Kay Hutchison

Mrs. HUTCHISON

Mrs. HUTCHISON. I thank the Chair. Mr. President, we have been talking about the Crapo motion and the new taxes that are in this bill. There are so many new taxes that it is going to increase the cost of health care to every individual who has health insurance. It will also tax the people who don't have health insurance. It will tax the people who have too much health insurance. The taxes in this bill are almost mind-boggling. Yesterday we talked about the cuts in Medicare. But we are also talking now about the $\1/2\ trillion in tax increases, $500 billion of tax increases. What Senator Crapo's motion will do is to say that we want to go back to the promise made by the President that no one who makes under $200,000 or a couple who makes under $250,000 would have any tax increases. It recommits the bill and takes out everything that would tax individuals at that level because the promise was made to the American people. Senator Crapo's motion would certainly benefit those who have high- benefit plans which are going to have a 40-percent excise tax in this bill. If your plan is considered high benefit and you make under $200,000 a year or you are a couple making under $250,000 a year, you should not have to pay, because your benefits are better than the government has said they should be. We would help the union member, for instance, because the unions do have high-benefit plans. We would help those union members who are making under $200,000 a year, if they are single, to make sure that they are not going to pay a tax for having too much coverage. Then there are the individuals who have no coverage or too little coverage who are going to have to pay an individual tax in this bill of $750. Surely if someone can't afford to have health insurance, we should not be taxing them. The Crapo motion will assure that when this goes back to the committee, someone would not be subject to the individual mandated tax, if they make under $200,000 a year, which they surely probably do, or if they have a high-benefit plan and they make under that amount. It is trying to say that promise that the President made would be kept. I also wish to talk about another issue in this bill. One would think that the bill takes effect in 2014, so the taxes would take effect in 2014 as well, that everything will come together and start in 2014. That is what one would think, but they would be wrong. That is not the case. In fact, the biggest part of the taxes in this bill will take effect next month, less than 1 month from now. The taxes that are going to increase the cost of health care premiums, prescription drugs, equipment that you would use for medical care--the taxes start next month. The bill imposes taxes for 4 years before any person would be able to sign up for any of the plans that are going to be available, presumably, under this bill. Let's walk through this: $22 billion in taxes on prescription drug manufacturers would start next month; $19 billion in taxes on medical device manufacturers, next month; $60 billion in taxes on insurance companies across the board, next month. What is going to happen? Of course, the cost of all of those items will go up. Americans will start next month paying more in insurance premiums. Americans will pay more for their prescription drugs and more for their medical devices because those taxes start next month for supposed programs that are going to start in 2014. Well, maybe you would think the benefits would start coming in 2011, 2012, 2013. Not at all. Nothing starts in benefits or programs until 2014. But there are more taxes that come before 2014. In 2013, taxes on high-benefit plans take effect: $149 billion. This will affect union members, surely people making under $200,000. They will be affected starting in 2013, but any benefits from this bill would take effect a whole year later. The limit on itemized deductions for medical expenses is also changed. Under this bill, you would have to spend 10 percent of your income on medical expenses before you could take a deduction. This is for people who have a terrible accident or a debilitating high-cost disease, such as a cancer treatment, maybe a clinical trial. So present law is 7.5 percent of your income, and you can start deducting these expenses. But with the new bill, starting in 2013, you have to go to the 10-percent threshold before you can have those deductions. So that would be another $15 billion in taxes to individuals. Finally, in 2014, after 4 years of taxes and increases in premiums and medical devices and prescription drugs, then you would start seeing the rest of the bill take effect. In 2014, you still have more taxes. Mr. President, $28 billion in employer taxes will start in 2014. These are for employers who cannot afford to meet the threshold of what they will have to cover for their employees. Or individuals who cannot afford health care will have $8 billion in taxes. That starts in 2014. I am working with Senator Thune. There will be a Hutchison-Thune motion to commit this bill that will say the taxes start when the implementation of the bill starts. I think that is a matter of fairness. We want to commit the bill and say: Everything should start at once. How can we tax people for 4 years, raise their prices on insurance premiums, raise their prices on drugs, raise their prices on medical devices when they get none of the opportunities that would be in this bill until 2014? I am going to be working with Senator Thune, Senator Grassley, and Senator Hatch to try to make the corrections in this bill that will present transparency and fairness to the public about what these taxes are and when they start, then, when the implementation of the program starts. It is so important we have the ability to say to the American people, if this bill passes: You are not going to be taxed, your prices are not going to go up, your premiums are not going to go up--any more than they already have, caused by the increased taxes in this bill--at least until the bill is implemented. We are going to try to do that in the bill for the American people very soon. I am very much looking forward to talking about this issue. I talked to someone last night who heard us starting to talk about the taxes in this bill, and they were astounded.

Mrs. HUTCHISON. They were astounded. We are going to try to give relief to the American people and have a bill that will truly not have the taxes and mandates that are there now that start 4 years before the bill is implemented. Mr. President, I yield the floor.

Mrs. HUTCHISON

Mrs. HUTCHISON. Madam President, I rise today to talk about another amendment that is pending, the Nelson-Hatch-Casey amendment. This is an amendment that I think has been discussed in the last day as well. That is the amendment that would assure that no Federal funds are spent for abortion. That was unclear. It is unclear in the underlying bill. I think it is very important we talk about it, that we make sure it is very clear exactly what the Nelson-Hatch-Casey amendment does; and that is, it would bar Federal funding for abortion, which is basically applying the Hyde amendment to the programs under this health care bill. Since the Hyde amendment was first passed in 1977, the Senate has had to vote on this issue many times, probably just about every year, and I have consistently voted to prohibit Federal funding for abortions, as I know my colleague and friend from Utah has done, as well as the Democratic sponsors of this amendment. Yet it seems that some Members were on the floor last night misconstruing exactly what the Nelson-Hatch-Casey amendment does. Specifically, their claim was that the Hyde language only bars direct funding for elective abortions while the Nelson-Hatch-Casey amendment bars funding of an entire benefits package that includes elective abortions and therefore is unprecedented. I wish to ask the distinguished Senator from Utah, what exactly did the Hyde language say? Let's clarify what Hyde was, so we can then determine if your amendment is the same.

Mrs. HUTCHISON. So Federal funds are prohibited from being used in abortions in that particular bill. What about programs such as CHIP, that was created in the Balanced Budget Act? And in 2009, it was reauthorized by Congress and signed by the President earlier this year. What about the CHIP program?

Mrs. HUTCHISON. I would assume you do know what is in that bill. What about the Federal Employees Health Benefits Plan, what does it say?

Mrs. HUTCHISON. Well, isn't that the same as the language in the Nelson-Hatch-Casey amendment?

Mrs. HUTCHISON. So based on what you have said, this is not new Federal abortion policy. The Hyde amendment currently applies to the plans discussed, including the plans that Members of Congress have. And the abortion protections for all of the Federal health programs all say exactly the same thing. The amendment we are going to vote on that is the Nelson-Hatch-Casey amendment would preserve the three-decades-long precedent--that is what your amendment does--and that we must pass it if we are going to guarantee that the bill that is on the floor is properly amended so it is the same as our 30 years of abortion Federal policy in this country?

Mrs. HUTCHISON. I thank the Senator for the explanation. I thank the Senator from Utah because I do think it is important people know. There has been a lot of questions raised about the bill and whether it would be a foot in the door for changing a policy that has been the law of our country, and accepted as such. Whether it was a Democratic- controlled Congress or a Republican-controlled Congress, I think everyone has agreed this Hyde amendment language has protected Federal taxpayers who might have a very firm conviction against abortion so they would not have to be subsidizing this procedure.

Mrs. HUTCHISON

Mrs. HUTCHISON. I will.

Mrs. HUTCHISON. Madam President, we have spent the last few days highlighting how this health care reform bill is paid for by cutting benefits to seniors, jeopardizing their access to care. Almost $500 billion will be cut from the Medicare Program. But this bill also imposes $\1/2\ trillion in new taxes. These are taxes that hit every American and virtually every health care business or related business in the country. During an economic downturn, this approach is counterintuitive. These taxes will discourage investment and hiring. We are in one of the worst economic downturns in the history of our country. We do not need to tell anybody that. We are all feeling it. We know people who are suffering right now. I look at what has been done in the past when we have had economic downturns, and I look at President Kennedy, President Reagan, President Bush. They lowered taxes. What happened? The economy was spurred. Lower taxes have proven to spur the economy. Yet in this bill we see $\1/2\ trillion in new taxes on families and small businesses. Let's walk through some of these taxes. Employer taxes. Madam President, $28 billion in new taxes is imposed on businesses that do not provide health insurance to their employees. To avoid the tax, an employer has to provide the right kind of insurance--insurance that the Federal Government approves. It is going to be a certain percentage and have certain coverage requirements. Employers who do not provide the right kind of insurance could see a penalty as high as $3,000 per employee. We should be encouraging people to hire in this kind of environment. That should be job No. 1: creating jobs. Yet imposing taxes and fines are what is in this bill, and that is not going to encourage hiring; it is going to discourage hiring. That is economics 101. Individual taxes: There are $8 billion in taxes for those who don't purchase insurance on their own. The tax is $750 per person. Again, because you are insured today does not mean you will avoid the tax. You must have the right kind of insurance--insurance that the Federal Government approves and says is the right amount of insurance. How about the taxes on high-benefit plans? There are $149 billion in taxes on health insurance plans that the Federal Government says are too robust. These high-benefit plans--Cadillac plans some call them-- would be subject to a 40-percent excise tax. To make it worse, the tax is not indexed, so it is a new AMT, a new alternative minimum tax that everyone says was not supposed to encroach on lower income people, but, in fact, it has because it is not indexed for inflation. So here we are. In this bill, you get taxed if you don't provide enough benefits and you get taxed if you provide too many benefits. So this is beginning to sound like government-run health care to me, and I can only imagine how the unions feel because they are the ones that have these high-benefit plans and here they are under fire because they have too much coverage. Medicare payroll tax: This is the new payroll tax that is imposed on individuals making more than $200,000 and couples making more than $250,000. That tax raises another $54 billion. This additional payroll tax is a marriage penalty. It is not indexed to inflation, meaning it is another AMT in the making because today, that may sound high-- $200,000 and $250,000--but it is a huge marriage penalty, and it could begin then to go down in numbers so that more and more people are affected. This body voted unanimously during the budget debate--unanimously-- that a point of order would be made against legislation that would impose a marriage penalty in the budget. So we have voted unanimously that a budget point of order would stand if there is a marriage penalty in the budget. So now here we are a few months later, and the majority is not only retreating from the opposition to the marriage penalty, but we now have for the first time in our Tax Code--or will when this bill passes--a payroll tax marriage penalty. How on Earth can we do that? I am going to fight this marriage penalty, and I hope the Senate will vote against this concept. It is a new precedent that could be set in other areas that would say if you are married, you are going to get fewer benefits than if you are single. That is not a precedent we ought to be setting. Then there is the medical deduction cap. There is a change in our Tax Code that would limit the itemized deduction for medical expenses. We have always had one that said if your medical expenses go above 7.5 percent of your income, that you would be able to deduct anything above that. This bill increases that threshold to 10 percent so that if you are going to get deductions--and this is going to affect people who have catastrophic accidents, really, really high medical bills, debilitating health conditions, or very, very expensive medicine--if you go above 7.5 percent today, you would be able to deduct. But in this bill, it is going to be 10 percent of your income before the government is going to allow you to deduct these added expenses. Then there is the drug, device, and insurance company taxes: $60 billion in taxes assessed to insurance companies, $22 billion to prescription drug manufacturers, and $20 billion on medical device manufacturers. The experts have said, all of the economists have said these taxes will be paid by the public. Of course they are going to be passed on: higher premiums for every insurance policy that is already there, and higher prices for medications and medical equipment. So medications you take for diabetes or heart disease, medications or medical devices that you need to fight cancer would all become more expensive because every one of them would have a higher cost because the company is going to pay an added fee just for producing these medicines and equipment. So many people today are struggling with their medical bills. They are struggling to fill prescriptions. Why aren't we bringing costs down? Isn't medical cost part of the reason for reform because the costs are going up? Wasn't the point of reform to bring the costs down so more people would have affordable options for health care coverage? What happened to that? All of these taxes on individuals and businesses are going to drive prices and costs up. In closing, the bill before us imposes $\1/2\ trillion in new taxes at a time when unemployment is soaring and our economy is struggling. We have $\1/2\ trillion in cuts to Medicare which is going to severely hurt our senior citizens and their access to health care, and then $\1/ 2\ trillion in tax increases, taxing marriage, taxing Tylenol, taxing high-benefit plans, taxing low-benefit plans, taxes if you offer employee health care coverage, and taxes if you offer not quite enough. This is a tax-and-spend bill. Republicans have repeatedly put forward ideas that would reform our health system, bring the costs down without burdening our employers with more taxes that would keep them from helping our economy by hiring more people; ideas that would increase competition and transparency and ensure access to affordable care. So I hope while our colleagues are meeting to try to get their 60 votes--which we know they are--that maybe they might consider bringing everybody into this process and listening to other ideas that would not be a government takeover of our health care system; that would not be more government mandates, more taxes, cuts from Medicare services. This is a recipe for disaster for our country, and I hope it is not too late for the Democratic majority to say: OK, let's get together and try to put together a bipartisan plan that will not hurt the quality of health care that Americans have known and expected in our country, one that will bring costs down and make health care more affordable, one that will give carrots to our employers not sticks that will switch them if they don't have the right kind of coverage or the government-approved coverage or the right percentage of coverage. We can do better and I hope we will. Thank you, Madam President. I yield the floor.

Mrs. HUTCHISON

Mrs. HUTCHISON. Will the Senator from Nevada yield?

Mrs. HUTCHISON. Talk about liability, I have real statistics. I hear the other side say: Oh, we are going to lower the cost; that is what health care reform is about, lowering the cost of health care so more people will have access to affordable options. Yet the main one that is clearly available is medical malpractice reform, tort reform. I know the Senator from Nevada has an amendment, and I am a cosponsor. Let me give some statistics about how we could save money.

Mrs. HUTCHISON. Exactly. And let me tell you what it has done in Texas and something we could do, and I think we would have bipartisan, 100 percent support in this body because that would be reform that would help health care. Since medical malpractice and tort reform has been passed in Texas, over 7,000 new physicians have flooded into our State--a 7,000 increase. The reason? Tort reform. Since passed just 5, 6 years ago, physicians in Texas have saved $574 million in liability premiums, and their liability rates have been cut an average of 27.6 percent, almost a 30-percent cut in premiums. What has this done? Today in rural counties, the number of obstetricians has increased by 27 percent. Twelve counties did not have one obstetrician before this was passed, and now they do; 24 counties had no emergency room physicians, and now they do; and 58 counties, in addition to that, have added one more. Rural counties are the ones that have suffered the most, and every State in this Union has rural counties--every one. They are the ones who are hurt the most. Yet the Medicare cuts will take $135 billion out of rural hospitals' ability to serve Medicare patients. There is no medical malpractice reform unless, of course, in a huge bipartisan effort and gesture we can adopt the Ensign amendment which we are offering to try to make this a bipartisan bill that can work. We have seen from Senator Ensign's charts that Democrats have supported limits on lawyer fees so that we would be able to cut back on the frivolous lawsuits that have been hampering our ability to cut the costs in Medicare. I appreciate so much that Senator Ensign is offering this amendment because Texas can show us that this will work. It would be meaningful reform. It would cut the costs and make health care more available and, most important, it will give patients the opportunity to have doctors in their rural communities who will not practice today because their liability premiums are so high they cannot afford to stay in medicine and give this care to those rural patients. That is what we need.

Mrs. HUTCHISON. If the Senator will yield, in addition to that, the House said: We have medical malpractice reform. They put it in their bill. You know what it says? There will be a State grant program and States can apply if they can show that they have made a meaningful effort at curbing frivolous lawsuits. But the only two reasons a State would not be eligible are if lawyer fees are capped or if damages are capped. Lawyer fees capped, damages capped--that is off the table. So I am thinking to myself--maybe the Senator from Nevada could tell me, if you don't curb lawyer fees and you don't curb the caps, what meaningful reform do you think we could get in medical malpractice?

Mrs. HUTCHISON. I so appreciate the opportunity to talk about these different areas of cuts and then the increase in spending overall, because everyone in America today is concerned about the spending and the debt and the ceiling we are about to reach. I wanted to bring up one more point on hospitals, because this affects every State in America. In Texas, 29 percent of our hospitals are in rural areas. The cuts in this bill will especially affect hospitals in rural areas. In fact, out of the $135 billion in Medicare cuts to hospitals, $20 billion is cuts in Medicare payments for treating low-income seniors and another $23 billion in Medicaid payments to hospitals for treating low-income patients. I want to read an excerpt of a letter I received this week from the Texas Organization of Rural and Community Hospitals, which represents 150 rural hospitals in the State. They write: We also fear the Medicare cuts as proposed could disproportionately hurt rural hospitals, which are the health care safety net for more than 2 million rural Texans. Because of lower financial margins and higher percentage of Medicare patients, rural hospitals will be impacted more than urban hospitals by any reductions in reimbursement. These proposed Medicare cuts could have a devastating effect on many of the hospitals, which could lead to curtailing of certain services. And, the closure of some of these Texas hospitals is a real possibility. It has happened every time previously when Congress imposed so-called large-scale, cost-saving measures. Well, this is the granddaddy of large-scale cost cuts--$500 billion, or $\1/2\ trillion--taken out of the hide of the hospitals that are treating low-income patients and seniors. I ask the Senator from Nevada if he is experiencing that same thing, and if he feels that hospitals all over our country are going to be hurt by this bill?

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I very much appreciate what the Senators have been talking about because what Senator McCain is saying is that these seniors who are low income have an affordable option, and it is less expensive than the AARP option that would give them this extra care--the eye care, the dental care, the hearing aids. It is an affordable extra option. In Texas, we have over 500,000 seniors enrolled in Medicare Advantage. One of the great things about Medicare Advantage is that it is available in rural areas, and it gives them choices that they might not be able to afford with other programs that are Medigap. This one is affordable. That is why we are fighting so hard to restore the cuts to Medicare Advantage. Medicare Advantage costs about 14 percent more than traditional Medicare because it provides a wide range of these extra benefits we have discussed--dental, eye care, hearing aids and, in many cases, it pays providers more. Republicans, of course, are open to discussing how to improve the Medicare Advantage payment formula. We want to be more efficient with taxpayer dollars, but do we want to do that in the context of creating a massive new entitlement program and ask Medicare to pay for it or to cut lifesaving benefits for seniors? Is that what we want to do, I ask Senator Crapo?

Mrs. HUTCHISON. Mr. President, I ask the distinguished Senator from Utah to also respond to the arguments that claim that the government cannot afford now to continue overpaying these private plans and that the Medicare trust fund is going broke. Of course, we tried actually several years ago to shore up the Medicare Program, trying to do it in a responsible way, not cutting out the Medicare benefits these seniors can receive as an affordable option. What does the Senator say to that?

Mrs. HUTCHISON. Five hundred thousand of my constituents are on Medicare Advantage.

Mrs. HUTCHISON. Yes, I would say to the Senator from Arizona, I was wondering if every State could have the same treatment. Why not have every State get this shielding for their Medicare Advantage? That is 11 million people in this country who would then be helped by a fair assessment of this all over the country. But let me just point out one other provision. The way they have been shielded is through grandfathering. What about people who----

Mrs. HUTCHISON. Oh, no. Now, amazingly----

Mrs. HUTCHISON. The white smoke, that is correct. But then the question arises: What about the future, where people will say: That is what I can afford and what I want to have. But grandfathering doesn't include anyone who might want to join in the future; it is only the people already in the system. And for how long they live, that is great, but what about the future? So this is a great program. It is affordable for the lower income people. This shielding is only for three States now, but I would like to see us all have the same capabilities for our constituents. And what about our future constituents?

Mrs. HUTCHISON. Mr. President, I would like to return to a point that was made earlier about the President promising, and it being understood by everyone, that if you like what you have, you can keep it. On Medicare Advantage, once again, the CMS has estimated--and I would ask the distinguished Senator from Utah to verify this--that enrollment in Medicare Advantage will decrease by 64 percent under this bill.

Mrs. HUTCHISON. And 8.5 million seniors would be deprived.

Mrs. HUTCHISON. We have been talking about Medicare Advantage and losing this great option for lower income seniors, which is so important. I was reminded that we have not even talked about the $135 billion that would be taken out of hospitals in this bill. These are the care providers. We are talking about taking away benefit options in eye care and dental care and hearing aids, sort of basic things seniors need, but also undercutting the hospitals that treat them, so the care provided in the hospitals themselves would also have to be cut back. It does not pass common sense to cut Medicare in order to create a new big entitlement program. We have all said that Medicare is on life support anyway, everyone understands that. So you take almost a $\1/2\ trillion out of a program that is working for seniors, that gives options to seniors such as Medicare Advantage, and you take away their care to pay for another entitlement program that is not specifically designed for them. I thank the Senator from Arizona and ask him to finish the comments on what is happening to this bill, this country, and our seniors. We need to stop it.

Mrs. HUTCHISON. Mr. President, I appreciate what the distinguished Senator from Iowa has discussed. I specifically liked the fact that he is relating this to where we are today. Sometimes it seems as though we are in a vacuum, not realizing how stretched people are right now. We are in a time of joblessness, people are worried about keeping their jobs, worried about having lost their jobs, where they are going to get their health care. We have seniors who are stretched because they are not able to earn income. We are in a distressed time. There is no doubt about it. To talk about cutting Medicare by almost $500 billion is astounding. I am concerned about hospitals. We talked for the last 45 minutes about the cuts to benefits--the hearing aids, the dental work seniors need, the eye care seniors need. What about the cuts to care provided in a hospital? Hospitals that treat a large share of low-income seniors get an extra payment from Medicare. Medicare already makes reduced payments to providers, to doctors but also to hospitals, to hospice, to nursing homes, and home health agencies for senior services. And yet proposed is a cut of almost $500 billion. All of these serve our seniors in such great ways. Look at the cuts, almost a $\1/2\ trillion over 10 years. This is not sustainable. We cannot take away from Medicare, cut services, cut reimbursements to providers. What is going to happen to a hospital? What is going to happen to a hospital in a rural area, especially that is barely hanging on right now because they are trying to make ends meet in a more expensive treatment area and they lose the added payment that would make them whole in the treatment of low-income seniors? The Texas Hospital Association estimates that $2 billion will cut in payments to hospitals for treating a large volume of low-income Medicare patients, $2 billion out of our economy. Mr. President, 254 counties in Texas, more than one-fourth, do not even have an acute care hospital within their boundaries. With these kinds of cuts to rural hospitals, we are talking about losing more hospitals. There is no doubt about it. They are already struggling. Why would we pay for health care reform on the backs of our senior citizens? Why would we take away a program they have that is tailored for their needs in order to pay for another big government program that is going to cost $2.5 trillion, most of which is going to be added to the deficit, added to the debt, and we are already hitting the ceiling of the debt at $12 trillion? We are in a very tough financial time. We are in a time that is hard for people who have lost jobs, hard for seniors stretched to make ends meet, hard for hospitals serving seniors and not getting paid the full cost of the treatment. Yet we are talking about cutting these services. Of the $135 billion in Medicare cuts to hospitals, $2 billion is for the reimbursement rates that will no longer be making hospitals whole. I went to the major medical centers in Texas--in Dallas, Houston. Then I went to rural areas. It is the topic of conversation. Anyone who is dealing with a hospital in a rural area, they are all saying: What are you doing? Of course, we are not doing anything. We are fighting these health care cuts. But we have to make sure they know what is happening so we can achieve that result. I understand my time has expired. I think the Senator from Oklahoma has the rest of the time on our side. I yield the floor.