[Congressional Record (Bound Edition), Volume 155 (2009), Part 20]
[Senate]
[Pages 27774-27779]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           HEALTH CARE REFORM

  Mr. ALEXANDER. Mr. President, not long ago, eight Democratic Senators 
wrote to the majority leader and said what all 40 Republican Senators 
have expressed and what most Americans--I think maybe 99 percent of 
Americans--would say we need to do. They said: Before we proceed to a 
vote on the health care bill that is so much in discussion across this 
country today, that we, No. 1, have a complete legislative text; that 
we, No. 2, have a complete estimate of its costs from the Congressional 
Budget Office; and, No. 3, it be on the Internet for 72 hours so the 
American people can read it--read the text, know what it costs, have 
time to consider both.
  We are looking forward to that bill. What we know is, we have a 
2,000-page bill that has been passed by the House of Representatives 
narrowly. The majority leader has had in his office a secret bill that 
he is working on which we have not seen yet.
  This morning, I would like to talk about one of the reasons it is 
important we be able to read the text, know what it costs, and know how 
it affects each American. We have talked a lot about how the bills we 
have seen so far have the effect of raising insurance premiums, 
increasing taxes, cutting Medicare, and increasing the Federal debt, 
when what we are supposed to be doing is reducing the cost of health 
care for individuals and families and reducing the cost of health care 
to the government which is spiraling out of control in terms of deficit 
spending.
  But all of that obscures an even more serious problem with the health 
care bills we have seen so far; that is, the effect on the States. As a 
former Governor of Tennessee, that is what I want to address for a few 
minutes this morning.
  I picked up my newspaper in Nashville on Sunday morning, and here was 
the headline: ``[Governor] Bredesen Faces Painful Choices as 
[Tennessee] Begins Budget Triage.'' ``Triage''--that is a sort of talk 
usually reserved for an emergency room.
  I have said several times--and some people, I am sure, thought I was 
being facetious--that any Senator who votes to expand Medicaid and 
transfer enormous costs to the States ought to be sentenced to go home 
and serve as Governor for 2 terms and try to implement the Medicaid 
Program, which is bankrupting States and ruining public higher 
education. I am not facetious when I say that because if we have a 
chance to read these bills and know what they cost, they have the 
potential to literally bankrupt States and ruin public higher 
education.
  But do not take my word for it. Here is the Nashville Tennessean and 
the Knoxville News Sentinel writing about Governor Bredesen of 
Tennessee. Knoxnews.com reports: ``relentless bad news.'' Now, 
Tennessee is ``fiscally better off than many States.'' The ``shortfall 
is less severe than the Bredesen administration estimate[d].'' ``But 
there is no quarrel,'' according to the State's largest newspapers, 
that Tennessee's State government ``faces a grim situation''--``$750 
million in cuts.'' Then things got worse because the money coming in 
this year is less than was expected. The Governor ``has told his 
department heads to present him with suggestions for budget cuts of 6 
percent and to include contingency plans for adding another 3 
percent.''
  Those are real cuts. We talk about cuts in Washington. We talk about 
reducing the rate of growth. Those are not real cuts. In Tennessee and 
in California and in Illinois, and all across this country, cuts are 
cuts. You spend less this year than you did the year before.
  ``Layoffs . . . are likely, the Governor says.'' ``This will be my 
toughest budget year.''
  Charles Sisk, writing in the Tennessean of November 16, says:

       Tennessee might release as many as 4,000 non-violent 
     felons, possibly even including people convicted of drug 
     dealing and robbery, under a plan outlined Monday by the 
     Department of Correction to deal with the state's budget 
     crisis.

  The National Governors Association, in an analysis last week, points 
out a combination of the economic downturn--the deepest since the Great 
Depression--and the increase in State Medicaid--now, this is not 
Medicare for seniors we are talking about; this is the largest program 
for low-income Americans, 60 million Americans for which States pay 
about one-third of that cost, which the health care plans we have seen 
intend to dump about 14 million more Americans into--spending for those 
programs average 8 percent growth this year, while Governors such as 
Governor Bredesen are making actual cuts. Well, you can imagine what 
that is doing to other important State programs and tuition.
  The Washington Post reported what the Office of the Actuary at the 
Centers for Medicare and Medicaid Services said over the weekend; which 
is, generally speaking, when we add more people to the Medicaid Program 
the doctors and the hospitals who are expected to serve them will not 
be willing to serve them. I will say more about that in a minute.
  So how in the world, in the light of these conditions, could we even 
be thinking about a provision in this health care bill that would add 
tens of billions of new costs to the States? We decide in Washington 
that it is a great idea to expand health care, but we send the bill to 
the Governors and the legislators who are in their worst fiscal 
condition since the Great Depression.
  That is called an unfunded mandate. If we think it is such a great 
idea to dump 14 million more Americans into a low-income program called 
Medicaid--for which 50 percent of doctors will not see new patients 
because they are so under-reimbursed--then we should pay for it somehow 
in the Federal budget instead of dumping the bill onto the States.
  For Tennessee, the costs will be, according to Governor Bredesen, who 
is a Democrat and the cochairman of the National Governors Association 
health care caucus--he says this will cost our State $1.4 billion over 
the next 5 years.
  This is real money. How much money? Well, based on my experience as 
Governor, I do not see how the State of Tennessee could afford to pay 
that without instituting a new State income tax or without doing 
serious damage to higher education in Tennessee or both. And I believe 
it is true of every State in America. The majority leader thought it 
was true of his State, so he fixed it for his State and three others, 
but for just 5 years. Then what happens after the 5 years? Well, you 
put the bridge out on the chasm a little further and you fall off as 
far or maybe farther than you already would.
  Forty percent of physicians, according to a 2002 Medicare Payment 
Advisory Committee survey, restrict access for Medicaid patients. So we 
are saying here we have a great health care reform bill and not only is 
it going to bankrupt States but it doesn't do any favors for a great 
many low-income Americans, because we are putting them in a system 
where 40 percent of doctors won't see them freely, and 50 percent of 
doctors won't see new Medicaid patients at all. In some States, the 
number of doctors who will see babies, who will see children, is as low 
as 20 or 30 or 40 percent. So as a way of partially dealing with that, 
the House bill says, OK, States are going to be required to pay primary 
care doctors who see Medicaid patients as much as Medicare doctors are 
paid. That adds another big new bill to the State, runs up the State 
taxes, runs up the college tuition payments when the States are unable 
to properly fund the colleges and the universities and the community 
colleges. So my colleagues can see why this is so much trouble: 
billions more for the Federal Government; billions more for the States. 
Then it is

[[Page 27775]]

like giving the low-income Americans who end up in this government 
program, which is expanding, a ticket to a bus line that doesn't 
operate half the time, because half the doctors won't see new Medicaid 
patients.
  The ACTING PRESIDENT pro tempore. The Senator has 1 minute remaining.
  Mr. ALEXANDER. Thank you very much, Mr. President.
  Add to all of that the idea of dumping 14 million more low-income 
Americans into the Medicaid Program not only ruins States fiscally, 
hurts public higher education in the States, puts these patients in 
programs that doctors won't see; it is a program where $1 out of $10 is 
wasted by fraud and abuse, according to the Government Accountability 
Office.
  Republicans suggest that instead of these comprehensive, sweeping, 
2,000-page bills that raise taxes, raise premiums, raise the debt, add 
to State taxes, hurt higher education because of what I described, and 
put low-income Americans into a program that half the doctors won't 
see, we should move step by step to reduce costs. We should start with 
small business health plans that allow businesses to pool their 
resources and insure more people at a lower cost; allow purchasing of 
health insurance across State lines; reduce the number of junk lawsuits 
against doctors; create health insurance exchanges so more Americans 
can shop for cheaper health insurance; and do something about waste, 
fraud, and abuse. If we were to take those steps, that would be real 
health care reform because it would be reducing costs to the American 
people and to our government.
  Mr. President, I ask unanimous consent that the articles I referred 
to earlier be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                   [From knoxnews.com, Nov. 15, 2009]

                       News on State Budget Grim

                           (By Tom Humphrey)

       Nashville--Phil Bredesen, preparing the last state budget 
     he will present as Tennessee's governor, will begin on Monday 
     hearing recommendations from his most trusted advisers on how 
     to cut spending plans to account for relentless bad news.
       Tennessee, according to a nationwide study released last 
     week, is fiscally better off, than many states. Further, 
     according to a legislative committee's staff calculations, 
     the current state revenue shortfall is less severe than the 
     Bredesen administration estimates.
       But there is no quarrel with the general proposition that 
     Tennessee state government faces a grim situation.
       The budget plan adopted in June and now in place for the 
     present fiscal year, which began July 1, includes the 
     anticipation that about $750 million in cuts will be needed 
     for the fiscal year beginning July 1, 2010--most of that 
     amount in reductions avoided this year by using federal 
     stimulus money.
       And that was before things got worse. According to the 
     state Department of Finance and Administration, which is part 
     of Bredesen's administration, state tax collections are 
     already $101.3 million less than assumed when this year's 
     budget was enacted.
       ``The stimulus has kind of concealed what's been going on 
     in terms of revenues,'' Bredesen said.
       Overall, federal funding provides about $12.1 billion of 
     the $29.6 billion state budget this year. General state taxes 
     provide about $12.6 billion--the shrinking portion that funds 
     general state government--with the rest coming from earmarked 
     revenues such as college tuition and license fees.
       The Legislature's Fiscal Review Committee staff has 
     calculated that the state revenue shortfall currently is just 
     $7.2 million below what it was projected back when the 
     current budget was presented to lawmakers. An explanation of 
     the differences gets pretty complex, including a committee 
     estimate that the state's tax take will decline more 
     dramatically in the next few months than does the Bredesen 
     administration's projection of a rebound.


                            A very deep hole

       But there is uniform agreement that the state's budget 
     picture is grim.
       ``The state remains in a very deep hole that it is not 
     going to climb out of in this budget year,'' said Jim White, 
     executive director of the Fiscal Review Committee. ``That 
     hole is going to require very painful and drastic budget 
     reductions across much of state government. The only question 
     is how bad it will be.''
       White says $290 million in cuts will be needed in addition 
     to the programmed $750 million in cuts.
       Bredesen, accepting his staff calculations, has told his 
     department heads to present him with suggestions for budget 
     cuts of 6 percent and to include contingency plans for adding 
     another 3 percent in cuts if things go even worse than 
     expected. That process begins Monday with the Department of 
     Education.
       The state funds public schools statewide through the Basic 
     Education Program. The governor and the Legislature avoided 
     cuts to the BEP for the current year.
       Avoiding them again, Bredesen said, will be a priority. But 
     any increase in education funding, such as needed for making 
     more children eligible for pre-kindergarten programs, is 
     forgotten.
       Another priority is honoring commitments to economic 
     development projects, Bredesen has said.
       Keeping education and economic development commitments 
     whole, of course, requires deep cutting in other areas, such 
     as the Department of Children's Services or the Department of 
     Mental Health, which were aided by federal stimulus money 
     this year.


                      Employee furloughs an option

       Layoffs of state employees are likely, the governor says, 
     though he will look at alternatives such as furloughs.
       ``This will be my toughest budget year,'' said Bredesen, 
     who will leave office in January 2011, after his successor is 
     elected next year. ``I hate to go out that way, but that's 
     the way it is.''
       Bredesen has taken some partisan criticism for the budget 
     situation. Senate Republican leader Mark Norris, for example, 
     recently declared Bredesen should have made deeper cuts in 
     the current budget in accord with a GOP proposal that the 
     Democratic governor branded ``stupid'' during the legislative 
     session.
       But Senate Speaker Ron Ramsey, a Republican who is seeking 
     his party's nomination for election as governor next year, 
     said he generally agrees with the Bredesen approach.
       ``The governor is doing exactly as I'll do when I'm 
     governor,'' he told reporters last week.
       ``It's going to be a tough budget year. The only upside is 
     that people realize we're in tough times and it's not going 
     to be easy.''
       Tennessee is apparently in better shape, fiscally speaking, 
     than many other states.
       In a rating of all 50 states' fiscal status last week, the 
     Pew Center for the States declared that there are 10 states 
     threatened with ``economic disaster,'' with California 
     leading the list. The rating assigned a score for each state, 
     with the higher scores indicating a more dangerous financial 
     situation.
       California had a 30, and all the others in the top 10 
     problem states had a score of 22 or greater.
       Tennessee's score was 15, the same as North Carolina. Other 
     border states have lower scores, including Arkansas at 14 and 
     Virginia at 13, while others had higher scores, including 
     Kentucky at 21 and Mississippi at 20.
                                  ____


               [From the Washington Post, Nov. 15, 2009]

                 Report: Bill Would Reduce Senior Care

                          (By Lori Montgomery)

       A plan to slash more than $500 billion from future Medicare 
     spending--one of the biggest sources of funding for President 
     Obama's proposed overhaul of the nation's health-care 
     system--would sharply reduce benefits for some senior 
     citizens and could jeopardize access to care for millions of 
     others, according to a government evaluation released 
     Saturday.
       The report, requested by House Republicans, found that 
     Medicare cuts contained in the health package approved by the 
     House on Nov. 7 are likely to prove so costly to hospitals 
     and nursing homes that they could stop taking Medicare 
     altogether.
       Congress could intervene to avoid such an outcome, but ``so 
     doing would likely result in significantly smaller actual 
     savings'' than is currently projected, according to the 
     analysis by the chief actuary for the agency that administers 
     Medicare and Medicaid. That would wipe out a big chunk of the 
     financing for the health-care reform package, which is 
     projected to cost $1.05 trillion over the next decade.
       More generally, the report questions whether the country's 
     network of doctors and hospitals would be able to cope with 
     the effects of a reform package expected to add more than 30 
     million people to the ranks of the insured, many of them 
     through Medicaid, the public health program for the poor.
       In the face of greatly increased demand for services, 
     providers are likely to charge higher fees or take patients 
     with better-paying private insurance over Medicaid 
     recipients, ``exacerbating existing access problems'' in that 
     program, according to the report from Richard S. Foster of 
     the Centers for Medicare and Medicaid Services.
       Though the report does not attempt to quantify that impact, 
     Foster writes: ``It is reasonable to expect that a 
     significant portion of the increased demand for Medicaid 
     would not be realized.''
       The report offers the clearest and most authoritative 
     assessment to date of the effect that Democratic health 
     reform proposals would have on Medicare and Medicaid, the 
     nation's largest public health programs. It analyzes the 
     House bill, but the Senate is also expected to rely on 
     hundreds of billions

[[Page 27776]]

     of dollars in Medicare cuts to finance the package that 
     Majority Leader Harry M. Reid (D-Nev.) hopes to take to the 
     floor this week. Like the House, the Senate is expected to 
     propose adding millions of people to Medicaid.
       The Centers for Medicare and Medicaid Services administers 
     the two health-care programs. Foster's office acts as an 
     independent technical adviser, serving both the 
     administration and Congress. In that sense, it is similar to 
     the nonpartisan Congressional Budget Office, which also has 
     questioned the sustainability of proposed Medicare cuts.
       In its most recent analysis of the House bill, the CBO 
     noted that Medicare spending per beneficiary would have to 
     grow at roughly half the rate it has over the past two 
     decades to meet the measure's savings targets, a dramatic 
     reduction that many budget and health policy experts consider 
     unrealistic.
       ``This report confirms what virtually every independent 
     expert has been saying: [House] Speaker [Nancy] Pelosi's 
     health-care bill will increase costs, not decrease them,'' 
     said Rep, Dave Camp (Mich.), the senior Republican on the 
     House Ways and Means Committee. ``This is a stark warning to 
     every Republican, Democrat and independent worried about the 
     financial future of this nation.''
       Democrats focused Saturday on the positive aspects of the 
     report, noting that Foster concludes that overall national 
     spending on health care would increase by a little more than 
     1 percent over the next decade, even though millions of 
     additional people would gain insurance. Out-of-pocket 
     spending would decline more than $200 billion by 2019, with 
     the government picking up much of that. The Medicare savings, 
     if they materialized, would extend the life of that program 
     by five years, meaning it would not begin to require cash 
     infusions until 2022.
       ``The president has made it clear that health insurance 
     reform will protect and strengthen Medicare,'' said White 
     House spokeswoman Linda Douglass. ``And he has also made 
     clear that no guaranteed Medicare benefits will be cut.''
       Republicans argued that the report forecasts an increase in 
     total health-care spending of more than $289 billion.
                                  ____


           [From the Knoxville News Sentinel, Nov. 15, 2009]

       Bredesen Faces Painful Choices as TN Begins Budget Triage

                           (By Tom Humphrey)

       Phil Bredesen, preparing his last state budget as 
     Tennessee's governor, will begin on Monday hearing 
     recommendations from his most trusted advisers on how to cut 
     spending to account for relentless bad news.
       Tennessee, according to a nationwide study released last 
     week, is fiscally better off than many states. Further, 
     according to a legislative committee's staff calculations, 
     the current state revenue shortfall is less severe than the 
     Bredesen administration estimates.
       But there is no quarrel with the general proposition that 
     Tennessee state government faces a grim situation.
       The budget plan adopted in June and now in place for the 
     present fiscal year, which began July 1, includes the 
     anticipation that about $750 million in cuts will be needed 
     for the fiscal year beginning July 1, 2010--most of that 
     amount in reductions avoided this year by using federal 
     stimulus money.
       And that was before things got worse. According to the 
     state Department of Finance and Administration, which is part 
     of Bredesen's administration, state tax collections are 
     already $101.3 million less than assumed when this year's 
     budget was enacted.
                                  ____


                  [From the Tennessean, Nov. 16, 2009]

                State May Release Prisoners To Cut Costs

                             (By Chas Sisk)

       Tennessee might release as many as 4,000 non-violent 
     felons, possibly even including people convicted of drug 
     dealing or robbery, under a plan outlined Monday by the 
     Department of Correction to deal with the state's budget 
     crisis.
       Correction Commissioner George Little said the department 
     would have no choice but to recommend early release of 
     inmates if it were to implement the budget cuts called for by 
     Gov. Phil Bredesen. The department has already squeezed out 
     savings and left more than 300 positions unfilled, and it is 
     relying heavily on federal stimulus funding in its current 
     budget, he said.
       ``This isn't scare tactics,'' he said. ``We've got to make 
     ends meet. . . . We would not propose these sorts of very 
     serious and weighty options if we were not in such dire 
     circumstances.''
       Bredesen, who does not have to submit his budget plan until 
     Feb. 1, did not commit to the plan.
       ``If you were going to take that dramatic step, I would 
     only want to do it with the assurance that I got the budget 
     savings I would expect,'' Bredesen said.
       The plan, which Little described on the first day of state 
     budget hearings, would involve releasing prisoners from local 
     jails, saving the department in per diem expenses.
       To meet Bredesen's goal of cutting 6 percent, or $35 
     million, from the Department of Correction's budget, as many 
     as 2,155 inmates held in local jails would need to be 
     released, Little said. Another 1,078 prisoners would need to 
     be released from the state's jails if Bredesen were to call 
     for an additional cut of 3 percent, as the governor has 
     indicated he might do.
       Alternatively, the department could close one or two of the 
     state's 14 prisons, a move that would result in the release 
     of about 4,000 felons. Such a move would likely result in the 
     release of more dangerous criminals, but it would prevent 
     local sheriffs, judges and district attorneys from replacing 
     inmates who were released with other criminals.
       In either scenario, the department would aim to release 
     inmates who had committed Class C, D or E property crimes. 
     Class C felonies include crimes such as drug dealing, bribery 
     and simple robbery and carry a sentence of three to 15 years. 
     Class D and Class E felonies are less serious crimes.
       The state currently has about 19,700 in its prisons, but 
     the department already had plans to reduce that population to 
     18,500 inmates with the closure of the state prison in 
     Whiteville at the end of next year. Most of the budget for 
     that facility had come from the $48 million in federal 
     funding that the department is getting during the current 
     fiscal year--money that will largely disappear once the 
     stimulus program has run its course.
       ``We've, frankly, exhausted all of our options other than, 
     frankly, prison population management,'' Little said.
                                  ____


              The State Fiscal Situation: The Lost Decade

       The fiscal condition of states deteriorated dramatically 
     over the last two years because of the depth and length of 
     the economic downturn, and state officials do not expect this 
     situation to improve any time soon. Previous downturns have 
     proven that the worst budget years for a state are the two 
     years after the national recession is declared over. States' 
     recoveries from the current recession, however, may be 
     prolonged with most economists projecting a slow and 
     potentially jobless national recovery. Moreover, even when 
     recovery begins, states will continue to struggle because 
     they will need to replenish retiree pension and health care 
     trust funds and finance maintenance, technology and 
     infrastructure investments that were deferred during the 
     crisis. They will also need to rebuild contingency or rainy 
     day funds. The bottom line is that states will not fully 
     recover from this recession until late in the next decade.
       The Current Situation--The recent economic downturn started 
     in December 2007 and likely ended in August or September 
     2009, making it one of the deepest and longest since the 
     Great Depression. State revenues were down 4.0 percent in the 
     last quarter of calendar year 2008, and 11.7 and 16.6 percent 
     in the first two quarters of 2009, respectively. These 
     findings are consistent with the Fiscal Survey of States 
     estimate that state revenues declined 7.5 percent in fiscal 
     year (FY) 2009, which for most states ended June 30, 2009.
       Revenues will likely continue down for another one or two 
     quarters before turning up slowly. This precipitous drop in 
     state revenues is consistent with past recessions in which 
     the trough in state revenue generally coincides with the peak 
     in unemployment. Most economists forecast that unemployment 
     will continue to increase for several months and possibly 
     into the first quarter of 2010.
       Similarly, Medicaid spending, which is about 22 percent of 
     state budgets, averaged 7.9 percent growth in FY 2009, its 
     highest rate since the end of tile last downturn six years 
     ago. Medicaid enrollment is also spiking, with projected 
     growth of 6.6 percent in FY 2010 compared with 5.4 percent in 
     2009. The combination of falling revenues, which accompany 
     high unemployment,and an explosion in Medicaid enrollment, 
     which occurs very late in an economic downturn, explain why a 
     recession's greatest impact on state budgets occurs one to 
     two years after the downturn is over. States' budget problems 
     are reflected in the latest Fiscal Survey of States, which 
     shows states closed budget gaps of $72.7 billion in FY 2009 
     and $113.1 billion in FY 2010. This includes tax and fee 
     increases of $23.8 billion in 2010. Even with cuts and tax 
     increases, states are experiencing new budget shortfalls 
     totaling $14.5 billion for 2010 and $21.9 billion for 2011. 
     Given projected revenue shortfalls, however, these shortfalls 
     will increase dramatically over the next several months.
       The American Recovery and Reinvestment Act (ARRA)--Of the 
     $878 billion in ARRA funds, about $246 billion came to or 
     through states in more than 40 programs. Most importantly, 
     the $87 billion in Medicaid funds and the $48 billion in 
     state stabilization funds were flexible and allowed states to 
     offset planned budget cuts and tax increases. The Medicaid 
     funds allowed states to reprogram state funds that were 
     originally to fund Medicaid expansions, while the education 
     money was targeted for elementary, secondary and higher 
     education, which represents about one-third of state 
     spending. If Congress had not made these funds available, 
     state budget cuts and tax increases would

[[Page 27777]]

     have been much more draconian and devastating to state 
     governments, their employees and citizens. Both the ARRA 
     Medicaid and education funds expire at the end of December 
     2010. States must plan for the serious cliff in revenues they 
     will face at that time.
       The Recovery Period--While there is still uncertainty 
     regarding the shape of the recovery, there seems to be a 
     growing consensus that it will be slow. Numerous studies 
     project that state revenues will likely not recover until 
     2014 or 2015. A recent forecast by Mark Zandi at Economy.com 
     showed that the national unemployment rate, which straddled 
     5.5 percent during the 2001-2007 period, will not attain that 
     level again until 2014. Similarly Zandi's latest forecast 
     indicated that state revenues will not return to the 2008 
     level in real terms until FY 2013. As mentioned above, until 
     employment improves, state revenues will continue to 
     struggle. Work by the Nelson A. Rockefeller Institute of 
     Government similarly indicates that per capita real revenues 
     will not reach the 2007 level until 2014. Making matters 
     worse, economist Robert Kuttner has indicated that the 
     states' fiscal shortfalls will be about $350 billion over the 
     next several years.
       Deferred Investments--Even when recovery begins in the 
     2014-2015 period, states will be faced with a huge ``over 
     hang'' in needs and will have to accelerate payments into 
     their retiree pension and health care trust funds, as well as 
     fund deferred maintenance and technology and infrastructure 
     investments. They will also have to rebuild contingency or 
     rainy day funds. All of these needs were postponed or 
     deferred during the 2009-2011 period and will have to be made 
     up toward the end of the decade. According to a 2007 Pew 
     Center on the States report, states have an outstanding 
     liability of about $2.73 trillion in employee retirement, 
     health and other benefits coming due over the next several 
     decades, of which more than $731 billion is unfunded.
       The bottom line is that states will continue to struggle 
     over the next decade because of the combination of the length 
     and depth of this economic downturn and the projected slow 
     recovery. Even after states begin to see the light, they will 
     face the ``over-hang'' of unmet needs accumulated during the 
     downturn. The fact is that the biggest impact on states is 
     the one to two years after the recession is over. With states 
     having entered the recession in 2008, revenue shortfalls 
     persisting into 2014 and a need to backfill deferred 
     investments into core state functions, it will take states 
     nearly a decade to fully emerge from the current recession.

  Mr. ALEXANDER. I thank the Chair and yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Nebraska is 
recognized.
  Mr. JOHANNS. Mr. President, thank you. I rise today to also speak 
about health care. I will tell my colleagues when the Senator from 
Tennessee was talking about Medicaid, we former Governors can relate to 
what he was saying. I had the opportunity, as the Presiding Officer 
knows, to be Governor of Nebraska for 6 years, and Medicaid was an 
enormous challenge. It is eating up State budgets. States are 
struggling. My own State, which has done better than just about every 
other State in the country, is in special session today trying to 
figure out how to find cuts of about $330 billion, which is a lot of 
money in our State. Plus, there are these tremendous access problems, 
how to get people into Medicaid. So I wish to associate myself with his 
comments.
  I wish to speak today, if I could, about some townhall meetings I had 
back home in Nebraska this last week. As soon as we recessed, I headed 
home. In about 48 hours we had four townhall meetings. Boy, if I were 
to give some advice, I would say whenever this bill comes out we should 
call a recess for a week. We should all agree upon it in a bipartisan 
way, and we should go home, and we should listen to the people. I got 
so much good prairie wisdom, as I call it, from the folks back home. I 
wish to talk about that today.
  One of the things I talked about as I was making my presentation is 
the proposed Medicare cuts and the impact it has on Nebraskans, real 
people. The impact on the current Nebraska health care delivery system 
cannot be denied. DISH hospitals we estimate today--and again we will 
see the final bill and we will figure out what the exact numbers are--
but the estimate is there will be $142 million in cuts to those 
hospitals. Our nursing homes across the State that do such a great job 
with our senior population estimate cuts of about $93.2 million. Home 
health is a program I have always respected and what they do. The idea 
is, if we can keep people in their home longer versus a nursing home, 
that saves money. So I promoted it as a Governor and I promote it now. 
They are projecting $126 million in cuts. By 2016, it is estimated that 
66 percent of Nebraska home health agencies will be operating in the 
red. Then, hospice estimates they will have a 12-percent payment 
reduction. That is a real impact on services because in our hospice 
systems, oftentimes people are driving long distances to provide that 
service. Then Medicare Advantage, which is a popular program back home, 
especially with poor citizens in rural areas--about 35,000 Nebraskans 
currently have plans, and as my colleagues know, that has a big bull's-
eye on it for cuts. Some say that wasn't a very good program, but I 
will tell my colleagues the people who have that program like it.
  Citizens came to me and they shared concerns about access to care. 
They shared concerns such as: Is this going to bring down the cost of 
health care? Those are promises that have been made as this health care 
debate has unfolded. Our President has made those promises. Questions 
were raised such as: How about Medicare? What impact will it have? Are 
there going to be negative impacts? Today, as I did during the 
townhalls, I wish to try to address these questions.
  In fact, I wrapped up my townhalls on Friday in Lincoln, NE, and then 
the experts over at the Center for Medicare and Medicaid Services 
actually answered these questions for us. On Saturday, the following 
day, the chief actuary of the Obama administration's CMS released a 
report that analyzed the recently passed House legislation. Why is that 
important? It is important because the House has finished its work for 
now and, ultimately, if the Senate were to pass a bill, it is the House 
bill and the Senate bill that will be conferenced. It concluded this: 
There are decreases in access to health care services. Medicare 
payments to hospitals and nursing homes are reduced over time based on 
certain productivity targets.
  The idea is that by paying institutions less money, they will be 
forced to become more productive. I will tell my colleagues that in 
Nebraska, if you have a critical access hospital in a rural area and it 
is serving 25 patients, today they are as productive as they can 
possibly get. If you have a nursing home in a small community and your 
idea as the Governor or as the family is that a loved one can stay 
close to home, they are about as productive as they can get.
  Congress could intervene and say, well, we are not going to make 
those cuts in the years to come, but the actuary said, and I am 
quoting: ``So doing would likely result in significantly smaller actual 
savings.''
  So there we have it. We have experience in this area where every year 
Congress doesn't take the action, And it doesn't bend the cost curve, 
according to this expert.
  Earlier this year the President said--and I am quoting--that this 
``will slow the growth of health care costs for our families, our 
businesses, and our government.''
  Yet CMS forecasts an actual increase in total health care spending of 
more than $289 billion over the next 10 years. I am quoting here again 
from that report:

       With the exception of the proposed reductions in Medicare 
     payment updates for institutional providers, the provisions 
     of H.R. 3962 would not have a significant impact on future 
     health care cost growth rates. In addition, the longer-term 
     viability of the Medicare update reductions is doubtful.

  In other words, Health and Human Service experts don't believe it is 
even viable to make the kinds of cuts that are proposed long term. Even 
if Congress has the will to make the cuts, health care costs are going 
up, not down. Let me repeat this. This bill drives up the cost of 
health care, not down. Astounding, absolutely astounding.
  It doesn't allow you to keep the plan if you like it. How many times 
was that promise made? By 2014, Medicare Advantage enrollment would 
drop 64 percent from 13.2 million to 4.7 million because benefits would 
be cut. Every single advocacy group for senior citizens should be on 
the phone today calling Senators to say, Don't go there.

[[Page 27778]]

This hurts seniors. Also, insurance plans will have to be government 
approved. In our State, I saw an estimate that said 61 percent of our 
plans are not going to be in compliance and would have to be changed.
  When it comes to health care, it is often suggested to get a second 
opinion. Well, I think here in the Senate we should follow this advice. 
Before we perform major surgery, very high-risk surgery on the Nation's 
health care system--16 percent of our economy--we should get a second 
opinion. That is why I sent a letter to the majority leader last 
Thursday and I asked for a CMS actuary to analyze the Senate bill 
before it is voted on so we can determine if the legislation bends the 
cost curve, and I am proud to report today that already I have 24 
colleagues joining me in signing that letter. All we are doing is 
asking the majority leader: Please get a second opinion before you 
perform this high-risk surgery on our health care system.
  I will tell one last story from a townhall meeting that occurred in 
Grand Island, NE. This will be my last thought. A young man gets up and 
he says this, and I am quoting:

       What will you do to me and my generation, to me and my 
     child? Will you ransom my future for your own?

  Our best intentions might end up destroying his American dream and 
the dream of his child. This is high risk, what we are doing here. 
Let's get the best opinions we can before we act.
  Thank you, Mr. President. I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from South Dakota is 
recognized.
  Mr. THUNE. Mr. President, how much time remains on our side?
  The ACTING PRESIDENT pro tempore. There is 9 minutes 15 seconds 
remaining.
  Mr. THUNE. Mr. President, I wish to say to my colleague from 
Nebraska, former Governor and now Senator from that State, that I am 
one of the signatories on the letter he has sent requesting we get cost 
data before we move forward with this and what the impact is going to 
be, because that is the issue.
  I have listened to some of the discussion that has occurred on the 
floor this morning. The Senator from Illinois was down here earlier, 
Mr. Durbin, saying that the Republicans are attacking the House bill. 
Why are they attacking the House bill? Why aren't they talking about 
the Senate bill? Well, it is very simple. There is no Senate bill. It 
is being written behind closed doors. We have not been included in any 
of that. We have not been privy to any of the discussions that are 
occurring behind closed doors. So when we come down here and talk about 
health care reform, we are confined to talking about the House-passed 
bill because there isn't a Senate bill.
  There are two Senate versions that have passed Senate committees. The 
Finance Committee has passed a bill. The Health, Education, Labor and 
Pensions Committee has passed a bill. But the merger of those bills is 
occurring behind closed doors in direct contradiction of what was 
promised earlier about health care reform. President Obama said when we 
do health care reform, it is going to be an open, transparent process. 
The American people are going to be able to observe this. In fact, it 
is going to be done on C-SPAN. Well, nothing could be further from the 
truth, because it is all happening behind closed doors.
  So when we come out here and talk about health care reform, we are 
left with talking about a House bill because there is no Senate bill. 
We are told that this week we are going to see it, and I hope that is 
the case, because we would love to be able to react to the Senate bill 
and we would love to know what it is going to cost, and the American 
people would love to know what it is going to cost. We would also love 
to have some time to look at it before we start voting on it in the 
Senate.
  My understanding is this is going to be a compressed schedule. They 
are going to try to get a vote this week on a motion to proceed to this 
bill, and come back after Thanksgiving and try to rush this through the 
Senate before the Christmas holiday, a bill that represents one-sixth 
of the American economy. The House bill was 2,200 pages long and the 
Republicans were allowed 1 amendment, 1 amendment in the House. I think 
we are going to have to make sure, in the Senate, this gets done right. 
That will take some time.
  When the No Child Left Behind legislation was debated in the Senate, 
it took 7 weeks on the floor. We had a comprehensive energy bill a few 
years ago that took 8 weeks on the floor of the Senate. The farm bill 
that passed in the last session took 4 weeks on the floor of the 
Senate. We need to make sure this gets done in the right way for the 
American people. We don't even have a bill yet. That is why we are down 
here talking about the bills that were so far out there.
  The Senator from Illinois also said the main concern the American 
people have is cost--costs keep going up. I had a roundtable in my 
State, in Sioux Falls, last week. The Governor, Governor Rounds, 
participated, as did several small business owners, including a 
restaurant owner, a retail pharmacy, a chain drugstore manager, and a 
small business owner who manufactures wood products.
  They were all concerned about the same thing--costs. They said: How 
are we going to provide good coverage to our employees? What are we 
going to do if this massive expansion of the Federal Government--$3 
trillion, when it is fully implemented--passes and when all the costs 
are going to be passed on to business? How are we going to be able to 
continue to cover our employees? What will that mean for people in 
terms of coverage?
  I agree with the Senator from Illinois, who said cost is the issue. 
That is what I care about, and that is what the people in South Dakota 
care about. How do we get the cost for health care and health care 
coverage down?
  The ironic thing we have seen about all these bills so far is none of 
them does anything to get costs down. All of them increase costs. So 
the so-called curve we talk about--bending the cost curve down--isn't 
happening under any of these bills. We have not seen the Senate bill 
because it is still being written behind closed doors. The House-passed 
bill--the 2,200-page monstrosity that passed the House of 
Representatives earlier--and the Senate bills we have seen so far that 
have been produced by committees all have the same basic 
characteristics about them. The first one is, they raise taxes 
substantially. They raise taxes--in a contradiction of promises made by 
the President--on people making less than $200,000 and those making 
less than $100,000. In fact, because of the individual mandate in the 
House-passed bill, people making $22,800 a year and up to $68,400 a 
year will see a huge tax increase that will hit them. Small businesses, 
because of the pay-or-play mandate, which under the House bill 
supposedly raises $135 billion, are going to see their taxes go up. The 
high-income earners making $500,000 and above will see their taxes go 
up because there will be a surtax applied to the high-income earners.
  The problem with that is, this doesn't just hit high-income earners, 
it hits small businesses because of the way they are organized, as 
subchapter S corporations or LLCs, to file on their individual tax 
returns. CBO has said one-third of the tax increases targeted at the 
so-called rich will hit small businesses, which are the job creators in 
our economy, the engine of economic recovery in America. They say 
three-quarters to two-thirds of our jobs are created by small 
businesses. We are going to raise taxes on them. In fact, the highest 
marginal income tax rate, if this passes, next year, with the 
expiration of tax cuts that were enacted in 2001 and 2003, will go from 
35 percent to 46.4 percent. That is the highest marginal income tax 
rate we have seen in 25 years. It is going to hit squarely small 
businesses that we are relying on to try to get us out of this 
recession and create jobs. This health care reform is all financed with 
higher taxes, with Medicare cuts.
  I talked about the characteristics consistent with regard to all 
these proposals: You have higher taxes, and you have Medicare cuts to 
the tune of one-half trillion dollars a year, which, as

[[Page 27779]]

my colleagues already pointed out this morning, are going to hit not 
only providers but also seniors. Medicare Advantage Program seniors 
will see benefits cut. So you have the individuals impacted, the 
providers impacted, and, of course, you have most Americans impacted in 
one way or another by the tax increases.
  The final point is the most important; that is, the other 
characteristics these plans have in common, in addition to higher taxes 
and Medicare cuts, are higher health care costs and higher premiums. 
The CMS actuary came out last week with a report describing the House-
passed bill, and it says it is going to increase the cost of health 
care in this country by $289 billion. We spend 17 percent of our GDP on 
health care today. Under that bill, it would go up to 21.1 percent, if 
we did nothing. We would be better off in terms of the costs that will 
be passed on to people in the form of higher health care expenses. It 
said we are going to see increased costs and that we are going to see, 
the chief actuary concluded, 12 million people lose their employer-
sponsored coverage because small employers would be inclined to 
terminate coverage so workers would qualify for heavy subsidies through 
the exchange.
  The biggest number of people who will be covered will be those who 
are pushed into Medicaid, which, under this proposal, does expand 
significantly. The problem with that is, it passes on enormous costs to 
the States. You heard the former Governor of Nebraska and the former 
Governor of Tennessee talk about that. My Governor, Governor Rounds, in 
South Dakota, said we are going to be faced with $134 million in 
increased costs to the States to pay for this because Medicare is a 
partnership between the States and the Federal Government. So any 
benefit we get--about 60 percent of the people who will get coverage 
because of the bill will get it through Medicaid at an enormous 
additional cost to the States, which will be passed on to the taxpayers 
in the individual States.
  So you will have higher taxes on small businesses, higher taxes on 
individuals, and you will have Medicare cuts that will impact seniors 
and providers. The amazing thing about all this is you are going to 
have higher health care costs when it is all said and done. It is 
remarkable that anything could be called health care reform that raises 
costs the way these proposals would do.
  Finally, in response to what the other side has said, which is that 
Republicans don't have alternatives, that is wrong again. Republicans 
have proposed step-by-step solutions that would do this right, so it 
would drive down the costs, such as interstate competition, allowing 
people to buy insurance across State lines; small business group health 
plans, which would give businesses the advantage of group purchasing 
power, tort reform. We have a range of things we hope we have an 
opportunity to get to. We have to defeat this $3 trillion monstrosity.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Begich). The Senator from Oklahoma is 
recognized.
  Mr. INHOFE. Mr. President, during the course of the day today--and I 
feel I can do this since it is my birthday--I had five different 
subjects I wish to cover. I will make one comment about the talk just 
given--the eloquent speech just given by the Senator from South Dakota.
  I think the thing that surprises most people is, we will have 
meetings and people will say: Wait a minute, you don't even know what 
is in the Senate bill being written up behind closed doors. The 
comments we are making--most of them--refer to the bill passed in the 
House. The reason for that is, that is the only thing we have to talk 
about.
  I ask unanimous consent that I be recognized until such time as we 
move on, and I understand that is 11:20.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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