Floor Statements

Mr. President, I ask unanimous consent that Kathleen West, a fellow on the Finance Committee staff, be permitted access to the floor during debate on the Pension Funding Equity Act.

Mr. President, I ask unanimous consent that people on Senator Baucus's staff, Jane Bergeson, Simon Chabel, and Trace Thaxton, interns with the Finance Committee, be granted the privilege of the floor for the remainder of the debate on H.R. 3108, the 30-year Treasury bill.

Mr. President, I rise today to pay tribute to a fellow Iowan and a great patriot, Iowa National Guard Specialist Aaron J. ``George'' Sissel. Specialist Sissel gave his life in service to his country on November 29, 2003 in support of Operation Iraqi Freedom when the convoy in which he was traveling came under enemy fire. This brave young man was only 22 years old at the time of his death.

I ask my colleagues in the Senate, my fellow Iowans, and all Americans to join me today in paying tribute to Specialist Sissel for his dedication to the cause of freedom and for his sacrifice in defense of the liberties we all so dearly prize. He selflessly served his Nation, sacrificing his life for the great principles that underpin both our way of life and the hopes and dreams of all humankind--the principles of liberty, justice, and equality. In a statement released following his death, Specialist Sissel's family offered the following words about their son and brother: ``Aaron 'George' died doing what he loved and believed in. We are very proud of him.''

We can all be very proud of men like Specialist Sissel. Our Nation's history is distinguished by the presence of extraordinary men and women willing to risk their lives in defense of our country, but also by families who sacrifice those they love for the sake of the great principles of American life. While we share the pride felt by Specialist Sissel's family, we also share their grief. My deepest sympathy goes out to the members of Specialist Sissel's family, to his friends, and to all those who have been touched by his untimely passing. May his mother, Jo, his father and stepmother, Kirk and Cindy, his sister, Shanna, and his fiancee, Kari Prellwitz, be comforted with the knowledge that they are in the thoughts and prayers of many Americans, and that they have the eternal gratitude of an entire nation.

Specialist Sissel did not die in vain; rather, he died in defense of the Nation he loved and the principles in which he believed. Indeed, Specialist Aaron J. ``George'' Sissel has entered the ranks of our Nation's greatest patriots, and his courage, his dedication, and his sacrifice are all testaments to his status as a true American hero.

SP4 David J. Goldberg, U.S. Army

Mr. President, I urge my colleagues to support H.R. 743, the Social Security Protection Act of 2003.

The Social Security Protection Act of 2003 provides the Social Security Administration with important new tools to fight waste, fraud, and abuse. This bill would eliminate benefits to fugitive felons. It would prohibit benefits to illegal workers. It would eliminate the ``last day'' loophole in the Government Pension Offset. It would provide additional oversight of representative payees. Finally, the bill would improve benefits for person with disabilities.

This bill passed the House of Representatives in April. The Senate Committee on Finance approved the bill in September with a number of important changes.

In order to expedite passage of this legislation, Senator Baucus and I have worked closely with the chairman and the ranking member of the Social Security Subcommittee of the House Ways and Means Committee over the past several weeks. The result of this work is reflected in the managers' amendment that has now been incorporated into this bill.

I have drafted an explanation of the amendment that has been agreed to by the chairman and the ranking member of the House Social Security Subcommittee, as well as by the chairman and ranking member of the Senate Finance Committee. I ask unanimous consent that the explanation be printed in the Record.

I strongly urge my colleagues to support this commonsense, bipartisan legislation.

Mr. President, I yield myself such time as I might consume.

First, I very much appreciate the passion of the opposition. Hopefully, they will look back on this day and come to the conclusion that we have not only provided prescription drugs for seniors as the first improvement in Medicare in 38 years and the strengthening of Medicare that follows it, but that we are also in the process of giving baby boomers an alternative Medicare Program, if they would so choose.

The basis of such legislation is the right to choose for seniors. No one is forced to do anything. We will give those baby boomers a program that is much closer to the health insurance they have in the places from which they retire.

Regardless, there are two classes of people covered today or not covered today with prescription drugs that we are emphasizing. For low- income people, too often our seniors are choosing between heat and prescription drugs, particularly in the cold areas of the country, or between food and prescription drugs. This legislation is going to lessen the chances that low-income people are going to have to make such choices.

The other group of people are those who have catastrophically high prescription drug costs. There is heavy subsidy and help in this bill for those two categories of people. Those are significant categories of people.

Also, we are doing something for everybody in this legislation from the standpoint that for the first time there will be in place mechanisms to dramatically negotiate down the price of drugs. That is obviously going to help the people who voluntarily choose to go into these plans, but the extent to which that is going to have an impact on everybody, old or young, is very important because all I hear from opponents of this bill is that we do not do anything to help cut down on the costs of drugs.

We do it through the subsidy. We do it through negotiations. We do it through getting generic drugs on the market much sooner than before.

Also, this bill is about enhancing quality of life, because none of us think the quality of life is enhanced by putting people in the hospital if they do not need to go to the hospital.

Remember when Medicare was enacted 38 years ago, the practice of medicine was to put everybody into the hospital. Today, the practice of medicine--and a lot of the thanks can go to prescription drugs--is to keep people out of hospitals and out of operating rooms. So people who cannot afford drugs, who go to the doctor very sick,

are going to not only end up in a place they do not want to go, because people would rather not go to hospitals, rather not go to operating rooms. It is going to save our programs a lot of money, both private and public payment programs, for doctors and hospitals, when we can have people go into programs where they can get prescription drugs and keep their health up so they do not go to the hospital.

So we are bringing Medicare and the practice of medicine into the 21st century. In strengthening and improving Medicare, we are doing today exactly what we would be doing if we were writing a Medicare Program in the year 2003 as opposed to the year 1965.

I hope the opponents, in a few years, can look back and say this is the day we have done the right thing for seniors, for their economic life, for the quality of their life; we have done the right thing for our hospitals and our doctors; we have done the right thing for America.

I would like to spend just a little bit of time counteracting the arguments that are used against this bill by those who say we are not doing enough for low-income people. In fact, this bill is coming back from conference doing better for low-income people than when it went into conference.

One of those major changes that were made, not only at the behest of the House of Representatives but also at the behest of a lot of people in this body, probably more prominent in the Democratic Party than in the Republican Party, was to make sure the category of people we call dual eligibles--those low-income seniors who are already on Medicare but also qualify for Medicaid--is to put all of those into the Medicare Program so we didn't have an inequality. Maybe it was not a very big inequality but at least there was some inequality from one State to another State because of the Federal-State partnership in Medicaid that enables the State legislatures in some States to maybe set up a little different program--a little more rich, a little less rich--than what might be done in another State.

So dual eligibles are in this bill because of the demands of mostly Democrat Senators and people in the House of Representatives. That is something I didn't believe should be done, but I supported it because that was a necessary compromise. But now I find people who were advocating that position complaining about the legislation. So I want to tell them how wrong they are or how, if they are right just a little bit, they are right in such an insignificant way that it is immaterial because that ought to be seen as something that results from something they wanted us to do in this legislation.

This conference report, then, contains a generous drug benefit for these dually eligible seniors. There is, first of all, no donut hole for low-income Medicare beneficiaries. Let's get this clear. Let me make it clear. People on that side of the aisle are complaining about a donut hole. But for low-income people there is no donut hole. The bill guarantees all 6 million dual eligibles access to prescription drugs.

Under our conference report, dual eligibles will have better access through Medicare, especially since State Medicaid programs are increasingly imposing restrictions on patients' access to drugs, and that is what brings about greater inequity from State to State. Since States are in a budget crunch, forced to do that, some dual eligibles might be treated less generously in one State as opposed to another, but when they are all under the Federal Medicare Program, that will not be the case.

Further, States have the flexibility to provide coverage for classes of drugs, including over-the-counter drugs, that are not now covered by the Medicare Program. This bill ensures appeal rights for dual eligibles. Under the agreement, dual eligibles will maintain appeals rights like those in the Medicaid Program. The dual eligibles are a fragile population and I think, because of the conference report as opposed to either bill in its original form, they are taken care of better in this bill. The conference report recognizes and provides generous coverage to these 6 million people.

I hope we can take the summation of the AARP when they said this bill ``is a historic breakthrough and [an] important milestone in the Nation's commitment to strengthen and expand health security for its citizens. . . .'' I hope that will be conceived or considered as a toning down of the partisan opposition to this legislation.

I reserve the remainder of my time just in case some colleagues come over. I have more to say, but I will say it later if other colleagues don't show up, so I yield the floor.

Title XI

The purpose of this bill is to ensure that Medicare beneficiaries get the benefit of negotiated discounts that the private sector is able to achieve. We want seniors, who today pay the highest prices, to have access to discounted prices. And we also don't want to see the situation we have today with Part B covered drugs. Isn't it true that the Federal Government dramatically overpays for the drugs that are currently covered under Medicare today?

Isn't this requirement the same standard that applies to the Federal Employees Health Benefits Plan?

Yes, CBO estimates that under the conference report seniors will be offered average greater savings under the Senate bill. The price for prescription drugs will almost certainly be lower than the prices seniors who do not have drug coverage pay today.

company-owned life insurance

I thank the Senator.

I agree. The hearing was informative and prepared the committee to come to an agreement on the reforms that ought to take place.

I share this regret. Let me pledge to have this markup on a COLI provision at the Finance Committee's first opportunity in 2004. I look forward to completing the action we began in October.

That is correct, Senator. The Medicare conference agreement contains a number of significant reforms, which will save billions of dollars in overpayments from Medicare covered drugs, while also substantially increasing payments to physicians. I intend to preserve continued access to high-quality cancer care.

Yes. I would also note that the Senator from Kansas, Mr. Brownback, has some concerns over this issue. He has been a forceful advocate for the oncology community. And while I think the package for cancer care is a fair one, I understand that he has some concerns.

The Senator from Kansas is correct. My commitment to cancer patients has not changed. Indeed, according to estimates from the Congressional Budget Office, this bill is expected to actually increase net payments to oncologists in 2004. Also, CBO estimates that the new Average Sales Price Reimbursement model, when coupled with the changes in practice expense reimbursement, will amount to net reductions to cancer care of $4.2 billion over the next 10 years.

The Senator is correct.

I did know that, and I know that certain mental illnesses also fall in that category. This bill contains a number of protections for people who need exactly the right medicine for them.

I agree. And I am pleased with the backup protections in this bill. That if a plan doesn't carry or doesn't treat as preferred a drug needed by, say, a person with AIDS, a simple note from a doctor explaining the medical need for that particular drug could get that drug covered.

I agree with my good friend.

I agree.

Mr. President, I yield myself such time as I consume and I invite proponents of the legislation to come over so I can yield some time to them.

One of the issues that has been bad-mouthed by the other side, the opponents of this legislation, is that we have not done enough to help retiree coverage; in other words, the problem they would suppose is that a lot of corporations will be dumping their plans on the Government.

First of all, Congress can't pass a law telling any corporation X, Y, or Z that they can't do that. If they decide it is in their interest, they are going to do it. The point is they have been doing it for years and years.

I had a chart up here 2 days ago that showed how we have gone down from about 89 percent to 60 percent over the last 10 years of the corporations that had retiree health plans. What we are doing is putting in place a program so that if a corporation does that, there is at least something for people who have zilch when it comes to prescription drugs.

One of the things we have done to encourage corporations not to do that is we have put $89 billion in this bill to protect retiree health coverage. This funding makes it more likely--not less likely--that employers will continue their retiree benefits. We do that for two reasons. Obviously, it is better for people to keep what they have. So there is an incentive for that. That will help keep a good drug benefit. Second,

if this is dumped on the Medicare Program, it is going to be much more costly than to keep it in the corporation plan. We did it for those two reasons.

The opponents of this bill have been saying retirees are going to be dropped--that they will be left without coverage because of this bill. It is easy to make very clear that these retirees will not be left without drug coverage. That is, obviously, because one of the motivations behind this 3-year effort to get prescription drugs in Medicare is to take care of or at least offer a plan to people who don't have anything. That is about 35 percent of the people today. It is better for those who do not have as good a plan as we are putting on the books. These retirees will still be better off than they are today because today, when their employers drop their coverage, they are left with nothing--no coverage at all.

Because of this bill, these retirees will be getting drug coverage from Medicare, and their former employer will likely pay the monthly premium for that.

This is a bipartisan bill. This bill addresses the problem we saw as a very serious problem. According to the Congressional Budget Office, we have addressed it in a very responsible way and by reducing very much the possibility that these corporate retirees will be dumped onto this plan.

This bipartisan bill protects retirees' benefits. That has been our goal, and we have accomplished it. The time has come strengthen and improve Medicare with this historic bipartisan agreement. It is the culmination of years of work by Republicans and Democrats who have come together to get this done.

As the AARP has made clear when providing its strong endorsement, this bill ``helps millions of older Americans and their families,'' and is ``an important milestone in the nation's commitment to strengthen and expand health security for its citizens. . . .''

This bill offers an affordable, universal prescription drug benefit that will cover about half the cost of prescriptions for the average senior.

It offers generous coverage for 14 million lower income seniors. It expands coverage for lower income seniors far beyond what is offered today. They will have access to drug coverage with lower or no premiums, no coverage cap, and coverage of 85 percent to 95 percent of the cost of prescription drugs.

And the new Medicare drug benefit is voluntary--no one is forced to enroll in this benefit. Seniors can stay in traditional Medicare just like they have today and have full access to prescription drugs.

There is also a guaranteed government fallback. It is a guarantee that seniors will be able to get prescription drug coverage.

This bill also invests $89 billion to protect retiree health coverage. This funding makes it more likely, not less likely, that employers will continue their retiree benefits.

This bill also creates new coverage choices for beneficiaries in a newly revitalized Medicare Advantage program. And this is voluntary too--no one will be forced to join an HMO.

The bill lowers drug costs by speeding the delivery of new generic drugs to the marketplace, lowering costs for all Americans, not just those on Medicare.

The bipartisan bill includes long overdue improvements to Medicare's complex regulations.

It also revitalizes the rural health care safety net with the biggest package of rural payment improvements Congress has ever seen.

I urge my colleagues to put the interests of our seniors first and give them more choices and better benefits by voting for this historic bipartisan prescription drug bill.

We cannot let this opportunity pass.

Mr. President, it has been a long and arduous process to get us to where we are today. This is a process that didn't start this year, or even last year, but many years ago, on the foundation of what we then called the ``tripartisan bill.'' Through many years of discussions and negotiations in the Finance Committee, we have taken the foundation of that first bill and crafted comprehensive Medicare policy that will vastly improve the health and overall well being of our nation's seniors.

Our critics will say it is not enough or that it lacks one provision or another. My response is that no other Finance Committee membership and no other Congress has been able to produce a bill of this magnitude. We have worked tirelessly in the Finance Committee and with our colleagues in the House to try to make this bill as perfect as possible.

The reality is the Medicare program itself is not perfect.

And I challenge those in opposition to this bill, to show me perfect legislation. It is impossible because we're adding layers on a system that has been in place for nearly 40 years. But everyone involved in this process has worked their hearts out to make this bill the best bill that it can be. It has been a sacrifice for all involved. Missed dinners with family, missed weekends with the kids, little sleep, and intense emotions and intellectual energy--to make this bill what it is.

We've all given 150 percent to get this bill done. And I will admit we did not reach ``perfection'', but we reached excellence. And America's seniors will benefit from the commitment that was made by all of us involved. We did it for them. And it will make a positive difference in their lives. To me, that is the closest thing to perfection that we could achieve.

Let me close by thanking my colleagues on the committee, in the Senate, the House, CMS, HHS and the White House. Dedicated individuals across the Congress and the Executive Branch have worked tirelessly, night and day, to make this happen, and they deserve our thanks for their true commitment to this bill and their commitment to this country.

For my part, I want to thank my own current Finance Committee staff: Ted Totman, my Deputy Staff Director who shepherded staff and members through this arduous process; Linda Fishman, my Health Policy Director who led the committee's consideration of this bill and who captained a team of talented analysts, including Colin Roskey, whose daughter, Rose, was born while negotiations played out in the Finance Committee in March; Mark Hayes, who balanced multiple titles of this legislation while attending law school at night; Jennifer Bell, whose dedication to the needs of rural Americans played an instrumental role in the success of our rural healthcare package; Leah Kegler, who managed many of the complex low income and Medicaid policies in the bill; Alicia Ziemiecki, who provided crucial assistance and support to all on this staff and to individual Committee members throughout the year; and Mollie Zito, who joined the staff just this year and immediately made important contributions to the overall effort.

Still other former members of my Finance Committee staff who are not with me on the floor today have been instrumental in the development of this legislation. They include: Monica Tencate, Tom Walsh, Rebecca Reisinger, Hope Cooper, and Jeannie Haggerty, each of whom helped to shape the original Tripartisan proposal, whose imprint on this legislation is unmistakable. Each of these individuals contributed creatively, analytically and energetically to the successful completion of this legislation.

Beyond the health staff of the Finance Committee, I want to recognize other committee staff who played important roles in resolving the many interwoven, complex tax, health and trade policies within this legislation. Mark Prater and Diann Howland helped navigate many of the health savings account and employer-related issues in the bill. Steven Schaefer and Everett Eissenstadt along with Rita Lari of my Judiciary Committee staff helped conferees reach consensus on difficult pricing, importation and generic drug policies. Steve Robinson assisted in budgetary matters, and Dean Zerbe and Emilia DiSanto provided good counsel on matters relating to Medicare program integrity. Jill Kozeny, Jill Gerber, Beth Levine and Dustin Vande Hoef provided cogent and concise outreach and explanation to the media. Leah Shimp, Cory Crowley and Mary Gross kept in close touch with Iowans on the legislation. And Kolan Davis, my Chief Counsel on the committee, provided important oversight and advice throughout the process.

Beyond my own staff, I want to recognize Senator Baucus's staff, with whom I have enjoyed an excellent working relationship over the last few years and with whom my own staff has

worked especially closely: Jeff Forbes, Russ Sullivan, Judy Miller, Bill Dauster, Liz Fowler, Jonathan Blum, Pat Bousliman, Andrea Cohen, Mike Mongan, Kate Kirchgraber and Dan Stein. Senator Baucus's team have shown a sincere commitment to balanced, fair bipartisan legislation and have been consummate professionals throughout.

The staff to my Senate colleagues on the conference are also deserving our thanks. Each contributed to a collegial working environment under enormous time and political pressures: Pattie DeLoatche, Mark Carlson, and Bruce Artim with Senator Hatch; Stacey Hughes, Hazen Marshall and Bini Zomer with Senator Nickles; Don Dempsey, Diane Major, Elizabeth Maier and Lisa Wolski with Senator Kyl; Dean Rosen, Elizabeth Scanlon, Craig Burton and Eric Ueland with Senator Frist; and Sarah Walter, Michele Easton and Paige Jennings with Senator Breaux.

Finally, all of us were extremely well served by the hard work of our Congressional support agencies, including the able work of our Senate Legislative Counsels who toiled longer into the night than most: Ruth Ernst, John Goetcheus and Jim Scott. Technical and analytical support was provided by experts at the Congressional Research Service, including Richard Price, Jim Hahn, Chris Peterson, Hinda Chakind, Jennifer O'Sullivan and Jennifer Boulanger and many others who assisted in the completion of the Conference Report. At the Congressional Budget Office, Doug Holtz-Eakin, Steve Lieberman, Tom Bradley, Chris Topileski, Phil Ellis, Rachel Schmidt, Jeannie De Sa, Eric Rollins, Shinobu Suzuki and many others played crucial roles in developing cost estimates for policies large and small in this conference agreement.

Each of these dedicated individuals is deserving of our thanks for their commitment to improving Medicare and making affordable access to prescription drugs a reality for America's seniors.

If the other side says it is OK, I would like to yield 3 minutes to the Senator from Texas.

I yield the remainder of my time to the Senator from Utah.

Mr. President, I rise today to introduce the Mexican Agricultural Trade Compliance Act. This bill directs the U.S. Trade Representative to retaliate against Mexico over that country's de facto prohibition on the importation of U.S.-produced high fructose corn syrup.

I introduce this bill reluctantly. For months I have made it clear, through letters, floor statements, a hearing, and a trade roundtable, that if the Mexican Congress did not lift its illegal 20 percent tax on soft drinks containing high fructose corn syrup, I would be forced to consider introducing retaliatory legislation, such as this ``tequila tariff'' which also covers other agricultural products.

We're at the end of our legislative session and there has been no action by the Mexican Congress. So, I'm faced with no alternative but to introduce this bill.

Let me explain how we got to where we are today. Mexico was formerly the largest export market for U.S.-produced high fructose corn syrup. But since 1997, Mexico has engaged in a concerted effort to restrict U.S. imports of this product. Throughout this time, Mexico has consistently violated its NAFTA and WTO commitments.

Let me give you a short history of Mexico's unjustified actions. In February 1997, Mexico initiated an antidumping investigation of U.S. high fructose corn syrup, followed by the imposition of an antidumping order the following year. The United States challenged Mexico's antidumping order under the NAFTA. On two different occasions, NAFTA panels determined that Mexico's actions violated its NAFTA obligations.

The United States also challenged Mexico's antidumping order at the Wortd Trade Organization. On two separate occasions, the Dispute Settlement Body of the WTO held that Mexico's actions violated its international trade commitments.

But Mexico continued to ignore its NAFTA and WTO obligations. In fact, Mexico went one step further and in effect threw gasoline onto the fire. On January 1, 2002, in a transparent attempt to evade the NAFTA and WTO determinations against it, Mexico imposed a 20 percent tax on soft drinks containing high fructose corn syrup. The intent and effect of this tax was to continue Mexico's antidumping order on U.S. produced high fructose corn syrup by other means.

In April 2002, with its tax now in place, and in a continuous event with the imposition of this tax, Mexico lifted its antidumping order on high fructose corn syrup. These actions enabled Mexico to make the disingenuous claim that it had come into compliance with the findings adopted by the NAFTA and the WTO regarding its antidumping order.

The effects of the import restrictions of Mexico's antidumping order continue, with even more egregious results. Because of Mexico's tax, U.S. exports of high fructose corn syrup to Mexico are now at almost zero levels.

This is an extraordinary situation. Mexico lost under the NAFTA, and it lost at the WTO commitments, Mexico responded by imposing a de facto ban on imports of U.S. high fructose corn syrup. Mexico is not only violating its international trade commitments, but also causing significant harm for Iowa's corn farmers. Iowa's producers of high fructose corn syrup are suffering as well. I know of no other U.S. agricultural product that has been shut out of its largest export market for so long.

The United States has worked diligently, and patiently with Mexico on this issue. U.S. Trade Representative Robert Zoellick and Ambassador Allen Johnson, our Chief Agricultural Negotiator, have put in countless hours trying to convince Mexico to come into compliance with its trade obligations regarding high fructose corn syrup. But still, the tax remains in place. My colleagues on both sides of the aisle, and

in both the Senate and the House, have repeatedly contacted Mexican officials reminding them of Mexico's trade commitments with regard to this issue. But still, the tax remains in place.

I too have worked hard, since the beginning, to try to convince Mexico to lift its de facto ban on the sale of U.S.-produced high fructose corn syrup. As I have mentioned, I've written letters to Mexican officials, delivered floor speeches, conducted a Finance Committee hearing, and held an agricultural roundtable, all in an effort to convince Mexico to lift its de facto ban on imports of U.S. high fructose corn syrup. During a hearing of the Finance Committee on September 23, I stated clearly that if the Mexican tax on soft drinks containing high fructose corn syrup was not lifted--and soon--I would be forced to consider introducing retaliatory legislation. But still, the tax remains in place.

So now, at the end of our legislative session, I see no alternative but to introduce the Mexican Agricultural Trade Compliance Act.

The Mexican Agricultural Trade Compliance Act establishes that the Government of Mexico has engaged in a pattern of activity that has continuously denied the rights of U.S. exporters of high fructose corn syrup under existing trade agreements. Further, the denial of these rights is unjustifiable and burdens or restricts U.S. commerce. Therefore, Mexico's actions meet the statutory criteria under section 301 of the Trade Act of 1974 for retaliatory action.

The Mexican Agricultural Trade Compliance Act requires the U.S. Trade Representative to retaliate, pursuant to section 301, against imports from Mexico within 60 days of enactment of the Act. However, the U.S. Trade Representative shall not take such action if he certifies, within 30 days after enactment of the Act, that Mexico has eliminated its tax on soft drinks containing high fructose corn syrup and is according the U.S. high fructose corn syrup industry the benefits of all applicable trade agreements.

I fully hope that prior to the return of the U.S. Senate in January, the Mexican Congress will act rationally and bring Mexico into compliance with its international trade obligations regarding high fructose corn syrup. If it does not, I'll work hard to advance the Mexican Agricultural Trade Compliance Act through the Senate. Given the large number of unjustified barriers imposed by Mexico over the past months against imports of U.S. agricultural products, Mexico has not been earning goodwill with Members of the Senate. I expect that my legislation will receive broad support.

I also intend to work with the U.S. Trade Representative to designate Mexican products upon which retaliatory duties will be imposed. The products on this list will consist first and foremost of Mexican agricultural products that are prospering on account of their access to the U.S. market. These Mexican products will likely include bottled tequila, tomatoes, bell peppers, avocados, limes, asparagus, mangos, papayas, watermelons, honey, pecans, and shrimp and prawns. The total amount of duties imposed on these Mexican products will equal the lost sales being experienced by U.S. producers of high fructose corn syrup on account of Mexico's de facto ban of this product, an amount which-- according to U.S. industry--could be as high as $465 million annually.

Let me conclude by stating that I know that some in Mexico are working constructively to try to resolve this issue. Earlier this month President Fox of Mexico sent to the Mexican Congress a formal request to repeal the tax on high fructose corn syrup. I hope that his request becomes law. I appreciated the offer of Mexico's Secretary of Agriculture, Javier Usabiaga, to speak with me regarding the tax, and I regret that our schedules have not permitted us to meet personally. I also note that U.S. and Mexican private sector representatives have been negotiating over access for U.S. high fructose corn syrup to the Mexican market.

Regardless of these efforts, Mexico's de facto ban on imports of U.S. high fructose corn syrup remains in place. Meanwhile, Iowa's corn growers and Iowa's high fructose corn syrup producers continue to suffer on account of Mexico's NAFTA and WTO illegal actions. Again, I strongly hope that Mexican legislators will remove Mexico's tax on soft drinks containing high fructose corn syrup prior to the return of the U.S. Senate next January. But if this tax is not repealed by January, I have every intention of working to advance this legislation through the Senate.

I'm a strong believer in free trade. I fought hard for passage of the NAFTA. I did so because I know free trade benefits farmers in Iowa and other states. U.S. agriculture certainly benefits from the NAFTA, as does Mexican agriculture. But Mexico has engaged in a blatantly illegal act against U.S. agriculture for too long. Mexico's action is having a particularly negative impact on my State of Iowa. If we are to maintain support for free trade in this country, we must ensure that our trading partners live up to their obligations. If they do not, we must take action. I hope the introduction of this bill sends a strong message to my Mexican counterparts that we are ready and willing to stand up for U.S. agriculture. I sincerely hope that they will do the right thing and repeal their illegal tax on high fructose corn syrup.

I hope they repeal their illegal tax to demonstrate their commitment to living up to the letter and spirit of Mexico's promises under NAFTA and the WTO. I hope they repeal their illegal tax to improve relations between the United States and Mexico and to bring the benefits of free trade to consumers and producers in both countries. And, Mr. President, I hope they repeal their illegal tax so the Mexican Agricultural Trade Compliance act is no longer needed. But, if that's what it takes, then that's what we should do.

Mr. President, today we introduce a bill to fight tax fraud. I am not talking about just moving around a few numbers on a tax return. Today we will begin closing the loop holes that have created millions of gallon and billions of dollars of missing fuel and missing tax dollars. This problem not only robs the U.S. Treasury it also robs the American Taxpayer.

We rely on these tax dollars to fund not only the Highway Trust Fund, which is charged with constructing and maintaining our national transportation system, this also robs money from our Airport Trust Fund.

In light of investigations completed since September 11th, the safety and soundness of maintaining our nation's transportation infrastructure is now more than ever of the utmost importance. These issues are not just tax fraud--not only are we concerned with the tax loss, but where else is this money going--is it being used to fund terrorism? We need to know where all of this fuel is going. What makes us think that if we cannot find the fuel to collect the tax, that we could find the fuel to stop the terrorists acts. A missing barge could hold ninety tanker truck loads of fuel, that's about $500,000 in Federal and State excise taxes left uncollected, its also hundreds of thousands of gallons that we cannot account. That cannot happen, and this bill should help our enforcement officers close the loop holes and collect the tax that builds our highways.

Mr. President, I rise today to introduce the Mexican Agricultural Trade Compliance Act. This bill directs the U.S. Trade Representative to retaliate against Mexico over that country's de facto prohibition on the importation of U.S.-produced high fructose corn syrup.

I introduce this bill reluctantly. For months I have made it clear, through letters, floor statements, a hearing, and a trade roundtable, that if the Mexican Congress did not lift its illegal 20 percent tax on soft drinks containing high fructose corn syrup, I would be forced to consider introducing retaliatory legislation, such as this ``tequila tariff'' which also covers other agricultural products.

We're at the end of our legislative session and there has been no action by the Mexican Congress. So, I'm faced with no alternative but to introduce this bill.

Let me explain how we got to where we are today. Mexico was formerly the largest export market for U.S.-produced high fructose corn syrup. But since 1997, Mexico has engaged in a concerted effort to restrict U.S. imports of this product. Throughout this time, Mexico has consistently violated its NAFTA and WTO commitments.

Let me give you a short history of Mexico's unjustified actions. In February 1997, Mexico initiated an antidumping investigation of U.S. high fructose corn syrup, followed by the imposition of an antidumping order the following year. The United States challenged Mexico's antidumping order under the NAFTA. On two different occasions, NAFTA panels determined that Mexico's actions violated its NAFTA obligations.

The United States also challenged Mexico's antidumping order at the Wortd Trade Organization. On two separate occasions, the Dispute Settlement Body of the WTO held that Mexico's actions violated its international trade commitments.

But Mexico continued to ignore its NAFTA and WTO obligations. In fact, Mexico went one step further and in effect threw gasoline onto the fire. On January 1, 2002, in a transparent attempt to evade the NAFTA and WTO determinations against it, Mexico imposed a 20 percent tax on soft drinks containing high fructose corn syrup. The intent and effect of this tax was to continue Mexico's antidumping order on U.S. produced high fructose corn syrup by other means.

In April 2002, with its tax now in place, and in a continuous event with the imposition of this tax, Mexico lifted its antidumping order on high fructose corn syrup. These actions enabled Mexico to make the disingenuous claim that it had come into compliance with the findings adopted by the NAFTA and the WTO regarding its antidumping order.

The effects of the import restrictions of Mexico's antidumping order continue, with even more egregious results. Because of Mexico's tax, U.S. exports of high fructose corn syrup to Mexico are now at almost zero levels.

This is an extraordinary situation. Mexico lost under the NAFTA, and it lost at the WTO commitments, Mexico responded by imposing a de facto ban on imports of U.S. high fructose corn syrup. Mexico is not only violating its international trade commitments, but also causing significant harm for Iowa's corn farmers. Iowa's producers of high fructose corn syrup are suffering as well. I know of no other U.S. agricultural product that has been shut out of its largest export market for so long.

The United States has worked diligently, and patiently with Mexico on this issue. U.S. Trade Representative Robert Zoellick and Ambassador Allen Johnson, our Chief Agricultural Negotiator, have put in countless hours trying to convince Mexico to come into compliance with its trade obligations regarding high fructose corn syrup. But still, the tax remains in place. My colleagues on both sides of the aisle, and

in both the Senate and the House, have repeatedly contacted Mexican officials reminding them of Mexico's trade commitments with regard to this issue. But still, the tax remains in place.

I too have worked hard, since the beginning, to try to convince Mexico to lift its de facto ban on the sale of U.S.-produced high fructose corn syrup. As I have mentioned, I've written letters to Mexican officials, delivered floor speeches, conducted a Finance Committee hearing, and held an agricultural roundtable, all in an effort to convince Mexico to lift its de facto ban on imports of U.S. high fructose corn syrup. During a hearing of the Finance Committee on September 23, I stated clearly that if the Mexican tax on soft drinks containing high fructose corn syrup was not lifted--and soon--I would be forced to consider introducing retaliatory legislation. But still, the tax remains in place.

So now, at the end of our legislative session, I see no alternative but to introduce the Mexican Agricultural Trade Compliance Act.

The Mexican Agricultural Trade Compliance Act establishes that the Government of Mexico has engaged in a pattern of activity that has continuously denied the rights of U.S. exporters of high fructose corn syrup under existing trade agreements. Further, the denial of these rights is unjustifiable and burdens or restricts U.S. commerce. Therefore, Mexico's actions meet the statutory criteria under section 301 of the Trade Act of 1974 for retaliatory action.

The Mexican Agricultural Trade Compliance Act requires the U.S. Trade Representative to retaliate, pursuant to section 301, against imports from Mexico within 60 days of enactment of the Act. However, the U.S. Trade Representative shall not take such action if he certifies, within 30 days after enactment of the Act, that Mexico has eliminated its tax on soft drinks containing high fructose corn syrup and is according the U.S. high fructose corn syrup industry the benefits of all applicable trade agreements.

I fully hope that prior to the return of the U.S. Senate in January, the Mexican Congress will act rationally and bring Mexico into compliance with its international trade obligations regarding high fructose corn syrup. If it does not, I'll work hard to advance the Mexican Agricultural Trade Compliance Act through the Senate. Given the large number of unjustified barriers imposed by Mexico over the past months against imports of U.S. agricultural products, Mexico has not been earning goodwill with Members of the Senate. I expect that my legislation will receive broad support.

I also intend to work with the U.S. Trade Representative to designate Mexican products upon which retaliatory duties will be imposed. The products on this list will consist first and foremost of Mexican agricultural products that are prospering on account of their access to the U.S. market. These Mexican products will likely include bottled tequila, tomatoes, bell peppers, avocados, limes, asparagus, mangos, papayas, watermelons, honey, pecans, and shrimp and prawns. The total amount of duties imposed on these Mexican products will equal the lost sales being experienced by U.S. producers of high fructose corn syrup on account of Mexico's de facto ban of this product, an amount which-- according to U.S. industry--could be as high as $465 million annually.

Let me conclude by stating that I know that some in Mexico are working constructively to try to resolve this issue. Earlier this month President Fox of Mexico sent to the Mexican Congress a formal request to repeal the tax on high fructose corn syrup. I hope that his request becomes law. I appreciated the offer of Mexico's Secretary of Agriculture, Javier Usabiaga, to speak with me regarding the tax, and I regret that our schedules have not permitted us to meet personally. I also note that U.S. and Mexican private sector representatives have been negotiating over access for U.S. high fructose corn syrup to the Mexican market.

Regardless of these efforts, Mexico's de facto ban on imports of U.S. high fructose corn syrup remains in place. Meanwhile, Iowa's corn growers and Iowa's high fructose corn syrup producers continue to suffer on account of Mexico's NAFTA and WTO illegal actions. Again, I strongly hope that Mexican legislators will remove Mexico's tax on soft drinks containing high fructose corn syrup prior to the return of the U.S. Senate next January. But if this tax is not repealed by January, I have every intention of working to advance this legislation through the Senate.

I'm a strong believer in free trade. I fought hard for passage of the NAFTA. I did so because I know free trade benefits farmers in Iowa and other states. U.S. agriculture certainly benefits from the NAFTA, as does Mexican agriculture. But Mexico has engaged in a blatantly illegal act against U.S. agriculture for too long. Mexico's action is having a particularly negative impact on my State of Iowa. If we are to maintain support for free trade in this country, we must ensure that our trading partners live up to their obligations. If they do not, we must take action. I hope the introduction of this bill sends a strong message to my Mexican counterparts that we are ready and willing to stand up for U.S. agriculture. I sincerely hope that they will do the right thing and repeal their illegal tax on high fructose corn syrup.

I hope they repeal their illegal tax to demonstrate their commitment to living up to the letter and spirit of Mexico's promises under NAFTA and the WTO. I hope they repeal their illegal tax to improve relations between the United States and Mexico and to bring the benefits of free trade to consumers and producers in both countries. And, Mr. President, I hope they repeal their illegal tax so the Mexican Agricultural Trade Compliance act is no longer needed. But, if that's what it takes, then that's what we should do.

Mr. President, today we introduce a bill to fight tax fraud. I am not talking about just moving around a few numbers on a tax return. Today we will begin closing the loop holes that have created millions of gallon and billions of dollars of missing fuel and missing tax dollars. This problem not only robs the U.S. Treasury it also robs the American Taxpayer.

We rely on these tax dollars to fund not only the Highway Trust Fund, which is charged with constructing and maintaining our national transportation system, this also robs money from our Airport Trust Fund.

In light of investigations completed since September 11th, the safety and soundness of maintaining our nation's transportation infrastructure is now more than ever of the utmost importance. These issues are not just tax fraud--not only are we concerned with the tax loss, but where else is this money going--is it being used to fund terrorism? We need to know where all of this fuel is going. What makes us think that if we cannot find the fuel to collect the tax, that we could find the fuel to stop the terrorists acts. A missing barge could hold ninety tanker truck loads of fuel, that's about $500,000 in Federal and State excise taxes left uncollected, its also hundreds of thousands of gallons that we cannot account. That cannot happen, and this bill should help our enforcement officers close the loop holes and collect the tax that builds our highways.

Mr. President, I was told we should report the bill first, and then I will make my statement.

Mr. President, I would like to state the plan for today. Under the previous order, the cloture vote will occur today at 12:30. The debate time until that vote is limited, and Members will only be allocated short debate times. The cloture vote on the conference report will be the first vote of the day. It is the leader's hope and expectation that cloture will be successful. Once cloture is invoked, the leader hopes we will be able to proceed to a vote on the passage of the Medicare prescription drug bill in very short order after that.

On our side, we are obviously going to start with the Senator from New Hampshire. But since the time is very tight, probably most Members would be limited to 5 minutes or less, beyond that of Senator Gregg. I would like to make sure people are very orderly as they come over here and ask me for time. I cannot speak for the Democratic side, but for the Republican side, it is very essential for people to be here and be ready to speak.

Does the Democratic whip wish to be recognized?

Mr. President, could I make an inquiry?

That is the point I wanted to make.

Mr. President, I yield 15 minutes to the Senator from New Hampshire.

Mr. President, I yield 5 minutes to the Senator from Wyoming. I urge people who are proponents of this bill and want me to yield them time to be here. When there is not anybody here, I will use some of that time, but I am very glad to quit and put my statements in the Record to accommodate my colleagues. It is just a case of if we don't want to waste any of this valuable time, get over here.

Mr. President, I yield the Senator 3 more minutes.

Mr. President, it is my privilege to give 5 minutes to the Senator from Montana, Mr. Baucus, whose cooperation with me and, hopefully, my cooperation with him has made this bipartisan agreement on Medicare possible to bring about what we need to do for seniors.

Mr. President, let me inquire of the Democrats. Could we have a Democrat speak?

Thank you very much.

I yield myself 30 seconds, before I yield to the Senator from Maine 7 minutes, for just a little bit of history and to applaud the Senator from Maine.

She was active in this issue of Medicare prescription drugs a long time before I was. But on July 25, 2001, we held our first meeting of what was called the tripartisan group. She was obviously part of that tripartisan group along with Senators Hatch, Jeffords, Breaux, and Grassley.

I remember that meeting we had. The AARP sent us a birthday cake with a pie-shaped piece cut out of it. Their admonition to the tripartisan group was: Fill in the missing piece. The missing piece of Medicare was prescription drugs.

The Senator from Maine has been very aggressive since July 25 in various ways, helping us fill in that piece of the pie. On August 1 of that year, we held a news conference, all five of us, announcing our plans for doing that. We have not exactly come out where we were a year ago. We probably have come out a lot better with the legislation we have before us. But regardless, the Senator from Maine was in on the ground floor, a long time before I was, on that issue.

I yield to the Senator from Maine 7 minutes.

I yield 5 minutes to the Senator from Arkansas. If there is no one on the other side to speak, I can give the Senator a little bit more.

I yield the Senator 1 additional minute.

Mr. President, I yield 6 minutes to Senator Breaux.

Mr. President, I should not take more than 5 minutes, so please tell me when 5 minutes are up.

This is the opportunity, a time of destiny, whether or not this Congress will deliver on the promises of the last three elections, the promises the other party has made as well. Thank God there are people in the Democratic Party who are working in a bipartisan way to deliver on the promises of that party as there are Republicans willing to deliver on the promises of the Republican Party.

Nothing gets done in this body without bipartisanship. This is bipartisan. We are putting aside partisanship. It is time the other side put aside rhetoric and complete our work on this bill for which the AARP says seniors have waited far too long.

This bill offers an affordable, universal prescription drug benefit. This bipartisan bill offers better coverage than today's Medigap policies plus Medicare. It also offers much more generous coverage for 14 million lower income seniors. And just to emphasize this point, this bill does not harm 6 million seniors, as the opponents of this legislation claim. That is political poppycock.

In fact, this bill protects the benefits for these 6 million and then adds generous prescription drug coverage for an additional 8 million. It expands coverage for lower income seniors, far more than anything offered today. This means that for about two in five seniors, this bill offers drug coverage with lower or no premiums, no coverage gap, and coverage of 85 to 95 percent of the cost of prescription drugs. And it is voluntary.

The opponents of this legislation happen to believe--and they sincerely believe--that Government should always force people into doing something. We want the right to choose for our seniors. Seniors can stay in traditional Medicare if they like what they have today and have full access to prescription drugs. There is also a guaranteed Government fallback if private plans might not go to all rural areas of America. This bill protects retiree benefits in the corporation from which they retired. Overall, we put $89 billion in this bill to protect retiree health coverage.

This bill also creates new choices similar to what Federal employees have for beneficiaries in a new revitalized Medicare Advantage Program. With respect to drug costs, the bill speeds the delivery of new generic drugs to the marketplace, lowering drug costs to Americans and not just those on Medicare.

Finally, the bill includes long overdue improvements in Medicare's complex regulations. It also revitalizes the rural health care safety net with the biggest package of rural payment improvements that Congress has ever done or seen. I urge my colleagues to put the interests of our seniors first and give them more choices and better benefits by supporting this bill.

Most importantly, we have brought this bill as far as we have over the last 4 or 5 years because of bipartisanship. I hope this body will not let the narrow partisanship of a few on the other side of the aisle destroy our efforts.

I yield the floor.

Mr. President, first of all, I should find out how much time we have left.

I yield myself such time as I might consume.

This may sound like a simple vote, to raise a point of order about a budget and how this fits into the budget. But what this vote is all about is whether or not we are going to have any bill whatsoever providing prescription drugs for seniors. That is what this next vote is all about because I believe if we get 60 votes like we did 70 votes on the cloture motion, we will be on our way to passage, in a bipartisan way--everything has been bipartisan on this bill, as far as I am concerned--in a bipartisan way, passage of this bill, so our seniors can have prescription drugs, so that the biggest hole that has ever existed in Medicare for the last 38 years is filled in.

So all the arguments can be made about this little budget deal or that little budget technicality, but this is a vote about keeping the promises of both political parties over the last three elections. I do not think we ought to pooh-pooh keeping the promises of the last election. People are cynical about political leaders anyway-- overpromising, not delivering on promises. This is our opportunity. This is one of the last two votes for this bill to go to the President of the United States.

So this vote is about our seniors, and also we can include Americans with disabilities. So a successful vote against overriding this point of order will gut the immediate funding we provide for prescription drug discount cards.

Much has been said by the opponents of this bill about not providing help to seniors fast enough. How many times, in the last 3 days, 4 days of debate on this bill have you heard the point: ``Well, this bill is not going to take effect for 2 years. I don't know why it can't take effect sooner''?

Now, that is not our choice. We pass a bill. You have to give some time for bureaucrats to implement it and write the regulations, and you want to do it right. So that is what they say: They need that amount of time, No. 1. No. 2, this bill takes effect immediately for part of it, and that part is the drug discount card for seniors and the disabled so they can get 15 to 25 percent discounts on drugs right away.

So apparently a discount card available to all seniors in less than 5 months, and also with a direct $600 subsidy to those with the lowest incomes, is something that opponents of this bill--crying in their beer all the time about this not doing enough for seniors or not taking effect soon enough--is a reason to block this bill.

They are talking out of both sides of their mouth when they say that. On the one hand, they say it is not going into effect soon enough, and then with the next vote we are going to have up, they are going to guarantee no drug benefit for years, and just with some little budget technicality on a procedure vote.

That is pretty ironic, that they would take that stand over the course of 4 days--argue that this bill is not going into effect soon enough, ignoring the discount card that starts immediately, and saying we are not doing enough--and then they are willing to block it on a technicality.

It seems to me that anybody who says we are not providing drug benefits quickly enough for our seniors and our disabled would vote to override this point of order so we can get to the next vote, final passage of this legislation.

Also, I just heard some of my colleagues from the other side of the aisle say this bill, in some instances, does not do enough for rural health care delivery. We provide $25 billion in this bill for rural providers to deal with the inequitable situation of the 30 States below the national average. That is because the formulas for doctors and hospitals in rural areas treat them less well, less equitably than the formulas for urban areas, because the assumption is in rural areas you can deliver health care for less costs.

But they are crying in their beer about maybe that is not doing well enough. And if they vote as 1 of the 41 who might keep us from overriding that point of order, then how can they talk out of both sides of their mouth--one time saying, ``We are not doing enough,'' and then, on the other hand, ``Kill this bill on this budget technicality''? Because just as soon as this bill passes, rural providers are going to get a great deal of help from this legislation.

Now, that help is not just for our providers because we feel sorry for doctors or hospitals. We are not being able to recruit doctors and maintain our hospitals in rural America. This $25 billion in this bill will strengthen our hospitals. It will give us an opportunity to recruit doctors.

So if you are 1 of the 41 who does not help us override this point of order, you are saying no to the recruitment of doctors in rural America. You are saying it is OK to close rural hospitals. Because you know what is going to happen right away if we do not pass this legislation--all the doctors of America are going to take a 4.5-percent cut in their reimbursement because of the way our formulas work. I do not

know how formulas such as that were written, but those formulas have an egregious impact upon the doctors.

I strongly disagree that that ought to happen and that we ought to have situations where medical doctors are fed up with working with Medicare patients and they just get out of the program. Then our seniors have fewer doctors to take care of their needs.

But if this bill passes, it is going to give relief to our doctors, not only stopping that 4.5-percent cut, it will give them a 1.5-percent increase in reimbursement.

It seems to me a vote against overriding the point of order is a vote against our rural hospitals every day because every day our hospitals are doing more with less. They serve our elderly. They serve the uninsured, those who live in some of the remotest parts of our country, and those who live in our cities as well because city hospitals have problems, too.

Are we going to tell those hospitals what they do every day in saving lives and improving patients' quality of life is not somehow important? I certainly hope not. But a vote against overriding this point of order is a thumb in the eyes of health care providers, in the eyes of the people who run our hospitals, the nurses who work there.

So this is going to be a vote against some of our neediest seniors. And the neediest of our seniors are those in nursing facilities who need physical therapy. They need occupational therapy, speech therapy. This bill, out of this $25 billion, provides a 2-year moratorium from the therapy cap that is in law today, which, basically, at $1,500 is saying, if you have a stroke, if you have some sort of major operation, you are only going to get physical therapy up to $1,500; and too bad after that.

Well, we take care of that in this legislation. But the people who vote against overriding this point of order are saying no to those neediest of seniors in the nursing homes who will be hit by this $1,500 cap and will not be able to get the physical therapy services they need.

We are at a point where all this effort about rural hospitals has been supported by an overwhelming majority in both the House and the Senate.

We heard our colleague, Senator Bennett of Utah, speak passionately about his daughter. His daughter is a speech therapist and knows all too well how nursing home residents benefit from therapies after they have suffered a stroke, heart attack, or maybe just a fall. Are we going to say to Senator Bennett's daughter that we don't need to delay these caps? Are we going to say to our seniors that access to physical therapy doesn't matter? I certainly hope not.

You will hear a lot about this vote being a comment on how we spend money in this Medicare bill. You will hear how this vote might be a vote against special interests in America. I ask my colleagues what they mean because if their seniors need immediate relief from high prescription drug bills, their hometown doctors need some help, their local hospitals need some help, their seniors recovering from stroke and heart attack need some help because they need more therapy, then I guess they should vote against these people.

That isn't what I hear from the other side of the aisle. They are the great humanitarians of the American political environment. They are concerned about all these people. Well, this next vote will show how concerned they are because they are voting against all these people who have need, most often the seniors of America who need prescription drugs.

I do not intend to vote against them and, in the process, hopefully get this bill to final passage.

I reserve the remainder of my time and yield the floor.

I yield whatever time he might consume, up to 5 minutes, to the Senator from Oklahoma.

I want to take 30 seconds and then yield 5 minutes to the Senator from Louisiana and then the Senator from Montana.

Before I do that, how many times have we heard from the other side of the aisle about this being a 1,000-page bill? I want them to read, if they know how to read: There are 678 pages here. I want to know how you folks can raise a point of order when you can't even count the number of pages in a bill? I yield the floor.

Mr. President, I yield myself such time as I might consume, and probably all of it.

Keeping the point of order means keeping the status quo. So I am asking my friends on the other side of the aisle, what is there about the status quo on Medicare that is good and acceptable? The lack of prescription drugs? The slowness in getting cheaper generic drugs out into the market? Arbitrary caps on physical therapists? Insufficient funding for rural hospitals and long waiting lines for seeing the doctors, if Medicare people can get in to see a doctor in rural America?

I ask my colleagues, is this status quo acceptable? Apparently it is, at least to the Senators who are refusing to waive the point of order.

I say nothing about Medicare's status quo is acceptable, not doctors' cuts, not decreasing hospital and home health payments, not the lack of access to health plans in rural areas such as

mine. And most of all, seniors' lack of access to prescription drugs for all these years is what I find to be most unacceptable about the reality of the status quo.

For those of you happy with the status quo, I say, try telling that to your doctors, your hospitals, and, most of all, to your seniors. You try telling these people that a technical point of order is more important than changing Medicare's status quo. I will not try, and I hope my colleagues will not try either.

Mr. President, I ask for the yeas and nays.

Mr. President, there is an issue that my colleague from Iowa brought up that I don't want to take exception to or argue with him about. He finds fault with something on page 53 of this bill called noninterference. That is perfectly legitimate for him to take that point of view. But I want to point out something that Senator Santorum had pointed out earlier in the day's debate, in which a very similar noninterference provision was in a Democrat prescription drug proposal introduced May 10, 2000.

I don't mind intellectual arguments against this, but when Republicans take a Democrat idea and put it in our bill, I don't think it is fair for colleagues on the other side of the aisle to find fault with what we are doing. I only want to make that point. I don't want to argue with my friend from Iowa. I think everybody ought to know that this is something that has had broad bipartisan support.

I yield the floor.

I thank the Senator.

I thank my friend from Montana for that explanation. And as he and the Senators from Washington and North Dakota know, we have a demonstration program in this bill that covers, until the Part D drug benefit starts in 2006, self-injectable and oral anti-cancer drugs. This demonstration program is in the statutory language. That is good news. However, the report language is clearly in error and refers to an entirely different provision, not the one we negotiated.

Yes.

That is correct.

Yes, that is right.

I thank the Senator from Montana and my Democratic partner in this legislation, Senator Baucus, for seeking to clarify this issue. I would be pleased to engage in a colloquy.

Yes, the distinguished Senator is correct. The intent of the conference report is to recognize that different Medicare Advantage plans are organized in different ways to deliver the new Part D prescription drug benefit and the benefits of the Medicare-endorsed drug discount card.

The conferees understand that Medicare members of some Medicare Advantage plans fill their prescription in retail pharmacies and others in a plans' own pharmacies. For Medicare beneficiaries that will be using retail pharmacies to fill their prescriptions, the conferees understand that the prices negotiated between the prescription drug plan or the Medicare Advantage plan plus dispensing-related costs include the pharmacies' reasonable overhead costs.

Similarly, it is the conferees' intention that Medicare Advantage plans whose Medicare members do not use retail pharmacies, but instead fill their prescriptions at the plan's pharmacies be reimbursed for the costs they incur in delivering the benefit when reimbursed for the same types of costs.

section 507

Yes, I believe you are correct in saying that the Secretary would have discretion to consider these factors, but would not be limited to or bound by those factors. The language states that the Secretary ``shall consider,'' which implies that the Secretary shall consider these factors but that he or she should use the factors to make a reasonable decision as to whether a speciality hospital was ``under development'' as of a certain date.

Yes, it is my understanding that the Secretary would have discretion to determine to what extent the hospital was under development as of November 18, 2003. If the Secretary found that the hospital was ``under development'' despite not having completed all architectural plans, the Secretary could exempt that speciality hospital from the 18-month self-referral limitation.

The Secretary would have discretion to exempt a hospital that had completed architectural plans and initiated funding and, in making this determination, would consider the extent to which the other enumerated factors had been completed. It is my understanding that the language included in H.R. 1 is meant to provide guidance to the Secretary, and that the Secretary will ultimately determine to what extent the factors have been met and to what extent the hospital was ``under development'' as of November 18, 2003.

Mr. President, I say to my colleague from Wyoming that Medicare drug plans and MedicareAdvantage organizations should not force seniors or the disabled to choose a mail-order house when they would prefer to patronize their local community pharmacy.

The Senator from Wyoming is correct in noting that the conference report permits plans to set a different charge to the beneficiary for a mail-order prescription versus a retail prescription. However, it is my expectation that any differential in charge be reasonable and based on the actual cost of providing the service in or through the setting in which it is provided. I also would expect that the Secretary of Health and Human Services would disapprove of any plan that would impose a differential charge that was intended primarily to steer Medicare beneficiaries to mail-order pharmacies versus retail pharmacies.

Mr. President, I rise today to co-sponsor legislation, the ``Tax Shelter Transparency and Enforcement Act"to address the continuing proliferation of tax shelters. This bill reflects tax shelter measures that have been passed by the Senate Finance Committee in the Jobs and Growth Tax Relief Act of 2003, the CARE Act, the JOBS Act, and the Energy bill. The full Senate has passed these shelters provisions twice this year.

We have known for many years that abusive tax shelters, which are structured to exploit unintended consequences of our complicated Federal income tax system, erode the federal tax base and the public's confidence in the tax system. Such transactions are patently unfair to the vast majority of taxpayers who do their best to comply with the letter and spirit of the tax law. The Finance Committee produced its first draft of tax shelter legislation in 1999, and has produced several subsequent bills, each of which were enhanced to attack new developments in abusive tax shelters. The most recent Finance Committee bill was the Tax Shelter Transparency Act in May 2002. Today's bill builds on that 2002 legislation by adding certain corporate governance provisions, the recommendations from the Finance Committee's tax shelter investigation of Enron, and a proposal to clarify the judicial economic substance doctrine.

The Finance Committee has worked exceedingly hard over many several years to develop a legislative response to tax shelters, and the bill we offer today may not be the final word in that response. Thoughtful and well-considered comments on the provisions in this bill have been greatly appreciated by the staff and members of the Finance Committee, and will be considered in further refining today's bill, particularly with respect to clarification of the economic substance doctrine.

In our ongoing efforts to end tax shelters, we have attacked the issue on several fronts. We have introduced numerous measures to end specific shelter abuses as they are discovered. We have offered legislation attacking corporate inversions, individual expatiations, and corporate deductions for phony leases of tax-payer funded subways, bridges, and water lines. I have pursued public disclosure of the differences in the income on financial statements reported by public companies to their shareholders, and the income the company reports to the IRS on its tax return. I have written to the President, Treasury and SEC to encourage them to consider this idea.

During the Senate's 2002 deliberation of the Sarbanes-Oxley bill, I attempted to add an amendment that would have prohibited auditors from opining on the financial statement results of tax shelters that they had sold to an audit client. I was blocked in my attempt to offer that amendment, with several members expressing skepticism about the need for such a measure. I suspect that today, however, few members would have such reservations.

On October 21st, 2003, the Senate Finance Committee conducted a hearing to determine if tax shelters were a continuing problem. Not only are they continuing, they are now expanding to mid-level companies and wealthy individuals, many of whom have been duped into engaging in shelter transactions. During our hearing, we heard testimony from taxpayers who relied on reputable tax professionals and accounting firms for sound tax advice, but unknowingly purchased tax shelters that were peddled by those trusted professionals through a web of collusion and deception. We also heard from employees of large accounting firms and major corporations who testified regarding the pressure exerted on them to bless transactions that, in their professional opinions, would constitute abusive tax shelters. The price for their integrity was the loss of their jobs and the ruin of their career. Tax shelter abuse must be stopped for the sake of fairness, the integrity of our tax system, and the protection of honest tax professionals.

Our years of work on this issue was recently reaffirmed in a hearing before the Permanent Subcommittee on Investigations, which explored abusive shelters that were promoted by purportedly reputable tax lawyers and accounting firms. Following that hearing, there has been considerable discussion of promoting an amendment similar to the one I offered in 2002 during the Sarbanes-Oxley debate, and I am appreciative of that effort. I hope we are able to construct a measure that can be readily enforced by the Public Accounting Oversight Board and the SEC, even though that agency lacks expertise in, or jurisdiction over, federal tax matters.

At its core, however, the problem is not an SEC matter, but is a problem of ongoing abuse of the tax code by very smart people doing some very ugly business. The only way to end this problem is to put it out in the open. Even the most cynical tax advisor does not want their dirty laundry in the public eye, particularly if that public includes the IRS. That is why disclosure of abusive or potentially abusive transactions is so important in solving this problem.

The Tax Shelter Transparency and Enforcement Act requires taxpayer disclosure of potentially abusive tax avoidance transactions. It is surprising and unfortunate that taxpayers, though required to disclose tax shelter transactions under present law, have refused to comply. The Tax Shelter Transparency and Enforcement Act will curb non-compliance by providing clearer and more objective rules for the reporting of potential tax shelters and by providing strong penalties for anyone who refuses to comply with the revised disclosure requirements.

The legislation has been carefully structured to reward those who are forthcoming with disclosure. I wholeheartedly agree with the remarks offered by a former Treasury Assistant Secretary for Tax Policy, that ``if a taxpayer is comfortable entering into a transaction, a promoter is comfortable selling it, and an advisor is comfortable blessing it, they all should be comfortable disclosing it to the IRS.'' Transparency is essential to an evaluation by the IRS and ultimately by the Congress of the United States as to whether the tax benefits generated by complex business transactions are appropriate interpretations of existing tax law.

It is time to get this bill done. The Finance Committee has worked on rooting out tax shelters for nearly five years, and we have debated the issue long enough. The time to act is now. I will vigorously pursue enactment of an anti-tax shelters bill in the upcoming year. I think we can all take pride in the Senate's consistent action of passing the measures in today's bill. We must press forward to put a final end to the seemingly endless abuse of tax shelters.

Mr. President, I rise today to co-sponsor legislation, the ``Tax Shelter Transparency and Enforcement Act"to address the continuing proliferation of tax shelters. This bill reflects tax shelter measures that have been passed by the Senate Finance Committee in the Jobs and Growth Tax Relief Act of 2003, the CARE Act, the JOBS Act, and the Energy bill. The full Senate has passed these shelters provisions twice this year.

We have known for many years that abusive tax shelters, which are structured to exploit unintended consequences of our complicated Federal income tax system, erode the federal tax base and the public's confidence in the tax system. Such transactions are patently unfair to the vast majority of taxpayers who do their best to comply with the letter and spirit of the tax law. The Finance Committee produced its first draft of tax shelter legislation in 1999, and has produced several subsequent bills, each of which were enhanced to attack new developments in abusive tax shelters. The most recent Finance Committee bill was the Tax Shelter Transparency Act in May 2002. Today's bill builds on that 2002 legislation by adding certain corporate governance provisions, the recommendations from the Finance Committee's tax shelter investigation of Enron, and a proposal to clarify the judicial economic substance doctrine.

The Finance Committee has worked exceedingly hard over many several years to develop a legislative response to tax shelters, and the bill we offer today may not be the final word in that response. Thoughtful and well-considered comments on the provisions in this bill have been greatly appreciated by the staff and members of the Finance Committee, and will be considered in further refining today's bill, particularly with respect to clarification of the economic substance doctrine.

In our ongoing efforts to end tax shelters, we have attacked the issue on several fronts. We have introduced numerous measures to end specific shelter abuses as they are discovered. We have offered legislation attacking corporate inversions, individual expatiations, and corporate deductions for phony leases of tax-payer funded subways, bridges, and water lines. I have pursued public disclosure of the differences in the income on financial statements reported by public companies to their shareholders, and the income the company reports to the IRS on its tax return. I have written to the President, Treasury and SEC to encourage them to consider this idea.

During the Senate's 2002 deliberation of the Sarbanes-Oxley bill, I attempted to add an amendment that would have prohibited auditors from opining on the financial statement results of tax shelters that they had sold to an audit client. I was blocked in my attempt to offer that amendment, with several members expressing skepticism about the need for such a measure. I suspect that today, however, few members would have such reservations.

On October 21st, 2003, the Senate Finance Committee conducted a hearing to determine if tax shelters were a continuing problem. Not only are they continuing, they are now expanding to mid-level companies and wealthy individuals, many of whom have been duped into engaging in shelter transactions. During our hearing, we heard testimony from taxpayers who relied on reputable tax professionals and accounting firms for sound tax advice, but unknowingly purchased tax shelters that were peddled by those trusted professionals through a web of collusion and deception. We also heard from employees of large accounting firms and major corporations who testified regarding the pressure exerted on them to bless transactions that, in their professional opinions, would constitute abusive tax shelters. The price for their integrity was the loss of their jobs and the ruin of their career. Tax shelter abuse must be stopped for the sake of fairness, the integrity of our tax system, and the protection of honest tax professionals.

Our years of work on this issue was recently reaffirmed in a hearing before the Permanent Subcommittee on Investigations, which explored abusive shelters that were promoted by purportedly reputable tax lawyers and accounting firms. Following that hearing, there has been considerable discussion of promoting an amendment similar to the one I offered in 2002 during the Sarbanes-Oxley debate, and I am appreciative of that effort. I hope we are able to construct a measure that can be readily enforced by the Public Accounting Oversight Board and the SEC, even though that agency lacks expertise in, or jurisdiction over, federal tax matters.

At its core, however, the problem is not an SEC matter, but is a problem of ongoing abuse of the tax code by very smart people doing some very ugly business. The only way to end this problem is to put it out in the open. Even the most cynical tax advisor does not want their dirty laundry in the public eye, particularly if that public includes the IRS. That is why disclosure of abusive or potentially abusive transactions is so important in solving this problem.

The Tax Shelter Transparency and Enforcement Act requires taxpayer disclosure of potentially abusive tax avoidance transactions. It is surprising and unfortunate that taxpayers, though required to disclose tax shelter transactions under present law, have refused to comply. The Tax Shelter Transparency and Enforcement Act will curb non-compliance by providing clearer and more objective rules for the reporting of potential tax shelters and by providing strong penalties for anyone who refuses to comply with the revised disclosure requirements.

The legislation has been carefully structured to reward those who are forthcoming with disclosure. I wholeheartedly agree with the remarks offered by a former Treasury Assistant Secretary for Tax Policy, that ``if a taxpayer is comfortable entering into a transaction, a promoter is comfortable selling it, and an advisor is comfortable blessing it, they all should be comfortable disclosing it to the IRS.'' Transparency is essential to an evaluation by the IRS and ultimately by the Congress of the United States as to whether the tax benefits generated by complex business transactions are appropriate interpretations of existing tax law.

It is time to get this bill done. The Finance Committee has worked on rooting out tax shelters for nearly five years, and we have debated the issue long enough. The time to act is now. I will vigorously pursue enactment of an anti-tax shelters bill in the upcoming year. I think we can all take pride in the Senate's consistent action of passing the measures in today's bill. We must press forward to put a final end to the seemingly endless abuse of tax shelters.

Mr. President, I would like to make a unanimous consent request for Senator Baucus. He asked consent that John Colleran, Jill Davidsaver, Mandon Lovett, Justin Bonsey, Brittany Dalton, and Diana Birkett be granted the privilege of the floor for the duration of the floor debate on Medicare.

How much time remains?

Mr. President, we have heard in the Senate today and last night that the comparative cost adjustment demonstration project, which some of the Members refer to as premium support, would end Medicare as we know it. I want to be very clear, nothing could be further from the truth. I have 10 facts about this demonstration to explain why this is not the case. We are talking about the comparative cost adjustment.

Fact No. 1: It sunsets in 6 years. The demonstration will only be in existence for 6 years. It will not begin until the year 2010. During that time, there will be a 4-year phase-in period. Explicit authorization from Congress at the end of 6 years is necessary to extend the demonstration and/or expand it to other areas of the country. This proposal is significantly modified from the House of Representatives' original position. Congress weighs in before this becomes something other than a demonstration project and becomes policy for the entire country.

Fact No. 2: Very limited areas of the country will be affected in the demonstration. Under the agreement, the Health and Human Services Secretary may select no more than six metropolitan statistical areas to participate in the demonstration. It is not easy to be put in that list of six because in order to be selected, a metropolitan statistical area must have at least two local coordinated care plans offering services in the area and at least 25 percent of the Medicare beneficiaries must be enrolled in these plans. That means the private PPOs we are setting up beginning in 2006 must succeed. I hope they succeed. But we do not know if they will succeed, and if they do not succeed, at least to the tune of 25 percent in two local areas, there will not be one. If that does happen, according to the Congressional Budget Office, somewhere between 670,000 and 1 million beneficiaries will be included in this limited demonstration. It is a demonstration. It is not something that could ever, without an act of Congress, encompass all 40 million seniors.

Fact No. 3: Low-income beneficiaries are not affected at all. So if they are low-income, below 150 percent of poverty, none of them will see their Part B premiums increase.

Fact No. 4: Premium increases for beneficiaries above 150 percent of poverty will be limited to 5 percent. For everyone else, if premiums go up, there is a cap of 5 percent. As an example, if the national Part B premium was, say, $100 in 2010, the fee-for-service premiums in the demonstration areas could not exceed $105 a month. The increase, by the way, is not compounded over that 6-year period of time.

Fact No. 5: Other than the limited impact on the Part B premium calculation, the fee-for-service program is unchanged choice. Fee-for- service benefits, beneficiary cost sharings, payments to hospitals, and other health care providers are unaffected by the demonstration. The Medicare entitlement to benefits and payments to health care providers are unchanged in these same areas.

Fact No. 6: Beneficiaries are not required to enroll in these private plans. The right for a Medicare beneficiary to remain in fee-for- service programs is maintained in the demonstration areas. The fee-for- service program will remain affordable for all beneficiaries.

Fact No. 7: The prescription drug benefit is unaffected. The prescription drug benefit and the drug premiums are not changed. The demonstration only minimally affects the Part B premium, and that is the maximum of 5 percent increase.

Fact No. 8: Over the demonstration period, enhanced payments to private plans are phased out to ensure that their payments to private plans are on a level playing field with the fee-for-service program.

Fact No. 9: The preferred provider organization stabilization fund, referred to on the other side by my colleague as a ``slush fund,'' has no relationship to this demonstration. So one cannot talk about the demonstration and talk about a stabilization fund in the same breath. If you do that, you do not know what the bill does; you have not read the bill.

Under the conference agreement, the stabilization fund may only be used to provide assistance to the newly regional PPO options. However, any enrollment in regional PPOs is not counted toward the 25 percent enrollment requirement in the metropolitan statistical areas. The extent to which beneficiaries enroll in the new regional PPO opposite will have no bearing on whether a metropolitan statistical area becomes a candidate for demonstration.

Last fact, No. 10: Strict quality monitoring is required. The Health and Human Services Secretary is required to closely monitor access to care and quality and submit a report to Congress upon completion of the demonstration to determine if the demonstration has reduced Medicare spending and/or increased cost to beneficiaries; second, access to physicians and other health care providers has declined; and lastly, whether beneficiaries remain satisfied with the program. The evaluation would be on the basis of any congressional decision to extend that demonstration.

Premium support, as has been described in the Senate numerous times in the last few days by the Senator from Massachusetts and by other Senators, is not in this bill. It is not included. This bill strengthens and improves fee-for-service Medicare.

How much time remains?

It would be good at the start of the third day of debate on

this bill to remind people of the political situation that has gotten us where we are today. That is a very positive political situation.

Last year, we were beginning to develop a bill in the Senate Finance Committee that would have had bipartisan support to get it out of the committee. Bipartisan support in the committee is a way to have a chance of success in the Senate where there can always be an extraordinary minority who can keep a bill from being passed because we protect minority interests in this body as no place else in our political system. So we must be bipartisan.

About the time that was going to happen, the majority leader--the Senator from South Dakota, last year--decided we needed to talk about this in the Senate. But the bill never came out of committee. It was brought right to the floor. When bills are brought to the floor, there is no chance of developing bipartisanship. We discussed it for 2 or 3 weeks and no one could get the bipartisan majority it takes to get pieces of legislation passed.

At that time, I surmised, and I think the outcome of the debate last year proves it, that the other side wanted more of an issue for the election rather than a product. They gambled and they lost because Republicans gained control of the Senate in that election and then we were right back to square 1 where we went to the Senate Finance Committee where there could be, even with a Republican majority, still a bipartisan working relationship that was able to report out a bill on 16-to-5 bipartisan vote. Then we brought that bill to the floor during the month of June. And it got through here 76 to 21.

We are as successful as we are because the people made a change in the Senate.

In the Senate, then, we adopted a bipartisan bill, and we were able to get through, for the first time on this issue in the history of the Senate, prescription drugs for seniors. We were able to match the House, where it had passed three times previously. We went to conference. We operated in the conference, at least from the Senate point of view, on a bipartisan basis, and we were able to produce a product where here we are doing the best improvement and the most sweeping improvement in Medicare in 38 years. We are able to do that because of bipartisanship.

Now, all of a sudden, people on the other side of the aisle, at this last minute, are filibustering. I hope they do not get away with that filibuster. But, again, they are trying to be very partisan, as they were a year ago. I hope they learned a lesson from a year ago and will not try to be partisan on this very important social issue for the seniors and the disabled of America, and that they will not repeat the mistakes of last year when they wanted an issue instead of a product.

We have a bipartisan product. I listed last night, in my closing remarks, all of the organizations that are supporting this bill. Other Senators have put charts up saying how many organizations are supporting this bill.

We have this opportunity. Let's hope partisanship--that is demonstrated by the filibuster that was announced yesterday--does not keep this bill from passing. Democrats who want to filibuster ought to consider that is not the way to go. They should learn from the lesson of the past. That lesson is that last year when they wanted an issue instead of a product, they got a defeat at the polls.

I yield the floor.

Mr. President, I certainly think the cooperation we have had from the chairman of the Budget Committee, Senator Nickles, helped to move this bill along. Even though he has not liked some parts of the bill, he has been cooperative all the way through the process and, more importantly, through the crucial time of conference.

There is a claim that pharmacies are concerned about beneficiary access to pharmacies, pricing transparency issues, and insurance risk.

I understand the concerns of pharmacists with regard to local access. This bill provides several provisions to ensure that Medicare beneficiaries are provided with adequate choice and easy accessibility to local pharmacies.

First, the conference report provides choice to beneficiaries by containing an ``any willing provider'' provision. This provision requires prescription drug plans to accept any and all pharmacies willing to agree to the terms and conditions of the plan. By adding this provision, we have given all pharmacies, big and small, the chance to participate in the modernization of Medicare.

Second, the conference report provides beneficiaries with convenient access to pharmacies by adopting the TRICARE standard for prescription drug plans. In urban areas, 90 percent of beneficiaries would have a pharmacy within two miles of their residence; 90 percent of beneficiaries in suburban areas would have access to a pharmacy within five miles of their home; In rural areas, plans would be required to provide 70 percent of beneficiaries with a pharmacy 15 miles within their residence.

By adopting this standard, beneficiaries are ensured adequate convenient access to pharmacies of their choice.

The conference report also requires that plans permit beneficiaries the ability to fill their prescriptions at a community pharmacy rather than through the mail. Again, ensuring access to local pharmacies.

In addition to providing convenient, local access to pharmacies, the conference report provides safeguards to ensure fair drug pricing and protects pharmacies from insurance risk.

Under the report, pharmacy benefit manager's, PBMs, would be required to disclose all discounts, rebates, and charge backs given to them by drug manufacturers. This places local pharmacies on a fair playing field with PBMs.

The report also prevents insurance risk to pharmacies by clarifying that pharmacies could not accept insurance risk.

This conference report adequately addresses the concerns of pharmacies and pharmacists alike. It makes sure that beneficiaries have local and convenient access to pharmacies, provides transparency pricing, and protects pharmacies from insurance risk.

Revisions to H. Con. Res. 95

Mr. President, the opponents of this bipartisan Medicare bill have made the claim that 6 million seniors are hurt by this bill. The other side has also claimed that 25 percent of seniors will be forced to pay more for their prescription drugs under this bill.

I want to be very clear that this is not accurate at all. I'm here to tell the American public the truth.

The truth is that 14 million lower income seniors and disabled Americans are benefited greatly by this bipartisan bill. These 14 million people will get very generous prescription drug coverage through Medicare in this bill.

First, as you can see on this chart, 7.8 million seniors and disabled Americans get full coverage with no deductible, no gap in coverage, and would pay only $2 for generic drugs and only $5 for brand name drugs. And if these seniors reach the catastrophic coverage limit, then they will get their prescriptions fully covered with no copays. That's right, no copays at all.

Next, as you can see on the chart, an additional 4.4 million lower income seniors will get even more generous coverage. These Seniors will pay only $1 for generic drugs and only $3 for brand name drugs. And if these seniors reach the catastrophic coverage limit, then they too will get their prescriptions fully covered with no copays.

In addition, some of these people are enrolled in both Medicare and Medicaid and are living in a nursing home--about 1.3 million of them. This bipartisan bill creates a special benefit for these people. For them, Medicare will cover 100 percent of the prescription costs. They pay nothing.

These groups of seniors in total represent 12.2 million seniors and disabled Americans.

The bill also provides coverage to about 2 million more lower income seniors and disabled Americans. These seniors have 85 percent of their drug costs covered after meeting a $50 deductible, and if they hit the catastrophic coverage limit, they would pay only $2 for generic drugs and $5 for brand-name drugs.

This is full coverage with no coverage gap and 85-98 percent of drug costs covered for about 14 million seniors and disabled Americans. That is about 36 percent of all Medicare beneficiaries.

That is what this bill does. It provides very generous prescription drug coverage through the Medicare program for about 14 million lower income seniors and disabled Americans. And it provides this full coverage to 8 million lower income seniors who have no coverage at all today.

On top of that, of course, this bill provides all beneficiaries with access to basic prescription drug coverage with protections against catastrophic drug costs. The average beneficiary who does not quality for the low income benefits I have just described will still have about half of their drug costs covered under this bill.

Finally, no one is forced into this drug benefit. It is a purely voluntary benefit. No one is forced to enroll and any senior or disabled American that does not see the drug coverage offered as a good deal for them does not have to enroll.

So this bipartisan bill before us does not harm seniors. That is an absurd charge to make by the opponents of this bill.

This bill provides an affordable, voluntary and universal drug benefit for all seniors and disabled Americans in this country. And it provides very generous coverage to those 14 million lower income beneficiaries.

It is time to put the partisan rhetoric aside and approve this bipartisan bill that the AARP calls ``an historic breakthrough and [an] important milestone in the nation's commitment to strengthen and expand health security for its citizens.

I yield the remainder of this half hour to Senator Domenici.

I say to the distinguished Democratic whip, it is my understanding the Senator is on his way to the Chamber from Senator Frist's office right now.

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

Over the last couple of days there have been many assertions from my colleagues on the other side of the isle that this bill does nothing to lower the cost of prescription drugs.

I would like to take this opportunity to set the record straight.

The conference report contains a number of significant reforms to lower the cost of prescription drugs for not just Medicare beneficiaries, but for all Americans.

This bill provides immediate relief to 40 million Medicare beneficiaries by providing a discount drug card starting in April 2004.

The voluntary drug card program will save beneficiaries an average of 10 to 25 percent on the cost of their prescription drugs. Beneficiaries will have the choice of at least two Medicare-endorsed drug discount cards.

The drug discount program included in the Medicare Prescription Drug and Modernization Act also provides low-income beneficiaries with an additional subsidy of $600 to help with the costs of their prescription drugs.

This program provides immediate relief to Medicare beneficiaries now paying extremely high prices for their prescription drugs.

This bill also lowers the price of prescription drugs for Medicare beneficiaries, by eliminating the Average Wholesale Price, AWP, paid for prescription drugs.

This provision significantly reduces the prices that Medicare and many private insurers pay for physicians-administered drugs.

Under this agreement, Medicare reimbursements will now be based on actual prices paid by physicians, rather than fictitious numbers reported by manufacturers, providing a ripple effect lowering the cost of prescription drugs for not just Medicare beneficiaries but individuals in the private market.

The conference report also contains a ``non-interference'' provision that will protect patients and deliver lower prices through market competition.

The conference bill specifies that the Government ``may not interfere with the negotiations between drug manufacturers and pharmacies and PDP sponsors'' and ``may not require a particular formulary or institute a price structure.'' It is right here on page 53.

Opponents claim that this provision, which originated with Democratic proposals, is a concession to the pharmaceutical industry. That is plain wrong.

The noninterference provision is at the heart of the bill's structure for delivering prescription drug coverage through market competition that gets a good deal for consumers, rather than through price fixing by the CMS bureaucracy. As CMS Administrator Tom Scully explained in the November 21, 2003 issue of the Washington Post, if Medicare negotiated prices, ``I wouldn't be negotiating; I'd just be fixing the price. Let's get seniors organized into big purchasing pools that get bulk discounts and see how they fare.''

Ironically, this provision was created by the Democrats and first appeared in May 2000 in a bill sponsored by Senator Daschle and 33 Democratic cosponsors. In June 2000, Mr. Stark included the same language in his motion to recommit H.R. 4680. That motion received the support of 203 Democrats and Mr. Sanders.

The provision protects patients by keeping the Government out of decisions about which medicines they will be able to receive. Under this section, CMS will not be able to dictate that drugs must be excluded from a PDP formulary or subjected to reimbursement limits that effectively deny access.

The bill relies on market competition, not price fixing by CMS, to deliver the drug benefit. The bill's entire approach is to get seniors the best deal through vigorous market competition, not price controls.

CBO scores the bill's approach of relying on at-risk private sector plans to deliver the prescription drug benefit as getting a higher cost management factor for Medicare than bills where private sector competition is handicapped by Government. The noninterference provision protects this approach, by preventing politicians and bureaucrats from getting into the middle of the very negotiations that drive these savings.

Private plans have strong incentives under the bill to negotiate the best possible deals on drug prices, because they are at risk for a large part of the cost of the benefit. They also will have the market clout to obtain large discounts. By driving hard bargains, they will be able to offer lower premiums and attract more enrollees.

The alternative is a command-and-control system that would not be responsive to consumer desires or marketplace realities. Bureaucrats would swing between adding benefit requirements without a means of paying for them and restricting choices and access in an effort to contain costs. This bill wisely rejects that approach. The noninterference provision is the fundamental protection against it.

Finally, the conference report lowers the cost of drugs for all Americans by reforming the Hatch-Waxman drug pricing laws.

The agreement will speed the process of allowing generic drugs to come to market, which will significantly reduce drug prices.

The agreement will provide brand drug companies only one 30-month stay on the approval or a generic competitor.

Generics would be forced to forego their 180-day generic exclusivity if they do not bring a product to market within a specified time period.

These reforms are the most aggressive since Hatch-Waxman laws took effect in 1984.

These reforms have also earned the strong endorsement of the Generic Pharmaceutical Association and dozens of allied groups who are advocates of increased generic usage and low drug prices.

So to my colleagues who say there is nothing in this bill to lower drug prices, they are not talking about this bill.

My friend and colleague on the Finance Committee, Senator Baucus, has come to the floor. He is primarily responsible for the legislation that is before us because he has been very willing to work in a bipartisan way to get things done. We would not be here today if it was not for the hard work of Senator Baucus, the ranking Democrat on the Finance Committee, and a person with whom I can work very well.

I yield the floor.

Mr. President, before the Senator from New Jersey leaves, I want to speak about a couple of words which he mentioned. And I don't say it to take exception with what he said or to quibble with his description of the legislation before us. But if the President of the United States saw Senator Grassley speaking right after some words that the Senator from New Jersey used about legislation, the President would be offended because I found fault with the President using those very same words back on December 10 last year when I had my first meeting with the President on the Medicare issue.

The words that the Senator from New Jersey used about the legislation before the Senate is that it is cobbled up. As everyone in this body knows, for about a year and a half I worked with five Members of this body on what was then called the tripartisan plan. The President started his lecture to me last December, something along this line: We have to have a dramatic change of Medicare. We have to provide prescription drugs for the seniors. We have to change Medicare for the future. He says: We do not want something like that cobbled-up tripartisan plan.

Obviously, the President cannot know everything that goes on in the Congress of the United States about forming legislation, but if he knew the hours and hours, not only at the staff level but at the Member level, that went into the tripartisan plan that we unfolded here a year ago in July, the President would not use the words ``cobbled up.'' I never heard the President use the words ``cobble up'' after that because I tried to impress upon him there was a great deal of thought, a great deal of hard work, and most importantly, time, plus bill compromise that the word ``tripartisan'' implies to bring together where we were at that time.

If he had appreciated it, he would see we have to have the same sort of thought and hard work go into what he was thinking about. I never heard him say that again. I am reminded of that story now that the Senator from New Jersey said this legislation is cobbled together.

To some extent, I suppose every political compromise, for every piece of legislation, one could use those words to describe it. I know the Senator from New Jersey participates in a lot of very difficult legislation in the committees he serves on and knows what it takes to put a bill together. However, I look at this piece of legislation, the compromise it takes, the hard work it takes, all the long hours it takes, as not a perfect piece of legislation but surely not a cobbled- together piece of legislation.

From that point of view I will respond not to the Senator from New Jersey any further but to speak about some of the aspects of this legislation as we get ready to vote on it tomorrow.

I would be glad to yield for a short question or short comment and reserve my right to the floor.

I surely appreciate the good nature in which the Senator from New Jersey just stated his feelings about this legislation. I wanted to give equal treatment to the President, as I did the Senator from New Jersey and vice versa.

One of the aspects of this legislation that is misunderstood is the issue of health savings accounts, which is a new name for what people hear Congressmen talk about as medical savings accounts, only different in name, particularly, as it relates to people in my State, the benefit to farmers and small business people.

This bipartisan agreement includes these provisions establishing health savings accounts. I will refer to them as HSAs.

HSAs are tax-advantaged savings accounts that can be used to pay for medical expenses incurred by individuals, their spouse, or dependents. HSAs are similar to medical savings accounts. However, medical savings account eligibility has been restricted to employees of small businesses and the self-employed. HSAs are open to everyone with a high deductible health insurance plan. The only limitation on the health plan is that the annual deductible must be at least $1,000 for individual coverage, and $2,000 for family coverage. Contributions to the HSA by an employer are not included in the individual's taxable income. Contributions to an individual are tax deductible.

Total yearly contributions to an HSA can be as large as the individual's health insurance plan deductible, between $1,000 and $5,000 for self-coverage, and $2,000 and $10,000 for family coverage.

The interest in investment earnings generated by this account is also not taxable while in the health savings account. Amounts distributed are not taxable as long as they are used to pay for qualified medical expenses such as prescriptions, over-the-counter drugs, and long-term care services, as well as the purchase of continued health care coverage for the unemployed individual. That is legislation we passed a long time ago called COBRA.

Amounts distributed which are not used to pay for qualified medical expenses will be taxable, plus an additional 10-percent tax being applied in order to prevent the use of HSAs for nonmedical purposes. These accounts are portable, so an individual is not dependent on a particular employer to enjoy the advantages of having an HSA, low- income individual retirement account. The HSA is owned by the individual, not by the employer, and if the

individual changes jobs, the HSA goes with the individual.

In addition, individuals over age 55 may contribute extra contributions to their accounts and still enjoy the same tax advantage.

In 2004, an additional $500 can be added to the HSA. By the year 2009, an additional $1,000 can be added to the HSA.

In regard to this legislation before the Senate beyond the health savings accounts, I point out what a great prescription drug benefit structure we have. First and foremost, it is important to point out that this is a voluntary program. If you currently have drug coverage and you like it, you can keep it or, if you do not have drug coverage and do not want it, you do not have to take it. If you are covered by Medicare fee for service today, and you are satisfied with it, you can stay right where you are.

This drug benefit also offered through Medicare will be a comprehensive benefit that will provide real relief for our seniors. Seniors that now pay full retail price could see a 25-percent reduction in their prescription spending. Additionally, these seniors' overall out-of-pocket drug spending could fall by as much as 77 percent. This is real relief for real people, not some hypothetical.

To provide relief to all seniors, the drug benefit is based upon income level. It is quite simple. Those who need more help because they are low income will receive more help under this program.

We divide this up according to the levels of poverty under the official poverty indexes of the Federal Government.

For those individuals and couples who are above 150 percent of the Federal poverty level, they can expect to see a monthly premium of $35, an annual deductible amounting to $250, a 75-25 percent cost-sharing up to a payment of $2,250, and a true out-of-pocket catastrophic cap at $3,600.

Additional benefits, including help with both the premium and initial cost-sharing, are targeted to seniors with income levels below 150 percent of the Federal poverty level. These subsidies will be available at increasing levels for those between 135 and 150 percent of the poverty index, and those between 100 and 135 percent. And then there is still another category of greater help for those below 100 percent of poverty.

I will explain how this differs for each of these categories. First, for individuals who are 135 to 150 percent of poverty, this group would have a $50 deductible, sliding-scale premium assistance, and 15 percent cost-sharing up to the benefit limit of $2,250, and $2 or $5 cost- sharing above the catastrophic level--$2 meaning for generic, $5 for brand-name drugs.

For individuals who are below 135 percent of the poverty index, they would have no deductibles, no premiums, $2 and $5 cost-sharing up to the catastrophic limit, and no cost-sharing after the catastrophic level has been reached.

Now, we go to the neediest of our seniors, the dual eligibles, those who are presently low income and getting help not only from Medicare but from the State Medicaid Program. They currently have their drug costs paid for by the Medicare Program that differs a little bit from State to State based upon the laws of those States.

Our conference report calls for Medicare to pick up the cost of their prescription drugs. Most of this population will have a $1 and $3 cost- sharing up to the cost-sharing limit, and then, after that, no cost- sharing on the catastrophic. Now, that $1 and $3, again, is generic for the $1, and $3 for the brand-name drugs.

By providing coverage to all seniors based on income levels, you can see that the number of individuals with no prescription drug coverage will fall from 24 percent in the year 2002 to 2 percent in the year 2009.

Now let's make it clear. About over half of individuals today have some prescription drug coverage--some very good, some not so good--and then 25 percent, maybe 30 percent have nothing. Now, we expect this to go down under this program to just 2 percent of our population, after 3 years of phase in.

Mr. President, 98 percent of the seniors receiving prescription drug coverage in 2009 will receive it from privately insured plans. Moreover, 33 percent of the beneficiaries will get their prescription drug coverage from integrated private plans, three times the rate in 2002.

Additionally, seniors will see immediate benefits with discount drug cards. These are going to be available in the middle of next year, and through all of the year 2005. Then, after the year 2005, the new program, in its entirety, kicks in. So the discount drug card is for an interim period of time while it takes the Department of HHS a period of time to set up what we are going to pass tomorrow. These discount drug cards will pass on between 15 and 25 percent of savings on seniors' current drug prices.

It is clear to see that the conference agreement has come a long way since we passed this bill in this body the first time in June. Many of my colleagues wanted a lower deductible. We have a lower deductible. Other colleagues were more concerned with getting the dual eligibles' drug costs out of the Medicaid Program and covering everybody by Medicare. We have done that as well.

So this is a good, solid drug benefit that will provide real relief to all seniors. Not only is this a good bill, with a good benefit, this bill provides an incentive for employers not to drop their retiree coverage.

Because there has been so much misinformation about corporations dropping employees, and since we have gone to such great strides in the conference report to overcome that problem and reduce that possibility, I want to spend some time on that and make clear that what we did in this respect--I think it is fair for me to say that the conference report, the compromise between the House bill and the Senate bill, is very much better than either the Senate bill, when it passed in June, or the House bill, when it passed the other body in June. So I would make these comments about whether or not employers are going to drop coverage of their retirees.

Now, we have heard a lot from opponents of this historic bipartisan effort alleging that this bill will cause employers to drop their retiree health coverage. But one thing these opponents do not do is tell the people the whole story.

So as Paul Harvey says, the rest of the story and the reality is that employers have been dropping retiree coverage for years.

As you can see from this chart, there has been a gradual decline in the number of corporations providing coverage for their retirees. Since 1991, the number of larger employers offering health coverage to their retirees has dropped by nearly 20 percent, from 80 percent down to 61 percent.

This chart shows what we have been seeing in our States and hearing from our constituents. So employers have been dropping coverage for their retirees, and this has already been going on for more than a decade.

We know these days employers are finding it harder and harder to continue voluntarily providing health insurance coverage for their retirees.

That is why we in the Medicare conference worked diligently--put resources behind it--to help employers continue providing coverage for retirees, not just to be nice to the retirees but to be nice to the taxpayers because it is a heck of a lot cheaper to keep these retirees in their corporate plans than have them go on our plan.

That is our goal. Let me make it very clear; we have done a very good job of accomplishing that goal.

So let me tell you the three important ways we have done it.

First, the bill provides a 28-percent subsidy for the prescription drug costs for retirees so they will continue providing this coverage. That is about $750 per retiree, but that is just on average because every corporation has a different plan.

Second, we exclude this retiree subsidy from the Federal corporate tax. This dramatically increases the value of this subsidy for retiree coverage and helps the employer continue offering this coverage.

Third, the bill provides additional flexibility for employers to structure plans that complement Medicare's new drug benefit.

Overall, the conferees agreed to put $89 billion in this bill to protect retiree health coverage.

This funding makes it more likely--obviously not less likely--that employers will continue their retiree benefits. I think I ought to emphasize what $89 billion happens to be. That is 20 percent of all the money we are putting in this bill for prescription drugs for seniors. Now the Congressional Budget Office estimates that 17 percent of the retirees will not receive supplemental drug coverage from their employers beyond what is offered by Medicare in this bill. We have a different estimate from the Employee Benefits Research Institute that is outside of our government. It is a nationally respected organization that studies retiree benefits. They estimate that that number is going to be much smaller: 2 to 9 percent of the retirees might not receive supplemental coverage from their employer in the future if Congress passes the Medicare benefit.

According to the Employee Benefits Research Institute, if Congress creates a Medicare drug benefit of any kind, some employers will want their retirees to take advantage of that new benefit. This is an important part of the rest of the story. The only way to prevent employers from putting their retirees in the Medicare drug program is if we don't pass legislation such as this, if we say we don't give a darn about the 25 to 30 percent of the people who don't now have prescription drugs and we don't care if they ever have it. That is not the attitude of Congress. That is why this legislation is before us, because we do care about people who can't afford or don't have available a plan for prescription drugs.

For those people, particularly on this side of the aisle, who have been complaining about not doing enough or that passing this bill might cause some corporations to change their health benefits and prescription drugs for their seniors, do they think we should do nothing? No, they don't think so. They are crying because we aren't doing enough. I tell you honestly, we could put $400 billion, all of this bill, into just those 30 percent of the people in this country who retire from corporations that have a pretty good prescription drug program, probably better than most people have, and I couldn't guarantee anybody in this country that some corporation, big or little, wouldn't dump their programs, just dump them, as they have been doing for 20 years.

Let me be clear, these retirees will not be left without drug coverage. Retirees are not going to lose drug coverage. Why? Because of this bipartisan bill before us. These retirees will still be better off than today, because today when their employer drops coverage, they are left with nothing--no coverage whatsoever. Because of this bill, these retirees will be getting drug coverage from Medicare, and their former employer will likely pay the monthly premium for them. They will still be better off than they would be today where there is no Medicare drug benefit to back them up.

It is also important to recognize that keeping employers in the game lowers the Federal cost of the drug benefit. That is why we are concerned about the taxpayer as well as the corporate retiree. Obviously, if it is dumped, it is going to cost the plan more than if they stay on the corporate plan. So providing this 28 percent subsidy actually lowers the cost of the Medicare benefit. This generous 28 percent subsidy for retiree coverage is good policy. And because it is good policy, it is good politics. This bipartisan bill protects retiree benefits. That has been our goal, and we have accomplished it.

Mr. President, Medicare contractor reform will not succeed if contractors are subject to unlimited civil liability in carrying out the payments, provider services, and beneficiary services functions expected of them. The conference agreement would therefore continue the past policy of limiting the liability of certifying and disbursing officers, and the Medicare administrative contractors for whom those officers serve, with respect to certain payments.

In addition, the language contained in section 911 of the conference agreement clarifies that Medicare administrative contractors are not liable for inadvertent billing errors but, as in the past, are liable for all damages resulting from reckless disregard or intent to defraud the United States. Importantly, the reckless disregard standard is the same as the standard the standard under the False Claims Act. This standard balances the practical need to shelter Medicare administrative contractors from frivolous civil litigation by disgruntled providers or beneficiaries with the Medicare program's interest in protecting itself from contractor fraud.

The False Claims Act, 31 U.S.C. Sec. Sec. 3729-3733, applies to Medicare fiscal intermediaries and carriers under current law. This legislation makes it clear that the False Claims Act continues, as in the past, to remain available as a remedy for fraud against Medicare by certifying officers, disbursing officers, and Medicare administrative contractors alike and that, among other things, the remedy subjects Medicare contractors to administrative, as well as trust fund, damages.

Mr. President, for the leader, I would like to give what is referred to daily as the closing script, if I may.

I ask unanimous consent that when the Senate completes its business today, it adjourn until 9 a.m., Monday, November 24. I further ask that following the prayer and pledge, the morning hour be deemed expired, the Journal of proceedings be approved to date, the time for the two leaders be reserved for their use later in the day, and the Senate then resume consideration of the conference report to accompany H.R. 1, the Medicare modernization bill, provided that the time until 12:30 p.m. be equally divided between the chairman of the Finance Committee or his designee and the minority leader or his designee. I further ask unanimous consent that the cloture vote on the conference report begin at 12:30 p.m. Finally, I ask that the last 10 minutes prior to the vote be allocated to the Democratic leader for 5 minutes, to be followed by the majority leader for 5 minutes.