[Congressional Record (Bound Edition), Volume 155 (2009), Part 15]
[Senate]
[Pages 21004-21006]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              HEALTH CARE

  Mr. KYL. Mr. President, that brings me to the final point. In 
yesterday's Wall Street Journal, an article is entitled ``ObamaCare's 
Real Price Tag.'' It goes through all the different expenses of the 
proposed health care legislation, with the creation of a government 
insurance company. They talk about the funding gap that is created by 
the commitments of funding to this entire program. One of the things 
they notice is people need to be aware of the long-term consequences. 
We all know that Medicare, for example, is not financially sound. We 
can go out through the 5-year projections, 10-year, 15-year, 20-year, 
and so on, and know what the obligations of our children and 
grandchildren will be.
  When we pass regular legislation in Congress, we have a set of 
blinders that says: What is the 10-year cost? We get it, and then we 
assume there are no more costs beyond that. What this op-ed points out 
is, we can calculate a 10-year cost. Maybe it is $1 trillion or $2 
trillion or maybe it is more than that. We can at least estimate it. 
That is what the CBO and the Joint Tax Committee are charged with 
doing. Then there is an assumption that there is no cost beyond that.
  What the people who write the legislation frequently do is to build 
in benefits in the early years and then phase in the ways of paying or 
not paying for it, so the real costs come in the so-called outyears--
the outyears are beyond the 10-year window--so that it doesn't score as 
a big loser. What they point out is, in effect, what this legislation 
does is gone out for 10 years and

[[Page 21005]]

creates a cliff. When you fall off the cliff, that is when you are in 
trouble because the commitments to the people for health care have been 
already made.
  Can you imagine Congress pulling back on those commitments? Once 
there is an expectation from government, that is not lightly withdrawn. 
The American people come to expect it, and there is a big lobby against 
it, if you try to withdraw the benefit. But if you haven't provided for 
how you are going to pay for it, there is a very rude and sudden 
awakening when you come to the cliff and realize you haven't folded 
into your calculations how you are going to pay for this benefit.
  We did that with the so-called SCHIP legislation. We created a 
benefit, and the benefit kicked in early. The funding ostensibly 
stopped after a certain period of years. But everybody knew the funding 
would not stop. That required the suspension of belief. I guess it is 
called cognitive dissonance. The notion that somehow or another 
Congress is going to, at the end of that period of time--I believe it 
was 5 years--pull back all the benefits we had been giving to people 
for 5 years, that was not going to happen.
  So you had the commitment to provide benefits, but no way to pay for 
them. As this article points out, that is what is happening with this 
health care legislation as well.
  Let me quote from the third paragraph:

       In the July 26 letter, CBO Director Douglas Elmendorf notes 
     that the net costs of new spending will increase at a more 
     than 8 percent per year between 2019 and 2029--

  There we are talking about the next 10 years, not the first 10 years.

     --while new revenue would only grow at about 5 percent. ``In 
     sum,'' he writes, ``relative to current law, the proposal 
     would probably generate substantial increases in federal 
     budget deficits during the decade beyond the current 10-year 
     budget window.''

  The point is, we should not look at these things during the first 
period of time that we analyze them, but rather the continuing 
commitment of the American taxpayer. When we do that, as the Director 
of the CBO points out, we find that we have a continuing, growing 
deficit; in other words, piling up more and more debt and, if anything, 
my guess is that these estimates are conservative and that the amount 
of deficit would be even more.
  The editorialist in the Wall Street Journal had complained about 
this, talking about the ``Grand Canyon'' between spending and revenue, 
pointing to the CBO's long-term projections, and then said:

       That's not our outlook. That's what White House Budget 
     Director Peter Orszag told the House Budget Committee in 
     June. He added that ``If you're not falling off a cliff at 
     the end of your projection window, that is your best 
     assurance that the long-term trajectory is also stable.''

  As the editorial points out: ``The House bill falls off a cliff.''
  So the precise thing we are trying to avoid in intelligent 
legislating is not avoided in the Democratic health care proposals: 
benefits promised now, ostensibly paid for in the first 10 years, not 
paid for after that. That is not me talking, as I said, that is the 
nonpartisan Congressional Budget Office.
  There are other examples of this pointed out, but as the editorial 
notes in conclusion:

       ObamaCare's deficit hole will eventually have to be filled 
     one way or another--along with Medicare's unfunded liability 
     of some $37 trillion.

  I read that last night, and I had to go back and reread it--unfunded 
deficit of $37 trillion. It is impossible for us to imagine how much 
money that is--$37 trillion just for current obligations, not counting 
what would be added by the ObamaCare.
  We cannot afford this, and I think the American people are beginning 
to appreciate we cannot afford it. There is no free lunch. The Federal 
Government cannot simply keep promising things and not worry about the 
costs in the future. We can only print money for so long before we have 
rampant inflation that destroys the wealth of everyone, primarily the 
people who have saved in the country, which starts with our senior 
citizens.
  We cannot borrow our way out of it because the main people who 
continue to lend to us, such as the Chinese, have begun to lecture us 
on the fact they don't trust we are going to pay them back now, and 
they are going to start requiring more and more in the way of interest 
payments for them to continue to lend to us.
  It is a little bit like the credit card company that says to a 
family: Look, you have borrowed a lot of money on your credit card. We 
are not sure that you are going to be able to pay that back to us. So 
if you are going to borrow more money on the credit card, we are going 
to double the interest rate to make it a high interest rate so at least 
it accounts for our risk in lending you more money. Borrowing more 
money from the Chinese at higher interest rates is not the answer.
  The other alternative is to tax the American people. Everybody 
understands taxing the American people is the worst thing you can do 
for an economy, especially in a downturn. Americans believe they are 
already taxed enough. You cannot tax the rich and solve the problem 
because they already pay most of the taxes and it would only account 
for another few hundred billion dollars, even if you taxed them for 
everything they are worth.
  You eventually get down to the middle class. The President has said 
over and over that he does not want to tax the middle class. The 
reality is that it is unavoidable if we continue to consider 
legislation such as this.
  Mr. President, I ask unanimous consent to have printed in the Record 
this Wall Street Journal op-ed of August 6 called ``ObamaCare's Real 
Price Tag.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From the Wall Street Journal, August 6, 2009]

                       ObamaCare's Real Price Tag

       The funding gap is a canyon by year 10.
       ObamaCare sinks in the polls, Democrats are complaining 
     that the critics are distorting their proposals. But the 
     truth is that the closer one inspects the actual details, the 
     worse it all looks. Today's example is the vast debt canyon 
     that would open just beyond the 10-year window under which 
     the bill is officially ``scored'' for cost purposes.
       The press corps has noticed the Congressional Budget 
     Office's estimate that the House health bill increases the 
     deficit by $239 billion over the next decade. But government-
     run health care won't turn into a pumpkin after a decade. The 
     underreported news is the new spending that will continue to 
     increase well beyond the 10-year period that CBO examines, 
     and that this blowout will overwhelm even the House 
     Democrats' huge tax increases, Medicare spending cuts and 
     other ``pay fors.''
       In a July 26 letter, CBO director Douglas Elmendorf notes 
     that the net costs of new spending will increase at more than 
     8% per year between 2019 and 2029, while new revenue would 
     only grow at about 5%. ``In sum,'' he writes, ``relative to 
     current law, the proposal would probably generate substantial 
     increases in federal budget deficits during the decade beyond 
     the current 10-year budget window.'' (The House bill has 
     changed somewhat in the meantime, but not enough to alter 
     these numbers much.)
       The nearby chart shows this Grand Canyon between spending 
     and revenue, including CBO's long-term predictions. While 
     these are obviously very coarse estimates, there's also a 
     projection of a $65 billion deficit in the 10th year--and 
     ``deficit neutrality in the 10th year is . . . the best proxy 
     for what will happen in the second decade.''
       That's not our outlook. That's what White House budget 
     director Peter Orszag told the House Budget Committee in 
     June. He added that ``If you're not falling off a cliff at 
     the end of your projection window, that is your best 
     assurance that the long-term trajectory is also stable.'' The 
     House bill falls off a cliff.
       And the CBO score almost surely understates this deficit 
     chasm because CBO uses static revenue analysis--assuming that 
     higher taxes won't change behavior. But long experience shows 
     that higher rates rarely yield the revenues that they 
     project.
       As for the spending, when has a new entitlement ever come 
     in under budget? True, the 2003 prescription drug benefit 
     has, but those surprise savings derived from the private 
     insurance design and competition that Democrats opposed and 
     now want to kill. The better model for ObamaCare is the 
     original estimate for Medicare spending when it was passed in 
     1965, and what has happened since.
       That year, Congressional actuaries (CBO wasn't around then) 
     expected Medicare to cost $3.1 billion in 1970. In 1969, that 
     estimate was pushed to $5 billion, and it really came in at 
     $6.8 billion. House Ways and Means analysts estimated in 1967 
     that Medicare would cost $12 billion in 1990. They were off 
     by a factor of 10--actual spending was $110 billion--even as 
     its benefits coverage failed to

[[Page 21006]]

     keep pace with standards in the private market. Medicare 
     spending in the first nine months of this fiscal year is $314 
     billion and growing by 10%. Some of this historical error is 
     due to 1970s-era inflation, as well as advancements in care 
     and technology. But Democrats also clearly underestimated--or 
     lowballed--the public's appetite for ``free'' health care.
       ObamaCare's deficit hole will eventually have to be filled 
     one way or another--along with Medicare's unfunded liability 
     of some $37 trillion. That means either reaching ever-deeper 
     into middle-class pockets with taxes, probably with a 
     European-style value-added tax that will depress economic 
     growth. Or with the very restrictions on care and 
     reimbursement that have been imposed on Medicare itself as 
     costs exploded.
       On the latter point, the 1965 Medicare statute explicitly 
     stated that ``Nothing in this title shall be construed to 
     authorize any Federal official or employee to exercise any 
     supervision or control over the practice of medicine or the 
     manner in which medical services are provided.'' Yet now such 
     government management of doctors and hospitals is so 
     pervasive in Medicare that Mr. Obama can casually wonder in a 
     recent interview with Time magazine how anyone could oppose 
     the ``benign changes'' that he supports, such as ``how the 
     delivery system works.'' Oh, is that all?
       Democrats will return in the fall with various budget 
     tweaks that will claim to make ObamaCare ``deficit neutral'' 
     over 10 years. But that won't begin to account for the budget 
     abyss it will create in the decades to come.

  Mr. KYL. Mr. President, I know I have talked about a lot of different 
issues today, but as we start this period of time when we go back 
home--we call it our work period back home--there are a lot of issues 
about which we want to talk to our constituents.
  First on my list is going to be what do you think about the increased 
amount of debt this country is taking on, with all of the programs we 
have already passed and the programs that are on the horizon, including 
what was referred to here as ObamaCare, but the so-called health care 
reform? Do you believe your health care situation is in such a dire 
strait that we need to take on that kind of debt, or are there more 
targeted ways to resolve the problems that everybody acknowledges 
exists, particularly with some of the costs associated with health 
care.
  We are also going to talk about whether the American people are 
comfortable with the degree of government involvement, the government 
takeover of all of these different elements of our society, including 
health care, including the mortgage business, as I talked about, and 
picking winners and losers in subsidizing the purchase of cars now.
  I know we own two of the big car companies, but it seems a little 
self-serving then to try to help those car companies that the 
government owns by picking that as the place to put $3 billion to 
encourage people to buy new cars.
  I know a lot of folks back home who are in other businesses who are 
hurting significantly. They could use this help just as much. I wonder 
if we took $3 billion and spread that to some of the other industries 
that are also hurting, I am sure they would say: This is great; why 
don't you help us out?
  When government gets in the business of picking winners and losers, 
it is a sad day for our democratic Republic. I think we need to watch 
this. I am going to ask my constituents what they think about that. I 
already know. I got an earful last Sunday in church about a couple of 
these different ideas. I expect I am going to continue to hear about 
that.
  It is important that our constituents talk to us about their 
concerns. We work for them, not the other way around. They pay our 
salaries. We need to listen to them about what they have to say.
  Finally, we have all these domestic issues, but I wanted to refer to 
Senator Lieberman's comments about we cannot forget we have brave men 
and women halfway around the globe right now in 120-degree temperatures 
representing us. They are the men and women in our military services 
and in our intelligence services working very hard to protect us.
  We have to send the signal to them that we appreciate what they do, 
that we are not going to criticize them for simply doing their job. I 
think Senator Lieberman was right when he said let's not send signals 
to those we have instructed to help us out in this war on terror that 
at the end of the day we are going to second-guess what they are doing, 
we are going to be Monday morning quarterbacks and even potentially 
find them criminally liable for activity they engaged in in good faith 
and belief they were protecting the American people.
  I am going to be very interested to see what my constituents have to 
say about these issues. I know my colleagues will as well. I hope when 
we come back from the recess that we will not only be personally 
refreshed from having the opportunity to visit with our families and 
spend a little downtime but intellectually refreshed by having heard 
from our bosses--our constituents--on how they want to approach these 
problems in the future. Maybe in September, we will be a little more 
enlightened about how to carry out our responsibilities.
  Mr. President, I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BROWN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. BROWN. Mr. President, I ask unanimous consent to speak as in 
morning business for up to 15 minutes.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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