Floor Statements

Would the Senator yield on that point, because the Senator from Arizona has raised an important point. If this is such a good program for these four States, why isn't it a good program for everybody?

But more importantly, the Senator is the expert around here on earmarks. Is this not a classic earmark? And didn't we hear from the other side of the aisle that we were going to have open government; that we were not going to have this type of exercise occur within major bills; that bills weren't going to be loaded up with special earmarks assisting one Member or another? As the expert on the issue of earmarks, would the Senator comment?

If I could ask one more question because I have been listening to this debate, and I came over because I wanted to participate a little. I think it has been an excellent and informative debate.

I have been looking at the numbers here, and I know the numbers are big--big--in this first 10-year period--almost $500 billion in reductions in Medicare spending. But I think the point we need to make is that it doesn't end there. It doesn't end there. Those Medicare spending reductions go on into the next decade, too, and over the first two decades of this bill, Medicare spending reductions will account for $3 trillion--$3 trillion. How can anybody argue against what the Senator from Idaho said, which is that this translates into real reductions in Medicare benefits?

The Senator is absolutely right. And the new program, by the way, will not be solvent either. So we are compounding the insolvency of the future, and we are passing that on to our children.

That will be insolvent.

Well, my view is this: First off, we know a couple of facts--that we grow the government by $2.5 trillion over a 10-year period when this bill is fully implemented. We also know the tax increases during that period will be approximately $1.2 trillion, tax increases and fees, and they are not going to fall on the wealthy, they are going to fall on the small businessperson trying to create the extra job. We also know there will be an entire sea change in the way people get their health care, that the government will be stepping in between you and your doctor and basically making a decision as to what your doctor can tell you you can have for health care, what the provider will tell you you can have for health care.

There is something that hasn't been discussed much. We know the innovations in health care which have done so much to make America the best place to get health care in the world and which have put us on the cutting edge of drugs that have improved the lives of millions of people, not only in the United States but across the world, will be significantly chilled because there will not be an interest in investing capital in a market that is so controlled by the government.

In the end, it is fairly obvious to anybody who has been around this place that there isn't going to be $3 trillion in reductions of Medicare spending over the next 20 years and there isn't going to be $500 billion in Medicare spending cuts in the next 10 years. So all that spending is going to fall on the backs of our children in the form of debt.

We already have a nation that is on an unsustainable path under the present budget scenario without this health care bill. Our deficits are $1 trillion a year, on average, for the next 10 years. That is without this bill. Our public debt goes from 35 percent of the gross national product to 80 percent of the gross national product. We become insolvent at the end of this decade--not this decade but the decade starting today, 10 years from today. That is aggravated dramatically by exploding the size of the government under this bill rather than taking the step-by-step approach that has been proposed by our side to reform health care, to make it more effective and make it deliver more services to more people at a better cost.

A number of times I have heard people on the other side of the aisle get up and say that CBO says this bill reduces the cost of health care spending to the Federal Government. It is just the opposite--just the opposite. The CBO letter specifically said that the cost to the Federal Government of health care goes up--goes up--under this bill in the 10- year period. So this bill does not turn down the cost of health care, it does explode the size of government, it does put the government into the business of managing your health care, and as a result, I think it is going to reduce the quality of life of our children.

I do not have the floor.

I am suggesting it is very difficult, under any scenario, to believe this Congress is going to do anything other than spend the money that is put in this bill. It is certainly not going to end up making the reductions in Medicare it proposes in this bill. If it does make those reductions, though, I think the Senator from Utah has been absolutely right in saying those reductions should go to making the Medicare system solvent. They should not go to creating a brand new entitlement.

Absolutely.

I think the Senator from Tennessee has once again hit the nail on the head. I respect the President's forthrightness. The President has said very simply he believes that prosperity comes from growing the government. When this bill passes, we will see the largest growth in government in the history of our country. This is going to be 16 percent of our economy basically managed by the Federal Government. You are going to see the Government explode in size. Does that lead to prosperity? I don't happen to think it does. It certainly doesn't lead to prosperity if along with that massive expansion in the size of the government you are going to see your deficit go up significantly, your debt go up significantly, or the tax burden go up significantly, which reduces productivity, or if you take a large segment of our society, our seniors, 35 million today, 70 million by the year 2019, and say to them they are not going to have the ability to have a solvent Medicare system because the way that system might have been made more solvent is now being used to create a brandnew entitlement, a massive new entitlement for a whole group of people who never paid for an insurance policy and never paid into the Medicare insurance fund.

I think the Senator has touched the base. We have seen automobiles, we have seen financial institutions, we have seen the student loans, and now we are seeing health care all taken over by the government or partially taken over by the government. Clearly the goal is, as the President said, expand the size of the government, create prosperity, use the European model. I don't happen to be attracted to the European model. I think the American model works better where you have a government you can afford and give entrepreneurs a chance to go out and take risks and create jobs.

Will the Senator yield for a question?

The Senator is absolutely right to point out the Bennet amendment is a shell game, charade, and a farce; that there will still be $\1/2\ trillion in the first 10 years but actually $2.5 trillion over the period 2010 to 2029 to be cut out of Medicare.

Earlier the majority leader came to the floor and talked about a memo that I sent around, which is a fairly innocuous memo to our fellow Members, which outlined the rights to fellow Members relative to floor activity, and I sent in my position as Budget ranking member, because most of these issues are tied to the budget, and the covering letter said we as a minority must use the tools we have under the Senate rules to insist on a full, complete, and fully informed debate on health care legislation as well as all legislation that comes before the Senate.

I ask the Republican leader, is it not reasonable that we should have a full, complete, and fair debate on this health care bill?

If the Republican leader will yield further, it is ironic, is it not, that the majority leader would come to the floor and complain about an innocuous statement that outlines the rules which Members of the Senate have, a statement which I suspect he actually would pass out to his members for information were they in the minority--maybe even in the majority, because they would like to know how the rules work in the Senate--after the majority leader had completely subverted the rules of the Senate by not taking this 2074- page bill through committee so it could be amended, in the open, so it could be amended but, rather, writing it in the back room, some closet around here, with three or four Members of the Senate present? Isn't there an ironic inconsistency to his outrage on the fact that we suggested people should know the rules here while he has basically tried to go around the rules?

I will ask one more question because I find the irony in the situation so unique. A memo which outlines what the rights are of all Members--but Members of the minority specifically because the rules are meant to protect the minority from the majority; that is the tradition of our Government, of course, which seems to be an affront to the majority at this point--that a memo of that nature, which essentially says the minority has certain rights in order for the institution to function correctly--I am wondering, why did we create these rules in the first place? Wasn't it so we could continue the thought of Adams, of Madison, who suggested that the Senate should be the place where, when legislation comes forward which has been rushed through the House, the Senate should be the place where that legislation receives a deliberative view, where it is explored as to its unintended consequences and as to its consequences generally, and where the body has the opportunity to amend it effectively so it can be improved? Isn't that the purpose of the Senate? And isn't that what the rules of the Senate are designed to do, to accomplish the goals of our Founding Fathers to have a Senate where the legislation is adequately aired and considered versus being rushed through in a precipitous way?

I thank the Republican leader for his response. I suspect, were the majority leader in the minority, he would be insisting on exactly what the Republican leader is insisting on--a fair and open debate which allows the minority to make its case as to the good points in this bill and as to the bad points. The way you make that case is by following the rules of the Senate; is that not correct?

I appreciate the proposal of the Senator from Rhode Island, but I think it needs to be put in its proper context. This is a sense of the Senate. It has no legal implications. The CLASS Act, as proposed in the underlying bill, was described by the Senator from Rhode Island but not fully. The way the CLASS Act works, it is an insurance program theoretically where people in their thirties and forties and fifties can buy insurance to cover their retirement years when they have to go into some sort of long-term care facility and may be institutionalized. People are paying into this program for decades, maybe four decades, maybe their thirties right into their seventies or their twenties into their sixties. The cost of this program does not actually start to be incurred until these folks move into a long-term care facility or a managed care facility type of situation for their retirement years where they need skilled nursing assistance of some sort.

There is a huge amount of premium that comes in under this program early which goes against virtually no expenses, because this is a brandnew program. It is a startup program. It is created by the Federal Government. It is a government insurance program much like Social Security and Medicare. The practical effect of that is that money will come in for years to the Federal coffers. In the first 10 years of this bill, it is estimated around $90 billion will come in. In the second, as we move out in the second 10 years, the total over those two periods of 10 years is about $212 billion. Then more money will come in in the third 10 years, probably somewhere in the vicinity of $300 billion to $400 billion potentially. None of this will be spent on the purposes of this insurance, because almost everybody who is paying in for these premiums is going to be too young to go into one of these institutionalized care facilities during those first three decades.

So what happens is that the Federal Government gets this large windfall of money from these people who are paying their premiums and spends it, spends it on something else--education, roads, highways, arts, whatever is the decision on where to spend the money. It gets spent. That is the way the Federal Government works. It doesn't have any place to put this money and keep it safe. It comes in, and it gets spent. When these people retire, when they do go into a situation where they need assisted living of some sort, then the government gets the bill. Not us, not those of us who are here. We will be long retired by then, everybody in this Chamber, except maybe Senator Bennet from Colorado who is rather young and vibrant. The rest of us will probably not be around to take advantage of this. It will be our children and grandchildren who will end up with that bill.

That bill will be staggering. We are talking hundreds of billions, if not trillions, of dollars of outyear costs as a result of this type of program; much like Social Security which basically has nothing in the coffers today, even though trillions of dollars have been paid in, but which has a lot of obligations. The same thing with Medicare. That was an insurance program which was supposed to have money in the coffers. Not there. In fact, it goes into negative cashflow and will be insolvent beginning in 2010. There is no money when these folks retire and need it. It will have been spent.

This amendment, well intentioned as a statement, has absolutely no effect on that series of events. That money will still be spent under this amendment. After this amendment is passed--and I presume it will be passed; it is a nonevent amendment having no purpose other than a political statement--CBO will still score this bill as spending that money, absolutely score this bill as spending that money, the $90 billion for the next 10 years, the $212 billion for the next 20 years, the $400 billion after that. That is my guess. The third 10-year period, my guess is $500 billion. When we get out there 30, 40 years from now and these people expect to get their insurance paid, then when our children get the bill for that insurance, it becomes a tax on them, a direct tax on their earnings. It will affect their lifestyle, their earning capacity, their ability to buy a home, to send a child to college, to buy a car. This money will be spent under this bill.

One of my colleagues on the other side of the aisle who is pretty respected around here on financial matters I believe referred to this CLASS Act proposal as a Ponzi scheme. That is not too far off. Basically, we are taking the money from these folks who buy into this insurance program today. We are spending it on something we want to spend it on as a Congress today, whether it is something worthwhile such as a road or education or our national defense, but we are spending it. We are leaving the people who paid that premium out to lunch unless 30 or 40 years from now, when they go into that situation where they need that insurance, the country is strong enough and our kids are making enough money to pay for the cost of that program. That is a real gamble for them, and that is called a Ponzi scheme, which is exactly what this is. This bill, this sense of the Senate, although a good political document because it allows Members to wander around their districts and say: I voted to protect the CLASS Act dollars, I voted that it not be accounted for under this bill, that was a sense of the Senate. In actuality, it has no effect at all in that area.

All the money that comes into this, insurance money, is going to be spent somewhere else. And the CBO will still score this bill as taking credit for that insurance under this program. It is Bernie Madoff accounting one more time under this bill. You would think after a while people would get embarrassed--really, it would become embarrassing after a while. When you match up 10 years of tax increases, 10 years of Medicare cuts, to 5 years of programmatic spending and claim you have a program that is fully paid for and is only an $840 billion program, when you know that if the program, the entire bill is fully phased in, it is $2.5 trillion in cost. It isn't $500 billion in Medicare cuts when this thing is fully phased in, it is $1 trillion in Medicare cuts. It isn't $500 billion of tax increases in this bill and fee increases on small businesses mostly or on provider groups, it is over $1 trillion of increases. You would think after a while people would be embarrassed about the manipulation of numbers in that way. But that doesn't seem to occur. Yet we get this proposal that says, OK, let's do it again. Let's claim we are doing something we are not doing. Let's claim we are protecting the dollars that come in under this new CLASS Act proposal, assuming this program goes into place. Let's claim we are segregating them somehow so the people who pay their hard-earned dollars and buy into this CLASS Act think they are getting something for it, when in fact that will not happen at all, is not going to happen at all. That money is going to be spent the day it comes in. In fact, it is already spent. We are already borrowing so much and spending so much in this government right now. We already have an obligation of debt that will spend this money.

I guess everybody can walk away feeling good about this amendment, but substantively, it has no impact at all.

I am happy to yield.

The Senator has asked a very pointed and appropriate question, because the answer is pretty startling. The point I think most people don't understand is that this money gets spent as it comes in. In other words, let's say over the next 30 years, younger people pay into this new alleged insurance program, accurately described as a Ponzi scheme. All that money that comes in will be spent on other activities of the government and, therefore, the other activities of government will be allowed to grow fairly dramatically. There will be a lot of money here. You are talking potentially $1 trillion over the next 30 years.

Those expenditures, which will have occurred as a result of this money coming in, which will have nothing at all to do with paying for the cost of the health care which these people who buy into this CLASS Act think they are getting--in other words, long-term care insurance, it has nothing to do with that--it will be on, as I said, education, roads, national defense, whatever we spend it on around here. Those expenditures will be built into the baseline forever. They will presume that there is going to be revenue to pay for them. What happens when that generation that has bought into the CLASS Act starts to actually need the money it is alleged it is going to get? Two things happen. The younger generation is going to have to pay taxes to cover that cost because the money will not be there. There will be no money in the kitty, none, zero. There will be zero money in the kitty, the alleged kitty to pay for this insurance program. Second, ironically, the government will have been grown by all the money that came in and was spent on new programs. So you are basically going to double down on the cost here.

Our children and our grandchildren are going to have to pay twice, not only to pay for the long-term care which allegedly has been promised to these people under these insurance programs but also to pay for all the new spending that will occur as a result of spending the premiums which were supposed to be saved for these programs. So they are going to get hit twice. The implications are, quite honestly, staggering.

We already know we have a $38 trillion unfunded liability in Medicare. We know, when you combine Medicare, Medicaid, and Social Security, we have a $60 trillion unfunded liability. If you calculate in the cost of the CLASS Act on top of that, you are adding potentially trillions more of unfunded liability, which will all have to be paid by our children and our grandchildren.

At the essence of this bill, there are a number of problems, but the problem I find most inappropriate in the way we are doing this is we are creating a government which our kids cannot afford under any circumstance. We are absolutely guaranteeing that our children are going to have a lower standard of living than we had because of the burden we are going to put on them as a result of these expansive new programs, which we know cannot be afforded in the outyears.

We already know we cannot afford the government we have in the outyears. We already know the public debt is headed above 80 percent of GDP by 2019. So the Senator from South Dakota has touched on a core issue. What is the real cost of this? Well, it is extraordinary. As I said, it hits the next generation twice. First, they will have to pay the taxes to pay for the program that was put on the books, which is allegedly there, plus they will have to pay to support all the programs which the money that came in was supposed to be preserved for.

I think the Senator from South Dakota touched on another point. The sense of the Senate, basically, confirms the fundamental flaw of the CLASS Act. The fact that you would think a sense of the Senate is necessary pretty much proves that everybody around here understands there is a big game going on with the CLASS Act. The problem is, of course, the sense of the Senate has no effect of law and, therefore, the problems the CLASS Act creates in the area of spending, the revenues that come in for the purpose of something other than what the CLASS Act alleges people are buying when they pay for that insurance, will still exist, and the CBO will still score the CLASS Act as benefiting the budget situation, when it should not be scored that way at all.

As I said, this is a nice resolution from a political standpoint, but substantively it has no effect on correcting the problems which the CLASS Act generate in the area of fiscal policy.

I understand there is a unanimous consent request that somebody wishes to offer. I was asked if I would listen to it.

I ask the assistant leader, is he offering a unanimous consent request? I will yield the floor for the purposes of a unanimous consent request.

Reserving the right to object, my only concern would be that will take us past 7 o'clock, so you may want to adjust the time.

Is it my understanding, then, the order of recognition will be Senator Whitehouse, the assistant leader, and then Senator Hatch?

I was just wondering if the Senator would yield for a question.

Is the Ponzi family from Chicago?

I appreciate the assistant leader asking me that question. Regrettably, I am not immediately familiar with it. I have probably seen it, although I apologize for not being immediately familiar with it. Therefore, I presume the assistant leader is going to remind me or at least reacquaint me with its terms. I would note the term ``Ponzi Act'' did not come from me. It came from the chairman of the Budget Committee.

If the Senator would allow me to comment on that one point?

I fully agree with that analysis. The first 30 years of the CLASS Act will generate revenues. It will add to the Federal Treasury and will--and that was the purpose of my discussion; that is the point I made--during the first 30 years of this proposal, younger people will be paying in and very few people will be taking out because they will not have yet qualified for the insurance because they will not be old enough to go into assisted living.

Madam President, it is the tradition in this body that a person seeking recognition gets recognized, is it not?

Madam President, I believe I have the floor.

Madam President, I ask unanimous consent that at the conclusion of remarks of the Senator from California, I be recognized.

Mr. President, I ask unanimous consent that the next Republican speaker be the Senator from Louisiana, Senator Vitter.

Mr. President, at this point I rise to speak generally about

the bill and specifically about this Medicare proposal--the proposal in the bill and the motion that has been offered by Senator McCain, which I think is an excellent idea.

Let's start with the size of this bill. It is unusual that we would be considering a bill of this size and not have had more time to take a look at it, but the bill itself--and I am glad that the chairman of the Finance Committee has essentially agreed with this earlier today--costs $2.5 trillion when it is fully implemented--$2.5 trillion. When my budget staff took a look at this bill--and we only had a brief time to do it, obviously, last week--and came up with that number, people on the other side of the aisle said, regrettably: No, that is a bogus number. The number is $840 billion, it is not a $2.5 trillion bill. However, it is $2.5 trillion when it is fully implemented. When the programmatic activity of this bill is under full steam, over a 10-year period, it will cost over $2.5 trillion. That is huge--huge.

In an earlier colloquy, I heard the chairman of the Finance Committee--who does such a good job as chairman--make the point: Well, it is fully paid for. It is fully paid for in each 10-year period. That is true, literally. I give him credit for that. But two questions are raised by that fact. The first is this: Why would you expand the Federal Government by $2.5 trillion when we can't afford the government we have?

The resources that are being used to pay for this, should they ever come to fruition, are resources which should probably be used to make Medicare solvent or more solvent or, alternatively, to reduce our debt and deficit situation, as we confront it as a nation. We know for a fact that every year for the next 10 years--even before this bill is put in place--we are going to run a $1 trillion deficit every year, because that is what President Obama has suggested. We know for a fact that our public debt is going to go from 35 percent of our gross national product up to 80 percent of our gross national product within the next 6 years without this bill being passed. We know we are in a position where we are headed down a road which is basically going to hand to our children a nation that is fiscally insolvent because of the amount of debt put on their back by our generation through spending and not paying for it.

So why would we increase the government now by another $2.5 trillion when we can't afford the government we have? That is the question I think we have to ask ourselves. Isn't there a better way to try to address the issue of health care reform without this massive expansion of a new entitlement--creating a brandnew entitlement which is going to cost such an extraordinary amount of money and dramatically expand Medicaid, which is where most of the spending comes from in this bill-- a massive expansion of Medicaid and a massive new entitlement created that we don't have today?

This bill, when it is fully implemented, will take the size of the Federal Government from about 20 percent of GDP or a little less--where it has historically been ever since the post-World War II period--up to about 24 or 25 percent of GDP. To accomplish that, and claim you are not going to increase the deficit, requires a real leap of faith. Because it means that to pay for this--and this is why the McCain motion is so important--you are going to have to reduce Medicare spending by $1 trillion, when this bill is fully implemented--$1 trillion over a 10-year window. In fact, during the period from 2010 to 2029, Medicare spending will be reduced in this bill by $3 trillion.

Those dollars will not be used to make Medicare more solvent. And we know we have serious problems with Medicare. Those dollars will be used to create a brandnew entitlement and to dramatically increase the size of government for people who do not pay into the hospital insurance fund; for people who have not paid Medicare taxes, for the most part but, rather, for a whole new population of people going under expanded Medicaid and people getting this new entitlement under the public plan. So if you are going to reduce Medicare spending in the first 10 years by $450 billion, and the second 10 years fully implemented--there is some overlap there, but fully implemented $1 trillion, and then over a 19-year period, the two decades, by $3 trillion, instead of using those monies--those seniors' dollars--to try to make Medicare more solvent, they are going to be used for the purposes of expanding and creating a new entitlement and expanding Medicaid.

This is hard to accept as either being fair to our senior population or being good policy from a fiscal standpoint. Why is that? Because if we look at the Medicare situation, we know Medicare as it is structured today has an unfunded liability of $55 trillion--$55 trillion. That means in the Medicare system we do not know how we are going to pay $55 trillion worth of benefits we know we are now obligated for.

The answer we get from the other side of the aisle is: Well, this $55 trillion number goes down, because this bill cuts Medicare and, therefore, the benefit structure reduces. But do the revenues, or the reduction in that, go toward the purpose of making Medicare more solvent? No. Those monies are taken and spent. Those monies are taken and used to create a larger government. They aren't used to reduce the deficit or to reduce the debt, all of which is being driven, in large part, by this $55 trillion worth of unfunded liability as we go forward. No, they are being used to create a brandnew entitlement which has nothing to do with seniors, and a brandnew entitlement which is going to be paid for, in large part, by seniors, or by a reduction in their benefit structure.

That makes very little sense, because essentially you are taking money out of the Medicare system and using it to expand the government, when in fact what we should be doing, if you are going to take money out of the Medicare system, is you should be using it to reduce the obligations of the government--the debt obligation--so the Medicare system becomes more affordable. That is not the goal here, however.

Then, of course, there is the practical aspect of this. We know these types of proposals are plug numbers to a great degree, because we know this Congress is not going to stand up to a $\1/2\ trillion cut in Medicare over the next 10 years and a $3 trillion cut in Medicare over the next 20 years. Why do we know that? I know it from personal experience. I was chairman of the Budget Committee the last time we tried to address the fact that we have an outyear liability in Medicare that is not affordable--this $55 trillion number. We know it is not affordable. We know we have to do something about it. So I suggested, when I was chairman of the Budget Committee, that we reduce Medicare spending, or its rate of growth--not actual spending, its rate of growth--by $10 billion over a 5-year period, less than 1 percent of Medicare spending. My suggestion was that we do that by requiring-- primarily we get most of that money by requiring senior citizens who are wealthy to pay a reasonable proportion of their Part D premium and then take those moneys and basically try to make Medicare a little more solvent with it. We got no votes from the other side of the aisle-- none, zero--on that proposal.

Now they come forward with a representation that they are going to reduce Medicare spending and benefits to seniors by $3 trillion over the next 20 years and $400-some-odd billion over the next 10 years, and they expect this to be taken seriously? Of course not. This is all going to end up being unpaid-for expenditures in expansion of these programs.

These brandnew entitlements that are being put in this bill and this expansion of other entitlements that do not deal with Medicare, by the way, are going to end up being in large part paid for by creating more debt and passing it on to our children. As I mentioned earlier, that is a fairly big problem for our kids. They are going to get a country, as it is today, that has about $70 trillion in unfunded liability just in the Medicare and Medicaid accounts, to say nothing of the other deficits we are running up around here. Now we are going to throw another huge amount on their backs.

Some percentage of this $2.5 trillion--probably a majority of it-- will end up being added to the deficit and debt as we move out into the outyears even though it is represented that it is not going to be. The only way you can claim you are going to pay for this, of course, is with these Medicare cuts and

these tax increases that are in this bill, and these fee increases. We are going to spend a little time on the tax increases and fee increases and the speciousness of those proposals, but right now we are focusing on Medicare.

In any event, what we have is a bill that takes government and explodes its size. We already have a government that is pretty big--20 percent of our economy. You are exploding it to 24 percent of our economy, and then you are saying you are going to pay for that by dramatically reducing Medicare spending? It does not make any philosophical sense, and it certainly does not pass the test of what happens around here politically.

In addition, there is the issue of how this bill got to a score in the first 10 years that made it look as if it was more fiscally responsible. I have heard people from the other side. Again, I respect the chairman of the Finance Committee for acknowledging that this bill, when fully implemented, is a $2.5 trillion bill. But a lot of folks are claiming this is just an $843 billion bill, that is all it is in the first 10 years, that is all it costs. There are so many major budget gimmicks in this bill that accomplish that score that Bernie Madoff would be embarrassed--embarrassed by what this bill does in the area of gamesmanship.

Let's start with the fact that it begins most of the fees, most of the taxes, and most of the Medicare cuts in the first year of the 10 years, but it does not begin the spending on the new program, the new entitlements, until the fourth and fifth year. So they are matching 4 and 5 years of spending against 10 years of income and Medicare cuts and claiming that therefore there is a balance.

Ironically, it is represented and rumored--and I admit this is a rumor--that originally they were going to start the spending in the third year under this bill. Of course, nobody knew what the bill was because it was written in private and nobody got to see it. But then they got a score from CBO that said it didn't work that way, so they simply moved the spending back a year and started it in the fourth year. They sent it back to CBO, and CBO said: If you take a year of spending out in the 10 years and you still have the 10 years of income from the taxes, fees, and cuts in Medicare, you get a better score. We will give you a better score. You will get closer to balance. It is a pretty outrageous little game of hide the pea under the shell.

This is probably the single biggest--in my experience, and I have been on the Budget Committee for quite a while--in my experience, it is the single biggest gaming of the budget system I have ever seen around here. But it is not the only one; there is something here called the CLASS Act.

I will be happy to yield to the Senator from Utah for purposes of a question.

It is about 16 to 17 percent of our gross national product.

That is correct.

It takes the spending from 16 to 17 percent to about 20 percent of GDP.

The Senator from Utah, of course, being a senior member of the Finance Committee, is very familiar with those numbers, and that is absolutely correct.

I think that is the biggest in the context of what it generates in the way of Pyrrhic, nonexistent savings because it basically says we are really not spending--because it doesn't fully implement the plan in the first year, it says we are not spending that much money. In fact, we know that when the plan is fully implemented, it is a $2.45 trillion not a $840 billion bill.

If I can first answer the question of the Senator from Utah, and then I will be happy to answer the chairman of the Finance Committee.

The Senator from Utah basically is correct in his assumption. Essentially, they are claiming an approximately $400-some-odd billion savings in Medicare over 10 years which they are then using to finance the spending in this bill over the last 5 years, 5 to 6 years of the 10-year window. In the end, after you fully implement this bill and you fully implement the Medicare cuts, it represents $3 trillion of Medicare reductions over a 20-year period.

Where does it come from? It comes from two different accounts, primarily. One is, just about anybody who is on Medicare Advantage today--about 25 percent of those people will probably completely lose their Medicare Advantage insurance, and it is 12,000 people in New Hampshire, so say 4,000 people.

I believe 11 million people.

About 25 percent of those people will lose their Medicare insurance under this proposal, mostly in rural areas. And second, because there is $160 billion of savings scored. You can't save that type of money in Medicare Advantage unless people don't get the Medicare Advantage advantage.

Second, it comes in significant reductions in provider payments. How do provider payments get paid for when they are cut, I ask the Senator from Utah. I suspect it is because less health care is provided.

It certainly affects the hospitals, and it probably affects the doctors. I have heard the Senator from Montana say they are going to straighten out the doctor problem down the road, but that is another $250 billion of spending which we don't know where they are going to get the money from. But, yes, it would affect, in my opinion, all providers--doctors, hospitals, and other people who provide health care to seniors. You cannot take $450 billion out of the Medicare system and not affect people's Medicare.

The Senator from Utah is correct again. The Medicare system is headed toward insolvency, and it goes cash-negative in 2013, I believe--maybe it is 2012--in the sense that it is paying out less than it takes in, and it has an unfunded liability that exceeds, actually, $38 trillion now. I think it is up around----

I think the Senator from Utah has asked one of the core questions about this bill. Why would you use Medicare savings, reductions in Medicare benefits, which will definitely affect recipients, for the purposes of creating a new program rather than for the purposes of making health care more solvent if you are going to do that in the first place? And are these savings ever going to really come about? One wonders about that also.

Actually, I would yield to the Senator from Utah on that issue--not the floor but yield on that question because I think the Senator from Utah was there when Medicare Advantage was drafted as a law.

I believe it is a legal part of Medicare, Medicare Advantage.

And this would have a massively disruptive effect on people who get Medicare Advantage because you are going to reduce it-- the scoring is there will be a reduction in Medicare Advantage payments of approximately $162 billion, I believe it is, and there is no way you are going to keep getting the advantages of Medicare Advantage if you have that type of reduction in payments.

If the Senator will allow me to respond, the problem here is we have rolled the Medicare issue into this major health reform bill--or the other side has--and they have used Medicare as a piggy bank for the purposes of trying to create a brandnew entitlement which has nothing to do with senior citizens. Yes, Medicare needs to be addressed. It needs to be reformed. The benefit structure probably has to be reformed. But we should not use those dollars for the purposes of expanding the government with a brandnew entitlement. We should use those dollars to shore up Medicare so we don't have this massive insolvency.

That is correct.

They are using to fund the underlying bill, and the underlying bill expands a variety of initiatives in the area of Medicaid and in the area of a brandnew entitlement for people who are uninsured to subsidize the government plan.

The CLASS Act is another classic gimmick of budgetary shenanigans which I would like to speak to, briefly. I know the Senator from Montana had a question or maybe he has gone past that point and we have answered all his questions. I can move on to the CLASS Act.

I thank the Senator for his forthrightness on that. The CLASS Act needs to be explained. It is a great title. We come up with these wonderful ``motherhood of titles.'' We attach them to things and then suddenly they take on a persona that has no relationship to what they actually do. The CLASS Act is a long-term care insurance program which will be government run. It is another takeover of private sector activity by the Federal Government. But what is extraordinarily irresponsible in this bill is, we all know in long-term care insurance that you buy it when you are in your thirties and your forties. You probably don't buy it when you are in your twenties. You buy it in your thirties, forties, and fifties. You start paying in premiums then. But you don't take the benefits. The cost of those insurance products don't incur to the insurer until people actually go into the retirement home situation, which is in their late sixties and seventies, most likely eighties in our culture today, where many people are working well into their seventies. So there is a large period of people paying in, and then 30 or 40 years later, they start to take out.

What has happened in this bill, which is a classic Ponzi scheme--in fact, ironically, the chairman of the Budget Committee did call it a Ponzi scheme, the Senator from North Dakota, Mr. Conrad--they are scoring these years when people are paying into this new program and, because the program doesn't exist, everybody who pays into it, starting with day one, the beneficiaries of that program aren't going to occur until probably 30 or 40 years later. They are taking all the money that is paid in when people are in their thirties, forties, fifties, and sixties as premiums. They are taking that money and they are scoring it as revenue under this bill and they are spending it on other programmatic initiatives for the purposes of claiming the bill is balanced. It adds up to about $212 billion over that 20-year period, 2010 to 2029.

OK. So you spend all the premium money. What happens when these people do go into the nursing home, do require long-term care when they become 75, 80, 90 years old? There is no money. It has been spent. It has been spent on something else, on a new entitlement, on expanding care to people under Medicaid, on whatever the bill has in it. So we are going to have this huge bill that is going to come due to our kids one more time. We already are sticking them with $12 trillion of debt right now, and we are going to raise the debt ceiling, sometime in the next month, to, I don't know what it is going to be, but I have heard rumors it may be as high as 13 more trillion. We know we have another $9 trillion of debt coming at us just by the budgets projected for the next 10 years. Now we are going to, 30 years from now, have this huge bill come in as the people who decided to buy into the CLASS Act suddenly go into the retirement home. There will not be any money there for them. It is gone. It will have been spent by a prior generation to make this bill balanced.

The CLASS Act has been described as a Ponzi scheme relative to its effect on the budget. It is using dollars which should be segregated and protected under an insurance program. If this were an insurance company, for example, they would actually have to invest those dollars in something that would be an asset which would be available to pay for the person when they go into the nursing home so they are actuarially sound. But that is not what happens under this bill. Under this bill, those dollars go out the door as soon as they come in for the purposes of representing that this bill is in fiscal balance. It is not. It is not in fiscal balance, obviously.

Even if you were to accept these incredible activities of budgetary gimmickry, the fundamental problem with this bill is it grows the government by $2.5 trillion, and we can't afford that when we already have a government that well exceeds our capacity to pay for it. Inevitably, we will pass on to these young pages, as they go into their earning careers and raise their families, a government that is so expensive, they will be unable to buy a home, send their kids to college or do the things they wish to do that give one a quality of life.

I have certainly taken more than my fair share of time at this point. The Senator from Louisiana was going to go next.

I yield the floor.

Madam President, I ask unanimous consent to be allowed to speak in a colloquy as it evolves on our side.

We are joined by a number of the distinguished members of our caucus. They have thoughts they want to express. We want to discuss a couple of points.

Before I turn to the Senator from Missouri, I want to make a point, because I have been listening to a lot of the discussion on the floor, and I have participated and listened to a lot of it on television, from my colleagues on the other side of the aisle. They continue to use this number. They claim this bill will cost $800-some-odd billion and that is the number that has been reached as the expenditure on this bill. That is a totally dishonest number. That is the ultimate shell game. That is Washington cynical politics.

Do you know how they get to that number of $800 billion as a cost of the bill? It is a 10-year number, by the way. That is a lot of money, $800 billion. That would run the State of New Hampshire for probably 100 years. Missouri is a little bigger, but it would run that State for a while, and it would probably run Alabama for a little while. South Dakota could probably run for 200 years on that. That is not the real cost of this bill, though. That is not the cost of the bill.

The way that number was arrived at--and I think the American people need to understand this. If that number was so dishonestly arrived at for the number of the bill, what is wrong with the rest of the bill that they haven't been told about? That was a 10-year score for what the bill cost was, but they don't start spending money under this bill until the fourth and fifth year. In fact, the cynicism exceeds that. They couldn't get the score they wanted--they couldn't get the score they wanted from CBO, so they moved back another year in the 10-year cycle. They went from 4 years to 5 years as to the starting point of most of the spending in this bill.

What they claim to the American people is the 10-year bill is going to cost about $800-plus billion. But what they don't tell the American people is they are not spending anything in the first 4 or 5 years of the bill. No, they do raise your taxes throughout the 10-year period. They do cut Medicare throughout the 10-year period. But they don't spend the money. They don't start the programs until the year 2014, when this bill is fully phased in.

When all these new programs, this massive expansion of entitlements is created, brand-new entitlements, when all this new spending occurs, this bill will cost $2.5 trillion over that 10-year period--$2.5 trillion. That is the real cost of this bill. That is how this government is going to grow in a 10-year window as a result of this spending.

I say to my colleagues, I think most of us understand we already have a huge debt problem in this Nation. We are passing on to our kids a country with so much debt they are not going to be able to afford it. Every year for the next 10 years, without this health care bill, the President has proposed budgets which will run a $1 trillion deficit, every year, on average, for the next 10 years. Sometime this month, we are going to have to raise the debt ceiling of this country because we reached $12 trillion in debt. Then it is going to have to be raised again because we are running up these massive deficits.

The debt owed by this country will exceed 80 percent of our gross national product--80 percent of our gross national product at the end of that 10-year period--and will exceed 60 percent of our gross national product within 2 years. Those are unsustainable numbers. Yet a bill is being proposed that is going to expand the size of government by $2.5 trillion.

It is alleged it is paid for, and we are going to get into a discussion in some depth because I think that is an equally cynical number as a result of bait and switch.

I just wished to clear the air as to the real cost of this bill because I found it uniquely cynical that it would be represented that this bill costs $890 billion, whatever the number is. It does call into issue the credibility of the rest of the numbers that are being thrown out by the other side of the aisle when they use that number, which is a 5-year number that they claim covers the 10-year cost, when they don't do anything in the first 5 years.

I appreciate the indulgence of the Senator from Missouri. I understand he wishes to speak and then we will go to the Senator from Alabama and then the Senator from South Dakota and

then have a discussion about some of the issues, such as costs, how it affects Medicare, how it affects small businesses, how it is going to affect your personal insurance.

That is $1.2 trillion because between the period 2010 and 2014, there are no expenditures because they don't start the programs until 2014.

No, those are total expenditures which are represented to be offset by cuts in Medicare, increased fees, and increased taxes.

When fully phased in, in the 10-year period, 2014 to 2023, the Medicare cuts are $1.1 trillion.

The taxes and fees during that period--this period, when it is fully phased in--are approximately $1.5 trillion.

Actually, if you accept these assumptions that we are going to cut Medicare by $1 trillion and take that to create a new entitlement instead of using it to help Medicare be more solvent and then we are going to raise taxes and fees by $1 trillion--remember, most of this is not going to come out of the wealthy. It is going to come out of small businesses and higher premium costs to people on insurance or it is going to come out of HI taxes. If you accept that logic, which I find to be a bit of a reach, then it will not have any impact on the deficit in that timeframe because they have cut Medicare to pay for it, and they have raised all these taxes to pay for it.

That is a fascinating question because I was chairman of the Budget Committee the last time we tried to do something in the area of the rate of Medicare costs because we received a directive from the Medicare trustees that Medicare had to be made more cost-effective or else it was going to go broke. So we suggested, when I was chairman of the Budget Committee--and everybody in this room voted for it, by the way--that we should reduce the rate of growth of Medicare by $10 billion on a $1 million timeframe. In other words, Medicare was going to spend $1 trillion over a period, 5 years. We were going to suggest a $10 billion reduction in that rate of growth which was going to be paid for by requiring people who were getting Part D premiums and had high income to pay for part of their premiums--people such as Warren Buffett would not be subsidized by people working down at the local restaurant.

We did not get one vote from the other side of the aisle. We passed it by having the Vice President sit in the chair and break the tie. That was $10 billion over 5 years.

So I think this idea that you are going to do $1 trillion over 10 years and pay for this--first off, if you are going to reduce spending or raise Medicare taxes, it should go to pay for Medicare solvency because Medicare is insolvent. It shouldn't go to create a new entitlement. Senior citizens, paying into Medicare all their lives, should not have their money taken to start a brand-new entitlement for other people, and that is what this bill does.

As a practical matter, we are not going to do that. We know that. We know this is all going on the debt. Ninety percent of this is going to end up on the debt.

Will the Senator yield?

It is important to know where that cut is proposed to primarily fall. Is Medicare Advantage used by a number of seniors in South Dakota?

Under this plan, it will be eliminated for all intents and purposes.

Madam President, what is the regular order?

Thank you, Madam President.

If I could join this colloquy with my colleagues from Wyoming--what a great State to have two such exceptional Senators. First off, I want to make this point: Obviously, a lot of folks are pointing at this bill which I have right here--the Senator from Wyoming has one, and the other Senator from Wyoming has one--because it is real. Up until now most of the debate that has been occurring around here has been media. A lot of it has been theater. Some of it has been good theater, I hope, but it has been theater to a large degree.

Now we are dealing with something that is extremely real. Every page of this 2,074-page bill will have an impact on Americans. Every page of this bill will make a decision and direct a policy that will affect the health care of every American everywhere.

It is an extraordinarily intrusive and expensive bill. The Senators from Wyoming have been alluding to this, but it really is historic. The colleagues on the other side say this is a historic bill. It is historic. Never in my experience, and I don't think in any experience, has the Congress taken up a bill which is essentially going to restructure and fundamentally change the way that 16 to 20 percent of the national economy is going to be affected in such an immediate and intrusive way.

Essentially, the Federal Government will affect every decision that has to do

with health care as a result of this legislation, every decision that has to do with health care.

The cost this is going to create in the area of increasing the size of the government is astronomical. We have heard this number, that this is a $890 billion bill. That is pretty big. I suspect that would run the State of Wyoming for a few years, maybe a century. I think the State of New Hampshire would probably run for pretty close to a century--in fact, more than a century, to be honest with you. I don't think our budget is $8 billion yet. So that is a lot of money, $800 billion plus. But that is not the real number. That is a phony number. That is a bait-and-switch number.

That number is arrived at by claiming, over a 10-year period, that the programs that are initiated in this bill--which is a massive new entitlement--will not start until the fourth and fifth year. In fact, the House bill was at least a little more honest than the Senate bill. It started in the fourth year. The Senate bill starts in the fifth year with most of the spending. But the taxes which the Senator from Wyoming, the senior Senator from Wyoming was just talking about, and the fees and the reductions in Medicare, they start pretty much in the first year.

So they have taken 10 years of taxes, fees, and cuts in Medicare, and they have matched them against 4 or 5 years of actual spending and claimed that they are in budget balance and that the bill only costs $890 billion--only.

In fact, CBO has scored this over the real period, when all the programs are in place. Over that period, over that 10-year window when all the programs are functioning that are created under this bill--all of them being Federal programs, brandnew entitlements, extraordinarily expensive initiatives--when that occurs, this bill costs, by CBO's estimate, $2.5 trillion. In order to pay for that we would have to cut Medicare by over $1 trillion. In order to pay for that we would have to raise taxes, fees, by over $1.5 trillion. This is a massive increase in the size of government, a massive increase in tax burden, a massive effect on Medicare.

The Senator from Wyoming mentioned there are a few gimmicks in here on top of the huge gimmick, that it is a bait-and-switch, that this is a $800 billion bill when in fact it is a $2.5 trillion bill. There are a lot of other games in here that deal with budgeting. I found one of the more entertaining ones: the fact they take credit in this bill for creating a new program, the CLASS Act, a massive new program, a long- term care program. They take credit in this bill as that being a budget surplus item. How do they figure that out? Because on a long-term care program, basically people in their twenties, their thirties, their forties, even into their fifties, pay into it. It is like buying insurance under this plan, so that money comes into the Federal Treasury.

What they do not account for is when those folks go into their long- term care facility and the money goes out, the money goes out at an incredibly fast rate, and the program balloons radically in its costs. They do not account for that. They just account for the years when people are paying in, and they claim that as surplus money they apply to try to reduce the cost of the bill. So they spend the money.

This is classic. First, they take in the money and claim it as an adjustment against the debt they are running up, and then they spend it so it will not even be available to pay for the program they claim they are going to fund with it. It is just inconceivable.

Bernie Madoff is in jail. Whoever thought up this program and scored it in this bill, Bernie Madoff would be proud of that person. He would say: My type of guy. That is the way you do accounting--fake it.

It is unbelievable. There are a whole series of these types of games in here. The States are going to be taken to the cleaners by this bill. The allegation that we are going to expand Medicaid by 20 to 30 million people, and the States are not going to end up paying a huge bill as a result of that? Absurd on its face. It is absolutely absurd on its face.

More importantly, when we expand Medicaid by 20 or 30 million people, the doctor will tell you, back here, the reason Medicaid is in such dire straits is because doctors will not see Medicaid patients. Why? Because they are reimbursed at 60 percent of the costs. Who pays the other 40 percent, by the way, for the present Medicaid recipients? Who pays the other 40 percent? I will tell you who pays. Mary and Joe Jones, who are working down at the local restaurant who have health insurance, they pay it with their premium. Bob and Marie Black, who are working over at the local software company, they pay it with their health care premium. The 40 percent of Medicaid that is not paid for by the government is paid for by people who are in private insurance. Their insurance premiums go up because they are subsidizing Medicaid reimbursements because the hospitals have to get paid for the cost, and they are only getting 60 percent of it from the government and the other 40 percent is being picked up by the private sector.

When we expand Medicaid by another 20 or 30 million people, we are inevitably going to drive up the costs of private insurance again. So the private insurance policies go up. What does that do? It does what this bill is basically intended to do: it will force employers to drop private insurance and move people over on to the public plan. That, when you get down to it, is what this is all about. This is an exercise in having the Federal Government get control over all health care. It is being done in an incremental way. They are setting up a scenario that will not be immediately apparent to people. But as we move through the years it will become apparent because what will happen is the costs of private health care will go up so much that private employers will start to drop their health care. They will take the penalty, which is not that high in this bill compared to what they have to pay in health care costs, and move their people, and say: Sorry, I am not going to give health care anymore--or never did--and go get this government plan.

Then down the road Congress will change this government plan a little bit, and they will start to put price controls in, just like they want to do in Medicaid. Basically, that will mean people will get fewer products because as you put price controls in you will have less innovation, fewer drugs. Fewer devices will be developed because people will not be getting a return on their investments because these will be price-controlled events.

You will find delays because that is what happens when you move to a government program that controls costs. The government can only control cost by controlling price. That creates delays in access which is what happens in England and Canada. So the quality of the health care system goes down.

I ask my colleague from Wyoming, who is uniquely qualified to comment on this because he is a doctor and he has experienced the problems of dealing with Medicaid, is this not a reasonably accurate reflection of what will happen if we move another 20 or 30 million people into the Medicaid Program? Doesn't that mean that private insurance policies have to go up, fewer doctors will see fewer people, and inevitably we will end up with a cost shift which forces private insurers to drop insurance?

If I may ask a question on that point, this is an important point. As a practicing physician, if all your patients had been Medicaid, would you have been able to pay your bills?

If I might follow up, doesn't that inevitably mean that the people who are paying more are in the private sector, which means premiums for people in the private sector go up, which means fewer people are willing to give that type of coverage because the cost is too high for the business to cover; right?

I thank the Senator from Wyoming. He has a unique perspective which we should listen to, as a practicing physician for how many years?

That is impressive. He understands this whole issue and the point on cost. It is very hard to conceptualize that this is a $2.5 trillion bill when honestly scored. When honestly scored, it is a $2.5 trillion bill.

This page right here, page No. 1, cost the American people $2 billion. You could pick almost any page in this bill. And I don't think they are worth $2 billion a page. This page here, what does that say? I don't know. I am just picking this out: Transfer to the Secretary of Treasury a list of individuals who are issued a certification under subparagraph (h), including the name and taxpayer identification number for each individual, the name and taxpayer identification number of each individual who was an employee of an employer but who was determined to be eligible for the premium tax credit under section 36(b) of the Internal Revenue Code of 1986 because, A, the employer did not provide essential coverage, and B, the employer provided such minimum essential coverage, but it was determined under section--and on it goes--section 36 (b)(c)(2)(c).

I don't understand what that said. We now will have about 72 hours to figure it out. But I know this much: When a bill costs $2 billion a page and when it includes language such as that, it is something we should spend some time on. This bill is being rushed. It should not be rushed. This vote that will occur tomorrow at 8 o'clock at night, after having this size of a bill on our desks for less than 2, 3 days, is very serious. We are firing real bullets here. This is no longer theater. It is no longer political media. This is the passage of a piece of legislation, the potential passage of a piece of legislation. Tomorrow's vote is a critical vote because it basically will mean we are on the road to passage. In fact, 97 percent of the bills that come to the floor of the Senate under a motion to proceed pass.

So this piece of legislation is serious. It is real bullets at $2 billion a page. Tomorrow's vote is something we need to look at as a vote that is not some sort of a procedural vote. It is a substantive vote on whether we are going to fundamentally change the way health care is delivered, cause the size of this government to grow by trillions and trillions of dollars, and put the Federal Government virtually into every decision that has anything to do with health care. With the way you choose a doctor, the way you get your insurance, with the type of procedures you get, with the type of drugs you can obtain-- the Federal Government will be involved. How much it costs, the Federal Government will be involved. And with the type of debt that will be passed on to our children. This bill will play a major role.

Remember something about the Federal Government: Once you give the Federal Government power, you don't get it back. This bill is all about moving power here to Washington. That is what this legislation is about, about centralizing the decision process, the national decision process on health care. In the end, the goal, as openly stated by some of my colleagues on the other side of the aisle--and I appreciate the fact that they are forthright--is to

have a single-payer system where the government essentially runs health care top to bottom, much as it does in Canada and England. I believe that fundamentally undermines quality and is fundamentally unaffordable. It passes on debt to our kids which we obviously don't want. In the process, it will take Medicare, which is already in serious trouble--there is already a $55 trillion unfunded liability in Medicare--it will take Medicare's problems and aggravate them dramatically. To the extent savings are taken out of Medicare and used to create this new entitlement, which has nothing to do with Medicare or Medicare recipients but is going to be funded by Medicare both on the tax side with the HI tax in here and in the cuts in Medicare benefits with the elimination basically of Medicare Advantage, all of that is Medicare money that should be going, if you are going to do those things, to making Medicare more solvent for seniors, not to creating a new entitlement.

I see the Senator from North Carolina wants to jump in here.

Fully phased in, it is a trillion dollars.

The Senator has made a very good point, which is how you do health care correctly. You do not create a massive new Federal entitlement. You do not spend $2.5 trillion we do not have. There are a couple things you could do, though, on a step-by-step basis.

One of them--and I would be interested to know if the Senator understands why it is not in here--one of them is to correct lawsuit abuse. It is estimated $250 billion a year of medical expenditure is defensive medicine which doctors order and hospitals undertake simply to avoid the potential of a lawsuit being filed. CBO estimates it would be a $50 billion savings if we would adopt the proposals they use in Texas, California. That is one approach.

Another approach would be to allow employers to pay employees more who live healthy lifestyles, such as employees who stop smoking or employees who get the tests they need--whether it is mammograms or colonoscopies--when they should have them or employers who live healthy lifestyles and lose weight. Under the bill that is not allowed, other than what present law is, which is very restrictive. That would save a lot of money, by the way.

The first proposal, as I understand, was opposed by the trial lawyers. Do you think that is why it is not in this bill--saving $54 billion on abusive lawsuits?

The second proposal--allowing employers to pay a differential and pay employees who are living a healthy lifestyle more--is opposed by the big labor unions here in Washington. Do you think that is why it is not in this bill?

I wonder whether maybe the Senator from North Carolina has some thoughts on those two approaches as to whether they would help the health care system in this country, and why they did not find their way into a 2,000-page bill, since we seem to have a lot of room in this bill for things.

That is because we would have to change something called

It is a technical term, but it basically allows companies to pay an employee who lives a healthy lifestyle more than other employees, and that is opposed, as I understand it. It was originally in one draft, and it got dropped somewhere.

If I could jump in at this point.

I think the Senator has touched on something that is important; that is, when you start putting these major fees on things such as medical devices and drugs, you reduce the willingness of people to invest in creating the next device, and not only do you end up with a device being priced out of the market or maybe not being produced, but----

Then I will yield the floor.

Mr. President, I ask unanimous consent we be allowed to speak for an additional minute each, so we may wrap up our time.

My point is, this bill fundamentally undermines innovation, and innovation has been at the essence of what has made American medicine better than the rest of the medicine in the world. We are the most innovative country in the world in the areas of drugs and medical devices and procedures. I think this bill undermines that.

Madam President, I rise today to recognize the longest- serving lawmaker in congressional history; I rise to recognize a leader; and I rise to recognize a friend.

Senator Byrd has served in Congress for over 56 years. His tenure has traversed 9 elections, 18,000 votes, 20,000 days, and 11 Presidents. I have had the privilege of serving with Senator Byrd on the Senate Appropriations Subcommittee on Homeland Security. I am proud of our efforts to protect Americans and make our Nation more secure, especially in the area of border security and addressing the threat of weapons of mass destruction. Senator Byrd was a terrific partner, and I valued his input. And when we would give introductory remarks at the committee markup of our bill, I have never received such generous compliments from another lawmaker. I hope Senator Conrad, my counterpart on the Budget Committee, is taking notes.

More recently, it is a testament to his character and sense of duty that after battling illness and absence earlier this year, Senator Byrd returned to once again craft our Nation's homeland security budget: a $44 billion measure that funds natural disaster response, antiterrorism efforts, and other critical programs to meet and repel the various threats facing our homeland.

Lastly, I want to recognize Senator Byrd for his dedication to the Senate as an institution and his understanding of its inner workings. No one can better recite or describe Senate rules and parliamentary procedures or better defend them. His encyclopedic knowledge of the Senate, as well as the copy of the U.S. Constitution which he always carries in his jacket pocket, is something that we can all respect and appreciate. He is a man committed to the principles and laws that founded our great Nation, and for that we should be thankful.

In closing, we have much to thank Senator Byrd for: merit-based scholarships; teacher training programs; and the strengthening of American history curriculum in our schools. But one thing that many of us and our constituents might take for granted, Senator Byrd is responsible for the cameras in the Senate Chamber. As he often does, Senator Byrd put it eloquently when he said that proceedings should be televised to prevent the Senate from becoming the ``invisible branch'' of government. I couldn't agree more.

Before yielding the floor, let me be one of the first to wish our esteemed colleague an early Happy Birthday. He

turns 92 this Friday. Happy Birthday, friend.

Mr. President, the journalist H.L. Mencken once observed that, ``complex problems have simple, easy to understand, wrong answers.'' And, though modern history has amply demonstrated the resistance of complex political and economic systems to the easy answer of centralized control, we try time and again to apply top-down solutions to our multifaceted problems. This conflict is brought into no sharper light than by Congress' current efforts at financial services reform; particularly those directed at the labyrinthine world of the multi-trillion dollar derivatives trade.

Derivatives are a vital and complex component of modern financial markets, making it imperative that reform be done right--without damage to the

twin pillars of innovation and capital formation.

The question as to how derivatives should be regulated is not easy to answer, but Congress should start with some guiding principles. First, derivatives regulation should seek to foster a robust, competitive, and liquid marketplace. Second, systemic counter-party risk exposure must be reduced by incentivizing central clearing and increasing reporting requirements to promote transparency. Third, regulation must preserve the ability to engage in bilateral customized transactions for risk management. Finally, we must coordinate our efforts with the international community to prevent global regulatory arbitrage and the flight of capital to less regulated jurisdictions.

Unfortunately, the regulatory reform proposals making their way through both chambers of Congress fail to take into account the intricacies of this dynamic financial product and expose a fundamental misunderstanding of the way in which the marketplace works. Congress must think through the significant, unintended consequences before we act to mandate that all Over-the-Counter--OTC--derivatives be centrally cleared and executed on exchanges or cash collateralized, as well as subjecting end-users to capital charges. By de-incentivizing companies to use these risk management tools, such proposals will have the perverse effect of increasing business risk and raising costs.

The proposals advocated for by the U.S. Treasury and Chairman of the Senate Banking Committee, Senator Christopher Dodd, seem to provide too many government mandates and not enough flexibility. The proposed regulatory structure for OTC derivatives is built on an inadequate foundation lacking the staff, expertise, technology, and resources needed to provide truly robust oversight. Clearing and exchange-trading requirements do not accommodate the need for customized transactions. Capital and margin requirements threaten to lock up liquidity. Lack of international coordination guarantees a flight of capital away from our shores.

Derivatives may not be part of the Main Street vernacular, they may be unfamiliar to the local car dealership, but the manufacturers that supply those dealerships know them well. Derivatives provide businesses with access to lower cost capital, enabling them to grow, invest, and retain and create new jobs. With the unemployment rate at 10.2 percent nationally, this is no time to increase uncertainty and business costs.

Congress must be mindful of the mobility of capital in the global marketplace as well. Without a proper regulatory balance, capital can and will accept higher risk for less onerous regulation. We must maintain incentives for business to participate in a large and liquid OTC derivative market, while promoting global coordination to minimize regulatory arbitrage and systemic risk.

Under current proposals, capital requirements that will be imposed on OTC dealers will pass on additional cost to end-users. Coupling these capital costs with a decreasing ability to customize transactions could result in sharply lower usage by end-users. Given that 94 percent of Fortune 500 companies utilize customized OTC derivatives to manage macro-economic risk, providing less certainty to corporate balance sheets will severely undermine confidence in the American marketplace.

Further, the proposal to mandate exchange trading makes little sense in the bespoke OTC derivatives market. The basic assumption of exchange trading reflects the use of standard products. OTC derivates by their very nature are not always standard. In the real world, mandating use of an exchange would inhibit the use of such customized derivates that are useful financial management tools to hedge extremely specific risks. Bespoke derivatives cannot always be substituted with exchange traded or standardized OTC products. Even attempting to craft a carve- out for such derivatives raises the concern of whether the U.S. Securities and Exchange Commission and Commodities Future Trading Commission could agree on what should be traded.

Another red flag raised by the circulating proposals is the unintended consequence of segregating variation margin. The more capital a dealer has to set aside to purchase an asset, the fewer assets it can purchase. Heightened capital requirements restrict a dealer's ability to generate returns on its capital or provide loans to Main Street businesses, students heading to college, or families seeking a mortgage. It also does not protect end users or reduce systemic risk in any demonstrable way.

Corporate scandal and economic failure have provided such a regulatory catalyst many times in the past. It is alarmingly reminiscent of 2002, when Congress enacted Sarbanes-Oxley; introducing a host of new compliance requirements for accounting, corporate governance, and financial disclosure. But, in the years since the legislation took effect, the overhaul has come to be widely regarded as overly complex, unduly burdensome, and a severe disadvantage to American businesses in the global marketplace.

Congress should be instructed by the lessons of the past and not add such regulations that will impede capital formation. The simple, easy, but ultimately wrong answer is to issue a government mandate for every perceived problem. Thinking through the unintended consequences of overregulation and trusting market solutions is more difficult, but it is ultimately the only way to preserve the innovation that powers American markets.

Madam President, last month, efforts by Senate Democratic leaders to add roughly $250 billion to the U.S. debt over the next 10 years by increasing Medicare payments to physicians were put off by arguments from other Democrats that the cost of the proposal should be offset so as not to burden future generations with more debt. A series of press releases, editorials, and op-eds declared the proposal to be fiscally irresponsible and the Democratic leadership foolish for trying to take it up as a standalone bill. And yet, a Senate highway bill that would add roughly $150 billion to the U.S. debt over the next 10 years remains below the radar and far more likely to be approved.

The last highway bill, SAFETEA-LU expired at the end of September 2009. But highway programs, like much of the rest of government, continue to operate by virtue of the continuing resolution, CR, now in place through December 18, 2009. Until the authorization committees can agree on how to underwrite the $500 billion over 6 years that they desire in highway spending, a CR or another legislative vehicle will carry a highway programs extension. Meanwhile, the highway trust fund is already insolvent and cannot support baseline spending levels equal to the highway program levels in fiscal year 2009, much less an authorization bill amounting to half a trillion dollars.

The House and Senate authorizing committees advertise they are simply arguing over the length--3 months v. 6 months v. 18 months--of a ``clean'' extension. A clean extension, however, already exists in law in the CR and can be perpetuated indefinitely. The authorizers really want to combine a highway extension bill with an increase in highway spending authority above the fiscal year 2009 level for contract authority.

The various ``clean'' extension bills being advocated by the highway authorizers are anything but clean, and they are certainly not extensions. For example, the latest Senate version to be hotlined on October 26 is a massive highway expansion bill--it would increase spending authority by $20.8 billion over the CBO baseline in 2010 and in every year after that.

Madam President, $20.8 billion per year over the baseline is a lot of money. Why so much? Because authorizers set, back in 2005, the overall 5-year net level of highway spending in the last authorization bill, SAFETEA-LU, by rescinding $8.7 billion on the day that bill expired-- September 30, 2009. They had always planned to repeal that rescission before it occurred, but failed to do so. They are so irritated by the failure to avert the rescission that they propose to re-enact the funds--twice!

I will ask that a table showing the components of the $20.8 billion above the CBO baseline be printed in the Record at the end of my statement.

CBO projects that limiting highway spending to the fiscal year 2009 program level, as the CR does, will exceed the gas tax revenue to the highway trust fund by $87 billion over the next 10 years. If Congress continues to cover trust fund shortfalls as it has been--by transferring money from the Treasury's General Fund--then $87 billion of

transfers and debt would be required to continue just this fiscal year 2009 level of spending. The general fund, however, is also broke-- incurring a $1.4 trillion deficit in fiscal year 2009, and the fiscal year 2010 deficit is likely to be about the same. Consequently, when Congress transfers money from the broke general fund to the broke highway trust fund, the debt of the U.S. Government goes up by exactly that amount and immediately counts against the debt limit.

Despite the unaffordability of the baseline, Congress adopted a 2010 budget resolution in May 2009 that allocated amounts to authorizing committees to write a highway bill that would spend more than current law revenues collected by the trust fund. The Senate highway expansion bill, which would restore the $8.7 billion rescission twice, would not only enact the levels magically assumed by the 2010 budget resolution but would also increase outlays by another $62 billion over 10 years, bringing the total draw on the general fund, the debt, and future generations to nearly $150 billion, just from a so-called 6-month extension bill.

The authorizers brush off any deficit concerns by saying that, under the Byzantine system of split jurisdiction with the appropriators, they don't control outlays and so there is no ``pay-go'' problem with their expansion bill. But it's too late to raise any objection if you wait to measure highway program outlays for budget enforcement until they are triggered by an appropriations bill, since the outlays are already baked into the baseline and into the allocations of the appropriators. The only point where taxpayers or their watchdogs can measure whether proposed future spending is higher than current law is at the authorization stage. Extra special vigilance is required whenever authorizers claim they just want to enact a ``simple clean extension.''

When Republicans controlled Congress in 1998, they enacted a bipartisan highway bill dedicated to spending all gas tax revenues only on highways. When they enacted the next highway bill in 2005, it was also a bipartisan goal to spend every penny of gas tax revenue. They succeeded beyond their imaginations. And now that Democrats are responsible for writing the next highway bill, their proposal is to spend all the gas taxes plus an additional $150 billion. This can only be done by increasing the Nation's debt, in other words--handing the bill to our children so today's politicians can take credit for highway projects.

I ask unanimous consent that the components to which I referred be printed in the Record.

Madam President, I note that my colleague from New Hampshire is also on the floor. Did she want to go first?

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

Madam President, last night's elections have been interpreted in a variety of different ways. I listened to one channel and got one certain interpretation, I listened to another channel and I got the exact opposite interpretation. So I will throw in my interpretation.

I think the American people, most Americans today, are going through some tough times. They are finding it very difficult to make ends meet. Many Americans have lost their jobs, unfortunately. Those Americans who have jobs are worried about their jobs. They are going home at night, they are sitting down with their husbands or with their wives and they are trying to work through the family finances.

They are concerned about making ends meet. They are worried about their credit card debt, they are worried about their mortgage, they are worried about how they are going to pay for their children's schooling, if their kids are in school. If they are graduate students, they are not kids, they are worried about how they are going to pay all those debts they are running up to get through school.

I think Americans understand the debt is a problem personally and now they look at the Federal Government and they see we are running up this massive debt on them. We are going to be asked, fairly soon, to raise the level of the national debt by maybe $1 trillion.

This year the deficit will exceed $1.4 trillion--or last year--and we are seeing deficits projected for the next 10 years of over $1 trillion a year. They are seeing our Federal debt being bought up by foreign countries. Yet our Federal debt keeps going up dramatically. They are asking themselves: How can this be? How can a country as strong and vibrant as the United States continue to run up all this debt and continue to be successful? We cannot do it as family members. We cannot do it in our household. How can the Federal Government do this?

I think the answer is fairly intuitive: It cannot do this. Yet we continue to do it as a government. So I think some of the vote last night was a statement that, hey, Federal Government, take a pause. Think about what you are doing in the area of running up deficits and running up debt and passing on to the children, to our children and to our grandchildren, a situation which is not fiscally sustainable.

Think about what is going to occur if we continue to run these massive deficits and this massive debt. It will be a situation where we have a new saying in this country, ``No child left a dime'' as a result of all this debt being run up. Our kids will be put in a position where their quality of life will be fundamentally undermined. They will not be able to buy their home. They will not be able to send their children to college. They will not be able to do the things we have been able to do in our generation because they will have to be paying for the debt which we put on their backs, $1 trillion of deficit every year for the next 10 years, the public debt going to 80 percent of GDP.

Yet the proposals we are seeing come across this floor aggravate the situation almost on a daily basis. Two weeks ago, there was a proposal by the White House to add $13 billion of new deficit spending because they wanted to give $250 to every Social Security recipient.

Well, I think most Social Security recipients are sophisticated enough to know that putting $13 billion of debt on their children's backs, in a system that already has severe fiscal problems, is not worth it for $250. It is not worth doing that to their kids and their grandkids.

Then, 1 week ago, it was proposed we spend almost $\1/4\ trillion-- $250 billion--to fund the doctors fix. The doctors need this adjustment. But it was going to be funded by passing debt, putting debt on our children's backs. We could not afford to do that to them.

It is not right to fix the doctors' problem by passing the bill on to the next generation. Yet that was what was proposed. It passed in the House. Fortunately, over on the other side of the aisle, a number of folks stood and joined all the Republicans and said: No, that is not the way to do it. We should pay for that.

We are going to see a highway bill coming through here pretty soon. That bill is going to add potentially $150 billion of new debt to the deficit.

The most egregious example of this problem of expanding the deficit and the debt on our children and leaving our children in a situation where no child has a dime is the situation that is coming down the pike on the health care bill. The House of Representatives leadership on the Democratic side has proposed a bill that, when fully implemented--in the first 10 years, it is not fully implemented so the costs are underestimated--is going to cost $2.4 trillion of new spending. It will take health care spending up to 22 percent of the gross national product. We will be spending more than a fifth of this country's wealth on health care as a result of the House bill.

The practical implications of that are staggering, not only to our economy but to this government. To grow this government by $2.4 trillion is going to put us in a situation where we will basically have a government that is piling more debt on top of debt we already can afford.

It is alleged that this is paid for. It is paid for in the first 10 years, if you use the most rosy assumptions, because they start the pay-for years on year 1, and they don't start the expenditures until year 4. So in a 10-year period they have 6 years of expenditures matched against 10 years of income. But when you get it fully implemented, it is not paid for. There is a huge gap. The pay-for assumes that you are going to take $4- to $500 billion out of Medicare and move it over to a new entitlement. You will take $4- to $500 billion of new tax increases and pay for this new entitlement. We can't afford that. If we are going to adjust Medicare spending by $\1/2\ trillion, which is what the House is proposing, that money should go to making Medicare solvent. It should not go to creating a brand new entitlement which is going to weight down even further the ability of the Federal Government to pay its bills. Yet that is the proposal. If you are going to dramatically increase taxes, as the bill suggests, by $\1/2\ trillion, that money should also go to address the deficit and the debt. It should not go to expanding the size of government.

The fundamental problem with this health care bill, as it left the House and the Senate Finance and HELP Committees, is that it grows the government at a dramatic rate and uses resources which should be used to get the deficit under control or to make Medicare more solvent. It uses those resources to expand a brand new entitlement. We know, because we have seen it in all sorts of initiatives, that when you put a new program on the books, you inevitably, especially an entitlement program, underestimate the cost, and you equally overestimate revenues. Inevitably, the majority of that cost is financed through deficit spending and is added to the debt. You just have to look at our history to know that is true.

As we go forward from this point, I hope we will think a little bit about addressing what most Americans who voted last night were thinking about, at least when they went home to do their own budgets, and that is the deficit and debt, and that we won't put on the books a brandnew entitlement that will cost us $2.4 trillion when fully implemented and which will dramatically aggravate our ability to pay for debt we already know is coming down the road to make Medicare more solvent, which we know is a big issue and will increase the size of the government. When this bill is fully implemented, if it were passed in its present form, the Federal Government would grow from 20 percent of GDP to 23\1/2\ percent of GDP. That would be the largest percentage of the economy the Federal Government has taken out of it since World War II. Then it continues to go up. It ends up, after 10 years, at about 26 percent of GDP, if we factor in all the different expenditures which are proposed in other parts of the budget.

It is not sustainable. It is not fair. It is not right. One generation should not do this to another generation. We should not promise new programs we cannot pay for and which will pass on to our kids costs which they will have

to bear in a way which will dramatically affect their quality of life. I hope we will take a little time out and say: Let's see if there isn't a better way to do this. Let's see if we can't do this in a more fiscally responsible way, in a way that doesn't grow the government by trillions of dollars, and which doesn't pass massive new debt on to our children.

I yield the floor.

Mr. President, I ask unanimous consent to speak in morning business for 15 minutes.

Mr. President, I rise to speak again about the issue that is the topic of the day for us in the Congress--independent of the question of Afghanistan and Iraq, which is our No. 1 concern--and that is the question of health care.

Today, the Speaker of the House and the Democratic leadership and membership of the House unveiled their plan. It is 2,000 pages long. They made the representation that, in some way, it wasn't going to increase the deficit. This is a bill that is going to cost between $1 trillion and $2 trillion over 10 years. The idea that it is not going to increase the deficit is so unbelievable just on its face that it doesn't even pass the laugh test. If you believe that, then maybe the Speaker of the House should sell you a bridge in Brooklyn--or even in Oakland, for that matter. That one doesn't work, by the way. The simple fact is, when you increase the size of the government by $1 trillion or $2 trillion, as this bill proposes to do by massively creating a massive new entitlement called a government-forced insurance plan, there is no way you are going to be able to cut Medicare enough, as it is proposed in this bill, or raise taxes enough, as it is proposed in this bill, to meet the cost of that program. There is no way it is going to happen. So to claim that this won't add one dime to the deficit, as the President claimed he would not do when he spoke to the Congress, is just not believable.

Under this administration, we have seen a massive expansion in the debt of this Nation. They represent constantly that they just inherited this from the Bush administration. Yes, a fair amount of it did come over from the prior administration, but the budget they sent here, which has a trillion-dollar deficit every year for the next 10 years, isn't the Bush budget, it is their budget. The budget they sent over here, which raises the debt in this country from 40 percent of GDP to 80 percent, isn't the Bush budget, it is the Obama and Democratic budget.

The representation was that we would go out and spend almost $1 trillion--$800 billion--on a stimulus package, and that would create jobs. What it created was debt for our children.

The numbers are starting to come in now. It was represented in New Hampshire specifically, this administration said there would be 16,000 jobs created in New Hampshire by the stimulus package. Since the stimulus package has passed, we have lost 12,000 jobs in our State, and $400 million has been spent in New Hampshire. The administration argues $400 million created 3,000 jobs. They have to use some pretty creative accounting to get to those 3,000 jobs. Even if we give them the benefit of the doubt, that is over $130,000 that it has cost Americans per job.

Did we have that money to spend? No. We sent the bill for that package to our children. We put it on their backs. In fact, almost 50 percent of that stimulus package is going to be spent after this recession is long over. It is going to be spent after the year 2011.

Chairman Bernanke, head of the Federal Reserve, said the recession was over. He said that about 2 weeks ago. Granted, the pain and suffering and the difficult economic times certainly are not over, and we do need to be concerned about that. But in 2012, 2013, 2014, 2015, even in 2019, there will still be money being spent under that stimulus package, and all of it will have been borrowed, borrowed from our children, and they will have to pay it back.

Then we had the Cash for Clunkers Program which was allegedly going to be this great stimulus initiative. That has been looked at by an entirely independent group, edmunds.com, which is an automobile site on the Web. They tell you a car's value and give you an independent assessment of its qualities, pluses, and minuses. They took a look at that program. They said there were 690,000 vehicles sold during the Cash for Clunkers period. But they concluded--they are not conservative, they are not liberal, they are not moderate. They are just a professional group of people looking at what happens in the area of automobiles. They concluded that only 125,000 of those cars would not have actually been purchased or sold by the dealer were the Cash for Clunkers Program not in place. In other words, the vast majority of cars would have been sold; they would have been bought under Edmunds' estimates.

So we spent about $3 billion to buy 125,000 cars. That works out to $24,000 per car. Who did that bill go to? That is going to our kids too.

Just in the last 2 weeks--well, almost every week around here we hear proposals to spend money and not pay for it. A week ago, somebody suggested from the administration that we should spend $14.5 billion by sending $250 to every Social Security recipient. Why did that come about? That came about because people were starting to realize senior citizens were getting a little upset with the fact that under the health care proposals that have been coming forward from the Finance Committee, from the Labor Committee, now from the House, that under these proposals Medicare was going to be significantly reduced. Seniors were going to lose their Medicare benefits so that a brandnew entitlement could be created which had nothing to do with seniors and be partially paid for with these reductions in Medicare payments.

In fact, if you are on Medicare Advantage, under the Finance Committee bill, you can forget it. That program is gone. There are a lot of seniors in this country who have Medicare Advantage. They like it. They think it is a good way to get health care. But the majority of the Medicare cuts come out of Medicare Advantage. Basically, they are wiping out that insurance benefit. Talk about losing your insurance. The President says nobody is going to lose their insurance today who has it; nobody is going to lose it.

Right on the face of it, when Medicare Advantage gets wiped out, every senior who has that is going to lose it. They are going to be moved over to the standard Medicare. And for what? To pay for a new program, a new entitlement program that has nothing to do with seniors and has nothing to do with making the Medicare system more solvent.

If we are going to reduce Medicare payments, and there are adjustments we need to make in the Medicare system, it should go toward making that system solvent. Why is that? Because the system is insolvent.

It is inconceivable that the White House would suggest that we should add $14.5 billion of new spending to the Social Security Program, which is also going to be insolvent in a few years, because seniors were upset and they were realizing what was going to happen to them under Medicare. They wanted to sort of give them some walking-around money, the old Chicago way--walking-around money. If we give people money, maybe they will not be upset by things.

I think most seniors understand that, sure, they would love $250, but how does that work? When we total that all up, that is $14.5 billion of debt which is going to be given to their children and their grandchildren to pay when those grandchildren and children already are getting a massive debt, almost $50 trillion of unfunded liability just in Social Security and Medicare alone.

We have to ask ourselves: Should we put another $14.5 billion on their backs simply to make a political statement? Of course not. But that was proposed.

Then a week ago, it was proposed that we should do a $250 billion fix to reimburse doctors fairly. Doctors are not reimbursed fairly under Medicare. They are not. That is an interesting fact because if we look at all these proposals that are being talked about from the other side of the aisle, they are saying: Oh, everybody in America will have Medicare. That is a great idea. The fact is, Medicare does not reimburse doctors for what the real costs are. So a lot of doctors don't want to do Medicare.

The reflection of that fact is, they proposed the $250 billion doctor fix. They didn't want to pay for it. That is a $\1/4\ trillion. That is a lot of money. All that debt goes on our children's backs. Our children have to pay for that spending. That was the proposal that came from the other side of the aisle.

Fortunately, some folks on the other side of the aisle--I congratulate them, 12 Members on the other side of the aisle in the Democratic Party and one Independent--said: Wait a minute. We are going to join the Republicans on this one. You can't do this. This is not right. You cannot spend $250 billion on fixing the doctors fix, which should be fixed, and then take that bill and give it to our kids and grandkids. You have to be more responsible.

Over the years, every year we have fixed the doctors fix. We have fixed it now for 10 years, and we have paid for it. But this was not going to be paid for.

These ideas for spending money and not paying for them have become fairly common around here. But the biggest item is clearly going to be this health care bill which is a brandnew entitlement representing $1 trillion to $2 trillion of new spending.

What is that money going to be used for? It is going to be used basically to create a new government-inspired insurance program to compete with the private sector in the area of supplying health care. That would be OK except for the fact that as the Speaker of the House has said, that government plan is going to be used to save money. There is only one way that a government insurance plan can save money; it has to underprice the private sector. How does it do that? It uses the authority of the government to set price controls. It uses the authority of the government to control procedures that people are able to get. It uses the authority of the government to limit innovation because innovation is costly.

Inevitably because of that--price controls, controlling access to doctors and hospitals and procedures people can get, and controlling innovation--it inevitably deteriorates the quality of health care generally for the public.

Equally important, of course, under the scheme that has been developed that we have seen so far--although we have not seen the specifics because they are being developed behind closed doors on the Senate side. We have seen the House bill, but we haven't had a chance to read the 2,000-page bill. But the scheme that came out of the Finance Committee, equally important, the practical effect would have been that employers would have been encouraged to basically drop employees from their private insurance plan and cause those employees to migrate over to the public plan--intentionally, of course--through a whole series of activities which would make it much more practical for an employer simply not to insure people but to pay a penalty instead and put employees on a public plan.

There will be a natural contraction in the private insurance community because there would be a price-controlled government plan and a natural movement of people over to the government plan because the penalty for employers not insuring people is significantly less--at least in the HELP Committee bill--than the cost of insurance and, therefore, employers will look at it and say: It is cheaper to pay the penalty than insure the folks. So I will just pay the penalty and people can go over and get a public plan. They lose their insurance.

Mr. President, 180 million, 190 million people in this country have private insurance. They are pretty happy with their doctor and their health care. They may not be happy with the insurance company--most of us are not--but they are pretty happy with their doctors and their health care. If they are forced on to a public plan, that is going to put this bureaucrat between you and your doctor. It will mean if you have a government plan, you may have to call Washington to see your doctor.

It also means, as I said earlier, in order for the public plan to work and be cost effective in the sense of saving money, as the Speaker of the House says that is how she has to save money, it has to have price controls, it has to have control over access, it has to have control over innovation, all of which inevitably leads to delay and a lesser quality health care system.

The goal on the other side of the aisle--we all understand this because they have been public about this; there is no subtlety about it--is to move to a single-payer system where there is one insurer in the country, and that is the government.

The same group that is bringing us the swine flu vaccination program is going to bring us all our health care. Think about that. We don't have to go too far for an example of how the government has a hard time managing fairly large issues of health care when it comes to the practical application of taking care of people who need assistance. All we have to do is look at what is happening in the swine flu program to recognize that the government may not necessarily, in all instances, do such a great job of delivering health care.

For example, today you cannot get your swine flu vaccination in most places in this country because it is not available. Yet that is the system which a large percentage of members of the other party seem to desire, a single-payer system where government supplies it much along the lines of what we see in places such as Canada and England.

I don't think it is healthy for you. I don't think it is healthy for patients. It is certainly not healthy for our children because it means they are not only going to get a lesser health care system, they are going to get this huge bill, this massive bill which is going to come out of this $1 trillion to $2 trillion increase in the cost of government.

It is hard to understand--it has to be intuitive to people, and I know it is to most Americans--that if we increase the size of government by $1 trillion to $2 trillion, we inevitably end up passing on massive debt.

I ask for an additional 1 minute.

As I said, it has to be intuitive, and I know it is intuitive for most Americans, that if we increase spending of the government by $1 trillion to $2 trillion--and our estimate is this program costs $2.2 trillion in fact--and we cut Medicare to try to pay for that, or we try to raise taxes to pay for that, we are like a dog chasing a tail. It never will happen. The two ends just don't meet. They just don't meet. And what happens to the part that doesn't meet? That is called debt, and it goes to our children. It is not appropriate to do that after we have already put so much debt on their backs, especially in the last few months.

Mr. President, I yield the floor.

Will the Senator from Tennessee yield for a question, Madam President?

A 1,000-page bill is pretty big. It is about this big, and a 2,000-page bill is about this big. We are going to find out when we see it printed. That probably weighs a lot, 4 or 5 bricks, 10 bricks maybe?

Madam President, I say to the Senator from Tennessee, I presume it would be at least a week or maybe 10 days. I understand they are going to do an informal sort of ``on the back of an envelope'' estimate quickly. But the implications of this bill, 2,000 pages--it is akin to dropping 10 bricks on our seniors, isn't it? Doesn't this basically wipe out Medicare Advantage and massively impact Medicare benefits and move those savings over to fund a brandnew entitlement?

If the Senator will entertain one other question. The Senator, in his comments on this new 2,000-page piece of legislation, which started out at significantly less, made a point that I believe the last 5 years of this bill--it is a 10-year bill and, of course, it is going to go on forever. They basically start the taxes at day one, but they don't start the expenditures until year five. It turns out, as

I ask to be recognized as in morning business for 10 minutes.

Mr. President, one of the first rules in health care that doctors learn and health care providers learn is to do no harm. So, as we move down the road of this health reform effort, I think we ought to have that as our watchword also. The health reform effort which we pursue should do no harm to a lot of the elements of our health care system which are doing pretty well.

For example, there are a large number of Americans who get health insurance from the private sector--about 170 or 180 million--who are quite happy with their health care. They may have concerns with their insurance companies, legitimately, but they think their health care is pretty good. In fact, American health care is excellent.

As we move down this road toward health reform, we should not harm those folks. We should not push them into a public plan by creating a system which basically disincentivizes their employers to give them health care, incentivizes employers to pay a penalty rather than pay a health care premium, and moves people over to what are called health exchanges in a public plan. But that is exactly what the bill did as it left the HELP Committee, and who knows what it is going to do when it comes out of the secret room where it is being written right now, but I wouldn't be surprised if that is exactly what it does when it returns from this secret room. That will be harmful--harmful to all Americans who have health insurance and like what they have. They like the doctors they see, and they don't want to have the Federal Government basically supplying their health care and putting them

under a bureaucracy where the Federal Government stands between them and their doctors.

There are also a lot of senior citizens in this country today who are on something called Medicare Advantage. They find this to be an excellent Medicare Program. It gives them a lot of options they don't have under traditional Medicare, and they like it.

Under the Finance Committee plan, Medicare Advantage would have been eviscerated. Most Americans who get Medicare Advantage would lose it-- that simple--because the Finance Committee is anticipating a $400 billion reduction in Medicare spending, with the vast majority of that--or the majority of that coming out of the Medicare Advantage program, essentially eliminating Medicare Advantage as an option. People who are on Medicare Advantage would be pushed back into traditional Medicare. I don't think they are going to be very happy with that. That does them harm. That should not happen.

As part of the ``do no harm'' we should be pursuing in health care, we should not cut Medicare in order to fund a brandnew entitlement for people who are younger and who are not on Medicare, for the most part-- who obviously are not on Medicare--and cause people who are on Medicare and who are quite comfortable with what they are getting under Medicare, specifically Medicare Advantage, to lose that option in order to fund a brandnew entitlement with $400 billion in Medicare cuts.

In the new ``do no harm'' issue, there is the issue of innovation. Innovation is one of the great advantages our health care system has. You do not see innovation in England, of any significance, where they have a nationalized system. You do not see innovation in Canada, where they have a nationalized system, because innovation takes investment. To bring a new drug to the market requires 12 years and almost $1 billion. Someone has to put up that billion dollars. Somebody has to be willing to take a risk with their money, that they are willing to invest in this very chancy undertaking of trying to bring a new drug to the market, a new drug which will help millions of Americans, potentially.

But it takes money and it takes a willingness to invest in that type of research. Money follows return. If you set up a government-run program--which, inevitably, in order to reduce costs has to control prices--you reduce returns. It is absolutely guaranteed that if this country moves to a single-payer, government-run system, the innovation that is occurring in the area of pharmaceuticals and biologics, in the area of devices, will be dramatically chilled because there is not going to be the investment capital to pursue that type of innovation.

Granted, the government can try to do it through government research. But we know government research can never replace the creativity of the private sector and the risk-taking of a broader market that involves billions of dollars of investment.

But we also know investment follows return. If you use a government plan, which essentially can only save money by controlling prices and, thus, reduces returns significantly or reduces the number of years companies have control over the drug they produce, as is being proposed by the majority under the biologics-generic proposal down to 4 or 5 years, then you will not get the initial investment. Those dollars will go somewhere else. They will go into software, they will go into some other technology or some other activity where the return will be something they think is better.

So innovation will be chilled, significantly chilled. That does harm. That will do significant harm because one of the great things about our system, as I mentioned earlier, is that we are bringing these new drugs to the market, these new pharmaceuticals, these new biologics, these new devices which are saving lives and making people's lives better.

No other country is doing that at the rate we are doing it because our country has a system which encourages that sort of entrepreneurship and innovation. But that will be dramatically affected if we go down the road as proposed, at least by the bill that was produced by the HELP Committee, which the majority leader said he endorses, a bill that has a public plan in it.

In the ``do no harm'' category, who are the people we want to have take care of us? I know when I was in high school and in college, the best and brightest people I ran into wanted to be doctors. I liked that because I knew those folks, who were a lot smarter than I was, were going to be taking care of myself and my family if I went to see a doctor.

Almost universally we know the best and brightest people in our society, for the most part, go into medicine. They become doctors. That has been our culture for a long time. But that culture will change, change fundamentally, when every doctor in this country is working for the government, when basically the doctors become bureaucrats. What sort of incentive is there going to be for the best and brightest to move into medicine then? I think we do significant harm if we undermine that character of our culture.

Lastly--and this is the point I wished to talk about mostly--doing no harm, in a financial sense, means not creating programs which we cannot afford, for which we end up passing the bill on to our children. We know the proposal, as passed by the Finance Committee, costs between $1 and $2 trillion.

They will tell you: Oh, it only costs $800 billion. But that is because they used ``Bernie Madoff'' accounting. They said: We have a 10-year bill. We are going to spend 5 years on the program. We are going to pay for 5 years of the program, but we are going to have 10 years of income to pay for it. We are going to score as if it is a real bill over 10 years.

That is absurd. You would go to jail if you did that in the private sector, which Bernie Madoff did. But he has been released. He is on work release, I think, down here working with the Democratic majority on how to score this bill.

But as a practical matter, you have to match the full 10 years of expenditures with the full 10 years of what is alleged to be income. So if you have this plan fully phased in over 10 years, the cost, by our estimate, the Budget Committee staff estimate on the Republican side-- and it is a reasonable cost estimate--is about $1.8 trillion. The income alleged to occur under this bill--remember, it is coming from Medicare reductions and from taxes and fees--is alleged to be about $900 billion.

If you give them the benefit of the doubt, if they get all the income they claim they are going to get, you are still about $1 trillion off. Well, who pays for that? That goes on the debt. Our kids pay for that.

By the way, we skipped over one little item, which costs $250 billion, called the doctors fix. That is not even scored in this exercise, but we know we have to do it--more sleight of hand on the accounting side, a little bit more Bernie Madoffism. The real price of this bill is somewhere between $1 and $1.5 trillion, unpaid for. The total bills' real cost is somewhere over $2 trillion. We are talking 10-year figures here.

So you are going to grow the government by $2 trillion because you are going to create this brandnew entitlement, and you are going to take $400 billion from the Medicare recipients and use that to pay for it. Then you are going to take $500 billion in fees and taxes and you are going to use that to pay for it.

Well, you are about $1.2 trillion short. So who pays for that? Our kids. More debt. The problem we have today is, we have too much debt. We have too much debt. The debt is the threat to this country.

I ask for an additional 2 minutes.

We are facing a situation where our national debt is rising so fast because we are running deficits of over $1 trillion a year for the next 10 years. That is what is projected in the President's budget. We are essentially going to put ourselves in a position where we are going to be similar to a dog chasing its tail. We can never catch up with the amount of debt we are putting on the books.

Now we are talking about putting a $2 trillion expansion of the government on top of a government that already has a projected debt of 80 percent of gross domestic national product, which means our kids are going to inherit a

country they cannot afford to live in because their standard of living will be reduced in order to try to meet the obligations we are putting on their backs. It is not fair. It is not right.

Clearly, if we are going to do health reform, it should be done in a fiscally responsible way. It is not fiscally responsible to grow this government by $2 trillion, take money from Medicare to pay for it, and pass the majority of the cost of that bill on to our kids with more debt. It is not a responsible thing to do.

So in the arena of ``do no harm,'' what is presently proposed around here is going to do a lot of harm. That is unfortunate.

I yield the floor.