12/4/09, Bingaman introduces Krugmann article on Gruber

THIS SEARCH THIS DOCUMENT THIS CR ISSUE GO TO

Next Hit Forward Next Document New CR Search

Prev Hit Back Prev Document HomePage

Hit List Best Sections Daily Digest Help

Contents Display


SERVICE MEMBERS HOME OWNERSHIP TAX ACT OF 2009 -- (Senate - December 04, 2009)


[Page: S12356]  GPO's PDF

---

   The ACTING PRESIDENT pro tempore. Under the previous order, the Senate will resume consideration of H.R. 3590, which the clerk will report.

   The assistant legislative clerk read as follows:

   A bill (H.R. 3590) to amend the Internal Revenue Code of 1986 to modify the first-time home buyers credit in the case of members of the Armed Forces and certain other Federal employees, and for other purposes.

   Pending:

   Reid amendment No. 2786, in the nature of a substitute.

   Whitehouse amendment No. 2870 (to amendment No. 2786), to promote fiscal responsibility by protecting the Social Security surplus and CLASS program savings in this act.

   Hatch motion to commit the bill to the Committee on Finance, with instructions.

   The ACTING PRESIDENT pro tempore. The Senator from Montana.

   Mr. BAUCUS. Mr. President, we are beginning our fifth day of consideration on the health reform bill. We will be in a period of debate only until about 11:30 a.m. Pending now is the

[Page: S12357]  GPO's PDF

amendment by the Senator from Rhode Island, Mr. Whitehouse, on fiscal responsibility. Also pending is a motion to commit by the Senator from Utah on Medicare Advantage. It would be my hope that the Senate will vote on these matters today.

   Mr. President, I suggest the absence of a quorum.

   The ACTING PRESIDENT pro tempore. The clerk will call the roll.

   The assistant legislative clerk proceeded to call the roll.

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 President, I ask unanimous consent the order for the quorum call be rescinded.

   The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.

   Under the previous order, the time until 11:30 a.m. will be for debate only with the time equally divided and controlled between the two leaders or their designees, with the majority controlling the first portion of time.

   The Senator from Montana is recognized.

   Mr. BAUCUS. Mr. President, experts and economists of every political stripe agree that preserving America's long-term economic security means reforming the way we provide and pay for health care. Health care spending makes up one-sixth of the U.S. economy. Future generations can expect the burden of insurmountable debt if we fail to act.

   The fiscal challenges we may face in years to come pale in comparison to the threat of uncontrolled Federal health care spending. The chart behind me essentially shows that. The chart shows the percentage annual growth rates beginning in 2004. The red is the economy, the blue is health care costs. Clearly, over time, especially as the economy dipped during this great recession, the gap between economic growth and health care spending has widened. Projections are that in future years they will widen more and more. As you can see out to 2018, the total economy is projected. Near 2018 the economy is above 4 percent and health care spending is 7 or 8 percent.

   Doing nothing means health care spending continues to grow faster than our economy. That is what that chart shows quite dramatically. Doing nothing means entitlement spending more than doubles by the year 2050. That is taking one-fifth of our gross domestic product.

   But it is not simply the Federal budget on the line, it is the family budget too. Incredibly, in total we are spending 80 times as much on health care today as we did five decades ago--80 times more on health care today than we did five decades ago. Now family budgets are breaking under the strain--already. That is going to get worse if we do nothing. The cost of the average family health care plan will reach $24,000 in the year 2016. That is not too many years away from now. This represents an 84-percent increase over 2008 premium levels. That means, if we do nothing, in fewer than 10 years most families would have to dedicate half of their household budget to health insurance. For years we have heard the warnings from Federal budget experts. Now we are hearing every day from folks back home who simply cannot afford the care they need.

   We have an obligation to act. Now we have an opportunity to act. The country's leading economists and Federal budget experts laid out strategies and options for getting costs under control. We have taken their recommendations to heart. There is a lot of agreement among those who study these issues of what we must do. Now we have a bill that does what they suggest. It also passes the test of fiscal responsibility.

   We have many reasons to vote for this bill. It protects and even increases Medicare benefits for seniors. It achieves near universal coverage in less than 10 years. That means it achieves the goal of virtually everybody having health insurance in that period of time. It slows the growth of Federal health care spending. It stops insurance industry discrimination and, based on independent, nonpartisan analysis, makes a serious dent in our Federal deficit.

   This chart behind me represents what 2 weeks ago the Congressional Budget Office and Joint Committee on Taxation confirmed in no uncertain terms, that deficits go down under this plan. The official cost estimate reads as follows:

   The Congressional Budget Office and the Joint Committee on Tax estimates that on balance the direct spending and revenue effects of enacting this Patient Protection and Affordable Care Act legislation would yield a net reduction in Federal deficits of $130 billion over the years 2010 to 2019. That is represented by the green bar on the left. It is a net $130 billion reduction during the first 10 years of this bill.

   In addition to reducing the Federal deficit, in the first decade, the CBO also tells us that the bill decreases the deficit by a much greater amount, by $650 billion, in the second decade.

   According to the CBO, this bill also slows the growth of Medicare costs, which has been a principal goal in our Medicare debate since day one. Medicare spending would grow 6 percent annually instead of 8 percent annually. In other words, Medicare would continue to grow but, unlike today, it will grow at a sustainable rate.

   Of course, no projections, even from the Congressional Budget Office, can be certain. We can safely say this bill will put us on the right track. We can safely say this bill is better than doing nothing. No honest assessment challenges the case for acting now to slow the growth of Federal spending. No honest assessment challenges the case. And no honest assessment of this bill challenges the CBO analysis. I have not heard one. I have not heard an honest challenge to the CBO analysis, nor have I heard of a good, honest case for not acting now to slow the growth of Federal spending, which means we have many reasons to pass health care reform, not the least of which is the long-term financial health of the economy and our Nation. But the reasons for passing this are much more than simply facts and figures. This is about Americans from every corner of this great country, struggling to make ends meet, forced into bankruptcy by medical tragedy. This is about stopping insurance industry discrimination; this is about saving Medicare for our seniors and reducing the deficit for our grandchildren.

   I don't know which other Senators wish to speak. Senator Bingaman wishes to gain recognition in the time we have.

   Let me ascertain how much time we have and how many speakers we have.

   The ACTING PRESIDENT pro tempore. The Senator has 40 minutes.

   Mr. BAUCUS. I yield 15 minutes to the Senator from New Mexico.

   The ACTING PRESIDENT pro tempore. The Senator from New Mexico.

   Mr. BINGAMAN. Mr. President, let me thank Senator Baucus for his leadership on this issue. I have mentioned to him many times that I strongly believe without his leadership, we would not be where we are today in our effort to reform health care. I congratulate him on the superb effort he has made.

   I want to spend a few minutes talking about health care reform both as it affects the country but also as it affects my home State of New Mexico. First, I would like to discuss the context for this health reform bill, and that is the very serious problem we face in the country with the growing cost of health care, if the Congress fails to act. We have a chart I will put up, since everyone has charts. This is a chart that shows what is happening to all health care costs and has been happening since 1960. We can see that as a percent of the gross domestic product, back in 1960 we were spending right at 5 percent of GDP on all health care. Today we are spending much more like 16 percent of the gross domestic product on health care. The projections for the future, if we do not act to reform the health care system, are very serious indeed.

   Let me allude to an article in the morning New York Times. This is by Nobel award-winning economist Paul Krugman of Princeton University. He talks about this issue of fiscal responsibility and the impact of health care reform on the deficit. It talks about how some Senators have concerns about going ahead with this health care reform bill because of what it might cost. He makes the point:

   But if they're really concerned with fiscal responsibility, they shouldn't be worried about what would happen if health reform passes. They should, instead, be worried about what would happen if it doesn't pass. For America can't get control of its budget without controlling health care costs--and this is our last, best chance to deal with these costs in a rational way.

   I ask unanimous consent that the full column from the New York Times

[Page: S12358]  GPO's PDF

of this morning be printed in the Record following my remarks.

   The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.

   (See exhibit 1.)

   Mr. BINGAMAN. As this chart demonstrates, according to the Congressional Budget Office, if we don't act to deal with the growth in health care costs, Federal spending on Medicare and Medicaid combined will grow from 5 percent of GDP today to almost 10 percent by 2035. By 2080, the government would be spending almost as much as a share of the economy on just its two major health care programs as it has spent on all of its programs and services in recent years.

   Let me put up another chart that demonstrates that most of this increase in cost is not the result of our aging population. We do have an aging population; that does add to the cost of health care because as people get older they tend to need more health care. The dark blue shows the increase expected in health care costs by virtue of aging. But the lighter blue talks about the effect of excess cost growth that is not related to aging; that is, the growth in health care cost is out of control in our current system. Such spending is unsustainable. It has led the Congressional Budget Office to say:

   Slowing the growth rate of outlays for Medicare and Medicaid is the central long-term challenge for fiscal policy.

   Moreover, across the country, premiums continue to increase. They are becoming more and more unaffordable for individuals and for businesses. I hear on a regular basis when I go around New Mexico--and I am sure all my colleagues hear from their constituents as they travel in their States--that people cannot continue to pay more and more each year for their health care coverage. According to an August report by the Commonwealth Fund, nationally, family premiums for employer-sponsored health insurance increased 119 percent between 1999 and 2008. If cost growth continues on its current course, those premiums could increase another 94 percent to an average of $23,842 per family by 2020. I am not sure what the circumstance is in many States, but I know in New Mexico there are many families who cannot afford to pay $23,800 in health care premiums.

   Nowhere is the unsustainable growth felt more acutely than in my home State. Without health reform, in my State we are projected to experience the greatest increase in health insurance premiums of any State in the Union. For example, the average employer-sponsored insurance premium for a family in New Mexico was about $6,000 in the year 2000. By 2006, this rate had almost doubled, or the cost had almost doubled to $11,000. By 2016, the amount is expected to rise to an astonishing $28,000. In addition, health insurance premiums in New Mexico make up a larger percentage of New Mexico's income, the income of the average New Mexico family, than almost all other States. We are paying 31.18 percent. Over 31 percent of the average income of a family in New Mexico is going to pay for health care. This is expected to grow to 56 percent if we do not reform our health care system.

   It is important to highlight that the higher spending on health care in the United States does not necessarily prolong lives. I hear a lot of speeches about how we have the greatest health care system in the world. We are the envy of the world. People would just love to have access to our health care system. This chart illustrates that in 2000, the United States spent more on health care than any other country in the world, an average of $4,500 per person. That was in 2000. Switzerland was the second highest at $3,300, substantially less. Essentially, its cost per person was 71 percent of what it was in the United States during that year. Nevertheless, the average U.S. life expectancy comes out at 27th in the world. Our life expectancy average is 77 years. Many countries, 26 to be exact, achieve higher life expectancy rates with significantly lower spending on health care.

   Data from the McKinsey Global Institute clearly indicates there is a considerable level of waste in our current system. McKinsey estimates that the United States spends nearly $ 1/2 trillion annually in excess of other similarly situated nations. Of this, about $224 billion in excess costs are found in hospital care. About $178 billion are found in outpatient care. Together these account for more than 80 percent of U.S. spending above the levels of other nations.

   Here is one other chart. This is one I have used before on the Senate floor. Not surprisingly, as costs and inefficiencies continue to build, access to health care is becoming more and more difficult for middle- and lower-income Americans. This chart indicates the rate of uninsurance throughout the country. First, on the left-hand side is the year 2000; on the right-hand side is 2008. We can see the dark blue States are States where 23 percent or more of the population ages 18 to 64 are uninsured. Back in the year 2000, New Mexico and Texas were the only two States where the rate of uninsurance exceeded 23 percent. Now we can see the rate of uninsurance exceeds 23 percent for many of the States, particularly across the southern part of the country.

   We have a very serious problem that needs addressing. It is clear that the U.S. health care system is failing many Americans. The situation is becoming more and more urgent. According to a study published by the Harvard Medical School in August, medical costs have led to almost two-thirds of the bankruptcies in this country. More than 26 percent of bankruptcies are attributable to health care problems. The study found that most medical debtors were well educated, owned their own homes, had middle-class occupations and, shockingly, three quarters had health insurance. So these were people who had coverage, but the coverage was not adequate to meet the needs. Unfortunately, for many individuals, the very high cost of medical care leads them to delay or to avoid receiving medical care altogether.

   The Urban Institute reports that 137,000 people in this country died between 2000 and 2006 because they lacked health insurance. That includes 22,000 people in 2006. Clearly, the need for national health reform has never been so great.

   The Patient Protection and Affordable Care Act, the legislation we are debating, introduced by Senator Reid and others a few weeks ago, includes the key reforms we have come up with and that the experts have come up with, aimed at addressing these very serious problems, while protecting the aspects of our health system that are working today.

   First, this bill includes long-overdue reforms to increase the efficiency and quality of the health care system while reducing overall cost. For example, the legislation includes payment reforms that I have championed to shift from a fee-for-service payment system to a bundled payment system. This will reshape our health care reimbursement system to reward better care and not simply more care as it currently does today.

   Second, it includes a broad new framework to ensure that all Americans have access to quality and affordable health care. This includes creation of a new health insurance exchange in each State which will provide Americans a centralized source of meaningful private insurance as well as refundable tax credits to ensure that coverage is affordable.

   Finally, these new health insurance exchanges will help improve choices by allowing families and businesses to compare insurance plans on the basis of price and performance. This puts families, rather than the insurance companies or the government bureaucrats, in charge of health care. It helps people to decide which quality, affordable insurance option is right for them.

   The Congressional Budget Office, which is cited here--quite frankly, I notice that the Congressional Budget Office is cited by both Democrats and the Republicans in this debate, and that is a credit to the CBO. They are seen as nonpartisan, and they are nonpartisan. I congratulate Doug Elmendorf for the good work CBO has been doing in support of our efforts to come to the right answer on health care reform--the CBO forecasts that this legislation would not add to the deficit.

   As the chart Senator Baucus had a few minutes ago clearly indicates, the deficit would be reduced in the first 10 years by $130 billion. It would be reduced in the second 10 years, going up to 2029, by something over $600 billion.

   Let me also point out the contrast. We are talking about a bill which the

[Page: S12359]  GPO's PDF

Congressional Budget Office says will reduce the size of the deficit in future decades. I can remember a couple Congresses ago when we had a debate on adding subpart D to Medicare, Part D to Medicare. There are many on the floor who are concerned about cost today--at least they say so in their speeches--who were very anxious to add that legislation to Medicare, adding another $500 billion. That was estimated by the CBO at that time: another $500 billion over a 10-year period to the cost that Medicare was bearing.

   The efforts we are making in this legislation to bring under control the cost growth in Medicare is essential if we are going to keep Medicare solvent in the future, and part of the solvency problem Medicare has in the future, frankly, is related to what we did in subpart D.

   On the subject of premium cost, CBO has also found that in the individual market, the amount that subsidized enrollees would pay for non coverage would be roughly 56 percent to 59 percent lower, on average, than the premiums charged in the individual market under current law. Among enrollees in the individual market who would not receive new subsidies, average premiums would increase by less than 10 to 13 percent. The legislation would have smaller effects on premiums for employment-based coverage. Its greatest impact would be on smaller employers qualifying for new health insurance tax credits. For these businesses and their employees, CBO predicts premiums would decrease by about 8 percent to 11 percent compared with their costs under current law.

   This is consistent with estimates of the impact in my home State of New Mexico, where average families may see a decrease in premiums of as much as 60 percent. In addition, about two-thirds of New Mexicans could potentially qualify for subsidies or Medicaid and nearly a quarter would qualify for near full subsidies or Medicaid.

   An overall decrease in premium costs also is consistent with the experience in Massachusetts where there has been an enormous reduction in the cost of nongroup insurance in the State after they enacted similar reform to what we are considering now in the Senate. After reform the average individual premium in Massachusetts fell from $8537 at the end of 2006 to $5143 in mid-2009, a 40 percent reduction while the rest of the Nation was seeing a 14 percent increase.

   Finally, much of the debate on health care reform has focused on insurance coverage but it is important to recognize that as we expand coverage to include more Americans, the demand for health care services will also increase. A strong health care workforce is therefore essential for successful health reform. Within the United States, approximately 25 percent of counties are designated health professions shortage areas--a measure indicating that there is insufficient medical staff to properly serve that geographic area. The problem is even more apparent in rural States such as New Mexico. For example, 32 out of 33 counties in my State has this shortage designation. As a result, New Mexico ranks last compared to all other states with regard to both access to health care and utilization of preventative medicine.

   The Patient Protection and Affordable Care Act we are debating contains key provisions to improve access and delivery of health care services throughout the Nation. These provisions include increasing the supply of physicians, nurses, and other health care providers; enhancing workforce education and training; and providing support to the existing workforce.

   I applaud Senators Reid, Baucus, Dodd, Harkin, and many other colleagues who have worked so hard on this bill. This legislation represents true healthcare reform. It is time for the Senate to put partisanship aside and enact this critical and long overdue legislation.

   I see my time is up and there are others waiting to speak. I yield the floor.

   Exhibit 1

[From the New York Times, Dec. 4, 2009]

   Reform Or Else

(By Paul Krugman)

   Health care reform hangs in the balance. Its fate rests with a handful of ``centrist'' senators--senators who claim to be mainly worried about whether the proposed legislation is fiscally responsible.

   But if they're really concerned with fiscal responsibility, they shouldn't be worried about what would happen if health reform passes. They should, instead, be worried about what would happen if it doesn't pass. For America can't get control of its budget without controlling health care costs--and this is our last, best chance to deal with these costs in a rational way.

   Some background: Long-term fiscal projections for the United States, paint a grim picture. Unless there are major policy changes, expenditure will consistently grow faster than revenue, eventually leading to a debt crisis.

   What's behind these projections? An aging population, which will raise the cost of Social Security, is part of the story. But the main driver of future deficits is the ever-rising cost of Medicare and Medicaid. If health care costs rise in the future as they have in the past, fiscal catastrophe awaits.

   You might think, given this picture, that extending coverage to those who would otherwise be uninsured would exacerbate the problem. But you'd be wrong, for two reasons.

   First, the uninsured in America are, on average, relatively young and healthy; covering them wouldn't raise overall health care costs very much.

   Second, the proposed health care reform links the expansion of coverage to serious cost-control measures for Medicare. Think of it as a grand bargain: coverage for (almost) everyone, tied to an effort to ensure that health care dollars are well spent.

   Are we talking about real savings, or just window dressing? Well, the health care economists I respect are seriously impressed by the cost-control measures in the Senate bill, which include efforts to improve incentives for cost-effective care, the use of medical research to guide doctors toward treatments that actually work, and more. This is ``the best effort anyone has made,'' says Jonathan Gruber of the Massachusetts Institute of Technology. A letter signed by 23 prominent health care experts--including Mark McClellan, who headed Medicare under the Bush administration--declares that the bill's cost-control measures ``will reduce long-term deficits.''

   The fact that we're seeing the first really serious attempt to control health care costs as part of a bill that tries to cover the uninsured seems to confirm what would-be reformers have been saying for years: The path to cost control runs through universality. We can only tackle out-of-control costs as part of a deal that also provides Americans with the security of guaranteed health care.

   That observation in itself should make anyone concerned with fiscal responsibility support this reform. Over the next decade, the Congressional Budget Office has concluded, the proposed legislation would reduce, not increase, the budget deficit. And by giving us a chance, finally, to rein in the ever-growing spending of Medicare, it would greatly improve our long-run fiscal prospects.

   But there's another reason failure to pass reform would be devastating--namely, the nature of the opposition.

   The Republican campaign against health care reform has rested in part on the traditional arguments, arguments that go back to the days when Ronald Reagan was trying to scare Americans into opposing Medicare--denunciations of ``socialized medicine,'' claims that universal health coverage is the road to tyranny, etc.

   But in the closing rounds of the health care fight, the G.O.P. has focused more and more on an effort to demonize cost-control efforts. The Senate bill would impose ``draconian cuts'' on Medicare, says Senator John McCain, who proposed much deeper cuts just last year as part of his presidential campaign. ``If you're a senior and you're on Medicare, you better be afraid of this bill,'' says Senator Tom Coburn.

   If these tactics work, and health reform fails, think of the message this would convey: It would signal that any effort to deal with the biggest budget problem we face will be successfully played by political opponents as an attack on older Americans. It would be a long time before anyone was willing to take on the challenge again; remember that after the failure of the Clinton effort, it was 16 years before the next try at health reform.

   That's why anyone who is truly concerned about fiscal policy should be anxious to see health reform succeed. If it fails, the demagogues will have soon, and we probably won't deal with our biggest fiscal problem until we're forced into action by a nasty debt crisis.

   So to the centrists still sitting on the fence over health reform: If you care about fiscal responsibility, you better be afraid of what will happen if reform fails.

   The ACTING PRESIDENT pro tempore. The Senator from Montana.

   Mr. BAUCUS. Mr. President, how much time remains under the control of the majority?

   The ACTING PRESIDENT pro tempore. Twenty-four minutes.

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

   Mr. KIRK. Mr. President, I thank the Senator.

   Mr. BAUCUS. We might be able to find extra time, too, if the Senator is looking for extra time. Right now, according to the number of Senators who

[Page: S12360]  GPO's PDF


THIS SEARCH THIS DOCUMENT THIS CR ISSUE GO TO

Next Hit Forward Next Document New CR Search

Prev Hit Back Prev Document HomePage

Hit List Best Sections Daily Digest Help

Contents Display