[Congressional Record (Bound Edition), Volume 149 (2003), Part 22]
[Senate]
[Pages 30902-30916]
[From the U.S. Government Publishing Office, www.gpo.gov]




   MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 
                        2003--CONFERENCE REPORT

  The PRESIDING OFFICER. Under the previous order, the Senate will 
proceed to the consideration of the conference report to accompany H.R. 
1, which the clerk will report.
  The assistant legislative clerk read as follows:

       The Committee of Conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     1), to amend title XVIII of the Social Security Act to 
     provide for a voluntary prescription drug benefit under the 
     medicare program and to strengthen and improve the medicare 
     program, and for other purposes, having met, have agreed that 
     the House recede from its disagreement to the amendment of 
     the Senate, and agree to the same with an amendment and the 
     Senate agree to the same, signed by a majority of the 
     conferees on the part of both Houses.

  The PRESIDING OFFICER. The Senate will proceed to the consideration 
of the conference report.
  (The conference report is printed in the proceedings of the House in 
the Record of November 20, 2003, Book II.)
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Mr. President, we are now on this historic piece of 
legislation. I want to begin a discussion of that shortly.
  But since the majority leader discussed the subject of asbestos 
legislation, and the chairman of the Judiciary Committee, who has been 
largely responsible for moving that legislation as far as it has come 
to date, is here and wishes to make a couple of comments, I would like 
to yield a couple of minutes to the distinguished Senator from Utah and 
then regain the floor to discuss the Medicare bill.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Utah.
  Mr. REID. I am sorry, what was the concern?
  The PRESIDING OFFICER. The Senator from Arizona has yielded to the 
Senator from Utah for 2 minutes and then will reclaim his time. Without 
objection, it is so ordered.
  The Senator from Utah.


                            Asbestos Reform

  Mr. HATCH. Mr. President, I thank my colleague. I appreciated the 
remarks of the distinguished majority leader on the asbestos reform 
legislation. I certainly appreciate the kind remarks of the minority 
whip with regard to this. I think both of them spoke eloquently.
  I rise today in support of the comments of the distinguished majority 
leader with respect to the asbestos legislation. This is an absolutely 
vital issue, and we have the opportunity with S. 1125, the Fairness in 
Asbestos Injury Resolution Act, to correct what has been a gross 
injustice--both to asbestos victims and to our economy.
  For more than 20 years now, compensation to legitimate victims of 
asbestos exposure has been delayed and diminished, while scores of 
companies with almost no connection to the problem have had to file for 
bankruptcy and hundreds of others live under the constant threat of 
insolvency from litigation. As a result tens of thousands of victims 
are not compensated and tens of thousands of workers have lost their 
jobs.
  We've heard the statistics, but they bear repeating. The RAND 
Institute for Civil Justice tells us that, to date, approximately 70 
companies have been forced into bankruptcy--at least three with 
operations in my home state of Utah.
  The number of claims continues to rise as does the number of 
companies pulled into the web of this abusive litigation, often with 
little, if any, culpability. More than 600,000 people have filed 
claims, and more than 8,400 companies have been named as defendants in 
asbestos litigation.
  This has become such a gravy train for some abusive trial lawyers 
that over 2,400 additional companies were named in the last year alone. 
RAND also notes that ``about two-thirds of the claims are now filed by 
the unimpaired, while in the past they were filed only by the 
manifestly ill.'' Former Attorney General Griffin Bell, amongst many 
others, has denounced this type of ``jackpot justice.''
  To address this problem, I introduced a bipartisan bill with my 
friends Senators Ben Nelson, Mike DeWine, Zell Miller, George 
Voinovich, George Allen, Saxby Chambliss and Chuck Hagel. This bill 
creates a fund to provide fair compensation to victims, while reducing 
wasteful transaction costs dramatically. Let me first just dispel a few 
myths about this bill and set the record straight on a couple of 
issues. First, some Democrats and unions are saying there isn't enough 
money in the bill but the fact is that this bill gets more money to 
claimants on average than the current system does.
  Let me explain how. There have been several studies of future 
asbestos-related costs under the current system, and the one which 
shows the highest reasonable estimate of prospective costs--the 
Milliman study--would result in approximately $92 billion for victims, 
after attorney fees and expenses.
  Under the FAIR Act, it is estimated that claimants will receive 90 
percent or more of the total funds under the no-fault, non-adversarial 
system. This means the FAIR Act fund--which will have $114 billion 
under the agreement proposed by Senator Frist--will allow claimants to 
take home more than $100 billion. This is more total money than they 
are projected to receive under the current tort system.
  But it is not just more money in the pockets of victims, it is faster 
and more certain compensation as well. We anticipate that claimants 
will not have to endure years of discovery battles and endless 
litigation before they get paid. Currently, some victims are dependent 
on the solvency of businesses to decide if they get paid or not. Under 
the FAIR Act, these victims will no longer have to go without payment. 
It is time to end the current system of Jackpot Justice where only some 
win and many lose.
  Some have also argued that there aren't adequate safeguards to ensure 
solvency of the fund. Baloney. This fund--which is funded at the 
highest reasonable claim-rate scenario--is equipped with many 
mechanisms to ensure that the pay-in and pay-out requirements are met. 
This includes borrowing authority against future contributions.
  It also includes guarantee surcharge and orphan share reserve 
accounts which set aside money to grow and pay for unexpected 
shortfalls. Another safeguard is the provision to empower the Attorney 
General to enforce contribution obligations and ensure collection. And 
beyond these, there is $10 billion in contingent funding as one more 
additional safety net. On top of all these safeguards, if the fund 
still becomes insolvent, claims would revert back to the tort system--a 
provision, by the way, which Democrats insisted be part of the bill.
  Given that this bill is a clear net monetary gain for legitimate 
victims,

[[Page 30903]]

and provides payments faster and with more certainty, I am at a loss as 
to why anyone could object to this bill. The unions that continue to 
oppose the bill risk throwing away the last, best chance to compensate 
fairly those who are truly sick and provide some protection to those 
whose jobs and pensions are at risk because of the asbestos litigation 
crisis.
  Quite frankly, the only entity that stands to lose under this bill is 
the plaintiffs' bar which has siphoned off more than $20 billion of the 
costs incurred on this issue as of the end of last year. If the FAIR 
Act is passed, they will not be able to use unimpaired claims to 
continue to squeeze a projected $41 billion more for themselves from 
remotely-connected companies by abusing a broken system.
  Fair is fair--I am all in support of compensating plaintiffs' 
attorneys for the value of their work. But when it diverts valuable 
resources away from sick victims, something is wrong with the system.
  No one can accuse us of being unwilling to compromise in order to 
finally be able to address this overwhelming crisis being caused by 
asbestos litigation. When you look at where our bill started--and it 
was a good start--and where it is now, our efforts at compromise are 
blatantly clear.
  In May we circulated a bipartisan draft measure and my staff met with 
Democrat staff to listen to their concerns and we incorporated several 
requests--even before introduction. We then embarked on several weeks 
of markup which saw 23 Democratic-initiated amendments adopted into 
this legislation. Now I didn't agree with all of them, but it can 
hardly be said that there hasn't been strong participation by Democrats 
on this bill. This chart behind me lists just some of the changes we 
made at the behest of Democrats; let me highlight a few of them for 
you.
  We increased overall funding. Our bill started with a mandated $94 
billion in contributions, which by most reasonable estimates should 
have provided sufficient resources for compensating legitimate 
claimants. In committee we increased base funding to $108 billion 
dollars. That additional $14 billion is not pocket change. We also took 
steps to ensure the enforcement of contributions as an added protection 
to the solvency of the fund.
  We increased the number of claimants that would receive compensation 
by modifying the qualifying medical criteria and by including a 
provision to accommodate the unique circumstances of the victims in 
Libby, MT.
  Moreover, we increased the amount of money that will go to claimants. 
Even though our original claim values would have on average provided 
more money to legitimate claimants, we increased the values even more. 
And we removed most collateral source offsets to ensure that more of 
the award goes directly to the claimant.
  These changes listed on the chart behind me do not even include other 
changes that we have offered since the bill was reported out of 
committee to even further accommodate their requests, such as an 
additional $6 billion increase in overall funding and significant 
increases in claims values in many categories. And we also offered a 
more flexible borrowing authority as another safeguard for solvency.
  Now I understand that some want to make further changes, including 
streamlining the claims process even more, and I have said I'm willing 
to look at such proposals. But this and other complaints have been 
raised without the follow up of a concrete, alternative proposal. I 
hope that before this issue comes up in March as the Majority Leader 
indicated that we will resolve the outstanding issues.
  We cannot delay any longer--we need to ensure that the truly sick get 
paid, while providing stability to our economy by stemming the rampant 
litigation that has resulted in a tidal wave of bankruptcies, 
endangering jobs and pensions. This crisis reaches far and wide--and it 
hurts everyone.
  On Monday, this body will pass an historic bipartisan Medicare bill 
that will provide our seniors with drug benefits.
  We can and should use this spirit of bipartisanship to come together 
on the asbestos issue.
  I thank Senator Frist for his leadership on Medicare and the 
constructive role he is playing on asbestos. Working together I am 
confident that Senators Daschle, Specter, Leahy and Dodd will all join 
together when we bring the asbestos bill to the floor in March.
  Mr. KYL. Mr. President, I say again, this asbestos legislation, 
discussed by the leader, is very important for us to conclude early 
next year, and I make the point again, were it not for the work of the 
chairman of the Judiciary Committee, we would not be at the position 
where we hope to be close to finishing that legislation at some point.
  Mr. CRAIG. Will the Senator yield to determine where we might be this 
morning?
  There are several in the Chamber who wish to begin to speak on the 
Medicare prescription drug issue. Have we established any order for 
that purpose?
  The PRESIDING OFFICER. There is no order other than to alternate 
speakers.
  Mr. REID. Mr. President, if the distinguished Senator will yield for 
a response?
  Mr. CRAIG. I will be happy to yield.
  Mr. KYL. I will be happy to yield to the Senator from Nevada.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. What is in place is an agreement, gentlemen's in nature, 
that we would go back and forth. We are trying to work out an agreement 
where we would divide the time between proponents and opponents until 
11 o'clock tonight. That has not been done yet, but there is something 
that has been typed up.
  The reason going back and forth may not be fair is someone may speak 
for an hour and a half and someone else may speak for 10 or 15 minutes. 
So we have to come up with something better than that. That is what we 
are trying to do now.
  Mr. KYL. Mr. President, might I suggest that during the time I am 
speaking, those who would like to speak in conjunction with the Senator 
from Nevada begin to work up a schedule. I would be happy to propound a 
unanimous consent request when that is concluded to reflect the 
agreement, at least for the next several hours, if that could be done.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Mr. President, this is a historic day. Obviously, when one 
goes back to 1965 and thinks about the creation of Medicare, a lot has 
changed since then. We are here today to begin debating in the Senate a 
bill which passed early this morning in the House of Representatives, 
has long been advocated by President Bush, and which many people have 
worked on for a very long time, to try to modernize our Medicare system 
which, after 35 years, we recognize in this new 21st century needs to 
be changed to some extent.
  For example, during that period of time, prescription drugs have 
become a major component--indeed, in many cases the first component--of 
treatment for ailments, disease, and afflictions of people.
  Mr. President, 35 years ago prescription drugs were used to alleviate 
symptoms of pain and occasionally to treat conditions, but more 
intrusive methods were the order of the day at that time. The Medicare 
program for seniors reflects the conditions then by covering hospital 
stays and physician benefits, but not outpatient prescription drugs. 
The prescription drugs which have over the last 35 years become a key, 
if not the key, component of medical treatment have not been a part of 
Medicare because they were not as key in 1965. So we know we need to 
add prescription drug coverage for our seniors and for those who are 
disabled and who qualify for Medicare.
  There are other changes we know, also, that would help to strengthen 
Medicare, to ensure that as we proceed to provide Medicare to the baby 
boom generation, we will be able to do so with the highest quality of 
care possible, at prices that both they and the American people can 
afford and, as I say, which really encompasses the new

[[Page 30904]]

concepts of modern medicine in this treatment.
  So the question was how we would develop a system to provide 
prescription drugs as a component of Medicare. There were several 
different options, but the option that has been finally settled upon is 
one which I can support, and as someone who actually advocated a 
somewhat different approach, I would like to speak to those primarily 
who, like me, were not particularly pleased with the initial direction 
in which this legislation proceeded, to talk about why, at the end of 
the day, it is the best we can do under these circumstances and I think 
under any foreseeable circumstances of the near future, and therefore 
why it is important to move forward with this legislation.
  It is momentous, it is huge in terms of the amount of money we are 
talking about, a commitment over the next 10 years of $400 billion. 
That was the amount that Congress agreed to with the adoption of our 
budget and the crafting of this legislation. We resolved that this 
money would be set aside to provide this prescription drug benefit and 
make changes in Medicare to ensure the benefits of Medicare would be 
available to everyone in a quality way during the 21st century.
  Let me discuss first of all some disappointments I have with the bill 
because these have been discussed by others and I want them to know I 
am very cognizant of the concerns that have been expressed.
  I served on the conference committee that crafted this legislation 
and I spent literally hundreds of hours working with colleagues through 
these issues. Some of the battles we fought, I helped to prevail on, 
others we did not prevail on. But it is the nature of compromise 
between the two bodies and between the two parties, especially when the 
Senate is almost equally divided that no one is going to get everything 
they think is best.
  Let me first of all talk about the approach that was taken here and 
why in some respects I think we made some wrong turns, but how we have 
tried to recognize that and to ameliorate the effects of those wrong 
turns as much as we could.
  There was a sense in this country, because there are many people who 
could not afford all of the prescription drugs they need in their 
treatment, that the Medicare plan had to be modified to ensure they 
could have access to those drugs at a reasonable cost. That was an 
approach that many Members thought would best utilize the funding 
available, to provide the maximum amount of benefit to those who most 
needed it.
  Somewhere along the way, a major decision was made which 
fundamentally altered that concept. It was a decision that was strongly 
favored by the AARP, for example, a group which I am very pleased to 
say is in support of this legislation and has taken a strong role in 
educating America about the benefits of this legislation. That decision 
was to make the benefit of prescription drugs universal; that is to 
say, to make it available to all Medicare-eligible people, not simply 
to try to help those who needed the help the most.
  The first result of that was it significantly reduced the amount of 
money we could make available to those who need it the most because, 
obviously, if you provide a universal benefit, you are providing it to 
everyone who qualifies for Medicare basically equally to those who do 
not need the benefit, because they have more money, as well as those 
who do need the benefit. Once that decision was made, it reduced the 
amount of money we could allocate to help those who needed the help the 
most. I regret that. We could have structured a plan that would have 
more targeted the benefits where they were needed the most.
  In addition, we created some other problems. One of the problems is, 
employers who provide prescription drug retiree benefits will have less 
incentive to do that in the future because the Government will do so if 
they do not. Many will argue, why should we spend our money, our 
corporate funds, to support the prescription drug retiree benefits that 
we have done in the past when, if we stop that coverage, the Government 
will pick it up? The result of that was we had to allocate over $70 
billion of this money to be paid to these business plans, union plans, 
and even government plans, that provided retiree health care benefits 
with drug coverage. We had to provide that money to them to enable them 
to continue providing the coverage. Some call it a subsidy. It is a 
fair term, I suppose. But one might say we are paying them three 
fourths of what it would cost the Government, to provide this 
particular benefit.
  So from the Government's point of view, we are saving money because 
if these company plans did not continue the coverage, the Government 
would have to pick up 100 percent of the cost. Nevertheless, it took a 
chunk of the money out of the program to pay for benefits that are 
already being paid for by somebody else, thus further reducing the 
amount of money we could allocate to those that need the care the most.
  So those are just two examples of problems created by this initial 
decision.
  The original idea of many Members was that we should provide more 
choices to seniors. Many Members came to that conclusion because 
Federal Government employees such as Members of Congress have a lot 
more choices in our drug coverage. We are entitled to enroll in 
something called the Federal Employees Health Benefits Program, or 
FEHBP, and we have a lot of health insurance options. These insurance 
options are integrated health-care plans. They provide all of our care, 
from hospitals to doctors as well as prescription drugs.
  A lot of Federal employees, 10 million strong, like those kind of 
plans. Many are PPOs, preferred provider organizations, where you go to 
any one of the doctors on a list who has signed up with that 
organization, or you can even go out-of-network, you can go to a 
different doctor, and that is still OK. This was the concept the 
President originally announced and it is a concept I strongly supported 
because it would maximize choices.
  At the same time, we recognize that a lot of people would still want 
to maintain what they currently have, what we call traditional fee-for-
service Medicare, and simply add a drug benefit on top of that. We did 
not want to take that choice away. So the concept was to have basically 
two choices: Stay in traditional Medicare with the new drug benefit, or 
sign up with one of these new insurance programs, a PPO or what we call 
today Medicare+Choice, which is predominantly HMOs. That choice has 
been created in this legislation. The choice is a good choice.
  I regret, however, that I don't think we have given the health 
insurance option a good enough chance to attract very many 
beneficiaries. There are efforts in the bill to do that, but I think we 
put too many restrictions on the PPOs, in particular, to expect they 
will be very successful. For one thing, we strongly regulate how much 
they can be paid. As a matter of fact, their payment rates are directly 
tied to what we pay in regular fee-for-service Medicare. That is price 
control. Congress and the administration set the prices that can be 
paid under the traditional Medicare Program. We were trying to get away 
from that heavy price control with this new insurance option. 
Unfortunately, in an effort to make sure we could keep the costs 
ratcheted down and compare those costs to what we are paying for 
traditional Medicare, there is a direct relationship between what we 
pay in traditional Medicare and what will be paid on the private health 
insurance side. It is not really like regular private insurance. This 
is very highly regulated, controlled price, controlled private 
insurance as the alternative to fee-for-service Medicare.
  I think it is less likely those PPOs are going to succeed as a result 
of that. Nevertheless, we at least, for the first time, have the 
concept of private health insurance as an option to traditional fee-
for-service Medicare for all beneficiaries.
  Senator Nickles, in particular, and I worked strongly to increase the 
flexibility that the insurance option could provide so there could be 
literally dozens of products out there like the

[[Page 30905]]

FEHBP for Federal employees, and people could decide what was best for 
them. Again, unfortunately, that flexibility has been greatly limited 
in this legislation, primarily because of concerns by the Congressional 
Budget Office that if very much flexibility were provided, the cost of 
the program could exceed the $400 billion.
  As a result, the options that are offered by these private plans will 
be very limited. For example, as you will hear others get into the 
details of the legislation, especially the drug benefit--and my 
colleague, the Senator from Iowa, the chairman of the Finance 
Committee, Mr. Grassley, is in the Chamber. I know he will go into 
great detail about precisely how this works.
  When that occurs, and you see how this benefit is going to be 
provided, one of the things you will see is that even though there is a 
very generous benefit--the Government will pay 75 percent of your drug 
costs up to $2,250, after a $250 deductible; so it will pay about 
$1,500 worth of drug benefits--at that point, then, the individual is 
going to be responsible for a little under $3,000 worth of drug 
benefits, before the catastrophic coverage of 95 percent Government-
paid kicks in. Some people refer to this as a donut hole.
  Obviously, with $400 billion allocated to the problem, we are not 
going to be able the pay all of everybody's drug costs. There is not 
enough money in the Federal budget for us to do that. As a result, you 
can only cover what that amount of money will cover.
  Well, it is hoped that the private sector insurance option will 
provide different ways of ensuring against that donut hole, ensuring 
against that out-of-pocket expense that individuals will have to pay. 
But, unfortunately, that cannot be done under this legislation. The 
threshold can be raised, but the out-of-pocket amount still has to 
remain the same. As a result, there is a limitation on the insurance 
product that can be offered.
  Again, Senator Nickles and I had hoped there would be a lot more 
flexibility. I am hoping in the future we can loosen this up so these 
health insurance options can act like regular insurance options.
  Another point: If you go to an insurance company today, a preferred 
provider organization, and you would like to get treatment from a 
different doctor who is not in their network, you can go to that 
different doctor. The plan will only pay an agreed-upon amount, and 
then you are billed for the difference between that and the physician's 
reasonable and customary fee. That is standard practice today.
  That cannot be done under the way this legislation is written. That 
has to be fixed as well. Right now there is a price cap on that, and, 
therefore, it will discourage people from going out of the network, 
which will discourage people from signing up with PPOs in the first 
place.
  These issues will have to be addressed later because we did not give 
sufficient flexibility to the insurance company alternative in this 
current bill. Again, I am speaking primarily to those who, like me, 
approach this with the idea that we could provide coverage similar to 
FEHBP coverage that the President originally articulated as the goal, 
and as someone who did not win all of the battles in this negotiation, 
but who still believes that at the end of the day, this is the best we 
are going to do, either now or any time in the future, that I can 
predict, given the politics, given the closeness of the Democrat-
Republican split in the Senate and in the House of Representatives and 
the various other factors that influenced the decisions that we made.
  Let me talk a little bit more about the drug benefit. Seniors today 
buy Medigap insurance, and that provides them a certain degree of drug 
coverage. It is regulated by the Government, but I think a lot of 
seniors believe they have pretty good drug coverage because of the 
Medigap insurance they have. The reality is, they are paying a lot of 
money for not that great of coverage. They pay almost as much money in 
premiums as the amount of coverage they receive. So it is not 
completely dollar for dollar, but it is not the kind of insurance that 
ordinarily we would think of.
  As a result, the drug benefit that we provide here will be more 
substantial for the amount of money that is paid. But I do fear a lot 
of people will see the drug benefit we provide here as less than they 
are able to obtain today through their Medigap insurance, and it is 
going to be incumbent upon all of us to explain to people how this drug 
benefit will work. Again, it calls for us to try to loosen up the way 
the private insurance market can provide the drug coverage to meet 
seniors' objectives, not all of which are precisely the same.
  Therefore, in order to convince them there are good alternatives to 
what they have today, since they are not going to be able to purchase 
the new drug benefit through the means of Medigap insurance anymore--
that will be done through a different mechanism--it is going to be 
important for us, I think, to provide them the maximum type of 
flexibility and choices, something, again, that we are going to have to 
address in the future because it is too restricted in the bill as we 
have it written today.
  There are other items--and I do not want to dwell on the negative--
but just to cite two or three others to show areas in which we could 
have done better.
  Today, we reimburse physicians and hospitals in a very irrational 
way. It is very tightly controlled. It is price controls. We never get 
it right. We tend to want to save costs, so we do not reimburse them 
enough, and then hospitals begin to shut down, doctors begin to get out 
of Medicare, and we realize we have made a horrible mistake. So then we 
ratchet the payments back up, and it is a very herky, jerky way of 
reimbursing the very people we rely upon to provide the critical health 
care that we want. As a result, we have tried to figure out ways to 
make this more rational.
  Well, the best example is in the case of oncologists, doctors who 
provide us drugs to treat cancer. The oncologists are not reimbursed at 
anywhere near what it costs them to provide this service for us. As a 
result, what they have to do is to buy the drugs for the chemo part of 
chemotherapy, and they mark up the value of those drugs, sell them to 
the patient, and that is how they get reimbursed for what they do. Of 
course, people have said: Well, it is a huge markup. They are making a 
lot of money off these drugs. And it is true that there is a huge 
markup. It is not a rational way of reimbursing them.
  So what we tried to do was to go back and fix the basic formula, 
called the practice expense formula, to figure out how much it really 
costs those doctors to stay in business to provide this all-critical 
care for cancer patients, and we begin to re-adjust that formula so it 
will pay them more, and, at the same time reducing the markup they get 
on the drugs so they would not have to be paid out of that pot of 
money, in effect.
  Well, we got about halfway there, but we still have more work to do 
on that particular formula. So it is just an example of how the 
Medicare system served seniors well, but there are clearly things in it 
that need to be fixed if we are going to continue to provide high-
quality care and to ensure that we have physicians and hospitals that 
can stay in business to take care of us.
  Cardiothoracic surgeons are another group. The very best of these 
surgeons go into the operating room with their own team. This is life 
and death. They have teams that work together for years. They have had 
a lot of experience in doing what they do. But they do not get 
reimbursed for their team members, their nurses, and so on. What they 
have to do is pay for that out of their own pocket. You can obviously 
see, at a certain point, they are not going to be able to provide the 
high-quality care. What they have to do is basically go into the 
hospital and take whoever the hospital has at that time. They do not 
work together as a team, and they provide about half as many people as 
some of these surgeons need in order to provide the highest quality 
cardiac care.
  Here is another area in which we could have provided at least a 
demonstration project or two to figure out

[[Page 30906]]

how best to reimburse these cardiothoracic surgeons. We failed to do so 
in this legislation. We need to do that in the future. Cost containment 
was another matter. We wanted, given the fact this legislation could 
explode in cost, to have something in this bill that would ensure that 
the costs would be controlled.
  There is a section in here that purports to do that, but it is 
largely illusory. It basically says, at a certain point in time we have 
to get together and make some recommendations. The President has to 
send some recommendations down to us. We do not have to act on them, of 
course. And it is really very hard to change the rules of the Senate to 
force us to act on something like this.
  So I just want to let my conservative friends know that, no, there is 
not good cost containment in this legislation. But I would also ask 
them to think about one other thing; and that is, there is no free 
lunch. If you want high-quality health care, you are going to have to 
be willing to pay something for it.
  I think sometimes conservatives look at one side of that ledger but 
not the other. We have to do everything we can to ensure that taxpayers 
can afford this expense. But we also do not want to be penny-wise and 
pound-foolish when it comes to providing quality health care for our 
seniors and for others who are on Medicare.
  Indeed, for those who say we are going to control the costs in this 
legislation, I would say that the means of doing so that are in the 
bill are primarily price controls by the Government, which have been 
demonstrated not to work very well, and I think we can expect that the 
younger generation is going to bear the full brunt of this expense.
  It is a $400 billion expense over 10 years. It is not taken out of 
any kind of payroll tax or other kind of payment by the beneficiary for 
that segment of what we are providing. It is going to be paid for out 
of the pockets of people who are working to earn a living and pay for 
their kids' education. We have to stop and evaluate whether, with a lot 
of seniors who are well enough off to afford drug coverage, it is fair 
to ask their kids, who are struggling at this point to make a living, 
to bear more of the burden.
  There is well over $100 billion of this, probably about $150 billion, 
in premiums and copays and deductibles that will go toward the benefit 
we are providing here that is worth $400 billion. But let us not forget 
that the $400 billion money is being paid by taxpayers. So cost 
containment is important, and it will boil down to the discipline that 
we in the House and Senate and the President can exercise in keeping 
the right balance between cost containment and providing high-quality 
care.
  I have stressed the negatives to try to establish a point. I didn't 
get my way negotiating this legislation despite hundreds of hours of 
work in the conference committee. Nobody got 100 percent of what they 
wanted. For those conservatives who are disappointed because of the 
kind of things I have been talking about here or the lack thereof that 
shows we really missed a historic opportunity to make the bill better, 
I would like now to address why I think, nevertheless, they should 
support the legislation.
  It boils down to the fact that it is extraordinarily difficult with 
something this big and this complicated and important to so many 
people, with every Senator and every Representative having a very big 
stake in trying to get it right, to reach the kind of compromise that 
is going to make any particular group happy.
  I note there was a scathing op-ed piece against one of the Democratic 
Members who was substantially involved in these negotiations, 
criticizing him for not representing his point of view well. I can't 
tell you how wrong the writer of that piece was. From my perspective, 
that distinguished Senator got far more than I did out of this. He won 
more of the battles than I did.
  I think one should be a little bit careful about simply putting the 
ideology out there and saying, because one side didn't get everything 
it wanted, therefore it is a bad bill. The reality is that under the 
circumstances we face today, I think it would be impossible to put 
together a bill that would provide drug benefits for our seniors that 
would do it any better than what we have done here.
  Why do I say that? Some people say, let's let this bill fail and we 
will come back and simply provide a drug benefit to those who need it 
the most. I think we have gone too far for that. Groups such as AARP 
are not going to support that. Their support is very important for a 
program such as this. I don't think a lot of Senators would support 
that. So even though that might have been how I would have liked to 
have started this process, I don't think that is going to pass.
  Do we let 2 or 3 more years elapse without providing a drug benefit? 
I don't think that is an alternative. So I would challenge anybody who 
says this bill isn't perfect to demonstrate to me how they could cobble 
together a majority to provide an important drug benefit and still 
achieve all of the objectives they want to achieve and get it passed.
  We do need to include prescription drugs in Medicare. They haven't 
been included, and we all know this is the preferred method for 
treatment by most physicians for many illnesses and diseases today. We 
also need to ensure that those who don't have coverage can get it. The 
options we provide in this bill at least get us part way down that 
road.
  Importantly, we will be reducing the costs of prescription drugs both 
to third party payers, whether it be the Government or the employers, 
as well as the seniors for the part they have to pay. How is this done? 
There are a variety of mechanisms in the bill. One of them is the fact 
that the Government and the private plans will be buying in bulk. 
Everybody can understand that concept. You can buy for a lower cost if 
you buy in bulk. Another is that there are a lot of incentives to use 
fewer drugs, to use generic drugs, drugs that are based on a formulary 
that more specifically fits the particular patient's need, and not to 
have a lot of extra drugs sitting around in the drug cabinet. Almost 
all of us have extra drugs sitting around, which is probably not a very 
healthy thing. It is a costly thing as well.
  There are a lot of incentives built in this legislation that should 
permit us to reduce the cost of drugs both for the third party payers 
as well as for the seniors themselves for the portion they are going to 
have to take care of.
  Another important thing in this legislation is that we at least go a 
little way toward rationalizing the system of paying the doctors and 
the hospitals and other health care providers that have not been 
adequately reimbursed. There were large cuts in store for hospitals and 
doctors. Those cuts are no longer in place. In fact, there are very 
modest increases for physicians and hospitals: A 1.5 percent increase 
for the physicians, instead of the 4.5 percent cut that was going to 
take place starting January 1 if we did not act. At least there is 
modest support for those that we really count on when the chips are 
down to take care of us.
  As I said, if we defeat this bill now, I don't see how we can come 
back and provide these things, how we can get consensus to do it 
anytime in the near future.
  Another important item is the health savings accounts provision. Many 
of us have believed for a long time this could really provide a long-
term way for people to build up the savings they can apply toward 
health care for insurance and out-of-pocket expenses so that they won't 
need to rely as much on Medicare when they get to be eligible for 
Medicare.
  We know one of the reasons we have high-priced drugs is that 
Americans have to bear almost the full burden of the cost of production 
of drugs since other countries, such as our friends to the south and 
north, have price controls on how much they can reimburse the drug 
companies for their prescription drugs. This is unfair trade. It puts 
all of the burden, a cost shift, on the American consumer. This bill 
provides instruction to our Trade Representative to come up with a way 
to deal

[[Page 30907]]

with those other countries to get them to share more of the burden of 
the expense of producing these important drugs for us.
  We also include the affluence testing of the Medicare Part B premium 
for those at the very wealthy end of the spectrum; a senior who makes 
over $80,000 a year, for example. I think it is not too much to ask 
them to pay a little bit more in their Medicare premium for the 
coverage they receive.
  We index the Part B deductible so we don't have to come back every 10 
years and have Congress pass a law. This will basically keep up with 
the cost of inflation. We also include a change for so-called 340B 
hospitals. These 340B hospitals are public safety net hospitals, and we 
enable them to purchase their inpatient drugs cheaper than they can 
purchase them today. I introduced legislation earlier on this subject, 
and I am pleased we have that provision included here.
  Then finally a provision that is important to those States such as 
the border States--Arizona, Texas, California, and others--that are 
required under Federal law to provide treatment to illegal immigrants 
because of the law called EMTALA, the Emergency Medical Treatment and 
Active Labor Act, that says no emergency room can turn away a patient 
whether that patient can pay or not.
  Because emergency rooms now are faced with treating illegal 
immigrants under this requirement and because the Federal Government 
has not been able to enforce the law to prevent those people from 
coming into the country illegally in the first instance, we believed it 
was important for the Federal Government to at least help these 
hospitals defray some of the expenses they are incurring, which in some 
cases are so severe, it is forcing hospitals to consider closing down 
and certainly shutting down emergency room care.
  That can't be. American citizens should not suffer because of a law 
that requires that we provide care to illegal immigrants. We can at 
least reimburse those hospitals for a portion of the cost they bear. 
This bill provides $250 million a year for 4 years to provide that kind 
of reimbursement.
  There are a lot of positives in the bill. There is a lot more I know 
the chairman of the Finance Committee will discuss in more detail.
  What I want to do is discuss it from the standpoint of somebody who 
has been critical, who has constantly said: We can do better. We are 
missing opportunities. We ought to do this in a way that is more 
flexible, that looks more like the FEHBP. I didn't win a lot of those 
battles, but we have an opportunity to at least implement a plan that 
we have a possibility of making better over time as people see the 
advantages of the concepts we have put in the legislation.
  We have the knowledge that at least in the foreseeable future, 
because we are adequately reimbursing those people upon whom we rely 
for care, that we are going to have that care provided to us in a 
quality way and that our seniors will not suffer because we didn't 
consider it important enough to provide for them the very best.
  Without this legislation, they will continue to pay more than they 
should for prescription drugs. They won't receive as much in the way of 
prescription drug coverage or care. And that will be a shame at a time 
when this country has the capability of providing that kind of care.
  Notwithstanding all of the concerns I have noted, the challenges we 
need to face in the future, we should support the legislation.
  I chair the Health Care Subcommittee of the Finance Committee in the 
Senate. I intend to have hearings next year into areas that may need 
improvement. I look forward to working with my colleagues to improve 
this historic legislation as we move forward. We owe our senior 
citizens no less.
  The PRESIDING OFFICER. The Senator from Nevada is recognized.
  Mr. REID. Mr. President, we are alternating back and forth. It is 
obvious that it is not fair. The Senator from Arizona did not speak for 
an inordinate amount of time. If somebody comes and speaks for 5 
minutes who is opposed to the legislation and someone speaks for 45 
minutes in favor of it, that doesn't work out. I am somewhat at a loss 
as to why we have not worked out an arrangement that the time between 
now and 11 o'clock be equally divided between proponents and opponents, 
with no limit as to how much they could speak.
  If someone who wanted to speak in favor of the legislation were here 
and there was nobody to speak in opposition, that person could go ahead 
and speak. For reasons I don't understand, the floor staff has not 
gotten that approved by the managers and leadership.
  The Senator from West Virginia is here in the Chamber. He is going to 
speak against the legislation. With the agreement now in effect, it 
would be his time to speak. I know the manager is here. Is that OK with 
the Senator?
  Mr. CRAIG. Will the Senator yield? I know the Senator is going to 
speak at 11 o'clock. I was told I could speak. The Senator from 
Illinois has been here for some time. I understand both of these 
Senators anticipate fairly lengthy statements. I do not. I anticipated 
no more than 10 minutes. Is it possible that I could slip in there 
somewhere?
  Mr. REID. Mr. President, I think the Senator from West Virginia would 
be happy to yield for 10 minutes to the Senator; is that right? I don't 
know that to be the case. This shows how unfair this whole situation 
is.
  Mr. CRAIG. Exactly right.
  Mr. REID. I cannot imagine what is holding up the UC to allow the 
time to be divided equally.
  I yield to the Senator from West Virginia. He has an obligation. That 
is why he is here at 11. The Senator from Illinois said he would be 
happy to yield, following the statement of Senator Byrd, to the 
Senator. He has that right anyway; he doesn't need consent to do that.
  Mr. BYRD. Mr. President, in any event, the distinguished Senator from 
Illinois would be recognized at the same time--if I understand the 
request of the Senator from Nevada. If the Senator from Idaho goes 
first and then I go next, then the Senator from Illinois would go; or 
if I go first, and the Senator from Idaho goes next, then the Senator 
from Illinois would go. So the Senator from Illinois, through his 
gracious courtesy, which is so characteristic of him, either way, that 
would suit the Senator from Illinois.
  That being the case, I have no problem with yielding to the Senator 
from Idaho next, if he can limit his statement to 10 minutes, which I 
understood he would.
  Mr. CRAIG. I would do that under a unanimous consent, certainly.
  Mr. REID. Just understand that following Senator Byrd is Senator 
Durbin. There could be as much as an hour and a half. I want to make 
sure everybody understands that.
  Mr. President, I ask unanimous consent that the Senator from Idaho be 
recognized for up to 10 minutes, and then the Senator from West 
Virginia, followed by the Senator from Illinois.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. BYRD. I will not speak longer than 20 minutes.
  Mr. CRAIG. Will the Chair signal me when I have spoken for 9 minutes?
  The PRESIDING OFFICER. The Chair will do so.
  Mr. CRAIG. Mr. President, the Medicare conference report now before 
the Senate, brings to fruition President Bush's early and strong 
commitment to prescription drug relief, and it reflects nearly 6 years 
of difficult congressional debate.
  The Senator from Iowa is here in the Chamber. He has played a key 
role in shaping the final package, in hours and hours of work with our 
majority leader and with leaders from the other side, to try to strike 
a critical balance.
  This historic legislation, like the 38-year-old program it seeks to 
reform, is indeed expensive, complex, and unweildy but it is a 
compromise I can and will support, although not without some very 
strong reservations.
  This bill is a solid step toward accomplishing two core goals: 
Providing prescription drug relief to seniors in need, and 
strengthening Medicare's future through greater market competition.

[[Page 30908]]

  This legislation also includes dramatic improvements in consumer 
choice through health savings accounts, and perhaps the best package of 
rural health care improvements Congress has ever considered. I know its 
impact on the rural hospitals of Idaho will be significant.
  Despite its deep and undeniable faults, this bill offers a rare 
opportunity unlikely to return for several more years, if ever--years 
in which millions of seniors will continue to suffer for lack of needed 
drugs and years in which the retirement of America's baby boomers will 
draw ever closer, and the modernization of Medicare will become ever 
more urgent. No, it is not perfect, but to hold out for perfection 
would risk a permanent sacrifice of much that is good and necessary in 
this legislation.
  As chairman of the Senate Special Committee on Aging, I have chaired 
several hearings examining many of the hard questions in this debate--
including the long-term demographic and financial pressures facing 
Medicare, and the importance of integrating competitive alternatives 
into Medicare's future. I am pleased to see some of these themes 
reflected in the legislation before us today.
  Mr. President, my reasons for supporting this legislation are 
straightforward:
  First, the legislation provides long overdue drug relief for our 
Nation's seniors. Nearly every health insurance plan in America today 
contains drug coverage. It is time Medicare did, too.
  Beginning in 2006, seniors who decide to enroll in this completely 
voluntary new program and will pay a premium of about $35 and will 
receive a 75 percent subsidy for the first $2,250 in annual drug costs, 
after meeting an initial $250 deductible. And after a senior's annual 
drug costs reach $3,600, Medicare will cover 95 percent, providing 
essential relief for those seniors with catastrophic drug needs.
  Overall, the average senior enrolled in this program will see annual 
drug costs reduced by 44 percent to 68 percent. In the nearer term, 
prescription drug discount cards will be available, offering seniors 
drug discounts of up to 10 to 25 percent.
  Second, I am very pleased that the bill devotes the greatest share of 
its relief to seniors of modest and low income, those who need it the 
most.
  For these seniors, the relief will be even greater than in the basic 
package. In Idaho, nearly 35 percent of our Medicare beneficiaries are 
likely to qualify. Seniors whose incomes fall below about $13,500 for 
an individual or $18,200 for a couple will receive deeply discounted 
premiums and deductibles, and those whose income is below about $12,100 
for an individual or $16,200 for a couple will have no premium or 
deductible and will pay only a few-dollar copayment for each 
prescription.
  The important thing to keep in mind is that the proportion of seniors 
today who have no private drug coverage at all is relatively small--
about 25 percent--and it is on these seniors, as well as those whose 
current coverage is inadequate, that this bill is focused. In short, 
those in the greatest need get the greatest benefit and that is as it 
should be.
  Third, the bill before us today seeks to bring Medicare into the 21st 
century, not just by providing prescription drug coverage, but also by 
offering seniors the choice to enroll in federally supervised but 
privately operated health care plans--that same kind of choice and 
coverage currently enjoyed by other Americans under 65.
  Medicare today remains weighted down by rigid bureaucracy and complex 
regulations--regulations that are already beginning to drive doctors 
and other health care providers out of the program. Even more 
distressing, the heavily bureaucratic Medicare Program has utterly 
failed to keep up with the kinds of medical innovations and coverage 
options most of the rest of us take for granted.
  By contrast, this bill's new competing regional preferred provider 
plans will give seniors one-stop shopping for comprehensive and 
integrated coverage, including prescription drugs, preventive care, 
care coordination, and protection against very high catastrophic 
medical bills--benefits which are largely unheard of in today's 
Medicare Program. Even more encouraging, six large-scale 
demonstrations, beginning in 2010, will test direct price competition 
between private plans and traditional Medicare. Although not as 
extensive as I would have wanted, these competition-based reforms are 
nevertheless the most substantial steps Medicare has ever taken toward 
bringing marketplace innovation into the program.
  Importantly, all of these new choices will be completely voluntary. 
Seniors who want to keep their current coverage and stay in the 
traditional Medicare will be free to do just that. No senior will see 
any reduction in any Medicare benefits under this bill. No benefits 
will be taken away--none.
  Fourth, this legislation contains landmark improvements in the 
ability of Americans to take charge of their own health care through 
expanding the use of health savings accounts.
  To a greater degree than ever before, this bill will permit 
individuals to build significant tax-free health care savings for use 
in meeting a family's health care needs, including long-term care. As 
we try to encourage those who are becoming seniors to acquire long-term 
health care insurance, here is a way to finance it and finance it with 
tax-free dollars. Together with high deductible insurance for very high 
medical expenses, this approach puts control of health care where it 
belongs--in the hands of the individual citizens of our country.
  This is something I have been fighting for since I first came to 
Congress, and I believe this bill's health savings account provisions 
are among its most important accomplishments.
  Fifth, I am tremendously pleased, as should be every Idahoan, that 
this bill includes an unprecedented package of nearly $25 billion in 
improvements for rural health care. Senator Grassley can be extremely 
proud of the work he has done to ensure the stabilizing of rural 
hospitals and rural health care. Most importantly, this legislation 
achieves a permanent evening out of rural and urban Medicare 
reimbursement rates. For far too long, doctors and hospitals in Idaho 
and other rural States have suffered under payment classifications and 
reimbursement levels that put them at a significant disadvantage--and 
that makes the already difficult task of providing rural health care 
even more daunting.
  Sixth, the conferees have included, for the first time, a requirement 
that high income seniors (those making over $80,000 individually or 
$160,000 as a couple) pay slightly more in Medicare premiums than those 
who are less well off.
  In the decades to come, I believe our children will thank us for 
recognizing that America's taxpayers simply cannot afford to continue 
subsidizing care for the wealthiest among us at the same level we 
provide for the less well off.
  Finally, I believe it is important to recognize that the conferees 
have taken great care to include protections against something I know 
has concerned many seniors--namely, Will this bill cause me to lose the 
drug coverage I already have? The final bill includes very significant 
assistance to employer-sponsored plans to help assure their continued 
participation in retiree health care. Indeed, some are concerned that 
this assistance is, in fact, too substantial. But Congress's intent on 
this issue is clear: Seniors who are happy with the coverage they have 
today should be free to keep it.
  The underlying framework of this bill is a sound one, and it follows 
the strong and guiding principles laid out by President Bush earlier 
this year--namely to strengthen traditional Medicare and keep it as an 
alternative for those seniors who want it--but also to provide a new 
foundation for the future, one built on choices, competition, and 
innovation.
  This said, however, I remain gravely troubled by certain aspects of 
this bill.
  First, it troubles me deeply that this legislation will add 
substantially to an entitlement program whose long-term future is 
already sobering in the extreme. Even without a new $395 billion drug 
benefit, Medicare is expected to

[[Page 30909]]

spend nearly $3.9 trillion over the next 10 years--and by 2075, these 
costs will nearly triple.
  Nothing can change the fact that desperately hard choices lie ahead, 
regardless of what we do this year. Nevertheless, what we sow today, 
future generations will reap.
  Second, I am disappointed that the conferees chose not to adopt firm 
expenditure restraints if and when Medicare cost growth rises faster 
than currently projected. Nearly all honest observers predict that this 
bill will ultimately cost more than the $395 billion over 10 years that 
is now budgeted. Such a cost restraint measure would have gone a long 
way toward assuring future generations that we are serious about fiscal 
restraint and preserving a viable Medicare program for our children and 
grandchildren.
  Third, I believe this bill should have moved Medicare more 
assertively toward a 21st century competitive approach, with an even 
greater role for private plans and the innovation they generate--an 
approach patterned, for example, after the highly successful program 
now available to Members of Congress and other federal employees. As it 
is, this bill makes a credible start in that direction, but much more 
remains to be done.
  And finally, I am concerned by this legislation's very high level of 
complexity and prescriptiveness. Of course, Medicare legislation is 
never simple. However, this bill runs to many hundreds of pages and is 
very heavy with exceptions, rules, and carveouts--including literally 
dozens of provisions and billions of dollars relating to specifics of 
provider payment.
  This bill's new competitive alternatives, if they succeed, are 
intended to take us away from this kind of micromanagement. 
Unfortunately, if the complexity of this bill is any guide, we may yet 
have a ways to go.
  My concerns about this bill are very serious ones. However, on 
balance, I believe this legislation is a positive step forward for 
America's seniors, for the Medicare program, for Idaho, and for the 
country as a whole.
  President Bush deserves tremendous credit for making Medicare and 
prescription drugs a top priority this year, as do Majority Leader 
Frist, Senator Grassley, and the other conferees for bringing us to 
where we are today.
  Medicare urgently cries out for a better future, and America's 
seniors desperately need meaningful prescription drug relief. This 
legislation moves solidly toward reaching both of these goals, and I 
urge my colleagues to stand with the President and support its passage 
into law.
  I close by thanking the Senator from West Virginia for his courtesy. 
I will adhere to our agreement. I yield the floor, and I thank my 
colleague.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. BYRD. Mr. President, our friend, the distinguished Senator from 
Idaho, who serves on the Appropriations Committee, is welcome. I thank 
him for his kind references to me.
  I thank the Chair, Senator Cornyn of Texas, who has had the good 
fortune of presiding over the Senate on many occasions this year. I 
say, I have had the good fortune of speaking on almost every occasion 
that the Senator from Texas has presided over the Senate, and he 
presides so well. He presides with a degree of dignity and skill and 
aplomb that is so rare as a day in June.
  I also thank my majority whip, the best whip the Senate has ever had. 
And I have been the whip. I was the whip for 6 years. But I say--I will 
repeat the words of a great poet--``You're a better man than I am Gunga 
Din.''
  Harry Reid is a better whip than I was, and it wasn't because I 
didn't do my best. I don't grow lax in any job. Any duty that is placed 
on me, I do my very best. But he is a jewel, Harry Reid.
  Let me thank the Senator from Illinois also, the distinguished 
Senator, Mr. Durbin. He is always so gracious, but he can afford to be 
gracious. He is so able, an inimitable debater. He can speak at the 
drop of a hat, and the hat won't hit the ground. That man, Durbin, is a 
very fluent and ready speaker. I am so pleased that he is my friend and 
that he is a Senator on my side of the aisle. I thank him for his 
courtesies on this beautiful morning in November.
  It is a beautiful morning. May I say to the young pages who are here 
so early in the morning:

       Ah, great it is to believe the dream
       As we stand in youth by the starry stream;
       But a greater thing is to fight life through
       And say at the end,
       The dream is true!

  Mr. President, I had hoped to be out here on the floor talking about 
a plan to give senior citizens a prescription drug benefit for 
Medicare.
  I had hoped to be extolling the virtues of a bill that would give 
needed relief to the millions of our Nation's elderly citizens who have 
been serving their country and their communities for so long and who 
are entitled to needed relief. Instead, the Congress will be voting on 
a measure that would undermine Medicare--undermine Medicare, I say. 
Listen to me. Hear me now. The elderly citizens who are watching 
through those electronic lenses, and also the sons and daughters of the 
elderly citizens as well, will be affected. So instead of voting on a 
measure that would give relief to the elderly citizens of this country, 
we are going to vote on something else.
  In speaking of the elderly citizens, I speak of the young people as 
well. Why do I say that? I say it because I can remember the days when 
there was no Social Security or Medicare Program in this country. I 
used to go by the old county poor farm in Raleigh County, and as I 
traveled by there many years ago I would see sitting on the porch up 
there at the old county poor farm, sitting just within sight of the 
road, those old people in their rocking chairs. They had no dreams to 
look forward to. When they grew old, as some of them did--and those 
coal miners especially grew old early in life--they had no place to go, 
no place to go but to the homes of their sons and daughters. They would 
stand with their hats in their hands waiting to be taken in by their 
children. What a life.
  Then there came to the White House of this country a crippled man, a 
man who was paralyzed, a man who could not walk, as I can walk even at 
my young age of 86. There they stood waiting at the gates of their 
children hoping that they could be taken in. Then that man came to the 
White House and a Democratic Congress worked with him to give to the 
people of this country, the elderly citizens and their children, that 
promise. He fulfilled that promise of Social Security so that no longer 
would the old folks stand at the gates of their children with their 
hats in their hands. They could live out their lives with dignity and 
not be such a burden to their children.
  Then I remember Medicare when it came. I was a Member of the Senate 
and voted for that program. That was when Lyndon Johnson, a great 
Democrat, was President of this land. Again, the Democratic Congress, 
working with that Democratic President, gave to the country this 
program of Medicare, the most successful program that the country has 
ever had, a program that today's Senators know and trust.
  The Congress should be fashioning a real prescription drug benefit. 
That is what the American people have been told we are doing, but we 
are not doing that. Instead, the Congress debates a major restructuring 
and a step toward the privatization of Medicare.

       I watched them tearing a building down,
       A gang of men in a busy town.
       With a ho-heave-ho and a lusty yell,
       They swung a beam and a sidewall fell.
       I asked the foreman, ``Are these men skilled,
       As the men you'd hire if you had to build?''
       He gave me a laugh and said, ``No, indeed!
       Just common labor is all I need.
       I can easily wreck in a day or two
       What builders have taken a year to do.''
       And I thought to myself as I went my way,
       Which of these two roles have I tried to play?
       Am I builder who works with care,
       Measuring my life by the rule and square?
       Am I shaping my deeds by well-made plan,
       Patiently doing the best I can?
       Or am I a wrecker who walks the town,
       Content with the labor of tearing down?

  That is what we are doing here. That is what we are about to do. That 
is what we are getting ready to do. That is what the seniors and their 
children of this country are about to see happen. This building which 
was built by

[[Page 30910]]

careful hands, by caring hands, is about to be torn down.
  This is a debate that has largely been hidden from the public, a 
debate for which our Nation's seniors did not ask. They did not ask for 
this.
  The conference report before us was hatched behind closed doors. We 
see so much of that time and again under this Bush administration--
programs, plots, hatched behind closed doors. Most Members of Congress 
have been largely excluded from the backroom deals--largely excluded 
from the backroom deals--that produced this conference report.
  Some have asserted this legislation is merely a Trojan horse designed 
to get rid of Medicare. I hope that is not true, but there is something 
awfully suspicious about this particular horse that is galloping 
through the Congress.
  We need to slow down and consider the unintended consequences of this 
massive bill. We may be signing off on the assisted suicide of Medicare 
as we know it. This legislation takes the first step to undermine a 
health care system that has benefited millions of retirees, and it is 
all happening within legislation designed to enhance Medicare to 
provide a drug benefit. Proponents are selling it one way but may be 
doing something quite different. You know the old magic tricks? I can 
remember vaudeville. I can remember when the vaudeville shows came to 
those coal camps in the hills of southern West Virginia and the actor 
would say: Watch my right hand, watch my hand, watch my hand. Don't 
look at this one. Watch this hand. Don't look at what's going on over 
here.
  There is my friend from Maryland--he knows; he remembers--Senator 
Sarbanes, one of the great pillars of the Senate, one of the truly 
great Senators, a thinker in the tradition of the venerable Socrates: 
Paul Sarbanes.
  So proponents are selling it one way but may be doing something quite 
different--a classic bait and switch. But seniors are not falling for 
the bait. Many letters coming to me clearly reveal a genuine fear that 
this Medicare bill will leave seniors worse off. West Virginians have 
not been clamoring for enrollment in HMOs. They don't want restrictions 
on their choice of doctors. They have not been pushing for a new 
Medicare system that could leave them bouncing in and out of private 
health plans. My constituents are rightly fearful at the thought of 
having to pay significantly higher premiums just to stay in their 
current Medicare plan.
  Some analysts of this bill estimate that as many as 29,000 
beneficiaries in West Virginia will lose their retiree health benefits 
as a direct result of this bill and that as many as 45,000 Medicaid 
beneficiaries in my State will pay more for the prescription drugs they 
need. I thought our goal was to help seniors, not hurt them, as this 
bill may do.
  Senior citizens across America are fed up with fast rising drug costs 
that they cannot afford. They are traveling by the busload to Canada--
yes, traveling by the busload to Canada and Mexico--just to obtain the 
medications prescribed by their doctors. And this bill does nothing, 
zilch, to help reduce the price of prescription drugs. In fact, this 
legislation explicitly prohibits the Federal Government from directly 
negotiating with pharmaceutical companies to use the bargaining power 
of 40 million senior citizens to lower the cost of prescription 
medicines. This is something the Veterans' Administration, the 
Department of Defense, the Medicaid Program do every day to save money 
on drugs. Why in the world are we prohibiting Medicare from saving 
money?
  Unfortunately, this bill offers more of a figleaf than sufficient 
prescription drug coverage--a figleaf. Do Senators remember the first 
question that was ever asked in the history of the human race? It 
occurred during the evening, during the cool of the day when God came 
walking through the Garden of Eden looking for Adam and Eve. There they 
were in that paradise--how it might have been, how it might have been. 
God came through in the cool of the evening looking for Adam, and it 
was there and then that God asked that first question:

       Adam, where art thou? Adam, where art thou?

  Adam was hiding. Adam and Eve were hiding. They were trying to hide 
from that all-seeing eye that pierced through every veil. Yes, they 
were hiding back in the bushes with a figleaf--a figleaf.
  That question: Where art thou? These seniors, senior citizens all 
over this country, are going to be asking their Senators: Where were 
you? Where were you when the critical moment came?
  I hear the siren call: ``You better take it. It's all you are going 
to get.''
  This Senator will never bow to that siren call. And there are others 
who will not.
  Rather than building on the traditional and successful Medicare 
Program, the measure in front of us would force Medicare beneficiaries 
to rely on a private, untried, untested, drug-only insurance market for 
their prescription drug coverage. Is that what our seniors want? Is 
that what the people of West Virginia want? No. No.
  It would cover less than a quarter of the Medicare beneficiaries' 
estimated drug costs over the next 10 years. The complicated coverage 
formula has a large, gaping hole smack in the middle, providing zero 
coverage just when seniors might need that coverage most--a large hole, 
large enough for Attila the Hun to drive his thousands of horsemen 
through.
  This legislation includes copayments, premiums, and deductibles that 
may be unaffordable for many low- and middle-income seniors. A closer 
look at the fine print of this legislation reveals that private 
insurers could choose to charge seniors double or even triple these 
amounts. Seniors may find that their premiums could fluctuate 
dramatically based upon where they live and how healthy they are. At 
the same time, the Federal Government will be handing over billions of 
taxpayer dollars to for-profit insurance companies, just to get them to 
participate in Medicare.
  Let's face it, the kind of prescription drug benefit that we have 
repeatedly promised to our Nation's seniors and they now rightly expect 
would cost at least $800 billion during the next decade. Drug costs for 
senior citizens alone are expected to total almost $2 trillion during 
this same period. Yet the Bush administration and congressional 
leadership have only set aside $400 billion for a Medicare prescription 
drug benefit. Although, isn't it remarkable that we can afford to spend 
$1 billion a week--$1 billion a week--in Iraq?
  I will have plenty more to say about that. I made 62 speeches on that 
gargantuan mistake. I will make some more, the Lord willing.
  Missiles? Yes. Medicines? No. Missiles? Yes. Medicines? No.
  Where are the priorities of this administration? Where are the 
priorities of the Congress?
  It seems that this Congress is trying to pull the wool over the eyes 
of our Nation's seniors hoping to claim victory and keep seniors in the 
dark until they become painfully aware of the fine print in this 
legislation upon a visit to their local pharmacy--in 2006. That will be 
my next election year, 2006, the Lord willing.
  In the Book of James, we are told always never to say, I will go 
here, I will go to this city or to that city, I will buy this, or I 
will buy that tomorrow, but always to say, the Lord willing, I will go 
to this city or I will go to that city and I will buy this or that. So, 
the Lord willing, 2006 is my next election day. Eighty-six is not too 
old. I am 86 years old. Abraham lived to be 175, Isaac lived to be 180, 
Jacob lived to be 147, Moses, 160; and so on.
  Mr. GRASSLEY. He lived to be 120.
  Mr. BYRD. Was I wrong on that?
  Mr. GRASSLEY. Moses lived to be 120, not 160.
  Mr. BYRD. All right, 120. The distinguished Senator from Iowa 
corrected me. But he won't correct me on this bill. He won't correct me 
on the tragedies of this bill. But I accept his correction. I will go 
look it up to make sure.
  As lobbyists for the pharmaceutical and health industry swarm all 
corners of the Capitol, the Congress is on a mad dash to pass this bill 
before Thanksgiving, regardless of its contents or its flaws, so long 
as it can be called prescription drug coverage. Unfortunately, when it 
comes to their

[[Page 30911]]

health care security, it appears our Nation's senior citizens will find 
that they have little for which to be thankful.
  I have heard some Senators argue that something is better than 
nothing. Is that what we are being given? Something rather than 
nothing? Nothing?
  They try to rationalize a bad bill by claiming that this may be our 
last chance and you had better take it; something is better than 
nothing. They argue that we should vote for this now and fix the bill's 
problems down the road. I have been down that road. I have seen that 
and heard that many times in my 51 years in Congress. This conference 
report is a pill that is too bitter to swallow.
  I am one of perhaps only a handful of Senators in this body who voted 
to create Medicare. I can say to you, Mr. President, that it was not 
created overnight. It was not created in the hidden dungeons, in the 
hidden subterranean caverns under this Capitol. It was created in 
response to a private sector that would not offer affordable and 
reliable health insurance to the elderly and the disabled.
  Few can argue that seniors are not better off today as a result of 
Medicare. We should not turn our backs on one of the most successful 
Government initiatives ever created. We should seek ways to strengthen 
Medicare, not dismantle it.
  Senior citizens who need life-sustaining medicines want us to get it 
right. They trust us to get it right. We should reject this bill and 
work to pass a bill that does get it right. Thanksgiving is an 
arbitrary deadline. It means nothing when measured against the 
potential damage that could be done in haste--haste that could 
jeopardize the health care security of generations to come. We should 
do better for our senior citizens. We owe them that much.
  In closing, I thank Senators who have worked hard on this bill, 
Senators who have toiled late into the nights and weekends. I thank 
Senator Grassley. I thank Senator Baucus. I thank all Senators. I thank 
all Senators for listening.
  By the way, as to Joseph, how long did he live? He lived to be 110 
years old.
  The PRESIDING OFFICER (Mr. Bennett). The Senator from Nevada.


                      Unanimous Consent Agreement

  Mr. REID. Mr. President, I am sure the Chair can protect the majority 
if there is a problem. We need to get this unanimous consent agreement, 
which has been approved by both sides.
  I ask unanimous consent that the time until 11 o'clock tonight be 
equally divided between the opponents and proponents; provided that 
when time expires on either, it be in order for either side to consume 
additional debate time; further, that the debate time used beginning 
with Senator Kyl's statement this morning be counted against the time 
allotment. I further ask unanimous consent that notwithstanding the 
order for an alternating fashion following the remarks of Senator 
Durbin, it be in order for two Republicans to speak consecutively, one 
Senator for 20 minutes and the other Senator for 15 minutes.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. REID. Mr. President, further, so Senators will have some 
understanding as to when they can speak, I ask unanimous consent that 
the Democrat order be Senators Stabenow and Reed of Rhode Island 
following Senator Durbin, and that the Republicans be Senators Snowe, 
Cornyn, Collins, Bennett, Hatch, Bond, Nickles, and Gregg.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Illinois.
  Mr. DURBIN. Mr. President, before saying a few words about this 
Medicare bill, I would like to say a few words about the senior Senator 
from West Virginia. This man is such an amazing person. At 86 years of 
age, what he brings to public service and what he brings to the Senate 
is incredible.
  I was in the Chamber earlier this morning when Senator Byrd arrived. 
He said he would like to say a few words. I said, quite honestly, I am 
ready to follow you into battle any day. I deferred to him, which I was 
happy to do. He is a grand person and such an amazing Senator.
  I have been fortunate to represent a congressional district in 
Illinois and the State of Illinois for over 20 years on Capitol Hill, 
and I have many favorite moments. But in the top tier of those favorite 
moments was the time in a conference committee downstairs from this 
Chamber involving Senator Byrd, and I would like to tell those who are 
following this debate about that experience because I still marvel at 
what he did that day.
  He came to a conference committee on the Transportation 
appropriations bill facing a critic in the House who said that Senator 
Robert C. Byrd of West Virginia had put too much in this bill for the 
State of West Virginia. And your critic from the House was going to 
have his day with you at that conference committee.
  As some people know who follow the Senate, the appropriations 
conference committees gather at a large, long table and the House 
Members sit across the table directly from the Senate Members. So your 
critic in the House came and took his seat with a sheaf of papers 
prepared to do battle with you over the Transportation appropriations 
bill. You arrived and just fortuitously happened to sit directly across 
from him at that table. He began his peroration about how terrible it 
was that West Virginia would have so much in this Senate bill and he 
was going to do something about it. He went on for all of 15 minutes. 
He got red in the face, his arms were waving, and finally he was spent. 
He had nothing more to say.
  Then, as I recall, you turned to the chairman--which could have been 
Senator Hatfield of Oregon--and asked if you could be recognized.
  The Senator began his remarks, and that is what I thought was the 
most remarkable moment, saying, in the history of the United States 
there is an exchange of speeches between two individuals which defined 
Federalism as we know it and the role of small States like West 
Virginia in the Senate and larger States. That exchange was between 
Daniel Webster and Robert Hayne.
  Senator Byrd went on to say, Webster's reply to Mr. Hayne was 
delivered on January 20, 1830. And then Senator Byrd added, ``and if my 
memory serves me, it was a Thursday.'' He proceeded to give an 
important history lesson to all who had gathered, Members of the House 
and the Senate, about why West Virginia had a fighting chance in the 
Senate but might not have that same chance in the House, as each State 
has two Senators, of course, in this Chamber, and represented 
proportionately in the House.
  I was absolutely spellbound by his performance that day in that small 
room. When it was all over, of course, West Virginia fared well in that 
appropriations bill, as it always has since Senator Byrd has been here 
to make sure his State was not shortchanged. I was in the House at the 
time, and a few years later I came to the Senate and said to Senator 
Byrd: Of all the things you said in the speeches, when you said, ``If 
my memory serves me, it was a Thursday,'' I still remember those words.
  Senator Byrd said: Well, Mr. Durbin, if I am not mistaken, it was a 
Thursday.
  I said: I am not questioning you; I am sure it was a Thursday.
  Later in the day, he called me over to his desk and pulled out a 
perpetual calendar, and said, yes, January 20, 1830, was a Thursday.
  It says a lot about this Senator, not only his reverence for history 
and this institution, but the fact that he brings to many of these 
political battles an insight that many Members admire so much and 
respect. Whether you are on his side or not, you best sit back and 
listen closely when Senator Byrd takes the floor because he brings to 
each one of these debates the very best in public debate and the very 
best in public service.
  This Senator was happy to step back and listen very carefully as the 
Senator from West Virginia made another compelling argument on a very 
important and historic piece of legislation.

[[Page 30912]]


  Mr. SARBANES. Will the Senator yield?
  Mr. DURBIN. I am happy to yield.
  Mr. SARBANES. I listened to the able Senator from Illinois with great 
pleasure because I strongly share his feeling and views about Senator 
Byrd. I took the floor for a brief moment to underscore the 
extraordinary contribution that Senator Byrd has been making to the 
national debate in the recent period on issues of critical national 
importance. He has taken to the floor time and time again and spoken 
with a clear strong voice. He has sounded a clarion call to the 
country. I know from people I talk to that voice is reaching into many 
corners across the land and prompting Americans to think deeply about 
the issues that confront the Nation, and even more deeply and 
fundamental about how we go about conducting our business and making 
these decisions.
  The vote last night in the House of Representatives was held over for 
3 hours in order for the Republican leadership to twist arms in order 
to change the outcome, which was already up on the board, where they 
had lost by two votes. That rollcall vote was held open indefinitely. 
My able colleague from Maryland, Congressman Hoyer, remarked 
afterwards, it would be as though you had election day, the time came 
for the polls to close, and you held the polls open for another 15 
hours while you went out and somehow found the votes to assure you the 
result. It is an abuse of the democratic process.
  The Senator from West Virginia has always spoken. He sounded a loud 
trumpet about our Nation. We are deeply in debt to him and appreciate 
that.
  Mr. DURBIN. I thank the Senator from Maryland. I might just add 
something I have said in the Senate and I told Senator Byrd during the 
debate on Iraq. I went to my church in Chicago with my wife--this is 
highly unusual in my church--as we came back from communion, and we are 
kneeling, an elderly man came up to me and leaned over on his way back 
from communion and he said: Stick with Bob Byrd.
  I came back to tell Senator Byrd that his message reached beyond this 
Chamber and beyond the State of West Virginia. It has been not only 
heard, but it has been applauded by the Nation of grateful people who 
are glad you are here in service to our country and continue to be. If 
you reach the age of Methuselah, Abraham, Isaac, or Moses, I hope I am 
still here to defer to you and listen carefully as you make these 
presentations.
  Mr. BYRD. Mr. President, will the Senator yield?
  Mr. DURBIN. I am happy to yield.
  Mr. BYRD. Mr. President, I am deeply grateful to these two fine 
Senators for the kind words they have just spoken, Senator Durbin and 
Senator Sarbanes. I will go to my everlasting resting place with love 
and gratitude and affection and admiration and respect for these two 
Senators and how they have served the Nation and this institution and 
been loyal and true to the Constitution of the United States forever. I 
shall think of them and be in their debt. I thank the Senator.
  Mr. DURBIN. I thank the Senator from West Virginia.
  The Senator from West Virginia, when he came to the floor, gave us an 
important message. He asked us to look at this very carefully. This, my 
friends and fellow colleagues, is a proposed law. It is huge. But that 
is not uncommon. And that should not be a reason to vote against it. 
The reason to vote against it is what is contained in this law, this 
proposal, this bill.
  When we started this debate about prescription drugs for seniors, 
overwhelmingly the President, the Republicans, Democrats, all agreed on 
one thing: We needed to find a way to provide affordable prescription 
drugs for senior citizens. Medicare, as good as it is, provides good 
care through hospitals and doctors but not enough help when it comes to 
paying for prescription drugs. We understood that needed to be done.
  The solution was obvious from the start. The solution to this 
challenge was to put under the Medicare Program a voluntary, 
comprehensive, and universal plan to pay for prescription drugs, to use 
the same successful model that has guided us for 40 years in keeping 
seniors healthy through good doctors and good hospitals, and also 
provide prescription drugs. We knew if we did that, it would work as 
Medicare has worked. The proof of Medicare's success is the fact that 
seniors are living longer, they are healthier, they are independent, 
and they are strong.
  But there was a criticism of using this so-called Government 
approach. The criticism came from political extremes that argue that 
the Government shouldn't be involved, and also from the pharmaceutical 
industry which understood full well, if Medicare could bargain for 
seniors across America, Medicare could bring down the prices of 
prescription drugs just as the Canadian Government has brought down the 
price of those same drugs for its citizens.
  The pharmaceutical companies lived in dread that Medicare would be 
able to have cost control and competition and bring down the price of 
drugs.
  So we started on this convoluted path to find an alternative. The 
first suggestion was, why not let private insurance companies provide 
this prescription care benefit? Let them compete. There is nothing 
wrong with that from this Senator's point of view. If private companies 
want to offer prescription drug benefits and compete with Medicare, so 
be it. Let's see what happens. Let's see if that competition will also 
help seniors.
  But they said, wait a minute, we are not wanting these private 
companies to compete with Medicare. We want Medicare out of the 
business of competition completely. That was the starting point for the 
Republican approach to prescription drugs. Of course, the 
pharmaceutical companies applauded this because if they do not have to 
answer to Medicare with 40 million Americans under its protection but, 
rather, to smaller companies, they have more bargaining power. So we 
went through this long exercise in the Senate about this proposition 
that private insurance companies would somehow provide prescription 
drug benefits to seniors.
  I offered an amendment on the floor, supported by most of my 
colleagues who are here today, that said: Give Medicare a chance to 
compete. We did not prevail. In fact, we did not get any votes from the 
other side of the aisle. The Republican approach to this from the start 
was to say they believed in Medicare, but then to turn their backs on 
Medicare when it came to prescription drug benefits.
  Well, eventually we were faced with the prospect, in the Senate bill, 
of either accepting their approach, and moving toward prescription 
drugs for seniors, and passing it out of the Senate, or doing nothing. 
Most of us voted to move the bill forward and into the conference 
committee. But, sadly, that was not the end of the story.
  When it came to the conference committee, there was a new political 
force at work, not just the people who wanted to keep Medicare out of 
the prescription drug business but a new group from the House of 
Representatives with a much more radical agenda. What they wanted to 
achieve was not just private insurance companies offering prescription 
drug benefits, they, in fact, wanted to privatize Medicare itself.
  We started by wanting to add a benefit to Medicare, and now the House 
Republicans, and their cohorts in the Senate, have said: We want to 
change Medicare. We want to make certain that Medicare as you know it 
will not be there in the future.
  One of the proponents of this point of view was former Speaker of the 
House Newt Gingrich, who this week came to the Republican House caucus 
and said: Vote for this bill; this is a good bill. That should be proof 
positive to anyone listening that this is a bad bill. Because it was 
that same Speaker Newt Gingrich, whom I served under in the House, who 
said, at one point, that we should allow Medicare to wither on the 
vine. There was no personal or political commitment by Speaker Gingrich 
to Medicare. And for him to endorse this huge bill is proof positive to 
me that within the four corners of this bill are

[[Page 30913]]

threats to Medicare we need to take seriously.
  This morning, as I came to the office, on Saturday, I had an e-mail 
from one of my staffers who fields the phone calls that come into my 
office. She wrote and said: Senator, something unusual is happening out 
there. When you first started debating prescription drugs under 
Medicare a few months ago, the phone calls were generally positive. 
Seniors were saying: Let's do it; we have waited too long. But she 
said: Something's happened. There is a sea change out there. The phone 
calls are overwhelmingly negative now.
  Seniors have come to understand this bill not only does not give them 
good prescription drug coverage but it is a full-scale assault on 
Medicare itself, and they are calling every office, congressional and 
senatorial office alike, saying: Defeat this legislation.
  Now, doesn't that tell us something? Doesn't it tell us something, 
that what we started off in believing--that seniors wanted prescription 
drugs--has now been rejected by them when they learned what is at 
stake? And there is a lot at stake.
  This bill will raise Medicare premiums, something which lower income 
seniors will find very difficult to deal with. It will force seniors 
into HMOs. And you know what that means. That means insurance companies 
will pick their doctors and their hospitals for them and say that they 
will lose the right to choose their own doctors and hospitals.
  Of course, that is the grand old Republican plan: that Medicare as we 
know it would change; that, instead, we would be dealing with HMO 
insurance companies. And I can tell you, I have yet to run into a 
senior citizen anywhere who endorses HMOs, nor many doctors who believe 
they are very good when it comes to quality health care. Yet that is 
the solution that is being offered here.
  It is not bad enough that my friends on the Republican side of the 
aisle have said they want to move toward private insurance companies 
and privatizing Medicare. They do not even believe in the value of the 
free market in this experiment. Because they are not saying to HMOs: We 
want to open the door and give you your chance to compete. No. They are 
coming through with more than $10 billion in Federal taxpayers' 
subsidies to be given to these HMO insurance companies so that they 
capture more and more seniors out of Medicare.
  Think of that. The Republican free market, entrepreneurial spirit 
that is being sustained by a $10 billion Federal slush fund for HMOs so 
they can take more and more seniors out of Medicare.
  What is even worse, as they draw seniors out of Medicare, they will 
look for, as most insurance companies do, the healthiest of the 
seniors, leaving behind the poorest and the sickest seniors in 
Medicare, meaning that the costs of Medicare per person are going to go 
up, and Medicare will become more expensive, and perhaps less popular 
from a budget point of view.
  That is the grand plan here: Starve Medicare; have it wither on the 
vine. Newt Gingrich's vision for Medicare is finally realized in this 
1,200-page bill. Speaker Gingrich rides again. He has prevailed. His 
was the voice that prevailed when it came to the contents of this bill.
  Sadly, too, this bill will eliminate drug coverage for millions of 
Americans. We have had a Congressional Budget Office review of what 
happens when this bill goes into effect.
  Mr. President, 2.7 million retirees will lose the private insurance 
coverage they currently have. Understand who these people are. These 
are people who have worked for a lifetime for a company, with the 
understanding they would receive a retirement benefit which included 
prescription drug coverage. And when this goes into effect, this 
proposal that has been brought before us, the Congressional Budget 
Office and other sources tell us 2.7 million Americans will lose their 
prescription drug coverage. They may lose all of their health coverage 
during retirement.
  Over 100,000 of these unlucky retirees are in my State of Illinois. 
For them, if for no other reason, I will be voting no on this. I will 
be voting no because, frankly, we are basically saying: We want to 
reward HMOs. We want to reward pharmaceutical companies at the expense 
of people who have worked a lifetime for security in their retirement 
and will lose it because of this bill.
  How can we, in good conscience, stand here and say we are going to 
create a mechanism where companies will have the rationale and the 
opportunity to drop their retiree health care coverage? That is sad. 
Medicare was created because seniors across America did not have a 
helping hand when it came to doctors and hospitals. And now, in this 
effort to privatize Medicare and reward the big drug companies, we are 
going to provide less coverage for seniors across America.
  Let me speak for a moment about the pharmaceutical aspect of this 
bill. We know if we have competition, we can bring prices down. We also 
know if the Government shows leadership, as they have in Canada, prices 
of drugs will come down. But the pharmaceutical companies have 
prevailed. The pharmaceutical companies have won the argument.
  The most important question asked about any piece of legislation 
before the Congress is this: Who wants it? Who wants this bill?
  First and foremost, the pharmaceutical companies want this bill 
because there is no effort to bring down the cost of drugs that 
American families and seniors have to pay--no effort whatsoever.
  We had a provision included that called for generic drugs, one way to 
try to get good drugs that are lower priced in the hands of seniors, 
and it was weakened dramatically in the conference. We had an 
opportunity, through a provision proposed by the House of 
Representatives, for reimportation of drugs from Canada and Europe so 
seniors had a chance to get a break there if they could not afford the 
drugs here in the United States. That was dramatically weakened, too. 
And the Bush administration has vowed they will never let it happen, 
they will not allow reimportation to happen.
  So if you do not have generics encouraged, and you do not have 
reimportation, and Medicare is not competing for cost, what it means is 
the pharmaceutical companies have their prayers answered, their dreams 
come true. They will continue to hike the cost of pharmaceuticals and 
drugs, and this Government and this bill will do nothing to stop it, 
and seniors across America will find this so-called prescription drug 
benefit of little or no value as time passes. Because if the cost of 
drugs goes up 10 or 15 percent a year, no matter what the Federal 
Government offers, in the end, there is little to show for it--less and 
less each and every year.
  Mr. SARBANES. Will the Senator yield for a question?
  Mr. DURBIN. I am happy to yield for a question from the Senator from 
Maryland.
  Mr. SARBANES. Am I correct in my understanding that under this bill, 
the Government, through Medicare, could not, in fact, bring its weight 
to bear in order to lower the cost of prescription drugs through a 
buying program, where they are a heavyweight in the scale-- that the 
bill actually precludes that from happening?
  Mr. DURBIN. The Senator is correct because Medicare is not given the 
option of offering prescription drug coverage here, an option which 
most seniors would gladly endorse. And the reason is obvious: If 
Medicare can bargain on behalf of 40 million Medicare recipients, it 
has the bargaining power to bring down the cost of drugs for seniors. 
The pharmaceutical companies hate that concept, ``like the devil hates 
holy water,'' to quote our old friend Senator Bumpers, who used to say 
that on the floor from time to time.
  They don't want competition. They don't want cost control. They have 
won the day.
  The Senator from Maryland has turned on his television at home in the 
last few days and weeks and maybe heard his name mentioned on 
television commercials that are being paid

[[Page 30914]]

for by the pharmaceutical companies saying: Senator Mikulski, Senator 
Sarbanes, vote for this bill. They are spending millions of dollars 
saying vote for this bill because this bill will mean millions and 
millions more in profit for those same pharmaceutical companies.
  Mr. SARBANES. Will the Senator yield for a further question?
  Mr. DURBIN. I am happy to yield.
  Mr. SARBANES. In addition to precluding the Government from bringing 
its weight to bear in purchasing in order to lower the cost of drugs 
because they would be a very big purchaser and obviously they would 
have an impact, some have said: Well, let's at least allow for the 
reimportation of drugs from other countries, particularly Canada. Some 
of our people have been going to Canada in order to get their 
prescription drugs. They cross the border, and they can buy them at 40, 
50, 60 percent less than they pay in this country. So there were 
provisions that passed to allow reimportation. Am I correct that, in 
effect, this bill eliminates that?
  Mr. DURBIN. The Senator is correct. This bill gives the last word to 
the Bush administration and the head of the FDA who have said 
categorically they are opposed to reimportation. The reason they are 
opposed is that it would be more competition for pharmaceutical 
companies that want to charge higher prices in the United States. I 
have believed all along that we are not importing drugs from Canada, we 
are importing leadership from Canada. The Canadian Government has stood 
up for its citizens and said: We are not going to allow the drug 
companies to raise their prices every single year. This Government, 
this Congress, refuses to show the same leadership, and now is 
effectively blocking the reimportation of drugs that seniors need to 
survive.
  Mr. SARBANES. Will the Senator yield for a further question?
  Mr. DURBIN. I am happy to yield.
  Mr. SARBANES. I also understand there was an effort to clear the path 
for generic drugs to become available. Of course, generic drugs sell at 
a lesser cost than brand name drugs. A lot of the pharmaceutical people 
are opposed to that.
  It is also my understanding that this bill fails to carry through on 
the efforts to make it easy to bring generic drugs to market. Am I 
correct in that respect?
  Mr. DURBIN. The Senator from Maryland is correct. It is another 
success story for the pharmaceutical industry because they bring the 
drugs to market, brand name drugs, under patent, and during a period of 
time they have a right to sell them exclusively in America. But when 
that patent runs out, then other companies can make that same drug and 
sell it, usually at a much lower cost. So the pharmaceutical companies 
that make the brand-name drugs found ways to delay the process so that 
the generic drugs could not replace the brand-name drugs, so they could 
continue to make millions and millions of dollars off the brand-name 
drugs even when their patents expired. We changed that in the Senate.
  We put in language that said we are going to move toward generic 
drugs so consumers can have affordable drugs. And, frankly, in 
conference committee, the pharmaceutical companies won again, another 
reason they are running ads about this Senator and the Senator from 
Maryland saying vote for this bill right now, because they know it 
means more money to an industry that is already the most profitable 
industry in America.
  Mr. SARBANES. Will the Senator yield for one final question?
  Mr. DURBIN. I am happy to.
  Mr. SARBANES. I hate to intrude on his time, but this is a very 
important point. With this legislation, the pharmaceutical companies 
have, in effect, slowed the ability of generic drugs to come to market, 
which would be one source of competition that would lower their prices. 
The reimportation provisions have been written in such a way that it is 
completely in the hands of the administration whether reimportation of 
drugs, say, from Canada is allowed. The administration has been very 
clear that they are opposed to doing that. The legislation also, in 
effect, knocks out the Government from being a direct purchaser and 
controlling the prices.
  Every source that potentially could exercise some pressure or 
influence on the pharmaceutical companies to lower or restrain their 
prices is being blocked out by this legislation. So the end result is 
that it is an absolute bonanza for the drug companies. Would you say 
that is a reasonable perception of what this legislation does?
  Mr. DURBIN. I would say the Senator from Maryland is correct. I would 
refer him to a Bloomberg News article yesterday with the headline ``139 
Million Dollar Lobby Blitz Thrown at Medicare Bill.'' And it leads by 
saying:

       Health care companies, led by drug makers Merck & Co. and 
     Eli Lilly, spent a record $139.1 million in six months to 
     lobby Congress on a Medicare bill that will help the elderly 
     buy prescription medicines. The pharmaceutical companies were 
     the biggest spenders in the health care industry putting 
     money into this lobbying effort.

  The Senator knows, as I do, that if you find pharmaceutical companies 
working feverishly night and day to pass this legislation, it isn't 
because they want to make less money. They want to make more money. So 
we have the GOP, which could now be the acronym for the Greedy Old 
Pharmaceutical companies; that is what is pushing this legislation. 
That is proof positive that the seniors will be the losers.
  The seniors understand that, as do families across America. It isn't 
bad enough that it is just pharmaceutical companies that are going to 
make out so well. The same thing is true about HMO companies, the HMO 
insurance companies with the more than $10 billion Federal slush fund 
so they can compete with traditional Medicare, $10 billion, and a 
reimbursement level of 109 percent for these same companies for their 
expenses while they are competing.
  Then to add the crowning touch is something called health savings 
accounts. I would say to the Senator from Maryland, you are going to 
recognize this song after I sing a few lyrics. A company called Golden 
Rule Insurance Company, originally out of Evansville, IL, now based out 
of Indianapolis, with a man named Mr. Rooney as its CEO, has been 
locked at the hip with the Republican leadership on Capitol Hill since 
Speaker Gingrich took over in the House. That is when they dreamed up 
this idea of medical savings accounts and said: Here is the wave of the 
future. We can replace health insurance as we know it with the Golden 
Rule model of medical savings accounts, resulting in our efforts in 
1996 of a demonstration project to so see if this flawed concept would 
work. So few people were interested in signing up for it, it was a 
failure on its face.
  Guess what. In this bill there is a $6 billion subsidy for health 
savings accounts. In other words, not only are we guaranteeing record 
profits for pharmaceutical companies, not only are we creating a $10 
billion slush fund for HMOs to take seniors out of Medicare, we are 
putting $6 billion into this boondoggle health savings account. I was 
on the floor watching the Energy bill yesterday and thinking it was 
scandalous that we were putting $2 billion into the MTBE and oil 
industry--$2 billion. They did us better with this bill. The Republican 
conferees came back and said: Let's up the ante; let's make it $6 
billion to subsidize this crazy concept of health savings accounts 
engendered by the Golden Rule company, one of the greatest benefactors 
of the Republican Party on Capitol Hill. If that isn't proof positive 
that this bill has gone astray, I don't know what is.
  I say to seniors who continue to call congressional offices, keep the 
calls coming in. Let me suggest to them as well that if many of them 
happen to be members of AARP, here is that telephone number. Call your 
friends at AARP, ask Mr. Novelli, who has endorsed this boondoggle, why 
in the world has he turned his back on seniors? Why is he not fighting 
for more competitive drug prices? Why isn't he trying to stop the HMOs 
from privatizing Medicare? And why are we

[[Page 30915]]

putting a $6 billion subsidy in here for friends of the Republican 
Party, the Golden Rule Insurance Company. I think seniors across 
America get the message.
  There was just a poll taken this week of members of AARP, which I 
hope Mr. Novelli will have a chance to read.
  The poll shows that once seniors have been told what is in this bill, 
65 percent of the members of AARP said they should stop trying to pass 
this bill and work for a better plan, and only 18 percent of the 
members of AARP supported it. So by a margin of almost 4 to 1, the 
members of AARP are saying to their leadership: You have it wrong.
  I think, frankly, it is a burden now on AARP to come back to its 
roots and decide whether it is going to stand up for seniors or for 
pharmaceutical companies and HMOs. I hope the seniors across America 
who are as upset about this as many of us are will call AARP and tell 
them to stop spending millions of dollars trying to pass this bill. 
Instead, they should try to save Medicare first, and they should say 
basically don't sell out the seniors of America.
  AARP is now in lockstep with these pharmaceutical companies and HMOs. 
They have forgotten their mandate, which is to stand up as a voice for 
seniors across America. That is unforgivable. I think they are going to 
find a lot of their members tearing up their cards and walking away 
from this organization. It has become very political and insensitive to 
the seniors across America.
  Mr. SARBANES. Will the Senator yield for a question?
  Mr. DURBIN. Yes.
  Mr. SARBANES. The Senator made reference to a better bill. The very 
able Senator from Illinois, in the course of debate in the Senate, 
offered a better bill, which I was very pleased to support. That bill 
would have been a very significant and substantial step forward. Among 
other things, it did not have this ``donut'' in coverage that is in 
this bill.
  As I understand this bill, at a certain point--I think $22.50 in drug 
cost--and beyond that, up to $3,600, the burden falls back on 
individuals; is that correct?
  Mr. DURBIN. The Senator is correct.
  Mr. SARBANES. In the Senator's bill that didn't happen; is that 
correct?
  Mr. DURBIN. That is correct. This is a moving target. The fact is 
that there is a gap in coverage for prescription drugs built into this 
proposal so that the sickest seniors with the highest prescription drug 
costs will find some coverage on the front end of the year for their 
illness and then find themselves paying out of pocket $2,850, if I am 
not mistaken, before they get more coverage from the prescription drug 
benefit. So this so-called donut hole is one that I think seniors who 
are really sick and those who need expensive drugs should be aware of.
  The bill we offered said Medicare will come in and compete for lower 
drug costs and the savings we can gather for lower drug costs will 
close this donut hole.
  Mr. SARBANES. Will the Senator further yield for a question?
  Mr. DURBIN. Yes.
  Mr. SARBANES. Would we not also have been able to not have a donut 
hole if these moneys the Senator made reference to that are going to 
the HMOs--the $10 billion, I think you said--
  Mr. DURBIN. Yes, a $10 billion slush fund for HMOs.
  Mr. SARBANES. Also $6 billion--
  Mr. DURBIN. Yes, for health savings accounts, for their buddies at 
Golden Rule.
  Mr. SARBANES. So that $16 billion could have been taken and put 
directly to improve the benefit for our seniors, could it not?
  Mr. DURBIN. The Senator is correct. The Senator starts with the same 
premise I do--that seniors are most comfortable with Medicare. If this 
started off as an added benefit to Medicare, this bill would have been 
much smaller and more understandable and supported by seniors. But when 
they rejected that and said, we are going to go to private companies, 
they really opened up all sorts of problems. They guaranteed 
profitability, put in slush funds, and they complicated it to the point 
where most seniors will struggle to understand it. This didn't have to 
be the case.
  When you are out to privatize Medicare and reward pharmaceutical 
companies and help HMOs, that is where you end up.
  Mr. SARBANES. As I perceive it, all of these things that are being 
done--the HMOs, the medical accounts, the limitation on Medicare being 
able to act directly, and so forth--if this stack of papers on the desk 
represents the Medicare Program itself, they are circling around it to 
undermine and undercut it. This bill has taken on an added fundamental 
dimension.
  So as we look at this bill, we have to look at not only its 
shortcomings in adding prescription drugs to the Medicare Program, but 
we have to perceive that built into the bill are a number of efforts 
being put into place that will undercut the Medicare Program itself. Is 
that a reasonable view of the potential of this legislation?
  Mr. DURBIN. The Senator is correct. There are those who began this 
debate saying: We are going to change Medicare. Well, they had their 
way. Many came here saying: We want to help seniors pay for 
prescription drugs. If we had stuck to our original goal and focused on 
what seniors really want and what works, I think we would have achieved 
this result through Medicare a long time ago. It would have been at the 
expense of the profitability of pharmaceutical companies.
  I say to my friend, who follows some of these corporate reports more 
than I do, this pharmaceutical industry is the most profitable in 
America. Look at this chart. Profits as a percentage of revenue in 
2002: No. 1, pharmaceutical companies, with 17 percent return on 
revenues. Return on assets: No. 1, pharmaceutical companies, with 14.1 
percent. Then they were nosed out when it came to return on 
shareholders' equity by household and personal products, but they are 
still No. 2, with 27.6 percent profit as a percent of equity.
  This bill is giving them more profit at the expense of families and 
low-income seniors in America. That is why the pharmaceutical companies 
are spending millions of dollars for television, radio, and newspaper 
ads telling this Congress to ``do our bidding.'' That is why they 
already spent $139 million lobbying Congress to pass this bill.
  If the pharmaceutical companies wanted to help seniors, they could 
have done this long ago. They could have charged more reasonable 
prices, particularly to low-income seniors. But that isn't their goal. 
Their goal is more profitability. Sadly, they found allies with the 
Republican majority who are attempting to pass this bill and make 
certain they are more profitable.
  Mr. SARBANES. If the Senator will yield on that point, in 
confirmation of the Senator's analysis, the markets, in the last few 
days, have been boosting the price of the stocks of the pharmaceutical 
companies. The perception in the capital markets of the smart money 
people is that this legislation is going to significantly benefit the 
pharmaceutical companies, and they are building up the stock prices, 
which only goes to confirm and corroborate the analysis the Senator 
from Illinois has made on this issue.
  Mr. DURBIN. The Senator from Maryland is correct. I will make this 
one last reference as I see colleagues in the Chamber who want the 
floor.
  Represented on this chart are the compensation packages for the HMOs. 
This is another group that is benefiting. The $12 billion slush fund 
will be going to HMO companies such as these on the chart. They will 
leave poor and sicker people behind. There will be a $12 billion slush 
fund and some more benefits given to HMO companies. Look at the 
compensation for the executives. It runs from the obscene at Oxford, 
where Norman Payson gets $76 million.
  Mr. SARBANES. Is that per year?
  Mr. DURBIN. Yes. Mr. Payson had a very good year. Alan Wise at 
Coventry gets $21.6 million. This man must be really gifted if he is 
worth that to run a managed care company, which is now going to be in 
the category of companies eligible for the $10 billion Federal subsidy.
  Down here is United Health Group, where R. Channing Wheeler is 
getting

[[Page 30916]]

$9.5 million. I bet he was embarrassed going to the country club with 
his friends and only making $9.5 million.
  Incidentally, United Health Group--do I remember that name from the 
AARP newsletter? Yes. It turns out they are in business together. It 
turns out that AARP, which is for this bill, is in business with United 
Health Group, a managed care company. Frankly, as I understand it, 60 
percent of the revenues of AARP come through their insurance and 
advertising. Is it any wonder that AARP is pushing for this bill, when 
seniors are opposed to it?
  I want to close because I see other colleagues in the Chamber. I say 
to seniors across America: If you have received your AARP solicitation 
and sent back your membership card, please call AARP at 1-800-424-3410. 
Tell them to stand up for seniors for a change, to reject this bad bill 
that won't result in lower prescription drug costs and will privatize 
Medicare.
  Tell them you are opposed to a slush fund that is being created for 
HMOS. Tell them you think it is scandalous that we give $6 billion to 
Golden Rule for health savings accounts. And tell them it is time for 
your organization, AARP, to stand up for seniors and stand up for 
Medicare instead of caving in to the special interest groups and 
supporting this legislation.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The majority leader.

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