[Congressional Record Volume 150, Number 119 (Tuesday, September 28, 2004)]
[House]
[Pages H7718-H7724]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                MEDICARE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 2003, the gentleman from Ohio (Mr. Brown) is recognized for 
60 minutes as the designee of the minority leader.
  Mr. BROWN of Ohio. Madam Speaker, it is easy to understand why 
President Bush and the Republicans have had such a hard time selling 
the Medicare law to the American people. Their Medicare law has more 
than its fair share of dirty laundry, as we can see from this chart. 
Cost estimates hidden from Congress, the administration violated ethics 
laws, Members of Congress strong-armed to change their vote. We know 
this Medicare bill was passed in the middle of the night. The roll call 
was kept open an unprecedented 3 hours. One Member was literally bribed 
on the House floor, he claimed, the next day, or they attempted to 
bribe him on the House floor, a Republican leader attempting to bribe a 
Republican Member.
  Seventy-eight different drug cards with no guarantee. Breaking the 
deal on drug reimportation which the gentleman from Illinois (Mr. 
Emanuel) will talk about in a moment. And the crowning point was that 
Medicare Part B premiums increased a record, 39-year history of 
Medicare record of 17.4 percent.
  This bill had big problems from the start, from its passage, as I 
just pointed out, using threats and bullying to suppress an internal 
estimate, the middle-of-the-night vote, the bribery on the House floor. 
The administration then turned around, spending tens of millions of 
dollars on infomercial-style ads making Medicare almost look like an 
item for sale on the Home Shopping Network. That bad process, the 
middle-of-the-night, the bribery, the campaign contributions, the 
sleazy kind of tactics to get this bill passed, the expenditure of tax 
dollar money to sell a bad product to the American people, that whole 
process, that bad process resulted logically in a bad product.

                              {time}  2130

  The drug benefit offers a part-time response to a full-time problem, 
requiring year-round premium payments for drug coverage that ends in 
August. And the Medicare law is confusing, handing seniors a stack of 
discount cards and saying if they cannot figure this out, here is an 
800 number. The Medicare law does nothing to contain the skyrocketing 
cost of prescription drugs. Instead, instead, the Republicans and the 
President went out of their way to write the drug industry a blank 
check. No surprise there. This bill means $180 billion, with a ``b,'' 
in extra profits above and beyond what the drug companies' record 
profits already are, $180 billion in extra profits for this drug bill; 
and, again no surprise, to complete the circle, the drug companies have 
given President Bush and Republicans in Congress tens of millions of 
dollars for their campaign.
  We will hear more about these and other serious flaws in the Medicare 
law from the gentleman from New Jersey (Mr. Pallone) tonight, from the 
gentleman from Illinois (Mr. Emanuel), and from the gentleman from Ohio 
(Mr. Strickland).
  I want to get started by talking for a moment about the Bush Medicare 
premium hike. We heard about it. It was in the papers. Despite the Bush 
administration's efforts to keep it as quiet as possible, they released 
the information about the biggest Medicare hike in history, a 17.4 
percent premium hike.

[[Page H7719]]

They released it on the Friday before Labor Day, hoping people would 
not notice. But the biggest premium increase in Medicare history, they 
just cannot keep it quiet. So the news that Saturday was all about the 
Bush administration's plans, President Bush's plans to impose a 17.4 
percent Medicare premium increase. The Republican spin machine is 
nothing if were not tenacious; so faced with bad news, they did what 
they always do, they blame the Democrats or they blame someone else. In 
this case they tried to convince us that Democrats are really the 
reason the premium hike happened. The fact is Republicans control the 
House, they have for 10 years, the Republicans control the Senate, the 
Republicans have had the White House. During the Clinton years, 
premiums stayed almost even for the last 4 years of the Clinton years, 
the second term of the Clinton administration, and now they have jumped 
up.
  In fact, before the Bush Medicare bill became law, the nonpartisan 
Medicare trustees estimated the monthly premium increase for next year 
would be $2. After the Bush Medicare bill became law, the premium 
increase jumped to $11.60. That is per month. That is not much to a 
Member of Congress, but a senior citizen whose Social Security only 
went up 2, 2\1/4\, 2\1/2\ percent, when faced with a 17 percent 
increase, well over $100, that is a serious amount of money. Five times 
larger than the premium increase estimated before the Bush Medicare 
law.
  So where is that money? Where is that billions of dollars, the 17 
percent increase, the billions of dollars that seniors have to pay out 
of their pockets? Whose pockets is that money going into? Where does 
that money go?
  The fact is much of it is going into the pockets of Medicare 
insurance HMOs. The Medicare law creates a $23 billion slush fund that 
HMOs can use to lure seniors out of traditional Medicare into their 
private insurance plans. Seniors already spend 25 percent of their 
income on out-of-pocket health care costs. The Bush Medicare law hands 
them a giant increase in their Medicare premiums.
  HMO profits already this year have jumped 50 percent over last year. 
Now we are giving them this $23 billion. And here is how it works: Last 
March the government, taxpayers, gave the first $229 million payment to 
insurance company HMOs. In April, taxpayers gave another $229 million 
payment to insurance company HMOs. In May and June, all the way through 
this year and all the way through next year, $229 million every month 
from taxpayers to insurance company HMOs. But do my colleagues know 
something? Seniors do not get the prescription drug benefit until 2006. 
So $229 million for 22 straight months go from seniors through this 
premium increase and taxpayers directly into the pockets of insurance 
company HMOs before they even get a drug benefit.
  So it makes us wonder why. And the answer to the question why is 
insurance companies and drug companies wrote this Medicare bill, 
insurance companies and drug companies benefit from this Medicare bill, 
and the President and Republican leaders get major campaign 
contributions from the drug and insurance industry. It is all pretty 
simple. It is also corrupt. It is also outrageous. It is also morally 
reprehensible. And it is also something that we all need to think about 
when we make a decision this fall, come November 2.
  Mr. Speaker, I yield to the gentleman from Illinois (Mr. Emanuel), 
who has been a leader particularly in the reimportation issue. One of 
the most important things this Congress has failed to do; that is, 
getting the price of prescription drugs down.
  Mr. EMANUEL. Mr. Speaker, I thank the gentleman from Ohio for 
yielding to me.
  As he knows, the whole debate about prescription drugs was 
fundamentally about the price and affordability of those medications. 
What we all heard in our districts and different areas, at shopping 
malls, senior centers, and from people at their pharmacies, was that 
seniors could not afford the medications they needed. And the idea of a 
prescription drug benefit, when Medicare was first created, 
prescription drugs as a cost of a senior's health care budget was about 
10 percent. Today it is about 60 percent, and yet we did not cover it. 
And the whole concept here was to deal with the price and affordability 
of prescription drugs for our seniors. We had this historic 
opportunity.
  Pharmaceutical companies over the next 10 years, the length of this 
bill, are going to walk away with $140 billion in additional profit 
just from this legislation. And what do they get? No reimportation, 
which they did not want. No bulk negotiations, turning Medicare into 
one giant Sam's Club, negotiating prices like Sam's Club does for 
consumers, and they got weak provisions as it relies on generic 
medications coming to market to compete with name-brand drugs. 
Everything that had to do with price and affordability, pharmaceutical 
companies got what they wanted, check, check, check, and they got $140 
billion in additional profits.
  HMOs got an additional $130 billion worth of profit, and they too got 
what they needed most, which are bigger payments. But yet a GAO study 
showed on a demonstration project that HMOs and PPOs show no financial 
advantage to the taxpayers, no medical competition that was supposed to 
be. In fact, the beneficiaries get few advantages. That is the GAO 
report on this new benefit. What do they walk away with? A hundred and 
thirty billion dollars in taxpayer-supported additional profits.
  Last week in ``The Hill,'' our journal here in the Capitol, there was 
an article about a Republican lobbying firm that is paying $4,000, 
funded by pharmaceutical companies, per senior citizen. They can find 
who will speak positively about the pharmaceutical prescription drug 
benefit. A $4,000 bounty. We have a $10 million bounty on Osama bin 
Laden; so we are now going to add happy seniors to that group of people 
that Republicans cannot find.
  Mr. STRICKLAND. Mr. Speaker, will the gentleman yield?
  Mr. BROWN of Ohio. I yield to the gentleman from Ohio.
  Mr. STRICKLAND. Mr. Speaker, what I think I heard the gentleman say 
sounds almost unbelievable.
  Mr. EMANUEL. Mr. Speaker, does the gentleman want me to repeat it?
  Mr. STRICKLAND. If he would, Mr. Speaker, but what I think I heard 
him say was that the pharmaceutical companies are offering a senior 
citizen $4,000 if they will be willing to say something positive about 
this benefit?
  Mr. EMANUEL. Mr. Speaker, will the gentleman yield?
  Mr. BROWN of Ohio. I yield to the gentleman from Illinois.
  Mr. EMANUEL. Mr. Speaker, in ``The Hill'' article, our paper, a 
Republican lobbying firm who has Pharma as its client was offering a 
bounty of $4,000 per senior if that senior would come forward and say 
they are having a positive experience under the prescription drug 
benefit.
  Mr. BROWN of Ohio. Mr. Speaker, reclaiming my time, they would prefer 
that this senior not announce that they are getting the $4,000 from the 
drug companies when they say that, I would understand.
  Mr. EMANUEL. Right. But if the gentleman would continue to yield, Mr. 
Speaker, that was in the article. And my view is, I mean, it would be 
better if they gave a $4,000 prescription drug benefit. Maybe it would 
be much better if they just gave the benefit of $4,000. We would have 
accomplished what we set out to do.
  We introduced in a bipartisan fashion a concept of reimportation, 
allowing people to get access to the same name-brand drugs that they 
have in Canada, that we have here, that they have in the United 
Kingdom, in Ireland, Scotland, Amsterdam, France, Germany. All those 
medications that we get on our shelves they get for 40 to 50 percent 
cheaper than we get here. On my Web site, I have a Costco in my 
district. It is a big discount retailer. There is a Costco in Toronto. 
I list the ten drugs in the Costco versus the Costco in Toronto. The 
same store retailer, the same discounter, the same low prices. People 
save $1,200 if they go to the Costco in Toronto verses the Costco in 
Chicago for the same ten drugs.
  Reimportation brings competition to bear, and the pharmaceutical 
companies do not want price competition because they see the senior 
citizens, they see the taxpayers, as their piggybank to fund them. They 
use the American seniors and our taxpayers as their profit margin. 
People in Canada, their government is doing their job. They are

[[Page H7720]]

getting low prices. People in the United Kingdom and France and 
Germany, their government is representing their people. They are 
getting low prices. And we are getting the shaft and we have allowed 
it.
  And the amazing thing is that this is not an accident. This is by 
creation by the government to create artificially high prices to 
benefit the pharmaceutical companies.
  I have no problem with funding the research and development of new 
drugs. I have a problem when the taxpayer funds those drugs with 
taxpayer-paid dollars through the National Institutes of Health or the 
caps on research and development, a 50 percent write-off for R&D. And 
then I have a problem with turning around and saying to the same people 
who paid for that research that we are going to charge them twice as 
much as what the people in Canada and Europe get charged.
  If we brought competition, the principles of the free market, to the 
pharmaceutical products, we would have the same prices as Canada and 
Europe. Bring some competition. But what do we do? We have got a closed 
market. We have got artificially high prices, and we have got senior 
citizens and taxpayers being shafted. That is what this Medicare bill 
did.
  And let me say this: What is happening is not a coincidence. It was 
done by design. So do not walk up and say how did this happen? My 
colleagues do not think that the prescription drug companies and 
pharmaceutical companies pushing for a prescription drug bill did not 
know what they were getting when they got the $140 billion in 
additional profit and no restraints on pricing? My colleagues do not 
think the HMOs were spending the type of money they were spending on 
lobbyists and contributions to get $130 billion of extra profit and 
people getting worse care or not as good of care as guaranteed under 
Medicare? This was done by design. The results we have are the results 
of what they literally did when they drafted the legislation.
  I would like to thank my colleague for allowing me to explain to 
people this bill. And the good news is our seniors know exactly what 
they got, which is why they are angry.
  Mr. BROWN of Ohio. Mr. Speaker, reclaiming my time, what the 
gentleman from Ohio (Mr. Emanuel) said about Costco, think about that. 
This is the same company, one in Toronto, one in Chicago, the exact 
same company, and it is not Costco that is marking up the prices in the 
United States. Obviously they buy their drugs from a U.S. wholesaler 
connected with the drug companies, and in Canada they buy them from a 
Canadian wholesaler which has negotiated cheaper prices. And Costco 
could not buy its drugs that it is selling at the Toronto store and 
ship them to its Chicago store because the Bush administration will not 
let them.
  That is why this break in the deal on drug importation is so 
important that we are simply saying, as the gentleman from Illinois 
(Mr. Emanuel), the gentleman from New Jersey (Mr. Pallone), and the 
gentleman from Ohio (Mr. Strickland) have said many times, that we have 
NAFTA, we have the North American Free Trade Agreement. We are allowed 
to buy and sell across country lines, but we are not allowed to go to 
Canada and buy those prescription drugs, bring them back to the United 
States, and sell them at a much lower price. The same drugs, the same 
packaging, the same manufacturers, the same dosage, everything.

  Mr. Speaker, I yield to the gentleman from New Jersey (Mr. Pallone).
  Mr. PALLONE. Mr. Speaker, I want to thank the gentleman from Ohio 
(Mr. Brown) and also the gentleman from Illinois (Mr. Emanuel) for 
their comments because they are clearly right on point in talking about 
why this Medicare premium is going to increase so much in the next year 
and that this is directly the result of President Bush's policy and 
Republicans in this House's policy with the Medicare bill, the so-
called Medicare prescription drug bill that the Republicans passed last 
year.
  Sometimes I do not know whether to laugh or to cry. To laugh because 
the hoax that is being played by the Republicans and the Bush 
administration is so ridiculous, or to cry because of the fact of what 
the consequences are to America's seniors. And we have to understand, 
and I know all of us do, that this is something that is really going to 
hurt seniors. They cannot afford a 17.4 percent increase. These are 
seniors living on fixed income. The Social Security COLA this year, I 
do not know what it is, 2 percent, 3 percent, something like that.
  Mr. BROWN of Ohio. Reclaiming my time, we do not know yet, Mr. 
Speaker, but it will be less than 3 percent.
  Mr. PALLONE. Yes, Mr. Speaker. This Medicare Part B premium is five 
times the 17.4 percent increase, at least, of what their Social 
Security COLA would go up to.
  Mr. STRICKLAND. Mr. Speaker, will the gentleman yield?
  Mr. BROWN of Ohio. I yield to the gentleman from Ohio.
  Mr. STRICKLAND. Mr. Speaker, so if a senior is on a fixed income and 
the Social Security premium goes up less than 3 percent and yet the 
Medicare premium goes up 17.4 percent, what is that senior on a fixed 
income to do when they are already living on the edge, they are already 
having a struggle to buy food and get their medicines, pay their bills, 
heat their homes? What are they to do? What does this President say to 
an 80-year-old man or woman who is living at the edge in terms of their 
income? What does this President say? What do the leaders in this House 
have to say to those folks?
  Mr. PALLONE. Mr. Speaker, if the gentleman will continue to yield, I 
have to be honest, one of my concerns is, I mean we know that 99 
percent of seniors pay the Part B premium because it pays for the 
doctor bills, but I would not be surprised if we start seeing a 
significant portion of them that do not even sign up for Part B because 
they cannot afford the premium. I mean that is my fear.
  And the other thing I wanted to follow up on, though, because I think 
it says so much about what is going on here and shows how the Bush 
administration and Republicans have caused this premium.

                              {time}  2145

  We have got to understand that the gentleman from Ohio (Mr. Brown) 
said when President Bush spoke, he tried to give the impression that 
this was just some natural phenomena, or maybe even worse, it was 
caused by the Democrats.
  This is directly the result of the Bush administration and the 
Republican Policy Committee, because when they passed that so-called 
Medicare prescription drug bill, what did they do? Essentially what 
they are doing is two things: one, giving more money to the insurance 
companies, particularly to the HMOs, and essentially trying to get 
Medicare privatized, to get seniors out of traditional Medicare, and 
this premium increase is a direct result of all that extra money that 
is going to pay for the HMOs or the other managed care agencies getting 
this increased money.
  The other thing is it is the result of the fact that the Republicans 
are borrowing from the Social Security and the Medicare trust funds to 
pay for the deficit that has been the result, again, of their policies. 
They did all these tax cuts primarily for corporate interests and for 
wealthy Americans. They had to borrow from the trust funds, including 
the Medicare trust fund, to pay for those tax cuts, and created a 
deficit; and that is another significant reason why this premium is 
going up.
  So when the gentleman from Illinois (Mr. Emanuel) talked about the 
GAO study, which was in the New York Times, today the New York Times 
had a article on this GAO study, and it is just incredible, because 
what it found is that Medicare is spending $650 to $750 more per year 
for each beneficiary in these private plans, these managed care plans. 
Even though we are spending all this extra money, which is causing the 
part B premium to go up so much, we are finding that it is costing the 
government more.
  I just want to read this. It was just amazing to me. The New York 
Times today, the front page: Federal investigators said Monday that the 
Bush administration had improperly allowed, once again breaking the 
law, some private health plans to limit Medicare patients' choice of 
providers, including doctors, nursing homes and home care agencies. 
Investigators from the GAO also found that the private plans had

[[Page H7721]]

increased out-of-pocket costs for the elderly and had not saved money 
for the government, contrary to predictions by Medicare officials.
  They have been saying all along the reason we are giving this extra 
money to the HMOs and the managed care providers, in this case the 
preferred provider organizations, is because the beneficiaries are 
going to save money out of pocket. Now this finds out that that is not 
true.
  So what do we have? We are giving the managed care companies more 
money. We are causing the part B premium to go up. As a result, the 
seniors are paying more out of money. And the Bush administration is 
doing all this illegally because they are limiting seniors their choice 
of doctors, nursing homes, and home care agencies.
  The only person that benefits is the insurance companies and the 
HMOs. I guess, as the gentleman from Ohio (Mr. Brown) said, the 
Republicans benefit, because they get campaign contributions and other 
things from the insurance companies. But there is nobody that benefits 
here.
  Even with all this going on, McClellan, the administrator of 
Medicare, insisted that private plans were an attractive option that 
would save money and improve coverage for beneficiaries. That was his 
response to the GAO report. Incredible. I just do not know where it 
ends. It is sickening.
  Mr. BROWN of Ohio. Madam Speaker, reclaiming my time, I want to 
reiterate that this did not have to happen. We have a very good 
Medicare system. One of the great things about our system is while we 
do not always rank at the top around the world in our health care 
system because a lot of people do not have insurance and all that, if 
you get to 65 in this country, you in fact do have one of the longest 
life expectancies in the world because you have very good health care, 
you have Medicare.
  You had a shortcoming. You did not have a prescription drug benefit. 
You still really do not because it is now a privatized insurance plan. 
But this did not have to happen. We did not have to take Medicare, one 
of the great programs this country has ever had, and do what the 
Republicans did.
  I want to outline again, first of all, how they did it. If you do 
something, if you build a house in a way that is not structurally 
sound, if you do not use a good quality wood, if you cut corners, you 
are not going to have a very good house at the end. If you do not have 
good input into any manufacturing process, you are not going to have a 
very good manufactured product at the end.
  Just again look at how the Republicans did it. They first told the 
American people and the Congress the bill would cost $400 billion over 
10 years. It turns out there was an actuary at the Center for Medicare 
and Medicaid Services who said no, it will cost $534 billion; but he 
was not allowed to speak out. He was threatened by Tom Skully, the 
administrator, and I assume by the President also, who had to know this 
too, that it really costs $534 billion.
  Mr. Skully has since moved on to work as a lobbyist for the drug and 
insurance industry, no surprise there, while the President has taken 
tens of millions of dollars apparently to thank him for the Medicare 
bill. We will get to that in a moment. But the cost estimates were 
hidden from the Congress. They simply did not tell us the truth about 
how much it was going to cost. Then the administrator violated ethics 
laws by the way they treated that employee and other ways.
  Then the way it passed this Congress, we remember that night, the 
debate started at midnight, the vote started at 3 o'clock in the 
morning, the roll call was kept open for 3 hours. They literally tried 
to bribe one Member.
  Mr. PALLONE. Madam Speaker, if the gentleman would yield further, if 
I could interrupt, the one thing I thought was so significant and maybe 
was not played up enough, there was a majority of the House of 
Representatives that voted ``no'' on that bill, 218, a clear majority. 
There was absolutely no reason to leave that board open, because a 
majority had voted ``no.'' So they basically spent, as the gentleman 
said, 2 or 3 hours persuading the people that voted ``no'' to switch 
their vote.
  Mr. BROWN of Ohio. Madam Speaker, reclaiming my time, ``persuading'' 
is a very nice word. They did well beyond persuading. They arm-twisted, 
they cut deals, they tried to cut deals, they made offers, they tried 
the carrot, they tried the stick, they tried to bribe a Republican 
Member from Michigan, who talked about it the next day.
  So this whole process, from the conception of the bill written by the 
drug and insurance industry to the cost estimates hidden and then lied 
about, the ethics violations, then the middle-of-the-night vote, then 
the bribing of a Member of Congress, the attempted bribing of a Member 
of Congress, and then the bill passing in the middle of the night, it 
is no surprise that this bill led to a product where seniors got a 17.4 
percent premium increase. Again, the largest increase in 
Medicare history.

  In the 1990s, in the second half, the premiums stayed almost the 
same. It was between about $46 and $50, within a dollar or two, every 
year for 4 or 5 years. President Bush came into office. Now it is up to 
$78 and some cents. It has gone up double digits more than once, and 
this time it went up 17 percent. Why? Because of all these things that 
happened.
  This was not an accident that it went up 17.4 percent. It went up 
that much because they lied about the cost and they covered it up, the 
President and the administration and the Office of Medicare, CMS. Then 
they violated election laws. Then they strong-armed Members. Then they 
tried to bribe somebody. Then the bill contained a huge payout to the 
insurance industry, $290 million every month for 22 months before the 
bill, the drug benefit, was even into effect in 2006. So the increase 
to seniors was 17.4 percent.
  Of course, the Republicans had to collect their money from the drug 
and insurance industries for their campaign this year. Republicans may 
have a good year this year in the election because they have so much 
money from the drug companies and so much money from the insurance 
companies. But it is morally reprehensible and outrageous how they did 
it, and even more outrageous, what ultimately happened to this bill.
  Mr. STRICKLAND. Madam Speaker, if the gentleman will yield further, I 
was just standing here thinking if you are a working person, if you are 
a senior citizen, if you are a veteran in this country, you had better 
look out, because this administration is out to get you. They are 
cutting veterans' health care funding. They certainly are not doing 
anything for the working people, who are seeing the tax burden of this 
Nation shifted more and more from the very wealthy on to the backs of 
the working folks. And then when it comes to the older people in this 
country, when it comes to our senior citizens, they are really getting 
the shaft.
  The fact is that since George Bush became President, Medicare part B 
premiums have increased 56 percent. In less than 4 years they have 
increased 56 percent. But back home in Ohio, in Southeastern Ohio, we 
have an old saying about the chickens coming home to roost. I think the 
chickens are coming home to roost for the Republicans, because the 
senior citizens are starting to understand what is happening to them.
  A story in the Columbus Dispatch, September 12, it says: ``Medicare 
expense becoming a big issue in the election fight.'' If I can just 
share the opening paragraph, it says: ``Medicare has emerged as a 
volatile issue in this year's elections as Democrats vow to roll back a 
sharp increase in premiums announced this month.''
  Those premiums are increasing, as has been said here, 17.4 percent. 
That means that beginning in January, and that is after the election, 
but beginning in January a senior citizen will be required to pay for 
part B, their Medicare part B premium, $78.20. That amounts to $938.40 
a year.
  I repeat to my friend, the gentleman from New Jersey (Mr. Pallone), 
the question I asked him a little earlier: If you are a senior citizen 
and you have health problems that require medication to keep you 
healthy or to keep you alive, in many cases, and you are on a fixed 
income, as many of our seniors are, and this President decides to 
increase your premium 17.4 percent, and your Social Security cost of 
living increase is less than 3 percent, what can you do? Where can you 
go to get what you need to buy your medicine, to pay for your food, to 
heat your home, to pay your rent?

[[Page H7722]]

  That question is facing hundreds of thousands of American senior 
citizens tonight, and this President has an obligation to speak to that 
question, because he is the one who is responsible for putting this 
additional burden on the backs of our senior citizens.
  Mr. PALLONE. Madam Speaker, if the gentleman will yield further, I 
just want to say two things in response. One is I think we have to keep 
repeating that this is the policy of the Bush administration and the 
Republicans in Congress. They have forced this 17.4 percent increase, 
because of their giving the money back to the insurance companies, the 
extra money to the HMOs and managed care, and because they are 
borrowing from the trust fund.
  But I want to say I have had a couple of seniors contact me over the 
last few weeks, because they point out that the costs are even higher. 
One of the things not mentioned here, and I forgot exactly how much it 
was, but the Medicare bill actually has an increase in the deductible 
too. Does it go to $150 instead of $100? I do not know exactly the 
amount.
  But this is the first time in the whole history of the part B program 
that the deductible is going to increase. So if you add that, and, 
remember, everybody is going to pay that, because when you go on 
January 1 and buy your first prescription or your first series of 
prescriptions, instead of $100, I do not know what it is going up to, 
it is going up beyond $100. I do not know if it is $150 or whatever at 
some point. So that is going to be an extra amount of money out of 
pocket.
  Then if you look at what the GAO study says today in terms of the 
money for these HMOs, what they did is they waived the out-of-pocket 
limits. So in other words, what this GAO study is saying today, it is 
costing the senior more if they have joined these PPOs, a form of 
managed care, because they are going to pay more out of pocket. Think 
about it: premiums going up, deductibles going up, out-of-pocket 
expenses going up, because they have waived the requirements.
  Mr. STRICKLAND. Madam Speaker, if the gentleman will yield further, I 
think it is appropriate for us to ask how would this country be without 
Medicare. There are some people in this administration who never 
believed in Medicare from the beginning. They opposed it from the very 
beginning. They think it is something like socialized medicine, and 
they think that the private sector is not being able to get its fair 
share.
  So, quite frankly, what we face with this administration, and I 
believe with the President, are individuals who simply do not believe 
in Medicare as such.
  Otherwise when they talked about a prescription drug benefit, they 
simply would have made this benefit a part of traditional Medicare. 
They would simply have added A, B, C, and part D and said that is the 
prescription drug benefit to Medicare. We would have had a modest 
premium, and it would have been a part of traditional Medicare. But no, 
no, no, they want to go to the private sector. As a result of going to 
the private sector, as the gentleman has said, it is costing more, 
seniors are more limited in their choices, their premiums are going up, 
their deductibles are going it up, and they will continue to go up.

                              {time}  2200

  This year, it is 17.4 percent. Next year, when there is no election 
facing the administration, if they happen to retain power, it could be 
25 percent. No one knows what is going to happen, because this 
administration, I believe, fundamentally does not believe in 
traditional Medicare.
  So what do you do when you do not believe in a program? Well, you try 
to change it fundamentally, and that is what they are trying to do. 
This is the first step in the privatization of medicare, to relieve the 
government of this responsibility. And I ask, what would America be 
like tonight without Medicare? If George Bush and the leadership of 
this House and the Senate of this country have their way, we may find 
out what America will be like without Medicare.
  Mr. PALLONE. Mr. Speaker, I will just read this one section from this 
report, and then I will yield back to the gentleman from Ohio (Mr. 
Brown). Again, this is the GAO, the Government Accounting Office, 
nonpartisan; this is not Democrat or Republicans saying this. This is 
what the report said: ``To draw PPOs,'' which is a form of managed care 
``into Medicare,'' the report said, ``the Bush administration offered 
to pay them more, waive stringent standards for the quality of care, 
and remove limits on the costs that beneficiaries might be required to 
pay. As a result,'' the GAO says, ``these plans were subject to no 
statutory or regulatory limits on cost-sharing for beneficiaries.''
  Quality of care, cost, standards, they do not care. They are just 
giving money to their friends, the insurance companies.
  Mr. BROWN of Ohio. Mr. Speaker, reclaiming my time, the gentleman 
from New Jersey (Mr. Pallone) mentioned how premiums are up 
dramatically, obviously, the 17.4 percent. And before my friends on the 
other side of the aisle say anything, because I know what they are 
going to say, because they always say that to this is, well, one of the 
reasons premiums are up is because they are getting these great new 
preventive benefits. Well, the fact is preventive benefits cost, and 
this is all public information, they will add 20 cents to the cost of 
the premium increase. The premium increase is $11.40. The increase in 
better benefits, the preventive benefit is 20 cents, so they are 
getting almost nothing for the $11.40.
  So we are seeing the premium increase 17.4 percent; we are seeing the 
deductible increase, as the gentleman from New Jersey (Mr. Pallone) 
says; and once the drug benefit comes into effect, we are seeing 
accelerated, continuing, quickening, sky-rocketing drug prices.
  And the reason for that, again, this stuff does not happen by 
accident. The reason for that is as a payoff to their drug company 
contributors, because there is no other explanation that I have heard 
from anybody, including Republicans privately, is they have a provision 
in the bill that says that the government may not negotiate the price 
of drugs on behalf of Medicare beneficiaries with the drug companies.
  So in other words, think how easy it would be if the country would 
simply say, the government would say, we have 41 million Medicare 
beneficiaries. We are going to use them as one buying pool, one 
purchasing pool, to bring the cost of drugs down. That is what every 
other country in the world does. That is why drug prices are one-half, 
one-third, one-tenth in Germany, Japan, Israel, England, or Canada as 
they are here, because the government intervenes. It is not price 
controls; they just simply negotiate the price on behalf of seniors. 
That is what the Veterans Administration does. They bulk buy. They use 
the purchasing power of many to get a good price from the drug 
companies.
  For the Republicans to write into this Medicare bill, with all the 
corrupt and outrageous and morally reprehensible and questionable 
tactics and ethics violations that went into this bill, for them to 
write a provision into the bill saying, we cannot negotiate for lower 
drug prices, that absolutely guarantees the prices will go up. So 
premiums go up 17 percent this year, maybe, as the gentleman from Ohio 
(Mr. Strickland) said, another double-digit increase next year, even 
bigger, without the threat of an election over them, if President Bush 
wins the election or if Republicans keep control of Congress, premiums 
go up, deductibles go up, and the cost of prescription drugs keep going 
way through the roof.
  It is by design. It is clearly what they want. They want to privatize 
Medicare, as the gentleman from Ohio (Mr. Strickland) said; and they 
move towards a very different system. Back 38 years ago, almost no 
Republicans supported Medicare, and every time they have had a chance, 
they have gone after it. They have tried to privatize, take money out 
of it, tried to underpay providers so that they can rob the system. 
They have tried to pay off the drug industry and the insurance industry 
to privatize the system; and now that they control the House, the 
Senate, and the President, they are able to do all of these things, 
costing seniors more and seniors getting less; but the drug and 
insurance companies are doing very well, thank you.
  Mr. STRICKLAND. Mr. Speaker, listening to this discussion and 
listening to the things the gentleman said about this bill and how it 
came into being, I

[[Page H7723]]

would say that for a senior citizen to continue to vote for those in 
power would be not unlike a chicken voting for Colonel Sanders. Now, we 
all know down in Kentucky and Ohio and around there that Colonel 
Sanders sells Kentucky Fried Chicken. It is pretty good stuff. But 
quite frankly, Colonel Sanders is no friend of the chicken, and I 
believe that this administration is no friend to America's senior 
citizens.
  When we think about what is being discussed here, it is outrageous. 
It is absolutely outrageous. What we are talking about is not 
theoretical. We are talking about real people, older Americans. We are 
talking about tax dollars that are being given to pharmaceutical 
companies and insurance companies. We are talking about decisions being 
made that are almost irrational, if we consider them in a serious 
manner.
  This administration pushed through a law that says, we cannot 
negotiate discounts. I mean, Sam's Club negotiates discounts. As the 
gentleman said, the gentleman from Ohio, the Veterans Administration 
negotiates discounts for pharmaceutical medications. Yet, this 
President and the leadership in this House said oh, no, no, no. 
Medicare cannot negotiate discounts for our senior citizens. Why? 
Because the pharmaceutical companies wanted that provision in the law. 
It is outrageous.
  Mr. BROWN of Ohio. Mr. Speaker, reclaiming my time just for a moment, 
in this House, a group of us wanted to try to amend the bill to take 
that out so that even though we did not like the bill overall, at least 
we could have brought drug prices down by working for that discount by 
using the power of 41 million people purchasing, a Medicare purchasing 
pool. We wanted to offer that amendment, and because of the corrupt way 
this bill was brought to the House floor, from the cost estimates to 
the ethics law to the middle-of-the-night vote, to the bribery, 
attempts of bribery on the House floor, we were not even allowed to 
offer that amendment so we could debate it; and let my friends on the 
other side try to defend the drug companies, but they did not want to 
do that in public. Everything they wanted to do would be in the middle 
of the night or not have to do it at all, so they did not even allow us 
to offer that amendment to even discuss it.
  Mr. STRICKLAND. So it is fair to say that President Bush believes 
that America's senior citizens should pay more for their drugs than 
Canadian senior citizens. He believes that American senior citizens 
should pay more for their drugs than English senior citizens or German 
senior citizens or Belgium senior citizens or Swedish or French senior 
citizens. That is what we have. America's senior citizens are paying 
more, senior citizens in other countries are paying less; and this 
President says that is the way it ought to be. He is standing in the 
way, with the leadership in this House, of those of us who feel that 
this is wrong, having the ability to change it.
  Mr. BROWN of Ohio. Mr. Speaker, before yielding for a moment to the 
gentleman from New Jersey (Mr. Pallone), one drug in particular, a drug 
cold Tamoxifen, a breast cancer drug, it is a very effective drug to 
help women combat breast cancer, costs 10 times in the United States 
what it costs in France. This is a drug that was developed in large 
part by U.S. taxpayers, and it is made here. Yet the French pay one-
tenth as much for Tamoxifen as do Americans; French women do pay one-
tenth as much as American women do. Those are not coincidences; they 
do not happen by accident. They happen because of the corruption and 
the violation of ethics laws and the bribery and all that Republicans 
have engaged in on this medicare prescription drug bill.

  If you want to teach a class about how government should not run, if 
you want to teach a class about how government can be rife with 
corruption, all you have to do is talk about the Medicare bill. If you 
explain to students or explain to anyone how this Congress, how this 
Congress passed this Medicare bill, there is no better example in my 30 
years in public office, almost 30 years in public office, there is no 
better example I have ever seen from either party even at its worst, 
and both parties do things we sometimes should not do, but we have 
never seen anything close to the corruption that just permeates this 
Medicare bill, from the beginning of its process to the 17.4 percent 
increase, and who knows what in the future.
  Mr. PALLONE. Mr. Speaker, I just wanted to add a couple of things 
about price, because I think it was the gentleman from Illinois (Mr. 
Emanuel) who said earlier that what this is all about is price and cost 
and how much people are paying out of pocket. I mean, the reason that 
my colleague, the gentleman from Ohio (Mr. Brown), started this Special 
Order tonight is because of this 17.4 percent premium increase in 
Medicare part B, but we have already talked about all of the other 
additional costs.
  One of the things that I think has not been highlighted, and I am not 
talking about with us, but just in general, is that when this so-called 
prescription drug benefit, and I do not even like to use the term, 
kicks in in a couple of years, all of the information that Republicans 
are giving out relative to the cost, none of it is true. They act as if 
there is going to be a set premium, that there is going to be a set 
deductible, that there is going to be some list or formula that is 
going to include drugs, certain drugs. None of these things are true. 
There is absolutely nothing in the bill that sets the premium. The 
premium for the drugs could be $100 a month. Who knows? The deductible, 
we are thinking because we think of part B that the deductible is $100, 
the deductible could be $200, $300. There is absolutely nothing in this 
bill that dictates in any way what the price is going to be for the 
premiums, for the deductibles, for anything, or that any particular 
drugs are going to be included. Everything else is true too.
  In the interim, we have these so-called drug cards, right? Now, you 
and I know the seniors are supposed to go on the Internet and figure 
out whether or not it is worth it to buy one of these drug cards 
because you look to see whether or not certain drugs that you might 
want to take are included on these so-called discount drug cards. But 
we know that that price can change next week. So they could increase 
the price, and you might find that you sign up and pay for the drug 
card and then the cost is two or three times. There is nothing here. 
The idea of not negotiating the price extends not only to the price of 
the drugs, but to every aspect of this: premium, deductible, you name 
it.
  Mr. BROWN of Ohio. Mr. Speaker, reclaiming my time, that is why the 
comment of the gentleman from Ohio (Mr. Strickland) earlier was so 
important. Without the prospect of an election, if President Bush wins 
this election, if Republicans win the House, it is Katie, bar the door. 
Premiums, deductibles, copays, who knows what this is going to look 
like. More insurance company subsidies, more subsidies for the drug 
companies, two industries that have done so very, very, very well in 
this country. The drug industry is the most profitable industry in 
America for 20 years running, with the lowest tax rate. Insurance 
companies and HMOs had a 50 percent increase in their profits this year 
over last year, and that is before they got this, before all of this 
corruption led to their $290 million-a-month payout from taxpayers to 
HMOs.
  Mr. Speaker, the gentleman from Ohio (Mr. Strickland) is right. When 
there is not an election, if President Bush was willing to increase 
premiums 17.4 percent, a record increase 2 months before an election, 
granted, he did it on Labor Day weekend when he hoped nobody would 
notice, but if he is willing to do that 2 months before an election, a 
very close election, you can wonder what he is going to do when those 
shackles are off.
  Mr. STRICKLAND. Mr. Speaker, we have talked about the problems with 
this bill. What is the solution?
  Well, I think these problems could be solved if the President would 
pick up the phone and call the gentleman from Illinois (Speaker 
Hastert) and say, Speaker Hastert, I want a bill that allows the 
importation of cheaper drugs from Canada into this country. And if the 
President said to the gentleman from Illinois (Speaker Hastert), Mr. 
Speaker, I want a bill that allows our government to negotiate cheaper 
prices for our senior citizens with the pharmaceutical industry, the 
President could do that, and I believe the Speaker would accommodate 
him. A bill

[[Page H7724]]

could be brought to this floor; and with the President's support, it 
would pass overwhelmingly.
  So what is the problem? The problem is the President is on the wrong 
side of these two issues. He is on the wrong side of other issues as 
well regarding this bill, but especially on the issue of importing 
cheaper drugs from Canada, something that most Americans want. 
Americans cannot understand, they just simply cannot understand why a 
drug can be sold in Canada at a profit, at a profit. The drug companies 
are not losing money when they sell these drugs in Canada. So the 
American people ask, how can a drug company sell a drug in Canada and 
make a profit and then sell that same drug in this country for two or 
three or four times as much as they are charging in Canada? What is 
right about that, when we have older people on fixed incomes who are 
desperate?

                              {time}  2215

  I do not know if the President, as he is out and about the country 
campaigning, encounters the same kind of people that I do, but every 
time I go back to my southeastern and southern Ohio district, I 
encounter older people who are desperate. They simply do not know how 
they are going to make it.
  It would be so simple. We could accomplish this in a few hours' time 
if the President would simply take the leadership and do it, but thus 
far, he is leading in the opposite direction. I think the American 
people need to know that, that if they are concerned about high drug 
costs and they are concerned about Canada and France and all these 
other countries getting the drugs more cheaply, they need to know that 
the President is one of the reasons for that, because he refuses to 
speak up and speak out and to provide the leadership.
  Mr. BROWN of Ohio. Mr. Speaker, I thank my friend, the gentleman from 
Ohio (Mr. Strickland) and the gentleman from New Jersey (Mr. Pallone) 
for joining me and the gentleman from Illinois (Mr. Emanuel) earlier 
tonight.
  Again, as the gentleman from Ohio (Mr. Strickland) pointed out, we 
know what has not worked. We know this bill has been an absolute payoff 
to the drug and insurance industries. We know how this bill became law. 
We also know what we could do to fix it, and we would offer again 
tonight, because we should not come down to the floor and only 
criticize, we really should offer constructive solutions.
  The gentleman from Ohio (Mr. Strickland) is exactly right. We should 
have reimportation. We should run the Medicare prescription drug bill 
through traditional Medicare, not farm it out to insurance companies, 
and then have to subsidize those insurance companies to ``incentivize'' 
them to offer the prescription drug benefit.
  With reimportation, we also ought to be able to use the buying power 
of the Federal Government on behalf of 41 million Medicare 
beneficiaries to get the price down so that people could simply open up 
their purse or their billfold and pull out their Medicare card and go 
to the local drug mart in Elyria, Ohio and get a price that is 50 or 60 
or 70 percent less than we have today.
  We can do this if we have the political will. We could do this if the 
Republican leadership and the President would wean themselves off of 
drug company and insurance company contributions. That is what we need 
to continue to push in our country so that seniors are finally treated 
equitably by their Federal Government.
  I thank my friends from New Jersey and Ohio.

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