[Congressional Record (Bound Edition), Volume 148 (2002), Part 11]
[Senate]
[Pages 15648-15650]
[From the U.S. Government Publishing Office, www.gpo.gov]




               GRAHAM-SMITH PRESCRIPTION DRUG COMPROMISE

  Mr. GRAHAM. Madam President, yesterday, July 31, the Senate voted not 
to waive the Budget Act to allow consideration of the Graham-Smith 
prescription drug compromise. This legislation was estimated by the 
Congressional Budget Office to cost $390 billion over the 10-year 
period, a cost which turned out to be within a few percentage points of 
the legislation offered by the Republicans. Although unscored by the 
Congressional Budget Office, the sponsors of the Republican legislation 
estimated that their cost was in the range of $370 billion.

[[Page 15649]]

  However, in spite of the fact that both the Democratic and the 
Republican plans were above $300 billion, which had been provided in 
the 2001 Budget Act, almost 18 months out of date, in spite of that 
fact, we could not get the 60 votes to waive the Budget Act and allow 
consideration of the substance of the proposal to provide a critical 
additional health care benefit for America's older citizens.
  Had we gotten to the proposal, what would the Graham-Smith compromise 
have provided? It would have provided full coverage to the 47 percent 
of America's seniors whose incomes were below 200 percent of poverty, 
approximately $17,700 for a single person. It would have provided a 
mechanism for significant discounts, in the range of 15 to 25 percent, 
as well as a Federal subsidy on top of those discounts for all 
Americans. For all Americans, it would have also provided insurance 
against catastrophic costs, costs beyond $3,300 of payments made by the 
beneficiary.
  Think of this: Had we been able to get to the substance of our 
amendment, Americans could have had the opportunity of purchasing an 
insurance policy for $25 a year that would have given them the peace of 
mind they would not be crippled, potentially financially devastated, by 
the consequences of a major health emergency, such as a heart attack or 
being determined to have a chronic disease such as diabetes. All 
seniors who fell into that category would have had all of their 
prescription drug costs above $3,300 per year paid with only a modest 
$10-per-prescription copayment.
  This compromise would have afforded very real protection and 
assistance to all Medicare beneficiaries at a cost which both 
Republicans and Democrats had deemed to be reasonable.
  One of the fundamental reasons this failed yesterday and I appear 
today is because at the last minute--I correct that to say, within the 
last hour before the vote was taken, the information on this chart was 
dragged from some source and reproduced on a floor chart used by one of 
my colleagues and in handouts which were circulated in the Chamber, 
which purported to show that the effect of adopting our amendment would 
be to impose massive new costs on the States.
  It was stated that the first-year cost would be over $5 billion, and 
the 10-year cost would be $70 billion.
  Madam President, I accept the fact that we have rules in the Senate 
and that one of those rules requires that to waive the Budget Act, you 
have to have 60 votes. But what I cannot accept is the method that some 
of our opponents used to defeat our plan.
  There is an old adage: Everyone is entitled to their opinion; no one 
is entitled to their own facts.
  It is impossible to have an honest debate without everyone using the 
same factual basis as the premise for their arguments and opinions. We 
can't pass legislation in 1 week to make businesses adopt honest 
accounting practices and standards and then not apply honest accounting 
standards to ourselves. Using only partial information that 
intentionally misleads U.S. Senators--in this case, misleading them to 
the wrong conclusion--is demeaning to this, the world's greatest 
deliberative body.
  Several of our colleagues used a chart which misled other Senators 
into believing that the Graham-Smith amendment imposed these massive 
unfunded mandates. In the words of one of our colleagues: ``$70 billion 
on the States.''
  This is simply untrue. It is, in my opinion, an intentional 
misrepresentation of the facts.
  The floor chart used yesterday, as well as the paper distributed on 
the Senate floor, contained no source as to where the data was 
analyzed, or who among our colleagues would assume responsibility for 
distributing this information. No one--in violation of the spirit of 
the Senate rules--would accept personal responsibility for these 
distortions.
  What happened yesterday was Enron accounting come to the Senate 
Chamber. It makes a point based on an inaccurate representation of the 
facts. It seems to me that if we are going to require companies to be 
more accountable, require their chief executives to sign the financial 
statements before they are released to the public, we should require 
the same of ourselves in the Senate.
  In addition to distributing this distorted information, there were 
also statements made as to the motivation of the sponsors of this 
amendment. I will quote a statement made by one of our opponents who 
stated that:
  The sponsors chose to spring the text of this amendment on the Senate 
yesterday for the first time. Perhaps they thought they could slip in 
something new that we would not catch. Well, we caught it, and you know 
we have caught it by the speeches of the Senator from Maine. We 
actually have had a chance, and we have studied the Graham amendment. 
The Graham amendment imposes a massive new burden on States just when 
State treasuries are in terrible shape.
  We have been accused of bad faith in offering this amendment, 
surreptitiously attempting to commit the States to a massive new 
unfunded commitment. That is not true. In fact, the Congressional 
Budget Office is the basis of the analysis that we have done. It was 
the basis of the support that was sought and gathered for the Graham-
Smith amendment. None of its supporters, intentionally or otherwise, 
would have allowed a provision to be included that increased State 
costs.
  On the other hand, we have an analysis that was developed by an 
unknown source, distributed by unknown persons to the Senate floor.
  The basis of our estimate is the nonpartisan Congressional Budget 
Office, a set of experts with no political stake in this debate. The 
Congressional Budget Office estimates that the Graham-Smith amendment 
would not increase State spending.
  Let's look at an analysis upon which the Congressional Budget Office 
predicated that statement, realities which the Republican analysis 
totally ignores: States would receive considerable relief from the 
creation of this new Medicare prescription drug benefit.
  Let me explain why. Under current law, States are required to provide 
drug benefits to those eligible for Supplemental Security Income, SSI--
generally, those below 75 percent of poverty--and others fully eligible 
for Medicaid.
  In addition, some States have elected to go up to 100 percent of 
poverty. Those seniors' drug costs are now paid by the States at their 
regular Medicaid matching rate. Therefore, States are paying for part 
of total drug costs for these seniors, and the Federal Government is 
paying for part.
  Under our proposal, the Federal Government would assume 100 percent 
of the cost above $3,300 incurred by each senior currently covered by 
the Federal-State match.
  In addition, the Federal Government would be solely responsible for 5 
percent of the costs incurred by each senior currently covered by the 
Federal-State match; that is, 95 percent of the costs below the stop 
loss would continue to be shared between the State and the Federal 
Government.
  However, all the costs above $3,300 would be assumed by the Federal 
Government. Additionally, the Federal Government will pay for 100 
percent of 5 percent of the drug costs.
  The 100-percent Federal assumption of costs that are currently shared 
between the Federal and State governments would result in substantial 
savings to the States. None of these savings are included in this 
analysis.
  Just yesterday, the administration approved a Medicaid waiver for the 
States of Maryland and Florida. This waiver will allow those States to 
extend coverage for prescription drug costs to their citizens between 
175 percent and 200 percent of poverty, respectfully, at the regular 
Medicaid matching rate.
  These States, plus others with similar waivers, would receive 
significant relief from having both a Medicare drug benefit and a 
higher Federal matching rate--including 100 percent matching rate for 
costs of those with incomes between 150 and 200 percent of poverty. 
None of these savings are included in the analysis presented by my 
Republican colleagues.

[[Page 15650]]

  The Graham-Smith amendment does not include a ``maintenance of 
effort'' provision on current State spending on these programs.
  According to the National Council of State Legislators, 31 States 
already provide pharmacy assistance programs and Medicaid drug waiver 
programs to seniors above 100 percent of poverty. Three more are 
authorized to do so, but have not yet implemented their authorization. 
All of these States would receive significant relief under my proposal. 
Yet, none of these savings are included in the analysis presented by my 
Republican colleagues.
  According to the Congressional Budget Office, states are currently 
spending roughly $95 billion on prescription drugs for Medicare 
beneficiaries through the Medicaid program. A significant portion of 
this amount would be assumed by the Federal Government under the 
Graham-Smith compromise amendment, resulting in savings to the States.
  The floor chart used by my colleagues showing $70 billion of new 
expenses was incomplete. I don't know if the $70 billion figure is 
accurate, but I do know that the State savings achieved by the Federal 
assumption of costs currently borne by the states is not reflected on 
that chart.
  So what we have is an analysis that only stated what the new cost to 
the States would be as a result of this program and failed to include 
the new savings to the States as a result of this program.
  Even the most junior budget analyst would not make the mistake of 
forgetting that States will save dollars as a result of the Graham-
Smith amendment from the Federal assumption of many costs.
  This is more than an oversight; it is a deliberate omission 
intended--unfortunately, in some instances it apparently had this 
effect--to scare off potential supporters of a responsible prescription 
drug benefit for older Americans.
  This analysis is but one of several politically motivated analyses 
which have come out of the White House that conveniently support their 
policy positions.
  Let me just review a few of those positions. On July 18, 2002, the 
Office of Management and Budget wrote:
  However, the administration opposes S. 812, [the underlying generic 
drug bill that the Senate, by an overwhelming majority, passed 
yesterday] in its current form because it will not provide lower drug 
prices.
  No analysis by the Office of the Actuary supports that claim, and the 
Congressional Budget Office estimated that the bill will save $60 
billion to American prescription drug consumers over the next 10 years.
  The Senate, by its overwhelming vote, obviously decided with the 
Congressional Budget Office and not with the White House Office of 
Management and Budget.
  Second, the White House produced an analysis claiming that the 
original Graham-Miller-Kennedy bill would ``bankrupt'' the Medicare 
trust fund--when this drug benefit, like the drug benefits in the 
Republican plan, is funded through a distinct fund that has nothing 
whatsoever to do with Medicare's Part A.
  Third, just this month, OMB made its midsession review look 
substantially more rosy by including only $190 billion for prescription 
drugs, despite the fact that the Secretary of Health and Human 
Services, former Gov. Tommy Thompson, stated before Congress in April:
  Congress has seen fit to raise the funding for prescription drugs to 
$350 billion, and I came here today to indicate to you that the 
administration wants to work with that latter number.
  This administration has not demonstrated in actions or words that it 
prioritizes State fiscal relief. As such, its concern for States, as 
expressed on this distorted chart, is a new revelation, only emerging 
when it is seeking an excuse to oppose an amendment to provide 
significant prescription drug assistance to America's seniors.
  Less than a week ago the Administrator of Medicare, Mr. Tom Scully, 
stated the administration opposed increasing the Medicaid matching rate 
even temporarily, an amendment which has been aggressively sought by 
the States in order to receive some relief from rapidly escalating 
Medicaid costs. The administration opposed that amendment. The Senate, 
by an overwhelming vote last week, adopted it.
  I might say that during the consideration of the tax bill, I was 
concerned that the proposal of the White House was to accelerate the 
repeal of the State's portion of the estate tax at a substantially 
faster rate than the repeal of the Federal estate tax. In fact, the 
State's portion of the estate tax will evaporate in approximately 3 to 
4 years, while the Federal Government's share of the estate tax 
continues until the year 2010.
  The effect of that early acceleration of the repeal of the State 
component of the estate tax will have a significant adverse financial 
effect on the States beginning this fiscal year.
  The 47 percent of Medicare beneficiaries with incomes below 200 
percent of poverty would have gained comprehensive drug coverage had 
the Graham-Smith amendment been adopted. Seniors in all States would 
have been helped. Seniors in all States would have been given the peace 
of mind that if they suffered a debilitating illness or disease or 
accident that they would have been helped with their catastrophic drug 
costs, and the States would have been helped by getting relief through 
the Federal assumption of costs that they are currently bearing.
  I conclude by saying that I hope in future debates on the Medicare 
prescription drug benefit that we will all rely on the facts, not on 
incomplete and distorted analysis. Our seniors deserve better than what 
we have done to date, because what we have done is talk about, talk 
about, talk about, the need for a prescription drug benefit. We have 
not yet delivered, delivered, delivered a responsible prescription drug 
benefit.
  It is going to be our challenge over the next few weeks, working with 
the facts and with honest analysis of those facts, to arrive at a 
prescription drug plan that will meet the needs of our seniors, will 
provide us with the basis of integrating a prescription drug benefit 
into a comprehensive health care program for older Americans, and to 
find the political will to act this year.
  That will be our challenge and that quest will be advanced if we all 
agree that we are going to differ in our opinions, yes, but that we 
will all agree that we would use the same set of legitimate facts.
  I thank the Chair, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. NELSON of Florida. Madam President, I ask unanimous consent that 
the order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NELSON of Florida. Madam President, I wish to speak on a matter 
of great importance to this country, keeping the soundness of Social 
Security--and I say to my colleague from Florida how much I appreciate 
the great leadership that he has given to the Nation in the last 
several weeks as he has led the effort to try to honor the senior 
citizens of this country with a prescription drug benefit that would 
modernize Medicare to provide for what senior citizens ought to have in 
the year 2002.
  It has been my privilege and pleasure to support him in his efforts. 
It is beyond me why we could not get the 60 votes. Some of the 
misinformation that was distributed, as the senior Senator from Florida 
has explained, is part of the reason. Part of the reason I happen to 
think has something to do with partisan politics as well, 
unfortunately, during an election year.
  I want him to know my profound appreciation for him as a colleague, 
as a friend, and as a leader for this Nation in offering a needed 
change to Medicare for a prescription drug benefit.

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