Departments Of Transportation And Housing And Urban Development, And Related Agencies Appropriations Act, 2010 - Conference Report

Floor Speech

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Mr. GRASSLEY. There has been a lot of talk over the past few days about Senator Reid's so-called compromise. Although he said he has broad agreement, I have yet to see any specific details. In fact, it sounds as though Members of his very own caucus, the Democratic caucus, aren't aware of these details either.

I find it quite hard to understand how there can be ``broad agreement'' on something when they don't know what is in it. Of course, I hope we will see details very soon. An issue such as health care reform affecting 306 million Americans and restructuring one-sixth of our economy is something that should not be done in secret. And when the so-called compromises come out, I would expect we would have the same 72 hours on the Internet for the public and the 99 Members of this body other than the leader to review them in the totally transparent way we have always been promised, and as this 2,074-page bill has been transparent, as well as all of the amendments. Because this is one of the biggest and most important pieces of legislation I have worked on in all of my years in the Congress. So I hope Senator Reid is not planning to keep the details of his compromise under wraps and then ask us to vote on it. This piece of legislation is going to touch the lives of every single American, from the cradle to the grave, so we owe it to our constituents to make sure we have sufficient time to study any changes to the underlying bill. We all need to remember that it is their money, the taxpayers' money, that is being spent on this bill, not ours.

As I have said, so far, Senator Reid is keeping this ``broad agreement'' under wraps. So today I can only talk about what I have heard from my colleagues or read in the newspaper, and who knows whether what the newspaper or our colleagues are surmising what this compromise might be actually is.

I have heard the majority leader is planning to expand the already unsustainable Medicare Program. The idea has been met with, of course, strong opposition, as we would expect from hospitals, doctors, and other health care providers, particularly from rural America, because expanding Medicare to people ages 55 to 64 and paying Medicare rates is going to make it even more difficult for our hospitals to survive because the Federal Government only reimburses 80 percent of costs.

Today, with people over 65, with the government not paying more than 80 percent, it can be offset by private sector charges by the hospitals to a greater amount to make it up. But if you load another tens of millions of people on Medicare--and it is just about broke anyway--you can see that this deficit of our hospitals is going to be greater and it is going to be even more difficult to make up because there will be fewer private-paying people to make up the deficit.

I said the hospital, doctors, and health care providers are bringing strong opposition to this idea of expanding the Medicare Program because they fear that the largest expansion of Medicaid in history and an expansion of Medicare to people age 55 to 64 will drive providers out of business. And then what, of course, does that do for our seniors? It makes it even harder for low-income Americans under Medicaid and seniors under Medicare to have access to care. What are the promises of the Federal Government in Medicare worth if you don't have doctors to provide the services to the seniors when they get sick?

I have already spoken over the last few days about why I agree with these providers and why I oppose that part of Senator Reid's so-called compromise. Of course, now we have the administration's own Chief Actuary confirming that the Medicare cuts already in this bill--in other words, the 2,074-page bill, without even considering the so-called Reid compromise, which we don't know what it is--the Chief Actuary confirmed that the Medicare cuts already in the bill are so severe that providers might, even now, end their participation in the program, even before you add on all the people who are 55 to 64. If the compromise expands Medicare even further, then this is going to make this problem even worse.

I also find it curious that some would even consider this a compromise. For instance, Speaker Pelosi could not convince House Democrats to support a government-run plan paying Medicare rates, but that is exactly what Senator Reid's compromise is proposing, I have been told. That doesn't sound like much of a compromise to me.

In fact, let me quote another Congressman, Anthony Weiner of New York, who doesn't see it as a compromise either. In fact, he sees it as a big step toward their ultimate goal of a single-payer health plan where government is going to run everything. And you will have one choice: the government plan. You won't have choices the way we have in America today.

Congressman Weiner said this:

This exchange would perhaps get us on the path to a single-payer model.

I don't see this as a compromise to a government-run plan. In fact, in some ways, it is worse because this could harm seniors' access to care starting not down the road but on day one.

I don't want to spend too much time today talking about Medicare expansion. I think I have made my feelings on this idea pretty clear. Instead, I would like to focus on another aspect of the supposed new Reid compromise we are hearing about.

This is what we are hearing about--that the newest Reid proposal would have the Office of Personnel Management operate a national health insurance plan. This may sound pretty harmless at first glance, especially since Senator Reid has refused to release any details, but there are some very big problems with a proposal like having the Office of Personnel Management take over.

Around here, we use the term ``OPM'' for the Office of Personnel Management. It is the office in charge of the Federal Government's 2 million-person workforce. One could consider OPM as the human resource agency or department for all of the Federal Government, dealing with everything from salaries to the operation of the Federal Employees Health Benefits Program, which I think is the reason Senator Reid thinks this agency would be well equipped to run the largest insurance company in the country.

Unfortunately, a former Director of OPM disagrees. He was asked about giving new responsibilities to the Office of Personnel Management. This former Director, Linda Springer, said this:

I flatout think that OPM doesn't have the capacity to do this type of role.

Federal employees have also expressed concern. People in this body--particularly the other party--ought to be listening to the National Treasury Employees Union or the National Active and Retired Federal Employees Association. They have come out in opposition to this proposal of OPM running a national health insurance company.

In a Washington Post story highlighting union opposition, the author writes that unions raise these concerns:

..... legitimate concerns about expanding the size and scope of OPM beyond its capacity.

So there are already concerns from a former Director and more than 5 million Federal workers and retirees and dependents that OPM is not equipped to handle this new responsibility. That alone should make any Member pause before signing on to this so-called broad agreement.

I also think it is important that Members are aware of some of the challenges the Office of Personnel Management faces with its current responsibility, without loading it down with a lot more, because being the human resources department for the Federal Government is, obviously, no easy task. In fact, I would imagine it is a pretty thankless job that entails a lot of long hours.

Please don't misconstrue my comments as an attack on OPM, its Director, or any of its employees. They do the best job they can under difficult circumstances. But they are going to have real problems if Senator Reid's compromise does include a government-run insurance plan operated by OPM. If he is going to come out of nowhere with a new proposal to hastily hand the American health insurance system over to this government agency, I think it is important for the American people to know what they are getting into.

We need to be asking some hard questions. Is this expansion of the Federal Government necessary? We are about to vote to raise the debt ceiling by $1.8 trillion because the national credit card has maxed out. Some Members of the Senate seem intent upon increasing the size of the Federal Government even more.

There is a second question beyond the generic one of, can you afford to expand the Federal Government role and expenditures. It is, should the OPM, a government agency, be handed the key to the largest health insurance plan in the entire country? I don't know that the current OPM Director--and I would imagine he is a very nice person, and since I don't know him, I don't want him to take offense to what I say. But I think it is fair to point out that his position, just prior to taking over at OPM, was running the National Zoo. Does this really mean we should put him in charge of the national health insurance plan?

The Office of Personnel Management has been consistently criticized for being out of date and being inefficient on everything from processing national security projects to administering Federal benefits. We have all heard about the massive backlog in people waiting for Social Security disability benefits. Some 833,000 Americans are currently on a waiting list to see if they qualify for government disability benefits, and some Members blame OPM for this backlog.

I am going to put a chart up here from a person whom I trust in the House of Representatives, Representative Earl Pomeroy. I think he does very excellent work. He heard about this backlog. He made some comments about OPM. Congressman Pomeroy is a Democrat from North Dakota and a member of the very powerful House Ways and Means Committee. He said:

The Office of Personnel Management is fiddling around, years go by before they can even get around to all the things they have to get around to. .....

This seems to reinforce what the government unions and the former Director have expressed about OPM's ability to handle this new responsibility.

I want to continue to quote Congressman Pomeroy:

People are being hurt, some of the most vulnerable people in this country are being hurt every day because of bureaucratic bungling at OPM. .....

Senator Reid hasn't provided enough details, but Congressman Pomeroy's comments certainly raise concerns.

Undermining the availability of disability benefits is bad enough, but do my colleagues want to also be responsible for setting up an unworkable system that leaves hundreds of thousands of Americans on the waiting list for their health care benefits?

Government agencies, whether it is the Office of Personnel Management or some other agency, do not have an impeccable track record. As President Reagan often said, the nine most terrifying words in the English language are ``I'm from the government and I'm here to help.'' Think of a health care system with the responsiveness of Hurricane Katrina or think of the efficiency of the Internal Revenue Service or the customer service at the department of motor vehicles. That doesn't sound like a recipe for real health reform to me.

The OPM has also taken considerable criticism for its handling of retiree benefits. The agency's own 2008 financial report stated:

[The Office of Personnel Management] had increased difficulty keeping up with retirement claims and had a decrease in the number of customers satisfied with their services.

That is coming directly from the agency, saying how it is coming up short responding to the needs of the American people, and particularly government employees, and that is before we are talking about adding a new government health insurance program to the responsibilities of OPM.

The Hill newspaper wrote this last week:

Watchdogs maintain the program is riddled with inefficiencies that ultimately cost both the agency and the Federal Government money.

So I think there are legitimate concerns about whether this Federal agency is even equipped to take on the additional responsibilities of a whole new government countrywide program that is obviously a massive undertaking.

I also wonder why this proposal is even necessary. The bill already sets up government-run exchanges that would offer a choice of competing for-profit or not-for-profit plans. My colleagues on the other side of the aisle have compared this system to the Federal Employees Health Benefits Program. This bill already has provisions that encourage national health plans. This leads me to ask the question: Why does this bill need another layer of bureaucracy to create a national plan run by a government agency?

Some have suggested this is just another backdoor attempt to end up with a government-run plan. Another detail that has been reported supports this claim. We have been told that if not enough not-for-profit plans agree to contract with the Office of Personnel Management or if they do not meet certain affordability standards, the Office of Personnel Management will have the authority to establish its own government-run plan.

With some of the other provisions that are in this bill, this trigger approach seems to be rigged. There are at least two reasons why this is the case. First, the bill undermines any ability to avoid the first government plan trigger to make health coverage more affordable. The bill puts in place a bunch of new regulatory reforms, a bunch of fees, and a lot of taxes that will drive up premiums, making it impossible for health plans to meet new affordability requirements.

Again, you are going to say you question this Senator's judgment saying that. Do not take my word for it. The nonpartisan Congressional Budget Office, a group of professionals who do not care about politics, predicts premiums will be 10 to 13 percent more expensive as a result of this bill.

Then, of course, we have the second government plan trigger which gives the Office of Personnel Management the authority to create a government-run plan if not enough not-for-profit national plans contract with OPM.

Senator Reid failed to mention in announcing his broad agreement that there is not one national plan in existence today, for-profit or not-for-profit--not one national plan--that is offered in all 50 States. It does not exist.

Once again, it sounds to me like this so-called trigger is being rigged to shoot. I can only assume this backdoor attempt to shoehorn in a government-run plan at the last minute happens to be an act of desperation. Senator Reid and his colleagues have seen the facts. You have heard them from our distinguished Republican leader. According to a CNN poll from December 2 and 3, 61 percent of Americans oppose this 2,074-page bill. At a time when the Democratic leadership is pushing a $1.8 trillion increase in the debt limit, we learn from the White House's own Actuary that this $2.5 trillion bill, this 2,074-page bill bends the cost curve up by increasing health care spending. If you go back to day one of this year, when we first started talking about health care reform, one of the overriding goals was to bend that cost curve down. After 11 months of activity, we have a bill with that cost curve going up--not one of the major goals we set out to do 11 months ago.

This bill is also under pressure from opposition by the National Federation of Independent Business, speaking for the small businesses of America, the ones that do 70 percent of the net hiring. It is also opposed by the National Association of Manufacturers, the Chamber of Commerce, the National Retail Federation, and almost every other business group across the country.

Because of this last-minute, desperate attempt to appease the far left, this rumored new compromise now is being opposed by hospitals, doctors, and other health care providers. These people were on board through most of these 11 months promising their support, and now they see it going in the wrong direction.

With all those factors, I do not see how anyone, let alone 60 Senators, can vote for this bill, this last-minute, desperate attempt to expand Medicare and hand over private health insurance systems over to a Federal agency, the Office of Personnel Management. This step, if it materializes, has made a bad bill even worse.

I have another part of the bill to which I wish to speak. We have this 2,074-page bill before us, and I wish to refer to just a few words on page 2,034, way at the tail end of the bill, in section 9012 of the Reid bill. It only takes up eight lines, but it could have a major impact on millions of retirees and even on the entire U.S. economy.

Listen to this. The AFL-CIO, the Americans Benefits Council, and the Business Roundtable have all joined in opposition to this provision, section 9012. How often do we have the AFL-CIO, the American Benefits Council, and the Business Roundtable--that roundtable is the big corporations in America--joining in opposition to anything? But they are in opposition to section 9012 of the bill.

This would prohibit businesses from fully deducting a subsidy they receive to maintain retiree drug coverage. The Medicare Modernization Act of 2003 created this subsidy to encourage businesses to keep offering retiree drug coverage once the Part D benefit was established because back in 2003, our goal in passing the prescription drug bill for seniors was not to disturb people who already had drug coverage and they liked what they had and they wanted to keep it. We did not want these big corporations dumping these people off into something with which they were unfamiliar. So we helped to encourage companies and save the taxpayers money. I will refer to those specific dollar figures in a minute.

In Federal tax policy, it is very unusual to provide a deduction for a business expense, such as retiree health costs, if that expense is subsidized by a Federal program. But in this case, the conferees decided to provide this unusual tax treatment for compelling health policy purposes, some to which I have already referred.

If people are satisfied with what they have, we should not pass a bill pushing people out of a plan they like. But it was also to save taxpayers' dollars because the rationale was, it was cheaper to pay a $600 subsidy than to have these people forced out of their corporate plan and then to have the taxpayers pay an average of $1,100 that it will cost if the retiree joined the Part D government plan.

You know what. After 6 years, so far it has worked. Millions of seniors have been able to keep their retiree coverage as a result of this subsidy, and the Part D Program continues to come in under budget and also to receive high marks from our senior citizens.

But the provision tucked away in this 2,074-page bill on page 2034 could change all that and, in fact, have severe consequences and, let me say, unintended consequences not just on those retirees but for the entire U.S. economy.

In an effort to pay for this massive expansion of a government-run health plan, the Reid bill proposes to eliminate the tax deductibility of this provision. This could cause employers all across the country to drop retiree coverage. This will not only break the President's promise by preventing millions of seniors from keeping what they have--remember that promise during the campaign--it will also cause the costs of the Part D Program to go up.

In addition, accounting rules for retiree benefits require that the businesses that do keep offering plans, offering these benefits, will have to report the total revised cost on the day the bill becomes law.

We have an op-ed written in the Wall Street Journal about this point. This could cause businesses to post billions of dollars in losses and significantly impact an already struggling economy.

Is this something we want to do when we still have

10-percent unemployment? I think the majority ought to give second thought to that.

A letter sent on December 11 from the chief financial officers of some of the largest employers in the country stated:

The impact of the proposed Medicare Part D changes would be felt throughout the overall U.S. economy as corporate entities and investors would be forced to react.

Another letter signed by the AFL-CIO stated this provision would ``unnecessarily destabilize employer-sponsored benefits for millions of retirees.''

Once again, how often do we get these large corporations and the AFL-CIO singing off the same song sheet?

This simple provision tucked away on page 2034 is just one more in a long list of policies that could have serious unintended consequences for American businesses and retirees.

At this point, it appears the majority is so determined to get a bill at any cost that they will put in place bad policies and promises to somehow clean up the mess later on. That is not the way to write legislation. That is not what the American people were hoping for when they were told Congress was going to fix the health care system. This provision is just one more reason we need to scrap this product and go back to the drawing board.

In finishing, I will say what I have probably said two or three times before. We are trying to fix the health care system, health care reform. The word ``reform'' implies all of that. If you were having a coffee klatch in rural New York or rural Iowa this very morning and one of us Senators dropped in on it and they started asking us about a bill because they were already talking about health care reform and any one of us told them it would increase taxes, it would increase health insurance premiums, that it would not do anything about decreasing inflation of health care--in other words, costs are going to go up yet--and we are going to take $464 billion out of Medicare, a program that is already in distress, to set up a whole new government program, you know what. Every one of those people around the table would say: That doesn't sound like health care reform to me. Let's not denigrate the word ``reform.''

I ask unanimous consent to have printed in the Record a letter from the AFL-CIO.

There being no objection, the material was ordered to be printed in the RECORD

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