Health Care Reform

Floor Speech

BREAK IN TRANSCRIPT

Mr. GRASSLEY. Mr. President, the Senator from Illinois is still on the Senate floor. Last week, I pointed out the plans that Republicans have introduced right here. The only way the Senator from Illinois can have an out is he was cute--he was cute--in modifying it, that it has not been scored by the Congressional Budget Office. But here is the fact on what the Congressional Budget Office can do and not do.

They were busy since May with the Senate health bill, getting it scored. They were busy working with us in the Group of 6 to try to get a bipartisan bill scored. Since October 2 until now, they have been working with the Senate leader full time to score everything they have had a chance to put out.

So I do not want anybody listening around the country to think Republicans do not have alternatives to what is being offered. But the only thing he can say is: They do not have a plan that has been scored. But we have plans, and if they went to hire more help in the Congressional Budget Office, we will get them scored.

Mr. President, I rise for the sake of the 50 States in the United States today because in this 2,074-page bill is a massive budget burden for every 1 of the 50 States--or maybe I better say for almost all of the 50 States--because of the expansion of Medicaid. I am talking about Medicaid, a Federal-State program. I am not talking about Medicare, a totally Federal program.

If this bill becomes law, the Congressional Budget Office estimates by the year 2019, 54 million nonelderly, nondisabled Americans will be locked into Medicaid. Now, there is a very important word I want to emphasize--``locked''--because with these additional people in Medicaid, they will not have any choice. Medicaid is the only place to get their health care, where a lot of other people will have choices under what we call the exchange.

So let me say it another way. I say they are locked in because this bill does not allow Americans with incomes below 133 percent of the Federal poverty level to get tax credits like most other Americans who are not below 133 percent of the Federal poverty level in a subsidy that comes through the exchange.

Mr. President, 54 million Americans will be locked into a program--and this is where we get back to the States--that the 50 States cannot afford. We are not being honest with ourselves or our constituents or the people who will depend on the safety net if we try to argue that States can fund their share of this massive expansion.

Medicaid, as I said, is a Federal-State partnership, probably about 43 years old. The Federal Government pays for, on average, 57 percent of the cost of Medicaid. So, on average, States pay about 43 percent of the program, and the States administer the program.

In my State of Iowa, that division would be about 68 percent coming from the Federal Government, 32 percent the taxpayers of Iowa pay for.

To describe Medicaid's financial situation as fragile would be an understatement. Earlier this year, Congress voted to provide States an additional $87 billion to prevent States from drastically cutting back their program. That is $87 billion out of the $787 billion stimulus bill.

When we were considering that bill, the Government

Accountability Office made it clear to us that States were in crisis. Every day you read about States being in crisis--budget crisis. The Government Accountability Office models predicted that State spending will grow faster than State revenues for at least the next 10 years. So here is the warning the Government Accountability Office has provided to those of us in Congress:

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

The State fiscal situation has not improved in the months since the Government Accountability Office report.

Now, let's go to the National Governors Association. They published a report recently entitled, ``The State Fiscal Situation; The Lost Decade.'' In this report, the Nation's Governors portray a bleak picture of State finances. Their report highlights the situation with State revenues and the economic situation. Their report notes:

The recent economic downturn started in December 2007 and likely ended in August or September 2009, making it one of the deepest and longest since the Great Depression.

State revenues are not likely to rebound until the years 2014 or 2015. States will continue to have to finance retiree pensions, as they wait for this rebound. The National Governors Association's conclusion is, obviously, a somber one. Their report goes on to say:

The bottom line is that states will continue to struggle over the next decade because of the combination of the length and depth of this economic downturn and the projected slow recovery. Even after states begin to see the light, they will face the ``over-hang'' of unmet needs accumulated during the downturn.

Meaning the recent recession.

The report continues:

The fact is that the biggest impact on states is the one to two years after the recession is over. With states having entered the recession in 2008, revenue shortfalls persisting into 2014 and a need to backfill deferred investments into core state functions, it will take states nearly a decade to fully emerge from the current recession.

Here we have the National Association of State Budget Officers, from a December 2009 fiscal report about the terrible position States are in right now, even without loading them down with the additional burden that is going to come through Medicaid expansion in this 2,074-page bill. Quoting from the National Association of State Budget Officers:

States are currently facing one of the worst, if not the worst, fiscal periods since the Great Depression.

You see that quote behind me, as shown on that chart.

Under current conditions, States will face significant challenges if they are to meet their current Medicaid obligations--emphasis upon ``current''--without the addition of these millions of people being put on Medicaid because of the expansion in this 2,074-page bill.

States are also going to have to make substantial policy changes to meet their budget obligations just currently the way the situation is.

Will States cut their Medicaid Programs to cut costs? Right now, as a condition of the $87 billion in stimulus funds, States cannot cut because that is a requirement of the stimulus package. Under this bill, they will not be able to touch their Medicaid Programs until 2014, the year they are forced, then, to massively expand their programs.

So what will States do to make their budgets work? Will they cut roads and bridges? Will they cut education? Will they cut back on law enforcement and prisons? Will the States raise taxes?

I cannot say what 50 different States will do for certain. But States are going to have to make significant changes. Right now, in my State of Iowa, my Democratic Governor, Chet Culver, is trying the best he can to work out of a $565 million hole of which he has spending cuts in State government that is intended to address the shortfall in the current budget year. A shortfall of more than $1 billion is forecast in my State for the budget year that begins July 1 of next year. That is a major problem for our State legislators meeting in January.

This isn't just Iowa. Forty-three States have been forced to cut spending in 2009. It is not just about the raw numbers, it is about the people served by the program.

A few days ago I had a group of constituents in my office asking for support for a children's mental health program. They told heart-wrenching stories about the challenges they face as parents in providing care for their children. Their children bravely recounted the struggles they have faced and are overcoming as they battle mental illness.

They benefit from a combined Federal-State program to provide them critical support services that aren't covered in Medicaid. The State dollars that go into that program are going to be severely jeopardized when this bill takes effect and the States are going to have to assume a larger share because of our forcing them to expand Medicare coverage.

It is going to hurt these children I referred to. Right now, Iowa is looking at the possibility of closing two State mental health facilities. In fact, the Des Moines Register recently editorialized that out of four, we only ought to keep one open.

On December 4, Iowa State courts were closed as workers there were furloughed without pay in an effort to close the budget gap. States are struggling to keep up essential services. Senators here will add a giant new unfunded mandate to States and hide behind the rhetoric of State responsibility.

It is very disappointing to have people who claim to be champions of the poor and the needy turn a blind eye to the obvious impact of their actions in this bill on State budgets and on the people served by those States. Yet, in the face of the evidence, the Democrats are proposing a bill that forces States to expand their Medicaid Programs.

This bill proposes that every State cover every American up to 133 percent of poverty. This is a massive expansion of the welfare state. It is the largest expansion of Medicaid in the 43-year history of the program. It will add another 15 million people to the Medicaid rolls. It will increase Federal Medicaid spending by $374 billion. It also will increase State spending by $25 billion.

Which States will be affected? Every State here that is colored in red on this chart will be affected by this mandate. States are in their most dire fiscal situation since the Great Depression and the Democrats want to slap all of these States in red with a huge unfunded mandate.

The majority obviously believes Medicaid expansion is the right way to increase coverage. The majority is willfully ignoring facts. States already can't afford the programs, and this bill requires States to expand their programs and make them pay more for the privilege of doing so.

That is not the only cost being shifted to the States. The insurer tax in this bill hits Medicaid managed care plans. Those managed care plans run on an extremely narrow margin. The tax on them is simply going to be passed on to the States. The decision made in the back rooms of the majority leader's office to keep all of the additional Medicaid drug rebate dollars for the Federal Government will hurt States.

I know some people will try to argue that you can't take something from the States they never had, but for years States have been negotiating supplemental rebates with drug companies. Those will most certainly go away. As more and more people get added to the fraying safety net, that safety net will not be able to hold up. That safety net is going to fall apart. This is a bill that will crash the safety net. If this bill is signed into law, it is only a matter of time before Congress is forced to come back and restructure the policies in this bill and spend tens of billions of dollars more to keep the safety net from failing completely.

Providing extra dollars to the States is going to become an annual rite in the Congress. It will very quickly become the so-called doctors fix or the SGR problem of Medicaid. The Governors know this as well. I wish to quote some.

I will start with Nevada Governor Jim Gibbons:

Under the Reid plan, a mandatory expansion of the Nevada Medicaid program would add more than 41,000 people to the program's rolls in 2014, expanding Nevada's Medicaid enrollment by nearly 60 percent by 2019. Overall, the Reid plan will cost Nevada taxpayers more than $613 million in State General Fund dollars between 2014 and 2019. In addition to imposing this massive tax burden, the bill also removes existing state options, essentially federalizing this program.

Then a quote from North Dakota's Governor John Hoeven:

We, along with the National Governors Association, urge extreme caution in moving forward with any plan that would commit the states, without their express participation and consent, to obligations that may financially bind them for decades into the future.

I will close with two of my favorite Governor quotes, and both of these are Democrats. The governor of Tennessee says this:

There won't be new prisons built during that period. There won't be much in the way of capital improvements in the state during that period. So it's very scary for governors to be saying as soon as the revenues get back there, the federal government is going to come in and say here's how you're going to spend your new money.

Governor Brian Schweitzer of Montana, describing Medicaid, says:

One of the least effective programs in terms of health care in the history of this country is something called Medicaid. About 20 percent of America is on a Medicaid program and they would like to shift it and grow it to somewhere around 25 or 30 percent.

A quote from Governor Schweitzer goes on:

Now Medicaid is a system that isn't working, almost everyone agrees. But what Congress intends to do is increase the number [of people] on Medicaid so they could do it on the cheap. It is not working for anybody.

The Democrats in Congress are committing well more than $1 trillion of taxpayer dollars to health care reform. It is not our money, it is the taxpayers' money. It is our responsibility to make sure it is spent wisely. In Medicaid, with a massive expansion and a de facto tax increase on the States, this is clearly not the case. In other words, the money is not spent wisely.

Mr. President, how much time do I have?

The PRESIDING OFFICER. The Senator has 1 1/2 minutes remaining.

Mr. GRASSLEY. In a minute and a half, I would simply bring to the attention of all of the Members of the Senate the fact that between now and December 30 of this year, besides working on this health care bill, we have these things that have to be done:

The debt ceiling has to be increased.

We have to pass the Defense appropriations bill.

We have to decide what is going to happen with the death tax. The estate tax is going to end at the end of this year. Next year, there is not going to be any estate tax. I don't think anybody wants that situation to happen because it is only going to happen for 1 year, so we need to do something on estate tax.

The highway bill needs to be reauthorized or extended.

The PATRIOT Act has to be extended because at least three parts of it expire, and if they are not reinstituted, a lot of the work of the FBI tracking terrorists is going to be impossible.

We have several tax provisions--73, to be exact--that are extended from time to time. They need to be extended.

Doctors are going to take a 23-percent cut in their reimbursement under Medicare if we don't do something about it.

The Federal Aviation Administration needs to be reauthorized, and maybe the Satellite Home Viewers Act needs to be reauthorized, all between now and the end of the year.

The PRESIDING OFFICER. The Senator's time has expired.

Mr. GRASSLEY. This bill doesn't take effect until 2014, so we ought to be getting off of this health care bill and get some of these things done that need to be done before the end of the year.

I yield the floor.

BREAK IN TRANSCRIPT

Mr. GRASSLEY. Mr. President, we keep hearing about all the tax cuts that are in this 2,074-page bill. Earlier today, I heard the distinguished senior Senator from Illinois say this, after Senator Kyl was done speaking, and I am reading from the transcript.

First, this bill has $441 billion in tax cuts in the first 10 years for average people trying to pay their health insurance premiums. I don't know if the Senator from Arizona--

There he means Senator Kyl--

thinks that is a good idea or not. He has never spoken to that at least that I have heard. I think it is a good idea. If you are making less than $80,000 a year, I want to make sure you have insurance, and this bill wants to make sure we give you a helping hand. It is a tax cut.

First of all, when you have a tax credit or subsidy for buying insurance, the Joint Committee on Taxation describes 73 percent of that as outlays, 27 percent as tax reductions. So to call $441 billion a tax cut is completely contrary to the way scorekeepers for the Congress keep track of things.

The second thing I noticed, in talking about helping people earning $80,000 a year or so--and I heard another Senator speak frankly about tax increases for people at $75,000--is that there seems to be an effort to define down what the middle class is, from the way the President of the United States described it during his campaign--individuals under $200,000 and families under $250,000 being the middle class.

Well, I wish to go into some detail about this because I have had an opportunity to speak on this point and I think other Members have as well and somehow we don't seem to get through to our friends on the other side of the aisle who have consistently stated that the Reid bill, according to the Joint Committee on Taxation, is a net tax cut--and emphasis upon the word ``net.''

Yesterday, this chart was used to illustrate this point--a chart the other side was using to illustrate that point. This chart I am referring to has multiple bars with dollar figures. For example, in 2019 we see here a figure of $40.8 billion net tax cut. My Democratic friends said this number came from the Joint Committee on Taxation. Unfortunately, the chart my friends were using at that time is not entirely clear on how they came up with this net tax cut, so that is what I want to bring to the attention of my colleagues. It was quite natural for most to wonder how that number came about, so they said: Show me the data.

To clear up any confusion, here is the Joint Committee on Taxation table the Democrats relied on to claim that the Reid bill results in a net tax cut. Do you see here this negative figure of $40,786 million? Of course, negative, that minus mark there. My friends on the other side, unfortunately, do not explain what is going on. Instead, it appears the other side simply made an assertion that they hope many of us, and those in the media, would believe. I am not going to let my friends on the other side of the aisle get away with this because the entire story is not being told. So let me take a moment to explain.

First, in simplest terms, where you see the negative number on this chart, the Joint Committee on Taxation is telling us there is some type of tax benefit going to the taxpayers. For example, families making between $50,000 and $75,000 you can see have a negative $10,489 number in their column. This means the Joint Committee on Taxation is telling us that this income category is receiving $10.4 billion in tax benefits. But I need to have you listen more closely because when we see a negative number on this chart, the Joint Committee tells us there is a tax benefit. So, conversely, where we see positive numbers, in these areas here, where you see positive numbers, the Joint Committee on Taxation is telling us these taxpayers are seeing a tax increase.

I have actually enlarged those numbers of tax returns and the dollar amounts where there is a positive number for individuals and families--once again, right in here. These positive numbers indicate a tax increase.

My friends have said that all tax returns on this chart are receiving a net tax cut. If this were so, why are there not negative numbers next to all the dollars on this chart? Because not everyone on this chart is receiving a tax cut, despite what has been said, including just within the last hour. Quite to the contrary, a number of taxpayers are clearly seeing a tax increase. This group of taxpayers is middle-income taxpayers.

I didn't come down to the floor to say my friends on the other side are wrong. After all, you can see the negative numbers quite frequently on the chart. After all, you see this negative number, $40,800 million. What I am doing is clarifying that my friends on the other side cannot spread this $40.8 billion tax cut across all of the affected taxpayers on this chart and then say all have received a tax cut. Why? Because this chart produced by the Joint Committee on Taxation shows that taxes go up for individuals making more than $50,000 and families making more than $75,000. It is right here on these yellow figures. Numbers do not lie.

Of course, people who inhabit the Joint Committee on Taxation are professional people who do not have a political agenda, and they tell it like it is. That is what they are hired for. That is why there are the same people around whether you have a Democratic or Republican majority in the Congress.

I would like to give you my read on what the Joint Committee on Taxation is saying here with these figures.

First, there is a group of low- and middle-income taxpayers who clearly benefit under the government subsidy for health insurance. This group, however, is relatively small.

There is another, much larger group of middle-income taxpayers who are seeing their taxes go up for one or a combination of the following tax increases: the high-cost plan tax, the medical expense deduction limitation, and the Medicare payroll tax increase. In general, this group is not benefiting from the government subsidy. After all, how can taxpayers see a tax cut if they are not even eligible for a subsidy?

Also, there is an additional group of taxpayers who would be affected by other tax increase provisions in the Reid bill that the Joint Committee on Taxation could not distribute as other things in the bill are distributed on this chart. These undistributed tax increases include things such as putting a cap on the flexible savings accounts. There has never been a cap. So when you cap it at $2,500 and people cannot put in more than $2,500 under this 2074-page bill, that is a tax increase for those people who had higher expenses and wanted to put that money in a flexible savings account.

Then also there is a tax that is not accounted for here on cosmetic surgery. My friend from Idaho, Senator Crapo, whose amendment is pending before the Senate, recently received a letter from the Joint Committee on Taxation stating that this additional group exists and many in this group make less than $250,000 a year.

My friends on the other side of the aisle cannot, No. 1, say that all taxpayers receive a tax cut and, No. 2, say that middle-income Americans will not see a tax increase under the Reid bill as promised by the President in the last campaign.

I yield the floor.

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