[Public Papers of the Presidents of the United States: William J. Clinton (1995, Book II)]
[September 20, 1995]
[Pages 1397-1403]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks and a Question-and-Answer Session at the Little Sisters of the 
Poor Home for the Aged in Denver, Colorado
September 20, 1995

    The President. The reason I wanted to come here today is because by 
coming I hope to honor the work that this home has done and also to 
point out how dramatically our Nation has been able to improve care for 
elderly people in the last several years because of the commitments we 
have made through the Medicare and Medicaid program.
    And as you know, there's a big debate in Washington going on now 
about balancing the budget and what we have to do to balance the budget. 
And the health care programs have been the fastest growing part of our 
budget, just as they've been the fastest growing part of a lot of 
families' budgets--the cost of health care. So I strongly believe we 
should balance the budget, and I believe we have to lower the rate of 
growth in health care spending. But the real question is, how do you do 
it?
    And the Medicaid program I think is particularly important because 
70 percent of the people who receive the benefits are elderly and 
disabled people who live in places like this. And the program is funded 
between 50 and 80 per-


[[Page 1398]]

cent, depending on the State, by the Federal Government, and the State 
government makes up the rest. And it's administered by the Governors. 
Governor Romer is here, and he and I worked together for years when we 
were both Governors on this.
    But one of the congressional proposals we believe--he and I 
believe--would cut the Medicaid spending by so much that it would 
endanger the ability of our country to care for every eligible person 
and to maintain the high quality of care. You know, when President 
Reagan--this has been a bipartisan issue, I should add, until this very 
moment. In 1987, President Reagan signed a law that many of us who were 
Governors strongly supported, upgrading the standards of care in 
residential facilities. You remember that.
    Before that, as many as 40 percent of the people, elderly people in 
residential facilities in this country, were over-medicated, were often 
unnecessarily physically restrained. It was a very different situation, 
not here, but in other places in these for-profit homes. And since then, 
there's been this dramatic improvement in care. Now, the Congress did 
make some mistakes, and we've largely corrected them, I think, in the 
last 3 years, in trying to make sure that the program grew at a 
manageable rate.
    But with more people living longer and more and more people becoming 
eligible for Medicaid, for this kind of care, I think it is very, very 
important that we recognize that we have two fundamental moral 
obligations here.
    I think we're obligated to balance this budget to take the debt off 
our children and grandchildren, but we're obligated to do it in a way 
that represents--that reflects our responsibility to our parents and 
grandparents. And in doing the right thing by America across the 
generations, it's not always easy, but it's clearly one of our most 
important obligations.
    And of course, as all of you know, the families--if we were to have 
a budget in place in the National Government which would make hundreds 
of thousands of people over the next 7 years ineligible for support in 
nursing homes and millions of people ineligible for help for home care, 
it would have a drastic impact not only on the senior citizens but on 
their children.
    So I wanted to come here just to highlight to America not only the 
magnificent work being done here by Mother Patricia and others but to 
talk about what's being done all over America and how we have to find a 
way to balance the budget without wrecking the system that makes this 
kind of thing possible.
    I think it must be very rewarding for all of you to know that not 
only that this place exists for you, but there are places like this all 
over America where people can live in dignity and security and have not 
only their health care but their emotional needs met.
    So that's why we're here. And I'd like to--perhaps the Governor 
would like to say something, but I'd like to spend whatever time I can 
listening to you talk a bit.

[At this point, Gov. Roy Romer of Colorado advocated a national floor 
for Medicare and Medicaid so States would provide the same minimum 
standard of care.]

    The President. I should say, just to explain what the Governor said, 
yesterday the House of Representatives seemed to be embracing--the 
majority of the House of Representatives seemed to be embracing a plan 
where the Federal Government would just send every State a check for the 
next 7 years and cut what we project to spend on Medicaid by about a 
third, give them a third less and tell them to do whatever they wanted 
to with the money, which means that now we have a more or less uniform 
system. That is, States can provide more services, if they like, to 
seniors or to poor children under Medicaid, but there is a floor below 
which they can't go, which means that as more and more families move 
across the country and live in different places, it means that their 
parents and grandparents can live anywhere they want with them, be in 
any kind of facility and know that at least within some limits, they'll 
be treated equally across the country. That's the point the Governor is 
trying to make.

[A participant described the service her organization performed for 
seniors to ensure their independence and dignity and stated that 
Medicaid was essential. She then explained that she became involved 
because she was inspired by Mother Patricia Friel, administrator, Little 
Sisters of the Poor Home for the Aged.]

    The President. She's an inspiration to me. I think I might--
[laughter]--I'm interested in living to be 90 now. Before I got here 
this morning, I didn't know. [Laughter]
    Let me say that our best estimates are--the proposal that I made 
would basically slow the

[[Page 1399]]

rate of growth of spending and require some real discipline on the part 
of the States. But it is about a third as costly as the congressional 
proposal. We estimate the congressional proposal could keep, within 7 
years, 300,000 people who are now eligible out of nursing homes and over 
a million people who are now eligible from getting home health services.
    And of course, obviously, with people--the fastest growing group of 
people in America today by percentage are people over 80. And more and 
more of them are able to live at home because we're learning so much 
more about what it takes to stay healthy, stay fit. As you know--you're 
working with them--it would be, I think, a terrible mistake, indeed, 
even a terrible economic mistake to do anything that would undermine our 
ability to support home care.

[A participant explained that helping senior citizens to remain 
independent was more cost-effective and allowed them their dignity.]

    The President. Since you made that point, I'd like to, if I might, 
just interject one thing that I've not seen in any coverage of this 
anywhere. And I'm not faulting the press; I think it's something that 
none of us have really thought to emphasize. But, Roy, a lot of these 
programs where some of the people are on Medicaid and some aren't depend 
on the Medicaid money, in effect, to subsidize the service of the 
others. So the number of people who could be losing the benefits of this 
could be far greater than the number of people in Medicaid because of 
that.
    As you also know, Medicaid for the last several years has provided 
help to low-income elderly people to help them buy into Part B of 
Medicare. So also, another thing that will happen, I believe, is that we 
could be getting very false savings by all of a sudden having elderly 
people drop out of Part B of Medicare, and it looks like we're spending 
less money on Medicare, so they don't get regular care, and then we wind 
up aggravating a problem we already have, which is spending too much 
money on intensive care when people are desperately ill and maybe 
nothing can be done.
    I'm glad you brought that up because I hadn't thought to mention 
that to anyone in this whole debate. But I know it to be true from my 
own experience as a Governor. We had lots and lots of programs where 
Medicare--we put in a little money, let's say, for half the people, and 
the other half of the people, maybe they could come up with a little 
something, but they really basically got to be served at a discount 
because Medicaid was there.
    What about you?

[A participant described how a cutback in Medicaid would affect her 
family and asked if the working class would be the only group affected 
by the changes.]

    The President. The answer is, I think, to be perfectly accurate, I 
think there is--a small part of the savings would come from charging 
wealthy retirees and their families significantly more for a part of 
Medicare. And in that sense, in an atmosphere of cutbacks, that was a 
part of the plan that I offered last year when I was trying to get 
universal health care coverage. But the vast, vast majority of the 
burden will be borne by the middle class and by lower income elderly 
people and their families, because they tend to rely--first of all, you 
have to be of a certain income level to be eligible for Medicaid. And 
secondly, in Medicare--75 percent of the people on Medicare have family 
incomes of under $24,000.
    And again, I think this becomes a moral question. If the whole thing 
were going broke and we couldn't do it, we would all have to look at 
whatever options were available, where what we need to do is to fix and 
reform these systems in a disciplined way so they'll be there from now 
on. And we can do that without causing the kind of havoc that's going to 
be visited on average people's lives, I think.
    One of the reasons I wanted you all to be here is I want people to 
understand that this is a thing that has family impact.

[Governor Romer explained that Colorado calculations showed the 
congressional proposal would increase costs to the State by $40 to $50 
million at a time when the State had planned to increase education 
expenses by the same amount, forcing the State to choose between 
education and health care.]

    The President. In other words, the Congress is taking the position 
that they'll just give this arbitrary cut to the States, and they are 
sure they'll be able to just manage the program better. But the truth 
is, they'll be making decisions just like you will be. Children will be 
making decisions between their parents and their own

[[Page 1400]]

kids, between their health care and their parents and the education of 
their children. States will be making decisions between the health care 
of their elderly citizens and the education of their children in a much 
more extreme way than in our experience.
    And again, I would say, if it were absolutely necessary to either 
save Medicare or Medicaid or to balance the budget, it would be one 
thing. But it is not necessary. There are many options to balance the 
budget and preserve what you are celebrating here around this circle 
this morning.
    Would you like to say anything?

[A participant suggested that the money being spent on Medicaid and 
Medicare be invested.]

    The President. You mean invested by the Government?
    Q. Yes.
    The President. Well, one of the things that they propose to do, that 
they're trying to do, the Congress is trying to do, is to allow people 
to invest some of their money that would otherwise go into Medicare and 
Medicaid into a medical savings account.
    The problem with doing it that way--I'll answer your two questions--
and I've thought of both things. I think a medical savings account, by 
taking some of the money that would have gone into Medicare-Medicaid, 
giving it to citizens, letting them invest it in a medical savings 
account, the good thing about that is that you might be able to get a 
higher rate of return than the Government gets a--I mean, we invest 
essentially in Government securities. The problem is that it only works 
if you happen to be a healthy elderly person, if you see what I mean. In 
other words, if you have a period of long-term health where you're 
investing and earning, you do great. If you get sick in a hurry, where 
you have to draw down, you'll be in the hole, which is why we have 
programs for the whole society. So the medical savings account may be 
something that we ought to explore and experiment with, but it will 
always, I'm convinced, be sort of an add-on, a marginal support for what 
needs to be a fundamental program.
    The problem with the Government investing in mutual funds is--knock 
on wood, I hate to say this since the stock market has gone up so much 
since I've been President--is that it's fine if we get a higher rate of 
return than we get from Government securities, but the problem is you 
have to be taking money out on a regular basis, as you know, to fund a 
health care program, and sometimes the stock market's going up and 
sometimes it's going down and when the time came for our quarterly 
withdrawal if there had been a 50-point drop the day before in the stock 
market, we could be really in deep trouble, which is why we've always 
relied on the basic steady but lower rate of return from Government 
securities when we invest in them.
    Q. Can you do half-and-half?
    The President. Well, I don't know. The problem is--another problem 
is, because we've been running a deficit, is that we have to have the 
money to basically, in effect, to finance our own deficit. It may be an 
option, but I think that's something--that's one thing that States will 
be able to look at if they have some more flexibility here.
    But the problem is, when you make those investments in mutual funds, 
the thing that really makes it go is if you believe there is a long-term 
trend in the stock market, you have to have the flexibility, just like 
an individual investor, of when to withdraw. In other words, the 
investor decides when to withdraw. So if you lose money, you say, ``Oh, 
it's awful, but thank goodness I don't have to cash my stocks in. I 
think there will be a turn.'' Even after October '87, the people who 
could ride it through if they could wait a year or two, were making a 
profit again. But the Government, we'd have to withdraw these funds on a 
regular basis to pay our bills, so that is the risk inherent in that.
    Q. Well, according to the trustees' report, though, if we go with 
your plan, we'll be out of money like 2005, and the Republican plan 
would be 2015.
    The President. The trustees haven't said that yet. It depends on 
what the Republicans do. If the Republicans have all of their Medicare 
cuts coming out of doctors and hospitals, they could stretch it to 2015, 
but the general conclusion of the health care community is that if they 
did that, they would be closing large numbers of health care facilities, 
and a huge number of doctors would simply opt out of the program. So 
that's why they've got a problem. They actually adopt--right now, they 
adopt cuts in the hospital program--the Part A--about the same size as 
ours. But they have this $90-billion amorphous amount of money that they 
can't say how

[[Page 1401]]

they're going to save yet. So they can't go any further than we do 
unless they take more money away from the hospitals and doctors.
    My problem is that--let me just back up and say, my problem in this 
whole thing is, when we put our budget together, we asked the following 
questions to the best of our ability. We asked the substantive 
questions. How much can we take out of Medicaid over the next 7 years 
without having doctors opt out or closing hospitals that need to stay 
open or really damaging the elderly in the country? How much can we cut 
Medicare over the next 7 years without really hurting the hospitals and 
the medical delivery system that depends on it? Let's squeeze it as hard 
as we can. That's what we did.
    What they did was to say, ``We promised to balance the budget and 
give a $250-billion tax cut to the American people. How much do we have 
to cut Medicare and Medicaid to meet that number?'' It seems to me that 
once you commit to an end of balancing the budget, then you have to say, 
how can you balance the budget consistent with how much money you can 
take out of the health care system?
    What they said is, ``Here is our target date. Here's how much of a 
tax cut we're going to give. Therefore, we're going to take $450 billion 
out of the health care system.'' And I think that, frankly, they have no 
idea whether they can do that. They don't know what the system will 
bear. And I think it's far better to be more disciplined about it and 
take a little bit longer and know that you're not going to upset this 
complex of relationships here that have developed. If you do that, you 
can always experiment with the medical savings accounts; you could 
always experiment with alternative investments; you could always do 
these things. But you have to realize that these people, they have to 
get up and run this place tomorrow.
    Q. That's right.
    The President. And the hospital downtown, they have to get up and 
run those places. I mean, their lives go on. And some decision we make 
in Washington may or may not be consistent with the reality of what it 
takes to run the place. That's what we're trying to struggle with there.

[The participant described the percentage of the budget which should not 
be cut and then asked why cuts could not come from the remaining 
percentage, like tobacco subsidies.]

    The President. Well, one thing, there is a lot cut out of that, a 
great deal being cut out of that. And a lot of that is----
    Q. How about more?
    The President. But a lot of what's left is education and 
infrastructure and the things that grow the economy. Again, you have to 
understand, I think the issue is: What are our objectives here? If our 
objectives are to balance the budget, secure the financial integrity of 
Medicare so that it's there from now on, and invest enough in Medicaid 
and Medicare to make sure that the fundamental mission can be achieved 
as we slow the rate of inflation growth, and then the rest of your money 
we should spend to provide the national defense and to grow the economy 
and to help people help themselves. Then we should put all that together 
and come out with a plan to balance the budget as quickly and as well as 
we can.
    But they did it backwards. They said, ``We promise to balance it in 
7 years and to give a $250 billion tax cut--this is how much we have to 
cut this other stuff--and to increase investment in defense to build new 
weapons systems.''
    And I just believe that--believe me, we are looking at all possible 
alternatives. I have already passed--the first 2 years of my Presidency 
with the previous Congress, they took the deficit from $290 billion to 
$160 billion; they added 3 years to the life of the Medicare Trust Fund; 
they voted to reduce the Government to its smallest size since John 
Kennedy was President. I mean, it is the first time in decades that we 
have actually reduced that other part of the budget, dramatically.
    But that other part of the budget also includes things that will 
really shape our children's future: research and development, investment 
in technology, medical research, a whole range of things. It's now a 
much smaller part of our budget than it used to be. Most of what we 
spend money on today is Medicare, Medicaid, Social Security, and 
defense.
    Now, the other thing you should know if it weren't for--to make the 
point further about how much we've been cutting--if it weren't for the 
interest on the debt we pay today for the debt run up between 1981 and 
the day I became President in 1993, the budget would be in balance 
today. So there really is an argument for trying to bring this budget 
into balance so you stop wasting so much money on interest

[[Page 1402]]

and start freeing it up. And we are doing our best to cut these other 
things.
    For example, the tobacco program--and you know I'm the first sitting 
President ever to take on this issue to try to limit teenage smoking, 
and I'm in a big struggle with tobacco companies. But you should know 
that the tobacco program itself is self-financing. There is no direct 
Government subsidy to tobacco farmers. They pay a fee, and then it 
rotates back there. So it's a self-financing program. The only 
expenditure the Government has, I think, is for whatever administrative 
costs the Department of Agriculture has to administer the program, which 
is not--it's a very small amount of money.
    And believe me, I tried to raise the cigarette tax to help pay for 
health care last year, so I'm open to that. But there's just not much 
money there.

[A participant expressed concern about fraud and abuse on the part of 
the providers.]

    The President. That's correct. There has been a substantial amount 
of fraud and abuse on the part of providers. And the General Accounting 
Office of the Congress has estimated that it may be as much as, in some 
years, 10 percent of the total cost, which is a lot of money. So, to try 
to address that, we have tripled the number of FBI agents that are 
working on health care fraud and we have doubled the number of 
prosecutions of serious Medicare and Medicaid fraud. And that's 
beginning to make a big difference.
    And that's one of the ways that we proposed to meet the inflation 
targets. If you can take that out of the system, you can continue to 
give homes like this one an adequate return through Medicaid to do the 
work that they have to do. That's what we're--but you're absolutely 
right; in terms of the recipients, there is no question of fraud. You 
never have any questions about Medicare and Medicaid eligibility the way 
you do the Food Stamp Program, for example, which, by the way, we're 
also doing a better job of--food stamp rolls are down, and we're getting 
a hold of that.
    But since you're eligible here by age in Medicare, or by age and 
income in Medicaid, it's a much clearer situation. And you're right, 
it's very hard to abuse the program,

[A participant explained how excessive regulations interfered with 
quality respite care.]

    The President. You mean you can't just do that, having met the 
standards of running this operation?

[The participant explained that eliminating unnecessary regulations 
would help to ensure that senior citizens received good respite care 
while their families were away.]

    The President. You know, no one has ever mentioned this to me 
before. This is very interesting, and I'm somewhat embarrassed to say 
it's never occurred to me before. It's a great idea.
    Let me ask you, if you wouldn't mind, would you be willing just to 
put on paper for me the kinds of things that you think ought to be 
changed, that you think would facilitate you doing this kind of thing? 
I'd be happy to see what I could do, because we are really working 
hard--we have already abolished 16,000 pages of Federal regulation. And 
we're trying to do a lot more, because I think a lot of things are over-
regulated and they focus too much on input rather than evaluating the 
results. If you get good results--as a matter of fact, this is--I don't 
know why we shouldn't do it in this context, but we are now picking 50 
big companies in the country for a new experiment on clean air. And if 
they tell us that they will meet the clean air requirements of the law 
and be tested on a regular basis, we'll let them throw the rulebook away 
for figuring out how to do it. In other words, if they can figure out 
how to do it cheaply and more efficiently than all the rules and 
regulations, they can just ignore them, because all we care about is 
whether the air is clean.
    So those are the kinds of things that I think we ought to be looking 
at. So if you would send me that suggestion I would be very, very happy 
to--if you could also send a copy to the Governor, because some of those 
things may be things that are within the State's ability to deal with 
rather than the Federal Government.

[A participant described the respite care program offered by the Little 
Sisters of the Poor.]

    Governor Romer. Do you have a program for Governors? [Laughter]
    The President. You know, Roy and I would like a little respite care 
here. [Laughter]
    We'll be back in a month.

[Mother Patricia Friel asked for concluding remarks. A participant 
described her life at the

[[Page 1403]]

home and indicated that it would not have been possible without Medicare 
and Medicaid.]

    The President. Would you like to say anything before we go?

[A participant described the impact of Medicare and Medicaid on her 
life.]

    The President. I don't know what we'd do if it weren't for people 
like you who would work until you're 74. Bless you. Thank you.

[Archbishop Francis Stafford of the Denver archdiocese thanked the 
President and the participants.]

    The President. Let me also tell you just one thing. We're going to 
do our best in the next 2 months not to play politics with your lives. I 
mean, not to unduly aggravate the differences, not to--I'm going to do 
my best to get an agreement here that will give the country the 
confidence that we can balance our books and go on into our future but 
that also will give you the confidence that you can educate your son and 
not worry about your mother. I believe it can be done.
    But I believe we have to look realistically, and we have to do it 
from the bottom up. We have to know what is possible, and that's why I 
wanted to meet here today. And we're going to explore every conceivable 
alternative. But in the end, we need to--places like this need to do 
well, and programs like yours, helping people stay home and running 
respite care, they need to do well, because we're all going to be--this 
country is going to get older, and people are going to live longer, and 
that is a good thing. It is a good thing, not a bad thing. We just have 
to find a way to manage it, and it's a new thing.
    Governor Romer. Mr. President, you're not going to have a chance to 
see this whole facility. I've just been staring at this floor. I don't 
know----
    The President. Amazing, isn't it?

[Governor Romer and Mother Friel made brief concluding remarks.]

    The President. Thank you very much.

Note: The President spoke at 9:43 a.m. in the first floor lounge.