Health Care Reform

Floor Speech

HEALTH CARE REFORM -- (Senate - September 23, 2009)

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Mr. THUNE. Mr. President, I wish to thank the Senator from Tennessee for very effectively making the arguments that many Americans want to hear voiced in this debate about health care and a whole range of other issues. The Senator from Tennessee has pointed out as a former Governor--and we have another former Governor, the Senator from Nebraska, here today as well--the impact that many of these proposals would have on State budgets. The former Governor of Tennessee has described it as ``the mother of all unfunded mandates.'' I think that is a view that is shared by many other Governors across this country, about the impact some of these expansions would have, not just on Federal budgets but on State budgets.

I have had numerous discussions with the Governor of South Dakota about this and he last suggested that the minimum amount, the conservative amount of additional funding that would be required each year to meet some of these expansions of Medicaid that are called for in these various health care reform bills would be about $45 million a year. Around here that doesn't sound like a lot of money, but in the State of South Dakota that is real money. That is a real impact and it would require higher taxes or significant cuts in their budget in my State of South Dakota. So that is one aspect of this argument.

I might say that like some of my colleagues who over the month of August were out in their individual States listening to their constituents, I was doing the same thing. I conducted a series of townhall meetings in my State and I heard from people all across my State in every geographic region. Of course, as is typical in the Midwest, people were very respectful and it was a very civil discussion. But one could not miss the intensity people felt on not only the health care issue, because that happened to be the main subject of debate, but a range of other issues. I think it comes down to two fundamental issues. I think at least in my State of South Dakota this seems to be the case--as it was in some of the other meetings around the country in other States--that people were concerned about two issues. One was the issue of control and the other was the issue of cost.

With the issue of control, it is a question of who has the power when it comes to the debate about health care and when it comes to the debate about higher energy costs. Is all this sort of consolidation and expansion of the Federal Government here in Washington, DC going to mean people in this country have less control when it comes to their own health care? Is the government going to be stepping in and intervening more and making a lot of these decisions and dictating out of some bureaucracy in Washington, DC what happens in the world of health care, which for most people is very personal to them? That is why I think there was such a visceral reaction across the country to some of these proposals.

I think the other issue is cost. People have a sense that things are sort of spinning out of control. I think there are a couple of sort of basic principles that are fairly pervasive in the mindset of most people where I come from in the upper Midwest and that is, No. 1, you can't spend money you don't have; and No. 2, when you borrow money, you do have to pay it back. They see this incredible borrowing spree and this incredible spending spree here in Washington, DC and they are wondering, How is this all going to end? What does it mean not only for me and for my family but for future generations? Are we borrowing at levels that are not sustainable into the future? I think that has really gripped people across this country as they have looked at not only the health care debate but also the question of all of these government takeovers of financial services and insurance companies and auto manufacturers, and the list sort of goes on and on.

The most recent example of that would be student loans where, again, we see the Federal Government trying to pull the reins in and move all of the guaranteed loan programs that currently operate in this country through the financial services industry and commercial banks into the Federal Government. The Federal Government would be the entity that makes all of these loans directly. Well, that ends up adding several hundred billion dollars to the Federal debt which we are already talking about raising here in the middle of next month. In the middle of October the debt limit is going to have to be raised. So we have all of that student loan exposure now, liability coming on to folks from the Federal Government. We have TARP which is said to expire at the end of this year, on December 31, unless Secretary Geithner certifies to Congress that he is going to extend it.

I wrote a letter--and last week 39 of my colleagues signed it--asking the Secretary of the Treasury when TARP expires on December 31 not to extend it because, there again, there are unobligated balances in TARP funding that could be used that would reduce the overall amount of the debt, the overall amount of the deficit.

And the truth be known, I don't think any American wants to see the TARP funds becoming a slush fund to fund other types of endeavors the Federal Government might undertake. They want to see this program that was temporary and was designed to prevent imminent financial collapse and provide stability to the financial services industry expire. Now that that purpose has been served, we should not continue to have hundreds of billions of dollars of taxpayer dollars out there that could be recycled or put into some other industry the government decides to select.

I hope the Secretary will heed the suggestion made by myself and 39 colleagues in our letter and let the TARP program expire. I say that because this paints a broader picture, a narrative, that I believe is of great concern to the American people, which is the reason we saw so much intensity at many townhall meetings over the break.

The health care debate is occurring right now in real time. We have had four of the five committees record bills that have jurisdiction over health care in the Congress--three in the House and one in the Senate. The Senate Finance Committee is marking up their bill this week. We expect that will be completed and that this could be put on the floor sometime in the next few weeks. That seems to be a very fast schedule considering the consequence of what we are doing. We are talking about one-sixth of the American economy, about reorganizing one-sixth of the American economy. Mr. President, $2.5 trillion annually is spent on health care in this country. I think we better make sure we do it right. All we have seen so far in the Finance Committee is a 220-page summary, which we assume, when translated into legislative language, is going to be more than 1,000 pages. That is something many of us will want to have time to digest, and we would like our constituents to look at it to see whether it makes sense to them.

I think probably the biggest reaction I saw during the August break in the discussions I had with constituents in South Dakota was a negative reaction in opposition to the notion of a government plan, that the government would create this public plan option--essentially a government plan. A lot of people who derive health care coverage in the private marketplace today would by default be pushed into that government plan, and you would have the government involved at a much higher level in driving a lot of the health care decisions in this country. There was a real reaction to that.

The point I made earlier as to what I think people were reacting to is the issue of control, power. Who has the power? Is the Federal Government trying to buy this expansion, create more power in Washington, and take away some of the power and decisionmaking that should occur between patients and their doctors? That was the one issue. The Finance Committee plan, to their credit, has done away with that--at least for the time being. They decided to proceed in a different direction.

That being said, the issue remains that people were responding to during August; that is, the issue of cost. According to the Congressional Budget Office, the overall cost of this, for the immediate 10 years, is a little under $1 trillion. When fully implemented, the cost of the plan is still $1.7 trillion, which has to be paid for somehow. They said they are not going to add to the deficit. The proposal is to reduce Medicare by $500 billion. The balance will be raised in the form of tax increases, revenue raisers.

People are looking at this and saying: OK, a $1.7 trillion expansion; what do we get in exchange for that? People will be covered who are not currently covered, but a lot of people who don't have insurance still won't be covered under the proposal the Finance Committee is currently considering. But it is still going to cost $1.7 trillion.

If you are a taxpayer saying: OK, what is this going to cost and how may it impact my insurance premiums if I already have health insurance coverage, I think the answer was given by CBO Director Doug Elmendorf in response to a question. Senator Cornyn posed the question, and it had to do with: Will this lead to higher premiums? If you read from the letter, it says:

Senator, our judgment is that that piece of the legislation would raise insurance premiums by roughly the amount of the money collected.

Whatever is collected in the higher taxes that are going to be put on somebody else--that is always the assumption--is going to be put, in this case, on the insurance companies. But does anybody believe for a minute that will not be passed on to the American consumer? It is going to be.

So what does this legislation actually do to drive costs down? My whole argument in this health care reform debate has been that anything we do ought to bend the cost curve down, not raise it. Almost every proposal we have seen increases or raises the cost curve. This is another example, according to the CBO, of a plan that, in the end, is going to raise insurance premiums for most Americans.

The other thing I think is important to note here--and the same response was given by the chief of staff of the Joint Tax Committee. He answered the question the same way: We analyzed this largely falling on the consumer, and that would happen in a couple of different ways. This is going to be eventually little paid by the consumer. It is a tax increase.

The other point is that the assumption is that the portion that is not raised through revenue increases, tax increases, will be paid for in the form of Medicare reductions. Do we really believe $500 billion in Medicare reductions will be achieved by the Congress? And we know how difficult it is around here to talk about reducing Medicare. My view is, if we are talking about making Medicare more sustainable, we ought to look at how we can reform it and find savings. But this is going to take a new entitlement program and put it on top of a program that we are told will be bankrupt by 2017.

I still think we can do health care reform here that does bend the cost curve down, lowers costs for most Americans, and provides access to more Americans as well. We have not seen a proposal yet that doesn't include a significant increase in the amount of Federal Government control, of power in Washington, DC, an expansion of the Federal Government. We have not seen a proposal that actually does anything to get costs under control for most consumers. For most consumers, that is the issue; it is a cost issue. Furthermore, we are looking at proposals, from a taxpayer's standpoint, that will increase spending and borrowing and it will pass more and more of that debt on to future generations.

So we need to proceed slowly and get this right. We need to focus on ideas that actually reduce costs, such as allowing people to buy insurance across State lines or to join small business health plans, which is something we have tried to get through for a long period of time, unsuccessfully, or dealing with medical malpractice reform, so people can get insurance in the private marketplace.

This level of government expansion, this level of spending and borrowing is unacceptable to the American people. That is why they are reacting so negatively. It comes down to control and who has the power. Is it the Federal Government or the American people? It comes down to costs. What are we doing to future generations with the amount of spending and borrowing we are doing?

I hope we will take it slower and get it right and focus on initiatives and ideas that will get costs under control and that before Congress adopts health care reform, that will be the focus, not expansion of government in Washington, DC, at trillions of dollars in additional costs to the American taxpayer and no savings to the ratepayer out there trying to get their insurance premiums under control.

I yield the floor.

The PRESIDING OFFICER. The Senator from Nebraska is recognized.

Mr. JOHANNS. Mr. President, I wish to start out this morning by complimenting the distinguished Senator from Tennessee and the Senator from South Dakota. They have raised some excellent points. As I have listened to them, I have to tell you, I think they have offered a lot to move the debate forward.

I rise today to shine the light on what I consider budgetary gimmicks and omissions in the Finance Committee health care proposal.

Both Republicans and Democrats should be able to agree that one of the things we need to do in accomplishing true health care reform is to do it in a fiscally responsible way. We all went back home in August, and I heard the message very loud and clear from Nebraskans. They want honesty and full transparency as we attempt to achieve health care reform.

Americans believed the President when he said he wanted an open and transparent process. We all agree on that. Unfortunately, what we have is not transparent, and I argue that it is based on false assumptions. Honestly, an American family would have to hire a whole team of accountants to understand all that is hidden in the Finance Committee draft.

While the CBO has scored the bill as $774 billion, the real cost of the bill--and that cost is moving up every day--is closer to $1.7 trillion over 10 years, as the previous two Senators have pointed out. What its supporters neglect to tell you is that the main spending provisions in this proposal don't go into effect until 2013. That is right, the American public will have to wait 4 years before most of the new initiatives even get off the ground. So none of us should be surprised when the American people really laugh at an arbitrary deadline of the end of the week or the first of next week for finalizing committee action. They don't understand the need to hurry. The proponents claim it is such a crisis that we should rush through. Yet their fixes don't take effect for 4 years.

You can understand the American public's frustration and skepticism. They must watch the evening news--whatever their flavor of news is--and look at the Capitol dome and ask the question: What is going on? What is happening out there? They have to be scratching their heads in amazement. If they ran their business or household this way, they would be in bankruptcy.

If that weren't enough to fill an entire gymnasium full of townhall participants, there is, unfortunately, much more. The proposal requires new taxes on everything from medical device manufacturers, health insurance premiums, and pharmaceutical manufacturers, topped off with additional Medicare cuts of about $500 billion and, of course, unfunded mandates on the States in the form of the expansion of Medicaid, which I am all too familiar with as a former Governor.

Let me translate this. Higher taxes will be passed on to the American people. All these taxes, these fees, and these mandates will only increase the cost of health care. They don't decrease it when all this is passed on to the American consumers.

While the promised benefits don't kick in until year 4, the taxes and fees, interestingly enough, start right away, almost on day one.

In effect, the bill is structured to impose 10 years and $848 billion worth of new taxes and fees, and you get in return 6 years of additional benefits under this bill. The creative accounting, unfortunately, only appears to get cheers inside the beltway. Yet the average American thinks we don't have a clue.

Another hidden cost is the new mandate on States through an expansion of Medicaid. I wish to spend a moment on that.

Partial costs to expand the Medicaid Program up to 133 percent of the poverty limit will be put on the States. This unfunded mandate will cost States--and estimates will vary--about $42 billion. Of course, that is not built into the cost estimate, not because the American people don't pay for it, because they will, but because it doesn't fall on the Federal budget. Who gets to pay the costs here? Well, obviously, once again, it will fall on the American people.

I come from a State that is fiscally responsible. We have only two ways to deal with this kind of issue because our constitution prohibits us from borrowing money. What a unique concept; Nebraska doesn't borrow money. We have only two choices: we can cut programs or we can raise taxes. If we cut programs, things such as education, senior initiatives, infrastructure projects, prisons to keep the bad guys out of society, and other very valuable programs could find their budgets destroyed.

In these times of tight budgets, States have already slashed their budgets. They are down to the bone, and they are trying to figure out how they will balance next year's budget. I suggest the Federal Government giving them another layer of spending is not the answer.

The other alternative is to raise taxes, hit the consumer again. But that is not the right way to go either. But it seems that what we are doing with this mother of all unfunded mandates is making this choice inevitable.

Folks in Nebraska and across the country are going to resent seeing their State paying higher taxes because the Federal Government put them in this fiscal straitjacket. In addition, one of the main pay-fors in this legislation is $400 billion, $500 billion in Medicare cuts. Despite the fact that the Medicare trustees report projects that Medicare will be bankrupt by 2017, none of the $400 billion goes toward shoring up our already pending fiscal crisis.

The false promise being made is that we can both fund this new entitlement with Medicare money and keep our commitment to senior citizens. I am not naive enough to buy that bag of goods and neither are our seniors. We are asking them to choose the prize behind the curtain when the prize is a goat.

I am deeply concerned that we are compounding the problem by not reinvesting these dollars back into Medicare. That is why I hope the Finance Committee will see the light today and adopt important amendments by the junior Senators from Kansas and Nevada.

Even the nonpartisan Congressional Budget Office Director admitted yesterday that these cuts to Medicare will decrease current insurance benefits that our seniors now enjoy.

Finally, this Finance Committee proposal is built on false assumptions when it comes to cost containment. The bill is based on the fantasyland assumption that scheduled sometimes double-digit payment cuts to medical professionals will be allowed to take place. The history is very much the opposite. We do the doctor fix on an annual basis.

Any Senator who votes for this Finance Committee proposal should be required to publicly state their support for a 25-percent cut in physician reimbursement rates beginning in 2 years.

Their proposals credit themselves free money by assuming savings in this area. Yet they know Congress waives the Budget Act, waives pay-go, and suspends these cuts year in and year out with a lot of support, I might add.

In fact, the Congressional Budget Office states:

These projections assume that the proposals are enacted and remained unchanged throughout the next two decades, which is often not the case for major legislation.

For example, the sustainable growth rate, SGR, mechanism governing Medicare's payments to physicians has frequently been modified to avoid reductions in those payments.

Therefore, I am not going to count on Congress acting any differently in the near future, and any cost estimate that assumes otherwise, I say, is not based on reality. We all know what they say about good intentions, but I still believe you do not spend money until you know from where the money is coming.

The American public simply deserves a very transparent discussion about our current and future actions, what they are going to cost, and what they will lead to in terms of our health care system instead of a house of cards. The American people have asked us to be transparent. They know we have to make tough decisions. They just want to understand the ramifications of what we are deciding. That means they want us to read the bill. They want us to do that before we vote. They want us to have a full picture of how this will affect budget deficits and the fiscal outlook. And they want us to communicate that to them.

The American people want to know how this proposal will impact them and what it will do to the current health care system and their costs. Basically, they want us to know all the details before we rush into a vote. That means we need the time to look at this bill. This is going to be a 1,000-page bill, a Senate Finance Committee with no legislative language that is working now, a plan to consider almost 500 amendments, and yet they want to get it done this week. Mr. President, it is time to call a timeout and get this right.

I yield the floor.

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