[Congressional Record Volume 141, Number 192 (Tuesday, December 5, 1995)]
[Extensions of Remarks]
[Pages E2291-E2293]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        REAL TALK ABOUT MEDICARE

                                 ______


                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Tuesday, December 5, 1995

  Mr. STARK. Mr. Speaker, I commend to my colleagues an opinion piece 
in today's Washington Post. Professors Jerry Mashaw and Theodore Marmor 
provide a straight to the point analysis of what maintaining the best 
health insurance program in the world, Medicare, requires.

                        Real Talk About Medicare

       Although Medicare reform has been at the very center of the 
     budget negotiations between Congress and the administration, 
     much of the political discussion on this issue has been about 
     as thoughtful as a food fight.
       Republicans have made the claim that Medicare faces 
     bankruptcy and offered their ``Medicare Preservation Act,'' 
     cutting $270 billion in projected spending on the program in 
     order to ``preserve, protect and strengthen'' the program. 
     Democrats respond that this would mean Medicare's destruction 
     and that big cuts are unnecessary--except to facilitate tax 
     cuts for the rich while keeping the Republican promise to 
     eliminate the deficit.
       Behind this unilluminating, alarmist debate there are some 
     hard facts that need to be considered:
       Medicare does need fiscal adjustment. A 10 percent annual 
     growth rate in program costs is simply not sustainable in the 
     long run. Changes in longevity, medical technology, cultural 
     conceptions of adequate medical care, national fiscal 
     capacity and a host of other factors demand that any long-
     term program of medical insurance accept periodic 
     adjustments. Rigid defense of the status quo is silly. But so 
     is the demand for ``preservation'' by complete overhaul. 
     Reformers should attend to the many small adjustments that 
     really will preserve a highly valued program. They should not 
     search for some untried one big thing that will ``fix'' the 
     system for all time.
       Talk of the projected ``bankruptcy'' of the ``trust fund'' 
     is an unhelpful way to think about the urgency of Medicare's 
     financial problems. The trust fund is an accounting 
     convention signaling that Medicare's hospital insurance (Part 
     A) is financed by earmarked taxes. If time is needed to make 
     sensible, gradual adjustments in Medicare, the ``fund'' for 
     Part A can be increased by extremely modest new taxes or by 
     temporary transfers from the surpluses in the Social Security 
     retirement accounts. In any event, no one is going to wake up 
     some Saturday morning to find that his hospital coverage has 
     suddenly ceased because Medicare is ``broke.''
       Costs are not the only problem. For example, major elements 
     in the treatment of chronic disease are not covered by 
     Medicare, nor are pharmaceutical therapies and long-term 
     care. These gaps not only ensure that the program fails to 
     meet important needs of the elderly and the disabled, they 
     also promote costly gaming of the system. To get Medicare 
     payments for nursing home care, patients must be cycled 
     through hospital stays, whether needed or not. Personal 
     assistance must be provided by highly paid nurses, even if 
     the ``medical'' content of the care is minimal.
       Reform should concentrate on helping Medicare meet the 
     genuine needs of beneficiaries and avoid artificial 
     boundaries that cannot, in any case, be policed effectively. 
     Broadened coverage need not necessarily be the enemy of cost 
     control and in some instances may be its ally.
       Lest this proposal for expanded coverage suggest we have 
     lost touch with fiscal reality, we must emphasize that the 
     costs of care may be reduced in many ways. Less expensive 
     forms of care can substitute for more heroic interventions. 
     Unnecessary and marginally necessary care can be lessened. 
     The amounts paid for particular interventions can be 
     restrained.
       But reformers should remember that Medicare administrators 
     have been quite successful at constraining costs when given 
     the tools and political support to do so. They can be even 
     more effective in the current context, in which private 
     insurers are doing similar things. Providers now have nowhere 
     to hide from system-wide demands for cost control.
       Taxes can be raised. So can premiums. Anyone who thinks 
     that an earmarked tax for a popular program can't be 
     increased marginally in the current political climate simply 
     has not been paying attention to what we have been doing over 
     the past decade--or to what opinion polls say Americans will 
     support. On the other hand, there is no reason that a program 
     originally designed to prevent financial catastrophe for the 
     elderly and disabled should use general revenues to subsidize 
     80 percent of all their expenditures for physician services 
     (Part B). Some of these costs can and should be distributed 
     differently. In other words, reform should (and almost surely 
     will) require some adjustments in current payment 
     arrangements: who pays, how much and through what types of 
     levies, charges or deductibles.
       Finally, those who are old or disabled--and also sick--
     deserve a more patient-friendly system of health insurance. 
     Offering them a smorgasbord of private insurance alternatives 
     may appeal to those for whom ``privatization'' is the 
     presumptive answer to all questions of public policy. The 
     political and economic realities, however, are very 
     different.
       This type of ``freedom of choice,'' not of doctors but of 
     ``plans,'' would increase the administrative costs and 
     complexity of Medicare while driving most of the old and the 
     sick to distraction. How it would save federal dollars 
     remains a mystery. Moreover, responsible privatization would 
     actually require massive federal regulation of the insurance 
     industry to try to prevent ``cherry picking'' of the better 
     risks and cost shifting between the Medicare and non-Medicare 
     patients by insurers covering both.
       The earlier proposal for mandatory HMOs for all generated 
     effective political resistance--and for good reason. Most 
     HMOs have catered to a quite different and much healthier 
     slice of the population. Whether HMOs can serve the elderly 
     and disabled well, and at reduced costs, is unknown.
       Reforming Medicare will be neither simple nor painless, and 
     wise solutions are unlikely to emerge from political 
     processes that distort the real issues and the real 
     alternatives. President Clinton should veto virtually any 
     Medicare ``reform'' that emerges from the current, 
     overheated, political context. The president should then 
     remind Sen. Bob Dole and his congressional colleagues of the 
     senator's earlier suggestion for a presidential commission on 
     Medicare that would not report until after the 1996 
     elections. Handing off to a commission really is the right 
     thing to do now just as it was in achieving sensible tension 
     reforms in the early 1980s.
     
[[Page E 2292]]


                      NATO ENLARGEMENT AND RUSSIA

                                 ______


                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                       Tuesday, December 5, 1995

  Mr. HAMILTON. Mr. Speaker, on October 10, 1995, I wrote to Secretary 
of State Christopher concerning a study on NATO enlargement, issued by 
NATO in September 1995. I asked a number of questions about the study 
and the Russia factor in NATO policy. On November 28, 1995, I received 
a detailed reply from the State Department. I would like to bring the 
correspondence to the attention of my colleagues. The text follows:

                         Committee on International Relations,

                                 Washington, DC, October 10, 1995.
     Hon. Warren Christopher,
     Secretary, Department of State,
     Washington, DC.
       Dear Mr. Secretary: I write with respect to the recent 
     study on NATO enlargement, issued by NATO on September 20, 
     1995. I would like to ask a number of questions about the 
     study and about the Russia factor in NATO policy.
       1. The North Atlantic Council communique of May 30, 1995 
     states: ``When the members of the Alliance decide to invite 
     new members, their objective will be to enhance security for 
     all countries in Europe, without creating dividing lines.''
       How will NATO enlargement enhance the security of those 
     European states that are not invited to join NATO?
       How will NATO enlargement enhance security in Europe if key 
     European powers--Russia, and perhaps states not invited to 
     join NATO--oppose that enlargement?
       How can NATO enlargement avoid creating new dividing lines 
     in Europe?
       2. The study of September 20th states: ``Russia has raised 
     concerns with respect to the enlargement process of the 
     Alliance.''
       Does Russia have concerns about enlargement, or does Russia 
     oppose NATO enlargement?
       What is the impact of recent NATO airstrikes in Bosnia on 
     Russia's perspective on NATO enlargement?
       Does any political figure in Russia today support 
     enlargement of NATO?
       How do you respond to the stated views of leading Russian 
     reformers that NATO enlargement undercuts political and 
     economic reform and reformers, and enhances reactionary 
     forces in Russia?
       3. President Yeltsin stated last month that NATO's 
     expansion to the ``borders of Russia'' would ``light the 
     fires of war all over Europe.''
       How do you respond to Russian statements that NATO 
     enlargement will re-create new and hostile blocs in Europe?
       4. How do you expect Russia to respond to NATO enlargement?
       Would you expect increased pressure by Russia on 
     neighboring states?
       Would you expect Russia to repudiate arms control 
     agreements, or try to re-create military alliances?
       How would military confrontation between NATO and a non-
     communist Russia serve the interests of the United States?
       5. What is your strategy for convincing Russia, Ukraine, 
     Belarus and other states that NATO enlargement enhances their 
     security?
       What precise relationship do you envisage between an 
     enlarged NATO and Russia?
       6. The NATO study of September 20th mentions that NATO aims 
     to achieve a ``political framework for NATO-Russia 
     relations'' by the end of the year.
       What is the content of that proposed NATO-Russia framework?
       When the study mentions ``elaborating basic principles for 
     security cooperation,'' what does that mean? What are those 
     basic principles?
       When the study mentions ``the development of mutual 
     political consultations,'' what does that mean? How would 
     that differ from current consultation?
       7. The NATO study makes the following statements:
       (Paragraph 23) ``We have agreed that constructive, 
     cooperative relations of mutual respect, benefit and 
     friendship between the Alliance and Russia are a key element 
     for security and stability in Europe.''
       (Paragraph 27) ``NATO decisions, however, cannot be subject 
     to any veto or droit de regard by a non-member state . . . ''
       How do you reconcile these statements?
       If NATO decides to admit new members over the objections of 
     Russia, how would this create constructive, cooperative 
     relations between NATO and Russia?
       How would enlargement of NATO over Russia's objections 
     enhance security and stability in Europe?
       I appreciate that these questions are difficult, but I 
     believe your answers are important in enhancing articulation 
     and public understanding of U.S. and NATO policy.
       I look forward to your early reply.
       With best regards.
           Sincerely,
                                                  Lee H. Hamilton,
                                        Ranking Democratic Member.
                                  ____



                                     U.S. Department of State,

                                Washington, DC, November 28, 1995.
       Dear Mr. Hamilton: You have asked a thoughtful series of 
     questions on NATO enlargement and NATO-Russia relations in 
     your October 10 letter to Secretary Christopher. Agreement on 
     a new framework for security cooperation in Europe is a task 
     of historic proportions. Your voice has been one of the most 
     consistent in support of a strong, decisive U.S. role in the 
     world. We have especially appreciated your support for our 
     comprehensive approach to European security, of which NATO 
     enlargement is a very important component.
       In preparing this reply, we welcomed the opportunity to 
     review and sharpen our own thinking on these key issues. 
     Because the security situation in Europe is continuously 
     evolving, we and our NATO allies have sought to be flexible 
     in responding to the fundamental changes that have taken 
     place since 1989. However, we have been firm and absolute in 
     our commitment that Alliance policies be inclusive rather 
     than exclusive. This has been especially true in regard to 
     Russia and NATO-Russian relations.
       Your letter begins by asking how NATO's eventual 
     enlargement will enhance the security of non-members and 
     avoid the creation of new divisions in Europe. Before turning 
     directly to that question, I want to make two important 
     points. First, the Alliance's failure to expand would not be 
     consistent with the evolutionary changes taking place in 
     Europe. A number of European states have made tremendous 
     political and economic progress in recent years and will soon 
     be ready for full membership in various Western institutions. 
     To exclude the possibility of their eventual NATO membership 
     would condemn these countries to a security ``grey zone,'' 
     which would itself be a source of instability. Moreover, it 
     would freeze the Alliance within artificial boundaries--set 
     by the historical anomaly of the Cold War--at the same time 
     other institutions are adapting to meet new political, 
     economic and security realities. Instead, as Secretary 
     Christopher has said, ``Europe's institutional arrangements 
     should be determined by the objective demands of the present, 
     not the tragedies of Europe's past.''
       Second, NATO's eventual enlargement will not take place in 
     a vacuum. It represents but one aspect of our approach to the 
     broader evolution of Europe's security architecture. European 
     affairs can no longer be defined within the old ``zero-sum'' 
     framework; the security of one state is indivisible from the 
     security of all. Bodies such as the European Union (EU), the 
     Western European Union (WEU), the Council of Europe (COE) and 
     especially the Organization for Security and Cooperation in 
     Europe (OSCE) will each play important roles as economic, 
     political and security institutions continue to adapt and 
     develop over the coming years. Each of these bodies 
     contributes to European integration and stability. While NATO 
     remains the key link between the U.S. and Europe, we should 
     avoid lending credence to the false notion that NATO is the 
     only organization with a direct impact on the European 
     security equation.
       It is within this overall framework that NATO can expand 
     without creating new divisions in Europe. Because those 
     states which do not join the Alliance--either early or at 
     all--will continue to participate in European bodies like the 
     OSCE, they will not be excluded from key decision-making 
     institutions. While we reject any suggestion that the OSCE 
     should assume the role of NATO's overseer, we nonetheless 
     recognize that as the only all-European institution the OSCE 
     plays a unique role in setting the European political and 
     security agenda. For that reason, we are supporting the 
     OSCE's ongoing work on a European security model for the next 
     century and have consistently pushed for practical steps to 
     enhance the organization's effectiveness.
       Moreover, we do not accept the view that integration can 
     only be achieved through membership in a particular 
     institution. In some cases, membership is appropriate; NATO's 
     expansion process will determine which states should join the 
     Alliance. But in many other cases, active diplomatic 
     engagement with an organization can be almost as useful as 
     membership. A good example of this is the U.S. relationship 
     with the European Union; we may not have a vote in EU 
     councils, but through an active program of consultation and 
     policy coordination we can often influence EU decisions. The 
     two key elements in NATO's evolution and program of outreach 
     have thus been the creation of the North Atlantic Cooperation 
     Council (NACC) and the Partnership for Peace (PFP), which 
     provides fora for non-member states to engage directly and 
     consult closely with NATO.
       The NACC and PFP ensure that non-members are able to 
     cooperate with the Alliance on key European security issues. 
     Russia and other states have taken full advantage of the 
     opportunities thus provided to make their views known on a 
     host of issues. Moreover, states which do not eventually join 
     the Alliance can remain active members of the NACC and PFP. 
     The post-expansion Alliance will not shut itself off from the 
     rest of Europe; an enlarged NATO will have the same need for 
     interaction and close relationships with non-members that 
     currently exists. By expanding its membership and by 
     maintaining these important and productive relationships, 
     NATO will avoid either the reality or the appearance of 
     creating new divisions or new blocs in Europe.
       Turning to your questions regarding Russian concerns about 
     NATO enlargement and the future of NATO-Russia relations, the 
     Alliance and Russia have a complex, still 

[[Page E 2293]]
     evolving relationship, which we hope will become a crucial element of 
     the emerging European security architecture. This is not to 
     suggest that NATO-Russia relations are without strain. As you 
     note, Russian officials have objected to NATO actions in the 
     former Yugoslavia, asserting that the Alliance acted without 
     properly consulting other interested states. While we reject 
     such contentions--NATO acted under a clear UN Security 
     Council mandate--the fact remains that many Russians perceive 
     themselves and their country as having been marginalized. 
     Similarly, President Yeltsin and other senior Russian 
     officials have voiced serious concerns about NATO's 
     enlargement, often in quite stark terms.
       Although Moscow's opposition to NATO enlargement is often 
     based on misperceptions, we nevertheless recognize that these 
     arguments must be addressed. Similarly, Russian concerns 
     about their stature in European affairs are real, but our 
     bilateral discussions--most recently at Hyde Park--have made 
     clear that both sides remain committed to promoting Russia's 
     integration into key Western structures. The Russian 
     leadership understands that altering or otherwise slowing 
     this course would only isolate Russia and hinder reform at 
     home. While we must be careful neither to underestimate nor 
     exaggerate the importance of European security matters in 
     Russian domestic politics, Russian views will continue to 
     evolve and we must be prepared for a lengthy--and sometimes 
     heated--dialogue with the Russian government.
       To put the broader issue of NATO-Russia relations in 
     context, you should recall that the Alliance has engaged in a 
     concerted effort to develop a close, cooperative partnership 
     with the new Russia. Even before the break-up of the Soviet 
     Union, NATO had sought to establish productive, non-
     adversarial relations with Moscow. With the dissolution of 
     both the Warsaw Pact and the USSR, NATO created the North 
     Atlantic Cooperation Council and the Russian Federation 
     became one of its first members. This consultative 
     arrangement set the stage for the establishment early last 
     year of the Partnership for Peace, which Russia joined in 
     June 1994. Within PFP, Russia has had the opportunity to 
     engage directly with the Alliance to develop the 
     capability of working with NATO in support of common 
     interests and goals in Europe.
       Moreover, under the ``Beyond PFP'' arrangement approved 
     this past May, NATO and Russia have agreed to take their 
     relationship a step further in terms of consultations and 
     active cooperation. Finally, as you note in your letter, the 
     Alliance has offered to develop a ``political framework'' for 
     future NATO-Russia relations. As we envision it, in the near 
     term NATO and Russia would agree on the basic principles 
     which would guide the relationship well into the 21st 
     century; NATO has already tabled a draft--which draws heavily 
     on existing documents and agreements--for Russia's 
     consideration. Once the final principles are hammered out, we 
     would work together to turn them into a more formal, long-
     term understanding that would facilitate NATO-Russian 
     cooperation.
       Russia, therefore, already has a quite significant 
     relationship with NATO. The key determinant in how our 
     relations develop will be Russia's implementation of the 
     various partnership mechanisms now available. This is an 
     ongoing, evolutionary process, which will certainly be 
     affected to some degree by the domestic political climate in 
     Russia. We remain convinced, however, that Russian government 
     will recognize that it is to Moscow's advantage to develop 
     and maintain a close relationship with the Alliance as part 
     of Russia's overall policy toward Europe. While no Russian 
     leader has publicly endorsed NATO's enlargement, senior 
     officials--including President Yeltsin--have repeatedly 
     acknowledged the importance of partnership with NATO and the 
     West.
       Thus, in policy-level discussions with the Russians we will 
     continue to state clearly that NATO is willing to go the 
     extra mile in developing an effective partnership with 
     Russia, that the Alliance's eventual enlargement is not aimed 
     against Russia or any other state, and that Moscow's 
     interests would not be served by repudiating the still-
     evolving NATO-Russian relationship (or any arms control 
     agreements) because of NATO expansion. We will also continue 
     to monitor carefully reports of undue Russian pressure on 
     neighboring states to create new military blocs, as well as 
     reports of Russian plans for military responses to NATO's 
     enlargement. As necessary, we will make clear that such moves 
     would only isolate Russia, impeding its further integration 
     into the European mainstream.
       Our demonstrated commitment to partnership and cooperation 
     has already alleviated some of the fears and concerns 
     expressed by Russian officials. For example, our active 
     effort to involve the Russians in the implementation of a 
     Bosnian peace settlement has demonstrated we do not want to 
     go it alone. Instead, we have engaged in an intensive, 
     ongoing dialogue with the Russians on this sensitive 
     issue, most recently between President Clinton and 
     president Yeltsin on October 23 and between Secretary of 
     Defense Perry and Minister of Defense Grachev on November 
     8. While we will not compromise on the absolute need for 
     an effective, NATO-led operation, if we are ultimately 
     able to settle on a workable arrangement for Russian 
     engagement we will have helped assuage Russian concerns 
     that NATO is only interested in marginalizing Moscow.
       In your final question you ask how the statements ``We have 
     agreed that constructive, cooperative relations of mutual 
     respect, benefit and friendship between the Alliance and 
     Russia are a key element for security and stability in 
     Europe'' and ``NATO decisions, however, cannot be subject to 
     any veto or droit de regard by a non-member state . . .'' can 
     be reconciled. But these statements are not, in fact, 
     contradictory. Notwithstanding NATO's approach to 
     enlargement, the Alliance has a strategic interest in seeking 
     constructive, cooperative relations with Russia. The fact 
     that we are actively planning to expand simply means that the 
     enhanced Russian-NATO relationship will be with a larger 
     NATO. We will listen to Russia's concerns about enlargement 
     just as we listen to the thoughts of our other partners; 
     their views will be taken into consideration and will 
     certainly influence our thinking. But influence and a veto 
     are two quite different things; neither Russia nor any other 
     non-member will have a veto over Alliance membership (or any 
     other) decisions.
       Thank you for the opportunity to respond to your thoughtful 
     questions. We look forward to continuing our exchange as the 
     Alliance moves closer to enlargement and as NATO-Russian 
     relations continue to develop.
           Sincerely,

                                             Wendy R. Sherman,

                                           Assistant Secretary for
     Legislative Affairs.

                          ____________________