[Congressional Record Volume 141, Number 158 (Thursday, October 12, 1995)]
[Senate]
[Pages S15102-S15104]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                MEDICARE CUTS IN THE RECONCILIATION BILL

  Mr. LAUTENBERG. Mr. President, I rise today to begin some comments on 
the upcoming reconciliation bill. The Republican reconciliation bill 
simply, in my view, puts the question to this body: Whose side are you 
on? I think that is the basic question. Are you on the side of middle-
class Americans? I think that is the defining precept. Or are you on 
the side of our senior citizens, middle-class families who are trying 
to send their children to college, and lower income working families? 
Or are you on the side of the wealthy and the special interests?
  The Republican reconciliation bill is a bonanza for the well-off and 
the powerful, while senior citizens, students, and working-class 
families get stuck footing the bills.
  In my view, this is plain wrong. While the Republicans lay down for 
the wealthy and the special interests, Democrats stand up for the 
middle-class, working Americans who are struggling to hang on and to 
build a better life for their children.
  The Senate will soon consider the biggest reductions in the history 
of the Medicare program--reductions in services, that is. Regrettably, 
the Senate will not have much time to consider these severe cutbacks 
thoroughly or thoughtfully. The debate on the reconciliation bill is 
limited to a total of 20 hours. That is quite incredible when you think 
about it, because reconciliation bill language is kind of arcane for 
most of our citizens. So, simply put, it is how we balance the books, 
how we reconcile income with expense. It is a question that families 
deal with and a question that businesses deal with. And here we have 
virtually the whole budget for the fiscal year for the Federal 
Government, and we are going to deal with this in 20 hours--quite 
incredible. But those are the rules and we have to play by them.
  Therefore, I want to take this chance to join with other colleagues 
on this day to talk about what we see as the faults in the 
reconciliation bill, before 

[[Page S 15103]]
we consider it under such strict time restrictions.
  Mr. President, the Republican budget is built around a false premise. 
The Republicans argue that in order to save Medicare, we have to 
destroy its fundamental mission. This is simply not true. But our 
friends on the other side continue to perpetuate this myth. They have 
their propaganda machinery operating at full speed. They say they are 
saving Medicare, that they are throwing out a life raft. I have to ask 
the question: For whom? Who is the life raft for?
  The answer comes back very clearly. It is for the well-heeled. It is 
primarily based on the House bill, and we are talking about a $20,000 
tax break for a $350,000 income earner.
  I think it is time to call our people and tell them the truth. The 
first unbelievable statement that Republicans are making is that we 
need $270 billion to save Medicare. That is the life raft they pretend 
to throw out. It is simply untrue.
  The Republicans are using this $270 billion to finance their $245 
billion tax break for the rich folk. We see it here in graphic form on 
this chart. But we do not see it in the kind of graphics that the 
average family is going to see it in when they have to pay the bill. It 
is no coincidence that the Medicare cuts are $270 billion and the tax 
breaks for the well-off are $245 billion. These figures are remarkably 
similar because one is being used to finance the other. They are taking 
from our senior citizens, who paid the bills over the years, signed the 
contract with their country, weathered the storms in the post-World War 
II years, and they are giving it back to the wealthy and special 
interests.
  Mr. President, the second Republican claim is that we need to cut 
$270 billion to make Medicare solvent. That is not true. The chief 
Health and Human Services Medicare actuary has stated that we only need 
$89 billion in savings to make Medicare solvent until the end of the 
year 2006.
  The next chart simply lays out the arithmetic. Here $270 billion in 
GOP-proposed cuts--cuts in growth, cuts, period; $89 billion in savings 
needed for the trust fund, and that leaves a net sum of $181 billion, a 
lot of money. Where does that money go? Well, it goes to finance the 
tax breaks for the upper-income people.
  Mr. President, the third inaccuracy I want to discuss is the 
Republicans' fallacious portrayal of their $135 billion in Medicare 
part B cuts. The $135 billion in Medicare part B cuts include increased 
premiums and deductibles for our senior citizens. Those are taxes, in 
no uncertain terms. But these increases are not being used to save 
Medicare. I want to repeat that the Medicare part B cuts are not being 
used to make Medicare part A, the trust fund, solvent. They are two 
distinctly, separate pots of money.
  Our friends, the Republicans, are going around the country claiming 
that these increases in Medicare part B are being used to save the 
system. But, once again, it is very clear that that is not the mission. 
They are being used to finance the tax breaks for the rich.
  Mr. President, Medicare is not just a health insurance program. 
Medicare is a commitment that we made to our citizens. It is 30 years 
old now. It is a promise for those that if they worked hard during 
their lives, paid the premium, that one's medical needs would be taken 
care of when retirement comes.
  In the coming weeks, the American people need to hear the truth about 
Medicare, because the Republicans are going to try to ram through their 
Medicare cuts, the tax breaks for the wealthy, while they increase 
taxes on the elderly.
  We are going to try and tell the truth. We will tell them their 
Medicare program is being used as a slush fund for tax breaks for those 
at the top of the income ladder.
  When Americans understand the facts, Mr. President, I do not think 
they will like what they see.
  In confirmation of my statement--I think it sits fairly in front of 
the American people--I refer today to a story that appeared in the New 
York Times. It says ``Doctors' Group Says GOP Agreed to Deal on 
Medicare.''
  Well, if there is any doubt about whether it is the special and the 
powerful that are getting the better part of this deal at the expense 
of the elderly and the disabled and others who will have to find ways 
to pay for programs that they have already paid for, then one simply 
has to see or hear what is being said in this article:

       Just hours after endorsing the House Republican plan to 
     revamp Medicare, officers of the American Medical Association 
     said today that they had received a commitment from the House 
     Republicans not to reduce Medicare payments to doctors 
     treating elderly patients.

  I add what is not being said is they did agree to increase the costs 
for the senior citizens, to put a tax on the elderly so that they could 
find the funds not to reduce the Medicare payments.
  And then Mr. Kirk Johnson, senior vice president, says: ``It's wrong 
to suggest that the AMA endorsement was contingent upon billions of 
dollars.''
  ``There isn't a precise figure. We don't know the amount.'' Well, we 
know what the mission is; we may not know the specific amount.
  It goes on to say, ``The House Ways and Means Committee approved the 
bill today by a party-line vote of 22-14.'' They identify 
Representative Bill Thomas, a California Republican who is chairman of 
the Ways and Means Subcommittee on Health, who said the concession to 
doctors would cost no more than $400 million over 7 years.
  That is a nice, round figure. Still an awful lot of money. An aide to 
Speaker Newt Gingrich said, ``If the doctors are for sale, they come 
real cheap.'' Four-hundred million dollars over 7 years, it is not a 
lot of money; it is only a lot if your income is $25,000 a year, like 
75 percent of our senior citizens in this country, or $10,000, like it 
is for 35 percent of our senior citizens, or it is for 25 percent of 
our senior citizens who live on nothing more than their Social 
Security.
  I guarantee if they see $400 million and ask where it is going that 
they will think twice about how they feel about being stuck with the 
bill as the programs are being cut in front of their faces.
  The article goes on:

       Lawmakers and lobbyists scramble today to explain events 
     leading to the association's endorsement of the Republican 
     plan . . . their accounts, though incomplete, open a 
     revealing window on the normally secret negotiations.

  Boy, the public has to hear that--secret negotiations between 
congressional leaders and the high-powered lobby.

       Mr. Gingrich met AMA leaders on Tuesday and beamed as they 
     announced their support for his handiwork.

  I am reading from the reporter's story.
  ``Mr. Thomas,'' formally identified chairman of the Ways and Means 
Subcommittee on Health, ``confirmed that the doctors would be protected 
against any reduction in Medicare fees in the next 7 years. Under 
current law, and under the House Republicans' original proposals, fees 
for many doctors would have declined.''
  I do not hear anybody saying that they are guaranteeing that fees for 
the elderly nor fees for the impoverished Medicaid will not go up. They 
are saying, let them pay. Let them pay. Let their fees increase over 
$3,000 a person over the next 7 years for elderly people who qualify 
for Medicare. I assume that is true for the disabled as well.
  Let the copayments increase. Let the deductibles increase. Charge 
them the taxes. Even though they paid the bill, even though the 
agreement was made, let them pay.
  When the American people understand the facts, Mr. President, and 
that is the mission, I do not think they will like what they see. They 
will ask the right questions. I only hope that they get honest answers.
  I ask unanimous consent that the article in the New York Times be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         Doctors' Group Says G.O.P. Agreed To Deal on Medicare

                            (By Robert Pear)

       Washington, Oct. 11--Just hours after endorsing the House 
     Republican plan to revamp Medicare, officers of the American 
     Medical Association said today that they had received a 
     commitment from House Republicans not to reduce Medicare 
     payments to doctors treating elderly patients. But the 
     organization said that it was not for sale and insisted that 
     there was no quid pro quo.
       ``It's wrong to suggest that the A.M.A. endorsement was 
     contingent on billions of dollars,'' said Kirk B. Johnson, 
     senior vice 

[[Page S 15104]]
     president of the association. ``There isn't a precise figure. We don't 
     know the amount.''
       In any event, he said, the money is less important than the 
     overall policy embodied in the Republican bill, which would 
     slow the growth of Medicare and open the program to all sorts 
     of private health plans, including those organized by 
     doctors. The House Ways and Means Committee approved the bill 
     today by a party-line vote of 22 to 14. [Page A20.]
       Representative Bill Thomas, a California Republican who is 
     chairman of the Ways and Means Subcommittee on Health, said 
     the concession to doctors would cost no more than $400 
     million over seven years.
       An aide to Speaker Newt Gingrich said, ``If the doctors are 
     for sale, they come real cheap.''
       Lawmakers and lobbyists scrambled today to explain events 
     leading to the association's endorsement of the Republican 
     plan, which is fiercely opposed by Democrats and some 
     consumer groups. Their accounts, though incomplete, opened a 
     revealing window on the normally secret negotiations between 
     Congressional leaders and a high-powered lobby.
       Mr. Gingrich met A.M.A. leaders on Tuesday and beamed as 
     they announced their support for his handiwork.
       Mr. Thomas, who attended the meeting, confirmed that the 
     doctors would be protected against any reduction in 
     Medicare fees in the next seven years. Under current law, 
     and under the House Republicans' original proposals, fees 
     for many doctors would have declined.
       The association denied that it had sold its endorsement for 
     monetary gain. In a telephone interview from his office in 
     Chicago, Mr. Johnson said, ``We got assurances that there 
     would not be absolute rollbacks or reductions physician 
     fees.'' But he said the endorsement was not predicated on 
     those assurances.
       The cost of the concessions was a subject of dispute. Mr. 
     Thomas said: ``How much is it going to cost us to make the 
     adjustment? Two or three hundred million dollars. I don't 
     know the exact amount.''
       But independent health policy experts and budget analysts 
     said that the Republicans' assurance to the doctors, if taken 
     literally, could increase Medicare spending by a few billion 
     dollars, beyond the amounts that would be spent under current 
     law in the next seven years. The experts said they could not 
     easily reconcile the Republicans' promise to the doctors with 
     the large savings the House Republicans still expect to 
     achieve.
       The Republicans plan to cut projected spending on Medicare 
     by $270 billion, or 14 percent, over the next seven years, 
     and they still intend to get $26 billion of that amount by 
     limiting payments to doctors. The Senate version of the 
     legislation would cut only $22.6 billion from projected 
     spending on doctors' services, and leaders of the A.M.A. said 
     they thought they had received a commitment from some House 
     Republicans to move toward the Senate position on this issue.
       The A.M.A. apparently assumes that doctors will control the 
     growth of physician services much better than the 
     Congressional Budget Office expects. The budget office 
     assumes that the volume of such services under Medicare will 
     increase by an average of almost 10 percent a year through 
     2002.
       Mr. Gingrich has been wooing other groups, like the 
     American Hospital Association and the American Association of 
     Retired Persons, in hope of winning their support for the 
     Republican Medicare plan. But they are demanding more than 
     the Republicans can afford to provide. Hospitals are hit much 
     harder than the doctors and are responsible for more of the 
     savings.
       Democrats had a field day criticizing the agreement between 
     Mr. Gingrich and the A.M.A.
       President Clinton's press secretary, Michael D. McCurry, 
     said, ``It appears that the doctors have won at the 
     expense of elderly patients.'' Representative Henry A. 
     Waxman, Democrat of California, said, ``The A.M.A. has 
     taken an extremely narrow view of the interests of 
     doctors.''
       But Mr. Gingrich dismissed the criticism as ``tawdry 
     nonsense'' and called the Democrats hypocritical. ``When the 
     Democrats offer to spend more money on something, which by 
     the way will go to doctors and hospitals, that's good'' in 
     their eyes, he said. ``But if it's a Republican idea to send 
     money to doctors and hospitals, then that's a bad idea.''
       On Medicare, Mr. Gingrich said, the Democrats ``don't have 
     a plan, they have no solution, they have no ideas, and all 
     they do is complain.''
       Cathy Hurwit, legislative director of Citizen Action, a 
     consumer group, said the Republicans ``have sought to buy off 
     special interests like the A.M.A. by including provisions 
     that put the financial interests of doctors ahead of the 
     medical needs of their patients.''
       Mr. Thomas vehemently denied that Republicans had bought 
     the doctors' endorsement. He said leaders of the association 
     were already in ``philosophical agreement'' with much of the 
     bill, including new limits on medical malpractice lawsuits 
     and changes in the law regarding fraud and abuse in the 
     Medicare program. In addition, he said, doctors like the bill 
     because it would allow them to ``control their destiny'' by 
     forming their own health plans to serve Medicare patients.
       But just last week the association expressed concern about 
     the bill's stringent limits on Medicare payments to doctors. 
     On Oct. 3, James H. Stacey, a spokesman for the association, 
     said the House bill would reduce Medicare fees for some 
     doctors, and as a result, he said, they might be less willing 
     to participate in the program, which serves 37 million 
     people.
       The doctors' arithmetic was correct, but they violated a 
     cardinal rule of political etiquette by going public with 
     their concerns while House Republicans were trying to 
     negotiate with them behind the scenes. Republican leaders 
     chided them, but their faux pas might have paid off.
       Medicare uses a fee schedule to pay doctors, and the fees 
     are updated each year to reflect increased costs and other 
     factors.
       Mr. Thomas said: ``The doctors came to us and demonstrated 
     that within the medical profession and between specialties, 
     there were certain instances of an actual negative factor 
     between years, rather than just a slowing of the growth. We 
     examined their materials and came to the conclusion that they 
     were right.''
       Mr. Thomas described the latest changes as ``a fine-tuning, 
     a rather minor adjustment.'' As a result, he said, ``there 
     will be no year in which a medical specialty gets less money 
     than the year before.''
       Under the Medicare fee schedule, every physician service, 
     from a routine office visit to a coronary bypass operation, 
     is assigned a numerical value, and this number is multiplied 
     by a fixed amount of money, called a dollar conversion 
     factor, to determine how much the doctor is paid for the 
     service. Under current law and under the original House 
     Republican bill, the conversion factor would have declined in 
     the next seven years.
       Mr. Johnson of the A.M.A. said today that House Republican 
     leaders had promised to ``work with us to prevent the 
     conversion factor from declining.'' An increase in the 
     conversion factor increases total Medicare costs, and a 
     reduction lowers the cost, assuming no change in the volume 
     of doctors' services.

  Mr. LAUTENBERG. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DASCHLE. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________