[Congressional Record (Bound Edition), Volume 158 (2012), Part 3]
[Senate]
[Pages 3337-3340]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              HEALTH CARE

  Mr. SESSIONS. Mr. President, it has not been that long since the 
President's health care proposal has been passed. If we recall, it was 
passed on Christmas Eve, after a long battle. We were told: Don't worry 
what is in it; we will have to pass it first to find out what is in it. 
I remember Senator Brown was running in the State of Massachusetts, a 
liberal State. He said, If you elect me--and he was running in the 
special election--I will vote against it and provide the vote that 
kills it. But the matter was delayed--his appointment and confirmation, 
after he won his election. It was put off and the interim Senator cast 
a vote for the bill and it passed by a single vote and the result was 
60 to 40. I think it was a dangerous step for America.
  I am the ranking Republican on the Budget Committee and the Senator 
from Wisconsin is a member of that committee. We have serious concerns 
about what is in this bill now that we are beginning to read it and 
beginning to apply it and see what might happen. Senator Johnson is a 
successful businessman who ran for the Senate and joined us just a 
little over 1 year ago. He came here to do something. I have been 
exceedingly impressed with his approach to business. He had looked at 
these numbers and challenged the Secretary of Health and Human 
Services, Secretary Sebelius, on some numbers last week. The situation 
was quite troubling.
  Maybe Senator Johnson can tell us about his concern and what he 
raised last week--the economic impact of what happened with jobs, the 
American economy, and the debt of our country. Maybe we can begin our 
discussion with where he is coming from and what he observed from his 
exchange last week.
  Mr. JOHNSON of Wisconsin. First of all, I thank the Senator for his 
kind comments. He mentioned that Speaker Pelosi famously stated we 
needed to pass this bill in order to figure out what is in it. I know 
the Senator from Alabama and I are dedicated to making sure the Obama 
administration doesn't make sure this law is fully implemented before 
we understand the true cost of the bill. We simply cannot afford to 
have the American people and Members of Congress not understand the 
true cost of the health care law.
  I remind everybody that, back in 1965, when they passed the Medicare 
bill, first of all, the entire bill was less than 300 pages. That is 
interesting. The provision that applied to Medicare alone was about 124 
pages. That compares, of course, with the 2,600- or 2,700-page bill 
that the Patient Protection and Affordable Care Act was. There are 
10,000 pages of regulations just to try to implement this bill.
  When they passed Medicare, they estimated it out 25 years and said 
that in 1990, Medicare would cost $12 billion. In fact, in 1990, 
Medicare cost $110 billion, which is more than nine times the original 
cost estimate.
  I am new here, but I have been watching this town pretty carefully 
over the last few decades. I don't believe Washington has gotten any 
better at projecting and estimating figures--particularly on new 
entitlements that people want around here. They always tend to 
underestimate spending in order to pass legislation, particularly a 
bill such as the health care bill, which was done in partisan fashion, 
without any kind of support and input from our side.
  The point of my question to Secretary Sebelius last week was to try 
to lay out the broken promises that are occurring, when we have only 
begun to implement the law. The first broken promise I asked her about 
was the very famous guarantee of President Obama, who said: If you pass 
this health care law, every single family in America will see their 
annual insurance premium go down by $2,500 by the end of his first 
term. The Kaiser Family Foundation has already conducted a study and 
has said that, on average, premiums have gone up about $2,200 per year. 
That is a $4,700 difference in the first 3 years of his administration 
or only 2 years after it was originally passed.
  Mr. SESSIONS. The Senator has been in the real world, having to make 
a payroll and manage a company. If he, as a CEO, made a representation 
that this was going to reduce the cost of insurance for your employees 
by $2,500, and it increases by 2,200, that would be a stunning event, 
would it not? Does it bother the Senator, as a person from the real 
world--and this is the first time he has been in elected office--to 
have people walking around with numbers that are so divergent, 
promising to reduce health care costs, and they actually are driving 
costs up?
  Mr. JOHNSON of Wisconsin. Had I made that guarantee to my 
shareholders and management--and that is basically what the President 
did; he made that guarantee to the shareholders of America--I would not 
want to face the appropriations committee meeting, where I would have 
to explain that away. Secretary Sebelius was in a very unenviable 
position to have to explain how the President promised a $2,500 
reduction and there was an increase.
  Mr. SESSIONS. The Senator is right. I was here. There was a promise 
made to achieve passage of the bill. A lot of Americans didn't believe 
these promises and thought they were inflated to begin with, and this 
promise--a fundamental promise--has already been proven to be wildly 
inaccurate. And thank you for raising that.
  Mr. JOHNSON of Wisconsin. Of course, that is only the first promise. 
I have a couple more.
  The administration also famously said this health care law would not 
add one dime to the deficit. In fact, the original projections were 
that it would save $143 billion in the first 10 years. Well, 
thankfully, the administration has recognized that the CLASS Act was, 
as Budget Committee chairman Kent Conrad said, a Ponzi scheme. It was 
simply not financially workable. So they are not implementing it. 
Because they are not implementing it, they are not going to get $86 
billion worth of revenue, so that will eat away at that $143 billion of 
deficit reduction.
  Of course, a couple of weeks ago when President Obama presented his 
fiscal year 2013 budget, included in that budget was a $111 billion 
request--or I guess cost estimate--on the mandatory spending of the 
health care exchanges. If you add the $111 billion to the $86 billion, 
that gives you $197 billion of reduced deficit reduction, if that makes 
sense.
  So bottom line here is I think that is broken promise No. 2. I do not 
believe that in the first 10 years, this thing will actually reduce the 
deficit. And it is far worse than that. These are the small numbers. 
This is just the tip of the iceberg in terms of the revisions that will 
be occurring when we actually start finding out what the true cost of 
the health care law is.
  Mr. SESSIONS. Well, the promise was that--and it was repeated here, 
and the President went on national TV, and I believe he said it at the 
State of the Union--this bill would not add one dime to the deficit. If 
you drop out the $80 or so billion--and he estimated that his plan, if 
passed, would actually create $143 billion in surplus, in extra revenue 
for the Treasury; it wouldn't cost anything, it would create more 
money. So you lose $80 or so billion because the CLASS Act has proven 
to be the Ponzi scheme Senator Conrad said it would be, and we just saw 
in the President's budget a request for $111 billion more for the 
exchanges. Well, that already wipes out entirely, does it not, the 
promise that it wouldn't add to the deficit? Even before the bill is 
implemented, the projections are that it would cost money rather than 
make money for the Treasury. Is that the Senator's analysis so far?

[[Page 3338]]


  Mr. JOHNSON of Wisconsin. Exactly. That is broken promise No. 2.
  Of course, broken promise No. 3 is also--very famously this President 
said: If you like your health care plan, you will be able to keep your 
health care plan, period. No one will take it away, no matter what.
  There are a couple of pieces of evidence that prove that is a broken 
promise. First of all, the CBO, in its initial cost estimate of the 
health care law, estimated that 1 million people would lose their 
employer-sponsored care and be put in the exchanges. By the way, that 
is a gross underestimate, and we will talk about that a little later. 
But also the Department of HHS has granted 1,200 to 1,700 waivers from 
basically some of the requirements of the health care law. That 
indicates that were it not for those waivers--basically employers 
saying: Listen, we need some relief here--my concern would be, and I 
think this is probably pretty true, those employers would be forced to 
drop coverage. And those waivers cover about 4 million Americans.
  But let me describe a little bit why I believe the 1 million-person 
estimate is so understated. There have been surveys of employers 
conducted in the last year that indicate that employers, when they take 
a look at the whole cost equation of the health care law, 30 to 50 
percent, in one survey conducted by McKinsey & Company, of employers, 
when asked, plan on dropping their health care coverage shortly after 
implementation.
  If that were to happen--180 million Americans get their care through 
an employer-sponsored plan. If 50 percent drop coverage, that could 
mean 90 million Americans--not 1 million but 90 million Americans--
could lose their employer-sponsored care and then get put in the 
exchanges. We are trying to work with the CBO to find out exactly what 
that would cost, but in their initial estimate, they estimated that it 
would be about a $7,000 average subsidy per person in the exchange.
  If you deduct for the $2,000 penalty and the deductibility of the 
health care cost, that subsidy could range anywhere from a $4,000 to 
$5,000 cost to the government times 90 million. Instead of $95 billion 
a year, the health care law could cost us close to $\1/2\ trillion if 
50 percent of the employers drop their coverage.
  This is incredibly scary. And my colleague is fully aware, because he 
has been a real leader in terms of our debt and deficit, as Admiral 
Mullen has said, the greatest threat to our national security is our 
debt and deficit. We can't afford to increase our deficit on an annual 
basis by close to $\1/2\ trillion. If everybody were to lose their 
coverage--which, by the way, is exactly what I think this plan was 
designed to do: lead to a single-payer system, which is what I believe 
President Obama really wanted--that would cost us close to $1 trillion 
a year. That represents a deficit risk that will absolutely ensure the 
final bankruptcy of this Nation.
  Mr. SESSIONS. Well, Senator Johnson has been talking about this issue 
for some time, and it looks as though reports are coming along to 
validate his concerns. But the administration estimated that only 1 
million would go into the exchanges, and these are the areas where, if 
you don't have employer-based health care, the government will 
subsidize your health care program for you, and it costs the Treasury 
money. This is how we get in financial trouble, when we make bad 
estimates.
  The Senator thinks the numbers that go into the exchanges could dwarf 
1 million. How many could it be, based on the reports the Senator has 
seen?
  Mr. JOHNSON of Wisconsin. Well, I worked with former CBO Director 
Douglas Holtz-Eakin in trying to look at the numbers that are 
presented, and we don't have enough. We don't have enough information, 
which is why I am grateful for the fact that Director Elmendorf 
recognized that there is some credible evidence to cause the CBO to 
reassess that estimate of 1 million people. So they are working through 
those numbers right now. Hopefully, they will give us a very full 
accounting of that in the next couple of weeks. But the work I did with 
Douglas Holtz-Eakin showed that if 90 million get put in those 
exchanges, it could cost over $400 billion a year.
  Mr. SESSIONS. That is astounding.
  Mr. JOHNSON of Wisconsin. That is astounding.
  Mr. SESSIONS. Now, for example, $400 billion a year over a 10-year 
window would be $4 trillion. If the Budget Control Act that we worked 
on so hard last summer, which the President is already undermining, 
were to take place, it would only reduce spending over 10 years by $2 
trillion. And this would be an unexpected $5 trillion, $4 trillion 
added on top of that, would it not?
  Mr. JOHNSON of Wisconsin. Exactly.
  Mr. SESSIONS. And it is not baked into the numbers now. We are not 
assuming it is going to be $4 trillion or $5 trillion more under 
Obamacare, we are assuming only 1, I guess.
  Mr. JOHNSON of Wisconsin. And, unfortunately, we are not even owning 
up to the current deficit projections. We are not seriously addressing 
that. So nobody really wants to take a look at the danger inherent in 
this. Of course, the administration doesn't want to talk about it or 
admit to it because they want to go full speed ahead to implement it so 
we will not be able to reverse it. That is the main point.
  It is time to put the brakes on the implementation of the health care 
law before it bankrupts this Nation. We simply can't afford to fully 
implement it to find out what the true cost is. It will be disastrous 
for our deficit and debt.
  Mr. SESSIONS. Well, is it too late? Is this a fait accompli, this 
health care law that was passed? Can we not reverse it or is it, in the 
Senator's opinion, practical at this point for us to pull back from 
this path?
  Mr. JOHNSON of Wisconsin. It is essential that we pull back, and it 
is essential that we put the brakes on this. I guess we can all keep 
our fingers crossed and hope the Supreme Court rules the individual 
mandate unconstitutional, and there is no severability clause, so the 
entire law would be repealed, so we can then actually fix the problems 
in the health care system with patient-centered, free market-based 
reforms. That is the way to really address this.
  Mr. SESSIONS. Well, the Senator raised these issues with Secretary 
Sebelius last week in the committee, and the exchange has been on the 
TV and on the Web and has become a bit of a sensation, really. People 
have been looking at it, and it has been very troubling.
  Would the Senator tell us what troubles him about Secretary 
Sebelius's answers--or her lack of them--and what you think we should 
do next?
  Mr. JOHNSON of Wisconsin. Again, I am an accountant. I have been in 
hundreds of budget meetings, and when you are presenting your budget to 
a budget committee, you are armed with the information and you are 
ready to answer questions.
  I was surprised that the Secretary was unable to answer the 
questions, and particularly when I mentioned the waivers, she seemed to 
have no idea what I was talking about. It is her agency, her department 
that is actually granting those waivers. So that troubles me.
  So I appreciate the fact that the Senator has and we have sent a 
letter to Budget Chairman Conrad requesting, to be fair to Secretary 
Sebelius, to give her a chance to be fully prepared to come before us 
and to explain what is this $111 billion in additional requested funds 
for the exchanges. And I would like to really dig down and talk about 
this 1 million-person estimate and what is going to be the effect if 
the administration is wrong, if CBO has been wrong in the previous 
estimate and the McKenzie study is right and half the people very 
quickly after implementation get dropped from their employer coverage 
and put in the exchanges. What effect is that going to have on our 
budget?
  I would love to give and I think it is appropriate to give Secretary 
Sebelius the opportunity to come before our Budget Committee and have a 
fair exchange in terms of her explanation for those parts of her 
budget.

[[Page 3339]]


  Mr. SESSIONS. Well, a $111 billion error is a big deal. You think 
about it. We brought in $2,200 billion, and this is $100 billion--about 
5 percent of the entire estimated revenue we had in the government last 
year. To miss that on one part of one bill is very troubling to me. We 
are fighting every day, wrestling with a highway bill, and we came up 
$2 billion short over 2 years. And the whole bill is held up, votes on 
it, points of order raised on it, and here, blithely, into the 
President's budget comes another $111 billion. I am sure there can be 
some explanation for it, but I really do think the American people, 
don't you, are owed a prepared Secretary before the Budget Committee 
who can lay out explanations for what this is so we will know how much 
over cost we already are on this plan.
  Mr. JOHNSON of Wisconsin. It is $100 billion here, $100 billion 
there, and it starts adding up to real money, doesn't it.
  And so people don't think these 90 million people getting dropped 
from their employer coverage is a fantasy, it is not. It is realistic. 
I bought health care for the last 31 years, and the decision an 
employer is going to make is going to be easy. It is not going to be a 
complex management decision. Because of the health care law, an 
employer is going to be faced with saying: OK, I can pay $15,000 for 
family coverage or I can pay the $2,000 penalty. And because of the 
health care subsidies, they are not exposing their employees to 
financial risk, they are making them eligible for huge subsidies. If a 
household earns $64,000, they will be eligible for a $10,000 subsidy 
through those exchanges.
  Now, I know that probably sounds pretty good, but the problem is, 
when we are already running $1.3 trillion a year deficits, we can't 
afford to add another $\1/2\ trillion per year to those deficits, if 
that were to happen. We simply can't afford it.
  Mr. SESSIONS. So you are an employer. You have employees, and you 
have been helping them, you have been providing health coverage, and 
you realize, well, I can cancel my employer contributions, let the 
employee go to the exchanges, and they will be subsidized by the 
American taxpayer.
  Mr. JOHNSON of Wisconsin. That is essentially it.
  Mr. SESSIONS. Where is the money coming from that will provide the 
extra money they will need to get full coverage?
  Mr. JOHNSON of Wisconsin. And if you don't drop coverage, you are 
denying the people who work with you the chance of taking advantage of 
a $10,000 subsidy.
  We have created an incentive in this health care law for employers to 
drop coverage and a high-level subsidy to get coverage for the people 
who work with them. We have created that incentive, and when government 
creates incentives, when government dangles a huge subsidy in front of 
people, we know the history of how that works--people take advantage of 
those subsidies. And that is my concern.
  Mr. SESSIONS. What about a new business--some small business starts 
up, and they are thinking about whether they are going to provide 
health care for their employees, and they have the option of the 
exchanges. Do you think a new business would be even more likely to not 
provide coverage and let the employee go to the subsidized exchange?
  Mr. JOHNSON of Wisconsin. Sure. Because they know their cost is going 
to be $2,000 per employee.
  The Senator was telling me a story earlier about some employers in 
Alabama that because it is a low-margin business, they simply can't 
afford to offer health care. The result of the health care law--why 
doesn't the Senator tell the story.
  Mr. SESSIONS. I had a number of people in a meeting I was at explain 
the realities of it.
  They told us the whole fear of regulation and the health care bill 
and the revenue that is going to be extracted from them to pay for it 
would result in lesser employees, making it impossible for them to 
provide the coverage. One told me they could lose as many as 70 
employees. I remember that figure.
  Mr. JOHNSON of Wisconsin. Again, this law will cost jobs. It is going 
to blow a hole in our deficit, and we haven't even talked about the 
quality aspect; how it is going to harm the health care system, how it 
will lead to rationing, and the type of medical motivation.
  The Senator heard the story about my daughter and these marvelous 
surgeons. When my daughter was first born with a serious congenital 
heart defect, one of these wonderful human beings came in at 1:30 in 
the morning and saved her life. Then, 8 months later, when her heart 
was the size of a plum, they reconstructed the upper chamber of her 
heart so that now her heart operates backward.
  We are going to limit those types of innovations that saved my 
daughter's life. We are not going to have that type of advancement in 
medicine if the government takes over control of our health care 
system.
  So the effect on our budget--the uncertainty in terms of how it is 
going to destroy and explode our deficits versus the harm it is going 
to cause the quality of care--leads to rationing, lower innovation. 
When it is all put together, I think the greatest single priority we 
have to have moving forward is we have to make sure the brakes are put 
on this health care law, that it is repealed, and, again, replaced with 
patient-centered, free market-based reforms.
  Mr. SESSIONS. It is not fully implemented yet. There are a lot of 
opportunities for us to get off this train before a disaster occurs. I 
truly believe it is not too late for us to alter the course.
  I think the American people have never been happy with it. They have 
been told they wouldn't have to give up their health care. They were 
told it was going to bring down the cost curve and reduce the costs, 
and they were told it was going to pay for itself; there would be more 
money coming in than the bill would cost.
  Would the Senator say all three of those promises have now already 
been proven false?
  Mr. JOHNSON of Wisconsin. Absolutely. Look at the name of it, the 
Patient Protection and Affordable Care Act. It is not going to protect 
patients.
  If we are going to lower the quality of care, if it is going to 
result in rationing, if it limits innovation, how does that protect 
patients?
  The affordable care act, the Senator just ticked off the three 
reasons it is not going to be affordable: It is going to drive up 
costs. It is not bending the cost curve down. It is a fiction. The 
health care law is a fiction. I am so appreciative of the Senator's 
efforts at again making sure that, before this bill is fully 
implemented--we both are dedicated to making sure the American people 
fully understand the full, true cost of this health care law both on 
quality and the effect on our budget.
  Mr. SESSIONS. I will add one more thought to the costs, and I have 
looked at this very carefully.
  On December 23, the night before the bill passed, I got a letter back 
from the Director of the Congressional Budget Office, who also had 
stated it would create a surplus in the bill of $143 billion based on 
conventional accounting procedures. I asked him: Were they not double 
counting the money, about $400 billion? Were they not double counting 
it, counting it as income to Medicare and counting it as money 
available to fund the bill here, President Obama's ObamaCare? Weren't 
they using the money twice?
  Think about that. Here we are on the eve of a vote, December 23, the 
vote is tomorrow morning, December 24, and we are not agreed on whether 
the money is being double counted. He wrote back and said it is being 
double counted, ``although the conventions of accounting might suggest 
otherwise.''
  The way they scored this bill was carefully done by experts to get 
the score they got, that it would make a surplus of $140 billion. But 
the money was Medicare money. They raised taxes for Medicare. They cut 
costs for Medicare. It created some money in Medicare, but the money 
was borrowed by the U.S. Treasury and spent on this new program. The 
money is owed to the Medicare trustees, who are trustees

[[Page 3340]]

by law. They are holding debt instruments from the United States. But 
because it is an internal debt, it doesn't score. That may seem 
complicated, but it is not. Trust me, they borrowed this money. Sooner 
or later, when Medicare is going into deep financial distress, they 
will call their bonds from the Treasury and the Treasury is going to 
have to pay it, and they are going to borrow the money on the open 
market is what they are going to do so they can pay the Medicare 
trustees the money they borrowed from them. This is not a good way to 
do business. That is just one of the additional problems we have with 
this.
  But, I thank Senator Johnson for focusing on all these issues but 
particularly for raising the cost of the exchanges. Because that, by 
any estimate--wouldn't the Senator agree--is a dangerous number. It 
could surge above the number we are at. Does the Senator think most any 
person, even if they thought it would be 1 million people, would have 
to admit it could be 5, 10 or 20 million people? Nobody knows for sure.
  Mr. JOHNSON of Wisconsin. Exactly. That is why I am so thankful that 
CBO Director Elmendorf understands there is some pretty credible 
evidence to have the CBO revisit that estimate.
  I spoke with him last week. It looks like they are working hard to 
provide us that information. I am looking forward to seeing that and 
seeing what their revised estimate is for the number of people losing 
their coverage, but even more important, to figure out what that per 
person cost is.
  Maybe we will not agree. He might do a very economic analysis. 
Certainly, somebody such as myself who actually bought health care 
understands the mindset and the decision of an employer. But even if we 
disagree on the number of people, if we have that total dollar amount 
of cost per person in that exchange, we will be able to show that to 
the American people. So if he comes up with X and I say, no, it is X 
plus 30, 40, 50 million people, then at least the American people have 
that information, and they can judge for themselves what they think the 
realistic estimate is for people losing their coverage and getting 
their insurance through the subsidized exchanges. That information is 
what the American people deserve, and that is why I am so appreciative 
of the Senator's efforts. I know he is going to be, just with me, 
making sure that, again, we know what the true cost of this health care 
law is before we implement it.
  Mr. SESSIONS. We have to know that. We have a responsibility, as 
representatives of the people, to understand are we talking about 
another $100 billion in cost over just 1 year's time that we weren't 
expecting.
  I believe the Budget Committee is a good forum to have that. The 
Senator and I serve on that committee, and I hope Senator Conrad can 
agree and would agree to give Secretary Sebelius an opportunity to 
state her view of the situation.
  I have to say, I am more and more convinced that we cannot afford 
this health care bill. We cannot afford it. We don't have the money. We 
don't have the money. I think it will damage health care, and we have 
had a lot of debate and experts tell us that, and it will reduce the 
quality of care in America. But what I am saying to the Senator is, we 
can't afford it, and it threatens the financial viability of our 
future. We need to save Medicare and Social Security, the programs we 
have. It would be a terrible tragedy if we start off on another 
program. As the Senator talked about Medicare 30 years ago, 40 years 
ago, it surged way beyond any estimate they would ever have expected in 
terms of costs.
  If we start on another program, I don't see how this country can 
sustain it. The entitlements we have today are now taking up about 60 
percent of the entire budget of America: Social Security, Medicare, 
Medicaid. Over 50 percent, almost 60 percent of our entire spending 
goes for those three programs. To start another massive new program, 
when those are all unsound financially and in crisis and need to be 
fixed, is the height of foolishness, in my opinion.
  I hope we can have a good hearing. I thank the Senator for his 
leadership; he is a great addition to the Budget Committee. I thank him 
for spending hours digging into these numbers, bringing his business 
and accounting skills to bear, and letting our lawyer bunch benefit 
from somebody who can actually add and subtract.
  Mr. JOHNSON of Wisconsin. I thank the Senator for his leadership.
  Mr. SESSIONS. Mr. President, I yield the floor and I suggest the 
absence of a quorum.
  The PRESIDING OFFICER (Mr. Blumenthal). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. KYL. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________