S. 740Senate113th Congress (2013-2015)In Committee

Medicare Drug Savings Act of 2013

Legislative Activity

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2 earlier actions

SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

Finance Committee

April 16, 2013

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SenateIntro Referral

Introduced in Senate

April 16, 2013

SenateIntro Referral

Sponsor introductory remarks on measure. (CR S2687)

April 16, 2013

SenateIntro Referral

Read twice and referred to the Committee on Finance.

Finance Committee

April 16, 2013

Floor Debate

23 members

What members said about S. 740 on the floor

+18

9 Republicans12 Democrats2 Independents

Sen. Roy BluntR-MO · Dec 18, 2013

Mr. President, I will follow up on what Senator Whitehouse has been talking about. Last year he and I tried to find the middle ground on this issue where Members of the Senate and the House would be willing to move forward together to try to deal with it. Largely, the potential damage and the potential danger of what the cyber threat means are both unknown and, if we do know about it, we don't quite understand what we could do about it or should do about it. So we are coming together here with Senator Blumenthal and Senator Graham to try to do what we can to have more information available as we move forward.

There is no question that cyber breaches are serious. There is no question that they are a growing threat to our country's security. In my view, there is no question that it is our greatest vulnerability and a threat we might not see coming if we don't do the right things, particularly as it might relate to the critical infrastructure outside of what the government monitors. Cyber attacks by criminals, foreign intelligence, military service, and terrorists have increased in frequency and increased in what we see as the sophistication of those attacks. These are very dangerous for our country. They are certainly potentially dangerous in terms of the financial infrastructure, the critical infrastructure, the ability to defend the country. These incursions have already resulted in billions of dollars of lost intellectual property, millions of Americans have had their identities stolen, increased vulnerability to our critical infrastructure that is now so dependent on the cyber network for it to function. Also, of course, what happens to that infrastructure, whether it is the transportation infrastructure or the energy infrastructure or the utility infrastructure if they are compromised, and we don't know where that attack is coming from or how to meet it or how to prevent it, that is what we are trying to talk about in this legislation and trying to deal with.

As early as 2007, cyber intrusions into the U.S. Government agencies and departments resulted in the loss of data that would be equal to everything across the street in the Library of Congress. Walk through the Library of Congress. Look at everything that is there. We have lost that much government data since 2007. At the same time, reliable information about cyber attacks and about cyber risks remain largely unavailable to consumers, unavailable to businesses, and unavailable to policymakers. Threat information affecting, as my friend from Rhode Island said, ``.gov'' and ``.mil''--the military side of what we do in the government and the nonmilitary side of what we do in the government--is largely classified. So we, frankly, don't have much information about what they are doing every day, what they are fighting every day, and what the increased threat may be.

There are other entities people may be familiar with, such as ``.com,'' ``.net,'' and ``.org,'' domains that withhold information from the public because they don't want to needlessly concern their customers with using what is available or, in some cases, impact stockholders, if the stockholders knew how vulnerable a particular network might be. So I am glad we are working together to try to make this legislation, the Cybersecurity Public Awareness Act of 2013, just that.

The two key words here are ``public awareness.'' We have looked at this long and hard to figure out where the path is that we can move forward on, not just to introduce a piece of legislation but a piece of legislation that our colleagues would respond to, a piece of legislation our colleagues will look at and say: Of course, we need to know more than we know now about this and, through us, the people we work for need to know more. This gives us a greater understanding of the number of threats and the tools available to repeal those threats without needlessly compromising any of those tools that would be available to repel threats.

This bill works to provide public awareness of the danger of cyber attacks in our government and in private sector networks. It does that by instituting new reporting requirements for Federal agencies charged with monitoring and responding to cyber threats. Specifically, the bill would require national security and law enforcement agencies, including the Department of Homeland Security, the Department of Defense, and the Department of Justice, to submit reports to the Congress on what the attacks were on the Federal network and what the level of investigations are of cyber crime. What other obstacles are out there to appropriate public awareness of what they put on the Internet, how they put it on the Internet, how vulnerable we may be to things that happen now that manage so many of the daily aspects of our lives in the cyber world, and what we are doing about it. We want to know what the cyber security threats are, and we want to create an understanding so that there is a way to respond, so there is a way to share information, and so there is a way to make this work better.

This bill includes provisions to enhance awareness of threats against our critical infrastructure. As I have said before, the critical infrastructure, whether it is financial, utility infrastructure or transportation infrastructure, all are things that now are so woven into the cyber networks that the ability to suddenly manipulate, the ability to infiltrate, is all there, and we want to be sure we are looking at those threats in the right way. It is clearly complex. There is somebody out there right now thinking about things that we wouldn't want them to think about as to how they can manipulate and use these networks in dangerous ways.

It is complex, and it is critical to our national security challenges. Our response cannot and should not be to break down on partisan lines. It should not be a response that we decide we can't do anything because we can't figure out how to work together.

Again, I am pleased to be working with my colleagues on this issue. Senator Blumenthal and Senator Whitehouse both have backgrounds as attorneys general of their States and understand the importance of both honoring and enforcing the law and protecting us in this new area of vulnerability.

We can't prevent cyber security threats, but we can respond to those threats; however, in my view, we can't really respond to those threats--and in the view of I think everybody who will be speaking about this issue today--without public support. Having more information will make a difference. Understanding how big this problem is will make a difference. Working together to try to solve it is absolutely essential. I believe this is our greatest vulnerability as a society, and it is a vulnerability that will increase over time or decrease over time, and that largely is up to how we deal with it.

Again, I am glad to join my colleagues, and I look forward to hearing what Senator Blumenthal has to say

about this, and I appreciate the important background he brings to this debate.

I yield the floor.

Mr. President, I want to conclude our comments--at least my comments here--by saying we all believe that greater awareness of the size of this problem and the effort that is being made every day to deal with it will create an important set of information as we move forward.

This is a piece of legislation that is really focused on providing information, not in enough detail to weaken our efforts but enough information so people know this is not a casual conversation, that the cyber threat is real, that we are responding to it all the time, and, frankly, Members of Congress need to have even more information than we have on how much intensity, how much time, how much response is being made.

I say to Senator Whitehouse, thanks for bringing us together.

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

Madam President, I wanted to talk about some solutions to our health care problems that have been out there for a while. Every time I hear someone say: There were no alternatives to the Affordable Care Act, there were no alternatives to what the President wanted to do--in fact, I heard the President say that multiple times last week, though it might have been multiple reportings of him saying it the same time. But there is no question he said it, that there were no ideas out there except his ideas.

That is just not accurate. We had and still have the best health care system in the world. But it was not perfect. It does not mean it could not have been improved. It does not mean there were not ways to create greater access. For those of us who have held concerns from the very first about the proposals we are now seeing play out in front of American families and before the American people, before individuals who thought they could get insurance but did not, before individuals who had insurance that worked who are beginning to lose it--when we see that play

out and hear: Well, this was the only idea out there--not the only idea at all.

At the time I was in the House of Representatives and proposed these to the House. They were not just bills we filed and did not talk about. In fact, a lot of this was covered very widely, even on occasion we had to have Republican-only hearings because the other side did not want to talk about these issues. They just wanted to talk about one way to solve these problems that I think is more and more clear may not be solving the problems nearly as well as they would have hoped for.

There are a number of proposals that could have created more access to the good health care system we had, solved problems that individuals had. Bills that I introduced, that I was either the principal sponsor or the cosponsor of, one of those would have been to allow small businesses to band together in either what you want to call small business health plans or association health plans where people who had a common purpose could come together and figure out--actually in our State we allowed people to do it, the State of Missouri, to have those associated health plans, so your small group of 5 or 10 or 15 people did not become the universe of the group you were trying to insure, but you would have true access to small business health plans.

I will be truthful. The insurance companies, for whatever reason, never liked that idea very well. But association health plans or small business health plans were one of the things--in fact, I cosponsored that bill with Congressman Sam Johnson, H. Res. 2607, if anybody wants to look back and see just how much we talked about this issue and how we dealt with it.

Another issue every time the President's health care plan comes up: What about coverage for young adults? I was the only person in the House, as I recall--and I have said this a number of times and have never been challenged--who actually filed a bill that said: Let's let people stay on their family insurance policies longer.

There are those out there since who have said: That expanded that too much. It was a slacker provision. It was not anything like that. It was an effort to take the most uninsured group in America--young, healthy people--and let them stay on their parents' health care.

It was an effort to get--I think the number we talked about was around 3 million--people access to policies they did not have access to at some level. In virtually every State, you could stay on your family policy until you were 21. In Missouri, I think the number was 23. The proposal I made was let's add 2 years to that and do it for the whole country. Let's say 25.

The President said in the Affordable Care Act, 26. I do not think I would have had a big fight about whether my bill that said let's let people be insured on their family policy until they are 25--if it was expanded to 26, I do not think that makes that uniquely the President's idea. That was a bill I sponsored. It would have helped young workers, college students. These are young healthy people, generally.

It would not have added much. I think it is not adding much to insurance costs for families or those who are otherwise insured. The idea that somehow we could not do that--every time this topic comes up, there is somebody who will jump up and say: Do you mean you want to take people who are now on their family policy and who are under 26 and take them off the family policy?

All we had to do to prevent that is pass one piece of legislation that may have been 40 words long--may have been 40 words long, may have been a couple of pages long. I know of all the ideas I introduced, the biggest one was 75 pages long. It was not a 2,700-page health care bill. The biggest of all the bills I introduced was 75 pages long. We could have done one or we could have done all of them. They would have worked. Some of these are on this chart right here: encourage wellness programs, reform coverage for preexisting conditions. We had high-risk pools that were working. There was a way to expand those high-risk pools so they would work better. We proposed that in legislation.

I was on the floor the other day and talked about a young man in Missouri who is 20 now who has had an illness since he was 18 months old. He gets fluid on his brain. He had his first surgery at 18 months. He went from his family policy to the high-risk pool, which worked pretty well for him for a number of years and is working right now. But on December 31 the high-risk pool goes away. He cannot get access to the doctors he has used his entire life on any policy available to him. So we have eliminated the policy he had that was serving him well and the physicians group he had his entire life. We have eliminated that by eliminating the high-risk pool.

Is that an improvement? Absolutely not. Could the high-risk pools have been expanded? Were there ways to do that? There absolutely were. Those were proposed.

Medical liability reform was one of the things we could have done and proposed. In fact, even in the last Congress, I introduced in the Senate the Help Efficient, Accessible, Low-cost, Timely Healthcare Act, S. 1099. But that is very much like legislation that was available and could have become part of health care reform in 2009.

The safety net to be sure that emergency room physicians have particular protections on liability because they do not have any choice but to treat people, that is another bill I introduced this year that was very much in line with what we were talking about just a few years ago.

Insurance flexibility. In the 111th Congress I cosponsored H.R. 3824, the Expanded Health Insurance Options Act, which allowed people to buy across State lines through regional compacts, allowed States, if they wanted, to form compacts they could be part of that again would have been part of this solution.

Reform coverage for preexisting conditions. Encourage wellness programs. This is something that could make a big difference and is something we could have thought of ways and did think of ways to encourage. H. Res. 4038, the Common Sense Health Care Reform and Affordability Act that Representative Camp and I introduced would have achieved this goal of looking for new and better ways to encourage wellness programs.

I am not done yet. But I will say, every time the President or anybody else steps up and says there were no other ideas, that is not true. There were other ideas that I believed then and believe now would work better. Every day, as the Affordable Care Act becomes more and more available to us, I am more and more convinced there were better solutions. I am absolutely offended by this constant discussion that there were no other ideas.

Prevent rescissions. We talked about legislation at the time that would have prevented canceling policies or prevented setting caps after somebody got sick. It does not take an entire government overwhelming the insurance marketplace to say here are two things you cannot do.

The Common Sense Health Care Reform and Accountability Act would have helped achieve that goal--prevent limits on coverage, encourage health savings accounts, encourage people to have a little of their money that is available to them to use for health care expenses. I tell you what I am seeing happen now. So many people are now looking at policies that have these huge deductibles. For most families, it is like not having a policy at all.

If someone has a policy similar to the one I was talking about on the floor the other day, reporting about a Missouri family where they were paying $1,100 a month for insurance and they had a $12,000 deductible, is that truly insurance? For most families is that truly insurance, $24,000 out of their pocket before their insurance paid anything?

But it meets all of the better coverage supposedly that the President says we now have. It met all of those standards. It could be made available. But it had deductibility--as many of these policies do. We are going to find all of this out quickly.

The only thing worse than the Web site not working may be the Web site working. Because when the Web site begins to work, people are going to have the facts. There is no reason to argue about the facts. The President continues to say people are going to have better coverage for less money. We are going to know in the next 90 days or so how true that is.

I am sure some people are going to find better coverage for less money. I

am equally sure most people are not going to find that.

So health savings accounts; increased transparency--this is an idea which is actually in the bill, but they haven't pursued it, where you tell health care providers they have to give more information about what they charge and what their results are. This act passed 3\1/2\ years ago, almost 4 years ago, and it says in the law that they can require providers to do that, but nobody has passed that rule or regulation yet. This is something that would have helped.

Most of the time, you go to the hospital, particularly if it is something you have scheduled, you are in the car on the way to the hospital, and knowing who gets the better results--or who gets the same results for the lower price would be very helpful information for most Americans and most American families to have.

Reform tax treatment. This was another idea we talked about widely. If you buy your insurance on your own or you get your insurance at work, there needs to be equity in that tax treatment; whether you cap what you can get at work and allow that same tax credit if you buy it as an individual--there are lots of ways to do this.

The point is that there were lots of ideas out there. I am persuaded that these ideas right here, which would have cost taxpayers virtually nothing, would have had minimal impact on the cost of insurance but would have had a lot of impact on a bigger marketplace, more choices, not fewer choices, and would have been a better way to go.

There were ideas. At some point we may very well need to return to these ideas because at some point we may decide the course we are on is unworkable.

Americans shouldn't look at that and think we have to go back to the old system unimproved. There are plenty of ways to improve access to the best health care in the world. Diminishing that health care system is not one of those ways.

I yield the floor.

Sen. Richard J. DurbinD-IL · Dec 18, 2013

I thank my colleague from Maine for his statement and support for this effort. This is a historic moment. It has been 4 or 5 years since we have enacted and passed a budget agreement between the…

I thank my colleague from Maine for his statement and support for this effort. This is a historic moment. It has been 4 or 5 years since we have enacted and passed a budget agreement between the House and Senate. In a divided government, we have found many excuses and ways around it, but we are facing our responsibility today in the Senate. We are hoping that yesterday's procedural vote, with 67 Democrats and Republicans joining together, is an indication of the success we will find later today when this measure comes up for a final vote.

Before I go any further, I wish to salute my colleague, my friend, and my fellow leader in the Senate, Senator Patty Murray of Washington.

A few years ago Patty was given a tough assignment. She was given the assignment to chair the so-called supercommittee. I had been involved in a lot of deficit negotiations up to that point, and I thought, oh my goodness, she is walking into a minefield. Well, she did a professional job, a bipartisan effort. It didn't succeed, but she learned in the process not only more about our budget challenge but also more about the leaders in the budget process. And I think it was that painful experience with the supercommittee that set the stage for the much more successful negotiation over this budget agreement with Paul Ryan.

Paul Ryan is no stranger to those of us in Illinois. His congressional district borders on our State in Wisconsin. I know Paul. I like him. I respect him. We disagree on a lot of substantive issues, but I respect him as a person of substance and a person of values who tries to solve problems. He showed, with Senator Patty Murray, that Democrats and Republicans can sit down in a room together, respect one another's differences, and still come to an agreement. What a refreshing development in this town where so many times we fall flat on our face trying to come up with a solution.

I also want to commend Paul Ryan, while I am on the subject, for his leadership on the immigration issue. It is not easy for him to step up as a conservative Republican and support comprehensive immigration reform, but he has done it. He came to Chicago and made that announcement with Luis Gutierrez, the Congressman from the city of Chicago who is the national leader on immigration.

I only say that because if we have more of that kind of dialogue, more of that kind of agreement, we will have a better Congress and the American people will know it. Right now we are languishing in approval ratings across the country, and a lot of it has to do with the fact that we spend too much time fighting and not enough time trying to find solutions.

This budget agreement is a solution. Is it perfect? Of course not. There are parts of this budget agreement I don't like at all. But I have come to learn that if we are going to get anything done in Washington for the good of the people of this country, we have to be prepared to accept in an agreement some things we might not agree with. We found that with comprehensive immigration reform. We will find it today with this budget agreement.

This plan isn't perfect, but it is going to enable us to avoid a shutdown of the government. Did we or did we not learn a lesson just a few months ago? We shut down the government of the United States of America for 16 days. One Senator came to the floor on the other side of the aisle speaking 21 hours in an effort to inspire others to join him in the shutdown--and, sadly, it worked. For 16 days, 800,000 Federal employees or more were sent home with the promise that eventually they would be paid, and millions of Americans were denied the basic services of our government during that government shutdown.

We managed to emerge from that with the promise that we would fund our government with a continuing resolution until the middle of January. But then the burden fell on Patty Murray and Paul Ryan and the members of that conference committee to come up with a solution, and they did. That is what is before us today.

Those who are voting no don't have an alternative. They don't have a plan. They are just angry or upset or basically opposed, but they don't have an alternative. If it means they would want another government shutdown, so be it. But thank goodness an overwhelming bipartisan majority in the House of Representatives voted for this plan. Yesterday, if I am not mistaken, we had 12 Republicans join us and all 55 Democrats, so 67 voted in favor of this bipartisan budget plan.

What is especially important to me as a member of the Appropriations Committee is not only is it avoiding another government shutdown, it is a 2-year plan. I said to Senator Murray when she called me with the details: That is one of the strongest arguments in favor of this I can imagine, to think now that the Appropriations Committee can sit down and do its work for the rest of this year with a budget target number.

I have a pretty substantial responsibility on the Appropriations Committee. I chair the subcommittee on defense and intelligence. In that subcommittee, our bill alone is about $600 billion, or just a little south of that, and it embodies almost 60 percent of all discretionary spending of the Federal Government. We are going to get a chance now--and I have already sat down with Congressman Frelinghuysen of New Jersey, who chairs the same subcommittee in the House--to work out a bipartisan appropriations bill for the defense of America. Is there anything more important than our national security? We have to start there, and we are going to be able to do it now in a thoughtful way because of this budget number. Those who are voting no would cast us again into the darkness--a continuing resolution.

For those who are on the outside looking in, a continuing resolution is akin to saying to a family: Listen, next year we are going to give you the checkbook ledger from last year. Keep writing the same checks for the same amount, and we are sure everything will work out. It doesn't.

Instead, because of this budget agreement we can start looking at ways to save money which will not harm our men and women in uniform and will keep America strong and create a national defense.

We are going to also work in this bill to start to repair America's fraying social safety net--in other words, protecting the most vulnerable in America--because this agreement stands for the premise that we are going to treat defense and nondefense spending and cuts equally. That was an agreement we started. It is one they honored with us.

We have made real progress in the last 4 years to cut our Federal deficit in half. We are going to cut the deficit even further under this bipartisan plan but in a much more thoughtful way. I am going to be voting yes for the budget and I urge my colleagues to do the same.

I see the Republican leader on the floor, and I know he has a very busy schedule. I do want to leave with one closing thought. There is another deficit in America beyond our shrinking budget deficit that is even more dangerous to America's future; that is, the rapidly deteriorating situation many working families are facing. We have an opportunity deficit in America. President Obama called this opportunity deficit the defining challenge of our time, and I believe he is right.

We don't begrudge anyone wealth and success in America. We celebrate it. But we also believe in fairness. We believe in the dignity of work. We believe, if you work hard and follow the rules, you ought to be able to provide for your family with the basics of life and with the dream of an even better life for the next generation. That is the promise at the heart of America's economy, and for too many families today, it feels like a broken promise. We are losing the balance between personal wealth and our commonwealth to a winner-take-all ideology that is hurting our economy and our democracy.

Market capitalism has generated enormous wealth for America's economy. But for more than 40 years, the benefits of economic growth in America have gone increasingly to those at the top--while the middle class shrinks and the poor slip deeper into the quicksand of inescapable poverty. Think about this: in 1970, the top 1 percent of earners took home 9 percent of America's income. Today they take home nearly a quarter. The top 1 percent holds more than one-third of the Nation's overall wealth, while the bottom half of America controls less than 3 percent. The richest 400 Americans--the top one-tenth of one percent--now own more wealth than the bottom 150 million Americans combined. America is the wealthiest Nation on Earth. Corporate profits and the stock market are hitting records highs. Yet millions of workers are actually making less money today in real dollars than they did 20 years ago. We have more children growing up in poverty than in any other industrialized Nation. And our infant, maternal and child mortality rates are the highest among advanced Nations. Social mobility--the ability to work your way up the economic ladder--is now lower in the United States than it is in Europe.

What does that tell you about the American Dream? Income inequality is worse in America today than it is in Egypt, Tunisia, Yemen, the Ivory Coast, Pakistan, and Ethiopia. And then there is this: Since the official end of the Great Recession in 2009, 95 percent of all income gains in the U.S. have gone to the wealthiest 1 percent. There's a reason the YouTube chart Wealth Inequality in America has gotten more than 13 million views. The American people know that our economy isn't working for average working folks. It's like a bumper sticker that said, ``The economy isn't broken, it's fixed.'' The rules have been rewritten over the last four decades to concentrate more and more wealth at the very top, at the expense of everyone else.

The United States is not alone in this; growing income and wealth inequality are global problems. But these problems are growing faster in America than in any Nation. We would do well to listen to Pope Francis, who, in his recent ``apostolic exhortation''--a sort of open letter to the faithful--described trickle-down economics as a system that ``has never been confirmed by the facts.'' It is created, in the Pope's words an ``economy of exclusion and inequality'' and ``a globalization of indifference.''

Pope Francis asks:

How can it be that it is not a news item when an elderly

homeless person dies of exposure, but it is news when the

stock market loses two points? We are thrilled if the market

offers us something new to purchase, in the meantime all

those lives stunted for lack of opportunity seem a mere

spectacle; they fail to move us.

Today everything comes under the laws of competition and

the survival of the fittest, where the powerful feed upon the

powerless. As a consequence, masses of people find themselves

excluded and marginalized: without work, without

possibilities, without any means of escape.

Economic justice must be a central concern of the Catholic Church, the Pope says. But it is not the Church's responsibility alone. The Pope writes that mere handouts are not enough. I quote:

We must work to eliminate the structural causes of poverty.

It is vital, that government leaders and financial leaders

take heed and broaden their horizons, working to ensure that

all citizens have dignified work, education and health care.

I beg the Lord to grant us more politicians who are genuinely

disturbed by the state of society, the people, the lives of

the poor.

Those who are unmoved by moral appeals might want to listen instead to the economic case for reducing economic inequality. America's widening income and wealth inequities have recently drawn warnings from the Federal Reserve Board, the Organization for Economic Cooperation and Development, and the IMF, the International Monetary Fund. Listen to this warning, from a recent IMF analysis. I quote:

Some dismiss inequality and focus instead on overall

growth--arguing, in effect, that a rising tide lifts all

boats. [But w]hen a handful of yachts become ocean liners

while the rest remain lowly canoes, something is seriously

amiss.

In countries with high levels of inequality like the United States, the IMF warns, ``growth becomes more fragile,'' economic crises like the Great Recession become more frequent, and economic expansions are shortened by as much as one-third. Slower growth leads to fewer jobs created and even greater inequality--a vicious cycle. In fact, IMF economists found that inequality seems to have a stronger effect on growth than several other factors, including foreign investment, trade openness, and exchange rate competitiveness. Rather than being conflicting goals, the IMF economists concluded, reducing inequality and bolstering growth, in the long run, might be ``two sides of the same coin.'' That is certainly true in an economy such as ours, in which 70 percent of the U.S. economy depends on consumer spending.

It has taken years to reach these levels of inequality in America and it may take years and sustained effort by Congress to restore broad- based growth to our economy, the kind of growth that benefits all Americans, not just the wealthiest few.

The Affordable Care Act is a powerful start. No longer will tens of millions of Americans--most of them working people--have to worry that they are just one illness or accident away from bankruptcy. Small business owners will be able to spend less time searching for affordable health plans, and more time creating jobs.

Next, we need to restore the bottom rung on the ladder out of poverty and into the middle class by raising the federal minimum wage to $10.10 an hour. According to a Wall Street Journal/ABC News poll, 63 percent of Americans--two-thirds of Americans--strongly favor boosting the federal minimum wage from $7.25 to $10.10 an hour. $7.25 an hour, 40 hours a week, 50 weeks a year, works out to $14,500 a year--40 percent below the poverty line. Clearly, we can't boost the American economy on poverty wages. Studies and our own history show that raising the minimum wage will create jobs--because in America, consumers are the biggest job creators.

If you want to help poor children escape poverty, one of the best investments you can make is in effective pre-school. We know that. It's been proven. Yet, according to the OECD, the U.S. ranks 28th out of 38 leading economies in the proportion of four-year-olds in education. The budget before the Senate restores funding so that many of

the children kicked out of Head Start classes because of sequester cuts will be able to return to school. This is still only a fraction of the children who need quality pre-school. President Obama has set universal pre-school for every child in America. That should be our goal. Because the future belongs to those who are best-educated.

Here's another staggering fact about the new economy: For reasons that include automation, globalization and the loss of good-paying manufacturing jobs, more than half of Americans will experience near- poverty for at least some part of their lives. More than half. Here's another sobering fact: According to the National Employment Law Project, about two-thirds of the American jobs lost in the Great Recession were in middle-wage occupations--the kind of jobs that don't require a safety net. But these middle-wage occupations have accounted for less than one-fourth of the job growth during the recovery. Weakening the social safety net at the same time America is losing middle-class jobs can only hurt families and our economy. We need to strengthen America's social safety net so that temporary economic setbacks don't spiral and trap families in inescapable poverty.

We need to invest in infrastructure.

And we need to restore the ability of working people to choose to join or form a union so that they can bargain collectively for fair wages and safe working conditions. Labor and management, working together, built the American middle class. Labor and management, working together, can help to restore and grow America's middle class.

Years ago, Bobby Kennedy said that America's gross national product measures a seemingly endless variety of commercial transactions. But, he said, the gross national product does not measure many other things, such as ``the health of our children.''

It measures neither our wit nor our courage; neither our

wisdom nor our learning; neither our compassion nor our

devotion to our country; it measures everything, in short,

except that which makes life worthwhile. And it tells us

everything about America except why we are proud that we are

Americans.

For 40 years, a series of political and economic choices has widened economic inequality in America. Those choices have hurt many families. They have made our economy less fair, less stable, and less prosperous. And they have hammered away at one of the promises that made us most proud to be Americans: the promise that if you work hard, you can make a better life for yourself and your family. This budget will help us redeem that promise and reclaim that pride. I ask my fellow Senators to vote with us for economic fairness and shared prosperity.

After we pass this budget, after we get our appropriation bills underway, we are going to come forward and--I hope in a bipartisan manner--address some of these pillars of income equality in America: an increase in the minimum wage, an opportunity to make sure through the Affordable Care Act that every family has an opportunity for health insurance in America, a press conference which I will have later today with Senators Warren and Reid on the whole student loan debt crisis facing so many families. We have reached a point now where the student loan debt in America is greater than the credit card debt. It has devastating impacts on working families across America.

These and so many others should be part of an agenda to repair the opportunity deficit, and I hope Republicans will join us in a bipartisan effort.

I yield the floor.

Recognition of the Minority Leader

Sen. Jeff SessionsR-AL · Dec 18, 2013

Mr. President, will the Senator from South Carolina yield? I say to Senator Graham, he has served in the House. I know the powers that be would just like to see this bill rubber stamped, passed, done…

Mr. President, will the Senator from South Carolina yield?

I say to Senator Graham, he has served in the House. I know the powers that be would just like to see this bill rubber stamped, passed, done with, rah, rah, rah. But if this legislation were to be amended, and this problem were fixed, doesn't the Senator think the House would have ample time to pass it before the January 15 date for the CR, or, really, they could, as we have done many times, extend the CR a week or so, if needed? But I do not really think it would be needed. I think they would pass it promptly.

Mr. President, when I first came to Washington, considering running for the Senate, I went to a Republican luncheon, and they asked me to say just a thing or two, not that long, and I said: I could think of no greater honor than to represent the people of Alabama in the greatest deliberative body in the history of the world. This is a great deliberative body. That is our heritage, and it is being eroded. It is not disputable that it is being eroded. It is being eroded in a way that is faster and more significant than any of us seem to understand. Like the frog in the warming water, we do not realize we are being cooked and that the freedoms of Americans are being cooked.

This bill contains another provision that constricts the ability of a minority in the Senate--it could be Democrats or Republicans or just a bipartisan group who do not represent a majority but have a concern--to have those concerns heard and dealt with, and it is very significant. I wish it were not so.

I was shocked it was in the bill. I had no idea it would be in the bill. As Senator Graham just indicated, this started out as a bipartisan, bicameral conference, and Senator Ayotte and Senator Graham and Senator Wicker and I were members of the conference. We met and had a couple of public meetings where everybody talked, but no legislation, no language was laid out. The next thing we heard: The conference leaders are drafting a bill--I would say affectionately, a gang of two this time.

So this is the bill that was their product. I know they were trying to work out an important solution to America's financial problems. I know the differences between the parties are so great that it is difficult to bridge those disagreements, and we were not expecting a great solution to the long-term financial state of America--that needs to be dealt with, must be dealt with, and every year we wait makes it harder to fix that challenge we face.

But I did not expect some of the damage we have seen in the legislation. I

have to talk about a certain point because it changed the rules of the Senate. I am not sure the House Members understood how significant it was. But three times I have made objections to budget violations--three times--and we contended that the bill before the Senate was spending and would spend more money than the Budget Control Act allowed to be spent. If that is so--the Budget Control Act being in law, having certain limits on spending--then the Senate would have to recognize we were busting the budget and we would have to have 60 votes, a super majority, to approve busting the budget, a pretty good matter. It does not make any difference if there are taxes and fees used to pay for that. It still spends more than the amount of money we agreed to spend. It allowed us to contain spending.

There were three different votes in the last year or so in which the Senate was stopped from spending more than the Budget Control Act limit required because 60 Senators would not vote for it. There were not 60 who would support waiving the budget, breaking the budget, spending above the budget.

So that is the issue at stake. I am sure the spenders were deeply disappointed. They got over 50. Under this bill now, it only takes 50. They got over 50, but they did not get 60, so they were not able to continue that spending.

This agreement, this bill that is before us today, would significantly weaken the ability of Senators in this body to enforce the spending and revenue limits under our budget resolution and in future budgets.

The Ryan-Murray agreement that is before us today includes an egregious number of deficit-neutral reserve funds--57, to be exact. Operationally a reserve fund allows the chairman of the Senate Budget Committee to adjust the spending limits in a budget resolution prior to Senate consideration of a bill that busts the budget. This allows the proposed legislation to avoid most spending points of order.

A reserve fund can be a useful tool when used in the context of a true budget resolution, one that is properly negotiated in public by a conference committee rather than a backroom deal. Reserve funds can shepherd legislation with common policy goals through the House and Senate by accommodating minor differences between the budget plan and the final legislation. So that makes sense. Reserve funds are not a total fraud. Congress does not want legislation they agreed to in concept to get tripped by scoring differences. That is why reserve funds were originally created. But there is virtually nothing policywise in common between the House and Senate budget resolution that we are seeing today. They are quite different.

The House Ryan budget is a historic budget that alters the debt course of America and puts us on a sound path. The Senate budget that cleared this body, over my objection, would raise taxes $1 trillion, but instead of using those takes revenues to pay down the debt, it would have funded $1 trillion in more spending above the Budget Control Act limit we agreed to in August of 2011. So that is the situation. These are different budgets.

With 57 different reserve funds, the Murray-Ryan spending bill that is before us now will allow Senator Reid and Chairman Murray to bring to the floor a practically unlimited number of big tax-and-spend bills. It will not be subject to the 60-vote limit. Normally the minority party would be able to raise a point of order under section 302(f) of the Budget Act. The 302(f) is known as the tax-and-spend point of order, because it is the one we deploy when Congress tries to spend more money than it promised to spend, and offsets that new spending with some fee or tax increase. It is the point of order we deploy when Democrats, on these occasions I have mentioned, with some Republicans supporting it, want to grow the size of government. It takes 60 votes to get around a 302(f) point of order and it forces colleagues to go on record and say: Yes, I know my legislation will bust the budget, but we ask that we do it anyway.

What I found as we have looked at it, when you shine light on these votes, and votes on the floor of the Senate, and ask: Senator, do you really want to spend more than we agreed to spend? You just agreed in August of 2011 to the Budget Control Act. It said, we are not going to spend over this level. A bill hits the floor that spends over that level. They say: Do not worry about it, it is paid for by taxes. Do you really want to do that when it is raised as a budget point of order? Well, Senators kind of get shy and many of them back off what they might otherwise have agreed to if that issue were not raised.

As I said, there were three successive votes in which this Congress refused to bust the budget and spend more than was agreed to. It rankled some of our Members who like to spend. They did not like that. But the sheer number of reserve funds in the legislation before us, 57, would essentially take that point of order away. There are so many reserve funds in this bill that Senator Reid and Chairman Murray can bring an endless number of tax-and-spend bills to the floor, and my colleagues and I would be unable to shine light on that and be able to have a clean vote on one question--not whether we favored the idea they want to spend money on. That was not the question. The question, when you raise a budget point of order, is: Do you believe we should break the spending limits that we agreed to? If you can fund your bill and your cause that you believe in by finding savings elsewhere in the budget, then we might support that. But we are not going to support spending more than we agreed to. That is what this budget point of order has allowed us to do on a series of occasions.

I believe it is causing a lot of people to come to me and Chairman Murray when they offer legislation to make sure they are within the budget. They go back and try to draft it in a way that does not violate the budget. But eliminating this budget point of order will reduce the number of people who are concerned about that. We will see less discipline, in my opinion.

In summary, the reserve fund would allow the Senate majority or a number of Senators who have got legislation on the floor to avoid this tough vote in the light of day so people can see what has occurred. Moreover, there is a little-understood danger in this legislation that goes beyond spending. It really does. This bill can allow legislation that would carry measures that are disproportionately policy heavy with very little budgetary effect. We believe, as we have analyzed the bill, that it could allow reserve funds to be used to increase the minimum wage, to change voter registration laws, to extend unemployment insurance and offset it with some tax increase somewhere, regulate greenhouse gas emissions, and more.

There is little that can be done in the Congress to stop that which could have been done previously. This will allow this to go forward in a way heretofore not done. So I urge my colleagues not to sit idly by and watch the rights of the Senate get pounded into the dirt. It is better to have their individual authorities from whatever State and whatever party they come from to be able to highlight these problems. So I will ask unanimous consent today to offer an amendment that would strike the reserve funds from this legislation that is before us.

I encourage my colleagues to support that effort. If you care about this Senate as an institution, if you care about the right of free debate and the ability to actually amend legislation, if you care about the heritage of the Senate and the importance of constraining spending, then I would urge support of my unanimous consent request.

Mr. President, I would formally ask unanimous consent to set aside the pending motion so that I may offer a motion to concur with the amendment numbered 2573 which is filed at the desk which would accomplish what I have described.

Mr. President, these provisions that allow the objections to the abuse of reserve funds have been in law since 1985, 30 years almost. This has been the law that we have. I raised objections to the tax-and-spend point of order and it has been sustained on the floor of the Senate. The Senate budget resolution that Senator Murray referred to is the one that would increase spending $1 trillion over what was agreed to in 2011, August of 2011, and would add $1 trillion in taxes.

Then they changed this rule. This legislation alters that from the past. The budget resolution she referred to did pass the Senate with Democratic votes only. It was a simple majority. But this is legislation that changes the Budget Act. I feel strongly we have to absolutely understand what has happened here. The rule has been changed. Power that Senators had to block tax-and-spend legislation that breaks spending limits has been eroded significantly. It should not have been a part of any legislation that purports to be legislation that puts this Nation on a financial path of soundness. In fact, it does the opposite. It weakens the ability of Senators who want to hold this Congress to its own spending limits agreed to in law. It weakens their ability to stop breaking those spending limits. There is no doubt about that. I am really upset about it. I think it is historic.

I understand that the House maybe did not fully understand what was meant here. Maybe we can somehow revive this. But in truth we should do it now. We should not pass this bill that contains this legislation. Had we had a normal conference committee--and I had been a member of it and other Senators had been a member of that conference committee and had a chance to talk about it, it would not have been in there. Maybe that is why they chose not to have a public, open discussion of it, because they wanted to slip this through in the dead of night, up next to Christmas. Oh, you have got to pass this bill just as it is. There can be no amendments. The government will shut down. We will all have to stay here until Christmas Eve, as we had to, to try to stop ObamaCare that they passed on Christmas Eve. So this is the kind of thing that is not healthy for America. It is not healthy for the Senate.

Reserve funds are a function of policy. There is no common policy between the House and the Senate on budget resolutions. Budget resolutions are passed by each House, but we do not have common policies there about how it is processed. Never have we adopted the volume of reserve funds that will hereafter be longstanding parts of our law.

I believe we have a time to begin our wrapup now. Let me say Senator Murray is a good, strong advocate. She is effective in her leadership role. I respect her and enjoy working with her. We sometimes disagree.

I wish to say, as we move to conclude this legislation, that I respect the Senator, and we move forward.

Yes.

Ten minutes.

I would ask that the unanimous consent be equally divided.

What time is the vote?

How did it get to be at 4:27 p.m. instead of 4:30?

I ask unanimous consent the vote be held at 4:30, and I will wrap up in the time remaining.

I would object if it is counted against my time.

Mr. President, I thought we were voting at 4:30 and there would be 5 minutes left for me.

I will accept the kind and generous offer of the Senator.

I was concerned about Senator Leahy. If I would have 4 minutes, I would consent to the Senator----

If I would have 4 minutes--I would ask unanimous consent that the vote be delayed until I have 4 minutes and Senator Leahy has 1 minute.

The bill before us today is a perfect example of why it is dangerous to produce a deal in secret and rush it through on the floor of Congress in a panic, as we have done time and time again. This bill is a perfect example of why we need regular order, why the Senate is supposed to be a deliberative body that debates and amends legislation--there is no amendment being allowed to this legislation-- and why each Senator is supposed to have a chance to have their say and offer amendments to the bill. Each Senator in this Chamber, Republican and Democrat, is being diminished if they are not allowed to have an amendment on an important piece of legislation such as this.

I was astonished to hear earlier that we have no choice but to pass this bill exactly as it is, that there is no other alternative. What about letting the Senate work its will, I suggest. Could we not find 51 Senators who could have agreed on a better way to save money than to cut retired military personnel, a cut that was used to increase spending in other areas, some of which is clearly not more significant than the cuts falling on military retired personnel?

We learn after the House has passed the bill, that also includes a cut to the pensions of wounded warriors and--I suspect most House Members didn't realize that, as my friend from Mississippi has pointed out.

We were blocked yesterday from having a vote, and it looks as if we will continue to be blocked. We will move to final passage, and there will be no opportunity to amend this bill and the big $500 billion Defense authorization bill that will be on the floor next immediately. Thereafter, it will be voted on tomorrow, and there will be no amendments to it.

This is unprecedented to have the Defense bill on the floor when we often have 30 or more amendments. Zero. We don't have time, we have wasted our time on all kinds of things. We had a whole week in which there were two measly votes conducted when 30 or more could have been conducted easily that week, and there wouldn't have been that many votes on the Senate bill.

I would say that I do not believe this legislation is sound legislation. I believe it does damage to the ability of this Senate to protect the Treasury of the United States of America. I think it takes us down the road to eroding the power of individual Senators to constrain spending and stay within the limits we agreed to, that we put in law. I am not happy about it. I wish I had more time to talk about it. I don't.

I appreciate the opportunity to work with Senator Murray. I greatly respect Congressman Ryan. But there are some problems with this legislation. We should not pass it, and there is plenty of time for the House of Representatives to respond to any changes we were to make.

I thank the Chair, and I yield the floor.

Reserving the right to object, I would note this is the way the process--the train that runs through this body and denies amendments to be allowed--occurs. At this point, there will be a move, in effect, to clear the tree so this can be passed. It is an unhealthy tree we are in, and I am disappointed that we are heading in this direction, but it points out the actual legislative steps that are required to get to final passage after the leader has filled the tree.

Sen. Lindsey GrahamR-SC · Dec 18, 2013

I thank my colleague very much. My first thought is that America is not nearly as aware as we should be about the threats of a cyber attack that could come from a terrorist organization, a nation…

I thank my colleague very much.

My first thought is that America is not nearly as aware as we should be about the threats of a cyber attack that could come from a terrorist organization, a nation state, or a criminal enterprise. We are a week before Christmas. We are going to be debating about how to deal with the NSA program and reforms that make it more acceptable to the American people.

I wish to lend my voice to the three Senators who have already spoken and, quite frankly, are far more knowledgeable about the technological aspects of this.

But when I look out over the next decade and I try to figure, Where are the threats against the American people coming from--well, first it is our debt problem, but we are not going to get into that today--when you look outside for foreign threats, obviously, radical Islam presents a threat to us all--just remember 9/11--but this emerging cyber threat really just scares the hell out of me. The FBI, the military, the CIA are telling us daily how the threat is growing.

The Congress could not get there, so the President had to take over by executive order. We had a couple good bipartisan proposals, legislative changes. Senator Whitehouse's idea of incentivizing the private sector, creating a fort cyber where you will get rewarded, there will be no limited liability if you harden your infrastructure in the energy sector and other important financial sectors. Rewarding people for upgrading their systems to harden them against terrorist attack or criminal activity I think is a smart way to go. It is a complicated area of the economy and a complicated potential enemy to deal with, but this legislation I think is a good starting point.

I compliment Senator Whitehouse, who has been really helpful. Senator Blunt on the Republican side has been our leading voice, along with Senator Chambliss, to try to bring awareness to the body. Senator Blumenthal, as a former attorney general, understands very much the threats we face from a criminal enterprise, but he has also been very good on national security.

So a week before Christmas in 2013 we are trying to raise awareness because I am afraid if we do not get our house in order against cyber attacks, sooner rather than later, we will all regret it.

Thank you for allowing me to be part of this effort.

I yield.

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

Mr. President, what I am trying to do is this: We were told to come down here at 4 o'clock. I was glad to be able to discuss things earlier. So what I would like to talk about, with the Chair's permission, is the military retiree provision.

I thank the Chair.

No. 1, I wish to say to our budget chairman we had a very good discussion with Senators Chambliss and Isakson about trying to figure out a way to fix this provision in the budget deal. I am very disappointed we can't have an amendment to fix it or amendments to do other things, but we are where we are.

So the bottom line is this has been a healthy exercise because all of us are now looking at the provision. This is a bipartisan product, so it is not about blaming Democrats or Republicans. It is a good exercise. How could a bill--this bill, as we all know, doesn't fund the government. If we pass the budget--and I am sure it will pass here eventually--it doesn't keep the government open; it sets limits on spending where we are increasing the amount we can spend on defense and nondefense, setting sequestration aside. That is a great thing. I think that is going to be good. How we pay for it is the problem.

The question is, How did this happen? The chairman of the Senate Budget Committee and the chairman in the House are great folks. The military retiree provision is a pay-for that has everybody wondering a bit and, upon a second evaluation, is probably certainly not the right thing to do.

In May of 2014, there will be a commission that was set up by the Congress to tell us how best to reform military pay and benefits, because they are unsustainable, quite frankly, in the future. But we put in that Commission report a requirement that any reform could not affect those who are in the service now; they are grandfathered. I think the reason the Congress did that is we don't want to break faith with those who signed up for deal A. They are doing their part of the deal. They are serving. The Congress is looking for a way to make these programs more sustainable by applying it in the future, which I think we should do. About the civilian employee contribution to their retirement program, that is prospective. The one thing I was disappointed about is the money doesn't go into the retirement plan to pay for the deal.

I wish to acknowledge what Senator Warren has been doing with every Gang of 6, 12, 8, 10, 14--just different numbers--trying to find a way. I know entitlement programs are the source of the problem for the Nation over the long term, and military retirement programs such as TRICARE we have to look at as a retirement system. That is not a problem. But we are in a hurry to basically pass a budget that generally I support. It gets us out of the situation of sequestration.

But how did this happen? How could we have picked a pay-for such as this which is, to me, unacceptable. The military retirement community, up to the age of 62, will have their COLA reduced by 1 percent. That doesn't sound like a lot, but the compounding of that goes like this: If a person is a master sergeant who retires after 20 years of service in 2015 at, say, 42, by the time that person gets to 62, the effect of this bill will cost him or her $71,000. That is the compounding effect of money. No one has ever suggested it should be applied to people who are almost at retirement or in retirement when it comes to how we reform benefits.

My good friend Senator McCain, who has earned every penny he has ever

gotten in retirement and then some, mentioned the Bowles-Simpson Commission. I am a general fan of Bowles-Simpson: reform entitlements and flatten out the Tax Code and, yes, pay down some debt. I am a Republican. It would eliminate the deduction in the Tax Code and apply some of the money to the debt, not put it all in tax cuts, because when we are $17 trillion in debt, we have to do things we would otherwise not like. I am willing to do that. But Bowles-Simpson did not, as my friend Senator McCain suggests, adopt eliminating COLAs before 62 as part of their solution. They wanted to find $70 billion over 10 years for Federal workforce entitlement reform. They created a commission, the Federal Workforce Entitlement Task Force Commission, to reevaluate civil service, military health and retirement programs. They did not say we are going to eliminate COLAs entirely for the military and civilian workers; they said, we need a commission to look are to how to find $70 billion over the next 10 years. The examples they gave of what we might look at is use the highest 5 years of earnings to calculate the civil service pension benefits for new retirees, defer cost-of- living adjustment is the second one, adjust the ratio of employer- employee contributions to Federal employee pension plans to equalize contributions, which saves $4 billion. These were examples.

They wanted a commission. Guess what. So did the Congress. In 2013-- this came out in 2010--the Congress said let's form a commission to look at this. The problem is the Commission hasn't reported back to us. They are not due to do so until May 2014. We did put a prohibition on the Commission's work product: You have to grandfather existing servicemembers. You can't retroactively apply any of your reforms.

So Bowles-Simpson did not say we are going to eliminate all COLAs; they said, form a commission, and that was one example of what to look at. The Congress did form a commission. The commission is not back yet. But the Congress told the Commission to grandfather people who are in the current system, but we forgot to tell ourselves that because this pay-for is retroactive in nature and applies to all retirees, past, present, and future.

The disability component, the people who drafted this assumed disability retirees would not be included. They are. The $600 million, CBO says, of the $6.3 billion that this provision generates in revenue to help pay for the deal--$600 million comes from the disability retired community, and I think we all understand that is not the right thing to do. Someone has lost a limb in Afghanistan or Iraq who is disabled, can't work, they get benefits outside of disability retirement, and they have earned those benefits. But reducing their COLAs would add thousands of dollars, tens of thousands of dollars in lost benefits. Nobody wants to do that. They thought they weren't included. They are.

Let me just say as someone who has been around the military--I am a military lawyer, so I am not a frontline military person by any means. I have tried to be the best military lawyer I can be. I have been in the military for 30 years. I love the culture, love the environment, and I try to be part of the team. The military lawyer is part of the team. The pilots who go fly and face danger, they are the heroes. The maintenance guys and the guys on the frontlines in the Army, to them goes the glory.

The bottom line is I don't think it is fair for us to consider. If you are in the MRAP that didn't get hit by the IED and you made it through your tour, you have earned your retirement just as much as anybody else, and that disabled retiree needs the money more than anybody. They get things the average military retiree doesn't because their needs are greater.

All I am doing is begging the body: Let's not pass a budget deal with a pay-for that violates our own Commission requirements, that in hindsight is not the message we want to send to those who serve now. It is not a good way to recruit.

Let's see if we can fix this. Let's see if we can fix it before it gets into law, because once we get something into law, we all know how hard it is to take it out.

I do. Before I do, I wish to say that the Senator from Mississippi asked a question in our conference: Tell me what this costs our retirees. All of us on the Republican side looked at him, me included--me included--I didn't have a clue how to answer that, and when I found out it was $71,000, almost $72,000 for E-7, from 42 to 62, I about fell out of my chair. Now I know how you generate $6 billion.

As to the Senator from New Hampshire, she was the first one to take this torch up and run with it, and I have been trying to help where I can. But I will yield for a question.

That is a good question. The best way is to fix it before it passes, and we have until January 15. Nobody wants to shut the government down. Again, the budget deal is just about numbers. We have to actually appropriate. But I think we could. There are so many different ways. I have thrown out the idea of eliminating subsidies for people who make over $250,000 for their Part D premiums. It is $54 billion over 10 years. I am not asking my Democratic colleagues to go to food stamps and safety nets. I am not asking them to do that, and I am surely not going to ask the Republicans to raise taxes. There are better ways to do it.

So I could not agree more with the Senator from New Hampshire. With a little bit of effort here in the next few hours or days, we could fix this in total.

In all honesty, the provision does not take effect for a year or two. But I think what the Senator is saying is so important. Why leave any doubt in people's mind? They have enough to worry about already. Life is hard for all of us. For some people life is just incredibly hard. I have lived a fortunate life. But for a military retiree who is not disabled, it matters to them.

So we should not create stress where none is needed. They have been stressed out enough. The last 10 years have been hard as hell for them--multiple deployments. Senator Warner and all of us would go overseas. You would see the same people. I would do small Reserve tours just for a few days in Iraq and Afghanistan. I am seeing the same people in Afghanistan who I saw in Iraq in my career field of being a JAG working on detention matters. I do not think the average American-- they appreciate but I do not think they really understand how hard this has been on 1 percent of the American people.

So wouldn't it be nice if they did not have to worry and we could get this issue behind us? Because here is the truth of the matter: It may come as a shock to the body, but we are not in very good standing right now. That is a bipartisan problem. Here is the concern. The main things that have been fixed that are wrong? Not a whole lot. It is hard to fix things.

The unraveling effect is what people worry about. If you fix it for the military retirees, what about the civilians? I am willing to look at that. But the bottom line is they fought hard. They fought long. They have earned what they got. We should not retroactively diminish their retirement. They have worried enough. Let's do not give them anything to worry

about for the holidays. Let's take this one off the table.

Just to respond, I think this is what happens when you are trying to get something done late in the year. We are all adults. We have had months to deal with these issues. I sort of hate the fact that you are dealing with important things like the Defense authorization bill a day or 2 before everybody wants to go home for Christmas. Eventually, that leads to $17 trillion in debt.

How do you get to $17 trillion in debt? It takes bipartisanship.

No one party can get you there. This is the way you have run the place. What happens when you fill up the tree? You cannot fix things. Here is what is wrong with that. You cannot fix the things that politically are bad for you and expect the rest of us to go away quietly because we have something we want to do. So this filling of the tree process is not good for something this big, and I hope people would be responsible with their amendments.

But, again, it goes back to how did this happen? I do not believe for a moment that Patty Murray or Paul Ryan meant to hurt disabled veterans. I do not believe that. I think the whole issue was not looked at. These things are put together very quickly. I am on the Budget Committee. The Senator from New Hampshire is on the Budget Committee. The Senator from Alabama is on the Budget Committee. I had no idea. Nobody asked me if this was a good idea. I did not even get to look at it. I got to read about it in the paper.

That is what happens when you put the deals together with just a handful of people. You make mistakes, because the more eyes the better. You find yourself here talking about something, quite frankly, that we all know is wrong.

We need to fix it. We are creating a lot of anxiety for people who are going through enough anxiety. I hope we can rise to the occasion here at the end.

Absolutely.

I think the Senator is absolutely right. We have a legislative process that could rise to the occasion if we would use it. For 200 years we have been doing business a certain way, and the Senate is changing, all for the worse. Like I say, this is a bipartisan problem. I am not blaming Patty Murray, the Democratic chairman. This got into a bill that was bipartisan. It got 330 votes, 70 percent of the Republican Conference. We all make mistakes. But how did it get there? Nobody will tell me who put this in there because they do not know.

So the Senator is right. I think our House colleagues would find the equities of the matter easy to resolve. They would come back and fix it in just no time. I think we could fix it. The offsets might be hard to find in terms of our ideological differences, but I think we could find some offsets to fix this pretty quickly. Yes, I say to Senator Sessions, the House would be able to do it too.

One final plea. I would hope that as we go into the holiday season the acrimony that has been created in this body about different aspects of the way we run the place--that we do not miss a chance to do the right thing. They come on a lot here. It is not like we do not get a chance to do the right thing as Republicans and Democrats. We just both do not rise to the occasion enough.

But here is a chance to do the right thing and a very necessary thing. Maybe if we rose to the occasion here, it might lead to doing more right things. I will leave here as an optimist and hope and pray we do the right thing while we still can.

I yield.

Sen. Tom CoburnR-OK · Dec 18, 2013

Madam President, I ask unanimous consent the order for the quorum call be rescinded. Madam President, I want to spend a few minutes talking about the bill we are going to vote on this afternoon. I am…

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

Madam President, I want to spend a few minutes talking about the bill we are going to vote on this afternoon. I am starting my 10th year in the Senate. During that period of time, my No. 1 goal in coming to the Senate was to try to right our financial ship and almost everything I have done in the Senate has been related to the fiscal consequences of our dereliction of duty as Members of Congress--of both parties. There is nothing partisan about that statement. We have seen different Presidents and different parties control both bodies, always to the same result.

We have before us a bill today that is a purported compromise. I want to describe who it is a compromise for. It is a compromise for the politicians. It is not a compromise for the American people because what it does is increase spending and increase taxes. The net effect, even if you take all the budget gimmicks that are in this bill that are not actual savings, and even if you believe people 10 and 11 years from now will actually hold true to what this bill pretends to have us do, which is what we are not doing--something we did 2 years ago through this bill, we are still going to spend more money than we would have and we are going to charge people revenues, some $24 billion--$28 billion, pardon me--increased revenues which we are not calling tax increases but Americans are going to pay that so it is money that is going to come out of their pocket.

What we have before us is a bill that is a political compromise for the parties in Washington to keep us from doing what we really need to do--the hard things. I am going to go through some criticisms of this bill. It is not meant to reflect on any one individual. It will apply just as much to the Republicans as it does to the Democrats. But we have a bill that supposedly fixes things until past the next election so we do not have to face these gigantic problems of ``deadlock.''

The other thing I would note as I go through this is it is my contention we do not have a problem getting along. It is my contention we get along way too well. We get along way too well; otherwise, we would not have a $17.7 trillion debt. We would not have $124 trillion in unfunded liabilities. And we would not have debt per American in this country which is now $57,000 per person and unfunded liabilities that are over $1 million per household, not including that debt repayment.

How did we do that? We had to agree to do that. Both parties had to agree to do that. The President had to sign it. My contention is we get along way too well, when it comes to ruining the financial future of our country. My main criticism--I do not criticize compromise, I criticize compromise that ignores the facts of our financial situation.

I want to make a point. I put a book out yesterday. It is called the ``Yearly Wastebook.'' I do it every year. I do it somewhat in jest but to make a very real point. I outlined over $31 billion, what I think and I think most Democrats would agree and that the American public, 95 percent of them, would agree with this--that when running a $700 billion deficit, maybe we should not be spending these moneys on these things which go far further in actually solving our problems for compromise in terms of creating a solution to the long-term problems and giving the American people what they want.

We really do have a 6-percent approval rating, right? That is true. I think we have earned it. This bill, I believe, proves it because we did exactly the opposite of what the American people would like to see us do. We solved our problem as politicians but we made their problem worse. We did not fix the things that are obvious to fix.

I was on the Simpson-Bowles Commission, I was a member of the Gang of 6, I have worked in a bipartisan fashion with anybody who will work with me to try to solve the big problems in front of our country, except we as a body, and the House, really don't want to solve them because the thing put at risk when you really solve them is political careers, and as a group of politicians, the people in Washington care much more about their careers--by their actions it is proven--than they do about the long-term fiscal health of this country. That applies to both parties.

So when we have a deal brought before us that will avoid confrontation come January 15 and we have all sorts of budget gimmicks in it that are not truthful, they are not real, in the hopes that somebody will grow a backbone 9 and 10 years from now and actually keep their word to the American public--and we are demonstrating right now we can't even keep our word from 2 years ago--why would we be proud to vote for that? Does it solve a real problem? No. It puts a real problem off and actually makes the problem worse to the tune of $68 billion. Through this bill we will borrow an additional $68 billion, $50 billion of it, close to, in the next year and $20 billion some after that, and in the year after, and then hope and pray that Congresses that follow us will do what we suggested.

Everyone in this body knows that is not going to happen. So when you vote

on this bill you are voting for your political career, you are voting for the Washington establishment, but you are not voting for the person out there who now has a $57,000 debt they are servicing, and their family, $1 million per household in this country in unfunded liabilities.

It will pass. I have no doubt it will pass. I feel like John the Baptist in the wilderness. But mark my words. If we continue to do what we are doing today, we will be remembered as the people who could have fixed the problem and didn't; who could have made the courageous decisions and chose not to; who could have stiffened their spines and said we don't care what Republican extremists or liberal extremists say, the future of our country is more important than any political career in this town. And what we have before us is just the opposite.

Why wasn't in part of this agreement some of the $250 billion that GAO has identified as waste, fraud, duplication, and mismanagement? There is not one thing in this bill that addresses one thing that GAO has recommended to Congress over the last 3 years--not one. So we have the ``Wastebook''--$31 billion of what I would consider--and it is not partisan. There could be a difference in terms of agreement about what is important and what is not. But, again, I would say in terms of the ``Wastebook,'' it is: Should we be spending money now when we are borrowing money, in light of the fiscal situation that we have, on some of the things that we outlined? It is a listing of 100. It has $31 billion worth of savings. I will outline a few of them for you.

We are going to be taking up NDAA next. None of the amendments that I offered are in the NDAA. Every one of them was structural to the Pentagon to make it more responsible and accountable to its constitutional duty, which it has not performed, of giving account to Congress on how it spent its money. For example, the Army commissioned a contract to have a warfare overseeing blimp. They spent $297 million on that blimp. It flew for a short period of time in this country. We sold it back to the contractor for $300,000.

I have two questions: No. 1. Whoever signed that contract and made that decision, did they get fired from the Federal Government? Did they get demoted in rank? And, No. 2, was the contract actually executed to the requirements that the military set out for it?

It is called accountability. The answer to both of those is no. There is no accountability. So we are going to have an NDAA bill come through that requires them to meet an audit. They have been required since 1992 to meet an audit. They did not do it in 2014 and they will not do it in 2017 and they won't do it in 2018, because there is no hammer on the Pentagon to make them do it. That is because all hammers have been taken out because we don't want to force them to meet their constitutional responsibility. It is too hard.

We never told them it was too hard to go to Iraq or Afghanistan. But it is too hard for them to follow their constitutional duty to report on how they spend their money. What I would put before us is, if you cannot measure what you are doing, you cannot manage what you are doing. What is obvious from the waste, fraud, and abuse, contract failures within the Pentagon, is they have no clue on what they are doing. All you have to do is take the Dwight D. Eisenhower carrier, the littoral combat ships, the F-35--all of those major defense programs are at risk, over budget, behind schedule. I am not talking a little bit over budget. We did not do the oversight; we have not forced that. You will never get control of those programs until you make them be able to account for what they are doing.

My first training, my first degree, is in accounting. I understand the reason accounting is important is because it tells you where to go to manage your problems. The Pentagon cannot do that. The Pentagon ordered--at the insistence of us, by the way--some airplanes for Afghanistan. Guess what we have done. We have taken delivery here and we have sent them straight to the Arizona desert, just $422 million worth of them. By the way, the ones that did go to Afghanistan, we are going to cut up, destroy. We are not going to send them to Africa for relief missions. We are not going to send them somewhere else. We are going to cut them into pieces, another $200 million worth of airplanes. And by the way, since the Afghan Air Force wants the same thing America has, we have already given them two C130-Hs, and we are going to give them two more. That is another $400 million. So what we have done through poor management is waste over $700 million on one item.

There is nothing in this bill that corrects that. Yet this bill is going to come to the floor--the NDAA--and not one of us who actually knows what really needs to be done in terms of changing the financial picture in the Pentagon is going to have an opportunity to influence that bill--not one of us. It doesn't have to be that way. That bill came out of committee in May of last year, but we have chosen to operate that way.

Camp Leatherneck, which is in Afghanistan, is a $34 million new camp for troops, and it sits abandoned today. It has never been occupied. Who was the general or colonel who authorized that in anticipation of our drawdown? Who executed the order to build it and then ordered that we abandon it? Is there any accountability in the Pentagon or in any other agency? Are we doing our job of holding them accountable?

The ``Wastebook'' is not all about the Defense Department, but I brought a couple of those up just so we could see what is going on. The ``Wastebook'' is about poor judgment across all the agencies. You may disagree with me about some of what is in the ``Wastebook,'' but the question you have to ask yourself is: At a time when we have done what we have done to the American people in terms of unfunded liabilities, in terms of individual debt--the average family now has over $220,000 worth of debt that they have to pay back which we borrowed--should we spend money the way we spend it?

We spent $978,000 to study romance novels. Certainly that is a priority right now in our government. Everybody would agree with that; right? Sure they would. They would agree with it. Yet we put that contract out last year and spent money to study the background of romance novels, both on the Web and off, and why people write them. We didn't just study about them here, we studied about them everywhere.

How about $400,000 to Yale University, by the National Science Foundation, to actually study whether people who align with the tea party have the cognitive capability in terms of science? Guess what. We spent that money and the professor got the biggest surprise of his life. Here is what the study said: People who are aligned with the tea party have far exceptional cognitive abilities when it comes to science, math, and financial aptitude. It totally surprised the professor because the whole purpose was supposed to undermine people who are constitutional conservatives. Yet we spent $400,000 on that study.

Those are just a few of the small examples of the silliness which goes on. People say: Well, $400,000 isn't much; $900,000 isn't much. The State Department spent $500 million during the last week of the fiscal year. What did they spend it on? Does anybody know? To buy brand-new crystal stemware for all the embassies throughout the world. We didn't need new stemware, but we had to spend the money, so we spent it.

Just think about that. We are responsible for that. We allowed that to happen. There is no oversight here. There is no aggressiveness in terms of controlling costs, and our default position is our agreement on this budget which doesn't address any of those problems.

The American people are going to be asking questions about why we get along so well. The political story is not that Washington spends out of conflict and partisan bickering because the facts don't lie. We get along way too well. We are going to get along so well that we are going to pass another bill that solves the problem for us, as politicians, but, in fact, actually hurts the American people.

I am not going to be a part of that, and I am going to keep yelling from the canyons and from the mountain tops until we start doing what we are supposed to do because this is not going to change.

It is my hope that some of us will wake up and start looking at some of

the real facts. So $30 billion can make a big difference. If we just eliminate the items in this ``Wastebook'' for next year, we would be able to take care of one-third of the sequester. There are just 100 items here. I can give you 300 items.

I can give you $150 billion worth of stupidity every year, but we choose not to do anything about it. We choose not to do anything about it because you have to be a committee chairman in order to have an oversight committee dig into this stuff. You actually have to do the hard work to find out where the administration is spending the money.

President Obama doesn't want money to be wasted this way. He needs our help. Yet we will not help him. We will not help the American people. Consequently, the future of our country is at risk when it should be gloriously great. It is at risk not because of the American people; it is at risk because of us. We ought to change that.

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

I object.

Mr. President, there will be an objection to a rollcall vote because the opportunity to amend this bill has not been made available to Members of the Senate. I have two specific concerns with the bill--I am writing my whole letter right now on this bill--and until they are addressed, I am going to hold this bill until I have an opportunity to make them known.

I yield the floor.

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Introduced in SenateIssued April 16, 2013

113th CONGRESS

1st Session

S. 740

IN THE SENATE OF THE UNITED STATES

April 16, 2013

Mr. Rockefeller (for himself, Mr. Nelson, Ms. Baldwin, Mr. Blumenthal, Mrs. Boxer, Mr. Brown, Mr. Durbin, Mr. Franken, Mr. King, Ms. Klobuchar, Mr. Leahy, Mr. Merkley, Mr. Reed, Mr. Sanders, Mr. Schatz, Mrs. Shaheen, Ms. Stabenow, Mr. Udall of New Mexico, and Mr. Whitehouse) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend title XVIII of the Social Security Act to require drug manufacturers to provide drug rebates for drugs dispensed to low-income individuals under the Medicare prescription drug benefit program.

Short title

This Act may be cited as the Medicare Drug Savings Act of 2013.

Requiring drug manufacturers to provide drug rebates for drugs dispensed to low-income individuals

(a)

In general

Section 1860D–2 of the Social Security Act (42 U.S.C. 1395w–102) is amended—

(1)

in subsection (e)(1), in the matter preceding subparagraph (A), by inserting and subsection (f) after this subsection; and

(2)

by adding at the end the following new subsection:

(f)

Prescription drug rebate agreement for rebate eligible individuals

(1)

Requirement

(A)

In general

For plan years beginning on or after January 1, 2015, in this part, the term covered part D drug does not include any drug or biological product that is manufactured by a manufacturer that has not entered into and have in effect a rebate agreement described in paragraph (2).

(B)

2014 plan year requirement

Any drug or biological product manufactured by a manufacturer that declines to enter into a rebate agreement described in paragraph (2) for the period beginning on January 1, 2014, and ending on December 31, 2014, shall not be included as a covered part D drug for the subsequent plan year.

(2)

Rebate agreement

A rebate agreement under this subsection shall require the manufacturer to provide to the Secretary a rebate for each rebate period (as defined in paragraph (6)(B)) ending after December 31, 2013, in the amount specified in paragraph (3) for any covered part D drug of the manufacturer dispensed after December 31, 2013, to any rebate eligible individual (as defined in paragraph (6)(A)) for which payment was made by a PDP sponsor or MA organization under this part for such period, including payments passed through the low-income and reinsurance subsidies under sections 1860D–14 and 1860D–15(b), respectively. Such rebate shall be paid by the manufacturer to the Secretary not later than 30 days after the date of receipt of the information described in section 1860D–12(b)(7), including as such section is applied under section 1857(f)(3), or 30 days after the receipt of information under subparagraph (D) of paragraph (3), as determined by the Secretary. Insofar as not inconsistent with this subsection, the Secretary shall establish terms and conditions of such agreement relating to compliance, penalties, and program evaluations, investigations, and audits that are similar to the terms and conditions for rebate agreements under paragraphs (3) and (4) of section 1927(b).

(3)

Rebate for rebate eligible Medicare drug plan enrollees

(A)

In general

The amount of the rebate specified under this paragraph for a manufacturer for a rebate period, with respect to each dosage form and strength of any covered part D drug provided by such manufacturer and dispensed to a rebate eligible individual, shall be equal to the product of—

(i)

the total number of units of such dosage form and strength of the drug so provided and dispensed for which payment was made by a PDP sponsor or an MA organization under this part for the rebate period, including payments passed through the low-income and reinsurance subsidies under sections 1860D–14 and 1860D–15(b), respectively; and

(ii)

the amount (if any) by which—

(I)

the Medicaid rebate amount (as defined in subparagraph (B)) for such form, strength, and period, exceeds

(II)

the average Medicare drug program rebate eligible rebate amount (as defined in subparagraph (C)) for such form, strength, and period.

(B)

Medicaid rebate amount

For purposes of this paragraph, the term Medicaid rebate amount means, with respect to each dosage form and strength of a covered part D drug provided by the manufacturer for a rebate period—

(i)

in the case of a single source drug or an innovator multiple source drug, the amount specified in paragraph (1)(A)(ii)(II) or (2)(C) of section 1927(c) plus the amount, if any, specified in subparagraph (A)(ii) of paragraph (2) of such section, for such form, strength, and period; or

(ii)

in the case of any other covered outpatient drug, the amount specified in paragraph (3)(A)(i) of such section for such form, strength, and period.

(C)

Average Medicare drug program rebate eligible rebate amount

For purposes of this subsection, the term average Medicare drug program rebate eligible rebate amount means, with respect to each dosage form and strength of a covered part D drug provided by a manufacturer for a rebate period, the sum, for all PDP sponsors under part D and MA organizations administering an MA–PD plan under part C, of—

(i)

the product, for each such sponsor or organization, of—

(I)

the sum of all rebates, discounts, or other price concessions (not taking into account any rebate provided under paragraph (2) or any discounts under the program under section 1860D–14A) for such dosage form and strength of the drug dispensed, calculated on a per-unit basis, but only to the extent that any such rebate, discount, or other price concession applies equally to drugs dispensed to rebate eligible Medicare drug plan enrollees and drugs dispensed to PDP and MA–PD enrollees who are not rebate eligible individuals; and

(II)

the number of the units of such dosage and strength of the drug dispensed during the rebate period to rebate eligible individuals enrolled in the prescription drug plans administered by the PDP sponsor or the MA–PD plans administered by the MA organization; divided by

(ii)

the total number of units of such dosage and strength of the drug dispensed during the rebate period to rebate eligible individuals enrolled in all prescription drug plans administered by PDP sponsors and all MA–PD plans administered by MA organizations.

(D)

Use of estimates

The Secretary may establish a methodology for estimating the average Medicare drug program rebate eligible rebate amounts for each rebate period based on bid and utilization information under this part and may use these estimates as the basis for determining the rebates under this section. If the Secretary elects to estimate the average Medicare drug program rebate eligible rebate amounts, the Secretary shall establish a reconciliation process for adjusting manufacturer rebate payments not later than 3 months after the date that manufacturers receive the information collected under section 1860D–12(b)(7)(B).

(4)

Length of agreement

The provisions of paragraph (4) of section 1927(b) (other than clauses (iv) and (v) of subparagraph (B)) shall apply to rebate agreements under this subsection in the same manner as such paragraph applies to a rebate agreement under such section.

(5)

Other terms and conditions

The Secretary shall establish other terms and conditions of the rebate agreement under this subsection, including terms and conditions related to compliance, that are consistent with this subsection.

(6)

Definitions

In this subsection and section 1860D–12(b)(7):

(A)

Rebate eligible individual

The term rebate eligible individual means—

(i)

a subsidy eligible individual (as defined in section 1860D–14(a)(3)(A));

(ii)

a Medicaid beneficiary treated as a subsidy eligible individual under clause (v) of section 1860D–14(a)(3)(B); and

(iii)

any part D eligible individual not described in clause (i) or (ii) who is determined for purposes of the State plan under title XIX to be eligible for medical assistance under clause (i), (iii), or (iv) of section 1902(a)(10)(E).

(B)

Rebate period

The term rebate period has the meaning given such term in section 1927(k)(8).

(b)

Reporting requirement for the determination and payment of rebates by manufacturers related to rebate for rebate eligible Medicare drug plan enrollees

(1)

Requirements for PDP sponsors

Section 1860D–12(b) of the Social Security Act (42 U.S.C. 1395w–112(b)) is amended by adding at the end the following new paragraph:

(7)

Reporting requirement for the determination and payment of rebates by manufacturers related to rebate for rebate eligible Medicare drug plan enrollees

(A)

In general

For purposes of the rebate under section 1860D–2(f) for contract years beginning on or after January 1, 2015, each contract entered into with a PDP sponsor under this part with respect to a prescription drug plan shall require that the sponsor comply with subparagraphs (B) and (C).

(B)

Report form and contents

Not later than a date specified by the Secretary, a PDP sponsor of a prescription drug plan under this part shall report to each manufacturer—

(i)

information (by National Drug Code number) on the total number of units of each dosage, form, and strength of each drug of such manufacturer dispensed to rebate eligible Medicare drug plan enrollees under any prescription drug plan operated by the PDP sponsor during the rebate period;

(ii)

information on the price discounts, price concessions, and rebates for such drugs for such form, strength, and period;

(iii)

information on the extent to which such price discounts, price concessions, and rebates apply equally to rebate eligible Medicare drug plan enrollees and PDP enrollees who are not rebate eligible Medicare drug plan enrollees; and

(iv)

any additional information that the Secretary determines is necessary to enable the Secretary to calculate the average Medicare drug program rebate eligible rebate amount (as defined in paragraph (3)(C) of such section), and to determine the amount of the rebate required under this section, for such form, strength, and period.

Such report shall be in a form consistent with a standard reporting format established by the Secretary.

(C)

Submission to Secretary

Each PDP sponsor shall promptly transmit a copy of the information reported under subparagraph (B) to the Secretary for the purpose of audit oversight and evaluation.

(D)

Confidentiality of information

The provisions of subparagraph (D) of section 1927(b)(3), relating to confidentiality of information, shall apply to information reported by PDP sponsors under this paragraph in the same manner that such provisions apply to information disclosed by manufacturers or wholesalers under such section, except—

(i)

that any reference to this section in clause (i) of such subparagraph shall be treated as being a reference to this section;

(ii)

the reference to the Director of the Congressional Budget Office in clause (iii) of such subparagraph shall be treated as including a reference to the Medicare Payment Advisory Commission; and

(iii)

clause (iv) of such subparagraph shall not apply.

(E)

Oversight

Information reported under this paragraph may be used by the Inspector General of the Department of Health and Human Services for the statutorily authorized purposes of audit, investigation, and evaluations.

(F)

Penalties for failure to provide timely information and provision of false information

In the case of a PDP sponsor—

(i)

that fails to provide information required under subparagraph (B) on a timely basis, the sponsor is subject to a civil money penalty in the amount of $10,000 for each day in which such information has not been provided; or

(ii)

that knowingly (as defined in section 1128A(i)) provides false information under such subparagraph, the sponsor is subject to a civil money penalty in an amount not to exceed $100,000 for each item of false information.

Such civil money penalties are in addition to other penalties as may be prescribed by law. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under this subparagraph in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).

(2)

Application to MA organizations

Section 1857(f)(3) of the Social Security Act (42 U.S.C. 1395w–27(f)(3)) is amended by adding at the end the following:

(D)

Reporting requirement related to rebate for rebate eligible Medicare drug plan enrollees

Section 1860D–12(b)(7).

(c)

Deposit of rebates into Medicare Prescription Drug Account

Section 1860D–16(c) of the Social Security Act (42 U.S.C. 1395w–116(c)) is amended by adding at the end the following new paragraph:

(6)

Rebate for rebate eligible Medicare drug plan enrollees

Amounts paid under a rebate agreement under section 1860D–2(f) shall be deposited into the Account.

(d)

Exclusion from determination of best price and average manufacturer price under Medicaid

(1)

Exclusion from best price determination

Section 1927(c)(1)(C)(ii)(I) of the Social Security Act (42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is amended by inserting and amounts paid under a rebate agreement under section 1860D–2(f) after this section.

(2)

Exclusion from average manufacturer price determination

Section 1927(k)(1)(B)(i) of the Social Security Act (42 U.S.C. 1396r–8(k)(1)(B)(i)) is amended—

(A)

in subclause (IV), by striking and after the semicolon;

(B)

in subclause (V), by striking the period at the end and inserting ; and; and

(C)

by adding at the end the following:

(VI)

amounts paid under a rebate agreement under section 1860D–2(f).