[Congressional Record (Bound Edition), Volume 155 (2009), Part 23]
[Senate]
[Pages 31763-31778]
[From the U.S. Government Publishing Office, www.gpo.gov]




             SERVICE MEMBERS HOME OWNERSHIP TAX ACT OF 2009

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of H.R. 3590, which the clerk will 
report.
  The legislative clerk read as follows:

       A bill (H.R. 3590) to amend the Internal Revenue Code of 
     1986 to modify the first-time home buyers credit in the case 
     of members of the Armed Forces and certain other Federal 
     employees, and for other purposes.

  Pending:

       Reid amendment No. 2786, in the nature of a substitute.
       Dorgan modified amendment No. 2793 (to amendment No. 2786), 
     to provide for the importation of prescription drugs.
       Crapo motion to commit the bill to the Committee on 
     Finance, with instructions.

  The ACTING PRESIDENT pro tempore. Under the previous order, there 
will be 5 hours for debate, with 2 hours equally divided between the 
Senator from Montana, Mr. Baucus, and the Senator from Idaho, Mr. 
Crapo, or their designees, 2 hours equally divided between the Senator 
from North Dakota, Mr. Dorgan, and the Senator from New Jersey, Mr. 
Lautenberg, or their designees, and 1 hour under the control of the 
Republican leader or his designee.
  Who yields time?
  The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, for the benefit of all Senators, let me 
lay out today's program.
  It has been more than 3\1/2\ weeks since the majority leader moved to 
proceed to the health care reform bill. This is the 14th day the Senate 
has considered it. The Senate has considered 18 amendments and motions. 
We have conducted 14 rollcall votes.
  Today, the Senate will continue debating the Dorgan amendment on 
prescription drug reimportation and the Lautenberg alternative 
amendment to that amendment and we will continue debating the Crapo 
motion on taxes, for which I have filed a side-by-side amendment as 
well.
  Under the previous order, there will be 5 hours of debate, with each 
of the following Senators controlling 1 hour: The Senator from Idaho, 
Mr. Crapo; the Senator from North Dakota, Mr. Dorgan; the Senator from 
New Jersey, Mr. Lautenberg; the Republican leader and this Senator.
  The Senate will recess from 12:45 to 3:15 for party conferences.
  Upon the use or yielding back of the 5 hours of debate, which is 
likely to be between 5 o'clock and 6 o'clock this evening, the Senate 
will proceed to vote in relation to four amendments in this order: 
First, my side-by-side amendment on tax cuts; second, the Crapo motion 
to commit on taxes; third, the Dorgan amendment No. 2793 on drug 
reimportation; and the Lautenberg side-by-side amendment No. 3156 on 
drug reimportation.
  Each amendment will need to get 60 votes or else be withdrawn.
  Upon disposition of these amendments and the motion, the next two 
Senators to be recognized to offer a motion and an amendment will be, 
first, the Senator from Texas, Mrs. Hutchison, to offer a motion to 
commit regarding taxes; and, second, the Senator from Vermont, Mr. 
Sanders, to offer amendment No. 2837 on single payer.


                Amendment No. 3183 to Amendment No. 2786

  Mr. President, under the previous order, it is in order for this 
Senator to offer a side-by-side amendment to the motion to commit, 
offered by the Senator from Idaho, Mr. Crapo, and pursuant to that 
order, I call up my amendment No. 3183.
  The ACTING PRESIDENT pro tempore. The clerk will report the 
amendment.
  The legislative clerk read as follows:

       The Senator from Montana [Mr. Baucus] proposes an amendment 
     numbered 3183.

  Mr. BAUCUS. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The amendment is as follows:

     (Purpose: To protect middle class families from tax increases)

       At the appropriate place, insert the following:

[[Page 31764]]



     SEC. __. PROTECTING MIDDLE CLASS FAMILIES FROM TAX INCREASES.

       It is the sense of the Senate that the Senate should reject 
     any procedural maneuver that would raise taxes on middle 
     class families, such as a motion to commit the pending 
     legislation to the Committee on Finance, which is designed to 
     kill legislation that provides tax cuts for American workers 
     and families, including the affordability tax credit and the 
     small business tax credit.

  Mr. BAUCUS. Mr. President, during the Presidential campaign, 
President Obama promised not to raise taxes on Americans who earn less 
than $200,000 a year or American families who earn less than $250,000 a 
year. That was his promise. This bill keeps his promise.
  This bill will provide tax credits to help American families, 
workers, and small businesses to buy quality health insurance plans 
through new fair and competitive marketplaces called insurance 
exchanges.
  The Congressional Budget Office expects that by the year 2019, 25 
million Americans will buy health insurance plans through the new 
exchanges. The vast majority of those Americans--about 19 million--will 
receive tax credits; that is, tax reductions, or help paying their 
copays and other out-of-pocket costs. These tax credits will reduce 
their health insurance costs by nearly 60 percent.
  This bill does not raise taxes on the middle class. This bill is a 
tax cut for Americans.
  Over the next 10 years, the health care reform bill will provide $441 
billion in tax credits to buy health insurance for American families, 
workers, and small businesses--$441 billion in tax credits. Americans 
affected by the major tax provisions of this bill will receive an 
overall tax cut of 1.3 percent in the year 2017. That is a total of $40 
billion. That is an average of almost $450 for every taxpayer affected. 
That same year, 2017, low- and middle-income taxpayers who earn between 
$20,000 and $30,000 a year will see an average Federal tax decrease of 
nearly 37 percent. I will repeat that. I think it is astounding. People 
with incomes between $20,000 and $30,000 a year will receive an average 
Federal tax decrease of nearly 37 percent. In that same year, 2017, the 
average taxpayer making less than $75,000 a year will receive a tax 
credit of more than $1,300. In 2019, 2 years later, that tax credit 
will grow to more than $1,500.
  Without this tax cut, many individuals and families will continue to 
forgo health care because it costs too much. We make it easier for 
people to buy health care with those tax cuts.
  In addition to a tax cut, this bill also represents increased wages 
in the pockets of millions of Americans. Even my colleague from Idaho 
agrees that as a result of this bill, Americans will see increased 
wages. He said that exact thing on the floor last week. As a result of 
this bill, many Americans will see increased wages.
  Senator Crapo gave the example of an employee, the value of whose 
health insurance decreased but whose overall compensation did not 
decrease. As a result, the employee would receive additional wages.
  Why are workers going to complain that they are paying more in wages 
because they have more money in their pocket? If incomes are going up, 
their wages are going up. Clearly, their taxes are going to go up 
correspondingly, but obviously the taxes are not going to go up by as 
much as the wages.
  I have a letter from the Congressional Budget Office, dated November 
18, that states just that. On page 18, the Congressional Budget Office 
says:

       If employers increase or decrease the amount of 
     compensation they provide in the form of health insurance 
     (relative to current law projection), the Congressional 
     Budget Office and the Joint Committee on Taxation assume that 
     offsetting changes will occur in wages and other forms of 
     compensation--which are generally taxable--to hold total 
     compensation roughly the same.

  I have a chart behind me that shows that very point for each of the 
years this bill is in effect. Looking, first, over to the left--the 
chart shows from 2013 up to 2019, but on the far left, the green is the 
percent of total tax revenue due to increased wages. That is wages 
increasing. The white is the percent of total tax revenue due to excise 
taxes, the increased taxes the person will have to pay. Wages far 
outstrip the taxes. The increase in wages is far greater, according to 
the Congressional Budget Office and the Joint Committee on Taxation.
  Just to repeat, as that chart illustrates, the overwhelming majority 
of revenue raised from the high-cost insurance excise tax will come 
from increased wages. Only 17.5 percent of the revenue will be 
attributable to the excise tax. The rest, more than 82 percent, will 
come from employees getting more than their compensation wages and less 
in inefficient health coverage.
  I urge my colleagues to recognize the Crapo motion to commit for what 
it is--and what is that? It is an attempt to kill health care reform. 
That is all it is all about, nothing more, nothing less. Senator 
Grassley said as much last week. Senator Grassley asked us to vote in 
favor of the motion to commit ``to stop this process right now.'' That 
is a direct quote.
  We must not stop this process. We must not stop moving forward in our 
efforts to reform health care. Indeed, we must move forward 
aggressively. Every day we delay, 14,000 Americans lose their health 
insurance. Every day we delay, 14,000 Americans lose their health 
insurance. In just a 2-week period, one in three Americans will go 
without health care coverage at some point. We cannot afford to stop 
working toward reform. We must reject any attempt to eliminate the very 
provisions from this bill that provide Americans with a tax cut in an 
attempt to stop health care reform. Despite Republican claims that they 
are trying to protect Americans from tax increases in this bill, the 
facts are this bill is a tax cut for most Americans.
  On a related matter, there has been some discussion about the Office 
of the Actuary analysis of the Senate bill. Let me cover two very key 
points from that letter.
  The Actuary at HHS concludes that this legislation extends the life 
of the Medicare trust fund by 9 years--9 years. We know the Medicare 
trust fund is in a precarious position until, roughly, 2017. There are 
some estimates that this underlying bill would increase the solvency of 
the trust fund for 4 to 5 more years, say to 2022, roughly. The 
Actuary, the person who number crunches over at HHS, concluded this 
legislation will extend the life of the Medicare trust fund by 9 years. 
That is no small matter. Seniors, near seniors, are very concerned 
about the solvency of the health care trust fund. This legislation 
extends the solvency of the health care trust fund by 9 years.
  So just think, if this legislation is not passed, the solvency of the 
health care trust fund will not be extended by 9 years. The Actuary 
says, the Medicare trustees say it will probably start to become 
insolvent, the Medicare trust fund, the Medicare trust fund will become 
insolvent in just a few years--2017. Clearly, it is very important to 
extend the solvency of the Medicare trust fund. How does this 
legislation extend the solvency of the trust fund? It is very simple. 
We cut out a lot of the waste. We cut out a lot of the inefficiency. We 
make the system work better so the fund is extended for 9 more years.
  In addition, the Actuary says this legislation, by the year 2019, 
will result in about a $300-per-couple reduction in Part B premiums. In 
addition to that, the Actuary concludes the legislation will result in 
about a $400-per-couple deduction in cost sharing. If you add the two 
together, that is about $700. So by the year 2019, as a result of this 
legislation, according to the Actuary--it is in black and white there--
it says right there, in print, there will be about a $700 reduction in 
premium Part B and out-of-pocket costs for seniors. That is no small 
matter. It is a reduction.
  On the other side of the floor, we sometimes hear all this rhetoric 
about increases. It is just that--it is rhetoric. The actual analysis 
shows a reduction.
  I also hear rhetoric on the other side about this legislation 
resulting in increased premiums for people. Not true. The Congressional 
Budget Office has concluded that for 93 percent of Americans, there 
will be a reduction in premiums--a reduction in premiums. To be fair, 
for those who are already employed, the reduction is not huge, but

[[Page 31765]]

it is a reduction, nevertheless. It is about a 3-percent reduction in 
premiums. That is a reduction. We have to keep working to make it an 
even greater reduction. I daresay--in fact, I know as sure as I am 
standing here--the reduction will be greater. Why will it be greater? 
Because a lot of the provisions in this legislation--in my view, the 
Congressional Budget Office hasn't fully analyzed provisions such as 
delivery system reforms. We start to bundle competent care 
organizations. We start pilot projects. The result of that will be a 
reduction in costs and therefore a reduction in premiums.
  Also not calculated is the Commission which will look at 
productivity. That is not included in the CBO analysis. If that were 
included in the CBO analysis, the reduction would be even greater. We 
are talking about the remaining 7 percent--remember, I said 93 percent 
would get a reduction in premiums according to CBO. The remaining 7 
percent don't get a reduction, but what do they get in return? They get 
much better insurance because we have insurance market reform in this 
legislation. No more preexisting conditions. No more rescissions. No 
more denial based on health status. No more company limitations on 
annual losses. No more limitations on lifetime losses. So for the same 
premium, they are going to get a lot better quality. Instead of buying 
a used car, they are going to get a new car for roughly the same price.
  So the analysis of this legislation is very clear: Reduction of 
premiums, CBO says so; extension of solvency of the trust fund, CBO and 
the Actuary say so; a reduction in premiums and out-of-pocket costs for 
a couple by $700 by the year 2019. That is what the Actuary says.
  So this legislation lives up to the promise we made earlier. It does 
not raise taxes for people making under $200,000. I think the 
legislation should clearly be passed.
  Let me say this too. Someone once said--and I will conclude here--
that the status quo is really not the status quo. If this legislation 
is not passed, the result is not the status quo; the result is we move 
backward. We have two choices. Either we move forward as a country and 
seize this opportunity to tackle health care reform and do our very 
best to get it right or we don't; we do nothing, and we keep sliding 
backward. Think of the repercussions of not passing this legislation. 
Think of it. First of all, tens of millions of people will not have 
health insurance. That, in itself, is pretty profound. Second, we will 
not have health insurance market reform. We will still have denial 
based on preexisting conditions, which is basically what the other side 
is arguing for.
  We would not cut down health care costs, which our businesses need so 
much, and families need so much, and our budgets need so much. 
Remember, I mentioned the legislation extends the solvency of the 
Medicare trust fund.
  That is emblematic of some of the savings that we have in other 
government programs, too, because health care costs are rising so much. 
Medicare is in tough shape, and so is Medicaid because health care 
costs are rising so much. The CBO and the Actuary say we are 
controlling health care costs.
  The PRESIDING OFFICER (Mr. Begich). The Senator from Idaho is 
recognized.
  Mr. CRAPO. Mr. President, I ask unanimous consent to speak for up to 
40 minutes and to use that time in a colloquy with other colleagues.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CRAPO. I also ask to be notified when there are 5 minutes 
remaining.
  The PRESIDING OFFICER. The Chair will do so.
  Mr. CRAPO. Mr. President, I am going to engage in a colloquy about 
the pending motion on which we will vote later this afternoon or early 
this evening. It is a motion to commit the bill to the Finance 
Committee and have the Finance Committee make the bill comply with the 
President's pledge. Here is the pledge:

       I can make a firm pledge . . . no family making less than 
     $250,000 will see their taxes increase . . . not your income 
     tax, not your payroll tax, not your capital gains tax, not 
     any of your taxes.
       . . . you will not see any of your taxes increase one 
     single dime.

  I heard my colleague from Montana say the bill complies with this 
pledge. If that were true, then there would be no harm in having the 
Finance Committee scour through it and make sure it does and refer the 
bill back to make sure it doesn't tax the middle class.
  The reality is, it is very clear this legislation violates this 
pledge of the President. As a matter of fact, there are over $493 
billion of new taxes in this bill meant to offset the $2.5 trillion 
during the first full 10 years of implementation of spending in the 
bill.
  If you will look at the next chart, at the graph on taxes, the first 
10 years--this includes the fees also imposed that CBO and Joint Tax 
said will be passed right on through to the consumer. There are $704 
billion of taxes and fees in the first 10 years of the bill. If you 
look at the 10 years of full implementation, meaning when the spending 
actually starts, the taxes and fees are actually $1.28 trillion.
  My colleague says this is a net tax cut bill, and it complies with 
the President's pledge because when you take all of the refundable tax 
credits in the bill and offset against the tax increases, there is a 
net reduction in tax. In the first place, that is not true when you 
take into account the fees. I don't think that is what the President 
was talking about. He didn't mean, did he, that you will not see your 
taxes go up more than someone else's taxes go down? No, he told people 
in America they would not see their taxes go up.
  Yet what this bill does, according to the Joint Tax analysis, is, by 
2019, at least 73 million American households earning below $200,000 
will face a tax increase.
  If that is not violating the President's pledge, I don't know what 
is--even if you take the numbers that the majority is trying to use and 
claim that those are tax cuts.
  Here is the next chart. What my colleague from Montana is talking 
about is about $400 billion of what are called refundable tax credits. 
He wants to offset these tax credits in the bill against the hundreds 
of billions of dollars of tax increases, and then say there is a net 
tax cut and, therefore, no problem.
  First of all, that is a problem. Secondly, what is a refundable tax 
credit? The $288 billion, or 73 percent of the so-called tax credit--or 
tax cuts that my colleague from Montana is talking about--are payments 
by the Federal Government to individuals or families who do not have 
tax liability. It is a direct government subsidy. The CBO scores these 
payments as a Federal outlay, as spending, not as tax relief, and that 
is exactly what it is. I think it is a little bit less than credible to 
say that we have a tax cut bill when three-fourths of the so-called tax 
cuts don't even go to reduce tax liability for taxpayers.
  Mr. ENSIGN. Will my colleague yield?
  Mr. CRAPO. Yes.
  Mr. ENSIGN. Would the CBO--which is nonpartisan--score a welfare 
payment the same as these so-called tax credits?
  Mr. CRAPO. Yes, that is right. A payment of a subsidy to an 
individual in the United States would be scored as a Federal outlay, or 
spending, as is a refundable tax credit paid to an individual who has 
no tax liability.
  Let's assume we even accept the argument that is a tax cut. Even if 
you offset all of that, remember the chart a minute ago that said 73 
million people would pay taxes. Even if you give them credit for that 
argument, there are still going to be 42 million people making less 
than $200,000 a year who will face a net tax increase. That is a 
violation of the President's pledge.
  All this motion does is send the bill back to the Finance Committee, 
which writes tax policy, to correct that. The motion helps this bill 
comply with the President's pledge.
  The Senator from Montana also used another example, trying to say 
some of these people who are paying more taxes are getting higher 
wages. This is the game that is going on. The employer of these people 
the Senator was talking about today provides a salary and

[[Page 31766]]

health care to that employee. In this example, it is $50,000 of wages 
and $10,000 of health care benefits. This bill will now impose a hefty 
40- or 45-percent tax on this health care plan because it is too good 
of a health care plan.
  What CBO and Joint Tax tell us is that because of that immense tax--
40- to 45-percent tax--the employer is just going to cut the health 
care plan down to where it is not taxed anymore and provide those 
dollars with an increased wage. So this young lady will get maybe 
$53,000 in wages instead of $50,000 and only $7,000 of health 
insurance, and her net employment compensation will still be the same, 
$60,000--except she will pay taxes on an extra $3,000. So her net 
employment package will go down not up, and 73 million Americans like 
her will end up with a smaller employment package, less health care 
benefits, and increased Federal tax liability. That is the way the bill 
works.
  For issue after issue, there are taxes after taxes in this bill that 
will be paid by the people in this country who earn less than those on 
the threshold the President identified. That is why we simply ask that 
the bill be sent to the Finance Committee to have this violation of the 
President's pledge, this bad policy of increasing taxes on the middle 
class in America to pay for a huge new government entitlement program, 
be removed from the bill.
  Mr. BARRASSO. Mr. President, I ask my colleague this: I was reading a 
national publication yesterday, and the headline is ``Making Nightmare 
Out Of Health Care.'' It says taxes will go up. This also says the 
proposed overhaul contains, at last count, 13 different tax hikes. It 
goes on to say the Joint Tax Committee said that for any one person who 
may end up paying lower taxes, there will be nearly four times as 
many--close to 70 million people--who will pay higher taxes.
  That is why I have been waiting for a week now to vote for the Crapo 
motion. This was introduced last Tuesday. A whole week has passed, and 
the Democrats have been filibustering and preventing us from voting on 
this very important amendment, which the American people agree with--
that we ought to eliminate these taxes and stick with what the 
President promised the American people.
  As a result of the President's promises, I read a recent CNN poll. It 
says that 61 percent of Americans oppose this bill the Democrats are 
proposing. It gets to the specific question of tax increases and the 
President's promise. It says:

       Do you think your taxes would or would not increase if this 
     bill passes?

  And 85 percent of the Americans polled said they believe their taxes 
will go up.
  I ask my friend from Idaho--it seems to me the American people get 
it; they realize they are going to be hit hard with this $500 billion 
of tax increases, 13 different taxes, which will get put on the backs 
of the hard-working people of our country.
  Why is it that we are not allowed to vote on this motion? I will vote 
for it. I appreciate the Senator from Idaho bringing this motion 
forward because, clearly, the support of the American people is behind 
him.
  Mr. CRAPO. I thank my colleague. I will give some statistics on the 
point. The Joint Tax Committee analyzed just the four biggest tax 
provisions--not all of them--and they concluded that only 7 percent of 
Americans would be receiving these so-called tax cuts, which are really 
spending subsidies but have been characterized as a tax cut in order to 
argue that the bill doesn't increase taxes. Only 7 percent of Americans 
will receive those, which represents about 19 million people, but 157 
million people--almost 8 times that amount--who get health insurance 
through their employer will not be eligible for these credits. They 
will pay, on average, somewhere between $593 to $670 a year, depending 
on their income categories, in new taxes that are put on their 
shoulders in this bill.
  I notice that my colleague from Tennessee wants to say something.
  Mr. ALEXANDER. Mr. President, I congratulate the Senator from Idaho 
for his amendment to help the President keep his commitment. That is 
basically what it is. I would think our friends on the other side would 
all want to join us in that. The President said he would not raise 
taxes on people making less than $250,000 a year.
  It is amazing to hear the comments that I have just heard. The whole 
construction of the bill--when we think about it, regardless of 
whatever the Democrats decide to do about the so-called public option, 
they still seem determined--at least the majority leadership seems 
determined--to engage in this political kamikaze mission toward a 
historic mistake. There is all this talk about history. But there are 
lots of different kinds of history.
  A lot of historic mistakes have been made about taxes. For example, 
there was the Smoot-Hawley tariff of 1930, which was a big tax. It 
sounded like a good idea. President Hoover, a Republican, recommended 
it to protect American jobs by keeping out cheaper foreign products. 
That led us into the Great Depression. It was a historic mistake. More 
recently, there was the boat luxury tax. This sounds good. It was part 
of the budget deal of 1990. Congress put a 10-percent luxury tax on 
boats costing more than $100,000. Sound familiar? We were going to hit 
the rich people. But it got the working people, not the rich people. 
The unintended consequence was that it sank the boat industry, costing 
7,600 jobs, according to the Joint Economic Commission, and Congress 
repealed that historic mistake. There was also the Medicare 
Catastrophic Coverage Act of 1988, another good-sounding goal, to help 
older people reduce the risk for illness-related catastrophic financial 
losses. But a lot of our senior Americans resented the idea of paying 
additional taxes for that coverage, and they revolted. Congress, less 
than a year and a half later, repealed it.
  We all remember the millionaires tax. That is a matter of history. In 
the late 1960s, there were 155 high-income Americans who weren't paying 
any Federal income taxes, so Congress imposed something called the 
alternative minimum tax. Last year, that affected 28 million American 
taxpayers.
  I say to my friend from Idaho, I think he is doing the country and 
the President a great service by offering this amendment to help keep 
the promise because whatever the majority leader decides to do about 
the government option, this legislation--when fully implemented--still 
contains $1 million in Medicare cuts 5 years before Medicare is 
scheduled to go broke, according to their trustees.
  It is nearly $1 trillion in new taxes over 10 years when fully 
implemented, as the Senator from Idaho has pointed out. There is no 
question about that, it is an increase in premiums for most Americans, 
according to the Congressional Budget Office. And yesterday on this 
floor, we talked about the huge bill we are about to send to States to 
help pay for this in the Medicaid Program.
  It is important to support the Crapo motion. It is important for our 
country not to have this historic mistake thrust upon them.
  Mr. ENSIGN. I would like to jump in here and ask the Senator from 
Idaho a question. From what I understand, the taxes go into effect--
actually, this is from yesterday, so I think it would be in 17 days 
from now based on the current bill before us. All of these taxes the 
Senator from Idaho has on his chart are all the taxes the President 
said he would not violate. The article yesterday said 13 taxes. We know 
of at least nine absolute taxes that would go into effect. But the tax 
subsidies, these payments to folks who do not have a tax liability, 
those are not received for 1,479 days; isn't that correct?
  Mr. CRAPO. The Senator from Nevada is correct. The fact is, the taxes 
start on day one of the bill. The spending, which is what these alleged 
tax cuts are that my colleague from the other side was talking about, 
does not start until the fourth year or 2014. And that is just one of 
the gimmicks in the bill in order to claim it does not drive up the 
budget--have 10 years of tax increases and only 6 years of spending to 
offset against it. I think that is how they started the spending days. 
They figured out how long they had to delay

[[Page 31767]]

it so they could claim it would not drive up the deficit.
  Mr. ENSIGN. I want to address one of these taxes, the so-called 
Cadillac tax that the Democrats have put into this bill. The problem 
is, they did not index it for inflation. As time goes forward, with the 
red line as the threshold, the Democrats indexed it for what is called 
the consumer price index plus 1 percent. That goes up a little bit. The 
problem is, medical inflation is going up much faster. What happens 
is--the blue line is the average plan in the United States--that is how 
fast it is going up. We can see that is much higher. At this point, it 
starts catching most of the plans in the United States.
  This 40-percent tax the unions are running ads against right now is 
going to start getting almost all Americans' plans in the future. That 
is the reason a lot of people do not realize this is a tax. It may not 
get them today, but it is going to get them eventually. What is going 
to happen is this tax will be passed on to them in lower benefits.
  Mr. CRAPO. The Senator from Nevada is correct.
  Before I toss the floor to the Senator from Texas who wants to make 
some comments, I point out that the point the Senator from Nevada made 
is statistically made by Joint Tax:

       By 2019, at least 73 million American households--

  That is not 73 million Americans, that is 73 million American 
households--

     earning below $200,000 are going to face these tax increases.

  Mrs. HUTCHISON. If I may respond to the Senator from Idaho. I was 
thinking, when the Senator from Tennessee was talking, about the luxury 
taxes and how everyone thought that felt so good to have a tax against 
luxury boats. And who suffered? The workers. Then there was the 
catastrophic Medicare coverage which resulted in a tax on seniors who 
had that coverage. Seniors erupted, and that was repealed. Then that is 
followed on by what the Senator from Nevada talks about--the Cadillac 
plan, which is the high-end plan of coverage.
  I thought, maybe Congress has learned something. Maybe the Democrats 
are on to something. They have listened to the history of all of these 
good-sounding taxes on rich people or people who buy expensive things. 
As the Senator from Nevada has pointed out, they have now learned they 
probably ought to go ahead and tax both ends instead of just the high 
end because in this bill, you have a tax on the high-end plans. You 
have a tax on employers who provide too much coverage. Oh, but we also 
tax the people who do not have any coverage. If it is too small, you 
get taxed, and if it is too big, you get taxed. It seems that maybe the 
Democrats learned the wrong lesson. It is not that you tax just the 
rich or the people who buy expensive things, it is that you tax both 
ends to make sure you get every little drop of taxpayer dollars.
  I think we have shown on this floor from the endless hours of debate 
that everyone in America is going to be taxed because the taxes that 
take effect in 3 weeks' time under this bill, January of 2010--the 
major tax increase takes place, and that is the tax increase on 
prescription drugs; on insurance companies that are going to have to 
raise their premiums; the drug costs are going to go up; and medical 
equipment, which is essential for seniors, especially for everyone who 
needs some form of equipment, the equipment manufacturers are going to 
have a tax. Mr. President, $100 billion in new taxes starts next 
January, 3 weeks from now. Every person in America is going to pay 
taxes in the form of higher prices starting in 3 weeks.
  The Senator from South Dakota and I are sponsoring legislation 
because the next question will be: Oh, my goodness, if we are going to 
be taxed in 3 weeks, surely we are going to have some sort of benefit 
offered in 3 weeks, some sort of low-cost health plan or option. Three 
weeks, surely. Oh, no, we are not going to have any of the plan that 
would offer options to people--not in 2010, not in 2011, no, not in 
2012, not in 2013, but 2014.
  So all these higher prices are going to start kicking in in January, 
and then we are going to have the Cadillac plan that the Senator from 
Nevada mentioned in 2013, all being paid before one supposed benefit 
would be available. If this is not a bait-and-switch, I have never seen 
one.
  The Senator from South Dakota and I are going to offer the next 
amendment after the ones that are in the tranche right now to very 
simply say: Whatever the bill is in the end, there will be no taxes 
until there is a plan. Not one dime of taxes could take effect until 
there is actually some sort of plan available that would, hopefully, 
give some sort of benefit to people, which is what is being promised.
  I ask the Senator from South Dakota if that is his understanding, 
that we would at least draw a line. Whereas Senator Crapo's motion, 
which I support and I know everyone on the floor talking this morning 
supports, is to say there will be no taxes to anyone who makes under 
$200,000. But even if there are taxes in the end, they will not take 
effect until there is some sort of plan available for people that is 
going to help Americans who do not have coverage and for whom we are 
not able to lower the cost, which is what the Republicans are trying to 
do. At least we would set that deadline.
  I ask the Senator from South Dakota what he has been hearing about 
this bill.
  Mr. THUNE. My colleague from Texas is exactly right. Her motion and 
the motion I am cosponsoring, which we hope to vote on next, will be a 
follow-on motion to the motion the Senator from Idaho is offering.
  It seems a basic principle and a matter of fairness to the American 
people that if you are going to create public policy, that you do it in 
a way that treats people fairly and does not raise their taxes before a 
single dollar of the premium tax credits and the exchanges that are 
designed to create the new insurance product for people would take 
effect. That is what this bill does.
  The motion of the Senator from Idaho commits all of the tax 
increases--and I will support that wholeheartedly, and I hope my 
colleagues in the Senate will do the same because these tax increases 
are the absolute worst thing we can do at a time when we have an 
economy in recession and we are asking small businesses to lead us out 
of the recession. Seventy percent of jobs in the country are created by 
small businesses. It is much higher in my State of South Dakota. These 
tax increases could not be more poorly timed in terms of getting the 
economy restarted and creating jobs for Americans and getting them back 
to work. Since most people get their insurance--at least currently--
through their employer, one of the best things you can do to provide 
insurance is to put people back to work. This bill has the opposite 
effect. It is a job killer because of all of the tax increases. Every 
small business organization has said that. That is why it is so 
important we support the motion of the Senator from Idaho.
  Senator Hutchison and I will also offer a motion--hopefully, we will 
get a vote on it later--that at least will delay the tax increases 
until such time as the benefits begin. It essentially aligns the 
revenue increases and the benefits so they are synchronized and you do 
not have this period of 10 years where you are taxing people for 10 but 
only delivering a benefit for 6. Again, I think that violates a basic 
principle of fairness most Americans should expect when it comes to 
their elected leaders making public policy which will have a profound 
impact on them and their lives. I certainly hope we get a vote on that 
motion, and I hope our colleagues will support it. To me, it is 
unconscionable that you would raise taxes by $72 billion, which is what 
this does, up until the year 2014 before the premium subsidies and the 
exchanges kick in which would deliver the benefits that are supposed to 
be delivered under this bill. The Senator from Texas and I look forward 
to getting a vote on that motion.
  I hope we can win on the Crapo motion later today.
  I appreciate my colleagues being here to point out how important it 
is that we have public policy that is fair and also that we not do 
things that are

[[Page 31768]]

counter to job creation at a time when we are asking small businesses 
to get out there and create jobs and make investments.
  Mr. BARRASSO. The Senator from Idaho had a picture of a woman making 
$50,000 and the health benefits that resulted. My concern is not just 
her taxes; my concern is also her job. It is also a fact that she would 
still have a job.
  What I hear from the people of Wyoming is: Don't raise my taxes, 
don't cut my Medicare, don't make matters worse than they are right now 
in this economy where we have 10-percent unemployment.
  Like the Senator from South Dakota, I am a member of the National 
Federation of Independent Business. I have been a member for years. 
They are telling us that as these taxes are raised and collected in 
2010, 2011, 2012, 2013, in 2010 we are going to lose 400,000 jobs in 
America, and in 2011 another 400,000, and another 400,000 after that, 
and another 400,000, as the taxes continue to be collected. So we would 
be losing in this country 1.6 million jobs as a result of these 
increased taxes all Americans are going to have to pay.
  I ask the Senator from Idaho, isn't it even more critical that we 
pass his motion in addition to the fact that we do not want these 
taxes? They are going to hurt our economy across the board.
  Mr. CRAPO. The Senator from Wyoming is exactly right. It is the wrong 
thing to do when our economy needs to be strengthened and restarted, if 
you will, to apply a huge amount of new taxes.
  Let's take the example we talked about earlier. This young lady, 
under the bill in the Senate right now, will not only see her health 
benefits go down, but the net value of her compensation package will go 
down. She will get a little extra wages in order to offset the 
reduction of her health care benefits, but those will be taxed and her 
net compensation package will go down.
  The point here is this--and it is a little bit ironic that today the 
Democratic caucus is going to be meeting with the President at the 
White House in yet one more closed-door meeting where they are going to 
be trying to redraft the bill in order to get around some of the 
problems, which I hope they will let the American people see to debate 
before they try to vote on it again.
  It is ironic, as Democrats come out of that caucus, if they do not 
support this motion, they will be violating two of the President's 
pledges. One, after meeting with him, they will be violating his pledge 
not to tax Americans who make less than $200,000--$250,000 for a 
family--as well as his pledge: If you like it, you can keep it.
  This young lady, if she likes her package, cannot keep it. She will 
not have that option. Her $10,000 health care package will be reduced 
at least $2,000 to the minimum new government-designed acceptable 
policy and probably a little more than that. She will see a 20- to 30-
percent reduction in her health care package against her will. I would 
be willing to bet she would prefer to keep the one she has now. Most 
Americans like the insurance they are getting through their employers.
  Mr. ENSIGN. I would like to ask the Senator from Idaho a question. 
These are the nine taxes we know for sure that are being raised: 40 
percent Cadillac plan, a separate insurance tax, an employer tax, a 
drug tax, a lab tax, a medical device tax, a failure to buy insurance 
tax, the cosmetic surgery tax, and the increased employee Medicare tax.
  In our States, people think we will pass a sales tax, and the 
business will just pay the sales tax. I ask the Senator from Idaho, who 
actually pays the sales tax? Who have the Congressional Budget Office 
and the Joint Committee on Taxation, which are both nonpartisan, said 
are going to pay these taxes?
  Mr. CRAPO. The Senator was there when the Joint Tax and CBO experts 
were asked this question. They squarely and directly said these taxes 
and fees will be passed on, virtually 100 percent, to consumers, which 
means two things. First, the ones that are taxes will just be taxes 
passed on to the consumer, as shown in the example of the young lady we 
looked at. The ones that are fees will simply be passed on in the form 
of higher costs for medical services or higher premiums, which is one 
of the reasons why, contrary to the assertions by the other side, this 
bill will drive up the cost of health care and will drive up the cost 
of premiums, not down.
  Mr. ENSIGN. The last thing I would like to point out goes along with 
the Senator's chart. This is what the Joint Committee on Taxation has 
said: 84 percent of all the taxes being paid in this bill are being 
paid by those making less than $200,000 a year. If this is not a direct 
violation of the President's promise not to raise one dime of their 
taxes, I don't know what is. I don't understand how the President can 
sign this bill and keep to the promise he made during the campaign.
  Mr. CRAPO. I agree with the Senator from Nevada. It is disturbing to 
see the responses. First, the response that this bill actually doesn't 
increase taxes; it cuts taxes. That flies right in the face of the 
reports and analysis by Joint Tax and CBO. I encourage everybody to 
read this bill. It is available on my Web site and on the Republican 
Web site and on the C-SPAN Web site. In addition, we will put up a 
reference to where you can find the bill to read it if you want to 
parse through it to determine who is telling the truth. The bottom line 
is, this bill increases taxes in the first 10 years by $493 billion. 
When you add fees to that, it is more like $700 billion. If you counted 
the first full 10 years of implementation, it is over $1 trillion of 
new taxes. The only response to that is to try to say that the 
subsidies for health insurance for those who are not able to purchase 
their own insurance are tax cuts, even though three-fourths of them go 
to those who are not, at this point, at a level where they are 
incurring a tax liability.
  Mr. THUNE. My understanding is, those premium tax credits actually go 
to the taxpayer. When you say this is a tax cut for people, does it end 
up in the pockets of the average taxpayer?
  Mr. CRAPO. The Senator from South Dakota is correct. In fact, this 
subsidy is not paid to the individual. It is paid directly to the 
insurance company. Of the one-quarter of people receiving this subsidy 
who do actually pay income taxes, their income taxes will, in fact, 
stay the same. They are not actually getting a tax cut. What they are 
getting is a subsidy for the purchase of insurance that is managed 
through the Tax Code but is paid directly to the insurance company.
  Mr. THUNE. That is precisely why the arguments made by the other side 
that somehow this is a tax cut sort of defy what I think most Americans 
have come to expect when they get a tax cut; that is, that they get to 
keep more of what they earn. What we are talking about is a payment 
that will be made to an insurance company, a tax credit for premium 
subsidies that will go to an insurance company. There will be very few 
Americans, as a percentage of the total population, who will actually 
derive any sort of benefit. My understanding is, about 10 percent of 
all Americans will get some benefit from the premium subsidies that 
will go to the insurance company, not directly to the taxpayer; is that 
correct?
  Mr. CRAPO. It is actually 7 percent.
  Mr. THUNE. So we have a very small number of Americans who will 
derive a benefit. But you have a whole lot of Americans who will 
actually be paying the freight. The Senator mentioned earlier--I saw 
his chart--that 73 million Americans are going to end up with higher 
taxes as a result. Many of the premium tax credits, if you could give 
credit to the taxpayers receiving this, which you can't because it goes 
to the insurance company, but if you could, three-quarters of that will 
go to people who currently have no income tax liability. It seems as if 
the advertising on this is very inconsistent with reality and the 
facts. The fact is, most Americans will see taxes and premiums go up. 
Very few Americans are going to get some premium tax credit to help 
subsidize their premium cost, and that will go directly to the 
insurance company. I understand the Senator from

[[Page 31769]]

Idaho and the Senator from Nevada are both members of the Finance 
Committee. They have been involved with this from the beginning. That 
is my understanding of this, which is hard to fathom how that 
constitutes a tax cut.
  The PRESIDING OFFICER (Mr. Bennet). The Senator from Idaho has 
consumed 35 minutes.
  Mr. ALEXANDER. I agree with the Senator from South Dakota. People who 
might be watching this must be thinking: Wait a minute. Let me ask the 
two members of the Finance Committee: What the Democrats are trying to 
say is, a Medicare cut is not a Medicare cut and that a tax increase is 
not a tax increase and that a premium increase is not a premium 
increase. Isn't it true that when the bill is fully implemented, there 
will be nearly $1 trillion in Medicare cuts, and isn't it true that 
there will be nearly about $1 trillion, when fully implemented, in new 
taxes? Isn't it true the Congressional Budget Office has said that will 
all be passed on to people? Isn't it true that all the taxes start in 
January, if the bill passes? Isn't it also true the Congressional 
Budget Office has said premiums are going to continue to go up and, for 
people in the individual market, they will go up even more? Isn't that 
all true?
  Mr. CRAPO. I will respond first. The Senator from Tennessee is 
exactly right. Again, on this chart, these are the tax increases for 
the first 10 years of the bill, and this chart includes the fees and 
penalties that are charged as well. The total there is $704 billion. If 
you start when the bill becomes implemented or is started to be 
implemented, in 2014, to compare taxes to spending, the actual taxes 
and fees that will be collected are almost $1.3 trillion.
  Mr. ENSIGN. There is no question. I can answer the Senator's 
question: True, true, true, and true. The old saying, if it walks like 
a duck and it quacks like a duck, it is a duck. These taxes sometimes 
are called fees. The Supreme Court has ruled that a fee that acts like 
a tax is, in fact, a tax. Most of the provisions we talked about 
before, we call them a tax, and that is what they are. These nine new 
taxes are a tax. You are exactly right. The Joint Committee on Taxation 
and the CBO have said these are going to be passed on to the consumer. 
What they have also said--and I thought this was significant--is that 
84 percent of all these taxes are going to be passed on to people who 
make less than $200,000 a year. That is what we have been saying. The 
other side says: We are just going to tax the rich. When 84 percent of 
that tax burden is paid by people making less than $200,000 a year and 
the vast majority is also paid by people making less than $100,000, the 
vast majority is being paid by people who make less than $100,000 a 
year, the same as sales taxes. The sales tax has been called a 
regressive tax. These are regressive taxes the Democrats are passing on 
to the American people.
  Mr. CRAPO. I thank my colleagues for coming over and speaking today 
and discussing this issue with me. I would like to conclude by pointing 
out, once again, the President said he could make a firm pledge, no 
family making less than $250,000 will see their taxes increase, not 
your income taxes, not your payroll taxes, not your capital gains 
taxes, not any of your taxes. You will not see any of your taxes 
increase one single dime. But there are hundreds of billions of dollars 
in tax increases in this bill that are going to fall squarely to the 
backs of the middle class.
  Our motion simply says: Let's fix that and take it out. The bottom 
line is, those who are saying that is not the case are trying in the 
first case to say there are subsidies in the bill that almost equal the 
amount of these taxes and, therefore, it is a net tax cut. First, 
subsidies are not tax cuts. Three-quarters of them go to individuals 
who have no tax liability. The other one-quarter does not reduce the 
tax liability of the individuals who are getting the insurance subsidy. 
Even if you accept all of that argument, the President was not saying 
you will not see net taxes go up in America. The President was not 
saying: We will not cut or not increase your taxes by more than we will 
cut someone else's taxes. I don't think anybody expected that was what 
he was saying. The President was saying he would not raise taxes in 
this bill. This bill violates that pledge.
  Therefore, Members should support the motion to send this bill back 
to the Finance Committee to fix that glaring problem.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. I suggest the absence of a quorum and ask unanimous consent 
that the time be divided equally.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DURBIN. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Illinois.
  Mr. DURBIN. Mr. President, I ask unanimous consent to speak on the 
time allotted to the chairman of the Finance Committee relative to his 
amendment.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. DURBIN. Mr. President, there has been a lot of talk about taxes 
and health care. What we are discussing is this bill. It is a large 
bill, over 2,000 pages, but we needed all these pages because we are 
tackling one of the biggest problems facing America. How can we take a 
health care system that consumes $1 out of every $6 or $7 in our 
economy and change it for the better, keeping what is good but changing 
those things that are not so good? One of the things that concerns most 
of us is the cost of health insurance premiums. Ten years ago, an 
average family of four paid $6,000 a year for health insurance. Now 
that is up to $12,000. If we are not careful, in 8 years it is 
projected to double again to $24,000 a year for health care premiums. 
Think about that, trying to earn $2,000 a month in 8 years just to pay 
for your health insurance, nothing else. That is beyond the reach of 
individuals and beyond the reach of a lot of businesses. Even today, 
businesses are dropping people from coverage.
  We now have some 50 million Americans without health insurance, and 
more and more businesses are just putting their hands up and saying: We 
can't go any further in paying higher premiums.
  Individuals who go out on the open market know what they run into. 
You know you will run into the highest possible premiums and rank 
discrimination. Try to buy a health insurance policy if you have any 
history of illness. They will tell you: We are not covering that. 
Cancer in your background; we will not cover it. That is what people 
face. This current system is unsustainable. We have tackled it, and we 
said we are going to put the time in to change it for the better. This 
is our bill.
  I would like to hold up in my other hand the Republican plan for 
health care reform, but it doesn't exist. They don't have a plan. They 
have speeches. They have press releases. They have charts. But they 
don't have a plan. I am talking about a plan that has gone through the 
rigors of being carefully reviewed by the Congressional Budget Office, 
a plan that is comprehensive, something that addresses all the problems 
in this system in a responsible way.
  They have bills. They have ideas. I don't want to say anything 
negative about them, though I may disagree with them. But they don't 
even come close to being a comprehensive plan. Many of the critics on 
the other side come to the floor every day and give speeches about what 
is wrong with the Democratic health care plan because they don't have 
one. If they did, we would have heard about it. You would have thought 
it would have been the first amendment offered by the Republican side, 
if they truly have such a plan. Of course, they don't.
  What does this plan do? First, it makes health insurance more 
affordable. We have the Congressional Budget Office telling us: Yes, 
the projected

[[Page 31770]]

increase in health insurance premiums is going to flatten; it is going 
to come down a little. It doesn't mean that automatically people are 
going to see their premiums coming down next year, but they may not go 
up as fast. And over time, we won't see them doubling as quickly as had 
been predicted.
  Secondly, this is a plan which is going to mean that 31 million 
Americans who currently have no health insurance will have health 
insurance. That is pretty important. In all the criticism I have heard 
from the other side of the aisle, there has not been a single proposal 
from the Republican side that would expand in any significant way the 
amount of coverage for Americans when it comes to health insurance. But 
here are 31 million Americans who will at least have the peace of mind 
of knowing when they go to bed in the evening that if tomorrow there is 
a bad diagnosis or a terrible accident, they will be covered; they will 
have peace of mind they can go to the best doctors and hospitals in 
America. That is significant.
  There is another element too. We know that right now the health 
insurance companies really have the upper hand when it comes to 
negotiating for coverage. You know what I am talking about. Your doctor 
says: I think you need the following procedure, but I have to check 
with your insurance company. Think about that. We may be the only 
Nation on Earth where a clerk working for an insurance company has the 
last word about life-or-death medical care. That is what is going on 
today.
  This bill makes significant changes when it comes to health 
insurance. It protects individuals from being discriminated against 
because of preexisting conditions, makes sure the companies can't run 
away from coverage when you need them the most, and extends the 
coverage and protection for children and families. These are important 
things that are going to mean a lot to people across America.
  But now comes the Republican side of the aisle and says: Oh, but they 
didn't tell you the real story. It is all about your taxes going up. 
Well, I am afraid that is not quite right. The criticism I have heard 
on the floor about this bill ignores the obvious: this bill provides 
the most significant tax cuts in the history of this country--$440 
billion in cuts over the next 10 years. What kind of tax cuts? If you 
are making less than $80,000 a year, this bill says: We will be there 
to help you pay the premiums. That doesn't exist today. If you don't 
have coverage under Medicaid and you are buying health insurance and 
your income is below $80,000 a year--we are providing tax cuts to 
millions of Americans so they can afford their health insurance, the 
biggest tax cut, I think, in the last 20 years or more. In addition, 
there are tax breaks for smaller businesses. If you have 25 or fewer 
employees, we will help you and your business provide health insurance 
for your employees. That is significant.
  In fact, the Joint Committee on Taxation takes a look at the new 
taxes charged and the tax cuts that are in the bill, and they say 
Americans will pay 1.3 percent less in taxes in 2017 as a result of the 
bill. So the tax burden on Americans starts to come down while 
insurance coverage goes up.
  But don't forget the hidden tax we pay today. When people show up at 
the hospital without health insurance, they get care. They see a 
doctor, they may have x rays and all the procedures and all the 
medicines. But if they can't pay, the hospital charges the other 
patients. We all pay. About $1,000 a year is paid by families now for 
those who have no health insurance. As more and more Americans are 
covered, that burden stops shifting over to those who have insurance, 
and that is a good thing. That hidden tax is largely ignored by the 
other side of the aisle, but we know it is a reality.
  We also think these tax credits will make insurance more affordable. 
The Joint Committee on Taxation says that by 2017, these tax credits in 
the bill will reduce taxes by $40 billion a year for millions of 
Americans.
  We also hear a lot said about the excise tax on insurance policies at 
the higher levels. That is a tax not on individuals but on the 
insurance companies as a disincentive to keep running up the cost of 
premiums and instead try to bring efficiency and cost-effectiveness 
into quality care.
  Health reform is good for our economy too. A lot of businesses that 
are trying to offer health insurance find that they lose their 
competitive edge as the cost goes up. So as we start bringing cost 
down, it means more competition, more job creation, and a greater 
economy.
  I can understand why the other side of the aisle has spent most of 
their time finding fault with this bill. In fact, that is part of their 
responsibility in the Senate. But I had hoped, at the end of the day, 
they would have offered their substitute, their idea on how we can 
truly achieve health care reform. The fact they have not reflects one 
of two things: It is a very tough job to do. This is a big bill, it 
took a lot of work, and perhaps they couldn't come up with a bill 
themselves. As an alternative, maybe they like the current system. They 
may like the health insurance companies and the way they treat 
Americans. They may think it is okay that the cost of premiums will 
continue to skyrocket beyond our reach. Most Americans disagree, and I 
do too.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. CARPER. Mr. President, I ask unanimous consent to speak on time 
under the control of the Senator from New Jersey.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CARPER. Mr. President, let me follow up on some of the comments 
of my colleague from Illinois.
  I am always struck, when I am back home--and I addressed the 
homebuilders in our State yesterday--by the extent of the 
misinformation and confusion. When I actually talk to people about the 
underlying legislation before us, as our deputy leader has done here 
again today, there is a lot to like about the legislation--a lot to 
like about the legislation.
  One of the pieces that hasn't been focused on a whole lot and that I 
want to mention deals with how do we better ensure that people who are 
sick get well and people who are not sick don't become sick as it 
applies to the use of pharmaceutical medicines.
  Our legislation calls for doing a number of things.
  First, if people could actually be healthy, stay healthy, or get well 
by taking certain pharmaceuticals, we would all save money in the end. 
But under the current system, unfortunately, too many people in this 
country who would be helped by pharmaceuticals don't actually get to 
see a primary care doctor. We don't do a very good job in primary care 
in this country.
  One of the things that will flow from our legislation is better 
access to primary care for everybody. Let me give one example of that. 
Currently, if you are Medicare eligible, you have one lifetime physical 
from Medicare. That is it, and that occurs when you sign up for 
Medicare. You don't get a physical every 5 years or 10 years or 20 
years; you get one physical in your life that is paid for by Medicare. 
That will change in the legislation we will be voting on in the days 
ahead. We will provide annual physicals as a benefit under Medicare.
  When we have more regular doctor visits from the primary care doctor, 
one of the things that will come about is a better understanding of the 
health conditions of people in this country and the notion that some of 
us might actually be healthier, if we have a high blood pressure 
reading, if we take medicine for it or if we have high cholesterol, if 
we take medicine for that. So the idea is to identify problems that can 
be treated with medicine. Not everyone can be helped but some can.
  So the first key is, let's make sure folks who will benefit from 
having access to a primary care doctor have that access.
  Secondly, if there are medicines a person can be taking that will 
help them, let's hope the primary care doctor will do his job, refer 
the patient to

[[Page 31771]]

a specialist, if needed, in order to identify the medicines needed.
  The third point would be to make sure that when those medicines are 
identified, they are actually prescribed and made available to the 
person.
  As we all know, we have the Medicare prescription drug program, the 
Part D Program, which is a pretty good program, and about 85 percent of 
the people who use it actually like it. The program has been 
underbudget now for each of the 4 years it has been in existence. That 
is pretty good. But when the drug costs of a senior citizen who 
participates in the Medicare drug program exceed I think about $2,200 a 
year, instead of Medicare paying for 75 percent of the medicine and the 
individual paying 25 percent--which is the case from zero to about 
$2,200 over the course of the year--Medicare basically says: We are out 
of this, and so from $2,200 to $5,200, it is all on the individual 
unless they happen to be very low income.
  So the challenge is to make sure more folks who need access to 
primary care get that; if they need medicines, make sure they are 
available, which can be determined by the doctor or doctors as to what 
people should be taking; No. 3, make certain people get the medicines 
they are prescribed, that they can afford them, and that they actually 
take them; No. 4, make sure that once we have the access to primary 
care, we have made a determination as to what medicines can be helpful 
to a person and that those medicines are prescribed; and then we want 
to make certain the person for whom they are prescribed can actually 
afford them. Part of that is making sure, as we are trying to do in our 
legislation, we take that hole, if you will, that exists from the 
roughly $2,200 to $5,200 and begin to fill it in so that Medicare 
covers more and more of the cost.
  There has been an agreement with the pharmaceutical industry to cover 
a portion of that hole, which will take care of about half of it, and I 
understand from our leadership in the House and in the Senate and the 
President that there is a firm commitment to close it entirely. So the 
range from $2,200 to $5,200 per year would actually be treated just as 
the first $2,200 is: Medicare would cover 75 percent of the cost, and 
for most people, unless they are very poor, will be responsible for 
paying the other 25 percent. That will help a lot of people, and that 
will make sure folks who were doing OK taking their medicines until 
they hit that $2,200 gap and stopped will keep taking their medicines 
and they will stay out of emergency rooms and hospitals and they will 
be healthier as a result.
  The last piece involves something new. It is called personalized 
medicine. I had not heard the term before, although I have been 
interested in the issue for a while. As it turns out, there are some 
medicines for certain conditions that will help one group of people--
because of the way God made them, because of their genetic makeup--and 
there is another group of people with a different genetic makeup that 
will not be helped by the same medicine even though they have the same 
condition.
  Part of what flows from our legislation will be an ever-improving 
ability to determine who will be helped by a particular medicine given 
a certain condition and who will not be, with the same condition, 
simply because of their genetic makeup. So the idea of making medicines 
available to people who will be helped, we want to do that, and we are 
gaining the knowledge to be able to say this group will be helped but 
this group will not, and we can then spend the money where it is going 
to make a difference but stop spending the money where it will not make 
a difference. We are close to being able to do that, and we need to do 
that.
  All this flows from this legislation, and when you put it together, I 
think it is actually a very attractive and very smart policy.
  So overall, how do we provide better health care, better outcomes for 
less money? There is real potential for doing it in the ways I have 
just described.
  I want to stay on the issue of pharmaceuticals, if I can, but I want 
to pivot and take a somewhat different tack now.
  I wrote a letter to the administration a week or so ago, maybe 2 
weeks ago, and I asked the administration for some clarification on the 
issue of reimportation. That is the issue before us today. We have been 
debating it for some time, and we will be voting later today on a 
proposal by the Senator from North Dakota, Mr. Dorgan, and then we will 
be voting on an alternative to that offered by the Senator from New 
Jersey, Mr. Lautenberg, which I support. If that amendment were 
actually incorporated into the Dorgan amendment, I would support the 
underlying Dorgan amendment.
  Anyway, I wrote to the administration, and I got a letter back dated 
December 8. I don't think I have ever stood on the floor and read a 
letter, but this is one I am going to read. I want my colleagues and 
their staff and anyone else who is listening to actually hear what I am 
about to say and what the administration had to say on this subject of 
reimportation. It is a little--well, ``awkward'' may be the wrong word, 
but it has to be a little awkward for the administration because the 
President, when he was then-Senator Obama, was a cosponsor of the 
Dorgan amendment. When he campaigned for Presidency, on the campaign 
trail he spoke favorably of the reimportation legislation offered by 
Senator Dorgan. Now that he is President and he leads an 
administration, he is asked: What is the position of your 
administration on that legislation you cosponsored as a Senator and 
spoke in favor of as a candidate? Now that you are running the country 
and you are the Chief Executive of the country and you have a whole 
Department--the Department of Health and Human Services--whose job it 
is to look out for our safety and health, how do you feel about it?
  So I wrote a letter basically asking the question, and here is what I 
received in response, dated December 8. This is from the head of the 
FDA, the Food and Drug Administration:

       Dear Senator Carper: Thank you for your letter requesting 
     our views on the amendment filed by Senator Dorgan to allow 
     for the importation of prescription drugs. The administration 
     supports a program to allow Americans to buy safe and 
     effective drugs from other countries and included $5 million 
     in its 2010 budget request for the Food and Drug 
     Administration to begin working with various stakeholders to 
     develop policy options relating to drug importation.

  The letter goes on to say:

       Importing non-FDA approved prescription drugs presents four 
     potential risks to patients that must be addressed:
       (1) the drug may not be safe and effective because it was 
     not subject to a rigorous regulatory review prior to 
     approval;
       (2) the drug may not be a consistently made, high quality 
     product because it was not manufactured in a facility that 
     complies with appropriate good manufacturing practices;
       (3) the drug may not be substitutable with the FDA-approved 
     product because of differences in composition or 
     manufacturing; and
       (4) the drug may not be what it purports to be, because it 
     has been contaminated or is a counterfeit due to inadequate 
     safeguards in the supply chain.
       In establishing an infrastructure for the importation of 
     prescription drugs, there are two critical challenges in 
     addressing these risks. First, FDA does not have clear 
     authority over foreign supply chains. One reason the U.S. 
     drug supply is one of the safest in the world is because it 
     is a closed system under which all the participants are 
     subject to FDA oversight and to strong penalties for failure 
     to comply with U.S. law.
       Second, FDA review of both the drugs and the facilities 
     would be very costly. FDA would have to review data to 
     determine whether or not the non-FDA approved drug is safe, 
     effective, and substitutable with the FDA-approved version. 
     In addition, the FDA would need to review drug facilities to 
     determine whether or not they manufacture high quality 
     products consistently.
       The Dorgan importation amendment seeks to address these 
     risks. It would establish an infrastructure governing the 
     importation of qualifying drugs that are different from U.S. 
     label drugs, by registered importers and by individuals for 
     their personal use. The amendment also sets out registration 
     conditions for importers and exporters as well as inspection 
     requirements and other regulatory compliance activities, 
     among other provisions.
       We commend [``We'' being the FDA on behalf of the 
     administration] the sponsors for their efforts to include 
     numerous protective measures in the bill that address the 
     inherent risks of importing foreign products and other safety 
     concerns relating to the distribution system for drugs within 
     the U.S.

[[Page 31772]]

     However, as currently written, the resulting structure would 
     be logistically challenging to implement and resource 
     intensive. In addition, there are significant safety concerns 
     related to allowing the importation of non-bioequivalent 
     products, and safety issues related to confusion in 
     distribution and labeling of foreign products and the 
     domestic product that remain to be fully addressed in the 
     amendment.

  The letter concludes by saying:

       We appreciate your strong leadership on this important 
     issue and would look forward to working with you as we 
     continue to explore policy options to develop an avenue for 
     the importation of safe and effective prescription drugs from 
     other countries:

  It is signed ``Sincerely, Margaret Hamburg.'' She is the Commissioner 
of Food and Drug.
  I suspect this was not an easy letter for Ms. Hamburg to write or an 
easy letter for the administration to sign off on. Given the position 
of the President in the past on this issue and now being confronted 
with the actual possibility that this legislation would become law, it 
has to be a struggle. I commend Senator Dorgan and others who have 
worked with him--I think Senator Snowe and, I believe, Senator McCain--
over the years to try to address the earlier criticisms of the 
legislation.
  What the FDA says in this letter to me, and really to us, is that 
progress has been made. Some of the concerns have been addressed. 
Unfortunately, some have not been.
  What I hope we do when we vote later today is accept the offer of the 
administration. They have been willing to put their money where their 
mouth is, to actually put money in their budget request to say before 
we go down this road as proposed in the Dorgan amendment, let's see if 
we can't work this out in a way that addresses some of the remaining 
safety and soundness concerns. I am not sure, if I were the author of 
the amendment, if I would have accepted that offer from maybe an 
earlier administration whose motives were not maybe as pure--frankly, 
whose Chief Executive was not committed to addressing this issue.
  Our President is committed to addressing this issue. The Department 
of Health and Human Services and the FDA are committed to addressing 
this issue. They are anxious, I believe, to work it out. Not only that, 
they are anxious and willing to provide some of the funding needed to 
come to an acceptable resolution and compromise. I hope by our votes 
later today we will accept that offer from the administration, and I 
hope in the weeks and months ahead we will actually take the steps, not 
necessarily proposed exactly by Senator Dorgan, that will allow us to 
move in that direction and do so in a way that does not unduly harm or 
put at risk the citizens of this country.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. I understand I will be yielded time off the leader's time?
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GREGG. Mr. President, I want to speak a little today about this 
issue of the tax burden the Reid bill is putting on people with incomes 
under $250,000, $200,000. We all know the President said he was not 
going to allow taxes to increase for people who have incomes under 
those numbers. We know there are all sorts of proposals in the Reid 
bill which significantly increase taxes. We also know there are a lot 
of proposals in the Reid bill that significantly increase fees. We also 
know there are a lot of proposals in the Reid bill which will 
significantly increase premiums--all of which people under $200,000 
pay.
  Why is this? Primarily it is because, if you look at the Reid bill, 
it exponentially increases spending and grows the size of government. 
Government is increased by $2.5 trillion under the Reid bill when it is 
fully phased in. It goes from 20 percent of our gross national 
product--that is what government takes out today in spending--up to 
about 24 percent of our gross national product, a huge increase in the 
size of government.
  When spending increases like this, at this type of explosive rate, 
there are a couple of things that occur. One of them is that taxes also 
go up. It is like day following night. If you are going to increase the 
size of the government at this rate, you are going to have to 
significantly increase taxes--whether you call them fees or whether you 
call them premium increases or whether you call them outright taxes. 
That is what is happening. That is because the goal is to grow the 
government dramatically. That is the goal. When you grow the 
government, you inevitably increase the taxes. In fact, in this bill it 
is estimated, when it is fully put into place, that there will be about 
$1.6 or $1.7 trillion in new taxes.
  There is also, when it is fully phased in, about $1 trillion of 
reduction in Medicare spending. We have had a lot of discussion on that 
matter on the Senate floor. I have been here a number of times talking 
about that. But the burden of taxation goes up in order to allegedly 
pay for these new entitlements.
  Why do the taxes have to go up? Because when you increase spending 
this way you have to pay for it--or you should pay for it. This bill 
attempts to do that by raising taxes dramatically. But the presentation 
that you can get all this tax revenue out of people who are making more 
than $200,000 a year simply doesn't fly. It doesn't pass the 
commonsense test. It is like saying when you cut Medicare $1 trillion 
you are not going to affect benefits.
  We heard for a week from the other side of the aisle that no Medicare 
benefit cuts would occur with $1 trillion of Medicare cuts. Of course, 
that is not true. We just heard yesterday from the Actuary--the 
President's Actuary, by the way, the Actuary of CMS--that when you make 
these significant reductions in provider payments under Medicare, which 
is where most of the savings occur, that means there are fewer 
providers who are going to be able to be profitable. In fact, 20 
percent of providers will be unprofitable under the Reid bill as scored 
by the Actuary for CMS, and, as a result, providers will drop out of 
the system. Clearly, that will affect benefits to seniors because they 
will not be able to see providers because they will not exist anymore.
  It is like telling somebody--someone said; the Senator from Nebraska, 
I think, said--you can have keys to the car, but there is no car. In 
this instance there will be no providers or many fewer providers.
  Along with that problem there is this claim--along with that claim 
that was totally inaccurate, which is that Medicare benefits will not 
be cut--there is this claim that these new revenues to pay for this 
massive expansion in spending are going to come from just the wealthy.
  Again, we have independent sources that have taken a look at this, in 
this case the Joint Tax Committee. They have concluded that is not the 
case. That is not the case at all. The argument from the other side of 
the aisle is we have all these tax credits in here which, when you 
balance them out against the tax increases, meaning that people earning 
under $200,000--because some will get tax credits, some will get tax 
increases, but they balance out so there is virtual evenness, so that 
the tax credits in the bill to subsidize people who do not have 
insurance today mostly are balanced by the tax increases on people 
earning under $200,000.
  Of course, if you are one of the people earning under $200,000 who 
doesn't get the tax credit, that doesn't mean a whole lot. Your taxes 
are going up. But more importantly, Joint Tax has taken a look at this, 
and by our estimate, what Joint Tax has said is essentially this: 73 
million families, or about 43 percent of all returns under the number 
of $200,000, people with incomes of under $200,000, will, in 2019, have 
their taxes go up.
  So there is a tax increase in this bill, and it is very significant 
on people earning under $200,000. In fact, if you compare that to those 
people who will benefit from the tax credit, what it amounts to is for 
every one person who is going to benefit from the tax credit, three 
people earning under the income of $200,000 will see their taxes go up. 
That is a real problem, first, because it significantly violates the 
pledge of the President when he said:


[[Page 31773]]

       I can make a firm pledge no family making less than 
     $250,000 will see their taxes increase--not your income 
     taxes, not your payroll taxes, not your capital gain taxes--
     not any of your taxes.

  That is what the President said. That pledge is violated by the Reid 
bill, violated very fundamentally for the 73 million people whose 
incomes are under $200,000 and whose taxes go up.
  So it clearly is not a tax-neutral event for middle-income people. It 
is a tax increase event for a large number of middle-income people. 
Forty-three percent of all people paying taxes whose income is under 
$200,000 will have their taxes increased.
  What is the thought process behind this? The thought process 
essentially seems to be we are going to explode the size of government, 
we are going to dramatically increase the taxes on the American people, 
and somehow that is going to make life better for Americans. I do not 
see that happening. I don't see that happening. We know from our 
experience as a government that growing the government in this 
exponential way probably is going to lead to people having a tougher 
time making ends meet because their tax burden is going to go up.
  Discretionary dollars they might have used to send their kids to 
college or they might have used to buy a new house or they might have 
used to buy a new car or they might have just simply saved--those 
discretionary dollars they don't have anymore because they come to the 
government to fund this massive explosion in programs and this increase 
in the size of government.
  I think we do not need to look too far to see how this model does not 
work. All we have to do is look at our European neighbors.
  This idea that you can Europeanize the economy, that somehow if you 
grow the government you create prosperity, that is what is basically 
behind this philosophy: You grow the government, you create prosperity. 
That does not work. We know that does not work. All we have to do is 
look at our neighbors in Europe who have used that model to find out 
and conclude that does not work.
  It would make much more sense to put in place an affordable plan, one 
which did not raise the taxes of 73 million people who file income 
taxes under the income of $200,000, 43 percent of the people paying 
taxes. It would make much more sense not to grow the government in this 
extraordinary way that we know we cannot afford and that we know ends 
up passing on to our kids a country which has less of a standard of 
living than we received from our parents.
  So I hope we take another look at all the taxes in the bill, 
recognizing that the commitment the President made on the issue of 
taxes is not being fulfilled by this bill, and go back to the drawing 
board and reorganize it so we can come closer to what the President 
wanted, which was a bill that did not raise taxes; which was a bill 
that did insure everyone; which was a bill that did create an 
atmosphere where if you wanted to keep your present insurance, you 
could keep it; and which was a bill that turns the curve of health care 
costs down.
  None of those four goals of the President are now met in the bill. In 
fact, according to his own Actuary and according to Joint Tax, for all 
four of those goals, just the opposite occurs. The number of people 
uninsured remains at 24 million people, the cost curve goes up by $235 
billion, taxes go up for 73 million people, and we end up with 17 
million people who have insurance today in the private sector losing 
that insurance. So I believe we should take another look at this bill 
and try to do a better job.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Franken). The Senator from Wyoming.
  Mr. ENZI. Mr. President, I yield up to 20 minutes to the Senator from 
Alabama out of the leader time.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SHELBY. Mr. President, I rise today in disbelief. The American 
public is searching for commonsense answers from its leaders on health 
care, and yet they are poised to receive an expensive, wholly 
inadequate, and simply illogical so-called solution.
  After weeks behind closed doors--including now--the majority has 
produced a bill thus far that raises taxes, makes drastic cuts in 
Medicare, and increases premiums to create a new government program, 
the so-called public option.
  I believe the public option is nothing more than socialized medicine 
and expanded government disguised as greater choice. Thus, I am 
adamantly opposed to this bill as it is written.
  I believe any legislation seeking to effectively address health care 
reform should have as its dual aims cutting costs and increasing access 
to quality care. But, amazingly, this bill just does the opposite on 
both counts.
  This proposed legislation is not going to solve our Nation's health 
care problems and yet likely will exacerbate them. The administration, 
it seems to me, seems to be determined to force the health care bill on 
the American people, which the majority of citizens do not want or 
need.
  I believe we have the best health care system in the world in the 
United States of America. While many have scoffed at such a suggestion, 
the United States, as we know, has the finest doctors, first-rate 
treatments, cutting-edge innovation, and low wait times.
  Think about it. People come from all over the world to take advantage 
of our revolutionary medicine and state-of-the-art treatments. The 
United States develops new drugs and medical devices years before the 
rest of the world, and American doctors are usually pioneers of new 
techniques in surgery and anesthesia.
  As a cancer survivor myself, I am especially proud of the great 
strides the United States has made in screening and treating cancer. 
The United States has one of the highest survival rates for cancer in 
the world and dwarfs survival statistics in Europe. In 2007, U.S. 
cancer survival was 66.3 percent, while Europe's was 47.3 percent. I 
believe the answer as to where to receive treatment in the world is 
clear: the United States of America.
  However, our current system, I would admit, is not perfect, and I 
have never said it was. But I believe we must seek to build upon rather 
than tear down these strengths we have. We need a bill that reduces 
costs and improves quality and level of care for the American people.
  Here, I believe, we get the exact opposite: a bill that grows big 
government by creating a costly new entitlement program, drives up 
private health care costs, and subsequently lowers overall quality and 
access to care.
  According to the Congressional Budget Office's Long Term Budget 
Outlook, the coming tsunami of Social Security, Medicare, and Medicaid 
costs is projected to push the Federal public debt to 320 percent of 
GDP by 2050 and over 750 percent by 2083.
  Does anyone truly believe this new legislation will not further add 
to our Nation's debt? When has history proven that our government can 
regulate more effectively than private industry or the marketplace, 
much less doing so without adding to the deficit? The reason: we simply 
overspend and overpromise.
  The Congressional Budget Office estimates that the Senate Democrats' 
health care proposal, as now written, will cost $849 billion over 10 
years.
  While Americans will be hit immediately with new taxes and government 
mandates, the actual services and coverage promised in this legislation 
will not be implemented until 2014--a clear attempt to mask the true 
cost of reform. The proposal before us delays government subsidies for 
yet an additional year to hide the real cost of the bill and show so-
called additional savings.
  Stalling implementation on a program set to run for an indefinite 
time horizon and calling it ``savings'' is nothing more than fiscal 
sleight of hand. Therefore, the Senate Budget Committee estimates the 
true 10-year cost of the proposal to be $2.5 trillion once fully 
implemented--$2.5 trillion once fully implemented. Let me say that 
again: $2.5 trillion--a lot of money.

[[Page 31774]]

  To pay for this $2.5 trillion worth of legislation, the government, I 
believe, will have no choice but to raise taxes to European welfare 
state levels or impose drastic restrictions on patient care or, most 
likely, both.
  The bill includes over $493 billion in new tax increases, as written, 
and probably another $464 billion in Medicare cuts, placing the burden 
of reform squarely on the shoulders of the middle class, small 
businesses, and the elderly.
  For the middle class, the proposal is a direct hit. The Joint 
Committee on Taxation estimates that in 2019, 73 percent of the so-
called wealthy taxpayers paying the proposed excise tax on high 
premiums will earn less than $200,000 a year. I think the time is now 
to stop heaping debt obligations on the backs of the able bodied.
  The proposed tax on the so-called Cadillac plans--plans with high 
annual premiums--will not only be passed on to the consumer through 
higher premiums but will creep its way into the lives of many middle-
class Americans.
  I have a little story. Mrs. Melanie Howard, of Pelham, AL, raised 
this point when discussing the idea of who actually receives Cadillac 
health care. Mrs. Howard spoke to me of the small nonprofit where she 
worked, which had to raise premium prices to offset a few workers who 
were battling cancer. In effect, she was paying for a Cadillac but 
still just getting a basic car. Because the tax is based on cost of 
coverage and not quality and breadth of coverage, many Americans could 
fall into this category.
  I believe it is a simple actuarial fact that smaller risk pools 
result in higher premiums. Thus, small businesses, such as Mrs. 
Howard's employer, are naturally going to bear the brunt of this ill-
conceived Cadillac health insurance tax.
  As taxes increase to pay for the public option, so does the cost of 
premiums on health care plans. The Congressional Budget Office analysis 
on premium impacts estimates that family premiums would increase 28 
percent--from $11,000 per family to over $14,000 per family by 2019. 
This is more than a $3,000 increase per family.
  The bill also imposes $28 billion in new taxes on employers who do 
not provide government-approved health plans, and it charges a penalty 
of $750 per uninsured individual--a form of double taxation.
  Furthermore, any opportunity to allow individuals to self-manage 
their care and plan for future health care costs has been eradicated 
from this proposal as now written. Flexible spending accounts help 
individuals and families pay for out-of-pocket medical expenses that 
are not covered by their health insurance plans with tax-free dollars. 
These are particularly important for individuals and families who have 
high medical expenses, such as seniors and those with chronic health 
conditions or disabilities.
  The current proposal before us will not only limit allowable flexible 
spending account contributions, but the limit is not indexed for 
inflation, which means the inflation-adjusted or real value of a 
flexible spending account will decline steadily over time until 
virtually worthless.
  What is also truly concerning about the current legislation is a 
massive reduction in care our seniors will face under this legislation. 
The proposal includes $120 billion in cuts to Medicare Advantage, 
nearly $135 billion in Medicare cuts for hospitals that care for 
seniors, more than $42 billion in cuts from home health agencies, and 
nearly $8 billion in cuts from hospices, of all places. I believe this 
nearly $\1/2\ trillion in Medicare reductions simply must result--has 
to result--in vast reductions in the quality of our seniors' care.
  I do not believe massive tax increases, a rise in the cost of health 
care premiums, reduced flexibility in self-management of care, and cuts 
to seniors' health care is what the American people have in mind as a 
way to improve access and create affordable quality health care.
  We have already seen how this legislation will significantly increase 
costs and reduce coverage of care. But let's, for a minute, turn our 
attention to the quality of care because there is, indeed, a big 
difference between government-run health care coverage and actual 
access to medical care.
  As Margaret Thatcher once said:

       The problem with socialism is that eventually you run out 
     of other people's money to spend.

  Medical rationing is inevitable under government-run health care. It 
has to be. Supporters of government-run medicine often cite Canada or 
Great Britain as models for the United States to follow. Yet medical 
rationing, such as is common in those countries, is inevitable under a 
government-run health care system as now proposed. These countries are 
forced to ration care or, in the alternative, have long waiting lists 
for medical treatments that lead to the same result.
  More than 750,000 Britons are currently awaiting admission to the 
National Health Service hospitals. Last year, over half of Britons were 
forced to wait more than 18 weeks for care or treatment. The Fraser 
Institute, an independent Canadian research organization, reported in 
2008 that the average wait time for a Canadian awaiting surgery or 
other medical treatment was 17 weeks, an increase of 86 percent since 
1983.
  Access to a waiting list is not access to health care.
  A study by the Organization for Economic Co-Operation and Development 
showed that the number of CT scanners per million in population was 7.5 
in Britain, 11.2 in Canada, and 32.2 in the United States.
  For magnetic resonance imaging--MRIs--there was an average of 5.4 MRI 
machines per million in population in Britain, 5.5 in Canada, and 26.6 
in the United States.
  Government-run health care will undermine patients' choice of care.
  Citizens in those countries are told by government bureaucrats what 
health care treatments they are eligible to receive and when they can 
receive them. I believe Americans need to understand that all countries 
with socialized medicine ration health care by forcing their citizens 
to wait in lines to receive scarce treatments. Simply put, government 
financing means government control, and government control means less 
personal freedom.
  While we need to enact reforms to our health care system that will 
reduce cost and improve access, our Nation cannot withstand the deep 
deficits this colossal health care entitlement program, I believe, 
would create. Instead, we need a system that restores the patients and 
doctors as the center of every health care decision, rather than the 
government and insurance companies.
  By making insurance portable, expanding health care savings accounts, 
reducing frivolous lawsuits, emphasizing preventive care, reducing 
administrative costs, and making insurance more affordable to small 
business and individuals, I believe we can efficiently decrease the 
costs that currently burden Americans while expanding coverage. The 
result would be improved quality and affordable care.
  It appears that no matter how many thousands of letters my office 
receives in the Senate asking Congress to stop this legislation, this 
administration is determined to pass something--anything--no matter 
what the cost or how damaging the result. The latest CNN poll shows 64 
percent of Americans oppose this health care reform as now written. The 
Associated Press reports that over 60 percent of Americans are against 
this type of reform.
  It has been said we would be committing Senatorial malpractice to 
pass legislation such as this. I agree. I simply do not believe the 
American people desire or deserve what government-run health care would 
result in: higher taxes, larger deficits, and rationed lower quality 
care.
  While we need to enact reforms to our health care system that will 
reduce costs and improve access to all Americans, our Nation cannot 
withstand the massive cost this colossal health care entitlement 
program will create.
  The health of this Nation will not be helped by risking our Nation's 
financial well-being. It has been said if you think health care is 
expensive now, wait until it is free.

[[Page 31775]]

  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.


                           Amendment No. 2793

  Mr. DORGAN. Mr. President, I yield myself such time as I may consume 
under the hour I control.
  We are going to have people trotting onto the floor of the Senate 
this afternoon--and some have this morning--talking about this issue of 
prescription drug reimportation and saying there are safety problems 
with it--safety problems. I wish to talk about one small piece of 
health care reform without which you can't call it health care reform, 
because at least with respect to the issue of pricing of prescription 
drugs, there will be no reform unless my amendment is passed.
  My amendment is bipartisan. It includes support from Senator Snowe, 
Senator McCain, Senator Grassley on that side and many Democratic 
Senators as well and it says: Let's put the brakes on these 
unbelievable increases in the price of prescription drugs; a 9-percent 
increase this year alone in brand-name prescription drugs.
  Why is this an important issue? How about let's talk about the price 
of Nexium--the price of Nexium. You buy it, if you need it: $424 for an 
equivalent quantity in the United States. If you want to buy it 
elsewhere, not $424; you pay $37 in Germany, $36 in Spain, $41 in Great 
Britain. We are charged the highest prices in the world for 
prescription drugs.
  We are going to have a lot of people come out and say: Well, there 
will be safety problems if we reimport FDA-approved drugs from other 
countries--absolute rubbish.
  Here is Dr. Rost, a former vice president for marketing for Pfizer 
Corporation, and this is what he said:

       During my time I was responsible for a region in northern 
     Europe. I never once--not once--heard the drug industry, 
     regulatory agencies, the government, or anyone else saying 
     that this practice was unsafe. Personally, I think it is 
     outright derogatory to claim that Americans would not be able 
     to handle reimportation of drugs when the rest of the 
     educated world can do it.

  They have been doing this in Europe for 20 years, reimporting lower 
priced prescription drugs from other countries, and they do it safely. 
Our consumers pay the highest prices in the world because there is no 
competition for prescription drugs. When a drug is sold for a fraction 
of the price elsewhere--one-tenth the price for Nexium in Germany and 
Great Britain--the American people can't access it. Even though it is 
made in the same plant, the same pill put in the same bottle, the 
American people are told: It is off-limits to you.
  Dr. Rost also said this: Right now, drug companies are testifying 
that imported drugs are unsafe. Nothing could be further from the 
truth. This from a former executive of Pfizer Corporation.
  When the pharmaceutical industry goes around the Hill today and tells 
you that importing medicine is going to be unsafe--and by the way, our 
bill only allows the importation from Australia, New Zealand, Japan, 
and the European countries, where they have an identical chain of 
custody and where we require pedigree and we require batch lots that 
will make the entire drug supply much safer, including the domestic 
drug supply--when the pharmaceutical industry goes around the Hill 
today saying: If you vote for the Dorgan-Snowe-McCain, et al. 
amendment, you are voting for less safety, ask the pharmaceutical 
industry this: What about the fact that you get 40 percent of your 
active ingredients for drugs from India and China and from places in 
India and China in many circumstances that have never been investigated 
or inspected by anyone? Answer that, and then tell us that reimporting 
FDA-approved prescription drugs from other countries is unsafe. What a 
bunch of rubbish.
  My understanding is, sometime yesterday--maybe late last night--
somebody made a deal. I don't know what the deal is, but I guess the 
deal is to say we are going to have this amendment--it has been 7 days 
since we started debating this amendment--we are going to have this 
amendment vote and then we are going to have another vote on another 
amendment that nullifies it. It is the amendment I call: I stand up for 
the American people paying the highest prices in the world for 
prescription drugs.
  If you want to support that amendment, go right ahead. What you are 
doing is nullifying any ability of the American people to have the 
freedom to access lower priced drugs where they are sold elsewhere in 
the world. I am talking about FDA-approved drugs made in FDA-approved 
plants. It doesn't matter what the fancy wrapping and the bright 
ribbons are on this package.
  This package to nullify what we are trying to do is a package that 
comes directly from the pharmaceutical industry. Why? To protect their 
interests. This year they will sell $290 billion worth of drugs, 80 
percent brand-name prescription drugs. On brand-name drugs, the price 
increased 9 percent this year and on generic drugs it fell by 9 
percent. Now I understand why they want to protect those interests.
  Here are two pill bottles, both contain Lipitor, both made in a plant 
in Ireland by an American corporation. This sent to Canada, this sent 
to the United States. The American consumer gets the same pill made in 
the same bottle made in the same plant by the same company. The 
American consumer also gets the privilege of paying nearly triple the 
price and can't do a thing about it because this Congress, vote after 
vote after vote, has said: We stand with the pharmaceutical industry 
and against competition and against freedom for the American worker.
  If I sound a bit sick and tired of it, I am. We have been going after 
this for 8 to 10 years, to give the American people the freedom to 
access the identical FDA-approved drugs for a fraction of the price 
where they are sold everywhere else in the world, and we are told again 
and again and again there is this phony excuse about safety, completely 
phony.
  I will have more to say about it later, but I did want to say we are 
going to see a lot of people trotting out here with such a shop-worn, 
tired, pathetic argument to try to keep things as they are and try to 
keep saying to the American people: You pay the highest prices in the 
world for brand-name drugs and that is OK. That is the way we are going 
to leave it. We will call it health care reform, and at the end of the 
day, that is what you end up with: The highest prices in the world, a 
9-percent increase just this year alone. Over the next 10 years, that 
9-percent increase, just this year, nets the pharmaceutical industry 
$220 billion, but that is OK. That is the way you are going to end up, 
American consumer, because we don't want to give you the freedom to 
access those lower priced drugs where they are sold for a fraction of 
the price.
  One final point. I have mentioned often an old codger who sat on a 
straw bale at a farm once where I had a meeting, and he said: I am 80 
years old. Every 3 months we have to drive to Canada across the border 
because my wife has been fighting breast cancer. Why do we drive to 
Canada? To buy Tamoxifen. Why do we have to go there to buy it? We 
paid--I think he said-- one-tenth the price in Canada. We couldn't have 
afforded it otherwise.
  Is that what we want the American people to have to do? Most people 
can't drive across the border someplace. Why not establish a system 
like they have had in Europe for 20 years, to allow the American people 
the freedom to access reasonably priced drugs, FDA-approved drugs.
  So this is a day in which we will vote on my amendment and then we 
will vote on an amendment that nullifies it and we will see whether 
enough of a deal has been made so the fix is in. So, once again, the 
American people end this day having to pay the highest prices in the 
world. Pay, pay, pay, pay, soak the American consumer, keep doing it. 
That has been the message here for 10 years.
  A group of us, Republicans and Democrats, 30 who have cosponsored 
this legislation, have said, you know what. We are sick and tired of 
it. Give the American people the freedom. If this is a global economy, 
how about a global economy for real people? How

[[Page 31776]]

about let them have the advantages of a global economy?
  Once again, I will have a lot more to say this afternoon. It is 
apparently a day for deal-making and we will see who made what deals, 
but we are going to have votes. I know one thing. I know the 
pharmaceutical industry has a lot of clout. I know that. I hope the 
American people have the ability to expect some clout on their behalf 
in the Chamber of the Senate this afternoon.
  I yield the floor, and I make a point of order that a quorum is not 
present.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, my understanding is there is a desire by 
some to have a quorum call in which the quorum call time is charged 
against all sides. My understanding is, there are, I think, 5 hours 
allocated with respect to today: 1 hour for the Baucus amendment, 1 
hour for the Crapo amendment, and 3 hours distributed as follows: 1 
hour for me, 1 more Mr. Lautenberg, and 1 hour for the Republican 
leader on the prescription drug reimportation; am I correct?
  The PRESIDING OFFICER. That is correct.
  Mr. DORGAN. So I ask unanimous consent that the quorum call be 
allocated against the 4 hours and not against the hour I control.
  The PRESIDING OFFICER. Is there objection?
  Mr. ENZI. Reserving the right to object, we have had constant 
speakers over here, so we have used a lot of our time. If we had known 
there was more vacant time, and if we could have had some of the 
majority's time, we could have had a steady stream of speakers over 
here the whole time. So we would reluctantly agree to the time being 
divided between the two sides, as we have done that in all the times in 
the past, but we want to reserve some time for our speakers as well. We 
could have easily had people over here to speak.
  Mr. DORGAN. Well, Mr. President, did the Senator object?
  The PRESIDING OFFICER. I think he reserved his right to object.
  Does the Senator object?
  Mr. ENZI. Yes, the Senator objects.
  The PRESIDING OFFICER. Objection is heard.
  Mr. DORGAN. Mr. President, my understanding is I will put in a quorum 
call, the time is equally divided, apparently, between the sides, in a 
circumstance where the other side has 3 hours and our side has 2 hours 
and especially on the subject I have just discussed, the other side has 
2 hours and I have 1 hour.
  I will put us into a quorum call, and I guess it will be equally 
divided between the two sides.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Carper). Is there objection?
  Without objection, it is so ordered.
  The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. KYL. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KYL. Mr. President, I want to speak in favor of the Crapo motion, 
which we will be voting on in a few hours.
  The Crapo motion would essentially protect the American middle class 
from tax increases in this bill. The President promised that nobody 
making under $200,000 a year, or families making under $250,000 a year, 
would see tax increases under the bill. But they do.
  The Crapo motion would simply send the bill back to the Finance 
Committee and make sure that they don't. It is a fairly straightforward 
amendment, and we should support it.
  In supporting the motion, I will discuss other things related to it. 
There is this notion that somehow or other the health care bill will 
save money for the government and for taxpayers and patients. That is 
where it is wrong. That is why we need things such as the Crapo motion.
  How does the expenditure of trillions of dollars in new spending save 
anybody money? That is counterintuitive. The answer is, of course, that 
it doesn't.
  Jeffrey Flier, dean of the Harvard Medical School, gives this bill a 
failing grade. He wrote in the Wall Street Journal:

       The Democrats' health care bill wouldn't control the growth 
     of costs or raise the quality of care.

  I think that is the fact. So let me point out a couple of the bill's 
provisions that undermine this savings argument, one of which is the 
new taxes, which the Crapo motion would explicitly address, The new 
subsidies that fail to address costs, and finally this inclusion of the 
CLASS Act, which is a massive new expenditure and entitlement that 
would grow out of control over time.
  First, though, let me focus on these new taxes, 12 in total. They go 
into effect immediately. In fact, the Internal Revenue Service 
estimates it would need between $5 billion and $10 billion over the 
next 10 years just to oversee the collection of these new taxes. Think 
about that.
  These new taxes include, but are not limited to, a new payroll tax on 
small businesses. What better way to kill job creation. We will impose 
another \1/2\ percent tax if you hire somebody or all the people you 
retain on the payroll. That is crazy at a time when we are trying to 
create new jobs. There is a tax on seniors and the chronically ill. I 
discussed that yesterday. There are new limits on health savings 
accounts which will increase taxable income for middle-class families, 
and a new medical device tax which will be paid for by American 
families, according to the Congressional Budget Office. In other words, 
if you need a health or lifesaving device, such as a diabetes pump or 
stent for your heart, why do you want to tax that if it provides better 
health care for you and your family? The reason is they need more 
revenue to pay for the expenses of the bill. They increase the taxes. 
CBO says they will be passed right through to the patients which are 
then passed through in the form of higher premium costs.
  As I said, most of these taxes would start immediately and many would 
hit middle-income families despite the President's famous campaign 
pledge.
  Washington, for a period of 4 years, piles up the money before it 
pays any of the money out. That is supposed to lower costs because for 
the first 4 years there are not any expenses. We are collecting all 
this revenue and somehow or another that is portrayed as a savings for 
the Federal Government.
  Over the next 10 years that money is spent out, it is $2.5 trillion 
in spending, and that is not sustainable. This is part of the bill's 
gimmickry to create this idea that somehow the bill is deficit neutral. 
As I said, when you take a look at the true 10-year cost beginning in 
2014 once the bill is fully implemented, you have a whopping $2.5 
trillion pricetag.
  Colleagues on the other side say: It is necessary to raise all this 
money to subsidize the increased cost of health care. I get it. We are 
going to raise premiums under the bill and then we are going to need to 
raise taxes to subsidize so people can afford those increased premiums. 
What sense does that make? I ask, do Americans want to pay more taxes 
in order to get a subsidy because of the increase in costs that are the 
result of this legislation? Would they rather not have the premiums go 
up in the first place, as the ideas that Republicans have proposed 
would ensure? But that is what the bill does. It raises premiums so 
then you have to raise taxes to subsidize the cost of insurance.
  What the Crapo motion would do is to say the President needs to keep 
his promise. Those making less than $200,000 a year should be relieved 
of this tax burden.
  Secondly, if the government subsidizes insurance for 30 million more 
Americans, obviously costs have to rise. As the respected columnist 
Robert Samuelson wrote in a recent Washington Post column--by the way, 
the

[[Page 31777]]

title was ``The Savings Mirage on Health Care'':

       The logic is simple. . . . Greater demand will press on 
     limited supply; prices will increase. The best policy: 
     Control spending first, then expand coverage.

  That is what Republicans have been proposing. We would like to target 
specific solutions to the problems of cost which would then allow more 
Americans to gain access to affordable health care and, thus, avoid a 
hugely expensive Washington takeover of the entire system.
  Our solution includes medical liability reform--that does not cost 
anything; it saves money--allowing Americans to purchase insurance 
policies across State lines, allowing small businesses to pool their 
risks and purchase insurance at the same rates corporations do. These 
solutions would bring down costs and, at the same time, enhance 
accessibility.
  Third--and the reason I raise this is because several colleagues on 
the other side of the aisle have made pretty firm statements about not 
being able to support this legislation as long as it included what is 
called the CLASS Act. This is a new government-run, government-funded 
program for long-term care. It is intended to compete with private 
insurers' long-term care plans. Notice the pattern of government 
wanting to compete with private entities. That is what the CLASS Act 
does.
  Participants would pay into this new government system for 5 years 
before they would be allowed to collect any benefits. Naturally, you 
have some increased revenues for a while, and that is what the bill 
counts on in order to allegedly be in balance. Of course, the payouts 
occur later, and then it is not in balance. Participants would have to 
be active workers. So this new entitlement would not benefit either 
seniors or the disabled.
  We are talking about a brandnew entitlement. If a worker begins 
making payments in 2011, he or she could not collect benefits until the 
year 2016. That is why supporters of the CLASS Act say this would 
reduce the deficits in between 2010 and 2019. Sure, if you don't spend 
money in those years and you collect a lot of tax revenues, of course 
you are going to have more of a surplus of revenues. What happens, 
though, when the claims on that money occur? It is like Medicare today: 
It is very soon out of money and then broke and then in a hole and then 
you have a big debt on your hands. That is precisely what happens here. 
No government program has ever reduced budget deficits, we know that.
  The Congressional Budget Office confirms that this program will, 
indeed, add--add--to future budget deficits. Here is what the CBO 
writes:

       The program would add to future federal budget deficits in 
     large and growing fashion.

  It does not get any simpler than that. The CLASS Act would add to 
future deficits. That is why several of my colleagues on the other side 
of the aisle have said they cannot support the bill as long as the 
CLASS Act is in it. But the last time I checked, it is still in it.
  I want to also refer to the chairman of the Budget Committee who has 
obviously spoken out on this issue because he understands the effect. I 
speak of Senator Conrad. He said it is like a Ponzi scheme because it 
offers returns that payments made into the system cannot cover in the 
long run.
  As I said, it would generate generous surpluses for the government 
while Americans pay in and are not collecting benefits. And then later 
on, it reaches a point where payments made into the program cannot 
sustain the promised benefits.
  Here is what CBO tells us about the program:

       It would lead to net outlays when benefits exceed premiums. 
     . . .

  ``Net outlays'' means you are spending more than you are taking in.

       [By 2030] the net increase in federal outlays is estimated 
     to be ``on the order of tens of billions of dollars for each 
     [succeeding] ten-year period.''

  Over time, this program adds substantially to the deficit and to the 
debt. It is an entitlement that is not self-sustaining but has to be 
propped up in some fashion by additional revenues. It is another way, 
in addition to the first two ways I mentioned, of how costs go up in 
this legislation, how savings do not result, and how the American 
public has to end up making up the difference. You have new taxes to 
cover subsidies for increased premiums, government subsidies for 30 
million Americans that increased demand without addressing costs, and 
finally, the inclusion of the CLASS Act.
  As I said, I support the Crapo motion because it would assure that 
none of these burdensome new taxes would hit middle-income families as 
they are set to do. This amendment must pass if President Obama is 
going to keep his campaign pledge to not raise taxes ``one dime'' on 
middle-income Americans.
  I also support the soon-to-be-pending Hutchison-Thune motion which 
says that no taxes at all should be levied until Americans see some 
benefits. This addresses that problem I noted where you collect the 
taxes up front and then you start paying benefits at a later date. This 
is an expression of disapproval for the budget gimmickry contained in 
the bill.
  Americans want us to bring costs down. They could not be more clear 
about that. But the provisions of this bill disobey the wishes of the 
American people. That is why in public opinion surveys--it does not 
matter who takes them--they are increasingly showing that the American 
people are opposed to this legislation. The latest one by CNN just a 
few days ago--and CNN is not noted to be a big conservative 
organization--shows that 61 percent of the American public oppose the 
health care plan. And now only 36 percent support it. That is getting 
close to two to one in opposition.
  An earlier poll showed that among Independent voters, by more than 
three to one, they oppose what is in this legislation. The point here 
is not some peripheral issue--and I do not mean to demean the 
importance of the issue when I talk about, for example, the public 
option for the government-run insurance plan. The abortion language 
certainly is a key issue to many. Even if you could somehow fix those 
problems, you still have the core of the bill that the American people 
object to: the $\1/2\ trillion in cuts in Medicare, the $\1/2\ trillion 
in increases in taxes that are meant to be addressed by the motion I am 
speaking of, the requirement that because premiums go up under the 
legislation, you have to raise taxes to create a subsidy so you can 
give it to people so they can afford the increased premiums.
  Something we are going to be talking about in the future and have 
hardly addressed but to me is probably the most pernicious thing of 
all--you can talk about the government takeover, you can talk about the 
additions to the debt, the taxes, the increased premiums, all of these 
things, the cuts in Medicare--to me the most pernicious thing of all is 
the fact that it is unsustainable. The promises exceed the revenues 
with the net result that over time, care will have to be rationed.
  This is what I think the American people fear most of all because 
they know you cannot sustain a program this costly and not have to at 
some point begin to delay care, delay appointments so they do not occur 
as rapidly and gradually begin to denying care. That is why this big 
kerfuffle about the commission that made recommendations on breast 
cancer screening and mammograms was so frightening to people. They 
could see this was the way rationing begins. Some panel says we don't 
think people need as much medical care as they have been getting, never 
mind what has been recommended in the past. Yes, by the way, it will 
save money.
  Of course, when politicians have to find a way to reduce benefits, 
they do not go to their constituents and say: We are going to cut your 
benefits. What they do is reduce the payments to people who provide the 
health care-- the doctors, hospitals, home health care, hospice care, 
these folks. They reduce payments so that the providers have no choice 
but to reduce the amount of their care.
  They have to see more patients, there are not as many of them, and 
they are getting paid less. So naturally they cannot provide the same 
level and quality of care. That is how rationing

[[Page 31778]]

begins. Ask people in Canada, ask people in Great Britain how long it 
takes to get in to see the doctor. Eventually even that does not cut 
it. So they set a budget and say: We cannot afford to pay any more than 
that.
  You better hope you get sick early in the year. That is, 
unfortunately, what you can see to an extent in our veterans care but 
even more in our care for our Native Americans. I did not make this up. 
Others have said in the Indian Health Care Service, get sick early in 
the year because they run out of money if you get sick late in the 
year.
  Our first obligation ought to be to ensure our Native American 
population receives the care we have promised them. I personally have 
gone throughout Indian reservations in Arizona. We have more than any 
other State. I made a tour of the Navajo reservations, including a lot 
of the health care clinics and facilities that try to take care of 
folks under the Indian Health Service. None has enough money to do what 
they are supposed to. They are understaffed. The people who are there 
are wonderful, dedicated health care providers. They are doing their 
best. But you ask any of the Native Americans whether they believe they 
are getting the care they are supposed to get under the program, and 
the answer is uniformly no. They have to wait forever. The care is not 
there when they need it.
  This is the perfect example of rationing of care, what happens when 
you have a government-run system. That is what I fear most of all will 
result from this because we have taken on much more than we can afford.
  The end result of that inevitably is the reduction in the amount of 
care that is provided and the quality of care that is provided.
  I urge my colleagues to think very carefully about what we are 
getting our constituents into. We can start to turn this back by 
supporting the Crapo motion which at least says that folks who are 
middle-class families, who the President promised would not see a tax 
increase, will not see a tax increase under the legislation. That is 
what the Crapo motion would provide, and I certainly hope my colleagues 
support it.

                          ____________________