[Congressional Record Volume 148, Number 101 (Tuesday, July 23, 2002)]
[Senate]
[Pages S7199-S7218]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  GREATER ACCESS TO AFFORDABLE PHARMACEUTICALS ACT OF 2001--Continued

  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, what is the parliamentary situation? What 
is pending?


                     Amendments Nos. 4309 and 4310

  The PRESIDING OFFICER. Under the previous order, there will now be 30 
minutes for debate, to be equally divided between the Senator from 
Massachusetts, Mr. Kennedy, and the Senator from New Hampshire, Mr. 
Gregg.
  The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, on behalf of Senator Kennedy, whom I do 
not see in the Chamber yet, I yield myself 4 minutes.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I am going to vote for the Graham-Miller 
amendment because it is, to my mind, the best proposal before us. It 
will provide affordable prescription drug coverage throughout the 
country. I think that is the best policy.
  But it now appears there may not be enough votes for that amendment. 
The same, I might add, is also true of the Grassley amendment, which 
embodies the so-called tripartisan approach.
  If that turns out to be the case, we will be at a stalemate. At that 
point, we will have to decide whether there is some way to resolve our 
remaining differences so we can write a prescription drug bill that can 
pass.
  With that in mind, I would like to briefly discuss the three key 
remaining differences.
  The first, and probably most significant, is referred to as the 
delivery model. That may sound like some kind of technical jargon, but 
it is actually a very important matter and will determine whether we 
are passing some theoretical, pie-in-the-sky prescription drug benefit 
that works on paper but fails out in the real world or whether we are 
passing one that will really get prescription drugs to seniors at 
affordable prices.
  There are two approaches.
  Under the Graham-Miller approach, prescription drugs will simply be 
added to the existing Medicare Program, with some new incentives for 
efficient administration.
  Under the Grassley approach, in contrast, prescription drugs will be 
provided through a new, market-based system that relies on private 
insurance companies.
  People may ask: Why not try something new? What is wrong with a new 
market-based system?
  Simply this: The new system is untested and may leave seniors without 
adequate coverage, especially in rural States such as my State of 
Montana.
  Let me explain. Montana seniors, like those living in other rural 
areas, lack the rich retiree coverage options their urban counterparts 
enjoy. There just are not as many large companies offering benefits to 
retired workers in my State of Montana as there are in other parts of 
the country.
  We also do not have any Medicare+Choice plans offering free or low-
cost drugs to beneficiaries as in places such as Florida or some other 
parts of the country. In addition, our Medigap rates are higher than 
the national average and Medicaid coverage is lower.
  On top of all that, we have been burned in the past by the promises 
of competition and efficiency. Rural areas often get the short end of 
the stick when we deregulate and leave people at the complete mercy of 
market forces that favor highly-populated areas. Consider airline 
deregulation, managed care, and energy deregulation, to name a few.

  I don't want to overstate the case. I'm not saying that a new 
approach is absolutely unworkable. But I am not willing to buy a pig in 
a poke. I want a reasonable assurance that a private insurance model 
will work.
  I know that many other Senators share my concern. How can we address 
this concern? Is there another way, another idea? There may be.
  In essence, we would shift to a new, market-oriented system but do it 
gradually, with plenty of safeguards to make sure that it really works, 
especially in rural areas and other underserved areas.
  The resulting system might not be quite as efficient as some would 
like but in exchange, it is more stable than it otherwise would be 
under the private model.
  The second key difference, between the two main proposals, is how 
much to spend on a prescription drug benefit. Clearly, we are talking 
about a big investment of government dollars, and even at the amounts 
we are considering here, we won't buy a benefit that will meet seniors' 
expectations.

[[Page S7200]]

  The proposals that include a so-called doughnut, or coverage gap, 
give pause for concern, simply because during some parts of the year, 
seniors would not receive any assistance. I don't want to belabor the 
point, as I know many others have talked about this problem over the 
past few days.
  To my mind, the Graham-Miller bill is right about on target, and I 
hope that those who support the Grassley approach can, in the spirit of 
compromise, agree to devote some further resources to helping our 
seniors.
  The final key difference involves what is referred to as ``Medicare 
reform.'' That means making additional changes to the Medicare system, 
beyond those necessary to provide a prescription drug benefit.
  With due respect to the proponents of reform, I believe that we 
should keep our eye on the ball. We have limited resources. Many of the 
reforms are untested and, in some cases, risky. We will have other 
opportunities to consider broader changes to the Medicare program.
  In light of this, I suggest that we defer the debate about additional 
reforms until a later date, and concentrate on prescription drug 
coverage.
  Those are the key differences. Delivery model, spending, and other 
reforms.
  Are they significant? They certainly are.
  Can they be resolved? If we roll up our sleeves and put the interests 
of seniors ahead of politics or theory, we will get it done.
  I yield the floor and encourage my colleagues in the next several 
days to work to find a compromise that gets the large vote and protects 
our seniors.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I yield 3 minutes to the Senator from 
Maine.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. SNOWE. Mr. President, the moment is at hand when the Senate will 
determine the fate of prescription drug coverage for our Nation's 
seniors. I hope we will not allow a 60-vote threshold to stand between 
us and the possibility of passing a meaningful benefit for our Nation's 
seniors. That would be doing a tremendous disservice to those seniors 
who desperately need prescription drug coverage. I hope we will avoid 
the procedural gymnastics and do what is right.
  The tripartisan plan is the only plan that has across-the-aisle 
political support. We worked on this endeavor for more than a year. I 
hope Members of the Senate will give it serious consideration.
  The facts speak for themselves on the tripartisan plan. Our plan is 
permanent. It does not sunset as the Graham proposal that sunsets after 
2010. The language is right in the legislation. We have never, ever 
added a temporary benefit to the Medicare Program in its 37-year 
history, and we should not start now. It is providing a false hope to 
seniors who need this type of coverage. They should not have to beat 
the clock when it comes to their own health care. I guess you had 
better not get sick after 2010 because that benefit will expire.
  The tripartisan plan is universal, applying to seniors no matter 
where they live in America, with the lowest premium offered of any bill 
either in the House or the Senate, thanks to a 75-percent Federal 
subsidy, which is higher than what Federal employees get under their 
health care coverage. Our opponents' plan not only creates a higher 
premium, but they also increase the prices of prescription drugs. That 
is not our projection; it is the projection of the Congressional Budget 
Office that estimates it could be anywhere as high as 15 percent, but 
at least 8 percent, in driving up the cost of prescription drugs.

  It is also estimated under the tripartisan plan that 99 percent of 
seniors will participate, and 80 percent of those who do will never 
reach our benefit limit of $3,450.
  I remind Members that we have a catastrophic benefit of $3,700 to 
protect people's out-of-pocket costs that are very high. Seniors in our 
plan will pay less on copayments, less on copayments under our plan for 
39 out of the top 50 prescribed drugs for seniors. And we cover all 
drugs--brand name, generics--unlike the plan offered by the Senator 
from Florida, Mr. Graham who leaves out most of the brand name 
prescriptions. In fact, only 10 percent of the brand name drugs will be 
covered under that legislation. Under the tripartisan plan, seniors 
will have access to all drugs.
  I ask unanimous consent for an additional minute.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. SNOWE. That is an important feature because by excluding most of 
the brand names from coverage, that means you are denying seniors 
access to the most innovative and cutting-edge therapies available. 
That is not the kind of coverage we want to provide because that is a 
huge gap in coverage.
  Finally, I hope we will not allow this issue to die today here on the 
floor. I appeal to my colleagues to do everything they can to prevent 
killing this legislation. We need to get something done. These votes 
today are going to be very important in determining who wants the 
politics or who wants the issue.
  We want progress. The best way to get progress on this most vital 
issue to our Nation's seniors is by supporting the tripartisan plan 
that has bipartisan support in the Senate.
  I hope Members of this body will support this plan that will do more 
to help our Nation's seniors in providing them a much-deserved 
prescription drug benefit.
  I yield the floor.
  Mr. LEAHY. Mr. President, in recent days the Senate has begun to 
consider a number of proposals designed to help Americans afford their 
needed prescription drugs, not the least of which is to create a 
Medicare prescription drug benefit. This is an important debate, and 
one that has been a long time in coming to the floor of the Senate. Now 
we have the opportunity to not just talk about creating a Medicare drug 
benefit but to prove to our Nation's seniors and disabled that we stand 
by our word. The amendment offered by Senators Graham, Miller, and 
others is the best proposal before us, and it is one that I urge my 
colleagues to support.
  I am pleased to be an original cosponsor of this piece of legislation 
because it is the only one that would create a new, voluntary 
prescription drug benefit within the Medicare Program that all 
beneficiaries would be eligible for. Under the Graham-Miller proposal, 
Medicare beneficiaries will receive assistance starting from the moment 
they buy their first prescription drug. There is no deductible and 
there is no gap in coverage, ensuring that no senior will be left 
stranded without the drugs they need. Beneficiaries would be 
responsible for copayments of $10 for generic drugs and $40 for 
medically necessary preferred brand name drugs until they have reached 
$4,000 of out-of-pocket spending, at which point Medicare pays all 
expenses. This bill provides low-income seniors and those with 
disabilities with extra assistance by covering the premiums and copays 
for those living below 135 percent of poverty, and giving premium 
assistance to those between 135 and 150 percent of poverty. In my State 
of Vermont, 28,000 of our 87,000 Medicare beneficiaries have incomes 
less than 150 percent of poverty and thus will qualify for this extra 
assistance available under the Graham-Miller proposal.
  This amendment will help our seniors get the drugs they need, no 
matter where they live, what their income, or how sick they are. I urge 
my colleagues to support this important measure that will put 
affordable prescription drugs within the grasp of some of our most 
vulnerable Americans.
  Mr. AKAKA. Mr. President, I rise today as a cosponsor of the Graham-
Miller-Kennedy amendment that would establish a guaranteed Medicare 
prescription drug benefit for all seniors.
  Approximately 19 million seniors in the United States have little or 
no prescription drug coverage. Prescription drugs are the largest out-
of-pocket health care cost for seniors. Many who cannot afford drug 
coverage often do not take the drugs their doctors prescribe, and one 
in eight senior citizens is sometimes forced to choose between buying 
food and buying medicine. While numerous seniors live on modest fixed 
incomes, prescription drug costs have increased by more than 10 percent 
a year since 1995. Medicare needs a voluntary prescription drug benefit 
so

[[Page S7201]]

seniors have the same protection against the high cost of prescription 
drugs as they have for hospital care.
  The Graham-Miller-Kennedy amendment is the most comprehensive 
Medicare prescription drug benefit proposed in the Senate thus far. It 
provides coverage to all seniors regardless of their health or income. 
In Hawaii, 159,000 senior citizens and disabled Medicare beneficiaries 
would be eligible for coverage under the Outpatient Prescription Drug 
Act, 41,000 low-income seniors in Hawaii would qualify for additional 
assistance under the plan.
  Affordable premiums and copayments are key components of the Graham-
Miller-Kennedy plan. For example, if a senior spends $4,000 on 
prescription drugs, she would reach the catastrophic limit and all 
additional drug expenses would be covered under this proposal. Seniors 
will not lose their current employer retirement coverage and will not 
have to rely on the public benefits provided by the plan. There also 
would not be a asset test required for participation in the Graham-
Miller-Kennedy program.
  The competing amendment proposed by the Senator from Iowa is well 
intended, but the Grassley amendment would not provide adequate 
coverage for seniors. The Grassley amendment would result in 26,000 
seniors in Hawaii losing their existing retirement coverage, 47,000 
seniors and disabled Medicare beneficiaries in Hawaii would fall into 
the benefit hole and would have to continue paying premiums and paying 
higher drug costs while not receiving any benefits. The Grassley 
amendment would also include a means test to qualify for additional 
assistance that would prevent seniors with assets greater than $4,000 
from qualifying for additional assistance.
  Today, the Senate has a historic opportunity to provide seniors with 
the missing piece of health care coverage that is urgently needed. We 
must ensure that all seniors are provided with an affordable and 
comprehensive prescription drug benefit for all seniors. I urge my 
colleagues to support the plan which does this, the Medicare Outpatient 
Prescription Drug Act.
  Mr. VOINVICH. Mr. President, I rise to speak in favor of the 
tripartisan prescription drug proposal before the Senate. I applaud the 
efforts of Senators Grassley, Breaux, Hatch, Snowe, and Jeffords, in 
developing this legislation.
  Their work is the culmination of a year's effort to bridge the gap 
between the Medicare of 1965 and the Medicare for today and the future. 
As my colleagues know, when Medicare was enacted in 1965, Congress made 
a commitment to our Nation's seniors and disabled to provide for their 
health security. Unfortunately, that security is on shaky ground 
because Medicare has not kept up with the evolving nature of health 
care. The delivery of health care has vaulted ahead so dramatically 37 
years after the inception of Medicare, that this system which was once 
sufficient is now anticipated and ineffective.
  For example, conditions that used to require surgery or inpatient 
care can now be treated on an outpatient basis with prescription drugs. 
It is time for Medicare to reflect the realities of today's health care 
delivery system. The vast majority of my colleagues will agree when I 
say providing prescription drug coverage through Medicare is the next 
logical step towards modernizing the program. The best way to deliver 
such a benefit, however, is a point on which a number of my colleagues 
on the other side of the aisle disagree. My colleagues from the Finance 
Committee have found a solution that is a good compromise and is result 
that can be agreed to by both Democrats and Republicans. In fact, I 
would venture to say that the tripartisan proposal has the support of a 
majority of Senators.
  Unfortunately, a simple majority will not suffice. As my colleagues 
know, we are working under the fiscal year 2002 budget resolution, 
which set aside $300 billion for a prescription drug benefit. Because 
we never voted on a fiscal year 2003 budget resolution, the first time 
the Senate has not done so since 1974, we have no choice but to stay 
within the parameters of 2002 funding levels. The fact of the matter is 
we have stacked the deck against passing any sort of meaningful benefit 
that costs over $300 billion, regardless of whether the majority of 
Senators support the proposal.
  Regardless, the bar has been raised to pass prescription drug 
coverage, which clearly indicates that any bill that passes through 
this body will have to be bipartisan in nature--or tripartisan in this 
case. The tripartisan bill is the only measure we have before the 
Senate that bridges both parties and is a benefit that can pass.
  We cannot delay any further. Each year we delay means another year 
our Nation's seniors will be forced to do without. already we have 
heard too often of seniors that have had to choose between food and 
prescription drugs. I, for one, am ready to go to my constituents in 
Ohio and say we were able to move past partisanship and provide real 
security for their health. The tripartisan proposal does that. We must 
act now, and we must act responsibly.
  It is vital that we pass a prescription drug benefit this year, and 
it is vital that we pass one that is fiscally responsible. Ideally, the 
Federal Government would able to pay for every pill ever needed for 
every senior. Unfortunately, we live in the real world and are subject 
to limited resources. I would like to take a few moments to shed some 
light on our Government's current fiscal condition. Last year, the 
Congressional budget Office predicted a unified budget surplus of 
$313billion or fiscal year 2002. As my colleagues know, this rosy 
budgetary picture is no longer the case. Recent budget projections show 
that the Federal Government is in much worse fiscal condition than we 
thought. These new projections show that the Federal Government will 
spend the entire Social Security surplus in both the current fiscal 
year and in fiscal year 2003 and we will be borrowing $52 billion this 
year and $194 billion in 2003.
  With this in mind, it is imperative that we act not only to provide 
Medicare benefits for today's beneficiaries, but also for the baby 
boomers who will arrive in 2011. If we do not act responsibly in 
providing a benefit, we will end up writing IOUs not only for Social 
Security, but for this benefit as well. The tripartisan proposal 
strikes a balance between providing seniors and the disabled access to 
needed prescription drugs today and doing so in a fiscally sensible way 
that will allow benefits to extend to future generations.
  I cannot say the same for the Graham-Miller bill. Top the best of my 
knowledge,I cannot definitively state what the Graham-Miller bill will 
cost. My colleagues on the other side claim that their bill will cost 
$450 billion over 6 years. Then, after 6 years, as their bill is 
currently written, the benefit would sunset.
  However, let us make the assumption that the Graham-Miller bill 
passed and their benefit did not sunset. What would that mean for the 
American people? I have a sneaking suspicion that $450 billion will 
somehow become $800 billion or as much as $1 trillion over 10 years. 
This is on top of the estimated $3.6 trillion it will cost the Federal 
Government to provide basic Medicare services for seniors and the 
disabled. As I see it, under the Graham-Miller bill, the American 
people get stuck between choosing cyanide and hemlock.
  Senator Grassley and the others in the tripartisan group have put 
before the Senate a proposal that would cost $370 billion as scored by 
CBO. The natural question that I think the American people would like 
to know is what does $370 billion buy? In my opinion, $370 billion 
provides a real prescription drug benefit that is affordable to both 
the beneficiaries and the Federal Government.
  Under the tripartisan proposal, premiums would be $24 a month, an 
amount that is lower than the Graham-Miller bill. After a $250 
deductible, the Government would cover half of all prescription drug 
costs up to $3,450.
  Now, my colleagues on the other side of the aisle will claim that the 
so-called doughnut hole after $3,450 will be the financial ruin of 
every senior. The truth is that the vast majority of seniors, 80 
percent, would never even hit that hole. Moreover, the hole exists only 
until the beneficiary accrues another $250 in costs, at which time the 
government would pay for 90 percent of all remaining drug costs.
  While this benefit will greatly help seniors throughout the Nation, 
there are still some seniors for whom the $24 per month premium and 
additional

[[Page S7202]]

cost-sharing is still too high. For those individuals, the tripartisan 
bill provides protections that will allow access to prescription drugs. 
For those seniors under 135 percent of poverty, the tripartisan plan 
would provide a full subsidy for monthly premiums. In addition, the 
Government would cover 95 percent of their prescription drug costs to 
the initial benefit limit and 100 percent above the stop-loss limit. 
And for those seniors between 135 and 150 percent of the poverty level, 
the tripartisan proposal would provide assistance with their monthly 
premiums on a sliding scale. In addition, these individuals would pay 
no more than 50 percent of their drug costs once the $250 deductible 
has been reached.
  When we talk about dollars being spent, we should also point out to 
seniors that they will receive more bang for their buck under the 
tripartisan proposal. Seniors will not just receive direct assistance 
from the government to cover their prescription drug bills. Rather, 
under the tripartisan plan, competing pharmaceutical delivery plans 
will be forced to provide the best value on prescription drug prices in 
order to attract beneficiaries to their respective plans. To the 
advantage of both Medicare beneficiaries and the Federal Government, 
this competition will decrease the price of prescription drugs and 
permit all parties to stretch their dollars further. For example, the 
same dollar that today would buy one day's dose of Lipitor, might 
purchase 2 days' worth of the drug when competing plans vie for 
consumers as they would under the tripartisan plan.
  This body has been playing this political posturing game for too 
long. I am tired of explaining partisanship as the excuse for why this 
body has not passed a prescription drug benefit and has forced the 
least of our brothers and sisters to choose between food and 
prescription drugs. I am pleased that the Senate will have the 
opportunity to show the American people, especially our Nation's 
seniors and disabled, whether we are serious about enacting legislation 
to provide a prescription drug benefit this year.
  The tripartisan bill has support from both sides of the aisle. The 
House has passed their measure. The President is ready and willing to 
sign a bill into law this year. The burden is squarely on the Senate's 
shoulders. All eyes are on us. I am confident that we will have more 
than 50 votes in favor of the tripartisan plan. I hope that those that 
are considering voting against this proposal have a very good reason 
for not supporting it, because the people in their State will be asking 
them the question: Why didn't you support a plan that gets the job done 
in a fiscally responsible way.
  So while seniors wait for a prescription drug benefit, I will 
continue to work to educate seniors about generic drugs. I have been 
working on this issue for some time, providing funds at the Food and 
Drug Administration for consumer education and working with other non-
profits to educate our seniors about the availability and efficacy of 
generics.
  In the meantime, I urge my colleagues to waive the budget point of 
order on the tripartisan amendment so that Medicare can move forward 
into the 21st century and so that seniors and the disabled are able to 
have access to affordable prescription drugs.
  Ms. COLLINS. Mr. President, as an original cosponsor of the 
tripartisan 21st Century Medicare Act, I rise in support of this 
amendment to make affordable prescription drug coverage available to 
all of our Nation's seniors.
  Prescription drugs are as important to a Medicare beneficiaries' 
health today as a hospital bed was in 1965, when the program was 
created, and I have long been a supporter of providing a prescription 
drug benefit as part of our efforts to strengthen Medicare. With recent 
advances in research, prescription drugs can literally be a life-line 
for patients whose drug regimen protects them from becoming sicker and 
reduces the need to treat serious illness through hospitalization and 
surgery. Soaring prescription drug costs, however, have placed a 
tremendous financial burden on the millions of Medicare beneficiaries 
who must pay for these drugs out of their pockets.
  More and more, I am hearing disturbing accounts of older Americans 
who are running up huge, high-interest credit card bills to buy 
medicine they otherwise couldn't afford. Even more alarming are the 
accounts of patients who are either skipping doses to stretch out their 
pill supplies or being forced to choose between paying the bills or 
buying the prescription drugs that keep them healthy. It is therefore 
critical that we bring Medicare into line with most private sector 
insurance plans and expand the program to include prescription drugs.
  The tripartisan plan that is before us today will provide an 
affordable and sustainable prescription drug benefit that will be 
available to all seniors. Moreover, unlike the alternative bill, our 
plan will make the drug benefit a permanent part of Medicare and is 
fully funded at $370 billion over 10 years.
  Under the tripartisan bill, all seniors will have the choice of at 
least two prescription drug plans, regardless of where they live. This 
will enable them to select the kind of prescription drug coverage that 
they need. Moreover, the coverage under these plans will be 
comprehensive. Seniors will have access to every drug, from the 
simplest generic to the most advanced, innovative therapy.
  Our plan is also affordable and has the lowest monthly premium--$24--
of any of the comprehensive prescription drug proposals that are on the 
table. Not only does our plan offer a lower premium, but it also offers 
lower copays for most drugs than the amendment proposed by the Senator 
from Florida. As the senior Senator from Maine pointed out on the floor 
the other day, seniors will pay more for most of the top 50 drugs under 
the Democrats' bill than they will under the tripartisan plan. For 
example, the copayment for Glucophage, which is used in the treatment 
of Type 2 diabetes, would be $40 under the Graham-Kennedy bill, and 
only $31 under the tripartisan plan.

  In fact, our plan is such a good deal that the Congressional Budget 
Office tells us that just about everyone will take it. According to the 
CBO, 93 percent of seniors will enroll in our program, while 6 percent 
will elect to retain their current prescription drug coverage. This 
means that 99 percent of all seniors will have prescription drug 
coverage once our plan is implemented.
  No one should have to choose between paying their bills and buying 
their pills. That is why our bill provides additional subsidies to low-
income seniors. For example, the 10 million seniors nationwide, 
including 65,000 Mainers, with incomes below 135 percent of poverty 
will have 98 percent of their prescription drug costs covered by 
Medicare with no monthly premiums and no gap in coverage.
  In addition, these low-income seniors will not be subject to any 
deductible, and they will pay an average copayment of just $1 and $2 
for each prescription. This is comparable to the copays required under 
Maine's Medicaid Program, which requires beneficiaries to pay $2 for 
each generic drug and $3 for each brand name drug.
  The 10,000 Maine seniors with incomes between 135 percent and 150 
percent of poverty will also receive generous subsidies under our plan. 
All seniors with incomes below 150 percent of poverty will be exempt 
from the benefit limit. As a consequence, 80 percent of Medicare 
beneficiaries will never experience any gap in coverage under our plan. 
Seniors with incomes below 150 percent of poverty will also receive a 
subsidy that lowers their monthly premiums to anywhere between zero and 
$24 a month, based on a sliding scale according to income.
  My biggest concern about the amendment offered by my colleague from 
Florida is the cost. My understanding is that this plan will cost 
anywhere between $600 billion and $1 trillion over the next ten years. 
This is simply too heavy a financial burden for both current and future 
generations to shoulder, particularly given our mounting Federal 
deficit.
  Moreover, despite its tremendous cost, the alternative plan promises 
only temporary help, not a permanent solution. Their plan sunsets after 
6 years, and makes no provision for a drug benefit after 2010. In other 
words, their plan ends just as the tidal wave of baby boomers is 
preparing to retire.
  The tripartisan plan also includes other improvements to the Medicare 
Program that are not included in the Graham-Kennedy proposal. The 
current

[[Page S7203]]

Medicare benefit package, which was established in 1965, now differs 
dramatically from the benefits offered under most private health plans. 
Our bill would provide a new, enhanced fee-for-service option for 
Medicare beneficiaries that more closely mirrors private health plans. 
For example, it would cover more preventive services than traditional 
Medicare at little or no cost. It would also provide protection against 
catastrophic medical costs for those seniors with serious health 
problems. The traditional Medicare Program provides no such 
catastrophic protection.
  No one would be forced to enter this new plan. It is simply another 
option. If seniors want to stay in the traditional Medicare Program, 
that is fine, and they will still be eligible for the new prescription 
drug coverage.
  Access to affordable prescription drugs is perhaps the most important 
issue facing our Nation's seniors today. It is therefore my hope that 
the Senate will stop playing politics so that we can pass a meaningful 
Medicare prescription drug bill this year. The 21st Century Medicare 
Act is the only legislation before the Senate that has not just 
bipartisan, but tripartisan support. Moreover, it has the support of 12 
of the 21 members of the Senate Finance Committee, which has 
jurisdiction over Medicare. That is not to say that I think the 
tripartisan plan is perfect. I do not, for example, like the copayments 
imposed on home health care in the new fee-for-service option, and I 
would, of course, prefer a plan that had no gaps in coverage.
  The tripartisan plan does, however, provide a major improvement in 
coverage, and I believe that it is the only proposal that gives our 
seniors any real hope of getting an affordable Medicare prescription 
drug benefit this year.
  Since the cost of providing a meaningful drug benefit will only 
increase as time passes, it is all the more important that we act now. 
I therefore urge all of my colleagues to join me in supporting this 
tripartisan amendment.
  Mr. REED. Mr. President, I would like to take a few minutes before we 
vote later today on the Graham amendment and the Grassley amendment to 
describe some of the grave concerns I have with the tripartisan 
amendment sponsored by Senators Grassley, Jeffords and Breaux.
  The tripartisan Senate bill offers the following ``benefits'' to 
seniors: an expected monthly premium of $24; a beneficiary must cover 
the first $250 in drug costs; then half of his or her drug costs are 
covered between $251 and $3,450; at that point the beneficiary is then 
responsible for all drug expenses between $3,451-$5,300;
  Moreover, the plan claims to offer assistance for low-income 
beneficiaries. What is not mentioned is that a strict asset test would 
prevent 40 percent of low-income seniors from even qualifying for this 
subsidy. A car, a wedding ring, or a burial plot over a certain value 
would render a beneficiary completely ineligible.
  The purpose of insurance is to provide protection against certain 
costs. The kind of insurance some of my colleagues in the Senate have 
proposed would leave those seniors and persons with disabilities 
holding the bag when their drug expenditures are highest. Under the 
tripartisan plan, beneficiaries could still be required to pay 
thousands of dollars in drug expenditures.
  This proposal would create a serious lapse in what is supposed to be 
a safety net for our most vulnerable citizens, only paying a quarter of 
an average Rhode Islander's prescription drug costs.
  When a person breaks an arm, Medicare pays for the whole cast, not 
half. A prescription drug benefit should pay for all of your benefits.
  There are other nonprescription-drug-related provisions contained in 
the tripartisan bill that are also of great concern, particularly Title 
II, the ``Option for Enhanced Medicare Benefits'' section. To me, the 
provisions outlined in this section of the bill are a direct affront on 
the Medicare Program as we know it. It seeks to create a new Medicare 
option that combines both Part A and Part B with a combined premium.
  Under this option, a beneficiary would pay more upfront, out-of-
pocket costs, such as a $10 co-payment for the first five home health 
visits and $60 per day for the first 100 days in a skilled nursing 
facility. In return, the beneficiary would pay nothing for preventive 
health services such as mammography and cancer screening and would 
receive protection against catastrophic health care costs.
  This new Medicare benefit option would reverse the universal nature 
of our current program by creating a new line of services for those who 
can pay more. During the Balanced Budget Act debate of 1997, I fought 
against the addition of copayments for home health and other essential 
services because they threaten the access of low-income beneficiaries 
to those services.
  This new enhanced benefit option would create a two-tiered system of 
the haves and the have-nots. Since there is no premium assistance for 
low-income beneficiaries who may wish to enroll in the enhanced benefit 
option, only more wealthy beneficiaries would be able to afford it. And 
since it requires beneficiaries to pay a greater share of their upfront 
costs, it would divert healthier, younger beneficiaries from the 
traditional program. This adverse selection would ultimately result in 
higher costs for those who remain in the traditional Part A and Part B 
program.
  The sponsors and supporters of the tripartisan Senate bill have 
argued that even though our Nation's most vulnerable citizens deserve a 
Medicare prescription drug benefit they can depend on, the proposal 
offered by Senators Graham, Miller, and Kennedy is simply too 
expensive. I would like to take a moment to highlight for my colleagues 
a recent report by the Center on Budget and Policy Priorities that I 
believe adds an important perspective to that point of debate.
  The report compared the cost of last year's tax cuts with the costs 
of two prescription drug proposals for the Medicare population. The 
estimated 10-year cost of the first plan being roughly $350 billion and 
the second $700 billion for the same period. The report found that when 
the tax cut is fully in effect, the cost of the tax cut for just the 
top 1 percent of the population would exceed the entire difference in 
cost between the two prescription drug proposals.
  I voted against the President's tax cut because I felt that it failed 
to leave room for critical immediate needs such as a prescription drug 
benefit, nor did it allow us to adequately address the long-term 
solvency of Social Security and Medicare.
  Once Congress enacts a Medicare prescription benefit, it will be 
difficult to modify or significantly alter it. If we are going to enact 
a benefit, we must pass a solid, reliable benefit that will continue to 
meet the needs of Medicare beneficiaries in years to come. And if 
resources are the issue, many Members have already stated clearly that 
there is a way to address that issue, either through the reserve fund 
set aside in last year's budget or by other means.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. GRAHAM. Mr. President, I yield myself 4 minutes, after I ask 
unanimous consent that Senator Dayton be added as a cosponsor of this 
amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAHAM. Mr. President, I rise to respond to criticisms raised 
about the availability and cost of drugs under the Democratic proposal. 
The minority leader has distributed a memo in which he cites selected 
provisions of our bill to come to a false conclusion about the access 
seniors would have to prescription drugs. I want to set the record 
straight.
  Under the Democratic proposal, all medically necessary drugs would be 
available to our seniors at a rate of no more than $40 per prescription 
for the year 2005--all medically necessary drugs, not just the drugs 
that are on the preferred list.
  The sections of the amendment Senator Lott chose to omit make clear 
that every senior would have access to any drug that is medically 
necessary for that senior. Seniors are further protected because the 
Medicare Program would assure that the definition of a class of drugs 
is clinically appropriate. To the contrary, the Republican bill allows 
the drug HMOs to define the classes of drugs and, further, on page 32 
of their amendment, clarifies that not all drugs within a class would 
have to be covered.

[[Page S7204]]

  Senator Lott may want to take a closer look at the Republican 
language given his concerns in this area.
  Under the Democratic proposal, seniors will know in advance exactly 
how much they will pay for any drug. In 2005, they will never pay more 
than $10 for a generic and $40 for a medically necessary brand name 
drug.
  Under the Republican plan, there is no way of knowing how much a 
senior would pay for a specific drug because there is no defined 
benefit in the Republican plan. Who makes the decisions? The drug HMOs 
make the decision. They choose how much the beneficiaries will pay, 
what the deductibles will be, and how much they will pay for each 
prescription in coinsurance. It could be 50 percent, which is what 
their charts say. It could be 80 percent. It will be determined not by 
the seniors, not by Medicare, but by the drug HMO.
  I urge my colleagues to consider carefully the differences between 
the Democratic and Republican bills. Our bill uses the Medicare 
Program, a tried and true delivery system, to provide prescription 
drugs to our seniors. The Republican bill privatizes Medicare and 
requires seniors to get their drugs from a drug HMO--if they can find 
one in their State.
  Our bill assures that seniors in rural America are guaranteed the 
same benefits provided to senior Americans elsewhere in this country. 
The Republican bill abandons rural Americans. Our bill gives seniors an 
affordable drug benefit and guaranteed prices. The Republican bill lets 
private insurers decide what drugs are covered and how much seniors 
will pay for each prescription.
  Our bill uses every taxpayer dollar, every dollar paid by the 
beneficiary in monthly premiums to lower the cost of prescription drugs 
for seniors. The Republican bill uses taxpayer dollars and premium 
dollars to lure uneager private insurers into a market for which today 
there is no private insurance being offered.
  Our bill is a bill for seniors. The Republican bill is a bill for 
drug companies and private insurers. The differences between the bills 
will make a very real difference in the ability of our seniors to 
afford the prescription drugs they need, and enjoy the improved health 
that those drugs will bring.
  I urge my colleagues to support the Graham-Miller-Kennedy Medicare 
prescription drug benefit. In the event that none of the proposals that 
will be voted on this afternoon garner the necessary votes to move 
forward, I urge my colleagues to roll up their sleeves and begin work 
immediately on a proposal that can be adopted this year.
  The outcomes of the votes today should not be viewed as a trumpet of 
defeat, but as an even more urgent call to find a proposal this year, 
in 2002, that will bring our seniors the drugs they need, the drugs 
that we have promised, the drugs a compassionate America will provide 
to this, our greatest generation.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I yield 3 minutes to the Senator from 
Louisiana.
  Mr. BREAUX. Mr. President, I thank the distinguished Senator and say 
how much I have enjoyed working with him on the tripartisan group.
  The Senate will be faced, in a few moments, with an interesting 
proposition. We will have Graham legislation that will not get the 
requisite number of votes to proceed. And we will be faced with the 
tripartisan proposal to see if we have an opportunity to proceed with 
that legislation. That will be the second and final vote, I take it, 
today on this issue. At least, I think it will be.
  I don't think the Senate and this Congress can go back this year and 
tell our constituents that we didn't do prescription drugs because it 
is the other party's fault. I don't think the Republicans can say they 
didn't bring back prescription drugs because it is the Democratic 
Party's fault, and I don't think we will get very far saying we didn't 
have a prescription drug plan because the Republicans would not support 
ours. I think the seniors are wising up and know that this blame game 
is no longer going to help them one bit. You cannot take an excuse to 
the drugstore and buy prescription drugs. What the seniors need is both 
sides to come together and create a program that would work. Our 
tripartisan bill is somewhere between the two versions that I have 
described--the Hagel bill at $150 billion, and the Graham bill at about 
$594 billion. All of that comes out of the Social Security trust fund 
money. We have tried to be responsible in how much we can spend to make 
sure we have a sufficient number of votes to actually pass something 
and also create a delivery system that can work.

  What we have suggested is that for people in the Medicare Program, 
just like those of us in the Federal Employees Health Benefits Plan--
the program that we have drug coverage under and all of our insurance--
that private companies compete for the right to sell us that coverage. 
They compete for the right to sell us prescription drugs. The company 
that can do it the cheapest is the one, in most cases, from which we 
purchase the plan. That is what we are suggesting.
  We are also suggesting that these companies are big people, big 
players. There are PBMs like Merck-Medco or Aetna or Blue Cross. These 
companies are used to assuming risk. That is their business. Why should 
we say we are going to get companies to deliver the product, but if 
they underestimate how much it is going to cost, the taxpayers are 
going to cover their loss? Our bill says if these companies bid $100 to 
provide prescription drugs for seniors, and it costs them $102, then 
that is their responsibility. That is the risk they have to assume. Why 
should the taxpayers say: Look, we don't care how much it actually 
costs, the taxpayer will pick up the difference no matter what.
  Regarding rural areas, our legislation says there will be at least 
two competing plans in every area of the United States. The Government 
will ensure that there are at least two competing plans. It is not like 
an HMO. Here you had to have a hospital and doctors and emergency 
rooms. The only thing you need to deliver drugs in a rural area is a 
drugstore to have the prescription filled and a doctor to write the 
prescription. We guarantee that every part of the country will have at 
least two competing plans.
  What do we do if neither side has 60 votes? Do we give up? I suggest 
we try to find common ground. I think we can do that and we will 
continue to work in that regard.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. Mr. President, how much time remains on each side?
  The PRESIDING OFFICER. The minority has 5 minutes 45 seconds. The 
majority has 4 minutes 45 seconds.
  Mr. GRASSLEY. Mr. President, I yield 3 minutes to the Senator from 
Utah.
  Mr. HATCH. Mr. President, just a few years ago, when President 
Clinton was President, he was asking for a drug benefit program of $168 
billion. Last year, the Democrats wanted a $311 billion program. This 
year it is $600 billion. Frankly, I think it is a lot more than that 
because they have written in a sunset provision that actually helps to 
reduce the cost of that program, but also makes the program temporary.
  I have to say that some of the things I find objectionable about the 
Graham approach is that the bill sets up a Government formulary that 
allows only two drugs for each illness. Because of that, it means that 
literally dozens of drugs that may be prescribed by doctors will have 
to be purchased by the patients themselves.
  I might also add that it means a situation of price controls without 
question. Countries that set price controls on prescription drugs have 
been unable to duplicate the success of the United States in developing 
new pharmaceuticals.
  Our tripartisan plan provides a permanent benefit, not a temporary 
one like Graham-Miller does. It gives beneficiaries choice in Medicare 
coverage, drug coverage, and options to select any prescription they 
want. It is affordable. Our plan costs $370 billion over 10 years. The 
Graham plan costs $600 billion over 10 years. Our plan, in addition, 
includes Medicare reforms. The Graham-Miller plan does not. Our plan is 
not run by the Government, but by the private sector, and it depends on 
private competition. It trusts seniors to make their own decisions and 
choices. The Graham-Miller bill does not. Ours is affordable, it 
creates competition, and there are no price controls on drugs. We take 
care of the

[[Page S7205]]

poorest of the poor and we do it within reasonable budgetary limits.
  Mr. President, I yield back the remainder of my time.
  Mr. KENNEDY. Mr. President, I yield 4 minutes to the Senator from 
Georgia.
  The PRESIDING OFFICER. The Senator from Georgia is recognized.
  Mr. MILLER. Mr. President, first I want to quickly make a point about 
a matter that has been raised on the provision in the Graham-Miller-
Kennedy bill that says we take a second look at this legislation after 
a few years. That is not a weakness. It is one of its strengths, and it 
is nothing new. That is what we did with welfare reform, and that is 
what we did with the farm bill.
  I submit to the Chair, if we had that provision in the original 
Medicare bill, we probably would have had a prescription drug benefit 
years ago.
  Back in April, right after the Easter recess, I came to the Senate 
floor and talked about the urgency of passing a prescription drug bill. 
I spoke then of my 88-year-old Uncle Hoyle who lives next door to me in 
the mountains of North Georgia. He has been like a father to me in many 
ways. Once a very strong mountain man, Uncle Hoyle now suffers from 
diabetes, prostate cancer, recently had angioplasty, and also suffers 
from a kidney infection. Although he still makes a great garden--and I 
had tomatoes and corn out of it this last week--that once strong body 
is growing frail. I cannot get Uncle Hoyle, or millions like him, off 
my mind.
  Many--too many--refuse to see these elderly waiting, waiting for 
someone, anyone, to knock on that screen door and say, as John Prine 
sings: ``Hello in there.''
  The elderly are waiting for something else, too. They are waiting for 
us to do something about their health needs. So far, they have waited 
in vain, each day growing older, growing weaker. Now it comes down to 
us on this July afternoon 2002.
  If we do not do something, you know who we are going to be like? If 
we do not do something, we are going to be like those who pass by that 
man in the ditch on the side of the road in that Biblical story of the 
Good Samaritan: Passed him by, tried not to look at him, refused to 
help him. We will be no better than they were and should be remembered 
in the same negative way.
  We must come to the aid of our seniors by adding a meaningful 
prescription drug benefit to Medicare. The Graham-Miller-Kennedy bill 
would do just that. I believe and, more importantly, the AARP believes 
that our bill offers the best value for seniors. We deliver our 
prescription drug benefit through the tried and tested Medicare system. 
We provide extra help for our neediest seniors. We guarantee coverage 
24 hours a day in every corner of this country, including that tiny 
rural town that the Presiding Officer knows, where I and my Uncle Hoyle 
live.
  Remember what FDR once said: Try something; if it doesn't work, try 
something else. But for God's sake, try something. That is what I am 
trying to say. I want Uncle Hoyle and all those millions like him in 
this land of plenty who played by the rules, raised their families, and 
worked hard to have some hope and dignity in their twilight years.
  Is that really too much to ask? Mr. President, I do not think so.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time? The Senator from Nevada.
  Mr. REID. Mr. President, I ask unanimous consent that the Senator 
from Iowa be granted 3 additional minutes and the Senator from 
Massachusetts, the manager of the bill, be given 3 additional minutes 
prior to the vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, I yield myself such time as I might 
consume.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, soon we will cast what could be our 
final votes on a new Medicare prescription drug benefit. I am deeply 
disappointed with the process that brought us to this point, a process 
that ignored the good bipartisan will on the Finance Committee in favor 
of politics and partisanship that has seemed to dominate the debate on 
the floor of the Senate.
  However, I continue to believe that our bill, the Tripartisan 21st 
Century Medicare Act, represents the broadest and best approach to 
providing prescription drug coverage.
  Our work on this bill over the course of a full year involved fine 
Senators from every party. I have never been prouder to work in a 
bipartisan manner than with my colleagues Senator Hatch, Senator 
Breaux, Senator Snowe, and Senator Jeffords on probably the most 
important change in Medicare in the 37-year history of that 
legislation.
  Together the five of us, bipartisan or tripartisan, whatever one 
wishes to call it, consulted stakeholders of all political persuasions 
and the Congressional Budget Office as we developed our policies over 
the last year. At every step of the way, we faced tradeoffs and made 
compromises, all in the spirit of cooperation, with the common goal of 
getting something done that could actually work without breaking the 
Medicare bank.
  Our bill reflects the best of what good bipartisan cooperation can 
do. It offers seniors affordable coverage on a permanent basis. It does 
not sunset, and it does not take brand name drugs away from our 
seniors. It improves and enhances other unfair aspects of the Medicare 
Program, and it does it all on a voluntary basis. It does so at a total 
cost that reasonable people from both parties should be able to 
support--$370 billion over 10 years.
  I urge my colleagues to remember that anything that comes to the 
floor on a purely partisan basis, such as the Graham-Kennedy bill 
before us right now, is destined to failure, and I remind everyone 
again that nothing ever passes this body on a partisan basis alone. 
Around here, it takes bipartisanship to make things happen, and 
apparently the Democrat leadership is not interested in making things 
happen for our senior citizens.
  Our bill is built on a bipartisan foundation. Had it been given a 
chance to be debated in the Senate Finance Committee, it could no doubt 
have been improved further still, but we were denied that chance all 
because the other side did not want real debate. They wanted a real 
issue instead.
  I urge my colleagues, especially those on the other side of the 
aisle, to listen closely when Senators claim to care about 
bipartisanship. Our bill is the only bipartisan prescription bill in 
all of Washington, DC, this year. It deserves consideration of the full 
Finance Committee, but since we have been denied that right by the 
Democratic leadership, it deserves your vote today.
  The bill, other than the tripartisan bill before us, is without a 
doubt a program for big Government. Rather than allow prescription drug 
plans to design cost savings and innovative benefits that best suit 
seniors' needs, the Graham-Kennedy bill requires Federal bureaucrats to 
set up 10 regional drug formularies, basically deciding which 
prescription drugs seniors can and cannot access.
  Under Graham-Kennedy, plans would not compete with one another. It 
would not be allowed to deviate from a regional drug formula, thus 
restricting seniors' choices. Plans would be further restricted from 
offering more than two brand name drugs in a therapeutic class.

  This approach puts control squarely in the hands of bureaucrats in 
Government, and we know from experience that exclusive Government 
control over medicine has not worked well. The Government has lagged 
many years behind the private sector in covering immunizations, 
physicals, mammograms, and other preventive care in Medicare.
  By contrast, the Tripartisan 21st Century Medicare Act approach puts 
control in the hands of our senior citizens. The bill guarantees 
multiple plans will compete in each region of the country, giving 
seniors a choice to pick the plan that best suits their needs and the 
right to get out of plans that do not meet their needs.
  The tripartisan bill also does not restrict plans from offering more 
drug choices and better overall drug coverage. Under the tripartisan 
bill, private plans compete for seniors, not Government bureaucrats. 
What if the specific drug a senior relies on is not on the regional 
Government formulary? The Graham-Kennedy bill forces seniors to go 
through multiple layers of bureaucratic red tape to convince the 
Government to give them the drugs that their doctors think they need.

[[Page S7206]]

  The tripartisan bill lets seniors and their doctors decide what drugs 
they should receive.
  Take your choice. We have it within the next 5 minutes. I hope you 
will vote for the tripartisan plan.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Will the Chair let me know when there are 15 seconds 
remaining?
  The PRESIDING OFFICER. The Chair will so advise the Senator.
  Mr. KENNEDY. Mr. President, this vote is one of the most important 
any of us will ever cast. It is a vote about our national character and 
national priorities.
  It is a vote about the quality of our society. But most of all it is 
a vote about senior citizens and disabled Americans and their right to 
live in dignity.
  Medicare is a solemn promise between Government and the individual. 
It says, ``Play by the rules, contribute to the system during your 
working years, and you will be guaranteed health security in your 
retirement years.'' Because of Medicare, the elderly have long had 
insurance for their hospital bills and doctors bills. But the promise 
of health security at the core of Medicare is broken every day because 
Medicare does not cover the soaring price of prescription drugs.
  Today, we have the opportunity and the duty to mend the broken 
promise of Medicare. It is time to pass a Medicare prescription drug 
benefit. It is time for Congress to listen to the American people 
instead of the powerful special interests.
  When I first came to the Senate, I was privileged to participate in 
the debates that led to Medicare's passage. Then, as now, there were 
two plans before us. One plan was the solid, dependable, comprehensive 
Medicare program that became law. The other was little more than a 
political fig leaf for the elections. One plan was supported by all the 
organizations representing senior citizens and working families. The 
other plan was supported only by the powerful special interests. That 
is the same situation we face today.
  Senators Graham, Miller, and I have offered a solid, affordable 
Medicare prescription drug benefit that offers senior citizens and 
disabled Medicare beneficiaries the protection they need at a price 
they can afford. There is no deductible, there are no gaps, there are 
no loopholes. The benefit and the premium are both guaranteed in the 
law itself. Low income senior citizens get special assistance.
  But the other side has taken a different approach. Their plan is not 
affordable, not adequate, and not Medicare.
  Under their plan, benefits are so inadequate that senior citizens 
will still be forced to choose between food on the table and the 
medicines they need to survive. There is a high deductible and a large 
coverage gap. Whether the senior citizen has large drug needs or more 
modest ones, the program only pays a small fraction of the cost of 
needed medicine--leaving the elderly to shoulder the rest or go 
without.
  Special help for the low income elderly is conditioned on a cruel and 
intrusive assets test.
  Instead of guaranteeing benefits for senior citizens, their program 
provides subsidies for insurance companies--and allows them to set the 
premium and determine the benefits that the elderly can receive.
  And to reduce the cost of their plan, they have set it up in such a 
way that it actually encourages employers to drop the good retirement 
coverage that more than ten million senior citizens now enjoy.
  According to the Congressional Budget Office, under the Republican 
plan one-third of these retirees--three and one-half million--would 
actually lose the good coverage they have today and be forced into the 
inferior Republican plan.
  From the AARP to the Leadership Council of Aging Organizations to the 
National Committee to Preserve Social Security and Medicare, virtually 
every organization representing senior citizens and the disabled 
supports our amendment. Not a single legitimate organization of senior 
citizens or the disabled supports their proposal.
  We are proud that our Democratic leader brought this matter to the 
floor of the Senate. This is the time for us to act.
  The PRESIDING OFFICER. The Senator from Massachusetts has 15 seconds 
remaining.
  Mr. KENNEDY. Senior citizens and their children and their 
grandchildren understand that affordable, comprehensive prescription 
drug coverage under Medicare should be a priority. Let's listen to 
their voices instead of those of the powerful special interests. Let's 
pass a Medicare prescription drug benefit worthy of the name.
  Every single member of this body has a good prescription drug 
benefit. Let's do the same for the American citizens. That is what our 
program does.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. I think the time has expired.
  The PRESIDING OFFICER. The Senator from Iowa has 45 seconds.
  Mr. GRASSLEY. Mr. President, I yield back the remainder of our time.
  Mr. President, I make a point of order that the Graham amendment, No. 
4309, violates section 302(f) of the Budget Act.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, pursuant to section 904 of the 
Congressional Budget Act of 1974, I move to waive the applicable 
sections of that act for purposes of the pending amendment, and I ask 
for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms) is necessarily absent.
  The PRESIDING OFFICER (Mr. Carper). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 52, nays 47, as follows:

                      [Rollcall Vote No. 186 Leg.]

                                YEAS--52

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Byrd
     Cantwell
     Carnahan
     Carper
     Cleland
     Clinton
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Fitzgerald
     Graham
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Miller
     Murray
     Nelson (FL)
     Nelson (NE)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Stabenow
     Torricelli
     Wellstone
     Wyden

                                NAYS--47

     Allard
     Allen
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Chafee
     Cochran
     Collins
     Craig
     Crapo
     DeWine
     Domenici
     Ensign
     Enzi
     Frist
     Gramm
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchinson
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                             NOT VOTING--1

       
     Helms
       
  The PRESIDING OFFICER. On this vote, the yeas are 52, the nays are 
47. Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is rejected. Under the previous order, 
the amendment is withdrawn.


                       Vote On Amendment No. 4310

  The PRESIDING OFFICER. The question now occurs on the Grassley 
amendment No. 4310.
  The majority leader.
  Mr. DASCHLE. Mr. President, I make a point of order that the pending 
amendment violates section 302(f) of the Congressional Budget Act of 
1974.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, pursuant to section 904 of the Budget 
Act, I move to waive the point of order for the pending amendment and 
ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms) is necessarily absent.

[[Page S7207]]

  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 48, nays 51, as follows:

                      [Rollcall Vote No. 187 Leg.]

                                YEAS--48

     Allard
     Allen
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Cochran
     Collins
     Craig
     Crapo
     DeWine
     Domenici
     Ensign
     Enzi
     Fitzgerald
     Frist
     Gramm
     Grassley
     Gregg
     Hatch
     Hutchinson
     Hutchison
     Inhofe
     Jeffords
     Kyl
     Landrieu
     Lott
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                                NAYS--51

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Carnahan
     Carper
     Chafee
     Cleland
     Clinton
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Hagel
     Harkin
     Hollings
     Inouye
     Johnson
     Kennedy
     Kerry
     Kohl
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     Mikulski
     Miller
     Murray
     Nelson (FL)
     Nelson (NE)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Stabenow
     Torricelli
     Wellstone
     Wyden

                             NOT VOTING--1

       
     Helms
       
  The PRESIDING OFFICER. On this vote, the yeas are 48, the nays are 
51. Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is rejected. Under the previous order, 
the amendment is withdrawn.
  Mr. DASCHLE. Mr. President, I move to reconsider the vote.
  Mr. GRAMM. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. DASCHLE. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. ENSIGN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Corzine). Is there objection?
  Mr. REID. Mr. President, I object.
  The PRESIDING OFFICER. The objection is heard.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I ask unanimous consent that when the Senate 
considers the Hagel amendment, it be considered under the following 
time limitations: During today's session there be 90 minutes under the 
control of Senator Hagel or his designee and 30 minutes under the 
control of Senator Kennedy or his designee; that upon the use or 
yielding back of the time, the amendment be set aside to recur when the 
Senate resumes consideration on Wednesday, July 24; and there be 
additional time of 120 minutes prior to the vote in relation to the 
amendment controlled as follows: 60 minutes under the control of 
Senator Hagel or his designee and Senator Kennedy or his designee; that 
upon the use of the time, the Senate vote in relation to the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, before Senator Hagel begins the debate, we 
hope to get from the House today the supplemental appropriations bill. 
After Senator Hagel and Senator Kennedy finish debate time today, we 
will begin the debate on the supplemental appropriation.
  Based on the unanimous consent agreement just entered, I have the 
authority of the majority leader to announce there will be no more 
rollcall votes tonight.
  I have been asked we have a consent request on the supplemental. The 
time, of course, is not running against the Senator's amendment.
  Senator Hagel has been his usual courteous self. He has been very 
patient in waiting for us to write this agreement. We have known his 
was going to be the next amendment for some time, and it is unfortunate 
it has taken so long to get to where we are.
  Mr. President, I ask unanimous consent that at the conclusion of the 
Hagel amendment debate today, and notwithstanding receipt of the 
conference report to accompany H.R. 4775, the supplemental 
appropriations bill, there be 2 hours 40 minutes for debate with 
respect to the conference report, with the time divided as follows: 60 
minutes each for the chairman and ranking member of the committee; 30 
minutes under the control of Senator Wellstone, and 10 minutes under 
the control of Senator Reid of Nevada or his designee; that on 
Wednesday, July 24, the Senate proceed to the consideration of the 
conference report at 10:30 a.m. with the time until 11 a.m. equally 
divided and controlled by Senators Byrd and Stevens or their designee; 
that at 11 a.m., without further action or debate, the Senate vote on 
adoption of the conference report.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Nebraska.


                Amendment No. 4315 to Amendment No. 4299

 (Purpose: To provide medicare beneficiaries with a drug discount card 
    that ensures access to affordable outpatient prescription drugs)

  Mr. HAGEL. Mr. President, I call up amendment No. 4315, which is at 
the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nebraska [Mr. Hagel], for himself, Mr. 
     Ensign, Mr. Lugar, Mr. Gramm, Mr. Inhofe, and Mr. Gregg, 
     proposes an amendment numbered 4315 to amendment No. 4299.

  Mr. HAGEL. I ask unanimous consent reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. HAGEL. Mr. President, we have spent 4 days debating and voting on 
two Medicare prescription drug proposals, the Graham-Miller-Kennedy 
bill and the so-called tripartisan bill. I have worked with Senators 
Ensign, Lugar, Phil Gramm, Inhofe, Santorum, and Gregg to introduce 
relevant, straightforward, realistic legislation to add a prescription 
drug benefit to our Medicare Program.
  Our legislation would create a permanent Medicare prescription drug 
program that would be available to all Medicare beneficiaries beginning 
January 1, 2004. We keep it affordable to both beneficiaries and 
taxpayers. We do it without creating a new Federal Government 
bureaucracy. The program is not perfect. None of the Medicare 
prescription drug bills we have considered have been perfect.
  This bill accomplishes a very important goal. This bill gives seniors 
the peace of mind that comes with knowing they have security from 
extremely high drug costs, catastrophic costs that ruin families.
  Why are we engaged in this debate?
  Medicare was created, as we all know, in 1965--and it is a 1965 
model. Preventive health care, like diet, lifestyle, and exercise, was 
not emphasized in 1965. Prescription drugs were not as widely 
prescribed or used. Research had not developed the kind of lifestyles 
and life expectancies and quality of life we now enjoy--prescription 
drugs, pharmaceutical research, being the core of that development.
  Seniors needed protection, in 1965, from high hospital costs for 
inpatient services, and we gave them that protection. It came through 
Medicare Part A hospital insurance.
  In 2000, the average American spent $435 a year on prescription 
drugs. Today, Medicare beneficiaries need protection from unlimited 
out-of-pocket prescription drug costs.
  John C. Rother, policy director of AARP, was quoted today in the New 
York Times as saying:

       Another possibility is for Medicare to provide catastrophic 
     coverage for prescription drug expenses over a certain 
     threshold, perhaps $4,000 to $6,000 a year, with no premium. 
     This could be combined with additional help for low-income 
     beneficiaries and a government-authorized drug discount card.

  So reported the New York Times today as a quote from Mr. Rother, the 
policy director of AARP. What Mr. Rother states is exactly what this 
bill does.
  How would this program work? There are two major components to our 
bill. First, all participating beneficiaries

[[Page S7208]]

would be protected from unlimited out-of-pocket drug expenses through a 
cap on their private expenditures. The annual out-of-pocket limit would 
depend on their income. That would go as follows: For annual income 
levels below 200 percent of poverty, the annual expense would be no 
more than $1,500. That is a little more than a $100-a-month cap on out-
of-pocket expenses. For those with annual income levels 200 percent to 
400 percent of poverty, it would be capped at $3,500--no more, 
regardless of the need. For those incomes between 400 percent and 600 
percent of poverty, out-of-pocket expenses would be capped at $5,500--
no more. And for those who wanted to subscribe--this is a voluntary 
program, open to all Medicare beneficiaries--with incomes above 600 
percent of poverty, their out-of-pocket expenses would be capped at 20 
percent of their income.
  Again, to give some relevancy to help understand those numbers, the 
2002 Federal poverty level is $8,860 for an individual and $11,940 per 
couple. Beneficiaries with the lowest incomes would have their out-of-
pocket expenses on prescription drugs limited, as I said, to about $100 
a month. And almost half of all Medicare beneficiaries live on incomes 
lower than 200 percent of poverty.
  The second part of our program would be that every beneficiary would 
be able to choose to enroll or not to enroll in a discount drug card 
program, giving them access to privately negotiated discounts on 
prescription drugs.
  Who would administer this program? The Secretary of Health and Human 
Services would administer the program through the Centers for Medicare 
and Medicaid Services, CMMS. The Secretary would negotiate with private 
companies to deliver the benefits. What that means is no new Federal 
bureaucracy, no new Government program to administer these benefits.
  I would like to point out that two-thirds of all seniors already have 
some type of private prescription drug coverage that they like and want 
to keep. Seniors would not be forced to drop supplemental coverage, and 
employers would be encouraged to retain and even improve existing 
coverage under our plan.

  Our bill would allow employer-sponsored plans--all employer-sponsored 
plans: Medicare supplemental plans, Medicare+Choice plans--
pharmaceutical benefit managers--PBMs--pharmacists, and even States 
working with private companies to deliver the benefits.
  By structuring our program this way, we do not create an expensive 
and new, expansive Government bureaucracy or the subsequent redtape 
that follows. We would use the market system in place.
  These private market tools, such as consumer choice and competition 
to control costs without limiting innovation, are critical to the 
future development and innovation of prescription drugs.
  How would seniors participate? Seniors would enroll with an approved 
provider and pay an annual fee of $25, which would be waived for 
beneficiaries with incomes less than 200 percent of poverty, 
individuals with incomes of less than $17,720. Once beneficiaries had 
met their out-of-pocket limit on prescription drug expenses, they would 
pay a small copayment of no more than 10 percent of the cost of each 
prescription drug. Seniors would not have to pay monthly premiums for 
deductibles.
  When would the program start? Our program would take effect January 
1, 2004. Other bills that were considered would not have taken effect 
until 2005 or even later. And our benefit is permanent; we do not 
sunset the program.
  Why do we structure the program this way? Any realistic Medicare 
prescription drug proposal must not only be affordable for seniors, but 
it must also be affordable to the taxpayers, future generations of 
Americans who are going to have to pay for this program. Why is that 
important? It is very important because if we begin a program and 
obligate and commit the next generations of Americans to this program, 
then we owe them. We have a responsibility of giving them all the facts 
and structuring a program that is accountable and responsible.
  Let's examine something carefully. Projected Federal deficits now are 
seen for at least the next 2 years and probably longer. So as opposed 
to a couple of years ago when we looked out onto the horizon and saw 
surpluses as far as the eye could see, we are now in a different 
dynamic, a different environment. No one really knows how long we will 
be in deficit, so any new Federal program and entitlement that is 
added, someone must pay for that.
  We are not operating under a new budget resolution, so, as of October 
1, we will no longer be subject to budget caps. The two previous 
prescription drug bills we debated did not attain the 60 votes needed 
today in order to overcome a point of order raised because both 
violated the budget resolution cap of spending no more than $300 
billion over the next 10 years. That was an important point. Both of 
the bills we debated that did not attain those 60 votes needed were in 
excess of the $300 billion cap that the Budget Committee of the Senate, 
this Senate, this body, voted for last year. But after October 1, there 
are no caps because we are not operating under a budget.
  Finally, the underlying Medicare Program is still in danger of 
becoming insolvent. Let me pass on an interesting number. When Medicare 
was passed in 1965, Part A hospital costs for 1990 were projected to be 
$9 billion. In 1990, Medicare Part A actually spent $67 billion.
  So from the projection, in 1965, out 25 years, as to how much 
Medicare Part A would cost, all the actuaries said then--all the smart 
people, all the medical care people--we would be spending, including 
inflation, and the rates of increase in costs--all the dynamics that 
are part of health care--$9 billion in 1990 when, in fact, we spent $67 
billion in 1990.
  We should pay attention to this number. I do not know of a Federal 
program--especially entitlement programs--that did not go far beyond 
any projections, partly because we always, for the political benefit, 
understate the numbers. But the numbers I have just recited are real 
numbers.
  We ask, why should we be concerned about costs? I see a lot of young 
people sitting in the galleries. You better be concerned about some 
costs. You better be very concerned about what we do on prescription 
drugs because if we do not pay attention, and we are not concerned and 
enact an accountable, responsible, affordable program, I do not know 
how you are going to afford it--because you are going to pay for it. 
You will be paying for my prescription drug costs.
  So we must act in a responsible, accountable way. Each of us who has 
the high privilege of serving in this body is but a passing, fleeting 
steward of your interests and the interests of this country. That is 
our highest responsibility.
  According to a preliminary actuarial analysis--we are getting CBO 
scores on our amendment--our proposal would cost less than $200 billion 
over the next 10 years. In fact, the numbers are coming in at around 
$160 billion. That stays within the $300 billion budget resolution that 
this body, this Senate, voted for last year. The Congressional Budget 
Office will give us those exact numbers by the end of the day.
  We have a tremendous opportunity to pass a responsible bill, to 
provide all Medicare beneficiaries with a permanent prescription drug 
benefit that would start January 1, 2004. We have that now within our 
grasp.
  The debate we have had over the last 4 days has been good debate, 
relevant debate, important debate. All sides, all perspectives have had 
an opportunity to lay this out, as we should, as we are embarking upon 
this great new entitlement program. And we need this program. Make no 
mistake, this program is necessary. We need to deal with this issue.
  This amendment that we offer today is not perfect. However, what we 
offer today is a real-world solution to a real-world problem.
  Our amendment will give beneficiaries the protection they need most. 
And we focus on those who need it most, those who are without 
prescription drug insurance, those who are at the bottom of the social-
economic ladder, those who have to make hard choices about their lives.
  We can do this. We must do this. But it must be in a way that is 
accountable and responsible.
  As the New York Times editorial phrased it this morning:

       The most important short-term priority should be the needs 
     of the fairly narrow, and politically uninfluential, band of 
     Americans

[[Page S7209]]

     who have very low incomes and very high drug prices.

  They have said it accurately. They have stated it correctly. They 
have focused on those who need it most. This amendment does that.
  Mr. President, I am grateful for an opportunity to propose this 
amendment and debate it. We will have a vote on it tomorrow. I know a 
number of my colleagues wish to speak on this amendment.
  So I yield the floor to my cosponsor on this amendment, who has 
worked long, hard, diligently, and understands the issue as well as 
anyone in the Senate. I am very proud we have teamed up, along with a 
number of our other colleagues, to present something we think is 
important for our country that is workable, doable, and responsible.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. ENSIGN. Mr. President, I thank the co-author of this amendment, 
the Senator from Nebraska, for the great work he has done; and, by the 
way, that both of our staffs have done in coming up with an amendment 
that we think is fiscally responsible and that meets the needs of those 
seniors who need it the most.
  We have heard a lot of examples during the House debate, and during 
the Senate debate, about those seniors who are having to choose between 
paying rent and paying for prescription drugs, or paying their food 
bills and being able to pay their drug bills. We have heard about a lot 
of heartbreaking stories. Those are real stories that are out there. We 
have those stories in my home State of Nevada. We get letters from 
those people all the time.
  I got an e-mail a few weeks ago from a lady who sent this e-mail at 
11:20 p.m. West Coast Time. She was up thinking--and probably looking 
through her medical bills--and just crying out for help, asking if I 
would be willing to take a moral stand to help seniors who need the 
help the most? Our amendment does exactly that. It helps those seniors 
who need help the most.
  But this morning, I was also thinking about our responsibility to our 
children and the next generation of young people coming up who are 
going to be working for a living and paying taxes.
  Will Medicare and Social Security be there for them? Will this 
country be there for them? Somebody has to pay for all of these 
programs that we are talking about.
  People have not wanted to means test Medicare and Social Security 
because they believed that they have earned this benefit, that they 
have paid in for this benefit.
  Realistically speaking, this new prescription drug benefit would not 
been earned by anybody that is going to get it, at least early on. 
Frankly, it is a straight giveaway to seniors. It is taking it out of 
the pocket of younger people who are paying into the system now and 
putting it into the pocket of older people who, while they were working 
and paying taxes, paid for a Medicare program that did not have a 
prescription drug benefit
  All of us feel a great responsibility to our parents and our 
grandparents, to take care of them in their golden years. But we must 
do this in a way that does not put such a burden on young people in our 
society that they cannot prosper.
  Why should their tax rates have to be so high just because we in the 
Senate wanted to get reelected, so we voted for things that just kept 
spending these young people's money? Ultimately, they will have no 
choice but to pay high taxes because politicians pay attention to the 
senior citizens because senior citizens vote. We need to pay strict 
attention to what we are doing here and whose money we are doing it 
with.
  Once we add a benefit to Medicare, we will not be cutting that 
benefit in the future. So whatever we do, we better do in a fiscally 
responsible fashion.
  Senator Hagel and the rest of the team that has put this amendment 
together believes that we have done exactly that: We have provided help 
to those seniors who need it, but we have done it in a fiscally 
responsible manner.
  I want to talk a little bit about the amendment and how it works. 
Senator Hagel has covered some of this, but I want to reemphasize a 
couple points and to use a chart for those who need to see it. I am 
kind of a visual learner and need a chart to understand things 
sometimes, to actually be able to see the numbers on a piece of paper 
so I can put them in my head.
  The way our bill works, first of all, is that we cap--this is 
catastrophic coverage--we cap the amount of out-of-pocket, expenses a 
senior citizen is going to have to pay. We do that based on income. The 
people who are have the lowest income get the most help. It goes up 
from there based on your income level. That seems to make sense if you 
think about it. Should a person like Ross Perot, who would qualify for 
this benefit, get the same help as somebody who makes $15, $16, $17,000 
a year--a senior citizen? Should they get the same level of help? I 
think most people would say they should not get the same level of help.
  Our bill says that if you are lower income, you are going to get more 
help. It also says that the sicker you are, the more help you get 
because those seniors who are very sick or who have a chronic condition 
such as heart disease, diabetes--and we will talk about a few examples 
later--pay much more per year in prescription drug costs and our plan 
limits their out-of-pocket spending. Those are the people our bill 
actually helps more than the leading Democrat proposal or the so-called 
tripartisan proposal.
  For people who make $17,720 or less a year, up to 200 percent of 
poverty and below, we cap their out-of-pocket expenses at $1,500. This 
is a little over half of the seniors in this country. If you make 
between $17,721 and $35,440 per year, your out-of-pocket expenses are 
capped at $3,500, and it scales up from there.
  Once again, our program is completely voluntary. I have heard that in 
1987 the Senate passed, and actually enacted into law in 1988, a 
catastrophic drug benefit plan. We hear people--and I am not sure if 
they were referring to our plan or not--saying seniors opposed the 1988 
plan so much, that they repealed it the next year. They were not 
opposed to it because of the catastrophic coverage, they were opposed 
to it because one, they were forced to join; and, two, their Medicare 
premiums went up. Ours is a voluntary program, and it only has an 
annual enrollment fee of $25 per year. That is strictly to take care of 
administrative costs. We figure about $25 per year is what is necessary 
to handle these costs per enrollee.
  When you pay that fee and sign up for the program, you will get a 
drug discount card. You will be able to sign up for various plans in 
the area, and pharmaceutical benefit managers will have a list of 
pharmacies that are participating. They will have a formulary or a list 
of drugs that are offered. You will go through those, and you will say: 
I have this disease, or, I like that particular formulary; maybe I will 
get together with some of my fellow seniors or I will get together with 
my doctor and say, Which one of these plans do you recommend? Then you 
will sign up for that plan that best meets your needs. It is the 
competition between the plans and the volume buying that will allow the 
average senior to save somewhere between 25 and 40 percent on the drugs 
they buy with this drug discount card.
  Right upfront, they save 25 to 40 percent. Then, we cap their out-of-
pocket expenses. So it is a two-pronged approach. We believe that 
because the senior pays initially out of pocket--about $100, $120 a 
month for the low-income seniors--that they will shop for their drugs 
and take advantage of the lower prices that are being offered as a 
result of competition between the participating entities.
  I want to give a couple of real-life examples of those cases we 
always hear about--those cases that tug at our heartstrings.
  James is a 68-year-old man who has an income of about $16,000 per 
year. He is being treated for diabetes. These are the various 
medications he is taking: Glucophage, Glyburide, Neurontin, Protonix, 
Lescol, and Zoloft. He has monthly prescription drug costs of $478.04, 
and a yearly cost of $5,736.48--so James is paying out of his own 
pocket over $5,700 right now. Medicare doesn't cover anything.

  To compare the various plans, first of all, under the Graham-Miller 
plan, James' out-of-pocket expenses would

[[Page S7210]]

be $2,940.00. Under the tripartisan plan, he would pay $2,341.65. Under 
the Hagel-Ensign plan, he would pay $1,923.65. So for the low- to 
moderate-income person who has a serious disease, the Hagel-Ensign plan 
gives that person more help than any of the other bills. And example 
after example has been heard on this floor about has been this type of 
a case.
  If you don't like this one, we will give you the next one. Doris is a 
75-year-old and has an income of around $17,000 a year. She suffers 
from diabetes, hypertension, and high cholesterol, which is not unusual 
for a senior. Her medications are Lipitor, Glucophage, Insulin, 
Coumadin, and Monopril, for a total cost of $304.03 a month, and 
$4,648.36 a year.
  Once again, here is how Doris would fare under the various plans 
Under the Graham-Miller plan, the leading Democrat plan, she would pay 
$2,220.00 a year out of pocket; under the tripartisan plan, she would 
pay $2,086.36 a year; and, under our plan, she would pay $1,714.84 a 
year. Once again, this person does better under the Hagel-Ensign plan 
more so than either of the other two plans which were voted on and 
failed to get the 60-vote point of order.
  To reemphasize, the plan we have all worked on together, including 
Senator Gramm of Texas, provides a Medicare prescription drug benefit 
in a much more fiscally responsible way and takes into account future 
generations.
  There is a third example I want to talk about. Betty, who is a 66-
year-old, has an income of $15,500 per year. She is being treated for 
breast cancer. She is still receiving low-dose radiation therapy with 
Nolvadex. Her medication profile is as follows: Morphine, Paxil, 
Dexamethasone, Aciphex, Trimethobenzamide, and Nolvadex--monthly total 
of $668.33 and $8,019.96 per year.
  These are three real-life cases from Nevada. The names have been 
changed to protect their privacy.
  Betty's medications, under the three different proposals, once again: 
Under the Graham-Miller plan, the leading Democrat plan, she would pay 
$3,180.00 out-of-pocket expense; under the tripartisan plan, $2,570.00; 
and under the Hagel-Ensign plan, $2,152.00 out-of-pocket expense.
  The person who is the sickest, who is moderate to low income, is the 
person our plan benefits more than any of the other plans. That is why 
we think our plan is superior, because when we hear about people, when 
they go on the talk shows, when they talk in front of seniors groups, 
when we are hearing all these horror stories, these last three examples 
are the type of people about whom they are talking.
  So if my colleagues really want to help those seniors who need it the 
most, they should support our plan. The other thing is--and I will 
conclude with this--that we have had two other plans voted down today. 
The two plans that were voted down, because they did not get the 60-
vote point of order, are pretty much dispensed with at this point. 
Senators should ask themselves if they want to get a bill done this 
year. If they do, this is your best chance of doing it.
  If we pass this plan in a bipartisan fashion, lay aside the 
politics--and we said we are going to put seniors ahead of politics, 
and ahead of being a Republican, or ahead of being a Democrat--we can 
pass a plan now. We should put seniors ahead of a political issue in 
this November's election. This Hagel-Ensign bill is the bill that 
offers that opportunity for people.
  So I encourage my colleagues to support our bill. It will be voted on 
tomorrow. We have a great chance and a great opportunity for the 
American people, and especially for those seniors and disabled people 
who are on Medicare, to really get the help that they need.
  Mr. President, I ask unanimous consent to add Senator Allard as a 
cosponsor of amendment No. 4315.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ENSIGN. I yield the floor.
  The PRESIDING OFFICER. The Senator from New York is recognized.
  Mr. SCHUMER. Mr. President, I am not going to speak very long, but I 
know my colleagues, the Senator from Nebraska and the Senator from 
Nevada, put forward their plan. I thought I would make a few points in 
regard to it. I commend them for their effort. They are trying to do 
something that is extremely difficult. They are trying to be both 
responsible in a plan in terms of how much they will provide, in terms 
of helping people who need help, but at the same time, they are trying 
to be as fiscally, I guess they would say responsible--I would say as 
minimal as possible. I would say, yes, if you just look at the plan and 
say which one should cost the least, the Hagel-Ensign plan is there.
  If you look at all the other things we do in the budget and then say 
we don't have any money for this, repeal of the estate tax comes to 
mind, which I believe both of my colleagues have supported--and most 
have supported--and ask if it is an either/or proposition if you want 
to be fiscally responsible, which would people choose? A more generous 
plan. I think that cost us $600 billion in the President's budget to 
make that permanent. Putting together a generous plan and not repealing 
the estate tax, or repealing the estate tax and having this minimal 
plan, my guess is that 80 or 90 percent of the American people would 
reject the plan put forward by my colleagues from Nebraska and Nevada.
  I guess if I had to think of the rubric of the plan, they are trying 
to be compassionate conservatives. It is a hard thing to do, a 
difficult thing to do. I respect their real effort to do it.
  If my colleagues think this is a generous or adequate plan, it 
clearly is not. In fact, some have argued that this would be a step 
backward. That is not Chuck Schumer, Democrat of New York, but it is 
AARP. I will read some excerpts from the AARP letter on this plan sent 
to Senator Hagel on July 23. I ask unanimous consent that it be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Dear Senator Hagel: Enacting a comprehensive prescription 
     drug benefit in Medicare this year remains the top priority 
     for AARP. Our members are counting on the Senate to pass a 
     meaningful drug benefit that is available and affordable to 
     all beneficiaries. Our members were promised in the last 
     election that a comprehensive drug benefit would be a 
     priority, and we are counting on you to make good on that 
     promise this year.
       We appreciate the intent of your bill, S. 2736, the 
     ``Medicare Rx Drug Discount and Security Act of 2002,'' to 
     provide a prescription drug discount card and stop-loss 
     protection to Medicare beneficiaries. However, in addition to 
     our substantive objections, we are concerned that by offering 
     this scaled-back proposal today, you would effectively derail 
     bipartisan discussion and compromise on more meaningful 
     comprehensive approaches. We believe Congress should focus 
     its efforts on enactment of a more comprehensive drug benefit 
     this year.
       In addition to the timing of your proposal, AARP has 
     concerns about the approach taken in your bill, including:
       Catastrophic coverage--While AARP has not opposed income-
     relating premiums, income-relating the Medicare benefit 
     changes the nature of the program. This would set an 
     extremely dangerous precedent in Medicare. Further, the stop-
     loss levels set in the bill do not provide enough protection 
     for lower income beneficiaries. A low-income couple could 
     spend 25 percent of their income just for drugs before this 
     plan offered assistance. Thirdly, there are a number of 
     issues involved in using tax returns to determine program 
     eligibility levels, and we believe other options should be 
     explored.
       Discount card--While AARP supports the use of a discount 
     card program as a building block for a Medicare prescription 
     drug benefit, your proposal lacks the necessary 
     specifications to guaranty the level of discount, what level 
     of discount would be passed to beneficiaries, and the degree 
     of consumer protections required of plans.
       Given these concerns, AARP opposes your amendment. We 
     remain fully committed to developing a comprehensive drug 
     benefit for all Medicare beneficiaries and we look forward to 
     working with you on legislation that our members can support.
           Sincerely,
                                               William D. Novelli,
                                       Executive Director and CEO.

  Mr. SCHUMER. Let me quote from the letter to Senator Hagel:

       Our members are counting on the Senate to pass a meaningful 
     drug benefit that is available and affordable to all 
     beneficiaries.

  AARP goes on to say that while they appreciate the intent of S. 
2736--this is their quote--they are

       . . . concerned that by offering this scaled-back proposal 
     today, you would effectively derail bipartisan discussion and 
     compromise on more meaningful, comprehensive approaches.

  That is exactly the problem. I think when seniors from one end of 
this country to the other hear the exact specifics of the Hagel plan, 
they are going

[[Page S7211]]

to be shocked. I think they even probably think that the most generous 
of the plans--the Graham-Miller-Kennedy plan--doesn't go far enough in 
terms of help that they need. To hear this one--and I will get into 
some of the details--I think they would say: Gee whiz, what the heck 
did they do? If we went home and said we passed a prescription drug 
benefit and passed the Hagel-Ensign bill, most of our constituents 
would say--correctly--no, you didn't, and don't you claim that you did 
because you are not helping the vast majority of people who desperately 
need the help.
  I will go on with the AARP letter. They are worried about the 
catastrophic nature of the Hagel-Ensign bill. Quoting them:

       While AARP has not opposed income-relating premiums, 
     income-relating the Medicare benefit changes the nature of 
     the problem. This would set up an extremely dangerous 
     precedent in Medicare.

  That is exactly right. Anybody who thinks this bill is helping 
middle-class people hasn't read it. The vast majority of our 
constituents who struggle with the cost of drugs, who may be making 
$20,000 or $25,000 and paying a couple thousand dollars--not $6,000, 
but $2,000--are left out in the cold by this bill. They are far more 
typical than the examples my good colleague from Nevada has brought up 
in his chart.
  So to think that this is comprehensive, to think that it covers most, 
is wrong. We do have a choice. It is a value choice. How much are we 
willing to spend to help people? You cannot have it both ways. You 
cannot say we are passing a comprehensive prescription drug benefit and 
not spend the money for it. These drugs are wonderful, but they are 
expensive, and you cannot avoid that conundrum. You have to decide 
which side of the fence you are on.
  With some regret, and I say it in admiration for their bold essay, 
the Hagel-Ensign amendment says we are on the side not of providing 
broad, comprehensive coverage but, rather, doing a little bit. And, 
again, as I said, put into the context of all the other things we spend 
money on, put in the context of the desire on the other side to 
continue with tax cuts, which takes their budget and puts it in a 
warped and pretzel-like way, it is not what the American people want.
  So I am going to conclude with this quote:

       Given these concerns, AARP opposes your amendment. We 
     remain fully committed to developing a comprehensive drug 
     benefit for all Medicare beneficiaries, and we look forward 
     to working with you on legislation that our members can 
     support.

  What AARP said to my colleagues I say as well. Let me just go over 
some of these things. This is the Hagel bill. Senior citizens with an 
income of $9,000--in parts of my State, that is not enough to pay rent, 
we would make that senior citizen with a $9,000 income pay $1,500 
before the benefit outlined in the Hagel-Ensign bill--before they got 
any help at all. Now, is that fair? Is that right? Even taking the 
basic philosophy of Hagel-Ensign--and I disagree with it, but I respect 
it, helping the very poor who need the help--when you have a $9,000 
income in most parts of America, you cannot afford to pay $1,500 in 
prescription drugs. You will never get there. That will be 17 percent 
of somebody's income. That is wrong.
  Now, my friend from Nevada took one side of the line. I am going to 
take the other side of the line. He used a $17,000 example. Let's say 
you go to $18,000 in income. Nobody is rich on $18,000, whether you 
live in Nebraska, Nevada, or in Manhattan. It is harder in Manhattan 
than anywhere else. Your standard of living is different with the same 
income level there.
  Listen to this: A senior making $18,000 would have to pay $3,500 
before they receive any help. That is not the kind of benefit the 
American people are asking for whether they be senior citizens or 
younger people with parents. That is 20 percent of their income. If 
your income is $18,000, you pay $3,500 first? What they would say in 
New York is: Forget about it. What they would say to the rest of the 
country is: Please go back and try to do a little better.

  Even a senior citizen with an income of $35,000--once you are at 
$35,000 and you are a senior citizen, hopefully your kids are out of 
the house and you are not doing that badly, although, again, in parts 
of New York, $35,000 does not stretch too far when you have an average 
rental payment of $1,000 a month or $800 a month. That eats a lot of 
it, and then you take taxes and other expenses. That person would have 
to pay $5,500, 16 percent of their income, before they got any help.
  My guess is that 98 percent of all senior citizens at that level of 
income--hardly a very high level--would not qualify for this program at 
all. The number who pay that huge amount for prescription drugs--and 
that is the amount they would need before the program begins--is small.
  I would not call this insurance. I would not call it Medicare. If it 
would become law, poor senior citizens would still be choosing between 
food on the table and the medicines they need to survive. That senior 
citizen who is making $9,000 and paying $1,500 for their much-needed 
prescription drugs is still choosing between food on the table and 
medicine.
  Middle-class senior citizens who are willing to pay a little more in 
copayments and monthly payments would not get a benefit that they would 
find worthwhile at all. It would not affect most of them.
  To all of my colleagues, this bill is more fiscally tight, stingier, 
if you will, than the House Republican bill. It is more inadequate than 
either of the two bills voted for in the Senate. I do not know a single 
organization of the elderly or the disabled that supports it, and I do 
not believe it deserves the support of the Senate.
  The fight for a real Medicare prescription drug benefit does not end 
today. In fact, I argue that we made some progress today. Fifty-two 
votes for the Graham-Miller-Kennedy bill is a lot of progress, and, in 
fact, should we adjust the Budget Act next year, that 52 votes might be 
adequate to actually pass the bill. Once we forget these notions of 
spending money on things that virtually nobody wants, except a small 
rarefied few, we will be able to do it.
  We made progress today. I am not despairing. I compliment the Senator 
from Georgia, as well as the Senator from Florida and the Senator from 
Massachusetts, who will be here shortly, for putting together a 
proposal that I think does much more of both: It is still fiscally 
within our means but really is broad and comprehensive and deals with 
people's needs.
  To vote for Hagel-Ensign I think would be a cop-out. In fact, the 
argument was made by my friends--again, I salute the sincerity of their 
effort; I really do. This is an honest proposal and I thank them for 
that, but they admitted themselves: We will not do much after this.
  I would rather go back to the drawing board and try to pass something 
that far better meets the American people's needs, such as the bill 
proffered by the Senators from Florida, Georgia, and Massachusetts. I 
urge my colleagues to defeat this amendment, and let's keep working on 
this issue until we get it right.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Miller). The Senator from Texas is 
recognized.
  Mr. GRAMM. Mr. President, I am not going to get into an argument with 
our dear friend from New York. I will say, I think in New York if you 
make $9,000 a year, you qualify for Medicaid. So you are completely 
covered.
  I also have to say, if we are going to take the approach the Senator 
from New York takes, and that is ``how much are they willing to spend 
to help you,'' then we get into a debate not about what works, not 
about what is feasible, not about what we can afford, but who is 
willing to spend more money?
  In truth, we have already been in that debate. I want to show my 
colleagues this, because this is frightening to me.
  In 1999, just before he left office, President Clinton proposed a 
comprehensive drug benefit--let me start earlier. We had, through a 
legislative act of Congress, a bipartisan commission appointed with 
Senator Breaux as chairman. I was on that commission. Part of what we 
did is we put together a proposal to modernize Medicare through the use 
of competitive marketplace forces.
  For example, if you have a cane with four little legs on it and you 
buy it

[[Page S7212]]

through Medicare, the average Medicare cost is $40. The VA, which has 
never been thought of as the world's most efficient buyer, buys it for 
$15. The Breaux commission put together a proposal to modernize 
Medicare and to use some of those savings to help people get coverage 
for pharmaceuticals, and the way they got it was opting into a more 
cost-effective system.
  That proposal actually saved money because reforms in Medicare save 
more money than providing the pharmaceuticals cost within this more 
competitive environment.
  President Clinton, who had us all down to the White House, looked us 
in the eye and said: Don't let this process fail because of you. I was 
one of the members of this commission. President Clinton looked us 
right in the eye and said: Don't let it fail because of you. And then 
all four of his appointees voted no at the last minute. We needed 11 
out of the 17 to make a recommendation to Congress, and we only got 10.
  At that point, incredibly, providing pharmaceuticals not only did not 
cost money, it was part of a reform program where the savings we would 
have gotten with Medicare reform would have paid for the pharmaceutical 
benefit.
  That is where the debate started, and we failed to act because of one 
vote on the bipartisan commission, when all four of the President's 
appointees voted no. In fact, they had a press conference at the White 
House denouncing the plan before we had the vote.
  At that point, at the end of his administration, President Clinton 
said: We can have a comprehensive benefit for $168 billion. That was in 
1999 just as President Clinton was ending his term.
  Then Congress in 2000 had a proposal. Former Senator Robb from 
Virginia was the author of that proposal, and it cost $242 billion. If 
you went back and looked at that debate, everybody who was for that 
plan said: We can solve this problem. If you will just give us $242 
billion, we can solve the problem.
  Then you will remember the budget debate we had last year, the Baucus 
amendment. I could quote 20 Democrat Senators who said: We can provide 
all the benefits we need for $311 billion.
  I could quote Senator Baucus, I could quote the distinguished 
majority leader, but it is never fair using people's words against 
them. I do not do it, but I could.
  In the budget debate last year, $311 billion would have done 
everything we wanted to do. This year in the budget we said: No, that 
is not enough. That is being tight fisted with the elderly. We do not 
want $311 billion. In the budget we said $500 billion. The budget did 
not pass, but that is what the budget had.
  Now we come to the floor with a proposal that says: We cannot spend 
$500 billion; that is being tight fisted with our seniors. How dare we 
to have thought of $311 billion? What was wrong with Senator Robb's 
tightness at $242 billion? Was Bill Clinton a person who did not love 
the elderly at $168 billion? What a heartless man he was. Today, we 
said: No, it is going to take $600 billion--not $311 billion but $600 
billion.
  Mr. SCHUMER. Will my colleague yield?
  Mr. GRAMM. Let me finish this point, and I will be happy to yield.
  Mr. SCHUMER. I thank the Senator.
  Mr. GRAMM. The $600 billion would not pay for a real program. It 
starts in 2005. It ends in 2010. So if one does not live until 2005, 
they get no benefits; if they live past 2010, they get no benefits--and 
it still cost $600 billion.
  Now, where do we think we are going? Where does all of this end? We 
are asking people to look and see who cares the most. And you can 
measure that by how much money they are willing to spend.
  Where does this end? Will it not go on forever? I am going to yield 
to the Senator, but let me make this point to sort of bring it 
together.
  Forget this red in the chart. That was about this bill that I was 
talking about when I made the chart. Just look at the yellow on this 
chart. I want to try to impress this one figure on people's minds. 
Today, Medicare, which has an unfunded liability in present value terms 
of $17 trillion--when you discount it above the present value of the 
revenues we are going to collect, today it is taking 2 percent of the 
economy. If we do not pass any drug benefit and we just leave Medicare 
as it is, by 2030 it is going to take 4 percent of the economy. Today 
the payroll tax for Medicare and Social Security is 15.3 percent. If 
left unchanged, meaning we do not cut it and we do not increase it, the 
payroll tax will have to more than double by 2030 to over 30 cents out 
of every dollar earned by every worker to pay for Social Security and 
Medicare. That is without a prescription drug benefit.
  Some people estimate that if the bill had been adopted that we 
sustained a point of order against today, this would go not from 2 
percent of the economy to 4 percent but from 2 percent to 6 percent. We 
would literally be looking at over 40 cents out of every dollar earned 
by every worker to pay for Social Security and Medicare.
  I understand all of these people who want these benefits are writing 
these letters saying we do not love them enough--that $170 billion is 
not enough. They say these people who want to spend $600 billion love 
us more. Of course, they are going to love us even more next year with 
$900 billion. There will be lots of love next year.
  The point is, does anybody care if young workers 28 years from today 
are paying 40 cents out of every dollar they earn on Medicare and 
Social Security? How much love can we afford? That, I think, is a 
critical point.
  So I beg my colleagues, let us not get in the business where we 
measure a program simply by how much it costs.
  Others I am sure want to speak, but I am going to talk about how this 
program gets you a lot for every dollar you spend. I am happy to yield.
  Mr. SCHUMER. I thank my colleague.
  First, our colleague from Texas has been on the floor a whole lot 
lately on all of the various issues which we have been debating. He has 
always been a great warrior and a great debater, but since he announced 
his retirement, he is a happier warrior. Every argument he makes, he 
has a twinkle in his eye. I compliment him for that. It is a pleasure 
to listen to him, as much as I disagree with him. I do not know if this 
would happen to the rest of us if we also announced we would not be 
here, we would be much happier in our arguments, but I want to make 
three points and ask them to form the question.
  First, I ask my colleague from Texas if he knew that the Medicare 
level in New York is $599, which is $7,200 a year. I ask him if he knew 
that.
  Mr. GRAMM. If I were from New York, I would be trying to change that.
  Mr. SCHUMER. Well, we will, maybe with the help of the Senator from 
Texas. In any case, that person in the example does not qualify.
  The second question I ask my colleague is this. I like his chart. It 
sort of fits my argument because that last number is $600 billion. As I 
understand it, if we did not make the estate tax repeal permanent, 
something my colleague from Texas has fought very long and hard over, 
that would be about $670 billion, as I understand it. That is how much 
it would cost over the same 10-year period. So we are not talking about 
the ability of the Government to pay this; we are talking about size of 
government. That is one of the great debates we have. But it is not 
that my colleague says we cannot afford it; rather, he is using it for 
different purposes.
  At least to me, when I go from one end of my State to the other, the 
number of people who ask for estate tax repeal is much smaller than the 
number who ask for a comprehensive prescription drug plan for Medicare.
  So I ask my colleague, aside from the ideological and philosophical 
argument about size of government and all of that--on which we have had 
nice debates on both the floor and in our various committees that we 
share--but certainly within the contemplation of my good friend from 
Texas, if we did not take that money for estate tax reduction, we could 
put it into this program; am I right about that? This is a simple value 
choice.
  Mr. GRAMM. I am going to answer that point. Was there a third point?
  Mr. SCHUMER. Yes. The third point is this: When we compared the 
programs, the $168 billion, the $242 billion, and the $311 billion, 
that was apples and oranges, as I understand it. The benefit I remember 
from the Robb program that my friend from Texas pointed out did not 
have the same level of benefit, the same generosity of benefit, as the 
plan proffered by the Senators

[[Page S7213]]

from Florida, Georgia, and Massachusetts. So we are really comparing 
apples and oranges.
  It is not that anybody thought the original plans did everything, it 
was just the amount of money they were willing to spend, and in fact, 
as I recall it, the Robb plan was sort of objective because people 
thought for the amount of money it cost compared to the amount of 
benefit, it was not quite worth it, at least in political terms, using 
politics in the finer sense in terms of people's value choices.

  Those are my three questions to my colleague, and I welcome the 
answers he will give with the same twinkle in his eye.
  Mr. GRAMM. Let me begin with No. 3 first. We are comparing apples and 
apples. In 2001, in the political bidding war we were in then, $311 
billion represented a sufficient number of apples to engage 
successfully in the bidding contest. Today, it is $600 billion and 
heading up. My point is that, beginning with the chairman of the 
Finance Committee and the majority leader, we had Members saying last 
year that $311 billion would provide a wonderful program. The problem 
is, this year it is $600 billion, and that is a wonderful program. And 
it is not apples and oranges, it is a lot more apples.
  Secondly, I think where my colleague is leading on the death tax 
thing is kind of a circular argument. If you are willing to take away 
people's money, the only limit you get as to how much you can spend on 
Medicare or anything else is the amount of money that can be extracted 
without destroying the productivity of society.
  The point I had made earlier was that you are already committed under 
the existing program to take 30 cents out of every dollar everybody 
earns to pay for Social Security and Medicare. If you adopted your 
program, by some estimates you would be paying 40 cents out of every 
dollar that people earn, and the question is: Is that something that 
the economy can bear, and is that fair to young people?
  In terms of the death tax, we have a very different view of the death 
tax. Nobody in my family ever paid any death tax, and nobody ever 
bequeathed anybody anything because they did not have anything. But 
when somebody works a lifetime to build up a farm or a family business, 
the view of the Senator is that that belongs to the Government and my 
view is it belongs to the people who build it up. They build it up for 
their family, and it is not right for us to force their family to sell 
off their business or sell off their farm or sell off their life's work 
to give the Government 55 cents out of every dollar they earn.
  It is a perfectly legitimate position to say they ought to have to do 
that, but it is not something of which I am supportive. I think it is 
fundamentally wrong.
  There are other people who want to speak.
  Mr. SCHUMER. I am not yielding but thanking him for the answers.
  Mr. GRAMM. Let me also say one thing that has happened about which I 
am worried. Many of my Democrat colleagues, knowing that this tax cut 
that we adopted is temporary--because of this quirk in the budget, 
unless something changes it goes away in 10 years--almost seem 
determined to spend and spend and spend until we have to take the tax 
cut away.
  I remind my colleagues, throughout American history the highest 
sustainable tax rate that we have been able to sustain over long 
periods of time was taking 19 cents, on average, of every dollar 
created in the economy. When we adopted the tax cut last year, the 
Government was taking 22 cents out of every dollar produced in the 
economy. That was a record high that only had one year higher. That was 
1944 at the peek of the war effort. I hope people do not believe we 
should go back to a 22-percent tax burden.
  The final point I make, the Senator acts as if death taxes would pay 
for Medicare. We all know Medicare is funded by payroll taxes. If you 
are working in some factory somewhere--I don't imagine you are watching 
this debate, but if you are and say you are taking a coffee break and 
this is the only thing they have on in the factory--don't think that 
some rich guy is going to be forced to sell off his farm to pay for 
your Medicare. You are going to have to pay for it with higher payroll 
taxes. Don't be confused.
  Now, I have talked longer than I had intended. Let me make a couple 
of points. First, I read a quote, from John C. Rother, policy director 
of AARP. In recognizing that the two big plans would be defeated, he 
said: Another possibility is for Medicare to provide catastrophic 
coverage for prescription drug expenses over a certain threshold.
  And he notes also that we could have a Government-authorized discount 
card.
  Now, let me make my points about this bill and stop. First, I had 
virtually nothing to do with writing this bill. Two Senators have been 
principal authors of it. I recognized, in simply looking at it, that it 
was the best plan around. They came up with it.
  Why is it the best plan around? First, it is within budget. Now, it 
is hardly some insignificant amount of money. Somewhere between $140 
and $170 billion is what this costs. That is a lot of money.
  What it does is provides the most help to people who fall into two 
categories: A, you don't have very much income; and B, you have high 
drug bills. I submit those are the people who need the help the most.
  The problem with the other two proposals--let me make my criticism 
bipartisan--the problem with the other two proposals is that they spend 
80 percent of their money helping people who don't need help. When you 
take the view that the Government ought to have a program that pays at 
least 25 percent of the drug bill for Bill Gates and Ross Perot--that 
it is not a universal program unless they are covered--you are going to 
end up spending huge amounts of money paying for people who don't need 
the help. You end up paying for the roughly two-thirds of people who 
already have health insurance for pharmaceuticals, because you 
substitute the taxpayer for the private insurance policy they already 
have as part of their retirement program.
  The point I am trying to make is you are spending 80 cents on people 
who either almost have the benefit or don't need it to get 20 cents on 
the target to people who do need it.
  The advantage of the Hagel-Ensign bill is that it puts every dollar 
on the target. This is what it says. Again, you can spend more money; 
God knows you can spend more money. But just listen to what it does. 
Let me take a retired couple. If their income is $23,000, they would 
have to pay roughly $100 a month in drug bills themselves, but at 
slightly above $100 a month this program kicks in and they get full 
payment except, possibly, a very small, little copayment per 
prescription.
  Now, our colleague from New York said a huge number of seniors, 80 
percent I think he said, would reject this program. I don't believe it. 
My mama's drug bill is $400 a month. She does not want help in 2005. 
She does not know if she will be alive in 2005. She wants help now.
  The advantage of this program is that it provides help right now. 
What it would mean in her case is she would have to pay a little over 
$100 a month and now she is paying $400 a month.
  Now, if your income goes up, then the deductible goes up. For 
example, if you are making $46,000 a year, your deductible is $3,500. 
If you are retired, most retirees who make $46,000 a year own their own 
home. What this bill says is, if your expenses on pharmaceuticals get 
up really high, the Government is going to come in and help you. If you 
make $69,000, you have to spend $5,500 to get the payment by the 
Government. So it is tied to your income.

  And for Bill Gates and people who are very wealthy, they have to 
spend 20 percent of their income on pharmaceuticals. Bill Gates will 
never get a benefit and he shouldn't. He doesn't need it, and he 
doesn't want it. He might not even take it.
  That is not the only help you get, by the way, because immediately 
this program would let private companies contract through Medicare to 
represent Medicare beneficiaries in negotiating for their 
pharmaceuticals. So each of these companies would compete in buying the 
drugs you buy. You would buy from whoever could sell them to you the 
cheapest, and it is estimated that they would save you somewhere 
between 25 percent and 40 percent of the cost of your drug bill.
  In my mama's case, this would mean spending much less than $400 a 
month--

[[Page S7214]]

it is estimated that these companies, because they have more buying 
power, would get the best price. She goes to the same pharmacy because 
it is the one convenient to her house. These companies could go all 
over the country to find her drugs and buy them the cheapest. They 
could save her $100 on average just simply by being competitive.
  Remember I told you about the cane with four legs on it--Dr. Frist, 
you have seen them--lots of people have them in hospitals. Medicare 
pays $40 for that cane on average. The VA buys that cane for $15 
because they go out and engage in competitive bidding. These companies 
would do the same thing. Then, anything above $100 per month, the 
Federal Government would pay.
  If you said to my mother and anybody else's mother: Would you rather 
have the Government pay the whole thing? The answer would be yes. She 
would rather the Government pay the whole thing. But the point is, this 
is a reasonable, responsible program that would help real people.
  Finally, Senator Ensign has presented three or four times--you can 
never do it enough--cases of people who have real high drug bills, and 
remarkably he has shown that his program is cheaper for them than these 
very expensive programs. Before somebody runs down here to the floor to 
answer me and says: How is it possible? We spend $600 billion and 
Senator Ensign spends $170 billion and you are saying it is cheaper? 
You are saying it is cheaper under Senator Ensign's program. How can 
that be when he doesn't spend as much money?
  The answer is very simple. He doesn't cover everybody. If you do not 
have high pharmaceutical bills--and in any given year a substantial 
number of seniors do not--and if you do not have moderate income, he 
helps you get competitive purchase of your drugs, which saves you 
between 25 percent and 40 percent. But the Government does not pay if 
you do not fall in this category of people. You don't get help under 
those circumstances.
  Now you say everybody should get help. The point is, this bill helps 
the people who need the help the most. This is a good proposal.
  I remind my colleagues, we are at an impasse here. There are some 
people already talking about spending more money to break the logjam. 
The logical thing to do now, if we want to act this year, is to take 
this proposal and adopt it. That will help people who need the help 
most and help them now. Then we can come back next year. We can look at 
the budget situation, we can see where we are, and in the process we 
can supplement this if we want to.
  Let me give you one example because Senator Ensign has done it better 
than I could possibly do it. This is somebody who lives in Nevada. He 
calls her Betty Smith. She is 66 years old. She has an income of 
$15,000 per year. She is being treated for a whole bunch of things.

  Her drug bill is $8,000 a year. My mother's drug bill is $4,600 a 
year and, thank God, she doesn't have these kinds of problems. So it is 
easy to believe an $8,000 bill.
  Here is the point. Look at the Hagel-Ensign bill under exactly this 
situation. Your income is $15,500 and you are being treated for breast 
cancer and you are taking all these drugs and you have a $8,000 bill, 
so you are spending over half of your income on drugs. This is 
literally somebody. We all talk about this cliche of people being 
forced to choose between medicine and food. I hope her children are 
helping her. If they aren't, they ought to be. But she would 
literally--if she didn't have any children, didn't have anybody helping 
her--she would literally be choosing between eating and drugs.
  Now, here are the three bills. Two of them we voted on, and one we 
are about to vote on. The point that Senator Ensign has made is that 
under the bill that costs $600 billion and covers everybody, this lady 
would have to pay $3,180 a year. Under the tripartisan bill, she would 
have to pay $2,570 a year. But under the Hagel-Ensign bill, she would 
pay $2,152. In other words, for a lady who is very sick and who has a 
very moderate income, she would be better off under this plan.
  But for people who say how is that possible when it only spends $170 
billion, the way it is possible is it is focused to help exactly people 
like this lady. It does not take the view that we have to provide the 
Government program for everybody. It just helps people who need the 
help. And it provides this system of competitive purchase for 
everybody.
  So, I urge my colleagues, do not get into this business about saying 
this cannot be as good as that because that costs so much more money. 
Some of the best things in life are not necessarily the most expensive. 
Remember, we are going to have to pay for it. Not ``we'' being Members 
of the Senate. We are not going to pay for it. We don't pay for 
anything. We are going to be covered by the Government insurance 
program when we get out of here. But that blue collar worker on that 
assembly line is going to have to pay for it.
  I congratulate my colleagues. This bill ought to be adopted. There is 
a budget point of order against it but not because it is over budget. 
It is because we wrote in the budget that the bill had to come out of 
the Finance Committee. The Finance Committee refused to report a bill, 
so no bill could come out of the Finance Committee. So every bill had a 
budget point of order. If it had gone through the Finance Committee, no 
point of order would have lied against this bill. However, if the 
Graham-Kennedy bill had gone through the Finance Committee, two points 
of order would still have lied against the it, a section 302 and a 
section 311 point of order, as well as the tripartisan bill.
  But this bill is not subject to a point of order because it spends 
too much money. It is subject to a point of order because the Finance 
Committee was not allowed to do its job.
  So I hope people will look at this and decide we can help a lot of 
people, and we can do it right now. The purchasing discounts would 
start immediately. We do not have to wait until 2005. And this is 
something we can afford. We could come back and do more next year if we 
had the money.
  I appreciate my colleagues listening, and I commend this program to 
them.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. BROWNBACK. Mr. President, I ask the sponsor of the amendment to 
yield to me 10 minutes to debate the issue.
  Mr. HAGEL. I yield to the Senator from Kansas 10 minutes off our 
time, Mr. President.
  Mr. NELSON of Florida. Might I inquire of the Chair how much time is 
remaining on this side?
  The PRESIDING OFFICER. Sixteen and a half minutes.
  Mr. NELSON of Florida. Mr. President, I would like to be recognized 
at the appropriate time.
  The PRESIDING OFFICER. The Senator from Kansas is recognized.
  Mr. BROWNBACK. Mr. President, I thank my colleague from Nebraska for 
allowing me the time and for his proposal. I think it is an outstanding 
proposal and one that we can do and one that we can afford and one that 
can provide benefits to some people who really need this help and need 
it now. It is something I think we could build on in the future.
  Remember now, we are talking about a group of people who do not have 
pharmaceutical benefits and need them, people with low income but above 
Medicaid; low income, and this is taking a big portion of their income. 
They have to have these pharmaceutical drug benefits. They need it. 
Here is a proposal where we can do it.
  If I can just make an observation at the outset: This process cries 
to go back to the Finance Committee and come out of the Finance 
Committee. This has not been taken through the Finance Committee. It 
clearly should have been. This is the largest--this will be the largest 
new entitlement program that I will have voted on since I have been in 
the Congress, either the House or the Senate, by far. I think at the 
end of the day, when the dollars are tallied up, you are looking at a 
multitrillion-dollar program because once we start a benefit, we do not 
stop it. This is something that we will start, and will do, and it is 
going to continue for a number of years. It is something we need to do.

  But if you are going to start, at the end of the day, a trillion-
dollar program in all probability, you need to take it through the 
right process. It needs to come through the committee that looks at the 
numbers and figures out how to pay for it.

[[Page S7215]]

  To just pass a benefit and say we are going to do it, and we will 
figure out how to pay for it after the bills come due, is the height of 
irresponsibility on our part.
  I have two charts. I do not want to overburden everyone with lines on 
a chart, but I want to point out, this is where we are today with these 
various proposals. This black line represents the total income for 
Medicare. I call this chart ``The Great Medicare Accounting Scandal'' 
because I do not think we are accounting for the real cost of these 
programs.
  We are being critical of people--and rightfully so--in corporate 
America for not accounting for real costs and for sliding things around 
saying: Well, OK, we will capitalize this, but it should have been a 
direct expenditure and expense. We are criticizing them--and rightfully 
so--for doing that.
  What are we doing here? What are we doing here on our accounting? The 
black line is the amount of money we have coming into Medicare. The red 
line is the Graham-Kennedy benefit proposal. You can see, in year 1 of 
the benefit, in the year 2005, the expenditures are more than the 
income we have coming in from Medicare. In the first year out of the 
box, you are spending more money than you have coming in in Medicare. 
That does not count the accumulation that you are going to have up 
until 2010, when the program, theoretically, ends. But, of course, it 
does not.
  We do not terminate benefit programs. It is going to continue past 
2010, into 2011, which is the first year the baby boomers start 
retiring. So you have this group of soon-to-be seniors--72 million baby 
boomers--in America. Count myself amongst them. That is kind of the big 
lump in the python coming through, the pig in the python, in the 
demographic charts in the United States, starting in 2011, where the 
program is supposed to end in 2010. Of course, it isn't going to 
happen.
  On this chart, where would this red line be in the year 2011, when 
you start getting this large group of retirees coming into the system? 
It is going to be much higher and be an accounting scandal for us.

  So how are you going to pay for this? You are either going to cut 
benefits, which I do not think we are going to do, you are going to 
raise payroll taxes, which I would think would be the wrong thing to 
do--we already load so much on people working in the system--or are you 
going to try to take this from somewhere else in the system, or raise 
the deficit? Probably you are going to do all of those things, other 
than cutting benefits. But we are not talking about that in this system 
right now.
  Look here, on this chart, at the various other proposals that we 
have.
  The purple line shows the total expenditures today, without a 
benefit. The Hagel-Ensign proposal is shown by the green line.
  Of the proposals that are coming forward--and I think we need to have 
a prescription drug benefit--this is the most responsible one that we 
can handle and that we can do. And we, clearly, should do something.
  The process cries out for us, right now, to do something now and not 
just to have something for campaigns. Here is the Democrat proposal. 
Here is the Republican proposal. But you cannot take those as 
prescription drugs. That is not income to you. You cannot eat promises. 
That is what we have sitting out there now. And that is where it seems 
the debate is heading, unless we can take it back to the Finance 
Committee and have a legitimate process, one where we would come out 
with a benefit that people can afford and need to have today.
  This one has been a very disappointing discussion, to me, in the 
sense that there is a clear compromise that sits out there that is 
available to do, and we could cobble together different proposals of 
any of these bills and figure out how to make it work, and get a 
bipartisan proposal that we would all support, that would include a 
prescription drug benefit.
  That sits out there to be had. That can take place. Instead, we are 
just saying, no, we are going to take it through this different 
process. We are going to bypass the Finance Committee on the most 
expensive entitlement program that I will have voted on as a Member of 
this body. We are going to bypass the normal process. We will just have 
a political debate on it that I do not think is edifying for the body 
and is not the right way to go.
  On the particular proposal, the Hagel-Ensign proposal, of which I am 
pleased to support, I also note that it is supported by AARP. Unlike my 
colleague from New York, who said the AARP does not support it, in 
today's New York Times, John Rother, policy director of AARP, said 
this:

       Another possibility is for Medicare to provide catastrophic 
     coverage for prescription drug expenses over a certain 
     threshold, perhaps $4,000 to $6,000 a year, with no premium. 
     This could be combined with additional help for low-income 
     beneficiaries and a government-authorized drug discount card.

  That is not my speech supporting Hagel-Ensign. That is from the 
policy director of AARP in the New York Times today. He is saying: 
Look, you have the parties. Each have a proposal. They are at a 
standoff on this proposal. What could we get done so we can move this 
forward for the benefit of seniors in America? And he describes the 
Hagel-Ensign proposal. That is what we should do.
  That is the type of proposal we need to move forward. It would be an 
appropriate proposal for us to move forward, so we can provide a 
benefit, we can get it done now, and provide it to people who need it 
now. They do not need promises. They need action by us. And they could 
have the action. This is something we need to do, and we need to do it 
this way today.
  This chart shows the various lines depicting where the assets in the 
proposals go. You can see the current projected Medicare trust fund 
assets, and also the projected Medicare trust fund assets under Graham-
Kennedy. You can see where we are taking this proposal. This line is 
going south, fast, if you get a benefit that you cannot afford.
  I ask a rhetorical question of all my colleagues: Would we rather 
encounter the first wave of baby boomer retirees with $660 billion in 
the Medicare trust fund or would we rather encounter retirees having 
spent all but $250 billion? That is what these lines point out.
  We know we have the baby boomer generation hitting in 2011. They 
start jumping into the retirement pool in 2011. We want to face them 
with some money built up at that point in time and still have a 
prescription drug benefit like what is in Hagel-Ensign, or even the 
tripartisan bill. We can get there with more assets in the bank and 
still provide today a prescription drug benefit for those who need it 
today. And they need it today.
  I really think we should set our Republican and Democrat caps aside 
and say we can provide this to people who need it today. For the 27 
percent of the public who do not have a prescription drug benefit of 
some type, who are in a low-income category, who need this, we provide 
a discount drug card or discount card, such as in the Hagel-Ensign 
proposal. We do that today and still save some money for when the baby 
boomers start retiring in 2011.
  I hope we will all look at that and say that is the right thing to 
do, to provide that benefit. It is the responsible thing to do. And as 
we look to our future, it is the right thing for workers coming up in 
this system so that they are not stuck with this huge lug on their 
shoulders when the baby boomers retire.
  The PRESIDING OFFICER. The Senator has spoken for 10 minutes.
  Mr. BROWNBACK. Thank you, Mr. President, very much. And I thank my 
colleague from Nebraska for yielding time to me.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. NELSON of Florida. Mr. President, I rise to speak in opposition 
to the amendment. I want the Senator from Nebraska to know of my 
personal affection and respect for him. There are certain people in a 
body to whom you just naturally gravitate and you naturally like, and 
he is certainly one of them.
  I rise in opposition, not because he does not have an excellent, 
substantive proposal, but I would offer my objection as has been 
articulated by the AARP today in a letter to Senator Hagel in which 
they state:
  In addition to our substantive objections, we are concerned that by 
offering this scaled-back proposal today, you would effectively derail 
bipartisan discussion and compromise on more meaningful comprehensive 
approaches.

[[Page S7216]]

  That is what I want to discuss today. What this Nation is begging for 
is a comprehensive approach, not a piecemeal approach. What the senior 
citizens of this Nation are yearning for is that we modernize Medicare 
to provide a prescription drug benefit.
  If any of us were designing a Medicare system, which is a health 
insurance system for senior citizens, funded by the Federal Government, 
if we were devising it today in the year 2002 instead of the year 1965, 
when it was enacted, would we include prescription drug benefits? The 
answer to that is, obviously, yes.
  Medicare was set up in 1965 when the condition of health care was 
centered around acute care in hospitals. But with the miracles of 
modern medicine, with the advent of prescription drugs that can 
increase the quality of our lives, that can take care of chronic 
ailments and that, indeed, add to what we would say, in the street 
vernacular, is preventive maintenance, then, clearly, if we were 
designing a health insurance system funded by the Federal Government 
for senior citizens today it would clearly include prescription drugs.
  That is the question that is before this body. But because of the 
rules of the Senate, we have to get 60 votes in order to pass anything 
here which, with competing plans, makes it very difficult.
  Although I think the Senator from Nebraska has some excellent ideas, 
it is injected in this debate at the wrong time because in the words of 
the AARP, as articulated in their letter today:

       We are concerned that by offering this scaled-back proposal 
     today, you would effectively derail bipartisan discussion and 
     compromise on more meaningful, comprehensive approaches.

  We have to keep trying. We have just been unable to get the 60 votes 
on two different substantive approaches to prescription drugs in the 
votes that occurred earlier today. We have to keep trying to forge a 
compromise. The compromise is not this scaled-down version.
  I wish to speak about the substantive alternatives that are here. One 
of the alternatives, as suggested by what has been voted out of the 
other body, the House of Representatives, utilizes the private sector 
and private sector insurance companies in which they offer the 
prescription drug benefit.
  I had a little bit of experience as the elected insurance 
commissioner of Florida for 6 years before coming here. I point out 
that you can get some glimpse of the enthusiasm of insurance companies 
to offer this prescription drug benefit if you look to the States.
  For example, 4 years ago, the State of Nevada passed a prescription 
drug benefit. It was to be offered by private insurance companies. 
Within 2 years after the passage of that law, not one insurance company 
had come forth to offer that prescription drug benefit.
  On the basis of that experience, that is certainly not what we want 
to be offering to senior citizens of our country on something that is 
so important to them, a benefit that would be illusory, that would not 
be there. That is why we ought, in whatever compromise we strike, to 
come closer to the Graham-Miller approach, which is a substantial 
reworking of Medicare, and the prescription drug benefit becomes a part 
of Medicare. Then it is my hope, once we can find that illusive 
consensus, we can go on and add additional improvements.
  The health care providers of this country are hurting because they 
are not getting reimbursed for their Medicare procedures at a rate that 
is commensurate with what they should be reimbursed. One of the items 
we are going to discuss--and hopefully we would be able to take this 
base bill and amend it--is an increase of those Medicare reimbursements 
so that we are taking care of the Medicare beneficiaries, the senior 
citizens, and we are also helping those who are providing the services, 
the health care providers, by increasing their Medicare reimbursement.

  When we do that, I hope we will also look at some of the practices 
that because doctors are getting squeezed, in large part squeezed by 
insurance companies, sometimes regular insurance companies, some called 
HMOs, which are insurance companies, and because doctors are getting 
squeezed, they are trying to find ways to keep their income up.
  Lo and behold, down in my State of Florida, there is a group of 
doctors now saying to all of their patients: We are not going to see 
you anymore unless you pay us an entrance fee of $1,500 per patient per 
year. But by the way, we still want to take your Medicare 
reimbursement.
  That is simply the beginning of the end for Medicare, because the 
logical extension of that is that only those who are wealthy enough to 
afford that entrance fee--in the case of Florida, $3,000 per year per 
couple--are going to get the access to the doctor they want, that 
doctor who is being reimbursed by the Federal Government for the 
services performed for those senior citizens.
  That is wrong. It should be changed. It ought to be illegal and yet 
the Department of HHS has said it is not illegal. So we are going to 
have to change the law so that a doctor cannot receive reimbursement 
from Medicare if they are saying to those patients: I will not see you 
unless you pay me $1,500 a year as an entrance fee into concierge care.
  I hope we strike the major compromise, that it is closer to the 
Graham-Miller bill, that we address Medicare reimbursements because the 
doctors and other health care providers need it, and that we add the 
amendment I just talked about which would prevent doctors from limiting 
patients to seeing them unless they pay an entrance fee while at the 
same time getting their Medicare reimbursement.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. HAGEL. Mr. President, could the Chair tell me how much time this 
side has remaining?
  The PRESIDING OFFICER. Twelve minutes fifty seconds.
  Mr. HAGEL. And how much time does the other side have remaining?
  The PRESIDING OFFICER. Five minutes fifty-seven seconds.
  Mr. HAGEL. I thank the Chair.
  Mr. President, I allocate 5 minutes of our remaining time to the 
Senator from Oklahoma.
  Mr. INHOFE. Mr. President, I know time is now precious and we are 
down to a few minutes. I will skip a lot of things I was going to say 
since there has been a lot of redundancy.
  My good friend from New York was on the floor and was talking about 
the relative significance of the inheritance tax and how it wasn't 
really all that meaningful. I am sure the occupant of the chair would 
agree because he was one of the rare Democrats who stood up and said we 
should repeal that unfair tax on money that has already been spent. 
Also, with the farm crisis we have had out West in my State, I have yet 
to find one person out there who wasn't more concerned about losing his 
farm because of the very unfair death tax than even the farm bill. But 
that is not what we are here to talk about.
  I think something the Senator from Texas, Mr. Gramm, said has to be 
repeated over and over; that is, this Hagel-Ensign bill is a lot less 
expensive and does a better job, but there is one major reason. We have 
a saying out in Oklahoma that ``if it ain't broke, don't fix it.'' That 
is exactly what the situation is.
  We have a lot of people who don't need additional coverage now. If 
they don't need it, why provide it? Why get into some very large 
program?
  Now, we have had two programs that have been rejected today. The 
first would not do for seniors what it said it would do, and it would 
have cost a lot more than we can afford, and it would not have included 
a lot of the drugs the seniors need. That program, as well as costing 
too much and not covering enough medications, would sunset in 2010. 
That means in 2010, people who have been relying on the Medicare 
prescription drug benefit would have had their coverage taken away. We 
know better than that.
  I remember one of the best speeches that should be required reading 
for all young people, called ``A Rendezvous With Destiny,'' by Ronald 
Reagan. He said:

       The closest thing to immortality on the face of this earth 
     is a Government benefit or program once started.

  We all know that is the way it would work out and we would end up 
with some very large, spiraling cost program that we could not get rid 
of. It is not responsible, reasonable, and it is

[[Page S7217]]

not the best we can do for seniors. I am glad it did not pass.
  Then we were given a chance to consider a second option, the 
tripartisan plan. I thought it was too expensive, but I supported it. 
It is very much like what the House passed. It is something we can go 
to conference on and have something effective come out of it. Once a 
person's drug costs reach a higher fixed limit, the Government would 
have paid 90 percent of the additional cost. Many colleagues supported 
it, as I did; but it was defeated.
  Now we have a chance to give seniors a real prescription drug 
benefit. This legislation is a responsible, long-term, comprehensive 
plan which truly takes into account the needs and the situation of 
individual seniors. Several fellow cosponsors have already spoken to 
the specifics of the plan, such as low premiums, low overall costs on 
catastrophic coverage. I will tell you what it means to the people who 
sent us here.
  Senator Gramm talked about some individuals without identifying them. 
I will identify the people. The Hendersons are from Okmulgee County, a 
short distance from where I live in Oklahoma. I told them I was going 
to use their case. They wrote me to tell me about their struggle with 
prescription drugs. They had a unique problem--one was a heart problem 
and one was a cancer problem. The Hendersons have a yearly household 
income of $24,000 and they spend $9,000 of that on prescription drugs 
in a single year. The Hendersons' income falls between the 200 percent 
and 400 percent above the national poverty level. That national poverty 
level for couples is $11,940 a year.

  Under our bill, an out-of-pocket limit on the cost of prescription 
drugs for people with a similar income to the Hendersons is set at 
$3,500. If they were between 100 and 200 percent of poverty, that would 
come down to $1,500. But in the case of the Hendersons, they would have 
to pay that maximum, and then a copay of 10 percent of the cost of 
these drugs. Calculate that out. While the remaining cost of the 
Hendersons' drugs is $5,500, their copays would be no more than $550, 
and under this bill the Hendersons would pay a total of $4,050 a year 
for prescription drugs, when they are now paying $9,000 a year. This 
bill cuts their drug costs by more than half.
  The Hendersons, under the Democrat plan, would have faced uncertainty 
on three fronts: First of all, uncertainty about which drugs were 
covered, since only two drugs in each therapeutic class would be 
covered; secondly, uncertainty about how much the prescriptions would 
cost since the $10, $40, and $60 copayments in the plan were virtually 
done away with through amendments; and, three, uncertainty about how 
long their benefits would last even if it didn't sunset. They would not 
know this. Uncertainty is there.
  I believe the Hagel plan is real assistance, and I strongly support 
it. I believe this is the alternative that is left and the most 
responsible one.
  I thank the Chair.
  The PRESIDING OFFICER (Ms. Cantwell). The Senator from Michigan is 
recognized.
  Ms. STABENOW. Madam President, I yield myself 4 minutes.
  Madam President, first of all, I want to speak to my colleague from 
Oklahoma. My mother grew up in Oklahoma, and I have a great affinity 
for that State. I have a lot of relatives there.
  But I was quite surprised to hear the comment that ``if it ain't 
broke, don't fix it,'' when we are referring to Medicare. When we look 
at the Medicare system and the inability to cover prescription drugs 
for our seniors, when we look at the explosion in the price of the 
prescription drugs, I would say it is very tough to find a system that 
is more broken than our inability today to provide low-cost 
prescription drugs, whether it be through Medicare or whether it be a 
small business or a farmer trying to get coverage for their family. 
This system is broken. That is why we are here. It needs to be fixed.
  I rise in opposition to the Hagel amendment. I appreciate the desire 
of my colleagues to find an alternative, but I certainly am concerned 
that this does not begin to address what it is that seniors in this 
country are needing or asking them to do. There seems to have been a 
lot of confusion about where AARP is regarding this issue. So I will 
read a letter sent to the author of the amendment on July 23--today--
which says:

       Dear Senator Hagel: Enacting a comprehensive prescription 
     drug benefit in Medicare this year remains the top priority 
     for AARP. Our members are counting on the Senate to pass a 
     meaningful drug benefit that is available and affordable to 
     all beneficiaries. Our members were promised in the last 
     election that a comprehensive drug benefit would be a 
     priority, and we are counting on you to make good on that 
     promise this year.
       We appreciate the intent of your bill, S. 2736, the 
     ``Medicare Rx Drug Discount and Security Act of 2002,'' to 
     provide a prescription drug discount card and stop-loss 
     protection to Medicare beneficiaries. However, in addition to 
     our substantive objections, we are concerned that by offering 
     this scaled-back proposal today, you would effectively derail 
     bipartisan discussion and compromise on more meaningful 
     comprehensive approaches. We believe Congress should focus 
     its efforts on enactment of a more comprehensive drug benefit 
     this year.
       In addition to the timing of your proposal, AARP has 
     concerns about the approach taken in your bill, including:
       Catastrophic coverage--While AARP has not opposed income-
     relating premiums, income-relating the Medicare benefit 
     changes the nature of the program. This would set an 
     extremely dangerous precedent in Medicare. Further, the stop-
     loss levels set in the bill do not provide enough protection 
     for lower income beneficiaries. A low-income couple could 
     spend 25 percent of their income just for drugs before this 
     plan offered assistance. Thirdly, there are a number of 
     issues involved in using tax returns to determine program 
     eligibility levels, and we believe other options should be 
     explored.
       Discount card--While AARP supports the use of a discount 
     card program as a building block for a Medicare prescription 
     drug benefit, your proposal lacks the necessary 
     specifications to guaranty the level of discount, what level 
     of discount would be passed to beneficiaries, and the degree 
     to consumer protections required of plans.
       Given these concerns, AARP opposes your amendment. We 
     remain fully committed to developing a comprehensive drug 
     benefit for all Medicare beneficiaries and we look forward to 
     working with you on legislation that our members can support.

  This is signed by the executive director and CEO of AARP. I simply 
wanted to enter that into the Record to make it clear that AARP joins 
us in opposition to the amendment.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. HAGEL. Madam President, I ask unanimous consent that Senators 
Frist and Nickles be added as cosponsors of amendment No. 4315. I yield 
the remainder of our time to the distinguished Senator from Tennessee.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FRIST. Madam President, how much time remains on our side?
  The PRESIDING OFFICER. Six minutes twenty-four seconds.
  Mr. FRIST. And the time on the other side?
  The PRESIDING OFFICER. One minute.
  Mr. FRIST. Madam President, will you notify me when I have 1 minute 
remaining.
  I rise in support of the Hagel-Ensign Medicare Prescription Drug 
Discount and Security Act of 2002. I do so after a long day of debate, 
discussion, and votes on bills which attempt to reach out with 
affordable prescription drug coverage for our seniors.
  Over the course of the day's debate, we have touched upon what 
matters most to seniors. That is what I want to address in the next 3 
or 4 minutes.
  What do seniors who are listening today--38 million Medicare 
potential recipients who are seniors today and another 5 or 6 million 
individuals with disabilities--what do they want regarding prescription 
drug coverage? I think it is three things. The first issue is that 
seniors want security. They want peace of mind. When you are 65, 70, 
75, 80 years of age, the most frightening thought is that in those 
final years of your life you develop something--whether it is heart 
disease, chronic lung disease, emphysema, or lymphoma--and all of a 
sudden you face high prescription drug costs which are skyrocketing. We 
know this is an issue--we have been talking about that all week long. 
In essence, paying for prescription drugs bankrupts you in terms of 
what you can afford and, even worse than that, what your children may 
be able to afford. The beauty of this particular bill is that it 
addresses that peace of mind, that security.
  The second issue I hear as I talk to seniors as I travel around 
Tennessee,

[[Page S7218]]

and it has been discussed a lot on the floor today, is that, with 
regard to prescription drugs, seniors want help now. They listen to the 
debate, and both of the bills discussed earlier today have some very 
good, substantive issues to them, are comprehensive, and each have 
pluses and minuses. But the defect that both bills have that the Hagel-
Ensign bill does not have is this bill takes effect, in essence, right 
now. That is what seniors want.
  Seniors who are listening may think: Why talk about a bill taking 
place in 2006 or 2005? I do not even know if I am going to be around 3 
or 2 years from now. What they really want is help now. Those who need 
it want it now. The message they tell me is to do it now. Again, the 
Hagel-Ensign bill takes effect next year, not 2 years and not 3 years 
from now.
  The third factor this bill does is it addresses prescription drugs in 
a responsible way. We are not in a world today or in a country today 
where you can just throw unlimited money and say it will be taken care 
of by the next generation or by my family 5 years from now. This is 
especially true when we have a doubling of the number of seniors, the 
demographic change, the move of the baby boomers coming online in 2008 
and 2010. Seniors tell me, whatever you do, do it responsibly. Do it in 
a way that is just not over a 3-year period, 4-year period and it 
disappears, you take the benefit away or raise taxes exorbitantly. Do 
it in a way that can be sustained over time. Do it responsibly.

  That is what the Hagel-Ensign bill does. One of the most beautiful 
aspects of this bill is that we can do it now, and we can do it 
responsibly. We talk big figures. The dollar figure was $160 billion. 
It is a lot of money, but it is not the $800 billion or the $1 trillion 
or even the $370 billion of the tripartisan plan. It takes effect now, 
giving peace of mind in capping how much money a senior is going to 
have to pay out of pocket if there is a catastrophe or if a senior 
develops a disease which requires the miracle medications that are out 
there today, and it does it in a responsible way.
  How does the bill work? We have been through the details. The first 
issue I mentioned was peace of mind, security, and savings. Instead of 
what seniors are doing now--going to a pharmacy, placing a prescription 
on the table, and paying a retail price that nobody in this body, most 
employer-sponsored plans do not have to--they will be able to go in to 
a pharmacy with a card that they put on the table and take advantage of 
mass negotiations.
  The PRESIDING OFFICER. The Senator has 1 minute remaining.
  Mr. FRIST. I thank the Chair.
  Madam President, seniors can take this card in and get discounts, 
resulting in savings to seniors right now.
  Catastrophic coverage gives security, peace of mind. Using 
marketplace tools is important as we look ahead because it takes 
advantage of the marketplace in negotiating discounts that are not 
available today.
  Madam President, I close with the statement that I believe the Hagel-
Ensign bill brings to a head much of the discussion today in that it 
reaches out and gives seniors the security they want. It does it now. 
It does it in a way that is responsible. It is affordable for seniors, 
affordable for taxpayers, and is permanent.
  Madam President, I yield the floor.
  Ms. STABENOW. Madam President, can you give us an indication of the 
time remaining to each side?
  The PRESIDING OFFICER. The Senator from Michigan controls 1 minute. 
The Senator from Nebraska controls 5 seconds.
  Ms. STABENOW. Does the Senator from Nebraska wish to take his 5 
seconds?
  Mr. HAGEL. I want the Senator from Michigan to have my 5 seconds.
  Ms. STABENOW. I was looking forward to what the Senator might say in 
5 seconds.
  Mr. HAGEL. Madam President, the Senator from Michigan has a more 
difficult case to make. She needs more time.
  The PRESIDING OFFICER. The Senator from Michigan.
  Ms. STABENOW. Madam President, I will simply say in closing that 
AARP, representing seniors, and other senior organizations across this 
country do not believe this, in fact, is a good deal. There is no 
question they want action now, but it has to be real and meaningful.
  Discount cards are available now. In many cases, they do not work at 
all or they are very limited. It is important we be responsible.
  I would argue there is a broader responsibility in the Senate. When 
we debate whether or not the tax cut geared to the wealthiest 
individuals in the country will be extended another 10 years, we are 
debating an amount of money that is more than four times any 
comprehensive Medicare plan that we will have before us.
  This is a question of priorities. It is a question of what we 
believe, as Americans, should be our values and how we act on those in 
terms of our priorities, and I argue that doing the right thing with 
the real Medicare benefit is what our seniors are asking for and it is 
what they deserve. I urge my colleagues to vote no on the Hagel 
amendment.
  The PRESIDING OFFICER. All time has expired.
  The Senator from West Virginia.

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