[Congressional Record Volume 155, Number 151 (Monday, October 19, 2009)]
[Senate]
[Pages S10511-S10513]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           HEALTH CARE REFORM

  Mr. ALEXANDER. Mr. President, after a lot of serious debate and 
discussion, we apparently are about to come to the point where we have 
our first vote on health care reform.
  What is it the Democrats--those on the other side--propose we do? Add 
one-quarter of a trillion dollars to the national debt. I thought this 
debate was supposed to be about reducing costs--reducing costs to the 
government and reducing costs to individuals across this country who 
cannot afford to pay for health care insurance. And then, as we find 
ways to reduce the costs of what we are doing, we can begin to expand 
health care coverage to the Americans who do not have insurance. But it 
is as big a problem--or bigger--today that those who do have health 
care insurance--and that is about 250 million of us out of 300 
million--that many Americans cannot afford their health care.
  So our focus is, I thought, on cost. How do we reduce costs to the 
government and costs to the American people? What we see is that the 
very first vote on health care reform will be on a proposal to increase 
the debt by $247 billion over 10 years in order to pay for Medicare 
doctors reimbursements. This is not the insurance companies talking. 
This is not the Republicans talking. This is not one news commentator 
talking. This is the proposal by the Democratic side, that the first 
vote will be to increase the debt by a quarter of a trillion dollars.
  I wish to talk for a few minutes about this bill as we see it. Here 
we are supposed to be having legislation to reduce the costs to the 
government, and we apparently are going to, as the first step in the 
wrong direction, add a quarter of a trillion dollars to the government. 
The second thing we are trying to do is to reduce your costs--the costs 
that each of us pays for our health care insurance. The outlines of the 
bill we see coming through the Congress would actually increase 
premiums.
  I would ask the American people and ask my colleagues: If our goal is 
to reduce costs--and we are adding to the debt and increasing premiums 
instead of reducing premiums and reducing the debt--why are we doing 
this?
  Let me start first with adding a quarter of a trillion dollars to the 
debt. Here is what the proposal would be. You will remember a few days 
ago there was a great deal of congratulations when the Finance 
Committee finished a lot of hard work, and they said: This is a 
deficit-neutral bill. It doesn't add anything to the debt. That is what 
the Congressional Budget Office said based on a series of assumptions. 
That is something to be proud of because the President himself has said 
he won't sign a piece of legislation that adds one dime to the debt, 
and then he added to that, ``and I mean it,'' like a parent who wanted 
to make sure he was being heard by unruly Members of Congress.

  I am glad he said that. I heard him say it earlier in the year when 
he had a summit on the condition of the Federal budget. Democrats and 
Republicans--we all went down to the White House. People came in and 
said: If we don't do something about the increasing debt in our 
country, our children and grandchildren aren't going to have a country. 
That was not overstating it. Everyone at the President's summit agreed 
that the principal cause of runaway debt in America is health care. It 
is Medicare and Medicaid.
  Just these past few days--here is the weekend newspaper in Tennessee. 
This is the Nashville Tennessean on Saturday: ``Deficit leaps to $1.4 
trillion.'' I think most Americans--I know at least most Tennesseans--
are deeply concerned about this. But lest you think a Republican 
Senator is exaggerating the problem, let me just read a few paragraphs 
from the Associated Press story:

       Deficit leaps to $1.4 trillion. Economists warn of crisis 
     if U.S. fails to act.

  This is an Associated Press story.

       What is $1.42 trillion? It's the federal budget deficit for 
     2009, more than three times the most red ink ever amassed in 
     a single year.
       It's more than the total national debt for the first 200 
     years of the Republic, more than the entire economy of India, 
     almost as much as Canada's, and more than $4,700 for every 
     man, woman and child in the United States.

  Yet the first proposal, the first vote on health care is going to be 
to add to that debt.
  The Associated Press article continues:


[[Page S10512]]


       As a percentage of U.S. economic output, it is the biggest 
     deficit since World War II. And, some economists warn, unless 
     the government makes hard decisions to cut spending or raise 
     taxes, it could be the seeds of another economic crisis.

  Yet the first vote on the health care reform bill will be to add a 
quarter of a trillion dollars over the next 10 years to the national 
debt.
  Quote:

       ``The rudderless U.S. fiscal policy is the biggest long-
     term risk to the U.S. economy,'' said Kenneth Rogoff, a 
     Harvard professor and former chief economist for the 
     International Monetary Fund.

  Quote:

       ``As we accumulate more and more debt, we leave ourselves 
     very vulnerable.''

  Yet the first vote that is proposed on the health care reform bill is 
to add a quarter of a trillion dollars to the national debt. This seems 
unbelievable.
  I ask unanimous consent to have printed in the Record following my 
remarks the article by the Associated Press from the National 
Tennessean of last Saturday.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (See exhibit 1.)
  Mr. ALEXANDER. Mr. President, the issue at hand is something with 
which we are all very familiar. It is called the doctors reimbursement 
problem. When the 40 million seniors on Medicare go to see a doctor, 
the doctor is paid at a rate set by the government. That rate is only 
about 80 percent of what the doctor would be paid if the doctor was 
seeing a person with private health care insurance.
  There is a complicated formula in the law that says those doctor 
payments will go down over the next several years--by as much as 25 
percent over the next 2 years. The Congressional Budget Office has 
estimated that over the next 10 years, just to pay physicians the same 
they are being paid today, which I don't think very many physicians 
would be happy with, will cost $247 billion more than is accounted for 
in the Baucus bill that came out of the Finance Committee. So they just 
assumed it wouldn't be paid to physicians and the doctors would be, in 
effect, paying for the health care bill.
  Well, suddenly some people on the other side of the aisle said: Oh, 
we can't do that, so we will just separate it from the health care 
debate. Actually, I think they have done us all a favor because they 
have made it the first vote on the health care reform bill. So we will 
have a chance to vote up or down on whether we want to add a quarter of 
a trillion dollars to the national debt. My experience in life is that 
most people remember their first impression, and if their first 
impression of voting on the health care reform bill is that the 
Congress starts off by just brazenly adding a quarter of a trillion 
dollars to the national debt at a time when the deficit has just leaped 
to $1.4 trillion in 1 year, then I think the American people will have 
a pretty good idea of what we are about here.
  I think the President doesn't--I can't imagine him wanting this, 
based upon his saying, ``I will not sign health care reform that adds 
even one dime to our deficit.'' And this is part of health care reform, 
make no mistake about that. This is part of the bill. It is part of the 
problem. We are looking at health care over the next 10 years. That is 
the way our budget cycles work. Everyone is scoring it or estimating 
its costs based upon what it costs over the next 10 years. To pay 
doctors 10 years from now what they are being paid today--which I doubt 
many doctors would be very happy with--will cost $247 billion.
  So instead of saying, let's find ways to cut other programs or raise 
taxes, we say, let's add a quarter of a trillion dollars to the debt. 
Adding a quarter of a trillion dollars to the national debt as the 
first step in the health care reform debate is the first step in the 
wrong direction. Of course we need to fix the problem of doctors 
reimbursement. It needs to be a part of what we do this year in health 
care reform. But just as with other parts of health care reform, we 
don't add to the debt to do that. At least that is what the President 
has said. At least that is what Republicans have said. And at least 
that is what the American people are saying at a time when the debt 
goes up and up and up.
  The next problem is that not only is the cost to the government going 
up and our first vote on health care reform about to be to add to the 
debt, the outlines of the bill we are seeing increases premiums.
  Over the weekend, the President said: Well, it is those mean old 
insurance companies trying to mislead you.
  You don't have to be an insurance company to understand that the 
premiums are likely to go up. In the first place, the Finance Committee 
reduced the penalty you pay if you don't buy insurance to a level that 
will cause a lot of people not to buy insurance--at least that is the 
estimate of many--and if younger people especially don't buy insurance, 
the pool of people who do buy insurance gets smaller and the people in 
that pool find their premiums going up.
  No. 2, the bill says--the outlines of the bill; of course we don't 
really have a bill. We will have a bill within the next several weeks, 
I imagine, or maybe several days. The bill says it is going to make it 
more expensive for my sons--one who is 30 and one is 40--to buy 
insurance and closer to what it costs for me. Right now across the 
country, I might pay eight times as much for my insurance as younger 
people do, but under this law it is going to say: We don't like that 
big gap between younger people and older people, so it might have to be 
two to one or three to one. Basically, it raises the cost of insurance 
for young people as a way of reducing it for older people. That means 
the premiums of younger people will go up, and it also means they may 
elect to get out of the system, make the pool smaller, and as a result 
of that, all premiums would go up.
  No. 3, there is a provision in the law that says you must buy in many 
cases a government-approved health care insurance. Many people choose a 
high-deductible insurance where you only buy insurance for the big 
problems you know you can't afford and you pay less for your monthly 
premiums that way. A government-approved insurance policy might make it 
not as easy for you to do that. One estimate in Tennessee is that the 
cost for one of these high deductible plans would go from $50 a month 
to $400 a month--a big increase for those who buy high-deductible 
insurance policies. That is the third way your premium might go up.
  Then the fourth way and final way, in addition to this concept we see 
coming from the Finance Committee that your premiums might go up, is 
there are $955 billion in new taxes. They say that is if we are taking 
a 10-year period after the program is fully implemented. They say: 
Well, those are taxes on other people. But they are taxes on your 
insurance company, taxes on the person you buy a medical device from, 
taxes on other people in the health care industry. What do you suppose 
companies do in any area that get additional taxes? For the most part, 
they pass those taxes on to you.

  So there have been a number of independent observers who have said 
that because the individual mandate has been weakened, because young 
people are going to have to pay more for their insurance as compared to 
older people, because the government-approved policy is not going to 
allow so many high-deductible policies that many Americans like, and 
because nearly $1 trillion in taxes is eventually going to be over 10 
years passed on to people who buy insurance, for all of those reasons, 
premiums are likely to go up.
  So we are about to begin the debate on this floor on health care 
reform. It is one we need. What Republicans believe--and I see my 
friend from Delaware who I gather wishes to speak, and I will wind up 
so he can. But here is what we should do. We need health care reform, 
but health care reform is first and foremost about reducing costs, 
first to the government and next to individuals. To re-earn the trust 
of the American people on this score, we should start step by step with 
specific proposals that reduce costs; for example, allowing small 
businesses to pool their resources and offer insurance to their 
employees. Our own committees have estimated that this could add 
millions of people to the insured rolls. Second, reduce junk lawsuits 
that drive up costs. We disagree about how much it drives up the cost 
of insurance, but we don't disagree that it does. Third, allow people 
to buy insurance across State lines. That would create more 
competition. Fourth, create more

[[Page S10513]]

health insurance exchanges so people can shop and find more different 
kinds of policies. Fifth, most all of us agree we need to encourage 
more health information technology and make health care simpler in that 
way. Perhaps we could even agree to change the tax incentives so that 
they don't all go to one group of people and are not going to lower and 
middle-income people.
  There are four or five or six or seven ideas we could go step by step 
with to reduce costs. If we did that, we would be moving in the right 
direction. It is the wrong direction to start the health care debate 
with a vote that adds a quarter of a trillion dollars to the national 
debt at a time when we just added $1.4 trillion to the national debt in 
the past year. Of course we need to fix the doctors reimbursement, but 
it needs to be paid for by--it can't be added to the debt.
  Whatever steps we take ought not just reduce the cost to the 
government; they need to reduce the costs to Americans, all of us who 
have health care insurance. Let's find ways to go step by step to 
reduce costs to the government and to reduce costs to premium holders 
and not start off by adding a quarter of a trillion dollars to the 
national debt.

                               Exhibit 1

                         [From the Tennessean]

                     Deficit Leaps to $1.4 Trillion

                         (By Martin Crutsinger)

       Washington.--What is $1.42 trillion? It's the federal 
     budget deficit for 2009, more than three times the most red 
     ink ever amassed in a single year.
       It's more than the total national debt for the first 200 
     years of the republic, more than the entire economy of India, 
     almost as much as Canada's, and more than $4,700 for every 
     man, woman and child in the United States.
       As a percentage of U.S. economic output, it's the biggest 
     deficit since World War II.
       And, some economists warn, unless the government makes hard 
     decisions to cut spending or raise taxes, it could be the 
     seeds of another economic crisis.
       Treasury figures released Friday showed that the government 
     spent $46.6 billion more in September than it took in, a 
     month that normally records a surplus. That boosted the 
     shortfall for the full fiscal year ending Sept. 30 to $1.42 
     trillion. The previous year's deficit was $459 billion.
       ``The rudderless U.S. fiscal policy is the biggest long-
     term risk to the U.S. economy,'' says Kenneth Rogoff, a 
     Harvard professor and former chief economist for the 
     International Monetary Fund. ``As we accumulate more and more 
     debt, we leave ourselves very vulnerable.''
       Forecasts of more red ink mean the federal government is 
     heading toward spending 15 percent of its money by 2019 just 
     to pay interest on the debt, up from 5 percent this fiscal 
     year.
       President Barack Obama has pledged to reduce the deficit 
     once the Great Recession ends and the unemployment rate 
     starts falling, but economists worry that the government 
     lacks the will to make the hard political choices to get 
     control of the imbalances.
       Friday's report showed that the government paid $190 
     billion in interest over the last 12 months on Treasury 
     securities sold to finance the federal debt. Experts say this 
     tab could quadruple in a decade as the size of the 
     government's total debt rises to $17.1 trillion by 2019.
       Without significant budget cuts, that would crowd out 
     government spending in such areas as transportation, law 
     enforcement and education. Already, interest on the debt is 
     the third-largest category of government spending, after the 
     government's popular entitlement programs, including Social 
     Security and Medicare, and the military.
       As the biggest borrower in the world, the government has 
     been the prime beneficiary of today's record low interest 
     rates. The new budget report showed that interest payments 
     fell by $62 billion this year even as the debt was soaring. 
     Yields on three-month Treasury bills, sold every week by the 
     Treasury to raise fresh cash to pay for maturing government 
     debt, are now at 0.065 percent while six-month bills have 
     fallen to 0.150 percent, the lowest ever in a half-century of 
     selling these bills on a weekly basis.
       The risk is that any significant increase in the rates at 
     Treasury auctions could send the government's interest 
     expenses soaring. That could happen several ways--higher 
     inflation could push the Federal Reserve to increase the 
     short-term interest rates it controls, or the dollar could 
     slump in value, or a combination of both.


                      Spending likely to increase

       The Congressional Budget Office projects that the nation's 
     debt held by investors both at home and abroad will increase 
     by $9.1 trillion over the next decade, pushing the total to 
     $17.1 trillion under Obama's spending plans.
       The biggest factor behind this increase is the anticipated 
     surge in government spending when the baby boomers retire and 
     start receiving Social Security and Medicare benefits. Also 
     contributing will be Obama's plans to extend the Bush tax 
     cuts for everyone except the wealthy.
       The $1.42 trillion deficit for 2009--which was less than 
     the $1.75 trillion that Obama had projected in February--
     includes the cost of the government's financial sector 
     bailout and the economic stimulus program passed in February. 
     Individual and corporate income taxes dwindled as a result of 
     the recession. Coupled with the impact of the Bush tax cuts 
     earlier in the decade, tax revenues fell 16.6 percent, the 
     biggest decline since 1932.
       Immense as it was, many economists say the 2009 deficit was 
     necessary to fight the financial crisis. But analysts worry 
     about the long-term trajectory.
       The administration estimates that government debt will 
     reach 76.5 percent of gross domestic product--the value of 
     all goods and services produced in the United States--in 
     2019. It stood at 41 percent of GDP last year. The record was 
     113 percent of GDP in 1945.
       Much of that debt is in foreign hands. China holds the 
     most--more than $800 billion. In all, investors--domestic and 
     foreign--hold close to $8 trillion in what is called publicly 
     held debt. There is an additional $4.4 trillion in government 
     debt that is not held by investors but owed by the government 
     to itself in the Social Security and other trust funds.


                         Inflation is a threat

       The CBO's 10-year deficit projections already have raised 
     alarms among big investors such as the Chinese. If those 
     investors started dumping their holdings, or even buying 
     fewer U.S. Treasurys, the dollar's value could drop. The 
     government would have to start paying higher interest rates 
     to try to attract investors and bolster the dollar.
       A lower dollar would cause prices of imported goods to 
     rise. Inflation would surge. And higher interest rates would 
     force consumers and companies to pay more to borrow to buy a 
     house or a car or expand their business.
       Most economists say we have time before any crisis hits. In 
     part, that's because the recession has erased worries about 
     inflation for now. In its effort to stimulate the economy, 
     the Fed cut a key interest rate to a record low last December 
     and is expected to keep it there possibly through all of next 
     year. Demand for loans by businesses and consumers is so weak 
     that low rates are not seen as a recipe for inflation.
       Robert Reischauer, a former head of CBO, said that in an 
     optimum scenario, Congress will tackle the deficits next 
     year. A package of tax increases and spending cuts could be 
     phased in starting in 2013 and gradually grow over the next 
     decade.

  Mr. ALEXANDER. I thank the President, and I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Delaware is 
recognized.

                          ____________________