PRESCRIPTION DRUG AND MEDICARE IMPROVEMENT ACT OF 2003--Continued
Madam President, I ask unanimous consent that the order for the quorum call be rescinded. Madam President, I am very concerned because what I see coming at us right now is a very fast train. And that train is a giant giveaway entitlement…
Madam President, I ask unanimous consent that the order for the quorum call be rescinded.
Madam President, I am very concerned because what I see coming at us right now is a very fast train. And that train is a giant giveaway entitlement program. We might be in a position to do something about now, but if we wait, we will not be able to do anything about it.
Medicare already accounts for roughly 12 percent of the Federal spending and will only grow as more and more baby boomers retire. When Medicare was proposed in 1965--and I am one of the few people around old enough to remember that--I can recall the estimate of Medicare Part A that would cost $2.9 billion in 1970. This was 1965. The actual expenditures in 1970 were $5.3 billion, roughly twice what they were estimating back in 1965. The estimate for 1980 was $5.5 billion. This is Medicare now. The actual expenditures that year totaled $25.6 billion. That is five times the estimated amount.
The predicted expenditures for 1990 were $9.1 billion, but the actual expenses totaled $67 billion, nearly seven times the estimated amount. Currently, 76 percent of the Medicare beneficiaries already have some form of drug coverage.
We have talked about the fact that something that is not broken does not need to be fixed. When we start looking at establishing an entitlement program today and go by the Medicare model, this is something that none of our kids and grandkids are going to be able to afford.
So if we keep in mind that 67 percent of the Medicare beneficiaries already have some form of drug coverage--much of it is better than the proposal on the table now--many of these individuals could lose this coverage if a prescription drug benefit is added to Medicare.
CBO estimates that 37 percent of the beneficiaries with employer- based prescription drug coverage would lose that coverage. This accounts for 11 percent of the total Medicare population.
Many pharmaceutical companies already offer programs that give low- income seniors their prescription drugs for free or for reduced prices. If this bill is passes in this form, the companies may eliminate these programs, forcing more people into the Medicare rolls.
One might say, well, we can legislate this and not allow them to do that. That solution is not going to work. That would be an attempt to micromanage the private sector, and that would not work. I do not think there is any Member of this Senate who, if they owned a company that was giving away free programs, then the Government came along and offered something, that they would continue that practice. That is exactly what would happen.
The need to get this legislation to the floor and passed by the end of June, along with the need for bipartisan support, has led to a series of compromises that have resulted in a hodgepodge of a bill. There are elements of this bill that are not only bad policy but will have a detrimental effect on the system as a whole; for instance, the extension of instant Medicaid benefits to illegal aliens, placing an additional burden on Medicaid; loss of employer-based benefits, thus expanding an already large entitlement program.
According to an editorial in the Wall Street Journal yesterday, Monday, seniors already own 60 percent of all the wealth of the country and their worth is only increasing. We cannot continue to finance entitlement programs on the backs of current American workers, which is what this bill does.
The bill is not means tested. We are giving multimillionaires, even billionaires, the same benefit offered to seniors on fixed incomes. In other words, the Bill Gateses and Warren Buffetts would get the same benefit as a retired schoolteacher.
There is a need for Medicare reform to ensure the solvency and stability of the program. However, the current version of this bill does not meet those needs.
I look forward to working with my colleagues to improve this legislation through amendments designed to encourage employers to retain the drug coverage they currently offer, to allow seniors to take advantage of private plans and better options, and to keep the costs low.
I will read a little bit of the editorial I read on the plane coming back to Washington. It says:
The bill that passed the Senate Finance Committee last week
would cover just 50 percent of the drug expenses between $276
and $4,500 annually, then zero up to $5,800, and 90 percent
thereafter. That's nowhere near as good as many seniors
currently have with employer-sponsored coverage. Most
employers will drop or scale back that coverage once they
realize that the feds are willing to pick up part of their
tab.
That is human nature. That is what we are talking about.
The Congressional Budget Office estimates that 37 percent
of those with employer coverage could lose it.
I ask unanimous consent that the entire article be printed in the Record at the conclusion of my remarks.
We want something to happen. We know there are some plans out there that have been offered that take into consideration that we do not want one Government program that is going to end up being an entitlement program. If it ends up the way it is today, I am going to serve notice right now that after every effort we can make to pass amendments, if they do not work and we end up with what we have today, I am going to be opposing this plan, and hopefully there will be several others who will do the same thing.
Exhibit 1
Medicare Drug Folly
Runaway trains are hard to stop, but someone has to try and
derail the bipartisan folly now moving ahead under the guise
of Medicare ``reform.'' Permit us to put a few facts on the
table, in the (probably fanciful) hope that somebody in the
White House still cares more about the long-run policy than
the short-term politics.
Let's start with the amusing irony that the supporters of
this giant new prescription drug benefit are many of the same
folks who were only recently moaning that a $350 billion tax
cut would break the budget. That tax cut will at least help
the economy grow. But the new Medicare entitlement is nothing
more than a wealth transfer (from younger workers to
retirees) estimated to cost $400 billion over 10 years, and
everyone knows even that is understated.
The real pig in the Medicare python doesn't hit until the
Baby Boomers retire. Social Security and Medicare Trustee Tom
Saving told us last week that the ``present value'' of the
Senate plan--the value of the entire future obligation in
today's dollars--is something like two-thirds the size of the
current $3.8 trillion in debt held by the public.
Bill Clinton's Medicare administrator, Nancy-Ann DeParle,
correctly calls it the ``biggest expansion of government
health benefits since the Great Society.'' She's delighted to
see it, but for the rest of us it is a recipe for tax
increases as far as the eye can see.
And these estimates are before Democrats ``improve'' the
benefit, as they are already agitating to do. That's because
the dirty secret of this bipartisan lovefest is that the
proposed drug benefit isn't all that great.
The bill that passed the Senate Finance Committee last week
would cover just 50% of drug expenses between $276 and $4,500
annually, then zero up to $5,800, and 90% thereafter.
That's nowhere near as good as many seniors currently have
with employer-sponsored coverage. Most employers will drop or
scale back that coverage once they realize that the feds are
willing to pick up part of their tab. The Congressional
Budget Office estimates that 37% of those with employer
coverage could lose it.
A Goldman Sachs analyst last week called this bill the
``automaker enrichment act,'' saying companies like Ford and
GM would see a 15% reduction in their annual drug spending
and a huge decrease in unfunded liabilities. So unborn
taxpayers will soon have to pick up the tab for sweetheart
labor deals negotiated by carmakers and their unions a
generation or two ago.
Understood in these terms, a universal drug benefit is
neither necessary nor morally justifiable. Some 76% of
seniors already have some prescription drug coverage, as the
nearby chart shows. The average Medicare beneficiary spends
an affordable $999 a year out of pocket on prescription
drugs, and less than 5% have out of pocket expenses over
$4,000.
Seniors already own 60% of all the wealth in this country,
and are getting richer. A report in Health Affairs estimates
that by 2030 about half will have incomes of $40,000 and
about 60% will have assets of $200,000 or more. We're all for
a prosperous old age, but it is hardly a step toward social
justice for comfortable retirees to be further subsidized by
working taxpayers with mortgages and kids. The problem of
genuinely poor seniors can be handled with a drug discount
card or a means-tested subsidy.
We understand, of course, that these facts are unlikely to
interfere with the political calculus driving this giant step
toward Canadian health care. The Democrats want to expand the
welfare state, while Republicans have convinced themselves
that they'll get credit with seniors and be able to take
health care off the table for 2004.
The Republicans are fooling themselves in the long run, and
perhaps even about next year. Republicans can never win an
entitlement bidding war. They will spend the rest of their
public lives sounding like Scrooge for not expanding
benefits, or raising taxes on their own voters to pay for the
subsidies, or imposing price controls on drug makers that
will stifle innovation. This is how parties of the right
became me-too socialists in Europe.
The sheepish support for this from the likes of otherwise
conservative Senators Rick Santorum and Mitch McConnell gives
the game away. They're playing loyal spinners, but their
heart doesn't seem to be in it. They're going along for the
ride with a Republican White House that seems to have
forgotten that it has an obligation to more than its own re-
election.
I suggest the absence of a quorum.