Statements on Introduced Bills and Joint Resolutions

Floor Speech

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - August 06, 2009)

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By Mr. BENNET:

S. 1613. A bill to reduce the Federal budget deficit in a responsible manner; to the Committee on the Budget.

Mr. BENNET. Mr. President, I cannot tell you how much I appreciated your remarks--I was sitting in the chair--and those of Chairman Dodd as well. The hour is late. The idea that you would be here at that hour to talk about something as important as health care is appreciated, I know, by the people in your State, but also by the people in my State as well. So I say thank you for that.

I also want to talk about health care. I want to talk about health care in the context of fiscal discipline in this country. As you know, our Nation's annual deficits are staggering, and our national debt is absolutely unsustainable. For the future of our country and for our children's sake, as we recover from this devastating blow to our economy, we have to stand together and begin to start the difficult, but essential, work of putting our fiscal house in order.

Health care reform must help solve this Nation's fiscal problems, not make them worse. To accomplish this, effective reform must bend the cost curve in health care spending both in the private and public sectors.

In part because of years of neglect and inaction, this Congress has reached a defining moment of reckoning. Rising health care costs, especially Medicare costs, are now the largest driver of our deficits. Our Nation's health care spending, as you were just saying, is 17 percent of our Nation's gross domestic product and is expected to grow to over 20 percent of GDP in 10 years, on its way, as you said, to 35 percent.

Health care alone--just health care--will soon account for one-fifth of our economy. This represents a greater share of the GDP than our manufacturing, agricultural, forestry, mining, and construction industries combined.

As we emerge from this terrible recession, the worst since the Great Depression, we cannot commit one-fifth of our economy to health care and expect to compete effectively in the global marketplace.

Adding to the urgency of the problem, this recession has made rocketing health care costs even more painful for families and businesses in the last 15 months. Both large businesses and small businesses have cut some 5.1 million jobs, and 2.4 million of these newly unemployed workers have lost the health coverage their jobs once provided. Now the same people must try to find insurance in the individual market where they can be rejected by private insurance companies for preexisting conditions such as asthma, diabetes, or even cancer.

Health care costs are strangling opportunities for working families and small businesses all over my State and the country. As health care costs rise, families are forced to make choices no one should have to make between insuring their families or their employees and sending their kids to college, taking lower paying jobs with less responsibility just for the medical benefits and defaulting on their mortgage payments to pay for their medical bills.

Every one of these examples springs from the experiences of people in my State. And it is no mystery why people are having to make these terrible choices. Middle-class wages are not even close to keeping up with these rising insurance costs. While median family income in this country fell by $300 during the last decade--staggering, by the way; over a decade in real dollars, median family income in the United States actually declined by $300--health care costs increased over the same period by 80 percent.

The cost of health insurance is eating into family budgets faster and faster. Over the past decades, premiums for Colorado families, as this chart shows us, have more than doubled, growing four times faster than wage increases. The cost of premiums for a Colorado family is over $13,000 today. If we do nothing, by 2016, Colorado families will be spending over $25,000 on their premiums, a 90-percent increase. We have come out of a period with an 85-percent increase, and if we do nothing, we are going to end up in a period with a 90-percent increase, with no real increase in wages.

Left unaddressed, this imbalance, which is the creation of our catastrophically inefficient health care system, will destroy the middle class in this country. If we do nothing, if we continue on with the status quo, by 2016, just 7 years from now--and I believe these numbers are very similar to the ones you quoted for Rhode Island--by 2016, 40 cents of every dollar a typical Colorado family earns will be eaten up by health care costs, leaving just 60 cents for everything else.

Think about it. That is almost half an average family's income. Money spent not to educate their children, not to feed them or house them, but just to cover the cost of the family health care plan. And that is just paying for coverage. Never mind if you actually get sick.

In 2007, 62 percent of the personal bankruptcies in this country were due to medical costs. Traditionally, most people's employers help pay for cost increases. That has been the case for over many years. But I heard from employers all over Colorado having to make tough choices--cutting back on benefits and laying off more costs to their employees.

In the coming years, copays for Coloradans will go up double digits. More Coloradans are being forced into health plans with higher deductibles, and more employers are getting out of the business of providing health insurance for their employees altogether.

Mr. President, we won't be able to completely flatten the health care cost curve in the short run, and we should be careful not to overpromise, but we have to make the rising cost of health care something our economy can plausibly absorb.

Part of the solution is reducing waste and curbing overpayments to insurance companies, and part of the answer is encouraging patients to seek preventive care. Small businesses may not see health costs go down immediately, but we sure can slow their rise. And we have to work hard to make sure they do not rise this quickly. Reforming our health care system could save over 100,000 small business jobs in the coming years that would otherwise be lost if we do nothing.

I agree with bipartisan voices saying that our first health care goal has to be to drive down costs, and we must start with Medicare. As I travel throughout Colorado, I have met countless physicians, nurses, and hospital workers who tell me about the perverse incentives in Medicare. Instead of being paid to spend time with patients and produce better quality care, doctors and nurses are paid for the number of patients they see in the shortest amount of time and the number of procedures they perform. This is no way to produce patient-centered care, and it is no way to reduce cost.

Medicare doesn't just influence, as you know, the care of the elderly and disabled. As the largest health care program in the United States, Medicare influences every level of health care. Private insurance and employer-based health care look to Medicare as they make decisions on what to pay doctors, nurses, and hospitals. Owing to the perverse incentives in Medicare, however, since 1970--since 1970--every year for almost 40 years, year-in and year-out, Medicare spending per person has risen by over 8 percent each year, and private insurance spending per person has risen by over 9 percent each year.

If we expect reform to begin to gain any traction, we must drive cost down at the Federal level first. We can start by paying doctors and nurses to actually do what they are supposed to do and what they want to do--be focused on patients. We have to reform the system so that we are paying for quality and not volume. We must improve care, produce savings, and slow down cost growth by bundling payments, paying for performance and outcomes, and providing better coordinated care for patients and providers.

The burden is on us to meet the public expectation that we will drive down costs in the health care system and make it more efficient, that we will make the health care marketplace more competitive, and that we will provide affordable, stable health care coverage to the American people that can't be taken away because they lose a job, have a preexisting condition, or have reached some arbitrary cap.

Controlling health care costs would help our fiscal situation a great deal, and that is one of the fundamental reasons health care reform is needed. But this alone will not be enough to fill the deepening hole of national debt that threatens America's prosperity. The fiscal decisions we make today matter so much because they will dictate the well-being and range of choices of the generations that follow us.

Sometimes, with the daily hail of press clippings, these issues may seem overly complex, but I like to use a pretty simple analogy. The way we run our government is not different than if you or I were to buy a house--probably a bigger one than we reasonably could afford--and then we tell the bank to please send the mortgage documents to our kids. Imagine how that burden--paying for mom and dad's house--would constrain our children's choices. What dreams would they have to defer because their first obligation was a debt they didn't even incur.

My three daughters, ages 9, 8 and 5, have never had an economics class, but I can tell you that as much as they love their mom and dad, if asked, they would never do that deal--especially my 5-year-old, Anne. Whether we are taking her blanket away or telling her to stop sucking her thumb or putting a mountain of debt on her, she knows a raw deal when she sees one.

We in Congress owe the next generation much more than this, as the chairman, Senator Dodd, was saying. We ought to be able to build on our roles as parents and community leaders to respect our children, come together, and plan America's way back to fiscal health. The longer we wait, the more difficult the choices become. If we wait 10 years, we will face a massive gap between our spending and the revenue the government collects. If we wait 10 years to take action, we would have to increase individual income taxes by almost 90 percent to keep pace. That is an unacceptable outcome for Colorado's families. If you don't like tax increases, fine, then we would have to slash Federal spending by almost one-half. That would mean massive cuts to Medicare, our Nation's defense, and other critical initiatives that keep our country strong. No one wants to be put in a position to make those kinds of choices either. These outcomes are unacceptable, yet we can see them coming. That is why inaction is so unacceptable on health care and also on returning to policies of fiscal discipline. It is long past time to put in place the policies that will reverse this condition. And as with any deep hole, the first order of business is to stop digging.

The good news is that we have a tried-and-true way to stop making matters worse. In the 1990s, we had Pay-Go, which effectively forced the shovel from Congress's hands and made Congress stop digging. Pay-Go means that before Congress can create new spending on permanent programs, it needs to figure out how to pay for that new spending, just as every family in the States we represent.

Pay-Go helped turn 1980s deficits into 1990s surpluses, and we actually began to pay down our debt. Pay-Go is commonsense budgeting. It is not any different, as I just said, than what a family does when its spending gets out of hand. When that bad credit card statements comes in the mail, a parent knows it is time to sit down at the kitchen table and plan how to stop the spending. Pay-Go is what Congress and President Clinton did to respond to Washington's bad credit card bill.

Pay-Go was smart lawmaking because it imposed a culture of fiscal responsibility--and I would say discipline--on the Congress. Yet, for some reason, early in this decade a new administration let Pay-Go expire. That played a part in how these surpluses all of a sudden turned back into big annual deficits. This is how America incurred years of new debt.

The frustrating reality is that we are not getting enough out of borrowing all this money in the end--fighting an expensive war with tremendous unseen long-term costs to follow, ignoring the staggering costs of our health care system and entitlements, paying huge interest costs on our debt, in large part to foreign countries. These are hardly worthy uses of deficit spending.

In 2003, the Bush administration and Congress passed a new entitlement program called Medicare Part D. It is very popular, but we never paid a dime for it. They also chose two tax cuts for people who needed them least over fiscal discipline. They ignored skyrocketing mandatory spending. They created a brandnew bureaucracy and just saddled all of this heavy new weight on America's national debt.

In short, Washington was unwilling to ask the American people to pay for any of its investments--they put it on our children's shoulders instead.

And the tragedy of this incredible mismanagement is, it didn't work. Our economy plunged into its deepest hole since the Great Depression.

Fortunately, earlier this year, the House rightly passed new statutory Pay-Go. The Senate should pass Pay-Go too. That's why today, Senator McCaskill and I introduced Pay-Go. We believe that Pay-Go is one important way to make sure that our fiscal situation doesn't get any worse. Pay-Go is not a magic bullet, but it is part of the answer to our fiscal woes.

Once Pay-Go is in place though, we cannot stop there. Pay-Go will help us stop digging. But we also need to budget for the future, stop running large deficits and fill this fiscal hole completely. I am optimistic that this can be done, and it will take bipartisan commitment and discipline.

One place to start is with the growth of our yearly spending. Like Pay-Go, the yearly spending of Congress has also been done before, and it has worked.

That is why today I am introducing separate legislation, the Deficit Reduction Act of 2009, that would create yearly limits on discretionary spending. By pairing these discretionary spending limits with Pay-Go, we can start to make a substantial change in how Washington does business.

But it is not enough just to limit new spending across the board. Much of the reason that we are running such large deficits, is that we have made long-term spending commitments, called mandatory spending. To truly reverse the totality of our disastrous fiscal course, we must be willing to address rapidly expanding mandatory commitments too.

The best way--you know, it is funny, when you use the word ``mandatory.'' It is the word that should be used to express what this debt burden is we are putting on our kids. It will be mandatory that they pay that back before they make decisions about how to educate their own children; before they make decisions about how to provide individual health care in this country or make other kinds of investments all across the United States, in transportation or in new economies. What will be mandatory as we fall farther and farther behind in this global economy--what will be mandatory for them is to pay the bill left behind by their mothers and fathers.

The best way to get Congress to take a hard look at mandatory spending, is to place a flexible cap on our annual deficits. That's the other main component of what my new legislation would do. The cap in the Deficit Reduction Act is realistic--it would impose limits that are consistent with what economists believe we can sustain. This deficit limit is flexible--providing an exception when we are in a recession.

Here is how the deficit limit would work. Whatever the gross domestic product is in a given year, Congress must limit the deficit to 3 percent of the GDP or less. Economists tell us that this 3 percent number is sustainable over time, and that is a reasonably healthy ceiling. Now of course we should push to do better than running a deficit that is 3 percent of GDP. But this is a good starting point at setting and adhering to a budget. We would all clap if the deficits of today--12 or 13 percent of GDP--were 3 percent, and no one would clap louder than our children.

Under my legislation, if Congress failed to meet these deficit control requirements, the government would have to impose an across the board cut called a sequestration. Certain programs such as Social Security and veterans programs would not be subject to cuts. Yet most of the government's functions would be. The goal, of course, is to avoid this drastic measure by forcing Congress to plan ahead, and forcing Congress to pay attention to the deficit when it makes its spending choices.

Deficit limits make perfect sense during most years. But, as we have learned during this recession, an infusion of public funds can jolt a frozen economy and help turn that economy around. Running temporary deficits can kickstart a stagnant economy. But this only works if during healthy economic times, you also reduce government spending. The deficit limits I am proposing in this legislation would put Congress on a gradual track back to solid fiscal footing.

We should immediately enact budget reform proposals like Pay-Go discretionary spending limits and deficit limits. The CBO has concluded that after 2019, the rate at which we accumulate debt will continue to accelerate due to the aging of the population and increased health care costs. As angry as we all are with the excessive leverage in the private marketplace over the past decade that contributed to the market crashing, it is also obvious that Washington set a very bad example.

Let's put an end to these unsound fiscal practices. Let's not put our kids in the kind of situation we have inherited. Let's not make matters even worse, and the policy decisions regarding the national debt even harder for our kids.

What we need now is leadership and cooperation; not more shifting costs to our kids. The Congressional Budget Office estimates that if we remain on our current course, the total debt owed by the public will stand at over $17 trillion by the end of fiscal year 2019--only 10 years from today.

The point is that linked with our growing debt are the dreams and the plans of millions of American families. There is nothing fun about tightening our belt and cutting popular programs. I don't like it any more than anyone else who is here. Yet there are plenty of encouraging signs that this Congress and this President can stand together and do exactly that. Recently, just a couple of weeks ago, the Senate stood with the President for fiscal discipline and slashed nearly $2 billion from an outdated weapons system. That is a good start that I gladly supported. But so much more is left to do.

Coloradans already know we are in a bad way. People in my State are well aware that the excesses in recent years are catching up to us, and they know that Congress and the President have to make hard fiscal choices, reform health care before it eats up our entire budget, and pay for our reform efforts.

This challenging outlook may be just what it takes to bring both political parties to the negotiating table. Paired with Pay-Go, it is my hope that this new legislation can be a real starting point for meaningful fiscal negotiations. It is time we come up with an intelligent framework of fiscal management, that keeps Congress thinking ahead each time it makes a decision, and each time it puts together an annual budget, and each time it is faced with America's long-term fiscal trajectory.

Washington's fiscal mess was created over many years, and we won't solve the problem overnight. But this bill would give Congress and the President a guidepost to make the decisions necessary to get our budget under control. It would set a strong and binding standard for us to act responsibly.

We must start with what unites us. When I worry about what type of country we will leave my daughters and all of our young people, I know that others who vote differently than I do have the same worries. We owe more to our kids than to leave them a huge national debt and no plan to get out of it.

If we don't start making difficult decisions soon, we will be limiting our children's ability to make our country a better place, before they even get started. We will be limiting their ability to invest in education, life-saving scientific research, or new technologies that form the foundation of economic growth. We will be limiting their ability to defend the Nation during future times of war that we can't even think of today. And we will be limiting their chances of having a quality of life even better than what our parents and grandparents left to us.

If we fail to confront the tough issues so we can control the cost of health care, we will have squandered this narrow window of opportunity. If we fail to step up to the plate and pass a fiscally sound health care reform bill, this Congress will be remembered for years to come as having let down the country. If we fail--not just to stop digging this deep fiscal hole, but to put a process in place for climbing back up to solid fiscal footing--we will have failed to perform as the stewards of our children's dreams.

Let's stand together, with our President and with American families. Let's get health care reform done responsibly, let's take action to reduce the deficit and debt, and let's put this economy back on track.

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