[Congressional Record Volume 141, Number 149 (Friday, September 22, 1995)]
[Senate]
[Pages S14141-S14144]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                MEDICARE

  Mr. DODD. Mr. President, I want to take a few minutes today if I can, 
and talk about our upcoming proposal on Medicare, which is a subject of 
great interest, and ought to be, in the country. I think it is 
important to place into context this debate.
  Regardless of where one stands on the specifics of these issues as 
they come out, it is important that we all understand that we are 
talking about the single largest transfer of wealth in the history of 
our country with this proposal, some $270 billion that will have to be 
moved from the Medicare Program. We are talking simultaneously about a 
$245 billion tax cut. There is nothing quite like this in the annals of 
this country's history.
  I say that, not to in any way suggest that in and of itself one ought 
to oppose this, but rather to raise what I hope will be the interests 
of the American public as we engage in this discussion, because they 
are the ones who will be affected. Not the Members of this body 
because, frankly, most of us have health care programs and have income 
levels which will basically make us immune from the kind of potential 
tragedies and difficulties that most Americans will face if they lose a 
safety net of health care.
  It is in their interest, and it is certainly a program that has been 
tremendously successful in assisting millions of people over the last 
30 years to avoid the catastrophic problems associated with the 
predictable health problems that people face.
  What disturbs me is the fact that we are going to have almost no 
hearings on this at all. In fact, only 1 day of hearings have been 
scheduled in the entire Congress on an issue that I think is certainly 
as important as any that this body will debate or discuss this year, 
only 1 day of hearings on the single largest transfer of wealth in the 
history of the United States.
  Mr. President, the world looks on this body, and we often refer to it 
ourselves, as the greatest deliberative body in the world. Yet, I say 
with all due respect to those in the majority that to hold only 1 day 
of discussions on legislation that will affect today 37 million direct 
beneficiaries of Medicare, not to mention the families of these 
Medicare recipients and, frankly, 

[[Page S 14142]]
those who will move into the age categories that would allow them to 
receive some Medicare assistance, I find hard to justify, to put it 
mildly.
  We are not talking about an Intelligence Committee issue here. We are 
not even talking about a defense issue in which the secrecy of our 
proceedings has legitimacy. But to come forward with an idea that only 
has 1 day of hearings and will affect many millions of people I find 
very, very disturbing.
  I can only conclude, Mr. President, that some people are deeply 
worried that more people may find out about what we are likely to 
do. And so some think, do it fast, do it quickly, get it over with. 
Hopefully, they will not notice, and we can achieve the kind of results 
that some are seeking to adopt when it comes to this program.

  Mr. President, this plan, as I mentioned at the outset of these 
remarks, will cut Medicare by $270 billion. Let me quickly point out 
that that number is three times what the Health Care Finance 
Administration says is necessary to extend the solvency of Medicare 
until the year 2006--three times, Mr. President.
  I am not sure that the Health Care Finance Administration is 
absolutely correct. They are saying about $89 billion. There are those 
who would tell you that you could do this with $45 billion if you can 
deal with some of the waste and fraud, which CBO and others will not 
score. A GAO study that was done said you could basically achieve the 
savings if we would just make this program run more efficiently. 
Whether you believe the $45 billion or $60 billion or $89 billion, no 
one will tell you--no one--that $270 billion in cuts in the Medicare 
Program is necessary. Yet, that is exactly the plan being put together 
as we sit here. It is not a plan done in the light of day, but done 
with one day of hearings, with a bunch of people writing this gathered 
in rooms where you cannot find them. They are leaking this out bit by 
bit with vagaries and never getting into the details.
  I do not think people ought to stand for that. Whether you agree or 
disagree, it is fundamental that we have a full-blown discussion of 
what we are likely to do here with a plan that is going to affect that 
many millions of people--people who are not in a great position to 
defend themselves.
  Let me share with my colleagues what we are talking about here and 
who these beneficiaries are. The vast majority of our beneficiaries are 
not well-off people. I, for instance, have long supported the idea of 
means testing Medicare. I do not find that to be any great 
revolutionary idea. I am talking about incomes of $75,000 or $150,000.
  I quickly point out, Mr. President, that the savings there are 
relatively modest when you look at the overall amount of cuts that are 
being talked about. Lest anyone thinks that the money could be saved by 
excluding the wealthy, let us take a quick look at the numbers. Ninety-
seven percent of Medicare expenditures go to individuals with incomes 
of $50,000 or less; 97 percent go to people with $50,000 or less. 
Seventy-eight percent of Medicare beneficiaries have an income of less 
than $25,000 a year. The median income for a woman of 65 years of age 
or over is $8,500 a year. In fact, the median income is $17,000. And 
almost 9 million of the 37 million of Medicare recipients have incomes 
of less than $10,000 a year.
  So when we start talking about $270 billion in cuts and premium 
increases, and the like, remember who we are talking about here. We are 
not talking about affluent Americans. We are talking about people who, 
in some cases, are in the most difficult positions, financially, in the 
country. If not just them, we are talking about their families, who 
will have to bear the burden of handling these costs.
  It has been a very successful program. Yes, it has problems and you 
have to treat and work on some of the costs associated with it. But it 
has been a tremendously successful program. If you look here on the 
chart, Mr. President, in 1959, only 46 percent of our seniors have 
health care coverage. That was before Medicare. Since 1965, seniors 
with health care has now risen to 99 percent.
  I do not think we can underestimate the value of that to people, not 
just in terms of their health--as everybody knows, when you get older, 
you will face medical problems--but financially what it means to people 
and their families as well.
  There was significant opposition to this program. This did not go 
through like some of the issues around here. It was debated and voted 
on three different times in 1965 before it became the law of the land. 
And 93 percent of those now in the majority at that time voted against 
this program in 1965. I think most of those people today would agree 
that this has been a very good program, indeed, and it has made a 
substantial difference in people's lives.
  So I think it is in our critical interest that we at least--when you 
are talking about a $270 billion cut in this program over 7 years--
understand what the implications are, what happens--not those who make 
$75,000 for an individual or $125,000 a year for couples--but for the 
woman making $8,500 a year, as so many are, or the 9 million who make 
less than $10,000 a year, or 50 percent of the entire population of 
Medicare recipients who make less than $17,000 a year. Today, they are 
paying about $3,000 in out-of-pocket of expenses. We are looking at a 
proposal--and, again, we do not have the details of all of this yet. 
But according to those who have seen the numbers, we are talking about 
an increase of maybe $2,700.
  I ask unanimous consent to have 5 additional minutes on this. I see 
my colleague from Rhode Island here.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. DODD. Mr. President, we are talking here about people in that 
income category. The estimates are that we could be looking at an 
increase in Medicare out-of-pocket costs of some $2,700. Now, you can 
cut that down on a daily figure, and so forth. But if you are in that 
$17,000 or $20,000 range, putting aside the $8,500, that is a 
tremendous additional cost to people in that particular income 
category.
  Mr. CHAFEE. I wonder if the Senator will yield for a question.
  Mr. DODD. Quickly, if I can. I only have 5 minutes.
  Mr. CHAFEE. I am the only one here. If you want to have more time, as 
far as I am concerned, you can add my question time on. Where did you 
get this figure about a $1,700 increase?
  Mr. DODD. Those are the figures that have been in the House 
proposals.
  Mr. CHAFEE. Let us not talk about the House. We are in the Senate. 
The Senate bill was announced today. The part B premium of 31.5 percent 
is going to stay at 31.5 percent. Is it going to go up with inflation? 
Yes. Thirty-one and a half percent of the cost will remain at 31.5. Is 
it going to stay exactly the same dollar figure as last year or 2 years 
ago? No. But under any administration, Democrat or Republican, it will 
increase.
  Now, the second part is about the deductible. There is no increase in 
the copayments. They remain exactly the same, at the 20 percent. On the 
increase in the deductibles, over the years with inflation, the 
deductibles have gone up. Under this program, they would go from $100 
to $150. That is certainly no $1,700.
  Mr. DODD. I say to my colleague, not $1,700, but $2,700, which in the 
House plan.
  Mr. CHAFEE. Then that is even more inaccurate.
  Mr. DODD. No it is not.
  Mr. CHAFEE. If you want to talk about the persons in the upper 
categories--
  Mr. DODD. I am not the guy you want to ask. The person you want to 
ask the question to is the Speaker of the House and members of the Ways 
and Means Committee, who are putting the plan together. The Senate may 
decide it wants to go to something else. I have not seen the Senate 
proposals. I know what the Speaker and Ways and Means Committee are 
saying.
  Mr. CHAFEE. We happen to be in the Senate, and they announced a plan 
today. We do not have to debate on the floor of the Senate what the 
House plan is. We have a Senate plan. I happen to know what the Senate 
plan is, and it is not $2,700. Now, if you are talking Jack Kent Cooke, 
one of the richest men in America, and if he continues taking the part 
B, yes, he will pay more and he jolly well ought to pay more; 75 
percent of Jack Kent Cooke's medical bills are being paid by the 
taxpayer.

[[Page S 14143]]

  Mr. FORD. Mr. President, this is not a question and answer.
  Mr. CHAFEE. It is not right.
  The PRESIDING OFFICER. The Senator from Connecticut has the floor.
  Mr. FORD. Mr. President, I ask unanimous consent that the Senator 
from Connecticut have another 5 minutes.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. FORD. Will the Senator from Connecticut yield?
  Mr. DODD. Yes.
  Mr. FORD. Mr. President, I am going through the Chair, as we should. 
Will the Senator yield for a question.
  Mr. DODD. I am glad to yield to my friend.
  Mr. FORD. Now, as I understand it, in the plan as we operate it 
today, the premium goes up only based on a COLA. So instead of being 31 
percent, it is only at 28 percent. Therefore, as the COLA is increased, 
the other amount is increased, but it is basically at 28 percent 
instead of 31 percent, as our friend from Rhode Island has indicated.
  Mr. DODD. Mr. President, I say to our colleague that he is absolutely 
correct. That is part of it.
  We are talking about $270 billion in savings, Mr. President. And to 
suggest that somehow you can achieve that number, and not talk about 
the beneficiaries being affected, is exactly the kind of problem we get 
into here. Of course, it is going to cost. What I find even more 
disturbing about this, Mr. President, is the fact that we are looking 
here at a $245 billion tax break occurring simultaneously.
  By the way, this tax break was higher originally. We were talking 
about $260 billion to $270 billion in a tax break earlier. They pared 
it back to $245 billion.
  Is it not coincidental that the size of the Medicare cut and the size 
of the tax break almost match up dollar for dollar?
  Now the tax break has been reduced a bit here, but nonetheless it 
seems quite obvious to this Senator how we pay for that tax break. That 
tax break is paid for, it seems to me, by the cut in Medicare.
  In the cuts, and again watching this plan dribble out, not a single 
penny in the proposals being proposed in the House of Representatives 
actually go to the trust fund. Not a penny of it.
  Here we are talking about this great problem with the trust fund and 
instead of dedicating the resources to the trust fund to put it in 
better shape we talk about dollars going here.
  Mr. CHAFEE. I wonder if the Senator would yield?
  Mr. DODD. I will complete my 5 minutes and my colleague can ask for 5 
minutes to proceed.
  Mr. President, 51.5 percent of the tax break proposed by the 
Republican plan goes to people making over $100,000 a year. Mr. 
President, that is a fact. Cut that any way you want, but that is the 
income level.
  Watch down here in the zero to $30,000 category, they get 4.8 
percent; people making 30,000 to $50,000, 11.6 percent; and it breaks 
down to 16 and 15 percent.
  I am not objecting even to the idea of having some tax proposals. My 
view is to postpone these. I put them aside because I think deficit 
reduction is a completely legitimate issue and we ought to focus on it.
  If you want a deficit reduction, take this idea, put it on the table 
for a couple of years and then look at the Medicare issue for really 
what it is, instead of coming up with a phony number here that 
basically in my view, and as it appears to those who have looked at 
this, satisfies the needs of a tax break proposal.
  That is what this amounts to. There will be squawking, a lot of 
hemming and hawing, but if this were truly a decent and fair plan we 
would have more than 1 day of hearings. We would not try and have a 
stealth program that comes in and all of a sudden is sprung on this 
body.
  I know what will happen. We will have one vote under the 
reconciliation that will be lumped together. We will have little or no 
chance to amend it, change it or offer different ideas, in the single 
largest transfer of wealth in the history of the United States.
  Frankly, Mr. President, I do not think people will stand for it. I 
believe when people know more about this, and they will want to know 
more about it, they will not be satisfied with one day of hearings, 
with an idea of wrapping this all together, minimize the kind of 
political confrontation people will have to deal with here if they are 
going to address this issue.
  As I said at the outset of these remarks, I am more than happy to 
take a look at what needs to be done with Medicare, more than happy. I 
have advocated means testing for more than a decade on this program. I 
will not take a back seat to anyone in that area.
  The suggestion that $270 billion is necessary here when none of the 
resources go to that trust fund I find less than genuine when it comes 
to trying to deal with the issue of the Nation's health care needs.
  Let me go back and remind our colleagues here. Consider where we 
were, and consider the history of this. In 1959 only 46 percent, less 
than half the population of seniors had health care. Today we are 
getting almost universal coverage.
  There are those that have been hostile to this program from day one 
and have disagreed with it. I am not opposed to the idea of coming up 
with ways in which people can participate in their own financial and 
health security down the road. I think that is a good idea. That is not 
going to work for everyone.
  To say you will have that as a substitute for Medicare is to be 
terribly naive, in my view, about what needs to be done to satisfy the 
needs of people in this category.
  While we are talking about the 37 million who are the Medicare 
recipients, remember it is their children and their families who also 
are affected. There are people out there today who are trying to meet 
the needs of two generations, their own children as well as their 
parents, so this burden just does not fall on those in the category of 
retirement age. These people are trying to plan for educational needs, 
their children, their mortgages, rent, and food. While some say $1,700 
or $2,700 does not amount to much--$21 a week, that is part of the 
problem here. We are so out of touch in terms of the economic realities 
of what millions of Americans face every day, we do not think it is 
much anymore. Go home and listen to your people. They will tell you 
that it is. They ought to at least be given the common decency of a 
review of what is about to be done to them, more than one day of 
hearings. I hope that will be the case.
  I yield the floor.
  Mr. CHAFEE. Mr. President, I want to correct a few inaccuracies that 
were in the statement of the distinguished Senator from Connecticut. I 
am confident that these were unintentional, but they were delivered 
with considerable vigor so I think I might take this opportunity to 
rebut then.
  The Senator from Connecticut said not one penny from these savings in 
Medicare go into the trust fund. That just plain is not so.
  Every single nickel, every single penny saved under the part A, the 
reduction in the payments to the hospitals, the reductions in the 
payments to the other providers, the providers dealing with the 
hospitals' side, all go into what is known as the hospital insurance 
fund, or part A.
  Every single penny--I am not sure of the exact amount in billions of 
dollars, but of the total $270 billion, a very substantial, I will not 
say half, but I suspect close to half will go into that part A hospital 
insurance trust fund.
  When the Senator says with all the vigor he can muster that none of 
that is going into the trust fund, that just plain is not right.
  Now, second, the Senator says 51 percent of the tax cuts are going to 
the rich. That is a very interesting statement because in the Senate we 
do not have any idea what the tax cuts are going to be.
  All that we have done in the Senate is to say that up to $240 billion 
of tax cuts can take place. That means there could be zero, there could 
be $1 or there could be $240 billion. No one has said so far--the 
Finance Committee that deals with the tax cuts has not come up with any 
proposals dealing with what the tax cuts will be.
  Some say they want $500 credit for every child. Now, if that is 
adopted, no one is suggesting that 51 percent of that is going to the 
rich people. Every taxpayer, even taxpayers who pay $501 will get a 
$500 credit, so they pay $1 in taxes. 

[[Page S 14144]]

  Indeed, the person who pays less than that, I presume would not only 
get a refund but get some kind of an income tax credit in addition to 
the regular $500 credit.
  Who knows what we will adopt? Knowing how legislative bodies are, I 
suspect that we will go right up to the $240 billion. No one has 
decided that yet. No meetings of the Finance Committee have taken place 
in connection with taxes. No decisions have been made. It is total 
nonsense to say that 51 percent of the tax cut is going to the rich 
under any Senate plan.

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