Kent Conrad

Mr. CONRAD

Mr. CONRAD. Mr. President, let me alert colleagues, if this amendment is adopted, we will be here until 2 o'clock this morning. I hope that sobers everybody's consideration on this matter. On a serious note, the Lott amendment blows a hole in the budget because it is not paid for. It is not offset, $231 billion not paid for. I urge colleagues to vote no. Let's not give up the gains we have made in these hours of work to balance the budget by 2012. Please, reject the Lott amendment.

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. CONRAD. Mr. President, I have another package of cleared amendments that Senator Gregg and I have agreed to. Amendment No. 638

Mr. CONRAD. Mr. President, I ask unanimous consent that the Gregg- Conrad amendment No. 638 be agreed to.

Mr. CONRAD. Mr. President, I ask unanimous consent that the Smith amendment No. 518 be agreed to.

Mr. CONRAD. Mr. President, let me say for the colleagues who are waiting, we are working on a final package of amendments to be adopted by unanimous consent. That package has many amendments by many colleagues. It has to go through a vetting process. It is not quite complete. As soon as it is, we will move to that and then to final passage. I thank my colleagues for their extraordinary cooperation. So many colleagues have agreed to withhold amendments. It has been very helpful. We have to have this final process complete before we can go to final passage. While we are awaiting that package, I would like to take this opportunity to thank the staffs who have made truly an extraordinary effort. Mary Naylor, my staff director; John Righter, my deputy staff director; the counsel, Lisa Konwinski; Kobye Noel, who is the one who does all of our charts. I know my colleagues enjoy them; Joel Friedman, my other deputy staff director; Steve Bailey, who does the tax work; and Jamie Morin, who does defense. I thank all of the others on my staff who have done such an extraordinary job working nights and weekends for weeks--Steve Posner, Stu Nagurka, David Vandivier, Mike Jones, Jim Esquea, Sarah Kuehl, Jim Miller, Joan Huffer, Cliff Isenberg, Brodi Fontenot, Robyn Hiestand, Susan Reeves, Jim Klumpner, Anne Page, Ben Soskin, and Josh Ryan. I thank each and every one of my staff. I also wish to recognize the extraordinary professionalism of Senator Gregg's staff. They are absolutely first rate and absolutely dependable--people whose word you can count on. Of course, no one is better than the ranking member, Senator Gregg. He has demonstrated over and over his willingness to cooperate; more than that, his professionalism and also his extraordinary knowledge of the budget. I wish to thank all of those who have participated.

Mr. CONRAD. Mr. President, I ask unanimous consent that the following managers' amendments be considered en bloc, that they be agreed to en bloc, and the motions to reconsider be laid upon the table: Senator Nelson, No. 580; Senator Obama, No. 599; Senator Levin, No. 632; Senator Casey, No. 617; Senator Carper, No. 540; Senator Pryor, No. 611, with a modification; Senator Dorgan, No. 544; Senator Obama, No. 524; Reed-Collins, No. 596; Bingaman-Domenici, No. 600; Webb, No. 537; Pryor, No. 627; 639; Baucus-Grassley amendment, which is at the desk; Dorgan-Snowe, No. 589, with Senator Stabenow; Senator Voinovich, No. 470, with a modification; Senator Coleman, No. 572; Senator Murkowski, No. 551, with a modification; Snowe, No. 629, with a modification; Senator Grassley, No. 636; Senator Dole, No. 633; Senator Enzi, No. 635; Senator Specter, No. 506; Senator Grassley, No. 548; and the Dole amendment 640, which is at the desk.

Mr. CONRAD. I move to reconsider the vote, and I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. CONRAD. Mr. President, we have now taken the next step on the journey to having a budget resolution in place for the Nation. It passed the committee and has now passed the Senate. This is an important turning point for the Congress, certainly for the Senate. Three of the last five years, our country has not had a budget. It is important--critically important--for the Congress of the United States to agree on a budget. I would be the first one to say this is an imperfect budget, but it does advance the cause of having the discipline of a budget for our country. I thank all of our colleagues who have worked to this end, even those who voted against it but who cooperated in the process. I especially thank Senator Gregg again and his outstanding professional staff. I see his staff director, Scott Gudes, who has been a true professional. I very much appreciate having the chance to work with people of that caliber. And again, to my own staff director, Mary Naylor, who has worked such extraordinary hours, weekend after weekend, night after night until 10, 11, sometimes 2 in the morning, this has truly been an extraordinary effort, and I thank her, and I thank all of my staff. To many of them who are here, I say thank you. You have done this institution proud, and I appreciate it deeply. Mr. President, I suggest the absence of a quorum.

Mr. CONRAD

Mr. CONRAD. Mr. President, first of all, the chart by the Senator is factually wrong. When he puts up a zero, he is not talking about my budget because my budget has $15 billion in savings out of Medicare. So that chart, as colorful as it is, is just factually inaccurate. No. 2, if we look at what the Senator is proposing, the majority of the Medicare savings that are in the President's budget that Senator Cornyn is picking up in his proposal are generated by either freezing or cutting market basket updates for hospitals, for nursing homes, for rehabilitation facilities, for hospice, for home health, and ambulance services in every year over the next 10 years. MedPAC, which makes recommendations on market basket updates 1 year at a time, does not concur with many of the proposed cuts in 2008, much less the cuts over the next 10 years. For example, given the negative margins many hospitals are facing, MedPAC which is bipartisan, nonpartisan--has recommended a full market basket update in 2008 for inpatient and outpatient hospitals. In many cases, over time, these across-the-board cuts proposed by Senator Cornyn will hurt seniors' access to health care. There is no question about us having a serious problem with respect to the long-term entitlement challenges and what is the right way to deal with it. Frankly, I don't think any budget resolution is the place to deal with the long-term entitlement challenge. The budget resolution is only for 5 years. The contribution the budget resolution can make is to achieve balance within that period, budget balance within that period, but I believe the long-term challenges, which are challenges of 15, 20, 25 years, can only be resolved by a bipartisan working group or commission, equally represented by Democrats and Republicans, to come back to Congress with a proposal to deal not only with Medicare but Medicaid and Social Security and the other long-term fiscal imbalances we have. Senator Gregg and I have such a proposal. I think that is the right way to address these long-term problems. We all acknowledge we are on a course that absolutely is unsustainable. As chairman of the Budget Committee, I have organized hearing after hearing after hearing to put a focus on precisely that problem. We all know in this country that we are spending far more on health care than any other country. Mr. President, 16 percent of our gross domestic product is going for health care. The next largest spender in comparison is at 11 percent of gross domestic product. That difference--the difference between 11 percent of gross domestic product and 16 percent--is $800 billion a year--a year. To put the President's Medicare and Medicaid cuts and the cuts proposed by this amendment in perspective, consider that his budget would cut those programs by $270 billion over the period from 2008 to 2017. Those savings would be more than wiped out by the $2 trillion in tax cuts proposed by the President over that same period. They talk about helping us get back on some kind of fiscal path, but the math doesn't work. The math doesn't come close to working. They would have savings from Medicare and Medicaid of $270 billion over that 10-year period, but that is totally dwarfed by the cost of their tax cuts over that same period. I do not believe this amendment merits our support. I do not believe this is the right policy. I do not believe cutting the reimbursement for hospitals, for nursing homes, for rehabilitation facilities, for hospice, for home health, and ambulance services is the right way to proceed. I do believe we need separately, apart from a budget resolution, to deal with the long-term entitlement challenges, either through the kind of working group Senator Gregg and I have proposed or through a bipartisan commission. I don't think a budget resolution that will be largely supported just on one side of the aisle is the appropriate place to deal with these long-term challenges. Mr. President, what is the time remaining?

Mr. CONRAD. I yield the floor.

Mr. CONRAD. Mr. President, I don't think we are quite prepared to do that because we have others who are going to want to speak. But I think we can deal with this pretty expeditiously and come pretty close to the tentative schedule to which we agreed.

Mr. CONRAD. Mr. President, much of what the Senator has just said, frankly, I agree with. The truth is, we are on a completely unsustainable course. It must be dealt with. The question is how to best deal with it. With respect to the amendment of the Senator from Texas, I got a letter from 43 of our colleagues in the Senate, including 11 Republicans, on this very subject. They said: Do not cut hospital reimbursement. In my part of the country, hospitals are dealing with negative margins. They are losing money. If this amendment were to go forward, unfortunately, it would be devastating to hospitals, to nursing homes, to hospice care, to ambulance services, especially in the rural parts of our country, and virtually every State has rural parts. The MedPAC statistics are very clear on this question. Yes, there are some hospitals that are enjoying positive margins. They tend to be urban hospitals that have much higher rates of reimbursement under Medicare than do rural hospitals. Let me give an example. In my State of North Dakota, at Mercy Hospital in Devils Lake, ND, if they are treating somebody who had a heart attack, they get one-half the reimbursement of Our Lady of Mercy Hospital in New York City--one- half as much. Their costs aren't half as much, but their reimbursement is half as much. By the way, those hospitals, many of them in my State--I have over 40--are experiencing negative margins. They are losing money. The Senator says this doesn't represent a cut. He is right in one sense. It will be more money. But in relationship to the expense, it will be less. That is the way in which it represents a cut. He is absolutely correct it will be more dollars the next year than the year before, but in relationship to the expenses, which are going up more rapidly in health care, as we all know, than the underlying rate of inflation, guess what. It will be less. That is why I use the term ``a cut.'' To say the budget before us doesn't do anything about these matters is not true. First of all, we have $15 billion of Medicare savings in the underlying budget resolution. That is No. 1. No. 2, we have a reserve fund called the Health Information Technology Reserve Fund. All of us know the expansion of information technology in health could lead to very significant savings. In 2005, only 15 to 20 percent of physicians' offices and 20 to 25 percent of hospitals had electronic medical records systems. According to estimates by a RAND study from 2005, our Nation's health care system could save more than $81 billion annually if we had widespread implementation of electronic medical records--$81 billion a year. That totally dwarfs the savings of the amendment of the Senator from Texas. Mr. President, I know the Senator from Ohio is here and wishes to respond. I yield 5 minutes to the Senator from Ohio.

Mr. CONRAD. Mr. President, I actually enjoy listening to my colleague, Senator Gregg, because he is thoughtful and passionate on these matters, and in many ways we are in very close agreement. I know it may not appear that way to people listening, but there are many things the Senator says that are absolutely true, and so that part of his presentation I want to agree with. It is absolutely the case that we are headed on a course which is unsustainable. It is absolutely the case we cannot continue on the current path. It is absolutely the case that, in my judgment, a policy initiative along the lines of what the Ensign amendment provides is going to have to be part of an ultimate solution. In fact, I voted for such things with respect to Part B in the past. I have supported them publicly. I have campaigned on those things. But I must say, the reality here is this: We all know the budget resolution does certain things and does not do certain other things. The budget resolution, as much as we might want it to, does not determine policy outcomes such as those prescribed in the Ensign amendment or, for that matter, the Cornyn amendment. It simply doesn't have that power. The budget resolution will give an assignment to the Finance Committee of how much money to raise, of how much money to spend. It does not tell them how to do it. Both the Cornyn amendment and the Ensign amendment seek to do something the budget resolution cannot do. They seek to prescribe, to require the Finance Committee to come up with certain policy outcomes. The Budget Committee does not have that power, it does not have that authority, and it cannot be done through a budget resolution. Let's be square with people who are listening about what we can do and what we cannot do. The effect of these amendments, the true effect, will not be to do any of the policy prescriptions we talked about here. It will only be to reduce the amount of money for Medicare the Finance Committee has to meet the needs of the American people. That is what these amendments will do. On the specific policy of the Ensign amendment, I am sympathetic to the basic notion. The problem is the specifics. The devil is in the details. First, as a member of the Finance Committee as well as the Budget Committee--and the Finance Committee will decide this, not the Budget Committee--on the policy of this amendment raising Part D premiums for certain higher income enrollees, I have many questions. How would CMS go about charging some people higher premiums under Part D when the premiums are set by drug plans, by private drug plans, not by CMS? How is that going to work? How can CMS require higher premiums to be collected from private plans? As we all know, there are more than 1,500 private drug plans, each with a separate premium they offer. How, conceivably, would this policy be implemented? Premiums are important price signals for beneficiaries in the Medicare Part D Program. Under this approach, would we be setting multiple premiums for a single Part D plan? Will this not add to the complexity of the program? This seems to dramatically complicate the market-based approach of Part D. When the administration came before the Finance Committee on this proposal, they had no answers when asked how their premium proposal would actually work and how it would affect the ability of beneficiaries to shop for plans. The administration simply had not thought through how this would all work in the real world. This is another reason why the Budget Committee in a budget resolution does not make these judgments. It simply does not because this is a policy determination that is in the authority of the Finance Committee. While I am very sympathetic to the basic notion of income-related premiums and Medicare--I think it is going to have to be part of the long-term solution--the Budget Committee doesn't make these determinations. The Budget Committee does not make this policy. To suggest it does is simply to mislead our colleagues and mislead those who are listening. The one thing that these two amendments, the Cornyn amendment and the Ensign amendment, would do is to cut funding, reduce funding that the Finance Committee would have to provide resources under Medicare. All the other things they have talked about here, the policy prescriptions they have outlined, are a nullity. They mean nothing because the Budget Committee and the budget resolution do not make those decisions. Let's go to the larger question of how are we going to get out of this very serious long-term entitlement crunch we face? As I have indicated, I believe the only way it is going to happen is either a working group or a commission that is bipartisan in nature, evenly divided between Republicans and Democrats, that is given the authority to come up with a plan and that they then come back to Congress on a fast-track basis for congressional approval. I believe it requires the involvement of the administration. I believe it requires the involvement of Democrats and Republicans in the Senate and the House. I believe it involves health information technology--which we have a reserve fund in this budget resolution to address, which the RAND Corporation has told us could save $80 billion a year. I believe it involves focusing on the chronically ill; that is the 5 percent of Medicare beneficiaries who are using half of the money. We already know if we better coordinated their care, we could have substantial budget savings and get better health care outcomes. What a remarkable thing that would be, to both save money and to get better health care outcomes. How could that be? Very simply: That 5 percent of Medicare beneficiaries who are using half of the budget, no one is managing their cases--or in most cases nobody is managing their cases. So what happens? They are seeing multiple specialists who are giving them multiple prescriptions. They are being subjected to multiple tests, none of it very well coordinated. As a result, a lot of money is wasted and in many cases they are made less healthy. How can that be? We did a study with some 20,000 patients. We put a case manager on every one of their cases. It was very interesting. The first thing they did was go into their households and get out all the prescription drugs they were taking. On average they found they were taking 16 prescription drugs. After review of the cases, they found they could cut that in half, cut it down to eight prescription drugs. The result was, people were healthier. Let me give an example from my own life. I went into my father-in- law's kitchen and got all the prescription drugs he was taking out on the table. Sure enough, he was taking 16 different prescription drugs. I got on the phone to the doctor, started going down the list. When I got to the third drug he said, My God, he should not be taking that. He should not have been taking that for the last 3 years. I go further down the list, two drugs he is taking, the doctor says to me, He should never be taking those two together, they work against each other. I said, Doctor, how does this happen? He said, It is very simple. Your father-in-law has three doctors: a heart doctor, a lung doctor, an orthopedic specialist; he has me as his family practice physician. They are all prescribing different drugs for him. None of them know what the other is doing. He is sick and confused, his wife is sick and confused--we have chaos. He said, I am the one who is supposed to know, but your father-in-law is getting prescriptions in the hospital pharmacy, the corner pharmacy, the pharmacy down at the beach, he is getting a mail order. As I say, he was sick and confused, his wife was sick and confused and nobody knew what was happening. He had three MRIs in the last 9 months of his life. That is what is happening in this medical system over and over. That is where the big money is. These amendments do not do anything about it and the fact is, no budget resolution can do anything about it because the budget resolution does not decide these policy matters. It is left to the committee of authorization. It is left to the committee that has jurisdiction, and the committee that has jurisdiction on these health policy issues is not the Budget Committee, as much as I might wish it were so. The committee of jurisdiction is the Finance Committee. They are the ones that will make these policy determinations. As well meaning as these amendments are, No. 1, they do not do what they say they are going to do and, No. 2, the thing they do accomplish is to cut funding for Medicare. And MedPAC, the nonpartisan-bipartisan professionals who make recommendations to us on Medicare policy, has said these cuts, these specific cuts would be counterproductive; that they would cut hospitals, they would cut nursing homes, they would cut hospice care, they would cut ambulance services. In rural areas where hospitals are already suffering negative margins, what these amendments might accomplish is to put those health care facilities right out of business. That is what would happen in my State, according to the hospital directors of the more than 40 hospitals in my State. They say: You pass these amendments and some of our hospitals are shutting their doors. I yield the floor.

Mr. CONRAD. We can do that after I yield 5 minutes to Senator Stabenow on these amendments, and then we can.

Mr. CONRAD. Fair enough.

Mr. CONRAD. Senator Ensign will now be recognized for 5 minutes. We will then go to Senator Wyden, Senator Lieberman, and Senator Dorgan. We appreciate very much Senator Ensign limiting his remarks to 5 minutes. Amendment No. 472

Mr. CONRAD. Mr. President, reserving the right to object, have we seen this modification? Let me just reserve on that until I have confirmation. Is this a Cornyn amendment which is being modified?

Mr. CONRAD. That is fine.

Mr. CONRAD. Mr. President, Senator Ensign had talked about his amendment, and I did not have a chance to, once again, respond. I would like to take that opportunity now, while we are waiting for Senator Dorgan. Perhaps Senator Gregg would want to respond to what I might say. Before we do that, maybe we should enter into an agreement with respect to the votes that will occur at 11:30. So for that purpose, Mr. President, I ask unanimous consent that at 11:30 a.m., the Senate proceed to vote with respect to the following amendments in the order listed; that there be 2 minutes for debate before each vote, equally divided, and that after the first vote, the time for the votes be limited to 10 minutes; that no amendments be in order to any of the amendments covered under this agreement: the DeMint amendment No. 489, the Allard amendment No. 491, the Baucus amendment No. 504, and the Cornyn amendment No. 511.

Mr. CONRAD. Mr. President, let me just take a moment now to respond to Senator Ensign with respect to the amendment he has offered that purports to affect Part D premiums and have higher premiums for those Part D Program participants. Let me just say, the basic concept, I am in sympathy with. The problem is, the budget resolution does not make these policy determinations. This is a determination which is made by the Finance Committee. That is the committee of jurisdiction. They are the ones who have the sole right to make these kinds of policy determinations. The Budget Committee, as much as I might want it to, does not have the authority to do that. Beyond that, the devil is in the details. The notion you can charge higher premiums--certainly there is a way to do that, but the Senator has given us no indication of how it might be done. When the CMS came before the Finance Committee on this very issue--because this is part of the President's budget--they were asked how they would go about charging higher premiums under Part D when the premiums are not set by the Government, they are set by private drug plans. As we all know, there are something like 1,500 Medicare drug plans. Those plans each have a separate premium they establish. So how is it that CMS is going to tell all these private drug plans they are to charge higher premiums to higher income people? Those private drug plans do not even know the income levels of the people who subscribe to their plans. So how is it, in a real-world situation, these plans would charge higher drug premiums? Again, the Government does not set these premiums. The companies that do set them do not have the information upon which to charge higher premiums to higher income people because they do not know what the income is of the people who subscribe to their plans. Further, premiums are important price signals for beneficiaries in the Medicare Part D Program. So would we be setting multiple premiums for a single Part D plan? Wouldn't that add to the complexity of the program? This seems to dramatically complicate the market-based approach of Part D. I might add, when the administration came before the Finance Committee--which is the committee of jurisdiction, which is the committee that has the authority to make these kinds of policy determinations--they had no answers to any of these questions. They just simply had not thought it through. That is one of the reasons why we leave these kinds of determinations to the committee of jurisdiction, because they have the expertise to make these determinations and to weigh the issue. The Budget Committee does not and does not have the authority to make these determinations. Let me say my own belief is that the notion of income-relating Medicare benefits is going to have to be part of a longer term solution. But that is not going to be decided on any budget resolution. That is just a fact. All of the things Senator Ensign talked about will have zero effect on the Finance Committee. What will affect the Finance Committee is the number they are given of the resources that are available for Medicare. The effect of the Cornyn amendment--and the effect of the Ensign amendment--will be to reduce the resources that are available to the Finance Committee for Medicare. What is that likely to mean? Well, it is very clear what it is likely to mean: reductions in reimbursement for hospitals, for nursing homes, for hospice care, for ambulance services. That is the real-world effect of the Cornyn amendment and the Ensign amendment. I want to repeat that I got a letter from 43 Senators--11 of them Republicans--urging that the budget resolution not cut reimbursement to hospitals. I just remind them, if that is something they are serious about, then they are going to want to oppose the Cornyn amendment and the Ensign amendment because the real upshot of those amendments is to reduce funding to the Finance Committee for those very purposes. Mr. President, Senator Gregg may like to take the remaining minutes here.

Mr. CONRAD. The Senator from North Dakota, Senator Dorgan, is now recognized until 11:30.

Mr. CONRAD. Mr. President, first, the budget resolution does not make these individual policy determinations. The effect of this amendment will simply be to cut domestic discretionary spending $18 billion. Understand the programs that have been identified in the PART program are results not proven. If this did apply as the Senator suggests, here are programs affected: Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, child abuse prevention, and treatment. If there is a problem in those programs, they ought to be fixed. We ought not to be cutting Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, and the rest. I urge a ``no'' vote.

Mr. CONRAD. Mr. President, I ask for the yeas and nays

Mr. CONRAD. Mr. President, did we move to reconsider?