[Congressional Record Volume 141, Number 138 (Thursday, September 7, 1995)]
[House]
[Pages H8665-H8666]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   REHABILITATION NEEDED, NOT SURGERY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New Jersey [Mr. Pallone] is recognized for 5 minutes.
  Mr. PALLONE. Mr. Speaker, during the month of August, I met with many 
senior citizens who are very concerned about the proposed Republican 
Medicare reductions of $270 billion. I am even more concerned that 
there are no specifics as to how the cuts will be made. The Republicans 
so far have refused to give us any details concerning their plan.
  The public has the right to examine the Republican plan. Instead the 
Republicans are opting for the stealth attack approach of slipping cuts 
right by seniors before their plans can be analyzed.
  Many Republicans are claiming that Medicare is going broke, which is 
simply not true. Medicare is more solvent today than it has been in a 
long time. The trustees report show that definitively.
  As a matter of fact the trustees have spoken out against the 
Republican plans in a commentary entitled, ``Rehabilitation Needed, Not 
Surgery,'' 

[[Page H 8666]]
which was printed in the Los Angeles Times. I would like to submit this 
commentary for the Record.
  The article outlines the fact that the Republicans did not stumble 
onto something new regarding the question of Medicare solvency.
  In the last 20 years, the trustees reported several times that 
Medicare would run out of money in 4 years or 6 years. The recent 
trustee report extends solvency to an all-time high of 7 years, 1 more 
year than was the case last year. I wonder why Republicans did not 
raise this issue last year, when health care reform--to increase health 
coverage--was the biggest issue of the year?
  Throughout the last 20 years questions of solvency have been raised 
and Congress worked together making the minor adjustments necessary to 
maintain Medicare's funding. Congress can work together again, if 
Republicans will drop their $270 billion Medicare cut.
  The trustees go on to say that the Republican's Medicare cuts are 
excessive, citing that ``It is not necessary to cut benefits to ensure 
the fund's solvency.'' I believe the true motivation behind the largest 
Medicare cuts in history is giving the better-off a big tax cut. 
Republicans first propose taking $270 billion out of Medicare and then 
call it reform.
  Seniors in New Jersey realize what is really happening. They are 
being asked to come up with more than $1,000 a year in out-of-pocket 
costs in order to finance a tax cut largely for the wealthy. It is 
simply not fair and those of us who care about seniors must fight to 
kill this terrible Republican proposal.
  The article referred to is as follows:

              [From the Los Angeles Times, Aug. 28, 1995]

                   Rehabilitation Needed, Not Surgery

 (By Robert E. Rubin, Donna E. Shalala, Robert B. Reich and Shirley S. 
                                Chater)

       Our nation is involved in a serious examination of the 
     status and future of Medicare. Congressional Republicans have 
     called for $270 billion in cuts over the next seven years, 
     claiming that Medicare is facing a sudden and unprecedented 
     financial crisis that President Clinton has not dealt with, 
     and that all of the majority's cuts are necessary to avert 
     it.
       While there is a need to address the financial stability of 
     Medicare, the congressional majority's claims are simply 
     mistaken. As trustees of the Part A Medicare Trust Fund, 
     which is the subject of the current debate, and authors of an 
     annual report that regrettably has been used to distort the 
     facts, we would like to set the record straight.
       Concerns about the solvency of the Medicare Part A Trust 
     Fund are not new. The solvency of the trust fund is of utmost 
     concern to us all. Each year, the Medicare trustees undertake 
     an examination to determine its short-term and long-term 
     financial health. The most recent report notes that the trust 
     fund is expected to run dry by 2002. While everyone agrees 
     that we must take action to make sure that the fund has 
     adequate resources, the claim that it is in a sudden crisis 
     is unfounded.
       The Medicare trustees have nine times warned that the trust 
     fund would be insolvent within seven years. On each of those 
     occasions, the sitting President and members of Congress from 
     both political parties took appropriate action to strengthen 
     the fund.
       Far from being a sudden crisis, the situation has improved 
     over the past few years. When President Clinton took office 
     in 1993, the Medicare trustees predicted the fund would be 
     exhausted in six years. The President offered a package of 
     reforms to push back that date by three years and the 
     Democrats in Congress passed the plan. In 1994, the President 
     proposed a health reform plan that would have strengthened 
     the fund for an additional five years.
       So what has caused some members of Congress to become 
     concerned about the fund? Certainly not the facts in this 
     year's trustees report that these members continually cite. 
     The report found that predictions about the solvency of the 
     fund had improved by a year. The only thing that has really 
     changed is the political needs of those who are hoping to use 
     major Medicare cuts for other purposes.
       President Clinton has presented a plan to extend the fund's 
     life. Remarkably, some in Congress have said that the 
     President has no plan to address the Medicare Trust Fund 
     issue. But he most certainly does. Under the President's 
     balanced budget plan, payments from the trust fund would be 
     reduced by $89 billion over the next seven years to ensure 
     that Medicare benefits would be covered through October 
     2006--11 years from now.
       The congressional majority's Medicare cuts are excessive; 
     it is not necessary to cut benefits to ensure the fund's 
     solvency. The congressional majority says that all of its 
     proposed $270 billion in Medicare cuts over seven years are 
     necessary. Certainly, some of those savings would help shore 
     up the fund, just as in the President's plan. But a 
     substantial part of the cuts the Republicans seek--at least 
     $100 billion--would seriously hurt senior citizens without 
     contributing one penny to the fund. None of those savings 
     (taken out of what is called Medicare Part B, which basically 
     covers visits to the doctor) would go to the Part A Trust 
     Fund (which mostly covers hospital stays). As a result, those 
     cuts would not extend the life of the trust fund by one day.
       And those Part B cuts would come out of the pockets of 
     Medicare beneficiaries, who might have to pay an average of 
     $1,650 per person or $3,300 per couple more over seven years 
     in premiums alone. Total out-of-pocket costs could increase 
     by an average of $2,825 per person of $5,650 per couple over 
     seven years. According to a new study by the Department of 
     Health and Human Services, these increases would effectively 
     push at least half a million senior citizens into poverty and 
     dramatically increase the health care burden on all older and 
     disabled Americans and their families. The President's plan, 
     by contrast, protects Medicare beneficiaries from any new 
     cost increases.
       As Medicare trustees, we are responsible for making sure 
     that the program continues to be there for our parents and 
     grandparents as well as for our children and grandchildren. 
     The President's balanced budget plan shows that we can 
     address the short-term problems without taking thousands of 
     dollars out of peoples' pockets; that would give us a chance 
     to work on a long-term plan to preserve Medicare's financial 
     health as the baby boom generation ages. By doing that, we 
     can preserve the Medicare Trust Fund without losing the trust 
     of older Americans.
     

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