[Congressional Record Volume 141, Number 157 (Wednesday, October 11, 1995)]
[House]
[Pages H9867-H9874]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            SAVING MEDICARE

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentlewoman from California [Mrs. Seastrand] is 
recognized for 60 minutes as the designee of the majority leader.
  Mrs. SEASTRAND. Mr. Speaker, there is good news today. We heard one 
of the earlier gentlemen tell us that the Committee on Ways and Means 
voted out our Medicare Preservation Act bill. We are on our way to 
strengthening and protecting and preserving Medicare.
  Besides that good news, one of my colleagues, Mr. Sam Johnson, 
celebrated his 65th birthday today. I know the members of the Committee 
on Ways and Means congratulated him, and he has come of age now. He is 
old enough to join millions of other Americans who are on Medicare. I 
just know that he has not been scared off by many of the criticisms, 
the things we read about in the headlines and newspaper and we see on 
television, about attempts that are planned, that the Medicare 
Preservation Act is heartless and uncaring and so on. The Committee on 
Ways and Means presented a check for $4,800 to Mr. Johnson. I know he 
will not be cashing it tomorrow. The point is to let not only he know, 
but other senior citizens in America today who are also celebrating 
their birthday with Mr. Johnson today, that Medicare is going to be 
there for them.
  That is how much we are going to spend this year alone in Medicare, 
$4,800. The good news is in our plan we are going to increase that over 
the next 7 years to $6,700. Only can you be in Washington, DC, and so 
often hear about how we are cutting Medicare, when this is actually an 
increase.
  So what I say to my colleague, Mr. Johnson, is happy birthday, and I 
know that, as I said, we are on our way to preserving and protecting 
Medicare.
  I am going to enter into a conversation with my friend, the gentleman 
from Minnesota [Mr. Gutknecht]. The gentleman also, as I am, is one of 
those reform-minded freshmen. We came to this House with such hopes and 
dreams, and we are just plugging away, are we not?
  But it is interesting. I was here a few months, and on my desk I 
found a report in April from the Social Security and Medicare Board of 
Trustees. I read it, and it said, ``If you, Congress,'' now that is me, 
I cannot pass the buck, that is me, ``if you do not do something about 
this, we are going to see Medicare go broke.''
  It is going bankrupt now. I would just like to tell people that I am 
54 years old, so I have an interest in this program continuing. My mom 
is 83. She is probably not going to appreciate my saying that to 
everyone in the world today, but she is soon to be 84, come this 
December. She is a Medicare recipient, and she has those concerns, like 
many of her friends and many of my friends who are at that age and are 
concerned about costs of health care and such.
  So I remember hearing from my mom when she heard the news on 
television and reading the headlines, ``What are you going to do about 
this?'' So I have been talking to her.
  The point I wanted to make about being one of those freshmen, my 
point is to come here and not be part of the problem that we seem to 
have had for so many years. Obviously many voters also consider there 
was gridlock in this House. They wanted to see something done. ``Do it, 
do it now.'' So I have been doing my best, as well as my colleague, to 
see to it that we do have some solutions to the problems.
  I think my concern over the last several months, whether I go to my 
town hall meetings or my senior conferences, or as I visited health 
care facilities, nursing homes convalescent homes, from one end of my 
district, which incidentally, includes the central coast of California, 
from Santa Barbara to Paso Robles in the north, it is a very large 
area, and people are concerned that we are going to do something about 
it.
  So I am hoping as we continue this conversation, we saw the first 
step taken today to move this legislation through the Committee on Ways 
and Means, and I hope we can all come together to solve the problem, to 
preserve and protect it, and put aside all of the rhetoric that we 
hear, and to assure my 83-year-old mom and her friends and all those 
people I saw in those health care facilities that are utilizing 
Medicare right now, that we are going to be there for them and to take 
the rhetoric out of the situation.
  So I would like to ask the gentleman from Minnesota [Mr. Gutknecht] 
if that is what he is hearing from his people? I think we see people, 
wondering if we are going to do it, ``are they really going to reform 
Medicare?'' Some of the other situations, are we going to balance that 
budget in 7 years, are we going to reform welfare, are we going to give 
tax relief to our middle-income families?
  That is what I am hearing. And they are looking to us, and I am 
anxious to get on with the situation of passing the legislation and 
having the discussion with the American people.
  Mr. GUTKNECHT. Mr. Speaker, I thank the gentlewoman from California. 
I would just like to say first and foremost, not only are we both 
freshmen, but I think we both have parents, and parents are both on the 
Medicare system. They are concerned. And I am concerned as a good son. 
I want to make certain that my parents get the health care that they 
need.
  But I think also, I come at this also not only as a freshman and as 
someone who has parents who are on the Medicare system, but I come at 
this also as 

[[Page H 9868]]
a parent of teenagers. So there is a generational responsibility I 
think we have, not only to our parents, but I think we have a 
responsibility, and a special responsibility, to our kids. For too long 
here in Washington, politics as usual was ``Well, we will try to patch 
it over and get past the next election, and then we will worry about it 
and really solve the problem.''
  I think the message of last November was that ``politics as usual'' 
just is not getting the job done. They wanted people to come to 
Washington and really look at the problem; take off the partisan 
glasses, if you will, and look at the problem, and try to come up with 
solutions that will really solve it long-term, so that we save the 
Medicare system, for example. Not just to get through the next 
election, but so that we save the Medicare system for the next 
generation.
  I think that is the charge we were given, and I think up to this 
point, we have responded appropriately.
  Let me just read, if I could, a couple of quotes from that report 
that you alluded to earlier. This has been said before, but I do not 
think it can be said too often. The trustees said, ``Under all sets of 
assumptions, the trust fund is projected to become exhausted even 
before the major demographic shift begins.''
  What that means is the program is going to go bankrupt even before 
the baby boomers start to retire. That was what they said on page 3.
  They went on to say on page 13, ``The fact that exhaustion would 
occur under a broad range of future economic conditions and is expected 
to occur in the relatively near future indicates the urgency of 
addressing the HI fund's financial imbalance.''
  In other words, we have got a serious problem and we need to get busy 
now about solving it. And the longer Congress waits, the more they sit 
and twiddle their thumbs and play politics as usual, the worse the 
problem will become.
  To their credit, I think our leadership here in the House and in the 
Senate have had something like 36 different hearings, talking about the 
problem and how we got to where we are. In my district, for example, I 
have had 33 town hall meetings. I do not know about in your district.
  Mrs. SEASTRAND. I have had 30 meetings, a senior citizen conference, 
and one big Medicare briefing at a hospital that brought in 400 people. 
So we have all been out in the hinterlands talking to our constituents.
  I do not know about you, but I find many people are in the state of 
denial. It was interesting, just other day an editorial in one of my 
local papers suggested ``Let's just raise taxes and take care of the 
situation. Why are we worried about this and concerning our seniors and 
everyone else?''
  I would just like to remind people, and I can tell you, I am going to 
be putting in a letter to the editor in rebuttal to that editorial, 
that that has been done before. Not too long ago we raised taxes. We 
can raise taxes until we are blue in the face. Yet the system is 
broken. It needs to be fixed.
  I think this is the important point that we need to get to, the 
message to our seniors. I do not know about the gentleman, but I found 
the more people are in opposition to the situation, they are not really 
understanding what our program is. I think as we talk to people more 
and more about our program, they seem to say ``Well, wait a minute. 
That isn't what I am reading in the headlines of the newspaper.''
  I think as we educate people to the situation of what our plan means, 
Medicare Plus, that we want to give choices, we are going to give 
increases, I think we are going to take the fears out of our moms and 
dads. And the gentleman mentioned he has teenagers. I have a 23 and a 
25 year old. They are concerned about what the future means. So it is 
all a matter of education and talking, as we are doing here today, 
reaching out in our communities, at the town hall meetings, Medicare 
policy briefings, visiting the nursing homes, as I said before, and 
trying to get our message out.

                              {time}  1945

  Mr. GUTKNECHT. If I could just join this here, because I really do 
think the gentlewoman has hit on a very important point, and that is 
that long-term I believe the facts are our friends. I think the more 
people get to understand the facts of what we are talking about in 
terms of where we are now and how we got to where we are now, and the 
reforms that we are talking about, I think the more people understand 
the facts of the situation, and I have found in my town meetings where 
people begin to understand the direction that we are going, we have 
found less and less resistance and people begin to appreciate it.
  When we talk, for example, about what has happened back in Minnesota, 
where on the public sector side when you are talking about Medicare or 
Medicaid or medical assistance, we have been seeing, and last year I 
think we saw in the State of Minnesota about a 10.4 percent inflation 
rate when you are talking about the public sector side on Medicare and 
Medicaid and medical assistance. The inflation rate on that side of the 
equation has been about 10.4 percent. On the private sector side, where 
they have used managed care and competitive forces and created markets, 
it has been running 1.1 percent.
  Mrs. SEASTRAND. Innovative ideas.
  Mr. GUTKNECHT. We have seen inflation rates running 1.1 percent. It 
does not take a Fulbright scholar or a genius to figure out why can we 
not steal some of those ideas that are working so well in the private 
sector to control cost, and still provide people with the health care 
they need and want. Why can we not steal those ideas and apply them to 
Medicare and Medicaid?
  We have been joined by our colleague, the gentleman from Georgia [Mr. 
Kingston]. I wonder if he would like to join us in this colloquy.
  Mr. KINGSTON. I would love to. I think that I am touching bases on 
what the gentleman is saying. When we are increasing the spending per 
recipient from $4,800 to $6,700, we are clearly not cutting. But what 
we are doing is ending ``politics as usual.''
  I am honored to be on the floor with the two freshmen Members, who 
have so much energy and vibrance and have brought so much reform to 
this body. But the one message of the freshman class has been this is 
not politics as usual. They are going to be realistic and they will 
address the trustees' report by the Clinton administration that says 
Medicare is going to be bankrupt in seven years.

  In doing this, the freshman class, along with the leadership, has 
worked for a long-term practical solution, a solution that offers 
choice of physicians, that offers simplified language.
  I heard you speaking earlier about grandma and so forth. I used to 
sell commercial insurance. I can say that one of the biggest problems 
people have with insurance, Medicare and so forth, is they cannot 
understand that stuff. To move towards simplified language and a clear 
choice of doctors, to move towards the clear choice of the different 
plans, if we want to get into a health maintenance organization, if we 
want to keep traditional Medicare, if we want to keep an insured 
private sector type plan, to have those options, I believe, is what our 
seniors want. But the long-term solution, to put Medicare on a solid 
basis once again, is the key to guaranteeing that it will survive.
  Mrs. SEASTRAND. Mr. Speaker, it is interesting. If we do not reform 
Medicare, payroll taxes will have to be doubled by the year 2020 to 
avoid bankruptcy. I know on the central coast of California, basically 
our economic basis is built on small businesses. This will just be 
devastating to them. They are having troubles now with regulations, 
taxes and such, and if we follow what that editorial said in my local 
paper of ``just raise taxes,'' this is going to be a burden on our 
small businessmen and such.
  It is interesting that we have talked earlier about misinformation 
out there, what is in the headlines and newspapers, the ads, and so on. 
It was interesting because, especially last week, there was a real 
attempt nationwide to have advertising on television. I know many of my 
colleagues call it MediScare.
  Here we are, we are talking about our plan, we have options for 
people, choices. We are going to increase the dollars for spending over 
the next seven years and we are offering the choices, as I said, and we 
will talk more about that later, about the kind 

[[Page H 9869]]
of options they are going to have, yet it was interesting to see the 
campaign.
  What was interesting to me was to see that many of these 
organizations that were paying for the ``attack ads,'' as I call them, 
to scare our seniors, they were paid with our own Federal tax dollars. 
Groups that file their IRS forms, and we find out that they receive 
grants from the Federal Government. Taxpayers out there, those small 
businessmen and women I talked about, that if we do not reform 
Medicare, here they are through the back door giving these 
organizations dollars to go in a back door with advertising condemning 
a program and using MediScare. They are saying that seniors will not 
have choices. They said we are cutting Medicare.
  So I think, again, as a freshman who wants to do something about it, 
people are tired of this, and once we get beyond the scaring, and 
talking to people and educating them as to what our plan is, people 
will be with us, our seniors and such.
  Mr. KINGSTON. If the gentlewoman would yield, one of the things that 
the Medicare reform plan does do is crack down on fraud and abuse, 
seriously attacking it, even to the extent that would allow seniors to 
have a financial incentive for reporting fraud and abuse.
  What I hear at my town meetings, and I am sure others have as well, 
is that people are going to the hospital for one thing and then getting 
bills for services that they never even came close to receiving. 
Frequently it is picked up by an auditor, but often people say, ``Don't 
worry about it. Medicare is paying for it.'' Yet that is right out of 
your pocket.

  The gentlewoman had mentioned some of these taxpayer-funded groups 
fighting Medicare reform, fighting for the status quo, fighting for a 
program that will go bankrupt in 7 years. I believe that is an example 
of the waste and abuse of our system. If they are going to use their 
money, their Federal grant money for political purposes, and, as you 
know, there are 40,000 organizations that receive over $39 billion a 
year in grants and funding from the Federal Government without even 
opening their books, if they are going to do that, then they should, I 
think, certainly participate in it by opening up their books for public 
inspection, because they are wasting it.
  Ms. PELOSI. If the gentlewoman would yield, just on that point, 
because obviously we have differing views on your version of the story 
in terms of Medicare. Is the gentleman stating that there are people 
out there using taxpayer dollars that they receive from grants for 
purposes other than what those grants were designated for?
  Mr. KINGSTON. Well, I believe the gentlewoman knows the situation of 
one group.
  Ms. PELOSI. I know that that is against the law.
  Mr. KINGSTON. Mr. Speaker, there is one group that received 97 
percent of its budget from Federal taxpayers and spent $405,000 
financing candidates for Congress.
  Ms. PELOSI. Mr. Speaker, Is the gentleman saying they are using 
taxpayer dollars to do that?
  Mr. KINGSTON. Ninety-seven percent.
  Ms. PELOSI. No, no, are you saying they used taxpayer dollars to do 
that?
  Mr. KINGSTON. Ninety-seven percent of their budget comes from the 
taxpayer, and they turned around and spent $405,000 on PAC 
contributions to political candidates. So I would say that if it was 
the case that not just the letter but the spirit of the law of not 
using tax dollars for political purposes, if that law was being 
followed, then we would not have that problem. What I would also wonder 
is that since it is already illegal for groups to use tax dollars for 
political purposes, I am confused why we do not have bipartisan support 
for the Istook amendment.
  Mr. GUTKNECHT. Mr. Speaker, I want to join in on this particular 
discussion. We do not know, as a matter of fact, whether or not any 
Federal laws have been violated and I would give the administration the 
benefit of the doubt. But if in fact, the facts that we do know to be 
true, that they did in fact give over $400,000 to political candidates, 
if in fact their tax returns were correct, which we have now seen and 
they have received over 96 percent of their funding from Federal 
taxpayers, then in fact I think, yes, they probably were in violation 
of Federal law. They should be investigated. There ought to be some 
prosecution of those people.
  That is the kind of thing that either the law is not clear enough, 
which is why the Istook amendment is here to try to clarify that, or 
the enforcement is lax. But, clearly, what the taxpayers do not want to 
have to do is to watch groups receiving large amounts of Federal tax 
money turning around and using that money either to directly lobby the 
United States Congress or to otherwise try to affect events, buying 
advertising to affect what is happening in the public arena. All we do 
know is that they received a huge amount of Federal money and they are 
in fact actively out there lobbying, and they have actually set up a 
PAC and contributed over $400,000 to Congressional candidates.

  Ms. PELOSI. Mr. Speaker, the gentleman from Georgia knows I regard 
him as a gentleman, and just hearing him say that these people may be 
in violation of the law because they receive X amount of dollars and 
they give out X amount of dollars, I think we want the Record to be 
clear that he is not saying that they are in violation of the law, 
because we all know that anyone who gets grant money from the Federal 
Government cannot use one penny of that money for lobbying the Federal 
Government or for any PAC contributions.
  If the gentleman is saying that anyone who gets a grant from the 
Federal Government should not use other money to lobby the government 
or other money to make PAC contributions, then the gentleman would 
hopefully apply that to defense contractors and others who receive huge 
amounts of money from the Federal Government.
  Mr. KINGSTON. As the gentlewoman from California knows, as a 
distinguished and a very good member of the Committee on Appropriations 
knows, so often as members of that committee we get lobbied by people 
who have, in fact, come to Washington for the purpose of lobbying for 
more money and, quite often, on taxpayer dollars in the name of a 
conference.
  So I would say that there is plenty of murky water in there as we try 
to verify this. Perhaps some of the wording in the Istook amendment is 
not perfect. However, certainly what the Istook amendment is trying to 
accomplish is something that we all need to deal with as we get 
lobbied, particularly members of the Committee on Appropriations, by 
governmental and quasi-governmental groups.
  I also wanted to point out to the gentlewoman, I have offered an 
amendment that exempts what I hope would be small-fry groups; for 
example, historical associations, small art museums, symphony groups 
and theater groups, who spend actually less than $25,000 a year on 
government-related lobbying or information campaigns, as the case may 
be, however you want to call it, because I need the input from my 
homeless shelter and I need the input from my historical association, 
and so forth. But I know that their members do not want to think of 
them spending over $25,000 a year on Washington quasi-lobbying 
conferences and that sort of thing.
  I believe the amendment that I have offered in the Subcommittee on 
Treasury-Postal Subcommittee on Treasury-Postal conference committee is 
a step to help strengthen that, and I hope because of that we can get 
some bipartisan support.
  Mrs. SEASTRAND. Mr. Speaker, I think this is an issue that will be 
discussed more and more on the floor of this House, and it is 
interesting, I have here a report of some six or seven organizations 
that receive nearly $80 million in Federal funding between July 1993 
and June 1994. The question is are they using this for their operating 
expenses or are they using it for lobbying.
  I understand what the gentlewoman from California is saying, but I 
will tell my colleagues, the taxpayers that are in my central coast of 
California look at this, scratch their head and say what is wrong here, 
because it is coming out of a pocket and whether it is used and legal 
or not, they want to see this type of thing stopped. When they see an 
organization getting 96 percent of their entire budget from the Federal 
Government and still turning around 

[[Page H 9870]]
and lobbying against reforms, and so on, they are asking questions.
  Mr. Speaker, the gentleman from Minnesota had a few comments to make.
  Mr. GUTKNECHT. I want to get back and talk about Medicare, but in 
terms of this one particular organization it is hard, I think, it is a 
long stretch of the imagination to say that an organization can receive 
less than 4 percent of its gross revenues from nongovernment sources 
and not be almost an arm of the Federal Government.

                              {time}  2000

  And then to be actively involved in the activities that at least we 
believe and have been alleged that they have been involved with, I 
think raises serious questions. As I say, I am willing to give the 
Attorney General the benefit of the doubt. I assume that they are 
investigating. We believes that they should investigate.
  I agree with you, if that is true, it is illegal and it should be 
stopped. But it clearly is not clear in terms of the law today, and we 
want to see it stopped. I think all Americans want to see it stopped, 
because I think it is a heresy to think that taxpayers' dollars can be 
used to lobby for more taxpayers' dollars. And particularly when some 
of the ideas that are being brought forward are at least in the view of 
many of us far from honest. They are not bound by the facts, at least 
as we see them and as most people would see them.
  Mrs. SEASTRAND. That is where I was coming from, the idea of talking 
about trying to educate our American people about our plan, and then we 
see these ads in and attacks on radio, television and such. and we kind 
of got sidetracked over there.
  I think, overall, as I said, as being freshman reformers, we want to 
come here and see that it is not business as usual. We want to roll up 
our sleeves. We want to fix it. We want to fix the problems. And these 
ads do not help in a dialog when you are actually saying that we are 
cutting Medicare, there are not going to be choices, that we are going 
to do all these horrendous things. As I was saying before, once our 
people understand what the program is, it is interesting, you have 
mentioned your town hall meetings, where people come in and talk about 
the fraud, waste, and abuse. I do not know if you gentlemen have 
experienced this, but some will bring their bill from the hospital, and 
it is like a phone book. They will actually sit down or hold it up and 
show all the things that were wrong, the $2,500 that was charged for 
something that was just an obscene charge.
  Our seniors are very concerned about this. But again, once we sit 
down and talk at our town hall meetings, present the case to them, they 
say, your plan is honest. It is responsible. It is a long-term 
solution. It is just not a Band-Aid approach.
  Mr. KINGSTON. Mr. Speaker, on the description and the adjectives, I 
have here a September 15 editorial from the Washington Post which, if 
anything, is not exactly a fan of the Republican Party and the 
leadership. Yet they are saying in here that Republicans have a plan. 
It is credible. It is inventive. It addresses a genuine problem that is 
going to get worse. And this is a pretty good editorial, particularly 
coming from a group that is traditionally very critical of anything 
that the majority party has done.
  Again, getting back to what you are saying, your freshman class has 
led the way, clear thinking, responsibility, making things accountable, 
cracking down on fraud, maintaining choice of position, simplified 
language. That is why groups like the Washington Post, who even if it 
was begrudgingly, will say, Republicans have a credible plan and they 
are addressing a genuine problem.
  Mrs. SEASTRAND. I have additional editorials here, on and on, the 
Washington Post, Columbus Dispatch, the Atlanta Journal Constitution, 
all of these are in September, the Providence Journal Bulletin, the 
Cincinnati Enquirer, the Star Tribune, the Dallas Morning News, Seattle 
Times, on and on, same type of situation, saying that this is a plan 
that is worthy to be looked at. It is sensible, responsible. And I am 
encouraged by reading these editorials, because sometimes, again, when 
you get caught up with seeing those 30-second type commercials on 
television, things get lost. But we have to stand here and remind 
ourselves that we are being cited in editorials across this Nation that 
our plan is worthy of being looked at.

  Mr. GUTKNECHT. If I could interject, I think facts are our friends. I 
think the more people get to know the facts, and the editorial boards 
around the country, and you recited some of them, most of them are not 
exactly Republican propaganda organs, but the more they have had a 
chance to look at the plan, the more they like it.
  One of the arguments we hear from some of the folks is that seniors 
are going to be forced into managed care, as if that is a terrible 
thing, and that managed care is like the devil you do not know.
  First of all, I think we need to make it very clear, no one is going 
to be forced into any program. And you mentioned your mother. I think 
that a lot of, particularly the more fragile senior citizens, I think 
they are going to stay right where they are.
  Mrs. SEASTRAND. My mom is going to stay right where she is, in a 
traditional Medicare situation.
  Mr. GUTKNECHT. I think they ought to have that choice, and they ought 
to be able to stay right where they are. I think more seniors ought to 
have the options that are available now in the private sector.
  Let me talk a little bit about a study that came out this weekend, 
funded by the Minnesota State Legislature and done by the Minnesota 
Health Data Institute. In that study, they interviewed over 17,000, to 
be exact, they interviewed 17,591 Minnesotans. This is the largest 
study of its kind ever done. And what they really wanted to find out is 
how satisfied the people of the State of Minnesota are with their 
various health plans.
  We in Minnesota have probably a larger penetration of managed care 
programs of various colors, and there is a wide variety of different 
programs that are available in the State of Minnesota, but I think it 
is interesting to note, the HMO's and the managed care programs have 
not penetrated the Medicare population as well as they would like to 
because of some of the regulations that the Health Care Finance Agency 
puts on it.
  But in the study, obviously this print is too small to be read on the 
television screen, but I do want to talk about one particular chart, 
because I think it is very instructive. The argument that seniors 
despise managed care, at least in the State of Minnesota, is simply not 
true. In fact, they asked all Medicare recipients whether or not they 
were satisfied with the health care that they are getting. And when you 
asked just all Medicare recipients, about 77 percent are very or 
extremely satisfied; 17 percent are somewhat satisfied; but about 6 
percent are dissatisfied.
  Now, when you take the group who are members of various managed care 
programs and ask them the same question, their overall satisfaction, 
what you find is about 88 percent of them are very or extremely 
satisfied; only 11 percent are somewhat satisfied; and 1 percent on the 
largest plan that is available in the State of Minnesota, only 1 
percent are dissatisfied or extremely dissatisfied.
  The point here is that the level of satisfaction among members who 
are participating in managed care programs in the State of Minnesota, 
and it goes down for all the various managed care programs, people are 
actually more satisfied with the care they are getting in managed care 
programs than they are with regular fee-for-service Medicare. The 
system does work. And if we allowed more of these programs to develop 
and evolve in a more competitive market-oriented system, I think 
seniors are going to get better care. And they are going to be more 
satisfied with the system that they will have than under the system 
that they have today.

  Mr. KINGSTON. I think the point of the gentleman is that this is but 
an option. It is an option that is good. It is not an option to be 
scared of. But if you do not want it, you can have traditional 
Medicare. If you do not want it, you can have a Medicare account. If 
you do not want it, you can have traditional insurance. Medicare has 
been described as a 1964 Blue Cross-Blue Shield plan. Do you want your 
mama driving a 1964 Chevrolet Biscayne? We had one when I was a kid.

[[Page H 9871]]

  Mrs. SEASTRAND. Maybe that is something we should look at.
  Mr. KINGSTON. I wanted my mama to get all the advantage of the 1990's 
and the technology that is out there in medicine, transportation, and 
safety. And this Medisave account, they actually have one like this in 
Singapore. It has led to lowering the cost of health care yet at the 
same time increasing the quality and keeps choice of physicians.
  Mrs. SEASTRAND. I am glad that you mentioned that. Our seniors have 
an option, because at home just this last weekend, I visited a 
rehabilitation institute. And they are very concerned because of the 
fact that the particular HMO's that they are dealing with are not 
sending patients to the institute for really serious rehabilitation 
care. And so I can understand their concerns.
  But I made the point, in this plan, our plan, if you are not happy 
about what you are in, an HMO or such, you will be able to opt out and 
then choose another plan. And I also would agree with the gentleman 
from Minnesota, once this is up, the free enterprise system, the 
competitive spirit, we are going to see innovative programs. We are 
going to see different--I look at it as a menu, not only that one car 
for everybody, as you were commenting about, that 1964 car, or one 
particular dinner, we are going to open up a menu. We are going to see 
all different kinds of things that we can choose from.
  Mr. KINGSTON. It will be in simplified, easy to understand terms so 
that you do not have to be an accountant. You do not have to be a 
lawyer. You do not have to be an insurance agent to understand it. You 
do not have to have it explained to you.
  Mrs. SEASTRAND. Very simplified. And if I understand, my mom will 
receive her information and she will be able to choose and check off 
where she would like to go, into what kind of a plan. And if she does 
not, for whatever reason, she forgets to check the box of what she 
wants to choose, then she will be put into the traditional Medicare 
Program. So I think this is, as I said, the more our seniors and our 
American people hear about our plan, they are going to get excited 
about it like I am, too.
  Mr. GUTKNECHT. I would like to tell a story that happened in one of 
my town meetings where a truck driver got up. He said, I am going to 
retire here in a couple years and, as I understand it, he said, as soon 
as I retire, I am going to have to leave the insurance plan that I have 
right now. And he had heard some of the numbers. And he said, I think 
actually my insurance plan, which I am very satisfied with, is cheaper 
than what I hear the average cost of Medicare. Why is it that I cannot 
just stay where I am? And I said, that is a very good question.

  And so one of the things we are going to try and do is make it 
possible for people, when they retire, to stay right where they are. If 
they are with the firefighters, perhaps stay with the firefighters 
health care plan. I they are a teacher, they can stay in the teachers' 
plan. But the key to all of this is to create markets and competition, 
because I think the real answer long term to controlling cost is to use 
the marketplace.
  I carry with me a little chip that is actually developed and 
manufactured in my district. Depending on which electronics company you 
are talking to, we believe that this is the most powerful desktop chip 
ever built. It is the power PCAS IBM AS-400 64-byte risk. This will do 
essentially the same work that a computer which would have weighed 
something like 2,000 pounds would have done about 12 years ago.
  Now this will do that same work in, it is like taking the difference 
between a 2,000-pound computer that you would carry on your back and 
now all that computing capacity will be in a wristwatch. And the 
interesting thing is the cost has come down geometrically. Part of the 
reason that that has happened is because market forces and competition 
have forced the free enterprise system to find smarter, better, and 
cheaper ways to produce these.
  This is what is happening in the private sector everyday, whether we 
are talking about automobiles, encyclopedias, or computers. Obviously, 
electronics is perhaps the most exaggerated example of that, but that 
is what is happening.
  What we have got to do is figure out ways to help create markets to 
create competition, so that if your mother or my parents are not 
particularly satisfied with the plan that they have now, they ought to 
have the option to shop around a little bit. It ought to be simple and 
easy to understand English so that they understand what they are 
getting from that particular program.
  Mrs. SEASTRAND. This has not been done in the last 30 years. They 
were all forced to go into one situation. Some of our seniors are 
healthier, and they do not need certain situations as other seniors do. 
In our plan, we are going to give them so many choices so that they can 
choose.
  For instance, my mom will probably stay in the traditional Medicare. 
But if there are some seniors that are just entering the plan, like our 
Sam Johnson, who just turned 65 today, and they are healthy, probably 
the medical savings account would be their best option.
  Mr. KINGSTON. Or the congressional plan, opening up a Federal 
employee type benefit plan for seniors. If it is good enough for the 
U.S. Congress, it is good enough for my mama.
  I want to comment on this computer chip, because I think it is 
interesting that you bring out that high technology, because that was 
done by the private sector. If the government was in charge of the 
development of that computer chip, we would still be on the vacuum 
tube.
  Mrs. SEASTRAND. We are, too.
  Mr. KINGSTON. In fact, the Federal government is the largest 
purchaser of vacuum tubes, I believe, in the world. And no one in 
America has a TV or radio anymore, unless they have it for novelty 
purposes, run by vacuum tubes.
  Mr. GUTKNECHT. When we fly home every weekend, for those of us who 
fly a lot it is a scary thought, maybe I should not warn Americans 
about this, but the air traffic control system relies heavily on vacuum 
tube technology. We are the largest buyer of vacuum tubes in the world. 
We have to buy them from Czechoslovakia. They are no longer made here 
in the United States. They are no longer made in North America. But we 
are the largest buyer.
  The rest of the world, the free enterprise system is using this. And 
this is the equivalent of, I think, something like 9 million, this 
little chip does the work of 9 million vacuum tubes. That is what is 
happening in the private sector. The vacuum tube is what is happening 
in the public sector.
  Mr. KINGSTON. There is no reason, in getting back to my days as a 
commercial insurance agent, I can say this, there is no reason that 
insurance products as an intangible item cannot advance the way a 
tangible computer chip does.
  When I sold workers compensation, product liability, fire insurance, 
I can tell you just in the 10 or 12 years I was in the business, the 
policies changed tremendously and in most cases got more competitive 
and at a lower price brought a better product to the consumer. That is 
what we need to do with Medicare so that our seniors, and the 
gentlewoman from California mentioned about the senior population 
increasing, I believe the population sector that is increasing the most 
in society right now is the individuals over 87 years old.

                              {time}  2015

  We need to have the innovations, the technology and the know-how to 
keep up with them, so that we can continue offering some of the great 
things that the private sector can do and not have this stifling 
bureaucracy that cuts off innovation and deprives the consumer.
  Mrs. SEASTRAND. You had mentioned about fraud, waste and abuse. I 
think there was one thing that I heard in those town hall meetings, the 
concerns of the seniors, was the fact that they recognize fraud, waste, 
and abuse when they are looking at that bill from the hospital or such. 
They are concerned.
  I am pleased that our plan is going to give the chance for our 
seniors to review their bills, and we are going to try and simplify the 
billing process so they can. As you mentioned, they do not need a S&P 
or an attorney to interpret their bills, and if they find $1,000 or in 
excess of $1,000 in fraud, we are going to give an incentive to them.

[[Page H 9872]]

  I think this is the way to go. If there is anything that I know about 
our seniors is they are very thrifty. They are concerned about their 
bills. They do not want to waste dollars and, I might add, they also 
have the time to look over those bills. So we are going to give them 
the tools to be of assistance to us so we can save money.
  Right now the experts tell us we are spending almost $44 billion 
alone a year regarding fraud, waste and abuse. Those are a lot of 
seniors that we can be of assistance to if we were not spending those 
dollars in this area. I am pleased to know our plan is going to be of 
assistance to our seniors to help look for this fraud.
  Mr. GUTKNECHT. I think any of us who have had town meetings, at 
virtually all of them we have heard examples. I remember one example, I 
believe in Lake City, MN, where a senior stood up and said she had been 
billed $232 for a toothbrush.
  I think that is repeated so often and, as the gentleman from Georgia 
[Mr. Kingston] said, many times these are caught but many times they 
are not. I think sometimes there is an attitude with some people that 
it is not our money.
  I think part of this whole thing using medical savings accounts and 
encouraging seniors to review their bills, I think is a way of saying 
we all have to take responsibility. Because I think one of the 
analogies I like about this, or even the national debt and the deficit 
and all the other problems we have in the national budget, is we are 
all in the same boat and you cannot sink half a boat.
  I think we all know now and I think everyone has now finally come to 
the conclusion that the Medicare boat especially is heading for the 
rocks. What we are saying is we have to drastically change course. If 
we stay on, keep doing what we have been doing, the boat is going to 
hit the rocks and we are all going to go down together. It is going to 
hurt seniors, us, our children. It is going to hurt everybody.
  We do not have to make drastic changes to the system but we do have 
to change course. We cannot keep doing what we have been doing. My 
grandmother says it best. She says if you always do what you have 
always done, you will always get what you have always got.
  We need to begin making some of those changes, again taking the best 
ideas from the private sector, giving seniors choices, making markets, 
helping to create markets so that we have competitive forces out there. 
I am actually convinced that we are going to save a lot more than we 
think. As I understand it, the CBO is now scoring our legislation, 
saying they are only estimating that about 25 percent of seniors will 
get involved in some of these various new options we are talking about 
with managed care, medical savings accounts, and the like.

  My sense is long-term you will see much larger percentages than that, 
and I think you will see those inflation rates dropping precipitously 
so that we will save the system. We will simplify it, make it easier 
for consumers and for seniors, and we can save the system not only for 
the seniors who are there today but for the baby boomers when we start 
to retire in 2011.
  Mr. KINGSTON. If the gentleman will yield, there is one thing that 
always goes on in Washington, and we all admit it goes on on the left, 
it goes on on the right, and that is special interest groups that 
surround Members of Congress by telling folks back home:

       The sky is falling. The only way you can prevent it is by 
     sending me a $25 check and writing this postcard to your 
     Member of Congress telling him or her what to do.

It is all this fear.
  One of the things that the other side of the aisle is employing is 
the tax cut for the rich to pay for Medicare. Let us talk about the tax 
cut a minute.
  First of all, statistically when you put more money in the pocket of 
the American consumers, they buy more goods and services, jobs expand, 
more people are working, revenues to the Treasury actually go up. Under 
Ronald Reagan, for example, from 1980 to 1990 revenues after his tax 
cut went from $500 billion to $1 trillion. Unfortunately, spending on a 
bipartisan basis outpaced revenues. However, there was truly a lesson. 
The same thing was done under Kennedy.
  Let us look at this so-called tax increase: $500 per child tax 
credit, and taking care of your mother in your house or your father in 
your house. If I have a senior citizen who is a dependent living in my 
house, I get a tax credit for it.
  You do not hear the Democrats talking about this senior citizens' 
earnings limitation, so that if they are 65 and they want to continue 
to work, they will not be penalized up to $30,000 on their Social 
Security by working. Senior citizens want to continue working after 65. 
We are trying to give them the option of it.
  Increasing the estate tax from $600,000 to $750,000 so that seniors, 
should they choose, can continue to save their money and pass it on to 
their children if they want to.
  And then the capital gains tax cuts. In my district, and I am sure 
every other district in America, you have growth areas. Very typically 
you have a widow who has lived in the house for 30 years and suddenly 
that property, not suddenly but over the 30-year period of time, is 
worth a lot of money. She wants to sell it. She may need to sell it for 
long-term health care, for a retirement home, for a medical emergency, 
or whatever, and yet if she does, she is going to be clobbered at a 28-
percent tax rate for the value of that up to her income bracket.
  What is wrong with cutting that in half for the senior citizen? Yet 
we just hear all this fearmongering that the Rockefellers are going to 
benefit from it. That is not the case. Seventy-five percent of the 
money goes to people with a combined income of $75,000 or less, and our 
senior citizens will benefit tremendously from it.
  Mrs. SEASTRAND. I think if the gentleman from Georgia would come to 
the central coast of California, we have fairs, quite a few fairs 
throughout the district and they are all the time, as I am sure you do 
in Georgia, talking to the men and women, moms and dads, coming up, 
talking about the fact that something has to be done, I can't continue 
in my small business, very concerned, they are looking for some relief. 
They are excited about the prospect of a capital gains tax reduction. 
Seniors are excited when we talk about I want to have you keep more of 
your dollars in your pocket. I want to reduce that tax hike that you 
got hit with recently.

  The idea of moms and dads when they come to the fair, let me tell 
you, they do bring the children and they are excited about the prospect 
of the $500 tax credit. Also I am a mom, I have two adopted children so 
I know how important it is also to give that tax credit to the children 
that are waiting to be adopted and moms and dads wanting to do the 
right thing and to add to their family. These are not for, as you said, 
the rich people. We are talking about middle class and our low-income 
people throughout America. This is what it is--I want to give and I 
know you gentlemen want to give dollars back so that they can control 
their own destinies.
  Mr. KINGSTON. We just do now want to take it in the first place. It 
is the people's money. That is what really gets me about the arrogance 
on the other side when they say you are giving money to them. It ain't 
our money, for crying out loud. We are talking about the people of 
America. We are talking about their money. We are just not going to 
confiscate as much as we have been confiscating. If you do not think it 
is confiscation, don't pay your taxes one time and find out about it. 
That is the absolute truth.
  I was speaking last week to the drivers of UPS in my district. A guy 
said to me:

       Listen, I make good money as a truck driver for UPS. I 
     don't make a lot of money but it is a good living. I've got 3 
     kids. My wife works. We work typically 50 hours a week or 
     more each. Yet at the end of the month, we have got 
     absolutely zero because our money is going to taxes.

As you know statistically, that two-income middle-class family is 
paying 40.5 percent of their income in taxes. The same family in the 
1950's as a percentage of that income only 2 percent went to the 
Federal Government. Today that family is paying 24 percent to the 
Federal Government. We are killing the American middle class with taxes 
and they are sick and tired of it and it is their doggone money. We are 
not giving it back to them.
  Mrs. SEASTRAND. Even if the budget were balanced and we did not have 

[[Page H 9873]]
  that problem of looking at how we are going to handle that situation, 
even if it were balanced, Medicare would still have to be saved from 
bankruptcy. I think that is an important point. The tax relief has 
nothing to do with this issue. We need to save the program because it 
is the way the system is made up. It is failing. It needs help. We have 
to breathe life into it.
  Again that is why I am excited about our medical savings accounts and 
all of the other options we are going to give. It is good news that our 
bill passed out of the Committee on Ways and Means today.
  Mr. GUTKNECHT. And the tax relief, if I could just say and the 
gentleman from Georgia [Mr. Kingston] has said it so well. Whose money 
is it? It is not Washington's money. We did not earn it. They earned 
it. They work hard every day. We are saying you ought to be able to 
keep a little of it.
  The second and more important point is who can spend it more 
efficiently. Are there any people in America who really believe--in 
fact, let us play a little mental game with this. Let us envision 
that you won a big lottery and all of a sudden you became a very 
wealthy person and you wanted to help humanity.

  What is the first thing you would do? I do not think the first thing 
that you would do is give the money to the Federal Government. Because 
I do not care what your circumstances, I do not think anybody really 
believes the most efficient way to distribute funds or the most 
efficient way to buy things is through the Federal Government. We know 
what the most efficient unit is. It is called the family. That is why 
that family tax credit is so important. Those families know how to 
spend that money efficiently. They will get real value for the money 
and they will plow it back into the economy and frankly I think long-
term we will see overall revenues to the Federal Government go up 
because of the increased activity.
  The second point that needs to be made, and this is where some of our 
friends on the left get so upset. It is about this capital gains tax 
cut really which I think is so important. Really what we want to do is 
stimulate economic growth in this country so we have more jobs and more 
opportunity. It is about converting this society from a welfare state 
to an opportunity society. This is what we promised last November. We 
were serious about it. We want to change that. But even capital gains 
where I think we have to say, it may well be that some wealthy people 
will take more advantage of that tax break that other people. This is 
true. But let me give a very important fact. Again I think facts are 
our friends. Forty-four percent of the people who pay a capital gains 
tax in the United States are wealthy for one day. The day they sell 
their businesses, the day they sell their farm, the day they sell some 
other investment which in many cases they have been paying taxes on for 
a long period of time. Again whose money is it? The Federal Government 
did not help create that wealth. The Federal Government did not help 
create that wealth. The Federal Government is not really helping to 
create those jobs that usually go with those capital gains.
  I think what we need to do, we promised we would give tax relief and 
unlike some of the other people who have been elected, the old politics 
as usual, we made a promise last November that we were going to lower 
taxes on families and we were going to make it easier for people to 
invest and save. We were serious then, we are serious now and we are 
going to come through with that tax relief.

  You are right, it has absolutely nothing to do with saving Medicare. 
The Medicare fund would be going bankrupt whether we gave tax relief to 
American families and encouraged jobs and investment or whether we did 
not.
  Let me just finally say about the tax cut, all we are really doing is 
giving back a little bit of what was taken away in the big tax increase 
a few years ago. This is just starting to give back to the people what 
they had before the big tax increase. I think it is a great idea, it is 
long overdue, I think once the American people begin to understand the 
facts there will be overwhelming support for this.
  Mr. KINGSTON. If the gentleman will yield, after the outside-the-
beltway tax increase, the Bush-Democrat party deal, the economy 
slumped. Revenues did not increase, because the prosperity was not 
there. Yet under the Reagan cut, prosperity increased, revenues 
increased. There comes a point where the American public has had all 
the fun they can stand and they are not going to continue working this 
hard. The UPS driver that I was talking about, why would he want to 
continue working 50 hours a week when he knows the marginal increase is 
almost zip?
  Mrs. SEASTRAND. If he can keep his dollars, he is going to do 
additional things. He is going to buy that home, he is going to maybe 
buy a new truck to get the family around. People do not put their 
dollars necessarily in a mattress anymore. They are going to do 
something with those dollars. They are going to buy it, invest it in a 
business or a home or hopefully they are a small business and they will 
hire someone additionally and give that young person a job.

                              {time}  2030

  So this is all important too, and I think the most important thing is 
that we made promises in the fall of 1994, many of us as reform-minded 
freshmen who have come here because of promises we made. It is my 
intention to keep that promise. It is exciting times here this fall in 
1995 because there is a lot to do, and we are going to not only save 
Medicare but we are going to help to give tax relief to the American 
people.
  Mr. GUTKNECHT. One last point about tax relief. This is something not 
well understood, and sometimes it gets lost in the whole discussion: 
The tax cuts we are talking about have been paid for. I mean, we have 
made, by the time we finish with reconciliation, with the rescission 
bill which we passed earlier in the session and the appropriations 
bills which are working their way through the House now, we will have 
cut over $44 billion in discretionary domestic spending. We paid for 
the tax cuts irrespective of what we are doing with Medicare or 
anything else in the budget. We are paying for the tax cut by cutting 
Federal spending. That is critically important because I think that is 
what many of the money markets are out there looking towards, and that 
is why we are going to get greater economic growth, and that is why we 
are going to get lower inflation, lower interest rates down the road if 
we follow through with this plan.
  Mr. KINGSTON. What the gentleman is saying, instead of taking the 
money from the people, the American middle class, you are going to take 
it from the Washington bureaucrats, which is exactly the platform that 
the two of you and the other Members of the freshman class campaigned 
on. When I go back home and talk to my civic clubs and describe the 
freshman class, I say for the first time in my political life normal 
people create the majority of the folks in there.
  I believe, as your freshman class has got a reputation, you are not 
running for Senate, you are not running for President, you are not 
running to be committee chairmen up here in 20 years. You just want to 
balance the budget and go home and make a better America, and I think 
that that is the difference, and this is your approach on Medicare. You 
are being reasonable. You are being sensible. You are moving to 
simplify it. You are moving to protect it. You are moving to save it. 
You are moving to strengthen it. That is what the American people want.
  I am glad to be part of your team. Even though I am in the sophomore 
class, I do think our philosophies are exactly alike, and I am proud to 
be with you, and I appreciate being in this special order tonight.
  Mrs. SEASTRAND. I guess we started off talking about so many things 
that we have to talk to our seniors and Americans across this Nation, 
to talk about our Medicare Preservation Act and how difficult it is 
because so often the headlines are the 30-second ads, which always use 
the key words, ``rich,'' ``cut,'' and so on, and scare people. I am 
proud to say we are moving forward with a plan. We are going to save, 
protect and strengthen Medicare. It is going to be there for my mom, 
who is 83. It is going to be there for me and future generations.
  We are going to try, as I said before, to get the message out across 
this land that this is what we are doing.

[[Page H 9874]]

  Mr. GUTKNECHT. We have got to close here. I just want to say it has 
been my pleasure to participate in this special order. I do believe, as 
John Adams said, facts are stubborn things. I do think more of the 
American people, the more they get to know the facts, whether we are 
talking about welfare reform, tax relief for families, saving Medicare, 
I think the American people will understand. I think they do understand 
that this is what they sent us here to do. They do not want politics as 
usual. They want to save Medicare, not just to get through the next 
election but they want to save Medicare for the next generation.
  I think if we are permitted to pursue these reforms we are talking 
about, if we do not lose hope and faith in the American people, they 
will not lose faith in us.
  I thank you for allowing me to participate, I say to the gentlewoman 
from California [Mrs. Seastrand].

                          ____________________