[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
            SETTING FISCAL PRIORITIES IN HEALTH CARE FUNDING

=======================================================================


                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 9, 2011

                               __________

                           Serial No. 112-17




      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov





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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    HENRY A. WAXMAN, California
  Chairman Emeritus                    Ranking Member
CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
  Vice Chair                         DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California         JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire       TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia                MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana             ANTHONY D. WEINER, New York
ROBERT E. LATTA, Ohio                JIM MATHESON, Utah
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi            JOHN BARROW, Georgia
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin 
BRETT GUTHRIE, Kentucky              Islands
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

                                 7_____

                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois               EDOLPHUS TOWNS, New York
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
PHIL GINGREY, Georgia                TAMMY BALDWIN, Wisconsin
ROBERT E. LATTA, Ohio                MIKE ROSS, Arkansas
CATHY McMORRIS RODGERS, Washington   ANTHONY D. WEINER, New York
LEONARD LANCE, New Jersey            HENRY A. WAXMAN, California (ex 
BILL CASSIDY, Louisiana                  officio)
BRETT GUTHRIE, Kentucky
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)]


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     2
    Prepared statement...........................................     3
Hon. Frank Pallone Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     4
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     6
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     8
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................     9
    Prepared statement...........................................    10
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................   132

                               Witnesses

Ernest J. Istook, Distinguished Fellow, The Heritage Foundation..    11
    Prepared statement...........................................    13
    Answers to submitted questions...............................   135
John C. Goodman, President and CEO, National Center for Policy 
  Analysis.......................................................    16
    Prepared statement...........................................    18
    Answers to submitted questions...............................   136
Joseph F. Vitale, New Jersey State Senate........................    30
    Prepared statement...........................................    32

                           Submitted Material

Letter of March 8, 2011, from 10 public health commissioners to 
  House and Senate leaders, submitted by Mr. Engel...............    56
Letter of January 24, 2011, from the National Governors 
  Association to Congressional leadership, submitted by Mr. Lance    63
Letter of March 1, 2011, from Chris Christie, Governor, State of 
  New Jersey, to Mr. Upton, submitted by Mr. Lance...............    68
Letter of March 9, 2011, from Sarah Audelo and Jen Heitel Yakush, 
  Co-Chairs, Sex Education Coalition, to subcommittee members, 
  submitted by Mrs. Capps........................................    74
Statement of the American Nurses Association, dated March 8, 
  2011, submitted by Mrs. Capps..................................    78
Letter of September 16, 2009, from Mr. Barton, Mr. Burgess and 
  Hon. Kay Granger to colleagues concerning JPS School-Based 
  Health Clinics, submitted by Mrs. Capps........................    80
Statement of Senator Tom Harkin, submitted by Mr. Waxman.........    88
Statement on behalf of Jeffrey Levi, Executive Director, Trust 
  for America's Health, submitted by Mr. Pallone.................   102
Letter of March 8, 2011, from Alan Weil, Executive Director, 
  National Academy for State Health Policy, to Mr. Pallone.......   124
``The Pitts Proposal to Block Mandatory Funding in the Affordable 
  Care Act,'' report dated March 2011, submitted by Mr. Pallone..   128


            SETTING FISCAL PRIORITIES IN HEALTH CARE FUNDING

                              ----------                              


                        WEDNESDAY, MARCH 9, 2011

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:33 a.m., in 
room 2322 of the Rayburn House Office Building, Hon. Joe Pitts 
(chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Burgess, Shimkus, 
Rogers, Murphy, Blackburn, Gingrey, Latta, McMorris Rodgers, 
Lance, Cassidy, Guthrie, Barton, Pallone, Dingell, Engel, 
Capps, Schakowsky, Gonzalez, Baldwin, Weiner, and Waxman (ex 
officio).
    Staff present: Clay Alspach, Counsel, Health; Howard Cohen, 
Chief Health Counsel; Brenda Destro, Professional Staff Member, 
Health; Paul Edattel, Professional Staff Member, Health; Julie 
Goon, Health Policy Advisor; Todd Harrison, Chief Counsel, 
Oversight/Investigations; Debbee Keller, Press Secretary; Ryan 
Long, Chief Counsel, Health; Carly McWilliams, Legislative 
Clerk; Monica Popp, Professional Staff Member, Health; Krista 
Rosenthall, Counsel to Chairman Emeritus; Heidi Stirrup, Health 
Policy Coordinator; Tom Wilbur, Staff Assistant; Jimmy Widmer, 
Health Intern; Phil Barnett, Democratic Staff Director; Stephen 
Cha, Democratic Senior Professional Staff Member; Alli Corr, 
Democratic Policy Analyst; Tim Gronniger, Democratic Senior 
Professional Staff Member; Purvee Kempf, Democratic Senior 
Counsel; Karen Lightfoot, Democratic Communications Director, 
and Senior Policy Advisor; Karen Nelson, Democratic Deputy 
Committee Staff Director for Health; Mitch Smiley, Democratic 
Assistant Clerk; and Lindsay Vidal, Democratic Press Secretary.
    Mr. Pitts. The subcommittee will come to order. Just a word 
about this morning's proceedings. Because we have a joint 
session of Congress today at 11:00, we will begin our hearing 
at 10:30 with members' opening statements and then recess 
shortly before 11:00 for members to move to the Capitol for the 
session at 11:00. We will reconvene our hearing immediately 
following the joint session at 12:15 and start with our 
introductions of witnesses, their 5-minute statements followed 
by the members' questions under the 5-minute rule. The chair 
will recognize himself for an opening statement for 5 minutes.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    The title of this hearing is ``Setting Fiscal Priorities in 
Health Care Funding.'' And that is exactly what we must do: 
Assess and prioritize all of the things that we need to do and 
would like to do and then make difficult funding decisions with 
limited amounts of money.
    Today, we will address five areas of the health reform law 
and determine if these funding streams are needed, if these 
programs are funded at the most responsible levels, and if they 
should be mandatory or discretionary.
    Section 4002 of PPACA establishes a Prevention and Public 
Health Fund ``to provide for expanded and sustained national 
investment in prevention and public health programs to improve 
health and help restrain the rate of growth in private and 
public sector health care costs.'' The section authorizes the 
appropriation of, and appropriates to the fund from the 
Treasury, the following amounts: $500 million for fiscal year 
2010; $750 million for 2011; $1 billion for 2012; $1.25 billion 
for fiscal year 2013; and $1.5 billion for 2014, and for fiscal 
year 2015 and every fiscal year thereafter $2 billion.
    The Secretary has full authority to use this account to 
fund any programs or activities under the Public Health Service 
Act that she chooses, without Congressional oversight.
    On June 18, 2010, HHS announced $250 million in Prevention 
and Public Health Fund dollars would go ``to support prevention 
activities and develop the Nation's public health 
infrastructure.'' On September 27, 2010, HHS announced another 
$320 million in grants from the fund to expand the primary care 
workforce. And on February 9, 2011, HHS announced an additional 
$750 million from the fund for various prevention activities, 
including preventing tobacco use, obesity, heart disease, 
stroke and other diseases, and increasing immunizations.
    The goals of these three disbursements from the fund are 
laudable, and there is no doubt that we must focus on 
preventing disease. But we must remember that this funding is 
over and above the amount that Congress has decided should go 
to these activities and the amount that Congress has already 
appropriated for these activities. It is also disbursed at the 
sole discretion of the Secretary.
    Last Thursday I asked Secretary Sebelius whether she needed 
further Congressional approval to spend the money from the 4002 
fund, and she answered no. I then asked her if she could fund 
activities above and beyond the level Congress appropriated, 
and she stated yes. This should concern every Member that we 
have a created a slush fund that the Secretary can spend from 
without any Congressional oversight or approval.
    By eliminating this fund, we are not cutting any specific 
program or activity. We are reclaiming our oversight role of 
how federal taxpayer dollars should be used.
    [The prepared statement of Mr. Pitts follows:]

               Prepared Statement of Hon. Joseph R. Pitts

    The subcommittee will come to order.
    The Chair will recognize himself for an opening statement.
    The title of this hearing is ``Setting Fiscal Priorities in 
Health Care Funding.''
    And that is exactly what we must do: Assess and prioritize 
all of the things that we need to do and would like to do and 
then make difficult funding decisions with limited amounts of 
money.
    Today, we will address five areas of the health reform law 
- and determine if these funding streams are needed, if these 
programs are funded at the most responsible levels, and if they 
should be mandatory or discretionary.
    Sec. 4002 of PPACA establishes a Prevention and Public 
Health Fund "to provide for expanded and sustained national 
investment in prevention and public health programs to improve 
health and help restrain the rate of growth in private and 
public sector health care costs."
    The section authorizes the appropriation of, and 
appropriates to the fund from the Treasury, the following 
amounts: $500 million for FY2010; $750 million for FY2011; 
$1.00 billion for FY2012; $1.25 billion for FY2013; $1.50 
billion for FY2014; and for FY2015 and every fiscal year 
thereafter $2.00 billion.
    The Secretary has the full authority to use this account to 
fund any programs or activities under the Public Health Service 
Act that she chooses, without Congressional oversight.
    On June 18, 2010, HHS announced $250 million in Prevention 
and Public Health Fund dollars would go "to support prevention 
activities and develop the nation's public health 
infrastructure."
    On September 27, 2010, HHS announced another $320 million 
in grants from the Fund to "expand the primary care workforce."
    And on February 9, 2011, HHS announced an additional $750 
million from the Fund for various prevention activities, 
including preventing tobacco use, obesity, heart disease, 
stroke, and other diseases, and increasing immunizations.
    The goals of these three disbursements from the Fund are 
laudable, and there is no doubt that we must focus on 
preventing disease.
    But, we must remember that this funding is over and above 
the amount that Congress has decided should go to these 
activities and the amount that Congress has already 
appropriated for these activities. It is also disbursed at the 
sole discretion of the Secretary.
    Last Thursday I asked Secretary Sebelius whether she needed 
further Congressional approval to spend the money from the 4002 
fund, and she answered no.
    I then asked her if she could fund activities above and 
beyond the level Congress appropriated, and she stated yes.
    This should concern every Member that we have a created a 
slush fund that the Secretary can spend from without any 
Congressional oversight or approval.
    By eliminating this fund, we are not cutting any specific 
program or activity. We are reclaiming our oversight role of 
how federal taxpayer dollars should be used.

    Mr. Pitts. At this time I will yield 1 minute to the 
gentleman from Texas, Mr. Barton.
    Mr. Barton. Thank you, Mr. Chairman.
    I want to welcome especially Dr. Istook and Dr. Goodman. 
They are both personal friends of mine, and Mr. Istook is a 
former Congressman.
    This is a very important hearing, Mr. Chairman, because we 
are coming to find out every day more and more things about the 
health care law that should be of concern to every American 
citizen. The ability of the Secretary of HHS without any 
oversight or any authorization of the Congress to spend such 
sums as necessary which could total into the billions of 
dollars is something that should concern everybody in this 
room, and this hearing to look into that part of the law and 
then look at some of the other specific sums that are 
authorized, if we are really going to get spending under 
control, this is ground zero for starting it.
    So I appreciate you holding the hearing. I appreciate all 
three witnesses for being here. And again to Dr. Goodman and 
Mr. Istook personally, welcome to the committee.
    Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and yields the 
remaining time to Mr. Latta from Ohio.
    Mr. Latta. Thank you, Mr. Chairman, for holding this 
hearing today on fiscal priorities for health care spending. As 
we continue to discover more and more details of the 
ramifications of Obamacare, I am extremely troubled by the fact 
that this bill put in place programs and spending that bypass 
Congress and gives full control to the Administration.
    There are several programs that have been identified in 
Obamacare that are duplicative government programs as well as 
mandatory spending programs. I have grave concerns about these 
duplications and the fact that the programs contained in 
section 2953 are of this nature. I am very supportive of the 
discussion draft before us that will convert the appropriation 
of payment in this section of $75 million for each of the 
fiscal years 2010 through 2014 into an authorization. Congress 
needs to be the one that determines funding for these programs 
and determines if in fact they are duplicative and determine 
this through the normal appropriations process. Making this 
change could potentially save $375 million over 5 years. We 
must get our fiscal house in order and there are many more 
savings by further repealing Obamacare.
    This past month, the Congressional Research Service updated 
an October 2010 report that appropriations and fund transfers 
in the Patient Protection and Affordable Care Act. The new 
report found that unbeknownst to almost every Member of 
Congress, that Obamacare contains $150 in direct implementation 
spending to bypass this Congress's normal appropriation 
process.
    Thank you, Mr. Chairman, and I yield back.
    Mr. Pitts. The gentleman's time is expired. The chair 
yields for 5 minutes for opening statement to Ranking Member 
Pallone.

 OPENING STATEMENT OF HON. FRANK PALLONE JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman.
    Here we go again, same song, different verse, another 
hearing that continues the Republican hollow agenda of round-
the-clock complaints of Democrat legislation without a glimmer 
of their own innovation or substance. The American people can 
do the math. Ten weeks, zero jobs bills from the GOP. Months 
after the election, Republicans continue to put partisan 
politics ahead of Americans' top priority, which is jobs.
    But I should say, I welcome the opportunity to talk about 
health care reform and health security. I am very proud of the 
benefits it will bring to millions of hardworking Americans 
nationwide and for the families that live in every single 
Congressional district of the members of this committee. So 
while I welcome an honest discussion about reform, the issues 
raised today border on the absurd, in my opinion. The 
Republicans couldn't be more hypocritical with their seeming 
concern about the use of mandatory funding for some of the 
programs in health care reform. This hearing isn't about 
funding streams, it is simply an effort to dismantle the health 
care reform law block by block by cherry-picking policies they 
don't care for without offering any solutions in return. The 
truth of the matter is, the last time Republicans were in 
charge, they embraced mandatory health care funding and they 
used it regularly in bills that passed through the Energy and 
Commerce Committee. The Medicare Modernization Act of 2003, I 
am sure we all remember that bill. It passed in the middle of 
the night after a 3-hour vote was held open on the floor, and 
that bill was chockfull of mandatory goodies. There was the 
$1.5 billion to fund start-up administrative costs for 
implementation of MMA and there was an unlimited appropriation 
to fund the transitional drug assistance program and there were 
a few hundred million in change for a health infrastructure 
program and another billion for emergency health services, all 
mandatory funding.
    Then you can fast-forward a couple years and the committee 
once again decided to use mandatory funding for billions of 
dollars worth of programs throughout the so-called Deficit 
Reduction Act of 2005, and I could spend my whole 5 minutes on 
that but I am going to spare you that one.
    The fact is that key programs under the jurisdiction of the 
Energy and Commerce Committee are and continue to be funded 
through mandatory spending authority. It is the way to ensure 
an adequate and sustained funding stream to ensure the success 
of important programs. And for the Republicans who cry foul 
because we happened to utilize this tool in the Affordable Care 
Act is simply not credible, and it continues to amaze me how 
the Republicans cry States' rights, States' rights at every 
turn and then undermine that same principle with gusto. They 
want to eliminate all the funding for State health exchange 
grants to tie the States' hands and you are not only going to 
throw an unfunded mandate on them but in effect you are ceding 
States' powers to the Federal Government and telling HHS to 
step in and tell States what insurance exchange model will work 
best for them. That wasn't our policy. We wanted State 
innovation in the health care reform bill, and we urge our 
Republican colleagues to rethink their misguided proposal.
    As much as I disagree with the basis of this hearing, I am 
pleased to welcome my good friend, State Senator Joe Vitale, 
who is from New Jersey, who has testified before us several 
times on health care reform, and he will talk about how health 
care reform will help millions of New Jersey families and how 
New Jersey already benefited from more than $3 million in 
critical funding from the Prevention and Public Health Fund.
    So at this time I would like to yield 1 minute to the 
gentleman from New York, Mr. Engel.
    Mr. Engel. I thank my friend for yielding, and I agree with 
your sentiments.
    Mr. Chairman, this hearing calls to mind the classic line 
from Yogi Berra, ``It's deja vu all over again.'' This hearing 
really isn't about the difference between mandatory and 
discretionary funding, this hearing is really another veiled 
attempt to undermine the Affordable Care Act and prevent 30 
million Americans from accessing affordable health coverage. 
According to the Majority, the Affordable Care Act was 
``unusual in that it created mandatory spending on programs 
that would otherwise be considered discretionary.'' It seems my 
friends on the other side of the aisle have a short memory. The 
Republican Majority mandated open-ended spending on new 
programs in the Medicare Prescription Drug Improvement and 
Modernization Act and the Deficit Reduction Act, both of which 
have resulted in billions of dollars spent outside of the 
appropriations process and worst of all were unpaid-for federal 
mandates. No jobs created by the Majority, just tax breaks for 
the rich and big corporations, blowing a hole in the deficit 
and again and again and again, day in and day out, attempts to 
repeal the health care law, which is already helping millions 
and millions of Americans.
    I yield back.
    Mr. Pallone. Whatever time I have left I yield to Ms. 
Schakowsky.
    Ms. Schakowsky. Let us take a look at FactCheck.org. This 
ridiculous idea that somehow there is a dirty little secret, as 
our former colleague, Mr. Istook, said in the bill--what it is 
really about is what he said, pulling out Obamacare weed by 
weed. This is another attempt to repeal the legislation that 
will help 30 million Americans.
    I look forward to having this conversation with Mr. Istook.
    Mr. Pitts. The gentleman's time is expired. The chair 
recognizes the vice chair of the committee, Dr. Burgess, for 3 
minutes.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. I thank the chair for the recognition.
    So here we are just 2 weeks shy of the anniversary date of 
that big signing ceremony down at the East Room of the White 
House. We all remember how the Vice President characterized 
that morning.
    But this bill does represent, this law now represents a 
fundamental change in the relationship of the government with 
the people. We have gone from government with the consent of 
the governed to now the government telling the governed what 
they should get and when they should get it. Remember President 
Obama when he was running in 2008? He made two promises. One 
was if you like what you have, you can keep it, and the other 
was, we have to control costs, that way more people can buy 
insurance. Actually not bad ideas. What happened to, if you 
like what you have, you can keep it? Well, apparently that is 
gone by the wayside, and what the American people told us in 
the difficult summer of 2009 was, we are scared to death you 
are going to screw up what we have, please don't do that, and 
the other part of that equation was, could you do something to 
help us with costs because we are dreadfully concerned about 
the costs of health care. Turns out with the signing of this 
law, we screwed up what was working and we exploded the cost.
    Now, I do understand the difference between an authorizer 
and an appropriator. I have been an authorizer during my short 
Congressional tenure. Mr. Istook when he was here was an 
appropriator. My first field trip out to the NIH, I was taken 
to all of these big beautiful buildings, all named after 
appropriators. I said where is the building named after the 
authorizer; there aren't any. But I do understand the very 
fundamental nature of what we do as an authorizing committee. 
It is our heritage, and our strength comes from carefully 
investigating and carefully vetting those expenditures that we 
then pass off to the appropriators to eventually write the 
check, and the oversight function that occurs at the 
authorization level is something which cannot be minimized. We 
have gone through almost a year of this. In fact, we went 
through the first 10 months before we had a single oversight 
hearing from any of the relevant federal agencies over just 
what was going on with the implementation of this.
    Now, look, we are hearing today about the problems with the 
federal budget. February, $223 billion overdraft. February, I 
might remind people, is the shortest month of the year. That 
means that is as good as it going to get this year, $223 
billion overdraft, and what do we get for it? Do you see new 
clinics, do you see new schools? No, what you see is an 
overdraft, and it gets worse because as this thing is 
implemented, we go on to subsidies to middle-class families in 
the exchange to help them buy health insurance and the answer 
there is a tap with a high-pressure line into the federal 
Treasury. That $223 billion deficit is something for which we 
all wax nostalgic after that kicks in in this bill.
    The mandatory spending which we are all talking about needs 
to be brought back under the control of this committee and be 
authorized. You don't have to be against something just because 
you want to label it ``mandatory.'' It simply means you want to 
have the correct amount of Congressional oversight.
    Let me yield at this point to the gentleman from Kentucky.
    Mr. Guthrie. Thank you, Mr. Chairman, and I thank the 
gentleman for yielding.
    You know, we are all working on jobs. Everywhere you go, 
you hear people and businesses are sitting on the sidelines not 
investing because they are not sure how much their employees 
are going to cost them because of the expense that is coming 
because of this bill, and also we need to address spending so 
American people and businesses can have money to create jobs. 
And every day families across this country are sitting around 
trying to figure out what to spend their money on, and I 
believe Congress should follow suit.
    Unfortunately, during the annual appropriations process, 
Congress's equivalent of a family budget, a number of federal 
programs are off-limits because they are created as mandatory 
spending and not discretionary. These programs are subject to 
the same scrutiny or evaluated for effectiveness in order to 
earn their continued funding.
    The new health care law created an unprecedented number of 
these mandatory programs. One that we will discuss today is an 
authorization of a mandatory spending program for graduate 
medical education. While I support graduate medical education 
and believe we need more residency physicians, particularly 
primary care, I support shifting this program to an 
authorization. This program should not be protected and 
prioritized over other similar programs. This change is not 
only fiscally responsible but good policy.
    Thank you, Mr. Chairman, and I yield back the balance of my 
time.
    Mr. Pitts. The chair thanks the gentleman and yields 5 
minutes to the ranking Member, Mr. Waxman.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you, Mr. Chairman.
    What the Republicans are conjuring up today is a completely 
contrived issue about funding for the Affordable Care Act that 
is entirely false and misleading. Don't fall for it. 
Republicans are trying to turn back the clock on the Affordable 
Care Act, a law that reduces the deficit by over $210 billion 
in the next decade, expands the health care coverage to 32 
million people, closes the Medicare drug doughnut hole, 
provides free preventive care under Medicare and strengthens 
the Medicare trust fund, and it prohibits predatory, abusive 
behavior by insurance companies. It addresses public health 
challenges that confront our Nation such as obesity and health 
disparities through support of the public health 
infrastructure.
    This hearing is about having appropriate resources to fund 
the Affordable Care Act. The Republicans tried to repeal that 
law but they weren't successful, so now they are trying to 
defund it in another way.
    Every member of this committee has a history of voting for 
both mandatory and discretionary spending. In fact, a 
Republican-led Congress passed legislation that included over 
$400 billion of mandatory spending that was not paid for in the 
Medicare drug bill.
    It is a fundamental part of the responsibility of an 
authorizing committee like Energy and Commerce that has 
jurisdiction over programs like Medicare, Medicaid and CHIP to 
determine where mandatory funding is needed to ensure a 
program's sustainability. Similarly, assuring funding to 
implement and support the Affordable Care Act is critical to 
its viability and success.
    The legislative proposals being discussed today are marked 
by irony and hypocrisy. For example, one proposal repeals the 
monies for the States to establish their exchanges. Just last 
week we had a hearing where Republicans argued the need for 
State flexibility under health reform and discussed the fiscal 
constraints that face States today. This proposal would take 
away monies that allow the States to do the work necessary to 
design a health insurance exchange that meets the needs of 
their residents.
    Our members have been discussing the need for expanding the 
health care workforce, especially primary care physicians to 
serve the growing demands for service. According to his 
testimony, Dr. Goodman agrees. It is ironic that one of the 
Republican proposals cuts support from our health care 
workforce. In a third proposal, they claim that education 
programs aimed at decreasing teen pregnancies should not have a 
stable funding source. However, Republicans, including 
Representative Istook, fully support mandatory funding for 
abstinence-only programs and have voted numerous times for such 
programs.
    Well, I look forward, I suppose, to hearing from our 
witnesses and seeing where this bill will go. I want to 
apologize ahead of time. I will need to leave this committee to 
attend another hearing in another subcommittee. I want to yield 
my 1 minute to Ms. Capps and then take back my time after that 
to yield further to Mr. Dingell.
    Mrs. Capps. Thank you, Mr. Waxman.
    I will add that today's hearing is another effort by this 
subcommittee to do everything it can to repeal the Affordable 
Care Act and avoid the issue Americans care most about, which 
is jobs. But unlike previous efforts that just ignored job 
creation altogether, today's hearing is on legislation that 
will flat out hurt our economy and keep people out of the 
workforce.
    For example, the school-based health center construction 
grants will enhance the health of children and their families 
but also stimulate the economy of local communities with new 
construction jobs. Similarly, the teaching health centers 
program not only expands primary care services to those who 
need it most but also trains new providers with the expertise 
needed to serve these expanding populations. The Republican 
majority has placed both of these programs on the chopping 
block. Let us be clear: These proposals take away funding from 
shovel-ready projects in our communities and they keep 
qualified applicants away from the primary care workforce.
    I know many of our colleagues will say that our budget 
requires us to make tough calls. It is not being tough to go 
after kids and the underserved. These aren't tough calls; they 
are bad calls.
    I yield back the balance of my time to Mr. Waxman.
    Mr. Waxman. Thank you very much. I want to yield 1 minute 
to the distinguished chairman emeritus of our committee, Mr. 
Dingell.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Dingell. Thank you very much for that. I appreciate 
your courtesy.
    Today's hearing is a wasted opportunity to have a 
substantive conversation as to how this committee can work 
together in a bipartisan fashion to further improve our health 
care system. I understand that the Majority has concerns about 
the reform. So do we. But we have also heard repeatedly about 
how the health care reform law will destroy State budgets, kill 
jobs, drive up health care costs and overwhelm Medicare and 
Medicaid. But I see nothing that they are putting on the table 
to address these problems.
    And while my colleagues take great joy in extolling the 
problems of the health care reform law, they have not brought 
forward a single substantive suggestion for improvement. We can 
see clearly from the five discussion drafts before us today 
that the Majority has no intention of working with the Minority 
to improve the health care reform law.
    I have long said that no law is perfect. The last perfect 
law that came into the hands of men came on stone tablets off 
the top of Mount Sinai in the hands of Moses, and I believe 
that we are going to find that the draft legislation that you 
have submitted to us or will be submitting to us is going to be 
bad legislation, and indeed, you are letting the perfect be the 
enemy of the good.
    It is my sincere hope that this committee will work 
together to improve this bill and not blindly tear it down. 
Further, I hope that the next hearing before this subcommittee 
will take some time to deal with the real problems in health 
reform and not the politics. Thank you.
    [The prepared statement of Mr. Dingell follows:]

               Prepared Statement of Hon. John D. Dingell

    Thank you, Mr. Chairman.
    Today's hearing is yet another example of the Majority's 
strong commitment to improving the Affordable Care Act.
    Rather than bringing substantive suggestions as to how we 
can work today to improve our health system, the Majority comes 
to the table once again with a sledgehammer and a long list of 
myths about what health reform will do.
    The Majority continues to warn about the dangers and 
deficiencies in the health reform. It is their misguided belief 
that the health reform law will destroy State budgets, kill 
jobs, drive up health care costs, and overwhelm Medicare and 
Medicaid.
    And while my colleagues seem to take great joy in extolling 
the problems with the health reform law, they have yet to bring 
a single, substantive suggestion for improvement. You can see 
clearly from the five discussion drafts before us today that 
the Majority has no intention of working with the Minority to 
improve the health reform law.
    The process of drafting good legislation is a difficult 
one, but as Members of Congress it is our responsibility to 
draft legislation that will improve the lives of our 
constituents and communities. A straight repeal of the funding 
for these public health programs is not in the interest of 
American families, it is not in the interest of public health, 
and it is not in the interest of State budgets.
    I have long said that no law is perfect, and I strongly 
believe that as you draft legislation you cannot let the 
perfect be the enemy of the good. I hope to work with my 
colleagues to improve this bill and not blindly tear it down. I 
hope that the next hearing before this subcommittee will deal 
with the substance and not the politics.

    Mr. Pitts. The gentleman's time is expired. The opening 
statements are concluded. We will recess for the joint session 
at 11:00. The joint session may end early, so I would urge the 
members to return 15 minutes after the close of the joint 
session. So we will recess until approximately 12:00 or before 
if we can do that.
    The committee is in recess.
    [Recess.]
    Mr. Pitts. The time of recess having expired, the 
subcommittee will come to order, and I would like to welcome 
the three witnesses at this time. Note that your written 
testimony will be entered into the record and we will ask you 
to summarize, each of you for 5 minutes.
    Let me introduce two of the witnesses, and then I will ask 
the ranking member to introduce the third witness. First of 
all, the Hon. Ernest Istook serves as a Distinguished Fellow at 
the Heritage Foundation. Prior to joining Heritage, Mr. Istook 
served the people of Oklahoma's 5th district for 14 years, and 
he was a member of the House Appropriations Committee. 
Secondly, Dr. John Goodman is with us. He is the president and 
CEO of the National Center for Policy Analysis. Dr. Goodman is 
an expert on consumer-driven health care reform. He received 
his PhD in economics from Columbia University. Welcome.
    And I will turn to the ranking Member to introduce his 
witness.
    Mr. Pallone. Thank you, Mr. Chairman.
    I already mentioned that Senator Joe Vitale, he has 
testified before our subcommittee on at least two occasions in 
the last Congress, I believe, and he was the chairman of the 
health committee in the State senate. He continues to be a 
senior member of the health committee. And he doesn't actually 
live in my district but a majority or a good portion of his 
State senate district is in my congressional district. He is a 
friend, but beyond that, I would say most people in the State 
would consider him the number one expert on health care in New 
Jersey, so good to see you.
    Mr. Pitts. Thank you, and welcome.
    Now the chair recognizes the gentleman Mr. Istook for 5 
minutes for his opening statement.

   STATEMENTS OF ERNEST J. ISTOOK, DISTINGUISHED FELLOW, THE 
   HERITAGE FOUNDATION; JOHN C. GOODMAN, PRESIDENT AND CEO, 
NATIONAL CENTER FOR POLICY ANALYSIS; AND JOSEPH F. VITALE, NEW 
                      JERSEY STATE SENATE

                 STATEMENT OF ERNEST J. ISTOOK

    Mr. Istook. Thank you, Mr. Chairman, and of course, you 
have my written testimony. We are here talking of course about 
the authority for funding and the actual appropriations that 
were made within what is known both as the Patient Protection 
and Affordable Care Act, or PPACA, and also known as----
    Mr. Pitts. Is your mic on?
    Mr. Istook. Let us try it now.
    Mr. Pitts. That is better.
    Mr. Istook. I will begin again, if I may.
    Thank you, Mr. Chairman, for having us here. We are here of 
course talking about the funding approaches within the health 
care legislation that was passed last year, formally known as 
the Patient Protection and Affordable Care Act, PPACA, also 
known to many of us as Obamacare because of President Obama's 
crucial role as the driving force.
    This legislation was so unwieldy and complicated that even 
now people are discovering things that they didn't realize 
about the legislation, and I compare it to the ability to hide 
a lot of needles inside a haystack that contains 2,700 pages, 
and people are at different times finding the challenges 
presented by that. Although original estimates said that the 
bill created 159 new government agencies, the Congressional 
Research Service later concluded the actual number of new 
agencies, boards and so forth is currently unknowable because 
so many of those are given the authority to sprout off new 
entities in return.
    The new law attempts to bypass the normal appropriations 
process, which is another feature that makes it more difficult 
to deal with it, and for we who believe that the bill should be 
repealed, and if not repealed, then defunded, that presents 
special challenges because so many advanced appropriations were 
made. Advance appropriations are actual appropriations for 
future fiscal years. The comparison is to think in terms of 
writing checks. If you say I am not going to write any future 
checks for something, you are trying to defund it. However, if 
there is already a series of postdated checks out there, you 
have not defunded it. And I realize that is the subject of a 
major political battle that we have in Washington.
    And of course, that violates the typical Congressional 
process of appropriations. I spent 14 years as a Member of the 
House Appropriations Committee, several of those years as a 
subcommittee chairman. Typically, the normal process is, you 
create enacting legislation, so-called authorization bills that 
authorize spending and then the second half of the process is 
that appropriations are made in the amount that they deem to be 
proper at the time.
    Now, I am not aware personally of any occasions where we 
have had advance appropriations not just for one fiscal year in 
the future, not just for two fiscal years in the future but for 
three, four, five, six, seven. In fact, the legislation 
actually contained funding actual appropriations spread out 
over ten different appropriations and fiscal years.
    Now, what happens when you do that is, in essence you make 
an attempt to handcuff the current elected Members of Congress. 
You can just as easily decide spending levels for a future 
fiscal year, say, 2079. You could pass a bill now that seeks to 
control what spending is going to be 5 years, 10 years, 50 
years in the future but it would not be good practice.
    The people who should make the key funding decisions for 
the current time are the people who are elected to serve and 
represent the public at this particular time. So I am glad that 
you are looking at legislation to pull back funds previously 
appropriated to PPACA, or Obamacare, which in essence is 
putting a stop-payment order on these postdated checks. But it 
is important that this be done both through the authorizing 
process and through the appropriations process where there is 
also authority to repeal these existing appropriations and to 
pull them back.
    Defunding is a very routine policy tool for Congress and 
for the White House. So is funding at levels below what is 
authorized. As noted by the Congressional Research Service, 
Congress is not required to provide funds for every agency or 
purpose authorized by law. One of our founding fathers, James 
Madison, said it is the power over the purse, which is the most 
complete and effectual weapon with which any constitution can 
arm the immediate representatives of the people. However, if 
the decisions were made by the last Congress, by the prior 
representatives of the people, then you don't have the same 
power that James Madison said was essential as a safeguard of 
the public purse.
    I should mention that the White House also routinely 
proposes not funding programs which have been authorized or 
funding them at beneath authorized levels. If we intend for a 
policy to bind future generations, we should follow the 
supermajority process that would actually enshrine that in the 
Constitution but we should not accept that a simple act of 
Congress today should be elevated to handcuff a future Congress 
not that the last Congress should handcuff the current 
Congress.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Istook follows:]

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    Mr. Pitts. The chair thanks the gentleman and recognizes 
Dr. Goodman for 5 minutes for an opening statement.

                  STATEMENT OF JOHN C. GOODMAN

    Mr. Goodman. Thank you, Mr. Chairman, members of the 
committee. My name is John Goodman. I am president of the 
National Center for Policy Analysis.
    I would like to begin by saying there are serious 
structural problems in the Affordable Care Act and they are so 
serious that even if the critics weren't around, the Congress 
is going to have to go in and make major structural changes to 
this bill. Let me just draw your attention to a few of them.
    First, people are going to be required to buy an insurance 
plan whose cost is going to grow at twice the rate of growth of 
their income. You don't have to be a mathematician or an 
accountant or an economist to know that if you have to buy 
something whose cost is growing at twice the rate of growth of 
your income, eventually it is going to crowd out everything 
else that you are consuming. That is an impossible path. It 
wasn't created by President Obama or by Congress, but the bill, 
the Affordable Care Act, locks us onto that path and takes away 
a lot of the ability that people need in order to get off of it 
and move to a lower-cost health care system.
    Secondly, there is a bizarre system of subsidies in the act 
under which people at the same income level get radically 
different amounts of help from the Federal Government depending 
upon whether they are on Medicaid, whether they are in an 
employer plan or whether they are in an exchange. For example, 
a family at an income level of $30,000 a year in the health 
insurance exchange will get more than $16,000 of help from the 
Federal Government. That same family at work gets the current 
tax break which is a little over $2,000. I think this huge 
discrepancy of subsidies is one of the why the job market is 
not responding better than it is right now. There is enormous 
uncertainty right now on the employer side but eventually this 
is going to be very, very disruptive and eventually I think 
everybody who is average income or below average income is 
going to lose his employer-provided health insurance. The 
numbers are just so large and the incentives are just so great. 
They will either go into Medicaid or they will go into an 
exchange, or the subsidized plans, if we follow the 
Massachusetts example, will pay little better than Medicaid 
rates. Essentially you can think of it as Medicaid Plus.
    Number three, in the exchange itself we are creating 
perverse incentives for insurers. They will have to take all 
comers for the same premium. They will try to attract the 
healthy and avoid the sick. After people enroll, they have an 
incentive to overprovide to the healthy because those are the 
ones they want to keep. They want to attract more just like 
them. They will have an incentive to underprovide to the sick 
because they didn't want them in the first place and they 
certainly don't want to attract any more just like them. I 
think this is one of the worst features of the bill and it is 
the one that has been the least talked about in Congress and 
outside Congress.
    On the other side of the exchange from the buyer's point of 
view, the incentives are also perverse. In Massachusetts, 
people are going bare while they are healthy. They get sick, 
they enroll, they pay premiums for a few months, get their 
health care, get their bills paid and then they drop coverage 
again. So far, we are only talking about a few thousand people 
although the number is growing every year. In a State like 
Texas where we are signing up people for Medicaid in the 
emergency room, this would be absolutely disastrous.
    Number five, we have promises that we can't possibly keep. 
This bill will insure between 32, 34 million additional people 
if the economic studies are correct. These people will try to 
consume twice as much health care as they have been consuming. 
In addition, almost everybody else is going to be pushed into a 
plan where benefits are more generous than they are now. There 
is a whole long list of preventive services that have to be 
made available with no deductible, no copayment. Bottom line, 
we are going to have a huge increase in demand for care. The 
bill has no provision for increasing supplies. We are going to 
have a huge rationing problem, and that is going to be very, 
very bad for anyone whose plan pays below market rates, and who 
are those people? That is everybody in Medicare, everybody in 
Medicaid and maybe everybody who is getting subsidized 
insurance in the health insurance exchange.
    And finally, we have impossible benefit cuts for seniors. 
We are paying for more than half the cost by cutting spending 
on Medicare. What are we talking about? Well, for someone 
reaching the age of 65 this year, the reduction in Medicare 
spending will be about $35,000 in present value terms. That is 
equal to about 3 years' worth of benefits. For a 55-year-old, 
the day that President Obama signed the bill, they lost $60,000 
in spending, and for 45-year-olds, it is $100,000 in spending. 
Where are all these dollars coming from? I heard on TV this 
morning they were going to come from eliminating waste, fraud 
and abuse. Well, that is ridiculous. Where it is going to come 
from is in reduced payments to doctors and hospitals and other 
providers. According to the Medicare chief actuary, by the end 
of this decade Medicare will be paying doctors and hospitals 
less than Medicaid. Senior citizens will be behind welfare 
mothers in terms of their attractiveness to physicians. In 3 
years, most of you will be flooded by phone calls from 
constituents telling you they can't find a doctor. I think it 
is a very, very serious problem and one that Congress has not 
yet addressed.
    The appropriations process is not the only way to deal with 
this but Congressional oversight is certainly a beginning.
    [The prepared statement of Mr. Goodman follows:]
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    Mr. Pitts. The chair thanks the gentleman and recognizes 
Senator Vitale for 5 minutes for an opening statement.

                 STATEMENT OF JOSEPH F. VITALE

    Mr. Vitale. Thank you, Mr. Chairman. Good afternoon, 
Chairman Pitts and members of the Subcommittee on Health. My 
name is Joe Vitale. I was elected to the New Jersey State 
Senate in 1998 and had the distinct pleasure of serving with 
your colleague, Congressman Leonard Lance. In fact, he is my 
Congressman. Congressman Pitts, Congressman Pallone and 
Congressman Waxman, thank you for the invitation to testify 
regarding proposals that would defund critical pieces of the 
Patient Protection and Affordable Care Act.
    I want to limit my testimony to how PPACA will benefit New 
Jersey citizens and how the act has already begun to do so and 
how defunding elements of reform will only serve to undermine 
access to our State's uninsured citizens. In addition, I will 
cover some ground on how the federal and State health care 
partnerships have already made a significant difference in the 
wellbeing of hundreds of thousands of New Jerseyans.
    New Jersey was recently awarded a $1 million health 
exchange planning grant. The State department of banking and 
insurance awarded nearly $250,000 of that money to the Rutgers 
University Center for State Health Policy, which is a 
nonpartisan evidence-based think tank, to hold shareholder 
sensing meetings. The center will provide it gathers through 
these meetings and to provide to the State and other 
stakeholders including legislators. With the remaining funding, 
the department has planned to hire consultants to inform 
policymakers of aspects of an exchange such as design, 
development and oversight. In short, an exchange designed 
specific for New Jersey will contemplate and deliver a well-
thought-out mechanism where hundreds of thousands of currently 
uninsured New Jerseyans will gain access to affordable and 
sustainable health care coverage. It is my belief that a 
properly financed and implemented exchange as made available 
through PPACA is smart, efficient and a sustainable way to 
access the appropriate care.
    The public health initiatives are the single-most proven 
method of controlling health care costs. Vaccinations, 
workplace safety, infectious disease control, safe food 
handling, prenatal care and family planning are just a few 
examples of how population-based prevention and public health 
programs are the most effective investment Congress can make to 
control future health care costs.
    One example through PPACA is where New Jersey received 
$350,000 for an HIV prevention grant. With these funds, we have 
tested an alternate means of confirming HIV that replaces a 
more expensive test at a fraction of the cost. Defunding public 
health initiatives will have a devastating consequence for all 
the people we serve.
    Of all the components of PPACA that are being considered 
for defunding, rolling back expansion of school-based health 
centers may be the most shortsighted. Five years ago, I worked 
with the Visiting Nurse Association of Central New Jersey to 
create a nontraditional school-based health services program in 
the suburban middle-class town in which I live. Children 
enrolled in the program are able to see a visiting advanced 
practice nurse within the school nurse's office. APNs are 
licensed and able to diagnose and recommend treatment. 
Prescriptions are called in to the student's pharmacy so that 
they are ready for their parents to pick up on the way home. 
Children are treated faster, return to their classroom sooner 
and parents miss less work that many times adds up to less 
income and employee productivity. At the request of parents, 
the Visiting Nurse Association now provides annual sports 
evaluations for their students. School-based health centers 
require a relatively small investment and provide an enormous 
return on that investment.
    Through PPACA, New Jersey has received several grants to 
address primary care workforce shortages. Defunding programs 
aimed at addressing these critical shortages for me may be the 
most reckless. The primary care workforce shortages impact 
every State and will reach critical levels as access to health 
care coverage is expanded. It takes 10 years to produce a 
physician and 8 years to produce an advanced practice nurse. In 
New Jersey, we already aggressively addressing this issue but 
we cannot go it alone and PPACA will make an enormous 
difference. A loan redemption program has been created to 
encourage nurses to pursue nursing faculty careers. PPACA 
dedicated $800,000 to this program and will help ensure that 
New Jersey's health care system can handle the increased 
demand.
    Through PPACA, New Jersey Department of Labor was awarded 
$150,000 workforce development primary care grant and has 
received $10,560,000 to increase the number of resident 
physicians trained in family medicine, general internal 
medicine and pediatrics. Defunding primary care workforce 
development will cripple health care delivery in States that do 
not already have existing health care workforce development 
programs in place.
    As one of the original authors and ongoing supporters of 
New Jersey's SCHIP program, I can tell you firsthand just how 
effective federal and State partnerships can be. Currently, New 
Jersey enrolls over 600,000 children in SCHIP and in Medicaid, 
an additional 600,000 parents and adults without children in 
SCHIP and in Medicaid as well. Many also contribute to that 
insurance.
    I will close by saying that most of us elected officials 
enjoy some of the best health insurance that taxpayer dollars 
can subsidize. I think it is fair and right that we extend that 
same generosity to millions of Americans who may never have 
that same opportunity. Thank you.
    [The prepared statement of Mr. Vitale follows:]
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    Mr. Pitts. The chair thanks the gentleman. Thanks to all 
the witnesses for their testimony and we will now turn to 
questioning. The chair recognizes himself for 5 minutes for 
questioning.
    Mr. Istook, regarding State exchange grants with unlimited 
mandatory expenditures and the size of the appropriations 
really at the discretion of the Secretary with such sums, in 
your years as an appropriator and legislator, have you ever 
seen Congress grant an Administration official an unlimited tap 
into the U.S. Treasury?
    Mr. Istook. No, Mr. Chairman. I can recall no such 
instance, and furthermore, I think it violates what the 
Constitution intends when it says no spending shall be made 
except by appropriations from the Congress, and to leave the 
amount at the discretion of any public official, whether it be 
the Secretary of HHS or anyone else, I think is not in keeping 
with the constitutional intent.
    Mr. Pitts. As our national debt currently sits at over $14 
trillion, each citizen is individually responsible for roughly 
$45,000 of debt. We also heard news earlier this week that in 
February, the shortest month of the year, the Federal 
Government ran its single largest monthly deficit in U.S. 
history, $223 billion. In analyzing this law, we have found 
2,000 ``the Secretary shall'' statements. With these facts in 
mind, do you think it is appropriate to give a single 
Administration official an unlimited tap into the U.S. 
Treasury?
    Mr. Istook. No, sir, I do not believe that is an 
appropriate thing to do, just as it would not be appropriate 
for you to entrust all of your personal finances and investment 
to some individual and leave out your own discretion and 
control over them.
    Mr. Pitts. Now, section 4002 of PPACA creates a fund to 
provide funding for programs authorized by the Public Health 
Service Act for prevention, wellness and public health 
activities. From the period fiscal year 2012 to fiscal year 
2021, there will be $17.75 billion deposited in that fund. Who 
has the authority, Mr. Istook, on how to determine how these 
funds are spent?
    Mr. Istook. Under the statute, that authority appears to 
rest solely with the Secretary of Health and Human Services.
    Mr. Pitts. And so the Secretary can spend this money 
without any further Congressional action. Is that correct?
    Mr. Istook. Yes. Because it is already appropriated, the 
Secretary is given discretion to decide how it has been spent. 
Then Congress does not need to take further action to authorize 
the Secretary to do that but it would need to take further 
action to stop the Secretary from spending that fund freely as 
they may see fit.
    Mr. Pitts. Does the program's appropriations sunset at any 
point?
    Mr. Istook. I do not find any sunset in the legislation. If 
it is there, I am sure somebody else would point it out to us.
    Mr. Pitts. So the HHS Secretary will receive a $2 billion 
annual appropriation for this program in 2030, in 2040 or in 
perpetuity regardless of the effectiveness of the program or 
the need for these funds?
    Mr. Istook. So long as the Secretary doth live. That 
appears to be the case.
    Mr. Pitts. All right. Let us to go to Dr. Goodman. As a 
general proposition, do you believe the massive health care law 
signed by President Obama responsibly sets federal spending 
priorities in the health care field?
    Mr. Goodman. No, I do not. Just my back-of-the-envelope 
calculations suggest that for every $2 of spending, only $1 is 
actually paid for, and if Congress has to restore the spending 
for seniors, that means only one of every $4 of promises is 
actually paid for. So there is a commitment here to spend an 
enormous amount of money and no one can tell me where the money 
is going to come from.
    Mr. Pitts. All right. Senator, in your testimony you argue 
that the massive new health care law does not expand 
government's role in the health care arena. Are you aware that 
PPACA adds 20 million Americans into the government-run 
Medicaid program?
    Mr. Vitale. Yes.
    Mr. Pitts. Are you aware the health care law creates at 
least 159 new agencies, boards and commissions?
    Mr. Vitale. I am not aware of the total number but I will 
take your word for it, Mr. Chairman.
    Mr. Pitts. Are you aware that the Secretary of HHS has the 
power to prevent doctors and hospitals from contracting with 
insurers if they fail to meet new federal guidelines and 
standards?
    Mr. Vitale. Yes, and I agree with her.
    Mr. Pitts. Are you aware that the Secretary of HHS can 
dictate the benefits, the network requirements, the medical 
loss ratios, the actuarial value and the other terms of every 
health plan in America including new requirements on plans that 
Americans have and like today?
    Mr. Vitale. Someone should, and the responsibility rests 
with her.
    Mr. Pitts. Thank you. I am sorry I am out of time.
    I yield 5 minutes to the ranking member, Mr. Pallone, for 
questioning.
    Mr. Pallone. Thank you, Mr. Chairman.
    I wanted to ask a question of Senator Vitale. Forty-eight 
States and D.C. receive grants for the purpose of planning and 
establishing an exchange. In addition, six early innovator 
grants were awarded to develop an array of models for exchange 
information technology systems that can be used by other 
States. So about $296 million has gone out to States for these 
grants related to the exchange. Now, the Republicans criticize 
again and again that they do not want a federal solution for 
health reform but the fact is, if a State does not or is unable 
to establish a State exchange, the Federal Government would 
establish one for them. So these planning and establishment 
grants provide the necessary support to ensure States are able 
to work with their stakeholders. You know, if it is an active 
exchange, it negotiates with insurers to leverage the best 
quality choices for best prices or it is an open exchange that 
invites all insurers to offer products that consumers can be 
aware of or choose from. These grants basically make all this 
possible and make for good exchanges.
    So I wanted to ask you, Senator, if Congress were to repeal 
this provision providing for grants for the States for 
exchanges, does New Jersey have the money to do this work on 
its own, and what is the fiscal situation in New Jersey that 
relates to that?
    Mr. Vitale. Well, I don't believe that we have the money to 
do it on our own, and I think earlier in my testimony I 
described the level of federal-State partnerships that have 
always been successful when run properly and really in good 
coordination have always made sense. Having a one-size-fits-all 
exchange model that would be implemented by the Federal 
Government I don't think would work in New Jersey, but be that 
as it may, in terms of the dollars and cents, we don't have the 
resources to not only design but also implement the exchange, 
and of course, our condition economically is as bad or worse 
than most other States, the worst recession since the Great 
Depression. And so our resources are limited and already the 
governor has decided that he is going to eliminate and reduce 
programs to the uninsured, to the Medicaid recipients in our 
State. So I don't see how it is in New Jersey or any other 
State, for that matter, unless they find a pot of gold and can 
come out from underneath this recession without the partnership 
of the Federal Government.
    Mr. Pallone. I appreciate that. Let me ask you about the 
prevention and the public health investment fund because again 
we are trying to provide Americans with better choices about 
prevention. Both Democrats and Republicans keep talking about 
prevention as a way to provide better quality care and save 
money, and I think if you talk about where we are today before 
this act, the health care reform goes into place, you know, be 
more apt to describe the situation as sick care rather than 
wellness care, and that is why we created this prevention fund 
to provide Americans with options to keep themselves healthy 
instead.
    There are over 530 organizations that support the 
prevention and public health fund because it has already shown 
it can deliver on the promise of creating a better pathway to 
prevention. So many people on both sides of the aisle have 
supported prevention because it holds a promise to reduce 
health spending, and I know this has been important to you both 
improving health and reducing spending.
    My question, Senator, again is, New Jersey has received 
over $15 million in grants from the fund. It supported 
activities such as quit lines, HIV prevention, other important 
activities. Are you able to comment on how prevention and 
public health fund awards like these help to complement your 
own state efforts, and is this an investment that is worth 
making because obviously the Republican option is to eliminate 
it?
    Mr. Vitale. Well, I think everyone in this room will agree 
that we want to have smart public health opportunities and 
options for every American, but the States can't go it alone, 
but we also know that it makes smarter financial sense to 
address these issues early on in terms of prevention not only 
in terms primary care, spending money in the beginning of life 
prevention and not at the back end of life but also on all the 
public health initiatives that the Federal Government and the 
State government by itself certainly lowers cost, lowers the 
instances of contagious disease and infections and the variety 
of things that happen to people in the public health field and 
so reducing those costs is paramount and it makes financial 
sense. You know, we have to spend so much more not wellness but 
on sickness, as you said earlier, as opposed to spending it up 
front. It makes sense to spend it now and do it in a way that 
is appropriate and provides the greatest bang for the buck.
    Mr. Pallone. I appreciate that. I don't want us to be 
fooled by these arguments about mandatory versus discretionary 
spending in this fund. Seventy-one percent of Americans favor 
increased investment in community health and disease 
prevention. I think it is tragic that we are even considering 
striking the fund, given what it can do.
    Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman. The gentleman's 
time is expired. The chairman recognizes the vice chairman of 
the committee, Dr. Burgess, for 5 minutes for questions.
    Mr. Burgess. Thank you, Mr. Chairman.
    Dr. Goodman, did you want to respond to that last question?
    Mr. Goodman. Yes. I agree with Congressman Pallone that 
both Republicans and Democrats are out there saying that by 
spending money on preventive care we will save money overall 
but it is just not true. There are an enormous number of 
studies of this issue. They overwhelmingly show that preventive 
medicine by and large does not save money, that yes, you will 
save money if you catch a disease in its early stage with one 
person but to get to that person you have to spend money on 
10,000 other healthy people, and it turns out that there are 
very few preventive procedures that actually save money. I 
think the political reason why we hear so much about preventive 
medicine is, it is the only thing you can do for healthy 
people, and most people are healthy. So it makes political 
sense to talk about spending money on preventive care but it is 
not a way to overall health care costs. Pregnant women at risk, 
smoking cessation advice, immunizations, they will pay for 
themselves but giving free checkups to the elderly, that will 
never save money.
    Mr. Burgess. Interesting observation. And we do appreciate 
all of you being here. Let me just say that again.
    Mr. Vitale, let me ask you a question. In your testimony, 
you talk about the rollback of the funding of the country's 
school-based health centers and maintain that in fact that is 
shortsighted. I don't know, you may be being a little tough on 
the President but let us explore this a little bit. In the law 
as it is now, section 4101(a), the mandatory funding that we 
are talking about today is actually for school-based clinic 
construction, correct? Is that yes? That is a yes. The clerk 
will note that is a yes.
    Mr. Vitale. Yes.
    Mr. Burgess. What about the money for the doctors and 
nurses that are going to be in the clinic? Is that mandatory or 
discretionary?
    Mr. Vitale. I am not sure.
    Mr. Burgess. Well, 4101(b) is discretionary. Do you know 
the dollar amount that President Obama requested in his latest 
budget that he sent up here to the Hill just a little over a 
month ago?
    Mr. Vitale. For which part?
    Mr. Burgess. For the staffing of the school-based clinics.
    Mr. Vitale. I am not aware of it but any staffing would be 
helpful. If the money doesn't in that proposal, then it is what 
it is, but what is important to recognize is that whether it is 
for bricks and mortar or whether it is for individuals to serve 
in those capacities is vitally important.
    Mr. Burgess. Well, the actual dollar figure requested by 
the President was zero, so I think maybe you are stating the 
President was shortsighted with that budgetary amount. I don't 
know. I will leave that up to you.
    But what good are the bricks and mortar if you don't have 
the doctors and nurses there to receive the children, the 
patients when they come in to be seen? How are you going to 
have a child seen at a school site if there is no doctor or 
nurse in the clinic?
    Mr. Vitale. Well, the elements of reform in PPACA and what 
we do in New Jersey is to encourage primary care workforce 
development so primary----
    Mr. Burgess. Yes, encourage it by not funding it in the 
discretionary part of the President's budget, and that is a 
discrepancy and that is one of the things--you know, the 
Secretary couldn't answer the question when I asked her why it 
was that it was constructed like that. I am going to accept 
that it was a drafting error on the part of the Senate. I am 
going to accept the fact that this bill was a poorly 
constructed product that was rushed through on the Senate Floor 
to get the Senators out of town before a snowstorm hit on 
Christmas Eve. We all accept that. They never got to a 
conference committee because we know that 2 weeks later Scott 
Brown gets elected, they lose the 60-vote margin. Nancy Pelosi 
said there is not 100 votes for this damn thing over in the 
House, and it took 3 months to twist enough arms and crack 
enough skulls to get it passed, and that is precisely the 
reason why, because it doesn't deliver on the promise that was 
intended.
    Now, another aspect is, what are the duplicative aspects of 
this? You had a stimulus bill that passed in February 2009, $3 
billion, I believe, for community health centers. Was there not 
enough to scrape together for the $50 million that would fund 
the school-based health clinics in this program? Did the 
Congress have to fund it twice to get to your level of 
satisfaction?
    Mr. Vitale. Well, you know, I would certainly welcome and 
support legislation that you could introduce that would fund 
those programs and put those doctors and nurses in those 
buildings.
    Mr. Burgess. Well, oK. There is the other part of the 
problem, last month, a $223 billion overdraft by the United 
States Congress. If you multiply that out over the 10-year 
budgetary window, that is almost $27 trillion. That is twice 
what the debt limit is going to be expanded later this year. 
That is twice what the debt limit already is, and that is 
irrespective of any money collected in taxes. So that is the 
problem. There is no money there, and that is an important 
concept.
    Let me just ask you a question. Governor Christie, did he 
sign on a letter asking for relief of maintenance of effort to 
the Congress?
    Mr. Vitale. Yes, he did.
    Mr. Burgess. And was he correct or incorrect in that?
    Mr. Vitale. He was incorrect, sir.
    Mr. Burgess. I believe he was correct, and again, the 
answer is, $223 billion overdraft, it is unsustainable.
    Mr. Chairman, thank you. I hope we have time for a second 
round because I have some questions of the other witnesses, and 
I will yield back.
    Mr. Pitts. The chair thanks the gentleman. The gentleman's 
time is expired. The chair recognizes the ranking member 
emeritus of the committee, Mr. Dingell, for 5 minutes for 
questions.
    Mr. Dingell. Mr. Chairman, I thank you for your courtesy to 
me, and I want to welcome our panel, particularly my old 
friend, Mr. Istook. I am delighted to see you here.
    I am troubled about the committee and what it is doing. I 
am very much troubled that instead of trying to improve the 
legislation, we are concentrating on trying to repeal it. At 
the same time, I note that those who would repeal the 
legislation and who are trying to impede the implementation of 
this legislation are coming forward with no suggestions as to 
alternatives and no differences that they would make because of 
either amendments or replacement legislation.
    This is a yes or no question, old friend. You have great 
familiarity with the differences between mandatory and 
discretionary funding and the importance of both, and I know my 
colleagues have concerns that they have expressed about 
mandatory spending under the Affordable Care Act but I would 
point out that the majority of the members on the other side of 
the aisle have voted for this kind of funding when it suits 
their purposes, particularly in the instance of the Medicare 
Part D or the Medicare Prescription Drug Improvement and 
Modernization Act. There was a lot of funding of this 
particular kind, and a similar situation in which many of the 
members on the other side of the aisle also voted for the SCHIP 
program in the Deficit Reduction Act.
    Would you agree, old friend, that mandatory appropriations 
are from time to time a necessary part of legislating and 
particularly so in the case of the Medicare Prescription Drug 
Improvement and Modernization Act and in the Deficit Reduction 
Act? Yes or no.
    Mr. Istook. One, I always appreciate your courtesy, Mr. 
Dingell. The challenge is, there are different types of 
mandatory appropriations. They have been used in different 
mechanisms. I have never seen them used in the same way that 
they are here. For example, in the prescription drug benefit 
bill, you had an existing program which receives permanent 
appropriations, namely Medicare, and there is an expansion of 
its scope rather than a creation of a new mandatory stream of 
funding.
    Mr. Dingell. But we are following a precedent long 
established in many differences.
    Mr. Istook. I don't see it in the manner it is done here.
    Mr. Dingell. Now, as a former Member, you served here with 
distinction, do you agree that Medicare and Medicaid programs 
are essential cornerstones of the health care system in this 
country?
    Mr. Istook. I think they certainly have become cornerstones 
upon which people depend. Is it necessary, especially for 
Medicaid, to be its current scale? I don't believe so.
    Mr. Dingell. And those bills that we have been discussing 
have been funded by mandatory appropriations over the years.
    Well, I want to thank the panel for being here. I notice I 
have a minute and 27 seconds and I just want to maintain that I 
continue to appeal to my friends on the Majority. Let us work 
together to get a good piece of legislation made better and to 
meet the concerns that are expressed by all of us here about 
different components of this legislation. I have heard that the 
Members on the other side want to repeal it. I think that would 
be extraordinarily unwise, and I would hope that they would 
join us in trying to improve our Nation's public health, to 
save our health care system, to see to it we have the money in 
the system that we need and that we have a workable program 
that will head off the appalling increase in cost which we see 
going forward on a continuing basis under the old system, and I 
thank you for your courtesy, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman. The gentleman's 
time is expired. The chair recognizes the gentleman from Ohio, 
Mr. Latta, for 5 minutes for questions.
    Mr. Latta. Thank you very much, Mr. Chairman. I appreciate 
it. And to our panel, thanks very much for being here. I really 
appreciate it. It is always enlightening to get the testimony 
from you all.
    Dr. Goodman, if I could maybe start with you. It is kind of 
interesting, because I know that this has been discussed a lot 
during the debate on the health care legislation. On page 7 of 
your testimony you were talking about Massachusetts and what 
has happened up there. It is interesting that you stated that 
people remain uninsured while they were healthy and get 
insurance after they are sick. Then they receive care and their 
medical bills are paid, they drop their insurance coverage 
again. And I guess some of the questions I would like to ask is 
first of all, what is the enforcement mechanism they have in 
Massachusetts or lack thereof to try to change this or get 
people to be on insurance all the time?
    Mr. Goodman. Well, the Massachusetts model has a fine, and 
the general Massachusetts approach was copied. I do agree with 
President Obama on this. The federal model did in large part 
come from Massachusetts, and it is a strange model because, you 
know, in other health care programs that we have, we don't let 
people game the system. In Medicare Part B, in Medi-gap 
insurance and prescription drugs, you don't let people just go 
until they get sick and then sign up for the same price 
everybody else is paying. There is a penalty if you do not sign 
up when you are eligible, and yet in Massachusetts, people can 
wait until they can sick, they can sign up at any time. There 
is a 12-month open season. They pay a small penalty when they 
are not insured but the penalty is small compared to the cost 
of insurance so the real incentive there and the real incentive 
under the Affordable Care Act is go bare while you are healthy, 
pay the fine and wait until you get sick and then sign up for 
the most generous--and if you are really sick, you will sign up 
for the most generous of the options that you have.
    Mr. Latta. Do you know what that penalty is, out of 
curiosity?
    Mr. Goodman. In Massachusetts? I don't remember. But under 
the Affordable Care Act, it will be less than $1,000 a person.
    Mr. Latta. This might be a rhetorical question then, 
because I already know what the answer is. Who makes up that 
difference?
    Mr. Goodman. Well, the cost of care falls on everyone else, 
and if you allow people to game the system, stay outside when 
they are healthy, let them join when they are sick for the same 
premium everybody else pays, premiums have got to rise. 
Everybody else has to pick up that difference. And through time 
costs just get higher and higher and higher as people are 
allowed to game the system in that way.
    Mr. Latta. Thank you.
    Congressman, a question for you. As a former appropriator, 
you know, when you look at this, and you stated in your 
testimony but is it right that Congress should really abdicate 
its responsibility by saying that we are going to have these 
going out year after year after year in these mandatory's 
instead of us looking at every year? As Dr. Burgess pointed 
out, we had a $233 billion shortfall in the month of February. 
You know, should that be abdicated by Congress?
    Mr. Istook. No, neither in the case of Obamacare nor for 
that matter in the case of Medicare or Medicaid should we have 
unrestricted, open-ended appropriations or permanent 
appropriations rather than putting things upon a defined budget 
that is defined by what Congress is able to provide what the 
Nation can afford at a particular time. So this is a common 
problem with any form of mandatory appropriation whether it be 
the permanent appropriations that go out, for example, to 
Medicare or the different process that was used here, passing a 
series of annual appropriations for consecutive years. Either 
way, you are not matching your current resources with what you 
are trying to provide, and that of course is what leads to 
deficits such as the $1.6 trillion that we have for this 
current fiscal year.
    Mr. Latta. Thank you very much.
    If I could, I would yield the remainder of my time to Dr. 
Burgess.
    Mr. Burgess. Thank you.
    Dr. Goodman, you mentioned in your testimony that the 
mandate is going to become ever more costly. You already 
alluded to the amount of money the deficit is for February of 
this year and what future projections are. How expensive is 
that going to be for the taxpayer in the years ahead?
    Mr. Goodman. Well, I don't have an estimate off the top of 
my head but it is going to be very expensive and it is going to 
be more expensive and it is going to be more expensive than I 
think the Congressional Budget Office has estimated, and the 
reason is because of these different subsidies that I have 
talked about. It is going to be foolish for modern income 
employees to try to get insurance from an employer. They are 
all going to find their way into the exchange, and the 
subsidies in the exchange are paid for by the federal taxpayer. 
So I think the Congressional Budget Office was estimating maybe 
17 million people would go over into the exchange. Douglas 
Holtz-Eakin, former director of the Congressional Budget 
Office, thought it might be twice that many, but it could be 
much higher than that. I think eventually everybody who can get 
a better deal will be in the exchange.
    Mr. Pitts. The gentleman's time is expired. The chair 
recognizes the gentleman from New York, Mr. Engel, for 5 
minutes for questions.
    Mr. Engel. Well, thank you, Mr. Chairman. I would like to 
first ask unanimous consent to introduce for the record a 
letter from the public health commissioners from 10 of our 
Nation's biggest cities, which provides great examples of the 
ways the fund is being used in our Nation's cities.
    Mr. Pitts. Without objection, so ordered.
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    Mr. Engel. Thank you, Mr. Chairman.
    Mr. Chairman, Republicans have decided that this is the 
week to talk about mandatory spending in the Affordable Care 
Act. This has probably confused many Americans who thought that 
Congress was going to focus on creating jobs and reducing the 
deficit.
    I want to welcome our three panelists. I want to welcome 
Congressman Istook back. But let us examine the issue of the 
Affordable Care Act mandatory spending provisions. One of our 
colleagues, Michelle Bachmann, on Meet the Press last weekend 
said that using mandatory funding was ``gangster government'' 
and she said that this mandatory funding was the bill's, and 
again I quote her, ``dirty little secret.'' Congressman Istook, 
you said to FactCheck.org that this assessment was fair because 
these appropriations were, and I quote you, ``not trumpeted 
loudly by sponsors of the measure.'' So I am going to ask you 
in a minute to comment, but let us review the history here.
    For example, let us look at the prevention and wellness 
fund. This is a critically important fund to provide stable 
funding for our public health infrastructure. The fund will 
support State and community efforts to prevent disease and make 
our Nation healthier. Over 530 organizations have supported 
this fund because investing $10 per person per year on 
community-based prevention could save this Nation more than $16 
billion annually. I have never considered this a ``dirty little 
secret.'' I am proud of it. I have tried to trumpet it loudly. 
It was in just about every document we ever produced, every 
draft on the House and Senate side, every explanatory fact 
sheet and every full CBO score. So let me read to you from our 
fact sheet: ``Provides $15 billion in mandatory spending to 
support prevention and wellness activities.'' Does that sound 
like we are trying to keep this a secret? Even FactCheck.org 
concluded that ``No secret. Bachmann gets it wrong.'' And the 
Washington Post said, ``This is bordering on ridiculous,'' and 
concluded that there is no bombshell beyond the bombast.
    But let us take this chance to learn more about the fund. I 
would like to first ask Senator Vitale, according to 
Healthcare.gov, organizations in New Jersey have received 
nearly $15 million in prevention and public health grants from 
tobacco cessation programs to HIV prevention, to public health 
infrastructure to primary care training. Senator, you mentioned 
in your testimony the idea of bringing primary health care 
services to people in their behavioral mental health setting. I 
am told that people with serious mental illness die an average 
of 25 years sooner than the general population, largely due to 
untreated chronic disease. Can you tell us how bringing primary 
care and mental health together is actually an important shift 
in how we think about prevention?
    Mr. Vitale. Well, thank you for that question, Congressman, 
and you are right. It is an incredibly important way in which 
to bring the care to them. I think that for a long time a lot 
of policymakers, even State legislatures, have overlooked the 
importance of those mental health and substance abuse issues, 
and in New Jersey we have the same issues. And I was a little 
blindsided and dumbfounded by a comment by my friend, Dr. 
Goodman, that prevention really doesn't save money. If you talk 
to any other health care expert in the Nation that is learned 
as he is, we would get a different answer, that that prevention 
model is incredibly important. It means the world to people 
even in terms of life and death, and so I would support those 
initiatives. They make a whole lot of sense.
    Mr. Engel. Thank you. This fund is much more than simply 
providing more funds for good things. It is about changing the 
way we think about prevention. I can't think of a better use of 
tax dollars than to institute proven prevention strategies that 
could save the taxpayers money.
    I just wanted to say, Dr. Goodman, I don't necessarily need 
a reply from you but I was interested when you were talking 
about the Massachusetts bill vis-a-vis the bill that we tried 
to put in, and I think you actually make a point many of us 
have been saying, that the fact of the matter is, it is not 
fair for someone not to belong and then when they get sick opt 
in because then everyone else's premium rises. That is why you 
have to everyone being directed to mandatorily purchase 
insurance, and I find it really ironic that Mr. Romney, who 
implemented as governor the law in Massachusetts which allows 
people to first get sick and then opt in is now one of the 
people who is cracking the bill.
    Mr. Istook, I want to give you a chance to respond. You 
replied to an inquiry from FactCheck that Congresswoman 
Bachmann's ``dirty little secret'' remarks were fair and you 
said these appropriations were ``not trumpeted loudly'' by 
sponsors of the measure. I tell you, we trumpeted it loudly and 
I don't know why you can say that we tried to hide it, but I 
would like to give you a chance to respond.
    Mr. Istook. If I may, Mr. Chairman?
    Mr. Pitts. Proceed.
    Mr. Istook. Thank you. Actually, particular things have 
been checked both by FactCheck, by the Washington Post and by 
PolitiFact. None of them had any criticism of what I have said 
on this. They had criticism of Ms. Bachmann but not of my 
characterization. As I said, her characterization I believe was 
a fair comment and opinion. Just because something is well 
known to some people such as, say, yourself does not mean that 
it has overall been well communicated to the American people. 
That is why I mentioned that we have a 2,700-page bill that is 
a huge haystack with a lot of needles still being discovered 
within that haystack, and I think the revelations are 
continuing and that is part of what the chairman is seeking to 
point out during this hearing.
    Mr. Engel. Thank you, Mr. Chairman.
    Mr. Pitts. The gentleman's time is expired. The chair 
recognizes Mr. Lance for 5 minutes for questioning.
    Mr. Lance. Thank you, Mr. Chairman, and good afternoon to 
you all. I am new to this committee, and it is my honor to meet 
for the first time Congressman Istook and Dr. Goodman. I 
certainly know Senator Vitale. We served together in the State 
senate for the 7 years I was in the State senate. I believe 
Senator Vitale is completing his 14th year in the State senate, 
and not only is he an expert on health care, he and I served 
together on the State senate budget committee and worked on 
many issues together.
    As a general matter, the National Governors Association 
writing our leaders, Speaker Boehner and leader Pelosi and 
leader Reid and leader McConnell, in January said that moving 
forward Congress should not impose maintenance-of-effort 
provisions on States as a condition of funding. This was a 
general letter and it did not relate specifically to the health 
care bill. It was more in general in tone. I want to make that 
clear. I would like to have unanimous consent to introduce that 
letter into the record. It was signed in a bipartisan capacity 
by the chair and the vice chair of the National Governors 
Association.
    Mr. Pitts. Without objection, so ordered.
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    Mr. Lance. Thank you, Mr. Chairman.
    And then more recently Governor Christie wrote the chair of 
the full committee, Chairman Upton, on March 1st relating 
specifically to the health care legislation. Governor Christie 
was unable to join the distinguished panel last week that 
included the Governors of Mississippi, Utah and Massachusetts, 
and as it relates directly to the health care issue, the 
Governor of New Jersey stated that we in New Jersey are facing 
an unprecedented Medicaid shortfall of approximately $1.3 
billion in State fiscal year 2012 and he goes on to state that 
``our options to close this gap are severely affected by 
further restrictive maintenance-of-effort requirements in the 
health care legislation. Noncompliance with those requirements 
could result in our losing $5.4 billion federal funding. 
Governors need flexibility, not federal mandates.''
    To the panel in its entirety, if you would, gentlemen, 
beginning with you, Congressman Istook, address your views 
regarding the maintenance-of-effort requirement, specifically 
given the fact that it seems to me so many governors have 
suggested that we should look at that. And Mr. Chairman, might 
I place in the record of the subcommittee the letter from the 
Governor of New Jersey to Chairman Upton on March 1st?
    Mr. Pitts. Without objection, so ordered.
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    Mr. Lance. Thank you.
    Congressman Istook?
    Mr. Istook. Yes. Thank you, Mr. Lance. And having served in 
State government as well as Federal Government, I know that 
often States feel trapped by having gotten into a program and 
then told you have to maintain those efforts even if federal 
funding may be diminished or even if there are major changes in 
the federal program. A key example right now, the Obama 
Administration is saving we are trying to provide States some 
certain opt-out flexibility, but what the fine print says is we 
will only let you do it if we decide you are trying to the same 
thing that we are trying to do, if you are trying to do things 
our way. It is not really an opt-out. It is still another level 
of control. So I fear that the maintenance-of-effort 
requirements have become just another way for the Federal 
Government to dictate to the States they participate in a 
program that they cannot afford. Medicaid is if not the largest 
certainly an enormous budget item in so many States right now 
and they are finding that it is simply unaffordable, and 
providing some leeway on maintenance of effort is an important 
way to address that.
    Mr. Lance. Thank you, Congressman.
    Dr. Goodman?
    Mr. Goodman. Well, of course, the States are trapped, and 
all the programs that we are talking about here today further 
trap people in the existing health care system. We want lower 
costs and higher-quality care. We have to let people get out of 
the way we have been doing things and try something new. 
Probably the best way that we could spend money on preventive 
care for low-income folks is to pay the market price that 
minute clinics charge and shopping malls and at Walmart for 
basic preventive primary care. At least I could argue that that 
has a much better chance of getting care to people that 
anything else that we have talked about. In any event, people 
at the local level need to have these flexibility. These kinds 
of programs don't give it to them.
    Mr. Lance. Thank you.
    Senator Vitale, my friend.
    Mr. Vitale. Thank you. Well, you are right, Congressman 
Lance. The governor did sign onto that letter to remove the MOE 
from New Jersey's obligation, and I will tell you that could be 
the worst thing that could happen to the population. If this 
happened last year and the governor cut out tens of thousands 
of parents from SCHIP, he didn't go below 133 because that was 
the maintenance-of-effort level. If he were able to do this 
year, we would have tens of thousands of working parents who go 
to work every day without the ability to have health care and 
the access to health care that we all enjoy. He would also 
dismantle many of the benefit designs and programs in Medicaid 
to the aged, blind and disabled and to the vulnerable 
populations. So to say that the maintenance effort is a way in 
which it forces the States to provide their care, I know that 
at least in the case of our governor, he will take that 
opportunity to remove that care and it would be just 
devastating for that population and literally hundreds of 
thousands of New Jerseyans.
    Mr. Pitts. The gentleman's time has expired. The chair 
recognizes the gentlelady from California, Ms. Capps, for 5 
minutes for questions.
    Mrs. Capps. Thank you, Mr. Chairman. I just want to take a 
minute to clarify one item regarding the application process 
for construction funds. Already 350 community clinics or 
schools have applied for funding for construction. Part of that 
process includes the requirement that as they apply for the 
funds that they demonstrate that they have adequate funding for 
adequate staffing for that facility.
    I want to also welcome our witnesses and thank them for 
their testimony, and in particular, welcome to our former 
colleague, Mr. Istook.
    As you all know, school-based health centers provide 
comprehensive and easily accessible preventive and primary care 
health services to approximately 2 million students nationwide, 
and there is no doubt about it, and I know this as many years 
of being a school nurse: Healthier children do better in 
school. At a time now when we are trying to out-compete and 
out-innovate other countries, we do need our kids healthy and 
in the classroom.
    Now, there is a statement, Senator Vitale, that I would 
like you to respond to and see if you agree with this 
statement. It is a quote: ``School-based health centers have 
proven that effective preventive and primary care for medically 
underserved children can decrease academic failure rates 
resulting from poor health.'' Is that something you would agree 
with?
    Mr. Vitale. It is, Congresswoman, and thank you for being a 
school nurse. We have an example in the town in which I live, 
and I was interim mayor for a few months and I worked with the 
Department of Human Services and the Visiting Nurse Association 
of Central Jersey to establish a school-based health clinic in 
six of our communities out of 30 schools, six of the most 
medically underserved schools in our school district, and one 
of them which had very high special-needs population and now 
several years later when I visit and we assess the efficacy of 
that program, it clearly illustrates that those children 
receive care when they need it up front right in the school. 
Parents get the prescription. They are able to write those 
prescriptions because the advance practice nurses now can 
diagnose and prescribe. Kids get on their medication earlier. 
They get back to school quicker and they learn faster. And we 
have seen an enormous decrease in the amount of absenteeism for 
all those children in those six schools where previously those 
absentee rates were much higher. So they are learning better, 
they are learning faster, and parents who need to take time off 
from work in many ways can't afford to do that save them money 
as well.
    Mrs. Capps. Absolutely. I agree with your testimony. It is 
eloquent. I also agree with the statement that I quoted, and I 
wish I could take credit for the quote but I wanted to point 
out that this comes from two of my colleagues who are members 
of this committee, Chairman Emeritus Barton and Mr. Burgess, 
and they sent a ``dear colleague'' highlighting their support 
along with their fellow Texan, Congresswoman Kay Granger, their 
support of school-based health centers. And after an 
endorsement like that one, I find it quite puzzling that our 
Republican colleagues are here trying to eliminate funds for 
communities across the Nation who want to benefit from the 
school-based health centers.
    Mr. Burgess. Will the gentlelady yield?
    Mrs. Capps. I will yield after I finish my statement and 
question.
    In fact, the interest in expanding school-based health 
centers is so great that HHS has received 350 applications for 
this funding. Requests come from 44 different States including 
the Congressional districts of nine of our Republican 
colleagues who are part of this subcommittee. So let us be 
clear. The need is there. While these centers benefit all 
children who have access to them, they are also a vital support 
for low-income Americans and I hope it is clear to us all that 
40 percent of children treated at school-based health clinics 
either have no insurance or are enrolled in Medicare, SCHIP or 
other public coverage. For some children, school-based health 
centers are the only consistent access to health care that they 
or their families have, and we know there are many millions of 
other children who could benefit from them. With more access to 
these centers, these children could be spending more time 
learning in their classrooms and less time clogging up our 
emergency rooms.
    And now, Senator Vitale, as a former mayor, which you 
mentioned, and current State senator, you do understand the 
economic needs of local communities during these tough times. 
The funding for school-based health clinic construction is the 
perfect shovel ready for today. So with so many people out of 
work, we are trying to provide more jobs for the American 
people. Maybe you can talk about what this means to your State 
of New Jersey.
    Mr. Vitale. Well, we have many of the same challenges as 
every other State, in fact, New Jersey being so urbanized in so 
many areas and where there are so many medically underserved 
populations, school-based clinics are a perfect way to capture 
kids that are school age. Providing the bricks and mortar or 
the dollars for those bricks and mortar is certainly very 
important but the other elements of the act that would help us 
to train additional physicians, advance practice nurses, to put 
those bodies in those clinics from time to time are also 
important elements so we are dealing with both the bricks and 
mortar and those who would be future physicians and advance 
practice nurses. So those developments combined certainly make 
great sense and will make a great deal of difference in 
urbanized communities.
    Mrs. Capps. Thank you.
    I wanted to yield time to my colleague, and I would be 
happy to, but I could ask unanimous consent, Mr. Chairman, to 
insert two letters for the record, one from the Sex Education 
Coalition and also one from the American Nurses Association. 
These groups highlight the importance of personal 
responsibility education programs, and I think for the record 
we should include the ``dear colleague'' that was sent out by 
our colleagues.
    Mr. Burgess. Reserving the right to object until I have a 
chance to respond.
    Mr. Pitts. All right. The gentlelady's time has expired.
    Mr. Burgess. I object to the insertion in the record.
    Mr. Pallone. Mr. Chairman, can I ask why----
    Mr. Pitts. Would you provide us a copy so we can look at 
it?
    Mr. Burgess. I have a copy. The copy is not the issue. I 
asked for a chance to respond. I was denied that chance. I will 
object to the insertion in the record until I am given such 
chance to respond.
    Mr. Chairman, I ask unanimous consent for 30 seconds to 
respond.
    Mr. Pitts. All right. Without objection, go ahead. You can 
have 30 seconds.
    Mr. Burgess. The issue is not whether or not Chairman 
Barton and I support the program. The issue is to have 
mandatory funding for the construction of the clinic and zero 
funding for the doctors and nurses who staff it. The other 
issue is a $223 billion structural debt for the month of 
February. There are going to be all kinds of programs that I 
supported in the past that we simply cannot fund. We simply 
cannot pay for everything. This is a poor crafting in the bill 
that was signed into law a year ago. We should fix it. It is 
within our scope to do so. Let us make the construction an 
authorizing program, not a mandatory program, and I will yield 
back.
    Mr. Pallone. Does the gentleman withdraw his objection?
    Mr. Burgess. Objection withdrawn.
    Mr. Pitts. All right. Without objection then, the letters 
are entered into the record.
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    Mr. Pitts. The chair recognizes the gentleman, Dr. Cassidy, 
for 5 minutes for questioning.
    Mr. Cassidy. I forego my questioning. I wasn't here to hear 
the testimony. And although I have a great interest in the 
topic, I don't want to just read something put in front of me. 
I would actually rather digest, and so if I could yield to 
anyone who wishes to have time yielded to them.
    Mr. Burgess. I would be happy to accept the time from the 
gentleman from Louisiana.
    Dr. Goodman, we started just a moment ago when I had a few 
seconds yielded to me and we were talking about the costs of 
the subsidies. Now, we had multiple hearings leading up to the 
passage of PPACA a year ago, and one of the things that got me 
was, we never really focused on the cost of delivering care. 
Now, you have been a proponent of patient-powered, consumer-
directed health plans. Governor Mitch Daniels in Indiana 
popularized the Healthy Indiana program and over the same 
period of time that Medicare and Medicaid expenses, PPO 
expenses grew by 7 or 8 percent, he saw an overall reduction in 
expenses for State employees of 11 percent over that same 2-
year interval. Would you care to comment on the techniques used 
by Governor Daniels to hold down costs in his State for the 
State employees?
    Mr. Goodman. Well, sure. Part of the approach is to empower 
patients and give them control over dollars, and that is the 
reason I said earlier, if low-income families could just stop 
by the minute clinic, get their immunization shot, get their 
flu shot, get a prescription filled, that probably is a better 
use of money than building a lot of buildings.
    Mr. Burgess. And what is the barrier to the patients doing 
that?
    Mr. Goodman. The barrier is the government and 
bureaucracy's control of the money, and it is not patient 
friendly, and so the system is set up so that it is a 
relationship between the provider and the payer and the patient 
is just an excuse to bill, and if you want real change in the 
marketplace, then you have to have providers competing for 
patience based on price and on quality, and they are not going 
to do that unless the patient controls the money.
    I wonder if I might respond to Congressman Engel's point 
about Massachusetts and the mandate there, if I may?
    Mr. Burgess. Please.
    Mr. Goodman. Because I have talked to Governor Romney about 
this. They did it the wrong way in Massachusetts and we did it 
the wrong way in the Affordable Care Act, and if I could just 
choose a number, suppose we are willing to offer somebody a 
$2,500 subsidy to buy individual health insurance. The way to 
do it is to offer it as a refundable tax credit so that if he 
buys this insurance, he gets his $2,500 for the insurance. But 
if he doesn't buy the insurance, then the $2,500 needs to go 
over into the social safety net. So if he goes in for care, he 
doesn't have insurance, he is responsible for his bills. If he 
can't pay for his bills, we put money over there for him. But 
in doing it that way, you don't let people game the system. You 
let money follow people. We will never get all the people in 
the insurance system. But the way you make them pay their own 
way is, they pay higher taxes if they turn down your subsidy, 
and that is the right way to organize the system, and I can't 
speak for Governor Romney but I think these days he is leaning 
more toward that approach than trying to force everybody to buy 
a plan that they don't really want to buy.
    Mr. Burgess. Thank you.
    Mr. Istook, you were an appropriator during the years that 
the Medicare Modernization Act passed. Would you care to 
comment on some of the discussion we have heard today how the 
forward funding or advance appropriations occurred in the 
Medicare Modernization Act? I was too young to remember it or 
to acknowledge it at the time but you were there, a seasoned 
appropriator.
    Mr. Istook. It was not done the same way. What we have in 
Medicare, whether you are talking about Medicare Part D or any 
other Medicare, you have what is called a permanent 
appropriation. Now, that is a problem because rather than 
having a defined amount where we spend what we can afford to 
spend, it is an open-ended expenditure. So when Medicare Part D 
was created, it was simply changing the definitions of what is 
covered as opposed to providing new appropriations.
    In the case of PPACA, Obamacare, there are a series, and 
Congressional Research Services devotes I think 16 pages to 
describing specific item after specific item after specific 
item after specific item where they make appropriations for the 
current fiscal year when it happened, fiscal year 2010, where 
they make appropriations that are explicit to fiscal year 2011, 
explicit appropriations for fiscal year 2012, and so forth all 
the way up to fiscal year 2019 scattered over a whole variety 
of different programs. So it is taking singular programs and a 
great number of them and creating annual appropriations for 
them not on a permanent basis but for a 10-year period not 
changing the definition of something that exists that also has 
permanent appropriations. It is a very different process and 
very unprecedented in my experience.
    Mr. Burgess. Thank you. And I will just point out in H.R. 
3200 that passed this committee, the appropriations, the public 
health fund was subject to appropriations.
    I thank the gentleman for yielding. I will yield back.
    Mr. Pitts. The gentleman's time has expired. The chair 
recognizes the gentlelady from Illinois, Ms. Schakowsky, for 5 
minutes for questions.
    Ms. Schakowsky. Thank you. First I wanted to clarify 
something about the school-based clinics. The grant application 
for the school-based clinics, which many schools are applying 
for, is very clear. They need to demonstrate that they have the 
funds to run the center but they don't have the funds to build 
the center. So this is a suggestion where denying construction 
funds actually would deny the clinic and they understand that 
they have to provide the money to run it.
    Mr. Istook, we are kind of getting into the weeds here, but 
in general about this issue of secret funding, you said that 
FactCheck exonerated you but I wanted to just read a quote. You 
said that ``it is within the range of fair comment and opinion 
for Congresswoman Bachmann to say that funding for these and 
other programs was a secret.'' So in a way, you are saying that 
this kind of we didn't know about it, nobody knew about it, 
this was snuck in there is a fair statement. Do you agree with 
that?
    Mr. Istook. Well, when the Speaker of the House told people 
that you had to pass the bill so that folks could find out what 
was in it, you know, I think that illustrates that we are 
finding out bit by bit is certainly within the realm of fair 
comment.
    Ms. Schakowsky. So even though the debate was very clear, 
for example, on the CHIP program you say that there is 
something very different about the Medicare Prescription Drug 
Improvement and Modernization program which you voted for but 
in fact $40 billion of what is in the Affordable Care Act goes 
to the CHIP program just for 2 years, so isn't that exactly the 
same thing?
    Mr. Istook. Actually it goes for 2 years and those 
particular 2 years, if I recall correctly, are something like 
adding--what is it--2017 and 2019----
    Ms. Schakowsky. No, 2014 and 2015, actually, and that is 
when the program goes into effect.
    Mr. Istook. There are other provisions that go up to 2017.
    Ms. Schakowsky. Well, I wanted to ask you about something--
--
    Mr. Istook. So the point there is, if something is supposed 
to be subject to the annual appropriations process, why isn't 
it subjected to the annual appropriations process by the 
people----
    Ms. Schakowsky. Well, that is what I want to ask you about. 
Funding for the State pharmaceutical assistance program into 
2006, that was 3 years into the future. You voted for that, 
right?
    Mr. Istook. I am not sure what you are talking about.
    Ms. Schakowsky. This is what was in the bill, a 3-year 
appropriation for the State pharmaceutical assistance program, 
and there was also funding for a pilot program for nursing home 
backgrounds. That was 4 years into the future, and of course, 
that was a good call. But you voted for that.
    Mr. Istook. Ma'am, one, if you have specific provisions you 
want to recite from that bill to see where they are parallel, I 
would be happy to look at that. But secondly, whether you are 
talking about the practice of advance appropriations for 
appropriations that occur 1 year or 2 years in the future, 
there is no comparison with a bill that seeks to make advance 
appropriations 10 years into the future which is what we are 
talking about with Obamacare.
    Ms. Schakowsky. When you voted for the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996, 
the welfare reform, did you know that that bill contained 
significant mandatory appropriations for abstinence education 
and childcare and development block grant?
    Mr. Istook. When you use the term ``mandatory 
appropriations,'' it means different things. Does it have 
express line items for year by year for fiscal years? Do you 
have that information in front of you?
    Ms. Schakowsky. Well, let us ask for the Deficit Reduction 
Act. You missed that vote. But all the Republicans on this 
committee supported it. It contained mandatory spending.
    Mr. Istook. Well, again, you see, the term ``mandatory 
spending'' is used to cover a lot of different definitions. I 
am talking about the practice of advance appropriations which 
are defined, and this is from OMB, which are defined as one 
made to become available 1 year or more beyond the year for 
which the appropriations act is passed. That is not the same as 
other categories of so-called mandatory spending. It is 
certainly not the same as permanent appropriations as they are 
found, for example, in Medicare. So again, if you have 
something specific you would like me to look at, the line item 
of a legislation, but I find nothing that is comparable to what 
happens----
    Ms. Schakowsky. Well, actually that is not true because the 
State pharmaceutical assistance program that you asked about, 
and I was listening to you while staff was telling me, that was 
unlimited 3 years into the future but absolutely unlimited. 
There was no dollar amount.
    Mr. Istook. If you can recite a--there is--well, then it is 
certainly not the same thing as what we are talking about if 
you say there was no dollar amount. If you have a citation to a 
specific section of a law that you want me to look at, I would 
be happy to look at that with you.
    Ms. Schakowsky. And let us remember also that none of us 
this was paid for, period, that that legislation was not paid 
for at all, and the Affordable Care Act is.
    Mr. Pitts. The gentlelady's time is expired. The chair 
recognizes the gentleman from Illinois, Mr. Shimkus, for 5 
minutes.
    Mr. Shimkus. Thank you, Mr. Chairman. Welcome to our 
panelists. I appreciate you coming. I am going to yield my time 
to Congressman Burgess for questions.
    Mr. Burgess. I thank the gentleman for yielding. You know, 
it is almost like a line from that Kevin Costner movie, if you 
build it, they will come, so OK, we are going to build the 
clinics. We are not going to fund the staffing but the 
requirement is that you have to staff the clinic if you are 
going to apply for the building fund, but what happens when the 
States get into a budget crunch. Who could believe that that 
would ever happen, but it could. The States get into a budget 
crunch and they can no longer afford that. The fact of the 
matter is, we are going to continue to build the clinics. That 
spending is required in the Patient Protection and Affordable 
Care Act. So it is duplicitous to say that hey, it is oK to pay 
to mandate the funding for the building of the clinics because 
people have to demonstrate an ability to staff. In fact, they 
don't. If they did, why have 4101(b) contained within the bill?
    Again, I will accept Secretary Sebelius's assertion that 
she doesn't know why those two sections were put side by side, 
4101(a) and 4101(b). I accept the fact that the bill was poorly 
crafted and poorly drafted. I accept the fact that even though 
I opposed H.R. 3200, it was an infinitely better crafted 
product than this thing that came out of the Senate on 
Christmas Eve. After all, 3200 had a severability clause. The 
bill that was signed in law contains no such clause and in fact 
if there were a severability clause, we might not be having the 
arguments that we are having down in Florida today.
    Dr. Goodman, I wonder if you would--we heard it expressed 
again today that the Patient Protection and Affordable Care Act 
is going to save $142 billion over the lifetime of the bill. I 
think that is preposterous. But you started to talk about the 
cost of the subsidies for purchase of insurance in the 
exchange. We have already talked about the huge deficit for the 
month of February, the extrapolated deficits into the future. 
What is going to happen to those projections when the subsidies 
for families earning up to $80,000 a year, what is going to 
happen when those subsidies kick in to the overall cost of this 
legislation?
    Mr. Goodman. Well, it is going to soar, so we are sort of 
treading water right now. There are a few changes that have 
been made but really everything begins January 1, 2014. That is 
when the mandates become effective, the subsidies become 
effective. Overall on the employer side, I think companies like 
McDonald's and Burger King, who employ a lot of workers who 
only make $10, $15 an hour, they are not going to be able to 
afford family coverage that costs as much as $6 an hour, so 
they are going to have to find a way to get their workers over 
in the exchange, and I don't know how they will do that, maybe 
treat them all as independent contractors, but they are going 
to find a way or they won't survive, and then when they get 
over there, the taxpayer is going to pay for not just the 
premium but going to reimburse those workers for a lot of out-
of-pocket costs.
    The costs are going to be quite large. Remember, the only 
way we really are paying for most of this is by thinking we are 
going to cut Medicare, but when you all 3 years from now start 
getting calls from seniors saying we can't find a doctor who 
will see us, then you are going to be under enormous pressure 
to undo all of that spending that is in the bill and then you 
are going to find that you really haven't paid for this at all.
    Mr. Burgess. And of course, the Independent Payment 
Advisory Board is beyond our scope today, but it should be the 
subject of a future hearing but that actually has some pretty 
dire consequences, again, wasn't part of the House bill, 3200, 
but certainly as part of the bill that was signed into law. 
Have you had any thoughts looking ahead to that Independent 
Payment Advisory Board and how that is supposed to structurally 
pay for the expansion of all of this?
    Mr. Goodman. Yes. And let me just say too that I think we 
do need to reform Medicare and there is a right way to reform 
it and the right way to reform it is to let doctors and 
hospitals come to Medicare and propose different ways of being 
paid. If they can save Medicare a dollar, you ought to be able 
to let them keep 50 cents or 25 cents, and if you did it that 
way, I think you would solve a lot of problems very quickly. 
But the only way this payment commission is going to be able to 
control cost is just by squeezing the providers. The only thing 
they know how to do is just squeeze down the doctor fees, 
hospital fees, and as the chief actuary of Medicare pointed 
out, the Medicare rates are going to be down here and everybody 
else's rates are going to be going like that, and the 
difference is going to grow wider and wider through time, and 
by the time we get to the end of the decade, doctors will 
prefer Medicaid patients to Medicare patients. The waiting 
lines are going to be long and seniors will be at the end of 
the line.
    Mr. Burgess. What is the implication for the average Member 
of Congress on that day?
    Mr. Goodman. You are going to be hearing from a lot of 
older voters and they are not going to happy.
    Mr. Burgess. I was going to say, are they going to be happy 
or sad?
    Mr. Goodman. They are going to be very sad.
    Mr. Burgess. I thank the gentleman for yielding his time, 
and I will back the 10 seconds.
    Mr. Pitts. The chair thanks the gentleman. The gentleman's 
time is expired. The chair recognizes the ranking member of the 
full committee, Mr. Waxman, for 5 minutes for questioning.
    Mr. Waxman. Thank you, Mr. Chairman. I would like to draw 
attention to a statement from Senator Harkin which I first of 
all ask unanimous consent to put into the record.
    Mr. Pitts. Without objection.
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    Mr. Waxman. He is chairman of both an authorizing committee 
and appropriations subcommittee, and he says, ``I understand 
the implications of this guarantee that Congress should mandate 
appropriations for certain programs in the Affordable Care Act 
that are fundamental to its success.'' So I thought he has a 
lot to say from both sides of authorizing and appropriating.
    The health insurance marketplace was broken, and reforming 
the health insurance market was imperative. We say this 
frequently, and I would like to ask rhetorically, what does it 
mean? It meant the number of uninsured Americans would have 
grown to 66 million by 2019. Those would be unhappy people as 
well. From 2004 to 2007, 12.6 million adults, 36 percent of 
those who actually tried to purchase insurance in the 
individual market, were denied coverage. They weren't happy 
about that. They were charged a higher premium rate or 
discriminated against because of preexisting conditions. Health 
insurance premiums more than doubled in the last decade and 
have risen three and a half times faster than wages during the 
same period, and at least 42 States, at least 75 percent of the 
insurance market was controlled by five or fewer insurance 
companies. This type of market concentration provides little 
leverage for consumers to fight insurance company abuses such 
as rescissions of health care coverage when someone gets sick 
or denials of medically necessary treatments are insisted on.
    Now, I might just point out that those facts are I guess 
the Republican plan because they want to repeal the Affordable 
Care Act, which would leave us with the status quo. They would 
do nothing. The Affordable Care Act addressed these problems, 
and here are a few of the examples. They prohibit insurers from 
denying individuals insurance or charging people more because 
of preexisting health conditions from hangnails to heart 
disease. They limit out-of-pocket spending for health care 
benefits, prohibit annual and lifetime limits by insurance 
companies, significantly reduce red tape, invest in ways to 
reform the delivery system to provide better care at lower 
costs.
    Senator Vitale, can you describe why health reform is so 
important, why repealing it would be disastrous for Americans, 
for the economy and for our health care system?
    Mr. Vitale. Thank you, Mr. Waxman. You all have a very 
difficult time of it here and you made some very difficult 
decisions and very controversial decisions. I can speak from 
the experience of New Jersey and what it means to have a State 
with 1.3 million uninsured mostly working people who get up 
every day, put on their shoes and try to make a living and 
provide for their families. They work for small companies by 
and large who can't afford the cost of health insurance to 
provide to their employees, and if they can, the contribution 
by the employee is usually beyond what it is that they can 
afford. So the simple facts are, and setting aside all the 
controversy between what is mandatory and what is 
discretionary, the fact of the matter is that there are 
millions of New Jerseyans and millions of Americans who are 
suffering every day without an opportunity for what is reliable 
and dependable and affordable health care. PPACA provides that. 
It is an imperfect piece of legislation, and most legislative 
initiatives are, and I can speak for that firsthand in New 
Jersey.
    Mr. Waxman. Now, if it weren't there, we would be back to 
the golden age of pre-Affordable Care Act, which I guess is 
what the Republicans would want.
    Now, one of the things they attack in this proposal today 
are the teaching health centers. For years, we provided 
mandatory funding for hospitals under the Medicare program to 
train medical resident trainees. In 2009, we provided about 
$9.5 billion in mandatory funding to train medical residents. 
Multiple expert bodies including MedPAC, the Council on 
Graduate Medical Education and others have called for more 
training of primary care residents and more training in the 
community because that is where most physicians practice today. 
That is why the ACA provided $230 million over 5 years to 
directly fund community-based centers to train primary care.
    Now, my colleagues on the other side of the aisle have 
repeatedly called for more workforce efforts. One of the 
witnesses, Dr. Goodman, has criticized the ACA for not 
providing enough funding to train physicians. Senator Vitale, 
can you tell us about the importance of funding to training 
primary care residents in your State?
    Mr. Vitale. Three years ago, I attended a class and I spoke 
to a class at Rutgers Medical School, and there were about 60 
students present and I asked by a show of hands how many were 
going forward to primary care. One person raised their hand. So 
the importance is of course--and thank you, Mr. Chairman. The 
importance is of course that we begin to develop this not just 
those who practice in primary care but also those who practice 
in advanced practice nursing.
    Mr. Waxman. Well, I can think of no better use of mandatory 
funds than to provide funding for residents.
    Mr. Pitts. The gentleman's time has expired. The chair 
recognizes the gentlelady from Tennessee, Ms. Blackburn, for 5 
minutes for questions.
    Mrs. Blackburn. Thank you, Mr. Chairman, and thank you to 
our witnesses for your patience today, and also for 
understanding that we have another hearing going on downstairs.
    Mr. Vitale, I appreciate that you are here. I was a State 
senator in Tennessee before I came here, and I was a State 
senator during the TennCare era, which was the test case for 
public option health care. Now, I know in New Jersey you have 
guaranteed issue and I think it is 45 mandates--am I correct--
that you all have to cover in that package? Which is pretty 
expensive. And the way TennCare is set up under an 1115 waiver 
with CMS, it was between the Governor's Office in Tennessee and 
CMS. So in New Jersey, do you all have any law on the books 
that allows the governor to spend State money without coming to 
the legislature?
    Mr. Vitale. Well, there are elements in every--and we 
balance our budget every year by constitutional mandate. There 
are elements in the budget that is part of the governor's 
budget and so he is of course free to spend the dollars in his 
budget appropriation.
    Mrs. Blackburn. OK. Let me ask you this, the 45 benefit 
mandates, that is a big number. Do you think as you are looking 
at the health care situation in your State and others and 
talking with us, do you think that individuals should have 
access to health care with fewer mandated benefits, State or 
federal mandated benefits?
    Mr. Vitale. I think we should all have the same benefits 
available to all of us.
    Mrs. Blackburn. So you think one size fits all?
    Mr. Vitale. In most cases, yes.
    Mrs. Blackburn. I have to differ with you on that.
    Mr. Istook, let me talk to you about the teaching centers. 
I found this very interesting. Section 5508 of Obamacare 
provides $230 million not simply an authorization but this is 
for the teaching study program yet the President's budget 
zeroes out funding for children's hospital graduate medical 
education. And you are a former appropriator so do you think 
that it is wise to make one program mandatory and beef up one 
and then completely cut out another one, especially when you 
are looking at children's health care?
    Mr. Istook. There is an unfortunate trend that we have seen 
in the President's budget proposals of substituting mandatory 
funding for discretionary funding, in other words, trying to 
remove things beyond the ability of Congress to control 
spending. Examples include not only what you cite but when the 
President says, for example, we are reducing discretionary 
spending, if you read the budget you find that one way is, you 
take Pell grants and say they are no longer discretionary, now 
they are mandatory. You take transportation funding and say it 
is no longer discretionary, now it is mandatory, and they then 
trumpet a claim that we have reduced discretionary spending. 
Well, you have done that by relabeling it as mandatory. There 
is no savings there and it is lousy practice as far as 
accountability.
    Mrs. Blackburn. Dr. Goodman, if I could come to you on that 
very point, because the concern of moving things from 
discretionary to mandatory is of great concern to us. As you 
all have reviewed the bill, have you been able to articulate 
the number of times that this has happened in the Obamacare 
bill and to look at the estimated impact above what we know as 
the appropriated dollars for this one action?
    Mr. Goodman. Well, not beyond what the Congressional 
Research Service report has stated. I just think there are, as 
my testimony indicated, fundamental flaws in this bill. And in 
response to Congressman Waxman's critique, behind every flaw 
that we discuss in this testimony, we said this is the 
alternative, this it the right way to do it as far as general 
concept is concerned, and if we don't do it the right way, then 
we are going to continue on a spending path that is simply 
unsustainable. There is nothing in the Affordable Care Act that 
fundamentally changes the way we are going to pay for health 
care. It is going to make all the perverse incentives that are 
now there worse than they were before, and the price we pay is 
going to be higher.
    Mrs. Blackburn. I found it so interesting last week, and I 
discussed this with Secretary Sebelius last week. There was a 
Wall Street Journal editorial where you had Ms. Cutter and Ms. 
Daparel, the word was that they were telling people not to 
worry about all the numerous waivers that were there and not to 
worry about the duplications, that this is a way--giving the 
States a waiver was a way to ease us more to a single payer 
system, and as we have looked at these programs, the personal 
responsibility education program, there is money for that that 
is made mandatory in the Obamacare program but yet the 
President's fiscal year budget, 2012 budget, includes $16 
billion for programs that overlap. Are you all doing any 
research work on that? And I know my time is expired and I will 
yield back at the end of your response.
    Mr. Goodman. Well, let us think about what those waivers 
are about. Two point seven million people have been granted a 
waiver. That contracts with 12,500 people who have the problem 
everybody is talking about, that they have been denied health 
insurance because of a preexisting condition. Twelve thousand 
five hundred people now have been signed up for insurance, 
paying the same premium healthy people pay. That problem is 
solved. The 2.7 million people are people like the workers at 
McDonald's who earn $10, $15 an hour. The insurance that they 
are going to have to buy for family coverage would be almost $6 
an hour. They can't afford it. McDonald's can't afford it. That 
is why they were granted a waiver but at the end of the waiver 
period the problem is not going to go away.
    Mr. Pitts. The gentlelady's time is expired, and the chair 
recognizes the gentlelady from Wisconsin, Ms. Baldwin, for 5 
minutes for questions.
    Ms. Baldwin. Thank you, Mr. Chairman, and before I turn to 
the topic of the hearing, I do want to express my gratitude to 
you and members on both sides of the aisle for advancing H.R. 
525 on public health veterinarians, which passed last night by 
the very comfortable margin of two votes. So mission 
accomplished with regard to that piece of important 
legislation, and I really do appreciate the efforts of members 
on both sides of the aisle.
    Turning to the subject at hand, many are familiar with the 
expression ``everyone is entitled to their own opinions but 
they are not entitled to their own facts,'' and I understand 
that my Republican colleagues may have differing opinions about 
the health care law that was signed into law last year but 
there should be no mistake about the facts. The five committee 
prints that we are looking at in this hearing put forth by the 
Majority will not create jobs. These proposals will not 
stimulate our struggling economy and these proposals will not 
put the middle class of America back to work.
    The Republican Majority is playing what I would consider a 
dangerous game of bait and switch with the American people. 
Despite promises from the new Majority during the midterm 
elections that this Congress would be focusing on creating jobs 
and bolstering the economy, the legislative proposals and the 
committee prints that they have offered us today fail to 
deliver on this promise. In fact, not only do the Majority's 
legislative proposals do nothing to create jobs or bolster the 
economy, I think these proposals would actually exacerbate the 
problem by taking away new job opportunities.
    With new investments in the health care law, we took 
tremendous strides towards expanding, for example, the primary 
care workforce, and we are on a path to train 16,000 new 
primary care providers in the United States. So far, my home 
State of Wisconsin has received $3.8 million for a primary care 
residency program, and we know how important training primary 
care physicians is for our economy. I mean, these doctors serve 
as gatekeepers, keeping people out of emergency rooms and 
controlling health care costs. The Republican proposal to 
change the teaching centers development grants program places 
this investment at risk and could ultimately worsen the health 
care workforce shortage. I fail to see how taking away funding 
for critical jobs is going to help our economy.
    Another proposal that we are looking at today would repeal 
funding for grants to States to establish exchanges. These 
exchanges are critical for ensuring that thousands of small 
businesses and 24 million Americans have access to new coverage 
options. The grants to States would provide States with the 
flexibility to create an exchange that meets each State's 
needs. Wisconsin has already received $38 million through an 
early innovator grant. This critical funding will spur job 
creation in my State and improve access to quality, low-cost 
health coverage.
    This Republican proposal raises an important question: Are 
we going to ask cash-strapped States to return the money they 
have already been awarded? Will Wisconsin have to return the 
$38 million that Governor Walker has already accepted? And I 
fail to see how rescinding money that will create jobs is the 
right thing to do to get our economy back on track.
    Mr. Chairman, the American people, the people of Wisconsin 
deserve better, and we should be focusing on the greatest need 
our country has right now, which is jobs, jobs and jobs. I 
would yield my remaining time to the gentleman from New York, 
Mr. Weiner.
    Mr. Weiner. Thank you very much, and welcome, Congressman. 
It is nice to see you back. It is nice to see people who leave 
this place with marketable skills. I am glad at least you do.
    I just want to ask a yes or no question, if I could, in the 
brief time that Congresswoman Baldwin has yielded to me. 
Congressman Istook, is Medicare a single-payer system?
    Mr. Istook. No.
    Mr. Weiner. Dr. Goodman, is Medicare a single-payer system?
    Mr. Goodman. No.
    Mr. Weiner. Senator Vitale, is Medicare a single-payer 
system?
    Mr. Vitale. I believe it is.
    Mr. Weiner. It is single payer in the traditional way that 
it is used because there is one person writing the checks but 
that doesn't mean that--right? I mean, basically the Federal 
Government collects our money in our taxes, in our payroll 
taxes and then reimburses doctors, reimburses clinics, 
reimburses other--that is a single-payer system. It doesn't 
mean that Medicare employs the doctors, it doesn't mean they 
employ the clinics, it doesn't mean they employ the 
pharmaceutical companies. It is just who passes the money 
along. And in the one second I have left, do you know what the 
overhead and profits is of Medicare? One point zero three 
percent.
    Mr. Burgess. [Presiding] The gentleman's time is expired. 
The chair recognizes the gentleman from Georgia, Dr. Gingrey.
    Mr. Gingrey. Mr. Chairman, thank you, and Representative 
Istook, let me associate myself with Representative Weiner in 
regard to his comments. Thank you for your service and happy to 
see you, and thank all three of the witnesses for your 
testimony today.
    I want to start out by saying that the actions of this 
Administration and the Secretary of Health and Human Services I 
think border on deception and they leave me with very little 
confidence in both Obamacare and the Administration's ability 
to enact the law through regulation over these next 3 years. 
Just last week was the latest example. Secretary Sebelius right 
here in this committee told Congressman Shimkus that the 
Administration was confident that she could spend one pot of 
money, $500 billion worth of money, twice, both to pay for 
Obamacare and increase the solvency of Medicare. And then next 
the Secretary testified that she had used her powers as 
Secretary to slip in an end-of-life provider code into Medicare 
in the dark of night without allowing for public comment. And 
finally, she told our panel and a Senate Finance Committee 
panel a few weeks ago that a major long-term-care program 
created in Obamacare that she is in charge of was totally 
unsustainable but only after direct questioning. No previous 
announcement to the American people or to Congress, and of 
course, I am referring to the CLASS Act.
    With these thoughts in mind, I wanted to ask you, 
Representative Istook, section 4002 of the Obamacare bill, or 
the Affordable Care Act, created a fund for prevention, 
wellness and public health activities. In the language of 
Obamacare, it says that these funds are for ``sustained and 
national investment in prevention and public health programs.'' 
Are the words ``prevention'' and ``public health programs'' 
defined in section 4002?
    Mr. Istook. I am not aware of any definition. I think that 
is left to the sole discretion and judgment of the Secretary.
    Mr. Gingrey. And so conceivably then Secretary Sebelius or 
any Secretary could use these funds for any purpose that they 
decide is prevention, correct?
    Mr. Istook. Oh, yes. They could be extremely broadly 
defined.
    Mr. Gingrey. Wide, wide discretion on the part of the 
Secretary of HHS.
    Mr. Istook. Right.
    Mr. Gingrey. Let me go to Mr. Goodman. You know, we all 
remember the Andy Griffith Medicare ads that the Secretary ran 
last year that looked a lot like to me political advertising 
for the Affordable Care Act, Obamacare. Is there anything that 
would prevent the Secretary from using these taxpayer dollars 
to pay for similar political advertising on provisions in 
Obamacare in a lead-up to the 2012 elections, as an example?
    Mr. Goodman. I don't think so, and let me say, those Andy 
Griffith ads were extremely deceptive bordering on fraud 
because what he talked about were the benefits for seniors 
under the bill but didn't mention any of the costs, and for 
every $1 of new spending, there are $10 of reductions in 
spending for seniors. So on net, there is going to be a lot 
less spending on senior citizens. You know, that ad made it 
sound like boy, once seniors find out how this works, they are 
going to like it.
    Mr. Gingrey. Well, I thank you for that response, and I 
wasn't going to use the word ``fraud'' but I guess ``bordering 
on fraud'' is acceptable language in your testimony, and I tend 
to agree with you on that.
    Dr. Goodman, how much authority does Secretary Sebelius 
have over Obamacare now that it is being implemented by 
regulation?
    Mr. Goodman. You know, I don't know but every time I learn 
about some new exercise of authority, I am shocked. I have 
never seen so much authority that has been given to a 
Secretary, nothing even close to it, and it bothers me because, 
you know, there are elections, Presidents come and go, 
Secretaries come and go, and if a Secretary has that much 
power, how do we know what is going to happen 8 years from now, 
12 years from now? We are no longer a government of laws, we 
are government of people and discretion, whims.
    Mr. Gingrey. Mr. Goodman, thank you.
    In the few seconds I have got left, let me shift to Senator 
Vitale. Senator, in your written testimony and what you said to 
us here today, you kind of touted what New Jersey has done in 
regard to the CHIP program and the fact that you cover 
childless adults, and I realize this goes back to Governor 
Whitman but, you know, and you talk about the fact that charity 
care went way down because you expanded this cover, the CHIP 
program. I think it was, what, something like 400 percent of 
the federal poverty level in New Jersey. Are you aware of the 
fact that most of these hospitals that provide charity care are 
not-for-profit, and in that status as not-for-profit they get 
tremendous tax breaks, and it is their obligation to be 
designated as not-for-profit to provide this charity care?
    Mr. Vitale. May I respond, Chairman? Thank you.
    Well, you are right, but the fact of the matter is that the 
overwhelming amount of charity care has just really been 
debilitating for our State's hospitals. It is so overwhelming 
that they do meet their charitable obligation as not-for-
profits but to the extent now that there are so many uninsured 
accessing health care in the worst and most expensive manner, 
in the emergency departments, has pushed a number of hospitals 
and into closure in our State, and those who are surviving are 
under increasing pressure from those who are uninsured.
    Mr. Gingrey. Mr. Chairman, reclaiming--I realize my time is 
expired and I appreciate your indulgence. If you could just let 
me make this one comment? I mean, the point I am making is that 
these hospitals, they are designed not-for-profit, and it 
doesn't mean that these patients are going to the emergency 
room to get their care. Most of these hospitals have outpatient 
clinics and the ability to provide the same level of care that 
they would be getting if they were signed up for SCHIP or in 
one of these exchanges that the good senator is referring to, 
and I will yield back and I thank you for your indulgence.
    Mr. Burgess. Thank you. The gentleman from New York is 
recognized for 5 minutes.
    Mr. Weiner. The problem is, they are not paid for. 
Ultimately, they have to pay for it. The bill fairy doesn't 
come in and say to any kind of hospital we are going to go pay 
your bills.
    By the way, Dr. Goodman, calling Andy Griffith a fraud is 
outrageous. He is one of the most beloved Americans. I am just 
kidding.
    Let me just, Senator Vitale, let me ask you a couple of 
questions. There has been a lot of discussion by the two 
gentlemen to your right about the inflexibility and the Federal 
Government control that is being taken by this bill. Let me 
just ask you a couple of questions. State insurance 
commissioners were still kept in charge of State insurance 
policies in the 50 States. Is that correct?
    Mr. Vitale. Yes.
    Mr. Weiner. And didn't the Affordable Care Act not only do 
that but empower them with additional tools they didn't have 
before on behalf of the residents of the State? Is that 
correct?
    Mr. Vitale. That is correct.
    Mr. Weiner. Is it also correct that under the federal 
Affordable Care Act the exchanges if the States so choose are 
going to be set up as State-run, State-governed exchanges? Is 
that correct?
    Mr. Vitale. That is correct.
    Mr. Weiner. Isn't it also true that despite the efforts of 
many of my Republican friends and perhaps the gentlemen to your 
right, efforts to nationalize tort reform were resisted? Isn't 
tort reform still the purview of the States under this law?
    Mr. Vitale. It is and always has been.
    Mr. Weiner. Isn't it also true that the expansion of 
Medicaid between now and 2017 is entirely picked up by the 
Federal Government? Is that true?
    Mr. Vitale. Yes.
    Mr. Weiner. Isn't it also true that in 2018, 2019, 2020 and 
2021, if there are fewer poor people, fewer people bankrupted 
by health care costs, for example, more people working, more 
people employed, the number of Medicare beneficiaries if your 
State is successful will go down, will it not?
    Mr. Vitale. Yes, it will.
    Mr. Weiner. And with it will be Medicaid expenses, will it 
not?
    Mr. Vitale. Yes.
    Mr. Weiner. So in fact, if you are a well-governed State 
and the economy does better, meaning less, God willing, 20 
percent of the economy is health care, and people are employed 
more like they have been increasingly--more private sector jobs 
have been created under President Obama than under 8 years of 
President Bush--if it continues that way, Medicaid expenses 
could go down. Is that correct?
    Mr. Vitale. That is correct.
    Mr. Weiner. Now, if I can talk to you a little bit about 
some of the things that are required in here and just get your 
feedback on them. One is this notion of standards. The 
gentlewoman from Tennessee says oh, one size fits all, but let 
us assume for a moment the citizens of New Jersey through their 
State rights say that we are going to have certain health care 
standards that are robust, we want to make sure that our 
insurance actually covers people, and the State of Tennessee 
says no, we are going to have a scaled-down program that has 
virtually no benefits but lower cost, isn't it very likely that 
citizens of New Jersey, if they can go to that lower standard, 
the healthy ones will say, Wait a minute, I don't need a lot of 
insurance, I am going to go to the lower standards--won't there 
be a race to the bottom, less insurance and ultimately the same 
thing we have now, which is people who are underinsured? 
Wouldn't that be the effect?
    Mr. Vitale. That will be the effect, yes.
    Mr. Weiner. So the effect of having standards across State 
lines is to make sure there is fair competition between States.
    Next is this notion of mandatory coverage that is enshrined 
in Romneycare. Are you aware that under the mandatory policies 
of Romneycare that with the subsidy, a very similar model that 
we set up, under Romneycare, a grand total of 0.67 percent 
chose not to take the subsidy and buy insurance? Are you aware 
of that?
    Mr. Vitale. Yes.
    Mr. Weiner. It is a very tiny number because actually this 
is going to come as a surprise, the American people when given 
a subsidy, they want the insurance.
    Now I would like to talk a little bit about Dr. Goodman and 
Congressman Istook's solutions. They say why don't we look at 
what Walmart does and they are able to lower costs if we just 
give people money, they will go out and buy insurance. Well, if 
you don't believe in the laws of big markets and you don't 
believe in the laws of the economy that more people joining 
together can negotiate for lower prices, you can do something. 
Maybe my father when he retired at 61 with an incidence of 
prostate cancer was not yet eligible for Medicare, he went out 
as an individual and said I am going to try to buy insurance so 
the insurance company said one of two things: One, we don't 
want you, you are going to get sick, our business model is 
paying out as little as possible, or two, they said $17,000 to 
$20,000 a year from my retired father. And the reason is very 
simple. Under Dr. Goodman's model, we can all be given money to 
go out and spend and people like me and Congressman Istook, who 
is healthy as an ox, he will be able to get insurance, but what 
do you do with the people who the insurance company says I 
don't want it. Under Dr. Goodman's model, there are no 
standards, everyone just gets a check. What you are doing is 
deconstructing one of the most powerful models that Walmart 
uses, which is when you get large pools of people, you are able 
to hold costs down. If you don't believe me, look at how auto 
insurance works. It aggregates risk over the whole pool. You 
say to each and every citizen, go out and buy for yourself, you 
are resisting the ideas of a free marketplace and how it works 
and works best. And I have got news for you, Dr. Goodman. Do 
you know who is going to love your idea? Insurance companies. 
They love the idea of just give the money, we will get some 
people come in with the money but we will get to decide who we 
want and who we don't, and you ignore the idea that sometimes 
what you have got to say is you know what, let us pool people 
together, and for those of you who are wondering, the idea of 
expanding Medicare, the boogeyman of the single-payer system, 
is based on that model because we have all these citizens, we 
hold down costs and we aggregate everyone together. That is the 
way the system works correctly. I thank you.
    Mr. Pitts. The gentleman's time has expired. The chair 
recognizes the ranking member for a unanimous consent request.
    Mr. Pallone. Mr. Chairman, I would ask unanimous consent to 
include the testimony of Jeff Levi of the Trust for America's 
Health and from Alan Weil of the National Academy for State 
Health Policy, and I would also like to add a facts sheet on 
your proposal, the chairman's proposal, to block mandatory 
funding in the Affordable Care Act. This was prepared by Mr. 
Waxman, our ranking member. I believe you have all of these.
    Mr. Pitts. Without objection, so ordered.
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    Mr. Pitts. In conclusion, I would like to thank our 
witnesses, former Congressman Istook, Dr. Goodman, Senator 
Vitale, for their testimony. I would like to thank them and the 
members for participating in today's hearing. I remind the 
members that they have 10 business days to submit questions for 
the record, and I ask the witnesses to please respond promptly 
to the questions. Members should submit their questions by the 
close of business on March 23rd.
    With that, this subcommittee hearing is adjourned.
    [Whereupon, at 1:50 p.m., the subcommittee was adjourned.]
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