Ted Kennedy

Mr. KENNEDY

Mr. KENNEDY. I yield.

Mr. KENNEDY. The Senator has put his finger on one of the key factors and legitimate reasons for the increase in the minimum wage, because this is a family issue--the number of minimum wage workers working two jobs, some even three jobs, the testimony that we have had where the only times that young parents see their children together may be for a few hours on a Sunday morning.

Mr. KENNEDY. I ask unanimous consent for 10 more minutes.

Mr. KENNEDY. The Senator is quite correct. There has been no mention of this by this administration. We have had other administrations that at least advocated some increase, and eventually we were able to work out an accommodation over a period of time. This administration, as the Senator has pointed out, has not only not mentioned the increase in the minimum wage and not only has resisted the tax credit for children but also put in new rules and regulations on the earned-income tax credit that are going to make it more difficult for the same individuals at the bottom end of the economic ladder who have children, who are working hard, playing by the rules, to be able to participate in this program. The Senator is quite correct that the neediest Americans, the ones who are working trying to make a living for themselves, trying to bring up children, facing the most serious economic challenges of our time, are basically shunted aside and ignored by this administration.

Mr. KENNEDY. The Senator from Nevada is quite correct. As our deputy leader, he has an understanding of the amendments on our side. He has correctly stated the position; that is, speaking for this side of the aisle, we are prepared to move to final passage of the legislation, but there are a few amendments, one of which is the minimum wage which, under a short time limit, can be disposed of quite rapidly. But quite frankly, we have only had 1 day of debate on the State Department authorization, and we haven't had an opportunity to raise this issue for 7 years. I know there are those who say, let's let this issue be deferred. It has been 7 long years since we have had an increase in the minimum wage. So those individuals who are at the lowest end of the economic ladder, working 40 hours a week, 52 weeks of the year, have been losing purchasing power day in and day out. We have not increased the minimum wage in 7 years. With all due respect to other Members of this body, it is Friday at 11 o'clock. We are prepared to debate the issue and have a vote on it. People are entitled to have an indication of what the membership wants to do. We take this issue very seriously because of the desperate situation affecting those on the lower end of the economic ladder. Quite frankly, historically this has not been a Democratic issue. It has been a bipartisan issue. The long history of increases in the minimum wage has been basically bipartisan. It was enacted by Franklin Roosevelt in 1938; increased by Harry Truman; increased by Dwight Eisenhower in 1955 by $1; increased by President John Kennedy in 1961 by $2.35; increased by Lyndon Johnson; increased by a Republican, Gerry Ford; increased by Jim Carter; increased by George Bush No. 1; increased by Bill Clinton. Republicans and Democrats have voted for an increase in the minimum wage since 1938. It has not been a partisan issue. We find in recent times that our Republican friends have been unwilling to both support it and give us the opportunity to debate the issue. This chart shows the long history of increases in the minimum wage as well as the amounts. Even with those kinds of increases, if you look at the purchasing power of the minimum wage, as this chart indicates, it is now at perhaps its lowest level of purchasing power, $4.95. There was one other time when it was $4.35. It is $4.95 and continuing to drop, and it will reach the lowest level in terms of purchasing power since even before 1962, unless we take action. With this amendment it would increase, in terms of purchasing power, to $6.40, which is well below what the minimum wage has been over the period of the last 40 years. So this is a very modest program. It would increase to $6.65 in today's dollars. I want to share with the Senate what the minimum wage is in relation to the issues of poverty in the United States. Look at this chart. Here is the poverty level. Just $14,500 is the poverty level. The blue indicator is what has happened to the minimum wage in relation to poverty. Most Americans believe that if people are going to work hard 40 hours a week, 52 weeks of the year, they should not live in poverty. They should not live in poverty. In the wealthiest, most successful economy in the world, this is what is happening. We find that the minimum wage workers are well below the poverty level. As a result, every day that we delay we see minimum wage workers falling further behind. All of the gains since the 1997 increase in the minimum wage already have been lost. What are we talking about? We are talking about an increase of $1.50, 75 cents this year, 75 cents next year. What does that amount to? That amounts to $3,000 over the course of a year. Translated, it means 15 months of groceries, 8 months of rent, 7 months of utilities, and the full tuition for a child of the minimum wage worker. This is what we are talking about. We are talking about groceries; we are talking about rent; we are talking about utilities; we are talking about education at this time. We have had a good deal of debate in terms of the tax cuts and what that will do for the wealthiest individuals. This is the kind of difference that this will make over the period of 1 year. Let me just put this in some perspective about what the increase in the minimum wage will mean in terms of the total combined income for workers over the course of the year because you will hear the argument: Can we do this now because of the issues of inflation? I would like to anticipate that argument. And then: Can we afford to do it in anticipation of the problems of high unemployment? First on the issue of an increase of $1.50 to workers, it is vital to minimum wage workers; it is a drop in the bucket in the national payroll. All Americans combined earn $5. 4 trillion a year. At a $1.50 minimum wage increase this will be less than one-fifth of 1 percent of the national payroll. The idea that we are contributing to inflation just does not carry. I will take a moment of the Senate's time to look over what has happened, the increase in the minimum wage as to the issues of employment and unemployment. An argument will be made: Look the Democrats make a good deal about the unemployment that we are facing today. If we pass this increase in the minimum wage, are we going to increase unemployment? All you have to do is look at the various studies which I will speak to later in the presentation. But I would like to just look back over the history of the last increase in the minimum wage. If you look at 1996, the minimum wage was increased to $4.75. In 1996, we had unemployment just above 5.3 percent. So the increase in the minimum wage was going up during this time while the unemployment was coming down. Then the second phase of the increase to the minimum wage which we passed was September 1997. That raised it from $4.75 to $5.15. The chart shows unemployment continuing to decline. Study after study indicates that this it virtually has no effect or impact on the unemployment rate. Let me just say, the issue in the increase of the minimum wage is a women's issue because the great majority of the people who receive the minimum wage are women. This increase in the minimum wage is a children's issue because a many of the women who are receiving the minimum wage have children. And it is about their quality of life and that of their families. It is a civil rights issue because forty percent of those individuals who earn the minimum wage are men and women of color. Finally, this increase in the minimum wage is a fairness issue. Americans understand fairness. They understand if you are going to work hard 40 hours a week, 52 weeks of the the year, you should not live in poverty. That is the case. This is a no brainer. We do not have to spend a lot of time in debate. We voted on this. It is as old an issue as 1938. We can vote on this. It is a simple issue of whether this institution believes in fairness and decency for some of the hardest working men and women in our country. And it is about time that we do it. From our point of view as the proponents, we are prepared to vote at any time that the other side will give us the opportunity to do so.

Mr. KENNEDY. The Senator is correct. We have not been able to get a vote on this issue of an increase in the minimum wage over that period of time. I must say if it had not been for the persistence of our Democratic leaders, Senator Reid and Senator Daschle, we would not have gotten a vote on it this time. If it had been up to the other side, they would have said, no, we only want the relevant amendments and we can wait for consideration of an increase in the minimum wage. These workers cannot wait. They do not need to wait. During this period of time, we have found the opportunity to raise our own salaries on five different occasions. We have not found the time to raise the minimum wage, but we have raised the Senate salaries on five different occasions. I think that is something the American people can understand as well. We are doing something for these Members--and I do not begrudge it, and I voted for those increases--but the fact is we should not leave these people behind.

Mr. KENNEDY. Let me continue, if I may. So this is a family issue. It is about, as the Senator knows, the numbers of mothers and fathers who have to look into the eyes of their children and say, ``No, you can't get a little birthday present,'' or, ``No, you can't go to the skating party where all the other children are going.'' ``No, you can't do this because we haven't got the resources.'' That is happening every day. These are hard-working men and women. It is the family issue. As the Senator has mentioned, who are these minimum wage workers? These minimum wage workers are teacher's aides. We say we care about education. We know the challenges we are facing on education. We know the particular stress that is taking place in the States on education. These workers are teacher's aides. We say we care about our senior citizens, men and women who have sacrificed. They ought to have their golden years in peace and dignity. These are workers in nursing homes. They are the recipients. They are taking care of the parents and the grandparents in this country. These are the men and women who clean the great facilities where the American enterprise continues to grow and strive throughout this country. As the Senator points out, these are hard-working men and women. This is a family issue. These are decent, hard-working fellow Americans, and they have seen their purchasing power fall and fall. If my colleagues look over at this chart, it indicates where the disparity has been going in the United States over the past years. As we all know, the wealthy are getting wealthier and the hard-working Americans who are at the lower rung of the economic ladder are falling further behind. We know we have the earned-income tax credit that assists families with children, and that is important. But if one is talking about a single parent with a single child, the minimum wage makes all the difference in the world.

Mr. KENNEDY. Mr. President, I pay tribute to our two floor managers of a very important bill that I intend to support when we have a chance to reach it, which I hope will be done in the not too distant future. I commend our floor managers for the work they have done in bringing this legislation before the Senate. There were two issues I had hoped we would have an opportunity to present to the Senate. One was an increase in the minimum wage. Another was working with the Senator from Oregon, Mr. Smith, on the hate crimes issue. We are hopeful to be able to address those during consideration of this legislation without taking a great deal of time. I had intended to offer an amendment on the legislation now and was quite prepared to move ahead with a reasonable time period, up to an hour of time evenly divided. Then we could make a judgment with regard to hate crimes to enter into a similar kind of time agreement so that we would not delay the underlying legislation. But the problem we have is the leadership has decided we would defer action on the amendment until some future time. I regret that, but I understand it. It is the prerogative of the leadership. We will at that time have a chance to again raise this issue.

Mr. KENNEDY. I am glad to yield.

Mr. KENNEDY. The Senator is quite correct. Absolutely correct.

Mr. KENNEDY. Well, the Senator probably remembers, we had to file cloture on this in order to try to get a vote, and during that period of time we were able always to get a majority of the Senate, some Republicans and Democrats, but we were blocked because we could not get the 60 votes. We were required to get the 60 votes for the consideration, and we were denied that opportunity. The Senator remembers very well, as I do, that we were effectively blocked from taking action on the minimum wage.

Mr. KENNEDY. Well, the Senator has made the compelling case on this. We have heard these arguments against it, that it adds to inflation, adds to unemployment, that it works to the disadvantage of minority youth. We had that argument. We can show the statistics that that is not true. They say, well, what we really need is not an increase in minimum wage but we need an increase in the training wage. We have said, fine, we will add an increase in the training wage. We are prepared to meet any legitimate argument, but we do believe that people who have been working, and working hard and playing by the rules and have waited 7 years and have seen the reduction in terms of the purchasing power, are entitled to at least an accounting in the Senate. That is what we want to find out. This is not an issue that takes a great deal more discussion and debate. Members knew about the minimum wage before they were elected to the Senate. It is an old issue, older than most of us in this Chamber. People are familiar with it. They have heard the arguments. It is not a new issue, but it is an issue of fairness and decency. It is an issue that should be acted on. To reiterate, millions of minimum wage workers are suffering because of the continuing weak economy. For years, they have not had any wage increase at all, because Congress continues to refuse to raise the minimum wage. Even in this troubled economy, Congress has not hesitated to raise its own pay. It is only fair that we raise the minimum wage, too. That is why I am proposing this amendment to enact a long-overdue increase in the minimum wage. My amendment will raise the current minimum wage of $5.15 an hour by 75 cents this year and another 75 cents next year, bringing it up to $6.65 an hour. We know that poverty has doubled among full-time, year-round workers since the late 1970s. Nearly 33 million people live in poverty today in this country, and an unfairly low minimum wage is a large part of the problem. Congress has not acted to raise the minimum wage in 7 years. Minimum wage employees working 40 hours a week, 52 weeks a year, earn only $10,700 a year. That's $4,500 below the poverty line today for a family of three. The current minimum wage fails to provide enough income for minimum wage workers to afford adequate housing in any area of this country. A worker earning the minimum wage in Georgia or Illinois, or many other areas of the country, would have to work more than 100 hours a week to afford a two-bedroom apartment. Every day the minimum wage is not increased, it continues to lose value, and workers fall farther and farther behind. Minimum wage workers have lost all of their gains since we last raised the minimum wage in 1997. Today, the real value of the minimum wage is $3.00 below what it was in 1968. To have the purchasing power it had in 1968, the minimum wage would have to be more than $8 an hour today, not $5.15. It is shameful that Members of Congress have raised their own pay by $21,000 in the last 7 years--almost twice what a minimum wage workers makes in a year--without giving the Nation's lowest paid workers any increase at all. Nearly 7 million workers would directly benefit from the proposed minimum wage increase, and many of them are parents and the sole breadwinners in their families. The minimum wage is an economic issue, but it is also a woman's issue. Sixty-three percent of the workers who would benefit from minimum wage increase are women and one-third of those women are mothers. The minimum wage is also a civil rights issue. An increase in the minimum wage boosts the wage levels of people of color--who are often segregated into low-paying jobs. Millions of African American and Hispanic workers will benefit from an increase in the minimum wage. Raising the minimum wage is a family issue, too. It is so low that many workers must work long hours to make ends meet. The increase in work hours has a damaging impact on every aspect of life: on families, on personal time, and on employers. At least one in five workers has a work week that exceeds 50 hours. According to the Families and Work Institute, three out of the top four things that children would most like to change about their working parents are these: They wish their parents were less stressed out by work; they wish they were less tired because of their work; and they wish they could spend more time with them. Employers as well pay a high price for overworked employees. Productivity suffers, and so does turnover. Overworked employees are more susceptible to illness. They need more sick days, and they are less productive on the job. Raising the minimum wage obviously will not solve all these problems. But a higher minimum wage may mean that employees can work a little less, and have a few more hours a week of family time and personal time. Minimum wage earners are forced to make impossible choices--between paying the rent and buying groceries or between paying the heating bill and buying new clothes. It has been too long since Congress last acted. History clearly shows that raising the minimum wage has not had a negative impact on jobs, employment, or inflation. In the four years after the last minimum wage increase, the economy had its strongest growth in three decades. Nearly 11 million new jobs were added, at a rate of more than 200,000 per month. A fair increase in the minimum wage is long overdue. How can Congress keep saying no, when more and more workers cannot make ends meet? Can't we all at least agree on this basic principle--that no one who works for a living should have to live in poverty?

Mr. KENNEDY

Mr. KENNEDY. Mr. President, it is a privilege to join my colleagues in this effort to keep this promise of AmeriCorps and to support the amendment to add $100 million to the supplemental. It is inspiring to see the good work that volunteers do every day, tutoring, mentoring, providing access to health care, and building stronger communities in so many different ways. Over 200,000 young men and women have dedicated a year of their lives to AmeriCorps and these activities. Their service has helped others in urgent need, expanded community-based organizations, and strengthened whole communities. They have transformed the lives of others, and transformed their own lives, too. Yet, this successful program faces devastating cuts--not because of problems in the services they provide, but because of financial management problems at the Corporation for National Service. That is unacceptable. When mistakes are made inside the Beltway, people across America should not have to pay for those mistakes. I hope our proposal will have strong bipartisan support and pass as it did in the Appropriations Committee, so that we can correct this situation before even more young volunteers who are ready, willing, and able to serve are denied the opportunity to serve.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, we passed an extended unemployment in May but that was to only take care of the recently unemployed. The Murray amendment will take care of 1.1 million Americans who were fully employed 2 years ago. Every one of them was employed. Every one of them was working. They want to work. Now they are completely cut off by the abbreviated amendment we passed last spring. We ought to provide the $2 billion included in the unemployment compensation fund. That fund has $20 billion. This will only use $2.5 billion. These workers have paid into it; they are entitled to it; they need it; and they ought to be provided for. That is what the amendment does.

Mr. KENNEDY. Unfortunately, although the State Department requested $10 million in its fiscal year 2004 budget to continue the program, I understand that the Office of Management and Budget did not include that request in the administration's final budget. Would the chairman agree that this program should be a high priority for the State Department?

Mr. KENNEDY. Mr. President, I strongly support this amendment. I commend my friend and colleagues, the Senator from Delaware and Senator Lugar, and Senators Daschle and Levin, for their support on this amendment. To minimize the strain on American troops and ensure the stabilization of Iraq, we need to internationalize the presence in Iraq. Today, our policy toward Iraq is adrift and American troops and their families are paying the price. President Bush declared an end to major hostilities on May 1. Since then, more than 70 American service men and women have been killed. For them and their families the war is not over. We have options and we need not go it alone. We have NATO; we have the United Nations. It is time to mend the fences with our allies and work together in order to stabilize Iraq, in order to bring the promise of democracy and to minimize the strain on our own troops. We should ask NATO as an institution to join this extremely important effort. I welcome the opportunity for the Senate to go on record in support of that request. I suggest the absence of a quorum.

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

Mr. KENNEDY. Mr. President, one of the important steps we took in the aftermath of September 11 was to encourage the Muslim and American worlds to do more to understand each other. The State Department initiated a new academic year high school students exchange program between the United States and the Islamic world to do so, and initial funding was provided in the Fiscal Year 2002 Supplemental Appropriations Act. The program will bring 138 Muslim students to the United States this fall for an academic year of study, and 365 more students are expected next fall. The program is modeled on the highly successful program for students in the former Soviet Union, and Senator Lugar and I worked together to create the new program for students from Islamic countries. I understand that my distinguished colleague has current information on its progress.

Mr. KENNEDY

Mr. KENNEDY. I think what you could say is that this is the anti-Bill of Rights for the American consumer because it goes in just the opposite way. Rather than guaranteeing protections, it undermines whatever protections are out there. This is a battle we have been fighting over and over again in recent years, making sure the most basic protections for our consumers and families in the health care area are not undermined. As the Senator has pointed out, this is going in the opposite direction.

Mr. KENNEDY. I thank the Senator.

Mr. KENNEDY. If I may just add, as the Senator remembers--I hope the American people do--we had weeks of debate on the floor on the Patients' Bill of Rights. As the Senator remembers, what underlined that whole debate was that we ought to put the well-being and the health care interests of the patients of this country ahead of the bottom line of the HMOs. This was a debate in which the American people really participated. It was sidetracked because the administration refused to allow States to make the ultimate decision about compensation for individuals. That was in the final compromise which this administration refused. So for all those who want to talk about States rights issues on this and the States know best--all those who make that argument--they somehow miss the importance of the real protections for people.

Mr. KENNEDY. The Senator is exactly right. It is not only limited to those groups the Senator has cited, but there is a strong belief that it would also apply protection for billing fraud, tainted blood to patients, fixing of prices of drugs, deliberately overcharging Medicare and Medicaid for health services, as well as making defective implants, and violating nursing home safety standards. We don't hear much from those who are supporting this about why all of these various groups need this kind of protection. It is a catch all, not dealing with what was stated by many of those who were speaking in favor. This is a catch all for anything to do in any way, under any pretense, with the health care industry.

Mr. KENNEDY. I also reference a really excellent article in U.S. News and World Report from June 30 that shows on a chart what has been happening with premiums going from $2.9 billion to $4.9 billion and, on the other hand, points out insurers' payments after the jury verdict was $147 billion in 1993 and in the year 2001, $172 billion--so basically a fairly flat line across almost a 10-year period, a dramatic increase in the premiums and virtually flat in terms of the payments. I am glad to yield.

Mr. KENNEDY. It really insults the intelligence of the average family, and the average family is far too bright and smart not to understand what this says and what it does not. As implicated in the Senator's question, this is a sense of the Senate of something we should be doing by legislation which we have attempted to do with the Patients' Bill of Rights. This sense of the Senate is meaningless. It isn't even worth the paper it is written on, because of all the other provisions included in the legislation which the Senator has spoken to so effectively during the course of the debate. This is sort of a catch all, a ``make them feel good,'' section, for some to be able to say: Look, they have language in here that it is the sense we all feel this way. But, of course, it says this in a piece of legislation which will effectively undermine the protections for working families, for their parents, and for their children. We have many things that can be done to provide help to some of those who have the particular specialties which need attention, but the idea that you have these two lines of a sense of the Senate to effectively say: We have done all of these bad things, and we have put them in law, but we want a sense of the Senate to make you feel good and show that we are actually protecting the average family in this country--as the Senator well knows, it isn't worth the paper it is printed on.

Mr. KENNEDY. Madam President, this legislation, S. 11, is not a serious attempt to address a significant problem being faced by physicians in some States. It is the product of a party caucus rather than a bipartisan deliberation of a Senate committee. It was designed to score political points, not to achieve a bipartisan consensus which is needed to enact major legislation. For that reason, it does not deserve to be taken seriously by the Senate. We must reject the simplistic and ineffective responses proposed by those who contend that the only way to help doctors is to further hurt seriously injured patients. Unfortunately, as we saw in the Patients' Bill of Rights debate, the Bush administration and congressional Republicans are again advocating a policy which will benefit neither doctors nor patients, only insurance companies. Caps on compensatory damages and other extreme tort reforms are not only unfair to the victims of malpractice, they do not result in a reduction of malpractice insurance premiums. Not only does this legislation fail to do what it claims but it would do many things that its authors are attempting to conceal. In reality, this legislation is designed to shield the entire health care industry from basic accountability for the care it provides. While those across the aisle like to talk about doctors, the real beneficiaries will be the insurance companies and large health care corporations. This amendment would enrich them at the expense of the most seriously injured patients, men and women and children whose entire lives have been devastated by medical neglect and corporate abuse. This proposal would shield HMOs that refuse to provide needed care, drug companies whose medicine has toxic side effects, and manufacturers of defective medical equipment. In the last 2 years, the entire Nation has been focused on the need for greater corporate accountability. This legislation does just the reverse. It would drastically limit the financial responsibility of the entire health care industry to compensate injured patients for the harm that they have suffered. When will the Republican Party start worrying about the injured patients and stop trying to shield big business from the consequences of its wrongdoing? Less accountability will never lead to better health care. According to professor Sara Rosenbaum, a nationally respected expert on health care law at the George Washington University School of Public Health: This measure is so vast in scope that it reaches every conceivable health care claim against every health care corporation or manufacturer of health care products . . . In this sense the measure extends far beyond its popular billing as one related to the crisis facing physicians and other medical professionals in individual practice. In testimony on the companion bill to S. 11 before the House Commerce Committee, she stated that the bill was written so broadly that it would shield health care companies from claims as varied as billing fraud, providing tainted blood to patients, fixing the prices of drugs, deliberately overcharging Medicare or Medicaid for health services, making defective implants and violating nursing home safety rules. This legislation is attempting to use the sympathetic family doctor as a Trojan horse concealing an enormous array of special legal privileges for every corporation which makes a health care product, provides a health care service, or insures the payment of a medical bill. Every provision of this bill is carefully designed to take existing rights away from those who have been harmed by medical neglect and corporate greed. This legislation would deprive seriously injured patients of the right to recover fair compensation for their injuries by placing arbitrary caps on compensation for noneconomic loss in all of these cases. These caps only serve to hurt those patients who have suffered the most severe, life-altering injuries and who have proven their cases in court. They are the paralyzed, the brain-injured, and the blinded. They are the ones who have lost limbs, organs, reproductive capacity, and in some cases even years of life. These are life-altering conditions which deprive a person of the ability to engage in many of the normal activities of day to day living. It would be terribly wrong to take their rights away. The Bush administration talks about deterring frivolous cases, but caps by their nature apply only to the most serious cases which have been proven in court. A person with a severe injury is not made whole merely by receiving reimbursement for medical bills and lost wages. Noneconomic damages compensate victims for the very real, though not easily quantifiable, loss in quality of life that results from a serious, permanent injury. It is absurd to suggest that $250,000 is fair compensation for a person paralyzed for life. Caps are totally arbitrary. They do not adjust the amount of the compensation ceiling with either the seriousness of the injury, or with the length of years that the victim must endure the resulting disability. Someone with a less serious injury can be fully compensated without reaching the cap. However, a patient with severe, permanent injuries is prevented by the cap from receiving full compensation for their more serious injuries. Is it fair to apply the same limit on compensation to a person who is confined to a wheelchair for life that is applied to someone with a temporary leg injury? Caps discriminate against younger victims. A young person with a severe injury such as paralysis must endure it for many more years than an older person with the same injury. Yet that young person is prohibited from receiving greater compensation for the many more years he will be disabled. Is that fair? Caps on noneconomic damages discriminate against women, children, minorities, and low-income workers. These groups do not receive large economic damages attributable to lost earning capacity. Women who are homeowners and caregivers for their families sustain no lost wages when they are injured, so they only receive minimal economic damages. Noneconomic damages are particularly important to these vulnerable populations. In addition to imposing caps, this legislation would place other major restrictions on seriously injured patients seeking to recover fair compensation. At every stage of the judicial process, it would change long-established judicial rules to disadvantage patients and shield defendants from the consequences of their actions. It would abolish joint and several liability noneconomic damages. This means the most seriously injured people may never receive all of the compensation that the court has awarded to them. Under the amendment, health care providers whose misconduct contributed to the patient's injuries will be able to escape responsibility for paying full compensation to that patient. The bias in the legislation could not be clearer. It would preempt State laws that allow fair trdatment for injured patients, but would allow State laws to be enacted which contained greater restrictions on patients' rights than the proposed federal law. This one-way preemption contained in Section 11(b) shows how result-oriented the legislation really is. It is not about fairness or balance. It is about protecting defendants. The amendment preempts State statutes of limitation, cutting back the time allowed by many States for a patient to file suit against the health care provider who injured him. Under the legislation, the statute of limitations can expire before the injured patient even knows that it was malpractice which caused his or her injury. It places severe limitations on when an injured patient can receive punitive damages, and how much punitive damages the victim can recover. Under the bill, punitive damages can only be awarded if the defendant acted ``with malicious intent to injure'' or ``deliberately failed to avoid unnecessary injury.'' This is far more restrictive than current law. It prohibits punitive damages for '`reckless'' and ``wanton'' misconduct, which the overwhelming majority of States allow. In the very small number of cases where punitive damages would still be allowed, it would cap them at twice the amount of economic damages, no matter how egregious the defendant's conduct and no matter how large its assets. It imposes unprecedented limits on the amount of the contingent fee which a client and his or her attorney can agree to. This will make it more difficult for injured patients to retain the attorney of their choice in cases that involve complex legal issues. It can have the effect of denying them their day in court. Again the provision is one- sided, because it places no limit on how much the health care provider can spend defending the case. If we were to arbitrarily restrict the rights of seriously inured patients as the sponsors of this legislation propose, what benefits would result? Certainly less accountability for health care providers will never improve the quality of health care. It will not even result in less costly care. The cost of medical malpractice premiums constitutes less than two-thirds of 1 percent--66 percent--of the Nation's health care expenditures each year. For example, in 2001, health care costs totaled $1.42 trillion, while the total cost of all medical malpractice insurance premiums was $7.3 billion. Malpractice premiums are not the cause of the high rate of medical inflation. This chart clearly reflects that we spend $1.42 trillion a year in total personal health care expenditures. It is a very large amount per individual. If we are ever able to get the cost of health care per individual down to a reasonable amount there would be real savings. But that isn't what this is about. This is about $7.3 billion, and that amounts to just one-half of 1 percent of all medical costs. Medical malpractice premiums do not contribute to the overall rise. We ought to address the cost of health care. That isn't what this bill is about. Over the last 15 years, medical costs increased by 113 percent. The total amount spent on medical malpractice insurance rose just 52 percent over that period, less than half the rate of inflation for health care services. The increase is rising at virtually one-half of what other health care services are rising. The White House and other supporters of caps have argued that restricting an injured patient's right to recover fair compensation will reduce malpractice premiums. But there is scant evidence to support their claim. In fact, there is substantial evidence to refute it. In the past year, there have been dramatic increases in the cost of medical malpractice insurance in States that already have damage caps and other restrictive tort reforms on the statute books, as well as in States that do not. No substantial increase in the number or size of malpractice judgments has suddenly occurred which would justify the enormous increase in premiums which many doctors are being forced to pay. Comprehensive national studies show that the medical malpractice premiums are not significantly lower on average in States that have enacted damage caps and other restrictions on patient rights than in States without these restrictions. Insurance companies are merely pocketing the dollars which patients no longer receive when ``tort reform'' is enacted. Let's look at the facts. Approximately half of the States have a cap on medical malpractice damages. Most have had those statutes for a substantial number of years. The other half of the States do not have a cap on malpractice damages. The best evidence of whether such caps affect the cost of malpractice insurance is to compare the rates in those two groups of States. Based on data from the Medical Liability Monitor on all 50 States, the average liability premium in 2002 for doctors practicing in States without caps on malpractice damages was $31,926, virtually the same as the average premium for doctors practicing in States with caps, which was $30,521. There are many reasons why insurance rates vary substantially from State to State. This data demonstrates that it is not a State's tort reform laws which determine the rates. Caps do not make a significant difference in the malpractice premiums which doctors pay. This is borne out by a comparison of premium levels for a range of medical specialties. The average liability premium in 2002 for doctors practicing internal medicine was less--2.8 percent--for doctors in States without caps on malpractice damages--$9,552--than in States with caps on damages-- $9,820. Internists actually pay more for malpractice insurance in the States that have caps. The average liability premium in 2002 for general surgeons was almost identical for doctors in States without caps--$33,016--than States with caps--$33,157. Surgeons are paying the same regardless of the State's tort laws. The average liability premium for OB/GYN physicians in 2002 in States without caps--$53,163--exceeded the rate for doctors in States with caps--$48,586--by less than 10 percent, a relatively small difference. Shown on this chart are the figures for: internal medicine, general surgery, OB/GYN, and the physicians in States without caps on damages and the physicians in States with caps on damages. A fair reading of that would indicate there is virtually little that would reflect itself in lower malpractice insurance rates for those States with caps. This evidence clearly demonstrates that capping malpractice damages does not benefit the doctors it purports to help. Their rates remain virtually the same. It only helps the insurance companies earn even bigger profits. As Business Week Magazine concluded after reviewing the data ``the statistical case for caps is flimsy.'' That is from their March 3, 2003 issue. Since malpractice premiums are not significantly effected by the imposition of caps on recovery, it stands to reason that the availability of physicians does not differ between States that have caps and States that do not. AMA data shows that there are 233 physicians per 100,000 residents in States that do not have medical malpractice caps and 223 physicians per 100,000 residents in States with caps. Looking at the particularly high cost speciality of obstetrics and gynecology, States without caps have 29 OB/GYNs per 100,000 women while States with caps have 27.4 OB/GYNs per 100,000 women. Clearly there is no correlation. If a Federal cap on noneconomic compensatory damages were to pass, it would sacrifice fair compensation for injured patients in a vain attempt to reduce medical malpractice premiums. Doctors will not get the relief they are seeking. Only the insurance companies, which created the recent market instability, will benefit. A National Association of Insurance Commissioners study shows that in 2000, total insurance industry profits as a percentage of premiums for medical malpractice insurance was nearly twice as high--13.6 percent-- as overall casualty and property insurance profits--7.9 percent. Do we understand that now? This is the National Association of Insurance Commissioners. Their study showed, in the year 2000, that the insurance industry profits as a percentage of premiums for medical malpractice insurance was twice as high as casualty and property insurance profits. The profits from the premiums for medical malpractice insurance were twice as high. This is the National Association of Insurance Commissioners study. In fact, malpractice was a very lucrative line of insurance for the industry throughout the 1990s. Recent premium increases have been an attempt to maintain the high profit margins despite sharply declining investment earnings. That is what is at the root cause here. Insurance industry practices are responsible for the sudden, dramatic premium increases which have occurred in some States in the past 2 years. The explanation for these premium spikes can be found not in legislative halls or in courtrooms, but in the boardrooms of the insurance companies themselves. There have been substantial increases in the last 2 years in a number of insurance lines, not just medical malpractice. Insurers make much of their money from investment income. Interest earned on premium dollars is particularly important in medical malpractice insurance because there is a much longer period of time between receipt of the premium and payment of the claim than in most lines of casualty insurance. The industry creates a ``malpractice crisis'' whenever its investments do poorly. The combination of a sharp decline in the equity markets and record low interest rates in the last 2 years is the reason for the sharp increase in medical malpractice insurance premiums. What we are witnessing is not new. The industry has engaged in this pattern of behavior repeatedly over the last 30 years. When ``tort reform laws'' are enacted, the insurance companies pocket the resulting savings to bolster their profits. Last month, Weiss Ratings, Inc., a nationally recognized financial analyst, conducted an in-depth examination of the impact of capping damages in medical malpractice cases. This is a nationally recognized financial analyst. Their conclusions sharply contradict the assumptions on which this legislation is based. Weiss found capping damages does reduce the amount of money that malpractice insurance companies pay out to injured patients. However, those savings are not--those savings are not--passed on to doctors in lower premiums. That is the conclusion. This is what the Weiss report, issued on June 3 of this year, states: Since the insurers in the states with caps reaped the benefit of lower medical malpractice payouts, one would expect that they would reduce the premiums they charged doctors. At the very minimum, they should have been able to slow down the premium increases. Surprisingly, the data show they did precisely the opposite. Between 1991 and 2002, the Weiss analysis shows that premiums rose by substantially more in the States with damage caps than in the States without caps. The 12-year increase in the median annual premium was 48.2 percent in the States that had the caps, and only 35.9 percent in the States that had no caps. In the words of the report: On average, doctors in states with caps actually suffered a significantly larger increase than doctors in states without caps. . . . In short, the results clearly invalidate the expectations of caps proponents. There it is. Those States with the caps, 48.2 percent median premium increase; States without caps, 35.9 percent. That is from the study by Weiss Rating, Inc. It is not a study that is made up by those of us who are expressing opposition. Doctors, especially those in high-risk specialties, whose malpractice premiums have increased dramatically over the past 2 years, do deserve premium relief. That relief will only come as a result of tougher regulation on the insurance industry. When insurance companies lose money on their investments, they should not be able to recover those losses from the doctors they insure. Unfortunately, that is what is happening. Doctors and patients are both victims of the insurance industry. Excess profits from the boom years should be used to keep premiums stable when investment earnings drop. However, the insurance industry will never do that voluntarily. Only by recognizing the real problem can we begin to structure an effective solution that will bring an end to unreasonably high medical practice premiums. I conclude with a quotation from the analysis of medical malpractice premiums by Weiss Ratings, Inc. Weiss Ratings, as I said, is not speaking from the perspective of a trial lawyer or a patient advocate, but as a hard-nosed financial analyst that has studied the facts of malpractice insurance ratings. Here are their recommendations to us based on those facts: First, legislators must immediately put on hold all proposals involving non-economic damage caps until convincing evidence can be produced to demonstrate a true benefit to doctors in the form of reduced med mal costs. Right now, consumers are being asked to sacrifice not only large damage claims, but also critical leverage to help regulate the medical profession--all with the stated goal that it will end the med mal crisis for doctors. However, the data indicate that similar state legislation has merely produced the worst of both worlds: The sacrifice by consumers plus a continuing--and even worsening--crisis for doctors. Neither party derived any benefit whatsoever from the caps.