[Congressional Record Volume 141, Number 144 (Friday, September 15, 1995)]
[Senate]
[Pages S13674-S13676]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 THE MEDICARE PRESERVATION ACT OF 1995

  Mr. KERREY. Mr. President, I have come to the floor to talk, I hope 
for the Presiding Officer's sake, briefly about the proposal--the 
general outline of the proposal--made yesterday by the Republican 
leadership called the Medicare Preservation Act of 1995. The details 
are not yet available. It is a general outline.
  Mr. President, I must say had I given this speech 7 or 8 hours ago, I 
probably would have been a lot hotter than I am right now. I have 
cooled down since I watched the video replay of Speaker Gingrich's 
rather remarkable--and I would argue and observe, distasteful--
representation of the Democratic view of Medicare.
  At one point he said that Democrats are morally bankrupt. That is as 
if saying we ought to approach the American people about the truth, 
with the facts, with the courage and with trust, that they have the 
capacity to take the truth. I agree with that. I believe, in fact, if 
we are going to have the debate about Medicare that leads to 
constructive reform, that saves the system--and, by the way, as 
importantly, slows and fixes the percent of growth of all entitlements 
as a percentage of our budget--then we are going to have to come 
together present facts, tell the truth, and have the courage to do so. 
I do not disagree with Speaker Gingrich's observation in that regard.
  But, as I said, I was somewhat provoked when he said that Democrats 
are morally bankrupt, and that all we are trying to do is frighten 85-
year-olds who are concerned about this program.
  Well, Mr. President, 85-year-olds are quite nervous and concerned 
about what politicians are going to do with their Medicare Program, and 
I think understandably so. But it is not Democrats that are causing 
them to be fearful. They are fearful, I would argue, principally 
because they know something needs to be done, and they are not in the 
main sufficiently well funded personally to be able to cover the costs 
of nursing home care or, for that matter, most of the cost of modern 
health care. And they are nervous. They are fearful. They are no longer 
able to produce and enjoy income, and, as a consequence, they are 
extremely vulnerable to all kinds of statements.
  So, again, I do not disagree with Speaker Gingrich and other 
Republican leaders that were talking yesterday about the need to 
present facts, the need to present the truth, the need to have courage, 
and the need to trust the American people that they can handle the 
truth and the facts presented by politicians.
  But, Mr. President--I want to be clear on this--my criticism of the 
Republican proposal is not that it does too much; I am critical of the 
Republican proposal because it does not do enough.
  Let me emphasis that, Mr. President. I believe that the proposal, the 
general outline of the proposal, because it sees the problem through a 
7-year budget deficit plan--and that is what it is--it sees this 
Medicare problem through the view of the next 7 years. There is a need 
to produce a sufficient amount of savings over the next 7 years, and in 
order to meet the balanced budget targets in the budget resolution, the 
law now requires that be done. There are instructions for the Finance 
Committee to produce legislation that will get that done.
  There is a recommendation that will probably, all in all, in the end, 
be considered in reconciliation, unfortunately. But when you look at 
the problem for the next 7 years, you do not see the full size of the 
problem.
  Indeed, the Medicare Preservation Act of 1995 says that it will 
preserve the system for current beneficiaries, protect it for future 
beneficiaries, and strengthen it through reforms that have worked in 
the private sector.
  It may preserve it for current beneficiaries; it may strengthen it 
through reforms that have worked in the private sector. Both of those 
appear to be in the general outline. But by no measurement, unless you 
consider that the future only includes the next 7 years, does this 
proposal protect it for future beneficiaries. It does not do that. It 
sees this as a 7-year problem. It does not see it as a problem beyond 
that 7 years.
  The problem that we have with entitlements--if anybody doubts that a 
Democrat is willing to propose something that solves this problem, 
former Senator Danforth and I last year, after the conclusion of the 
entitlement commission recommendation, made proposals that would have 
fixed this problem long term, that would have fixed not only the 
Medicare trust funds but would have fixed it so that we do not see 
health care entitlements as well as other entitlements continuing to 
grow and erode our entire Federal budget. Mr. President, that is the 
most important problem.
  I think we are closer to consensus on many more things around here 
than would sometimes meet the eye given the intensity of the political 
rhetoric. One of the things I believe that Democrats and Republicans 
now share, at least in a general sense as to what our policies ought to 
be, is that our policies ought to promote economic growth. We now 
understand that unless we have gains in productivity, unless we have 
economic growth, it is rather difficult for us to do anything.
  We see it in a recession. If you are in a recession, the revenues are 
down; you have to cut your budget; you do not have money for roads; you 
do not have money for schools; you do not have money for health care; 
you do not have money for retirement.
  The source of our revenue, whether it is for retirement or health 
care or any other program that we fund, is the goods and services that 
are manufactured and produced by the American people, 117 million 
people in our economy. If they are productive and they are selling and 
our economy is growing, that is the source of our revenue. It is the 
source of Medicare revenue.
  The distinguished occupant of the chair knows, not only a gifted 
surgeon but designated as a lead Senator I believe for the Republicans 
in coming up with some recommendations, understands that the entire 
source of revenue for part A comes from a payroll tax. We have a tax on 
payroll. We also have income taxes that provide currently about 69 
percent I believe of the total revenue of part B, the physician 
services. In both of those cases, we have to have income. People are 
out there working in the workplace. We tax their wages to generate the 
money for part A, to pay hospital bills, and we tax their income to pay 
about 60 percent, or almost 70 percent--it was 75-- 

[[Page S 13675]]

about 70 percent of the physician payments come from taxes on people's 
income.
  I make this point because it is that income that people produce in 
the private sector which is our source to pay the doctor bills, to pay 
the hospital bills. If we were in a recession, if we were not enjoying 
a recovery right now, if rates of productivity were not up, we would 
not have nearly as much money as we have to pay those entitlement 
obligations for hospitalization and for physician services.
  A very important beginning observation, Mr. President, very 
important, because what is happening in the Federal budget--and, again, 
there is consensus, I believe, amongst Republicans and Democrats. 
Although we may disagree at the margin on some programs as to whether 
or not they are useful or necessary, I think there is general agreement 
that some expenditures on the part of the Federal Government, some 
collecting of revenue that we do of taxpayer revenue and spending that 
we do increases our productive capacity.
  I am 52 years of age and started in business in 1973 officially. I 
made a lot of money as a consequence of my parents having built the 
interstate highway system with cash. It lowered my cost of doing 
business. It enabled me to get products that I otherwise would not have 
been able to get. My customers could get to me easier than others. It 
increased my business. That was an investment. That was a collective 
investment made with revenue we collected at the Federal level. We made 
it at the local level.
  It is not the only one. Many of us believe that investments in 
education, in infrastructure, in sewer, in water, in research, many of 
us believe that there are other investments that we can make, 
expenditures in people for their work out there--we collect the money 
and we spend it--that some of these expenditures do in fact produce 
increases in productivity and growth in our economy, thus providing us 
with the revenue to fund entitlements.
  The year that the current chairman of the Appropriations Committee, 
Senator Hatfield, arrived in the U.S. Senate--and he is one of the best 
Senators that I have had the privilege to meet and to get to know--the 
year that he arrived in the Senate, as you look at the Federal budget, 
70 percent of the budget was voted on and appropriated and 30 percent 
was entitlement and net interest. This year, it is 67 percent 
entitlements and net interest and 33 percent appropriated, voted on and 
authorized.
  At the end of this budget resolution, at the end of the 7-year 
period, we will be down to 25 percent for appropriated accounts and 75 
percent for entitlements and net interest, and when the baby boomers 
start to retire some 6 years after this budget resolution, it drives 
clear off the charts. In approximately 15 years, we will have converted 
the Federal Government into an ATM machine. All we will be doing is 
transferring money. All we will be doing is paying doctors or paying 
hospitals or writing checks to retirees. That is all we will be doing. 
There will be no money left for defense, no money left for the courts, 
no money left for law enforcement.
  Mr. President, it is an unsustainable trend. It is an unsustainable 
trend. And we have to interrupt it, as the Speaker said, with courage 
and with honesty, although I saw some evidence of his unwillingness, I 
think, to hold to a very important standard in this entire debate.
  The Republican proposal solves a 7-year problem, a budget problem for 
the next 7 years. It is going to be very interesting to see what the 
trustees say as far as how many years' additional slack we get as a 
consequence of these changes. Is it going to push the default date or 
the bankruptcy date, or whatever name you want to put on it, from 2002 
back to 2005 or 2006? I guarantee it will not go much beyond 2008.
  Mr. President, as I said, worst of all, the proposal does not say to 
the American people that we have to fix the cost of all entitlements--
and health care is the biggest and most rapidly growing of all of 
them--we have to fix the cost of these entitlement programs so we have 
the resources to be able to do--God willing, if Congress gets the 
courage--the equivalent of the GI bill, the equivalent of the 
interstate highway system, if we are willing to truly make those kinds 
of investments that produce long-term benefits to future generations. 
Today we could not afford to do it, and in the future we are going to 
be able to afford even less.
  Mr. President, this proposal does not go far enough. And I emphasize 
that. I do not want any American--I watched the news today and the 
sound bites, Speaker Gingrich and leader Dole, and then leader Daschle 
and leader Gephardt, and Haley Barbour, on where are the Democrats and 
where are the Republicans. The general perception is being created 
early in the debate that Republicans have a proposal and the Democrats 
are opposed to it.
  Mr. President, I am not opposed to changing Medicare at all. There is 
an urgent need to do so. But I feel very strongly on this issue that 
this proposal does not go as far as we ought to. I will not resist it 
because it cuts too much; I am going to resist it because the focus is 
too narrow of a timeframe.
  Mr. President, we do not have time on our side. The earlier we make 
adjustments on this, the easier it will be to fix the overall costs of 
entitlements and the more likely we will give beneficiaries a time to 
plan.
  I will give you an example. If we can reach agreement that we ought 
to fix the overall cost of entitlements, if we are going to say that to 
the American people, let us say we are going to fix it at 70 percent. 
That is still three points more than it currently is. Let us presume 
that the Democrats and Republicans and Congress can get together and 
say entitlements and net interest should not be more than 70 percent of 
our total interest. That is approximately where Senator Danforth and I 
ended up with our proposal.
  When you get into that, you are talking about the need to phase in a 
change in the eligibility age from 65 to 70, perhaps providing an 
earlier eligibility, as we did to 62, requiring a larger payment for 
it, and allowing people to get insured, not making them wait until they 
are 70 to be eligible, but for full program benefits, if you want to 
solve this long-term problem before the baby boomers start to go out.
  God help us if we wait. I mean, we do not have the productive 
capacity to generate the payroll tax revenue nor the income tax revenue 
to get that done. When the baby-boom generation starts to retire, the 
people working per retiree is going to drop again. It is almost a 25-
percent increase in the number of retirees in a single decade in 
Nebraska while the population in general grows less than 2 percent.
  We have got a tremendous new class of retirees in my--and I do not 
know how old the occupant of the chair is. The occupant of the chair is 
sort of on the other edge of the baby-boom generation. When we retire, 
the people supporting us will say, ``Oh, my gosh, you guys are 
expensive.
 I didn't realize you cost so darn much.'' We are going to say, ``Well, 
we have a COLA on our retirements, health care is more expensive now, 
even in the managed care environment.''

  I heard on C-SPAN today the distinguished occupant of the chair was 
fiddling, I guess, not long ago with a member of the press and had a 
pacemaker that he had invented and was trying to come up with a device 
that was small enough to get into a baby's heart, because that is the 
kind of surgery he does.
  Even in a managed environment, that is going to be expensive. I hope 
you are successful in being able to discover a way to make that smaller 
for those babies that need pacemakers. No matter what you do, if you 
want high quality care, and I believe most Americans want high quality 
health care, even in a managed environment, it is likely to be 
expensive.
  Mr. President, we are going to need people in the work force 
producing higher wages, producing higher output to have the revenue 
that we need to pay for all of that. I daresay, if we do not do more 
than what is in this Medicare Preservation Act of 1995, we are going to 
wish we had.
  I am here on the floor, Mr. President, to say here is one Democrat 
that does not look at the proposal and say you have done too much. This 
is one Democrat that comes to the floor to say we have not done enough.
  I have looked at the general outline and see there are no changes in 
what the beneficiaries have to pay, other 

[[Page S 13676]]

than I suspect 7, 10, 12--there is going to be a higher part B premium 
in this thing and a means test that drops down to $75,000 a year.
  I hope this does not degenerate to a situation where we are attacking 
that kind of proposal and try to score points. It seems to me we have 
to come to the American people and say, ``All right, you made a good 
faith effort to fix this thing inside the budget resolution, but for 
those of us who have looked at this problem for a bit longer period of 
time and a longer period of time out in the future, it behooves us to 
come and say, ``I want to join this battle but not on the outside only 
having to make a criticism.''
  I hope that the Republican majority will try to enlist people like 
myself rather than trying to score this as a Republican victory saying 
the Republicans alone are doing it. I hope you reach out to us. I hope 
leader Dole is either listening or staff is listening to this. Speaker 
Gingrich, I forgive you for your intemperate remarks yesterday. I am 
not going to stand on the floor of the Senate and say I am permanently 
angry, will not sit down and meet with Speaker Gingrich because he said 
I and other Democrats are morally bankrupt. We have a problem to solve. 
Deal us in and bring those of us--and there are others on this floor. I 
know Senator Nunn feels this way, Senator Robb feels this way, Senator 
Lieberman feels this way. There are many others. I am by no means an 
all-inclusive list.
  We know we have a problem and we know the problem is much more than a 
7-year budget problem. We are able to look at the numbers. Let us 
present the American people with the truth. Let us give them the facts 
as the Speaker said we should. Let us have the courage to give them all 
the facts. Otherwise, Mr. President, in very short order, we will not 
have Pell grants at all, we will not have student loans at all, we will 
not have chapter 1, we will not have Head Start--all the sorts of 
things this year we are anguishing because we do not have enough money 
to provide young people with, money they need to go to college--by the 
way, a cost that has gone up even faster than health care. We have 
families in Nebraska taking out second mortgages on their homes so they 
can go to college. We are cutting all that while we are funding larger 
and larger increases for retirement and health care.
  Mr. President, we cannot continue it. I am standing here as a 
Democrat saying I am willing to join with Republicans if you go 
further. Let us not retreat from this proposal. Let us take it further 
to solve this long-term problem, not only so that Medicare is preserved 
for the long term, but so that we preserve our capacity to invest in 
these young people who watch this occasionally who ask us what we are 
going to do for their future.
  Let us make certain at the Federal level we have the capacity when we 
reach agreement, and very often we do, that education gets a job done; 
that there are ways for us to increase productivity; that when we reach 
agreement on what ought to be done, that we have the fiscal capacity to 
do it.
  Unless we take this proposal and make it larger, I fear that all we 
are going to do is spend the next 60 days scoring perhaps some terrific 
and effective political points on who is doing what to whom on 
Medicare, but we will not have done what I consider to be an urgent 
task, and that is fixing this entitlement problem once and for all.
  I thank the distinguished occupant of the chair for his patience. 
Again, I appreciate very much his personal work in health care and his 
political work now in health care. I hope, in fact, that the leadership 
will open the doors a bit so those of us who do care deeply about this 
thing, who are willing to present facts, who are willing to tell the 
truth, who are willing to suck up and use a little bit of our political 
capital and courage are given an opportunity to do so.
  Mr. President, I yield the floor.

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