[Congressional Record (Bound Edition), Volume 155 (2009), Part 18]
[Senate]
[Pages 24906-24913]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           HEALTH CARE REFORM

  Mr. KYL. Madam President, I wish to take 10 minutes this morning to 
respond to some comments made by my friend from Illinois, my 
counterpart, the Democratic whip, comments made in response to Minority 
Leader McConnell's remarks earlier this week.
  Yesterday, Senator Durbin made a couple of points. One I specifically 
want to focus on has to do with the national debt. Senator McConnell 
had talked about the fact that spending by the Democrats, especially 
with regard to proposals for new health care legislation, was going to 
increase the national debt. The Senator from Illinois came back and 
said he agreed the debt is too high, but he said we need to understand 
that the reason it is too high is the Bush administration--that, in 
effect, President Obama inherited the debt. That is not exactly 
accurate. Here are the actual facts regarding the debt today. On 
Tuesday, 2 days ago, the Treasury Department reported that the deficit 
this past fiscal year totaled $1.4 trillion. That is a figure higher 
than the previous 4 years combined. The previous 4 years were Bush 
years. Last year was primarily the Obama administration.
  The Republican leader said:

       Since January 20 of this year, the Federal Government has 
     borrowed $1.2 trillion or more than $10,500 for every 
     household in the United States.

  What is the significance of January 20? That is the day President 
Obama was sworn in as President.
  Under the President's budget that every Democrat voted for this year, 
we will have budget shortfalls or deficits averaging $1 trillion each 
year for the next 10 years. We can't blame this on the Bush 
administration if spending was as much as the last 4 years combined and 
the budget shortfall is going to be $1 trillion for the next 10 years. 
It was never $1 trillion. It wasn't even half that much ever under 
President Bush.
  Let me put this in perspective. The President's budget, supported by 
every Democrat, will double the national debt in 5 years, increasing it 
from $5.8 trillion to $11.7 trillion. It would almost triple the debt 
in 10 years. These are estimates from the Congressional Budget Office. 
By contrast, look at the last 219 years in the history of the country. 
From 1789 to 2008, Americans amassed a $5.8 trillion national debt. In 
other words, in 5 years, this President will have a debt equal to all 
of the previous Presidents from George Washington all the way through 
George W. Bush. We cannot claim that is inherited from the past.
  This President's deficit spending is not sustainable. By the end of 
the budget period, the debt will have skyrocketed to 82 percent of the 
gross domestic product, which everyone agrees, including the 
President's advisers, is not sustainable. Think about the interest 
payments. Think about your own credit card interest payments for 
interest payments on debt. These will soon be the single largest item 
in the Federal budget.
  What if debt interest payments were the single largest item in your 
own family budget? More than $800 billion a year in 10 years will be 
spent on interest alone--$800 billion a year. That eclipses what we 
spend on national security. It is four times as much as we spend on 
education, energy, and transportation combined. These are not abstract 
numbers. This will have an effect on every American.
  In 2019, under the President's plan, each U.S. household's share of 
the Federal debt will be more than $130,000. That is more than most of 
us owe on our mortgages. Notably, since the Democrats have taken over 
the Congress--we are not talking about ``inherited'' now--the Congress 
has increased the debt limit four times, and the administration has 
made a request for a fifth increase that we anticipate occurring this 
November.
  So should we be worried about the debt? I believe so. Was it a 
problem inherited from the Bush administration? No. The real problem is 
what we have done since January 20, since President Obama came into 
office, since Democrats have been in control of the Congress and the 
adoption of a budget which is going to triple our debt in just 10 
years. And in 5 years we will have more debt than every single 
President

[[Page 24907]]

and Congress in the entire history of the country right up through 
George W. Bush accumulated--in one budget of this administration.
  The other thing I would like to speak to is comments the Senator from 
Illinois made on Tuesday. Again, he was critical of Senator McConnell, 
who noted that all of these bills passed in the House and in the Senate 
were passed on essentially partisan votes, and that Republican ideas 
had been ignored. My colleague said: Well, in the HELP Committee there 
were 150 amendments adopted that had been offered by Republicans. The 
vast majority of those were purely technical corrections, misspellings, 
typos, and things of that sort. I do not think anybody can contend that 
Republicans have had a fair voice in the creation of the health reform 
legislation around here.
  Then there was an attack on the messengers. There have been several 
reports that demonstrate that insurance premiums are going to go up, 
not down, in this legislation. The attack was not to contend that the 
figures were wrong but, rather, to attack the messengers--in two 
cases--to say: Well, the insurance industry actually paid for some of 
those reports. Does that make the reports wrong? It might raise a 
question in our minds as to whether they are appropriate, but how about 
analyzing them to see whether they are wrong.
  The majority whip then went on to say that the Congressional Budget 
Office even disagrees with the Republican leader and predicted that the 
health care premiums would actually not go up. Specifically, he said: 
``They predicted if health care reform went through, health care 
insurance premiums would go up'' on American families.
  The Senator from Illinois said:

       Well, there are those who disagree, people with the 
     Congressional Budget Office and others. . . .

  Let me quote the Congressional Budget Office. It does not disagree. 
The Congressional Budget Office specifically supports what Senator 
McConnell said:

       Premiums in the new insurance exchanges would tend to be 
     higher than the average premiums in the current-law 
     individual market.

  CBO was very clear in conversations we have had with them that 
specifically with regard to American families premiums will be higher.
  So the Senator from Kentucky, the Republican leader, was correct and 
the Democratic whip was incorrect. CBO says premiums will be higher.
  This report issued yesterday from Oliver Wyman said premiums will 
increase in the individual market approximately $1,500 for single 
coverage and $3,300 for family coverage every year.
  In my State and some other States it is even worse. For Arizona, 
Idaho, Kentucky, Virginia, and the District of Columbia, we will have 
the highest premium increases, where premiums could increase by as much 
as $2,619 for individuals and--think about this--$7,426 for families. 
Think about that as a premium increase under a bill that is supposed to 
help us afford our health care, but we get socked with a $7,000 
increase in the health care premium for our families.
  Part of this is because of the minimum benefit requirements the bill 
provides for. They note this will increase costs about 10 percent in 
the individual market and 3 percent in the small group market. This is 
under the Baucus bill. Small employers purchasing new policies in this 
new market will experience premiums that are up to 19 percent higher in 
year 5 of the reform. Premiums are going up.
  Milliman, another independent actuarial firm, found that the average 
actuarial value of a high deductible plan is 48 percent. In Arizona, 
incidentally, it is 61 percent. What does this mean? Under the 
legislation, the lowest insurance plan value is defined by the Federal 
Government. It has to be 65 percent. That means there will be an 
increase in health insurance premiums by 35 percent for those with high 
deductible plans. Individuals enrolled in individual health plans with 
a lower actuarial value than 65 percent will see their premiums 
increase by 18 percent. So to the allegation that somehow Republicans 
are wrong when we criticize the Baucus bill for raising individual and 
family insurance premiums, the reality is, all the experts agree, 
including the Congressional Budget Office.
  Then there was another question that had to do with medical devices. 
The reality is, because of taxes imposed in the Baucus bill, there are 
going to be a lot of increased expenses, including expenses that are 
going to be passed on to individuals. One of those is in the medical 
device industry.
  Let me quote a letter that some Democratic colleagues of ours--
Senators Klobuchar, Bayh, and Franken and then Senator Lugar on the 
Republican side sent to Chairman Baucus. I am quoting from it:

       [T]he provision would harm economic development and health 
     care innovation nationwide.
       [W]e are concerned that this tax will stifle technological 
     innovations that can improve patient outcomes and lower 
     health care costs.

  It is also a fact, as I said, that these expenses are passed through. 
There are several studies that demonstrate that--as well as the 
comments of the Congressional Budget Office and the Joint Tax 
Committee--all of whom say it is virtually a dollar-for-dollar 
passthrough. So if we raise taxes on the medical device industry by $40 
billion, then people are going to be paying $40 billion more in 
insurance premiums because the cost of those medical devices will be 
reflected in the cost to the insurer and, therefore, the cost to the 
people who are paying the premiums.
  There was a concern expressed by my colleague from Illinois that 
insurance companies will raise their premiums--the point I have been 
making--but they will do it in a collusive fashion and maybe we should 
look at the antitrust laws in that regard.
  Well, they do not have to collude to raise their premiums. Every one 
of them has an incentive--as the Congressional Budget Office and these 
other reports demonstrate--for them to be able to stay in business; 
they have to be able to raise their premiums to reflect their cost of 
doing business. They do not have to collude to do that.
  Then the Democratic whip made what I would say is a rather odd 
argument: Republicans have been critical of the concept of government-
run insurance. The Democratic whip said: Well, we have government-run 
insurance--Federal employees and Members of Congress--and we think it 
is a good program. And he said under the program, there are nine 
different health plans to choose from, and we pick the best one for us, 
and the employer pays part of it and we pay part of it, and so on.
  That certainly is all true, except for one thing: It is not 
government run. As he noted, there are nine private plans. This is no 
different than any other employer. Most large employers, such as the 
Federal Government, give their employees a choice of two, three, four, 
maybe sometimes as many as nine or ten plans if they are a big enough 
employer. The Federal Government is a huge employer, so we can offer 
nine different plans. But there is no Federal insurance. This is not 
federally run.
  This is the Federal Government as the employer doing the same thing 
that Honeywell as an employer would do for its employees. It gets three 
or four insurance companies with different kinds of plans and says to 
its employees: We will pay for part of the cost. You get to pay for the 
rest of it. That is not federally run or government-run insurance. So 
the Democratic whip is simply wrong when he says the plan Members of 
Congress and Federal employees have is government run. That is simply 
not true.
  I mentioned the medical device issue. I would note Senator Kerry is 
another one of our colleagues who, like me and like others, has 
expressed concerns about this issue because of the fact that the taxes 
paid by the medical device industry will, in fact, be passed on to 
consumers.
  Finally, the Democratic whip asked where the Republican health care 
plan is. I do not know how many times we have to repeat this, but let 
me do it

[[Page 24908]]

one more time. Time and time again, we have said: Here are things we 
believe will reduce the cost of health care, will help people get 
coverage who do not have it now, and will reform the system.
  What are some of the ideas we have proposed? By the way, each of 
these were offered as amendments in the HELP Committee and in the 
Finance Committee and in the House of Representatives, and Democrats 
voted against every one of them every time. So it is not as if we do 
not have ideas and alternatives that would solve specific problems, it 
is that the Democrats do not like the ideas and, therefore, have 
rejected them. But I will repeat a couple of them one more time.
  Republicans lead with medical malpractice reform, to try to do 
something about this jackpot justice system where lawyers end up 
getting most of the money, and doctors and hospitals have to practice 
defensive medicine to anticipate litigation and to be able to protect 
themselves against it. There are estimates: as much as 10 cent out of 
every health care dollar spent is on premiums that doctors have to pay 
for their liability insurance. There is over $100 billion a year that 
can be saved from defensive medicine practices if we are able to have 
medical malpractice reform. The CBO even scored it--in a very narrow 
way--at $54 billion just in savings to the Federal Government.
  As my colleague, Senator Ensign, pointed out in an exchange with the 
CBO Director in the Finance Committee, one could anticipate that about 
twice that much savings would occur if we add in all of the savings to 
the private sector as well. So we could be talking about well over $100 
billion in savings. This is a huge amount of money. It does not cost 
the Federal Government a dime. It makes the system more fair, and it is 
a savings that can be passed on in the form of lower premiums and lower 
health care costs.
  Another idea we have talked about a lot--you have heard it--the sale 
of insurance across State lines. Let's make the insurance companies 
have to compete with each other. Sometimes they have little monopolies; 
there are only two or three companies in a particular State. Well, if 
we could buy our health insurance like we can buy our casualty 
insurance, our homes or our car insurance, from any company anywhere in 
the country, those insurance companies in our States would have to be 
better competitors. My guess is they would lower our rates and they 
would give us better benefits. That competition would help us. Again, 
it does not cost a dime.
  How about association health plans, letting small businesses and 
groups band together to create larger risk pools? Risk pools help 
define the coverage. If we have a big risk pool, chances are we can get 
cheaper coverage. If we have a small risk pool, it is hard. That is why 
small businesses find it so hard. So we talk about larger risk pools 
through association health plans.
  Madam President, I think I have exceeded my 10 minutes. We could go 
on and on with Republican ideas that have been proposed but get shot 
down by the Democrats. So it is not a matter of looking for a 
Republican proposal.
  Let me conclude with this: It is true that Republicans will probably 
not propose a massive trillion-dollar bill as the Democrats have. That 
is true. We are not going to because we do not do 1,000-page bills in 
the Congress very well. We do not know the consequences of them. The 
cost is always enormous.
  Republicans have a better approach. We believe we should do this step 
by step: First, regain the trust of the American people that we can do 
it right, and that we are listening to them about what they want rather 
than coming up with some grand scheme that a bunch of staffers and 
consultants in Washington, DC, came up with.
  Let's listen to the American people, hear what it is they want. They 
do not want a massive, big spending bill that is going to add to our 
deficit, that is going to raise their taxes and raise their insurance 
premiums, and, in the end, not insure very many more Americans. That is 
not reform.
  Madam President, I see my colleague from Tennessee is in the Chamber. 
He has been an eloquent spokesman on this issue, and I am pleased to 
yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Tennessee.
  Mr. ALEXANDER. Madam President, I congratulate the Senator from 
Arizona for identifying so well, among other things, how Republicans 
would like to approach the health care reform costs. We want to reduce 
costs for individuals who are buying insurance, and we want to reduce 
the cost of our government. Rather than a comprehensive 1,000-page, 
trillion-dollar bill filled with surprises, we prefer to go step by 
step in the right direction; that is, reducing costs.
  The Senator from Arizona has mentioned ways to do that. Whether it is 
allowing small businesses to pool their resources, which could add 
millions of people to the rolls of the insured in the country, whether 
it is reducing junk lawsuits against doctors, whether it is allowing 
for the buying of insurance across State lines or health insurance 
exchanges or using health information technology, we can take steps in 
the right direction to regain the trust of the American people and move 
toward reducing costs.
  The Senator also did a very clear job of pointing out how the Baucus 
bill may actually increase costs. There has been a lot of squirming 
around on the other side because it has been suggested that instead of 
premiums going down--which is the whole point of this exercise, 
reducing costs--they might go up. I would like to talk about that a 
little bit today.
  Premiums, your premiums--and let's talk about who the ``you'' is. We 
have about 170 million Americans who have employer-based insurance, and 
we have a total of about 250 million Americans--that is most of us--who 
have some kind of insurance premium that either we pay or is paid for 
us. I think our goal is to make it easier to afford those premiums; in 
other words, to reduce costs. But the Baucus bill, in at least four 
ways, increases costs, and raises premiums.
  One way is it reduces the penalty for individuals and families who 
are required to buy insurance so they might not buy insurance, and if 
the young and healthy go out of the insurance pool, premiums of 
everybody who is in the insurance pool go up.
  No. 2, the Baucus bill will say--and so do the other bills the 
Democrats have presented--that my children, who pay lower premiums than 
I do, will have higher premiums because under the law there can't be as 
much difference between what an older person pays and what a younger 
person pays. So for most young Americans who buy insurance--and in this 
case they will be required to buy insurance or pay a penalty, so their 
premiums go up.
  There is a third reason premiums go up. Premiums will go up because, 
when you buy insurance, you don't just get to buy any kind of 
insurance; you buy a government-approved, basic policy. It sounds like 
a little more Washington takeover to me. When you go out to buy your 
government-approved, basic policy, what you will find under this bill 
is that for millions of Americans, it will cost you more. Your premiums 
will go up. There are a great many Americans who make the sensible 
decision of buying a high deductible policy. They say: I will pay most 
of my health care costs up to a point, but I will buy the insurance for 
the catastrophe in my life that I could never afford. Well, those 
policies will not be as available.
  Then, finally, there are going to be $955 billion in new taxes. The 
bill is very careful about not placing them directly on you; it puts 
them on everybody you buy things from. It puts them on people from whom 
you buy your medical devices; it puts them on people from whom you buy 
your health insurance. We all know what will happen when we put taxes 
on people from whom we buy things. If we put taxes on oil companies, 
what happens? They pass it on to us at the gas pump. If you put taxes 
on all these health care services, what happens? Our insurance premiums 
go up.
  So one does not have to be an actuary to figure this out. If the 
individual mandate penalty is weaker, premiums

[[Page 24909]]

go up. If young people can't buy cheaper policies--cheaper than mine if 
there is a rule--their premiums go up. If we all have to buy 
government-approved policies, or most of us do, that are richer than 
what many of us want to buy today, our premiums go up. If we have $955 
billion in new taxes when the bill is fully implemented, most of which 
are passed along to us, our premiums go up.
  So I would ask this question: What is this exercise all about? I 
thought it was about reducing costs. I thought it was about lowering 
the cost of our insurance premiums. But it looks as though it will 
increase the cost of our insurance premiums and, if that is true, we 
ought to reject this bill for that one reason alone. Of course, we 
haven't even seen the bill. It is not written. It has to be combined by 
the majority leader in a dark office somewhere and then we will see it. 
But that is what we should be looking for.
  It is often said that--that is another reason why the Republican idea 
of a step-by-step approach to reduce costs makes a lot more sense than 
these big, comprehensive, 1,000-page, $1 trillion bills. We want to 
reduce the cost of insurance, but we don't want to pass a bill that 
raises premiums to do that.
  It has been said there is not much bipartisanship.
  Madam President, I hope you will please let me know when I have 
consumed 9 minutes.
  The ACTING PRESIDENT pro tempore. The Chair will notify the Senator.
  Mr. ALEXANDER. Again, it has been said there is not much 
bipartisanship in this debate. That is not true. There has been a 
partisan rejection of a bipartisan bill. Fourteen of us signed up on 
the bill which Senator Wyden, a Democrat, and Senator Bennett, a 
Republican, offered.
  There is another option the various committees had. It didn't 
increase the debt a penny. It gave people more choices. It didn't have 
a new government program. It had a lot of good principles in it, but 
that was rejected. That didn't get the time of day, no more than the 
Republican step-by-step proposals, but there are other bipartisan 
efforts other than Wyden-Bennett. There is the Reid amendment offered 
by the majority leader. He became concerned about how the Baucus bill 
was going to transfer to the State of Nevada big, new Medicaid costs 
that might result in new taxes. Every single Governor in the country is 
concerned about that, Democratic or Republican. So the majority leader 
fixed the problem for Nevada and three other States. We will call that 
the Reid amendment and when this bill comes to the floor we are going 
to introduce a Reid amendment and we are all going to support it 
because we want it for Texas, we want it for South Dakota, we want it 
for New York, we want it for California. If the Federal Government is 
going to expand Medicaid, the Federal Government needs to pay for the 
Medicaid expansion and not send it to the States. So that will be a 
bipartisan step.
  Then there is another bipartisan step, and that was from eight 
Democratic Senators who wrote in and said: We want to be able to read 
the bill and know what it costs before we start voting on it. All 40 of 
us agree with that on the Republican side and we believe that is the 
right thing to do: Put it on the Internet for 72 hours. Senator Bunning 
has offered an amendment for that. That now has bipartisan support.
  That means, when this bill is finally written--it is not a bill yet--
when it comes out of the back rooms, it will at least be on the 
Internet for 72 hours. Then we will need to have a complete fiscal 
estimate. That ought to take a couple or 3 weeks. Then we need to come 
to the floor and debate it because we need to know: Are your premiums 
going up or down? Are taxes going up or down? What about these Medicare 
cuts: $500 billion in Medicare cuts not spent to restore Medicare but 
for a new government program, I think. My point is, there are a number 
of questions that need to be answered.
  Let me conclude in this way: We have a bipartisan approach. We want 
to read the bill and know what it costs. Enough of us do that, so I 
think we will do that, and we will have at least as good a debate as we 
did on the farm bill. That took a month. The Energy bill took 2 or 3 
months. This is one-sixth of the economy, and we will need several 
weeks to talk. What will we be talking about? We will be talking 
about--at least I will be talking about--whether this bill is reform; 
whether it will reduce costs, and whether it will raise your premiums 
or lower your premiums. If it weakens the individual mandate; if it 
says young people can't buy inexpensive policies anymore; if it says 
millions of us have to buy government-approved, richer policies instead 
of policies with high deductibles; and if it imposes $955 billion of 
taxes that will be passed on, raising our premiums; if it raises our 
premiums instead of lowering our premiums, then why are we doing this?
  That is not health care reform. That is not reducing costs. We should 
instead take the Republican approach and go step by step to reduce 
costs starting with small business health care plans, reducing junk 
lawsuits, allowing insurance to be sold across State lines, creating 
health insurance exchanges, implementing health information technology, 
and changing tax incentives.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from South Dakota is 
recognized.
  Mr. THUNE. Madam President, I wish to pick up where my colleague from 
Tennessee left off and talk a little bit about this issue that is 
before us and before the country right now, the issue of health care 
reform. I would submit to my colleagues in the Senate that the purpose 
of reform, as has been stated now for many years as reform has been 
talked about, is that we have to do something to get health care costs 
under control. We have to rein in these increasing, double-digit, every 
year inflationary increases people are seeing in their health care 
costs. So the purpose of health care reform, as stated, is to lower the 
costs of health care for people in this country, as well as to extend 
coverage, provide access to coverage for those who don't normally have 
it, which, as has been noted in the past, is about 15 percent of the 
population. About 85 percent of the people in this country do have 
health care, and their concern is: What are we going to do to drive 
down the costs of health care? What are we going to do to make my 
health insurance cost less and my health care coverage cost less?
  In that vain, I wish to point out an article from yesterday in the 
Wall Street Journal, which I would recommend to my colleagues and which 
was written by former CBO Director Douglas Holtz-Eakin.
  Madam President, I ask unanimous consent to have that article printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From the Wall Street Journal, Oct. 13, 2009]

                     The Baucus Bill Is a Tax Bill

                        (By Douglas Holtz-Eakin)

       Remember when health-care reform was supposed to make life 
     better for the middle class? That dream began to unravel this 
     past summer when Congress proposed a bill that failed to 
     include any competition-based reforms that would actually 
     bend the curve of health-care costs. It fell apart completely 
     when Democrats began papering over the gaping holes their 
     plan would rip in the federal budget.
       As it now stands, the plan proposed by Democrats and the 
     Obama administration would not only fail to reduce the cost 
     burden on middle-class families, it would make that burden 
     significantly worse.
       Consider the bill put forward by the Senate Finance 
     Committee. From a budgetary perspective, it is 
     straightforward. The bill creates a new health entitlement 
     program that the Congressional Budget Office (CBO) estimates 
     will grow over the longer term at a rate of 8% annually, 
     which is much faster than the growth rate of the economy or 
     tax revenues. This is the same growth rate as the House bill 
     that Sen. Kent Conrad (D., N.D.) deep-sixed by asking the CBO 
     to tell the truth about its impact on health-care costs.
       To avoid the fate of the House bill and achieve a veneer of 
     fiscal sensibility, the Senate did three things: It omitted 
     inconvenient truths, it promised that future Congresses will 
     make tough choices to slow entitlement spending, and it 
     dropped the hammer on the middle class.

[[Page 24910]]

       One inconvenient truth is the fact that Congress will not 
     allow doctors to suffer a 24% cut in their Medicare 
     reimbursements. Senate Democrats chose to ignore this reality 
     and rely on the promise of a cut to make their bill add up. 
     Taking note of this fact pushes the total cost of the bill 
     well over $1 trillion and destroys any pretense of budget 
     balance.
       It is beyond fantastic to promise that future Congresses, 
     for 10 straight years, will allow planned cuts in 
     reimbursements to hospitals, other providers, and Medicare 
     Advantage (thereby reducing the benefits of 25% of seniors in 
     Medicare). The 1997 Balanced Budget Act pursued this strategy 
     and successive Congresses steadily unwound its provisions. 
     The very fact that this Congress is pursuing an expensive new 
     entitlement belies the notion that members would be willing 
     to cut existing ones.
       Most astounding of all is what this Congress is willing to 
     do to struggling middle-class families. The bill would impose 
     nearly $400 billion in new taxes and fees. Nearly 90% of that 
     burden will be shouldered by those making $200,000 or less.
       It might not appear that way at first, because the dollars 
     are collected via a 40% tax on sales by insurers of 
     ``Cadillac'' policies, fees on health insurers, drug 
     companies and device manufacturers, and an assortment of odds 
     and ends.
       But the economics are clear. These costs will be passed on 
     to consumers by either directly raising insurance premiums, 
     or by fueling higher health-care costs that inevitably lead 
     to higher premiums. Consumers will pay the excise tax on 
     high-cost plans. The Joint Committee on Taxation indicates 
     that 87% of the burden would fall on Americans making less 
     than $200,000, and more than half on those earning under 
     $100,000.
       Industry fees are even worse because Democrats chose to 
     make these fees nondeductible. This means that insurance 
     companies will have to raise premiums significantly just to 
     break even. American families will bear a burden even greater 
     than the $130 billion in fees that the bill intends to 
     collect. According to my analysis, premiums will rise by as 
     much as $200 billion over the next 10 years and 90% will 
     again fall on the middle class.
       Senate Democrats are also erecting new barriers to middle-
     class ascent. A family of four making $54,000 would pay 
     $4,800 for health insurance, with the remainder coming from 
     subsidies. If they work harder and raise their income to 
     $66,000, their cost of insurance rises by $2,800. In other 
     words, earning another $12,000 raises their bill by $2,800--a 
     marginal tax rate of 23%. Double-digit increases in effective 
     tax rates will have detrimental effects on the incentives of 
     millions of Americans.
       Why does it make sense to double down on the kinds of 
     entitlements already in crisis, instead of passing medical 
     malpractice reform and allowing greater competition among 
     insurers? Why should middle-class families pay more than 
     $2,000 on average, by my estimate, in taxes in the process?
       Middle-class families have it tough enough. There is little 
     reason to believe that the pain of the current recession, 
     housing downturn, and financial crisis will quickly fade 
     away--especially with the administration planning to triple 
     the national debt over the next decade.
       The promise of real reform remains. But the reality of the 
     Democrats' current effort is starkly less benign. It will 
     create a dangerous new entitlement that will be paid for by 
     the middle class and their children.

  Mr. THUNE. Madam President, I wish to highlight a few sentences from 
that article regarding the bill that was reported out of the Finance 
Committee earlier this week. In that article he says this:

       The bill would impose nearly $400 billion in new taxes and 
     fees. Nearly 90 percent of that burden will be shouldered by 
     those making $200,000 or less. It might not appear that way 
     at first because the dollars are collected via a 40-percent 
     tax on sales by insurers of ``Cadillac'' policies, fees on 
     health insurers, drug companies, and device manufacturers. 
     But the economics are clear. These costs will be passed on to 
     consumers by either directly raising insurance premiums or by 
     fueling higher health care costs that inevitably lead to 
     higher premiums.

  Mr. McCAIN. Madam President, will the Senator yield for a question?
  Mr. THUNE. I am happy to yield to my colleague from Arizona.
  Mr. McCAIN. It is my understanding of the proposal that this reform 
will begin to be implemented in what year?
  Mr. THUNE. I believe the answer to that question, I might state 
through the Chair, is 2013, 2014.
  Mr. McCAIN. 2013, 2014. But when do the taxes that would supposedly 
implement this proposal kick in?
  Mr. THUNE. The taxes, I would say to my colleague, again through the 
Chair, kick in immediately. You get the revenues starting to come in 
right away. So the revenues are front-loaded, the costs of the program 
are back-loaded, so it understates and distorts what this new proposal 
will cost.
  Mr. McCAIN. So we have 10 years' worth of tax increases to pay for 
5\1/2\ years of the implementation of this so-called reform, and then 
what are the implications in the future?
  Mr. THUNE. Well, that is clearly the case. If you look at the 10-year 
cost of this, because the revenues--the tax increases--are front-
loaded, and we get to see basically 10 years of tax increases and only 
about 5\1/2\ years of actual implementation of the program, what you 
have to do to get a full picture of what the cost of this program will 
be is take the fully implemented cost. When you take the fully 
implemented cost, I would say to my colleague from Arizona, you are 
looking not at the $829 billion that was reported by the CBO; because 
of this distortion and this creation of a revenue source before the 
actual costs kick in, you are looking at a $1.8 trillion new 
entitlement program fully implemented over a 10-year period.
  Mr. McCAIN. I have one more question for my colleague. Is there any 
provision in the legislation, as you have seen it, that has any 
approach whatsoever to medical malpractice reform or medical liability 
reform which, in the view of many experts, could be as much as $100 
billion to $200 billion a year?
  Mr. THUNE. There is not.
  Mr. McCAIN. Isn't that incredible?
  Mr. THUNE. I think it is incredible because it is now validated by 
the Congressional Budget Office that if you were to incorporate that, 
you would drive down the cost of health care in this country by 
literally billions and billions of dollars. Yet there is no mention or 
reference to medical malpractice reform in this bill.
  Mr. McCAIN. Isn't it true, as much as we respect the Congressional 
Budget Office and their figures as to the amount of money that can be 
saved by implementing meaningful medical malpractice reform, such as is 
the case in the State of Texas, that it doesn't reduce the costs as far 
as litigation is concerned? Not only that, but I don't believe it is 
calculated using the way they calculate costs: The incredible increase 
in health care costs associated with the practice of defensive 
medicine, with doctors prescribing unneeded, unnecessary and, many 
times, because of the nature of the procedure, unwanted additional 
tests and procedures because that physician is practicing what we call 
defensive medicine, which is the fear of finding themselves in court; 
and not only because of the increasing premiums for medical malpractice 
but also obviously the time, the effort, the energy, including damage 
to reputation that could accrue from a lawsuit brought against that 
physician.
  The ACTING PRESIDENT pro tempore. The Senator from South Dakota is 
recognized.
  Mr. THUNE. Madam President, my understanding is that the 
Congressional Budget Office does not only contemplate the cost of 
litigation, it does not take into consideration the cost of the 
practice of defensive medicine, which, as the Senator from Arizona 
noted, is an enormous additional cost, and many independent estimates 
suggest $100 billion to $200 billion annually. The CBO study only took 
into consideration government health care, so it didn't include the 
private health care delivery in this country. But many physicians, as 
the Senator noted, practice defensive medicine because they are worried 
about being sued. All these duplicative tests and additional practices 
that are undertaken by doctors in this country to avoid the lawsuit 
potential or the risk they incur when they practice medicine adds 
significantly--as I said, as independent estimates suggest, to the tune 
of $100 billion to $200 billion annually.
  Mr. McCAIN. Madam President, isn't it absolutely incredible that in 
the name of reducing health care costs, and with the burden that rising 
health care costs impose on every American family, that there should 
not be one provision--one meaningful provision--for medical liability 
reform, which is, in the judgment of any objective observer--except 
maybe the trial lawyers--something that must be implemented if you are 
going to have a serious effort at reducing the cost of health care in 
America?

[[Page 24911]]


  Mr. THUNE. Absolutely. I think that in a moment of honesty Howard 
Dean recently said that the reason medical malpractice reform is not 
included in this legislation is because they didn't want to take on the 
trial lawyers. It seems to me that you cannot have a meaningful 
discussion about lowering health care costs in this country absent the 
inclusion of this issue--an important issue--of the practice of 
defensive medicine, which is tied directly to medical malpractice 
lawsuits in this country, and the desperate need we have for reform in 
that area.
  Mr. McCAIN. I thank my colleague.
  Mr. THUNE. Madam President, as the Senator from Arizona noted, an 
important component of the debate is the cost curve, which leads to 
higher premiums and health care costs both in government-held care--
Medicare and Medicaid--and in private health care delivery.
  Despite all of the promises the President has made to the contrary, 
there isn't anything in these bills to date, according to the CBO, that 
drives the cost curve down. In fact, what we are looking at is higher 
health care costs attributable to many of the provisions in these 
bills. It is interesting to know, because during the hearing, the 
Director of CBO, Doug Elmendorf--and earlier I mentioned Douglas Holtz-
Eakin, a former CBO Director, but the current Director has repeatedly 
admitted that he did not have the opportunity to find answers to some 
of the important questions in this debate. CBO told us increased taxes 
will be passed on in the form of higher premiums, general dollar for 
dollar. When he was asked if CBO calculated how much insurance premiums 
will rise for Americans who already have coverage, he said no. When he 
was asked whether they calculated whether total spending on health care 
would go up or down, he said no. When he was asked if they calculated 
how the bill would affect access to health care, he said no. Because of 
the way the bill has so many holes and no real legislative language, 
and the way it has been rushed through, there has simply not been time, 
evidently, for CBO to look at this and to know for certain what some of 
the impact will be. I have to ask, would Americans buy a health care 
plan without knowing how much it costs? Does anybody in this country 
look at buying a plan without knowing its cost? That is exactly what 
the Democrats are doing with this bill--buying a national health care 
plan without any idea about how much it is going to cost the Nation or 
individual taxpayers.
  We do know that the plan is going to bring us higher taxes, higher 
premiums, and cuts in Medicare. I think that is a fair assessment. Two 
studies last week--independent analyses--verified that premiums are 
going to go up. I will point out that one of those studies which came 
out yesterday--the Oliver Wyman study--said premiums will increase in 
the individual market approximately $1,500 for single coverage and 
$3,300 for family coverage annually. That is exclusive of inflation. So 
the annual inflationary increases we are seeing in medical expenses are 
not included in that estimate, but it is $1,500 for an individual and 
$3,300 for a family annually, the increase in cost for coverage.
  Small employers purchasing new policies in the reform market are 
going to experience premium increases that are up to 19 percent higher. 
This is in year 5 of reform. The other study--the 
PricewaterhouseCoopers study--which came out a couple days ago, also 
had some statistics that were revealing. It illustrated, too, that 
these premium costs that are going to be borne by the American people 
will go up significantly. So you have two independent analyses that 
have been done in the last week, talking about how much premiums are 
going to go up. We know now, with the Joint Tax Committee's assessment 
and CBO's assessment, that taxes will go up. We have said how the 
impact of that is going to fall. If you look at the biggest impact of 
the tax increases, families earning 150 percent of the Federal poverty 
line, $32,200, will face an effective marginal tax rate of 59 percent. 
And 89 percent, according to the CBO, of the tax increases will fall on 
earners making less than $200,000 a year. Fifty percent would fall on 
those making less than $100,000 a year.
  You have average Americans out there trying to cope with the cost of 
health care, along with the cost of everything else, who are going to 
be hit with higher taxes and premiums, and our senior population will 
be hit with higher Medicare premiums because Medicare will be cut, and 
it is going to impact the Medicare Advantage Program, and it will 
impact providers across this country.
  What we know for certain about this bill is that it is going to spend 
$1.8 trillion, when fully implemented over a 10-year timeframe; it is 
going to leave 25 million people without coverage; it is going to raise 
premiums for people in this country; it is going to raise taxes on 
people in this country, particularly those who make under $100,000 a 
year--half of the tax burden will fall on them, according to the CBO 
and the Joint Committee on Taxation. That is what we are looking at 
with this legislation.
  As much as is talked about in health care reform and covering more 
people and lowering costs, at the end of the day we are looking at 
higher premiums, higher taxes, and cuts in Medicare. That is the bottom 
line. That is why we, as Republicans, are looking for real solutions 
that bend the cost curve down. As the Senator from Arizona noted, one 
of those solutions certainly would be throwing into this mix the issue 
of medical malpractice reform.
  I want to point out a couple of statistics before I conclude about 
how this would impact people in South Dakota, according to one of the 
studies. In the South Dakota market, the individual market, if you are 
buying in that market, you are going to see your premiums go up by 47 
percent. If you are a family, it will go up by 50 percent; and if you 
are in the small group market, you will see a 14-percent increase in 
premiums; and if you are an individual and for a family, it is 15 
percent.
  My State of South Dakota isn't going to fare very well when it comes 
to the costs associated with this plan. I argue that most Americans, as 
they evaluate the personal impacts of this health care reform proposal, 
are going to give it a thumbs down and, hopefully, we can go back to 
the drawing board and address this in the way we should have in the 
first place, and that is step by step, not rushing to jam through this 
massive expansion, this $1.8 trillion program, with higher taxes, 
higher premiums, and cuts in Medicare.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Arizona is 
recognized.
  Mr. McCAIN. Madam President, I congratulate the Senator from South 
Dakota on a very important statement. I see the Senator from New 
Hampshire and others on the floor waiting to speak on this issue. I 
will be brief.
  As the majority leader begins discussions behind closed doors to 
create the Senate bill that he is going to bring to the floor, I think 
it is important for the American people to understand the impact these 
policies will have on the cost of health insurance premiums, tax rates, 
and our economy for generations to come.
  I think we should understand the smoke and mirrors used to make the 
Democrat proposal appear to improve the budget over the next 10 years. 
The following taxes start next year. If you have insurance, $201 
billion is raised in excise taxes on health plans. If you don't buy a 
plan, or you buy one that the government doesn't think is good enough, 
the concept proposal raises $4 billion in fines on the uninsured. If 
you are an employer who today cannot afford to provide health insurance 
to your employees, which is the case with small business, the ones 
hurting the most--not Goldman Sachs or JPMorgan but the small 
businesses--the concept proposal raises $23 billion in employer 
penalties and contributions. If you use medical devices, such as 
hearing aids or artificial hearts, the concept proposal raises taxes by 
$38 billion on medical device manufacturers. Who will pay for that in 
the long run? The user. If you take prescription drugs, the concept 
proposal raises $22 billion in new taxes on medicines.
  The Congressional Budget Office estimates that Americans will face 
higher

[[Page 24912]]

health insurance premiums, while waiting 4 years for the reform 
proposal to begin. This gimmickry is incredible. The President and 
Senate Democrats claim the proposal is under $1 trillion and slightly 
reduces the deficit over 10 years. That is a joke--ten years of taxes 
but only 5\1/2\ years of implementation. To get the true 10-year cost 
of implementation, you should look at the 10 years beginning in 2013. 
Using the CBO numbers, we are told that the proposal spends $1.8 
trillion. That is the real cost of this proposal.
  You might be justified in wondering what Americans get for that $1.8 
trillion. The answer is more government, with 13 million more people 
placed into the failed Medicaid Program. Medicaid is a program that is 
busting the Federal budget and State budgets all over America. Medicaid 
is a program that fails in patients having access to physicians. Forty 
percent of doctors will not see Medicaid patients. Medicaid is a 
program that fails in health outcomes for low-income Americans. We are 
not going to give low-income Americans more options for better health 
coverage; we are just giving them the status quo.
  It is bad enough that the proposal massively increases government 
regulation of health care and insurance, massively expands the 
government-sponsored Medicaid Program--which the States cannot afford 
to pay for, as we all know--massively cuts Medicare and drives up 
insurance premiums in the process. But the proposal ignores what 
Americans want: less government, less taxes, more freedom, and more 
choices.
  The concept paper in the Senate Finance Committee--it is not even a 
bill--slams Americans with an entitlement program that will grow 
faster, according to the CBO, than the economy, while at the same time 
dramatically increasing the tax burden on all Americans.
  Let's restate the obvious about the Senate Finance Committee concept 
proposal. As the majority leader conducts his closed-door process to 
create the Senate bill he will bring to the floor, it is important for 
the American people to understand what impact these policies will have 
on the cost of health insurance premiums, on tax rates, and on our 
economy for generations to come.
  I have seen recent information that the Medicare Part D Program, 
which is touted as a success--which I voted against because it wasn't 
paid for--is now having--guess what--increased costs. The problem is 
that we are not addressing the fundamental problems that cause a 
dramatic increase in health care costs in America. In fact, we are 
continuing a process that we have done, which is new entitlement 
programs, without ways to pay for them.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from New Hampshire is 
recognized.
  Mr. GREGG. Madam President, I congratulate the Senator from Arizona 
and the Senator from South Dakota for framing this debate on health 
care with very specific and excellent points.
  The simple fact is that the cost of this program is grossly 
understated, but the cost is extraordinary, even when understated--
almost a trillion dollars. The real cost is $1.8 trillion, when it is 
fully phased in. In fact, if you include in it the doctor fix, which 
was taken off the table so the cost would look better, which is $200 
billion-plus, the cost of this proposal, when fully phased in, is over 
$2 trillion over a 10-year period.
  And the offsets that are going to be used to pay for this? Their plan 
is basically to cut Medicare Advantage, eliminate that program for 
seniors--a lot of seniors like Medicare Advantage--and try to save 
about $400 billion doing that and take that money and create a brand 
new entitlement to benefit people who do not have insurance or people 
who do not have enough insurance, as defined by this bill. In addition, 
they will raise taxes and raise fees. Most of the fees will be coming 
in from the hospital associations, the doctors, the drug companies, and 
the insurers, all of which will be passed through, of course, to 
consumers in the form of higher premiums or higher costs. Again, it is 
going to be the consumers of America, Middle America, the people who 
use health care in this country, who are going to pay the cost.
  It is a huge gap even between the stated amount that is going to be 
raised in this bill, and the real expenditure in this bill. And that 
gap goes directly onto the debt of our children--the debt of this 
country, which has to be paid for by our children.
  This is in the context of an administration which has exploded the 
size of government in the first 10 months of its term--exploded the 
size of government. They have proposed a budget which over the next 10 
years will run on the average $1 trillion of deficit every year, which 
will take the Federal debt from about 41 percent of gross domestic 
product up to 80 percent of gross domestic product, which will take 
Federal spending from about 20 percent of gross domestic product up to 
about 25 percent of gross domestic product.
  What do all those numbers mean? They mean quite simply that our 
children are going to be passed a country which will have so much debt 
and such a large government that it simply cannot afford it; that the 
quality of life of our children, as they move into their earning years, 
is going to be fundamentally undermined--their ability to buy a home, 
their ability to send their kids to college, their ability to just live 
the quality of lifestyle our generation has had is going to be 
fundamentally harmed by this administration's decisions to spend today 
as if there is no tomorrow or to spend today and pass the bills on to 
tomorrow. It is a true affront to the traditions of this country.
  Let me quote from Thomas Jefferson because Thomas Jefferson is deemed 
to be the founder of the Democratic Party. Thomas Jefferson got a lot 
of things right, of course. He wrote the Declaration of Independence, 
the most brilliant document in the history of mankind stating freedoms 
to which we subscribe. He played a major role in defining our Nation 
and what makes our Nation special.
  He said this about debt. This was a letter to John Taylor in 1816:

       I sincerely believe . . . that the principle of spending 
     money to be paid by posterity under the name of funding is 
     but swindling futurity on a large scale.

  That is a pretty strong word, ``swindling,'' used by the founder of 
the Democratic Party relative to the use of debt.
  Then he wrote to William Plumer, who, coincidentally, was the 
Governor of New Hampshire, in a letter. He said:

       I, however, place economy among the first and most 
     important republican virtues, and public debt as the greatest 
     of the dangers to be feared.

  The proposals which are coming out of this administration do swindle 
our children's future, just as Thomas Jefferson said. To run debts of 
this size, to run deficits of this size, to put in place a program that 
is going to cost almost $2 trillion when it is fully implemented is 
basically to guarantee that this Nation is going to have such a burden 
of government that we will be unable to sustain our government in the 
form it is today.
  What does that lead to when you run up those types of deficits and 
debt, when you run up that type of spending? It leads to two options: 
Our children are either going to inherit a nation where we have to 
devalue the dollar, and basically create a situation where everybody's 
savings and everybody's net worth is dramatically impacted by lessening 
the value of that through inflation or, alternatively, you are going to 
have to dramatically increase the tax burden of this country to a point 
where you will undermine the fundamental productivity of our Nation and 
put job creation and the capacity to have prosperity through job 
creation at risk because the tax burden will become so high.
  In fact, it was pointed out, studies have shown that the tax burden 
will go up to 59 percent of income under some of the proposals that are 
pending just on this bill, to say nothing of when you start totaling up 
all the other bills, all the spending that will occur. Even

[[Page 24913]]

today, the administration announced they want to spend $14.5 billion 
more without offsetting it in any way to fund an interest group they 
feel needs to be funded.
  This raises the fundamental question: Why do you proceed in this way? 
Why would you create a program that is going to have such a devastating 
impact on the economic future of our Nation? You do it because it gets 
you votes in the next election, I guess. I guess that is why you do it.
  Certainly there are ways to reform health care, to improve health 
care that do not require this massive expansion in the size of 
government. There are a lot of ways to do that. Let me give a few.
  For example, we could focus on the chronic diseases which are the 
drivers of health care costs in this country, diseases such as obesity 
and Alzheimer's. We could try to get those under control. That would 
help control costs.
  We could give employers the incentive through monetary payments--
actual cash--to say to their employees: Listen, if you go out and live 
a healthy lifestyle, we will give a reward in cash. If you stop 
smoking, if you get yourself into a workout situation where you drop 
weight, if you take tests such as having a colonoscopy, if you have a 
mammogram, we are going to reward you with money. That is a step which 
would significantly improve health care delivery and costs in this 
country.
  We can say to the delivery systems: Listen, rather than doing a lot 
of quantity for the purposes of generating revenue, why don't you do a 
little quality with value tied to it? There are health care delivery 
systems in this country today which accomplish that. Rochester, MN; 
Salt Lake City, UT; Pittsburgh, PA--there are a whole series of these 
centers which have shown you can deliver better quality at lower costs 
if you are intelligent about it and reduce overutilization.
  We could, as was discussed at length by the Senator from South Dakota 
and the Senator from Arizona, do something about abusive lawsuits. The 
simple fact is, abusive lawsuits are driving huge costs in the health 
care system. Thirty percent of health care is deemed to be defensive 
medicine. There is no reason doctors should have to give tests they 
don't believe they have to give, but they have to give in order to 
defend themselves from lawsuits. Those are foolish and expensive. Madam 
President, $54 billion is the cost estimate from CBO of savings just 
from that one item, and that is an understated cost because it doesn't, 
as was pointed out, calculate the defensive medicine side.
  Those are a few good ideas, but there are a lot more good ideas. It 
can be done on a step-by-step approach which gives us better health 
care without this attempt to basically take over the entire system.
  Let's not play any more games around here. What is this about? This 
is about creating a system, putting in place an alleged comprehensive 
reform, the purpose of which is to drive private activity out of the 
market because there are a lot of people on the other side of the aisle 
who believe profit is bad and the marketplace does not work in health 
care, and that we should move towards a single-payer system. That is 
what this is about. Raise premiums to a level where employers will be 
forced to drop their insurance and push people into what is called this 
exchange. There will be a public plan in the exchange when it comes 
from the conference committee, should it get that far--hopefully it 
will not but if it does--and then basically push everybody into the 
public plan and create an atmosphere where the playing field is so 
tilted against any sort of private activity that people who have their 
insurance today will lose it and you will have to choose a public plan, 
for all intents and purposes. That will be your choice 4 or 5 years 
from now.
  The effect of that, of course, of moving toward a single-payer 
system, which is the stated goal of many of my colleagues on the other 
side and a majority of the people in the House of Representatives, the 
effect of moving to a single-payer system or a nationalized system is 
very destructive to our health care generally. Primarily, it means 
people will end up with delays. There will be price controls put in 
place relative to certain types of medicines you can receive. 
Innovation will be stifled because people will not be able to invest 
money and get a reasonable return, especially in the area of 
development of new pharmaceuticals and new biologics, which are so 
critical to the health care system today. We will have people standing 
in line. We will have people basically being subject to delays. We will 
have people, I absolutely guarantee you, finding their health care 
rationed depending on their age, as occurs in England under its system. 
And we will simply see a significant lessening of innovation and, most 
important, people will not have choices. You will basically be forced 
off the private system into a public system.
  This is the ultimate goal here--not stated but clearly intended of 
what is going to happen if you move toward a system as has been 
outlined at least in the Kennedy-Dodd bill, as it came out of the HELP 
Committee and is now somewhere in this building--we don't know where--
being merged into a new piece of legislation with the Finance Committee 
bill. So when Thomas Jefferson makes this point that you should not 
swindle the next generation by radically expanding your debt, we should 
live by that because it is a pretty good point. When a bill is brought 
forward on this floor which alleges to be fiscally responsible and it 
claims it meets the obligation, it meets its costs, but it understates 
the costs by almost $1.2 trillion and overstates how much it is going 
to generate in revenues and you don't get these Medicare cuts unless--I 
have never seen Medicare reductions occur in this Congress. Then 
basically you are loading up the debt of our children. It is that 
simple. That is the inevitable response of this piece of legislation, 
that the debt will expand.
  As Thomas Jefferson said, he believed in ``the principle of spending 
money to be paid by posterity under the name of funding is but 
swindling futurity on a large scale.'' And this may be the largest 
scale of swindling that has ever occurred in America's history.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Kirk). The Senator's time has expired.
  The Senator from Colorado.

                          ____________________