[Congressional Record Volume 150, Number 66 (Wednesday, May 12, 2004)]
[House]
[Pages H2891-H2898]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 IRAQ AND BRINGING JOBS BACK TO AMERICA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 2003, the gentleman from Kansas (Mr. Tiahrt) is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. TIAHRT. Mr. Speaker, tonight I am going to spend a little bit of 
time talking about how we are going to bring jobs back into America. 
But before I get to that topic, I want to mention a little bit about 
Iraq and the situation over there currently.
  There has been a lot of handwringing in Washington, D.C. over what 
has happened in the Abu Ghraib prison. It was a horrible scandal that 
was wrong, it was sick, and we must hold those people who are 
responsible accountable. Court martials are currently going on. They 
will be open public prosecutions. There will be quick and severe 
punishment, and I think it is necessary that we get all of those 
responsible.
  Recently in a hearing, I was able to listen to Major General Tagabu, 
who underwent the investigation; and he found that there is no 
documented approval of these actions. Quite the opposite. Everything 
that is documented within the Department of Defense says just the 
opposite. The Geneva rules and conventions will be followed. Proper 
procedures of handling prisoners will be followed. But yet in that 
prison, and it is an isolated case, there was a lack of training, there 
was lack of supervision, there was poor discipline among the troops; 
and the result was what we have seen in the media recently, including 
photos and videotapes that are available. But this situation will be 
corrected, and there is no coverup.
  I think there is a silver lining in this dark cloud, though, that has 
been surrounding Iraq. The 130,000-plus troops that are in Iraq have 
been doing exemplary work. They have been carrying out their duty with 
great respect to the Iraqi people, and they have focused on the enemies 
of those people who hate democracy in the Middle East. They have done 
their job without shame, and they have conducted themselves in a 
professional manner. The leadership in Iraq has done an excellent job, 
as has the leadership in the Pentagon.
  It is probably likely that the Secretary of Defense does not know how 
many traffic tickets were issued to members of the military this past 
week. There is a lot going on around the globe with approximately 3 
million Americans in uniform. But yet when this was discovered, he 
acted quickly and sternly and brought this to the forefront. I think 
Secretary Rumsfeld needs to continue in that position. He is the right 
man for this time. He is the right man for the job. We need his clear 
thinking and his firm leadership.
  Now I would like to move on to careers for the 21st century, but I 
want to go into a little bit of history before we get into some 
specifics about how we are going to bring jobs back into America. Our 
economy has been suffering lately. In 1999, we suffered a tech bust, 
and we saw the stock market drop $7 trillion in value and money came 
out of our economy. In November of 2000, it was the technical start of 
our recession, which was one of the shortest recessions in history.
  But then on September 11, 2001, terrorists attacked America, and they 
plunged our economy into a deeper recession. But then we responded here 
in Washington, D.C. with tax relief. People did one of three things 
when they got a little extra money in their pocket. They either spent 
that money, which was a demand for goods and it is helping our economy 
respond; or they saved that money, which allowed money available for 
home mortgages, and we have seen one of the biggest expansions in the 
home market in recent history; or they invested it.
  When that money was invested, corporations have then taken that money 
and built new plants and now are hiring people. In fact, in the month 
of April, jobs increased by 288,000. Over the last 2 months, there has 
been an increase of 600,000 jobs. Since last September, there has been 
an increase of 1.1 million jobs to our economy. In fact, today there 
are more Americans working than ever before in the history of our 
Nation. Today, according to the Department of Commerce and Dr. Kathleen 
Cooper, who is responsible for the 7,000 employees that collect this 
data, she tells us that today there are more Americans working than 
ever before in the history of our Nation.
  But we can do better. What we want in America is high-quality, high-
paying jobs; and here is how we are going to get there. One of the 
things that I found out when I was talking to local manufacturers in 
the Wichita area is that it is not about wages. The problem we are 
having with bringing jobs back to America is not about wages. In fact, 
the CEO of Raytheon Corporation in Wichita, Kansas told me that after 
he was working on an attempt to hold our wire harness manufacturing 
jobs for Raytheon in Wichita, Kansas, he worked with the union that 
came up with the best solution possible. He finally came to the 
conclusion that if his wages were zero, he would still have to do 
something about the excessive cost that he is facing.
  Today, I met with a CEO of Converge Corporation. He told me that if 
he was going to build a building in America or build a building in the 
Philippines or in India, the costs are about the same. He convinced me 
that what we need to do to control costs and bring jobs in America is 
not about overhead.

[[Page H2892]]

  So it is not about wages. It is not about overhead. It is about costs 
that are out of control for the CEOs, for the people who keep and 
create jobs here in America.

                              {time}  2030

  Now, what are these costs? Where do they come from? Well, over the 
last generation, Congress, with good intentions, has passed legislation 
that has ended up with disastrous results.
  The results have been that we have increased costs that cannot be 
controlled by the people who keep and create jobs, by the employers, by 
small business employers, by large corporations. Because it is things 
that are controlled by Congress. The CEOs and the small businessmen and 
the entrepreneurs and those who hire people cannot have a vote. The 
votes occur right on the floor of the House of Representatives.
  Well, it is time that we change that environment. We have divided 
these costs into eight separate issues, and this week we started the 
first of 8 weeks to deal with these costs so we can bring back jobs 
into America. The eight issues are health care security; bureaucratic 
red tape termination; lifelong learning; trade fairness and 
opportunity; tax relief and simplification; energy self-sufficiency and 
security; research and development; and ending lawsuit abuse and 
litigation management.
  Health care security we will come back to, because that is the issue 
we are dealing with this week. But let me give you a little snippet of 
what we are going to deal with in weeks to come.
  Next week we will be dealing with bureaucratic red tape termination. 
Over the last generation, Congress has put many agencies in place that 
have forced continuation of an increase in paperwork to be submitted, 
and it has become unrealistic, impractical, and an unnecessary 
environment that includes OSHA mandates; that is, Occupational Safety 
and Health Agency, OSHA mandates, and they are driving our industries 
and small businesses and health care systems to a grinding halt.
  According to the National Association of Manufacturers, 12 percent of 
the cost of any product made in America is dealing with bureaucratic 
red tape.
  Energy cost, we wonder why we have $2 gasoline today. Well, our 
bureaucratic red tape has imposed regulations that cause our limited 
oil manufacturers to try to make boutique gasolines that are being 
shifted through limited pipelines, so we come up with temporary 
shortages. This week we have $1.95 gas in Wichita, Kansas. So we have 
to deal with the bureaucratic red tape.
  Following that, we are going to deal with lifelong learning. We are 
going to talk about job training and retraining so that we can have a 
highly skilled workforce. Now, our public school system has given 
generations of Americans the tools to pursue their dreams, and it can 
certainly help prepare boys and girls for the demands of a new century.
  But we must focus on those areas that are going to be in demand for 
us to stay in the lead. We must concentrate on science and engineering 
careers. Our bachelor programs and the production rates of scientists 
and engineers are among the lowest in the world today in America, and 
we must change that.
  The next issue we are going to deal with is trade, fairness, and 
opportunity. We need to have a fair deal in the world market. We need 
to make sure that our exports are treated the same as everyone else 
treats exports. We should have equalizing tax rates. We should ensure 
balanced tariffs, and we should prevent currency manipulation. And we 
have to stop other countries from targeting certain industries here in 
America.
  One example in Wichita, Kansas, is a company that builds handtrucks. 
Right now we are encouraging the Commerce Department to take up with 
the nation of China their attempt to try to force out handtruck 
manufacturers in America by flooding the market with under-cost 
handtrucks.
  The same is with auto lift equipment, that equipment that lifts up 
automobiles so it can be worked on in gas stations and auto repair 
shops, that is being targeted by China as well. That needs to be 
corrected.
  The next issue we are going to deal with is tax relief and 
simplification. Right now we do not have a fair playing field for 
American industries. Our tax costs end up buried in our products and it 
drives up the cost of our products, and there is a way we can pull out 
some of those costs.
  We also need to encourage the right incentives, like accelerated 
depreciation. That concept of accelerated depreciation will in fact get 
more products built and sold within America and it will help bring jobs 
back to America.
  But we need equity in our Tax Code. We ought to look at something 
like the fair tax that is being proposed by the gentleman from Georgia 
(Mr. Linder). It is a national sales tax that would give us great trade 
advantages. We would eliminate income taxes. When we move a car or 
something built in America overseas, that tax would stop at the border 
and we would make ourselves 22 to 25 percent more competitive.
  The week following that, we are going to deal with energy self-
sufficiency and security. We are going to talk about why we have $2 
gas. We are going to talk about stabilizing our energy system. We are 
going to talk about creating 700,000 jobs in America and strengthening 
our businesses.
  Following that we are going to deal with research and development. 
America has always been in the lead. It has a history of attracting the 
brightest minds in the world and creating some of the best concepts and 
ideas. But we are seeing a reduction in the number of papers submitted 
about research. We are seeing less money being available for research 
and development in America, and we need to change that around by 
providing incentives so we can apply knowledge into the public market 
and disseminate the technology that we develop.
  The last week, the eighth week, we are going to deal with ending 
lawsuit abuse and litigation management. We have become a litigious 
society.
  Our Nation was built on justice and our courts were structured to 
protect Americans, but that objective has become warped over the years. 
It has warped to the point where our legal system actually attacks our 
citizens and our way of life.
  We have come to the point where the United States Congress has had to 
step in and prevent food companies from being sued, and distributors 
and restaurants from being sued, so that they are not liable for 
somebody eating too many cheeseburgers. It is amazing that we have come 
to this point, but litigation has turned against us and turned against 
our economy. It has driven up costs and it has driven jobs overseas.
  If we could make some simple changes, a drastic change would be loser 
pays. It is the system that is prevalent in Europe today. They do not 
have the same high cost of litigation we have in America. Loser pays 
would be the obvious solution. If that is not achievable, then we ought 
to outlaw frivolous lawsuits and return the court's attention to 
upholding the laws of the land.
  One commonsense change that is part of our history is the statute of 
repose that was put in place in 1994 by Congress. The result in the 
aircraft industry, what it did basically was limit liability for 
single-engine aircraft to 18 years. In other words you could not sue 
them for design flaws after 18 years. For heavy jets it was 23 years. 
You could not sue the manufacturers for design flaws after 23 years. I 
mean, if an airplane can fly for 18 years, you would think all the 
design flaws would be out of it. I do.
  But anyway, the statute of repose created 4,000 jobs in south central 
Kansas. It increased the working population of aerospace manufacturing 
in that area by 15 percent, and it restarted a single-engine production 
line in Independence, Kansas. That same concept can be applied to other 
manufacturing in America, and it can see a parallel increase in jobs.
  So, let us go back to health care security, the issue we are dealing 
with this week. I have got some charts that I think illustrate very 
closely the point we are dealing with.
  In this first chart, we have a lady standing at the door and we have 
a stork delivering a pizza. He says, ``I used to deliver babies, but 
the insurance got too expensive.'' So he can no longer deliver babies 
anymore, he is delivering pizza.

[[Page H2893]]

  This chart shows the States in America where a medical liability 
crisis exists, sort of a national view. The white States are the six 
States that have taken care of their medical malpractice laws and are 
currently in a pretty good situation. The 19 States in trouble are the 
ones in red. That is where health care costs have dramatically gotten 
out of control.
  Here is a good example between a yellow State, which is showing some 
problem signs but not there yet, and a red State. We have Kansas, where 
I am from, the Fourth District of Kansas, and then we have Missouri 
right next door, a red State, or a State in crisis.
  In that State, in Kansas City, where we have Kansas City, Missouri, 
and Kansas City, Kansas, the physicians in Kansas City, Missouri, had a 
white-coat flight day, where they walked across the State line to 
emphasize the point that if you do not deal with medical liability 
costs, you are going to lose physicians. And physicians have been 
migrating, closing their offices in Kansas City, Missouri, and opening 
them up in Overland Park and other places on the Kansas side where they 
have better protection for the liability crisis in medical malpractice.
  Time magazine, they emphasized the problem in one of their issues. It 
shows a physician's white coat with a tie, and no one inside the shirt 
or the jacket. It says, ``The doctor is out. Why so many patients are 
losing their doctors to the rising cost of malpractice.''
  It gives how much it costs. For a neurosurgeon, the annual cost for 
medical malpractice is $71,200. How many surgeries does he have to 
perform just to pick up the cost of his insurance? For OB-GYN, the 
average is $56,546. How many babies have to be delivered just to pay 
the liability insurance? Emergency physicians, $53,500; orthopedic 
surgeon, $38,000; general surgeon, $36,354. It has become a crisis in 
America, and what we are seeing, because that crisis is signs like this 
where at Phoenix Memorial Hospital the emergency room was closed.

  It has also has found its way into our manufacturing process, and, 
again, it is part of the problem that is driving jobs overseas. You 
know, in America today, we have seen some jobs come in, in-sourcing 
jobs. For example, BMW is now manufacturing automobiles in America and 
exporting them to Germany. Honda builds automobiles here; Toyota, 
Mazda, a lot of other companies build cars, like GM, Ford and Saturn. 
But this is a typical, average automobile in America.
  Well, how much of that car does it take to cover the cost of health 
care for the auto manufacturers? Again, this is just a typical auto 
manufacturer.
  If you look at the cost, the cost buried into the cost of every 
automobile is about $1,300 on an average and up. Thirteen hundred 
dollars. Now, that is the cost of the wheels and the tires and the 
frame of the automobile. So, this much of an automobile showed in the 
lower left-hand corner, right-hand corner on your television screen, to 
those here in the House floor, that frame which is the outside of the 
car and the wheels and the tires, that is the costs that are buried 
into health care.
  If you extracted the health care costs, you would have the frame left 
over with the motor and the undercarriage and the seats and the 
dashboard and all of that, but you would not have the outside of the 
car and you would not have the tires. It is an expensive proposition to 
cover the cost of health care. And that is part of the reason why it 
has been excluded, or it has been driving up costs and driving jobs 
overseas.
  The Kansas Hospital Association tells me that if we cannot revise 
some of the problems they are having with paperwork, today the costs 
they are absorbing are the equivalent of what they provide in health 
care. In other words, for every hour of health care they provide, it 
requires an hour of paperwork to comply with all these health care 
burdens that have been placed on them.
  We have also been seeing a lot of escalating jury awards that have 
been very difficult in providing, and we talked about that with the 
Time magazine article. It has required a lot of additional costs for 
physicians, and that has increased the cost of health care. And there 
has been very little means for us to control those costs.
  The problems have been, financially, percentage-wise they have 
increased just in 2003 by 12 percent or more. That is the fifth 
consecutive year of double-digit increases, and it has doubled the 
health care costs for employers since 1999.
  By decreasing these costs, we could see an increase in jobs in 
America. With each percentage point rise in health care insurance 
costs, it increases the number of uninsured people in America by 
300,000 people, according to the Congressional Budget Office. That 
means that if we can hold down costs, we will see less uninsured people 
in America.
  Medical liability insurance premiums have increased 505 percent since 
1976, and that has driven many doctors out of the profession, closing 
some specialty practices in entire regions and placing an unnecessary 
financial burden on the Nation and its employers.
  The average jury award now is $3.5 million, which is up by more than 
70 percent since 1995. The increasing cost of insuring doctors against 
petty lawsuits is severely reducing the quality and access of America's 
top-rate health care.
  We have got a lot of problems to deal with here. One of the 
statistics I wanted to bring out here is the National Association of 
Manufacturers. They have calculated the benefit it costs for American 
companies, and it puts us at a 5.5 percent disadvantage compared to our 
nine largest trading partners.
  Not only is the United States spending more on health care annually, 
but 7.7 percent of our gross domestic product goes into health care 
from our private sector. That is effectively matched by the public 
sector, so it is now 14 percent of our gross domestic product.
  We have been blessed with the best health care system. We must make 
it affordable and available to all of us.
  So we have come up with three specific pieces of legislation this 
week. I have joining me this evening the gentleman from Minnesota (Mr. 
Kennedy), and he is going to talk to us about his view of the issues 
that we are facing to make health care more affordable and help us to 
bring jobs back.
  I yield to the gentleman from Minnesota.

                              {time}  2045

  Mr. KENNEDY of Minnesota. Mr. Speaker, I thank the gentleman from 
Kansas; and I thank him for his passion for keeping jobs here in 
America, for growing jobs in America, for understanding what it takes 
to have that happen.
  As I go around my district and talk to businesses that are growing 
those jobs, health care costs are one of the top issues that they talk 
about to us. The gentleman has hit right on many of the key issues of 
medical malpractice driving doctors out of practice, getting them to do 
what they would tell you is unnecessary practices, just to make sure 
that they are covered in case something happens. We are going to get 
into talking about health savings accounts and flexible savings 
accounts and how we can really help individuals better control costs, 
and how association health plans can help associations of businesses 
that do not really have a good program available to them provide that 
to their many, many employees.
  Mr. Speaker, there are two different ways that people think about how 
do we control costs long term. Some would suggest that we need to move 
towards a single-payer plan where one government entity is paying all 
of the health care costs across the country. We know what that looks 
like. That looks like government rationing. That looks like standing in 
a queue and waiting forever to get a basic procedure. We see that up in 
Canada. Canadians come down here to America to get their health care 
because they know what that looks like.
  What we are talking about here is empowering individuals, putting 
individuals and their relationship with their doctor in charge of their 
health care, having them control the decision, having them have the say 
and the knowledge and the ultimate give-and-take on how to move 
forward. I look forward to talking about how each of the things we are 
talking about here really addresses that issue.
  Mr. TIAHRT. Mr. Speaker, if the gentleman would continue to 
contribute

[[Page H2894]]

here, the gentleman is from Minnesota, up there bordering Canada. I 
have heard reports from our northern cities like Seattle, Minneapolis, 
Detroit, Buffalo, that we see an influx of Canadians coming in to get 
the health care coverage that has been denied them in Canada because 
their socialized health care system is rationed. They have to wait too 
long for procedures, or that procedure simply is not available because 
of their age or weight restrictions.
  Has the gentleman noticed that occurring in Minnesota?
  Mr. KENNEDY of Minnesota. Mr. Speaker, that is absolutely the case. 
Health care will be allocated by some means. If it is totally free, 
totally available in a single-payer plan, then the government will come 
up with restrictions. We have too much today, even in this country, of 
government deciding to ration what they are going to pay for health 
care, ration the procedures, and having businesses make too many of 
those decisions.
  One of the most beautiful things that we have done to advance health 
care empowerment of individuals is the health savings accounts that we 
passed as part of the Medicare reform last year. What this does is if 
you have a high deductible plan, a minimum of $1,000 per person, $2,000 
per couple, it can be up to over $2,500 per person, $5,000 per couple, 
you can put that amount away, tax-free, into an account, use it for 
health expenditures tax-free. If you do not use it, you can roll it 
over, earn interest on it tax-free, and build up a nest egg that you 
can use in your senior years. But what this means is that rather than 
some impersonal party getting the bill that you never see for your 
health care costs, you can know what it costs, shop for the best price, 
and make decisions.
  The best example I have is the young woman that helps me in my office 
on health care matters said that she once twisted her knee, and they 
had an MRI done. That MRI costs $1,500, and they found nothing. And she 
said, you know, if I had a health savings account and that was my 
$1,500 being spent, I might have had a simple x-ray done; and if 
nothing was broken, I would walk on it for a week before I decided I 
was going to spend another $1,500.
  It is those types of decisions made over and over again that will 
affect health care costs; and we have seen when these types of programs 
have been put in place in businesses, they have dramatically reduced 
costs while, at the same time, they are giving individuals better care 
and better control over their care.
  Mr. TIAHRT. Mr. Speaker, I think that the gentleman would agree that 
we need to have more transparency in the cost of health care so that 
consumers can make better decisions; also, so that physicians can make 
better decisions.
  One of the gentlemen that I spoke with is a physician who has retired 
from running a surgical group. He said when he was just a surgeon, he 
would order a lot of tests because he thought they were good data 
points for him to sort of mull over and make a decision, and he gave me 
the example of an x-ray and an MRI. He said, quite often, you need one 
or the other and occasionally, you need both; but for most information, 
especially in his type of work, he thought that an MRI is the most 
productive for him, but on occasions, x-rays. He said that it was very 
difficult for him to determine where these costs were going until he 
started looking down as the manager of this surgical group and saying, 
what are driving my costs? He realized that all his doctors did the 
same thing that he used to do. They would order every possible test as 
data points whether they were necessary or not, and that transparency 
for him made him tighten up his procedures and lower the costs of 
health care. I think if consumers had good, clear transparency in the 
costs that were involved, they also would make good decisions, and 
health savings accounts would help consumers have more control over 
their health care.
  Before we go on to these three bills that we are going to deal with 
this week as part of this Health Care Security Act, I wanted to mention 
my firsthand experience and how it relates to why I think socialized 
medicine or a single-paid plan would not be right for this country, 
because it does end up in the rationing of health care.
  My father is 85 years old. I am very proud of him. He is a World War 
II veteran. He served in Heiwajima during World War II. A year ago 
January he had trouble with his heart and went in for open heart 
surgery. It was a difficult month. He spent 3 weeks in the hospital. It 
was touch-and-go for a couple of weeks. We worried about it a great 
deal. But he came out very strong, and we still have him today. He is 
very active, and he travels still frequently and is a productive member 
of our society. But he would not have received that health care 
treatment had he lived in Canada. He would have been above the age of 
eligibility for open heart surgery. Even if he was within the age 
requirements, right now the wait is 6 to 8 months for open heart 
surgery in Canada. Can my colleague imagine somebody who has had a 
borderline heart condition or even a heart attack and they say, well, 
yes, we know you had a heart attack and if you can hold on for another 
6 months, we will get you right in.
  That is why they have people crossing the border and coming to 
America to get health care, because it is the only place that it can be 
provided. And because of that, because of our excellent health care 
system we have today, I still have my father. I get to talk with him on 
the phone, I get to see him on holidays, and I get to gain the wisdom 
that he is passing on to me and on to my children. It is because of our 
health care system that I still have him.
  Mr. KENNEDY of Minnesota. Mr. Speaker, I can tell my colleague that 
the health savings accounts let your father and your family be in 
control.
  If a young person starts out and they are putting away the maximum 
amount you can into a health savings account and they live a healthy 
life and they spend their money frugally for health care costs, they 
can build up a pretty significant nest egg by the time they get to be 
your father's age. When you talk to people approaching their senior 
years, making sure they can have that control over their medical life 
and make the medical decisions that they want to are vitally important 
to them.
  That is what I think these health savings accounts will do, 
ultimately. If they can build up $100,000 or $200,000 of a nest egg 
over a lifetime, they can make the decisions and have the resources for 
whatever the health care plan is saying to get that kind of treatment. 
If they have to go into some type of senior care rather than being 
forced to spend their way to poverty before we do anything in terms of 
long-term care, they can work with their children and say, hey, listen, 
I have this nest egg, so that you can buy the services I need, buy home 
health care and take care of me, and here is the resources for it.

  So I think the flexibility, combined with the market-based services 
availability we have here in America, is vitally important.
  I would also say, if you look to controlling costs, which is what we 
are talking about here with growing jobs and getting these costs under 
control, if you look at the growth in costs that we have experienced, 
whether you are a public or private plan, they are straight up. But if 
you look at what it is for cosmetic surgery, which is about the most 
personal and invasive surgery there is, those costs are almost flat.
  Now, why are they flat? They are flat because the market is involved. 
If you look at Lasik eye surgery, the costs are down, because you have 
both the combination of the market and technology bringing that down. 
That makes everyone's costs more affordable. That makes our jobs more 
competitive here in America, and it makes whatever surgery you or your 
father are going to be having later on in life something that is more 
likely to be within their means. It is a great move forward, and a step 
that we are building on with the steps we are taking this week.
  Mr. TIAHRT. Mr. Speaker, the gentleman makes a very good point about 
where the free market is involved we see no increase in health care 
costs. Dr. Greg Ganske, who was elected in 1994 to the United States 
House of Representatives from Iowa and now is back in private practice, 
told one of our other classmates from the class of the 104th Congress 
that right now, when somebody has selective surgery, and he is a 
plastic surgeon, when they have selective surgery, they call around to 
get

[[Page H2895]]

three or four quotes. He said, we all know in Des Moines, Iowa, who is 
charging what because we hear it from our customers. And because of 
that, the growth in costs for plastic surgery has been flat over the 
years. If you compare that to the health care costs that are managed by 
these big insurance companies, by Medicare, by Medicaid, which is 
managed by the government, then we see a continual increase in costs.
  So we have a situation where health care costs that are available for 
small businesses, for example, are going up 12 percent per year for the 
last 6 years. They have doubled since 1999, and it is a continuous 
increase, much faster than the rate of inflation; and yet where the 
free market is involved, then we see a reduction in the growth and 
sometimes it is very flat.
  Mr. KENNEDY of Minnesota. Mr. Speaker, we have also added other 
things in the Medicare bill that we just passed to get us going in this 
direction. We have strong incentives and encouragement for health care 
providers to do electronic prescriptions so that we not only have 
quality because we cannot always read the doctor's signature, but we 
have the ability to have a travelocity.com approach to getting that 
prescription. We also have strong incentives and requirements for 
increased quality reporting; and what we ultimately need to get to is, 
like you would with any other kind of product you are buying, where you 
can see it, call it up on the Internet: I am looking for this type of 
procedure, here is the ranking of the providers in my area, here is 
what each of them is costing, here is what the quality ratings are on 
them. Because if I were to look for this podium and want to buy a 
podium, the market offers me an endless variety of podiums and sizes, 
colors, styles, shapes, materials in every single product category 
imaginable except where we try to keep the market out, such as in 
education, in transportation, frankly, and in health care.
  We have got to take away the barriers to providing quality, 
affordable services to our people, and that is exactly what we have 
done with the reforms that were part of the Medicare prescription drug 
bill. It is exactly what we are talking about in the additional reforms 
we are going to be passing this week in the House.
  Mr. TIAHRT. Mr. Speaker, to illustrate the transparency that we have 
been talking about and what impact it has and the free market on 
prices, we have some places where you can buy drugs over the Internet 
and elsewhere and the prices they were on selected prescriptions.
  This chart that I am holding in my hand is based on prices as of May 
4. We can see some of these red lines very clearly where they extend 
out here for about $1,400 per year is the cost of those prescriptions.
  After 1 week of having transparency and visibility in the 
marketplace, the shift is very dramatic. The same set of companies, 
Walgreen, Costco.com, drugstore.com, et cetera, what the free market 
has done is reduced the prices on the top line, which is the Primary 
Care Alliance, the costs were nearly $1,400. Now, because of 
transparency in the free market system, it is down to $1,000, a 40 
percent reduction. We can see all of the costs are now coming into 
line, and that is the impact of transparency and the impact of the free 
market system.
  I think that what we can say safely is that when we have the ability 
for people to make market decisions, they will make good decisions.

                              {time}  2100

  They will bring costs down. In this case, it is prescription drugs, 
but also it occurs in health care costs. I think that is very 
important.
  Mr. KENNEDY of Minnesota. Mr. Speaker, I would just compare this to 
how you get your auto insurance. When you buy auto insurance, your auto 
insurance does not cover filling up with gas. It does not cover the oil 
change. It does not cover the car wash. It does not cover a whole lot 
of things.
  It covers when you have a major accident and you have a major 
expenditure, and because of that car insurance, although when you have 
four teenagers like myself it can be pretty steep, it still has not had 
the type of increases that we have seen in health care.
  We need to have a similar type of approach with what the health 
savings accounts provide which is basically saying we have catastrophic 
coverage. You and your employer, either one of you, or your family 
members, can contribute to the health savings account. You are going to 
spend those dollars. You are going to shop for the cheapest place for 
nonemergency service for health care, just like you would shop for the 
cheapest place for gas which, oh, by the way, if we got this energy 
bill passed, as my colleague mentioned, would be lower, and this is the 
type of thing that we need do.
  I would just say that one of the things we are doing this week is 
loosening up the restrictions on flexible savings accounts, and 
flexible savings accounts are similar to a health savings account, but 
they are employer offered. They allow cafeteria plans, put in their 
pretax, but they are not really used because it is a use it or lose it.
  We have allowed the rollover option in health savings accounts. Why 
was it use it or lose it? It is use it or lose it because those that 
want to have a single-payer government plan know how powerful this 
approach can be, wanted to limit that. So we are allowing people that 
have flexible savings accounts offered through their employer. If they 
do not use it all, be able to roll over $500 to the next year or take 
$500 out and invest it in their own personal health savings account 
that they can carry with them wherever they go, and given that the 
average 32-year-old has been at seven or nine different employers in 
their life, having that portable plan that is with you always should be 
a great comfort and a great benefit to them.
  Mr. TIAHRT. We have under our Health Security Act this week three 
phases. It is a 3-point plan.
  The first part of the plan is called the Small Business Health 
Fairness Act. It allows for consolidated risk pools. The House plan 
allows small businesses to create these association health care plans, 
and it gives them the opportunity to join together, through existing 
trade associations, to purchase health care insurance for their workers 
at a lower cost, and that is because 60 percent of the nearly 44 
million uninsured Americans are employed at small businesses today and/
or they are dependent on someone who is employed by one of the small 
businesses.
  By allowing the creation of association health plans, we will 
significantly decrease the number of uninsured in America. The plan 
establishes eligibility requirements so that all AHPs, or association 
health plans, are required to offer fully insured or self-insured 
benefits certified by the U.S. Department of Labor. It encourages broad 
participation and coverage by prohibiting discrimination against any 
kind of certain high-risk individual.
  It increases the bargaining power. Small businesses will see 
increased bargaining power with health care providers, more freedom 
from costly State-mandated packages and lower overhead costs by as much 
as 30 percent.
  Insurers selling directly to small employers typically incur 
administrative costs of 20 to 25 percent. Under the plan that the 
Republicans have here in the House, AHPs will save small businesses an 
average of 13 percent on their employee health care costs.
  AHPs also cover specific diseases, maternal and newborn 
hospitalization, and mental health issues. It requires that AHPs be 
financially responsible and have strong reserves, strong enough to fund 
any potential costs and other obligations.
  So, one of the first things we are dealing with the short version is 
AHPs as they are known by, but really, it is the Small Business Health 
Fairness Act.
  Mr. KENNEDY of Minnesota. These AHPs, or association health plans, 
are a critical link in lowering the uninsured. Just repeating what you 
said, 60 percent of the uninsured are employed by companies that really 
have a hard time getting availability of health insurance. By the time 
you sell to that small company, it is, as you mentioned, a very high 
overhead cost.
  So many of these would want to pool together, provide a plan that is 
tailored for the type of employees they have, and lower their cost in a 
bargaining pool.
  Who would these associations be? These associations are like we just 
had

[[Page H2896]]

the Realtors in visiting us today. The major issue they spoke to me 
about, saying Realtors are a lot of times independent contractors with 
some umbrella firm. They need to have negotiated lower prices that can 
combine this with the health savings accounts very nicely, but they 
need it to be able to offer insurance to Realtors.
  Look at restaurants that have a wide variety of full-time and part-
time employees. They could tailor a plan specifically for those, again 
meshed with a health savings account.
  So these are the types of plans that are going to really help to let 
more small businesses offer insurance.
  One of the things that is important to point out is I know the 
gentleman from Kansas represents a rural State and has significant 
parts of his district which are rural, just as I have. A lot of times 
in those rural areas, they do not really have options. In our State in 
Minneapolis-St. Paul, there are multiple health plans available, and 
there are three or four or five, or significant options and several 
other smaller options; but if we get out into small-town U.S.A, you do 
not have a lot of options.

  This really has even a stronger benefit for those small businesses 
operating in the rural areas that can combine themselves with an 
association health plan that goes across State borders, pools 
businesses of character. And it just does not need to be businesses; 
this could be a religious organization, a nonprofit organization, a 
community service organization. The Lion's Club, of which I belong, 
could do an association health plan for Lion's Club members.
  It opens up the amount of people participating, thinking about how 
can we offer services to those with a commonality. Having more options 
is exactly what we need if we are going to really grab control of these 
health care costs and reduce the number of people that are uninsured.
  Mr. TIAHRT. Mr. Speaker, the second point of our plan and the way we 
are going to help reduce health care costs in America is called 
flexible spending accounts. That allows an employee to have some 
flexibility in his health care. It allows workers to direct their 
employers to deduct money from their paychecks to be placed in a 
flexible spending account. It is tax free, and it is to pay for health 
care expenses that they may incur during the year.
  Employers are not restricted based on the size of their business on 
whether or not they offer FSAs as their choice interpreted so that 
employees are restricted by whether or not their employer offers the 
option. There are no health insurance requirements for the workers to 
open up an FSA. There is no minimum or maximum contribution limits. 
Money can be drawn from an FSA to pay most medical expenses. That money 
may not be used for long-term care or health insurance premiums, but it 
is a tax benefit to the employees. Workers could save on their taxes 
because the amount committed to an FSA is subtracted from their wages 
before taxes are applied.
  There are long-term coverage advantages. Thirty-seven million 
employees in America have access to FSAs, but few take advantage of 
them today because they have a use-it-or-lose-it rule. Currently, if 
you do not use the money that an employee puts into an FSA, that money 
is forfeited to an employer, and it is a huge disadvantage or two 
disadvantages. Quite often we will see employees will not get into it 
because of that.
  Number two, they will get to the end of the year and they will see 
that money going back to the employer so they will have selective 
surgeries or they will have botox or something they do not really need, 
and again, it is driving up health care costs.
  But under the plan, up to $500 of unused funds in this new plan can 
be carried forward each year on an FSA and allow them to continue to 
invest in their future. If they do not use it, it is available for them 
in the future. Alternatively, up to $500 of unused funds can be rolled 
over to a health savings account for eligible individuals.
  So there are some real advantages to these FSAs. Because employees 
will have their money at stake, they will be more selective on the 
health care they receive. We will have less frivolous visits to 
emergency rooms or to physicians. I think people will start to use home 
remedies a little more. Right now, there is a tremendous amount of 
information on the Internet. All you have got to do is put in health 
care into some of the search engines on the Internet and you can find a 
lot of Internet Web sites that you can get information on. And I think 
people will start to use those to reduce their health care costs, save 
money, lower their taxes; and again, this is part of our plan to lower 
the cost of health care so we can attract jobs back into America.
  The last of the 3-point plan is medical liability reform. This 
includes a speedy resolution of claims. Instead of having health care 
claims drag on and on, there is a fair accountability. The plan waives 
the degree of fault so that a person with 1 percent of the blame is not 
forced to pay 100 percent of the damages. This component eliminates the 
incentives to look for deep pockets, making one party unfairly 
responsible for another party's negligence.
  This also has maximum patient recovery. It empowers the courts to 
maximize patient awards by ensuring that an unjust portion of the 
patient's recovery is not misdirected to his or her attorney. The plan 
prohibits attorneys from pocketing large percentages of an injured 
patient's award. The award is to go to the patient, not the attorney.
  Full compensation for patients' injuries are allowed. There are 
reasonable limits on punitive and noneconomic damages. There are 
flexibility for States that already have enacted damage caps. It 
respects those States' ability to enact these caps and enforce the 
damage caps.
  It also has experts predict significant positive change from the 
reform. The plan would decrease premiums for medical malpractice 
insurance by an average of 25 to 30 percent according to the 
Congressional Budget Office.
  The Joint Economic Committee study asserts that the number of 
Americans with health insurance would increase by 3.9 million if 
medical liability reform is passed. Specifically, the plan places 
reasonable limits on malpractice that would save from $60 to $100 
billion each year and that would not have to be buried back into the 
rates.
  It would allow American business to expand their operations through 
hiring, and it enacts sensible liability reform that would save 
American taxpayers at least $30 billion annually by reducing the 
Federal health care spending.
  I showed you the map earlier of the States. The white States, again, 
who are currently okay on this map, and California is one of the white 
States. They have enacted medical liability reform. They are a great 
model for it. The Nation's medical liability premiums have increased by 
505 percent since 1976. California's has only increased by 167 percent 
since it passed its medical malpractice reforms in 1975.
  An OB-GYN in California pays about $57 annually for liability 
insurance while OB-GYNs in the crisis States, like Pennsylvania shown 
in the red over here, and Florida and Ohio, all in red, they pay about 
$100,000 a year annually.
  What it means to be a medical liability crisis State, these 19 States 
that are depicted in red, in Pennsylvania, Philadelphia's Methodist 
Hospital announced it would stop delivering babies and discontinue its 
prenatal program for low-income women.
  In Florida, women are facing waiting lists for 4 months before being 
able to get an appointment for a mammogram because at least six 
mammogram centers in south Florida alone have stopped offering the 
procedure as a result of increased medical liability insurance 
premiums. This trend is troubling. There are a growing number of older 
people and less and less people are being provided with mammograms, 
according to Jolean McPherson, a Florida spokeswoman for the American 
Cancer Society.
  In Arizona, a baby was born on the side of the road after a mother 
had passed her community hospital where the insurance crisis had closed 
the maternity ward.
  In Nevada, more than 30 Las Vegas obstetricians have closed their 
practices in recent months, leaving the city with about 85 
obstetricians to deliver more than 23,000 babies in the next year. 
Kathryn Moore, the director of

[[Page H2897]]

the State Legislation for the American College of Obstetricians and 
Gynecologists said, ``If I was a woman planning a family in Las Vegas, 
I'd be very concerned. I would certainly think twice about starting a 
family.''
  Well, we want families to start in Las Vegas, and we think it is 
unfair that 85 obstetricians are going to have to handle approximately 
23,000 births next year.
  We need to do something about that, and what we have passed tonight, 
as a matter of fact, in the House is medical liability reform, and it 
is the first step on the road to lowering health care costs and 
bringing jobs back into America.
  I think it is very clear that if you cannot support these three 
measures, you are turning your back on the people who want jobs in 
America, high-quality, high-paying jobs. The only way we are going to 
bring them back is lower health care costs. We cannot do it by 
socialized medicine. We know that does not work. We can do it by our 
Health Care Security Act, by lowering the costs, bringing jobs back 
into America.

                              {time}  2115

  Mr. KENNEDY of Minnesota. Mr. Speaker, I would also say to my 
colleague that, unfortunately, what we see here too much on this floor 
and what we hear is anger and complaining about health care costs going 
up, they are being harder for the average family to afford. We agree, 
but we do not hear very often, unfortunately, except with the great 
dialogue we have had here tonight, about what the solutions are. And I 
would like particularly my fellow Members from the other side of the 
aisle to talk about what their solutions are, talk about how you are 
going to control costs.
  The uninsured is a huge issue. Besides growing jobs, each one of 
these proposals reduces the level of the uninsured. This is really the 
most effective way for us to reduce the uninsured.
  I would also suggest one more piece in the puzzle, which includes my 
Fair Care Act, which I have introduced and am pleased to have 127 other 
Members joining me on. And if we think about it, right now, the 
uninsured can go into a hospital and get care; but it is through the 
most expensive vehicle possible, the emergency room, through the EMTALA 
law. We could provide for that service at one-fifth the cost in a 
community clinic, if we had an individual on some base level of 
insurance at least, and probably address the underlying problem of that 
cost much more efficiently, and let people live a healthier life by 
letting us also do a better job of controlling costs.
  Because what happens when an uninsured comes into a hospital and is 
not paying for it? It ultimately layers onto the premiums for the 
insured and increases their costs. As my friend from Kansas mentioned, 
when the cost goes up more on the insured, it creates a vicious, 
vicious cycle. My bill, to allow for a $1,000 credit per person, $500 
per child, up to $3,000 for a family, refundable tax credit so they can 
get that insurance, pay for that insurance policy directly, is another 
piece of this puzzle.
  And as we think about the uninsured side, we need to recognize that 
we have, just as we have in education, left too many of the 
disadvantaged behind. Thirty-five percent of Hispanic households are 
uninsured; 18 percent of African American households, with only 11 
percent of white. There is a disparity in who is hurting, and we need 
to address them.
  While we address the uninsured, we also get control of costs. By 
getting control of costs, we make American jobs more competitive, and 
we keep American jobs here. And I think it is also important as we look 
off on the horizon at how do we control the long-term deficit, how do 
we control the long-term liabilities that we have, the unfunded 
liabilities in Medicare and Medicaid are significant. The number one 
variable that will determine how we control those will be to help 
control health care costs.
  These measures that we have proposed, that we have talked about 
tonight will not just lower the uninsured, will not just grow jobs here 
in America, but will get long-term costs under control so we can 
control that deficit, which again will help make for a stronger economy 
now and in the future.
  So I thank my friend from Kansas for bringing this very important 
topic to the floor.
  Mr. TIAHRT. In summary, Mr. Speaker, we have over the last generation 
watched Congress continually raise barriers for us to keep and create 
jobs in America. We have found out by investigating this that we could 
develop these problems into eight categories, eight issues that we are 
going to deal with.
  The problem is not Benedict Arnold CEOs. They only have a couple of 
costs they can control, and that is wages and overhead. And the problem 
is not the wages, because most of them want to have high-quality 
employees they want to pay high wages to. They want to attract the best 
and the brightest. The problem is not overhead. We found out it costs 
the same to build a building in India, in the Philippines, or in 
America. It is Congress. The problem is in Congress and what we have 
done over the last generation to continually put barriers in the way 
for people to keep and create jobs.
  We have started with these eight issues. We are starting this week 
with health care security. We talked about the three plans that we are 
dealing with this week, including medical malpractice reform, 
association health plans, and what was the other one?
  Mr. KENNEDY of Minnesota. The flexible savings accounts and the 
ability to roll those over.
  Mr. TIAHRT. Flexible savings accounts, correct. Next week we are 
moving on to bureaucratic red tape termination, because we found out 
that the cost of complying with bureaucratic red tape in America is 
about 12 percent of every manufactured product. If we can cut that in 
half, we would be 5 percent more competitive.
  We are going to deal with life-long learning so that we have high-
skilled, high-trained workers. We need to get more science and 
technical and engineering graduates.
  Then we are going to deal with trade fairness and opportunity. We 
must have fairly applied trade agreements. We must open up new markets, 
but we have to overcome monetary manipulations by other countries and 
by unfair trade practices by other countries. And we are going to deal 
with that.
  Then we will move on to tax relief and simplification and figure a 
way to pull the cost of taxes that are buried into our products out of 
it so that we are more competitive.
  Then we will deal with energy self-sufficiency and security. We are 
going to present legislation that will create 700,000 jobs in America. 
We are going to deal with research and development so that we can 
continue to be innovative and bring new ideas to the world and more 
jobs to America.
  Then we are going to deal with ending lawsuit abuse and litigation so 
that we can lower the cost of liability insurance, limit liability so 
we can create new jobs, and, again, bring workers back into America.
  The lines are very clear. Congress over the last generation has 
created these barriers. The people who employ workers cannot vote on 
this. They cannot reduce these barriers. They cannot remove these 
barriers. Only the Members of Congress can remove these barriers, and 
so we must deal with them.
  This is the debate we should be having today. This is the debate we 
need to have so that we can remove the barriers and bring workers back 
into America, bring jobs back into America, high-quality, high-paying 
jobs. We call it ``Careers for the 21st Century'' because we want 
people to be able to pursue their dreams, pursue the career that they 
desire the most.
  So we are going to complete health care security this week and next 
week move on to bureaucratic red tape. And if you cannot support these 
issues, it is my firm belief that you cannot support bringing jobs back 
into America, because these are clearly the barriers to bringing jobs 
back. They are barriers faced by every small businessman I talk to. 
They are barriers faced by even the large employers. They know this is 
what is controlling their costs. They want to pay high wages and build 
buildings and have their plants here in America, but they cannot reduce 
these costs: health care security, bureaucratic red tape, life-long 
learning, trade fairness and opportunity, tax relief, energy self-
sufficiency, research and development, and ending lawsuit abuse.

[[Page H2898]]

  If we can overcome these barriers, we will bring jobs back into 
America. That is the plan the Republicans have in the House.
  Mr. Speaker, I want to thank the gentleman from Minnesota (Mr. 
Kennedy) for joining me this evening. I think we have covered some good 
territory. We have covered the topic, I think, very well, and next week 
we will move on to bureaucratic red tape.

                          ____________________