[Congressional Record Volume 140, Number 101 (Thursday, July 28, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 28, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                          WHITEWATER HEARINGS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
February 11, 1994, and June 10, 1994, the gentleman from California 
[Mr. Dornan] is recognized for 40 minutes as the minority leader's 
designee.
  Mr. DORNAN. Mr. Speaker, I am speaking to a group of 300 young 
American men and women over at George Washington University and I have 
to be there at 8 o'clock, so this 40 minutes is going to have to be 
about 22 minutes.
  Mr. Speaker, I just left the Committee on Banking, Finance and Urban 
Affairs committee room, where they are conducting so-called hearings on 
Whitewater. You had to see the scene there to really believe it. It 
will be all over the evening news. I have never in my 16 years here 
seen more than a panel of six people at a witness table. Not on the 
Foreign Affairs Committee where I served for years, or the Committee on 
Science, Space and Technology, or the Armed Services Committee where I 
serve now, or in the Permanent Select Committee on Intelligence 
upstairs in closed session. Rarely, maybe four or five times a year, 
you will see six witnesses, and they are usually all focused on one 
subject. In the Armed Services Committee, and this was the policy in 
all of the years for the better part of a decade that I was on the 
Foreign Affairs Committee, we usually have panels of four people 
because this is the best you can handle when you have 10, 20, or in the 
case of the Banking Committee, 30-some Members who want to speak or ask 
questions and are restricted to the 5-minute rule.
  The White House must have been a lonely place today because here is 
who we had down at the Banking Committee. Mr. Bruce Lindsey, assistant 
to the President. Mr. George Stephanopoulos, senior policy adviser to 
the President. Harold Ickes, assistant to the President and Deputy 
Chief of Staff. Mark Gearan, assistant to the President for 
communications. John D. Podesta, assistant to the President and staff 
secretary. Clifton Sloan, associate counsel to the President. Neil 
Eggleston, associate counsel to the President. Margaret Ann Williams, 
Chief of Staff to the First Lady. Thomas McLarty, former Chief of Staff 
and charter friend of Bill. Lisa Caputo, press secretary to the First 
Lady. There were 10 people lined up to, I think, deliberately obfuscate 
the whole issue. I consider the gentleman from Texas [Mr. Gonzalez] as 
a friend of mine, but this is such a transparent attempt to rig the 
hearings and prevent Republicans from asking hard questions and getting 
solid answers in return.

  And while they are trying to make the hearings boring, they are not 
going to be boring because of the visual impact of 10 people who are 
all trying to be questioned only by the majority Members, the 
Democrats, who are just laying on the compliments. And here is the 
order of Members for questioning on the Republican side. Leach who is 
just a general linebacker. Then McCandless, Lazio and Ridge will handle 
Mr. Sloan. McCollum and Nussle will handle Eggleston.
  Roth, Bachus, and Castle will question Bruce Lindsey. Roukema and 
Thomas will handle Podesta. Bereuter and Grams will handle Ickes. 
Pryce, Linder and King will handle Margaret Williams. Knollenberg alone 
gets Stephanopoulos. Baker gets McLarty. Sam Johnson, a hero Air Force 
fighter pilot, gets Gearan all to himself. And Huffington, our 
candidate for the U.S. Senate against Senator Diane Feinstein, gets 
Caputo all to himself.
  This Whitewater hearing is truly a circus, and I do not mean to drive 
the audience over to watch it on another channel, except maybe for a 
quick look. Let me just tell you that going by the news desk I picked 
up one of our good freshman Members, Peter King's press release of the 
day. He is from the Third District, Nassau County. Here is what he says 
about yesterday's White- water hearing session, and you will learn more 
by this synopsis than you will by actually watching the hearing.
  He says:

       The first day of the House Banking Committee's Whitewater 
     hearings exposed yet another pair of widely contradictory 
     stories regarding improper White House contact with agencies 
     conducting criminal investigations of the Whitewater-Madison 
     Savings and Loan Affair. Going into today's session of the 
     hearings,

that is this morning, King said:

     the continuing emergence of conflicting stories from Clinton 
     administration officials indicates that we are still a long 
     way from the truth.

  Ah, the truth, the truth. The truth shall set you free.
  Well, we will see.

       During his questioning of White House counsel Lloyd Cutler, 
     King pointed out that on October 6, 1993, President Clinton 
     met with Arkansas Governor Jim Guy Tucker,

sitting Governor Jim Guy Tucker:

     who had earlier been named as the possible target of a 
     Resolution Trust Corporation investigation of Whitewater-
     Madison. According to Cutler, the President was unaware that 
     Governor Tucker was named in the criminal referral.

  Do your homework, seven score and six year senior adviser.

       King told Cutler that documents in the committee's 
     possession showed that senior White House adviser Bruce 
     Lindsey was brief in detail on the RTC criminal referrals on 
     September 30, 1993. Furthermore, it is believed that Lindsey, 
     while traveling to the West Coast with the President on 
     October 4 or 5, 1993, briefed him on the criminal referrals.

  King says:

       Someone is not telling the truth. Did Bruce Lindsey, a 
     senior White House staffer and close personal friend of the 
     President, fail to inform him of the criminal referral 
     mentioning Tucker, or did he brief Clinton in full?

  I wonder.

       Either Mr. Lindsey and the White House counsel's office are 
     guilty of very shoddy staff work or the President decided to 
     go ahead and meet with Governor Tucker despite the appearance 
     of White House interference with an ongoing criminal 
     investigation.

  Quoting again from Pete King: 

       Mr. Cutler's limited inquiry simply failed to get to the 
     facts. Under questioning during Tuesday's hearing, Cutler 
     admitted that his findings on this meeting were based 
     entirely on the uncorroborated testimony of long-time friend 
     of Bill, Bruce Lindsey. The President was never asked about 
     his wholly improper meeting with Jim Guy Tucker. Cutler fully 
     accepted a secondhand version of events and gave testimony to 
     the committee that would have been disallowed as a double 
     hearsay in court.

  Can you not just see it now?
  ``Objection, your honor, double hearsay.''
  ``Sustained,'' as fast as the judge could bring down the gavel.
  ``What did the President know and when did he know it,'' King asked.

       Why are people close to the President and close to the 
     First Lady not telling the truth? Who is telling them not to 
     tell the truth? These are the questions we must answer in 
     this preliminary round of Whitewater hearings.

  You are not going to get to the truth, Mr. King, or my fellow 
Americans, Mr. Speaker, with 10 witnesses sitting at the witness table. 
There is just no way you can go through and ask all of the necessary 
questions you need to with so many men and so little time, as they say.


                              health care

  Mr. DORNAN. Mr. Speaker, I had intended to speak for 30 minutes today 
on health care because of something I was reminded of at the back of 
the church over here at St. Peter's. Yes, I am one of those practicing 
Catholics who on occasion makes what we used to call romantically a 
visit in the old days. I made a visit to St. Peter's which has a 12:10 
Mass every day, and when voting allows, yes, I slip over to pray for my 
country. At church I picked up the Standard, which is the Catholic 
newspaper for this area, and I read a pretty good story. I wish I had 
brought it with me to put in the Record. It is a story on how the 
Catholic Church has decided to pull out all of the stops and enter the 
health care debate full score, full court press, all ecclesiastical 
guns blasting. It is good news for the President on the one hand and it 
is bad news for the President on the other.

                              {time}  1930

  The bad news for the President is that the Catholic Church is going 
to use its full good will and bona fides to stop taxpayer funding of 
abortion-on-demand in any health care bill.
  The good news for the President is that the Catholic Church has a 
big-hearted concept of social justice, and they are as strong as Miss 
Hillary or Bill himself on universal coverage. In other words, if the 
President and Miss Hillary would dump abortion coverage across the 
board and not try and weasel around with little conscience clauses, 
then the Catholic Church, which is about a quarter of our country's 
population, would support them. Let me clarify the Catholic population 
because you have to take out all the Judas Iscariots and lousy, weak 
Catholics who have not been to church in 10 years, 5 years, or only go 
at Easter and Christmas. They follow the regimen of a lot of other 
Christian churches in America, who try to go 52 weeks a year and hit 
those holy days of obligation.
  If abortion funding is taken out, the Catholic Church would tell 
their members to back up the President when he holds up that veto pen 
and says universal coverage or nothing. I have to say I disagree with 
the church on this, which is not often, if ever.
  Now, before someone calls my office or writes in and says I am a 
Papist dog, a toady to the Catholic Church, or resurrects that 
photograph that showed Al Smith, Mr. Speaker, cutting the tape to the 
Holland Tunnel under the Hudson River and then sold it in the South, 
passed it off as Al Smith, Governor of New York, opening up the trans-
Atlantic underwater tunnel from the Vatican right to the Gracie Mansion 
there on the East River. Let me say what I think my obligation is as a 
stumbling but loyal, practicing Catholic to pay attention to my bishops 
or even to the lowliest of holy priests when it comes to issues before 
our country.
  If all of the bishops say to me, ``You are wrong, Dornan, on Central 
America. You should support those wonderful Sandinistas. They mean well 
regardless of their 16 concentration camps. The Contras are off base. 
So was your friend, Ronald Reagan. Go with our policy on Central 
America.'' I would say, ``I am sorry, bishops. This is a secular issue. 
I may have access to more information than you, particularly if I have 
access to intelligence briefings and, therefore, I must respect your 
counsel, but I can go the other direction.'' That applies to issues 
that are quasi in the social/moral field like capital punishment.
  As in O.J. Simpson's case, for instance. If as the alleged killer, 
O.J. is found guilty and does not get the death penalty for such a 
brutal, vicious, double murder, then capital punishment is ridiculous 
in this country, and life imprisonment without parole will become, I 
think, the tougher of the two punishments. At least with capital 
punishment you can make your peace with God and get Pat O'Brien to take 
you to Old Sparky as opposed to living in a cage like an animal in 
Federal prison for the rest of your time on this planet.
  But on capital punishment, a Catholic of good conscience, any 
Protestant of good conscience, any practicing Jewish member of that 
great faith, any Moslem of good conscience, they can go any way they 
want on the issue of capital punishment.
  Abortion? Euthanasia? When my church speaks on those issues, I must 
listen. But, on health care, when it comes to universal coverage, I 
must disagree.
  Here is why I cannot go for universal coverage at this point: When 
the administration says universal coverage, I do not know about the 
Catholic bishops, but when the Clintons say universal coverage, they 
mean mandates. The White House will point to polls showing Americans 
support universal coverage. I have seen those polls. I accept them as 
valid polling. Yet the only way to achieve Government-enforced 
universal coverage is through mandates, taxes, and limits on medical 
care.
  When the public is told how the administration's plan would provide 
universal coverage, support not only collapses, it collapses quickly 
right in front of your eyes.
  Why do we, and I use that editorial we to mean most Republicans, 
oppose universal coverage? Because, again, it means mandates. The only 
way to achieve it is through limits on care and also through taxation.

  By insisting on universal coverage, the President is dooming health 
care reform this year.
  If President Hillary Rodham Clinton, H.R.C., which to some of us 
means Her Royal Czarina, because we think she is not only the 
functional chief of staff in the White House, keeps chewing her husband 
out every time he comes back from a Governors' conference, as he did 
from Boston and says, ``Get with the program, Bill, this is where we 
stand, universal coverage, not 95 percent, the whole enchilada,'' if 
they win, then Americans will have Government-set limits on health 
spending and care. It means less freedom of selection of doctors, 
particularly of specialists. It means price controls, which means fewer 
life-saving drugs will be developed, even though we lead the world in 
the area of research and development. It means mandates, which will 
lead to higher taxes, layoffs, lower wages, and as the King of Siam 
said, ``et cetera, et cetera, et cetera.'' On the other hand, we 
Republicans and conservative Democrats support universal access to 
health insurance and some commonsense reforms that are widely supported 
and which will address the true problems in our system of health care.
  And there are problems in our current system. We do not need to 
overhaul one-seventh of the entire national economy, which is 14 
percent of our gross domestic product. We need to make some minor 
adjustments to what is already the best health care system in the world 
so that we can make health insurance more affordable and accessible to 
everyone while preserving the quality of medicine and freedom of 
selection.
  Now, the Catholic Church's position on universal coverage is based 
solely on morality, which is not a bad way to base your position on 
most issues, but not necessarily on this one. This is a theme echoed by 
Hillary, reading Tikkun, and coming up with all of those vague 
Aristotelian theories about the quality of life and modern morality. It 
got her on the cover of Newsweek or Time with Bill Bennett, which is 
not too bad to have those two sharing it. Bill sharing it properly by 
his tremendous cut-and-paste job, the best I have ever seen in my life, 
of all of the great Aesop's Fables and Pinocchio and everything under 
the sun on morality and virtues.
  I think every family should have a Bible on one nightstand, if they 
are from a Judeo-Christian heritage, and on the other, as least for the 
foreseeable future, Bill Bennett's ``Book of Virtues.''
  Bill got on the cover of Newsweek or Time because of his ``Book of 
Virtues.'' Hillary got there because of talking about the meaning of 
life. Sounds like a Monty Python film, ``The Meaning of Life.'' So here 
is Hillary, with the Catholic bishops, as of this week, echoing this 
theme of morality. Most liberals are on board with that theme, too. 
Hillary, and others, argue universal coverage is also needed to contain 
costs. Without universal coverage, they say, those without insurance 
will still be showing up at emergency rooms across America and throwing 
themselves across the front doors of hospitals, and many of them 
severely need instant care; they will continue to pass those costs 
along to those with insurance, and the costs will continue to increase.
  And that is amazing in that photo op a few days ago with Miss 
Hillary, the First Lady, holding this little child. He looked like he 
was 3, 4, 5, 6 years of age. She held him and then raised her voice and 
became very strident when talking about this, her pet issue. It was an 
amazing moment to see how she has committed her life to this concept of 
universal care.
  It would have been fun to be a fly on the wall, or maybe an Arkansas 
trooper who still has access to a First Family, watching how Bill was 
received back from that night in Boston before the Governors when he 
talked about 95 percent. She must have read him the riot act. He's 
probably used to it, though.
  We mainstream Republicans and conservative Democrats argue that by 
their own logic, morality is not a rationale, since under the liberals' 
proposed system, where using Bill's Governors' speech, only 95 percent 
are covered by insurance, everyone who needs medical care gets it. Of 
course, this is pretty much how the system works today.

                              {time}  1940

  If we need to pay for all these people, as Mrs. Clinton keeps saying, 
that show up at emergency rooms, then everybody is already getting 
coverage. That example proves their own point. It is who pays that is 
the issue.
  And this is where all the support for the Clinton plan, even for 
Clinton-lite, the revised plan that Mr. Mitchell in the Senate is 
honchoing, this is where it starts to fall apart, and they lose their 
support. The simple question is how are we going to pay for universal 
care? The issue of cost savings can be addressed by harnessing the 
power of the market; that is to say, the medical savings account.
  At this point I am going to place in the Record and editorial from 
last month's Wall Street Journal called Consumer-First Health Care. 
These types of cost savings measures would not be allowed under the 
Clinton plan.
  All in all, Mr. Speaker, and I say this returning respect to my 
Catholic bishops, their universal coverage is like a chameleon, like 
that cat in Alice-in-Wonderland, the more you look at it, it just sort 
of disappears and you wonder if you are left with a good feeling and 
nothing else. It is as phony as a three-dollar bill.
  So I will close, sticking with my 22-minute time limit here, and I 
will ask for permission in a second for putting this in the Record, it 
is a Wall Street Journal article today. It says:

       Public, in Health-Care Poll, Disapproves of Performance of 
     Clinton and Congress.

  They are even angrier at the Congress than they are at the Clintons.
  Listen to this:

       As President Clinton heads to Harry Truman's Missouri home 
     town this weekend in hopes of igniting a final burst of 
     enthusiasm for health-care reform, he faces a public that is 
     decidedly sour on the topic.
       A majority of Americans disapprove of the job Mr. Clinton 
     is doing on health care and an even bigger majority 
     disapprove of Congress' performance, a new Wall Street 
     Journal/NBC News poll indicates. 6 in 10 doubt that anything 
     major will pass Congress this year. And 58 percent think that 
     if something does pass, it actually will raise health costs, 
     while 38 percent say quality will decline.

  Put me in that category, Mr. Speaker, put me in that 58 percent 
majority. It does not ask whether or not we were going to lose freedom 
of selection for doctors or specialists or did not ask the question 
about rationing.
  A little tiny article cites that Clinton's approval rating edges 
down. The article says:

       Clinton's approval rating continues to edge down.
       Americans' opinion of President Clinton's job performance 
     continues to edge downward.
       In a new Wall Street Journal/NBC News poll, 49 percent of 
     those surveyed approved of the job Mr. Clinton is doing as 
     President, down from 52 percent a month ago. Meanwhile, the 
     share of those who say they disapprove of the President's job 
     performance has risen to 44 percent from 39 percent.

  That is the share of those who said they disapproved of the 
President's job performance has risen to 44 percent.
  The toughest one still remains, handling of foreign policy. Thirty-
four percent, that is 9 points below his election figure of 43, not a 
majority but a plurality, they say 34 percent approve of the 
president's performance while 54 percent disapprove. That is the 
highest disapproval for a President on foreign affairs in my lifetime--
well, no it rivals L.B.J., in his last year and a half. Those marks are 
unchanged from a month ago. It can go lower, but I doubt that we will 
see it even lower than 34 across the board in all these categories.

  On the economy, 45 percent approve of his performance. That is a 3-
point drop from last month.
  So this trip to Independence, MO, is going to be a biggie, and he 
will probably pick up all 10 of those people who are testifying over in 
the Banking Committee today, on Whitewater and load them on Air Force 
One with all the other prepubescent staffers running around there 
secretly carrying their own copy of the book ``Agenda.'' At this point, 
Mr. Speaker, I will place in the Record that article from the Wall 
Street Journal today and two other articles, the excellent one on 
Health Care Assault on the Middle Class, by Peter Ferrara, and one by 
the Wall Street Journal a week ago, ``Mandates Would Hurt the Middle 
Class.''
  With that, bingo, there goes my 22 minutes. I yield back the balance 
of my time, and I will head over to George Washington University.
  [The material referred to follows:]

                     [From the Wall Street Journal]

                       Consumer-First Health Care

       The great medical care debate has reached the stage where 
     all principles are out the winder; the only goal is to cobble 
     together some contraption that can garner 218 votes in the 
     House and 51 in the Senate. It is perhaps time, 
     intellectually at least, to step back and ask what the 
     problem is to begin with.
       Now President Clinton is going back and forth on 
     ``universal coverage,'' always a quizzical lodestone. In this 
     society, we do not have any meaningful problem of people 
     dying in the street for want of medical care; in that sense 
     we already have something approaching ``universal access'' to 
     care, whether or not through insurance ``coverage.'' Even in 
     terms of insurance, remember, we already have Medicare and 
     Medicaid, so the uninsured are by definition neither elderly 
     nor poor.
       There are problems with portability and pre-existing 
     conditions, as Martin Feldstein discusses nearby, but the big 
     problem is exploding costs. These problems, in turn, relate 
     to the historical accident that linked medical care and 
     employment; health insurance benefits proliferated when wage 
     increases were limited by World War II price controls. The 
     result was that employees pay for health care with what seems 
     to be Other People's Money, a sure-fire recipe for exploding 
     spending and higher prices.
       In recent years this trend has been intensified by 
     government programs such as Medicare and Medicaid. Today, 80 
     percent of medical expenses are paid by somebody other than 
     the patients themselves. The graph nearby shows how out-of-
     pocket expenditures have declined from some 60 percent of the 
     total health bill in 1960 to 20% today, while government's 
     share has doubled to 46%. This problem is not likely to be 
     solved by yet bigger government programs. The way to control 
     costs and make insurance affordable for more people is to 
     reverse the trend, making patients part of the solution. The 
     trick to a more competitive, economical system is to figure 
     out ways to let patients be both the consumer and the 
     purchaser of more medical services.
       As it happens, experiments are under way. At least three 
     companies--Golden Rule Insurance Co., Forbes Inc. and 
     Dominion Resources Inc.--have implemented the Medical Savings 
     Account plan developed by the National Center for Policy 
     Analysis of Dallas. They're showing how market-oriented 
     reforms can hold down costs and still preserve the freedom of 
     choice and innovation for which America's health care is 
     renowned; versions of these plans are included in the House 
     Ways and means Committee bill and Senator Bob Dole's 
     proposal.
       Golden Rule, in Indianapolis, specializes in individual 
     medical care coverage. Pat Rooney, its chairman, reasoned 
     that if employees paid directly for a portion of their own 
     care they would get the same level of treatment but would 
     wind up spending less after comparison shopping caught on. He 
     envisioned a plan giving a typical employee the option of 
     sticking with his or her existing coverage or choosing a 
     deductible of, say, $3,000 a year and putting the premium 
     savings into a ``medical savings account,'' which would be 
     drawn down as medical expenses were incurred.
       The remaining part of the employee's health contribution 
     would allow the company to buy a catastrophic health care 
     policy to cover all of the employee's medical bills over, 
     say, $3,000 a year. All of an employee's health concerns 
     would be covered, but the employee would have an incentive to 
     comparison shop. Anything left in his $3,000 annual medical 
     savings account would be his to keep tax-free, so long as it 
     was used for insurance premiums between jobs or long-term 
     care.
       With these ideas implemented, Golden Rule's 1,300 employees 
     can choose traditional $500-a year-deductible plan or one 
     with a $3,000 family deductible. If they choose the latter, 
     Golden Rule deposits $2,000 into a medical savings account. 
     The first $2,000 of medical bills are paid out of the 
     account, the next $1,000 is out-of-pocket and everything 
     above $3,000 a year is paid by Golden Rule. In 1993, 81 
     percent of Golden Rule's employees chose the savings account 
     option, and this year the number rose to 90 percent.
       The reason is that since 85 percent of Americans spend less 
     than $3,000 a year on medical care, and 73 percent have less 
     than $500 a year in claims, Golden Rule allows employees to 
     keep any balance left in their medical savings account. 
     Today, the total medical bill for Golden Rule employees is 
     about 60 percent of what it used to be under a conventional 
     insurance program.
       That's because many Golden Rule employees made dramatic 
     changes in their health-care purchases. Melanie Woodcock 
     reports that a local hospital offered to perform surgery on 
     her for $6,046 after she offered to pay up front in cash. 
     Otherwise, the total bill would have been $9,843. Deanna 
     Irick says she would rarely go to the doctor when sick 
     because she didn't want to pay the $250 deductible. Last 
     year, she used her medical savings account for six-month 
     checkups and treatment for a throat infection, visits she 
     ``normally would have skipped.'' She was able to spend the 
     company's money, which had been put into her savings account, 
     rather than her own. One out of five Golden Rule employees 
     report they used their savings accounts for a medical service 
     they would not have used under their old plan.
       Forbes magazine in New York gives employees a $1,200 annual 
     account in addition to their normal insurance. Every time 
     they file $1 in medical claims they lose $2 from the account. 
     Employees get to keep what's left in their account at the end 
     of the year. The paperwork on routine claims has gone down 
     dramatically and the company's health costs fell 17 percent 
     in 1992 and 12 percent last year.
       Dominion Resources, a Virginia utility holding company, 
     deposits $1,620 a year into a bank account for the 80 percent 
     of its employees who choose a $3,000 deductible plan rather 
     than a lower deductible. Since 1989, Dominion's health care 
     costs have risen less than 1 percent a year. The average 
     number of claims filed per employee has declined by nearly 
     half, and paperwork costs have been cut dramatically. All 
     three companies use wellness programs to encourage employees 
     not to skimp on spending for physicals and other preventive 
     medical techniques.
       Support for medical savings accounts is growing. Six 
     states--Arizona, Colorado, Idaho, Mississippi, Missouri and 
     Michigan--have changed their tax laws to accommodate medical 
     savings accounts. The United Mine Workers union has signed a 
     new five-year contract with a health plan that includes a 
     $1,000 bonus that workers can use to pay for their medical 
     plan's $1,000 annual deductible. Mine workers still have 
     first-dollar coverage, but the first $1,000 they now spend 
     will be their own money rather than their company's.
       Many companies currently offer flexible health spending 
     accounts, but under current tax law the money reverts to the 
     employer if it isn't spent at year's end because it would 
     then be taxable income to the employee and not deductible to 
     the employer. There is broad bipartisan support for changing 
     the tax law to level the playing field and give medical 
     savings accounts the same tax advantages as group insurance. 
     Even the bill that passed Senator Kennedy's Labor Committee 
     included a provision urging the adoption of medical savings 
     accounts. Rep. Andy Jacobs of Indiana, the Democrat who won 
     Ways and Means approval of medical savings accounts, says 
     they ``could be the most effective medical cost containment 
     measure ever passed by Congress.''
       Most of the health bills now before Congress remind us of 
     Henry Ford's philosophy behind the Model-T car; ``You can 
     have any color you want as long as it's black.'' Health care 
     reform that includes medical savings accounts would represent 
     real consumer sovereignty: patient self-interest would be 
     harnessed to keep costs down, and workers would build up 
     their own tax-free health care funds for when they were 
     between jobs. Health care security would be enhanced, but not 
     at the cost of quality or freedom of choice. In its current 
     mood, however, Congress may very well not advance health care 
     innovation, but smother it in desperate haste.
                                  ____


             [From the Wall Street Journal, July 28, 1994]

Public, in Health-Care Poll, Disapproves of Performance of Clinton and 
                                Congress

                  (By Gerald F. Seib and David Rogers)

       Washington.--As President Clinton heads to Harry Truman's 
     Missouri hometown this weekend in hopes of igniting a final 
     burst of enthusiasm for health-care reform, he faces a public 
     that is decidedly sour on the topic.
       A majority of Americans disapprove of the job Mr. Clinton 
     is doing on health care, and an even bigger majority 
     disapprove of Congress' performance, a new Wall Street 
     Journal/NBC News poll indicates. Six in 10 doubt that 
     anything ``major'' will pass Congress this year. And 58 
     percent think that if something does pass, it actually will 
     raise health costs, while 38 percent say quality will 
     decline.


                         hollow victory for gop

       But all of that is a hollow victory for Republicans. For 
     whatever problems Mr. Clinton faces, the survey shows that he 
     still has support on a couple of key points, and that the 
     public is judging Republicans at least as harshly.
       Two-thirds of those surveyed said they agree with Mr. 
     Clinton that a bill should be vetoed if it doesn't guarantee 
     universal coverage. Backing for the president's approach of 
     requiring employers to pay for health insurance for their 
     workers is softening, but still draws majority support, by a 
     37 percent to 21 percent margin, people tend to trust 
     Democrats more than Republicans on health care right now, 
     while a majority say Republicans are mostly trying to gain 
     political advantage out of the issue.
       ``Hollow victories are better than hollow defeats,'' 
     concludes House Republican Whip Newt Gingrich. But he also 
     acknowledges: ``We have only marginally succeeded in 
     explaining what we are for.''
       Overall, the poll, conducted by Democrat Peter Hart and 
     Republican Robert Teeter, indicates that Americans haven't 
     changed their support for the basic elements of universal 
     coverage and a standard comprehensive benefits package for 
     everyone. But the survey also shows that the president faces 
     a challenge in stirring public enthusiasm: Health-Care reform 
     ranks behind both the economy and crime in the public's 
     current list of top government priorities.


                     lawmakers beholden to business

       Above all, the poll suggests that nobody--Democrat or 
     Republican--is getting much political mileage out of health 
     care. Indeed, while just 40 percent of Americans say they 
     approve of the job that Mr. Clinton is doing on health care, 
     a mere 26 percent say they approve of the job Congress is 
     doing.
       For lawmakers, there seems to be a gap between public 
     sentiment and their own ability to act. One reason is that 
     the health issue, more than any issue of recent years, is at 
     once both highly personal and complex.
       But there's another, internal factor. The current debate 
     has dramatized how lawmakers have become increasingly 
     beholden to business interests that oppose major features of 
     the president's agenda.
       Labor, the administration's ally on health reform, is no 
     match any longer for business political action committees, 
     which pump tens of millions of dollars into House and Senate 
     campaigns every two years. In the late 1970s, Democrats 
     relied more on labor PACs than the combined contributions of 
     business PACs. Today, even House Democrats, more liberal than 
     their Senate counterparts, get significantly more from 
     business.
       Among Southern Democrats, whose region has the highest rate 
     of uninsured workers, there is little affinity with labor. 
     And if it seems twice as hard to pass an employer mandate in 
     the Senate than in the House, it may be related to the fact 
     that the ratio of business to labor contribution is twice as 
     high in the Senate.
       Republicans are most indebted to business, and if anything, 
     the health debate has reinforced this alignment. In fact, 
     some Republican strategists are disappointed that the debate 
     has so focused on business views rather than broader 
     philosophical arguments.
       The intense business opposition helps explain why support 
     for an employer mandate has eroded even more quickly in 
     Congress than in the public. In the new survey, 38 percent 
     said they think a requirement that employers pay at least 80 
     percent of their employees' health coverage must be in a 
     health bill, while another 16 percent said they favor such a 
     mandate but would be willing to give it up to see some 
     legislation passed. But 40 percent said they oppose such a 
     requirement, up from 29 percent last December.
       House Majority Leader Richard Gephardt concedes he has only 
     ``a shot'' at passing a Democratic-backed plan containing 
     such a requirement that employers pay as much as 80 percent 
     of workers' insurance. His counterpart, Senate Majority 
     Leader George Mitchell, is suggesting a smaller 50 percent 
     employer mandate, which would only take effect after the turn 
     of the century and then only if voluntary measures have 
     failed to achieve 95 percent coverage.
       In fact, much of the debate now turns on what will happen 
     if the mandate provisions are dropped. Mr. Mitchell, who 
     vowed yesterday to keep the Senate in session six days a week 
     into the August recess if needed, appears to be crafting his 
     bill with this in mind, as he experiments with subsidy 
     schemes aimed at targeted populations, such as uninsured 
     children or workers between jobs. Part of this effort is 
     aimed at boosting participation rates and trying to get 
     closer to the 95 percent goal. But if employer mandates are 
     rejected, it also sets up a framework for a scaled-back bill 
     that would give up any pretense of universal coverage and 
     instead focus on specific problems where Democrats could show 
     progress going into the fall elections.
                                  ____


               [From the Wall St. Journal, July 28, 1994]

            Clinton's Approval Rating Continues to Edge Down

       Washington.--Americans' opinion of President Clinton's job 
     performance continues to edge downward.
       In a new Wall Street Journal/NBC News poll, 49 percent of 
     those surveyed approved of the job Mr. Clinton is doing as 
     president, down from 52 percent a month ago. Meanwhile, the 
     share of those who say they disapprove of the president's job 
     performance has risen to 44 percent from 39 percent.
       Mr. Clinton also continues to get particularly low marks on 
     his handling of foreign policy, where just 34 percent say 
     they approve of his performance while 54 percent disapprove. 
     Those marks are unchanged from a month ago. On the economy, 
     45 percent approve of his performance, down from 48 percent 
     last month.
                                  ____


             [From the Wall Street Journal, July 28, 1994]

                Health Care Assault on the Middle Class

                           (By Peter Ferrara)

       President Clinton and congressional Democrats are now 
     arguing that their proposals for government-run health care 
     should be passed because only their approach will help the 
     middle class. This is one of the gutsiest moves in political 
     history, because Mr. Clinton and friends are now selling as 
     the great virtue of their health care reforms the exact 
     opposite of what those reforms will do. Mr. Clinton's 
     proposal, and its close cousins passed out of liberal 
     controlled committees in Congress, should be rejected 
     precisely because they would ruin health care for the middle 
     class and the elderly in America, in the following ways.
       Health Care Rationing: The Clinton plan, and similar 
     proposals out of congressional committees, are based on 
     massive government health care rationing. The key component 
     of that rationing is a system of global budget and price 
     controls. That system would centrally include sharp and 
     arbitrary limits on private health plan premiums.
       As a result, the system would sharply and arbitrarily limit 
     the amount that private health plans all across America could 
     spend on health care for the middle class. One recent study 
     concluded that to meet the Clinton spending limits, health 
     care spending by 2005 would have to be reduced by 18 percent 
     from current trends. Another study suggests that such 
     spending would have to be slashed by 24 percent by the year 
     2000.
       With such sharply reduced resources, doctors and hospitals 
     would not be able to maintain the same high quality care as 
     today. They would have to cut back on the services and care 
     they provide. They would no longer be able to rapidly acquire 
     and offer the latest innovations, newest technologies and 
     most cutting-edge break-throughs, as they do today. They 
     would no longer be able to provide the latest, most advanced, 
     most sophisticated care for the most critically ill. Patients 
     would be subject to delays and long waiting lines to receive 
     tests, surgery and other health care, as the system would no 
     longer have the resources to maintain prompt and ready care.
       The middle class and the elderly in America today have far 
     more access to more advanced sophisticated care than anywhere 
     else in the world, but this will be lost under the Clinton 
     plan and related proposals because of the rationing they 
     would impose. These proposals are effectively designed to 
     redistribute health care away from the middle class and the 
     elderly, to give more to the uninsured and favored special 
     interests.
       Lost Freedom of Choice: Under the Clinton plan and related 
     proposals, the middle class would have to buy the health 
     insurance coverage chosen by the government, rather than the 
     coverage they may prefer. Consequently, each family would be 
     forced to pay for many benefits that may not be suited to 
     them and that they do not want. These may include unlimited 
     abortion on demand, drug and alcohol rehabilitation, broad 
     mental health benefits, low deductibles, and many routine 
     health services that may be cheaper to pay for directly 
     rather than through insurance.
       Higer costs: The Clinton bill and related proposals would 
     force many, probably most, in the middle class to pay more 
     for their health coverage and care, due to several factors. 
     As discussed above, people would be forced to pay for 
     expensive coverage they do not want, and do not pay for 
     today. Mandated drug and alcohol rehab benefits at the state 
     level have been found to raise premium costs by 8 percent. 
     State mandated mental health benefits raise costs by 10 
     percent. Over time, special interests would only add more and 
     more required, expensive benefits.
       In addition, all insurers would be forced to adopt 
     community rating, which requires everyone to pay the same 
     premiums regardless of expected health costs. This would 
     require younger and healthier workers to pay substantially 
     more than today. Under such community rating, premiums for 
     those aged 25-29 would be 50 percent higher than otherwise, 
     and those aged 26-34 would together pay $26 billion more per 
     year.
       The proposals also provide sweeping, extensive, new 
     subsidies for the poor, lower income workers, and small 
     businesses to pay for the lavish, required health care 
     coverage. These subsidies would be paid for by the middle 
     class.
       The proposal would extend third party insurance coverage to 
     more people and more benefits, adding to the incentives at 
     the root of our health care cost explosion. With a third 
     party insurer paying the bills, consumers don't seek to avoid 
     unnecessary costs, and doctors and hospitals don't compete to 
     reduce costs.
       Finally, the proposals would also increase taxes on the 
     middle class. The Committee bills impose new taxes on health 
     insurance premiums that will be paid by the middle class. 
     With Mr. Clinton's support, they also abolish flexible 
     spending accounts that allow workers a tax deduction for 
     health expenses not covered by an employer's health plan.
       How to Help the Middle Class: In contrast, the proposal 
     offered by Senate Minority Leader Bob Dole would solve the 
     problems troubling the middle class, without all the middle 
     class carnage described above.
       The Dole proposal requires guaranteed renewability for all 
     insurance policies. That means insurers cannot cancel 
     policies after the insured becomes sick, or charge them 
     discriminatory higher rates. Mr. Dole also provides for 
     portability, enabling workers to take their guaranteed 
     renewable insurance with them from job to job.
       Mr. Dole allows individuals to deduct the cost of insurance 
     they purchase directly, providing them the same tax advantage 
     enjoyed by workers with employer provided insurance. And 
     allows workers medical savings accounts, which would give 
     workers direct control over health care funds, with back-up 
     catastrophic insurance. Workers would then benefit directly 
     from the resulting incentive and competition to control 
     costs.
       Mr. Dole shows that the problems of concern to the middle 
     class can be solved without a government takeover of the 
     entire health care system that would destroy the quality of 
     health care for the middle class, and their freedom and 
     control over such care, as the proposals by Mr. Clinton and 
     congressional Democrats would do.
                                  ____


             [From the Wall Street Journal, July 21, 1994]

                  Mandates Would Hurt the Middle Class

                         (By Martin Feldstein)

       President Clinton's campaign to rescue his health care plan 
     emphasizes that his proposed health insurance mandates would 
     be good for the middle class. Although the president repeats 
     this claim in every speech, nothing could be further from the 
     truth. Mr. Clinton said this week that there might be room 
     for compromise on mandates, but if Congress enacts anything 
     like the Clinton health plan, the American middle class would 
     be the big losers.
       The Clinton health program would hurt the vast middle class 
     in order to provide insurance to a relatively small number of 
     currently uninsured low-income people and to transfer income 
     to many more low-income people who are already insured. The 
     program would be wasteful and inefficient, a ``negative sum 
     game'' in which the middle class would lose far more than the 
     poor gain. It can be understood only as a technique for 
     achieving a redistribution of income that could not be 
     enacted in a more straightforward way.


                            primary concern

       If President Clinton really wanted to help the middle 
     class, he would focus on the health insurance issue that he 
     knows is its primary concern: the ability to maintain 
     existing insurance coverage after a job change or the loss of 
     an employed spouse. Relatively simple legislation could 
     require insurance companies not to cancel existing policies 
     and not to exclude pre-existing conditions when an individual 
     transfers to a new group. Companies that sell insurance could 
     also be required to offer periodic enrollment opportunities 
     for any one who wishes to purchase insurance, with premiums 
     limited by using assigned risk pools to deal with high-risk 
     individuals or groups.
       But instead of reforming the existing insurance to deal 
     with the legitimate concerns of the middle class, the 
     president and Mrs. Clinton have pursued the goal of building 
     a massive government-managed system for redistributing health 
     care and income.
       The middle class could hardly be the big winners from 
     mandating universal coverage, as President Clinton claims, 
     since more than two-thirds of the uninsured are in families 
     with below average income. Moreover, the relatively small 
     number of currently uninsured middle-class families who would 
     become insured under the Clinton plan would have to pay for 
     that insurance by a decline in their wages.
       Virtually all economists agree that most firms that are 
     required to provide health insurance must offset the higher 
     cost of fringe benefits by paying lower wages or laying off 
     workers. The Congressional Budget Office has stated this 
     clearly in its analyses of health insurance options. Even the 
     administration has recognized this in its congressional 
     testimony.
       A currently uninsured individual who now earns $40,000 
     would suffer a wage decline of more than $2,500 because of 
     the Clinton employer mandate. A two-earner couple with 
     $40,000 of combined earnings would experience twice as large 
     a wage decline. These wage cuts might not be immediate, but 
     within a few years wages would inevitably be depressed below 
     what they would otherwise have been. If wages could not fall 
     that much, jobs would be lost as firms respond to the higher 
     overall cost of labor by moving production offshore, 
     subcontracting, and substituting equipment for employees.
       Some firms would be able to avoid reducing wages by the 
     full amount of the managed insurance costs because they have 
     the market power to pass along some of the higher employment 
     costs though price increases. When that happens, middle-class 
     consumers as a whole would pay for the expanded insurance.
       The currently insured middle class would also be hit in 
     other ways. The Clinton plan would require middle-income 
     families to pay substantial premiums out of their own 
     pockets. For the typical married couple, the required out-of-
     pocket premium would be $872 a year. The administration has 
     acknowledged that more than 40 percent of Americans could 
     face higher out-of-pocket premiums under the Clinton plan 
     than they do today.
       Although the middle class has to pay for its health 
     insurance through reduced wages, the Clinton plan would 
     subsidize the premiums of low-wage firms. These subsidies 
     would translate into higher incomes for millions of lower 
     wage employees who are now insured. The cost of providing 
     these subsidies would be borne by the middle class in the 
     form of extra premium payments and an explicit increase in 
     taxes.
       The administration has claimed that it can finance the 
     subsidies to low-income employees with a tax on cigarettes 
     (another hit to the middle class). In reality, the Clinton 
     plan would face a much larger financing gap of about $120 
     billion a year before the end of the decade. This gap could 
     be financed only by substantially higher taxes on the middle 
     class. Official estimates might understate the financing cost 
     in order to make it easier for Congress to enact the 
     legislation. But once the benefits are enacted, the 
     middleclass taxpayers will have to pay for them.
       Little is heard these days of the administration's early 
     claim that, by controlling the cost of care, it could avoid 
     such a financing gap. No one really believed that the 
     administration could achieve cost reductions of the magnitude 
     that it projected. Moreover, middle-class voters were rightly 
     worried that controls on health-care costs would restrict 
     their choice of doctors and hospitals and would force 
     reductions in the quality and quantity of care that they 
     received.
       But although such tough cost controls are not part of the 
     president's current sales pitch for his health plan, they 
     would play an important role if the Clinton plan were 
     enacted. Only by controlling middleclass spending on health 
     care can doctors and other health providers be redirected to 
     meet the increased demand from lower-income individuals that 
     would result from expanding their health insurance. And 
     limiting the future growth of government health spending is 
     crucial to the president's goal of containing the budget 
     deficit while increasing welfare payments and expanding other 
     government social programs.


                             very bad deal

       So the middle class would not only face lower wages, higher 
     premiums, and a substantial tax increase but would also see a 
     decline in the quantity and quality of middle-class health 
     care. In short, the Clinton health plan would be a very bad 
     deal for the middle class.
       If the president is the expert on domestic policies that he 
     claims to be, why doesn't he understand all this? And if he 
     does understand it, why doesn't he level with the middle 
     class and admit that it is being asked to pay more and accept 
     less health care in order to redistribute income and health 
     care to lower-income groups?

                          ____________________