[Congressional Record Volume 140, Number 112 (Friday, August 12, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 12, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                HEALTH CARE REFORM AND THE MITCHELL BILL

  Mr. SIMPSON. Mr. President, for the past 2\1/2\ years, it has been a 
privilege for me to be involved in a Republican health care task force 
chaired by my friend and colleague, the junior Senator from Rhode 
Island, John Chafee. It is quite impossible to fully describe the hard 
work and dedication this man displayed in taking up this task; steady, 
thoughtful, reflective, bright, persistent, congenial, and much more. 
And the Senator from Rhode Island educated 35 to 40 Republican Senators 
on the complexities of U.S. health care, principles of health care 
reform, with 2 years of meetings, every Thursday at 8:30 in the 
morning. I was a reluctant and tardy schoolboy on several of those 
occasions. Breakfasts were very sparse. And we did our work. We 
traveled to Annapolis for 2-day seminars, and finally produced 
legislation with sound principles of health care.
  This rigorous education enabled us to learn more about the full 
glossary of health care terminology. We came to realize how complex it 
is. We struggled with the technical issues. We sat and scratched our 
heads for weeks. Every time we would come up with a solution, we would 
find something on the other side that prevented it. We discussed all of 
the issues, how best to achieve reform in the health care system, and 
how much that reform would cost the American people. I am no master at 
this, but I have been paying attention.

  To my knowledge, the Senate Democrats have never organized such a 
comprehensive study group, and there are many on that side of the aisle 
who are very adroit and knowledgeable on this issue.
  So I think it is fair to remind my colleagues, as well as the public, 
that the Republicans do not need to be lectured about the urgency of 
health care reform. We have been immersed in the issue for over 2 
years. We have been through the whole gamut of issues and concerns. We 
have learned the hard way that it can take weeks of meetings to fully 
understand and prescribe proper solutions. The process in which we are 
currently participating--one in which we are presented with one bill 
one day, only to receive another a few days later just as we were 
reviewing the cost estimates of the preceding one--makes a mockery of 
the process of study and reflection in which we Republicans have been 
faithfully engaged in these past years.
  We have done our level best to be play a constructive role in this 
process. Republicans were, in a sense, kept in the dark when the First 
Lady's plus member task force began its confidential deliberations over 
the details of the President's health care plan. Regrettably, Mrs. 
Clinton led this effort without consulting some of the very people who 
created the very best health care system in the world. The Republicans 
anxiously waited for months for the President's plan. We were quite 
dismayed to find then that his agenda called for these mandates, taxes, 
layers of bureaucracy, price controls, and deficit spending. Then we 
watched the House and Senate committees hold hearings and mark up their 
versions of the Clinton Health Security Act. It soon became very 
obvious to everyone involved that the President's bill was not going to 
get the support of the American people.
  In fact, my friend and colleague on the Environment and Public Works 
Committee, Senator Moynihan, chairman of the Committee on Finance, 
together with a majority of the Senate Finance Committee, recognized 
this fact early in the deliberations and decided to go with a stripped-
down version of the bill with no automatic mandates, and slightly less 
Government bureaucracy.
  So then, of course, we returned to a bill which is the essence of the 
Clinton bill after watching it hacked apart by criticism from the 
American public. The American people have spoken very clearly in 
opposition to the Clinton bill, and I have no doubt they will continue 
to oppose it in its latest, repackaged version, when they discover all 
of the ingredients in the cauldron. Macbeth would envy the ``odious 
brew.''
  Let me list some of the salient features of this bill. One is a 
triggered mandate that can only result in a loss of jobs. We think that 
is a payroll tax. Even the small business exemption contained in the 
Mitchell bill--employers with 25 or fewer employees are exempt from the 
mandate--could create daunting disincentives for small business to 
expand. What happens when you hire the 26th worker? Then it would 
include the cost of insuring the entire firm. These are things we must 
look at.
  Under the Mitchell bill, more than 100 million people--almost 1 out 
of every 2 Americans--would be eligible for subsidies. That is more 
than the number of beneficiaries currently in Medicare and Medicaid and 
Social Security combined. Some families that include a pregnant woman 
and children, if they have incomes of up to 300 percent of the poverty 
level, would be eligible for subsidies--meaning that a family of four 
with an income of $44,000 would be eligible for subsidies to purchase 
health insurance coverage. The cost of this new entitlement program is 
totally unclear, but CBO has previously estimated that a much less 
generous subsidy contained in the Finance Committee bill would cost 
nearly $924 billion over the first 8 years. It would almost immediately 
become the third largest entitlement program in the entire Federal 
budget.
  This is not the only new entitlement. There are two others. These 
programs are estimated to cost up to $150 billion. There is a new 
prescription drug benefit added to the Medicare Program and a new long-
term care program for the severely disabled.
  This new home and community-based long-term care program covering all 
Americans would cover all persons who are severely disabled, regardless 
of their age or their income or net worth.
  I can only tell you, Mr. President, that my family knows too well 
about the costs and heartaches of caring for elderly parents. My 
father, who suffered from Parkinson's disease, was in the West Park 
long-term care center for in Cody, WY, for several years. My mother is 
still in her own home, but requires around-the-clock nursing care. This 
type of care, ladies and gentlemen, is not inexpensive. It costs us $8 
an hour, 365 days a year. But I come from a family that has always 
looked out for one another, and we have been blessed with enough means 
to do so and are very privileged to be able to do that. My brother, 
Pete, and I never thought twice about taking care of our parents, as 
they always took care for us so lovingly. Not everyone can afford that, 
and the Government cannot afford it. So those are things we are going 
to have to deal with. Now we are talking about home care. The problem 
with all of this is the cost. The senior groups keep pushing and 
pushing and pushing for long-term care benefits, regardless of net 
worth or income, but none of these groups have realistically addressed 
the actual costs of such a program. They are always simply wanting 
more. This would expose the Federal Treasury to a huge new entitlement, 
one that could not possibly be handled.
  So this is not going to be something that we are going to like. 
Somebody is going to have to pay for this. I just finished work with 
the entitlements commission, a bipartisan group, chaired by Senators 
Kerrey and Danforth. They have worked doggedly, and they have done 
yeoman work. This is an interesting committee and commission.
  I ask unanimous consent that the names of the members of that 
Commission be printed in the Record.
  There being no objection, the list was ordered to be printed in the 
Record, as follows:

       Chairman: Robert Kerrey (D-NE).
       Vice Chairman: Jack Danforth (R-MO).
       Bill Archer (R-TX).
       Dale Bumpers (D-AR).
       Eva Clayton (D-NC).
       Michael Castle (R-DE).
       Thad Cochran (R-MS).
       Christopher Cox (R-CA).
       Kika de la Garza (D-TX).
       Robert Denham.
       John Dingell (D-MI).
       Pete Domenici (R-NM).
       Tom Downey.
       Sandra Freedman.
       Porter Goss (R-FL).
       William Gray.
       Robert Greenstein.
       Judd Gregg (R-NH).
       Karen Horn.
       Tom Kean.
       Alex McMillan (R-NC).
       Carol Moseley-Braun (D-IL).
       Daniel Patrick Moynihan (D-NY).
       Pete Peterson.
       Harry Reid (D-NV).
       Roy Romer.
       Dan Rostenkowski (D-IL).
       Martin Sabo (D-MN).
       Jim Sasser (D-TN).
       Alan Simpson (R-WY).
       Richard Trumka.
       Malcolm Wallop (R-WY).

  Mr. SIMPSON. So here is this group, going across party lines to 
present the bare, raw facts. Here is one of the charts contained in the 
report. It shows you that if we do nothing, Federal health care 
spending will triple by the year 2030. Here it is, 1993, 3.3 percent of 
gross domestic product. We are not talking about a percentage of the 
budget. We are talking about GDP. It will go 3.3 percent in 2030 to 
11.0 to GDP, not budget, sucking up more than we can ever imagine.
  I remind my colleagues of what that means. That is a tripling as a 
percentage of the economy, it is growing so much faster than the 
economy that it will take up three times as large a share of it. So 
that is where we are--even if we add nothing with regard to health 
care.
  We often hear that ``if we enact health care reform, all of our 
problems will be solved.'' We often hear that said. Wrong, forget it. 
That is certainly not true with this health care reform, which 
preserves, even accelerates, Federal health care spending trends. Even 
if we had perfect health care reform--meaning that if we slowed health 
care costs down to the point where they grew no faster than inflation, 
the aging of the population would by itself assure that Federal health 
care spending would still take up twice the share of our national 
economy in the year 2030 that it does today. So we are not going to get 
this done, even if we had hallowed perfection in health care reform. 
This is not my conclusion alone; it is the conclusion of 30 out of 32 
members of the bipartisan Entitlement Reform Commission.
  When the subject of health care reform was first debated, I was 
receptive and eager to work in a bipartisan fashion--and I still am. I 
reflected on information such as this and reached the unavoidable 
conclusion that some types of reforms would be necessary to avoid 
fiscal disaster.
  So why do we need health care reform? When people say we do not need 
it, remember how we got here. We were spending $900 billion a year on 
it. In 2030, it would cost $2 trillion. We are going to add to this 
picture of skyrocketing costs portrayed in this chart.
  In the flurry of all this, we have forgotten the fundamental issue in 
the debate: containing health care costs, trying to rein in health 
care. Those are the major reasons we became involved in this. Now it 
seems that this has been overshadowed by this issue of universal 
coverage. All of us have discovered there are no easy solutions to this 
problem, and that consumers' desires for physician choice often run 
counter to the idea of managed care and cost controls. Cost containment 
in the form of premium taxes is an administrative nightmare and even 
more difficult to understand and explain.
  Senator Packwood has spent days trying to figure out the cost 
containment provisions in the Mitchell bill for us, and he still cannot 
understand them to his satisfaction.
  In fact, the other night, we heard Senator Packwood state that in the 
Democratic Policy Committee summary of the Mitchell bill, there was no 
section on cost containment. Senator Mitchell's own Policy Committee 
cannot figure it out either.
  I commend Bob Packwood. He is back. He is astute. He is 
knowledgeable. He is as bright as a dollar, and he is ready. Do not 
step into the ring with him unless you have a little more knowledge 
than he does, because he is deeply involved.
  We heard him present his case. We heard Senator Chafee. We heard 
Senator Danforth. We heard Senator Durenberger. We heard Senator 
Kassebaum.
   Health care reform absolutely must save money if it is to be reform 
at all. Do not forget how we got here. Yet the legislation seems 
designed to ensure the fiscal ``train wreck'' we must try to avoid. I 
would refer to the budget-enforcement mechanisms in particular. There 
is no ceiling to limit the expansion of the Federal health care budget, 
and no limit on how much it might grow from year to year.
  The original version even contained a $10 billion cushion above 
deficit-neutrality, meaning that the health care reform plan would not 
only fail to save money, and would permit us to spend larger and large 
amounts of taxpayer dollars, but it would have assuredly added to the 
deficit, even with all of the new taxes collected. I am pleased to 
learn that this loophole seems to be missing in the latest revision of 
the bill.
  One other item. During the course of this, I often hear references to 
other countries: Why do not we do like other countries? And we are the 
only industrialized country on Earth that does not provide for its 
citizens. I hear that every day, several times a day. We are happy to 
do that, if you are willing to bear the cost.
  Do you want to do it like Sweden does, where they suck up 53.2 
percent of revenues to fund all levels of Government? Should we do it 
like Norway where they have 47.1 percent of the revenue that they earn 
going to health care and social programs? Shall we do it like my native 
land in the Netherlands where it is 47 percent, sucking up that much 
revenue to take care of social programs? We can do it. I think perhaps 
he wants to think about it. We are only at 29.8 percent. We can move it 
up to another 10. That is exactly where we will go with this situation. 
And then add long-term care. That is particularly troublesome. It 
cannot be funded.
  Let me give one example of how the cost controls in this legislation 
are insufficient to control the spending that it introduces, by 
returning to the long-term care program. This long-term care program is 
particularly troublesome. I and many others do not believe that this 
benefit comes even close to being fully funded under the Mitchell bill. 
The fully funded program would cost approximately $45 billion in 2004, 
with Federal costs of about $38 billion if the Feds were paying 75 
percent of costs--this program is a State-run program using Federal 
matching funds. The amount provided in the Mitchell bill would pay for 
less than half of those costs in just the year 2004.
  And to think that groups like AARP still demand long-term health care 
regardless of net worth or income. With regard to the AARP, I am 
getting a lot of mail from home saying: The AARP does not speak for me. 
Scratch me off the list. They did not poll the membership out here. And 
I think we are going to watch them begin to decline in influence here. 
The greed will be exposed as we probe through their activities.
  Let me just show you this one. Here is the cost given in the Mitchell 
program. There is a huge discrepancy here in financing. The bottom 
orange line shows what the Mitchell-Clinton bill provides for funding 
from 1998 to 2004. The figure for 2004 is $15.4 billion. The top yellow 
line is the estimated public cost of a fully funded home care and 
community-based benefit. These costs have been modeled by the Lifeplan 
computer modeling and policy group from Brandeis University that has 
been working on the long-term care issue for a number of years. These 
numbers have been determined by taking the number of eligible persons 
defined under the bill times the estimated cost of such a home health 
care benefit. In 2004, the chart shows that the cost of such a benefit 
is estimated to be $44.1 billion.
  Where are we going to get the funds to make up this huge difference 
of almost $30 billion? And this would only be at the early stages of 
this program.
  I do not think we have any idea, I say to my colleagues, about the 
cost of these benefits because no one has figured demographics and the 
aging of the population into the equation. In addition, no one has even 
bothered to take a look at how much home health care program costs are 
rising within the Medicare program. They have increased an average of 
40 percent annually since 1988.
  So one of the most distressing and less than candid situations with 
regard to this bill is the promise to disabled citizens that a long-
term benefit will be available to them when they need it most, and that 
is impossible. It will not take place. It will be yanked away from 
them, or given to them and yanked away.
  The only responsible alternative is to completely review these long-
term care provisions, and rewrite them to achieve their goals more 
modestly and within the bounds of practicality.
  As our national debt rapidly approaches the $5 trillion mark, I think 
most American's agree that we are long past the point at which the 
Federal Government can ``pick up the tab'' for everyone regardless of 
their financial circumstances. Seniors in particular ought to be very 
concerned about the effect the national debt will have on their 
children and grandchildren in the 21st century. Most of them know that 
we have to set priorities and make rational decisions about who should 
qualify for assistance--and how much help they should receive--under 
any new programs that Congress enacts. If their voices are heard above 
the roar of some of the irresponsible senior citizen groups, I am 
confident we can craft a health care plan that is not only accessible 
to those who need this coverage, but affordable and realistic as well.
  I find it offensive that Democrats have taken individual cases and 
tried to portray their proposals as panacea for these people in need. 
The implication is that Democrats alone have a monopoly on sensitivity. 
Further, that only through Democrat legislative proposals can we 
achieve health care reform combined with compassion. Contrary to the 
image which Democrats would like to create, Republicans are sensitive 
and compassionate, too. We also want health care reform, but we do not 
want to further accelerate the national fiscal disaster that truly is 
around the corner even under the existing system. Democrat proposals 
which promise everything, even if they cannot be delivered; which are 
guaranteed to come equipped with huge new Government bureaucracies, and 
which, when we are in dire need of cost containment, would increase 
Government costs exponentially--do not constitute Republican principles 
of health care reform.
  I have listened carefully to the thoughtful views expressed by 
Senators Packwood, Durenberger, Kassebaum, and others. I commend their 
analysis to every American. It will stun and alarm most Americans to 
discover the scope, the expanse, of the new spending in this 
legislation. We ourselves are still being surprised by it, and this is 
why it is our duty to go through this legislation word for word and 
describe it for the American people before passing billions of dollars 
in costs on to them.
  That's not a filibuster, and it's not gridlock. It's called ``doing 
our jobs.'' The employer mandates in this bill are a problem. However, 
we have a responsibility to the American people to explain to them the 
whole spectrum of this bill's other defects. Doing less would be 
irresponsible.
  Finally, let me close my remarks by commending the majority leader 
for giving those of us on this side of the aisle our chance to deliver 
our views. Even as there are those who criticize any inspection of this 
legislation as a form of delay, we know that we will continue to be 
able to voice our concerns, and we will have our chance to amend and to 
correct. We do not expect to prevail on every vote, but we do expect to 
offer our alternatives, of which we have many. So let me close on that 
note. I urge my colleagues to completely study the impact of this 
legislation on Federal spending. I am confident that as they do, there 
will be much less enthusiasm for passing the full cost of this 
legislation on to the beleaguered American public.
  I thank the Chair. I note that my time has expired. I appreciate the 
courtesy.
  I simply say this is about people. It is about cost. It is not about 
case-by-case events. All of those are poignant. It is about how do we 
pay for it. We all are compassionate. We all will be trying hard.
  I thank very much the Chair and the majority leader for the 
accommodation.

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