[Congressional Record Volume 141, Number 164 (Monday, October 23, 1995)]
[Senate]
[Pages S15486-S15487]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        MEDICARE BY THE NUMBERS

  Mr. PELL. Mr. President, the national debate over the future of the 
Medicare and Medicaid programs is not so much about objectives as it is 
about means. But it is the means that make all the difference.
  There clearly is widespread agreement that steps must be taken to 
restrain growth in Government spending for medical programs. But there 
is considerable disagreement about how to achieve this objective, how 
to distribute the impact of change, and about the timeframe in which 
all of this is to occur. In that connection, I join in expressing my 
distress about the course the congressional majority would have us 
take.
  I should say at the outset that I believe it is unfortunate that we 
are allowing arbitrary dollar limits to drive our consideration of 
essential social policy. We are seeking to evaluate fundamental human 
needs through the green eye shades of accountants.
  As I have stated on previous occasions, while I do share the view 
that Government spending should be curtailed where appropriate and that 
the deficit should be substantially reduced, I do not believe that this 
automatically translates into a cast-iron doctrine that the national 
budget must be in absolute balance by a time certain.
  In the case of the medical programs, it would have been far 
preferable, in my view, to have devised first a rational strategy for 
curtailing unreasonable growth in spending for these programs--while 
preserving their essential services--and then see how much savings 
could be dedicated to deficit reduction.
  But since the majority has committed us to a dollar-driven course of 
action, let's consider the figures.

[[Page S 15487]]

  In their quest to reach budget balance by the year 2002, the majority 
seeks to reduce Government spending by an arbitrary $894 billion over 
the 7-year period.
  Over half of the saving--and by far the largest single component--
would be $452 billion in reduced spending for the Federal medical 
programs: $270 billion would be realized from reduced spending on 
Medicare, and $182 billion from Medicaid.
  While protracted cutbacks may be needed to assure solvency over the 
long term, there simply does not seem to be justification for 
reductions of the proposed order of magnitude in the timeframe of the 
next 7 years.
  I found particularly persuasive in this regard the recent testimony 
of the Secretary of the Treasury, Robert Rubin. Speaking in his 
capacity as managing trustee of the Medicare hospital insurance trust 
fund, Mr. Rubin stated:

       Simply said, no member of the Senate should vote for $270 
     billion in Medicare cuts believing that reductions of this 
     size have been recommended by the Medicare Trustees or that 
     such reductions are needed now to prevent an imminent 
     funding crisis . . . Nonetheless, the Majority is asking 
     for $270 billion in Medicare cuts, almost three times what 
     is needed to guarantee the life of the Hospital Insurance 
     Trust fund for the next ten years.

  The Secretary went on to observe that the $270 billion in reduced 
Government spending would be accomplished in part by increasing costs 
to beneficiaries of the Medicare part B program, even though such 
increases do not contribute to the solvency of the Part A Hospital 
Trust Fund.
  ``In this context,'' Secretary Rubin stated, ``it is clear that more 
than $100 billion in Medicare funding reductions are being used to pay 
for other purposes--not to shore up the Hospital Insurance Trust 
Fund.''
  Secretary Rubin's testimony is disturbing because it validates the 
presumption that the proposed reductions in Medicare are being made for 
reasons not dictated by necessity, including the possibility that the 
amount of proposed reductions might have been inflated for the specific 
purpose of accommodating a tax cut.
  In that light we can only ask what manner of needless sacrifice, 
worth more than $100 billion, are we asking of our senior citizens. 
Will most of it be accounted for by the $71 billion in increased 
payments by beneficiaries? Or will it be attributed to the $73.6 
billion in reduced payments to hospitals, or the $22.6 billion 
reduction in the allowable fee schedule for physicians treating 
Medicare patients?
  It seems apparent to me that the majority has overreached and that a 
far more modest cutback of the Medicare Program would serve our 
purpose. Since Secretary Rubin says that more than $100 billion is 
being siphoned off for other purposes, this would suggest that the $270 
billion reduction proposed should be in the order of $150 billion at 
the most. And the reduction could be even less if we take appropriate 
steps to deal with the annual loss of $18 billion through waste, fraud, 
and abuse.
  With respect to Medicaid, I am very distressed that the majority 
proposal would dismantle a 30-year-old commitment to the poor and 
disabled, and transfer a less binding responsibility to the States.
  The result, it seems to me, can only be the creating of pockets of 
medical impoverishment between a few overburdened oases of generosity. 
Some States and regions simply will not be able to maintain the level 
of compassionate service on which their citizens have come to depend.
  My own State of Rhode Island is in this latter category, partly 
because it has a larger proportion of elderly people using nursing home 
facilities. I would point out that our Republican Governor, Lincoln 
Almond, has voiced his opposition to the block-grant formula as it was 
proposed in the House.
  Here, I would like to salute the efforts in the Finance Committee of 
my distinguished colleague, Senator Chafee, to modify the plan, 
particularly through restoring entitlement status to pregnant women, 
children under age 12, and the disabled. But notwithstanding these 
efforts, the basic proposal is still fatally flawed in my view.
  As one of the original advocates of the Federal medical programs, I 
regret exceedingly that we have come to this juncture when in the name 
of economy, the gains of decades of progress in social responsibility 
are being jettisoned or badly compromised. The proposals should not 
become law, and I applaud and support the President's announced 
determination to veto them if they reach his desk in their present 
form.

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