[Congressional Record Volume 141, Number 183 (Friday, November 17, 1995)]
[Senate]
[Pages S17315-S17330]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   THE 7-YEAR BALANCED BUDGET RECONCILIATION ACT OF 1995--CONFERENCE 
                                 REPORT

  The PRESIDING OFFICER. The Chair announces that the Senate has 
received the conference report from the House, and the clerk will now 
state the report.
  The assisted legislative clerk read as follows:

       The committee on conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     2491) to provide for reconciliation pursuant to section 105 
     of the concurrent resolution on the budget for fiscal year 
     1996, having met, after full and free conference, have agreed 
     to recommend and do recommend to their respective Houses this 
     report, signed by a majority of the conferees.

  Thereupon, the Senate proceeded to consider the conference report.
  (The conference report is printed in the House proceedings of the 
Record of November 16, 1995.)
  The PRESIDING OFFICER. The Senator from Nebraska.


                             point of order

  Mr. EXON. Mr. President, I raise a point of order that the sections 
designated on the list that I now send to the desk violate the Byrd 
rule, sections 313(b)(1)(A) and (D) of the Congressional Budget Act.
  The list follows:

                                       EXTRANEOUS PROVISIONS IN H.R. 2491                                       
----------------------------------------------------------------------------------------------------------------
         Subtitle and section                  Subject            Budget act violation         Explanation      
----------------------------------------------------------------------------------------------------------------
Subtitle M Sec. 13301................  Exemption of physician   313(b)(1)(A)...........  No deficit impact      
                                        office laboratories.                                                    
Sec. 1853(f) of the Social Security    Application of           313(b)(1)(A)...........  No deficit impact      
 Act as added by Section 8001 of the    antitrust rule of       313(b)(1)(D)...........  Merely incidental      
 bill.                                  reason to provider-                                                     
                                        sponsored organization.                                                 
----------------------------------------------------------------------------------------------------------------

  Mr. ABRAHAM. Mr. President, pursuant to section 904 of the 
Congressional Budget Act, I move to waive the point of order for 
consideration of the antitrust provisions that have been raised in this 
point of order.
  The PRESIDING OFFICER. Under the Budget Act, there is now debate on 
the motion. Who yields time? The Senator from New Mexico.
  Mr. DOMENICI. On behalf of the majority leader, I ask unanimous 
consent 

[[Page S 17316]]
that at 8:15, the Senate proceed to a vote on the motion to waive, 
without any further action or debate, and that the time be equally 
divided between now and 8:15 between the proponents of the point of 
order and the proponents of the waiver.
  The PRESIDING OFFICER. Is there objection?
  Mr. KYL. I object.
  Mr. BRADLEY. Reserving the right to object.
  The PRESIDING OFFICER. Objection has been heard. Who yields time?
  Mr. KYL. If the Senator from New Jersey wishes to speak, I will 
reserve the right, but I intend to object until Senator Hatch arrives.
  The PRESIDING OFFICER. There is an hour for debate. Who yields time?
  Mr. EXON. Mr. President, was there an objection?
  The PRESIDING OFFICER. The Chair heard an objection from the Senator 
from Arizona.
  Mr. DOMENICI. Mr. President, I would like to assign, from the 
standpoint of the majority, the privilege of debating the opposition to 
the point of order to be led by Senator Kyl, and he can direct the time 
to whomever he desires in reference to our time on this side. If he 
will reserve me a minute or two, I would like to join him in the 
argument.
  Mr. BUMPERS. Parliamentary inquiry.
  The PRESIDING OFFICER. Who yields time?
  Mr. EXON. He has requested a parliamentary inquiry, which I do not 
think requires a yielding of time.
  Mr. BUMPERS. Parliamentary inquiry. Is this a point of order? Are we 
going to be voting on a motion to waive the point of order and will 
that require 60 votes, Mr. President?
  The PRESIDING OFFICER. The vote does require 60 votes. Who yields 
time?
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Mr. President, I yield myself 5 minutes off the time that I 
have under my control, and will the Chair advise me how much time the 
Senator from Nebraska controls?
  The PRESIDING OFFICER. The Senator from Nebraska controls 30 minutes.
  Mr. EXON. Mr. President, I have been fascinated and horrified by the 
press reports about the horse trading that went on to win the support 
for the Republican budget. I am not speaking about wooing recalcitrant 
Republicans who strayed from the party line. No, I am looking at some 
of the sweeteners that were loaded into this bill to keep the medical 
establishment at bay and to pay the American Medical Association for 
their support of the Republican budget.
  This conference report is groaning with extraneous giveaways to the 
medical establishment. They do not only violate the Byrd rule, but they 
violate every sense of decency and fair play. The conference report 
exempts physicians' offices and laboratories from the Clinical 
Laboratory and Improvement Act of 1988.
  It is clear that this is a violation of the Budget Act. It is 
extraneous, in addition to being bad policy. Antitrust regulations are 
turned on their heads in this conference report just to boost 
physicians' salaries. The conference report exempts certain groups of 
health care providers from the most basic antitrust violations against 
price fixing. This is also a violation of the Budget Act and is likely 
to impair competition and raise costs for non-Medicare health care 
purchasers.
  It is appalling that when our seniors, our poor, our disabled, and 
our children are being asked to sacrifice basic health care, the 
Republicans are trying to enlarge special interest giveaways to the 
Nation's physicians.
  The provisions do not belong in this fast-track reconciliation bill 
and are a violation of the Byrd rule. I urge my colleagues to vote 
against the motion to waive this well-founded point of order.
  Madam President, at this time, I ask for the yeas and nays.
  The PRESIDING OFFICER (Mrs. Hutchison). Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. EXON. Madam President, I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. EXON. Madam President, since there are no other Members seeking 
recognition at this time, I yield 5 minutes of my time to the Senator 
from Arkansas.
  The PRESIDING OFFICER. The Senator from Arkansas is recognized for 5 
minutes.
  Mr. BUMPERS. Madam President, it is not unusual when I go home and 
visit with some of my wealthy friends--and I do have some wealthy 
friends--they say, ``The only objection I have to you Democrats is you 
are constantly engaging in class warfare. You are always talking about 
the wealthy.''
  I repudiate that idea, but I would like for my colleagues to look at 
this chart for just a minute. This is a quote from David Gergen--one of 
Ronald Reagan's right-hand men when he was President--from an op-ed 
piece that he wrote in this week's U.S. News and World Report. Without 
straining your eyes, I will tell you what he said about this bill we 
are debating tonight. Eighty percent of the tax breaks in this bill go 
to the wealthiest 20 percent of Americans. Eighty percent of the 
spending cut burden goes to the poorest 20 percent. Now, you talk about 
class warfare. There is class warfare. It violates every principle I 
ever learned as a Methodist Sunday school boy. It violates every 
principle I have ever held dear, and the very reason I came to the U.S. 
Senate. Madam President, let me say something about the wealthy people 
of this country. They do not like this. Seventy percent of the people 
of this country say they do not want a tax cut until the budget is 
balanced. Why are we going against what 70 percent of the people say?
  Last fall, when people were voting, Madam President, most did not 
have a clue what was in the Contract With America. And I can assure you 
they were not voting for this. They were not voting to penalize the 
poorest 20 percent of the people in America. They were not in favor of 
depriving a million children in this country of an education. They were 
not voting to put another million people in poverty, which this bill 
does. They were not voting to cut school lunches, which is the only 
decent meal an awful lot of children in this country get. They were not 
voting to savage Medicare and make the elderly people of this country 
pay it. They were not voting to savage Medicaid. In my State, Medicaid 
will be cut 33 percent, Madam President. We will not have a Medicaid 
program.
  The people of America were not voting to slash the Earned Income Tax 
Credit for people who are trying to work and stay off welfare. What are 
we doing? We are cutting that $32 billion.
  So I remind my colleagues on the other side of the aisle, when the 
American family gathers around the dinner table in the evening, what do 
they talk about? What do they say they love? Not the Mercedes in the 
driveway. Not that posh office downtown or that magnificent farm out 
back. They love their children. That is who they want us to protect. 
What are we doing? We are savaging the children of this country. For 
what? So that the biggest corporations in America get a break. I yield 
the floor.
  Mr. HATCH. Madam President, we are trying to accommodate Members 
around here. And there is no use kidding, I am very upset about this 
point of order. This is not going to be the last time we mention it 
either. But I want to accommodate everybody around here. We ought to 
have at least a 2-hour debate on the thing because it is not easy to 
explain, but it is easy to understand. I have to tell you that I think 
even my colleagues on the other side might understand. But the fact of 
the matter is that this point of order is wrong. I personally feel very 
badly about it because what we are doing here is we are allowing the 
rule of reason in some areas and not allowing it in others. It is very 
unfair, it does not work right. We are happy to enhance bureaucracy but 
we are not happy to enhance individuality. I think we can clarify it 
for anybody in just a few minutes. But we want to accommodate those who 
want to get out of here and, frankly, I think we can put a lot of what 
we have to say into the Record.
  Let me address this point of order against antitrust rules relating 
to provider-sponsored organizations--PSO's, if you will--and health 
care groups 

[[Page S 17317]]
that contract with them to provide Medicare services. These provisions 
would grant antitrust relief to these two different entities by 
subjecting their conduct to the rule of reason, rather than the per se 
illegal rule.
  Let me be clear about what this language would do. This is not an 
antitrust exemption. Under the rule of reason, the conduct of the PSO's 
and their subcontracting health care groups will not be legal if it is 
designed to fix prices, divide markets, or exclude competitors. 
Instead, their conduct will be illegal if it is anticompetitive, but if 
it is competitive, leads to efficiency, and produces lower prices for 
health care, it will survive antitrust challenge, as it should.
  This provision that we are about to strike out of here is one of the 
few that really saves an awful lot of money in health care and flies in 
the face of bureaucratizing the process, which I thought we defeated 
last year. We believe that this reform--which is necessary only because 
the Department of Justice and the Federal Trade Commission have 
overzealously enforced the antitrust laws--is central to the savings we 
anticipate in our Medicare reforms. Right now, because of these 
enforcement policies, groups of doctors cannot form, decide on a fee 
schedule, and negotiate with anyone over providing health care 
services, if this is knocked out. This knocks out of the market a 
potentially new class of competitors with low overhead and little or no 
bureaucracy, who can make these other groups bring prices down.
  The Congressional Budget Office scored the savings to be generated by 
the House and Senate Medicare reform bills at between $34.2 billion and 
$50.4 billion over 7 years.
  CBO did not break out how much of this savings was attributable to 
the creation of health care provider groups that could contract with 
PSO's, and the importance of the antitrust reform needed to encourage 
the groups to form. The CBO noted the creation of PSO's in these groups 
would have an impact on Medicare outlays and that is all that is needed 
to meet the express language of the Byrd rule.
  Further, since this bill is creating two whole new classes of 
competitors in the Medicare market, and the antitrust provisions are 
critical to encouraging their formation, it is clear that these 
provisions are critical to producing the billions of dollars in savings 
we are counting on for innovation and competition. I do not think that 
anyone can seriously contend that these provisions have no budgetary 
impact.
  The second argument that one might raise against these provisions is 
that they are somehow incidental to reconciliation. This aspect of the 
Byrd rule is designed to prevent the addition of provisions that have 
nothing to do with the budget. The antitrust provisions clearly satisfy 
the Byrd rule. The rule has nothing to do with the larger changes in 
all antitrust law.
  In fact, it does not change antitrust law at all, only the 
administration's enforcement. More importantly, the antitrust 
provisions are expressly limited only to conduct that is necessary to 
provide health care services under Medicare contract or plan. It has no 
application outside of the Medicare context, and any attempt to use 
information gained in Medicare context beyond the limits of that 
program--what some people call a leakage or seepage problem--would be 
illegal. Any conduct occurring in the Medicare context that is just a 
sham for price fixing or boycotting would still be illegal under the 
rule of reason.
  I suggest that those who would use the Byrd rule to stop these 
provisions are not concerned, Madam President, about budgetary impact 
or incidental provisions. Instead, they are interested in suppressing 
competition in the health care market and reducing Medicare costs.
  We should be frank. The status quo helps large hospitals and 
insurance companies and HMO's. These antitrust provisions that are in 
this bill that they are trying to rule out of order may cut down on 
their profit margins by introducing whole new classes of health care 
providers into the marketplace. New market actors will spur competition 
efficiency and lower costs.
  When we are fighting to find ways to reduce Government costs and the 
Government's tax burden, why turn away an attractive mechanism to make 
the markets work better and to reduce the budget?

  The fact is per se illegal activity will still be illegal. These 
entities would have to live within the rule of reason. If they do not 
and they do not increase competition, increase efficiency, and reduce 
costs, then they are not going to be able to function, and they should 
not be.
  The fact of the matter is that this point of order is wrong, and I 
hope that we will vote to waive the point of order.
  Mr. EXON. Mr. President, I yield 3 minutes to the Senator from 
Florida.
  Mr. GRAHAM. Thank you, Madam President.
  As I read the front cover of the document which has just been 
presented to us, Balanced Budget Act of 1995, Part 1 of 2--Part 2 
apparently has not yet arrived--the question arises, why will I vote 
against this proposition?
  It is not, Madam President, because I am opposed to a balanced 
budget. I am, in fact, strongly supportive of a balanced budget, and 
every occasion I have had an opportunity to advance that cause I have 
done so.
  I frankly commend the Republicans for having presented us an 
alternative which purports to achieve that goal of balanced budget 
because it will provide a significant point of debate and dialog as to 
how to achieve that goal.
  However, Madam President, I do not feel that this legislation 
presented tonight will accomplish the objective of balanced budget for 
two primary reasons. One, just as in foreign policy, I do not believe 
this Nation can achieve an important long-term domestic policy goal 
unless that goal is broadly shared, unless there is bipartisan support.
  The fact is, there is no bipartisan support for this provision. There 
has been no attempt to secure bipartisan support. No Democrats were 
sanctioned into the conferences which led to the production of this 
legislation. No Democratic ideas were solicited for inclusion.
  Second, this will not achieve the goal of a balanced budget over the 
next 7 years because it is fundamentally unfair and will soon be seen 
to be unfair by the American people and rejected.
  I am going to concentrate my comments on fairness on only one section 
of this multihundred-page bill, Part 1 of 2, goes to 966 pages. That is 
the sections that relate to Medicaid.
  First, the statement is made that this legislation reduces Medicaid 
spending by $163 billion over the next 7 years. Madam President, that 
is not true. In fact, this legislation reduces Medicaid spending by 
almost $400 billion over the next 7 years.
  What is the difference? The difference is because this legislation 
removes virtually all of the current requirements on States to make a 
significant contribution towards the health of their poor, their 
disabled and their frail elderly.
  Second, this allows for future manipulation of the Medicaid Program. 
We worked hard in this Senate to eliminate the abuses that had become 
so rampant in the disproportionate share hospital program. This 
legislation allows all those abuses to return. This legislation, in 
fact, rewards those very States that have been the principal abusers of 
the disproportionate share program.
  Madam President, for those and many other reasons that we will find 
in these 966 pages, this proposal fails to meet the duel test of 
bipartisanship and fairness necessary for its sustained achievement of 
the goal of the balanced budget.
  Madam President, we are here debating a bill that nobody has 
received. Even for those who may have a copy, it would be impossible 
for them to have possibly read the legislation from cover to cover.
  And yet, this is one of the most significant bills to come before the 
Congress. This is a bill that makes up to $1 trillion in reductions to 
our Nation's budget--including $256 billion in Medicare reductions and 
$163.5 billion in Medicaid reductions--over the next 7 years.
  I rise today to speak to the best of my knowledge about some of the 
provisions in this bill. Of course, the ``best of my knowledge'' is 
limited by the amount of information we have managed to obtain, some of 
which our office has had to get from lobbyists who always seem to get 
such materials before the rest of the Congress.

[[Page S 17318]]

  Due to time limitations, I will focus on the massive reductions or 
$420 billion in Federal cuts that will be made in this bill to our 
Nation's Medicare and Medicaid programs which are integral parts of our 
Nation's health infrastructure.


       medicaid cuts even higher due to state-federal combination

  The first point that has been neglected about this budget deal are 
that the real Medicaid reductions are more in the neighborhood of $400 
billion over the next 7 years. Part of this figure comes from the 
$163.5 billion in Federal reductions to Medicaid. However, an often 
overlooked but just as significant provision is the language in the 
bill that guts the matching rate requirements of States.
  This reduction will have the effect of reducing another $200-plus 
billion in State funding over the next 7 years to the Medicaid program.
  How does this work? At present, States such as New York have to match 
a Federal Medicaid dollar with a State Medicaid dollar. No longer. 
According to the revised State matching requirements, New York would be 
allowed to match a Federal Medicaid dollar with just 67 cents--a 33-
percent reduction.
  The effect of the change to the matching rates across the Nation will 
be a $200-plus billion reduction in State funding to Medicaid.
  Moreover, the conference agreement eliminates two provisions in the 
Senate bill that were agreed to unanimously in the Senate Finance 
Committee. These amendments would have continued to prohibit the gaming 
of the Medicaid System through the use of provider taxes and prohibited 
States from supplanting current State health expenditures with Medicaid 
dollars.
  The conference committee agreement encourages States to go back to 
the days of fictitious accounting and gaming that in the past 
effectively raided the Medicaid Program.
  The effect of this policy under a block grant is not to raid the 
Federal treasury but to make the State matching rate illusory at best. 
In fact, the conference report effectively makes Medicaid a general 
revenue sharing program.
  It is no wonder that some of our Nation's Governors are clamoring and 
cheerleading the destruction of the Medicaid Program. I have a warning 
for them, or more accurately, a proverb for them. The proverb goes as 
follows: ``Fish see the worm not the hook.''
  The Governors who are anxious to gobble up these block grants and 
illusory matching rates will feel took in the future when their 
economies stumble, when an epidemic strikes, when a nature disaster 
hits, when inflation creeps up again, or when their populations grow.


                  Nation's Low-Income Elderly At Risk

  Another often misunderstood provision of this legislation is the 
impact that it will have on our Nation's low-income elderly.
  Let me emphasize that the Republican bill repeals the current law 
guarantee of payment of the Medicare Part B premiums on behalf of 
elderly Americans with income below the poverty level--$622 per month 
for an individual.
  Although the Speaker of the House claims the bill ``provides that 
senior citizens at the poverty level and below have all of their Part B 
premium paid for by the taxpayers--100 percent,'' the fact is that, no 
poor senior citizen has a guarantee to any coverage or assistance 
whatsoever.
  States would be asked to set aside a certain percentage of their 
program spending each year to pay for Medicare premiums, deductibles, 
and coinsurance on behalf of low-income elderly. However, this set-
aside will be sufficient to cover only about 44 percent of the costs of 
Part B premiums for those now eligible by the year 2002.


                  Nursing Home--Liens of Family Homes

  Another provision that was unanimously agreed to in the Senate 
Finance Committee was a provision that protected spouses having liens 
placed against their home or family farm. Incredibly, this provision 
was also dropped by the conference committee.
  As a result, the conference agreement repeals current law protections 
against the use of liens and expressly authorizes States to impose 
liens on the home or family farm of a beneficiary, even when the spouse 
is still living in it.


                unfairness of medicaid cuts and formula

  Finally, I want to raise some policy questions that the bill creates. 
First what is the policy justification for $163.5 billion in Medicaid 
reductions? This provides for just a 1.9 percent increase in Medicaid 
spending per person over the seven year period and is far less than the 
7.1 percent the Congressional Budget Office projects private sector 
spending to increase.
  Second, what is the policy justification for arriving at the Medicaid 
formula in the bill? Can anybody possibly explain how the fiscal year 
1996 State-by-State allocations are arrived at? Dollar figures are 
stated in law. How were those numbers arrived at?
  Clearly, one impact is to reward those States that have extremely 
high share of disproportionate share in the past. Some of those States 
abused the Medicaid Program and will be rewarded for that abuse in the 
new Medicaid formula.
  At one point, the Senate Finance Committee staff had proposed that 
States with excessive disproportionate share payments would lose those 
excess payments. The Senate Finance Committee voted to cap those 
payments at 12 percent.
  That provision was deleted, and instead, States are now rewarded for 
their excesses and--in some cases--their abuse.
  These States will have those funds permanently cemented in their base 
allocation and allowed to increase them well into the future. What is 
the policy rationale for this?
  Whatever the rationale, the effect is to apportion funding in a 
manner that is fundamentally unfair to those States that did not scam 
the Medicaid disproportionate share program, those States that are 
growing and those States that have been efficient in the past.
  In Florida's case, we have a larger population than either 
Pennsylvania and Ohio and an elderly population that is 40.7 percent 
greater than Pennsylvania and 79.2 percent greater than Ohio, yet will 
receive less money over the next 7 years from Medicaid than either of 
those two States.
  Florida has 5.4 percent of the Nation's population, 8 percent of the 
Nation's elderly population but will receive just 4.2 percent of the 
overall Federal Medicaid allocation between fiscal year 1996 and 2002.
  If Florida were to just receive its population share of money, it 
would receive $42.7 billion instead of the $33.0 billion allowed in 
this bill, a $9.7 billion disparity or loss to Florida over the 7-year 
period.


                             other problems

  For all these reasons and for numerous others--such as the conference 
committee's level of Medicare cuts on our Nation's elderly and the 
danger and exposure that Medicare beneficiaries will be subjected to 
due to watered down emergency care managed care standards, I cannot and 
will not support this legislation.
  I would like to turn the Senate's attention from Medicaid and 
Medicare for a moment to another important issue before the Senate 
tonight.
  Madam President, when the Senate votes on the reconciliation bill 
shortly, there will be one important issue which risks being lost in 
the enormity of the Medicare cutting, Medicaid gutting, tax cutting, 
and budget balancing package.
  That issue is welfare reform.
  The effrontery of burying such a monumentally important matter in the 
middle of a massive Medicare, Medicaid, Tax Code, and budget overhaul 
speaks for itself.
  The welfare reform component of this reconciliation bill deserves 
strict scrutiny instead of token consideration.
  My support for sweeping change in our Nation's welfare system is a 
matter of record, and as recently as September 19, 1995, I joined with 
86 of my colleagues in supporting the Work Opportunity Act of 1995, 
Senate bill 1120.
  I voted in support of this bill, even though I had serious 
reservations, in order to keep the welfare reform effort in this 
Congress alive.
  Unfortunately, the conference agreement moves welfare reform in the 
opposite direction. The pending legislation is worse than what we had 
to consider 2 months ago.
  Madam President, I support welfare reform. I want to see Congress 
pass a welfare reform measure, and I want to 

[[Page S 17319]]
see the President sign welfare reform legislation. But this bill 
deserves neither.
  Welfare reform, when it is done well, works and works well.
  Florida boasts of two very successful welfare pilot projects, the 
largest in America in instituting a ``time limited benefit.'' Florida, 
in fact, has been one of the pioneers in the ``two years and you are 
out'' approach that is mirrored in the pending legislation.
  But, Madam President, these pilots are succeeding because there is a 
front-end investment in the lives of those affected by the program 
change.
  Whether it is day care, job training, temporary transportation 
assistance, or health care, the welfare recipient is given a hand up 
instead of a hand out.
  I visited the program in Pensacola, FL. Earlier this year President 
Clinton met some of the participants that I met, and he touted the 
program.
  Madam President, the conference agreement before the Senate, as it 
pertains to welfare reform, is a mixture of good news and bad news.
  The good news is that the conference agreement no longer treat 
education as welfare. We have Congressman Clay Shaw and others to thank 
for that improvement.
  Thankfully, the welfare reform legislation no longer kicks legal 
immigrants who pay taxes and are eligible for Federal student loans or 
grants, out of school.
  This change assures 21,000 students in universities, colleges, and 
community colleges in Florida that they can continue to study and train 
in order to provide for their families and enhance our Nation's 
productivity.
  Further, the conference agreement renounces the previous position of 
the Senate where deeming would occur past the date of citizenship. That 
provision appeared unconstitutional on its face, and fortunately, it 
was dropped.
  But, Madam President, I am sorry to report that there is an 
overwhelming amount of bad news emerging from the conference on welfare 
reform.
  First, the formula to allocate funds to the States continues welfare 
as we knew it. It treats poor children differently, depending upon 
which State they live in.

  The conference formula says that if your State spent a lot in the old 
days, and thus built incentives to keep people on welfare, you will be 
given a leg up on every other State under block grants.
  That is how it is possible, for example, that the State of Michigan 
would be given $217 million more, each year, than the State of Florida, 
which has a population that is 4.5 million greater than Michigan's 
population.
  The conclusion is simple: the formula adopted by the conferees is 
flawed, if not rigged.
  The conferees had an option: adopt a fair share allocation which 
treats children the same regardless of their ZIP codes. I offered such 
an amendment 2 months ago.
  Instead, the conferees chose to reward the big spenders who got us in 
this mess in the first place.
  If parents rewarded bad behavior of their children like this, we 
would be a nation of reform schools.
  Madam President, another glaring disappointment in the conference 
agreement before the Senate is the retreat on a commitment to funding 
child care.
  The Senate voted for a $3 billion increase over 5 years and now we 
see that the conference agreement proposes $3 billion over 7 years.
  That may sound like an innocuous accounting change until you look at 
the impact on the States.
  That change means for Florida less child care money next year, I 
repeat, less money next year, than it had this year.
  Keep in mind that Florida is expected to more than double in one year 
its population of welfare recipients in the work force.
  The conference agreement short-changes Florida $18 million in child 
care funds from the amount that passed the Senate in September. That is 
movement backward, not forward.
  When you take the faulty funding formula for the block grants, and 
combine them with the paltry child care allocations, you get the 
growing sense that Florida has been set up to fail.
  Madam President, it did not have to be this way. If government were 
run like a business, you would have had by now a debate about a 
business plan.
  In effect, you would have identified outcomes to be achieved, and 
then identified the means necessary to achieve those outcomes.
  Just in the area of child care alone, in order to meet the job 
requirements of the conference agreement for the first 5 years after 
enactment, Florida would need approximately $800 million in child care 
funding. The conference agreement gives Florida $509 million.
  That $291 million shortfall means that tens of thousands of children 
can not get child care, and therefore, their mothers or fathers can't 
go to work.
  But the Congress wasn't interested in outcome and resource analysis. 
The Congress didn't want to do a business plan.
  The Congress wanted to cut tens of billions of dollars out of welfare 
and shift those burdens to the States.
  I will highlight a few more disappointments.
  The Senate placed $878 million in a growth fund to assist States 
which experience caseload increases, and thus, cost increases. The 
conference agreement reduces that about 10 percent.
  I mentioned earlier that there was good news in the conference 
agreement as it pertains to legal immigrants and access to Federal 
assistance to higher educational programs.
  But even that good news has a new catch. The conferees have set up a 
new class system now in the Stafford loans program. Now legal immigrant 
applicants must have a sponsor or other citizen cosign the loans.

  No debate on this change. No hearings. A brand new provision written 
in conference.
  So I am left to believe that the conferees felt that only the better 
off of the legal immigrant communities are eligible for a Federal loan 
program, even though they all pay taxes like citizens pay taxes. So 
much for the American dream.
  The city of Miami had more legal immigrants admitted last year than 
20 States combined did. Thus the prohibitions and timetables on certain 
benefits will shift to Miami costs that once were shared or born by the 
Federal Government.
  The State of Florida does not set immigration policy. The State of 
Florida did not negotiate a 20,000 legal immigrants per year agreement 
between Cuba and the United States.
  But the State of Florida is now being told the following: first, we 
are going to cheat you on the block grant, and give States like New 
York more than four times what you get.
  Second, we are going to cut child care for your State, and leave you 
$300 million below what you need to achieve the work participation 
rates that we intend to grade you on.
  Finally, we are going to stick you with hundreds of millions of 
dollars in costs for legal and illegal immigration, even though you 
have no control over those policies.
  How is that for fairness? How is that for reasonableness?
  Madam President, I am disappointed with the direction the welfare 
reform measure went after it left the Senate. It has taken a turn for 
the worse. For the State of Florida, a State which did not have a high 
welfare benefit check and thus did not contribute as greatly to the 
welfare culture as those States who now reap windfalls for having 
created the problem, the conference agreement is not acceptable.
  I urge the President to veto this bill and for both sides to begin to 
work together immediately toward reaching a consensus plan on balancing 
the Nation's budget. There is another way.
  Mr. KYL. Madam President, let me get back to the issue before us, 
which is the objection to the point of order that has been made to 
certain provisions of this bill.
  Madam President, we ought not to waive this provision. We should not 
have to waive the provision because there is nothing violative of the 
Byrd rule in the antitrust provisions of the Medicare part of the 
Balanced Budget Act of 1995.
  Let me go back a little bit to set the stage here. The whole theory 
of our Medicare reform, how we are beginning to strengthen Medicare and 
save it from bankruptcy, is to create more choices in the marketplace 
so that competition will drive costs down while also ensuring quality 
of care.
  Now, in order to create those choices, we allowed for the creation of 
a couple 

[[Page S 17320]]
of new products in this legislation. One of the products is the medical 
savings account whereby people would have an incentive not to spend all 
of the deductible amount that they did not have to spend, and we 
provided that tax free.
  As a result of a Byrd problem on that provision, the inside buildup--
that is to say, the part that you do not spend--is now going to be 
taxed.
  One of the products is not going to be nearly as attractive as it was 
when we wrote our bill.
  The other new product is the hospital and physician organization, a 
new type of entity, somewhat similar to an HMO, but not really the same 
because here instead of having an insurance company or some kind of 
administrative organization that runs the whole program you simply have 
physicians and hospitals in a community getting together to offer their 
services on a capitated basis for the people who would be eligible for 
Medicare benefits.
  It is believed the creation of these organizations by cutting out the 
middleman and creating a new product would, in fact, create that kind 
of choice and therefore the competition in the marketplace would cause 
costs to be reduced.
  The two products, together, along with existing Medicare and the HMO 
option that currently exists would therefore create lower costs, thus 
allowing us to save the $270 billion over the 7 years that is needed in 
order to prevent the bankruptcy of the system.
  Madam President, as I said, the medical savings account part of this 
is now jeopardized because of the Byrd rule. If we also cripple the 
physician-hospital organizations because of the Byrd rule, we will have 
largely failed to create the two new products and therefore the 
competition, the choice, and the competition in this, and I fear, Madam 
President, that our entire Medicare reform will fail. And the 
commitment that we have made to our seniors, as a result of the 
Democrats raising the objection here, will cause our Medicare reform to 
fail.

  Madam President, I will say this as clearly as I can. If and when 
that happens, the American people, and in particular the seniors of 
this country, ought to know precisely where the blame lies. Because we 
have an opportunity this evening to save the Medicare system. But if 
people do not vote down this point of order, it is in serious jeopardy 
of going bankrupt because our system will not have within it the two 
key products that would be created to create this competition and 
choice.
  What exactly happens here? Why are we so concerned about this? For 
the doctors and the hospitals to get together to create this kind of 
organization, they have to talk to each other and they have to talk 
about prices and how they are going to treat patients. When that 
happens, lawyers are going to say, you are violating the antitrust 
laws. Under a per se rule, which means ``in and of itself,'' that would 
be true. The mere fact that you sit down and talk about it violates the 
law.
  So we have said in here, let us substitute the rule of reason, a rule 
of antitrust law that says we will consider it under the circumstances. 
If what they did is really wrong and violative of the antitrust laws, 
then we are still going to prosecute them. But if, under the 
circumstances of creating this new product, and only for the purpose of 
contracting with Medicare, they get together and talk about these 
things, things such as prices, then it would be OK. But the Justice 
Department, FTC, still would look at this under a rule of reason, as 
Senator Hatch pointed out.
  There are two main points, and this is what I will close on. The CBO 
allegedly has not scored this--excuse me, has said it would have no 
budgetary effect. That is not true. The CBO has never said that, so 
that basis for a parliamentary ruling would simply be in error. Quite 
the opposite is true with respect to the physician-hospital networks.
  Second, the conclusion is that the antitrust provisions are merely 
incidental. In this regard, two contradictory arguments are made. One, 
that this is such a big deal that all kinds of doctors are going to get 
together and fix prices and it is going to affect the market far beyond 
the Medicare market. The other is that it is merely incidental.
  Both cannot be true. The fact of the matter is, the antitrust 
provisions are critical to the creation of this product. It is going to 
be very hard for them to work without the antitrust exemption. So it is 
not merely incidental. It is there for the sole purpose of enabling 
these organizations to operate.
  If they cannot operate, then the cost savings are not there because 
they cannot compete in the marketplace, and our system is destined to 
fail. It is only for Medicare contracts.
  Madam President, I will conclude it this way. If this provision comes 
out, if these antitrust modifications, just to the rule of reason, come 
out of the bill, then I am going to predict that this could easily 
fail. If it does, the people who vote against this this evening are the 
ones who should be held responsible.
  I hope that Democrats and Republicans alike will join us in defeating 
this objection and in sustaining the waiver to the budget point of 
order.
  Ms. MIKULSKI. Mr. President, I rise to support Senator Exxon's Point 
of Order that the Clinical Laboratory Improvement Amendments [CLIA] 
repealed in this budget reconciliation bill violates the Byrd Rule.
  The Senate Parliamentarian has ruled that repealing CLIA violates the 
Byrd Rule because it produces changes or outlays that are merely 
incidental to the nonbudgetary components of the provision. That is a 
violation of the Byrd Rule.
  Let me explain briefly to my colleagues what CLIA is, and why it is 
so important to me and to millions of Americans.
  CLIA `88 set for the first time uniform quality standards for all 
clinical labs. I am proud that this law, which I authored, was passed 
with broad bipartisan support.
  CLIA was passed in 1988 and implemented in 1992 to address serious 
and life-threatening conditions in clinical labs.
  To now even suggest we turn back the clock to pre-1988 will have 
devastating results. Do we really want to:
  Turn back to a time when tests were misread and diseases 
misdiagnosed.
  Turn back to the bad old days of misdiagnosis of the HIV/AIDS virus.
  When doctors were using inferior methods of reading slides.
  When people with the virus went undetected because the virus was 
mutating and was recognized by physicians.
  Or turn back to a time when the lab technicians were overworked and 
undersupervised.
  When slides were taken home.
  When dirty labs were tolerated.
  When lab technicians had little or no formal training, resulting in 
many diseases going undetected.
  My colleagues, CLIA works, CLIA saves lives. Reconciliation is not 
the place to make such changes. I urge you to sustain this point of 
order.
  Mr. BIDEN. Mr. President, we are being asked to vote on the antitrust 
provisions of this conference report. As I understand it, these 
provisions would allow doctors to form Medicare provider networks--
similar to existing managed care networks that are run by insurance 
companies--without running afoul of the per se standards of anti-trust 
law.
  This provision violates the Byrd law. It is extraneous. It has no 
effect on the deficit, and therefore it does not belong in the budget 
reconciliation bill.
  Furthermore, Madam President, this issue has just now been brought 
before the Senate. There was no similar provision in the Senate version 
of the reconciliation bill. There have not been hearings before the 
Judiciary Committee. And, we have not had a chance to examine the 
effects of this change in anti-trust law.
  But, let me say that as ranking member of the Judiciary Committee, I 
would be happy to give this matter full consideration. We should find 
out whether the change proposed here would really create more 
competition in the health care sector of the economy--and we should 
examine whether this would be a benefit to rural areas of the country.
  And, frankly, in this new health care climate, with the emphasis on 
big insurance companies running managed care plans like HMO's, doctors 
need some protection. I have told physicians in Delaware that I am 
willing to help find ways to ensure that doctors can be doctors. I 
think that if doctors ran the managed care networks, we might all be 
better off. If that means that we 

[[Page S 17321]]
must provide anti-trust relief, then I am willing to look closely at 
it.
  But, I cannot support doing it here--doing it now--on a bill that is 
supposed to reduce the deficit. Therefore, I will support stripping 
this provision from the bill, and I will vote against the motion to 
waive the rules for physician anti-trust relief.
  I hope, however, that we will look at this more closely, in a more 
rational way, on another day.
  Mr. EXON. I yield 8 minutes to the Senator from Vermont.
  Mr. LEAHY. Madam President, the argument we have heard, 
unfortunately, is somewhat like the trial in ``Alice in Wonderland.'' 
First you have the sentence and then you have the trial afterward. In 
this case--and this shows the very reason for the Byrd rule--we have 
special antitrust rules that are embedded in the reconciliation bill on 
behalf of the doctors' lobby. They are significant matters. They 
propose changes in antitrust law, in the policy that competition 
provides the best protection for consumers. I have said when you have 
the sentence first and you have the trial after: You would think that 
if you were going to make these major antitrust rules changes--I do not 
know, Madam President, if I am disturbing this conversation in front of 
me or not.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. LEAHY. It is a fascinating conversation, and I will probably 
pause long enough to listen to it myself.
  The PRESIDING OFFICER. If the Senators will come to order, so we can 
hear the Senator from Vermont.
  Mr. LEAHY. As I was saying, we are being required to make these major 
antitrust changes without any proceedings, hearings or debate. We are 
being required to do it without any vote. All we hear from is, 
apparently, the back room somewhere. Here some highly-paid lobby comes 
in and says, ``Whisper, whisper, whisper,'' and what comes out of that? 
We end up with a special provision in a budget reconciliation bill. We 
have a reconciliation bill and tucked in there are major changes in the 
antitrust law.
  Mr. KYL. Will the Senator yield a moment?
  Mr. LEAHY. I tried not to interrupt the Senator from Arizona before. 
Let me finish, and then I will be happy to yield for a question.
  Mr. KYL. Thank you.
  Mr. LEAHY. The Senate budget reconciliation bill that the Senate 
passed contained no such provision of which I am aware. The House 
originally had two. Then they end up with one. An unnecessary and 
dangerous antitrust law change is in the conference report on budget 
reconciliation.
  Again, I do not know where it came from. It did not come from 
hearings or debate, and it certainly did not come from any votes on the 
Senate floor. I am not aware that it came from any votes on the House 
floor.
  Yet in proposed new subsection (f), of proposed new section 1853 to 
the Social Security Act, as contained in section 8001 of title 8 of the 
Budget Reconciliation Conference Report, in a special antitrust rule 
and change in our antitrust policy.
  What it does is this: It exempts certain groups of doctors and other 
health care providers from the so-called per se rule against price 
fixing in our antitrust laws.
  The conference report does omit the heading ``Special Antitrust Rule 
For Provider Service Networks''--originally the House-passed bill 
actually had a heading and flagged the change --they took the heading 
out, but they left a rewrite of the section in. Maybe because this 
reconciliation bill is so long and filled with so many special interest 
gimmicks and gimmies and giveaways, maybe they thought that if you take 
the headings off, people will not know they are there. But it is still 
there as a subsection.
  It attempts to enact a special antitrust rule for groups of health 
care providers. It provides that the conduct of members of a group of 
health care providers, such as doctors, in ``negotiating, making, and 
performing a contract--including the establishment and modification of 
fee schedule--'' with a provider-sponsored organization for services 
under a MedicarePlus plan cannot be subject to the per se rule against 
price fixing.
  Basically, it says, go ahead and agree on whatever you want because 
we will make it harder for anyone to prove that you are violating the 
antitrust laws. You are on your own.
  Instead of the per se rule that is usually applied to stop price 
fixing, the only antitrust rule that can be applied is to consider and 
test the conduct based on its ``reasonableness, taking into account all 
relevant factors affecting competition, in properly defined markets''.
  This is changing one of the most basic rules of antitrust law, 
changing it in a little special gimmie or giveaway provision, tucked in 
the reconciliation bill for whatever special interest wrote it. It 
changes the rule from the one that applies to competitors throughout 
the rest of the economy and that works to protect competition and 
consumers.
  The antitrust law treats a very limited category of conduct as per se 
unlawful. That is reserved for naked restraints, that is, those that 
are inherently harmful to competition without conferring offsetting 
benefits. The classic example, Madam President, I say to my colleagues, 
is an agreement among competitors to fix the price of the products or 
services they sell when the agreement is not reasonably necessary to 
the operation of an efficiency-enhancing joint venture.
  In fact, seeing my friend from Arizona on the floor, I would refer to 
the Supreme Court decision Arizona v. Maricopa County Medical Society, 
457 U.S. 332 (1982). In that case, the Supreme Court held that a group 
of competing doctors who agreed on the maximum price at which they 
would sell their services to insurers without substantially 
integrating, that is, without becoming partners or joint venturers that 
share financial risk, was engaged in per se illegal price fixing.
  Madam President, I am advised the leadership would like to make an 
unanimous consent request, and I yield for that.
  The PRESIDING OFFICER. The Senator from Arizona.


                      Unanimous-Consent Agreement

  Mr. KYL. Madam President, I ask unanimous consent that Senator 
Domenici have 30 seconds to close, and the Senate then proceed to vote 
on the motion to waive without further action or debate.
  The PRESIDING OFFICER. Is there objection?
  Mr. LEAHY. Reserving the right to object, 30 seconds to close after I 
finish or right now?
  Mr. KYL. Right now.
  I am sorry----
  Mr. DASCHLE. I understand Senator Leahy was going to complete his 
speech and then that would take place.
  Mr. KYL. At the conclusion of his remarks.
  Mr. LEAHY. Instead of giving the full amount, I will take about 
another half minute, and then I have no objection. I enjoy hearing----
  Mr. KYL. I amend the unanimous consent request.
  The PRESIDING OFFICER. If the Senator from Arizona would finish his 
request?
  Mr. KYL. The request is that at the conclusion of Senator Leahy's 
remarks, Senator Domenici have 30 seconds to close and we then proceed 
without any further debate to a vote on the motion to waive.
  Mr. GRAHAM. Madam President, I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. LEAHY. Madam President, I understand Members may be trying to 
restate the question by the Senator from Arizona. I will assure the 
Senator from Arizona and the Democratic leader that when they are 
getting close to that I will yield immediately for them to make the 
request again.
  Basically the point is a very serious point. I do not want to make 
motions on this or other reconciliation bills. I do so only 
reluctantly. But this is such a major change in the antitrust law to be 
tucked in here absent hearings, absent debate, and absent votes. I 
think is wrong.
  For those Members of the Senate who are here, when we talked about 
the Byrd rule in the first place, it was specifically for this. We are 
talking about a reconciliation bill that goes past the normal debate 
rules of the Senate. I see the distinguished senior Senator from West 
Virginia on the floor. I think he would be the first to agree regarding 
this reconciliation. 

[[Page S 17322]]

  The budget reconciliation conference report would cast aside the per 
se rule, and override the Maricopa decision for provider groups and 
provider-sponsored organizations or PSOs. Members of provider groups, 
such as doctors, would not be required to share financial risk in order 
to avoid per se treatment when they collectively set fees at which they 
provide services. Instead, these loose-knit groups would merely have to 
meet a checklist of criteria to qualify for the special treatment.
  None of the group requirements is a substitute for the antitrust 
law's requirement of meaningful, shared risk. Under the language of the 
conference report the members need only be part of a group that ``is 
funded in part by capital contributions made by the members.'' This is 
no substitute for the shared risk required of a joint venture under 
antitrust law.
  Nor would members of PSOs be required to share financial risk under 
currently governing law in order to avoid per se treatment under 
traditional analysis. Instead, they are provided their own special 
antitrust rule in subsection (e) by which ``affiliated'' providers need 
share, ``directly or indirectly,'' barely a majority financial interest 
in the PSO. So long as the providers, who would otherwise be 
competitors, meet the indirect affiliation provisions of the bill, they 
will be allowed to exchange information ``relating to costs, sales, 
profitability, marketing, prices, or fees for any health care product 
or service.''
  These provisions each require the antitrust enforcement agencies to 
conduct a resource-intensive analysis of the ``properly defined 
market'' in order to challenge conduct that normally would be swiftly 
condemned as price fixing. Given limited enforcement resources, this 
change in law inevitably would mean that some anticompetitive 
activities will go unprosecuted. Could it be that this explains the 
doctors' lobby's insistence on inclusion of this provision in the 
conference report?
  The provisions regarding the provider groups admittedly have to 
revenue or savings effect for deficit reduction purposes. The 
provisions regarding the PSOs did not have a score until, miraculously, 
just before this debate was about to being.
  Neither set of special rules is integral to Medicare reform. Although 
defended as a means to encourage provider-sponsored health plans as an 
alternative to insurers, no such special antitrust treatment is needed 
to promote Medicare reform.
  Provider networks already exist without any special antitrust rule. 
According to industry statistics, 20 percent of all PPOs and 15 percent 
of all HMOs are provider-owned. A survey by Modern Healthcare showed 
that in 1994, without a special antitrust rule, over 9 million people 
were enrolled in provider-owned PPOs. In addition, many other provider-
sponsored managed care plans are being developed or planned without the 
enactment of a special antitrust rule. The Physician Payment Review 
Commission concluded in its 1995 Report to Congress that the available 
information did not indicate a significant problem of antitrust laws 
impeding the development of provider-sponsored managed care plans. The 
PPRC Report noted press accounts indicating that many physician-
sponsored networks are in the process or formation and that ``three-
fourths of state medical societies are either contemplating or are 
actually in the process of establishing physician-sponsored networks.''
  Finally, in the past 2 years the Federal Trade Commission and the 
Department of Justice have issued literally dozens of staff advisory 
opinions approving the proposed development of provider-sponsored 
networks.
  The Senate bill contains no such provisions. In debate on our bill, 
Senator Frist expressly noted the absence of a Senate provision like 
proposed section 1853(f). Senator Hatch spoke to the ``creative 
tension'' in the health care delivery system involving providers and 
insurers, and noted Senate consideration of the `` antitrust 
requirements in current law.'' He concluded that the Senate bill, which 
had no such special antitrust rule, met the goals of providing real 
health care choices while making sure that there is accountability. 
Thus, no special antitrust rule was considered necessary when the 
Senate debated its Medicare reform package in its budget reconciliation 
bill a short time ago.
  These provisions threaten significant injury to competition outside 
the Medicare program. By allowing competing providers to share 
information about ``costs, sales, profitability, marketing, prices, or 
fees'' and to agree on prices in the context of MedicarePlus, the 
exemption is likely to have the effect of dampening competition among 
those same providers for non-MedicarePlus business. For this reason 
among others, special antitrust rules of this type are opposed by the 
U.S. Chamber of Commerce, the National Business Coalition on Health, 
the National Manufacturers Association, the ERISA Industry Committee, 
the Business Roundtable, the APPWP--The Benefits Association, and the 
National Association of Attorneys General.
  No language--and certainly not the fig leaf provided in proposed 
section 1853(f)(1)(B)(ii), which purports to limit the information 
exchanged among providers affiliated with a PSO to having not been used 
for any other purpose than to establish the PSO--can effectively 
prevent against this spillover effect.
  Once putative competitors are authorized by statute to share 
information about ``costs, sales, profitability, marketing, prices'' 
and fees and to agree on prices for MedicarePlus, they cannot and will 
not be able to ignore that knowledge they already possess when it comes 
to setting their prices for others.
  Providers who agree on prices to be demanded from PSOs or as PSOs may 
implicitly agree to adhere to similar prices with respect to other 
activities or moderate their competitive behavior based on the 
knowledge gained thereby. Once competing providers have met to 
negotiate their fees, the information they have exchanged and the 
understandings they have reached would likely spill over into their 
other dealings and into non-MedicarePlus areas in which health care 
services ought to be governed by competitive forces.
  Thus, Gail R. Wilensky, Ph.D., the Chair of the Physician Payment 
Review Commission, recently testified on September 22, 1995, before the 
House Ways and Means Committee on Medicare Reform that ``even if a 
change (in the antitrust laws) applies only to the Medicare market, it 
may be difficult to keep potentially anticompetitive practices from 
spilling into other markets served by the networks.''
  We do not need to enact such provisions and certainly should not do 
so as part of budget reconciliation. I object and trust my colleagues 
will not approve such changes in our antitrust laws without proper 
analysis, justification, study or debate.
  Mr. DASCHLE. Madam President, will the Senator from Vermont yield?
  Mr. LEAHY. Certainly.
  Mr. DASCHLE. I apologize for the second time for interrupting the 
distinguished Senator from Vermont. We want to accommodate a number of 
schedules, and the clock is ticking. I am trying to see if we can 
accommodate all Senators and arrive at a unanimous consent agreement 
that will allow us to vote. The distinguished Senator from Florida had 
some questions.
  If we could have the unanimous consent request again propounded with 
the understanding that, in addition to the 30 seconds for the Senator 
from New Mexico, the Senator from Florida could have 1 minute to ask 
some questions, and I would ask unanimous consent that be included, and 
pose the motion at this time.
  The PRESIDING OFFICER. Is there objection? If not, the Chair 
understands that there will be 30 seconds for the Senator from New 
Mexico, and the Senator from Vermont would have 30 seconds.
  Mr. LEAHY. No, the Senator from Vermont would complete his statement 
at which point I understand that the Senator from Florida would have a 
minute, the Senator from New Mexico would have 30 seconds, and then we 
would have the vote that was discussed before.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. KYL. Madam President, I further ask unanimous consent that, if 
the motion to waive is not agreed to and the point of order is 
sustained, that the 

[[Page S 17323]]
Senate proceed immediately to vote on the motion to concur with the 
Senate amendment to the House amendment with no further action or 
debate, other than 5 minutes for each leader or manager, and that the 
vote be limited to 10 minutes.
  The PRESIDING OFFICER. Is there objection?
  Mr. DOMENICI. Reserving the right to object, I thought I was going to 
get 5 minutes also.
  Mr. KYL. For each leader and manager, I will amend the request. I am 
sorry. I misread that--each leader and manager.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. LEAHY. Madam President, to accommodate those Senators who have 
schedules and other debates, I will wrap up with this.
  The Byrd rule was put here by the distinguished senior Senator from 
West Virginia because this reconciliation process changes the normal 
procedures of the Senate. It changes the normal unlimited debate. It 
was done to handle these fiscal matters, and not to allow a whole lot 
of things to come in without the debate.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. LEAHY. No. Madam President. That was not the unanimous consent 
request, I say to the Chair. The unanimous consent request was that at 
the conclusion of my time we would have a minute for the Senator from 
Florida, and 30 seconds for the Senator from New Mexico.
  The PRESIDING OFFICER. The time of the Senator from Vermont has 
expired. He had 8 minutes, and the time has expired.
  Mr. LEAHY. The Chair is correct in that.
  I ask unanimous consent that the material of the Chamber of Commerce, 
the National Business Coalition, Health, the National Association of 
Attorneys General and others, who objected to this provision be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                         Federal Trade Commission,


                                        Department of Justice,

                                 Washington, DC, October 31, 1995.
     Hon. Patrick J. Leahy,
     U.S. Senate, Washington, DC.
       Dear Senator Leahy: The Federal Trade Commission and the 
     Department of Justice (the ``Agencies'') are writing in 
     response to your letters of October 26, 1995, requesting the 
     Agencies' comments on two antitrust provisions in H.R. 2425, 
     the Medicare Preservation Act of 1995. The Administration 
     supports the increased availability of provider networks to 
     promote competition and expand competitive choices for 
     consumers. Further, the Administration believes that 
     legislative reforms, which include appropriate consumer 
     protection safeguards, are necessary to achieve this goal. 
     The Federal Trade Commission has taken no position on aspects 
     of Medicare reform other than the comments in this letter on 
     the two antitrust provisions of H.R. 2425.
       However, the two antitrust provisions of H.R. 2425--one a 
     broad exemption for medical self-regulatory entities and the 
     other a relaxation of antitrust rules for provider service 
     networks--are unnecessary and could seriously undermine the 
     cost containment goals of Medicare reform efforts. Moreover, 
     these provisions would deprive all consumers--not only 
     Medicare beneficiaries--of the benefits of competition in 
     health care markets. The Agencies urge that Congress not 
     enact these provisions.


        antitrust exemption for medical self-regulatory entities

       Section 15221 of H.R. 2425, ``Exemptions from Antitrust 
     Laws for Certain Activities of Medical Self-Regulatory 
     Entities,'' would create a special antitrust exemption for 
     medical groups' setting or enforcing of ``standards'' that 
     are ``designed to promote quality of health care services.'' 
     If enacted, it would provide broad antitrust immunity for 
     anticompetitive activities that purport to improve the 
     quality of care, but in fact raise health care costs and 
     deprive consumers of choices in the marketplace, by 
     anticompetitively excluding other economic participants from 
     health care markets.
       Antitrust enforcement actions have stopped physicians, 
     acting through medical societies and hospital medical staffs 
     under the guise of quality concerns, from engaging in 
     boycotts, price fixing, and other conduct harmful to 
     consumers. These enforcement actions have been instrumental 
     in enabling competitive alternatives to traditional fee-for-
     service medicine to enter health care markets in the face of 
     provider opposition. For example, the Agencies enforcement 
     actions have challenged: medical societies' standards that 
     banned procompetitive alternatives to traditional fee-for-
     service medicine--including physicians' employment by HMOs 
     and affiliation with non-physicians; hospital medical staff 
     boycotts, coercion of hospitals, and abuse of the 
     credentialling process, to block the development of 
     innovative forms of health care delivery, such as health 
     maintenance organizations; and medical societies' boycotts of 
     insurers to force them to pay higher fees to the societies' 
     members.
       The unfortunate fact is that self-regulatory bodies 
     sometimes act to obstruct competition, and when they do so 
     their actions are often couched in quality-of-care terms. 
     This kind of conduct is not a thing of the past. Continued 
     antitrust enforcement against such anticompetitive activities 
     is essential if competitive forces are to play a role in 
     containing health care costs.
       Encouraging industry self-regulation that is aimed at 
     improving quality is a laudable goal, but legitimate self-
     regulatory activity is already permitted under current 
     antitrust law. The Federal Trade Commission and the 
     Department of Justice have not brought suits against such 
     legitimate conduct. In fact, they have repeatedly spread the 
     message that such conduct is lawful.
       The Report of the House Committee on Ways and Means on H.R. 
     2425 indicates that the exemption for medical self-regulation 
     is intended to address concerns about private lawsuits 
     challenging peer review. The Report states that the Health 
     Care Quality Improvement Act of 1986, 42 U.S.C. Sec. 11101, 
     which eliminated private damage actions for good faith peer 
     review that is undertaken with certain procedural safeguards, 
     has been beneficial, but that antitrust suits have continued. 
     Even if some unjustified suits continue to be brought, 
     concerns about possible imperfections in that statute's 
     limitations on private damage actions would not justify H.R. 
     2425's broad exemption from all antitrust enforcement, 
     particularly including actions by the government.
       The potential harm from the broadly worded exemption is not 
     significantly limited by Section 15221(b)(2)'s exclusion from 
     immunity where conduct is undertaken ``for purposes 
     of financial gain.'' As noted above, quality of care is 
     typically offered as a justification for anticompetitive 
     conduct by health care providers, sometimes based on the 
     sincere--but erroneous--belief that competition is 
     inappropriate in the health care industry. Moreover, 
     making the availability of immunity turn on defendants' 
     intent, rather than on the objective market consequences 
     of the challenged behavior, offers no real protection for 
     consumers. The absence of a motive for personal financial 
     gain does not lessen the injury to consumers that occurs 
     when competitors engage in conduct that is unreasonably 
     anticompetitive.
       The Congressional Budget Office concluded that this 
     provision would increase federal spending, rather than 
     promote the cost containment goals of H.R. 2425. And the 
     impact would not be limited to the Medicare program. Granting 
     private medical organizations the power to adopt and enforce 
     standards without the check against abuses that antitrust law 
     provides is likely to stifle innovation, unnecessarily limit 
     consumer choice, and frustrate health care cost containment 
     efforts.


       special antitrust treatment for provider service networks

       Section 15021 of Subtitle A of H.R. 2425, ``Special 
     Antitrust Rule for Provider Service Networks,'' would exempt 
     certain groups of health care providers from the per se rule 
     against price-fixing that applies throughout the rest of the 
     economy. This provision is not necessary for the development 
     of the provider-sponsored entities that the Medicare reform 
     bills seek to encourage. It could, however, both undercut 
     H.R. 2425's reliance on competition to provide more cost-
     effective services to Medicare beneficiaries, and impair non-
     Medicare competition as well.
       Like the Senate Medicare bill, H.R. 2425 would permit 
     certain provider organizations to contract directly with the 
     Medicare program to provide all covered services in return 
     for a monthly capitation payment. These organizations are 
     called ``provider service networks'' in the Senate bill and 
     ``provider-sponsored organizations'' (PSOs) in H.R. 2425. 
     ``Provider service networks'' (PSNs) under H.R. 2425 are 
     groups of providers that may contract with a PSO--in essence 
     as subcontractors--to provide services to Medicare 
     beneficiaries.
       Section 15021(a) provides that the conduct of a PSN or its 
     members in fixing prices would be evaluated only under the 
     ``rule of reason'' antitrust analysis, rather than under the 
     ``per se'' rule usually applicable to price fixing by 
     competitors. Legitimate provider joint ventures already 
     receive ``rule of reason'' treatment, for example, where 
     their members share substantial financial risk. This is 
     because risk-sharing among members of such a group gives each 
     member the incentive to assure that the group as a whole 
     provides services in a cost-effective manner, achieving 
     efficiencies and cost-savings that competition is intended to 
     secure. Under Section 15021(a), however, members of a PSN who 
     do not share any financial risk, and thus do not have those 
     same incentives for cost-savings, would be able to set fees 
     collectively for services provided through a PSO without 
     regard to the usual ``per se'' rule against price fixing.
       No special antitrust rule is necessary to allow providers 
     to form groups or networks, develop fee schedules for 
     participating providers, or set up providers panels, so long 
     as the providers share financial risk. In fact, 

[[Page S 17324]]
     risk-sharing among providers in a group appears integral to the 
     purposes of the legislation: PSOs and other entities offering 
     Medicare products are required to assume full financial risk 
     for the provision of all covered services, in exchange for a 
     predetermined capitation payment. Under existing antitrust 
     law, such groups already receive rule of reason treatment, 
     and any other provider group that similarly shares financial 
     risks would receive the same antitrust treatment. H.R. 2425 
     would allow PSNs that do not involve risk-sharing to qualify 
     for special antitrust treatment by meeting certain criteria. 
     However, none of these criteria is a substitute for the 
     incentives created by substantial financial risk-sharing.
       The goal of promoting more cost-effective delivery of 
     Medicare services would not be furthered by allowing groups 
     of competing providers in a PSN to agree on the prices they 
     would demand from the PSO for treating patients under a 
     Medicare PSO contract, bargain collectively with the PSO, and 
     threaten a boycott if the PSO did not accept the providers' 
     terms. In such a case, even though the anticompetitive effect 
     of the conduct is clear and no countervailing efficiencies 
     are produced, the bill would require the antitrust agencies 
     to conduct a resource-intensive analysis of the market under 
     the rule of reason. Given the constraints on federal 
     antitrust enforcement resources, this can only mean that some 
     plainly anticompetitive activities will go unprosecuted.
       The impact of the exemption could also extend beyond PSOs 
     to all managed care organizations operating in a particular 
     market. By allowing competing providers to agree on prices in 
     the context of bargaining to provide services to a Medicare 
     PSO, the exemption could have the unintended effect of 
     dampening competition among those same providers for non-PSO 
     business. Providers who agree on prices to be demanded of 
     PSOs may implicitly agree to adhere to similar demands when 
     dealing with other plans. Even absent bad intentions, once 
     competing providers have met to negotiate their fees for PSO 
     business, the information they have exchanged and the 
     understandings they have reached would likely spill over into 
     their dealings not only with other MedicarePlus 
     organizations, but also with the various organizations that 
     provide health care benefits to non-Medicare patients.
       In sum, the antitrust provision in H.R. 2425 would harm 
     consumers and would run counter to the cost-reduction goals 
     of Medicare reform efforts.
       The Department of Justice has be advised by the Office of 
     Management and Budget that there is no objection to the 
     submission of this letter from the standpoint of the 
     Administration's program.
           Sincerely,
     Anne K. Bingaman,
       Assistant Attorney General.
       By direction of the Commission.
     Robert Pitofsky,
       Chairman.
                                                                    ____

                                               September 26, 1995.
     Hon. William V. Roth, Jr.,
     Chairman, Committee on Finance
     Washington, DC.
       Dear Mr. Chairman: We are a coalition of physician group 
     practices, non-physician providers, employers, managed care 
     networks and insurers who are opposed to including special 
     antitrust preferences for physicians as part of Medicare 
     reform legislation.
       Physicians are not alone in feeling the pressure of 
     increased competition. All of us doing business in the health 
     care market are facing increased competition. Yet, we do not 
     believe that competitive pressures warrant special antitrust 
     preferences for physicians or any other provider. Such 
     preferences are unnecessary and harmful to competition and 
     consumer choice in the marketplace. If the goal is to apply 
     the successes of the private health care market to reforming 
     the Medicare program, then weakening the antitrust laws for 
     physicians is truly misguided. Senior citizens and all 
     consumers should have health plan choices--but choices that 
     are indeed competitive.
       The attached Washington Post article underscores the need 
     to maintain strong antitrust enforcement in order to ensure 
     that consumers, not competitors, determine the range and 
     prices of goods and services offered in the health care 
     marketplace.
       Unfortunately, the American Medical Association (AMA) is 
     seeking special treatment under the antitrust laws. Under the 
     AMA's proposal, physicians would be allowed to agree on the 
     prices they will charge and collectively negotiate with 
     lawyers while essentially remaining individual competitors. 
     In other words, little substantial risk-sharing on the part 
     of physicians would be required, effectively reducing 
     incentives to compete on cost, quality and efficiency. In 
     addition, physician networks would be subject to more lenient 
     enforcement of the law than all other providers.
       Advocates of changes to the law contend that current 
     antitrust laws and enforcement must be relaxed to allow 
     physicians to compete on a ``level playing field'' with other 
     network organizers such as hospitals. HMOs and insurers. 
     While this argument may appear reasonable at a glance, a 
     closer examination of the issue reveals quite the opposite. 
     The antitrust changes that the AMA seeks to include as part 
     of Medicare reform are little more than well-disguised 
     attempts to side-step the strong free market protections 
     afforded by current law.
       The following briefing paper tells the real story.
           Sincerely,
         American Group Practice Association, American Association 
           of Nurse Anesthetists, Academy of Nurse Practitioners, 
           American Nurses Association, AETNA, American Managed 
           Care and Review Association, American College of Nurse 
           Mid-wives, Association of Private Pension and Welfare 
           Plans, American Speech-Language-Hearing Association, 
           Blue Cross & Blue Shield Association, CIGNA, FHP Health 
           Care, Group Health Association of America, Health Care 
           Compare, Corp., Health Insurance Association of 
           America, Kaiser Permanente, Kansas City Blue Cross & 
           Blue Shield, Metrahealth, National Association of 
           Manufacturers, National Capital PPO, Nat's Assoc. of 
           Nurse Practitioners in Reproductive Health, Opticians 
           Association of America, Sierra Health Services, The 
           Erisa Industry Committee, The Principal Financial 
           Group, The Prudential, U.S. Healthcare, Inc., Wausau 
           Insurance Companies.
                                                                    ____


               [From the Washington Post, Sept. 14, 1995]

              Doctors, Hospitals Sued on Monopoly Charges

       The Justice Department yesterday charged doctors and 
     hospitals in two states with using monopoly power to block 
     lower-priced managed health care systems from competing--in 
     one case for almost a decade.
       It was the first time the agency's anti-trust division 
     filed price-fixing lawsuits accusing hospitals of scheming 
     with doctors to ensure their own higher profits while health 
     care costs rise.
       Both groups--in Danbury, Conn., and St. Joseph, Mo--denied 
     the charges. But both also agreed to consent decrees in which 
     they promised to change the way they do business.
       The complaint said that beginning in May 1994 and 
     continuing through August, Danbury Hospital, the only 
     acutecare facility in the area, forced patients to use its 
     outpatient facilities, joined with ``virtually all of the 
     doctors on its medical staff' to raise fees, and purposely 
     limited the size and mix of its medical staff to reduce 
     competition among local doctors.
       In Missouri, the Justice Department said, the price-fixing 
     conspiracy occurred from April 1986 through June 1995. The 
     complaint said about 85 percent of the doctors in Buchanan 
     County formed a group in 1986 ``to prevent or delay the 
     development of managed care in the area.''
       In 1990, the group then joined with the only local 
     hospital, Heartland, to form Health Choice to further lock up 
     the medical services and profits in the area, the lawsuit 
     said.

Special Antitrust Preferences for Physicians Limit Competition, Choice 
                and Innovation in the Health Care Market

       Current antitrust law does allow for the formation of 
     physician-sponsored networks.
       Physicians can join together and agree on price and other 
     terms of business so long as they ``integrate'' by sharing 
     financial risk. Risk-sharing can be achieved in a variety of 
     ways and is critical to ensure that physicians do not come 
     together to simply fix prices while remaining separate 
     competitors. Numerous physician networks have successfully 
     ``integrated'' and are now competing in virtually every 
     market in the country. Some of the most notable examples are 
     the Mayo Clinic in Minnesota and the Cleveland Clinic in 
     Ohio. These multi-specialty physician group practices were 
     formed under existing antitrust laws, without special 
     preferences.
       Alternatively physicians can also join together to form 
     Preferred Provider Organizations (PPOs) and negotiate fees 
     with HMOs and other third-party payers without integrating 
     their practices. These more loosely organized groups can 
     perform many of the same functions as their fully integrated 
     counterparts, including quality assurance, utilization 
     review, and administrative services. Guidelines issued by the 
     Department of Justice (DOJ) and the Federal Trade Commission 
     (FTC) make this clear.
       Loosening integration requirements is harmful to consumers 
     because it reduces the incentive for providers to compete. 
     Current integration requirements are not barriers to the 
     formation physician-sponsored plans. They are barriers to 
     price-fixing, boycotts and other forms of anti-market 
     activities. Ultimately, substantial financial integration is 
     what drives competition on quality, efficiency and cost.
       Physicians are not disadvantaged with respect to other 
     providers under the antitrust laws.
       The purpose of strong antitrust enforcement policies is to 
     protect consumers, not competitors. The notion that 
     physicians need special antitrust preferences because the 
     antitrust laws are biased against physicians is inaccurate 
     and misleading. Joint ventures arranged by like competitors 
     in every other industry are subject to essentially the same 
     level of scrutiny as physician-sponsored networks.
       Similarly, insurers and other providers are not exempt from 
     antitrust enforcement. If insurers either agreed among 
     themselves on payment levels or tried to wield market power 
     by driving prices down, they too would run afoul of the 
     antitrust laws.
       In its 1995 Report to Congress, the Physician Payment 
     Review Commission (PPRC) 

[[Page S 17325]]
     concluded that ``the available evidence of problems is not sufficient 
     to warrant creating safe harbors or other exemptions from the 
     antitrust laws for physician-sponsored networks at this time. 
     Amending the antitrust laws is a serious step that should be 
     undertaken only in the face of compelling evidence that 
     change is required. The limited available factual evidence, 
     however, does not currently suggest the widespread existence 
     of problems.''
       Consequently, what the AMA is really asking for is the 
     ability to compete outside the free market principles that 
     every other competitor must abide by.
       Special antitrust treatment for physicians, such as loose 
     integration requirements and substitution of the rule of 
     reason for the per se rule would diminish consumer power in 
     the marketplace.
       A number of changes to the antitrust laws have been 
     advocated by the AMA, ranging from outright exemptions to 
     relaxing risk-sharing requirements and elimination of the per 
     se rule. The per se rule has allowed the courts and 
     enforcement agencies to efficiently call a halt to activities 
     that are blatantly harmful to consumers. It reflects a 
     determination that some conduct--such as price-fixing and 
     group boycotts--is so likely to harm consumers that it should 
     be found unlawful in all circumstances. It is a rule that 
     applies to all providers and all industries.
       The rule of reason, in contrast, requires a balancing of 
     the competitive harm arising from particular conduct against 
     the possible economic benefits it produces. However, it is 
     also more difficult under this rule to challenge 
     anticompetitive conduct because many more creative defenses 
     and justifications can be raised. If antitrust enforcement 
     agencies could only prosecute antitrust violations by 
     provider physician-sponsored networks under the rule of 
     reason, they would be forced to utilize greater resources and 
     face a reduced likelihood of success. If rule of reason 
     treatment was extended to provider-sponsored networks, but 
     not to other types of health care networks, provider 
     organizations would enjoy distinct advantages that would not 
     be shared by other health plans. This would put those plans 
     at a competitive disadvantage.
       History is replete with examples of physician group 
     boycotts and efforts to keep other physician group practices 
     and non-physicians, such as nurse mid-wives and nurse 
     anesthetists, from offering consumers choice. One of the best 
     examples of this is the experience of the physician-owned 
     Cleveland Clinic. In 1991, the Federal Trade Commission (FTC) 
     put a halt to physician boycotts aimed at preventing 
     Cleveland Clinic doctors from establishing a practice in 
     Florida. This case was brought under the per se rule--the 
     very rule from which AMA seeks an exemption. Similarly, prior 
     to 1979, the AMA bound its members to rules that prevented 
     physicians from contracting with HMOs. These rules 
     effectively prevented price competition among doctors and 
     hindered the development of new, innovative health care 
     delivery systems, such as HMOs and PPOs. The Supreme Court 
     agreed and forced the AMA to drop its anticompetitive rules.
       The DOJ and FTC have provided substantial guidance to 
     health care providers to address their concerns.
       In response to concerns raised by providers, the Department 
     of Justice (DOJ) and the Federal Trade Commission (FTC) 
     jointly issued the Statements of Antitrust Enforcement Policy 
     in the Health Care Area. These statements, or guidelines, 
     provide a detailed road map of the analysis that the federal 
     enforcement agencies will apply to the most significant 
     issues facing the health care industry. The guidelines 
     include ``safety zones'' clarifying what types of mergers, 
     joint ventures, and other activities would be considered 
     lawful. The DOJ/FTC have made a special effort to address 
     physician networks and rural health care markets.
       For physicians and other providers who have questions about 
     forming integrated networks, the agencies offer opportunities 
     for more specific advice through their business review and 
     advisory opinion letter process. The agencies' business 
     review and advisory opinion procedures allow parties to 
     obtain a statement of the agencies' enforcement intentions 
     before the transaction is implemented. The agencies have 
     committed to providing expedited 90-day reviews. The agencies 
     have also committed to continued monitoring of evolving 
     health care markets so they can respond to changes on an on-
     going basis. To date, virtually every physician-sponsored 
     network has been approved.
       The health care industry has responded enthusiastically to 
     these initiatives. According to a January 1995 Bureau of 
     National Affairs (BNA) survey of counselors advising 
     providers, the ``almost blanket clearances by the Justice 
     Department and FTC of proposals to create managed care 
     networks is assuaging health care industry concerns about the 
     impact of antitrust law . . .''
                                                                    ____

         Business for Medicare Reform: APPWP--The Benefits 
           Association; The Business Roundtable; The ERISA 
           Industry Committee; National Association of 
           Manufacturers; National Business Coalition on Health; 
           U.S. Chamber of Commerce,
                                                 October 17, 1995.
     Hon. Newt Gingrich,
     Hon. William Archer,
     Hon. Michael Bilirakis,
     Hon. Thomas Bliley,
     Hon. Dennis Hastert,
     Hon. Gerald Solomon,
     Hon. William Thomas.
       Dear Representatives: We are writing as representatives of 
     small and large businesses who have been supportive of your 
     efforts to save Medicare by passing the Medicare Preservation 
     Act. We have been gratified by the commitment you have made 
     to fundamentally restructuring Medicare by drawing on the 
     successful health care reform strategies pioneered by private 
     employers. Moreover, employers have been willing to accept 
     considerable costs in order to save Medicare.
       Just a very few years ago, most health care policymakers 
     and analysts believed that the private sector could not 
     contain health care costs. Employers have proved this wrong, 
     by using their purchasing power to create more competitive 
     markets and demanding better care at lower cost. Based on our 
     knowledge of what it took to get this job done, we have 
     important reservations about a limited number of the Medicare 
     Preservation Act's provisions. We are concerned that these 
     provisions would undermine the very strategies that (a) 
     employers have used to control costs and improve quality and 
     (b) the Act uses as the foundation for a new and sustainable 
     Medicare program. We urge you to reconsider these provisions.
       Our most important concerns are as follows:
       Antitrust Changes for Health Care Providers. We are 
     extremely concerned by the antitrust law changes included in 
     Sections 15021 and 15221 of the Act, which would affect 
     employer-sponsored health plans as well as MedicarePlus 
     plans. We ask that they be stricken.
       Unfortunately, organized medicine has a long history of 
     attempting to suppress alternative health care delivery 
     systems. Antitrust enforcement has been an important tool in 
     overcoming this opposition to innovative ways of delivering 
     higher quality care at lower cost. Section 15221's changes to 
     antitrust law would allow organized medicine to engage in a 
     much higher level of anticompetitive activity, thereby 
     increasing costs and reducing the quality of care. In 
     contrast, employers have created the new, competitive health 
     care market and better ways to measure and improve quality 
     under current antitrust law, which also leaves broad 
     leeway for health care providers to collaborate in 
     legitimate self-regulatory activity.
       Employers have been able to control costs and improve 
     quality by using their purchasing power to create competitive 
     health care markets. The antitrust law changes in Section 
     15021 would shift the balance between health care providers 
     and purchasers in favor of providers, undermining employers' 
     ability to be effective purchasers and jeopardizing their 
     hard won victories over health care cost inflation and poor 
     quality care. Putting purchasers at a disadvantage by 
     changing antitrust law risks a return to health care 
     hyperinflation and unaccountability for quality.
       Medical Liability Reforms. Employers have long supported 
     medical liability reform, including changes to the collateral 
     source rule. However, the version of collateral source rule 
     reform in the Act eliminates employers' right of subrogation. 
     This shifts the cost of treating injuries caused by a 
     negligent provider from the provider who caused the injury to 
     employers. We urge that you revise the Act to provide for a 
     different version of collateral source rule reform that 
     appropriately prevents double recovery by plaintiffs without 
     inappropriately shifting responsibility for injuries caused 
     by negligent providers to employers.
       Medicare Secondary Payer Expansions. The Act expands 
     employers' Medicare secondary payer liability. This does 
     nothing to improve health care efficiency or quality. Rather, 
     it simply shifts costs to private sector payers. Small 
     employers in particular are vulnerable to this kind of cost-
     shifting. We urge that the expansions of Medicare secondary 
     payer liability be eliminated.
       As you know, managed care plans able to efficiently deliver 
     high quality care have played a key role in employers' 
     market-based health reform strategy. No aspect of the 
     Medicare Preservation Act is more important to employers than 
     its treatment of managed care plans. We are gratified that 
     the Act as introduced by Chairman Archer and Chairman Bliley 
     did not include antimanaged care rules. Including antimanaged 
     care rules in the Act would increase costs and reduce 
     quality. Moreover, including antimanaged care rules would 
     directly and adversely affect employer-sponsored health plans 
     as well as MedicarePlus plans, since the same networks will 
     serve Medicare beneficiaries and employer-sponsored plans.
       It is our understanding that most of the antimanaged care 
     rules adopted in committee as amendments to the Act have been 
     stricken. (These amendments included restrictions on (1) the 
     criteria health plans may use when selecting providers, (2) 
     efforts to eliminate medically inappropriate emergency room 
     treatment and (3) denial of care that is not medically 
     necessary.) We applaud this result. We urge you to strike the 
     remaining antimanaged care amendment (restricting permissible 
     contractual relationships between health plans and providers) 
     and to continue adhering to the policy of avoiding 
     antimanaged care rules as the Medicare Preservation Act moves 
     through the legislative process.

[[Page S 17326]]

       It also is our understanding that a technical error in the 
     medical liability reforms that would have inadvertently 
     expanded employers' liability by interfering with current 
     grievance procedures provided for under the Employee 
     Retirement Income Security Act has been resolved. We 
     appreciate your efforts to resolve this matter, which is 
     vitally important to employers who voluntarily sponsor health 
     benefits for their employees.
       Again, we strongly support your efforts to save Medicare. 
     It is essential that they succeed. However, as 
     representatives of the businesses that originated the 
     strategies that the Medicare Preservation Act is built on, we 
     urge adoption of a few technical changes that would greatly 
     strengthen the Act's ability to achieve its goals. These 
     changes also would eliminate our concerns about the Act's 
     effects on businesses that voluntarily offer health benefits 
     to their employees.
       We would be pleased to further discuss these issues with 
     you at your convenience.
                                                                    ____

                                         U.S. Chamber of Commerce,


                                 Business for Medicare Reform,

                                                 October 23, 1995.
     Hon. William V. Roth, Jr.,
     Chairman, Finance Committee,
     Washington, DC.
       Dear Chairman Roth. We are writing as representatives of 
     small and large businesses that are working hard to control 
     health care costs and improve quality. We have been gratified 
     by the Finance Committee's decision to fundamentally improve 
     Medicare by drawing on the successful health reform 
     strategies pioneered by private employers.
       Just a few years ago, most health care policymakers 
     believed that the private sector could not contain health 
     care costs. Employers have proved this wrong, by using their 
     purchasing power to create more competitive markets, 
     demanding better care at lower costs, measuring outcomes and 
     consumer satisfaction, and developing networks through 
     selective contracting with the best providers. Based on our 
     knowledge of what it took to get this job done, we are 
     concerned that potential floor amendments to the Finance 
     Committee bill would undermine the very strategies that (a) 
     employers have used to control costs and improve quality and 
     (b) the bill uses as the foundation for a new and sustainable 
     Medicare program. These potential amendments include 
     antitrust exemptions for health care providers and mandated 
     point-of-service coverage by network-based plans. We strongly 
     oppose these potential amendments to the Finance Committee 
     bill.
       The damage that would be caused by adding these amendments 
     to Medicare reform legislation would not be limited to higher 
     Medicare costs and lower quality. Because Medicare is such a 
     large factors in health care markets and because Medicare and 
     employer-sponsored health plans will use the same provider 
     networks, antitrust exceptions for providers and antimanaged 
     care rules would directly harm employer-sponsored plans. 
     Working Americans and their families would face higher costs, 
     reduced coverage and lower quality.


                   opposition to antitrust exemptions

       One potential amendment would grant an antitrust exemption 
     to medical self-regulatory organizations. Unfortunately, 
     organized medicine has a long history of attempting to 
     suppress coordinated health care delivery systems. Antitrust 
     enforcement has been an important tool in overcoming this 
     opposition to innovative ways of delivering higher quality 
     care at lower cost. An antitrust exemption for medical self-
     regulatory organizations would allow organized medicine to 
     engage in a much higher level of anticompetitive activity, 
     thereby increasing costs and reducing the quality of care. 
     Notably, current antitrust law leaves broad leeway for health 
     care providers to collaborate in legitimate self-regulatory 
     activity.
       Employer-led efforts to improve accountability and quality 
     in the health care system by making data available to health 
     care consumers has been a leading cause of the positive 
     changes in the health care market. This data has become 
     available--often in the face of provider resistance--only 
     because private employees took the initiative to develop it 
     and demand that providers supply it. Granting providers an 
     antitrust exemption, thereby permitting them to monopolize 
     the quality standard-setting process, will seriously erode 
     accountability for quality and value.
       Another potential antitrust amendment would grant an 
     exemption to provider-sponsored organizations. Employers have 
     been able to control costs and improve quality by using their 
     purchasing power to create competitive health care markets. 
     An antitrust exemption for provider-sponsored organizations 
     would shift the balance between health care providers and 
     purchasers in favor of providers, undermining employers' 
     ability to be effective purchasers. Putting purchasers at a 
     disadvantage by changing antitrust law risks a return to 
     health care hyperinflation and unaccountability for quality.


                 opposition to point-of-service mandate

       A recent Lewin-VHI study found that a point-of-service 
     mandate would add even more to the nation's health care bill 
     than an ``any willing provider'' mandate. Experience confirms 
     a point-of-service mandate's high cost. A study of Florida 
     employers' 1993 health crisis found that point-of-service 
     plans cost over 20 percent more than HMOs. Prohibiting 
     closed-panel plans from participating in Medicare would force 
     even those Medicare beneficiaries who want to enroll in a 
     closed-panel plan--such as the 3 million seniors who already 
     have chosen such plans over the traditional Medicare system--
     to pay higher premiums.
       A point-of-service mandate undermines the entire purpose of 
     Medicare reform. Because the traditional Medicare program is 
     unsustainable, the Finance Committee bill encourages 
     beneficiaries to shift to private health plans. A point-of-
     service mandate would drive up private plans' costs, 
     encouraging continued enrollment in the government-run 
     system. As a result, Medicare reform would fail to produce a 
     modernized, more efficient Medicare.
       Both point-of-service plans and closed panel plans have 
     earned an important place in the market--based on consumers' 
     choices, not government mandates. In fact, employers have 
     found that employee enrollment in closed panel HMOs increased 
     at the same time that point-of-service plan availability and 
     enrollment increased. Market forces rather than government 
     microregulation should determine point-of-service plans' role 
     in Medicare. Certainly, the federal government should not 
     deny consumers the freedom to choose and the savings of 
     private health plans that only contract with selected 
     providers. Moreover, the Finance Committee bill requires all 
     plans that only contract with selected providers, like every 
     other private plan (but not the traditional government-run 
     Medicare program), to meet quality standards.
       The Finance Committee made the right choice by keeping 
     antitrust exemptions for organized medicine and a point-of-
     service mandate out of its Medicare reform bill. We urge you 
     to oppose any floor amendments that would add these 
     provisions, or any other antimanaged care rules, to the 
     Finance Committee's Medicare bill.
                                                                    ____

                                           National Association of


                                            Attorneys General,

                                 Washington, DC, October 26, 1995.
     Hon. Newt Gingrich,
     Speaker of the House, House of Representatives,
     Washington, DC.
       Dear Speaker Gingrich: As Chair and Vice-Chair of the 
     Antitrust Committee and Chair and Vice-Chair of the Health 
     Care Task Force of the National Association of Attorneys 
     General (NAAG), we are writing to express our concern about 
     two antitrust provisions included in H.R. 2425, the Medicare 
     Preservation Act of 1995. These provisions, sections 15021 
     and 15221 of the Act, are unnecessary and could frustrate the 
     cost-containment goals of the Medicare legislation. We urge 
     that these provisions not be included in the final Medicare 
     reform package.
       The Attorneys General, as chief law officers of their 
     states, are the primary enforcers of the states' antitrust 
     law, and also represent their states and the citizens of 
     their states in federal antitrust litigation. As chief legal 
     officers, the Attorneys General have had and continue to have 
     an important role in the development of national competition 
     policy. We know first-hand that the antitrust laws benefit 
     consumers by protecting competition and promoting efficiency, 
     innovation, low prices, better management and greater 
     consumer choice. Although the Attorneys General as a group 
     have not had an opportunity to consider this legislation, 
     past NAAG policy positions have consistently opposed both new 
     antitrust exemptions and the weakening of antitrust 
     enforcement standards for specific industries.
       Section 15221 of the Act provides an exemption from both 
     state and federal antitrust laws for activity relating to 
     medical self-regulation. We believe that inclusion of this 
     provision is inadvisable. Unfortunately, state Attorneys 
     General have had experience with physicians and other health 
     care providers who have engaged in anticompetitive 
     activities, including physicians' attempts to eliminate 
     competition from HMOs, PPOs and allied health care 
     professionals. For this reason, in a 1993 Resolution, the 
     Attorneys General stated their belief that exempting health 
     care providers from the antitrust laws is undesirable. Nor is 
     the exemption contained in section 15221 necessary. Current 
     antitrust law permits collaborative activities, including 
     standard-setting activities, that benefit the public and do 
     not injure competition.
       Section 15021 of the Act provides that certain actions of a 
     provider service network or an individual member of that 
     network shall not be deemed illegal per se under either 
     federal or state antitrust law, but shall instead be judged 
     under the ``rule of reason.'' We are concerned that this 
     relaxation of antitrust standards could lead to higher 
     prices and fewer choices for consumers. Under current law, 
     per se treatment is reserved for the most anticompetitive 
     conduct, including horizontal price-fixing. As stated in a 
     1986 NAAG Resolution, the Attorneys General oppose new 
     industry-specific antitrust standards because present 
     antitrust standards adequately protect the interests of 
     businesses, as well as consumers, by preventing activities 
     that have no pro-competitive justification. More 
     specifically, in the health care area, the Attorneys 
     General believe that competition promotes more affordable 
     health care, development of innovative new delivery 
     systems, and increased information for health care 
     consumers.
       Finally, we are concerned about the broad preemption of 
     state antitrust enforcement, particularly in section 15221, 
     which is not limited to protection of activities within the 
     Medicare program. In a 1994 Resolution, the 

[[Page S 17327]]
     Attorneys General opposed preemption of state antitrust enforcement in 
     the health care area because such preemption crodes state 
     sovereignty and threatens the system of federalism 
     established by the Constitution. Health care is predominately 
     a local industry that varies significantly from state to 
     state. The Attorneys General, as chief law enforcement 
     officers, should continue to be able to prevent 
     anticompetitive behavior within each state.
       If you have any questions about our views, please feel free 
     to contact us or Emily Myers, NAAG Counsel for Antitrust and 
     Health at (202) 434-8015.
           Very truly yours,
     J. Joseph Curran, Jr.,
       Attorney General of Maryland, Chair, NAAG Antitrust 
     Committee.
     Tom Miller,
       Attorney General of Iowa, Vice-Chair, NAAG Antitrust 
     Committee.
     Pamela Fanning Carter,
       Attorney General of Indiana, Chair, NAAG Health Care Task 
     Force.
     Jeffrey L. Amestoy,
       Attorney General of Vermont, Vice-Chair, NAAG Health Care 
     Task Force.
                                                                    ____

                                                November 17, 1995.
       Dear Senator. It is our understanding that the 
     reconciliation bill before the Senate includes a number of 
     anti-consumer provisions which may violate the Byrd rule. 
     Those provisions include antitrust exemptions for provider 
     service networks, elimination of laboratory testing standards 
     for most tests performed in physician offices, preemption of 
     state authority to implement consumer protection standards 
     for managed care plans and physician self-referral.
       On behalf of the following organizations, we strongly ask 
     that you support every effort to remove these harmful 
     provisions from the reconciliation bill. Inclusion of the 
     items listed above will drive up costs, threaten patient 
     safety and reduce the quality of health care for all 
     Americans.
           Sincerely,
         AIDS Action Council, American Public Health Association, 
           Church Women United, Citizen Action, Consumer 
           Federation of America, Consumers Union, National 
           Association of Social Workers, National Farmers Union, 
           National Council of Senior Citizens, Neighbor To 
           Neighbor, Public Citizen's Congress Watch, Service 
           Employees International Union.

  The PRESIDING OFFICER. The Senator from Florida is recognized for a 
minute.
  Mr. GRAHAM. Madam President, I would like to ask if the Senator from 
Arizona would please respond to a question. I hope they could be 
answered ``yes'' or ``no''.
  Mr. KYL. If I can.
  Mr. GRAHAM. Does this provision relate exclusively to the Federal, or 
does it apply to State antitrust law?
  Mr. KYL. My understanding is that it applies to both Federal and 
State.
  Mr. GRAHAM. Please refer to the bottom line, page 17, No. 2. Does 
this provision relate exclusively to Medicaid, or does it apply to 
other forms of health care?
  Mr. KYL. It refers only to the Medicare contracts, and the 
organizations pursuant to obtaining the Medicare contract.
  Mr. GRAHAM. I would ask the Senator to refer to 318, paragraph B.
  Thank you, Madam President.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, the Byrd rule was put into effect--not 
that it would rule all the time but that it would be waived.
  I submit that anybody in this body that wants the Medicare law to 
work in rural areas, if you talked to anybody in rural areas, they will 
tell you one of the most important things pending before us, to see 
that we get delivery in rural areas, is this provision which is being 
dropped, if we make it subject to the Byrd rule. Because, without it in 
rural areas there will be no ability for doctors and hospitals in the 
rural areas to get together and have new units to deliver health care. 
There will be no competition and no service except for monster HMOs in 
the rural areas.
  We really ought to waive the Byrd rule in this instance.
  I yield the floor.
  The PRESIDING OFFICER. All time has expired. The question is on 
agreeing to the motion to waive the Congressional Budget Act with 
respect to the antitrust provision. On this question, the yeas and nays 
have been ordered, and the clerk will call the roll.
  The legislative clerk called the roll.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
who desire to vote?
  The yeas and nays resulted--yeas 54, nays 45, as follows:

                      [Rollcall Vote No. 583 Leg.]

                                YEAS--54

     Abraham
     Ashcroft
     Baucus
     Bennett
     Bond
     Breaux
     Brown
     Burns
     Campbell
     Coats
     Cochran
     Cohen
     Coverdell
     Craig
     D'Amato
     DeWine
     Dole
     Domenici
     Faircloth
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Hatfield
     Helms
     Hutchison
     Inhofe
     Jeffords
     Kassebaum
     Kempthorne
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Nunn
     Pressler
     Roth
     Santorum
     Shelby
     Simpson
     Smith
     Snowe
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--45

     Akaka
     Biden
     Bingaman
     Boxer
     Bradley
     Bryan
     Bumpers
     Byrd
     Chafee
     Conrad
     Daschle
     Dodd
     Dorgan
     Exon
     Feingold
     Feinstein
     Ford
     Glenn
     Graham
     Harkin
     Heflin
     Hollings
     Inouye
     Johnston
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Moseley-Braun
     Moynihan
     Murray
     Pell
     Pryor
     Reid
     Robb
     Rockefeller
     Sarbanes
     Simon
     Specter
     Wellstone
  The PRESIDING OFFICER. On this vote, the yeas are 54, the nays are 
45. Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is not agreed to.
  The Chair is prepared to rule on the points of order made by the 
Senator from Nebraska.
  The Chair sustains both points of order.
  The question before the Senate is whether the Senate shall recede 
from its amendment to H.R. 2491 and concur therein with a further 
amendment. Pursuant to the Budget Act, that amendment is the text of 
the conference report (House Report 104-350) excluding the provisions 
stricken on the points of order.
  According to the previous order, each leader and each manager have 5 
minutes for debate.
  Who seeks recognition? Who seeks recognition under the previous 
order? Under the previous order, each leader and each manager has 5 
minutes.
  The Senator from Nebraska is recognized for 5 minutes.
  (Mr. GORTON assumed the chair.)
  Mr. EXON. Mr. President, in a few minutes, the Senate will 
unfortunately adopt this conference report to the reconciliation bill.
  Although I will not vote for the legislation, I certainly want to 
congratulate Chairman Domenici for his leadership and for the many 
months of yeoman labor that he put in on this piece of legislation. He 
made the hard choices, some good and, in my opinion, many bad, but he 
was a true leader of great merit, and I congratulate him.
  Mr. President, my colleagues on the other side of the aisle will 
savor their victory, but I must also say to all Senators that it is 
time to move on. With victory short lived and the fate of this bill 
certain, it will soon take its place in veto history.
  Mr. President, where do we go from here? In my 17 years in the 
Senate, I have never seen such a poisonous atmosphere as the one that 
hangs thick over the Nation's Capitol. The nervous truce that existed 
in January has collapsed. We are, in the words of President Lincoln, 
``a house divided against itself.'' I still nurture the hope that we 
will find a way out of this morass and that our leaders--especially 
those in the other body--will set aside pettiness, vanity, and rigid 
ideology for the good of the Nation. There is no honor in the dishonor 
that has been brought about by the actions of the last few days and the 
last few hours.
  I firmly believe, with every fiber in my body, that we should balance 
the budget. So do the American people. It is the stark route that the 
Republican majority took, however, that cleaves our ranks.
  I tell my Republican friends that if we ever can come to an agreement 
on a balanced budget, we cannot adhere to the current formulas that 
exist in the conference report. It hobbles any hope that we can redeem 
our differences in a constructive alliance to balance the budget. But 
we must keep trying.
  I yield my remaining time. 

[[Page S 17328]]

  The PRESIDING OFFICER. Under the previous order, the Senator from New 
Mexico is recognized.
  Mr. DOMENICI. Mr. President, fellow Senators, I have a lot of people 
to thank for this evening. While the Senators on that side do not think 
it is a very joyous or auspicious occasion, Senators on this side do, 
and I do. I have waited a long time, as a U.S. Senator, to see this 
evening arrive. It is truly a historic opportunity for politicians 
because, as I see it, this was the one chance we have to vote for the 
future. We have an opportunity every day to vote for something for 
today, a program for today, something to give to people today. But, 
essentially, what we are voting on this evening is a vote for the 
future of this country and for children not yet born and for those who 
are not yet receiving anything from the Federal Government, but who 
want an opportunity and have a dream.
  We are saying the one thing that makes that more and more difficult 
is 25 years of fiscal policy that has the United States borrowing as if 
no one else needed any money, as if those that work, those that need 
investment did not need money, just the Federal Government needed it. 
And it was like we were a money tree, America was a money tree, and the 
money all went to Washington. And when we did not have enough, we 
borrowed it from foreigners--from Japan, from our banks, from our 
people. The question is: Who will pay the piper?
  We have decided here tonight that the piper will not be our children 
and grandchildren, but rather in due course, the adults who live today 
will pay for what we give to our people today and provide a future for 
our children and grandchildren.
  Now, I understand that the President is going to veto this bill, and 
I have a word for the President. Since he has told us in advance, I 
would like to tell him in advance. As he sits down with his veto pen, I 
hope he feels heavy, because on his shoulders is our future and our 
children's future. As he signs with that left hand of his, he better 
have something pretty good in mind for our children in the future, 
because he is throwing away a real legacy of opportunity, and he better 
be prepared to tell us and tell the American people and tell our senior 
citizens what he has in mind, because I have not seen anything yet that 
he has in mind that comes anywhere close to what we are giving to our 
children and grandchildren here tonight when we vote ``aye'' on this 
measure.
  For those who have voted these many times--58 votes on the budget 
resolution, and I do not know how many different times--I say to each 
one of them, your vote was not in vain. And if those on the other side 
and in the White House think they will use this against us, just think 
what we are going to use against them if this President vetoes this and 
we end up with nothing.
  For those who are against that, there is a real chance that we will 
get nothing, except $200 billion in deficits for as far as the eye can 
see. I also say to those who voted for it, and will vote for it again 
tonight, you have changed the course of fiscal policy and the way we 
spend our people's money forever, because no longer will a Budget 
Committee in the future have its hearings and hear ``there is no way we 
can cut spending, and we cannot do this and we cannot cut that.''
  Well, we have shown that, in a very fair way, we can do what is 
necessary to get a balanced budget. So we have changed forever the 
profligacy of a great Nation, and we ought to be proud of it and 
thankful for it.
  To all the chairmen who worked so hard, thank you. I want to close 
and say to our leader, Senator Dole, thank you for all the confidence 
you placed in me. When I had to get things done, you told me ``do 
them.'' When I needed tough decisions and I could not get the votes, 
you said, ``Bring them in my office.'' And last, I thank the 
budgeteers. You have a tough job; you do not get to pass anything 
except this crazy resolution that cuts everything, but I thank you for 
your unity and your support. It has been a privilege being your 
chairman. Thank you very much.
  The PRESIDING OFFICER. Under the previous order, the Democratic 
leader is recognized for a period of not to exceed 5 minutes.
  Mr. DASCHLE. Mr. President, I yield 2 minutes to the Senator from New 
Jersey.
  Mr. BRADLEY. Mr. President, this reconciliation bill, from top to 
bottom, is intoxicated with the fantasy that it is abandoning the 
welfare state. Mr. President, we do not have a welfare state, we have a 
safety net for a few poor people. This drives big holes in that safety 
net. Welfare reform--block grants replace welfare. What it does is take 
money from Federal pols and give it to State pols. The theory is, if 
you do not like Washington, you are going to love Lansing, or Trenton, 
or the State capital. Hardly. What this does is, in the Federal 
commitment to poor children, 1.2 million more children will be plunged 
into poverty because of this. The Medicaid block grant. Send it all 
back to the States. Do not say who is eligible, and do not say what the 
benefits will be, or how the providers will provide the benefits. Just 
send the money back.
  The only thing we know is that when we pass this bill, 12 million 
Americans will be uninsured. Uninsured. I predict that, 5 years from 
now, there will be Medicaid scandals in States where Governors are 
putting in a health care program that will help their constituencies.
  Why are State governments different? They are not. For what purpose? 
The purpose is that we are giving a gigantic break to wealthy 
Americans. On the other side, they say, ``Oh, no, only 35 percent of 
the cut goes to people above $75,000.'' Yes, but they only represent 13 
percent of the people. And embedded in this bill for estates of $2.5 
million is an $800,000 tax cut. At the same time, we are ripping holes 
in the safety net, we are giving estates of $2.5 million an $800,000 
tax cut. We should say ``no.''
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. DASCHLE. Mr. President, I want to commend the distinguished 
ranking member for the excellent job he has done in representing our 
caucus and commend all of the Members who have played a role in on our 
side, as we have debated this bill.
  I believe that this is the most dangerous document in America. I 
believe it is one of the most extreme documents that we have had before 
this Congress in the time that I have served here. When the lowest 20 
percent of the people in this country lose more than all the other 80 
percent combined, that is extreme. When the upper 20 percent gain more 
than all the other 80 percent combined, that is extreme.
  When you see the biggest shift in income from the middle class to the 
top brackets in history--Mr. President, there is no other word to 
describe it but extreme. When it represents the biggest cut in health 
care benefits in history, Mr. President, this document belongs in the 
Guinness Book of World Records.
  The American people did not vote to see the kind of change this 
document represents. No one in this country voted to gut Medicare $270 
billion to provide tax breaks for those who do not need them. No one 
voted to cut Medicaid $163 billion to provide tax breaks for those who 
do not need them.
  The distinguished Senator from New Mexico talked about protecting our 
children. How in Heaven's name do we protect our children when we cut 
the legs out from under them in education, in student loans, in 
nutrition programs, in housing, in virtually every single area of 
opportunity this country has provided them--how do we do that? How in 
the name of children can we stand up and support this document?
  Mr. President, we can do better than this. The American people now by 
more than a 2 to 1 margin believe--demand--we do better than this. The 
President will veto it, and he has good reason to veto it.
  We need to sit down together and take the extreme measures out of 
this document. We need to work to govern better. We need to send a 
better message to the American people.
  We will not gut the investments in people that we have committed to 
for a long, long time. The most dangerous document in America needs to 
be vetoed and, indeed, it will be.
  The PRESIDING OFFICER. Under the previous order the majority leader 
is recognized for 5 minutes.
  Mr. DOLE. Mr. President, I think probably the most extreme thing that 
has happened in the last 2 or 3 years is 

[[Page S 17329]]
the $265 billion tax increase passed by this Congress without a single 
Republican vote. You talk about extremism--that is a good example, 
particularly when the initiator confesses that he raised taxes too 
much, the President of the United States.
  I believe we have a good package here. We have had a lot of work, and 
I want to thank, first of all, Senator Domenici and the entire Budget 
Committee, but everyone else on this side of the aisle who have been 
working the past several weeks to bring us to this moment.
  I really believe, and I am sitting here thinking I have cast a lot of 
votes in the U.S. Senate. I think this is probably the most important 
one that I will cast, knowing it is not bipartisan. I would like to 
have it bipartisan. But it is a very important vote. It is a 
fundamental change in America. It is a fundamental change in direction 
in this country. I think it is probably the most important vote I have 
cast in my years in the Senate.
  I have never been so certain that we are doing something right--yes, 
right--for our children, as the Senator from New Mexico pointed out, 
for our grandchildren, and for everybody else.
  It is right for States. Yes, we are giving some power back to the 
Governors. We are following the admonition of the 10th amendment of the 
Constitution, part of the Bill of Rights, 28 words in length, that 
says, in effect, if the power is not reserved to the Federal Government 
it belongs to the States and to the people. We believe when the people 
gave us a majority last November, they wanted us to give power back to 
the States and back to the people.

  This bill is right for senior citizens. We will save, preserve, and 
strengthen Medicare. It will still grow at a rate of 6.4 percent. We 
believe that is a step in the right direction.
  But looking at other beneficiaries, somebody who buys a home will 
save a lot of money because interest rates will come down. If you buy a 
car, if you are going to buy farm machinery, if you take out a loan to 
send your child to college, or if you are trapped in a failed welfare 
system--not anyone in this body would say we do not have a failed 
welfare system.
  It seems to me that if we are going to promise to end business as 
usual, we have to start putting up or shutting up. We cannot do all of 
the things that my colleagues on the other side say--keep spending more 
money, spending more money, more taxes, more regulations, more 
government--and ever make a fundamental shift in America.
  I hope, again, knowing the bill is going to be vetoed, but I hope the 
American people know that we are not going to mortgage their future 
with this bill; that we are going to cut taxes for families with 
children; we are going to encourage savings and investment and economic 
growth. We have kept our promise. We kept our promise to shift power 
out of Washington, DC, to the States, and we have kept our promise 
there.
  I just conclude, because I know there are some of us going to another 
debate, and some are getting nervous, which is all right with me, but I 
simply ask the President of the United States to take another look at 
this product. This is a good product, Mr. President. You ought to sign 
it. You ought to make up for all the things you have done wrong in the 
past 3 years and sign this bill. Then you would be right on target 
again. You would be that new Democrat you wanted to be or thought you 
were or might have been.
  Mr. President, we are doing the right thing. We are doing it because 
we stuck together, because we kept our promise, and because we love 
America.
  Mr. President, soon after my election to the Kansas State House of 
Representatives, a reporter asked me whether I had a legislative 
agenda. And I replied that my agenda was simple--it was to stand up for 
what I thought was right.
  And I have tried to follow that philosophy throughout my career.
  In just a few minutes I will vote to approve the Balanced Budget Act 
of 1995.
  I believe the vote is one of the most historic votes ever taken in 
this Chamber--and certainly the most important one I have cast in my 
years in the Senate.
  And as I cast my vote to approve this landmark legislation, I can say 
that I have never been so certain that I am standing up for what's 
right.
  I have never been so certain that the U.S. Senate is standing up for 
what is right.
  Mr. President, the Balanced Budget Amendment Act of 1995 is right for 
America's future.
  It is right for the American people.
  It is right for our children and grandchildren.
  It is right for our States, our cities, and our neighborhoods.
  It is right for our senior citizens.
  It is right for every American who is saving to buy a home.
  It is right for every American who is buying a car.
  It is right for every American who takes out a loan to send a child 
to college.
  It is right for those trapped in our failed welfare system.
  Mr. President, last fall, Republicans asked voters to give us a 
majority on Capitol Hill. And we left absolutely no doubt about what we 
would do if we got that majority.
  We promised we would put an end to business as usual. Tonight, 
Americans know that we have kept our promise.
  We promised to stop the mortgaging of our children's and 
grandchildren's future, and to put America on a path to a balanced 
budget. Tonight, Americans know that we have kept our promise.
  We promised to replace our failed welfare system with one based on 
the principles of work, family, and personal responsibility. Tonight, 
Americans know that we have kept our promise.
  We promised to cut taxes for America's families, and to encourage 
savings, investment, and economic growth. Tonight, Americans know that 
we have kept our promise.
  We promised to shift power out of Washington, DC, and to return it to 
where it belongs--our States, our cities, and our people. And tonight 
Americans know that we have kept our promise.
  A balanced budget. True welfare reform. Lower taxes. More freedom and 
power for our States, our cities, and our people. That's what 
Republicans are all about. And that's what this bill is all about.
  President Clinton has said that he will veto this bill. He will, as 
is his habit, stand in the way of change. And I would simply say to the 
President to take another look at this bill.
  We are told that the President's pollsters are advising him that the 
American people have concluded that his actions don't match his words. 
By signing this bill, President Clinton would prove that his actions do 
match his words on a number of issues.
  President Clinton has told the American people many, many times that 
he is for a balanced budget.
  He said on June 4, 1992 he would balance the budget in 5 years.
  He said on May 20, 1995, he could balance the budget in less than 10 
years.
  He said on June 13, 1995, he would take 10 years.
  And on October 19, 1995 he said he could balance it in either 7 
years, 8 years, or 9 years.
  Despite these claims, President Clinton did everything he could to 
defeat a balanced budget amendment, and the Congressional Budget 
Office-- which the President has previously endorsed as an honest 
scorekeeper--has said that the budgets the President did propose left 
us with $200 million in deficits far into the next century.
  President Clinton said in 1992 that he would end welfare as we know 
it. Yet, he admitted recently that the only welfare bill he proposed 
was a disappointment.
  The President promised in 1992 that he would give middle-class 
Americans a tax cut. Yet, in 1993 he gave America the largest tax 
increase in history.
  The President said that he wants to prevent Medicare from going 
bankrupt, as three of his Cabinet members have projected it will do 
within 7 years. Yet, he has refused to work in a bi-partisan manner 
with Republicans to save Medicare. Instead, according to a remarkable 
editorial in the Washington Post, the President has ``shamelessly used 
the Medicare issue * * * demagogued on it * * * and taken to the 
airwaves with a slick scare program.''
  So, Americans have every reason to be confused. Just where does the 
President stand on balancing the budget? Where does he stand on 
reforming welfare? Where does he stand on cutting 

[[Page S 17330]]
taxes for America's families? Where does he stand on saving Medicare?
  The President's decision on this bill will, once and for all, clear 
up all confusion. Because by signing this bill, the President will 
finally allow his actions to match his words. But by vetoing it, he 
will make very clear that he is against a balanced budget, and the 
benefits it will bring. He is against welfare reform. He is against tax 
reduction. He is against saving Medicare.
  And by vetoing this bill, the President will be against many other 
provisions. He will be against a capital gains tax cut. He will be 
against putting an end to the marriage penalty tax. He will be against 
medical savings accounts. He will be against adoption tax credits. He 
will be against helping Americans who provide care to their parents.
  Now, when President Clinton vetoes this bill, he will shake his head, 
and he will say what many of his liberal allies have said today. He 
will say that he would like to sign this bill, but it's just too harsh. 
He will say that we are cutting spending on programs for the less 
fortunate among us. He will say we are cutting Medicare. He will say 
our tax cuts favor the business community.
  He will say all that again and again. And he will be wrong every time 
he says it.
  He will be wrong because this bill does not cut overall Federal 
spending--it allows it to grow by 22 percent over the next 7 years.
  He will be wrong because this bill does not cut Medicare. In fact, 
Medicare will continue to grow at a rate of 7.7 percent a year.
  He will be wrong because this bill does not cut programs to the 
needy--it allows 34 percent growth over the next 7 years.
  He will be wrong because total funding for student loans will be 
increased by nearly 50 percent over the next 7 years.
  He will be wrong because 73 percent of the tax cuts in this bill will 
help families throughout their lives.
  Those are the facts. The President will try his best to obscure these 
facts with emotional rhetoric. In fact, the Democrat National Committee 
already has a television commercial on the air trumpeting the 
President's so-called balanced budget proposal, and saying that the 
Republican plan will cut Medicare.
  It's a nice commercial with catchy music, but not a word of it is 
true. As I have said, the President has never submitted a budget 
anywhere near balance. And the Republican plan increases Medicare 
spending.
  Mr. President, I'm from a farm State, and I want to say to the 
farmers of Kansas and the farmers of America that this bill is also 
important to them.
  Since the days of Franklin Roosevelt, the Government has been in the 
business of telling farmers how to farm. Under this bill, that will 
end, and beginning in 1996, farmers will be planting for the market 
place.
  Under this bill, farmers will have full planting flexibility, 
elimination of set-asides, program simplicity, and a farm policy that 
transitions farmers into the next century without disrupting the farm 
economy or land values.
  While I am concerned about farmers receiving payments in good years, 
I am pleased we were able to cap the entitlement spending of 
agriculture programs. We accomplish this goal through a declining 
transition payment which is guaranteed to the farmer. In exchange, 
farmers will be required to maintain their land conservation efforts in 
both good and bad years. And this bill also protects family farms by 
providing some much needed estate tax relief.
  Mr. President, let me conclude by saying that I know that the 
American people have wondered about the events taking place in 
Washington this week. They have wondered why the Government was shut 
down. They have wondered why Congress and the White House aren't 
talking to each other.
  Well, as I have said many times this week, I wonder why we haven't 
spent more time talking to each other. And I remain ready to talk with 
the President any time to put all Federal employees back to work.
  But I also would tell Americans that if ever there was a debate you 
wanted your elected Representatives to have, this is it. This is it. 
Because we are debating your future. We are debating the future of your 
children and grandchildren. We are debating the future of America.
  I speak for all Republicans in saying that, as we approach 
Thanksgiving, we are thankful to have the opportunity to stand for 
something.
  We are thankful to have the opportunity to stand for fundamental 
change.
  We are thankful to have the opportunity to stand for a better future 
for the next generation of Americans.
  And let me close by saying--and I know I speak for all Members of the 
Senate--that we are thankful that we have the opportunity to serve with 
a Senator as courageous and committed as Pete Domenici, and I salute 
him for his many years of leadership in support of a balanced budget.
  Mr. President, let's do the right thing for America's future. Let's 
pass the Balanced Budget Act of 1995.
  The PRESIDING OFFICER. The majority leader is informed the yeas and 
nays have not been ordered.
  Mr. DOLE. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the motion to 
recede from the Senate amendment to H.R. 2491 and concur thereto with 
an amendment.
  The yeas and nays have been ordered.
  The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 52, nays 47, as follows:

                      [Rollcall Vote No. 584 Leg.]

                                YEAS--52

     Abraham
     Ashcroft
     Bennett
     Bond
     Brown
     Burns
     Campbell
     Chafee
     Coats
     Cochran
     Coverdell
     Craig
     D'Amato
     DeWine
     Dole
     Domenici
     Faircloth
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Hatfield
     Helms
     Hutchison
     Inhofe
     Jeffords
     Kassebaum
     Kempthorne
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Pressler
     Roth
     Santorum
     Shelby
     Simpson
     Smith
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--47

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Byrd
     Cohen
     Conrad
     Daschle
     Dodd
     Dorgan
     Exon
     Feingold
     Feinstein
     Ford
     Glenn
     Graham
     Harkin
     Heflin
     Hollings
     Inouye
     Johnston
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Moseley-Braun
     Moynihan
     Murray
     Nunn
     Pell
     Pryor
     Reid
     Robb
     Rockefeller
     Sarbanes
     Simon
     Wellstone
  So the motion was agreed to.
  Mr. COATS. Mr. President, I move to reconsider the vote.
  Mr. KEMPTHORNE. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mrs. BOXER addressed the Chair.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER Mr. President, I will make a unanimous-consent request to 
the Republican side. I anticipate, as they did last night, they will 
once more object.
  I would ask that there be order in the Chamber?
  The PRESIDING OFFICER. The Senate will be in order. The Senator from 
California was propounding a unanimous-consent request but no one could 
hear.
  The Senator from California.
  Mrs. BOXER. Mr. President, in about 3 minutes I will offer my 
unanimous-consent request. But I do appreciate your getting order in 
the Chamber so that I can make a comment very briefly for a minute on 
another matter, and then talk about my unanimous-consent request.

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