Byron Dorgan

Mr. DORGAN

Mr. DORGAN. I will be happy to yield.

Mr. DORGAN. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. DORGAN. I know that is the case. I have seen the same survey to which the Senator referred. I think there are some provisions in this bill that have some merit. I prefer we do something rather than do nothing, but when we do something, let's do something right and something that benefits senior citizens. This is the case when you cite the polls, when you cite what our previous experience has been. It is a case, especially with respect to the use of this $6 billion, of the old joke from the movies: What are you going to believe, me or your own eyes? The fact is, we have already had these experiments. We understand how much additional costs are involved in the private sector delivery of this benefit, and we also know what Medicare does and how Medicare works. We know the private insurers have about a 14-percent overhead in administrative costs and delivering their service. We know that. We also know Medicare has about a 4-percent cost, a dramatic advantage. For that reason alone, you would want to provide this benefit through the traditional Medicare delivery system. Against all odds, we have people in this Chamber who, I guess, although they do not say it, believe along with Congressman Thomas that this bill ought to be the end of Medicare as we know it. Congressman Thomas said: Our answer to that is, we certainly hope so.

Mr. DORGAN. First, they do not need it, and no subsidy is warranted. The point of my amendment is to say if you have $12 billion, and they say let's take $6 billion and use it for an experiment that we know does not work, let's instead use that money to help seniors. Then the underlying amendment says let's take another $6 billion and test whether focusing on wellness will work, which we know it does work. We do not exactly have to have an experiment on that. Do things that promote wellness and the fact is you save money on the acute care side by not having people go into the hospital because they are taking care of themselves and have the kind of preventive care that is necessary to take care of themselves. I have another amendment pending. It has been pending for nearly a week. I hope it will be approved by the end of this process. It is a very inexpensive amendment that deals with that very kind of wellness approach. If senior citizens have heart disease, Medicare covers cholesterol screening. It makes sense, does it not? But Medicare does not cover cholesterol screening if one does not know they have heart disease. It does not make sense. Heart disease is our biggest killer in this country. We ought to cover cholesterol screening across the board. That is the way one can discover who is at risk for heart disease at a point when steps can be taken to prevent it. Yet Medicare does not cover that screening unless a person already has evidence of heart disease. There are many things we should do to improve Medicare's preventive coverage. My hope is that perhaps we will have that amendment approved before the end of this process. My colleague from Illinois talked about HMOs a moment ago. We are not in the trenches of the HMO debate as it was first envisioned by the White House, which said to senior citizens, here is a Faustian bargain: we will give you a prescription drug benefit but only if you enroll in an HMO. Talk about a goofy proposal; that is it. I have been talking about HMOs. There were some HMOs that did some good things, held down some prices. I understand that. But we have all also heard the stories of HMOs not taking good care of people. I guess we do not need to review the HMO stories about what happens to patients when profits were at stake. For instance, a woman falls off a cliff in the Shenandoah Mountains, sustains very serious head injuries and body injuries. She is hauled into an emergency room on a gurney in a coma. After a long convalescence, she finally gets out of the hospital only to be told by her HMO that they will not cover her emergency room treatment because she did not have prior approval to use the emergency room. This is a woman who is hauled in on a gurney in a coma. I will not revisit all of those HMO stories because it will take too much time, but I will say this: With Medicare, we know what works. Some of my colleagues make the case that it costs too much. Do my colleagues really know what costs too much in Medicare? It costs too much because people are living too long. What a wonderful set of victories we have in this country. With great health care, people are living longer. I probably should not talk about my uncle again, but I have an 81- year-old uncle who runs the 400 meter and 800 meter in the Senior Olympics. He is probably out running today. He runs 3 miles a day at 81 years old. Forty years ago, one reached 81 years old and they had to be in a chair someplace, but not any longer. People live longer, doing things no one ever expected them to do. And that includes my uncle. Good for them. Good for him. But because people live longer, Medicare costs more. That is not a sign of failure; it is a sign of success. Now we are trying to add to Medicare that which should have been added some long while ago: The miracle drugs that do provide miracles but only if one can afford them. We are talking about covering the drugs that keep seniors out of the hospital and they do not have to go into an acute care hospital bed. That is what we are dealing with. With this amendment, we are dealing with $12 billion. Instead of bifurcating it into two different experiments, one of which failed and one of which we do not need because we know the answer, what I propose we do is use that $12 billion to reduce from $43 to $38 the premium our senior citizens will have to pay for this prescription drug benefit, starting in 2009. There are people who live on $350 or $450 a month, their total income from their miserable little Social Security payment, who are living alone in a small town, are struggling to buy food, struggling to buy the necessities of life. There are people who have been told by their doctor: Oh, by the way, you have heart disease and diabetes, and here are the prescription drugs you need; and they sit at home knowing they do not have a penny to pay for those prescription medicines. Talk to those seniors and understand how important this coverage is. The coverage ought to be good and extensive coverage, and it ought to provide what we know we should provide for senior citizens. Second, it ought to be done in an affordable way. Unfortunately, another weakness of this plan is that there is no defined benefit, which means the premiums can vary. The monthly premiums will increase year after year because we have not done enough to put downward pressure on prescription drug prices--and as prescription drug prices increase, the monthly premium will increase. The expectation is that the monthly premium starts at $35 and goes to $60 in a 10-year period. My amendment proposes about a $6 reduction in the monthly premium for senior citizens. That is a more effective way to use this $12 billion. Either that, or I would propose we extend the coverage through the $1,300 gap that exists in coverage, which I think would also represent a meritorious way of using this amount of money. My colleague, Senator Pryor from Arkansas, is in the Chamber and he may wish to address this issue as well. I have offered this amendment on behalf of myself and my colleague Senator Pryor, so I yield the floor in the hope that Senator Pryor will wish to make some comments as well.

Mr. DORGAN

Mr. DORGAN. Mr. President, the importance of this amendment is answering the question, what to do with $12 billion. I propose we use that $12 billion to reduce the premium that senior citizens will be required to pay for this prescription drug benefit, roughly $7 a month, from $35 to $28. The rebuttal to my amendment has been: This really doesn't mean very much. Only in this Chamber would $12 billion not mean very much. Frankly, this means a great deal to senior citizens. The underlying amendment represents the worst of all worlds. It says, let's give $6 billion to insurance companies. And I guarantee, you dye that money purple, you will have purple pockets in the insurance industry. That is where it is going. Let's have $6 billion go to the insurance industry to conduct an experiment that we already know has failed. I don't understand why that is the way we want to use billions of dollars. Why not use it to help senior citizens close the coverage gap or, as I suggest, to reduce monthly premiums which start at $35 a month in this bill and then ratchet up and up and up as prescription drug prices increase. Pass my amendment and help senior citizens reduce these premiums.

Mr. DORGAN. Mr. President, parliamentary inquiry. Who is recognized to speak in opposition to the amendment?

Mr. DORGAN. Mr. President, parliamentary inquiry. My understanding was prior to a vote there was to be time divided between opponents and supporters. We have just heard from three supporters.

Mr. DORGAN. Evenly divided between whom?

Mr. DORGAN. Mr. President, there does need to be opposition, it seems to me, for those of us who believe this is not the right way to use $12 billion. The $12 billion was made available. Twelve billion is what we discovered. The CBO estimate was below the $400 billion available for this program. So the question was: How shall the $12 billion be used? We have spent all of our lives in this Chamber making choices. Too often we make the wrong choices in circumstances such as this. We come back with a plan that says let's use the $12 billion for two purposes, and both of them are for experiments. In both cases, we know the answer to the experiments. One, $6 billion to the insurance companies so we can incentivize--subsidize--the insurance companies to see if they can provide the prescription drug benefit at equivalent or less cost than Medicare does. We know the answer to that. That experiment has been done. Ask senior citizens all across this country what would you rather have, better benefits or lower costs or would you like to have $12 billion in demonstration projects? That is the choice. The choice has been presented to us at this point in this amendment to say let's bifurcate this into two $6 billion pots, both of which will be demonstration projects, the answer to which we know in both cases. First, the circumstance with subsidizing the insurance companies, we know the answer to that. They are going to provide this benefit at higher costs. We know that. Second, does wellness and chronic care help? Yes, we know that. Why do we not take the $12 billion and use it to provide better benefits or lower costs for senior citizens? After all, that is why we started this process, to provide a prescription drug benefit that works for senior citizens. We come to the end of this process, and we have a group of people who go into a closed room and come out with a deal that says we have decided how the $12 billion should be used. Ask senior citizens how they would like it used and I guarantee there is only one answer from every corner of this country: Use it to provide us benefits that were promised, deliver that which was promised to us.

Mr. DORGAN

Mr. DORGAN. Mr. President, over the last 2 weeks the Senate has debated the most significant changes to the Medicare Program since it was created in 1965. Today, we passed this legislation by a 76 to 21 vote, and I would like to take a few minutes to explain why I supported this bill. This bill will, for the first time, provide the option of modest prescription drug coverage for nearly 39 million Medicare beneficiaries, including about 103,000 beneficiaries in North Dakota. It is also intended to give Medicare beneficiaries more choices of health plans. And it takes significant steps towards equalizing the Medicare payments that rural health care providers receive, compared to their urban counterparts. There is no question that, if Medicare were being created today, it would include prescription drug coverage. Prescription medicines are a vital part of modern medicine. Last year alone, pharmaceutical companies introduced 26 new prescription medicines into the marketplace. But these advancements in medicine mean little if Americans cannot afford to access them. That is especially true for senior citizens who have reached their declining income years. For years now, Congress has been debating proposals to add a prescription drug benefit to Medicare. Unfortunately, however, in past years we have not been able to reach agreement on just how to do this. With each passing year, older Americans continue to struggle to pay for their medicine. In North Dakota, about 48,000 Medicare beneficiaries have no prescription drug coverage, and many more have limited drug coverage. I hear from North Dakota seniors regularly who tell me that they have to choose between taking the medicines their doctor prescribed for them and other necessities such as food and heat. These older North Dakotans say that they want and need Medicare drug coverage, and they want and need it now. If Congress doesn't enact legislation this year, chances are that several more years will go by before there is another serious opportunity to consider this issue. In other words, we could pass the legislation before the Senate today or we could do nothing for yet another year. In my judgment, doing nothing is not an option. The prescription drug benefit in this bill is not as helpful to seniors as I would like or as generous as I think Medicare beneficiaries deserve--but it is a start. Frankly, I think our budget priorities have been wrong. If I had my way, Congress would have reduced the size of the tax cuts for the very wealthy and instead set aside more money for improving and modernizing Medicare. During the Senate's debate earlier this year on the budget, I offered an amendment to set aside a total of $620 billion over the next 10 years for a Medicare prescription drug benefit. This is the amount of funding I felt was needed to provide a more generous and reliable benefit. Unfortunately, the majority in the Senate rejected my amendment, so we are limited to a package of just $400 billion over 10 years. When you consider that Medicare beneficiaries are projected to spend $1.8 trillion on prescription drugs over the next 10 years, it is impossible to develop a robust benefit within the $400 billion budget constraint, in my judgment. The benefit provided for in this legislation is better than that which President Bush proposed in several key respects. Most importantly, this bill will not force seniors to leave the traditional Medicare Program--and the doctors they depend on--in order to get the prescription drug coverage they also need. I could not support a bill that coerces seniors out of the traditional Medicare Program that virtually all of North Dakota's Medicare beneficiaries rely on. In addition, this bill provides extra assistance above the basic drug benefit for those older or disabled beneficiaries who have low incomes or very high drug expenses. Medicare beneficiaries with incomes below about $14,400 for individuals and $19,400 for couples--about 40 percent of North Dakota's beneficiaries--would qualify for extra assistance. And those with the highest drug costs--totaling more than about $5,800--would qualify for the catastrophic drug coverage. About 7 percent of North Dakota Medicare beneficiaries would reach this threshold. Despite these improvements over the President's proposal, there are other concerns that I worked to address during the Senate's debate. In some instances, we were able to make changes to address these concerns, and in other cases, those efforts were rejected. In those instances where concerns still exist, I intend to continue working to fix them in conference with the House of Representatives. For instance, as I have already mentioned, I am concerned that this coverage is not as generous as it should be, and in fact, there are some holes in the coverage. Under this benefit, seniors will have to reach a $275 deductible before their Medicare drug coverage starts. In addition, seniors whose drug expenses reach $4,500 will have to pay 100 percent of their drug costs between $4,501 and $5,800. Then, when their drug spending reaches $5,800, the catastrophic drug coverage will kick in and Medicare will pay 90 percent of their drug expenses after that. This means that there could be periods--in some cases as much as 3 months--when Medicare beneficiaries will have paid a premium for drug coverage but will be getting no benefit. That makes no sense to me. No other insurance plans that I am aware of include such gaps in coverage. I supported various amendments on the Senate floor to close these coverage gaps or at least ensure that seniors don't have to pay premiums for the periods when they aren't receiving coverage. Regrettably, however, those efforts were rejected. I am also concerned that rural Medicare beneficiaries may not receive a benefit that is as stable or as generous as other beneficiaries receive. This bill envisions that seniors will basically have two options for receiving drug coverage. First, this bill creates a new Medicare Advantage Program through which beneficiaries could choose to get their drug coverage, as well as the rest of their medical care, through an HMO or a PPO. Frankly, however, I am very skeptical that HMOs or PPOs will want to serve rural areas, and even if they do, I don't think most North Dakota beneficiaries will want to leave the traditional Medicare Program. Those seniors who want to remain in the traditional Medicare Program will be able to do so and get their prescription drug coverage through private ``drug only'' insurance plans. Budget experts estimate that Medicare beneficiaries who sign up for these drug-only plans will pay an average monthly premium of about $35. However, this is only an estimate, and the actual premium that seniors pay could vary substantially from area to area. That is already the case in the current Medicare HMO program--for instance, a Medicare HMO with drug coverage currently charges $99 per month in Connecticut and only $16 a month in Florida. I am worried that it would be rural seniors who would pay the highest premiums, even though they paid the same Medicare payroll taxes as other beneficiaries. To address this concern, I supported an amendment by Senator Daschle that would have limited the variation in premiums to only 10 percent above the national average, no matter where beneficiaries live. In other words, insurance companies could charge beneficiaries a lower premium but they couldn't charge them more than 10 percent above the national average. Unfortunately, however, Senator Daschle's amendment was rejected. In areas where there are not at least two private drug-only plans offered to Medicare beneficiaries in any given year, Medicare would step in and ensure that there is a ``fallback'' plan available. This is a vital guarantee for beneficiaries in rural States like North Dakota where I believe it is unlikely that there will be two stable drug-only plans available. But even with this fallback plan, seniors could still be bounced back and forth between different plans, depending on how private plans move in and out of an area. I supported an amendment that would have addressed this concern by allowing all Medicare beneficiaries to choose the fallback option, no matter how many private plans are available where they live. When that amendment failed, I cosponsored an amendment with Senator Conrad that would at least allow seniors who have the fallback option to remain in that plan for 2 years, not just 1 year. That amendment was also rejected. Even though this bill doesn't require Medicare beneficiaries to leave traditional Medicare, I know there are some concerns that Medicare beneficiaries will be getting their drug coverage through private plans. I, too, would strongly have preferred that all seniors be able to choose from a Medicare-administered benefit. However, let me say this if I felt that by structuring the drug coverage the way it is in this bill, we were undermining the entire underlying Medicare Program, I would not support it. Medicare has been a wonderful success, and in our efforts to modernize it, we should exercise extreme caution not to undermine it. However, virtually all of the major Medicare prescription drug proposals would have used a private entity in some way to provide the drug benefit. Indeed, the traditional Medicare Program currently contracts with private insurance companies to pay the millions of Medicare claims that come in each year. Furthermore, the Congressional Budget Office estimates that only 1 to 2 percent more beneficiaries will choose the new Medicare Advantage option, so it seems clear that the vast majority of seniors will continue to rely on the traditional Medicare Program for the bulk of their medical care. One area where we had some success in improving the bill during the Senate's debate is in the area of reducing drug costs. This bill relies largely on private insurance companies to negotiate lower drug prices. However, we have seen from prior experience that insurance companies have not been able to keep drug spending from increasing by nearly double digits every year 9.7 percent in 2002, 17 percent in 2001, 18.8 percent in 2000, and 16 percent in 1999. To help put downward pressure on drug prices, I offered an amendment that was passed by the Senate by a 62-to-28 vote to allow for the reimportation of lower-priced, FDA-approved medicines from Canada. As many North Dakotans know first hand, the same FDA-approved prescription drug that costs $1 in the United States costs only 62 cents in Canada, even though it is the exact same drug, in the same bottle, made by the same manufacturer. It is not my intention with this amendment to require Americans to go to Canada in order to get lower drug prices. Rather, by allowing U.S. licensed pharmacists and drug distributors to do the importing for them, Americans can stay at home, and by breaking the monopoly that the drug companies currently have on drug pricing in this country, we will force a repricing of drugs here in the United States. I also supported an amendment that will help to make more affordable generic drugs more readily available. Generic drugs are safe, effective, and lower priced alternatives to heavily advertised brand- name prescription drugs. Unfortunately, however, some of the big brand- name drug companies use loopholes in the patent laws to keep generic drugs off the market for longer than intended. This amendment, which passed the Senate by a 94-to-1 vote, will close these loopholes and thereby speed consumers' access to generic medicines. I am also pleased that this bill improves Medicare's coverage of preventive services, especially by including a provision that I authored to provide for a cholesterol screening benefit for Medicare beneficiaries. I have felt for a long time that Medicare needs to do a better job of preventing disease, rather than just paying to treat it. In the case of cholesterol screening in particular, high cholesterol is one of the major, changeable risk factors for heart attacks, stroke and other cardiovascular diseases. Yet when Americans turn 65 and enter the Medicare Program, their coverage for cholesterol screening stops unless they already have cardiovascular disease. That makes no sense, and I am glad the Senate has taken steps to provide this coverage. Finally, I am very happy that this bill includes a range of provisions that will make Medicare reimbursement more fair and equitable for our rural hospitals, physicians, and other health care providers. It is simply not right that Medicare has historically reimbursed urban health care providers at a much higher rate than their urban counterparts. This inequity in Medicare reimbursement has very real consequences for hospitals and clinics in rural States like ours. They have to reduce services, have greater difficulty recruiting staff, are less able to make capital improvements, struggle to give their patients access to the latest innovations in medical care, and in same instances, they even have to close. I have been fighting for a long time to correct this inequity. In fact, some of the provisions in this bill are similar to legislation that I introduced in the Senate earlier this year, and I am glad they have been included in this bill. I know there will be some who feel that this bill should have been rejected by the Senate because it relies too heavily on private plans and others because it does not place enough emphasis on enrolling seniors in private plans. Others will feel that the Medicare benefit is not generous enough, and some feel its coverage is too liberal. I agree that this legislation isn't perfect--far from it, in fact. In the coming months and years, I will continue working to improve it. But it is a start in the right direction, and that is why I have supported it. The House of Representatives is also expected to pass its version of Medicare legislation this week. The House and the Senate will now need to have a conference committee to work out the differences between the two bills. I have some serious concerns about the House-passed bill. I hope these concerns and the concerns that I have with the Senate bill can be resolved in the final bill, so that we can send a bill to the President for his signature this year.

Mr. DORGAN

Mr. DORGAN. Five minutes.

Mr. DORGAN. Madam President, we are about to vote at some point in the coming hour or two on a series of amendments, one of which will be the Durbin amendment, called the MediSAVE amendment. I wanted to make a couple of comments about that amendment. I regret there being a substantial difference between what is promised and what is delivered to senior citizens with respect to a prescription drug benefit in the Medicare Program. My colleague from New Mexico indicated this is not a perfect bill. It is not. It is not a terrible bill; that is certainly the case as well. It addresses an issue that almost every Senator says needs addressing, and that is adding a prescription drug benefit to the Medicare Program. But I confess, the more we have dealt with this, the clearer it is to me that we are creating the most complicated, byzantine system that we possibly could have created. We had opportunities, and will continue to have them, to improve this bill. We have missed most of them in the last few days. This is a horribly complicated proposal. The Durbin amendment is an amendment that provides substantially improved benefits, and I will describe all of them. These benefits are not in the underlying legislation. The average cost of prescription drugs for senior citizens in this country is about $2,300 a year. I might say that senior citizens are about 12 percent of America's population and they consume one-third of the prescription drugs, because we know when people reach retirement age, that status of life, many of them need prescription drugs in order to deal with their health issues. Miracle drugs provide no miracles for those who cannot afford to take them. So we understand when people reach their declining income years, we ought to put together a prescription drug plan, attach it to the Medicare Program, and give them the assurance that we did 40 years ago, that if they are sick, they can go to a hospital; they would have Medicare; and if they need prescription drugs now, give them the assurance that they will have that opportunity. We all have talked to senior citizens, particularly women, I might say, who live on fixed incomes, alone, at an advanced age, and have a very minimal amount of income, and who tell us: I cannot afford to take the prescription drugs the doctor says I must take. I have talked about the woman who came to me at a meeting one day and said, ``I have heart disease and diabetes.'' She must have been in her eighties. ``The doctor prescribes medicines and I have no opportunity to buy them because I cannot afford them.'' The fact is, we can do something about that. Now, my colleague, Senator Durbin from Illinois, offers an amendment that creates a more meaningful benefit to senior citizens, No. 1. If they spend $2,300 a year, on average, for prescription drugs, the underlying bill will give them the benefit of somewhere around $600. I will say that again. If they spend $2,300, we are going to say you have prescription drug coverage now. But the fact is, it only covers $600. My colleague's amendment will double that to $1,200. Second, it creates a defined benefit. Under the plan before us, the Grassley-Baucus plan, there is no guaranteed benefit for seniors. The premiums are left to the insurance companies. Well, figure out what you can do, describe what the premium is going to be, and tell us later, would you? That is no way for the Congress to define a prescription drug benefit. My colleague offers an amendment that has a defined benefit and that is exactly what our responsibility is, to define the benefit. The other issue my colleague addresses is reduced cost. I offered an amendment that did pass that talks about the reimportation from Canada of prescription drugs, offering consumers the same drug, made by the same company, put in the same bottle, at a lower price because we pay the highest prices for prescription drugs in the world. You can buy exactly the same drug in Canada for a substantial discount. My colleague says, with this prescription drug plan attached to the Medicare Program, what we ought to do is instruct Health and Human Services to negotiate the same group purchasing arrangements that we have done in the VA. We know how that works. We know what that saves. There isn't any reason it should not be in this legislation. My colleague's amendment maintains a choice. People still have the opportunity to go into a private plan someplace, but they can come back to this plan, which will be a Medicare attached plan with better benefits. So what my colleague from Illinois is offering is something that is much better, provides better benefits, provides defined benefits, provides downward pressure on prices, and it seems to me it represents what everybody in this Chamber has promised at one time or another but which none will deliver unless we start passing an amendment of this type. We have missed a lot of good opportunities in recent days to pass amendments that would have improved this bill. I guarantee you, if we don't make some improvements, by the year 2006, when this becomes available--it should have been 2004, but the last amendment was turned down--there will be a lot of disappointed people, because they expect prescription drug coverage. Instead, they are going to get a fraction of that. We can remedy that. The first step, it seems to me, is to vote for the Durbin amendment, the MediSAVE amendment. There are other amendments we can support as well which will make this the kind of prescription drug benefit in Medicare that senior citizens have been promised by virtually all of us. Let's not deliver much less than we have promised. We have all promised to do something about this because we understand the need and we understand the urgency. When you reach those declining income years of life and need prescription drugs, the miracle drugs to save your life and to maintain a decent life, we understand the need to provide the help to finance those drugs. Many seniors simply cannot do it. They go to the grocery store that has a pharmacy in the back, and they have to figure out the cost of their drugs before they decide how much food they can afford. We have all heard those stories time and again. The question is, are we going to do this? If the answer is yes, the question is, are we going to do it right? If the answer is yes, then it is voting for the Durbin amendment. I yield the floor.

Mr. DORGAN

Mr. DORGAN. Mr. President, I'm pleased to join Senator Brownback and a number of our colleagues today in re-introducing the Conservation Reserve Program Tax Fairness Act. This legislation is virtually identical to the bill we introduced in the 107th Congress, which garnered nearly twenty Senate cosponsors. It clarifies that Conservation Reserve Program, CRP, payments received by farmers are treated for Federal tax purposes as rental payments from real estate, not self-employment income subject to self-employment taxes. Despite past strong bipartisan support for this legislation, the Congress did not make this long overdue tax law clarification in the major tax reduction bill that was recently signed into law. This is regrettable and I hope that the Congress will move expeditiously to reverse the IRS's wrong-headed position on this matter. Let me take a moment to describe this problem. For many years, the IRS has been taking the erroneous position that CRP payments received by farmers are income from self-employment and therefore are subject to self-employment taxes. This position imposes a significant financial hardship on family farmers farmers who have voluntarily agreed to take environmentally-sensitive lands out of farm production and place them in the Conservation Reserve Program in return for an annual rental payment from the Commodity Credit Corporation of the U.S. Department of Agriculture. In our judgment, the IRS's tax treatment of CRP payments is not what Congress intended, nor is it supportable in law. The U.S. Tax Court shares our view that the IRS position is improper. In fact, the U.S. Tax Court ruled in 1998 that CRP payments are properly treated by farmers as rental payments and, thus, not subject to self-employment taxes. Unfortunately, the IRS challenged the Tax Court decision and the Tax Court was later reversed by a federal appellate court. Today, North Dakota has some 3.3 million acres with $110 million in rental payments in the CRP program. Left unchanged, the IRS's interpretation means that farmers in North Dakota will owe an additional $16 million in federal taxes this year. A typical North Dakota farmer with 160 acres in CRP would have a CRP payment of $5,280 and would owe nearly $800 in self-employment taxes because of the IRS's ill-advised position. If the IRS also decides to pursue back taxes on returns filed by farmers in past years, the amount of taxes owed by individuals farmers for CRP payments could amount to thousands of dollars. I believe that it is absolutely wrong for the IRS to load up farmers with an added tax burden, especially when most of our Nation's family farmers are still struggling from day to day to make ends meet. With the legislation we are introducing today, Congress can tell the IRS that its effort to treat CRP payments as net earnings from self- employment is inappropriate and will not be allowed to stand. Senator Brownback and I ask our colleagues to support this much- needed tax relief for family farmers by cosponsoring the Conservation Reserve Program Tax Fairness Act. And we hope you will work with us to get this legislation enacted into law at the first available opportunity.

Mr. DORGAN

Mr. DORGAN. Mr. President, I'm pleased to join Senator Brownback and a number of our colleagues today in re-introducing the Conservation Reserve Program Tax Fairness Act. This legislation is virtually identical to the bill we introduced in the 107th Congress, which garnered nearly twenty Senate cosponsors. It clarifies that Conservation Reserve Program, CRP, payments received by farmers are treated for Federal tax purposes as rental payments from real estate, not self-employment income subject to self-employment taxes. Despite past strong bipartisan support for this legislation, the Congress did not make this long overdue tax law clarification in the major tax reduction bill that was recently signed into law. This is regrettable and I hope that the Congress will move expeditiously to reverse the IRS's wrong-headed position on this matter. Let me take a moment to describe this problem. For many years, the IRS has been taking the erroneous position that CRP payments received by farmers are income from self-employment and therefore are subject to self-employment taxes. This position imposes a significant financial hardship on family farmers farmers who have voluntarily agreed to take environmentally-sensitive lands out of farm production and place them in the Conservation Reserve Program in return for an annual rental payment from the Commodity Credit Corporation of the U.S. Department of Agriculture. In our judgment, the IRS's tax treatment of CRP payments is not what Congress intended, nor is it supportable in law. The U.S. Tax Court shares our view that the IRS position is improper. In fact, the U.S. Tax Court ruled in 1998 that CRP payments are properly treated by farmers as rental payments and, thus, not subject to self-employment taxes. Unfortunately, the IRS challenged the Tax Court decision and the Tax Court was later reversed by a federal appellate court. Today, North Dakota has some 3.3 million acres with $110 million in rental payments in the CRP program. Left unchanged, the IRS's interpretation means that farmers in North Dakota will owe an additional $16 million in federal taxes this year. A typical North Dakota farmer with 160 acres in CRP would have a CRP payment of $5,280 and would owe nearly $800 in self-employment taxes because of the IRS's ill-advised position. If the IRS also decides to pursue back taxes on returns filed by farmers in past years, the amount of taxes owed by individuals farmers for CRP payments could amount to thousands of dollars. I believe that it is absolutely wrong for the IRS to load up farmers with an added tax burden, especially when most of our Nation's family farmers are still struggling from day to day to make ends meet. With the legislation we are introducing today, Congress can tell the IRS that its effort to treat CRP payments as net earnings from self- employment is inappropriate and will not be allowed to stand. Senator Brownback and I ask our colleagues to support this much- needed tax relief for family farmers by cosponsoring the Conservation Reserve Program Tax Fairness Act. And we hope you will work with us to get this legislation enacted into law at the first available opportunity.

Mr. DORGAN

Mr. DORGAN. Mr. President, this amendment deals with reimportation of prescription drugs. It is designed to try to put downward pressure on prescription drug prices in this country. It is not my intention or desire that Americans go elsewhere to acquire prescription drugs. But the fact is that U.S. consumers pay the highest prices in the world for prescription drugs. In North Dakota, for example, there is a pharmacy in the town of Pembina, and if you buy a prescription drug in that one- room pharmacy--

Mr. DORGAN. Mr. President, we have price controls on prescription drugs in this country. It is just that the prescription drug manufacturers control the price. My friends want to have a debate we are not having. The only access to prescription drugs we are talking about is from licensed pharmacies or distributors--accessing prescription drugs from a licensed pharmacist or distributor in Canada and that would be FDA-approved. We are not talking about counterfeit drugs.

Mr. DORGAN. Mr. President, 5 miles north of that North Dakota one- room drugstore, in Emerson, Canada, you will find, if you have breast cancer and have to buy Tamoxifen, that the drug that you pay $10 for in the U.S. can be purchased for $1 5 miles north. The question is, why should that happen? It should not happen. Let the market system deal with this. These are FDA-approved drugs. It is the same pill put in the same bottle by the same company. We ought to have fair pricing for Americans, and if not fair pricing here, then allow them to access those prescription drugs from a chain of custody in Canada that is safe. We are only talking about licensed pharmacists and distributors being able to access that FDA-approved drug from a licensed pharmacist or distributor in Canada. We have accepted the Cochran language. We don't think that injures this because, in the circumstance, we have changed the reimportation amendment to deal only with Canada, which has nearly an identical chain of supply and would therefore represent a safe drug supply for our pharmacists and distributors to access and to be able to pass the savings along to the American consumer. That is the purpose of this amendment. I reserve the remainder of my time.

Mr. DORGAN. Mr. President, to respond, we had 2 minutes equally divided and I think it is important, perhaps, to have the time truly equally divided. Let me respond by saying, if you think the U.S. consumer ought to pay the highest prices in the world for prescription drugs, then you ought to vote against my amendment. If you believe it is unfair that we pay the highest prices in the world for prescription drugs and we ought to have downward pressure on drug prices, vote for my amendment. Don't believe this nonsense about counterfeit drugs and transshipments. It is not the case. Let me describe why. Let me do it in just the circumstance of one transaction. A pharmacist from Grand Forks, ND, under this new law, would be able to go to Winnipeg, Canada, and buy FDA-approved prescription drugs only from a licensed pharmacist or a licensed distributor in Canada. The Congressional Research Service has researched both chains of supply and said they are almost identical in the United States and Canada. We do not hear questions about drug safety in Canada. Why? Because they have exactly the same system we have from the pharmaceutical manufacturer to the distributor to the pharmacist. The control chain of supply of the same pill put in the same bottle by the same manufacturer assures safety in Canada and safety in the United States. A licensed pharmacist in the United States can and should be able to acquire a lower priced supply of exactly the same drug in Canada and pass that savings along to the American consumer. Yes, in fact, it is the market at work. If my colleagues do not believe in the market and they believe our country ought to pay the highest prices in the world for prescription drugs, then vote against this. Just vote against this. I understand. But if my colleagues believe we ought to put downward pressure on prescription drugs and we ought to have a free trade agreement with Canada and they believe in markets and free trade, then they should support this amendment. I yield the floor.

Mr. DORGAN

Mr. DORGAN. I send an amendment to the desk on behalf of myself, Ms. Stabenow, Mr. Jeffords, Ms. Snowe, Mr. Johnson, Mr. Levin, Mrs. Boxer, Mr. Pryor, and Mr. Feingold. I ask for its immediate consideration.

Mr. DORGAN. I ask unanimous consent the reading of the amendment be dispensed with.

Mr. DORGAN. Mr. President, I was interested in the statement by the majority leader. This, of course, is not the amendment the Senate previously considered. It is not the amendment to which the Senate previously agreed. It is not the provision of law that the Secretary of Health and Human Services has refused to implement in two administrations. It is not that at all. First, we will sort out the facts. Let me make a case for the amendment itself. My colleague just won a debate we weren't having. His debate is about a piece of legislation the Senate passed a couple of years ago. I supported that, and I believe the Health and Human Services Secretary and the FDA made a mistake in not implementing it. Nonetheless, that was all a couple of years ago. Yes, this particular amendment we offered deals with the reimportation of prescription drugs, but it deals only with the reimportation of prescription drugs from the country of Canada--only from the country of Canada. The Senate previously addressed this issue of reimportation in 2000 by saying reimportation from other countries--as long as it was an FDA- approved drug and brought here under conditions of safety--would be appropriate. We have already said the HHS and FDA did not implement the previous legislation. But now, we will narrow this legislation very dramatically and provide reimportation only from the country of Canada. I will explain why that is important. First, miracle drugs offer no miracles to those who cannot afford them. If we don't do something to make drugs more affordable, seniors in the country lose, and others who need prescription drugs and can't afford them lose. We should and must put some downward pressure on drug prices. I understand the pharmaceutical manufacturers do not like that. I understand why they resist it. If I were in their position, I would certainly resist it as well. I don't try to paint with a dark brush all of those who are on the other side of the issue. I think the pharmaceutical industry does many good things. They do a lot of very important research, some of which is original and some of which they take from the National Institutes of Health. They create medicines that are very important for the American people. I also said the other day that some of the pharmaceutical companies have been providing free and discounted drugs to the lowest income Americans. Five and a half million people have benefitted from free medicines from American drug companies. I commend those companies. I don't have the names of all the companies. Good for them. It is a step in the right direction. They ought to be commended and saluted for their program to help the lowest income Americans. But the other issue is the larger one of the price of prescription drugs. The fact is, we need to try to do something that puts some downward pressure on prices. Let me describe, if I might, what the problem is. Let me do it with some bottles of medicine. I ask unanimous consent to be able to show some bottles of medicine on the Senate floor. These are empty bottles.

Mr. DORGAN. This is Zocor. A very famous football coach advertises this at halftime at football games. He says he takes Zocor. It is quite a good medicine, I am sure. These are two bottles for Zocor--one from the United States and one from Canada. The same pill is put in the same bottle, manufactured in the same place, by the same company. In both bottles is an FDA-approved drug. The only difference is, when that medicine is sold in the United States to U.S. consumers, it costs $3.03 per tablet. In Canada, the same pill, in the same bottle, made by the same company, cost $1.12 cents per tablet--$3 versus $1. The same pill, same company, different countries. That is Zocor. This is a drug called Lipitor. It has the same purpose as Zocor--to reduce cholesterol. You can see that it is sold in the United States and in Canada. These are bottles from each country. They are identical bottles, made by the same company, again only the cost is different--$1 per tablet for the Canadians, and $1.86 for the U.S. consumer. The same drug, same pill, manufactured in the same FDA-approved plant, put in the same bottle, but different prices. This is Vioxx used for arthritis. As you can see, same pill, made by the same company, put in identical bottles. The difference? It costs $2.20 if you buy it in the United States. If you are a Canadian customer, it costs 78 cents for the same tablet--$2.20 versus 78 cents for the same medicine. Let me use one more example, if I might. This is Prevacid: Those who are afflicted with ulcers would take this drug. As you can see, once again, the same bottle, identical shape. The difference? It costs $3.58 for the American consumer, and $1.26 for the Canadian consumer--same pill, same bottle, same company, but a different price. Let me tell you about being in a little one-room drugstore in Emerson, Canada, 5 miles north of the United States. Just 5 miles north of the Canadian border, there is a drugstore. I accompanied a group of seniors to the one-room drugstore in Emerson, Canada, just to make a point. The point was very simple. The medicines those seniors purchased in Canada--the identical medicines to what they buy in the United States and for which there is no safety concern or issue because the chain of custody is identical in Canada--cost much less. It begs the question. Why not let the market system resolve these issues? As long as you have the safety of supply and the closed chain of custody which you can be confident in--and you certainly do with Canada because their system is very comparable to ours--allow people to decide where they want to purchase their prescription drugs. If they decided they would purchase their prescription drugs where they are less expensive, it forces repricing of prescription drugs in this country. Let me use some charts to show what is happening. How much more does the U.S. consumer pay? More than everyone else in the world by far. If we pay $1 for a pharmaceutical product, that same product is 62 cents in Canada. You can see what it is around the globe in different countries--in England, 69 cents, Germany, 65 cents, France, 55 cents, and Italy, 52 cents. Let me show a chart with specific medications. I just showed these: U.S. price versus Canadian price for Prevacid, Zocor, Paxil--all heavily used drugs and costing nearly 40 percent more in the United States than in Canada. Now let me quote, if I might, President George W. Bush during the third Presidential debate in St. Louis, MO. During the Presidential debates, President Bush was asked about this. Here is what he said: Allowing the new bill that was passed in the Congress made sense to allow for, you know, drugs that were sold overseas to come back and other countries to come back into the United States. That makes sense. What he was saying there is that the reimportation of prescription drugs makes sense. That is what he said in the third Presidential debate. I am not making this up. These are the President's words from the debate--prescription drugs coming back into the country would make sense. If I could put words in his mouth, I would believe, of course, that he would say it makes sense, if this is safe. But, nonetheless, this President, in a debate, said reimportation makes sense.

Mr. DORGAN. I would be happy to yield.

Mr. DORGAN

Mr. DORGAN. Mr. President, I note that the managers are not on the Senate floor at this moment. I had visited with Senator Reid before the Democratic Policy Committee luncheon, and he indicated the floor would be open for an amendment. I have an amendment I wanted to offer. It deals with reimportation. I am ready to offer that. The amendment is written, and I have been told that they are looking for amendments. This is ready to go. If we are not able to offer it now, the question I ask is when are we able to offer it? Can we sequence it so I may have an understanding as to when I may offer it this afternoon? The issue of reimportation is one that relates to this legislation because it relates to the issue of the cost of prescription drugs. I will want to offer this on behalf of myself and Senators Stabenow, Jeffords, Snowe, Johnson, Levin, and Boxer. I don't want to tie up the Senate for any great length of time. I think this is important, and I would like to speak on it. I expect a number of colleagues would like to speak on this amendment as well. It makes sense to me to have it considered, and then I will make a presentation, and then it can be set aside so others can make presentations. I understand we have three additional amendments that are now pending and on which we will likely have a vote, perhaps midafternoon. I don't know exactly the whereabouts of the committee chairman or ranking member. They are not on the floor. I shall not ask for unanimous consent, but I would like to, as soon as they return, be able to query them so I can understand where I fit in this mix. As I indicated yesterday and today, I have continued to hear that they want amendments offered, and they want to move through these issues as quickly as possible. I am ready. Several of my colleagues would like to speak on this as well and are ready to do so. I will wait at this moment until the chairman and ranking member come back. I will make the inquiry of them as to when I might be sequenced. I would like to be recognized to offer this amendment this afternoon--the earlier the better. At the moment, I will relinquish the floor. I am tempted to ask unanimous consent, but I shall not in recognition that the chairman and ranking member will want to find some order. I will relinquish the floor with the expectation of being able to query them on the floor when they return.

Mr. DORGAN. Mr. President, will the Senator from Iowa yield for a question?