Service Members Home Ownership Tax Act Of 2009 - Motion To Proceed

Floor Speech

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Mr. GRASSLEY. Mr. President, on November 10, former President Clinton visited the Democratic Senate caucus. It has been widely reported that his message to Senate Democrats was that on health care reform, the worst thing to do is to do nothing.

With all due respect to the former President, that is simply wrong. Mr. Clinton, the worst thing we can do is pass this bill. This is not something I say lightly because there are serious problems with our health care system. There are important steps we need to take to fix the problems in our system. But the excesses of this bill appear willfully ignorant of what is going on outside health care. Those things deal with our economy. Those excesses make this bill far worse than doing nothing.

We are a nation facing challenging economic times. We have seen the auto industry go into bankruptcy. We have seen banks shutter their doors.

I want to refer to a chart of our national debt. The Federal debt has increased by $1.4 trillion since inauguration. This chart shows the growing amount of debt the Federal Government is taking on. The amount of increased debt added since the inauguration is $11,535 per household. The national debt now exceeds $12 trillion for the first time in history.

I wish to show a chart on Federal health spending. As this chart illustrates, this bill bends the Federal spending curve further upward by $160 billion over the next decade. The red area of this chart is that net additional Federal health spending, not according to this Senator but according to the nonpartisan Congressional Budget Office. Americans have rightly lost faith when in the face of the current economic crisis Congress thinks this $2.5 trillion restructuring of the health care system happens to be a good idea.

Perhaps one of the biggest warning signs that this bill will saddle taxpayers with more spending and debt is the fact that the budget fail-safe mechanism was dropped from the bill behind closed doors in the Capitol where this bill was written--and I emphasize ``closed doors.'' The Grassley budget fail-safe mechanism was cut from the bill and lots of budget gimmicks were added.

Former Congressional Budget Office Director Douglas Holtz-Eakin wrote in yesterday's Wall Street Journal that this bill is ``fiscally dishonest'' and that it uses ``every budget gimmick and trick in the book ..... leave out inconvenient spending, back-load spending to disguise the true scale, front-load tax revenue, let inflation push up tax revenues, promise spending cuts to doctors and hospitals that have no record of materializing,'' and so on.

This bill is simply irresponsible. It is worse than doing nothing.

Let's talk about some of the excesses in the bill. It increases the size of government by a staggering $2.5 trillion when fully implemented. It imposes $ 1/2 trillion in new fees and taxes. Imposing these new fees and taxes as the economy is struggling to recover is worse than doing nothing. This $ 1/2 trillion in new taxes will hurt small businesses and destroy job creation. It breaks President Obama's campaign promise by increasing taxes on individuals and families making less than $250,000 per year. Adding insult to injury, these fees and taxes will also cause health care premiums to go up beginning next year.

But I don't want you to take my word for it. Both the nonpartisan Committee on Taxation and the Congressional Budget Office have confirmed these taxes and fees will be passed through to the consumers in the form of higher health insurance premiums, and these taxes and fees will start increasing premiums 4 years before most of the reforms in this bill take effect in 2014.

Let's take a look at what happens to Medicare and Medicaid in this bill. Both of these health care entitlement programs are already on perilous financial footing. Both are facing a financial meltdown. This bill adds to that burden.

First of all, the Medicare trust fund started going broke last year. In the year 2008, the Medicare Program began spending more out of the trust fund than was coming in. The Medicare trustees have been warning all of us for years that the trust fund is going broke. They now predict it will go broke right around the corner, about 2017. But rather than work to bridge Medicare's $37 trillion in unfunded liabilities, this bill cuts $ 1/2 trillion from that Medicare Program to fund yet another unsustainable health care entitlement program.

Medicare has a major problem with physician payments that will cost more than $250 billion to fix. But this bill ignores that problem by pretending the problem does not exist. This bill would leave future Congresses virtually no way to restructure Medicare to do the doctors fix.

By diverting Medicare resources elsewhere and ignoring major problems such as that one, this bill does worse than nothing.

Then there is Medicaid. The Medicaid Program serves 59 million low-income children and families. It is our health care safety net and it, too, is on very shaky financial ground. The Government Accountability Office has reported to Congress that States are reaching a financial and budgetary crisis with Medicaid. Like Medicare, Medicaid is essentially going broke. The Government Accountability Office models predict that State spending on Medicaid will grow faster than State revenues for at least the next 10 years.

Here is what the Government Accountability Office has said about this situation:

Since most State and local governments are required to balance their operating budgets, the declining fiscal conditions shown in our simulation suggest that, without intervention, these governments would need to make substantial policy changes to avoid growing fiscal imbalances.

But this bill does not fix this problem either. Here again, this bill makes the problem worse. This bill adds another $374 billion in spending to the Medicaid Program. It adds 15 million people to the rolls of the worst delivery system in health care. It increases State spending by $25 billion, and that happens to be a hidden tax increase because States will be forced to raise taxes to pay for this increased cost--another unfunded mandate. By dropping the equivalent of a 10,000-pound weight through to our frayed Medicaid safety net, this bill does worse than nothing. This bill also compounds these long-term entitlement spending problems by creating yet another new entitlement program called the CLASS Act. This one is a voluntary Federal program for long-term care insurance.

I devoted several years of effort to improving long-term care support, particularly for the disabled and the elderly.

I understand the issues that supporters of the CLASS Act want to address. But the CLASS Act is simply not viable in its current form.

The CLASS Act is almost certain to attract people who are most likely to need it. This is known as adverse selection. That will cause premiums to increase and healthier people to drop out of the program. It is a classic insurance death spiral.

On November 13, the administration's own chief actuary confirmed this. The chief actuary issued a dire warning in a report on the CLASS Act in the House bill, which is virtually identical to the Senate version. Quoting the chief actuary:

There is a significant risk the problem of adverse selection would make the CLASS program unsustainable.

For the first 10 years, the CLASS Act saves money. It saves money at the beginning because it collects premiums before benefits start getting paid out. But some time afterwards, it starts to lose money. We all know what happens from there. It will become the taxpayers' responsibility to rescue the program as it fails. Look at financial struggles of Social Security. Look at Medicare. Look at Medicaid. Now go home and look at your children and grandchildren.

Creating an unsustainable CLASS Act is not a responsible thing to do for our children and grandchildren. By adding the ticking time bomb of yet another unfunded liability to our children and grandchildren through the CLASS Act, this bill, again, does worse than nothing.

Health care is one-sixth of the economy. The American people do not want a bill that makes the economy worse. The nonpartisan Congressional Budget Office, the Committee on Taxation, and even the Office of the Actuary of the U.S. Department of Health and Human Services have told us what the American people already knew: These massive partisan health care reform bills are going to make the problem worse when it comes to the cost of health insurance.

According to a September 22 letter from the Congressional Budget Office to Chairman Baucus about the Finance Committee bill, CBO wrote:

Premiums in new insurance exchanges would tend to be higher than the average premiums in the current law individual market.

So according to CBO, after these bills spend $1 trillion, many of the people struggling to afford their premiums today will actually end up paying more if this bill moves forward and is enacted. By increasing costs when people desperately need Congress to lower costs, this bill does worse than nothing.

It does not have to be this way. When the debate began last year, interested legislators of both parties set forth benchmarks that were no-brainers. Health care reform should lower the cost of premiums. It should make health care more affordable. It should do so without Medicare cuts that jeopardize access to care for seniors. It should do so without overloading the Medicaid safety net until it rips. It should do so without adding to the already unsustainable, unfunded liabilities by creating yet another unsustainable entitlement program. It should have done all those things. That is what we intended to do when we started out.

Instead, this bill threatens the economic recovery. It is $ 1/2 trillion of new taxes hurting small business and destroying job creation. It calls for an even bigger and more unsustainable Federal budget. It adds to that burden with a massive new government-run health plan. It makes health care more unaffordable and lowers quality.

I know some people believe we should get on to the bill and try to fix it by amendment. But this 2,000-page bill has many more problems than can be fixed by amendment on the Senate floor.

If you want to improve it, it should be stopped right now and get back together where we were at one time. Democratic leaders and the White House have put together one extreme health care plan after another. After the bailouts for Wall Street and Detroit, a stimulus bill that led to the highest unemployment in 26 years, and the Fed shoveling money out the door without any accountability, this health care reform bill is the straw that broke the camel's back.

What Senate Republicans are trying to say tonight, with tonight's vote, is we don't support reform just for the sake of reform. Changes to the health care system must be responsible and not break the backs of the taxpayers and the job-creating engine in America, small business.

It doesn't make any sense to make major new unsustainable commitments to entitlement spending. Already, Medicare's solvency is in jeopardy and the Reid bill would make things worse for Medicare. Seniors are in a tough situation today with the way the economy has hit their retirement savings. We have to step back and remember it is not our money, it is their money. It is the taxpayers' money we are talking about--$2 1/2 trillion of taxpayers' dollars over the decade when this bill is fully implemented.

Generations of hard-working Americans will be forced to pay the costly
price for this bill if it moves forward. It is irresponsible for Democratic leaders to use their filibuster-proof majority in the Senate and their control of the House and the White House to push through such massive legislation, reshaping one-sixth of the American economy. The unintended consequences of this legislation could have a destabilizing effect at just the wrong time as America's economy struggles to recover and working families are doing everything in their power just to hold on.

The late Senator Moynihan often warned about the perils of a majority party pushing through major bills and changes in a partisan way. It is a well-founded warning that Democratic leadership has not heeded--this time, at least. If a bill like this one cannot get support more broadly, then something is wrong with it.

Moreover, grassroots America has spoken out against this legislation. It is alarming how those voices have been disregarded by congressional leaders. President Andrew Jackson made it clear that our duty is to tune in to the common sense of the American people who sent us here. I quote President Jackson:

Our Government is founded upon the intelligence of the people. I, for one, do not despair of the republic. I have great confidence in the virtue of the great majority of the people, and I cannot fear the result.

Listen to what President Jackson said. Listen to the concerns of the people. They are telling us to reconsider this massive, complicated legislation and take a path that leads to less spending, less taxes, and less debt. Instead of continuing to mortgage the future of our children and grandchildren, we need to get back to basics. Congress should pass commonsense medical malpractice reform to stop wasting so much money on defensive medicine. Congress should empower consumers to shop around for health care and lower costs with competition just like with other services the consumers buy. Congress should make market reforms that help small businesses and the self-employed have greater access to health insurance at an affordable rate.

These issues can be addressed without upending the entire health care system with the result of higher taxes, higher insurance premiums, and deficits and debts that will get in the way of the opportunity that results from the ingenuity and industry of the American people.

If we were sitting around a coffee shop in Springfield, IL, or Little Rock, AR, and we were discussing health care reform and I told them we are talking about a bill that is going to raise taxes, cut Medicare, raise premiums, and not do anything about costs, they would say that is not health care reform.

I encourage my colleagues to listen to the American people and to send this bill back to the drawing board.

I yield the floor.

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