Prevent Health Care Fraud Act of 2009

Mr. President, I thank my colleague from Oregon for his good words tonight and for his approach in trying to do things in a bipartisan way.

There are some good things in this jobs bill. I think the issue we on this side of the Chamber have had is we would have liked to have offered some amendments. The 18 million people I represent in Florida expect that we have the opportunity to offer amendments, to bring up ideas, good ideas, and let those ideas rise and fall depending upon their merit. Unfortunately, we did not have the opportunity to have amendments. My colleague, the Republican leader, said earlier what was done on the majority side was something called filling the tree. What does that mean? It means we do not have the opportunity to bring forward our good ideas. The people of Florida, the people of all of our States, expect that we get to do that. So while there are some good things in here, it is a shame that we could not have made this bill better.

What I really want to speak about tonight is the debate Americans are having around their living room tables and around their kitchen tables about this health care bill. This is a trillion-dollar bill that is being discussed in this country and that we now hear is going to go through the House of Representatives and possibly come back to this Chamber through a procedure called reconciliation.

It occurs to me that what we are dealing with here is a little bit of fantasy land. Why do I say that? This weekend, I took my kids to see ``Alice in Wonderland.'' That is a famous story. It occurred to me that we are creating our own sort of wonderland here in the Senate.

A lot of things have been said about this health care bill, what it does and what it does not do. I thought tonight it would be important to go through the representations that are being made to the American people as to whether we should pass this health care bill. Let's go through all the things we have heard, things that President Obama has said, things that Members of the majority have said in this Chamber as to why we should pass this health care bill.

Let me first say that everybody believes we need health care reform in this country. We have 4 million-plus Americans who do not have health insurance. Nearly 4 million Floridians do not have health insurance.

We know the cost of health insurance is too high for those Americans who have health insurance. In the last 10 years, health insurance costs have risen by 130 percent. That is unsustainable. It is something that is afflicting the people of Florida and all across this country.

It is hard to make ends meet when your salary may be going down or you may have lost your job but your health care costs continue to go up. So there is no debate within this Chamber that we should do something. Of course, we should do something. The debate is about what we should do.

On this side of the aisle, we would like to take a step-by-step approach. We would like to go after the cost of health care. We would like to increase competition in health care so that costs could actually go down. We would like to put patients back in charge of their health care purchasing decisions.

We know if the consumer is back involved the price of health care will go down. But we find ourselves having to vote on this massive new government entitlement program, a program that I cannot support because I do not believe it will be in the best interests of Floridians.

Last Monday I was down in South Florida, down in Miami and Fort Lauderdale. In Fort Lauderdale I had the opportunity to have a townhall meeting where we specifically talked about health care. In that meeting I had many Floridians come up to the microphone and ask questions. Most of them were bewildered about this plan. They wanted to know why we cut a $\1/2\ trillion out of Medicare. Medicare is health care for seniors. Why would we create a new program by cutting a program we have now that is already in financial trouble?

We know in the next 7 years Medicare is going to have its own solvency problems. Why would we take money out of health care for seniors--more than 3 million Floridians in that program--to start a new program?

They want to know why we are going to raise taxes on medicine and health care devices which we know will increase the cost of health care. They want to know why we are creating a $1 trillion new entitlement program when we cannot afford the entitlement programs we have, when we cannot afford the $12 trillion debt we are saddling upon our children and our grandchildren.

So with that, I would like to go through some of the myths, some of the myths that have been created in this wonderland I spoke about before, and try to debunk those myths and say what is in this bill and let the facts speak for themselves.

The first myth--and the President likes to say this; he said it again today in a rally--if you like your health insurance, you can keep it under his proposal. Well, it is simply not true. The Congressional Budget Office has said between 8 and 9 million people who would be covered by employment-based plans under current law would not have the offer of such a proposal. Why is this going to happen? Because under the incentives and penalties this bill creates, businesses are going to drop health insurance for their employees and put them into the government-subsidized system.

So for those 8 or 9 million Americans, they are not going to get to keep the health insurance they have now. They are not going to be able to keep the health care they want.

Rick Foster, the CMS Actuary--and those are the folks who administer Medicare and Medicaid--says the number could even be higher. He concluded that 17 million people will lose their employer-sponsored coverage. Seventeen million people will not be able to keep the health care they enjoy today. So what the President says is simply not the case.

Second, we know under this myth that you will be able to keep the health care if you like it, that people who have Medicare Advantage, Medicare Part C, a lot of them will not be able to keep their program either. Medicare Advantage is a promise that offers extra benefits for folks on Medicare.

If you sign up for it, you get wellness benefits, you get hearing benefits, you get dental benefits oftentimes. People like it. We have more than 1 million people in Florida on Medicare Advantage. This bill cuts $120 billion out of Medicare Advantage.

Now, I am not sure how it is going to impact Florida. There was this Florida fix that was going to be an off-ramp, not an exit. But over several years they would be in the same situation as the rest of the folks in America. I do not know whether that is going to make it into the final bill. But I do know we are going to cut $120 billion out of Medicare Advantage. When that happens, according to Rick Foster, the CMS Actuary, lower benchmarks will reduce Medicare Advantage rebates to plans and thereby result in less generous benefit packages.

He estimates in 2015, enrollment in Medicare Advantage plans would decrease by about 33 percent. So for many folks, they are going to get dropped by their employer and not be able to keep the health care plan they have now. For many folks on Medicare Advantage, they are going to get dropped as well, as much as 33 percent by 2015. You are not going to be able to keep the health insurance you have now.

We also know these mandates that exist in this bill are going to change your health insurance policy. If the government deems that your health insurance plan does not pass muster, they are going to mandate that your health insurance plan change.

Now, you may like your health insurance plan the way you have it. You may have a high deductible. You may have bought catastrophic insurance. You may not want to buy a comprehensive health insurance plan that is soup to nuts; you may only want certain things covered.

Well, under this plan, under this bill, there are going to be certain mandates put in place, and you may not be able to keep the type of insurance you have. So for those three instances alone--for people who are going to get dropped by their employer and get forced into the public plan, for people who are Medicare Advantage, and for people who have a certain type of insurance plan--they may not be able to keep it.

So we know, unfortunately, what the President is telling us about this bill is not true. Myth No. 1 is busted.

Myth No. 2: Your health insurance premiums will go down. Why did he get involved in this whole debate to start with? What was told to the American people during the Presidential campaign in 2008 and since the time that we have discussed this health care plan? That we were going to lower the cost of health insurance for most Americans.

That is not going to happen under this plan. We are not going to lower the cost of health insurance. In fact, for some Americans the price is going to go up. Table 1--I hate to get into the weeds, but let's look at the facts.

We have the CBO report I cited earlier. There is a Table 1 on page 5 of that Congressional Budget Office report that analyzes this plan. It goes through what people have in the current insurance market.

There are about 25 million people in the small group market. There are 134

million people in the large group market. That is 159 million Americans who have health insurance. So the small group market, it is estimated the cost increase or savings is between a 1-percent increase or down 2 percent.

For those in the large group, it is zero to potentially minus 3 percent. So this is not reducing the cost of health insurance in any meaningful way. For individuals who are out there who are not in a group, who are purchasing insurance individually, the Congressional Budget Office says their cost of health insurance will go up 10 to 13 percent.

So the whole very reason, the primary reason we are about the business allegedly of debating health care and passing this big bill was to lower the cost of health insurance for most Americans. Not only is it not going to lower the cost of health insurance for most Americans, it is going to increase it for those who are in the individual market.

I ask unanimous consent that Table 1 be printed in the Record.

So you are not going to be able to keep your health insurance, for a lot of Americans, if you like it, and the cost of health insurance is not going to go down. Those two myths have been busted.

Myth No. 3: This plan, the Democratic plan, will lower costs, lower the cost of health care overall. We have all heard about--and I said before the rising cost of health care, 130 percent in the past 10 years. There is an expression, ``bending the cost curve down,'' making sure that we can get control of costs. This plan is not going to do that. This plan does not have mechanisms, true mechanisms in it to really control costs.

In today's Washington Post, Robert Samuelson takes on the President's claim that his plan will control costs.

In this article, he talks about the fact that when people get insurance they use more health services; that spending rises and by the government's latest forecast health spending goes from 17 percent of the economy in 2009 to 19 percent in 2019.

According to the CMS Actuary, he estimates overall national health expenditures under this bill will increase by an estimated total of $222 billion during 2010 to 2019.

It is also going to increase the government's share of health care spending. According to the CBO, under the legislation, national outlays for health care would increase by $210 billion over the next 10 years. So we are just chasing our tails. We are going to put a lot more money into health care, but we are not going to reduce costs.

How could we reduce costs? How do we get at the problem of increased health care? Well, we could try to foster more competition among health insurance companies instead of creating these subsidies, which is going to plow more money into the insurance companies.

We could make the insurance companies compete across State lines. That is one of the ideas the Republicans have brought forward. We also could go after meaningful lawsuit reform. There is one estimate we would save more than $50 billion a year if we had meaningful lawsuit reform.

My colleague, Senator Coburn from Oklahoma, talks about the fact, being a practicing physician, that doctors are engaged in defensive medicine, and when thousands of kids across this country this year get hit in the nose with a baseball they are going to show up at the emergency room. Instead of just watching the patient and making sure the kid is going to be OK, they are going to order a CT scan even if one is not necessary because that has become the standard operating procedure in order to protect the doctor from lawsuits.

The CBO says if we had real medical malpractice reform, we could save as much as $54 billion over the next decade. We also do not have transparency. Here is the essential problem with health care costs. We do not know what anything costs.

In the next couple of days my wife and I are going to be fortunate enough to have our fourth child. She is due any day now. When we go to the hospital, we are going to get back--after that baby is born, just like we have done with the last three kids, we are going to get back a bill. It is going to be page after page after page of things that we cannot understand.

At the bottom of the bill, we will pay some small fraction because we have good health insurance in the Senate. We will pay some small fraction of the total bill, and we will never question the pages and pages and pages of line items of information we do not understand.

We will not because we do not have to pay for it, and we, as consumers, have been removed from the transaction in health insurance because of third-party payers, whether it be Medicare, Medicaid, or insurance companies. We are not involved in that transaction.

Now, let me give you a different example. If we had to look at that bill because we were responsible for a portion of it because we were given, say, a tax credit to go out and buy insurance, and we were trying to get the most bang for the buck, and they tried to add $75 for a bedpan or gauze or for Band-Aids, Mrs. LeMieux would not pay for that. Mrs. LeMieux would be in there saying: Wait a minute. I can go to Target and I can get Band-Aids for $1.50, not $75.

I guarantee you that the men and women of this country, if they really had to look at those bills because they really had to pay them, we would not have these exploding costs. We also would not have all of the cost shifting that is going around.

The dirty secret about health care is that if I have insurance, my full payment on insurance or close to the full payment is going to pay for the Medicare patient and the Medicaid patient because Medicare and Medicaid do not pay enough for the services they render.

The hospitals cost shift all the money around. At the end of the day, we don't have a transparent system or a market-driven system. What we should do is give every American who needs it a tax credit to buy health insurance on their own. If they were out in the marketplace, that would lower cost, because competition would reign and they would insist on bang for their buck. But that is not in this bill. We know now that, one, you will not be able to keep, in a lot of cases, your health insurance, if you like it. We know, two, it is not going to reduce your cost of health care. And we know, three, it will not lower the cost of health care in general. Those myths have been busted.

Let me go to the next one, myth No. 4: The Democrats' plan will reduce the deficit. We have heard this estimate that over $100 billion is going to be saved over the next 10 years. Not true. The way this is scored or evaluated by the CBO is that whatever you send them, they have to give you an answer back on the confines and the specifications of what you sent. So the Democrats' bill has 6 years of spending or benefits and 10 years of taxes. If they have 10 years of taxes and only 6 years of spending, then they can get to a situation where the CBO will come back and say: It is going to reduce the deficit. But if you compare apples to apples, spending to deficit, if you compare spending to taxes, we know it is going to run a deficit. You cannot create a new entitlement program and not run a deficit. It is going to cost us, by some estimates, more than $400 billion over a 10-year period, in the first 10 years, and $1.4 trillion in the next 10 years. We know that myth is busted. It is not going to reduce the deficit.

Let me also say this is going to be a budget buster for States. The States, unlike the Federal Government, have to make ends meet. The States have balanced budget requirements. As we increase the requirements of Medicaid, which this bill does, then we will be putting increased burdens upon our States. Our States are going to have to find more money to put into Medicaid. They can't print money like the Federal Government. They can't spend more than they take in. What is going to happen? They are going to have to cut other programs, or they will have to raise taxes. What is going to get hurt? I can cite the example of Florida where they are suffering under a huge and emerging Medicaid problem. Medicaid and Health and Human Services is the No. 1 portion of the budget of the State of Florida. It grows every year. So what loses out? Education, money for teachers and schools, law enforcement, protecting the environment, and economic stimulus. Florida has to live

within its means, unlike the Federal Government.

This is not a Republican or Democratic issue. Governors of both sides of the aisle are very concerned about the increased mandates placed upon States. Governor Phil Bredesen of Tennessee called this bill the mother of all unfunded mandates. The head of Washington State's Medicaid Program believes that States facing severe financial distress may say they have to get out of the Medicaid Program altogether.

CBO released its first estimate of expected discretionary spending under this bill, confirming that $10 to $20 billion in discretionary spending over the next decade will be used to implement this legislation. We are going to spend $10 to $20 billion to implement this bill; $5 to $10 billion to the IRS and to Health and Human Services. Also in terms of this topic, of looking at how the plan will reduce the deficit, which it will not, we know this is going to be a $1 trillion program over time. With rare exception, when this Congress creates a program, especially an entitlement program, it does not stay within its estimates. It grows and grows.

We have a debt. When I first came to the Senate and had the privilege to serve here back in September of last year, we were at something like $11.6 or $11.7 trillion. Now we are already at $12.4 trillion. It is unsustainable.

The fifth myth: Medicare cuts won't affect seniors. This bill cuts half of a trillion dollars out of Medicare. Some say this is savings. The money that is going to be saved is not going back into Medicare to prolong the life of Medicare. We had an amendment from my colleague Senator Gregg who said that any savings would have to go into Medicare. The majority party defeated that amendment.

It makes no sense to me that we would take half a trillion dollars out of Medicare to create a new entitlement program. I can't go back to my seniors in Florida, more than 3 million of them, and say: Your Medicare Program is already facing insolvency in about 7 years, but we are going to take a half a trillion dollars out of it now to create a new health care program.

This could not be good for seniors. On its effect on Medicare, there was a letter from the CBO Director to the majority leader, Senator Reid. He warned that while the effects of the cuts to Medicare remain unclear, they could reduce access to care or diminish the quality of care. Let's go through the cuts: $135 billion from hospitals; $120 billion from Medicare Advantage; nearly $15 billion from nursing homes; $40 billion from home health agencies, $7 billion from hospice. The CMS Actuary says that many of the Medicare cuts are unrelated to the providers' cost of furnishing services to beneficiaries. That means it is not about savings. That means the money is being taken from Medicare, robbing Peter to pay Paul. He concludes it is doubtful that providers could reduce cost to keep up with these cuts. The CMS Actuary also finds that because of the bill's severe cuts to Medicare, providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and might end their participation in the program.

What does this mean in plain language? We are not paying these health care providers enough under Medicare, but we are going to take out still more money, and they will not be Medicare providers anymore. They will not provide health care for seniors. If you want to see the future of this, look at Medicaid. Medicaid is even one step worse in trouble than Medicare is. We know now that folks who are entering into the Medicaid system who are trying to find a specialist in a metropolitan area, half of them can't find a specialist. We know in Medicare, according to a June 2008 Medicare Payment Advisory Commission Report, that 29 percent of the Medicare beneficiaries it surveyed had trouble finding a primary care doctor. That is up from 24 percent in 2007. If the doctor is not in, it is not health care reform.

How can I go back to my seniors in Florida and say: We are creating a new program by taking money out of your program, and you may not be able to find a doctor who is going to see you anymore? That is not conscionable.

Florida will be disproportionately affected by these cuts. It has the second highest population of seniors and highest concentration of seniors in the Nation at 19 percent. Let me tell you how it will specifically hurt one portion of health care for seniors, home health care. I talked to Ron Malone, vice president of Gentiva Health Services, one of the largest providers of home health services in Florida. He said: Look, it is not going to hurt us so much. We are a big company. We can spread costs. We will get more market share. But it is going to hurt the smaller companies, and a lot of the smaller companies are going to go out of business.

How is that health care reform? Who do we owe an obligation to provide health care more than to our seniors?

I recently visited with the president of the Florida Medical Association, which is the largest physician association in Florida, with 20,000 members. They say:

. . . this legislation does not adequately fix what's wrong

with our current system. It contains many provisions that

would allow government bureaucrats to interfere with patient

care decisions and actually raises the cost of health

insurance unnecessarily.

This is from the doctors association in Florida. They say it is going to interfere with the doctor-patient relationship and increase costs. Why are we doing this?

The sixth myth I want to tackle is this idea that emergency rooms are going to be less burdened. You hear this justification. People now are uninsured. They go to the emergency room to get health care. If we give folks insurance or they have the ability to purchase insurance at a subsidized rate, they will stop going to the emergency room, and that will lower the cost of health care because emergency room procedures are expensive. It will free up the emergency room for its intended purpose, for people who really have an emergency. But according to the Urban Institute, after Massachusetts adopted a somewhat similar plan, emergency use remained higher than the national average. More than two- fifths of the visits in these emergency rooms were nonemergencies and, of these, the majority of adult respondents said it was more convenient to check into the ER. More convenient?

We know we are going to be paying health care providers less. What does that mean? There is going to be less of them providing health care. That means your lines at the doctor's office, which are already too long, are going to get longer. So what are folks going to still do? They are going to still show up at the emergency room. If we look at the Massachusetts model, that has happened. We also know that ultimately we are going to have a severe doctor shortage. We have not prepared, nor does this bill prepare, to make sure we will have sufficient health care providers to meet new demands.

Seventh myth: The Democrats' plan takes on the insurance companies. You have heard the President say we are going to fight against the insurance companies; we are going to make sure that we are putting the patient first. Basically what we are going to do, in reality, is create a lot of new business for the insurance companies. This subsidy plan is going to force a lot of new people into health care with an insurance company. That is why the insurance companies are for it. What we need to do is empower individuals. What we need to do is give individuals money that is in their own pocket and let them go out and be consumers. If they were consumers, it would lower the cost of health care. What we need to do is let insurance companies compete across State lines so we as consumers have more choices. Look at auto insurance. It is so easy a caveman can do it. In 15 minutes, you can save 15 percent on your auto insurance. These folks are out there competing. We need that in health care. Why do I only get to pick from the insurance companies that are in Florida? If there is an enterprising insurance company from South Carolina that wants to come into my State and offer cheaper prices, why should I not have that opportunity as a consumer? There are commonsense things we can do, market-driven things we can do that will lower the cost of health insurance and, by doing so, when it is less expensive, more people can afford it and you have more access.

The eighth myth: It has been said that this bill takes an unprecedented step to fight health care fraud. It is

going to go after waste, fraud, and abuse, and we will save billions of dollars. In fact, the $500 billion being cut from Medicare is often described as an elimination of waste, fraud, and abuse. It is not. It is just taking money out of that program and putting it in this program. To be fair, there are some provisions of this bill that go after health care fraud. They are good, but they go around the margins. They are going to save a billion or two, which is a lot of money, I will grant you that, but it is not the kind of money we need to save. We believe there are $60 to $100 billion of fraud in Medicare every year alone, not talking about Medicaid, not talking about veterans health care, just Medicare, $60 to $100 billion, $1 out of every $7 spent. What we need to do is implement a plan that is going to stop the health care fraud before it starts.

I have a bill, S. 2128, that has bipartisan support, has more than a dozen Senators who sponsor it. It would do three things. One, it would create a person at HHS who would be the No. 2 person at the agency for Health and Human Services, appointed by the President to be the chief health care fraud prevention officer of this country. No other job, not focused on worrying about H1N1, not focused on anything else that should be done in health, focused on stopping health care fraud, someone we could measure against performance to make sure we are doing everything we can to stop wasting the people's money. The second thing it does is it takes a page from another business that exists in the marketplace that does an excellent job at stopping fraud. There is another business that is about the same size as health care, about $2 trillion a year. That business, instead of having a $1-in-$7 fraud ratio, has a ratio of 7 cents out of every $100. That is the credit card industry. We have all had this experience. You go somewhere to use your credit card and you get a phone call or an e-mail that says: Did you mean to make that purchase? If you do not say yes, they do not pay.

What we do in health care is we pay, and then if we think something is fraudulent, we chase. When we chase, the money is gone. The credit cards stop the fraud before it starts.

Now, why couldn't we implement that kind of computer technology? In health care, it is called predictive modeling. So when someone tries to sell a wheelchair 100 times in an hour, the bells go off, the phone call is made, and if it is not verified, we do not pay.

We have people--unfortunately, a lot of them in my home State of Florida--who are bilking the system for tens of millions of dollars a year because it is much easier to steal from Uncle Sam than it is to steal from anybody else because nobody is watching.

One group in town that has evaluated my bill with this predictive modeling system, where we would set up a computer program to stop the fraud before it starts and make people verify when there is a questionable transaction, has said it will save $20 billion a year.

During the health care debate we had last December, I asked to amend my bill on to the main health care bill, and my colleagues on the other side of the aisle objected. Why we wouldn't implement real waste, fraud, and abuse reform is beyond me. But this bill we are talking about does not have it. That myth I, too, believe is busted.

The third part of my bill is, it will require background checks for all health care providers. Can you believe we do not do background checks on people who bill Medicare and Medicaid in this country? We have folks who are convicted felons who are billing alleged ``health care'' providers. It is so bad that in reimbursements for AIDS treatment under Medicare, while south Florida only has 7 percent of the AIDS population, they bill 78 percent of the treatment--only 7 percent of the population and they bill 78 percent of the treatment. It is just fraud, and it should stop today.

The ninth myth I want to tackle is that this Democratic health care reform bill will not impact the doctor-patient relationship. In fact, it will. I agree with my colleague, Dr. Barrasso, who supports a patient-centered approach. Real health care reform should ensure a doctor and a patient can work together to the best efforts in the health of the patient. As I said before, we are still going to have third-party payers. We have to put the patient back in charge of their health care. That is the only way we are going to reduce costs.

There is a common thread throughout our governmental programs that has led entitlements to expand and expand and expand; that is, people do not have what is called skin in the game. If I am not paying, I do not care. But if I have to go out as a consumer, if the government would give me a tax credit to go buy health insurance, all of a sudden I am in the game. If I have a reasonable deductible where I have to pay a little when I go to the doctor, all of a sudden I am in the game and I am not going to ask for a procedure I do not need. I am going to sit there and talk with my health care provider about whether this is something I really need. Now, if you tell me it is free, I will take it. And if you advertise to me on television every drug in the world, I will go to my doctor and say: Sign me up for that because I get it for free. We have to change the whole structure of how we do health care because this will just continue to expand. Medicare will continue to expand. Medicaid will continue to expand. If this program passes, it will continue to expand.

While it might be great to throw all this money into these programs, we cannot afford it. We cannot afford the programs we have, let alone the programs the majority in this Chamber want.

The tenth and final myth I want to tackle tonight is that taxes will not go up. This is a jobs bill for the tax collector. We already said there is going to be $5 billion to $10 billion to the IRS and HHS to implement this bill. Remember, if you do not buy health insurance for yourself, you are going to have to pay a tax, a fine, a penalty to the IRS--$750 a person. Small businesses that do not provide certain levels of health insurance will be fined. And what do you think they are going to do? Pay that fine or drop to under 50 employees so they do not have to pay the fine anymore, which will cause more people to be out of work.

Can you believe that in the United States of America, we are going to tax you if you do not buy health insurance for yourself because the government cares more about you than you care about you? If the government can tax you for not buying health insurance, what else can they tax you for not doing? Not working out? Not eating your spinach? That cannot be what our Founders intended.

Remember, we give up our rights to the government. Our institution was created that it governs with the consent of the governed, that we have the inalienable rights. In our social contract, we give those rights up to the government. It is not the other way around. How is it the government can fine me for not doing something?

So at the end of the day, when this entitlement program increases beyond its means, when it is more than we can afford, and when the $500 billion we take out of Medicare starts to put Medicare in insolvency even quicker, what is going to happen? Is the majority in this Chamber really going to cut Medicare? Probably not. So what are they going to do to help pay for this new program without their cuts? They are going to raise your taxes--raise your taxes to levels that are going to be hard to imagine when you factor in what we are going to have to do for all the other entitlement programs we cannot afford, when you factor in what we are going to have to do with our $12 trillion debt that is estimated to be $10 trillion higher by 2020.

That is why the National Federation of Independent Businesses has said:

When evaluating health care reform options, small business

owners ask themselves two specific questions. First, will the

bill lower insurance costs?

We know the answer to that is no.

Second, will the bill increase the overall cost of doing

business?

The answer to that is yes.

They say:

In both cases, the Patient Protection and Affordable Care

Act fails the small business test and, therefore, fails small

business.

It has been my goal tonight to present facts. I know others have a differing view.

As a Senator from Florida with more than 3 million folks in Medicare, as a Senator who cares about health care reform and wants to create more access but also wants to lower the cost of health care, I cannot support this bill.

I hope my colleagues in the House who are being faced with this option of voting for this bill and then passing something on reconciliation will do the right thing. I hope they will not be pressured politically to change their votes from ``no'' votes to ``yes'' votes. I hope they will stand for the people of their State and for the American people.

We could get this right. We could work together on a bipartisan way, as all of the other big, important bills over time have been done, with 70 or 80 Senators working together to do the right thing for the American people. I sign up for that. I am standing ready to do that if that opportunity presents itself. But I cannot vote for this bill that will not lower the cost of health insurance for most Americans, nor will it put us in a situation financially that is tenable going forward.

With that, Mr. President, I yield the floor.

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I yield the remainder of my post-cloture time to the Republican Leader, Senator McConnell.

Mr. President, I ask unanimous consent to proceed in morning business for 15 minutes.

Mr. President, survey after survey shows that most Americans like their health plan, but they believe it costs too much. That is why I am concerned that at a time when the American people are asking for lower health care costs, the trillion-dollar bills the Democrats are trying to ram through Congress actually increase the cost of health care.

You heard me correctly. The majority of both Houses is actually proposing to spend $1 trillion of taxpayer funds on proposals that will cause an increase in health care for all Americans. That is not the kind of reform Americans want.

Back home we call that a pig in a poke. The only way to sell a pig in a poke is to hide from Americans what their tax dollars are buying. That is why, despite the President's promise of transparency, the majority in charge of Congress and in charge of the Senate is working behind closed doors on a complicated, probably 1,000-plus-page bill that will lead to a massive government takeover of health care.

The assistant majority leader is correct; we have not seen a bill. It has been done in secret. Just wait; sometime we will see it. But we heard some facts that we think are very important.

First, the nonpartisan Congressional Budget Office, headed by a Democratic appointee, Doug Elmendorf, has said that the majority's government-run health plans will actually raise insurance premiums.

Despite the pig in a poke the majority is trying to sell to the American people, these independent experts have said that the government-run option being proposed will have higher premiums than private plans. There is another analysis that shows that the cost the government would impose would increase the cost of the premiums on private health care plans, particularly if they continue to propose to impose taxes on the health insurers. That is going to be shuffled off on every health care provider, every person holding private insurance.

When has government ever lowered the cost of anything? We know these bills will raise taxes on families and small businesses. We also know these bills would cut Medicare for seniors, up to one-half trillion dollars, leaving our seniors with fewer health care options. The majority is not even denying these charges. They are hoping no one is paying attention. Also what the majority does not want you to know is under these health care bills, government bureaucrats will have control over decisions that only you and your doctor should have. These are startling conclusions, but that is why Missourians are rightly concerned about the direction we are headed. Missourians and the people across this country don't want the same kind of denial, delay, and rationing that is common in countries with government-driven health care.

Americans are also concerned with the high price our children and grandchildren will pay for these health care schemes. My constituents are asking why, in the midst of a recession, when unemployment is 10 percent, why, when Americans are already saddled with massive Federal debt, the majority isn't listening to their concerns as they move ahead with a costly vast expansion of government that increases rather than lowers the cost of their health care.

Also, I have heard concern about gimmicks that are being used to claim the bill is deficit neutral, such as collecting all the taxes and fees long before the plan takes effect and has to be paid for. It is a grand scheme, but no one outside of Washington actually believes a $1 trillion health care bill will do anything but increase costs and pile more debt on our kids and grandkids. In fact, experts have confirmed there would be shortfalls outside the 10-year budget window. It is another smoke and mirrors trick to disguise the fact we are heaping massive debt on future generations.

Sadly, this proposed $1 trillion government takeover is just the latest in a string of efforts to expand the government at the cost of our children and grandchildren's fiscal future. Already this year the administration and the majority in Congress have spent $1 trillion on the misnamed stimulus bill,

adopted a budget that will double the debt in 5 years and triple it in 10, proposed a $3.6 trillion new gasoline tax, and other massive takeovers of various companies and industries.

Mr. President, I think we are all in agreement that health care costs too much, there are too many uninsured, and we need reform. But the question is, What does real reform look like? To date, we have seen two vastly different philosophies. For my colleagues on the other side of the aisle reform means a vast expansion of government costing more than $1 trillion that will increase health care costs, raise taxes, and cut Medicare benefits that are needed to pay for the services our seniors will get. Under this kind of reform, Americans will end up paying more for less.

Our view on this side of the aisle--as the majority leader has already said--is reform must be commonsense solutions focused on lowering health care costs for families and small business. We are offering solutions that increase access and improve patient care as well. Contrary to what has just been said on the Senate floor, we support tax equity for all families, allowing small businesses to form their own associations to purchase across State lines, and end the waste of the $120 billion annually spent for malpractice insurance and the defensive medicine it causes.

We don't need an overhaul of health care to give the American people what they want. What is needed is for Democrats to stop ignoring the American people and start working on a bipartisan basis--which they have not done so far--on real reforms that can make a difference, reforms that will lower costs, increase access, and improve patient care. That is what Americans want and that is where our focus should be, and we hope the Democrats will join us.

Mr. President, another example where Americans are in a position where we are going to be seeing a major expansion of government indebtedness and exposure of our tax burden is the measure that is probably going to be adopted today to continue and expand the home buyer tax credit provision.

Let me begin by pointing out that I originally supported the creation and the first extension of the home buyer tax credit. Unfortunately, these days it seems as if the fastest way to make something permanent is to have Congress legislate a temporary program.

As a longtime housing advocate, I believe a temporary credit, combined with other tools, such as housing counseling and refinancing efforts by State financing housing agencies, would help in the stabilization and recovery of the market.

Like many of my colleagues, I believed it was critical to address the housing market that was at the root of the housing crisis and led to our recession. However, the housing crisis has evolved from a crisis caused by loose lending through risky subprime loans to a crisis where job loss has become the primary cause of foreclosures and delinquencies. But for several reasons, I strongly believe the home buyer tax credit must end--primarily the disturbing news about fraud in the program and the high cost to taxpayers.

Before voting for another extension, I hope my colleagues ask themselves, based on its track record, whether the home buyer tax credit is an effective tool in helping the housing market. It is clear to me the answer is no due to its high cost and its vulnerability to fraud.

News about the real cost to taxpayers is alarming. In reality, this $8,000 home buyer tax credit costs the taxpayers at least $43,000 per new home sale using the most generous assumptions. According to the Brookings Institution, the vast majority of home buyers who used the credit would have bought a home without it, and at best the credit simply brought forward home sales that would have occurred in the future. Brookings estimates only 15 percent of the sales were attributable to the credit.

If we used Goldman Sachs's less generous estimate that far fewer sales were directly caused by the credit, the cost to taxpayers rises to $80,000 per new sale of homes. For the vast majority of cases, the home buyer tax credit amounted to a free gift since it did not affect their decision to purchase.

As described in a September 19 editorial this year in the Washington Post, the tax credit simply moved around the demand to purchase homes from future to present and from other consumers and other sectors to home buyers and homes. For the small minority of buyers whose decision was directly caused by this credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place.

In the face of these figures, it seems obvious the home buyer tax credit is a terribly inefficient, irresponsible, and poor use of scarce taxpayer resources. The expansion of the home buyer tax credit, if it continues only to affect one in five new home purchases with the new higher limits, will significantly increase the cost of exposure of the American public to the costs of these credits and to the risk.

Even worse than the inefficient use of tax dollars is the misuse of funds. With the lack of oversight and uncovered fraud in this program, extending the credit could result in throwing away billions of taxpayer dollars. The evidence of fraud in the program was reported by the Treasury Inspector General for Tax Administration. According to him, the IRS is investigating more than 100,000 suspicious and potentially fraudulent claims involving tax credits. In addition, the IRS and Federal law enforcement agencies are investigating 167 criminal schemes involving the credit.

Further, the Inspector General uncovered hundreds of cases where children--some as young as 4 years old--and illegal immigrants claimed the credit. Even more disturbing, the IG found that IRS employees themselves were illegally using the credit. It sounds to me as though we have the fox guarding the hen house. It is, therefore, not surprising that one low-income tax aide recently testified before a congressional panel that the abuse of the tax credit appeared to be widespread.

Legislative changes are being included to address this fraud. Thank you. I appreciate the efforts. But it is unrealistic to believe they will be successful due to the longstanding management and oversight challenges of the IRS and the rampant fraud in the marketplace.

My colleagues on the Finance, Appropriations, and Homeland Security and Government Affairs Committees are very familiar with the IRS tax administration shortcomings that have been well documented by the Inspector General and the GAO. When I chaired the Treasury, Transportation, HUD, and Related Agencies Appropriations Subcommittee, I became familiar with the IRS administration tax challenges. I am also familiar with other housing fraud cases because I have been working with the FHA for too many years.

As I learned, waste, fraud, and abuse cannot be stopped no matter how many ``thou shalt nots'' are included in the legislation.

In the case of the home buyer tax credit, it is nearly impossible to stop fraud when those who are supposed to prevent fraud are actually committing fraud at the IRS. With the FBI reporting that mortgage fraud is at a level even higher during the subprime boom, we are kidding ourselves if we think we can prevent more fraud and more taxpayer losses.

The most effective means of preventing fraud is simply not to extend the credit. That was the approach taken by Congress to finally stop the waste, fraud, and abuse of the so-called FHA seller no-downpayment program.

Finally, and most troubling, is that we are going down the same path that led us to the subprime crisis. The previous two administrations tried to prop up home prices through government incentives and programs similar to the tax credit, which contributed to the housing bubble. No- downpayment sales led to the explosion of foreclosures.

If a family doesn't have the dollars for a downpayment, they often cannot cover the unexpected but sure to occur unforeseen costs of owning a home. No downpayment has meant for too many people the American dream turning into the American nightmare.

Are we going down the same road with the home buyer tax credit? Are the credits being monetized to cover for an inability of the purchaser to come up with the downpayment?

Lastly, does anyone remember President Clinton's 1995 National Homeownership Strategy in which he charged HUD to work with leaders in government and the housing industry to increase home ownership? Have we forgotten President Bush's 2002 America's Homeownership Challenge and the 2004 Ownership Society Initiative to work with the real estate and mortgage finance industries to help boost the home ownership rates of minorities with the goal of increasing the number of minority homeowners?

All of these are extremely noble objectives. I agree with the objectives. But how did the government actually encourage home ownership? The government used a number and variety of tools, such as tax incentives and easy access to financing for borrowers through entities such as Fannie Mae, Freddie Mac, and the FHA.

The Tax Code already provides generous incentives to encourage home ownership through mortgage interest deduction, property tax deduction, and capital gains tax exclusion. The Joint Committee on Taxation estimates that for 2008 these tax incentives totaled just over $108 billion.

Through the implicit backing of the Federal Government and its own tax advantages, Fannie Mae and Freddie Mac were to boost home ownership by improving access to credit for borrowers. For low-income borrowers, the government pushed Fannie and Freddie to increase its purchases of the riskiest loans, such as alternative A and subprime mortgages--some where they didn't even check to see if the person had an income. The riskiest loans eventually accounted for about 15 percent of Fannie and Freddie's portfolio, which included a significant number of subprime loans originated by lenders such as Countrywide.

Not surprisingly, Countrywide became Fannie Mae's top business partner, accounting for 28 percent of Fannie's loan portfolio in 2007. FHA also was used by the government to encourage home ownership by ensuring loans at virtually no risk to lenders and with little or no downpayment by borrowers.

In other words, nobody who was running up the tab, who was taking on the obligations on the government's credit card, had any skin in the game. With the implosion of the private subprime industry and the credit crunch, the government--through Fannie, Freddie, and FHA--has become the primary source of mortgage funding. The Federal Reserve Bank recently estimated the Federal Government now accounts for 95 percent of the mortgage market. In other words, the Nation's mortgage market has been effectively federalized, and all of the risk is now on the back of the taxpayer.

As with previous housing bubbles, the taxpayer ends up bearing the brunt. Last time I checked, the government didn't do a good job of being a landlord.

I urge my colleagues to read the Congressional Quarterly cover story of July 7, 2008, entitled ``FHA Guarantees Not A Panacea.'' By pushing and subsidizing home ownership, the government has turned the American dream into the American nightmare for homeowners, for neighbors, communities, the global financial system, and taxpayers.

Are we learning from past mistakes or repeating them? Even without the tax credit, government has already taken unprecedented steps to stabilize the housing sector. The Fed has bought hundreds of billions of dollars' worth of mortgage-backed securities, taken on the debts of Fannie and Freddie, replaced the private subprime lending with the government's version of subprime through the FHA by expanding their business in several ways, such as the enactment of HOPE for Homeowners. Not surprisingly, FHA losses have dramatically increased.

I ask unanimous consent to continue for 1 minute.

The damage caused by distorting housing prices cannot be denied. Economics Professor Edward Glaeser of Harvard wrote:

Subsidized lending has encouraged millions of markets to

leverage themselves wildly to bet on the housing market.

Betting taxpayer funds is a bad bet. Why are we continuing these debt-fueled policies? Why do we keep using taxpayer dollars to distort and manipulate the market? What is our exit strategy from a massive Federal Government takeover of housing?

Josh Rosner, a managing director of Graham Fisher, said:

We've created a society where we love the term home

ownership, yet we can't allow people to understand that they

are being taken advantage of.

I ask unanimous consent to have the Washington Post editorial of September 19 and articles by Professor Glaeser printed in the Record.

Mr. President, I rise to talk about issues very similar to those of my friend from Texas and echo his concerns about the current proposal for health care. We found out yesterday the proposal that was put forth by the Speaker of the House is nearly 2,000 pages. It is a $1 trillion proposal. That is $\1/2\ billion per page. It is sort of staggering to think about.

When I came to Washington, just a couple months ago, appointed by my Governor--Charlie Crist of Florida--it was my cause to come and be a problem solver, to help work on issues that both Republicans and Democrats could work on together. I learned from Gov. Charlie Crist that there are lots of issues we can disagree about principally, but there are plenty of issues

we can work on together and do things that are right for the people. That may not be in vogue in Washington, DC. It may not be in vogue to try to find issues--the low-hanging fruit--we can work on together to solve problems, but it is something I wish to pursue.

Additionally, when I came to Washington, I recognized--and I spoke about this last week in my first address in this August body--there are lots of times most folks in Congress would like to discuss grand new plans, grand new ideas for the future of this country. That is exciting to talk about--a new program or a new administration, more government employees working on a new program, perhaps, in some new government building. But I don't have a passion necessarily for following up on those great ideas for future plans. I have a passion for helping us do better what we already do. Oftentimes, in government, that is not the case. We spend billions, trillions of dollars a year on existing government programs, but many times we don't do it effectively and efficiently. If we spent as much time caring about the money we are spending now, as opposed to the money some in this Chamber want to spend, I suspect we could find plenty of money to either return to the people or to find money for these new programs.

Today, I wish to talk about just such an idea, an idea to recover some of the waste, fraud, and abuse that is currently happening in our system of government. We know in our current provision of health care-- in Medicare and Medicaid--there is tremendous waste, fraud, and abuse. Estimates are that some $60 billion to a staggering $226 billion a year to waste, fraud, and abuse.

This health care proposal that was put forth by Speaker Pelosi and that we are discussing in the Senate, just for comparison purposes, is $1 trillion over 10 years. I think anybody who has watched the government knows that if you estimate something is going to cost $1 trillion, it is going to be a whole lot more than that when it actually gets implemented because we don't do much in government that comes in under our estimates. Most times, almost every time, it is a lot more than is estimated. But let us compare these numbers, $1 trillion over 10 years. That is about $100 billion a year. We may be wasting $226 billion a year.

If we captured just half of that, we might be able to pay for this program. Better still, we could take those dollars we are wasting in fraud and abuse and we could put them back into the Medicare Program to pay for health care for seniors. Wouldn't that be a good idea? Because the estimates tell us that in 8 years we are going to be in a situation in Medicare where we are going to be in a deficit. We are going to be taking in less money than we need to spend. Workers will be paying in less than retirees need for their health care. We will have to, as the Federal Government, shore up Medicare certainly at that point. So why don't we concentrate now, while we can, on an issue Democrats and Republicans can agree upon, which is trying to stop waste, fraud, and abuse.

Yesterday, I had the honor of filing my first bill in the Senate--S. 2128--and I wish to talk to the Senate and the American people about that bill. S. 2128 is the Prevent Health Care Fraud Act of 2009. What this bill simply will do is try to go after the waste in the health care system the government currently runs. It is estimated that $1 out of every $7 we spend on health care for seniors is captured by criminals or is wasted and is not going to help seniors--$1 out of every $7. That is where we get to that number of potentially $226 billion a year.

I have a lot of experience in this. Before coming to the Senate, I had an opportunity to serve as the deputy attorney general in Florida and to run--under then-attorney general Charlie Crist--an office of about 400 lawyers. Within that office, we had a Medicaid fraud control unit where we focused on fraud in Medicaid. We were able to recover $100 million a year--just in Florida--by stepping up enforcement actions to capture bad guys who were taking dollars out of the system. What I wish to try to do with this new act, in S. 2128--the Prevent Health Care Fraud Act of 2009--is not just go after these bad guys once we have figured out they have taken the money but to prevent them from getting the money in the first place.

The American people would be shocked to know how little we do to prevent health care fraud. You might expect, sitting at home in Orlando or wherever you are in the country listening to this address today, that we have a very comprehensive system to stop health care fraud; that if the government is spending billions of dollars, trillions of dollars over time on health care, that we would have hundreds and thousands of people who would be working to stop health care fraud; that we would have sophisticated computer models that stopped health care fraud before it happened. That is simply not true.

I introduced this bill yesterday, and I am speaking about it today, to help try to stop this fraud before it starts. My goal is to be a problem solver in Washington, to work on issues everybody can agree upon. Let me tell you about what S. 2128 does. It does three things, basically. We are going to create, within the Department of Health and Human Services, a Deputy Secretary who will be the chief health care fraud prevention officer of the United States. That individual will be in a No. 2 role in that agency. That person will report directly to the Secretary and will be nominated by the President of the United States. That Deputy Secretary will not have seven different jobs. He or she will have one job--to prevent health care fraud. If that Deputy Secretary does not do his or her job, they will come to the Senate and the House of Representatives and be called on the carpet. This chief health care fraud prevention officer of the United States is going to run a division that is going to work every day to stop this health care fraud before it starts.

How are they going to do it? Oftentimes, the private sector gives us a model that we can use and we can copy in the government to help us prevent health care fraud or anything we do in government, to do it more efficiently and more effectively. So what model is out there to prevent fraud that is being used every day and that affects all our lives, that stops fraud before it starts? That model is the credit card business, a business that is roughly the same size as the health care business.

A couple of trillion dollars a year passes through the exchange of credit cards for the purchase of goods and services. The health care industry is a multitrillion-dollar-a-year industry as well. The level of fraud in the health care industry is $1 out of every $7. The incidence of fraud in the credit card industry is 7 cents for every $100--$1 out of every $7 versus 7 cents for every $100. How do they do it? Well, we all have had this experience. You use your credit card to purchase something and then a couple minutes later you get a phone call or e-mail which asks: Did you authorize the purchase that just happened with your credit card?

This just happened to me a week ago. I went to buy a television, in Washington, DC, at Best Buy. I have my family here so they can be close to me during my time in the Senate, and we have to have a television. So I go to Best Buy and use my credit card. I walk out the door and my BlackBerry vibrates. There is an e-mail from my credit card company asking: Did you authorize the purchase of a television at Best Buy? Why did that happen? They have a computer modeling predictive system that says this is a questionable transaction. George lives in Tallahassee, FL; someone is using his credit card to buy a television--which is something that is probably bought a lot of times on a stolen credit card--something is up. The computer--no person does this, this has been programmed--goes into action and I get an e-mail. That transaction is not authorized for payment until I call my credit card company and tell them, yes, I actually authorized that purchase.

Why can't we do the same thing the credit card companies are doing for health care? Why can't we use a predictive modeling system that says a health care claim is not going to be paid when a red flag comes up? Right now we are on a pay-and-chase system. We pay these people who provide health care, allegedly--many of whom are not providing health care because a good portion of them are criminals, frankly--and then we try to go after them to enforce the law, and we barely

ever capture the money back. We capture some but not near enough. If we put this model in place, it stops the fraud before it happens.

S. 2128--the Prevent Health Care Fraud Act of 2009--would put this predictive modeling system in. The Federal Government would have to go out and hire folks to do it. We would have a competitively bid process. It is no different than what we do in other parts of the government. In the Defense Department, we go through a bunch of checks before there is an acquisition for the Defense Department. Why can't we put this predictive modeling system over in health care to use real-time data to stop these fraudulent transactions before they happen?

According to Harvard University Professor Malcom Sparrow, the credit card industry establishes benchmarks for acceptable business risk and their threshold is one-tenth of 1 percent. By contrast, fraud losses in the health care business run from 3 to 14 percent. That is 100 times the acceptable business risk.

Another thing this bill does is it requires background checks for all health care providers. If you are supposedly providing health care, whether you are providing a wheelchair or a doctor providing actual health care services--someone who is a physician's assistant or whoever it may be--if those folks are being reimbursed by the Federal Government, getting paid for the health care they are providing, they should not be criminals. You might think that right now we are doing background checks on all these health care providers, but we are not.

I know this, specifically, because Florida, unfortunately, is ground zero for health care fraud. We have tremendous problems in Florida, especially the southeast part of Florida, where I am from--Fort Lauderdale, Miami-Dade County--with health care fraud.

Let me cite some examples.

Mr. President, ``60 Minutes,'' last week, aired a special on this. They talked about the rampant fraud in south Florida. One of the perpetrators was responsible for $20 million of health care fraud alone, and he said: We get a Medicare book of codes and our bidder tells us which ones to use and we run the codes. So they get one wheelchair and they sell it a thousand times and get reimbursed a thousand times for it. There is no computer modeling system that puts the red flag up, such as there would be on your credit card, that says: Stop that; wait a minute; after the third wheelchair is sold in 60 seconds, maybe we should not pay this guy's claim.

It has gotten so easy to steal money from the Federal Government that organized crime has gotten involved. There have been stories of a Russian-Armenian organized crime ring that defrauded Medicare by $20 million, and they said it was easier than trying to be involved in the illicit drug business because there was no one going after them.

I wish to take a moment to applaud my colleague from Delaware, Senator Kaufman, who just introduced some legislation called the Health Care Fraud Enforcement Act of 2009 to increase the penalties for health care fraud.

I think that is great. We should be doing that. But in combination with that, we should do what we propose in S. 2128, which is to stop the fraud before it happens. These instances of fraud across the country are rampant.

I will give you another example. South Florida is home to 8 percent of the Nation's AIDS patients, but 72 percent of Federal AIDS medication payments are paid in South Florida. That is 72 percent, when we only have 8 percent of the patients. Why is this happening? These medications for AIDS are extremely expensive. Some bad guy runs the code all day and says: I have given this many injections of AIDS medication at $2,500 a pop; runs 1,000 codes and we pay them. We pay them.

It makes no sense to me. So we have had big disagreements about how we are going to solve health care, how we are going to provide more affordable health care to our people in this country, how we are going to provide more access to health care.

But we certainly can agree we should run whatever program we have efficiently and effectively. We can certainly agree we should not have waste, fraud, and abuse. If we can reduce the $60 billion to more than $200 billion in fraud a year by simply putting somebody in charge of health care fraud prevention, put predictive modeling in such as we have in the credit card industry, and not let people be health care providers unless they have a background check and, if they are a criminal, not let them provide health care, we can save billions of dollars.

Those dollars can go back into Medicare, which is running at deficits. As I said when I opened my remarks today, it is very much in vogue in Washington to propose brandnew plans. I understand that. But we need to be focused and have as much zeal about brandnew plans as running the programs we have efficiently and effectively.

I hope my colleagues will join me in supporting this piece of legislation, S. 2128, the Prevent Health Care Fraud Act of 2009.

I yield the floor and I suggest the absence of a quorum.

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

Mr. President, we are going to have the leadership discuss the process for moving forward, but I wish to take a minute and talk about one of the important bipartisan provisions in the jobs bill. I think colleagues know it is never hard to get me to focus on the health reform issue, and we are certainly going to be doing a lot of that in the days ahead, but our constituents want us to focus on jobs as well and particularly a jobs effort that is going to work. We have that in the Build America Bonds program. I say to colleagues, the Build America Bonds program has far exceeded even the optimistic projections some of us had for this program.

I have been involved in the development of this program now for 6 years. Senator Thune, on the other side of the aisle, has worked very closely with me. When we started our work on the Build America Bonds program, our hope was that perhaps $4 billion or $5 billion worth of these Build America Bonds would be let. What we have seen is that now close to $80 billion worth of these bonds have been issued. They are literally selling like hotcakes. They have revolutionized municipal finance, and some have projected that perhaps this year $150 billion worth of these Build America Bonds will be sold.

So Build America Bonds work, and they put people in the private sector to work as well. In my home State of Oregon, it has been proven, time and time again, that private investment follows well-targeted public investment. That is what we are seeing with this bipartisan program, and that is why colleagues on both sides of the aisle have proposed expanding it.

I note my good friend, Senator Thune, on the other side of the aisle, is here. He and I have worked hand in hand on this effort because we wanted to have something that would create jobs in our country that was nonpartisan.

The reason Senator Thune and I have worked on this effort in a bipartisan way is we wanted to have something that is common sense, we wanted to have a jobs creation effort that responded to basic needs of our country, and we wanted to see it part of an effort where the private sector takes the lead.

I am particularly appreciative the chairman of the Senate Finance Committee is here, Chairman Baucus. I wish to express my appreciation to him and his staff for their help in this effort. We saw in the Senate Finance Committee--Chairman Baucus is here, he remembers our discussions--our projections for Build America Bonds were pretty modest. The reality blew past those projections almost overnight. The projections for Build America Bonds were a few billion dollars, and we blew past those projections like a bullet train.

Build America Bonds are getting desperately needed funding flowing into local communities, they are creating jobs, and they are helping to strengthen America's infrastructure. Almost $80 billion has been generated. This is in addition to the $80 billion of direct Federal infrastructure spending that has been included in the Recovery Act.

I note that in the HIRE bill there is going to be an effort once again to ensure there is direct support for infrastructure, and we also have this very promising opportunity with the private sector that we have been able to secure with Build America Bonds.

When a project is funded with Build America Bonds, the Federal Government pays a portion of the finance costs. It equals a very small percentage, perhaps a single-digit percentage of the total project cost. The city or State pays almost the entire cost of the project over time.

A project that is funded with direct spending will often have the Federal Government pay 50 percent or 75 percent of the project costs. Some communities need that kind of help to get needed projects off the ground. But when some argued that projects should only be funded with direct spending, I thought it was important to look for other opportunities. That is why Build America Bonds came into existence. It is not possible, given the enormous needs for infrastructure improvements, for roads and bridges and transportation systems, to rely just on direct spending or rely just on bonds. What we ought to do is what we have done here in the Senate on a bipartisan basis; that is, put more options in the tool box for funding infrastructure. Of course, direct spending will be important. What we have seen is Build America Bonds take off as an additional tool.

In my home State, in the Dayton School District, they are using Build America Bonds to employ up to 150 people building and remodeling classrooms. By using Build America Bonds, this small school district in my home State saved an estimated $1.2 million in interest costs.

Up in Washington State, in Grand Coulee, the Coulee Medical Center was able to finance a new hospital building with Build America Bonds, saving more than $7 million in finance costs. They were able to start construction immediately. We had discussion on the floor earlier--are these government jobs? What that project did was put people in the private sector to work--construction workers, plumbers, electricians, tradesmen. Once the building, of course, is completed at the end of the year, doctors and nurses, clerks and

support staff get to work in the new hospital.

Recently, a joint Congressional Budget Office-Joint Tax Committee report highlighted other benefits flowing from Build America Bonds. As my friend Senator Thune, who is in the Chamber, knows about Build America Bonds, this report shows that tax-credit bonds, such as Build America Bonds, can be more effective than tax-exempt bonds. The report also concluded that because the bonds are more attractive to investors, they are more efficient at raising capital.

Once again, Democrats and Republicans have been able to come together in the Senate to advance a fresh approach that saves municipalities time and money and effort that can otherwise be devoted to other priorities.

Aside from the fact that the funds are raised efficiently, they are answering a cry we hear again and again; that is, get the job done quickly. People are frustrated that sometimes it takes eons for government to work out the particular project, particularly in the transportation area. Bond funds need to be spent within 2 years of the date the bond is issued. What that means is money is not just flowing into projects, it is being spent in the short term. People get back to work quickly. You get more bang for your dollar, and that obviously is what Americans are asking for, and Build America Bonds deliver.

Back in the days before these bonds were issued, the market for the traditional, normal municipal bond was just about frozen. It was hard to sell them. Now Build America Bonds have changed that. The private sector is strongly supporting this program. Groups such as the Chamber of Commerce and the National Association of Manufacturers and businesses across the country are saying they need a fresh approach to build infrastructure. Particularly with Build America Bonds, we are now seeing businesses say this is an approach that gives them a long-term boost to what they know they can count on. They can plan new avenues for their businesses when they know there is going to be infrastructure there to support it.

It is not, however, just businesses that are buying Build America Bonds. Nonprofits such as pension funds are finding these bonds are an attractive investment. Nonprofits cannot benefit from the tax credits, but bond issuers can pass on the value of the tax credits in the form of a higher interest rate for Build America Bonds than other types of bonds. By contrast, traditional tax-exempt municipal bonds have not been a good investment for pension funds and other institutional investors that do not pay taxes. What Build America Bonds have been able to do is provide a way for nonprofits to invest in American infrastructure that traditional tax-exempt bonds don't provide.

We are not surprised that Build America Bonds are reinventing the municipal bond market. We were told by people in the private sector, in the States, in the finance community, all across the country, that they thought this was a chance to, in effect, unfreeze the municipal bond market that had been frozen in Illinois, in Oregon, in South Dakota, and across the country. In some cases, these bonds are going to make the difference between whether the infrastructure projects come to fruition. In other cases, they are going to lower the cost of the projects and allow the community to reinvest the savings in other projects.

By any scenario, the Build America Bonds program helps local government, local businesses, and those who rely on them for jobs and dependable infrastructure. In my view, that is exactly what the American people are looking for from their elected officials--something that works, something that is common sense, something that is bipartisan, something with a proven track record. That is, in fact, the Build America Bonds program.

Let me close with one last point. There have been discussions--and we have been in consultation with Chairman Baucus and the Senate Finance Committee staff on this--about financial institutions and whether the fees they are charging are appropriate for the issuance of Build America Bonds. First of all, it has been the position of Chairman Baucus, myself, and others that anybody who tries to take advantage of State and municipal issuers needs to understand that the Senate Finance Committee is going to have a zero tolerance policy--zero tolerance policy--for ripping off the taxpayers. This program is designed to create jobs and make infrastructure funding more efficient and certainly not create any opportunities for somebody to try to skate around the rules and to take advantage of taxpayers.

In the Senate Finance Committee--and I am very appreciative of Chairman Baucus taking this approach. The Congress included a 2-percent limit on the amount of fees issuers of Build America Bonds can charge. In practice, the typical fee, in fact, has been far less than the statutory maximum fee that is allowed.

As the market for Build America Bonds has grown--and I pointed out that it has mushroomed far beyond projections--the fees have kept coming down. They have come down close to the levels currently charged for tax-exempt bonds. With Build America Bonds having become well established--in fact, they now represent 20 percent of the municipal bond market--in our view, there simply is no longer a justification for charging a higher fee.

As the expiration of the Build America Bonds program approaches at the end of the year--and I am very glad the administration has proposed making the program permanent--I intend to keep monitoring the fees charged for issuing the bonds. If some can present the case that it is appropriate to further reduce the statutory cap on fees, I am certainly open to listening to it. I want to make sure every single dime of taxpayer money goes to these bondholders.

I am open to listening to any suggestions and any ideas to make a program that works, a program that Senator Thune and I have worked on together for many months that is working--we are certainly open to ideas for improving on it.

I see my friend from Florida is anxious to speak. I appreciate his desire to talk tonight.

Let's keep focusing--whether it is health care, whether it is transportation, whether it is tax reform--on ideas that bring the Senate together. I wanted to take a few minutes to talk about Build America Bonds specifically tonight. Again, the chairman of the Finance Committee is in the Chamber. I am very appreciative of his support and Senator Grassley's support. As the majority leader, Senator Reid, noted earlier tonight, we have to zero in on jobs. There is no economic multiplier out there like jobs. If you put people to work, as I outlined--construction workers, electricians, plumbers--restaurants make the sandwiches to feed all the men and women who are doing the work. Let's keep coming back to approaches that bring both sides together. I have tried to do that in health care, in tax reform, and certainly in transportation, where Senator Thune and I have been able to team up on something that works and is being used around the country. Let's remember that is what is needed right now when our folks are hurting. When they are looking for approaches that are common sense, that are nonpartisan, we can give them one specifically with the Build America Bonds program.

I yield the floor.

I announce that the Senator from West Virginia (Mr. Byrd), the Senator from North Carolina (Mrs. Hagan), and the Senator from Montana (Mr. Tester) are necessarily absent.

Would the Senator yield for a question?

Mr. President, I thank the Senator from Florida for coming to the floor and expressing his point of view on the issue of health care, and I would like to have a few minutes to express my own.

Let me explain our health insurance, the health insurance we have as Members of Congress. It is a government-administered health insurance plan. It has been around for 40 years. It is called the Federal Employees Health Benefits Program. It is a government plan that provides health insurance for most of the Senators in both parties and their families, and it establishes minimum standards for the health insurance we receive as Members of Congress so we do not end up buying health insurance that is worthless when we need it. The government picks up a share of the cost--70 percent or so, I believe--and we pick up the rest. If you decide in the open enrollment period of each year that you want to change your insurance company, you want more coverage, then you are going to pay a higher premium out of your paycheck. The government pays a share of it, but you will pay a higher premium. that is something like an insurance exchange. In Illinois, my wife and I, through the Federal employees program, can choose from nine different private health insurance plans. It is a dream come true that most Americans never, ever experience: competition and choice.

That is at the heart of health care reform. We want to give to people across America the same thing we have as Members of Congress. I have yet to hear the first Senator come and stand in this well or stand before a microphone and say: The Federal Employees Health Benefits Program is socialism. It is a government-run health care program and it mandates benefits, and therefore I cannot in good conscience insure my family with it, and I am turning in my Federal employees health insurance. Not one. Yet when we suggest that for the rest of America, they say: This is an awful idea. It will never work.

It has worked for 40 years in providing private health insurance for Members of Congress and Federal employees. It is what we want to make available for small businesses, which have no choices. If Members on the other side think this is such a bad idea, I want them to march down the middle of this aisle and say: We are giving up our Federal Employees Health Benefits Programs today; it is such a bad idea. But they will not because it is a great program and it works and it gives us choice and it empowers us as consumers. If we do not like the way we are treated by an insurance company, we can shop for another one next year in open enrollment.

So to argue insurance exchanges are some radical notion--really? We live with it every day as Members of Congress. Don't the people of America deserve as good of insurance as their Members of Congress? That is the starting point in this debate. I think they do.

Secondly, when it comes to whether health care reform is going to add to the deficit, we can debate that for a long time. But the people who are the experts, the umpires, and referees, are from the Congressional Budget Office. They came back and told us: If you do this health care reform, you will reduce the deficit by over $100 billion in the first 10 years and by over $1 trillion in the second 10 years. That is it. They looked at it. They analyzed it, and they concluded it. I hear Members come to the floor and say: Oh, this is just going to run the deficit up to higher levels than we have ever seen before. There is no evidence of that. The CBO analysis comes out with exactly the opposite position.

This argument about heaping a new burden on Governors because there will be more people on Medicaid--Medicaid is health insurance for the poor and disabled in America, and the Federal Government pays at least 50 percent of the cost of it. It is true the States have to assume a burden. But it also says to the State of Illinois, with 11 percent unemployment, when people lose their jobs and lose their health insurance and go on Medicaid, the Federal Government is going to pick up, in this case, 62 percent of the cost of these Medicaid recipients in my State of Illinois, and 38 percent is going to be picked up by the State. So Governors can say Medicaid is a terrible thing. What is the alternative? More uninsured people in your State showing up seriously ill and needing treatment, being treated as charity patients? Is that the alternative?

I have listened carefully while the people on the other side of the aisle for over a year have criticized every idea we have come forward with on changing the health care system and making it more affordable. I have yet to see them come forward with any kind of comprehensive bill. They have ideas, and some of them are not bad, but they have never put them together in a bill and brought them to the floor. We have. That is the responsibility of governing.

There are other elements here too. The Senator from Florida is naturally concerned about senior citizens, and he should be. His State has a lot of snow birds from Illinois going down to Florida who spend their winters there and some of them end up becoming permanent residents. They love the nice climate in your State. We miss it. We go visit too, I might add. But the point is if we do nothing about Medicare, it is going to run out of money in 9 years. It will run out of money and 40 million people plus will wonder why Congress didn't act.

The health care reform bill adds 10 more years to the life of Medicare. It closes the gap known as the doughnut hole in prescription drug coverage under Medicare, and it gives every senior citizen a free annual checkup so they can at least get in to see a doctor and find out if something has happened that might be stopped early and avoid a major expense or major illness. Those are dramatically positive improvements in Medicare.

Are we going to have to take some money out of Medicare spending? Yes. Why? Because we have waste in the system and things that need to be reconciled. For the Senator from Florida, let me give a couple of illustrations. I lived in Springfield, IL. The average expenditure annually for Medicare recipients in my hometown is $7,600 a year average. The average in Chicago, IL, for Medicare recipients is $9,600 a year. The average expenditure for Medicare recipients in Miami, FL, is $17,000 a year. Miami may be a little bit more expensive than Chicago--we can argue that point--but is it twice as expensive? I don't think so. I want to know why. Why does it cost so much more in Miami, FL, and in McAllen, TX, for Medicare patients than it does in Chicago or Springfield or Rochester, MN? And are there ways to save money without compromising quality?

Senator Michael Bennet of Colorado offered an amendment adopted on the floor that said when we get done cutting waste and fraud, we are not going to cut the basic benefits under Medicare. We are on record. That is part of the bill. That is part of the health care reform bill. We could make Medicare better and stronger and save money. There are a lot of things being ripped off in Medicare. Turn on late-night TV and watch all the come-on ads for people to come and get something they may or may not need and Medicare is going to take care of it. Those are the things we ought to take a look at and I think it is well worthwhile.

Let me also say this: We cannot as a nation address the problems of health care with 50 million people uninsured and the numbers growing dramatically. Our proposal will put 30 million of those under the protection of Medicaid and health insurance through exchanges. We will provide, thanks to the leadership of Senator Nelson of Nebraska, up to 2 or 3 years with the Federal Government picking up every penny of the cost for the new Medicaid recipients; then, beyond that, high amounts-- 90, 95 percent--for several years. It is a reasonable transition for the States to absorb people who are now uninsured presenting themselves for care.

We end up with 30 million people with coverage. The Republicans' best effort addressing the 50 million uninsured in America covered 3 million. We can do better. We need to do better as a nation. Uninsured people show up at

hospitals, incur costs, and pass them along to other people. I think we need to move forward on health care reform.

I had a call in my office on a Saturday. I was sitting around doing a few things at my desk by myself in my office and the phone rang in Springfield and a lady was calling from Nokomis, IL, which is not too far away from Springfield, in Montgomery County. It is a small town with a lot of retired farmers and a lot of conservative folks I have represented in Congress for a long time.

She said: Senator, whatever you do, don't vote for health care reform.

I said: Do you have health insurance?

She said: We do. My husband and I have health insurance.

I said: You can keep it. If you want to keep it, you can keep it. We are not changing that.

Well, I just worry about the government getting involved in it, she says. She says, When government gets involved in insurance, I am not sure it is a good thing.

I said: Is anybody in your family on Medicare?

Well, sure. We have all signed up for it and my mother who is 85 is on Medicare and recently had a surgery, major surgery at Memorial Medical Center in Springfield.

How is she doing?

Just fine.

I said: I am glad your mom could depend on Medicare to pick up the bills for the surgery and didn't have to exhaust her savings or sell whatever property she has left in this world. But that is a government health insurance plan, ma'am. It has been there for all of us. My contributions out of my paycheck help pay your mom's medical bills and that is just fine with me, because I think we are all in this American family and we should watch out for one another.

Well, she didn't see it that way and I am sure I didn't convince her. The phone is ringing off the hook in all the offices of Senators and Congressmen for and against this idea. There is a lot of misunderstanding out there. I think this is an important step forward for America. We have put a lot of blood, sweat, and tears in this effort and now we need to get it done. We need to give the American people an alternative, because watching health insurance premiums go up the way they are going up is unsustainable. Businesses can't afford it; individuals can't afford it; our Nation cannot afford it.

For those who stand on the floor and have different ideas, that is your right. As a Member of the Senate, that is your right--maybe your responsibility. But I also think you have a responsibility to come forward with your plan, with your idea, unless you think everything is fine and we ought to leave it the way it is; we shouldn't worry about the uninsured; we shouldn't be concerned about the increases in health insurance premiums; we shouldn't worry that Medicare is going to go broke in 9 years. If you think those are things that we should push aside and, as some say, let's start over, let's do baby steps, let's think about it later, let's go back to it next year, that is a point of view, but I don't think that is the responsibility we have as Members of the Senate to address the issues facing our Nation.

Mr. President, I yield the floor.

Mr. President, I ask unanimous consent that notwithstanding rule XXII, the Senate resume consideration of H.R. 1586 at 2:15 p.m., Tuesday, March 16; further, that during any recess, adjournment or period of morning business, postcloture time continue to run; and that after the convening of the Senate at 9:30 a.m., Wednesday, the Senate resume consideration of the House message with respect to H.R. 2847, and all postcloture time be considered expired, the motion to concur with an amendment be withdrawn, and no further amendments or motions be in order, except as provided in the DeMint motion to suspend; that it be in order for Senator DeMint to offer a motion to suspend the rules in order to offer an amendment, and that if the motion is offered, Senator DeMint be recognized for up to 10 minutes; that upon disposition of the DeMint motion, the Senate then vote on the motion to concur in the House amendments to the Senate amendment to the House amendment to the Senate amendment to the bill.

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