretionary spending that might
result from enacting this title.

ESTIMATED BUDGETARY EFFECTS OF TITLE VI: FEDERAL RETIREMENT AND RELATED PROVISIONS
[In millions of dollars, by fiscal year]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1996-2002
1996 1997 1998 1999 2000 2001 2002 total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Asset sale receipts \1\

Sale of Governors Island NY:
Estimated budget authority.................................. .............. .............. .............. -500 .............. .............. .............. -500
Estimated outlays........................................... .............. .............. .............. -500 .............. .............. .............. -500
Sale of Union Station air rights:
Estimated budget authority.................................. .............. -40 .............. .............. .............. .............. .............. -40
Estimated outlays........................................... .............. -40 .............. .............. .............. .............. .............. -40
Repeal of title V of McKinney Act:
Estimated budget authority.................................. -3 -3 -3 -3 -3 -3 -3 -21
Estimated outlays........................................... -3 -3 -3 -3 -3 -3 -3 -21

Changes in direct spending \2\

Civilian retirement COLA delay:
Estimated budget authority.................................. 0 -337 -353 -347 -362 -380 -396 -2175
Estimated outlays........................................... 0 -337 -353 -347 -362 -380 -396 -2175
Agency contributions for civilian retirement:
Estimated budget authority.................................. -513 -667 -642 -614 -560 -539 -513 -4046
Estimated outlays........................................... -513 -667 -642 -614 -560 -539 -513 -4046
Congressional retirement benefits:
Estimated budget authority.................................. -* -* -1 -1 -2 -2 -3 -9
Estimated outlays........................................... -* -* -1 -1 -2 -2 -3 -9
USPS transitional appropriations:
Estimated budget authority.................................. 0 -9 -37 -37 -36 -36 -36 -191
Estimated outlays........................................... 0 -9 -37 -37 -36 -36 -36 -191
PTO surcharge fees:
Estimated budget authority.................................. .............. .............. .............. -119 -119 -119 -119 -476
Estimated outlays........................................... .............. .............. .............. -119 -119 -119 -119 -476
-------------------------------------------------------------------------------------------------------------------------------
Total mandatory spending (asset sales plus direct
spending):
Estimated budget authority.............................. -516 -1056 -1036 -1621 -1082 -1079 -1070 -7458
Estimated outlays....................................... -516 -1056 -1036 -1621 -1082 -1079 -1070 -7458

Revenues

Employee contributions for civilian retirement:
Estimated revenues.......................................... 204 409 551 597 612 640 670 3681

Authorizations of appropriations

Agency contributions for civilian retirement:
Estimated authorization level............................... 529 688 662 632 577 555 529 4172
Estimated outlays........................................... 513 667 642 614 560 539 513 4046
Repeal of title V of McKinney Act:
Estimated authorization level............................... 0 3 3 3 3 3 3 18
Estimated outlays........................................... 0 1 3 3 3 3 3 16
-------------------------------------------------------------------------------------------------------------------------------
Total authorizations of appropriations:
Estimated authorization level........................... 529 691 665 635 580 558 532 4190
Estimated outlays....................................... 513 668 645 617 563 542 516 4062
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Under the 1996 budget resolution, proceeds from asset sales are counted in budget totals for purposes of Congressional scoring. Under the Balanced Budget Act, however, proceeds from asset
sales are not counted in determining compliance with the discretionary spending limits or pay-as-you-go requirements.
\2\ Civilian retirement includes the Civil Service Retirement System, the Federal Employees Retirement System, the Foreign Service Retirement and Disability System, and the Foreign Service
Pension System.
\3\ Less than $500,000.

Note.--Components may not add to totals due to rounding.

TITLE VII--MEDICAID
[By fiscal year, in billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
7-year
1996 1997 1998 1999 2000 2001 2002 total
--------------------------------------------------------------------------------------------------------------------------------------------------------
CBO Baseline............................................ 99.292 110.021 122.060 134.830 148.116 162.631 177.805 ..........
===============================================================================================
Proposed law:
Outlays from Title XIX.............................. 24.624 0 0 0 0 0 0 ..........
Section 2121(a)--Transitional Correction............ 0 0.200 0 0 0 0 0 ..........
Section 2121(b)--Pool Amounts....................... 71.762 103.234 107.908 112.644 117.360 122.284 127.418 ..........
Section 2121(c)--Special Rule....................... 0.090 0.233 0.090 0 0 0 0 ..........
Section 2121(f)--Supplemental Allotment............. 0.627 0.673 0.702 0.733 0.764 0 0 ..........
-----------------------------------------------------------------------------------------------
Total Outlays................................... 97.103 104.340 108.700 113.377 118.124 122.284 127.418 ..........
===============================================================================================

[[Page S 17265]]

Reductions in Outlays........................... -2.189 -5.681 -13.360 -21.453 -29.992 -40.347 -50.387 -163.409
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Assumes enactment date of November 15, 1995.

TITLE VIII--MEDICARE
[By fiscal year, in billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGE IN DIRECT SPENDING

Subtitle A--MedicarePlus Program \1\.................... -0.1 -0.5 -1.2 -2.6 -5.0 -7.3 -10.2 -26.9
===============================================================================================
Subtitle B--Preventing Fraud and Abuse:
Payment Safeguards and enforcement.................. 0.3 -0.2 -0.5 -0.8 -0.9 -0.7 -0.8 -3.5
New and increased Civil Monetary Penalties.......... -0.0 -0.0 -0.0 -0.1 -0.1 -0.1 -0.1 -0.4
Additional Exclusion Authorities.................... -0.0 -0.0 -0.0 -0.1 -0.1 -0.1 -0.1 -0.3
Criminal Provisions................................. -0.0 0.0 0.0 0.1 0.2 0.2 0.2 0.7
Other Items......................................... -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.1
-----------------------------------------------------------------------------------------------
Subtotal, Subtitle B............................ 0.3 -0.2 -0.6 -0.8 -0.8 -0.7 -0.7 -3.5
===============================================================================================
Subtitle C--Regulatory Relief:
Physician Ownership referral........................ 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.3
-----------------------------------------------------------------------------------------------
Subtotal, Subtitle C............................ 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.3
===============================================================================================
Subtitle D--Graduate Medical Education:
Indirect Medical Education Payments................. -0.4 -0.8 -0.8 -1.1 -1.3 -1.5 -1.7 -7.6
Direct Medical Education............................ 0.0 -0.1 -0.1 -0.1 -0.2 -0.3 -0.4 -1.4
-----------------------------------------------------------------------------------------------
Subtotal, Subtitle D............................ -0.4 -0.9 -1.0 -1.2 -1.5 -1.9 -2.1 -9.0
===============================================================================================
Subtitle E--Medicare Part A:
Chapter 1--General provisions Relating to Part A
PPS MB-2.5 in FY 96, -2.0 thereafter................ -0.2 -1.1 -2.4 -3.8 -5.4 -7.2 -9.0 -29.1
PPS Exempt Update Reduction......................... -0.0 -0.1 -0.2 -0.3 -0.4 -0.5 -0.6 -2.0
Targets for Rehabilitation and LTC Hospitals........ -0.0 -0.1 -0.2 -0.4 -0.5 -0.7 -0.7 -2.7
Rebasing for Certain LTC Hospitals.................. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
LTC Hospitals Within Other Hospitals................ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2
Reduce nonPPS capital by 10%........................ -0.1 -0.1 -0.1 -0.1 -0.2 -0.2 -0.2 -0.9
Reduce DSH payments................................. -0.1 -0.3 -0.6 -0.9 -1.1 -1.2 -1.2 -5.4
Reduce PPS Capital by 15%........................... -1.0 -1.2 -1.3 -1.3 -1.4 -1.4 -1.5 -9.0
Rebase PPS Capital Payment Rates.................... -0.3 -0.4 -0.4 -0.4 -0.4 -0.4 -0.4 -2.7
Reduce Payments for Hospital Bad Debt............... -0.1 -0.1 -0.2 -0.2 -0.2 -0.2 -0.2 -1.1
Preferential Update for Certain MDH Hospitals....... 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.6
Chapter 2--Skilled Nursing Facilities: Skilled Nursing
Facilities............................................. -0.2 -0.6 -1.1 -1.6 -1.9 -2.2 -2.4 -10.0
Chapter 3--Other Provisions Related to Part A:
Hemophilia Pass-Through Extension................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Hospice............................................. -0.0 -0.0 -0.1 -0.1 -0.1 -0.1 -0.1 -0.5
-----------------------------------------------------------------------------------------------
Subtotal, Subtitle E................................ -2.0 -3.8 -6.2 -8.9 -11.4 -13.9 -16.2 -62.5
===============================================================================================
Subtitle F--Medicare Part B:
Part 1--Payment Reforms
Reduce payments for physicians's services........... -0.4 -1.3 -2.3 -3.2 -4.1 -5.1 -6.2 -22.6
Eliminate formula driven overpayment................ -0.9 -1.2 -1.5 -2.0 -2.5 -3.3 -4.5 -15.9
Reduce updates for durable medical equipment........ -0.1 -0.3 -0.4 -0.6 -0.7 -0.9 -1.1 -4.1
Reduce updates for clinical labs.................... -0.1 -0.4 -0.7 -0.9 -1.1 -1.3 -1.6 -6.0
Extend outpatient capital reduction................. 0.0 0.0 0.0 -0.1 -0.1 -0.2 -0.2 -0.6
Extend outpatient payment reduction................. 0.0 0.0 0.0 -0.3 -0.3 -0.4 -0.4 -1.4
Freeze payments for ASC services.................... -0.0 -0.1 -0.1 -0.2 -0.2 -0.3 -0.4 -1.3
Anesthesia Payment Allocation....................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Separate physician fee schedule for Wisconsin....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Limit payments for ambulance services............... -0.0 -0.0 -0.1 -0.1 -0.1 -0.2 -0.3 -0.8
Direct payment to PAs and NPs \2\................... 0.0 0.0 0.0 0.0 0.1 0.1 0.1 -0.3
Payments to primary care MDs in shortage areas \2\.. 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.5
Part 2--Part B Premium
Increase Part B premium............................. -3.3 -4.3 -4.1 -5.2 -7.9 -10.4 -13.5 -48.6
Income-related reduction in medicare subsidy........ 0.0 -0.4 -0.9 -1.3 -1.7 -2.0 -2.3 -8.5
-----------------------------------------------------------------------------------------------
Subtotal, Subtitle F............................ -4.7 -7.7 -9.9 -13.7 -18.7 -24.0 -30.3 -109.1
===============================================================================================
Subtitle G--Medicare Parts A and B:
Payment for home health services.................... 0.0 -1.3 -2.3 -2.7 -3.1 -3.6 -4.0 -17.0
Medicare second payer improvements.................. 0.0 0.0 0.0 -1.3 -1.5 -1.7 -1.9 -6.5
Coverage of Oral Breast Cancer Drug................. 0.1 0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.1
-----------------------------------------------------------------------------------------------
Subtotal, Subtitle G............................ 0.1 -1.3 -2.3 -4.1 -4.7 -5.3 -6.0 -23.5
===============================================================================================
Subtitle H--Rural Areas:
Medicare-Dependent payment Extension................ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2
Critical Access Hospitals........................... 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.3
Establish REACH Program............................. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2
Classification of Rural Referral Centers............ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1
Expand Access to Nurse Aide Training \3\............ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------------------------------------------------
Subtotal, Subtitle H............................ 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.7
===============================================================================================
Change in net Mandatory Medicare Outlays before Failsafe -6.8 -14.3 -21.1 -31.2 -42.0 -52.8 -65.3 -233.5
Additional Outlay Reductions Required by Failsafe, Net
of Premiums............................................ 0.0 0.0 -6.2 -10.8 -7.1 -7.0 -5.6 -36.6
-----------------------------------------------------------------------------------------------
Total, Medicare................................... -6.8 -14.3 -27.2 -42.0 -49.0 -59.8 -70.9 -270.0
===============================================================================================
MEMORANDUM: Monthly Part B premium (By calendar year):
Estimated premium under proposal.................... $53.70 $57.00 $59.30 64.10 $73.10 $80.10 $88.90 ..........
Estimated premium under current law................. $42.50 $48.20 $53.20 $55.00 $56.80 $58.60 $60.50 ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Estimate includes medical savings accounts provision.
\2\ These items are included in Subtitle H (Rural Areas).
\3\ CBO estimates that this provision would cost less than $50 million over seven years.

Notes.--Details may not sum to totals because of rounding. The estimates assume an enactment date of November 15, 1995. The estimates do not incorporate
changes in discretionary spending for administration.

[[Page S 17266]]
ESTIMATED BUDGETARY EFFECTS OF TITLE IX: TRANSPORTATION AND RELATED PROVISIONS
[Millions of Dollars, by Fiscal Year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1996-2002
1996 1997 1998 1999 2000 2001 2002 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING

Highway Minimum Allocation:
Estimated Budget Authority.......................... -536 .......... .......... .......... .......... .......... .......... -536
Estimated Outlays................................... -42 -220 -128 -59 -32 -18 -13 -512
Vessel Tonnage Duties: ..........
Estimated Budget Authority.......................... - - - -49 -49 -49 -49 -196
Estimated Outlays................................... - - - -49 -49 -49 -49 -196
FEMA Fees: a
Estimated Budget Authority.......................... -12 -12 -12 -12 -12 -12 -12 -84
EStimated Outlays................................... -12 -12 -12 -12 -12 -12 -12 -84
Total: Mandatory Spending:
Estimated Budget Authority.......................... -548 -12 -12 -61 -61 -61 -61 -816
Estimated Outlays................................... -54 -232 -140 -120 -93 -79 -74 -792
--------------------------------------------------------------------------------------------------------------------------------------------------------
a The table reflects changes to current law, if the VA/HUD appropriations bill is enacted before this provision and extends the collection of $12
million of fees for radiological emergency preparedness in 1996, this provision would not produce any savings in 1996.

ESTIMATED BUDGETARY EFFECTS OF TITLE X: COMMITTEE ON VETERANS AFFAIRS
[Millions of dollars, by fiscal year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1996-2000
1996 1997 1998 1999 2000 2001 2002 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING

HeaLth Care Per Diems and Prescription Copayments:
Estimated Budget Authority.......................... 0 0 0 -58 -62 -65 -70 -255
Estimated Outlays................................... 0 0 0 -58 -62 -65 -70 -255
Medical Care Cost Recovery:
Estimated Budget Authority.......................... 0 0 0 -197 -208 -219 -231 -855
Estimated Outlays................................... 0 0 0 -197 -208 -219 -231 -855
Verify Income for Pension Purposes:
Estimated Budget Authority.......................... 0 0 0 -10 -20 -30 -40 -100
Estimated Outlays................................... 0 0 0 -10 -20 -30 -40 -100
Verify Income for Medical Care:
Estimated Budget Authority.......................... 0 0 0 -4 -8 -12 -16 -40
Estimated Outlays................................... 0 0 0 -4 -8 -12 -16 -40
Pension Limitation--Nursing Home Vets:
Estimated Budget Authority.......................... 0 0 0 -198 -204 -211 -218 -831
Estimated Outlays................................... 0 0 0 -197 -240 -173 -217 -827
Fees on Original Loans:
Estimated Budget Authority.......................... 0 0 0 -100 -102 -102 -102 -406
Estimated Outlays................................... 0 0 0 -100 -102 -102 -102 -406
Fees on Later Loans:
Estimated Budget Authority.......................... 0 0 0 -43 -44 -44 -44 -175
Estimated Outlays................................... 0 0 0 -43 -44 -44 -44 -175
Resale Losses:
Estimated Budget Authority.......................... 0 0 0 -4 -4 -4 -4 -16
Estimated Outlays................................... 0 0 0 -4 -4 -4 -4 -16
Increase Prescription Copayments to $4, Tighten
Collection Procedures. Exempt POW's from Copay:
Estimated Budget Authority.......................... -74 -98 -102 -108 -114 -120 -126 -742
Estimated Outlays................................... -74 -98 -102 -108 -114 -120 -126 -742
Round Down Comp COLAs:a
Estimated Budget Authority.......................... -19 -46 -66 -90 -115 -145 -169 -650
Estimated Outlays................................... -17 -43 -64 -88 -121 -133 -168 -634
Repeal Gardner Decision:
Estimated Budget Authority.......................... -97 -222 -341 -467 -476 -469 -463 -2,535
Estimated Outlays................................... -89 -212 -331 -457 -512 -433 -464 -2,498
Enhanced Loan Asset Sale Authority:
Estimated Budget Authority.......................... -5 -5 -5 -5 -5 -5 -5 -35
Estimated Outlays................................... -5 -5 -5 -5 -5 -5 -5 -35
Withholding of Payments and Benefits:
Estimated Budget Authority.......................... -90 0 0 0 0 0 0 -90
Estimated Outlays................................... -90 0 0 0 0 0 0 -90
Total-DIrect Spending:
Estimated Budget Authority.......................... -285 -371 -514 -1,284 -1,362 -1,462 -1,488 -6,730
Estimated Outlays................................... -275 -358 -502 -1,271 -1,440 -1,340 -1,487 -6,673
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Similar provisions were included in H.R. 2394, the Veterans' Compensation Cost-of-Living Adjustment Act of 1995. Congressional action on the bill was
completed on November 10, 1995. H.R. 2394 rounds down the COLA for 1996 only; the provisions in Title X would round down the COLAs through 2002, and
make other adjustments to COLAs for surviving spouses.

ESTIMATED BUDGETARY EFFECTS OF TITLE XI: REVENUE PROVISIONS
[In millions of dollars, by fiscal year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1996-2002
1996 1997 1998 1999 2000 2001 2002 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING

Tax Information Sharing:
Estimated Budget Authority.......................... .......... .......... .......... -14 -28 -42 -56 -140
Estimated Outlays................................... .......... .......... .......... -14 -28 -42 -56 -140
Total: Direct Spending:
Estimated Budget Authority.......................... 0 0 0 -14 -28 -42 -56 -140
Estimated Outlays................................... 0 0 0 -14 -28 -42 -56 -140

CHANGES IN REVENUES

Family Tax Relief Act: Estimated Revenues............... -4,740 -29,381 -23,846 -24,319 -25,087 -25,784 -26,268 -159,425
Savings and Retirement Incentives: Estimated Revenues... 67 -7,674 -12,049 -13,371 -13,762 -14,471 -6,315 -67575
Health Related Provisions: Estimated Revenues........... -988 -834 -1,060 -1,337 -1,590 -1,879 -2,197 -9,885
Estate and Gift Provisions: Estimated Revenues.......... 0 -867 -1,291 -1,753 -2,261 -2,808 -3,311 -12,291
Extension of Expiring Provisions: Estimated Revenues.... -2,000 -1,585 -491 -73 400 997 1,421 -1,331
Taxpayer Bill of Rights 2 Provisions: Estimated Revenues -6 -11 -12 -12 -12 -13 -13 -79
Casualty and Involuntary Conversion Provisions:
Estimated Revenues..................................... -1 -9 -1 4 11 20 31 55
Exempt Organizations and Charitable Reforms Estimated
Revenues:.............................................. 0 -2 -2 -2 -2 -2 -2 -12
Tax Reform and Other Provisions: Estimated Revenues..... 2,288 3,258 3,403 3,824 4,018 4,370 4,657 25,818
Tax Simplification: Estimated Revenues.................. 0 -14 -58 -194 -487 -550 -632 -1,935
Miscellaneous Provisions: Estimated Revenues............ -28 -98 -160 -205 178 264 199 150
Generalized System of Preferences: Estimated Revenues... -532 -82 0 0 0 0 0 -614
Increase in the Public Debt Limit: Estimated Revenues... 0 0 0 0 0 0 0 0
Total: Revenues: Estimated Revenues..................... -5,940 -37,299 -35,567 -37,438 -38,594 -39,856 -32,430 -227,124
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page S 17267]]
CONFERENCE AGREEMENT--ESTIMATED BUDGET EFFECTS OF REVENUE RECONCILIATION AND TAX SIMPLIFICATION PROVISIONS OF H.R. 2491 (TITLE XI) \1\
[Fiscal years 1996-2002, in millions of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Provision Effective 1996 1997 1998 1999 2000 2001 2002 1996-2000 1996-2002
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CONTRACT WITH AMERICA PROVISIONS

I. Family tax relief provisions:
1. $500 tax credit for children under age 10/1/95................................. -4,449 -28,355 -22,529 -22,761 -22,996 -23,169 -23,343 -101,090 -147,602
18--Senate amendment ($75,000/$110,000
phaseout with no indexing).
2. Reduce the marriage penalty............. tyba 12/31/95........................... -137 -474 -739 -952 -1,458 -1,970 -2,270 -3,760 -8,000
3. $5,000 credit for adoption expenses-- tyba 12/31/95........................... -28 -285 -302 -320 -336 -337 -337 -1,271 -1,945
Senate amendment, but phase out beginning
at $75,000 AGI; require finalized adoption
only for foreign adoptions; special needs
adoptions--House bill.
4. $1,000 deduction (with residency and tyba 12/31/95........................... -74 -115 -119 -124 -129 -134 -138 -561 -833
support tests) for custodial care of
certain elderly dependents in taxpayer's
home.
II. Savings and investment provisions:
1. Provisions relating to individual tyba 12/31/95........................... -221 -487 -100 -990 -1,817 -3,332 -4,807 -3,615 -11,755
Retirement Arrangements--(a) deductible
IRAs--Senate amendment, except increase
phaseout range for joint filers in $2,500
increments; Homemakers eligible for full
IRA deduction--both House bill and Senate
amendment; (b) back-end IRAa--House bill
with coordination of contribution limits;
(c) definition of special purpose
withdrawals--Senate amendment; (d) penalty
free withdrawals from deductible IRAs--
Senate amendment.
2. Capital gains reforms: (a) individual
capital gains--House bill; (b) small
business stock--14% maximum rate for
individuals, reduced corporate rate; (c)
indexing of capital gains--House bill,
with 6-year delay of effective date; (d)
corporate capital gains--Senate amendment;
and (e) capital loss deducation for sale
of principal residence--House bill:
a. Corporate........................... tyea 12/31/94........................... -1,009 -893 -912 -945 -971 -1,024 -1,129 -4,730 -6,883
b. Individual.......................... tyea 12/31/94........................... 2,857 -2,677 -6,757 -7,546 -8,191 -7,990 -1,450 -22,314 -28,854
3. Alternative minimum tax (AMT) Reform-- ppisa & tyba 12/31/95................... -1,290 -3,149 -3,722 -3,248 -2,141 -1,487 -1,252 -13,550 -16,291
Senate amendment, except conform
depreciation lives and methods under AMT
and, with respect to certain minimum tax
credits, substitute 7 years for 5 years.
III. Health care provisions:
1. Treatment of long-term care insurance-- 1/1/96.................................. -860 -556 -659 -751 -846 -951 -1,061 -3,672 -5,684
House bill, but adopt Senate provision
providing no cap on indemnity policies,
permit penalty-free (not tax-free) 401(k)
and IRA withdrawals, $175 per day cap on
per diem benefits, and adopt Senate
consumer protections.
2. Tax treatment of accelerated death 1/1/95.................................. -6 -67 -107 -166 -214 -265 -316 -560 -1,141
benefits under life insurance contracts--
House bill, but adopt Senate rule relating
to NAIC guidelines.
3. Health insurance organizations eligible tyea 10/13/95........................... -1 -1 -1 -1 -1 -1 -1 -5 -8
for benefits of section 833--Senate
amendment.
4. Increase tax-free death benefit limit on ceia 12/31/95........................... (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\)
burial insurance polices--Senate amendment.
IV. Estate and gift tax provisions:
1. Phase up unified credit to $750,000-- dda/gma 12/31/95........................ ......... -333 -663 -1,020 -1,401 -1,805 -2,154 -3,417 -7,376
House bill with 6-year phase in with
indexing thereafter; index $10,000 annual
gift tax exclusion; $750,000 special use
valuation; generation-skipping tax; and
indexing of $1 million value of closely
held businesses under section 6601j.
2. Reduction in estate taxes for qualified dda 12/31/95............................ ......... -490 -579 -680 -798 -934 -1,081 -2,547 -4,562
businesses after unified credit increase--
Senate amendment, but change thresholds to
$1 million/$1.5 million and coordinate
with section 2032A and section 6166.
3. Provide a 40% exclusion from estate dda 12/31/95............................ ......... -42 -47 -51 -60 -67 -74 -200 -340
taxes for property donated subject to a
conservation easement (within 25 miles of
a metropolitan statistical area or a
national park or wilderness area; or
within 10 miles of an Urban National
Forest).
4. Clarify cash leases under section 2032A-- cla 12/31/95............................ ......... -2 -2 -2 -2 -2 -2 -8 -12
Senate amendment.
V. Job creation and wage enhancement
provisions:
1. Leasehold improvements provision--House llda 3/13/95............................ -34 -230 -17 -15 -12 -9 -6 -98 -114
bill.
2. Small business incentives--House bill, pplsa 12/31/95.......................... -191 -379 -470 -553 -554 -550 -489 -2,147 -3,186
but modify increase in expensing
limitation for small businesses to $19,000
for 1996, $20,000 for 1997, $21,000 for
1998, $22,000 for 1999, $23,000 for 2000,
$24,000 for 2001, and $25,000 for 2002 and
thereafter.
------------------------------------------------------------------------------------------------------------------------------------------------
Subtotal: Contract With America related ........................................ -5,443 -38,325 -37,725 -40,125 -41,927 -44,027 -37,010 -163,545 -244,586
provisions.
VI. Expiring provisions:
1. Provisions extended through 12/31/96:
a. Work opportunity tax credit--Senate 1/1/96.................................. -64 -107 -65 -25 -10 -2 ......... -271 -274
amendment, with modifications \3\.
b. Employer-provided educational 1/1/95.................................. -611 -288 ......... ......... ......... ......... ......... -899 -899
assistance; applies to undergraduate
education only after 1995.
c. R&E credit--House bill.............. 7/1/95.................................. -1,322 -842 -387 -275 -165 -42 ......... -2,991 -3,033
d. Orphan drug tax credit--Senate 1/1/95.................................. -35 -10 -2 -1 -1 (\2\) (\2\) -49 -50
amendment.
e. Contribution of appreciated stock to 1/1/95.................................. -107 -18 -6 ......... ......... ......... ......... -130 -130
private foundations.
2. Commercial aviation fuel: extend 4.3 10/1/95................................. -417 -439 -6 ......... ......... ......... ......... -863 -863
cents/gallon exemption through 9/30/97;
but conditional on extension of Airport
and Airway Trust Fund taxes.
3. Extend all Airport and Airway Trust Fund 1/1/96..................................
excise taxes through 9/30/96--House bill
\4\.
(8)No Revenue Effect
4. Extend IRS user fees through 9/30/02 10/1/00................................. ......... ......... ......... ......... ......... 35 35 ........... 70
\5\--Senate amendment.
5. Sunset the low-income housing tax credit DOE..................................... -24 -29 64 333 674 1,046 1,431 1,018 3,494
after 12/31/97; sunset national pool after
12/31/95--House bill.
6. Superfund and oil spill liability taxes:
a. Extend Superfund excise taxes DOE..................................... 319 16 ......... ......... ......... ......... ......... 335 335
through 9/30/96; receipts go to
general revenues after 7/31/96.
b. Extend Superfund AMt through 12/31/ DOE..................................... 290 193 ......... ......... ......... ......... ......... 483 483
96 \6\.
c. Extend oil spill tax through 9/30/ 1/1/96.................................. ......... ......... ......... ......... ......... 60 60 ........... 120
02--Senate amendment.
7. Extend excise tax refund authority for DOE.....................................
alcohol fuels blenders--Senate amendment.
(8)Negligible Revenue Effect
8. Extend section 29 binding contract date DOE..................................... ......... -30 -81 -97 -93 -96 -101 -301 -499
6 months from date of enactment and placed-
in-service date to 12/3/97 for biomass and
coal.
9. Exempt from diesel dyeing requirement fcqa DOE................................ (\2\) -1 -1 -1 -1 -1 -1 -3 -4
any States exempt from Clean Air Act
dyeing requirement (permanent).
10. Suspend tax on diesel fuel for 1/1/96.................................. -24 -27 -4 -4 -1 ......... ......... -60 -61
recreational boats--Senate amendment
(through 6/30/97).
11. Permanent extension of FUTA exemption 1/1/95.................................. -5 -3 -3 -3 -3 -3 -3 -17 -23
for alien agricultural workers \5\--House
bill.
12. Information Sharing Provision: DOE..................................... ......... ......... ......... 14 28 42 56 42 140
Extension of disclosure of return
Information to Department of Veterans
Affairs (outlay reduction) \5\--House
bill, except extend through 9/30/02 only.
VII. Medical savings accounts:
1. Medical Savings Accounts--House bill, tyba 12/31/95........................... -122 -211 -258 -307 -362 -391 -421 -1,260 -2,072
except follow the Senate amendment with
respect to (a) maximum contribution limit
($2,000 single and $4,000 family); (b) tax-
free build up of earnings; (c) definition
of qualified medical expenses; (d) post-
death distribution rules; and (e)
clarification relating to capitalization
of policy acquisition costs.
VIII. Taxpayer bill of rights 2:
1. Expansion of authority to abate interest DOE..................................... (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\8\)
2. Extension of interest-free period for 6/30/96................................. -2 -7 -8 -8 -8 -9 -9 -10 -51
payment of tax--House bill.
3. Joint return may be made after separate tyba DOE................................ (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\8\)
returns without full payment of tax.
4. Increase levy exemption \9\............. lia 12/31/95............................ (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\10\)
5. Offers-in-compromise--Senate amendment.. DOE..................................... (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\8\)
6. Increased limit on attorney fees--House DOE..................................... -1 -1 -1 -1 -1 -1 -1 -5 -7
bill.
7. Award of litigation costs permitted in pca DOE................................. (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\8\)
declaratory judgment proceedings.
8. Increase in limit on recovery of civil DOE..................................... -3 -3 -3 -3 -3 -3 -3 -15 -21
damages--House bill.
9. Enrolled agents included as third-party sla DOE................................. (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\8\)
recordkeepers.
10. Annual reminders to taxpayers with 1/1/96.................................. (\11\) (\11\) (\11\) (\11\) (\11\) (\11\) (\11\) (\12\) (\12\)
delinquent accounts.

[[Page S 17268]]

IX. Casualty and involuntary conversion
provision:
1. Changes involuntary conversion rules for DDA 12/31/94............................ -6 -14 -10 -10 -10 -10 -10 -50 -70
Presidentially declared disaster areas--
Senate amendment.
X. Exempt and charitable organizations
provisions:
1. Provide tax-exempt status to common tyea 12/31/95........................... -4 -6 -6 -7 -7 -7 -8 -30 -45
investment funds--Senate amendment.
2. Exclusion from UBIT for certain pra 12/31/95............................
corporate sponsorship payments--Senate
amendment.
(8) Negligible Revenue Effect
3. Intermediate sanctions for certain tax- 9/14/95 1/1/96.......................... 4 4 4 5 5 5 6 22 33
exempt organizations--House bill, with
technical modifications.
XI. Corporate and other reforms:
1. Reform the tax treatment of certain da 5/3/95............................... -83 -100 -17 84 209 343 437 93 873
corporate stock reemptions--House bill.
2. Require corporate tax shelter reporting; alolRSg................................. (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\13\) (\13\)
modify recipient notice to 90 days.
3. Disallow interest deduction for ipoaa 10/31/95.......................... 220 579 883 1,369 1,749 1,856 1,895 4,800 8.551
corporate-owned life insurnce policy
loans--Senate amendment, but phase out
disallowance (90% in 1996, 80% in 1997,
and 70% in 1998; cap borrowing at 20,000
lives); cap interest rate (with special
rules for grandfathered plans); exception
for key person policies with 10 lives;
limit borrowing in 1996 to policies
purchased in 1994 and 1995.
4. Phase out preferential tax deferral for (\15\).................................. 26 37 38 39 40 41 42 179 261
certain large farm corporations required
to use accrual accounting.
5. Phase-in repeal of section 936; Wage tyba 12/3/95............................ 255 605 552 596 498 516 746 2,506 3,766
credit companies--6 years of present law
and then House bill with modified base
period; income companies--2 years of
present law and then House bill with
modified base period; QPSII--repealed 1/1/
96.
6. Corporate accounting--reform of income ppisa 9/13/95........................... 32 69 29 13 14 16 19 157 192
forecast method--Senate amendment.
7. Permit transfers of excess pension ta DOE.................................. 1,439 1,375 958 554 195 151 -19 4,521 4,651
assets--House bill but (a) require asset
cushion equal to the greater of (i) 125%
of termination liability (using PBGC
assumptions) and (ii) the plan's accrued
liability; (b) permit withdrawals only for
ERISA-covered benefits; (c) prohibit
transfers when company in bankruptcy; (d)
no excise tax; (e) extend for 1 additional
year; and (f) conform present-law section
420 asset cushion.
8. Modify exclusion of damages received on ama 12/31/95............................ 34 51 55 59 61 64 68 260 392
account of personal injury or sickness--
Senate amendment, with technical
clarifications.
9. Require tax reporting for payments to pma 12/31/96............................ ......... (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\13\) (\13\)
attorneys; delay effective date for 1 year.
10. Expatriation tax provisions--House bill 2/6/95.................................. 64 97 146 199 254 289 304 760 1,353
11. Remove business exclusion for energy ara 12/31/95............................ 30 96 100 104 107 109 111 437 657
subsidies provided by public utilties--
House bill, but modify effective date.
12. Modify basis adjustment rules under ica 9/13/95............................. 2 4 6 9 14 20 29 35 84
section 1033.
13. Modify the exception to the related ica 9/13/95............................. 1 2 4 6 8 11 13 21 45
party rule of section 1033 for individuals
to only provide an exception for de
minimis amounts ($100,000).
14. Disallow rollover under section 1034 to tyea 12/31/95........................... 1 3 4 5 6 8 9 19 35
extent of previously claimed depreciation
for home office or other depreciable use
of residence.
15. Provide that rollover of gain on sale sea 12/31/95............................ (\16\) (\16\) (\16\) (\16\) (\16\) (\16\) (\16\) (\16\) (\16\)
of a principal residence cannot be elected
unless the replacement property purchased
is located within the United States (limit
to resident aliens who terminate residence
within 2 years).
16. Repeal exemption for withholding on 1/1/96.................................. 20 6 6 6 6 7 7 44 58
gambling winnings from bingo and keno
where proceeds exceed $5,000.
17. Repeal tax credit for contributions to DOE..................................... 1 1 2 2 2 2 2 8 12
special Community Development Corporations.
18. Repeal advance refunds of diesel fuel 1/1/96.................................. 8 19 19 19 19 19 19 84 122
tax for diesel cars and light trucks.
19. Apply failure to pay penalty to DOE..................................... 1 3 29 30 32 33 35 95 163
substitute returns.
20. Allow conversion of scholarship funding DOE..................................... 3 4 6 8 10 10 9 31 48
corporation to taxable corporation--House
bill.
21. Apply look-through rule for purposes of gira 12/31/95........................... 7 23 24 27 30 32 34 111 177
characterizing certain subpart F insurance
income as UBIT--House bill.
22. Repeal 50% Interest Income exclusion ima 10/13/95............................ 27 69 109 149 187 224 261 541 1,026
for financial institution loans to ESOPs--
Senate amendment.
23. Modify the ozone depleting chemicals DOE..................................... (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\10\) (\17\)
tax for imported recycled halons--Senate
amendment.
24. Modify two county tax-exempt bond rule DOE..................................... (\16\) 1 2 3 4 5 6 10 22
for local furnishers of electricity or
gas--Senate amendment.
25. Provide tax-exempt bonds status for bia DOE................................. (\2\) -1 -1 -1 -1 -1 -1 -4 -8
Alaska Power Administration sale--Senate
amendment.
26. Modify treatment of foreign trusts-- (\18\).................................. 93 162 171 180 188 197 206 794 1,197
Senate amendment.
27. Provide for flow through treatment for DOE..................................... 34 18 10 5 2 ......... -2 69 67
Financial Asset Securitization Investment
Trusts (FASITs)--Senate amendment.
28. Tax-free treatment of contributions in (\19\).................................. -16 -26 -12 4 19 32 43 -31 43
aid of construction for water utilities;
change depreciation for water utilities--
Senate amendment.
29. Provide 3-year amortization of tyeo/a 1/1/95........................... -11 -14 -8 -4 ......... ......... ......... -37 -37
intrastate operating rights of truckers--
Senate amendment.
30. A life insurance company may elect to tyba 12/31/94........................... 1 (\16\) (\2\) -1 (\2\) (\16\) (\16\) (\16\) 1
treat 20% of capital losses as ordinary
income, spread over 10 years; the taxpayer
has the option to change the treatment of
these losses in the future--Senate
amendment, with modifications.
31. Clarify that newspaper carriers and spa 12/31/95............................
distributors are independent contractors--
Senate amendment.
(8) Negligible Revenue Effect
32. Allow for tax-free conversion of common ta 12/31/95............................. -4 -9 -8 -8 -8 -8 -8 -37 -52
trust funds to mutual funds--Senate
amendment.
33. Eliminate interest allocation exception tyba 12/31/95........................... 41 93 107 123 141 163 187 505 855
for certain nonfinancial corporations--
Senate amendment.
34. Modify depreciation for small motor ppiso/a/b DOE........................... -1 -4 -23 -26 -29 -16 -19 -83 -118
fuel/convenience store outlets--Senate
amendment.
35. Repeal of section 593 with residential tyba 12/31/95........................... 63 95 216 280 277 272 260 931 1,462
loan test for 1996 and 1997.
36. Phase out and extend luxury automobile 1/1/96.................................. -41 -97 -159 -204 179 265 200 -322 143
excise tax through 12/31/02.
XII. Technical correction provision: Luxury DOE..................................... 14 ......... ......... ......... ......... ......... ......... 14 14
Excise Tax Indexing.
XIII. Simplification provisions relating to
individuals:
1. Rollover of gain on sale of principal
residence:
a. Multiple sales within rollover sa DOE.................................. -1 -2 -2 -2 -2 -2 -3 -9 -14
period--House bill.
b. Rules in case of divorce--House bill sa DOE.................................. -2 -2 -2 -2 -3 -3 -3 -11 -17
2. One-time exclusion on the sale of a sa 9/13/95.............................. -10 -19 -20 -21 -22 -23 -24 -92 -139
principal residence by an individual who
has attained age 55 (allow additional
exclusion for married couples under
certain conditions where one spouse has
claimed an exclusion prior to their
marriage)--House bill.
3. Treatment of certain reimbursed expenses tyba 12/31/95........................... (\2\) -1 -1 -1 -1 -1 -1 -5 -6
of rural mail carriers--House bill.
4. Travel expenses of Federal employee tyba DOE................................ (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) -1 -1
participating in a Federal criminal
investigation--House bill.
5. Treatment of storage of product samples-- tyba 12/31/95........................... (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) -2
House bill.
XIV. Pension simplification provision:
A. Simplified Distribution Rules:
1. Sunset of 5-year income averaging tyba 12/31/98........................... 24 74 63 109 80 42 17 350 409
for lump-sum distributions--Senate
amendment.
2. Repeal of $5,000 exclusion of tyba 12/31/95........................... 16 16 49 52 54 55 55 217 328
employees' death benefits.
3. Simplified method for taxing annuity asda 12/31/95........................... 10 28 28 28 29 29 29 123 182
distributions under certain employer
plans--Senate amendment.
4. Minimum required distribution....... yba 12/31/95............................ -1 -4 -4 -4 -4 -4 -4 -17 -25
B. Increased Access to Pension Plans--Tax- yba 12/31/96............................ ......... -8 -22 -24 -25 -26 -28 -79 -133
exempt organizations eligible under
section 401(k)--Senate amendment, but
permit all tax exempts and Indian tribes
to have 401(k) plans.
C. Nondiscrimination Provisions:
1. Simplified definition of highly yba 12/31/95............................
compensated employees--House bill,
with modifications.
(8) Considered in Other Provisions
2. Repeal of family aggregation rules.. yba 12/31/95............................
(8) Considered in Other Provisions

[[Page S 17269]]

3. Modification of additional yba 12/31/95............................
participation requirements.
(8) Negligible Revenue Effect
4. Safe-harbor nondiscrimination rules yba 12/31/98............................ ......... ......... ......... -42 -162 -167 -171 -294 -541
for qualified cash or deferred
arrangements and matching
contributions \20\--Senate amendment,
with modification.
D. Miscellaneous Pension Simplification:
1. Treatment of leased employees-- yba 12/31/95............................
Senate amendment.
(8) Negligible Revenue Effect
2. Plans covering self-employed yba 12/31/95............................
individuals.
(8) Negligible Revenue Effect
3. Elimination of special vesting rule yba 12/31/95............................ (\2\) -1 -1 -1 -1 -1 -1 -4 -6
for multiemployer plans.
4. Distributions under rural DOE.....................................
cooperative plans--Senate amendment,
with modifications.
(8) Negligible Revenue Effect
5. Treatment of governmental plans tybo/a DOE..............................
under section 415--House bill, with
Senate effective date.
(8) Negligible Revenue Effect
6. Uniform retirement age.............. 1/1/96..................................
(8) Considered in Other Provisions
7. Contributions on behalf of disabled yba 12/31/95............................
employees.
(8) Negligible Revenue Effect
8. Treatment of deferred compensation tyba 12/31/95........................... (\2\) -1 -1 -1 -1 -2 -2 -4 -8
plans of State and local governments
and tax-exempt organizations--House
bill, with modification.
9. Require Individual ownership of DOE..................................... -6 -18 -21 -24 -25 -25 -26 -94 -145
section 457 plan assets--House bill,
with effective date change (i.e., to
the end of the first legislative
session after enactment).
10. Correction of GATT interest and eall GATT............................... -4 -4 -4 -4 ......... ......... ......... -16 -16
mortality rate provisions in the
Retirement Protection Act--House bill,
with modifications.
11. Multiple salary reduction tyba 12/31/95...........................
agreements permitted under section
403(b).
(8) Negligible Revenue Effect
12. Repeal of combined plan limit-- yba 12/31/98............................ ......... ......... ......... -70 -189 -195 -201 -259 -654
House bill, with Senate effective date.
13. Modify notice required of right to pyba 12/31/95...........................
qualified joint and survivor annuity--
House bill.
(8) Negligible Revenue Effect
14. 3-year waiver of excess 1/1/96.................................. 38 40 43 3 ......... ......... ......... 124 124
distribution tax--Senate amendment.
15. Definition of compensation for yba 12/31/97............................ ......... ......... -1 -1 -2 -2 -2 -4 -8
section 415 purposes--Senate amendment.
16. Increase section 4975 excise tax on ptoo/a 1/1/96........................... 1 4 4 4 4 4 4 17 24
prohibited transactions from 5% to
10%--Senate amendment.
17. Treatment of Indian tribal pybb 1/1/95.............................
governments under section 403(b)--
Senate amendment provision and permit
rollover to 401(k).
(8) Negligible Revenue Effect
18. Application of elective deferral tyba 12/31/95...........................
limit to section 403(b) plans--Senate
amendment, with modifications.
(8) Negligible Revenue Effect
19. Establish SIMPLE pension plan-- yba 12/31/95............................ -45 -69 -71 -74 -76 -79 -82 -335 -497
Senate amendment, but repeal SEPs.
20. Increase the self-employed health tyba 12/31/97........................... ......... ......... -36 -113 -168 -272 -399 -317 -988
insurance deduction (35% in 1998 and
1999; 40% in 2000 and 2001; and 50% in
2002 and thereafter).
XV. Partnership simplification provisions:
1. Simplified reporting to partners--House tyba 12/31/95........................... 5 6 6 7 7 7 7 31 45
bill, but elective.
2. Returns required on magnetic media for tyba 12/31/95...........................
partnerships with 100 partners or more--
House bill.
(8) Negligible Revenue Effect
XVI. Foreign tax simplification provisions:
A. Modification of Passive Foreign tyba 12/31/95........................... -7 -18 -20 -21 -22 -24 -25 -88 -137
Investment Company Provisions to Eliminate
Overlap with Subpart F and to Allow Mark-
to-Market Election--House bill.
B. Modifications to Provisions Affecting
Controlled Foreign Corporations:
1. General provisions--House bill...... ........................................ -1 -2 -2 -3 -3 -3 -3 -11 -17
2. Repeal of excess passive assets tyba 9/30/95............................ -17 -26 -29 -35 -41 -45 -51 -148 -244
provision (section 956A)--House bill.
XVII. Other income tax simplification
provisions:
A. Subchapter S Corporations:
1. Increase number of eligible tyba 12/31/95........................... -7 -12 -14 -16 -20 -22 -25 -69 -116
shareholders--House bill.
2. Permit certain trusts to hold stock tyba 12/31/95........................... -1 -2 -2 -2 -2 -2 -2 -9 -13
in S corporations--House bill.
3. Extend holding period for certain tyba 12/31/95........................... (10) (10) (10) (10) (10) (10) (10) (10) (10)
trusts--House bill.
4. Financial Institutions permitted to tyba 12/31/95........................... (2) (2) (2) (2) (2) (2) (2) (2) -1
hold safe-harbor debt--House bill.
5. Authority to validate certain tyba 12/31/95........................... (2) (2) (2) (2) (2) (2) (2) (2) -1
invalid elections--House bill.
6. Allow Interim losing of the books... tyba 12/31/95...........................
(8)Negligible Revenue Effect
7. Expand post-termination period and tyba 12/31/95........................... (2) (2) (2) (2) (2) (2) (2) (2) -1
amend subchapter S audit procedures--
House bill.
8. S corporations permitted to hold S tyba 12/31/95........................... -3 -7 -9 -11 -13 -15 -17 -43 -75
or C subsidiaries--House bill.
9. Treatment of distributions during tyba 12/31/95........................... (2) (2) (2) (2) (2) (2) (2) (2) -1
loss years--House bill.
10. Treatment of S corporations as tyba 12/31/95........................... (10) (10) (10) (10) (10) (10) (10) (10) (10)
shareholders in C corporations--House
bill.
11. Elimination of certain earnings and tyba 12/31/95........................... (10) (10) (10) (10) (10) (10) (10) (10) (10)
profits of S corporations--House bill.
12. Treatment of certain losses carried tyba 12/31/95........................... (10) (10) (10) (10) (10) (10) (10) (10) (10)
over under at-risk rules--House bill.
13. Adjustments to basis of Inherited S dda DOE................................. (11) (11) (11) (11) (11) (11) (11) (11) (11)
stock--House bill.
14. Treatment of certain real estate tyba 12/31/95........................... (2) -1 -1 -2 -2 -2 -2 -6 -10
held by an S corporation--House bill.
15. Transition rule for elections after tyba 12/31/95........................... (10) (10) (10) (10) (10) (10) (10) (10) (10)
termination--House bill.
16. Interaction of subchapter S ........................................ -3 -10 -26 -32 -37 -38 39 -108 -185
changes--House bill.
B. Regulated Investment Companies (RICs)-- tyea DOE................................ -9 -17 -20 -24 -28 -32 -35 -98 -164
Repeal of 30% gross income limitation for
RICs--House bill.
C. Accounting Provisions:
1. Modifications to look-back method cc/tyea/E............................... -2 -3 -3 -3 -4 -4 -4 -15 -23
for long-term contracts--House bill.
2. Allow traders to adopt mark-to- DOE.....................................
market accounting for securities--
House bill.
(8) Negligible Revenue Effect
3. Modification of Treasury ruling tyba DOE................................ -4 -4 -5 -5 -5 -5 -5 -23 -33
requirement for nuclear
decommissioning funds--House bill.
4. Provide that a taxpayer may elect to pra/cdoa 12/31/92....................... 2 -1 -1 -1 -1 -1 -1 -2 -4
include in income crop insurance
proceeds and disaster payments in the
year of the disaster or in the
following year--Senate amendment.
D. Tax-Exempt Bond Provision--Repeal of bla DOE.................................
debt service-based limitation on
investment in certain non-purpose
investments--House bill.
(8) Negligible Revenue Effect
E. Insurance Provisions:
1. Treatment of certain insurance tyba 12/31/95........................... 6 -4 5 4 4 12 -7 15 21
contracts on retired lives.
2. Treatment of modified guaranteed tyba 12/31/95........................... -1 2 4 1 2 1 -1 8 8
contracts.
F. Other Provisions:
1. Closing of partnership taxable year tyba 12/31/95........................... (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) -1
with respect to deceased partner--
House bill.
2. Modifications to the FICA tip eaii OBRA '93...........................
credit--House bill.
(8) Negligible Revenue Effect
3. Conform due date for first quarter 1/1/96..................................
estimated tax by private foundations--
House bill.
(8) Negligible Revenue Effect
4. Treatment of dues paid to tyba 12/31/94...........................
agricultural or horticultural
organizations.
(8) Negligible Revenue Effect
Student loan interest deduction ($2,500 polda 12/31/95.......................... -52 -152 -157 -162 -168 -174 -180 -691 -1,046
above-the-line deduction; phaseout
$45,000-$65,000 singles/$65,000-
$85,000 joint).
XVIII. Estate, gift, and trust tax provisions:
A. Estate and Trust Income Tax Provisions:
1. Certain revocable trusts treated as DOE..................................... (\10\) (\10\) (\10\) (\10\) (\10\) (\10\) (\10\) (\21\) (\21\)
part of estate--House bill.
2. Distributions during first 65 days DOE.....................................
of taxable year of estate--House bill.
(8) Negligible Revenue Effect
3. Separate share rules available to DOE.....................................
estates--House bill.
(8) Negligible Revenue Effect
4. Executor of estate and beneficiaries DOE.....................................
treated as related persons for
disallowance of losses--House bill.
(8) Negligible Revenue Effect
5. Limitation on taxable year of DOE.....................................
estate--House bill.
(8) Negligible Revenue Effect
6. Simplified taxation of earnings of tyba DOE................................ (\11\) (\11\) (\11\) (\11\) (\12\) (\12\) (\12\) (\12\) 8
pre-need funeral trusts--House bill,
with $7,000 limit.
B. Estate and Gift Tax Provisions:
1. Clarification of waiver of certain DOE.....................................
rights of recovery--House bill.
(8) Negligible Revenue Effect
2. Adjustments for gifts within 3 years DOE..................................... ......... -6 -6 -7 -7 -7 -7 -26 -40
of decedent's death--House bill.
3. Clarification of qualified DOE.....................................
terminable interest rules--House bill.
(8) Negligible Revenue Effect
4. Transitional rule under section eali OBRA '90...........................
2056A--House bill.
(8) Negligible Revenue Effect
5. Opportunity to correct certain DOE.....................................
failures under section 2032A--House
bill.
(8) Negligible Revenue Effect
6. Gifts may not be revalued for estate ga DOE.................................. ......... -15 -16 -16 -18 -21 -26 -65 -112
tax purposes after expiration of
statute of limitations--House bill.

[[Page S 17270]]

7. Clarifications relating to DOE..................................... ......... -2 -2 -2 -2 -3 -3 -8 -14
disclaimers--House bill.
8. Clarify relationship between DOE..................................... ......... -3 -4 -4 -4 -4 -4 -15 -23
community property rights and
retirement benefits--House bill.
9. Treatment under qualified domestic DOE.....................................
trust rules of forms of ownership
which are not trusts--House bill.
(8) Negligible Revenue Effect
C. Generation-Skipping Tax Provisions:
1. Taxable termination not to include DOE.....................................
direct skips--House bill.
(8) Negligible Revenue Effect
2. Modification of generation-skipping gsta 12/31/94........................... -3 -4 -4 -4 -4 -4 -4 -19 -27
transfer tax for transfers to
individuals with deceased parents--
Senate amendment.
XIX. Excise tax simplification provisions:
A. Distilled Spirits, Wines, and Beer:
1. Credit or refund for imported fcq DOE+180 days........................
bottled distilled spirits returned to
bonded premises--House bill.
(8) Negligible Revenue Effect
2. Fermented material from any brewery fcq DOE+180 days........................
may be received at a distilled spirits
plant--House bill.
(8) Negligible Revenue Effect
3. Refund of tax on wine returned to fcq DOE+180 days........................
bond not limited to unmerchantable
wine--House bill.
(8) Negligible Revenue Effect
4. Beer may be withdrawn free of tax fcq DOE+180 days........................
for destruction--House bill.
(8) Negligible Revenue Effect
5. Transfer to brewery of beer imported fcq DOE+180 days........................
in bulk without payment of tax--House
bill.
(8) Negligible Revenue Effect
B. Consolidate Imposition of Aviation 1/1/96.................................. (\16\) ......... ......... ......... ......... ......... ......... (\16\) (\16\)
Gasoline Excise Tax--House bill.
C. Other Excise Tax Provision--Clarify DOE.....................................
present law for retail truck excise tax
(certain activities do not constitute
remanufacture)--House bill.
(8) Negligible Revenue Effect
XX. Administrative simplification provision:
A. General Provision--Certain notices 1/1/96.................................. (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) -1
disregarded under provision increasing
interest rate on large corporate
underpayments--House bill.
XXI. Increase in public debt limit............. ........................................ ......... ......... ......... ......... ......... ......... ......... ........... ...........
------------------------------------------------------------------------------------------------------------------------------------------------
Total of revenue provisions.............. ........................................ -5,408 -37,217 -35,567 -37,438 -38,594 -39,856 -32,430 -154,155 -226,450
------------------------------------------------------------------------------------------------------------------------------------------------
Total of outlay provisions............... ........................................ ......... ......... ......... 14 28 42 56 42 140
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The Earned Income Credit provisions are included in Title XII of the conference agreement; the budget effects are shown in a separate table.
\2\ Loss of less than $500,000.
\3\ Credit rate at 35% on first $6,000 of income, eligible workers expanded to include welfare cash recipients and veteran foodstamp recipients; 500 hour work requirement.
\4\ Section 257(b)(2)(c) of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended by the Budget Enforcement Act of 1990, indicates that ``excise taxes dedicated to a trust
fund, if expiring, are assumed to be extended at current rates''. Since the revenues from these taxes are dedicated to the Airport and Airway Trust Fund, an extension of the taxes is scored
as having no revenue effect.
\5\ Estimates provided by the Congressional Budget Office (CBO).
\6\ Estimates presented after interaction with Alternative Minimum tax provisions and are shown net of offset with the corporate income tax.
\7\ Loss of less than $1 million.
\8\ Loss of less than $2 million.
\9\ Increase exemption for books and tools of trade to $1,250.
\10\ Loss of less than $5 million.
\11\ Gain of less than $1 million.
\12\ Gain of less than $5 million.
\13\ Gain of less than $25 million.
\14\ Gain of less than $30 million.
\15\ No new suspense accounts could be established in taxable years ending after 9/13/95. The income in existing suspense accounts would be recognized in equal installments over a 20-years
period beginning with the first taxable year beginning after 9/13/95.
\16\ Gain of less than $500,000.
\17\ Loss of less than $10 million.
\18\ Various effective dates depending on provisions.
\19\ Effective for amounts received after date of enactment and property placed in service after date of enactment with the exception of certain property subject to a binding contract on the
date of enactment.
\20\ This provision considers interaction effects of SIMPLE retirement plan provisions.
\21\ Loss of less than $25 million.

Legend for ``Effective'' column: ama=awards made after; ara=amounts received after; asda=annuity starting date after; aloIRSg=after Issuance of Internal Revenue Service guidance; bia DOE=bonds
issued after date of enactment; cc/tyea/E=contracts completed in taxable years ending after date of enactment; cela=contracts entered into after;cla=cash leases after; da=distributions
after; dda=decedents dying after; DDA=disasters declared after; dda DOE=decedents dying after date of enactment; dda/gma=decedents dying after and gifts made after; DOE=date of enactment;
eall GATT=effective as if included in GATT; eall OBRA'90=effective as if included in the Omnibus Budget Reconciliation Act of 1990; eall OBRA'93=effective as if included in the Omnibus
Budget Reconciliation Act of 1993; fcqa DOE=first calendar quarter after date of enactment; fcq DOE+180 days=beginning of first calendar quarter that starts at least 180 days after date of
enactment; ga DOE=gifts after date of enactment; gira=gross income received after; gsta=generation skipping transfers after; ica=involuntary conversion after; lpoaa=interest paid or accrued
after; lia=levies issued after; lida=leasehold improvements disposed of after; lma=loans made after; lyba=limitation years beginning after; pca DOE=proceeding commenced after date of
enactment; pma=payments made after; polda=payments on interest due after; ppisa=property placed in service after; pplso/a/b DOE=property placed in service on, after, or before date of
enactment; pra=payments received after; pra/cdoa=payments received after, for crop damage occurring after; ptoo/a=prohibited transactions occurring on or after; pyba=plan years beginning
after; pybb=plan years beginning before; sa=sales after; sea=sales and exchanges after; sla DOE=summonses issued after date of enactment; spa=services performed after; ta=transfers after; ta
DOE=transfers after date of enactment; tyba=taxable years beginning after; tyba DOE=taxable years beginning after date of enactment; tybo/a DOE=taxable years beginning on or after date of
enactment; tyea=taxable years ending after;tyea DOE=taxable years ending after date of enactment; tyeo/a=taxable years ending on or after; yba=years beginning after.

Note.--Details may not add to totals due to rounding.

Source: Joint Committee on Taxation.

ESTIMATED BUDGETARY EFFECTS OF THE CONFERENCE AGREEMENT TO THE BALANCED BUDGET RECONCILIATION ACT OF 1995--TITLE XII, TEACHING HOSPITALS AND GRADUATE
MEDICAL EDUCATION; ASSET SALES; WELFARE; AND OTHER PROVISIONS
[By fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
7 year
1996 1997 1998 1999 2000 2001 2002 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
ASSET SALES a

Subtitle F: National Defense Stockpile:
Budget Authority............................ -21 -79 -79 -79 -80 -155 -156 -649
Outlays..................................... -21 -79 -79 -79 -80 -155 -156 -649

DIRECT SPENDING

Subtitle A: Block Grants for Temporary
Assistance for Needy Families:
Budget Authority............................ -164 -1,223 -1,489 -1,826 -2,215 -2,117 -2,394 -11,428
Outlays..................................... -690 -993 -1,224 -1,521 -2,080 -2,062 -2,359 -10,929
Subtitle B: Supplemental Security Income:
Budget Authority............................ -51 -1,258 -1,896 -2,457 -3,029 -2,805 -3,290 -14,766
Outlays..................................... 13 -1,168 -1,916 -2,398 -2,988 -2,784 -3,270 -14,511
Subtitle C: Child Support:
Budget Authority............................ 104 -36 75 51 4 43 -124 117
Outlays..................................... 104 -36 75 51 4 43 -124 117
Subtitle D: Restricting Welfare and Public
Benefits for Legal Aliens:
Budget Authority............................ -125 -2,800 -3,645 -3,615 -3,815 -3,345 -3,640 -20,985
Outlays..................................... -125 -2,800 -3,640 -3,610 -3,815 -3,340 -3,640 -20,970
Subtitle E: Teaching Hospitals and Graduate
Medical Education Trust Fund:
Budget Authority............................ 0 1,100 1,300 2,000 2,600 3,100 3,400 13,500
Outlays..................................... 0 1,100 1,300 2,000 2,600 3,100 3,400 13,500
Subtitle G: Child Protection Block Grant
Programs and Foster Care and Adoption
Assistance:
Budget Authority............................ 1,399 -329 -373 -424 -470 -521 -559 -1,277
Outlays..................................... 1,610 -176 -349 -403 -449 -493 -537 -797
Subtitle H: Child Care:
Budget Authority............................ 1,026 1,240 1,320 1,400 1,500 1,625 1,745 9,856
Outlays..................................... 909 1,219 1,312 1,392 1,490 1,613 1,733 9,668
Subtitle I: Child Care Nutrition Programs:
Budget Authority............................ -124 -634 -749 -843 -904 -1,004 -1,114 -5,372
Outlays..................................... -110 -583 -730 -828 -891 -990 -1,095 -5,207
Subtitle J: Food Stamps and Commodity
Distribution:
Budget Authority............................ -918 -3,023 -3,739 -4,315 -4,860 -5,437 -6,060 -28,352
Outlays..................................... -918 -3,023 -3,739 -4,315 -4,860 -5,437 -6,060 -28,352

[[Page S 17271]]

Subtitle K: Miscellaneous:
Budget Authority............................ -20 -580 -580 -585 -585 -585 -585 -3,520
Outlays..................................... -20 -524 -580 -585 -585 -585 -585 -3,464
Subtitle L: Reform of the Earned Income Credit:
Budget Authority............................ -163 -3,268 -3,513 -3,756 -4,045 -4,290 -4,459 -23,494
Outlays..................................... -163 -3,268 -3,513 -3,756 -4,045 -4,290 -4,459 -23,494
Subtitle M: Clinical Laboratories:
Budget Authority............................ b b b b b b b b
Outlays..................................... b b b b b b b b
Subtotal, Direct Spending:
Budget Authority............................ 964 -10,811 -13,279 -14,370 -15,809 -15,336 -17,080 -85,721
Outlays..................................... 610 -10,232 13,004 -13,973 -15,619 -15,225 -16,996 -84,439
Total Mandatory Spending (Asset Sales plus
Direct Spending):
Estimated Budget Authority.................. 943 -10,890 -13,358 -14,449 -15,889 -15,491 -17,236 -86,370
Estimated Outlays........................... 589 -10,311 -13,083 -14,052 -15,699 -15,380 -17,152 -85,088

REVENUES

Subtitle L: Reform of the Earned Income Credit:
Revenues....................................... 60 1,183 1,294 1,391 1,493 1,627 1,845 8,893
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Under the 1996 budget resolution, proceeds from asset sales are counted in the budget totals for purposes of Congressional scoring. Under the Balanced
Budget Act, however, proceeds from asset sales are not counted in determining compliance with the discretionary spending limits or pay-as-you-go
requirement.
b CBO cannot estimate whether this proposal would, on balance, increase or decrease spending for Medicare.

Mr. EXON. Turning to the second point of order,
If my colleagues consider the issue fairly, I believe they will agree
that the tax title violates section 313(b)(1)(E) of the Budget Act.
That subparagraph prohibits provisions that balloon the deficit in the
out-years, unless the loss is offset by out-year savings from other
provisions contained in the same title. I ask unanimous consent that
the text and legislative history of section 313(b)(1)(E) of the Budget
Act be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

(E) \1\ a provision shall be considered to be extraneous if
it increases, or would increase, net outlays,\2\ or if it
decreases, or would decrease, revenues during a fiscal year
after the fiscal years covered by such reconciliation bill or
reconciliation resolution,\3\ and such increases or decreases
are greater \4\ than outlay reductions or revenue increases
resulting from other provisions in such title \5\ in such
year; \6\

footnotes

\1\ Section 205(b) of the Balanced Budget and Emergency
Deficit Control Reaffirmation Act of 1987 added subparagraph
(E). Pub. L. No. 100-119, Sec. 205(b), 101 Stat. 754, 784-85
(1987).
\2\ Section 3(1) defines ``outlays.''
\3\ Section 310(b) defines ``reconciliation resolution.''
\4\ The Congressional Budget Act makes no exception for
violations of negligible amounts.
\5\ This basis of extraneousness depends on the balance of
the title in which the drafters locate a provision.
Consequently, attentive drafters can avoid this violation by
combining or rearranging the contents of titles so as to
ensure that no title worsens the deficit in any out-year.
\6\ Section 205(b) of the Balanced Budget and Emergency
Deficit Control Reaffirmation Act of 1987 added subparagraph
(E). Pub. L. No. 100-119, Sec. 205(b), 101 Stat. 754, 784-85
(1987). The joint statement of managers in the conference
report on that bill stated with regard to subparagraph (E):
6. Extraneous Provisions in Reconciliation Legislation
Current Law:
Title XX of the Consolidated Omnibus Budget Reconciliation
Act of 1985 (P.L. 99-272), as amended by Section 7006 of the
Omnibus Budget Reconciliation Act of 1986 (P.L. 99-509),
established a temporary rule in the Senate--referred to as
the ``Byrd Rule''--to exclude extraneous matter from
reconciliation legislation. The rule specifies the types of
provisions considered to be extraneous, provides for a point
of order against the inclusion of extraneous matter in
reconciliation measures, and requires a three-fifths vote of
the Senate to waive or appeal the point of order. The rule
expires on January 2, 1988.
Senate Amendment:
The Senate amendment (Section 228) amends the Byrd Rule
(which applies only in the Senate) to include in the
definition of extraneous matter provisions which increase net
outlays or decrease revenues during a fiscal year beyond
those fiscal years covered by the reconciliation measure and
which result in a net increase in the deficit for that fiscal
year. The Senate amendment also extends the expiration date
of the Byrd Rule to September 30, 1992.
Conference Agreement:
The House recedes and concurs in the Senate amendment. This
rule applies only in the Senate.
It is the intent of the conferees that expiration after the
reconciliation period of a revenue increase or extension
provided for in a reconciliation bill would not, of itself,
be considered a revenue decrease for purposes of this
provision. It could, however, contribute to a finding that a
spending increase or a positive revenue decrease in that
legislation violated this rule.

H.R. Conf. Rep. No. 100-313, 100th Cong., 1st Sess. 65
(1987), reprinted in 1987 U.S.C.C.A.N. 739, 765.

Mr. EXON. And I say to my colleagues that the tax title in the
reconciliation conference report creates enormous loses in the out-
years. Just look at the capital gains provisions, for example, which
lose nearly $12 billion in 2002, over $13 billion in 2003, and nearly
$16 billion in 2004. And these numbers are from the Joint Committee on
Taxation, which understates the losses from capital gains relative to
the estimates of the Treasury Department.
In total, the tax breaks in this bill worsen the deficit by over $47
billion in 2003, over $51 billion in 2004, and nearly $57 billion in
2005. These tax cuts continue in the out-years to dig us into a deeper
and deeper hole. Over 10 years, the Republican tax cuts worsen the
deficit by nearly $382 billion.
Mr. President, I ask unanimous consent that a table prepared by the
Joint Committee on Taxation displaying the 10-year effects of these tax
breaks be printed in the Record at this point.
There being no objection, the material was ordered to be printed in
the Record, as follows:

CONFERENCE AGREEMENT--ESTIMATED BUDGET EFFECTS OF REVENUE RECONCILIATION AND TAX SIMPLIFICATION PROVISIONS OF H.R. 2491 (TITLE XI) \1\
[Fiscal years 1996-2005, in millions of dollars]
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Provision Effective 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1996-2000 1996-2002 1996-2005
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CONTRACT WITH AMERICA PROVISIONS

I. Family tax relief provisions:
1. $500 tax credit for children under age 10/1/95 -4,449 -28,355 -22,529 -22,761 -22,996 -23,169 -23,343 -20,519 -23,697 -23,875 -101,090 -147,602 -218,693
18--Senate amendment ($75,000/$110,000
phaseout with no indexing).
2. Reduce the marriage penalty............ tyba 12/31/95 -137 -474 -739 -952 -1,458 -1,970 -2,270 -3,838 -5,074 -6,866 -3,760 -8,000 -23,778
3. $5,000 credit for adoption expenses-- tyba 12/31/95 -28 -285 -302 -320 -336 -337 -337 -337 -339 -339 -1,271 -1,945 -2,960
Senate amendment, but phase out beginning
at $75,000 AGI; require finalized
adoption only for foreign adoptions;
special needs adoptions--House bill.
4. $1,000 deduction (with residency and tyba 12/31/95 -74 -115 -119 -124 -129 -134 -138 -142 -146 -151 -561 -833 -1,271
support tests) for custodial care of
certain elderly dependents in taxpayer's
home.

[[Page S 17272]]

II. Savings and investment provisions:
1. Provisions relating to individual tyba 12/31/95 -221 -487 -100 -990 -1,817 -3,332 -4,807 -5,770 -6,860 8,164 -3,615 -11,755 -32,549
Retirement Arrangements--(a) deductible
IRAs--Senate amendment, except increase
phaseout range for joint filers in $2,500
increments; Homemakers eligible for full
IRA deduction--both House bill and Senate
amendment; (b) back-end IRAa--House bill
with coordination of contribution limits;
(c) definition of special purpose
withdrawals--Senate amendment; (d)
penalty free withdrawals from deductible
IRAs--Senate amendment.
2. Capital gains reforms: (a) individual
capital gains--House bill; (b) small
business stock--14% maximum rate for
individuals, reduced corporate rate; (c)
indexing of capital gains--House bill,
with 6-year delay of effective date; (d)
corporate capital gains--Senate
amendment; and (e) capital loss
deducation for sale of principal
residence--House bill:
a. Corporate.......................... tyea 12/31/94 -1,009 -893 -912 -945 -971 -1,024 -1,129 -1,188 -1,246 -1,307 -4,730 -6,883 -10,624
b. Individual......................... tyea 12/31/94 2,857 -2,677 -6,757 -7,546 -8,191 -7,990 -1,450 -10,483 -12,166 -14,483 -22,314 -28,854 -65,986
3. Alternative minimum tax (AMT) Reform-- ppisa & tyba 12/31/95 -1,290 -3,149 -3,722 -3,248 -2,141 -1,487 -1,252 -1,015 -985 -1,000 -13,550 -16,291 -19,291
Senate amendment, except conform
depreciation lives and methods under AMT
and, with respect to certain minimum tax
credits, substitute 7 years for 5 years.
III. Health care provisions:
1. Treatment of long-term care insurance-- 1/1/96 -860 -556 -659 -751 -846 -951 -1,061 -1,166 -1,289 -1,401 -3,672 -5,684 -9,540
House bill, but adopt Senate provision
providing no cap on indemnity policies,
permit penalty-free (not tax-free) 401(k)
and IRA withdrawals, $175 per day cap on
per diem benefits, and adopt Senate
consumer protections.
2. Tax treatment of accelerated death 1/1/96 -6 -67 -107 -166 -214 -265 -316 -376 -446 -481 -560 -1,141 -2,442
benefits under life insurance contracts--
House bill, but adopt Senate rule
relating to NAIC guidelines.
3. Health insurance organizations eligible tyea 10/13/95 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -5 -8 -12
for benefits of section 833--Senate
amendment.
4. Increase tax-free death benefit limit ceia 12/31/95 (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\)
on burial insurance polices--Senate
amendment.
IV. Estate and gift tax provisions:
1. Phase up unified credit to $750,000-- dda/gma 12/31/95 ......... -333 -663 -1,020 -1,401 -1,805 -2,154 -2,379 -2,864 -3,136 -3,417 -7,376 -15,755
House bill with 6-year phase in with
indexing thereafter; index $10,000 annual
gift tax exclusion; $750,000 special use
valuation; generation-skipping tax; and
indexing of $1 million value of closely
held businesses under section 6601j.
2. Reduction in estate taxes for qualified dda 12/31/95 ......... -490 -579 -680 -798 -934 -1,081 -1,295 -1,513 -1,766 -2,547 -4,562 -9,136
businesses after unified credit increase--
Senate amendment, but change thresholds
to $1 million/$1.5 million and coordinate
with section 2032A and section 6166.
3. Provide a 40% exclusion from estate dda 12/31/95 ......... -42 -47 -51 -60 -67 -74 -81 -90 -99 -200 -340 -610
taxes for property donated subject to a
conservation easement (within 25 miles of
a metropolitan statistical area or a
national park or wilderness area; or
within 10 miles of an Urban National
Forest).
4. Clarify cash leases under section cla 12/31/95 ......... -2 -2 -2 -2 -2 -2 -2 -2 -2 -8 -12 -18
2032A--Senate amendment.
V. Job creation and wage enhancement
provisions:
1. Leasehold improvements provision--House llda 3/13/95 -34 -230 -17 -15 -12 -9 -6 -3 - -3 -98 -114 -114
bill.
2. Small business incentives--House bill, ppisa 12/31/95 -191 -379 -470 -553 -554 -550 -489 -360 -240 -150 -2,147 -3,186 -3,936
but modify increase in expensing
limitation for small businesses to
$19,000 for 1996, $20,000 for 1997,
$21,000 for 1998, $22,000 for 1999,
$23,000 for 2000, $24,000 for 2001, and
$25,000 for 2002 and thereafter.
----------------------------------------------------------------------------------------------------------------------------------------------------
Subtotal: Contract With America ................................... -5,443 -38,325 -37,725 -40,125 -41,927 -44,027 -37,010 -51,955 -56,958 -63,218 -163,545 -244,586 -416,715
related provisions.
====================================================================================================================================================
VI. Expiring provisions:
1. Provisions extended through 12/31/96:
a. Work opportunity tax credit--Senate 1/1/96 -64 -107 -65 -25 -10 -2 ......... ......... ......... ......... -271 -274 -274
amendment, with modifications \3\.

[[Page S 17273]]

b. Employer-provided educational 1/1/95 -611 -288 ......... ......... ......... ......... ......... ......... ......... ......... -899 -899 -899
assistance; applies to undergraduate
education only after 1995.
c. R&E credit--House bill............. 7/1/95 -1,322 -842 -387 -275 -165 -42 ......... ......... ......... ......... -2,991 -3,033 -3,033
d. Orphan drug tax credit--Senate 1/1/95 -35 -10 -2 -1 -1 (\2\) (\2\) (\2\) (\2\) (\2\) -49 -50 -51
amendment.
e. Contribution of appreciated stock 1/1/95 -107 -18 -6 ......... ......... ......... ......... ......... ......... ......... -130 -130 -130
to private foundations.
2. Commercial aviation fuel: extend 4.3 10/1/95 -417 -439 -6 ......... ......... ......... ......... ......... ......... ......... -863 -863 -863
cents/gallon exemption through 9/30/97;
but conditional on extension of Airport
and Airway Trust Fund taxes.
3. Extend all Airport and Airway Trust 1/1/96
Fund excise taxes through 9/30/96--House
bill \4\.
(12)No revenue effect
4. Extend IRS user fees through 9/30/02 10/1/00 ......... ......... ......... ......... ......... 35 35 ......... ......... ......... ........... 70 70
\5\--Senate amendment.
5. Sunset the low-income housing tax DOE -24 -29 64 333 674 1,046 1,431 1,822 2,218 2,617 1,018 3,494 10,152
credit after 12/31/97; sunset national
pool after 12/31/95--House bill.
6. Superfund and oil spill liability
taxes:
a. Extend Superfund excise taxes DOE 319 16 ......... ......... ......... ......... ......... ......... ......... ......... 335 335 335
through 9/30/96; receipts go to
general revenues after 7/31/96.
b. Extend Superfund AMT through 12/31/ DOE 290 193 ......... ......... ......... ......... ......... ......... ......... ......... 483 483 483
96 \6\.
c. Extend oil spill tax through 9/30/ 1/1/96 ......... ......... ......... ......... ......... 60 60 ......... ......... ......... ........... 120 120
02--Senate amendment.
7. Extend excise tax refund authority for DOE
alcohol fuels blenders--Senate amendment.
(12)Negligible revenue effect
8. Extend section 29 binding contract date DOE ......... -30 -81 -97 -93 -96 -101 -106 -111 -117 -301 -499 -833
6 months from date of enactment and
placed-in-service date to 12/3/97 for
biomass and coal.
9. Exempt from diesel dyeing requirement fcqa DOE (\2\) -1 -1 -1 -1 -1 -1 -1 -1 -1 -3 -4 -6
any States exempt from Clean Air Act
dyeing requirement (permanent).
10. Suspend tax on diesel fuel for 1/1/96 -24 -27 -4 -4 -1 ......... ......... ......... ......... ......... -60 -61 -61
recreational boats--Senate amendment
(through 6/30/97).
11. Permanent extension of FUTA exemption 1/1/95 -5 -3 -3 -3 -3 -3 -3 -3 -3 -3 -17 -23 -32
for alien agricultural workers \5\--House
bill.
12. Information Sharing Provision: DOE ......... ......... ......... 14 28 42 56 ......... ......... ......... 42 140 140
Extension of disclosure of return
Information to Department of Veterans
Affairs (outlay reduction) \5\--House
bill, except extend through 9/30/02 only.
VII. Medical savings accounts:
1. Medical Savings Accounts--House bill, tyba 12/31/95 -122 -211 -258 -307 -362 -391 -421 -451 -483 -515 -1,260 -2,072 -3,522
except follow the Senate amendment with
respect to (a) maximum contribution limit
($2,000 single and $4,000 family); (b)
tax-free build up of earnings; (c)
definition of qualified medical expenses;
(d) post-death distribution rules; and
(e) clarification relating to
capitalization of policy acquisition
costs.
VIII. Taxpayer bill of rights 2:
1. Expansion of authority to abate DOE (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\8\) (\8\)
interest.
2. Extension of interest-free period for 6/30/96 -2 -7 -8 -8 -8 -9 -9 -9 -10 -10 -10 -51 -80
payment of tax--House bill.
3. Joint return may be made after separate tyba DOE (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\8\) (\8\)
returns without full payment of tax.
4. Increase levy exemption \9\............ lia 12/31/95 (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\10\) (\8\)
5. Offers-in-compromise--Senate amendment. DOE (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\8\) (\8\)
6. Increased limit on attorney fees--House DOE -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -5 -7 -10
bill.
7. Award of litigation costs permitted in pca DOE (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\8\) (\8\)
declaratory judgment proceedings.
8. Increase in limit on recovery of civil DOE -3 -3 -3 -3 -3 -3 -3 -3 -3 -3 -15 -21 -30
damages--House bill.
9. Enrolled agents included as third-party sla DOE (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\8\) (\8\) (\8\)
recordkeepers.
10. Annual reminders to taxpayers with 1/1/96 (\11\) (\11\) (\11\) (\11\) (\11\) (\11\) (\11\) (\11\) (\11\) (\11\) (\12\) (\12\) (\12\)
delinquent accounts.
IX. Casualty and involuntary conversion
provision:
1. Change involuntary conversion rules for DDA 12/31/94 -6 -14 -10 -10 -10 -10 -10 -10 -10 -10 -50 -70 -100
Presidentially declared disaster areas--
Senate amendment.
X. Exempt and charitable organizations
provisions:
1. Provide tax-exempt status to common tyea 12/31/95 -4 -6 -6 -7 -7 -7 -8 -8 -8 -9 -30 -45 -70
investment funds--Senate amendment.
2. Exclusion from UBIT for certain pra 12/31/95
corporate sponsorship payments--Senate
amendment.
(12) Negligible revenue effect
3. Intermediate sanctions for certain tax- 9/14/95 1/1/96 4 4 4 5 5 5 6 6 6 7 22 33 52
exempt organizations--House bill, with
technical modifications.

[[Page S 17274]]

XI. Corporate and other reforms:
1. Reform the tax treatment of certain da 5/3/95 -83 -100 -17 84 209 343 437 475 514 582 93 873 2,444
corporate stock reemptions--House bill.
2. Require corporate tax shelter aiolRSg (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\13\) (\13\) (\14\)
reporting; modify recipient notice to 90
days.
3. Disallow interest deduction for ipoaa 10/31/95 220 579 883 1,369 1,749 1,856 1,895 1,901 1,924 1,940 4,800 8.551 14,316
corporate-owned life insurnce policy
loans--Senate amendment, but phase out
disallowance (90% in 1996, 80% in 1997,
and 70% in 1998; cap borrowing at 20,000
lives); cap interest rate (with special
rules for grandfathered plans); exception
for key person policies with 10 lives;
limit borrowing in 1996 to policies
purchased in 1994 and 1995.
4. Phase out preferential tax deferral for (\15\) 26 37 38 39 40 41 42 43 44 44 179 261 392
certain large farm corporations required
to use accrual accounting.
5. Phase-in repeal of section 936; Wage tyba 12/3/95 255 605 552 596 498 516 746 1,116 1,390 1,681 2,506 3,766 7,953
credit companies--6 years of present law
and then House bill with modified base
period; income companies--2 years of
present law and then House bill with
modified base period; QPSII--repealed 1/1/
96.
6. Corporate accounting--reform of income ppisa 9/13/95 32 69 29 13 14 16 19 22 28 31 157 192 273
forecast method--Senate amendment.
7. Permit transfers of excess pension ta DOE 1,439 1,375 958 554 195 151 -19 -13 -20 -27 4,521 4,651 4,591
assets--House bill but (a) require asset
cushion equal to the greater of (i) 125%
of termination liability (using PBGC
assumptions) and (ii) the plan's accrued
liability; (b) permit withdrawals only
for ERISA-covered benefits; (c) prohibit
transfers when company in bankruptcy; (d)
no excise tax; (e) extend for 1
additional year; and (f) conform present-
law section 420 asset cushion.
8. Modify exclusion of damages received on ama 12/31/95 34 51 55 59 61 64 68 71 74 77 260 392 614
account of personal injury or sickness--
Senate amendment, with technical
clarifications.
9. Require tax reporting for payments to pma 12/31/96 ......... (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\13\) (\13\) (\14\)
attorneys; delay effective date for 1
year.
10. Expatriation tax provisions--House 2/6/95 64 97 146 199 254 289 304 319 335 351 760 1,353 2,358
bill.
11. Remove business exclusion for energy ara 12/31/95 30 96 100 104 107 109 111 113 115 116 437 657 1,000
subsidies provided by public utilties--
House bill, but modify effective date.
12. Modify basis adjustment rules under ica 9/13/95 2 4 6 9 14 20 29 37 46 56 35 84 223
section 1033.
13. Modify the exception to the related ica 9/13/95 1 2 4 6 8 11 13 15 17 19 21 45 96
party rule of section 1033 for
individuals to only provide an exception
for de minimis amounts ($100,000).
14. Disallow rollover under section 1034 tyea 12/31/95 1 3 4 5 6 8 9 10 11 13 19 35 69
to extent of previously claimed
depreciation for home office or other
depreciable use of residence.
15. Provide that rollover of gain on sale sea 12/31/95 (\16\) (\16\) (\16\) (\16\) (\16\) (\16\) (\16\) (\16\) (\16\) (\16\) (\16\) (\16\) (\16\)
of a principal residence cannot be
elected unless the replacement property
purchased is located within the United
States (limit to resident aliens who
terminate residence within 2 years).
16. Repeal exemption for withholding on 1/1/96 20 6 6 6 6 7 7 7 7 8 44 58 80
gambling winnings from bingo and keno
where proceeds exceed $5,000.
17. Repeal tax credit for contributions to DOE 1 1 2 2 2 2 2 2 2 2 8 12 18
special Community Development
Corporations.
18. Repeal advance refunds of diesel fuel 1/1/96 8 19 19 19 19 19 19 19 19 19 84 122 179
tax for diesel cars and light trucks.
19. Apply failure to pay penalty to DOE 1 3 29 30 32 33 35 37 38 40 95 163 278
substitute returns.
20. Allow conversion of scholarship DOE 3 4 6 8 10 10 9 7 6 5 31 48 67
funding corporation to taxable
corporation--House bill.
21. Apply look-through rule for purposes gira 12/31/95 7 23 24 27 30 32 34 37 40 44 111 177 298
of characterizing certain subpart F
insurance income as UBIT--House bill.
22. Repeal 50% Interest Income exclusion ima 10/13/95 27 69 109 149 187 224 261 295 331 365 541 1,026 2,019
for financial institution loans to ESOPs--
Senate amendment.
23. Modify the ozone depleting chemicals DOE (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\7\) (\10\) (\17\) (\7\)
tax for imported recycled halons--Senate
amendment.

[[Page S 17275]]

24. Modify two county tax-exempt bond rule DOE (\16\) 1 2 3 4 5 6 8 9 10 10 22 49
for local furnishers of electricity or
gas--Senate amendment.
25. Provide tax-exempt bonds status for bia DOE (\2\) -1 -1 -1 -1 -1 -1 -1 -1 -1 -4 -8 -12
Alaska Power Administration sale--Senate
amendment.
26. Modify treatment of foreign trusts-- (\18\) 93 162 171 180 188 197 206 214 223 245 794 1,197 1,879
Senate amendment.
27. Provide for flow through treatment for DOE 34 18 10 5 2 ......... -2 -4 -6 -8 69 67 49
Financial Asset Securitization Investment
Trusts (FASITs)--Senate amendment.
28. Tax-free treatment of contributions in (\19\) -16 -26 -12 4 19 32 43 51 61 71 -31 43 226
aid of construction for water utilities;
change depreciation for water utilities--
Senate amendment.
29. Provide 3-year amortization of tyeo/a 1/1/95 -11 -14 -8 -4 ......... ......... ......... ......... ......... ......... -37 -37 -37
intrastate operating rights of truckers--
Senate amendment.
30. A life insurance company may elect to tyba 12/31/94 1 (\16\) (\2\) -1 (\2\) (\16\) (\16\) (\16\) (\2\) -2 (\16\) 1 -2
treat 20% of capital losses as ordinary
income, spread over 10 years; the
taxpayer has the option to change the
treatment of these losses in the future--
Senate amendment, with modifications.
31. Clarify that newspaper carriers and spa 12/31/95
distributors are independent contractors--
Senate amendment.
(12) Negligible revenue effect
32. Allow for tax-free conversion of ta 12/31/95 -4 -9 -8 -8 -8 -8 -8 -8 -9 -9 -37 -52 -78
common trust funds to mutual funds--
Senate amendment.
33. Eliminate interest allocation tyba 12/31/95 41 93 107 123 141 163 187 201 215 228 505 855 1,499
exception for certain nonfinancial
corporations--Senate amendment.
34. Modify depreciation for small motor ppiso/a/b DOE -1 -4 -23 -26 -29 -16 -19 -22 -24 -27 -83 -118 -191
fuel/convenience store outlets--Senate
amendment.
35. Repeal of section 593 with residential tyba 12/31/95 63 95 216 280 277 272 260 250 243 236 931 1,462 2,192
loan test for 1996 and 1997.
36. Phase out and extend luxury automobile 1/1/96 -41 -97 -159 -204 179 265 200 46 ......... ......... -322 143 188
excise tax through 12/31/02.
XII. Technical correction provision: Luxury DOE 14 ......... ......... ......... ......... ......... ......... ......... ......... ......... 14 14 14
Excise Tax Indexing.
XIII. Simplification provisions relating to
individuals:
1. Rollover of gain on sale of principal
residence:
a. Multiple sales within rollover sa DOE -1 -2 -2 -2 -2 -2 -3 -3 -3 -3 -9 -14 -23
period--House bill.
b. Rules in case of divorce--House sa DOE -2 -2 -2 -2 -3 -3 -3 -4 -4 -4 -11 -17 -29
bill.
2. One-time exclusion on the sale of a sa 9/13/95 -10 -19 -20 -21 -22 -23 -24 -25 -26 -27 -92 -139 -217
principal residence by an individual who
has attained age 55 (allow additional
exclusion for married couples under
certain conditions where one spouse has
claimed an exclusion prior to their
marriage)--House bill.
3. Treatment of certain reimbursed tyba 12/31/95 (\2\) -1 -1 -1 -1 -1 -1 -1 -1 -1 -5 -6 -11
expenses of rural mail carriers--House
bill.
4. Travel expenses of Federal employee tyea DOE (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) -1 -1 -2
participating in a Federal criminal
investigation--House bill.
5. Treatment of storage of product tyba 12/31/95 (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) -2 -3
samples--House bill.
XIV. Pension simplification provisions:
A. Simplified Distribution Rules:
1. Sunset of 5-year income averaging tyba 12/31/98 24 74 63 109 80 42 17 16 ......... ......... 350 409 425
for lump-sum distributions--Senate
amendment.
2. Repeal of $5,000 exclusion of tyba 12/31/95 16 46 49 52 54 55 55 56 57 57 217 328 498
employees' death benefits.
3. Simplified method for taxing asda 12/31/95 10 28 28 28 29 29 29 30 30 31 123 182 273
annuity distributions under certain
employer plans--Senate amendment.
4. Minimum required distribution...... yba 12/31/95 -1 -4 -4 -4 -4 -4 -4 -4 -4 -4 -17 -25 -37
B. Increased Access to Pension Plans--Tax- yba 12/31/96 ......... -8 -22 -24 -25 -26 -28 -29 -30 -31 -79 -133 -223
exempt organizations eligible under
section 401(k)--Senate amendment, but
permit all tax exempts and Indian tribes
to have 401(k) plans.
C. Nondiscrimination Provisions:
1. Simplified definition of highly yba 12/31/95
compensated employees--House bill,
with modifications.
(12) Considered in other provisions
2. Repeal of family aggregation rules. yba 12/31/95
(12) Considered in other provisions
3. Modification of additional yba 12/31/95
participation requirements.
(12) Negligible revenue effect

[[Page S 17276]]

4. Safe-harbor nondiscrimination rules yba 12/31/98 ......... ......... ......... -42 -162 -167 -171 -176 -182 -187 -204 -541 -1,085
for qualified cash or deferred
arrangements and matching
contributions [20]--Senate amendment,
with modification.
D. Miscellaneous pension simplification:
1. Treatment of leased employees-- yba 12/31/95
Senate amendment.
(12) Negligible revenue effect
2. Plans covering self-employed yba 12/31/95
individuals.
(12) Negligible revenue effect
3. Elimination of special vesting rule yba 12/31/95 (\2\) -1 -1 -1 -1 -1 -1 -1 -1 -1 -4 -6 -9
for multiemployer plans.
4. Distributions under rural DOE
cooperative plans--Senate amendment,
with modifications.
(12) Negligible revenue effect
5. Treatment of governmental plans tybo/a DOE
under section 415--House bill, with
Senate effective date.
(12) Negligible revenue effect
6. Uniform retirement age............. 1/1/96
(12) Considered in other provisions
7. Contributions on behalf of disabled yba 12/31/95
employees.
(12) Negligible revenue effect
8. Treatment of deferred compensation tyba 12/31/95 (\2\) -1 -1 -1 -1 -2 -2 -2 -2 -2 -4 -8 -14
plans of State and local governments
and tax-exempt organizations--House
bill, with modification.
9. Require Individual ownership of DOE -6 -18 -21 -24 -25 -25 -26 -27 -28 -29 -94 -145 -229
section 457 plan assets--House bill,
with effective date change (i.e., to
the end of the first legislative
session after enactment).
10. Correction of GATT interest and eall GATT -4 -4 -4 -4 ......... ......... ......... ......... ......... ......... -16 -16 -16
mortality rate provisions in the
Retirement Protection Act--House
bill, with modifications.
11. Multiple salary reduction tyba 12/31/95
agreements permitted under section
403(b).
(12) Negligible revenue effect
12. Repeal of combined plan limit-- yba 12/31/98 ......... ......... ......... -70 -189 -195 -201 -207 -213 -219 -259 -654 -1,293
House bill, with Senate effective
date.
13. Modify notice required of right to pyba 12/31/95
qualified joint and survivor annuity--
House bill.
(12) Negligible revenue effect
14. 3-year waiver of excess 1/1/96 38 40 43 3 ......... ......... ......... ......... ......... ......... 124 124 124
distribution tax--Senate amendment.
15. Definition of compensation for yba 12/31/97 ......... ......... -1 -1 -2 -2 -2 -2 -2 -3 -4 -8 -15
section 415 purposes--Senate
amendment.
16. Increase section 4975 excise tax ptoo/a 1/1/96 1 4 4 4 4 4 4 4 4 4 17 24 36
on prohibited transactions from 5% to
10%--Senate amendment.
17. Treatment of Indian tribal pybb 1/1/95
governments under section 403(b)--
Senate amendment provision and permit
rollover to 401(k).
(12) Negligible revenue effect
18. Application of elective deferral tyba 12/31/95
limit to section 403(b) plans--Senate
amendment, with modifications.
(12) Negligible revenue effect
19. Establish SIMPLE pension plan-- yba 12/31/95 -45 -69 -71 -74 -76 -79 -82 -85 -88 -91 -335 -497 -761
Senate amendment, but repeal SEPs.
20. Increase the self-employed health tyba 12/31/97 ......... ......... -36 -113 -168 -272 -399 -644 -694 -746 -317 -988 -3,072
insurance deduction (35% in 1998 and
1999; 40% in 2000 and 2001; and 50%
in 2002 and thereafter).
XV. Partnership simplification provisions: ...................................
1. Simplified reporting to partners--House tyba 12/31/95 5 6 6 7 7 7 7 8 8 8 31 45 69
bill, but elective.
2. Returns required on magnetic media for tyba 12/31/95
partnerships with 100 partners or more--
House bill.
(12) Negligible revenue effect
XVI. Foreign tax simplification provisions:
A. Modification of passive foreign tyba 12/31/95 -7 -18 -20 -21 -22 -24 -25 -26 -27 -29 -88 -137 -219
investment company provisions to
eliminate overlap with subpart F and to
allow mark-to-market election--House bill.
B. Modifications to provisions affecting
controlled foreign corporations:
1. General provisions--House bill..... ................................... -1 -2 -2 -3 -3 -3 -3 -4 -4 -4 -11 -17 -29
2. Repeal of excess passive assets tyba 9/30/95 -17 -26 -29 -35 -41 -45 -51 -57 -64 -68 -148 -244 -433
provision (section 956A)--House bill.
XVII. Other income tax simplification
provisions:
A. Subchapter S corporations:
1. Increase number of eligible tyba 12/31/95 -7 -12 -14 -16 -20 -22 -25 -28 -31 -35 -69 -116 -210
shareholders--House bill.

[[Page S 17277]]

2. Permit certain trusts to hold stock tyba 12/31/95 -1 -2 -2 -2 -2 -2 -2 -2 -3 -3 -9 -13 -21
in S corporations--House bill.
3. Extend holding period for certain tyba 12/31/95 (10) (10) (10) (10) (10) (10) (10) (\10\) (\10\) (\10\) (10) (10) (\10\)
trusts--House bill.
4. Financial Institutions permitted to tyba 12/31/95 (2) (2) (2) (2) (2) (2) (2) (\2\) (\2\) (\2\) (2) -1 -1
hold safe-harbor debt--House bill.
5. Authority to validate certain tyba 12/31/95 (2) (2) (2) (2) (2) (2) (2) (\2\) (\2\) (\2\) (2) -1 -1
invalid elections--House bill.
6. Allow Interim closing of the books. tyba 12/31/95
(12)Negligible revenue effect
7. Expand post-termination period and tyba 12/31/95 (2) (2) (2) (2) (2) (2) (2) (\2\) (\2\) (\2\) (2) -1 -1
amend subchapter S audit procedures--
House bill.
8. S corporations permitted to hold S tyba 12/31/95 -3 -7 -9 -11 -13 -15 -17 -20 -23 -26 -43 -75 -144
or C subsidiaries--House bill.
9. Treatment of distributions during tyba 12/31/95 (2) (2) (2) (2) (2) (2) (2) (\2\) (\2\) (\2\) (2) -1 -1
loss years--House bill.
10. Treatment of S corporations as tyba 12/31/95 (10) (10) (10) (10) (10) (10) (10) (\10\) (\10\) (\10\) (10) (10) (\10\)
shareholders in C corporations--House
bill.
11. Elimination of certain earnings tyba 12/31/95 (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10)
and profits of S corporations--House
bill.
12. Treatment of certain losses tyba 12/31/95 (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10)
carried over under at-risk rules--
House bill.
13. Adjustments to basis of Inherited dda DOE (11) (11) (11) (11) (11) (11) (11) (11) (11) (11) (11) (11) (11)
S stock--House bill.
14. Treatment of certain real estate tyba 12/31/95 (2) -1 -1 -2 -2 -2 -2 -2 -2 -2 -6 -10 -16
held by an S corporation--House bill.
15. Transition rule for elections tyba 12/31/95 (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10)
after termination--House bill.
16. Interaction of subchapter S ................................... -3 -10 -26 -32 -37 -38 39 -40 -40 -40 -108 -185 -305
changes--House bill.
B. Regulated Investment Companies (RICs)-- tyea DOE -9 -17 -20 -24 -28 -32 -35 -38 -41 -44 -98 -164 -287
Repeal of 30% gross income limitation for
RICs--House bill.
C. Accounting Provisions:
1. Modifications to look-back method cc/tyea/E -2 -3 -3 -3 -4 -4 -4 -4 -4 -4 -15 -23 -35
for long-term contracts--House bill.
2. Allow traders to adopt mark-to- DOE
market accounting for securities--
House bill.
(12) Negligible revenue effect
3. Modification of Treasury ruling tyba DOE -4 -4 -5 -5 -5 -5 -5 -4 -5 -6 -23 -33 -49
requirement for nuclear
decommissioning funds--House bill.
4. Provide that a taxpayer may elect pra/cdoa 12/31/92 2 -1 -1 -1 -1 -1 -1 -1 -1 -1 -2 -4 -6
to include in income crop insurance
proceeds and disaster payments in the
year of the disaster or in the
following year--Senate amendment.
D. Tax-Exempt Bond Provision--Repeal of bla DOE
debt service-based limitation on
investment in certain non-purpose
investments--House bill.
(12) Negligible revenue effect
E. Insurance Provisions:
1. Treatment of certain insurance tyba 12/31/95 6 -4 5 4 4 12 -7 -16 -4 -1 15 21 -19
contracts on retired lives.
2. Treatment of modified guaranteed tyba 12/31/95 -1 2 4 1 2 1 -1 -1 -1 -1 8 8 -7
contracts.
F. Other Provisions:
1. Closing of partnership taxable year tyba 12/31/95 (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) -1 -1
with respect to deceased partner--
House bill.
2. Modifications to the FICA tip eaii OBRA '93
credit--House bill.
(12) Negligible revenue effect
3. Conform due date for first quarter 1/1/96
estimated tax by private foundations--
House bill.
(12) Negligible revenue effect
4. Treatment of dues paid to tyba 12/31/94
agricultural or horticultural
organizations.
(12) Negligible revenue effect
5. Student loan interest deduction polda 12/31/95 -52 -152 -157 -162 -168 -174 -180 -186 -193 -200 -691 -1,046 -1,624
($2,500 above-the-line deduction;
phaseout $45,000-$65,000 singles/
$65,000-$85,000 joint).
XVIII. Estate, gift, and trust tax provisions:
A. Estate and Trust Income Tax Provisions:
1. Certain revocable trusts treated as DOE (\10\) (\10\) (\10\) (\10\) (\10\) (\10\) (\10\) (\10\) (\10\) (\10\) (\21\) (\21\) (\21\)
part of estate--House bill.
2. Distributions during first 65 days DOE
of taxable year of estate--House bill.
(12) Negligible revenue effect
3. Separate share rules available to DOE
estates--House bill.
(12) Negligible revenue effect
4. Executor of estate and DOE
beneficiaries treated as related
persons for disallowance of losses--
House bill.
(12) Negligible revenue effect

[[Page S 17278]]

5. Limitation on taxable year of DOE
estates--House bill.
(12) Negligible revenue effect
6. Simplified taxation of earnings of tyba DOE (\11\) (\11\) (\11\) (\11\) (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) (\12\) 8 12
pre-need funeral trusts--House bill,
with $7,000 limit.
B. Estate and gift tax provisions:
1. Clarification of waiver of certain DOE
rights of recovery--House bill.
(12) Negligible revenue effect
2. Adjustments for gifts within 3 DOE ......... -6 -6 -7 -7 -7 -7 -7 -7 -7 -26 -40 -61
years of decedent's death--House bill.
3. Clarification of qualified DOE
terminable interest rules--House bill.
(12) Negligible revenue effect
4. Transitional rule under section eaii OBRA '90
2056A--House bill.
(12) Negligible revenue effect
5. Opportunity to correct certain DOE
failures under section 2032A--House
bill.
(12) Negligible revenue effect
6. Gifts may not be revalued for ga DOE ......... -15 -16 -16 -18 -21 -26 -32 -38 -45 -65 -112 -227
estate tax purposes after expiration
of statute of limitations--House bill.
7. Clarifications relating to DOE ......... -2 -2 -2 -2 -3 -3 -3 -3 -3 -8 -14 -23
disclaimers--House bill.
8. Clarify relationship between DOE ......... -3 -4 -4 -4 -4 -4 -4 -5 -5 -15 -23 -37
community property rights and
retirement benefits--House bill.
9. Treatment under qualified domestic DOE
trust rules of forms of ownership
which are not trusts--House bill.
(12) Negligible revenue effect
C. Generation-skipping tax provisions:
1. Taxable termination not to include DOE
direct skips--House bill.
(12) Negligible revenue effect
2. Modification of generation-skipping gsta 12/31/94 -3 -4 -4 -4 -4 -4 -4 -4 -4 -5 -19 -27 -40
transfer tax for transfers to
individuals with deceased parents--
Senate amendment.
XIX. Excise tax simplification provisions:
A. Distilled spirits, wines, and beer:
1. Credit or refund for imported fcq DOE+180 days
bottled distilled spirits returned to
bonded premises--House bill.
(12) Negligible revenue effect
2. Fermented material from any brewery fcq DOE+180 days
may be received at a distilled
spirits plant--House bill.
(12) Negligible revenue effect
3. Refund of tax on wine returned to fcq DOE+180 days
bond not limited to unmerchantable
wine--House bill.
(12) Negligible revenue effect
4. Beer may be withdrawn free of tax fcq DOE+180 days
for destruction--House bill.
(12) Negligible revenue effect
5. Transfer to brewery of beer fcq DOE+180 days
imported in bulk without payment of
tax--House bill.
(12) Negligible revenue effect
B. Consolidate imposition of aviation 1/1/96 (\16\) ......... ......... ......... ......... ......... ......... ......... ......... ......... (\16\) (\16\) (\16\)
gasoline excise tax--House bill.
C. Other excise tax provision--Clarify DOE
present law for retail truck excise tax
(certain activities do not constitute
remanufacture)--House bill.
(12) Negligible revenue effect
XX. Administrative simplification provision:
A. General provision--Certain notices 1/1/96 (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) -1 -1
disregarded under provision increasing
interest rate on large corporate
underpayments--House bill.
XXI. Increase in public debt limit............ ................................... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ........... ........... ...........
----------------------------------------------------------------------------------------------------------------------------------------------------
Total of revenue provisions............. ................................... -5,408 -37,217 -35,567 -37,438 -38,594 -39,856 -32,430 -47,042 -51,423 -56,939 -154,155 -226,450 -381,795
====================================================================================================================================================
Total of outlay provisions.............. ................................... ......... ......... ......... 14 28 42 56 ......... ......... ......... 42 140 140
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The Earned Income Credit provisions are included in Title XII of the conference agreement; the budget effects are shown in a separate table.
\2\ Loss of less than $500,000.
\3\ Credit rate at 35% on first $6,000 of income, eligible workers expanded to include welfare cash recipients and veteran foodstamp recipients; 500 hour work requirement.
\4\ Section 257(b)(2)(c) of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended by the Budget Enforcement Act of 1990, indicates that ``excise taxes dedicated to a trust fund, if expiring, are assumed to be
extended at current rates''. Since the revenues from these taxes are dedicated to the Airport and Airway Trust Fund, an extension of the taxes is scored as having no revenue effect.
\5\ Estimates provided by the Congressional Budget Office (CBO).
\6\ Estimates presented after interaction with Alternative Minimum tax provisions and are shown net of offset with the corporate income tax.
\7\ Loss of less than $1 million.
\8\ Loss of less than $2 million.
\9\ Increase exemption for books and tools of trade to $1,250.
\10\ Loss of less than $5 million.
\11\ Gain of less than $1 million.
\12\ Gain of less than $5 million.
\13\ Gain of less than $25 million.
\14\ Gain of less than $30 million.
\15\ No new suspense accounts could be established in taxable years ending after 9/13/95. The income in existing suspense accounts would be recognized in equal installments over a 20-year period beginning with the first taxable year
beginning after 9/13/95.
\16\ Gain of less than $500,000.
\17\ Loss of less than $10 million.
\18\ Various effective dates depending on provisions.
\19\ Effective for amounts received after date of enactment and property placed in service after date of enactment with the exception of certain property subject to a binding contract on the date of enactment.
\20\ This provision considers interaction effects of SIMPLE retirement plan provisions.
\21\ Loss of less than $25 million.

[[Page S 17279]]

Legend for ``Effective'' column: ama=awards made after; ara=amounts received after; asda=annuity starting date after; aioIRSg=after Issuance of Internal Revenue Service guidance; bia DOE=bonds issued after date of enactment; cc/tyea/
E=contracts completed in taxable years ending after date of enactment; celia=contracts entered into after; cla=cash leases after; da=distributions after; dda=decedents dying after; DDA=disasters declared after; dda DOE=decedents
dying after date of enactment; dda/gma=decedents dying after and gifts made after; DOE=date of enactment; eaii GATT=effective as if included in GATT; eaii OBRA'90=effective as if included in the Omnibus Budget Reconciliation Act
of 1990; eall OBRA'93=effective as if included in the Omnibus Budget Reconciliation Act of 1993; fcqa DOE=first calendar quarter after date of enactment; fcq DOE+180 days=beginning of first calendar quarter that starts at least
180 days after date of enactment; ga DOE=gifts after date of enactment; gira=gross income received after; gsta=generation skipping transfers after; ica=involuntary conversion after; lpoaa=interest paid or accrued after; lia=levies
issued after; lida=leasehold improvements disposed of after; lma=loans made after; lyba=limitation years beginning after; pca DOE=proceeding commenced after date of enactment; pma=payments made after; poida=payments on interest
due after; ppisa=property placed in service after; pplso/a/b DOE=property placed in service on, after, or before date of enactment; pra=payments received after; pra/cdoa=payments received after, for crop damage occurring after;
ptoo/a=prohibited transactions occurring on or after; pyba=plan years beginning after; pybb=plan years beginning before; sa=sales after; sea=sales and exchanges after; sia DOE=summonses issued after date of enactment; spa=services
performed after; ta=transfers after; ta DOE=transfers after date of enactment; tyba=taxable years beginning after; tyba DOE=taxable years beginning after date of enactment; tybo/a DOE=taxable years beginning on or after date of
enactment; tyea=taxable years ending after;tyea DOE=taxable years ending after date of enactment; tyeo/a=taxable years ending on or after; yba=years beginning after.

Note.--Details may not add to totals due to rounding.

Source: Joint Committee on Taxation.

CONFERENCE AGREEMENT--ESTIMATED BUDGET EFFECTS OF EARNED INCOME CREDIT (``EIC'') PROVISIONS OF H.R. 2491 (TITLE XII)
[Fiscal years 1996-2002, in millions of dollars]
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Provision Effective 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1996-2000 1996-2002 1996-2005
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
EIC Reforms

1. Modify AGI for the purpose of the EIC
phaseout nontaxable social security benefits:
nontaxable pension, IRA, and annuity
distributions; tax-exempt interest; and child
support payments in excess of $6,000:
a. Revenue................................ tyba 12/31/95 11 217 231 236 216 265 288 301 317 335 911 1,464 2,417
b. Outlay reductions...................... tyba 12/31/95 59 1,193 1,265 1,326 1,431 1,452 1,454 1,528 1,593 1,660 5,275 8,182 12,962
2. Modify AGI for the purpose of the EIC
phaseout by adding back losses from Schedule
C, Schedule D, Schedule E, Schedule F, and
NOLs:
a. Revenue................................ tyba 12/31/95 1 26 30 33 35 40 48 53 58 64 124 212 388
b. Outlay reductions...................... tyba 12/31/95 10 207 219 231 237 243 246 247 255 263 904 1,393 2,159
3. Include net passive income in disqualified
income:
a. Revenue................................ tyba 12/31/95 ......... ......... 1 2 2 2 2 2 2 2 5 9 14
b. Outlay reductions...................... tyba 12/31/95 1 11 11 14 17 18 20 20 21 22 54 91 154
4. Restrict EIC eligibility to taxpayers with
qualifying children:
a. Revenue................................ tyba 12/31/95 4 89 93 97 100 107 112 117 123 129 383 601 970
b. Outlay reductions...................... tyba 12/31/95 27 535 557 583 610 631 658 686 715 745 2,313 3,602 5,747
5. Two-stage phaseout of the EIC. The second
stage of the phaseout begins at $14,850 for
households with one child and $17,750 for
households with two or more children:
a. Revenue................................ tyba 12/31/95 36 712 751 781 785 871 967 1.021 1,084 1,150 3,065 4,903 8,158
b. Outlay reductions...................... tyba 12/31/95 19 371 390 412 468 459 479 503 530 557 1,660 2,598 4,188
6. Set the maximum credit rate for taxpayers
with multiple children at 36%:
a. Revenue................................ tyba 12/31/95 13 259 258 365 343 406 433 508 540 574 1,239 2,078 3,701
b. Outlay reductions...................... tyba 12/31/95 82 1,641 1,723 1,697 1,812 1,836 1,882 1,901 1,966 2,033 6,955 10,673 16,572
7. Require Social Security numbers for primary
and secondary taxpayers and treat omission of
a correct Social Security number and
underpayment of SECA as a math error and
other compliance proposals \1\:
a. Revenue................................ tyba 12/31/95 1 29 31 31 32 32 32 21 21 22 124 188 251
b. Outlay reductions...................... tyba 12/31/95 11 224 233 237 243 246 252 270 277 284 948 1,446 2,277
8. Apply an enhancement factor to the earned
income of households with two or more
qualifying children for the purpose of
calculating the EIC:
a. Revenue................................ tyba 12/31/95 ......... -1 -1 -1 -2 -1 -1 -2 -2 -2 -4 -6 -12
b. Outlay reductions...................... tyba 12/31/95 -57 -1,147 -1,188 -1,233 -1,281 -1,322 -1,329 -1,375 -1,417 -1,461 -4,907 -7,559 -11,812
----------------------------------------------------------------------------------------------------------------------------------------------------
Total of EIC revenue \2\................ ................................... 60 1,183 1,294 1,391 1,493 1,627 1,845 1,985 2,158 2,346 5,421 8,894 15,383
====================================================================================================================================================
Total of EIC outlay reductions \2\...... ................................... 153 3,268 3,513 3,756 4,045 4,290 4,459 4,748 5,044 5,359 14,745 23,494 38,645
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes doubling of civil penalties for tax preparers.
\2\ Due to interaction between the provisions, items do not sum to total package.

Legend for ``Effective'' column: tyba = taxable years beginning after.

Note.--Details may not add to totals due to rounding.

Source: Joint Committee on Taxation.

Mr. EXON. The majority could have prevented this drain on the
Treasury in the out-years by sunsetting the tax provisions. I read in
the press that, at one time, they were actively considering such a
notion. But they did not. The tax cuts continue to add to the debt year
after year.
It is this Senator's view that it is self-evident from the Joint Tax
table that the tax title does indeed worsen the deficit in years beyond
the 7 years covered by this reconciliation bill. It is thus this
Senator's view that the violation of section 313(b)(1)(E) is plain.
Some may argue that I am setting an impossible standard for ever
enacting tax cuts. Quite to the contrary, my colleagues on the other
side could have avoided this point of order in a number of ways. I am
not here to give free parliamentary advice, but they could have
sunsetted the tax breaks, as I noted earlier. They could have included
the tax breaks in the same title as the Medicare spending cuts. Or,
during consideration of the budget resolution reconciliation
instructions, they could have specified that section 313(b)(1)(E) would
not apply to the tax breaks. Any one of these three steps would have
prevented a violation of the point of order. But they didn't do any of
them.
Therefore, Mr. President, I believe a point of order should lie
against subtitles A through D of title XI of this conference report
because they violate section 313(b)(1)(E) of the Congressional Budget
Act of 1974.
Mr. President, I understand that the parliamentarian has advised that
he will not agree that these 2 points of order lie against the bill.
Everyone should have known that the fix is in for these tax breaks. If
there had been any doubt, that doubt has now been set aside. The
majority has demonstrated that it will do whatever it needs to do--
including bend and stretch the rule--to protect its cherished tax
breaks for the wealthy.
Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from
Florida.
Mr. MACK. Mr. President, thank you.
Mr. President, this is a moment, frankly, for which I have been
waiting since I made the decision to run for Congress in October 1981
just over 14 years ago. I left a career in the financial market to
become a member of Congress. I came here with the idea that we
absolutely had to get control of the growth of Federal Government and
its spending. So, to me, this is a historic moment. Now I want to
respond to Senator Pell's comment a moment ago about the shrill
partisanship --and I know that from time to

[[Page S 17280]]
time there are some extreme expressions of feeling with respect to what
we are doing--but I would just like to remind each of us in the Senate
that the reason there may be shrillness in this debate, is because we
are finally at the moment when we are debating what fundamentally
divides us.
Those on the left absolutely believe that the answers to America's
problems come from more Government. And frankly, Republicans reject
that. We think that America's future is based on the individual, that
the our limitation is the one we place on our own imagination. And the
Government, in fact, is a great player in that limitation. So the
reason that we are having such a strong debate is because we are
arguing over the principles that divide us. And, frankly, I am thankful
that this moment finally has arrived.
Maybe it is because my son called me the other night and told me that
he just got engaged. Twenty-eight years old, and I could not be prouder
of a son. But, I think about the future in which Connie will live, and
I think about my daughter, who is in her thirties, with three
grandsons--the cutest little guys in the world--I think about their
futures. And so, I ask you to excuse me if I become passionate about
what I have to say and the things I believe, because I honestly believe
that the direction we have been headed will destroy this Nation. And
that is why I feel so passionately about the items that we have been
discussing.
There is something fundamental that has happened over the last few
days, though. And I think it is important for people to recognize it.
For 3 years journalists, writers, and TV commentators have been trying
to figure out just who is Bill Clinton. What does he stand for? When is
he going to stand up and fight for what he believes in?
And, I find it interesting that Bill Clinton has chosen this time and
this issue to finally draw the line in the sand. You know what Bill
Clinton is saying, ``I am opposed to balancing the budget in the next 7
years.'' I am glad that he finally has made this statement and made
this stand. Bill Clinton has now finally told the people in this
country what he stands for, what he believes in. It is more Government,
more taxes, and more Federal spending. He has drawn the line in the
sand and he has told the people of this country, through his actions in
the last few days, that he is in opposition to balancing the budget in
the next 7 years.
The second point I would like to raise has to do with a very
fundamental part of what we are doing. And, yes, we are cutting the
rate on capital gains. And you know why we are doing it? Because we
believe that growth will take place as a result of this cut. And as a
result of that growth, those little grandchildren that I talked about
and my son are going to have a greater opportunity in the future, and
with opportunity comes hope.
That is what we are trying to do for the American people. That is why
we are making this commitment. Do you know today that there is over
$1.5 trillion locked up in the stock market because of high capital
gains tax rates? It is time to unlock that capital. It is time to allow
that capital to flow into the new technologies that will develop
America's future.

Oh, it is very popular to take the position of going after the
wealthy. If you look at the record, you will find that when the wealthy
invest America, everyone is better off.
The other issue my friends on the other side of the aisle like to
mention is Medicare. In fact, I heard one of the earlier speakers refer
to the Medicare issue by saying the budget provision was going to rip
the heart out of Medicare. Well, frankly, I am at a loss over how you
can rip the heart out of Medicare while allowing it to grow from $4,800
a year to $6,700 a year.
Mr. President, I yield back my time.
Mr. EXON addressed the Chair.
The PRESIDING OFFICER. The Senator from Nebraska.
Mr. EXON. I yield at least 8 minutes--no more than 10 minutes--to my
colleague from Arkansas.
Mr. PRYOR. Mr. President, I thank the Chair, and thank my friend from
Nebraska.
I spent most of today looking through the Republican package,
specifically with respect to the so-called nursing home standards that
have been included in this legislation before us tonight.
Mr. President, I cannot say strongly enough how deeply offended I am
by the extraordinary means that have been used to undermine the
progress made in the most basic nursing home protections that have been
won over the past 3 decades. I think that these Republican assaults on
nursing home safeguards are no less than callous--I hate to say that--
and will open the door to a litany of further abuses that we have
attempted to cure since the 1960's. The Republican leadership, through
this attack, is saying basically ``too old, too sick, too bad'' to
residents of nursing home facilities across our country.
Mr. President, before I touch on some of the most glaring offenses of
this package, I want to tell my colleagues that the law which this
budget package is completely undermining, the 1987 nursing home quality
standards law, was developed on a bipartisan basis, was agreed to by
all interested groups, including the nursing home industry, nursing
home advocates, care providers, unions, States, and finally, yes, the
Congress of the United States. It followed literally years of
discussions and came about because the record of the States in
preventing nursing home abuse was appalling.
In 1986 the report by the National Academy of Sciences, which was
commissioned by the Congress, found shocking evidence of deficient care
and inadequate enforcement. The study found that Government regulations
of nursing homes, which was then conducted by the States, was totally
unsatisfactory because it allowed too many marginal or substandard
nursing homes to continue in operation.
Mr. President, that was how it was during a time when lack of money
was not all that much of a problem. Now, at this critical moment, as we
prepare to severely reduce Medicaid funding to the States, the
Republican budget also abdicates nearly all Federal responsibility to
our most vulnerable citizens, the disabled and the infirm elderly in
our nursing homes across our land.
What we have before us, Mr. President, in this basic conference
report that we will be voting on in a short time--this conference
report includes what I declare as an abdication of our Federal role, an
abdication of our responsibility to the 2 million nursing home
residents in our country today.
In this Republican budget we find that their version of what
constitutes nursing home standards, in my opinion, is a warped version
of the current law. Some very crafty legislative drafters have spent
long hours in their attempts to totally and completely undercut the
basic progress that we have made over the past years in protecting the
nursing home residents from abuse.
Let me try to explain exactly what this means:
Where current law allows for Federal standards for nurse aide
training, they are eliminated.
Where current law allows for Federal guidance with respect to
transfers and discharges, the Republican proposal eliminates all
guidance in that area.
Where current law, Mr. President, prohibits discrimination against
Medicaid residents and prohibits facilities from charging residents,
their families or friends to guarantee admission to the facility, those
Federal protections by the Republicans are totally removed from this
bill.
Where current law requires Federal guidelines to qualify as a
facility administrator, these guidelines are totally removed, Mr.
President. They are now left to the States.
Where current law requires that facilities meet Federal standards
with respect to protecting residents' personal funds, these protections
are totally stricken and left up to the States and to the nursing home
owners.
Where current law imposes requirements for sound administration of a
facility, these guarantees are totally expunged from the record.
To add insult to injury, in addition to abdicating so many Federal
responsibilities to these vulnerable individuals and dumping these
requirements on the States, the Republican plan now before us would
also eliminate any required date by which the States must be sure to
meet its responsibility that had formerly been handled by the Secretary
of HHS.

[[Page S 17281]]

So we are now saying that States must meet these requirements
whenever, but not at a specific time. This is unconscionable, Mr.
President. How can we in less than a decade abandon these nursing home
residents? How can we, by a vote of 51 to 48 in this body, say we want
the strongest standards, and again just a few days ago by a vote of 95
to 1 on Monday of this week, and now walk away from all of those
standards and say we are abdicating our responsibilities? What in the
world is going on?
What we are about to do is basically to begin a program of
warehousing the elderly population of our country. We have identified
at least 11 basic nursing home standards that have been abolished under
this plan. I know that there are many more.
This plan allows homes to extort money in return for a guarantee of
admission to a facility. Under present law, Mr. President, this is
prohibited. Now we are abolishing that prohibition.
The Republican plan allows facilities to commingle residents'
individual savings accounts.
It allows homes to keep the interest on resident savings accounts
below $250.
And it goes on and on and on. In fact, it kills Senator John
Danforth's self-determination provision on living wills so that
residents will have all of the information about making and what
constitutes a valid living will.
Mr. President, further, what other quality assurance protection does
the budget package eliminate? It cuts down the fines from $10,000 to
$5,000 per nursing home. The budget plan eliminates the uniform
assessment tool which has been hailed universally by providers, States,
surveyors, and residents alike, and by those people who service
ombudsman nursing home patients and the residents.
All of these changes are bad enough. This legislation allows private
entities to certify that facilities have met the quality standards,
further reducing accountability of the State and the facilities to meet
the Federal guidelines of the Government.
The PRESIDING OFFICER. If the Senator will suspend for one moment
while the Chair gets order. Those Members and staff members in the back
who are having conversations, please take your conversations to the
Cloakroom.
Mr. PRYOR. May I inquire as to how much time remains?
The PRESIDING OFFICER. The Senator has used 7 minutes, 36 seconds.
Mr. PRYOR. I thank the Chair for maintaining order.
Mr. President, I do not have time to complete my statement. Let me
just say that the National Citizens' Coalition for Nursing Home Reform
has written me today urging that we look very carefully at passing this
legislation. The AARP, in their press release this afternoon, expressed
their concern about the enforcement of nursing home quality standards
and implies that they are further weakened in this particular
conference report.
The Nursing Home National Seniors Center, run by Toby Edelman, has
done a memorandum that I am going to ask be printed in the Record, and
other documents, Mr. President.
I also have a letter from Service Employees. These four documents I
ask unanimous consent to be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

National Citizens' Coalition for

Nursing Home Reform,

Washington, DC, November 17, 1995.
Hon. David Pryor,
U.S. Senate,
Washington, DC.
Dear Senator Pryor: The National Citizens' Coalition for
Nursing Home Reform (NCCNHR) has grave concerns about the
language regarding nursing home standards contained in the
report from the Conference Committee. We are extremely
disappointed by the disconcerting language accepted by the
Committee members. Although the Conference language resembles
the current Nursing Home Reform Act, it serves to
significantly weaken and undermine the current standards, to
the dangerous detriment of residents of nursing homes.
Our preliminary review of the conference language has
identified the following areas of concern:
Elimination of the requirement for facilities to provide
care and services to allow each resident to attain or
maintain his or her ``highest practicable level of physical,
mental, and psychosocial functioning.''
Elimination of the right to quality care and quality of
life for each resident. Instead, the conference language
speaks to ``residents'' collectively.
Elimination of the requirement of federal standards for
conducting a resident assessment using a national uniform
minimum data set.
Loss of protections against discrimination based on source
of payment and duration of stay contracts upon admission.
Elimination of federal standards for nurse aide training--
including elimination of required 75 hours of training.
Elimination of the requirement for facilities with 120+
beds to employ a qualified social worker.
Substantial watering down of transfer and discharge
protections.
Significant weakening of survey and certification
requirements, including:
A two-year survey cycle (changed from 9-15 months).
Elimination of comprehensive training for state and federal
surveyors.
Less frequent federal validation surveys--from yearly to
every 3 years.
Public disclosure of survey results--``within a reasonable
time,'' instead of the current, within 14 days.
Significant weakening of enforcement provisions, including:
Elimination of language requiring application of remedies
in such a way as to minimize the time between the
identification of violations and the final imposition of
remedies.
Elimination of language calling for incrementally more
severe fines for repeated or uncorrected deficiencies.
Elimination of retroactive civil money penalties for past
noncompliance.
Reduction of highest civil money penalty from $10,000 to
$5,000.
Provision allowing for deemed status to accrediting
agencies.
This weakening of the federal standards is unwarranted and
unconscionable. Based on a review of proposals submitted by
the American Health Care Association, it is clear that the
nursing home industry played a major role in the drafting of
these provisions--a fact that again highlights the leverage
this industry has at the state and national level.
We strongly urge you, and your colleagues, to oppose this
language. It can only serve to destroy the progress brought
by the 1987 Nursing Home Reform Act--a law passed with
bipartisan support by a previous Congress.
Sincerely,
Elma L. Holder,
Executive Director.
____

[From the AARP News, Nov. 16, 1995]

AARP Statement on the Budget Reconciliation Act of 1995

The American Association of Retired Persons (AARP) remains
very concerned about the magnitude of reductions to Medicare
and Medicaid contained in the conference report to the Budget
Reconciliation Act. While the report includes some further
improvements, Congress still has a long way to go.
The Association is pleased that the Medicare Part-B
deductible remains at $100 a year, as in the House bill. But
the total cuts to Medicare and Medicaid over seven years are
still too much, too fast, and enforcement of nursing home
quality standards has been further weakened in the report.
Four hundred billion dollars in cuts from these two major
health care programs that serve older and low-income
Americans do not meet the fairness test. Reductions in
Medicare called for in the conference report are much more
than is necessary to keep the program solvent into the next
decade.
Millions of American families depend on Medicare and
Medicaid for their basic health care coverage, for protection
against the high cost of long-term care and for financial
security. These protections, for Americans of all ages, are
now at risk.
Cutting $164 billion from Medicaid over the next seven
years is far more than the program can shoulder. Frail, older
Americans, most of whom are single, elderly women who have
worked hard all of their lives, and children from low-income
families would be the hardest hit by such drastic cuts.
At this juncture in the budget debate, it's a shame that a
veto is necessary, but unfortunately, there is no other
alternative. AARP will continue to work with Congress and the
Administration to get fair legislation that ensures future
Medicare solvency and reduces the federal budget deficit.
____

Memorandum.
To: Interested people.
From: Toby Eldeman.
Re conference committee language on nursing home reform.
Date: November 16, 1995.
I've just gotten the conference committee language and have
gone very quickly through it to compare it with the current
law and with the proposals made by the American Health Care
Association.
The language represents a dramatic step backwards in all
respects: the standards facilities would be required to meet,
the survey and certification process, and the enforcement
system. On my first quick reading, I think the most serious
problems are:
1. Standards for facilities:
A. Loss of the entitlement to high quality of care for each
individual resident; the language speaks of care to
``residents.''
B. Loss of language ``highest practicable physical, mental,
and psychosocial well-being'' as description of required
services.

[[Page S 17282]]

C. Loss of protections against Medicaid discrimination in
admission.
D. Loss of federal standards for nurse aid training,
transfer and discharge, resident assessment. States would
have sole authority to determine standards.
E. Loss of Secretary's duty and responsibility for
standards, enforcement and federal money.
F. Substantial watering down of protections in transfer and
discharge.
G. Financial issues: loss of rules specifying what care and
services are covered by Medicaid and what care and services
are not; protection for Medicaid residents who pay the entire
Medicaid rate as their share of cost.
2. Survey and certification
A. Two year survey cycle.
B. Loss of comprehensive training for surveyors by
Secretary.
C. Reduced federal validation surveys; from annual to every
3 years.
D. Public disclosure of survey results--from within 14
calendar days of providing to facility to ``within a
reasonable time.''
3. Enforcement
/A. Deemed status to accrediting agencies (very serious
issue).
B. Loss of language for both states and Secretary requiring
enforcement systems that minimize the time between
identification of deficiencies and imposition of remedies;
more severe penalties for more serious or uncorrected
deficiencies.
C. Loss of retroactive civil money penalties.
D. Reduction of highest civil money penalty to $5000.
It looks to me as if, generally, the conferees listened to
AHCA on the Requirements for facilities and to the Governors
on survey, certification, and enforcement.
Section of bill--What the change is and why the change is a
problem. Whether AHCA proposed the change.
2137(b)(1)(A)--Quality of life: adds the word
``reasonably'' before promotes,'' thus qualifying the
requirement.--Yes
2137(b)(2)--Scope of services and activities under plan of
care: deletes current language ``to attain and maintain the
highest practicable physical, mental, and psychosocial well-
being'' after services and activities: the new language
requires facilities ``to provide services and activities in
accordance with a written plan of care.''--Yes
2137(b)(3)(A)(ii)--Resident assessment: says the instrument
is specified by the state; deletes the requirement that the
assessment be based on minimum data set specified by the
Secretary.--No
2137(b)(3)(E)--Resident assessment: requires facility to
notify state mental health authority or mental retardation or
developmental disability authority, as applicable, of change
in physical or mental condition of a resident who is mentally
ill or mentally retarded. New requirement.--No
Deletes preadmission screening and annual resident review
(PASARR). We don't disagree with this deletion.--Yes
2137(b)(4)(A)(i)--Provision of services and activities:
deletes ``to attain and maintain the highest practicable
physical, mental, and psychosocial well-being'' after
``nursing and related services and specialized rehabilitative
services.''.--Yes
2137(b)(4)(A)--Provision of services: changes language from
providing services to ``each resident'' to ``residents'' for
social services (2137(b)(4)(A)(ii)); pharmaceutical services
(2137(b)(4)(A)(iii)); dietary services (2137(b)(4)(A)(iv));
activities (2137(b)(4)(A)(v)); dental services
(2137(b)(4)(A)(v)).--Yes
2137(b)(4)(A)--Provision of services: deletes mental health
services for mentally ill and mentally retarded residents.--
Yes
2137(B)(5)(F)(iii)--Nurse aid training: Adds a new
exclusion from definition of nurse aide; excludes a person
``who is trained, whether compensated or not, to perform a
task-specific function which assists residents in their daily
activities.'' The industry has wanted this language to hire
people to feed residents and do other tasks, but not to train
them as nurse aides.--Yes
Excludes current language requiring facilities with more
than 120 beds from having at least one social worker with at
least a bachelor's degree in social work or similar
professional qualifications. 1396r(b)(7).--No
2137(c)(1)(A)(v)--Residents rights: accommodation of needs;
adds language after the right to receive notice before room
or roommate is changed to say ``unless a delay in changing
the room or roommate while notice is given would endanger the
resident or others.'' The industry has not liked giving
notice.--Yes
Excludes current language giving residents the right to
refuse certain transfers (transfers facilities make to get
coverage under a payment program). 1396r(c)(1)(A)(x).--Yes
2137(c)(2)(B)(ii)(V)--Transfer and discharge: adds a new
reason not to have to give a 30 day notice: ``a case where
the provision of a 30-day notice would be impossible or
impracticable.'' This language essentially eliminate the 30-
day notice requirement; facilities would always claim it was
impossible or impracticable to give 30 day notice.--Yes
2137(c)(2)(B)(iv)--Transfer and discharge: adds a new
``exception'' statement; ``This subparagraph shall not apply
to a voluntary transfer or discharge necessitated by a
medical emergency.'' Since there is no definition of
``voluntary,'' we would see many transfers and discharges
called voluntary.--Yes
2137(c)(2)(C)--Orientation for transfer and discharge:
changes the language to require just ``reasonable''
preparation and orientation; and instead of requiring, as
current law does, that preparation and orientation ``ensure
safe and orderly transfer or discharge,'' the new language
requires only that preparation and orientation ``promote''
safe and orderly transfer or discharge.--Yes
2137(c)(2)(D)(iii)--Bed reserve: adds language to confirm
that a resident is not entitled to the next available bed if
it is a private room.--Yes
Deletes current language requiring facilities to give
information to residents about advance directives.
1396r(c)(2)(E).--No
2137(c)(3)(C)--Access and visitation rights: adds new
qualification to visits by saying there is immediate access
``unless such access would endanger the health or safety of
the resident or others in the facility.'' Denying access to
family members who complain is common. This language would
strengthen facilities' ability to deny access to visitors.
Notice that the language does not include this qualification
for any other category of visitor.--Yes
Deletes current language prohibiting discrimination in
admission. 1396r(c)(2)(5).--Yes
2137(c)(5)(B)(i)--Protection of residents funds: raises the
amount that must be deposited in an interest bearing account
to $250. Note that the personal needs allowance is $35 per
month (although states may allow more).--Yes
2137(c)(5)(B)(ii)--Protection of resident funds: deletes a
word from the current language, which I think is
``separate.'' If that's the deletion, the language would no
longer require separate accountings of residents' funds.--Yes
Deletes current language requiring facilities to notify
residents when their balances are $200 less than the amount
that would make them lose Medicaid eligibility.--No
2137(c)(5)(B)(iii)--Protection of resident funds:
conveyance upon death: adds language ``All other personal
property, including medical records, shall be considered part
of the resident's estate and shall only be released to the
administrator of the estate.'' This language would appear to
allow facilities to keep residents' property and release it
only to the administrator of the estate. It would also enable
facilities to deny medical records to family members unless
they were appointed administrator.--Yes
Deletes current language which defines as a Medicaid person
an individual whose share of cost equals the entire Medicaid
rate. These people currently are considered Medicaid
residents and cannot be charged more than the Medicaid rate.
1396r(c)(7)(B).--Yes
2137(d)(1)(C)--Nursing facility administrator: adds
language to require administrators of all facilities, whether
freestanding or hospital-based, to meet the Secretary's
standards. The industry has been interested in making
hospital-based facilities meet nursing facility standards.
This is one way to make it difficult for hospital-based
facilities to be nursing facilities.--Yes
2137(d)(4)(A)--Miscellaneous administrative issues:
compliance with federal, state, and local laws and
professional standards: applies this language to hospital-
based facilities. Same reasoning as above.--Yes
2137(e)(1)--State requirements; specification and review of
nurse aide training; deletes current requirements that state
nurse aide training program meet federal standards.--No
2137(e)(3)--State requirements; state appeals process for
transfers and discharges; deletes current requirement that
states meet federal standards on appeals process.--No
2137(e)(4)--State requirements; nursing facility
administrator standards; adds requirement that hospital-based
administrators meet administrator standards. Same reasoning
as other issues where hospital-based facilities must meet
same requirements as free-standing.--No
2137(e)(5)--State requirements; specification of resident
assessment instrument; deletes current requirement that state
choose a resident assessment instrument designated by the
Secretary or approved by the Secretary as being consistent
with the minimum data set.--No
2137(e)(7)--State requirements; keeps preadmission
screening but deletes annual resident review. AHCA wanted
PASARR deleted.
2137(f)(l)--In current law, this establishes the
Secretary's duties. The new language makes this a state duty.
So current federal law which now says: ``It is the duty and
responsibility of the Secretary to assure that requirements
which govern the provision of care in nursing facilities . .
. and the enforcement of such requirements are adequate to
protect the health, safety, welfare, and rights of residents
and to promote the effective and efficient use of public
money.'' Is now changed to say ``It is the duty and
responsibility of a State with a MediGrant plan . . . .''
2137(f)(2)--Requirements for nurse aid training and
competency evaluation programs: This is Section (f), but it
is only a state duty under the new language. Specific
language from current law is deleted, as requested as AHCA,
but I can't read the language on my copy tonight.
Deletes federal requirements for transfer and discharge and
does not place the duty on states. 1396r(f)(3).
2137(f)(3)--Qualifications of administrators: adds language
to require hospital-based administrators to meet federal
standards.--Yes
Deletes current rules for Criteria for Administration,
which required the Secretary to establish rules for
administration in such areas as disaster preparedness,
direction of medical care by a physician, clinical records.
1396r(f)(5).--No

[[Page S 17283]]

Deletes current rules for Criteria for Administration,
which required the Secretary to establish rules for
administration in such areas as disaster preparedness,
direction of medical care by a physician, clinical records.
1396r(f)(5).--No
Deletes List of items and services furnished in nursing
facilities not chargeable to the personal funds of a
resident. 1396r(f)(7). This language required the Secretary
to establish by rules which items and services are covered by
Medicaid and which items and services could be charged to
residents. As 1396r(f)(7)(A) explicitly says, Congress first
told the Secretary to publish such rules in 1977 as part of
the Medicare-Medicaid Anti-Fraud and Abuse Amendments of
1977. HCFA finally published these rules in 1992 or so. I can
get the exact date.--No
Deletes current language on PASARR. 1396r(f)(8).--Yes
Deletes current requirement re federal criteria for monitor
state waivers of nurse staffing requirements. 1396r(f)(9).--
No
2137(g)(1)(A)--Survey and certification: deletes
prohibition against states determining compliance with state
facilities.--Yes
Survey and certification: deletes requirement for
educational program for staff and residents and their
representatives. 1396r(g)(1)(B).--No
2137(g)(2)(A)(iii)(I)--Annual surveys: extends the time to
24 months (from 12 months) unless the facility has been
subjected to an extended survey. In that case, 12 months.--No
2137(g)(2)(A)(iii)(II)--Special surveys following change in
ownership, administration, management: changes time to 4
months (I can't read what the current time period is.)--Yes
2137(g)(2)(C)(i)--Survey protocol: says protocol that the
Secretary has developed, tested, and validated ``as of the
date of the enactment of this title.'' Current law says as of
Jan. 1, 1990.--No
2137(g)(2)(C)(ii)--Survey protocol: says surveyors must
meet minimum qualifications established by the State. Current
law says Secretary.--No
Deletes current requirement that Secretary provides for
comprehensive training of state and federal surveyors.
1396r(g)(2)(E)(iii).--No
2137(g)(3)(B)--Validation surveys: Requires Secretary to
conduct validation surveys at least every 3 years of 5% of
facilities in the state, but at least 5 per state. Current
law requires these numbers of validation surveys annually.
1396r(g)(3)(B).--No
Deletes Reductions in Administrative Costs for Substandard
Performance, current language which allows the Secretary to
penalize states that fail to perform survey and certification
activities adequately. 1396r(g)(3)(C).--No
Deletes current language that permits states to maintain
and utilize a specialized survey team. 1396r(g)(4) [This is
part of Investigation of Complaints and Monitoring Nursing
Facility Compliance]--No
2137(g)(5)(A)--Disclosure of Results of Inspections and
Activities; Public Information: new language requires public
disclosure of survey information ``within a reasonable
time,'' current law says within 14 calendar days after such
information is provided to facility.--No
2137(h)(1)--Enforcement: adds new (A) saying state must
require facility to correct deficiency.--No
Deletes current language at end of 1396r(h)(1) authorizing
retroactive civil money penalties.--Yes
Deletes current language about use of civil money penalties
that are collected to protect health or property of
residents. 1396r(h)(2)(A)(ii).--No
Deletes current language at the end of 1396r(h)(2)(A)
saying that state criteria must minimize the time between
identification of deficiencies and imposition of remedies and
provide for incrementally more severe fines for repeated or
uncorrected deficiencies; and that states may provide for
other specified remedies, such as directed plans of
correction.--Yes
Deletes current language about deadline and guidance on
enforcement. 1396r(h)(2)(B).
2137(h)(2)(C)--Assuring prompt compliance: Changes
mandatory imposition of denial of payment if a facility fails
to come into compliance within 3 months; changes mandatory
into permissive--state ``may'' impose the remedy.--Yes
Deletes language about funding for temporary management
other remedies. 1396r(h)(2)(E).--No
Deletes Incentives for High Quality Care. 1396r(h)(2)(F).--
No
2137(h)(3)(B)--Secretarial authority: substantially
revised. New language requires Secretary to notify state of
deficiency it finds in a facility; must give state reasonable
period of time to take enforcement action. If state doesn't
act or if the deficiency remains uncorrected, the Secretary
can take enforcement action.--No
Deletes language permitting Secretary to impose retroactive
civil money penalty. 1396r(h)(3).--Yes
2137(h)(3)(C)--Civil money penalty: Reduces maximum penalty
to $5000 (from $10,000).--Yes
Deletes language (as for the state) requiring criteria to
minimize the time between identifying deficiencies and
imposing sanctions, etc. 1396r(h)(4).--No
2137(h)(4)--Special Rules Regarding Payments to Facilities;
Continuation of Payments Pending Remediation: revises the
language to permit payment to facilities for 6 months; no
requirement of states repaying Secretary if the facility does
not come into compliance.--No
Deletes current language about immediate termination of
participation for facility where state or Secretary finds
noncompliance and immediate jeopardy, 1396r(h)(5); Special
Rules where State and Secretary do not agree on finding of
noncompliance, 1396r(h)(6); special rules for timing of
termination of participation where remedies overlap,
1396r(h)(7).
New language about sharing of information between states
and Secretary. 2137(h)(6).
New language, Construction, about Medicare Requirements.
2137(l)(1).
New language, Construction, permitting accreditation at
option of state of Secretary. 2137(i)(2).
____

Service Employees

International Union, AFL-CIO, CLC,

Washington, DC, November 17, 1995.
Dear Senator: On behalf of the 1.1 million members of the
Service Employees International Union, I urge you to vote
against the conference report on Budget Reconciliation. Among
the damaging provisions included in the bill are amendments
to the Nursing Home Reform Act which would cripple the Act,
endanger nursing homes residents, and impoverish their
families.
The amendments in the Conference Report are merely another
tactic pursued by opponents of the nursing home reform act to
repeal those provisions. To place this effort in context, I
would remind you that as passed by the House and introduced
in the Senate, the reconciliation bills repealed the federal
standards. At introduction, the extreme proposals repealed
even protections against use of physical and chemical
restraints, spousal impoverishment, and training of nurse
aides. Only when the Senate voted to retain the Nursing Home
Reform Act, were the opponents of the protections for nursing
home residents turned aside in their effort to repeal the
standard.
In their new tactic, opponents of federal nursing homes
standards are attempting to repeal the standards by enacting
gutting amendments. For example, on quality of care, where
the current statute states that ``a nursing facility must
provide services and activities to attain or maintain the
highest practicable physical, mental, and psychosocial well
being of each resident in accordance with a written plan'',
the opponents have crafted an amendment in the conference
agreement that restates this provision to read ``a nursing
facility must provide services and activities in accordance
with a written plan''.
On training, current statutes require that workers
providing nursing or nursing related services be trained and
receive in-service education. The opponents' amendment would
allow all nursing facilities, regardless of the number of
civil penalties, deficiency reports, and demonstrated
substandard care incidents at the facility, to perpetuate
those problems by running their own nurse aide training
programs. In addition, the opponents' amendment excludes from
the training requirement ``any individual who is trained,
whether compensated or not, to perform a task-specific
function which assists residents in their daily activities''.
The opponents' amendment does not set standards for the
training, does not require continuing education, and does not
even require that the ``task-specific function'' performed by
the individual be the task for which they receive the
undefined training.
On spousal impoverishment, the opponents of federal
standards have scored one of their most tragic successes.
They have included a repeal of the provision that stated that
a ``nursing facility must not require a third party guarantee
of payment to the facility as a condition of admission (or
expedited admission) to, or continued stay in the facility''.
With this provision repealed, spouses and children can be
coerced by nursing homes to pay nursing home bills that
average $38,000 a year.
Finally, were any facility to be so incompetent that it
manages to violate the few shreds of remaining federal
standards, they will be saved from their own incompetency by
toothless enforcement provisions. The opponents of federal
standards have included verbatim amendments drafted by the
American Health Care Association. The nursing home industry's
amendments, as would be expected, strike language that allows
a state to ``provide for a civil money penalty for the days
in which it finds that the facility was not in compliance
with such requirements,'' which ``shall provide for the
imposition of incrementally more severe fines for repeated or
uncorrected deficiences'' and on and on and on.
We know from experience what happens when the Federal
government pulls out of nursing home regulation. Federal
regulation was minimal during the 1960s, `70s, and early
`80s, and the results were disastrous: Disabilities,
permanent injuries, and even premature death to nursing home
residents. The 1986 report of a national study commission
found that: ``In the past 15 years, many studies of nursing
home care have identified both grossly inadequate care and
abuse of residents.'' The Gingrich troops often talk as if
they are conducting an important experiment on the power of
free markets. When it comes to nursing homes, we've tried
this experiment before, and the tragic findings are burned in
our memory.
The Federal government jumped into nursing home regulation
because of abuses in the

[[Page S 17284]]
industry. Incredibly, the Republicans propose to abandon oversight
activities at the same time that they begin squeezing nursing
home operators in a financial vise. About half of nursing
home revenues come from Medicaid, the program Speaker
Gingrich proposes to cut by over $160 billion. Nursing home
workers know well how corners are cut and how patient care
suffers when executives focus on cost reduction. Who will
protect patients and who will safeguard quality as nursing
home operators scramble to cope with massive revenue losses?
Future trends will also transform the type of care
delivered by nursing homes. Nursing homes will be caring for
people with more serious medical needs. A common strategy to
control health care costs involves moving patients out of
hospitals and into nursing homes--during surgical recovery,
for instance. One reason that nursing homes have been trusted
with such work is the Federal training standards for nursing
staff. Our workers tell us that this training has
substantially improved nursing home operations. The training
requirements must not be junked at a time when the home
population is getting sicker and requires more sophisticated
care.
Federal regulations are the lifeline protecting quality of
care for nursing home residents. Federal oversight helped
rescue us from a grim past. We must not ask nursing home
residents to give up that lifeline as we sail into a stormy
future.
Very truly yours,
John J. Sweeney,
International President.

Mr. PRYOR. Mr. President, finally, I never thought I would see the
day of such an attempted emasculation of nursing home standards which
we fought so hard to protect. I never thought I would see it; never
thought it would happen. I do not know why it is happening, but it is
unbelievable that this Nation, the greatest Nation on the face of the
Earth, with the full force and effect of the Republican-controlled
Senate and the House, our Federal Government is about to wash its hands
of the responsibility toward protecting 2 million seniors who today
reside in American nursing homes.
While we have the basic safeguards of 1987, we are today basically
walking away from those safeguards and saying to that nursing home
resident, ``We want no more to do with you. We are going to cut you
adrift, and we are going to let you basically fend for yourself.''
Over Thanksgiving, I challenge my colleagues on the other side of the
aisle, or anyone who supports obliterating these standards, to go back
to a nursing home in your State, to look those residents in the eye and
to tell them how proud you are to have voted to compromise their safety
and well-being and quality of life and walk away from the commitment
that we have had for almost a decade to protect their livelihood.
Mr. President, I thank the Chair, and I yield the floor.
Mr. ABRAHAM addressed the Chair.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from
Texas.
The PRESIDING OFFICER. The Senator from Texas is recognized for 5
minutes.
Mrs. HUTCHISON. Thank you, Mr. President, and I thank the Senator
from Michigan.
This afternoon late, a Mr. Don Shelby called our office. He was
calling from the St. Vincent de Paul Hospice in Austin, TX. He told me
that he had voted for me in the last election and that he would not be
alive long enough to vote for me again, but he and the people in the
hospice with him were so concerned about what is going on in Washington
that they collected $8 in change to go to a pay phone and call my
office.
And the message was this: ``Stick to your guns. I will not be around,
but I want to know when I die that my children are going to have a
future.''
I want to say to Mr. Shelby and the people who contributed the $8 to
make that call, we will not let you down. We will not. We will stick to
our guns. We will do what is right for this country, as hard as it may
be. We will do the right thing.
The people of this country have been promised for 25 years that the
politicians in Washington would balance the budget. Twenty-five years,
and we have failed every year. This is our opportunity. This is our
chance.
Always before people said, ``They'll never do it. The entitlements,
it's too hard; they'll never do it.'' But we are doing it.
I have heard speeches on this floor all afternoon. ``Those radical
Republicans.'' Radical? Is it radical to keep a promise you made? Is it
radical to run for an election in 1994 and promise the people that you
will balance the budget, that you will make the tough choices, no
matter the consequences and then keep that promise? I do not think so.
It is unusual, because people have been promised so many times in the
past and the promises have not been kept. It is unusual to keep a
promise, but I do not think it is radical, and I do not think the
American people do either.
We are going to pass tonight the Balanced Budget Act of 1995. It will
be the first time that the politicians in this country in 25 years have
kept their promise. The President keeps talking about a balanced
budget, but he is doing what politicians have done for 25 years, and
when it comes time to sign the dotted line, he is demurring, he is
walking away from his promise that he made in the election of 1992 and
he is saying, ``Oh, well, of course, I want a balanced budget, and I'm
going to talk about it, but when it's presented to me, I'm not going to
sign on.''
The people are not stupid. They do understand a promise kept, and
that is what is going to happen tonight. We are going to keep our
promise to the homemakers of this country that they will have security
and they will be able to contribute to IRA's just like those of us who
work outside the home can do, so that the one-income-earner couple that
sacrifices so that the homemaker can stay home and raise children will
have the same retirement opportunities as if there had been two incomes
earned for their families.
We are going to have welfare reform, and we are going to say to the
people who are out there working to make ends meet that it is worth it
to work, because if able-bodied people can work but choose not to, they
will not be on the welfare wagon more than 5 years in their lifetime.
For the first time, we will put a lifetime limitation on able-bodied
welfare recipients.
And we are going to reform Medicaid. We are going to give it to the
States where they can run it more efficiently. We are going to save
Medicare. We are going to save Medicare for our elderly. We are going
to increase spending in Medicare over 7 percent per year. And we are
going to slow that rate of growth from 10 percent so that we can save
the system--so that Mr. Shelby will know that it will be there for his
children.
Mr. President, we may make a few mistakes. This is a big bill. We may
not do everything right. But there is one mistake that we cannot afford
to make and that is to do nothing so that our children will inherit
this debt of $5 trillion.
I yield the floor.
Mr. REID addressed the Chair.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Mr. President, on behalf of Senator Exon, I yield myself 5
minutes.
The PRESIDING OFFICER. The Senator is recognized.
Mr. REID. Mr. President, it is interesting to note that since
yesterday the name of this bill has changed. It is no longer the
reconciliation bill. It is called something like the Balanced Budget
Act of 1995. I am certain that the spin masters have said: All you good
Republicans, do not refer to this as reconciliation because the
American people do not like what they have heard.
I think rather than change the name to the Balanced Budget Act of
1995, a more appropriate name would be maybe something like the End of
Rural Hospitals Act, or maybe you could come up with something like the
Get Old People Act of 1995, or maybe Ruin the Environment Act of 1995,
or maybe Destroy Education Act of 1995, or Punish the Veterans Act of
1995, or maybe something even simpler like Save the Big Sugar Interests
of the United States Act of 1995.
Mr. President, it is not all or nothing. You see, on this side of the
aisle, there are many people that believe in a balanced budget. In
fact, most people do believe in a balanced budget amendment. The former
chairman of the Budget Committee, the ranking member, the senior
Senator from Nebraska, knows what balanced budgets are all about. He
started talking about balanced budgets a long time ago when he

[[Page S 17285]]
was Governor of the State of Nebraska. We have many people who believe
in balanced budgets, but they believe in doing it in a fair way that
does not hurt seniors, rural hospitals, the environment, damage
education, or punish veterans.
Mr. President, I think that we should recognize that the reason the
name was changed overnight from ``reconciliation'' to the ``balanced
budget act of 1995,'' I repeat, is because the American public does not
like what they have heard in this reconciliation bill--this thousand-
page bill we received a few minutes ago.
So this, Mr. President, is what the American people deserve, and that
is a fair bill to balance the budget, which we want to do, also.
Mr. President, on anything that I have said to this point, the
Senator from New Hampshire, Senator Gregg, I am sure would disassociate
himself with me. But what I am going to say now, he would associate
himself with me, and he has given me permission to do so. We have a
point of order that would lie against this bill, but we are not going
to offer it. It is the Byrd rule point of order against the so-called
trigger provisions contained in a section of the act dealing with the
sugar program. It is on the basis--on many bases, but there is no
change in outlays or revenues. We are not going to do that. But
everyone should be aware that the Senator from Nevada and the Senator
from New Hampshire are going to go after these sugar interests, which I
believe, Mr. President, is one of the most damaging things that is in
this piece of legislation.
This legislation does nothing to help the family farmer. It hurts the
family farmer. But what it does do is make a sweet deal for big sugar
growers. As I said, this does not help the small family farmer.
Seventeen cane growers get 58 percent of the benefits that come to all
cane growers. One received more than $65 million--one person--in 1-
year; 33 growers received benefits of over a million dollars apiece a
year; in Florida, the number one State in sugar production, two growers
account for 75 percent of production.

So the U.S. Senate and the Congress should be advised that the
Senator from Nevada and the Senator from New Hampshire are going to
make sure that the sugar program in the future is treated fairly, which
it should be. The real losers in the Sugar Program that we have is the
American consumer, who pays a huge amount for their sugar and they
should not have to.
I yield the remainder of my time.
Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from
Montana.
Mr. BURNS. Mr. President, I thank my friend from Michigan.
This is probably a historical time for this body. The first time in
many years that we have had the opportunity to balance the budget, to
put us on the trail to do something responsible. I remember the
speeches from the last 6 years and people saying, ``We believe in a
balanced budget, but look at all the pain; maybe we can do it next
year.'' Well, that next year has gone on for about 40 years and we kind
of find ourselves in a pickle.
I had a wonderful woman that used to work in our office. She has
since transferred to Minneapolis with her husband, where he found a job
opportunity, and they just had a brand-new baby. That is what this
debate is all about. It is about this young one in this picture, 3-days
old, born 10/7/95, 7\1/2\ pounds, 21\1/4\ inches long. That is what it
is all about, folks. To do anything different jeopardizes the future of
this young woman, this young lady right here in the picture. And it is
because there are some of us who care to stand for maybe some very
unpopular things right now, and take the responsibility, because we do
care for this young woman. We want to hand her a nation that is strong
economically and also strong politically.
This debate has gone on a long time. Everybody says, ``Well, you have
to quit wrangling up there on the Hill. We do not like to be
furloughed.''
I just got a letter from a young woman in Winston, MT. It says:
``Stop the talking, do something different. I want to have a nice
Thanksgiving and a Christmas.'' It is signed, ``Amanda Baum, Winston,
Montana.''
Well, Amanda, it is a two-way street. We offered a continuing
resolution that would let your father go back to work as soon as
possible. But, you know, there is a person on the other end of
Pennsylvania avenue that said, no, I do not like that, so I am not
going to sign it. So you are on furlough. But it takes two people. I
say change the message and call the House at the other end of
Pennsylvania Avenue.
In this Balanced Budget Act of 1995, there is a $500 per child tax
credit. What does that mean to your individual States? I will tell you
what it means in Montana. The total number of returns eligible for a
tax credit will be around 66,000 people. There are only 800,000 people
in my whole State, but 66,000 returns will qualify for this $500 per
child tax credit. It will cover the amount of dependents of around
98,000 people, and the value to the State of Montana is around $46
million. That is money in families' pockets. That is money that can be
put in a savings account to buy a home. It is money that can be put in
a savings account that can pay for education for our young ones coming
along, and for those folks who want the responsibility of managing
their own money.
So in this Balanced Budget Act, let us talk about some real things,
like capital gains that help us all.
No, we did not get all the AMT tax we wanted. Nonetheless, it does do
something about depreciation--depreciation that creates jobs and
expands job opportunities. That is what is in this package. That is
what we need. We have to expand job opportunities.
Economic development--my goodness, just the presence of the
Government in your neighborhood is not economic development. We must
produce real growth, either manufacturing or the development of natural
resources that provides natural wealth. It just does not start here in
Washington.
I was taken aback a while ago when I saw the former Governor of
Arkansas worrying about the nursing home regulations. What is the
matter? Is this town the only one that has a conscience? He has no
faith in the State governments to regulate their nursing homes to the
benefit of our elderly?
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. BURNS. I am in complete support of this package. I yield the
floor.
Mr. EXON. I yield 5 minutes to the Senator from West Virginia.
Mr. ROCKEFELLER. I thank the distinguished Senator from Nebraska.
Mr. President, I am stunned that we still have to come to the floor
to defend Medicare from the largest, most dangerous, most serious cut
ever to surface since it was signed into law by President Johnson
exactly 30 years ago.
Yes, this nightmare is not a dream. The budget plan on the Senate
floor this very minute aims its fire at Medicare for $270 billion in
cuts over the 7 years. Guess what also survived the conference? A kitty
of $245 billion of new tax breaks, new tax cuts, new tax relief that go
to the wealthiest Americans and all kinds of corporations.
That is right. To the 30 million senior citizens counting on
Medicare, to the disabled citizens counting on Medicare, it is still
the piggy bank for a whole lot of things that have nothing to do with
Medicare and much more to do with tax breaks for the wealthy, tax
increases for working families, cuts in education, and the other
features of this budget plan now on the Senate for a final vote.
You do not need a graduate degree in mathematics to do the basic
arithmetic. Start with the proposition made by the Republican side of
the aisle--that Medicare must be cut to save the program, preserve it,
keep it solvent. But that is when you hit the brick wall. The trustees
of the Medicare Part A Hospital Trust Fund say that $89 billion are
needed to extend the Fund's solvency until the year 2006. Not $270
billion, $89 billion. That is a difference of $181 billion.
Why won't the Republicans listen to Medicare's trustees, and limit
Medicare cuts to $89 billion so the program is solvent for 10 full
years? Because they're listening to the tune whistled on the steps of
the Capitol over a year ago, when the Contract for America was unfurled
and $245 billion of tax breaks were promised.
Of course, none will admit that Medicare is being raided to pay for
tax breaks for the rich. Who in their right

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mind would make that kind of confession?
But we do not need a confession. The mountain of evidence is right
here in this stack of paper that is the Republican budget plan called
reconciliation. Medicare cuts of $270 billion or even more. Tax breaks
of $245 billion. Case closed.
This $270 billion sounds like a huge cut because it is a huge cut.
You don't get $270 billion out of Medicare with a few nips here and a
few tucks there. Squeezing that much money out of Medicare means
increasing expenses for senior citizens, shrinking payments for
hospitals and other providers, weakening Medicare's role in protecting
against shoddy health care, and resorting to cheaper ways to pretend
seniors will still get reliable health insurance. Make no mistake about
it, $270 billion in Medicare cuts will hurt and will be noticed.

In fact, let us take an up-close look at just how the Republicans
came up with $270 billion in Medicare cuts to pay for tax breaks.
But first, maybe I need to start by reminding some people around here
just how important Medicare is to a vast portion of the American
population. No wonder Americans are more likely to say about Congress
they are scared to death than just angry.
It is Medicare that the phrase, crown jewels, should be reserved for.
The enactment of Medicare, as part of Social Security, was one of
America's great triumphs. When the country said its older and disabled
citizens would have health security for the first time in America's
history, we took one of our greatest leaps as a nation. Before its
enactment, less than half of this country's senior citizens had any
kind of health insurance. An illness or accident or health problem
would immediately crush someone in their 60's or 70's or 80's, or wipe
out his or her children and grandchildren.
That is why Medicare was created, fought over, and ultimately
enacted. And it has worked. The 97 percent of America's seniors--30
million people--now can wake up every morning, knowing Medicare is
there. It has lifted seniors out of the poverty that the crushing costs
of health care used to bear down on them. It has given them the peace
of mind that they are not an overwhelming burden to their children and
grandchildren. It has given them the dignity to live the later years
without the terror of what will happen to them if they fall or need
surgery.
Mr. President, we are talking about 30 million senior citizens whose
average income is less than $17,000. We are talking about 330,115
senior citizens in West Virginia whose average income is around
$10,000. We are talking about older Americans who already spend one-
fifth of these meager incomes on health care expenses that are not
covered by Medicare--which include Medicare premiums and deductibles,
prescription drugs, eyeglasses, certain tests, home care, and the list
goes on.
And we are not just talking about Medicare's meaning for senior
citizens in West Virginia or Massachusetts or California. It is the
same for seniors in Kansas, in Texas, name your State. We are talking
about people with average incomes of $24,000 pay a fifth of their
incomes on health care already, who are about the only Americans that
have health care protection that cannot be taken away.

Until today. Until we see this incredible budget plan that still
takes $270 billion from Medicare, not to mention the $170 or $180
billion from Medicare. Not to save Medicare, but to come up with $245
billion in tax breaks for people with incomes far, far higher than
$24,000 a year.
Now it is time to talk about just exactly how this budget gets $270
billion out of Medicare.
It starts with a plan the whole country got a special education in
this week--because it was even attached to the bill that is only
supposed to ensure the Federal Government can operate.
It starts with a plan the whole country got a special education in
this week--because it was even attached to the bill that is only
supposed to ensure the Federal Government can operate.
I am talking about a Medicare premium increase. It may have been
stripped from the continuing resolution, but it is back. This budget
increases Part B premiums for seniors by $11 a month--adding up to an
extra $1,240 for individual seniors over the next 7 years and an extra
$2,480 per couple on Medicare. That is on top of everything else they
are already spending on health care.
There is plenty more.
Remember the BELT idea when we had the Senate reconciliation bill on
the floor a few weeks ago? It is gone in name, but not in spirit.
Obviously, $270 billion in cuts means a lot less money for payments
to doctors, hospitals, labs, and other health care services. But what
happens if the targets in this budget are missed? Well, before, the
BELT was whipped out, and it was actually called that in the Senate
bill. Now it has been given a more subtle name, but it's still plenty
lethal. It is called the lookback--this budget tells the Secretary of
Health and Human Services that he or she will have to make last-minute,
extra, surprise cuts in Medicare payments if for some reason all the
cuts made before didn't go deep enough. This budget has to have this
kind of last-minute Medicare guillotine built in. This budget has to
get $270 billion out of Medicare, no matter what, or there won't be
$245 billion to dole out in tax breaks.
It goes on and on, Mr. President. Changes, cuts, setbacks, weakening
of standards--it is all here to cut Medicare by $270 billion.
In this budget, senior citizens are supposed to fend for themselves.
Before this budget, they were protected from balance billing when they
brought private insurance plans. But in this Republican budget, the
price gouging can start again.
Before this budget, there were Federal standards to make sure tests
done in the labs located in the doctors' office were accurate and
reliable. But in the Republican budget, the salespitches will start
exploding. Medicare vouchers for managed care will be waved around,
luring seniors into managed care and locking them in for 1 year. I can
hear the telemarketers and advertisers writing the scripts, the
jingles, and hiding the fine print--because here we come, Medical
Savings Accounts. With this Republican budget, Medical Savings Accounts
will be targeted, you can count on it, at the healthier seniors,
driving up costs for everyone else and for the Medicare Program, and
driving doctors away from accepting seniors.
Mr. President, there are consequences to $270 billion of Medicare
cuts. Ask the hospitals of your State. Listen to the senior citizens
whose premiums and deductibles will go up.
Mr. President, I ask unanimous consent to have printed in the Record
a letter that denounces the Republican plan.
There being no objection, the material was ordered to be printed in
the Record as follows:

America's Hospitals and Health Systems

November 17, 1995.
Hon. John D. Rockefeller IV,
Hart Senate Office Building,
Washington, DC.
Dear Senator Rockefeller: The undersigned national, state
and metropolitan organizations, representing more than 5,000
hospitals and health systems nationwide, cannot support the
conference report on H.R. 2491, the budget reconciliation
bill. Our reason is straightforward: as it stands, this
legislation, viewed in its entirety, is not in the best
interest of patients, communities and the men and women who
care for them.
Hospitals and health systems support the stated goals of
the conference report--a balanced budget, a strengthened
Medicare trust fund and restructured, more efficient Medicare
and Medicaid programs. In fact, we have offered several
concrete and reasonable alternatives to achieve these goals
without significantly reducing the quality or availability of
patient care. For the most part, these alternatives were
rejected.
In this long budget debate, America's hospitals and health
systems have been guided by principles based on ensuring good
patient care now and in the future:
The health care protection for our nation's most vulnerable
populations--the elderly, the poor, the disabled and millions
of children--is inadequate.
The tools which could enable hospitals and health systems
to continue to provide high quality care to beneficiaries in
the new Medicare marketplace are insufficient. The necessary
tools were included in the House-passed Medicare Preservation
Act, but were significantly diluted during the conference
process.
We have consistently stated that the budget reductions in
Medicaid and Medicare remain too deep and happen too fast.
Hospitals and health systems are willing to shoulder a fair
share of the reductions needed for a balanced budget. But the
reductions in the conference report will jeopardize the
ability of

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hospitals and health systems to deliver quality care, not just to those
who rely on Medicare and Medicaid, but to all Americans.
Although we cannot support the conference report, we stand
ready to work with Congress and the Administration on a fair
approach to reducing spending, balancing the budget and
protecting the availability and quality of patient care.
Sincerely,
Signed by 84 hospital plans.
Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from
Kansas.
Mrs. KASSEBAUM. Mr. President, I rise to strongly support the
legislation before us, the Balanced Budget Act of 1995, because I think
it reflects sound budget and policy priorities that will be of enormous
benefit to this Nation through the next century.
This is really what it is about, trying to lay out a roadmap that is
going to provide change, provide flexibility, provide initiative, that
can give us a strong program to carry us through the years and for the
next generation to come and generations after that.
There may be some concerns about this turn or that turn. It is an
enormous package of very important initiatives. I have great
confidence, Mr. President, that we can make it work, and it will
require the best efforts of all on both sides of the aisle and working
with our State legislatures and our communities to see it is
accomplished.
I would like to speak briefly about two parts of this package that I
have been most directly involved in. One is student loans. This
legislation includes $4.955 billion in savings in Federal student loan
programs over the 7 years. Earlier today, the ranking member of the
Labor and Human Resources Committee and colleague from Massachusetts,
Senator Kennedy, said these provisions would help banks and guaranty
agencies at the expense of students.
I just point out, indeed, that is not the case. Seventy percent of
the savings are achieved by reducing subsidies to or imposing new fees
on banks and guaranty agencies. None of the savings are achieved by
increasing costs to students or their parents.
It is very important that this is understood in the public where a
message has been put out that is totally erroneous about the effects on
students. The remaining 30 percent of savings are achieved by capping
the direct loan program at 10 percent of loan volume. This would not
change the level of the loan or the amount of the loan. A direct
lending program may mean the students may get their loan money more
quickly, but it does not have any effect on the amount or interest
rates of those loans.
In addition, the bill makes income-contingent repayment of student
loans available to all students, not just those participating in the
direct loan program. I remain concerned about the risk that the direct
loan program poses to taxpayers. That is why I believe Congress is
being fiscally responsible by demanding to see how it works before
expanding it.
I do not believe the Department of Education should become the third
largest consumer lender in the country. That, indeed, is where it is
headed if we go to a full, direct lending program on student loans,
consequences which I think need to be carefully thought out and
reviewed.
Mr. President, I also wish to speak about the child care provisions
in this bill. I am pleased that we have, I think, some very strong
child care provisions. The bill combines $10 billion in mandatory
spending and $7 billion in discretionary spending into a consolidated
system for providing child care for children from low-income families,
including those working their way off welfare.
This is over 7 years. Again, I think when we recognize that 70
percent of the mandatory funds are to be used for families making the
transition from welfare to work and for those at risk of going on
welfare, and a substantial portion of the remaining funds must be used
to help low-income working families who are not and have not been on
welfare to meet their child care needs as they are, indeed, struggling
to stabilize themselves in the workplace.
Equally important, the bill recognizes we cannot ask parents to leave
children home alone as a condition of receiving welfare. Therefore,
welfare families with a demonstrated need for child care may not be
sanctioned for failing to meet work requirements in States that do not
offer child care assistance.
We need to break a cycle of dependency on welfare, but we need to do
it by protecting children and having children have the stability of
knowing they are cared for, are wanted and loved in an environment that
will help them succeed. I believe we do that by strong child care
provisions which really help families begin to move off the welfare
rolls.
I think there are some very positive provisions. I urge colleagues'
support for this legislation and thank all those who played a major
role in drafting and working on this legislation.
I yield the floor.
Mr. EXON. Mr. President, I yield 5 minutes to the Senator from
Maryland.
The PRESIDING OFFICER. The Senator from Maryland is recognized for 5
minutes.
Mr. SARBANES. Mr. President, first, I commend the distinguished
Senator from Nebraska, the ranking member on the Budget Committee, for
his very fine leadership throughout this budget debate. We are deeply
appreciative to him for his extraordinary efforts.
Mr. President, the basic fact is that drastic cuts are being made in
Medicare, Medicaid, basic health programs, in nutrition programs to
nourish our young people, school lunch, school breakfast, food stamps,
in educational programs which make it possible for young people to go
to college, and in environmental programs to protect clean air and
clean water. These deep cuts are necessitated by the burning mania on
the part of the Republicans, as part of the budget package, to give tax
breaks to wealthy people. Make no mistake about it, that is the
connection. If the tax breaks were not in this package, these drastic
cuts would be ameliorated to a significant degree. Then you could argue
about reducing the deficit and how you go about doing it in terms of
spending cuts. But the problem is compounded in this package because
there is a burning mania on the other side to give tax breaks to
wealthy people.
Kevin Phillips, 2 days ago, in an interview on the radio said:

Under the camouflage of deficit reduction and cuts like
those in Medicare and Medicaid, the new budget includes
dozens of new and enlarged tax breaks, loopholes, and
corporate welfare programs. The tax cuts for ordinary
Americans are peanuts, but the special deals are big stuff.

And he goes on to say:

It is doubly impolitic to drive the budget deficit down to
zero by cutting medical, educational, and entitlement
programs while corporate and upper-bracket tax breaks
continue to soar.

That is what is happening here. We are hearing talk about, ``Oh, we
are going to protect the next generation and our children.'' What about
the children today, who are going to be sent into the next generation
stunted because the nutrition programs have been cut, the health
programs have been cut, the education programs have been cut? What
about young men and women who will not get the chance for a college
education because of the cutbacks contained in this package, at the
very same time that people at the upper-income brackets are getting
large and significant tax breaks?
There is obviously a hidden agenda contained in this budget package.
The Speaker of the House let it out of the bag a few days ago when,
speaking to a group, he said:

Now let me talk about Medicare. We don't get rid of it in
round 1, because we don't think that would be politically
smart.
We don't get rid of it in round 1, because we don't think
that would be politically smart.

So, it is going to come in round 2 and in round 3. They assert they
are protecting Medicare and right here is evidence that it is the
beginning of the end of Medicare. We have Republican leaders who boast
about the fact that they opposed Medicare when it was put into place,
and then they try to make us believe they are out to protect Medicare.
Medicare is being cut deeply, again to give these tax breaks.
The fact of the matter is--and this is my judgment--part of this
hidden agenda is a major shift of benefits, economic benefits in this
country, from ordinary people, from middle-income people to the very
wealthy. If you assert this the other side says, ``Oh, it is class
warfare.'' The class warfare is being waged by those who are reaping
the benefits disproportionately in this society.

[[Page S 17288]]

They say, ``Oh, don't do class warfare.'' In the meantime, the
statistics show--and listen to these statistics----
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. SARBANES. Will the ranking member yield me 2 additional minutes?
Mr. EXON. I yield my colleague 1 additional minute.
Mr. SARBANES. Listen to these statistics.
Federal Reserve figures from 1989, the most recently available, show
that the richest 1 percent of American households, with net worth of at
least $2.3 million each, have nearly 40 percent of the Nation's
wealth--1 percent of American households, 40 percent of the Nation's
wealth. The top 20 percent of American households worth $180,000 or
more, have 80 percent of the country's wealth--80 percent.
The income statistics are equally skewed. The lowest-earning 20
percent of Americans earn 5.7 percent of the after-tax income. The top
20 percent of American households have 55 percent of the after-tax
income.
The United States is now the most unequal industrialized country, in
terms of income and wealth, and we are growing more unequal faster than
the other industrialized countries. And this package is going to
intensify that trend.
Make no mistake about it, that is what this package will do. It is
shifting benefits from lower-income and working people to the upper end
of the scale.
People on Medicare, earning $15,000 a year, are going to suffer in
order to give a tax break to the very wealthy.
I urge the rejection of this package.
The PRESIDING OFFICER. The time of the Senator has expired.
The Senator from Michigan.
Mr. ABRAHAM. I yield myself such time as I need briefly, and then I
will yield to the Senator from Minnesota.
As I said several times here today, apparently in some parts of this
country people making less than $75,000 a year are ``the most wealthy
Americans.'' In my State that is not the case. Mr. President, 65
percent of the tax cuts contained in this package will go to people and
families making less than $75,000 a year. Mr. President, 80 percent
will go to people whose families make less than $100,000 a year. In
Michigan, those people are not wealthy people. Maybe they are in other
parts of America, but people making less than $75,000 are not wealthy
people in my State.
As to the so-called tax cuts for wealthy, I point out as I have
already numerous times in relationship to this bill, there are $26
billion in loophole closings contained in this legislation, closing
loopholes on these so-called wealthiest Americans, individuals and
corporations, which largely offsets whatever tax cuts might benefit
people in those categories.
Finally, with regard to students, we should point out to the students
watching that, as Senator Kassebaum indicated earlier, regarding the
student loan program insofar as it affects students, the volume of
loans remain unabated, at levels that have always been out there, and
there are no changes in the cost of loans to students. Moreover, there
are further provisions in the bill that will actually provide students
with student loans with the opportunity to deduct interest they pay on
those loans. In fact, it places people in a stronger position.
That said, Mr. President, at this time, I yield five minutes to the
Senator from Minnesota.
The PRESIDING OFFICER. The Senator from Minnesota is recognized.
Mr. GRAMS. Mr. President, I rise with great pride today in support of
the Balanced Budget Act of 1995.
I hear a lot of talk from the other side of the aisle about cuts. The
major cuts are going to be in Washington's ability to take more of the
taxpayers' money. The hidden agenda is a balanced budget and a brighter
future. And, if there has been a growing gap of wealth, it has occurred
under Democratic programs, and it is time to change that.
This bill, more than anything else, is about promises--making
promises, and keeping promises.
The American people have every reason to be cynical about political
promises.
Yet something resonated with the voters when we went to the people
last November and promised we would take this country in a better
direction if they elected a new majority to Congress.
We laid out a plan for the Nation's future unlike anything the people
had been promised over the last 40 years.
The legislation before us today is proof that there is a better way--
and the vision it reflects is based on two fundamental promises we made
to the voters: First, we promised we would balance the budget in 7
years. And second, we promised we would cut taxes for working-class
families.
Mr. President, the centerpiece of the legislation before us is our
promise to balance the budget by the year 2002.
If you want to know why 83 percent of the American public say
balancing the budget should be the top priority of this Congress, these
statistics speak volumes: Every year, the Federal Government is
spending billions and billions more than it takes in. As a result of
four decades of fiscal insanity, the national debt today stands at
nearly $5 trillion. Every child born today in the United States of
America comes into this world already saddled with more than $19,000 in
debt.
So the first, most important result of a balanced budget would be to
free our children and grandchildren from the economic burden they will
inherit from this generation--a burden they did not ask for, and
certainly do not deserve.
Ask an economist about the other benefits of a balanced budget, and
they will reel off an impressive list of reasons why we ought to move
forward.
By the time 7 years have passed and the budget is brought into
balance: GDP will grow by an additional $10.8 billion; interest rates
will drop, and Americans will boost their spending power through an
additional $32.1 billion in disposable income; the buyers of a $100,000
home would save more than $10,000 over the life of a 30-year mortgage;
an additional 104,000 family homes would be built and 600,000 more
automobiles would be sold; and businesses would be empowered to create
new and higher paying jobs--as many as an additional 6.1 million new
jobs, by some estimates.
Impressive statistics, but what does all this really mean on Main
Street?
Well, for an average American family with two kids, a mortgage
payment, car and student loans, a dog and a cat and lot of monthly
bills, a balanced Federal budget would put at least $1,800 a year back
into the family bank account.
That is a pretty good incentive for passing a balanced budget in
1995: save money and get a tax break, because we have also promised to
cut taxes for middle-class families--another promise we are keeping
with this legislation.
This Congress is no longer willing to let the Government gamble away
the taxpayers' hard-earned dollars as if they belonged to Washington.
In fact, we are going to keep those dollars out of the Government's
hands in the first place.
The centerpiece of our $245-billion tax relief package is the $500
per-child tax credit, and I am proud that my colleagues stood with my
good friend, Senator Abraham, and I to ensure that this desperately
needed provision remains at the heart of our balanced budget plan.
The tax credit alone will allow 28 million taxpaying households to
keep $23 billion of their own money each year.
In my home State of Minnesota, the tax credit would return $477
million annually to families who work hard, pay their bills, and
struggle every day to care for their children without relying on the
Government.
In addition, 3.5 million households nationwide will find that the
$500 per-child tax credit has completely eliminated their tax
liability.
With our Balanced Budget Act, this Congress has kept the solemn
promises we made to the American people. Yet without even waiting for
the bill to arrive at his desk, President Clinton is promising to veto
it and stop the balanced budget in its tracks.
The President says he wants a balanced budget--wants it
wholeheartedly, he claims. Balancing the budget was one of the central
themes of his 1992 campaign, and I remember when he said: ``I'll tell
you why you should vote for me. I know how to balance a budget. I've
balanced 11 budgets as Governor of Arkansas. One of the

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first things I'll do when I get to Washington is send Congress a
balanced budget.''
Of course, that turned out to be a pie-crust promise--easily made,
easily broken.
Since taking office nearly 3 years ago, Bill Clinton has never
presented Congress with a budget that balances--or comes anywhere
close, for that matter.
In the last two plans he has dropped on the Capitol doorstep, the
deficit hovers around $200 billion every year, far, far into the
future.
And we voted on both of those plans here on the floor of the U.S.
Senate. Both failed 99 to zero, and these are the plans that the
President brags about.
Mr. President, Congress is going to balance the budget because we
promised the American people we would.
We are going to cut taxes because we promised the American people we
would.
We are going to turn this Government around and start putting it to
work on behalf of the taxpayers because we promised the American people
we would.
``The Man from Hope'' is quickly earning the reputation around here
as ``the Man from Hope Not.'' He says he wants a balanced budget, but
he secretly hopes he'll never have to sign one.
Mr. President, Bill Clinton cannot continue to say in public that he
supports a balanced budget, tax cuts, and welfare reform, and then
return to the private confines of the Oval Office to veto every piece
of legislation that would bring the budget into balance, cut taxes, and
reform welfare.
My colleagues and I have great dreams for this Nation and its
children, Mr. President, and the American people are counting on us to
heed the words of the great Winston Churchill and ``never, never, never
give up.''
With a balanced budget at stake and the future of this Nation at
stake along with it, this Congress has no intention of giving up and
turning our backs on this moment in history.
That is a promise.
Thank you, Mr. President. I yield the floor.
Mr. EXON. Mr. President, I yield 5 minutes to the Senator from
Washington.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Thank you, Mr. President.

ten thanksgiving stories

Mrs. MURRAY. Mr. President, next Thursday, families from Forks, WA to
Fort Lauderdale, FL will be coming together to enjoy each other's
company and to celebrate a holiday unique to the history and heritage
of our country.
The tables will be heaped with food, prepared in many kitchens and
brought together at the house of one family. For some families in our
country, who do not necessarily have all that much to be thankful for,
this may be the best meal of the year.
If your family is at all like mine, there will be turkey and gravy
and some kind of Jello salad. At dinner, there will be a card table for
the little kids, and a couple of bigger kids who will not want to sit
with them.
After dinner, there will be games of Pinochle. There will be
teenagers standing around, wishing something exciting would happen.
There will be people in the living room, just starting to get sleepy.
The television will be on, and the Detroit Lions will be losing again.
And best of all, throughout the day, there will be many stories.
The people in my life tell stories about many things. Stories about
family members who could not come this year or family members who have
died. Stories about war. Stories about work or friends or sports.
Stories about a new birth, or an impending marriage. In most years,
there is not much talk about government--unless something really bad is
about to happen.
I have a feeling I am going to hear a lot of talk about government
this year. Right now, I can almost hear 10 stories that might be told
around the tables at Thanksgiving this year, across this great land.
Ten things people wish they did not have to talk about, but they will:
First, there will be the story about Medicare. The elders always tell
stories best, remember the bad times clearest, and complain about the
Government loudest. Next Thursday, after grace has been said, an old
man is going to pause, with the mashed potato spoon still in his hand,
and say ``You hear what they're going to do to Medicare?''
This story, like the rest, is a sad one. The man knows that the
budget needs to be balanced for the generations he can see around the
table. He has heard that there has been fraud and abuse in Medicare
billing. He knows that he is going to have to sacrifice for the
betterment of the country. He just is not going to understand why
Congress is going to take more money out of his Social Security check
to give a tax break to people who do not need it.
Second, there will be the story about Medicaid. The family is
together, but they have to arrange to visit grandma at the nursing
home. The family will go visit, but they will now have to worry about
whether Congress is going to allow States to gut nursing home standards
that protect grandma's health, safety, and financial security.
They will have to worry about whether grandma will be the lucky one
to get Medicaid funding when their State has to choose between paying
for pregnant women, children, the elderly, or the disabled, because
Congress gave them less money to meet the growing needs they face.
Third, there will be the story of the adult children in the family,
who never before had to worry about being held responsible for the
costs of grandma's nursing home care, but now will. They have worked
hard to raise their own family, save money for their kid's education,
and for their own retirement. Now they will have to deal with extra
costs from every angle.
If they are working but low income, they will not get the $500 per
child tax credit that the Congress is touting, because they will not
pay enough taxes to get the deduction. If they do not have children
yet, they will face the fact that Congress will be taking away the
earned income tax credit they have counted on.
If they do have kids, and do get the tax credit, they are going to
need the money. Because when grandma cannot stay in the nursing home
because Congress cut Medicaid, the family is going to have to build a
new room onto the house.
Fourth, there will be the college-age students and their story. They
want to prepare themselves for a world where they know they will have
to be qualified to compete. They are willing to swallow their pride and
ask their parents for help; they are willing to work; and they are
willing to pay off loans after college. But none of that will matter.
The Congress is going to take $5 billion out of their student loan
programs, and give it to the banks. Congress is going to decimate the
Direct Lending Program, which gives students their money more
efficiently, and eliminates bureaucracy and the middle man. In addition
the budget eliminates Perkins loan funding and drops 280,000 students
from Pell grants.
Fifth, there will be the story of the younger students, who need to
have a relevant public education to get them ready to go on to college,
into some other form of training, or directly into work. For these
students, the Congress is going to cut almost $4 billion from
discretionary but vital education programs, including title I basic
skills instruction for 500,000 additional students, State student
incentive grants, school reform, Head Start, and AmeriCorps.
Sixth, there will be one of the most tragic stories of all--the story
of what will happen to all the children in the great country of ours.
Services to help children, from Medicaid to pay their medical bills, to
school lunch and day-care nutrition programs, to childhood
immunizations are all going under the ax in what the majority party is
painting as some kind of epic and heroic moment in American history.
These cuts will certainly be historic. This is probably the first
time in history that the American Government declared war on its own
children, when it knew better. If the Congress wants to balance the
budget, American families are all for it. But Americans are pretty
steadfast when their own family is threatened, and this is a battle
that the majority party in Congress should lose.
Seventh, there will be the story of the welfare mom. This member of
the

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family may not be sitting at your table this year, but she comes to
many homes for Thanksgiving, and her sisters may one day come to your
table or mine. Her story is one of tragedy piled on top of tragedy.
Maybe she came from an abusive marriage, where she took beating after
beating, and only got out after her abuser started hitting her kids.
She probably did not have the benefit of education and training. She
most likely had all kinds of things stacked against her. Invest in her
life now, with child care and training, and she'll be a tax-paying
citizen for years to come.
But this Congress is going to cut child care, nutrition services, and
kick this woman off public assistance as fast as possible, without the
support that would allow her to join the work force. She does not have
much to be thankful for with the passage of this budget.
Eighth, there will be a story about the environment. A 12-year-old
may ask why the Government wants to sell her heritage to big companies.
She wonders about the polar bears and caribou that now live in the
Arctic National Wildlife Refuge.
She asks whether the Native people she has read about, or whether her
family, if she happens to be a member of Gwich'n tribe, will be able to
continue to live where they have lived for 20,000 years--on the lands
they love, subsisting on a now-abundant supply of wildlife. She sighs
and asks her elders not to sell America's lands, our national forests,
our national refugees, our national treasures--her heritage.
Ninth, there will be the story of the family farm. The wheat farmer
from eastern Washington, who has seen congressional Republicans adopt a
Freedom to Farm Proposal that couldn't even be approved by the House or
the Senate. The wheat farmer, who has seen the safety net for farmers
eliminated, the safety net that has existed for almost 60 years.
Farmers do not need this safety net when prices are good, but when
prices are bad, these farmers, who supply the staple foods of our
society, need our support. They deserve our support. The family farmer,
who works to grow the food that provides the bounty for Thanksgiving
dinners for families across our Nation--this farmer is forgotten in the
Republican budget.
Tenth, the last story, will be a story of real thanks. After all
these other stories, after the eyes roll skyward, after the anger,
after the frustration, they will all join hands and give thanks. The
members of this family will thank their God that they are all together
for the holiday. They will be thankful for the good food and warmth of
family, but mostly, they will be very thankful that the Members of
Congress are also home with their families, and not doing more damage
from the floors of the House and Senate.
Mr. President, I continue to worry about the priorities in this
budget. We all know this budget will be vetoed; for that I am thankful.
When it is returned, I intend to work very hard with my colleagues to
ensure we will then pass a budget that is good for our children, our
families, and our future.
Mr. ABRAHAM. Mr. President, I yield 5 minutes to the Senator from
Tennessee.
The PRESIDING OFFICER. The Senator from Tennessee is recognized for 5
minutes.
Mr. FRIST. Mr. President, I rise in support of the Balanced Budget
Act of 1995.
The American people have been watching the debate over the continuing
resolution this week, and based on the calls that have come into my
office, they recognize that this debate is about one thing: whether or
not we will have a balanced budget.
After President Clinton was elected, he used his promise to balance
the budget as an excuse to raise taxes. Today, all Americans have
higher taxes, but they still do not have a balance budget.
Contrary to what he says, the President has never proposed a balanced
budget of his own. His latest plan, which he says will balance the
budget in 9 or 10 years, would actually result in deficits of more than
$200 billion as far as the eye can see--including a deficit of $209
billion in 2005, the year President Clinton claims he would eliminate
the deficit.
The President's budget is so phony that no Democrat in Congress would
even introduce it for a vote in the House or Senate. When a Republican
Senator introduced it, it was defeated 96-0.
While Clinton talks about a balanced budget, Republicans have done
the heavy lifting, and made the hard decisions necessary to get it
done. Our plan is certified by the nonpartisan Congressional Budget
Office, which President Clinton himself has said is the sole authority
on budget authenticity.
With the continuing resolution passed yesterday and the plan before
the Senate today, Republicans continue to show their unwavering
commitment to a balanced budget. The President as a candidate promised
to balance the budget in 5 years. All we are asking for is 7 years.
Republicans honestly believed, and some of us are holding out hope,
that President Clinton will show some leadership and help us balance
the budget.
He has promised to balance the budget in 5 years, then 10 years, then
9 years, then 8 years, and as recently as October 19, the President
said that he thought we could reach a balanced budget in 7 years. But
he rejected yesterday's continuing resolution, and he will likely veto
this bill. The President is not committed to balancing the budget. He
is committed to increasing spending and an ever growing Federal
Government.
The plan before us today fulfills our promises to the American
people. It will:
Balance the budget in 7 years,
End welfare as we know it,
Save and strengthen Medicare, and,
Reduce taxes in a way that provides relief to families with children,
stimulates growth, and generates jobs.
The bottom line is this: the future of our Nation depends upon
whether we have the courage to balance the budget.
Our current path--if we do nothing--leads to:
Uncontrolled federal spending and borrowing, and skyrocketing annual
deficits--$200 to $300 billion by the year 2000, and higher deficits
thereafter.
In fact the deficit increases $335,000 every minute--which means that
it has increased roughly $1 million in just the amount of time that I
have been speaking on the Senate floor.
Another $1.2 trillion added to our national debt between now and the
year 2000--which will bring the total surging past $6.7 trillion by the
turn of the century;
A Medicare program that goes broke; a Medicaid program that doubles
in size;
An enormous and unsustainable tax burden on young workers who will be
forced to pay 82-percent of their wages in taxes to support prolific
federal spending; and
The first generation of Americans in our Nation's history to have
fewer opportunities than their parents.
And yet, if we do balance the budget, if we are able to impose fiscal
discipline on the massive federal bureaucracy, the benefits are very
real, and the possibilities are endless for our prosperity as a Nation.
According to the Joint Economic Committee, a family with a $75,000
car loan and an $11,000 student loan could save $1,771 a year if
interest rates drop another percentage point under the Republican plan,
and $2,828 a year if interest rates return to the levels of the 1950s.
According to the economic forecasting firm of DRI McGraw-Hill, if we
balance the budget by the year 2002, the gross domestic product will be
$170 billion higher than without a balanced budget. That represents a
2.5 percent increase in productivity for businesses, and about $1,000
per household higher standard of living for families.
And even Wall Street is responding positively to the current
situation, closing at a record 4969, while the 30 year Treasury bill
rate fell to 6.23%. If Congress fails to pass a balanced budget plan,
then the American people should be scared, because the markets will
lose faith in the U.S. government.
All this is possible by only slowing the growth of federal spending.
Under the Republican plan, spending on Medicare, Medicaid, welfare,
food stamps, the Earned Income Tax Credit, student loans, you name it,
will continue to grow, only at a slower rate.
As James Glassman said in a recent editorial in the Washington Post:

If Congress' budget becomes law, the social compact will
actually be strengthened. Not

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only will the government keep its commitments to the elderly and the
poor on health care, it will also meet an even more important
obligation to the public that is abrogated 30 years ago--to
spend no more than it takes in.

The Republican plan is a credible, reasonable and truly historic plan
to reverse the excessive spending of the past, while continuing to
provide a sturdy safety net for the poorest Americans. The plan will
save and strengthen Medicare, transform the Medicaid and Welfare
programs and produce unprecedented economic growth for generations to
come. I strongly support the Balanced Budget Act of 1995 and urge its
passage.
I yield the floor.
Mr. ROBB addressed the Chair.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. ROBB. On behalf of the Democratic manager, I yield myself 4
minutes.
The PRESIDING OFFICER. The Senator is recognized for 4 minutes.
Mr. ROBB. Mr. President, I rise to oppose the budget reconciliation
bill before the Senate. I do not oppose the Republican budget because
it is projected to balance the unified budget by 2002, because I
believe we can and should balance the budget over that time period. I
oppose this budget because I believe it is the wrong way to reconcile
spending and revenues.
Instead of a bipartisan consensus, it reflects a too narrow,
ideological agenda that does not represent the best long-term interests
of the country. And I know that the leadership on both sides of the
aisle, at least in this body, can and would like to do better.
I have no doubt that my good friend and colleague, Senator Domenici,
if not constrained by some Members of his own party, mostly in the
other body, would develop a more responsible, more bipartisan budget.
As a Democrat who supported both the original Senate budget resolution
last May and the continuing resolution last night that committed us to
a balanced budget by 2002, using CBO numbers, which we may revisit
shortly, I have always been ready to work with Presidents of both
parties and in Congresses having both Democratic and Republican
majorities on a bipartisan basis to solve the long-term fiscal
challenges facing our Nation.
Unfortunately, this year's budget process has evidenced more partisan
politics and political expediency than fiscal responsibility. As my
colleagues will recall, the original Senate budget resolution required
us to enact legislation projected to actually balance the budget before
we could proceed to consideration of a tax cut.
When the resolution came back from the conference with the House,
however, tax cuts had been added up front, and the deep spending
reductions had been moved into the next century. The message that this
budget reconciliation bill sends by maintaining this approach is that
we should begin handing out new benefits today and count on future
Congresses and future Presidents to make the most difficult choices to
actually reach a balanced budget. It only increases the likelihood that
the budget will become even more unbalanced, hardly a legacy we want to
leave to our children and our grandchildren. That will not do anything
to reassure the international financial markets, much less address the
increasing cynicism our citizens feel toward our Government and its
elected officials.

In order to pay for a huge tax break, half of which would go to those
making $100,000 a year, programs affecting health care for the elderly,
the disabled and the poor, programs affecting the environment and
education, programs affecting some of our most vulnerable citizens who
will be cut more drastically than would otherwise be necessary is not
fair.
My message to my colleagues and the President today is that there is
a better way to balance the budget, a way which I believe can be
supported by Members on both sides of the aisle, as well as the
President and the American people. That way is to postpone a large tax
cut until we achieve balance and spread the burden of deficit reduction
more fairly and evenly across the Federal budget. Only if we
demonstrate to the American people that a plan is fair and equitable
will we be able to maintain the road to balance.
As the Virginia voters showed just 10 days ago, those who toil at the
ideological extremes proceed at their own peril. It is true that the
vast majority of the American people want to balance the Federal
budget, as I do. But the events of the last few months reflect the fact
that they want to do it in a way that reflects a broad consensus. Mr.
President, I stand ready to work with both Republicans and Democrats to
find that consensus.
Mr. President, I yield the floor.
Mr. ABRAHAM addressed the Chair.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. ABRAHAM. I yield 4 minutes to the Senator from Oklahoma.
The PRESIDING OFFICER. The Senator from Oklahoma is recognized for 4
minutes.
Mr. INHOFE. I thank the Senator for yielding.
I probably will not take that much time. But, Mr. President, I have
been sitting here and listening and watching. And it has been really
enlightening to me to see what is going on and how the debate has been
going.
When I go back to Oklahoma and we have townhall meetings and I talk
to people back there, the ones I have been chastised about for
referring to as the ``real people of America,'' they ask the question
over and over again, ``Senator, why don't you just do it? All this talk
about balancing the budget. Why don't you just do it? We have to do it.
We have to live with a balanced budget. Why not do it?'' Because every
big spender around, every liberal in Congress says he or she wants to
balance the budget, and yet when it comes down to getting the
opportunity to actually do it, we do not do it.
I hope those people who ask that question at the townhall meetings
are watching carefully tonight, because now you know why it is so
difficult to do something that seems so easy back home.
The second thing is listening to some of these speeches--I do not
mean this in a demeaning way or insulting way to anyone, but I really
feel that so many people right now are trying to hold onto the past
with white knuckles. Those individuals who rejoiced back in the 1960's
when Government took greater control of our lives cannot believe that
times are changing and that the people are no longer going to tolerate
that.
If you stop and analyze the elections of 1994, it is an overwhelming
revolution at the polls.
And who was defeated? All you have to do is get the ratings. You
know, people know who the big spenders are and who they are not. The
National Taxpayers Union, many others, have ratings. Those individuals
who lost at the polls in 1994 were the ones who were the big spenders.
This revolution started, really, back in 1980 with the election of
Ronald Reagan. Of course, he did not have the support of Congress, so
he could not get the things done he wanted to. I will always remember
looking at television on the Wednesday morning after the election, that
landslide election when Ronald Reagan won in 1980, and it was the
defeated person who had run against him. He was on the ``Today Show,''
and he made a statement I will always remember. He said, this is a
quote, ``I cannot believe the people of America have so overwhelmingly
repudiated classic liberalism.''
And that is exactly what happened. But the problem is we never were
able to carry out those programs, because we had a hostile and a
liberal Congress.
That is changed now. That is all changed. For all those of you are
who sitting around here wringing your hands saying all these bad things
are going to happen, all these people are going to be cut when, in
fact, they are not going to be cut, all these horrible things we have
been listening to tonight, just stop and think of it in this context:
In 1993, we passed--at that time, President Clinton had control of
both the House and the Senate--and we passed the largest single tax
increase in the history of public finance in America or anyplace in the
world. Those are not the words of conservative Republican Jim Inhofe;
those are the words of the Democrat leader of the Senate Finance
Committee, the chairman at that time.
So I suggest that if anyone was opposed to that great tax increase
that

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even now President Bill Clinton says was too great of a tax increase,
if you are opposed to it, then you should be for these tax reductions
now. For all practical purposes, all we are doing is repealing part of
the damage we did to the American people in 1993.
So I wind up--my colleague, who I respect so much, from Minnesota,
Senator Grams, made a talk and he ended up quoting Winston Churchill,
and I think I will do the same. I can tell you folks on the other side
of the aisle that the people of America know better. They do not want
the patterns of the past. They realize we have to do something. Winston
Churchill said: ``Truth is incontrovertible, panic may resent it,
ignorance may deride it, malice may destroy it, but there it is.'' And
that is what we are going to learn tonight. I yield the floor.

the need for privacy protection

Mr. LEAHY. In the few hours I have had to review the Republicans'
conference report on budget reconciliation, I have come upon another
major change in law that is being enacted without study, review or open
debate that can adversely affect the health care privacy of all of us.
For the past several years I have been working on legislation to
improve piracy protection for health care information. This session
Senator Bennett and I have joined with a number of our colleagues from
both sides of the aisle to sponsor the Medical Record Confidentiality
Act, S. 1360. Just this week Senator Kassebaum chaired a hearing on the
bill before the Labor and Human Resources Committee. That hearing
brought home the fears that many have of the computerization of our
medical files. That development is already underway and is part of our
motivation for seeking to enact strong and effective privacy
protection.
Upon seeing the conference report, I find that the Republican-
dominated conference has added to the bill provisions that require the
Secretary of Health and Human Services to adopt standards and data
elements to make information related to health care ``available to be
exchanged electronically.'' This new section requiring the development
and use of data networks is buried in section 8001 of title VIII of the
budget reconciliation bill and proposes a new section 1858 to the
Social Security Act.
I object to the inclusion of these provisions at this time in this
manner in this bill on which debate is so drastically restricted and to
which amendments are not in order. I do so because the provisions fail
to provide strong and effective privacy protections.
Our colleagues from Missouri and Connecticut have introduced the
Health Information Modernization and Security Act, S. 897, that seeks
to legislate in this area of standardization of electronic data
elements. When Senator Lieberman introduced that bill he acknowledge
the need to establish standards not just for accomplishing electronic
transactions, but also for the security and privacy of the medical
information. Similarly Senator Bond, the other original sponsor, noted
in his introductory remarks that ``most importantly, legislation is
needed to protect the privacy and confidentiality of patient data.''
Their pending Senate bill references the need for privacy standards for
health information to be established by regulation, and lists four
principles to govern such standards.
The conference report includes no privacy protection. Privacy is
never mentioned in the entire new proposed section. Business interests
are protected. Trade secrets are expressly protected. The security,
integrity, and confidentiality of the data is protected. But personal
privacy is not. Indeed, although the section contains a definition for
purposes of the section of ``individually identifiable MedicarePlus and
medicare enrollment information,'' it is never employed in the section.
What is needed before we proceed to computerize personal health care
information is the enactment of strong and effective privacy
protections. That is what the Medical Records Confidentiality Act, S.
1360, is intended to provide--strong and effective protections with
strong criminal, civil, and administrative sanctions against those who
violate our medical privacy.
The privacy interests of the American people are being disserved.
Those participating in Medicare are entitled to have their privacy
protected, as are we all. I urge my colleagues from both parties and
both Houses to join with me and reject this effort to proceed without
the necessary protections for individual privacy. This is the wrong way
to proceed.
Mr. GRASSLEY. Mr. President, I rise in support of the Balanced Budget
Act of 1995. Just as many thought they would never see the Berlin Wall
fall, this is a day that I never thought I would see--the U.S. Congress
passing a balanced budget that uses realistic economic assumptions, not
rosy scenarios.
Over a year ago, Republicans campaigned to balance the budget and cut
taxes. The American people have become justifiably cynical about
politicians making promises to get elected. Well, this budget can be
summed up in one phrase: promise made, promise kept.
The Balanced Budget Act keeps our commitment to the American people;
we do balance the budget. And only after the nonpartisan Congressional
Budget Office certified that the Republican plan achieves a balanced
budget did we turn to providing working families tax relief.
And let's be clear, in 1996, 88 percent of the tax cuts will go to
families earning under $100,000, 72 percent to families earning under
$75,000.
These tax cuts are targeted to help families with a $500 per child
tax credit, a tax credit to help families meet the costs of adoption
and relief from the marriage penalty.
These tax cuts will also help family farms and small businesses by
reducing the estate tax and lowering capital gains.
Republicans promised tax relief for working families and we have
delivered.
Mr. President, while Republicans have kept their promises to the
voters, President Clinton seems to want to forget the promises he made.
His alternative is to ``just say no.'' He stated that he would balance
the budget in 5 years, then he said 7 years, then 10 years. He has done
more flips and flops than a flapjack.
Now President Clinton is going to veto the continuing resolution that
simply states that the Congress and the President should agree to reach
a balanced budget in 7 years based on realistic economic assumptions.
It doesn't say how that should be reached, just that a balanced budget
should be the goal.
I should note that several Democrats in both the House and the Senate
voted for this commonsense continuing resolution calling for a balanced
budget in 7 years. They are sincere in wanting a balanced budget. My
hope is that more conscientious Democrats will join this bipartisan
effort for a balanced budget.
However, my concern is that still too many of my colleagues are like
the old man who says: ``How do I know what I think, until I've heard
what I've said.'' Likewise, many in Congress don't know how to vote
until they hear from the White House. I encourage my colleagues to
put the people of this country first, before the shortsighted partisan
politics practiced by the White House.

Mr. President, the American people are beginning to realize the White
House is engaging in gamesmanship instead of statesmanship. The great
Republican President, Abraham Lincoln was certainly right, ``You can't
fool all the people all the time.'' This administration is going to
learn this lesson the hard way.
My mail is now running four-to-one in favor of Republicans standing
firm to their commitments for a balanced budget and tax relief for
working families. The phone calls are overwhelmingly in favor of the
Republicans effort to preserve Medicare and reform the current
disastrous Great Society Welfare programs--both part of this Balanced
Budget Act of 1995.
In talking to my colleagues they are finding the same reaction. The
American people are listening and considering what is being done here
in Washington. And they are supporting Republican efforts to keep the
promises made to the voters last fall.
And why is public opinion shifting? The sad truth is becoming clear
to Americans--President Clinton has no interest in balancing the
budget. President Clinton's top interest is appeasing the special
interests that still control the Democratic Party.
And what do these special interests want? They want to spend more,
more,

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and more of the taxpayers' money. The special interests don't want a
balanced budget and tax cuts for working families, that would mean less
money for them to spend.
It seems the White House is completely captive to the special
interests. They still believe that big government should dictate how to
spend the taxpayers' money instead of families making the decisions. I
thought President Clinton said he got the message from the November
elections. Unfortunately, it appears he was listening to the special
interests instead of the public interest.
Mr. President, this is a momentous vote. This is a vote for a real
future for our children and grandchildren. For a stronger more
productive economy. It is a vote to preserve Medicare and reform
welfare.
I urge all my colleagues to stop listening to pollsters and the
special interests who are running the White House and instead of
listening to the American people who want us to keep our promises, to
not break faith, and to pass the Balanced Budget Act of 1995.
Mr. President, I now want to briefly highlight a few specific
provisions that I am particularly pleased are incorporated in the 1995
Balanced Budget Act.
First, is the new student loan interest deduction. I have long fought
for the appropriate national investment in education. Once again the
United States is investing in the minds of its people in addition to
the fixed assets of its businesses.
Mr. President, we also promised more choices in health care for
Medicare beneficiaries. The Medicare reforms contained in this bill are
going to make that possible. It is also going to be good for my State
of Iowa.
Medicare is now going to reimburse for health care services much more
fairly in Iowa than has been the case in the past. We have greatly
increased the Medicare per capita payments that will be made in Iowa in
the coming years.
This action is going to give our Medicare beneficiaries in Iowa more
health care choices than is presently the case. We have also narrowed
the variation in Medicare's reimbursement from one area of the country
to another, so that there will be greater equity in the use of our
hard-earned tax and premium dollars.
I also want to point out that we have secured a number of very
important health provisions which are going to help preserve the rural
health infrastructure in Iowa:
The bill includes legislation I introduced earlier this year to
restart the Medicare Dependent Hospital Program. This is going to
provide greater financial support for at least 29 small rural hospitals
around Iowa.
In addition, this bill includes my legislation to reform the Medicare
reimbursement for physician assistants and nurse practitioners which
will also help improve access to primary care services in rural Iowa.
These are just a few examples of the many good provisions in the
Balanced Budget Act of 1995, and underscore the importance of passing
this historic legislation.

regarding environmental issues

Mr. WELLSTONE. Mr. President, the reconciliation bill now before us
contains a number of provisions that are poor policy, that are unfair
to those least able to defend themselves and that consider only short-
term gain and not long-term loss. This is very clear from reading the
Energy and Natural Resources provisions. As a member of that committee
I can tell you that this reconciliation bill contains many provisions
that are just plain poor energy policy, poor environmental policy, and
cynical politicking.
Opening the Arctic Refuge to drillings is one such provision. The
Arctic Refuge is one of the last pristine wilderness areas left in
America. It contains the Nation's most significant polar bear denning
habitat on land, and supports 300,000 snow geese, migratory birds from
six continents--some of those birds even make it to my State of
Minnesota--and a concentrated porcupine caribou calving ground.
Despite our uncertainty about the effects oil drilling would have on
the animals, there are those who continue to push for oil drilling
without an updated environmental impact statement [EIS] as required by
current law. An EIS has not been done since 1987 and even that one was
not sufficient back then. We just don't know what drilling would to the
Arctic Refuge, and barreling ahead with drilling is just poor
environmental policy.
Further, the Gwich'in people have relied on those porcupine caribou
for thousands of years to provide their food and meet their spiritual
needs. I have heard them speak very eloquently and directly about what
oil drilling in the Arctic Refuge would do to their way of life. People
like the Gwich'in want to save the environment. But they are not the
big oil companies. They do not have the money. They do not have the
lobbyists, and they do not have the lawyers here every day. In today's
Washington environment, that seems to mean that their concerns are less
important than the concerns of big industry.
Even if whatever amount of revenue gained were somehow worth
destroying this unique land and the lives of the Gwich'in, there are a
number of questions regarding whether the Arctic Refuge has oil, how
much it has and what the cost would be to retrieve it. Estimates are
broad and disagreements are rampant. Even I, a nonscientist, know one
thing for certain: there is no way to tell how much revenue can be
gained from drilling in the Arctic Refuge. New information, however,
suggests previous figures overestimated possible revenue.
A second example of poor policy and a huge giveaway to oil and gas
companies is the royalty holiday for oil and gas drilling in the Outer
Continental Shelf. Oil and gas companies lease drilling rights in the
Gulf of Mexico from the Federal Government. Companies pay for the
leases and must also pay royalties on their production because the oil
and gas is a public resource. The reconciliation bill contains a
provision that would give companies a holiday from paying those
royalties. Because the leases will be considered more valuable by
companies if they don't have to pay royalties on the production, the
CBO says that the Government will be able to sell the leases at a
higher price and thus the royalty holiday will make money.

That is all smoke and mirrors. Friends of the oil and gas industry in
Congress have taken advantage of the fact that the budget process looks
only at whether provisions make money in the first 7 years. The royalty
holiday is expected to save the Federal Government $130 million in the
first 7 years. This short-term savings allows us to say that we have
taken a step toward balancing the budget.
But when the short-term election year politicking ends, the other
shoe will drop and it will drop hard. In the long-term, the
Congressional Budget Office estimates that this royalty holiday will
cost $550 million in lost receipts over 25 years. Thus, while the
royalty holiday means short-term gain, it also means long-term pain.
The royalty holiday is a clear example of corporate welfare at the
expense of the Federal budget. In these times of belt-tightening and
difficult choices about priorities, we can and must do better.
Some have said that the royalty holiday is needed to help persuade an
ailing industry to take part in a risky venture. However, an article in
the October 24, 1995, Wall Street Journal reports that oil companies,
``* * * registered robust third-quarter earnings,'' and ``* * *
reported a surprising gush of profits.'' Further, an October 30
Business Week article states that new technologies, ``* * * cut the
cost of deep-sea production.''
I cannot stand by and watch the destruction of safety nets that
protect our elderly, our children, and our most needy while at the same
time providing a huge giveaway for an industry that just doesn't need
it. The provisions I have mentioned are but two examples of the
incredibly irresponsible environmental policy in this reconciliation
bill.
Our natural resources are among the most important things we can
leave to these future generations. Our children and our grandchildren
deserve more than what this bad energy policy, bad environmental
policy, and shortsighted politicking would leave them. I will continue
to speak for all Minnesotans, for their sense of fairness and equity
and for their love and concern for the environment. I urge my
colleagues to join me.

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Mr. McCAIN. Mr. President, I want to commend the hard work of all my
colleagues in producing this legislation. Although there are parts that
do concern me, in general I strongly support this bill and the goal of
balancing the budget in 7 years.
As one of the Senate Commerce Committee members who drafted title IV
of the Senate bill and served as a conferee for this section of this
legislation, I want to clarify for the Record what I believe is
intended by this bill regarding spectrum auctions.
Under the bill, the Federal Communications Commission [FCC] is
mandated to identify and make available for public auction 100 Mhz of
spectrum. I believe that auctioning this and other spectrum is the
fairest, most equitable manner in which to allocate spectrum. I would
hope that the Commission would understand this fact and become spectrum
auction proponents. The auctioning of spectrum in an orderly manner--
done so that the public interest is served both by maximizing revenue
to the Treasury and ensuring that services that use the spectrum
continue in a manner that benefits the public--should be a goal of all
FCC proceedings regarding the spectrum.
The bill before the Senate contains several criteria that the FCC
should use in selecting which blocks of spectrum to auction. I want to
emphasize for the Record that the inclusion of any particular criteria
for the FCC to consider should not be viewed as limiting the
Commission's authority to make a determination under its overall public
interest standard of what existing spectrum uses may need to be
continued, or from considering in making its decision the impact on any
existing users of having to move to other frequencies or from
requiring, as a condition of any move, that the costs of relocation be
paid by new users.
Most importantly, I urge the Commission to examine all the spectrum
referenced in this act and make determinations as to its allocation
that are fair, equitable, and that do not unduly hurt or burden any one
group or industry.
Mr. President, I hope this clarification helps guide the FCC as it
moves toward auctions as mandated by this bill.

Tax Cuts in Reconciliation Conference Report

Mr. FEINGOLD. Mr. President, I rise to express my opposition to the
conference agreement on the reconciliation package, and to take
particular exception to the tax cuts in that package.
Mr. President, there is a great deal to dislike in the agreement,
especially with respect to Medicare and Medicaid.
The majority of the debate surrounding the reconciliation has
concerned these two programs, and the cuts to those programs certainly
merit the attention they have received.
Much has been said already about the Medicare and Medicaid cuts: cuts
that put the most vulnerable in our society at risk; cuts that are
unnecessary to balance the Federal budget deficit.
But there is little doubt that these cuts were made as a direct
result of the need to fund the $245 billion tax cut.
Mr. President, the advocates of the reconciliation measure call the
tax cut the crown jewel of the Contract With America.
Indeed, it is the $245 billion tax cut that drives the entire
reconciliation package.
The assurances of health care coverage for the low-income, frail
elderly, disabled, pregnant women, and children--both now and in the
future--has been mortgaged to pay for tax cuts.
Mr. President, though I am persuaded that the nearly half a trillion
dollars in cuts to Medicare and Medicaid have been made in order to
fund the tax cut, some of our colleagues may take issue with that
characterization.
They maintain that there are other reasons to take nearly half a
trillion dollars out of our health care system.
And, some who make that argument may even believe it.
But, Mr. President, for those who do believe that argument, there is
still no defense for the fiscally irresponsible tax cuts that are
included in the reconciliation agreement.
Indeed, if one believes that these massive cuts are necessary in
order to achieve a balanced budget, then there is no justification for
supporting the $245 billion tax cut that risks achieving that balance.
Mr. President, I have argued on a number of occasions that the budget
plan outlined in the reconciliation measure is unsustainable.
In part, this comes from the refusal to deal honestly with the
American people, arguing, for example, that the $270 billion in cuts to
Medicare are necessary to keep the Medicare trust fund solvent.
Of course, that is nonsense.
But the architects of this tax cut felt it necessary to spin this
story in order to produce the cuts needed to fund the tax cut.
Regrettably, the failure to be straight with the American people does
more than undercut this extreme proposal.
This deception will make it much more difficult for those of us who
are willing to support some reasonable reforms to make our case to the
Nation that we need to make changes to Medicare not only to keep the
program solvent, but also as a matter of deficit reduction.
Mr. President, beyond the issue of deceiving the public, this budget
plan is also unsustainable because its priorities are unbalanced.
A budget plan that increases Defense spending, allows special
interest loopholes to continue to grow unchecked, cuts taxes by $245
billion, and does all of that while gutting our health care protections
is a budget plan that does not reflect anything close to the mainstream
view of the Nation.
The priorities reflected in this budget are extremist, and the Nation
simply will not support their ongoing implementation over the next
several years.
This plan will not survive its full 7-year lifetime.
And I suspect, Mr. President, that it is not intended to survive
those 7 years.
The biggest cuts come in the latter years, sufficiently far off to
allow panicked State governments to lobby for the overturn of the
brutal cuts that are scheduled to descend in 2002--25 percent of the
total cuts in the Senate passed bill occur in that year alone, 46
percent in the last 2 years.
Mr. President, some who support this measure may believe in the brave
new world it conceives.
But there are others who support this measure who do not hold that
view.
They understand that this budget is unsustainable over the full 7
years.
They may even hope that someone or something will rescue us from that
last years of this budget.
But if their goal is not the dawning of a new order, what is their
purpose in supporting this measure?
Mr. President, their goal is not a balanced budget.
Their goal is a fiscally irresponsible tax cut.
How else can this bill be explained?
How else can one explain a $245 billion tax cut in a bill that
provides for annual deficits that add $700 billion to our Federal debt?
If balancing the budget were their highest priority, there would not
be a $245 billion tax cut in the reconciliation package.
Mr. President, supporters of the reconciliation measure had the
opportunity to demonstrate that balancing the Federal books was a
higher priority than providing a $245 billion tax cut.
The senior Senator from West Virginia [Mr. Byrd] and I offered an
amendment to the reconciliation bill during our limited debate that did
nothing but strike the tax cut, lowering the bill's cumulative deficits
by $245 billion.
Mr. President, the change to the bill by that amendment alone would
have balanced the Federal books in 2001, a year before the underlying
measure.
Only two of the Members who supported the reconciliation package also
supported that amendment.
Balanced budget, Mr. President?
If supporters of the reconciliation measure really wanted to balance
the budget, they would have supported that amendment.
Their failure to do so is clear evidence that the $245 billion tax
cut, not a balanced budget, is their highest priority.
If the $245 billion tax cut were not the priority of the
reconciliation bill, we would not see the $450 billion cuts to Medicare
and Medicaid.
If the $245 billion tax cut were not the priority of the
reconciliation bill, we would not have seen the tortured,

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and even dangerous precedents set on this floor during the
reconciliation debate through rulings from the Chair on what can only
be called highly questionable parliamentary interpretations of budget
points of order with respect to Social Security.
Senate rules prevent a fuller discussion of those events.
It is enough to say that the question need never have come up.
We need never have risked damage to the integrity of our rules had
there been a willingness to pare back this unjustifiable tax cut to 95
percent of its proposed level.
The $12 billion raid on the Social Security trust fund, and the
carefully scripted parliamentary exchange used to subvert our budget
rules, was made necessary because of an unwillingness to lower the tax
cut by so little as 5 percent.
Mr. President, I understand that the conference committee found a
different source of funding, making the raid on the Social Security
Trust Fund unnecessary.
But the damage is done.
In an effort to protect the tax cut at all costs, a critical budget
rule has been weakened.
Though the $12 billion may have been restored to the trust fund, the
integrity of the Senate's budget rules has been compromised.
This is not the first assault on our budget rules in the name of
cutting taxes.
I am reminded in particular of the so-called dynamic scoring debate,
a backdoor attempt to circumvent our budget procedures--again, done in
the name of cutting taxes.
Mr. President, in the name of cutting taxes, the extremists will
deceive the public, compromise our budget rules, slash health care
protections for the most vulnerable in society, and forsake efforts to
balance the Federal budget.
Mr. President, this budget is extreme.
And the driving force behind its excess is the $245 billion tax cut--
a tax cut that apparently is timed to be mailed out only days before
the 1996 elections.
Those who want to understand this reconciliation package need look no
further than the tax cuts.
All other provisions flow from the assumed tax cuts.
All the actions surrounding the measure flow from the assumed tax
cuts.
As I have noted, some who support this budget may actually endorse
the measure's extremism.
Others support it in spite of its extremism.
But make no mistake.
Those who endorse the extreme provisions in reconciliation and those
who back the measure in spite of them, support the bill primarily as a
vehicle to cut $245 billion in taxes.
The fiscally irresponsible tax cut is the essence of this measure and
it infects the entire package.
I urge the President to veto this measure, so we can begin putting
together a budget plan that will balance our Federal books by 2002 or
sooner.
A budget plan that will have enough public support to ensure that it
will be sustained for the full duration.
A budget plan that includes cuts to Medicare and Medicaid, but a plan
that cuts smart, not one that cuts mean.
A budget plan that distributes the burden of reducing the deficit
fairly.
One that includes the defense budget as well as our health care
budget.
One that includes one of the most rapidly growing areas of our
Federal budget--tax expenditures.
A budget plan that does not include the fiscally reckless $245
billion tax cut that jeopardizes our most important economic goal, a
balanced Federal budget.
Mr. President, I yield the floor.

chapter 4--federal oil and gas royalties

Mr. MURKOWSKI. Mr. President, the Federal oil and gas royalty chapter
in the Balanced Budget Act is the only legislative initiative taken in
the last 13 years to cost-effectively increase the Nation's third
largest source of revenue--mineral royalties from Federal lands, more
specifically, oil and gas royalties. This legislation would establish a
comprehensive statutory plan to increase the collection of royalty
receipts due the United States. These mineral receipts will help reduce
our budget deficit. Without this legislation, an ineffective and costly
royalty collection system will continue, perpetuating long delays and
uncollected royalties.
Let me make absolutely clear, Mr. President, that this legislation
does not apply to Indian lands. It applies only to royalties from oil
and gas production on Federal lands.
This is historic legislation, Mr. President, in that it would empower
States to perform oil and gas royalty management functions, such as
auditing and collecting, that are essential to bringing additional
receipts to the Treasury and the States within a 6-year limitation
period established by this legislation. By expanding the States' role
in performing Federal oil and gas royalty management functions
consistent with Federal law and regulation, States are provided a great
economic incentive that also benefits the Federal Treasury. The more
aggressive States are in performing delegated functions, the greater
their share of net receipts under the Mineral Leasing Act. That act
requires 50 percent of all royalties from Federal onshore oil and gas
production to be shared with producing States.
Chapter 4 establishes a framework for the Federal oil and gas royalty
collection program that will bring in an additional $51 million in
revenues to the U.S. Treasury and provide an additional $33 million to
the States over 7 years. These additional receipts result primarily
from: First, Requiring the Secretary of the Interior and delegated
States to timely collect all claims within 6 years rather than allow
the claims to become stale and uncollectible; second, requiring early
resolution and collection of disputed claims before their value
diminishes; third, requiring Federal and State resources to be used in
a manner that maximizes receipts through more aggressive collection
activities; and fourth, increasing production on Federal lands by
creating economic and regulatory incentives. Without the statutory
framework of this legislation, the Nation's third largest revenue
source--the Interior Department's Minerals Management Service is the
third largest source of revenue behind the IRS and Customs Service--
will continue to be subject to greatly delayed collections and the risk
of reduced receipts due to noncollection over time.
To achieve the goal of maximizing collections through more timely and
aggressive collection efforts, this legislation would do the following
specific things. It would require the Secretary, delegated States, and
lessees to take action respecting an obligation within 6 years from the
date that obligation became due. The provisions require that judicial
proceedings or demands--for example, orders to pay--be commenced or
issued within 6 years of the date when the obligation became due or be
barred. Use of legal authority other than that provided in this
section--for example, the Debt Collection Act--is not precluded so long
as judicial proceedings or demands are commenced or issued within the
6-year period. It is not intended that such other legal authority be
used as a substitute for, or to circumvent, emasculate or otherwise
frustrate, the 6-year limitation period. Lessees would be required to
maintain their records during the 6-year period in order to verify
production volumes.
The legislation would expedite the administrative appeals process at
the Interior Department by establishing a 30-month limitation on
appeals. Presently, over $450 million in disputed claims languish in a
bureaucratic appeals process and continue to lose value. By speeding up
the appeals process, the Secretary would increase the value of these
obligations and collections to the Treasury.
The legislation also would level the playing field for royalty payors
by authorizing the payment of interest on overpayments. Present law
requires lessees to pay interest on late payments and underpayments as
a disincentive for being tardy or underpaying royalties, but does not
compensate lessees who overpay royalties and who lose the time value of
that money through some legitimate error. This legislation would
provide for payment of interest on overpayments without regard to the
amount of the overpayment.
And finally, Mr. President, the legislation would authorize the
Secretary to allow prepayment of royalties and

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to provide other regulatory relief for marginal properties, and require
that adjustments or requests for refunds for underpayments or
overpayments be pursued within a 5-year window coinciding with the 6-
year limitation period.
Mr. President, CBO estimates that chapter 4 provisions will procure
savings of $6 million in fiscal year 1996, $40 million in 5 years, $51
million in 7 years, and $66 million in 10 years. We believe this
legislation will do more than simply bring receipts to the Government
earlier than they would arrive under the present system, Mr. President.
We believe a more efficient, effective, and aggressive program,
combined with some of the economic incentives and regulatory relief,
will bring new savings to the Treasury and the States. Because of these
savings, the provisions in chapter 4 are an important part of the
Balanced Budget Act of 1995.

Section 1107

Mr. CRAIG. Mr. President, I rise to engage in a colloquy with Senator
Lugar, the distinguished chairman of the Committee on Agriculture,
Nutrition and Forestry, regarding section 1107 of the bill.
Mr. LUGAR. I would be pleased to engage the Senator from Idaho in a
colloquy.
Mr. CRAIG. Is it your understanding that section 1107 of the bill
reforms the Federal Sugar Program by imposing a forfeiture penalty
which effectively reduces the loan level for sugar by 1 cent per pound,
eliminating domestic sugar allotments that control supply,
conditionally authorizing the use of recourse sugar program loans, and
increasing the contributions of sugar producers toward deficit
reduction by increasing the assessments on sugar marketings by 25
percent?
Mr. LUGAR. The gentleman is correct, the reforms in section 1107 will
result in more competitive sugar prices, enhanced Government revenues,
and the potential for increased sugar imports.
Mr. CRAIG. Mr. Chairman, as a conferee for the Senate on section 1107
of the bill, it is my understanding that the conferees have agreed to
include language in subsection (d) of section 1107 that will reform the
Sugar Program by authorizing, for the first time, the Secretary of
Agriculture to administer the program through the use of recourse
loans, subject to specific conditions. If implemented, the use of
recourse loans is a major reform from the nonrecourse loans that have
been used to support the prices of all basic farm program commodities
in this century. The conferees authorized the use of recourse loans for
the Sugar Program only subject to specific conditions outlined in
section 1107(d) of the bill. Is this your understanding as well?
Mr. LUGAR. The gentleman is correct. Section 1107 conditionally
authorizes the Secretary to depart from current practice and use
recourse loans to administer the Sugar Program. Section 1107(d)(2)
conditions the use of recourse loans on the requirement that the
Secretary provide nonrecourse loans in the event that the tariff rate
quota for imports of sugar into the United States is established at, or
increased to, a level in excess of 1.5 million short tons of sugar in
any year. It is the clear intent of the conferees that if the
subsection (d) conditional authorization for the use of recourse loans
to administer the Sugar Program, or the restrictive conditions on the
use of such authority in paragraphs (2) and (3) of subsection (d), is
removed from the bill, the Secretary of Agriculture shall continue to
administer the Sugar Program through the use of nonrecourse loans
authorized under subsections (a) and (b).

medicaid payments to indian health service facilities

Mr. PRESSLER. Mr. President, I would like to discuss several
important Medicaid provisions in the Balanced Budget Act that will have
an impact on my home State of South Dakota.
The Medicaid reform proposal, as contained within the Balanced Budget
Reconciliation Act, would maintain current law that requires the States
to pass through to Indian Health Service facilities funding from the
State's federal Migrant allotment. For a State such as South Dakota--
with 37 percent of its Medicaid beneficiaries being Native Americans--
this creates a highly problematic situation. Let me explain. Presently,
the IHS budget is funded at an amount less than actual need. To deal
with this shortfall, Federal funds have been made available through
State Medicaid programs. As my colleagues know, the proposed Medicaid
reform provisions would cap Federal Medicaid funds to the States. As a
result, States with IHS and significant Native American populations
facilities would be forced to use limited Federal funds to supplement
the intentional shortfalls in the IHS budget, which could limit
Medicaid service availability to Medicaid eligible Native and non-
Native Americans. To compensate, States may need to limit payments to
IHS facilities to conserve Federal dollars, or utilize limited State
resources to make up shortfalls for non-Indian people. In short, the
Medicaid reform proposal would unfairly single out those States--37 in
all--with a significant Indian population.
The majority leader has requested from me and the Governor of my
State suggestions as to how we may rectify this situation. I believe
three possible solutions exist: First, the creation of a separate
tribal allocation equal to \1/2\ of 1 percent of the budget for the new
Medicaid Program that would assure reimbursement for services to Native
Americans through their Indian health programs. This allocation could
be provided either through a direct billing mechanism between the
tribes and the Federal Government, or through the current pass-through
structure. Second, a repeal of the current Federal statute that
requires States to serve as a pass through for IHS Medicaid funds. This
would release States of what I believe to be an improper involvement in
the special relationship that exists between the Federal Government,
the Indian Health Service and Native American citizens. This repeal
would require the establishment of a direct billing mechanism to
satisfy existing requirements of 100 percent Federal reimbursement; or
third, to satisfy those States desirous of maintaining current law, a
structure that would allow States the option to either continue serving
as a pass through, or to insist on a direct Federal-tribal
relationship.
Mr. President, at issue is the increased flexibility we promised our
Nation's Governors in return for their acceptance of a revised Medicaid
funding formula. Obviously, maintenance of the current system would
severely hamper the flexibility of States with significant Native
American populations. Two factors are involved: A capped Medicaid
grant, and a 100-percent Federal reimbursement requirement for Medicaid
eligible Native Americans. Without additional Federal funds under the
current system, or a direct Federal-tribal billing system, the result
will be added pressure on States to use its own funds to maintain
services for Medicaid eligible non-Indians. The majority leader has
indicated his interest and support for finding an appropriate solution.
Unfortunately, this issue was left unresolved prior to the completion
of conference. On behalf of the numerous Senators and Governors who
have contacted the majority leader on this issue, it is my hope we will
find a fair solution once the President vetoes this legislation.

Mr. President, I see the senior Senator from Alaska on the floor. I
know my colleague shares my concerns regarding the current Medicaid
reform proposals and would yield to him to make any comments on this
subject.
Mr. STEVENS. I thank my friend from South Dakota. Mr. President, I
share Senator Pressler's concerns regarding funding for Medicaid
services provided to Indians and to Native Alaskans. In Alaska,
approximately 35 to 40 percent of Medicaid recipients are Native
Alaskans.
In the past, the Federal Government has paid 100 percent of the costs
of Medicaid services delivered to Alaska Natives in Indian Health
Service facilities. The State of Alaska acted only as a conduit for
these funds. I understand that the proposed MediGrant Program would
continue to require that health services provided to eligible Alaska
Natives in IHS facilities as well as tribally owned or operated
facilities be paid 100 percent by the Federal Government. In light of
funding shortfalls for the Indian Health Service, IHS facilities in
Alaska depend on these third-party payments from the Medicaid Program
to meet their expenses.
However, under a capped MediGrant Program, Alaska may be faced with a

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Hobson's Choice of either cutting back on payments to Native facilities
or being forced to cut back on payments for services to poor non-Native
Alaskans. This could easily lead to racial tensions in Alaska which we
all work very hard to avoid.
I would like to add my voice to that of my colleague from South
Dakota in urging your continued cooperation in finding an equitable
solution to this problem.
Mr. PRESSLER. Mr. President, I see the distinguished majority leader
on the floor and I would like to yield to him to make a brief statement
regarding Medicaid payments made to Native American health programs
serving Medicaid eligible native Americans.
Mr. DOLE. Mr. President, I recognize the importance of this issue to
South Dakota, Alaska, and other States with significant native American
populations. I have had a number of recent conversations with my
colleagues from South Dakota and Alaska. I also heard from the Governor
of South Dakota. They have made me aware of the impact this issue may
have upon their States. The Senators from South Dakota and Alaska have
my assurance that I will continue working with them to find a solution
to this complex issue.
Mr. PRESSLER. Mr. President, I thank the majority leader and my
friend from Alaska. I appreciate the majority leader's consideration of
our request and look forward to working with him on this matter of
great importance to South Dakota, Alaska, and all other States with
significant native American populations.

Dairy Provisions in Reconciliation Reveal Hypocrisy

Mr. FEINGOLD. Mr. President, during this budget debate, it became
quite clear that Republican's rhetoric about less Government, less
regulation, less spending, and the end of business as usual, cannot
stem their rush to pass this particular budget package, regardless of
the contents of the package. The hypocrisy of that rhetoric was
revealed during these debates, when Republicans began abandoning not
only their own rhetoric, but also members of their own party in an
effort to pass a budget.
Mr. President, I am talking about the sequence of events that have
occurred both in this Chamber and the House of Representatives on dairy
policy. Actions of the Republican leadership are more significant for
what they didn't do than for what they did do on dairy policy. What
does this budget reconciliation bill before us do on dairy policy?
Nothing, Mr. President, absolutely nothing. No savings, no reform, and
clearly no courage to make the tough calls.
This is inexcusable during a year in which this budget bill
represents the vehicle for major reform of all agricultural programs.
Dairy policy, and specifically, the Federal milk marketing order system
is badly in need of reform. Federal milk marketing orders are an
antiquated, overly regulatory system of setting milk prices throughout
the country and determining where, when, and how milk should be
shipped. The system sets minimum milk prices artificially high in many
parts of the country at a significant cost to both taxpayers and
consumers, and to the extreme disadvantage of dairy farmers in
Wisconsin and throughout the Upper Midwest, where fluid milk prices are
the lowest by law. The system has distorted the market resulting in
perverse economic incentives for overproduction in a sector for which
the slightest oversupply can send farm-level prices plummeting.
This budget bill presented an ideal and unique opportunity to both
reform Federal milk marketing orders, reduce regulation and save
millions in taxpayer dollars. Eliminating Federal orders while leaving
a basic support system in place would have saved $669 million over 5
years, which is only about $100 million shy of the conference committee
target for dairy. Instead of taking the route of terminating this
system and letting the market work, the Republicans dropped the $800
million in savings the conference committee was to achieve from dairy.
But, Mr. President, nothing was done, no changes were made. We are
left with the status quo--the status quo that the leaders of the so-
called revolution had made a commitment to end. ``We are going to end
business as usual''--that is what the Republicans told the American
people.
Well, it is business as usual, Mr. President.
That was pretty clear when the Senate took up dairy late last month.
The Senate version of reconciliation not only did nothing to eliminate
the inequities and regulatory burdens of Federal milk marketing orders,
but actually provided for more Government regulation, more market
distortion and more regional inequities. During floor action, Senators
approved legislation imposing a hidden tax on dairy farmers throughout
the Nation for the benefit of a few west coast States--known as class
IV pooling. The Senate also approved the northeast dairy compact which
was astonishing in this political climate. Some of the very Members of
this body who have been decrying the consumer costs and excessive
Government intervention imposed by the sugar and peanut programs, not
only voted to impose a milk tax on New England consumers but also to
allow six States to set minimum milk prices well above that allowed
under current law.
The House, after seeking some reform compromise on Federal orders,
ultimately voted to eliminate them. That was certainly the wiser of the
two courses, and an approach, which I ultimately endorsed following the
Senate's ill-conceived actions. The Upper Midwest is harmed so badly by
Federal orders, that in the absence of reform, they prefer a completely
unregulated market to an overregulated one.
Despite the efforts of those of us from the Upper Midwest to reform
Federal orders and despite the months of effort by Congressman
Gunderson, a Republican and chairman of the House Subcommittee on Dairy
Policy, to terminate the program when reform efforts failed, the
Republican majority took a walk on dairy policy. Congressman Gunderson
worked hard to set dairy policy right. Unfortunately, in the end when
it counted, Speaker Gingrich decided that political expediency was more
important than supporting his chairman's package. The Republicans have
abrogated their responsibilities on a tough issue.
House Speaker Newt Gingrich indicated that reform of Federal Orders
would be high on the Republican agenda following Thanksgiving. However,
given that Speaker Gingrich was willing to forgo $800 million in budget
savings in order to avoid a fight in his own party on dairy policy, I
am highly skeptical that his commitment to reform is terribly strong.
Mr. President, I have always said there are three avenues to
restoring fairness to Wisconsin farmers: judicially--by bringing legal
actions against the Department of Agriculture; legislatively--which now
seems unrealistic; and administratively--through the Secretary of
Agriculture's vast rulemaking authority.
Several months ago, Secretary of Agriculture Dan Glickman accepted my
invitation to participate in a barn meeting with dairy farmers in
Greenleaf, WI. Having spent an hour and a half listening to dairy
farmers, Secretary Glickman conceded that indeed Federal orders
discriminate against the Upper Midwest to the benefit of dairy farmers
in other parts of the country and that fluid milk prices set too high
in some regions encouraged overproduction.
While I have long been skeptical of the ability of the Department of
Agriculture to do the right thing with respect to orders, I think the
dairy farmers of Wisconsin have in Dan Glickman a Secretary who has at
least been willing to admit our farmers have been justified in their
cries of ``foul.'' Previous Secretaries have failed in their duties in
that respect.
So, today I am calling on Dan Glickman to do what Congress apparently
cannot--make the changes to this antiquated program that the farmers of
Wisconsin so deserve. I hope, and feel confident, that Dan Glickman has
the courage that the Republican leadership lacks on this matter.
I would put my colleagues on notice, however, that I am not willing
to give up the fight in this Chamber. This battle for fairness is not
over. And, Mr. President, if Members are not willing to compromise to
achieve reform, I will seek the termination of Federal milk marketing
orders.
Mr. SMITH. Mr. President, it is now or never time in the economic
history

[[Page S 17298]]
of our country. At the end of this year, our national debt will exceed
$5 trillion. We are adding to the debt at the astonishing rate of
$9,600 per second. As I speak, every man, woman, and child in America
is more than $18,000 in debt. There is little doubt that a crisis is at
hand. The only question remaining is: Will the Congress and the
President of the United States step up to the plate and solve the
problem?
The Balanced Budget Act of 1995 before the Senate today is the
congressional answer to our crushing debt problem. It may not be the
final answer, it may not be the perfect answer, but it is the only
answer put forth thus far. President Clinton has never submitted a
balanced budget to Congress, and has made it clear that he never will.
In fact, as the ongoing Government shutdown shows, the President would
rather close the Federal Government than agree to balance the budget.
Clearly, President Clinton does not have his priorities straight.
Over the past several weeks, we have heard vicious attacks on the
balanced budget bill that is before the Senate today. The Republican
balanced budget has been called ``immoral'' and ``irresponsible.'' The
American people have been warned of ``devastating'' cuts in spending.
To the casual observer, it might appear that the sky is about to fall.
The truth, however, is quite different. In fact, the budget before the
Senate today is the only chance to save our country from an immoral,
irresponsible, and devastating future.
Mr. President, if there was an easy solution to our fiscal problems,
you can rest assured that Congress would have found it long ago. I do
not agree with every provision in the bill before the Senate. If I
could pick and choose, there are many priorities that I would change.
On the balance, however, I think the product is a good one because it
gets the job done. There are no smoke and mirrors, just a solid
balanced budget using solid economic assumptions. I would like to
commend Senator Domenici for his leadership and hard work on this bill.
The bill before the Senate will balance the Federal budget in 7
years. That fact has been certified by the Congressional Budget Office.
The budget will save Medicare from bankruptcy, and strengthen and
protect the program for future generations. The legislation completely
overhauls our broken welfare system. It transfers power away from
Washington bureaucrats and returns it to State and local officials.
The benefits of a balanced budget far outweigh any temporary pain.
The Congressional Budget Office estimates that a balanced budget will
result in a reduction of long term interest rates of approximately 2
percent. On a typical student loan, that reduction would save American
students $8,885. On a typical car loan, it would save the consumer
$676. On a 30 year, $80,000 mortgage, lower interest rates would save
the homeowner $38,653 over the life of the mortgage.
Mr. President, the Senate bill also provides significant tax relief
to American families. I know that many of my colleagues have expressed
disdain at the idea of cutting taxes. Apparently, they find it
offensive to let American taxpayers keep more of their hard-earned
money. I would ask, is it offensive to provide a $500 per child tax
credit? Is it offensive to create a tax credit for adoption expenses?
Is it offensive to provide a tax credit for interest paid on a student
loan?
I certainly do not think so?
The critics of tax cuts think Members of Congress can spend money
better than a family of four in Berlin, NH, or Cleveland, OH, or
Atlanta, GA. I would respectfully disagree. The only way to limit the
size and scope of the Federal Government is to limit its source of
energy. The Federal Government is fueled by taxes. Simply put, the more
Uncle Sam collects in taxes, the more Uncle Sam will spend. In 1993,
President Clinton raised taxes on the American people by $250 billion.
He wanted to expand the Government. In 1995, the Republican Congress
proposes to reduce taxes by $245 billion. We want to shrink the
Government.
Mr. President, I have held a good many town meetings in New Hampshire
to talk about the budget, taxes, welfare reform, and Medicare. Often,
when I say that Congress intends to balance the budget in 7 years, my
constituents ask why we are waiting that long! It is a difficult
question to answer. There is no danger in going too far, too fast, as
many would have us believe. The real risk to all Americans is the risk
that we will not get the job done.
I have waited 10 years for the opportunity to vote for a balanced
budget. The time for waiting is over and the time for acting is now.
This budget is bold; it is real, and it stands alone as the only
solution to our Nation's fiscal problems. I urge my colleagues to
support the Balanced Budget Act of 1995, and I urge the President to
sign the bill into law.

``midnight in america'' and budget priorities

Mr. KENNEDY. Mr. President, I rise today to call the attention of my
colleagues to an excellent recent opinion column by Jamie Stiehm
distributed by New America News Service/New York Times Special
Features. The column, entitled ``Midnight in America,'' describes the
Senate passage of the Budget Reconciliation bill last month, and is
especially timely now as the Senate continues to debate the Republican
budget plan. As the column makes clear, the true debate is about
fundamental American priorities and the kind of country America will be
in the years ahead. I believe Ms. Stiehm's column will be of interest
to all of us in Congress, and I ask unanimous consent that it may be
printed in the Record.
There being no objection, the column was ordered to be printed in the
Record, as follows:

``Midnight in America''

(By Jamie Stiehm)

[From the New America News Service/New York Times Special Features]

Now that the O.J. Simpson trial and the World Series are
over, maybe America can pay attention to another show--and
what a show it is on the floors of the House and the Senate.
Not all revolutions have to happen in the streets. Nor do
all revolutionaries look like Lenin. The one we're having
right now is something we can see on C-SPAN and arose largely
as a result of apathy, not action, on the part of the
American electorate, most of whom forgot to vote last fall.
So what we have here is a character named Newt changing the
course of a perfectly nice country, while most of its
citizens weren't even watching.
Make no mistake, this is no budget business as usual. The
manner, means and contents of the enormous budget bill passed
by Congress--just as the clock struck midnight on the Senate
side--are like nothing its members have seen, done or dreamt
before.
First, the idea of allowing 30 seconds of debate on both
sides of some amendments might seem strange in the greatest
deliberative body in the world. But the Senate needed no more
time than that to pass amendments like the one allowing 19
million acres of Alaskan wilderness to be opened to oil
drilling. Don't ask what that has to do with a balanced
budget, because I don't know. What I do know is that the
Senate rejected the same idea of drilling in the Arctic
preserve after a long floor fight a few years ago--just one
way the times have changed.
Another is the sheer refusal to deal across the aisle.
Traditionally, politics is about the art of the possible, the
search for a compromise that makes the greatest number of
people happy. But not this time. The only bargaining and
concessions made were between Republicans themselves, with
moderate Republicans able to make a small difference to the
final outcome. For example, they persuaded Majority Leader
Bob Dole (R-Kan.) not to knock out all federal nursing home
standards. Again, don't ask me what that particular issue has
to do with a balanced budget.
As far as Republicans were concerned, though, Democrats
were just making so much noise about tax cuts and Medicare
cuts. The two figures are suspiciously similar, with
Republicans proposing to cut taxes by $245 billion and
Medicare by $270 billion over the next seven years. That's
what Democratic senators such as Edward Kennedy (D-Mass.)
were roaring about all week, the unseemliness of changing the
tax code at the expense of health care for senior citizens.
Not to mention the fact tax cut helps the rich and hurts the
poor. Those earning under $30,000 will actually pay higher
taxes under the new budget plan brought to us.
Makes a whole heap of sense, doesn't it? Especially when
the latest poll reveals that most voters, including
registered Republicans, don't even want that tax cut.
Finally, please don't ask me why the Pentagon didn't lose a
penny under this budget--in fact, it got a few billion
dollars more than it asked for, though there are no wars,
cold or hot, in sight.
Yet plainly embedded between the lines and numbers of this
latest Capitol Hill budget are values that go
counterclockwise to American history. Throughout most of this
century, since the Progressive Era and the New Deal, the
direction of social legislation

[[Page S 17299]]
has been to make the federal government a friend, not an enemy, for
most American citizens and families. Social Security and the
G.I. bill are the classic examples of this trend, of course,
but there are countless others, such as the 1964 Civil Rights
Act.
But now the new thing is ``devolution,'' a word heard
almost every day on the Hill. That translates to sending
money, power and responsibility from the federal government
to the states to take care of public assistance for the aged,
sick and poor. The ways and means to this end is through
another new buzz word, ``block grants.''
Since when have states suddenly become beacons of wisdom
and enlightenment in political dialogue? The last time states
were regarded with such reverence by politicians in Congress
was right before the Civil War. But believe me, I'd rather
have the federal government watching over social welfare and
equal justice than any one of the 50 states. That, if nothing
else, is a painful lesson from our history.
There was a good reason why the Founding Fathers decided we
are the United States, not simply the States. America stands
for something more than the sum of its parts.
``The people have bread, but they want circuses,'' said a
wise member of the Senate as he walked onto the floor to
vote.
Change channels, America. Watch Newt Gingrich try to lead
the latest American revolution--or should I say devolution--
and see if that's the country you want to wake up to the
morning after midnight.

Mr. COATS. Mr. President, there are a number of compelling economic
reasons to support a balanced budget: Lower interest rates: Higher
economic growth. Others have drawn those implications in detail.
But these economic facts do not fully explain the urgency of this
issue in the minds of many Americans. There is a moral aspect to this
debate, and a moral imperative we must understand. Many of us are
convinced that endless deficits are not only unwise, but unprincipled.
They are not just a drag on our economy, they are a burden on our
national conscience.
Thomas Jefferson defined this moral aspect, arguing that:

The question of whether one generation has the right to
bend another by the deficit it imposes is a question of such
consequence as to place it among the fundamental principles
of Government. We should consider ourselves unauthorized to
saddle posterity with our debts, and be morally bound to pay
them ourselves.

We are debating one of the fundamental principles of government, and
one of the basic moral commitments between generations. It has always
been one of the highest moral traditions for parents to sacrifice for
the sake of their children. It is the depth of selfishness to call on
children to sacrifice for the sake of their parents. Mr. President, if
we continue on the current path, we will violate this trust between
generations, and earn the contempt of the future.
Every child born in America now inherits nearly $19,000 in public
debt. This is the destructive legacy of a Government without courage.
While decades of deficit spending has caused a budgetary crisis, it has
done more than that--it has betrayed a moral responsibility because
when Americans view our actions, they see past the numbers to a set of
principles. They see more than a matter of right and left, they see a
matter of right and wrong.
Make no mistake, this Balanced Budge Act makes good economic sense.
But it also makes us consistent with our highest ideals.
That is the moral imperative of this economic debate--the reality
beyond the bottom line. But there is, as always, a political imperative
that pushes in the opposite direction.
Deficit spending has always made political sense. It allows
government to please people in the present by placing burdens on the
future. The future, significantly, has no vote in the next election.
Both the President and Congress have built their power on the ability
to buy constituent support with cash funded from debt. Republicans and
some Democrats in Congress prepared to part with that destructive
power. The President, it seems obvious, is less willing to surrender
it--even in this budget crisis, even when the views of most Americans
are clear, even when so much is at stake.
These two imperatives--the moral imperative and the political
imperative--are struggling against each other at this moment. Never in
my career has the choice been more stark or more important.
On one side are false numbers and false promises. The President says
he favors a balanced budget, but he is willing to shut down the
Government rather than commit to hard deadlines and hard numbers. His
commitment during the campaign was a balanced budget in 5 years. Now he
refuses to accept 7. And, in reality, because he will not use reliable
budget numbers, he rejects any balanced budget at all.
With this balanced budget act, we have called the President's bluff.
At one point he said he could only accept Congressional Budget Office
numbers. His exact quote? ``Let's at least argue about the same set of
numbers so the American people will think we're shooting straight with
them.'' That is precisely the Republican point: All our talk of a
balanced budget is meaningless if we are simply twisting numbers, not
making cuts. This is the exceptional achievement of the Balanced Budget
Act--it is based on facts, not on hope.
The President has already admitted that a balanced budget is possible
in 7 years. His exact quote? ``There's a way for me to meet the stated
objectives, which is a balanced budget in 7 years, with a family tax .
. .'' But now--faced with a bill that meets this goal--he says that 7
years is too soon.
This is the same old political imperative at work--preserve the
ability to buy votes by robbing the future, promise benefits to every
special interest in the country, the most special of all interest, the
children, with no thought for the next generation. That political
imperative has won every budget debate since the late 1960's. But this
Republican budget finally has the courage to confront the political
imperative--the courage to say that our generation has a moral duty to
the next.
The Balanced Budget Act is a practical, serious, responsible
expression of that moral imperative. It allows us to care for the needs
of our own society, without adding to the burdens of the future. Even
the Washington Post has observed, ``It's gusty and in some respects
inventive--and it addresses a genuine problem that is only going to get
worse.''
Mr. President, this is a historic piece of legislation--and not just
for economic reasons. It allows us in the Congress to leave some legacy
to the future other than monumental debt--a legacy of moral courage and
responsibility. We have waited a long time to make a vote like this--a
vote to keep our word and keep faith with the next generation.
Mr. EXON. Mr. President, I ask unanimous consent to have printed in
the Record a list of Byrd rule violations contained in the
reconciliation conference report.
This list has been prepared by the Democratic staff of the Senate
Budget Committee.
It is my opinion that each of these provisions violates section 313
of the Congressional Budget Act of 1974.
There being no objection, the material was ordered to be printed in
the Record, as follows:

EXTRANEOUS PROVISIONS, RECONCILIATION 1995
----------------------------------------------------------------------------------------------------------------
Subtitle and section Subject Budget Act violation Explanation
----------------------------------------------------------------------------------------------------------------
Title I--Agriculture

Section 1109(a)(2)................. Strikes sections listed 313(b)(1)(A).............. No budget impact.
as ``omitted law'' in
the code. Purely
housekeeping in nature.
Section 1109(b)(2)................. Strikes Agricultural 313(b)(1)(D).............. Outlay changes are
Act of 1949. merely incidental.

Title IV--Education and Related
Provisions

Subtitle A......................... Higher Education....... 313(b)(1)(A).............. Only recovery of
reserves scores.
Sec. 4004.......................... Amendments Affecting .......................... The cost estimate
(e)................................ Guaranty Agencies. includes a line
Reserve Fund Reforms... showing this
provision as having
no budgetary effect.
(1)................................ Strengthening and
Stabilizing Guaranty
Agencies.

[[Page S 17300]]

Subtitle A......................... Higher Education....... 313(b)(1)(A).............. Only recovery of
Sec. 4004.......................... Amendments Affecting reserves scores. The
(g)................................ Guaranty Agencies. cost estimate
Reserve Ratios......... includes a line
showing this
provision as having
no budgetary effect.
Subtitle B......................... Provisions Relating to 313(b)(1)(D).............. The waiver would
ERISA '74. slightly speed
distribution.
Sec. 4101.......................... Waiver of Minimum The JCT estimates
Period for Joint and ``negligible effect
Survivor Annuity revenue effects,''
Explanation Before therefore the
Annuity Starting Date. budgetary effect of
this provision is
merely incidental.

Title V--Subtitle C: Natural
Resources

Subchapter A--California Directed
Land Sale:
5301........................... Conveyance of Property. 313(b)(1)(D).............. Merely incidental,
budget savings
incidental to broader
policy of
transferring Federal
land (Ward Valley) to
the State of
California for the
purpose of developing
a low-level
radioactive waste
site.
Subchapter B--Helium Reserves:
5317........................... Land Conveyance in 313(b)(1)(A)(D)........... Non-budgetary and
Potter County, TX. merely incidental,
requires the
Secretary of the
Interior to transfer
land to a girl scout
group for $1.
Chapter 2--ANWR:
5333(c)........................ Compatibility.......... 313(b)(1)(A).............. Non-budgetary.
5333(h)........................ Conveyance............. 313(b)(1)(A).............. Non-budgetary,
authorizes the
Secretary to convey
land to the Kaktovik
Inupiat Corporation.
5338(19)....................... Employment and 313(b)(1)(A).............. Non-budgetary,
Contracting. requires best effort
to assure that the
lessee provides a
fair share of
employment for Alaska
Natives.
5341........................... Expedited Judicial 313(b)(1)(A).............. Non-budgetary, limits
Review. time period for
filing compliant
seeking judicial
review, and exempts
actions of Secretary
to judicial review in
any civil or criminal
proceeding for
enforcement.
5342........................... Rights-Of-Way Across 313(b)(1)(A).............. Non-budgetary,
the Coastal Plain. overrides existing
law (ANILCA's title
X1) which delineates
procedures for
transportation rights
of way within the
Alaska refuges,
including ANWR.
Chapter 5--Mining:
5378........................... Eligible Area.......... 313(b)(1)(A).............. Non-budgetary, sets up
eligibility criteria
for reclamation
activities funded by
the States.
Chapter 7, Subchapter A--Bonneville
Power Administration Refinancing:
5409........................... Contract Provisions.... 313(b)(1)(A).............. Non-budgetary,
requires the BPA to
offer its customers
contractual
commitments that will
not assess any
additional charges in
the future, beyond
the changes included
in this section.
Chapter 12--Concession Reform:
5464(b)(6)..................... Hiring Preference...... 313(b)(1)(A).............. Non-budgetary, intent
of section is to
require a hiring
preference for
residents of the
State of Alaska with
respect to concession
operations in that
state.
5467........................... Rates and Charges to 313(b)(1)(A).............. Non-budgetary,
the Public. authorizes the
concessioner to set
rates charged for
service to the
public, unless there
is no nearby
competition.
5472(b)(5)..................... Preferential Right of 313(b)(1)(A).............. Non-budgetary, allows
Renewal for Existing incumbent
Concessionaries. Concessionaries to
receive a 5 percent
bonus in the
reissuance of a
previous concession
authorization which
expires over the next
5 years.

Title VI--Federal Retirement and
Related Provisions

6023............................... Availability of Surplus 313(b)(1)(D).............. Extraneous; savings
Property for Homeless merely incidental to
Assistance. policy change.
Repeals Title V of
the McKinney Homeless
Act.

Title VII--Medicaid

The following Sections refer to
amendments to the Social Security
Act as amended by Section 7001 of
the bill:
``2100''....................... Purpose................ 313(b)(1)(A).............. Extraneous; no
budgetary impact.
``2105(a)(4)''................. Advisory Committees.... 313(b)(1)(A).............. Extraneous; no
budgetary impact.
States are required
to provide for
consultation with one
or more advisory
committees
established and
maintained by the
State.
``2112(f)''.................... Exceptions to Minimum 313(b)(1)(A).............. Extraneous; no
Set-Asides. budgetary impact.
Provides for States
to opt out of set-
aside requirements.
``2114''....................... Description of Process 313(b)(1)(A).............. Extraneous; no
for Developing budgetary impact. Not
Capitation Payment required for other
Rates. services provided
under the plan.
``2135(g)''.................... Estate Recoveries, 313(b)(1)(A).............. Extraneous; no
Liens Permitted. budgetary impact.
Reverses current law
by allowing States to
recovery resources
from an individual or
an individual's
estate for any amount
paid as medical
assistance.
``2137''....................... Quality Assurance 313(b)(1)(A).............. Extraneous; no
Requirements for budgetary impact.
Nursing Facilities.
``2154(e)(1)'' ``Only the Judicial Review........ 313(b)(1)(A).............. Extraneous; no
Secretary . . . under this budgetary impact.
subsection.''. Prohibits cause of
action against a
State for failure to
comply within the law
or its plan. Only the
Secretary may compel
a State to comply
with this Title.
``2171(a)(8)'' from ``only if Prescription drugs..... 313(b)(1)(A).............. Extraneous; no
such drugs . . .'' to end. budgetary impact.
Provides only drugs
not used or assisted
suicide.
``2171(a)(19)'' from ``only if Abortion............... 313(b)(1)(A).............. Extraneous; no
necessary . . .'' to end. budgetary impact.
Provides for abortion
services only in the
case involving rape,
incest, and when the
life of the mother is
jeopardized.
Sec. 13301..................... Exemption of Physician 313(b)(1)(A).............. No budget impact.
Office Laboratories.
Sec. 1853(f) of the Social Application of 313(b)(1)(A).............. No budget impact.
Security Act as added by Antitrust Rule of
Section 8001 of the bill. Reason to Provider-
Sponsored
Organizations.
Sec. 1856(a)(6) of the Social Establishment of 313(b)(1)(A).............. No budget impact.
Security Act as added by Standards; relation to
Section 8001 of the bill. State Laws.
Sec. 1858(d) (1) and (2) of the Adoption of Standards 313(b)(1)(A).............. No budget impact.
Social Security Act as added for Data Elements.
by Section 8001 of the bill.
Sec. 1882(d)(3)(i), (iii), Duplication and 313(b)(1)(A).............. No budget impact.
(iv), (v), (vi) of the Social Coordination of
Security Act as added by Medicare-Related Plans.
Section 8002(a)(1) of the bill
and Section 1882(d)(3) (B),
(C), and (D) of the Social
Security Act as added by
Section 8002(a)(2) of the bill
and Section 1882(u)(1) of the
Social Security Act as added
by Section 8002(b) of this
bill.
Sec. 8021...................... Medicare Payment Review 313(b)(1)(A).............. No budget impact.
Commission.
Sec. 8116...................... Additional Exception to 313(b)(1)(D).............. Merely incidental
anti-Kickback budget impact.
Penalties for
Discounting Managed
Care Arangements.
Sec. 8132...................... Clarificaton of Level 313(b)(1)(D).............. Merely incidental
of Intent Required for budget impact.
Imposition of
Sanctions.
Sec. 8151...................... State Health Care Fraud 313(b)(1)(A).............. No budget impact.
Control Units.
Sec. 8201...................... Repeal of Physician 313(b)(1)(D).............. Merely incidental
Ownership Referral budget impact.
Prohibitions Based on
Compensation
Arrangements.
Sec. 8416...................... Medical Review Process. 313(b)(1)(A).............. No budget impact.
Sec. 8417...................... Report by Medicare 313(b)(1)(A).............. No budget impact.
Payment.
Sec. 1839(e)(1)(C)(ii) of the Lock Box Provision..... 313(b)(1)(A).............. No budget impact.
Social Security Act as added
in Section 8511 of this bill.
Sec. 1839(h)(6)(A) of the Lock-Box Provision..... 313(b)(1)(A).............. No budget impact.
Social Security Act as added
in Section 8512 of this bill.
Sec. 1894(g) of the Social Report by Medicare 313(b)(1)(A).............. No budget impact.
Security Act as added in Payment Commission.
Section 8601 of this bill.
Title X--Veterans Affairs

Subtitle B. Sec. 10021--Exemption
for former POWs:
(a)(3)(C)...................... Exempts former POWs 313(b)(1)(A).............. This provision will
from paying not generate changes
prescription copays. in revenues or
outlays. If anything,
it would decrease
revenue to the
Government.

Title XI--Ways and Means--Finance

Retirement savings incentives:
Section 11018(d)............... SIMPLE savings plans. 313(b)(1)(a).............. No budgetary impact.
Part (d) exempts plans
from ERISA standards.
Health care provisions:
Section 11053.................. Preemption of state 313(b)(1)(d).............. Merely incidental. Not
insurance regulation. a necessary term or
condition.
Expiring provisions:
Section 11141.................. Extension of ethanol 313(b)(1)(d).............. Merely incidental.
blender refunds. Joint Tax scores
negligible revenue
effect.

[[Page S 17301]]

Section 11131(b)............... Extension of hazardous 313(b)(1)(a).............. No budgetary impact.
superfund taxes. Part
b directs the revenues
to the general fund
after August 1, 1996.
Exempt and charitable
organizations:
Section 11217.................. Exclusion from 313(b)(1)(d).............. Merely incidental.
unrelated business Joint Tax scores
taxable income certain negligible revenue
sponsorship payments. effect.
Section 11278.................. Treatment of certain 313(b)(1)(d).............. Merely incidental.
dues paid to Joint Tax scores
agricultural negligible revenue
organizations. effect.
Corporate and other reforms:
Section 11380.................. Clarification that 313(b)(1)(d).............. Merely incidental.
newspaper distributors Joint Tax scores
are independent negligible revenue
contractors. effect.
Pension simplification provisions:
Section 11442.................. Modification of 313(b)(1)(d).............. Merely incidental.
additional Joint Tax scores
participation negligible revenue
requirements. effect.
Section 11464.................. Treatment of leased 313(b)(1)(d).............. Merely incidental.
employees. Joint Tax scores
negligible revenue
effect.
Section 11451.................. Plans covering self 313(b)(1)(d).............. Merely incidental.
employed individuals. Joint Tax scores
negligible revenue
effect.
Section 11453.................. Distributions under 313(b)(1)(d).............. Merely incidental.
rural cooperative Joint Tax scores
plans. negligible revenue
effect.
Section 11454.................. Treatment of government 313(b)(1)(d).............. Merely incidental.
plans under Section Joint Tax scores
415. negligible revenue
effect.
Section 11456.................. Contributions on behalf 313(b)(1)(d).............. Merely incidental.
of disabled employees. Joint Tax scores
negligible revenue
effect.
Section 11460.................. Modifications to 313(b)(1)(d).............. Merely incidental.
Section 403(b). Joint Tax scores
negligible revenue
effect.
Section 11461.................. Modify notice required 313(b)(1)(d).............. Merely incidental.
of right to qualified Joint Tax scores
joint and survivor negligible revenue
annuity. effect.
Partnership simplification
provisions:
Section 11472.................. Returns required on 313(b)(1)(d).............. Merely incidental.
magnetic media for Joint Tax scores
partnerships with 100 negligible revenue
partners. effect.
Other tax simplification
provisions:
Section 11506.................. Subchapter S--Allow 313(b)(1)(d).............. Merely incidental.
interim closing of the Joint Tax scores
books. negligible revenue
effect.
Section 11552.................. Regulated Investment 313(b)(1)(d).............. Merely incidental.
Companies--allow Joint Tax scores
traders to adopt mark- negligible revenue
to-market accounting effect.
for securities.
Section 11561.................. Tax Exempt Bond 313(b)(1)(d).............. Merely incidental.
Provision--Repeal of Joint Tax scores
debt service-based negligible revenue
limitation of effect.
investment in certain
non-purpose
investments.
Section 11582.................. Modifications to FICA 313(b)(1)(d).............. Merely incidental.
tip credit. Joint Tax scores
negligible revenue
effect.
Section 11583.................. Conform due date for 313(b)(1)(d).............. Merely incidental.
first quarter Joint Tax scores
estimated tax by negligible revenue
private foundations. effect.
Estate, gift, and trust tax
provisions:
Section 11602.................. Distributions during 313(b)(1)(d).............. Merely incidental.
first 65 days of Joint Tax scores
taxable year of estate. negligible revenue
effect.
Section 11603.................. Separate share rules 313(b)(1)(d).............. Merely incidental.
available to estates. Joint Tax scores
negligible revenue
effect.
Section 11604.................. Executor of estate and 313(b)(1)(d).............. Merely incidental.
beneficiaries treated Joint Tax scores
as related persons for negligible revenue
disallowance of losses. effect.
Section 11605.................. Limitation on taxable 313(b)(1)(d).............. Merely incidental.
year of estates. Joint Tax scores
negligible revenue
effect.
Section 11611.................. Clarification of waiver 313(b)(1)(d).............. Merely incidental.
of certain rights of Joint Tax scores
recovery. negligible revenue
effect.
Section 11613.................. Clarification of 313(b)(1)(d).............. Merely incidental.
qualified terminable Joint Tax scores
interest rules. negligible revenue
effect.
Section 11614.................. Transitional rule under 313(b)(1)(d).............. Merely incidental.
section 2056A. Joint Tax scores
negligible revenue
effect.
Section 11615.................. Opportunity to correct 313(b)(1)(d).............. Merely incidental.
certain failures under Joint Tax scores
section 2032A. negligible revenue
effect.
Section 11619.................. Treatment under 313(b)(1)(d).............. Merely incidental.
qualified domestic Joint Tax scores
trusts rules of forms negligible revenue
of ownership which are effect.
not trusts.
Section 11631.................. Taxable termination not 313(b)(1)(d).............. Merely incidental.
to include direct Joint Tax scores
skips. negligible revenue
effect.
Excise tax simplification
provisions
Distilled spirits, wines and beer:
Section 11641.................. Credit or refund for 313(b)(1)(d).............. Merely incidental.
imported bottled Joint Tax scores
distilled spirits negligible revenue
returned to distilled effect.
spirits plant.
Section 11652.................. Fermented material from 313(b)(1)(d).............. Merely incidental.
any may be received at Joint Tax scores
a distilled spirits negligible revenue
plant. effect.
Section 11643.................. Refund of tax on wine 313(b)(1)(d).............. Merely incidental.
returned to bond not Joint Tax scores
limited to negligible revenue
unmerchantable wine. effect.
Section 11644.................. Beer may be withdrawn 313(b)(1)(d).............. Merely incidental.
free of tax for Joint Tax scores
destruction. negligible revenue
effect.
Section 11645.................. Transfer to brewery of 313(b)(1)(d).............. Merely incidental.
beer imported in bulk Joint Tax scores
without payment of tax. negligible revenue
effect.
Other excise tax provisions:
Section 11661.................. Other Excise Tax 313(b)(1)(d).............. Merely incidental.
Provision--clarify Joint Tax scores
present law for retail negligible revenue
truck excise tax. effect.

Title XII--Teaching Hospitals, GME,
Asset Sales, Welfare and Other

The following sections refer to
amendments to the Social Security
Act as added by Section 12101 of
the bill:
``402(c)(1)''.................. Condition of Grant..... 313(b)(1)(A).............. Extraneous; no
budgetary impact.
Five-year limit on
assistance.
``403(c)''..................... Authority to Use 313(b)(1)(A).............. Extraneous; no
Portion of Grant for budgetary impact.
Other Purposes.
``405''........................ Fed. Loans for State 313(b)(1)(A).............. Extraneous; no
Welfare Programs. budgetary impact.
``406(c)(3)''.................. Limit on Vocational Ed 313(b)(1)(A).............. Extraneous; no
Activities Counted as budgetary impact.
Work.
``407(a)(5)''.................. No assistance for 313(b)(1)(A).............. Extraneous; no
teenage parents who do budgetary impact.
not attend high school
or equivalent program.
``407(a)(6)''.................. No assistance for 313(b)(1)(A).............. Extraneous; no
teenage parents no budgetary impact.
living in adult-
supervised setting.
``408(a)(7)(C)(i)-(ii)''....... Scoring of State 313(b)(1)(A).............. Extraneous; no
Performance. budgetary impact.
``412(d)''..................... Annual Ranking of 313(b)(1)(A).............. Extraneous; no
States and Review of budgetary impact.
Most and Least
Successful Work
Programs.
``412(e)''..................... Annual Ranking of 313(b)(1)(A).............. Extraneous; no
States and Review of budgetary impact.
Issues Relating to Out-
of-wedlock births.
12102.......................... Report on Data 313(b)(1)(A).............. Extraneous; no
Processing. budgetary impact.
The following sections amend Title
IV of the Social Security Act in
Section 12302 of the bill:
``457(a)(4)''.................. Study and Report....... 313(b)(1)(A).............. Extraneous; no
budgetary impact.
``436''........................ Data Collection, 313(b)(1)(A).............. Extraneous; no
Reporting. budgetary impact.
12802(a)....................... Authorization of 313(b)(1)(A).............. Extraneous; no
Appropriations. budgetary impact.
Authorizes
discretionary
spending.
12804(2):
(D)........................ Consumer Education 313(b)(1)(A).............. Extraneous; no
Information. budgetary impact.
(E)........................ Compliance with State 313(b)(1)(A).............. Extraneous; no
Licensing Requirements. budgetary impact.
This section deletes
all health and safety
standards from
current law
12907(e)(3).................... Provision of Data to 313(b)(1)(A).............. Extraneous; no
Family or Group Day budgetary impact.
Care Home Sponsoring
Organizations.
12907(l)....................... Study of Impact of 313(b)(1)(A).............. Extraneous; no
Amendments on Program budgetary impact.
Participation and
Family Day Care
Licensing.
12908.......................... Pilot Projects......... 313(b)(1)(A).............. Extraneous; no
budgetary impact.
12926(b)....................... NET Authorization of 313(b)(1)(A).............. Extraneous; no
Appropriations. budgetary impact.
13011.......................... Definition of 313(b)(1)(A).............. Extraneous; no
Certification Period. budgetary impact.
13012.......................... Definition of Coupon... 313(b)(1)(A).............. Extraneous; no
budgetary impact.
13017.......................... State Option for 313(b)(1)(A).............. Extraneous; no
Eligibility. budgetary impact.
13026.......................... Caretaker Exemption.... 313(b)(1)(A).............. Extraneous; no
budgetary impact.
13027.......................... Employment and Training 313(b)(1)(A).............. Extraneous; no
budgetary impact.
13040.......................... Condition Precedent for 313(b)(1)(A).............. Extraneous; no
Approval of Retail budgetary impact.
Food Stores and
Wholesale Food
Concerns.
13041.......................... Authority to Establish 313(b)(1)(A).............. Extraneous; no
Authorization Periods. budgetary impact.
13042.......................... Information for 313(b)(1)(A).............. Extraneous; no
Verifying Eligibility budgetary impact.
for Authorization.
13043.......................... Waiting Period for 313(b)(1)(A).............. Extraneous; no
Stores That Fail to budgetary impact.
Meet Authorization
Criteria.
13944.......................... Expedited Coupon 313(b)(1)(A).............. Extraneous; no
Service. budgetary impact.
13045.......................... Withdrawing Fair 313(b)(1)(A).............. Extraneous; no
Hearing Requests. budgetary impact.
13049.......................... Authority to Suspend 313(b)(1)(A).............. Extraneous; no
Stores Violating budgetary impact.
Program Requirements
Pending Administrative
and Judicial Review.
13052.......................... Authorization of Pilot 313(b)(1)(A).............. Extraneous; no
Projects. budgetary impact.
----------------------------------------------------------------------------------------------------------------

[[Page S 17302]]

Mr. SIMPSON. Mr. President, I did not want to speak directly to
previous remarks made by my colleague from Nebraska, Senator Bob
Kerrey. I want to highlight them because of the very constructive
things that he has said--even, unfortunately, in opposition.
Unlike Senator Kerrey, I am very willing and eager to vote for the
balanced budget plan before us as it currently stands. This plan
represents the result of months of work and negotiation. It is not
necessarily the plan that I would have designed working alone, but we
do not have the luxury of working alone. This is the plan before us
that has the support of a majority of both Houses of Congress, it's an
honest plan, it will do the job, and it is right now our only realistic
hope of getting the job done, and reducing the debt burden that is
being piled high on the backs of our kids.
I do want the Senate to mark what Senator Kerrey has said, because as
always, he diagnoses accurately much of what ails us, in the fiscal
sense. And I am fully sympathetic with many of the choices he would
make to bring our fiscal house back into order. That is why I am
pleased to work with him on drafting legislation that will help save
our country from insolvency in the long run. He and I see eye to eye on
this.
I do fervently wish that it were possible to make all the reforms
suggested by Senator Kerrey in the context of this budget plan. But the
existing rules do not work in our favor. For example, the Byrd rule
forbids any changes in Social Security, even good and necessary ones. I
fully agree with Senator Kerrey that a five-tenths-of-1-percent
correction in the CPI is necessary and appropriate. to my mind, it is a
``no brainer''--a simple ``technical correction.'' It makes no sense to
perpetuate an error which we all know exists. The Senator from Nebraska
is so absolutely right about that.
But my attempts to include the CPI correction were frustrated by the
fact that it would affect Social Security, and thus violate the Byrd
rule. I do not like it, I think we should change it, but that's the way
it is. We should, in my view, change the rules to permit such reforms
in the future. But for now, we have to work within the rules as they
are.
Similarly, we ought to address the problem of population aging. We
ought to make further shifts upward in eligibility ages for Social
Security and Medicare, and for all programs which give benefits to the
elderly. But under our current rules, long-term reforms that only
produce savings outside the 7-year ``budget window'' are considered
extraneous. I do not like it, I think it's wrong, but those are the
limitations in the current budget process.
I mention these things not so simply express disappointment and to
``howl into the wind'' in the manner of King Lear, but to point out to
my colleagues that this is something we can and should change--in the
future. Senator Kerrey and I have a bill to require 30-year budgeting,
estimates of the 30-year effects of legislative changes. In my view, we
have to be able to plan further down the road when we are dealing with
retirement programs, ``safety-net'' rules that might affect how people
plan for their own time in retirement. In order to be fair, changes
must be announced well in advance. The fact that we only deal with the
short-term truly handicaps us as we attempt to make policy that is fair
and reasoned.
I do hope my colleagues will listen closely to Senator Kerrey and to
me as we discuss the need for ``30-year budgeting.'' Because, the rules
under which we operate very much determine the results. I believe that
this budget is perhaps the best attainable given the existing budgetary
rules. But I also believe that we must consider changing the rules to
force us to look further down the road--and to examine Social Security
solvency, and to stop fooling our countrymen and women.
This budget before us is hardly ``harsh'' or ``severe.'' This is a
sparrow belch in a typhoon. If we cannot get this done, we will never
do anything.
Mr. MURKOWSKI. Mr. President, this is an historic day. For the first
time in 26 years, the American public will witness the adoption of the
first real balanced budget.
And we are going to pass this legislation despite the fact that the
President of the United States has done nothing, I repeat, nothing, to
make this task bipartisan. In fact, he has fanned the flames of fear-
mongering simply to gain what he sees as a political advantage.
Just look at his actions and the actions of his Secretary of Treasury
in the past 10 days. He indicated that he would not sign a continuing
resolution to reopen the Government because it would have committed him
to balancing the budget in 7 years.
And Treasury Secretary Rubin last week spooked the global markets by
scaring investors into believing that the United States was facing an
imminent default on our debt. There was no default; in fact there was
no chance of a default, and Secretary Rubin knew that.
Yet he deceived the American people into believing default would
happen if the Republicans did not accept the President's demand that we
not go forward with our 7-year balanced budget plan. His actions are
reprehensible.
Emboldened by polls that show many Americans blame Republicans for
the Government shutdown, the President would rather maximize political
advantage than exercise fiscal leadership. The President mimics
leadership by standing up to the Republicans and refusing to seek a
balanced budget in 7 years.
That is not leadership.
In fact, it is quite the opposite.
When viewed through the lens of history, the President's behavior
will be viewed for what it is.
A waffle.
A retreat.
A repudiation of the promise of a balanced budget.
What we are offering the President is the first serious effort in two
and a half decades to put our fiscal house in order.
And the President is slamming the door in our face.
It is that simple.
We are on a pathway to reduce the growth in Federal spending by a
trillion dollars--to accomplish what the American people asked us to
do.
We are doing it without smoke and mirrors.
We are doing it with the CBO budget estimates that the President
himself asked that we use.
We are delivering on a promise made to voters. The President promised
a balanced budget in 5 years; but that's just one of so many campaign
promises the President abandoned when he walked in the White House.
But in keeping our promise, we are attacking the cancer of cynicism
that undermines the confidence that Americans have in their leadership,
and their Government.
We are so close to achieving our objectives.
Sadly, the President would rather be an instrument of the status quo
than a positive force for change.
The President would rather flame the fears of older Americans with
frightening tales of impending woe than lead us along the path to
fiscal sanity for the sake of our children.
In what I believe is a political miscalculation, the President is
deluded by a short term poll that will mean nothing when we are held
accountable to the people for the end result of our efforts today.
Most Americans do not believe we will keep our promise and balance
the budget in 7 years.
The President apparently wants to prove them right and thus deepen
the cynicism that embitters Americans toward their government.
And that, Mr. President, endangers far more than our fiscal
stability.
Mr. President, ever since the Republicans unveiled their balanced
budget legislative plan during this Spring, the President has been out
campaigning against the plan, instilling fear into our most fragile
citizens--the elderly.
Over and over and over again, there's one message the President has
been drumming into the American people. And that message is that we are
cutting Medicare.
Mr. President, nothing could be further from the truth. And I think
it's time for the President to stop his demagogic language about
Medicare.
Over the next 7 years Medicare spending will increase from $178
billion to $294 billion--a 65-percent increase, Mr. President. That is
NOT a cut.

[[Page S 17303]]

Put another way, spending for each beneficiary will increase from
$4,800 this year to $7,100 in 2002.
Mr. President, let members end the scare tactics on Medicare. Let us
face the fact that if we do nothing, if we maintain this endless
borrowing spree, we will bankrupt our children and grandchildren and
ensure that Medicare will go broke in 7 years.
I call upon my colleagues and the President.
Let us surprise America today.
Let us prove that we can balance the budget in 7 years, save
Medicare, and begin to lift this crippling debt from the shoulders of
our children and grandchildren.
Ms. MIKULSKI. Mr. President, Tonight we are choosing between two
paths for our country. We are defining what kind of country we want to
be, and how we are going to meet the challenges of the 21st century.
The bill before us offers one type of choice. This bill offers us a
future where we say: No to opportunity in the United States of America.
No to economic security for our seniors. No to educational
opportunities for young people. No to an opportunity structure for
working families.
Mr. President, I reject that choice. I want a future where we give
help to those who practice self help. I want a future in which senior
citizens can have economic security and peace of mind in their
retirement years. I want a future where young people can get an
education that leads to a job and real economic opportunity. I want a
future where we give a helping hand to working Americans who are doing
their best to provide for their families.
Let me tell you why I oppose this bill. Yes, I support a balanced
budget. But to achieve that we have to put politics and partisanship
aside, and work together to find what I will call the sensible center.
And this bill does not allow for that.
This legislation attacks economic security for senior citizens
through cuts in their health care. We need to make Medicare solvent.
But this bill would cut Medicare by $270 billion over the next 7 years.
Only $90 billion is needed to preserve the solvency of the Medicare
system.
What are the rest of the cuts for? They are to pay for tax breaks for
the wealthiest of Americans. I reject that.
I say let us do what we need to do to make Medicare solvent. But let
us put tax cuts on hold for a year. We have made so many reductions in
federal programs this year. Let us take the time to evaluate the impact
of those changes. Let us see where we are in 1 year. Then we can take a
look at whether we can afford to provide tax cuts. And if in a year we
do decide we can provide tax cuts, let's provide them for America's
working families. Not for the truly wealthy.
I oppose this legislation because it denies educational opportunity
to young people and an opportunity structure to working families. I
believe we must keep the doors of opportunity open--not slam them shut.
Education is the key to a better life. The federal student loan
program has opened the door of opportunity to millions of Americans.
Education must be a national priority. It is with me. Unfortunately, it
is not a priority in this legislation. Under this legislation, the
student loan program will be cut by $5 billion. This is unacceptable to
me.
I oppose this legislation because it increases taxes on working
families. By cutting the Earned Income Tax Credit, the bill denies help
to those who practice self help. It seems to me that if we are serious
about moving people from public assistance to private employment, the
first step is to make work pay. The EITC makes work pay. It ensures
that work is more beneficial for a family than welfare. I will not
support this bills cuts in the EITC program, which amounts to tax
increases for working families.
Mr. President, make no mistake. We must balance the budget. But we
must do it based on principles that preserve economic security for
senior citizens, that provide opportunity for young people, and that
ensure opportunity for working families.
I cannot and will not support any legislation that abandons these
principles. Therefore, I will vote against this legislation.
Mr. COHEN. Mr. President, the moral imperative for balancing the
budget is to stop Congress from passing on a mountain of debt to future
generations. Thomas Jefferson reminded us that a generation that spends
money while taxing another ``squanders futurity on a massive scale.''
Persistent budget deficits reduce the pool of savings necessary for
critical investments in new research, plants and equipment. Virtually
every economist agrees that without these investments, standards of
living cannot rise. Our collective sin has been the amoral indifference
with which we have demanded that our children pay for our
extravagances, while robbing them of their ability to provide for their
own subsistence. This is tantamount to fiscal child abuse, a crime for
which there has been no punishment and, perversely, one for which
politicians have long been rewarded.
Our constituents, in 1994, urged us to stop the pain. Republicans
proposed to do precisely that. Despite the defeat earlier this year of
a constitutional amendment that would have mandated a balanced budget,
my Republican colleagues have passed the first plan in 26 years that
produces bottom line equilibrium within a seven-year time frame.
I take no issue with the need for deep spending reductions, but I am
skeptical that we can achieve our goal while cutting taxes
simultaneously. It strikes me that this approach rivals driving with
one foot on the gas pedal while the other is on the brake.
The Federal Government currently expends far more money than it
collects, so that a tax cut can be paid for only by borrowing
additional money. Paying for tax cuts with borrowed money is
contradictory and self-defeating.
Balancing the budget is itself an effective tax cut. Interest on the
national debt costs the average household over $800 a year. Balancing
the budget more quickly and forgoing a tax cut paid for with borrowed
money would ease the burden of these hidden taxes. Balancing the budget
more quickly would also lower interest costs for mortgages and student
loans--saving families thousands of dollars.
I cannot support this conference report because, like the budget plan
considered by the Senate on October 27, it proposes to borrow $245
billion to pay for a tax cut that we cannot now afford. I strongly
support balancing the budget in seven years and realize that this
cannot be achieved without undertaking some difficult spending cuts. It
is my hope that Congress and the President can work together on a
bipartisan balanced budget plan.
Mr. SIMON. Mr. President, when nearly 500 college and university
presidents speak on an issue, Congress should stop and listen.
Yesterday, 472 presidents contacted President Clinton and the
congressional leadership to urge that competition be maintained in the
student loan programs. We should listen.
Colleges should be able to choose whether to participate in the
direct student loan program or the guarantee program. The bill we are
considering this evening does the opposite, forcing 1250 colleges out
of the direct loan program, and preventing hundreds of others who want
in from getting in.
As my colleagues will see from the list of presidents signing the
letter, free choice is not only the desire of colleges in the direct
loan program, but many in the guarantee program as well.
It is unfortunate that this issue has become so partisan that some of
my colleagues have turned against principles of competition, market
forces, and the elimination of red tape, and turned toward granting
monopolies and entitlements for bankers and middlemen--at the expense
of students, colleges, and taxpayers.
The letter from the college and university presidents speaks for
itself, and I ask unanimous consent that it be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. SIMON. Mr. President, I would also like to respond to a statement
made earlier by my colleague from Kansas, who chairs the Labor and
Human Resources Committee. She made the statement that the bill we are
considering today makes income-contingent repayment available to all
students.

[[Page S 17304]]

My colleague is mistaken. The bill gives this option to banks, not to
students. Section 4003(d) of the bill states clearly that this option
is offered ``at the discretion of the lender.'' In fact, few banks are
likely to use this discretion because of the difficulty of confirming
borrowers' incomes accurately. They also will no longer face the
competition from direct lending, which has caused lenders to be more
flexible in offering repayment options to borrowers. The reconciliation
bill not only eliminates schools from direct lending, it also also
places several new obstacles in the way of these borrowers who, under
current law, can get into direct lending in order to get access to
income-contingent repayment.
For these reasons, it is likely that fewer borrowers will have access
to this important repayment option, rather than more borrowers.
Mr. President, for these and many other reasons, I urge my colleagues
to oppose the conference report.

Exhibit 1

American Council on Education,

Washington, DC, November 16, 1995.
Hon. William Jefferson Clinton,
President of the United States, The White House, Washington,
DC.
Dear Mr. President: In the coming weeks, you and the
Congress will decide the fate of one of the most innovative
federal student aid programs: the Federal Direct Student Loan
Program. We are very concerned about efforts in Congress to
limit direct lending, which currently provides about 40
percent of all student loans. We oppose any provision that
would arbitrarily limit the ability of schools to participate
in direct lending, as we would oppose any effort to force
schools into direct lending against their wishes. We ask that
in your deliberations with the Congress about the future of
federal student loans, you retain institutional choice with
regard to the participation of colleges and universities in
either the direct student loan or the guaranteed student loan
(Federal Family Educational Loan) program.
We write as presidents and chancellors of colleges and
universities that are currently participating, or plan to
participate, in direct lending, as well as those that intend
to continue their participation in the guaranteed student
loan program. Maintaining the availability of both direct and
guaranteed loans is a sound policy that should be preserved,
because schools' ability to join either of the two programs
has improved the student loan process for all students and
schools, regardless of whether or not they participate in
direct lending.
Those of us who represent colleges and universities already
in direct lending can attest to the improvements it has
brought about for our institutions. We can report first-hand
on the benefits of direct lending for our students: the
simplicity of application, the speed of delivery of funds,
the disappearance of lines of students waiting to endorse
their checks at registration time, the precipitous drop in
the number of emergency loans issued to students waiting to
hear about their loans from banks and guarantors, and fewer
visits to financial aid offices. Students often borrow less
under direct lending because they know they can adjust their
loan amounts without repeating the entire application
process, and therefore only borrow what they believe they
need, not the maximum for which they are eligible. Students
will also reap the benefits of the income-contingent
repayment option, which is only possible through direct
leading. At the institutional level, direct lending has
eliminated redundant paperwork, reduced staff time allocated
to dealing with thousands of lenders and dozens of guarantors
and other intermediaries, and vastly improved our overall aid
delivery processes because it seamlessly integrates with
other federal aid programs.
Those of us who represent institutions that are satisfied
with the guaranteed student loan program also support the
continued availability of the direct loan program to
institutions. The competition created by direct lending has
induced banks and guarantors to improve the efficiency of
their delivery process, and has, for the first time, provided
the student loan industry with market-based incentives to
provide better service. The guaranteed student loan system
has improved more since the phase-in of direct lending two
years ago than it did over the more than two decades of its
existence prior to 1993. These improvements were brought
about by the fact that schools can now select the student
loan program that provides them with the best service.
Capping or otherwise limiting the direct loan program would
undermine the market-based incentives that have so
dramatically improved the guaranteed student loan system. The
student loan system needs more competition, not less.
The current direct lending legislation was enacted as a
bipartisan compromise a mere two years ago. Some 1,400
schools, relying in good faith upon what was presented to
them as a major federal initiative, have invested substantial
institutional resources to implement a program that they
believed would better meet the needs of their students. These
same schools, and several hundred others that have been
planning to join the program in its third year, now confront
the prospect of massive disruptions to their financial aid
operations and their institutional planning. If direct
lending is capped, many of these schools would be required to
commit new institutional resources to pay for yet another
overhaul of their loan delivery system.
Schools now have the option of participating in direct
lending or the guaranteed student loan program based on their
assessment of which program works best for their students.
This has provided a strong incentive to both the Department
of Education and to the student loan industry to improve the
quality of their service to borrowers and schools. This is
precisely the outcome that the bipartisan architects of
current direct lending law intended in reforming the student
loan system two years ago. We urge you to allow the forces of
competition to continue to determine what percentage of the
student loan market each program captures by retaining the
current direct lending law.
Sincerely,
Submitted on behalf of the following colleges and
universities:

alabama

Alabama Agricultural & Mechanical University, Virginia A.
Caples, Interim President.
Alabama State University, William H. Harris, President.
Auburn University, William V. Muse, President.
Auburn University at Montgomery, Guin Nance, President.
Jacksonville State University, Harold J. McGee, President.
Jefferson State Community College, Judy M. Merritt,
President.
Stillman College, Cordell Wynn, President.
Tuskegee University, Benjamin Payton, President.
University of North Alabama, Robert L. Potts, President.
Wallace Community College-Selma, Julius R. Brown,
President.

arizona

Arizona State University, Lattie F. Coor, President.
Chandler Gilbert Community College Center, Margaret P.
Hogan, Acting President.
Devry Institute of Technology-Phoenix, James A. Dugan,
President.
Paradise Valley Community College, Raul Cardenas,
President.

arkansas

Hendrix College, Ann H. Die, President.
Philander Smith College, Myer L. Titus, President.
Red River Technical College, Johnny Rapert, President.
University of Central Arkansas, Winfred L. Thompson,
President.
Williams Baptist College, Jerol Swaim, President.

california

California Academy of Merchandising, Art, & Design, Gary D.
Kerber, President.
California State Polytechnic University, Pomona, Bob H.
Suzuki, President.
California State University, Bakersfield, Tomas A.
Arciniega, President.
California State University, Chico, Manuel A. Esteban,
President.
California State University, Fresno, John D. Welty,
President.
California State University, Fullerton, Milton A. Gordon,
President.
California State University, Sacramento, Donald Gerth,
President.
California State University, Stanislaus, Marvalene Hughes,
President.
Coast Community College District, William M. Vega,
Chancellor.
College of Alamenda, George Herring, President.
Contra Costa College, D. Candy Rose, President.
Cypress College, Christine Johnson, President.
Fresno City College, Brice W. Harris, President.
Fullerton College, Vera M. Martinez, President.
Los Angeles City College, Jose Robledo, President.
Los Angeles Mission College, William E. Norlund, President.
Merced College, E. Jan Moser, Superintendent and President.
Napa Valley College, Diane E. Carey, Superintendent and
President.
National University, Jerry C. Lee, President.
Pasadena City College, Jack Scott, President.
San Diego City College, Larry J. Brown, Acting President.
San Francisco State University, Robert Corrigan, President.
Santa Barbara City College, Peter MacDougall, President.
Santa Clara University, Rev. Paul Locatelli, S.J.,
President.
Sonoma State University, Ruben Arminana, President.
Southwestern College, Joseph M. Conte, Superintendent and
President.
University of California, Berkeley, Chang-Lin Tien,
Chancellor.
University of California, Davis, Larry N. Vanderhoef,
Chancellor.
University of California, Irvine, Laurel L. Wilkening,
Chancellor.
University of California, Los Angeles, Winston C. Body,
Vice Chancellor.
University of California, Riverside, Raymond L. Orbach,
Chancellor.

[[Page S 17305]]

University of California, San Francisco, Joseph B. Martin,
Chancellor.
University of California, Santa Barbara, Henry T. Yang,
Chancellor.
University of California, Santa Cruz, Karl S. Pister,
Chancellor.
University of San Francisco, Rev. John Schlegel, S.J.,
President.
West Hills Community College, Frank P. Gornick, President.
West Los Angeles College, Evelyn Wong, President.

colorado

Colorado State University, Albert C. Yates, President.
Community College of Denver, Byron McClenney, President.
Iliff School of Theology, Donald E. Messer, President.
Regis University, Rev. Michael J. Sheeran, S.J., President.
University of Colorado at Boulder, Roderic B. Park,
Chancellor.

connecticut

Central Connecticut State University, Merle W. Harris,
Interim President.
Western Connecticut State University, James R. Roach,
President.

delaware

Delaware State University, William B. DeLauder, President.
Delaware Technical & Community College System, Orlando
George, Jr., President.
University of Delaware, David Roselle, President.

district of columbia

American University, Benjamin Ladner, President.
Catholic University of America, Brother Patrick Ellis, FSC,
President.
University of The District of Columbia, Tilden Lemelle,
President.

florida

Barry University, Sister Jeanne O'Laughlin, O.P.,
President.
Bethune-Cookman College, Oswald P. Bronson, Sr., President.
Central Florida Community College, William Campion,
President.
Edward Waters College, Jesse Burns, President.
Keiser College of Technology, Arthur Keiser, President.
Palm Beach Atlantic College, Paul Corts, President.
Rollins College, Rita Bornstein, President.
Santa Fe Community College, Lawrence Tyree, President.
Southern College, Daniel F. Moore, President.
University of Florida, John V. Lombardi, President.
University of South Florida, Betty Castor, President.
University of West Florida, Morris L. Marx, President.

Georgia

Atlanta Christian College, R. Edwin Groover, President.
Bauder College, Gary Kerber, President.
Clark Atlanta University, Thomas W. Cole, Jr., President.
DeKalb College, Jacquelyn M. Belcher, President.
Devry Institute of Technology, Ronald Bush, President.
Fort Valley State College, Oscar L. Prater, President.
Georgia College, Edwin Speir, President.
Georgia Southern University, Nicholas Henry, President.
Interdenominational Technological Center, James Costen,
President.
Mercer University Main, R. Kirby Godsey, President.
Morris Brown College, Samuel D. Jolly, Jr., President.
Savannah State College, John T. Wolfe, Jr., President.
Southern College of Technology, Stephen R. Cheshier,
President.
Spelman College, Johnnetta B. Cole, President.
Valdosta State College, Hugh C. Bailey, President.
Wesleyan College, Robert Ackerman, President.

hawaii

University of Hawaii at Hilo, Kenneth L. Perrin,
Chancellor.
University of Hawaii Kauai Community College, David Iha,
Provost.

Idaho

Boise State University, Charles P. Ruch, President.
College of Southern Idaho, Gerald R. Meyerhoeffer,
President.
University of Idaho, Thomas O. Bell, Interim President.

Illinois

Bradley University, John R. Brazil, President.
College of St. Francis, James Doppke, President.
Columbia College, John B. Duff, President.
DeVry Institute of Technology-Chicago, E. Arthur Stunard,
President.
DeVry Institute of Technology-Addison, Jerry R. Dill,
President.
Eastern Illinois University, David Jorns, President.
Greenville College, Robert E. Smith, President.
Highland Community College, Ruth Mercedes Smith, President.
Illinois Central College, Thomas K. Thomas, President.
Illinois Valley Community College, Alfred Wisgoski,
President.
Lincoln College, Jack D. Nutt, President.
Loyola University Chicago, Rev. John J. Piderit, S.J.,
President.
Morrison Institute of Technology, Richard C. Parkinson,
President.
Northwestern Business College, Lawrence Schumacher,
President.
Parkland College, Zelma M. Harris, President.
Southern Illinois University, Ted Sanders, Chancellor.
Southern Illinois University at Edwardsville, Nancy Belck,
President.
St Joseph College of Nursing, Virginia Keck, President.
University of Chicago, Hugo F. Sonnenschein, President.
University of Illinois, James J. Stukel, President.
University of Illinois at Springfield, Naomi B. Lynn,
Chancellor.
University of Illinois at Chicago, David C. Broski, interim
Chancellor.
Wilbur Wright College, Raymond Le Fevour, President.
William Rainey Harper College, Paul N. Thompson, President.

indiana

Ball State University, John E. Worthen, President.
Commonwealth Business College, Steven C. Smith, President.
Earlham College, Richard J. Wood, President.
Goshen College, Victor Stolozfus, President.
Indiana University at Bloomington, Kenneth R.R. Gros Louis,
Vice President and Chancellor.
Indiana University at South Bend, Lester C. Lamon, Acting
Chancellor.
Indiana University System, Myles Brand, President.
Manchester College, Parker G. Marden, President.
Rose-Hulman Institute of Technology, Samuel F. Hulbert,
President.
Saint Francis College, Sister M. Elise Kriss, OSF,
President.
Saint Meinrad College, Rev. Eugene Hensell, O.S.B.,
President-Rector.
Valparaiso University, Alan Harre, President.

iowa

Graceland College, William Higdon, President.
Iowa State University, Martin C. Jischke, President.
Luther College, David J. Roslien, Interim President.
Marshalltown Community College, William M. Simpson, Dean of
the Dean.
Mount Mercy College, Thomas Feld, President.
North Iowa Area Community College, David L. Buettner,
President.
Northeast Iowa Community College, Don Roby, President.
University of Iowa, Peter Nathan, Acting President.
University of Northern Iowa, Robert D. Koob, President.

kansas

Cloud County Community College, James D. Ihrig, President.
Highland Community College, Elizabeth E. Stevens,
President.
Kansas Wesleyan University, Marshall P. Stanton, President.
McPherson College, Paul W. Hoffman, President.
Southwestern College, Carl Martin, President.
University of Kansas, Edward Meyen, Executive Vice
Chancellor.

kentucky

Kentucky State University, Mary L. Smith, President.
Morehead State University, Ronald Eaglin, President.
Sullivan College, A.R. Sullivan, President.
University of Kentucky, Charles Wethington, Jr., President.
Western Kentucky University, Thomas Meredith, President.

louisiana

Elaine P. Nunez Community College, Carol S. Hopson,
President.
Southern University and A & M College, Marvin Yates,
Chancellor.
Xavier University of Louisiana, Norma C. Francis,
President.

maine

Bates College, Donald W. Harward, President.
Colby College, William Cotter, President.
Thomas College, George R. Spann, President.
University of Maine System, Robert L. Woodbury, Chancellor.
University of Maine Presque Isle, W. Michael Easton,
President.
University of Southern Maine, Richard L. Pattenaude,
President.

maryland

Bowie State University, Nathaniel Pollard Jr., President.
Coppin State College, Calvin Burnett, President.
Frostburg State College, Catherine R. Gira, President.
Garrett Community College, Stephen Herman, President.
Hood College, Shirley, D. Peterson, President.
Johns Hopkins University, Daniel Nathans, President.
Loyola College in Maryland, Rev. Harold Ridley, S.J.,
President.

[[Page S 17306]]

Salisbury State College, William Bellavance, President.
Towson State University, Hoke L. Smith, President.
University of Maryland System, Don Langenberg, Chancellor.
University of Maryland Eastern Shore, William P. Hytche,
President.
University of Maryland University College, T. Benjamin
Massey, President.

massachusetts

Amherst College, Tom Gerety, President.
Berklee College of Music, Lee Eliot Berk, President.
Boston University, John R. Silber, President.
Brandeis University, Jehuda Reinharz, President.
Bridgewater State College, Adrian Tinsley, President.
College of the Holy Cross, Rev. Gerard Reedy, S.J.,
President.
Emerson College, Jacqueline Liebergott, President.
Fitchburg State College, Michael Riccards, President.
Franklin Institute of Boston, Richard D'Onofrio, President.
Harvard University, Neil, Rudenstine, President.
Holyoke Community College, David M. Bartley, President.
Massachusetts College of Art, William O'Neil, President.
Massachusetts Institute of Technology, Charles M. Vest,
President.
Massachusetts Maritime Academy, Peter M. Mitchell,
President.
Mount Ida College, Bryan Carlson, President.
Mt. Holyoke College, Peter Berek, President.
New England College of Optometry, Larry R. Clausen,
President.
North Adams State College, Thomas Aceto, President.
Quinsigamond Community College, Sandra L. Kurtinitis,
President.
Smith College, Ruth J. Simmons, President.
Stonehill College, Rev. Bartley MacPhaidin, C.S.C.,
President.
Tufts University, John DiBiaggio, President.
University of Massachusetts Lowell, William T. Hogan,
Chancellor.
University of Massachusetts System, Sherry H. Penny,
President.
Westfield State College, Ronald L. Applbaum, President.
Wheaton College, Dale Rogers Marshall, President.
Williams College, Harry C. Payne, President.

michigan

Alma College, Alan Stone, President.
Alpena Community College, Donald L. Newport, President.
Andrews University, Niels-Erik Andreasen, President.
Baker College of Auburn Hills, Sandra Kay Krug, President.
Baker College of Jackson, Jack Bunce, President.
Baker College of Mount Clemens, Rodolfo Morales, Jr.,
President.
Baker College of Muskegon, Rick E. Amidon, President.
Baker College of Owosso, Denise A. Bannon, President.
Baker College of Port Huron, Donald Torline, President.
Baker College System, Edward Kurtz, President.
Calvin College, Gaylen J. Byker, President.
Central Michigan University, Leonard Plachta, President.
Ferris State University, William A. Sederburg, President.
Grand Valley State University, Arend D. Lubbers, President.
Henry Ford Community College, Andrew A. Mazzara, President.
Hope College, John H. Jacobson, President.
Kalamazoo College, Lawrence D. Bryan, President.
Kellogg Community College, Paul R. Ohm, President.
Lake Superior State University, Robert Arbuckle, President.
Lansing Community College, Abel B. Sykes, President.
Lawrence Institute of Technology, Charles M. Chambers,
President.
Michigan State University, M. Peter McPherson, President.
Michigan Technological University, Curtis J. Tompkins,
President.
Northen Michigan University, William E. Vandament,
President.
Oakland University, Gary D. Russi, Interim President.
University of Michigan-Ann Arbor, James Duderstadt,
President.
University of Michigan-Dearborn, James C. Renick,
Chancellor.
University of Michigan-Flint, Charles Nelms, Chancellor.
Wayne State University, David Adamany, President.
Western Michigan University, Diether H. Haenicke,
President.

minnesota

Bemidji State University, James Bensen, President.
Gustavus Adolphus College, Axel D. Steuer, President.
Hamline University, Larry G. Osnes, President.
Minnesota State Colleges and Universities System, Judith S.
Eaton, Chancellor.
Rasmussen College-St. Cloud, Kathleen Rau Szczech,
President.
University of Minnesota-Crookston, Donald Sargeant,
Chancellor.
University of Minnesota-Duluth, Kathryn A. Martin,
Chancellor.
University of Minnesota-Twin Cities, Nils Hasselmo,
President.

mississippi

Alcorn State University, Clinton Bristow, Jr., President.
Delta State University, Kent Wyatt, President.
Mary Homes College, Sammie Potts, President.
Mississippi University for Women, Clyda S. Rent, President.
Mississippi Valley State University, William W. Sutton,
President.
Tougaloo College, Joe A. Lee, President.

missouri

Central Missouri State University, Ed Elliott, President.
Culver-Stockton College, Edwin B. Strong, Jr., President.
Deaconess College of Nursing, Elizabeth Krekorian,
President.
Lincoln University, Wendell G. Rayburn, Sr., President.
Maryville University of Saint Louis, Keith Lovin,
President.
Missouri Southern State College, Julio Leon, President.
Northwest Missouri State University, Dean L. Hubbard,
President.
Rockhurst College, Rev. Thomas J. Savage, S.J., President.
Saint Louis University, Rev. Lawrence Biondi, S.J.,
President.
St. Louis Community College, Gwendolyn W. Stephenson,
President.
University of Missouri-Columbia, Charles Kiesler,
Chancellor.
Vatterott College, John C. Vatterott, President.
William Jewell College, W. Christian Sizemore, President.

montana

Carroll College, Matthew J. Quinn, President.
Montana State University, Michael Malone, President.
University of Montana, George A. Dennison, President.

nebraska

Chadron State College, Samuel H. Rankin, President.
Dana College, Myrvin F. Christopherson, President.
Midland Lutheran College, Carl Hansen, President.
University of Nebraska-Lincoln, Joan R. Leitzel, Interim
Chancellor.

nevada

University of Nevada Las Vegas, Carol C. Harter, President.

new hampshire

Daniel Webster College, Hannah McCarthy, President.
McIntosh College, Robert DeColfmacker, President.

new jersey

Berkeley College of Business Garret Mount, Kevin L. Luing,
President.
Burlington County College, Robert C. Messina, Jr.,
President.
Camden County College, Phyllis Della Vecchia, President.
Jersey City State College, Carlos Hernandez, President.
Monmouth University, Rebecca Stafford, President.
New Jersey Institute of Technology, Saul Fenster,
President.
Ramapo College of New Jersey, Robert Scott, President.
Richard Stockton College of New Jersey, Vera King Farris,
President.
Rowan College of New Jersey, Herman D. James, President.
Rutgers, State University of New Jersey, Francis Lawrence,
President.
Saint Peter's College, Rev. James N. Loughran, S.J.,
President.
Seton Hall University, Rev. Thomas R. Peterson, O.P.,
Chancellor.
Trenton State College, Harold W. Eickhoff, President.
William Paterson College of New Jersey, Arnold Speert,
President.

new mexico

New Mexico Junior College, Charles D. Hays, President.
University of New Mexico, Richard Peck, President.

new york

Bank Street College of Education, Augusta Kappner,
President.
Berkeley College, Rose Mary Healy, President.
Berkeley College of New York City, Robert J. Hurd,
President.
Clarkson University, Dennis G. Brown, President.
College of New Rochelle, Sister Dorothy Ann Kelly, O.S.U.,
President.
Cornell University, Hunter R. Rawlings III, President.
City University of New York, W. Ann Reynolds, Chancellor.
CUNY Borough of Manhattan Community College, Antonio Perez,
President.
CUNY Brooklyn College, Vernon Lattin, President.
CUNY City College, Yolanda T. Moses, President.

[[Page S 17307]]

CUNY College of Staten Island, Marlene Springer, President.
CUNY Graduate School & University Center, Frances Degen
Horowitz, President.
CUNY Herbert H. Lehman College, Ricardo Fernandez,
President.
CUNY Medgar Evers College, Edison Jackson, President.
CUNY New York City Technical College, Charles W. Merideth,
President.
CUNY Queens College, Allen Lee Sessoms, President.
CUNY York College, Thomas K. Minter, President.
Dowling College, Victor P. Meskill, President.
Fordham University, Rev. Joseph A. O'Hare, S.J., President.
LeMoyne College, Rev. Robert A. Mitchell, S.J., President.
Long Island University, David Steinberg, President.
Marymount College, Sister Brigid Driscoll, R.S.H.M.,
President.
New York College of Podiatric Medicine, Louis L. Levine,
President.
Onondaga Community College, Bruce H. Leslie, President.
Pace University New York Campus, Patricia O' Donnell Ewers,
President.
Pace University Pleasantville-Briarcliff Campus, Patricia
O'Donnell Ewers, President.
Rensselaer Polytechnic Institute, R. Byron Pipes,
President.
Roberts Wesleyan College, William C. Crothers, President.
Rochester Institute of Technology, Albert J. Simone,
President.
Schenectady County Community College, Gabriel Basil,
President.
St. Lawrence University, Patti McGill Peterson, President.
SUNY at Binghamton, Lois B. DeFleur, President.
SUNY at Buffalo, William R. Greiner, President.
SUNY College at Brockport, John Van de Wetering, President.
SUNY College at Cortland, Judson H. Taylor, President.
SUNY College at Plattsburgh, Horace Judson, President.
SUNY College at Potsdam, William C. Merwin, President.
SUNY College of Agriculture & Technology at Morrisville,
Frederick W. Woodward, President.
SUNY College of Technology at Canton, Joseph L. Kennedy,
President.
SUNY Herkimer County Community College, Ronald F. Williams,
President.
SUNY Hudson Valley Community College, Joseph Balmer,
President.
SUNY Institute of Technology At Utica Rome, Peter J. Cayan,
President.
SUNY Institute of Technology At Delhi, Mary Ellen Duncan,
President.
SUNY Monroe Community College, Peter A. Spina, President.
Teachers College, Columbia University, Arthur Levine,
President.
University of Rochester, Thomas H. Jackson, President.

north carolina

Applachian State University, Francis T. Borkowski,
Chancellor.
Belmont Abbey College, Robert A. Preston, President.
Fayetteville State University, Donna J. Benson, Interim
Chancellor.
Elizabeth City State University, M.L. Burnim, Interim
Chancellor.
Livingstone College, Roy D. Hudson, Interim President.
North Carolina Agricultural & Technical State University,
Edward Fort, Chancellor.
North Carolina School of The Arts, Alexander Ewing,
Chancellor.
Saint Augustine's College, Bernard W. Franklin, President.
University of North Carolina at Asheville, Patsy B. Reed,
Chancellor.
University of North Carolina Charlotte, James H. Woodward,
Chancellor.
Western Carolina University, John W. Bardo, Chancellor.
Winston-Salem State University, Gerald McCants, Interim
Chancellor.

ohio

Ashland University, G. William Benz, President.
Bowling Green State University, Sidney A. Ribeau,
President.
Case Western Reserve University, Agnar Pytte, President.
Cleveland Institute of Music, David Cerone, President.
College of Wooster, R. Stanton Hales, President.
Cuyahoga Community College, Jerry Sue Thornton, President.
Denison University, Michelle Myers, President.
Devry Institute of Technology, Galen H. Graham, Acting
President.
Hiram College, G. Benjamin Oliver, President.
Kent State University, Carol Cartwright, President.
Miami University, Paul G. Risser, President.
Ohio University, Robert Glidden, President.
Ohio Wesleyan University, Thomas B. Courtice, President.
Southeastern Business College, Robert Shirey, President.
Southern State Community College, Lawrence N. Dukes,
President.
University of Findlay, Kenneth E. Zirkle, President.
University of Rio Grande, Barry M. Dorsey, President.
University of Toledo, Frank E. Horton, President.
Xavier University of Ohio, Rev. James E. Hoff, S.J.,
President.

oklahoma

Langston University, Ernest L. Holloway, President.
Oklahoma State University, Harry Birdwell, Vice President,
Business & External Relations.
St. Gregory's College, Frank Pfaff, President.

oregon

Eastern Oregon State College, David Gilbert, President.
George Fox College, Edward Stevens, President.
Portland Community College, Daniel F. Moriarty, President.
Southern Oregon State College, Stephen J. Reno, President.
University of Oregon, Dave Frohnmayer, President.
Western Oregon State College, Betty J. Youngblood,
President.

pennsylvania

Beaver College, Bette E. Landman, President.
Carnegie Mellon University, Robert Mehrabian, President.
Cheyney University of Pennslyvania, Donald L. Mullen,
President.
CHI Institute, Joseph F. Colyar, President.
Franklin and Marshall College, Richard Kneedler, President.
ICM School of Business, Gary Kerber, President.
Lebanon Valley College, John Synodinos, President.
Lehigh Carbon Community College, James R. Davis, President.
Lincoln University, Niara Sudarkasa, President.
Northampton Community College, Robert Kopecek, President.
Philadelphia College of Pharmacy & Science, Philip Gerbino,
President.
Robert Morris College, Edward A. Nicholson, President.

puerto rico

Inter American University of Puerto Rico, Jose R. Gonzalez,
President.
Pontifical Catholic University of Puerto Rico, Rev. Tosello
Giangiacomo, C.S.Sp., President.
University of Puerto Rico Humacao, Roberto Marrero-
Corletto, Chancellor.
University of Puerto Rico System, Norman Maldonado,
President.
University of The Sacred Heart, Jose Jaime Rivera,
President.

rhode island

Brown University, Vartan Gregorian, President.
Community College of Rhode Island, Edward J. Liston,
President.
Rhode Island School of Design, Roger Mandle, President.
University of Rhode Island, Bob Roth, Special Assistant to
the President.

south carolina

Benedict College, David H. Swinton, President.
Claflin College, Henry Tisdale, President.
College of Charleston, Alexander M. Sanders, Jr.,
President.
Greenville Technical College, Thomas E. Barton, President.
Morris College, Luns C. Richardson, President.
South Carolina State University, Leroy Davis, Interim
President.
The Citadel, Claudius Watts, President.
Trident Technical College, Mary Thornley, President.
Winthrop University, Anthony J. DiGiorgio, President.

south dakota

National College, Jerry L. Gallentine, President.

tennessee

Crichton College, Larry R. Brooks, President.
Fisk University, Henry Ponder, President.
LeMoyne-Owen College, Earl Vinson, Senior Vice President.
Middle Tennessee State University, James Walker, President.
Motlow State Community College, A. Frank Glass, President.
Tennessee State University, James A. Hefner, President.
Tennessee Technological University, Angelo A. Volpe,
President.
The University of Tennessee at Chattanooga, Frederick W.
Obear, Chancellor.

texas

Austin College, Oscar Page, President.
Brookhaven College, Walter G. Bumphus, President.
Del Mar College, Terry L. Dicianna, President.
Devry Institute of Technology, Francis V. Cannon,
President.
East Texas State University, Jerry P. Morris, President.
Houston Baptist University, E.D. Hodo, President.
Palo Alto College, Joel E. Vela, President.
Prairie View A & M University, Charles Hines, President.
Richland College, Stephen K. Mittelstet, President.
Southwest Texas State University, Jerome H. Supple,
President.

[[Page S 17308]]

Tarrant County Junior College District, C. A. Roberson,
Chancellor.
University of North Texas, Alfred F. Hurley, Chancellor.
University of North Texas Health Science Center, Alfred F.
Hurley, Chancellor.
University of Texas at Dallas, Franklyn G. Jenifer,
President.

vermont

Castleton State College, Martha K. Farmer, President.
Community College of Vermont, Barbara Murphy, Interim
President.
Johnson State College, Robert Hahn, President.
Lyndon State College, Peggy Williams, President.
Middlebury College, John M. McCardell, Jr., President.
University of Vermont, Thomas P. Salmon, President.
Vermont State College System, Charles I. Bunting,
Chancellor.
Vermont Technical College, Robert Clarke, President.

virginia

Central Virginia Community College, Belle S. Wheelan,
President.
Hampton University, William R. Harvey, President.
Hollins College, Jane Margaret O'Brien, President.
Norfolk State University, Harrison B. Wilson, President.
Northern Virginia Community College, Richard Ernst,
President.
Old Dominion University, Jo Ann Gora, Acting President.
Virginia Commonwealth University, Eugene P. Trani,
President.
Virginia State University, Eddie N. Moore, President.
Wytheville Community College, William Snyder, President.

washington

Central Washington University, Ivory V. Nelson, President.
City University, Michael Pastore, President.
Spokane Community College, James H. Williams, President.
University of Washington, Richard L. McCormick, President.
Washington State University, Samuel H. Smith, President.
Western Washington University, Karen W. Morse, President.

west virginia

Alderson Broaddus College, Stephen E. Markwood, President.
Bluefield State College, Robert E. Moore, President.
Fairmont State College, Robert J. Dillman, President.
Marshall University, J. Wade Gilley, President.
State College System of West Virginia, Clifford M. Trump,
Chancellor.
West Liberty State College, Donald C. Darnton, Interim
President.
West Virginia State College, Hazo W. Carter, Jr.,
President.
West Virginia University, David C. Hardesty, Jr.,
President.
Wheeling Jesuit College, Rev. Thomas Acker, S.J.,
President.

wisconsin

Lakeland College, David Black, President.
Lawrence University, Richard Warch, President.
Marquette University, Rev. Albert DiUlio, S.J., President.
Northland College, Robert Rue Parsonage, President.
Ripon College, Paul B. Ranslow, President.
St. Norbert College, Thomas A. Manion, President.
University of Wisconsin System, Katharine Lyall, President.
University of Wisconsin-Eau Claire, Larry Schnack,
Chancellor.
University of Wisconsin-La Crosse, Judith L, Kuipers,
Chancellor.
University of Wisconsin-Milwaukee, John H. Schroeder,
Chancellor.
University of Wisconsin-Stout, Charles W. Sorenson,
Chancellor.
University of Wisconsin-Superior, Jan G. Womack,
Chancellor.
Mr. PRESSLER. Mr. President, the Balanced Budget Act of 1995 extends
the FCC's auction authority for the first time to any situation in
which the FCC must choose between mutually exclusive applications--
including applications for broadcast facilities. For this reason, Mr.
President, I want to take just a moment to explain the actions and
intentions of the Committee on Commerce, Science, and Transportation. I
want all my colleagues to understand the auction authority extends only
to mutually exclusive applications for new facilities not already
pending at the FCC.
Applications for renewal, modification, or upgrade of existing
facilities are not covered under this provision. Similarly, the
committee does not intend--in cases in which an application has already
been accepted by the FCC--that auctions be used to resolve that
proceeding. I understand that, as the result of a court decision, the
FCC has not technically accepted certain applications.
The committee's intention is that if any application in a proceeding
has been accepted, the proceeding will be resolved under the provisions
of existing law.
Mr. LAUTENBERG. Mr. President, when the roll is called on this budget
reconciliation conference report, I will be voting yes. But not for
this bill.
Instead, I will be voting yes for our seniors--yes for our students--
and yes for the middle class.
And I will be voting no on the conference report.
I will be voting no on massive Medicare cuts to finance tax breaks
for the wealthy.
I will be voting no on huge tax breaks for the rich and the special
interests.
I will be voting no on devastating cuts in nursing home care for
seniors and the disabled.
I will be voting no on increased taxes for working people.
I will be voting no on ending the safety net for children.
I will be voting no on the basic thrust of this legislation--that we
must balance the budget on the backs of working families and senior
citizens, while handing out billions in tax breaks for the rich and
powerful.
This bill represents the extremes of the Republican membership.
Mr. President, when you get right down to it, this bill forces all of
us to answer a simple question: ``Whose side are you on?''
Are you on the side of middle-class Americans? Are you on the side of
our senior citizens, of middle-class families struggling to send their
children to college, and of lower income working families?
Or are you on the side of the wealthy and the special interests?
The Republican reconciliation bill is paydirt for the rich and the
special interests and senior citizens and working class families get
stuck footing the bills.
This is an outrage--and we Democrats are going to fight it as a basic
matter of principle.
We saw what happened with the continuing resolution when the public
caught on to the scheme. Under the spotlight, the Republicans blinked,
they retreated, they ran. They wanted to escape the public wrath and
quickly abandoned their deep principles for political cover.
This bill makes the biggest cuts in the history of Medicare.
And the Republicans build their case around a false premise.
They argue that in order to save Medicare, we must destroy its
fundamental mission. This is simply not true.
And they ought to be honest with the American people about the two
major Republican falsehoods.
The first false statement that the Republicans make is that we need
$270 billion to save Medicare. This is simply untrue.
The Republicans are using this $270 billion to finance their $245
billion in tax breaks for the rich folk.
It is no coincidence that the Medicare cuts are $270 billion and the
tax breaks for the wealthy total $245 billion.
These figures are remarkably similar because one is being used to
finance the other. They are taking from our senior citizens who paid
the bills, signed the contract, and weathered the storms. And they're
giving it back to the wealthy and the special interests.
The second Republican falsehood is that we need to cut $270 billion
to make Medicare solvent. Not true. The chief HHS Medicare actuary has
stated that we only need $89 billion in savings to make Medicare
solvent until the end of 2006.
Mr. President, let me just give you some examples of what kind of tax
breaks these Medicare cuts are paying for:
Under this bill, approximately 2,000 large corporations will get a
tax break of $2 million each because of changes in the alternative
minimum tax. This is outrageous.
In addition, this bill contains hundreds of millions of dollars in
giveaways to oil companies.
Finally, the capital gains tax cut included in this bill is a tax
break for the super rich. Anyone can claim this tax break. Even
millionaires and billionaires can get this tax break.
Mr. President, I tried to draw a line on the tax breaks and put the
money

[[Page S 17309]]
back into Medicare and Medicaid. I offered an amendment to the
reconciliation bill that would have precluded the tax breaks from going
to those who make over $1 million per year. That's the top one-tenth of
one percent of all taxpayers.
I thought this amendment would pass unanimously. I thought that we
all could agree that millionaires and billionaires do not need a tax
break when we are cutting Medicare--especially when 75 percent of all
Medicare recipients earn under $25,000 per year.
But no--52 of the 53 Republican Senators voted against my amendment.
In essence, they voted to cut Medicare to provide tax breaks for
millionaires and billionaires.
Mr. President, Medicare is not just a health insurance program.
Medicare is a commitment that we have made to our citizens. It is a
promise--for those who work hard their entire lives--that your medical
needs will be taken care of when you retire.
But this Republican budget uses the Medicare Program as a slush fund
for the tax breaks for the wealthy.
I urge my colleagues to say no to Medicare cuts to pay for tax breaks
for the rich.
Let's reject the Republican budget reconciliation bill--let's start
over.
We can put together a compromise bill that moves toward a balanced
budget but does not destroy our Medicare Program. But this is not such
a bill.
Unfortunately, this is a bill that sticks it to ordinary Americans,
and lavishes huge breaks for the rich and the special interests. I
think that's wrong.
I say: It's time, for once, to put the middle class first and defeat
this bill.
I yield the floor.
Mrs. HUTCHISON. Mr. President, for the information of the Senate, I
would like to discuss with the chairman of the Committee on Energy and
Natural Resources, Mr. Murkowski, the provisions of the Budget
Reconciliation Conference Report that relate to the sale of oil from
the Weeks Island Strategic Petroleum Reserve storage facility. This
facility is located in Louisiana.
I say to Chairman Murkowski, a provision of the conference report
requires the sale by the Department of Energy of oil from the Weeks
Island facility. It is my understanding that the Weeks Island facility
has suffered irreparable damage from one and perhaps two fractures, and
that oil within this facility is in danger of leaking into Louisiana's
underground aquifer. It is also my understanding that as a result of
these fractures, the oil contained in Weeks Islands must be removed and
the facility decomissioned. Is that correct?
Mr. MURKOWSKI. Mr. President, the Senator from Texas is correct. The
leaks she refers to require the oil contained in the Weeks Island
facility to be removed, and the facility to be decommissioned. There is
no choice, and the Department of Energy already has that process
underway. It is only with the greatest hesitancy that we are requiring
the sale of any oil from the Strategic Petroleum Reserve. As the
Senator from Texas knows, the Strategic Petroleum Reserve is essential
for the protection of our energy security in the event of oil supply
interruption, such as the ones we suffered through in 1973 and 1979.
That is why the conference report contains provisions which provide
funding for the replacement of this oil in the Strategic Petroleum
Reserve.
Mrs. HUTCHISON. I thank the Chairman for that response. I would also
like to know if the conference report contains any language to assure
domestic oil producers, particularly independents located in the State
of Texas, that the sale of this oil will not be done by the Department
of Energy in such a manner as to disrupt the oil market or to adversely
affect oil prices?
Mr. MURKOWSKI. Mr. President, the answer to the Senator's question is
yes. When the oil is sold from the Weeks Island facility, which is
located in Louisiana, the Department of Energy is directed to so do in
a manner that does not disrupt the marketplace or have any noticeable
impact on prices. Perhaps the best thing to do is to quote from the
statutory language contained in conference report: ``The Secretary
shall, to the greatest extent practical, sell oil from the reserve in a
manner that minimizes the impact of such sales upon supply levels and
market forces.''.
Mrs. HUTCHISON. Mr. President, I thank Senator Murkowski.
Mr. WARNER. Mr. President, I have been listening with a great deal of
interest to the speakers on both sides of the aisle as the Balanced
Budget Act of 1995 has been discussed. Although the President has
indicated that he will veto this conference report when he receives it,
I am proud to support this document which follows through on our
commitment to balance the Nation's budget by the year 2002, protect
Social Security, and save Medicare from threatened bankruptcy. America
has not had a balanced budget in over a quarter century.
While we are apparently debating a bill that has no future, there
will be successor after successor with the same basic goals until we
win. Yes, this will get a veto from the President, but at the same
time, it will signal the beginning of a final dialog with the
administration on a final Balanced Budget Act of 1995.
America's financial markets have reflected the approval of the
Republican efforts during the past week. The phone calls and fax
messages from my constituents statewide have overwhelmingly supported
the position taken by Republicans and reflected in this package. As I
indicated when the Senate considered this bill, this is not just a
budget for another year. This is not a package of routine legislative
changes. This is a historic commitment to America that deficit spending
is about to come to an end, no later than the year 2002, and it has
been brought about during the first year of the Republican majority in
the Congress.
The net result of a balanced budget will be lower interest rates for
years to come, and as many as 6 million new jobs. The reforms in this
bill will give the States more control over critical entitlement
programs. I strongly support these initiatives which will let the
States decide how best to serve their own citizens. What is best for my
State of Virginia is not necessarily the same as what is best for
another State, and this balanced budget act will move power and money
out of Washington, back to State governments and local communities
where it belongs.
When this balanced budget act is finally signed into law, and it will
be, we will have identified the path, but each year we will have to
make spending decisions that will keep us on the road that is being
defined here today. If emergencies occur, we will have to offset their
costs with spending reductions. Those budget decisions will be as
difficult in the year 2000 as they are this year, but this conference
report is a commitment by the Republicans, and eventually, by the
entire Congress, that we will stay the course.
This is a momentous vote, and I urge my colleagues to roll up your
sleeves, get ready for hard work, and pass this balanced budget act.
The Republican train is here, and it is time to get aboard for a trip
to fiscal responsibility. We have made the commitment to America and we
will carry through on it.

nursing home standards

Mr. COHEN. Mr. President, I rise to comment on the need to strengthen
our commitment to strong nursing home standards in the budget
reconciliation bill before us. The conference report on the budget bill
has come a long way toward restoring current Federal nursing home
standards and strong Federal and State enforcement of protections for
nursing home residents. It represents a considerable improvement over
the House bill that retreated from Federal standards and enforcement
and reflects much of the Senate position on nursing home standards, but
we are not there yet.
Many patient advocacy groups and colleagues from the other side of
the aisle have come forward to assail the nursing home provisions
included in this bill, but I would ask them to pause for a moment to
recognize that significant headway we have made in the debate over
Federal nursing home standards. The debate is no longer over the need
for national standards and Federal oversight of nursing homes, but over
what national standards are necessary to be maintained. I remain
cautious of several of the changes made in conference agreement which
could undermine the improvements nursing home residents and their
families have witnessed since the enactment of the

[[Page S 17310]]
OBRA 87 regulations, but I recognize the substantial progress that has
been made.

Specifically, I am concerned about provisions of the bill allowing
nursing homes to be accredited by private sector organizations as a way
of meeting State certification requirements. In the past, private
accreditation has been perceived as a loophole for facilities to avoid
oversight, In order for accreditation to be acceptable, we must be sure
that the Federal and State governments retain full authority to monitor
facilities and that standards and residents' rights are not
compromised.
I also have reservations about several changes that have been made to
current law. For example the bill eliminates current regulations that
restrict a nursing home from placing extra requirements on Medicaid
patients as a condition of admission, such as denying a Medicaid bed
unless a gift, payment, or donation is given to the facility. Without
the current admission policy limitations, patients and their family
members will no longer be protected against discrimination based on
source of payment and duration of stay contracts.
It also removes the requirement that facilities provide care and
services to allow each resident to attain or maintain his or her
highest practicable level of physical mental, and psychosocial
functioning. While this standard may sound a bit abstract, it was a key
phrase negotiated in the OBRA 87 requirements to encourage nursing
facilities to provide the best possible to nursing home residents.
It reduces the frequency of required inspections of nursing homes
from every year to every 2 years unless the facility has been found to
have substandard care; eliminates the requirement for comprehensive
training for State and Federal surveyors; removes requirement that
resident assessments be conducted using a national uniform data set in
order to monitor patient outcomes and consistency in patient care;
relaxes protections against unfair transfers and discharge of nursing
home residents; reduces some minimum training and staffing requirements
for nursing homes--including elimination of 75 hours of training for
nurse aides and the requirement that facilities with more than 120 beds
employ a qualified social worker.
Also, it reduces the frequency of mandated Federal validation surveys
on 5 per cent every year to 5 per cent every 3 years; removes
requirement directing surveyors to reduce the time between
identification of standards violations and the final imposition of
remedies; eliminates language calling for incrementally more severe
fines for repeated or uncorrected deficiencies; reduces maximum civil
monetary penalty imposed on nursing homes that are out of compliance
from $10,000 to $5,000; and eliminates language requiring retroactive
civil monetary penalties for past noncompliance.
The conference agreement on nursing home protections has come a long
way toward restoring the goal of full protections for millions of
nursing home residents nationwide, but certain critical issues remain
unresolved. I will continue to evaluate the changes proposed by the
conferees and will work with the leadership and consumer groups to
guarantee adequate protection for elderly and disabled nursing home
residents.
Mr. THURMOND. Mr. President, I rise today in support of the Balanced
Budget Act of 1995, which, for the first time in many years, proposes a
budget that controls entitlement spending, restrains the growth of
Government, and eliminates annual deficits.
For years I have made speeches in this great Chamber, and cast my
vote in support of a balanced budget. I have introduced balanced budget
amendments in numerous sessions of Congress, including the 104th
Congress. On July 12, 1982, a balanced budget amendment was brought to
the floor. As Chairman of the Judiciary Committee, I was pleased to
sponsor and guide that important measure to passage. On August 4, 1982,
69 Senators voted in favor of the resolution. While a majority
supported it in the House, if failed to receive the necessary two-
thirds vote. In March 1986, the Senate voted on another balanced budget
amendment. It was unfortunate that the resolution failed by one vote.
Earlier this year, the balanced budget amendment again failed by one
vote. However, I am confident that we will yet pass the balanced budget
amendment during the 104th Congress.
With or without a constitutional amendment, this balanced budget act
proves that the Congress can enact a budget which protects the health
and safety of our Nation, provides quality Government services, and
eliminates harmful deficits.
This is a refreshing contrast to the unbalanced budgets proposed by
the President. His budgets contain no plan to balance the budget,
significantly increase the national debt, fail to restrain growth in
nondefense Government spending, and propose dangerous reductions in
national defense spending. Mr. President, such budgets are not
acceptable alternatives.
The Balanced Budget Act of 1996 reverses direction on those policies
which are stifling our economy and burdening all Americans with an
overwhelming national debt. It puts the Nation on track to reduce
Government spending, eliminate annual deficits, and permits us to begin
to reduce the national debt, which is now nearly $5 trillion.
First, this bill controls the growth rate of Government spending.
Federal spending continues to increase over the 7-year budget period,
from $1.5 trillion in 1995 to nearly $1.9 trillion in fiscal year 2002.
However, this spending growth is at a slower, more affordable rate, and
below the growth rate of Federal revenues. By 2002, revenues will
exceed spending.
One would think, listening to this debate, that this budget
drastically reduces or eliminates all Federal programs. For example, it
has been argued by some that proposed reductions would destroy Medicare
and Medicaid. This simply is not the case. Both programs grow at
healthy annual rates. Without the proposed reforms, these programs
would grow at unsustainable rates, resulting in dangerous consequences,
even threatening the solvency of the Medicare part A trust fund.
Second, Mr. President, the balanced budget act reduces and eventually
eliminates annual deficits, which is the amount Government outlays
exceed Government revenues. Without this bill, annual deficits will
continue to increase, exceeding $200 billion per year. By enacting this
measure, annual deficits will begin a downward path and will be
eliminated within the 7-year budget period. The Congressional Budget
Office estimates a surplus by 2002, allowing us to begin reducing the
national debt.
The results of this deficit reduction, Mr. President, have been
estimated to stimulate economic growth, reduce interest rates, increase
employment opportunities, and result in a higher standard of living for
all Americans.
Mr. President, in addition to controlling Government spending, this
balanced budget act addresses Government revenues. Under this bill,
Government revenues will continue to increase. However, in contrast to
the 1993 Budget Reconciliation Act which enacted the largest tax
increase in history, the balanced budget act will let American families
keep more of what they earn.
Let me emphasize, Mr. President, this bill provides tax relief for
the middle class. Over four-fifths of the tax reductions of this
proposal will go to those making under $100,000; nearly two-thirds go
to those making under $75,000. Furthermore, after considering all the
reforms of the earned income tax credit, the marriage penalty, and the
child tax credit, working families with children will see their taxes
decrease next year.
The centerpiece of the revenue provision is the family tax credit,
offering a $500 per child tax credit, for children under the age of 18.
This credit is phased out for individuals with adjusted gross income
over $75,000, or for married couples with an income over $110,000. In
my State of South Carolina, this means that over 400,000 tax returns
will be eligible to claim this credit, at a value of over $320 million.
This is money directly in the hands of parents to spend for their
priorities--child care, housing, and education--not sent to Washington
to fund its bloated bureaucracy.
Other provisions provide direct relief to America's families,
including a $5000 adoption tax credit; marriage penalty

[[Page S 17311]]
relief; and a credit for student loan interest.
The bill also contains revenue provisions which will increase savings
and investment. The expansion of the individual retirement account will
permit more Americans to save more money for their retirement years.
The capital gains reduction will unlock existing capital assets,
allowing capital to be reinvested. This will result in more jobs,
higher wages, more benefits, and a more vibrant economy.
Let me address the argument that the capital gains tax cut will go
primarily to the rich. A study by the U.S. Treasury showed that nearly
one-half of all capital gains were realized by taxpayers with wage and
salary income of less than $50,000. Three-fourths of all returns with
capital gains in 1995 are estimated to be reported by taxpayers with
wage and salary income of $50,000 or less. Mr. President, let me
reemphasize this point--capital gains tax relief will benefit all
Americans.
Mr. President, there are many other important and favorable
provisions in the balanced budget act. The act reforms welfare by
emphasizing work and responsibility. It preserves, protects and
improves Medicare. It protects veterans' benefits and safeguards
affordable education.
Mr. President, I support the Balanced Budget Act of 1995. I vote
``yes'' for reducing the deficit; I vote ``yes'' for controlling the
growth of Government spending; I vote ``yes'' for our families by
reducing their tax burden; I vote ``yes'' for restoring the economic
future of our Nation. Therefore, I will vote ``yes'' for this bill and
encourage my colleagues to do likewise. I yield the floor.
Mr. MURKOWSKI. Mr. President. The Committee on Energy and Natural
Resources met and exceeded its targets for the conference. I want to
express my appreciation to Chairman Young of the House Resources
Committee and to Chairman Bliley of the House Commerce Committee for
their cooperation, and the hard work of their staff, that enabled us to
conclude our negotiations quickly and in an amicable fashion.
When the President submitted his budget earlier this year, he
proposed to sell the Power Marketing Administrations, except for
Bonneville, to the present customers at the discounted value of the
repayment obligations. That proposal was not particularly well thought
out as our hearings in committee demonstrated. Nonetheless, the revenue
assumptions underlying that sale became part of the target and
instructions given to our committee. While the members of our committee
recognize that serious attention needs to be given to the future of the
PMA's, especially in light of declining budgets for the agencies that
currently manage the generating and marketing of power from Federal
facilities, we also are in agreement that responsible solutions are
simply not possible within the time frame of Reconciliation. The
committee was faced with a Herculean task of finding other options to
achieve the savings scored to our committee. The magnitude of the task
is best illustrated by a comment from one of the staff on the Budget
Committee that if they had known of other options, we would have been
scored with them as well.
As I stated, the committee has met and exceeded its instructions. I
want to express my appreciation to our ranking Minority Member, Senator
Johnston, for his cooperation and the assistance from his staff in
helping us. Our committee has always prided itself on its bipartisan
professional approach to legislation, and that is demonstrated in our
product.
The conference agreement includes the sale of certain lands in
California contained in the House measure as well as the sale of the
helium reserves contained in both the Senate and the House.
The agreement also contains the leasing authority for the Coastal
Plain in Alaska that was contained in both the Senate and House
versions and which was a specific assumption in our instructions. The
conferees made several minor changes to make the program work more
efficiently and resolved uncertainties in allotments due Alaskan
natives within the Coastal Plain. I know that some opponents of the
program have suggested that the Federal Government will never see the
revenues estimated from leasing on the Coastal Plain due to the
provision in the Mineral Leasing Act made by the Alaska Statehood Act
that provides 90 percent of all revenues to the State. The statement of
managers is explicit on this subject. We are not in any manner altering
the provisions in the Alaska Statehood Act nor the Mineral Leasing Act.
Those provisions continue to apply in Alaska outside the Coastal Plain.
When Congress set aside the Coastal Plain, it reserved to itself the
decision on whether the area should be opened to leasing or not, and if
so, under what terms and conditions.
The decision has been that the area should be leased, but that it
should be leased under very specific conditions tailored to the unique
characteristics of the Coastal Plain. Suggestions that development will
have adverse environmental effects are wrong and the result of either
misinformation, misunderstanding, or deliberate mischaracterization.
Our committee has spent several years crafting very specific language
to ensure that development will occur in an environmentally sensitive
manner, and that language is incorporated in the conference agreement.
In developing a separate leasing program for the Coastal Plain, the
committee decided to adopt a 50-50 revenue sharing formula. The
conference language is absolutely clear that the program set forth is
the sole authority for the leasing program, not the Mineral Leasing
Act.
I will have more to say about this leasing program, but for the
moment I simply want to say that I sincerely hope that the President
would stop listening to the ideological fanatics that prowl the White
House and the Federal agencies and examine the realities of this
leasing program. This Nation is once again over 50 percent dependent on
foreign oil supplies. That doesn't seem to bother the President, but it
should. The President should reexamine his position on this issue. His
opposition is wrong from the standpoint of our energy security, it is
wrong from the standpoint of the economy, it is wrong from the
standpoint of the environment, it is wrong from a budget standpoint, it
is wrong from the standpoint of domestic employment, it is wrong from
the standpoint of our responsibilities for Native Alaskans--his
opposition is simply wrong.
The conference agreement also includes various reclamation and water
provisions. The agreement retains the Senate language repealing a
prohibition in current law that prevents irrigation districts from
prepaying their outstanding debt. The legislation also provides for the
transfer of the Collbran Project in Colorado, and Senator Campbell
deserves the credit for working out the problems with that provision.
The agreement also includes a modification to the Raker Act that would
increase the payment by San Francisco for the use of a portion of
Yosemite National Park from $30,000 to $2 million. The charge has not
been changed in over half a century. The House had set the charge at $8
million while the Senate had adopted a formula used by FERC with a
floor of $597,000. The Agreement also includes two provisions of the
House version--the transfer of Sly Park and authorization for
prepayment of Central Utah Project debt--with minor modifications.

After considerable discussion with the House, we also were able to
come to agreement on amendments dealing with Federal oil and gas
royalties and hardrock mining. The reforms will increase Federal
receipts and provide a fair and workable system that will increase
collections from oil and gas operations and completely reform the
federal hardrock mining program. I fully understand that the provisions
dealing with hardrock mining will not satisfy those whose prime
motivation is the elimination of any domestic mining industry, but that
was not our objective. The provisions of the Conference Agreement
recognize private property rights, provide for fair market value with a
reverter for patents, and impose a royalty on future production.
The conference agreement includes the Senate provisions dealing with
privatization of Department of the Interior aircraft services, with
certain modifications as well as the sale of the Alaska Power
Administration, refinancing of the Bonneville Power Administration,
export of Alaska oil, and

[[Page S 17312]]
OCS deepwater royalty relief, all of which were included in the
conference agreement on S. 295 which both the Senate and House have
approved and the President supports.
After considerable work, the conferees were able to agree on
provisions dealing with ski area permits, National Park Service
concessions, and recreation fees at areas administered by the National
Park Service, Bureau of Land Management, and the Forest Service. We
were able to retain the Senate provision that would return 80 percent
of all new receipts to the collecting agency for direct use for visitor
services and facilities.
The conferees also agreed to the language that markedly improves the
climate for the privatization of the U.S. Enrichment Corporation. We
also included language providing for the disposal of surplus property
by the Department of Energy and for the lease of excess storage
capacity within the Strategic Petroleum Reserve. As a result of
problems at the Weeks Island site, the reserves need to be drawn down
and relocated. The conferees agreed that 32 million barrels of the
reserve should be sold, but that 50 percent of the revenues from the
lease of excess capacity should be made available for additional
purchases to complete the reserve beginning in 2002.
Mr. President, none of this could have been accomplished without long
hours and hard work by the professional staff of the committee. I want
to express my appreciation to them. Howard Useem worked on the Alaska
Power Administration sale and the Bonneville refinancing as well as the
Strategic Petroleum Reserve language. Brian Malnak worked on the
Interior asset sales, Mike Poling worked on the oil and gas royalty and
OCS provisions, and Jim O'Toole worked on the National Park Service
fees and concessions language. Jonathan Schneeweiss made major
contributions in trying to keep our provisions straight, and I want to
especially express my gratitude to the support staff, Camille Heninger,
Betty Nevitt, Jo Meuse, Kelly Fischer, Judy Brown, Julia Gustafson, and
Gerry Gentry--who really did all the work.
I also want to thank the minority staff who demonstrated the high
level of professional commitment that has always characterized our
staff. During the last reconciliation measure, they sought to involve
us and we tried to be helpful. We are grateful for their assistance
this time around. Ben Cooper, Tom Williams, David Brooks, Shirley Neff,
Bob Simon and Cliff Sikora all made important contributions. I
especially want to thank Sam Fowler for his assistance and ready
recourse to humour during tense moments. In addition to his overall
responsibilities for the entire package, his work on the U.S.
Enrichment Corporation was invaluable.
Although all the staff performed well, some made extraordinary
contributions. I want to acknowledge Karen Hunsicker, who shepherded
the conference wit the House Commerce committee to an early and
successful conclusion, especially on the U.S. Enrichment Corporation
and DOE asset sales. David Garman did outstanding work on the US
Enrichment Corporation and Andrew Lundquist has labored long and hard
on both the Alaska export provisions and the leasing program for the
Coastal Plain of the Arctic Refuge. Michael Flannigan made the hardrock
mining negotiations as exciting as possible and kept a degree of
uncertainty up to the very last moment. Kayci Cook, the Committee's
Bevinetto Fellow, demonstrated competence, patience, and professional
judgment in working on concessions and park fees.
Finally, I want to express my appreciation to the senior staff of the
Committee--Gregg Renkes, our Staff Director, Gary Ellsworth, our Chief
Counsel, and Jim Beirne, our Senior Counsel. Not only have they handled
individual portions of the package with their usual professional
expertise, but they have also had the pleasure of dealing with the
Budget Committee, the Congressional Budget Office, the Parliamentarian,
Legislative Counsel, and their House counterparts, as well as various
Senators and staff. They handled the floor procedures, and made certain
that all the members of the committee were covered, and are responsible
for the successful completion of the conference.
Mr. CRAIG. Mr. President, yesterday, on his birthday, a young member
of my staff went to the dentist for a root canal. He understood that
long-term health and comfort was more than worth the short-term
discomfort.
Ironically, the same day, I received a fax from a concerned taxpayer
who pointed out that a dentist's ``polling numbers'' aren't too good
while the cavity is being drilled. But once the cavity is filled, ``the
horrible toothache is gone forever--and the patient is grateful.''
For many of us in Congress, for Government employees, for many
Idahoans, and for many folks watching us around the Nation, the current
budget impasse may be producing a feeling like that of hearing the
dentist's drill.
So, it's important for us to remember why we're here, what's at stake
here, and why we are fighting so hard to pass a balanced budget.
$200 billion annual deficits, a $5 trillion debt, are more than a
toothache--they are a cancer on the economy and threaten the living
standards and economic security of every American.
This would be the first balanced budget since 1969 and only the
second since 1960. It's sobering to remember that a majority of
Americans living today have seen the Government balance its books
either once or never.
Back at the beginning of this year, we got 66 of the 67 votes we
needed to pass the Balanced Budget Amendment to the Constitution. The
critics, the defenders of the status quo cried out, ``Where's your
plan?'' Well, at least for those of us on this side of the aisle,
here's our plan.
With passage today of the Balanced Budget Act, the first Republican
Congress in 40 years is on the verge of passing a detailed plan to
balance the Federal budget by the year 2002--for the first time since
1969 and only the second time since 1960. In fact, a majority of all
Americans living today have seen the Government balance its books only
once or never. However, the President has threatened a veto and the
debate has been heated and, often, confusing or misleading. The
following information should help folks construct the true picture of
the current debate and what's at stake.
Democrats say Republicans in Congress want to slash spending. But
total spending under the Balanced Budget Plan will go from $1.5
trillion in 1995 to almost $1.9 trillion in 2002--a 22 percent
increase.
Under the status quo, spending would go to $2.1 trillion in 2002--
almost a 40 percent increase.
The Democrats say the Republican budget is all pain, no gain. But
real people will enjoy real benefits from balancing the budget by 2002
under the Republican plan. Because of lower interest rates, a typical
family would save $2,388 a year on a $75,000 mortgage; $1,026 over the
life of a 4-year, $15,000 car loan; and $1,891 over the life of a 10-
year, $11,000 student loan.
Balancing the budget means more investment, more economic growth, and
2.5 million new jobs by 2002. By 2020, this growth means our children
would have a 7 percent to 36 percent higher standard of living.
In contrast: The Concord Coalition estimates that Federal debts and
deficits already have lowered the average family's income by $15,000 a
year. The President's 1995 budget estimated that future generations
face a lifetime tax rate of 82 percent at all levels, under current
trends in the public debt. The status quo is the least tolerable
course.
President Clinton says he has submitted a balanced budget. Not
according to the nonpartisan, objective Congressional Budget Office,
which said the ``10-year balanced budget plan'' he offered this summer
actually would produce $200 billion deficits a year throughout the next
decade. By his own admission, the budget the President first proposed
in February would have produced similar $200 billion deficits. In both
cases, he used unrealistic economic assumptions.

Democrats say the Congressional budget plan will drastically reduce
Medicare protection for the elderly. But, if we do nothing, Medicare
will run a deficit in the coming year for the first time ever, and its
trust funds will be completely drained of their accumulated reserve by
2002. The official Medicare Trustees--including three of President
Clinton's own Cabinet Secretaries--have said so.

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The balanced budget plan will extend the financial solvency of
Medicare at least until 2009, protecting seniors. Budget savings would
come from increasing consumer choice and making the system more
efficient. Even after savings, Medicare spending per beneficiary would
increase from $4,800 in 1995 to $6,700 in 2002--a 40-percent increase.
Democrats say Republicans want to cut Medicare to pay for tax cuts.
But, the same magnitude of reforms are necessary to save and preserve
Medicare, no matter what happens with the rest of the budget. The
Balanced Budget Act includes a lockbox provision making it illegal to
use Medicare funds for other purposes.
Democrats say the Republican plan won't really balance the budget--it
will look like it by raiding the Social Security trust funds. But, the
balanced budget plan will balance the unified budget (including Social
Security surpluses in the total) by 2002. It will balance the budget
without counting Social Security by 2005. The Government will remain
under a legal obligation to pay out to Social Security beneficiaries
every dollar ever deposited into the Social Security trust funds, with
interest.
The growing national debt is the real threat to Social Security and
every other important Government program. We already are paying $300
billion in interest every year on that debt--about one-fifth of it
going to foreigners--which crowds out other budget priorities.
Democrats say the Congressional budget is full of tax cuts for the
rich. But, every time someone suggests cutting taxes for everyone,
liberal demagogues make it sound like the rich are getting a special
deal. It just ain't so in the balanced budget plan.
Almost three-quarters of the tax package in the budget goes for
family tax relief, including a $500 per-child credit, adoption credit,
marriage penalty relief, a deduction for custodial care for the
elderly, and a student loan interest deduction. Savings and investment
incentives will boost the entire economy, create jobs, and guarantee
that small businesses and family farms won't have to be sold at the
owner's death just to pay taxes. Closing corporate loopholes will raise
$18 billion in revenues over the next 7 years.
Democrats say the Republican budget raises taxes on lower-income
people. This accusation is a misrepresentation about the Earned Income
Tax Credit [EITC]. The EITC is the fastest-growing item in the budget.
It is part tax credit and part spending program for lower-income
workers. In his 1993 budget, President Clinton drastically expanded
who's eligible and the amount of benefits.
The Balanced Budget Act would preserve currently-scheduled EITC
increases for needy families with children. Coordinating the EITC with
the $500 per-child credit will still give EITC families earning more
than $18,000 a net tax cut. Other reforms target fraud, which would
cost $37 billion over the next 5 years under current law. The only
actual benefit reductions would affect childless taxpayers (who, before
1993, were never eligible for the EITC), illegal aliens, tax cheats,
and affluent taxpayers (who never should have received EITC benefits).
Democrats say Republicans want to cut benefits to the poor and needy.
But Medicaid (health care insurance for the needy) spending in the
Balanced Budget Act would go from $89 billion in 1995 to $127 billion
in 2002--a 43-percent increase.
Mr. President, here is some rhetoric versus the truth.
Mr. SIMPSON. Mr. President, what an extraordinary and remarkable day.
We are all somewhat weary--and, yes, greatly frustrated--from events of
the past few days. But we should not let our fatigue--or our
frustration from dealing with politicos at the other end of
Pennsylvania Avenue--diminish the importance of the moment.
At the close of this debate, we will be privileged to vote on a
budget which--get this, for the very first time in my 17 years here--
actually balances the budget on a date certain. No more smoke and
mirrors! No tricks. No more accept short term expedients now--with the
understanding that necessary trimming will follow later. We have
finally learned better; finally, we do understand. And, finally, we are
actually going to do it! We are going to balance this budget! A good
day!
Everyone in this chamber knows my views on the subject of a balanced
budget. Everyone knows that I passionately believe that the one way--
the only way--to get to a balanced budget is to gain control over this
so-called entitlement spending. That's a belief borne of very careful
study--study which Senator Bob Kerry and I undertook in service on the
Entitlement Reform Commission.
But the view that we must gain control over entitlement spending in
order to balance the budget is not merely a belief. At this point, I
think all Senators might agree that, as a matter of absolute fact,
entitlement spending reform is the only way we can get from here to
there. The fact that all now seem to agree on that point--and on the
point that we must stop borrowing indefinitely from future
generations--shows how far we, and the American people, have come in
just a few years. I wish this consensus might have arrived sooner, but
I'm surely pleased it is here now.
In light of the relative consensus on the ``big picture,'' and in
view of the limited time available for us to debate this historic
Balanced Budget Act, I will not talk long on the overarching issues.
But I will say this: we are taking an action today which comes closer
than anything we could ever do--short of voting on a war resolution--to
determining the day-to-day quality of life of future generations of
Americans. This is not hyperbole or overstatement. This is not hype or
hoorah! Without the action we take today, our grandchildren, and their
children, face a future of bankruptcy, hyperinflation, and financial
and fiscal chaos. By taking some relatively painless steps today--and,
please, let's be honest on this point: the savings we will approve
today are relatively painless when you consider the magnitude of the
deficit and debt confronting us--we deflect away that otherwise
certain, and bleak, future.
The savings measures we will approved today are relatively painless--
so much so that it is amazing, and so regrettable, that we have waited
so long to act. To illustrate, let me outline for you what the
Committee on Veterans Affairs--the Committee I am honored to Chair--has
approved. I think you will agree that the route to a balanced budget
that the Veterans Committee was able to reach imposes no great hardship
on the Nation's veterans.
Title X of the bill--entitled ``Veterans and Related Provisions''--
defines what veterans must contribute to help us achieve a balanced
budget. The measures we have approved can be viewed in three clusters:
First, we would reenact a number of money saving provisions that have
previously been approved in prior Omnibus Budget Reconciliation Acts--
We would continue, for example, to require that some, but only some,
veterans pay small per diems for hospital and outpatient care, and
small added co-payments for prescription medications dispensed for the
treatment of non-service-connected disabilities; veterans with profound
service-connected disabilities, and low income veterans, would continue
to be exempted.
We would continue, with respect to VA-treated veterans who have
health insurance, to authorize VA to collect fees from those insurance
carriers for non-service-connected treatment.
We would continue to allow VA to ``verify,'' through access to IRS
and Social Security records, the incomes of veterans who apply for
means-tested VA benefits.
We would continue to limit means-tested VA payments to veterans who
are in Medicaid-financed nursing home care while still assuring
completely that the real benefit paid to, and retained by, the veteran
is not diminished.
We would continue to require that veterans who receive the benefits
of VA mortgage loan guarantees pay reasonable fees.
Finally, we would continue to allow VA to take reasonable steps to
minimize its losses when the home loans it guarantees go into default.
These provisions, as a group, would allow VA to save $2.799 billion
over the next 7 years. 2.799 billion bucks simply from extending the
effect of provisions that have previously been enacted.

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These provisions, I daresay, would not harm veterans.
I can say, Mr. President, that no veteran would be harmed by these
measures based on our experience on the Veterans Committee. For what is
left unsaid in the context of continuing previously-approved OBRA
provisions is as important as what is said. The OBRA provisions that we
would extend today are ones which experience has already shown are
relatively painless to the Nation's veterans and which have, therefore,
achieved good bipartisan consensus within the Veterans Committee. They
are even accepted by the Nations's veterans service organizations--
organizations that are not always easily pleased, I would remind!
Provisions in prior Budget Reconciliation Acts that were more
controversial--for example, a provision setting a ceiling on benefits
paid to an incompetent veteran who has no dependents and whose assets
exceed $25,000--are not in the package before the Senate today.
Second, this package of veterans-related measures would adopt two new
provisions that are relatively non-controversial, but which are highly
significant in terms of the savings to be gained.
Title X would reimpose a common sense legal standard for compensation
to VA patients who are injured in VA hospitals. What standard would we
impose? The very same standard which applies, insofar as we have been
able to determine, at every other hospital in America. We would require
that a patient show that any harm that was visited upon him or her in a
VA hospital was the result of VA fault. Recovery would be allowed only
if that fault could be shown.

In addition, we would require VA to ``round down'' the compensation
and survivors' benefits which are adjusted annually to account for
increases in the cost of living. What do I mean by this? Traditionally,
when VA recomputed benefits amounts--which are paid in whole dollar
amounts--it rounded up when the recomputed benefit equaled a fractional
dollar amount of 50 cents or more, and it ``rounded down'' when that
amount was 49 cents or less. The bill before the Senate today would
require that VA ``round down'' in all cases.

* * * * *

I approved of these provisions--championed by my friend, Senator Jay
Rockefeller, the committee's ranking member--when they were before the
committee. They were then--and they are now--wholly reasonable
mechanisms for saving almost $1 billion over a 7-year period. Indeed,
in my view, they are preferable to the alternative measures adopted by
the House.
But they simply were not acceptable to the chairman of the House
Veterans' Affairs Committee, Congressman Bob Stump, or to the ranking
member of that committee, Congressman G.V. ``Sonny'' Montgomery, for
whom the Montgomery GI bill is named. My respect, admiration, and
regard for Sonny Montgomery--who will retire after the 104th Congress
and who will be deeply missed by all--impelled me to recommend that the
Senate conferees recede to the House view on this matter if we could
``make up the difference'' in other ways. We did.
In place of the Montgomery GI bill provisions, the conferees accepted
two House-approved provisions which, collectively, will save almost the
full necessary $1 billion. First, we would raise the prescription

* * * * *

Mr. President, those who hear these comments may infer that I am not
fully pleased with each and every aspect of the veterans' provisions in
this bill. If they infer that, they will be correct. I particularly
regret the provision relating to survivors' COLAs--though I do not
think it is patently unfair. It is regrettable, but not unfair. As we
all know, however, rarely is a given piece of legislation pleasing in
all respects.
This legislation is, however, almost without precedent in its
importance. And it is not--it is not--unfair to the Nation's veterans,
or to their widows, orphans or families. No--veterans, their widows,
and their families will benefit, as will all Americans, from deficit
control--and from the jobs, low interest rates, low inflation, and
future prosperity which hinge on deficit control.
We are doing no less today than trying to save this great country as
we know it. We veterans fought for that very cause. I know all veterans
will join now--as we all did when we were called to arms--in defense of
the Nation, and to assure peace, prosperity, and stability for our
children and grandchildren.
Mr. President, I appreciate the time I have been afforded to address
these critical issues, and I yield back the balance of my time.

VETERANS' RECONCILIATION: MORE THAN THEIR FAIR SHARE

Mr. ROCKEFELLER. Mr. President, I oppose the provisions of title 10
of the conference report--relating to veterans' programs--because they
are a bad deal for veterans. These provisions were crafted behind
closed doors. They must be brought out into the light of day so that
the public can understand just how bad they are.
First, the overall amount saved is too high. The two Veterans'
Affairs chairmen accepted, with no action by either body, an increase
of $300 million over the seven years in the overall savings that the
Veterans' Affairs Committees generated, from $6.4 billion to $6.7
billion. There is no reason that our Committees should have done this.
This increase translates directly into more cuts in veterans' benefits.
I regret very much that there was a willingness to make veterans do
more than their fair share.
The provisions provide less than a full cost-of-living adjustment to
certain widows of veterans who died in service or later from conditions
related to their service. This diminished COLA is directly contrary to
a promise made by the Congress in 1992 when the survivors benefit
program was revised, and should not be agreed to. I oppose it strongly.
It is wrongheaded and mean spirited. There were other ways to find the
savings required.
The package includes a 100-percent increase in the amount poor
veterans are charged for a 30-day supply of prescription drugs, raising
the amount to $4 from the current $2. Our Committee avoided increasing
this copayment. The House Committee had voted a $1 increase, to $3. The
increase in the bill is an even greater increase than originally passed
the House. It is being included in this package because of the
Chairmen's agreement to accept a higher overall savings target for our
Committees than is set forth in the Budget Resolution.
The bill expressly repeals the Secretary's existing authority to
waive veterans' indebtedness in connection with receiving prescription
drugs. Under current law, the Secretary can waive this and other
indebtedness. However, in an action designed to generate even more
savings from poor veterans, the waiver authority as to veterans who
have received prescription drugs will be repealed. Frankly, I am not at
all sure what is intended by this change but if I understand it, the
only way to enforce the no-waiver authority will be to refuse to
provide prescriptions to veterans who previously received medications
but were unable to pay for them. That strikes me as a particularly
unfortunate change in law and policy.
The final compromise includes a provision that would repeal a
protection in current law for veterans who are found by VA to owe money
in connection with a home loan default, even a default that occurs
years after the veteran has sold the home to a buyer who then defaults
on the loan, a not uncommon event. Under current law, a veteran who is
found by VA to owe money in connection with a loan default is protected
from having his or her income tax offset or federal pay garnished until
VA gets a court decision affirming the indebtedness. The final
compromise will include a House-passed provision that substitutes
simple notice to the veteran for this protection.
Mr. President, I must note my deep disappointment that the House
refused to consider any changes in Montgomery GI bill issues as part of
our effort to find the mandated savings. The Senate package achieved
savings in two ways from the MGIB--by providing for a one-half COLA
over the seven years and by increasing the contribution that
servicemembers make who do not opt out of the MGIB. The House's refusal
to achieve savings from healthy, employed recruits and students, at the
expense of widows of veterans who died

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from service-related causes, and of veterans needing prescription
drugs, is simply not acceptable to me. I do not understand their
priorities.
Finally, Mr. President, as I noted at the outset, this compromise was
crafted behind closed doors. I was denied any opportunity to
participate in the conference. I asked for a public meeting of the sub-
conference on a number of occasions in order to give us the opportunity
to discuss the differences between the House and Senate provisions in a
public forum. The only response I received was an invitation to a
private meeting in Senator Simpson's office after the final agreement
had been reached. That's just not good enough. The American people
deserve better. America's veterans deserve better. We should conduct
our business in the open, not behind closed doors. This package was
developed with no input whatsoever from Senate Democrats. That is not
how our Committee has functioned in the past. I regret that we are now
taking that approach.
Mr. President, this package is a bad deal for veterans. It cuts too
deeply and in wrong areas. As the Ranking Democrat on the Veterans'
Affairs Committee, I see my role as looking out for our Nation's
veterans, as making certain that our promises made to those who gave of
themselves in our common defense are kept. This package does not do
that. That is why I must oppose it.

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