Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I had a chance to listen to my good friend, the Senator from Illinois; his remarks about why the bill before the Senate is going to reduce costs and pay down on the national debt. Now, that is the Senator from Illinois. I am the Senator from Iowa. But I would like to not refer to my judgment about this bill right now. What I would like to refer to is the judgment outlined in a report that was issued today from the Chief Actuary of the Centers for Medicare & Medicaid Services in the Department of Health and Human Services, a professional person who calls it like it is. That is his responsibility. Remember, I am quoting from a report that was just given today about this 2,074-page bill we have before us, and that my friend from Illinois was just speaking very favorably about. So I am going to talk about somebody in the executive branch of government, under the President of the United States, who says this about this reform bill-- that it will cost more than the status quo. The Chief Actuary of the Centers for Medicare & Medicaid Services issued a report on Senator Reid's bill which shows that health care costs would go up, not down, under his bill. The Chief Actuary warned that the Democrats' health care bill would increase health care costs, threaten access to care for seniors, and force people off their current coverage. In other words, the administration's own Chief Actuary conclusively demonstrates that the Democrats' rhetoric does not match the reality of the bill. The cost curve would bend up, not down. National health expenditures would increase from 16 percent of GDP to 20.9 percent under the Reid bill. The Chief Actuary concluded that the Federal Government and the country would spend $234 billion more under the bill than without it. The Chief Actuary also says that the bill ``jeopardizes access to care for beneficiaries'' because of the bill's severe cuts in Medicare. Quoting the Chief Actuary: Providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and . . . might end their participation in the program (possibly jeopardizing access to care for beneficiaries). Then it speaks about the savings in the bill being unrealistic. The Actuary says that many of the Medicare cuts ``are unrelated to the providers' costs of furnishing services to beneficiaries.'' It is therefore ``doubtful'' that providers could reduce costs to keep up with the cuts. Then the Chief Actuary speaks about new taxes costing consumers $11 billion per year. The new taxes in the Reid bill would increase drug and device prices and health insurance premiums for consumers. The Actuary estimates this would increase costs on consumers by $11 billion per year, beginning in 2011--that is 3 years before most benefits kick in. Then the Actuary speaks about health care shortages, that these health care shortages are ``plausible and even probable,'' particularly for Medicare and Medicare beneficiaries. Because of the increased demand for health care, the Actuary says that access-to-care problems-- again these words ``plausible'' and even ``probable'' under the Reid bill. The access problems will be the worst for seniors on Medicare and low-income people on Medicaid. The Actuary says ``providers might tend to accept more patients who have private insurance with relatively attractive payment rates and fewer Medicare and Medicaid patients, exacerbating existing access problems for the latter group.'' Premiums for the government-run plan would actually be higher than under private plans. Agreeing with the Congressional Budget Office, the Chief Actuary said that because the government plan would not encourage higher value health care and it would attract sicker people, premiums for the government-run plan would be 4 percent higher than for the private insurers. Then there is a point about employers dropping coverage. The Chief Actuary concluded that 17 million people will lose their employer- sponsored coverage. Many smaller employers would be ``inclined to terminate their existing coverage'' so their workers could qualify for ``heavily subsidized coverage'' through the exchange. Then it speaks, lastly, about the long-term health care part of this bill called the CLASS Act. The CLASS Act stands for Community Living Assistance Services and Support, C-L-A-S-S. The Chief Actuary has determined that the CLASS Act long-term care insurance program faces ``a significant risk of failure'' because the high costs will attract sicker people and lead to low participation. Even though premiums would be $240 a month, the policy would result in ``a net Federal cost in the long term.'' I think quoting the Chief Actuary is a very good way to bring attention to the shortcomings that, on this side of the aisle, we have tried to discuss about the 2,074-page bill. Members on this side of the aisle have shown that the Reid bill will bend the health spending curve the wrong way over the next year and that the Reid bill cuts Medicare by $\1/2\ trillion and jeopardizes seniors' access to care. So, again, quoting from the Health and Human Services Chief Actuary's analysis confirms the dangerous consequences of the 2,074-page Reid bill. I would like to highlight some of the findings in a more encompassing way than I just did, quoting the Chief Actuary. First, contrary to what Members on the other side of the aisle claim, the Chief Actuary's report confirms that the Reid bill bends the cost curve the wrong way. According to the HHS Chief Actuary, over the next 10 years--and this chart highlights it--``total national health expenditures under this bill would increase by an estimated total of $234 billion.'' And a good portion of the increase in national health expenditures would be caused by the so-called fees in this bill on medical devices and on prescription drugs and on health insurance premiums. Here we have a chart where the Chief Actuary found that ``. . . fees would . . . be passed through to health consumers in the form of higher drug and device prices and higher insurance premiums . . .'' This would result in ``. . . an associated increase of approximately $11 billion per year in overall national health expenditures.'' This refutes claims from the other side that the so-called fees won't be passed on to consumers. And this analysis clearly refutes claims from the other side that the Reid bill saves money. Next, the Chief Actuary also confirms that the Reid bill jeopardizes beneficiary access to care. The Chief Actuary tallied up around $493 billion in net Medicare cuts, and he raised concerns in particular about two categories of these Medicare cuts. First, the report warns about the permanent productivity adjustments to annual payment updates. These productivity adjustments ``automatically cut annual Medicare payment updates based on productivity measures for the entire economy,'' not just for that section of health care part of the economy. The Chief Actuary confirms that these permanent cuts would threaten access to care. Referring to these cuts, he wrote that ``. . . the estimated savings . . . may be unrealistic'' and ``. . . possibly jeopardizing access to care for beneficiaries.'' ``It is doubtful that many could improve their own productivity to the end achieved by the economy at large.'' This is a direct quote from the Chief Actuary's report. He goes on to say, ``We are not aware of any empirical evidence demonstrating the medical community's ability to achieve productivity improvements equal to those of the overall economy.'' In other words, basically he is saying this: If you are going to make a judgment that you are going to cut health care costs and that productivity has to be measured by the entire economy, you can't take the entire economy and apply it to a small segment of the economy-- health care--and expect it to be fair and expect that small segment of the economy to be as productive and equal the productivity of the entire U.S. economy. You have to listen to these people who are professionals in these areas. The Chief Actuary is a professional. In fact, the Chief Actuary's conclusion is that it would be difficult for providers to even remain profitable over time, as Medicare payments fail to keep up with the cost of caring for beneficiaries. Referring to this chart, ultimately, here is the Chief Actuary's conclusion: that providers who rely on Medicare might end their participation in Medicare, ``. . . possibly jeopardizing access to care for beneficiaries.'' That is right out of the Chief Actuary's report, is where that quote comes from. He even has numbers to back up these statements. His office ran simulations of the effect of these drastic and permanent cuts. Here we have the quote. Based on the simulations, the Chief Actuary found that during the first 10 years, ``. . . 20 percent of Medicare Part A providers would become unprofitable . . . as a result of productivity adjustments. This is going to be horrible on rural America where we already have difficult times recruiting doctors and keeping our hospitals open. As I said, it is difficult to keep up with these productivity adjustments by our providers. It is for this reason that the Actuary found that ``reductions in payment updates . . . based on economy-wide productivity gains, are unlikely to be sustainable on a permanent annual basis.'' That is right out of the report of the Actuary. The second category of Medicare cuts the Chief Actuary raises concerns about would be imposed by the new independent Medicare advisory board created in this 2,074-page bill. This new body of unelected officials would have broad authority to make even further cuts in Medicare. These additional cuts in Medicare would be driven by arbitrary cost growth targets based on a blend of general economic growth and medical inflation. This board would have the authority to impose further automatic Medicare cuts, even absent any congressional action. The Chief Actuary gives a reality check to this proposal. He shows how tall an order the Reid bill's target for health care cost growth actually is. Again quoting the Actuary: Limiting cost growth to a level below medical price inflation would represent an exceedingly difficult challenge. He points out in this analysis that Medicare cost growth was below this target in only 4 of the last 25 years. Just think--what this 2,074-page bill is trying to accomplish is something that has been accomplished in only 4 out of the last 25 years. The Actuary also points out that the backroom deals that carved out certain types of providers would complicate this board's effort to cut Medicare. So, to this analysis: The necessary savings would have to be achieved primarily through changes affecting physician services, Medicare Advantage payments, and Part D. So providers, such as hospitals, will escape from this board's cut at the expense of doctors, Medicare Advantage plans, and higher premiums imposed on beneficiaries for their Medicare drug coverage, Part D of Medicare. If we survey the Nation's seniors, I doubt very much they would say that raising their premiums for Medicare drug coverage is what they would call health care reform. This board, which can cut reimbursements, is guaranteed to have to impose these additional Medicare cuts. In other words, they can do it. According to the Chief Actuary's analysis of the Medicare cuts in the Reid bill, even though the Medicare cuts already in the Reid bill are ``quite substantial,'' they would--the savings ``would not be sufficient to meet the growth rate targets.'' This means the board will be required by law to impose even more Medicare cuts, in addition to the massive Medicare cuts already in the bill. This bill imposes a $2\1/2\ trillion tab on Americans. It kills jobs with taxes and fees that go into effect 4 years before the reforms kick in. It kills jobs with an employer mandate. It imposes $\1/2\ trillion in higher taxes on premiums, on medical devices, on prescription drugs and more. It jeopardizes access to care with massive Medicare cuts. It imposes higher costs. It raises premiums. It bends the growth curve the wrong way; in other words, up instead of down. This is not what people have in mind when they think about health care reform. There is another aspect to this bill that I wish to go over. I hope the third time is the charm. I hope this time the other side of the aisle will understand that the Reid bill increases taxes on middle- income families, individuals, and single parents. That is because contrary to the claims made by the other side of the aisle, the Reid bill clearly raises taxes on middle-income Americans. We have data, not from this Senator, but as I quoted previously the expertise of the Chief Actuary, I want to quote the expertise now of the Joint Committee on Taxation, professionals who are blind to politics, who judge things and call them like they see them. Yesterday I pointed out how the same Joint Committee on Taxation data led my Democratic friends to proclaim that the Reid bill provided a net tax cut to all Americans. We have this distribution chart I used previously to show that that net really is not net. There is no question that the bill does provide a tax benefit to a group of Americans, a relatively small group. A much larger group, however, will see their taxes go up. Most, if not all in this group, will not benefit from the government subsidy for health insurance. That is part of this 2,074-page bill. As a result, the generous subsidy that is in that bill that is going to a small group of Americans cannot be used by this larger group to offset their increased tax liabilities. The other side, however, wants to spread the large tax benefit that is going to this small group of Americans to everybody; in other words, all Americans, even among those Americans who are not eligible to receive the subsidy, and then somehow claim that all Americans are receiving a tax cut. How can a person receive a tax cut if they are not receiving some type of tax benefit? Yes, the data shows that some will receive a benefit, but the data also shows that the others will see a tax increase. I have highlighted in yellow these various figures, individuals and families who will see a tax increase. In general, these individuals and families are not receiving the subsidy for health insurance. This means they have no government benefit to offset their new tax liability. The most important point I want to make--for the third time--is that these tax increases fall on individuals making more than $50,000 and families making more than $75,000. Again, I highlighted this group on the Joint Committee on Taxation chart. The Joint Committee distributed in this chart three separate tax provisions: the high-cost plan tax, the medical expense deduction limitation, and the Medicare payroll tax. Among these tax provisions, the high-cost plan tax seems to be garnering the most attention and also tremendous opposition. I don't have to explain who the opponents of this tax increase are. Everybody knows. In fact, yesterday I had representatives of the Iowa Education Association, the teachers of Iowa, saying they are against that high plan tax because it is going to hurt Iowa teachers. So if this provision, the high-cost plan tax, were to drop out of the Reid bill for one reason or another--and this bill is still being written in secret or at least changes in this 2,074-page bill are being written in secret so who knows what is going to happen to this highly controversial thing--if it is taken out, some Members may feel they have successfully shielded the middle class from a tax increase. Unfortunately, for those Members who may be hopeful of this, lesser known tax provisions that are likely to stay in the changes that come through the Democratic health care reform product would still raise taxes on the middle class. Again, don't take my word for it. The Joint Committee on Taxation tells us so. Specifically, that committee sent a letter to Senator Crapo stating that tax provisions such as the cap on flexible savings accounts, the elimination of tax reimbursements for over-the-counter medicines and, most importantly, the individual mandate excise tax penalty will increase taxes on people making less than $250,000. That happens to be middle-class individual, middle-class families, and middle-class single parents. I ask unanimous consent to have printed in the Record that letter.

Mr. GRASSLEY. In closing, let me turn to one more chart the Joint Tax Committee has provided. This chart shows the effect on the medical expense deduction limitation. This tax increase is just one of the many tax increases likely to stay in the new Democratic proposal. On this chart, which is for the year 2019, because that is when this bill is fully implemented, we see positive dollar figures. I have highlighted these dollar figures in yellow. For those who may not be able to see, I will reiterate that this chart only has positive dollar figures on it. But remember, as I explained yesterday, when we see positive dollar figures from the Joint Committee on Taxation, that committee is telling us that taxes for these people are going to go up. That means for all of the tax returns listed on this chart, taxes will be going up for each. And this tax increase, the medical expense deduction limitation, reaches as low as someone making $10,000 a year. Maybe some of these low-income individuals and families who will see a tax increase under this provision will receive a subsidy for health insurance. These people may be able to offset this new tax liability. But you can bet your bottom dollar that a large portion of the middle- income individuals and families are not receiving a subsidy. This means that this tax liability highlighted in yellow cannot be offset by the government benefit. My Democratic friends cannot escape that fact. Even if my friends drop some of the tax provisions in the current Reid bill, many tax provisions will most likely remain. And those tax provisions will increase taxes on middle-class Americans. This not only breaks President Obama's pledge, but it will arbitrarily burden middle-class Americans for years to come. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, my friends on the other side of the aisle have consistently stated that this 2074-page Reid bill, according to the Joint Committee on Taxation, is a net tax cut. I want to put emphasis throughout my remarks on the word ``net.'' Yesterday a chart was used to illustrate this point. This chart had multiple bars with dollar figures. For example, in 2019 the chart showed a $40.8 billion net tax cut. My Democratic friends said this number came from the Joint Committee on Taxation, a very responsible, intellectually honest group. Unfortunately, the chart my friends were using was not entirely clear on how they came up with this net tax cut for Americans. So it was natural for most of the fellow Senators and the country at large to wonder how my Democratic friends got this number. They said show me the data. To clear up any confusion, right here is the Joint Committee on Taxation table that the Democrats relied on to claim that the Reid bill results in a net tax cut. Here it is. We can see the negative $40,786, for example. That is the figure that was used. As the chart indicates, these dollar amounts are in the millions, so $40,786 million. The Joint Committee on Taxation says it this way: This means negative--the negative mark there--negative $40.8 billion. My friends on the other side unfortunately did not explain what was going on here. It appears my friends simply made an assertion that they hoped many of us and those in the media would believe. But I cannot let my Democratic friends get off the hook this easily. Why? Because the entire story is not being told, so let me take a moment to explain. First, in simplest terms, where you see negative numbers on this chart, the Joint Committee on Taxation is telling us there is some type of tax benefit going to the taxpayers. So this group and these groups here, wherever there is a negative here, those are tax benefits to the benefit of the taxpayers. For example, families making $50,000 to $75,000 have a negative of $10,489 in their column. This means the Joint Committee on Taxation is telling us that this income category is receiving $10.4 billion in tax benefits. I hope you will listen closely. When we see a negative number on this chart, the Joint Committee on Taxation tells us there is a tax benefit so, conversely, where we see a positive number the Joint Committee on Taxation is telling us that these taxpayers are seeing a tax increase. I have actually enlarged those numbers, the number of tax returns and the dollar amounts where there is a positive number for individuals and families. Again, these positive numbers indicate tax increase. My friends have said that all tax returns in this chart are receiving a net tax cut. If that were so, why aren't there negative numbers next to all of the dollar amounts listed? Because not everyone in this chart is receiving a tax cut, despite what my friends have said. Quite to the contrary, a group of taxpayers is clearly seeing a tax increase and this group of taxpayers in middle income is seeing tax increases. I didn't come down to the floor to say my friends on the other side of the aisle are wrong. After all, you can see here the negative $40,786 million figure they used is right there, out in the open. What I am doing is clarifying that my Democratic friends cannot spread this $40.8 billion tax cut across all the affected taxpayers on this chart, and then say that all have received a tax cut. You want to know why. Because this chart, produced by the nonpartisan Joint Committee on Taxation, shows that taxes go up for those making more than $50,000 and families making more than $75,000. It is right here in the yellow, as you can see. The numbers obviously do not lie. I say the nonpartisan Joint Committee on Taxation, I think everybody agrees, is very intellectually honest. So let me give you my read on what the Joint Committee on Taxation is saying here as evidenced by the figures on the chart. First, there is a group of low- and middle-income taxpayers who clearly benefits under the 2074-page bill that is before the Senate. They benefit from the government subsidy of health insurance. This group, however, is relatively small. There is another much larger group of middle-income taxpayers who are seeing their taxes go up due to one or a combination of the following tax increases: the high-cost plan tax increase, which actually is a brandnew tax; the medical expense deduction limitation, which used to be 7.5 percent, and now before you can deduct you have to have 10 percent of your income be medical expenses or you don't deduct anything, so that is a tax increase; and then a Medicare payroll tax increase, where everybody is going to pay--well, everybody over a certain income is going to pay an additional half a percentage point or, if you are self-employed, pay 1 percent more of payroll tax. In general, this group is not benefiting from the government subsidy. After all, how can a taxpayer see a tax cut if they are not even eligible for the subsidy? Also, there is an additional group of taxpayers who would be affected by other tax increase provisions in the Reid bill that the Joint Committee on Taxation could not distribute in the way people are distributed on this chart. These undistributed tax increases include, among others, the cap on Federal savings--flexible savings accounts. Then there is a tax on cosmetic surgery. My friend from Idaho, the author of the amendment before us, Mr. Crapo, recently received a letter from the Joint Committee on Taxation stating that this additional group exists and many in this group will make less than $250,000 and, hence, have a tax increase that is not accounted for here and also a tax increase if they are under $250,000. That is a violation of the President's promise in the last campaign that nobody under that figure would get a tax increase--only people over $250,000. So you see, my Democratic friends cannot, No. 1, say that all taxpayers receive a tax cut--I have proven that here--and, No. 2, say that middle-income Americans will not see a tax increase under the Reid bill. I yield the floor.

Mr. GRASSLEY. I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY. Mr. President, I have said, for the last 2 days, I was going to speak on the Dorgan amendment, a bipartisan amendment to allow the importation of drugs into the United States. I haven't done it until now, so I am glad to rise in support of this bipartisan amendment to add provisions of the Pharmaceutical Market Access and Drug Safety Act to this bill. That legislation is the result of a collaborative effort by Senators Dorgan, Snowe, McCain, and this Senator to finally make drug importation legal. I have, for a long time, been a proponent of drug reimportation. In 2000, 2002, and 2003, I supported an amendment permitting the importation of prescription drugs into the United States from one country, Canada. This amendment is much broader than only Canada. In 2004, the late Senator Kennedy and I worked together on a bill that would authorize drug importation, but it did not survive the partisan politics of this Chamber. I then introduced my own comprehensive drug importation bill in 2004. That was S. 2307, the Reliable Entry for Medicines at Everyday Discounts Through the Importation with Effective Safeguards Act. The REMEDIES Act is what the acronym finally spells out. In 2005, I combined my bill with a proposal sponsored by Senators Dorgan and Snowe. In 2007, we reintroduced a version of that legislation with the hope that our combined efforts would finally lower the cost of prescription drugs for all Americans. That is what we are still working together to do this very day. I thank Senator Dorgan for his leadership. This time around, I should be confident that this effort will finally pass. Historically, Democrats claim to be champions of holding the big pharmaceutical companies accountable. Now we have a Democratic supermajority in the Congress and a Democratic President who has supported drug importation in the past. I am not as confident as maybe I should be. That is because the White House has participated in some back-room negotiations since the last time this legislation was brought before the Senate and then Senator Obama supported it. Behind closed doors, the Democratic White House found new friends in the pharmaceutical industry. Last summer, the head of the pharmaceutical lobbying group bragged that drug manufacturers had negotiated a ``rock- solid deal''--those are their words--with the present administration. An article in the New York Times detailed the administration's deal with big drug companies. This quote comes from the New York Times: Foreseeing new profits from the expansion of health coverage, big drug companies are spending as much as $150 million on advertisements to support the President's plan. But in 2008, when President Obama was campaigning for the position he now holds, he promised that: We'll take on drug and insurance companies, hold them responsible for the prices they charge and the harm they cause. Certainly, the President knows that a great way to hold drug companies accountable is to allow drug importation. In fact, in 2004, when he was a candidate to be a Member of this Chamber, he challenged his opponents to support drug importation. He said at that time: I urge [my opponent] to stop siding with the drug manufacturers and put aside his opposition to the re- importation of lower-priced prescription drugs. . . . But, unfortunately, it has been reported that during backroom negotiations at the White House, the big pharmaceutical companies have convinced the President to drop his strong support for drug importation. The New York Times reports that: On July 7-- Meaning this year-- Rham Emanuel, [President] Obama's chief of staff . . . assured at least five pharmaceutical companies during a White House meeting that there would be no provision in the final health care package to allow the reimportation of cheaper drugs. . . . I thought we were going to hold drug companies accountable. I thought health care reform was supposed to drive down the cost of health care, including the cost of prescription drugs for all Americans. The Dorgan amendment is a commonsense, bipartisan approach to achieve both of these goals. Drug importation achieves these goals without imposing arbitrary fees, and without flexing the muscles of the Federal Government. I have always considered this a free trade issue. I know most people see it as a health issue, and it is a health issue. But I come at it from the point of view that there are only a couple items Americans cannot buy in this country from anyplace else in the world they want to buy it. One class is pharmaceutical drugs, the other class is Cuban----

Mr. GRASSLEY. Mr. President, I ask unanimous consent for 4 additional minutes and that it come off the next block of time from our side.

Mr. GRASSLEY. So I see this as a free-trade issue. Imports create competition and keep domestic industry more responsive to consumers. In the United States, we import everything consumers want. So I ask again, why not pharmaceuticals? That is why it is a trade issue for me as much as a health issue. Consumers in the United States pay far more for prescription drugs than those in other countries. If Americans could legally and safely access prescription drugs outside the United States, then drug companies would be forced to reevaluate their pricing strategies. They would no longer be able to gouge American consumers by making them pay more than their fair share for research and development. It is true that pharmaceutical companies do not like the idea of opening up America to the global marketplace. They want to keep the United States closed to other markets in order to charge higher prices here. Based on the reports I just read, it seems that the White House has already sided with the drug manufacturers and promised them the ability to continue to gouge American consumers, otherwise known as the status quo. The debate is not over. With the Dorgan amendment, prescription drug companies will be forced to be competitive and establish fair prices in America. The drug companies will try to find loopholes in order to protect their bottom line. The Dorgan amendment would make such action illegal. It would not allow manufacturers to discriminate against registered exporters or importers. It would prohibit drug companies from engaging in any actions to restrict, prohibit, or delay the importation of a qualifying drug. The Dorgan amendment would give the Federal Trade Commission the authority to prevent this kind of abuse. It develops an effective and safe system that gives Americans access to lower prices. Our effort goes to great lengths to ensure the safety of imported drugs. The Dorgan amendment requires that all imported drugs be approved by the FDA. It puts in place a stringent set of safety requirements that must be met before Americans can import drugs from that country. The amendment requires all exporting pharmacies and importing wholesalers to be registered with the FDA and inspected. It gives the authority for the FDA to inspect the entire distribution chain for imported drugs. It sets very stringent penalties for violations of the safety requirements in this bill, including criminal penalties and up to 10 years imprisonment. We need to make sure Americans have even greater, more affordable access to innovative drugs by further opening the doors to competition in the global pharmaceutical industry. If my colleagues on both sides of the aisle are serious about bending down the cost curve of health care inflation--and doing it in that direction, the right direction--then they will support the Dorgan amendment, a bipartisan amendment. I yield the floor.

Mr. GRASSLEY

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

Mr. GRASSLEY. Madam President, I know we have moved to the Omnibus appropriations bill to continue government, and the time is running out for the current authorization bill, and this brings us back to the authorization of spending, but it also takes us away from health care reform. On this side of the aisle, we have been waiting for a long period of time to vote on some amendments that are now before the Senate, such as the Crapo motion which would send the bill back to committee to take out the tax increases that are in it. Then we also have the Dorgan amendment. I can understand why maybe the majority does not want to vote on Republican amendments, but I sure don't understand why they would object to voting on Senator Dorgan's amendment, a Democratic amendment, because there have always been more Democrats than Republicans for the Dorgan amendment, and quite frankly, I am in a position where I agree with that amendment. I am a cosponsor of it. I think we would have a great deal of bipartisan support for the Dorgan amendment. But now we are just automatically away from the health care debate and those amendments. So I am wondering why we had to do this appropriations bill right now. I think there is growing realization that maybe public reaction, negative reaction to the legislation before us--remember that 2,074- page bill that is before us--the public is getting wise to what is in that bill and there is objection to it, and maybe now the majority party would like to have a little respite from that debate. So I thought I would come back to not the substance of the health care reform bill debate but to a lot of organizations that oppose it and why they oppose it, just to keep the public's attention that we on this side of the aisle feel the health care issue is very important. As I travel around Iowa, I hear a lot of concern about out-of-control government spending. People are worried about all of the bailouts, the banks, and the automakers, the automakers such as General Motors being nationalized. They are worried about the rising rate of unemployment, which is 10 percent now. They don't see how we will ever dig ourselves out of the deficit hole we are in, a deficit that has been increased by $1.3 trillion since President Obama's inauguration. As Senator McCain just pointed out, the bill that has now come before the Senate to fully fund the Federal Government has 12.5-percent increases in it. From that standpoint, it seems to me we are getting away from a commonsense principle that we ought to use around here on spending, and that is that spending shouldn't eat up any more than the economic growth of the tax base that is coming into the Federal Treasury to support that spending. Quite obviously, you can't have 12.5 percent increases in appropriations this year over last year, and last year was 9 percent over the previous year. You just can't sustain that. Common sense dictates against it. But what rules here in Washington is just a lot of nonsense. So our constituents are confused. They are confused as to why, in the face of all these fiscal problems, some in Congress are now proposing $500 billion in tax increases. Tax increases are very bad for the economy. It is more difficult to get out of the recession as you increase expenditures. They don't understand why some are proposing the largest Medicaid expansion since the program's creation. They want to know why they are proposing $500 billion in Medicare cuts to create an entirely new entitlement program that this country can't afford. Nowhere are these worries and this confusion more evident than among business leaders of America because business is where jobs are created. Government does not produce wealth; government consumes wealth. So if you want to expand the economy, you do it through the private sector. That is where the resources of government come from. That is where the resources that sustain our people come from. So whether it is a small business owner on Main Street or a CEO on Wall Street, the message is clear: Stop spending, get the economy back on track, and get people back to work. Unfortunately, the health reform bill will not address any of these goals. In fact, it may just do the opposite. Don't take my word for it. Let's take a look at what the groups that represent American businesses are saying. Let's start with the Chamber of Commerce representing 3 million American businesses. In a press release distributed November 19, 1 day after the release of the Senate bill, the Chamber called the Senate bill a ``Missed Opportunity to Enact Meaningful Reform.'' That was their title. Let me go to a specific quote: This bill still contains a government-run plan and an onerous employer mandate, it taxes working Americans, slashes Medicare, spends over a trillion dollars--and after all this--CBO tells us 24 million Americans will still not have health insurance. That doesn't sound like the kind of reform that is going to help get the chamber members back on track hiring more workers so we can get this unemployment down. It sounds as though they will end up being forced to pay higher taxes and cut jobs. I am not an economist, but that certainly doesn't sound like a formula for getting this country out of the recession. In fact, the chamber's press release says: The Chamber believes the path to a healthier economy is to cut taxes, not to raise them by $500 billion. They go on to ask a question for which I still can't find an answer: Why is there still no meaningful medical liability reform? Is currying favor with the trial lawyers worth passing up $50 billion in CBO verified savings? I think it is pretty clear that the Chamber of Commerce doesn't think this $2.5 trillion bill will cure what ails the U.S. economy. Let's see what some other business groups have to say. The National Association of Manufacturers put out a press release the same day as the Chamber of Commerce, November 19. The National Association of Manufacturers is the Nation's largest industrial trade association. Their members build the machines that keep America running, so they should know a little bit about how to get our economy running again. Unfortunately, they see Senator Reid's bill as a step in the wrong direction. Like the Chamber and like pretty much every other business group, the National Association of Manufacturers has announced that they cannot support the pending bill. I find it hard to believe that some Senators who claim to be probusiness can support a bill that is opposed by almost the entire business community--or am I missing something? How can some Democrats who claim to want to get people back to work support a bill that economists from the far right to the far left say will reduce wages and increase unemployment? It just doesn't seem to make sense. Like other business groups, the National Association of Manufacturers is in favor of reform. Manufacturers realize that we need health reform to lower costs, increase access, and improve quality. But according to their press release, they cannot support a bill that will--this is their quote--``add massive financial burdens to businesses that are already struggling in this recession.'' They go on to express deep concern about huge tax increases that will hurt small business manufacturers, and they are worried that both the so-called public option and the massive Medicaid expansion will just end up shifting more costs and higher premiums to private businesses. The National Association of Manufacturers ends their press release by saying: Oppose the majority leader's bill and urge Senators to do the same as it raises costs and ultimately will destroy jobs. Again, I find myself asking how someone can claim to be probusiness but support a bill that is so strongly opposed by the business community. Let's take a look at what small businesses have to say. Maybe that is where the answer is. You have to remember that small businesses create 70 percent of the net new jobs in America. In fact, it was Christina Romer, the President's top economic adviser, who said in a recent Webcast that health care reform will ``benefit small business--not burden it.'' Unfortunately, the National Federation of Independent Businesses, the voice of small businesses, doesn't seem to agree. After the release of Senator Reid's bill, the National Federation of Independent Businesses said this: This kind of reform is not what we need to encourage small business to thrive. We oppose the Patient Protection and Affordable Care Act due to the amount of new taxes, the creation of new mandates, and the establishment of new entitlement programs. Like the chamber and the National Association of Manufacturers, small businesses want and need reform, probably more so than even chamber members and the National Association of Manufacturers. But it doesn't sound as though the pending bill actually addresses the problems of small business. In fact, it sounds as though the pending bill simply creates a host of new problems--problems at a time when this country is coming back from the brink of the greatest economic downturn since the Depression. The National Federation of Independent Businesses goes on to say: There is no doubt all of these burdens will be paid for on the backs of small businesses. Over the coming weeks, I am sure some Senators are going to come down here and talk about all of the benefits for small businesses that are in this bill. But in the interest of honest debate, I hope they will at least mention in their remarks that despite all of the so-called benefits, this bill is still opposed by the voices of America's small businesses. It is still opposed by the National Federation of Independent Businesses. I could go on and list about half a dozen other business groups that oppose this bill. The Associated Builders and Contractors, the Independent Electrical Contractors, the International Franchise Association, the National Association of Wholesalers, the Small Business and Entrepreneurship Council, and the International Food Service Distribution Association--all of these groups recognize the devastating impact this bill will have on our economy. We are facing the highest unemployment rate in 26 years. We have already seen the national debt increase by $1.3 trillion since inauguration or per household $11,535. The pending bill misses the mark on business' top priority, and that is lowering costs. Don't take my word for it. The Congressional Budget Office says the Reid bill bends the Federal spending curve further upward by a net of $160 billion between 2010 and 2019. For these reasons, the pending bill is opposed by these organizations I have quoted: the National Association of Manufacturers, the Chamber of Commerce, the National Federation of Independent Businesses, as well as almost every other business group based in Washington, DC, or maybe, for all I know, they are based in other parts of the country, but they still follow legislation here in this city, in the Congress. The business community has spoken, and their message is loud and clear. For Senators who want to bend the growth curve down--and that is what we all set out to do, but we don't have a bill before us that does it--this bill is not the answer. For those Senators who want to get people back to work, this bill is not the answer. For those Senators who want to get this country's economy back on track, this bill is not the answer. If you support American businesses--and American businesses are what provide the income into the Federal Treasury, whether it is corporate tax or income tax--it seems to me that if you have pride in American businesses and the jobs they create, you cannot support this bill. I yield the floor.

Mr. GRASSLEY. Madam President, earlier today I explained to my fellow Senators, and hopefully to my friends in the media, that the Reid bill does not provide a net tax cut for Americans. Contrary to the Democrats' claims, that seems to be the situation. They claim there is a net tax cut. I hope I proved earlier today that it does not have a net tax cut. Some Americans are cut, but don't forget that some Americans have increases in taxes. I pointed directly to this data, as prepared by the Joint Committee on Taxation, to show that a group of middle-income taxpayers will see their taxes go up under the Reid bill, and that would be this class of taxpayers right here. I don't disagree with Democrats saying there is $40,786 million of tax cuts, but there are also tax increases for a large share of Americans. I want to now build on those earlier remarks. As I stated, there is clearly a group of individuals and families who benefit from the government subsidy for health care. However, that group is relatively small. Another much larger group would see their taxes go up. So I want to take a minute to provide some statistics that we pulled from the data of the Joint Committee on Taxation looking at both the winners and the losers under the bill. For the benefit of the public, the Joint Committee on Taxation is an intellectually honest group of professionals who are nonpartisan, and they give Congress information on the impact of policies we make here in our various committees or as individuals or the Senate as a whole. According to this professional group, the Joint Committee on Taxation, out of those individuals and families affected by four major tax provisions under the Reid bill, individuals earning more than $50,000 and families earning more than $75,000 would see, on average, their taxes going up. Only individuals with incomes below $50,000 and families with incomes below $75,000 would, on average, see some tax relief on account of receiving subsidies for health insurance. The data of the Joint Committee on Taxation indicates that in 2019, individuals earning less than $50,000 would, on average, receive tax relief through this subsidy equal to $875. Families earning less than $75,000 would, on average, receive tax relief equal to $2,031 from the subsidy. This so-called tax relief, however, is in the form of an advance refundable tax credit that is delivered directly to the insurance company providing health insurance coverage, not to the individual but signed, sealed, and delivered directly to the insurance company--100 percent of it. I repeat: not to the individual but to the insurance company. Clearly, this group is a winner under the Reid bill. But the same data from the Joint Committee on Taxation indicates that in 2019, individuals earning between $50,000 and $200,000 would, on average, see a tax increase of $593. That is for individuals. Now, let's go to families earning between $75,000 and $200,000. They would, on average, see a tax increase of $670. So what does all this mean? This means the Reid bill does not cut taxes for all Americans. To the contrary, the Reid bill breaks Obama's promise not to tax individuals making less than $200,000 and families making less than $250,000 a year. And you just can't know how many times President Obama, during his Presidential campaign--whether in debates or in individual appearances when he was a candidate--made it very clear that nobody with under $200,000 a year in income was going to see a tax increase. To the contrary, the Reid bill breaks President Obama's pledge not to tax individuals making less than $200,000, and then a higher figure for families making less than $250,000. Does the tax relief provided to individuals earning less than $50,000 and families making less than $75,000 represent a tax cut? Generally, no, because based upon the report of the Joint Committee on Taxation, of the $395 billion the government will spend on tax credits for health insurance--or subsidies for health insurance--$288 billion will be refundable, meaning individuals and families who have no tax liability will still receive the full benefit. The Joint Committee on Taxation tells us that the remaining $106 billion will go toward reducing real tax liability. The Congressional Budget Office classifies a benefit provided to tax filers with no tax liability as government spending, not as a tax decrease. This is compared to a tax benefit that actually will reduce a taxpayer's tax liability. This means the $288 billion of government spending through the Tax Code cannot be considered a true tax reduction. The Democrats count the $288 billion in government spending when claiming the Reid bill provides a tax cut. And the reason is if the Democrats do not count this government spending as a tax cut, they could not hide the fact that the Reid bill increases taxes. Bottom line: The Reid bill does not provide a net tax cut. Instead, the bill raises taxes and it raises taxes on individuals and families earning less than $250,000, contrary to Candidate Obama's presentation during the campaign that nobody below that figure would get a tax increase. Check the data. No one can dispute it. It is right here in these figures. Everybody in the United States is represented by these figures here highlighted. They are the ones who are going to get a tax increase. That is the rest of the story. I yield the floor.

Mr. GRASSLEY. Madam President, my friends on the other side of the aisle have taken to the floor to make the argument in favor of the Reid bill that it eliminates a so-called hidden tax. What is this so-called hidden tax? The other party argues that there is a hidden health tax that families pay in increased premium costs to cover the costs of caring for the uninsured. In short, when doctors and hospitals provide treatment to the uninsured they are forced to compensate for this ``uncompensated care'' and do so by charging more to private health insurers. The cost of this care that is shifted to the insurers is then passed on to health care consumers in the form of higher health insurance premiums. Unfortunately, this so-called hidden tax is often overstated. Families USA conducted a study attempting to quantify the cost shift associated with uncompensated care. According to this study, about $43 billion in uncompensated care is shifted to private health insurance which led Families USA to conclude that there is a hidden tax of about $1,100 that families pay in increased premiums. A Kaiser Family Foundation study dissected the Families USA numbers and estimated that the total amount of uncompensated care shifted to private insurers was closer to $11 billion, making the so-called hidden tax around $200 for a family, compared to the $1,100 that Families USA said. Let me give some ground to my friends on the other side and assume that the hidden tax does equal that higher figure, $1,100, as compared to the Kaiser Family Foundation figure of $200. The Democrats' bill does not get rid of the hidden tax entirely. Actually, this bill makes it worse. How? First, the Democrats' health care reform bill still leaves a large number of Americans uninsured. Specifically, the Reid bill leaves 23 million out of 54 million still without health insurance at the end of this decade, remembering that this bill does not actually take effect until 2014. So between 2014 and at the end of the budget window, we still have 23 million people without health insurance. At best, the reform in this 2,074-page Democratic bill cut the hidden tax in half; in this case, to about $500 for a family. The Reid bill adds, however, new hidden taxes. These impose $67 billion worth of so-called fees on health insurance companies and self- insured arrangements beginning in 2010. The Congressional Budget Office, the Joint Committee on Taxation, the nonpartisan experts and official congressional scorekeepers have testified that these fees will be passed on to health care consumers. The Congressional Budget Office and the Joint Committee on Taxation have further testified that this will result in higher insurance premiums for all Americans. The actuaries at Oliver-Wyman estimate that the fees imposed on health insurers would add $488 to the cost of the average family health insurance policy. A new hidden tax is also created as a result of the Medicaid expansion and Medicare cuts. The major cost shift in health care derives from the government programs, Medicare and Medicaid, which reimburse providers at rates roughly 20 percent to 40 percent lower than what private providers pay to the same doctors and hospitals. President Obama understands that paying doctors below market rates leads to a cost shift. After all, in a townhall on health care reform, the President said: If they're only collecting 80 cents on the dollar, they've got to make it up somewhere, and they end up getting it from people who have private insurance. The Medicare and Medicaid cost shift will be increased significantly under the Democrats' health care reform bill. According to CBO's estimate, Medicaid will be increased by more than 40 percent, from 35 million to 50 million people by the end of the budget window in 2019. Additionally, the bill includes almost $\1/2\ trillion in Medicare cuts which will result in lower payments to providers. The actuaries at Milliman Consulting studied the current cost shifting resulting from Medicare and Medicaid underpaying providers and found that this cost shift for Medicare and Medicaid totaled almost $89 billion per year, adding $1,788 to the current family health insurance policy. Increasing the current Medicare and Medicaid cost shift, as a result of this 2,074-page health reform bill before us, would add even more cost to a family health insurance policy. The easier cost shift to address would be the $1,700 cost shift from defensive medicine. The Democrats do not address cost shift from defensive medicine which Dr. Mark McClellan, former head of CMS, and Daniel Kessler estimated adds $1,700 in additional cost per average family. Addressing this reform alone could save more than covering all of the uninsured. So you see, the Democrats say their bill will eliminate the so-called hidden tax. My friends seem to come up short on that one. Also, my friends add new hidden taxes that will burden middle-class Americans. I ask my friends to be transparent when they are talking about getting rid of the hidden tax. The Democratic health reform bill actually makes things worse. I yield the floor.

Mr. GRASSLEY. Mr. President, I don't rise to add to what the Senator from New Jersey said. I just wish to take this opportunity to tell him I agree with him, and I appreciate his leadership on this issue over several years--even the years before he came to the Senate. Often, I am asked in my State, because we can export so much agricultural stuff, if I would vote to open trade with Cuba. I said I am willing to open trade for Cuba when they give political freedom and economic freedom to the people of that country because this dictator has run Cuba into the most impoverished country in the world. Before he took over, they had a very viable middle class and they were a prosperous country. I stand ready to help the Senator on what he is trying to do in that area.

Mr. GRASSLEY. Mr. President, I come to the floor at this point to give some breadth to a statement that was made on the floor earlier today. It was made by my friend, Senator Baucus. I don't take offense to what he said because I sensed a great deal of frustration in his statement. I will read what he said so you know what I am reacting to. The reason I don't take offense to what he said is because he and I have worked so closely together over 10 years, with one or the other of us being chairman of the Finance Committee, that we have such an understanding of each other. Just prior to the remarks I am going to read, he had spoken positively about Senator Enzi and me. So I want my colleagues to know this statement is not made out of anger that I am going to give a rebuttal to. Well, we kept working bipartisan--working together, for days and days, hours and hours, and then, fortunately, Mr. President, it got to the point where I'm just calling it as I see it. I can't--I--one of my feelings is I'm too honest about things. And it's--the Republicans started to walk away. They pulled away from the table. They had to leave. I ask you why? Why did that happen? And the answer is, to be totally fair and above board, is--and above board, is because their leadership asked them to. Their leadership asked them to become disengaged from the process. I know that to be a fact. Why did their leadership ask Republicans to leave and become disengaged from the process? To be totally candid, they wanted to score political points by just attacking this bill. They were not here to help--help be constructive, to find bipartisan solutions. They were for a while, then when the rubber started to meet the road and it came time to try to make some decisions, they left and began to attack--and began to attack. I wish to take a few minutes to respond to these remarks that I read. It was asserted, through these remarks on the floor, that some Republicans in the so-called Gang of 6 were directed by the Senate Republican leadership to cease participating in bipartisan talks. The Gang of 6 referred to the six bipartisan members of the Senate Finance Committee. On the Democratic side, the members were my friends, three chairmen, including Senator Baucus, Budget Committee chairman; Senator Conrad; and Energy Committee chairman, Senator Bingaman. All are senior members of the Democratic Caucus. On the Republican side, the three members included Senator Snowe, ranking member of the Small Business Committee; Senator Enzi, ranking member of the Health, Education, Labor, and Pensions Committee; and this Senator. Senators Snowe and Enzi are senior Members of the Republican caucus. Chairman Baucus convened this working group with a singular goal of a bipartisan health care reform bill. We met for several weeks up in the Montana Room of Chairman Baucus's office. I would agree with the way participating Members have described these discussions. They were well informed, thoughtful, provocative, challenging, and frustrating all at the same time. But I would say that in the months we negotiated, there was never once that anyone walked away from the table. There was never once that there were any harsh words. While we were engaged in those discussions, there was constant pressure from folks outside the room for us to reach a quick deal. That pressure came from the White House, it came from the Democratic leadership, it came from advocacy groups outside, and it came from many media folks covering the day-by-day meetings. To be fair, the Senate Republican leadership was very concerned about some of the directions the policy discussions were taking in the Gang of 6. That concern grew, particularly after the very partisan HELP Committee markup occurred. Senator Hatch left the original Gang of 7 because of the character and result of the HELP Committee markup. Most important, the Senate Republican leadership was concerned that a bipartisan Finance Committee bill would be co-opted into a partisan floor bill, when the Democratic leadership merged the bills. Senators Snowe, Enzi, and I anticipated that concern. To be fair to Senator Baucus, as he was negotiating with us, he tried to convince us that we would be very much a part of those merging of the bills. He offered that in good faith. I believe him. I even believe him today saying that. But seeing how neither the HELP Committee nor the Finance Committee was as involved as they should have been in what Senator Reid put together in this 2,074-page bill, I wonder whether Senator Baucus could have, if we had a bipartisan agreement, actually carried out that guarantee. From the get-go, we Republican members of the Gang of 6, to make sure we were a part of the process that I described, as Senator Baucus told us we would be, asked for assurances from the White House and from the Senate Democratic leadership on the next step in the legislative process, if we, in fact, did arrive at a bipartisan agreement. I also found that many in the broader group of Republicans, who provided the bipartisan glue for the CHIP bill of 2008, had similar concerns. All Republicans had process concerns, such as where would it go once it left the Senate Finance Committee. We wanted assurances, and here is what we wanted. The assurances requested boiled down to a good-faith promise that the bipartisan Finance Committee health care bill would not morph into a partisan health care reform bill when Majority Leader Reid merged the two committee bills. We wanted to make sure the bipartisan character of a bipartisan Finance Committee bill was going to be retained through these next steps. To do otherwise would be akin to getting on a bus and not knowing where the bus was going or how much the bus ticket would cost. Assurances were also requested with respect to a conference between the House and Senate. The assurances were similar to assurances requested by Senator Reid and made by the then-majority Republican leadership during the period of 2005 and 2006. The Democratic minority leader, at that time, made these assurances a condition to letting major regular order Finance Committee bills even go to conference. As an example, take a look at the Congressional Record, and you will see the assurances made by then-Majority Leader Frist to then-Minority Leader Reid. These requests were made repeatedly to the Democratic leadership, publicly and privately, about how the postcommittee action of the bipartisan group would be handled in the merger with the HELP Committee bill. It was a focus of a July 8 lunchtime, face-to-face meeting at the majority leader's office, with Senators Reid, Baucus, Conrad, Bingaman, Snowe, Enzi, and myself. The bottom-line response from Senator Reid at that meeting was he needed 60 votes. I guess, the implication was, despite the fact that the Democratic caucus contained 60 members then and now, Senator Reid didn't think it was possible to secure the votes of all members of his caucus. A restatement of the reality of the Senate rules was not the assurances the three Republican Senators--this one included--sought from Senator Reid. Senator Reid, himself, recognized the validity of this request in an August 8 Washington Post article. I ask unanimous consent to have that article printed in the Record.

Mr. GRASSLEY. Mr. President, I will quote, in part, from the article: The closer these negotiators move to striking a deal, the more fraught the discussions become by issues of trust and political will. Among Republicans, the pressure is especially acute. All three GOP senators fear they will be sidelined once the bill is approved at the committee level, with their names invoked to demonstrate bipartisanship even as they're left with no say over the final product as it is meshed with the Senate health panel's version and then ultimately with the House bill. Republicans were also worried that the bipartisan product could be lifted into a partisan reconciliation bill. I quote further from that same Post article: Reid said he already provided the Republicans with some assurances, and added, ``I'll do more if necessary.'' Continuing to quote from the Post article: He said of GOP concerns, ``I don't blame them.'' And he added that, considering the political realities of the Senate, with its large number of moderate Democrats, health- care reform would have to gain significant bipartisan support to cross the finish line. President Obama and the Senate Democratic leadership set a deadline of September 15 for the bipartisan Gang of 6 to produce a proposal. If the proposal were not available by then, the President and Senate Democratic leadership made it clear the plug would be pulled on further bipartisan talks. I point that out because that is very significant. A powerful member of the Senate Democratic leadership, the senior Senator from New York, made it crystal clear the Senate Democratic leadership would pull the plug. That member, who is very smart and articulate, made it as transparent as possible that the September 15 deadline was more important than a bipartisan deal. I ask you to go back and look at the media reports. The Gang of 6 was unable to reach a deal on contentious issues such as abortion, the individual mandate, and financing issues by White House/Democratic leadership's deadline. Chairman Baucus had to move forward. I respect the pressure my friend from Montana was under. I have been there myself. But the record needs to be correctly made that the September 15 deadline was not a Republican deadline. It was a deadline imposed by the White House and the Senate Democratic leadership. I might say that wasn't just the GOP deadline--it wasn't a deadline for the Gang of 6 either. I didn't sense, from the three Democratic members, that they agreed with that. So the Senate Democratic leadership pulled the plug on the talks. Again, go check the public comments and press reports. They pulled the plug. Senator Enzi and I could not agree to the product at that point because of substantive issues that were resolved against us and the failure of the White House or Senate Democratic leadership to deliver on those process assurances that we asked for. Senator Snowe did have substantive issues resolved sufficiently at the Finance Committee markup so that she could support the bill. I might note today that I heard Senator Snowe caution the Democrats as she gave them the boost from her vote in the Finance Committee--that was right after the bill passed--she made it clear that her vote for later stages would depend in part on data on the key question of whether the product makes health care more affordable. Her letter to CBO dated December 3 lays out the issues in precision. At the next stage of the process, the merged-bill stage, all of the Senate Republicans' worst fears were confirmed, but it was especially telling to Senator Enzi and me. My sense is Senator Snowe appreciated it more than any other member of our conference. The bottom line was that the majority leader's merged bill was constructed in such a partisan way that Senator Snowe's input was cast aside. Let's be clear. Senate Republicans did not set deadlines. Senate Republicans did not threaten to go their own way if the deadlines were not met. Even today, the pending motion from this side of the aisle puts the question to the Senate this way: Take the bill back to the Finance Committee. As the old saying goes, hindsight is 20/20. As I look back on the process, I make these observations: There was an uncanny disconnect between those inside and outside the room. Many on the outside, mainly from the left side of the political spectrum, seemed to want a reform deal just to have a deal. They did not seem to be that curious about the contents. Perhaps for some of those folks, it was a bit of an imperative to draw on the good will that any President has in the first few months of office. For those of us in the room--meaning the room where the negotiations were going on--there was a realization that we were tackling, as Chairman Baucus has described it, an extremely complex set of issues. We learned very quickly that closing the loop on the policy issues, let alone finding political consensus, was not easy. The pressure to close a deal by the July 4 recess was overwhelming. My friend, the chairman, wisely pushed back and said we would get a deal when we reached a bipartisan deal. The Group of 6 was unable to reach a deal on contentious issues such as abortion, individual mandate, and financing issues faced by the White House-Democratic leadership deadline. Chairman Baucus had to move. In my heart, I feel he would rather not have had that sort of pressure or make that decision. But that was not our deadline. It was a deadline imposed by the White House and the Senate Democratic leadership. They pulled the plug on the talks. Go check the public comments and the press reports. They pulled the plug. Senator Enzi and I could not agree to a product at that point because of the substantive issues that were very much involved. I want to make it very clear, for this Senator, of the three Republicans who were negotiating, kind of in summary, that the Republican leadership, I think, had questions about a lot of things that were going on in those negotiations. But never once did Senator McConnell, my leader, say to me: Get out of there. That is the impression that was left this morning. I can only say that I think I have established a reputation in the Senate, particularly while I was chairman of the Senate Finance Committee, that I did not listen to either the White House or people in leadership necessarily when I thought a bipartisan compromise was the only way to get things done. I suppose there is a whole long list of things that I ought to write down before I make this statement, but I can only think of two or three right now that I can be sure of that I can say in an intellectually honest way that I stood up to the Bush White House when I was chairman of the committee. They came out immediately for a $1.7 trillion tax cut in 2001. I made a decision early on that it was not good for the economy and it was not politically possible. So we passed a much smaller, in a bipartisan way, tax bill for that year. And yet it was the biggest tax cut in the history of the country. In 2003, when the White House and House Republicans in the majority at that time said we had to have a $700 billion tax cut in addition to the tax cut that was passed in 2001, there were not votes in the Senate among just Republicans to get it done. To secure the votes to get it done, we had to limit it to half that amount of money, or just a little bit more than half that amount of money. And in order to get those votes, contrary to the $700 billion tax cut that the Bush White House wanted and the House Republicans wanted that we could not get through here, I said I will not come out of conference with a tax cut more than that amount of roughly $300 billion. We got that done by just the bare majority to get it done. But I stood up to the White House, I stood up to the House Republican leadership who thought we should not be doing anything that was short of that full $700 billion. There have been other health care bills very recently where I stood up against the White House and against our Republican leadership. I think I have developed a reputation where I am going to do what is right for the State of Iowa and for our country. And I am going to try to represent a Republican point of view as best I can, considering first the country and my own constituency. Then when it comes to whether people in this body or outside of this body might think that for the whole months of May, June, and July, and through August, with a couple meetings we had during the month of August, that we were dragging our feet to kill a health care reform bill, I want to ask people if they would think I wouldn't have better things to do with my time than to have 24 different meetings, one on one with Chairman Baucus, or that I wouldn't have more than something else to do than have 31 meetings with the Group of 6. These were not just short meetings. These were meetings that lasted hours. There was another group of people--Grassley, Baucus, and others, sometimes that included people from the HELP Committee and the Budget Committee. But we had 25 meetings like that. I wonder if people think we would just be meeting and spending all those hours to make sure that nothing happened around here. No. Every one of the 100 Senators in this body, if you were to ask them, would suggest changes in health care that need to be made. Even in that 2,074-page bill, there are some things that most conservative people in this country would think ought to be done. We all know to some extent something has to be done about this system. We worked for a long period of time, thinking we could have something bipartisan. But it did not work out that way, and now we are at a point where we have a partisan bill. That is not the way you should handle an issue such as health care reform. Just think of the word ``health,'' ``health care.'' It deals with the life and death of 306 million Americans. Just think, you are restructuring one-sixth of the economy. Senator Baucus and I started out in January and February saying to everybody we met, every group we talked to, that something this momentous ought to be passing with 75 or 80 votes, not just 60 votes. Maybe one of the times the White House decided to pull the plug on September 15 may have come on August 5 when the Group of 6 had our last meeting with President Obama. He was the only one from the White House there and the six of us. It was a very casual discussion. I said this before so I am not saying something that has not been said. But President Obama made one request of me and I asked him a question. For my part, I said: You know, it would make it a heck of a lot easier to get a bipartisan agreement if you would just say you could sign a bill without a public option. That is no different than what I said to him on March 5 when I was down at the White House, that the public option was a major impediment to getting a bipartisan agreement. Then he asked me would I be willing to be one of three Republicans, along with the rest of the Democrats, to provide 60 votes. My answer was upfront: No. As I told him, you can clarify with Senator Baucus sitting right here beside you, that 4 or 5 months before that, I told Senator Baucus: Don't plan on three Republicans providing the margin, that we were here to help get a broad-based consensus, as Senator Baucus and I said early on this year, that something this massive ought to pass with a wide bipartisan majority. Mr. President, I yield the floor, and I suggest the absence of a quorum.

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

Mr. GRASSLEY. Mr. President, I need to correct the Record. In the part of my statement where I refer to the July 8 meeting with Senator Reid, it was only Snowe, Grassley, and Enzi, not the other Senators I named. So I wish to correct that for the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I thank the Senator from Montana for arranging that for me. I hope this afternoon to speak on the issue of importation of drugs because I support the Dorgan amendment. Right now I wish to address the issue of the Crapo motion to commit. This generally deals with all of the tax provisions in this 2,074- page bill. If Senator Crapo prevails--and he should--the unrelated House bill, along with the Reid amendment, would be sent to the Senate Finance Committee. The Finance Committee, under the motion, would be empowered to return the bill to the full Senate with an amendment that eliminates the heavy taxes that are in this bill. Senator Crapo has discussed the impact of the Reid amendment on middle-class families. I will lay out all the taxes that are in this bill. In farm country, many of us who work the land often observe big freight trains rumbling across the terrain. Sometimes they scare cattle, hogs, and other animals. Those freight trains are impressive in their power, in their speed, and now the length of the trains. It is very common to see a 100-car train, 150-car trains. The partisan force with which the majority is powering this bill through the Congress is equally as impressive as that of a freight train. The speed that is being displayed for such complex legislation is something to behold. Most importantly, the sheer number and breadth of the new taxes in this bill reminds me of a very long train. Almost $\1/2\ trillion in taxes, fees, and penalties, and I think they all have the same economic impact, whether it is a tax, a fee, or a penalty--a negative impact on the economy. These taxes, fees, and penalties are so imposing, I am calling this 2,074-page bill the tax increase express. The locomotive driving this train is health care reform, driven by the Democratic leadership. So we have the locomotive that drives this tax increase. I don't think the American public knows the bill would impose that much, $\1/2\ trillion worth of new taxes, new fees, and new penalties on the American people. The American public, who supported President Obama with a majority of votes 13 months ago, heard the President loudly and clearly, and that is why they gave him such an overwhelming majority. They understood our President pledged he would not raise taxes on people making less than $250,000 a year. Unfortunately, the Democrats' leadership bill would violate that clear pledge. What are the tax increases and the fees and penalties in Senator Reid's amendment? Let me take a moment to highlight them because every locomotive needs power to run. The first power source, the first car of the tax increase express, is the so-called fees on health insurance companies, medical device manufacturers, and drug manufacturers. That might not sound like something the grassroots of America would worry about--taxes on insurance companies, medical device manufacturers, drug manufacturers--because maybe they think businesses pay taxes. But businesses and corporations do not pay taxes, only people pay taxes. So when people find out they are going to be paying these, it puts a whole new light on what is a fee and what is a tax. There have been numerous studies that have shown that these fees on, for example, health insurers will increase health insurance premiums. Some say premiums would increase by $488 for a family, other studies say $500. Most Members on the other side of the aisle take issue with these studies. They argue these studies were performed at the request of insurance companies or conducted by independent experts with ties to that same industry. Let me ask my Democratic friends this: Do you question the work of the Congressional Budget Office and the Joint Committee on Taxation? Well, you should not because they are like a god around here. When the CBO says something is going to cost something, that stands, unless there are 60 votes to override it in the Senate. So most everything the CBO says stands. They have respect because of the intellectual honesty of their research and the nonpartisanship they have. So these agencies--the Congressional Budget Office and the Joint Committee on Taxation--have testified that these fees will actually be passed on to health care consumers. Check the record. No one can dispute it. The Congressional Budget Office and the Joint Committee on Taxation have also testified that the fees will increase health insurance premiums. Check the record. No one can dispute it. My friends in the Democratic leadership may say, once their health reforms are in place, premiums will go down, net of the fees. They will hail a recent CBO report highlighting the winners but somehow ignoring the losers. They will say these fees will not affect premiums for the vast majority of Americans. But here is the flaw in that assertion. The Congressional Budget Office analyzed premium costs, what they are projected to be in 2016 under this legislation. What about premium costs right now in the years before these programs take effect--2010 and 2013? Why is this question important? The answer is, these fees go into effect in the year 2010, not when most of the expenditures go into effect in 2014. The majority of the Democratic reforms which are intended to lower costs do not go into effect until 2014--4 years from now. I ought to say that 10 times because that is very important to how this bill came out to be revenue neutral. So we ought to look at what happens in the years 2010, 2011, 2012, and 2013. Premiums will go up. Why? Because, for one, the Democrats are adding costs to the health insurance you buy by imposing these fees on health insurers, and they are giving you no government assistance to help with these added costs. I would ask my friends in the media, dig a little bit deeper on this point, and you ought to be reporting on it. Why? Because the American public does not understand that in the short term premiums will go up. Instead, the public is simply hearing some media reports on a portion of the premiums, in 2016 and beyond. Of course, that is a very long time from now. The American public does not want to wait for their premiums to go down, if they go down at all. It appears my friends in the Democratic leadership want the tax increase express to barrel through Congress before the public realizes what health care reform actually means; that is, higher premiums as early as 2010. Let me turn to the second car of the tax increase express. This car is the proposal to restrict the eligibility criteria for claiming the itemized deductions for medical expenses. This proposal says you can no longer deduct expenses that exceed 7.5 percent of your adjusted gross income. Instead, you can only deduct expenses that exceed 10 percent of your adjusted gross income. In plain English, this proposal limits tax deductions you can take for medical expenses. In other words, you will lose a portion of your tax deductions. Even the New York Times calls proposals that would take away a portion of your tax deduction a tax increase. Mr. President, I ask unanimous consent that article from the New York Times, dated February 26, 2009, be printed in the Record.

Mr. GRASSLEY. In the top line, the article says: ``President Obama will propose further tax increases on the affluent to help pay for . . . health care reform.'' I am highlighting this article because the President is also proposing to take away a portion of a person's tax deduction. The President wants to limit the itemized deductions people making more than $250,000 a year can take. The only difference between the two proposals is the medical expense deduction limitation affects people who make less than $250,000 a year--the same class of people the President promised in the election he was not going to increase taxes on. So, again, do not take my word for it. Data from the Joint Committee on Taxation tells us that in the year 2013, the largest concentration of taxpayers claiming the medical expense deduction will earn between $50,000 and $75,000--people who never thought they were going to have their taxes increased based upon what the President said during the campaign. The analysis shows, a good number of taxpayers earning between $75,000 and $200,000 also claim the medical expense deduction. My friends on the other side of the aisle will argue that their government-subsidized tax credit for health insurance will wipe clean any new taxes for those people below 400 percent of poverty. They will also argue that people purchasing insurance through the new exchange will be protected from catastrophic expenses as a result of annual out- of-pocket limits. For this reason, my friends on the other side argue those middle-class taxpayers will not need to rely on medical expense deductions. I hate to break it to my colleagues, but the Congressional Budget Office--again, that god of Capitol Hill--estimates that in 2014 only 4 percent of Americans will be purchasing exchange insurance and only 3 percent of Americans will be receiving a tax credit. By 2019, when the Reid bill is in full effect, only 7 percent of Americans with exchange insurance will be receiving the tax credit. That leaves a heck of a lot of people below 400 percent of poverty with higher taxes. What about those individuals and families above 400 percent of poverty? These people earn income below the President's magic $250,000 level, and somehow they do not qualify for this tax credit. What they do qualify for, though, is a tax increase. After all, there is reason why this proposal raises $15 billion over 10 years, and that is a heck of a lot of money. Let me now turn to the third car of the tax increase express. This car is the high-cost plan tax. The Congressional Budget Office has consistently cited the two most powerful ways to bend the cost curve downward, meaning the cost curve of health care inflation: No. 1 is to cap the tax preference for employer-provided health coverage or the so- called exclusion; and, secondly, Medicare delivery system reforms. A recent letter sent to the White House by respected economists also contends that placing a limit on high-cost employer plans would slow health care spending and reduce costs. Well, some of my colleagues have come out squarely in support of a cap on the exclusion. That was an intellectually honest position. My friends, the chairman of the Budget Committee and the chairman of the Finance Committee, took the intellectually honest position. The Democratic leadership, however, has squarely opposed a cap on the exclusion. They argue that a cap on the exclusion would hurt middle- class workers. But in a sleight of hand, this bill--this 2,074-page bill--and its authors, the Democratic leadership, came up with a proposal that would tax insurance companies for offering high-cost plans. It is a more complicated way of taxing the same workers. It is a sleight of hand because the Democratic leadership knows the tax will be passed through to the worker. My friends simply did not want to say they were taxing the workers directly. So they have decided to tax those same workers very indirectly. In the end, the worker would be paying the tax, and these workers would be middle-income workers. Again, do not take my word for it. The Joint Committee on Taxation testified before our very Senate Finance Committee that the high-cost plan tax would be passed on to whom--the workers. Joint Committee on Taxation data also indicates that in 2019, 84 percent of the revenue generated from the high-cost plan tax comes from--guess who--individuals and families earning less than $200,000 a year, contrary to the President's promise in the last campaign that these folks would not pay any additional tax. So whether you agree or disagree with the policy of limiting the tax benefit for employer-provided coverage, middle-class workers would see a tax increase. Let's go to the fourth car of the tax increase express. This car is going to carry two new tax increases. The first tax increase is on workers who contribute to a flexible spending account, better known as an FSA. Under the current tax laws, a worker may contribute to an FSA on a pretax basis and use those FSA contributions to pay for copays and deductibles tax free. Currently, there is no limit on how much a worker may contribute to an FSA. This 2,074-page bill, put together by Senator Reid, would limit the contribution amounts to $2,500. Statistics show, the average FSA contribution is $1,800 a year. So this $2,500 limit does not sound that bad, right? Well, I say wrong. A great number of workers who have serious illnesses contribute significantly more than $1,800 and, let me say, more than $2,500. On average--on average--these workers whom I am talking about with serious health problems earn about $55,000 a year. If I were to connect the dots, I would see a tax increase on workers with serious illnesses who earn $55,000 a year. Well, here is how. These workers would now have to pay taxes on their FSA contributions in excess of $2,500. The Democratic leadership is taxing health benefits for the first time ever--at least this benefit for the first time ever. The second tax increase in this fourth car is the elimination of the taxfree reimbursement for over-the-counter medicine. Under the current tax rules, payments for over-the-counter medicine may be reimbursed taxfree if a worker is covered under a flexible savings account or under a health savings account. This 2,074-page bill takes away that tax benefit. The fifth car of the tax increase express is the new Medicare payroll taxes. Since the New Deal, the United States has put into place several social insurance programs. They are part of the social fabric of America. Included in those programs are Social Security, unemployment insurance, and Medicare. They are all founded on the social insurance concepts. As Senator Moynihan, when he represented New York, used to remind us, to ensure their constitutionality, these programs were designed to be financed with payroll taxes instead of insurance premiums. But to maintain the closest appearance possible to social insurance, the payroll tax looks a lot like a premium for insurance. This analogy is very intentional. It is not accidental. It is bedrock to the sustainability and universality of social insurance programs that we all support: Social Security on the one hand, Medicare on the other. The Reid amendment breaks that precedent, muddies the premium analogy, and could start us on a tax-hike-only journey to dealing with our unsustainable entitlement programs. Let me explain that. The way the payroll tax works now is that every worker pays in based on his or her salary, wages, or small business income. That is a single, simple, and consistent tax base. Also, one tax rate applies to that payroll tax base. Now, for the first time--for the very first time--an additional second tax rate will apply to the payroll tax base. Also, for the first time in the almost 45-year history of this great social insurance program, we have before us a proposal that creates a marriage penalty in the payroll tax. Now think of the negative comments you get from a marriage penalty from grassroots America. So here we have a proposal that creates such a marriage penalty in the payroll tax. In other words, some married couples will be paying higher payroll taxes due solely to the fact that they are married. A tax on marriage? This is a direct result of this addition to the second tax rate. Here is another matter that boggles the mind. The second tax rate kicks in if your wages exceed $200,000 if you are single and $250,000 if you are married. These dollar thresholds are not indexed. They are not indexed, so what happens then when you have inflation? Another tax where the tax base is not indexed is the AMT. That ought to bring back all the horror stories about not indexing something timely when you first pass it. I think every Member of Congress knows that is an annual problem for us. In the late 1990s, commentators called the AMT the tax system's ``ticking timebomb.'' Fortunately, my friend, the chairman, and I started to diffuse this bomb in the 2001 tax legislation. It appears that my friends on the other side of the aisle have created another tax system ticking timebomb problem. Finally, we have a caboose of this tax increase express. The caboose is the individual mandate penalty tax. It is a tax. It can be called a penalty, but it is a tax. All you have to do is have the IRS collecting it, as it does, and you know it is a tax. President Obama does not want to acknowledge that the penalty for failing to maintain a government- approved health insurance program is a tax, but it is right here in black and white. The Reid bill amends the Tax Code by adding a new excise tax. It is payable by those Americans who do not purchase government-approved health insurance. I ask unanimous consent to place section 1501 of the Reid amendment in the Record, which adds this new excise tax to our tax laws.

Mr. GRASSLEY. The kicker here is that CBO has told Congress that roughly one-half of those Americans who will pay this tax are individuals between 100 and 300 percent of poverty. These folks earn less than $250,000 a year. I see the light at the end of the tunnel that this tax increase express is going through. Unfortunately, that light at the end of the tunnel is the tax increase express. We can derail the tax increase express if we want to. That is why today I am supporting Senator Crapo's motion to commit the Reid amendment to the Senate Finance Committee. Senator Crapo's motion would require the Finance Committee report a bill back to the Senate that does not include tax increases, fees, and penalties included in the Reid bill. Why should my Democratic friends vote in favor of the motion? Because they shouldn't want to bear the fallout of legislation that was rushed through Congress as the economic stimulus package was back in February. They shouldn't want to tell their constituents they voted in favor of a bill that increased their premiums. They shouldn't want to vote for a bill that raises taxes on many, only to provide benefit for a few. They shouldn't want to break President Obama's pledge not to tax people making less than $250,000 a year. What my friends should want is real health care reform, the kind of reform that has broad bipartisan support. I have consistently said that if Congress wants to restructure one-sixth of the economy, it ought to be done on a bipartisan basis, and that is not one or two Republicans voting with Democrats. That is not happening around here on a bipartisan basis. We are debating this 2,074-page bill, a partisan product, a bill that was cobbled together by the Democratic leadership, a bill that has not received approval of the Senate Finance Committee. I ask my Democratic friends to stop this process foul right now. Vote in favor of Senator Crapo's motion so we can do health care reform in the right way: on a bipartisan basis, in a transparent and open way, so that the American public can understand what we are doing; so the American public can be a part of the process; so that we can find a way to reform our health care system without burdening our constituents with these higher taxes, fees, and penalties. Let's reduce the out-of-control spending in the Reid amendment and find savings within the health care system. Let's derail the tax increase express before it steamrolls over hard-working Americans and discourages employment, particularly employment in small business, where 70 percent of the new jobs are created. The taxes, fees, and penalties don't need to be the fuel of this locomotive fire. I ask all of my colleagues to support Senator Crapo's motion to commit the Reid bill to the Finance Committee. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, yesterday I offered legislation to make permanent a number of education-related tax relief measures. My legislation, S. 2851, also improves and makes permanent helpful provisions for 529 plans and the American opportunity tax credit for education. At the first hearing I held when I became chairman of the Finance Committee in 2001, I made clear that education tax policy was a priority of mine. As chairman, I was able to remove the 60-payment limit for deducting student loan interest and I was able to increase the income limits for that deduction. This was not the only time I fought hard to allow students to deduct their student loan interest. In 1997 I was able to reinstate the student loan interest deduction that Congress had eliminated from our tax laws. However, the 60-payment limit on the deductibility of student loan interest remained. I ensured that the 2001 tax relief bill took care of that problem. Other incentives for education that I was able to enact into law in 2001 included raising the amount that can be contributed to an education saving account from $500 to $2,000; making distributions from prepaid college savings plans and tuition plans tax-free; and making permanent the tax-free treatment of employer-provided educational assistance. These tax policies and many others, including those for school renovations, repairs and construction, have proven their value to Iowa students in dollars and cents, year after year. The tax relief has delivered measureable educational assistance to Iowans and students and families nationwide, making education more affordable and accessible. One drawback of enacting these provisions in the 2001 tax relief bill, however, is that there was a sunset provision attached to that entire piece of legislation. All of the tax relief needs to be made permanent. Especially the education-related tax provisions. And that is what my bill today does. My bill makes these provisions permanent. It is no coincidence that I introduced my education tax bill on the day the President of the United States talked about jobs. Our economy demands well-educated workers. The popularity of education tax incentives is good news for workers who find themselves unemployed or who want to go back to school to advance, or even change, their careers. Congress is willing to consider permanent tax relief for companies to buy machinery. Why isn't Congress willing to make an investment in people? That's what tax relief for education is. An investment in our future. It is just as important as job-creating tax incentives for businesses. Some will say we can't afford this, but we really can't afford to lose billions of dollars of help for Americans working hard to educate their kids. Education has made this country great. We should not let this opportunity pass us by. We should not let these education-related tax provisions expire. We should also continue to help make education affordable for families and students. This makes education accessible for all. I look forward to working with my colleagues on passing this bill.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I yield 10 minutes to the Senator from Kansas.

Mr. GRASSLEY. I yield such time as is remaining to the Senator from Utah.

Mr. GRASSLEY. Madam President, before the Senator from North Dakota leaves and before I speak on another issue, I wish to tell him I am going to speak in support of his amendment. But I would like to ask him a question now, if he will answer it for me--a friendly question, but it is something I don't know absolutely for sure, but I believe that pharmaceuticals are about the only thing a consumer in the United States cannot buy anywhere in the world that they want to buy. We ought to give them that same right we do on everything else. There may be some other items I am not aware of, but I think it is only pharmaceuticals that you cannot import from wherever you want to buy them.

Mr. GRASSLEY. I thank the Senator from North Dakota. I would like to talk about a recent news----

Mr. GRASSLEY. I ask unanimous consent to speak now, if I may.