To provide that the actuarial value of the prescription drug benefits offered to Medicare eligible enrollees by a plan under the Federal employees health benefits program shall be at least equal to the actuarial value of the prescription drug benefits offered by such plan to its enrollees generally.

It is my understanding I have 7 minutes.

Mr. President, I have listened carefully to the debate on H.R. 1 during the last few days.

I regret to say I have heard many half-truths and misrepresentations about our bill from the opponents of the legislation.

This simply won't stand.

We're reaching the point where twisted facts and wrong-headed reasoning have been repeated so often that even those who know better are no longer jarred to hear it.

As one of the conference committee members who actually wrote this bill, I find this untenable, because the opposition is just scaring and confusing Medicare beneficiaries.

The last thing any of us want is for critical decisions to be made in a climate of fear or in a fog of uncertainty.

Yes, this legislation is not perfect. But it is good.

I'll tell you why.

First, and most important, this bill provides all beneficiaries-- seniors and the disabled--with voluntary prescription drug coverage for the first time in almost 40 years.

Coverage for their medications is something Utah beneficiaries have sought for decades.

Not a day goes by that I do not receive a letter from some part of Utah beseeching Congress to pass this bill.

Second, that coverage will be immediate. Seniors wherever they may live, from St. George to Logan, from Tooele to Vernal and down to Blanding and Monticello, will be able to use a new drug card to get an immediate discount on their medications.

Third, the program is voluntary. We all know--as do the bill's opponents--that beneficiaries will not be forced to join this new drug program. If they are happy with the status quo, then things can stay as they are. If they want to participate in the new program--it will be there for them.

Fourth, H.R. 1 provides choice in coverage. Beneficiaries may stay in traditional Medicare and elect to take a stand-alone drug plan if they want one. Or they may receive their coverage through a local health plan or the new regional PPO plans offered through the new Medicare Advantage program.

How often does a Federal program offer people the range of choices that this bill creates?

Fifth, this bill preserves retiree health coverage. Close to one- quarter of the spending in this bill, approximately $89 billion, is dedicated to protecting retiree health benefits.

For the first time--and none too soon--Medicare will provide funding as an incentive for employers to continue retiree health coverage. Under this bill, no beneficiary will be forced to drop retiree health coverage and participate in the new prescription drug program.

Sixth, the conference agreement is good for rural America, which has gotten the short shrift under Medicare for some time.

We want to ensure that Medicare beneficiaries will have access to quality health care, no matter where they live. We also want rural providers, providers in Moab and Panguitch, providers in Price and Manti, providers who dispense vital health services to beneficiaries, to be properly reimbursed for their services. This legislation accomplishes those important goals.

Seventh--as I intend to amplify later--this legislation improves the Drug Price Competition and Patent Term Restoration Act of 1984, better known as Hatch-Waxman. The conference agreement strengthens the 1984 law so it is easier for everyone, including seniors and the disabled, to have timely access to less expensive, generic drugs.

Eighth, the Medicare agreement includes an appropriate response to the question of reimporting prescription drugs into the United States.

While we include the provisions contained in the legislation approved by the Senate, this agreement also requires the HHS Secretary to conduct an extensive study that identifies the barriers to implementing a drug reimportation program.

Many of my constituents have written, asking why they cannot use the lower cost medications from Canada. The answer is easy: it is just irresponsible for Congress to jeopardize public safety by allowing the unchecked reimportation of drugs. That is why I adamantly opposed the House policy.

If we truly care about our seniors and other patients who depend upon prescription drugs, we should not expose them to what amounts to pharmaceutical Russian roulette.

And, finally, we have done all we can to craft a bill that is as cost-conscious as possible, a bill that the Congressional Budget Office has certified stays within our budget, and a bill that minimizes bureaucracy whenever possible.

We have worked hard to write a measure that relies whenever possible on the private sector, not on exploding the size of big, Washington government.

Before I conclude, I would like to take a minute to refute some of the points that have been raised by the opponents of this legislation.

Yesterday, I heard my good friend from Massachusetts talking about how he feels that the Senate is being stampeded with a bad bill.

It is hard to argue we are being stampeded, when we have worked on this issue for almost 15 years.

I also have heard our colleague say this legislation dismantles the Medicare program and that the HMOs are going to make out like bandits. Again, that is simply not true. Guess who was one of the people who helped to bring about HMOs. None other than the senior Senator from Massachusetts.

This agreement improves the Medicare program by giving beneficiaries voluntary prescription drug coverage for the first time in 40 years-- that is a reaffirmation of Medicare, not a weakening of it.

We also give beneficiaries expanded choices in their health care coverage; they may remain in traditional Medicare or in their retiree health care plan. Or they may receive their coverage through local or regional plans offered to them through the new Medicare Advantage program.

Contrary to what my friend from Massachusetts says, no one will be forced into an HMO, and I hope that the American people are not buying that kind of scare tactic.

The other fallacy that I heard during this debate was that the premium support demonstration project, which would be conducted in only six metropolitan areas, is going to disadvantage beneficiaries who remain in traditional Medicare. I have heard it said that those premiums could go up by 10, 15 or 20 percent, even though we who wrote the bill know that the Part B premiums for traditional Medicare could not rise by any more than 5 percent over the regular premium.

This rhetoric is absolutely outrageous. If you look on page 254 of the conference report, you will see that it is not true. The legislative language speaks for itself:

``The amount of the adjustment under this subsection for months in a year shall not exceed 5 percent of the amount of the monthly premium.''

In addition, if a beneficiary is under 150% of poverty, there is no impact on premiums at all.

And I am really getting tired of Speaker Newt Gingrich's words being continuously misconstrued.

He never said, as my colleagues on the other side of the aisle like to assert, that he wanted Medicare to wither on the vine. What he did say is that the agency that controlled Medicare, HCFA, should wither on the vine because it was filled with bureaucrats that were strangling the program. That is a far cry from what they have been representing-- person after person after person.

He was arguing against large bureaucracies and for seniors to have more control over their health care.

I have saved the best for last: the accusations and allegations made against

the AARP, which are truly amazing to me. It is truly amazing how last year they were considered to be the greatest organization on Earth by folks on the other side of the aisle, but this year they are dirtier than dirt. That is just not true.

It is ironic that some in this Chamber are criticizing the AARP for supporting a bill that will provide drug coverage to Medicare beneficiaries.

What a difference a year makes! Last year, the AARP could do nothing wrong in the eyes of today's opponents.

Yet, suddenly the AARP is either greedy or being taken in like a bunch of half-wits. So much for honest disagreement among friends!

What has changed? What does AARP know that the opponents of S. 1 do not?

AARP knows that this may very well be our last chance to enact a program adding prescription drug coverage to Medicare.

AARP knows, as we all do, that this is not a perfect bill. But AARP also knows that this bill lays a solid foundation which we can refine in the future.

In the eyes of this Senator, AARP has made a courageous decision by endorsing our proposal and I greatly appreciate their support

In conclusion, I want to commend the chairman of the Senate Finance Committee, Chuck Grassley and the ranking minority member, Max Baucus on a job well done.

I also want to compliment the Majority Leader, Dr. Bill Frist, on his leadership in shepherding this bill through the Senate.

Today we will make history.

We will break gridlock. We will act decisively to help the people of this great country.

The citizens of this great country are counting on us to get the job done.

So, let us clear away all the parliamentary hurdles and pass H.R. 1.

It is the right thing to do.

One last thing. I have heard some of my colleagues who are opposed to this bill raise the issue that Government can do nothing to help restrain the growth of drug costs or bring drug costs down. Again, this is a misrepresentation of what the conference agreement actually does.

The conference bill specifies the Government ``may not interfere with the negotiations between drug manufacturers and pharmacies and PPO sponsors and may not require a particular formulary or institute a price structure.''

Opponents claim that provision, which originated with Democratic proposals, by the way, is a concession to the pharmaceutical industry. That is why it is so phony to hear these arguments. They are plain wrong. The noninterference provision is at the heart of the bill's structure for delivering prescription drug coverage. It is a good deal for consumers rather than price fixing by the CMS bureaucracy, which I believe is opening the door for universal health care. It is a misrepresentation of the language in this provision to argue otherwise.

Mr. President, I have listened to my dear friend and colleague from Massachusetts. I guess he wants us to spend another 15 years either trying to reform Medicare, improve Medicare or pass another prescription drug benefit program through the Congress.

We are putting up $400 billion over 10 years, for both a Medicare drug benefit, something that seniors currently do not have today, and Medicare program improvements. Medicare beneficiaries have a choice of whether or not they want to participate in this program. They may remain in traditional Medicare. And, to be honest with you, those remaining in traditional Medicare who end up participating in the comparative cost adjustment demonstration project will not see their premiums increase more than 5 percent.

I only have a few minutes, so I would like to finish my comments.

According to my colleague from Massachusetts, we are dismantling Medicare. That could not be further from the truth.

How can we say that--when we are improving and strengthening Medicare, we are giving Medicare beneficiaries a choice of coverage, and we are giving them $400 billion to help with their prescription drug coverage and Medicare benefits. These new choices include the plans created under the new Medicare Advantage Program, the stand-alone drug plan, the regional plans, the local plans--how on Earth is that dismantling Medicare? And this coming from one in this body who was one of the major proponents of HMOs, to begin with? I might add, I have been here long enough to have remembered that.

Next is Social Security? Nobody in this body wants to hurt Social Security, and the Senator from Massachusetts knows that. Since when does the Washington Post have the inside track on the Senate Republican agenda? Give me a break.

I am going to finish in just a minute.

Again, I think my friend from Massachusetts, as great a Senator as he is, is trying to scare senior citizens. And, frankly, I think to say let's just not pass this bill and let's go back to the drawing boards is just plain wrong. The Members of the Medicare conference have been meeting for hours and hours, days, weeks, months to figure out how to provide Medicare beneficiaries with the best drug coverage possible. There are Members of Congress who have been working on this issue, trying to get a bill signed into law, for close to 15 years. And we are almost at the finish line. Yet my good colleague wants to go back to another 15 years of floundering around on this issue.

Now, if beneficiaries did not have choice in drug coverage, maybe my friend from Massachusetts would have a point. But seniors will have choice in coverage. Why would we go back to the drawing board, especially after all the time and effort we have put in this legislation? We have before us a bill that really does so much for seniors. The AARP is coming out strongly behind this bill, because they know full well that it is the last train out of the station, it is the only way we can go. I urge my colleagues to support this legislation so Medicare beneficiaries can finally have what they have wanted for close to 40 years--comprehensive prescription drug coverage.

I yield the floor.

Mr. President, I would like to take a few minutes to rebut some of the points raised by the Senator from Massachusetts.

First, he mentioned he is concerned about the cost of this bill. Let me remind my friend from Massachusetts that last year, he supported a bill that would have not only cost $800 billion, it would have sunsetted the Medicare prescription drug benefit. How would that have helped senior citizens and other Medicare beneficiaries, especially the disabled?

Our bill costs $400 billion over 10 years and it is a permanent benefit.

He also mentioned retiree health benefits and how individuals are going to lose their coverage as a result of the bill. Let me correct that statement for the record. First, $89 billion--yes, I said $89 billion--is devoted to employer subsidies in order to preserve retiree health benefits, so individuals will not lose their retiree health coverage. We have gone from a drop-out rate of 37 percent in H.R. 1, to a drop-out rate of under 20 percent. Again, my colleague is simply using scare tactics.

Mr. President, I thank the chairman of the committee.

We have now come to the time of decision with regard to whether we are going to have the capacity to, in fact, reach a compromise on one of the great issues of the day; that is, whether the Congress has the political courage and political will to set aside partisan differences and to allow both sides to come together and reach agreement. We can argue about which party benefits from a Medicare reform bill and which party will suffer, but the real issue is not whether the Democratic Party or the Republican Party wins or whether the President gets to sign a bill that reforms Medicare in the Rose Garden. The real question before this institution on both sides of the aisle should be whether for once we can come together and craft a piece of legislation that creates a program that is substantially better than the 40 million seniors currently have under Medicare.

When Medicare was created in 1965, it was bipartisan. It was a change. Some say we should not change Medicare. I would argue that Democrats have never feared change. In 1935, when we wrote the Social Security Program under Franklin Roosevelt's leadership, Democrats changed the status quo. When we led in 1965 the effort to provide medical assistance for our Nation's seniors, we challenged the status quo. We stood up for change and created a new program. Today, over 38 years later, we have the opportunity to once again change a program which has served seniors well but not nearly as well as they deserve. Democrats should not fear that type of change.

Medicare today, on average, does not cover 47 percent of the average senior's health care costs in this country. Not one of us in this institution--our employees, Members of Congress--has health care insurance that is that deficient in what it does not cover. Forty-seven percent of those costs have to be borne by the senior citizen individually or, if they do not have enough money, by their children or their grandchildren or, if they become so poor,

they are put into the State Medicare Program for the poorest of the poor. That is unacceptable. That is not in keeping with the greatness of this Nation, to have a health care program for seniors that is that deficient.

This institution cannot let the perfect be the enemy of the good. This bill is not perfect, but this bill is good. We cannot let political pundits on both sides of the aisle who try to dictate what our choices are say, well, let's pass a Republican-only bill so that we can blame the failure of its passing on the Democrats. Neither can we allow Democratic political pundits to say to us we should not pass this bill for the reason that it would allow the President of the United States to sign it in the Rose Garden and that would be a political benefit for him.

If we cannot take good legislation and pass it and both claim credit for it, then, quite frankly, we should be doing something else. Good government is good politics. This is good government. This is a good bill.

There are two different approaches to solving health care. Some of my friends on the Republican side would say: The Government should have nothing to do with it. The private sector should do everything, keep the Government out of it, and we can design a program with the free enterprise system that will work just fine.

Unfortunately, there are some on my side who would say: No, the Government has to do everything. Government would have to do it all. The private sector cannot be involved at all.

Both of those approaches are incorrect. The best way to solve health care problems is to do what this bill does; that is, to combine the best of what government can do with the best of what the private sector can do and come up with legislation that says: Yes, the Federal Government can supervise it but not micromanage it. Yes, the Federal Government can help pay for it through the tax system--and this bill does that--but the private sector needs to be involved as well. The private sector can bring about innovation. They can come up with new ideas and new concepts faster than we can in the Congress and in the Federal bureaucracies here in Washington. The private sector can bring about a degree of competition which is sorely lacking under the current micromanaged system with 133,000 pages of rules and regulations. That does not allow innovation or competition. That is one of the reasons the program as we know it today, as good as it is, can be made a lot better.

The issue for our Nation's seniors is not just living longer lives; it is also about living better lives. For the first time, seniors will know that when they need prescription drugs, they will be available. Four hundred billion dollars will set up a structure where they will have insurance that covers prescription drugs, just as in 1965 when we made changes that said the Federal Government will help provide insurance to cover hospitalization, we said that for the first time the Federal Government will help with a program that will provide insurance coverage for doctors.

This is a good program. We should not fear change. This is a major step in the right direction.

Mr. President, I think one of the subjects that really united both Republicans and Democrats was the question about dual eligibles. There was a large number of seniors being treated as second- class citizens

of this country because, if they were poor, they were not in the Medicare Program. If they were poor, they were not allowed to get through the Medicare door, and for no other reason than they were poor.

Under that scenario, low-income seniors, maybe 80 years old, who worked all of their lives, but ended up in a very low-income status, were relegated to the Medicaid Program, where there was not a consistent amount of benefits for their health care programs. They were subject to the will and whims of the various State legislatures. Some treated them better, some treated them worse, and some didn't treat them hardly at all.

What we were able to do, which I thought was a priority for many Republicans because it was in the House bill--but it also was a priority for many Democrats in this body--was to say that we are going to bring those low-income seniors, for the first time, into the Federal Medicare Program. We did that. That is part of this bill. Those low- income seniors now are going to have the opportunity to be in the Federal Medicare Program. They will know what their benefits are. They will know, for the first time, they have access to prescription drugs, which is what I think the bill is all about. In addition, we were able to find an extra amount of money to help them with any type of copayments they might have.

Some States have high copayments; some States have no copayments on drugs. But what we were able to do was to say: Here is extra money for the purpose of helping States to reduce the copayments down to $1, if they are buying a generic drug and only $3 if they are buying a prescription drug. In addition to that, the subsidies and assistance we have for low-income seniors in general is extremely important.

Starting in April of this coming year, they will get a drug discount card. If they are low-income, they will start off with a $600 credit on that card, to be able to immediately have the benefit of something, where they have nothing at all today.

On balance, when you have a 150 percent of poverty and below special assistance program, when you have a discount card that starts in April, and all of the seniors, for the first time, will be in the same Federal program, I think that is significant. For the first time, we will say to seniors who are low income that you will no longer be treated as a second-class citizen and be different from all of the other seniors you know. You will be part of the Federal program and you will have access to prescription drugs.

Again, I think the question is, Have we designed a perfect bill? The answer is no. But I think when you look to associations such as AARP and the National Council on the Aging, we have a bill that merits their support.

Mr. President, we have reached that point where the debate is on the size of the bill and not the merits of the bill.

Let me just say, 38 years ago this Congress passed this document that I have in my hand for the first time. It was in 1965 that we enacted Medicare, which was a noble experiment. It was led by Democrats and signed into law by President Lyndon Johnson. It was, indeed, a change and a challenge. No one knew whether it was going to work. People could not be guaranteed it was going to serve the needs of America's seniors. But it was a chance worth taking. It was a change. I suggest today Democrats in particular should not fear change if it is aimed at improving a document that has served this country so well.

The only defect of this legislation was that it didn't do everything that it should have. For instance, while it covered doctors and it covered hospitals, it did not cover what at that time were new innovations in the area of prescription drugs. Members of Congress knew we had to take care of seniors going to the hospital. We had to take care of seniors seeing their doctors. But no one really thought that seniors getting prescription drugs was going to be that important.

Today we have the opportunity to correct what we did not do in 1965 and bring about a reform to this program which is greatly needed. I would just say that is why organizations such as the National Council on Aging, which represents all of these seniors who go to these senior centers throughout our States and congressional districts, as well as the AARP--and Democrats many times cite the AARP when they agreed with them. But now when they do not agree with them they find fault with the organization.

I suggest the Nation's largest organization representing over 35 million seniors has had their health economists and their lawyers carefully study the document that is before us and made a recommendation to those of us in Congress. They said this is something we support because it is indeed, on balance, the bill we should approve and send on to the President for signature.

Again, I say it is not a perfect bill. But, once again, we can't let the perfect be the enemy of the good. We also cannot let the political pundits of both of our parties suggest we cannot vote for this bill because somehow it may give credibility to the other party. I have actually heard that from both sides of the aisle. I think that would be a tragic mistake.

The issue today is not which political party wins. The issue today is whether we can craft legislation that allows America's 40 million seniors to come out a winner. I think on balance this bill does that because it combines the best of what government can do with the best of what the private sector can do.

Many on my side of the aisle think the Federal Government should do everything all the time. We can't do that. We can't do it very effectively. So I think it is important to note that on the other side of the aisle, many of them think the Federal Government should not do anything and that the private sector should do it all.

The truth lies, as most truthful matters lie, somewhere in between. The fact is, we ought to combine the best of

what Government can do with the best of what the private sector can do and create a new Medicare reform for the 21st century.

With regard to the points of order, I made it very clear the two points of order we are going to be voting to waive are not dealing with the so-called premium support language that is in the bill. It doesn't deal with the cost containment provisions that are in the bill. It doesn't deal with whether we are going to bring in the Medicare Program all low-income seniors who are currently in, under the State Medicare Program--it doesn't deal with any of that. It deals basically with the fact that we are spending more money in this legislation than the structure of the budget would allow us to do.

That is not uncommon, and the proper procedure is to have a waiver of those points of order, which is what we are going to be voting on.

The first point of order really lies because of the fact that we put more money to help the State Medicaid Programs, something that most people on my side of the aisle strongly supported, to make sure we help those programs make sure the drugs that they are going to still be involved in helping seniors with--that they will be able to help them to the maximum degree possible.

In addition, one of the other reasons the first point of order lies is because previously the Finance Committee helped the States with their unemployment insurance, something most people on my side of the aisle strongly supported. It is not sufficient for people to go back to our States and tell seniors that we somehow prevented this bill from being adopted because of a point of order that was very technical in its essence. I think people want to know where we stand on the merits of the bill. Are we for prescription drugs for the first time, for seniors, since 1965? Are we for giving them a program where the Federal Government pays 75 percent of their drug costs? Are they for or against a program that is going to give particular help and assistance to our Nation's low-income seniors, which is so terribly important? Are we for bringing low-income seniors into one standard national Medicare Program or are we not?

I would not want to go back and somehow argue the technical merits of the point of order and say this is why I could not vote for prescription drugs for seniors, a $400 billion package. There are going to be some on the more liberal wing and more conservative wing who will find reasons to be against this bill, but on balance it represents a centrist coalition, and I urge my colleagues to support it.

Mr. President, I yield myself 9 minutes.

Mr. President, let me commend the Senator from Iowa, the Senator from Louisiana, the Senator from Montana, and others who have worked on this so very hard. I want to express my gratitude to them for spending so much time on this issue.

Let me also briefly thank my own staff. I am not a member of the Finance Committee. But this issue transcends committees. This is legislation that all of us have a deep interest in. I thank Jim Fenton and Ben Berwick of my staff for the tremendous effort and time they have put in.

I spoke at some length on Friday about this issue. Let me divide the issue very quickly.

A prescription drugs benefit, I think, would pass 100 to 0. If we had a vote on the prescription drug benefit--you would hear speeches that it didn't go far enough and concerns about the donut hole and whether or not 150 percent of poverty was the right margin to be drawn--but I suspect all Members in the final analysis would support the initiation of a prescription drug benefit on the assumption that we would work to improve it in the years ahead.

If I were voting on that issue alone, I would stand here and raise concerns about matters included in that provision, but it would have my wholehearted support as a long overdue proposition. I won't dwell on that aspect of the legislation here this morning.

The second piece of this bill, however, is one that causes me concern. This second piece is more difficult to understand, it is less clear than just $400 billion for prescription drugs. The second part of this bill is a major change in Medicare. The program has been around for 38 years and is currently serving 41 million Americans. It is probably the most successful and the most wildly supported Federal program of the 20th century. I can't think of any program, except Social Security, which has been so widely supported. We are about to take that program which has worked so tremendously well, and I think disadvantage it significantly. Let me explain briefly why.

The sponsors of the legislation say they are not forcing seniors out of traditional Medicare. They claim they are simply creating competition as a result of offering seniors a choice. Let us talk about this so-called ``competition.''

Private plans under this bill will be reimbursed at a higher rate than traditional Medicare--9 percent higher. On top of that, this bill also makes available $12 billion in a slush fund to be used to lure private plans into the market on a corporate subsidy. You get a 9 percent differential and $12 billion. That is what you get to compete with Medicare. You do not have to have a Ph.D. in math or a Ph.D. in business law to understand that kind of an advantage certainly is not what I call a level playing field. It is not competition, it is a rigged game. The bill stacks the deck against traditional Medicaid and the effects are self-perpetuating. Traditional Medicare grows weaker, private plans grow stronger, forcing more beneficiaries out of the traditional programs and into the open arms of HMOs.

It is easy to get bogged down in the complexities of this bill. Let me state it simply: The weakening of the traditional Medicare Program caused by this bill will force seniors to pay more and face the prospect of fewer benefits.

Remember, Medicare initially said whether you are wealthier and healthier or poorer and sicker, we all work together. Now we are splitting off the wealthier and healthier and leaving the sicker and poorer on the side.

This bill will actually mean less choice, in many ways, for seniors. Seniors like the traditional Medicare Program precisely because it offers choice, the very thing the supporters of this bill claim to be providing. Under the current system, seniors have a choice of doctors. But that choice would soon disappear with a rise in private managed care plans.

I hope this prediction is wrong but I am fearful it is right. If this prediction is wrong, it most likely means seniors have elected not to move into private plans and HMOs will leave the market in many areas, as we have seen in the past with the Medicare+Choice plan, taking $12 billion with them that might have been used to reduce the cost of prescription drugs rather than provide a subsidy for the private plans to compete with Medicare.

Even more ironic is that this highly unfair system is being championed by self-proclaimed champions of free enterprise. This bill gives $12 billion to HMOs to unfairly compete and it does nothing to control drug prices. In fact, it actually prevents the Medicare Program from negotiating lower drug prices. Under law, Medicare is prevented from using its purchasing power to negotiate with drug companies for lower prices. What is wrong with letting free enterprise work here in order to lower drug prices?

If Medicare is so in need of reform, why in this bill are we subsidizing private companies and not allowing the Medicare beneficiaries to compete for lower drug prices? The reason is simple: The champions of free enterprise know that private plans cannot compete with traditional Medicare on a level playing field. The subsidies are necessary because Medicare is actually more efficient. Medicare delivers services at a lower cost.

In 2010, a provision included in this bill will go into effect that begins an experiment with our Nation's seniors. Why we are taking our seniors, the most vulnerable, and turning them into guinea pigs for an experiment is beyond me. That is what we are beginning to do. Given the unlevel playing field I have described, such a competition would further disadvantage the traditional Medicare Program.

The bill writes into it right now a cap of 5 percent premium increases for each year in regions effected by this premium support experiment. The bill anticipates premium increases even before we have tried the program, and they are going to take 6 million seniors and throw them into an experiment, a pilot program, the outcome of which has already been determined by the bill's authors when they talk of a cap at a 5 percent premium increase. How is Medicare going to compete then? The outcome is predetermined, forcing those seniors into a disadvantaged program. The weaker and the poorer and the sicker seniors will end up paying more or having benefits cut.

I am afraid we can only conclude one thing: The architects of the bill, with all due respect, spend billions of dollars not to reform Medicare, but to dismantle it. It puts patients out there to wither on the vine, as Newt Gingrich said 8 years ago. If the man who wanted that embraces this legislation, that could mean one of two things: Either his opinion has changed or this legislation really is intended to end Medicare. I submit that I see no evidence his opinion has changed.

We set out to add a prescription drug benefit to Medicare. I applaud that. We could have had a bipartisan bill that did just that. It could have been approved by this Chamber overwhelmingly. But instead, we are being asked to vote on a wolf in sheep's clothing.

The second part of the bill, the changes in Medicare that will effect 41 million seniors, two-thirds of whom make less than $80,000 and above $13,470, for those in that category, this bill offers disturbing alternatives.

For those reasons, I urge that when the cloture vote occurs, Members vote against it. We can do better. I applaud the efforts made, but we can do better on this legislation than we have done.

I don't believe I used all 9 minutes, but others have gone over 9 minute. I yield back my time for those on the Democratic side who would like to be heard on the legislation.

Mr. President, I commend my colleague from California. Bring that chart down here. Talk about alphabet soup, this is very instructive, it seems to me, in terms of why people are so confused about what is in this bill. There is incredible language here that even the most determined person to learn about this bill would be hard pressed. There it is.

I thank the Senator from California because she has laid out here a lexicon of language which would glaze over the eyes of the most determined people to try to sort out what this bill means.

One of the points the Senator made is worth noting again. This is not the end of a Congress. This is only the end of a session. If we were at the end of a Congress, I presume the argument made that we have no other choice, we can either do it now or it doesn't get done would be valid. Each new Congress has to begin all over. But we can actually come right back, pick up where we left off, and try to work this legislation out to serve a better interest.

I thank her for this. Some of this really needs further explanation. Let me say this--and I am being repetitive to some degree--the prescription drug piece of this is of concern to me. I was willing to accept the argument that having a prescription drug benefit of $400 billion over the next 10 years, while not perfect, was a start. If that is all we were voting on today, I would probably vote for it. What is not being discussed at any great length is the second half of the bill, which is very confusing to people because it has language in it that is unclear as to what the ramifications mean.

So people need to pay attention and understand that if we are just dealing with the second half of the bill, the Medicare-exclusive parts of Medicare, I think there would be a very different reaction in the Chamber to what we are proposing. I suspect the prescription drug benefit piece would pass overwhelmingly, and I suspect that a free- standing Medicare piece might not get 15 votes, when you consider what is being proposed.

You are absolutely prohibited, under this bill, from joining to go out and buy prescription drugs collectively. You are banned under this legislation. Under this legislation, of course, you are going to give a significant advantage in the competition because of the $12 billion subsidy. That is the reason the order holds here. This piece of legislation has a significant subsidy coming up to the private piece of this proposal. Nothing like that is being offered anywhere else.

In fact, a similar point of order was raised in July of last year--at the end of July of 2002--making the exact same point of order that has been made on this legislation. That point of order was raised by the majority leader and the chairman of the Finance Committee against the piece of legislation offered by Senators Graham, Miller, and Kennedy. There, the point of order was against section 302(f) of the Budget Act because it broke the budget ceilings.

That is what is being offered here for exactly the same reasons. It will be curious to see whether or not the people who felt so strongly about not waiving the Budget Act back then will do the same here.

This legislation being proposed, obviously, also makes it extremely difficult for people, down the road, to be able to have a prescription benefit plan that is going to be fair and balanced. I take note that none of these provisions, by the way, will go into effect rather immediately. You can impose many of the things we are talking about here in a matter of days if you are truly interested. Yet they are delaying it until 2006, until after the 2004 elections when, obviously, what happens to beneficiaries under the so-called fair competition-- Medicare, remember, was a program designed to take the wealthy and healthy and the poorer and sicker together, not to discriminate, and to provide for both of these constituencies. Over the years, that is why the program has been so successful. What is going to happen, of course, with this unfair competition of a 9-percent differential and a $12 billion subsidy is that those who are wealthier and healthier will spin off out of Medicare, and only the poor and the sicker will be left in the program; thus, raising the premium costs or reducing benefits. That is what is going to happen here. There is no doubt in my mind about where we are headed with this proposal. We have raised this point of order to suggest that there is a better way of crafting this legislation. We urge our colleagues to support the point of order when the vote occurs.

Mr. President, I rise to speak about the Medicare prescription drug coverage conference report before the Senate today.

I do strongly believe this is a historic opportunity. I believe we should not let it pass by. This proposal represents a $400 billion expansion of the Medicare Program, the largest expansion of Medicare since it was created nearly 40 years ago.

While I intend to support this measure, I think what is most important at this juncture is to be honest with the American people. For me, it means being honest particularly with the people of Arkansas and the Arkansas seniors. This bill cannot be and will not be all things to all people. The bill will not provide free drugs for everyone. Some seniors, because we have talked about this for so long, have come to their own conclusion that what we were trying to get was free drugs for all seniors in this country.

I have to remind people we are in debt in our country up to our eyeballs, as far as the eye can see. We did not have an opportunity to provide free prescription drugs to all seniors in this country. Therefore, we have to do the best we can do right now with what we have. I am not pleased about the debt. I didn't support the last tax bill and I am scared to death of the debt we are creating for my twin boys who are 7 years old right now.

The fact is, in this year's budget we have $400 billion dedicated to American seniors. We have to do the best job we can to make that productive for them in this current circumstance because next year and the year after that, it will not be there; we will still be in debt up to our eyeballs.

We have a tremendous amount to do. This bill starts that. It is unfortunate the issue of adding a prescription drug benefit to Medicare has become so politicized. Several Democratic conferees, many of them experts on this issue in their very own right, were not permitted the opportunity to negotiate the final bill. They were conferees in name only. I join them in their frustration and how they feel. They have a right to be angry. It was wrong and unjust. They were prohibited from being part of this very important conference. This bill would have been better had they been involved.

Despite the flaws in this legislation and the partisan process we witnessed over the last few months, Democrats and seniors should be pleased that many of the principles we fought for are contained in this bill.

Is this the bill I would have written? Absolutely not. But there are components in this bill that are productive and move us forward. On behalf of our seniors, we must seize that opportunity.

The bill before the Senate today will provide all of the 453,438 Medicare beneficiaries in Arkansas with access to a Medicare prescription drug benefit for the first time in the history of the Medicare Program. Every senior will have access to a drug benefit to help them with the extraordinary cost of prescription drugs. Extraordinary.

Again, it is not all things to all people. If you find yourself in a position where you are well off and you do not have a lot of prescription drug costs, there may not be in here the most advantageous drug program for you, but for the sickest and the neediest of this country we have come a long way in this bill.

While the benefit is somewhat meager, I am confident we will improve on it in the future for those who maybe do not get the best return from this package. But this bill targets the sickest and the neediest of seniors, those with the highest drug costs and those who are in the lowest income category.

Because of the $400 billion limitation, that is where we have gone. When fiscal times improve, we should eliminate the gap in coverage. I am concerned about those seniors who will be hit with the gap in coverage and have to continue to pay their premiums. But the point is, every senior in Medicare in Arkansas will be able to choose to enroll in a new voluntary drug benefit while staying in the traditional Medicare Program. This is a huge victory. Seniors will not have to leave the Medicare they love to get a prescription drug benefit.

That is because the bill contains a fallback plan--a Government guaranteed plan or safety net--that will provide drug coverage should private, drug-only plans not come into their area.

We in Arkansas know a lot about that. We have seen what happens when Medicare+Choice comes in.

I am concerned that the fallback provision in this bill is not as strong as that which was passed in the Senate bill because it allows one prescription plan and one integrated plan to provide the drug benefit instead of two prescription plans.

I intend to work with my colleagues to fix this flaw before the drug benefit is enacted. I am glad that the conference agreement requires a national fallback contract, so that the Government fallback will always be there when necessary.

I thank the Senator from Iowa.

Mr. President, I have a lot more to say, and I hope I will have an opportunity to do it at some point.

I think the most important point to be made today is to talk about those who will be served. Over 170,700 beneficiaries in Arkansas will pay no premium for their prescription drug coverage and a nominal copay of no more than $2 for generic drugs and $5 for brand name drugs. They also will not have a gap in their drug coverage.

We are addressing some of the neediest individuals in our country at this juncture. Over 40,200 additional seniors in Arkansas will qualify for reduced premiums, lower deductibles and coinsurance, and no gaps in their drug coverage. All told, over 40 percent--over 40 percent--of Medicare beneficiaries in Arkansas will receive the much-needed special help.

This low-income assistance is of special importance to Arkansas' older women. Medicare seniors are disproportionately women and disproportionately poor, and will be served well by this special assistance.

There is much I would have done to strengthen the low-income provisions, such as not having an assets test for everyone and ensuring that Medicare could wrap around the cost-sharing requirements in the Medicare bill and that Medicaid could pay for prescription drugs not on the private plan's formulary.

I fought to include a new benefit providing screening for diabetes. The new diabetes screening benefit will help with the fact that approximately one third of the 7 million seniors with diabetes--or 2.3 million people--are undiagnosed.

They simply do not know that they have this very serious condition--a condition whose complications include heart disease, stroke, vision loss and blindness, amputations, and kidney disease.

This bill takes a number of steps to protect seniors' access to community pharmacies.

I worked hard to ensure that private PBMs must disclose any price concessions made available by manufacturers, that the Secretary of Health and Human Services has the authority to audit the financial statements and records of plans to ensure that they are complying with these disclosure requirements, and that the Federal Trade Commission study whether the PBMs that own their own mail order pharmacies have created higher drug prices for consumers.

In addition, private plans must allow any willing pharmacist to be a provider under its plan. And for the first time, local pharmacists will be allowed to offer 90-day prescriptions just like mail-order pharmacists.

These provisions are vital to rural hospitals, physicians, ambulance providers, home health providers, and rural health clinics in Arkansas. I have worked with my colleagues for a number of years on these provisions, and long-sought rural equity is finally achieved.

This bill also contains several good additions to the traditional Medicare Program that seeks to improve the health and well-being of seniors.

Among the provisions that I fought to include is my demonstration program on chronic care management that will help determine the healthy outcomes that result when a geriatrician is paid appropriately for caring for a patient with multiple chronic conditions.

I also fought to include coverage for insulin syringes. Roughly 40 percent of the senior population with diabetes--or 1.8 million seniors--use syringes to inject insulin into their bodies to control their diabetes every day.

Without coverage, syringe purchases--which can be especially expensive for seniors on fixed incomes--would not count towards cost- sharing and yearly maximum out-of-pocket expenses.

The low-income assistance in the Senate bill was much more generous. It helped 3 million more seniors. And I pledge to these seniors that I will continue to work on strengthening these provisions in the future.

I am pleased that the conference agreement provides financial incentives for employers to continue offering prescription drug coverage for their retirees.

I have received many calls this week from constituents who want to ensure they don't lose the health coverage they worked for their entire lives. It is frustrating that employers are already dropping retiree health coverage.

So I am glad this bill provides tax incentives to employers and unions so they don't drop drug coverage. Employer groups have told me that this bill will actually encourage them to retain rather than drop coverage in the future.

This bill also creates the most comprehensive rural package we've seen in years. By significantly decreasing or eliminating the disparities in Medicare payments that exist between rural and urban health care providers, seniors in rural areas will have better access to the care they need.

To conclude, we must seize this opportunity before it is too late. This is not the bill I would have written, but it is a step forward.

Yesterday, I talked with Cecil Malone, the president of the Arkansas AARP. We both agree that this moment must not be wasted. We must act now to get a benefit started. Once it is there, it can only get better.

I promise the seniors of Arkansas that I will work day in and day out to make this prescription drug plan better.

I will also work to preserve and protect the Medicare Program so it can continue to be a safety net for all those who are uninsurable in the private market--millions of seniors, individuals with disabilities, and people with kidney failure.

The Medicare Program has prevented these most vulnerable individuals from being uninsured. We must remember the Medicare Program's origins and mission as we proceed--and do no harm to it.

Finally, Mr. President, I thank Finance Chairman Grassley, Ranking Member Baucus, Senator Breaux, and the members of their staffs who worked so hard over the last several months to bring us to this historical moment.

This bill also ensures that seniors have convenient access to pharmacies

by adopting the same standard that TRICARE uses to determine access.

The bill also includes my provision to waive temporarily the late enrollment penalty for military retirees and their spouses who sign up for Medicare Part B and to permit year-round enrollment so that retirees can access the new benefits immediately.

I am glad that this bill takes some steps to contain the skyrocketing price of prescription drugs. One provision in the bill would help bring generic drugs to the market faster, and another provision would give the Government authority to create a system for the importation of drugs from Canada by pharmacists, wholesalers, and individuals once safety standards are met.

I have long supported drug reimportation but both the Clinton and Bush administrations have refused to implement drug reimportation authorized by Congress, citing concerns about drug safety.

I am glad this bill directs the Secretary of Health and Human Services to conduct a comprehensive study that identifies current problems with implementing the current reimportation law we already have on the books so Congress can enact a law that will allow reimportation to go forward.

Mr. President, there is a lot to be talked about here. I hope we will continue to work together to improve upon the shortcomings in this legislation as we work to see it implemented to make it a better program for current and future beneficiaries of the Medicare Program.

Mr. President, for purposes of time management under cloture, I designate Senator Reid, the Democratic whip, as the opposition manager.

Mr. President, I make a point of order that H.R. 1, the pending conference report, violates section 311(a)(2) and section 302(f) of the Congressional Budget Act of 1974, among other reasons, because of the provisions related to premium support and health savings accounts.

Mr. President, I suggest the absence of a quorum.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, obviously the pending motion is now the matter before the Senate and the clock is ticking. I want to use some of the time at this point and reserve the remainder of time for those who wish to speak. I will, hopefully, reserve some time for myself at the end of the debate.

I make this motion recognizing there are a lot of concerns involving budgetary considerations on the legislation now pending. Those on the other side have expressed their understandable concern about the overall commitment in the budget to a new entitlement program, and I respect their position. It may be that on that basis alone, many of our Republican colleagues will want to vote against the motion to waive a budget point of order.

They will make the case that this is an entitlement that goes way beyond the $400 billion, that it is very likely this legislation could grow to $600, $800, $900 billion in the very near future, as other entitlements have on occasion. That is their right.

They will argue that this, as a new entitlement, provides very little cost control. On that I would agree, and I will come back to that point in a moment. So without a doubt, there are very important budgetary points of order to be made.

Technically, this budget point of order challenges the bill because it exceeds the 2004 budget authorization. It also challenges the allocation of resources within the jurisdiction of the Finance Committee. So those are the technical reasons.

I want to give my reasons for expressing the concern I have throughout the debate, and how it relates to this budget point of order. I don't challenge the $400 billion. Frankly, I don't think that it is adequate to provide a meaningful drug benefit. We have to do better than that. But that is another issue. What I challenge is why it is we are misallocating so many of the resources within that $400 billion budget pie. That is my concern; how it is that we can spend $6 billion on HSAs, health savings accounts, and at the same time tell our seniors they are going to have to pay $35 a month, 100 percent of the cost for drugs up to $250, 25 percent up to $2,250, 100 percent up to $5,100. Why are we going to tell them that when we have all this money for these special interests is something I can't understand.

I can't go to my senior citizens and tell them: You are going to have to suck it up and understand that sacrifice is something we are going to ask of you for the opportunity of the Government to pay 75 percent of your drug costs for a limited period of time throughout the year.

That is what we are saying. We have money for all these other accounts, but we don't have adequate resources dedicated to providing meaningful help to seniors. That is my first concern. We are simply not allocating the resources within that $400 billion to their maximum advantage.

But there is another concern as well. We all ought to be concerned, Republicans and Democrats, about this. We have taken virtually all the cost control mechanisms out of this bill. So those who are concerned about an exploding entitlement have a right to be concerned about what this is going to cost 10 years from now.

Ten years ago, we passed a bill by unanimous consent. I wish my colleagues all could have heard an eloquent speech made by the distinguished Senator from Florida about this in our caucus this morning. Ten years ago, on a bipartisan basis, we passed legislation providing not only a drug benefit to veterans but a cost containment mechanism for that benefit. We passed it unanimously. When we passed it, we basically said, we are going to allow the Government to negotiate the price for the VA, passing on the savings to veterans.

We have done that. And by most accounts, we have now cut the cost of veterans drugs in half. Senator Graham talked about being at a VA hospital in Florida on Veterans Day. He said: How much are you spending on drugs right now?

They said: $39 million, at that facility.

He said: If you couldn't negotiate, if you had no ability to negotiate on behalf of your veterans, what do you think the veterans would be spending?

They said: $71 million, almost twice as much.

How is it we can argue on behalf of veterans that we ought to keep their costs down but at the very same time, argue that senior citizens ought to bear the full cost of those drugs? You tell senior citizens sitting next to another one at a public meeting a year from now that we somehow just believed there was a distinction, that it was OK for seniors to spend twice as much as veterans.

I will fight every single day for the right of veterans to get the lowest cost for their drugs, but that same opportunity should be provided to every senior citizen as well.

So you are going to see an exploding cost. And you are going to see the misallocation of resources within that $400 billion, away from seniors and to so many other groups that I have to say even the most avid supporters of this legislation would say don't need it as much. Do healthy people who have access to an HSA really need help as much as a senior citizen who is struggling to pay their bills?

Isn't there a better way that we can allocate these resources to maximize the drug benefit for every citizen in the country today? The answer is, of course, yes. Why is it that we saw the need to exclude the single demonstrated ability on the part of a Federal program today, in the Veterans' Administration, to control the cost of drugs when it came to protecting drug prices for senior citizens? Why did we do that?

Unfortunately, that wasn't the only cost containment mechanism excluded. For all intents and purposes, we also took out reimportation. We don't have any real authority now to reimport lower cost American- made drugs into this country. I am told the reason we didn't is because the drug companies were overwhelmingly opposed. Keep in mind that a lot of these drugs are manufactured inside the United States, exported to be retailed outside the United States. So the irony is that drugs made inside the U.S. cannot be sold and brought back into the U.S. under this bill. I think it is a folly.

So the bottom line for those who are concerned about the exploding cost of an entitlement is this: I have news for you. You have a right to be concerned because we have not done anything to control costs in this legislation. We are going to woe the day we passed this without providing the same mechanism VA has to do just that. We are going to woe the day. We are also going to woe the day when we draw distinctions between seniors for absolutely no good reason. If it is good enough for veterans, it ought to be good enough for senior citizens across the board. But the drug companies don't like that either. Because they don't like it, it was excluded. So I make these points of order on four very specific points.

No. 1, we are not using that $400 billion we have allocated very well. We could do a whole lot better.

No. 2, there are specific programs in here that don't belong in here in the first place, have nothing to do with offering drugs to seniors; that are handouts to special interests and have no business in this bill.

No. 3, we do very little with cost containment. We exclude the most consequential leverage the Government has had in the past with a program as important as the VA. It passed unanimously on the Senate floor 10 years ago. Why is it excluded now? Because there was special interest opposition.

No. 4, we are going to woe the day when we put special interests ahead of the senior citizens in making these resource allocations in this legislation the way we have.

Mr. President, we can do better than this. We have to do better than this. I hope, on a bipartisan basis, we simply say we are going to ask that these provisions, these concerns be renegotiated.

I was one--and I will end here--who voted in favor of cloture. I am not desirous of extending debate unnecessarily and in a prolonged way. I wanted to make that point by voting for cloture.

But I must say, we expedite the day when we do the right thing with regard to the costs of drugs and with regard to a new system under Medicare. We expedite the day by voting against the motion to waive the point of order made by the distinguished majority leader.

So I hope those who claim fiscal responsibility as an important priority, those who want to maximize the bang for the buck for seniors in this legislation, those who are concerned about the distinctions we draw among senior citizens, will join with those who voted for and those who voted against cloture, against waiving this point of order.

I yield the floor.

I will yield time in just a moment to my colleagues. First, I will respond briefly to a point made by the distinguished Senator from New Mexico, Mr. Domenici. I am sorry he is not on the Senate floor. I wanted to respond to a comment he made. He said this was a frivolous point of order.

I remind my colleagues, this is precisely the point of order made by Senator Grassley and Senator Frist on two different motions last year. So I argue if it was appropriate last year, it would be appropriate this year. If it is frivolous this year, it would have been frivolous last year. Yet the distinguished Senator from New Mexico, and I might add, of course, my friend the distinguished Senator from Oklahoma, both voted in favor of the points of order last year when that precise point of order was made.

I ask unanimous consent that the rollcall involving both points of order be printed in the Record at this time.

I yield 10 minutes to the distinguished Senator from Florida.

Mr. President, how much time remains on either side?

Mr. President, this is our last chance to do something to control the exploding costs that are absolutely guaranteed to occur for seniors and for the Government unless we do something else. This is the last chance.

There are those who have just said this will kill the bill. Just to make sure everybody understands, this has nothing to do with killing the bill. What happens under Senate rules is that we will go back to S. 1 as an amendment to H.R. 1. That is the pending business. That was voted on, by the way, 76 to 21. So we go back, if we sustain this point of order, to the Senate-passed bill, which passed 76 to 21. We can send it to the House and ask for bipartisan support.

The distinguished Senator from Pennsylvania was saying that one of the concerns I raised was our ability to contain costs. And yes, he is right, we had an early bill that had the provision, this egregious provision in it prohibiting the Government from getting the best deal, just as Secretary Thompson has done with Cipro, just as we do with the Veterans Administration.

What he did not tell our colleagues is that every subsequent bill-- the last two bills we have introduced--did not have this provision in it. Why? Because we understand what an incredibly valuable tool it has been for the Veterans Administration.

So, Mr. President, if you want to control costs, if you want to make sure the senior citizens of this country have the ability to get the lowest price, if you are absolutely as concerned, as you say you are, about controlling the costs of this program, then you are going to vote to sustain this point of order.

This is our last chance.

I yield the floor.

I yield the remainder of my time.

Mr. President, with all due respect, while listening to some speakers, including the previous speaker, I would ask what bill they have been reading. It seems that they are referring to a bill which is not the conference report before us today. They are discussing problems that might occur in the future. But the problems described are based on some other bill, not the bill before us, not the conference report.

The fact is that this legislation provides $400 billion for seniors. That is a $400 billion entitlement for U.S. seniors that they do not have today. I think we owe it to our American seniors to give them this $400 billion new entitlement for drug benefits. We are on the brink. We are close to passing it.

In each of the last several years, we have come close but we were not able to finish the job. I do not think we are going to have this opportunity again. I do not think the Budget Committee is going to set aside $400 billion again, particularly with the increasing budget deficits and current account deficits. We will not have this opportunity again.

This is a good bill. No bill is perfect. We are 535 Members of Congress. There are 535 people who have to work together to get something passed. This product before us today reflect this reality. It is $400 billion for seniors.

It is also much closer to the Senate bill than the House bill. I hear complaints that the conference report is not nearly as good as the Senate bill. These critics have not read the conference report. The conference report is better than the Senate bill in many respects. For example, dual eligibles. The conference report covers low-income dual eligibles through Medicare. I think most Senators agree this is a better policy than what was in the Senate bill.

We also have a solid fallback. It is wrong when Senators say there is no guaranteed prescription drug benefit to seniors. It is guaranteed in this bill. Fee for service is held harmless in this bill in all respects. So a senior can always get a standard prescription drug benefit under this bill. Whether one takes it from a PDP, a private drug plan, a PPO, or the fallback, this benefit is guaranteed for all seniors. Seniors will get their prescription drug benefits in this bill. It is guaranteed.

As I mentioned earlier, this benefit is an entitlement. It is a $400 billion entitlement expansion we have tried to pass in past years but are only able to get passed now.

I have heard some Senators claim that this is not the Senate bill because it contains something called premium support, and it has a so- called slush fund. Let me remind Senators, the so-called premium support is extremely watered down from what was in the House bill. It is time limited to 6 years. Only six cities will be demonstration projects. Low-income seniors in each of those six cities will be held harmless. They get full protection. In addition, the premiums for those who are not low income are limited to a 5 percent change. Fee for service Medicare is held harmless in all respects in those six cities where there may be a demonstration project. They are held harmless in all respects, except the

Part B premium may go up by no more than 5 percent. Any other change in these demonstration areas has to be enacted by Congress--enacted by to Congress to extend, enacted by Congress to expand, enacted by Congress to change.

What has happened in the past when we have had these demos? They have been repealed. They have not been extended. In 1997, Congress set up premium support demonstration projects. Congress then rushed in to repeal them as quickly as they possibly could. They were gone. The same will happen here. Do my colleagues know why? Because the dollars provided to private plans in the premium support demonstration areas will be much less than in other parts in the country. The private plans will not be able to survive.

Mark my word, those plans, those physicians, and those providers in the demonstration MSAs are going to come to Congress and ask us to repeal it.

Regarding this so-called $14 billion slush fund, $12 billion was in the Senate bill, which seventy-six Senators voted for. This is just $2 million more, and it does not come out of the $400 billion for drug benefits. That $400 billion for drug benefits is still there, but the conference report does have $2 billion more than the Senate bill, for which 76 Senators voted.

To close, I will return to my main point. This is a very good bill. We have the opportunity now to provide prescription drug benefits for seniors. We are not going to have this opportunity in the future. Beneficiaries have waited a long time for this benefit. This bill is much closer to the Senate bill than it is to the House bill. If we do not pass this now, I must ask you, what are we going to tell our seniors when they say to us, Mr. Senator, Ms. Senator, you told us you were going to give us prescription drug benefits but you found some reason to say no and you voted against it and did not give it to us; why did you give us the help you promised?

We have an obligation to help our seniors pass this legislation.

Mr. President, there is not a lot to say in 1 minute. I will do the best I can.

Essentially, we have $400 billion in prescription drugs for seniors. I do not see how in the world we can let that moment pass by.

It was said before that there are not enough low-income benefits for seniors. The previous speakers said that. They are wrong. One-third of our seniors will get such benefits under this bill that 95 percent of their benefits will be paid for. One-third of American seniors will find that 95 percent of their benefits are paid for. The allegation is there is no help for low-income seniors. That is just flat wrong.

There were a lot of other statements made by those opposed to this legislation that are flat wrong. Some say 10 million will be affected by premium support. Flat wrong. We asked CBO what the number is. They said 600 to 700 to 1 million.

Some people say 6 million were going to be hurt by Medicaid. Flat wrong. It is much less than that.

I strongly urge Senators to look at the facts. Vote for the bill and particularly vote against the points of order because those are mere technicalities. They don't go to the substance of the bill. It is important to pass this legislation now for seniors.

Mr. President, make no mistake about it, the issue before us--that is, whether a point of order should be sustained--is a vote about whether or not we provide prescription drug benefits to seniors. It is that simple.

If we fail to waive this point of order, this bill is dead, certainly for this year, probably for the next Congress. The very narrow issue before us is whether or not it is ``OK'' to spend roughly $4 billion more than the Budget Act previously allocated for the year 2004.

It is important to remember that this bill is totally within the Budget Committee's allocation for the 10-year period of $400 billion. So the narrow question is, Is it within the allocation for the year 2004?

Now, a couple points here. In 2004, dollars will be spent based upon various pieces of legislation. There is already legislation passed which allocates dollars for 2004. So the conference report itself does not break the 2004 cap, but, rather, it is the accumulation of the dollars in this bill plus previous bills which total up to exceeding the cap allowable for 2004 under the Budget Act by about $4 billion.

So the real question we are asking ourselves is, Are we going kill this bill--a bill for which the full $400 billion allocation does not violate the Budget Act--are we going to kill this bill on a mere technicality, a technical trap that any spending in 2004 has the effect of bringing this bill down?

Now, it makes no sense to do that because, clearly, we want, in this bill, to spend some money in 2004. What about the doctors in 2004? What about the hospitals in 2004? Are we to tell doctors and hospitals, because of a mere technicality, they do not get reimbursed in 2004? We will suspend payments for a year, but then, beginning in 2005, we could pick them up again? I do not think so.

I don't know what Senators are going to say to their seniors back home who vote to sustain the budget point of order to kill the bill because of some spending in 2004 for doctors and hospitals, denying them a prescription drug benefit because they killed the bill. I do not think many people in this body would like to do that.

This is a good bill. It is unfortunate that at this stage of the debate, where we are past the listening stage, an awful lot of Senators are not listening to each other. Rather, they are being rhetorical, they are making their rhetorical points, and they are trying to persuade I don't know who, but some people to certain points of view.

But if you look at the mere language of the bill, it is a good bill. It provides a prescription drug benefit for seniors, a huge benefit for low-income seniors. One-third of all seniors, under this legislation, are categorized as low-income, and they get the benefits of this bill.

We also added in more money for what is called the Medicaid wrap to help lower income folks even more than earlier was the case. We also added in money to help keep retiree coverage.

I think it is important to note that companies generally are reducing retiree coverage in America, irrespective of this bill. We have put in $88 billion to companies for retiree coverage, which means, clearly, that those companies are more likely to keep and retain coverage; that is, this legislation intends to encourage the retaining of coverage, not discouraging it.

So if this bill goes down, there are going to be more retirees who will lose their coverage. Senior citizens will not get the benefit of a drug benefit, particularly the lower income seniors will not get the benefit, and we will be doing our seniors a terrific disservice.

So tomorrow is another day. We can improve upon this bill. If the bill is killed, as it will be if this point of order is sustained, those who hope, ``well, maybe we can do better next year,'' I think should remember the admonition that a bird in the hand is worth two in the bush.

Next year is a very political year. It is 2004. It is a Presidential election year. It is almost impossible to predict the dynamics of next year. It depends on the economy. It depends upon foreign policy. It depends upon the Presidential election politics. And we all know that usually in a Presidential election year not much legislation of consequence passes. Usually, there is a lot of talking but not a lot of action.

I do not think we can afford passing up giving seniors a chance to get prescription drug benefits. So I urge Senators, on the technical matter before us, to vote to waive the point of order because it does not make much sense to me to let a technicality kill this bill.

Mr. President, I rise today to express my opposition to the conference report for H.R. 1, the Medicare Prescription Drug and Modernization Act of 2003.

For far too long Medicare has lacked a prescription drug benefit. The lack of this benefit has been the gaping hole in the Medicare safety net. I have consistently supported efforts to establish a meaningful Medicare prescription drug benefit. I supported S. 1, the Prescription Drug and Medicare Improvement Act of 2003, because it would have been an important step forward in meeting the prescription drug needs of seniors. I am extremely disappointed that instead of making improvements in the Senate-passed bill, the conference report is now a false promise to our seniors. Mr. President, the conference report contains too many flaws to warrant passage. The conference report lacks appropriate prescription drug coverage for seniors. Indeed, many seniors will be worse off under this proposal. The conference report also weakens the existing Medicare entitlement program.

The prescription drug coverage in this legislation is simply not comprehensive enough. Too small an allowance is provided within the legislation to establish a meaningful prescription drug benefit for seniors. Instead of reducing the size of the coverage gap, the conference report would require that seniors pay for all of their drug costs after their total drug spending reaches $2,250. Despite continuing to pay their premiums, they will not receive any additional support until they spend about $5,000. This gap is about twice as large as the gap that was contained in the Senate-passed bill. Why should seniors have to continue to pay premiums when they do not receive any benefits if they are in the gap? This coverage gap must be filled.

Mr. President, for too many seniors in Hawaii and across the nation, prescription drug coverage will be worse under the provisions in the conference report. Seniors who are currently provided prescription drugs through their state's Medicaid programs will have federally mandated copayments imposed on them. For example, Hawaii's seniors who have incomes of less than 100 percent of the poverty level and obtain their medications through Hawaii's Medicaid program will be worse off under this plan. They will now have to pay copayments to get their prescription medication. Hawaii's seniors are not alone. The Center for Budget and Policy Priorities believes that most of the 6.4 million individuals that have dual eligibility for Medicare and Medicaid will be charged more under the conference agreement for medication than under existing law.

I am afraid that too many low-income seniors will not be able to afford even these meager copayments. Those who cannot meet these copayments will be denied access to the medications they are currently being provided. Again, they will go without the treatment they need. In addition, the financial burden that the conference report places on states may lead to a reduction in other Medicaid services that states will no longer be able to afford, because of the substantial share of prescription drug costs that states will have to pay the federal government for seniors who are eligible for Medicare and Medicaid.

Mr. President, I am also concerned about the millions of retirees that will lose their existing coverage. We have seen over the past few years that there has been a disturbing trend of reducing benefits for retirees. Creating this voluntary benefit will only accelerate this trend. The intent of the legislation is to expand prescription drug coverage for seniors, not merely to shift the financial burden of existing coverage to the federal government. Many seniors will be forced to rely on Medicare, which will provide a less generous benefit than what they currently enjoy. It is estimated that 17,850 Medicare beneficiaries in my home state of Hawaii will lose their retiree health benefits as a result of the enactment of this legislation. If Medicare beneficiaries lose their employer-based coverage, they may have to pay more for a Medicare drug benefit that provides less comprehensive coverage. Despite the subsidies included in the conference report to encourage the continuation of existing coverage, it is estimated that approximately 2.5 million people will lose their coverage.

Mr. President, I along with Senators Warner, Allen, Mikulski, Sarbanes, Johnson, and Corzine requested that the conferees include our bill, S. 1369, in the conference report to ensure that present and future federal retirees receive the same level of prescription drug coverage. The government's Federal Employee Health Benefit (FEHBP) program for its employees and retirees stands as a model for all employer-sponsored health care plans. Our legislation would protect prescription drug benefits for federal retirees by ensuring parity for these benefits with other FEHBP subscribers. The other body approved companion legislation, H.R. 2631, on July 8, 2003. While the Medicare reform bill includes subsidies and tax credits to employers who retain existing drug benefits for their retirees, such incentives provide no guarantee of the FEHBP drug benefit for the government's own annuitants. If FEHBP is the model for this reform, the federal government must not drop or reduce drug benefits for retired FEHBP enrollees. Our legislation sends a message to other employer-sponsored plans that the federal government stands behind its commitment to retired workers. I will continue to work to bring about the enactment of this bill.

Mr. President, the cost containment provisions in the legislation provide a fast-track legislative process to cut Medicare benefits if general revenue funding for the entire Medicare program exceeds 45 percent. This arbitrary process is included while more meaningful provisions to control the costs of prescription drugs were left out. The conference report prevents the federal government from using the bargaining power of 40 million senior citizens to

bring down the cost of prescription drugs for the Medicare program.

Mr. President, the conference report weakens Medicare. It imposes means tests for Medicare Part B premiums and for low-income subsidies for the prescription drug benefit. This is the beginning of the end of Medicare being as a universal benefit. This is the first step towards means testing other parts of the existing Medicare program. Means tests place greater burdens on seniors. They also create administrative difficulties for the Centers for Medicare and Medicaid Services.

Even more objectionable is the assets test used to determine the low- income subsidies for the prescription drug benefit. The assets test is completely unrealistic. According to Families USA, the assets test will deny subsidies to 2.8 million very low-income seniors if they have even a small amount of assets. For example, the assets test disqualifies people who have household goods and personal effects worth more than $2,000. Medicare is an entitlement and participants should not be subjected to these demeaning means tests. Additional assistance should not be denied because they happen to have set money aside for future expenses.

Mr. President, this legislation also threatens existing Medicare benefits because it includes billions of dollars for subsidies for private plans. This increases premiums for seniors, raises government costs for health care, and damages the solvency of the Medicare trust fund.

Mr. President, I also want to express my disappointment that language similar to an amendment that I had offered, which was accepted as part of the manager's package for S. 1, was not included in the conference report. While I thank Chairman Grassley and ranking member Baucus for their assistance with this provision, it was not included in the conference report. My amendment would have allowed my home state of Hawaii to benefit from the increase in Medicaid disproportionate share hospital (DSH) payments included in the bill. Medicaid DSH payments are designed to provide additional support to hospitals that treat large numbers of Medicaid and uninsured patients. The Balanced Budget Act of 1997 (BBA) created specific DSH allotments for each state based on their actual DSH expenditures for fiscal year 1995. In 1994, the State of Hawaii implemented the QUEST demonstration program that was designed to reduce the number of uninsured and improve access to health care. The prior Medicaid DSH program was incorporated into QUEST. As a result of the demonstration program, Hawaii did not have DSH expenditures in 1995 and was not provided a DSH allotment.

The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 made further changes to the DSH program, which included the establishment of a floor for DSH allotments. However, states without allotments were again left out. Other states that have obtained waivers similar to Hawaii's waiver have retained their DSH allotments. Only two states, Hawaii and Tennessee, do not have DSH allotments.

The conference report provides that states without DSH allotments could receive additional assistance if their waiver was terminated or removed. While this may possibly benefit Tennessee, this language will prevent Hawaii from obtaining any additional Medicaid DSH support that is included in this bill. The conference report includes an additional $6.35 billion in Medicaid DSH relief to the states. Hawaii does not receive any of these funds. Hawaii's hospitals are struggling to meet the healthcare needs of the uninsured. Hawaii cannot continue to be left out. Additional DSH payments would help Hawaii hospitals to meet the rising health care needs of our communities and reinforce our health care safety net. All fifty states need to have access to this additional Medicaid DSH support. I will continue to work to correct this inequity.

Mr. President, as I said at the start of my remarks, this legislation is a false promise. Even if this conference report is enacted, we will need to enact follow up legislation to address the flaws in the bill. We will also have to repeal several of the provisions that weaken the existing Medicare program. Many have said this is an important step forward in the Medicare program. I disagree. This conference report takes too many elderly Americans backwards in terms of their benefits to constitute forward progress or forward thinking. Many people, particularly seniors, will eventually come to the conclusion that I have reached on the legislation and Congress will regret this rush to judgment. After reviewing the provisions in this legislation, I am disappointed that this bill is a false promise that undermines the existing Medicare program. Thank you, Mr. President.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2631) to provide that the actuarial value of the prescription drug benefits offered to Medicare eligible enrollees by a plan under the Federal employees health benefits program shall be at least equal to the actuarial value of the prescription drug benefits offered by such plan to its enrollees generally.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on the bill under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, last week the House passed H.R. 1, the Medicare Prescription Drug and Modernization Act. Part of this bill recognizes and seeks to address one of the core concerns regarding adding a prescription drug benefit to Medicare; that is, with the implementation of such a benefit, lead employers who currently offer prescription drug coverage to their employees to stop doing so. Obviously, we do not want to put a government entitlement plan into operation and drive the private plans out of existence, or the costs over the long term to the taxpayers will go off the charts.

The bill addressed these concerns by providing subsidies to private employers and unions to encourage them to maintain prescription drug benefits for their retirees. With the help of the gentleman from California (Chairman Thomas), we were able to clarify that the Office of Personnel Management would also be eligible for these subsidies, something that I believe will lead to lower FEHBP premiums for all enrollees. However, I think it is necessary for us to go one step further.

Coming from northern Virginia, I represent over 50,000 Federal employees and retirees. As chairman of the House Committee on Government Reform, I am responsible for issues pertaining to Federal workers and retirees, along with the gentlewoman from Virginia (Mrs. Jo Ann Davis), the chairwoman of the Subcommittee on Civil Service. Thus, not only am I acutely aware of the challenges the Federal Government faces as an employer to recruit and retain quality employees, I am also very aware that Federal retirees are sometimes treated differently than current employees in ways that are not always equitable.

For example, current Federal employees are allowed to deduct their health insurance premiums from pretax dollars, but Federal retirees are not. I look at this issue from an employer's perspective. Remember: In addition to the large number of retirees already in FEHBP, 50 percent of the Federal workforce is eligible for retirement in the next several years. With H.R. 2631, we are telling the people that we are going to live up to our end of the bargain. We are saying that with regard to prescription drug benefits, Federal retirees will continue to be placed on par with current employees, that OPM will not reduce their benefits as opposed to the benefit offered to current employees.

In crafting H.R. 2631, I thought it was important to continue to allow OPM as much flexibility as possible in negotiating future prescription drug benefits. And for the record, Senator Akaka, my colleague in the other body, has offered similar legislation on the other side of the Capitol. Thus, H.R. 2631 does not require OPM to offer a specific dollar amount of coverage that has to be maintained; they can raise or they can lower benefits as they see fit through negotiations with individual plans, but they have to do it for all FEHBP enrollees to treat them the same, regardless of their age. In essence, we are simply telling OPM to continue to do what they have always done.

Mr. Speaker, in closing, I believe H.R. 2631 sends an important message to both Federal retirees and current Federal employees. It will be a helpful tool in our efforts to build and retain an effective Federal workforce and give these employees a career path and retirement they can depend on. Therefore, I urge all Members to support the passage of H.R. 2631.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield such time as she may consume to the gentlewoman from Virginia (Mrs. Jo Ann Davis), chairwoman of the Subcommittee on Civil Service.

Mr. Speaker, I yield such time as he may consume to the gentleman from Virginia (Mr. Wolf), a co-sponsor of this legislation and a leader in the fight for Federal employees' rights.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I would like to help the gentleman solve the puzzle. The fact of the matter is there are 1.25 million Medicare-eligible Federal employees and annuitants. Only 388 retired Members of Congress are in FEHBP. The majority of retired Members of Congress do not even take FEHBP. They are in other plans or have opted out of this.

The fact is they are eligible for that by virtue of their service here. This legislation was not crafted by Members looking after themselves. It was crafted with the help of the National Association of Retired Federal Employees. It was difficult to write out the 388 retired Members who happen to use this, which is a minority of the retired Members. Most Members do not use FEHBP. I want to clarify for the gentleman that in no way, shape or form was this for Members. In fact, this was called to our attention by the National Association of Retired Federal Employees. I do not know any other way to get at the problem.

I yield to the gentleman from Ohio.

Mr. Speaker, all it does is ensures that Federal retirees will be treated the same as current Federal employees in regard to the Federal Employee Health Benefit plan. Currently, they are not in some areas. The feeling is that with this other plan, that retirees could have a different benefit program and that creates some difficulty. So we are trying to even this up and give that assurance.

Most Members of Congress do not opt for FEHBP. That is what the record shows after this is done. So that is kind of a misnomer. It is a small percentage that ends up in FEHBP when they retire. A few do, I grant to the gentleman; but that is not the purpose.

Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania (Mr. Murphy).

Mr. Speaker, how much time remains on each side?

Mr. Speaker, I yield 3 minutes to the gentleman from Virginia (Mr. Moran).

Mr. Speaker, I yield myself such time as I may consume to respond that The New York Times chart is absolutely wrong when it says Federal employees have no deductible for their prescription drug coverage. What they get is, they get a set amount of dollars, and it is a cafeteria style. They can spend it on prescription drugs, preventive care, HMOs or whatever. So there is certainly a cost to that. But the way the system is set up, it is a total health care program.

So when the gentleman gets up and quotes this New York Times article, it is entirely misleading. Of course there is a cost to Federal employees opting for that over something else.

The other underlying part of the bill that this body passed 2 weeks ago is the fact that we did not want to drive private programs out of existence. Should we drive the 60 percent of seniors that are currently satisfied with their prescription drug program out of existence, then the Federal Government ends up picking up the total tab, and the cost rises significantly.

We are setting an example with this legislation that we are, in fact, making sure that the FEHBP program is not driven out of existence; that we maintain the parity it has always had with existing Federal employees. And this program ought not be diminished. It is the same thing that we have incentivized in the program passed 2 weeks ago by the subsidies that are in that program as well.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume, and let me just say in all candor that we have 1.25 million FEHBP employees covered by this, with 388 former Members of Congress. The vast majority of former Members do not even sign up for FEHBP, those who would be eligible for the plan passed by this body 2 weeks ago, and do not even use FEHBP, which is a more comprehensive option for retired Federal employees, including Members of Congress. So this really has nothing to do with Members of Congress.

The other question I pose is, why, when my colleagues on the other side of the aisle controlled this body for 40 years, did they not bring up any prescription drug benefit plan before this body for a vote? We have passed plans now the last 3 years, only this time has the Senate passed a plan as well, and we are giving meaningful relief to seniors who want it. It is a voluntary plan. It is not a perfect plan by any means, but it is within the budget limitations passed by this Congress. Their plan was outside the budget limitations.

I think we have to get real. I think we have a good deal for Americans in the plan that we passed 2 weeks ago. As we work with the Senate, we will try to refine it and make it better. I think this legislation today makes it better as well, recognizing that as we look at our Federal workforce, trying to make sure we have the right incentives to attract and retain the best and the brightest to fight for homeland security, to fight the battles for this country, to develop cures for cancer, that we are treating our employees well.

So I am very proud to support this legislation. I think it enhances and goes with the underlying theme of the legislation passed 2 weeks ago, and that is we do not want to drive current prescription drug benefit plans out of existence, which, if we do not pass this, we will be setting a terrible example here at the Federal level.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume to say two things. This vaunted Senate bill that passed a couple of weeks ago, Senator Akaka has also offered legislation in the Senate for their legislation as well. I think whatever happens under whoever's bill that passes, we want to ensure that we do not get that separation between the retired Federal employees and current employees in their health benefit premiums, and that is what this bill is about.

We had a spirited debate 2 weeks ago on a health benefit plan, and I do not think we need to continue to air this today. But I think this is good legislation, it is good protection for our retired Federal employees, and I urge my colleagues to support this legislation and thank them for the bipartisan support this bill is getting today.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield back the balance of my time.