Ted Kennedy

Mr. KENNEDY

Mr. KENNEDY. I yield myself the remaining time. At a time when the American people are calling for greater corporate accountability, it is unbelievable that our Republican colleagues would bring to the floor an amendment which would do just the opposite. The McConnell amendment would allow the entire health care industry to avoid accountability for the care they provide. The Amendment would deprive seriously injured patients of fair compensation. At virtually every stage of the legal process, the amendment systematically rewrites the rules of civil law to tip the balance in favor of defendants. It would arbitrarily shield health care providers and their insurance companies from basic responsibility for the harm they cause. While those across the aisle like to talk about doctors, the real beneficiaries will be insurance companies. This amendment would enrich the insurance industry at the expense of the most seriously injured patients; men, women, and children whose entire lives have been devastated by medical neglect and corporate abuse. This proposal would also shield HMOs that fail to provide needed care, nursing homes that neglect elderly patients, drug companies whose medicine has toxic side effects, and manufacturers of defective medical equipment. It would drastically limit the financial responsibility of the entire health care industry to compensate injured patients for the harm they have suffered. When will the Republican Party start worrying about injured patients and stop trying to shield big business from the consequences of its wrongdoing? Less accountability will never lead to better health care. Substandard medical care is a growing problem. The Agency for Healthcare Research and Quality at HHS found that the number of adverse effects from medical treatment has more than doubled in recent years, rising from 302,000 in 1993 to 710,000 in 2000. A Healthcare Research and Quality study also found that adverse effects of medical drugs have increased by more than 44 percent in recent years, rising from 657,000 in 1993 to 992,000 in 2000. A 1999 study, by the Institute of Medicine at the National Academy of Sciences determined that at least 44,000 patients, and perhaps as many as 98,000 patients, die in hospitals each year as a result of medical errors. That is more than die from auto accidents, breast cancer, or AIDS each year. Despite these alarming numbers, less than one-half of 1 percent of the nation's doctors face any serious sanctions from Medical Review Boards each year. These statistics make clear that we need more accountability in the health care system, not less. In this era of managed care and cost controls, it is ludicrous to suggest that the major problem facing American health care is ``defensive medicine.'' The problem is not ``too much health care,'' it is ``too little'' quality health care. The restrictions on compensation for seriously injured patients which the McConnell Amendment seeks to impose would not even result in less costly care. The cost of medical malpractice premiums constitutes less than two-thirds of 1 percent 0.66 percent of the nation's health care expenditures each year. Malpractice premiums are not the cause of the high rate of medical inflation. Over the decade from 1988 to 1998, the cost of medical care rose 13 times faster than the cost of malpractice insurance. Did you get that? The cost of medical care rose 13 times faster than the cost of malpractice insurance. The restrictions in this amendment are not only unfair to patients, they are also an ineffective way to control medical malpractice premiums. There is scant evidence to support the claim that enacting malpractice limits will lower insurance rates. There is substantial evidence to the contrary. Malpractice premiums are no higher on average in the 27 States that do not place limitation on malpractice damages, than in the 23 States that do have such limits. Do we understand that? The premiums are no higher where you do not have these kinds of limitations than in the States that do. And you know what that means. The doctors are paying the higher premiums. Who do you think is keeping the difference? The insurance companies. The insurance companies. They are the ones that are making out. The evidence clearly demonstrates that placing arbitrary limitations on the 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 larger profits. The malpractice premiums are not affected by the imposition of the limits on recovery, so it stands to reason the availability of physicians does not differ between the States that have limits and the States that do not. I will use the chart that shows the difference between the States that do have limits and those that do not. Physicians In Patient Care: States without caps on damages, with 233 per 100,000 residents; the States with caps on damages, 223--virtually identical. The point here, in summation, is accountability and responsibility in the whole area of the health care industry and the profits that are going to result if this amendment is successful. It will not mean better health care. It will mean, less attention to protecting patients all the way through the health care system. It will mean larger profits. It will mean larger profits for an industry. It will mean less corporate responsibility. I hope this amendment will not be successful. Since malpractice premiums are not effected by the imposition of limits on recovery, it stands to reason that the availability of physicians does not differ between states that have limits 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 limits and 223 physicians per 100,000 residents in states with limits. Looking at the particularly high cost specialty of obstetrics and gynecology, states without limits on damages have 29 OB/GYNs per 100,000 women while states with limits have 27.4 OB/GYNs per 100,000 women. Clearly there is no correlation. If this amendment were to pass it, 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. Even supporters of the industry acknowledge that enacting tort reform will not produce lower insurance premiums: Victor Schwartz, the American Tort Reform Association's General Counsel, told Business Insurance, . . . many tort reform advocates do not contend that restricting litigation will lower insurance rates, and `I've never said that in 30 years.' Debra Ballen, Executive Vice-President of the American Insurance Association even released a statement earlier this year (March 13, 2002) acknowledging, [T]he insurance industry never promised that tort reform would achieve specific premium savings . . .. A National Association of Insurance Commissioners study shows that in 2000, the latest year for which data is available, 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. In fact, malpractice was a very lucrative line of insurance for the industry throughout the 1990s, averaging profits of 12 percent per year. Recent premium increases have been an attempt to maintain high profit margins despite sharply declining investment earnings. Insurance industry practices are responsible for the sudden dramatic premium increases which have occurred in some states in recent months. 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 recent months in a number of insurance lines, not just medical malpractice. In 2001, rates for small commercial accounts have gone up 21 percent, rates for mid-size commercial accounts have gone up 32 percent, and rates for large commercial accounts have gone up 36 percent. According to industry sources, auto insurance rates are projected to climb by 23 percent between 2000 and 2003, and homeowners insurance is projected to climb by 21 percent over the same period. These increases are attributable to general economic factors and industry practices, certainly not medical liability tort law. Insurers make much of their money form investment income. During times when investments offer high profit, companies compete fiercely with one another for market share. They often do so by underpricing their plans and insuring poor risks. When investment income dries up because interest rates fall and the stock market declines, the insurance industry then attempts to increase its premiums and reduce its coverage. This is a familiar cycle which produces a manufactured crisis each time their investments turn downward. One of the leading insurance industry analysts, Carol Brierly Golin, editor of Medical Liability Monitor, concluded: As the economy enjoyed a magic carpet ride in the 1990s, insurers kept rates artificially low because they earned more money investing than by writing policies . . . The insurance companies wouldn't be in this position if they hadn't been so hungry for investment profits . . . (Dec. 19, 2001). This analysis of why we are seeing a sudden spike in premiums was confirmed by a June 24, 2002 Wall Street Journal article describing what happened to the malpractice insurance industry during the 1990s. Some of these carriers rushed into malpractice coverage because an accounting practice widely used in the industry made the area seem more profitable in the early 1990s than it really was. A decade of short-sighted price slashing led to industry losses of nearly $3 billion last year. I don't like to hear insurance-company executives say it's the tort [injury-law] system--it's self-inflicted, says Donald J. Zuk, chief executive of Scpie Holdings, Inc., a leading malpractice insurer in California . . . The losses were exacerbated by carriers' declining investment returns. Some insurers had come to expect that big gains in the 1990s from their bond and stock portfolios would continue, industry officials say. When the bull market stalled in 2000, investment gains that had patched over inadequate premium rates disappeared. Proponents of the McConnell amendment justify the extreme restrictions they would place on the rights of injured patients as necessary to control medical malpractice premiums. The real beneficiaries of the amendment would be the insurance industry, which would pocket the money it saved on claims. The insurance premiums which doctors pay would not significantly change. The real losers, of course, would be the most seriously injured patients, who were denied fair compensation for their life-altering injuries. I strongly urge my colleagues to reject this amendment.

Mr. KENNEDY

Mr. KENNEDY. I understand I have 10 minutes. I yield myself 9 minutes. I have had the opportunity to spend a good deal of time in the Senate over the past days and had the chance again this afternoon to listen to many colleagues describe what is before the Senate. I have listened to the recent comments of my friend from Texas, saying this is just all about politics, and others saying we cannot consider the proposal of Senator Graham or Senator Smith because of gaps and loopholes. I have heard a great deal of characterization of what is before the Senate. What is before the Senate is an opportunity to make a very important downpayment for the seniors of this country, in a partial fulfillment of the promise we made to them in 1965 when we passed Medicare. That was a solemn pledge to the senior citizens of this country that said, play by the rules, pay into the system, and you will have health security when you retire. That was the commitment. That is what everyone remembers. And I had the opportunity of being there. Our majority leaders, our minority leaders, those in support of that program made that commitment to the American people. They made it to the workers at that time and to the parents and to the grandparents of that time: Health security will be yours. We all have an opportunity now to travel back to our hometowns and to listen to our seniors. Anyone who does that knows that we are failing that commitment every single day. Why? Because we provided hospitalization and we also provided physician services, but we have not provided prescription drugs. That is something we all understand. No one can say to our senior citizens: We have met our responsibility to you. If we do not pass a good benefit package here, we are continuing to fail our senior citizens. That may be described as politics to the Senator from Texas, and it can be described as $400 billion by the Senator from Nevada. Our proposal that provided the comprehensive care, where we got 52 votes and if we would have had 8 votes from our Republican friends, we would be on our way to conference this evening to try to guarantee that kind of protection. But no, we say we cannot do that. Then all afternoon, we had hearings about gaps in this proposal or that proposal. If you go from approximately $800 billion down to $400 billion, you are going to find out that you are not going to have the same benefit package. And if that is what you want on that side to agree to, we will agree to that. But I tell you something else we agree to: We make our commitment when we get this passed, and passed with the help of some courageous Republicans, we are not stopping there; we are coming back and we are going to complete the job. That is our commitment to the seniors tonight and tomorrow, that this is a downpayment. But it is only the beginning, no matter how concerned you are about why we are considering this legislation on the floor of the Senate. I was here for 4 of the last 5 years when we could never get this bill out of the Finance Committee--buried, buried, buried by Republican leaders on the floor of the Senate and leaders on the Finance Committee. Finally, we have a courageous Democratic leader who puts this before the Senate. Then we hear: Oh, no, we cannot consider that because that is politics. What was political was denying the ability for the Senate to consider this over the period of the last 4 years. Where have you been? Where have you been? I can tell you where we are. I can tell you where Bob Graham is, and Senator Smith is, and that is here tomorrow and they are going to be saying: This is a downpayment. This doesn't do all the job. We all want to have a better benefit package, but we are denied that opportunity. We were denied that by the failure of the votes on that side; make no mistake about it. Who are the people we are talking about? We are talking about, as has been described earlier in this debate--we are talking about the greatest generation, those who have fought in World War II, who have come back, and are now in their golden years. Those are the people we are talking about. That is what is at issue here. Are we going to meet our responsibility to men and women who fought in World War II, fought in the Korean war, some, perhaps, could even be qualified from the Vietnam war--men and women who brought the country out of the Depression, served, and built the Nation to the great Nation it is; and they need prescription drugs. And we are rattling around down here wondering how we gain political advantage. That is what is motivating those of us on this side, to meet that responsibility, Senator. We heard the same arguments I heard when we were battling Medicare. I have read the history and we heard the same arguments when they were passing Social Security: We cannot do it. We should not do it. We can't make that kind of commitment. Medicare was the exact same thing: We can't afford it. It is socialized medicine. I haven't heard about socialized medicine out here since 1994 when we were debating a comprehensive health care program. I have not heard socialized medicine, but that is what we were talking about in the Medicare debate. They spared us that, but they still bring it up in opposition. And I don't question that because that side of the aisle was opposed to Medicare, and they were opposed to Social Security. Are we in any doubt they are opposed to this endeavor? Tomorrow, make no mistake about it, this will be the key vote in terms of prescription drugs. I wish we were back to the time that we were considering the more comprehensive program that made sure we were going to attend to all the needs of our senior citizens, all of those needs. That is what we ought to be doing, but we cannot do it because we have been defeated on that. But we are not giving up. We are coming back again. We are making the commitment, if we are able and successful, to get this downpayment. It will make an important difference to the quality of lives for millions of our senior citizens. Look what the CBO talks about. The program will reach almost half--49 percent of our neediest senior citizens, and for those above the $3,300--another 15 percent. If you add those together, it is virtually two-thirds of all of our seniors. We wish it were 100 percent, but they wouldn't give us the eight votes. This is two-thirds. It may not have all the benefits, let alone the other advantages in terms of the lower discount rates that will benefit those even in that third. But it is a sincere effort, the best effort that could be done over the period of these last 2 days, to try to continue this battle and continue the struggle. That is what this is all about. We reject those who say this is not the time, this is not the place. I listened with great interest to those who were defending the program that was advanced earlier last week. That had a drug program for $330 billion, and they are trying to compare that to the one that was introduced by Senator Graham, saying it was more comprehensive, it was more complete, it would provide our seniors with better services? Then why didn't the seniors support it? That is our simple answer. Why didn't the seniors support it? You couldn't get the support because it failed to do that. We welcome the fact that the senior organizations support the Graham- Smith program. They supported our efforts a week ago when we were trying to get the comprehensive program. Over the period of these last days, they have looked the range of different options being proposed. These groups that represent seniors understand what is at risk and what opportunities lie before us now, and they are supporting our efforts to get this downpayment. When we get this downpayment, that is what it will be. It will be a downpayment. We will hear voices continuing to harp on the other side that would really like to take even more hundreds of billions of dollars and give it to the wealthiest individuals in this country and reduce their taxes, but this is about making sure that we are going to walk the walk and give to our senior citizens that same kind of prescription drug program that my friend Phil Gramm has, right over here, in the well of the Senate. He has a comprehensive program. He pays about a 25-percent copay on his program. Every Member of the Senate has it. Should we retreat on a commitment to try and do for the people of this country what the Members of the Senate have already done for themselves? I say vote for the Graham proposal. We will make the commitment that this will be a downpayment and we will see the day when our senior citizens will be able to raise their heads high and know they will not have to fear when they hear from their doctors that they need prescription drugs in order to live a healthy and happy life. I think the time has expired.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I will vote against the confirmation of Judge D. Brooks Smith to the United States Court of Appeals for the Third Circuit. While Judge Smith is an intelligent jurist, I believe that his serious ethical lapses, and his record of reversals by the Third Circuit in cases concerning civil rights, and the rights of workers, environmental protection and consumer safety suggest that Smith has not met his burden of showing that he should be elevated to the Third Circuit. Judge Smith's handling of his membership in the Spruce Creek Rod and Gun club, a club whose by-laws explicitly forbid the admission of women, gives me great concern. I am disturbed by Judge Smith's failure to resign from the Spruce Creek Club in a timely manner despite his sworn oral and explicit written promise to this committee at the time of his 1988 confirmation hearing. Smith promised that if he was unsuccessful in trying to change the club's membership policies he would resign, but he failed to do so for another 11 years, until 1999. Rather than provide a simple explanation, or an apology, for his failure to fulfill this promise, Judge Smith claimed at his hearing that the Judicial Code of Conduct, the ethical rules governing judges, did not actually require resignation from the club. According to Smith, the Spruce Creek Club is purely a social club and is thus exempt from the rules. This strikes me as disingenuous. Judge Smith's 1999 resignation letter to Spruce Creek made clear that he was resigning from the club because its male-only admissions policies ``continue to be at odds with current expectations of Federal judicial conduct,'' suggesting that he knew the club's membership policy was in conflict with the Judicial Code of Conduct. Contrary to Judge Smith's representations, it also appears that the Spruce Creek Club is not merely a social club, but a place where business is conducted. Three ethicists, including one who wrote at the behest of the Ranking Minority Member of the Judiciary Committee, have written that if the Spruce Creek Club can be used for business purposes, its exclusion of women would violate the Judicial Code of Conduct. The President of Spruce Creek Club has acknowledged that members of this club are allowed to host a variety of meetings on the premises, and the committee has learned that business and political meetings have been held at the club. The Code of Judicial Conduct is clear that exclusion of women, minorities, and others from clubs where business is conducted is prohibited. In addition, in 1990, this committee adopted a resolution stating that membership in organizations that practice invidious discrimination was inappropriate for a judicial nominee. The resolution reflects our belief that because such membership ``may be viewed as a tacit endorsement of the discriminatory practices, it conflicts with the appearance of impartiality'' that is required of federal judges. We recognized that exclusion of women and racial, ethnic or religious minorities from social clubs that also perform business denies these groups opportunities to make contacts with important members of the community, contacts that are often crucial to professional advancement. I am also troubled by Judge Smith's approach to cases implicating Federal rights important to victims of discrimination, workers and the disabled, and his disturbing, consistent pattern of favoring business and employers in these cases. Judge Smith has been reversed 51 times by the Third Circuit, often by panels of conservative judges. In many of these cases, Smith takes a narrow view of the laws protecting plaintiffs against abuses by businesses and employers. For instance, in Wicker v. Conrail, a case brought under the Federal Employer's Liability Act, FELA, Judge Smith was reversed by the Third Circuit for dismissing claims by workers who were exposed to toxic chemicals at their job site. The company knew the job site was contaminated, but the workers did not, yet Smith found that the workers had waived their claims by signing a general release settling prior, unrelated injury claims. The Third Circuit reversed, holding that claims relating to unknown risks cannot be waived under FELA, and emphasized the Supreme Court's directive, ignored by Judge Smith, that FELA be given a ``proemployee'' construction. Similarly, in Ackerman v. Warnaco, the Third Circuit reversed Smith for granting summary judgment to the company with regard to ERISA claims brought by former employees who were denied promised severance pay after the company, unbeknownst to the workers, changed its written policy to deny severance pay shortly before laying off the workers. Again, in Unity Real Estate v. Hudson, Smith ruled against workers in a case concerning the Coal Industry Retiree Health Benefit Act. Amazingly, Smith held that coal act, which Congress passed in 1992 to require companies to enforce collective bargaining agreements promising lifetime health benefits for longtime workers, amounted to an unconstitutional taking. One year later, in a similar case, the Third Circuit effectively overruled Smith's holding on this score, noting that every Court of Appeals to have considered a ``takings'' challenge to the coal act had rejected it. In addition, Judge Smith has a disturbing pattern of ruling against plaintiffs in civil rights cases. For instance, in United States v. Pennsylvania, Judge Smith ruled that an institution for the mentally disabled, whose violations included serving pest-infested food, improperly confining residents, failing to provide appropriate medical treatment, and overmedicating residents--did not violate the Constitution's due process clause. In another case, Schaefer v. Board of Public Education, Judge Smith was reversed by the Third Circuit, for dismissing the sex discrimination claim of a male teacher who claimed that the school board's family leave policy, which entitled women, but not men, to one year of unpaid leave for childbirth or ``childrearing'' violated Title VII. Judge Smith's pattern of ruling in favor of business is particularly troubling when coupled with his frequent attendance at seminars funded by pro-business corporations and groups. Judge Smith spent more than 72 days on junkets at luxury resorts. The trips were valued at more than $37,000 and sponsored by groups that promote ``free market environmentalism,'' and oppose environmental regulations. I am troubled by the appearance of partiality caused by Judge Smith's frequent attendance at such junkets given the pro-business pattern of his rulings. Judge Smith's narrow view of congressional power to pass legislation under the commerce clause, as expressed in a 1993 speech to the Federalist Society, also gives me great concern. In this speech, Judge Smith criticized the Violence Against Women's Act, which passed both Houses of Congress by overwhelming majorities, as exceeding Congress's power under the commerce clause. Judge Smith advanced a cramped reading of Congress' commerce clause power, stating that ``the Framers' primary, if not sole, reason for giving Congress authority over interstate commerce was to permit the national government to eliminate trade barriers.'' Not only would Judge Smith's reading of the commerce clause render Congress powerless to pass statutes like the Violence Against Women's Act but, under Judge Smith's reasoning, it appears that any Congressional enactment other than those aimed at eliminating trade barriers would be constitutionally suspect, including statutes such as the Fair Labor Standards Act, the Equal Pay Act, the Clean Air Act, and the Clean Water Act. In sum, I do not believe that Judge Smith has shown he has the integrity and commitment to core constitutional values required to justify his elevation to the Third Circuit. I therefore oppose his nomination.

Mr. KENNEDY

Mr. KENNEDY. I yield an additional minute.

Mr. KENNEDY. Mr. President, I yield 4 minutes to the Senator from Massachusetts.

Mr. KENNEDY. So we have how much time, Mr. President?

Mr. KENNEDY. I yield myself 7 minutes. Mr. President, we have heard some discussion earlier today about the state of the debate on the prescription drug program. To remind all of our colleagues, that legislation would have been tied up in the Finance Committee for over 5 years. It was only because of the leadership of Senator Daschle that we were able to ensure that we had some debate on the floor of the Senate on a matter of central importance to families all over this country. With the leadership of Senator Graham, Senator Miller, and others, we have had a good debate. We had some votes in the Senate on some very important comprehensive measures. There was the vote, which I was proud to support, on Senator Graham's amendment, which received 52 votes. If we had had 8 votes from that side of the aisle, this legislation would be on its way now to a conference and there would be a real possibility of gaining comprehensive coverage. That program provided a $25 premium, no deductible, and limited copays at $10 for generic drugs, $40 for brand name drugs. It also had a catastrophic program. That was the way to go. But it was defeated. No one supported it. Now, 10 days later, can we make a difference and provide some relief to the seniors in our country? Senator Graham will have the opportunity, after the disposal of this amendment, to make his case, which I intend to support for reasons I will outline during the course of that debate. But none of us should be under any illusion of where the responsibility lies in terms of our failure to get a comprehensive program. We were able to gather the support of virtually every Member on this side of the aisle for a very comprehensive program with low premiums and no deductibles, and a very reasonable copay that had the support of all of the senior groups. When I listen to those who were opposed to it talk about their alternative, they clearly did not have the support of a single senior group. Now let us get back to what is at hand, and that is the medical malpractice amendment introduced by my friend from the State of Kentucky. On Friday, the sponsor of this amendment, Mr. McConnell--which has also been characterized by the Senator from Tennessee--described it as ``pro-victim and pro-consumer.'' He claimed that since his amendment did not contain a cap on non-economic damages, it would not ``adversely affect'' an injured patient's ability to recover compensation for injuries caused by a health care provider. In fact, the McConnell amendment is pro-HMO, pro-drug manufacturer, and pro-insurance company, at the expense of patients. Make no mistake about it. There is a great deal in this amendment which would deprive serious injured patients of fair compensation. At virtually every stage of the legal process, the amendment systematically rewrites the rules of civil law to tip the balance in favor of defendants. It would arbitrarily shield health care providers and their insurance companies from basic responsibility for the harm they cause. At a time when the American people are calling for greater corporate accountability, it is unbelievable that our Republican colleagues would bring to the floor an amendment which would do just the opposite. The McConnell amendment would allow the entire health care industry to avoid accountability for the care they provide and that is not acceptable. While those across the aisle like to talk about doctors, the real beneficiaries will be insurance companies. This amendment would enrich the insurance industry at the expense of the most seriously injured patients; men, women, and children whose entire lives have been devastated by medical neglect and corporate abuse. This proposal would also shield HMOs that fail to provide needed care, nursing homes that neglect elderly patients, drug companies whose medicine has toxic side effects, and manufacturers of defective medical equipment. It would drastically limit the financial responsibility of the entire health care industry to compensate injured patients for the harm they have suffered. When will the Republican Party start worrying about injured patients and stop trying to shield big business from the consequences of its wrongdoing? Less accountability will never lead to better health care. There is no real question about the effect of their amendment. It would, in fact, place major new restrictions on the right of seriously injured patients to recover fair compensation for their injuries. Let's look at what the amendment actually does. It abolishes joint and several liability for non-economic 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 provides whose misconduct contributed to the patient's injuries will be able to escape responsibility for paying full compensation to that patient. The patient's injuries would not have happened if not for the misconduct of both defendants, so each defendant should be responsible for making sure the victim is fully compensated. The bias in the McConnell amendment could not be clearer. It would preempt State laws that allow fair treatment for injured patients, but would allow State laws to be enacted which had greater restrictions on patients' rights than the proposed federal law. This one-way preemption shows how result-oriented the amendment 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. It mandates that providers and insurance companies be permitted to pay a judgment in installments rather than all at once. Allowing health care providers, including HMO's, large drug manufacturers and their insurance companies to pay on the installment plan transfers compensatory dollars that rightfully belong to an injured patient back to the wrongdoer. If the patient does not receive the money for years, he in reality is getting less money than the court concluded that he deserves for his injuries. The amendment makes it much harder to sue a physician for injuring a baby or its mother during the delivery process if the doctor had not previously treated the mother. It requires a much higher burden of proof, clear and convincing evidence, than is normally provided for in a civil case. There is no reason why a practicing physician should not be held to the normal standard of medical care merely because he had not previously treated the patient. Such a provision is grossly unfair to pregnant women. In essence, their doctors are held to a lower standard of care than all other medical professionals. The places extremely restrictive limitations on when an injured patient can receive punitive damages, and how much punitive damages the victim can recover. It would cap punitive damages at twice the amount of compensatory damages, no matter how egregious the defendant's conduct and no matter how large its assets. This would destroy the deterrent effect of punitive damages in the very few cases where punitives would still be allowed. Even more outrageous is the language on page 23 which appears to say that the government would take half of any punitive damages which the injured patient did receive. This amounts to a confiscatory tax on punitive recoveries, which is extremely unfair to the victims. It is the victims who have been harmed by the malevolent conduct. The government should not arbitrarily take half of the jury award. 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 enact all of these arbitrary restrictions on the compensation which seriously injured patients can receive, what benefits would result in our health case system? Certainly less accountability for health care providers will never improve the quality of health care. Substandard medical care is a growing problem. The Agency for Healthcare Research and Quality at HHS found that the number of adverse effects from medical treatment has more than doubled in recent years. These disturbing statistics make clear that we need more accountability in the health care system, not less. In this era of managed care and cost controls, it is ludicrous to suggest that the major problem facing American health care is ``defensive medicine.'' The problem is not ``too much health care,'' it is ``too little'' quality health care. In the time remaining, I will cover two or three other points. This chart asks, Do malpractice premiums drive up medical costs? It shows health care and malpractice inflation. Look at health care costs they have gone up 74 percent since 1988; medical malpractice costs, 5.7 percent. For States without caps on damages, the average cost of medical malpractice insurance is $7,715 for internal medicine; in States with caps on damages, it is $7,887. For general surgery, it is $26,144 for States without and $26,746 for States with caps on damages; for OB/GYN, it is $43,000 for States without caps versus $44,000 for States with caps. The impact on general health care issues has been considerably less. The fact remains that the number of doctors per 100,000 people in States which do have the caps versus those that do not are virtually identical. The costs of the premiums are exactly the same. Let's get focused on where the needs are and the beneficiaries and the losers of this amendment. The beneficiaries will be the insurance companies; the losers will be the patients who are going to suffer because of negligence. That is wrong. That proposal should not be accepted.

Mr. KENNEDY. Mr. President, will the Senator yield for a question?

Mr. KENNEDY. I yield 6 minutes to the Senator from Tennessee.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I am pleased to introduce today the National Science Foundation Doubling Act. This important legislation has been crafted with the extensive cooperation of Senator Hollings, Chairman of the Senate Committee on Commerce, Science, and Transportation, Senator Mikulski and Senator Bond, the respective Chair and Ranking Member of the Senate Committee on Appropriations Subcommittee on Veterans Affairs, Housing and Urban Development, and Independent Agencies. I commend each of them for their leadership in federal support for the sciences . The National Science Foundation, NSF, has two key missions, and it carries both of them out well. It supports basic research and development in math, science, engineering, and technology, and it promotes math and science learning at every level, from K-12 through post-graduate education. NSF has funded basic research leading to the creation of speech recognition software, MRI machines, and even World Wide Web browsers such as Netscape and Microsoft's Internet Explorer. In education, NSF initiatives of the late 1980s were the forerunners of the standards- based school reform movement embraced throughout the Nation today. We can and should build on NSF's distinguished record in improving the lives of millions of Americans. The 20th Century was the era of the industrial age, and the 21st Century will be the era of information technology and the life sciences. With the leadership of Senator Harkin and others, we have doubled the budget of the National Institutes of Health over the last five years. We should do the same for NSF. We should double our support for research and development in theoretical mathematics and the physical sciences, because they support advances in the health sciences and because they are also valuable in their own right. As former Senator Glenn has pointed out so frequently, we need to do much more to interest young minds in math and science and recruit tomorrow's scientists and engineers. Over the next 10 years, the number of jobs requiring technical skills will grow by 50 percent. Unfortunately, high school student performance on math and science exams is alarmingly low. The number of American students studying the sciences at the post-secondary level is flat. Too many women and minorities continue to shy away from the sciences. The bill we are introducing today authorizes a doubling of the NSF budget over the next five years. It makes sense to match the growth of NIH. As we enhance research and development in the life sciences, we should also be strengthening research and development in the physical sciences. This legislation also builds on NSF's Systemic Initiatives by supporting a Secondary School Systemic Initiative to develop models to improve high school student math and science performance and preparation for college-level or technical work. The bill supports model Math and Science Partnerships between institutions of higher education and local school districts to improve the knowledge and teaching techniques of current math and science teachers. The bill supports institutions of higher education in increasing the number of students, particularly women and minorities, who study toward and obtain degrees in science, math, engineering, and technology. Finally, the bill reforms NSF's program on major research and facilities equipment, to help prioritize projects and guard against cost overruns and non-merit reviewed proposals. Scientific discovery and development continues to set America apart from other Nations and is one of our enduring legacies. The National Science Foundation Doubling Act is a solid piece of legislation building on our Nation's history in the sciences and promoting a better future. It deserves to be considered quickly, and I believe favorably, by the United States Senate.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I am pleased to introduce today the National Science Foundation Doubling Act. This important legislation has been crafted with the extensive cooperation of Senator Hollings, Chairman of the Senate Committee on Commerce, Science, and Transportation, Senator Mikulski and Senator Bond, the respective Chair and Ranking Member of the Senate Committee on Appropriations Subcommittee on Veterans Affairs, Housing and Urban Development, and Independent Agencies. I commend each of them for their leadership in federal support for the sciences . The National Science Foundation, NSF, has two key missions, and it carries both of them out well. It supports basic research and development in math, science, engineering, and technology, and it promotes math and science learning at every level, from K-12 through post-graduate education. NSF has funded basic research leading to the creation of speech recognition software, MRI machines, and even World Wide Web browsers such as Netscape and Microsoft's Internet Explorer. In education, NSF initiatives of the late 1980s were the forerunners of the standards- based school reform movement embraced throughout the Nation today. We can and should build on NSF's distinguished record in improving the lives of millions of Americans. The 20th Century was the era of the industrial age, and the 21st Century will be the era of information technology and the life sciences. With the leadership of Senator Harkin and others, we have doubled the budget of the National Institutes of Health over the last five years. We should do the same for NSF. We should double our support for research and development in theoretical mathematics and the physical sciences, because they support advances in the health sciences and because they are also valuable in their own right. As former Senator Glenn has pointed out so frequently, we need to do much more to interest young minds in math and science and recruit tomorrow's scientists and engineers. Over the next 10 years, the number of jobs requiring technical skills will grow by 50 percent. Unfortunately, high school student performance on math and science exams is alarmingly low. The number of American students studying the sciences at the post-secondary level is flat. Too many women and minorities continue to shy away from the sciences. The bill we are introducing today authorizes a doubling of the NSF budget over the next five years. It makes sense to match the growth of NIH. As we enhance research and development in the life sciences, we should also be strengthening research and development in the physical sciences. This legislation also builds on NSF's Systemic Initiatives by supporting a Secondary School Systemic Initiative to develop models to improve high school student math and science performance and preparation for college-level or technical work. The bill supports model Math and Science Partnerships between institutions of higher education and local school districts to improve the knowledge and teaching techniques of current math and science teachers. The bill supports institutions of higher education in increasing the number of students, particularly women and minorities, who study toward and obtain degrees in science, math, engineering, and technology. Finally, the bill reforms NSF's program on major research and facilities equipment, to help prioritize projects and guard against cost overruns and non-merit reviewed proposals. Scientific discovery and development continues to set America apart from other Nations and is one of our enduring legacies. The National Science Foundation Doubling Act is a solid piece of legislation building on our Nation's history in the sciences and promoting a better future. It deserves to be considered quickly, and I believe favorably, by the United States Senate.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I think we were trying to go back and forth. I know the Senator has to leave. I don't know what the Senator's time limitation is. Could he take 7 minutes?

Mr. KENNEDY. Mr. President, I want the record very clear--then we are not going from side to side? I thought we were going from side to side. I withdraw that. (Laughter) Senator McConnell had two speeches. We have followed the side-to-side rule. Now we are making it clear that on this legislation we no longer have to follow it. If that is the way it is going to be--we have respected that since the start of this debate. This is the first time I have been on the floor for 7 days that we have not done that. I am prepared to yield to the Senator.

Mr. KENNEDY. Mr. President, this amendment has nothing to do with the price of prescription drugs, the cost of health care, or even the insurance premiums of doctors. It has everything to do with the profits of the insurance industry. At a time when Americans want greater corporate accountability, in this time of Enron, WorldCom, and other corporate scandals, it is unbelievable that our Republican friends cozy up to big insurance corporations to give them a break. Let me remind my colleagues that the legislation before the Senate is about the high price of prescription drugs and providing a Medicare prescription drug benefit. Now the Republican side is trying to divert attention from this important debate by offering this amendment. It is an attack on the very people the underlying legislation was designed to help, those in need of quality medical care. The McConnell amendment is designed to shield health care providers from the basic accountability for the care they provide. While those across the aisle like to talk about doctors, the real beneficiaries will be the insurance companies. This amendment enriches the insurance industry at the expense of the most seriously injured patients--men and women and children whose entire lives have been devastated by medical negligence and corporate abuse. This proposal also shields HMOs that fail to provide needed care, drug companies with medicine that has toxic side effects, and manufacturers of defective medical equipment. In recent months, the entire Nation has been focused on the need for greater corporate accountability. The McConnell amendment does the reverse. It dramatically limits the financial responsibility of the entire health care industry to compensate injured patients for the harm they have suffered. When will the Republican Party start worrying about injured patients and stop trying to shield big business from the consequences of its wrongdoing? Less accountability will never lead to better health care. This amendment places major new restrictions on the right of seriously injured patients to recover fair compensation for their injuries. These restrictions only serve to hurt those patients who have suffered the most severe, life-altering injuries, and to have their cases proven in court. If we were to arbitrarily restrict the compensation which seriously injured patients can receive, as the sponsor proposes, what benefits would result? Certainly, less accountability for health care providers will never improve the quality of health care. It will never even result in less costly care. The cost of medical malpractice premiums constitutes less than two- thirds of 1 percent. Do we understand that? The cost of medical malpractice premiums constitutes two-thirds of 1 percent of the Nation's health care expenditures each year. Malpractice premiums are not the cause of the high rate of medical inflation. Over the decade from 1988 to 1998, the cost of medical care rose 13 times faster than the cost of malpractice insurance. This chart reflects that: The growth of health care costs plus 74 percent; and the medical malpractice costs, 5.7 percent. These restrictions are not only unfair to patients but an effective way to control medical malpractice claims. There is scant evidence to support the claim that enacting limits will lower insurance rates. There is substantial evidence to the contrary. There are other much more direct, effective ways to address the costs of medical malpractice insurance that do not hurt patients. The supporters of the McConnell amendment have argued that restricting an injured patient's right to recover fair compensation will reduce malpractice premiums. They cite a report released just yesterday by the Department of Health and Human Services. However, that data is neither comprehensive or persuasive. It looks at only 10 of the 27 States that do not currently have a cap on malpractice damages, and it looks at the rate of increase in those States for only 1 year. In essence, that report cherry-picks the data to support a politically preordained conclusion. Let's look at the facts: 23 States currently have a cap on medical malpractice damages. Most have had those statutes for a substantial number of years. And 27 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 the data of medical liability monitored on all 50 States, the average liability premium in 2001 for doctors practicing internal medicine was slightly less, 2.2 percent for doctors in States without caps on malpractice, $7,715; and in States with caps on damages, $7,887. Internists actually pay more for malpractice insurance in the States that have the caps. The average liability premium in 2001 for general surgeons was also slightly less. For doctors in States without caps, $26,144; in States with caps, it was $26,746. Surgeons are also paying more in States that have caps. The average liability premium on OB/GYN physicians in 2001 was only 3.3 percent more for doctors in States without caps, $44,485; and States with caps, $43,000--a very small difference. 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 bigger profits. This chart over here indicates the States without the cap on damages, States with a cap on damages. I think the proof is in the pudding. Since malpractice premiums are not affected 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 the States that do not. Do we understand that? We are talking about comparing the number of available physicians between the States that do have caps and the States that do not. AMA data show 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 of obstetrics and gynecology, States without caps have 29 OB/GYNs per 100,000 while States with caps have 27.4 per 100,000. Clearly, there is no correlation. California, the State that has the lowest caps the longest, set a $250,000 cap on noneconomic damages in the mid-1970s, which has not been adjusted for inflation since. If the tort reformers are correct, you would expect California to have had a smaller percent of growth in premiums since those caps were enacted. Between 1991 and 2000, premiums in California actually grew more quickly, 3.5 percent, than did the premiums nationwide. The State with the caps shows the malpractice insurance actually went up. If this amendment were to pass, it would sacrifice fair compensation for injured patients in a vain attempt to reduce medical malpractice premiums. Doctors would not get the relief they are seeking. Only the insurance companies, which created recent market's instability, would benefit. Even supporters of the industry acknowledge that enacting tort reform will not produce lower insurance premiums. Sherman Joyce, the president of the American Tort Reform Association, told the Liability Week publication: We wouldn't tell you or anyone that the reason to pass tort reform would be to reduce insurance rates. This is the president of the American Tort Reform Association, telling Liability Week: We wouldn't tell you or anyone that the reason to pass tort reform would be to reduce insurance rates. Victor Schwartz, the association's general counsel, told Business Insurance: . . . many tort reform advocates do not contend that restricting litigation will lower insurance rates and ``I've never said that in 30 years.'' The American Insurance Association even released a statement earlier this year, March 13, 2002, acknowledging: [T]he insurance industry never promised that tort reform would achieve specific premium savings. Listen to that. The American Insurance Association even released the statement on March 13: [T he insurance industry never promised that tort reform would achieve specific premium savings. A National Association of Insurance Commissioners study shows that in 2000, the latest year for which data is available, 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? The insurance industry commissioners are now saying that the insurance industry profits, as a percentage of premiums for medical malpractice, are twice as high as overall casualty and property insurance profits. 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 high profit margins despite sharply declining investment earnings. Insurance industry practices are responsible for the sudden, dramatic premium increases which have occurred in some States in recent months. 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 recent months in a number of insurance lines, not just medical malpractice. In 2001, rates for small commercial accounts have gone up 21 percent, rates for midsize commercial accounts have gone up 32 percent, and rates for large commercial accounts have gone up 36 percent. These increases were attributable to general economic factors and industry practices, not medical liability tort law. Insurers make much of their money from investment income. During the time when investments offer a high profit, companies compete fiercely with one another for market share. They often do so by underpricing their plans and insuring poor risks. When investment income dries up because interest rates fall, the stock market declines, or cumulative price cuts lower profit, the insurance industry then attempts to increase its premiums and reduce its coverage. This is a familiar cycle which produces a manufactured crisis each time their investments turn downward. For example, St. Paul, one of the largest medical malpractice insurers, which has been experiencing serious financial difficulties lately, actually released $1.1 billion in reserves between 1992 and 1997 to enhance its bottom line and make those dollars available for investment. Some of the company's investments did not go well. It lost $108 million in the collapse of Enron alone. When claims became due, those reserves were not available to pay them. A recent study of the Consumer Federation of America, presented at a hearing of the Health Subcommittee of the House Committee on Energy and Commerce last week, documented this industry's trend: It is the hard insurance market and the insurance industry's own business practices that are largely to blame for the rate shock that physicians have experienced in recent months. The Consumer Federation's findings are highly enlightening: Medical malpractice rates are not rising in a vacuum. Commercial insurance rates are rising overall. The rate problem is caused by the classic turn in the economic cycle of the industry, sped up--but not caused--by terrorist attacks. Insurers have underpriced malpractice premiums over the last decade. It would take a 50 percent hike to increase inflation-adjusted rates to the same level as 10 years ago. Further limiting patients' right to sue for medical injuries would have virtually no impact on lowering overall health care costs. Medical malpractice insurance costs as a proportion of the national health spending are minuscule, amounting to less than 60 cents per hundred dollars spent. Insurer losses for medical malpractice have risen slowly in the last decade by just over the rate of inflation. Malpractice claims have not exploded in the last decade. Closed claims, which include claims where no payout was made, have remained constant, while paid claims have averaged just over $110,000. Medical malpractice profitability over the last decade has been excellent, at just over 12 percent per year despite a decline in profits in the last 2 years. That is the profit they have been making over the last decade. This analysis of why we are seeing a sudden spike in premiums was basically confirmed by a June 24, 2002, Wall Street Journal article describing what happened to the malpractice insurance industry during the 1990s: Some of these carriers rushed into malpractice coverage because an accounting practice widely used in the industry made the area seem more profitable in the early 1990s than it really was. Does that have a ring to it, Mr. President? Carriers rushing in because an accounting practice widely used in the industry made the area seem more profitable in the early 1990s than it really was? And now we are going to take it out on the individuals who are most vulnerable and most severely hurt in our society? A decade of shortsighted price slashing led to industry losses of nearly $3 billion last year. I continue the quote from the Wall Street Journal: I don't like to hear insurance company executives say it's the tort system--it's self-inflicted--says Donald Zuk, chief executive of SCPIE Holdings, Inc., a leading malpractice insurer in California. This is what he said: I don't like to hear insurance companies say it's the tort system--it's self-inflicted. . . . Zuk then continues: Then it continues: The losses were exacerbated by carriers' declining investment returns. Some insurers had come to expect that big gains in the 1990s from their bond and stock portfolios would continue, industry officials say. When the bull market stalled in 2000, investment gains that had patched over inadequate premium rates disappeared. Let's look back at the type of severely injured patients who would be denied fair compensation under the McConnell amendment. These are the people who are being asked by those across the aisle to pay for the mismanagement of the insurance industry and the wrongdoing of health care providers: Leyda Uuam--from Massachusetts--underwent surgery to correct a protruding belly button when she was 5 weeks old. Leyda will never walk, talk, move, or have any normal function after she suffered brain injury due to a series of errors by anesthesiologists, nurses, and a transport team. When Mrs. Oliveira's unborn baby showed fetal distress her doctor failed to perform a timely caesarean birth as common sense would indicate. Instead, he attempted a forceps delivery. When this didn't work, he made three attempts at vacuum extraction, which were also unsuccessful. A different physician then attempted a second forceps delivery, which also failed. Finally, Olivera underwent a caesarean section, yet her son died within an hour of his birth. An autopsy report identified the cause of death asphyxia. The hospital, in an attempt to cover its negligence, amended the report falsely, listing the cause of death as probably fetal sepsis. Twelve year-old Steven Olsen is blind and brain damaged today because of medical negligence. When he was hiking, he fell on a stick in the woods. The hospital refused his parents' request for a CAT scan, and instead pumped Steven full of steroids and sent him home with a growing brain abscess. The next day, Steven Olson became comatose and wound up back in the hospital. Had he received the $800 CAT scan, which would have detected the brain mass growing in his skull, Steven would be perfectly healthy today. The jury awarded Steven $7.1 million in non- economic damages for his life-sentencing of serious illness and disability. Harry Jordan, as man from Long Beach, underwent surgery to remove a cancerous kidney. The surgeon took out his healthy kidney instead. Jordan had been living for years on 10 percent kidney function, and he is now no longer able to work. Elizabeth, a former fashion model, went to the emergency room complaining of nausea, vomiting, and ``the worse headache of her life.'' The doctor misdiagnosed her as having an acute neck sprain and sent her home. Unfortunately, he failed to diagnose her symptoms as the warning leak of a brain aneurysm even though he had written a textbook which included an entire chapter on warning leaks. Ten days after her hospital visit, Elizabeth's aneurysm ruptured and she had a stroke. The bleeding destroyed brain tissue, requiring the removal of \1/3\ of the frontal lobe of her brain. Elizabeth was left paralyzed as a result of her misdagnosed aneurysm. Philip Lucy's nasal cancer was misdiagnosed by doctors as high blood pressure and nerve damage for 2 years, although he continued to complain of pain. It was finally discovered that his left sinus was completely filled with a cancerous mass. This necessitated the removal of his left palate, left cheek, left orbit and his left eye. LeVern Dostal, a recent retiree, died a slow and painful death after her surgeon failed to give her antibiotics before her gallbladder surgery. She developed sepsis and was hospitalized for a lengthy period of time, during which she underwent 3 more surgeries, as her condition slowly deteriorated. Ms. Keck, 63, was admitted to the hospital for pneumonia. She sustained brain injuries because a nurse failed to monitor her oxygen level as instructed, and failed to notify the doctors of her worsening condition. She now suffers from paralysis and cannot speak. The hospital was purposefully understaffed to increase profits. As we debate this amendment, let us all remember that we are dealing with people's lives--many of them have suffered life-altering injuries as a result of substandard medical care. The law is there to protect them, not to shield those who caused their injuries. I hope the Senate will not accept the McConnell amendment for the reasons I have outlined. As we have seen on so many different occasions, the neediest, the youngest, and the most vulnerable individuals in our society are often those who suffer the greatest kinds of neglect and negligence. If we are going to have accountability in our society, we ought to have accountability. One of the extraordinary things I heard was yesterday during the President's statement in North Carolina when he talked about accountability by victims, but not accountability by the insurance companies and not accountability by the others--not accountability by others even in the corporate world but accountability by schoolchildren. If they are not able to learn and be successful, then they are not included in terms of the completion of their studies. And now they are being held accountable. We are not getting the resources for them in order to give them the fair chance. It seems to me we are being asked to protect the strongest elements in terms of our society. We have seen that during the course of this whole debate. Now we see it with regard to an amendment to protect the insurance companies. When we look at any piece of legislation, we should ask: Who is going to benefit, and who is going to lose? The answer is very simple with this amendment. The people who are going to benefit are going to be the insurance companies themselves, and the people who are going to pay the price are going to be our most vulnerable in our society who need our protection.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, first, I thank our friend from West Virginia for his excellent presentation and strong support. I welcome the opportunity to be a cosponsor of this legislation. I know there has been a good deal of debate and discussion about the technicalities of this amendment, but what we are really talking about are real people being hurt in the most egregious way if we fail to respond. We know that our States are facing economic challenges, and those economic exigencies have required cutbacks in some of the very important programs that reach out to the neediest people in these States. We are talking about real people who are being hurt. Pregnant women in Florida will lose their current Medicaid coverage if their income just happens to fall between 150 and 185 percent of poverty. A North Carolina family of four, with a child suffering from juvenile diabetes, could see their drug coverage shrink, potentially limiting their access to vital medicines. Some 45,000 children could be cut from the Medicaid rolls in New Mexico because of the proposed cuts to deal with the $47 million shortfall. Some 50,000 children, pregnant women, disabled, and elderly could lose their Medicaid coverage in Oklahoma because of the $21 million shortfall. It may be expressed in dollars, but it is really being expressed in real people's lives: real suffering, real sacrifice, and real pain. We have a chance to do something about that. This can be an expression of our values as a society and our concern about our fellow human beings. These are the neediest of the needy in our society, and this amendment will help them. I commend the Senator for bringing this matter to the attention of the Senate. I am very hopeful it will be accepted and that the point of order will be waived.

Mr. KENNEDY

Mr. KENNEDY. Madam President, to correct my colleague and friend, he mentioned $8,000 or $9,000. That falls within 135 percent of poverty. So under our program, they would not be paying any out-of-pocket expenditures.

Mr. KENNEDY. Madam President, first of all, I ask my good friend from Nevada to get current with regard to the Massachusetts plan. I will try and get current with regard to his if he gets current with regard to ours. Massachusetts residences not on Medicaid, 65 or older, are eligible. Every one is eligible. The annual out-of-pocket spending for deductible and copay is limited to $2,000 or 10 percent, whichever is less for individuals. It is a good deal different from what the Senator described. I am not here to offer this as an amendment. Some States do a little better than other States. Massachusetts is clearly a good deal better than what we are being offered with the amendment of Senator Hagel and Senator Ensign. Senator Hagel has pointed out the real problem is the issue of cost. Now we have cut to the bone. There are a lot of costly programs. Medicare is costly. Yet this country made the decision that for our elderly, who was going to try to offset the cost for frail elderly men and women who worked hard all during their lives? Would it be the individuals who will have an average income of $13,000, and two- thirds below $25,000, or are we going to recognize that as a nation we are going to provide help and assistance? We made the judgment and decision that we would do that as a country. We did the same on Social Security. Many believe we ought to do it on prescription drugs. My good friends do not believe so. What are we asking? There was a comment that some of the elderly are asking for something for nothing. Who are these people? They are parents, people who took care of everyone in this room. Asking for nothing? These are the people who fought in the wars. They are the frail elderly, asking for nothing, who have sacrificed for this country, sacrificed for their children, sacrifice, sacrifice, sacrifice. And they are accused in the Senate of trying to get away with something for nothing. Are you asking them to give up going to the movies once in a while? Or taking their grandchildren out to dinner once in a while? How much can you squeeze from someone with a $9,000 income? How much can you squeeze them? Defend the market system. Defend the market system. Defend the market system. Prescription drug companies are violating the market system by jiggling the patent system so that there cannot be competition. Why aren't we hearing something about the market system over there on the underlying amendment? No, we don't hear anything about that. We just hear something about the frail elderly trying to get something for nothing. What about States being able to use the power of all their people to try to get a better drug price? That is the market system. We don't hear anything about that. No, no, we don't hear about that. We just hear about these frail elderly, all these greedy elderly senior citizens who are trying to rip off the system. Come on. That is the heart of the Republican program. You just heard it out here. That is what this decision is about. It is priorities, whether you want to have a massive tax cut that is going to go to the wealthy, or do we as a country and society put the value of our senior citizens ahead of that. It is a value issue. And I believe it is a moral issue as well, as long as we can do something about it and help these senior citizens. That is what the issue is about. We just heard it. We just heard it. Somehow, we are against the market system when we are trying to stop the kind of violations of patents to let competition get in? We are in violation of the market system when we are trying to let States get better deals for their fellow citizens? We are against the market system? Senator, that is just wrong. I do not know how much more we can do in terms of our senior citizens; how much more we can squeeze them; how much more, when they are paying out that 15 percent, 18 percent, 20 percent of their income every single year, watching their total life savings go right on down. How much more can we squeeze them so we can give tax breaks for the wealthiest individuals, who have had the greatest profitability over the period of recent years? How much more can we squeeze these men and women who have built the country, suffered, and done such an extraordinary job? This country has been built by our parents and our grandparents. If it is a great country, and it is, it is because of them. They are the ones who are frail. They are the ones who need the help and assistance. And I reject the fact that we are trying to speak of them as individuals who are trying to rip off the system and get something for nothing. That is not what this debate is about, and it should not be. I yield 10 minutes to the Senator from New York.

Mr. KENNEDY. Beyond this, he mentioned his own program in his own State as support. We are representing all the people of all the States. Quite frankly, I do not intend to get into a debate about his program in Nevada, although there are people who have talked about that program. Some of our colleagues who are former insurance commissioners have talked about the history of that particular program. I do not happen to get into that program. Let me point out my program in the State of Massachusetts. The annual out-of-pocket spending limits for deductibles and copays are $2,000, or 10 percent of income, whichever is less, and everyone over 65 is eligible for it. This program is better than the Hagel-Ensign program. No one would benefit from that program in Massachusetts. I do not know which States or individuals would benefit and which would not benefit. We are concerned about all of our seniors. That is what we are trying to address. Even if one State does a little better and one State does worse, we are looking at the challenge which all of our seniors face. I must say that I think I could go to places in Nevada or places in Massachusetts or any State, to find hard working, decent people, who play by the rules and were guaranteed, through Medicare, that their health care would be secure. That is what we said in 1965. No ifs, ands, or buts; it will be guaranteed. But it is not guaranteed, and the principal reason it is not guaranteed is because we do not have prescription drug coverage. That is the reason. We want to try to deal with that. Thinking you are giving health security to people who have incomes of $9,000 who are going to still have to pay out the $1,500--and people with incomes of $18,000 who will have to pay $3,500--does not measure up. I know the Senator and I differ on that, but it just does not seem to measure up. We are not talking about a comparison of particular States. We should be trying to look at this generation and what happens to people who move from State to State. Speaking about the overutilization of health care, the people who overutilize it are the wealthy individuals. Most people who are working 40 hours a week and taking care of their children do not have time to sit in a doctor's office or the resources to pay a copay. I can give study after study that reflects that. The greatest overutilization of health care and prescription drugs is by wealthy individuals who can take all the time in a day to go to the doctor's office and who have unlimited resources to pay for the prescription drugs. Five dollars still makes a big difference to people in my State down in New Bedford, Fall River, and Holyoke. They have seen their water bills go up because of the pollution that has been done over a period of years, and this administration has backed out of making the polluters pay and is now shifting that onto the backs of those water users and water rate payers. They are seeing their fixed incomes dwindling gradually as they pay out and try to deal with those issues. They see the prescription drug costs going up and the Senator is not doing anything. The Senator is not talking about it. The Senator has not even talked about the escalation of costs. What is he going to do about that? When are we going to see from the other side an amendment that is going to bring prices down? Where is it? We are waiting for it. We have been on this bill for 5 days. We have not had a single amendment from that side to do something about the costs of prescription drugs--not one. We have not had any. We have had complaints and criticisms of efforts that have been made on this side of the aisle to do something about those prescription drugs. Now we are being asked to sign onto a program that will be presented to the people in my State, or the people that could not afford it, to show that we have done something for them. But this program is not as good as the one in my own State. We ought to be dealing with this program for all Americans. That is what a majority of the Senate voted on yesterday, and almost a majority voted for the Republican program. Not trying to take the small numbers of individuals who are paying every single year was universal across the board. I would ask the Senator, this is not a lifetime expenditure, is it? They are going to have to pay $1,500 this year, $1,500 next year, $1,500 the year after--$1,500, $1,500, $1,500 every single year, or $3,500, $3,500, $3,500. Does anybody believe people on fixed incomes at those levels can afford that kind of expenditure? They cannot. So I hope we keep our sights higher in terms of trying to meet the challenges and needs of our people. I reserve the remainder of my time.

Mr. KENNEDY. Madam President, I will yield myself such time as I might use. Madam President, yesterday we had a very important debate, and we also had the Members of the Senate voting on two important measures for the prescription drug program. I am a strong supporter of the proposal that was offered by the Senator from Florida, Mr. Graham, and Senator Miller from Georgia. That amendment achieved 52 votes in the Senate. A majority of the Members voted in favor of a program based upon the Medicare system, a program that closes the great loophole that is part of our Medicare system, which so many of our seniors are faced with every single day. We had a good debate on that measure. And we had a good debate on the Republican alternative, which I believe, as I expressed during the course of the debate, falls well short of meeting the needs of our seniors. The alternative plan is inadequate, full of loopholes, and fails to address the overarching issue of prescription drugs for our seniors. But, nonetheless, we had a good debate. There are those who supported that program. Obviously, their interpretation differed with my interpretation of the program, and they believed--and continue to believe strongly--that their program was the best way to achieve the objective of universal coverage of seniors in this country. We did not have a difference in terms of the underlying concept, we had a difference in terms of approach. I believed--and still believe--we would be unable to guarantee protections for our elderly under the Republican proposal. But that was the matter of the debate. The Senate spoke. And it spoke more favorably of the proposal offered by Senator Graham than the Republican proposal. Now we have an entirely different proposal before the Senate. I, quite frankly, believe--even though I was highly skeptical of what they call the tripartisan proposal--that this does not even measure up to the tripartisan proposal. What we are attempting to do in the Senate is to pass a program that will reach all of our seniors, and do it in a way that is going to be affordable for our seniors. That is one of the great features of the underlying proposal, which we all support on this side of the aisle. And it does include measures that have been accepted both in our HELP Committee, as well as on the floor of the Senate that deal with the issue of the cost of prescription drugs. We want to make prescription drugs affordable, we want to make them accessible, and we want to build on a system in which the seniors have confidence. That is why, quite frankly, we find that virtually all the seniors groups have supported the proposal of Senator Graham and Senator Miller. They all support that proposal. Virtually none of them support the tripartisan program. And virtually none of them support this particular proposal. It seems to me, as we stated yesterday, our seniors--who have fought in the wars, brought us out of the Depression, and built this Nation up to be the great country that it is--are entitled to more than crumbs in terms of the prescription drug program. They are living longer, thankfully, and families are blessed by the presence of their parents and grandparents. These days, a number of generations--three or four generations--can be alive at the same time. That is all very good. I cannot understand, for the life of me, why the Senate would be willing to accept the amendment which is being offered now, which is so inadequate that it does not even deserve to be called prescription drug coverage under Medicare. It is a step backwards, not forwards, in mending the broken promise of Medicare and providing senior citizens the health security they deserve. It provides no real cost containment for the explosive growth of prescription drugs. That is a major problem. We have had good debate on those measures, but this proposal has no cost containment. Its funding is so inadequate that it would pay about a dime on the dollar toward prescription drug costs of the elderly--a dime on the dollar. One of the things we want to avoid in the Senate is telling our seniors that we are doing something meaningful for them in terms of prescription drugs and then failing to meet that test. When you are down to a dime on the dollar for prescription drugs, I believe this amendment fails to live up to a prescription drug coverage for the elderly. It is a catastrophic-cost-only plan. We tried that once, and the elderly, themselves, rejected it. I was here in the Senate when we tried the catastrophic program for the elderly, and they, themselves, rejected it. We can come back to that discussion later on if we want to. Under this amendment, a poor senior citizen with an income of less than $9,000 a year would have to pay $1,500--17 percent of their income--before they got any help. A low-income senior with an income of only $18,000 a year would have to pay $3,500--20 percent of their meager income--before they got any help. A moderate-income senior citizen with an income of $35,000 would have to pay $5,500--16 percent of their income--before they got any help. This isn't insurance, and this isn't Medicare. If it were to become law, senior citizens would still be choosing between whether they are going to put food on the table or take the medicines they need to survive. If it were to become law, senior citizens would still face the prospect of having their lifetime savings swept away by the high cost of prescription drugs. If it were to become law, the broken promise of Medicare would remain broken. Beyond the simple fact that this benefit is inadequate, it violates a basic principle of Medicare, by effectively imposing a means test. Medicare is one of the most beloved and successful programs ever created. The reason it has such broad public support is that it is universal social insurance. Everyone contributes, and everyone benefits. Republicans have wanted to turn Medicare into a welfare program ever since it was created. This plan is, I believe, just another step in that direction. The American people rejected that approach in 1965, and I think they still reject it today. This bill is more inadequate than the House Republican bill. It is more inadequate than either of the two bills just voted on by the Senate. It is not supported by a single organization of the elderly or the disabled. And it does not deserve the support of the Senate. If we are going to take steps to try to respond to the needs of the elderly, it seems to me we ought to be able to gain the support of those groups. We have to ask ourselves, each time we consider legislation, who benefits? Obviously, we also have to ask, who pays? The taxpayer. Who benefits from this program, and how do they react to this program? The elderly, and they are not in support of the program. The fight for a real Medicare prescription drug benefit did not end yesterday. We will continue to fight until senior citizens have the protections they deserve. A vote for this bill is a vote to substitute a political fig leaf, a very small fig leaf, for the real protection the elderly need. I withhold the remainder of my time.

Mr. KENNEDY. I suggest the absence of a quorum.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I yield back the remainder of my time. I believe all time has been yielded back. Mr. President, I make a point of order that the pending amendment violates section 302(f) of the Congressional Budget Act of 1974.

Mr. KENNEDY. Mr. President, the AARP opposes this amendment. Every senior citizen group opposes this amendment for the reasons in this letter. I ask unanimous consent that the letter be printed in the Record.

Mr. KENNEDY. I imagine the Senator from Nevada would want recognition to make a statement in favor of his amendment. Madam President, I will yield myself 2\1/2\ minutes and ask to be notified of the last 15 seconds.

Mr. KENNEDY. Madam President, as I understand it, we are on the Hagel amendment and we have 5 minutes evenly divided. Is that correct?

Mr. KENNEDY. Madam President, yesterday we voted in the Senate on whether we were going to deal with a comprehensive prescription drug program for our senior citizens--the 13 million who have none, the 10 million who have employer-based systems and are losing it, and the 4 million who have HMO coverage but have caps of $500 and $750. We debated that. I strongly supported the Graham-Miller proposal because it is built upon the Medicare model, a tried and tested program. It was comprehensive, affordable, and it would have met the needs of our senior citizens. I differed with our Republican friends on this particular proposal, but they believe they would achieve the same goal. That isn't what the Hagel proposal is all about. It will only amount to 10 or 12 cents out of every health care dollar. I think our seniors are entitled to better. They are the men and women who fought in the world wars, brought this country out of depression, and now are frail and elderly. The question is, Are we prepared to do for them what we did for them in hospital care and physician services? They need the prescription drugs. I believe we can still find common ground. I would like to find common ground. It is the position of our Democratic leader to try to find common ground in terms of a comprehensive program. This is a drop in the bucket. This is smaller than a fig leaf to cover the needs of our senior citizens. Let us in the Senate of the United States perform nobly and protect our senior citizens: let's pass a comprehensive program. The Hagel proposal does not do that. We need to do that or we fail our senior citizens.