[Congressional Record (Bound Edition), Volume 150 (2004), Part 8]
[Senate]
[Pages 10497-10498]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            MEDICARE VIDEOS

  Ms. STABENOW. Mr. President, as we are wrapping up the session this 
week, I think it is very important to note what we all read in the 
Washington Post today. Something very serious was clearly spelled out. 
That is that the General Accounting Office has concluded the U.S. 
Department of Health and Human Services illegally spent Federal money 
on what amounted to covert propaganda, by producing videos about the 
Medicare changes that were made to look like news reports. Portions of 
the videos which had been aired by 40 television stations around the 
country do not make it clear that the announcers were paid by Health 
and Human Services, or paid by taxpayers, and that they were not real 
reporters.
  In fact, the administration has violated two Federal laws. This comes 
from the nonpartisan arm, the Congressional Investigative Services, the 
General Accounting Office.
  They indicated two different laws that the administration broke in 
these ads on Medicare.
  No. 1, the Omnibus appropriations bill of 2003: The prohibition on 
using appropriated funds for publicity or propaganda purposes.
  No. 2, the Anti-Deficiency Act: Incurred obligations in excess of 
appropriations available for that purpose.
  This is just one more example of the ongoing saga in what happened in 
relationship to the passage of the new Medicare law and all of the 
irregularities--the pronouncement that, in fact, the law was violated 
and the other ethics investigations going on.
  Let me go through some of what else is happening. It is stunning, 
actually, when you look at the full picture. I would argue that this is 
absolutely in the wrong direction and against the interests of those 
who count on Medicare--our seniors and disabled, and the American 
taxpayers who have been funding what the GAO says are illegal ads.
  In addition to that, 2 weeks ago, the Congressional Research Service 
concluded that the administration potentially violated the law in a 
related matter in which the Medicare Program's chief actuary has said 
he was threatened with firing a year ago if he shared with Congress 
cost estimates that the Medicare legislation would be one-third more 
expensive than what we were told--one-third more expensive than the 
$400 billion the President said it would cost.
  Also, the House ethics panel meanwhile is investigating whether 
Republican leaders attempted to bribe or coerce a Republican House 
Member--in fact, someone in my own State--to vote for the bill before 
it passed by a

[[Page 10498]]

few votes just before dawn after the longest record rollcall in the 
history of the House.
  We have numerous other challenges and questions. It is important to 
note for the record that the latest investigation by the GAO was not 
prompted by our side of the aisle, nor requested. It was something they 
looked into on their own separate from other concerns which have been 
raised. We have raised issues that relate to the advertising we have 
seen on television.
  Concerning materials, the GAO indicated that, while they were not 
specifically in violation, the HHS materials have notable omissions and 
other weaknesses. They say it is a question of prudence and 
appropriateness for HHS's decision to communicate by placing 
advertising in Roll Call, which we all know is something that we read 
and certainly our constituents and the seniors and the disabled of the 
country do not read.
  This goes on and on, questions of violating the law and questions of 
an ethics violation.
  Now we see, in fact, that the administration specifically has broken 
two different laws. One of the questions is, What do we do about that? 
I think the public deserves the answer to that. What is it that we do 
when the administration violates the law as it relates to spending 
public dollars and advertising as it relates to this Medicare bill?
  A colleague of mine is suggesting--since we know it is a campaign 
year and we know this is put forward certainly to put the best light on 
this for the administration--the Senator from New Jersey, Mr. 
Lautenberg, has suggested that the President repay the funds from his 
Presidential campaign.
  Given what we know is happening this year and the fact that certainly 
the administration wants to have the best face put on this Medicare 
package and certainly has everything to gain from using public dollars 
to advertise that, I think it would be appropriate to ask the President 
to repay that from his campaign funds. In fact, they are in violation 
of the law.
  We have seen questionable action after questionable action. The head 
of the center of Medicare and Medicaid, after writing this bill and 
working closely with the industry that benefits from it--the 
pharmaceutical industry--leaves to take a job with folks involved in 
the industry that will make money off of this new law.
  We have seen other individuals leaving and going into lucrative 
positions where they will themselves be making money off of this new 
law.
  We know it has been analyzed and that the pharmaceutical industry 
will be making, during the next 8 years, about $139 billion in new 
profits. That is tough to do if you are lowering prices and tough to do 
if you are providing a real Medicare benefit to seniors which they can 
afford.
  The reality is that is not what this bill does. This bill doesn't 
allow Medicare to be able to negotiate group discounts as we do through 
the VA.
  It creates a situation where up to 40 million seniors and disabled 
are locked into the highest possible prices--not only in our country 
but in the world. We have a bill that locks in high prices.
  The industry is making billions of dollars from it. People from the 
administration are going to work for the industry or related businesses 
that will be making money off of this process.
  We now see a situation where, again, the taxpayer money that was put 
aside to be able to explain the Medicare bill has actually been used in 
a way that is in violation of the law.
  I say again that the GAO concluded that the Department of Health and 
Human Services illegally spent Federal money--taxpayers' money--on what 
amounted to covert propaganda by producing videos about the Medicare 
changes that were made.
  Another piece of that which is extremely disconcerting to me is we 
now have discount cards for seniors for those who qualify for 
Medicare--depending on where you live--and there could be 60 or 70 
different cards that you now can attempt to wade through to try to find 
a discount card that will help you when you really are struggling to 
pay for your medicine.
  We are now finding since passing the Medicare bill that many of the 
name brand companies have dramatically increased the prices of their 
products in anticipation of the discount card. The base is higher. That 
is like the storeowner who marked up the product 25 percent and then 
put a sign out that says: ``15 percent sale.'' That is what is 
happening to many of our seniors.
  To add insult to injury, those who purchase cards--most of them are 
purchased for about $30--lock themselves into one card for a year after 
wading through all of the different cards. They pick the one that 
covers the medicines they use. They purchase the card and they are 
locked into it for a year, but the business, the industry can change 
every 7 days the list of what is covered. Today, four medicines are not 
covered; next week maybe two aren't covered; and next week maybe none 
of them are covered.
  Why would this be set up like this? It is confusing. They are not 
real discounts. The discounts are changed. It is certainly not set up 
for the people who depend on Medicare every day.
  Once again, the implementation of the bill that passed is being done 
in a way that helps the industry that already makes billions and 
billions of dollars in producing the products, but it is not helping 
our seniors. We want industry to be successful.
  Taxpayers help subsidize the billions of dollars of research given 
free to the industry. We provide tax credits, tax deductions, writeoffs 
and patents. All we ask at the end of the day is that people can afford 
their medicine, that people can afford oftentimes the lifesaving 
medicine they need for their cancer, diabetes, or other chronic 
disease.
  This is serious. We debated and had a lot of hoopla about a new law 
in Medicare. We have seen nothing but broken promises, broken laws, 
broken ethics rules since the adoption of the law. I suggest it is time 
to start over. We can do better. It is time to scrap this benefit, 
start over, get it right, follow the law, follow the ethics rules, 
negotiate group prices, get a real benefit, bring prices down. That is 
what our seniors expected the first time. It is time we make a 
commitment to get it right.
  I am very hopeful between now and the end of the session in the fall 
that we are going to turn around and get this right. Scrap the old bill 
and pass a new one that focuses on helping our seniors and bringing 
down prescription drug prices for everyone. And by the way, it is time 
to follow the law in the process.
  The PRESIDING OFFICER. The Senator from Washington.

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