Congressional Budget for the United States Government for the Fiscal Year 2006

CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR THE FISCAL YEAR 2006

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Mr. WYDEN. Mr. President, I thank the distinguished Senator from North Dakota.

I come to the floor this afternoon to talk about the way this budget deals with the fastest rising costs in America, and those are our medical bills. I am going to talk about two areas--Medicaid, and the question of prescription drug coverage under Medicare.

I want to start by saying that regrettably in this budget, health care is done wrong. It is set up in a way that we are going to regret, and we are going to regret greatly. I want to take a few minutes to talk about why this budget gets it wrong on the health care issue. Health care is so important because of the demographic changes with which we are faced.

First, with respect to the Medicaid program, the way I would describe this Medicaid budget is hurt the poor now, talk about reform later. I say this recognizing that I know that is not the intent of the distinguished Senator from New Hampshire. It is certainly not the intent of the Secretary of Health and Human Services, Mike Leavitt, who I know means well. But regrettably, that is what is going to happen under this Medicaid budget.

The distinguished Senator from New Hampshire, when he talks about Medicaid, constantly says: We are not cutting Medicaid. The Senator from New Hampshire is correct in saying he is not cutting Medicaid. But he is certainly going to hold down the rate of growth in the program. So the Senator from New Hampshire cuts the ability of State and local governments at a crucial time when they are getting more people enrolled because of the hardships in the economy and when there has been a failure to deal with the long-term care issue. These factors are driving up the cost of Medicaid. The Senator from New Hampshire is right that this is about the rate of growth. But this budget is going to cut the ability of local governments and States and poor people to pay for these medical costs at the very time when States are going to need the dollars in order to deal with the increases in enrollment and the fact that long-term care under Medicaid has not been dealt with.

In effect, what we are going to see is States and the poor get hit with a double whammy. States and the poor are going to have fewer dollars while at the same time States will not get relief from some of the bureaucratic water torture that is imposed on them.

My home State of Oregon is perhaps the leader in desiring to have innovative approaches in Medicaid. Sometimes I jokingly say: I am a Senator from ``Waiver'', because my State consistently wants to waive out of the one-size-fits-all approach that is so often taken in health care. Oregon has seen this kind of bureaucratic water torture in a lot of different ways as we have tried to deal with a tough economy and making changes in the Oregon Health Plan. We saw that very often when something innovative was done elsewhere, you couldn't even expedite approval to do that in Oregon or in other states. We see the bias against home and community-based services in Medicaid. I very much want to see the more flexible approach, the more innovative approach that lets the States be used as a laboratory for innovation in the health care area.

But make no mistake about it: Under this budget there are going to be fewer dollars for the kinds of reforms and innovations that are badly needed.

In effect, the real mistake in this budget with respect to Medicaid is it essentially says: Let's put the cuts in funds first before we go ahead with reform. I and others have no dispute at all with the distinguished Senator from New Hampshire and colleagues on the other side of the aisle about the need for reform in Medicaid. There is no question about the fact that innovative approaches used in the private sector have not yet found their way into the Medicaid program.

What the dispute is about is that we think it is going to be harder to get the reforms, harder to get the innovations if you cut off the dollars to the States and the localities right at the time they are having increases in enrollment, at the time that long-term care has not been dealt with, and certainly make it less likely that they will have the dollars they need to put in place the reforms.

Senator Corzine and Senator Rockefeller, others, and I will be, through the course of this week, seeking to improve this budget resolution as it relates to the Medicaid program, because regrettably a lot of poor people and a lot of States are going to get hurt now. The discussion about reform will come later. Under this particular budget, it is going to be hard to get in place some of the reforms that I and Governors around the country, on a bipartisan basis, believe are necessary.

The second area I would like to talk about as it relates to this budget is the question of Medicare and prescription drugs. Where we are headed now is the prospect that early in 2006, the Federal Government will be spending a ton of money on a prescription drug program and covering a very small number of people. That doesn't seem to me to be acceptable in this kind of belt-tightening climate and certainly is not acceptable with respect to the scarce use of Government resources. A group of Senators and I, on a bipartisan basis--Senators Snowe, McCain, Feingold, and others--have been seeking unsuccessfully to do what the Senator from New Hampshire has said he wanted, which is to find real savings.

Here is what the Congressional Budget Office said. I see the Senator from New Hampshire here. I want to read to him the sentence specifically from the Congressional Budget Office letter of March 3, 2004.

Paraphrasing, the Congressional Budget Office said: Giving the Secretary an additional tool would put greater pressure on manufacturers and could produce additional savings.

In March 2004, the Congressional Budget Office found, with respect to single-source drugs, there was the opportunity to have leverage like the private sector has, and there would be some savings.

You are going to hear during the course of the week that there are no savings. I hope my colleagues will look at the letter dated March 3, 2004, from CBO that attests to the fact that they believe there is a potential for additional savings. Of course, this was the kind of concern that motivated Tommy Thompson, in his last days as Secretary of Health and Human Services, to say he wished he had the power and clout that the legislation I have authored with Senators Snowe, McCain, and others, would provide.

I believe that if we are going to adhere to the suggestion of the Senator from New Hampshire that we put a real focus on additional savings, we should not pass up the kind of opportunities that the private sector is using to generate savings, that Tommy Thompson said would be an invaluable tool for him, and the CBO said in March 2004 would provide the potential for additional savings.

I say to the Senator from New Hampshire that, with all of that evidence--the private sector, the Secretary, Congressional Budget Office, and just plain common sense--nobody would shop for medicine the way Medicare is about to shop for medicine. I have compared it to the fellow standing in Price Club buying toilet paper one roll at a time, not using bargaining power. Nobody in the private sector uses their shopping opportunities in that way, but that is where we are headed with respect to the Federal Government. That is what I would like to change.

Senator Snowe and I and others will be on the Senate floor during the course of the week. I am very hopeful that my colleagues will listen carefully. At a minimum, I believe that giving this opportunity, particularly as it relates to what are called the fallback plans and if the private drug plans ask for help is important. For the life of me, I cannot figure out how this will do any harm. The Secretary would have the discretion to make the decision as to whether to use this power overall, but it certainly cannot do any harm to start the kind of smart shopping approach that goes on in the private sector every day. That is the way timber companies do it, that is the way auto companies do it. Everybody says: Look, if you are buying something and you are going to buy more of it, you ask the people for a discount for the additional purchases you are making. That is what Senator Snowe, Senator McCain, myself, and others are going to seek to do.

I also hope that as we discuss this in the course of the week, colleagues see that this will perhaps be the only vote in this Senate on the question of prescription drug cost containment through bargaining power. If the Senate Finance Committee, on which I serve, doesn't offer it as part of a piece of legislation coming through the Finance Committee, this could be the only opportunity for the Senate to go on record with respect to pharmaceutical cost containment. I say to my colleagues, when you go home and people ask you about the prices seniors are going to be paying for prescription drugs under Medicare--look at the prices they are paying right now--I would not want to have to explain why I was against having the kind of bargaining power you see in the private sector every single day. So when I come to the floor this week with Senator Snowe and others, I hope colleagues will see--and maybe there are other ideas out there--that this will be the only opportunity perhaps this year to hold down the costs of prescription drugs before the program is to be implemented next year.

So when colleagues open the newspaper and see that the cost of the program has gone from $400 billion to $500 billion and to $700 billion--and I guess next we will hear about a trillion dollars--I hope they will remember that when they vote on the Snowe-Wyden legislation in the course of the week. This is legislation that Tommy Thompson said he wished he had, and CBO says it certainly has the potential to save for single-source drugs, and that goes on in the private sector all the time. The Secretary of Health and Human Services still will have substantial discretion under this legislation. So I hope colleagues will look at it.

I also make the point, in closing, that this is not just removing what has been called the noninterference language. This goes beyond the so-called noninterference language and says that the Secretary would have to respond when private plans say they need that additional tool, and for what are called fallback plans, where it is deemed that there is inadequate competition.

The question of health care is certainly going to be more important in the days and years ahead. It is going to be very important in the context of this budget because the proposal that deals with the Medicaid program is misguided. It cuts before it reforms. I believe that is going to hurt the poor and it is going to hurt the States.

The Senator from New Hampshire will say--and will say correctly--that it is really not a cut; there is still going to be growth. But the bottom line is that it takes dollars out of the States and local governments to serve the poor when there is a time of increased enrollment and difficulties in paying for long-term care coverage. That is why it is wrong. In addition to the Medicaid part of the budget, the budget does not address cost containment in Medicare prescription drugs. I am very sad we were unable in the committee--on partisan vote, we lost by 2 votes--to get some private sector bargaining power into the Medicare prescription drug program at a time when the costs continue to escalate. Senator Snowe and I will be on the floor this week about this.

I urge my colleagues to, as they consider this vote, recognize that this, perhaps, will be the only opportunity in this session of the Senate to vote to contain the cost of the prescription drug program before it starts in 2006. I hope the Senate will heed the words of Secretary Thompson, who said in his last days in office he wished he had this power. Under our bipartisan legislation there is an opportunity to respond when the private sector believes it needs additional leverage. It is just common sense.

Unlike the concerns expressed earlier by the Senator from New Hampshire, who was concerned about additional spending, this is going to be about deficit reduction. This is going to be about saving money in one of the fastest growing parts of the Federal budget. It is about getting serious as we try to reign in the costs of health care that are escalating beyond those of any other in our society.

Mr. President, I yield the floor.

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