The Budget Crisis

Floor Speech

The SPEAKER pro tempore (Mr. Hultgren). Under the Speaker's announced policy of January 5, 2011, the gentleman from California (Mr. Garamendi) is recognized for 60 minutes as the designee of the minority leader.

Mr. GARAMENDI. Mr. Speaker, thank you.

I want to turn our attention to the issues that are before us today and see if we can have a better understanding of what has taken place.

We just heard a little bit about honoring our troops. Let's be very clear about this. The Democratic Caucus in this House, the President, and the Senate will always and have always honored our troops. We are in the midst of a very serious budget crisis for this year with very, very serious issues at stake, and the Republicans chose to attach to the funding bill numerous cuts that devastate important programs that affect the well-being of every man, woman, and child in this Nation and, indeed, around the world. Because of those cuts, as well as certain language that was added to the bill, we chose not to vote for the funding.

The President has said, Stop the games. Stop playing around. Give us a straight up and down on funding the government without all of these add-ons and games that are being played by our Republican colleagues.

The President has asked for a clean bill. We should give him a clean bill and carry on to fund the government and provide for our troops and our military families, and we will do that.

Now let's understand what is at stake. Not only in the current year's budget, which is the next 7 months, but in the year beginning on October 12, the Republicans have put together a proposal that would devastate seniors and those who are unable to care for and to provide themselves with medical services--in other words, those dependent upon the Medicaid program.

Very straightforward. The proposal that was put out by the Republican caucus 2 days ago would terminate and stop Medicare as we know it today. Medicare is a program in which every working American pays into it, and when they became 65, they expect to receive the Medicare health care benefits that are guaranteed or at least have been guaranteed for the last 40-some years. That's a uniform benefit package across this Nation. It is a very successful program. It's one that Americans literally live long enough to get into. And yet the Republican caucus is proposing to terminate it, to end the Medicare program. And instead, turn over the $400 billion a year that goes into the Medicare services, turn it over to the private health insurance companies--the biggest gift ever given to the private health insurance companies.

I know those companies. I was the insurance commissioner in California for 8 years. And I spent most every day of those 8 years chasing after the health insurance companies, forcing them to pay claims and stopping them from discriminating against people who had preexisting conditions and developing programs and policies that were underfunded, underpaid, and underperformed.

That cannot happen to our seniors, but that's what the Republicans want to do. And we need to stop it. And we will because the seniors of this Nation already sense what is at hand. They already know that the Republican budget proposed would devastate one of the two pillars of the social safety net that every senior in this Nation at one time or another depends upon.

The second pillar--we've already seen the path that this is going to go on--in 2004, the Republican caucus, together with the Republican President, George W. Bush, proposed to privatize Social Security. Fortunately, the revolt that started in the Democratic caucus of this House and carried across the Nation stopped that from happening.

We know what's coming down the train track here, and that is another effort to privatize Social Security, to take those hundreds of billions of dollars and turn them over to Wall Street so Wall Street can play additional financial games.

It will not happen, Americans will not give up Social Security and Medicare to satisfy the whims of the Republican caucus that seems determined upon destroying effective government in this Nation.

I'd like to call upon my colleague from the great State of Oregon (Mr. DeFazio). If you will join me in this conversation and we will see where it takes us.

Mr. DeFAZIO. I thank the gentleman. Certainly his extraordinary and extensive experience as an insurance commissioner ably qualifies him to comment on what's going to happen when the Republicans kill Medicare and instead force future seniors into private insurance plans presumably sold through some sort of exchange.

Now, of course the Republicans just spent the last year reviling ObamaCare, which creates exchanges for people who are uninsured. They said people who are uninsured should not be forced to go to exchanges and buy good standard policies. Well, now what they want to do is force future seniors to give up Medicare and force them to go to exchanges and buy private policies with some premium support.

Now, there are a few problems with this issue. Among the things they repeal are the reforms of the insurance industry. And one of the most critical reforms, as far as seniors or older workers or older Americans go, or Americans who've ever been ill or ever had an ill kid, is removing the condition that an insurance company can have a preexisting condition exclusion. That is, you were sick once, they won't sell you a policy. Maybe they'll sell you a policy, but they will exclude that condition and other conditions they think you might have, and they're going to charge you 4, 5, 6, 10 times as much for your policy because you're a risky person. They only want the gravy.

It also repeals another little trick of the industry. This has already stopped now. This is one of the most horrific things the insurance industry has done to people in America. Pay your premium every week. Your employer pays your premium every week.

You get sick. This happened to a woman in Texas, actually Joe Barton's district. She had breast cancer. Needed serious treatment. The insurance industry, the insurance company she had, put a team on her case. Isn't that great. They want to help her out. No. They want to find out a way to throw her off the plan. And they found that once she had gone to a dermatologist and didn't tell them about it. And that might have been related to her breast cancer, so they threw her out of the plan.

Now, the dermatologist wrote a letter to the insurance company and said, well, no, actually, no, this woman just kind of had a skin condition that has nothing to do with cancer, and you can't do this. And they did.

And finally, to give them credit, Joe Barton intervened, called the president of the company and said, you're getting one big black eye here. Give this woman back her health insurance. And she got it back. But quite a bit later, her cancer had advanced, and it hurt her chances for a full recovery. That's called recision.

Under the Republican proposal, recisions are back. You get sick? Your company gets to comb through your life and find out a way not to pay your policy. And oh, by the way, if you're sick now and your policy lapses at the end of the year, they won't have to renew it because they're doing away with that reform, too.

So we will take away those horrible reforms that the Democrats put on the anticompetitive insurance industry--and oh, by the way, the insurance industry is exempt from the antitrust law. So the insurance industry can and does and has discriminated in these ways. It can and does fix prices. Can and does share or divide markets to drive up their profits. All of those things are back under the Ryan proposal. Isn't that great?

Now, how is this going to serve seniors? So now, here they are. They're going to get a little premium support--that is, the Federal Government will not let them have the money; they don't even get a voucher so they could just say well, I'm going to go do something on my own. They have to buy one of the health care plans that the Republicans would dictate they can buy--presumably through an exchange--and they'll get a little premium support. The government will give the money directly to the insurance company.

Now, the insurance company can charge them whatever premium they want. So this is problematic.

Now, around here, the Republicans are a little schizophrenic. Some days they love the Congressional Budget Office--when it gives them results they like. And other days they hate the Congressional Budget Office--when it gives them answers they don't like.

So in this case the Congressional Budget Office looked at it and said well, actually, under the Ryan plan, seniors who today pay 25 percent of their health care costs in the aggregate under the Ryan plan of the future, they will pay 68 percent of their health care costs. Guess what that means? That means we are back to 1964.

Now, there's not many people around here old enough to remember '64. I certainly wasn't serving here but I know what happened then. Congress passed, Lyndon Baines Johnson signed, Medicare. Now one of the principal drivers of that was we had a poverty rate for seniors--that is, our parents and grandparents--they were at twice the poverty rate that they are today because of medical costs.

Nobody can save enough money to provide for their medical care. And if you can't buy insurance--which most seniors can't and couldn't--and you get sick, you're bankrupt. You lose everything. And the principal thing that drove seniors into poverty and bankruptcy in those days was medical costs. So Medicare was established.

And now the greatest legacy proposed here by Mr. Ryan, the chair of the Budget Committee, is to end Medicare. And he's doing this under the guise of the path to prosperity. The question is whose prosperity? Not the seniors. Perhaps it's the insurance industry.

Mr. GARAMENDI. Thank you very much, Mr. DeFazio.

I heard you toss out two numbers. One number was the amount of medical, the percentage of the costs of medical care that seniors now pay. Did you say 28 percent?

Mr. DeFAZIO. It's about 25 percent on average of all of their medical costs, the ones for seniors who are eligible for Medicare.

Mr. GARAMENDI. If the Republican proposal goes forward, seniors will wind up paying how much?

Mr. DeFAZIO. Sixty-eight percent of their health care costs.

Mr. GARAMENDI. I see. So we are shifting the costs to the seniors; right?

Mr. DeFAZIO. Right.

If the gentleman would yield.

Mr. GARAMENDI. Of course.

Mr. DeFAZIO. We are not going to do anything about the costs of medical care or the premiums charged or the egregious practices of the insurance industry. We are just going to shift the costs onto future seniors. Many of these people, if they are 55 today, they have been paying into Social Security and Medicare for 35, 37 years, and now, suddenly, oh, sorry, can't have it.

Mr. GARAMENDI. Game's over. You can put that RIP back up.

Mr. DeFAZIO. If I could, just one other point.

Mr. GARAMENDI. Please.

Mr. DeFAZIO. The one other thing, since the Republicans seem to want to roll back the clock, are they are going to bring back the doughnut hole. Now, the doughnut hole is this bizarre construct of the Republican prescription drug benefit. Remember, instead of designing a low-cost prescription drug benefit that was uniform and available to all seniors on Medicare--we could have done that at a very, very low cost--the Republicans said let's subsidize the pharmaceutical and insurance industries and create a confusing mix of plans, and that's what we'll do for seniors. $750 billion over 10 years to subsidize the pharmaceutical and insurance industries and give seniors the doughnut hole.

Now, last year we began to close the doughnut hole, and this year the pharmaceutical industry has to give discounted prices to seniors in the doughnut hole. Mr. Ryan would undo that. No more discounted prices for seniors in the doughnut hole. That's eating into the obscene profits of the pharmaceutical companies. So they've got a little provision in this bill. The doughnut hole is back. Make the world safe for doughnut holes. That's the Ryan path to prosperity.

Mr. GARAMENDI. I don't think so. It seems to me to be the path to poverty for seniors. And it goes way, way beyond that.

Our colleague from Texas, Sheila Jackson Lee, has joined us. Ms. Lee, if you would care to comment. I know this is an issue you are deeply concerned about.

Ms. JACKSON LEE of Texas. Well, since, like Peter, I spent 6 or 7 hours on the floor of the House some years ago, Peter, I guess the 1990s, when we were fighting against the inevitable doughnut hole, we held the vote open--I shouldn't say ``we.'' The Republicans held the vote open for at least 6 or 7 hours. I think we voted at 5 a.m. when the last arm was twisted. I think someone had a broken arm in order to ensure the doughnut hole was in.

We, of course, have come back, Democrats, and created the Affordable Care Act. And I tell you, every senior center I have gone through since the famous passage of the Affordable Care Act, seniors have said, ``Thank you. Thank you.'' If anyone has an 84-year-old mother--I just lost my mother, but our conversations centered around the enormous cost of prescription drugs and how relieved she was to, at that time, to have had some relief from the doughnut hole.

Now, as we watched our friends just a few, maybe about an hour or so ago, I hope there was some camera view of the glee that was shown when there was a suggestion that we would shut the government down and, in essence, implode, if I can use that on the floor of the House, any budgeting conversation that makes sense, such as the fact that what we are doing now with the CR is dated and old, it is passe, it is cutting into funding for a present year. What it's doing tomorrow, which is what the groundwork is being laid, is literally destroying the systems as we know it. Sixty-six percent of the seniors don't like this plan.

But I want to throw something out. Let me let them understand what the plan is. The plan is block grants, block grants given to disparate State governments, of which we have no control over, to be able to manipulate and play with Medicare. What sense does that make? Block grants that will in fact be able to be used for whatever we want to use.

The State of Texas, for example, received $3.2 billion in education funds through the American Reinvestment and Recovery Act. Where is it my good friend? It is in the rainy day fund, never used for schools. Can you imagine block grants for Medicare? Can you imagine the nursing homes that will be closed through Medicaid, and then, of course, seniors getting Medicare? And then they shout for joy not only for shutting down the government over the next 2 days, but they shout for joy for the kind of budget that they believe they will be able to--they whet their appetite that they will be able to do for 2012. They will implode this country as we know it.

We want budget cuts. We don't want to see the government shut down. But there is a morality and a character and an integrity, and there is called a heart. And I like what you are saying there. The Republican budget would destroy Medicare. And I just want to say this. We have been around this block before. I heard one Republican leadership say some years ago, ``Over my cold dead body.'' The opposition to my President, who was a great hero of Texas, Lyndon Baines Johnson, even when he tried Medicare, there were those who said how it would destroy America, how it was going to undermine America. And look where we are today. How many lives have we saved because seniors had Medicare?

I see that there is this effort to bury this program that has kept the grandmothers and granddads of America's children alive for them to be able to see their grandchildren grow up because they have had good health care. Where is the morality?

Mr. GARAMENDI. Well, we seriously question the morality of the proposal that's being put forward by the Republican caucus.

You said something that I want to focus in on. The details are important. We talked about Medicare and the end of Medicare as we know it. And basically, as Mr. DeFazio was saying, it's a program in which Medicare becomes privatized. The money is turned over to the insurance companies; our future, our seniors' future turned over to the insurance companies and their whims.

But you also raised a very, very important point. And that is all across this Nation there are millions of Americans who are in nursing homes who now depend upon the Medicaid program, Medicaid program for the payment to the nursing homes. In the budget program, there is the block granting of the Medicaid program, and therefore the likelihood that the payments to the nursing homes will be reduced or end and those people will not be able to get care in the nursing home.

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