[Congressional Record Volume 158, Number 40 (Monday, March 12, 2012)]
[Senate]
[Pages S1564-S1567]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
HEALTH CARE
Mr. SESSIONS. Mr. President, it has not been that long since the
President's health care proposal has been passed. If we recall, it was
passed on Christmas Eve, after a long battle. We were told: Don't worry
what is in it; we will have to pass it first to find out what is in it.
I remember Senator Brown was running in the State of Massachusetts, a
liberal State. He said, If you elect me--and he was running in the
special election--I will vote against it and provide the vote that
kills it. But the matter was delayed--his appointment and confirmation,
after he won his election. It was put off and the interim Senator cast
a vote for the bill and it passed by a single vote and the result was
60 to 40. I think it was a dangerous step for America.
I am the ranking Republican on the Budget Committee and the Senator
from Wisconsin is a member of that committee. We have serious concerns
about what is in this bill now that we are beginning to read it and
beginning to apply it and see what might happen. Senator Johnson is a
successful businessman who ran for the Senate and joined us just a
little over 1 year ago. He came here to do something. I have been
exceedingly impressed with his approach to business. He had looked at
these numbers and challenged the Secretary of Health and Human
Services, Secretary Sebelius, on some numbers last week. The situation
was quite troubling.
Maybe Senator Johnson can tell us about his concern and what he
raised last week--the economic impact of what happened with jobs, the
American economy, and the debt of our country. Maybe we can begin our
discussion with where he is coming from and what he observed from his
exchange last week.
Mr. JOHNSON of Wisconsin. First of all, I thank the Senator for his
kind comments. He mentioned that Speaker Pelosi famously stated we
needed to pass this bill in order to figure out what is in it. I know
the Senator from Alabama and I are dedicated to making sure the Obama
administration doesn't make sure this law is fully implemented before
we understand the true cost of the bill. We simply cannot afford to
have the American people and Members of Congress not understand the
true cost of the health care law.
I remind everybody that, back in 1965, when they passed the Medicare
bill, first of all, the entire bill was less than 300 pages. That is
interesting. The provision that applied to Medicare alone was about 124
pages. That compares, of course, with the 2,600- or 2,700-page bill
that the Patient Protection and Affordable Care Act was. There are
10,000 pages of regulations just to try to implement this bill.
When they passed Medicare, they estimated it out 25 years and said
that in 1990, Medicare would cost $12 billion. In fact, in 1990,
Medicare cost $110 billion, which is more than nine times the original
cost estimate.
I am new here, but I have been watching this town pretty carefully
over the last few decades. I don't believe Washington has gotten any
better at projecting and estimating figures--particularly on new
entitlements that people want around here. They always tend to
underestimate spending in order to pass legislation, particularly a
bill such as the health care bill, which was done in partisan fashion,
without any kind of support and input from our side.
The point of my question to Secretary Sebelius last week was to try
to lay out the broken promises that are occurring, when we have only
begun to implement the law. The first broken promise I asked her about
was the very famous guarantee of President Obama, who said: If you pass
this health care law, every single family in America will see their
annual insurance premium go down by $2,500 by the end of his first
term. The Kaiser Family Foundation has already conducted a study and
has said that, on average, premiums have gone up about $2,200 per year.
That is a $4,700 difference in the first 3 years of his administration
or only 2 years after it was originally passed.
Mr. SESSIONS. The Senator has been in the real world, having to make
a payroll and manage a company. If he, as a CEO, made a representation
that this was going to reduce the cost of insurance for your employees
by $2,500, and it increases by 2,200, that would be a stunning event,
would it not? Does it bother the Senator, as a person from the real
world--and this is the first time he has been in elected office--to
have people walking around with numbers that are so divergent,
promising to reduce health care costs, and they actually are driving
costs up?
Mr. JOHNSON of Wisconsin. Had I made that guarantee to my
shareholders and management--and that is basically what the President
did; he made that guarantee to the shareholders of America--I would not
want to face the appropriations committee meeting, where I would have
to explain that away. Secretary Sebelius was in a very unenviable
position to have to explain how the President promised a $2,500
reduction and there was an increase.
Mr. SESSIONS. The Senator is right. I was here. There was a promise
made to achieve passage of the bill. A lot of Americans didn't believe
these promises and thought they were inflated to begin with, and this
promise--a fundamental promise--has already been proven to be wildly
inaccurate. And thank you for raising that.
Mr. JOHNSON of Wisconsin. Of course, that is only the first promise.
I have a couple more.
The administration also famously said this health care law would not
add one dime to the deficit. In fact, the original projections were
that it would save $143 billion in the first 10 years. Well,
thankfully, the administration has recognized that the CLASS Act was,
as Budget Committee chairman Kent Conrad said, a Ponzi scheme. It was
simply not financially workable. So they are not implementing it.
Because they are not implementing it, they are not going to get $86
billion worth of revenue, so that will eat away at that $143 billion of
deficit reduction.
Of course, a couple of weeks ago when President Obama presented his
fiscal year 2013 budget, included in that budget was a $111 billion
request--or I
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guess cost estimate--on the mandatory spending of the health care
exchanges. If you add the $111 billion to the $86 billion, that gives
you $197 billion of reduced deficit reduction, if that makes sense.
So bottom line here is I think that is broken promise No. 2. I do not
believe that in the first 10 years, this thing will actually reduce the
deficit. And it is far worse than that. These are the small numbers.
This is just the tip of the iceberg in terms of the revisions that will
be occurring when we actually start finding out what the true cost of
the health care law is.
Mr. SESSIONS. Well, the promise was that--and it was repeated here,
and the President went on national TV, and I believe he said it at the
State of the Union--this bill would not add one dime to the deficit. If
you drop out the $80 or so billion--and he estimated that his plan, if
passed, would actually create $143 billion in surplus, in extra revenue
for the Treasury; it wouldn't cost anything, it would create more
money. So you lose $80 or so billion because the CLASS Act has proven
to be the Ponzi scheme Senator Conrad said it would be, and we just saw
in the President's budget a request for $111 billion more for the
exchanges. Well, that already wipes out entirely, does it not, the
promise that it wouldn't add to the deficit? Even before the bill is
implemented, the projections are that it would cost money rather than
make money for the Treasury. Is that the Senator's analysis so far?
Mr. JOHNSON of Wisconsin. Exactly. That is broken promise No. 2.
Of course, broken promise No. 3 is also--very famously this President
said: If you like your health care plan, you will be able to keep your
health care plan, period. No one will take it away, no matter what.
There are a couple of pieces of evidence that prove that is a broken
promise. First of all, the CBO, in its initial cost estimate of the
health care law, estimated that 1 million people would lose their
employer-sponsored care and be put in the exchanges. By the way, that
is a gross underestimate, and we will talk about that a little later.
But also the Department of HHS has granted 1,200 to 1,700 waivers from
basically some of the requirements of the health care law. That
indicates that were it not for those waivers--basically employers
saying: Listen, we need some relief here--my concern would be, and I
think this is probably pretty true, those employers would be forced to
drop coverage. And those waivers cover about 4 million Americans.
But let me describe a little bit why I believe the 1 million-person
estimate is so understated. There have been surveys of employers
conducted in the last year that indicate that employers, when they take
a look at the whole cost equation of the health care law, 30 to 50
percent, in one survey conducted by McKinsey & Company, of employers,
when asked, plan on dropping their health care coverage shortly after
implementation.
If that were to happen--180 million Americans get their care through
an employer-sponsored plan. If 50 percent drop coverage, that could
mean 90 million Americans--not 1 million but 90 million Americans--
could lose their employer-sponsored care and then get put in the
exchanges. We are trying to work with the CBO to find out exactly what
that would cost, but in their initial estimate, they estimated that it
would be about a $7,000 average subsidy per person in the exchange.
If you deduct for the $2,000 penalty and the deductibility of the
health care cost, that subsidy could range anywhere from a $4,000 to
$5,000 cost to the government times 90 million. Instead of $95 billion
a year, the health care law could cost us close to $\1/2\ trillion if
50 percent of the employers drop their coverage.
This is incredibly scary. And my colleague is fully aware, because he
has been a real leader in terms of our debt and deficit, as Admiral
Mullen has said, the greatest threat to our national security is our
debt and deficit. We can't afford to increase our deficit on an annual
basis by close to $\1/2\ trillion. If everybody were to lose their
coverage--which, by the way, is exactly what I think this plan was
designed to do: lead to a single-payer system, which is what I believe
President Obama really wanted--that would cost us close to $1 trillion
a year. That represents a deficit risk that will absolutely ensure the
final bankruptcy of this Nation.
Mr. SESSIONS. Well, Senator Johnson has been talking about this issue
for some time, and it looks as though reports are coming along to
validate his concerns. But the administration estimated that only 1
million would go into the exchanges, and these are the areas where, if
you don't have employer-based health care, the government will
subsidize your health care program for you, and it costs the Treasury
money. This is how we get in financial trouble, when we make bad
estimates.
The Senator thinks the numbers that go into the exchanges could dwarf
1 million. How many could it be, based on the reports the Senator has
seen?
Mr. JOHNSON of Wisconsin. Well, I worked with former CBO Director
Douglas Holtz-Eakin in trying to look at the numbers that are
presented, and we don't have enough. We don't have enough information,
which is why I am grateful for the fact that Director Elmendorf
recognized that there is some credible evidence to cause the CBO to
reassess that estimate of 1 million people. So they are working through
those numbers right now. Hopefully, they will give us a very full
accounting of that in the next couple of weeks. But the work I did with
Douglas Holtz-Eakin showed that if 90 million get put in those
exchanges, it could cost over $400 billion a year.
Mr. SESSIONS. That is astounding.
Mr. JOHNSON of Wisconsin. That is astounding.
Mr. SESSIONS. Now, for example, $400 billion a year over a 10-year
window would be $4 trillion. If the Budget Control Act that we worked
on so hard last summer, which the President is already undermining,
were to take place, it would only reduce spending over 10 years by $2
trillion. And this would be an unexpected $5 trillion, $4
trillion added on top of that, would it not?
Mr. JOHNSON of Wisconsin. Exactly.
Mr. SESSIONS. And it is not baked into the numbers now. We are not
assuming it is going to be $4 trillion or $5 trillion more under
Obamacare, we are assuming only 1, I guess.
Mr. JOHNSON of Wisconsin. And, unfortunately, we are not even owning
up to the current deficit projections. We are not seriously addressing
that. So nobody really wants to take a look at the danger inherent in
this. Of course, the administration doesn't want to talk about it or
admit to it because they want to go full speed ahead to implement it so
we will not be able to reverse it. That is the main point.
It is time to put the brakes on the implementation of the health care
law before it bankrupts this Nation. We simply can't afford to fully
implement it to find out what the true cost is. It will be disastrous
for our deficit and debt.
Mr. SESSIONS. Well, is it too late? Is this a fait accompli, this
health care law that was passed? Can we not reverse it or is it, in the
Senator's opinion, practical at this point for us to pull back from
this path?
Mr. JOHNSON of Wisconsin. It is essential that we pull back, and it
is essential that we put the brakes on this. I guess we can all keep
our fingers crossed and hope the Supreme Court rules the individual
mandate unconstitutional, and there is no severability clause, so the
entire law would be repealed, so we can then actually fix the problems
in the health care system with patient-centered, free market-based
reforms. That is the way to really address this.
Mr. SESSIONS. Well, the Senator raised these issues with Secretary
Sebelius last week in the committee, and the exchange has been on the
TV and on the Web and has become a bit of a sensation, really. People
have been looking at it, and it has been very troubling.
Would the Senator tell us what troubles him about Secretary
Sebelius's answers--or her lack of them--and what you think we should
do next?
Mr. JOHNSON of Wisconsin. Again, I am an accountant. I have been in
hundreds of budget meetings, and when you are presenting your budget to
a budget committee, you are armed with the information and you are
ready to answer questions.
I was surprised that the Secretary was unable to answer the
questions, and particularly when I mentioned the
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waivers, she seemed to have no idea what I was talking about. It is her
agency, her department that is actually granting those waivers. So that
troubles me.
So I appreciate the fact that the Senator has and we have sent a
letter to Budget Chairman Conrad requesting, to be fair to Secretary
Sebelius, to give her a chance to be fully prepared to come before us
and to explain what is this $111 billion in additional requested funds
for the exchanges. And I would like to really dig down and talk about
this 1 million-person estimate and what is going to be the effect if
the administration is wrong, if CBO has been wrong in the previous
estimate and the McKenzie study is right and half the people very
quickly after implementation get dropped from their employer coverage
and put in the exchanges. What effect is that going to have on our
budget?
I would love to give and I think it is appropriate to give Secretary
Sebelius the opportunity to come before our Budget Committee and have a
fair exchange in terms of her explanation for those parts of her
budget.
Mr. SESSIONS. Well, a $111 billion error is a big deal. You think
about it. We brought in $2,200 billion, and this is $100 billion--about
5 percent of the entire estimated revenue we had in the government last
year. To miss that on one part of one bill is very troubling to me. We
are fighting every day, wrestling with a highway bill, and we came up
$2 billion short over 2 years. And the whole bill is held up, votes on
it, points of order raised on it, and here, blithely, into the
President's budget comes another $111 billion. I am sure there can be
some explanation for it, but I really do think the American people,
don't you, are owed a prepared Secretary before the Budget Committee
who can lay out explanations for what this is so we will know how much
over cost we already are on this plan.
Mr. JOHNSON of Wisconsin. It is $100 billion here, $100 billion
there, and it starts adding up to real money, doesn't it.
And so people don't think these 90 million people getting dropped
from their employer coverage is a fantasy, it is not. It is realistic.
I bought health care for the last 31 years, and the decision an
employer is going to make is going to be easy. It is not going to be a
complex management decision. Because of the health care law, an
employer is going to be faced with saying: OK, I can pay $15,000 for
family coverage or I can pay the $2,000 penalty. And because of the
health care subsidies, they are not exposing their employees to
financial risk, they are making them eligible for huge subsidies. If a
household earns $64,000, they will be eligible for a $10,000 subsidy
through those exchanges.
Now, I know that probably sounds pretty good, but the problem is,
when we are already running $1.3 trillion a year deficits, we can't
afford to add another $\1/2\ trillion per year to those deficits, if
that were to happen. We simply can't afford it.
Mr. SESSIONS. So you are an employer. You have employees, and you
have been helping them, you have been providing health coverage, and
you realize, well, I can cancel my employer contributions, let the
employee go to the exchanges, and they will be subsidized by the
American taxpayer.
Mr. JOHNSON of Wisconsin. That is essentially it.
Mr. SESSIONS. Where is the money coming from that will provide the
extra money they will need to get full coverage?
Mr. JOHNSON of Wisconsin. And if you don't drop coverage, you are
denying the people who work with you the chance of taking advantage of
a $10,000 subsidy.
We have created an incentive in this health care law for employers to
drop coverage and a high-level subsidy to get coverage for the people
who work with them. We have created that incentive, and when government
creates incentives, when government dangles a huge subsidy in front of
people, we know the history of how that works--people take advantage of
those subsidies. And that is my concern.
Mr. SESSIONS. What about a new business--some small business starts
up, and they are thinking about whether they are going to provide
health care for their employees, and they have the option of the
exchanges. Do you think a new business would be even more likely to not
provide coverage and let the employee go to the subsidized exchange?
Mr. JOHNSON of Wisconsin. Sure. Because they know their cost is going
to be $2,000 per employee.
The Senator was telling me a story earlier about some employers in
Alabama that because it is a low-margin business, they simply can't
afford to offer health care. The result of the health care law--why
doesn't the Senator tell the story.
Mr. SESSIONS. I had a number of people in a meeting I was at explain
the realities of it.
They told us the whole fear of regulation and the health care bill
and the revenue that is going to be extracted from them to pay for it
would result in lesser employees, making it impossible for them to
provide the coverage. One told me they could lose as many as 70
employees. I remember that figure.
Mr. JOHNSON of Wisconsin. Again, this law will cost jobs. It is going
to blow a hole in our deficit, and we haven't even talked about the
quality aspect; how it is going to harm the health care system, how it
will lead to rationing, and the type of medical motivation.
The Senator heard the story about my daughter and these marvelous
surgeons. When my daughter was first born with a serious congenital
heart defect, one of these wonderful human beings came in at 1:30 in
the morning and saved her life. Then, 8 months later, when her heart
was the size of a plum, they reconstructed the upper chamber of her
heart so that now her heart operates backward.
We are going to limit those types of innovations that saved my
daughter's life. We are not going to have that type of advancement in
medicine if the government takes over control of our health care
system.
So the effect on our budget--the uncertainty in terms of how it is
going to destroy and explode our deficits versus the harm it is going
to cause the quality of care--leads to rationing, lower innovation.
When it is all put together, I think the greatest single priority we
have to have moving forward is we have to make sure the brakes are put
on this health care law, that it is repealed, and, again, replaced with
patient-centered, free market-based reforms.
Mr. SESSIONS. It is not fully implemented yet. There are a lot of
opportunities for us to get off this train before a disaster occurs. I
truly believe it is not too late for us to alter the course.
I think the American people have never been happy with it. They have
been told they wouldn't have to give up their health care. They were
told it was going to bring down the cost curve and reduce the costs,
and they were told it was going to pay for itself; there would be more
money coming in than the bill would cost.
Would the Senator say all three of those promises have now already
been proven false?
Mr. JOHNSON of Wisconsin. Absolutely. Look at the name of it, the
Patient Protection and Affordable Care Act. It is not going to protect
patients.
If we are going to lower the quality of care, if it is going to
result in rationing, if it limits innovation, how does that protect
patients?
The affordable care act, the Senator just ticked off the three
reasons it is not going to be affordable: It is going to drive up
costs. It is not bending the cost curve down. It is a fiction. The
health care law is a fiction. I am so appreciative of the Senator's
efforts at again making sure that, before this bill is fully
implemented--we both are dedicated to making sure the American people
fully understand the full, true cost of this health care law both on
quality and the effect on our budget.
Mr. SESSIONS. I will add one more thought to the costs, and I have
looked at this very carefully.
On December 23, the night before the bill passed, I got a letter back
from the Director of the Congressional Budget Office, who also had
stated it would create a surplus in the bill of $143 billion based on
conventional accounting procedures. I asked him: Were they not double
counting the money, about $400 billion? Were they not double counting
it, counting it as income to Medicare and counting it as money
available to fund the bill here, President Obama's ObamaCare? Weren't
they using the money twice?
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Think about that. Here we are on the eve of a vote, December 23, the
vote is tomorrow morning, December 24, and we are not agreed on whether
the money is being double counted. He wrote back and said it is being
double counted, ``although the conventions of accounting might suggest
otherwise.''
The way they scored this bill was carefully done by experts to get
the score they got, that it would make a surplus of $140 billion. But
the money was Medicare money. They raised taxes for Medicare. They cut
costs for Medicare. It created some money in Medicare, but the money
was borrowed by the U.S. Treasury and spent on this new program. The
money is owed to the Medicare trustees, who are trustees by law. They
are holding debt instruments from the United States. But because it is
an internal debt, it doesn't score. That may seem complicated, but it
is not. Trust me, they borrowed this money. Sooner or later, when
Medicare is going into deep financial distress, they will call their
bonds from the Treasury and the Treasury is going to have to pay it,
and they are going to borrow the money on the open market is what they
are going to do so they can pay the Medicare trustees the money they
borrowed from them. This is not a good way to do business. That is just
one of the additional problems we have with this.
But, I thank Senator Johnson for focusing on all these issues but
particularly for raising the cost of the exchanges. Because that, by
any estimate--wouldn't the Senator agree--is a dangerous number. It
could surge above the number we are at. Does the Senator think most any
person, even if they thought it would be 1 million people, would have
to admit it could be 5, 10 or 20 million people? Nobody knows for sure.
Mr. JOHNSON of Wisconsin. Exactly. That is why I am so thankful that
CBO Director Elmendorf understands there is some pretty credible
evidence to have the CBO revisit that estimate.
I spoke with him last week. It looks like they are working hard to
provide us that information. I am looking forward to seeing that and
seeing what their revised estimate is for the number of people losing
their coverage, but even more important, to figure out what that per
person cost is.
Maybe we will not agree. He might do a very economic analysis.
Certainly, somebody such as myself who actually bought health care
understands the mindset and the decision of an employer. But even if we
disagree on the number of people, if we have that total dollar amount
of cost per person in that exchange, we will be able to show that to
the American people. So if he comes up with X and I say, no, it is X
plus 30, 40, 50 million people, then at least the American people have
that information, and they can judge for themselves what they think the
realistic estimate is for people losing their coverage and getting
their insurance through the subsidized exchanges. That information is
what the American people deserve, and that is why I am so appreciative
of the Senator's efforts. I know he is going to be, just with me,
making sure that, again, we know what the true cost of this health care
law is before we implement it.
Mr. SESSIONS. We have to know that. We have a responsibility, as
representatives of the people, to understand are we talking about
another $100 billion in cost over just 1 year's time that we weren't
expecting.
I believe the Budget Committee is a good forum to have that. The
Senator and I serve on that committee, and I hope Senator Conrad can
agree and would agree to give Secretary Sebelius an opportunity to
state her view of the situation.
I have to say, I am more and more convinced that we cannot afford
this health care bill. We cannot afford it. We don't have the money. We
don't have the money. I think it will damage health care, and we have
had a lot of debate and experts tell us that, and it will reduce the
quality of care in America. But what I am saying to the Senator is, we
can't afford it, and it threatens the financial viability of our
future. We need to save Medicare and Social Security, the programs we
have. It would be a terrible tragedy if we start off on another
program. As the Senator talked about Medicare 30 years ago, 40 years
ago, it surged way beyond any estimate they would ever have expected in
terms of costs.
If we start on another program, I don't see how this country can
sustain it. The entitlements we have today are now taking up about 60
percent of the entire budget of America: Social Security, Medicare,
Medicaid. Over 50 percent, almost 60 percent of our entire spending
goes for those three programs. To start another massive new program,
when those are all unsound financially and in crisis and need to be
fixed, is the height of foolishness, in my opinion.
I hope we can have a good hearing. I thank the Senator for his
leadership; he is a great addition to the Budget Committee. I thank him
for spending hours digging into these numbers, bringing his business
and accounting skills to bear, and letting our lawyer bunch benefit
from somebody who can actually add and subtract.
Mr. JOHNSON of Wisconsin. I thank the Senator for his leadership.
Mr. SESSIONS. Mr. President, I yield the floor and I suggest the
absence of a quorum.
The PRESIDING OFFICER (Mr. Blumenthal). The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. KYL. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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