Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I yield myself such time as I might consume.

Mr. GRASSLEY. Mr. President, I yield 3 minutes to the Senator from Utah.

Mr. GRASSLEY

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 Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY. Madam President, I yield back our 3 minutes.

Mr. GRASSLEY. Mr. President, I wish to speak once again, before the vote this afternoon at 2:45 p.m., on the Graham prescription drug bill and point out that that bill sunsets in the year 2010. Also, it omits coverage of most drugs. First of all, the fact the bill sunsets on December 31, 2010, ought to be an overriding factor of how people vote on this amendment. Pages 78 and 79 of the bill say ``drug coverage must stop after December 31, 2010.'' That is section 1860(k), for people who want to look it up and verify what I am saying. The Graham-Miller-Kennedy bill would not provide, if enacted, a permanent Medicare prescription drug benefit. In the tripartisan bill, we are talking about a plan that is permanent. There is no sunset because we know that senior citizens on December 31, 2010, are not going to sunset themselves. They are going to need prescription drugs on January 1, 2001, just as much as they did on December 31, 2010. We have a bipartisan program that is permanent and continues drug coverage in the future. Why? Because prescription drugs ought to be a part of Medicare as much in the year 2002 as hospitalization was a very important part of Medicare in 1965. Medicare beneficiaries should understand that there is no guarantee that a prescription drug plan being offered by Senators Graham, Miller, and Kennedy, will continue to cover their drug expenses after 2010. Some refer to this as a sunset, but I wish to make clear, as this chart points out very well, that this is just one very obvious big black hole in this program that will sunset in the year 2010. Sunsetting a Medicare Program seems to be a very strange thing to do. Medicare is an entitlement program. Dependability has been one of its central features. So why should a new drug benefit be any different than any other program that we have--hospitalization, doctor care, or other provisions in Medicare that we have had since 1965. There is no need to speculate as to why the sponsors sunset their program in 2010. It is a device to make the costs of the bill appear lower than it otherwise would be. In other words, it is a mere gimmick. I point out another very crucial flaw with the Graham amendment and restrictive formularies that might keep beneficiaries from getting help with their medications that they and their doctor prefer. If we look at the tripartisan plan, any drug that is available, generic or patent that is available, what the doctor and what the patient decide is best for them is going to be available. There is a lower copay for generic drugs. We want to promote generic drugs over patented drugs if that is possible, but for sure we should not in any way limit the availability of drugs as is being done under the Democrat plan. We have a poster that shows that 100-percent brand name drugs, albeit approved by the FDA, are going to be available under the program we have in the tripartisan bill, but only 10 percent of the brand name drugs are covered by the Graham-Daschle-Kennedy plan, a Government-run process certain to be time consuming and bureaucratic. If a beneficiary wants to appeal the fact that the drug they want and their doctor wants for them is not available under the Kennedy plan, it is possible to go through a Government appeal process to get the preferred drug covered. Why should we put people to that test of bureaucratic decisionmaking when we have other programs that are available to make the drug that the doctor wants and thinks best for that patient? We do have that in the tripartisan plan. Controls on the pharmacy that can participate in the program, surely this is the biggest gap in coverage. In any case, the important point is it is going to take another act of Congress to continue the program once it sunsets in the year 2010. Once a program like this sunsets, it could be difficult to pass legislation which would be required to extend it. I do not think that is a particularly good deal for our seniors. Having a drug benefit that disappears into a black hole is a terrible idea, as sunsetting is equivalent to disappearing into a black hole. I would like to have Senators who are still in doubt about how they are going to vote this afternoon look at the tripartisan 21st century Medicare amendment as a reasonable alternative because it is bipartisan, because it is middle ground between the least expensive and the most expensive plans. It is not a big cost to Medicare, and it is something that brings permanency and that is predictable well into the future for Medicare. That is what we should have, and that is what we have in the tripartisan drug plan. Any Senators on my side of the aisle who want to speak should get here soon. I reserve the remainder of my time.

Mr. GRASSLEY

Mr. GRASSLEY. I will proceed, Mr. President.

Mr. GRASSLEY. Mr. President, I have a Republican member who wishes to speak. I wonder if I can get a Democratic member to speak. If not, I will go ahead. Is there anyone waiting to speak on the Democratic side? If they are, I do not want to lose the time.

Mr. GRASSLEY

Mr. GRASSLEY. I will try to answer your question.

Mr. GRASSLEY. Mr. President, I am so glad we are in a position where we are able to discuss these very important prescription drug issues, including a prescription drug program for senior citizens as part of Medicare. I am also glad that we are in a position on the floor of the Senate where we are divided in a traditional way, and in that traditional way, I do not mean just Republican and Democrat because too often that is overplayed. We are divided between a group of Senators. First of all, I think we may not have 100 Senators who favor a prescription drug program for senior citizens, but I surely believe that we have 85 Senators who believe that we should have a prescription drug program for senior citizens as part of the modernization of Medicare. Within that 85, I suggest we have some traditional division--division between those who have only confidence in the Government running the program and those, including myself, who have some confidence in the Government but not enough to believe that drug prices are going to be kept minimal through Government control so that we have confidence in the competition of the marketplace to reduce the price of drugs. We are going to find over the next several days, as we continue to debate this legislation and hopefully bring it to culmination and pass a bill so we answer the concerns of our senior citizens who sometimes have to choose between food or medicine--and they should not have to make that choice--that we will have a prescription drug program as part of Medicare. During that debate, I hope the American public listening will consider, do they have confidence in the Government running a program or in the private sector and the competition of the private sector keeping down prices? Quite frankly, I believe when the Government is involved, we are going to run up the price of drugs. I think I can give evidence from the Congressional Budget Office, the nonpartisan scoring arm of the Congress, to that effect. I can also give evidence that if we have a program for senior citizens that has competition in it--in other words different organizations competing for membership of seniors and, in turn, competing for the lowest possible price with the pharmaceuticals--we are going to bring down the price of pharmaceutical medicines. Since 1965, the Medicare Program has provided lifesaving health care services to our Nation's seniors and disabled populations. Hundreds of millions of Americans have had their quality of life improved and their health protected because of this Medicare Program. So we must ensure that Medicare continues the exemplary service it has provided beneficiaries since its inception in 1965, and through these program changes, including prescription drugs, improve it vastly. Unfortunately, we have a situation that this is necessary because Medicare has not kept up with the advances in medical treatment. Medical advances in delivering health care have moved us light-years beyond 1965, but the Medicare Program has not changed to reflect those health care advances. So in order to ensure that Medicare is meeting the needs of today's and tomorrow's seniors, the program needs to be brought into the 21st century. Very few people drive 1965 automobiles today, but every senior citizen is using a 1965 model of Medicare. So that is why, after a year of work, I introduced, with Senators Snowe, Breaux, Jeffords, and Hatch, a bipartisan bill--or if you look at the political backgrounds of all five, a tripartisan bill. Our 21st Century Medicare Act, as we have named it, is designed to bring Medicare up to date by adding a comprehensive prescription drug program and by making other improvements in the program as well. The Congressional Budget Office has estimated our bill will cost $370 billion over 10 years. Now there are other proposals. Senator Daschle, from the other side of the aisle, has a bill. As I understand it, it has not yet been scored by the Congressional Budget Office. How much does it cost? I have heard figures from introducers of that legislation, maybe $450 billion, maybe $600 billion. We need to know what these programs are going to cost before we vote for them. I want to take a moment and walk my colleagues through the elements of the 21st Century Medicare Act. First, the prescription drug benefit adds a comprehensive, voluntary, and permanent drug benefit to Medicare. Our monthly premium is $24. It is the lowest premium of any comprehensive proposal before the Congress, as the authors of those proposals have expressed what their premium is. Our drug benefit is focused on providing money where it is needed most--to the low-income senior citizen who has to choose in some instances between food and medicine. They will no longer have to make that choice. It also targets those who have very high out-of-pocket expenses. Some people might refer to that as catastrophic coverage. We have other names for it, but I think we know that we are trying to protect people where the sky is falling in on them because of the need for prescription drugs. I will describe for seniors with low incomes what this would do, starting with those below 135 percent of poverty. That would be about a $12,000 yearly income individually, about $16,000 a year income for a couple. Medicare will first pay the entire amount of their monthly drug premiums, no out-of-pocket expenses for them buying into the program. Secondly, Medicare will assist them in paying for drugs at every level of spending. They will pay only $1 to $2 for their prescriptions. On average, this group of low-income, older people will see a 98 percent reduction in their total drug costs, another example of one not having to choose between food or medicine because they are low-income. Next we would look at seniors with incomes above 135 percent of poverty but below 150 percent of poverty. This includes individuals with income a little bit over $13,000 and couples with income of almost $18,000. These enrollees will receive Medicare assistance on a sliding scale based upon their income to help pay their monthly premium to get into the program, and also Medicare will assist them in paying for drugs at every level of expenditure. There is no gap for these beneficiaries below 150 percent poverty. Let us look at those with incomes above 150 percent of poverty, which is above $18,000 for a couple. They will pay an average monthly premium of $24 for their immediate care drug benefit--again, the lowest of any premiums that have been announced by other authors that we know about. They will pay a $250 deductible, and after they have reached the deductible, Medicare will cover 50 percent of their drug costs up to the benefit level of $3,450 in total drug spending. Furthermore, Medicare will cover 90 percent of all drug costs after beneficiaries have paid $3,700 out of their pocket for drugs. Let me say a bit more about our drug benefit for Medicare beneficiaries above 150 percent of poverty. That is the group I just described. First, I wish we did not have a gap in coverage between $3,450 and $3,700, but the problem is that we are working within a limited amount of money--$370 billion--which is about halfway between the President's program for seniors and, let us say, the other prominent plan before the Senate, the Democrat plan. We are about in the middle. We have adopted a policy of using funds to benefit the largest possible number of Medicare beneficiaries, particularly those with low incomes, as I have demonstrated. So helping low-income people as opposed to doing more with incomes a little bit higher, it requires some sort of a trade-off, and we have opted to help lower income and to help less the further up the line one goes. It is important to point out and to stress that even with these trade-offs, fully 80 percent of all Medicare beneficiaries will spend less than the initial benefit limit or will have access to low-income protections and therefore will have no gap in the coverage. The percentage, again, is 80 percent. In the jargon of Washington, DC--and I know our constituents get tired of hearing Washington talk; we need to talk Iowa talk, but for my colleagues, that means 80 percent of the seniors in America under our plan will not be touched by what we call the doughnut hole. For the 20 percent of enrollees exposed to this gap in coverage, our bill requires that Medicare drug plans pass negotiated drug discounts along to Medicare enrollees all the time. All of those enrollees will be able to purchase drugs at a reduced price. Everyone is going to benefit from this legislation. Our bill may include this small doughnut hole, but proposals from the other side of the aisle seem to me to include a black hole since this drug benefit ends in 2010, leaving Medicare enrollees without any drug benefit whatever. Again, when we talk about legislation, if it comes to an end, we say that is a sunset. It is my understanding that the proposal from the other side has a sunset; in other words, a time when the benefit will end unless Congress reenacts it. Seniors are not going to sunset. Seniors are going to continue to need prescription drugs after this other proposal sunsets. One of the disputes is lack of understanding of our benefit delivery system. I heard my colleagues describe how we arrived at the approach to delivering drugs, as the tripartisan bill does. That reminds me, I want to say another thing because I think we forget how things get done. No Republican plan can get through the Senate. No Democratic plan can get through the Senate. A Republican plan can get through the House of Representatives because that is the way that system runs and the majority party rules with an iron hand. There is a Republican plan that got through the House. There is a Democrat plan in the House that obviously did not pass the House. We got the President's program that is obviously a Republican program because we have a Republican President. We have a Senate Democrat plan. We do not have a Senate Republican plan, but we have a Senate bipartisan plan. That is the only way we will get anything through the Senate, and that is a bipartisan approach. Getting back to how did we settle upon our delivery system for the prescription drug program for Medicare, we have been working for several months, to my chagrin, too many months, with the CBO to work through policy and what a certain policy would cost and changing policy--not basic policy but fine-tuning our policy from time to time to fit the realities of what CBO says. The CBO is important in this process. It is an independent, nonpartisan congressional staff office that analyzes legislative proposals for costs on the one hand and workability on the other hand. The CBO does not have any ax to grind. And they had better not. And we in Congress rely on that. They are the bible for a lot of decisions made, particularly budget decisions. According to CBO, spending on drugs for seniors over the next decade will grow at an astronomical rate. Over the next 10 years, there will be a steep rise in the price of pharmaceuticals. The CBO said the only way to contain the cost of a drug benefit is to ensure that drugs are delivered efficiently. In turn, the CBO says the only way to have drugs delivered efficiently is to have true competition, two or more organizations competing with the drug prices to get the prices down, as opposed to the other program I am talking about that relies on a government-run program. I quote the CBO that a government-run program will not bring down the price of drugs but one where there is true competition. We have a delivery system based on true competition. According to CBO, this requires that we must use private plans that assume a reasonable degree of risk; in other words, some risk on the organization to make sure it is efficiently run, to see there is competition, as opposed to a government-run program where risk in pricing of drugs is assumed by the government. What I mean by risk is, if they are efficient, they will make money and, if not, they will lose money. If they drive hard bargains with drug manufacturers, they will make money. If not, they will lose money. A limited degree of risk is all the tripartisan bill requires. People will ask, What sort of risk do you have if there is going to be a 75- percent subsidy for the Medicare prescription drug plans in our program? Because the Federal Government is protecting that 75 percent. We are told by CBO that at 25-percent risk we will be assured this level of risk is high enough to promote sufficient drug coverage and low enough to assure that plans participate in a stable, reliable drug system. It is the optimal level of risk. Insurers who are so unhappy with the House bill in 2000 have indicated they can live with the level of risk in our bill. They would be crazy not to participate. Our opponents are saying if the Federal Government lays $340 billion on the table, by far the largest entitlement expansion ever, plans will not participate. Where do our opponents get that? Flatout, according to the CBO, they are wrong. CBO says the insurers themselves say they are wrong. Most importantly, common sense says they are wrong. Unfortunately for our opponents, no one has invented a prescription drug that gives you common sense. We need to make the dollars we have go as far as we can. Whatever our individual thoughts, the CBO in this case is an arbiter, and they tell us our bill, the 21st Century Act, does that; in other words, it keeps the cost of medicine down, guarantees the participation of those agencies to deliver the drugs. Now, I know the Presiding Officer is from a rural State. I will address the question of whether the system the bill will establish will work in rural areas. Even if you are from Atlanta, there are a lot of rural areas in Georgia, so you ought to be asking, will we take care of rural areas? If you are in Montana or North Dakota, it is probably even more of a concern. I represent a rural State--maybe not the most rural State--and I would not support a Medicare drug bill that would put the rural parts of our Nation in jeopardy of not receiving equal access to prescription drugs under the same conditions as people in New York City. Our bill guarantees that every Medicare enrollee will have a choice of at least two Medicare drug plans, a minimum of two. The Government will establish service areas for plans to offer Medicare drug benefits. These service areas must be the size of a State at a minimum. They can be multistate but at least the size of a State. I stress that because you hear from the other side that plans will cherry-pick. You are not going to cherry-pick in the State of Iowa. You have to serve Des Moines just as you have to serve Armstrong, IA. Another point I want to make concerns pharmacists. Pharmacists play a very important role in prescription drug programs for seniors. Not only that, but as we have increasing use of drugs, and seniors taking multiple prescriptions, and the interaction of those, pharmacists are going to play an even more important role. They are going to be needed to protect--I don't know whether the word ``protect'' is right--but oversee, to some extent, when prescription drugs are given, how they interact. Maybe a doctor won't be on top of that. You might have a person who gets a prescription from two different doctors. Are they going to interact? The focal point for that determination might be the pharmacist--ought to be the pharmacist, and will be. So there is going to be an increasing need for pharmacists. Another thing I want to point out about the legislation is our assurance that Medicare beneficiaries will have convenient access to a brick-and-mortar pharmacy. The standards outlining what is convenient will be determined by our Department of HHS. Furthermore, in developing convenient access standards, our Department is explicitly required to take into account Medicare beneficiaries in rural areas. We ought to consider consumer protection, so I will address that as our bill does. Our drug benefit proposal puts into place important consumer protections for our Medicare enrollees. By the way, one of the things I didn't say that the CBO said about ours, we will have 99 percent of the seniors taking advantage of this program. That is how high the enrollment is going to be. First, in regard to consumer protections, all Medicare drug plans will be put through a comprehensive approval process to ensure they will deliver quality drug benefits to seniors. The new Medicare competitive agency in the Federal Department of Health and Human Services will have to review and approve the application of the plan before that plan can participate in the program. Standardized information on each drug plan will be sent by Health and Human Services to all Medicare enrollees. If a Medicare drug plan wants to advertise for enrollees, all marketing material will have to be approved by HHS. All seniors will have access to necessary prescription drugs. Health and Human Services will determine therapeutic classes of drugs. Medicare drug plans will be required to offer drugs in all therapeutic classes. If Medicare drug plans use formularies, they must establish a pharmacy and therapeutic committee to develop and review the formulary. Physicians and pharmacists must be represented on that committee. The P and T Committee shall base formulary decisions on scientific evidence and on standards of practice. What I have outlined is a few ways in which our bill differs from Senator Daschle's bill. I would like to add a few more ways in which our bill differs as well. First, Senator Daschle's plan is overly bureaucratic and I think extravagant, therefore it does nothing to curtail or even slow skyrocketing prescription drug costs. Why pass a bill if we are not going to do something to put the damper on the rapidly rising increases in the cost of drugs? That is why it is essential that any new prescription drug benefit contain proper cost management controls that moderate growth in price while ensuring Medicare enrollees' access to prescription drugs. While guaranteeing prescription drug coverage for all seniors, our proposal imposes reasonable cost-sharing obligations on beneficiaries and does promote competition among prescription drug plans which, as I have said so many times, will lead to a better overall effect on drug prices. That is a benefit to Medicare beneficiaries and to all Americans who are not even yet eligible for the Medicare Program because of age. We have flexibility in Medicare drug benefits that we do not want to overlook because under Senator Daschle's plan, seniors face fixed copayments that, in many instances, mean they will actually pay more for drugs than they would under a system such as the one we propose, that gives prescription drug plans more flexibility to offer lower cost copayments. I suggest that before the plan is finally put before the Senate by the other side--I will bet they will have that fixed because they have looked at our plan and they know we are more fair, particularly to low- income seniors, with our flexible drug benefit than what their fixed costs are. Senator Daschle also writes into law the monthly premium seniors will pay for a drug benefit. But what happens if a plan has been efficient and wants to attract more Medicare enrollees by lowering their premium below that of other plans? Under Senator Daschle's approach, Congress would have to pass legislation for the plan to lower the premium. If you look at most of the problems we have with Medicare developing over the last 35 years, probably those coming directly from reimbursement of various health care providers, you will find that micromanagement of the Medicare Program by the Congress has led to most of the problems we have. So to the extent that we can have the marketplace be the disciplinarian in premium prices, copayments, in deductibles where catastrophic kicks in, et cetera, et cetera, we ought to allow that to happen. We ought to look at what has benefited us as Senators and 10 million Federal employees or retirees or their families. You will see that competition among several of the Federal employee health benefits plans--they have, I don't know how many dozens of plans, but at least a couple of dozen plans, with competition among those plans, flexibility in those plans, the tailoring in those plans for particular interest groups of people in Federal employment, including Senators, they have been able to keep down the price of our Federal programs. That is directly related to the flexibility in the plans and the competition. Why would you want to write into your plan a certain monthly premium? Our plan then gives the freedom to offer premiums, copayments, and deductibles that are flexible, saving seniors money, or gives them more money. We also have an enhanced Medicare fee-for-service option that is an improved and strengthened Medicare option--not one that seniors would have to take. If they are satisfied with the 1965 model, they can keep it with or without prescription drugs. If they would like to have a new and improved 21st century Medicare Program with or without prescription drugs--because prescription drugs are optional on all of these plans-- we would give them the opportunity to do that. I will explain that. None of the other proposals on the table do any of this. It creates the enhanced option. It is within the Medicare Program. It is a fee- for-service program. Let me be clear about the fact that it is delivered by the Federal Government just like Medicare. There has been some confusion on that point. It ought to be easily understood. We think it is an option that many beneficiaries might find attractive. But the beauty of it is that we are not going to make that choice for them. It is voluntary. It is their choice. Here is the bottom line. Beneficiaries, such as Medicare, have a right to keep it--keep it until you die. It is their choice. In fact, even future beneficiaries will always have this same choice under our plan--20-50. If you are 65 years old and you want the 1965 model of Medicare, choose it. But if it is 20-50, you are 65 years old and you want a 21st century model of Medicare, then you can choose the enhanced option. I want to make it very clear that there is no sunset of the existing Medicare benefit package in our bill--like Senator Daschle's sunset in his drug benefit. We know on our side that senior citizens aren't going to sunset. They are going to be around forever. In addition, Medicare enrollees can enroll in the Medicare drug benefit, whether they are in traditional Medicare fee-for-service, enhanced Medicare fee-for-service, or the Medicare+Choice. Here is the choice that our bill offers seniors, if they want to take it. Existing Medicare Part A and Part B focus on the coverage of routine, predictable medical expenses. But the enhanced option, which we are going to call Part E, focuses on preventive care and protection against devastating costs of serious illness. If beneficiaries prefer what they have now, for the third time, I say they can keep it. But if they like the idea of a better prevention and better insurance when they need it, then, for the third time, I say they can have the new, enhanced version. On the subject of prevention, I would like to explain that we put a lot of emphasis on prevention. Medicare's current policy makes beneficiaries reluctant to seek out preventive services that may identify health problems and prevent more expensive care later. Part of that is because they have to pay a deductible. Unlike many private health plans, Medicare today subjects people in this Part B to usually a 20-percent deductible. For those who would elect the new, enhanced option, preventive benefits would not be subject to any deductible, or to any coinsurance. That is an example of moving Medicare from 1965 to the 21st century. I would like to highlight another improvement of enhanced option. Medicare today has no limit on a beneficiary's expenses in a year, creating the potential for crippling costs in the event of a serious illness and maybe impoverishing some families. The bill would limit beneficiaries' exposure then to out-of-pocket costs for Medicare coverage services other than drugs to $6,000 per year. Beyond that amount, Medicare would pay 100 percent of any costs incurred by the beneficiaries. In a given year, it is estimated that 2 to 3 percent of beneficiaries may have costs that reach above that level. Of course, if one looks at beneficiaries over multiple years, the likelihood of such expenses increases accordingly. If beneficiaries want the peace of mind that comes from such protection against serious illnesses, then for a fourth time, I say they have that choice. Another issue our enhanced option addresses is the Medicare deductible structure. Under current law, the Part A deductible will be extremely high in the year 2005--$920 every time you go to the hospital--while the Part B deductible is going to stay at $100 per year. The enhanced option includes a unified deductible of $300 per year for all services. Medicare's irrational two-deductible system is unheard of in the private insurance industry today. Beneficiaries are used to single deductibles from their prior employer-based plan. If they like what they had while they were working, then they have the option, as I say for the fifth time, of taking the enhanced option within Medicare. Here is another benefit from the enhanced option. Because Medicare benefits have so many holes in contrast to private insurance, most beneficiaries are forced to carry supplemental coverage to fill in the gap. We call that Medigap. Reducing those gaps will make such supplemental coverage less necessary, but, more importantly, if they want to have it more affordable for the beneficiaries, our bill establishes such new more affordable Medigap plans. By the way, those employers who offer supplemental coverage will also find it less costly to do so under the enhanced option since it will have fewer holes to fill. Is the enhanced option a better deal? From an actuarial standpoint, the answer is definitely yes. The Congressional Budget Office tells us it is a more valuable benefit, largely because of the serious illness protections that it offers our seniors. But not all seniors are actuaries. So we are leaving it up to the seniors to decide which of the two plans is a better deal. We make a few changes also in Medicare+Choice improvement. Starting in 2005, our bill takes modest steps to improve the Medicare+Choice Program. Medicare+Choice has been a big disappointment in my home State of Iowa. Only 1 county out of 99 has it. But seniors elsewhere-- particularly in the larger cities and in the Sun Belt--rely on it. Our proposal keeps that option alive without throwing money at the program as we have so much in the past. Instead, we create a competitive bidding system under which Medicare+Choice plans will compete with each other but not with the Medicare fee-for-service programs for beneficiaries. I want to emphasize that no one in the fee-for-service Medicare will be affected by this change. We have made this change because today's bureaucratic pricing system sets arbitrary and inaccurate rates, and that discourages Medicare+Choice plans from participating. Our approach to Medicare+Choice is based on a bipartisan model embraced by the Clinton administration, and will result in fairer and more accurate payments to Medicare+Choice. Before I give up the floor, I would like to comment for a short period of time on some statements that were made yesterday regarding our tripartisan 21st Century Medicare Act by people on the other side of the aisle. I think in some ways the facts were not given straight. I would like to correct the Record for the benefit of my colleagues. Yesterday, there was reference made to an assets test as if there is something wrong with it. There is nothing wrong with it. Public policy for low-income Medicare populations has included assets tests since 1987. Our policy here in the Congress for low-income Medicare populations has included an assets test since 1987. I said it twice so people know that it is not something new being thrown out there. Specifically, assets test policies were first included in Federal policy in the Omnibus Budget Reconciliation Act of 1986, which passed the Senate by a vote of 88 to 7 with help from people who, yesterday, were denigrating our plan, and voted for the 1986 plan. Our bill includes an assets test similar to the 1999 President Clinton--remember he was a Democrat--Medicare bill. Under current law, States have the flexibility to waive this assets test. Nine States and the District of Columbia have chosen to waive the test. Our proposal allows assets test flexibility, found in current law, to be retained in the Medicare drug benefit program. The assets test ensures that seniors who need assistance the most are provided the most protection. Also, let me clarify that current law specifically excludes from the assets test a person's home and the land the home is on, household goods, personal effects, including automobiles, the value of any burial space, and other essential property. The people attacking our plan also attacked our plan yesterday because of the flexibility we have in it. So I want to respond to that. Medicare enrollees deserve a quality drug benefit that meets their individual needs. The Daschle-Graham proposal does not allow any variation in cost sharing or premiums and is a one-size-fits-all plan which will fail to adapt to the needs of seniors, as we are now so far behind with the 1965 plan that was adopted in 1965. It is also important that Medicare enrollees get quality drug benefits at the lowest possible price. The tripartisan plan strikes the right balance to ensure Medicare enrollees have access to prescription drugs they need at the best possible price. Anyone wanting to offer a Medicare drug benefit will be required to receive the approval of Health and Human Services. This is not a checkoff approval process. There will be intensive interaction between any plan and the Government to ensure that Medicare enrollees are getting what they are paying for. There are five separate places in our bill where the administrator is required to certify that a plan meets strict standards of actuarial equivalence. The plans will not be determining what is the equivalent standard benefit. The U.S. Government is going to make that determination. If a plan is not equivalent to the standard benefit, it is obvious the bid will be rejected, and should be. In fact, the Congressional Budget Office has told us our standards of equivalence are strict enough that Medicare drug plans will have little room varying in premiums or cost sharing. In their words, that little room to vary is critical to the success of a Medicare prescription drug benefit and indicates how the tripartisan bill has found the right policy in Government assumption of risk--just enough--to make sure there is competition out there, to make sure plans are run efficiently, to make sure there is competition to drive down drug prices. While the Democrat plan claims to include competition, I do not understand how Medicare plans will compete if they are required to offer identical premiums and identical cost sharing. If drug plans wanted to lower their cost sharing or lower their premiums in order to attract Medicare enrollees, the only way it could be done is for Congress to pass more legislation. The tripartisan bill ensures the innovations of the private sector are not stifled by micromanagement, one-size-fits-all, Government-run drug benefits. There is guaranteed access to the plan. We have had Members of the other side apparently unaware that the tripartisan bill guarantees access provisions. The tripartisan bill guarantees two Medicare prescription drug plans to every Medicare enrollee. If the enrollee lives in an area where there is Medicare+Choice, the Medicare+Choice plans will not count towards the two-plan minimum. The Medicare plans are not determining their own service areas. The Government will determine service areas, and the service areas must be at a minimum the size of a State. The Government will be covering 75 percent of the value of the Medicare drug benefits, equalling $340 billion over the next 10 years. So anyone who says the plans will not participate is simply not operating with any common sense--$340 billion of encouragement to participate. This is a clear attempt, and a failing attempt, I believe, to paint the tripartisan bill not as what it is--something that five Senators have worked on for a year--but to paint it, instead, as the House Republican bill, which it is not. Lastly, we have been attacked from the other side about the tripartisan's policy toward employers. The tripartisan bill gives employers a 100-percent subsidy to offer drug benefits to their retirees, as long as the retiree plan is, at a minimum, as generous as the standard Medicare benefit. In contrast to the tripartisan plan, the Democrat plan only gives employers a two-thirds subsidy to retain their retiree prescription drug plan. Listen, from the other side you heard that our plan does not take into consideration protecting retirees who already have a corporate retirement plan with health benefits in it, when we pay 100 percent of that. And what does the other side pay? Sixty-seven percent. The other side's plan forces a standard benefit on all Medicare beneficiaries. Will employers be forced to change their entire drug benefit structure in order to obtain the two-thirds subsidy? This could result in employers being forced to charge higher drug expenses for their retirees in order to receive the subsidy.

Mr. GRASSLEY. I will be done in 2 minutes.

Mr. GRASSLEY. Currently, employers receive no assistance whatsoever in paying the drug costs for their retirees. Our 100-percent subsidy plan will allow employers who are offering a drug benefit at least as generous as the standard benefit to receive the full value of the standard benefit. Again, our policy targets dollars where they might do the most good. And an employer subsidy recognizes the value of employer-sponsored retiree drug benefits. In closing, I will simply say something I said when I started. In the next 3 or 4 days, there will be a lot of debate on this subject. It is very important to have a lot of debate on this subject. You are going to find strong advocates for plans where the advocates have great faith in Government-run price programs versus whether or not you ought to have competition from the private sector. Remember, CBO says that a Government-run program is going to raise the price of prescription drugs. The alternative is to have competition. The Congressional Budget Office says that is going to reduce the price of prescription drugs. We should be in the business of having public policy that is going to give seniors the best medical care, including prescription drugs, based on the least cost to the Government, as well as the least cost to the senior citizen. I yield the floor and I thank my colleagues.

Mr. GRASSLEY. Mr. President, I do not support Senator Stabenow's amendment No. 4305 to S. 812 to amend section 1927 of the Social Security Act. As my colleague Senator Nickles pointed out during debate, this amendment raises important policy and budgetary questions that have not yet been considered by the Senate during a hearing or a committee mark-up. The far-reaching nature of this amendment deserves serious consideration by Congress prior to a vote. Additionally, at present there are pending legal decisions related to matters addressed in this amendment, and I believe it is worthwhile to await the decision of the courts prior to enactment of this amendment. For these reasons, I do not support this amendment, but I reserve the right to re-evaluate the matter at a later date.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am surely glad that this debate has begun. It is too bad we could not have started the debate on this bill on Monday or Tuesday of this week when the majority leader led us to believe that we would be doing nothing but prescription drugs until we got it done. I am glad that we now have Senator Graham's alternative before us. I thank Senator Hatch, who took the position as manager, while I was on the CNN program just a few minutes ago, to introduce the tripartisan bill on my behalf. That bill is a comprehensive prescription drug bill that represents a year of hard work by dedicated members of the Finance Committee, the committee that has jurisdiction over Medicare. We have Senator Graham's bill that you have heard about tonight. Then we have this tripartisan bill. People wonder what the term ``tripartisan'' means. It means three Republicans, one Democrat, and one Independent in the Senate, but it also implies bipartisanship, or across-party cooperation that must be done to get any bill passed in the Senate. Our legislation is called the 21st Century Medicare Act. It makes essential improvements to Medicare by adding the comprehensive prescription drug benefits, and a new Medicare fee-for-service option to the 1965 program. These are all first improvements in Medicare since it was introduced in 1965. As I indicated to you, I have been honored to work with a top-notch group of Senators on this bill. That tripartisan group is Olympia Snowe, a Republican; John Breaux, a Democrat; Jim Jeffords, an Independent; and Orrin Hatch, a Republican. The group has dedicated countless hours to this effort. I must express my disappointment that the Senate Finance Committee has not had an opportunity to consider legislation as part of the committee process. I trust that Senator Graham of Florida will feel the same way. However, the bottom line is America's seniors have waited too long--and too long already--for Medicare prescription drug coverage. The House has acted in their fashion. The Senate must act as well. We cannot afford to waste a single day. I look forward to debating this important issue over the next few days and hope that the same bipartisan spirit of cooperation and compromise that guided the tripartisan group over the last year to write this bill will guide all Senators in this Chamber to an agreement that will give long overdue help to our seniors. Since the tripartisan bill is now introduced, since we have the Democrat version, and Senator Graham's bill is introduced, and since there is some misunderstanding of the differences between the two, I will take just a little bit of time to go over those. I also will take just a little bit of time to express some differences between the bill that passed the House of Representatives because some people have alluded to that bill as something just exactly like the tripartisan bill, which it is not. In regard to differences between Senator Graham's proposal and the tripartisan proposal that I have offered, the first would be cost. The sheer magnitude of Federal spending in the Senate Democrat bill-- an amount that is obscured by a sunset provision that kills the benefit in 2010--threatens Medicare's long-term stability. As such, the Senate Democrat bill gives seniors temporary help, not a permanent entitlement. By contrast, the Congressional Budget Office official estimate concluded that the tripartisan 21st Century Medicare Act totals $370 billion over 10 years, a figure that guarantees permanent, affordable drug coverage without breaking the Medicare bank. There is also the issue of choice that separates the tripartisan plan from the Democrat plan. The Democrat plan relies on the Government to pick one standard prescription drug plan for over 40 million seniors with Medicare. The one-size-fits-all approach means seniors cannot shop for a prescription drug plan that best suits their needs. Under the tripartisan 21st Century Medicare Act, seniors are guaranteed to have at least two competing prescription drug plans in their community, even in rural areas, using local pharmacies as well. Seniors will have the choice of picking plans on the basis of cost, benefits, and quality. All plans will be required to meet Federal quality standards and to provide a standard benefit package, or its actuarial equivalent, including a $3,700 cap on out-of-pocket drug expenses for seniors. There is a difference in drug pricing. Because the Democrat plan is overly bureaucratic and excessively generous, that plan does nothing to curtail or even slow skyrocketing prescription drug costs. That is why it is essential that any new prescription drug benefit contain cost management controls that moderate growth in price. While guaranteeing a comprehensive drug coverage for all citizens, the tripartisan 21st Century Medicare Act imposes reasonable cost- sharing obligations on beneficiaries and promotes competition among prescription drug plans. And with competition being promoted in the bill, that then leads to a better overall effect on drug prices. And that, again, is according to the nonpartisan Congressional Budget Office that does policy analysis and scoring for the Senate. The other issue is affordability, affordability for seniors. Under the Senate Democrat plan, seniors face fixed copayment amounts that, in many instances, mean they will actually pay more for many of the most commonly prescribed drugs than they would under a system that gives prescription drug plans more flexibility to offer lower cost copayments. That flexibility is a feature of the tripartisan 21st Century Medicare Act because it gives plans the freedom to offer copayments and deductibles that save seniors more money. Moreover, the tripartisan proposal has a lower average premium than the Democrat plan, and that would be $24. Again, this is according to a Congressional Budget Office estimate. We have Medicare enhancements in the tripartisan bill that the Senate Democrat plan does not have because that plan leaves current Medicare as it is and simply dumps a massive entitlement expansion, which would be the prescription drug plan, into the old 1965 model. The tripartisan 21st Century Medicare Act takes long overdue steps to strengthen and improve Medicare's basic benefit package. In addition to adding prescription drug coverage, the bill offers seniors a new enhanced option, including catastrophic protection and free--let me emphasize, free--preventive care; in other words, adopting the principle that an ounce of prevention is worth a pound of cure. This entire enhanced option is voluntary. If seniors like what they have had since 1965, they do not have to sweat it. They do not have to do it. They can keep what they have. Even 50 years from now they will still have that same choice, but they can also have the enhanced coverage as well. So it is voluntary. And Medicare, as we know it today, will always remain available to seniors who prefer to keep what they have, if they like it. Improvements are made to yet another coverage option. That coverage option exists today. Medicare+Choice plans are also included. Beneficiaries need not elect the enhanced option in order to have access to the drug benefit plan. I will finish, then, with a short description of why what the House of Representatives passed has nothing to do with the tripartisan plan. The tripartisan plan was adopted on principles and pricing and costs, the way the five of us decided to do it. For instance, the House bill has a higher average premium. This is according to the CBO estimate. The average premium under the House bill is $34 per month. The average premium under the tripartisan 21st Century Medicare Act is substantially more affordable, at just $24 per month. We have a much better benefit. The House bill limits the initial prescription drug benefit to $2,000 before exposing seniors to a gap in coverage. The tripartisan 21st Century Medicare Act basic drug benefit is better and is richer than that in the House bill. Seniors will have drug coverage under the tripartisan plan worth 50 percent of their drug spending up to $3,450 after the deductible is met, and that is $1,450 more than what the House bill offers, even in its initial benefit. We have greater protection for low-income seniors in this Senate version. The tripartisan 21st Century Medicare Act steps in to give more help to low-income seniors where the House bill does not. It provides full assistance with premiums and substantial assistance with cost sharing for seniors below 135 percent of poverty with no gaps in coverage. For seniors between 135 percent and 150 percent of poverty, assistance with premiums and cost sharing is provided on a sliding scale, also with no gaps in coverage. This critical additional coverage for our most vulnerable seniors is an important distinction that reflects the tripartisan commitment to universal, affordable drug coverage for all. And then, lastly, I will speak about our enhanced option to which I have already referred. The House bill leaves the 1960s-style Medicare largely as it is today. It does provide $30 billion in additional funds to Medicare providers, but it does little to strengthen or improve Medicare's basic benefit package. Rather than addressing provider payment issues, the tripartisan 21st Century Medicare Act addresses Medicare's benefit flaws. It offers seniors a voluntary enhanced option, including catastrophic protection, free preventive care, and better Medigap plans. The new option would be offered alongside current fee-for-service Medicare and a strengthened Medicare+Choice. Seniors can keep what they have if they like it or choose the new option. In all three settings, access to affordable prescription drug coverage would be guaranteed. I just mention the difference, that the House bill does not have a new and improved and modernized Medicare option that we have in the tripartisan bill. (Mr. Jeffords assumed the Chair.)

Mr. GRASSLEY. Since the distinguished Senator from Vermont has now come to the chair to be the Presiding Officer of the Senate, it gives me an opportunity to say that this provision in the tripartisan bill, of improving Medicare, bringing Medicare from a 1965 model to a 21st century model, improving it beyond the prescription drug provisions, was very much a concern of the Senator from Vermont, the Independent member of the Senate, Mr. Jeffords. I thank him very much for his contribution to that. It really has probably done as much for Medicare as the prescription drug provisions will, as we look to the day when we have baby boomers going into transition from their employer's health plans to Medicare. There will be a smooth transition if they choose the enhanced option; whereas all the other plans, including the Republican plan in the House of Representatives, including even the President's plan, Medicare will still be a 1965 model. And for baby boomers going from their modernized employer's health plan to the 1965 model of Medicare, if that is the only choice they had, it would not be a very good day for those baby boomers going into retirement. It has been such a pleasure to work with Senator Jeffords on this whole package, but most importantly, to have his leadership on this part that deals with the enhanced option, the new and improved and strengthened Medicare.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today I am introducing legislation to address a problem in the way the Department of Veterans Affairs, VA, determines a veteran's eligibility category for health care, which results in an unfair misclassification of many veterans who are farmers. Veterans who do not have a service-connected disability but who are unable to defray the cost of necessary health care are placed in priority group 5 and are able to receive health care services from the VA at no cost to the veteran. In order to determine whether a veteran falls below the means test threshold and is thus eligible to enroll in priority group 5, the VA looks at the net worth of a veteran's estate, including any real property owned by the veteran or the veteran's spouse. When you add in the value of farm land, the net worth of many farmer-veterans can appear high on paper even though they may in fact have little or no income. The current means test threshold for net worth is set at $80,000. Given the current average value of farm land in Iowa of $1,857, a farm in Iowa worth $80,000 would average a barely viable 44 acres. A more viable 80 acre farm would be worth $148,560 on average. In other words, almost any Iowa farm large enough to be viable would exceed the current means test threshold. Under the current law, when the value of a veteran's estate exceeds the means test threshold, the veteran becomes ineligible to enroll in priority group 5 if the VA determines that ``it is reasonable that some part of the corpus of such estates be consumed for the veteran's maintenance.'' I don't think it is ever ``reasonable'' that a veteran, who has little or no income or other assets, be asked to sell a portion of his family farm in order to pay his medical bills. Nevertheless, because of the way the law currently reads, these land-rich but cash- poor veterans are often placed in priority group 7, meaning they may only enroll in VA health care if they agree to pay co-payments to the VA and then only on a space-available and funds-available basis. This problem was first brought to my attention by one of my constituents, Larry Sundall, who is a county veterans service officer in Emmet County, IA. In response, I convened a meeting in Des Moines in April of 2000, which was attended by county veterans service officers and State veterans affairs officers from Iowa, Minnesota, Nebraska, and South Dakota as well as VA staff. I heard many similar stories about low-income veterans who were in the same boat. In September of that year, I introduced legislation to fix this problem by excluding the value of real property from the calculation of the net worth of a veteran's estate in determining a veteran's eligibility category for health care. Unfortunately, my bill was not acted on before the end of the 106th Congress. In the first session of the 107th Congress, an unsuccessful attempt was made to address this issue in the context of legislation to make improvements to various veterans' programs. I am now reintroducing my legislation in hopes of fixing this problem once and for all. In addition, my bill makes some adjustments to the way the VA determines the attributable income of a veteran that will make the process easier for both the VA and the veteran. The VA currently has the authority to verify a veteran's income using a quick and efficient computer process that matches VA records with data from the IRS and other Federal agencies. However, the data for the prior year is often unavailable making it impossible for the VA to perform this income verification for the majority of veterans at the time when the data is needed. My bill would allow the VA to use the data available for the year preceding the previous year to determine the attributable income of a veteran. This would not only help the VA to more easily and more accurately determine a veteran's income, it would also allow a veteran to check a box to let the VA use this procedure to gather the veteran's income data without the veteran having to dig through his financial records and fill out the information on a form. It can be frustrating for a veteran to have to fill out the paperwork necessary to apply for benefits and this change would make the application process easier for both the veteran and the VA. My bill would correct a fundamental unfairness that adversely affects veterans who are farmers while making the application process for health benefits simpler for veterans and more efficient for the VA. In fact, taken together, these important reforms would actually save taxpayer dollars. According to data provided to me by the VA, over $8.7 million would be saved in fiscal year 2003 alone. This legislation is a win-win proposition and I would urge my colleagues to join me in supporting the swift passage of this measure. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today I am introducing legislation to address a problem in the way the Department of Veterans Affairs, VA, determines a veteran's eligibility category for health care, which results in an unfair misclassification of many veterans who are farmers. Veterans who do not have a service-connected disability but who are unable to defray the cost of necessary health care are placed in priority group 5 and are able to receive health care services from the VA at no cost to the veteran. In order to determine whether a veteran falls below the means test threshold and is thus eligible to enroll in priority group 5, the VA looks at the net worth of a veteran's estate, including any real property owned by the veteran or the veteran's spouse. When you add in the value of farm land, the net worth of many farmer-veterans can appear high on paper even though they may in fact have little or no income. The current means test threshold for net worth is set at $80,000. Given the current average value of farm land in Iowa of $1,857, a farm in Iowa worth $80,000 would average a barely viable 44 acres. A more viable 80 acre farm would be worth $148,560 on average. In other words, almost any Iowa farm large enough to be viable would exceed the current means test threshold. Under the current law, when the value of a veteran's estate exceeds the means test threshold, the veteran becomes ineligible to enroll in priority group 5 if the VA determines that ``it is reasonable that some part of the corpus of such estates be consumed for the veteran's maintenance.'' I don't think it is ever ``reasonable'' that a veteran, who has little or no income or other assets, be asked to sell a portion of his family farm in order to pay his medical bills. Nevertheless, because of the way the law currently reads, these land-rich but cash- poor veterans are often placed in priority group 7, meaning they may only enroll in VA health care if they agree to pay co-payments to the VA and then only on a space-available and funds-available basis. This problem was first brought to my attention by one of my constituents, Larry Sundall, who is a county veterans service officer in Emmet County, IA. In response, I convened a meeting in Des Moines in April of 2000, which was attended by county veterans service officers and State veterans affairs officers from Iowa, Minnesota, Nebraska, and South Dakota as well as VA staff. I heard many similar stories about low-income veterans who were in the same boat. In September of that year, I introduced legislation to fix this problem by excluding the value of real property from the calculation of the net worth of a veteran's estate in determining a veteran's eligibility category for health care. Unfortunately, my bill was not acted on before the end of the 106th Congress. In the first session of the 107th Congress, an unsuccessful attempt was made to address this issue in the context of legislation to make improvements to various veterans' programs. I am now reintroducing my legislation in hopes of fixing this problem once and for all. In addition, my bill makes some adjustments to the way the VA determines the attributable income of a veteran that will make the process easier for both the VA and the veteran. The VA currently has the authority to verify a veteran's income using a quick and efficient computer process that matches VA records with data from the IRS and other Federal agencies. However, the data for the prior year is often unavailable making it impossible for the VA to perform this income verification for the majority of veterans at the time when the data is needed. My bill would allow the VA to use the data available for the year preceding the previous year to determine the attributable income of a veteran. This would not only help the VA to more easily and more accurately determine a veteran's income, it would also allow a veteran to check a box to let the VA use this procedure to gather the veteran's income data without the veteran having to dig through his financial records and fill out the information on a form. It can be frustrating for a veteran to have to fill out the paperwork necessary to apply for benefits and this change would make the application process easier for both the veteran and the VA. My bill would correct a fundamental unfairness that adversely affects veterans who are farmers while making the application process for health benefits simpler for veterans and more efficient for the VA. In fact, taken together, these important reforms would actually save taxpayer dollars. According to data provided to me by the VA, over $8.7 million would be saved in fiscal year 2003 alone. This legislation is a win-win proposition and I would urge my colleagues to join me in supporting the swift passage of this measure. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. No.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, Medicare has not kept pace with the improvements in health care since its inception in 1965. It was a plan that was put together based on the practice of medicine in 1965, which you might expect to be natural for any program written at that particular time. At that particular time, the practice of medicine was to put almost anybody in the hospital who had anything very serious wrong with them. Today, the practice of medicine is to keep people out of the hospital environment as much as we can. Prescription drugs are very much a part of the medical plan to keep people out of hospitals. Back in 1965, the cost of prescription drugs as part of the total cost of medicine was about 1 percent. Today the practice of medicine and the cost of medicine related to the total practice of medicine is about 10, 11 percent. So quite obviously, if Medicare is to be brought into the 21st century, we have to modernize it by including a prescription drug program for everybody, not just like it has been, prescription drugs for people who are in the hospital, but once you leave the hospital, no prescription drugs. We have assumed a responsibility, some of us. I think maybe all 100 Senators agree on this issue, although they may not agree on how to do it, but we have all come to the conclusion that if you are going to strengthen and improve Medicare for the 21st century, Medicare must include a prescription drug program. Several of us in this body--Senators Breaux, Jeffords, Snowe, and Hatch, and this Senator--have introduced a plan that we call the 21st Century Medicare Act. To cite the most obvious example of Medicare being outdated, many conditions that used to be treated in the hospital are now treated with prescription drugs. For that reason, employer- sponsored health plans have changed with the times since 1965 and now cover prescription drugs. But Medicare does not cover prescription drugs outside of the hospital environment. Imagine that private health insurance for a long period of time has been including prescription drugs, but the Government-run Medicare Program is still back there in the 1960s, not covering prescription drugs. There is another example of the outdated Medicare Program. The practice of medicine has evolved to focus on preventive benefits, since everyone knows that an ounce of prevention is worth a pound of cure. For this reason, many private health plans have eliminated cost sharing for preventive benefits. But the 1960s Medicare plan, run by the Government, has not covered preventive medicine in the same way that private health plans have by eliminating cost sharing. We still have cost sharing in the 1960 plan. We ought to have Medicare come into the 21st century from the standpoint of eliminating cost sharing for preventive benefits in order to make sure that we emphasize an ounce of prevention weighed against a pound of cure. There is a third example of Medicare being out of step. For those of us with employer-sponsored coverage--and Members of the Senate would fall into that category--these programs provide a limit on how much we will have to spend out of pocket if we become seriously ill. Yet the 1965 brand of Government-run health program, Medicare, offers no such protection for our senior citizens. I will give three examples of the 1960-era, Government-run Medicare plan that does not give seniors adequate protection. Most important among all those is not having a prescription drug program. I could go on and on, but I would rather focus on the good news. There is a compromise that can be enacted into law this year so that we can finally get to the business of bringing Medicare into the 21st century; in other words, to have a Government-run Medicare Program for seniors that parallels the practice of medicine in the 21st century. This compromise, once again, is the only bipartisan compromise inside the beltway or outside the beltway. It is offered by Senators Breaux, Snowe, Jeffords, Hatch, and this Senator. I emphasize the importance of bipartisanship. Nothing can get through the Senate that is strictly Republican or strictly Democrat. The Senate was meant to function for the last 214 years based on the proposition that minority points of view would be protected and considered. Consequently, with no limit on debate, with efforts of people to stymie the process, it is very essential that we work from day 1, if you want to get anything done, in a bipartisan way to craft a bill. The five of us didn't just decide to do this. We started last summer to work on a prescription drug bill that could garner bipartisan support. We even announced about a year ago some basic principles, very broad principles, but we immediately got to work on filling in details. We had most of the details filled in back in March--not everything specific, but pretty much the principles and the details filled in. I suppose people are asking: Why just now has this bill been introduced? We have even had some of the legislative language written a while ago. Well, the reason we couldn't present our colleagues in the Senate this bipartisan approach was because we had to wait for the Congressional Budget Office to do the scoring and also, based upon preliminary scoring, some fine tuning on our part. It was just over the weekend that we, after we did our final fine tuning, got the final figures so that the bill could be put before the people of the country yesterday. I want to mention bipartisan because obviously the President--there is one person there, one party--when he puts forth a proposal, it is partisan. There is a House Republican proposal that was passed. That is obviously a partisan proposal. There was a House Democrat alternative. It was obviously a partisan proposal. And there is a Senate Democrat proposal that is obviously partisan. There is no Republican proposal, something that represents the point of view of just Republicans in the Senate. But there is this bipartisan plan put together by Senators Breaux, Snowe, Jeffords, Hatch, and myself that is the only bipartisan plan, and not hastily put together, as 1 year of work on it indicates. Consequently, it seems to me that if the Senate majority leader had allowed the Senate Finance Committee, which has jurisdiction, to work its will--and there is a majority of the Senate Finance Committee that is backing this proposal--we would have something out here for the Senate to consider, a bipartisan proposal. That doesn't prove it would get 60 votes, but it has to be further down the road to accomplishing that very important goal than any of the proposals here in Washington, DC. Any coverage will have to be a compromise, a beginning. It is not something perfect. I applaud Senator Baucus for seeking a reasonable compromise that can pass the Finance Committee. He has held a lot of rump sessions to discuss these things and understand them. But we have not had the opportunity to have the formal session to actually debate and amend and vote out a compromise. So after working on this for over a year, I can say this bill is that compromise. This level of total spending--$350 billion--is the level that can gain a majority of the votes in the Senate Finance Committee. In moving it up some to satisfy some people, or moving it down to a lower figure to satisfy some other people, it begins to lose votes from the high end or from the low end. Nobody, including me, considers this a perfect plan, but it is the only deal that can be struck, and it is the only bipartisan proposal in Washington, DC. I urge Senator Daschle to allow the Finance Committee to work on my bill. Let any Senator, in a free exchange and consideration in the Senate Finance Committee, offer amendments. That is the only way to have a product that can get 60 votes. As I have already written to Senator Daschle, to bypass the Senate Finance Committee when it can put out a bipartisan project is probably to kill any chance of a drug bill, and I hope he will reconsider. Let me be very candid. Drug spending by the senior population is exploding. The cost between the bill a year ago, when we started, until now--as I said, it evolved over 12 months--has gone up $70 billion, but not because we as Senators working on this bipartisan compromise decided we wanted to spend $70 billion more, no; that is the way the drug market is today. So if Senator Daschle wants an issue instead of a program for seniors, then we come back next year, and it doesn't matter who controls the Senate. We will come back next year and we are going to spend another $70 billion to $100 billion more. Why don't we decide to put that money into the program and save it by adopting something right now, when we know, based upon the projections of prescription drugs, what is going to happen. Let me suggest to you that the passage of strong legislation is going to be a damper on those exploding drug prices. So we have an opportunity and, if we miss it, it is going to cost Medicare a tremendous amount of money. Maybe $100 billion is a little bit high, but $70 billion to $80 billion to $90 billion would not be out of the realm of possibility. And we should also do it now so that baby boomers who have these good corporate plans they want to retire on are not shocked with a big difference between what 1965 Medicare is and what they have. They won't have to go through that if we have this bipartisan plan that gives seniors an option of having a new and improved and strengthened Medicare plan that is much closer to what they have now in the world of work. The baby boomers are going to start to retire in only 8 years. So a new drug benefit could be incredibly expensive and could even put the existing Medicare Program at risk. In light of these facts, the truth is that we cannot afford an extravagant benefit. If we get to work and get it done now, it is not going to be so expensive. The other main component of the bill that I have already made some reference to is a new, enhanced Medicare option, and it is not something seniors have to take if they don't want to. If they want to keep what they have right now, they can keep it, but if they want something a little closer to what they have in the private sector, they will have that available. I talked about Medicare or a prescription drug program, but there is a new and enhanced Medicare option that reflects 21st century health care. The enhanced option removes all cost sharing on preventive benefits. Just think. If somebody under the present Medicare has an opportunity to take a prostate cancer test, and they have a 20-percent copay, and they, say: ``I just cannot afford it,'' or ``I don't want to pay that copay,'' you are going to discourage that person from taking that test. And one out of three men might need an operation to catch it ahead of time so that cancer hasn't spread. No copay. That is more apt to be. That is an ounce of prevention worth a pound of cure. It brings Medicare into the 21st century. It adds protection against devastating costs due to serious illness. It features a single deductible of $300 and a rational cost sharing rather than the irrational cost sharing in the existing fee-for-service system. It offers new, cheaper Medigap options. And with the improved coverage, beneficiaries might decide they don't need to buy Medigap at all. This would create a tremendous savings for them and, potentially, for Medicare. The enhanced options resemble what beneficiaries had when they were still working, and they might decide to take it. But this is all entirely voluntary. We don't say to a single senior citizen in America that they have to do this. It is their choice. If they like what they already have, what has been on the books since 1965, they can have it. The cost of our reform provisions--this new and improved and enhanced Medicare--is only $30 billion over 10 years. Now, the AARP held a news conference today. Everyone around here knows that Senator Daschle's partisan approach cannot lead to 60 votes and can only lead to deadlock. Failure is not acceptable to the people of Iowa and it is not acceptable to me. Let me comment on the substance of my bill, the 21st Century Medicare Act. The drug benefit we offer is a voluntary benefit with affordable premiums of $24 a month. Unlike some proposals, it will provide drugs in a cost-effective manner, which is crucial. It will protect all seniors with drug costs, with special protections for low-income beneficiaries and those who incur very high costs. By law, at least two plans will be available everywhere in America, including rural areas, which is so important to me. The Congressional Budget Office tells me that virtually all beneficiaries will find this drug benefit a good deal and will elect to take it. In fact, when you hear people demanding that ``Cadillac'' drug coverage be added to Medicare, what that tells you is that person doesn't really want legislation to pass. They just want an issue on which to campaign. I have been very surprised and somewhat disappointed at the recent activity of the AARP on this issue. They ran ads this past weekend and they held a news conference today supporting the bill that Senator Daschle, we are told, plans to bring to the floor. In the same breath, they say they want a drug benefit that is permanent. They should make up their minds because Senator Daschle's bill is not permanent. That is because making it permanent would reveal how unaffordable it is. It is difficult to understand why they are sowing such confusion on the issue. Do they believe we should sunset the Medicare Program as a whole, as that bill does? I do not think we are going to sunset senior citizens. When the prescription drug program ends in 2009 or 2010, do they think the senior citizens of America are not going to need prescription drugs the next day? I hope AARP's members will tell Senator Daschle that is quite ludicrous, and they would be right. Believe it or not, my bill--I should not say ``my bill'' because I have never had the pleasure of working with so many politically different people as Senator Hatch, Senator Snowe, Senator Breaux, Senator Jeffords, and myself--I am different, too. Over the course of a year, we had give and take by people with so many different political philosophies, bringing us to where we are with this bill. So many times along the way we thought everything would fall apart, but we would come back together because people of good will working together can get things done. That same good will is on the Senate Finance Committee if we just have an opportunity to work the will of the committee. But we have produced a product--and I said I am embarrassed it was this Monday; it could just as well have been May 1, but we just could not get the Congressional Budget Office to score the bill. Maybe it is legitimate. It is a whole new Government program. They had to take into consideration putting people on board. I suppose CBO had to do a lot of education of their own staff. All I can say is, it is here, and it is not here too late. Believe it or not, this bill is the only true bipartisan bill in all of Washington, DC, to add a drug benefit to Medicare. If ever there was an issue where true bipartisanship was needed, it is in this bill, it is needed beyond the authors of this bill to the entire body, and we can get something done this year rather than wait next year to spend another $100 billion more with the costs rising. In short, the bipartisan 21st Century Medicare Act is the reasonable, pragmatic approach that can work even in an election year if Senator Daschle wants us to do it. I thank the Chair.

Mr. GRASSLEY

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

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, before I yield the floor, I would like to have just a short discussion of something that bothers me. In the Senate we have a right to be, and a responsibility to be, intellectually honest about these issues with which we are faced here. I have heard so much during this debate--not so much during the debate, because that wouldn't be fair, but more probably in news conferences held by Senators on the other side of the aisle--about the Democrats wishing to use Enron and WorldCom events very much as, I think, political issues. I think maybe the Democrats are hoping for a ``November storm'' in which our economy is weak and no progress is made on accounting reforms. As this bill goes through the Senate, through conference, and comes back, I hope we will realize that there is enough blame to go around. But, most importantly, I think it is wrong. For instance, the distinguished majority leader on ``Face the Nation'' recently attributed the current crisis to the alleged ``permissive'' attitude in the Bush administration towards business. I didn't see any ``permissiveness'' in the President's speech last week. I don't think very many people did. But I think we also need to remember, while a lot of this mischief was going on by corporations, that during the decades of the 1990s and now in the 21st century there were 2 years in which Democrats controlled Congress. In those two years, we had a Republican President. That was the first Bush Presidency. There was a period of time when the Democrats controlled both Houses of Congress and the White House. That was 1993-1994. Then there were 6 years that Republicans controlled the Congress--1994-2000, and the Democrats controlled the Presidency. Then there were 135 days last year that Congress was controlled by Republicans, and the President of the United States, but only 135 days out of a 12-year period of time, if you want to use the 1990s plus now. And what has happened has happened on the watch of both Republicans and Democrats. I think that to say a President has been President 18 months and this crisis before us is because of a ``permissive'' attitude in the Bush administration towards business just doesn't hold water. I have a chart behind me. I hope I am very clear in making this more accurate than what I just said. The yellow is the 2 years of the Bush administration going back to 1994, and the other color covers the Clinton administration. But let's forget about the Bush administration and the Clinton administration. Let's just realize what the facts are. In the case of Enron, it became public in the year 2001, but the restated earnings and the mischief went on all the way back to at least the beginning of 1997 because 1997, 1998, 1999, 2000, and the first two quarters of 2001 were restated earnings. Adelphia: Half of 1998, all of 1999, all of 2000--before they were public in 2001--but restated earnings for all those. Go down to Xerox. It was found by the end of the year 2000 everything that was done wrong in Xerox. The restated earnings of 1997, 1998, 1999, and 2000 came before there was ever a President George Bush. There were restated earnings for Rite Aid for 1998, 1999, and 2000. You can go down the list. What the chart says, better than I can say, is that it is not a permissive attitude by this President that has put us in this position. It is because of the lack of transparency that was implied in what the accounting profession and audit committees and boards of directors, who ought to be watching management, were doing, and the Securities Exchange Commission under the spirit of the 1933 law of what they should have been doing. I suppose there are a lot of others as well. But now politics should be put to the side. We should not be making these statements. We ought to be correcting the situation so that people have confidence and so that the crooks who are running our corporations and doing these things that are evidenced here. When I say ``crooks running our corporations,'' I mean the ones who would do this sort of thing to their stockholders and to the country and to the economy--so that they cannot get away with that in the future. That is what this bill is all about. I complimented Senator Sarbanes and Senator Enzi about this bill. I think it would have been improved with my amendment. But, quite obviously, that is not the way the game is being played. So I am sorry that my amendment could not be put to a vote.

Mr. GRASSLEY. I did not hear the President do that.

Mr. GRASSLEY. If I only have to listen to a 10- or 12-minute speech, I will be glad to wait.

Mr. GRASSLEY. I yield to the Senator from Virginia, just to make a unanimous consent request.

Mr. GRASSLEY. Before I forget, Mr. President, I make the request that the unused portion of my hour that I will not be using here, I would like to also have given to the Senator from Texas.

Mr. GRASSLEY. Mr. President, I have five amendments I filed: (i) An amendment providing for a team of oversight auditors, (ii) an amendment providing for prebankruptcy bonuses paid to top executives be pulled back into the bankrupt corporation's estate, (iii) an amendment providing the Securities Exchange Commission with disgorgement remedies, (iv) an amendment providing that auditors who sell tax shelter products cannot opine on the financial effects of the tax shelter deal; and, (v) last, an amendment providing whistleblower protection to the accountants and others who want to disclose financial statement misconduct. I am pleased, in regard to the last amendment I just announced about whistleblowers, Senators Leahy and Hatch accepted that proposal as part of their amendment which has been adopted. I am not going to speak about the other four. I am just going to speak about one of those. It is the first amendment I put on my list, an amendment providing for a team of oversight auditors. As I said, I congratulate my colleagues, Senators Sarbanes and Enzi on their hard work in moving S. 2673 out of Committee and bringing the bill to the floor for further debate. The reform bill is a great step in the right direction for tackling some of the difficult accounting problems our Nation currently faces. Nevertheless, I believe the reform bill isn't quite tough enough on several issues and should be strengthened further, consequently, the amendment. In my view, the recent rash of accounting scandals did not result from incompetency or lack of rigorous training of accounting professionals. Neither has the problem lied principally with misguided auditing standards known as GAAS or ill-considered accounting rules known as GAAP. The Worldcom debacle, among others, further demonstrated that the problem does not rest entirely with a company's external auditors-- whose best efforts may not detect financial misrepresentations if fraud is repeatedly covered up by corporate insiders or contrived to defeat established internal controls. Instead, each of the most recent corporate accounting scandals appear to have arisen from egregiously bad behavior of corporate insiders and internal accountants--with varying degrees of complicity by those companies' external auditors. Thus, as a matter of principle, I agree with the ``bad apples'' theory being offered by many. However, I believe addressing those bad apples requires additional oversight--and not just of a company's external accountants but of the internal accounting function itself. To that end, I further respond to the President's call for increased oversight and would like to offer an amendment that would strengthen the provisions Sarbanes-Enzi bill by expanding the powers of the oversight board to require the performance of ``spot audits.'' The underlying bill which focuses on monitoring external auditors woud be amended to provide additional board oversight of internal corporate accounting. Specfically, my amendment would charge the Board with responisibility for conducting oversight audits or ``spot audits'' of public companies. The board would serve in a role analogous to the Internal Revenue Service or the Federal Bank Examiner. The IRS, for example, achieves voluntary public compliance through review of a very limited number of federal tax returns each year. The IRS does not verify each and every tax return. Similarly, the Federal Bank Examiner sporadically and randomly audits various banks throughout the country. Such ``spot auditing'' has been an extremely effective oversight tool for the banking industry and one which has resulted in higher levels of regulatory compliance. In similar fashion, I believe that accountants and corporate America will prepare more carefully their financial statements if exposed to the risk of compliance review by the board's oversight auditors. Even in self-regulated form, the accounting industry has long recognized the need for a second level of review. To that end, 24 years ago the ACIPA established the peer review process by which one accounting firm would review audit work of another accounting firm. For example, Deloitte & Touche was for many years the assigned peer reviewer of Arthur Andersen. Industry-wide self-checking on top of industry self-regulation seems ill-conceived and has been widely critized for its effectiveness by lawmakers and the SEC. Over the past 25 years, a Big Five accounting firm has never issued a qualified report against another Big Five accounting firm at the end of any peer review despite the subsequent discovery of numerous irregularities including numerous conflicts of interest from stock ownership in audit clients. This recognized need for a second level of review is longstanding although the mechanism originally established by the accounting industry seems to have proven largely inadequate. Some may ask why the Board should be granted powers which may be exercised currently by the SEC. The answer is simply resources. Providing an effective mechanism for spot checking the books of various issuers requires a dedicated audit staff to carry out those purposes. Having resources dedicated to a regulatory review process would allow the oversight board to take a proactive approach in reviewing for accounting irregularities and take the SEC out of a purely reactive posture with respect to corporate accounting fraud. The SEC has done a great job of investigating corporate scandals once detected. Unfortunately, by the time many of the recent scandals were discovered, things had progressed too far. We were unable to salvage the companies and the life savings of thousands of employees and shareholders. I believe the oversight auditor would provide a deterrent to committing fraud when coupled with tougher criminal sanctions. I further believe that earlier detection could prevent the absolute destruction of companies in which fraud remains uncovered for too long a period of time. I note that the concept of an oversight auditor within the public oversight board was rejected in the accounting reform proposal offered by the SEC and Harvey Pitt on June 20. The draft emphasized that the SEC's vision of a newly created public oversight board reassured corporate America that the newly-created oversight board would require the cooperation of audited corporations ``only to the extent necessary to further . . . reviews or proceedings regarding the [audit corporation's] accountant.'' The draft further promised that the new oversight board would not conduct ``roving investigations'' of audited corporations nor would the board sanction those corporations. It occurs to me that by shifting exclusive focus and responsibility to accounting firms, we ignore the underlying behavior of corporate wrongdoers who have principal responsibility for fair and accurate financial reporting to corporate shareholders. Under my proposal, the newly created oversight board would be charged with reviewing the financial statements of issuers and focusing its resources on highest-risk audit areas and questionable accounting practices of which it is aware from the SEC Division of Enforcement or other sources such as whistleblowers under provisions I heartily supported. Upon discovery, the board would refer findings of possible accounting or auditing irregularity to the Division of Enforcement with respect to issuers or other appropriate federal and state enforcement officials such as the President's newly-created Fraud Task Force within the Department of Justice. This referral mechanism would ensure that those agencies continue to have primary authority and responsibility for conducting comprehensive corporate investigations of possible wrongdoing. The oversight board, of course, would have authority to conduct investigations of possible wrongdoing with respect to the involvement of accounting firms within its jurisdiction. That is a basic summary of what this amendment would accomplish. I urge my colleagues to support establishment of an oversight auditor as a means of improving the compliance of corporate issuers and their external accounting firms and detecting irregularities at a much earlier point in the system when a shareholder value remains salvageable. It seems to me that my amendment comes down to just a simple case of common sense. As I think proven so many times before, auditors need to be audited in the same way the IRS does it for tax returns and in the same way bank examiners do it in the case of bank audits. If auditors know their work will itself be audited, they will think twice about looking the other way on shady deals, as we have seen. My amendment would put some very specific teeth in the Sarbanes-Enzi bill. At this point, I was hoping the Senator from Texas was going to be here because I have done so much for him on a lot of Finance Committee bills. I'm referring to tax bills, including the recent CARE bill and the recent energy bill. I have helped him with so many amendments that he wanted. I was sure he would be willing to help me get unanimous consent to get my amendment up, particularly in light of the fact that last week I was assured when it wasn't on the list that it would be on the list. Then I came back and found that it meant being last on the list. Now we are getting down to the end. I would like to have what I consider kind of a commitment, although it probably is not an ironclad commitment, that I be on the list, and, obviously, I would be able to get a vote on my amendment. At this point, I ask unanimous consent that the pending amendment be laid aside for the purpose of taking up my amendment just described, which is amendment No. 4232.