[Public Papers of the Presidents of the United States: WILLIAM J. CLINTON (1999, Book II)]
[July 22, 1999]
[Pages 1292-1303]
[From the U.S. Government Publishing Office www.gpo.gov]



[[Page 1292]]


Remarks in a Conversation on Medicare in Lansing, Michigan
July 22, 1999

    The President. Thank you, and good morning. I would like to begin by 
saying I am honored to be here. I thank all of you for coming. Somebody 
fell out of the chair--are you all right? [Laughter] I wish I had a 
nickel for every time I've done that. [Laughter] You okay now? Good.
    Well, this is appropriate. I want to thank your attorney general, 
Jennifer Granholm, for joining us; and 
Mayor Hollister, the State legislators, 
county commissioners, and city council members who are here. And I thank 
President Anderson of the Lansing 
Community College for making me feel so welcome here.
    I love community colleges, and I'm going to go visit with some of 
the students after I finish here, and I'm going to tell them they should 
also be for this. The younger they are, the more strongly they should 
feel about this, what we're trying to do here.
    I would like to thank our sponsors today, the National Committee to 
Preserve Social Security and Medicare--the president Martha 
McSteen; the executive vice president, Max 
Richtman, are here. I thank the National 
Council of Senior Citizens and their executive director, Steve 
Protulis, who is here; the Older Women's 
League National Board president, Betty Lee Ongley; Judith Lee of the Older Women's 
League; John D'Agistino of the Michigan 
State Council of Senior Citizens.
    I'd also like to thank in her absence your Congresswoman, Debbie 
Stabenow, who was going to come with me 
today, but they're voting on an issue which is very critical to whether 
we can do what I hope to do with Medicare. But she has been a wonderful 
supporter of our efforts to preserve Medicare and to add the 
prescription drug benefit. And I know she did a study here in this 
district on seniors' prescription drug options and cost, and some of you 
may have been responsible for the position she is now taking in 
Washington. But I am very, very grateful for it. And I know Debbie's 
mother, Ann Greer, is here. So I thank her for 
coming.
    And let me say to all of you--and I want to thank Jane for doing this. You know, I met her about 3 minutes ago, 
and I--she's got to come out here with me and do this program. And I 
think the odds are she'll do better than I will. [Laughter] So I'm not 
worried.
    Let me say, today I want to have this opportunity to talk with all 
of you--we have people of all ages here--about the great national debate 
going on not only in Washington but in our country, a debate that we 
never thought we'd be having. You know, I came to Lansing first when I 
was running for President in 1992, and the people of Michigan have been 
very good to me and to Hillary and to Vice President and Mrs. Gore. I'm 
very grateful for that.
    But it occurred to me if I had come here in '92, and I'd say, ``I 
want you to support me because if you do we've got a $290 billion 
deficit today, but I'll be back here in 6 years, and we'll talk about 
what to do with the surplus.'' Now, I think it's fair to say that if I 
had said that people would have said, ``He seems like a nice young man, 
but he's terribly out of touch''--[laughter]--``he doesn't have any idea 
what he's talking about. This guy is too far gone to have this job.'' 
But that's what we're doing here.
    Six and a half years ago, Michigan's unemployment rate was 7.4 
percent. Today it's 3.8 percent. We've gone from a $209 billion deficit 
to a $99 billion surplus. And we have done it with a strategy that 
focused on cutting the deficit, balancing the budget, eliminating 
unnecessary spending, but continuing to invest in education and 
training. For example, we've almost doubled our investment in education 
and training in the last 6 years while we have cut hundreds of programs 
and reduced the size of the Federal Government to its smallest point 
since 1962, when President Kennedy was in office. So I think that's very 
important. And the tax relief which has been given in the last 6 years 
is focused on families and education.
    I asked the president of this college when I came in, I asked him what the tuition was, because 
now our HOPE scholarship tax credit gives a $1,500-a-year tax credit to 
virtually all the students in our country. And that makes community 
college free, or nearly free, to virtually all the students in community 
colleges in our country. It's an important thing.

[[Page 1293]]

    But we've worked hard, and the American people have worked hard. Now 
we have the longest peacetime expansion in history, with 19 million new 
jobs. We have the lowest minority unemployment rates ever recorded. And 
we have to ask ourselves, we've worked very hard as a country for this; 
what are we going to do with it? And I have argued that, at a minimum, 
we ought to meet our biggest challenges: the aging of America, the 
obligation to keep the economy going, and the obligation to educate and 
prepare our children for the 21st century.
    Today we're going to talk primarily about the aging of America and 
Medicare. But I want to emphasize what a challenge that is. The number 
of people over 65 will double between now and the year 2030--will 
double. The fastest-growing group of people in the United States in 
percentage terms are people over 80. Any American today who lives to be 
65 has a life expectancy of about 82.
    Children being born today, when you take into account all of the 
things that can happen--illness, accident, crime, everything--have a 
life expectancy of 77 from birth now. We expect to unlock the genetic 
code with the human genome project in the next 3 to 4 years, and it then 
will become normal for a young mother taking a baby home from the 
hospital to have a genetic map of that baby's body, which will be a 
predictor of that baby's future health. It will be troubling in some 
ways. It will say, well, this young baby girl has a strong 
predisposition to breast cancer. But it will enable you to get 
treatment, to follow a diet, to do other things which will minimize 
those risks; will say, this young boy is highly likely to have heart 
disease at an earlier-than-normal time, but it will enable us to prepare 
our children from birth to avert those problems. So this is a very 
important thing.
    The first thing I want to say to all of you--and those of you who 
are in the senior citizens' groups will identify with this--this is a 
high-class problem we have. This is a problem, the aging of America, 
that is a high-class problem. It means we're living longer and better. I 
wish all of our problems were like this. It has such--a sort of a happy 
aspect to them.
    But it does mean that there will be new challenges for our country, 
and it means, among other things, that we'll have, percentage-wise, 
relatively fewer people working and more people drawing Social Security 
and Medicare.
    When you look at the Social Security system, it's slated to run out 
of money in about 34, 35 years. It ought to have a much longer life 
expectancy than that. Everybody--it's fine for the next 35 years, but 
I've offered a plan to increase the life of the Social Security Trust 
Fund for at least 54 years and to go further if the Congress will go 
with me.
    I have offered a plan to increase--when I became President, the 
Medicare Trust Fund was slated to go broke this year. And we took some 
very tough actions in 1993 and again in 1997 to lengthen the life of the 
Trust Fund--actions which, I might add, most hospitals with significant 
Medicare caseloads and teaching hospitals which deal with a lot of poor 
folks believe went far too far. And we're going to have to give some 
money back to those hospitals in Michigan and throughout the country. 
But we now have 15 years on the life of the Medicare Trust Fund. Under 
my proposal, we would take it out to 2027, and that will give plenty of 
time for future Congresses and Presidents to deal with whatever 
challenges develop in the Medicare program after that.
    Now, to do that and to do it without cutting our commitment to 
education, to biomedical research, to national defense, we have to 
devote most of the surplus to Social Security and Medicare. We will 
still have funds for a substantial tax cut but not as big as the one 
being offered in Washington today, which spends all the non-Social 
Security tax surplus funds on a tax cut.
    I believe the wise thing to do is to take care of the 21st century 
challenge of the aging of America, to do it in a way that does not 
require us to walk away from the education of our children; and under my 
plan, because we would save most of the surplus, the side benefit we'd 
get is that in 15 years we could actually take the United States of 
America out of debt for the first time since 1835.
    Now, why is that important--and it's more important, I would argue, 
than at any time in my lifetime. I was raised to believe that a certain 
amount of debt for a country was healthy; that just like businesses are 
always borrowing money to invest in new business, a certain amount of 
debt was healthy. The structural deficit has been terrible. The idea 
that we quadrupled the debt in 12 years was an awful idea, because we 
were borrowing money just to pay the bills.

[[Page 1294]]

    But I'd like to ask you all to think about this, because I don't 
think most Americans have focused on this part of the plan, the idea of 
being debt-free. We live in a global economy. Money can travel across 
national borders literally at the speed of light. We just move it around 
in accounts. Interest rates are set, therefore, in a global context. If 
we become debt-free and we, therefore, don't borrow any money in America 
just to fund the Government, that means everybody else's interest rates 
will be lower. That means for businesses, lower business borrowing 
rates; it means more businesses, more jobs, easier to raise wages. For 
families it means lower home mortgage rates, lower credit card payment 
rates, lower car payment rates, lower college loan rates.
    It means that we will secure the economic strength of America in 
ways that are unimaginable to us now. It means that if other parts of 
the world get in trouble, the way Asia did a couple of years ago, we'll 
be less vulnerable. And the people that are in trouble and need to 
borrow money will be able to get it at lower interest rates, and they'll 
get up and go on again and be able to do business with us again.
    This is a very good thing to do. But it can only be done if we set 
aside the vast majority of the surplus to fix Social Security and 
Medicare. You can still have a tax cut, focused on helping families save 
for their retirement or any number of the other things that have been 
discussed within the range we can afford; focused on helping people pay 
for long-term care; focused on helping working families pay for child 
care; and, I would hope, focused on helping us modernize our schools for 
the 21st century and giving business people big incentives to invest in 
the small towns, rural areas, urban neighborhoods, and Indian 
reservations that still haven't gotten any new business investment in 
this recovery of ours.
    But the fundamental decision is, are we going to do these things? 
Now, there does seem to be agreement in Washington--let's start with the 
good news--there does seem to be an agreement in Washington that we 
should set aside the portion of the surplus produced by your Social 
Security tax payments for Social Security. And if that, in fact, 
happens, under the way that the Republicans and the Democrats have 
agreed on so far, we will pay down the debt--we will continue to pay 
down the debt, but we won't pay it off. And we won't extend the life of 
the Social Security Trust Fund, as I would under my plan. But still, 
that's something.
    There is yet no agreement in Washington over setting aside a 
significant portion of the surplus to save and modernize Medicare. So 
today we're here to talk about that. But I wanted you to have a feeling 
for how the Medicare proposal fits into the proposal to save Social 
Security, to keep investing in education, to have a modest tax cut, and 
to make the country debt free. I want you to think about it, because the 
big debate is, what are we going to do with the surplus?
    And I don't even agree with the timing of what's going on in 
Washington. I don't think we should even be talking about the tax cut 
until we figure out what it costs to save Social Security, what it costs 
to save and modernize Medicare, what we have to do to keep the 
Government going.
    How would you feel--now, one of my staff members, who happens to be 
from Michigan, said to me the other day, this is kind of like a family 
sitting around the kitchen table and said, ``Let's plan the fancy 
vacation of our dreams and then talk about how we're going to make the 
mortgage payment.'' [Laughter] ``Hope we've got enough left over.'' So 
that's where we are.
    To evaluate whether you agree or not, we need to talk about what 
needs to be done about Medicare. So I'd like to tell you what I think, 
the first thing my plan would do is to devote a little over a third of 
the non-Social Security portion of the surplus, $374 billion over the 
next 10 years, to strengthen Medicare by extending the life of the Trust 
Fund to 2027. Now, I think that is very, very important, because, keep 
in mind, all the baby boomers will start turning 65 in the year 2011. 
That's not that far away. To young people, that may seem like a long way 
away. The older you get, that seems like the day after tomorrow. 
[Laughter]
    And we've waited a long time. The last time we had a surplus was 
1969. This is a once-in-a-lifetime opportunity we have here to deal with 
this. So if we run it out to 2027 and then further complications arise, 
or difficulties or challenges present themselves, there will be time for 
future Congresses and Presidents to deal with them without having to 
take drastic action. So that's the first thing--run the Trust Fund out 
to 2027.

[[Page 1295]]

    No serious expert on Medicare believes that we can stabilize 
Medicare without an infusion of new revenues. The second thing we do is 
to employ some of the best practices in health care today: competition 
and other practices now in the private sector to keep costs down that 
don't sacrifice quality and don't require people to be forced out of the 
fee-for-service Medicare plan if they don't want to be into a managed 
care plan. We leave free choice open. No requirement.
    The third thing about this plan that's gotten the least publicity 
but is potentially very important for our country is that we allow 
people between the ages of 55 and 65 who aren't working anymore or don't 
have health insurance on the job and don't have retiree health insurance 
to buy into Medicare in a way that doesn't compromise the stability of 
the program. I think that is terribly important. That's a huge problem 
in our country today and a growing one, people who are out of the work 
force or working for very small businesses without employer-sponsored 
care, who can't get any health insurance because of their age or their 
previous health condition.
    The fourth thing the plan does is to modernize the benefits of 
Medicare to match the advances of modern medicine. That means first 
encouraging seniors and disabled Medicare beneficiaries to take greater 
advantage of the available prevention mechanisms in our country, 
preventive tests for cancer, for osteoporosis, for other conditions, by 
eliminating the deductible and the copay from those tests and paying for 
it by charging a modest copay for lab tests that are often overused.
    Now, why is this important? Well, if somebody develops osteoporosis, 
a severe case, and goes to the hospital and has a prolonged medical 
regime under Medicare, the taxpayers pay for all of it. But very often, 
the prevention is not done because of the costs involved. It'll be far 
less expensive over the long run to spend a little more on prevention 
now and keep people out of the hospital and the expensive payments we're 
going to pay if we don't do that. Very important issue.
    And then we provide, for the first time, for a voluntary and 
affordable prescription drug benefit. Basically, we propose to start 
with a $24 a month premium to pay half the drug cost, up to $2,000, 
phasing up over the next 5 or 6 years to a $5,000 ceiling, with the 
premium going up that way, in a graduated way. For seniors at 135 
percent of poverty or less, we would waive the premium and the copay, 
and then the premium would be phased in, up to 150 percent of poverty. 
So there would be subsidies there.
    Now, there are those who say, ``Well, this is good, but I've got a 
good retiree health plan with prescription drugs, and if you offer this, 
my employer will drop it, and it's better than this deal.'' Well, I want 
you to know that one of the things we've done in here is put substantial 
subsidies in here to employers who offer drug benefits to their 
retirees. So I think it is less likely that they will drop the benefits, 
not more, because they're going to get a real incentive to keep the 
employer-based retiree programs. The second thing I want to say, again, 
is this is an entirely voluntary program.
    Now, the other big criticism of this program has been that, well, 
they say, two-thirds of the people have prescription drugs already who 
are retired. That is misleading. That is only accurate by a stretch, and 
let me explain what I mean by that. We have a report we are releasing 
today that shows that 75 percent of older Americans lack decent and 
dependable private sector coverage for prescription drugs. And the 
problem is getting worse.
    Fewer than one in four retirees, 24 percent, have drug coverage from 
their former employers. Now, the number of corporations offering 
prescription drug benefits to retired employees has dropped by a 
quarter, 25 percent, just since 1994. Eight percent of the seniors have 
Medigap drug policies. But as all of you know, Medigap premiums explode 
as people get older, when they most need the benefits and can least 
afford the higher prices.
    Here in Michigan, for example, seniors over 85 must pay over $1,100 
a year in Medigap premiums for drug coverage, not counting the $250 
deductible. Those high costs are especially hard on women, who tend to 
have lower incomes than men because they didn't have as many years 
paying into Social Security or retirement primarily. Seventy-two percent 
of the Americans over 85 are women. Seventeen percent of seniors have 
drug benefits through Medicare managed care plans. But three-fifths of 
these plans cap the benefits at less than $1,000 a year.
    And listen to this, in just the last 2 years, the percentage that 
capped drug benefits at only

[[Page 1296]]

$500 per year has grown by 50 percent. Anybody that's got any kind of 
medical condition at all will tell you it doesn't take very long to run 
through $500.
    So what does this mean? It means that the vast majority of our 
seniors either have no drug coverage at all or coverage that is 
unstable, unaffordable, and rapidly disappearing. It means, therefore, 
that we need a drug plan for our seniors that is simple, that is 
voluntary, that is available to all, and that is completely dependable.
    Securing and modernizing Medicare I believe is the right thing to do 
for our seniors, but I also think it's the right thing to do for all the 
young people here. And for the next generation, the young parents in 
their thirties and forties. Why? First, because it guarantees we can get 
out of debt by 2015. I explained why that's a good idea. Second, because 
if we do this and we stabilize Social Security and Medicare, we will 
ease the burden on the children of the baby boom generation who will be 
raising our grandchildren. It is a way of guaranteeing the stability of 
the incomes of the children of the seniors on Medicare. And I think that 
is profoundly important.
    Now, I've already explained that that's what our budget does. Today 
the Congress is voting, the House of Representatives is voting on the 
Republican tax plan, which basically would spend virtually the entire 
non-Social Security surplus on a tax cut. And it costs a huge amount of 
money, not just in this 10 years but it triples in cost in the next 10 
years. It explodes.
    And you say, ``I don't want to think about that. I want to think 
about today.'' You have to think about that. The baby boomers will be 
retiring in the second decade--in the second decade of the century we're 
about to begin. And we have to think about that. This plan would give us 
no money to stabilize or modernize Medicare, and it would require 
substantial cuts in education, in national defense, in biomedical 
research, in the environment. And I predict to you that the environment 
will be a bigger and bigger issue for us all to come to grips with in 
the years ahead.
    So we have to figure out what we're going to do. I believe that this 
plan that's being voted on in Washington will not enable us to pay off 
our debt; it will not do anything to add to the life of Social Security 
and Medicare; it will require huge cuts in our other investments and 
taking care of our kids. And I will veto it if it passes.
    But the question is what are we going to do? You all know that we 
fight all the time in Washington, because that's what you hear about. 
But I would like to reiterate that we joined together to pass welfare 
reform--and I did, I vetoed two bills first because they took away the 
guarantee of food and medicine for the poor kids. But I passed the 
welfare reform bill that required able-bodied people to go to work and 
provided extra help for child care, for transportation, for training and 
education for people on welfare. We now have the lowest welfare rolls in 
30 years--the lowest welfare rolls in 30 years.
    And big majorities of both parties in both Houses of Congress voted 
for it. We fought over the budget for 2 years, but in '97 we passed a 
bipartisan balanced budget amendment, with big majorities in both 
parties of both Houses voting for it. And the results have been quite 
good.
    So don't be discouraged. You just have to send a clear message. We 
are capable of working together to do big things. Yesterday 50 
economists, including 6 Nobel Prize winners, released a letter 
supporting my approach. Maybe it's easier for me because I'm not running 
for election, but I don't think that's right. I trust the American 
people to support those people in public life who think of the long run, 
who tell them the truth, who say, I realize it would be popular to spend 
this surplus, but we've waited 30 years for it, and we now have 30 
years' worth of challenges out there facing us, and we cannot afford to 
squander that.
    So what I hope to do today is to answer your questions and hear your 
stories, and let's explore whether or not we really need to do these 
things for Medicare and whether or not they really will help not only 
the seniors but the non-seniors in the country. And if you disagree, you 
ought to say that, too. But my concern now is for what America will be 
like in 10 years, or 20 years, or 30 years.
    We've got the country fixed now; it's working fine; everybody is 
going to be all right now in the near term. The economy is working; 
things are stable; we're moving in the right direction. But we now have 
a once-in-a-generation opportunity to take care of our long-term 
challenges, and I believe we ought to do it.
    Thank you very much.

[[Page 1297]]

[At this point, the conversation proceeded. Participant Janice 
Southwell asked the President how much time 
his Medicare plan required before it went into effect.]

    The President. Well, it will take us--it takes a couple of years--
first of all, we can stabilize the plan immediately. If Congress passed 
the law and I sign it, we'll have the funds dedicated, and we can set 
the framework in motion today that would do all the big things.
    To put the prescription drug benefit in effect, it's a complicated 
thing, as you might imagine, millions and millions of people involved--
it will take probably a year, maybe a little longer, 2 years, to 
actually start it.
    But where we propose to start would be with a premium of $22 a month 
and a copay of 50 percent up to $2,000, but it would go up to $5,000. 
And I think it's very important to get up to a higher level. But we have 
to learn to administer it and make sure we've got the cost estimates 
right and all of that. So it would be fully in effect at $5,000 about 5 
years after we start.

[Moderator Jane Aldrich asked Ms. 
Southwell her concerns about her own senior 
years. Ms. Southwell replied she had thought about it and related a 
conversation with her daughter-in-law on the future of Social Security.]

    The President. The answer to that is, there certainly should be. 
There's no reason for us to let the Trust Fund run out in 2034. What I 
have proposed to do, just so you'll know, is--what I propose to do is to 
allow the Social Security taxes that you pay, which presently have been 
covering our deficit since 1983--as big as these deficits have been, 
they'd have been even bigger if it hadn't been for Social Security 
taxes. You need to know that, because when we put the last Social 
Security reform in, in 1983, we did it knowing that we would be 
collecting more. I wasn't around then, but they did it knowing they 
would be collecting more than they needed, and the idea was to have the 
money there when the baby boomers retired, as well as to relieve the 
immediate financial crisis.
    Now, if you do that, you can pay down the debt some. But in order to 
lengthen the life of the Trust Fund, what I have proposed to do is, as 
the debt goes down, the interest we pay on the debt goes down. 
Obviously, you know, if you've got smaller debt, you have smaller 
interest payments. Well, you should know that for most of the last 10 
years, about 15 cents on every dollar you pay in taxes comes right off 
the top to pay interest on the debt.
    So what I want to do, as the debt goes down, I want to take the 
difference in what we used to pay and what we've been paying and put 
that into the Social Security Trust Fund to run the life of the Trust 
Fund out to 2053. And I've made some other proposals and will make some 
more, because I'd like to see us take it all the way out to 2075. That 
would be, in the ideal world, we'd have 75 years in the Social Security 
Trust Fund. That's what I'd like to see, and I'm working on it. But if 
you get over 50 years, we'll be in pretty good shape, and I'm hoping 
we'll do that.

[The conversation continued.]

    The President. You might be interested to know that the drug 
companies, a lot of them are worried about it, and they've come out 
opposed to my plan, even though there's no price control in my plan. But 
if we represent you and millions of other people like you, we'll have a 
lot of market power, we'll be able to bargain for better prices. And I 
think that's a good thing, not a bad thing.
    The other thing you should know is--maybe most of you do know this--
I didn't know this until a few years ago and my former Senator, David 
Pryor, who is very interested in seniors and 
drug prices told me this, and then when I became President and began to 
manage the budget, I confirmed it--Americans sometimes pay many times 
higher prices for drugs than Europeans, for example, pay for the same 
drugs. So our companies are only too happy to sell in the European 
market at cost because--much lower cost--and they make money doing it 
because they recover all the cost of developing new drugs from 
Americans. And then the Europeans put actual price controls on them, and 
they sell anyway.
    Now, I honor the research and development of new drugs by our 
pharmaceutical companies. The Government spends billions of dollars 
every year supporting such research, and we should. If America is on the 
cutting edge, maybe it's worth a premium for it. But I also believe that 
elderly people on fixed incomes should not be bankrupt for doing it.

[[Page 1298]]

    That's what this--so what I'm trying to do is to strike the right 
balance here. I want to hold down future increases as much as we can, 
not by price controls, but by using the market power of the Government. 
And we'll have to be reasonable, because we're not going to put those 
companies out of business, and we're not going to stop them from doing 
research because we'd be cutting off our nose to spite our face. We 
wouldn't do that. But we would be able to give people like you some 
protection, as well as the guarantee of coverage. And I think it will be 
a good thing.

[Participant Jack Witt mentioned that his sister-
in-law bought prescription drugs in Mexico because they cost less than 
in the United States. He suggested that the U.S. Government purchase the 
drugs and provide them to seniors at a fraction of the cost.]

    The President. You are subsidizing the pharmaceuticals made in 
America, sold in virtually every other country in the world, because 
they're made here, and you're paying higher prices for them than people 
in other places.
    As I said, I understand their argument. They say, ``Well, why 
shouldn't we go in there and sell if we can make some money, but we have 
to recover our drug development costs.'' I'm sympathetic to a point, but 
not to the point that people like you can't have a decent living. So I 
think this will be a good compromise, and I hope the pharmaceutical 
companies will reconsider their opposition. It would be a good thing, 
not a bad thing, if we had the market power of large-bulk purchasers to 
hold these prices down to you.

[The conversation continued.]

    The President. You can actually figure out pretty much what this 
plan would do for you. If you have, let's say, $2,000 a year in drug 
costs--let's take the first year the plan goes in--let's say you've got 
$2,000 a year in drug costs and let's say your income is over 150 
percent of the Federal poverty level--150 percent of the Federal poverty 
level is $17,000 a couple for seniors--then, you would pay $1,000 for 
the drugs and $24 a month for the premium, which is $288 a year, which 
is $1,288, so you'd save $712 a year.
    Now, if your income is under 135 percent of the Federal poverty 
level, which is $15,000 a couple, you would save $2,000 a year because 
you wouldn't have to pay the copay or the monthly premium. We've tried 
to take care of the really--the kind of people you're talking about at 
your complex who don't have enough to live on. I wish I knew the numbers 
for seniors living alone. I just don't have it in my head; I should, but 
maybe somebody will slip it to me before I end.
    If somebody, one of the people here with me, if you'll slip me the 
numbers for what the 135 and the 150 percent of the poverty level is for 
single seniors, I'll tell you what that is, but you can figure it that 
way.

[Heather Fretell, a pharmacist, noted that 
meaningful pharmacy services to ensure proper use of medication should 
be provided for seniors, because prevention of illness would bring down 
the cost of treatment. Ms. Aldrich asked if the 
President was hearing that around the country.]

    The President. A lot. And let me just say to all of you, this fine 
young woman is representative of where the 
pharmacists of our country are. I want to--I said that I regretted the 
fact that the drug manufacturers were opposing our program because 
they're afraid it will hold costs down too much. The pharmacists who see 
the real live evidence of this problem have been, I think, the most 
vociferous supporters of this whole initiative of any group not directly 
involved in getting the benefits, and I can't thank you enough. Thank 
you.
    But wait, let me say one other thing. She made another point that I didn't make in my remarks 
that I would like to make to you. She said, you know, say it was your 
grandmother or something, if she doesn't take this medication she'll 
have to go to the hospital.
    Now, suppose there were no Medicare program. Suppose President 
Johnson hadn't created Medicare 34 years ago and we were starting out 
today. Does anybody here even question that if we were creating Medicare 
today, prescription drugs would be a part of it? If we were starting all 
over again? Thirty-four years ago we didn't have anything like the range 
of medicines we have today that could do anything like the amount of 
good and do anything like the amount of prolonging our lives, our 
quality of life, keeping us out of the hospital.
    And here's the bizarre thing about this, if we manage this program 
right over the long run, it's going to be a cost saver because we'll 
be--if you've got $2,000 in drug costs, that's

[[Page 1299]]

a lot--that's what her costs are--that $2,000; how long does it take you 
to run up $2,000 in hospital bills? A lot less than a year. A lot less 
than a week.
    So I think that's another point that ought to be made when this 
debate is unfolding, that, yes, this will be--it's a new program, so it 
will cost money. But eventually, particularly if Heather is right and we can make sure a higher percentage of 
our people use these drugs properly, you will save billions of dollars 
in avoided hospital stays, which we pay for. That's the irony of this 
whole thing. That's the other reason I'm for all these preventive tests 
being provided for free, because we don't pay for the preventive tests, 
but when you don't get them and you go to the hospital, we do pay for 
that.
    So I think any thing we can do to make people healthier and keep 
them out of the hospital and keep them out of more extensive and 
expensive care is a plus. So thank you very much.

[Ms. Aldrich noted that substantial advances in 
preventive medicine since 1965 had altered application of treatment.]

    The President. It's amazing. The average life expectancy in this 
country is almost 77 years now. I mean, that shows you how far we've 
come in just 34 years.

[The conversation continued.]

    The President. First, let me say that we have made a dramatic 
increase in medical research one of the priorities for the last 2 years 
for the millennium. We're trying to double funding for the National 
Cancer Institute and eventually double funding for all the National 
Institutes of Health.
    And Vice President Gore gave a speech 
in Philadelphia about 10 days or so ago now, where all the major 
associations involved in the fight against cancer came to talk about 
long-term plans that would really give us a chance of finding cures for 
many, many types of cancer. I think it will be a big national priority 
in the years ahead. And he gave, I thought, a very good speech about 
what should be done to take advantage of what we already know is out 
there on the horizon, just by accelerating our investments and making 
sure we're doing the proper testing in the proper range of our 
population.
    I'm quite encouraged about it. I think a lot of the big 
breakthroughs will come after I leave office. But I hope that the 
groundwork we've laid now will bring them sooner. And I think one of the 
things that I hope will be a big part of the debate for all of you for 
all the elective offices when we come up in the year 2000--I say this 
not in a partisan way, because, actually, we've had very good Republican 
as well as Democrat support for the National Institutes of Health 
funding--but I think this should be a major issue and a subject of 
debate that all of us should talk about as Americans: What is our 
commitment over the long run to doing this kind of research and getting 
the answers as quickly as we can?
    Thank you.

[The conversation continued.]

    The President. Let me say--you heard what Mrs. Silk said about 
Medicare--I think we're mostly talking about this prescription drug 
issue today. But don't forget, as important as it is, the most important 
thing that we're doing is securing Medicare for 27 years. We've got to 
get--the basic program has to be secure, because that would literally, 
as many people as are terrifically burdened by this prescription drug 
benefit, if anything happens to the solvency of Medicare, or we have to 
adopt some draconian changes that raise the cost of the program so much 
that it's as out of reach as the drugs are now for people, the 
consequences would be disastrous. So let's not forget we have two things 
to do. We've got to stabilize and modernize and secure the Medicare 
program itself for the next 27 years as well as add this drug benefit.
    And you made that point very eloquently, and I thank you.

[Participant Dorothy Silk asked the President 
what citizens could do to help him persuade the Congress to accept his 
plan.]

    The President. I think tell the Congress that the country's doing 
well now and that, yes, you would like to have a tax cut, but you will 
settle for a smaller one rather than a bigger one if the money goes to 
save Medicare and Social Security and keep up our investment in the 
education of our children and pay the debt off. I think that's a simple 
message.
    Let me just say this. You know, Americans are a country--we are 
famously skeptical about the Government, you know. All those jokes, 
``I'm from the Government; I'm here to help you,''

[[Page 1300]]

and you slam the door and the guy says--and I heard the debate last 
night in the House of Representatives, and the people that are for 
giving the surplus back to you in the tax cut will--they say, ``It's 
your money; don't let them''--i.e., us--``don't let them spend it on 
their friends.'' Well, we're spending it on Medicare, Social Security, 
and education and defense. That's us, that's all of us, that's not our 
friends.
    I mean, I hope you're my friends, but that's--and I think what you 
have to say is that the country has become prosperous by looking to the 
future, by getting the deficit down, by getting our house in order, by 
getting this budget balanced, by investing in our people. And now, we 
have these big challenges.
    If this debate in Washington is about, you know, ``my tax cut's 
bigger than your tax cut,'' well, that's a pretty hard debate to win, 
you know? But if the debate is, ``Yes, our tax cut is more modest, 
although it's quite substantial, but the reason is we think since we've 
got this big aging crisis looming and since we've never dealt with the 
prescription drug issue, that we ought to stabilize Social Security and 
Medicare, save enough money to do our work in education and medical 
research and the environment and defense, and still have a modest tax 
cut,'' I think we can win that argument, and I think--you know, you 
really just need to let people know. I don't think this should be a 
hostile debate at all. I think you need to genuinely, in a very open and 
straightforward way, tell all your Representatives and Senators of all 
parties that you believe now is the time to look to the long run.
    If America were in economic trouble now, if people were unemployed, 
if they were having terrible trouble, maybe we should have a big tax cut 
to help people get out of the tights they're in. But now that the 
country is generally doing well, we ought to take the money and make 
sure we don't get in a tight in the future. If you can just say that in 
a nice way, I think--I'm trying to keep the temperature down on this 
debate and get people to think. I want to shed more light than heat. 
Usually, our political debates in Washington shed more heat than light. 
And you can help a lot. Just be straightforward, and tell people that's 
what you think.

[Ms. Aldrich suggested people write letters and 
send E-mail to their representatives in Congress.]

    The President. Write them a letter; send them an E-mail; send them a 
fax. Do something to--and say, ``I'm just a citizen, but I want you to 
know that I will support you if you save most of the surplus to fix 
Social Security and Medicare and make America debt-free. I will take the 
smaller tax cut, and I don't want you to have to cut education or 
national defense or medical research or any of those other things. Let's 
do this in a disciplined way, in a commonsense way.'' I think you just 
tell them that that's what you want them to do, and don't make it a 
partisan issue, don't make it a--I don't want Americans to get angry 
over this.
    Like I said, this is a high-class problem. You would have laughed me 
out of this room if I had come here 7 years ago and said, ``Vote for me. 
I'll come back, and we'll have a debate on what to do with the 
surplus.'' So let's be grown up about this and deal with it as good 
citizens.

[The conversation continued.]

    The President. Yes, I thank you for that. I agree with that. Let me 
say, if you think about it, every time we do a big change in this 
country, the people that are doing pretty well under the status quo 
normally oppose it. And in the 15th century, the great Italian statesman 
Machiavelli said there is nothing so difficult in all of human affairs 
than to change the established order of things, because the people who 
will benefit are uncertain of their gain, and the people who will lose 
are afraid of their loss.
    Well, I don't think they will necessarily lose. Once they go back to 
what this gentleman said over here about it, and let's put what he said 
and what you said together, the profit margins may go down some on 
heavily-used drugs where we have the power to bargain per drug, but the 
volume will surely go up. That's the point you're trying to make.
    Look, none of us have an interest in putting the American 
pharmaceutical companies out of business. They're the best in the world, 
and they're discovering all these new drugs that keep us alive longer. 
And I wouldn't--we'll never be in a position where we're going to try to 
do that. But I've seen this time after time after time, not just in 
health care, in lots of other areas. It will be fine if we just have to 
get the point where they can't kill it. I think the pharmacists will 
help us, and I think if we keep

[[Page 1301]]

working, we'll wind up getting some pharmaceutical executives who will 
eventually come out for it, too, once they understand that nobody has a 
vested interest in driving them out of business. We all want them to do 
well and keep putting money into research and the increased volume. If 
the past is any experience of every other change, the increased volume 
of medicine going to seniors who need it will more than offset the 
slightly reduced profit margins from having more reasonable prices.
    Thank you very much.

[Participant Loren Graham said his 44-year-old 
daughter, who suffered from rheumatoid arthritis, should be able to buy 
into Medicare because she was refused insurance.]

    The President. But she's not designated disabled?
    Mr. Graham. I beg your pardon?
    The President. Medicare covers certain--the disability population--
she's not disabled enough to cover, to qualify?
    Mr. Graham. Correct.
    The President. I don't know if I can solve that or not. I'll have to 
think about it. [Laughter]
    Ms. Aldrich. But you obviously have other 
people that you know that are dealing with the same type of issue that 
you are right now, is that correct?

[Mr. Graham said he knew a lot of people in the 
same situation, with supplemental insurance but no guarantee they would 
keep it.]

    The President. Let me say one thing. You said you wanted Medicare to 
be around another 32 years. Another point I should have made that I 
didn't about taking the Trust Fund out 27 years, you think how much 
health care has changed in the last 27 years. The likelihood is it will 
change even more in the next 27 than it has changed in the last 27. And 
we may be caring for ourselves at home for things that we now think of 
as terminal hospital stays. They may become normal things where you give 
yourself medication; you give yourself your own shots; you do all the 
stuff that we now think of that would be unimaginable.
    I think if we can get it out that far, the whole way health care is 
delivered will change so dramatically that the people who come along 
after me and the Congress and in the White House will have opportunities 
to structure this in a different way that will be even more satisfying 
to the people as well as being better for their health.
    But that's why, to go back to what you said, I want us to do this 
prescription drug thing. I think it is critically important. But we also 
have to remember that we've got to stabilize the Trust Fund. We've got 
to take it out. It ought to be more than 25 years. When you look ahead, 
you know it's going to be there.
    Thank you.

[The conversation continued.]

    The President. Well, if it was up to me, I would remove the age 
limits, the earnings limits on Social Security recipients, because I 
think that's another good thing they ought to do. But it ought to be 
voluntary; you shouldn't have to do it just to pay for your medicine.
    I promised the lady over there who said most of the people who lived 
in your place were single. Now, keep in mind, we start out with the 
premium of $24 a month, and that premium covers half the prescription 
drug costs, up to $2,000 a year. It will go eventually to a premium of 
about $44 a month that will cover half prescription drug costs up to 
$5,000 a year. And I think it's important to get up above $2,000, 
because a lot of people really do have big-time drug costs.
    Now, the people who wouldn't have to pay the premium or the copay 
are people below 135 percent of poverty. That's $14,000 for a couple, 
but $11,000 for individuals. That's a lot of folks. And then, if you're 
up to $12,750 for an individual or $17,000 for a couple, your costs 
would be phased in, so there would be some benefit there.
    But nearly everybody would be better off unless they have a good--
the only plans that are better than this, by and large, are those that 
you got from your employer if your employer still covers prescription 
drugs. This is totally voluntary. Nobody has to do this. And we also 
have funds in here to give significant subsidies to the employers who do 
this to encourage them to keep on doing it and to encourage other 
employers to do it. So I think it's a well-balanced program and a good 
way to start.

[Dr. Kirshna Sawhney, a cardiologist, 
supported the President's prescription medicine proposal and pointed out 
the need for reform of the Medicare payment system to hospitals. He 
noted that premier health care facilities in Michigan were

[[Page 1302]]

losing $80 to 100 million each year under the current system.]

    The President. I'd like to make two points after your very fine statement. First, on the second point you 
raised, I had a chance to discuss that yesterday at my press conference. 
When we passed the Balanced Budget Bill in 1997, the--we had to say, how 
much are we going to spend on Medicare over the next 5 years. And we 
estimated what it would take to meet our budget target. Then, the 
Congressional Budget Office said, no, it will take deeper cuts than 
that, and we said, if you do that it will cost a lot more money. But we 
had to do it the way they wanted.
    Now, this is not a partisan attack; nobody did this on purpose. 
There was an honest disagreement here. But it turned out that our people 
were right, and so actually more money was taken out of the hospital 
system in America than was intended to take out. And to that extent by a 
few billion dollars, not an enormous amount, but the surplus in that 
sense is bigger than it was intended to be. And we have got to correct 
that. I have offered a plan that will at least partially take care of 
it, and we're now in intense meetings with people who are concerned 
about it. We are going to have to do that.
    Now, let me make the point about the person you said, the gentleman 
who died. I was aghast--last week we had another health care debate on 
the Patients' Bill of Rights, and one of the people who was against our 
position said, these people keep using stories--you know, anybody can 
tell a story, that's not necessarily representative.
    Well, first of all, I don't know about you, but I think people's 
stories are--I mean, that's what life is all about. What is life but 
your story? [Applause] And, secondly, I--but the point I want to make is 
this doctor--the most important point this doctor has made is that the 
man who died is not an unusual case. That is the point I want to make. 
And that's--the pharmacist, Heather, was 
making the same point--there are lots of people like this.
    And let me just use the example you mentioned. Diabetes is one of 
the most important examples of this. Complications from diabetes can be, 
as you know, dire and can be fatal. And you have a very large number of 
older people with adult-onset diabetes that have to be managed. It is 
expensive, but people can have normal lives.
    The patients have to do a lot of the management of diabetes. They 
have to do it. And if they don't do their medication, the odds that 
something really terrible will happen before very long are very, very 
high. Almost 100 percent.
    But if you look at the sheer numbers of people with diabetes alone, 
just take diabetes, then the story is about statistics, too, big numbers 
of people.
    I thank you very much, sir.
    She says we've got to quit. You've been great. Are you going to be 
the heavy? I should be the heavy.
    Ms. Aldrich. No, they told me I had to tell 
you to be quiet. I said, really? [Laughter] I bet there are some 
Republicans that might like that job.
    The President. Republicans--Hillary would like it. A lot of people would like it. 
[Laughter]
    Ms. Aldrich. We are, indeed, out of time. 
So sorry, but they're telling me, and I have to take my cues. But Mr. 
President, we want to thank you so much for being here. And did you have 
some closing remarks that you'd like to make to us?
    The President. I just wanted to say again, this is a wonderful 
moment. We told some sad, heartwrenching stories today, and I wish I 
could hear from all of you. But keep in mind, this is a great thing. Our 
country is so blessed now. We've got the lowest peacetime unemployment 
in 40 years, the longest peacetime economic expansion in history. We've 
got this big surplus, the biggest one we've ever had. We think it will 
last for a decade or more. More really, as long as we don't mess up the 
budget.
    We have to decide. I already said what to me the choice is--it is 
your money. If you want it back now, you can tell your elected 
representatives. Nobody can say you didn't pay it in; you want it back. 
I don't quarrel with that. But I think it is much better for you to 
stabilize Social Security and Medicare, add the prescription drug 
benefit at a price we can afford, let people 55 to 65 pay into it who 
don't have health insurance, have a modest tax cut that doesn't 
undermine our ability to do that or our ability to invest in education 
and medical research and defense, and get the country debt-free.
    You'd be amazed how many really wealthy businessmen come up to me 
and say, ``You

[[Page 1303]]

raised my taxes to balance the budget back in '93''--we did the top 1 
percent, 1.5 percent got an income tax increase--``and I was mad at the 
time, but I made so much more money in the stock market than I paid in 
taxes, it's not funny.''
    Low interest rates make people money. The flipside of that is if 
interest rates went up 1 percent in this country, it would cost you more 
money than I can give you in a tax cut if you borrow any money for 
anything.
    So what I think we have to say--I just want you to think about this 
and then communicate your feelings. And again, do it in a friendly way. 
Do it in the tone we've been talking about today. Tell them the stories 
you know, Doctor. Every doctor, every nurse, 
every pharmacist, every family should sit down and take the time--I know 
you think that Members of Congress and the White House, the President--I 
have a thousand volunteers at the White House, most of them just read 
mail. And then I get a representative sample of that mail every 2 or 3 
weeks. And we all calibrate that. And the Members of Congress, you'd be 
amazed how many Members of Congress actually read letters that they get. 
They do have an impact.
    So these faxes and E-mails and letters and telephone calls, they 
register on people, especially if they're not done in a kind of harsh, 
political way, but just saying, this is what I think is right for our 
country. And I hope you'll do it.
    Thank you, and God bless you.

Note: The President spoke at 11:45 a.m. in the gymnasium at Lansing 
Community College. In his remarks, he referred to Mayor David C. 
Hollister of Lansing; James F. Anderton IV, president, Lansing Community 
College; Judith Lee, assistant executive director, Older Women's League; 
and John D'Agistino, president, Michigan State Council of Senior 
Citizens.