Robert Bennett

Mr. BENNETT

Mr. BENNETT. I will be happy to respond in any fashion on the time of the Senator from Florida.

Mr. BENNETT. Responding to the question, I point out that the slowing of the rate of growth in the health care costs that we are talking about for Medicaid and Medicare is already going on in the private sector, and there is much we can learn from the private sector. It is the attempt to turn the public programs into an airtight compartment where they are immune from the kinds of changes that are occurring in the private sector that has produced some of this. I would suggest that the Senator take a long look at what has happened in the State of Tennessee. He mentioned Medicaid. In the State of Tennessee, as I understand the numbers from the Governor of Tennessee who called on me, Medicaid costs were increasing at the rate of 20-percent per year for over 8 years running. The then Governor of Tennessee, a member of the Senator's party, decided that that would bankrupt the State and something had to be done about it. Tennessee, as of January 1, 1994, moved to a system more compatible with that which is normal in the private sector, and in calendar 1994, instead of increasing at 20-percent per year, Tennessee increased their Medicaid costs at .12 percent--less than 1 percent. Almost .1 of 1 percent. The TennCare solution in Tennessee has problems. I will not stand here on the floor and say it does not. But it has demonstrated very clearly that moving towards the solutions already tried in the private sector can, and in that State's case, has produced a significant cost difference. When I talked to the current Governor of Tennessee, who happens to be a member of my party, building on the actions of his predecessor, he said, if we are allowed continued waivers from the Federal guidelines, which waivers were granted to his Democratic predecessor, we can prove that we can keep the growth of Medicaid in our State within the constraints that are outlined in this budget resolution. There are examples out there of how these changes are occurring in the private sector. As the Senator says, not in isolation. They can move into what has been the watertight compartment of Medicare and produce the same results if we work together for that.

Mr. BENNETT. I also yield the floor, Mr. President.

Mr. BENNETT. Correct. Restructuring would have to address part A and part B. It is actually time for a clean sheet of paper and to say, we have approximately $5,000--we will take a median figure--per person per year to spend on health care for our elderly. Now, what is the best way to spend that $5,000 to produce the greatest possible benefit for the elderly and avoid the evils of cost shifting and tax increases that the Senator from Florida was talking about?

Mr. BENNETT. The Senator is correct. This is a relic of the 1960's and not consistent with the way health insurance is offered in the private sector today.

Mr. BENNETT. The Senator is correct.

Mr. BENNETT. I am happy to.

Mr. BENNETT. I thank the Senator for his question. It is my opinion that restructuring the entire health care system in this country with a single bill in a single Congress proved in the 103d Congress to be an impossible task. To attempt to do it again and again would be to say to the world that we had learned nothing from our experience in the 103d Congress, we are just going to go back to the same mistake that Congress made--in all good faith. I do not accuse anybody of approaching that task in bad faith in the previous Congress. But the experience just told us that to try to do everything simultaneously ultimately meant we did nothing. I believe we should break it up--the President himself used the phrase in his State of the Union Message, ``a step-by-step approach''--break it up into acceptable components, and the one that is the most pressing and the most urgent is the restructuring of Medicare around the new realities.

Mr. BENNETT. Yes.

Mr. BENNETT. Mr. President, I had the pleasure and opportunity of being in the Chamber when the Senator from Florida began his presentation, and I would like to rise and comment on it. I think the position the Senator has taken with respect to Medicare is entirely correct if you make one assumption, and that is that the delivery of services under Medicare would not change in its estimate or in the way they are paid for. If there is no change in the way Medicare is administered and no change in the way these services are paid for, the Senator from Florida is exactly correct. Unfortunately, from my point of view, however, Mr. President, that is the problem; that is, the assumption that there will be no change in the way Medicare is administered. The Senator from Florida says these cuts will have to be converted into service cuts, they will have to be converted into cost shifting, they will have to be converted into increases in premiums that are not sustainable over the long term. And, again, if there is no change in the way Medicare is administered and no change in the way it is paid for, the Senator from Florida is entirely correct. The thing I hope we will address as a body is this fundamental question of Medicare as it is currently constituted and recognize that the word which the Senator from Florida picked out, ``sustainable,'' is, indeed, the keyword because what we are learning as we get into this circumstance is that the present system of Medicare is not sustainable regardless of what we do. We could take all of the money that we are talking about cutting out of the rate of increase and leave it as it is, and what would happen to Medicare? It would go broke. The trustees have told us that. The present system is not sustainable. We could say, ``All right, let us add money.'' Where is it going to come from? We will leave that aside for a minute, but let us add money to the present system to prevent it from going broke, and all we do is delay the inevitable for a few more years, and then we will be back on the floor of the Senate, or our successors will be, debating the same issue. I have an analogy, Mr. President, that helps me understand this. I will do my best to lay it out in a fashion that might be clear to some others, because some people, when I start, say, ``Oh, that doesn't have to do with anything.'' But bear with me. This is an analogy that I think illustrates the point. Back in the 1960's, when we first started--we as a nation--discussing Medicare, my father was in the Senate and I was acting as his campaign manager. I have mentioned this here before. At the time, if I wanted to talk to my father from the campaign headquarters in Utah, I would pick up a telephone and dial zero. Yes, you had to dial; there were no touch-tone phones. An operator would come on the phone and say, ``What number, please?'' I would say to her, ``I want 224-5444.'' It happens to be the same number that connects you to my office now. She would say, ``Do you want person-to-person or station-to- station?'' If I wanted absolutely to talk to my father, I would say, ``Person- to-person.'' If I was willing to talk to anybody on the staff, I would say, ``Station-to-station,'' and then I would wait there on the phone while she placed the call. If I had said person-to-person, she would say, ``Is Senator Bennett there?'' And they would say, ``Just a moment, we'll find him.'' And then when they found him, when he came on, then and only then would she go off the line and I could start to talk to my father. The system worked great. It was simple, certainly easy for me to understand, certainly convenient. All I had to do was tell her what I wanted and let her handle all of the details of placing the call. There was one problem with it, however, Mr. President. As the demand for long distance service grew in this country, we reached the point very quickly where there were not enough operators in the country to handle all the calls. Indeed, if you projected it out into the future, we would be looking at a point where there were not enough people in the world to handle all of the telephone calls that people would make requiring an operator to come on, listen to the request, and handle it. We were forced, whether we wanted to or not--we wanted to--whether we wanted to or not, we were forced by the rising demands to leave a system that was working well and invent a new one. Now, of course, we have a new one where the number of operators handling long distance calls has gone down and the number of long distance calls has exploded exponentially. This, frankly, Mr. President, is the problem we are facing with Medicare. The number of people on Medicare is going up and going up continually and inevitably. I say somewhat facetiously, Medicare, as presently constituted, will work just fine if the elderly would only cooperate by dying at the same rate they died in 1960, when this was created. But I do not want the elderly members of my family to cooperate in that fashion, and I am sure that is true of everyone else here. So Medicare has to be restructured around the new realities, and the new realities say it can no longer be, as it is now, the last bastion of fee-for-service indemnity insurance for the United States. There has to be some changes and the changes have to be cost driven. As chairman of the Republican health care task force, I got a lot of people calling on me and giving me information. They inaccurately assume I hold a legislative power in this circumstance and can do something beyond recommend, but it makes for a great education. I had a session with a number of the Nation's leading employers, and we were talking about health care. They said, ``Fee-for-service indemnity insurance will be gone within 5 years as an option for America's employees.'' I was a little startled at that prediction. I had not been prepared for that. One of them said, ``We put in a series of options for our employees about 3 years ago, and fee-for-service was one of the options. Roughly 50 percent of our employees accepted that option. The others picked a form of HMO or PPO, some kind of managed-care circumstance.'' He said, ``Fifty percent fee-for-service indemnity insurance, 50 percent some sort of managed care. Without any pressure from us,'' he said--this is the employer speaking--``we have watched the marketplace take hold. Today, just 3 years later, 15 percent of our employees choose the fee-for-service option.'' He said, ``We have cut our health care costs''--not Washington-style cuts, where you simply grow more slowly than you did before; real cuts, where you spend less than you spent before by providing these options--``and our employees, in terms of the questionnaires they give us back, are happier with their health care options than they were 3 years before.'' So, Mr. President, what we are really talking about, if we can take the big view here, is restructuring Medicare around the new reality and saying, ``What will the numbers be to make Medicare rational from the standpoint of those who are paying for it,'' those who are paying for it being the taxpayers. And we are saying we are going to allow Medicare to continue to grow, indeed we are going to allow the individual contribution per year to go from $4,400 per year, roughly, to $6,300 per year. We are going to allow this thing to go up almost 50 percent in that period, but that is the number that those of you who are involved in figuring out how to restructure it have to shoot at. I am not on the Finance Committee. As I say, I have no legislative authority to do this. But I am on the health care task force, and we are looking at these options. We are confident, Mr. President, that we can come up with a restructuring of Medicare around this new reality that will ultimately go back to the lesson learned in long-distance phone calls--that is, that something can be created around the information and the experience we are getting out of the private sector that says to us we can provide better service for our elderly within the price constraints that we are looking at. But if the option is to not try to change the system, just pay for it, whatever it costs, then we are in the black hole that the Senator from Florida so accurately pointed out to us. So I hope that as we conduct this debate, we will do so with the understanding that we, as a Congress, have a great deal of unfinished work to do with respect to Medicare, and it is in the restructuring of the system around the new realities. And I am one who believes we can meet that challenge.

Mr. BENNETT

Mr. BENNETT. Mr. President, we have come to the end of this debate. We have heard a great deal about education, a great deal about numbers, whose numbers add and whose numbers do not. Mr. President, I will not try to repeat or summarize all the rhetoric that has gone down. There is one point that perhaps has not been adequately made that needs to be understood by all Senators before we vote. If we pass this amendment, the entire $170 billion reserve is lost. The $170 billion reserve exists only if the Senate budget resolution passes as structured. It comes from the scoring of the CBO that says if this amendment passes as structured, the lowering of interest rates and other economic activity that will occur as a beneficial result of this budget will produce an additional $170 billion. If the budget does not pass and is not enforced as structured, the $170 billion will not be there. So the $40 billion that is taken in additional spending breaks through the one condition that the CBO laid out when they promised the $170 billion--I am informed by the chairman of the committee that if this amendment passes, the $170 billion that we thought would be available to the Finance Committee for consideration for other purposes will, in fact, not be there. And the whole $170 billion will disappear. If for no other reason, Mr. President, that alone is reason enough to vote down the Harkin amendment. We must recognize the work that the Budget Committee has done and how carefully they have structured all of their numbers, how carefully it has been examined by the CBO, and on what thin ground the $170 billion reserve fund rests. It is not thin ground in the analysis, but it is thin ground in terms of the ease with which the ground could be cut away by amendments that break through the overall limit. If we, in our wisdom, decide we want to increase the budget by that $40 billion, meaning there will be no balanced budget by the year 2002 because there are no offsets in the Harkin amendment, meaning that we do not reach our target, then what the CBO says the cost will be, will be $170 billion gone in the form of lower interest rates and lower economic activity. The Budget Committee, as I understand it, did not put that in. It came from the CBO after the analysis. Senators must keep that in mind as we cast this vote. I yield the floor. Vote on Amendment No. 1116, as Further Modified

Mr. BENNETT. I would have no objection.

Mr. BENNETT. I thank the Senator. I have two observations. One is a personal one. I remember when I went to the University of Southern California where my son decided he wanted to go. I went there with some fear and trembling because I did not think I could afford to have him do that, my two other children having gone to much cheaper institutions financially. I said, ``Can I get a loan?'' They said, ``Well, what is your income?'' I told them my income. They said, ``Well, we are not sure. Do you have any other children in college?'' I said, ``Oh. Sure.'' I have six children and not all of them were in college at the same time but enough were. They said with other children in college I could get a loan. I said, ``Good. At a lower interest rate?'' ``Oh, yes. Subsidized interest rate.'' Then they said, ``By the way, what is your house worth?'' I was living in southern California at the time, and real estate prices had gone sky high. And when I told them what my house was worth, they said, ``There is no way in the world you can qualify for a loan with that much net worth.'' The only way I could get that son in school was to take out a second mortgage on my house. But I could not get it subsidized with a Government program because my house was worth too much. So, on a personal basis, bringing down the interest rates 2 percent on my home loan would have been tremendously valuable to me in terms of what I could afford for that student. And that goes to the point I was making earlier, which is this budget resolution, if passed intact, will not only benefit those students that are getting student loans from the Government but the over 50 percent of students whose loans are not subsidized by the Government but whose parents are paying for it directly. I refer you to the chart which the senior Senator from New Mexico has placed on the floor, and I ask the Senator if he would care to take us through that. I yield such time as the senior Senator from New Mexico may require.

Mr. BENNETT. Was that $928 trillion?

Mr. BENNETT. I will yield for an additional comment.

Mr. BENNETT. I agree that it is ironic. But it goes beyond that, if I may respond. The adoption of this amendment would imperil the creation of the so- called special fund or discretionary fund at the end of the process from which they intend to take the $40 billion. In other words, if in fact more money is spent on education than is called for in this resolution, the fund at the back end will not occur and, therefore, it will not be available to them to pay for the $40 billion that they are spending. The only way that can be there is if the budget amendment is held intact. So it is not only ironic; it is fiscally impossible for you to do both things at the same time.

Mr. BENNETT. Mr. President, we have had some general statements about education here. Undoubtedly we will have some more before this time is up. May I ask how much time remains?

Mr. BENNETT. I cannot speak for other Senators. When I get in my presentation, if the questions are not so much a barrier to prevent me from going on to the point I would make, I will be happy to yield for questions at the appropriate time, and tell my friend he could look forward to that, if he can stand the boredom of staying on the floor until I get going.

Mr. BENNETT. I will be happy to yield to my friend for a question.

Mr. BENNETT. Mr. President, I yield myself such time as I may require and will yield shortly to the senior Senator from New Mexico, who has a point to make.

Mr. BENNETT. As per the previous agreement, I yield 4 minutes to Senator Harkin and reserve the remainder for myself.

Mr. BENNETT. How much time remains?

Mr. BENNETT. I thank the Senator. Mr. President, how much time remains?

Mr. BENNETT. The entire worth of the country is about $27 trillion.

Mr. BENNETT. I think the Senator missed a decimal point.