Floor Statements

Mr. President, let me say to my friend from Kentucky, I will not make a lengthy speech, but I am more than prepared to wait until you give your comments, and when you conclude, I will make my request.

Well, other Senators wish to speak as well.

Under current law, the estate tax disappears next year-- in 16 days--but snaps back to a 55-percent rate the year after. I believe that is not sound policy. The estate tax should not be zero in 1 year and then be snapped up to a very high rate in the subsequent year. As the Chair knows, current law has the rate slowly declining and the exemption slowly increasing. The individual exemption now is $3.5 million. If Congress takes no action, then beginning on January 1 of next year, that could be zero. The estate tax could be zero.

But another consequence that will occur too is that all heirs of the estate will find that the property they receive will be subject to a carryover basis. Currently, today, property received by heirs is subject to a step-up basis. They get the new basis and the value of the estate as of the date of the decedent's death. If this law expires, there would be no estate tax paid next year on any estate, but also the heirs will no longer have a step-up basis on the assets they receive.

There are several problems with letting the current law expire next year. One is the yo-yo effect. It is an outrage if Congress allows estate taxes to change so much, particularly near the end, that is, a lower rate this year with an expiration to a zero rate next year, and also changing a step-up to a carryover basis, and the following year up at a much higher rate.

The second problem, frankly, is I do think there should be an estate tax on the highest value estates. I think that is good policy.

Third, people don't talk much about this, but I think we should focus on it. If current law expires, every heir will be subject, as I said, to a carryover basis in determining his or her taxes when that taxpayer, the heir, at a later date sells the property and has to pay capital gains. What are the problems with that? First of all, massive record-keeping confusion--massive.

Soon, I am going to propose an extension in the current law. If that is not passed and if we do not extend the estate tax law, all taxpayers, all heirs, will be subject to massive confusion in trying to determine the value of the underlying assets when they later try to sell. The value of the step-up basis to the heir obviously is a lower capital gains tax, but there is also certainty. People pretty much know the value at the death of the decedent.

I cannot emphasize strongly enough how much confusion there will be on January 1, if my consent is not agreed to. There will be such confusion because of the heirs receiving property subject to a carryover basis, not a step-up basis, let alone the capital gains tax they will have to pay when they sell that capital asset at a subsequent date. Currently, when the heir receives that capital asset, because it is a step-up basis, there is much less capital gain paid, presumably, by that heir who sells the asset.

Here it is mid-December. The only responsible thing to do to prevent the yo-yo effect--how in the world can people look at planning in their estates if the law goes up and down and changes all the time? It has kind of leveled off, as I said, at the 2009 rates and people have a pretty good idea what those are. Some in this body would like to see the rate go lower and exemptions go higher. Some in this body would like to see other changes. We kind of leveled off at 2009 estate tax laws, where the rates are set and the exemptions are set. Most people in the country are anticipating Congress will eventually pass that.

It would be irresponsible to further the yo-yo effect by allowing current law to expire and create all this massive confusion, this chaos that will apply to heirs of the estates on January 1 because of this change in capital assets from step-up to a carryover basis, among other things.

Unanimous Consent Request--H.R. 4154

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of H.R. 4154, which was just received from the House and is at the desk; that the Baucus substitute be considered and agreed to, the bill, as amended, be read the third time and passed, the motion to reconsider be laid upon the table; that any statements relating to the measure be printed in the Record without any further action or debate.

Mr. President, I don't think this is the way to do business here; that is, to enact estate tax law here on the floor of the Senate without any notice, and also because there are so many considerations Senators on both sides want to look at. It would be improper. I object.

Mr. President, I yield 5 minutes to the Senator from New Mexico.

Mr. President, I ask unanimous consent that Senator Kyl be permitted to speak for up to 5 minutes and that following his remarks, the hour of controlled time on the health care legislation begin.

Mr. President, clearly, the right public policy is to achieve continuity with respect to the estate tax. If we do not get the estate tax extended, even for a very short period of time, say, 3 months, we would clearly work to do this retroactively so when the law is changed, however it is changed, or if it is extended next year, it will have retroactive application.

The uncertainty for tens of thousands of middle-class families needs to stop. That is why retroactive application of anything that passes next year makes sense.

Right now, 99.7 percent of estates do not have to worry about the estate tax. If we do not extend current law, many heirs are going to have to worry about capital gains. There is the potential for high- income households to take advantage of the temporary reductions in the rates for gift taxes and temporary elimination of GST to do massive estate planning--potentially benefiting those households by billions of dollars at the expense of U.S. taxpayers. Beyond this, what Congress is doing is a huge benefit for lawyers and accountants who do all the estate planning.

The right thing to do is to extend current law for a brief period of time to get our act together to decide what estate laws should be. That is the right thing to do. I am very disappointed that the other side of the aisle does not let us do the right thing--at least extend current law for a while until we know what the estate tax law should be.

Mr. COBURN addressed the Chair.

Mr. President, for the benefit of Senators, we are now back on the health care bill. Let me lay out today's program.

It has been nearly 4 weeks since the majority leader moved to proceed to the health care reform bill. This is the 16th day that the Senate has considered the bill.

The Senate has considered 23 amendments or motions and conducted 18 rollcall votes.

Today the Senate will debate the motion to commit regarding taxes offered last night by the Senator from Texas, Mrs. Hutchison. Under the previous order, later this morning, we expect that the Senator from Vermont, Mr. Sanders, will offer his amendment No. 2837 on a national single-payer system.

This morning, the first hour of debate will be equally divided and controlled between the two leaders or their designees. The majority will control the first half hour and the Republicans will control the second half hour.

We expect the Senate to conduct votes today in relation to the Hutchison motion and the Sanders amendment.

Also, today, the House of Representatives is scheduled to act on the Department of Defense Appropriations Act which also contains a number of vital year-end measures. We look forward to receiving that measure in the Senate as well.

I yield 10 minutes to the Senator from Ohio and then 15 minutes to the Senator from Delaware.

Mr. President, reserving the right to object, I would like to just remind our colleagues, I have sought it, and I think it has been basically a very forthright, open process we have conducted here. Certainly in the Finance Committee--I see my colleague from Iowa on the floor--it was totally transparent for months upon months, with hearing upon hearing. We posted amendments in the Finance Committee on the Internet in advance of consideration.

I have never been part of a more transparent process since I have been here, frankly, at least for something of this magnitude over this period of time. In fact, one reporter even said to me: Senator, is this the new way we do things around here? It is so transparent, so bipartisan, and so forth. I said: I don't know. I sure like it that way.

I also remind all of us that Senator Reid's amendment was made available on November 18 of this year, and 3 days later, on the 21st, we voted for cloture on the motion to proceed. Then, 12 days after the Reid amendment was made available, we finally began debate on the bill. And here we are, nearly a month later. So this bill has been out here.

The Senator mentioned, I note, having in mind the managers' amendment, which he has not seen and, frankly, this Senator has not seen either. I have some ideas what is in it, but I have not seen it myself.

I think as a practical matter this will be available for 72 hours, as the Senator suggests. Why do I say that? I say that because it is my expectation that Senator Reid's managers' amendment will be filed very quickly, maybe in a day or two. It is also my expectation that we will then proceed, according to expectations here, to the Defense appropriations conference report, which we will then be working on for several days. And probably a cloture motion might be filed on the health care bill--on the managers' amendment probably not until after we do Defense appropriations. So during the interim, everyone is going to be able to see, at least for more than 72 hours, the contents of the managers' amendment in the health care bill which Senator Reid is going to be filing. So as a practical matter, I think it is going to happen.

I cannot at this point agree to the request to lock that in for 72 hours, but I think as a practical----

Yes.

Sure.

I think that is a good idea. I think it is going to happen.

I cannot at this time but, again, saying it is my expectation it will be available for more than 72 hours.

I thank the Senator. I object.

Mr. President, reserving the right to object, I certainly agree with the basic underlying import that we should know what we are voting on here. But I must say to my good

friend from Oklahoma, I cannot certify that Members of the Senate will understand what they are reading. That presumes a certain level of perception on my part in understanding and delving into the minds of Senators that not only have they read but they have taken the time to understand. And what does ``understand'' mean? Understand the second and third levels, the fourth level of questions? I think it is a practical impossibility for anybody to certify that any other Senator has fully understood. They may read, but they may not fully understand for a whole variety of reasons. So I cannot certify that.

I have to object.

The Senator is always free to make any representations he wants. If he wants to certify he has read it and certify that he has understood it, that is the Senator's privilege.

I can't certify that every Member of the Senate has done anything around here. Neither can the Senator from Oklahoma. That is an impossibility. But if the Senator wants to certify he has read it, that is great, and understands it fully, that is great, on any measure--not just this measure but any measure. But I can't certify that for 100 different Senators, on any measure. That is up to the individual Senators and that is up to their mental capacities and up to their initiatives and imaginations and conscientiousness and so forth. I can't certify to that.

Mr. President, I ask unanimous consent that the Senator from Vermont be recognized to proceed for at least a half hour.

Mr. President, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry be authorized to meet during the session of the Senate on December 16, 2009.

Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on December 16, 2009, at 1:30 p.m.

Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on December 16, at 11:30 a.m., in room SD-366 of the Dirksen Senate Office Building.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet during the session of the Senate on December 16, 2009, at 10 a.m.

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate on December 16, 2009, at 3 p.m., in room SD-226 of the Dirksen Senate Office Building, to conduct a hearing entitled ``Judicial Nominations.''

Mr. President, I ask unanimous consent that the Committee on Veterans' Affairs be authorized to meet during the session of the Senate on December 16, 2009.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs' Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security be authorized to meet during the session of the Senate on December 16, 2009, at 2:30 p.m. to conduct a hearing entitled, ``Tools to Combat Deficits and Waste: Enhanced Rescission Authority''.

Mr. President, I ask unanimous consent that the Committee on the Judiciary, Subcommittee on Human Rights and the Law, be authorized to meet during the session of the Senate on December 16, 2009, at 10:30 a.m., in room SD-226 of the Dirksen Senate Office Building, to conduct a hearing entitled ``The Law of the Land: U.S. Implementation of Human Rights Treaties.''

Mr. President, for the benefit of all Senators, let me lay out today's program.

It has been more than 3\1/2\ weeks since the majority leader moved to proceed to the health care reform bill. This is the 14th day the Senate has considered it. The Senate has considered 18 amendments and motions. We have conducted 14 rollcall votes.

Today, the Senate will continue debating the Dorgan amendment on prescription drug reimportation and the Lautenberg alternative amendment to that amendment and we will continue debating the Crapo motion on taxes, for which I have filed a side-by-side amendment as well.

Under the previous order, there will be 5 hours of debate, with each of the following Senators controlling 1 hour: The Senator from Idaho, Mr. Crapo; the Senator from North Dakota, Mr. Dorgan; the Senator from New Jersey, Mr. Lautenberg; the Republican leader and this Senator.

The Senate will recess from 12:45 to 3:15 for party conferences.

Upon the use or yielding back of the 5 hours of debate, which is likely to be between 5 o'clock and 6 o'clock this evening, the Senate will proceed to vote in relation to four amendments in this order: First, my side-by-side amendment on tax cuts; second, the Crapo motion to commit on taxes; third, the Dorgan amendment No. 2793 on drug reimportation; and the Lautenberg side-by-side amendment No. 3156 on drug reimportation.

Each amendment will need to get 60 votes or else be withdrawn.

Upon disposition of these amendments and the motion, the next two Senators to be recognized to offer a motion and an amendment will be, first, the Senator from Texas, Mrs. Hutchison, to offer a motion to commit regarding taxes; and, second, the Senator from Vermont, Mr. Sanders, to offer amendment No. 2837 on single payer.

Amendment No. 3183 to Amendment No. 2786

Mr. President, under the previous order, it is in order for this Senator to offer a side-by-side amendment to the motion to commit, offered by the Senator from Idaho, Mr. Crapo, and pursuant to that order, I call up my amendment No. 3183.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. President, during the Presidential campaign, President Obama promised not to raise taxes on Americans who earn less than $200,000 a year or American families who earn less than $250,000 a year. That was his promise. This bill keeps his promise.

This bill will provide tax credits to help American families, workers, and small businesses to buy quality health insurance plans through new fair and competitive marketplaces called insurance exchanges.

The Congressional Budget Office expects that by the year 2019, 25 million Americans will buy health insurance plans through the new exchanges. The vast majority of those Americans--about 19 million--will receive tax credits; that is, tax reductions, or help paying their copays and other out-of-pocket costs. These tax credits will reduce their health insurance costs by nearly 60 percent.

This bill does not raise taxes on the middle class. This bill is a tax cut for Americans.

Over the next 10 years, the health care reform bill will provide $441 billion in tax credits to buy health insurance for American families, workers, and small businesses--$441 billion in tax credits. Americans affected by the major tax provisions of this bill will receive an overall tax cut of 1.3 percent in the year 2017. That is a total of $40 billion. That is an average of almost $450 for every taxpayer affected. That same year, 2017, low- and middle-income taxpayers who earn between $20,000 and $30,000 a year will see an average Federal tax decrease of nearly 37 percent. I will repeat that. I think it is astounding. People with incomes between $20,000 and $30,000 a year will receive an average Federal tax decrease of nearly 37 percent. In that same year, 2017, the average taxpayer making less than $75,000 a year will receive a tax credit of more than $1,300. In 2019, 2 years later, that tax credit will grow to more than $1,500.

Without this tax cut, many individuals and families will continue to forgo health care because it costs too much. We make it easier for people to buy health care with those tax cuts.

In addition to a tax cut, this bill also represents increased wages in the pockets of millions of Americans. Even my colleague from Idaho agrees that as a result of this bill, Americans will see increased wages. He said that exact thing on the floor last week. As a result of this bill, many Americans will see increased wages.

Senator Crapo gave the example of an employee, the value of whose health insurance decreased but whose overall compensation did not decrease. As a result, the employee would receive additional wages.

Why are workers going to complain that they are paying more in wages because they have more money in their pocket? If incomes are going up, their wages are going up. Clearly, their taxes are going to go up correspondingly, but obviously the taxes are not going to go up by as much as the wages.

I have a letter from the Congressional Budget Office, dated November 18, that states just that. On page 18, the Congressional Budget Office says:

If employers increase or decrease the amount of

compensation they provide in the form of health insurance

(relative to current law projection), the Congressional

Budget

Office and the Joint Committee on Taxation assume that

offsetting changes will occur in wages and other forms of

compensation--which are generally taxable--to hold total

compensation roughly the same.

I have a chart behind me that shows that very point for each of the years this bill is in effect. Looking, first, over to the left--the chart shows from 2013 up to 2019, but on the far left, the green is the percent of total tax revenue due to increased wages. That is wages increasing. The white is the percent of total tax revenue due to excise taxes, the increased taxes the person will have to pay. Wages far outstrip the taxes. The increase in wages is far greater, according to the Congressional Budget Office and the Joint Committee on Taxation.

Just to repeat, as that chart illustrates, the overwhelming majority of revenue raised from the high-cost insurance excise tax will come from increased wages. Only 17.5 percent of the revenue will be attributable to the excise tax. The rest, more than 82 percent, will come from employees getting more than their compensation wages and less in inefficient health coverage.

I urge my colleagues to recognize the Crapo motion to commit for what it is--and what is that? It is an attempt to kill health care reform. That is all it is all about, nothing more, nothing less. Senator Grassley said as much last week. Senator Grassley asked us to vote in favor of the motion to commit ``to stop this process right now.'' That is a direct quote.

We must not stop this process. We must not stop moving forward in our efforts to reform health care. Indeed, we must move forward aggressively. Every day we delay, 14,000 Americans lose their health insurance. Every day we delay, 14,000 Americans lose their health insurance. In just a 2-week period, one in three Americans will go without health care coverage at some point. We cannot afford to stop working toward reform. We must reject any attempt to eliminate the very provisions from this bill that provide Americans with a tax cut in an attempt to stop health care reform. Despite Republican claims that they are trying to protect Americans from tax increases in this bill, the facts are this bill is a tax cut for most Americans.

On a related matter, there has been some discussion about the Office of the Actuary analysis of the Senate bill. Let me cover two very key points from that letter.

The Actuary at HHS concludes that this legislation extends the life of the Medicare trust fund by 9 years--9 years. We know the Medicare trust fund is in a precarious position until, roughly, 2017. There are some estimates that this underlying bill would increase the solvency of the trust fund for 4 to 5 more years, say to 2022, roughly. The Actuary, the person who number crunches over at HHS, concluded this legislation will extend the life of the Medicare trust fund by 9 years. That is no small matter. Seniors, near seniors, are very concerned about the solvency of the health care trust fund. This legislation extends the solvency of the health care trust fund by 9 years.

So just think, if this legislation is not passed, the solvency of the health care trust fund will not be extended by 9 years. The Actuary says, the Medicare trustees say it will probably start to become insolvent, the Medicare trust fund, the Medicare trust fund will become insolvent in just a few years--2017. Clearly, it is very important to extend the solvency of the Medicare trust fund. How does this legislation extend the solvency of the trust fund? It is very simple. We cut out a lot of the waste. We cut out a lot of the inefficiency. We make the system work better so the fund is extended for 9 more years.

In addition, the Actuary says this legislation, by the year 2019, will result in about a $300-per-couple reduction in Part B premiums. In addition to that, the Actuary concludes the legislation will result in about a $400-per-couple deduction in cost sharing. If you add the two together, that is about $700. So by the year 2019, as a result of this legislation, according to the Actuary--it is in black and white there-- it says right there, in print, there will be about a $700 reduction in premium Part B and out-of-pocket costs for seniors. That is no small matter. It is a reduction.

On the other side of the floor, we sometimes hear all this rhetoric about increases. It is just that--it is rhetoric. The actual analysis shows a reduction.

I also hear rhetoric on the other side about this legislation resulting in increased premiums for people. Not true. The Congressional Budget Office has concluded that for 93 percent of Americans, there will be a reduction in premiums--a reduction in premiums. To be fair, for those who are already employed, the reduction is not huge, but it is a reduction, nevertheless. It is about a 3-percent reduction in premiums. That is a reduction. We have to keep working to make it an even greater reduction. I daresay--in fact, I know as sure as I am standing here--the reduction will be greater. Why will it be greater? Because a lot of the provisions in this legislation--in my view, the Congressional Budget Office hasn't fully analyzed provisions such as delivery system reforms. We start to bundle competent care organizations. We start pilot projects. The result of that will be a reduction in costs and therefore a reduction in premiums.

Also not calculated is the Commission which will look at productivity. That is not included in the CBO analysis. If that were included in the CBO analysis, the reduction would be even greater. We are talking about the remaining 7 percent--remember, I said 93 percent would get a reduction in premiums according to CBO. The remaining 7 percent don't get a reduction, but what do they get in return? They get much better insurance because we have insurance market reform in this legislation. No more preexisting conditions. No more rescissions. No more denial based on health status. No more company limitations on annual losses. No more limitations on lifetime losses. So for the same premium, they are going to get a lot better quality. Instead of buying a used car, they are going to get a new car for roughly the same price.

So the analysis of this legislation is very clear: Reduction of premiums, CBO says so; extension of solvency of the trust fund, CBO and the Actuary say so; a reduction in premiums and out-of-pocket costs for a couple by $700 by the year 2019. That is what the Actuary says.

So this legislation lives up to the promise we made earlier. It does not raise taxes for people making under $200,000. I think the legislation should clearly be passed.

Let me say this too. Someone once said--and I will conclude here-- that the status quo is really not the status quo. If this legislation is not passed, the result is not the status quo; the result is we move backward. We have two choices. Either we move forward as a country and seize this opportunity to tackle health care reform and do our very best to get it right or we don't; we do nothing, and we keep sliding backward. Think of the repercussions of not passing this legislation. Think of it. First of all, tens of millions of people will not have health insurance. That, in itself, is pretty profound. Second, we will not have health insurance market reform. We will still have denial based on preexisting conditions, which is basically what the other side is arguing for.

We would not cut down health care costs, which our businesses need so much, and families need so much, and our budgets need so much. Remember, I mentioned the legislation extends the solvency of the Medicare trust fund.

That is emblematic of some of the savings that we have in other government programs, too, because health care costs are rising so much. Medicare is in tough shape, and so is Medicaid because health care costs are rising so much. The CBO and the Actuary say we are controlling health care costs.

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

Mr. President, I would like to remind us why we are here--health care reform--and why health care reform is so important. I would like to go through the costs of inaction, what the consequences are if we do not pass health care reform.

First of all, rising health care costs are wrecking the lives of Americans. In 2007, 62 percent of bankruptcies were due to medical costs. This legislation will help reduce the rate of growth of health care costs. In fact, the President's Council on Economic Advisers and the President just announced today or yesterday there will be a 1- percent reduction in national health care costs. CBO basically said this bill is deficit neutral, and it will have an effect on reducing health care costs. This bill will reduce health care costs.

A Harvard study found, in addition, when people do not have health insurance, they are more likely to be much more ill.

Harvard found every year in America lack of health insurance leads to 45,000 deaths. If Americans do not have health insurance, it leads to 45,000 deaths in our country. That is intolerable. How can we in the United States of America--we pride ourselves as the biggest, the strongest, the most moral country on the globe. How can we allow 45,000 deaths just because somebody does not have health insurance? People without health insurance have a 40-percent higher risk of death than those with private health insurance.

How does this bill affect Medicare? According to the CMS Actuary, Medicare is projected to go broke in about the year 2017. CMS has estimated this will actually extend solvency to the year 2026.

That is very important, Mr. President. It is an important message to seniors--that the Medicare trust fund solvency will be extended under this legislation for at least 9 more years, beyond 2017. I wish it were further, but that is a lot better than not extending solvency-- extending solvency for that period of time.

The bill also would increase the percentage of people who have health insurance from about 83 percent to 94 percent. That, too, is no small matter.

Our legislation would reform the insurance market to protect those with preexisting conditions. It would prevent insurance companies from discriminating and capping coverage, and it would require insurance companies to renew policies as long as policyholders pay their premiums.

Let me just say a bit more, with a little more precision, about premium costs. The Centers for Medicare & Medicaid Services, the Office of the Actuary, confirmed this. They confirmed that this legislation will cover 33 million Americans who are currently uninsured and will do so while significantly reducing Medicare costs and Medicaid spending. Think of that. This legislation will cover 33 million Americans who are currently not covered at the same time reducing Medicare and Medicaid costs.

Don't take my word for it. That is the projection of the Chief Actuary of CMS. In addition, as I mentioned, the Chief Actuary says this will extend the life of the trust fund for 9 years.

Moreover, this legislation reduces the cost to seniors, to a family, by $300 by 2019. Medicare Part B premiums, according to the Actuary, will be $300 lower than it otherwise would be. The out-of-pocket costs would be, for a couple--I think it is roughly $400. That is a total of about a $700 reduction for a couple in 2019. So a reduction in Medicare Part B premium costs and a reduction in out-of-pocket costs.

Essentially, the Actuary concludes, and I will read the quote:

The proposed reductions in Medicare payment updates for

providers, the actions of the Independent Medicare Advisory

Board, and the excise tax on high-cost employer-sponsored

health insurance would have a significant downward impact on

future health care cost growth rates.

Again, a ``significant downward impact on future health care cost growth rates.'' The Actuary says the bend in the cost curve is evident. The Actuary also concludes that in 2019 health expenditures are projected to rise by 7.2 percent with no change but 6.9 percent under the proposal. That is, under the proposal, health care costs will rise at a lower rate than they will if this legislation does not pass.

In addition, this report shows how health insurance costs for millions of Americans will reduce premiums by 14 to 20 percent for people in the individual market. Actually, that was the Congressional Budget Office that reached that conclusion and not the Actuary. The Congressional Budget Office has basically concluded that for 93 percent of Americans premiums will be lowered. For 93 percent of Americans premiums will be lower.

It is true that for those who are employed--the five-sixths of persons who now have health insurance--their premiums would not go down a heck of a lot, but they will start going down due to this legislation. For the 7 percent whose premiums are not reduced, they get a better deal. That 7 percent will have much higher quality health insurance than they now have, basically because of no more denial of care for preexisting conditions, market reform,

rating reform, no more rescissions, et cetera. So this is a very good deal.

I would like to say one word, too, on health care cost reduction. A lot of Senators have quoted an article by Dr. Gawande from The New Yorker magazine--I think it was dated June 2--explaining the phenomenon of geographic variations in this country and why health care costs are much higher in some parts of America and much lower in other parts of America, which is due mostly to the way we pay health care providers and doctors in the system, therefore explaining the basic reason there is so much waste in the American health care system.

Dr. Gawande published another article in The New Yorker a week or 2 ago, and in that article he basically says of all the ideas that have been suggested by economists, by practitioners, by providers, and people worried about the rise of health care costs in America, all of the ideas are in this legislation. They are all in here. All the ways to work to start to lower health care costs are in this legislation.

He also says the pilot projects and the demonstration projects in this legislation are good because you have to work a little bit, you have to experiment a little, you have to try this and try that to see where bundling works and see where it does not work. But the provisions are there.

We can all be quite confident that this administration is going to do its level best to make sure these projects work--that is the bundling, the moving toward quality as a basic reimbursement in the way of quantity. The administration is going to work very hard to make sure they work. I will say, too, as chairman of the Finance Committee, the committee of primary jurisdiction over these subjects, that we are going to have a lot of oversight hearings next year because it is very much in the interest of the American people to make sure this legislation works and works very well. Clearly, with aggressive oversight hearings next year we can help make sure that happens.

One other point. This bill represents a net tax cut, not a tax increase--a net tax cut for individuals, not a tax increase. Why do I say that? I say that because that is what the Joint Committee on Taxation says. What is the Joint Committee on Taxation? It is a committee, an organization in Washington that serves both the House and the Senate. It serves Republicans and Democrats. There is not one iota of partisanship in it. It is totally objective, very solid, very confident. They are the outfit we rely on when we write tax legislation.

Basically, they say by the year 2019, Americans will see a net tax cut of $40 billion, and that tax cut is equal to an average tax decrease of more than $440 per affected taxpayer. And for low- and middle-income taxpayers making less than $200,000, this cut is even greater. The average tax credit is equal to more than $640 per affected taxpayer in the year 2019.

To repeat: This bill, according to the Joint Committee on Taxation, is a net tax cut for individuals--a cut, not an increase but a cut-- almost as great as the 2001 tax cut. Many of us know how great that was. This is the biggest tax cut since 2001--this legislation.

I also want to discuss a couple other points. A lot of people say: Well, gee, some of this does not take effect for several years. Let's go through what takes effect right away, in 2010. What are the provisions that take effect right away? I will read the list.

The first is--the fancy term is ``pools''--to help people with preexisting conditions get access to health insurance even before the actual denial of preexisting conditions kicks in. There is $5 billion of Federal support for higher risk pools providing affordable coverage to uninsured persons with preexisting conditions. That takes effect right away.

Second, reinsurance for retiree health benefit plans. Basically, that means there is immediate access to Federal reinsurance for employer plans providing coverage for early retirees--for ages between 55 and 64. Essentially, that means extra dollars are available for the outliers. That is a fancy term for saying the high-cost people in that age group--55 to 64.

In addition, we extend dependent coverage for young adults. Today, a young couple buys health insurance for themselves and their kids, and once the child is 21 there is no more health insurance. We raise that level to the age of 26 so that person can stay with the family and have the family's health insurance.

Moreover, this legislation requires that health insurers must provide prevention and wellness benefits but no deductibles and no cost-sharing requirements. That, too, will help quite a bit. That takes effect right away.

Moreover, right away, in 2010, the legislation prohibits insurers from imposing annual and lifetime caps. Not later but right away there is a prohibition against insurers from imposing annual lifetime dollar limits--a big problem today.

Moreover, right away, this legislation will stop insurers from nullifying or rescinding health insurance policies when claims are filed. Rescissions are a big problem today. In 2010, when this legislation passes, no more rescissions of health care policies.

Moreover, this legislation sets minimum standards for insurance overhead costs to ensure that most premium dollars are spent on health benefits, not costly administration or executive compensation and profits. We also require public disclosure of overhead and benefit spending and premium rebates. That is right away.

What about small business persons--small businessmen? This legislation offers tax credits to small businesses with low wages to make covering their workers more affordable. It takes effect in 2010, and credits of up to 50 percent of insurance premiums will be available to firms that choose to offer coverage.

I might also say there are stronger small business provisions, too, that I am quite certain will be in the managers' amendment. Greater incentives to the tune of about $12 billion to $13 billion for small businesses will be in this legislation and will also be in the managers' amendment.

Moreover, what will take effect next year, not later, is we have closed the coverage gap for the Medicare drug benefit. Basically, that means we have closed the doughnut hole--we are starting to close the doughnut hole. Seniors pay very high prices for brand-name drugs if they are in that so-called doughnut hole. We close it so that seniors don't have to pay those high prices anymore.

There is public access to comparable information, more transparency, and I could go on and on and on. There are many provisions which take effect right away and not at a later date.

Mr. President, I believe that debate is drawing to a conclusion on the four matters under consideration. We may be able to have votes as soon as 5:30.

I see my colleagues from Kansas and Iowa on the Senate floor, and I yield the floor.

Mr. President, I ask how many minutes I have remaining.

I yield 5 minutes to my good friend from Iowa who I think is

going to be speaking against my position but he is a good fellow so I think he should have 5 minutes.

How much time remains?

On this side? Does anyone have remaining time?

Mr. President, I yield myself 5 minutes.

I would like to make it clear, essentially this legislation does several things. This is the core part of this legislation. What is it? First, this legislation very significantly reforms the health insurance industry, especially for people who individually buy insurance and also for people who buy for a small company and even buy insurance for a large company. It is insurance market reform. It stops insurance companies from, frankly, undertaking practices which are un-American; that is, denying people coverage based on preexisting conditions, denying them health insurance because they have some kind of preexisting something--that is ridiculous--or saying: You can't have health insurance because you have some other health care status or saying: Sure, we will give you a policy, then a month, 2 months later, rescind it willy-nilly or putting in restrictive limits on what the company will pay during your lifetime or what the company might pay in health insurance benefits for a year.

In addition, this legislation reforms what are called rating provisions that States have. States basically allow companies to charge whatever they want, if you are a little older compared to if you are younger, if you are a woman compared to a man. There are lots of different ways States allow insurance companies to charge based upon different categories. So, No. 1, insurance market reform. This legislation stops some outrageous practices that insurance companies practice today.

No. 2, this legislation begins to get control over health care costs. We have to start to get control over health care costs. This legislation does so. It also is deficit neutral. It does not cost one thin dime for us to enact this legislation. It is all paid for. It provides health insurance coverage. About 31 million Americans who currently do not have health insurance will have health insurance, if this legislation passes. I don't have to remind my colleagues of the importance of health insurance. Insurance market reform that lowers the cost of health care in this country, provides full coverage and, equally important, begins to put in place delivery system reforms. That is kind of wonkish, but it is one of the most important parts of this bill, starting to change the way we pay doctors and hospitals, pay based more on quality rather than quantity, start putting into effect different systems that sound kind of wonkish but will be important over 3, 4, 5 years. It is bundling, group homes. It is lowering the practice of hospitals that readmit too quickly after a patient is discharged.

There are so many reforms here. I strongly urge everyone to keep their eye on the ball. Insurance market reform in this legislation, lowering costs in this legislation, lowering taxes in this legislation, insurance coverage for 31 million Americans who today do not have it, and starting to put in place payment reforms which will help get this country on the right path so, after several years, we have a health care system we are all proud of, one that gets rid of all the waste we have in the country today. We pay $2.5 trillion a year in health care, about half public and half private. People who study this say we waste as much as $800 billion a year--not million, billion--in fraud, waste, dollars that don't go directly to health care. This legislation starts to get a handle on that. It stops all the waste. You get a better handle on fraud so after 2 or 3 years, we will have something we are very proud of. Let us remind ourselves, again, if we don't pass this legislation, we will rue the day we didn't because we will have to start all over again, 2 or 3 or 4 or 5 years from now, and the problem will be much worse. The cost for families is going to be much greater, the cost to American businesses much greater. Our budgets are going to be in much worse shape, Medicare and Medicaid. This legislation extends the solvency of the Medicare trust fund for another 9 years.

Remember the bottom line, remember the basics. Let's not get too caught up in the details of the weeds and get distracted by a lot of stuff that is not the core of this bill. The provisions I outlined are compelling reasons why this legislation must pass and why it would be so good for America.

I reserve the remainder of my time.

Mr. President, I ask unanimous consent that at 6 p.m. today, the Senate proceed to vote in relation to the amendments and motion specified in the order of December 14 regarding H.R. 3590; that prior to each vote, there be 2 minutes of debate, equally divided and controlled in the usual form; that after the first vote in the sequence, the succeeding votes be limited to 10 minutes each; further, that all provisions of the December 14 order remain in effect.

Mr. President, parliamentary inquiry: The order that was just entered provided for 2 minutes, equally divided, before, I suppose, the vote on each of the amendments. Is that in addition to or is that a part of the time that has been allocated to Senators?

I thank the Chair.

So, Mr. President, if the Senator from Montana wishes to speak on his amendment, he has 5 minutes, plus 2 minutes.

Excuse me. The time is equally divided. Thank you.

Mr. President, I just want to make it as clear as I can that the Congressional Budget Office essentially says that premiums will go down for about 93 percent of Americans. I say that because I think my good friend from Idaho was leaving a different impression.

But let me just summarize what CBO says. I would put a chart that CBO provided in the Record, but under the Senate rules we cannot put charts in the Record. So I am just going to summarize what this chart says.

OK. Seventy percent of Americans will get their health insurance in what is called the large group market. That is people who work for larger employers--70 percent. CBO said for that 70 percent of Americans, premiums will go down a little bit. It will be about a 3- percent reduction in premiums.

The next group of Americans getting health insurance are in what is called the small group market. Those are people in small companies, small businesses, primarily. That is where 13 percent of Americans get their insurance. CBO says for that 13 percent, maybe the premiums will go up between 1 percent or down 2 percentage points overall. But for those folks, those small businesspeople who get tax credits--

and there are some very significant tax credits in this bill, and I think it will be even more significant when the managers' amendment is out--CBO says, even with modest tax credits, those premiums will go down 8 to 11 percent.

That is, for 13 percent of Americans who have insurance, their premiums will go down 8 to 11 percent, among those who have credits.

Let's look at what is called the nongroup market, the individual market. That is 17 percent of Americans. For those folks, if you compare their current insurance with what they will have in the future, those premiums will go down 14 to 20 percent--down 14 to 20 percent-- according to CBO.

In addition, though, CBO says that persons who have tax credits--we are talking now about the individual market--those people will find, on average, their premiums will go down 56 to 59 percent. Remember, 17 percent of Americans buy insurance individually. Of that 17 percent, 10 percent, because of tax credits in this bill, will find their premiums go down 56 to 59 percent.

The 7 percent that are remaining--remember I started off by saying for 93 percent, there will be a reduction. The 7 percent remaining will find that because of better benefits, their premiums will go up 10 to 13 percent, but they will have a lot better benefits. They will have a lot higher quality insurance than they have today. Frankly, my judgment is, the higher quality insurance they have, because of this legislation, will outweigh the increase in the premiums.

But anyway, for 93 percent, premiums will go down.

Amendment No. 3183

Mr. President, let me speak a little bit on my amendment which, as I understand it, is going to be the first amendment voted on.

I remind my colleagues that the underlying legislation is a tax cut bill. It cuts taxes. It cuts taxes very significantly. Over the next 10 years, for example, this bill will provide Americans with a $441 billion tax cut to buy health insurance--$441 billion in tax credits to buy health insurance. Credits are tax reductions.

In the year 2017, taxpayers who earn between $20,000 and $30,000 a year will see an average tax cut of nearly 37 percent. These are people who have a hard time making ends meet. People who earn between $20,000 and $30,000 will see an average tax cut of 37 percent. That is according to the Joint Committee on Taxation.

In addition, 2 years later, the average taxpayer making less than $75,000 a year will receive a tax credit of $1,500. Just to repeat, the average taxpayer making less than $75,000 a year will receive a tax reduction--a tax credit--of more than $1,500.

The Crapo motion to commit is really an attempt to kill health care reform. It is, thus, a plan to keep Americans from getting these tax cuts. I think we want Americans to get these tax cuts. If the Crapo motion is successful, Americans will not get any of these tax cuts. We want them to. The underlying bill gives Americans these tax cuts. Therefore, I think we should reject this procedural maneuver designed to kill the tax cuts in this health care bill.

That is what my side-by-side amendment says--that is going to be the first amendment voted on--and that is, let's vote to keep our current tax cuts. I urge a positive vote on my amendment and a ``no'' vote on the Crapo motion, which eliminates the tax cuts, which is not what I think most Americans want. So I urge my colleagues to vote for the side-by-side amendment.

Mr. President, I yield the floor.

Madam President, essentially, the Crapo motion to commit the underlying bill, the pending bill, is to the Finance Committee to take out all the tax cuts. That is what it is, so I oppose it.

I urge Senators to vote for my amendment, which is a sense of the Senate that the Senate should reject such procedural motions, basically, because we want to keep the tax cuts that are in this bill.

Madam President, I ask for the yeas and nays.

Madam President, I move to reconsider the vote, and I move to lay that motion on the table.

Madam President, the Crapo motion to commit is an attempt to kill health care reform. If it succeeds, we will keep 31 million Americans from getting health care coverage. If it succeeds, it will keep Americans from getting the tax cuts in the bill. If the motion succeeds, over the next 10 years, Americans will get $441 billion less in tax credits to buy health insurance.

I urge that we not vote in favor of the Crapo motion, and I ask for the yeas and nays.

Madam President, I have long supported measures that allow Montanans to buy safe and effective drugs from foreign countries. This is why I support the Lautenberg amendment.

Currently, the Food and Drug Administration is required to review the safety and effectiveness of domestically produced drugs. FDA is also required to ensure the safety and effectiveness of legally imported drugs. Through FDA's robust inspection and other regulatory compliance activities, consumers can have a high degree of confidence in the quality of the drugs.

The Lautenberg amendment allows importation of drugs manufactured outside the United States and includes

numerous protective measures in addition to these activities. These measures address the health and safety risks of importing foreign drugs.

Most importantly, it requires the Secretary of Health and Human Services to certify that the imported drugs do not pose any additional risk to the public's health and safety and create savings for American consumers.

With recent increased awareness of potentially dangerous food and drug products, it is more important than ever to protect American consumers.

This amendment ensures that consumers are protected from the risk of unsafe drugs. And it ensures Americans have access to consistent, reliable medicines.

Madam President, closing the doughnut hole is clearly the right thing to do. Medicare beneficiaries face extremely high out-of- pocket costs for outpatient prescription drugs. In fact, they face costs that are six times higher than out-of-pocket costs for those of us fortunate enough to have employer-sponsored coverage.

The doughnut hole contributes to these high out-of-pocket costs. As a result, the doughnut hole often results in seniors skipping vital medications.

Eliminating the coverage gap in the Medicare prescription drug program will save people with Medicare thousands of dollars every year. Lowering the costs for seniors will also keep them healthier by ensuring they can afford their medications.

In my home State of Montana, 33 percent of seniors enrolled in the Medicare prescription drug program fall into the doughnut hole every year--one-third. We all know what the consequences are when people cannot afford the medicines they need to stay healthy, both for the affected individuals and for society at large.

Recognizing the scope of this problem, in his address to a joint session of Congress in September, President Obama promised to close the doughnut hole once and for all. It is our responsibility to make good on this promise and provide this needed relief to seniors. I join my colleagues in committing that we will send a bill to the President that closes the doughnut hole and fulfills his promise.

Madam President, responding to the leader, that is my full understanding.

Mr. President, for the benefit of all Senators, let me lay out today's program. It has been 3 weeks since the majority leader moved to proceed to the health care reform bill. This is the 11th day of debate. The Senate has considered 18 amendments or motions. It has conducted 14 rollcall votes. Today, the Senate will continue debating the amendment by the Senator from North Dakota on prescription drug reimportation, we will continue debating the motion by the Senator from Idaho on taxes, and we will continue debate on the bill. Under the previous order, the time until 1 p.m. today will be for debate only, with the time equally divided and controlled between the two leaders or their designees. Beginning at 11 o'clock, Republicans will control the first half hour, and the majority will control the second half hour. We will continue discussions to try to find a way forward.

Mr. President, I suggest the absence of a quorum and I ask unanimous consent that the time be equally charged against both sides.

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

Mr. President, commenting on the budget process in the 1980s, former CBO Director Rudy Penner said:

The process is not the problem; the problem is the problem.

The chairman and ranking member of the Budget Committee have proposed another new budget process. No one has shown greater zeal in taking on the budget deficit than the chairman and ranking Republican Member of the Budget Committee. I commend their good intentions. They work hard. But we should reject this process. Instead, we should solve the problem.

In their press release yesterday, Senators Conrad and Gregg said that ``Everything needs to be on the table, including spending and revenues.'' That is a quote: ``Everything needs to be on the table, including spending and revenues.'' But why stop there?

If Congress is going to outsource its core fiscal responsibilities, why stop with those responsibilities? Why not cede to this Commission all of the legislation in the next Congress? Why don't we outsource the entire year's work and then adjourn for the year?

Come to think of it, if we do cede all of our powers to this Commission, what is to stop them from inserting any and all business for the next Congress into the Commission's one, nonamendable, omnibus vehicle? No restrictions. They could put anything they want into it.

There is the rub. For if the Commission were merely a farce, then we could be satisfied with ridiculing it. But this Commission and its new fast-track process are truly dangerous. If we were to cede all of our responsibilities to this Commission, and we were to tie our hands so we could not amend its recommendations, then we would risk setting in motion some truly terrible policy.

Under the proposed fast-track procedures, we would not be able to amend the proposal. What if we did not like

the Commission's recommendations? We would not be able to replace the Commission's recommendations with our own.

It is clear from their press release that Senators Conrad and Gregg have painted a big red target on Social Security and Medicare. That is what this Commission is all about. It is a big roll of the dice for Social Security and Medicare.

Advocates of the task force say the regular order is not working. They say we need a new process to address our long-term fiscal challenges. But they are wrong. The regular order is working. We are enacting health care reform. And serious people know that controlling the costs of health care is the central path to addressing our long- term budget challenges.

The lion's share of the reason why deficits are projected to grow so much in the long run is the enormous increase in the costs of health care. We are doing something about it. We are doing it the right way. We held open hearings. We legislated in committee. We are voting on amendments. We are legislating. We are doing what our people back home sent us here to do.

The Congressional Budget Office says that health care reform will cut the deficit $130 billion in the first 10 years and $650 billion in the second 10 years. That is nearly $800 billion in CBO-certified deficit reduction in health care alone. And next year we will legislate fundamental tax reform.

But some appear to want to throw in the towel. Some want to punt our responsibilities away. I can see that a commission may be attractive to some. After all, it is an easy way out. It takes away our accountability for what we do. Senators can blame it all on the Commission. Senators could say: The Commission made me do it.

But this is no time to abdicate responsibility. This new Commission and this Congress are less than a year old. We should not shirk our responsibility. Rather, we should do the job our constituents sent us here to do.

Luckily, we already have a process to address the budget. It is called the congressional budget process. Here is a novel idea: Why don't we use the budget process to address the budget deficit? If the chairman and ranking Republican Member of the Budget Committee are in such broad agreement on their goals, why don't they skip the Commission and go straight to their recommendation? That is exactly why Congress created the budget resolution and the reconciliation bill in the first place.

We do not need a new commission to do our work. We do not need a new process to solve the problem. To solve the problem, we just need to solve the problem.

I urge my colleagues to reject this Commission idea. Let's get back to solving the problem. Let's get back to enacting real health care reform.

Mr. President, will the Senator yield on that one point? Just on that one point, will my good friend from Wyoming yield, on our time?

The question is this: Doesn't the Senator agree--it is kind of a hard question to ask--that this Senator spent an inordinate amount of time in the last year trying to get a bipartisan solution to health care reform; that is, in our committee, in the Finance Committee, having an open process, fully consulting on both sides of the aisle? Then we had that other group called the Group of 6, of which the Senator is a part. I think we had 130--I have forgotten how many days and meetings we had, how many hours we met.

But isn't it true that at least this Senator tried as hard as he could to get a bipartisan solution?

Mr. President, I want to underline the huge bipartisan effort that this side undertook to put this bill together in many, many ways. I very much appreciate the comments of the Senator from Connecticut on that point.

Let's go back. A year ago, I held an all-day health care summit at the Library of Congress for members of the Finance Committee, Republicans and Democrats. They were all there. We spent a whole day. In addition, I talked to all the groups. I called them up and said: Look, we are all in this together--we Americans--consumer groups, labor, big business, small business, the pharmaceutical industry, hospitals, hospice, all these CEOs. I said: We are all working together to get health care reform passed for our country--for all Americans.

So we kept that process up to keep it--and I don't like that word ``bipartisan.'' It is more accurate to say that everybody was working together. If you don't like something, maybe you will like something else somewhere else.

Just as I was getting wound up, Mr. President. I will continue when the majority's half-hour comes around.

I appreciate very much the 2 minutes from the Senator from Arizona. This could take a couple more than 2 minutes, but I very much appreciate the offer. I will just wait.

Mr. President, I must say, some of the debate on the other side of the aisle is a little surreal. They say they want to move ahead, and then they refuse to enter into any reasonable time agreement to consider a necessary appropriations measure. I find it very impressive--I am very impressed--how the minority can maintain both that they want to move more quickly and not move at all--surreal.

I wish to also explain, despite what the claims on the other side are, that we have attempted mightily to work together on both sides of the aisle to get health care reform passed. They claim it is all one- party rule. Nothing could be further from the truth. Let me explain why.

When we began this effort over a year ago, we had many hearings. In fact, last year I think I had 10 hearings in the Finance Committee on health care reform to educate ourselves because we knew health care reform was going to be a big issue in the year 2009. So, in 2008, we had many Finance Committee hearings on all different aspects of health care. How does our system work? How do parts fit together? How does this all work? We were there to educate ourselves. We did not have a political ax to grind. We were not trying to make points. We got the experts in and asked: How does it work? How do the different parts of our system work together?

Then we issued a white paper. It was in November of last year. It was basically a call to action, which is what we called it. It was about an 80-, 90-page paper. It was a statement of the health care options: delivery system reforms, various ways to get increased health

care coverage, various ways to help with insurance market reform--lots of different provisions.

I might say, casting all modesty to the wind, that white paper, that call to action, back in November of 2008, is probably the basis and springboard from which most of the ideas we have been debating, both in the House and in the Senate and on both sides of the aisle, come from. They basically come from there.

I might say, it has all been totally transparent. It is all on the Internet. It has all been open for everybody. Republicans and Democrats participated fully. First was the Library of Congress all-day session, both sides fully--that was over a year ago.

Since then, in 2009, this year, we have had a countless number--in the Finance Committee--of what we call roundtables, a countless number of walk-throughs, a countless number of hearings on all the various aspects of health care reform--bipartisan, fully open.

Also, I instituted something else here; that is, we got to the point where we finally got to the markup, and we put the marked up bill on the Internet, again, so everybody sees everything. We also made sure all amendments were on the Internet and fully debated by both sides-- totally open, totally transparent. I prided myself on doing that.

In fact, one very well-known health journalist who works for a very major paper walked up to me and said: Max, is this a new way of doing things? Maybe you started something, Max, in being so transparent and working so much together. Do you think this is the model for the future? I said: I don't know. But it impressed him how much we tried to work together and did work together with people on both sides of the aisle.

I cannot think of a more comprehensive, more transparent, more bipartisan effort than this.

So what happened? Well, the HELP Committee had their version passed. So we in the Finance Committee worked on ours. To move the ball, I shifted it to another group--we called it the Gang of 6; three Republicans, three Democrats--to try to get a core provision together that we could take to the full committee.

We had a countless number of meetings. I have forgotten the number of days we met--I think in the nature of 30 or 40 meetings and close to 100 hours and with Republicans and Democrats to and fro. Guess what. It was very, very constructive. I wish the American public could have been an eye on the wall at those meetings and watched these meetings proceed. There were very good questions asked by Senators on both sides, Republicans and Democrats.

I highly compliment my friend from Wyoming, Senator Enzi. I highly compliment my friend from Maine, Senator Snowe. I highly compliment everybody who was there. They asked very good questions--and Senator Grassley, of course, he is the ranking member of the Finance Committee; and the same on the Democratic side--in an effort to try to find a good, solid health care reform bill.

Well, we kept working--bipartisan--working together for days, days, hours, hours. Then, unfortunately, we got to the point where--I am just calling it as I see it; one of my failings is I am too honest about things--and the Republicans started to walk away. They pulled away from the table. They had to leave.

I ask you, why? Why did that happen? The answer--to be totally fair and above board--is because their leadership asked them to. Their leadership asked them to become disengaged from the process. I know that to be a fact. Why did their leadership ask Republicans to leave and become disengaged from the process? To be totally candid, it is because they wanted to score political points by just attacking this bill. They were not here to help be constructive, to find some bipartisan solution. They were for a while. Then, when the rubber started to meet the road, when it came time to try to make some decisions, they left and began to attack.

I think a big, unfortunate circumstance in all this--we are going to pass health care reform. It is going to pass. It is going to do wonders for the American people. We are going to dramatically reform the health insurance market. People are going to have health insurance they do not now have. We are going to help put in place delivery system reforms. That is just a fancy term for saying changing the way we reimburse hospitals and doctors in a very positive way, so we are focusing more on quality and less on quantity and volume. This bill is going to pass. It is going to be a very good bill when it finally does pass and people understand it.

But the unfortunate part is this: It is unfortunate, in my judgment, that the other side pursued a strategy of just saying no, just saying no, and attack, attack, attack. That is basically what we have heard here in the last several weeks, instead of coming up with a comprehensive alternative, instead of coming up with a comprehensive alternative health care reform package. Then it would have been wonderful if we had an honest-to-goodness, solid debate on the pros and cons of each side, the merits of each side, a constructive dialog, pursuit, inquiry, focus on which portions of this should be put in the bill and which should not. But that did not happen. We did not have this constructive alternative provision presented to us. We had no provision presented to us--and by ``to us,'' I mean the American public--so we could debate here. But, rather, they just said no.

We have worked as hard as we could to be bipartisan. But to be honest and candid about it, the other side walked away. They walked away, and I think it is very unfortunate that happened.

Mr. President, I yield 5 minutes to the Senator from Massachusetts, Mr. Kirk.

Mr. President, some of the charges from the other side of the aisle have taken us down some detours to essentially try to distract us from some of the main points of this legislation. I want to take a few moments to discuss one of the key features of the bill and that is insurance market reform.

The bill would change the way insurance companies do business in America. Sometimes I think this reform is part of the reason some on the other side are fighting this bill so hard. Our bill will end the practice, widespread today, of insurance companies denying coverage altogether, or charging someone an exorbitant amount of money if they have some preexisting condition, something in their health history which is an issue. Our bill would make those changes right away. They start going into effect in 2010. That is, the prohibition on companies denying coverage for preexisting conditions or

health care stats, and right down the list, would take effect right away, 2010.

We all have countless numbers of examples, either directly or through friends or relatives of small insurance companies that either denied insurance coverage or you have to pay much greater increase in premiums because of a preexisting condition, whatever it may be, of something. It is wrong, flat, outright, 100 percent wrong. This bill stops that, stops those practices by insurance companies.

I think it is important that we not get sidetracked by some other very important matters but keep focused on what this legislation does. It reforms the health insurance industry.

What else does our bill do with respect to reforming the health insurance industry? It would prohibit lifetime limits on payments to people who get sick. Right now, insurance companies limit how much they pay out to people when they get sick. They have lifetime limits, annual limits. No matter how sick you are, some catastrophic coverage you have, the insurance company says: Sorry, we are putting a limit on it. That is not right. Sometimes people have conditions that require a lot more attention, more hospitalization, more attention by doctors. Our legislation would prohibit lifetime limits on payments to people who get sick.

Our bill also prohibits unreasonable annual limits. These are limits that insurance companies impose on policyholders. This reform would apply in both the group market and the individual market. What does that mean, that gobbledygook. It implies that for everybody, whether you are an individual or whether you are working for a company, this would take effect 6 months after enactment. That is pretty important. A lot of people have insurance policies with limits, where the insurance company will only pay so much to an individual or during the person's lifetime or in any year. It is not right because some conditions require a significant increase in payments or coverage for the person.

Our bill would require any insurance plan that provides dependent coverage for children to continue to make that coverage available until the child turns age 26. We know that is a problem today. Often, in a State, once a child turns 21 or 22, that person can't find health insurance. In today's economic recession, with unemployment so high, it is kind of hard for kids to find jobs, and that is how they would otherwise get their health insurance. We say family coverage covers your child until the child turns age 26. This reform would take effect 6 months after enactment.

In addition, when the exchanges are up and running, our bill would prohibit insurance companies from discriminating against consumers because of health status, generally. Sometimes the insurance industry says it is not a preexisting condition, but you have not been healthy lately so we will not give you insurance. No longer can insurance companies refuse to sell or renew policies because a person gets sick. If you pay your premiums, the insurance company has to renew your coverage.

When the exchanges are up and running, the legislation before us today would limit the ability of insurance companies to charge people much more just because of their age. That is what they do today. Sometimes, depending upon the State, the insurance company is able to charge somebody much more for the same coverage because of that person's age. Right now it is not at all unusual for insurance companies to charge more than five times as much just because a person is, say, age 55. Our bill would prohibit insurance companies from charging more than three times as much because of age. In some States, there is no limit whatsoever. In my State of Montana, we have no limit. Some States have five. We are saying down to three.

When the exchanges are up and running, our bill would prohibit insurance companies from charging women more than men. Think of that. Some insurance companies charge women more than men. That is not right. This is also a widespread practice among insurance companies that is charging women more than men. It is just plain wrong. Our legislation would stop that.

Health insurance reform also means real insurance market reform. It means real change in the way insurance companies do business. No longer will insurance companies be able to build their business by cherry- picking only the healthiest and the youngest. That is what they do today, especially for individuals, to some degree, in smaller organizations. No longer will they be able to insure only those who don't need insurance. We bring real reform. It would make insurance much more fair, and that is literally a matter of life and death.

As a recent Harvard study reported, people without insurance are 40 percent more likely to die prematurely than people with private insurance. Think of that. People without insurance are 40 percent more likely to die prematurely than people with private insurance. Tens of thousands of Americans die each and every year because they do not have insurance. Is that America? That doesn't sound like the United States we are all so proud of, where we allow tens of thousands of Americans to die each and every year simply because we have not set up a system for them to have health insurance. That is something we stop in this bill.

I suggest the absence of a quorum and ask unanimous consent that the time be charged equally against both sides.

Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs, Subcommittee on Housing, Transportation, and Community Development, be authorized to meet during the session on the Senate on December 10, 2009 at 9:30 a.m., to conduct a hearing entitled ``Examining the Federal Role in Overseeing the Safety of Public Transportation Systems.''

Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on December 10, at 10 a.m., in room SD-366 of the Dirksen Senate Office Building.

Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to meet during the session of the Senate on December 10, 2009, at 9:30 a.m. in room 406 of the Dirksen Senate Office Building.

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on December 10, 2009, at 10 a.m.

Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet during the session of the Senate on December 10, 2009.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet during the session of the Senate on December 10, 2009, at 10 a.m.

Mr. President, I ask unanimous consent that the Ad Hoc Subcommittee on Disaster Recovery of the Committee on Homeland Security and Governmental Affairs be authorized to meet during the session of the Senate on December 10, 2009, at 2:30 p.m. to conduct a hearing entitled, ``Children and Disasters: A Progress Report on Addressing Needs.''

Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on December 10, 2009, at 2:30 p.m.

Mr. President, I ask unanimous consent that the Subcommittee on Aviation Operations, Safety, and Security of the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on December 10, 2009, at 10 a.m. in room 253 of the Russell Senate Office Building.

Mr. President, I ask unanimous consent that the following staff of the Finance Committee be permitted the privileges of the floor during debate on the health care bill: Angela Franklin, Kaitlin Guarascio, and Scott Allen.

Mr. President, I urge the Senate to pass by unanimous consent the ``No Social Security Benefits for Prisoners Act of 2009,'' which was recently passed by the House of Representatives.

This bill would prevent retroactive Social Security and Supplemental Security Income benefit payments from being issued to individuals while they are in prison, or in violation of conditions of parole or probation, or are fleeing to avoid prosecution for a felony or a crime punishable by sentence of more than one year.

Under current law, the Social Security Act already prohibits payment of current monthly benefits to such individuals. This bill ensures this prohibition applies to retroactive benefit payments as well. The bill allows any payments that are withheld to be paid once the person is no longer in prison, or in violation of conditions of parole or probation, or are fleeing to avoid prosecution.

This bill makes a common sense reform to the Social Security Act and I urge my colleagues to support the bill.

I thank my colleagues for their support.

Mr. President, for the benefit of all Senators, let me lay out today's program.

It has been nearly 3 weeks since the majority leader moved to proceed to the health care reform bill. This is the 10th day of debate on the bill. The Senate has considered 18 amendments or motions. We have conducted 14 rollcall votes.

Today the Senate will debate the amendment by the Senator from North Dakota, Mr. Dorgan, on prescription drug reimportation. At the same time, we will debate the motion by the Senator from Idaho, Mr. Crapo, on taxes.

Under the previous order, the time until 12:30 p.m. today will be for debate only, with the time equally divided and controlled between the two leaders or their designees. Following the remarks of the ranking member of the Finance Committee or his designee, the Republicans will control the first 30 minutes and the majority will control the second 30 minutes, with the remaining time equally divided and used in an alternating manner.

We are hopeful the Senate will be able to conduct votes on or in relation to a second-degree amendment to the Dorgan amendment, the Dorgan amendment itself, a side by side to the Crapo motion, and the Crapo motion itself. Thereafter, we expect to turn to another Democratic first-degree amendment and another Republican first-degree amendment. We are working on lining those up.

Over the course of the debate, there has been too much misinformation about what health care reform is and what it will do. I wish to set the record straight.

The goal of health care reform is to lower costs and provide quality, affordable coverage to American families, businesses, and workers. According to the nonpartisan Congressional Budget Office, our bill, the Patient Protection and Affordable Care Act, is a success.

According to the CBO, this bill provides health insurance coverage to 31 million more Americans. That is a big success. It lowers health insurance premiums. Despite what some have said, what some have claimed about premiums rising, that is not true. CBO says this legislation lowers health insurance premiums but for 7 percent, and that 7 percent gets much higher quality health care insurance than otherwise they would get. CBO also says this legislation reduces the Federal deficit by $130 billion over the first 10 years--it reduces the Federal deficit by $130 billion over the first 10 years.

In addition, as the President promised, this bill does not raise taxes on the middle class. In fact, this bill is a net tax cut. Over the next 10 years, this bill will provide a total of $441 billion in tax credits to help American families buy quality, affordable health care coverage they can count on. That is a tax cut, a total of $441 billion in tax cuts. The chart behind me indicates

that. Over the next 10 years, this bill will provide a total of, as I said, $441 billion in tax cuts.

The bill provides a net tax cut of $40 billion in the year 2017. You can see that basically on the chart: $40 billion of tax cuts in 2017. That is $440 for every taxpayer affected. These are individual tax cuts. Let me make that clear. American individuals will get tax cuts under this legislation in these amounts.

That same year--2017--low- and middle-income taxpayers who earn between $20,000 and $30,000 a year will see an average Federal tax decrease of nearly 37 percent. That is CBO. Do not take my word for it. That is CBO and the Joint Committee on Taxation--an independent organization. The average taxpayer making less than $75,000 a year will receive a tax credit of more than $1,300, and that tax credit grows to more than $1,500 in 2019. Those are tax cuts. It is very important we all remember this bill is a net tax cut of this amount for American taxpayers. That is individual tax cuts.

I have heard arguments that the responsibility to have health insurance amounts to a tax on the middle class. This is simply not true. In fact, this policy works to repeal the hidden tax of more than $1,000 in extra insurance premiums that American families with health insurance pay each year in order to cover the cost of caring for those without health insurance. It is a tax for uncompensated care. That is $1,000 per American family, on average, that they have to pay under the current system. This bill would virtually eliminate that.

Additionally, this bill provides Americans with the tools they need to meet that responsibility by ensuring that all Americans have access to quality, affordable health insurance.

The bill eliminates barriers that prevent Americans from getting insurance coverage, such as discrimination based on preexisting conditions. This bill eliminates that. We--all of us--either directly or through a family member or through a friend, have heard these horror stories of insurance companies denying coverage because of a preexisting condition. This legislation stops this. And this legislation makes quality insurance affordable to every American through tax cuts and help with copays and other out-of-pocket costs.

If for some reason an individual still cannot afford to buy the health insurance coverage available to them, they are exempt from paying the penalty. Clearly, this penalty is not a tax. So if you cannot afford it, you do not have to pay--no penalty.

I have also heard arguments that the excise tax on private insurance companies offering costly and excessive insurance plans will raise taxes on individuals. This claim is equally untrue. The Congressional Budget Office reaches the conclusion that is not true. In fact, the Congressional Budget Office reaches the conclusion it will lower premiums. I think the amount is 7 to 12 percent, if I remember correctly--the amount stated in their letter to us in the Congress.

This policy, therefore, is not a tax on individuals. Rather, it is a tax on private insurance companies, and not passed on in the nature of higher premiums, according to CBO--in fact, lower premiums according to

Mr. President, might I ask the Senator, it is a tax cut, whether or not it is refundable. And even if it is refundable, it is extra dollars in people's pockets.

Reserving the right to object, under the order of the day, what is the amount of time allocated to each side?

I thank the Chair.

Will the Senator yield for a question?

That is fine.

The Senator says those are people who don't pay taxes. Don't most of those people pay a lot of taxes? Don't they pay payroll taxes, most of them, who work?

Are there not other taxes that people pay? It could be sales tax. There are all kinds of taxes that people pay. Particularly working people, there are a lot of taxes they pay.

Will the Senator yield on that point?

I will quote from a letter basically to refute the allegations that this is a big obligation on the States. That is totally not true. The question is, Is it not true that on page 7 of the letter from the CBO, dated November 18, to Senator Reid, CBO says:

The CBO estimates that State spending on Medicaid would

increase $25 billion over 10 years as a result of this

legislation.

That is $2.5 billion a year, on average, for all States.

Another figure I know is that the State increase will not be huge but about a 1 percent increase over the State obligation. Why? Because, as the Senator also noted, an expansion of the population in Medicaid--the Feds are paying virtually all of it. But on a net basis, it is a 1- percent only increase in State obligation over 10 years. Does the Senator know that to be true?

We will have to divide this time. The division is correct. We are only talking--

Does the Senator ask a rhetorical question or an actual question?

Mr. President, the Senator from Oklahoma and others on the other side of the aisle make the charge this bill increases government. That is not so. It does not increase government. This bill does not increase government. They made that allegation. It is a pure allegation. Anybody can allege anything, but let me get the facts. It is one thing to make an allegation; it is something else to get the facts.

The best fact I have come up with is a quote from the Congressional Budget Office letter to Senator Reid on that point. The Congressional Budget Office says--and I quote from page 16 of the letter. I do not have the date of the letter. There are several letters to several of us in the Senate. I will quote the letter. It says:

CBO expects that, during the decade following the 10-year

budget window, the increases and decreases in the federal

budgetary commitment to health care stemming from this

legislation would roughly balance out, so that there would be

no significant change in that commitment.

``Roughly balance out.'' ``No significant change in that commitment.'' That does not sound like an explosive growth in government to me. In fact, it sounds the opposite, listening to the Congressional Budget Office.

Also, add to that this bill, in the first 10 years, decreases the deficit by $130 billion. But CBO says: No, no, no significant change. Things will roughly balance out, according to the Congressional Budget Office.

This controls the government's role in health care. It does not increase it.

I do not have any time, I say to the Senator from Idaho. We are an hour later--if we have another time agreement, we will take it out of the Senator's time. I will be willing to yield if the Senator from Idaho has a question.

Fine. Some of my colleagues on the other side of the aisle try to paint health care reform as bad for the economy. Nothing could be further from the truth. Health care reform will be good for the economy. Health care reform is a net tax cut for working Americans--a net tax cut. Health care reform is essential for long-term growth.

Some say it is a tax increase. It is not. The Congressional Budget Office--I have a chart right in front of me--a net tax cut. If you take all the provisions of this bill that affect individuals, the Joint Committee on Tax concludes that the average tax break for affected filers with income under $75,000 is a cut every year. I will take one year, 2019: a $1,500 cut for those people in that category. Net tax break for affected overall is a $441 decrease. It is a long chart. I will not take the time to read it all.

In summarizing the chart, affected taxpayers, as a percent of all taxpayers--it is over a majority--will see a net tax cut.

Some say for some it will be a tax increase. Let me indicate why that is somewhat true. They are getting more wages. Of course, their taxes go up if they get more wages. Why are they getting more wages? Because these tend to be people affected by so-called Cadillac plans. The Joint Committee on Tax and the Congressional Budget Office say in that category, premiums go down and wages go up. Obviously, taxes are going to go up when wages go up. It is not fair to say that taxes are going up for those folks in that category unless you also say it is largely because their income is going up. I think that should be pointed out as well.

Our bill will provide a substantial tax cut. It will cut taxes by $40 billion in 2017 alone and cut taxes by $40 billion in 2019 alone and by substantial net tax cuts year after year. The average affected taxpayer with an income under $75,000 a year would get a tax cut of more than $1,500 in 2019. The bill would affect more than 92 million taxpayers a year by 2019. That is reductions. Our bill would affect most taxpayers by 2017, and the bill would give average taxpayers affected hundreds of dollars of tax relief.

Not only would health care reform cut taxes for working Americans, it would also address the single largest challenge to our long-term fiscal future.

Reforming health care is the single most important thing we can do to address long-term budget deficits. The Congressional Budget Office says we will succeed in doing that. CBO says our bill would reduce the Federal budget deficit by $130 billion in the first 10 years. CBO says our bill would reduce the budget deficit by roughly $650 billion in the second 10 years. That is roughly $780 billion in net deficit reduction. That is $800 billion in net deficit reduction over 20 years. I think that is progress. That is pretty good.

Some of my colleagues say: Gee, Medicaid is pretty expensive, so be careful, Congress, with what you do with respect to imposing obligations on States. I remind my colleagues there currently is a formula each State must subscribe to with respect to Medicaid. The Federal Government pays a certain portion and States pay the other. On average--I could be off--the Federal Government pays 50 to 60 percent and the States pay the rest.

Under this legislation, we are talking about the so-called transitional group, those where the poverty level is raised, in that category--I have forgotten the exact figure. But it is not the old formula, it is the new formula. Under the new formula, the Federal Government is paying virtually all of it--not quite all but virtually all of it. So the States will get a little bit of an increase in obligations. It is small. It is infinitesimal.

The underlying point is, we have to reform health care. Why do Medicaid costs go up? Because health care costs are going up around the country--health care costs for seniors, low-income people, health care costs for everybody.

There are so many parts of this bill which address that problem, which address health care costs, to get health care costs down. I would think all State Governors would want this bill to pass. Why? Because we are going to begin to go down the road of lowering health care costs. Then those Medicaid budgets will be more under control.

We have to lower health care costs, and this legislation does that. Health care reform would very much help the economy, not just in the near term but with substantial net tax cuts but also help the economy long term with substantial deficit reduction--but also all the provisions we are putting in to lower health care costs overall.

It is, clearly, the right thing to do. I, therefore, believe this legislation should definitely pass. To remind my colleagues who say: Gee, for folks making more than $250,000 a year, they will pay more taxes, let me make clear: Those folks are not seeing tax rate increases. Those folks are going to pay more taxes because they are going to get pay raises. That is why they are going to pay more taxes because, in effect, their incomes are going to go up. They are going to get pay increases.

I have more to say, but I see my colleague from Vermont on the floor. How much time is remaining on in this block?

I yield 15 minutes to my friend from Vermont.

Mr. President, I yield 10 minutes to the Senator from Michigan.

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

Mr. President, I ask unanimous consent that we extend the period for debate only until 2 p.m., with the time equally divided, with Senators permitted to speak therein for up to 10 minutes each, with no amendments in order during that time.

Mr. President, the Senator from Texas and others talked about premiums. I wish to discuss the effect on premiums of health care reform.

Affordability is at the crux of this debate. In fact, reducing costs and making health care premiums more affordable and predictable, while improving quality, is the impetus for this bill. This bill cuts cost and improves quality.

Two analyses have been released that show Americans will pay less and have more choices under this bill. The first is by the CBO. It found that the legislation will lower premiums for millions of Americans. According to the CBO--and there are a lot of claims around here to the contrary, but they are just claims, and it is not documented--according to the CBO, in the individual market health insurance premiums under the Senate plan would fall by 14 to 20 percent compared with the same plan under current law. If you compare apples with apples, premiums under the Senate plan will fall in the individual market by 14 to 20 percent. These savings come from lower administrative costs, from increased competition, and better pooling of risk to include healthier people. Again, in the individual market, premiums will fall 14 to 20 percent.

Let me be clear. CBO does say that those buying health care in the individual market will pay 14 to 20 percent

less under this bill than they would for the same plan under current law. If you currently have coverage you like, you can keep it. You will pay 14 to 20 percent less for that coverage than you would pay under current law. If, on the other hand, people in the individual market are unhappy with their coverage, what can they do? They can choose to purchase the more comprehensive coverage available in the exchange. You can keep what you have, but if you don't like it, you can choose to buy something else in the exchange.

Unlike most of the coverage available in the individual market today, the coverage in the exchange will ensure access to preventive benefits. This is a very important point. Unlike most of the insurance available today in the individual market, that is, people buying just for themselves, the quality of insurance they will get, because of very dramatic insurance market reforms, will be much greater than what they have today. The quality will be much better.

What are some of those quality improvements? First of all, the bill will ensure that insurance companies cannot deny coverage based on preexisting conditions. Moreover, people will have access to preventive benefits. The plan--the bill we are debating--will guarantee that every policy has an out-of-pocket limit. That is not true today. Most plans don't have limits on that. This legislation says you have a limit on out-of-pocket coverage. Insurance companies have to provide the insurance. They cannot provide a policy that says: We can only pay so much.

The legislation will eliminate discrimination by insurance companies against those who have been sick in the past or have a preexisting condition. They cannot deny coverage based on health status. They cannot do that anymore. They do that today.

This health legislation will preclude insurance companies from rescinding your policy if you get sick.

How many times have we heard that happen under current law, insurance companies rescinding a policy when you get sick because they find a little something that has nothing to do with your illness that you perhaps did not report, a preexisting condition someplace else.

For small businesses, the Congressional Budget Office estimates that premiums in the small group market could be 2 percent lower than under current law. For workers in small firms that are eligible for the small business tax credits, premiums would be 8 to 11 percent lower than under current law. Those savings alone make this legislation worthwhile for small business.

Another enormous benefit for small businesses under this bill is predictable premiums. Under current law, if you are a small employer and one of your employees gets sick, your premiums could double, triple next year. I have experienced that many times. I am sure most Senators have. They talk to small businessmen at home and a businessman says: My gosh, my insurance premiums have doubled, tripled, quadrupled over the past year. Why? Because one of my employees has a preexisting condition, and I am placed in this terrible dilemma. This is a key employee. I cannot fire that person to get lower premiums. I cannot pay the increase in premiums. What do I do?

There is one contractor at home in Montana I talked to about this. He felt so bad, he could not let somebody go, one of his best employees. He kept that employee. He kept shopping around, shopping around, and found a carrier that did increase his premiums because this employee had a preexisting condition but not as much as his regular carrier. It was a 20-percent increase rather than a 30-percent increase. That happens today, and it is wrong, wrong, wrong, wrong.

So if you are a small businessperson, under this bill, you are going to find your premiums are going to be much more stable, and there is going to be a greater pool of people so your premiums, the Congressional Budget Office said, will be less--not by a lot but a little less. You don't have to worry about the insurance company coming to you next year and saying: We are going to charge you much more.

Under this legislation, insurance companies can no longer discriminate against small employers that have an employee who gets sick. I mention all the time I hear from small businesses that say they want to buy health insurance for their employees, but it is too expensive and the cost is too unpredictable. They cannot do it. They want to. They cannot afford it. This legislation helps solve that problem. This bill creates a requirement that allows small businesses to provide health coverage to their workers. There is a little reduction in premiums, according to CBO, and also much more predictability and higher quality of insurance all at the same time.

In the large group market--that is companies with more than 50 employees--what does CBO say about their premiums? I have heard all these allegations about people who work for larger companies are going to find their premiums will increase. That is the assertion. That is flatly not true, at least not true according to the Congressional Budget Office. The Congressional Budget Office estimates that premiums could be up to 3 percent lower than under current law. Again, that is not a big reduction, but it is a reduction, nonetheless. CBO says employees who work for larger companies will find their premiums will go down by a little bit. The assertion is, premiums will go up. CBO says they will go down, to be honest, not by a huge amount but down a little bit. That is better, lower premiums. That 3 percent could make the difference whether an employer decides to keep employees. A 3- percent reduction in premiums will keep that employee, or a bunch of employees, working for him.

According to the Congressional Budget Office, five out of six Americans get their coverage through employers of this size. Five out of six Americans work for larger companies. This means 83 percent of Americans will see no change or perhaps a slight decrease in their premiums. That is the Congressional Budget Office. That is what they say. It is in black-and-white print. It is right there. The remaining individuals--that is 17 percent--purchase their coverage on their own in the individual market.

Of those, many will choose to retain the coverage they have and will see a reduction of 14 to 20 percent in their premiums. Those who choose to purchase more comprehensive coverage in the individual market, the vast majority--nearly 60 percent--will see a reduction in premiums. Guess what. That is a big reduction in premiums. They will see a decrease of 56 to 59 percent due to the tax credits provided in this bill.

Let me restate that point. For the majority of those who choose to buy insurance in the exchange, in the individual market, a majority will see a reduction in premiums, according to the Congressional Budget Office, a whopping reduction of between 56 and 59 percent due to the tax credits provided in this bill. That is pretty important. The remaining few individuals may see an increase of up to 13 percent. But those who experience an increase in premiums, let's remember, will do so because they have much better insurance. The increased quality of the insurance they are going to get, in my judgment, is going to outweigh the increase in premiums they have to pay because they are going to get a lot more for the buck, a lot better insurance than they otherwise would get today.

If you buy a new car rather than a used car, most people think maybe they will pay more for a new car as opposed to a used car because it is newer and better. That is what is happening today. You might pay more, but you are getting a lot better insurance.

The Congressional Budget Office analysis, therefore, is good news for health care reform. The analysis does not take into account some of the Senate bill's other policies, such as a catastrophic option available to young adults, otherwise known as ``young invincibles.'' They think: I am not going to get sick, so I will get a catastrophic plan and pay very low premiums. That is available in this legislation.

The Congressional Budget Office analysis does not incorporate the potential effect of the proposal on the level or growth rate of spending for health care. In other words, CBO's analysis does not fully capture the effects of the excise tax on high-cost plans, which will also help.

I have more to say, too much more to ask for an additional minute. I will continue at a later time.

It is alleged here on the floor that the underlying bill raises taxes. The legislation does not increase taxes--essentially. There was a slight modification to that, but I will explain that later. In fact, the bill represents a tax cut. The bill does two things: It provides tax credits to low- and middle-income individuals and families to help purchase health insurance and it results in increased wages for those receiving employer-sponsored insurance.

Let me first speak about how the bill provides a tax cut. The chart behind me basically shows that for a family of four with an income of $66,000, the light blue indicates that the cost of that health insurance is going to be about $14,100. That is basically what health insurance costs today for a family of four. That is what people pay today. After this legislation, look at the bar there on the right. Again, a family of four, income $66,000. Those persons will receive an $8,000 tax cut, in terms of credits that family will get, with a net result of a health insurance policy that costs $6,100. Health insurance is going to cost less for a family of four with an income of $66,000. That is fairly representative, a family of four with $66,000.

Just to repeat, on the left, the health insurance policy for a family of four with that income level is about $14,000. After the tax credit kicks in, once this legislation kicks in, the same family, same four people, will find they are paying only $6,100 net for their health insurance. Why? Because they get a tax cut of $8,000.

I might add--look at the next chart, ``Who Gets A Tax Cut? An individual with an income of $32,000.'' Earlier, it was a family of four with $66,000. This is an individual with an income of $32,400. Currently, today, before health care reform is passed, that individual will pay roughly $5,000 in health insurance. But after this bill is passed, that same individual with an income of $32,400 will find that health insurance will not cost $5,000 but much less--$3,000. Why? Because that person gets a tax cut in terms of a credit of $2,200. I think that is a very important point to make.

While we are at it, we might as well get the next chart.

There are some who are saying this legislation will result in increased taxes for higher income people; that is, people whose income is, say, around $200,000. There is something to that argument, but that is not the whole story. Let's look at the whole story.

This legislation as portrayed by this chart shows:

High-cost insurance excise tax leads to increased wages.

Why increased wages? Because the Congressional Budget Office or maybe it is the Joint Committee on Taxation--the Joint Committee on Taxation concludes that because of that provision of the bill; that is, the excise tax on companies that provide more expensive policies, in effect those policies will be modified or changed, and in effect the premiums for those policies, the so-called Cadillac plans, will actually go down, according to the Congressional Budget Office, between 7 and 12 percent. But that is premiums. The discussion right now is on taxes. Those folks will be paying a little more taxes. That is true under this legislation. But, again, what is the whole story? Why are they going to be paying more taxes? They are going to be paying more taxes because they will get more income. Their wages and salaries will increase tremendously.

Look at the bar on the left. In the year 2013, the percent of the total tax revenue due to increased wages will be about 90 percent, but that person will also pay a 10-percent increase in taxes. The wage increase, salary increase is far greater than the tax increase. That is true for every year--2013, 2014, 2015, all the way up to 2019. It is proportionately basically the same--roughly around an 80-percent increase in wages and roughly maybe about less than a 20-percent increase in taxes. So on a net basis, those persons are going to be doing pretty well.

Consider the example of Joe who works for ACME Company. He is married and has two children. Together, he and his spouse earn $100,000 a year in taxable wages.

In 2012, ACME Company provides family health coverage to Joe at a cost of $25,000. Because of the high cost insurance excise tax, ACME Company finds different coverage that costs only $21,000 in 2013. Thus, ACME Company can afford to pay Joe an extra $4,000 each year.

Now, even though Joe has to pay income and payroll taxes, he will still have an extra $2,076 in his pocket. That is $4,000 -$1,000 in Federal tax -$612 FICA tax -$312 in State tax.

I don't believe Joe would refuse a pay increase just because he has to pay taxes on that raise.

Or consider Sally, a single mother of two working for XYZ Company. She makes $50,000 in 2013 and receives family health insurance coverage costing $27,000.

When XYZ Company restructures their plan to $22,000 as a result of the high-cost insurance tax, Sally will get an extra $5,000 in wages. That is $3,095 in take-home pay after taxes. That is $5,000 -$750 in Federal income tax -$765 FICA tax -$390 State tax.

I have no doubt that Sally will be able to put that extra money to good use.

Also, I would like to remind everyone about this legislation on premiums. Earlier, I discussed what the Congressional Budget Office said about premiums under our bill. Let me repeat, this is what the Congressional Budget Office says: In summary, the Congressional Budget Office concludes that 93 percent of Americans receive decreases in premiums. About 93 percent of Americans net will see a decrease in premiums.

That is not from these charts; that is from the CBO letter. Of that 93 percent, 10 percent will see decreases of 56 percent to 59 percent because of new tax credits. We are talking about on the individual market. About 60 percent of those who are getting insurance in the individual market on the exchange will get tax credits which will result in roughly a 60-percent reduction in premiums. It is between 56 and 59, which is pretty close to 60 percent. The remaining 7 percent will pay slightly higher--100 less 93. Seven percent will pay slightly higher, but they also get much better insurance for that same dollar. When you have a choice between buying a used car or a new car, you probably expect to pay a little bit more when you buy the new car. Hopefully, it is a little better, higher quality, drives faster, safer, all those things. You expect to pay a little more for a new car, but you get more. The same thing here. You are going to pay a little more. But only 7 percent will see their premiums go up according to the CBO. Those 7 percent are people who do not get tax credits because their incomes are a little higher, but they will get much better insurance, higher quality insurance. CBO says that, much higher quality insurance.

So, in effect, they will probably get at least the same, maybe no increase at all, maybe a reduction in premium, if we calculate in the higher quality insurance they will have.

In addition to CBO, MIT's Jon Gruber has also done a study on premiums. And what does he conclude? He concludes, using Congressional Budget Office data, the Senate bill could mean people purchasing individual insurance would save every year $200 for single coverage and $500 for family coverage in 2009 dollars. Most people think he is one of the best outside experts. He has big computer models. He takes the CBO data and, in some respects, he has helped CBO by giving some information to CBO that it otherwise does not have.

Mr. Gruber also points out that people with low incomes would receive premium tax credits that will reduce the price they pay for health insurance by as much as $2,500 to $7,500.

We have also seen several studies funded by the insurance industry. I don't want to be disparaging but to some degree you have to consider the source. I have been citing CBO. I think most people think they are a highly professional outfit, no axe to grind. Sometimes they upset those against health insurance reform. Sometimes they upset those for health insurance reform. They are a very professional group of people. But I have also seen studies paid for by the private sector, by the insurance industry. Those studies find that premiums will increase under the bill before us for all Americans. These studies are flawed and, frankly, some of them, the authors of these studies admitted they are flawed. They were just looking at selective parts of the legislation, not all parts, and they were pushed by the industry to issue a report quickly. They have admitted that. Each of them failed to take into account all aspects of the proposal. They selectively chose the provisions that will increase premiums, and they ignored those provisions that will lower premiums.

Why do they do that? Basically, the insurance industry wants to kill this bill. I can understand it. If I were the insurance industry, I wouldn't want my apple cart upset either. They do just fine under the status quo, thank you very much. They don't want to see any changes. Some insurance companies want to continue their current practices of denying coverage if you have a preexisting condition. That is how they made their money in the past. They made most of their money by denying coverage, by underwriting insurance rather than making money on conventional insurance. Anyway these companies want to continue their current practice of denying you coverage if you have a preexisting condition. Some want to continue charging unaffordable premiums if you have been sick in the past, and some want to be able to rescind your coverage once you get sick. That is their MO, and they have done pretty well under the status quo.

The Congressional Budget Office and Professor Gruber are both credible and unbiased sources that are not bought and sold by the insurance industry. The Congressional Budget Office and MIT's Gruber have confirmed what many of us have known: that the bill before us will lower premiums and provide a great many options for more comprehensive coverage. That is very important. With the exchange set up and with other provisions that will be in this bill, there are many more options for individuals to buy insurance with. It creates a lot of competition. With health insurance market reform, insurance companies will be competing more on price than they are on quality of coverage.

This legislation provides much needed assistance as well to lower middle-income Americans struggling to pay their health insurance premiums.

The Senator from Nevada, Mr. Ensign, a few moments ago said people

would pay more because of industry fees in this bill. Let's address that point. The reductions in premiums determined by the CBO that I described earlier took into account any impact of the industry fees. The Congressional Budget Office took that into account. I note for the record, there is no lab fee. I know that was an honest mistake on his part, but I want to indicate there is no lab fees in this bill. He was talking about lab fees.

The bottom line is that for the overwhelming majority of Americans, this bill means lower premiums. I don't have it with me, but also a section in one of the CBO letters basically says these fees will have a very negligible impact on consumers. Frankly, I was a bit surprised. I was concerned that some of these studies might, as determined by the CBO or other outside analysts, conclude that there would be a significant impact on consumers and on premiums, basically, what these companies would otherwise charge. But the CBO says no; the fees on hospitals, the pharmaceutical industry, even the insurance industry will have a very negligible effect on increased costs for consumers. It is negligible according to the CBO. I thought, frankly, that would not be the case.

Here is the letter. It is on page 15. I don't have the date of this letter, but it is from the Congressional Budget Office. It is under the section ``New Fees Would Increase Premiums Slightly.'' The operable sentence is:

Because that fee would not impose an additional cost for

drugs sold on the private market, CBO and [Joint Tax]

estimate that it would not result in measurably higher

premiums for private coverage.

To be fair, I don't know if they also address the effect of hospital fees or other provider fees. But I think it is noteworthy in that context for us to remember, it wasn't too long ago when the health insurance industry got together at the White House with the President and promised the President they could reduce their costs by $2 trillion over 10 years. If they believed they could reduce their reimbursement by $2 trillion over 10 years, you would think they would kind of know what they are talking about. After all, they have to report to stockholders. They have certain obligations.

They said they could reduce their reimbursement by $2 trillion. This bill cuts down their reimbursement increases not by $2 trillion but by one-quarter of that. That is roughly 4,500 billion over that same 10- year period. They have agreed to that. I can understand why they would agree to that because that is about one-quarter of what they promised earlier.

If they have agreed to it, they are probably going to do OK under this legislation. It is not going to result in reduced quality of care to people because they have agreed to it essentially. As I pointed out, CBO says, at least with respect to the pharmaceutical industry, very little of that will be passed on to consumers. Why is that? The basic reason is, there is waste in our current health care system. These companies know where the waste is. They can find it. They know it is out there.

But, second, with increased coverage, many more Americans will have health insurance. Currently, 84 percent have health insurance. Under this legislation, 94, 95 percent of Americans will have health insurance. If many more Americans have health insurance, there are more patients for the hospitals, more patients for home health care, more medical equipment sold, more drugs provided by the pharmaceutical industry. That is the second main reason they know that with provisions in this bill, the reduction in reimbursement to them is numbers they can live with.

I know the next two speakers, Senator Grassley and Senator Dorgan, both intend to speak for more than 10 minutes. I ask unanimous consent they be allowed to speak longer under the time under the control of the respective sides.

Mr. President, I ask unanimous consent that we extend the period for debate until 4 p.m. with the time equally divided, with Senators permitted to speak up to 10 minutes each, with no amendments in order during this period of time.

Mr. President, here we go again. We keep hearing it, and the other side keeps using scare tactics. All those Democrats say is tax, tax, tax. Scare tactics. They think they can scare people into believing something that is not true. The fact is, not only does this bill not raise taxes on the middle class, this bill is a tax cut for Americans.

Look at the chart behind me, which shows that. This is individual taxes. We are talking about taxes on individuals in America. This chart shows that in the year 2015, there will be a net tax cut for Americans of $26.8 billion--a tax cut. The other side says some of those folks are not paying taxes. That is true. It is a refundable tax credit of about $27 billion. In 2017, it is a net tax cut of $40 billion. In 2019, it is a net tax cut of almost $41 billion.

Nobody can read the small print on the chart, so I will read it:

Combined effects of the high-premium excise tax, health

care affordability tax credits, increase in HI tax, increase

in HI floor for medical expense deductions.

It is the basic provisions.

It is very important to point out that this is a net tax cut for most Americans. For some, there is a tax increase. But guess what. According to CBO, that is because those folks will make more money. Their wages and salaries will go up.

I don't see a chart-meister behind me to change the charts, but the chart shows almost for every year about a 10-percent increase in taxes for upper income areas and about an 80-percent increase in wages or income. That is basically because, according to the CBO, the high- premium excise tax will result. People will be paying lower premiums, 7 to 12 percent lower premiums as a consequence of the Cadillac tax provision. CBO says that; it is not my prediction. That will be passed on in the form of higher wages and higher income to people. People will be paying higher taxes, but they will be making more money.

Let's make it clear. This bill lowers taxes. At least that is what CBO says. It is one thing to make an allegation that it increases taxes, but CBO says there is a net tax cut, which I mentioned.

Turning to another subject--small business--one of the goals of health care reform, clearly, is to ensure employees and small businesses have access to quality, affordable health care options. Small businesses have a tough time providing health insurance, that is true. Last year, only 62 percent of small businesses offered health insurance to their employees. Compare that with about 99 percent of companies with 200 or more employees. Big businesses offer health insurance, but small businesses just can't do it. They have a hard time. Among the very small businesses, fewer than half offered their employees health insurance.

Small businesses say the main reason they cannot provide health insurance is because premiums are so high. That is probably true; it is expensive. I have talked to many small businesspeople, and I am quite certain the Senator from Vermont, who is in the chair, has run across the same comments from businesses. It is just too expensive.

In the past 10 years, premiums have risen 82 percent for single workers and 93 percent for families employed by small businesses. As health care costs rise, small businesses are forced to make workers pay a greater portion of these expensive premiums. Last year, employees in small businesses that provided health insurance paid more than twice what they paid in 1999. So in a period of 8 years, the amount employees paid more than doubled.

The low rate offering and higher cost-sharing responsibilities for employees and small businesses often limit the ability of small businesses to attract and retain good employees.

That is why the health care bill before us today includes provisions to make quality coverage more affordable for small businesses and their employees. The bill includes $24 billion in tax credits to help small businesses and charitable organizations purchase health insurance for their employees--$24 billion.

Starting in a couple of years, eligible small businesses would receive tax credits worth up to 35 percent of the employer's contribution to employee health insurance plans. Then in 2014, eligible small businesses will receive tax credits worth up to 50 percent of the employer's contribution to employee health insurance plans purchased in health insurance exchanges. That is half of the cost to the employer. An employer could take half of that cost as a tax credit against that company's income.

To qualify for the tax credits, businesses would have to cover at least half of their employee premium costs. The value of the tax credit is based on the size of the business and the average wage of its employees.

The small business tax credit will help make health insurance more affordable for many small businesses. That is clear. In 2011, 4.2 million Americans will be covered by quality, affordable health insurance because of this credit. On average, small businesses across the country will receive a new tax credit of around $5,000 to help them purchase insurance. The CBO has estimated that the small business credit will help lower insurance costs by 8 to 11 percent for employees at small businesses who receive that credit. CBO says, again, that small business credit will help lower insurance costs by 8 to 11 percent for employees of small businesses who receive the credit.

One of the reasons many small businesses are currently unable to afford health insurance is because they lack the buying power larger companies have to negotiate group rates. Our bill creates small business insurance exchanges, known as shop exchanges, where small businesses can join together and pool their risks. That will enhance their choice and buying power. These State-based exchanges will be a critical tool to help small businesses with fewer than 100 employees shop for health insurance plans and determine their eligibility for tax credits to buy health insurance. Small businesses that prosper and grow beyond 100 employees will be allowed to continue shopping in the exchanges.

The insurance plans sold in these exchanges will be subject to the same transparency requirements and consumer protections, so small businesses can feel confident they are purchasing high-quality plans that will provide quality, affordable coverage for their workers.

One more point. We all talk to small businesspeople. Time and time again, they say they like to provide health insurance. But what happens? The insurance company comes along and says: Next year, we are going to raise your premiums 20, 30, 40 percent. Why? The answer is that we found out one of your employees has a preexisting condition, so we are going to raise your premiums by that much. It puts small businessmen in a terrible dilemma: they either have to fire that employee to get the lower increase in premiums or eat that big increase and keep that employee.

I remember a businessman in Billings, a small contractor, whose heart sank when he got that notice from the insurance company. He decided to keep the valuable employee, who had worked for him for a good period of time. He will not fire that employee. He shopped around and finally found another insurance company, and the increase was not 30 percent, it was more in the nature of 20 percent.

Small businesspeople face this great variety of premiums. They go up this much and that much. It is because of the terrible situation we have where companies can deny coverage based on preexisting conditions, health care status, and so forth. Different States have different rating rules and so on. This will help small businesses get more stability and quality.

The insurance plans sold will be subject to the same transparency requirements and consumer protection that other individuals will also find available.

The health care reform bill before us also institutes reforms of the insurance market that will protect individuals and small businesses purchasing plans. I already mentioned that. These reforms will stop insurance companies from denying coverage based on preexisting conditions.

Passing health care reform is critical to small businesses. Without reform, many small businesses will be forced to drop their health care insurance coverage because they will no longer be

able to afford the increasing premiums. That would leave employees to fend for themselves in the individual market.

The CBO tells us these reforms will make coverage more affordable for millions of small business employees. The small business tax credit will help reduce health care costs for small businesses and their employees. As a result of the larger health reform proposals in this bill, there will be an increase in the percentage of small firms that offer health insurance coverage.

I ask unanimous consent to extend the period for debate only until 4:30, with the time equally divided, with Senators permitted to speak therein for up to 10 minutes each, with no amendments in order during that time.

Madam President, I believe we have to amend the previous order which restricted speakers to 10 minutes. So I ask unanimous consent that the previous order be changed so that Senators may speak for longer than 10 minutes, and I yield 15 minutes to the Senator from New Jersey.

Madam President, I ask unanimous consent we extend the period for debate only until 5 o'clock, with the time equally divided with Senators permitted to speak up to 10 minutes each; with no amendment in order during this time.

I suggest the absence of a quorum and ask the time be equally charged to both sides.

Madam President, I yield the time remaining on our side to the Senator from Maryland.

Might I ask, how much time is that?

Madam President, not withstanding the prior agreement, I ask unanimous consent that the Senator from Maryland be allowed to speak for 10 minutes.

Madam President, I might amend that by asking unanimous consent that the Senator from Kansas also be recognized for 15 minutes following the Senator from Maryland.

Mr. President, I remind all Senators that we have an hour, equally divided, with each Senator able to speak up to 10 minutes each.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 10 a.m., Thursday, December 10; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day, and the Senate resume consideration of H.R. 3590, the health care reform legislation; that following leader remarks, the time until 1 p.m. be for debate only and equally divided, with the time until 11 a.m. controlled between the two leaders or their designees, with the remaining time until 1 p.m. controlled in alternating 30- minute blocks of time, with the majority controlling the first block and the Republicans controlling the next block.

If there is no further business to come before the Senate, I ask unanimous consent that it adjourn under the previous order.

Mr. President, for the benefit of all Senators, I would like to take a moment to lay out today's program. It has been more than 2\1/2\ weeks since the majority leader moved to proceed to the health care reform bill, and this is the ninth day of debate. The Senate has considered 18 amendments or motions. We have conducted 14 rollcall votes.

Today, the Senate will debate the amendment by the Senator from Nebraska, Mr. Nelson, on a woman's right to choose. At the same time, we will debate the motion by Senator McCain on Medicare Advantage.

The time between now and the caucus lunches is for debate only. The majority will control the first hour of debate this morning; the Republicans will control the second hour.

We are hopeful the Senate will be able to conduct votes on or in relation to the Nelson amendment, a side-by-side amendment to the McCain motion, and the McCain motion sometime this afternoon.

Thereafter, we expect to turn to another Democratic first-degree amendment, which is likely to be the amendment by the Senator from North Dakota, Mr. Dorgan, on drug reimportation, and another Republican first-degree amendment. We are working on lining up those amendments.

I note that the pending McCain motion is the third such effort by the Republicans to defend the private insurance companies that run the program called Medicare Advantage. That is the same so-called Medicare Advantage Program that the nonpartisan MedPAC says is overpaid-- overpaid by 14 percent--compared with traditional Medicare, which does the same thing.

That is the same so-called Medicare Advantage Program whose overpayments add $90 to the Medicare premiums of a typical retired couple, even though that couple gets nothing in exchange.

That is the same so-called Medicare Advantage Program that has been the major source of strong profits for the private insurance companies that receive those overpayments. And that is the same so-called Medicare Advantage Program that helps those private insurance companies to pay their CEOs $8 million a year, $9 million a year, and in one instance more than $20 million a year in compensation.

So that is the same so-called Medicare Advantage Program that, in our view, needs a healthy dose of competition. That is all our bill would do. Our bill would move to competitive bidding in the private insurance Medicare market. It is high time we did so.

This morning we are going to have a colloquy among many new Senators, the group of Senators who were just elected last year, which is a very active group. I have met with them many times. They are very thoughtful, very active, and they have a lot to say.

Madam President, may I ask unanimous consent to speak for a couple of minutes to comment on the freshman package? It will just take a few minutes.

Madam President, I join my good friend from Connecticut in thanking--I don't know if calling them freshmen would be wise, because our colleagues act as though they have been here for years and know the subject extremely well.

Delivery system reform has always been something I have been pushing for, and I am happy to see it is part of your package, and also with additional emphasis on rural areas and Indian reservations. We clearly need more of that, and more transparency. I firmly believe that will help us get costs down and get quality of care up. Your work on the independent Medicare advisory board is great too.

To be honest, these are all the next steps in ideas that are pretty much in the bill, but they are the proper next steps, and the next steps I firmly believe should be taken. So I compliment you and thank you very much, and I thank my friend from Arizona for allowing me this time.

Madam President, with respect to the last debate, let's be clear that the underlying bill keeps the three-decades-old agreement that has implemented the Hyde amendment to separate Federal funds from private funds when it comes to reproductive health care.

The Nelson-Hatch amendment is unnecessary. It is discriminatory against women. Women are the only group of people who are told how to use their own private money. That is unfair.

On another matter, with respect to the McCain motion, let me explain a little bit about Medicare Advantage and how it works. Essentially, the Medicare Advantage Programs are insurance companies. They are insurance companies that have their own officers, directors, their own marketing plans and their own administrative costs and they are concerned about the rate of return on investment for their stockholders. These are simple, garden variety, ordinary insurance companies.

In this case, they are insurance companies that get general revenue from payroll taxes and premiums. They are basically insurance companies that give benefits to senior citizens. These insurance companies are overpaid. There is not much disagreement that they are overpaid. How are they paid? Well, believe it or not, these insurance companies-- Medicare Advantage plans--are paid according to the amount Congress sets in statute. That is their payment rate, what Congress sets in statute.

The problem is, by doing so, these preset rates overstate the actual cost of providing care by 30 percent. We pay more than it costs to provide care by about 30 percent, in many cases. These overpayments also clearly promote inefficiencies in Medicare. Also, these payments have not been proven to increase the quality of care seniors receive. In the estimate I saw, about half the Medicare Advantage plans have care coordination and half don't. Half are no better than ordinary fee- for-service plans. Because of this broken, irrational payment system, some plans receive more than $200 per enrollee per month and others receive about $36 per enrollee per month.

Again, the payment rates are set by statute, relating to fee for service in the area. It is broken. It doesn't make sense. It causes great dislocations and differences in the payment rates. Frankly, under this broken system, all beneficiaries are not receiving the same care. I believe all beneficiaries should be able to have access to the best care, not just those who happen to live in States with high payment rates.

Madam President, I ask unanimous consent to continue for an additional 5 minutes.

Madam President, I have said these Medicare Advantage plans are overpaid. Nobody disagrees with that. They are overpaid. The Senator from Oklahoma, Mr. Coburn, when I asked him a few days ago if he thought they were overpaid, said: Yes, they are overpaid. The MedPAC advisory board tells us: Yes, they are overpaid.

Here is a statement made by Tom Scully, former Administrator of the Center for Medicare and Medicaid Services:

I think Congress should take some of it away. There's been

huge over-funding.

There are lots of other citations from Wall Street analysts and others in the industry saying clearly the Medicare Advantage plans are overpaid. Frankly, we, in Congress, put a statutory provision in law that has caused this overpayment. Clearly, we should fix it.

In addition, something that is pretty alarming is, according to a study I saw, only about 14 cents on the dollar of extra payments to Medicare Advantage plans goes to beneficiaries--only 14 cents--which means 86 cents on the dollar goes to the company, not to the beneficiaries, not to the enrollees but to the companies--``the companies'' meaning the officers, directors, administrative costs, marketing costs, rate of return. It is to the company, any ordinary, garden variety company. Therefore, it behooves us to find a better way to pay Medicare Advantage companies so it is efficient, there is not waste, and payments go primarily to enrollees, to beneficiaries.

How do we do that? This legislation moves away from the current archaic system which sets statutory amounts in effect. Rather, we say, OK, why not have these companies bid? Let them compete based on costs in their regions. One region of the country is different from another region of the country. We are going to say what is fair here to get rid of a lot of waste and overpayments is provide that Medicare Advantage plans can compete in their area based on cost.

The plan will be paid the average bids that are based on competition in the area. We, the authors of this bill, think that is a far better way of paying for Medicare Advantage.

Will that reduce payments to beneficiaries? Certainly no. All guaranteed benefits are guaranteed in this legislation. In fact, I am going to check up on another statistic. I heard somewhere under this legislation there will be an increase of enrollees--not a decrease, an increase of enrollees. I am going to track that down because I want to be sure I am accurate.

I will conclude. I want to talk more about this issue later. There may be a separate amendment on this subject offered on our side. By and large, it is wrong to continue a current system that dramatically overpays and where 86 percent of the overpayment goes to the company and only 14 cents goes to the beneficiaries. We have to come up with a fair way of paying Medicare Advantage. I think a fair way is to have the companies competitively bid based on cost in their areas. That way they are going to get reimbursed at a level that is relevant to their area, and it is also relative to the cost they incur when they run their plans. I will have more to say about that later.

I yield the floor.