Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I simply wish to say thank you. I rise to say thanks to all my colleagues, particularly here in the Senate, my friends and family in Montana and across the country, my wife Wanda and my son Zeno, my mother, and so many others. Thank you for the best wishes, the get-well cards, flowers, phone calls, and e-mails for the past few weeks. It is astounding how much we do live in kind of a global village and how connected we are. I deeply appreciate the concern of so many of my very good friends. A few weeks ago, I underwent surgery for a condition known as subdural hematoma which was the result of a fall I took in November while running in what is called the JFK 50 Miler in Maryland. You might ask, Why in the world would someone want to run 50 miles? I sometimes ask myself. Nonetheless, it was then that I took a fall, and as a consequence of that fall, I had this condition called subdural hematoma. I must say I am very grateful to the doctors, nurses, and everyone who was very helpful. They have encouraged me to take my time. They didn't want me to do something stupid or dumb, or to get back to work too quickly. Unfortunately, as you well know, we have 24-hour news service these days. When I was at home, I had an extremely bad case of cabin fever. I could hardly wait to get back to work. The doctor said stay home. Wanda said stay home. My friends said stay home. So I stayed home for a little while. In all seriousness, I am very delighted to be back in this Chamber and back in the Senate with all of you, doing what I love; that is, representing Montanans and working to make their lives better. Following the surgery, I have been asked several times if any of this has changed my perspective. Does it give me pause? The answer, obviously, is that it does; clearly, it does. It gives you a deeper sense of perspective. It is humbling. I am sure the response would be different for different people, but for me, it caused me to just think a little more clearly and deeply about what we are all about and what we are doing. I must say I think it has been very helpful. It makes one deeply appreciate what we have in life--our family, our friends, including our health. It also reinforces one's resolve. It makes you want to keep driving, pushing, working to create change and help people. You realize, even more, that we have only a finite amount of time here to get our work done. It subtly reminds you about the ever-daunting deadline that time imposes on all of us, the sense we have to get as much done as we can in the short time we have been given so as not to waste one day, an hour, or a minute. It also reinforces what my Indian friends taught me so long ago in Montana--that we have a moral obligation to leave this place in as good or better shape than we found it, to pass on to our kids and our grandkids an America as great as our parents bestowed upon us. It is written in Scripture that much is expected from those to whom much has been given. As Americans--particularly as Members of the Senate--we have been given an awful lot. We have a lot of work ahead of us. That is why it is imperative we look to the example of leadership set by so many here in this Chamber--courageous yet humble leaders such as my friend and mentor, former majority leader of the U.S. Senate, Ambassador Mike Mansfield. I don't know of a more gentle, a more strong, or, in a sense, a more profound man than Mike Mansfield. He is a man to whom we should all look up for leadership and try to exemplify, although we may never get there, as much as possible. We have a big year ahead of us. For my part, I will continue to work together with all of you--my distinguished colleagues on both sides of the aisle--to make America an even better place to live, to work, and to raise a family. I look forward to passing a new transportation bill that will create jobs and ensure safety on our Nation's roads. I look forward to reforming our pension system to ensure that workers and their families' life savings are protected. I look forward to working with my good friend, chairman of the Finance Committee, Senator Chuck Grassley, to pass our JOBS bill, otherwise known as FSC/ETI reform, and to give a boost to domestic manufacturing and create jobs. I look forward to working together to boost agriculture in our country and get international markets open to U.S. beef as soon as possible. I look forward to cracking down on tax cheats. There are too many people who cheat Americans by breaking the law in our income tax code. I look forward to making a greater investment in education, something we do not do enough of in this Chamber. I look forward to working together to curb the rising number of uninsured Americans. I was lucky. I had surgery performed by excellent people. I am fortunate enough to have good health insurance coverage. A lot of Americans do not. An event like this reminds us that the 43.6 million Americans who go without health insurance must have it. We in Congress, who do have the security of good health insurance, must do much more to assure that more Americans and soon all Americans have health insurance. We are not doing enough. We tend to get all involved in lots of peripheral issues and not spend enough time on the core issues. I daresay that health insurance inadequacy, the cost of health insurance, is probably the first, second, and third most important issue facing Americans. We do not spend enough time on it. We have an aggressive agenda before the Senate. It is up to us to fulfill the promises we made, set aside partisan differences, and work together--not talk about it but do it. Do what is right for America. Move our country forward. It is up to us to lead. People want Congress to do what is right. Most Americans are not partisan. They are not very rightwing or very leftwing. Most Americans are in the big middle. They want the Congress to do what is right. It is up to us to provide that leadership. I say thank you. I deeply appreciate my colleagues in the Senate. It is my distinct honor and privilege to serve here. I also will address the pension bill and the pending managers' amendment that will be before the Senate later today. First, I thank the chairman of the committee, Senator Grassley, and also Senator Kennedy, who gave some very kind remarks a few days ago, and Chairman Gregg for their collective persistence, determination, and their willingness to work together. Here is a good example of the two committees, the leadership from both committees on both sides of the aisle, working together to craft a very important piece of legislation. The amendment before the Senate is truly bipartisan. I also thank again Senator Kennedy for managing the bill in my absence and I deeply appreciate his kind words on the floor a few days ago. Now let me turn back to the pension bill and the managers' amendment. This legislation helps address the retirement security of literally millions of workers and retirees. It seeks to support the pension benefits they have earned and upon which they rely for their economic well-being. It is an important step to help preserve the embattled defined pension benefit plan. And it is embattled. The security of our pension system is at stake. Daily we hear employers are dropping out of the defined benefit plan system. The reasons are simple. The defined benefit plans require a commitment on the part of the employer. This is a commitment many employers are no longer willing to make or can afford to make. A recent survey found that 15 percent of the defined benefit plan sponsors have frozen plans since January 1, 2001. That means these plans will no longer allow workers to earn more benefits. Another 6 percent are actively considering freezing the defined benefit plans. This could mean that more than one in five employees earning a guaranteed retirement benefit will not earn future benefits. We need to ask what caused this and what can we do. According to the survey, the most common reason for freezing the defined benefit plans is the cost--not just the total cost but also the volatility and unpredictability of the cost. It is one thing to have an obligation you can put in the budget projections. Businessmen love to know what is going on. We understand that. Then business can build a plan to meet certain obligations. It is another thing to have costs that vary wildly from year to year. You do your best to project these costs, but it is difficult. Having cash available for investment in growth and expansion is critical to a successful business. Fluctuating minimum contribution requirements make good business plans very difficult. In the worst of times, a large unexpected contribution requirement can spell disaster. It can bankrupt an enterprise. That enterprise has to turn the unfunded pension liability over to the Pension Benefit Guaranty Corporation, known as the PBGC. Last September, the Finance Committee marked up the National Employee Savings and Trust Equity Guarantee Act, a bill that includes a set of long-term funding changes to address the situation. That bill provides temporary relief for companies that are suffering. It provides a temporary substitute for the 30-year Treasury rate, similar to the provision in the amendment before the Senate today. It also provides temporary relief for the deficit reduction contribution for companies that were well funded in the year 2000. These provisions were designed to give companies relief from large contribution cash demands. The Finance Committee bill includes provisions to allow companies to put more money into their plans when times are good, and the bill provides for long-term replacement of the 30-year Treasury rate with a yield curve, which is a conservative basis for liability measurement. We need to look at long-term reforms such as those included in the Finance Committee bill. I hope we will do that later this year. We have an immediate, more pressing need to deal with the problems we face today: low interest rates, the effects of recent market downturns, and the resulting high contribution requirements that companies will face if we do not take action today. Normally, low interest rates are good, but in this case they tend to exacerbate the problem with respect to defined benefit guarantee plans. Increased payments would have to be made as early as April 15. We must act quickly to provide the needed relief. The pending managers' amendment has three important components to deal with the immediate problems we face. First, it substitutes the long-term corporate bond rate with a 30-year Treasury rate. Second, it provides partial relief from deficit reduction contributions from companies that did not make a deficit reduction contribution in 2000. And it provides temporary relief from experience loss amortization payments for multiemployer plans. These are not long-term solutions. They will provide short-term relief from contribution volatility for employers who have been generous enough to provide defined benefit programs for their employees. The more important factor in the health of the defined benefit system and of the PBGC, which guarantees the benefits of the system, is the health of the employers in response to the plans. The short-term relief provisions will help. The more employers who stay in the system, the healthier those employers and the stronger the system. I look forward to working with my colleagues to come up with a long- term solution. But the provisions in this bill cannot wait. The retirement security of millions of workers hangs in the balance. I urge my colleagues to support this amendment.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to express deep frustration with the way congressional leaders have thwarted the will of the majority of Members on Cuba. Last month, the Senate approved an amendment to the Transportation- Treasury appropriations bill that would suspend enforcement of the Cuba travel restrictions. We passed this amendment 59 to 36--a 23-vote margin. In September, the House approved the same amendment 227 to 188--a 39-vote margin. So, both Chambers of Congress approved the same amendment to suspend enforcement of the Cuba travel ban and to allow travel by Americans to Cuba. These votes reflected the sentiments of the overwhelming majority of Americans who support ending the utterly ineffectual travel ban. Opinion leaders, too, in newspapers all across the country, in papers big and small, applauded the Senate and House votes. Orlando, Chicago, New York, Winston-Salem, Tuscaloosa, and San Diego. Papers from every corner of the country commended Congress for its efforts and called for an end to the absurd travel ban. Then, the Senate Foreign Relations approved by a 13-to-5 margin a bill--S. 950, the Freedom to Travel to Cuba Act of 2003--that would permanently repeal the Cuba travel ban. Senator Enzi and I, along with 31 other colleagues--fully one-third of the Senate, from both sides of the aisle and representing every region of this country--introduced this legislation because we felt the time had come to end this pointless ban on American liberty. As its vote demonstrates, the Senate Foreign Relations Committee agrees. Given these votes, and given the popular support for our efforts to end the travel ban, one would think the conferees of the Transportation-Treasury appropriations bill would not be able to strip out our amendment. When the Senate and House have approved the same amendment, there ought to be nothing for conferees to reconcile. But here we are with an omnibus bill that does not include our amendment to suspend enforcement of the Cuba travel ban. How did this happen? It wasn't the conferees. Thirteen of the 16 Senate conferees were supportive of our amendment. The conferees would not have stripped out the amendment. But the congressional leadership would. And they did, before even submitting the bill to the conference committee for consideration. They pointed to a phony veto threat--not made by the President--to justify a blatantly political move calculated to improve their standing with a small number of constituents in Florida. This, despite a recent poll by the Miami Herald and St. Petersburg Times that found that most Florida voters favor lifting the ban on travel to Cuba--by better than a 2-to-1 margin. Is this democracy in action? Is this the example we are setting for the rest of the world? Is this the example of participatory government that we hold to the Cuban dissidents as the beacon of freedom and liberty? If this ugly episode were the only consequence of this administration's obsession with retaining the failed Cuba travel ban, that would be bad enough. But it is not the only consequence. Far worse, the administration's pandering to its south Florida allies is undermining U.S. efforts to fight terrorism. The Treasury Department's Office of Foreign Assets Control, OFAC, is charged with enforcing sanctions against foreign countries, terrorist networks, international narcotics traffickers, and those involved in proliferating weapons of mass destruction.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to urge my colleagues to support H.R. 743, the Social Security Protection Act of 2003 as modified. H.R. 743 is bipartisan legislation developed by Ways and Means Social Security Subcommittee Chairman Shaw and Ranking Member Matsui. H.R. 743 passed the House by a vote of 396 to 28, and was reported by the Committee on Finance with unanimous support. In keeping with the bipartisan tradition of the Senate Finance Committee and with the bipartisan origins of this legislation, Senator Grassley and I have worked together to further refine this legislation for Senate consideration. H.R. 743 makes a number of important changes to the Social Security and Supplemental Security Income, SSI, programs. These changes will accomplish a number of important goals: they will enhance the financial security of some of the most vulnerable beneficiaries of these programs, increase protections to seniors from deceptive practices by individuals in the private sector, reduce disincentives to employment for disabled individuals, improve program integrity and thereby save money for the Social Security and Medicare trust funds and for taxpayers, and make the Social Security program more equitable. One of the most important results of this legislation will be to enhance the financial security of the almost 7 million Social Security and SSI beneficiaries who are not capable of managing their own financial affairs due to advanced age or disability. The Social Security Administration, SSA, currently appoints individuals or organizations to act as ``representative payees'' for such beneficiaries. Most of these representative payees perform their roles conscientiously. However, some do not--indeed there have even been instances of terrible abuse in this program. It is imperative that Congress take action to guard vulnerable seniors and disabled individuals from such abuse. This legislation increases requirements for SSA to provide restitution to beneficiaries when representative payees defraud the beneficiaries of their benefits. The legislation also tightens the qualifications for representative payees, increases oversight of the program, and imposes stricter penalties on those who violate their responsibilities. Finally, the legislation provides--for the first time ever--that there will be a one-time audit of a representative sample of representative payees to assess the extent to which representative payees are not using the beneficiary's funds for the benefit of the beneficiary. The legislation expands the protection to seniors and disabled individuals by increasing the list of references to Social Security, Medicare and Medicaid which cannot be used by private-sector individuals, companies and organizations to give a false impression of Federal endorsement. The legislation also protects seniors from those who deceptively attempt to charge them for services that the seniors could receive for free from SSA. The legislation eliminates a disincentive to return to work for childhood disability beneficiaries. The provision would make it easier to regain childhood disability benefits for disabled adult children who had returned to work at one time. Additionally, H.R. 743 also includes technical amendments to improve the effectiveness of the Ticket to Work and Work Incentives Improvement Act, legislation passed in 1999 to help beneficiaries with disabilities become employed and move toward self- sufficiency. H.R. 743 improves program integrity by expanding the current prohibition against paying benefits to fugitive felons. As part of the 1996 welfare reform law, Congress banned the payment of SSI benefits to these individuals. However, under current law, fugitive felons can still receive Social Security benefits under title II. This legislation prohibits the payment of title II Social Security benefits to fugitive felons. The bill also makes the Social Security program more equitable by including a provision to make an exemption to the Government Pension Offset more uniform. The Government Pension Offset, GPO, was enacted in order to equalize the treatment of workers in jobs not covered by Social Security and workers in jobs covered by Social Security, with respect to spousal and survivors benefits. The GPO reduces the Social Security spousal or survivors benefit by an amount equal to two-thirds of the Government pension. However, as a GAO report highlighted, State and local government workers are exempt from the GPO if their job on their last day of employment was covered by Social Security. In contrast, Federal workers who switched from the Civil Service Retirement System, CSRS, a system that is not covered by Social Security, to the Federal Employee Retirement System, FERS, a system that is covered by Social Security, must work for 5 years under FERS in order to be exempt from the GPO. H.R. 743 makes the exemption to the Government Pension Offset similar for State and local government workers as for Federal Government workers. I believe that each of the provisions of H.R. 743 deserve the support of the Senate. Moreover, in an attempt to expedite Congressional passage of this legislation, the changes that Senator Grassley and I want to make to the bill as reported by the Finance Committee have already been worked out with both the chairman and the ranking member of the Social Security Subcommittee of the House Ways and Means Committee. Moreover, we have ``report language'' that has been agreed to by the chairman and the ranking member of the Social Security Subcommittee--as well as by the chairman and ranking member of the Senate Finance Committee which will be included in the Congressional Record directly following the legislative language. This statement provides details about each of the provisions of the legislation, as well as the rationale behind each provision. This legislation contains the types of improvements we can all agree on, as demonstrated by the overwhelming bipartisan vote in the House, and the bipartisan, bicameral agreement of the chairmen and ranking members of the committees of jurisdiction. I wholeheartedly urge my colleagues in the Senate to approve these sensible and important changes.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I thank my good friend, Senator Byrd, from West Virginia. There have been many comments about the Medicare bill that just passed, all the time and effort, and the controversies that surround it. My personal view is that it is not just a good bill, it is a very good bill. It will help senior citizens and a lot of others who need help. I understand some of the criticisms made against the bill. Some of them are overdrawn and exaggerated. But I understand the core points some critics have made. As with all legislation, and as with all things human, there is some truth all the way around. I pledge my time and effort to work to correct any imperfections in this legislation that may arise. But all in all, we have to make decisions. We have made a decision; and that is, to pass this legislation. I think it is a good bill that is going to help a lot of people. It is a major advance to the Medicare Program. The Medicare Program, which was enacted 38 years ago and signed by President Lyndon Johnson in Independence, MO, has been a tremendous success for our senior citizens. This bill represents the next major advancement. It is a new entitlement for prescription drug benefits for our seniors not contained in the original Medicare Act that passed 38 years ago. There are a lot of people to thank. And my point here today is not to dwell on the bill but, rather, to thank people who worked so hard and who ordinarily receive so little credit. The most noble human endeavor is service. It is service to church, to community, to family, to spouse, to children. It is service in whatever way makes the most sense for each one of us. There are many people who served to the maximum in helping to write good legislation, and I shall mention their names. Members of the House and the Senate who serve get the benefit of their names in newspapers and shown on TV--usually it is a benefit, sometimes it is not--but at least they get the credit or the blame. But there are other people who work very hard behind the scenes. That is, the staff, who probably work even harder and receive little or no recognition. So I would like to recognize a few of those people who played a central role in this legislation. First, my Finance Committee health care team, led by the wonderful Liz Fowler. Those of you who have worked with Liz Fowler know what I mean. There is none better. She works so hard, she is so smart, and she has a wonderful disposition, working hard to help provide better health care for Americans. Jon Blum. He was the ace numbers guy. I think in many cases he knew more about the various intricacies of this bill than anyone else; an amazing man. Pat Bousliman, the same. Pat worked extremely hard and knew the ins and outs of all the provider positions--the physician and the hospital payment provisions, and home health care, so well. Andy Cohen, who worked primarily on Medicaid and low-income issues, and then Dan Stein, who was the cleanup hitter--he is wonderful. And I'd like to recognize former staff persons, who also worked so hard on this bill earlier in the process, but have since taken advantage of different jobs or opportunities. Kate Kirchgraber. Kate was our Medicaid specialist. Mike Mongan is a young man, who is brilliant. I was able to hold onto him for one extra year before he finally decided to go off to law school. Those are the members of my Finance Committee health care team who worked so hard. Others in the Finance Committee who played a very key role are Jeff Forbes, the minority staff director, and Bill Dauster. Many people know both Jeff and Bill. Bill has served the Senate in many capacities, particularly with his expertise in budget matters and Senate procedures. He was invaluable to me. Russ Sullivan is my top tax person. And Judy Miller. Judy is from my home State of Montana and, she knows pension issues better than anyone I can think of. The two of them worked on the tax provisions in this bill. Laura Hayes handled press for the Finance Committee. Tim Punke is my chief trade person. And Brian Pomper, also on the trade staff. There are several trade provisions that came up in this bill, particularly with respect to reimportation from Canada. Two of my former staff who left a year ago, or less than that, are wonderful people and also deserve recognition. One is my former staff director, John Angell; and my chief counsel, Mike Evans, who, during the course of this bill, would call in. They would call in and give lots of advice. Senator Grassley, Chairman of the Committee--his health team have all been wonderful to work with. Linda Fishman, Mark Hayes, Colin Roskey, Jennifer Bell, and Leah Kegler--all working so hard. And others on Senator Grassley's team, Ted Totman, who has been with Senator Grassley for many years, and Kolan Davis, who is Chairman Chuck Grassley's staff director. Senator Breaux, my chief negotiating partner: On his staff is Sarah Walter. Sarah is very smart. She is very good. Michelle Easton and Paige Jennings, both of whom have also contributed significantly to this bill. Other conference members, of course, were Chairman Bill Thomas and Chairman Billy Tauzin, Majority Leader Frist, Speaker Hastert, and Majority Leader Tom DeLay in the House played a great role. Their staffs did, too, especially John McManus, who is the chief health staff for Chairman Thomas, and his staff, Madeline Smith, Joel White and Deb Williams; Pat Morrissey, the deputy staff director for Chairman Billy Tauzin, and his staff Kathleen Weldon, Chuck Clapton, Pat Ronan and Jeremy Allen; and then for Majority Leader Bill Frist, Dean Rosen and Liz Scanlon. They are all very able, wonderful, extremely capable people, along with everybody else we have been working with who I have not mentioned by name. On the administration side, Ziad Ojakli, Matt Kirk, and Jennifer Young all played a significant and helpful role. And Erik Ueland on Senator Frist's staff played a valuable role in the coordinating between the Congress and the White House. Senator Nickles, Senator Kyl, Senator Hatch, Congresswoman Nancy Johnson, and Congressman Mike Bilirakis and their staffs played an immeasurable part in this bill. Other conferees who were, unfortunately, excluded from the conference--that is, from the working group--played very strong roles in making this bill better than it otherwise might have been: Minority Leader Tom Daschle, Senator Rockefeller, Representatives Dingell, Rangel, and Berry. Believe it or not--they may not believe it--but their views helped to shape this bill; many of the low-income provisions, their views on premium support, and lots of areas where their strong views helped Senator Breaux and I a lot. I need to mention, also, the Congressional Budget Office and the House and Senate legislative counsel. The Congressional Budget Office, CBO, as we call it, is headed up by Douglas Holtz-Eakin. He works long hours, as do his top people, Steve Lieberman and Tom Bradley and all of their staffs. Particularly in the final weeks of this bill, when we had to call up and say: What is the CBO estimate for this change? What is the CBO estimate for that change? It is an almost impossible job because we were asking for lots of different changes. The House and the Senate legislative counsel--Ed Grossman, John Goetcheus, Pierre Poisson, and Jim Scott. Man, oh, man, did they work hard. They probably put in more hours than anybody else. Once we had the concepts, they would have to write the language. And this world, which is run by deadlines, we were always waiting until the very end, unfortunately, before decided on a direction to write the legislation. And Ruth Ernst, who also worked extremely hard. On my personal staff: Zak Andersen, who is my chief of staff, in helping to coordinate all these matters; Sara Roberts, my legislative director; Farrar Johnston, my scheduler; and Sara Kuban--all in the office here in Washington, DC. And back home in my State of Montana: Barrett Kaiser, Jim Foley, and Melodee Hanes, working all the time to answer tons of telephone calls about this bill and coordinating all of our outreach and education efforts. Others here in my DC office, two persons who work in the receptionist area, Megan Mikelsons and Rachel Sherouse answered many telephone calls, too, and handled them all very directly and with great grace and civility. There are many others, Mr. President, on other staffs who I have not mentioned, but I mention these people because I know personally how hard they have worked. I also mention them as representative of all the other people who have worked for Senators, who have worked in different capacities up here in the Senate and over in the House and who have just poured their hearts out. They are here because they want to do the right thing. They are here because they want to help people. They are here because they want to make this a better place. Essentially, they are here because they are fulfilling a very deep moral obligation. I think all of us have an obligation to make this place as good or even better than we found it, in whatever way we do that. For some of us, it is health care legislation, and for some of us it is some other area. The names I have mentioned are the names of people who I hope are remembered and recognized. I urge everyone to dwell a little more on the people who really do the work, those I have mentioned, and others who work in similar capacities in this body.

Mr. BAUCUS. Mr. President, 38 years ago, President Lyndon B. Johnson signed the Medicare Act in Independence, MO. For millions of senior and disabled Americans, the enactment of this legislation heralded an era of hope, health, and improved financial security. At the signing of the Medicare Act, President Johnson said, ``No longer will older American be denied the healing miracle of modern medicine . . . And no longer will this Nation refuse the hand of justice to those who have given a lifetime of service and wisdom and labor to the progress of this progressive country.'' Over the past 4 decades, the Medicare Program has fulfilled President Johnson's vision. Through Medicare, more than 100 million Americans have received the protection of health insurance during their most vulnerable years. Today, Medicare covers more than 35 million seniors and 6 million disabled Americans. Medicare provides assurances to these millions of Americans that their health care needs will be taken care of. And Medicare has stood the test of time. Thirty-eight years after its enactment, Medicare remains one of the most extraordinary acts of legislation in the history of Congress. But we all know that the program is not perfect. It is at times slow to adapt to the evolving health care market place. We owe it to our seniors to ensure that Medicare changes with the times and continues to serve their needs today and into the future. The practice of medicine has changed dramatically over the past 4 decades. Outpatient prescription drugs were not included in Medicare's original benefit package. In 1965, medical care emphasized hospital- based and physician-provided care. Today, medical care increasingly relies on the use of prescription drugs. As the role and expense of prescription drugs have grown dramatically over the past several decades, the lack of a prescription drug benefit in Medicare has become a critical flaw. Seniors will spend an estimated $2,300 on average for prescription drugs this year, with almost $1,000 coming directly from their pockets. And while many seniors are fortunate to have coverage through retiree health plans, Medicaid, Medigap, and Medicare managed care plans--over 35 percent of Medicare beneficiaries currently lack any coverage for outpatient prescription drugs. The lack of prescription drug coverage in Medicare, coupled with the rising cost of prescription drugs, is forcing seniors across America to make difficult choices. In the wealthiest nation in the world, millions of elderly Americans are forced to choose between much-needed prescription drugs and basic necessities of daily living. Our seniors deserve better. With the passage of this bill, we have the opportunity to uphold our commitment to America's seniors. With this conference report, we can deliver on our promise to add a prescription drug benefit to Medicare. This bill provides seniors with much-needed prescription drug coverage and protection against high out-of-pocket drug expenses. Under the new Medicare Part D, seniors will have access to prescription drug insurance for a modest monthly premium. This benefit will provide up- front coverage for prescription drug expenditures up to $2,250 annually, and catastrophic coverage for out-of-pocket spending above $3,600. For the millions of seniors with lower incomes and costly medical illnesses, this legislation offers the promise of comprehensive affordable prescription drug coverage through Medicare. Low-income seniors, more than a third of all Medicare beneficiaries, will receive generous assistance for all their prescription drug expenses, including premium subsidies, reduced deductibles, and affordable cost-sharing. And we have designed a bill that will provide coverage in every part of the country. If private drug plans elect not to participate in any area of the country, our seniors will have guaranteed access to a government fallback, backed by the solemn commitment of Medicare. Thus, all seniors will have equal access to a drug benefit, regardless of whether they choose to join a managed care plan or remain in traditional fee-for-service Medicare. This legislation offers more than a Medicare prescription drug benefit. It will finally address many of the Medicare reimbursement inequities that have plagued America's rural health care providers. It will increase payments to local physicians and community hospitals to improve health care services throughout the nation. And this legislation will better foster competition between generic and brand- name pharmaceuticals. I have heard from many of my colleagues regarding some of the imperfections in the conference report--for example, the gap in coverage, the risk that the bill may cause employers to drop retiree drug coverage, the potential state shortfalls in the early years of the benefit, the increased payments to private plans, and the ``premium support'' pilot program. While I remain committed to addressing these potential shortcomings in the legislation during the upcoming months and years, we must not forget that this bill creates a $400 billion expansion of the Medicare Program. We must not squander this historic opportunity to fundamentally improve the lives of millions of American seniors. We would not have this opportunity without the fine leadership in the Senate. Senator Grassley, chairman of the Finance Committee, skillfully led this effort through the committee, on the floor, and in the conference negotiations. Majority Leader Frist was willing to put aside party differences to focus on achieving bipartisan consensus. Senator Breaux's efforts helped bridge differences. The work of Senator Breaux, my steadfast partner in the difficult negotiations, as well as Senators Snowe, Hatch, Jeffords, and Graham have greatly contributed to the debate over prescription drugs throughout the past several years. And Senator Kennedy, the health care expert of the Senate. For over 25 years, Senator Kennedy has fought to include prescription drug coverage within Medicare. Through his continued leadership, prescription drugs for seniors are now within reach. Senator Kennedy played a key role in getting a good bill out of the Senate and throughout the conference. The 76 votes in the Senate are a tribute to his efforts, and whatever is positive in this bill is due to his dedication and hard work. And there is much that is positive in this bill, in my view. Of course, the conference report is not perfect by any means. There are elements that I would not include if I were writing this bill on my own. But it is a true compromise. It reflects a near evenly split Congress. Let us not forget that the original Medicare Act also represented a compromise--in the way that the program was financed through a combination of payroll taxes, premiums, and general revenue, and in the way it was organized, with fiscal intermediaries and carriers making payments for separate Part A and Part B benefits. In the final analysis, let us not forget why this bill is important. Millions of seniors live today without prescription drug coverage. They live in greater pain, and they live shorter lives, because of that. With this bill, we will take an important step to make their lives better. To help them live longer, fuller lives. That is our purpose here today, and that is why I support this conference report. For 38 years, Medicare has been a covenant--a pact between the generations. All Americans--young and old, rich and poor--pay into the promise of Medicare. And the Congress has the responsibility to uphold this commitment to those who benefit from it. As part of that responsibility, we must continue to improve the program and keep up with modern medical care. This conference report represents an historic opportunity to strengthen Medicare. And as elected officials, we have the obligation to take advantage of this opportunity. Of course, we also have the responsibility to ensure timely implementation in a way that fulfills congressional intent. On the day of this historic vote, we take a step to ensure that Medicare continues to fulfill Lyndon Johnson's vision. We take an important step to deliver on our promise to America's senior citizens. I yield the Floor, and I again thank my good friend from West Virginia.

Mr. BAUCUS

Mr. BAUCUS. Yes, that is true. The HHS Inspector General has been urging Congress to end these overpayments for years. The conference report addresses these overpayments, while ensuring fair reimbursements for oncologists and other affected physicians to ensure that patient care remains unaffected. Moreover, I think it is important that members of Congress understand the strong consumer protections that are in place to ensure that they receive access to an affordable drug plan, one that provides access to the prescription drugs that they need.

Mr. BAUCUS. Yes, this is true. It is also true that the Secretary is prevented from approving a drug plan that charges too high of a premium. The premium must reasonably and equitably reflect the costs of the benefits.

Mr. BAUCUS. Yes, the same one. And I think it is also important to note that conference report has a requirement for a Government-backed fallback plan if fewer than two plans are available. This Government- backed plan is required to negotiate prices with drug manufacturers. And if the fallback plan is unable to negotiate good discounts on its own, then the Secretary will be able to intervene as appropriate to negotiate to achieve lower prices.

Mr. BAUCUS. Mr. President, one of the criticisms that some have raised about the conference report is the provision that prevents the Department of Health and Human Services Secretary from interfering in the negotiations between private prescription drug plans, drug manufacturers, and pharmacies.

Mr. BAUCUS. I also believe it is important that we clarify the purpose of the non-interference language. This language is not intended to pad the pockets of drug manufactures. It is not intended to pad the pockets of the insurance companies.

Mr. BAUCUS. Yes, that is my intent. And I am committed to monitoring this new payment system as it is implemented, in order to ensure access to high-quality cancer care.

Mr. BAUCUS. That is correct.

Mr. BAUCUS. That is correct. These beneficiary protections are crucial for these vulnerable Medicare beneficiaries. I would expect that the Secretary will take into account their special medication needs when he writes regulations on this provision and when he is evaluating plan bids. If a plan can't adequately ensure all of the proper medication for beneficiaries living with HIV/AIDS, epilepsy, and certain mental illnesses, that plan should not be doing business with Medicare.

Mr. BAUCUS. Absolutely.

Mr. BAUCUS. Exactly. The bill asks the US Pharmocopeia to develop model formularies with therapeutic classes that can't be gamed. Then we require drug plans to offer at least two drugs in each therapeutic class. And for drugs that treat AIDS, epilepsy, or mental illness, we would expect that plans would carry all clinically appropriate drugs.

Mr. BAUCUS. That is correct, Senator. One of the things I am particularly proud about in this bill is the strong beneficiary protections that will ensure that all Medicare beneficiaries get access to the appropriate medicine they need. You know, Senator Grassley, that there are certain diseases and conditions--like AIDS, and epilepsy-- where having access to just the right medicine is especially important.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today Senator Grassley and I introduce a bill that is the essence of good government. For a few years now the Senate Finance Committee has been working to increase the revenue into the Highway Fund Trust so we can fund a strong national highway program. The committee has also been looking at preventing several schemes, scams and cons against the federal government. These are schemes that are used by participants in the fuel distribution chain to evade federal and state fuel taxes, fuel fraud prevention marries both those goals-fighting fraud and increasing revenue into the Highway Trust Fund. It is crucial to ensure that all the taxes that are due to the Trust Fund are actually getting there, not being diverted as part of some scam to defraud the Federal Government. That is why I am proud to introduce today the Fuel Fraud Prevention Act of 2003. I am aware that this is a very controversial subject, but one that we must address. This fraud represents money that the federal government is losing while crooked individuals are getting rich on the backs of good honest citizens. Uncovering this kind of corruption is what we mean by practicing good government. We need to catch these folks and make sure the money is going where it should. This is money that goes to transportation projects and creates transportation jobs. That is important to Montana and to all states. As a result of both TEA 21 and AIR 21, revenues collected by the Trust Funds are directly tied to spending on surface and air transportation. Therefore adequately funding the nation's transportation infrastructure--both surface and air--is almost entirely based on actually collecting all the taxes that should be collected by law.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today Senator Grassley and I introduce a bill that is the essence of good government. For a few years now the Senate Finance Committee has been working to increase the revenue into the Highway Fund Trust so we can fund a strong national highway program. The committee has also been looking at preventing several schemes, scams and cons against the federal government. These are schemes that are used by participants in the fuel distribution chain to evade federal and state fuel taxes, fuel fraud prevention marries both those goals-fighting fraud and increasing revenue into the Highway Trust Fund. It is crucial to ensure that all the taxes that are due to the Trust Fund are actually getting there, not being diverted as part of some scam to defraud the Federal Government. That is why I am proud to introduce today the Fuel Fraud Prevention Act of 2003. I am aware that this is a very controversial subject, but one that we must address. This fraud represents money that the federal government is losing while crooked individuals are getting rich on the backs of good honest citizens. Uncovering this kind of corruption is what we mean by practicing good government. We need to catch these folks and make sure the money is going where it should. This is money that goes to transportation projects and creates transportation jobs. That is important to Montana and to all states. As a result of both TEA 21 and AIR 21, revenues collected by the Trust Funds are directly tied to spending on surface and air transportation. Therefore adequately funding the nation's transportation infrastructure--both surface and air--is almost entirely based on actually collecting all the taxes that should be collected by law.

Mr. BAUCUS

Mr. BAUCUS. My guess is I will consume a maximum of 10 minutes.

Mr. BAUCUS

Mr. BAUCUS. I thank the chairman for the clarification.

Mr. BAUCUS. That is right. And for clarification's sake, we would like to ask you some questions about this demonstration project. First, in negotiations we intended that this demonstration would be available and would operate without limitation to the number of States, correct?

Mr. BAUCUS. Mr. President, I rise today to engage the distinguished chairman in a colloquy regarding three sections of the conference report, 1860D-2(d)(1)(B) and 1860D-15(b)(3) as they relate to the new Part D prescription drug benefit, and 1860D-31(e)(1)(A)(ii), in order to clarify the intent of the conferees with respect to the prices paid for prescription drugs, particularly the concept of negotiated price.

Mr. BAUCUS. I thank the Senator. Mr. President, returning to my discussion of the conference agreement's provisions, the conference agreement expresses a sense of Congress that the legislation that the President submits in response should eliminate excess general revenue Medicare funding for the 7- fiscal year period. If, during the year in which the trustees issue a warning, Congress enacts legislation that would eliminate excess general revenue Medicare funding for the 7-fiscal year period, then the President would not have to propose legislation in response to the latest warning. The warning would also trigger certain House procedures. Section 803 of the conference agreement sets out the procedures for House consideration of the President's legislative proposal. Within 3 days of receiving the President's legislative proposal, the majority leader and minority leader of the House, or their designees, would introduce the proposal. The legislation would be referred to the appropriate committees which would be required to report Medicare funding legislation no later than June 30. The chairman of the Budget Committee would certify whether the Medicare funding legislation would eliminate excess general revenue Medicare funding for the 7-fiscal year period. Unless the House of Representatives has voted on final passage of the legislation by July 30, the conference agreement would provided fallback procedures. After 30 calendar days--and concurrently 5 legislative days--after the introduction of the legislation, a motion to discharge any committee to which the legislation has been referred would be in order, under specified circumstances, and debate on the motion to discharge would be limited to one hour. The conference agreement provides for floor consideration in the House of the discharged legislation by the Committee of the Whole no later than 3 legislative days after discharge. Now let me turn to Senate procedures. Section 804 of the conference agreement sets out the procedures for the Senate consideration of the President's legislative proposal. Within 3 days of receiving the President's legislative proposal, the majority leader and minority leader of the Senate, or their designees, would introduce the proposal. The Presiding Officer would refer the legislation to the Finance Committee. If the Finance Committee failed to report the legislation-- with or without amendment--by June 30, then a single motion to discharge the committee of any Medicare funding legislation would be in order. That motion to discharge would be subject to 2 hours of debate. If Congress enacted legislation that the Budget Committee chairman certified eliminated the excess general revenue, then the motion to discharge would not be available for the rest of that session of Congress. Once legislation got to the calendar, normal Senate rules would govern its consideration. The motion to proceed to the bill would be fully debatable. The bill itself would be fully debatable and amendable. That is all that this procedure would do. Now, let me take a few moments to talk about what the conference agreement on cost control would not do. The conference agreement does not include references to ``insolvency.'' Some sought to label Medicare general revenue funding of more than 45 percent as indicative of ``insolvency'' and ``unsustainablity.'' The conference agreement contains no such language. The conference agreement does not include a hard cap. Some sought a cap on Medicare spending after general revenues exceeded 45 percent. Congress would have had to vote affirmatively to allow the program to continue above that point. The conference agreement would not be a cap. The conference agreement does not include a new point of order. Some sought a point of order providing that when Medicare general revenues rose above 45 percent during the next 7 years for two consecutive reports, it would not be in order to consider legislation that would increase the general revenue funding. This requirement would be waived or appealed by 60 votes in the Senate. The conference report contains no new points of order. The conference agreement does not eliminate rights to filibuster. Some sought to eliminate the ability of Senators to filibuster the motion to proceed to the Medicare funding bill and to filibuster the bill itself. The conference report does not curtail the right to filibuster either the motion to proceed or the bill itself. In sum, the conference agreement would provide for reports, Presidential legislative proposals, and getting a bill on the calendar. The President or White House staff could get the reports with a phone call. The President could already make a legislative proposal whenever the President chooses. And any single Senator can get a bill on the calendar under current rules. Thus although the conference agreement could provide additional impetus to cause these steps to occur, nothing prevents all of them from occurring under current law. Thus, this is a reasonable set of provisions. And it should not be of concern to those who hold the procedures of the Senate dear.

Mr. BAUCUS. Mr. President, let me take a few moments to provide some background on the cost containment provisions in the Medicare conference agreement. First, let me review current law. Under current law, the Medicare Board of Trustees oversees the financial operations of the Medicare Hospital Insurance--or HI--trust fund--Medicare Part A--and the Medicare Supplementary Medical Insurance--or SMI trust fund--Medicare Part B. The Social Security Act requires Medicare's trustees to submit reports to Congress annually by March 31. Medicare Part A pays for beneficiaries' medical expenses incurred in hospitals, skilled nursing facilities, hospices, and a portion of home health care services. Payroll taxes provide most HI trust fund revenues. Employers and employees each pay 1.45 percent of earnings. Self-employed workers pay 2.9 percent of net income. Other sources of HI revenue include: interest on trust fund investments, the federal income taxes on Social Security benefits raised in 1993, premiums from voluntary enrollees into Part A, railroad retirement account transfers and reimbursement for certain uninsured persons. Medicare Part B pays for physician and other health care practitioner services, other medical and health services, including laboratory and other diagnostic tests, outpatient hospital services and other clinic services, and therapy and ambulance services, durable medical equipment, and home health services not covered under Part A. SMI trust fund revenues come from beneficiary premiums to purchase Part B and general revenues. The Part B premium is set at an amount so that aggregate premiums make up about 25 percent of program costs. The monthly premium for 2003 is $58.70. General revenues make up the remaining 75 percent of Part B program funding. Next, let me note current law on Presidential legislation. Under the State of the Union Clause--article II, section 3, clause 1--of the Constitution, the President has a right to ``recommend to [Congress's] Consideration such Measures as he shall judge necessary and expedient.'' Thus the President can already submit legislation to address Medicare solvency. Current law on House procedures is that the House regularly passes rules that govern House consideration of particular pieces of legislation. The Rules Committee formulates these rules, which the House can then adopt by a majority vote. Thus the House can already establish such procedures as it deems appropriate to consider Medicare legislation. And current law with regard to Senate procedures provides that, under Senate rule XIV, any single Senator can cause a bill to be placed on the calendar. Now let me turn to what was in the House-passed bill. Section 131 of House bill would require the trustees to submit a report on the status of the combined two trust funds and the Prescription Drug Trust Fund. The bill would require the report to include a statement of the amounts spent on benefits in the preceding fiscal year from the general revenues and the percentage the Medicare general revenues bore to all other general revenue obligations of the Treasury that year. The bill would require this information for each year from the beginning of Medicare and for 10-year and 75-year projections. The bill would also require the report to compare the rate of growth of Medicare general revenue funding to the rate of growth in the gross domestic product. The bill would require the Committees on Ways and Means and Energy and Commerce to publish each report and post it on the Internet. The Senate-passed bill was quite similar. Section 131 of the Senate bill would require the trustees to submit a report on the status of the combined two trust funds and the Prescription Drug Trust Account. The bill would require the report to include a statement of the amounts spent on benefits in the preceding fiscal year from general revenues and the percentage that the Medicare general revenues bore to all other general revenue obligations of the Treasury that year. The trustees would make this calculation separately for Medicare benefits and for administrative and other expenses. The bill would require this information for each year from the beginning of Medicare and for 10- year and 50-year projections. The bill would also require the report to compare the rate of growth of Medicare benefits and administrative costs to the rates of growth in the gross domestic product, health insurance costs in the private sector, employment-based health insurance costs in the public and private sectors, and other areas as determined appropriate by the trustees. Section 132 of the Senate bill would require the 2004 reports to include an analysis of the total amount of the unfunded obligations of Medicare. The analysis would compare long-term obligations, including the combined obligations of the HI and SMI trust funds, to the dedicated funding sources for the program--not including transfers of general revenue. With regard to Senate Procedures, the Senate bill would express the sense of the Congress that the committees of jurisdiction would hold hearings on these reports. Now let me turn to the conference agreement before us today. Under the conference agreement, the trustees' report would include a statement of general revenue funding as a percentage of total Medicare spending contributions to the Medicare Program. The report would also include a historical overview of general revenue contributions and estimates of general revenue contributions in 10 years, 50 years, and 75 years. The trustees would compare these trends in Medicare funding to growth rates for gross domestic product, private health costs, public health costs, and other appropriate measures. And the trustees would report on the costs of the new drug benefit under Medicare Part D. The report would also include an analysis of Medicare that assumed that general revenue funding would not exceed 45 percent. Starting in 2005, the Medicare trustees would annually determine whether they projected ``excess general revenue funding'' that is, ``general revenue funding'' exceeding 45 percent of Medicare outlays during the current year or the next 6 years. If the trustees did so 2 years in a row, it would be a ``Medicare funding warning.'' Under the conference agreement, ``general revenue Medicare funding'' would mean total Medicare outlays minus ``dedicated sources.'' ``Dedicated sources'' would mean funding received from outside the Federal Government, specifically: the HI payroll tax, the income tax raised by the 1993 changes in taxation of OASDI benefits, amounts States pay to the Federal Government on account of dual-eligibles funds collected by the ``claw-back,'' premiums paid by Medicare, and gifts to Medicare. The conference agreement would not include interest on trust fund assets in ``dedicated sources,'' as Republican conferees viewed the general fund as needing to pay these amounts to the trust funds. If, for 2 consecutive years of reports, both covering 7-year periods of projections, the Medicare Trustees projected that excess general revenue funding would be required in any of those 7 years, then the Medicare Program would be subject to special procedures and the trustees would notify the President and Congress. The special procedures would be in force only after the second annual report confirmed that excess general revenue funding would be required. Here is a plausible example of how the system would work. When Medicare's trustees issued their March 31, 2010, report, they would examine fiscal years 2010 through 2016. If the trustees projected that in 2016, general revenues would exceed 45 percent of Medicare funding, then 2010 would be the ``notice'' year. The conference agreement says that ``Congress and the President should address the matter under existing rules and procedures.'' When Medicare's trustees issued their March 31, 2011 report, they would examine fiscal years 2011 through 2017. If the trustees once again projected that in at least one year of those 7 years--for example, 2016 or 2017--general revenues would exceed 45 percent of Medicare funding, then 2011 would be the ``warning'' year. The conference agreement would trigger actions in the next year, 2012, the third in this series of years. Next, Presidential legislation: Section 802 of the conference agreement sets out the Presidential response. After 2 consecutive years of trustees' projections that Medicare would have excess general revenue funding, the President would propose legislation in response within 15 days after the President's first annual budget of the next session of Congress. The legislation could use any means to respond, including adding to the dedicated sources. But if the legislation in response did not include matter within the jurisdiction of the Finance Committee, then the Senate discharge procedures would not apply. Now the statutory language says that the bill must ``contain'' matter within the Finance Committee's jurisdiction. The joint statement of managers, based on an earlier draft of the bill, says that the bill must be limited to the Finance Committee's jurisdiction. The joint statement of managers is in error on this point. And of course, the statutory language controls.

Mr. BAUCUS. Mr. President, make no mistake about it, the issue before us--that is, whether a point of order should be sustained--is a vote about whether or not we provide prescription drug benefits to seniors. It is that simple. If we fail to waive this point of order, this bill is dead, certainly for this year, probably for the next Congress. The very narrow issue before us is whether or not it is ``OK'' to spend roughly $4 billion more than the Budget Act previously allocated for the year 2004. It is important to remember that this bill is totally within the Budget Committee's allocation for the 10-year period of $400 billion. So the narrow question is, Is it within the allocation for the year 2004? Now, a couple points here. In 2004, dollars will be spent based upon various pieces of legislation. There is already legislation passed which allocates dollars for 2004. So the conference report itself does not break the 2004 cap, but, rather, it is the accumulation of the dollars in this bill plus previous bills which total up to exceeding the cap allowable for 2004 under the Budget Act by about $4 billion. So the real question we are asking ourselves is, Are we going kill this bill--a bill for which the full $400 billion allocation does not violate the Budget Act--are we going to kill this bill on a mere technicality, a technical trap that any spending in 2004 has the effect of bringing this bill down? Now, it makes no sense to do that because, clearly, we want, in this bill, to spend some money in 2004. What about the doctors in 2004? What about the hospitals in 2004? Are we to tell doctors and hospitals, because of a mere technicality, they do not get reimbursed in 2004? We will suspend payments for a year, but then, beginning in 2005, we could pick them up again? I do not think so. I don't know what Senators are going to say to their seniors back home who vote to sustain the budget point of order to kill the bill because of some spending in 2004 for doctors and hospitals, denying them a prescription drug benefit because they killed the bill. I do not think many people in this body would like to do that. This is a good bill. It is unfortunate that at this stage of the debate, where we are past the listening stage, an awful lot of Senators are not listening to each other. Rather, they are being rhetorical, they are making their rhetorical points, and they are trying to persuade I don't know who, but some people to certain points of view. But if you look at the mere language of the bill, it is a good bill. It provides a prescription drug benefit for seniors, a huge benefit for low-income seniors. One-third of all seniors, under this legislation, are categorized as low-income, and they get the benefits of this bill. We also added in more money for what is called the Medicaid wrap to help lower income folks even more than earlier was the case. We also added in money to help keep retiree coverage. I think it is important to note that companies generally are reducing retiree coverage in America, irrespective of this bill. We have put in $88 billion to companies for retiree coverage, which means, clearly, that those companies are more likely to keep and retain coverage; that is, this legislation intends to encourage the retaining of coverage, not discouraging it. So if this bill goes down, there are going to be more retirees who will lose their coverage. Senior citizens will not get the benefit of a drug benefit, particularly the lower income seniors will not get the benefit, and we will be doing our seniors a terrific disservice. So tomorrow is another day. We can improve upon this bill. If the bill is killed, as it will be if this point of order is sustained, those who hope, ``well, maybe we can do better next year,'' I think should remember the admonition that a bird in the hand is worth two in the bush. Next year is a very political year. It is 2004. It is a Presidential election year. It is almost impossible to predict the dynamics of next year. It depends on the economy. It depends upon foreign policy. It depends upon the Presidential election politics. And we all know that usually in a Presidential election year not much legislation of consequence passes. Usually, there is a lot of talking but not a lot of action. I do not think we can afford passing up giving seniors a chance to get prescription drug benefits. So I urge Senators, on the technical matter before us, to vote to waive the point of order because it does not make much sense to me to let a technicality kill this bill.