Hearing of the House Ways and Means Committee: Board of Trustees 2004 Annual Reports

HEADLINE: HEARING OF THE HOUSE WAYS AND MEANS COMMITTEE

SUBJECT: BOARD OF TRUSTEES 2004 ANNUAL REPORTS

CHAIRED BY: REPRESENTATIVE WILLIAM M. THOMAS (R-CA)

WITNESSES: PANEL I:

JOHN W. SNOW, SECRETARY, DEPARTMENT OF THE TREASURY;

PANEL II:

RICK FOSTER, CHIEF ACTUARY, CENTERS FOR MEDICARE AND MEDICAID SERVICES;

STEPHEN C. GOSS, CHIEF ACTUARY, SOCIAL SECURITY ADMINISTRATION; DOUGLAS HOLTZ-EAKIN, PH.D., DIRECTOR, CONGRESSIONAL BUDGET OFFICE LOCATION: 1100 LONGWORTH HOUSE OFFICE BUILDING, WASHINGTON, D.C.

BODY:
REP. RICHARD E. NEAL (D-MA): Yes. Thank you, Mr. Chairman.

Mr. Eakin, did you say that the final number on the prescription drug bill was not offered until after it had been enacted? The final estimate.

MR. HOLTZ-EAKIN: We provided estimates regularly throughout the year to both the House and the Senate and both parties. When the conference bills passed, we produced a 67-page cost estimate detailing the underpinnings. We worked with the committees to provide updates as they contemplated alternatives, and with the passage of the final bill and the receipt of final language, we put out a short cost estimate and we also at that point began to put it into our baseline estimates of the cost of Medicare.

REP. NEAL: So actually after it was passed you gave the final number?

MR. HOLTZ-EAKIN: Yes.

REP. NEAL: Okay. Here's part of the problem I think that we confront today. This is a follow-up to a couple of earlier assertions that were offered by the other side. And I suspect part of this is to the aggrieved minority here. General Shinseki said that what was being offered to the American people in terms of troop assessments was not accurate. Lawrence Lindsay said that the war on Iraq was going to cost $200 billion to $300 billion. He was fired. General Shinseki was dismissed. We have an energy task force that we're going to have to go to the Supreme Court now so that the public can find out actually what went on inside of those deliberations with the vice president.

Mr. Wilson is sent to determine whether or not Niger provided enriched uranium to the Iraqis, and his wife is outed as a CIA agent. We're told there were weapons of mass destruction, there are no weapons of mass destruction apparently. For months we were told there was a link between Iraq and al Qaeda. The vice president kept it up after the president said there wasn't. The ballot box in the House of Representatives is kept open at 3:00 in the morning until 6:00 in the morning to vote on a bill that we now know we did not have accurate numbers to assess the cost of.

TV advertisements are utilized here to sell a bill to the American people for which there were faulty assumptions. An actuary-actuaries, we all have great respect and regard for in this system. People like you sitting here as witnesses, we have the highest regard for you. There are people like myself who beat people up on that side of the table over the Clinton healthcare bill and then opposed it because we didn't get the right numbers. That never happens on the other wide of this institution. You give them the wrong numbers, they go along with it. They offer incentives to a member on the floor to vote for the bill, even with a faulty cost estimate, and people wonder why we get upside on this side for the manner in which the minority is treated.

Now, one thing I want to say about Chairman Thomas. I know he would not accept false numbers from either side in the administration. He has that reputation around here. And I do know that if he were given faulty numbers, he would have said something. But the truth is we all know this today, that we were given faulty numbers and then told by-professionals were told not to give us the real numbers. And then we hear this argument today, well, you could be far off in your estimates. I understand that, but there is a pattern here that has been offered to the American people for months now about what they should know and what they shouldn't know, and that's a very troubling aspect of this debate.

I thank the chairman.

REP. THOMAS: I thank the gentleman from Massachusetts.

Gentleman from Missouri, Mr. Hulshof, wish to inquire?

REP. KENNY C. HULSHOF (R-MO): I appreciate it, Mr. Chairman, and I appreciate the gentleman from Massachusetts making the political points. But let me come back and say specifically, the faulty --

REP. NEAL: Would the gentleman yield?

REP. HULSHOF: The faulty cost --

REP. NEAL: Those are policy points, Mr. Hulshof. Those are not political points. All of the things that I described happened.

BREAK IN TRANSCRIPT
REP. NEAL: Would the gentleman yield?

REP. HULSHOF: I see nothing faulty about that cost estimate, Dr. Holtz-Eakin. Now, maybe that's just my perspective, as a member on the lower dais, not from Massachusetts, but certainly one that appreciates that Congress-and no disrespect intended, Mr. Foster-that Congress, our official scorekeeper is you, Dr. Holtz-Eakin. CBO, Congressional Budget Office. Now, I think it's ironic that we've heard today this haranguing about-and I respect the fact that information from whatever source is important, especially because, as Mr. Stark said, we are not actuarial scientists, and so we rely upon you. But to suggest that this $534 billion figure would somehow have caused the other side to have come on board, I mean, is that the suggestion?

We've heard these complaints and criticisms that this bill, H.R. 1, was not generous enough, and so suddenly are we to believe that, well, if this higher number of $534 billion were, in fact, our official number, that somehow we would have had some additional support on the other side of the aisle. I think that's ludicrous to even suggest it. To me, the point is, among some, not all-and Mr. Neal is a friend, and I'm not specifically throwing this in our direction, Mr. Neal, and I'll yield in a second --

REP. NEAL: Okay.

REP. HULSHOF: -- but without question, we've heard the words "cover-up." You know, we've heard-you know, and the effort to score political points. So be it. It's an election year. But to me the real story of today is not these partisan attacks or this issue of credibility in going into the discussion about Niger, for Christ's sake, about Medicare, the point is the headlines should read, quote, "Medicare, Social Security going bust if Congress fails to act." End quote. That to me is the headline. I will yield briefly to my friend, because I want to get to some questions on the actuarial numbers on the bigger issue, not the political issue.

Mr. Neal.

REP. NEAL: I believe, Mr. Hulshof, that, Mr. Foster, you're an actuary, are you not?

MR. FOSTER: Yes, sir.

REP. NEAL: That was my point, that the actuary is the one that came back with us with a long career of distinction in offering numbers.

REP. HULSHOF: And I --

REP. NEAL: The president uses the $504 billion mark in his budget.

REP. HULSHOF: And I accept that, Mr. Neal. I accept --

REP. NEAL: But that's not a political point. And, Mr. Hulshof, there's nothing wrong with coming from Massachusetts.

REP. HULSHOF: There's nothing wrong with Massachusetts, Mr. Neal. It's one of the great 50 states. But I would say to the gentleman that, you know, somehow talking about yellowcake and Niger and how it relates to this quote, unquote, "faulty cost estimate" I think would be a bit of a stretch, but nonetheless, my time is running short.

And I simply-to me the real issue here, Mr. Goss, is exactly why you're here. And that is-and let me just say this, because I know, again, time is short and I wanted to get actually to-and I see the light has just gone-very quickly, the effect of economic growth on Social Security's finances, the myth out in Missouri, perhaps not in Massachusetts, where people are must more sophisticated, Mr. Neal. I say that tongue in cheek. The thought is, can we grow our way out of this problem or is this an actuarial demographic reality that we have to come to grips with here on Capitol Hill? Mr. Goss, that's the only question I get to ask, and if you could answer it briefly.