[Congressional Record Volume 141, Number 160 (Tuesday, October 17, 1995)]
[House]
[Pages H10124-H10129]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           MEDICARE DECEPTION

  The SPEAKER pro tempore (Mr. Gutknecht). Under the Speaker's 
announced policy of May 12, 1995, the gentleman from Washington [Mr. 
McDermott] is recognized for 60 minutes as the designee of the minority 
leader.
  Mr. McDERMOTT. Mr. Speaker, in these Halls in 2 days we will have a 
vote on H.R. 2425. It is the Republicans' plan to slash Medicare by 
$270 billion over the next 7 years. Now, if you believe the Republican 
rhetoric, every one of us here would think that these drastic cuts are 
necessary to prevent the Medicare program from going bankrupt. Nothing 
could be further from the truth. These cuts have little to do with 
saving Medicare or the part A trust fund.
  Let me say, we throw terms around in this House that are often not 
well understood by the public. Medicare is divided into two pieces: 
part A, which is the hospital payments, and part B, which is the 
payments to doctors and other providers of services to the elderly. 
These cuts have little to do with saving part A.
  The Republicans are cutting $270 billion from Medicare because they 
want to use that money to offset the $245 billion in tax cuts for 
wealthy Americans.
  Now, ask yourself this: If the Republicans were so concerned about 
the impending bankruptcy of the Medicare trust fund, how come they 
never mentioned it before November 1994? It is ironic, when you think 
about it, that with all of the Republican rhetoric about saving the 
trust fund, the only action they took this year in 1995 was to approve 
a tax provision in the Contract on America which takes money out of the 
hospital trust fund through a reduction in the amount of Social 
Security taxes paid. Over $36 billion would be removed from the fund 
over the next 7 years as a result of that legislation that has already 
passed this floor.
  You heard me right. The first thing the Republicans did was to take 
$36 billion out of the trust fund. They will stand out here and say we 
have to put this money into the trust fund, but the first thing they 
did was to take it out.
  Furthermore, the issue of the insolvency of the part A trust fund has 
simply nothing to do with Medicare's supplementary insurance that is 
part B, the report of the part B trustees, which you never hear 
mentioned on this floor, is that part B is actuarially sound. It is 
absolutely financed.
  Therefore, if you are making cuts in Medicare which are being made 
solely to save part A, the hospital part, there is no need to take $140 
billion in cuts out of part B. Almost $54 billion is in increased 
premiums to seniors that they pay each month. That is not necessary to 
save part A.
  Not 1 cent of the money cut from part B in their proposal, which you 
will see on Thursday, will go into part A. The dollars go into the 
general fund to take care of the tax cuts which will follow.
  As a result of the increasing public opposition to these drastic cuts 
in Medicare, the Republicans had to do something, which is saying, you 
are just shifting the money around. So they said, we will create a 
lockbox which they claim will sever the connection between the Medicare 
savings and the tax cut. They are going to try and divide it.
  One of the reasons why we are voting on Medicare this week and the 
tax breaks next week is they do not want you to think there is any 
connection. This lockbox is simply an illusion. It is really a return 
to the kind of smoke and mirrors budget gimmickry that they hope will 
fool the American people.
  The Republicans think that the American people are stupid. They want 
us to believe that by depositing the money they cut from Medicare into 
a separate account, they can prove that the Medicare cuts will not pay 
for tax breaks.
  Now, we all know that money is green. The term we use around here is 
fungible. You can use it here, you can use it there. It makes 
absolutely no difference which government account the money is put into 
or taken out of. The Government must pay its bills, and it does not 
matter which checking account it is in. You can have a bunch of 
different checking accounts. It is still government money. It comes 
from taxes. They are just simply trying to hide it.

  The bottom line is that the Republican lockbox is just a new Federal 
bank account. The Republican Medicare bill and the rhetoric that makes 
it sound as if no spending is allowed out of the lockbox is simply an 
illusion.
  Their bill allows borrowing. They put it into the lockbox. You cannot 
spend it, they say, but you can borrow it. In fact, it requires the 
lockbox to lend money to the Department of the Treasury.
  Coincidentally, of course, the Treasury Department needs these funds 
because of the Republican tax break. The American people need to know 
that the money from the cuts in Medicare not only goes into the new 
lockbox, but the money goes right through the lockbox and into the 
pockets of the wealthiest taxpayers who will benefit from the 
Republican tax cut. Over half of that $245 billion in tax breaks goes 
to people making more than $100,000.
  Now, to further mislead the American people, the Republican 
leadership has suddenly decided that this Medicare legislation will 
have a separate vote in the House of Representatives. The Medicare 
legislation will be considered separate from reconciliation. On 
Thursday we do Medicare. Next week or sometime thereafter, who knows, 
we will have the reconciliation bill which will have all the tax breaks 
in it, and the Medicare legislation will be incorporated by reference.
  That is a fancy term we use in the Congress to say, what happened a 
few days ago applies today. They will say they are totally 
disconnected, but in fact the bill contains an incorporation by 
reference.
  Without that phrase, without that incorporation by reference, the 
Congressional Budget Office would not be able to count the Medicare 
cuts in determining whether the reconciliation bill includes enough 
deficit reduction to allow the $245 billion in tax breaks to go 
forward.
  The Republican leadership has created a perfect scenario for spin 
control and deception. They can argue that the $270 billion in Medicare 
cuts are separate from the $245 billion in tax breaks while at the same 
time counting the savings from Medicare toward the amounts needed to 
balance the budget.
  Now, you can get as fancy parliamentarily as you want to here, but no 
amount of procedural vote wrangling or accounting gimmicks can hide the 
fact that the $270 billion in Medicare cuts are tied to the $245 
billion in tax breaks. The numbers match.
  In addition to creating this lockbox, which could be raided at any 
time, the Republican bill does not extend the solvency of the part A 
hospital trust fund any longer than the Democratic substitute bill but 
it slashes Medicare by three times as much. The Republicans cannot hide 
this any longer.
  Although they claim that their plan will extend the solvency of part 
A until 2014, and you will hear this on Thursday, you will hear 2014, 
it is not true. The net impact of the Republican plan is to extend the 
solvency of the hospital trust fund, part A, until 2006 at a cost of 
$270 billion.
  I dropped in a bill, H.R. 2422, which also extends the Medicare trust 
fund until 2006, but it costs $90 billion, not $270 billion, $90 
billion.
  Four of the Medicare trustees and the HCFA Administrator--HCFA is 

[[Page H 10125]]
  Health Care Financing Administration, for those of you who have 
forgotten--the HCFA Administrator, who runs this thing, says that the 
reductions in part A are approximately $89 billion and would be enough 
to ensure solvency to 2006.
  The Republicans can only achieve $270 billion in cuts by drastically 
reducing benefits to seniors and shifting the costs onto beneficiaries; 
that means senior citizens and their families. The Republicans want to 
reduce the Medicare Program to a worthless shell.
  Medicare that seniors know today will exist in name only while 
providing no real health care or economic security to the beneficiaries 
and their families. People will pay more and get less.
  Despite the $270 billion in Medicare cuts, the Republican bill does 
nothing to solve the problem of baby boomers entering the Medicare 
Program in 2010.
  Now, lots of people throw this term baby boomers around. I am not 
always sure they understand what we mean by that. If you were born 
after 1945, you will be 65 in 2010, and you come into Medicare. Anybody 
born after 1945 is a baby boomer. They are the people who come into the 
program in 2010.
  On December 27, 1995, I introduced a bill, the Medicare Security Act, 
which extends the solvency of the Medicare trust fund until 2006 and 
creates a bipartisan commission to deal with this problem of the baby 
boomers.
  In response to the introduction of my alternative Medicare bills, the 
Committee on Ways and Means chairman, the gentleman from Texas [Mr. 
Archer], stated in a press release: ``Any proposal that fails to save 
Medicare until the eve of the baby boom retirement must be considered a 
failure.''
  Well, Mr. Speaker, the chairman by his own standard failed in his 
Medicare bill. According to the actuaries for the Medicare trust fund, 
the Republican plan would extend the life of the hospital trust fund, 
part A, through the third quarter of calendar year 2006. That is a 
quote from a letter dated 11 October 1995 to the gentleman from Florida 
[Mr. Gibbons] from the HCFA Administrator, Bruce Vladeck, based on data 
from the Medicare actuaries.
  The year 2006 is 5 years before the first baby boomers begin to 
retire in 2011 and 8 years shorter than the Republican claims of 
solvency until 2014.
  In addition to cutting three times more than is needed for Medicare 
to stabilize the part A trust fund until 2006, the Republican bill is 
loaded with sweeteners for various interest groups to silence any 
opposition.
  As a doctor, it is troubling to me to see members of the American 
Medical Association put their own interests ahead of their patients by 
cutting backroom deals with the Speaker in exchange for their support 
of the Republican bill. In a bill in which beneficiaries are being 
asked to contribute $53 billion more, the doctors were negotiating 
provisions allowing them to create their own health care plans and 
avoid further reductions in their fees.

                              {time}  1845

  The Republican bill will allow doctors, as well as hospitals, to 
create doctor-hospital networks to sell health insurance plans directly 
to Medicare beneficiaries. These new networks will be called provider-
sponsored networks or PSN's. It is a new term for you to learn because 
you are going to hear it endlessly on Thursday. Provider-sponsored 
networks; that means doctors are out there doing whatever they want 
with hospitals under special Federal rules which will preempt, which 
will preempt, override, existing State laws. It will allow the PSN's to 
operate with lower financial reserve requirements and other standards 
than are required for HMO's and private insurers. That means the 
insurance commissioner in the 50 States will not be able to control and 
regulate what these PSN's are out selling to beneficiaries.
  To allow these PSN's to operate immediately, Mr. Speaker, the 
Medicare plan by the Republicans changes existing antitrust laws and 
says that the States do not need, the PSN's do not need, State 
licenses. Clearly, being exempt from existing State regulation will 
give these PSN's an unfair competitive advantage for doctors and 
hospitals over existing HMO's. If that was not enough, other giveaways 
to doctors are limits on medical malpractice awards for pain and 
suffering to $250,000.
  The approach taken by this bill is extremely one-sided and does 
nothing to protect and promote the legal rights of injured patients. 
The Republican bill only seeks to protect doctors from full legal and 
financial accountability for their negligent behavior while restricting 
the ability of patients and their families to receive fair and adequate 
compensation.
  The list of benefits for doctors goes on, rolling back vital Federal 
oversight of clinical laboratories in doctor's offices. In other words, 
doctors can refer to their own laboratories. They eliminate provisions 
on doctors' self-referral. They provide unwarranted antitrust relief 
for physicians. They provide the ability to charge Medicare Plus, and 
that is what they are going to try and push all the seniors into, is 
Medicare Plus. They are going to allow the doctors to charge higher 
fees, and they also set a new formula for setting fees in the old 
traditional Medicare. Mr. Speaker, it is clear that the only interest 
the American Medical Association has in Medicare is a financial 
interest for themselves.
  The Republican plan also offers beneficiaries some false choices and 
false promises of security. The Republican plan creates Medicare Plus; 
I mentioned it earlier. It is a program which is advertised as offering 
seniors more choice of health care options, but in reality will create 
divisions and inequalities within Medicare. Medicare Plus will actually 
force beneficiaries to pay more for less while initiating what I call a 
death watch for the traditional Medicare Program. Medicare Plus under 
the Republican plan will be available as an alternative to traditional 
Medicare fee for service.
  Now what is Medicare Plus? Well, it really is managed-care plans, 
some new types of specifically specially structured health plans such 
as the PSN's I talked about, medical savings accounts, and health plans 
offered by qualified associations like the Chamber of Commerce. I do 
not know; it is not clear in the bill. It is simply there.
  Unfortunately for seniors all these new choices for health care are 
based on a false promise because Medicare Plus, Medicare's contribution 
to these plans, will be a defined contribution or a fixed amount 
of money which will be given each year which will decline over time 
resulting in seniors being able to purchase less and less health 
insurance. It is right in the bill.

  Now what does that mean for seniors? Well, it is pretty simple. It 
means that an underfunded voucher, they hand you something that will 
buy for this year what next year will buy you 20 percent less, and this 
time, instead of the Government sending the voucher to the beneficiary, 
to the senior, they are going to send it to the health plan.
  Under the Republican plan, Mr. Speaker, the total annual growth in 
the size of vouchers for health care plans is set at 4.7 percent. Now 
where did that number come from? It came out of the air. There is no 
basis for that. We expect, and CBO expects, that private health 
insurance premiums will grow at 7.1 percent. So, if it is growing for 
everybody else in the society at 7.1 percent, but we are going to only 
pay 4.7 for seniors under this Medicare Plus, you can see that 
gradually the buying power of senior citizens is going down by a couple 
of percent every year. By the time we get to 2002, you will be paying a 
thousand dollars more out of your pocket if you are a senior citizen 
buying health care than you are today.
  Now that is a rate of 30 percent higher than the Medicare vouchers 
are allowed to grow. The private sector is still going to grow 30 
percent faster than Medicare will be allowed to grow. It does not take 
a rocket scientist to figure out that the Republican vouchers are 
putting seniors on a road to second-class health care. The vouchers 
will quickly buy less and less coverage on their Medicare Plus, and 
beneficiaries will have to pay the difference, or their families. If 
you realize that there are more than 3 million widows in this country 
living on less than $8,000, and you are talking about the year 2002 
they are going to have to come up with another grand out of their 
pocket, you know they cannot do it. Their kids will have to do, if they 
are lucky to have kids who have the money to do it. Somebody else is 
going to have to pay for it because these seniors are not going to be 
able to do it.

[[Page H 10126]]

  Mr. Speaker, the additional out-of-pocket costs which will be paid by 
seniors makes it clear that the additional choices provided by Medicare 
Plus do nothing to reduce the health care costs overall. It is an 
arbitrary 4.7 annual growth limit on vouchers. That saves money to be 
given for a tax break to the richest Americans.

  In addition to having to pay the difference between the value of the 
voucher and the cost of the benefit package, seniors enrolled in 
Medicare Plus will also be liable for extra charges by providers trying 
to compensate for Medicare's declining provider reimbursement rates, so 
if we cut the doctors what they are paid under Medicare, and you allow 
the doctors to balance bill, they can get it back out of the senior 
because we have taken off the protection against balance billing.
  These extra charges, as I say, are called balance billing. It is a 
practice by which providers charge beneficiaries more than Medicare 
approves. The restrictions in current law on balance billing, which 
permits no balance billing by hospitals and only limited balance 
billing by seniors, will not exist for seniors enrolled in the Medicare 
Plus plan. This is a very important concept. There will be no 
protection for seniors against these hidden new charges, and doctors 
will have a financial incentive to no longer see patients in 
traditional Medicare. If you stay in traditional Medicare, they cannot 
charge you balance billing. If you go into Medicare Plus, they can get 
you. Now that is what I call a real revolution.
  One of the most egregious examples of waste in this Medicare plan are 
the Medicare savings accounts which are an option under Medicare Plus. 
Every legitimate health care expert has agreed that a MSA, medical 
savings account option, will result in extra costs for the Medicare 
program and weaken the hospital trust fund. MSA's allow beneficiaries 
to choose a high-deductible health plan combined with a fixed deposit 
from the Government into an MSA to cover their routine health care 
costs.
  Let us say the Government gives you $5,000, and you take a thousand 
of it and buy a $10,000 deductible program. Then you got $4,000 in the 
plan, and you can use that to cover your routine health costs. If you 
do not spend anything, you got $4,000 bucks for yourself, and the 
healthy seniors will do very well on that, but people who have real 
problems are going to be a problem for the system.
  Mr. Speaker, CBO says that the MSA's in this bill will increase, I 
emphasize increase, Medicare costs by $2.3 billion. It is not a savings 
mechanism for the system. It is a giveaway to people who opt out of the 
Medicare system.
  Now this money that could have been spent on health care for senior 
citizens will instead go to the healthiest and wealthiest of seniors. 
Medicare loses money with MSA's because healthy people will choose the 
MSA option while Medicare lacks the ability to adjust the MSA payments 
for the risk factors. Furthermore, the idea that MSA's will protect 
freedom of choice for seniors is a sham. Once this product, once the 
MSA's are out there and become widespread, the insurance companies will 
take over the MSA product, and they will change it to managed care. The 
result for seniors will be a high-deductible plan with a managed-care 
product at the end of your deductible.
  Mr. Speaker, this is not Medicare reform. It is one of the first 
steps in the destruction of the traditional Medicare and elimination of 
the guarantee of health care for all senior citizens.
  The impact of $148 billion in cuts to Medicare providers under the 
Republican plan will create severe hardships in rural areas. It is not 
just a city problem. We are talking about rural areas where hospitals 
exist in many cases almost totally on Medicare and Medicaid payments 
because retired seniors are living out there, and that is what keeps 
those rural hospitals going. Rural hospitals and clinics already are in 
financial difficulty, and they will be hard pressed to absorb the 
reductions mandated by the Republican bill. In addition, the urban 
hospitals will be forced to accept added reductions and special 
Medicare payments for uncompensated care. Big-city hospitals take care 
of a lot of people who come in who do not have any way to pay, and 
Medicare gives them money to cover that. It is called dish payments, 
disproportionate share. Those payments are made by Medicare, and, when 
we cut those out in this bill, those hospitals are going to be in even 
worse shape.
  Now, if all of this was not bad enough, in addition to the $148 
billion cut from providers, that is doctors and other people who 
provide services, the Republican bill includes something called a fail-
safe mechanism requiring an additional $37 billion in cuts from 
providers if Medicare spending does not meet the arbitrary targets set 
in this budget resolution. What they are admitting here is they do not 
know how it is going to come out, and just in case it does not work, 
they will cut another $37 billion out of doctors and whatever with no 
specificity. You do not know what is going to happen. What will happen 
to home health care? Who knows. What will happen to nursing visits, 
Visiting Nurse Association kinds of things? Who knows? That $37 billion 
is sort of sitting there waiting to take a whack out of these things 
someplace down the road.
  Now this fail-safe mechanism will only affect the traditional fee-
for-service Medicare system. Is that fair? Why only the traditional one 
that people have known, and have lived with and felt secure with? Why 
not the MedicarePlus? Well, it is pretty obvious. It is simply an 
assault on the Medicare plan that every senior citizen in this country 
knows and understands.
  Slashing reimbursements to doctors who remain in the traditional fee-
for-service system will result in more and more doctors leaving 
Medicare to join these PSN's, these provider service networks, where 
they can escape State regulation and charge beneficiaries more.

                              {time}  1900

  Over time, Medicare beneficiaries will find that the Republican 
Medicare bill will force their family doctors to leave them and join a 
provider service network.
  If you do a survey of seniors and ask them for suggestions on how to 
control the rate of growth of the Medicare Program, nine out of 10 
seniors will respond that the Government needs to crack down on fraud 
and abuse in the Medicare system. The Republican plan does nothing, 
nothing to curtail fraud and abuse, and instead, does the exact 
opposite by weakening the administration's efforts to combat fraud and 
abuse.
  The GAO, that is the Government Accounting Office, they are the 
people who go in and look and see if the numbers really add up, they 
estimate that fraud and abuse in the health care industry account for 
an estimated 10 percent of our yearly private and public health care 
expenditures. Based on that estimate, fraudulent payments in 1994 
amounted to nearly $94 billion in this country. Broken down, that 
amounts to approximately $258 million a day, or $11 million every 
single hour.
  As the General Accounting Office stated in testimony before the 
Committee on Ways and Means, Medicare has already begun to address the 
problem, and actually leads the private sector in health care anti-
fraud and abuse efforts. Unfortunately, in spite of all the rhetoric 
you hear about fraud and abuse, the Republican proposal loosens the 
rules that outlaws kickbacks and that requires providers to exercise 
due diligence in submitting accurate and true Medicare claims.
  That is not just Democrat rhetoric against the Republican bill. Under 
the Republicans, the Congressional Budget Office has estimated that the 
Republican fraud and abuse provisions will cost, cost the Medicare 
program over $1 billion from 1996 to 2002. That is right. Get it 
straight. The Republican bill encourages $1 billion in fraud and abuse 
in the Medicare program. All three of the Federal Government's health 
law enforcement agencies have spoken out against the Republican plan. 
It is too bad, in my opinion, that the Republicans are too stubborn to 
listen to the people who actually enforce the law.
  It really is time to focus on the facts. The Republicans are cutting 
Medicare by $270 billion to pay for unnecessary tax cuts, and they at 
the same time are starting the death spiral of the traditional Medicare 
program. My bill, H.R. 2422, the Medicare Security Act, shows 

[[Page H 10127]]
the American people that we can protect the Medicare program without 
hurting our beneficiaries, or disrupting our health care delivery 
system.
  I would be the last person in this House to dispute the fact that 
Medicare is growing too rapidly, and its rate of growth needs to be 
controlled, if we are going to avoid bankrupting the Federal 
Government. However we do not need to cut $270 billion from the 
Medicare program over the next 7 years. Cuts of this magnitude do 
nothing to save the Medicare program, or extend the solvency of the 
part A hospital trust fund any longer than is extended by my bill to 
2006. Medicare is being cut for one reason and one reason only: That 
is, to balance the budget and pay for the tax cuts in the amount of 
$245 billion.
  My bill shows Medicare spending by $90 billion over the next 7 years, 
which would keep the part A solvent until 2006. This gives the Congress 
and the President 10 years to fix the problem of the baby boomers 
entering the Medicare system, without imposing any hidden costs on 
seniors or impeding their access to care.
  As a reasonable alternative, my bill cuts $67 billion from Medicare 
part A and $23 billion from part B. All of the part B savings go into 
Part A to make it solvent. These cuts are basically technical 
adjustments that the health care delivery system can absorb and that 
will preserve the same level of Medicare coverage and benefits that 
beneficiaries have today, which is quite different than the Republican 
bill. Equally important, my bill ensures that the savings in the 
Medicare program will not create profound disruptions in the health 
care delivery system, or our teaching hospitals, or access to quality 
care by our seniors.
  My approach avoids the substantial increases in both the cost of 
private insurance and the number of uninsured persons which the 
Republican plan guarantees. The cuts in my bill are distributed 
throughout the health care system in an equitable manner to doctors, 
hospitals, home health agencies, and skilled nursing facilities. In my 
bill, there are no increased costs to beneficiaries, and adjustments to 
provider reimbursements have been specifically tailored to protect the 
basic elements of our health care infrastructure.

  The Medicare Security Act will not place any additional financial 
burdens on our elderly poor or their families. You have to understand 
that fully 83 percent of Medicare expenditures are for beneficiaries in 
this country, senior citizens in this country, with incomes of less 
than $25,000. We are talking about people who are living a comfortable 
life, they are not in poverty, but they are not rolling in money. This 
is a program that protects the basic American infrastructure that has 
built this country, people that paid their way, that made this country 
what it is.
  Beneficiary payments and copayments should be increased only as a 
last resort, because these seniors simply cannot afford a doubling of 
the part B premium, which is what is anticipated under the Republican 
plan. Their part B premium, that is, for the doctors, already rises 
from $46 a month to $87 a month by the year 2002.
  Under my plan, the premiums, as they have grown each year a little 
bit, will be increased to $58 per month. That is a savings of $30 a 
month for senior citizens. The real problem, and I think the thing that 
has been missed in all this debate, because most people walk around 
thinking this is a senior citizens issue, it really is not a senior 
citizens issue only. It is partly theirs, but it really is also 
everyone else's in the population, because the problem for Medicare 
starts in 2010, when the baby boomers enter the program.
  Many young people in this country do not believe that Medicare will 
be there for them when they reach that age. They say, ``Why should I 
pay for Medicare, because it is not going to be there when I get to be 
65.'' That is a legitimate concern. The Republicans' proposal to slash 
Medicare does nothing to solve that problem. For that reason, my bill, 
like the Republican bill, creates a bipartisan commission to 
specifically address the changes needed in Medicare and in health care 
coverage and finance generally to accommodate those aging baby boomers 
in 2010.
  You may say, ``Why another commission?'' In 1983, this House was 
worried about Social Security. There were thoughts it was going to be 
insolvent. It would not be there at some point in the future. They 
formed a commission, made recommendations to this House, we changed 
some of the laws, and it is now solvent to about 2040. It is that 
proposal that we have before this House in terms of a bipartisan 
commission to facilitate the national debate, which is necessary to 
determine what kind of Medicare program we want for older Americans, 
and whether or not we as a Nation are willing to pay for that program.
  We have to make a decision again that was made in 1965. The reason we 
have to make it now is that we have been so successful. Medicare has 
been successful. People are living longer. They are living more 
productive lives. We have more ways in which we can extend life and 
make life meaningful, and it is costing more. We have to have that 
debate again. Are we willing to do that for the rest of the society 
when they get to be 65, and are we willing to pay for it?
  This blue ribbon commission created by my bill will be charged with 
the responsibility of building a national consensus on the future of 
Medicare. This commission will make recommendations to the Congress by 
January 1, 1998. That is 8 years before any future Medicare collapse in 
2006. It is clearly possible for them to do that over the next 2 years, 
and they should do it. I firmly believe that this commission is the 
most important part of the bill, and the most important part of this 
Medicare debate.
  Before making radical changes in the structure of Medicare, let us 
have an open and honest debate about what we can do to fix Medicare 
without destroying it. Changes in Medicare of the magnitude proposed by 
the Republicans should not be rammed through the House of 
Representatives after one day of floor debate. Four hours and we are 
going to ram it out of here.
  We had not one day of testimony before the Committee on Ways and 
Means on the proposal that was voted out last week. We had many days 
talking about what the problem was. You will hear people say, ``We had 
days and days of hearings on it;'' yes, describing the problem, but not 
a single day was spent in careful examination, with people coming in 
from the outside to talk about what the effects of their proposal 
really would be, so we are going to ram something out of here 
destroying Medicare, and it does not have to happen.
  My bill lays down a marker for honesty and simplicity. According to 
the Congressional Budget Office, this bill and the Republican Medicare 
bill take the Nation to the same destination, 2006. Fortunately, my 
bill costs one-third as much, and I believe that is what the House 
ought to go for. I can see no reason to dismantle Medicare simply for 
the sake of a tax cut for the wealthiest Americans.

  Mr. Speaker, I yield to my colleague, the gentleman from Vermont [Mr. 
Sanders].
  Mr. SANDERS. Mr. Speaker, I thank the gentleman for yielding to me. I 
applaud him on his work.
  Mr. Speaker, I would remind the gentleman that several years ago we 
were in discussion about another issue.
  Mr. McDERMOTT. If you are talking about single-payer, I am ready to 
go.
  Mr. SANDERS. At that time we were not talking about making savage 
cuts in Medicare or making savage cuts in Medicaid. At that time what 
the gentleman was doing and many other Members of this House, and what 
I was trying to do, is bring forth a program that would not be cutting 
programs for the seniors or the low-income people, but in fact, in a 
cost-effective way, would be guaranteeing health care to every man, 
woman, and child in this country without out of pocket expense. In 
fact, it would be providing health care to all of our people without 
spending any more than we are currently spending. We have come a long 
way in 2 years. Unfortunately, we have moved rapidly in the wrong 
direction.
  Today, instead of talking about how we are going to cover everybody, 
what we are talking about is how we are going to throw huge numbers of 
people off of health insurance altogether.
  What I wanted to focus on for a few moments is the impact of the cuts 
in Medicare and Medicaid on small, rural States like the State of 
Vermont. As 

[[Page H 10128]]
the gentleman indicated, in terms of the Medicare cuts, we are talking 
about a $270 billion cut over a 7-year period. In terms of Medicaid, we 
are talking about a $180 billion cut over 7 years. I want to make a 
point here that is not made often enough, I think, that the cuts in 
Medicare and the cuts in Medicaid are only part of an overall attack by 
the Republican leadership on senior citizens in general. Medicare, yes; 
Medicaid, yes, cuts. The LIHEAP program, the fuel assistance program 
that is very important in the cold weather States like Vermont, is 
being proposed for elimination by the Speaker, the gentleman from 
Georgia [Mr. Gingrich], and the other leaders in the House. What that 
means is that many elderly people throughout this country are going to 
find it very difficult to pay the fuel bills when the weather gets to 
be 20 below zero in the State of Vermont.
  I would also mention that senior citizen housing, which is very 
important in the State of Vermont, and I am sure important in 
Washington State as well, is targeted for no more new construction. In 
Vermont senior citizen housing is terribly important. I used to be the 
mayor of Burlington, VT. We had long waiting lists of elderly people 
who wanted to get into the reasonably inexpensively comfortable senior 
citizens housing. No more senior citizen housing.
  Furthermore, we are talking about the elimination of the RSVP program 
and other senior citizen programs, so we should look at the cuts in 
Medicare and Medicaid within a broader scope, and that is part of a 
savage attack on the needs of elderly people.
  The gentleman is correct when he talks about the fact that the real 
reason behind these terrible cuts in Medicare and also in Medicaid have 
far more to do with tax breaks for the wealthy than they do with 
protecting the Medicare system.
  The Republican leadership is proposing a $245 billion tax break over 
a 7-year period, and much of those tax breaks are going to the 
wealthiest people in America. In addition to the individual tax breaks, 
we should reemphasize the point, reiterate the point, that the 
Republicans are proposing to repeal the minimum corporate tax, so on 
one hand we are going to be telling elderly people that they must pay 
more for health care when they cannot afford it. On the other hand, we 
are telling the largest corporations in America who make billions of 
dollars in profits, whose profits now are at an all-time high, that 
they are not going to have to pay any taxes at all.

                              {time}  1915

  Furthermore, we are talking about increases in military spending, 
more money for B-2 bombers, more money for star wars.
  Furthermore, we are talking about the maintenance of a system which 
provides $125 billion a year in corporate welfare.
  Now, why, in God's name, are we cutting back on Medicare, cutting 
back on Medicaid, but not making significant cuts in corporate welfare, 
which is tax breaks for the wealthy and subsidies for large 
corporations.
  In my State of Vermont, as a result of the Republican Medicare cuts, 
some 80,000 senior citizens and disabled Vermonters will be paying 
higher premiums for a weakened Medicare system. In Vermont, these cuts 
represent a $356 million loss of revenue. As a result of the Republican 
proposal, Medicare part B premiums will rise from the current cost of 
$46.10 a month to $87 per month in the year 2002. Under current law, 
the part B premiums would have increased to $61 a month.
  In other words, the Republican proposal will cost Vermont senior 
citizens and disabled people, by the year 2002, $312 a year more in 
part B premiums.
  What I would point out is that there may be some people who are not 
senior citizens who think, well, Medicare is providing great coverage 
right now. Is that not great? As I know the gentleman from Washington 
knows, that is not the case. In my State of Vermont, I talk to many 
seniors who have Medicare who today cannot afford the high cost of 
prescriptions. They cannot afford to pay their fuel bills. They are 
hurting, despite Medicare, as the gentleman, I think, knows. Elderly 
people are paying a larger percentage of their fixed incomes out of 
their own pockets for health care today than before Medicare because of 
the escalating cost of Medicare in America. So with Medicare today 
untouched, many of the elderly are having a hard time affording their 
health care needs. With these cuts, there will be an absolute disaster.
  I also want to say a word on the issue of Medicaid. Medicaid, of 
course, applies to many senior citizens who use Medicaid for long-term 
care in nursing homes, but it also applies to the low-income disabled, 
and it applies to low-income children, and I would hope that the 
American people would take a deep breath and take a look at the values 
of a society which say, yes, more money for star wars, more money for 
B-2 bombers, more money for corporate welfare, more money for tax 
breaks for the rich, but we are going to go after the weakest and most 
vulnerable people in our society, low-income elderly people, low-income 
disabled people, and low-income children. What a set of values. It does 
not make a whole lot of sense to me.
  I would also point out that in the State of Vermont and all over the 
country, when these cuts come to Medicaid and these cuts come to 
Medicare, many, many middle-class families today that are struggling 
with declining incomes are suddenly going to wake up and find out that 
they are going to have to pay more out of their limited incomes to take 
care of their parents who are in senior citizen nursing homes or 
wherever, because Medicaid will not be covering those needs.
  I would also point out that in rural States these Medicaid cuts are 
going to be very devastating, and the Medicare cuts as well, for our 
hospitals. We do not have huge hospitals. Many of the hospitals in the 
State of Vermont are small, rural hospitals which today are barely 
hanging in, and when we appreciate the fact that in the State of 
Vermont, a rural State, 55 percent on average, 55 percent of the 
revenue that comes into the hospitals comes from Medicare or Medicaid, 
there is no debate that in rural America and in rural Vermont, many of 
the hospitals, we have hospitals, Central Vermont Hospital, 60 percent 
of the revenue comes from Medicare and Medicaid, Grace College, 66 
percent, North Country Hospital, 64 percent, Northeastern, 59 percent, 
Northwestern, 59 percent, Springfield Hospital, 61 percent, Mt. 
Ascutney, 68 percent of their revenues coming in from Medicare and 
Medicaid. How do these hospitals continue if there are savage cuts in 
those programs?
  The last point I want to make, and the gentleman from Washington has 
already make this point, is we are talking about drastic cuts in 
programs which are going to affect tens of millions of Americans all 
over this country. The calls coming into my office now are primarily 
calls which say, ``Bernie, do not cut Medicare. Do not Medicaid. We 
just can't survive if those programs are cut.'' I am sure that is true 
of most of the Members of this House.
  One would think, one might think that when we are talking about 
drastic cuts in programs which affect the lives of tens and tens of 
millions of American people, there would be very long, serious debates 
in committee and on the floor of this House, that these debates would 
go on day after day, we would hear discussion from the most 
knowledgeable people in America as well as from the senior citizens and 
the low-income people who are going to be impacted. But as the 
gentleman has already points out, that debate is very, very limited, 
and we know the reason why.
  I think the Republican leadership understands that the more the 
American people learn about their proposals, and the polls all indicate 
this, the less support there is for that. So they are trying to push 
these things through and in, I think, a very unfair and undemocratic 
way.
  I thank the gentleman from Washington very much for the opportunity, 
to say a few words.
  Mr. McDERMOTT. Your last point reminds me of the fact that Seattle is 
playing, tonight, baseball against the Cleveland Indians. The pitcher 
on the mound is a guy named Randy Johnson, who throws about a 95-mile-
an-hour fast ball. The Republicans are throwing a 95-mile-an-hour fast 
ball past the American people. They want this jammed through here so 
fast that nobody can really figure it out. That is 

[[Page H 10129]]
really what this is all about, only they do not understand it. The 
American people have seen that pitch before, and they are going to hang 
in there and clobber it. I hope the Cleveland Indians cannot clobber 
Randy Johnson tonight.
  Mr. SANDERS. I would remind the gentleman a couple of years ago we 
did a poll in the State of Vermont. We asked Vermonters if, given a 
choice between raising taxes on upper-income people or cutting 
Medicare, what would they prefer. Overwhelmingly, people said if the 
choice is cutting Medicare or raising taxes on upper-income folks, we 
should raise taxes on upper-income folks.
  What would be the poll results if we said should we lower taxes on 
the richest people in America and cut Medicare? I do not know of 5 
percent of the population who thinks that is a good idea. That is why 
they want to move this thing through the House so very fast.
  Mr. McDERMOTT. Absolutely. I thank the gentleman very much.

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