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Concurrent Resolution on the Budget for Fiscal Year 2006 -- Conference Report

Location: Washington, DC



Mr. KENNEDY. Mr. President, I first want to congratulate the Senator from North Dakota and my two other colleagues, my old friend and colleague from Maryland, Senator Sarbanes, and Senator Dorgan, for their excellent presentation in terms of the budgetary impact of this budget.

I think they have explained very clearly, eloquently, and passionately the severe risks that this budget puts in terms of the economic future of this country and its relationships and dependency on other countries throughout the world.

I would like to address another aspect of this budget, and that is with regard to domestic priorities that are front and center for most families in this country. First, I would like to discuss the priority of education, and then, second, the budget cuts in Medicaid, which is a lifeline to millions of children and disabled people and women in our society, and third, the further undermining of our whole pension system, which has been included as part of this budget as well. We are having a great national debate on the issues of Social Security and the integrity of the Social Security fund. Under the provisions of this budget, we are going to find that the availability and the assurance of pensions is going to be seriously undermined and threatened as well.

But as an initial matter, I ask unanimous consent that an excellent statement by the Episcopal Church, the Evangelical Lutheran Church, the Presbyterian Church, the United Church of Christ, and the United Methodist Church, with regard to this budget, be printed in the RECORD.

There being no objection, the material was ordered to be printed in the Record, as follows:


April 28, 2005.

Congress Should Reject This Budget

In response to the FY 2006 Budget Conference Report to be considered by Congress and as a follow-up to a March 8, 2005 press conference calling the President's FY '06 Budget ``unjust,'' five mainline protestant leaders issued the following statement:

On March 8, we as leaders of the Episcopal Church USA, Evangelical Lutheran Church in America, Presbyterian Church (USA), United Church of Christ, and United Methodist Church General Board of Church and Society, issued a joint statement questioning the priorities of President Bush's 2006 Federal Budget. We remembered the Gospel story of Lazarus and the rich man and noted that the 2006 budget had much for the rich man but little for Lazarus. It was our hope that Congress would take action on behalf of ``Lazarus.'' Sadly, all indications are that that has not been the case. Therefore, today we call upon Congress to reject this budget and go back to the drawing boards.

We believe our federal budget is a moral document and should reflect our historic national commitment for those in our own country who suffer from hunger, lack of education, jobs, housing, and medical care as well as concern for our global community. There are good programs that can help solve all of these problems. We know, we have seen them at work and we are doing our part with our own programs. But we cannot do it alone. Government must be a partner in providing opportunities for our fellow women and men to pursue their God given gifts. We commend those who attempted to improve the FY '06 budget by adding funds for Medicaid, education, the Global Fund to Fight AIDS, Tuberculosis, and Malaria, and international family planning. We regret that the speed with which this document is being brought to the floor does not allow time for the careful examination such a document requires.

As we view the FY '06 Federal Budget through our lens of faith this budget, on balance, continues to ask our nation's working poor to pay the cost of a prosperity in which they may never share. We believe this budget remains unjust. It does not adequately address the more than 36 million Americans living below the poverty line, 45 million without health insurance, or the 13 million hungry children. Worldwide it neither provides sufficient development assistance nor adequately addresses the Global AIDS pandemic. Therefore, we ask Congress to reject this budget and begin anew.

We conclude today, as we did March 8, by asking that together we ``pledge ourselves to creating a nation in which economic policies are infused with the spirit of the man who began his public ministry almost 2,000 years ago by proclaiming that God had anointed him ``to bring good news to the poor.''

The Most Reverend Frank T. Griswold,

Presiding Bishop and Primate of the Episcopal Church, USA.

The Right Reverend Mark Hanson,

Presiding Bishop of the Evangelical Lutheran Church in America.

The Reverend Dr. Clifton Kirkpatrick,

Stated Clerk of the General Assembly, Presbyterian Church, (U.S.A.).

The Reverend John H. Thomas,

General Minister and President, United Church of Christ.

Mr. James Winkler,

General Secretary, General Board of Church and Society, United Methodist Church.

Mr. KENNEDY. I will just read a few lines from this statement.

We believe our federal budget is a moral document and should reflect our historic national commitment for those in our own country who suffer from hunger, lack of education, jobs, housing, and medical care, as well as concern for our global community. .....

As we view the FY 2006 Federal Budget through our lens of faith, this budget, on balance, continues to ask our nation's working poor to pay the cost of a prosperity in which they may never share. We believe this budget remains unjust. It does not adequately address the more than 36 million Americans living below the poverty line, the 45 million without health insurance, or the 13 million hungry children ..... Therefore, we ask Congress to reject this budget and begin anew.

Mr. President, with a budget we have a chance to make a difference. We have a chance to make a difference for working families and for millions of Americans who work hard every day, who care for their families, who want the best for their children, their communities, and their country. This budget should make a difference for them. It should be a budget for America, a fair budget that improves the lives of average Americans. That is not this budget.

President Bush and the Republican Congress had a chance to make a difference and they failed. In this budget, they choose instead to lavish more tax breaks on the wealthy at the expense of poor Americans who rely on Medicaid and at the expense of parents who want to send their children to college. It is Medicaid, strike one; education, strike two; and this budget is strike three. We ought to throw it out.

Here is how this budget harms education in America. Education is the golden door to opportunity for our citizens. Parents know that education makes the American dream possible for their children. Education is essential to our future competitiveness and our strength as a nation. We cannot compete in the world without skilled workers. We cannot maintain a strong defense without a skilled and dedicated military.

The budget proposed by the President and the Republican leadership in Congress fails our future. It fails American families struggling to pay for their children's college education. It fails American workers seeking to improve their skills and secure better jobs to support their families. It fails our companies looking for the best workers. It fails our military looking for the brightest recruits.

It weakens America as we strive to compete in the global economy and maintain our security in a dangerous world.

American workers are being battered by the tidal wave of globalization and this budget does nothing for them. Nothing. Since this administration has been in office, 2.8 million manufacturing jobs have been lost. By the year 2015, 3.4 million jobs are at risk of being sent overseas.

This chart demonstrates, according to Forrester Research, one of the most authoritative analytical groups in terms of jobs being outsourced, the job outsourcing projections we are facing. Do you think there was any effort at all in this budget conference to take into consideration this flow line, to be able to take the remedial steps by providing additional skills to our workers, such as training, increasing vocational schools, commitment in terms of adult education, continuing the upgrading of our skills? Absolutely not.

The wages of average workers are going down at a time when the cost of living is going up. At the same time, other nations are producing increased numbers of workers with advanced skills. China, today, is graduating 300,000 engineers; India, 200,000 engineers; the United States of America, 50,000 engineers. Better than half of those foreign nationals who graduate in the sciences from American universities are going back overseas. How are we going to be able to maintain national security? How are we going to be able to maintain our economy with these flow lines?

Look at what has happened since 1975 with regard to American production of scientists and engineers. The United States in 1975 was third in the world. The United States today is 15th in the world and we are in a downward slide.

This Senate said we were going to change that flow line. This Senate went on record by supporting, Republicans and Democrats alike, $5.4 billion to make sure we were going to be able to graduate 50,000 to 60,000 more engineers and scientists a year.

What did this conference do? They said, no, no. Did they say, we will give you 15,000 or 20,000 engineers? No. Or 10,000? No. Or 5,000? No. Or 1,000? No. Zero. Effectively, they zeroed that amendment out that had Democratic and Republican support alike not only with regard to math and science but also with regard to the TRIO Program, the Upward Bound Program, the GEAR UP program, the vocational education program, adult literacy programs, all the programs that provide additional training and help and assistance.

For the first time in a decade, this budget cuts the education budget. Page 34 of this budget, two-thirds of the way down, are the projections of 2005 through 2010. It is cutting our education commitment by some $15 billion over the next 5 years--not increasing it, not even holding its own--cutting education. Rejecting the Senate amendment that added $5.4 billion, the conferees instead cut $15 billion in the discretionary education budget.

If our country is to remain strong in this rapidly changing world, if our economy must work for everyone, every American must have an equal chance at the American dream.

No Child Left Behind is not just a political slogan; it is a solemn pledge to every parent and every child in America. But this budget leaves 3 million children behind. In 2006, 3 million children are left behind. Remember our commitment, that all children were going to reach proficiency over the period of the next 12 years? Under this budget, by 2013, we will be leaving 4.8 million children behind on the projections we have.

This budget cuts student aid, helping young people who would be able to go to college. Where do we find that in this budget? In the reconciliation part, it talks about $13.6 billion in cuts; $7 billion will come from the student aid program and $6.6 billion will come from pensions. That means the companies are going to have an increased tax. Companies will have to pay more into the Pensions Benefit Guaranty Corporation, big companies and small companies. That will discourage companies from maintaining their pension programs. That is what the administration wanted.

We had offsets for our amendment of $5.4 billion. What were the offsets? Closing corporate tax loopholes. Imagine the Republican majority saying all right, Senator Kennedy, maybe you will close the tax loopholes you have identified, but not ours. But that is not the case. Those tax loophole closure provisions already had passed virtually unanimously in the Senate previously. The Senate voted for them and then did not use them, did not close them completely previously. Corporate tax loopholes to pay for education and training: That was the choice for the Budget Committee. And they said no to education, no to training, and yes to the corporate loopholes.

This budget with regard to education, is important not only for those who are going to college but for those who are trying to make it through K-12. Every child and every parent ought to understand the judgment made at the instigation of the leadership of the Republican Party--and this President--to make a reduction of $15 billion in education for the K-12 education; $13 billion in terms of higher education and the pension program; and the elimination of the $5.4 billion. We could have added funding for education. Instead this budget cuts education.

Money is not everything, but it is a clear indication of a country's priorities. What we are talking about with these investments, we were enhancing the Pell grant which would be available to 5.3 million young Americans who are qualified, are talented, and able to go to school but are having hard times making ends meet, and help and assistance to working families. That is what we were interested

in doing. That is what was turned down.

Mr. SARBANES. Would the Senator yield the floor?

Mr. KENNEDY. I yield.

Mr. SARBANES. Wasn't the money in order not to do this to education contained in the Senator's amendment coming from closing corporate tax loopholes that had previously been passed by an overwhelming majority in this Senate?

Mr. KENNEDY. The Senator is absolutely correct. That was passed and accepted by Republicans and Democrats alike on previous legislation and was never incorporated, never utilized, as we say around here. So there had been an agreement that these were the most egregious loopholes and, therefore, we used that as an offset for the increase of the $5.4 billion in education funding.

The conference came back and said, no, we want those loopholes back and we are going to cut education for the neediest children, the TRIO Program, the Upward Bound Program, vocational education, and cut back on scholarship programs for the sons and daughters of working families in middle America. That is what is in this budget in education.

Mr. SARBANES. Isn't it a dramatic demonstration of a choice in priorities, that rather than choosing to fund education, to give young people these opportunities which have been paid for, what they now say is, we had to cut the programs because we have a deficit problem?

The very able Senator from Massachusetts took that into consideration when he proposed his amendment because he wasn't going to add to the deficit. He was going to cover the costs of the amendment by closing these egregious loopholes in corporate taxes. They came along and cut the education programs and allowed the egregious tax loopholes to continue. It is a dramatic demonstration of the priorities of this Republican budget.

Mr. KENNEDY. I was listening to the Senator's comments earlier about the foreign policy implications of debt. He has been active in areas of education. He knows from his own experience in the Foreign Relations Committee, the Banking Committee, the Joint Economic Committee, what is happening in the other countries.

What we saw on the front page of the Washington Post last week was that China was reducing their overall numbers in their military.

What they are doing is enhancing their research and development and education and training programs because they are going to go smaller in terms of the total numbers of people in the military and go more into high-tech military equipment which require high level training and high skills.

Would the Senator not agree with me? They are graduating 300,000 engineers, and India is graduating 200,000 engineers. And General Electric has just moved its top research center over to--where? to Maryland or to Massachusetts? no--to India. And DEC, one of the leading, innovative companies in this country, has just opened their new research facility, hiring 3,000 Indian engineers. We are not just exporting jobs, we are seeing the export of research and technology. And what is our response? Cutting back on training young Americans and giving more tax breaks to individuals.

I say to the Senator, who has been here for years as a member of the Foreign Relations Committee, isn't he troubled by these flow lines, not only with regard to our national security but in terms of our ability to be competitive?

Mr. SARBANES. Absolutely. And the Senator from Massachusetts has been sounding this clarion call. I make reference to the chart the Senator showed earlier, which shows what is happening in terms of our young people going into math and science and engineering as a percent of the 24-year-olds who could go into those fields to develop that kind of competence which we need in the so-called global economy.

Now, as I understand this chart, in 1975, the United States was third in the world, as shown over on the left side of the chart; is that correct?

Mr. KENNEDY. The Senator is----

Mr. SARBANES. In 1975, we were third in the world; is that correct?

Mr. KENNEDY. The Senator is correct.

Mr. SARBANES. We are talking now about math, science, and engineering. Everyone talks about technology, the competition we are engaged in, and so forth. How do you compete in that world if you do not train the people and have the professionals with the skills to do it? We went from being third in the world as to the percentage of our young people going into math, science, and engineering, to where now, as of the year 2000, we are 15th in the world, as I read over on the right side of that chart.

We have slipped all the way back; there are 14 countries ahead of us worldwide in terms of the people they are putting into math, science, and engineering.

Mr. KENNEDY. Well, the Senator is exactly correct. If we think we are going to have the technological advantage in another 20 years, either commercially or militarily, with these kinds of flow lines, then we are dreaming dreams that never will exist. This is absolutely preposterous.

We have had an excellent presentation on the overall economic implications of this conference report, but we are talking about the human investment that makes the difference for us to be No. 1 competitively, both militarily and commercially.

The other point I want to mention to the Senator is that the loopholes we closed were the loopholes that were tax incentives for corporations to move jobs overseas. Do we understand? We, as a country, are concerned or should be concerned about outsourcing, sending jobs overseas. Now we are seeing that not only the jobs are going overseas, the research is going overseas, the education advantage is going overseas, the debt control is going overseas. And we are seeing the incentives to move those jobs overseas with the tax loopholes we closed.

But did the Republican budget conference keep the loopholes closed? No. They restored them. They restored them. They are back, now available to companies to go ahead and outsource American jobs. This is a performance that just defies reason--we heard over the course of the campaign, which was not all that long ago, how everyone was talking about--Republicans and Democrats--what we were going to do about outsourcing. They have given their answer, and they have given it to us tonight.

Mr. SARBANES. Will the Senator yield on that point?


Mr. SARBANES. I want to make sure I understand the Senator on this very point. As I understand it, the tax loopholes, or at least some of the tax loopholes the Senator was closing in order to be able to fund education, were incentives or inducements in the Tax Code to encourage American corporations to move their investment and operations out of the United States and send them overseas. Is that correct?

Mr. KENNEDY. That is correct. It is exactly right. And we had those agreed on, Republican and Democrat alike. I think it was by 76 votes here in the Senate on the FSC-ETI legislation.

So we had the offset of incentives that were moving jobs overseas. We were closing that loophole and investing in able, capable young Americans in higher education, in training teachers for math and science, of which we are in desperate need. No Child Left Behind has the guarantee that we are going to have a well-qualified teacher in every classroom by the year 2006. We are far behind. This would have given us an opportunity to meet that goal.

But most importantly, we would have given the helping hand to many other young people in the TRIO Programs and the Upward Bound Programs and the rest.

Mr. President, over 160 organizations representing students and educators supported our amendment. They generated thousands of calls to their legislators. Just in Massachusetts, I received more than 1,000 letters from adult education students and teachers urging that this amendment be retained,

telling their stories about how adult education is changing their lives for the better. We have letters from colleges and universities across the country urging Congress to increase the Pell grants, to save the Perkins Loans Program. We have letters from students, counselors, and young adults urging us to save college preparation programs for first-generation students, such as TRIO and GEAR UP. Over 600,000 students have sought more information about this amendment.

On their own, five Republican Senators wrote the budget conference committee to tell them this President should support this amendment and the conference committee should support this amendment, and that the education and Pell grants needed their support. Yet this conference rejected all those pleas and cut education.

Now, the Republican leadership and the White House decided it was more important to maintain the loopholes to reward corporations that send jobs overseas rather than invest in our own young people here at home.

Our amendment embraced the hopes and dreams of millions of Americans. All parents want their children to have lives of fulfillment and opportunity, to raise strong and healthy families, and afford to live comfortably in safe neighborhoods.

When we first debated this resolution a little over a month ago, a majority in the Senate said no to the President's cuts in education. Today, a majority of the Senate should say no again. We should stop the raid on student aid and pass a budget that strengthens, not weakens, America.

Now, Mr. President, on another subject, just last month the Senate made it clear that cuts to the Medicaid Program were unacceptable. In a bipartisan vote, we agreed to not make any cuts until a bipartisan commission had time to examine the Medicaid Program and recommend possible reforms based on sound policy. Just this week, in an overwhelming, bipartisan vote, the House instructed the budget conferees not to cut Medicaid.

Yet the budget we will be voting on shortly not only cuts Medicaid--despite consensus in both the House and Senate against cuts--its cuts to the program are almost as deep as those we voted down in March. The Senate rejected the $15 billion in cuts to the Finance Committee. Yet this budget report that was drafted in the dark of night behind closed doors forces the Finance Committee to cut $10 billion.

If these cuts were not bad enough, the bipartisan Medicaid Commission has turned into a partisan commission that the administration can stack with members they know will recommend the cuts they have determined. Instead of a real examination of the Medicaid Program so that we can modernize the program with needed reforms, we will have a commission whose agenda will be to recommend cuts.

It is not just Medicaid that is at risk. What does it say about Republican priorities if this Republican budget cuts a program that provides health care for 53 million low-income Americans--children, parents, the elderly, and the disabled--in order to provide large, new tax cuts for the wealthy?

Republicans say they are for a culture of life, but Medicaid sustains that life. One-third of all the births in America are covered by Medicaid. Medicaid sustains life for a third of our mothers and our babies.

But this budget says the lives of poor mothers and poor children are not that important after all. Under this budget, tax breaks for the rich are more important than life itself.

I want to show you what has happened with regard to low-income children. Since 1997, 23 percent of children in America were not covered. Now we have reduced that to 15 percent. We are making very important progress in terms of providing some insurance for children. But now with this budget, we are going to see this line go back up because of the following.

If you look at this chart, you will see what is happening to children and also to low-income parents. The total number of low-income children has increased by 6.7 percent and 5.5 percent in terms of low-income parents who have lost their health insurance. We have seen a 1.7-percent growth in the Medicaid Program and an increase of 8 percent to cover low-income children. So we are making some progress, but not with this budget.

This budget takes away those gains for children. Take them away from the elderly. Take them away from the services for expectant mothers who are delivering. That is what this budget does, and that is what is so incredibly wrong in terms of this budget.

We know the harmful consequences of the lack of access to health care. In the early 1960s, President Kennedy commissioned a study to find out why half of our young military draftees were rejected for service. The study, which was released in 1964 and provided the basis for Medicaid coverage policy for children, found these young men had physical and mental developmental problems that were highly treatable if they had had access to health care as children. As a result, the Medicaid program was set up. That is the basis for it. And we have made enormous progress. Now we are going to see the undermining of that program.

Finally, Mr. President, the budget also includes a reserve fund for the Grassley-Kennedy bill to provide health coverage for families with disabled children. The bill is titled the ``Family Opportunity Act.''

For the last 5 years, Senator Grassley and I have been fighting to get this legislation passed.

The Family Opportunity Act allows families of children with severe disabilities to buy health care coverage under the Medicaid program, without becoming poor, staying poor, or giving up custody of your child. It is legislation cosponsored by more than half of the United States Senate and over 200 disability, health care and other organizations.

Almost one in ten children in America has significant disabilities. But many do not have access to even the most basic health services they need because the private health insurance won't cover them.

In every one of these plans you read numerous exclusions that hurt children with disabilities--no coverage for hearing aids, for special health needs, for assistive technology, for services at school, and on and on and on.

These families aren't looking for a hand-out--just a helping hand. All they want is the opportunity to buy affordable coverage, because the private health insurance market won't offer it to them.

More than any other investment we can make in this budget, we should secure funding for these families who struggle everyday to afford the health care their children need to live healthy and successful lives.

I hope that we can finally see this profamily bill enacted into law this year.

The budget sets up a reserve fund for Senate action to bring the benefits of information technology to our inefficient health care system. Unfortunately, a similar reserve fund is not available for House action.

Information technology has revolutionized virtually every industry in America--only health care lags behind.

IT is critical to our efforts to bring costs down and improve quality. It can provide for more efficient delivery of care, and it can reduce errors and increase quality. HHS estimates that widespread use of IT can save as much as $140 billion a year.

The VA has implemented the most advanced IT system in the country over the past few years. The results have been remarkable. Since 1996, VA costs per patient have actually decreased 7 percent, while private sector costs per patient have increased by 62 percent. During this period, the VA has been widely recognized for improving its quality of care.

Obviously, not all of these successes have been due to information technology--but the VA system thinks that much of it has.

We have a tremendous opportunity to improve the ability of IT to make a real difference in the quality and efficiency of health care--but we have to act now.

I commend Senator Gregg and Senator Conrad for working with the chairman of our Health Committee, Senator Enzi, and me as well as Senator Grassley and Senator Baucus on the Finance Committee--to include this fund in the budget.

The fund is a small step in the right direction, but it will be a wasted step unless Congress enacts legislation to improve the use of health IT in America.

The two key components of any legislation, in my view are incentives for hospitals and health care providers to use IT to improve quality and in acquiring IT. Part of this effort is developing technical standards in partnership with the private sector to ensure that the money is spent on systems that really enhance quality.

Our economic competitors in Europe and elsewhere are making the investments needed to improve their health IT systems. The British are investing over $15 billion, yet we in this country continue to delay.

IT can cut costs in many ways. Our fragmented and uncoordinated health care system imposes high costs in duplication and waste. Patients with multiple chronic illnesses see as many as fourteen doctors a year.

Doctors repeat tests that have already been performed. Residents take histories that have already been taken. Patients show up for doctors' appointments that are essentially a waste of time because tests have been performed but the results have not been delivered.

It has been estimated that one in seven hospitalizations could be avoided if complete medical records were available for the patient. One out of five laboratory tests are duplicative of ones that have already been performed. This adds up to immense amounts of money. IT can reduce this needless duplication.

We as a nation cannot afford to miss this opportunity to make the investments needed to improve health care and cut costs.

My time is about up, but I must comment on how this budget resolution also attacks our defined benefits system. Pensions are more important than ever. We know of the assault that is on the very nature Social Security. Separate from Social Security, the number of secured, defined benefit plans is going down. This particular budget increases the premium tax on employers with a heavy burden on manufacturing companies. It will hurt small businesses. These premium increases will obviously hurt many workers and retirees, and it will also jeopardize long-term retirement stability. Pensions are important. They are a part of the quality of life for working American families. This budget does a disservice for them as well.

I hope this budget will be rejected.


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