A picture of Senator Daniel Coats
Daniel C.
Republican IN

About Sen. Daniel
  • Executive Session

    by Senator Daniel Coats

    Posted on 2013-02-14

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    COATS. Mr. President, I ask unanimous consent to speak as in morning business.

    The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.

    Mandatory Spending Mr. COATS. Mr. President, earlier this week I outlined four main topics that I hoped to hear the President discuss in his State of the Union Address. Today, I would like to talk in more detail about one of those items and perhaps the most challenging--restructuring Medicare, Medicaid, and Social Security to preserve them for current and future generations.

    In Washington, these three programs fall into the category of mandatory spending, meaning they are not contingent on annual congressional review or funding. Instead, they are based on formulas that have already been written into law, and therefore this spending occurs automatically, as if it is on autopilot. So, anyone who becomes eligible for the program based on the requirements in the law automatically qualifies for the benefits. We do not have the ability on a year-to-year basis to review or change this. We can only make structural changes and reforms to the program as necessary.

    Today these items make up a majority of the government's annual budget. This is because when these programs were implemented they did not take into account the remarkable and wonderful increase in the lifespan of Americans, nor the impact of the post-World War II baby boom generation reaching the point of retirement age, which is now at the level of about 10,000 retirements each and every day of the year. That is putting an enormous strain on the overall budget and the amount in proportion to the budget that goes for funding these mandatory programs.

    After World War II and after a long decade of depression, Americans saw a bright new future. They came home from the war. They began to start families. Millions upon millions of children were born in the post-war period up until the earlier 1960s. This is the so-called baby boom generation.

    Initially, when they were born, certain industries came into play. If you were in the diaper business, suddenly you were in a boom business or cribs and strollers and then tricycles and bicycles. These children moved on to the age where they began to enter elementary school, and we built schools all over the country to accommodate this growth in our population working their way through the system. Then it was junior highs and then we needed to enlarge our high schools, and new colleges and universities sprung up across the land, too. Upon graduation, they found jobs, and it was time to start their own families--housing boomed.

    Throughout the whole lifespan of this baby boom generation, there have been enormous economic changes to adapt to this massive amount of people working their way through life and becoming such an integral part of the American dream and American history.

    We often talk now about this issue in cold hard facts because this generation [[Page S726]] is reaching retirement age, moving into retirement and qualification, for Social Security and Medicare coverage in massive numbers--10,000 or more a day. But when we are talking about it in just cold hard facts and numbers, we tend to ignore the impact of these programs in a much more personal way on our American public.

    Becoming eligible for the programs we are talking about means access to health care during a more difficult time of life. Perhaps you are no longer covered by your employer because you have made the decision to retire or reached retirement age. There are health care issues as we age that we wish did not happen, but they come on in ever-increasing intensity. It means grandparents having enough money to travel to see the kids and a new grandbaby. It means men and women who have worked hard all of their lives to provide for their families finally having the financial freedom to take some time off to retire.

    Hoosiers and Americans all across this land have paid into the system all through their working years. They rely on these health and retirement security programs and their benefits. These are honest, hard-working men and women who have been told that if they made contributions through their paychecks to these programs, they would become eligible at a certain age for a certain standard of coverage. They expect to receive that. So, the challenge before us today is to make sure these benefits continue to be available to both current and future recipients. But, as we examine our Nation's current fiscal state, we all need to come to terms with the fact that these programs will not be available in their current form if we do not make some necessary changes.

    The Heritage Foundation reports that mandatory spending has increased at almost six times faster than all other spending. In other words, spending on Medicare, Medicaid, and Social Security is growing faster than all of our spending on defense, education, infrastructure, medical research, food and drug safety, homeland security, and I do not begin to have the time to list all of the various functions of spending that go toward reaching out and meeting the needs of this country.

    The nonpartisan Congressional Budget Office reported this month that spending on these programs and interest on the debt will consume 91 percent of all Federal revenues 10 years from now. Imagine our budget as being a big pie. It is cut in certain slices in terms of how much money is spent on defense, how much money is spent on mandatory programs, and the amount of money that is spent on all of the other functions in which the Federal Government is engaged. That part of the pie which provides for the automatically entitled mandatory spending benefits is growing at a rate that is unsustainable.

    It is ever shrinking the defense and nondiscretionary part-- everything else we spend money. We spend too much money on too many things so we are going to have to be very careful. I have talked about this many times of how we spend and allocate funds in the future.

    Unless we address this runaway mandatory spending issue, we are not going to be able to have the funds to do even essential constitutionally mandated things, such as providing for our national security and making funds available for paving roads, health care research, education, or whatever else we feel is appropriate for our Federal Government to engage.

    Furthermore, this mandatory spending has enormous impacts on our young people. In a recent New York Times column titled ``Carpe Diem Nation,'' David Brooks wrote about two ways spending on health and retirement programs not only threatens our economic growth but hurts young people. It squeezes government investment programs that boost future growth. Second, the young will have to pay the money back. To cover current obligations, according to the International Monetary Fund, young people will have to pay 35 percent more taxes and receive 35 percent fewer benefits.

    This is the plight that exists. These are the cold hard facts. We have to deal with this math. Understanding how we deal with this directly affects people's lives, directly affects the benefits they rely on for their retirement and for their health care.

    The challenge before us is to understand, if we don't do something, this 35-percent higher taxes and 35-percent fewer benefits on our young is not only unacceptable, I think it is, in my opinion, immoral. Immoral for our generation, for this Congress, and our executive branch to leave our children and grandchildren in such a position without doing something about it. The challenge before us and the goal this body should be striving for is finding common ground--not how to eliminate these programs but about how to save these programs while ensuring we have adequate resources to finance the essential and necessary functions of the Federal Government. This starts with our constitutional obligation to provide for the Nation's security, the security of the American public, as well as providing for the general welfare.

    Republicans and Democrats and conservatives and liberals recognize we need to restructure Medicare, Medicaid, and Social Security if we are serious about putting this country on a sounder fiscal footing and if we are going to be able to keep these programs from becoming insolvent. Hopefully, there are Members on both sides of the political spectrum who agree we need to make the changes now in order to avoid more painful changes later.

    We have been postponing this action and this needed legislative process for decades. It has always been too hot to handle. It is too politically damaging. It might put us in political jeopardy.

    The President, in his State of the Union Address, said it is time we put the interests of our Nation ahead of our own personal political interests. I couldn't agree more. That is what we should always be doing. We have not done that when it comes to this critical issue, which has such an enormous impact on everything we do. It has such an enormous impact on people who have saved all their lives for the benefits they were promised when they retire or became a certain age or the young people in this country who are coming out of school, starting a family, getting a job, hoping to also participate in the American dream, owning a home, and raising a family. We have the freedom our country provides us in ways no other country ever has or perhaps ever will. We are so blessed to have been born in this country, to live in this country, and to have the freedom and the possibility of achieving our dreams.

    All of those are in jeopardy if we don't address this situation. For decades now, we have known what is coming. We have seen a growth in our population of baby boomers moving through their entire lifecycle and are now reaching retirement age. We have postponed this over and over. We have come up with short-term solutions over and over and over and failed to come up with any long-term solutions over and over and over.

    The time is now. We are at the point where if we don't do something now, the prediction of David Brooks is going to take place. Our young people are going to be saddled with ever-higher taxes to hold up a system that is going to only be able to deliver ever-lower benefits.

    As we consider the right path to move forward, we need to acknowledge that any bipartisan congressional effort to reform and preserve these programs will be unsuccessful unless the President shows a willingness to get involved and engage fully in this effort. I believe he understands the magnitude of the issue because he has said: I refuse to leave our children with a debt they cannot repay.

    We all want a government that lives within its means. We need to get our fiscal house in order now. We cannot kick this can down the road. We are at the end of the road, said the President of the United States in comments made when he was a Senator, comments made when he was a candidate for President, comments made when he was President during his first 4 years, and comments made subsequent to that, in his inaugural address, and in his recent State of the Union Address.

    We need more than talk. We need engagement. We need an engagement of the President if we are going to make these difficult decisions to put our country on a better fiscal path and to save these programs for those who have put their hard-earned money and work into them and then not qualify for those benefits.

    [[Page S727]] I would like to take this opportunity to remind the President of his repeated commitment to reduce our debt and deficit. I want to remind him of the many times he has spoken about the need to fix Medicare, Medicaid, and Social Security.

    Now, Mr. President, what I would like to say is this: We need more than your soaring rhetoric. We need more than the promises you made. We need your direct engagement if we are going to address this fiscal crisis and essentially do what I think all of us know we need to do.

    We basically have two options: we may continue with the status quo and wait until the moment that a crisis hits and we may no longer send out the checks; we must raise taxes once again to cover a program that should have received needed reforms or at the point where the programs become solvent. Or, the alternative is that we can come together and commit to the American people that we will act and no longer avoid or delay the challenging and necessary task of fixing these programs to save them for future generations.

    I stand ready. I trust my colleagues stand ready to address this issue now, and we are asking you to stand with us. Let's do what we all know we need to do to restore our Nation's fiscal health, to save these programs from insolvency, to grow our economy, and get Americans back to work. The time is now.

    I yield the floor.

    The ACTING PRESIDENT pro tempore. The Senator from Connecticut.

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