Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, will the Senator yield for a question?

Mr. BAUCUS. Mr. President, I just have a couple statements to make, points to make, in view of the last statement, to correct some misimpressions given by the last statement. The last speaker said Medicare cuts apply and this is going to cut Medicare. The fact is--I wish the previous speaker would stay on the floor, but he is fleeing the floor because he knows I am going to mention facts in total refutation to the assertions he is making. He leaves the floor. He will not stay with me to talk about what is going on. He makes statements that are misrepresentations and then he leaves the floor. Let me talk about some of the things he said which are incorrect. One, he basically says Medicare is going to be hurt by these huge cuts to Medicare. The fact is, we are helping the Medicare trust fund with this legislation. The fact is, the Chief Actuary at HHS has said this legislation before us will increase the solvency of the Medicare trust fund another 9 years. That is a fact. Second, he is trying to say there are a lot of big tax increases here. He is trying to direct the public away from what the fact is. The fact is, the Joint Committee on Taxation says there are $436 billion of tax cuts in this legislation, reductions in taxes; $436 billion in tax cuts in the form of tax credits for people who purchase insurance in the exchange. It is a tax cut of $436 billion of tax cuts in the exchange. I might say $40 billion of that is small business tax cuts. They are not increases, they are tax cuts for small business and the tax cuts for individuals is $436 billion. Frankly, I wish I had a lot of the data before me. I don't have it right now to refute other points he made. He talked about premiums going up. The Congressional Budget Office basically says 93 percent of Americans will find their premiums will come down because of this legislation, and for a certain class of individuals--those in the individual market and the small group market will get very significant reductions in premiums on account of this bill. It irritates me, frankly, when Senators come to the floor and make all these misstatements and they are not based at all on fact. In fact, what we need to do around here is get more and more institutions to objectively analyze policy so we know what the facts are. It is pretty hard to argue the facts. The CBO does a pretty good job. The Joint Committee on Taxation does a pretty good job. But if somehow this country could turn to an organization or organizations to find the facts--just the facts--I think it would help a little bit because it is hard to argue the facts. If you have good facts, you generally can create good policy. Back to premiums. CBO says 93 percent of premiums go down. Actually, for about five-sixths of those insured--that is, those who work for larger companies, it is called the large group markets--premiums will go down not a lot but a little. According to CBO, it is up to a 3- percent reduction in premiums. They look at the year 2016 as a benchmark year, so CBO says that for those, about 70 percent of Americans who work for large markets, premiums will actually go down 3 percent. What about 13 percent of Americans who work for small groups, small companies? Basically, CBO and the Joint Committee on Taxation say those could go up 1 percentage point as well as down 2 percentage points. It is about even. It is difficult to tell. But those who get credits in the small group market will find their premiums down by about 8 to 11 percent. Those who work for small companies will find their premiums go down 8 to 11 percent. What about the nongroup market--individuals. Well, basically, if you compare today's insurance premiums with what it might be in the future, the premiums will go down 14 to 20 percent, but because of better benefits, premiums could go up 10 to 13 percent for 7 percent of Americans. As I mentioned earlier, 93 percent will find their premiums go down. For 7 percent they will go up, but for those 7 percent, they are going to have a lot better coverage, a lot better insurance in 2016. All the insurance market reforms will have kicked in: denial of preexisting conditions, market status, health status and so on and so forth. Get this: For the nongroup market, 17 percent of Americans who buy insurance through the nongroup market, 10 percent of that 17 percent, because of tax credits, will find their premiums go down by--guess how much--56 to 59 percent. Once more: 17 percent of Americans buy insurance individually. Of those 17 percent, 10 percent of them will find their premiums will be reduced 56 to 59 percent. That is according to the Joint Committee on Taxation. Only one small group, according to the Joint Committee on Taxation, will find an increase in 2016. That is 7 percent of Americans in 2016, but that will be compensated with a lot better insurance, high-quality insurance. No more rescissions. No more denial based on preexisting conditions. The rating reforms will have kicked in and the annual limits, the lifetime limits will have been repealed. It will be a heck of a lot better insurance. So maybe their premiums will go up a little bit, but they will get a heck of a lot better buy for what they are getting. It is similar to buying a new car instead of a used car--hopefully, a good new car. All in all, in a very real sense, all Americans are going to find his or her premiums will go down. Seven percent will find them go up a little bit, but they will get a heck of a lot better insurance for the premiums they will be paying. The previous speaker is wrong when he says it will increase premiums. The Joint Committee on Taxation says it will not. I didn't hear him quote the Joint Committee on Taxation saying premiums will go up. If you look at the actual analysis by the Joint Committee on Taxation, they find the premiums will go down. Seeing nobody who wishes to speak, I wish to address the question of the constitutionality of the individual mandate. Let me read into the Record an analysis by Mark Hall, prepared by the O'Neill Institute. Basically, he says the following: Health insurance mandates have been a component of many recent health care reform proposals. Because a Federal requirement that individuals transfer money to a private party is unprecedented, a number of legal issues must be examined. This paper analyzes whether Congress can legislate a health insurance mandate and the potential legal challenges that might arise given such a mandate. The analysis of legal challenges to health insurance mandates applies to federal individual mandates, but can also apply to a federal mandate requiring employers to purchase health insurance for their employees. There are no constitutional barriers for Congress to legislate a health insurance mandate as long as the mandate is properly designed and executed as discussed below. This paper also considers the likelihood of any change in the current judicial approach to these legal questions. Potential solutions. Congress's Authority to Regulate Commerce: The federal government has the authority to legislate a health insurance mandate under the Commerce Clause of the United States Constitution. A federal mandate to purchase health insurance is well within the breadth of Congress's power to regulate interstate commerce. Congress can avoid legal challenges related to the 10th Amendment and states' rights by preempting state insurance laws and implementing the mandate on a Federal level. If Congress wants states to implement a federal mandate, it has the following two options: Conditional Spending: Congress may condition federal funding, such as that for Medicaid or public health, on state compliance with federal initiatives. Conditional Preemption: Congress may allow states to opt out of complying with direct federal regulation as long as states implement a similar regulation that meets Federal requirements. Congress's Authority to Tax and Spend for the General Welfare: Congress also has the authority to legislate a health insurance mandate under its Constitutional authority to tax and spend. There are no plausible Tenth Amendment and states' rights issues arising from Congress's taxing and spending power. However, Congress's taxation power cannot be used in a way that burdens a fundamental right recognized in the Constitution's Bill of Rights and judicial interpretations by the U.S. Supreme Court. Since there is no fundamental right to be uninsured, no fundamental right challenge exists. Other Relevant Constitutional Rights: Challenges under the First and Fifth Amendments relating to individual rights may rise, but are unlikely to succeed. The federal government should include an exemption on religious grounds to a health insurance mandate as an added measure of protection from legal challenges based on religious freedom. In the alternative, the federal government can simply exempt a federal insurance mandate from existing federal legislation protecting religious freedom. Considerations: To avoid a heightened level of security in any judicial review, the federal government should articulate its substantive rationale for mandating health insurance during the legislative process. It goes on, and it is probably too lengthy to read. Professor Hall wrote this. He is a professor at Wake Forest University. I will read the conclusion: The Constitution permits Congress to legislate a health insurance mandate. Congress can use its Commerce Clause powers or its taxing and spending powers to create such a mandate. Congress can impose a tax on those who do not purchase insurance, or provide tax benefits to those that do purchase insurance. . . . If Congress would like the States to implement an insurance mandate, it can avoid conflicts with the anti-commandeering principle by either preempting state insurance laws or by conditioning federal funds on State compliance. A federal employer mandate for state and local government workers may be subject to a challenge; however, such a challenge is unlikely to be successful. Individual rights challenges under the First Amendment's Free Exercise Clause or RFRA are unlikely to succeed, although a federal insurance mandate should include a statement that RFRA does not apply or provide for a religious exemption. Fifth Amendment Due Process and Takings Clause challenges are also unlikely to be successful. A legal analysis presented is likely to endure, as the Supreme Court's current position and approach to interpreting relevant constitutional issues appear to be stable.

Mr. BAUCUS. Mr. President, I have a unanimous consent request that I understand has been cleared by both sides. I ask unanimous consent that after Senator Ensign raises the point of order that the Reid substitute amendment No. 2786 is in violation of the Constitution, the point of order be set aside to recur on Wednesday, December 23, at a time to be determined by the majority and Republican leaders.

Mr. BAUCUS. Madam President, I appreciate the Senator's desire to want to cut the payments to his own State, but I object.

Mr. BAUCUS. Madam President, I would like to address a colloquy with Senator Grassley, as he said, on another subject that is not related to this bill.

Mr. BAUCUS. Madam President, the Senate is wrapping up legislative business shortly, but there are a few expiring tax provisions that have unfortunately not been extended. These provisions include tax benefits for individuals and businesses. These provisions would help teachers who purchase supplies for their classrooms and families with college students. Further, a great number of U.S. businesses rely on important tax benefits, such as the research and development tax credit and the active financing exception, both of which expire at the end of this year. The energy industry also relies on several provisions that expire on December 31. Unfortunately, this is not the first time we have allowed important tax benefits to expire. As soon as the Senate reconvenes next year, my intention is that we take up legislation to extend these important provisions. That is why Senator Grassley and I have written a letter to the Senate leadership. I ask unanimous consent to have this letter printed in the Record.

Mr. BAUCUS. Madam President, the letter states our intention to work together to get the extenders done as quickly as possible in the new year. Senator Grassley and I both understand that expiration of these provisions creates uncertainty and complexity in the tax law. Taxpayers need notice of the availability of these provisions to fully and effectively utilize their intended benefits. Finally, we must act quickly to cause the least disruptions and administrative problems for the Internal Revenue Service. I hope when the Senate convenes early in 2010, we can address these expiring provisions as soon as possible. I wonder if that is also the intention of the my good friend from Iowa, Senator Grassley.

Mr. BAUCUS. Madam President, I thank the Senator for his statement. I look forward to working with him and other Senators so we can pass this legislation as soon as possible next year. Again, I commend my colleague and friend. It is true that much more often than not we are working on the same side of an issue. Even on the few occasions when we are on the opposite side, I do say we do it agreeably. I wish more of the Senate would act the same way.

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

Mr. BAUCUS. Madam President, this chart shows very graphically--this is data put together by the Joint Committee on Tax, combining all the various provisions in the bill. Basically, it shows that in 2015--that is the bar on the far left--there will be a $26.8 billion net tax cut for individuals--net tax cut. Two years later in 2017--that is the middle vertical bar--there is a net tax cut of $40 billion for all Americans--a net tax cut. Not for all Americans. Some will not get it, but most Americans by far will. Then, of course, 2 years later in 2019, there is a net tax cut of $40.8 billion. I wanted to make it clear that there is a net tax cut in this bill, according to Joint Tax. This is the distribution over 3 different years--2015, 2017, and 2019. That is information prepared by the Joint Committee on Tax. I want Americans to know there are tax cuts in this bill, and they are very significant. Madam President, I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I have control of the Democratic block of time, and I yield 25 minutes to the good Senator from Rhode Island.

Mr. BAUCUS. Mr. President, pending a potential unanimous consent request by the two leaders, I now yield such time as the Senator from Massachusetts desires.

Mr. BAUCUS. Mr. President, reserving the right to object, I wish to inquire whether, under that consent request that is being propounded, secondary amendments would be in order to any of the first-degree amendments on that list.

Mr. BAUCUS. I do not object.

Mr. BAUCUS. Mr. President, I very much thank my good friend from North Dakota for his generous statements. As he knows, this is all teamwork. We are all in this together, all Senators, especially on this side of the aisle, with the President, to get health care reform finally passed for all Americans. Teddy Roosevelt started this many years ago, and many Presidents since have been unable to get health care reform passed. I think finally this time we are going to do it, and it is a moment of which we are all very proud. Mr. President, I yield the remainder of my time to the Senator from Washington. I don't know how much that is, but whatever it is, it is all hers.

Mr. BAUCUS

Mr. BAUCUS. I wonder if the Senator would yield briefly.

Mr. BAUCUS. I am pointing out, as the Senators know, for example, under this legislation, the Federal Government pays all the costs of eligible enrollees through 2016. In this legislation, we are talking about the so-called expansion population. That is those between 100 percent of poverty on Medicaid and 133 percent of poverty, and under the underlying statute----

Mr. BAUCUS. In 2016, all States are treated the same.

Mr. BAUCUS. Beginning next year, when this goes into effect, 2010 through 2016, all States will get 100 percent payments for that expansion coverage.

Mr. BAUCUS. Afterward, under current legislation--one sentence of background. Today, as the Senator well knows, different States receive different Federal contributions to Medicaid. It varies according to States. The average is about 57 percent Federal. The average for all States on average is 57 percent of the cost of Medicaid is paid for----

Mr. BAUCUS. Let me finish.

Mr. BAUCUS. Let me answer the question.

Mr. BAUCUS. I can answer only one question at a time. The first question is from the Senator from Mississippi. Then, after 2017, all States get 90 percent--we are talking about expansion of population.

Mr. BAUCUS. Reserving the right to object, I think it would be highly imprudent for me not to object, so I will object to that request. I also point out that on average, Uncle Sam pays 90 percent of the Medicaid payments for this expansion of population after the year 2016.

Mr. BAUCUS. The Senator carried my State too.