Press Conference with Senator Max Baucus (D-MT) and Senator Charles Grassley (R-IA)

HEADLINE: PRESS CONFERENCE WITH SENATOR MAX BAUCUS (D-MT) AND SENATOR CHARLES GRASSLEY (R-IA)
 
TOPIC: THE BIPARTISAN MEDICARE BILL

BODY:
(Note: This event was fed in progress.)

SEN. GRASSLEY: (In progress) -- that came out of committee and to get ready for the next two weeks of hard work on the floor of the United States Senate, and then probably a lot of hard work in conference, and eventually a product to the president of the United States.

As you know, last night we passed the most extensive update to the Medicare program since the program's creation in 1965. The effort was bipartisan and, as I said before, thanks to the leadership of Senator Max Baucus and our working relationship over several months now, not just on this issue, but lots of issues. But this is probably one of the most difficult things to get some bipartisan consensus on, particularly if you figure that there was just a lot of partisanship on the issue last summer.

Prescription drugs and Medicare have been debated for the last four years on the campaign trail and on Capitol Hill. Today this Congress is within reach of helping senior citizens afford life- enhancing medicines. We're on the brink of strengthening and improving Medicare to meet the needs of both consumers and taxpayers in the 21st century.

In addition, the bipartisan bill we approved last night helps to end Medicare's historic discrimination against states that do more with less, and Iowa's one of those.

Medicare's complex funding formula now penalizes rural states for practicing cost-effective medicine. The legislation we passed last night ends that unfairness; it changes the law to make sure that you don't pay the same Medicare payroll taxes as everybody else, and losing in the return.

Today, we will fight to keep this fairness provision in the final bill. We built momentum yesterday. Today, we're very optimistic. This summer, this Congress should be able to bring Medicare into the 21st century practice of medicine and do that, primarily, with prescription drug. We need to succeed for 42 million elderly and disabled Americans who rely upon Medicare today but don't get prescription drugs. And we need to be ready for the 77 million baby boomers going into retirement, starting in just a short period of time.

Thank you very much, Max. Thank you.

SEN. BAUCUS: Thank you.

SEN. GRASSLEY: You're up.

SEN. BAUCUS: Thank you very much, Mr. Chairman. It's, frankly, a great honor for me to be working with Chuck Grassley. The two of us have worked very closely together; our staffs, that they've forged this consensus, and it's been, just personally, very satisfying. But more importantly, I'm very excited that our country, our Congress, is now on the verge of addressing a gross discrimination; that is, between seniors who get the drug benefits, get drugs in hospitals, and seniors who have to pay for their drugs outside the hospitals.

You know, this is an anachronism in American health care, to say the least. We're probably the only major industrial country that does not provide health care benefits for our seniors. And we now, in the Finance Committee, have come together with many other senators, working together to pass legislation out of committee, which I know is going to be the basis for the final bill that passes the full Senate in conference with the House.

Many factors have come together to allow us, help us in the Congress pass legislation. One clearly is that we have only $400 billion to work with -- well, not only -- we have $400 billion that's now on the table. And if that's -- if we don't use it now, there's no guarantee it's going to be there in subsequent years.

That's been a driver. That's helped senators realize that this is an opportunity that we should take advantage of.

Second, there's been so much groundwork laid by so many senators to enable us to reach this point. The tripartisan bill, led by Senator Grassley a couple of years ago and last year, is certainly one. They worked very, very hard to get a bill together. In addition to that, there's been the Medicare Commission. Senator Breaux was co- chairman in the Senate of that commission. He's just been wonderful in his efforts.

And I must say that last year, when we tried to get prescription drug benefits passed in the Congress, we held some last-moment meetings to try to -- among all the key and relevant senators to try to get a bill passed. And one of the most ardent supporters and worked so hard was Senator Olympia Snowe. She was, frankly, the last person standing; when all the rest of us had finally thought or concluded that it isn't going to happen, there is Olympia saying -- she says, "Max, we can do it. We can do it. It's the right thing to do, it's the right thing to do. Our seniors need it." And she has been a huge driving force.

I want to also thank here Senator Ted Kennedy. Ted Kennedy has been a huge help and one of the very main reasons why we're all here today. He's such an authority on health care, particularly of Democrats. When he -- Ted Kennedy looked at this legislation and said yeah, boy, this is the right thing to do, that helped propel this mightily, and he deserves a lot of the credit.

Of course there are many, many other senators I could name. Senator Bob Graham of Florida worked hard. But basically, it's a culmination of the efforts of a lot of people that enable us to be here today.

One final point, it's the rural provisions. Rural America has been discriminated against in health care benefits. This legislation redresses that imbalance so we're back on a level playing field. And that's a provision that's very important, I know, to the chairman and to me.

This is a great day. This is landmark legislation -- it will be when it passes, and it's going to pass, there's no doubt about it. It's got -- it's on a roll, it's got momentum, it's going. And now it's up to us to just help improve upon some of the problems that we still face.

And one final point. I was very, very pleased with the Finance Committee markup yesterday, for a lot of reasons. One is, it was the way I think the legislative process is supposed to work. Senators asked very good questions about a very complex subject, seeking answers. There is very little posturing, very little rhetoric. It was just a solid, good-faith effort on both sides of the aisle trying to figure out how do we make this work; how do we make it work so that we reduce costs and yet seniors get prescription drug benefits, something we all know they desperately needed. And I was very pleased with the way the committee and all senators conducted themselves. And I hope it's kind of a model for future legislative efforts.

Thank you.

SEN. GRASSLEY: Questions?

Q Senator Grassley, in that vote last night, you lost Senator Lott -- (inaudible word) -- Senator Nickles, both former floor leaders. Are you going to have a tough sell in your own caucus on a bill? And if so, why so?

SEN. GRASSLEY: I wouldn't want to call it a tough sell, but I do have a lot of work to do within my own Republican caucus. But I expect that because when you work on bipartisanship, you can't satisfy everybody in your own pocket -- or own party, and then expect the other party just to come along for the ride. It's a little bit of give and take. And I think that I did very well for my party, and I think the reason I can say I did very well is because, don't forget, nine of our 11 voted. And I think Max did very well for his party, getting more than half of his people to come along with it. So I think that it's true bipartisanship.

Q Senators, if you could clear something up for me. One of the strong arguments, at least among Republicans, it seemed to me, was let's help the people who need the help, let's not include everybody. And as I understand it, Democrats said we should include everybody. Where do we wind up in this package on that issue?

SEN. GRASSLEY: It's universal, so we've included everybody, but it's voluntary; everybody doesn't have to join if they don't want to. It's a very comprehensive program. It's obviously helping low income with tremendous subsidies so people don't have to choose between food and drugs. It's based on the ability to pay. We help everybody when it comes to catastrophic. And so I would say that we help the most vulnerable, both from two standpoints: one, low-income people, and then it's pretty vulnerable even if you have big income if you have catastrophic drug costs or other health care costs.

And then again, look at it as an insurance program. You hope you never have to take any drugs; that you get sick and have to doctor that way. But if there is, you want a cost. And so, you're going to buy insurance, so you don't necessarily expect to get pennies back. In fact, you might not want to get your money back, if you want to live.

Q Senators, there's another issue on your front burner, as well. And as you know, the House yesterday passed a greatly-expanded version of the child care tax credit expansion bill. And I'd like to get both of you to say what you think will happen now after the House action; whether the Senate will take up that bill, whether it will just go to conference. What do you think might happen on that?

SEN. GRASSLEY: Before I answer that question, and since we may have disagreed on the tax bill, but we still want to work in a bipartisan way, I want to -- I really would rather not answer that question until you and I have talked.

SEN. BAUCUS: I like this new beginning. (Laughs, laughter.) We will tell you.

SEN. GRASSLEY: Now, that doesn't mean -- that doesn't mean that he and I will end up on the same page, necessarily, when it's all over. But I think --

SEN. BAUCUS: Yeah. We've not discussed it.

SEN. GRASSLEY: Yeah.

Q Well, aside from your possible differences, if you have any, on this, can you just tell me the legislative posture? Is it going to go to conference, or --

SEN. GRASSLEY: It's exactly that point that I want to talk to Max about. And that's why --

Q What time will you be coming back to tell us?

SEN. BAUCUS: (Laughing.) I'm sure you'll find us someplace.

SEN. GRASSLEY: Yeah.

Q The Congressional Budget Office said yesterday a very large number of beneficiaries who currently have employer-provided drug coverage would lose it if this bill were to become law. Is there something you're going to try to do between now and -- (inaudible) -- go to the floor to address that?

SEN. GRASSLEY: Well, first of all, understand that we have taken that exact problem into consideration, and we have tried to address that problem. So the question is have we addressed it well enough? And maybe, based upon testimony yesterday, we have not addressed it enough, and so, obviously, at least for one, I want to take a look at it. And I'm sure that --

SEN. BAUCUS: Yeah. We agree, as we do on most everything in this bill. (Chuckles.) It's, you know -- I think some of the senators were a little surprised at the percentage of retirees that would be dropped from employer-sponsored coverage in the event this bill were to pass as written. And even so, many companies would be getting significant assistance to help incent them to not drop coverage. But still, their percentage, as estimated by CBO, was pretty high. So, we've talked about this already. This is a question we're going to be looking at over the weekend, to see if we can find a way to reduce that percentage or find whatever the appropriate percentage should be.

And also, recognizing that this is a work in -- number one, it's an extremely complex bill. Even before that, this is new.

We're embarking in uncharted waters, and it's very complex. And we're trying hard to try to figure out the right way, the best way to address these provisions. And that's -- you've named one, but there are many others.

But over the weekend and when we pick the bill up on the floor, we'll have quite a few days on the floor, because this will not be in reconciliation, which means we're under the basic Senate rules of extended -- potential extended debate. And so that'll give us time, hopefully, to try to find some answers to those questions.

Q Mr. Chairman, have you talked at all to the -- in any detail to the House committee chairmen about the direction they're going in, or is that premature; you haven't -- (off mike)?

SEN. GRASSLEY: I'd say the latter, in my case. But I can also tell you I have not. I can tell you, though, that -- and I think this might apply to -- I don't know whether it applies to the Democratic staff, but I know at the staff level, throughout this year, so for four or five months now, we frequently talk to Ways and Means staff.

SEN. BAUCUS: It's -- you know, there are a lot of similarities with the House bill. First of all, they're operating under the same $400 billion budget resolution. That helps a lot -- keep things similar. Second, they face the same pressures, you know, that we face -- that is, how to package -- put that together. And therefore they do have significant assistance to people in the lower end and do have a coverage gap and do have catastrophic coverage, as we do. It's just that they give incentives or subsidies to seniors, a greater amount in their early years, but their gap begins at an earlier date, earlier number, than the Senate. So it's kind of one hand or the other. But still the approach is -- it's very similar.

Q Senator Grassley, also on the tax issue, do you have a sense of how the two houses came to such different approaches on the deficit? That seems to underlie some of the differences on the --

SEN. GRASSLEY: Yeah, it's the orientation of the two houses: one towards if you get anything done, it's got to be done in a bipartisan way, and in the other house, it's a tradition to do things more in a partisan way.

Q On the child credit, could you, Mr. Chairman, accept the child credit as an amendment to Medicare, or would you like to keep that --

SEN. BAUCUS: (Inaudible.)

SEN. GRASSLEY: We declined --

SEN. BAUCUS: Right.

SEN. GRASSLEY: Before you came in, we declined an answer to him --

Q (Off mike.)

SEN. GRASSLEY: -- because he and I --

Q Why? Why haven't you -- (off mike) -- the same conference?

SEN. GRASSLEY: Well --

SEN. BAUCUS: We're going to chat about it.

Q Senator, is a two-week legislative effort on the floor for Medicare?

SEN. GRASSLEY: We would hope it would be a little bit less, but we do feel that two weeks -- you might not find a lot happen in the first few days, because this is so new and very complex. I think a lot of misunderstanding, where there is knowledge -- but it's basically a lack of knowledge.

And I think Max and I are going to have to take a lot of time and be very patient, both on the floor and within our respective caucuses, to answer -- maybe just answer a lot of questions.

Yes?

Q Senator, on the rural equity portion of the bill, you had to delay the hospital -- the (beefing up ?) the hospital disparity for a year. Do you think you can change that or is that --

SEN. GRASSLEY: Okay, let me -- you're partly right. We have delayed -- instead of -- out of the $25 billion, instead of $2 billion going in, as it was in the bill that passed as part of the tax bill -- because since then, we've had the state aid, and we've had the refundable child credit, and we've had the unemployment, my committee allocation for 2004 is zero. So we had -- if we were going to spend money in 2004, and we wanted to, at least the $2 billion, we had to offset it. We could only get offsets for one-and-four-tenths billion dollars. So we will have one-and-four-tenths billion dollars spent in '04. So whoever told you that's not entirely accurate.

SEN. BAUCUS: And I'm hoping the door's not entirely closed on that.

SEN. GRASSLEY: Well, yes, and I agree with you.

Here's another thing, Jean (sp). You're always going to get new figures from CBO, and this was driven by CBO. You know, they're god around here and we got to do what they say. And so it has had some impact, but not the zero impact that your question implied.

Q Senator, is there a total now on what the rural provider package --

SEN. GRASSLEY: Twenty-five billion.

Q So 25 billion, with everything else --

SEN. GRASSLEY: And it's outside of the $400 billion. I want to make that very clear, because you remember last fall and last summer we got into a dispute between groups in this city and members that wanted prescription drugs first, and then there were other groups that said, well, you've got to take care of the providers first. And so we have avoided that issue by offsets, and $25 billion outside of the $400 billion.

Yes?

Q Speaking of offsets, Senator -- I mean Representative Thomas has said that if the Senate comes to you on the child tax credit, if the Senate can come up with any offsets, he'd be willing to look at them. Do you have any ideas?

SEN. GRASSLEY: He's not willing to look at them because we had those same offsets in the tax bill and he wants those for his international trade bill. And I do admit that there has to be money for the international trade bill, but that's a -- it's just not possible. And on the other hand, I think it's very difficult to get a bill through the Senate. But that's something Max and I have to talk about.

Q Why does he need money for the international tax bill? He's going to raise 50 billion.

SEN. GRASSLEY: Okay. Well, that's more complex than I want to get into here. And first of all, it's so complex that I'm not sure I want to give you an answer. I can speak around it, but I can't --

Q Well, give me -- (off mike). (Laughter.)

SEN. BAUCUS: I guess on that, though, the reason you have to is it's basically, you know, the WTO decision.

SEN. GRASSLEY: Yeah, that's right.

SEN. BAUCUS: And to comply with the WTO, the FSC-ETI regime change, we're going to have to, probably, very probably come up with some money to help American companies who were disadvantaged by that WTO --

SEN. GRASSLEY: Could we keep this on our Medicare stuff? (Pause.) Okay, thank you all very -- oh.

Q Do you gentlemen feel that you have a victory in hand, you feel it's going to pass? Or do you feel that on the floor, the amendments you face could substantially derail your effort?

SEN. GRASSLEY: I believe that we're in a good position, but I would not want to say victory's at hand.

I think we have five or six very tough issues that Max and I feel we dealt well with in the committee, and maybe, to some extent, even he and I would say we need to look at some of those again. But those are complex issues. And part of the complexity of them is not the issue itself, but a lack of data and statistics, or maybe just plain information about, you know, backing up various positions.

SEN. BAUCUS: Yeah, that's sort of a semantic question. I don't know if it's victory at hand. But it's clearly -- the legislation has tremendous momentum. It's going to pass. It's going to be an act and the president's going to sign it. But in the meantime, there are very legitimate questions that we are going to be addressing as assiduously as we can. And they're good questions. There are a lot of concerns there yet. But I sense, almost Senate-wide, good faith to try to find answers to those questions. I do not sense an attempt of any senator to derail this. I don't know anyone who's trying to derail this. They're just amendments that address concerns that they have.

Q Senator Grassley, and I think this issue of parity is behind you; do you expect any senators in your caucus that will -- (inaudible) -- again for different incentives?

SEN. GRASSLEY: I think the issue of parity is behind us, but it comes up in an indirect way when people, particularly in my caucus, feel we aren't incentivizing PPOs enough. And this is one of those issues that we were just talking about; where there's a lack of information.

There's a feeling -- and you get also a lot of disagreement between CMS and CBO, as an example. And so I think it's indirectly connected with that issue. I think there's, finally, basic acceptance of parity, and the only people we don't have admitting that yet would be the White House.

SEN. BAUCUS: Also -- and this is what the chairman's saying -- I think benefits parity is behind us, at least temporarily. But there's great fear -- that's strong -- there's deep concern among senators from certain parts of the country that they're going to be disadvantaged compared with another part of the country. The urban folks think that the rural states are going to get a break, frankly. And then the rural states think the urban states are going to get a break. And so it's very hard -- so in that sense, parity or equality, is not behind us because it's -- the goal to achieve it is there, but the concern as to whether we have or not is still alive, it's a real question.

Q Senator, do you have to revisit the green card provisions for -- (off mike)?

SEN. GRASSLEY: He and I probably won't be revisiting it, but somebody on the floor of the Senate for sure will revisit it.

SEN. BAUCUS: Thank you.

Q Thank you, senators.