[Congressional Record Volume 143, Number 90 (Tuesday, June 24, 1997)]
[Senate]
[Pages S6105-S6120]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      BALANCED BUDGET ACT OF 1997

  The PRESIDING OFFICER. The Senate will now resume consideration of S. 
947, which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 947) to provide for reconciliation pursuant to 
     section 104(a) of the concurrent resolution on the budget for 
     fiscal year 1998.

  The Senate resumed consideration of the bill.
  Pending:

       Gregg modified amendment No. 426, to provide for terms and 
     conditions of imposing Medicare premiums.
       Harkin amendment No. 428, to reduce health care fraud, 
     waste, and abuse.
       Kennedy/Wellstone amendment No. 429, to strike the 
     provision relating to the imposition of a copayment for part 
     B home health services.
       Motion to waive a point of order that section 5611 of the 
     bill violates section 313(b)(1)(A) of the Congressional 
     Budget Act of 1974.


                           Amendment No. 426

  The PRESIDING OFFICER. There will now be 15 minutes of debate prior 
to a vote on or in relation to the Gregg amendment No. 426.
  Mr. DOMENICI. Parliamentary inquiry. Is it not time for the proponent 
and opponents to share some time equally in reference to the Gregg 
amendment?
  The PRESIDING OFFICER. That is correct. There are now 15 minutes 
equally divided on the Gregg amendment No. 426.
  Mr. DOMENICI. I yield the floor to Senator Gregg.
  Mr. GREGG. Mr. President, I am not sure who rises in opposition to 
this amendment. I understand there are some concerns that have been 
raised. Let me review the amendment so people understand what it does.
  Essentially, this amendment creates a marketplace, creates 
competition, and it gives seniors the opportunity to go into the 
marketplace, be thoughtful purchasers, and the result of being 
thoughtful purchasers is getting an actual return, a monetary return, 
for being thoughtful purchasers.
  What the amendment does is strike the language in the bill which says 
that there can be no cash incentives tied to any sort of Choice plan. 
Now, in the original bill as it was presented by myself, the original 
Choice bill, the vast majority of which has been incorporated in this 
bill, we had a section which said that if a senior was able to purchase 
a plan at less dollars, then the senior would be allowed to keep 75 
percent of the savings, and 25 percent of the savings would go into the 
part A trust fund. Under the bill as it is presently structured, the 
practical effect was it created more marketplace forces. It meant 
seniors would be more thoughtful purchasers of health care. This is 
important.
  Second, it meant that the health care provider groups like HMO's, 
PPO's and the PSO's who are now being empowered to compete for senior 
dollars, those groups would have a reason to deliver the same benefit 
structure as

[[Page S6106]]

Medicare gives today at the same quality but deliver it at less cost. 
It is called capitalism. It is called a marketplace force. It is what 
we are trying to put in place to try to control the cost of health care 
and Medicare, and it is what is working in the private sector.
  Under the bill as it is presently structured, that opportunity would 
be eliminated. Now, we are not suggesting that opportunity has to be 
pursued. We are just saying let's leave open that opportunity under 
HCFA's guidance, and by the way, if it was determined this might be a 
way to create better competition and better health care delivery, it 
would be available.
  Now, I cannot speak for the opposition, but what I have heard from 
the opposition is that there is a feeling that this cash rebate may in 
some way affect the Treasury. Well, it does not. Under the present law 
as it is structured in this bill, if there is no cash rebate, the only 
beneficiaries of more efficiency are the provider groups. They get to 
keep the money. They get to keep the money. They do not rebate it to 
the seniors. They get to keep it, to quote Jerry McGuire.
  Then I heard another comment, ``Basically what we want to do is 
encourage the provider groups to supply more benefits, not to supply a 
financial rebate to senior citizens.'' I think that makes sense. I 
think that should be an option. I think provider groups like PPO's that 
can deliver the services for less might want to throw in eyeglass care, 
might want to throw in prescription care. I think it is a good public 
policy decision to encourage that. But at the same time I bet you there 
are some provider groups today, because we pay so much in insurance for 
Medicare, who could pay the cost of eyeglass care and some percentage 
of prescription drug care and still be delivering that service for 
considerably less than what the basic premium is today that we pay in 
Medicare. Who is going to keep that difference? The provider groups. 
They will keep it in profit.
  Now, I do find it ironic that people would oppose the concept that we 
want to open it up to competition in a way that allows the senior 
citizen to benefit from the cost savings, by putting some pressure on 
those provider groups to have to say, ``We are going to make $100 extra 
on this contract. Maybe we better return $50 to the senior citizen 
because, if we do not, our competitor down the street will make that 
$100 and they will return that $50 and they will get this client.''
  Right now this is an issue. I understand there are some undercurrents 
of opposition to this. I am appreciative of that. The fact is that this 
is an attempt to open the marketplace to more competition and create 
more cost-conscious purchasers and buyers, and as a result I think it 
is a good approach. It does not demand that that occur. It does not 
even allow that to occur in the first instance. It simply makes that 
additional avenue of competition available by giving HCFA the authority 
to do it rather than banning HCFA from having the authority to do it.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from New Jersey controls 7\1/2\ 
minutes.
  Mr. LAUTENBERG. Mr. President, I will yield myself such time as 
needed to respond with my opposition to the amendment of the Senator 
from New Hampshire and rise in support of the provision in the 
reconciliation package that was developed by Senator Roth and Senator 
Moynihan and other members of the Finance Committee.
  Mr. President, the reconciliation bill establishes a new program 
known as Medicare Choice, which will give Medicare beneficiaries more 
options for the type of health care that they will receive in the 
program. Seniors will be able to choose from HMO's, PPO's, and medical 
savings accounts, among several other options. The committee's proposal 
is intended to increase Choice for seniors. At the same time, it is 
meant to avoid the risk that the Medicare Program would move toward a 
two-tiered or multitiered system in which some seniors, especially the 
healthier and wealthier, enjoy benefits not available to the others.
  Under the committee-reported bill, providers of different services 
are paid a set amount. They then can compete for the consumers based on 
the quality and types of benefits they provide. If, for example, one 
HMO can operate more efficiently, it can plow the resulting savings 
into providing services that other less-efficient HMO's could not. This 
type of system is intended to ensure that seniors get the best quality 
care for each Federal dollar that gets spent. I think that makes sense.
  The Finance Committee also wanted to avoid a situation in which 
providers limit their benefit package to attract those who are healthy 
and who therefore could take advantage of a cheaper plan that offers 
fewer benefits. This could ultimately lead to a Medicare system that 
segregates the healthy from the ill and that forces sicker people to 
pay more to get the health care they need.
  Mr. President, I am going to stick with the Finance Committee's 
proposal on this. Let's give seniors more choice but let's make sure 
that the choices offer the type of quality health care they need and 
deserve.
  When I think of plans that may offer premiums--maybe they offer 
theater tickets or baseball games or what have you--to seduce or induce 
people to go their way, I think that is a terrible idea. It can provide 
a large provider with a monopoly of opportunities. ``Spend your money 
now, you will get it back.'' You will have these people locked into 
your service, so spend it up front. It is a calculated marketing cost. 
Frankly, I hate to see our senior citizens get caught up in a scheme 
like that.
  Mr. President, I hope we will be able to muster the support that is 
required here for the Finance Committee. Once again, this is now a new 
proposal. It alters the bill as originally developed. I do not think we 
ought to be doing it at this time.
  I reserve the remainder of my time.
  Mr. GREGG. I appreciate the comments of the Senator from New Jersey, 
but they are inaccurate. This does not create a two-tier system.
  Under the law, the basic benefits package of the Medicare system has 
to be supplied by all providers. Therefore, any provider that comes 
forward and produces a less costly system is going to be producing a 
system that still meets the basic benefits package of the Medicare 
system. The added benefits might be eyeglasses or prescription drugs, 
but those are benefits which are not presently covered by Medicare 
anyway. So there is no opportunity for a two-tiered system.
  What the Senator from New Jersey said that was accurate is that 
efficient suppliers of health care will end up creating a savings. What 
I am pointing out is that savings then flows to the supplier of the 
health care, the HMO or the PPO. You are basically underwriting the big 
health care companies at the disadvantage of seniors because seniors 
get none of that savings unless there is a benefit added that they may 
not want. They may not want eyeglasses. They may not want prescription 
drugs. They may have that under another system. Why not make this 
option available?
  However, I have been asked by the chairman of the committee to 
withdraw the amendment at this time. I have great respect for the 
chairman of the committee and will acquiesce to his request. I 
understand his concern. I believe this is bad policy as it is presently 
structured. It is not in the House bill, and I hope it will be 
straightened out in Congress because I think we ought to give seniors 
this chance.
  I ask unanimous consent to vitiate the yeas and nays and withdraw the 
amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 426) was withdrawn.
  Mr. NICKLES. Mr. President, I will be brief. I want to compliment my 
colleague from New Hampshire for offering this amendment.
  He mentioned this prohibition is not in the House bill. I hope to 
have something to do with the conference. I think he has brought out a 
very good point. We should allow some of these savings to go to the 
participants. So I appreciate his examination of the bill. That fact 
proves he has done his homework. I, for one, think he has pointed out a 
good option that we should allow to be available. I appreciate my 
colleague's attention in this matter. I will be happy to work with him 
to see if we can't come up with a good provision in conference.

  Mr. ROTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware is recognized.

[[Page S6107]]

  Mr. ROTH. Mr. President, I, too, want to join the distinguished 
Senator from Oklahoma in thanking our friend from New Hampshire and 
withdrawing the amendment. I think he has articulated the reason for 
the change. I think there is considerable merit to the idea, but I do 
appreciate the fact that he has withdrawn the amendment. I don't think 
it is appropriate at this time. We look forward to working with him.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I, too, want to join in saying to the 
distinguished Senator from New Hampshire that I saw this as a Choice 
proposal, an expansion of Choice. It wasn't a mandate. I thought it was 
a pretty good thing that we keep as much choice and potential for 
choice in the Medicare reform. I am sure this will be revisited at some 
point.
  As the manager for the majority, I would like to talk a little bit 
with the Senate about where we are. Could I inquire, none of the 
amendments are automatically up at this point, are they? Am I mistaken 
on that? Aren't they subject to a management decision on which ones 
come next?
  The PRESIDING OFFICER. The question would recur on No. 429, the 
Kennedy-Wellstone amendment to S. 947.
  Mr. DOMENICI. I thank the Chair. Might I then enquire, under the 
ordinary rules of amendments, how much time is left on the Kennedy-
Wellstone amendment, if it were all to be used?
  The PRESIDING OFFICER. The Chair will check on that.
  Mr. DOMENICI. That is fine. Is there any reason we should not go to 
the Kennedy-Wellstone amendment? I am sure Senator Roth has a 
substantial amount of time on the amendment. I want to yield the entire 
time in opposition to the amendment to the distinguished chairman of 
the Finance Committee. I may need a few minutes later. I will yield the 
Senator the time that is left. Can the Senator manage that?
  Mr. ROTH. Yes, I can manage that.
  The PRESIDING OFFICER. To answer the question of the Senator from New 
Mexico as to the time remaining on the Kennedy-Wellstone amendment, 
Senator Kennedy has 15 minutes and the Senator from New Mexico has 45 
minutes.
  Mr. DOMENICI. I will yield the 45 minutes to Senator Roth.
  Let me indicate to the Senate, so there won't be any 
misunderstanding, that what I am trying to do is get time used up or 
get time agreements. We don't intend to vote on the Kennedy-Wellstone 
amendment until early in the afternoon. So we can finish the debate and 
go to another one. I wanted to indicate that to the Senate at this 
point.
  Mr. LAUTENBERG. Mr. President, if I might just add a note here for 
all of our colleagues who are interested in amendments, or talking on 
the bill. Time is flying and we will be finished at about 7:30 tonight, 
I think it is, with no more time left. And then should any amendments 
be offered, they will be offered without debate or discussion and just 
voted upon.
  So I say to all of our colleagues within earshot, or through the 
staff, if you have amendments, you better get them here because pretty 
soon the time will have expired and you won't have an opportunity to do 
so.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Delaware is recognized for 45 
minutes.


                           Amendment No. 429

  Mr. ROTH. Mr. President, the Kennedy amendment would strike the $5 
coinsurance payment, and I think that would be a mistake. Let me start 
out by pointing out that home health care has exploded in cost over the 
recent years. It has been a serious problem that this particular aspect 
of Medicare has become extraordinarily expensive.
  As I said yesterday, according to the Prospective Payment Assessment 
Commission, which is commonly called PROPAC, Medicare spending on home 
health services was only 1 percent of Medicare spending in 1968. By 
1996, Medicare spending on home health care had increased to 14 percent 
of Medicare part A spending. In other words, it had gone from 1 percent 
to 14 percent. This is an increase that cannot be permitted in a 
program that is in financial difficulty.
  As we all know, Medicare is an extraordinarily successful program in 
providing health care to senior citizens. But we do face a serious 
problem with respect both to part A and part B if we do not bring the 
cost of these programs under control. As is well understood, part A 
will be in bankruptcy by 2001. If we don't correct it, it will be in 
debt to the tune of one-half trillion dollars by 2007. And we face the 
same kind of serious problems with part B. Part B--it is predicted--
will increase in cost roughly 8 percent a year in the coming year. So 
we have to bring these costs under control, and that is what we are 
seeking to do.

  As I said, home health care has exploded in cost. Just let me point 
out what has happened to the cost of this part of the program in the 
last several years. From 1989 to 1990, the cost went up 53 percent--in 
1 year, the cost of home health care went up 53 percent. The pattern 
has been a little better since then. In 1990-91, it went up 44 percent; 
in 1991-92, 40 percent; in 1992-93, 30 percent; in 1993-94, it went up 
30 percent; and in 1994-95, it went up 19 percent.
  Now, the reason home health care has exploded is because there are no 
adequate controls. For example, there has been a major increase in the 
number of beneficiaries using home health care. There has been an 
increase in the number of visits per beneficiary. I must also say that 
there has been a tremendous increase in the number of agencies 
providing home health care, and the Medicare payment system does not 
control the utilization of home care.
  So that is the nub of the problem. There is no reason for the 
beneficiaries to be concerned as to how they utilize this program 
because there are no copayments in the part B program, as there are in 
others. Let me point out that the cost growth of home care, due to the 
increase in visits per beneficiary, has indeed been very substantial. 
In 1983, 45 Medicare enrollees--let me put it this way. There were 45 
Medicare enrollees per thousand that used this program, an average 
annual of 28 visits. This was in 1983. In 1995, the number of Medicare 
enrollees per thousand jumped to 97--that is, from 45 to 97--and they 
used this program for an annual of 70 visits. That is 70 visits as 
compared with 28 visits in 1983.
  So the question is, Why has the utilization of Medicare's home health 
benefit grown so rapidly? Essentially, there are two factors explaining 
the growth. First, the home health benefits for Medicare beneficiaries, 
for all practical purposes, have been unlimited since 1980. Prior to 
1980, home health benefits were limited to 100 visits per beneficiary 
per year following a hospitalization. But in 1989, as a result of an 
agreement reached in a class action suit, Dougan versus Bowen, 
virtually all regulatory limitations on coverage were eliminated. And 
even today, based on Dougan, a beneficiary only needs to be homebound 
and under the supervision of a physician in order to receive home 
health care.
  Now, the cost growth in home care is partly due to the Medicare cost-
based payment system. Medicare pays home care companies the cost of 
each home care visit up to a per visit cost limit. Medicare does not 
limit the total number of home care visits. And the cost results are 
predictable. There is a great incentive for agencies to get into the 
business. That is one of the reasons we see the explosion of the number 
of agencies now in the home health care business.

  Medicare payments per visit are estimated to have increased by 1.6 
percent from 1993 and 1994, and the total number of Medicaid certified 
home health care agencies grew in 1991-95 by 52 percent from 5,949 
agencies in 1991 to a total of 9,040 in 1995.
  So, Mr. President, this is the reason it was felt necessary that 
there be a copayment on the part of the beneficiary so that there is 
more prudent use of this care than has taken place in recent years.
  Beginning in 1998, financing for the home health benefits will begin 
to be transferred from the part A to the part B trust fund. This will 
establish 100 visits--after the hospital stay--for home health benefits 
under part A with all other visits considered part of a new part B home 
health benefit. Consistent with Medicare's treatment of other part B 
services, the mark establishes cost-sharing for part B home health

[[Page S6108]]

service at $5 per visit billable on a monthly basis, and capped at an 
amount equal to the annual hospital deductible.
  I point out to my colleagues that creating this copayment is 
consistent with the way we handle part B. As a general rule, there is 
copayment of roughly 20 percent for services under part B. Five dollars 
per visit is substantially less than 20 percent. But it means that as 
beneficiaries utilize home health care they are going to be more 
careful in its utilization.
  Beneficiaries, I point out with respect to those who are under 100 
percent of Federal poverty, will not have to pay this $5 copayment fee. 
They will not have to pay this copayment fee because it will be covered 
by Medicaid. Our Medicaid Program has been structured to protect the 
poor and impoverished. And under that program he or she who is under 
100 percent of Federal poverty will be covered by Medicaid. So there 
will be no payment of the $5 fee by those who are impoverished under 
Federal standards.


                         Privilege of the Floor

  Mr. President, I ask unanimous consent for unlimited floor privileges 
for the duration of S. 947 for the following members of the Senate 
Finance Committee staff:
  Julie James, Gioia Bonmartini, Dennis Smith, Deloris Spitznagel, and 
Alexander Vachon.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ROTH. Mr. President, as I said, the purpose of the $5 copayment 
fee is to bring some balance into this program.
  I obviously cannot support the Kennedy amendment. I do not believe 
that the home health care copayment is a barrier to care nor that it is 
unreasonable.
  As I have already pointed out, from 1988 to 1996, spending on home 
health care grew an average of 37 percent per year. That is a growth 
that cannot be sustained if we are going to maintain Medicare as a 
program not only for those on it now but for the future. Medicare is 
going bankrupt. And this rate of growth is without question 
unsustainable. I cannot say too loud nor too clear that we need to 
assure that Medicare is preserved and protected. It is our 
responsibility to make certain that costs do not run out of control.
  Under current law, all Medicare benefits, except for home health and 
laboratory services, are subject to some form of beneficiary cost-
sharing. Let me reemphasize that. Under current law, all Medicare 
benefits, except home health and laboratory services, are subject to 
some form of beneficiary cost-sharing.
  The $5 home health copay will have beneficiary share--in some degree, 
financial responsibility for services with the program. Five dollars is 
not an unreasonable amount to ask beneficiaries to pay for a visit.
  The Prospective Payment Assessment Commission, which advises Congress 
on Medicare policy, supports--I underscore the word ``supports''--a 
modest beneficiary copay subject to an annual limit. That is exactly 
what this bill proposes to do.
  I also point out that a report recently issued by the Commonwealth 
Fund supports the idea of a $5 copay. The report claims there is a 
sensible approach--a sensible approach which would make beneficiaries 
sensitive to use but not form a barrier to care. That is exactly what 
we want. We want this program to be used on a prudent basis; a sensible 
basis. But, of course, we do not want it to be a barrier to those who 
need this form of care.
  As I have already indicated, those who cannot afford the $5 copay, 
those who are under 100 percent of Federal poverty, will be covered by 
Medicaid. They will not have to pay the $5 copay. Medicaid will pay it.
  So they are protected. Beneficiaries will not have to pay any copay 
for the first 100 home health cares after a hospital stay. Only those 
visits in excess of 100, or that do not follow a hospitalization, will 
have a copay. And the amount is limited every year to the hospital 
deductible, which is what beneficiaries who have home health after a 
hospital stay would have to pay the hospital.

  Mr. President, this is a modest proposal where according to the 
Congressional Budget Office only about one-third of home health users--
that is about 1.2 million beneficiaries--are likely to be subject to 
more than $100 in copays in a year. And only about 11 percent of home 
health users--that is roughly 380,000 beneficiaries--are likely to 
reach the annual cap.
  The copay for home health is not an untested idea. Until 1972, 
Medicare required a 20-percent copay for all part B home health visits. 
During health care reform, President Clinton's Health Security Act 
included a 20-percent copay on home health care.
  So the proposal that we have in the legislation before us is far more 
modest.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. Mr. President, I understand we have 15 minutes. Is that 
correct?
  The PRESIDING OFFICER. Fourteen minutes.
  Mr. KENNEDY. I yield myself 5 minutes.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I think there are some important points 
to make in response to the presentation of the chairman of the Finance 
Committee.
  The first point to be made is that $5 billion that are going to be 
collected from our senior citizens was never considered to be an 
essential part of the balanced budget program. When the Senate voted 
for a balanced budget, there was no comment that we were going to have 
to raise the copays for our elderly citizens for nursing home care.
  So this is something that has just been added by the Finance 
Committee in order, as they say, to discourage the utilization of home 
health care services. That is first.
  So this is not part of the whole budget agreement. It was a decision 
by the Finance Committee to pick up $5 billion that will be paid by the 
frailest elderly citizens of this country, most of them between 75 and 
80 years old, and primarily individuals that are on about $11,000 or 
$12,000 income, and primarily women. That is the profile of those that 
will be affected by this increase in the copay. That is first.
  Second, as anyone who has ever gone through and reviewed, or had 
hearings on overutilization, they will find out that it isn't the 
patient that is overutilizing the system.
  Of the groups in our society, by and large, if it is the patients 
that are overutilizing the system, it is the more affluent. They have 
the time to go down and overutilize the system. But, by and large, when 
you are talking about the frail elderly, it is very difficult for them 
to get out of their particular home, if they are in this situation, and 
utilize the systems. And so they are the ones who do not. But it is the 
doctors who are the ones that are prescribing these services. It is the 
doctors who are saying these home services are necessary. It is not 
just the elderly saying I want the services. It is the doctors who are 
saying these are important.
  Now, we had a wonderful citizen yesterday from our neighboring area 
of Maryland, Marian, who makes about $7,600 a year. She said, I get 
home health services three times a week. It is going to be $15 a week, 
and I am going to run up against the limit at the end of the year. Are 
we in the Senate going to say that Marian should not be washed during 
the course of the week? She will have to reduce it to one treatment 
over the course of the week? Are we going to here say that we have to 
add the $5 billion that is going to be used for tax cuts for the 
wealthiest individuals? Are we going to say to that elderly person, you 
are not going to get washed; you are not going to be able to have your 
legs stretched; you are not going to be able, because you are too old 
and have a hip problem, to be able to wash your feet?
  That is what we are talking about here. These are the kinds of 
services that are being provided.
  Now, I was here in 1972. It was the judgment of the Congress of the 
United States and the administration that we wanted to encourage home 
health services, to try and keep people in their homes if they wanted 
to stay there. They have maybe an option to go to a nursing home, but 
if they want to stay in their homes with their friends in a 
neighborhood and a community, they ought to have the opportunity and 
the

[[Page S6109]]

ability to do so. And so it was the judgment at that time, in order to 
encourage home services that provide actual savings in the total health 
expenditures, that we ought to do so. That is the basis for it.
  Now, that is what we are running up against, Mr. President, and I am 
really surprised that the Finance Committee would take this step, 
particularly when there are other steps that are included in this 
legislation to restrain the doctors from prescribing this. Do we 
understand? There are already provisions in the legislation that we are 
considering in the Finance Committee to discourage the doctors from 
prescribing this. But, no, the Finance Committee said, that isn't 
enough; we are going to discourage the doctors from sending you home, 
but if you get home or are going to be home, then you are going to pay 
that 5 extra dollars.
  We have the interim payment system, which is an agency-specific per 
capita cap, which before was limitless. Now it is limited. You have 
already put that in, Senators of the Finance Committee, which is going 
to be a further restraint. And that is to discourage the growth in the 
utilization of services. And you have a lump-sum percentage of payment 
systems like the hospitals which will be effective in 1999 that is 
going to further discourage this.
  Our point is we have already written into the Finance Committee the 
targeting, where the target ought to be, and that is with doctors to 
provide some limitation on home health services. We are not even in the 
position of having tried those provisions. No, we are already saying we 
are going to also put the burden on the senior citizens who are 
receiving the home health care services. It makes no sense. It is 
grossly unfair. It is bad health policy. There is absolutely no reason 
in our attempt to achieve the balanced budget that we ought to be 
taking it out on the most frail individuals who are receiving, under 
Medicare, home health care services, Mr. President. So I hope that this 
measure would be struck.
  I yield 5 minutes to the Senator from Minnesota.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, I am very proud to join Senator 
Kennedy's effort. I would say to my colleagues on both sides of the 
aisle that this amendment is a perfect example of where the rubber 
meets the road. We are not now talking about adding and subtracting 
numbers. We are not talking about statistics in the abstract. We are 
talking about the effect of what we do on people's lives. We are 
talking about how decisions we make can crucially affect the quality or 
lack of quality of lives of people all across our country--in 
Minnesota, Massachusetts, Delaware, Oklahoma, Tennessee, you name it.
  Mr. President, I just want to take on some of the arguments that have 
been made about why we need to go forward with this $5 copay on the 
home-based health care.
  First of all, I have heard it argued here that $5 is not that much. 
But we cannot make those arguments, in all due respect. There is a huge 
difference between our salaries and what we can afford and what an 
elderly person can afford.
  Now, when the argument is made, ``But, Senators, we have protection 
for those who are officially defined as poor,'' do you know where that 
definition comes from? Mollie Orshansky in 1963, Social Security, a 
minimal definition--a minimal definition. So now we are saying that a 
single elderly woman 80 years of age, who makes over $7,000 a year, she 
is not officially defined as poor, but we are going to charge her $5 
every time for a home-based health care visit. That is outrageous. That 
is outrageous.
  So, first of all, please, do not have any illusions, colleagues, that 
because we say the poor are taken care of, we really are taking care of 
vulnerable elderly people, because if you are a single person, single 
woman living at home and you are over the poverty level income--maybe 
you make $9,000 a year--you do not have any protection at all.
  Now, is there any Senator here, Democrat or Republican, who believes 
that a single woman living at home making $9,000, $9,500 a year can 
afford to pay $5 for each home health care visit?
  As to the expansion of this, in all due respect, I thought that what 
we were trying to do here, albeit we have not done it nearly as well as 
we should, is to make sure that as many elderly people as possible can 
live at home in as near normal circumstances as possible with dignity. 
We want to encourage people to be able to live at home. When one of our 
parents or one of our grandparents needs to have a home health visit 
once or twice or three times a week in order to stay at home and be 
independent and not have to be institutionalized, we should applaud 
that. It should not be surprising that this is more a part of what we 
do by way of investment in resources because more and more of the 
people in our country are living to be over 65 and 85. But if we want 
people to be able to stay at home and live with dignity, and we do not 
want people to be institutionalized, and we do not want to take away a 
benefit that is so important to vulnerable elderly people, even if they 
are over the poverty level income, which is defined in such a minimal 
way, we ought to for certain support this amendment.
  This amendment that Senator Kennedy and I have introduced is all 
about connecting this debate to people. This proposal in the Finance 
Committee of a $5 charge for every single home-based health care visit 
and support for elderly people is profoundly mistaken. Mr. President, 
let me repeat that. It is profoundly mistaken. Please, colleagues, 
admit to the fact that we may have made a mistake here and that we can 
do better for elderly people. Therefore, I hope that we get a huge vote 
for this amendment.
  I yield the floor.
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER (Mr. Frist). The Senator from Massachusetts.
  Mr. KENNEDY. What do we have, 4\1/2\ minutes remaining?
  The PRESIDING OFFICER. Yes, 4\1/2\ minutes.
  Mr. KENNEDY. I yield myself 4 minutes.
  Mr. President, I will take a moment to include in the Record a letter 
from former Senator Frank Moss from the State of Utah, and I will just 
read the relevant sections of it.

       Dear Senator Kennedy.
       I was the author in 1965 of the amendment which included 
     home health care coverage under Medicare. Congressman Claude 
     Pepper introduced the legislation in the House. Our original 
     legislation required seniors to pay some portion of their 
     home health care costs out of pocket. However, the studies 
     done by the Senate Committee on Aging and the General 
     Accounting Office persuaded me in 1972 to work with Senator 
     Muskie and Senator Nelson to delete the copayment provision. 
     Our studies clearly indicated that copayments--

  Now listen to this--

     cost Medicare more to collect in administrative costs than 
     they saved in the program; 2. Denied access to care and fell 
     more heavily on those who could least afford it; 3. Pushed 
     families into poverty and loved ones unnecessarily into 
     institutions, resulting in increased costs to the States 
     and Federal Government through the Medicaid Programs; and, 
     4, increased costs to Medicare because people put off care 
     until they had to be hospitalized. I am writing to urge 
     you not to repeat the mistakes that we made in the past.

  Now, what has escaped in this debate, Mr. President, is the estimated 
budgetary impacts of this particular provision. Now, listen to this, 
our colleagues who are concerned about unfunded mandates. The chairman 
of the Finance Committee has pointed out it hits the very, very poor, 
frail elderly; those who qualify for Medicaid will be able to receive 
it and the States will pick it up. True. That is true. And that amount 
will be $700 million. We are putting an unfunded mandate on the States 
to pick up the costs of this copayment, and it is going to cost the 
States $700 million. And in terms of the Federal Government, because we 
participate in the Medicaid Program, $900 million.
  That is what it is going to be just under Medicaid. So on the one 
hand, supposedly we are taking in the $5 billion. On the other hand, 
you are losing, effectively, $1.6 billion that the States and the 
Federal Government are providing.
  Now, Mr. President, this makes absolutely no sense. They had the 
extensive hearings by the committee in charge, the Aging Committee, and 
you could have those same hearings today and you would find exactly the 
same results, exactly the same results. It unfairly falls on the frail 
elderly, and it is going to discourage people from using

[[Page S6110]]

home health care services and go into institutions and Medicaid 
eventually ending up paying more and people will delay getting the kind 
of care they need.
  Why shouldn't we first try to find out about the provisions that have 
been included by the Finance Committee which are going to provide for 
the providers the kind of prospective budgeting which we are using 
today for the hospitals. That is going to discourage this service. Why 
are we putting an additional burden that was never part of the 
agreement on the frailest of our society--$5 billion to use for tax 
cuts, tax cuts for the wealthiest individuals.
  It is absolutely outrageous, Mr. President, that in the course of 
this week, we will be out here on Thursday or Friday providing those 
kinds of tax cuts for the wealthiest individuals and the people who 
will be paying for them are going to be the seniors, the frailest, the 
elderly, the widowed individuals in our society. It is bad health 
policy. It is unfair. And it is just a continuation evidently of the 
kinds of assaults that we have seen on the Medicare system. We find the 
Finance Committee refusing to fund the $1.5 billion that they had 
agreed would be funded and putting on $5 billion that was never 
indicated in terms of the balanced budget. That is wrong, Mr. 
President, and every senior knows it. Every senior will know about 
that.
  The PRESIDING OFFICER. The Senator's time has expired.
  There are 30 seconds remaining.
  Mr. KENNEDY. I withhold that time.
  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Oklahoma.
  Mr. NICKLES. First, I wish to----
  The PRESIDING OFFICER. The Senator from Delaware controls time. Who 
yields time?
  Mr. ROTH. I yield such time as is required by the Senator from 
Oklahoma.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. NICKLES. I thank my colleague from Delaware. I also want to 
compliment him for his stewardship as chairman of the Finance Committee 
on this bill.
  First, let me just say a couple of things about the comments Senator 
Kennedy made. ``We are cutting Medicare so we can pay for tax cuts for 
wealthy people.'' I heard that comment made 2 years ago. I heard it a 
lot. ``They are gutting Medicare so they can pay for tax cuts for 
wealthy people.''
  Just an interesting footnote, the amount of expenditures, the 
outlays, what we are going to spend on Medicare for this 5 years that 
are covered by this bill is $1.248 trillion. The amount of outlays that 
we had in the bill 2 years ago that the President vetoed and said it 
was gutting, decimating Medicare, was $1.247 trillion--a one-billion-
dollar difference. So the outlays are the same.
  Did we make this change, this change dealing with home health care, 
so we could pay for tax cuts? The answer is absolutely no. What we did, 
in a bipartisan fashion, I think without dissent in the Finance 
Committee, in putting in the $5 copay on home health care, is recognize 
that we need to make some policy changes in home health care. This 
program is exploding in cost, and the reason why is quite obvious, if 
you look at. It is a program that is paid for 100 percent by the 
Federal Government. There is no copay by the beneficiary; the 
beneficiary does not pay a dime. There is no payment by the State. 
There is no copayment by anybody. It is Uncle Sam writing a check for 
100 percent of the cost. There is no limit on the number of visits; you 
can have one visit, you can have 300 visits. So it is a program, by its 
very design, if Uncle Sam is going to pay for it all, obviously it is 
going to explode in costs, and that is exactly what has happened.
  Just looking at this program, in 1990 this program cost $4 billion. 
In 1995, 5 years later, it cost $16 billion. It is projected next year 
to cost $21.1 billion. It has growth rates--in the year of 1989 this 
grew almost 24 percent; the next year, 53 percent; the next year, 43 
percent; 1992, 41 percent; in 1993, 30 percent; in 1994, 30 percent; in 
1995, 19.4 percent. This is a program that is exploding in cost.
  The Finance Committee realizes this. Anybody who has looked at the 
facts realizes this and knows we need to change it. So the change, a 
very modest change, I might say, is we say the beneficiaries would have 
a $5 copay. That is not a lot on visits that may well cost $70 or $80, 
but at least it is a start. And it might have some marginal impact on 
behavior. Will it cost the lowest of our citizens as alleged by Senator 
Kennedy and others? I doubt it, because in most cases they have Medigap 
policies or it is picked up by Medicaid. So in some cases those people 
will have coverage. But doesn't the policy of having some copay make 
sense? This Congress had the courage to stand up and say we should have 
a copay on veterans for prescription drugs of $2. Some people screamed 
and said, ``Wait a minute, this is a breaking of a contract,'' and so 
on, but we realized that prescription drugs for non-service-connected 
veterans was exploding in cost. So we stepped forward very marginally 
and set a $2 copay on prescription drugs, and it did change behavior 
somewhat. This will change behavior somewhat.
  I urge my colleagues to read an article on the front page of the Wall 
Street Journal about the explosion of this program. They have home 
health care providers now, some of which are starting new companies--
they had no experience whatsoever--out of mobile homes. If you look at 
the number of providers, in 1991 there were a little less than 6,000 
providers; in 1995, over 9,000 providers. Look at the number of 
beneficiaries, the total payment costs, the number of visits--this is a 
program that is truly exploding in cost.
  This was done in the Finance Committee, not so there could be greater 
tax cuts. As a matter of fact, I might mention--this is a little sore 
spot with me. The budget agreement said we would have $85 billion in 
net tax cuts. We did not end up with $85 billion; we ended up with $77 
billion. So we did not even come up with the total amount of net tax 
cuts that the budget agreement, President Clinton and the leadership, 
agreed upon. So that argument, ``They did this so they could have more 
tax cuts'', is total hogwash. This was done in order to try to reform a 
program that is growing way out of control, and it was done in a 
bipartisan fashion. I hope we will continue to have bipartisan support. 
We need to have bipartisan support.

  I will make a couple of other comments. One of the things that was 
done in the budget agreement I do not agree with. It said let's 
transfer home health care away from part A into part B, to make part A 
look solvent. That is a shell game. I do not want to have my 
fingerprints on it. It is in this deal. I don't have the votes to 
change that. But that bothers me. It doesn't keep part A solvent. Well, 
I guess theoretically it does. We could keep part A solvent if we said 
we will move all the expensive hospitals, from Tennessee west, take 
them out, move them out of part A and then we'll keep part A solvent. 
That's a little bit of a shell game.
  This is one little reform on the fastest growing portion in Medicare 
that is real reform. It was done in a bipartisan fashion because we 
know we need to do something to constrain these costs. You cannot have 
a program that has total, 100 percent, Federal funding, has no State 
match, no participant match whatsoever, and no limit on the number of 
visits and say we hope we can constrain its costs.
  So I think this is a serious vote. I urge my colleagues to vote 
against the Kennedy-Wellstone amendment.
  Mr. KENNEDY. Will the Senator yield for a question?
  Mr. NICKLES. I will be happy to yield.
  Mr. KENNEDY. I know the Senator----
  Mr. NICKLES. Not on my time, on my colleague's time.
  Mr. KENNEDY. On the bill's time.
  Mr. LAUTENBERG. I yield 20 minutes to the Senator from Massachusetts 
off the bill.
  Mr. KENNEDY. Briefly, I am wondering, as a Senator who has been 
strongly against unfunded mandates, with the recognition here it is 
going to cost the States some $700 million to pick up the Medicaid 
portion and we are not providing that to the States, how the Senator 
justifies that requirement that we are placing on the States to carry 
this proposal through?
  Mr. NICKLES. I will be happy to respond to my colleague. I think what 
we

[[Page S6111]]

have right now is a program that is 100 percent Federal.
  Mr. KENNEDY. On Medicaid--excuse me. The position of the chairman of 
the committee is that, for those who are going to fall into Medicaid, 
the State is going to pick up that premium and it is going to, 
according to the CBO, amount to some $700 million on the States. We are 
not providing that additional help to the States.
  I am asking the Senator how he justifies that particular unfunded 
mandate? We heard a lot about unfunded mandates, and I want to know how 
the Senator responds to that.
  Mr. NICKLES. I will be happy to. I think if my colleague had listened 
to my speech, I mentioned this home health program, which is currently 
100 percent Federal with no State match. Right now the States are not 
paying anything. So to have this in Medicaid, where Medicaid will pick 
up for lower-income beneficiaries a small portion of that--I might 
mention the Federal Government picking up, in most cases, 60 percent, 
in some cases 70 percent--is not the problem.
  What we are asking to do, what you are talking about, we are saying, 
``Beneficiaries pay $5; pay $5 out of a total cost of a $70 visit.'' So 
the Federal Government is paying 65 percent, and the individual would 
pick up $5, and in some low-income cases, for some low-income 
individuals, the State might pick up 30 percent, or in some cases 40 
percent, in some States maybe 50 percent of that share.
  To me that does not seem unreasonable.
  Mr. KENNEDY. This is the only point I make. That amounts to $700 
million for the States. That amounts to a $700 million unfunded 
mandate; $700 million unfunded mandate to the States, according to the 
CBO.
  I have listened to the Senator very eloquently talk about unfunded 
mandates, and here we are finding, according to the chairman of the 
Finance Committee, that for individuals who are going to fall below the 
poverty line, the State is going to pick that premium up, and that, 
according to CBO, amounts to $700 million. It will amount to $900 
million by the Federal Government but $700 million to the States. I am 
just interested in listening to the Senator, who speaks about unfunded 
mandates and about the Federal Government imposing requirements on the 
States, here we have a beauty, $700 million you are putting on the 
States. That is according to CBO, because that is going to be the cost, 
over 5 years, for them to pick up the $5 copay.
  Mr. NICKLES. Will the Senator yield?
  Mr. KENNEDY. Yes.
  Mr. NICKLES. If I understood the Senator's statement, the $700 
million the States would have to pick up, this is a program that will 
cost $121 billion next year for the Federal Government and that is 
growing at an unbelievable, unsustainable rate. So you are talking 
about a program over the next 5 years that is going to be well over 
$100 billion, and we are asking beneficiaries to pay $5, and in some 
cases the States may pick up a portion of that, maybe $700 million out 
of a total cost of over $100 billion. I don't find that unreasonable in 
any way.
  Mr. KENNEDY. I thank the Senator; $700 million. I thank the Senator.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROTH. I yield to the Senator from Texas such time as he may 
require.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, I think that with all of the loud talking 
and discussion of subsidiary issues, people have by now forgotten what 
this whole issue is about. So I would like to give a little bit of 
history and then appeal to reason and responsibility on behalf of the 
Finance Committee on this issue.
  First of all, the President proposed taking the fastest growing part 
of Medicare out of the trust fund and transferring it to general 
revenue in order to hide home health costs and claim that we have 
extended Medicare solvency for a decade. As a result, we have included 
the transfer into the budget agreement, even though I think it is 
totally and absolutely irresponsible and indefensible. We are simply 
taking the fastest growing part of Medicare, home health care, out of 
the Medicare trust fund and putting it into general revenue, which 
equates to taking a bill from one pocket and putting it in another. As 
a result, we can now claim that we have saved Medicare for a decade. As 
I pointed out when we started this debate, I could save Medicare for 
100 years by taking hospital care out of the trust fund and putting it 
into general revenue. But, does anybody believe that that represents 
any kind of reform?
  So, that is what started this debate. Now, having agreed in the 
budget agreement to make the transfer, the Finance Committee has sought 
to find ways to be responsible. One of the ways of being responsible is 
to note that there is a difference between services covered by part B 
and services covered by the part A trust fund. Those items that are in 
the part B program, which are outside the trust fund, have historically 
required two things. No. 1, beneficiaries pay 25 percent of the cost 
out of their own pocket in a part B premium; and, No. 2, they have a 20 
percent copayment. That, basically, is how Medicare has worked.
  Now we have followed the President's dictate and transferred home 
health care out of the part A trust fund into general revenues--part B 
or voluntary part of Medicare. But we have not instituted an immediate 
25 percent payment in the part B premium to pay for 25 percent of the 
cost. Instead, responding to concerns raised by the President and 
others, we phase that up over a 7-year period. But, to address 
specifically the issue raised by Senator Kennedy, the norm for types of 
care covered under the part B section of Medicare is for beneficiaries 
to pay 20 percent copayment.

  Recognizing that this was a dramatic change in policy, in 
transferring home health care from part A to part B, rather than having 
a 20-percent copayment, which would be the norm, we simply asked for a 
$5 copayment. This is not only eminently responsible, it is clearly 
something we have to do. Home health care is the fastest growing item 
in Medicare. It used to be that you qualified for it only right after 
you got out of the hospital. But Congress changed the law to let people 
qualify for home health care whether they have been to the hospital or 
not. As a result, this program has exploded. It has grown 
exponentially, averaging some 30 to 40 percent a year in growth. It is 
now bigger than the total funding for the National Institutes of Health 
and the space program. It has become the most explosive element of 
Medicare.
  We are not doing what we ought to do, which is to put it into part B. 
If we were required to do that, we would have a 25 percent premium 
where people would have to pay 25-percent of the cost like they do 
other programs under part B. Instead, we are phasing it up over 7 
years. We are not requiring a 20-percent copayment, which is the norm 
under part B. But the one thing we have done, which is responsible, is 
require a $5 copayment; the logic basically being that even very small 
payments affect people's behavior. What we are trying to do is to 
provide the service for people who need it while trying to cut down on 
the explosive growth and the abuse of this program.
  Our colleague from Oklahoma referred to a front-page article in the 
Wall Street Journal, but I don't think he did it justice. What that 
article did was outline the rampant abuse in this program, pointing out 
that people have even gotten out of the garbage collection business and 
gone into the home health care business and become almost instant 
millionaires.
  This is a program that demands change. We have made a very, very 
modest change. However, if every time we try to do something 
responsible, we end up having people jump up and down and saying, ``You 
can't do anything that is responsible,'' then there is no way we are 
going to be able to maintain Medicare.
  The program will be insolvent in 4 years under any kind of 
justifiable accounting. It will be a $1.6 trillion drain on the Federal 
Treasury over the next 10 years. The unfunded liability in Medicare is 
already $2.3 trillion. We have guaranteed two generations of Americans 
benefits, and we never set aside money to pay for the benefits. And now 
we hear all this screaming and hollering when we try to put a $5 
copayment on the most explosive part of Medicare.

[[Page S6112]]

  Mr. President, if we are not going to begin to do these kinds of 
things, it is going to be only a very short period of time until this 
program is going to be bankrupt. I don't know if the Senator from 
Massachusetts is going to be here proposing to triple the payroll tax 
to pay for it, but that is what is going to be required 25 years from 
now if we don't do something about this program.
  I support this change because it is absolutely essential that we do 
something to stop the explosive growth in this program. I support this 
change because I don't think a $5 copayment is asking too much. I 
support this change because I don't want to have to pick up the phone 4 
years from now and say to my 83-year-old mother, ``Well, mom, Medicare 
went broke today. Of course, I have known it was going broke for years, 
but I didn't have courage enough to do things, like vote for a $5 
copayment on home health care.''
  I believe this is something that is absolutely essential. It is the 
absolute minimum we should do. We should be doing a lot more. We are 
not because of exactly the kind of attacks that we have heard on the 
floor of the Senate.
  The Finance Committee, on a bipartisan basis, supported this $5 
copayment. It is a very small reform, but the principle of it is 
critically important. I think it would be a major, major setback for 
this bill if we lost this component. Losing this component would mean 
that we have simply played a shell game. We will have taken the fastest 
growing part of Medicare out of the trust fund to hide the explosive 
cost. Even though it is growing at 30 to 40 percent a year, we will 
have done absolutely nothing to try to deal with that explosive cost.
  I know the administration says, in the sweet by-and-by, they are 
going to have some kind of prospective payment system, and they can't 
tell us what it is today, but we need to do something right now. The $5 
copayment is the absolute minimum we ought to do. I urge my colleagues 
to stay with this very small modest reform. I yield the floor.
  Mr. CHAFEE addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROTH. I yield the Senator from Rhode Island 5 minutes.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. CHAFEE. Mr. President, I think today, as we go on to further 
consideration of this Medicare legislation, we are going to really see 
who is concerned about the future of this program and who is concerned 
about it being there, not just to the end of this century, which is 3 
years from now, but well into the next century.

  I think everybody who has taken the trouble to read the report of the 
trustees of Social Security and Medicare has seen the danger this 
program is in. It is going broke. It isn't something that is just 
automatically going to be there; we are used to these things. Somehow 
people think, ``Oh, it can't happen.'' Well, it can happen. So from the 
Finance Committee has come a series of proposals to do something about 
the security of the Medicare Program to ensure that it is going to be 
there, hopefully well into the next century.
  What is the particular issue before us today, Mr. President? The 
issue is, is it all right, proper, to have a $5 copayment in some 
instances--in some instances, Mr. President--for those who are visited 
by the home health care agents, officials, the nurses and those who 
come in a home health care visit.
  First, it is important to stress that after a hospital stay, for the 
first 100 visits, there is no charge. There is no charge for the first 
100 visits after a hospital stay. Subsequent to that, there is a $5 
charge.
  Under part B, for physicians' visits, and so forth, that an 
individual makes, there is a 20-percent copayment, and if that were 
applied to the home visits, 20 percent of a $90 visit--and that is the 
average cost of these visits from the visiting nurses or whoever it 
might be--20 percent of that is $18. Is the suggestion that there be an 
$18 copayment, 20 percent? No, there isn't, Mr. President. There is a 
charge of $5, which is in the neighborhood of 6 percent. Not a 20-
percent charge, a 6 percent charge. It seems to me that that is very 
fair. First of all, it helps reduce the cost to Medicare, obviously. 
Second, it clearly, to some small extent, affects the behavior of the 
individual who has asked for the home health care visit.
  I think this is a fair charge, $5. It is not for everybody. As I say, 
the first 100 visits go without a charge whatsoever. One hundred visits 
is a lot of visits. Then it goes to this very modest, not 20-percent 
payment, but 6-percent payment.
  Mr. President, I hope that the amendment to remove this provision in 
the bill will be rejected. I thank the Chair.
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. I yield 5 minutes of the 15 minutes of Senator 
Lautenberg's time to myself.
  Mr. President, if we have to deal with the overutilization of the 
home care services, let's address that issue. We understand that the 
person who suggests the kind of medical procedure is the doctor. We, 
the Finance Committee, are not making this statement in a vacuum. They 
have already included interim payment systems to deal with this issue 
for the elderly people. They already have prospective payments. They 
have made important changes already to address this issue.
  I would think that those Members who are standing on the floor of the 
U.S. Senate and saying, ``Well, this is just a very modest kind of a 
program, and we ought to be able to afford it,'' also ought to be there 
to tell us how they are using the $5 billion to strengthen Medicare 
instead of using it for tax cuts. But, no, you haven't heard one of 
them say that. You haven't heard one of them say, ``We're going to 
reduce the overutilization so we can treat our elderly people better by 
additional kinds of services.'' Absolutely not. They are silent on that 
issue--silent on that issue.
  The President of the United States had a more generous preventive 
program than the Finance Committee, and it was paid for without 
copayments. You can't have it both ways, I say to my colleagues. The 
President of the United States had a more generous preventive health 
care program for our senior citizens without the copay in the Finance 
Committee. No, no, they want to juggle the numbers, and that is what 
they have done. They have taken those billions of dollars, put an 
unfunded mandate on the States, required the Federal Government to max 
the Medicaid with $900 million and are putting that kind of $5 burden 
on the seniors.
  Who are these people? Just about half of them earn less than $10,000; 
25 percent of them are over the age of 85; two-thirds of them are 
women; one-third of them live alone. As any profile shows, these are 
the most vulnerable in our society. Mr. President, $5 might not be much 
when we are talking about the size of these budget items, but it is a 
key factor, certainly it was in the marvelous testimony that we had 
from a wonderful resident who talked about what $5 meant for her 
ability to receive services at home.
  As we say, the doctors are the ones who are making those decisions. 
It is just amazing to me, as we are beginning this debate, to say we 
are going to put the $5 copay in there that the Senate made a decision 
not to put there as a result of extensive hearings. It was reported 
bipartisan, with bipartisan leadership. So they say that we are going 
to just wipe that out, that was never talked about during the time we 
were talking about a balanced budget.
  The final point that I will make is that we are going to require 
taking $5 billion out of the pocketbooks primarily of elderly women and 
putting it right over here for tax cuts for the wealthiest individuals, 
which we will be voting on. That is what is out there. If we are going 
to change the process of procedures in terms of treatment of people at 
home, let's do it, but let's do it in sunlight, let's do it as a result 
of hearings, let's do it as part of the overall Medicare debate rather 
than the one that was done by the Senate Finance Committee.
  Mr. President, I withhold the remainder of time.
  The PRESIDING OFFICER. Who yields time?
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. There is no time left on the amendment?

[[Page S6113]]

  The PRESIDING OFFICER. The Senator from Massachusetts has 30 seconds 
on the amendment.
  Mr. DOMENICI. Will the Senator yield back his time? Do we have time 
left?
  The PRESIDING OFFICER. Two and a half minutes.
  Mr. DOMENICI. We yield back any time we have on the amendment.
  Mr. KENNEDY. Mr. President, I will take the 30 seconds to just add to 
the point not only on the substance of this that we have debated but 
also CBO. Everyone who votes against my particular amendment will be 
saying to the States, $600 billion--$600 billion--in CBO spending for 
the poorest of the poor. This is the granddaddy of all unfunded 
mandates. It is going to be so interesting, all those people who make 
all the speeches about unfunded mandates, how they are going to vote on 
that.
  Mr. President, I ask unanimous consent that the excellent letter from 
former Senator Ted Moss that is related to this subject be printed in 
the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                    Washington, DC, June 23, 1997.
     Hon. Edward M. Kennedy,
     U.S. Senate,
     Washington, DC.
       Dear Senator Kennedy: The Senate is currently considering 
     legislation to fundamentally change the nature of the 
     Medicare program. I agree that it is time we examined 
     Medicare; however, I would hate to see us repeat some of the 
     mistakes we made in the past.
       I was the author in 1965 of the amendment which included 
     home health care coverage under Medicare. Congressman Claude 
     Pepper introduced the legislation in the House. Our original 
     legislation required seniors to pay some portion of their 
     home care costs out-of-pocket. However, studies by the Senate 
     Committee on Aging and the General Accounting Office 
     persuaded me in 1972 to work with Senators Edmund Muskie (D-
     ME) and Gaylord Nelson (D-WI) to delete the copayment 
     provision. Our studies clearly indicated that copayments: 
     cost Medicare more to collect in administrative costs than 
     they saved the program; denied access to care and fell most 
     heavily on those who can least afford it; pushed families 
     into poverty and loved ones unnecessarily into institutions, 
     resulting in increased costs to the states and the federal 
     government through the Medicaid program; and increased costs 
     to Medicare because people put off care until they had to be 
     hospitalized.
       I am writing to you today because a provision was added in 
     the Senate Finance Committee proposal to require seniors to 
     pay a $5.00 copayment beginning with the very first visit, up 
     to a total of $760. Copayments were a bad idea in my original 
     bill in 1965 and for the same reason they are a bad idea 
     today. I am writing to urge you not to repeat the mistakes 
     that we made in the past.
       The home care portion of Medicare is small, representing 
     9.7 percent of the total, and yet home care has been saddled 
     with disproportionate cuts--fully 17 percent of all of the 
     Medicare reductions. Most of these reductions come at the 
     expense of home care providers, which is bad enough, but the 
     copayment provision is particularly intolerable because it 
     comes at the expense of consumers.
       A strong case can be made for expanding the scope of home 
     care under Medicare to cover long-term care. Approximately 
     ten million individuals who suffer from multiple disabilities 
     are struggling to care for themselves, going without the care 
     that they need, or waiting until an expensive admission to a 
     hospital emergency room is the only answer. Let's do our best 
     to improve Medicare and not make it less responsive to the 
     needs of our seniors.
       I am writing to ask that you support an amendment by 
     Senator Edward M. Kennedy that would delete the copayment 
     proposal. I encourage you to support Senator Kennedy in his 
     amendment.
           Sincerely,
                                                    Frank E. Moss,
                                              U.S. Senator (ret.).

  Mr. KENNEDY. Mr. President, I am prepared to yield back the remainder 
of my time.
  The PRESIDING OFFICER. All time has been yielded back.
  Mr. ROTH. Mr. President, I move to table the Kennedy amendment and 
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 
lay on the table amendment No. 429. The yeas and nays have been 
ordered. The clerk will call the roll.
  The bill clerk called the roll.
  The result was announced--yeas 60, nays 40, as follows:

                      [Rollcall Vote No. 111 Leg.]

                                YEAS--60

     Abraham
     Allard
     Ashcroft
     Baucus
     Bennett
     Bond
     Breaux
     Brownback
     Bryan
     Burns
     Campbell
     Chafee
     Coats
     Cochran
     Conrad
     Craig
     DeWine
     Domenici
     Enzi
     Faircloth
     Frist
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Jeffords
     Kempthorne
     Kerrey
     Kyl
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Moseley-Braun
     Moynihan
     Murkowski
     Nickles
     Robb
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--40

     Akaka
     Biden
     Bingaman
     Boxer
     Bumpers
     Byrd
     Cleland
     Collins
     Coverdell
     D'Amato
     Daschle
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Ford
     Glenn
     Harkin
     Hollings
     Inouye
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Mikulski
     Murray
     Reed
     Reid
     Rockefeller
     Sarbanes
     Snowe
     Specter
     Torricelli
     Wellstone
     Wyden
  The motion to lay on the table the amendment (No. 429) was agreed to.
  Mr. DOMENICI. Mr. President, I move to reconsider the vote.
  Mr. ROTH. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. SARBANES addressed the Chair.
  The PRESIDING OFFICER (Mr. Smith of Oregon). The Senator from 
Maryland.
  Mr. SARBANES. Will the Senator from New Jersey yield me 5 minutes?
  Mr. LAUTENBERG. I am pleased to yield the Senator from Maryland up to 
10 minutes.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Mr. SARBANES. Mr. President, I want to commend the distinguished 
Senator from Massachusetts for offering the amendment just voted upon. 
I think the failure of this amendment dramatically illustrates one of 
the difficulties plaguing this spending reconciliation bill. This bill, 
when combined with the tax breaks approved by the Senate Finance 
Committee and the House Ways and Means Committee, places a 
disproportionate share of the burden of deficit reduction on ordinary 
citizens. You can't consider the spending reconciliation bill separate 
and apart from the tax bill we will debate later this week; the two are 
linked in the budget plan. And when considered in connection with the 
tax cuts we will soon discuss here, the spending cuts in this 
reconciliation bill reflect a flawed set of priorities for the Nation.
  Now, this spending bill contains program reductions impacting 
numerous Americans, many of whom face extreme financial difficulty and 
are at the low end of the income scale. At the same time, the tax bill 
that is also part of the budget gives benefits to people at the top end 
of the income and wealth scale. That is the set of priorities that is 
reflected in this spending bill and in the budget as a whole.
  Take as an example the home health copayment provision just voted 
upon. As the Senator from Massachusetts pointed out in discussing his 
amendment, 43 percent of home health users have incomes under $10,000 
per year--I repeat, 43 percent have incomes under $10,000 per year. 
Two-thirds of the people requiring home health visits are women, and 
one-third of those are women living alone. The Office of Management and 
Budget has stated: ``We are concerned that a copayment could limit 
beneficiary access to the benefit.'' These are the kinds of people 
affected by the program cuts in this bill such as the one that the 
Senator from Massachusetts sought to strike--people who lie at the 
bottom end of the income scale, and who can ill-afford even a $5 
copayment requirement.
  At the same time that we require this $5 copayment and other similar 
cost-cutting provisions, we also include tax cuts in the budget plan. 
Now, given the objective of a balanced budget, the inclusion of tax 
cuts in the budget plan necessitates program reductions substantially 
greater than would be needed to eliminate the deficit if tax breaks 
were not part of the budget plan. Let me repeat that. Given the 
objective of a balanced budget, toward which we are all embarked, the 
inclusion of tax

[[Page S6114]]

cuts in the budget plan requires program reductions substantially 
greater than would be needed to eliminate the deficit if tax breaks 
were not a part of the plan.
  The math is simple. The budget resolution provides for $85 billion in 
net tax cuts over the next 5 years and $250 billion in net tax cuts 
over the next 10 years.
  In the framework of a balanced budget, these tax cuts require 
additional program reductions of $85 billion over the next 5 years and 
$250 billion over the next 10 years over what would otherwise be 
required.
  In other words, because you are approving tax cuts, you need to 
locate program reductions sufficient to offset the tax cuts. Now, the 
structure of the tax bills reported out by the tax committees makes it 
clear that those at the very top of the income pyramid will receive 
very substantial tax breaks--thereby absenting themselves from the 
deficit reduction effort, indeed shifting the burden to others--while 
ordinary people will carry a greater burden of program reductions to 
compensate for the tax breaks.
  Many programs important to ordinary citizens are being reduced to pay 
for capital gains tax cuts, inheritance tax cuts, and IRA expansion 
that will benefit the wealthiest people in the Nation. The cuts in 
Medicare and Medicaid--such as the one the Senate just voted to 
sustain--are examples of such reductions in vital programs.
  After looking at which Americans are affected by the program 
reductions in this bill, look at the distributional effects of the tax 
cuts that are also part of the budget. The tax bills reported from the 
Finance and Ways and Means Committees give the top 1 percent of the 
income scale the same percentage of the tax benefits as the bottom 60 
percent on the income scale. At the same time, in order to make room 
for these tax breaks, we are reducing programs such as the one that we 
just voted on, which impact heavily on people who really cannot afford 
such reductions.
  Mrs. BOXER. Mr. President, the Senate is not in order.
  The PRESIDING OFFICER. The Senate will please come to order.
  Mr. SARBANES. Mr. President, Members need to ask themselves whether 
they support the priorities reflected by these choices. For every 
dollar lost to the Treasury in tax cuts, a dollar must be added to the 
Treasury through reductions in programs that are essential to many of 
our citizens. If there were no tax cuts, or if the tax cuts were less 
than what is being projected, we wouldn't have to cut the home health 
program. These two things--tax cuts and program cuts--have to be 
understood together, even though they have been separated into two 
bills. The fact of the matter is that the whole budget plan, in order 
to provide for upper income tax breaks, has to reduce programs to 
offset the cost of the tax breaks. And the vote we just had is one 
example of a program that is being reduced.
  So, in assessing this reconciliation bill that is before us, we need 
to ask ourselves whether providing tax breaks to the very well to do 
should be a higher priority than adequate funding for programs 
essential to the well-being of ordinary citizens. On each amendment we 
have to ask this very question: I repeat, is it more important to give 
a upper income tax breaks--and, in order to compensate for them, to cut 
programs such as the very program that we just voted on with respect to 
home health copayment, a program which clearly helps people at the very 
lower end of the income scale--or to preserve programs vital to 
ordinary Americans?
  I think that question needs to be asked again and again as we 
confront these various proposals to deal with the program reductions 
that are contained in the reconciliation bill that is before us.
  Mr. President, I would like to address one other item with respect to 
what we are confronting in this budget debate because it looks to the 
future.
  Mr. President, the Los Angeles Times just yesterday published an 
article entitled ``Tax-Cut Plans Could Reseed Deficit.''
  I quote: ``Analysts liken House and Senate bills as time bombs set to 
begin detonating shortly after 2002--the target date for balancing the 
Federal budget.''
  I ask unanimous consent that the article be printed in the Record at 
the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. SARBANES. Mr. President, this article points out that under 
versions of the tax bills approved by the Tax Committees in the two 
Houses, the revenue loss to the Treasury would take off, starting in 
the year 2003 and continuing for many years thereafter. What has 
happened is the tax cuts have been crafted in such a way that they 
artificially are held down in the early years to stay within the terms 
of the budget agreement. But because of back loading the principal 
revenue impact comes in later years.
  Robert Reischauer, the former head of the Congressional Budget 
Office, said, and I quote him:

       . . . warns that of all the debate surrounding the 
     House and Senate tax bills--whether the reductions are 
     skewed too much toward the wealthy, or whether they would 
     overheat the economy--``this is the critical issue.''

  I again quote him:

  If the tax bill explodes, it will explode just at the time that the 
baby-boom generation is beginning to retire and when we will need every 
penny we can get our hands on to pay for Medicaid, housing, 
transportation, and food stamps.

       Moreover, many of the tax cuts contained in the two bills 
     ``would not be easily reversible'' if the Government decided 
     that it needed the extra revenue after all to pay for these 
     vital programs.

  The figures are very stark.

       [The figures] . . . compiled by the congressional Joint 
     Committee on Taxation show that during the first five years, 
     the tax cuts would result in a net loss to the Treasury of 
     $85 billion--precisely what the budget agreement has 
     allocated . . .

       But the figures also show that the House tax writers have 
     held down the initial costs by phasing in some of the 
     reductions slowly. Once the provisions are fully in effect 
     the cost of the package jumps dramatically.
       As a result, while the House provisions would drain about 
     $18.4 billion from the Treasury in 1999, by 2007, the annual 
     cost would soar to $41.8 billion--more than double the 
     earlier amount.

  So, in other words, you come to the end of the 10-year period upon 
which limitations have been placed by the budget agreement and you have 
the revenue loss projected on trend lines that simply take off over the 
second 10 years. Some estimates have placed this loss at $600 to $700 
billion over the next 10 years--2008-17--compared to a $250 billion 
cost over the first 10 years, 1998-2007.
  The same criticism applies to the Senate Finance Committee version--a 
little less, but not much. Moreover, as I have noted, both bills 
threaten the deficit through backloaded, phased-in tax cuts, which 
principally benefit the wealthy.
  Mr. President, as pointed out in this Los Angeles Times analysis, 
three of the main provisions in these tax bills--IRA's, capital gains, 
and inheritance taxes--make heavy use of gimmicks, including delayed 
effective dates, slow phaseins, and timing shifts in revenue 
collections to minimize the revenue losses that these tax cuts cause in 
the early years. But then the costs begin to rise sharply, and they 
accelerate as you move into the outyears.
  In short, these cuts place the whole deficit reduction effort at 
risk.
  So we have two things happening here. First of all, the tax cuts are 
inequitable as we have just seen because you do something like this 
home health copayment charge at the same time that you give a tax break 
at the top of the income scale. Forty-three percent of the people who 
use home health services have incomes of less than $10,000 a year, and 
now will have to make a payment of up to $760 a year under this bill 
for home health care before they get some assistance. At the same time 
you are giving a tax break to people at the top end of the income scale 
on capital gains, on inheritance tax, and on delayed IRA's.
  Second, the broader question, what Reischauer called the critical 
issue, is the fact that the tax bill is structured in such a way that 
the cost of the tax bill will simply take off after the year 2007. It 
will start moving out after the year 2002, the so-called balance year, 
and then after the year 2007 it will really take off and we will then 
be confronted with a major threat to our fiscal stability. As this Los 
Angeles

[[Page S6115]]

Times article said, the ``Tax-Cut Plans Could Reseed Deficit.''
  The whole purpose of this exercise is to eliminate the deficit, which 
is not being done.
  Mr. President, I yield the floor.

                               Exhibit 1

                   Tax-Cut Plans Could Reseed Deficit

                             (By Art Pine)

       Washington.--Prospects for keeping the federal budget 
     balanced after 2002, the year that President Clinton and 
     Congress hope to eliminate the deficit, are being threatened 
     by a ticking time bomb: the tax-cut bills that Congress will 
     take up this week.
       Under versions approved by the Senate Finance Committee and 
     the House Ways and Means Committee, the revenue loss to the 
     Treasury would take off, starting in 2003, and continue for 
     many years after that, most budget experts say.
       Robert Greenstein, an analyst for the nonpartisan Center on 
     Budget and Policy Priorities, says both tax-cut measures have 
     been crafted to keep the impact of the cuts ``artificially 
     low'' for the first few years to stay within the bipartisan 
     balanced-budget agreement.
       Such ``back-loading'' of the maximum revenue impact, he and 
     other fiscal experts say, could threaten the government's 
     fiscal integrity just as it is likely to be saddled with 
     added costs related to the aging of the baby boom generation.
       Robert D. Reischauer, a Brookings Institution budget-
     watcher, warns that of all the debate surrounding the House 
     and Senate tax bills--whether the reductions are skewed too 
     much toward the wealthy, or whether they would overheat the 
     economy--``this is the critical issue.''
       ``If the tax bill explodes, it will explode just at the 
     time that the baby boom generation is beginning to retire and 
     when we will need every penny we can get our hands on to pay 
     for Medicaid, housing, transportation and food stamps,'' 
     Reischauer said.
       Moreover, many of the tax cuts contained in the two bills 
     ``would not be easily reversible'' if the government decided 
     that it needed the extra revenue after all, Reischauer 
     contends. Adjusting capital gains for inflation, for example, 
     would be difficult to undo
       The figures are stark by any standard.
       Estimates compiled by the congressional Joint Committee on 
     Taxation show that during the first five years, the tax cuts 
     would result in a net loss to the Treasury of $85 billion--
     precisely what the budget agreement has allocated for the 
     measure's cost.
       But the figures show that the House tax writers have held 
     down the initial costs by phasing in some of the reductions 
     slowly. Once the provisions are fully in effect, the cost of 
     the package jumps dramatically.
       As a result, while the House provisions would drain about 
     $18.4 billion from the Treasury in 1999, by 2007, the annual 
     cost would soar to $41.8 billion--more than double the 
     earlier amount.
       And Greenstein's group estimates that if the cost of the 
     Ways and Means Committee package escalates at its 2004-2007 
     pace, the cumulative revenue loss for the second 10 years--
     from 2008 to 2017--would surge to $600 billion or more.
       The Senate Finance Committee version of the bill is only 
     slightly less explosive. The revenue drain rises from $19.7 
     billion a year in 1999 to $40.2 billion in 2007--again 
     totaling $85 billion for the five years covered by the 
     bipartisan budget accord.
       Once more, however, calculating the second decade's cost 
     once the provisions have been fully phased in raises the 
     annual revenue shortfall to $74 billion in 2017, Greenstein's 
     group estimates. For the measure's second decade--from 2008 
     to 2017--it swells to $550 billion.
       Greenstein and Iris J. Lav, another researcher at the 
     center, attribute the bulk of the explosion in 2004 and 
     beyond to a handful of provisions that provide primarily 
     benefit higher-income taxpayers: cuts in the taxes on capital 
     gains, inheritance and individual retirement accounts.
       All three provisions ``make heavy use of gimmicks--
     including delayed effective dates, slow phase-ins and timing 
     shifts in revenue collections--to minimize the revenue losses 
     [that] these tax cuts cause during the first five years,'' 
     the two analysts argue.
       ``Their costs then begin to rise sharply, with the pace at 
     which these costs increase accelerating in 2006 and 2007.''
       The House provision to allow taxpayers to adjust their 
     capital gains to eliminate the impact of inflation is 
     particularly vulnerable to cost spiraling. Under the terms of 
     the House bill, taxpayers would not actually begin using it 
     to lower their taxes until 2004.
       Republicans are unapologetic about the apparent trends. 
     Senate Majority Leader Trent Lott (R-Miss.) told a news 
     conference Friday that while Republicans deplore the 
     possibility that the cost of the tax cut might explode, that 
     is not the important point.
       While Lott said Republicans ``agreed we would not take 
     actions'' that would cause fiscal distress beyond 2002, he 
     added. ``The idea of having significant tax cuts for working 
     Americans, I love it! ''
       But Reischauer and other critics are less sanguine. The 
     nation already is facing a possible revival of large budget 
     deficits when the baby boom generation reties, they say, and 
     the prospect that policymakers will be able to cut spending 
     then is dubious.
       Many budget analysts predict that the bipartisan accord 
     Congress and Clinton reached this past spring already runs 
     the risk that the budget balancing--if it actually does occur 
     in 2002, as predicted--will be brief and that the deficit 
     will begin widening again.
       ``With the vanguard of the baby boom generation having 
     already reached age 50, the nation cannot afford to budget 
     with this type of sleight of hand,'' Greenstein said.

  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I yield myself 5 minutes to respond to 
the distinguished Senator from Maryland.
  First, let me suggest that there are some Senators who want tax cuts. 
There are some Senators who want only certain kinds of tax cuts. I have 
never found a tax cut that the Senator from Maryland agrees with.
  So we ought to start the argument by understanding that he is against 
the tax cut in this bill and probably any comparable tax cuts because 
he just doesn't like to cut taxes.
  Having said that, let me just talk about some of the arguments he 
made. First of all, I am very pleased that this is a bipartisan effort 
to create some sense out of the havoc that is going to come down on the 
Treasury of the United States if we don't find some way to control home 
health care costs under part B for the seniors of our country.
  Everybody should understand, including the seniors, that what we did 
in this package and what is being done in the House package is very, 
very beneficial to the senior citizens. In each bill we took half of 
the home health care costs--the fastest growing program in America, on 
average, 30 percent--we took half of that program out of the trust fund 
thus eliminating imminent bankruptcy. And we said, ``Seniors, you don't 
have to pay for that out of your trust fund.''
  We did not hear anything from seniors, or the AARP, other than the 
AARP said ``thank you'' because, obviously, that is a very big gift 
which we did in order to make that trust fund solvent. We then put that 
amount of money down, and said let the taxpayers pay for it. So the 
Finance Committee came along and said, well, if the taxpayers are going 
to pay for it, we ought to start putting some control in it so that it 
will make sense in terms of costs. And the argument has been made by 
those who oppose what the committee did--and I don't serve on the 
committee--but the argument has been made that there are many poor 
seniors who can't afford the deductible.
  Let's repeat again. If they are poor, the Medicaid Program of America 
pays their deductible. Let me repeat. For poor seniors, the Medicaid 
Program pays their deductible.
  Frankly, I believe every other aspect--I am not an expert but I asked 
about this--every other aspect of delivering health care, hospitals and 
others, all have some kind of deductible. They do not have a deductible 
because we like to charge people where we could afford to give them 
something free. But we have deductibles so that everybody understands, 
including the recipient, that the program costs some money. 
Historically it has been a pretty good way to get that message across 
to the users.
  The last argument being made by my friend from Maryland is a New York 
Times article that says the tax bill, which will come up next in the 
Senate and which already is on the House side, except ours is a little 
better in terms of the middle-income people--and he has an article from 
a newspaper which says that the tax bill is not good for middle-income 
Americans.
  Let me suggest to the Senate that we don't have a New York Times 
article. We have the Congressional Budget Office. We have the Joint Tax 
Committee and every major accounting firm in the country that looks at 
this say to the contrary. In fact, let me tell you what the 
overwhelming evidence is that will soon be available from the Joint Tax 
Committee but also what our own firm that does our work for us says. 
They say that, at a minimum, 75 percent of the tax cut goes to those 
Americans who earn $75,000 and less. That is not a bad distribution.
  In fact, I believe before we are finished, when we take into account 
the other things the Finance Committee did, it will probably be more 
like 78 percent of all of the tax cuts that are in this package will go 
to people in America earning $75,000 and less.

[[Page S6116]]

  Now, that leads me to believe that those who want to attack the bill 
because of its distribution among taxpayers just do not want any tax 
cuts or, and here I will say unequivocally, that the White House 
chooses to attack this package because they have their own method of 
figuring out how much the American taxpayers earn and, believe it or 
not, the White House criticism--I yield 5 additional minutes off the 
bill--believe it or not, under the White House approach taxpayers 
should understand--and I say this to my friend from Texas--if they own 
a house, they are charged under the White House approach to this with 
receiving rent from the house equivalent to its value. So if you earn 
$25,000, and you have a house worth $100,000--the rent should be 
$10,000 on the house--you have earned $35,000.
  Now, in addition, they also say if you have any capital gains--listen 
to this--they impute to you the value of the capital gain.
  Now, the point of it is that the Joint Tax Commission approaches it 
in a completely different way. Accountants who have looked at it--and I 
will put a letter in from a major accounting firm--tell us that, 
indeed, this distribution under this tax bill, which is probably made 
better when they put $250 into the earned-income tax receipt--that 
probably makes the distribution better, but they tell us it is like 75 
percent for $75,000 and under.
  Now, I want to try to make a point because already the American 
people have been told, principally by White House spokesmen, that this 
tax bill is for the rich. We ourselves must set about to tell the 
American people the truth, and that will not be easy because every time 
somebody stands up who opposes the capital gains tax or the like, they 
are going to immediately say this tax bill is not good for average 
Americans.
  So 3 years ago, in 1993, now on 4 years, the White House used, I say 
to Senator Gramm, this same method of distributing earnings in another 
venture with the Congress, and I want to read and quote what David 
Brinkley said on one of his ABC wrapups of his own show about the way 
the White House figures the distribution of taxes, and so let me start. 
All of this is a quote from him.

       A few words about Federal taxes and what some of the great 
     minds in the United States Treasury are thinking about. The 
     Treasury likes to calculate the American people's ability to 
     pay taxes based not on how much money we have but on how much 
     money we might have or how much we could have. For example, a 
     family that owns a house and lives in it, the Treasury 
     figures that if the family didn't own the House and rented it 
     from somebody else, the rent would be $500 a month, so it 
     would add that amount, $6,000, to the family's so-called 
     imputed income. Imputed income is income you might have had 
     but don't--

  Said the distinguished news man Brinkley.

       They don't tax you on that amount.

  Nobody taxes you on that amount.
  Now, concluding:

       The IRS does not play silly games like this. Instead, the 
     Treasury calculates how much you could take away from us if 
     you decided to. If that were the system, consider the 
     possibilities. How about being taxed on Ed McMahon's $10 
     million magazine lottery.

  Maybe you might get that so why not tax you based on that.

       I didn't win it, you say, but you could have. The Treasury 
     must have something better to do----

  He said.

       If not, there's a very good place for Clinton to cut some 
     spending. From all of us at ABC--

  He went on to say--

       Thank you.

  We are going to start today, Mr. President, with this little sermon. 
We are going to start wherever anyone will listen to us and wherever 
any columnists are who write about this tax bill and we are going to 
tell them the truth, and we are going to ask them to read the Brinkley 
column about how the United States Treasury Department figures out what 
income people are earning. And frankly, they are also going to say, I 
say to Senator Gramm, that this method of figuring out what somebody 
was earning was dreamed up in a Reagan administration. That is true.
  Mr. GRAMM. We killed the guy.
  Mr. DOMENICI. But essentially you can do all of these kinds of models 
for different purposes. The purpose that it is being used for now is 
totally distorted in terms of what the American people themselves are 
going to realize and who is going to realize the benefits of this tax 
bill. So wherever anyone will listen, we will hope to get our oar in 
alongside of the Democrats--some, not all--who say this tax bill does 
not help average Americans.
  Several Senators addressed the Chair.


                            Order for Recess

  Mr. DOMENICI. Mr. President, I still have the floor, and I want to 
ask unanimous consent that the Senate stand in recess from the hour of 
12:30 to 2:15 for the weekly policy luncheons to meet and, further, 
that the recess time count equally against the remaining statutory time 
allotted for the reconciliation bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SARBANES. Mr. President, will the Senator from New Mexico yield 
for a couple of questions?
  Mr. DOMENICI. Mr. President, I have been told by the chairman of the 
Finance Committee that they want to proceed on the amendment that is 
pending and so I----
  Mr. SARBANES. If the Senator will yield me just 2 minutes to respond 
to the point that was made.
  Mr. LAUTENBERG. If the Senator from Maryland will indulge me for just 
a minute. The chairman said proceed, and I am wondering how far we want 
to proceed because if we are going to suspend at 12:30 until 2:15, 
there is a vote pending, I assume, I ask the distinguished chairman of 
the Finance Committee, and would you want to establish a time certain 
now for voting after lunch?
  Mr. ROTH. I would like to have a vote before we recess for lunch.
  Mr. LAUTENBERG. There is, I understand--I ask the Chair--an hour's 
worth of debate evenly divided for the discussion of the waiver of the 
point of order.
  Mr. DOMENICI. That is correct.
  Mr. LAUTENBERG. If we have just had a unanimous-consent agreement to 
leave here at 12:30, how does one accommodate an hour's worth of time?
  Mr. DOMENICI. One doesn't. One assumes that both sides would like to 
take less.
  Mr. LAUTENBERG. Well, I think in a survey of my side, Mr. President, 
I cannot accommodate that notion. Now, if the Republicans are willing 
to give up their side, we can do it in a half hour.
  Mr. DOMENICI. Mr. President, let me try this on with everybody who is 
here.
  Senator Durbin wants a full hour?
  How much time does the chairman think he needs?
  Senator Durbin gets a half hour.
  Mr. ROTH. We want the half hour.
  Mr. DOMENICI. You want the half hour.
  That means we could not vote until after lunch. Very well, why don't 
we do this. We want to use the whole time. It is 5 minutes of 12. We 
would then go until 12:30. That is 35 minutes and then 25 minutes upon 
return.
  Mr. LAUTENBERG. At 2:15. So that would be at 20 to 3.
  Mr. DOMENICI. The first 25 minutes upon return to the floor will be 
used on this amendment and then a vote will follow.
  Mr. LAUTENBERG. At that time.
  Mr. DOMENICI. At this point we will, the time preceding our recess 
will be used on the motion to waive as equally divided as possible.
  Mr. LAUTENBERG. The Senator from Maryland asked for a couple of 
minutes before we start the debate on the motion to waive.
  Mr. DURBIN. Mr. President, reserving the right to object and 
acknowledging the fact that the Senator from New Jersey may yield to my 
friend and colleague from Maryland, can we say that the calculation be 
based on how much time is remaining on the debate when we do break at 
12:30?
  Mr. DOMENICI. Yes, that is fine.
  I do not want to use any additional time. I want them to use it. But 
if the Senator insists on 2 minutes, I am not going to object.
  Mr. LAUTENBERG. I therefore yield 2 minutes of the time on the bill.
  Mr. DOMENICI. May we indicate the unanimous-consent request is that 
as soon as the 2 minutes is up we immediately move to the 65-67 issue?
  Mr. GRAMM. May I just ask a question? Are we going to have the full

[[Page S6117]]

hour to debate this thing, so we will debate it some when we come back 
from lunch?
  Mr. DOMENICI. Yes.
  Mr. GRAMM. So nothing we are doing in going to lunch or listening to 
the rich people getting a tax break, none of that is limiting our time?
  Mr. DOMENICI. No. He is only going to take 2 minutes on that issue.
  The PRESIDING OFFICER. The Senator from Maryland is recognized for 2 
minutes.
  Mr. SARBANES. I thank the Chair. Mr. President, I sought the 2 
minutes because I wanted to respond to the points made by the chairman 
of the Budget Committee. First of all, he said, if these senior 
citizens had difficulty with the copayment requirement, they could get 
Medicaid. That is true if they are at the poverty level or below--
approximately $9,000 of income or less. But you have a lot of people 
that are above the poverty level who cannot afford this, and who, 
without Federal assistance, will suffer these program reductions at the 
same time that those at the upper income level receive tax breaks.
  Second, we are told that the distribution tables show that these tax 
cuts are not going disproportionally to the upper end of the scale. 
Well, that is because of the backloading gimmicks that are in the tax 
bill. In fact, the capital gains and IRA proposals on which the 
distribution tables are based through the year 2002 show no net revenue 
loss--no net revenue loss--for that 5-year period of time, which is the 
sole subject of the distribution table. Yet, the combined revenue loss 
from those provisions for the period 2003 through 2007 is $51 billion. 
And that is never calculated in the distribution tables, let alone the 
cost of these tax breaks in the years after 2007, which, as I mentioned 
before could well be staggering and totally destructive of the deficit 
reduction effort.
  Moreover, as a consequence of such backloading, the upper income tax 
provisions account for a growing proportion of the tax package over 
time. In the year 2003, outside the scope of the distribution tables 
that the chairman was citing, they will account for 30 percent of the 
gross cost of the tax cuts. By 2007, the figure is 42 percent. And as 
you move out into the next decade, they very quickly eat up more than 
half of the tax breaks.
  Now, the way these cuts are structured makes the Joint Tax Committee 
analysis an inadequate indicator of the distribution effect of these 
tax cuts. Because of the way they are structured, with the backloading, 
a 5-year distribution table shows that they are not costing any 
revenue. But if you carry the cuts out beyond the 5-year period, they 
cost very significant revenue. And by the year 2010, it is estimated 
that a majority of the tax cuts in the package will be directed to the 
upper income sector of the population.
  Now, as I stated earlier, the fact that you are making those tax cuts 
requires you, since you are trying to reach a balanced budget, to make 
program cuts. So you have to look at the tax cuts reported by the 
committee and weigh them against the program cuts. Here you have home 
health care being cut, with 43 percent of the people who use home 
health care making under $10,000, and here you also have tax breaks 
given to people at the very top of the income scale. These are not the 
right priorities for the Nation.

  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. SARBANES. I thank the ranking member for yielding me time.
  Mr. DOMENICI. Mr. President, I yield all the time on this issue to 
the chairman of the Finance Committee, for his control under the Budget 
Act.
  The PRESIDING OFFICER. The question pending is the motion to waive 
the Budget Act in response to a point of order raised against section 
5611 on the grounds that it violates section 313(b)(i)(A) of the 
Congressional Budget Act.
  Who yields time?
  Mr. ROTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, I yield myself 3 minutes.
  Mr. President, I asked for a waiver because I oppose the point of 
order on the age of eligibility in the bill. What we are proposing to 
do is to make the age of eligibility for Medicare conform with Social 
Security. The age of eligibility will change from 65 to 67, which will 
be phased in over a 24-year period beginning in 2003 and ending in 
2027. This is a very, very modest approach to an extremely serious 
problem. What we are concerned about is the solvency of Medicare. The 
solvency of Medicare is of critical importance as part A is seen going 
bankrupt by the year 2001. By the year 2007, if we do not make 
significant change, the program is at a loss of one-half trillion 
dollar. What we are seeking to do here, by making the age of 
eligibility for Medicare reform conform with Social Security, is to 
take a modest step forward to assure the solvency of this most 
important program.

  The bipartisan Commission on the Future of Medicare will be required 
to analyze and report back the feasibility of allowing individuals 
between age 62 and Medicare eligibility the option to buy into 
Medicare. As I said, our provision will help us extend solvency in the 
program. It is, I think, the very least we should do. The average life 
expectancy for a man or a woman over age 65 has been steadily 
improving. People are living longer, they are leading more vibrant 
lives, and this means that changing the eligibility age for Medicare 
will follow our natural demographic progression. In fact, around the 
time Medicare was enacted, the average life expectancy for men at age 
65 was about 13 years, for women about 16 years. In 2030, when this 
provision is fully phased in, average life expectancy at age 65 for men 
is anticipated to be about 17 years, and 20.5 years for women. This is 
a very modest step to bring about significant reform. It is critically 
important that we show that we have the courage to take these steps on 
behalf, not only of our senior citizens of today, but the increasing 
number that will join this group in 2010 and later.
  It is, in a way, very ironic that a point of order was made on this 
matter, because while it is true that it will not have a significant 
impact on revenue in the early years because of the very, very 
compassionate way we are introducing changing the age of eligibility, 
the fact is that this very modest approach will do a very, very great 
deal in the long term in helping the solvency of this program.
  I cannot emphasize too much the importance of this change. As I 
pointed out, it merely conforms to what already has taken place in 
respect to Social Security. It is a change that will make the program 
significantly more solvent in the long term, and I hope the Senate will 
assure that this language continues as part of the agreement.
  I yield the remainder of my time.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, I assume the distinguished chairman 
will be yielding further time on his side. At this point we have no 
requests for time now.
  Mr. ROTH. I yield 5 minutes to the distinguished Senator from Texas.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, when Social Security started in the mid-
1930's, the average person paying into Social Security, given the 
lifespan projections, was not projected to live long enough to get any 
of the benefits. In fact, we forget that when Social Security started, 
the average life expectancy of Americans was substantially less than 
65.
  By 1983, Social Security had become insolvent. We were in danger, in 
the spring, of not being able to send out July checks. We had a crisis 
in Social Security, so we instituted a series of reforms to try to pull 
Social Security back in the black. One of those reforms was raising the 
retirement age beginning in the year 2003. Then over the ensuing 24 
years it would be raised in small increments up to 67. We did it under 
crisis circumstances. I remember the vote. I was a young Member of the 
House at the time. It was adopted on a bipartisan vote. Nobody liked 
it, but everybody recognized that it had to be done.
  We did not make a similar change for Medicare then because Medicare 
was in the black. Today, our circumstances with Medicare are very, very 
different. If you look at this chart behind me, we currently are in 
this last small part of blue. Medicare is now in the process, very 
rapidly, of going bankrupt and the Medicare part A trust fund, which 
pays

[[Page S6118]]

for hospital care, within 4 years will be insolvent. We expect 
Medicare, based on everything that exists now, to be a drain on the 
Federal Treasury of $1.6 trillion over the next 10 years.
  Our problem is not only exploding costs, but the fact that we have a 
baby boomer generation that was born immediately after the war which 
made Medicare possible as all these baby boomers came into the labor 
market beginning in 1965. But 14 years from today, the first baby 
boomer retires. We will go from 200,000 people retiring a year to 1.6 
million people retiring a year. The number does not change for 20 
years. We go from 5.9 workers per retiree in 1965, to 3.9 workers per 
retiree, to 2.2 workers per retiree. We are facing a very great crisis 
in Medicare.
  We also face a timing crisis. Everybody knows we are going to have to 
raise the retirement age for qualifying for Medicare as we did for 
Social Security. Everybody knows it is going to have to be done. If we 
do it today, we are going to have time for it to phase in. But if we 
wait another 3 or 4 years, the phase-in for Social Security will have 
started and we are going to be forced to tell people who have planned 
for retirement that their Social Security benefits and their Medicare 
coverage are not going to cut in when they plan to retire.
  If we make this change today, people will have time to adjust. For 
example, I was born in 1942. If we pass this bill today, I will know 
that if I plan to retire at 65, that my Social Security benefits and my 
Medicare coverage will not cut in until I am 65 years 10 months of age. 
So I have 11 years, if I were looking forward to that retirement, to 
plan for it. If we keep waiting, knowing we are going to have to do 
this, we are going to end up having to force change on people when they 
are not ready. The advantage of doing what we have done is that it 
phases in between now and the year 2027, and people have time to plan 
for it.

  It is the ultimate paradox that we have a point of order against this 
provision because we did this provision without claiming any savings 
for the budget. We made this change to save Medicare. We dedicate every 
penny of savings to the Medicare trust fund, we don't count a penny of 
the savings toward balancing the budget or funding tax cuts, and now we 
have a point of order against the amendment because we are not claiming 
savings.
  So we try to answer the charge that is often made on the other side 
of the aisle that you are cutting Medicare to balance the budget or you 
are cutting Medicare to cut taxes. We try to respond to that by taking 
a long-term view of saving Medicare. We do not count it toward reducing 
the deficit, we don't let any of it be spent, and we don't let any of 
it be used for tax cuts. We simply are trying to do something that is 
fundamentally important.
  Medicare is going broke. We have an unfunded liability for Medicare 
today of $2.6 trillion.
  The PRESIDING OFFICER (Mr. Sessions). The Senator has spoken for 5 
minutes.
  Mr. GRAMM. May I have 1 additional minute?
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAMM. The plain truth is we have guaranteed two generations of 
Americans benefits under Medicare, and we have not set any money aside 
to pay for it. We have an outstanding liability of $2.6 trillion. If we 
wait 10 years to do something about it, it will be $3.9 trillion. If we 
wait 20, it will be bigger than the entire national debt of the country 
at $6.1 trillion. The Finance Committee, in an extraordinary act of 
courage, decided to make this change and not count any of it toward 
balancing the budget and not count any of it to pay for the tax cut but 
to simply do it so we will never have to call up senior citizens and 
tell them Medicare went broke today.
  I supported this provision because I have an 83-year-old mother who 
depends on Medicare, and I don't want to pick up the phone someday and 
say, ``Mama, Medicare went broke today. I knew it was going broke, but 
I did not have courage enough to do anything about it.''
  We have an opportunity over the next 30 years to phase up the 
eligibility date for Medicare to conform to Social Security, something 
we have already had to do under crisis circumstances. Let's not wait 
until the house is on fire to do something about the problem.
  I urge this point of order be waived.
  The PRESIDING OFFICER. Who yields time?
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, I don't know if I need permission from 
Senator Lautenberg on our side, but I am going to presume there is no 
objection to speak on behalf of our side in relation to this motion to 
waive. I see Senator Lautenberg on the floor now.
  Mr. LAUTENBERG. I yield so much time, up to 10 minutes, as the 
Senator from Illinois requires.
  Mr. DURBIN. I thank my colleague for making this legitimate.
  The PRESIDING OFFICER. The Senator from Illinois is recognized.
  Mr. DURBIN. Mr. President, what is this all about? Well, you say the 
word ``Medicare'' and senior citizens start listening. ``Medicare, wait 
a minute, that is my mother's health insurance protection, it is my 
grandfather's health insurance. What are they doing to Medicare?''
  Let me tell you for a moment, if you are 65 years old or older, 
listen with interest; if you are 59 years old or younger, listen to 
this debate with great interest. It is about you and when you will be 
able to retire. It is whether or not you will have the protection of 
health insurance in your old age.
  This is the committee print for the bill we are considering, a very 
interesting document. There is a provision in here that we are now 
debating which you might overlook, but it is so important that 
virtually everyone under the age of 59 years in the United States of 
America, because of a handful of sentences here, may have to change 
their plans as to when they are going to retire. That is how important 
this debate is, that is how important this issue is, because buried in 
this committee print on page 161 at the bottom of the page is a Texas 
two-step for America's working families. A Texas two-step--step, step, 
slide, slide, and guess what? It raises the eligibility age for 
Medicare from 65 to 67.
  What does that mean? It means if you were counting on retiring at age 
65, taking your Social Security, taking your Medicare, guess what? You 
now have to wait a couple of years, or at least retire without the 
protection of Medicare.
  Is that important to people? I think it is very important. Do you 
know how many people now at the age of 65 have health insurance in 
America? Thirty percent; 70 percent do not. They are people who count 
on Medicare to protect them. And the Senator from Texas offers an 
amendment which says, ``Oh, you can count on Medicare to protect you, 
just wait 2 years, wait 2 years, and then we will start protecting 
you.''
  What if you should retire at age 60, what if your employer says to 
you, ``Oh, take your retirement, we'll give you health insurance 
protection,'' and changes his mind? Have you ever heard that story? I 
have heard it plenty. People who retired say, ``I'm taken care of, the 
company I work for gave me a watch, they gave me a health insurance 
plan, this is going to be great, I'm going fishing.'' Then what 
happens? The company is sold two or three times, a couple mergers, a 
couple cutbacks, and the next thing you know, they are saying, ``Sorry 
we have to send you a letter and tell you the bad news. No more health 
insurance, Mr. Retiree. Thanks for working for us for 35 years.'' And 
there you sit at age 61 without health insurance.
  What does it cost you? I know what it costs in Chicago because we 
checked. About $6,000 a year if you are healthy. If you are not healthy 
and in your sixties, 10,000 bucks a year. Did you count on that when 
you decided to retire? I don't think so. And if you get stuck in that 
position, you know what you start doing? You start counting the days to 
when you will be eligible for Medicare. How many more months before I 
reach age 65 and Medicare is going to come in and protect me and my 
family and my savings? You count the days.
  The Senator from Texas, who offers this amendment, wants you to keep 
counting for 24 months more, wants you to hang on until you are 67. 
Then he says we should make you eligible for Medicare.
  I think that there is some question as to the statement in the 
committee print about its voracity. I know we are not supposed to say 
that, but let me

[[Page S6119]]

just tell you why I say that. The committee says we are changing 
Medicare so that it tracks Social Security and, in their words, they 
say, ``The committee provision will establish a consistent national 
policy on eligibility for both Social Security, old age pension 
benefits and Medicare.''
  Let us concede the obvious. The age to retire under Social Security 
in the next century is going to go up from 65 to 67. This is true. It 
is the basis for this amendment. But it is not the whole story, I say 
to my friends. The whole story is this. You can draw Social Security at 
age 62. You won't get as much, but that is your option. ``I will take a 
lower retirement, I'm leaving at 62, that's it.'' But you can't do that 
on Medicare. You can't draw Medicare benefits at age 62. Right now you 
wait until you are age 65, unless you are disabled, and the Senator 
from Texas wants you to keep on waiting for 2 more years to the age of 
67. I don't think that is an accurate statement when they say they are 
going to track Social Security. They don't track Social Security.

  The Senator argues this gives people time to adjust. He talks about 
compassion and courage. How much courage does it take to say to a 
senior citizen who now has developed a serious heart problem, ``Keep 
drawing out of your savings accounts to pay for your health 
insurance.''
  You know what will be compassionate and courageous, not raising the 
age to 67. What would be compassionate and courageous is universal 
health care. To say no matter how old you are, rich or poor, where you 
live, black or white, regardless of your ethnic background, you are 
insured in America. You are not going to be stuck in the situation we 
are creating with this bill, you are not going to be stuck in the 
position with a terrible medical problem at age 62 and no health 
insurance, waiting and praying for the day when you are eligible for 
Medicare. That would be compassion and courage. That would be 
responsive to the 40 million Americans stuck today without health 
insurance.
  Let me tell my friends, my opposition to this provision to raise the 
eligibility age for Medicare comes, of course, from the Democratic 
side, but I have some interesting allies in this battle. Eighty 
different corporations have written to the Members of the Senate and 
said, ``Please, do not do this, do not accept Senator Gramm's proposal 
to raise the eligibility age for Medicare to 67.'' Among them, the 
National Association of Manufacturers and the U.S. Chamber of Commerce.
  What is a Democrat doing arguing the position of the U.S. Chamber of 
Commerce here? I will tell you why. These companies and their 
associations now offer to their employees health insurance protection 
until they are eligible for Medicare. That is written in the contract. 
If you make eligibility for Medicare age 67 instead of 65, these 
companies have a new liability that has been dumped in their laps by 
the Texas two-step, and it is a disincentive for any other company to 
offer this benefit to their employees. They know it costs more, and 
they don't know what the Senate is likely to do next year when it comes 
to Medicare eligibility. That is what this battle is all about.
  When I look at the number of people currently covered by health 
insurance at age 60 and 65 in America, it is clear. Fewer companies are 
offering protection. More people are on their own. The expense of 
health insurance when you reach age 60 goes through the roof, even 
without any kind of medical problem. That is what this debate is all 
about.
  You want to save Medicare? There are lots of things we need to do on 
a bipartisan basis. There is a Commission created by this bill to study 
those ways, to make sure that we do it in a sensible, fair, 
compassionate way. But instead, my colleague from Texas and his friends 
on the committee have decided, let's just take a flier, let's throw one 
of them out there. And the first one they throw out there does not 
impose any new liability on health care providers, it imposes a new 
burden on seniors in years to come.
  Those who retire after the year 2003 have to start waiting longer and 
longer and longer. I say to my friends, I don't think that is what 
Medicare is all about. Many of the people who proposed this, frankly, 
don't care much for Medicare. That came out in the last campaign. Some 
of the candidates stood up and said, ``Yeah, I voted against it, and 
I'd do it again.'' I am not one of them. I didn't have the opportunity, 
the rare opportunity, to vote for this program. But I will tell you 
this, I am going to vote to protect it. I am going to vote to protect 
it because of what it has meant to my family. Medicare has meant to my 
family that you can retire not only with the dignity with Social 
Security, but with the protection of Medicare.

  Parents don't want to be burdens on their children. They want to live 
independently, enjoy their lives because they played by the rules and 
they have paid in. To change the rules at this point, to say we are 
going to raise the retirement age for Medicare really reneges on a 
promise that was made over 30 years ago. It is the wrong way to go. We 
can make Medicare solvent in the long term, and we can do it in a 
sensible way.
  At this point, I yield, for purposes of debate, to my colleague from 
California, Senator Boxer.
  Mr. LAUTENBERG. Mr. President, I ask how much time does the Senator 
from Illinois have remaining that I gave him?
  The PRESIDING OFFICER. The Senator has spoken for 10 minutes.
  Mr. LAUTENBERG. He has spoken for 10 minutes.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, I yield myself 4 minutes.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. GRAMM. Mr. President, let me first point out that when our 
colleague talks about people waking up and finding that age of 
eligibility is changed by 2 years, let me say that those people are 37 
years old today. It will be between now and the year 2027 that this 
retirement age will phase up.
  One of the reasons we want to do this now is we don't want people to 
wake up and discover that this has happened and they have not had time 
to plan on it. By doing it now, this will affect the full 2-year 
increase; it will affect only people born after 1960. That is, they are 
going to have 30 years in which to change their life's plan in order to 
accommodate this change.
  Our colleague acts as if tomorrow they are going to wake up and 
discover that the eligibility has changed.
  Let me remind my colleague, unless the note I have been passed is 
incorrect, that in 1983, on March 24, our colleague voted to raise the 
retirement age for Social Security, is that correct?
  Mr. DURBIN. Will the Senator yield?
  Mr. GRAMM. I yield for an answer to that question.
  Mr. DURBIN. The amendment offered was the Pickle-Pepper amendment in 
the House of Representatives. I voted with Mr. Pepper and against 
raising the retirement age.
  Mr. GRAMM. You voted for final passage on the bill on March 24. My 
point is, we are going to have to do this. Everybody knows we are going 
to have to do it. Should we wait until there is a crisis so that we 
will literally do what the Senator from Illinois says and make the 
change so it will go into effect immediately?
  That is what is going to happen when you look at the exploding 
deficit of Medicare. We will have a $1.6 trillion loss to the Treasury 
in trying to maintain the program in the next 10 years alone.
  Our colleagues are not telling us that by the year 2025 when we will 
be going into the final phase up, we will have to triple the payroll 
tax--triple the payroll tax--to pay for Medicare if we don't begin to 
make changes. They are not proposing today to triple the payroll tax. 
They are simply saying, ``Don't act now, wait until there's a crisis; 
wait until Medicare is flat on its back and then make the change.''
  Let me tell you why we can't do that. We can't do it because the 
phase in is already underway in Social Security, something that both 
Houses of Congress approved, and the President signed. It was voted for 
on a bipartisan basis raising the effective retirement age for full 
retirement benefits to 67. That is already the law of the land, and 
that phase up begins very slowly, a matter of months each year, very 
slowly, but it begins in the year 2003.

[[Page S6120]]

  If we wait, we are going to end up doing what our colleague accuses 
us of today. But the truth is, by doing it now, for those who will have 
to wait an additional 2 years, they will have 30 years to adjust. This 
is the responsible way to do it. It is the way it should be done, and I 
hope it will be done. If we don't do it, we will be back here in 3 or 4 
years doing it under crisis circumstances and doing it immediately.

  The PRESIDING OFFICER. The time of the Senator from Texas has 
expired.
  Mr. ROTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, I ask unanimous consent that we set aside 
temporarily the motion before us to consider a technical amendment that 
has been cleared on both sides.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 431

             (Purpose: To provide for managers' amendments)

  Mr. ROTH. Mr. President, I send an amendment to the desk on behalf of 
Senator Moynihan and myself and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth], for himself and Mr. 
     Moynihan, proposes an amendment numbered 431.

  Mr. ROTH. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Is there objection?
  Mr. FAIRCLOTH. Reserving the right to object.
  The PRESIDING OFFICER. Does the Senator object?
  Mr. FAIRCLOTH. I do object.
  The PRESIDING OFFICER. The objection is heard. The clerk will read 
the amendment.
  The legislative clerk proceeded to read the amendment.
  Mr. FAIRCLOTH. Mr. President, I withdraw my objection.
  The PRESIDING OFFICER. The objection is withdrawn.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. LAUTENBERG. Mr. President, none of this time is charged, I 
assume, to the waiver amendment that the Senator from Delaware has 
proposed?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. ROTH. Mr. President, as you can imagine, drafting a piece of 
legislation this large in such a short timeframe and having to 
incorporate over 50 amendments resulted in some technical errors and 
omissions. The items contained in this amendment are those which are 
technical in nature, and replace inadvertent omissions or are necessary 
to bring the legislation into compliance with the committee's budget 
instructions.
  The amendments accepted or adopted in the committee markup were done 
so with the proviso they would not bring the committee out of 
compliance with its instruction.
  Therefore, now that the Congressional Budget Office has completed 
scoring of the entire package, certain revisions to these amendments 
are necessary. A description of the items contained in this amendment 
is located on each Senator's desk.
  I ask this amendment be adopted and be considered original text for 
the purpose of amendment.
  The question is on agreeing to the amendment.
  The amendment (No. 431) was agreed to.
  Mr. ROTH. I move to reconsider the vote.
  Mr. LAUTENBERG. I move to lay it on the table.
  The motion to lay on the table was agreed to.

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