Prescription Drug and Medicare Improvement Act of 2003

PRESCRIPTION DRUG AND MEDICARE IMPROVEMENT ACT OF 2003

    Mr. DURBIN. Mr. President, it is my understanding a number of Senators have offered amendments. I assume they have been sending them to the desk and setting them aside. Is that correct?

    That is what I would like to do before we adjourn this evening.

AMENDMENT NO. 994

    Mr. President, this is an amendment I have discussed with my colleagues and have spoken about on the Senate floor a few times. It is in the nature of a substitute to the underlying bill.

    Let me say, though I have had many differences with my friend from Iowa about a variety of different matters we have worked on over the years, I congratulate both him and Senator Baucus for their leadership. I think what they have done is bring the Senate to this moment in our history where we are seriously considering a prescription drug program that will benefit the tens of millions of seniors across America. And this conversation is long overdue.

    I think what they have proposed is a worthy start for a commitment that needs to be made. I think there isn't a Senator who comes to this floor who has not been back to his or her State to hear of the tales and stories of families and the struggles they are going through in paying for prescription drugs.

    I was back in my hometown of Springfield, IL, over the weekend for a wedding, and out of nowhere people started coming up to me and talking about prescription drug costs: I know you are debating this in Washington.

    I think this is a timely discussion. I hope, at the end of the discussion, we will have a bill that really does achieve what we hope to achieve. I think making a national commitment to a prescription drug program under Medicare is the right thing to do, but I think we need to do it with our eyes wide open.

    There are several facts we should consider. Let me give you illustrations. One of them is the cost of prescription drugs is going to continue to rise dramatically unless we address it, and address it head on. They say the cost of prescription drugs goes up 10 to 20 percent a year. You can ask any senior or family and they can tell you that story.

    What troubles me about the underlying bill is it does not have competitive forces that will bring these costs down. It provides for a percentage helping hand to seniors to pay for their prescription drug bills, but that percentage becomes less and less as the overall cost of prescription drugs continues to grow out of hand. The substitute amendment which I am offering is going to address this, I hope, in a meaningful way.

    Just last Friday—I guess a surprise vote to some—we decided to allow America's seniors to import drugs from Canada. Why did we do that? Because everybody knows the story: The very same American drug companies that make these products in America, when they turn to sell them in Canada, give them a deep discount. Why? Because the Canadian Government says to them: If you want to sell drugs in Canada, then you have to discount the cost to Canadian citizens.

    So here we are, in our States bordering Canada, just a few miles away from pharmacies in Canada selling identical drugs to those sold in America at a fraction of the cost. Now, of course, that is a benefit to Canadian citizens. And we decided last Friday we would make certain that benefit was there for American citizens.

    We can reimport drugs—in other words, made in the United States, shipped to Canada for sale. We will now, under the amendment we adopted by Senator Dorgan of North Dakota, allow Americans to repurchase the drugs from Canadian pharmacies to bring them back into the United States. Isn't that an awkward, clumsy, and convoluted way to provide a discount to America's seniors? It certainly is. But we voted for it on a pretty substantial rollcall. I think over 60 Senators supported it because we understand for many seniors that Canadian discount makes all the difference in the world.

    Unfortunately, this reimportation from Canada is temporary, and it is not a permanent part of what we are debating here. In fact, there are few, if any, elements in this underlying legislation that give seniors in America a fighting chance to get anywhere near the discounted prices being offered to families in Canada for the prescription drugs they need. In other words, we are offering a helping hand from the Government to pay for your prescription drugs, but offering no force or no element—certainly very little—within this bill to try to reduce and control prices.

    You may think: Is Canada that powerful that they can dictate to the American drug companies they have to discount their prices? Well, I can tell you, the Canadian market represents about 2 percent—2 percent—of the sales by American drug companies, whereas the United States market represents 53 percent. If we, as a nation, turned to these same drug companies that have bargained with Canada and said: "We want the same thing for Americans," you can bet we would achieve it. But this bill does not do that. The Grassley-Baucus bill does not do this. It does not create this force for competition and this force for bringing down costs.

    Some will come to the floor and say: Durbin, this amendment is nothing short of socialism. You are trying, with a radical idea, to change the market structure in America, take away the free market competition, and dictate prices, and that is just unfair. We should not do it. And that is not American.

    Well, I would ask them to place a call to the Veterans' Administration because the Veterans' Administration already does the same thing. The Veterans' Administration bargains for our veterans so the prescription drugs they receive are at a reduced cost. Why, if our Government will stand up for our veterans to get reduced costs for prescription drugs, is that any different than saying, under this bill, we should also be bargaining to make certain we can bring down prescription drug costs across the board? It will mean the program is more affordable for seniors. It will also mean the money we dedicate to the program will be with us for a while, a lot longer than as proposed under this bill.

    So we do several things in this substitute amendment. I am not going to take any further time other than to just say a few words about this amendment, who supports it, and what it stands to achieve.

    It is being offered on my behalf, as well as Senators CORZINE, HARKIN, BOXER, STABENOW, DAYTON, and BYRD. It has been endorsed, to this point—we think other endorsements will come—by the Alliance for Retired Americans as well as the National Committee to Preserve Social Security and Medicare.

    Here is what it does. It defines the benefits in statute. The underlying bill does not. It eliminates the coverage gap. The underlying bill has a coverage gap, where, after a senior has spent a certain amount of money for prescription drugs, there is no coverage until it reaches a catastrophic level over $5,000. It eliminates the deductible of $275 proposed by this bill because we found with price competition we can bring down the overall cost. It increases cost sharing. It guarantees a stable fallback. In other words, if there is not a private prescription benefit pharmacy manager offering alternatives to seniors, we allow Medicare itself to offer a prescription drug plan. That is a fallback always available under our bill. You do not have to be eliminated from the one to offer the other. This is always a fallback. And it allows employer coverage to count toward out-of-pocket spending.

    The average cost for prescription drugs for seniors in this year is expected to be approximately $2,300. Under this bill we are considering on the floor today, seniors could get back maybe one fourth of that, $600. Every dollar counts and I commend my leaders in the Finance Committee for bringing this to us, but it is $600. Under the MediSAVE plan, my substitute amendment, seniors will have no deductible, lower cost-sharing, and face no coverage gap. The average senior can save up to 50 percent of the cost of those $2,300 in drugs, almost double what is offered by the underlying bill.

    There is no guaranteed benefit for seniors in the underlying bill, and premiums are left up to insurance companies to decide. Under the MediSAVE plan, which I will offer, the Medicare-delivered benefit is outlined in statute so all seniors who choose to receive their benefit through Medicare will be guaranteed the same package, the same premium, no matter where they live in America.

    As I said before, we address skyrocketing drug prices whereas the underlying bill does not. Incidentally, the Veterans' Administration has saved about $943 million in the past 6 years because it has bargained with the drug companies on behalf of seniors.

    We also maintain choice. I see some of my Republicans friends have sent a letter to the President saying: We have to allow for innovation. We have to allow for competition. Agreed. We say: Fine, private groups and insurance companies can offer the prescription drug benefit as an option, seniors get to choose. But they always have a Medicare fallback they can choose.

    Some say: We don't want this Government agency running this. Why do we want a Government agency in charge of it? Well, because Medicare has no profit motive. Medicare has a low administrative cost. If the VA runs the program for veterans and we don't consider that socialism, what is wrong with the idea of having Medicare in here competing with these private insurance companies. Eighty-nine percent of seniors today stick with Medicare rather than going to some HMO choice plan and/or private plan under Medicare. That tells you they like Medicare better. Why should we deny them this chance under prescription drugs.

    MediSAVE creates a reliable fallback that is Medicare, and I think that is good for seniors. And MediSAVE will incentivize employers to maintain benefits. This is a fear we have. We don't want to do anything that will hurt the employers currently helping retired seniors, and we want to make certain we encourage their continued participation.

    Under S. 1, funds employers put toward retiree costs don't count toward the retiree's Medicare out-of-pocket cost. Under MediSAVE, they would count.

    Mr. President, I know it is late. I know a number of amendments have been offered. But at this point I would like to send my amendment to the desk and ask that it be read and then held at the desk.

    Mr. GRASSLEY. Mr. President, reserving the right to object, I assume he asked unanimous consent to set the amendments aside.

    Mr. DURBIN. Which I will do. I will send the amendment to the desk. I don't know if it should be reported at this moment, but I ask it be set aside.

    Mr. GRASSLEY. Could I say this: If you would allow me, rather than reserving the right to object, when he asks unanimous consent to set aside an amendment to offer his amendment, I am not going to object to that. But the leader has asked we have no more amendments tonight. So I would then be forced to object to any other amendments from either side that would come up.

    The PRESIDING OFFICER. Does the Senator object to this amendment at this time, or does anybody else object to it?

    Without objection, the clerk will report.

    Mr. DURBIN. I thank the Senator from Iowa and my colleagues.

    Mr. REID. Before the Senator yields the floor, would the Senator yield for a question?

    Mr. DURBIN. Yes.

    Mr. REID. This is a little off point, but we are talking about jobs. Is the Senator from Illinois aware that the Bureau of Labor Statistics issued its latest unemployment figures today?

    Mr. DURBIN. I did not see those.

    Mr. REID. Would the Senator be surprised that under this administration, which is always talking about what a great job they are doing with the economy, we now have the highest unemployment rate in 106 months; it has jumped up now to over 6 percent? Is the Senator surprised at that number?

    Mr. DURBIN. I wish I was, but we have lost 2 million jobs under this administration already. So it is no surprise we continue to lose jobs in America. I am sure it is tough in Nevada. It is tough in Illinois. We have lost good paying jobs. I run into a lot of people who, frankly, have no place to turn in this economy.

    Mr. REID. Highest unemployment in 106 months.

    Mr. DURBIN. I would just suggest to the Senator from Nevada, it is curious to me that the President, with his tax cut program for stimulating the economy, had his first chance at it. The Senator can refresh my memory. Two years ago didn't we cut taxes, as the President suggested, primarily for the higher income individuals?

    Mr. REID. For job creation.

    Mr. DURBIN. Wasn't that about $1 trillion or more in tax cuts we were proposing for job creation?

    Mr. REID. I would respond to my friend, if the last tax cut we had creates as many jobs as the first tax cut, we are in big trouble.

    Mr. DURBIN. I would say there is that old adage that once you are in a hole, the first thing you do is stop digging. If I am not mistaken, didn't this administration come back and want to dig that tax cut hole deeper within the last few months, and still we see these job statistics telling us this is a failed economic policy?

    Mr. REID. My friend is right. The Bureau of Labor Statistics found that national unemployment had increased in April to more than 6 percent, highest unemployment in 106 months.

    Mr. DURBIN. I would like to ask the Senator from Nevada, was he aware of the fact we are now proposing the creation of jobs in Iraq, and some people have said we are going to create jobs where frankly we will give money to the people of Iraq, but they don't to have show up for work for a while? That might go over pretty well in my State if we would like to create a program like that. But I would like to ask the Senator, we are talking about the fact that this President took over after the economy had grown at a record pace for 7 or 8 years under first his father and then under President Clinton.

    Mr. REID. I respond to my friend there is some dispute as to what the 10-year surplus was when he took office. Some say $7.1 trillion. Some say 6.2. But trillions of dollars over 10 years. And in fact, the last 3 years of the Clinton administration we had been spending less money than we were taking in. We were retiring the debt. But we are not worried about that anymore. We will have this year, some say, a debt as much as $600 billion, of course, not counting the Social Security surpluses which are used to disguise this. So I don't know where all this great economy is. It is not in Nevada.

    Mr. DURBIN. I ask the Senator, would that $600 billion debt, if that is what we end up with, would that break the record under the Reagan administration which I believe was in the hundred billion dollar range?

    Mr. REID. The debt this year will be the largest in the history of the world, not only the United States.

    Mr. DURBIN. I would like to ask the Senator from Nevada, a lot of the fiscal conservative Republicans used to say you had to have fiscal discipline, get your house in order. Is he hearing the same thing I am hearing from those same fiscal conservative Republicans now, that deficits don't count, debt doesn't count?

    Mr. REID. We not only have statements that would fill volumes about how bad the deficit was. And, in fact, I can remember Alan Greenspan telling us the most important thing we could do—he appeared before the Appropriations Committee—was get rid of the annual deficits. We followed his advice and did that. He is still chairman of the Federal Reserve. I wonder why he is not talking now along those same lines.

    Mr. DURBIN. It is a curious thing. I recall when President Clinton was preparing to take office, that same Chairman Greenspan came to Little Rock in the transition and said: The most important thing you can do for the long-term economy is to reduce the long-term interest rates which means get serious about the deficit. President Clinton took that to heart. I think the Senator, was in the Senate, and I was in the House when President Clinton came in with his budget, which didn't get a single Republican vote in the House or the Senate. It passed in the Senate with the tie-breaking vote by Vice President Gore and then, because the Democrats stood up and did what was right for the economy, we saw this dramatic period of economic growth where people's savings were growing, retirement plans were growing, where we created some 22 million new jobs, inflation was under control, new housing starts, new businesses. And we are not talking about the deep dark recesses of American history. This was just a few years ago.

    Now in 2½ years, it is amazing what this President has achieved. He has managed to lose jobs at a faster pace than any President in history and create the largest deficit in the history of the United States, all in the name of fiscal conservatism. It is really hard to imagine anyone can say with a straight face that is a conservative, disciplined approach to dealing with the budget.

    I am sure in Nevada and Illinois the people don't like this economic policy and what it has meant.

    Mr. REID. This is something I can't understand, why there is so much silence on the other side of the aisle about these huge annual deficits he has created, especially since when he took office we were spending less money than we were taking in. To think that the country is in such deep trouble. Does the Senator realize parts of our national parks are actually closing because of a state of disrepair, our great national parks? We have money in our highway trust fund that people pay when they go to the gas pump, but this money is not being used for highways. We are trying to come up with a highway bill, but the President is not allowing us to spend the money on highways. He wants to spend it on jobs in Iraq. I don't know what he wants to spend it on.

    I didn't answer the one question the Senator asked about Iraq. Not only are they trying to create jobs in Iraq, they are now talking about paying Saddam Hussein's army for back pay while they were fighting Americans. Is the Senator aware of that?

    Mr. DURBIN. I was not aware of that. I certainly want to see stability in Iraq. We all do, because otherwise it could disintegrate into another vacuum, a terrorist training ground. We don't want that to happen.

    But it is curious to me, when it comes to the military cost of that war and the cost of reconstruction, there is no end in sight. It doesn't seem to bother people from the administration to continue to call for billions of dollars for this purpose.

    But I would like to ask the Senator from Nevada this. He was serving here, as I was, when this President came in with something called No Child Left Behind, where we were going to send money to the schools across America for accountability and testing and upgrading of teacher skills. If I am not mistaken, this President had a White House bill signing ceremony, with Democrats and Republicans all applauding his No Child Left Behind. Yet when we look at the budget that was sent to us by this President, he is not providing the resources that we know will be needed for these schools. The Senator's State, I think, may be leading the Nation in the growth of school enrollment. In my State, we are struggling with our own deficit and cutbacks of State assistance to school districts.

    So here we have President Bush's new mandates in No Child Left Behind, with no money to pay for them, while the local sources of revenue, from State sources and local property taxes, cannot keep up with demand. So what the President has done by saying we are going to focus this money on other things and tax cuts is shortchange education.

    Mr. REID. Mr. President, I spoke to our State legislature and I said the President's No Child Left Behind Act is leaving lots of children behind. There was a little criticism for my having said that. But I was right.

    In the State of Nevada, as we speak, the Clark County School District, which is the fifth largest school district in America, is talking about cutting back the school week to 4 days. Some of the good programs, such as the athletic programs, which I believe in, and programs dealing with the band and drama they are talking about eliminating, and they are talking about doing away with the programs for the academically talented. In fact, unless the legislature can get some resources from the State of Nevada—they don't expect anything from the Federal Government—the Clark County School District is talking about stopping all-year-around school. We have a year-round school district. They have been talking about closing schools. Well, talk about leaving some kids behind; that is it.

    Mr. DURBIN. I don't think many Americans would argue that our children are overeducated. I know the State of Oregon closed their schools earlier this year, and the idea that we would eliminate part of the school year, afterschool programs, and summer school programs, to me, means these young people are not going to be given the chance they need to improve themselves.

    I know the Senator from Nevada, probably more than anybody in this Chamber, has focused on the dropout issue. If we don't really have a sensitivity to the number of kids dropping out, we should not be surprised at what is happening to them. They end up with lives that are not as productive as they could be, and sometimes they end up in tragedy. If you are going to cut back on the school year, a child who really needs a helping hand to be a good student is more likely to be discouraged and less likely to be educated. How can that be good for our Nation? I know the Senator has focused on the dropout rate in the past.

    Mr. REID. Senator Bingaman and I worked for a number of years to try to create within the Department of Education an education czar because children who drop out of school are never what they could be. We have so many students dropping out of school, and it is a shame. Those children who drop out of school will be relegated to menial work for the rest of their lives—if they are fortunate to be able to have any kind of work.

    So the afterschool programs, which the Senator from Illinois and Senator Boxer have worked on for years, are programs that, in most States, they are not even considering anymore.

    Mr. DURBIN. Is it unfair, then, to bring this together and say if we are going to see this President continue to put unfunded mandates on schools and not put the Federal dollars into education, and we are going to see education cut back at the State and local level, that is going to lessen the opportunity for children to pick up the skills and education they want? This is no way to deal with an unemployment problem. Frankly, it is a way to guarantee that that problem is going to become chronic and long term because we are not investing in making young people productive and educated.

    So the No Child Left Behind program and the unfunded mandate by the Bush White House really was lost to this whole argument about tax cuts. The President says we need tax cuts for jobs and growth. It just hasn't worked. As the Senator from Nevada reported today—I forget the number—it has been over 100 months since we have had such high unemployment.

    Mr. REID. It has been 106 months.

    Mr. DURBIN. So that is somewhere a little less than 9 years to go back to a period of time with the unemployment that high. It doesn't appear that the President's first tax cut has kicked in. If it has, it kicked a lot of people out of work. We ought to think long and hard about whether we continue down this path.