Budget Priorities
Floor Speech
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Mr. SCHUMER. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SCHUMER. Mr. President, I rise to discuss the issue of our budget. Later this week, the House will vote on its fiscal year 2012 budget resolution. Congressman Paul Ryan, the author of that blueprint, calls it a path to prosperity.
Mr. INHOFE. Would the Senator yield for a question?
Mr. SCHUMER. I will be glad to yield to the Senator.
Mr. INHOFE. I was scheduled to be speak at 4 o'clock. At the conclusion of the Senator's remarks, would the Senator request that I be recognized as in morning business for up to 30 minutes?
Mr. SCHUMER. Mr. President, I move that immediately after I finish speaking, the Senator--well, we had a Member who was going to go speak after you did. Could the Senator limit his speech to 15 minutes or----
Mr. INHOFE. No, sir, I could not. I have to have 30 minutes. The floor has been pretty empty today.
Mr. SCHUMER. OK. Mr. President, I ask unanimous consent that immediately after I finish, Senator Inhofe be recognized for up to 30 minutes, and then Senator Franken be recognized immediately after Senator Inhofe.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SCHUMER. So Mr. President, resuming my remarks, Paul Ryan, the author of that blueprint, called it the path to prosperity. It may be a path to austerity, but it is hardly a path to prosperity.
Nonetheless, with the negotiations finished just days ago on last year's budget, Congressman Ryan has succeeded in jump-starting the debate about next year's. The President himself will join this conversation about how to do long-term deficit reduction in a major address tomorrow at GWU--George Washington University. This is a debate we must have, and the President's entrance into it comes not a moment too soon. It will make for a powerful contrast with the Republicans' plan.
The contrast we will hear from our President tomorrow will likely not be in the commitment to deficit reduction. Paul Ryan's goal in his budget is to trim the deficit by $1.6 trillion over the next 10 years. He does not succeed in meeting this target, according to CBO. In fact, budget experts say his proposal only achieves $155 billion in net deficit reduction. But the number itself is not the issue. Without a doubt, we must be ambitious in setting a target for deficit reduction. We cannot be gun-shy about achieving fiscal discipline. So, no, the contrast will not be in how much we seek to reduce the deficit, it will be in how we go about doing so.
The Republicans would like the looming debate to be one about numbers, but, instead, it will be about priorities. The Ryan budget has all the wrong priorities.
The House Republican budget puts the entire burden of reducing the deficit on senior citizens, students, and middle-class families. At the same time, it protects corporate subsidies for oil companies, let's waste at the Pentagon go untouched, and would give even more tax breaks to the millionaires amongst us. In short, the Ryan budget puts the middle class last instead of first. As a result, it will never pass the Senate.
In the days since he first rolled out his budget proposal, Congressman Ryan has been hailed for taking on the tough challenges, and we certainly salute him for putting out a plan. But a closer look at his proposal shows that it is not bold at all. In leaving Pentagon spending and revenues completely untouched, Ryan's budget hews exactly to his party's orthodoxy.
Some of the columns I read say it takes courage. Well, maybe it takes courage for someone who has a different political philosophy to say what he said but not for a conservative Republican to say what he said. It does not gore a single Republican ox. It is a rigid ideological document.
Consider what Congressman Ryan wants to do on Medicare. In the name of ideology, Paul Ryan's budget proposes getting rid of Medicare as it exists today and replacing it with a private system that would cut benefits. We have seen this movie before. Five years ago, President Bush tried to sell the country on a plan to privatize Social Security. The public rejected it. If they didn't like what President Bush tried to do to Social Security, just wait until they see what Paul Ryan and the House Republicans want to do to Medicare. Their budget plan proposes putting the Medicare system into the hands of private insurance companies. That is a recipe for disaster. It would mean an end to Medicare as we know it.
Beginning in 2022, Americans turning 65 would no longer be enrolled in Medicare but, instead, would receive a voucher to go shopping for their own health insurance on the open market. Insurance companies, however, would not be required to honor that voucher, which would average about $8,000. Many private insurance plans for seniors far exceed that price already today. Under the Ryan plan, seniors who cannot find an affordable plan at the value of their voucher will simply have to make up the difference themselves out of their own pockets.
This problem would only worsen over time as health care costs rise. Ryan caps Medicare spending at the level of inflation, even though health care costs rise higher than that historically. As Ryan's voucher covers a smaller and smaller fraction of actual health care costs, seniors would have to cover the gap out of pocket.
That is why Alice Rivlin, a Democrat and President Clinton's former OMB Director who worked with Congressman Ryan on his approach for a time, has distanced herself from this final product. She told the Washington Post she opposes the Ryan plan:
In the Ryan version he has lowered the rate of growth and I don't think that's defensible. It pushed too much of the costs onto the beneficiaries.
Let me repeat that last part of the statement of Alice Rivlin, Congressman Ryan's partner for a time in this proposal. She writes:
It pushed too much of the cost onto the beneficiaries.
Other Medicare experts agree with Rivlin. Stephen Zuckerman, a health care economist at the nonpartisan Urban Institute, said:
The most serious flaw is that the focus of that approach is on limiting Federal spending on Medicare without concern about the potential of this change to shift costs to Medicare beneficiaries.
A better way to rein in Medicare spending would be to trim the waste and inefficiency out of the delivery system. Anyone who has gone through the health care system knows all the waste and inefficiencies--the legendary stories of a doctor waving as you go into the emergency room and you never see him again, and then there is a $4,000 charge, these kinds of things. But it turns out that Ryan's plan does nothing to reduce overall health care costs. It increases them. We have to preserve the benefits to people but make the cost of delivering them less expensive. That is what every other country in the world does. That is what we have to do.
The Ryan plan does not do that. The Ryan plan not only does not try to eliminate the waste and inefficiency out of the delivery system, it does nothing to reduce overall health care costs. It actually increases them.
According to the nonpartisan Congressional Budget Office, in 2030 traditional Medicare insurance would cost just 60 percent of a private policy purchased with Ryan's voucher. In other words, the Ryan health care plan would cost two-thirds more than traditional Medicare. Not only would the Ryan plan increase insurance costs, it would force seniors to shoulder a higher share of these costs.
CBO said--this is CBO not Chuck Schumer, the nonpartisan CBO:
Under the proposal, most elderly people who would be entitled to premium support payments would pay more for their health care than they would pay under the current Medicare system.
How much more? It is staggering when you look at the numbers. Here they are, the seniors' share of health care costs. We know even with Medicare seniors have to pay some of it themselves, but now they pay 25 percent; under the Ryan budget, 68 percent. So there is this voucher, and it goes to the insurance companies, health care costs more, and seniors pay more. Why the heck would we do that?
This is a crippling burden that would drive the average Medicare recipient into poverty. It is not only too much to ask for our seniors, it destroys the foundation of our health care system.
Madam President, just to check on the time, I believe I said after I finished I asked unanimous consent that Senator Inhofe would follow me.
The ACTING PRESIDENT pro tempore. The Senator has used 10 minutes. Did the Senator wish for more than 10 minutes?
Mr. SCHUMER. I did, and that was the intention of my unanimous consent request.
The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.
Mr. SCHUMER. The bottom line is the House Republican budget would cause the cost of health insurance to rise and then would make seniors pay a greater share of that higher cost. It is a cut in benefits plans, plain and simple. If we are serious about reining in Medicare spending, there is a far better starting place than the Ryan budget. It is the health care law passed by Congress last year. Republicans are patting themselves on the back lately for leading on entitlement reform. When it comes to reining in the runaway costs of Medicare, the truth is the President did it first, and he did it better.
In the health care law, we certainly did not complete the job, but we made a good start on reducing waste and inefficiency and duplication in the system. We started down the path of making delivery system reforms. We set up a system for studying the effectiveness of different methods and treatments so that care could be delivered more efficiently. We made a downpayment on shifting the larger health care system away from a fee-for-service model toward a system that pays providers for episodes of care.
The Ryan proposal adopts none of these cost-saving approaches. In fact, his budget calls for the repeal of the health care law altogether. Left unsaid is that this would have the side effect of reopening the doughnut hole, another hit to Medicare beneficiaries.
If the Ryan budget's only goal was to end Medicare, that would be ample cause to work tooth and nail to defeat it, but the Ryan budget doesn't even put most of its savings from ending Medicare toward deficit reduction. Amazingly, it cuts Medicare, ends Medicare as we know it, and takes whatever savings it produces and gives more tax breaks to the wealthiest Americans. That is right. Ryan's budget not only seeks to permanently extend President Bush's tax cuts
for millionaires, he wants to cut their taxes even lower than the Bush levels.
In fact, under the Ryan proposal millionaires would pay a rate so low that it was last seen in the days of Herbert Hoover. What about shared sacrifice? As unbelievable as it sounds, Congressman Ryan wants to give millionaires and billionaires an extra tax break. Ryan's budget proposal would bring down the top rate from 35 percent to 25 percent for those who are very wealthy. This would make for the lowest level of taxing the wealthiest among us since 1931 when the Great Depression was raging and Herbert Hoover was President. This is the trade Congressman Ryan proposes we make: Cut Medicare benefits for seniors so we can afford to give millionaires an extra tax break.
This is exactly the opposite of what the public wants. They don't think the millionaires and billionaires should even be getting George Bush's tax cut, let alone an extra one on top of that. I have nothing against millionaires and billionaires, God bless them. Many of them made their money the good old-fashioned way, but they don't need a tax break when we are cutting health care and everything else. Most Americans agree with me.
In last month's NBC Wall Street Journal poll that asked Americans what proposals they most support to reduce the deficit, 81 percent of Americans, including a majority of Republicans, as I recall, said they would support a tax on millionaires, the highest polling answer. One of the lowest polling answers was--you guessed it--cutting Medicare benefits. So the Ryan budget has its priorities completely upside-down.
You may ask, if Congressman Ryan puts all his savings from Medicare into millionaire tax breaks, how does he propose to achieve any deficit reduction? The answer is, by targeting the programs most important to the middle class.
It turns out that the Republican plan to end Medicare is also a plan to end other important programs. For example, the Republican plan to end Medicare is, additionally, also a plan to cut tens of thousands of teachers. The Republican plan to end Medicare is, additionally, also a plan to cut Head Start for kids. The Republican plan to end Medicare is, additionally, also a plan to cut medical research on diseases such as cancer. The Republican plan to end Medicare is, additionally, also a plan to cut clean energy projects that create jobs and help us become energy independent.
In all, the Ryan plan assumes a steady squeezing of government until, by 2050, the total cost of everything, save for Social Security and health care, is shrunk from 12 percent of the GDP to just 3 percent. But he doesn't spell out a single detail of how to achieve those cuts. He has a number but no specifics. That is the definition of a meat ax approach as opposed to an approach that uses a smart, sharp scalpel.
Even though the Ryan plan doesn't spell out where the cuts would come from to meet his goal, it isn't a total mystery. We can fill in the blanks. The just completed debate on the 2011 fiscal budget offers plenty of hints on the Republican approach to cutting spending. In the debate we just had, Republicans wanted to cut the very programs that create good-paying jobs and help the middle class. They targeted everything from cancer research to financial aid to college. We fended off many of their worst cuts by successfully pushing Republicans to include $17 billion in cuts from the mandatory side. We also got them to agree to reduce Pentagon spending by nearly $3 billion compared to their original budget. This was not the Republican's preferred way to reduce the deficit. Because of ideology, they disproportionately targeted the domestic discretionary part of the budget for cutting.
But our deficit problems weren't caused by Head Start and cancer research, and we won't fix them by going after Head Start and cancer research. In the budget debates to come, we need to broaden the playing field beyond domestic discretionary spending. We should include, for instance, waste in the Defense Department. The Pentagon makes up half of the discretionary side of the budget, but Republicans continue to treat it as off limits. Ryan himself leaves it virtually untouched save for a symbolic trim. To say there isn't waste at the Pentagon like there is waste everywhere else in the budget is absurd.
The bottom line is, any budget that leaves defense and revenues off the table is ultimately not serious. We need an all-of-the-above approach that puts all parts of the budget on the table. A dollar cut from mandatory spending or the Pentagon is just as good as a dollar cut from nondefense discretionary spending.
Deficit reduction is an important goal, but the sacrifice must be shared. The Ryan budget fails that test. The Democratic Senate will not stand for any proposals that seek to balance the budget on the backs of the middle class and seniors. I look forward to hearing the President's remarks tomorrow. As for Congressman Ryan, I encourage him to go back to the drawing board and come up with a fairer, more balanced plan.
I yield the floor.
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