Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, the journalist H.L. Mencken once observed that, ``complex problems have simple, easy to understand, wrong answers.'' And, though modern history has amply demonstrated the resistance of complex political and economic systems to the easy answer of centralized control, we try time and again to apply top-down solutions to our multifaceted problems. This conflict is brought into no sharper light than by Congress' current efforts at financial services reform; particularly those directed at the labyrinthine world of the multi-trillion dollar derivatives trade. Derivatives are a vital and complex component of modern financial markets, making it imperative that reform be done right--without damage to the twin pillars of innovation and capital formation. The question as to how derivatives should be regulated is not easy to answer, but Congress should start with some guiding principles. First, derivatives regulation should seek to foster a robust, competitive, and liquid marketplace. Second, systemic counter-party risk exposure must be reduced by incentivizing central clearing and increasing reporting requirements to promote transparency. Third, regulation must preserve the ability to engage in bilateral customized transactions for risk management. Finally, we must coordinate our efforts with the international community to prevent global regulatory arbitrage and the flight of capital to less regulated jurisdictions. Unfortunately, the regulatory reform proposals making their way through both chambers of Congress fail to take into account the intricacies of this dynamic financial product and expose a fundamental misunderstanding of the way in which the marketplace works. Congress must think through the significant, unintended consequences before we act to mandate that all Over-the-Counter--OTC--derivatives be centrally cleared and executed on exchanges or cash collateralized, as well as subjecting end-users to capital charges. By de-incentivizing companies to use these risk management tools, such proposals will have the perverse effect of increasing business risk and raising costs. The proposals advocated for by the U.S. Treasury and Chairman of the Senate Banking Committee, Senator Christopher Dodd, seem to provide too many government mandates and not enough flexibility. The proposed regulatory structure for OTC derivatives is built on an inadequate foundation lacking the staff, expertise, technology, and resources needed to provide truly robust oversight. Clearing and exchange-trading requirements do not accommodate the need for customized transactions. Capital and margin requirements threaten to lock up liquidity. Lack of international coordination guarantees a flight of capital away from our shores. Derivatives may not be part of the Main Street vernacular, they may be unfamiliar to the local car dealership, but the manufacturers that supply those dealerships know them well. Derivatives provide businesses with access to lower cost capital, enabling them to grow, invest, and retain and create new jobs. With the unemployment rate at 10.2 percent nationally, this is no time to increase uncertainty and business costs. Congress must be mindful of the mobility of capital in the global marketplace as well. Without a proper regulatory balance, capital can and will accept higher risk for less onerous regulation. We must maintain incentives for business to participate in a large and liquid OTC derivative market, while promoting global coordination to minimize regulatory arbitrage and systemic risk. Under current proposals, capital requirements that will be imposed on OTC dealers will pass on additional cost to end-users. Coupling these capital costs with a decreasing ability to customize transactions could result in sharply lower usage by end-users. Given that 94 percent of Fortune 500 companies utilize customized OTC derivatives to manage macro-economic risk, providing less certainty to corporate balance sheets will severely undermine confidence in the American marketplace. Further, the proposal to mandate exchange trading makes little sense in the bespoke OTC derivatives market. The basic assumption of exchange trading reflects the use of standard products. OTC derivates by their very nature are not always standard. In the real world, mandating use of an exchange would inhibit the use of such customized derivates that are useful financial management tools to hedge extremely specific risks. Bespoke derivatives cannot always be substituted with exchange traded or standardized OTC products. Even attempting to craft a carve- out for such derivatives raises the concern of whether the U.S. Securities and Exchange Commission and Commodities Future Trading Commission could agree on what should be traded. Another red flag raised by the circulating proposals is the unintended consequence of segregating variation margin. The more capital a dealer has to set aside to purchase an asset, the fewer assets it can purchase. Heightened capital requirements restrict a dealer's ability to generate returns on its capital or provide loans to Main Street businesses, students heading to college, or families seeking a mortgage. It also does not protect end users or reduce systemic risk in any demonstrable way. Corporate scandal and economic failure have provided such a regulatory catalyst many times in the past. It is alarmingly reminiscent of 2002, when Congress enacted Sarbanes-Oxley; introducing a host of new compliance requirements for accounting, corporate governance, and financial disclosure. But, in the years since the legislation took effect, the overhaul has come to be widely regarded as overly complex, unduly burdensome, and a severe disadvantage to American businesses in the global marketplace. Congress should be instructed by the lessons of the past and not add such regulations that will impede capital formation. The simple, easy, but ultimately wrong answer is to issue a government mandate for every perceived problem. Thinking through the unintended consequences of overregulation and trusting market solutions is more difficult, but it is ultimately the only way to preserve the innovation that powers American markets.

Mr. GREGG

Mr. GREGG. Madam President, last month, efforts by Senate Democratic leaders to add roughly $250 billion to the U.S. debt over the next 10 years by increasing Medicare payments to physicians were put off by arguments from other Democrats that the cost of the proposal should be offset so as not to burden future generations with more debt. A series of press releases, editorials, and op-eds declared the proposal to be fiscally irresponsible and the Democratic leadership foolish for trying to take it up as a standalone bill. And yet, a Senate highway bill that would add roughly $150 billion to the U.S. debt over the next 10 years remains below the radar and far more likely to be approved. The last highway bill, SAFETEA-LU expired at the end of September 2009. But highway programs, like much of the rest of government, continue to operate by virtue of the continuing resolution, CR, now in place through December 18, 2009. Until the authorization committees can agree on how to underwrite the $500 billion over 6 years that they desire in highway spending, a CR or another legislative vehicle will carry a highway programs extension. Meanwhile, the highway trust fund is already insolvent and cannot support baseline spending levels equal to the highway program levels in fiscal year 2009, much less an authorization bill amounting to half a trillion dollars. The House and Senate authorizing committees advertise they are simply arguing over the length--3 months v. 6 months v. 18 months--of a ``clean'' extension. A clean extension, however, already exists in law in the CR and can be perpetuated indefinitely. The authorizers really want to combine a highway extension bill with an increase in highway spending authority above the fiscal year 2009 level for contract authority. The various ``clean'' extension bills being advocated by the highway authorizers are anything but clean, and they are certainly not extensions. For example, the latest Senate version to be hotlined on October 26 is a massive highway expansion bill--it would increase spending authority by $20.8 billion over the CBO baseline in 2010 and in every year after that. Madam President, $20.8 billion per year over the baseline is a lot of money. Why so much? Because authorizers set, back in 2005, the overall 5-year net level of highway spending in the last authorization bill, SAFETEA-LU, by rescinding $8.7 billion on the day that bill expired-- September 30, 2009. They had always planned to repeal that rescission before it occurred, but failed to do so. They are so irritated by the failure to avert the rescission that they propose to re-enact the funds--twice! I will ask that a table showing the components of the $20.8 billion above the CBO baseline be printed in the Record at the end of my statement. CBO projects that limiting highway spending to the fiscal year 2009 program level, as the CR does, will exceed the gas tax revenue to the highway trust fund by $87 billion over the next 10 years. If Congress continues to cover trust fund shortfalls as it has been--by transferring money from the Treasury's General Fund--then $87 billion of transfers and debt would be required to continue just this fiscal year 2009 level of spending. The general fund, however, is also broke-- incurring a $1.4 trillion deficit in fiscal year 2009, and the fiscal year 2010 deficit is likely to be about the same. Consequently, when Congress transfers money from the broke general fund to the broke highway trust fund, the debt of the U.S. Government goes up by exactly that amount and immediately counts against the debt limit. Despite the unaffordability of the baseline, Congress adopted a 2010 budget resolution in May 2009 that allocated amounts to authorizing committees to write a highway bill that would spend more than current law revenues collected by the trust fund. The Senate highway expansion bill, which would restore the $8.7 billion rescission twice, would not only enact the levels magically assumed by the 2010 budget resolution but would also increase outlays by another $62 billion over 10 years, bringing the total draw on the general fund, the debt, and future generations to nearly $150 billion, just from a so-called 6-month extension bill. The authorizers brush off any deficit concerns by saying that, under the Byzantine system of split jurisdiction with the appropriators, they don't control outlays and so there is no ``pay-go'' problem with their expansion bill. But it's too late to raise any objection if you wait to measure highway program outlays for budget enforcement until they are triggered by an appropriations bill, since the outlays are already baked into the baseline and into the allocations of the appropriators. The only point where taxpayers or their watchdogs can measure whether proposed future spending is higher than current law is at the authorization stage. Extra special vigilance is required whenever authorizers claim they just want to enact a ``simple clean extension.'' When Republicans controlled Congress in 1998, they enacted a bipartisan highway bill dedicated to spending all gas tax revenues only on highways. When they enacted the next highway bill in 2005, it was also a bipartisan goal to spend every penny of gas tax revenue. They succeeded beyond their imaginations. And now that Democrats are responsible for writing the next highway bill, their proposal is to spend all the gas taxes plus an additional $150 billion. This can only be done by increasing the Nation's debt, in other words--handing the bill to our children so today's politicians can take credit for highway projects. I ask unanimous consent that the components to which I referred be printed in the Record.

Mr. GREGG

Mr. GREGG. Madam President, I note that my colleague from New Hampshire is also on the floor. Did she want to go first?

Mr. GREGG. Madam President, I ask unanimous consent to speak for 10 minutes as in morning business.

Mr. GREGG. Madam President, last night's elections have been interpreted in a variety of different ways. I listened to one channel and got one certain interpretation, I listened to another channel and I got the exact opposite interpretation. So I will throw in my interpretation. I think the American people, most Americans today, are going through some tough times. They are finding it very difficult to make ends meet. Many Americans have lost their jobs, unfortunately. Those Americans who have jobs are worried about their jobs. They are going home at night, they are sitting down with their husbands or with their wives and they are trying to work through the family finances. They are concerned about making ends meet. They are worried about their credit card debt, they are worried about their mortgage, they are worried about how they are going to pay for their children's schooling, if their kids are in school. If they are graduate students, they are not kids, they are worried about how they are going to pay all those debts they are running up to get through school. I think Americans understand the debt is a problem personally and now they look at the Federal Government and they see we are running up this massive debt on them. We are going to be asked, fairly soon, to raise the level of the national debt by maybe $1 trillion. This year the deficit will exceed $1.4 trillion--or last year--and we are seeing deficits projected for the next 10 years of over $1 trillion a year. They are seeing our Federal debt being bought up by foreign countries. Yet our Federal debt keeps going up dramatically. They are asking themselves: How can this be? How can a country as strong and vibrant as the United States continue to run up all this debt and continue to be successful? We cannot do it as family members. We cannot do it in our household. How can the Federal Government do this? I think the answer is fairly intuitive: It cannot do this. Yet we continue to do it as a government. So I think some of the vote last night was a statement that, hey, Federal Government, take a pause. Think about what you are doing in the area of running up deficits and running up debt and passing on to the children, to our children and to our grandchildren, a situation which is not fiscally sustainable. Think about what is going to occur if we continue to run these massive deficits and this massive debt. It will be a situation where we have a new saying in this country, ``No child left a dime'' as a result of all this debt being run up. Our kids will be put in a position where their quality of life will be fundamentally undermined. They will not be able to buy their home. They will not be able to send their children to college. They will not be able to do the things we have been able to do in our generation because they will have to be paying for the debt which we put on their backs, $1 trillion of deficit every year for the next 10 years, the public debt going to 80 percent of GDP. Yet the proposals we are seeing come across this floor aggravate the situation almost on a daily basis. Two weeks ago, there was a proposal by the White House to add $13 billion of new deficit spending because they wanted to give $250 to every Social Security recipient. Well, I think most Social Security recipients are sophisticated enough to know that putting $13 billion of debt on their children's backs, in a system that already has severe fiscal problems, is not worth it for $250. It is not worth doing that to their kids and their grandkids. Then, 1 week ago, it was proposed we spend almost $\1/4\ trillion-- $250 billion--to fund the doctors fix. The doctors need this adjustment. But it was going to be funded by passing debt, putting debt on our children's backs. We could not afford to do that to them. It is not right to fix the doctors' problem by passing the bill on to the next generation. Yet that was what was proposed. It passed in the House. Fortunately, over on the other side of the aisle, a number of folks stood and joined all the Republicans and said: No, that is not the way to do it. We should pay for that. We are going to see a highway bill coming through here pretty soon. That bill is going to add potentially $150 billion of new debt to the deficit. The most egregious example of this problem of expanding the deficit and the debt on our children and leaving our children in a situation where no child has a dime is the situation that is coming down the pike on the health care bill. The House of Representatives leadership on the Democratic side has proposed a bill that, when fully implemented--in the first 10 years, it is not fully implemented so the costs are underestimated--is going to cost $2.4 trillion of new spending. It will take health care spending up to 22 percent of the gross national product. We will be spending more than a fifth of this country's wealth on health care as a result of the House bill. The practical implications of that are staggering, not only to our economy but to this government. To grow this government by $2.4 trillion is going to put us in a situation where we will basically have a government that is piling more debt on top of debt we already can afford. It is alleged that this is paid for. It is paid for in the first 10 years, if you use the most rosy assumptions, because they start the pay-for years on year 1, and they don't start the expenditures until year 4. So in a 10-year period they have 6 years of expenditures matched against 10 years of income. But when you get it fully implemented, it is not paid for. There is a huge gap. The pay-for assumes that you are going to take $4- to $500 billion out of Medicare and move it over to a new entitlement. You will take $4- to $500 billion of new tax increases and pay for this new entitlement. We can't afford that. If we are going to adjust Medicare spending by $\1/2\ trillion, which is what the House is proposing, that money should go to making Medicare solvent. It should not go to creating a brand new entitlement which is going to weight down even further the ability of the Federal Government to pay its bills. Yet that is the proposal. If you are going to dramatically increase taxes, as the bill suggests, by $\1/2\ trillion, that money should also go to address the deficit and the debt. It should not go to expanding the size of government. The fundamental problem with this health care bill, as it left the House and the Senate Finance and HELP Committees, is that it grows the government at a dramatic rate and uses resources which should be used to get the deficit under control or to make Medicare more solvent. It uses those resources to expand a brand new entitlement. We know, because we have seen it in all sorts of initiatives, that when you put a new program on the books, you inevitably, especially an entitlement program, underestimate the cost, and you equally overestimate revenues. Inevitably, the majority of that cost is financed through deficit spending and is added to the debt. You just have to look at our history to know that is true. As we go forward from this point, I hope we will think a little bit about addressing what most Americans who voted last night were thinking about, at least when they went home to do their own budgets, and that is the deficit and debt, and that we won't put on the books a brandnew entitlement that will cost us $2.4 trillion when fully implemented and which will dramatically aggravate our ability to pay for debt we already know is coming down the road to make Medicare more solvent, which we know is a big issue and will increase the size of the government. When this bill is fully implemented, if it were passed in its present form, the Federal Government would grow from 20 percent of GDP to 23\1/2\ percent of GDP. That would be the largest percentage of the economy the Federal Government has taken out of it since World War II. Then it continues to go up. It ends up, after 10 years, at about 26 percent of GDP, if we factor in all the different expenditures which are proposed in other parts of the budget. It is not sustainable. It is not fair. It is not right. One generation should not do this to another generation. We should not promise new programs we cannot pay for and which will pass on to our kids costs which they will have to bear in a way which will dramatically affect their quality of life. I hope we will take a little time out and say: Let's see if there isn't a better way to do this. Let's see if we can't do this in a more fiscally responsible way, in a way that doesn't grow the government by trillions of dollars, and which doesn't pass massive new debt on to our children. I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent to speak in morning business for 15 minutes.

Mr. GREGG

Mr. GREGG. Mr. President, I rise to speak again about the issue that is the topic of the day for us in the Congress--independent of the question of Afghanistan and Iraq, which is our No. 1 concern--and that is the question of health care. Today, the Speaker of the House and the Democratic leadership and membership of the House unveiled their plan. It is 2,000 pages long. They made the representation that, in some way, it wasn't going to increase the deficit. This is a bill that is going to cost between $1 trillion and $2 trillion over 10 years. The idea that it is not going to increase the deficit is so unbelievable just on its face that it doesn't even pass the laugh test. If you believe that, then maybe the Speaker of the House should sell you a bridge in Brooklyn--or even in Oakland, for that matter. That one doesn't work, by the way. The simple fact is, when you increase the size of the government by $1 trillion or $2 trillion, as this bill proposes to do by massively creating a massive new entitlement called a government-forced insurance plan, there is no way you are going to be able to cut Medicare enough, as it is proposed in this bill, or raise taxes enough, as it is proposed in this bill, to meet the cost of that program. There is no way it is going to happen. So to claim that this won't add one dime to the deficit, as the President claimed he would not do when he spoke to the Congress, is just not believable. Under this administration, we have seen a massive expansion in the debt of this Nation. They represent constantly that they just inherited this from the Bush administration. Yes, a fair amount of it did come over from the prior administration, but the budget they sent here, which has a trillion-dollar deficit every year for the next 10 years, isn't the Bush budget, it is their budget. The budget they sent over here, which raises the debt in this country from 40 percent of GDP to 80 percent, isn't the Bush budget, it is the Obama and Democratic budget. The representation was that we would go out and spend almost $1 trillion--$800 billion--on a stimulus package, and that would create jobs. What it created was debt for our children. The numbers are starting to come in now. It was represented in New Hampshire specifically, this administration said there would be 16,000 jobs created in New Hampshire by the stimulus package. Since the stimulus package has passed, we have lost 12,000 jobs in our State, and $400 million has been spent in New Hampshire. The administration argues $400 million created 3,000 jobs. They have to use some pretty creative accounting to get to those 3,000 jobs. Even if we give them the benefit of the doubt, that is over $130,000 that it has cost Americans per job. Did we have that money to spend? No. We sent the bill for that package to our children. We put it on their backs. In fact, almost 50 percent of that stimulus package is going to be spent after this recession is long over. It is going to be spent after the year 2011. Chairman Bernanke, head of the Federal Reserve, said the recession was over. He said that about 2 weeks ago. Granted, the pain and suffering and the difficult economic times certainly are not over, and we do need to be concerned about that. But in 2012, 2013, 2014, 2015, even in 2019, there will still be money being spent under that stimulus package, and all of it will have been borrowed, borrowed from our children, and they will have to pay it back. Then we had the Cash for Clunkers Program which was allegedly going to be this great stimulus initiative. That has been looked at by an entirely independent group, edmunds.com, which is an automobile site on the Web. They tell you a car's value and give you an independent assessment of its qualities, pluses, and minuses. They took a look at that program. They said there were 690,000 vehicles sold during the Cash for Clunkers period. But they concluded--they are not conservative, they are not liberal, they are not moderate. They are just a professional group of people looking at what happens in the area of automobiles. They concluded that only 125,000 of those cars would not have actually been purchased or sold by the dealer were the Cash for Clunkers Program not in place. In other words, the vast majority of cars would have been sold; they would have been bought under Edmunds' estimates. So we spent about $3 billion to buy 125,000 cars. That works out to $24,000 per car. Who did that bill go to? That is going to our kids too. Just in the last 2 weeks--well, almost every week around here we hear proposals to spend money and not pay for it. A week ago, somebody suggested from the administration that we should spend $14.5 billion by sending $250 to every Social Security recipient. Why did that come about? That came about because people were starting to realize senior citizens were getting a little upset with the fact that under the health care proposals that have been coming forward from the Finance Committee, from the Labor Committee, now from the House, that under these proposals Medicare was going to be significantly reduced. Seniors were going to lose their Medicare benefits so that a brandnew entitlement could be created which had nothing to do with seniors and be partially paid for with these reductions in Medicare payments. In fact, if you are on Medicare Advantage, under the Finance Committee bill, you can forget it. That program is gone. There are a lot of seniors in this country who have Medicare Advantage. They like it. They think it is a good way to get health care. But the majority of the Medicare cuts come out of Medicare Advantage. Basically, they are wiping out that insurance benefit. Talk about losing your insurance. The President says nobody is going to lose their insurance today who has it; nobody is going to lose it. Right on the face of it, when Medicare Advantage gets wiped out, every senior who has that is going to lose it. They are going to be moved over to the standard Medicare. And for what? To pay for a new program, a new entitlement program that has nothing to do with seniors and has nothing to do with making the Medicare system more solvent. If we are going to reduce Medicare payments, and there are adjustments we need to make in the Medicare system, it should go toward making that system solvent. Why is that? Because the system is insolvent. It is inconceivable that the White House would suggest that we should add $14.5 billion of new spending to the Social Security Program, which is also going to be insolvent in a few years, because seniors were upset and they were realizing what was going to happen to them under Medicare. They wanted to sort of give them some walking-around money, the old Chicago way--walking-around money. If we give people money, maybe they will not be upset by things. I think most seniors understand that, sure, they would love $250, but how does that work? When we total that all up, that is $14.5 billion of debt which is going to be given to their children and their grandchildren to pay when those grandchildren and children already are getting a massive debt, almost $50 trillion of unfunded liability just in Social Security and Medicare alone. We have to ask ourselves: Should we put another $14.5 billion on their backs simply to make a political statement? Of course not. But that was proposed. Then a week ago, it was proposed that we should do a $250 billion fix to reimburse doctors fairly. Doctors are not reimbursed fairly under Medicare. They are not. That is an interesting fact because if we look at all these proposals that are being talked about from the other side of the aisle, they are saying: Oh, everybody in America will have Medicare. That is a great idea. The fact is, Medicare does not reimburse doctors for what the real costs are. So a lot of doctors don't want to do Medicare. The reflection of that fact is, they proposed the $250 billion doctor fix. They didn't want to pay for it. That is a $\1/4\ trillion. That is a lot of money. All that debt goes on our children's backs. Our children have to pay for that spending. That was the proposal that came from the other side of the aisle. Fortunately, some folks on the other side of the aisle--I congratulate them, 12 Members on the other side of the aisle in the Democratic Party and one Independent--said: Wait a minute. We are going to join the Republicans on this one. You can't do this. This is not right. You cannot spend $250 billion on fixing the doctors fix, which should be fixed, and then take that bill and give it to our kids and grandkids. You have to be more responsible. Over the years, every year we have fixed the doctors fix. We have fixed it now for 10 years, and we have paid for it. But this was not going to be paid for. These ideas for spending money and not paying for them have become fairly common around here. But the biggest item is clearly going to be this health care bill which is a brandnew entitlement representing $1 trillion to $2 trillion of new spending. What is that money going to be used for? It is going to be used basically to create a new government-inspired insurance program to compete with the private sector in the area of supplying health care. That would be OK except for the fact that as the Speaker of the House has said, that government plan is going to be used to save money. There is only one way that a government insurance plan can save money; it has to underprice the private sector. How does it do that? It uses the authority of the government to set price controls. It uses the authority of the government to control procedures that people are able to get. It uses the authority of the government to limit innovation because innovation is costly. Inevitably because of that--price controls, controlling access to doctors and hospitals and procedures people can get, and controlling innovation--it inevitably deteriorates the quality of health care generally for the public. Equally important, of course, under the scheme that has been developed that we have seen so far--although we have not seen the specifics because they are being developed behind closed doors on the Senate side. We have seen the House bill, but we haven't had a chance to read the 2,000-page bill. But the scheme that came out of the Finance Committee, equally important, the practical effect would have been that employers would have been encouraged to basically drop employees from their private insurance plan and cause those employees to migrate over to the public plan--intentionally, of course--through a whole series of activities which would make it much more practical for an employer simply not to insure people but to pay a penalty instead and put employees on a public plan. There will be a natural contraction in the private insurance community because there would be a price-controlled government plan and a natural movement of people over to the government plan because the penalty for employers not insuring people is significantly less--at least in the HELP Committee bill--than the cost of insurance and, therefore, employers will look at it and say: It is cheaper to pay the penalty than insure the folks. So I will just pay the penalty and people can go over and get a public plan. They lose their insurance. Mr. President, 180 million, 190 million people in this country have private insurance. They are pretty happy with their doctor and their health care. They may not be happy with the insurance company--most of us are not--but they are pretty happy with their doctors and their health care. If they are forced on to a public plan, that is going to put this bureaucrat between you and your doctor. It will mean if you have a government plan, you may have to call Washington to see your doctor. It also means, as I said earlier, in order for the public plan to work and be cost effective in the sense of saving money, as the Speaker of the House says that is how she has to save money, it has to have price controls, it has to have control over access, it has to have control over innovation, all of which inevitably leads to delay and a lesser quality health care system. The goal on the other side of the aisle--we all understand this because they have been public about this; there is no subtlety about it--is to move to a single-payer system where there is one insurer in the country, and that is the government. The same group that is bringing us the swine flu vaccination program is going to bring us all our health care. Think about that. We don't have to go too far for an example of how the government has a hard time managing fairly large issues of health care when it comes to the practical application of taking care of people who need assistance. All we have to do is look at what is happening in the swine flu program to recognize that the government may not necessarily, in all instances, do such a great job of delivering health care. For example, today you cannot get your swine flu vaccination in most places in this country because it is not available. Yet that is the system which a large percentage of members of the other party seem to desire, a single-payer system where government supplies it much along the lines of what we see in places such as Canada and England. I don't think it is healthy for you. I don't think it is healthy for patients. It is certainly not healthy for our children because it means they are not only going to get a lesser health care system, they are going to get this huge bill, this massive bill which is going to come out of this $1 trillion to $2 trillion increase in the cost of government. It is hard to understand--it has to be intuitive to people, and I know it is to most Americans--that if we increase the size of government by $1 trillion to $2 trillion, we inevitably end up passing on massive debt.

Mr. GREGG. I ask for an additional 1 minute.

Mr. GREGG. As I said, it has to be intuitive, and I know it is intuitive for most Americans, that if we increase spending of the government by $1 trillion to $2 trillion--and our estimate is this program costs $2.2 trillion in fact--and we cut Medicare to try to pay for that, or we try to raise taxes to pay for that, we are like a dog chasing a tail. It never will happen. The two ends just don't meet. They just don't meet. And what happens to the part that doesn't meet? That is called debt, and it goes to our children. It is not appropriate to do that after we have already put so much debt on their backs, especially in the last few months. Mr. President, I yield the floor.

Mr. GREGG

Mr. GREGG. Will the Senator from Tennessee yield for a question, Madam President?

Mr. GREGG. A 1,000-page bill is pretty big. It is about this big, and a 2,000-page bill is about this big. We are going to find out when we see it printed. That probably weighs a lot, 4 or 5 bricks, 10 bricks maybe?

Mr. GREGG. Madam President, I say to the Senator from Tennessee, I presume it would be at least a week or maybe 10 days. I understand they are going to do an informal sort of ``on the back of an envelope'' estimate quickly. But the implications of this bill, 2,000 pages--it is akin to dropping 10 bricks on our seniors, isn't it? Doesn't this basically wipe out Medicare Advantage and massively impact Medicare benefits and move those savings over to fund a brandnew entitlement?

Mr. GREGG. If the Senator will entertain one other question. The Senator, in his comments on this new 2,000-page piece of legislation, which started out at significantly less, made a point that I believe the last 5 years of this bill--it is a 10-year bill and, of course, it is going to go on forever. They basically start the taxes at day one, but they don't start the expenditures until year five. It turns out, as I believe the Senator said, the expenditures in the last 5 years exceed the income. So if you were to logically put this bill in a 10-year timeframe, where you had all the expenditures and income matched up, this bill is going to add a lot to the deficit. This is a $1 trillion to $2 trillion bill, and the deficit is going to go up a lot. That is common sense; is it not?

Mr. GREGG

Mr. GREGG. I ask to be recognized as in morning business for 10 minutes.

Mr. GREGG

Mr. GREGG. Mr. President, one of the first rules in health care that doctors learn and health care providers learn is to do no harm. So, as we move down the road of this health reform effort, I think we ought to have that as our watchword also. The health reform effort which we pursue should do no harm to a lot of the elements of our health care system which are doing pretty well. For example, there are a large number of Americans who get health insurance from the private sector--about 170 or 180 million--who are quite happy with their health care. They may have concerns with their insurance companies, legitimately, but they think their health care is pretty good. In fact, American health care is excellent. As we move down this road toward health reform, we should not harm those folks. We should not push them into a public plan by creating a system which basically disincentivizes their employers to give them health care, incentivizes employers to pay a penalty rather than pay a health care premium, and moves people over to what are called health exchanges in a public plan. But that is exactly what the bill did as it left the HELP Committee, and who knows what it is going to do when it comes out of the secret room where it is being written right now, but I wouldn't be surprised if that is exactly what it does when it returns from this secret room. That will be harmful--harmful to all Americans who have health insurance and like what they have. They like the doctors they see, and they don't want to have the Federal Government basically supplying their health care and putting them under a bureaucracy where the Federal Government stands between them and their doctors. There are also a lot of senior citizens in this country today who are on something called Medicare Advantage. They find this to be an excellent Medicare Program. It gives them a lot of options they don't have under traditional Medicare, and they like it. Under the Finance Committee plan, Medicare Advantage would have been eviscerated. Most Americans who get Medicare Advantage would lose it-- that simple--because the Finance Committee is anticipating a $400 billion reduction in Medicare spending, with the vast majority of that--or the majority of that coming out of the Medicare Advantage program, essentially eliminating Medicare Advantage as an option. People who are on Medicare Advantage would be pushed back into traditional Medicare. I don't think they are going to be very happy with that. That does them harm. That should not happen. As part of the ``do no harm'' we should be pursuing in health care, we should not cut Medicare in order to fund a brandnew entitlement for people who are younger and who are not on Medicare, for the most part-- who obviously are not on Medicare--and cause people who are on Medicare and who are quite comfortable with what they are getting under Medicare, specifically Medicare Advantage, to lose that option in order to fund a brandnew entitlement with $400 billion in Medicare cuts. In the new ``do no harm'' issue, there is the issue of innovation. Innovation is one of the great advantages our health care system has. You do not see innovation in England, of any significance, where they have a nationalized system. You do not see innovation in Canada, where they have a nationalized system, because innovation takes investment. To bring a new drug to the market requires 12 years and almost $1 billion. Someone has to put up that billion dollars. Somebody has to be willing to take a risk with their money, that they are willing to invest in this very chancy undertaking of trying to bring a new drug to the market, a new drug which will help millions of Americans, potentially. But it takes money and it takes a willingness to invest in that type of research. Money follows return. If you set up a government-run program--which, inevitably, in order to reduce costs has to control prices--you reduce returns. It is absolutely guaranteed that if this country moves to a single-payer, government-run system, the innovation that is occurring in the area of pharmaceuticals and biologics, in the area of devices, will be dramatically chilled because there is not going to be the investment capital to pursue that type of innovation. Granted, the government can try to do it through government research. But we know government research can never replace the creativity of the private sector and the risk-taking of a broader market that involves billions of dollars of investment. But we also know investment follows return. If you use a government plan, which essentially can only save money by controlling prices and, thus, reduces returns significantly or reduces the number of years companies have control over the drug they produce, as is being proposed by the majority under the biologics-generic proposal down to 4 or 5 years, then you will not get the initial investment. Those dollars will go somewhere else. They will go into software, they will go into some other technology or some other activity where the return will be something they think is better. So innovation will be chilled, significantly chilled. That does harm. That will do significant harm because one of the great things about our system, as I mentioned earlier, is that we are bringing these new drugs to the market, these new pharmaceuticals, these new biologics, these new devices which are saving lives and making people's lives better. No other country is doing that at the rate we are doing it because our country has a system which encourages that sort of entrepreneurship and innovation. But that will be dramatically affected if we go down the road as proposed, at least by the bill that was produced by the HELP Committee, which the majority leader said he endorses, a bill that has a public plan in it. In the ``do no harm'' category, who are the people we want to have take care of us? I know when I was in high school and in college, the best and brightest people I ran into wanted to be doctors. I liked that because I knew those folks, who were a lot smarter than I was, were going to be taking care of myself and my family if I went to see a doctor. Almost universally we know the best and brightest people in our society, for the most part, go into medicine. They become doctors. That has been our culture for a long time. But that culture will change, change fundamentally, when every doctor in this country is working for the government, when basically the doctors become bureaucrats. What sort of incentive is there going to be for the best and brightest to move into medicine then? I think we do significant harm if we undermine that character of our culture. Lastly--and this is the point I wished to talk about mostly--doing no harm, in a financial sense, means not creating programs which we cannot afford, for which we end up passing the bill on to our children. We know the proposal, as passed by the Finance Committee, costs between $1 and $2 trillion. They will tell you: Oh, it only costs $800 billion. But that is because they used ``Bernie Madoff'' accounting. They said: We have a 10-year bill. We are going to spend 5 years on the program. We are going to pay for 5 years of the program, but we are going to have 10 years of income to pay for it. We are going to score as if it is a real bill over 10 years. That is absurd. You would go to jail if you did that in the private sector, which Bernie Madoff did. But he has been released. He is on work release, I think, down here working with the Democratic majority on how to score this bill. But as a practical matter, you have to match the full 10 years of expenditures with the full 10 years of what is alleged to be income. So if you have this plan fully phased in over 10 years, the cost, by our estimate, the Budget Committee staff estimate on the Republican side-- and it is a reasonable cost estimate--is about $1.8 trillion. The income alleged to occur under this bill--remember, it is coming from Medicare reductions and from taxes and fees--is alleged to be about $900 billion. If you give them the benefit of the doubt, if they get all the income they claim they are going to get, you are still about $1 trillion off. Well, who pays for that? That goes on the debt. Our kids pay for that. By the way, we skipped over one little item, which costs $250 billion, called the doctors fix. That is not even scored in this exercise, but we know we have to do it--more sleight of hand on the accounting side, a little bit more Bernie Madoffism. The real price of this bill is somewhere between $1 and $1.5 trillion, unpaid for. The total bills' real cost is somewhere over $2 trillion. We are talking 10-year figures here. So you are going to grow the government by $2 trillion because you are going to create this brandnew entitlement, and you are going to take $400 billion from the Medicare recipients and use that to pay for it. Then you are going to take $500 billion in fees and taxes and you are going to use that to pay for it. Well, you are about $1.2 trillion short. So who pays for that? Our kids. More debt. The problem we have today is, we have too much debt. We have too much debt. The debt is the threat to this country. I ask for an additional 2 minutes.

Mr. GREGG. We are facing a situation where our national debt is rising so fast because we are running deficits of over $1 trillion a year for the next 10 years. That is what is projected in the President's budget. We are essentially going to put ourselves in a position where we are going to be similar to a dog chasing its tail. We can never catch up with the amount of debt we are putting on the books. Now we are talking about putting a $2 trillion expansion of the government on top of a government that already has a projected debt of 80 percent of gross domestic national product, which means our kids are going to inherit a country they cannot afford to live in because their standard of living will be reduced in order to try to meet the obligations we are putting on their backs. It is not fair. It is not right. Clearly, if we are going to do health reform, it should be done in a fiscally responsible way. It is not fiscally responsible to grow this government by $2 trillion, take money from Medicare to pay for it, and pass the majority of the cost of that bill on to our kids with more debt. It is not a responsible thing to do. So in the arena of ``do no harm,'' what is presently proposed around here is going to do a lot of harm. That is unfortunate. I yield the floor.

Mr. GREGG

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

Mr. GREGG. Mr. President, I rise to speak about one of the most significant issues we have confronting us as a nation, our rising deficits and debt. At the end of the last fiscal year, which just concluded at the beginning of October, end of September, we determined we had a $1.4 trillion deficit--$1.4 trillion. It is projected that we will have trillion-dollar deficits for the next 10 years under the President's budgets as President Obama has brought them forward. Yesterday we had a vote not to do cloture on a bill the administration supported, and which was brought forward here, which would have put another $300 billion onto the Federal debt to pay for what is known as the doctors fix. The doctors fix is something which should occur. We have done it around here before. We have done it every year for about 8 years; that is, reimbursing doctors at a fair rate rather than having their rates cut. But we have always paid for it. But yesterday there was an attempt by the leadership on the other side of the aisle to pass a bill which would have not paid for the doctors fix and which would have put $300 billion of new debt onto our children's backs; so that every time somebody walked into a doctor's office and was reimbursed under Medicare, that bill, whether it was for a flu shot or whether it was for serious disease issues, would have been taken and passed directly to our children rather than paid for today, as it should have been. So it was a totally irresponsible act to try to increase the debt by $300 billion in order to take care of the doctors fix. But that was what was attempted. Fortunately that failed. At least as of yesterday it failed. There was bipartisan appreciation in the Senate. All of the Republicans voted against doing that, and 12 Democrats and 1 Independent voted against doing it, and that was good. That was a good sign to the American people that maybe we are finally taking the deficit and the debt seriously. The reason I wanted to speak today on this matter is because we are getting some significant warning signs, some flashing yellow lights that are moving from yellow, maybe, to red from the world community that we better do something about our debt and our deficit or the world community is going to react to it. About 4 months ago now the Chinese, who are the primary owners of our debt--in other words, when we spend $1.4 trillion more than we have in a year like we did last year or we spend $1 trillion more than we have every year for the next 10 years as is being proposed by the President, we have to get that money from somewhere. We have to borrow it from somebody. Someone has to be willing to lend us that money, that $1 trillion, that $1.4 trillion. Well, the countries that have that type of money and are willing to lend it to us are countries such as China and Russia and Saudi Arabia. They have surpluses in their economies. They are not running deficits in their governments, so they have surpluses. They have, historically, at least over the last few years, been willing to buy our treasuries, our notes to finance the government operation in the United States. About 4 months ago the leadership of the Chinese Government said: Well, we are getting a little concerned. We are still going to buy American treasuries. We are still going to help you finance your deficit. But you have to do something about this because we are concerned about the value of what we are buying. We are concerned that those IOUs we are buying from you may not be worth what we are paying for them on face value if you continue to run your deficit that you have. That was a fairly large warning sign from a country which obviously has not historically been close to us but which is one of our largest trading partners, and which is, whether we like it or not, buying up all of this debt when we run these massive deficits, or a lot of this debt. Another warning sign came at us when the dollar, which has historically been the reserve currency of the world--in other words, countries hold dollars in order to maintain their own structure of reserves for their countries. The dollar started to be discussed as maybe not the best reserve currency, and there have been a number of rumors and some representations by some Finance Ministers around the world that people might not want to use the dollar any longer as their reserve currency. They may want to use some other currency--maybe the euro or some basket of currencies, maybe the euro, the yen, or maybe just use commodities or maybe use IMF drawing rights, a whole series of different ideas. What does that reflect? That reflects that people are not too confident in our future ability to maintain and defend the value of the dollar. Why are they not confident about that? Well, they are not confident about it because they are looking at the deficits we are running. They are looking at the debt we are piling up, and they are saying: Hold it. How are you going to pay all of that off? If you put $13, $14, $15, $16 trillion worth of debt on your Nation, if you take your public debt from 38 percent of GDP up to 80 percent of GDP or more, how are you going to pay that off, United States? That is a legitimate question because there are only a few ways it can be paid off. One of them, unfortunately, is by using inflation, and that devalues the dollar and it devalues all of that debt people have bought. That is why we are hearing more and more that people, first, are worried about using the dollar as their reserve currency because they do not want to see its value drop; and, secondly, they are worried about buying our debt. So we are getting some serious caution lights from the international community about the fact that we are running these massive deficits and this massive debt. Just yesterday, I think one of the most serious caution lights came out because there are groups in this world, small groups of people--Moody's and Standard & Poor's--who basically look at the currencies and the debt of various nations and they do that also for companies and they rate the debt. The rest of the world's financial activities look at those ratings because they are considered to be of very high caliber and very high standard. They allow people in other places to be able to assess the value of the debt they might want to buy. So if you want to buy debt from XYZ country, you look at Moody's or Standard, that has taken a hard look at that country's debt, evaluated it, and they will tell you whether it is rated AAA, AA, A. That determines how much it is going to cost a country to lend to you. That will determine the amount of interest rate on that debt because if it is not AAA, which is the best rated debt, then people are going to be less likely to invest in it. If they do invest in it, they are going to want a higher return because they are going to be at bigger risk because they know that debt might not be paid back. If it is paid back, it might be paid back in devalued dollars or devalued currency of that country. So, historically, American debt, the Treasury note, has been the gold standard for the world. In fact, it is technically the gold standard. Most people use it as the reserve fund. When the world went off the gold standard, the dollar basically became the way people maintained and conserved their assets. They would invest in Treasury notes and know that the treasuries were always safe. It was always determined that Treasury notes were safe because the United States always was going to pay back its debt. So the United States has always had a AAA rating. That is hugely important to us as a nation. It is hard to appreciate as just an ordinary American going to work every day and trying to make ends meet that the AAA rating of the United States is important to them, but it is. It affects everything in this country that has to do with credit. If the United States were to lose its AAA rating, all credit would go up, and the costs in this country. It would be much harder to buy a house because the interest rates would be higher. It would be harder to buy a car because the interest rates would be higher. It would be harder to send a child to college because the interest rates would be higher. Everything is tied to the fact that treasuries have AAA ratings. It has always been presumed that they would. In the post-World War II period, it has always been presumed that the United States, the strongest economy in the world, the most vibrant economy in the world, would always have the gold standard for the debt it issues, that it would always be a AAA-rated event. Well, as a result of our profligate nature as a country and as a Congress, as a result of having run up these massive deficits, we are getting a very large yellow flashing light from the rating agencies. They are saying this--this was an October 22 news report from Reuters: The United States, which posted a record deficit in the last fiscal year, may lose its AAA rating if it does not reduce the gap to a manageable level in the next 3-4 years. That is according to Moody's Investors Service. The AAA rating of the United States is not guaranteed. Steve Hess, Moody's lead analyst for the United States, said in an interview on Reuters Television: So if you do not get the deficit down in the next 3-4 years to a sustainable level, then the rating will be in jeopardy. Those are words that should make us in the Congress pause because they are directed right at us. The most sophisticated and important evaluator of America's deficit situation and debt, Moody's ratings service, is saying if we as a Congress do not do something within the next 3 to 4 years to bring our debt under control, and our deficits down, we may jeopardize the AAA rating of the United States. I can think of nothing that would be more irresponsible for a Congress to do to the American people than to jeopardize and put at risk the AAA rating of this country. Maybe only after disarming ourselves in the face of a potential terrorist threat or the use of a weapon of mass destruction, I can think of nothing which would have a larger impact on our populous than for the Congress to put in place fiscal policies which would jeopardize our ability to sell bonds, American debt around the world at a reasonable price, and put at risk the value of the dollar and the status of the dollar as the reserve currency of the world, as a result of putting at risk the AAA rating of our bonds. That is exactly what we are doing. This gentleman, Mr. Hess, said we have to, within the next 3 or 4 years, put in place a manageable plan, a realistic plan, that will address the deficit and debt of the United States. Are we doing that now? We are doing just the opposite. Just yesterday this Congress tried to pass $300 billion of new debt for ordinary expenses, for daily expenses of paying doctors. We were going to give an IOU to our children and our grandchildren 5, 10 years from now. Total irresponsibility. Last week it was the White House suggesting we do the exact same thing in Social Security for $13 billion. A couple of months ago we did the same thing on cash for clunkers for $5 billion. A budget was passed by this Congress, which does it for the whole Nation--it creates $1 trillion of unfunded liability and deficits for the next 10 years every year. Now we have this health care bill coming at us, which is going to increase the size of the government by $1 to $2 trillion, which is represented that it is paid for, but that is only because they phase in the expenses 4 years after they phase in the income and thus are able to match 10 years of income versus 6 years of expenses. So they claim it is paid for. When the bill is fully phased in, it will not be paid for. It is going to be a huge cost to the Federal Government, and even if it were paid for, it would be taking massive resources in the area of Medicare by $400 billion and it is going to raise fees by $500 billion. Instead of using those resources to reduce the debt, it will use them to create a brand new major entitlement at a time when we have on the books entitlements which we can't afford today. Medicare has a $34 trillion unfunded liability. Yet we will add a new major entitlement on top of Medicare and Medicaid, and we will pay for part of it by cutting Medicare. Still, instead of cutting Medicare for the purposes of paying for that, we should be using Medicare savings for the purposes of making Medicare solvent. We should not be growing the government. We are going to do a $1 to $2 trillion increase in the size of government. I will absolutely guarantee that that will not be fully paid for and that a large percentage of that will go to our debt. On top of having deficits which are already projected to be a trillion dollars a year for the next 10 years, we are seeing a Congress which is being incredibly spendthrift in its approach to all sorts of areas: $300 billion to pay doctors, new debt; and who knows how much out of this health care bill. I am willing to bet the family farm that it will be well over a trillion dollars of new debt when it is fully phased in; new programs in the area of Social Security, which is already bankrupt, unpaid for, added to the debt; new programs for this favorite group, cash for clunkers or whatever the issue is of the day. We are totally out of control on the spending side of the ledger. It is not a revenue issue. It is a spending issue. Revenues have historically been about 19 percent of GDP. Spending has been about 20 percent of GDP. But under the budget which we have been given, independent of the health care bill, spending goes from 20 percent of GDP up to 23 percent. And when we throw in this health care bill, we are heading toward 24, 25 percent of GDP. Revenues, if they maintain their historic levels once the recession is over, go back to 19 percent of GDP, but we still have a 6 to 7-percent gap because spending has gone up so much. I appreciate the fact that this administration comes with a philosophy--and they won the election--that we create prosperity by growing the government. The President said that. People around him said that. Members on the other side of the aisle say that. We create prosperity by growing the government. But we don't create prosperity if we let the government grow so fast that it can't be paid for. Government cannot be allowed to grow any faster than it can be paid for. In my opinion, prosperity doesn't come from the government to begin with. Prosperity comes from entrepreneurs who are willing to create risks and create jobs. Independent of that philosophical debate, the simple fact is, if we allow government to grow a lot faster than we have the capacity to pay for it, we create debt. It is that debt and these independent people looking at that debt who are giving us these massive caution lights and saying: Slow down, get your house in order. People who are buying our debt around the world are saying it. People who use the dollar as reserve currency around the world are saying it. And now Moody's, the clear, independent arbiter of what the value of debt is and what its likelihood of repayment is, is saying it in the most stark way. The AAA rating of the United States is not guaranteed, Steve Hess of Moody's, said. So if they don't get the deficit down in the next 3 to 4 years to a sustainable level, the rating will be in jeopardy. We need to heed those words. We need to get some discipline around here, and we need to stop having proposals which dramatically increase the size of the government and continue to put us on a path where we pass debt on to our children which will cause them to have a much lower standard of living than we had and which will cause them to be unable to send their children to college, to buy their first home and afford a car, because they will be confronting a nation where the debt is absorbing so much of the productivity of the economy or where inflation has basically priced them out of the markets. I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, I believe I am recognized now for 10 minutes.

Mr. GREGG. Mr. President, I wish to speak on another topic, but I was fascinated by the presentation of the Senator from Tennessee. I think we are all concerned about the direction of this calling out. I take it the Senator from Tennessee is suggesting this administration is ``Nixifying'' the White House; is that correct?

Mr. GREGG. I may have just made up that word. Hopefully, it will be added to the lexicon.

Mr. GREGG. Mr. President, I thank the Senator from Tennessee. He has made some valuable points on that issue.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today to continue a discussion I have pursued on this floor a few times, and it deals with where our country is going and what we are passing on to our children. I often quote the chairman of the Budget Committee, Senator Conrad from North Dakota, because I have immense respect for him. He has said--and I agree with him and I think most Americans, when they think about it, agree with him--that the debt is the threat, the fact that we as a nation are running up this incredible debt which we are going to pass on to our children. To try to put it in context is very difficult because the numbers are so huge. I have talked about it numerous times here--the fact that we are running deficits at approximately $1 trillion over the next 10 years under the President's budget; that we are seeing 5 to 6 percent of GDP in deficits; that the public debt goes from about 38 percent of GDP up to well over 80 percent of GDP under the most recent estimates. But these numbers are incomprehensible to people because they are so big. We are talking trillions and trillions of dollars, and the implication of these numbers is staggering to our next generation--to our children and our children's children--because it means they have to bear the burden of paying this debt that is going to be put on their backs. Last week, the deficit for this last fiscal year was pegged at about $1.4 trillion--an incredible amount. That is three times the largest debt in our history, in numeric terms. As a percentage of GDP, we haven't had those types of numbers since World War II. Nobody is arguing that deficit is not an event and something we don't like but that we probably have to tolerate because of the fact that we have been through this very difficult situation with the recession and the potential meltdown of our financial houses. It took a lot of money to try to stabilize the situation, and I am not holding that against this Presidency at all. The problem is, as we go forward we are seeing these deficits expand. There is no reason to maintain that type of deficit once we are past this recessionary period, once the financial situation has been settled down. For all intents and purposes, we are moving past that situation, so the deficits should start coming down. But they aren't coming down. They aren't coming down. And today we are about to see one of the reasons they aren't coming down because today it is being proposed that we add another $250 billion to the debt by doing something called the doctors fix and not paying for it. It is not an extraordinarily complicated issue. Basically, we don't reimburse doctors at a rate they should be reimbursed under Medicare because of a rule we passed back in the 1990s. It gets cut arbitrarily and in a way which has no relationship to what is a proper reimbursement rate. So every year since we passed that rule and it turned out it wasn't going to work right, we have corrected that. We have reimbursed the doctors at a reasonable rate. But every year we have done that, we have paid for that change, so that the cost of reimbursing doctors fairly did not get passed on to our children. I mean, if you pass that cost on to our children, when somebody goes to get an eye exam, someone who is in their eighties or seventies or sixties and who is on Medicare, when they get the bill from the doctor, essentially we are saying: Oh, I am sorry, the government is not going to pay that--the government you are a part of today. We are going to take that bill and give it to a child who is not even born yet, and they are going to have to pay that bill. But it is an expense today, and it should be paid today by the government. We are having this proposed today on this floor, by this administration: that we should spend $250 billion to correct this doctors fix problem for the next 10 years, which is about what it will cost, but not pay for it, just simply take it and send the bill off to our kids. It is actually more than $250 billion because that $250 billion, when you put it on the debt, will generate interest responsibilities of about $50 billion. So it is actually a $300 billion item. That is not small change; that is a third of a trillion dollars. That is huge money. That is a tremendous burden to transfer over to our children. Do you know why this is being done? It is being done for a very cynical reason. The health care reform package is being discussed somewhere in this building behind closed doors. It is being written in some office over on that side of the Capitol by three or four Members of the Senate and a lot of staff from the Democratic side, with no participation by Republican Members, no participation by the American people, and the press is totally locked out of the room. The bill is being rewritten over there, but we do know that within the parameters of the bill is the representation that it won't cost more than $1 trillion over a 10-year period. So all sorts of games are being played to try to keep it under $1 trillion. The most significant and most cynical and most inappropriate game-- though it is not a game, really--the most inappropriate action is this idea that they are going to take $250 billion to fix the doctors reimbursement program, which is clearly part of health care, and move it entirely out of the health care system reform effort. They will move it over here somewhere and claim they don't have to pay for it. They will just send the bill to the kids. Don't worry about it, it is only $250 billion. Just send the bill to the kids. Don't worry about it. And then, voila, they will have $250 billion they can spend on health care reform that should have been used for the doctors fix. But now, since they have claimed the doctors fix doesn't matter--it is somewhere over here, out of sight, out of mind, being taken care of by our children and grandchildren--voila, they can spend that $250 billion on goodies, on initiatives within the new health care reform bill, which will cost the taxpayers $250 billion in order to do it. And I presume it will get them a few constituencies to support them because they have just spent $250 billion on them. So the true cynicism of this is that it doubles up the doctors fix cost. Not only does the doctors fix not get paid for, but it will then create $250 billion worth of new spending. So it is actually a doubling up of this whole exercise. It is a doubling down event here. You know, it is almost a Bernie Madoff--well, it is a Bernie Madoff approach to funding. I mean, basically, this is an entire scam. Unfortunately, in this instance--and obviously in the Bernie Madoff instance the people who invested with him were wiped out, but they made a choice to invest with him. Our children and grandchildren are going to get this bill without any rights. This $250 billion bill is going to be sent to them, and then the spending is going to occur, which they are also going to have to pay for. It is going to be added on top of the health care bill. It is Bernie Madoff comes to Washington and does our budgeting for us, and it is inexcusable that we would do this to the next generation. Some are suggesting: Well, let's do a 1-year or a 2-year fix. This was the original plan of Senator Baucus with regard to his bill. Let's just sort of ignore the fact that the doctor problem exists for the next 10 years even though we are doing a 10-year health care reform bill here. What is the effect of that? Well, yes, for at least 1 or 2 years you pay for it. That was the proposal in the original bill that came out of the Finance Committee--1 year, I believe, they paid for it, 9 years they didn't pay for it. What did that mean? One year paid for was $11 billion, I think. So we know the cost of the whole thing for 10 years is $250 billion. So what they got was $239 billion to spend under the Baucus bill as it came out of the Finance Committee because they just simply ignored the concept that the doctors fix had to be done too. That also is a pretty cynical act--not as cynical as the idea you are going to pass the full $250 billion fix and not pay for it, any of it, which is what we will be voting on later today, but still pretty cynical in that they would basically be spending $239 billion which they know we don't have.

Mr. GREGG. I ask unanimous consent to speak for an additional 30 seconds.

Mr. GREGG. So they know we don't have the $239 billion, but at least they admit it is there and they don't try to pass the whole bill off to our children. So as we go forward in this health care debate, let's have no more sanctimonious claims that we are being fiscally responsible and producing bills that are in balance and that don't add to the deficit, not when we put a $250 billion IOU on our children's backs. It is totally inappropriate. Mr. President, I yield the floor.