[Congressional Record (Bound Edition), Volume 158 (2012), Part 7]
[Senate]
[Pages 9734-9747]
[From the U.S. Government Publishing Office, www.gpo.gov]




    FLOOD INSURANCE REFORM AND MODERNIZATION ACT--MOTION TO PROCEED

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of the motion to proceed to S. 1940, 
which the clerk will report by title.
  The legislative clerk read as follows:

       Motion to proceed to Calendar No. 250, S. 1940, a bill to 
     amend the National Flood Insurance Act of 1968, to restore 
     the financial solvency of the flood insurance fund, and for 
     other purposes.

  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.


                              The Economy

  Mr. GRASSLEY. Mr. President, since the victory of the Socialist 
candidate for the President of France, opponents of fiscal 
responsibility have found renewed vigor for their pro-spending 
ideology--more stimulus, as we might call it here in this country. 
There is interest in this country also in more fiscal stimulus.
  The new French President talked about choosing growth over austerity. 
Many liberal pundits and politicians on this side of the Atlantic have 
now begun to echo this call. When you put it that way, it barely sounds 
like a choice at all. The term ``austerity'' sounds so severe, but 
almost everybody agrees that economic growth is good.
  Just what is this austerity all about? In Europe, ``austerity'' is 
often used to describe an attempt to reduce budget deficits by reining 
in unsustainable spending. In this country, we more often talk about 
fiscal responsibility. For Europeans who have grown accustomed to 
generous social benefits, even modest reforms to government programs 
are apparently cause to take to the streets and demonstrate. But for 
the millions of Americans who still believe in limited government and 
who do not feel entitled to programs or benefits paid for by the 
earnings of others, there is nothing austere about government spending 
within its means.
  So then what about the other aspect of it--growth? The implication of 
the supposed choice between growth and austerity is that we must accept 
irresponsible levels of spending in order to have that economic growth. 
Obviously this is absurd. The politically convenient economic theory 
was summed up by Margaret Thatcher as, ``The more you spend, the richer 
you get.'' That doesn't meet the commonsense test in the Midwest of 
America. It was the rationale behind President Obama's massive $800 
billion stimulus bill. The bill looked suspiciously like a grab bag of 
pent-up Democratic spending priorities, but we were told that all of 
this spending was necessary to keep unemployment below 8 percent. Of 
course, as we all know, unemployment soon soared well above 8 percent 
and has never dipped below 8 percent now more than 3 years later.
  I would say to all of those across the Atlantic in Europe calling for 
new stimulus spending: We tried it, and it didn't work. Not only didn't 
it work but it made things worse. All of that government spending 
crowded out private sector activity that would have helped the recovery 
and saddled our economy and our children with even more debt. 
Conversely, reining in government spending will unleash the power of 
free enterprise to create wealth and grow our economy in ways no 
government central planner can ever accomplish.
  Despite the clear results of the most recent American experience with 
stimulus spending, liberal pundits are now blaming Europe's current 
economic troubles on efforts to reduce government spending. They say 
that savage cuts by pro-austerity governments in countries such as 
Britain, France, and Spain have actually damaged their economies. So 
just how deep did these countries of Europe actually cut? Spain 
increased spending after the recession started, then implemented some 
modest cuts but is still spending more than it did before the 
recession. Britain and France have continued to increase spending. So 
much for savage spending cuts. It defies common sense, but, as you 
know, in this town smaller increases in spending than previously 
planned can qualify somehow as a cut in spending. However, to most 
Americans, cutting spending actually means spending less than you were 
the year before. The fact that there have been no serious spending cuts 
in these supposedly pro-austerity countries is enough to dismiss the 
accusations that spending cuts are the cause of Europe's current 
troubles.
  But there is another part of the story that is too often ignored: 
Governments that talk about the need to reduce deficits but are too 
timid to enact necessary spending cuts invariably turn to tax 
increases. For instance, since the recession started, Britain has 
raised the top marginal income tax rate as well as increased the 
capital gains tax, the national insurance tax, and the value-added tax. 
Spain has enacted hikes in personal income tax and property taxes and 
seems to be planning even more taxes.
  This year the Spanish Government is looking to address its deficit 
with a $19.2 billion package of spending reductions paired with another 
$16 billion worth of tax increases. Of course, to us here in the United 
States, that sounds a lot like what Democrats have been calling a 
balanced approach. And so it is--just like giving a patient an equal 
dose of medicine and poison would be a balanced approach. However, 
across Europe there has been a lot more emphasis on the poison of tax 
increases than on the medicine of spending cuts. In fact, while 
government spending across the entire European Union fell by just 2.6 
billion euros between 2010 and 2011, taxes rose by a staggering 235 
billion euros.
  So while critics of austerity are flatout wrong to blame the largely 
mythical spending cuts for Europe's economic troubles, they may have 
stumbled onto something. To the extent that austerity really means big 
tax increases rather than serious spending cuts, I think it identifies 
a big part of Europe's fiscal and economic problems.
  These facts notwithstanding, if I couldn't point to an example where 
economic growth resulted from spending restraint, my arguments would 
ring hollow. I would sound like those radical intellectuals who still 
refuse to accept that Marxism has been totally discredited both morally 
and economically by claiming that it has never truly been tried. 
However, what I am talking about has been tried. There are plenty of 
examples of where bold leadership to dramatically rein in government 
spending has resulted in economic growth. There is actually a

[[Page 9735]]

prime example right in Europe and in the euro area--Estonia.
  In response to the 2008 economic crisis, Estonia's free enterprise-
oriented government focused on real spending cuts, including major 
structural reforms. Estonia cut private sector wages, raised the 
pension age, and reformed health benefits. When it comes to taxes, 
Estonia already had a low flat tax and didn't raise rates. While there 
was an increase in the value-added tax, the overwhelming emphasis was 
on spending cuts. As a result, the Estonian economy grew at 7.6 percent 
last year. And it happens that Estonia is the only country in the 
eurozone with an actual budget surplus, and the country has a national 
debt that is only 6 percent of GDP. Can you imagine that, a debt of 
only 6 percent of GDP?
  Moreover, Estonia had an especially deep hole to climb out of. The 
Estonian economy was devastated by the global financial crisis. It 
contracted by 18 percent, which is more than Greece. Nevertheless, 
Estonia's economy is well on its way back to prerecession levels.
  I should add that in response to the spending cuts, Estonians didn't 
riot in the streets. Instead, they reelected their government.
  Also, while Estonia is the most impressive example, a similar story 
also holds true for the other Baltic countries of Latvia and Lithuania. 
Perhaps their unhappy experience of Soviet domination has made them 
extra skeptical of big government solutions to problems. It is possible 
that the unique history of the Baltic countries makes it easier for 
them to break the spending addiction, but that doesn't mean it can't be 
done here. In fact, I will give you an example that is much closer to 
home--Canada.
  In the 1990s Canada was facing the same problem the United States is 
now. It suffered a recession and had a looming debt crisis. The 
Canadian Government's response was to dramatically cut spending. Again, 
I am not talking about slowing the rate of growth but actual spending 
cuts. In just 2 years, starting in 1995, total noninterest spending 
fell 10 percent. Canadian federal spending as a share of GDP dropped 
from 22 percent in 1995 to 15 percent 11 years later. Canada's federal 
debt was at 68 percent of GDP in 1995 and is down to just 34 percent 
today. Now a lesson for America: Compare that to our national debt, 
which is more than 70 percent of GDP. Like Estonia, the overwhelming 
emphasis in Canada was on spending cuts rather than tax increases.
  Moreover, these cuts included structural reforms. Canada's Government 
fixed its version of Social Security, which is the third rail of 
American politics, as we say here. Unlike Social Security, the Canadian 
pension plan is solvent for the foreseeable future. What is really 
interesting is that these reforms were not implemented by some 
rightwing ideologues; these reforms were all implemented by the 
Canadian Liberal Party, which is a center-left party like America's 
Democrats.
  However, when President Bush suggested fixing Social Security upon 
his reelection, the issue was relentlessly demagogued by Democrats in 
Congress. More recently, when Paul Ryan unveiled a plan to save 
Medicare, rather than present alternative ideas, liberal groups 
depicted him in political advertisements pushing grandmother off a 
cliff.
  If our Democrats had shown the same leadership the Canadian Liberals 
did, we would be in a lot better economic shape right now. Instead, 
what we get from the other side of the aisle are demands for more 
stimulus spending and head-in-the-sand denial about the impending 
bankruptcy of Medicare and Social Security.
  There are a lot of other examples where low taxes and spending 
restraint have led an economic recovery after a downturn. In fact, a 
2009 paper by two Harvard economists, Alberto Alesina and Silvia 
Ardagna, reviewed 107 examples of fiscal adjustments in industrialized 
countries between 1970 and the year 2007. They found that, 
statistically, tax cuts are more likely to increase growth than 
spending. They also found that spending cuts without tax increases are 
more likely to reduce deficits and debt than increased taxes. The 
historical record is clear. We know what path leads to economic growth 
and prosperity. However, that is not an easy path to follow.
  Unlike the ``have your cake and eat it too'' philosophy that says 
more government spending will somehow make us all richer, the real road 
to recovery requires real leadership and less spending.
  Earlier in my comments I mentioned a statement by Margaret Thatcher's 
contempt for stimulus ideology. When she took office, Britain was in 
deep debt and known as ``the sick man of Europe.'' In fact, Britain had 
been forced to go to the IMF for a bailout and was regularly rocked by 
massive strikes. In many ways it was the Greece of the 1970s. When 
Thatcher began making the difficult decisions necessary to rescue the 
British economy, many people, including some of her own party, pleaded 
for her to return to the big spending policies of previous British 
Governments. Her response is applicable to our country today as it was 
to Britain back then. I wish to quote Margaret Thatcher:

       If spending money like water was the answer to our 
     country's problems, we would have no problems now. If ever a 
     nation has spent, spent, spent and spent again, ours has. 
     Today that dream is over. All of that money has got us 
     nowhere but it still has to come from somewhere. Those who 
     urge us to relax the squeeze, to spend yet more money 
     indiscriminately in the belief that it will help the 
     unemployed and the small businessman, are not being kind or 
     compassionate or caring. They are not the friends of the 
     unemployed or the small business. They are asking us to do 
     again the very thing that caused the problem in the first 
     place.

  I leave with this proposition. Can Congress learn from the 
experiences of Estonia, Canada, and Britain's Thatcher? If we can, we 
can turn this U.S. economy around--and the economy and jobs are the 
issue of this Presidential campaign season.
  I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Ms. MIKULSKI. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. MIKULSKI. What is the pending business?
  The ACTING PRESIDENT pro tempore. The motion to proceed to S. 1940.
  Ms. MIKULSKI. Mr. President, I rise in support of voting for cloture 
on the bill and wish to speak for as much time as I may consume.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered. The Senator is recognized.


         Food and Drug Administration Safety and Innovation Act

  Ms. MIKULSKI. Mr. President, we have just exchanged some 
parliamentary lingo to essentially say we are going to vote shortly to 
see if we can pass the Food and Drug Administration Safety and 
Innovation Act, and do it without a filibuster. I hope we can vote for 
cloture--not to muzzle, not to have a gag rule, but so we can move 
expeditiously on this bill.
  Every single Member here should be proud of what we have accomplished 
in this FDA Safety and Innovation Act. We have accomplished three major 
objectives: No. 1, if the legislation is passed--and it is a conference 
agreement between the House and the Senate--we will be able to move 
pharmaceuticals, biotech products, and medical devices into clinical 
practice faster while maintaining our ethical standards around public 
safety.
  No. 2, we can demonstrate we can work together and we can govern. 
This is the result of the Senate working on both sides of the aisle. 
Now, with the House, through the conference report, we show we can work 
between the Senate and the House.
  In this time of prickly politics and political posturing when more 
gets said than done, we can show we cannot only pass legislation but 
legislation that makes a difference in people's lives. We will also 
show we can do it in a way that we will not only have a regulatory 
framework but something in which the businesses cooperated so we will 
have regulation without strangulation. We

[[Page 9736]]

will have regulation that acts in the interest of public safety but 
does not stifle, shackle, or impede good business practices. Wow. Isn't 
this what we have been talking about?
  I am very proud of having been a member of the Health, Education, 
Labor, and Pensions Committee that worked on this bill. I am also very 
proud of the fact that FDA is in my State. In a nutshell, we are 
passing something called PDUFA and other UFAs. PDUFA stands for the 
Prescription Drug User Fee Act. There will be others that we will talk 
about which relate to bio user fees and medical device user fees and 
generics.
  This bill was originally enacted in 1992, and the reason for that was 
at that time there was an unduly long wait for patients to have access 
to new medicines and new medical devices. It often took close to 3 
years to even review a drug application. So Congress went to work with 
then-President Bill Clinton to say where the pharmacy could agree that, 
first of all, they would pay user fees to support FDA's drug review 
program. It is a true public-private partnership. When we look at the 
funding for FDA, the people who make pharmaceuticals, biotech, and 
medical devices pay 60 percent of the FDA budget. That is $712 million. 
The remainder comes from Federal appropriations--40 percent, which is 
$473 million. So there is a partnership between those businesses that 
profit--and we want them to do so, without profiteering--and, at the 
same time, government pays its share.
  Since 1992, this legislation has been an enormous success. More than 
1,500 new medicines have been approved, including treatments for 
cancer, infectious disease, and cardiovascular disease. It has 
decreased review times from more than 3 years to 1 year and a few 
months now.
  In order to make sure we had the right perspective, we not only held 
excellent hearings in the Senate, but I went out around my own State. I 
am so proud of my State. We are the home of life sciences. We have NIH 
there, which does incredible basic research. We actually have FDA, 
which reviews food safety and drug safety. At the same time, we are the 
home to a robust group of biotech companies. I wanted to listen to 
those biotech companies. When I went out, I said to them: Tell me how 
your government is helping you and tell me how your government is 
impeding you. Tell me where you want your government to get out of the 
way and where do you need a more muscular government. Well, we heard 
quite a bit from them. The first thing they told me is they need a Food 
and Drug Administration because when they are approved for public 
safety and efficacy in the United States of America, they can sell 
their products anywhere in the world. It often means countries--small 
countries, countries of modest means with limited GDP that could never 
afford an FDA--know that if the United States of America says it is OK 
for their citizens, any other country in the world knows it is OK for 
theirs. So it is very good to be able to export these products with 
confidence and reliability. This is fantastic, in their minds.
  Second, they said they needed more help from FDA not only to expedite 
but they wanted better communication.
  They also needed to be able to incentivize development for those rare 
diseases we often hear about, where there are small markets but big 
investments to achieve in it. They outlined the fact that they needed 
to be viewed not in an adversarial way but a collaborative way. Well, 
thanks to business sitting down with FDA, and business sitting down 
with Members of Congress, we have been able to do exactly that. We have 
improved efficiency, predictability, the regulatory environment, and, 
at the same time, insisting on safety and efficacy.
  This is going to be great for patients. Millions of Americans rely on 
drugs and biologics and on medical devices. If we are going to improve 
health care and rein in the cost of health care, we have to use drugs, 
biotech products, and medical devices that improve lives and extend 
lives.
  If we fail to authorize this legislation, we are going to be in big 
trouble. How are we going to be in big trouble? Well, first of all, we 
will have to give notice to FDA that there are going to be layoffs. 
That means we would have to send out notices in July telling 4,000 
people: Look, we know you are the best and the brightest and we want 
you to have integrity as well as regulatory sensibility and a great 
deal of scientific competence, but we couldn't get our act together so 
you are going to be laid off.
  Hello. We want these people out there, helping America be able to 
provide health care in a way that is safe and efficacious.
  Again, as I said, if we don't act, thousands of FDA people will be 
laid off. It is not about government. If those people are laid off, it 
means the review process for every single drug that is now in the 
pipeline will come to a halt. So we are hurting patients, thousands of 
people who need new drugs; new ways of helping them, whether it is for 
that dread C word--cancer--or diabetes, which takes so much of our 
national budget to manage chronic illness.
  What about the breakthroughs on this epidemic of Alzheimer's we have 
or autism? We need all the help we can develop. If America is going to 
continue to be America the exceptional, we have to do an exceptionally 
good job of making sure we produce some of the newest and most reliable 
drugs, biotech, and medical devices.
  This is why I think we have good legislation. Is it perfect? No. But 
is it pretty close to it for what business and government and 
providers--the doctors themselves--say we need? Absolutely.
  I urge my colleagues today, when we vote on this motion to proceed on 
cloture to have in mind--whether a colleague is a Democrat or a 
Republican--that we don't make the perfect the enemy of the good; 
rather, we think of all those people to whom we talk every day. We talk 
to them at townhall meetings and out there with diners, and they say: 
You know, my little boy has leukemia; my mother has breast cancer; my 
dear father who stood up for me is facing the ravages of Alzheimer's. 
We need breakthroughs. We need help, then, for our private sector, so 
it can go global and create jobs in this country and well-being in 
other countries around the world. We have to be able to do it.
  I am also pleased this bill combats drug shortages, improves the 
safety of the drug supply chain, and makes permanent those special 
considerations that require that children's needs are being met with 
both medical devices and prescriptions, either in terms of dosage or 
that a device actually fits them.
  I wanted to come to the floor to lay this out. I am very proud of 
FDA, and I am very proud of the Congress, including Senator Harkin and 
Senator Enzi, who pulled us together. We have the right legislative 
framework. Now let's act and do it in a way we can all be proud of.
  Mr. President, I yield the floor, and I note the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HARKIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Tester.) Without objection, it is so 
ordered.


         Food and Drug Administration Safety and Innovation Act

  Mr. HARKIN. Mr. President, after many months of bipartisan 
negotiation, I have high hopes that the Senate will vote very shortly 
to invoke cloture on the House message to accompany the Food and Drug 
Administration Safety and Innovation Act of 2012.
  I am pleased to report it is the product of excellent bipartisan 
collaboration on the Health, Education, Labor, and Pensions Committee, 
which I chair, and productive conversations with our colleagues in the 
House. The House passed the FDA Safety and Innovation Act unanimously 
last week. Now it is our turn to do our part. The backbone of this 
legislation is the user fee agreement that FDA has negotiated with 
industry.
  I might just add this bill passed this Chamber about 3 weeks ago on a 
vote

[[Page 9737]]

of 96 to 1. So it has strong bipartisan support. A sizeable part of 
FDA's budget comes from user fees that industry agrees to pay to allow 
FDA to more quickly weekly review product applications. We need to 
authorize FDA to implement those agreements if we want to keep FDA 
running at full steam, which is critical to preserving jobs at both the 
agency and in the industry and to ensuring that FDA has the resources 
to get safe medical products to patients quickly.
  I want to be clear. These agreements affect all of us by helping to 
maintain and create jobs in our home States. For example, in my State 
of Iowa, these agreements will support our burgeoning bioscience sector 
which saw employment grow by 4.5 percent between 2007 and 2008. The 
implementation of these agreements will continue to foster biomedical 
innovation and job growth in all of our States.
  The bill before us reauthorizes the prescription drug user fee 
agreement and the medical device user fee agreement, both commonly 
known as PDUFA and MDUFA, which will continue and improve the agency's 
ability to speed market access to prescription drugs and medical 
devices while ensuring patient safety.
  I just might add that, again, uppermost, foremost, first is patient 
safety. That does not mean we cannot do things in a better manner, get 
products more readily available, speed up the process if we have the 
personnel and the equipment to do so. That is why this bill is so 
important. It provides that type of support so we can hire more people 
to make sure we get these products to patients quickly, but to make 
sure they are safe.
  The bill also authorizes a new generic drug user fee agreement which 
is expected to slash review time to one-third of current levels, from 
30 months to 10 months, drastically improving the speed with which 
generic products are made available to patients. The new generic user 
fee agreement will generate significant savings for patients and our 
health care system. In the last decade alone, from 2001 to 2010, the 
use of generic drugs saved the U.S. health care system more than $931 
billion. This agreement will ensure that we continue to see those 
savings and that patients have access to cheaper drugs when they need 
them.
  This bill also authorizes a new biosimilars user fee agreement which 
will further spur innovation by the generic biologic industry. This 
chart shows again some of the savings we will get. The use of generic 
drugs has saved over $931 billion over the last decade, $158 billion 
just in 2010 alone. So we can see the better we are able to get generic 
drugs approved and in the pipeline--again, safely--the better off we 
are all going to be and more money that not only will we save as 
individuals but our entire health care system will save. That is almost 
$1 trillion over the last 10 years.
  These agreements again, as I said, are vital to FDA's ability to do 
its job, vital to the stability of the medical products industry, and 
most importantly to the patients who are the primary beneficiaries of 
this longstanding and valuable collaboration between FDA and the 
industry.
  After months of negotiation, FDA and the industry have crafted win-
win agreements they stand behind. They are doing their job. Now it is 
time for us to do ours.
  It is absolutely imperative that we authorize these user fee 
agreements before they expire. If we do not, FDA will lose 60 percent 
of its drug center budget and 20 percent of its device center budget. 
They will have to lay off nearly 2,000 employees. That is why it is so 
critical for us to do this at this time.
  To be sure, the expiration does not happen until late this summer. 
But the FDA has told us if they do not get this reauthorization done, 
they will have to start sending out pink slips at the beginning of 
July. That is why it is so imperative for us to pass this legislation 
this week and send it to the President for his signature, so they will 
not have to go through that process of sending out pink slips.
  But we can see how important this is. If this were to happen, it 
would have devastating consequences for patients whose health and lives 
depend on new medical treatments. We cannot let that happen. That is 
why for more than a year I worked closely with my colleague, the 
ranking member of the HELP Committee, Senator Enzi, and other members 
of the HELP Committee. Our aim has been to ensure that in addition to 
the user fee agreements, the other provisions in this legislation are 
also the product of consensus bipartisan policymaking.
  We have used bipartisan working groups and an open, transparent 
process to ensure that we had input from our members and the 
stakeholder community at large throughout negotiations on the other 
titles of this bill. This is quite remarkable. We do not see much of it 
in this Congress these days. But we have had great cooperation from all 
members of our committee on both sides of the aisle.
  This legislation has benefited greatly from all of the diverse input: 
from Senators, as I said, on both sides of the aisle, industry 
stakeholders, consumer groups, patient groups, and more recently from 
our colleagues in the House. The FDA Safety and Innovation Act is the 
result of concerted efforts to define our common interests, and these 
interests will directly benefit patients and the U.S. biomedical 
industry.
  As you can see from this chart, the bill modernizes FDA's authority 
in several critical ways: It authorizes key user fee agreements to 
ensure timely approval of medical products. It streamlines the device 
approval process. It modernizes FDA's global drug supply chain 
authority, which is so important. It spurs innovation and incentivizes 
drug development for life-threatening conditions. It reauthorizes and 
improves incentives for pediatric trials. It helps prevent and mitigate 
drug shortages, and it increases FDA's accountability and transparency. 
So it addresses the broad array of critical issues that we face in 
today's global economy.
  It is imperative that our regulatory system keep pace with and adapt 
to technological and scientific advances and that patient protection 
remains strong in this era of dynamic change. Keeping pace with the 
ever-changing biomedical landscape is precisely the aim of the FDA 
Safety and Innovation Act. This bill injects greater transparency into 
the device approval process. It bolsters FDA's ability to help U.S. 
manufacturers create innovative and safe devices, while also enhancing 
FDA's ability to determine how the devices perform in the real world 
and takes appropriate measures to protect patients.
  The bill also reauthorizes and improves incentives for pediatric 
trials. It creates incentives for the development of new antibiotics 
and authorizes new drug and device provisions to help expedite the 
approval of important lifesaving drugs and devices without sacrificing 
safety.
  In addition, the bill also helps address the national crisis 
prescription drug shortages. For the past several years, hospitals 
across the country and in my State of Iowa have experienced an 
increasing number of shortages of life-sustaining prescription drugs. 
These shortages directly threaten the public health by denying patients 
access to medications that are indispensable to their care. This bill 
requires all manufacturers of certain drugs to notify FDA if they 
expect a manufacturing disruption that could lead to a shortage because 
if FDA is aware of a potential shortage early, then the agency can work 
with manufacturers and providers to find other ways to get patients the 
drugs they need. This bill also addresses drug shortages by explicitly 
allowing FDA to expedite drug establishment inspections and application 
reviews when needed to help prevent or mitigate a shortage. It 
establishes an FDA drug shortage task force to develop a strategic plan 
to address drug shortages and to improve communication and outreach to 
stakeholders preparing for drug shortages.
  Another significant advance in the bill is the much needed 
modernization of the FDA's authority to ensure the safety of drug 
products coming into the United States from abroad. This bill, No. 1, 
allows FDA to prioritize inspections of both domestic and foreign

[[Page 9738]]

firms based on the risk they present to patient safety. It requires 
importers to demonstrate that certain high-risk drugs are safe and 
compliant before they can be imported into the United States. It 
requires manufacturer accountability and oversight of the quality and 
compliance of their drug producers and suppliers. It enhances penalties 
for adulterating and counterfeiting drugs. It allows FDA to detain 
noncompliant drugs in U.S. commerce to prevent them from reaching 
patients. It permits FDA to destroy certain illegal drugs at the border 
instead of releasing them back into commerce. It clarifies FDA's 
authority to address criminal conduct that occurs abroad and threatens 
the safety of U.S. consumers.
  An important point to remember about the importance of these safety 
provisions is that weaknesses in our pharmaceutical supply chain not 
only affect the health of American patients, they also affect the 
health of American businesses. U.S. companies that source and 
manufacture drugs in this country should not be placed at a competitive 
disadvantage by foreign firms that operate with less oversight and sell 
substandard ingredients into this country at reduced prices. This bill 
will help ensure that businesses operate on a level playing field by 
holding foreign actors to the same high standards as those in the 
United States.
  The last policy provision I will highlight is a mix of device and 
drug authorities that together can fairly be described as the most 
significant advance for patients of orphan and rare diseases since the 
Orphan Drug Act was passed nearly 30 years ago.
  In addition to the significant resources that will be devoted to rare 
diseases under the prescription drug user fee agreement itself, this 
bill, No. 1, expands the accelerated approval pathway to therapies for 
rare and very rare diseases, and it instructs FDA to weigh the rarity 
of a disease as a factor in its approval process.
  Next, it directs resources to promising therapies for unmet medical 
needs, which will receive the new ``breakthrough'' designation.
  Next, it requires FDA to consult with outside experts on rare 
diseases.
  Next, it focuses on pediatric rare diseases by requiring a strategic 
plan regarding pediatric rare diseases and creating a pilot program to 
incentivize new therapies for pediatric rare diseases.
  Next, it helps make devices for rare diseases more available by 
modernizing provisions relating to custom devices and making it easier 
for companies to make profits on devices for rare disease.
  Lastly, it reforms the conflict of interest rules for advisory 
committees to make it easier for the FDA to fill panels, which will 
have particular impact regarding rare diseases because those panels are 
sometimes very hard to fill.
  I am very proud of the advances this legislation represents for 
patients with orphan and rare diseases.
  Not only does the bill support the biomedical industry and help 
patients get the medical products they need, it also reduces the 
deficit. According to the nonpartisan Congressional Budget Office, this 
legislation will reduce the budget deficit by more than $311 million in 
the next decade. So what we have is not only good policy, but it is 
fiscally responsible by contributing to deficit reduction.
  As I have said, well over a year of diligent, bipartisan work has 
gone into the legislation before us today. Neither Democrats nor 
Republicans got everything they wanted in this bill. We sought out 
consensus measures. Where we could not achieve consensus, we did not 
allow our differences to distract us from the critically important goal 
of producing a bill everyone could support. As a result, this is a true 
bipartisan bill, and it is broadly supported by the patient groups and 
industry. In fact, it has wide support from medical associations and 
also from consumer groups and manufacturers throughout the entire 
country--a broad base of support. In fact, it is unique because it has 
the full support of manufacturers, the pharmaceutical industry, the 
device manufacturers, the FDA itself, and patients groups--people 
concerned about patient safety, cost, and availability of drugs and 
devices. So it has a broad base of support.
  The FDA Safety and Innovation Act before us, which we will be voting 
on in a little while, authorizes the important FDA user fee agreements, 
and it modernizes our regulatory system to ensure safety and to foster 
innovation in the medical product industry. Our bipartisan work has 
produced an excellent bill. We cannot allow unrelated partisan 
disagreements or Presidential-election-year politics to interfere or 
keep us from completing our job.
  I will say it again. We must pass this vital legislation now. It is 
critically important to the agency, to the industry and, most 
importantly, to patients that we get this done. Let's come together, 
Democrats and Republicans, to pass this legislation. Let's have a 
resounding vote on cloture. Hopefully we won't have to use the 30 hours 
and we can get to passage of the bill very rapidly so that we can get 
it down to the President for his signature.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.


                    Invoking the Leahy-Thurmond Rule

  Mr. LEE. Mr. President, I rise today to express my support for the 
minority leader's decision to invoke the longstanding Senate tradition, 
known as the Leahy-Thurmond rule. Pursuant to this tradition and 
precedent, the Senate will cease confirming nominees to the Federal 
courts of appeals until after the Presidential election in November. 
Many of my colleagues from the other side of the aisle have previously 
affirmed the propriety of this rule and enforced its standard. For 
example, in the last year of the Bush administration, the majority 
leader noted that ``in a Presidential election year, it is always very 
tough for judges. That is the way it has been for a long time, and that 
is why we have the Thurmond rule.''
  The chairman of the Judiciary Committee, who has cited the Thurmond 
rule more frequently than any other Senator, has likewise stated that 
``in a Presidential election year, after Spring, no judges go through 
except by the consent of the Republican and Democratic leaders.''
  Statements from several of my Democratic colleagues likewise confirm 
that it is proper to invoke the Leahy-Thurmond rule at this point in a 
Presidential election year. In 2008, for example, one of my colleagues 
on the Judiciary Committee argued that for Federal appeals court 
nominees, once ``it comes to June . . . generally everything stops in 
an election year.'' Indeed, on June 12 of that same year, another 
Judiciary Committee colleague stated that the Senate was already ``way 
past the time of the Thurmond rule.''
  History further confirms the propriety of invoking the Leahy-Thurmond 
rule at this time. It is extremely rare for the Senate to confirm an 
appeals court nominee after June of a Presidential election year. In 
fact, it has happened only once in almost two decades, when in 2000 the 
Republican-controlled Senate confirmed one of President Clinton's 
nominees. It is simply not true, as comments from some of my colleagues 
have implied, that in recent Presidential election years we have 
confirmed appellate court nominees in July, August, or September.
  Moreover, this year we have already confirmed five of President 
Obama's Federal appeals court nominees. This, incidentally, is the same 
number of appeals court nominees the Senate confirmed in 2008, the most 
recent Presidential election year on record. In 2004 the Senate 
confirmed only four such nominees. Indeed, dating back over 100 years, 
from President William Howard Taft to President Obama, the Senate has 
confirmed an average of just four appeals court nominees during 
Presidential election years. This year we have already exceeded the 
historical average and confirmed five of President Obama's appeals 
court nominees. There is no reason to depart further from the 
historical norm and confirm additional nominees.
  The suggestion by some that application of the Leahy-Thurmond rule 
somehow affects court vacancies deemed

[[Page 9739]]

``judicial emergencies'' is false, and recklessly so. Of the four 
judicial emergencies on the Federal court of appeals, President Obama 
has nominated only one individual, and because that nomination was so 
recent, even absent the Leahy-Thurmond rule, that nominee would not be 
scheduled for a vote anytime soon.
  I also remind my colleagues that Democrats enforced the Leahy-
Thurmond rule in June 2008, during a time when there were twice as many 
judicial emergencies in the circuit courts as there are right now. 
Likewise, the overall vacancy rate on our circuit courts was much 
higher in June 2004 when President Bush was in the final year of his 
term. Yet Democrats did not hesitate to block several qualified 
appellate court nominees in the months leading up to the 2004 
Presidential election.
  Enforcement of the Leahy-Thurmond rule does not currently apply to 
district court nominees. This year the Senate has already confirmed 23 
of President Obama's district court nominees--many more than were 
confirmed during comparable years during the President Bush and Clinton 
Presidencies. And we will continue to confirm more qualified nominees. 
Application of the Leahy-Thurmond rule, beginning now, will thus not 
implicate any district court judicial emergencies.
  The urgency for such vacancies lies not in the Senate, which to this 
day has acted responsibly on nominees, but with President Obama, who to 
this day has failed to nominate individuals for many of these seats.
  There are, I add, other good reasons in addition to tradition and 
historical precedent to enforce the Leahy-Thurmond rule now rather than 
waiting longer to do so. Doing so now prevents a particular President 
from packing the courts at the end of his term by appointing 
influential, life-tenured appellate court judges whose service will 
span numerous other Presidential administrations.
  The Leahy-Thurmond rule also ensures that Presidential politics 
during an election season will not overshadow or interfere with the 
Senate's advice and consent role on such judicial nominees.
  The last point bears special emphasis. The Constitution assigns to 
the Senate the right and the duty to advise and consent to the 
President's judicial and executive branch nominees. It is essential for 
the Constitution's separation of powers that the Senate protect its 
necessary and legitimate role in the nominations process against 
encroachment by the executive branch of government.
  Earlier this year, we witnessed a troubling demonstration of what can 
happen when the President violates the Constitution's separation of 
powers and tramples on the Senate's rightful prerogatives in the advise 
and consent process. On January 4, 2012, at a time when the Senate was 
conducting brief sessions approximately every 72 hours, President Obama 
nonetheless bypassed the Senate and unilaterally appointed four 
significant executive branch nominees. By asserting the power to make 
recess appointments, even when the Senate--according to its own rules--
was not in recess, the President simply ignored the Senate's legitimate 
constitutional right to advise and consent to nominees made by the 
President.
  President Obama's unconstitutional appointments cut to the very heart 
of our Constitution's separation of powers and the institutional 
prerogatives that rightfully belong right here, in this body. 
Accordingly, since the time of those appointments, I have sought to 
protect the Senate's interests by opposing President Obama's judicial 
nominees. I have made clear I would do the same were a Republican 
President to make similarly unconstitutional appointments under the 
recess appointments clause.
  As the chairman of the Senate Judiciary Committee noted at a recent 
Judiciary Committee hearing, I have stated my concern with President 
Obama's unconstitutional recess appointments very clearly, but I have 
also been, in his words, extremely responsible in my opposition and 
have not hindered the work of the Senate. In light of President Obama's 
unconstitutional appointments, it is all the more proper we invoke the 
Leahy-Thurmond rule now.
  I agree with the ranking member of the Senate Judiciary Committee 
that we should have invoked that rule back in January, at the time of 
the unconstitutional appointments. By enforcing the Leahy-Thurmond rule 
now, we will demonstrate for the historical record the Senate did not 
acquiesce in President Obama's unconstitutional recess appointments 
and, instead, took action to protect the Senate's institutional 
prerogatives. When we have done so, I will again be in a position to 
vote in favor of qualified consensus District Court nominees.
  But I will always remain vigilant in seeking to protect the Senate 
against unconstitutional encroachment by the executive branch. As 
Members of this body, we have an institutional responsibility to 
safeguard the Senate's essential advise and consent role and to confirm 
only those nominees who are properly qualified to serve in the 
positions for which they have been rightfully nominated.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.


                      Arizona Immigration Decision

  Mr. DURBIN. Mr. President, today, the U.S. Supreme Court announced 
its decision on S.B. 1070--the controversial Arizona immigration law. 
The Court--including conservative Justices Anthony Kennedy and John 
Roberts--agreed with the Obama administration that a State cannot set 
up its own immigration enforcement system.
  As a result, the Supreme Court struck down several parts of the 
Arizona law, including the provision that would have made it a crime in 
Arizona to be an undocumented immigrant and the provision that would 
have required legal immigrants to carry documents proving their legal 
status at all times.
  The Supreme Court is right. States do not have the right, under the 
Constitution, to enact immigration laws that contradict Federal law. 
Many of my colleagues on the other side of the aisle strongly 
criticized the Obama administration for even challenging the Arizona 
immigration law. There was even an amendment offered to try to block 
the Justice Department from pursuing the litigation brought to the 
Supreme Court. Fortunately, the vast majority of Democrats, joined by 
two Republicans--Senators Johanns and Voinovich--blocked that 
amendment.
  Now the Supreme Court--including Chief Justice Roberts and Justice 
Kennedy--has sided with the Obama administration in holding the vast 
majority of the Arizona law unconstitutional.
  I am troubled the Supreme Court upheld one of the provisions in that 
law in Arizona--section 2(B)--which requires Arizona police officers to 
check the immigration status of suspected undocumented immigrants. But 
it is important to understand the Court's decision on that section is a 
narrow one. The only question for the Court was whether that section--
2(B)--was preempted by Federal immigration law. The Court said it is 
open to future challenges once the law goes into effect, and this 
provision may still be held unconstitutional, as the other provisions 
in the Arizona law.
  According to law enforcement experts, section 2(B) is likely to 
encourage profiling, which would violate the Equal Protection Clause of 
the 14th amendment to the Constitution. Specifically, section 2(B) 
requires police officers to check the immigration status of any 
individual with whom they have lawful contact if they have ``reasonable 
suspicion'' the person is an undocumented immigrant.
  What is the basis for a reasonable suspicion the person they pull 
over is, in fact, an undocumented immigrant? The guidance on the law 
issued in the State of Arizona says police officers should consider 
things such as how a person is dressed or their ability to communicate 
in English.
  Earlier this year, I held a hearing on racial profiling in the 
Judiciary's Subcommittee on the Constitution, Civil Rights and Human 
Rights. It was the first hearing on racial profiling since before 9/11. 
One of the witnesses at my

[[Page 9740]]

hearing was Ron Davis. He is the chief of police in East Palo Alto, CA, 
and Chief Davis, along with 16 other law enforcement officials and the 
Major Cities Chiefs of Police Association, filed a brief in the Arizona 
case. In their brief, the police chiefs say:

       The statutory standard of ``reasonable suspicion'' of 
     unlawful presence in the United States will as a practical 
     matter produce a focus on minorities, and specifically 
     Latinos.

  Two former Arizona attorneys general, joined by 42 other former State 
attorneys general, filed an amicus brief in the Arizona case, and they 
said ``application of the law requires racial profiling.'' I agree with 
these law enforcement experts. I am confident section 2(B) will 
eventually be struck down as the other provisions of the Arizona law 
were.
  The Arizona law is the wrong approach for America. It is amazing to 
me how this Nation of immigrants, in which we are all part of the 
family, has struggled for so long to deal with the whole issue of 
immigration. I think it is wrong to treat people as criminals simply 
because of their immigration status, and it is not right to make 
criminals of people who literally go to work every day, cooking our 
food, cleaning our rooms, and caring for our children in day care 
centers or caring for our parents and grandparents in nursing homes.
  Here is the reality: Treating immigrants as criminals will not help 
combat illegal immigration. Law enforcement doesn't have the time or 
the resources to prosecute and incarcerate every undocumented immigrant 
among the 10 million or 11 million in this country. Making undocumented 
immigrants into criminals simply drives them into the shadows. That is 
why the Arizona Association of Chiefs of Police opposes the Arizona law 
considered by the Court today. They say it will make it more difficult 
for them to make Arizona a safe place. Immigrants are less likely to 
cooperate with the police if they fear they are going to get arrested 
for even trying to help.
  Instead of measures that harm law enforcement and promote racial 
profiling, such as the Arizona immigration law, we need practical 
solutions to fix a broken immigration system. That case was before the 
Supreme Court. The Court made its decision today because this body--the 
Senate and the House--have failed to accept their responsibility. We 
have a responsibility, if, in fact, immigration is a Federal issue, for 
a Federal response, and we failed.
  The first step we should take in passing comprehensive immigration 
reform is to pass the DREAM Act--legislation that would allow a select 
group of immigrant students who grew up in this country to earn 
citizenship either by attending college or serving in the military.
  Russell Pearce is the author of the Arizona immigration law. He had 
this to say about the DREAM Act:

       The DREAM Act is one of the greatest legislative threats to 
     America's sovereignty, national security and economic future.

  I see it differently and so do many others, including GEN Colin 
Powell and former Defense Secretary Robert Gates. They support the 
DREAM Act because it would make America a stronger country by giving 
these talented immigrants the chance to serve in the military and 
contribute to the future of America.
  The best way to understand the problems with the Arizona immigration 
law and the need for the DREAM Act and comprehensive immigration law is 
to hear the stories of some of the immigrant students who would be 
eligible for the DREAM Act. They call themselves DREAMers. Almost every 
week in the session I come to the floor of the Senate to tell the story 
of one of these young people. Over the years I have told stories of 
several DREAMers from the State of Arizona. Under the Arizona law, 
these young people would be targets for prosecution and incarceration. 
Under the DREAM Act, they would be future citizens who could make 
America and Arizona stronger.
  Today, I wish to introduce one of them from Arizona. Her name is 
Angelica Hernandez. She was brought to Phoenix, AZ, when she was 9 
years old. She started school in the fourth grade, and by the time she 
reached the sixth grade, Angelica no longer took English as a second 
language. She was proficient in the language of English.
  At Carl Hayden High School in Phoenix, AZ, Angelica served in Junior 
ROTC and was president of the National Honor Society. She became a 
dedicated member of the school's robotics club, where she found her 
true love, engineering.
  Angelica graduated from high school with a 4.5 GPA and in 2007 was 
named Outstanding Young Woman of the Year for district 7 in Phoenix. 
Last year, Angelica Hernandez graduated from Arizona State University--
we can see her holding her graduation certificate--as the outstanding 
senior in the Mechanical Engineering Department, with a 4.1 GPA.
  Under the Arizona immigration law, Angelica Hernandez would be a 
target for prosecution and incarceration. Under the DREAM Act, she 
would be a future citizen and engineer who could contribute her talents 
to making this a better country. What a choice: to take this woman, who 
has spent virtually her entire life, as she remembers it, in America, 
attending our schools, excelling in those schools, being acknowledged 
as one of the better students so her ambition takes her to a great 
university, Arizona State University, where she graduated at the top of 
her class in mechanical engineering and, some would say, tell her now 
she must leave America, I think is wrong. Angelica Hernandez, and 
people like her, will make this a better country. Unlike the Arizona 
immigration law, the DREAM Act is a practical solution to a broken 
immigration system. The Arizona law would harm law enforcement and 
encourage profiling. The DREAM Act would make America stronger.
  President Obama understands this. That is why he challenged the 
Arizona law, taking the case to the Supreme Court. That is why earlier 
this month I saluted the President for announcing his administration 
will no longer deport people, such as Angelica Hernandez, who would be 
eligible for the DREAM Act. I strongly support President Obama's 
courage and his decision. It is one of the most historic, humanitarian 
moments of our time. His decision will give these young immigrants the 
chance to finally come out of the shadows and be part of the only 
country they have ever called home. It was the right thing to do.
  These students didn't make the decision to come to this country. 
Angelica was brought here at the age of 9, and it is not the American 
way to punish children for the wrongdoing of their parents. President 
Obama's new deportation policy will make America better by giving these 
talented immigrants the chance to contribute.
  Studies have found DREAM Act students will literally boost the 
American economy during their working lives. This policy is also 
clearly legal. Throughout our history, the government has decided who 
to prosecute and who not to prosecute based on law enforcement 
priorities and availability resources. Past administrations of both 
political parties have used their authority to stop deportation of low-
priority cases. The courts have recognized that.
  Listen to what the Supreme Court said today in the Arizona 
immigration law case:

       A principal feature of the removal system is the broad 
     discretion exercised by immigration officials. . . . 
     Discretion in the enforcement of immigration law embraces 
     immediate human concerns.

  The President's plan is smart and realistic. The Department of 
Homeland Security has to set priorities. It is not amnesty; it is 
simply a decision to focus limited government resources on those who 
have committed serious crimes and are a threat to public safety, not 
the DREAM Act students.
  Compare President Obama's approach with the Presidential candidate 
from another party who said the Arizona law was a ``model'' for the 
rest of America. That other Presidential party candidate has promised 
that if he is elected President he will veto the DREAM Act. He has 
refused to say whether he

[[Page 9741]]

would even maintain or rescind President Obama's order banning the 
deportation of DREAM Act students. That is the wrong approach for 
America.
  The administration's new policy on the DREAM Act is only temporary. I 
understand that. The burden is still on us in the Senate and the House 
to do something about the many thousands of students across America, 
just like this dynamic young lady in Arizona, who simply want a chance 
to be a part of America and its future. Our first step: Pass the DREAM 
Act. Do it and do it now.
  Justice Kennedy wrote in his opinion today:

       The history of the United States is in part made of the 
     stories, talents, and lasting contributions of those who 
     crossed oceans and deserts to come here.

  Justice Kennedy is right. Congress should reform our immigration laws 
so we can once again welcome those who cross oceans and deserts to 
revitalize and strengthen this Nation of immigrants.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I came to the floor to discuss another 
issue. But since my friend from Illinois, with whom I share many of his 
comments, I have to comment. The fact is that the irony of the Supreme 
Court decision today said it is a Federal responsibility to ensure our 
borders and not the States' responsibility. The State of Arizona acted 
because the Federal Government wouldn't act, because our borders were 
broken, because the people in the southern part of our State were 
living in fear, because a rancher was killed by someone who had crossed 
our border illegally, because people are on mountaintops today guiding 
drug runners across our border into Arizona with drugs ending up in 
Phoenix, AZ, and distributed all over this Nation, $887 million wasted 
on a contract for a virtual fence.
  Coyotes bring these people across and then treat them in the most 
abominable fashion, where they are put into drop houses and kept in the 
worst kinds of conditions and held for ransom.
  Because the Federal Government would not secure our borders, the 
State of Arizona believed they had to act because people in the 
southern part of our State and even other parts of our State were 
living in fear. They are living in fear because of the drug dealers who 
are coming across, because of the coyotes who are mistreating the 
people they were bringing.
  Of course we want to address the issue of children who weren't born 
here. But we also have an obligation to have our borders secured. I 
repeat--today, I say to my friend from Illinois--there are people 
sitting on mountaintops hired by the drug cartels who are guiding the 
drug runners across our borders and up to Phoenix. You can ask the DEA. 
These drugs are then distributed throughout the country from Phoenix, 
AZ. People are murdered, and the violence on the other side of the 
border threatens every day to spill over to our side of the border. So 
I hope, as a result of this decision, the administration will get 
serious about actually securing our border. Every expert agrees that 
because of the work that has been done in California and Texas it has 
funneled through the State of Arizona.
  Have there been improvements? Of course there have been improvements. 
Is it still going on? As long as we have guides sitting on mountaintops 
guiding drug dealers, we haven't got a secure border. That is what the 
people of Arizona not only want but they also deserve.
  By the way, Mitt Romney agrees that we have to address this issue in 
a comprehensive fashion as well as concern about the plight of the 
children who are brought here illegally. But I would also point out to 
my friend that part of the DREAM Act, as proposed by the Senator from 
Illinois, is 2 years' service in the military. We don't sign people up 
for 2 years. Average citizens, in order to get on a path to a green 
card and citizenship, sign up for 4 years. That is just one of the 
areas that need to be worked out.
  So there will be a lot of conversation about this. But I believe 
people who live inside of our country--no matter whether it is in 
Arizona or Illinois--deserve the right to live in a safe environment. 
The people who live in the southern part of our State do not have that.
  So I hope we can get our borders secure and we can move forward with 
comprehensive immigration.
  By the way, then-Senator Obama was one of the key reasons it failed 
because he wanted to sunset the guest worker program. That is a fact, 
and you can look it up, I say to my friend from Illinois. Although it 
was killed by people on this side, it was also a broken promise on the 
part of then-Senator Obama who assured Senator Kennedy and me that he 
wouldn't vote for an amendment that would impair the progress of 
comprehensive reform at that time.
  I look forward to having further discussions with the Senator from 
Illinois as we move forward--sooner or later--with comprehensive 
immigration reform, which is absolutely needed. But we also have to 
ensure the security of all of our citizens and stop the flow of drugs 
across our southern border, which is killing our young Americans.
  By the way, I would say to the Senator from Illinois, the price of an 
ounce of cocaine on the streets of Chicago today is not one less penny 
higher than it was 10 years ago, which means we are not restricting the 
flow of drugs coming into our country. As we all know, the majority of 
it comes across from our southern border.
  Finally, I would remind my friend from Illinois that then-Senator 
Obama promised in the campaign of 2008 that immigration reform would be 
his first priority. The Senator had 60 votes over here and an 
overwhelming majority in the House of Representatives in the first 2 
years of the Obama administration. I never saw a proposal come to the 
Senate for comprehensive immigration reform. Now, the DREAM Act did. 
Comprehensive immigration reform? No. That is what then-Senator Obama 
promised.
  Mr. President, I ask unanimous consent for a colloquy between myself 
and the Senator from Illinois.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Illinois.
  Mr. DURBIN. Let me say, the Senator from Arizona is my friend, and 
there are many things we have worked on together, and I respect him 
very much. He knows, as I do, when the DREAM Act was called, we thought 
the introductory may be the easiest part of immigration reform. It was 
stopped by a Republican filibuster.
  Mr. McCAIN. I don't dispute that point, I say to my friend from 
Illinois. There was no comprehensive immigration reform proposal that 
came over from the White House or from the Democrats, as was promised 
by then-Senator Obama when running for the Presidency. That is a fact.
  Mr. DURBIN. I would say to the Senator from Arizona, as part of this 
colloquy, we thought that would be the first step. We couldn't get past 
the first step because of the Republican filibuster.
  Mr. McCAIN. I wish that when then-Senator Obama was running for 
President he would have said: But first I am coming over with the DREAM 
Act. He didn't. He said: My first act will be comprehensive immigration 
reform.
  I was invited over to the White House in 2009. We talked about 
comprehensive immigration reform and I said: I will await a proposal 
from the administration on comprehensive immigration reform. My phone 
never rang.
  Mr. DURBIN. I say to the Senator from Arizona, perhaps the day will 
come in our lifetime when we can see that, and you and I can work on it 
together again as we once did before. I would look forward to that.
  Mr. McCAIN. I look forward to it, and I want to say there has been no 
more passionate advocate in the Senate than the Senator from Illinois. 
I respect him and admire him for his compassion and his concern about 
young people whose lives, as he very well described, need to have some 
kind of assurance for their future since it is clearly a compelling 
humanitarian situation. I thank my friend from Illinois.

[[Page 9742]]




                           Health Care Ruling

  Mr. President, later this week the Supreme Court will issue its 
ruling on the health care bill, designed and negotiated by the White 
House and rammed through Congress during President Obama's first year 
in office when the economy was near its weakest.
  Instead of focusing on recovery and persistent unemployment, the 
President and the Democratic majorities controlling Congress squandered 
the opportunity and forced the unpopular and potentially 
unconstitutional legislation on the American people.
  Today we are voting on final passage on the reconciled FDA user fee 
bill. During Senate consideration of this bill I offered an amendment 
to allow safe drug importation from legitimate Canadian pharmacies. But 
the pharmaceutical industry spread misleading and inaccurate 
information about the amendment, as they have done time and a time 
again. As I said then, there is no greater example of the influence of 
special interests on this body than the failure to enact an amendment 
that would have allowed drugs from legitimate Canadian pharmacies so 
people could purchase their much needed medication at sometimes half 
the cost of what it is in the United States of America. I am 
embarrassed to this day that nine of my Republican colleagues also 
voted against it.
  I don't know if there was a sweetheart deal to protect PhRMA at the 
expense of American patients from the vote on my amendment. But we do 
know that PhRMA was protected by the White House and Senate Democrats 
from provisions they didn't like in ObamaCare only after they offered 
up advertising in exchange for more accommodating policies.
  From a recent House Energy and Commerce Committee investigation, it 
is now confirmed that PhRMA orchestrated a grand deal with the White 
House and Senate Democrats to oppose importation and other policies. I 
might point out then-Senator Obama supported drug importation.
  This is how the New York Times described the deal that was done in 
exchange for reportedly $150 million in advertising to support 
ObamaCare, June 8, 2012:

       After weeks of quiet talks, drug industry lobbyists were 
     growing nervous. If they were to cut a deal with the White 
     House on overhauling health care, they needed to be sure 
     President Obama would stop a proposal by his liberal allies 
     intended to bring down medicine prices.
       On June 3, 2009, one of the lobbyists e-mailed Nancy-Ann 
     DeParle, the president's top health care adviser. Ms. DeParle 
     sent a message back reassuring the lobbyists. Although Mr. 
     Obama was overseas, she wrote, she and other top officials 
     had ``made a decision, based on how constructive you guys 
     have been, to oppose importation on the bill.'' Just like 
     that, Mr. Obama's staff abandoned his support for the 
     reimportation of prescription medicines at lower prices and 
     with it solidified a growing compact with an industry he had 
     vilified on the campaign trail the year before.
       A president who had promised to air negotiations on C-SPAN 
     cut a closed-door deal with the powerful pharmaceutical 
     lobby, signifying to some disillusioned liberal supporters a 
     loss of innocence, or perhaps even the triumph of cynicism.
       Still, what distinguishes the Obama-industry deal is that 
     he had so strongly rejected that very sort of business as 
     usual.

  Ironically, candidate Obama sang a very different tune on the 
campaign trail in 2008:

       You know, I don't want to learn how to play the game 
     better. I want to put an end to the game playing.

  Now, PhRMA is the lobbying group for the pharmaceutical industry. The 
New York Times article continued:

       The e-mails, which the House committee obtained from PhRMA 
     and other groups, document a tumultuous negotiation, at times 
     transactional. . . .
       In the end, the White House got the support it needed to 
     pass its broader priority, but industry emerged satisfied as 
     well. ``We got a deal,'' wrote Bryant Hall, then senior vice 
     president of the pharmaceutical group.
       In July, the White House made clear that it wanted 
     supportive ads using the same characters the industry used to 
     defeat Mr. Clinton's proposal 15 years earlier. ``Rahm asked 
     for Harry and Louise ads thru third party,'' Mr. Hall 
     wrote.''
       Talks came close to breaking down several times. In May, 
     the White House was upset that the industry had not signed 
     onto a joint statement. One industry official wrote that they 
     should sign: ``Rahm is already furious. The ire will be 
     turned on us.''

  The e-mails also detail extensive and direct negotiations with PhRMA, 
its drug company members, the American Medical Association, AARP, the 
American Hospital Association, unions, and many more. Members of the 
alliance all participated because they thought they were getting 
something more valuable--revenue to their organization or membership 
because the Federal Government was going to force everyone into some 
form of government-designed health insurance coverage--than what they 
were going to have to spend on advertising to support the legislation. 
Some reports have the PhRMA advertising commitment as high as $150 
million, spread out through direct advertising in certain important 
States and among groups created to sound like they were looking out for 
patients or to tout the economic benefits of ObamaCare.
  On June 11, 2012, the Wall Street Journal described the e-mails about 
the 2009 negotiations:

       The joint venture was forged in secret in spring of 2009 
     amid an uneasy mix of menace and opportunism. The drug makers 
     worried that health-care reform would revert to the liberal 
     default of price controls and drug re-importation that Mr. 
     Obama campaigned on, but they also understood that a new 
     entitlement could be a windfall as taxpayers bought more of 
     their products. . . .
       Initially, the Obamateers and Senate Finance Chairman Max 
     Baucus asked for $100 billion, 90% of it from mandatory 
     ``rebates'' through the Medicare prescription drug benefit 
     like those that are imposed in Medicaid. The drug makers 
     wheedled them down to $80 billion by offsetting cost-sharing 
     for seniors on Medicare, in an explicit quid pro quo for 
     protection against such rebates and re-importation.
       ``Terms were reached in June. . .lead PhRMA negotiator 
     Bryant Hall wrote on June 12 that Mr. Obama ``knows 
     personally about our deal and is pushing no agenda.''
       But Energy and Commerce Chairman Henry Waxman then 
     announced that he was pocketing PhRMA's concessions and 
     demanding more, including re-importation. We wrote about the 
     double-cross in a July 16, 2009 editorial called ``Big Pharma 
     Gets Played,'' noting that Mr. Tauzin's ``corporate clients 
     and their shareholders may soon pay for his attempt to get 
     cozy with ObamaCare.''
       Mr. Hall forwarded the piece to Ms. DeParle with the 
     subject line, ``This sucks.'' The White House rode to the 
     rescue. In September Mr. Hall informed Mr. Kindler that 
     deputy White House chief of staff Jim Messina ``is working on 
     some very explicit language on importation to kill it in 
     health care reform. This has to stay quiet.''
       ``PhRMA more than repaid the favor, with a $150 million 
     advertising campaign coordinated with the White House 
     political shop. As one of Mr. Hall's deputies put it earlier 
     in the minutes of a meeting when the deal was being 
     negotiated, ``The WHdesignated folks . . . would like us to 
     start to define what 'consensus health care reform' means, 
     and what it might include. . . . They definitely want us in 
     the game and on the same side.''

  More on the ``WH-designated folks . . .'' in a moment. The June 11 
WSJ editorial continued:

       In particular, the drug lobby would spend $70 million on 
     two 501(c)(4) front groups called Healthy Economy Now and 
     Americans for Stable Quality Care. In July, Mr. Hall wrote 
     that ``Rahm asked for Harry and Louise ads thru third party. 
     We've already contacted the agent.

  Other groups like the AMA were also willing to commit their 
membership dollars to advertising in support of the legislation in 
exchange for their policy priorities. According to the Wall Street 
Journal:

       ``At least PhRM/I deserves backhanded credit for the 
     competence of its political operatives--unlike, say, the 
     American Medical Association. A thread running through the 
     emails is a hapless AMA lobbyist importuning Ms. DeParle and 
     Mr. Messina for face-to-face meetings to discuss reforming 
     the Medicare physician payment formula. The AMA supported 
     ObamaCare in return for this ``doc fix,'' which it never got.
       ``We are running out of time,'' this lobbyist, Richard 
     Deem, writes in October 2009. How can he ``tell my colleagues 
     at AMA headquarters to proceed with $2m TV buy'' without a 
     permanent fix? The question answers itself: It was only $2 
     million.''

  The emails uncovered by the House committee also describe potentially 
serious conflicts of interest for senior White House staff, their 
former businesses, who was really writing the legislation--the White 
House, Congress or affected industries--and questions about the 
appearance of the White House staff orchestrating the outside

[[Page 9743]]

advertising campaign. On June 21, 2012 the Wall Street Journal further 
reported on the 2009 secret deals:

                 Strassel: Axelrod's ObamaCare Dollars

                       (By Kimberly A. Strassel)

       Rewind to 2009. The fight over ObamaCare is raging, and a 
     few news outlets report that something looks ethically rotten 
     in the White House. An outside group funded by industry is 
     paying the former firm of senior presidential adviser David 
     Axelrod to run ads in favor of the bill. That firm, AKPD 
     Message and Media, still owes Mr. Axelrod money and employs 
     his son.
       The story quickly died, but emails recently released by the 
     House Energy and Commerce Committee ought to resurrect it. 
     The emails suggest the White House was intimately involved 
     both in creating this lobby and hiring Mr. Axelrod's firm--
     which is as big an ethical no-no as it gets.
       Mr. Axelrod--who left the White House last year--started 
     AKPD in 1985. Mr. Axelrod moved to the White House in 2009 
     and agreed to have AKPD buy him out for $2 million. But AKPD 
     chose to pay Mr. Axelrod in annual installments--even as he 
     worked in the West Wing.
       The White House and industry were working hand-in-glove to 
     pass ObamaCare in 2009, and among the vehicles supplying ad 
     support was an outfit named Healthy Economy Now (HEN).
       House emails show HEN was in fact born at an April 15, 2009 
     meeting arranged by then-White House aide Jim Messina and a 
     chief of staff for Democratic Sen. Max Baucus. The two 
     politicos met at the Democratic Senatorial Campaign Committee 
     (DSCC) and invited representatives of business and labor.
       The call was from Nick Baldick, a Democratic consultant who 
     had worked on the Obama campaign and for the DSCC. Mr. 
     Baldick started HEN. The only job of PhRMA and others was to 
     fund it.
       Meanwhile, Mr. Axelrod's old firm was hired to run the ads 
     promoting ObamaCare. At the time, a HEN spokesman said HEN 
     had done the hiring. But the emails suggest otherwise. In 
     email after email, the contributors to HEN refer to four men 
     as the ``White House'' team running health care.
       In one email, PhRMA consultant Steve McMahon calls these 
     four the ``WH-designated folks.'' He explains to colleagues 
     that Messrs. Grossman, Grisolano and Del Cecato ``are very 
     close to Axelrod,'' and that ``they have been put in charge 
     of the campaign to pass health reform.''
       A 2009 PhRMA memo also makes clear that AKPD had been 
     chosen before PhRMA joined HEN. It's also clear that some 
     contributors didn't like the conflict of interest. When, in 
     July 2009, a media outlet prepared to report AKPD's hiring, a 
     PhRMA participant said: ``This is a big problem.'' Mr. 
     Baldick advises: ``just say, AKPD is not working for PhRMA.'' 
     AKPD and another firm, GMMB, would handle $12 million in ad 
     business from HEN and work for a successor 501(c)4.
       A basic rule of White House ethics is to avoid even the 
     appearance of self-dealing or nepotism. Could you imagine the 
     press frenzy if Karl Rove had done the same after he joined 
     the White House?
       Until the White House explains all this, voters can fairly 
     conclude that the President's political team took their 
     Chicago brand of ethics into the White House.''

  Mr. President, I ask unanimous consent to have printed in the Record 
a New York Times article, June 8, 2012; a Wall Street Journal article, 
June 11, 2012; and June 21 Wall Street Journal editorial, and the memos 
about the e-mails associated with this report.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                     May 16, 2012.
     To: Energy and Commerce Committee Republican Members
     From: Subcommittee on Oversight and Investigations Majority 
         Staff
     Re Investigation Update: Closed-Door Obamacare Negotiations
       From: Messina, Jim
       Sent: Friday, January 15, 2010 6:04 PM
       To: Bryant Hall
       Subject: FW: TAUZIN EMAIL
       What the hell? This wasn't part of our deal.


                                Overview

       The purpose of this memorandum is to update Republican 
     Members on the Energy and Commerce Committee on the 
     Committee's ongoing investigation into the potential 
     agreements made by the White House and health care industry 
     stakeholders prior to passage of the Patient Protection and 
     Affordable Care Act (PPACA). As reported on April 17, 2012, 
     the Committee's investigation is attempting to answer the 
     following questions:
       Were ``deals'' made between the Administration and outside 
     stakeholders that exchanged specific policy outcomes for 
     public support of the law?
       Who made these deals, and to what extent was Congress 
     excluded?
       What specifically was negotiated by the White House and 
     these outside interests? What policies are now law as a 
     result of these negotiations, and what did the White House 
     obtain in exchange?
       This investigation has produced further information 
     regarding the substance of the ``deal'' between the White 
     House and the Pharmaceutical Manufacturers of America 
     (PhRMA), the details of which have never been fully disclosed 
     to the public. Further, based on email exchanges and other 
     primary source material, it appears that deal was reached not 
     solely between PhRMA and the United States Senate Finance 
     Committee, but that top personnel in the White House were 
     involved in negotiating and approving this deal. The 
     following update is based on internal records obtained from 
     outside stakeholders who engaged in negotiations outside the 
     public's view during the development and passage of PPACA.


                          I. Was there a deal?

       The existence of an agreement or series of agreements 
     between powerful health care industry stakeholders and the 
     authors of PPACA is a widely known--albeit poorly 
     understood--aspect of the health care law. Media accounts 
     dating back to 2009 speculated on the existence and details 
     of such deals leading up to the law's enactment. However, 
     those accounts have lacked concrete evidence of exactly what 
     policies the White House accepted or rejected as part of 
     these agreements, and what the interest groups delivered in 
     return. Moreover, media accounts and public statements from 
     policymakers at the time were often conflicting or 
     incomplete, failing to provide a clear picture to the 
     American people about how this law was being written, and by 
     whom.
       For example, while President Obama referred to the 
     agreement in June 2009, reports at the time also indicated 
     that ``many details of the . . . deal remained unclear.'' A 
     month later, The Wall Street Journal reported that House 
     Democrats had been told that the Administration ``doesn't 
     feel bound'' by the agreement. Because of increased pressure 
     from the Hill to scuttle the agreement, eventually the White 
     House attempted to publicly support the deal in early August 
     when The New York Times reported that the drug industry ``. . 
     . successfully demanded that the White House explicitly 
     acknowledge for the first time it had committed to protect 
     drug makers. . . .'' Yet, a week later reports still 
     indicated that ``[s]ince mid-July, the White House and the 
     drug industry's lobby, PhRMA, have denied any specific 
     agreement. . . .''
       This investigation has confirmed the existence of a deal 
     between the White House and PhRMA that explicitly bound both 
     parties to certain commitments. As the email exchange at the 
     top of this memorandum demonstrates, the deal was so clearly 
     understood to be binding that White House Deputy Chief of 
     Staff Jim Messina made direct contact with PhRMA's chief 
     lobbyist for the negotiations regarding the deal to express 
     his displeasure with an apparent violation of the agreement 
     more than two months before the legislation was given final 
     approval by Congress.


           II. Why did the White House hide its involvement?

       On June 20, 2009, the White House issued a 296-word 
     statement from President Obama announcing an agreement 
     between the nation's pharmaceutical companies and the Senate. 
     The statement makes no mention of White House involvement.
       The investigation has determined that the White House, 
     primarily through the Office of Health Reform Director Nancy 
     Ann DeParle and Messina, with involvement from Chief of Staff 
     Rahm Emmanuel, was actively engaged in these negotiations 
     while the role of Congress was limited. For example, three 
     days before the June 20 statement, the head of PhRMA promised 
     Messina, ``we will deliver a final yes to you by morning.'' 
     Meanwhile, Ms. DeParle all but confirmed that half of the 
     Legislative Branch was shut out in an email to a PhRMA 
     representative: ``I think we should have included the House 
     in the discussions, but maybe we never would have gotten 
     anywhere if we had.''
       Given these facts, it is unclear why the White House did 
     not fully disclose its involvement with outside stakeholders 
     in the development of the legislation. Their efforts are 
     particularly surprising given the President's repeated 
     promises of transparency.
       After this Committee initiated its investigation into the 
     potential promises or agreements made between PhRMA, labor 
     unions, insurers, medical associations, and other trade and 
     advocacy organizations, the White House derided the 
     Committee's request for basic information about its 
     legislative efforts as ``vast and expensive.'' The White 
     House refused to produce any of the requested documents and 
     only produced to the Committee a list of meetings based on 
     ``calendar entries and other readily available information.'' 
     These calendar entries do not provide information on the 
     attendees or details of discussion. For example, the calendar 
     provided by the White House identifies a July 7, 2009, event 
     as follows: ``Meeting with PhRMA representatives.'' No 
     further information is provided. This investigation, however, 
     has revealed that this was not only a meeting between 
     representatives of PhRMA and top White House aides; it was 
     the critical meeting to solidify the deal. As a PhRMA 
     representative said at the time: ``It's just to go over the 
     principal elements of the deal w[ith] Rahm, Messina and 
     DeParle. ''

[[Page 9744]]




              III. What did the White House promise to do?

       Even news stories that indicated that there was a potential 
     agreement with the pharmaceutical industry could not report 
     the entirety of the agreement. The August New York Times 
     story that reported White House acknowledgment of the deal 
     ``for the first time'' could not report any specifics 
     ``beyond an agreed-upon $80 billion'' in cost savings. This 
     investigation will show that the agreement between the White 
     House and the pharmaceutical industry was much more explicit. 
     In the coming weeks the Committee intends to show what the 
     White House agreed to do as part of its deal with the 
     pharmaceutical industry and how the full details of this 
     agreement were kept from both the public and the House of 
     Representatives.
       After two years, the health care law has failed to lower 
     costs while only increasing its unpopularity with the public. 
     According to a PhRMA official: ``[W]e got a good deal.''
       The important question to answer is what did the White 
     House get in return.
                                  ____

                                                     May 31, 2012.
     To: Energy and Commerce Committee Republican Members
     From: Majority Staff
     Re Investigation Update: Closed-Door Obamacare Negotiations


                           Executive Summary

       The White House negotiated a deal with the Pharmaceutical 
     Research and Manufacturers of America (PhRMA) in mid-June 
     2009. After attempting to secure a commitment from the 
     industry for $100 billion in payment cuts, eventually the 
     White House settled for approximately $80 billion in payment 
     reductions through expanded and increased Medicaid rebates 
     and a new health reform fee. PhRMA also had direct input into 
     the actual legislative policies that produced the $80 
     billion, including the proposal for closing the Part D 
     doughnut hole.
       Under the deal, ``the White House and Senator Baucus 
     agreed'' that neither price controls nor a government-run 
     Medicare Part D plan would become law, the White House would 
     oppose price controls on dual eligible beneficiaries, and 
     that savings from a follow-on biologics proposal would be 
     applied to the total $80 billion commitment.
       White House Office of Health Reform Director Nancy-Ann 
     DeParle told PhRMA's chief lobbyist for negotiating the deal 
     that the White House would oppose new drug importation 
     policies because of ``how constructive'' PhRMA had been. 
     According to PhRMA's lobbyist, White House Deputy Chief of 
     Staff Jim Messina told him that the ``WH is working on some 
     very explicit language on importation to kill it in health 
     reform.''
       According to internal e-mails, PhRMA's chief lobbyist 
     believed the White House eventually cut a deal with the 
     pharmaceutical industry during the week of June 20, 2009, 
     because the White House had suffered a bad week politically.
       Despite countless promises of televised negotiations and 
     transparent government, the White House met in private with 
     PhRMA representatives and drug company CEOs in July 2009, 
     ``to look the other side in the eye and shake their hand on 
     whatever deal we work out.''
       The White House was not above threatening PhRMA to get its 
     way. According to PhRMA's chief lobbyist, the White House was 
     going to have President Obama call for rebating all of 
     Medicare Part D, a policy PhRMA staunchly opposed, in his 
     Weekly Radio Address unless PhRMA cut a deal with the White 
     House to support health reform.
                                  ____

                                                     June 8, 2012.
     To: Energy and Commerce Committee Republican Members
     From: Majority Staff
     Re: Investigation Update: Closed-Door Obamacare Negotiations


                           Executive Summary

       As part of its agreement with the White House, the 
     Pharmaceutical Research and Manufacturers of America (PhRMA) 
     needed to undertake a ``significant public campaign.'' PhRMA 
     was willing to spend as much as $150 million on advertising, 
     with nearly $70 million spent on two 501(c)(4) groups that 
     could spend unlimited corporate money with little public 
     disclosure: Healthy Economy Now and Americans for Stable 
     Quality Care.
       Healthy Economy Now was created after a meeting at the 
     Democratic Senatorial Campaign Committee (DSCC) organized in 
     part by White House Deputy Chief of Staff Jim Messina. 
     Participants were told that the White House wanted to see ads 
     linking the poor economy to the need for health care 
     legislation, with one attendee remarking that ``given who is 
     behind this ask'' their group should support the effort.
       In early June 2009, PhRMA representatives met with ``the 
     team that is working with the White House on health care 
     reform'' to learn about White House messaging and ``how our 
     effort can be consistent with that.'' The team was a who's 
     who of Democratic strategists that included a previous head 
     of the DSCC; the producer of the 2008 Democratic National 
     Convention; and two partners at AKPD Message and Media, the 
     advertising firm founded by then Senior Advisor to the 
     President David Axelrod.
       When PhRMA's representative indicated that PhRMA was not 
     prepared to run advertisements before seeing how the health 
     care legislation developed, the White House team specifically 
     referred to a meeting the PhRMA CEOs had with Jim Messina the 
     day before and to White House efforts on drug importation 
     policy which had been communicated to PhRMA's chief lobbyist 
     that day.
       PhRMA's chief lobbyist reported that White House Chief of 
     Staff Rahm Emanuel asked for ``Harry and Louise ads thru 
     third party'' on July 7, 2009, the same day White House 
     officials met with PhRMA CEOs. PhRMA aired the ad a week 
     later.
       Public revelations about the hiring of political firms 
     close to the White House were perceived to be a ``big 
     problem.'' Presumably, because the firms producing and 
     placing some of PhRMA's advertising, including the 
     advertising through both Healthy Economy Now and Americans 
     for Stable Quality Care, had also received over $340 million 
     to handle advertising for President Obama's 2008 election 
     campaign.
       The White House attempted to steer the advertising and 
     advocacy tactics of a number of organizations, including the 
     AFL-CIO and AARP.
                                  ____


             [From the Wall Street Journal, June 11, 2012]

 ObamaCare's Secret History--How a Pfizer CEO and Big Pharma Colluded 
             With the White House at the Public's Expense.

       On Friday House Republicans released more documents that 
     expose the collusion between the health-care industry and the 
     White House that produced ObamaCare, and what a story of 
     crony capitalism it is. If the trove of emails proves 
     anything, it's that the Tea Party isn't angry enough.
       Over the last year, the Energy and Commerce Committee has 
     taken Nancy Pelosi's advice to see what's in the Affordable 
     Care Act and how it passed. The White House refused to 
     cooperate beyond printing out old press releases, but a dozen 
     trade groups turned over thousands of emails and other files. 
     A particular focus is the drug lobby, President Obama's most 
     loyal corporate ally in 2009 and 2010.
       The business refrain in those days was that if you're not 
     at the table, you're on the menu. But it turns out Big Pharma 
     was also serving as head chef, matre d'hotel and dishwasher. 
     Though some parts of the story have been reported before, the 
     emails make clear that ObamaCare might never have passed 
     without the drug companies. Thank you, Pfizer.
       The joint venture was forged in secret in spring 2009 amid 
     an uneasy mix of menace and opportunism. The drug makers 
     worried that health-care reform would revert to the liberal 
     default of price controls and drug re-importation that Mr. 
     Obama campaigned on, but they also understood that a new 
     entitlement could be a windfall as taxpayers bought more of 
     their products. The White House wanted industry financial 
     help and knew that determined business opposition could tank 
     the bill.
       Initially, the Obamateers and Senate Finance Chairman Max 
     Baucus asked for $100 billion, 90% of it from mandatory 
     ``rebates'' through the Medicare prescription drug benefit 
     like those that are imposed in Medicaid. The drug makers 
     wheedled them down to $80 billion by offsetting cost-sharing 
     for seniors on Medicare, in an explicit quid pro quo for 
     protection against such rebates and re-importation. As 
     Pfizer's then-CEO Jeff Kindler put it, ``our key deal points 
     . . . are, to some extent, as important as the total 
     dollars.'' Mr. Kindler played a more influential role than we 
     understood before, as the emails show.
       Thus began a close if sometimes dysfunctional relationship 
     with the Pharmaceutical Research and Manufacturers of 
     America, or PhRMA, as led by Billy Tauzin, the Louisiana 
     Democrat turned Republican turned lobbyist. As a White House 
     staffer put it in May 2009, ``Rahm's calling Nancy-Ann and 
     knows Billy is going to talk to Nancy-Ann tonight. Rahm will 
     make it clear that PhRMA needs a direct line of 
     communication, separate and apart from any coalition.'' 
     Nancy-Ann is Nancy-Ann DeParle, the White House health reform 
     director, and Rahm is, of course, Rahm.
       Terms were reached in June. Mr. Kindler's chief of staff 
     wrote a memo to her industry colleagues explaining that 
     ``Jeff would object to me telling you that his communication 
     skills and breadth of knowledge on the issues was very 
     helpful in keeping the meeting productive.'' Soon the White 
     House leaked the details to show that reform was making 
     health-care progress, and lead PhRMA negotiator Bryant Hall 
     wrote on June 12 that Mr. Obama ``knows personally about our 
     deal and is pushing no agenda.''
       But Energy and Commerce Chairman Henry Waxman then 
     announced that he was pocketing PhRMA's concessions and 
     demanding more, including re-importation. We wrote about the 
     double-cross in a July 16, 2009 editorial called ``Big Pharma 
     Gets Played,'' noting that Mr. Tauzin's ``corporate clients 
     and their shareholders may soon pay for his attempt to get 
     cozy with ObamaCare.''
       Mr. Hall forwarded the piece to Ms. DeParle with the 
     subject line, ``This sucks.'' The duo commiserated about how 
     unreasonable House Democrats are, unlike Mr. Baucus and the 
     Senators. The full exchange is

[[Page 9745]]

     among the excerpts from the emails printed nearby.
       Then New York Times reporter Duff Wilson wrote to a PhRMA 
     spokesman, ``Tony, you see the WSJ editorial, `Big Pharma 
     Gets Played'? I'm doing a story along that line for Monday.'' 
     The drug dealers had a problem.
       The White House rode to the rescue. In September Mr. Hall 
     informed Mr. Kindler that deputy White House chief of staff 
     Jim Messina ``is working on some very explicit language on 
     importation to kill it in health care reform. This has to 
     stay quiet.''
       PhRMA more than repaid the favor, with a $150 million 
     advertising campaign coordinated with the White House 
     political shop. As one of Mr. Hall's deputies put it earlier 
     in the minutes of a meeting when the deal was being 
     negotiated, ``The WH-designated folks . . . would like us to 
     start to define what `consensus health care reform' means, 
     and what it might include. . . . They definitely want us in 
     the game and on the same side.''
       In particular, the drug lobby would spend $70 million on 
     two 501(c)(4) front groups called Healthy Economy Now and 
     Americans for Stable Quality Care. In July, Mr. Hall wrote 
     that ``Rahm asked for Harry and Louise ads thru third party. 
     We've already contacted the agent.''
       Mr. Messina--known as ``the fixer'' in the West Wing--asked 
     on December 15, 2009, ``Can we get immediate robo calls in 
     Nebraska urging Nelson to vote for cloture?'' Ben Nelson was 
     the last Democratic holdout toward the Senate's 60-vote 
     threshold, and, as Mr. Messina wrote, ``We are at 59, we have 
     to have him.'' They got him.
       At least PhRMA deserves backhanded credit for the 
     competence of its political operatives--unlike, say, the 
     American Medical Association. A thread running through the 
     emails is a hapless AMA lobbyist importuning Ms. DeParle and 
     Mr. Messina for face-to-face meetings to discuss reforming 
     the Medicare physician payment formula. The AMA supported 
     ObamaCare in return for this ``doc fix,'' which it never got.
       ``We are running out of time,'' this lobbyist, Richard 
     Deem, writes in October 2009. How can he ``tell my colleagues 
     at AMA headquarters to proceed with $2m TV buy'' without a 
     permanent fix? The question answers itself: It was only $2 
     million.
       Mr. Waxman recently put out a rebuttal memo dismissing 
     these email revelations as routine, ``exactly what Presidents 
     have always done to enact major legislation.'' Which is 
     precisely the point--the normality is the scandal. In 2003 
     PhRMA took a similar road trip with the Bush Republicans to 
     create the Medicare drug benefit. That effort included 
     building public support by heavily funding a shell outfit 
     called Citizens for a Better Medicare.
       Of course Democrats claim to be above this kind of merger 
     of private profits and political power, as Mr. Obama did as a 
     candidate. ``The pharmaceutical industry wrote into the 
     prescription drug plan that Medicare could not negotiate with 
     drug companies,'' he said in 2008. ``And you know what? The 
     chairman of the committee who pushed the law through''--that 
     would be Mr. Tauzin--``went to work for the pharmaceutical 
     industry making $2 million a year.''
       Outrage over this kind of cronyism is what animates the Tea 
     Party and Occupy Wall Street, whose members aren't powerful 
     enough to get special dispensations from the government--or 
     even a fair hearing from their putative representatives.
       In one email, an AARP lobbyist writes the White House to 
     say ``We really need to talk,'' noting that calls from 
     seniors are running 14 to one against ObamaCare. But she 
     isn't calling to say that AARP is withdrawing support--only 
     that the White House needs to adjust its messaging. This is 
     how a bill passes over the objections of most Americans.
       The lesson for Republicans if they do end up running the 
     country next year is that their job is to restore the free 
     and fair market that creates broad-based economic growth. The 
     temptation will be to return for the sake of power to the 
     methods of Tom DeLay and Jack Abramoff. If they do, voters 
     will return the GOP to private life as surely as they did the 
     Democrats in 2010.
       The warning to business is also fundamental. Crony 
     capitalism undermines public trust in capitalism itself and 
     risks blowback that erodes the free market that private 
     companies need to prosper and that underlies the productivity 
     and competitiveness of the U.S. economy. The political 
     benefits of cronyism are inherently temporary, but the damage 
     it does is far more lasting.
       As for Big Pharma, the lobby ultimately staved off Mr. 
     Waxman's revolt and avoided some truly harmful drug 
     policies--for now. But over the long term their products are 
     far more vulnerable to the command-and-control central 
     planning that will erode medical innovation, and their $80 
     billion fillip is merely the teaser rate.
       Mr. Kindler resigned from Pfizer in December 2010 under 
     pressure from directors, its stock having lost 35% of its 
     value since he became CEO. Mr. Tauzin left PhRMA in February 
     2010, with the Affordable Care Act a month from passage.
       The truth is that this destructive legislation wasn't 
     inevitable and far better reforms were possible. They still 
     are, though they might have gained more traction in 2009 and 
     2010 with the right support. The miracle is that, despite 
     this collusion of big government and big business, ObamaCare 
     has received the public scorn that it deserves.
                                  ____


                [From the New York Times, June 8, 2012]

        Lobby E-Mails Show Depth of Obama Ties to Drug Industry

                            (By Peter Baker)

       Washington.--After weeks of quiet talks, drug industry 
     lobbyists were growing nervous. If they were to cut a deal 
     with the White House on overhauling health care, they needed 
     to be sure President Obama would stop a proposal by his 
     liberal allies intended to bring down medicine prices.
       On June 3, 2009, one of the lobbyists e-mailed Nancy-Ann 
     DeParle, the president's top health care adviser. Ms. DeParle 
     sent a message back reassuring the lobbyist. Although Mr. 
     Obama was overseas, she wrote, she and other top officials 
     had ``made decision, based on how constructive you guys have 
     been, to oppose importation on the bill.''
       Just like that, Mr. Obama's staff abandoned his support for 
     the reimportation of prescription medicines at lower prices 
     and with it solidified a growing compact with an industry he 
     had vilified on the campaign trail the year before. Central 
     to Mr. Obama's drive to overhaul the nation's health care 
     system was an unlikely collaboration with the pharmaceutical 
     industry that forced unappealing trade-offs.
       The e-mail exchange that day three years ago was among a 
     cache of messages obtained from the industry and released in 
     recent weeks by House Republicans--including a new batch put 
     out on Friday morning detailing the industry's advertising 
     campaign in favor of Mr. Obama's proposal. The broad contours 
     of the president's dealings with the drug industry were known 
     in 2009 but the newly public e-mails open a window into the 
     compromises underlying a health care overhaul now awaiting 
     the judgment of the Supreme Court.
       Mr. Obama's deal-making in 2009 represented a pivotal 
     moment in his young presidency, a juncture where the heady 
     idealism of the campaign trail collided with the messy 
     reality of Washington policymaking. A president who had 
     promised to air negotiations on C-Span cut a closed-door deal 
     with the powerful pharmaceutical lobby, signifying to some 
     disillusioned liberal supporters a loss of innocence, or 
     perhaps even the triumph of cynicism.
       But if it was a Faustian bargain for the president, it was 
     one he deemed necessary to forestall industry opposition that 
     had thwarted efforts to cover the uninsured for generations. 
     Without the deal, in which the industry agreed to provide $80 
     billion for health reform in exchange for protection from 
     policies that would cost more, Mr. Obama and Democratic 
     allies calculated he might get nowhere.
       ``There was no way we had the votes in either the House or 
     the Senate if PhRMA was opposed--period,'' said a senior 
     Democratic official involved in the talks, referring to the 
     Pharmaceutical Research and Manufacturers of America, the 
     drug industry trade group.
       Republicans see the deal as hypocritical. ``He said it was 
     going to be the most open and honest and transparent 
     administration ever and lobbyists won't be drafting the 
     bills,'' said Representative Michael C. Burgess of Texas, one 
     of the Republicans on the House Energy and Commerce 
     subcommittee that is examining the deal. ``Then when it came 
     time, the door closed, the lobbyists came in and the bills 
     were written.''
       Some of the liberals bothered by the deal-making in 2009 
     now find the Republican criticism hard to take given the 
     party's long-standing ties to the pharmaceutical industry.
       ``Republicans trumpeting these e-mails is like a fox 
     complaining someone else raided the chicken coop,'' said 
     Robert Reich, the former labor secretary under President Bill 
     Clinton. ``Sad to say, it's called politics in an era when 
     big corporations have an effective veto over major 
     legislation affecting them and when the G.O.P. is usually the 
     beneficiary. In this instance, the G.O.P. was outfoxed. Who 
     are they to complain?''
       Dan Pfeiffer, the White House communications director, said 
     the collaboration with industry was in keeping with the 
     president's promise to build consensus.
       ``Throughout his campaign, President Obama was clear that 
     he would bring every stakeholder to the table in order to 
     pass health reform, even longtime opponents like the 
     pharmaceutical industry,'' Mr. Pfeiffer said. ``He understood 
     correctly that the unwillingness to work with people on both 
     sides of the issue was one of the reasons why it took a 
     century to pass health reform.''
       In a statement, PhRMA said that its interactions with Mr. 
     Obama's White House were part of its mission to ``ensure 
     patient access'' to quality medicine and to advance medical 
     progress.
       ``Before, during and since the health care debate, PhRMA 
     engaged with Congress and the administration to advance these 
     priorities,'' said Matthew Bennett, the group's senior vice 
     president.
       Representative Henry Waxman of California, the top Democrat 
     on the House committee and one of those who balked at Mr.

[[Page 9746]]

     Obama's deal in 2009, now defends it as traditional 
     Washington lawmaking.
       ``Presidents have routinely sought the support and lobbying 
     clout of private industry in passing major legislation,'' Mr. 
     Waxman's committee staff said in a memo released in response 
     to the e-mails. ``President Obama's actions, for example, are 
     no different than those of President Lyndon B. Johnson in 
     enacting Medicare in 1965 or President George W. Bush in 
     expanding Medicare to add a prescription drug benefit in 
     2003.''
       Still, what distinguishes the Obama-industry deal is that 
     he had so strongly rejected that very sort of business as 
     usual. During his campaign for president, he specifically 
     singled out the power of the pharmaceutical industry and its 
     chief lobbyist, former Representative Billy Tauzin, a 
     Democrat-turned-Republican from Louisiana, as examples of 
     what he wanted to change.
       ``The pharmaceutical industry wrote into the prescription 
     drug plan that Medicare could not negotiate with drug 
     companies,'' Mr. Obama said in a campaign advertisement, 
     referring to Mr. Bush's 2003 legislation. ``And you know 
     what? The chairman of the committee who pushed the law 
     through went to work for the pharmaceutical industry making 
     $2 million a year.
       ``Imagine that,'' Mr. Obama continued. ``That's an example 
     of the same old game playing in Washington. You know, I don't 
     want to learn how to play the game better. I want to put an 
     end to the game playing.''
       After arriving at the White House, though, he and his 
     advisers soon determined that one reason Mr. Clinton had 
     failed to pass health care reform was the resilient 
     opposition of industry. Led by Rahm Emanuel, his chief of 
     staff and a former House leader, and Jim Messina, his deputy, 
     White House officials set out to change that dynamic.
       The e-mails, which the House committee obtained from PhRMA 
     and other groups after the White House declined to provide 
     correspondence, document a tumultuous negotiation, at times 
     transactional, at others prickly. Each side suspected the 
     other of betraying trust and operating in bad faith.
       The White House depicted in the message traffic comes 
     across as deeply involved in the give-and-take, and not 
     averse to pressure tactics, including having Mr. Obama 
     publicly assail the industry unless it gave in on key points. 
     In the end, the White House got the support it needed to pass 
     its broader priority, but industry emerged satisfied as well. 
     ``We got a good deal,'' wrote Bryant Hall, then senior vice 
     president of the pharmaceutical group.
       Mr. Bryant, now head of his own firm, declined to comment. 
     So did Mr. Emanuel, now mayor of Chicago; Mr. Messina, now 
     the president's campaign manager; and Ms. DeParle, now a 
     White House deputy chief of staff. Mr. Tauzin, who has left 
     his post as the industry's lobbyist, did not respond to 
     messages.
       The latest e-mails released on Friday underscore the 
     detailed discussions the two sides had about an advertising 
     campaign supporting Mr. Obama's health overhaul.``They plan 
     to hit up the `bad guys' for most of the $,'' a union 
     official wrote after an April meeting with Mr. Messina and 
     Senate Democratic aides. ``They want us to just put in enough 
     to be able to put our names in it--he is thinking @100K.''
       In July, the White House made clear that it wanted 
     supportive ads using the same characters the industry used to 
     defeat Mr. Clinton's proposal 15 years earlier. ``Rahm asked 
     for Harry and Louise ads thru third party,'' Mr. Hall wrote.
       Industry and Democratic officials said privately that the 
     advertising campaign was an outgrowth of the fundamental 
     deal, not the goal of it. The industry traditionally 
     advertises in favor of legislation it supports.
       Either way, talks came close to breaking down several 
     times. In May, the White House was upset that the industry 
     had not signed onto a joint statement. One industry official 
     wrote that they should sign: ``Rahm is already furious. The 
     ire will be turned on us.''
       By June, it came to a head again. ``Barack Obama is going 
     to announce in his Saturday radio address support for 
     rebating all of D unless we come to a deal,'' Mr. Hall wrote, 
     referring to a change in Medicare Part D that would cost the 
     industry.
       In the end, the two sides averted the public confrontation 
     and negotiated down to $80 billion from $100 billion. But the 
     industry believed the White House was rushing an announcement 
     to deflect political criticism.
       ``It's pretty clear that the administration has had a 
     horrible week on health care reform, and we are now getting 
     jammed to make this announcement so the story takes a 
     positive turn before the Sunday talk shows beat up on 
     Congress and the White House,'' wrote Ken Johnson, a senior 
     vice president of the pharmaceutical organization.
       In the end, House Democrats imposed some additional costs 
     on the industry that by one estimate pushed the cost above 
     $100 billion, but the more sweeping policies the firms wanted 
     to avoid remained out of the legislation. Mr. Obama signed 
     the bill in March. He had the victory he wanted.
                                  ____


             [From the Wall Street Journal, June 22, 2012]

                 Strassel: Axelrod's ObamaCare Dollars

                       (By Kimberley A. Strassel)

       Emails suggest the White House pushed business to the 
     presidential adviser's former firm to sell the health-care 
     law.
       Rewind to 2009. The fight over ObamaCare is raging, and a 
     few news outlets report that something looks ethically rotten 
     in the White House. An outside group funded by industry is 
     paying the former firm of senior presidential adviser David 
     Axelrod to run ads in favor of the bill. That firm, AKPD 
     Message and Media, still owes Mr. Axelrod money and employs 
     his son.
       The story quickly died, but emails recently released by the 
     House Energy and Commerce Committee ought to resurrect it. 
     The emails suggest the White House was intimately involved 
     both in creating this lobby and hiring Mr. Axelrod's firm--
     which is as big an ethical no-no as it gets.
       Mr. Axelrod--who left the White House last year--started 
     AKPD in 1985. The firm earned millions helping run Barack 
     Obama's 2008 campaign. Mr. Axelrod moved to the White House 
     in 2009 and agreed to have AKPD buy him out for $2 million. 
     But AKPD chose to pay Mr. Axelrod in annual installments--
     even as he worked in the West Wing. This agreement somehow 
     passed muster with the Office of Government Ethics, though 
     the situation at the very least should have walled off AKPD 
     from working on White-House priorities.
       It didn't. The White House and industry were working hand-
     in-glove to pass ObamaCare in 2009, and among the vehicles 
     supplying ad support was an outfit named Healthy Economy Now 
     (HEN). News stories at the time described this as a 
     ``coalition'' that included the Pharmaceutical Research and 
     Manufacturers of America (PhRMA), the American Medical 
     Association, and labor groups--suggesting these entities had 
     started and controlled it.
       House emails show HEN was in fact born at an April 15, 2009 
     meeting arranged by then-White House aide Jim Messina and a 
     chief of staff for Democratic Sen. Max Baucus. The two 
     politicos met at the Democratic Senatorial Campaign Committee 
     (DSCC) and invited representatives of business and labor.
       A Service Employees International Union attendee sent an 
     email to colleagues noting she'd been invited by the Baucus 
     staffer, explaining: ``Also present was Jim Messina. . . . 
     They basically want to see adds linking HC reform to the 
     economy . . . there were not a lot of details, but we were 
     told that we would be getting a phone call. Well that call 
     came today.''
       The call was from Nick Baldick, a Democratic consultant who 
     had worked on the Obama campaign and for the DSCC. Mr. 
     Baldick started HEN. The only job of PhRMA and others was to 
     fund it.
       Meanwhile, Mr. Axelrod's old firm was hired to run the ads 
     promoting ObamaCare. At the time, a HEN spokesman said HEN 
     had done the hiring. But the emails suggest otherwise. In 
     email after email, the contributors to HEN refer to four men 
     as the ``White House'' team running health care. They 
     included John Del Cecato and Larry Grisolano (partners at 
     AKPD), as well as Andy Grossman (who once ran the DSCC) and 
     Erik Smith, who had been a paid adviser to the Obama 
     presidential campaign.
       In one email, PhRMA consultant Steve McMahon calls these 
     four the ``WH-designated folks.'' He explains to colleagues 
     that Messrs. Grossman, Grisolano and Del Cecato ``are very 
     close to Axelrod,'' and that ``they have been put in charge 
     of the campaign to pass health reform.'' Ron Pollack, whose 
     Families USA was part of the HEN coalition, explained to 
     colleagues that ``the team that is working with the White 
     House on health-care reform. . . . [Grossman, Smith, Del 
     Cecato, Grisolano] . . . would like to get together with 
     us.'' This would provide ``guidance from the White House 
     about their messaging.''
       According to White House visitor logs, Mr. Smith had 28 
     appointments scheduled between May and August--17 made 
     through Mr. Messina or his assistant. Mr. Grossman appears in 
     the logs at least 19 times. Messrs. Del Cecato and Grisolano 
     of AKPD also visited in the spring and summer, at least twice 
     with Mr. Axelrod, who was deep in the health-care fight.
       A 2009 PhRMA memo also makes clear that AKPD had been 
     chosen before PhRMA joined HEN. It's also clear that some 
     contributors didn't like the conflict of interest. When, in 
     July 2009, a media outlet prepared to report AKPD's hiring, a 
     PhRMA participant said: ``This is a big problem.'' Mr. 
     Baldick advises: ``just say, AKPD is not working for PhRMA.'' 
     AKPD and another firm, GMMB, would handle $12 million in ad 
     business from HEN and work for a successor 501(c)4.
       A basic rule of White House ethics is to avoid even the 
     appearance of self-dealing or nepotism. If Mr. Axelrod or his 
     West Wing chums pushed political business toward Mr. 
     Axelrod's former firm, they contributed to his son's salary 
     as well as to the ability of the firm to pay Mr. Axelrod what 
     it still owed him. Could you imagine the press frenzy if Karl 
     Rove had done the same after he joined the White House?
       Messrs. Axelrod and Messina are now in Chicago running Mr. 
     Obama's campaign. Mr. Axelrod, the White House and a partner 
     for AKPD didn't respond to requests for comment on their role 
     in HEN, the tapping of Mr. Baldick, and the redolent hiring 
     of

[[Page 9747]]

     AKPD. Until the White House explains all this, voters can 
     fairly conclude that the President's political team took 
     their Chicago brand of ethics into the White House.

  Mr. McCAIN. Mr. President, I know my other colleagues are waiting to 
speak, but last month when we voted down this amendment to allow drug 
reimportation from pharmacies that are accredited by both the Canadian 
and American Governments, my statement was, and I will repeat it:

       In a normal world, this would probably require a voice 
     vote. But what we are about to see is the incredible 
     influence of the special interests, particularly PhRMA, here 
     in Washington.
       What you are about to see [as I predicted just before the 
     vote] is the reason for the cynicism the American people have 
     about the way we do business in Washington. PhRMA--one of the 
     most powerful lobbies in Washington--will exert its influence 
     again at the expense of average low-income Americans who 
     will, again, have to choose between medication and eating.

  In response the Senator from New Jersey said, in opposition to my 
amendment:

       It is not the special interests that have caused the Senate 
     countless times to reject this policy. . . . .
       This is about the health and security of the American 
     people. That is why time after time the Senate has rejected 
     it. It is why it should be rejected once again.

  He was correct. It was rejected. The American people were rejected in 
favor of one of the most powerful special interest lobbies in 
Washington and it is a shame.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Manchin). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________