Phil Gramm

Mr. GRAMM

Mr. GRAMM. Mr. President, as usual, our colleague from Nevada is kind and courteous and helpful to everybody. I appreciate his letting me speak. I wanted to come over today to join my friend and colleague, Senator McCain from Arizona, to raise a concern about the provision in the Transportation appropriations bill that we believe will have the practical impact of making it impossible for a long period of time for us to conform to the agreement that we made with Mexico in NAFTA. Let me make it clear that the Senator from Washington, the distinguished chairman of the subcommittee, dramatically improved the work done by the House. Even those of us who believe that her amendment would be harmful and would abrogate our agreement with Mexico are convinced that her work is a dramatic improvement over that of the House. What we are trying to do is to simply work out an agreement where we can meet legitimate safety standards with regard to Mexican trucks, do it in a way that allows us to meet the obligations that we have under NAFTA, and do it in such a way to try to keep out any provisions that may be cloaked in some garb of safety, when in reality they represent an effort to prevent the implementation of our agreement. I understand Senator McCain has given the distinguished subcommittee chairman a copy of the amendment. I don't see any reason that this should be or has to be a partisan issue. I am hopeful we can work out an agreement. Let me explain why it is so important that such an agreement be reached and why I feel so strongly about it. We entered into the most far-reaching trade agreement of the last 20 years when we signed a free trade agreement that encompassed North America--Mexico, Canada, and the United States. Part of that free trade agreement had to do with the ability of trucks to operate within the free trade area. President Clinton was very slow in implementing the agreement, and many people believe that politics was behind that slowness in implementation. We are now on the verge of seeing the agreement implemented. We are hearing great protests about safety. In that debate, a lot of points have been made that, when you actually look at the facts, are not borne out by the facts. Let me give an example. First of all, the good news story with regard to Mexican trucks is that a significant amount of inspection is already occurring so that when we supplement that to deal with trucks that will come to the interior of the country, we have something on which to build. For example, there are 8 million U.S. registered trucks. Last year, there were 2.3 million inspections and so, therefore, about 29 percent of all American trucks were inspected. There are 63,000 Mexican trucks currently operating in the United States, and 46,000 inspections took place last year involving Mexican trucks. Therefore, roughly 73 percent of Mexican trucks were inspected last year, over twice the percentage of American trucks that were inspected. Some people have used the number, in sort of scare tactics, that only about 1 percent of Mexican trucks were inspected. In trying to figure out where on earth that number could have possibly come from, the best I can figure out is that the people who made up that number simply took the number of border crossings, 4.6 million, and used that as a measure of Mexican trucks. The plain truth is, Mexican trucks are now operating within a 20-mile limit, 20 miles from the border. They often cross the border many times during the day. That is the only place I can figure this number came from. Let me make it clear that Senator McCain and I are concerned about safety. First of all, both of us already have Mexican trucks operating in our States. Our States are working now to see that those trucks are safe. The commitment of the President to get the Federal Government involved in the process is welcomed from our point of view. We believe it is important that Mexican trucks be safe, that they have trained drivers, that they have good equipment, and that that equipment be well maintained. We are for safety. We are not for protectionism. We are not for using safety concerns as a ruse for not living up to the commitment that we made in NAFTA. In addition, we are concerned about a process whereby this provision, both the House provision and the Senate provision, is occurring on appropriations bills, not in the committees that have jurisdiction over this area. It is a very dangerous precedent when we are starting to amend trade agreements as riders to appropriations bills. Having said all that, Senator McCain and I and others have put together an amendment that we believe deals with legitimate safety concerns. We have put together an amendment where every truck coming into the United States from Mexico would be inspected. But it is not an amendment that will guarantee that for at least 2 years we will not be able to implement the trade agreement. Basically what we are trying to do is to implement a workable program where the level of safety required at the border, at least initially, with regard to Mexican trucks will be far greater than the requirements we currently have for Canadian trucks. Not every truck coming into the United States from Canada is inspected. We proposed that we have an inspection of every Mexican truck, that that inspected truck then be licensed with a decal, and that it be periodically inspected. I believe the Senator from Arizona has given us a workable way of dealing with legitimate safety concerns without effectively abrogating our trade agreement with Mexico. I know there are strong special interests that don't want to implement this agreement. But it is very important for us to remember in the Senate that all over the world today other legislative bodies are debating whether to live up to agreements they have made with the United States of America. Other legislative bodies are meeting at this very moment, trying to decide whether to implement an agreement they made with the United States that may not at that very moment, or this very moment, be politically popular in their country. It seems to me that since we are the world's biggest beneficiary of trade, we are the world's largest exporter and importer of goods and services by a huge margin, it is important we live up to the letter and the spirit of our trade agreements so that we can have moral standing in dealing with countries that do not live up to their agreements with us. So, in a time when all over the world similar agreements are being debated, it is very important in dealing with our neighbor to the south that we live up to the agreement we have made. I do not believe the House provision lives up to that agreement. I think there are very real problems with the current bill. I think Senator McCain has offered an amendment that provides safety but does not create problems that will delay implementation beyond legitimate requirements of safety. I hope this can be worked out. But the NAFTA agreement is an important agreement. It is vital to my State, vital to the country, and I cannot imagine, if we can't work this out, that we would want to move forward with this bill. So I urge my colleagues to look at the language that has been proposed. We are not saying this is the only way it has to be done or we are not going to be satisfied. We have simply raised some concerns with the current bill. I am hopeful in working together with the administration that we can reach a compromise. It will hardly serve anybody's purpose to pass a bill that the President will veto and we will have to start all over again. I thank the Chair.

Mr. GRAMM

Mr. GRAMM. I appreciate the Chair's indulgence. I yield the floor.

Mr. GRAMM. Mr. President, I wanted to come over and speak on this nomination for several reasons. One, OIRA is an office I know something about. My wife held this position during the Reagan administration. It is a very powerful position. It is the M in OMB. If there is one position in Government where we want someone who understands cost-benefit analysis and who is committed to rationality, it is at OIRA. As I have listened to Dr. Graham's critics, it strikes me that, first of all, there is a broad misunderstanding about what cost-benefit analysis is. Cost-benefit analysis is not the dollars of cost versus the dollars of benefits. Cost-benefit analysis is when you are a kid and you climb over this wall and your momma comes out and says, Phil, get off that wall; so you weigh, A, you are liable to get a beating if you do not do it; B, you might fall off and break your neck; or, C, Sally is next door and might see you on the wall and figure that you actually are cool. And you weigh that in a rational way and decide whether to get off the wall. That is cost-benefit analysis. In reality, what Dr. Graham's opponents object to is rationality. That is what they object to. If there is a garbage dump in the middle of the desert that no one has been close to in 50 years, they object to the fact that someone will stand up and say, ``We could probably do more for child safety by improving traffic safety, by buying helmets for people who ride bicycles than by going out in the desert and digging up this garbage dump.'' They object to that statement because it is rational. And they are not rational. They want to dig up that garbage dump not because it makes sense in a society with limited resources, not because it is a better use than sending kids from poor neighborhoods to Harvard University--a better use of money than that--but it is because it is their cause. Let me also say there is something very wrong with the idea that someone who takes the scientific approach is dangerous in terms of setting public policy. It seems to me that you can agree or disagree with the finding, but the fact that somebody tries to set out systematically what are the benefits of an action, and what are the costs of an action, and puts those before the public in a public policymaking context--how can society be the loser from that? It seems to me society must be the winner from that process. Let me make two final points. First of all, I take strong exception to this criticism, which I think is totally unfair, that Dr. Graham, in his center at Harvard University, is somehow tainted because corporate America is a supporter of that center--along with the EPA, the National Science Foundation, the Center for Disease Control, the Department of Agriculture, and numerous other sources of funding. Where do you think money comes from? Who do you think supports the great universities in America? Corporate America supports the great universities. I have to say, I think there is something unseemly about all these self-appointed public interest groups. I always tell people from my State: Anybody in Washington who claims to speak for the public interest, other than I, be suspicious. But these self-appointed public interest groups, where do they get their money from? They don't tell you. You don't know where their money comes from. Harvard University tells you, and they are corrupted. All of these self-appointed special interest groups don't tell you where their money comes from, and they are pure. How does that make any sense? Finally, let me just say I have heard a lot of good speeches in this Senate Chamber, and have heard many weak ones, and given some of them, but I congratulate our colleague, Senator Levin. Senator Levin is one of our smartest Members in the Senate. I have often heard him make very strong statements, but I have never heard him better than he was tonight. I think there has been no finer debate in this Senate Chamber, certainly in this Congress, than Carl Levin's statement tonight. It was a defense of rationality. That is what this debate is about. The opposition to Dr. John Graham of Harvard University is opposition to rationality in setting public policy, because there are many people who believe--I do not understand it, but they believe it--that there are some areas where rationality does not apply, that rationality should not apply in areas such as the environment and public safety. I say they should because the world operates on fixed principles and we need to understand it.

Mr. GRAMM

Mr. GRAMM. Mr. President, my grandmother used to say as long as anybody remembers you, you are not dead. We are proving today that my grandmother was right, as I suspect she was on so many things, that Paul Coverdell is not dead. In fact, as long as I live I am going to remember Paul Coverdell. Who could forget a person as thoroughly lovable as Paul Coverdell? It was my great honor to work under the leadership of Zell Miller and to work with Mike DeWine and Harry Reid in trying to come up with a way to properly honor Paul Coverdell. We put together a bill introduced by Senator Lott. I was proud to introduce it with him and Senator Miller. The bill had two major features: first, it named the headquarters of the Peace Corps in Washington after Paul Coverdell, who was proud throughout his life to have served as one of the great Directors of the Peace Corps; and, secondly, it created an authorization to fund the Paul Coverdell Building for Biomedical and Health Sciences at the University of Georgia. Senator Miller and I had the honor of going to the University of Georgia, meeting with the university president, the provost, and Nancy Coverdell, and going to the site to look at the plans, and we decided that there was no better way to honor Paul Coverdell than to build this great edifice and to name it after Paul Coverdell. It is not just a beautiful building, but a building that will be alive with bioscience research, and will contribute not just to Georgia but to America and to the world. I am proud to say that we adopted that bill in the Senate in February and yesterday it was adopted in the House. It will go to the President and be signed. The headquarters here in Washington of the Peace Corps will be named after Paul. We have authorized the building of this major research facility in Georgia. I would like to remind my colleagues who do not remember the debate on the original bill, that we are going to put up $10 million at the Federal level; the State is going to match that money; and the University of Georgia is going to provide the bulk of the funding. The State of Georgia has already acted in providing the money. The university is out raising their part of the money. When we come to the proper appropriations bill this year, we will complete our action in terms of providing this most significant honor. We added to the honors that Paul Coverdell's work bestowed on his life today when we named the education savings accounts that were part of our tax bill after Paul Coverdell. I still see evidence every day of Paul's good work. As many of you will remember, he was very active in forensic sciences and providing funding for the States. We authorized a bill which is now named after him, providing $512 million to get rid of this backlog we have all over the country with DNA evidence, to modernize our State labs, and to build a national DNA database. Senator Byrd named the classroom building at the Law Enforcement Training Center in Georgia after Paul. And Paul's work on teacher liability and volunteer liability is still very much debated in Congress, and I am convinced will eventually become the law of the land. So a year after Paul Coverdell's death, his stature continues to grow in the Senate. He is still fondly remembered by his colleagues. I do not think we will soon be forgetting Paul Coverdell. His gentleness reminds us all as to how we should behave. I feel blessed that I had the opportunity to get to know and to work with Paul Coverdell. Let me conclude by thanking Zell Miller for his leadership on these efforts to properly honor Paul. I think Paul would be proud of what we have done. I think the investments we have made in honoring him will yield a good return to the American people. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Mr. President, I rise in support of this amendment. I support the amendment for a lot of reasons. The most important reason I support it is that this is an amendment where a Member of the Senate has actually gone through a $2 trillion budget, a budget that spends $7,000 per man, woman, and child in America, and found $800 million that he believes is a lower priority than the things for which he would increase funding in the military. It never ceases to amaze me that in a government where we spend $2 trillion--that is with a ``t''--every year, over and over again, Members of the Senate stand up and offer amendments to increase spending on some favored program, and almost never, ever do they suggest that there is something in the Federal Government that is a lower priority than the thing they believe is a high enough priority to increase spending to fund. I think you can quarrel, though I do not quarrel, but you can quarrel with almost any one of the choices the Senator from Arizona has made. But you can't quarrel with the logic of the Senator from Arizona, which is that our job is setting priorities. He argues that operation and maintenance, housing, and improved capacity in the military, exceed in value the list of the $800 million worth of expenditures he would reduce or terminate in order to fund his amendment. I believe these kinds of amendments need to be encouraged. I am in support of the amendment and I intend to vote for it. Let me also say that it is hard for me to judge the statements being made about defense. I can't forget that many of the same people who are now saying that there is virtually no limit to what we could use in defense, either they or their predecessors, 2 or 3 years ago, were saying that everything was great in an administration that was dramatically reducing the real level of defense spending. I believe we do need a top-to-bottom review at the Pentagon. I agree with the Senator from Arizona that a good-faith effort--perhaps the best effort in 10 or 20 years--is being undertaken by the Secretary of Defense. That effort is not going to produce results that will be uniformly happy, and I would have to say that of all of the proposals that have been looked at--and I agree with all the people who, with unhappiness and bluster, say it was done the wrong way, we weren't notified, and there are 101 explanations for being opposed to cutting one program to fund another--but the bottom line is, we had an effort underway to undo the one proposal to reprogram that had been made by the Pentagon. I think, quite frankly, that sets a very bad precedent. So I believe we do need a comprehensive review. My dad was a sergeant in the Army. That is the extent of my knowledge about the military. I believe in a strong defense. I am proud of my record in supporting defense. I think I have a base of support for people who wear the uniform that is virtually second to none. But whether or not we need to be in a position to fight two major conflicts at once is something subject to question. I am a lot more concerned about modernization and recruitment and retention than I am about continuing to keep production lines alive. I think Eisenhower clearly was right when he warned us so long ago that even with our best intentions about defense, defense spending would be driven by political interests--something he called the ``industrial military complex.'' Let me sum up what I came over to say today. First of all, I commend the Senator from Arizona for being the first person in this Congress and the first person in a long time who really not only thought we ought to spend money on something we weren't spending it on, but who was willing to actually name things he was willing to take it away from. It is interesting that all over America every day families make these kinds of choices. The washing machine breaks down and so they have to make choices. Maybe they don't go on vacation. Or Johnny falls and breaks his arm and it has to be set and it costs money. They have to make choices, and they are hard choices. We never seem to make any of those choices. I am attracted to this amendment because it does make those choices, whether you agree with them or not. Secondly, I believe we need more money for defense, but I think it has to come in the context of a dramatic reform of defense spending. I think one of the worst things we can do is to simply have a dramatic increase in defense spending without going back and making fundamental decisions about where the money needs to be spent. So I am not unhappy with where we are in terms of a comprehensive review. Once we have a new plan, once we set new priorities, then I am willing to do what the Senator's amendment has done, which is to take money away from lower priority uses. But I do think it is important that we know what we want to do. So I commend our colleague for the amendment. I support it. I did want to go on record as saying that I am concerned that many of our colleagues are ready to stop the one effort the administration has made in terms of changing priorities. I think that sends a very bad signal. I think whether it affects individual States--and this is one that happens to negatively affect my State--I don't think we can take the position that every program change ought to be opposed if it affects our particular State. I think in the end you have to look at the big picture. I think we are all expected to work for the interests of our States, but, in the end, it is the interest of the common defense of the country that defense spending is about. I thank the Senator for yielding me time and for his amendment. I don't have any doubt that, looked at in the aggregate, the $800 million of programs--no matter how meritorious any one individual might be, the merits of those programs pale by comparison to the merits of the programs he has proposed to take the money from and use for the purposes of defense funding. That is what our appropriations process ought to be about. Unfortunately, it is not, and I think our Government is diminished as a result. I yield the floor.

Mr. GRAMM

Mr. GRAMM. I thank the Senator from Ohio. There is only one person in this Congress who has done anything to control spending thus far, and his name is George Voinovich of Ohio. He got 35 Members of the Senate to sign a letter urging the President to veto spending bills that were over budget, that threatened the viability of Social Security and Medicare, and threatened the surplus. I congratulate him on that. He has proposed a mechanism to be sure we do not spend the Social Security surplus. First of all, let me make it clear there is not a Medicare surplus. If ever there has been a fraud, this is it. It is true that one part of Medicare has a surplus of $29 billion. But it is also true that the other part of Medicare has a deficit of $73 billion, so Medicare in terms of taking general revenue, losing money, is running a deficit of $44 billion. Even the surplus in Part A is the product of a gimmick from the Clinton administration where we took the fastest growing part of Part A, home health care, and ``saved'' $174 billion by paying for it out of Part B rather than Part A. I am tempted to vote for the Senator from North Dakota's amendment because it makes it harder to spend money. I rejoice in that. But don't act as if there is a real surplus in Medicare and it is equivalent to the genuine surplus which exists in Social Security. There is an additional problem in that the Senator from Ohio has a sequester to enforce the protection of the Social Security surplus which does not exist under the amendment of the Senator from North Dakota. Let me outline what this is about. This is not about solvency of Medicare. It is not about solvency of Social Security. There are not real trust funds for either. Both of these programs have phony IOUs that the Federal Government prints, but it is a debt of the Federal Government to the Federal Government. It is like writing yourself an IOU and putting it in your left pocket and saying: I am richer by that amount. The problem is you have to take money out of the right pocket to pay for it. We are not using either one of these surpluses to provide for these programs in the future. If the money were being invested in the name of the people who are paying these taxes and those investments could be sold in the future to pay benefits, this would be a real debate about protecting Social Security and protecting Medicare. I am very interested in this debate because it is about protecting freedom. It is about stopping a runaway spending machine. In the last 6 months of the Clinton administration, we increased spending by $561 billion over the next 10 years, in a 6-month period. There has never been anything comparable to that in American history. There is still a mentality in this Senate that we can afford to do everything anybody wants to do. In fact, in the supplemental appropriations bill before the Senate, we have half a dozen amendments that simply add more spending for little pork barrel projects and for great big programs, for important items such as defense, for unimportant items such as somebody's pet project. But the point is, we are still spending money as if it is water. I am for both these amendments because they both make it harder to spend money. I would have to say that the distinguished chairman of the Budget Committee has a power that no other Member of the Senate has because under the budget resolution he unilaterally controls $423.8 billion worth of reserve funds, and simply by saying ``no,'' that money cannot be spent. No one is in a better position than the distinguished chairman of the Budget Committee to deal with the crisis that he has talked about. When Senator Domenici was chairman, we had a surplus. We were not spending any of the so-called surplus in Medicare. We were not spending a penny of the Social Security surplus. We had general surplus in the rest of the budget. Now that the Senator from North Dakota has taken control and apparently things have almost spontaneously gone to hell, it seems to me he has a lot of explaining to do. I look forward to hearing it. But the bottom line is, we have a proposal before us that sets up a process to make it much harder to spend the Social Security surplus. Then, if we spend it, it has an enforcement mechanism through a sequester. Every Member of the Senate that means it when they say anything about Social Security ought to vote for the amendment of the distinguished Senator from Ohio. In my opinion, the case for the amendment of the Senator from North Dakota is a much weaker case. There is not a Medicare surplus. There is a surplus in one part of it, there is a deficit in the other, and we created the surplus by taking the fastest growing part out of it during the Clinton administration and putting it into Part B. So the whole thing is kind of a fabrication. On the other hand, if we actually did not allow this surplus to be--quote--spent, it would be harder to spend money. But there is another paradox, and that is you could not even spend it for Medicare. So whatever you do on the amendment of the Senator from North Dakota, I urge you to support the amendment of the Senator from Ohio.

Mr. GRAMM

Mr. GRAMM. Listening to all this screaming and hollering, obviously somebody has been stuck by this amendment. What does this amendment do? The bill before us, under the best set of circumstances, is going to cost 1.2 million people in America their health insurance by driving up the cost of health care. And one of the primary factors driving up that cost is litigation. What the Senator from Pennsylvania has proposed is to take the part of these massive settlements that has nothing to do with compensating the person who has been injured--it has to do with punishing reckless and irresponsible behavior--and using that to help buy health insurance for the very people who will lose their health insurance as a result of all of these lawsuits. Are we concerned about people without health insurance or are we concerned about plaintiffs' lawyers? It seems to me I hear more screaming about plaintiffs' lawyers than I do health insurance.

Mr. GRAMM

Mr. GRAMM. Mr. President, under the previous unanimous consent agreement, I believe I had 10 minutes to offer an amendment with Senator McCain, but he is not here. I am waiting for him to come back. So I would just like to suggest that perhaps we could modify the unanimous consent agreement so that when he does come back, whoever is speaking at that point, whenever they are finished, we would be recognized to do the amendment. But there is no reason we cannot conduct other business while we are sitting here.

Mr. GRAMM. I am offering this with Senator McCain. I think he wants to be here as well. It is my understanding he is on his way. Let me just suggest we let Senator Nickles speak, if he would like to speak. We could all learn something from listening to him. And then, when he is finished, hopefully Senator McCain will be back, and we will do this long-awaited amendment.

Mr. GRAMM. Mr. President, first of all, this problem has not been fixed. The amendment we will adopt is window dressing and has no impact on this problem. What the Senator has proposed is a solution to an assault on the best health care plans in America. The biggest companies with self-insured plans that employees love will be destroyed by this bill. All the Senator is saying is that if Wal-Mart employees love their plan, and they want to keep it and agree to not require Wal-Mart to be liable to be sued, and if Wal-Mart gives them the option of going into a fully-insured plan with liability so that they do not have to be in the Wal-Mart self-insured plan, they can choose to remain in it, and Wal-Mart will not be forced by liability costs to cancel their plan. This is an important issue that addresses a very real shortcoming in this bill. The incredible paradox is that this bill will do the most damage to the best health care plans in America--plans that are self- insured, that are large, and that provide terrific coverage. Under this bill, there is no question about the fact that the employer will be held liable. That liability fear will end up forcing them out of these plans. The Senator has offered us a third way. The third way is if every employee is offered an alternative where there is liability available, then those who choose to stay in their health plan and say, I love my Wal-Mart plan and I don't want to sue Wal-Mart, would have a right to do it. That is what the Senator's amendment does. All of the rest of these arguments have nothing to do with the amendment. Do you want to destroy the best health care systems in America? If you do, you want to vote against the Enzi amendment. If you do not, vote for the Enzi amendment which guarantees that a Wal-Mart employee will have an option of another health care plan where everybody is liable. But if they choose a better plan with fewer lawsuits, aren't they better off by definition by choosing? The Senator from North Carolina says if you do not get lawsuits, you ought not to be happy. Maybe not everybody agrees with the Senator from North Carolina. I yield the floor.

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

Mr. GRAMM. Mr. President, I have sent an amendment to the desk. The amendment has been read. Let me explain to my colleagues what the amendment does, why it is important, and then I will thank our distinguished colleague from Arizona. Under the bill that is now before us, under the language of the current bill on page 35, the bill says that contracts are binding. But then it makes those contracts binding unless they are subject to a judgment of medical facts and they are subject to medical review. This creates an extraordinary ambiguity and, for all practical purposes, makes the contract not binding. That creates a situation where every health insurance company in America will realize that these outside medical reviewers, based on medical necessity, could invalidate every health insurance contract in America and, as a result, put everybody under the high option plan whether they pay for it or not. The net result would be an explosion in health care costs. In fact, if this provision is not fixed, it is at least as explosive in potential cost as the liability section, which we have talked about 10 times as much. The amendment I have offered makes the contract binding, and it provides language that says the contract is binding as long as the contract does not violate the language of the bill. Let me explain very briefly what that means. If, as we do under the bill, we say that if you provide emergency room coverage, you have to have a prudent layperson standard for that emergency room coverage, so you have to do that if you provide the coverage no matter what this amendment says; or if we say under the bill that if the plan has pediatric care for children, that can be the primary physician, then it would have to be the law that would govern. Within that very limited proviso, this amendment makes the contract binding. I think it is a dramatic improvement in the bill. I thank our distinguished colleague and my old and dear friend from Arizona for helping me work this provision out. It is something I have worried about. I do think it improves the bill, and it certainly would not have happened without the reasonableness of our dear colleague from Arizona. I thank him for that. I yield the floor.

Mr. GRAMM. Mr. President, I seek only to do good, not to have it recorded through a recorded vote. So I ask unanimous consent that the amendment be accepted.

Mr. GRAMM

Mr. GRAMM. Mr. President, I want to make two points. One has to do with a colloquy that was underway when I had to leave to introduce someone in committee about moving to the Defense supplemental appropriations and an effort to tie limitation of amendments on this bill to that effort. I also want to address the underlying amendment. It never ceases to amaze me that when we debate these issues, we talk all around the issue, but we never get to the heart of the issue and why it is important. We have 1,001 examples of terrible things that happen to good people, but we never talk about what is the issue. Let me make it clear that I am going to vote for the pending amendment. I think there is a better way of fixing this problem than the way they fix it. I am working on what might hopefully be a compromise to fix the problem, but I want to be absolutely certain that it is clear to anyone who has any intent to be objective that there is a big time problem with the bill on this issue. Let me clearly define the problem. The question is: For example, I have entered into a contract on behalf of my family with standard option Blue Cross/Blue Shield. I could have bought the high option, but I looked at cost and benefits. I made what I thought was a rational judgment, and I decided not to pay more to get the extra coverage. I made a decision, and it involved cost and benefits. Every day in America, people enter into contracts to buy health care. Obviously, a big question in the bill before us is: Are those contracts binding? Are they binding on the purchaser of the health care? Are they binding on the seller? As is usual with this bill, on page 35, gosh, it sure looks like they are binding. On page 35, line 14, it says in a bold headline: ``No Coverage For Excluded Benefits.'' Then you read on. It says: Nothing in this subsection shall be construed to permit an independent medical reviewer to require that a group health plan, or a health insurance issuer offering health insurance coverage, provide coverage for items or services for which benefits are specifically excluded. . . . Gosh, it seems in this bill they are saying contracts are binding, but when you read on, as is true over and over in this bill, you find that exactly the opposite is true. When you read on, it says: . . . except to the extent that the application or interpretation of the exclusion or limitation involves a determination described in paragraph (2). Then you go back two pages to find paragraph (2) and you find that paragraph (2) has to do with anything that is medically reviewable and anything that has to do with necessity or appropriateness. Let me explain what this language says. This is a classic bait and switch. The language says that if something is precluded in a contract, it is not covered, except if it is medically reviewable--and all medical decisions are medically reviewable--and unless it has to do with ``necessity and appropriateness.'' What this provision actually says is the contract is not binding. The medical reviewer can determine that someone needs care, and even if it is precluded by the contract, the plan is required to provide it. Gosh, that may sound wonderful to some people. Let's take the standard option Blue Cross/Blue Shield policy. I have a limit of 60 days in the hospital. Let's say I have the misfortune or someone in my family does that they are in for 90 days. The plan says you are not covered. I go before a reviewer and say: Look, I want the medical reviewers to determine as to whether I need this care or not. They determine I need it, they override the contract, and so I paid for the standard option Blue Shield policy, but I got the high option. Is that great and wonderful? What do you think is going to happen when it is time for me to renew that insurance policy? What is going to happen is then I am going to have to pay for the high option. That is not going to be such a big deal for me because I can afford to pay the high option, but what about millions of Americans who cannot pay the high option? If we let these external review committees decide what people need, independent of the contract they entered into to provide care--I got a lower price by saying I did not want heart and lung transplant services in my policy, and yet I come down with an acute heart problem and my physician stands up in front of this board and says, I am going to die if I do not get this surgery. Then the review committee says it is medically necessary and under this bill it is covered, even though my plan I paid for did not include it. The net result of this is to cause health insurance costs to skyrocket. Also, if I am a health care provider as an employer and I have joined my employees in buying health insurance, now the contract is not binding, so the health insurance company obviously is going to want to change the amount they charge us because they are not going to have the protections of their contract. I do not think the way we are doing this is the right way to do it. I think there is a cleaner way to do it. I hope to do it better later if this succeeds or fails, but this brings us to a fundamental question of this bill, and that is, Are contracts binding? What we are saying in this bill is, no, not if they relate to health care. I think that is very dangerous. This is another reason, if we don't fix it, the explosive cost of this provision unfixed is greater than the liability cost about which we spent most of our time talking. I hope my colleagues vote for this amendment. Now the final point. Senator Byrd and Senator Stevens were talking about the necessity of passing a supplemental for national defense. I am for this defense supplemental. I want it to come forward. I don't see why we can't do it tonight and get it over with, provide the money for national security. I know there will be one controversial amendment. I intend to vote against it; maybe some will vote for it. However, there is no reason that tonight we cannot settle this issue and vote first thing in the morning. Several of the people who spoke on the issue suggested we will not be allowed to go to that defense supplemental bill unless we have set out a limit on amendments to this patients' bill of rights. I urge the majority leadership to not commingle this bill with the defense supplemental. It may well be that in the end we will reach compromises on the 6 to 10 major issues on which we will have to reach some accommodation to see the bill go forward. I am encouraged by the willingness of Senator McCain to sit down and talk. I hope it is the beginning of a recognition that this bill is not perfect and it can be improved. This morning when we voted down an amendment that exempted small employers with 50 or fewer employees from this massive liability burden that they can be sued for simply helping their employees buy health insurance, I took that as a very bad sign for this bill. I have to congratulate the majority. Oh, that I could be in an army that had that kind of discipline. I can't imagine there is a city in America where Members could defend the provisions of this bill, which basically say that if you are covered by ERISA, you are subject to being sued as an employer for helping people buy health insurance. There was an amendment that said just exempt the little employers because they will almost certainly have to cancel their health insurance if they are subject to lawsuit. I don't believe there is a city in America that any Member of the Senate could go into and successfully defend a vote against that provision. Yet that provision was defeated. I am afraid we are moving in the wrong direction in terms of building a consensus. I want to see this bill completed. I don't think anybody benefits from holding this bill up. There are going to have to be certain accommodations. If we don't deal with some of these issues, the President will end up vetoing the bill, and what have we achieved? unless your objective is simply a political issue so one can say, well, we were for this bill, the President was against it, Republicans were against it. If we really want to pass this bill, we are going to have to deal with the sanctity of contracts, we are going to have to come to grips with suing employers and the liability question, we are going to have to come to grips with scope. If States have good functioning plans, should they be able to stay under their own plan or should they be forced under the Federal plan? There are a handful of issues that could be counted on your 10 fingers on which we will have to come to some accommodation. My concern is, the clock is running. Today is Wednesday. Unless we begin to reach an accommodation on these issues, we are headed for a train wreck at the end of the week, and it is because of that I urge those in positions of leadership to please not try to tie stampeding Members on this bill, by limiting their rights to offer amendments, to passing a defense supplemental appropriation that I assume we are all for. Why not pass this bill? I would be willing to pass it on a voice vote so it could be done tonight, get it over with, and then focus our attention on this bill. I hope we don't have an effort to tie limiting our rights on this bill to even bringing up the defense supplemental. If that happens, the net result will be the defense supplemental will not be brought up. No one will benefit from that. It is not good public policy. I urge the two not be tied together. I yield the floor.

Mr. GRAMM. Mr. President, I congratulate Senator Allard. Yesterday we had an amendment on exempting employers from being sued. That amendment was important. This amendment is important, as well. Our basic point yesterday was, when an employer, because they care about their employees and because they want to attract and hold good employees, puts up their own money to help people buy health insurance, we should not reward that voluntary activity by making them liable to being dragged into court and sued. The bill before the Senate is a classic bait and switch bill, make no doubt. It says you cannot sue employers, and then it says you can sue employers, and it has 7\1/2\ pages of conditions under which employers can be sued, including conditions where they exercise control, which is a little trick phrase because ERISA, the program that governs employer benefits to employees, guarantees that the employers are always deemed to be in control. So the bill before the Senate is written to guarantee every employer in America can be sued. If anybody doesn't understand that, it is because they don't want to understand it. This amendment does not fix the problem. This amendment simply makes a plea that if you are going to force companies such as Wal-Mart to cancel their insurance--at least they have smart lawyers and they have lots of money and can figure out a way to get around this provision by changing their plans. Some of them won't. They will cancel their health insurance. And the proponents of this bill will be back a year from now, 2 years from now, saying, well, the number of uninsured has gone up and we need to have the Government take over and run the health care system. This amendment is simply a last gasp effort to introduce some reason into this bill which says while clearly this bill is aimed at allowing employers to be sued, and clearly large employers are going to be hit with this liability and they are going to be forced either to drop their plan or change it, they have some ability to make a change. It is not smart. It is counterproductive. It is hurtful to America. But that is the way it is. That is the majority position. The point is, this amendment says, if the company has 50 or fewer employees. We are talking about small business; we are not talking about companies that can go out and hire a legion of lawyers; we are not talking about companies that have the ability to junk their health care plan and to figure out a clever way to try to get around the devastating provisions in this bill. If you vote against this amendment, you are saying to every small business in America, we don't care if you are sued; we don't care if you provide health insurance. It is unimaginable we would not adopt this amendment and say that while we are willing in the name of bringing lawsuits to the doorstep of every employer in America, we are not willing to destroy the ability of small business to provide health insurance, and therefore we are going to adopt this amendment. This does not fix the problem. This is an amendment that should bring out some degree of shame as to what we are willing to do. I urge my colleagues to vote for this amendment. I yield the floor.

Mr. GRAMM

Mr. GRAMM. Madam President, I make a point of order that the Senate is not in order. Senator Edwards deserves to be heard.

Mr. GRAMM. Madam President, throughout this debate, those who are in favor of this bill have said our bill is just like the Texas bill. Look at Texas. No employers have been sued, and there have been a minimum number of lawsuits. Yet when you look at this bill, it says employers can't be sued. Then it says they can be sued. And it has 7\1/2\ pages of ifs, ands and buts. Are employers connected with the decision? Do they exercise control? ERISA says that in any employee benefit the employer is deemed to exercise control, which would mean that every employer in America is covered. The Texas legislature did not assume that every employer was perfect. They were worried about unintended consequences. They also concluded that no employer can be the final decisionmaker because this bill, as in our bill, has an external review process that is run by independent physicians that are selected independently of the plan. They make the final decision, not an employer. The Texas legislature decided what we should decide here; that is, if you get into ifs, ands, and buts, what is going to happen all over America is businesses are going to drop their insurance. If we should pass the bill without this amendment in it, it is easy to envision that we could have a small business where the business owner calls in his employees and says, Look, we worked hard to provide good health benefits, but my father and my mother worked to build their business. I have worked. My wife has worked. We have invested our whole future in this business, and I cannot continue to provide benefits when I might be sued. Think about the unintended consequences. That is what the Texas legislature did. They concluded that employers should not be liable. They cannot make the final decision under this bill. They cannot make the final decision under Texas law because it is made by an external group of physicians. But when you make it possible to sue them, they are going to drop their health insurance, and you are going to have fancy reviews and stiff penalties, but people aren't going to have health insurance. I urge my colleagues to look at Texas. If you want to take all the claims of the benefits of Texas, do it the way they did it. They thought you created unintended consequences by letting employers be sued. They knew that employers could not make the final decision because they had external review, just as this bill and every other bill has. By doing an employer carve-out, they guaranteed that every small and large business in the State would know they cannot be sued.

Mr. GRAMM. Let me review very quickly where we are. Our colleagues who support the pending bill say that the bill does not allow employers to be sued. If you look at the language of their bill, it clearly says it on line 7 on page 144, ``Causes of action against employers and plan sponsors precluded.'' Then it says: Subject to subparagraph (B), paragraph (1)(A) does not authorize a cause of action against an employer. . . . That has been pointed to over and over again to say that employers cannot be sued. The problem is that on line 15, the bill goes on and says: Certain causes of action permitted.--Notwithstanding subparagraph (A), a cause of action may arise against an employer or other plan sponsor. . . . Then the bill goes on for 7\1/2\ pages of ifs, ands, and buts about when employers can be sued. They can be sued if they have ``a connection with;'' they can be sued if they ``exercise control,'' which is very interesting because under ERISA, which is the Federal statute that governs employee benefits provided by the employer, every employer is deemed to exercise control over every employee benefit. The bottom line is, despite all the arguments to the contrary, in the bill before us, employers can be sued. The Texas Legislature faced exactly this same dilemma, and they concluded that they wanted an absolute carve-out of employers. Why? Not that they believed employers were perfect; not that they believed every employer was responsible, but because they couldn't figure out a way to get at potential employer misbehavior without creating massive loopholes which would produce a situation where employers, large and small, could be dragged into a courtroom and sued because they cared enough about their employees to help them buy health insurance. The Texas Legislature decided you ought not be able to sue an employer. Senator McCain read a letter from the Texas Medical Association president, but he did not read the one paragraph in the letter that I was going to read. It is a very important paragraph. Let me explain why. Opponents of this amendment say: You ought to be able to sue employers if employers are making medical decisions. The point is, this bill--and the Texas law and every Patients' Bill of Rights proposal made by Democrats and Republicans--has an external appeal process that a panel of physicians and specialists, totally independent of the health care plan and totally independent of the employer, that will exercise the final decisionmaking authority. How could an employer call up this professional panel, independent of the health insurance company or the HMO, and in any way intervene? They couldn't. The line from the letter from the Texas Medical Association addresses exactly this point. It points out that the State couldn't reach into ERISA. But another reason that it wasn't necessary or advisable to try to sue employers was, from the letter: Additionally, we believed that utilization review-- And this is the review process-- agents were making the decisions regarding appropriate medical treatment for employees of these self-funded plans. We contended that these state-licensed utilization review agents would be subject to the managed care accountability statute-- Which is the Texas law. The same would be true under this bill. Under this bill, no employer can make a final decision. The final decision is made by this independent medical review. So what is this all about? It all boils down to the following facts: If we leave this provision in the bill, which says employers can be sued and has 7\1/2\ pages of ifs, ands, and buts about suing them, and then interestingly enough says you can't sue doctors, you can't sue hospitals, but you can sue employers in its conclusion, then what is going to happen is all over America businesses are going to call in their employees. The example I used yesterday, and I will close with it today--am I out of time?

Mr. GRAMM. Madam President, nothing in this amendment has anything to do with HMOs. Nothing in the amendment that I have offered would in any way exempt any HMO from any liability. Both Senator Kennedy and Senator McCain talked about HMO liability. Senator McCain talked about HMOs standing in the shoes of doctors. This amendment I have offered is not about HMOs. Senator Kennedy talks about HMOs escaping liability by blaming it on the employer. Nothing in the amendment I have offered in any way would allow that to happen. The amendment I have offered has to do with employers. Why is this an issue? It is an issue because, in America, employers are not required to provide health insurance. Employers, large and small, all over America provide health insurance because they care about their employees and because they want to attract and hold good employees. But every employer in America has the right under Federal law to drop their health insurance. I am concerned, and many are concerned, that employers would be forced to drop their health insurance given the liability provisions in the bill. I have here a number of letters from business organizations endorsing my amendment. I send to the desk and ask unanimous consent that these letters be printed in the Record: an NFIB letter designating this a small business vote; a letter from Advancing Business Technology representing the AEA; the National Association of Manufacturers; the National Council of Chain Restaurants; the National Restaurant Association; and the National Association of Wholesalers and Distributors, all letters endorsing the Gramm amendment; and finally, a wonderful letter from the Printing Industry of America talking about the dilemma they would face if this amendment did not pass.

Mr. GRAMM. Let me wrap up by saying, all over America, small businesses are going to call in their employees and say: I want to provide these benefits, but I cannot put my business at risk, which my father, my mother, my family have invested their hearts and souls in; therefore, I am going to have to cancel your health insurance. I urge my colleagues to vote for this amendment. I yield the floor.

Mr. GRAMM. Mr. President, I ask unanimous consent that following the vote on the Grassley amendment, each side have a total of 3 minutes to summarize the arguments on the amendment excluding employers from liability.

Mr. GRAMM. Madam President, could you tell me how much time the two sides have?

Mr. GRAMM. Madam President, I would like my amendment to close out the debate. Does Senator Grassley have time?

Mr. GRAMM. Let me just allow the majority to go ahead.

Mr. GRAMM. The Senator from Iowa has spoken. I assume if we add up the time, I have 7 minutes. I would like to take it.