[Congressional Record Volume 140, Number 95 (Wednesday, July 20, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 20, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                        THE COST OF HEALTH CARE

  Mr. GRAMM. Madam President, today I want to talk about health care, 
and I want to talk about a particular facet of the debate and that is 
cost.
  I think it is fair to say that the President's health care plan is 
dead. It is also fair to say that the plan is dead not because the 
President lacks a big megaphone. As President of the United States, he 
has the largest megaphone on the planet. Nor is the President's health 
care plan dead because he is not a great salesman, or because the First 
Lady is not a great saleslady, or because the administration is not 
full of great salespersons; I think they are all great salesmen. The 
President's plan is dead because it is a bad product.
  I also think that the President's plan has not been rejected by the 
American people because it would bankrupt the country--though I believe 
it would. I do not think it has been rejected because the employer 
mandates would cut off the bottom rung of the economic ladder, put tens 
of thousands of small businesses out of business, and maybe put a 
couple of million Americans out of work--though I believe it would do 
that too.
  I do not believe the President's plan has been rejected because 
rationing health care would destroy the greatest health care system in 
the history of the world--I believe it would--but I do not believe that 
is the reason the American people have, by and large, and now in ever-
increasing numbers, rejected the President's health care plan.
  I think they have rejected it because of the freedom issue. The 
President has been unable to convince the American people that in the 
name of helping 15 percent of the people who at least on one day last 
year did not have health coverage, we ought to take private health 
insurance away from the 85 percent who have it and force them to buy 
health care through the Government.
  As I am fond of saying, when my mama gets sick, I want her to talk to 
a doctor and not some Government bureaucrat.
  Americans all over the country feel that way, and that is why I 
believe the President's plan has been rejected.
  In analyzing the plan, I do not think people ever got down and looked 
at the cost involved, and as we begin this debate on health care in 
earnest, I want to talk about cost today. I want to talk a little bit 
about the President's plan to set the frame of reference, and then I 
want to talk about the Finance Committee plan, which will soon come to 
the floor of the Senate.
  First of all, the President's plan by the President's own definition 
is the largest government program in the history of mankind. Even if 
you make two heroic assumptions, which the President makes, No. 1, that 
wage and price controls work--something that has never happened in the 
5,000 years of recorded history--and second, that the Government 
through these Government-run purchasing cooperatives under the control 
of a seven-member board in Washington, DC, could actually run something 
as complicated and important as the American health care system--and 
quite frankly, Madam President, I reject both those assumptions--but if 
you make them, as the President does, even under his assumptions, 
within 2 years his health care plan would cost more than Social 
Security and become the largest single program of the Federal 
Government.
  In 5 years that program would be fully under way, and in 10 years it 
would cost more than $740 billion a year. Nobody but Ross Perot knows 
what $1 billion is. But let me set it in perspective. That $740 billion 
a year, which the President's health care plan will cost per year, in 
10 years, even under all of his assumptions, is more than half the 
total level of Federal outlays today.
  Now, how is the President going to pay for this plan? Well, in the 
original plan, he was going to pay for it largely through--I believe 
and everyone who has looked at the plan believes that it is at least 50 
percent underfunded--a 9.5-percent payroll tax, 7.9 percent imposed on 
the employer, 1.6 percent imposed on the employee. I am not going to 
get into that today; perhaps I will talk about it tomorrow.
  But the Congressional Budget Office, the Ways and Means Committee, 
all of the institutions of Congress, all of which are controlled by the 
Democratic Party today, have looked at payroll taxes and concluded that 
they are paid, ultimately, not by the employer but by the employee.
  So, basically, what we have is a 9.5 percent tax imposed on every 
salary to pay for this health care plan.
  Many people rejoiced yesterday when for the first time the President 
said maybe we will give up on the so-called employer mandate, which is 
a code word for payroll tax.
  I think the President is simply bowing to reality. Not one single 
Republican--or I guess I should say we have 43 Republicans, who are 
adamantly opposed to this payroll tax. Only half the Democratic Members 
of the Senate have come out for it. So the President would be pushing 
hard to get 30 votes as of today for that plan.
  Now, there are many people who are tempted to say that maybe 
everything is great since the President has given up on this 9.5-
percent payroll tax. The problem is you still have to pay for the 
program. So if you give up on this 9.5 percent payroll tax and you are 
going to fund a program that costs more than Social Security, how are 
you going to fund it?
  Well, you could raise income taxes by 50 percent on every working 
family in America. That would be one way of doing it. And I am sure 
there are a lot of others.
  But by simply saying ``I want to spend all this money; I want to 
extend all these benefits, and I am willing to look at another way of 
paying for it besides a 9.5-percent payroll tax'' does not solve the 
problem.
  That is one of the things that I have found disconcerting about the 
health care debate from the very beginning. There are really two ways 
of debating this issue. One is to spend all your time talking about the 
benefits without leveling with people about the cost, and that is 
basically what we have done. And might I say, Madam President, both 
parties can be criticized for that. It is always good to talk about 
benefits. It is always tough to talk about how you are going to pay for 
them.
  The second way I believe is the legitimate way, and I would feel 
better about the debate if we did it this way, because I think the 
American people would then have an opportunity to make an informed 
choice. That way would be to get out a piece of paper and say, ``Here 
are all the benefits; this is what we are going to give you, and this 
is what we are going to take away from you to pay for them.''
  I submit, Madam President, that the President will never do that in 
this debate, and the reason he will not do it is he could not write a 
plan under those circumstances remotely similar to his plan that the 
American people would willingly pay for.
  Let me give you an example of the problem by taking the Finance 
Committee bill, which is far less grandiose than the President's bill, 
but it is still pretty grandiose. Let me remind you that the 
President's bill basically collectivizes health care despite the fact 
that the President bristles when you say it. The bottom line is that 
under the President's plan, if you work for the Federal Government you 
are privileged and you are exempt; if you work for a company with 5,000 
or more employees, they can buy you out of the health care plan by 
paying a 1 percent payroll tax, and every company in America that can 
will do that.
  But if you are anybody else, which is almost everybody, which is 
certainly over 90 percent of the working people in America, your 
private health insurance is going to be canceled and you are going to 
have to buy health care through a Government-run cooperative where the 
parameters of our choices in the operation of those plans are 
controlled by a seven-member board in Washington, DC. That is a 
Government-run system.
  Now the Finance Committee has come up with an alternative, and I want 
to focus on its cost. The Finance Committee says that their plan costs 
about $250 billion over a 5-year period. We do not know because the 
Congressional Budget Office has not had an opportunity yet to assess 
what this plan costs. The Wall Street Journal has estimated that the 
Finance Committee plan costs $450 billion over a 5-year period.
  Let me tell you in very simple terms what this so-called moderate 
plan does. Under this so-called moderate plan, 110 million Americans 
will get some form of Government-funded health care; 110 million people 
will get some form of Government--which is taxpayer--subsidy to buy 
health care. That is almost half the population of the United States of 
America.
  How do the proponents of this plan propose that we pay for giving 
Government assistance to almost half the people of the United States to 
buy health care?
  Their plan in my opinion--in the opinion of the Wall Street Journal, 
and the opinion of most observers--is grossly underfunded, probably by 
50 percent.
  But let me go over to the other side of the story that nobody talks 
about, and that is what they do to pay for this plan.
  First of all, they impose an excise tax on your insurance premiums. 
If you think you are having trouble paying your insurance premiums 
today, they are going to impose an excise tax on your insurance 
premiums that will raise $30 billion. They are then going to raise the 
Medicare tax on the people who have paid the most in taxes and who are 
paying most into the Medicare trust fund. They are then going to impose 
a 25-percent tax on the health care benefits of the 40 percent of the 
people who have the best health insurance.
  We do not have the figures from the Congressional Budget Office, but 
the Cooper plan in the House, which was costed out by the Congressional 
Budget Office and is a very similar package, would raise taxes on the 
insurance benefits of 53 percent of the American people; 8.7 million 
families would pay at least $500 a year more in taxes by having their 
employer benefit health insurance taxed.
  Madam President, how many Americans are in favor of imposing not one 
but two taxes on their health insurance policies? How many Americans 
realize in this so-called moderate plan that we are going to impose an 
excise tax on everybody's premiums that they are paying for to buy 
private health insurance now? How many people realize that 40 percent 
of the families in America will pay a 25-percent tax on their health 
insurance benefits because this plan says those 40 percent who have 
their insurance policies are too good and so we ought to tax them in 
order to let the Government subsidize 110 million people?
  How many people know we are talking about taxing Medicare?
  So my point here today, Madam President, is very simple. I have often 
felt, especially in talking about the President's plan, like a mosquito 
who finds himself blown into a nudist colony. I do not quite know where 
to hit first. Every part of it is bad.
  Our problem is that we have just touched the surface of this debate. 
We have a so-called moderate plan that is going to come to the floor of 
the Senate. The American people have been told in elaborate detail what 
they are going to get out of this plan, but they have not been told 
that it is going to impose new taxes on their health insurance 
benefits. People have not been told what this is going to cost and how 
we are going to pay for it. And if we are going to have an enlightened 
debate, people have to know the facts.
  I will close with the old Biblical admonition--``Ye shall know the 
truth and the truth will make you free.''
  In this debate about health care, where we are talking about the 
future of America, where we are talking about a dramatic change in 
policy, it is absolutely imperative that people know what the facts 
are, what we are talking about, what we are going to do, how we are 
going to do it, and how we are going to pay for it.
  I, for one, intend, as this debate evolves--I would guess over 
several months--to be absolutely certain, given my ability as one 
Member, that people know what the facts are.
  I yield the floor.
  Mr. SPECTER addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Senator from Pennsylvania.
  Mr. SPECTER. Madam President, I have sought recognition to talk about 
the nomination of Judge Breyer.
  The ACTING PRESIDENT pro tempore. The Senator would need unanimous 
consent to extend morning business.

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