Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, here is the problem. The budget before us does absolutely nothing in the area of addressing entitlement reform and savings and does a significant amount of spending money, a significant amount of tax increases. It raises the tax burden of the American people from its historic level 18.2 percent up to 20 percent. It raises taxes by hundreds of billions of dollars. It raises spending by tens of billions of dollars but does not address the most fundamental issue we face as a nation, which is the pending financial meltdown of this country as a result of the baby boom generation retiring, and our children cannot afford the costs. The Senator from Texas is right, there are zero savings on the mandatory side of this budget. When the chairman gets up and says there is $15 billion of savings, he forgot to finish the sentence. There is $30 billion of spending. So actually there is a net loss on the entitlement side for the proposed budget. That has been adjusted by the amendment of Senator Baucus, so it is now basically a wash where we have no savings, $15 billion of savings, $15 billion of new spending in entitlement programs. So there is a zero on that account. What is being proposed by the President is entirely reasonable. What is being proposed by Senator Cornyn is reasonable. He suggests going forward we should accurately reflect the reimbursement rate for hospitals and for providers--not doctors in this instance but for providers. It doesn't affect beneficiaries. But to call this a freeze or a cut is totally disingenuous because it is neither. Spending is going to increase dramatically in the entitlement accounts, especially in Medicare, by trillions of dollars. Only in the nomenclature of the Democratic side of the aisle is a trillion dollars of increase called a cut when it is reduced from trillions to trillions less .2 percent, two-tenths--two-hundredths of 1 percent. That being said, it is not even a freeze or reduction from the concept of the way it is structured. What is being proposed in the Cornyn amendment, which is reflective of the President's original proposal, which is the reimbursement rate, which is now inflated by 1.5 percent because of savings and technological advances, so the reimbursement rate is about 1.2 percent more than it should be to accurately reflect the fair reimbursement rate because the reimbursement rate is inflated by savings and benefits which providers get through cost savings and technological advantages--what is being proposed by the Cornyn amendment is we take half that inflated payment--just half of it--and put it back into making the system more solvent so our kids can afford the system and we will have a solvent system for our seniors. That is what this is about: taking half of that inflated payment, which is about a six-tenths of 1 percent adjustment. Yes, it translates into big dollars, but as a practical matter, it is a fair adjustment, and we save it so that our kids can benefit from it by having a more affordable system and our seniors can benefit from it. The President's program does not affect senior citizens. It affects providers. Only the wealthiest seniors citizens will be impacted by the President's program, and we will get to that amendment next, which will be the Part D premium and how that should be reimbursed by wealthy seniors. This is a reasonable amendment. It is regrettable it wasn't included in this budget. The Senator said this budget is only going to be passed by the other side. Quite honestly, if the Senator had accepted this amendment and the Ensign amendment which will be next, which would make the Part D premium properly reimbursed, and had taken the Kyl amendment yesterday, he would have a bipartisan budget. He would have a bipartisan budget. But he wants to stick to the tax-and-spend, do- nothing-on-entitlements budget he brought to the floor. He doesn't have a bipartisan budget. We are trying to help him out. We are trying to make it bipartisan, more reasonable and, most importantly, helping out our kids and people who are going to retire by making the Medicare system more solvent. This amendment, if it is adopted, and the next one--if those two amendments are adopted, they will address the outyear insolvency of the Medicare trust fund, which is now about $32 billion, and will reduce that insolvency between 25 percent and 35 percent. That is huge and is good news. It would be very good news if we do it. We should do it. If we don't do it, in 10, 15 years, we will have to pay the piper. The system will melt down, our kids will be stuck with the bills, and their lifestyles will be impacted in a very negative way. Why don't we get a time agreement on this amendment so we can go to the next amendment and move on?

Mr. GREGG. Mr. President, I have attempted not to respond to the Senator from Ohio because he appears to be stuck in the period of 1960, when, apparently, our position was defined by somebody who was here in 1960. I wasn't here in 1960. I probably won't be here in 2025. In fact, I am absolutely sure I won't be. But that is going to be when this Medicare system goes broke. What I am concerned about is my children, America's children, and their children being able to afford this system when I retire and the rest of my generation retires and makes it basically unaffordable. The proposals the President has put forward are an attempt to make the system solvent, or at least more solvent. It doesn't bring it into solvency, and there are reasons for that. The Senator from North Dakota makes a good point: Rural hospitals are not reimbursed correctly under the formula. But that is not the issue which is being raised by the Cornyn amendment. That issue, actually, will be addressed by the Grassley amendment, which I understand is going to be offered to get the reimbursement straight. What is very obvious is that there is an inflated reimbursement rate occurring within Medicare of about 1.2 percent due to technology advancements and due to savings through efficiencies, which is inuring to the benefit of the system at the expense of the long-term life structure of the system. It is reasonable to take half that benefit-- half that benefit--and apply it to make sure the system has more solvency to it. Amendment No. 472 Mr. President, I send an amendment to the desk on behalf of Senator Ensign, and I ask that it be reported.

Mr. GREGG. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. GREGG. Mr. President, the Ensign amendment addresses what the Senator from Ohio started speaking on. He anticipated, I guess, this amendment. To try to explain the way the Medicare system works today, Part A you pay for, theoretically, with your hospital insurance. Part B, which deals with doctors, you pay for, theoretically, with a premium, but the premium is subsidized to the tune of 75 percent of the cost of the premium. Part D, you don't pay for anything, for all intents and purposes, except for the insurance, to the extent you buy insurance. But the actual coverage that is federally supplied is not paid for. Part D is a drug benefit. This amendment says that high-income individuals, people with incomes over $80,000 individually and $160,000 jointly, should have to pay a fair proportion of the premium of Part D that is now being subsidized by working Americans. Let me try to put it in context. There is a single woman working in a restaurant in downtown Des Moines or there is a mother and father working on an assembly line in Poughkeepsie or there is a father working in a garage in New Hampshire. Those individuals, working for a living and trying to make ends meet, trying to do all the things you want to do to make your life better, are paying the cost of the drug insurance for retired Senators and for people who have extraordinary amounts of money--for example, Bill Gates' father. I don't mean to pick on Bill Gates' father, I am sure he is a nice man, but he has enough money to pay for his drug insurance under the Part D Program, as can retired Senators, in most instances. Yet those people are being subsidized by working Americans because we have this system which doesn't require people to pay any portion of the fair cost of their drug insurance. We do it under Part B, we do require high-income people to pay, but under Part D, we don't. Now, with Part B, we don't require them to pay enough, but we at least require them to pay something. Part D, we don't. So this amendment simply says that in the Part D Program, high-income people, people with incomes over $80,000 and $160,000, should have to pay some of their cost. I find it incredible that the Senator from Ohio opposes that on the grounds of fairness to working Americans. The working Americans are the ones having to pay that cost. It is just incomprehensible to me that the other side of the aisle, which consistently talks in terms of making sure high-income people pay a fair share of the burden of the Federal Government's costs, are not willing to ask those same high-income individuals pay the fair share of the cost of Medicare. And we are not even asking for a fair share, quite honestly. So that is what the Ensign amendment does. It is a very appropriate amendment, and it would save a significant amount of money over the long term for the Medicare trust fund. I think it is somewhere around $1 trillion. It would actually move the Medicare system toward solvency by $1 trillion over the actuarial life, which is 75 years. In the short term, it is obviously nowhere near that number. But it is a significant effort to try to put in place a good policy, a correct policy, which is that high-income individuals should pay a fairer cost of their drug benefit and at the same time use those funds to make the Medicare system more solvent for seniors who are going to be retiring in the future. It is very reasonable. It only affects 5 percent of seniors, which means 95 percent of seniors are not impacted at all and, thus, it should be done. It should be done now. We shouldn't wait to do it. We should do it now because now this problem is coming at us pretty fast. If we don't get started on it, it is like that old oil filter ad: You can pay me now or pay me later. If we wait until later, this will be extraordinarily expensive. This is one of the things we should do, along with the original Cornyn amendment. We should also do that.

Mr. GREGG. Mr. President, I appreciate the intensity of the Senator from North Dakota. I wish it would be followed up with legislative language. I have heard his talk before on Medicare and on his family situation, but he is going to be giving that same talk 10 years from now at the rate we are going around here. We are not getting anything done. These proposals would get things done. The concept that this is going to close a hospital, a .6 percent reduction in the reimbursement rate, which is going up? That is absurd on its face. No, what is being proposed here is a legitimate effort to try to get at the underlying problem, which is the trust fund has a $32 trillion unfunded liability--trillion. That is almost the net worth of the entire country. That is almost as much in taxes as have been paid in since the country started. It is a huge problem. This budget does nothing about it, even though there has been significant rhetoric from the other side of the aisle about that. We are suggesting we do something about it. Sure, the budget doesn't do the nuts and bolts of policy, but the budget has a lot of policy in it. You cannot on one hand say we don't do nuts and bolts of policy and then have a budget which is laden with policy--assumptions and specific language--in SCHIP, in taxes, in war fighting. It is inconsistent. This is a reasoned approach, both of these amendments. Why shouldn't somebody making more than $160,000 a year pay some fair percentage of their drug costs so somebody who does not have that type of money can afford the drug costs down the road? Of course, they should. These two amendments are as close to apple pie as you can get if you are going to try to address the issue of Medicare. They are reasonable. If we can't do this, then we can't fix the Medicare system. That is the problem. If we do not fix the Medicare system on our watch--since we are the problem, the baby boom generation--then we have real issues. That is why we should proceed with these amendments. I see Senator Smith is here. I suggest we move on to his amendment so we can get on the time.

Mr. GREGG. Why don't we agree by unanimous consent that after Senator Stabenow speaks for 5 minutes we go to Senator Smith?

Mr. GREGG. Mr. President, I ask unanimous consent that the pending amendment, which I understand is the Ensign amendment--is that correct?

Mr. GREGG. Be set aside so I can send up a modification that has been cleared by the other side relative to the Cornyn amendment, and I ask unanimous consent that the Cornyn amendment be modified.

Mr. GREGG. Cornyn amendment, as modified.

Mr. GREGG. Yes, Mr. President. I thank the Senator. Mr. President, if you are going to vote against the Ensign amendment, you are just simply saying millionaires in this country should not have to pay for their drug benefit under Medicare if they are retired and have Medicare eligibility; and all millionaires who are retired and over a certain age have Medicare eligibility for drug benefits. It is that simple. To say the Budget Committee should not address this issue has the practical effect of saying the Budget Committee should not address policy at the Federal level. The Budget Committee, of course, has a right to address this issue and should address it. In fact, it is the proper place to address it as the initial step. In fact, you could argue that if the Budget Committee does not address it, it will never get done because the protection that comes from reconciliation, which only the Budget Committee can give an authorizing committee--that is, the Finance Committee, the Armed Services Committee, or any other committee--derives from the Budget resolution, which is authored by the Budget Committee. You probably are not going to pass these types of changes without reconciliation protection. So that is a straw dog argument of the first order. This Ensign amendment specifically is an attempt to straighten out what was clearly an incorrect decision when Part D was put in place. The Medicare trust fund is $32 trillion out of whack. In other words, we know it is going to cost $32 trillion--that is with a ``t.'' Try to understand what that means--$1 trillion. Nobody can understand $1 trillion, but it is an amount of money that is staggering. All the taxes paid in America since our country became a government, since our country was created, amount to something like $42 trillion. The entire net worth of America--all your cars, all your stocks, all the houses Americans own--represents something like $50 trillion, or maybe it is not even that high--$47 trillion. So we have a liability, which we have no idea how we are going to pay for, of $32 trillion. The interesting part--that is why I want to point this out again--is the drug benefit, when it was passed, aggravated the liability of the trust fund to the tune of $8 trillion. So of that $32 trillion--although this chart could be used to explain this--of that $32 trillion, $8 trillion of that unfunded liability was generated by the drug benefit. It shouldn't have been that high. One way it should have been addressed was that we should have had wealthy seniors, millionaire seniors, which is what the Ensign amendment does, paying a fair amount of the cost of that drug benefit. The Senator from North Dakota says: Well, that can't be done. Of course, it can be done. Of course, it can be done. There are all sorts of reports that are filed on CMS on the cost of reimbursement and how they are structuring these insurance plans, and there is no question but it can be done. More importantly, it should be done, as a matter of fairness, for working Americans who are carrying the burden of seniors. I notice Senator Dorgan is here and he wants to talk, so I will reserve on that. The point is pretty important. If you want to vote for working Americans to not have to subsidize millionaire Americans who are retired, you are going to want to vote for the Ensign amendment.

Mr. GREGG. Mr. President, I ask for the yeas and nays.

Mr. GREGG. Mr. President, I yield the time to the Senator from Colorado.

Mr. GREGG. Mr. President, I ask unanimous consent that this be a 10- minute vote, and the following votes be 10-minute votes.

Mr. GREGG. Mr. President, we support the amendment on our side. We will be happy to do it by a voice vote if the Senator wants to, but I suspect we are going to have a rollcall vote?

Mr. GREGG. I understand the next amendment will be that of Senator Cornyn, dealing with the SCHIP issue. Is that correct?

Mr. GREGG. For an amendment.

Mr. GREGG. Further, if the Senator will yield?

Mr. GREGG. That there be side-by-sides reserved for all amendments that are offered in this group, and that the initial amendment be the first amendment voted on.

Mr. GREGG. So the offered amendment would be the first amendment voted on in the side-by-sides.

Mr. GREGG. No. If there is a side-by-side, it would be the understanding that the initial amendment, the underlying amendment, would be the first one voted on.

Mr. GREGG. It would be an amendment like a second degree.

Mr. GREGG. OK. But side-by-sides reserved for all the amendments.

Mr. GREGG. Mr. President, we have not seen the Bayh amendment.

Mr. GREGG. Mr. President, what is the time situation?

Mr. GREGG. Mr. President, the amendment of the Senator from Vermont, the Senator from across the river, as we say in New Hampshire, a Senator from the State where all our bad weather comes from, actually-- the sunshine comes from New Hampshire--this amendment raises taxes by something like $44 billion. The purpose of it is to spend that money on special education. Special education is an important program. In fact, it is so important that if you look at the priorities this administration has put in place in the education accounts since it came into office, it has increased special education funding by I think a factor that is three times greater--I believe that is the number--than the Clinton administration increased special education funding. This administration, in the first year in office, jumped special education by $1 billion. The next year, it jumped special education funding by another $1 billion, and so on and so on. The increase in special education funding under this administration has been the largest increase of any administration, both percentage-wise and in dollars, over its term. But to raise taxes $44 billion is a pretty big tax increase. You can throw out the word ``millionaire.'' What we are talking about here are small businesspeople. Eighty-three percent of the people who would be hit by the top rate are small businesspeople. It is all rates. He is talking about repealing the President's tax cuts that have generated so much economic activity around this country and have created a revenue stream into this Government which exceeds the historical norm. In other words, even though it is counterintuitive to some folks, and especially to some of our editorial boards, such as The New York Times, we have actually seen an increase, a very significant increase in revenues by reducing the tax rates in this country so they are fair, so that people are willing to go out and take risks with their dollars, be entrepreneurial and, as a result, create jobs and economic activity, which is translated into income for the Federal Government. In fact, in the last 3 years, we have received more income, larger increases in income in Federal revenue than at any time in our history, huge jumps in income, and we are now receiving more income as a Federal Government than is the historic norm--18.5 percent of gross national product in income to the Federal Government. The norm is usually 18.2 percent. In addition, these tax rates which were put in place which are repealed under this proposal have created a more aggressive tax system. During the Clinton years, the top 20 percent of wage-earners--of income tax payers in this country paid about 81 percent of the Federal taxes. Today, that same top 20 percent--they are not the same people, because the genius of our society is that people go in and out of that group depending on how capable they are. Some people make money and get in; some people lose money and go out. But that same group, that top 20 percent, is paying almost 85 percent of the total income tax burden. So it is more progressive at the top end than it was during the Clinton years. Even though the tax rates may be lower, the generation of income tax--people who are paying it--is more progressive, and at the lower end, the bottom 40 percent of the people who pay income taxes or who are subject to income tax in this country--they don't actually pay the money; they get money back from the earned-income tax credit--that group of individuals, the 40 percent there, is getting twice as much back under the earned-income tax credit as they did in the Clinton years. So at the top, you have people paying more. At the bottom, you have people getting more back. That is called progressivity. So we are getting more revenue. We are getting historic highs in revenue. We are beyond the traditional amount we get in revenue, and we have a more progressive tax system. What is the Senator from Vermont suggesting? Increase taxes by $44 billion. Well, I have referred to this budget from the other side of the aisle as tax-and-spend. Very simply, it is a tax-and-spend budget. It adds new spending. It adds $900 billion in new taxes. It increases the debt by $2.2 trillion. It does nothing to control spending, either on the discretionary side or on the mandatory side. If you pass this amendment, I suppose you just supersized it in the tax size. You can go into McDonald's and you can get a regular Coke. This is sort of a ``regular'' Democratic tax-and-spend bill. There are a lot of new taxes--$900 billion--but that is sort of out of the mainstream of the party. But the Senator from Vermont has decided we are going to ``supersize'' this tax increase to $44 billion. So, obviously, we oppose the amendment. This concept of expanding funding to IDEA is a good concept, but it should come within the ordering of priorities. It shouldn't come by a dramatic tax increase. In fact, this President has shown he is going to reorder priorities to accomplish that during his term in office. Mr. President, I reserve the remainder of our time at this point.