Floor Statements

Madam President, I ask unanimous consent the order for the quorum call be rescinded.

I ask unanimous consent that I be able to speak in morning business.

Surely.

cloture motion

Madam President, today I wanted to speak on an issue I speak on many times, drug safety. Today is a little different approach to it, though, because earlier today the Committee on Health, Education, Labor, and Pensions began marking up S. 1082, the Food and Drug Administration Revitalization Act. For the first time in almost a decade we have an opportunity to reform, to improve, and to reestablish the FDA as an institution committed to making patient safety as important as bringing new drugs to the market.

S. 1082 presents a framework for the future of drug and device safety. I am gratified by some of its current contents and I express some disappointment about others. That is the purpose of my speaking to my colleagues.

First, I am gratified the bill attempts to address some of the overarching issues plaguing the FDA that have been repeatedly revealed by the investigations I conducted of the FDA over the last 3 years. In particular, S. 1082 takes a number of steps to address the issue of transparency, the issue of accountability, and the issue of respect for the scientific process that has been lacking for some time at the FDA. S. 1082, for example, requires that within 30 days of approval, the action package for approval of a new drug must be posted on the FDA's Web site. This requirement, however, only applies to a drug with an active ingredient that has not been previously approved by the FDA. The action package would contain all documents generated by the FDA related to the review of a drug application, including a summary review of all conclusions and, among other things, any disagreements and how these disagreements were resolved. If a supervisor disagreed with the review, then the supervisor's opposing review would be available to the public. And to address the many allegations that the Food and Drug Administration safety reviewers are sometimes coerced into changing their findings, I greatly welcome the provision that states a scientific review of an application is considered the work of the reviewer and must not be changed by FDA managers or the reviewer once that review is final.

The bill also takes steps to bring more resources to the FDA for drug safety, another matter I have been discussing for years. In addition, the bill requires the Food and Drug Administration's Drug Safety and Risk Management Advisory Committee to meet

at least two times a year to address safety questions and to make recommendations regarding post-market studies.

I am also heartened to see that the bill incorporated several elements from the Dodd-Grassley bill entitled the Fair Access to Clinical Trials Act of 2007. S. 1082 ensures that the clinical trial registry includes trials of devices approved by the FDA. The bill requires a drug sponsor to certify at the time of the submission of a drug, biologics, or device application to the agency, that the sponsor has met all of the clinical trial registry requirements.

Last but not least, S. 1082 attempts to give the Food and Drug Administration some teeth by requiring specific civil penalties, monetary penalties for submission of false certification, and false or misleading clinical trial information.

These are, in my mind, some of the good things that are proposed in S. 1082. I wish to thank Chairman Kennedy and Ranking Member Enzi in this regard.

I hope additions such as these, which strengthen S. 1082, will make it through the HELP Committee's vote as the committee considers further changes. As I said earlier, I am both gratified and disappointed by the contents of S. 1082.

I turn now to some of what I consider to be lacking in the bill, that in my mind fails to address some of the issues that are critical to reestablishing the FDA's mission and putting John Q. Public and not PhRMA at the helm of the FDA.

I commend the HELP Committee's attempt to ensure that the office responsible for post-market drug safety is involved in, among other things, decisions made regarding labeling and post-market studies by making specific references to that office throughout S. 1082. However, the bill does not address the outstanding critical problem that the office responsible for post-market drug safety lacks the independence, lacks the authority to promptly identify serious health risks and take necessary steps that will protect the public.

As I think we all agree, the Federal Drug Administration is in desperate need of major overhaul. Over the past 3 years, my investigations have demonstrated that the depth and the breadth of the problems plaguing the FDA on both the drug and device side ought to stand out in everybody's mind as something Congress ought to be dealing with. Senator Dodd and I have written two bills that we believe will greatly enhance drug and device safety and improve transparency at the FDA and, most importantly, prevent another Vioxx debacle.

The Federal Drug Administration's Safety Act of 2007 and the Fair Access to Clinical Trials Act of 2007 are intended to address some of the problems plaguing the FDA at its very core. Those are the bills that are the Grassley-Dodd bill and the other is a Dodd-Grassley bill.

Let me be clear: Big PhRMA does not like these bills. FDA management does not like these bills. Lobbyists are spending hours upon hours lobbying against these bills. The Food and Drug Administration Revitalization Act does not embrace all the critical elements of the Dodd-Grassley and the Grassley-Dodd bill.

Let me ask each and every Member of the Senate the following: What is wrong with establishing a separate center within the FDA--not outside the FDA, within the FDA--with its only job being that of a watchdog for those drugs already in the market? What is wrong with supporting a group of committed FDA scientists who only watch for serious adverse effects that may pop up only occasionally, perhaps only 1 in 10,000 or 1 in 20,000? What is wrong with ensuring that all clinical trial results, regardless of their outcome, are available to the scientific community, health care practitioners, and the public? What is wrong with supporting a clinical trial registry and results database that also requires sponsors to reveal their negative trials? And what is wrong with giving the FDA strong enforcement tools to combat bad players?

I propose there is nothing wrong with any of these proposals, particularly the proposals that a new, separate, and independent center be created to address post-market surveillance, a proposal supported by Senator Dodd and me, not once but twice.

I have heard the naysayers and the naysayers' many bogus arguments about why a new post-market drug safety center will not work. The arguments range from the absurd to the ridiculous.

I will also address a few of those for you today. One argument is the creation of a separate center will slow down the drug approval process and delay much needed drugs from those who need them.

This argument is, in plain English, a nonstarter. Why? Because this new center will be devoted to keeping an eye on drugs once they are already on the market, postmarketing surveillance.

Another argument is that a new postmarket drug safety center will create an unmanageable bureaucracy at the FDA. That is a bogus argument. Why would taking an already existing office at the Food and Drug Administration, moving it on an organizational chart and providing it with new authority to watch for unknown and unexpected adverse events be bad? It does not make sense.

These arguments at first blush made an impression on Dr. Steven Nissen, chair of the Department of Cardiovascular Medicine at Cleveland Clinic and immediate past president of the American College of Cardiology, who was not an original supporter of establishing a separate center within the FDA to address postmarketing surveillance.

But, over time, his views have changed. Dr. Nissen probed more, evaluated the facts more, and as he talked more to on-the-ground FDA staff members, Dr. Nissen changed his mind and told the American public so.

Dr. Nissen recently sent me a letter stating that not only does he support the Fair Access to Clinical Trials Act but also the Food and Drug Administration Safety Act. In other words, Dr. Nissen said:

In particular, I support the creation of a new independent

center within the FDA called the Center for Post-Market

Evaluation and Research for drugs and biologics. Although I

had previously expressed some concern about creating this

center, I have become convinced that the separation of post-

market surveillance from the Office of New Drugs represents

the best opportunity to improve the performance of the FDA in

handling drug safety issues.

I ask unanimous consent to have that letter printed in the Record.

Coupled with Dr. Nissen's letter of support, I also received a letter from Dr. Curt Furberg, professor of public health science at

Wake Forest University School of Medicine. Dr. Furberg is not only a professor of medicine, but he is also a member of the Food and Drug Administration Drug Safety and Risk Management Advisory Committee.

Dr. Furberg knows the FDA from the inside, and you might say he knows it inside-outside, in and out. In fact, even Dr. Furberg has written me to say he is supportive of creating a new center, and he is particularly supportive of creating a new enforcement tool to be used against bad players in the drug industry.

I also have that letter and would ask unanimous consent to have it printed in the Record as well.

Madam President, if these two thoughtful leaders can come forward and support a new center that is devoted to watching drugs once they are on the market so that American consumers and their doctors know about a problem promptly, what is wrong with that? That is why I hope the HELP Committee will take a second look at the Dodd- Grassley bill. We have seen time and again that the FDA is not as good at this function as it should be. However, the reality is that the FDA needs to perform this function well because lives of American citizens and maybe around the world depend on it.

I wish to see a bill passed that prevents another Vioxx debacle. This Congress has an opportunity to make meaningful and positive changes. Let's not allow that opportunity to slip through our fingers.

Medicare

Madam President, I have another set of remarks that I wish to make dealing with the issue that we had before the Senate today, and that we had a cloture vote on, S. 3. Members on the other side of the aisle, including the assistant majority leader, said that Republicans do not want this debate. What are they talking about, do not want a debate about anything dealing with Medicare prescription drugs and all those sorts of things?

This body has debated the so-called prohibition on Government negotiation. The Senate had four votes on this issue. What is rather amusing to me about the statement that we do not want the debate is that they did not seem to want the debate when the Senate considered S. 1.

S. 1 was the Senate version of the Medicare drug law. That bill had a noninterference clause in it just like the current law does. It is that clause that the other side has distorted to come up with the absurd claim that no negotiations occur under the Medicare drug benefit. Not once, I repeat, not once during the entire time that S. 1 was on the Senate floor in the year 2003 did anyone on the other side of the aisle bring up this issue.

That is because this is not an issue of merit, it is simply one born out of political pandering. The assistant majority leader also talked about how Medicare should look like the VA because the VA seems to get lower prices.

The VA gets lower prices because the Government passed a law to guarantee itself an automatic discount that no one else can get. By law, that price is automatically 24 percent less than the average price paid by basically all non-Federal purchasers. That is not negotiation, that is a federally mandated price dictation, or you might call it a 24-percent discount, but it is federally mandated.

I agree that the logical question then is: Why not have Medicare get that price? Experts who testified at the Senate Finance Committee, even the VA itself at a 2001 hearing before the Committee on Veterans' Affairs gave us the answer: They said that giving the Medicare VA prices will increase prices for veterans. Now, why would anybody in this body want to increase prices for veterans?

Now I wish to turn to how the VA uses its own pharmacy benefit manager or PBM as we refer to them. The pharmacy benefit manager for the VA--the VA has one. In 1995, as part of an effort to better manage and monitor drug usage and purchasing and utilization oversight across the entire Veterans' Administration, the VA established its own benefit manager.

The VA did it because it wanted to have its pharmacy operation work similar to the private sector. They did it because, as stated in the VA news release, they wanted to maximize a developing business strategy in the private sector. That business strategy was getting lower prices on drugs in the private sector.

So here we have people holding out the VA as a model, which uses its own PBM to negotiate, and at the same time they are saying: Using PBMs in Medicare is wrong.

Remember, that process has brought 35-percent lower costs on the 25 most used drugs by seniors under the Medicare Program. I cannot help but see how that is a bit of irony when people say they want Medicare to negotiate like the VA negotiates.

Well, the VA negotiates through its PBM. So the funny thing is, the VA actually negotiates similar to Medicare drug plans. You heard that right, but let me state it again. The VA system for negotiating is just like the one already used by Medicare through prescription drug plans that seniors join.

If the VA's PBM looked at itself in the mirror, it would see a Medicare drug plan's PBM staring right back at it. There is another important difference between the VA and Medicare. The VA prescription drug benefit is just one part of the VA's health care delivery system. It is a very different system than Medicare.

The VA system requires veterans to use VA hospitals, to use VA physicians, to use the VA national formulary, to use their pharmacies, and to use their mail order pharmacy. Now, don't get me wrong. The VA has a good system that works for veterans. But what it comes down to is choice. So I have a chart I want you to look at. Under the Medicare prescription drug benefit, beneficiaries have choices. They can choose the plan they want, a plan that covers all their medicines. They can choose the doctor and the hospital they want. They can go to their local pharmacy.

Even the VA recognizes this fact. On its own Web site in a ``frequently asked questions'' page, the VA does not recommend that veterans cancel or decline coverage in Medicare because a veteran may want to consider the flexibility afforded by enrolling in both the VA plan and the Medicare plan.

For example, veterans enrolled in both programs may obtain prescription drugs that are not on the VA formulary if prescribed by a non-VA physician and filled at a local pharmacy.

Making all Part D programs look like the VA and its formulary then will severely restrict access and will severely restrict choice to the 44 million Medicare beneficiaries. Now, the other side says: No. No. We are not going to limit access to drugs. Yes, as I pointed out this morning, every Democrat on the Finance Committee cast a vote against my amendment that would have prohibited the Secretary from creating a national preferred drug list.

I had thought, for all the talk about not allowing a Government formulary, the proponents of S. 3 would embrace a

provision banning preferred drug lists. If they do not want to limit beneficiaries' access to drugs, my amendment should have been easy for them to support.

But by voting against my amendment, they were voting in favor of the Government setting a preferred drug list. Now, the preferred drug list might sound like a good thing, but in reality it is not. It is a Government-controlled list of drugs that you can or cannot have because the Government is not going to pay for what they say you cannot have.

The preferred drug list then operates similar to a formulary. In my opinion, if it walks like a duck, if it quacks like a duck, then it is a duck. But that is not what the courts have found. So what does that mean for Medicare beneficiaries? It means that even though S. 3 prohibits the Secretary from using a formulary, it does not prohibit the Secretary from using a preferred drug list. It is clear now then from all this analysis and their votes on this amendment that supporters of this Senate bill want the Government to set a preferred drug list. They want the Government to determine for what seniors can get coverage.

A number of States have implemented preferred drug lists. Michigan, for example, has a preferred drug list. Here is what the Kaiser Family Foundation found in a 2003 case study on that preferred drug list:

Fearing opposition from the pharmaceutical industry, the

State sought virtually no input from providers, pharmacists,

beneficiaries and manufacturers.

Continuing the quote:

Ultimately the department [meaning Michigan] made only a

few changes to the list of drugs on the Michigan preferred

drug list in response to beneficiaries and provider concerns.

Both the Illinois House and the Illinois Senate resolutions were introduced in 2002 to establish a committee to oversee that State's preferred drug list.

The resolution noted that the creation of Illinois' preferred drug list ``could lead to unintended consequences such as inferior health care, increased hospitalizations and emergency care, increased admissions into long-term care, and unnecessary patient suffering and potentially death.''

In a statement about this bill, S. 345, the assistant majority leader said that: The Medicare-administered plan envisioned under this bill would have a preferred drug list.

So this morning I talked about fitting all of the pieces of a legislative puzzle together.

Here are some of those pieces: The bill approved by the House allows price controls. The bill that was before the Senate does not prohibit the Secretary from dictating the drugs beneficiaries can get. We have Senator Durbin's statement about his own bill and how he envisioned a preferred drug list.

So despite claims by those on the other side of the aisle, this bill is not harmless to senior citizens. If this Trojan horse attack succeeds in a Government takeover of the drug benefit, here is what seniors can look forward to: They can look forward to fewer choices. They can look forward to fewer opportunities to choose a plan that best meets their needs--the needs of 44 million senior citizens in America.

If the Senate bill were to pass, seniors will get only the drugs some Government bureaucrat determines they can have. All other Americans will see the prices of their prescription drugs going up. That is not me saying it. Professor Scott Morton of Yale University testified before the Senate Finance Committee to that mathematical fact, that if you have 44 million senior citizens, and you have the Government dictating the price, when you deal with that number of people, the price is going to go up for everybody. If that is what the other side calls harmless, I shudder to think what their definition of ``harmful'' might be.

We should have and did stop this bill in its tracks. Voting no was a vote against Government-controlled drug lists, Government setting prices, and Government restrictions on seniors' access to drugs. That was the right thing to do today, and I am glad the vote came out the way it did. I hope it stays that way because if it ain't broke, don't fix it.

(Mr. Casey assumed the Chair.)

Mr. President, I would like to take a moment today to honor the distinguished civil service career of a particularly remarkable senior law enforcement official. Mr. Gary J. Lang recently retired from his position as chief of staff of U.S. Immigration and Customs Enforcement in the Department of Homeland Security and in doing so, this special agent will leave behind a legacy of exceptional accomplishment and dedication to his country.

Over the years, Mr. Lang has successfully handled a series of professional challenges that truly distinguish him as one of our Nation's outstanding leaders. His entry into the Federal service in 1978 as an investigator with the Food and Drug Administration began a tradition in law enforcement to protect the public interest that exists to this day.

From his time at the FDA, through the Defense Investigative Service, and as a special agent with the U.S. Customs Service working in south Florida during an era known for its smuggling, drug trafficking and the related criminal violence, Mr. Lang demonstrated courage, honesty, and leadership in positions of increasing responsibility that have become defining characteristics of his career. He earned the respect of his colleagues and supervisors for his operational and managerial expertise in the field.

The Hill benefited from Mr. Lang's expert Federal law enforcement knowledge during the more than 4 years he spent supporting me through his work on various committees, including serving as special assistant for the Caucus on International Narcotics Control, as well as his time working with staff on the Judiciary and Finance Committees. The positive impact Gary had upon our initiatives through his expertise, dedication and memorable dignity was truly meaningful to me and our work effort.

More recently, in a headquarters management position as deputy executive director of operations/transition teams, Mr. Lang participated at the very center of the decision making that defined the investigative role the DHS would have in its mission to protect the public against acts of terror, and resulted in the creation of U.S. Immigration and Customs Enforcement, the second largest investigative agency in the Federal Government. And, as a senior executive, Mr. Lang served as assistant director for ICE's Office of Investigations, managing the operational activities of a staff of 7,000 across the Nation and around the world.

Mr. Lang most recently served as the chief of staff at ICE, where he spearheaded the advancement of the Assistant Secretary's mission- critical goals across the full spectrum of the agency's operations and administrative lines of business, through its staff of 16,000. He worked diligently to ensure that ICE maximizes the application of its strategic resources to enforce U.S. trade and immigration laws and to target and neutralize national-level homeland security risks under ICE's legal authorities. Mr. Lang leads by example, by holding himself and others accountable in achieving ICE's highest

priority goals, in demanding a proactive approach in addressing emerging homeland security issues, and by setting the standard for dedication, morale and integrity throughout the ICE workforce.

Mr. Lang has distinguished himself at every level of Federal law enforcement and has engendered respect and appreciation from subordinates, peers, and leadership alike. I am glad to be able to congratulate him and honor his memorable career as it comes to a close after nearly 29 years in the Federal Government. We on the Hill wish both Gary and his wonderful wife Karyn the very best of luck for the future and thank them for their years of public service.

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

Mr. President, I ask to speak as in morning business for half an hour, although I probably will not speak that long.

Mr. President, earlier this year I gave a series of statements on this floor on the Medicare prescription drug benefit. Back then, I said I was informing my colleagues because in the near future Congress would consider some fundamental changes in how the benefit works.

Well, for the entire Senate, the future is now. Last week the Senate Finance Committee marked up legislation on the so-called prohibition on Government negotiations under the Medicare prescription drug benefit. When I gave these four statements during February, I said it was important for the public and also for Medicare

beneficiaries to understand the proposed changes, and that it was equally important to explore the effects these changes would have.

Those reasons still hold true this very day. They are even more important now as the Senate gears up for action on that ill-advised legislation. I will inform my colleagues on this topic today, tomorrow, and the rest of the week, if I need to, because I want to make sure everyone understands the consequences of this legislation that is going to change the Medicare Program and hurt the Medicare Program, a program that is working; that if it ain't broke, don't fix it. I am willing to talk about this issue until I am blue in the face.

First, everyone should recognize that political opponents of the drug benefit that we call Part D of Medicare have tried for 4 years to tear this benefit apart since day one. Day one dates back to December 2003, when the President signed the bill. These naysayers feel Government can always manage better. They want a Government-run benefit program of drugs in Medicare, and they want the Federal Government dictating drug prices, as if the Federal Government can dictate drug prices.

Thankfully, the naysayers lost when that legislation was being considered. But that has not stopped them from constantly whining and carping about the drug benefit that is now law. The naysayers said there would be no prescription drug plans. Then when there were plenty of prescription drug plans coming into the system, approved by the Secretary of HHS to administer to the seniors of America, they said there were too many plans.

The naysayers said it was too confusing, that the seniors would not be able to choose plans, even arguing that there would be a small number of seniors signing up.

But the seniors have enrolled. In fact, 92 percent of the seniors in America are covered by a prescription drug plan. And what about their satisfaction? Interviews show a great deal of satisfaction on the part of seniors with the plans.

Then the naysayers suggested plans could change their prices and the drugs they cover at the drop of a hat, which has not happened. So the naysayers were wrong again. They did all they could to taint beneficiaries' views of the benefits before it even got off the ground. But the naysayers' biggest criticism of the drug benefit is that, according to them, the Government does not negotiate with drugmakers for lower prices.

Now I will show you how silly that is and how wrong that is and, more importantly, how misleading that is. I say according to ``them,'' meaning according to the naysayers, because they have gone to great lengths to make it sound as though nobody is negotiating with drug companies. If you believe the naysayers out there, you would think that drug companies name their price and Medicare is forced to pay it. That is so wrong that it truly boggles the mind. It seems to me, as I see these arguments, there is no embarrassment on the part of the naysayers' part.

Now, it is correct, of course, that the Secretary of Health and Human Services himself does not negotiate with drug companies, but it is absolutely not correct to say there are no negotiations. That is complete and utter nonsense. It is embarrassingly wrong. Under the Medicare drug benefit, multiple drug plans compete against each other for the membership of seniors and disabled people covered by Medicare. These plans compete to get the lowest prices from manufacturers, for you as a member, because they want to keep you as a member.

In fact, these plans want to be the best negotiators and to offer beneficiaries the best possible drug plan with low premiums, low cost sharing, and even with additional benefits. They compete to be the plan that beneficiaries want to join.

Now, is this something new? No, it is nothing new. This is the same approach used for health care benefits for every Member of Congress, and 3 million Federal employees, under what we call the Federal Employee Health Benefit Program. If beneficiaries do not like the job their plan is doing, you can fire your plan. You can leave it, join another plan. You can choose a better plan. Yet, you see, it is actually very simple how this works; very simple. Harnessing the power of competition among plans gives the Medicare Program beneficiaries and the taxpayers access to better negotiation than anything the Government could do on its own.

In fact, there are five negotiators out there that are negotiating in a bigger way than even the Federal Government can. Can you imagine that, there are five negotiators that are bigger than the Federal Government that were negotiating this? Competition, then, is the mainstay of our free market economy. Businesses compete every day in almost every sector of our economy to produce the products consumers most want at a price that consumers pay, which is probably what consumers can afford.

But the naysayers of the drug benefit somehow do not like that. They are uncomfortable with the free market. They want the Government to run everything. They want the Government itself doing the negotiation. They find it hard to believe anyone could do a better job negotiating than big Government.

Of course, along the lines, they are ignoring the simple fact that competition is working. They are ignoring that competition has led to lower premiums, $22 this year instead of $23 last year, instead of $37 when we wrote the legislation.

They are ignoring that competition is bringing choices to beneficiaries, those who said we would never have choice, that you could not use plans because plans would not work. You know what. Those very Members of Congress are wrong, because in my State there are 43 plans. Will there always be 43 plans? No, I imagine there are some that are small, will weed themselves out, will be bought. These people are ignoring that the Government is not actually very good at figuring out what it should pay for drugs. They are ignoring the fact to carry on with the political scam that they committed against beneficiaries and against the public.

I have a chart I used a month ago that I want to show again. On it is a quote from the Washington Post, recognizing as well, when it wrote the following in an editorial, that this is a political scam and that governments don't do a very good job of negotiating:

Governments are notoriously bad at setting prices, and the

U.S. Government is notoriously bad at setting prices in the

medical realm.

We knew this because of the Government's experience paying for drugs covered by Medicare Part B. There are not very many drugs covered by Medicare Part B, but there have been a few and over a long period of time. What did we learn from that experience of Part B Medicare? These happen to be the drugs that are given during a physician's office visit or other drugs such as oral cancer drugs. Medicare payments for these drugs were based on what is called the average wholesale price, AWP. It is similar to a sticker price for a car. No one actually pays that price on the sticker of a car. The joke was that average wholesale price or AWP actually stood for ``ain't what's paid.'' Over the past decade, reports issued by the inspector general, by the Department of Justice, and by the Government Accountability Office found that by relying on average wholesale price, Medicare was vastly overpaying for these drugs. Recommendations were made to change payments so they reflected actual market cost. The Clinton administration tried to make some of these changes but after pushback from providers, it backed off.

Congress took another run at this issue in 2003 in the Medicare Modernization Act and was successful. Congress reformed how Medicare pays these drugs under Part B, not Part D. Medicare now bases its payment for many of these drugs on a market-based price, a real price, not the average wholesale price, not the ``ain't what's paid'' price because it wasn't paid. This change, believe it or not, is saving the taxpayers and beneficiaries, but it took years to get that fixed. In all that time, Medicare and taxpayers paid too many dollars for drugs, wasted money, billions and billions of dollars wasted. So using the Part B tradition, we don't want to make the same mistake. We don't want to repeat that experience under the new Part D of drugs for Medicare.

We also knew Medicare overpays for a lot of other services and equipment.

The bookshelves are full of other reports from the General Accounting Office, from the inspector general, from the Medicare Payment Advisory Commission, from the Congressional Budget Office, and others, about how Medicare is paying too much in too many areas. For example, Medicare overpaid for durable medical equipment for years until the Republican- led Congress made changes in the 2005 Deficit Reduction Act. In addition, each year the Office of Inspector General issues what is called the Red Book, which presents cost savings recommendations. The books are usually 50 or more pages long, and the recommendations span all aspects of Medicare--hospitals, physicians, home health care plans, and others. This is more evidence of the many areas where Medicare doesn't get the best deal.

Congress has even created the Medicare Payment Advisory Commission, called MedPAC, to provide advice to Congress on payments for services. Every year, Congress hears recommendations from MedPAC to address Medicare overpayments, but many times it takes years for the Secretary of Health and Human Services or for the entire Congress to act to save the taxpayers money. In making recommendations, MedPAC looks at profit margins, for example. One type of provider had been found to have margins of 17 percent off of Medicare payments. The Congress has been able to act on many MedPAC recommendations, but it can be very hard to accomplish these changes. I remember when I was chairman of the Senate Finance Committee over the last 4 years. I received letters from Members saying something like: Please don't cut payments for this provider group or that provider group.

In fact, on the Senate floor just before recess, I fought to prevent this very Senate from freezing a Center for Medicare Services' rule that would have prevented wasteful spending in the program we call Medicaid. Is the rule a good thing or a bad thing? We didn't bother to hold the first hearing on the subject. The only thing that mattered was that a group of providers complained. Like the Clinton administration found, letters and complaints such as that can make it difficult, in the very short order, to do anything about a problem, despite the compelling evidence of overpayments, despite the high profit margins, despite the fact that a proposed change could save taxpayers billions of dollars.

Those of us who wrote the Part D Medicare drug plan passed 4 years ago--and that was mostly Senator Baucus for the Democrats and me for the Republicans--were concerned that this same kind of dynamic might happen with this Part D program. Political pressures on Medicare drug benefits would tie the hands of the Secretary of Health and Human Services. If that happens, the programs would be unmanageable and costs would skyrocket. Instead, Congress put competing private plans in charge of negotiating. These plans and their negotiators have years of experience in this arena. This is what they do for a living. Health and Human Services has had very little experience and a very dismal track record.

On this chart, these plans and their negotiators and managers have powerful bargaining clout in the market. They manage the drug coverage for tens of millions of people. There are plans that cover upwards of 50 million people--75 million, in one case--far more than the 41 million Medicare beneficiaries. Clearly, Medicare beneficiaries account for a large number of all prescriptions filled each year, so some might argue that 41 million beneficiaries have more clout than 75 million nonbeneficiaries, but numbers alone do not necessarily translate into lower costs.

As evidence of that, we had all sorts of experts come before the Finance Committee in January on this very topic. In response to questions I asked, particularly of Professor Scott Morton of Yale University, he said it doesn't matter whether you negotiate on behalf of 1 million or 43 million people; what matters is what leverage you have and how you use that leverage.

I think I ought to emphasize that. It is how you use the leverage. So it is what is done to leverage those numbers, then, that leads to lower costs. That leverage comes from the plan being able to say to a drug company something such as: I can get a better deal on drug A from a different manufacturer that has the same clinical effect as your drug B. If you can't match it or do better, then I am going to leave the table.

Some plans will get a better deal on drug A and put it in their formulary. Some plans will get a better deal on drug B. But many experts agree--and experience suggests--that it would be difficult for the Government itself, our Government, to walk away from the table. There would be enormous pressure to cover everything. If it did, the negotiating power lies not with the Government but with the manufacturers.

Here is what Professor Scott Morton said would happen if someone negotiating drug prices couldn't have a formulary:

Each manufacturer would know that, fundamentally, Medicare

must purchase all products. The Medicare ``negotiator'' would

have no bargaining leverage, and therefore, simply allowing

bargaining on its own would not lead to substantially lower

prices.

At the same hearing, we had another witness. That witness was Mr. Edward Haislmaier, of the Heritage Institute. I would like to quote him from his written testimony:

[that] volume purchasing encourages manufacturer

discounting, it is not, in and of itself, sufficient to

extract large discounts. Manufacturers will only offer

substantial discounts if the buyer combines the ``carrot'' of

volume with the ``stick'' of being able to substitute one

supplier's goods with those of another.

In drug negotiations, that stick is called a formulary. Plans participating in drug benefits can use that stick. Expert after expert agrees it would be difficult, if not impossible, for the Government, however, to use that stick under Medicare. In fact, in a November 2 Wall Street Journal opinion piece, Dr. Allen Enthoven, an economist at Stanford University, wrote:

When the government negotiates, its hands are tied because

there are few drugs it can exclude without facing political

backlash from doctors and the Medicare population, a very

influential group of voters.

Let's be honest with each other. What do you think would happen in the Senate if the Center for Medicare Services, CMS, tried to cut a large drug company headquartered in New Jersey or North Carolina, for example, completely out of Part D because they wouldn't meet the Government's price demands? Would Senators from those States say something such as: Oh, well, that is just too bad? Would any of you say that if it was in your State that a manufacturer was being cut out? Again, let's be honest with each other.

What are we left with then? At the January Senate Finance Committee hearing, Professor Scott Morton said that without a formulary--the ``stick,'' as I refer to it--the Secretary would have about as much negotiating power as you would get by calling a drug maker and saying something such as: I would like you to offer a lower price. Their answer might be: Why should I? You have to buy my drug, so why would I offer you a lower price? About all you have left after that is: Please, won't you give me a lower price? That is not going to get you very far.

If my friends on the other side of the aisle think this bill is going to achieve real savings for consumers or the Federal Government, they must have some ideas in mind. I can't believe my friends would come to the Senate floor with a bill that is truly as ``do nothing'' as CBO describes it.

Here is what the Congressional Budget Office said about S. 3. It would have ``a negligible effect on federal spending.'' Another quote:

Without the authority to establish a formulary, we believe

that the Secretary would not be able to encourage the use of

particular drugs by Part D beneficiaries, and as a result

would lack the leverage to obtain significant discounts in

his negotiations with drug manufacturers.

So let me repeat that other quote: It would have ``a negligible effect on federal spending.''

The bill we are considering and voting on tomorrow cannot possibly be as innocuous or inconsequential as what the Congressional Budget Office said. Certainly, there must be creative ideas out there to find savings we have not considered.

Since the Finance Committee's markup of S. 3 the other night, I have been considering how a Secretary

might use his imagination to find savings. One of the first places we looked at was H.R. 4, the bill that passed the Senate.

H.R. 4 struck the language in the statute that prevents the Secretary from instituting a price structure for reimbursement of covered drugs. Did the House strike the ban because they want an imaginative Secretary to use price controls as part of negotiations? Because all we have heard is they do not want price controls.

Last Thursday night, we offered an amendment to S. 3 to prevent the Secretary from using a preferred drug list, or PDLs as they are called. A preferred drug list is just a formulary under a different name. It is essentially a Government-controlled list of drugs that you can or cannot have.

While I do not think there is a difference between formularies and preferred drug lists, we have seen the courts rule that a State can use one in Medicaid even though Medicaid bans the use of formularies.

So Thursday night, we had an amendment to prevent the Secretary from using preferred drug lists. After all, we do not want the Secretary coming up with a list of drugs you can or cannot take, do we?

To my surprise, the Democrats on the committee rejected my amendment. So what is going on? Perhaps they think that having the Government establish a preferred drug list is one of the imaginative ideas a Secretary will be able to use to save money.

I think this bill is a Trojan Horse. It is dressed up as a do-nothing message bill. But before the week is out, we are going to look inside that horse and see all the bad that could be waiting to hurt beneficiaries. We will see what is bad in this bill that will hurt access and choices beneficiaries currently have in this Medicare drug benefit program.

Maintaining access and choice--access and choice--is critical because beneficiaries have different drug needs. The way the benefit is structured now is that plans can have different formularies. Some might get a good price on one drug; another might get a better price on another drug. They can have different formularies, and beneficiaries can have choices that meet their needs.

When Congress finished work on the new drug benefit in 2003, we knew it was an experiment. Nothing like this had ever been tried. Here is what we learned: Private competition works. It has been successful at keeping costs down. The 25 most used drugs by seniors cost 35 percent less. Plan bids have come in lower than expected. This year, they were down 10 percent from last year's bids.

Premiums are lower than they were estimated to be. Before 2006, Medicare's chief actuary estimated the average monthly premium would be $37, but it was actually $23 in 2006. That is 38 percent lower than expected. Because of the strong competition between plans, the average premiums for beneficiaries is expected to be about $22 in 2007, not the $39 that had been estimated.

Why? Private competition works.

The net cost to the Federal Government is also lower than expected. In January, the official Medicare actuary announced that the net 10- year cost of Part D has dropped by $189 billion over the original budget window used when the Medicare Modernization Act was enacted. That is 2004 to 2013. That is a 30-percent drop in the actual cost compared to the projection.

Why? Because private competition works.

The savings are unheard of for a Government program of any kind. Where else have you ever heard of a cost underrun in a Federal program?

Mr. President, could I please have 4 more minutes? I ask unanimous consent for that additional time.

I wish to emphasize: We have a cost underrun in a Federal program. When have you ever heard of that?

You could not get those lower prices and lower costs unless the prescription drug plans are being strong negotiators with the drug makers. States are also saving money in lower contributions, better known as ``clawback'' payments. State clawback payments are now projected to be $37 billion less over a 10-year period. That is 27 percent lower. Just in 2006, States saved $700 million.

Why? Because private competition is working.

The plans are negotiating lower prices for drugs. I have said so many times, for the top 25 drugs used by seniors, the Medicare prescription drug plans have been able to negotiate prices that on average are 35 percent lower than the average cash price at retail pharmacies--35 percent lower.

Why? Because private competition is working.

Here are some examples: Lipitor is 15 percent lower, Atenolol is 63 percent lower, while Fosamax is 30 percent lower. I could go on down the list.

Now, when the drug benefit was signed into law, we believed it would work and hold down costs. That is certainly happening today even more than we expected because private competition works.

We also said that if it did not work--if the negotiating model used for the drug benefit did not hold down costs--then Congress would need to reexamine things. If costs grew too fast, then the whole idea would have to be revisited.

Maybe we would have to restrict access to drugs. Maybe we would have to rely more on mail order pharmacies instead of liberal access to local retail pharmacies. Maybe more drastic cost-cutting measures would be needed.

But that is not the position we are in today. Why? Because private competition works.

I hate to sound like a broken record, but I think the naysayers out there need a little repetition therapy. Everyone has heard the old saying that ``if it ain't broke, don't fix it.'' It certainly applies here, and the evidence shows it.

I would like to be the first one to say that the Medicare drug benefit is not perfect. There are improvements that can be made. Congress should look at ways to make it easier for low-income beneficiaries to get the additional assistance they need by reexamining the low-income subsidy asset test.

We need to look at payments to pharmacies and make some reforms in that area. We need to look at ways we can simplify the enrollment process. And there are other areas where we can make improvements.

But one area that is working very well is the negotiating power of Medicare drug plans. They have shown their ability to hold down costs. It is working.

The pleas from the naysayers to put the Government in charge of negotiating are about politics, not policy. These voices have not given up in their misguided quest to score political points with the drug benefit. It saddens me the Democratically controlled Congress has devoted so much time to this issue rather than looking at some of the improvements we can make in Part D that I mentioned.

Why they have put politics ahead of constructive changes is beyond me.

In January, I had hoped we could put politics aside and focus on some of the real improvements we could be making with the drug benefit. But, sadly, that is not the case, and that is why I am here today.

Under the drug benefit today, with the plans negotiating with drug makers and competing with each other, we have lower drug prices for beneficiaries, lower program costs for the Government--saving the taxpayers money--and prescription drug choices for beneficiaries.

Private competition works.

Mr. President, I urge my colleagues to oppose S. 3. It is a big government takeover of the private market that is working for the Medicare benefit.

I yield the floor.

Mr. President, today I take a few minutes to honor a great man of faith. Pastor Rhio Cleigh dedicated the past 25 years to serving his community through the church. The last 15 of those years have been at my home church--Prairie Lakes Church in Cedar Falls, IA.

The work of a pastor is not always easy but, much like my work, it is very rewarding. As a minister in our church, Rhio was responsible for counseling individuals through difficult times, visiting the sick in the hospital, and ministering to the senior citizens of our congregation.

This Sunday our membership will honor Pastor Cleigh as he retires from the ministry. Rhio plans to spend his retirement enjoying time with his wife Patti, his 6 children, 10 grandchildren, and 1 great- grandchild. He also hopes to have a little more time for some of his hobbies--things like woodworking, camping, fishing, and gardening.

Barbara joins me in sincere appreciation to Rhio for his contributions to our church and community. Together we wish him a long and happy retirement.

Mr. President, I ask unanimous consent that a posting by someone under the name ``Blue Bunting'' made to the Care2 News Network be printed in the Record. This posting is a supplement to a speech I gave last Thursday, April 12, on attempts by some Democrats to elude responsibility for tax relief permanence.

Mr. President, I ask unanimous consent that Martin Sobel, a member of my staff, be granted floor privileges during this week's session of the Senate.

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

Mr. President, I ask unanimous consent to speak as in morning business for 10 minutes.

Mr. President, today I pay tribute to Betty Burger, a remarkable public servant and extraordinarily devoted congressional staffer. Betty died on Saturday at the age of 87. Betty was my chief caseworker and my oldest and longest serving staff person. She was still on the payroll as of Saturday.

Although I am deeply saddened by her departure, it brings me comfort to know this devoted mother, grandmother, and great-grandmother slipped peacefully into the hands of her Maker.

It is fitting that Betty's loved ones kept vigil at her bedside. For nearly 40 years, Betty Burger kept vigil for the people of Iowa. She started on Capitol Hill working for Iowa Representative Fred Schwengel. After Congressman Schwengel left office, she worked for an Illinois Congressman by the name of Hanrahan for 2 years. Then she wanted to work for an Iowa Congressman again, and she joined my staff on my first day on the job in Washington after I was elected to the House of Representatives in 1974. Since then, for the last 32 years, Betty has worked as a congressional staffer for the people of Iowa.

If Congress needed any rationale for eliminating mandatory retirement age in 1986, Betty Burger is that example. As my chief caseworker, Betty earned a lifetime of experience on the job mastering the ins and outs of the Federal bureaucracy. Her countless contacts within Federal agencies put a face on the so-called faceless bureaucracy. No one knew how to cut through redtape more swiftly and surely. Betty was a masterful detective the way she tracked down disability claims and benefit errors at the Social Security Administration. She decoded the maze of paperwork at the Veterans Affairs Department, and navigated Byzantine immigration rules for constituents struggling with citizenship, employment status, and deportation issues. Betty Burger knew how to cut to the chase at the State Department for Iowans who were traveling, working, or studying abroad.

Most of Iowa's 2.9 million residents didn't know Betty Burger personally, but I want them to understand how this dedicated public servant made a difference for Iowans. Betty did her job for them with remarkable efficiency, tenacity, and integrity. I heard firsthand gratitude about Betty's work from individual Iowans nearly every time I went home and held town meetings. Betty also touched the lives of Iowans and their families through her work to nominate outstanding young people to our Nation's service academies. She would always talk about what a great group we had this year. Let me tell my colleagues something about Betty. We always had a great group of academy nominees as far as Betty was concerned. These young high school kids and their parents had several conversations with Betty as they maneuvered through the nomination process. They were an inspiration to her and she knew with good young people in her academies, such as the ones she helped nominate, our country from a national security standpoint would be left in good hands.

In my office, Betty served as a role model for young staffers and seasoned colleagues alike. Her work ethic taught others to keep one's nose to the grindstone. Her professional attire taught others appearances do make a positive impression in the workplace. Her sharp- witted humor elicited laughter and taught us we could count on Betty to put a smile on everybody's face. Her uncanny grasp of cultural trends and current events taught others how to embrace aging and use one's work and life experiences for the greater good.

I can't talk about Betty without making it clear she was a fiercely loyal and proud Republican. She modeled compassionate conservatism each and every day she helped an Iowan. Day in and day out, Betty untangled a knot at a Federal agency for those who may have felt at the end of their rope trying to get an answer.

I often tell Iowans that representative government is a two-way street. Well, Betty Burger lived and breathed the spirit of representative government. She was the capable, no-nonsense person on the other end of the phone who brought thousands upon thousands of Iowans hope and peace of mind. She paved the street between Iowans and the Federal agencies from which they required service.

As her boss, I owe Betty a debt of gratitude for her tireless commitment, unwavering loyalty to this country, to the people of Iowa, and to me. As Iowa's senior Senator, I place a premium on constituent service. Betty understood this as well as anyone and exceeded my expectations.

As her friend, Barbara and I extend our heartfelt sympathies to Betty's family and the loved ones she leaves behind. As they remember their beloved mother, grandmother, sister, aunt, friend, and neighbor, please know we will dearly miss this classy and spirited Iowan who became part of our family during her honorable tenure--a lifetime--on Capitol Hill.

In the last four decades, many Iowans have felt touched by a guardian angel when Betty worked her magic on their behalf. May God's blessings continue to shine upon this guardian angel from Fairfield, IA, as she rests in peace alongside her husband John.

If I could give some advice to my colleagues, I last saw Betty in early January. If we hadn't been in session in early January of this year, probably the last time I would have seen her would have been before Christmas.

Betty got sick about that time and was going to the doctor. We were keeping in touch with her by phone but always waiting for her to get better and come back to work. Then, all of a sudden, she got very weak. We actually thought she would come back to work, but she got weak and then suddenly died.

My advice to colleagues would be this: I didn't get to see her since that last time she was in my office in January. Don't make the mistake I did. I should have been there by her bedside sometime during the period of her last week in hospice. I am sorry I wasn't. To my colleagues, take a lesson from me: When people are sick, see them. They may not come back to the office as you expect.

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

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

Mr. President, when I am done--and I think that will be in about 15 or 20 minutes--I ask unanimous consent the Senator from Texas, Mr. Cornyn, follow me.

Mr. President, 2 weeks ago we passed the budget resolution in the Senate. One week after that, the House passed their budget resolution. So we are in a position of being conferenced between the House and the Senate on a budget resolution, and I thought at this point I ought to give some updates, particularly as it relates to the work of the Committee on Finance, and particularly as it relates to the issue of taxes and an impending tax increase that is out there-- tomorrow, almost--a few years away if we don't do anything to stop the biggest tax increase in the country, or that will be, in fact, the biggest tax increase in the country.

So as the budget resolution slowly works its way through Congress, one especially important issue wrapped up in this whole great big budget resolution and document is the longevity of the bipartisan tax relief that was enacted in 2001 and 2003, and this very day those tax decreases for working men and women are still in place and will be in place through the year 2010. It has always been my goal, when you have Chairman Greenspan saying that this tax relief for working men and women is the reason the economy has rebounded, that we should continue this tax relief into the future, because if it is the goose that laid the golden egg of 7.8 billion new jobs being created since the recession, then we ought to keep that golden egg working for the American taxpayer.

Some people may not give the contents of a budget resolution much consideration since it does not get signed into law by the President but is merely a set of guidelines for tax and spending decisions that apply to Congress as we make permanent law and as we make decisions on tax policy for the future. Those tax and spending decisions must go to the President for his acting on them and then become law.

For this reason, along with anyone who supports tax relief, we are very concerned about the budget resolutions passed by the Democratic majorities in the House and Senate that are now in conference. Yes, this is a Republican Senator. I am in the minority now since the last election. So I want to raise these concerns as a responsibility of the majority and to alert the American people about what the majority might be up to, or if they are not up to it, what the consequences are if nothing happens.

This concern is derived from the fact that the two budget resolutions--the one in the House and the one in the Senate--do not provide for the extension of tax relief beyond 2010. What does it mean when I use the words the budget resolutions do not provide for ``the extension'' of tax relief beyond 2010? That means, if Congress takes no action, we will have the biggest tax increase in the history of the country, and we will have that tax increase without even a vote of the Congress.

For the first time in more than 6 years, Congress is sending a message, then, that there is no guarantee of continued tax relief. In fact, the Democratic budget resolutions say the very opposite. The budget resolution passed by the Senate only provides 44 percent of the revenue necessary to extend these popular, bipartisan--and let me emphasize bipartisan--tax relief bills of 2001. Mr. President, 44 percent is not enough, but that 44 percent is more than the big fat zero percent in the House-passed budget resolution. The House-passed budget resolution provides no revenue room for the extension of tax relief, meaning that the majority of the House of Representatives right now is taking a position on the budget to let the biggest tax increase in the history of our country go into effect without a vote of Congress.

What does that mean, besides the biggest tax increase in history? It means things such as no tuition deduction for people sending their kids to college, no teacher deduction for the supplies the teacher might buy out of their own pocket. Those are just a couple of popular items that would expire at that particular time that would be a small part of the biggest tax increase in the history of the country, happening without the vote of the people.

I would like to think that I am an optimist, but in conferencing two resolutions, which cover 44 percent on the part of the Senate and zero percent on the part of the House, I am doubtful of reaching a number greater than the already inadequate number of 44 percent provided in the Senate. This stands in stark contrast to the budget that the President submitted this February and to the budgets the President has submitted over each of the last 6 years. All of those budgets provided the revenue room to make bipartisan tax relief permanent. In other words, the President is asking Congress to take action so that the biggest tax increase in the history of our country would not happen; and if it did happen, it would happen without a vote of the people. He thinks that Congress making a decision for tax relief for working men and women provided the incentive, according to Chairman Greenspan, for the economic recovery--and we have now created 7.8 million new jobs-- and ought to be made permanent tax policy. In other words, don't kill the goose that has laid the golden egg.

The Democratic budget resolutions can be best represented by a chart that I have here which shows that in terms of the guaranteed tax relief proposal, they amount to a big goose egg for the American taxpayer. We have it right here on the chart. That is a big fat zero. If they are lucky, I suppose college-bound taxpayers could sell this goose egg back to the Democratic leaders in the House and Senate because they will need the money if they are not able to deduct the cost of tuition.

What is even more inexplicable than the Democrats' failure to extend the popular and bipartisan tax relief enacted in 2001 and 2003 are some of the reasons given. The chairman of the Budget Committee this year basically said that since the Republicans wrote that law--forgetting that it was bipartisan in 2001; how clever to ignore that fact--it is our problem. The leftwing of the blogosphere has echoed that message of the Democratic leadership.

In regard to the left side of the blogosphere, I will briefly describe two posts my staff found on the Internet. The first comes from a scholar of government who posts the Daily Kos under the name of ``piec.'' I may be mispronouncing that, and if so, it is unintentional.

According to piec's analysis, the Tax Increase Prevention and Reconciliation Act of 2005, which was signed last May by President Bush, was a ``poison pill'' designed to sabotage the economy to increase the prospects of Republican candidates in 2012. The argument seems to be that having popular and bipartisan tax relief from 2001 and 2003 all sunset at the end of 2010 would cause such an economic mess that the Democrats, assumed by the blogger, piec, to be in power at that time, will take the blame and suffer at the polls.

Wouldn't it have been nice if I could think as chairman, when we wrote that bill, that I was smart enough to see ahead from 2001 to 2012? Thank you, piec, for giving me that credit. But I didn't know that. We passed it because of the rules in place at that particular time. It had to sunset.

Another observer of Government posted comments under the name of ``Blue Bunting'' to the ``Care2 News Network.'' In a posting titled ``The Monster Republican Tax Hike,'' Blue Bunting says that the ``Republican Congresses chose not to make their tax cuts . . . permanent.'' Her argument seems to be that Republicans put sunset clauses in a bill solely to improve the long-term budget projections and that responsibility for the expiration of tax relief rests completely with the Republicans, even though the Republicans are in the minority. The implication is that by lowering taxes, Republicans are responsible for a tax increase that would occur when the Democratic majorities control both Houses of Congress, even though taxes coming in from all the taxes that the Federal Government collects run to a 50- year average of what they have been, 18.6 percent of GDP. If it has been that way for 50 years, what is the problem?

Now, these blogs I have just referred to, these commentaries, are available to anyone if you want to read them online. But to make it easier, I ask unanimous consent that they be printed in the Congressional Record.

To begin with, it is completely ridiculous to suggest that President Bush and Republicans in general did not intend or desire the permanence of tax relief. President Bush and my party generally have favored permanence of tax relief--not just because it brings in less money, but because permanence of tax policy--when investors and laborers can depend on the tax policy, you are going to get better planning long term. It is better for the economy.

Mr. President, you need to look no further than the budgets to which I have referred. The administration and the Republican Congress have budgeted for an extension of the bipartisan tax relief provisions. That action has affected the bottom lines of these budgets. And as we heard over and over again, the Democratic leadership, the liberal think tanks, and sympathetic east coast media have criticized the bottom lines of those budgets. So the Democratic leadership, the liberal think tanks, and the sympathetic east coast media cannot have it both ways. We are not going to let them have it both ways. They cannot shut off the bipartisan tax relief, take credit for the supposed deficit reduction, and also claim that there is tax relief in this budget that passed the Senate 2 weeks ago and the House a week ago.

Getting back to the blog I referred to, the Daily Kos, one posted as ``Ortcutt'' agrees with this point. Ortcutt, however, incorrectly identifies the purveyor of the phony logic. The blogger puts it on Congressional Republicans and President Bush. As the hard, cold numbers in the Democratic budget resolutions and floor debate in the Congressional Record show, Democrats claim that expired tax relief is not a tax hike. Let me emphasize that.

Are we going to let people get away with that, when they know what the law is on December 31, 2010, and the biggest tax increase in the history of the country is going to happen, without a vote of the people? And when that happens, they are saying it is not a tax hike?

Surely, they don't think the American people are that stupid. The Democratic leadership are the folks trying to claim that their budgets, which don't provide the revenue room for expired tax relief, don't contain tax hikes. Hogwash.

I ask unanimous consent to have printed in the Record the Ortcutt comment.

Mr. President, responding to another criticism, it is completely off the mark to say the tax relief bills were written by Republicans. It is almost as if the Democratic leadership is saying that tax relief was passed by a National Republican Congress and not by the Congress.

The 2001 bill was written by a bipartisan majority and was opposed by a partisan minority led by the Democratic leadership. The conference report to accompany the law that was entitled the Economic Growth and Tax Relief and Reconciliation Act passed the Senate on May 26, 2001.

I ask unanimous consent that the information pertaining to that rollcall be printed in the Congressional Record so we can show it was a bipartisan rollcall.

Mr. President, the 2001 tax relief bill passed the Senate with 58 yeas. At that time, the Senate was evenly divided--50 Republicans and 50 Democrats--with the Republicans technically having control because of the Vice President's vote. However, not every single Republican voted for that tax relief measure. Those 58 yeas included 12 Democrats, nearly one-quarter of the 50 Democrats sitting in the Senate at that particular time. If all of those Democrats had voted against the conference report, it would have failed.

Clearly, it is ridiculous to say this was purely a Republican bill. Given the experience the Democratic leadership has had with cloture votes in the past few months, I would expect them to appreciate the necessity of working on a bipartisan basis in this body. This is the only political institution of our system where minority views are protected and must be respected because of no limit on debate, called a filibuster, and it takes 60 percent, a supermajority, to overcome a filibuster to get to finality. That is where Democrats were protected when they were in the minority for the last 6 years. This is where Republicans are going to be protected for the next 2 years--and hopefully no longer than 2 years--as a minority.

It takes 60 votes to get permanent tax relief. The bottom line is, we didn't have the 60 votes in 2001 and 2003 for making these bipartisan tax relief plans permanent. And with a couple exceptions I will discuss shortly, over the last 6 years, we haven't had the 60 votes for permanent tax relief.

So tax relief in 2001 was not made permanent because the Democratic leadership and the liberal core of the Democratic caucus have refused to support permanence, and that is apparent now more than ever with the budget that is in conference between the House and Senate.

Of course, last November, the Democrats won control of both Houses of Congress. I wonder if the House Democratic leadership will be sending over any bills to make tax relief permanent. I doubt it. Even if the House Democratic leadership did send over such a bill, I would not expect the Senate Democratic leadership to take it up. When in Republican hands, the House regularly sent over bills to provide permanence for various components of the bipartisan tax relief bill which they couldn't get through the Senate.

Senate Democrats are clearly capable of working with Republicans to make tax relief provisions permanent if they like what they want to make permanent. And we have done it in the past. The Holocaust Restitution Tax Fairness Act of 2001 repealed the sunset of a provision originally contained in the 2001 tax relief bill that allowed Holocaust survivors and their heirs and estates to receive restitution payments tax free. Making this provision permanent was absolutely the right thing to do, and the fact that it passed the Senate by unanimous consent proves that, and it passed it during a period when the Democrats controlled the Chamber, indicating the level of cooperation that occurred between Senate Republicans and Democrats when Democrats want to make a provision of the tax law permanent law.

As I go through these examples, everyone needs to remember that holding the majority in the Senate is not a

ticket for either party to force its agenda down the other party's throat. Senate rules encourage cooperation by giving the minority many opportunities to check the majority, and this becomes even more evident when those majorities are very slim as they are right now--51 Democrats, 49 Republicans. And they have been very slim for the last several Congresses.

I say this to point out that the Holocaust Restitution Act became permanent because Republicans and Democrats worked together to make it permanent, and it would not have been sent to the President if one side or the other wanted to block it.

I will give one more example that occurred last summer as part of the pension reform bill. We call that the Pension Protection Act of 2001. It passed the Senate 93 yea votes and made permanent--now here we have bipartisan cooperation to make permanent other parts of the tax bill-- the retirement security provisions of that 2001 tax bill. Even if every Republican supported the bill, a united Democratic caucus could have held back the five additional votes needed for final passage if they chose.

Clearly, Democrats have a record of working with Republicans to make tax relief provisions permanent when they choose to do it. So why not work in the same way to make the rest of that tax law of 2001 and 2003 permanent so we don't have the biggest tax increase in the history of the country without a vote of the American people, so we will have permanence of tax law, so working men and women can plan on the future, so investors who create jobs can plan on the future as well? That is better for the economy.

Let me return to the present day. The House and Senate, then, as I have said so many times, passed separate budget resolutions, now in conference, but currently would end up subjecting Americans to the largest tax increase in history, and the Democrats have responded by basically declaring it is not their responsibility. How can a majority so avoid the responsibility of being a majority?

The Democratic leadership and the liberal core have the power to make these provisions permanent. I assure my colleagues we will be there working with them as we did on the retirement portions of the pension bill, as we did on the Holocaust relief bill, to make sure it becomes permanent law.

I think they should, but I realize they may not agree with me. However, if they do let tax relief expire, they have to take responsibility for letting that happen. They have to take responsibility for the biggest tax increase in the history of the country happening without a vote of the people when they would have had the cooperation of Republicans to make sure it was permanent and to make sure this biggest tax increase doesn't happen.

Several times since November, I have heard that elections have consequences, and one of those consequences is for the winner having increased responsibility. Since Democrats have made tax relief provisions permanent in the past--and I have given only two examples-- they can likewise do it again, and they will have Republican cooperation to make it happen.

One of the bloggers I cited earlier points out the economic calamity that would befall our country if all tax relief was allowed to expire at the end of 2010. On this specific point, he is correct, and I gave a speech to this effect right here on this floor on March 1 where I cited a study done by the Wall Street firm of Goldman Sachs.

If something is not done to extend or make permanent tax relief before the end of 2010, American families, working families, will be hit with a wall of tax increases that is currently built into the Democratic budget resolution.

I have a chart. This chart shows, according to the U.S. Treasury, not according to this Senator from Iowa, a family of four with $40,000 of income will be subjected to an average tax increase of $2,052 all at once. The Democrats, now in the driver's seat, need to decide whether they are going to let that wall go up, whether that wall is going to stand between this taxpayer and more money for them to spend instead of more money for me to spend for them, or are they going to take advantage of the opportunity we give them to cooperate to prevent that big tax increase of 2,000 and more dollars to go into effect for a family with an income of $40,000, as though there is something about being rich making $40,000 a year.

I want to conclude with a reference to a story about a man who cared a great deal about the typical taxpayer, President Ronald Reagan. During the Cold War, while in West Berlin, President Reagan challenged Soviet President Gorbachev to tear down the Berlin Wall. I challenge the Democratic leadership to tear down the wall of tax increases built into their budgets. I hope my liberal friends in the core of the Democratic caucus will urge the Democratic leaders to tear down the wall of tax increases they have built. This is not a wall Republicans built. This is a wall Democrats through their budget built because they have the power, they have a minority that is willing to cooperate with them, as we have on two other instances I have given in these remarks. Join with us in the Republican conference and tear down the wall of tax increases that has been built.

I yield the floor.

Mr. President, I am pleased today to have the fortunate opportunity to recognize and congratulate a fellow Iowan on a magnificent achievement. On Sunday, 31-year-old Zach Johnson won the prestigious Masters golf tournament at the famed Augusta National Golf Club in Augusta, GA. I am joined by my colleague, Senator Harkin, in submitting a Senate resolution congratulating Zach for his victory.

Zach not only won one of the most difficult golf tournaments in the world, he also won quite possibly one of the most difficult of all the Masters' tournaments in history. Gusting winds and bitterly cold weather combined with the traditional challenges of the golf course to create one of the toughest tournaments. His winning score of one-over- par 289 tied the highest winning score in Masters history. In the process, he beat fellow golf champions Tiger Woods and Retief Goosen by two-strokes.

Zach was born in Iowa City and grew up in Cedar Rapids, playing golf at Elmcrest Country Club in Cedar Rapids. He went on to play golf at Drake University in Des Moines, graduating in 1998. To continue his pursuits as a professional golfer, Zach counted on the support of family and friends in Cedar Rapids who believed in him. His success didn't happen overnight; his dedication to the game and his hard work ethic helped him earn the prized green jacket.

Even in the aftermath of winning one of golf's highest achievements, he remained humble in his acceptance. He attributed much of his success to his perseverance and patience. He recognized his family and friends who believed in him even when he wasn't so sure himself, and as a man of faith he knew there was another power guiding him.

Through it all, he continued to insist that he's just a normal guy from Cedar Rapids, IA. I am proud of Zach Johnson for his brilliant win, and I am proud of him as an Iowan. I know Iowans are honored and blessed to have a person like Zach Johnson representing us in the world of professional golf. So I congratulate him on his outstanding victory, and I wish him and his family all the best.

Mr. President, I wish to explain to my colleagues why I will vote against S. 5 in its present form, and I believe it will probably be in its present form as we vote on it.

We in Congress are petitioned every day by individuals, by families, by companies, by interest groups, and other entities that have a stake in what the Federal Government does. We were elected to this great body to represent people back home, and to provide reasonable solutions to everyday problems that we confront here in the Congress.

I meet people in Iowa every week who seek cures for different diseases and different disorders. They seek results, and we fight to provide them results so that life is better, life expectancy is longer. Americans want Congress to fund medical research, and we do it in a big way. That is why we provided nearly $30 billion annually for the National Institutes of Health, which is the leading organization on health-related research.

We all know and love someone who has suffered from a devastating disease or disorder. My wife is a breast cancer survivor; my brother died of a stroke; my sister died of an aortic aneurysm. I have friends with diabetes, Parkinson's, and Lou Gehrig's disease. I have known many who have lost a battle to cancer, and others who face a long struggle with Alzheimer's disease.

I want cures as well as everybody else wanting cures. I want to believe that the pain and suffering will end as much as anyone wants it to end. But I cannot in good conscience support a bill that forces American taxpayers to fund research that requires the destruction of innocent human life. This is a slippery slope.

I wish to address six key points that have been put forward by Robert George and by Thomas Berg. They were made in an op-ed piece from the Wall Street Journal on March 13, this year.

These authors state that responsible and productive debate is often lost amidst confusion and misperceptions surrounding the issue of embryonic stem cell research. Both sides of this debate have reasonable arguments. But these authors, including this Senator, believe embryonic-destructive research cannot be morally justified.

First, Professor George and Reverend Berg rightly point out there is not a ban on human embryonic stem cell research in the United States. Yet I believe people in this body leave that impression. More importantly, it has left

the impression--whether from Members of Congress or other people in our society--there is a Federal ban on human embryonic stem cell research. They leave out the fact we are already doing some through the Federal Government. They leave out the fact that the private sector and State governments are doing a lot of embryonic stem cell research as well. So there is embryonic stem cell research going on. The issue is whether the Federal taxpayers ought to be paying for something that would destroy life at the beginning.

What people have forgotten in this debate, then, is George W. Bush was, in fact, the first President to provide Federal dollars for embryonic stem cell research. Throughout the Clinton administration, not one penny of taxpayer dollars was allowed for this sort of research. So there is no Federal ban. In fact, companies and researchers can and are doing it now. There is no legal barrier to prohibit the private financing of it. In fact, we will continue to fund the lines President Bush authorized in 2001. Since the President announced his decision in August 2001, the Federal Government has provided almost $130 million for embryonic stem cell research. Eighty- five percent of the embryonic stem cell research studies in the world use these lines that President Bush's decision in August 2001 allowed.

Because of this funding and the investment in the National Institutes of Health, America, our country, remains one of the global leaders in medical research. Why then do some generate the false impression that the Federal Government is not involved in stem cell research?

Well, that brings me to the second point. The authors say we are a long way away from seeing the therapies the other side promises. Embryonic stem cell research may not be the magic potion many make it out to be. Even the most ardent pro-embryonic stem cell research experts have stated its benefits are years, if not generations, away. George and Berg quote a prominent British expert who is not entirely convinced that embryonic stem cells will, in his life and possibly anyone's lifetime, be holding quite the promise that some desperately hope they will.

One expert from the University of Wisconsin fears a backlash because the cures the public expects could be decades away. I know many of my colleagues and many of my constituents believe embryonic stem cell research holds potential. They believe the hope and the promise of this research will save their lives and the lives of their loved ones. But I cannot support the expanded use of taxpayer dollars to invest in something that is generations away--even if possible--when proven therapies through adult stem cell research, with no moral strings being attached, no lives being taken, are right in front of us.

Third, the authors explain that a human embryo is deserving of at least some degree of special moral status. Most people would agree the embryo being destroyed has the potential to be developed into human life. It is a fact. Therefore, it is only right that a heightened degree of sensitivity and consideration be paid to this life at this stage of development, the embryo.

This bill then plays with human life. The other side's promise of cures disregards the fact that this bill will allow researchers to kill embryos, and pay for that killing, with American taxpayer dollars.

The bill before us says we should fund research using embryos that were on the brink of being thrown away anyway. Thrown away? What about the many children who have been adopted through this process? They were not thrown away or they obviously would not have been here to be adopted.

What about making sure that couples are not exploited and forced to create extra embryos so that industry can make a profit? Think how China makes a profit from harvesting organs from prisoners that they execute, or who knows how they die? Tourist medicine is what it is called. Do we want that sort of ethic in our research? I do not think so.

What about ensuring those so-called leftover embryos are not being created through cloning? How do we ensure human cloning is not made more attractive, and that researchers are limited to how they create and destroy life? Where do we draw the line?

Point number four: There are noncontroversial methods that are worth exploring if you want to do something for curing maladies with stem cells. Other noncontroversial methods of cutting-edge research, those which do not destroy human embryos, offer near equal promise for future medical benefit. Those methods are treating people this very day. Stem cells derived from bone marrow, umbilical cord blood, amniotic fluid, have opened the doors to many therapies. Adult stem cells have already proven effective in treating over 70 diseases and disorders, not something anybody interested in embryonic stem cells can point to. This alternative research has proven effective. We are investing taxpayers' money in research that people are reaping benefits in today.

Last year, I talked about an acquaintance of mine by the name of David Foege whom I happen to know from the years when he was a page in the Iowa Legislature in the 1960s. He grew up in Iowa and now resides in Florida. Four years ago, David Foege was told that he had little chance of survival. His heart was losing all function, and there was little that doctors could do. David turned to stem cell therapy. He found doctors in Bangkok who would harvest his own stem cells and inject them back into his own heart. This year, 25 million of his own stem cells were taken from his blood and injected into his heart. He went from a life-threatening situation to a nearly normal heart function. He went from a life expectancy of 90 days to 10 or 15 more years. He is fighting that death warrant that he received years ago. David Foege is evidence that adult stem cells work, that the investment we have made in adult stem cells is paying off, and it is evidence that we ought to put our money where product is received as opposed to the quandary of when will we get therapies or when will we get maladies fixed by the research in adult stem cells.

I wish I could list the advances with embryonic stem cell research, but I cannot. There aren't any. There are no treatments for human patients derived from embryonic stem cells. So there is no evidence on which to argue that this research should be expanded with public resources; in other words, tax dollars being used. We in Congress have to realize that there is a difference between hope and hype.

The fifth point these authors make, moral concerns are not exclusively religious in nature. Everybody thinks that anyone who is fighting this research is some religious fanatic.

Nobody says it better than Charles Krauthammer, a highly regarded columnist and former member of the President's Council on Bioethics. Mr. Krauthammer doesn't believe that life begins at conception, as many who have a feeling about embryonic stem cells and the destruction of life at that stage. But Mr. Krauthammer says that ``many secularly''--I emphasize secularly; I didn't say religious--``inclined people have great trepidation about the inherent dangers of wanton and unrestricted manipulation''--to the point of dismemberment--``of human embryos.'' Mr. Krauthammer says that we don't need religion to simply ``have a healthy respect for the human capacity for doing evil in the pursuit of doing good.''

Mr. Krauthammer knows firsthand what it is like to live with a debilitating disease. He suffers from spinal cord injury. He spends every day of his life in a wheelchair. Even he knows that it is cruel to play on the hearts of those who suffer by saying that a cure is within reach. He said:

There's nothing less compassionate than to construct a

political constituency of sufferers by falsely and cruelly

intimating that their disease is on the very cusp of cure if

only the President would stop playing politics with the

issue.

We aren't playing politics. Reasonable people can disagree on the moral or fiscal consequences of this bill without being labeled religiously minded obstructionists.

The sixth and final point that Berg and George make is that medical advancements are not the only interest of stem cell researchers. Because the benefit of embryonic stem cell research is only speculative and many years from producing results, most scientists have acknowledged that the primary interest of this type of research is to enhance the basic knowledge of early

human development. S. 5 does not ban human cloning, and it doesn't help draw the line on what researchers should or should not do with so- called leftover embryos. This puts us on a very slippery slope. I urge my colleagues to think long and hard about this issue before casting their vote.

S. 5 disregards respect for human life at the expense of prolonging the pain of those who seek a cure. We in Congress and across the country need to think rationally and to make tough choices. The right choice is to invest in what works. I have spent a great deal of time explaining that I thought that was adult stem cell research. I urge my colleagues to join in defeating S. 5 and supporting the proven and noncontroversial field of adult stem cell research.

I thank the Chair.

Mr. President, when we debated the Senate budget resolution in committee and on the floor over the last few weeks, I raised a concern about the transparency of the budget. One of the problems I pointed out was the over reliance of the budget resolution on unspecified revenue raisers. As ranking member of the Finance Committee, I referred mainly to Finance Committee policy demands that weren't realistically reflected in the budget. I referred to currently expiring tax, trade, and health and welfare spending provisions. The expiring tax relief provisions within the first year of the budget resolution alone amount to $135 billion.

In discussing the budget, I also referred to the track record of the Democratic leadership, while in the minority, of spending the same revenue raising offsets over and over again. There is a clear risk of this deceptive behavior having a real fiscal impact now that Democrats are in the majority. As has been proven over the last few weeks, the Democratic majority can't reduce spending. So taxes are raised to pay for more spending while the spending-driven deficit remains high.

What we have seen is an obsession by the Democratic leadership for going to the tax side of the ledger and gross up the spending side of the ledger. Once again, spending wins out and the taxpayer loses.

Now, comes the Wyden-Craig amendment. It increases popular spending-- in this case we are talking about rural schools--and uses revenue raisers to mask the deficit effect of the spending. The budget resolution contains 39 reserve funds that authorize new spending, paid for with unspecified revenue raisers. This rural schools spending program is the subject of 1 of those 39 reserve funds. So, today, Senators Wyden and Craig go to the tax ledger and remove some of the work product of the Finance Committee tax staff to use for their new spending program.

As ranking member of the Finance Committee, I view this effort as an intrusion on the jurisdiction of the Finance Committee. During my tenure as chairman, I am pleased to say that this jurisdiction was protected. I have indicated my concern to my friend, Chairman Baucus, that this is the start to a slippery slope of erosion of our committee's jurisdiction.

We have seen that those who advocate new spending can't find a dollar of spending offset within a $2.7 trillion budget. From this fiscal behavior, we can expect that the spending of these amendments will continue to be offset from the same pool of offsets. The Finance Committee tax staff can't do the heavy lifting of finding offsets for every new popular spending program.

By the terms of the Senate Democratic budget resolution, that pool of offsets has already been subscribed for expiring tax, trade, and health and welfare spending.

The Wyden-Craig amendment goes to part of the limited group of offsets and draws from previously passed Senate offsets and a small group of already identified tax gap offsets. These offsets are drawn from the limited group of $43 billion in revenue raising offsets I referred to in my floor statements.

There is a new revenue raiser in the Wyden-Craig amendment. I support it. It would permit section 457 retirement plans to employ a Roth IRA option.

Some will recall from last year's tax reconciliation conference report a similar proposal. The proposal permitted more taxpayers to convert traditional IRAs to Roth IRAs. That proposal met with severe criticism from the Democratic leadership, their allied liberal think tanks, and some in the east coast media who tend to be sympathetic to the views of the Democratic leadership.

I am pleased to see the Democratic leadership has changed its mind. With the Wyden amendment, and the Roth section 457 plan proposal, the Democratic leadership is now on board with the merits of the Roth IRA conversion concept. It will be interesting to see if the liberal think tanks and east coast media are consistent critics or whether they have changed their minds, now that this concept is employed by Senate Democrats. I will be looking for their reaction.

Madam President, the Durbin amendment is a perfect example of why authorizing on an appropriations bill ought to be discouraged. I know many Members are under extreme pressure from their hospitals to support the Durbin amendment, but I would encourage you to read the actual language and consider the consequences of what this amendment actually does.

This amendment will lead to anarchy in the Medicaid financial arrangements. As a result of the amendment, CMS will be prohibited from banning bad-actor States from reinstating the questionable schemes Congress has been trying to root out since 1991. This is because the Durbin amendment broadly--very broadly--prevents CMS from taking any action relating to this rule or any rule that would affect Medicaid or SCHIP in a similar manner.

For years, Medicaid was plagued by financial gamesmanship. States used so-called intergovernmental transfers to create scams that milked taxpayers out of millions, even billions of dollars. An example: A State bills the Federal Government for a $100 hospital charge. The hospital gets the $100 payment, and then the State would require the hospital to give $25 of it back to the State. In my view, that is a scam. What happens, then, to the $25? In the days before Congress and CMS cracked

down on the behavior, the money could go to roads or to stadium construction. That is right, Medicaid paid for roads and stadiums instead of health care for the very poor. Because of the way the Durbin amendment is written, States could return to the financial schemes where they used Medicaid funds for porkbarrel projects.

In 1991, 1997, and again in the year 2000, Congress took specific action to limit a State's ability to use payment schemes to avoid paying a State's share of Medicaid. The Durbin amendment blows all that away.

I would like to read from a letter from Leslie Norwalk, Acting Commissioner of CMS, released today:

The Durbin amendment is so broadly drafted that it would

seriously limit the agency's ability to do the normal program

oversight to ensure program integrity. If enacted, it could

prevent CMS from disapproving State plan amendments that

violate, for example, the 1991 provisions on taxes and

donations, the 1997 limitations on limiting Federal

expenditures to the State plan, and the 2000 phase-down of

upper payment limits.

She goes on to say:

We are deeply concerned that if enacted, the Durbin

amendment would reverse this progress and reopen the Federal

Treasury to the abuses of the past.

Madam President, it is one thing to complain about the CMS rule; it is quite another thing entirely to overturn 16 years of congressional action with this amendment.

Let us talk for a moment about the rule in question. The core goal of the rule is to limit provider reimbursement to actual cost. What is wrong with just paying actual cost? I know some people consider this a radical idea, but I just don't understand why anyone thinks it is a good idea to have hospitals paid more than the cost so that they can be part of these scams which rob the taxpayers to fund State pork.

Restricting payments to cost is not exactly a new idea. In 1994, the Government Accountability Office recommended that payments to Government providers be limited to cost. This is a fundamental issue of program integrity.

What did the GAO find in their 1994 report leading to that conclusion? The State of Michigan used these questionable transfers to reduce its share of Medicaid programs from 68 percent, which is what it should have been, to 56 percent. The GAO found evidence that in October of 1993, the State of Michigan made a $489 million payment to the University of Michigan. Within hours, the entire $489 million was returned to the State. The report found that in fiscal year 1993, Michigan, Tennessee, and Texas were able to obtain $800 million in Federal matching funds without putting up the State's share.

Congress and CMS have spent the last 15 years combating this behavior. It makes no sense for Congress to roll back the clock and allow these crazy practices to come back.

Over the past 4 years, CMS has been working with States to try to limit these scams. These efforts have not been without their controversy. States have been very concerned about exactly what the new standards are. Senator Baucus and I wrote to the Government Accountability Office and asked them to look into what CMS has been up to. We have been concerned that there has not been enough transparency in what CMS has done.

CMS has now published a rule. It is out there in the--government for everybody to look at. The rule stops improper transfers. The rule limits providers to cost. The rule requires payments matched up to claim. Just good accounting.

Let me speak to that last one specifically--matched up to claim. Too often in Medicaid, States are allowed to bill for services without being able to document that an actual service occurred. We have a program which spends hundreds of billions of taxpayer dollars. We have a rule which requires that the program better document where the money is spent.

What on Earth is going on that I have to come down to the floor to object to an amendment on an appropriations bill that tries to prevent a rule that protects the integrity of the Medicaid Program from going into effect, especially a responsible rule?

In 2005, the Finance Committee held a 2-day oversight hearing on the Medicaid Program. As a part of that hearing, we focused on continuing problems of States recycling funds. CMS has acted to stop that. If some people think CMS has gone too far, then we should review their actions in the Finance Committee. We should call CMS in, make them testify, and ask the tough questions to which we need answers. If we think there are things we should have done differently, then we should legislate. That is the way it ought to be done.

I want us to ask tough questions about the definition of ``Government provider.'' I want to make sure that requiring schools to file claims isn't going to impede access to care for kids. I would like to know if the rule overturns arrangements such as the one the State of Iowa has created to provide a lump-sum payment to the University of Iowa and Broadlawns Hospital in Des Moines to care for the Medicaid patients. That is the right way to operate. We should deal with it in the Finance Committee.

That is why I have, as a general rule, objected to moving legislation in our jurisdiction on appropriations bills. The issues here are extremely complex. They deserve thorough consideration so we can assure the right action. Instead, we are here with this amendment. No hearings have been held, no testimony submitted, nothing.

This amendment throws the baby out with the bathwater. Then the bathtub goes out, and then the bathroom--this is the whole house. It undoes 16 years of sound public policy.

My amendment allows CMS to move forward to protect the Medicaid Program from fraud, to protect Medicaid integrity, and to ensure payments are not made inappropriately. We should stop an amendment that gives CMS a 2-year holiday from stopping fraud. We should stop an amendment that gives CMS a 2-year holiday from protecting program integrity. We should stop an amendment that gives CMS a 2-year holiday from stopping inappropriate payments.

Members should vote on my amendment so that it forces us to sit down and take a serious look at what we are doing here before we make a serious mistake we will all regret.

Madam President, how much time do I have remaining?

At this time, then, I would ask unanimous consent to set aside the amendment before the body and that we take up Grassley amendment No. 701 to the Durbin amendment.

I heard the objection. I can't believe anyone would object. So we are objecting to protecting Medicaid from fraud? We are objecting to protecting the integrity of the Medicaid Program? We are objecting to stopping inappropriate Medicaid payments?

We are making a mistake. I hope this gets fixed in conference, and I am going to work to do that. I regret the objection, but I understand why.

Madam President, I yield the floor.

Do I have to wait for my amendment to be reported?

Mr. President, my amendment repeals the AMT. Except for the telephone tax, the alternative minimum tax is the phoniest tax we have ever passed. The AMT, in 1969, was meant to hit 155 taxpayers who used legal means to avoid taxation, under the theory that everybody ought to pay some income tax.

This very year, more than 2,000 people who are very wealthy are not paying any income tax or alternative minimum income tax. So it is not even working and hitting the people it is supposed to hit. Right now, this year, 2007, the year we are in, there are 23 million families that are going to be hit by this tax. It is a phony revenue machine, over 5 years, $467 billion dollars. We are going to have to have a point of order this year to keep these 23 million taxpayers from paying this tax. We might as well do away with it right now, once and for all, and be honest about it.

I ask for the yeas and nays.

Mr. President, I want to lend my support to the Bunning amendment No. 594.

In the Deficit Reduction Act of 2005, we gave the States the ability to create flexible benefit plans. Section 6044 of the Deficit Reduction Act established a new section 1937 in title XIX, which allows States the option to provide a benefit package that meets a benchmark standard or benchmark equivalent standard of coverage for certain Medicaid beneficiaries. Under this section, States are required to provide Early and Periodic Screening Diagnostic and Treatment, EPSDT, services to children enrolled in benchmark coverage or benchmark equivalent coverage.

Specifically, section 1937(a)(1)(A) contained two related provisions. First, section 1937(a)(1)(A)(i), provides that States choosing to provide coverage under this section must provide benchmark coverage or benchmark equivalent coverage in the case of beneficiaries for whom a benchmark is an option. Second, section 1937(a)(1)(A)(ii), provides that in the case of children under age 19 receiving benchmark coverage or benchmark equivalent coverage, States must cover ``wraparound'' benefits to the benchmark

coverage or benchmark equivalent coverage consisting of EPSDT services and benefits specified in section 1905(r). In other words, an EPSDT ``wraparound'' consisting of all benefits and services enumerated in section 1905(r) is a requirement for States electing the benchmark option or benchmark equivalent coverage. The use of the term ``wraparound'' in this section should not be confused with the optional ``wraparound'' flexibility afforded states under section 1937(a)(1)(C). This section allows States to offer one or more ``wraparound'' benefits to enrollees, who otherwise would be limited to benchmark or benchmark equivalent coverage. EPSDT is not made optional but remains a required benefit.

On March 31, 2006, the Center for Medicare and Medicaid Services, CMS, issued guidance to states in a Dear State Medicaid Director letter on the implementation of the benchmark coverage. The CMS letter stated the following:

Individuals under age 19 who are covered under the State

plan under section 1902(a)(10)(A) of the Act must receive

wrap-around benefits to the benchmark, or benchmark-

equivalent plan, consisting of early and periodic screening,

diagnostic, and treatment (EPSDT) services defined in section

1905(r). Wrap-around benefits must be sufficient so that, in

combination with the benchmark or benchmark-equivalent

benefits package, these individuals receive the full EPSDT

benefit. The State plan must include a description of how

wrap-around benefits or additional services will be provided

to ensure that these beneficiaries receive full EPSDT

services.

It is my belief that the requirement of the provision of ESPDT to all children receiving benefits through a benchmark benefit package is a settled issue, both as a matter of law and of implementation of the law.

Giving States the ability to design benefit packages that are appropriate to the people receiving the benefits is key to Medicaid's future. The purpose of this important provision is to free States from a one-size-fits-all approach to Medicaid. Several States, including Kentucky, West Virginia, Idaho and Kansas, are taking the lead with these innovative plans to cover Medicaid recipients. We should resist any effort to limit the ability of the States to develop and implement these flexible, benchmark benefit plans. This flexibility will strengthen the long-term viability of the Medicaid Program and thereby protects coverage for low income children, pregnant women and families.

A vote against the Bunning amendment is a vote against the tools that States desperately need to manage their Medicaid Program. To me, the vote here is obvious. Vote to protect the Medicaid Program and state flexibility in Medicaid. Vote to protect the EPSDT benefit for children. Vote for the Bunning amendment.

Mr. President, do we have any time on this side?

Mr. President, the Senate just voted on an amendment that makes a good first step to putting kids first in SCHIP. However, it is all well and good to say we are putting kids first. But the amendment we just voted on is not worth the paper it is printed on if the Senate does not take the next step and back up these words with policy.

The Cornyn amendment represents actual kids-first policy. I ask Senators to support the needed next step to putting kids first. Support the Cornyn amendment.

Amendment No. 511

Mr. President, I ask unanimous consent to withdraw my amendment dealing with payment limitations on farm programs.

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

Madam President, lately we have heard a lot about the alternative minimum tax. It is a problem around here we have talked about and not done much about over a long period of time, whether Republicans have controlled this body or Democrats have controlled this body. Most often, we talk about the difficulties of really fixing the alternative minimum tax. Obviously, then, it is not a new problem. It has been with us for several decades.

The individual minimum tax, the precursor to the alternative minimum tax, as we call it now, dates from 1969. Congress then discovered, somehow, 155 taxpayers with incomes greater than $200,000 a year were not paying any taxes because they could legally avoid those taxes. So it was calculated that everybody ought to be paying a little minimum tax, and that is where the alternative minimum tax comes from. At that particular time, it was affecting about one taxpayer in half a million. Now, clearly, the situation has changed in the last 38 years.

Although not its only flaw, the alternative minimum tax's most significant defect is it is not indexed for inflation. This failure to index the exemption and rate brackets--the parameters of the alternative minimum tax system--is also a bipartisan problem. Though $200,000 was not an incredible amount of money in 1969, the situation is different today. I am not saying $200,000 is not a lot of money today, because it is, but $200,000 today will not buy what it would buy in 1969.

In 2004--the most recent year for which the Internal Revenue Service has complete tax data--instead of having 155 people paying this tax, more than 3 million families and individuals were hit by the alternative minimum tax. This chart I have in the Chamber has the numbers for every State in the Union. I am not going to go down those numbers now because we do not have time. But you can see, State by State by State, there are tens of thousands of people paying the alternative minimum tax who were never intended to pay it, even though we have taken some action in recent years so yet more people are not paying the alternative minimum tax.

This does not even begin to hint at what will happen if we do not continue to protect taxpayers from the alternative minimum tax. Barring an extension of the hold harmless contained in the 2006 tax bill, the alternative minimum tax exemptions will return to their pre-2001 levels. At the end of 2006, provisions allowing nonrefundable personal tax credits to offset AMT tax liability expired. If further action is not taken, it is estimated the alternative minimum tax will claim 35 million families and individuals by the end of this decade.

Now, think of that: A tax originally conceived to counter the actions of just 155 taxpayers could hit 35 million filers in just a few years, and I am talking about just around the corner. Some analyses show that in the next decade, it may be less costly to repeal the regular income tax than it would be to repeal the alternative minimum tax.

The AMT is a problem that has been developing for almost 40 years. On numerous occasions, Congress has made adjustments to the exemptions and the rates, though not as part of a sustained effort to keep the AMT from further absorbing our Nation's middle class until 2001. We did repeal it in 1998, but President Clinton vetoed it. We never, then, were able to get it repealed. So I am arguing for repeal.

Despite the temporary measures we have taken, the alternative minimum tax is still a very real threat to millions of taxpayers who were never supposed to be subject to the minimum tax. That the AMT has grown grossly beyond its original purpose, which was to ensure the wealthy were not exempt from an income tax, is indisputable, and that the AMT is inherently flawed would seem to be common sense.

Despite widespread agreement that something needs to be done about the AMT, agreement on what exactly to do is not very widespread. A major factor in the disagreement relates to the massive amount of money the AMT is supposed to be bringing into the Federal Government over the next few years--but remember, supposed to be bringing in from taxpayers who were never supposed to pay it in the first place. In 2004, AMT filers paid more than $12.8 billion into the Treasury.

If we do not extend the most recent AMT hold-harmless provisions that expired at the end of 2006, that number is projected to balloon to a much greater amount, and long-term budget forecasts currently show this greater amount coming into the Treasury.

When forecasters put their projections together, they are working under the assumption that the hold harmless which was extended in last year's tax bill will not be extended, that we will not take care of this problem. So they are guessing there is a whole bunch of revenue coming in from people who were never intended to pay it in the first place. Because of this, budget planners make the assumption that revenues will be much higher than everyone who is frustrated with the AMT thinks they ought to be. The reason for this is that the AMT ``balloons'' the revenue base, as it is projected to increase revenues as a percentage of gross national product. There is a great deal of evidence to support this.

Now, the nonpartisan Congressional Budget Office has consistently forecast the ballooning of AMT revenues year after year. This chart I have in the Chamber shows that with the red line. It takes into consideration that we are going to bring revenue in from people who were never supposed to pay it in the first place.

I just want to note that although the Tax Increase Prevention and Reconciliation Act of 2005 was signed into law after this analysis was published, the 2006 tax bill extended the AMT hold harmless only through December 31 of last year, and this chart shows Federal revenues all the way to the year 2050. It is important to note the long-term effects of the AMT on the revenue base because that is what is at issue: the basic idea that we are going to receive a lot of revenue from middle-income taxpayers who were never intended to pay it--which is part of that red line we have to get rid of because why tax people if they were not supposed to be taxed? The law is corrected from time to time to keep it from happening.

There may be some doubters who hesitate to attribute this ballooning of revenues to the AMT. But this next chart illustrates the drastic expansion of the AMT under current law over the next 43 years.

The Congressional Budget Office's report also states:

[B]y 2050, roughly 15 percent of individual income tax

liability would be generated by the AMT, compared with about

2 percent today.

This is what will happen if we do not do anything.

The problem with all of the projections showing the AMT ballooning revenues is that these projections are used

to put together the budget we have before us. Now, this is not a Senator Conrad problem. This is not a Democratic problem. This is a bipartisan problem. Republican and Democratic budgeteers rely on the same source of revenue--or I should say a source of revenue the Congressional Budget Office says is going to come in from people who were never intended to pay it.

This means the central problem in dealing with the alternative minimum tax is money. There are some people who say we can only solve the AMT if we offset the revenue and it can be found elsewhere to replace the money the AMT is currently forecast to collect. But we never intended to collect it from the people who we suppose are going to pay it. Anyone who says this sees the forecasts showing revenues being pushed up as a percentage of gross domestic product and wants big government to keep them up there.

These arguments are especially ridiculous when one considers that the alternative minimum tax was never meant to collect so much revenue. It is a failed policy in many ways.

The alternative minimum tax has even failed in its objective to ensure no citizen, no matter how wealthy, was able to completely avoid the Federal income tax, because in 2004, the Commissioner of IRS, Mr. Everson, informed the Finance Committee that the same number of taxpayers, as a percentage of the tax-filing population at large, continues to pay no Federal income tax. It boils down to the fact that the class of 155 people the law was set up for in the first place, in 1969, is even finding ways out of getting hit by the alternative minimum tax, and doing it legally because we have 2,366 taxpayers with incomes of $200,000 or more who do not use the medical and dental deduction had no income tax and no alternative minimum tax. The AMT has failed in every way except the ability to make Government bigger, or at least make it look bigger, and for those who think you ought to have an offset, to keep it big. The AMT has failed. While it may be hard for some to turn down taxpayers' money, whether we are supposed to collect it or not, no one has trouble spending the money--even the blue smoke money that is in that red line there.

It is simply unfair to expect taxpayers to pay a tax they were never intended to pay, and it is even more unfair to expect them to continue to pay for that tax once we get rid of it. The reform or repeal of the AMT should not be offset because it is money we were never supposed to collect in the first place.

The way to solve this problem is to look on the other side of the ledger, to the spending side. Budget planners need to take off their rose-colored glasses, because that never materializes, and if it does, you are going to ruin the middle class. So take off your rose-colored glasses when looking at long-term revenue projections and read the fine print.

In general, it is a good idea to spend money within your means, and this is true in this case for the Government as well. If we start trying to spend revenues we expect to collect in the future because of the alternative minimum tax, we are living beyond our means. We need to stop assuming record levels of revenue are available to be spent and recognize the alternative minimum tax is a phony revenue source.

As we consider how to deal with the alternative minimum tax, we must first remember we do not have the option of not dealing with it. The problems will only get worse every year and make any solution even more difficult. We must also be clear the revenue the AMT would not collect as a result of repeal or reform should not be offset as a condition of a repeal or reform. We shouldn't call it lost revenue because it is revenue we never had to begin with.

A few weeks ago I presented to this body a joint tax estimate of how various proposed fixes to the AMT will impact revenues expected to be collected under current law. I noted at that time that full repeal aside, each of these proposals will still allow the alternative minimum tax to bring in hundreds of billions of dollars into the Treasury. If you consider any proposal aside from full repeal, you are saying hundreds of thousands, if not millions, of taxpayers out there deserve to bear the burden of the AMT. In other words, the middle class that is so talked about on this floor of this Senate to protect, the only way they are going to be protected is the extent to which we do away with this tax.

Suppose we are able to continue enacting 1- or 2-year temporary patches, as we have done. First, this strategy assumes Congress will have the time and the inclination to spend time dealing with the alternative minimum tax every year or two. This means whatever the issue of the day might be--Iraq, unemployment, natural disasters-- Congress will have to stop dealing with those other problems and return to a problem we should never have had to deal with in the first place. Is the alternative minimum tax an issue that we as a legislative body want to revisit every year? Wouldn't it be better to solve it once and for all, particularly since it is phantom revenue, taxing middle-class Americans who were never supposed to pay it in the first place? Remember, only 155 taxpayers were targeted with this tax in 1969.

Second, every time Congress attempts to enact or extend a temporary fix, the same revenue issues are going to come up. Budget projections create the illusion of forgone revenues given up because of an alternative minimum tax hold harmless. Every time a patch is considered, there is another chance for taxpayers to be subject to this stealth tax increase.

Clearly, there is only one way to fix the AMT so no taxpayer is subjected to what has become a complete policy failure. We must completely repeal the individual AMT. There is a bipartisan consensus that only complete repeal is an adequate solution to this problem. Chairman Baucus, along with this Senator, Senator Crapo, Senator Kyl, Senator Roberts, Senator Schumer of New York, and Senator Smith last month introduced the Individual Alternative Minimum Tax Repeal Act.

We must repeal the AMT and we must do it without offsetting any revenue the AMT is expected to collect in the future. I have made this point before, but it is important. The alternative minimum tax was never intended to be a significant source of revenue. It was only meant to hit a few people who could legally avoid paying the tax with the idea that everybody living in America ought to pay a little bit of income tax for the privilege of benefiting from this great economy we have. Despite this, the alternative minimum tax will balloon revenues to historically high levels if something isn't done, as my colleagues can see right there on the chart.

If we consider the AMT to be a fundamentally unfair tax, any tax that would replace it would be equally unfair. Anyone who wants equity to be a fundamental value represented in our Tax Code and who wants fair treatment for this country's middle-class taxpayers must support my amendment for complete repeal of the individual income tax.

I filed an amendment that repeals the AMT. I am going to push this body to speak on this proposal for these reasons: We need to get Members who say they support AMT repeal to show their support for the record; second, to eliminate the mythical budgeting that results from assuming current levels of AMT revenues; third, to show the American people we will walk the walk on the AMT repeal and not just talk the talk.

I know some who oppose my amendment will argue two points: that there is $180 billion in the budget for tax relief; and secondly, we can't afford the repeal of AMT.

As to the first point, the purpose of the Baucus amendment, which I supported yesterday, was to deal with less than half of the tax relief that expires in the year 2010. In a sense, Members have indicated where they want that money to go, and that revenue loss is built into the post-2010 period.

As to the second point, we can afford to repeal the AMT because revenues remain at or above record levels in the outyears with the AMT gone. Honest budgeting would recognize it as fictional in any event.

I yield the floor.

Madam President, this budget proposal does not allow the Senate to address the unfair burden of the death tax. By 2011, the tax will affect all farms and businesses worth more than $1 million at a tax rate as high as 55 percent. In the State of Iowa alone, according to the USDA, we have more than 20,000 farms worth more then $1 million. Those families may be land rich, but they are cash poor, and they have to spend too much money today to plan on how to survive the unfair death tax. These are not big farms. With land prices today, you can have as few as 350 acres in Iowa to have a million dollars in value.

If the Senate fails to put money in the budget today and we leave the death tax in place in its punitive form, our failure to amend this budget will create the economic uncertainty that could dismantle our farms and small businesses in rural America. I will be voting ``yes'' on the Kyl amendment. It puts money in the budget. It is the responsible thing to do.