Floor Statements

The following Senator is necessarily absent: the Senator from Oklahoma (Mr. Inhofe).

The following Senator is necessarily absent: the Senator from Oklahoma (Mr. Inhofe).

The following Senator is necessarily absent: the Senator from Oklahoma (Mr. Inhofe).

Mr. President, I listened carefully to what my colleague said, and as a member of the Finance Committee, I can tell him that he is not in error. What he said about premiums going up under this legislation is true. The promise was that premiums would not go up. Well, they continue to go up. In fact, in the case of the individual market, the legislation itself causes them to go up between 10 and 13 percent. My colleague is not in error.

If the Reid bill has a motto, it is ``in government we trust.'' With the turn of every page, it is no exaggeration to say the Reid bill creates a Washington takeover of health care, to wit, $2.5 trillion in new government spending; $494 billion in new taxes; $465 billion in Medicare cuts; 70 new government programs; and higher health insurance premiums for individuals, families, and businesses. It is packed with new Federal requirements and mandates that amount to a stunning assault on liberty. Even in the absence of a government-run insurance plan, this bill would give the government virtually total control over health care. The bill itself is the government option.

Michael Cannon, a health policy expert at the Cato Institute, warns that the bill's linchpin, the requirement that all individuals buy a government-approved insurance plan, would be ``the most sweeping and dangerous measure in any of the bills before Congress.''

Of course, if Congress mandates that every American purchase health insurance, then Congress gets to define exactly what that health insurance entails. Welcome to the future, where bureaucrats and politicians know what is best for families, small businesses, and seniors. For example, under this legislation the government would set new Federal rating rules. Rating rules dictate how insurers may calculate premiums, which experts estimate would

increase premiums by a whopping 72 percent in my home State of Arizona. They would determine the coverage benefits for all plans regardless of consumer preferences or health care needs. The government would limit insurers to offering only four plans. You have to offer two; you can't offer any more than four. They would prohibit individuals over the age of 30 from enrolling in a catastrophic health care plan. And to highlight the magnitude of government interference and micromanagement, the bill even dictates the number of pages--by the way, it is no more than 4--and the font size--no smaller than 12 point--of the summary of benefits. These are just a few examples of the heavyhanded government controls. Indeed, the word ``shall'' appears 3,607 times in the Reid bill. I haven't had a chance yet to count how many more times it appears in the almost 400-page amendment that has been now filed.

In my view, however, the most dangerous consequence of the Washington takeover of health care is the inevitable rationing that will result in the delay and denial of care. Ensuring access to the highest quality care and protecting the sacred doctor-patient relationship should be the fundamental goals of any health reform effort. These intangibles are the cornerstones of U.S. health care, the very things Americans value most, that the Reid bill puts in jeopardy. Don't look for the words ``ration'' or ``withhold coverage'' or ``delay access to care'' in the bill. Obviously, they are not there. Instead, contemplate the inevitable result of new Federal rules that aim to reduce health care costs but will inevitably result in delayed or denied tests, treatments, and procedures deemed to be too expensive. For example, the Reid bill would establish a Medicare Commission. This is an unelected body of bureaucrats with the task of finding, and I am quoting here, ``sources of excess cost growth,'' meaning, of course, tests and treatments that are allegedly too expensive or whose coverage would mean too much government spending on seniors. The Commission's decisions will result in the delay and denial of care.

Medicare already delays more medical claims than private insurers do, but this bill would redistribute Medicare payments to physicians based on how much they spend treating seniors. It would rely on recommendations from the U.S. Preventive Services Task Force--the entity, by the way, that recently recommended against mammograms for women under the age of 50--to set preventive health care benefits, and it would authorize the Federal Government to use comparative effectiveness research when making coverage determinations. It is this last issue--comparative effectiveness research--that I wish to discuss in more detail.

The Reid bill would create a new entity called the Patient-Centered Outcomes Research Institute to conduct comparative effectiveness research. This research, which is already done in the private sector, compares the effectiveness of two or more health care services or treatments, and, of course, it is used to provide doctors with information as to what works best in most cases. The goal is to provide patients and doctors with better information regarding the risks and benefits of a drug, let's say, for example, versus surgery in a particular kind of case. The question before us is not as to the merits of the research but, rather, whether the research should be used by the government to determine the treatments and services covered by insurance.

In a recent interview, President Obama said:

What I think the government could do effectively is to be

an honest broker in assessing and evaluating treatment

options.

The President believes the government should assess and evaluate health care treatments, and certainly that is how health care works in other countries such as Great Britain. For example, there, they have the National Institute for Health and Clinical Excellence; the acronym is NIHCE. NIHCE routinely uses comparative effectiveness research to make cost-benefit calculations. They don't even attempt to hide it. On its Web site, NIHCE says:

With the rapid advancement in modern medicine, most people

accept that no publicly funded health care system, including

the National Health Service, can possibly pay for every new

medical treatment which becomes available. The enormous costs

involved mean that choices have to be made.

Choices are made, and this is the key: They are made by the government, not by patients and doctors.

The National Health Service, which runs Britain's health care system, has issued guidance known as the Liverpool Care Pathway whereby a doctor can withdraw fluids and drugs from a patient if the medical team diagnoses that the patient is close to death. Many are then put on continuous sedation so that they die free of pain. Doctors warn that some patients are being wrongly put on the pathway, which is creating a self-fulfilling prophecy that they would die because sedation often masks the signs of improvement.

Also, due to excessively long waiting periods, the National Health Service launched what they call an End Waiting, Change Lives campaign. The goal here was to reduce patients' waiting times to 18 weeks from referral to treatment--18 weeks. That is supposed to be a good thing? That is 4\1/2\ months for an appointment. This is why many Europeans and Canadians visit the United States each year, places such as the Mayo Clinic in Arizona, for access to the treatments that are denied to them in their own countries.

These are the dangers of a government-run health care system. The government, not the patients and doctors, makes the health care decisions. The government decides if your health care is an effective use of government resources, and the government inevitably interferes in your ability to access care. That is rationing, and it is wrong. This is not what Americans want or expected from health care reform. Yet it is precisely the path Congress is taking. Perhaps that is why 61 percent of Americans disapprove of this bill.

Nothing in the Reid bill would prohibit the Federal Government from using comparative effectiveness research, just as it has done in Britain, as a tool to delay or deny coverage of a health care treatment or service. The bill actually empowers the Secretary of Health and Human Services to use comparative effectiveness research when making coverage determinations. For example, on page 1,684 of the original bill, it says:

The Secretary may only use evidence and findings from

research conducted under section 1181 to make a determination

regarding coverage . . .

And so on.

As the Washington Examiner notes:

Health and Human Services Secretary Kathleen Sebelius would

be awarded unprecedented new powers under the proposal,

including the authority to decide what medical care should be

covered by insurers as well as the terms and conditions of

coverage and who should receive it. The Reid legislation

lists 1,697 times where the Secretary is given the authority

to create, determine, or define things in the bill.

I know my colleagues will point to language that says: Well, the Secretary can't make these decisions on rationing care solely on the basis of comparative effectiveness research. Whoopee. I am not sure if that is a word we can use on the Senate floor, but big deal. You can't make it solely on that basis, but you can use comparative effectiveness research to ration care. That is wrong, and that is what this bill permits. And despite numerous times to get a simple amendment I offered to say no comparative effectiveness research can be used by a Federal agency to deny care or treatment--simple--the other side says: No, we already have it covered. It is good enough. Our language is fine. You don't need that simple statement that would prevent this research from being used in that fashion. I think it is pretty clear that the attempt here is to be able to do it.

During the Finance Committee, I asked the majority counsel why they didn't bar the Federal Government from using comparative effectiveness research as a tool to ration care. The staff replied:

The reason why we did not include an express prohibition is

we did not want to limit the institute from considering areas

of science that have a budgetary impact, if you will.

That is, of course, precisely the problem. Americans do not want the Federal Government using this research as a cost-cutting tool.

Regina Herzlinger, a professor at Harvard Business School, warns: CER could easily morph into an instrument of health care rationing by the Federal Government without the appropriate safeguards.

That is why earlier this year I joined Senator McConnell and Senator Roberts and Senator Crapo in introducing the PATIENTS Act, and it creates this firewall to prevent the use of research for rationing. We filed it as an amendment, but, of course, we are not going to be able to vote on it now that cloture has been invoked. This is the third time this year we have tried to institute this pro-patient firewall, but obviously we are not going to be able to vote on it, as I said.

From the very beginning of the health care reform debate, I have believed that any bill should be rooted in a simple yet fundamental principle: that very American should be able to choose the doctor, hospital, and health plan of his or her choice. No Washington bureaucrat should interfere with that right or substitute the government's judgment for that of a physician. There is nothing more important to Americans, other than maybe their freedom, than the health of their family--and that does, by the way, include an element of freedom, obviously, the freedom to do what you think is best for your family. We would all do anything we could to help a loved one. We don't want Washington impeding our ability to do so.

Maybe that is why this new Washington Post-ABC poll ``finds the public generally fearful that a revamped system would bring higher costs while worsening the quality of their care.'' Even, they say, those without insurance are evenly divided on the question of whether their care would be better if the system were overhauled.

The American people get it. The bill itself is the government option, but in government, they do not trust.

Mr. President, I would say to our colleague, as a general rule that is correct. The majority leader has two great powers that no one else in the Senate has. One is the right of first recognition by the Presiding Officer and the other is the power to set the schedule. That power is limited by Senate rules, and it can be altered by unanimous consent. I can go on and explain a little bit to folks who are wondering why we would be in this predicament of voting on Christmas Eve based upon the majority leader's decision. If I can just proceed, I will do that.

All of these rather odd times for debates, 1 o'clock in the morning, 7:20 a.m. in the morning, and so on, are as a result of the majority leader's decision to make sure that this bill is completed by Christmas. That is the precipitating cause for everything else that follows because once he says the bill has to be completed by Christmas, then he has to, in effect, count backwards on how long it takes to do the various things the Senate rules say we have to do.

If there are three cloture motions filed--which is what the majority leader did; he filed three cloture motions simultaneously--under Senate rules certain timeframes then attach.

You have to take the vote with 1 day intervening between the filing of the cloture motion and the vote. If cloture is invoked, then 30 hours for debate is permitted after which there can be additional action by the Senate. So when the majority leader takes all that into account, he finds that he has to vote at 1 a.m. in the morning, 7:20 a.m, and so on.

He could change that, of course. He could change that by saying we do not actually have to have the whole thing completed by Christmas. That is strictly an arbitrary date he set.

There have been some who said: Why don't we have a unanimous consent request to not put us through all of this and try to complete the debate a couple of days earlier?

Republicans have said: Now wait a minute. You are telling us on the one hand that the majority leader is saying we have to have this completed by Christmas, but since that is kind of tough on all of us, now you are saying let's move that up a couple of days.

Republicans are saying: We have had barely enough time to consider this bill as it is. We are not going to agree to move it up any more than that. We don't like voting on Christmas Eve any more than you do, but the answer to it is not making the time even shorter but, rather, taking our time and doing it right. As the Senator from Maine has pointed out, let's go home for the Christmas recess, stop and listen to what our constituents are telling us they would like to have us do, and then come back and complete it. That could all be done by unanimous consent. My colleague is correct that once the majority leader made the decision that this has to be done by Christmas, then the time is pretty well set by the Senate rules, absent a unanimous consent by the body that would either extend the time or shorten that amount of time.

I would like to make another point, off that subject if I could, but if my colleague has another question in that regard I would be happy to try to respond it.

I talked to the Senator from Wyoming. Of course, Arizona is a State that has a lot of Medicare patients. Our State is hurt as much as any by the cuts to Medicare and particularly the Medicare Advantage cuts. We do not have the benefit that was extended to residents of other States, primarily the State of Florida, by a special provision that was inserted into the bill. As a result, our constituents are going to suffer more than those of some other States.

But the more we read this bill--and one of the reasons Republicans have not been willing to truncate this debate is that the more we read it the more we find in it that is troublesome. We found yesterday that the Congressional Budget Office--actually the Congressional Budget Office brought to our attention the fact that they had made a little mistake. I think it was a quarter of 1 percent in one of their calculations. That quarter of 1 percent amounted to $600 billion. So a small error by the Congressional Budget Office can make a huge difference to the people of America. That is $600 billion.

We also saw there were special provisions in the bill for residents of one particular State, and that has gotten quite a bit of attention lately. There has also been a dental/vision clinic in a State that has benefited. I am still not sure we have figured out exactly what that State is, but I understand one of the Senators from Connecticut has taken credit for it. I don't know if that is true. It is hearsay. If that is incorrect, I can be corrected. But the more we see about it, the more we realize that support for it was garnered, not on the merits but on the basis of special favors done to certain Members.

My staff has indicated there is yet another one of these in the bill, and it has to do with so-called specialty hospitals or, as they are referred to in the legislation, physician self-referral hospitals, that have physician ownership.

Just a little bit of background on this. The Hospital Association that is primarily representative of the community hospitals has been pleading for a long time that they are not adequately reimbursed, and we need to try to help them. I have been an advocate for that. I have tried to help them, for example, for reimbursement in the care provided to illegal immigrants, and we were successful in that.

But one area I departed from that is when they concluded the best way to help themselves was to hurt their competition. At that point I said no. Their competition is the physician-owned, self-referral hospitals. These are generally specialty hospitals in a community that provide very good care. While they do in one sense provide competition to the community hospitals, they are all in the same boat in terms of the kind of reimbursement that Congress provides. What I have said is you should not solve your problem by hurting your competition but having Congress solve the problems that affect you both. I have been willing to try to help on that.

In this legislation what they have done, they struck a deal with the Hospital Association to stop the competitors, the physician self- referred hospitals, from building any more hospitals. You have to be under construction by a certain date under the bill--it is February 10, 2010. You have to have a provider agreement in operation--that is the technical term--or else you cannot go any further with your new physician self-referred hospital. That is going to hurt a lot of communities. It turns out that some of the communities hurt were in a particular State, the State of Nebraska.

Again, I have an affinity for Nebraska because I was born there, and I know a lot of people there. The Senator from Nebraska, Mr. Johanns, a little bit earlier today said he didn't think the special deals that were created for the State of Nebraska were appreciated by Nebraskans who stand more on principle and have the view that if something is bad for Nebraskans and it is bad for the folks in other States, therefore it ought to be solved for all of the States, not just for the State of Nebraska.

It turns out that is the case with this particular provision on page 332 of the Reid so-called managers' amendment, which would extend the date on which a hospital may have physician investment and a provider agreement in place for the purpose of being grandfathered. That date was extended until August 1, 2010.

It turns out that helps, at least according to staff, at least three hospitals in the State of Nebraska--one in Omaha, one in Kearney, and one in Bellevue. In fact, I will just quote briefly from an article that Robert Pear of the New York Times did on this.

The Senate health bill, would impose tough restrictions

like the one passed by the House last month, would impose

tough new restrictions on referrals of Medicare patients by

doctors to hospitals in which the doctors have financial

interests. The package assembled by Mr. Reid would provide

exemptions to a small number of such hospitals, including one

in Nebraska.

He goes on to describe this and then quotes Molly Sandvig, executive director of Physician Hospitals of America, which represents doctor- owned hospitals, who said the change would benefit Bellevue Medical Center, scheduled to open next year in Bellevue, NE.

Under the proposal Ms. Sandvig said, ``doctor-owners can

continue to refer Medicare patients to the hospital'' in

eastern Nebraska.

``Senator Nelson has always been a friend to our

industry,'' she said. ``But doctor-owned hospitals in other

states were not so fortunate. They would not meet the August

1 deadline.''

I would like to help all the physician-owned hospitals. I agree that all of them should have the same kind of support that was gained by the Senator from Nebraska for three specific hospitals in Nebraska. I understand, by the way, that three or four hospitals in Arizona would also benefit from that. I think that is a great thing.

But instead of just benefiting the hospitals in a few States by moving the date back to where you catch the ones in the State of Nebraska, we ought to eliminate this requirement altogether because what you are going to do is prevent more competition from very high- quality hospitals in communities that can provide a real service to constituents in all of our States, not just one State.

It is just one more example, I say to my friend from Tennessee, that the more we read the bill and learn what is in it, the more we find that the 60 votes for it were obtained less by persuasion and on the merits of the bill than by special provisions that were inserted to assist folks in particular States.

As I said, I think if something is good for one State, it ought to be good for all States. If it is not good for one State, it ought not be a requirement on the other States as well.

Mr. President, I appreciate the comments my colleague from Montana made. I think the point my colleague earlier was trying to make was that we just got the bill yesterday and have not gotten a full CBO or final CBO score; that the correction simply revealed the fact there is a lot there to digest, and we ought to have more time to understand exactly how the interrelated pieces of the bill work, how all the CBO scoring relates, and so on. When CBO can make about a $600 billion error, as I understand, that is a big error. So there is probably more and a lot we don't understand. It would be helpful if we had more time to understand this and how it all works, and that was the point my colleague was making, I believe.

But I do appreciate my colleague pointing out it is better we work in good faith and, for the most part, I certainly recall the long conversations the ranking Republican, Senator Grassley, and the chairman of the committee had. I know they worked in good faith, and it would be best if we did that. It is to that end I wish to speak to some comments a colleague made earlier today.

I don't know whether it is frustration or maybe just the lens through which partisans view things and their opponents, unfortunately, that spawned the remarks earlier today from one of our Democratic colleagues, but in either event, his characterization of his Republican colleagues, I think, requires response.

He began by talking about the malignant and vindictive passions that have descended on the Senate. Here is what he said, and I am quoting:

. . . too many colleagues are embarked on a desperate, ``no

holds barred'' mission of propaganda, obstruction and fear.

History cautions us of the excesses to which these malignant,

vindictive passions can ultimately lead. Tumbrils have rolled

through taunting crowds, broken glass has sparkled in

darkened streets, strange fruit has hung from southern trees.

I couldn't believe my ears, these references to Kristallnacht, one of the first and most vicious attacks on the Jews by the Nazis, and hanging of Blacks. The majority leader's remarks last week, comparing the Republicans' position on health care to the proslavery movement, remain largely ignored as the clumsy, offhand remarks of a partisan, but the references earlier today appeared not to be off-the-cuff mistakes but prepared text, deliberately delivered by one of the brighter minds of the Senate.

Our colleague went on to acknowledge, and I quote again:

. . . that in the heat of those vindictive passions, some

people earnestly believed they were justified. Such is the

human capacity for intoxication by those malignant and

vindictive political passions.

Well, yes, Republican Senators do believe our position is justified-- in fact, correct. There are honorable people on both sides of the aisle who obviously have to agree to disagree. But our colleague attributes no good motive to Republicans, whose passions are simply ``malignant and vindictive.'' He adduces evidence to support his claim. First, an unnamed editor of the Manchester Inquirer who wrote that the GOP ``has gone crazy'' and an unnamed economist who believes our party has been taken over by the ``irrational right.'' A Philadelphia columnist talked about ``lunacy on the Republican right.''

Further quoting now: `` . . . it has gone crazy, is more and more dominated by the lunatic fringe and has poisoned itself with hate.''

I wonder if my colleagues believe our position is animated by hatred. Why else would we oppose this legislation? Well, he answers that question too. It is because, he says, first of all:

. . . to break the momentum of our new young President. They

are desperate to break this President. They have ardent

supporters who are nearly hysterical at the very election of

President Barack Obama--the birthers, the fanatics, the

people running around in right-wing militias and Aryan

support groups. It is unbearable to them that President

Barack Obama should exist. That is one powerful reason. It is

not the only one.

Well, talk about vindictive passions. Does my colleague believe that is why I oppose the legislation--or my colleague John McCain? I hate to disappoint some folks, but I don't care about the political fortunes of the President, at least not right now. I may about 3 years from now. I don't like this bill. That is why I oppose it.

My colleague says there is another reason. He says it is the ``insurance industry,'' which he proceeded to demonize. I am not one to defend the insurance industry, but it is strange to see it so demonized by my colleague, whose party brags of getting another 30 million people insured by what? The insurance industry. Why subject these folks to such awful torture? But the real irony is, the legislation which we oppose, the insurance industry supported. It made a deal with the Obama administration and key Senate Democrats: You mandate that every American has to buy one of our policies, and we will support your bill. There was a deal all right, but it was between the insurance industry and key Democrats. The insurance industry obviously didn't dictate the Republican position, which largely opposes the individual mandate.

Well, finally, our colleague also accused Republicans of engaging in something else. He said we were engaged in a:

. . . campaign of falsehood about death panels and cuts to

Medicare benefits and benefits for illegal aliens and

bureaucrats to be parachuted in between you and your doctor.

He went on to state:

Our colleagues terrify the public with this parade of

imagined horrors. They whip up concerns and anxiety . . .

then they tell us the public is concerned about the bill.

So the reason the public is opposed to the bill is because of the power of Republican Senators to terrify our constituents about imagined horrors. Let us look at the examples given.

I don't know of any Republican Senator who has characterized the health care rationing as coming from death panels. I heard that phrase in another context. We have tried to discuss the provisions of the bill we believe do result in rationing. The chairman of the committee and I have had a lot of debate on this subject. I wish Senator Roberts and I could offer a couple of the amendments we wanted to offer to make sure there is no rationing in the bill. I think it is a real problem and should be debated on its merits.

The benefits for illegal aliens, I suspect he was referring there to the House debate, but it is still the case that there are completely inadequate provisions in the bill to verify eligibility for benefits. You can even apply by telephone, so just about anybody could apply for some of the benefits.

Third, the matter of Medicare benefits. I don't think we are terrorizing our constituents about Medicare benefits, unless they understand the facts, and the facts are that Medicare benefits are going to be cut. The Congressional Budget Office says the Medicare Advantage benefits are going to be reduced from a monthly actuarial value of $135 down to $49 a month. That is CBO saying there is going to be reduction in the benefits for those who have the private Medicare Advantage policies. That includes dental, vision, hearing, vision care, fitness, and a variety of other programs.

We have had a semantic debate in this Chamber between those who say: Well, the fundamental benefits of the Medicare law are not specifically eliminated or reduced in the legislative language of the bill. That is true. But what is also true is, the additional benefits in Medicare Advantage are being reduced. That is unassailable. It is also true--and CMS, for example, refers to this--that enrollment is going to be reduced because of these reductions in benefits. They talk about the lower benchmarks, and they say when it is fully phased in, enrollment in Medicare Advantage plans would decrease by about 33 percent. So this is not some kind of fantasy. This is taken from the Congressional Budget Office and from the CMS Actuary.

Finally, in addition to the Medicare Advantage, the Actuary says simulations by the Office of the Actuary suggest that roughly 20 percent of party providers; that is, hospitals, nursing homes, home health care, would be unprofitable within the 10-year projection period as a result of productivity adjustments. That means they would go out of business. Obviously, senior care is going to be affected by this legislation, and we believe negatively so. That is an honest debate to have, and it is one which we would like to have.

But, finally, my colleague turned the world upside down by arguing the only reason we are here the week before Christmas is because of Republican bad behavior; that we ruined the holidays for the professional staff because we followed the procedures of the Senate that require the reading of the bill.

It is true that requirement is usually waived, but then we usually have plenty of time to know what is in a bill. Usually, a bill works its way through committee and both parties know what is in it. We both help to write the bill. It is transparent. It is usually printed long before it comes to the Senate floor so we know what is in it. The reason it was read was so our staff would, in fact, have time to read it, to advise us--because we didn't all have time to read it ourselves--and to advise the public, our constituents, of what is in it. Again, we received it yesterday and we are voting on it tonight. That is very little time to know everything that is in there.

The more we learn about what is in there, the angrier a lot of people get. The special deals for one State, for example, are simply wrong. That is why you take time to see what is in it. The majority of the public, according to opinion polls, want us to take more time to understand what is in this bill.

A final point on this. I have to say, the majority leader dictates the schedule of the Senate. All Senators are pretty much equal, but the majority leader has two things he can do and only he can do. He has the right of first recognition, and he has the right to set the schedule. By the schedule, I mean when he files a cloture motion, which is what brings this bill to the floor or this amendment to the floor. When he files the cloture motion, that is what determines when the vote will be. He determines when to bring the Senate back in session. Under the rules, an hour after he brings us back in session, the cloture motion ripens and we have a vote.

He can set that time at any time. He can say tomorrow morning, at 9 a.m., the Senate will come back in session and we will vote at 10 a.m. The leader could do that. That is his right, and he is the only one who has the right to do that. But instead, he says we will come in at 1 minute past midnight tonight. Therefore, the vote will be 1 minute past 1 a.m. tomorrow morning. It is his right to do that.

We didn't do that; he did that. He is the only one who has the right to set that schedule. If he wanted to set a schedule that was a little more convenient for all the Members--including our dear friend, the Senator from West Virginia, who is ill and indeed does have to get out of a bed to come in a wheelchair to this Chamber--the majority leader has it within his power to say we will do it at a more convenient time.

Why would he do it in this way? Because he has deliberately decided-- and all majority leaders have not done quite this but have done similar things--to set a recess and then work us up against the recess so we will have an incentive to finish. It is usually a pretty good incentive. Certainly, going home for Christmas is a big incentive. So the majority leader figures, if he can schedule this bill and the various votes in such a way that we end up voting on it on Christmas Eve, that maybe then we will hurry up and try to do it because, as one Democratic staffer is quoted as saying: ``We need to hurry up and pass this bill because the longer it hangs around the harder it will be''-- meaning to pass it. That is true. The more the public finds out about it, the less they like it.

So the majority leader is trying to get it done as quickly as he can, and ``as quickly as he can'' means scheduling us for a vote 1 hour after we come

in. Since there has to be an intervening day--and today is the intervening day--tonight, at 1 minute after midnight, we will reconvene for the next day and then have the vote at 1 a.m. It is purely the majority leader's decision to do it that way. Republicans have nothing to do with it.

If I had my way, we would vote at 10 o'clock in the morning. But that is not the way it is going to be. So please don't say it is Republican bad behavior that results in having to vote on this bill late at night. The process is determined by the majority leader.

I guess I am going to conclude by saying I don't believe this bill can be sold on its merits, and I think that is another reason why we have to hurry up and do it--before the public figures out what is in it. The public opposes this bill not for the reasons imagined by my colleague but because it will cut Medicare benefits, it will increase insurance premiums--not cause them to go down--it will raise taxes, put the government in charge of too much, it will cost trillions of dollars, and it will result in the delay and denial of care. That is why the majority of Americans want us to start over and address the problems on a step-by-step basis.

I was amused by my counterpart, the Democratic whip, saying Republicans have only offered four amendments. I think it was seven but say it is four. Guess who determines how many amendments we get to offer? The majority leader. He sets that schedule as well. He says now it is our turn to offer an amendment. Then it is your turn. The way he managed the schedule, we only got to file either four or seven amendments. We have 200 amendments pending. We would love to get as many of these pending and voted on as possible. Believe me, it is not Republicans who don't want to vote on our amendments. The majority leader, again, has set the schedule.

This is why we oppose the bill. It is why we don't like the process. We respect what our constituents are telling us. We believe this bill will be bad for them, and it will be bad for our country. Our Democratic colleagues have a different position. Neither their position nor ours is malignant, nor should they be expressed vindictively.

Mr. President, a lot of attention has been paid to the position of the senior Senator from Nebraska on this legislation. Page 98 of the amendment provides that the State of Nebraska is carved out from being responsible for paying for additional Medicaid patients added under the bill. It is the only State explicitly carved out from this requirement.

I address this as well to the chairman of the committee.

I ask unanimous consent that the pending amendment be set aside and it be in order to offer an amendment to extend to all States the same benefit that provides 100 percent Federal funding to the State of Nebraska for their expanded Medicaid Program. This would give the same treatment to other States that currently only Nebraska would enjoy under this bill. If the bill is a good thing for all States, then it seems to me it should be applied equally to all States.

The following Senator is necessarily absent: the Senator from New Hampshire, Mr. Gregg.

The following Senator is necessarily absent: the Senator from New Hampshire, Mr. Gregg.

The following Senator is necessarily absent: the Senator from New Hampshire, Mr. Gregg.

The following Senators are necessarily absent: the Senator from Wyoming (Mr. Enzi) and the Senator from Georgia (Mr. Chambliss).

Mr. President, the argument that the chairman of the Finance Committee made reminds me of a story told in law school of the fellow accused of murdering his parents. He pled for mercy on the court since he was an orphan.

I asked the chairman of the committee numerous times this year to address this problem, and the response always was: We are too busy. We are too busy with health care was the usual response. Now we find ourselves at the end of the year, and it is odd that the chairman argues that we have a big emergency on our hands and we have to act.

It is not as if we have not known this issue was out there. Nor, as Senator Bingaman just suggested, has it been a big mystery that the rate on the estate tax was going to go to zero next year. That is the 2001 law. We have known that for years.

Frankly, people have applauded the fact there is not going to be an estate tax next year. The only problem is if the people on the other side of the aisle intend to repeal that law so we do have an estate tax. I know that is their intention. They are creating the confusion because the law has been known about for 10 years that we are going to have a zero rate. Now all of a sudden they say we cannot let that happen. We are going to have to change it next year. Since we think we may be able to do that, we should extend what we have right now and not let the zero rate take hold.

I suspect the great dilemma that is being posed is one most folks would love to have as a problem. The dilemma being proposed is that if the rate goes to zero and the heirs of the property decide to sell the property at some point, they will have to pay a capital gains tax. That is just fine. That is what most people would like to do.

Since this income is taxed twice--it is taxed once when you make the income, then it is taxed again if you have any of that left over when you die--that is unfair. What we have always argued is that the estate tax, therefore, should go away and just leave the existing Tax Code where it is, which says: If somebody inherits property and later sells that property, sure, they should pay a capital gains tax on it. I would think most people would think that is a pretty good deal.

The capital gains tax is 15 percent; whereas the estate tax under the proposals of my friend from Montana would go to 45 percent. As between paying 45 percent and 15 percent, I think it is pretty clear what most small business folks and farmers would like to do.

Of course, the original basis of the property is the basis for paying the tax. Again, if you put that question to small business folks or farmers, they would tell you they would rather pay the capital gains tax than they would an estate tax of 45 percent.

Mr. President, I ask unanimous consent to have printed in the Record at the conclusion of my remarks an editorial from the Wall Street Journal from December 11 called, ``The Tax That Won't Die, Death Blow, Night of the Living Death Tax, Estates of Pain.''

Mr. President, among the things pointed out in this editorial, they say:

We've long argued that the economically optimal and fairest

death tax rate is zero. The tax is applied to income that was

already taxed when it was earned, so it is a double tax on

savings and capital. The correct way to tax a gain in the

value of assets bequeathed to an heir is with a capital gains

tax of 15 percent when the assets are sold, rather than at

the time of the funeral of the original owner.

I think that says it all. I hope the problem my friends are so concerned about--first of all, they recognize a problem they themselves manufactured by not getting around to doing anything about this until the eleventh hour. Second, it is a problem that does not have to exist if they will leave the existing law alone and let the rate go to zero, which is what everybody wants it to be.

Sure enough, if your heirs sell property after that, they will have to pay capital gains. Ask them what they would rather do--pay a 15- percent rate or a 45-percent rate. I think the answer to that is pretty clear.

Exhibit 1

[From the Wall Street Journal, Dec. 11, 2009]

The Tax That Won't Die

Well, the moment of truth has arrived, and House Democrats

recently voted 234-199 to cancel the 2010 repeal and hold the

rate permanently at 45% with a $3.5 million exemption. Senate

Majority Leader Harry Reid now wants to do the same. But to

suspend the Senate's health-care debate and turn to the

estate tax, he needs 60 votes. All Republicans and some

Democrats are saying no. Blanche Lincoln of Arkansas and Jon

Kyl of Arizona will accept no more than a 35% permanent rate

with a $5 million exemption.

We've long argued that the economically optimal and fairest

death tax rate is zero. The tax is applied to income that was

already taxed when it was earned, so it is a double tax on

savings and capital. The correct way to tax a gain in the

value of assets bequeathed to an heir is with a capital gains

tax of 15% when the assets are sold, rather than at the time

of the funeral of the original owner.

Study after study, including one co-authored years ago by

White House economist Larry Summers, finds that a powerful

motivation for entrepreneurs to grow their businesses is to

pass that legacy to their children. The left disparages this

as building ``family dynasties,'' but most Americans think

that it is immoral for the government to confiscate the

fruits of a life's effort merely because of the fact of

death.

Democrats also say their rate would apply only to the

richest 2% of estates. But a new study by economists Antony

Davies and Pavel Yakovel of Duquesne University finds that

the estate tax ``impacts small firms disproportionately

versus large firms'' by encouraging well-capitalized

companies to gobble up smaller ones at the owner's death. The

study shows the result is to ``promote the concentration of

wealth by preventing small businesses from being passed on to

heirs.''

Republicans and willing Democrats shouldn't give up on

eliminating the death

tax. The Kyl-Lincoln amendment to create a permanent 35% rate

is far better than the confiscatory House bill. But the best

strategic outcome now is to let the death tax expire in

January as scheduled under current law, and return to this

debate next year when the tax rate is zero. Then let liberal

Democrats explain to voters on the eve of elections that they

must restore one of the most despised of all taxes.

The following Senator is necessarily absent: the Senator from Oklahoma (Mr. Inhofe).

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

Mr. President, I want to speak in favor of the Crapo motion, which we will be voting on in a few hours.

The Crapo motion would essentially protect the American middle class from tax increases in this bill. The President promised that nobody making under $200,000 a year, or families making under $250,000 a year, would see tax increases under the bill. But they do.

The Crapo motion would simply send the bill back to the Finance Committee and make sure that they don't. It is a fairly straightforward amendment, and we should support it.

In supporting the motion, I will discuss other things related to it. There is this notion that somehow or other the health care bill will save money for the government and for taxpayers and patients. That is where it is wrong. That is why we need things such as the Crapo motion.

How does the expenditure of trillions of dollars in new spending save anybody money? That is counterintuitive. The answer is, of course, that it doesn't.

Jeffrey Flier, dean of the Harvard Medical School, gives this bill a failing grade. He wrote in the Wall Street Journal:

The Democrats' health care bill wouldn't control the growth

of costs or raise the quality of care.

I think that is the fact. So let me point out a couple of the bill's provisions that undermine this savings argument, one of which is the new taxes, which the Crapo motion would explicitly address, The new subsidies that fail to address costs, and finally this inclusion of the CLASS Act, which is a massive new expenditure and entitlement that would grow out of control over time.

First, though, let me focus on these new taxes, 12 in total. They go into effect immediately. In fact, the Internal Revenue Service estimates it would need between $5 billion and $10 billion over the next 10 years just to oversee the collection of these new taxes. Think about that.

These new taxes include, but are not limited to, a new payroll tax on small businesses. What better way to kill job creation. We will impose another \1/2\ percent tax if you hire somebody or all the people you retain on the payroll. That is crazy at a time when we are trying to create new jobs. There is a tax on seniors and the chronically ill. I discussed that yesterday. There are new limits on health savings accounts which will increase taxable income for middle-class families, and a new medical device tax which will be paid for by American families, according to the Congressional Budget Office. In other words, if you need a health or lifesaving device, such as a diabetes pump or stent for your heart, why do you want to tax that if it provides better health care for you and your family? The reason is they need more revenue to pay for the expenses of the bill. They increase the taxes. CBO says they will be passed right through to the patients which are then passed through in the form of higher premium costs.

As I said, most of these taxes would start immediately and many would hit middle-income families despite the President's famous campaign pledge.

Washington, for a period of 4 years, piles up the money before it pays any of the money out. That is supposed to lower costs because for the first 4 years there are not any expenses. We are collecting all this revenue and somehow or another that is portrayed as a savings for the Federal Government.

Over the next 10 years that money is spent out, it is $2.5 trillion in spending, and that is not sustainable. This is part of the bill's gimmickry to create this idea that somehow the bill is deficit neutral. As I said, when you take a look at the true 10-year cost beginning in 2014 once the bill is fully implemented, you have a whopping $2.5 trillion pricetag.

Colleagues on the other side say: It is necessary to raise all this money to subsidize the increased cost of health care. I get it. We are going to raise premiums under the bill and then we are going to need to raise taxes to subsidize so people can afford those increased premiums. What sense does that make? I ask, do Americans want to pay more taxes in order to get a subsidy because of the increase in costs that are the result of this legislation?

Would they rather not have the premiums go up in the first place, as the ideas that Republicans have proposed would ensure? But that is what the bill does. It raises premiums so then you have to raise taxes to subsidize the cost of insurance.

What the Crapo motion would do is to say the President needs to keep his promise. Those making less than $200,000 a year should be relieved of this tax burden.

Secondly, if the government subsidizes insurance for 30 million more Americans, obviously costs have to rise. As the respected columnist Robert Samuelson wrote in a recent Washington Post column--by the way, the title was ``The Savings Mirage on Health Care'':

The logic is simple. . . . Greater demand will press on

limited supply; prices will increase. The best policy:

Control spending first, then expand coverage.

That is what Republicans have been proposing. We would like to target specific solutions to the problems of cost which would then allow more Americans to gain access to affordable health care and, thus, avoid a hugely expensive Washington takeover of the entire system.

Our solution includes medical liability reform--that does not cost anything; it saves money--allowing Americans to purchase insurance policies across State lines, allowing small businesses to pool their risks and purchase insurance at the same rates corporations do. These solutions would bring down costs and, at the same time, enhance accessibility.

Third--and the reason I raise this is because several colleagues on the other side of the aisle have made pretty firm statements about not being able to support this legislation as long as it included what is called the CLASS Act. This is a new government-run, government-funded program for long-term care. It is intended to compete with private insurers' long-term care plans. Notice the pattern of government wanting to compete with private entities. That is what the CLASS Act does.

Participants would pay into this new government system for 5 years before they would be allowed to collect any benefits. Naturally, you have some increased revenues for a while, and that is what the bill counts on in order to allegedly be in balance. Of course, the payouts occur later, and then it is not in balance. Participants would have to be active workers. So this new entitlement would not benefit either seniors or the disabled.

We are talking about a brandnew entitlement. If a worker begins making payments in 2011, he or she could not collect benefits until the year 2016. That is why supporters of the CLASS Act say this would reduce the deficits in between 2010 and 2019. Sure, if you don't spend money in those years and you collect a lot of tax revenues, of course you are going to have more of a surplus of revenues. What happens, though, when the claims on that money occur? It is like Medicare today: It is very soon out of money and then broke and then in a hole and then you have a big debt on your hands. That is precisely what happens here. No government program has ever reduced budget deficits, we know that.

The Congressional Budget Office confirms that this program will, indeed, add--add--to future budget deficits. Here is what the CBO writes:

The program would add to future federal budget deficits in

large and growing fashion.

It does not get any simpler than that. The CLASS Act would add to future deficits. That is why several of my colleagues on the other side of the aisle have said they cannot support the bill as long as the CLASS Act is in it. But the last time I checked, it is still in it.

I want to also refer to the chairman of the Budget Committee who has obviously spoken out on this issue because he understands the effect. I speak of Senator Conrad. He said it is like a Ponzi scheme because it offers returns that payments made into the system cannot cover in the long run.

As I said, it would generate generous surpluses for the government while Americans pay in and are not collecting benefits. And then later on, it reaches a point where payments made into the program cannot sustain the promised benefits.

Here is what CBO tells us about the program:

It would lead to net outlays when benefits exceed premiums.

. . .

``Net outlays'' means you are spending more than you are taking in.

[By 2030] the net increase in federal outlays is estimated

to be ``on the order of tens of billions of dollars for each

[succeeding] ten-year period.''

Over time, this program adds substantially to the deficit and to the debt. It is an entitlement that is not self-sustaining but has to be propped up in some fashion by additional revenues. It is another way, in addition to the first two ways I mentioned, of how costs go up in this legislation, how savings do not result, and how the American public has to end up making up the difference. You have new taxes to cover subsidies for increased premiums, government subsidies for 30 million Americans that increased demand without addressing costs, and finally, the inclusion of the CLASS Act.

As I said, I support the Crapo motion because it would assure that none of these burdensome new taxes would hit middle-income families as they are set to do. This amendment must pass if President Obama is going to keep his campaign pledge to not raise taxes ``one dime'' on middle-income Americans.

I also support the soon-to-be-pending Hutchison-Thune motion which says that no taxes at all should be levied until Americans see some benefits. This addresses that problem I noted where you collect the taxes up front and then you start paying benefits at a later date. This is an expression of disapproval for the budget gimmickry contained in the bill.

Americans want us to bring costs down. They could not be more clear about that. But the provisions of this bill disobey the wishes of the American people. That is why in public opinion surveys--it does not matter who takes them--they are increasingly showing that the American people are opposed to this legislation. The latest one by CNN just a few days ago--and CNN is not noted to be a big conservative organization--shows that 61 percent of the American public oppose the health care plan. And now only 36 percent support it. That is getting close to two to one in opposition.

An earlier poll showed that among Independent voters, by more than three to one, they oppose what is in this legislation. The point here is not some peripheral issue--and I do not mean to demean the importance of the issue when I talk about, for example, the public option for the government-run insurance plan. The abortion language certainly is a key issue to many. Even if you could somehow fix those problems, you still have the core of the bill that the American people object to: the $\1/2\ trillion in cuts in Medicare, the $\1/2\ trillion in increases in taxes that are meant to be addressed by the motion I am speaking of, the requirement that because premiums go up under the legislation, you have to raise taxes to create a subsidy so you can give it to people so they can afford the increased premiums.

Something we are going to be talking about in the future and have hardly addressed but to me is probably the most pernicious thing of all--you can talk about the government takeover, you can talk about the additions to the debt, the taxes, the increased premiums, all of these things, the cuts in Medicare--to me the most pernicious thing of all is the fact that it is unsustainable. The promises exceed the revenues with the net result that over time, care will have to be rationed.

This is what I think the American people fear most of all because they know you cannot sustain a program this costly and not have to at some point begin to delay care, delay appointments so they do not occur as rapidly and gradually begin to denying care. That is why this big kerfuffle about the commission that made recommendations on breast cancer screening and mammograms was so frightening to people. They could see this was the way rationing begins. Some panel says we don't think people need as much medical care as they have been getting, never mind what has been recommended in the past. Yes, by the way, it will save money.

Of course, when politicians have to find a way to reduce benefits, they do not go to their constituents and say: We are going to cut your benefits. What they do is reduce the payments to people who provide the health care--

the doctors, hospitals, home health care, hospice care, these folks. They reduce payments so that the providers have no choice but to reduce the amount of their care.

They have to see more patients, there are not as many of them, and they are getting paid less. So naturally they cannot provide the same level and quality of care. That is how rationing begins. Ask people in Canada, ask people in Great Britain how long it takes to get in to see the doctor. Eventually even that does not cut it. So they set a budget and say: We cannot afford to pay any more than that.

You better hope you get sick early in the year. That is, unfortunately, what you can see to an extent in our veterans care but even more in our care for our Native Americans. I did not make this up. Others have said in the Indian Health Care Service, get sick early in the year because they run out of money if you get sick late in the year.

Our first obligation ought to be to ensure our Native American population receives the care we have promised them. I personally have gone throughout Indian reservations in Arizona. We have more than any other State. I made a tour of the Navajo reservations, including a lot of the health care clinics and facilities that try to take care of folks under the Indian Health Service. None has enough money to do what they are supposed to. They are understaffed. The people who are there are wonderful, dedicated health care providers. They are doing their best. But you ask any of the Native Americans whether they believe they are getting the care they are supposed to get under the program, and the answer is uniformly no. They have to wait forever. The care is not there when they need it.

This is the perfect example of rationing of care, what happens when you have a government-run system. That is what I fear most of all will result from this because we have taken on much more than we can afford.

The end result of that inevitably is the reduction in the amount of care that is provided and the quality of care that is provided.

I urge my colleagues to think very carefully about what we are getting our constituents into. We can start to turn this back by supporting the Crapo motion which at least says that folks who are middle-class families, who the President promised would not see a tax increase, will not see a tax increase under the legislation. That is what the Crapo motion would provide, and I certainly hope my colleagues support it.

Mr. President, if there are no other Senators seeking recognition at this time, I ask that the Senate stand in recess under the previous order.

Thereupon, the Senate, at 12:45 p.m., recessed until 3:16 p.m. and reassembled when called to order by the Presiding Officer (Mr. Crapo).

The following Senator is necessarily absent: the Senator from Indiana (Mr. Lugar).

Mr. President, I ask unanimous consent that Senator Nelson from Florida be allowed to speak for 10 minutes; after that, that I be allowed to speak for 10 minutes; after that, that Senator Murkowski speak for 10 minutes; and after that, Senator Dodd. Following that-- Senator Murkowski for 20 minutes, I am sorry; and after that, Senator Dodd.

Mr. President, let me talk for a moment about one aspect of the health care legislation that has been of great concern to our Nation's Governors. The Presiding Officer can certainly appreciate the problem since, among other Governors and former Governors, the Presiding Officer had the responsibility of balancing a State budget with one of the largest obligations, being the payment for the Medicaid patients.

My Governor, Jan Brewer, of Arizona, was in town last week. She talked to me about the problem. She sent me a letter which, in a moment, I will ask to be printed in the Record. But as a result of that conversation, I wish to point out some things to my colleagues and hope we can revisit the legislation that is on the floor.

Incidentally, before we do that, let me note the fact that my colleague from Florida referred a moment ago to a filibuster. I wish to be clear. I presume he was not referring to Republicans filibustering the bill, since we have been asking to have votes on the pending amendment, which is the Crapo amendment, since 6 days ago when that amendment was posited. As a matter of fact, the Republican leader on Sunday finally had to file cloture on the Crapo amendment, which will ripen tomorrow morning, to end the filibuster the majority has been conducting.

I understand members of the majority have not been able to decide how to proceed. But in the meantime, we have not been able to vote on any pending amendments. Republicans would like to do that, would like to get some more amendments up and continue on with our debate on the bill. For a bill this important, we should have been able to dispose of a lot more amendments than we have. So lest anybody believe there is a Republican filibuster going on, I hasten to add that, of course, is not true.

Let me talk about the Medicaid features of this bill. It is against the backdrop of unemployment because, as you get more people on unemployment, you are going to have more people on the Medicaid rolls. Arizona's unemployment rate has risen 6 points just since June of 2007 and more and more of our people are, therefore, eligible for our Medicaid Program, which is known in Arizona as the AHCCCS Program.

Currently, one in five Arizonans is covered through AHCCCS; over 200,000 Arizonans have enrolled in AHCCCS since December 31. That is nearly 20,000 new enrollees every month. So we are talking about a substantial burden as a result of the recession we are in on our State government.

As my State and many others have had to deal with the challenges of the recession, declining State revenues, increasing need for certain State services, the last thing Washington should do is make things even harder for the States. Yet that is exactly what the Reid bill would do. The Reid bill would require States to expand Medicaid eligibility to all children, parents, and childless adults up to 133 percent of Federal poverty, beginning January 1, 2014, and there is even talk now of raising that to 150 percent of poverty. Moreover, the Federal government would only foot the bill for 3 years. In 2017, and in subsequent years, the States would have to help finance this expansion. The Congressional Budget Office estimates that $25 billion in new State spending would result in the Reid bill.

The Arizona Governor's office estimates this bill would require the State of Arizona to increase its costs by almost $4 billion, between now and 2020. The State of Arizona does not have that kind of money.

Just the so-called woodwork effect alone, meaning the number of currently eligible individuals who might enroll, would itself entail significant costs. There are about 200,000 Arizonans currently eligible but not all are enrolled in Medicaid. If only half those individuals would enroll, it would cost the State $2 billion, from 2014 to 2019.

As I said, our State simply doesn't have the money to do that. Our Arizona Governor wrote to Chairman Baucus stating her strong opposition to the Medicaid expansion. I ask unanimous consent that her letter, dated October 6, to Chairman Baucus be printed in the Record at the conclusion of my remarks.

Let me read a few key excerpts.

First:

Arizona cannot afford our current Medicaid program, despite

the fact that we have one of the lowest per member per year

costs in the country. Arizona's General Fund spending on our

Medicaid agency has increased by 230 percent over the past

ten years, rising from 8 percent of total General Fund

spending in fiscal year 1998-1999 to 16 percent ten years

later. As part of the solutions for our current year's budget

shortfall, we have had to reduce Medicaid provider

reimbursement by over $300 million and freeze institutional

reimbursement rates, resulting in an additional loss of more

than $60 million.

Despite these reductions, we are sacrificing other state

programs that impact the education, health and safety of our

children and our seniors in order to cover the growing costs

of Medicaid. Considering this, it is incomprehensible that

Congress is contemplating an enormous unfunded entitlement

mandate on the states. The disconnect between policymakers in

Washington and the reality of State and local governments is

disheartening.

Let me quote from some other colleagues of Governor Brewer's, Democratic and Republican Governors around the country who have made exactly the same point.

The newly elected chairman of the Democratic Governors Association chairman is Jack Markell of Delaware. He said:

We've got concerns . . . And we're doing our best to

communicate them. We understand the need to get something

done, and we're supportive of getting something done. But we

want to make sure it is done in a way that state budgets are

not negatively impacted. . . . But I believe all governors

are certainly concerned about what the potential impact is of

some of these bills.

Governor Rendell of Pennsylvania, who has been on television a lot and makes a lot of sense when he talks about this:

I don't think it's an accounting trick. I think it's an

unfunded mandate. We just don't have the wherewithal to

absorb that without some new revenue source.

Bill Richardson of New Mexico:

We can't afford that, and that's not acceptable.

Gov. Phil Bredesen of Tennessee said he feared Congress was about to bestow ``the mother of all underfunded mandates.''

He was referring to this Medicaid mandate.

Gov. Christine Gregoire of Washington State:

As a governor, my concern is that if we try to cost-shift

to the states, we're not going be in a position to pick up

the tab.

Bill Ritter, Democrat of Colorado:

Our only point was that a significant Medicaid expansion

should not operate as an unfunded mandate for the states.

Gov. Brian Schweitzer, Democrat of Montana:

The governors are concerned about unfunded mandates,

another situation where the federal government says you must

do X and you must pay for it.

Let me quote two more.

Gov. Ted Strickland of Ohio:

The states, with our financial challenges right now, are

not in a position to accept additional Medicaid

responsibilities.

Governor Perdue of North Carolina:

The absolute deal breaker for me a governor is a federal

plan that shifts costs to the States.

There are more and more I could quote. The point is, virtually all of the Nation's Governors have expressed a concern about this and have alluded in one way or another to the disconnect between Washington and the States. The point is, Washington seems to bark the orders but it is with no regard to the difficult financial challenge many of these States are in.

One final point. These new unfunded mandates generally mean higher taxes and significant payment cuts to safety net providers, just as Governor Brewer said, and ultimately the loss of jobs. This is the example I want to close with. Phoenix Children's Hospital was built to handle 20,000 emergency cases a year. It is a great hospital. It receives about 60,000 per year. Its capacity does not begin to match the need. To meet the demand--and by the way, more than half of these are Medicaid patients--the hospital built a new tower expected to open at the end of next year. Good news, right? Not exactly. The hospital has added up the State budget cuts Governor Brewer referred to, the payment cuts in the Reid bill I have referred to, and additional State cuts that will be needed to finance new Federal mandates, and concluded that the math doesn't add up. As a result, the Phoenix Children's Hospital informs me they will not be able to move into their new building. It would have generated 2,000 new jobs. What we do in Washington has real consequences. I submit the Reid bill spells disaster for States.

As we debate more and more features of this bill, each day we focus on something different in this legislation that creates a huge problem. Today's focus is on the problem that is focused on States because of the visit from our Governor. She is at her wit's end because they don't have the fiscal means of paying for this new unfunded mandate. She doesn't know what they will do if Congress ends up passing this. I urge colleagues, we have to find a way to not expand the Medicaid eligibility in a way that adds this new mandate on our States. Incidentally, if the Federal Government were to pick it all up, it simply transfers it to the citizens in the form of higher taxes they would have to pay in order to pay for the mandate that is laid off on to the States themselves. One way or another, this element of the bill has to be rethought.

I encourage my colleagues on the other side, figure out what you need to do to reach a vote so that we can actually vote on these amendments. Republicans are ready. We have been ready for a long time now. Whatever it is that is causing a problem within your conference, figure it out so you can reach agreement with the Republican leader and we can begin to take votes starting on the Crapo motion and then move on through other amendments we have, one of which is the amendment by Senators Hutchison and Thune, then an amendment by Senator Snowe, and then an amendment I hope we will be able to offer at some time to remove this unfunded mandate which the States cannot afford to pay for about which I have been talking.

I yield the floor.

Exhibit 1

Executive Office,

State of Arizona,

Phoenix, AZ, Oct. 6, 2009.

Hon. Max Baucus,

U.S. Senate, Chairman, Senate Finance Committee, Hart Senate

Office Building, Washington, DC.

Dear Chairman Baucus: I have been following the debate on

federal healthcare reform with interest, and I have been

working closely with members of Arizona's Congressional

delegation to make sure they are well informed about the

impact of the various proposals on our state. I am concerned

that the proposals under consideration thus far do not

consider the fiscal difficulties states are facing and are

likely to continue to face over the next few years. Like

many, I was particularly focused on the proposal that would

emerge from the Senate Finance Committee, and I hoped that

your plan would appropriately address state concerns. Given

the continued lack of attention to state issues in the

Chairman's Mark, I believe it is critical to provide you with

my perspective on the state of my state, and how your

proposal will impact Arizona.

By way of background, Arizona is wrestling with one of the

most challenging economic downturns in state history.

Arizona's economy is heavily focused on construction, real

estate and the service sector, all of which have experienced

declines that have combined to create a severe and lasting

recession. While experts are expressing reserved optimism

that the national economy may be turning the corner, it is

likely that states--including Arizona--will not feel that

turnaround for some time to come

For example, the revenue collections during the most recent

fiscal year for Arizona declined by 18 percent. Through the

first quarter of the latest fiscal period, revenues from our

three major tax sources have decreased an additional 10

percent. Our budget declines are contrasted with our rising

Medicaid enrollment, which has grown by 18 percent over the

past 12 months. At this time, one in five Arizonans is

covered through the Medicaid program and we expect Medicaid

enrollment to remain at elevated and unsustainable levels

through the near future.

Arizona cannot afford our current Medicaid program, despite

the fact that we have one of the lowest per member per year

costs in the country. Arizona's General Fund spending on our

Medicaid agency has increased by 230 percent over the past

ten years, rising from 8 percent of total General

Fund spending in fiscal year 1998-1999 to 16 percent ten

years later. As part of the solutions for our current year's

budget shortfall, we have had to reduce Medicaid provider

reimbursement by over $300 million and freeze institutional

reimbursement rates, resulting in an additional loss of more

than $60 million. However, budgetary savings cannot be

achieved solely through provider reductions. Arizona also

recently made the difficult decision to eliminate coverage

for 9,500 parents of children enrolled in our Children's

Health Insurance Program. Looking forward to fiscal year

2010-2011, we know that further reductions will be necessary.

Despite these reductions, we are sacrificing other state

programs that impact the education, health and safety of our

children and our seniors in order to cover the growing costs

of Medicaid. Considering this, it is incomprehensible that

Congress is contemplating an enormous unfunded entitlement

mandate on the states. The disconnect between policymakers in

Washington and the reality of state and local governments is

disheartening.

These are realities that many states across the country are

facing. Arizona's situation, however, is compounded by the

fact that we have already expanded our Medicaid program to

all residents with incomes under 100 percent of the federal

poverty level (FPL). This decision means that, under your

proposal, our state will be unable to take advantage of the

higher level of federal funding that will be provided to

states that have not enacted similar expansions. In essence,

the Chairman's Mark penalizes Arizona for its early coverage

of non-traditional Medicaid populations, like childless

adults.

I must also point out my concern that estimates developed

at the federal level do not accurately reflect the costs that

states will ultimately bear. While I have great respect for

the Congressional Budget Office (CBO), in this instance, its

estimates are substantially below Arizona's fiscal estimates

and I believe they understate the cost of expansion. For

instance, the CBO analysis estimates the State cost of the

Medicaid expansion and ``woodwork'' to be $454 million.

Arizona has an estimated 200,000 citizens below 100 percent

of the FPL that are currently eligible for Medicaid, but not

enrolled. If only half of those individuals enrolled, the

cost of this ``woodwork'' effect alone would be over $2.0

billion for FY 2014 through FY 2019, using the traditional

Medicaid match. That is a significant difference for just one

small state.

I want to reiterate my opposition to these unfunded

mandates on states. I implore you to bear in mind the fiscal

realities states are facing as we attempt to maintain

responsible balanced budgets while preserving services for

our most vulnerable residents. I hope you find this

information useful as you consider the various proposals

before you, and please do not hesitate to contact my office

should you require additional information.

Sincerely,

Janice K. Brewer,

Governor.

The following Senators are necessarily absent: the Senator from Missouri (Mr. Bond), the Senator from Kentucky (Mr. Bunning), the Senator from Oklahoma (Mr. Coburn), the Senator from Oklahoma (Mr. Inhofe), and the Senator from Ohio (Mr. Voinovich).

Further, if present and voting, the Senator from Kentucky (Mr. Bunning) would have voted ``nay.''

The PRESIDING OFFICE. Are there any other Senators in the Chamber desiring to vote?

Mr. President, given the season, maybe we should spend a little time talking about what Americans are wishing for Christmas. I don't think very many people in the Chamber have had much chance to go do their Christmas shopping. At least maybe we can consider what folks are telling us they would like to have. We have certainly heard it. They want jobs. They want the economy to improve. They want meaningful health care reform that will drive down costs and increase their access and avoid harming a full economic recovery. What they don't want is to be burdened with a litany of new taxes. Unfortunately, the health care bill we have been debating is layered with new tax after new tax.

What I hope is that the majority will eventually agree to considering more amendments, including, for example, amendments such as the Hutchison-Thune amendment which will limit the taxes in this bill, taxes that will hit families, seniors, the chronically ill, small businesses, those who use flexible spending accounts, and those, for example, who use medical devices. In total, there are 12 new taxes in this bill, many of which will take effect right after the bill passes, though the other components will not go into effect until 2014. The Internal Revenue Service estimates it would need between $5 and $10 billion over the next 10 years to oversee collection of these new taxes.

Americans know their taxes are going up if this bill passes. In fact, 85 percent believe that will happen, according to a new CNN poll. They are right. Surely that helps to account for the fact that a full 61 percent disapprove of the bill, according to that same poll, with just 36 percent supporting it. Think of that, a CNN poll, brand new, 61 percent of the American people oppose the bill, only 36 percent support it. Every week, the numbers get worse.

I spoke recently about the adverse impact of a new payroll tax on job creation, especially for small businesses. Today, I want to talk about how three additional taxes would hurt Americans: one, the new tax on the chronically ill; two, a new tax on flexible spending accounts; three, a new tax on medical devices.

First, let's talk about the chronically ill. These are the sickest Americans, the chronically ill and seniors who tend to have more medical problems. These folks would be hurt by a change in the Tax Code that actually raises the amount of money they owe the Federal Government every year.

Here is how it works. Currently, taxpayers can deduct the costs of their catastrophic medical expenses if those expenses exceed 7.5 percent of their income. The bill would raise that threshold to 10 percent. So people, especially seniors and the chronically ill, would have to spend a lot more of their own money on these kinds of expenses before they could begin to take advantage of a tax deduction.

The Joint Committee on Taxation says this change would cost taxpayers more than $15 billion over the next 10 years. We are talking about a lot of money. It would raise taxes on 5.8 million taxpayers, 87 percent of whom earn under $100,000 a year. So we are not talking about, for the most part, the wealthy. In fact, because of this problem, the Nelson amendment was adopted in the Finance Committee that would at least exempt seniors until the year 2016. Obviously, it isn't only seniors who pay the tax. Secondly, we don't want to impose it on them after 2016 either.

According to the CRS:

The deduction can ease the financial burden imposed by

costly medical expenses. For the most part, the federal tax

code regards these expenses as involuntary expenses that

reduce a taxpayer's ability to pay taxes by absorbing a

substantial part of income.

That is certainly true. Many people rely on this deduction to offset expenses beyond their control.

Under the Democratic bill, 5.8 million of the sickest Americans would get a bigger tax bill from Uncle Sam. That is not reform.

The second new tax is on flexible spending accounts. Many Americans with these flexible spending accounts would see a tax increase under the bill. How does that work? Under current law, employees can make a tax-free contribution to a flexible spending account in order to pay out-of-pocket expenses for medically necessary goods and services, things such as diabetes testing supplies, orthodontia bills for braces and tooth repair, to name a few. Right now, there is no limit on these contributions to the FSA. Most employers who offer the FSA peg it at about $5,000. The bill would cut that in half and limit by law the amount the employers could contribute to $2,500. Why? That means families would pay taxes on medical expenses in excess of that amount. That is the reason. They need more revenue under the bill. This is a very clever backdoor way to get it, limit the amount the employer can contribute to your FSA, so you end up having to pay more taxes on things that are important to your health care and that of your family.

The Joint Committee on Taxation estimates this provision would cost taxpayers $15 billion over 10 years or, to put it another way, it is one of the ways they raise revenues in the bill to pay for the high cost of the legislation, another $15 billion.

Who would be affected by this increase? The Employers Council on Flexible Compensation estimates that the median income for the 35 million Americans holding FSAs is $55,000. That is the median income-- half are above, half are below. Think about that. Half the people who would be impacted by this make less than $55,000 a year. Many middle- income families will lose money on medical expenses because of this provision.

Finally, the medical device tax. The Democratic bill imposes an annual nondeductible tax on medical device makers that would cost $20 billion over 10 years. The reason for this, again, is to generate revenues to pay for the high cost of the bill; otherwise, why would you tax something that can be a lifesaver for people? I have said before that I could see, I suppose, taxing liquor or tobacco, but why would you tax this? This helps save lives. Thousands of products-- wheelchairs, surgical equipment, contact lenses, stethoscopes, hospital beds, artificial heart valves, diabetes testing equipment--all of these are the kinds of medical devices targeted by this tax. It will even hit cutting-edge technologies such as CT scanners. Why would we do this?

American taxpayers are the ones who will foot the bill for the tax because, according to the CBO, the medical device tax ``would increase costs for the affected firms which would be passed on to purchasers and would ultimately raise insurance premiums by a corresponding amount.''

Congress taxes a device manufacturer. They pass the tax on to the cost of the item that takes care of the individual. And since the insurance companies usually have to pay for that, their premiums go up to reflect the increased costs--another reason why, under this bill, insurance premiums don't go down, they go up. This tax means increased costs for health insurers, which in turn pass it on to patients in the form of higher premiums. This would go into effect immediately, even though subsidies for government-mandated insurance are not available until 2014. The net impact would be an $8 billion increase in patient premiums in 2010, 2011, 2012, and 2013, before any of the subsidies in the bill take effect. Is this really what we want--to drive up patient premiums with new taxes? We know those are not the kinds of reforms Americans are asking for.

To reiterate, the taxes I have discussed include a tax increase on the chronically ill and seniors, a tax increase on holders of flexible spending accounts, mainly middle-income families, and a tax on medical devices that would drive up insurance premiums.

Many of the 12 total taxes would take effect immediately even though the rest of the bill wouldn't take effect until the year 2014. That is part of the budget gimmickry used to pay for this Federal leviathan. Your taxes go up in 2010 but nothing to show for it until 2014. That is why the Democrats claim to have a budget-neutral bill that comes in at less than $1 trillion. Washington will be sitting on a pile of money 4 years in advance of full implementation of the bill. But when you take a look at the true 10-year cost beginning in 2014, the price tag is an astounding $2.5 trillion, a figure confirmed by the chairman of the Finance Committee.

Because I disapprove of these budget gimmicks and the imposition of these taxes, I support the Hutchison-Thune amendment, an amendment which says that new taxes will not be enacted until the rest of the bill is.

I urge my Democratic colleagues not to object to voting on the pending amendments and to take up additional amendments such as the Snowe amendment, which will come later, and the Hutchison-Thune amendment, which would at least address the problems I have discussed. The American people don't want a slew of new taxes for Christmas.

Mr. President, I want to speak for a moment about the vote we are about to take here to proceed with the so-called Omnibus Appropriations Act, H.R. 3288. This is the bill which for those who have not been following closely cleans up a little bit of a mess that the Congress has created because we did not do our work earlier in the year.

We are supposed to pass appropriations bills to run the government, to run the various Departments, and we did not get around to doing that. So right here, at the very end, we have to combine all kinds of those bills together in what is called an omnibus bill--six bills in total.

I find it ironic we are talking about a bill which is nearly $500 billion--to be exact, it is $446.8 billion in new spending--at a time when our national deficit is $1.4 trillion, the health care bill we are debating in its first 10 years of implementation is $2.5 trillion and, next week, we are going to be asked to raise the debt ceiling in this country by something like $1.8 trillion.

I saw a bumper sticker that said, ``Don't Tell Them What Comes After A Trillion.'' We used to think in billions. When I first came to Congress, millions were a big deal. Now we are talking trillions, and it is being tossed around as if it is nothing. Now another $\1/2\ trillion spending bill.

Well, obviously we need to run the government. But do you suppose the government could be a little bit like families and be a little bit prudent in how much it spends or how much it increases its spending over the previous year?

Let me give you some examples. The bill for Transportation and HUD receives a 23-percent increase over last year--23 percent. The State Foreign Operations bill receives a 33-percent increase over last year. Included in that bill is a 24-percent increase for the State Department's salaries and operations. A lot of Americans would like to see their salaries and operations increased by 24 percent. Commerce, State, and Justice receives a 12-percent increase over last year.

You might say, well, the government is in tough shape. We need, for some reason, to increase our spending by 33 percent. No, not with what is in this bill.

My colleagues have done a little bit of a check to see if there are any earmarks in this bill, for example. And guess what--5,224 earmarks and those earmarks alone are over $3.8 billion.

I gave some examples of those earmarks, and I do not want to embarrass any of my colleagues by citing them today. But I think it would be appropriate for us to at least have the opportunity to strike some of these earmarks and save a little bit of money. Because the argument is always made: Well, we can't save money. We have to keep spending what we are spending. There is nothing in there to cut.

There is a lot in there to cut. So the point I want to make to my colleagues here today, before we vote to proceed with this legislation, is we could do better. There is no argument that we have to spend 33 percent more on the State Foreign Operations bill or 23 percent more on what we call affectionately around here the THUD bill, when we have this deficit of $1.4 trillion, when we have to increase the national debt by $1.8 trillion, when we are talking about spending another $2.5 trillion, and that is just for the first 10 years of operation on the health care bill. I have not even mentioned the bills earlier this year--bailing out AIG, the insurance companies, General Motors, Chrysler, and the stimulus package, and well over $1 trillion when you add in the interest.

By the way, I did not mention interest. Part of the problem is we do not have this money. We are borrowing it. We have to borrow this money in order to pay it to these folks, and that means you have to pay interest. I have not even included the interest cost, which for all these bills amounts to several hundreds of billions of dollars.

There is a point at which, if you are talking about your own family and your own credit card, instead of asking the credit card company to expand the limit so you can put even more money on your credit card-- which is what we are doing here--you would start paying that credit card down and you would be a little bit more careful about your spending.

All I am asking is: Can't we be a little more careful about our spending so we do not have to increase Departments of government by 23 percent, 33 percent over last year's spending? I do not think that is too much to ask on behalf of our taxpayers.

Mr. President, how much time is remaining on our side?

Thank you, Mr. President.

Let me respond to my friend, the majority whip now. Two plain points. First of all: that Republicans also serve on the Appropriations Committee. That is true. If the majority whip, however, wants to defend this bill, that is his prerogative. He can do that. I have the right to vote against it.

I do not serve on the Appropriations Committee, and I do not think it is a good bill. There may be some Republicans who do. I did not contend this was strictly a partisan activity, but I said it was wrong. When our constituents, who pay the taxes in this country, ask us to be more frugal, we could be more frugal than this.

Secondly, undoubtedly, in a bill of almost $500 billion, there are good things. In fact, I know there are some good things in this bill. And I certainly suspect that the increase in veterans spending the majority whip referred to is probably supported by everybody in this body. That is the problem, however. When you do not do these appropriations bills one at a time, so you can vote on each one on its own merits, you are relegated to combining them into one giant bill. That is why it is called an omnibus bill, and you cannot differentiate between the things you support and the things you oppose. So what you have to end up doing is accepting all of the bad stuff in order to be able to support the good things.

That is a time-honored tradition around here. If you cannot get it all passed on its own merits, then bundle it up with a whole bunch of other stuff, and we will have to accept a lot of bad policy and bad spending because we do not want be accused of not supporting our Nation's veterans.

Some of us are willing to say--and I, in fact, have had this conversation with veterans before: Would you rather have us vote against a bill which includes veterans spending but is way more than we should be spending or vote for that bill simply because it has veterans spending in it? I used to have this conversation with veterans when I was in the House of Representatives because they always combine veterans spending with HUD, and it was hard to pass the HUD bill but easy to pass the veterans bill. That is why they did it that way. My veterans were very understanding when I voted against that bill.

We have to be a little bit more courageous around here and a little bit more honest with our constituents in the way we set these bills up, so we do not argue to them: Oh, you don't want to

vote against veterans, do you? No, nobody wants to vote against veterans. But if you get to the point in the year where you have not done your work, and you have to combine all these bills together--and you have some good spending, for example, for veterans, but you are also raising the State Department by 33 percent--I think a lot of folks would say: That is too much. And we could actually save money by being more discreet in supporting some things and opposing others.

That is why it would have been better if the majority could have gotten these bills to us one at a time rather than combined into one omnibus bill.

So, I do think, at a certain point in time, our constituents can demand of us more fiscal prudence, more responsibility in the way we vote. The only way Republicans have to oppose a process by which all of these things came together at once, and the only way other Democrats who wish to demonstrate their prudence in spending to their constituents can do that, is to vote ``no'' so we do not proceed to this bill, so we could try to break it apart and vote on veterans, if you want to vote for veterans, but not a 33-percent increase in the State Department bill.

I urge my colleagues to vote ``no'' and to do this in a more responsible way so we do not have to go home and say to our constituents: Well, we voted for a 33-percent increase in the State Department over last year. I know it is tough for you, but the State Department needed that money. So I hope you will forgive us for doing that.

I do not think we want to do that. I hope my colleagues will vote ``no.''

Project Attribution Correction

The following Senators are necessarily absent: the Senator from Missouri (Mr. Bond), the Senator from Kentucky (Mr. Bunning), the Senator from Oklahoma (Mr. Coburn), the Senator from South Carolina (Mr. Graham), the Senator from South Carolina (Mr. DeMint), and the Senator from Indiana (Mr. Lugar).

Further, if present and voting, the Senator from South Carolina (Mr. DeMint) would have voted ``nay'' and the Senator from Kentucky (Mr. Bunning) would have voted ``nay.''

The following Senators are necessarily absent: the Senator from Kentucky (Mr. Bunning), the Senator from Oklahoma (Mr. Coburn), the Senator from Texas (Mrs. Hutchison), and the Senator from North Carolina (Mr. Burr).

Further, if present and voting, the Senator from Kentucky (Mr. Bunning) would have voted ``Nay.''

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

Mr. President, I ask unanimous consent that following my remarks Senator Brown of Ohio and then Senator LeMieux of Florida be recognized in that order.

Mr. President, each day it seems there is a new analysis of the Democratic proposal on health care that suggests it is not such a great idea. Today, a devastating report was made public by the Obama administration itself--the Department of Health and Human Services--and their group that is in charge of Medicare and Medicaid. It goes by the initials CMS. Specifically, the Chief Actuary, Richard S. Foster, of the Centers for Medicare and Medicaid Services, issued a report about the effect of the Reid legislation on health care as it pertains to a whole variety of things--the cost of the legislation, the effect it is going to have on taxes, on premiums, on benefits, the cost with respect to Medicare and the kinds of things that will occur to beneficiaries in Medicare, and so on. It is a complete report by a person who I think all would agree is not only qualified to speak to these things but also quite objective, as the chief actuary of CMS. He reached a number of very interesting conclusions, and I want to briefly discuss eight of them.

The first thing is that he noted his estimates were actually not a full 10-year estimate, and I will quote what he said here.

Because of these transition effects and the fact that most

of the coverage provisions would be in effect for only 6 of

the 10 years of the budget period, the cost estimates shown

in this memorandum do not represent a full 10-year cost for

the proposed legislation.

The reason that is important is we have been saying here for quite a long time that you can't just look at the first 10 years in order to see the full impact of this legislation because for the first 4 years most of the benefits don't exist. They are simply collecting taxes and fees and revenues, and then is when the benefits kick in, as a result of which, when they say it is all in balance, it is in balance because they are collecting money for 10 years but they only have to pay for benefits for 6 of those 10 years. So the real question is: What does it cost over the first full 10 years of implementation? And it turns out that is about $2.5 trillion.

We have known this, and we have made the point. I think even the chairman of the Finance Committee has acknowledged the $2.5 trillion if you take the first 10 years of implementation. But I think it is good to actually have that confirmed now by the Chief Actuary of CMS.

Secondly, a point I have been making all along is that when the President said repeatedly: If you like your insurance, you get to keep it, that is not true; and it is not true for a variety of reasons under the bill, and again this report confirms what we have been saying is in fact true; namely, that a number of workers who currently have employer-sponsored insurance would lose their coverage. In addition to that, seniors who are enrolled in private Medicare plans, which are known as the Medicare Advantage plans, would lose benefits, and many of them would no longer be covered.

Let me read two quotations, first relative to employer-sponsored insurance; and, second, people who are on Medicare Advantage plans. I am quoting now.

Some smaller employers would be inclined to terminate their

existing coverage, and companies with low average salaries

might find it to their and their employees' advantage to end

their plans. The per-worker penalties assessed on

nonparticipating employers are very low compared to

prevailing health insurance costs. As a result, the penalties

would not be a significant deterrent to dropping or forgoing

coverage.

What does that mean? The employer under this bill has an obligation to provide insurance to his or her employees. If they don't do that, then they pay a penalty. The problem is that the penalty is much less than the cost of buying the insurance. So what we have been saying all along, and what the CMS actuary confirms here, is that in a lot of cases, small employers--and particularly companies with low average salaries--will find it to their advantage to drop the insurance coverage and have their folks go into the so-called exchange programs. The penalty these employers pay will be much less than what they are paying now to provide insurance.

So these folks who are very happy with the insurance they have right now are not going to be very happy when they get something substantially less than that through the so-called exchange. They may like the coverage they have now, but, unfortunately, what the President promised, that they would get to keep it, is not true. And this is confirmed by what I read to you.

What about folks on Medicare Advantage? These are senior citizens above 65 who are on Medicare, and what they have chosen to participate in is the private insurance coverage component of Medicare called Medicare Advantage. Here is the quotation.

Lower benchmarks would reduce Medicare Advantage rebates to

plans and thereby result in less generous benefit packages.

We estimate that in 2015, when the competitive benchmarks

would be fully phased in, enrollment in Medicare Advantage

plans would decrease by about 33 percent.

Everybody has acknowledged there would be a reduction, but there has been little debate about how much it would be. Our initial projections are borne out by the CMS actuary--a decrease in enrollment in Medicare Advantage by about 33 percent. That is a third. This is important to me because 337,000 Arizonans participate in Medicare Advantage--almost 40 percent of all our seniors. And a third of them, if this works across the board, are going to lose their plan because of this. In any event, they are all going to lose benefits because of ``the result in less generous benefit packages.''

This hasn't been much in dispute, because the Congressional Budget Office itself has described precisely how much the benefit packages will be reduced by, and it is 90-some dollars. It is from 130-some dollars in actuarial value down to 40-some dollars in actuarial value, which is a huge reduction, obviously. So reduction in benefits; a third of the people no longer on Medicare Advantage. The bottom line, whether you are privately insured through your employer or you are a senior citizen in Medicare Advantage, you are not going to be able to keep the benefits and the plan you like and have, notwithstanding the President's commitment to the contrary.

Third, Medicare cuts. We have been talking a lot about Medicare cuts, and my colleagues on the other side say: Well, we don't think that the Medicare cuts are the way you describe them. Seniors are still going to have access to doctors and so on. This report is devastating in blowing a hole in that argument. Let me quote a couple of the things they say.

Providers for whom Medicare constitutes a substantive

portion of their business could find it difficult to remain

profitable and, absent legislative intervention, might end

their participation in the program (possibly jeopardizing

access to care for beneficiaries).

This is what we have been predicting. If you impose extra costs and mandates

on the people who are providing the care--whether it be the hospitals, the physicians, home health care, or if you are taxing something such as medical devices--all of those impose costs on the people who are providing these medical benefits. What the CMS actuary is saying here is that the combination of those things would potentially jeopardize access to care for the beneficiaries. There aren't going to be as many of these people in business to provide care for an increasing number of people.

Let me go on with the quotation that I think will make this clear:

Simulations by the Office of the Actuary suggest that

roughly 20 percent of Part A providers [hospitals, nursing

homes, home health] would become unprofitable within the 10

year projection period as a result of the productivity

adjustments.

In other words, 20 percent of the hospitals, home health care folks and others are not going to be profitable anymore. They are going to be out of business because of the burdens that are being placed upon them in this legislation. What happens when you have the baby boomers going into the Medicare Program? Under the latest idea from the other side of the aisle, we are even going to have 30 million potentially being able to join Medicare--the folks from 55 up to 65--but you are going to reduce by 20 percent the number of folks to take care of them--the hospitals and home health care and so on. Obviously, you have a big problem. Access will be jeopardized, as the actuary says.

This is where rationing, in effect, comes in. There simply aren't enough doctors, hospitals, and others to care for the number of patients who want to see them. This is how it starts. First, long delays, long lines, long waiting periods before you can get your appointment, and eventually denial of care because there is simply nobody to take care of you.

This is exacerbated by something else in the legislation, which is the fourth point here. The actuary talks about the independent Medicare advisory board. What is happening is that Medicare is being cut in three different ways: one, Medicare Advantage, which I mentioned; two, the providers are being slashed in the reimbursements that they are receiving; and three, this legislation creates an independent Medicare advisory board that is supposed to make recommendations on how to effect huge reductions in the cost of Medicare, and the primary way they will do that is by reducing the amount of money paid to doctors, to hospitals, to others who take care of patients. That, obviously, will also result in less care for the senior citizens.

If the cuts are so drastic that Congress says no, we are not going to do them, then you don't have the savings the bill relies upon to pay for the new entitlement. So one of two things happens, and they are both disastrous: Either you have these huge cuts, which are devastating for access to care or the cuts are so unrealistic they do not go into effect, in which case the legislation can't be paid for. And then I guess you are going to have to raise taxes on the American people because you aren't able to effect the savings from Medicare.

Here is what the actuary says:

In general, limiting cost growth to a level below medical

price inflation alone would represent an exceedingly

difficult challenge.

That is the challenge being put before them here--an exceedingly difficult challenge.

Actual Medicare cost growth per beneficiary was below the

target level in only 4 of the last 25 years, with 3 of those

years immediately following the Balanced Budget Act of 1997;

the impact of the BBA prompted Congress to pass legislation

in 1999 and 2000 moderating many of the BBA provisions.

What does that mean? In 1997, Congress passed the Balanced Budget Act, which drastically reduced the payments to these providers in order to cut the cost of Medicare. Three out of the four years in which the costs were reduced, it was immediately following that legislation. But starting in 1999 and into the year 2000, Congress realized those cuts were too deep; you were not going to get doctors and hospitals to continue to take care of patients if we continued to cut what they were paid for their services. So the cuts were ameliorated and, as a result, the savings were not achieved.

What the actuary is saying here is if that same thing happens again, if these cuts are so drastic we actually don't let them go into effect because they would be self-defeating, then you will not have the savings that have been promised and scored here as enabling this legislation to be so-called ``budget neutral.'' It won't be budget neutral. So as I said, one of two things will happen, and both are bad. Either you have the cuts, which are devastating for seniors or you don't have them and they are devastating to taxpayers.

Five is Medicare expansion. I think all of us agree on both sides of the aisle that Medicaid is a very vexing problem because the States have to pay for a percentage of the Medicaid patients and the States are generally in very poor financial shape and they do not need more people added to the Medicaid rolls that can't pay for them.

My Governor was in town earlier this week, and she said: Please, please, don't add people to the Medicaid rolls and expect the States are going to be able to pay for them. Let me read a couple of the quotes from this actuarial report.

Providers might tend to accept more patients who have

private insurance (with relatively attractive payment rates)

and fewer Medicare or Medicaid patients, exacerbating

existing access problems for the latter group.

That latter group, of course, is the Medicaid group. The problem is that reimbursement is so low for Medicaid, frankly, they are the last patients a doctor sees, and their care is not the best. If we are going to provide care for a group of people, we need to do it right. Unfortunately, this is how rationing begins if you don't have enough money to do it right.

Then let me conclude with this quotation.

[This] possibly is especially likely in the case of the

substantially higher volume of Medicaid services, where

provider payment rates are well below average.

And that is my point.

Therefore, it is reasonable to expect that a significant

portion of the increased demand for Medicaid would be

difficult to meet, particularly over the first few years.

What they are saying is that there aren't going to be the physicians and the other people to care for the Medicaid patients here and, as a result, the promise we have made to these people we are not going to be able to keep.

Enrolling in Medicaid does not guarantee access to care by a long shot.

No. 6. Again, this is something we have been saying. This is not really too controversial because the Congressional Budget Office has said the same thing that the Actuary here says. But it is always good to have a backup opinion. This is the tax on drugs, on devices, and on insurance plans. We have all been saying of course those costs are passed on to the consumer in the form of higher premiums or, in a couple of cases, higher taxes. That is what is demonstrated:

Consumers will face even higher costs as a result of the

new taxes on the health care sector.

I might just say before I read the quotation here, it doesn't make any sense to me why, in order to pay for this new entitlement, you would tax the very people you want to take care of. Tax the doctors, insurance companies, device manufacturers that make the diabetes pump or the stent for a heart patient or some other device that improves our health care these days? Let's tax them? I am saying maybe you want to tax liquor or tobacco or something, but why tax the things that make people healthier? Go figure. That is what the bill does.

Here is what the Actuary says:

We anticipate that such fees would generally be passed

through to the health consumers in the form of higher drug

and device prices and higher insurance premiums, with an

associated increase of approximately $11 billion per year in

overall national health expenditures, beginning in 2011.

Remember how we were going to drive costs down with this bill? We weren't going to be paying as much? The Actuary says:

We anticipate such fees would be generally passed through

to the consumers in the form of higher drug and device prices

and higher insurance premiums, with an associated increase of

$11 billion a year.

This is going backward, not forward. The whole idea was to reduce costs and premiums. Instead, they are going up.

No. 7. Here is another tax. We are going to tax the higher premium plans. In response--this is a 40-percent tax on

these plans. What will employers do? According to the Actuary:

. . . employers will reduce employees' health care

benefits.

That makes sense. If you are going to tax an insurance plan that has a lot of good benefits in it, then the employer is going to say: Rather than paying that tax, I will reduce the benefits--precisely what CMS says. This is another case in which if you like what you have, sorry, you are not going to get to keep it. We are going to tax it. Then the employer is going to reduce the benefits.

Here is the quotation from CMS:

In reaction to the excise tax, many employers would reduce

the scope of their health benefits.

This is exactly what we have been saying.

Here are seven specific ways in which the CMS Actuary, working for the Obama administration Department of Health and Human Services, has verified the complaints Republicans have been making about this legislation for weeks--that it will raise premiums, it will raise taxes, it will raise costs. It will raise the cost of health care. It will raise the cost to the government. It will provide fewer benefits. It will result in the transition of people from private insurance to the exchange which is created in here and will result in less access to care because there will be fewer providers to take care of more people. What a wonderful reform.

This is why, when I talk about this legislation, I do not talk of health care reform. I am reminded of the line from a novel in which the individual says:

Reform, sir? Don't talk of reform. Things are bad enough

already.

Indeed, they are. We do have problems. One of those problems is premium costs going up.

I note that my colleagues in the House of Representatives on the Republican side offered an amendment which, according to calculations of the Congressional Budget Office and according to the House Republicans, would have actually reduced premiums by $3,000 a year for the average family rather than increasing them. Republicans have good ideas about attacking the specific problems we face today. What we do not need is something under the guise of reform which is so massive, so intrusive into our lives and, with all due respect, not well thought out in terms of its long-range implications.

What you end up with at the end of the day, according to CMS now, according to the Actuary of the U.S. Government Health and Human Services, CMS, it raises premiums, raises taxes, reduces access to care, increases the cost, and provides fewer benefits. I cannot imagine how we could go home at Christmastime and say to our constituents: This is what we are giving you for Christmas this year.

Mr. President, I wish to say a few words about the legislation which is pending before us, which is the Omnibus appropriations bill. It is a bill that will substantially add to our national debt and substantially increase spending and I think it is worthwhile to point out some of the features of this bill, since presumably we will be voting on it sometime this weekend.

I would start by pointing out that our national deficit for the past fiscal year now stands at $1.4 trillion. So the fiscal year which just concluded added $1.4 trillion to the national debt. That is the largest deficit we have ever had, by far. It is about three times as much as the largest deficit under the Bush administration. Our current unemployment level is at 10 percent, despite the administration's insistence earlier this year that Congress pass a $1 trillion-plus stimulus package that was supposed to reduce unemployment. The Senate is currently in the middle of a debate on a health care bill that has a 10-year implementation cost of $2.5 trillion. Sometime in the next month we will be forced to raise the Nation's debt ceiling for the second time this year to a level that exceeds the current ceiling of $12.1 trillion.

If all that were not enough, we are now presented with this Omnibus appropriations bill that costs nearly $500 billion more; to be exact, $446.8 billion. This is simply irresponsible. When is it going to end? We are piling spending bill on spending bill and debt on debt. At a time when many Americans are being forced to get by on less, the majority has crafted a bill that uses the government's credit card to increase spending on the six appropriations bills that make up this package--by how much? By 12 percent total.

For perspective, according to the Bureau of Labor Statistics, the consumer price index, the CPI, the measurement of inflation over the past 12 months, was .2 percent. So the cost of living is going up by .2 percent. Yet we are giving these government agencies 12 percent more money for next year. Let me give some examples.

The Transportation-HUD bill receives a 23-percent increase over last year. Has anybody had their income go up by 23 percent over last year? Well, if you are in the Federal Government, you can make it happen. That is not responsible.

How about the State-Foreign Operations bill, a 33-percent increase, a third over last year--a 33-percent increase. Included in that is a 24- percent increase for the State Department's salaries and operations account. That is not responsible.

The Commerce, Justice, and Science bill receives a 12-percent increase over last year. At least that is the average of the six bills in total.

How about earmarks? Well, they are in here, big time. According to Taxpayers for Common Sense, this bill is larded up with 5,224 earmarks--5,224 earmarks--that total $3.8 billion. That is not responsible.

Some examples include $600,000 for a streetscape beautification in California and $300,000 for Carnegie Hall music and education programs in New York City. In the current economic environment, that doesn't seem to be the most responsible use of Federal taxpayer dollars.

If the irresponsible levels of spending were not bad enough, the bill makes a number of significant policy changes as well. Ordinarily, we are not supposed to have policy changes in an appropriations bill, but when you lump them all together in a take-it-or-leave-it form, such as this omnibus, well, if you are the majority, you think you can get away with it. Here are 134 examples.

With respect to the fairness doctrine, this omnibus does not include the fiscal year 2008 ban on Federal funds being used to enforce or implement the so-called fairness doctrine--so nothing to implement or enforce the so-called fairness doctrine.

The bill makes some changes to several longstanding policy provisions contained in the financial services bill and specifically the District of Columbia section dealing with abortion, medical marijuana, needle exchange, domestic partners, and the DC Opportunity Scholarship Program. That program has been enormously popular and enormously successful. Yet this bill provides only enough money--$13.2 million--to allow the currently enrolled students in this popular program, the DC Opportunity Scholarship Program, ultimately leading to the termination of the program. I have met with some of these students and their parents. They are doing very well because of the

environment in which they are finally able to study and learn and be safe. This program is so popular that people have lined up in long queues to take advantage of it. Yet we are going to terminate the program as a result of language in this bill.

Well, it is a cross between irresponsible policy and spending.

The bill reduces funding for the Office of Labor Management standards at the Department of Labor by 10 percent. This is the office that investigates union activity and the use of membership dues. Since fiscal year 1998, it has secured 1,400 convictions, resulting in the return of $106 million in embezzled funds to union workers. So where are our priorities? The only place where we see cuts in this bill are in areas where, in this case, the Department of Labor has been enforcing labor law and getting convictions for embezzlement of workers' funds. This is not an area where we want to cut, unless, of course, you are trying to do the bidding of the labor unions who don't like to be called to account for embezzlement of trust fund moneys of their members.

Well, what is missing from this bill? Despite spending nearly $500 billion and covering 6 of the 10 appropriations bills, this bill is significant for what it does not include: The fiscal year 2010 Defense appropriations bill, arguably the most important bill yet to be acted upon. Just shortly after President Obama announced his surge strategy for Afghanistan, the majority has decided to play politics on the backs of our troops. The majority is holding the Defense bill back from this package so it can be used as a vehicle for other purposes; for example, to increase our Nation's debt ceiling and potentially push through a number of other bills that likely don't have the votes to pass on their own. That is wrong. While our commanders in the field and civilians at the Pentagon wait, our other less-urgent appropriations priorities will receive double-digit spending increases. That is not responsible and it is not right.

Given what I know about this bill--and I haven't had a chance to read it all yet--I would echo my friend in the House, Republican leader John Boehner, who requested the President uphold his campaign promise to go through the budget, line by line, and eliminate irresponsible and wasteful spending.

I can assure my colleagues, we will go through this and we will identify those earmarks and we will bring them to the attention of our colleagues, and we will, undoubtedly, because of these spending increases and earmarks and bad policy, attempt to defeat this legislation.

Finally, I wish to make reference to some comments I saw delivered by Dr. Christina Romer, Chair of the White House Council of Economic Advisers, as I was drinking my coffee and watching TV a couple days ago. This was on CNN's ``American Morning'' program on December 8. I was rather startled because she said she was getting rid of the jobs deficit and dealing with the budget deficit, two big problems we inherited and absolutely have to deal with.

Well, it is true, on January 20 of this year when President Obama took office, we had a deficit and we also had a problem with unemployment. The problem is in inferring they are doing something about it, whereas the Bush administration created the problem, I think they create a misimpression. So I asked my staff to get just two numbers. What was the national debt the last day of President Bush's second term and what is it today--or actually December 7 is the date we got the number for, the 322nd day of President Obama's term. In other words, Dr. Christina Romer was saying these are big problems we inherited and we have to deal with them. So how have they dealt with them? Well, it turns out the national debt the last day of President Bush's second term was $10.6 trillion. What is it today, 322 days later? It is $12 trillion. That is some way to fix that problem.

If they are going to complain about the national debt, then get it reduced instead of increased in less than a year--it has gone from $10.6 trillion to $12 trillion; that is $4.5 billion in new debt every single day. These are not my numbers, these are the official statistics of the Bureau of the Public Debt.

The other statistic was unemployment. ``We inherited unemployment.'' That is true. I don't know the average, but I think it is somewhere around 4 or 5 percent in our country. On the last day President Bush was in office, unemployment stood at 7.6 percent. I thought, given the stimulus package, surely we have reduced unemployment. What is the unemployment number today? It is 10 percent--after nearly a year of President Obama's failed $1 trillion stimulus experience.

When Dr. Romer said ``we inherited this problem,'' my immediate reaction is that the President has been in office for a year. What has he done about it? Answer: It has gotten worse. We have added well over $1 trillion to the national debt, and unemployment is now up to 10 percent from 7.6 percent under President Bush.

Some fixing of the problem. I suggest that President Obama and his White House officials and staff stop trying to blame President Bush for everything. If the President has been in office long enough to get the Nobel Peace Prize, presumably he has been in office long enough to do something about the public debt or unemployment.

He has done something about it all right: Unemployment is up from 7.6 percent to 10 percent, and the national debt is up from $10.6 trillion to $12 trillion.

In view of these facts, it doesn't make sense to me to pass a nearly $500 billion omnibus appropriations bill, with departments of this government receiving 26, 30, and 33 percent increases in their budget, when the CPI has only gone up .2 percent this year, and when Americans are scrimping and saving and trying to get by with less. It makes no sense at all.

I hope my colleagues, as we consider this omnibus appropriations bill before us right now, will take these things into consideration before we vote to pile yet more debt on the backs of our taxpaying constituents.