Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, among the things pointed out in this editorial, they say: We've long argued that the economically optimal and fairest death tax rate is zero. The tax is applied to income that was already taxed when it was earned, so it is a double tax on savings and capital. The correct way to tax a gain in the value of assets bequeathed to an heir is with a capital gains tax of 15 percent when the assets are sold, rather than at the time of the funeral of the original owner. I think that says it all. I hope the problem my friends are so concerned about--first of all, they recognize a problem they themselves manufactured by not getting around to doing anything about this until the eleventh hour. Second, it is a problem that does not have to exist if they will leave the existing law alone and let the rate go to zero, which is what everybody wants it to be. Sure enough, if your heirs sell property after that, they will have to pay capital gains. Ask them what they would rather do--pay a 15- percent rate or a 45-percent rate. I think the answer to that is pretty clear. Exhibit 1 [From the Wall Street Journal, Dec. 11, 2009] The Tax That Won't Die Well, the moment of truth has arrived, and House Democrats recently voted 234-199 to cancel the 2010 repeal and hold the rate permanently at 45% with a $3.5 million exemption. Senate Majority Leader Harry Reid now wants to do the same. But to suspend the Senate's health-care debate and turn to the estate tax, he needs 60 votes. All Republicans and some Democrats are saying no. Blanche Lincoln of Arkansas and Jon Kyl of Arizona will accept no more than a 35% permanent rate with a $5 million exemption. We've long argued that the economically optimal and fairest death tax rate is zero. The tax is applied to income that was already taxed when it was earned, so it is a double tax on savings and capital. The correct way to tax a gain in the value of assets bequeathed to an heir is with a capital gains tax of 15% when the assets are sold, rather than at the time of the funeral of the original owner. Study after study, including one co-authored years ago by White House economist Larry Summers, finds that a powerful motivation for entrepreneurs to grow their businesses is to pass that legacy to their children. The left disparages this as building ``family dynasties,'' but most Americans think that it is immoral for the government to confiscate the fruits of a life's effort merely because of the fact of death. Democrats also say their rate would apply only to the richest 2% of estates. But a new study by economists Antony Davies and Pavel Yakovel of Duquesne University finds that the estate tax ``impacts small firms disproportionately versus large firms'' by encouraging well-capitalized companies to gobble up smaller ones at the owner's death. The study shows the result is to ``promote the concentration of wealth by preventing small businesses from being passed on to heirs.'' Republicans and willing Democrats shouldn't give up on eliminating the death tax. The Kyl-Lincoln amendment to create a permanent 35% rate is far better than the confiscatory House bill. But the best strategic outcome now is to let the death tax expire in January as scheduled under current law, and return to this debate next year when the tax rate is zero. Then let liberal Democrats explain to voters on the eve of elections that they must restore one of the most despised of all taxes.

Mr. KYL. The following Senator is necessarily absent: the Senator from Oklahoma (Mr. Inhofe).

Mr. KYL

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

Mr. KYL. Mr. President, I want to speak in favor of the Crapo motion, which we will be voting on in a few hours. The Crapo motion would essentially protect the American middle class from tax increases in this bill. The President promised that nobody making under $200,000 a year, or families making under $250,000 a year, would see tax increases under the bill. But they do. The Crapo motion would simply send the bill back to the Finance Committee and make sure that they don't. It is a fairly straightforward amendment, and we should support it. In supporting the motion, I will discuss other things related to it. There is this notion that somehow or other the health care bill will save money for the government and for taxpayers and patients. That is where it is wrong. That is why we need things such as the Crapo motion. How does the expenditure of trillions of dollars in new spending save anybody money? That is counterintuitive. The answer is, of course, that it doesn't. Jeffrey Flier, dean of the Harvard Medical School, gives this bill a failing grade. He wrote in the Wall Street Journal: The Democrats' health care bill wouldn't control the growth of costs or raise the quality of care. I think that is the fact. So let me point out a couple of the bill's provisions that undermine this savings argument, one of which is the new taxes, which the Crapo motion would explicitly address, The new subsidies that fail to address costs, and finally this inclusion of the CLASS Act, which is a massive new expenditure and entitlement that would grow out of control over time. First, though, let me focus on these new taxes, 12 in total. They go into effect immediately. In fact, the Internal Revenue Service estimates it would need between $5 billion and $10 billion over the next 10 years just to oversee the collection of these new taxes. Think about that. These new taxes include, but are not limited to, a new payroll tax on small businesses. What better way to kill job creation. We will impose another \1/2\ percent tax if you hire somebody or all the people you retain on the payroll. That is crazy at a time when we are trying to create new jobs. There is a tax on seniors and the chronically ill. I discussed that yesterday. There are new limits on health savings accounts which will increase taxable income for middle-class families, and a new medical device tax which will be paid for by American families, according to the Congressional Budget Office. In other words, if you need a health or lifesaving device, such as a diabetes pump or stent for your heart, why do you want to tax that if it provides better health care for you and your family? The reason is they need more revenue to pay for the expenses of the bill. They increase the taxes. CBO says they will be passed right through to the patients which are then passed through in the form of higher premium costs. As I said, most of these taxes would start immediately and many would hit middle-income families despite the President's famous campaign pledge. Washington, for a period of 4 years, piles up the money before it pays any of the money out. That is supposed to lower costs because for the first 4 years there are not any expenses. We are collecting all this revenue and somehow or another that is portrayed as a savings for the Federal Government. Over the next 10 years that money is spent out, it is $2.5 trillion in spending, and that is not sustainable. This is part of the bill's gimmickry to create this idea that somehow the bill is deficit neutral. As I said, when you take a look at the true 10-year cost beginning in 2014 once the bill is fully implemented, you have a whopping $2.5 trillion pricetag. Colleagues on the other side say: It is necessary to raise all this money to subsidize the increased cost of health care. I get it. We are going to raise premiums under the bill and then we are going to need to raise taxes to subsidize so people can afford those increased premiums. What sense does that make? I ask, do Americans want to pay more taxes in order to get a subsidy because of the increase in costs that are the result of this legislation? Would they rather not have the premiums go up in the first place, as the ideas that Republicans have proposed would ensure? But that is what the bill does. It raises premiums so then you have to raise taxes to subsidize the cost of insurance. What the Crapo motion would do is to say the President needs to keep his promise. Those making less than $200,000 a year should be relieved of this tax burden. Secondly, if the government subsidizes insurance for 30 million more Americans, obviously costs have to rise. As the respected columnist Robert Samuelson wrote in a recent Washington Post column--by the way, the title was ``The Savings Mirage on Health Care'': The logic is simple. . . . Greater demand will press on limited supply; prices will increase. The best policy: Control spending first, then expand coverage. That is what Republicans have been proposing. We would like to target specific solutions to the problems of cost which would then allow more Americans to gain access to affordable health care and, thus, avoid a hugely expensive Washington takeover of the entire system. Our solution includes medical liability reform--that does not cost anything; it saves money--allowing Americans to purchase insurance policies across State lines, allowing small businesses to pool their risks and purchase insurance at the same rates corporations do. These solutions would bring down costs and, at the same time, enhance accessibility. Third--and the reason I raise this is because several colleagues on the other side of the aisle have made pretty firm statements about not being able to support this legislation as long as it included what is called the CLASS Act. This is a new government-run, government-funded program for long-term care. It is intended to compete with private insurers' long-term care plans. Notice the pattern of government wanting to compete with private entities. That is what the CLASS Act does. Participants would pay into this new government system for 5 years before they would be allowed to collect any benefits. Naturally, you have some increased revenues for a while, and that is what the bill counts on in order to allegedly be in balance. Of course, the payouts occur later, and then it is not in balance. Participants would have to be active workers. So this new entitlement would not benefit either seniors or the disabled. We are talking about a brandnew entitlement. If a worker begins making payments in 2011, he or she could not collect benefits until the year 2016. That is why supporters of the CLASS Act say this would reduce the deficits in between 2010 and 2019. Sure, if you don't spend money in those years and you collect a lot of tax revenues, of course you are going to have more of a surplus of revenues. What happens, though, when the claims on that money occur? It is like Medicare today: It is very soon out of money and then broke and then in a hole and then you have a big debt on your hands. That is precisely what happens here. No government program has ever reduced budget deficits, we know that. The Congressional Budget Office confirms that this program will, indeed, add--add--to future budget deficits. Here is what the CBO writes: The program would add to future federal budget deficits in large and growing fashion. It does not get any simpler than that. The CLASS Act would add to future deficits. That is why several of my colleagues on the other side of the aisle have said they cannot support the bill as long as the CLASS Act is in it. But the last time I checked, it is still in it. I want to also refer to the chairman of the Budget Committee who has obviously spoken out on this issue because he understands the effect. I speak of Senator Conrad. He said it is like a Ponzi scheme because it offers returns that payments made into the system cannot cover in the long run. As I said, it would generate generous surpluses for the government while Americans pay in and are not collecting benefits. And then later on, it reaches a point where payments made into the program cannot sustain the promised benefits. Here is what CBO tells us about the program: It would lead to net outlays when benefits exceed premiums. . . . ``Net outlays'' means you are spending more than you are taking in. [By 2030] the net increase in federal outlays is estimated to be ``on the order of tens of billions of dollars for each [succeeding] ten-year period.'' Over time, this program adds substantially to the deficit and to the debt. It is an entitlement that is not self-sustaining but has to be propped up in some fashion by additional revenues. It is another way, in addition to the first two ways I mentioned, of how costs go up in this legislation, how savings do not result, and how the American public has to end up making up the difference. You have new taxes to cover subsidies for increased premiums, government subsidies for 30 million Americans that increased demand without addressing costs, and finally, the inclusion of the CLASS Act. As I said, I support the Crapo motion because it would assure that none of these burdensome new taxes would hit middle-income families as they are set to do. This amendment must pass if President Obama is going to keep his campaign pledge to not raise taxes ``one dime'' on middle-income Americans. I also support the soon-to-be-pending Hutchison-Thune motion which says that no taxes at all should be levied until Americans see some benefits. This addresses that problem I noted where you collect the taxes up front and then you start paying benefits at a later date. This is an expression of disapproval for the budget gimmickry contained in the bill. Americans want us to bring costs down. They could not be more clear about that. But the provisions of this bill disobey the wishes of the American people. That is why in public opinion surveys--it does not matter who takes them--they are increasingly showing that the American people are opposed to this legislation. The latest one by CNN just a few days ago--and CNN is not noted to be a big conservative organization--shows that 61 percent of the American public oppose the health care plan. And now only 36 percent support it. That is getting close to two to one in opposition. An earlier poll showed that among Independent voters, by more than three to one, they oppose what is in this legislation. The point here is not some peripheral issue--and I do not mean to demean the importance of the issue when I talk about, for example, the public option for the government-run insurance plan. The abortion language certainly is a key issue to many. Even if you could somehow fix those problems, you still have the core of the bill that the American people object to: the $\1/2\ trillion in cuts in Medicare, the $\1/2\ trillion in increases in taxes that are meant to be addressed by the motion I am speaking of, the requirement that because premiums go up under the legislation, you have to raise taxes to create a subsidy so you can give it to people so they can afford the increased premiums. Something we are going to be talking about in the future and have hardly addressed but to me is probably the most pernicious thing of all--you can talk about the government takeover, you can talk about the additions to the debt, the taxes, the increased premiums, all of these things, the cuts in Medicare--to me the most pernicious thing of all is the fact that it is unsustainable. The promises exceed the revenues with the net result that over time, care will have to be rationed. This is what I think the American people fear most of all because they know you cannot sustain a program this costly and not have to at some point begin to delay care, delay appointments so they do not occur as rapidly and gradually begin to denying care. That is why this big kerfuffle about the commission that made recommendations on breast cancer screening and mammograms was so frightening to people. They could see this was the way rationing begins. Some panel says we don't think people need as much medical care as they have been getting, never mind what has been recommended in the past. Yes, by the way, it will save money. Of course, when politicians have to find a way to reduce benefits, they do not go to their constituents and say: We are going to cut your benefits. What they do is reduce the payments to people who provide the health care-- the doctors, hospitals, home health care, hospice care, these folks. They reduce payments so that the providers have no choice but to reduce the amount of their care. They have to see more patients, there are not as many of them, and they are getting paid less. So naturally they cannot provide the same level and quality of care. That is how rationing begins. Ask people in Canada, ask people in Great Britain how long it takes to get in to see the doctor. Eventually even that does not cut it. So they set a budget and say: We cannot afford to pay any more than that. You better hope you get sick early in the year. That is, unfortunately, what you can see to an extent in our veterans care but even more in our care for our Native Americans. I did not make this up. Others have said in the Indian Health Care Service, get sick early in the year because they run out of money if you get sick late in the year. Our first obligation ought to be to ensure our Native American population receives the care we have promised them. I personally have gone throughout Indian reservations in Arizona. We have more than any other State. I made a tour of the Navajo reservations, including a lot of the health care clinics and facilities that try to take care of folks under the Indian Health Service. None has enough money to do what they are supposed to. They are understaffed. The people who are there are wonderful, dedicated health care providers. They are doing their best. But you ask any of the Native Americans whether they believe they are getting the care they are supposed to get under the program, and the answer is uniformly no. They have to wait forever. The care is not there when they need it. This is the perfect example of rationing of care, what happens when you have a government-run system. That is what I fear most of all will result from this because we have taken on much more than we can afford. The end result of that inevitably is the reduction in the amount of care that is provided and the quality of care that is provided. I urge my colleagues to think very carefully about what we are getting our constituents into. We can start to turn this back by supporting the Crapo motion which at least says that folks who are middle-class families, who the President promised would not see a tax increase, will not see a tax increase under the legislation. That is what the Crapo motion would provide, and I certainly hope my colleagues support it.

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from Indiana (Mr. Lugar).

Mr. KYL

Mr. KYL. Mr. President, if there are no other Senators seeking recognition at this time, I ask that the Senate stand in recess under the previous order. Thereupon, the Senate, at 12:45 p.m., recessed until 3:16 p.m. and reassembled when called to order by the Presiding Officer (Mr. Crapo).

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that Senator Nelson from Florida be allowed to speak for 10 minutes; after that, that I be allowed to speak for 10 minutes; after that, that Senator Murkowski speak for 10 minutes; and after that, Senator Dodd. Following that-- Senator Murkowski for 20 minutes, I am sorry; and after that, Senator Dodd.

Mr. KYL. Mr. President, let me talk for a moment about one aspect of the health care legislation that has been of great concern to our Nation's Governors. The Presiding Officer can certainly appreciate the problem since, among other Governors and former Governors, the Presiding Officer had the responsibility of balancing a State budget with one of the largest obligations, being the payment for the Medicaid patients. My Governor, Jan Brewer, of Arizona, was in town last week. She talked to me about the problem. She sent me a letter which, in a moment, I will ask to be printed in the Record. But as a result of that conversation, I wish to point out some things to my colleagues and hope we can revisit the legislation that is on the floor. Incidentally, before we do that, let me note the fact that my colleague from Florida referred a moment ago to a filibuster. I wish to be clear. I presume he was not referring to Republicans filibustering the bill, since we have been asking to have votes on the pending amendment, which is the Crapo amendment, since 6 days ago when that amendment was posited. As a matter of fact, the Republican leader on Sunday finally had to file cloture on the Crapo amendment, which will ripen tomorrow morning, to end the filibuster the majority has been conducting. I understand members of the majority have not been able to decide how to proceed. But in the meantime, we have not been able to vote on any pending amendments. Republicans would like to do that, would like to get some more amendments up and continue on with our debate on the bill. For a bill this important, we should have been able to dispose of a lot more amendments than we have. So lest anybody believe there is a Republican filibuster going on, I hasten to add that, of course, is not true. Let me talk about the Medicaid features of this bill. It is against the backdrop of unemployment because, as you get more people on unemployment, you are going to have more people on the Medicaid rolls. Arizona's unemployment rate has risen 6 points just since June of 2007 and more and more of our people are, therefore, eligible for our Medicaid Program, which is known in Arizona as the AHCCCS Program. Currently, one in five Arizonans is covered through AHCCCS; over 200,000 Arizonans have enrolled in AHCCCS since December 31. That is nearly 20,000 new enrollees every month. So we are talking about a substantial burden as a result of the recession we are in on our State government. As my State and many others have had to deal with the challenges of the recession, declining State revenues, increasing need for certain State services, the last thing Washington should do is make things even harder for the States. Yet that is exactly what the Reid bill would do. The Reid bill would require States to expand Medicaid eligibility to all children, parents, and childless adults up to 133 percent of Federal poverty, beginning January 1, 2014, and there is even talk now of raising that to 150 percent of poverty. Moreover, the Federal government would only foot the bill for 3 years. In 2017, and in subsequent years, the States would have to help finance this expansion. The Congressional Budget Office estimates that $25 billion in new State spending would result in the Reid bill. The Arizona Governor's office estimates this bill would require the State of Arizona to increase its costs by almost $4 billion, between now and 2020. The State of Arizona does not have that kind of money. Just the so-called woodwork effect alone, meaning the number of currently eligible individuals who might enroll, would itself entail significant costs. There are about 200,000 Arizonans currently eligible but not all are enrolled in Medicaid. If only half those individuals would enroll, it would cost the State $2 billion, from 2014 to 2019. As I said, our State simply doesn't have the money to do that. Our Arizona Governor wrote to Chairman Baucus stating her strong opposition to the Medicaid expansion. I ask unanimous consent that her letter, dated October 6, to Chairman Baucus be printed in the Record at the conclusion of my remarks.

Mr. KYL. Let me read a few key excerpts. First: Arizona cannot afford our current Medicaid program, despite the fact that we have one of the lowest per member per year costs in the country. Arizona's General Fund spending on our Medicaid agency has increased by 230 percent over the past ten years, rising from 8 percent of total General Fund spending in fiscal year 1998-1999 to 16 percent ten years later. As part of the solutions for our current year's budget shortfall, we have had to reduce Medicaid provider reimbursement by over $300 million and freeze institutional reimbursement rates, resulting in an additional loss of more than $60 million. Despite these reductions, we are sacrificing other state programs that impact the education, health and safety of our children and our seniors in order to cover the growing costs of Medicaid. Considering this, it is incomprehensible that Congress is contemplating an enormous unfunded entitlement mandate on the states. The disconnect between policymakers in Washington and the reality of State and local governments is disheartening. Let me quote from some other colleagues of Governor Brewer's, Democratic and Republican Governors around the country who have made exactly the same point. The newly elected chairman of the Democratic Governors Association chairman is Jack Markell of Delaware. He said: We've got concerns . . . And we're doing our best to communicate them. We understand the need to get something done, and we're supportive of getting something done. But we want to make sure it is done in a way that state budgets are not negatively impacted. . . . But I believe all governors are certainly concerned about what the potential impact is of some of these bills. Governor Rendell of Pennsylvania, who has been on television a lot and makes a lot of sense when he talks about this: I don't think it's an accounting trick. I think it's an unfunded mandate. We just don't have the wherewithal to absorb that without some new revenue source. Bill Richardson of New Mexico: We can't afford that, and that's not acceptable. Gov. Phil Bredesen of Tennessee said he feared Congress was about to bestow ``the mother of all underfunded mandates.'' He was referring to this Medicaid mandate. Gov. Christine Gregoire of Washington State: As a governor, my concern is that if we try to cost-shift to the states, we're not going be in a position to pick up the tab. Bill Ritter, Democrat of Colorado: Our only point was that a significant Medicaid expansion should not operate as an unfunded mandate for the states. Gov. Brian Schweitzer, Democrat of Montana: The governors are concerned about unfunded mandates, another situation where the federal government says you must do X and you must pay for it. Let me quote two more. Gov. Ted Strickland of Ohio: The states, with our financial challenges right now, are not in a position to accept additional Medicaid responsibilities. Governor Perdue of North Carolina: The absolute deal breaker for me a governor is a federal plan that shifts costs to the States. There are more and more I could quote. The point is, virtually all of the Nation's Governors have expressed a concern about this and have alluded in one way or another to the disconnect between Washington and the States. The point is, Washington seems to bark the orders but it is with no regard to the difficult financial challenge many of these States are in. One final point. These new unfunded mandates generally mean higher taxes and significant payment cuts to safety net providers, just as Governor Brewer said, and ultimately the loss of jobs. This is the example I want to close with. Phoenix Children's Hospital was built to handle 20,000 emergency cases a year. It is a great hospital. It receives about 60,000 per year. Its capacity does not begin to match the need. To meet the demand--and by the way, more than half of these are Medicaid patients--the hospital built a new tower expected to open at the end of next year. Good news, right? Not exactly. The hospital has added up the State budget cuts Governor Brewer referred to, the payment cuts in the Reid bill I have referred to, and additional State cuts that will be needed to finance new Federal mandates, and concluded that the math doesn't add up. As a result, the Phoenix Children's Hospital informs me they will not be able to move into their new building. It would have generated 2,000 new jobs. What we do in Washington has real consequences. I submit the Reid bill spells disaster for States. As we debate more and more features of this bill, each day we focus on something different in this legislation that creates a huge problem. Today's focus is on the problem that is focused on States because of the visit from our Governor. She is at her wit's end because they don't have the fiscal means of paying for this new unfunded mandate. She doesn't know what they will do if Congress ends up passing this. I urge colleagues, we have to find a way to not expand the Medicaid eligibility in a way that adds this new mandate on our States. Incidentally, if the Federal Government were to pick it all up, it simply transfers it to the citizens in the form of higher taxes they would have to pay in order to pay for the mandate that is laid off on to the States themselves. One way or another, this element of the bill has to be rethought. I encourage my colleagues on the other side, figure out what you need to do to reach a vote so that we can actually vote on these amendments. Republicans are ready. We have been ready for a long time now. Whatever it is that is causing a problem within your conference, figure it out so you can reach agreement with the Republican leader and we can begin to take votes starting on the Crapo motion and then move on through other amendments we have, one of which is the amendment by Senators Hutchison and Thune, then an amendment by Senator Snowe, and then an amendment I hope we will be able to offer at some time to remove this unfunded mandate which the States cannot afford to pay for about which I have been talking. I yield the floor. Exhibit 1 Executive Office, State of Arizona, Phoenix, AZ, Oct. 6, 2009. Hon. Max Baucus, U.S. Senate, Chairman, Senate Finance Committee, Hart Senate Office Building, Washington, DC. Dear Chairman Baucus: I have been following the debate on federal healthcare reform with interest, and I have been working closely with members of Arizona's Congressional delegation to make sure they are well informed about the impact of the various proposals on our state. I am concerned that the proposals under consideration thus far do not consider the fiscal difficulties states are facing and are likely to continue to face over the next few years. Like many, I was particularly focused on the proposal that would emerge from the Senate Finance Committee, and I hoped that your plan would appropriately address state concerns. Given the continued lack of attention to state issues in the Chairman's Mark, I believe it is critical to provide you with my perspective on the state of my state, and how your proposal will impact Arizona. By way of background, Arizona is wrestling with one of the most challenging economic downturns in state history. Arizona's economy is heavily focused on construction, real estate and the service sector, all of which have experienced declines that have combined to create a severe and lasting recession. While experts are expressing reserved optimism that the national economy may be turning the corner, it is likely that states--including Arizona--will not feel that turnaround for some time to come For example, the revenue collections during the most recent fiscal year for Arizona declined by 18 percent. Through the first quarter of the latest fiscal period, revenues from our three major tax sources have decreased an additional 10 percent. Our budget declines are contrasted with our rising Medicaid enrollment, which has grown by 18 percent over the past 12 months. At this time, one in five Arizonans is covered through the Medicaid program and we expect Medicaid enrollment to remain at elevated and unsustainable levels through the near future. Arizona cannot afford our current Medicaid program, despite the fact that we have one of the lowest per member per year costs in the country. Arizona's General Fund spending on our Medicaid agency has increased by 230 percent over the past ten years, rising from 8 percent of total General Fund spending in fiscal year 1998-1999 to 16 percent ten years later. As part of the solutions for our current year's budget shortfall, we have had to reduce Medicaid provider reimbursement by over $300 million and freeze institutional reimbursement rates, resulting in an additional loss of more than $60 million. However, budgetary savings cannot be achieved solely through provider reductions. Arizona also recently made the difficult decision to eliminate coverage for 9,500 parents of children enrolled in our Children's Health Insurance Program. Looking forward to fiscal year 2010-2011, we know that further reductions will be necessary. Despite these reductions, we are sacrificing other state programs that impact the education, health and safety of our children and our seniors in order to cover the growing costs of Medicaid. Considering this, it is incomprehensible that Congress is contemplating an enormous unfunded entitlement mandate on the states. The disconnect between policymakers in Washington and the reality of state and local governments is disheartening. These are realities that many states across the country are facing. Arizona's situation, however, is compounded by the fact that we have already expanded our Medicaid program to all residents with incomes under 100 percent of the federal poverty level (FPL). This decision means that, under your proposal, our state will be unable to take advantage of the higher level of federal funding that will be provided to states that have not enacted similar expansions. In essence, the Chairman's Mark penalizes Arizona for its early coverage of non-traditional Medicaid populations, like childless adults. I must also point out my concern that estimates developed at the federal level do not accurately reflect the costs that states will ultimately bear. While I have great respect for the Congressional Budget Office (CBO), in this instance, its estimates are substantially below Arizona's fiscal estimates and I believe they understate the cost of expansion. For instance, the CBO analysis estimates the State cost of the Medicaid expansion and ``woodwork'' to be $454 million. Arizona has an estimated 200,000 citizens below 100 percent of the FPL that are currently eligible for Medicaid, but not enrolled. If only half of those individuals enrolled, the cost of this ``woodwork'' effect alone would be over $2.0 billion for FY 2014 through FY 2019, using the traditional Medicaid match. That is a significant difference for just one small state. I want to reiterate my opposition to these unfunded mandates on states. I implore you to bear in mind the fiscal realities states are facing as we attempt to maintain responsible balanced budgets while preserving services for our most vulnerable residents. I hope you find this information useful as you consider the various proposals before you, and please do not hesitate to contact my office should you require additional information. Sincerely, Janice K. Brewer, Governor.

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Missouri (Mr. Bond), the Senator from Kentucky (Mr. Bunning), the Senator from Oklahoma (Mr. Coburn), the Senator from Oklahoma (Mr. Inhofe), and the Senator from Ohio (Mr. Voinovich). Further, if present and voting, the Senator from Kentucky (Mr. Bunning) would have voted ``nay.'' The PRESIDING OFFICE. Are there any other Senators in the Chamber desiring to vote?

Mr. KYL

Mr. KYL. Mr. President, given the season, maybe we should spend a little time talking about what Americans are wishing for Christmas. I don't think very many people in the Chamber have had much chance to go do their Christmas shopping. At least maybe we can consider what folks are telling us they would like to have. We have certainly heard it. They want jobs. They want the economy to improve. They want meaningful health care reform that will drive down costs and increase their access and avoid harming a full economic recovery. What they don't want is to be burdened with a litany of new taxes. Unfortunately, the health care bill we have been debating is layered with new tax after new tax. What I hope is that the majority will eventually agree to considering more amendments, including, for example, amendments such as the Hutchison-Thune amendment which will limit the taxes in this bill, taxes that will hit families, seniors, the chronically ill, small businesses, those who use flexible spending accounts, and those, for example, who use medical devices. In total, there are 12 new taxes in this bill, many of which will take effect right after the bill passes, though the other components will not go into effect until 2014. The Internal Revenue Service estimates it would need between $5 and $10 billion over the next 10 years to oversee collection of these new taxes. Americans know their taxes are going up if this bill passes. In fact, 85 percent believe that will happen, according to a new CNN poll. They are right. Surely that helps to account for the fact that a full 61 percent disapprove of the bill, according to that same poll, with just 36 percent supporting it. Think of that, a CNN poll, brand new, 61 percent of the American people oppose the bill, only 36 percent support it. Every week, the numbers get worse. I spoke recently about the adverse impact of a new payroll tax on job creation, especially for small businesses. Today, I want to talk about how three additional taxes would hurt Americans: one, the new tax on the chronically ill; two, a new tax on flexible spending accounts; three, a new tax on medical devices. First, let's talk about the chronically ill. These are the sickest Americans, the chronically ill and seniors who tend to have more medical problems. These folks would be hurt by a change in the Tax Code that actually raises the amount of money they owe the Federal Government every year. Here is how it works. Currently, taxpayers can deduct the costs of their catastrophic medical expenses if those expenses exceed 7.5 percent of their income. The bill would raise that threshold to 10 percent. So people, especially seniors and the chronically ill, would have to spend a lot more of their own money on these kinds of expenses before they could begin to take advantage of a tax deduction. The Joint Committee on Taxation says this change would cost taxpayers more than $15 billion over the next 10 years. We are talking about a lot of money. It would raise taxes on 5.8 million taxpayers, 87 percent of whom earn under $100,000 a year. So we are not talking about, for the most part, the wealthy. In fact, because of this problem, the Nelson amendment was adopted in the Finance Committee that would at least exempt seniors until the year 2016. Obviously, it isn't only seniors who pay the tax. Secondly, we don't want to impose it on them after 2016 either. According to the CRS: The deduction can ease the financial burden imposed by costly medical expenses. For the most part, the federal tax code regards these expenses as involuntary expenses that reduce a taxpayer's ability to pay taxes by absorbing a substantial part of income. That is certainly true. Many people rely on this deduction to offset expenses beyond their control. Under the Democratic bill, 5.8 million of the sickest Americans would get a bigger tax bill from Uncle Sam. That is not reform. The second new tax is on flexible spending accounts. Many Americans with these flexible spending accounts would see a tax increase under the bill. How does that work? Under current law, employees can make a tax-free contribution to a flexible spending account in order to pay out-of-pocket expenses for medically necessary goods and services, things such as diabetes testing supplies, orthodontia bills for braces and tooth repair, to name a few. Right now, there is no limit on these contributions to the FSA. Most employers who offer the FSA peg it at about $5,000. The bill would cut that in half and limit by law the amount the employers could contribute to $2,500. Why? That means families would pay taxes on medical expenses in excess of that amount. That is the reason. They need more revenue under the bill. This is a very clever backdoor way to get it, limit the amount the employer can contribute to your FSA, so you end up having to pay more taxes on things that are important to your health care and that of your family. The Joint Committee on Taxation estimates this provision would cost taxpayers $15 billion over 10 years or, to put it another way, it is one of the ways they raise revenues in the bill to pay for the high cost of the legislation, another $15 billion. Who would be affected by this increase? The Employers Council on Flexible Compensation estimates that the median income for the 35 million Americans holding FSAs is $55,000. That is the median income-- half are above, half are below. Think about that. Half the people who would be impacted by this make less than $55,000 a year. Many middle- income families will lose money on medical expenses because of this provision. Finally, the medical device tax. The Democratic bill imposes an annual nondeductible tax on medical device makers that would cost $20 billion over 10 years. The reason for this, again, is to generate revenues to pay for the high cost of the bill; otherwise, why would you tax something that can be a lifesaver for people? I have said before that I could see, I suppose, taxing liquor or tobacco, but why would you tax this? This helps save lives. Thousands of products-- wheelchairs, surgical equipment, contact lenses, stethoscopes, hospital beds, artificial heart valves, diabetes testing equipment--all of these are the kinds of medical devices targeted by this tax. It will even hit cutting-edge technologies such as CT scanners. Why would we do this? American taxpayers are the ones who will foot the bill for the tax because, according to the CBO, the medical device tax ``would increase costs for the affected firms which would be passed on to purchasers and would ultimately raise insurance premiums by a corresponding amount.'' Congress taxes a device manufacturer. They pass the tax on to the cost of the item that takes care of the individual. And since the insurance companies usually have to pay for that, their premiums go up to reflect the increased costs--another reason why, under this bill, insurance premiums don't go down, they go up. This tax means increased costs for health insurers, which in turn pass it on to patients in the form of higher premiums. This would go into effect immediately, even though subsidies for government-mandated insurance are not available until 2014. The net impact would be an $8 billion increase in patient premiums in 2010, 2011, 2012, and 2013, before any of the subsidies in the bill take effect. Is this really what we want--to drive up patient premiums with new taxes? We know those are not the kinds of reforms Americans are asking for. To reiterate, the taxes I have discussed include a tax increase on the chronically ill and seniors, a tax increase on holders of flexible spending accounts, mainly middle-income families, and a tax on medical devices that would drive up insurance premiums. Many of the 12 total taxes would take effect immediately even though the rest of the bill wouldn't take effect until the year 2014. That is part of the budget gimmickry used to pay for this Federal leviathan. Your taxes go up in 2010 but nothing to show for it until 2014. That is why the Democrats claim to have a budget-neutral bill that comes in at less than $1 trillion. Washington will be sitting on a pile of money 4 years in advance of full implementation of the bill. But when you take a look at the true 10-year cost beginning in 2014, the price tag is an astounding $2.5 trillion, a figure confirmed by the chairman of the Finance Committee. Because I disapprove of these budget gimmicks and the imposition of these taxes, I support the Hutchison-Thune amendment, an amendment which says that new taxes will not be enacted until the rest of the bill is. I urge my Democratic colleagues not to object to voting on the pending amendments and to take up additional amendments such as the Snowe amendment, which will come later, and the Hutchison-Thune amendment, which would at least address the problems I have discussed. The American people don't want a slew of new taxes for Christmas.

Mr. KYL

Mr. KYL. Mr. President, I want to speak for a moment about the vote we are about to take here to proceed with the so-called Omnibus Appropriations Act, H.R. 3288. This is the bill which for those who have not been following closely cleans up a little bit of a mess that the Congress has created because we did not do our work earlier in the year. We are supposed to pass appropriations bills to run the government, to run the various Departments, and we did not get around to doing that. So right here, at the very end, we have to combine all kinds of those bills together in what is called an omnibus bill--six bills in total. I find it ironic we are talking about a bill which is nearly $500 billion--to be exact, it is $446.8 billion in new spending--at a time when our national deficit is $1.4 trillion, the health care bill we are debating in its first 10 years of implementation is $2.5 trillion and, next week, we are going to be asked to raise the debt ceiling in this country by something like $1.8 trillion. I saw a bumper sticker that said, ``Don't Tell Them What Comes After A Trillion.'' We used to think in billions. When I first came to Congress, millions were a big deal. Now we are talking trillions, and it is being tossed around as if it is nothing. Now another $\1/2\ trillion spending bill. Well, obviously we need to run the government. But do you suppose the government could be a little bit like families and be a little bit prudent in how much it spends or how much it increases its spending over the previous year? Let me give you some examples. The bill for Transportation and HUD receives a 23-percent increase over last year--23 percent. The State Foreign Operations bill receives a 33-percent increase over last year. Included in that bill is a 24-percent increase for the State Department's salaries and operations. A lot of Americans would like to see their salaries and operations increased by 24 percent. Commerce, State, and Justice receives a 12-percent increase over last year. You might say, well, the government is in tough shape. We need, for some reason, to increase our spending by 33 percent. No, not with what is in this bill. My colleagues have done a little bit of a check to see if there are any earmarks in this bill, for example. And guess what--5,224 earmarks and those earmarks alone are over $3.8 billion. I gave some examples of those earmarks, and I do not want to embarrass any of my colleagues by citing them today. But I think it would be appropriate for us to at least have the opportunity to strike some of these earmarks and save a little bit of money. Because the argument is always made: Well, we can't save money. We have to keep spending what we are spending. There is nothing in there to cut. There is a lot in there to cut. So the point I want to make to my colleagues here today, before we vote to proceed with this legislation, is we could do better. There is no argument that we have to spend 33 percent more on the State Foreign Operations bill or 23 percent more on what we call affectionately around here the THUD bill, when we have this deficit of $1.4 trillion, when we have to increase the national debt by $1.8 trillion, when we are talking about spending another $2.5 trillion, and that is just for the first 10 years of operation on the health care bill. I have not even mentioned the bills earlier this year--bailing out AIG, the insurance companies, General Motors, Chrysler, and the stimulus package, and well over $1 trillion when you add in the interest. By the way, I did not mention interest. Part of the problem is we do not have this money. We are borrowing it. We have to borrow this money in order to pay it to these folks, and that means you have to pay interest. I have not even included the interest cost, which for all these bills amounts to several hundreds of billions of dollars. There is a point at which, if you are talking about your own family and your own credit card, instead of asking the credit card company to expand the limit so you can put even more money on your credit card-- which is what we are doing here--you would start paying that credit card down and you would be a little bit more careful about your spending. All I am asking is: Can't we be a little more careful about our spending so we do not have to increase Departments of government by 23 percent, 33 percent over last year's spending? I do not think that is too much to ask on behalf of our taxpayers.

Mr. KYL. Mr. President, how much time is remaining on our side?

Mr. KYL. Thank you, Mr. President. Let me respond to my friend, the majority whip now. Two plain points. First of all: that Republicans also serve on the Appropriations Committee. That is true. If the majority whip, however, wants to defend this bill, that is his prerogative. He can do that. I have the right to vote against it. I do not serve on the Appropriations Committee, and I do not think it is a good bill. There may be some Republicans who do. I did not contend this was strictly a partisan activity, but I said it was wrong. When our constituents, who pay the taxes in this country, ask us to be more frugal, we could be more frugal than this. Secondly, undoubtedly, in a bill of almost $500 billion, there are good things. In fact, I know there are some good things in this bill. And I certainly suspect that the increase in veterans spending the majority whip referred to is probably supported by everybody in this body. That is the problem, however. When you do not do these appropriations bills one at a time, so you can vote on each one on its own merits, you are relegated to combining them into one giant bill. That is why it is called an omnibus bill, and you cannot differentiate between the things you support and the things you oppose. So what you have to end up doing is accepting all of the bad stuff in order to be able to support the good things. That is a time-honored tradition around here. If you cannot get it all passed on its own merits, then bundle it up with a whole bunch of other stuff, and we will have to accept a lot of bad policy and bad spending because we do not want be accused of not supporting our Nation's veterans. Some of us are willing to say--and I, in fact, have had this conversation with veterans before: Would you rather have us vote against a bill which includes veterans spending but is way more than we should be spending or vote for that bill simply because it has veterans spending in it? I used to have this conversation with veterans when I was in the House of Representatives because they always combine veterans spending with HUD, and it was hard to pass the HUD bill but easy to pass the veterans bill. That is why they did it that way. My veterans were very understanding when I voted against that bill. We have to be a little bit more courageous around here and a little bit more honest with our constituents in the way we set these bills up, so we do not argue to them: Oh, you don't want to vote against veterans, do you? No, nobody wants to vote against veterans. But if you get to the point in the year where you have not done your work, and you have to combine all these bills together--and you have some good spending, for example, for veterans, but you are also raising the State Department by 33 percent--I think a lot of folks would say: That is too much. And we could actually save money by being more discreet in supporting some things and opposing others. That is why it would have been better if the majority could have gotten these bills to us one at a time rather than combined into one omnibus bill. So, I do think, at a certain point in time, our constituents can demand of us more fiscal prudence, more responsibility in the way we vote. The only way Republicans have to oppose a process by which all of these things came together at once, and the only way other Democrats who wish to demonstrate their prudence in spending to their constituents can do that, is to vote ``no'' so we do not proceed to this bill, so we could try to break it apart and vote on veterans, if you want to vote for veterans, but not a 33-percent increase in the State Department bill. I urge my colleagues to vote ``no'' and to do this in a more responsible way so we do not have to go home and say to our constituents: Well, we voted for a 33-percent increase in the State Department over last year. I know it is tough for you, but the State Department needed that money. So I hope you will forgive us for doing that. I do not think we want to do that. I hope my colleagues will vote ``no.'' Project Attribution Correction

Mr. KYL. The following Senators are necessarily absent: the Senator from Missouri (Mr. Bond), the Senator from Kentucky (Mr. Bunning), the Senator from Oklahoma (Mr. Coburn), the Senator from South Carolina (Mr. Graham), the Senator from South Carolina (Mr. DeMint), and the Senator from Indiana (Mr. Lugar). Further, if present and voting, the Senator from South Carolina (Mr. DeMint) would have voted ``nay'' and the Senator from Kentucky (Mr. Bunning) would have voted ``nay.''

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Kentucky (Mr. Bunning), the Senator from Oklahoma (Mr. Coburn), the Senator from Texas (Mrs. Hutchison), and the Senator from North Carolina (Mr. Burr). Further, if present and voting, the Senator from Kentucky (Mr. Bunning) would have voted ``Nay.''

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

Mr. KYL. Mr. President, I ask unanimous consent that following my remarks Senator Brown of Ohio and then Senator LeMieux of Florida be recognized in that order.

Mr. KYL. Mr. President, each day it seems there is a new analysis of the Democratic proposal on health care that suggests it is not such a great idea. Today, a devastating report was made public by the Obama administration itself--the Department of Health and Human Services--and their group that is in charge of Medicare and Medicaid. It goes by the initials CMS. Specifically, the Chief Actuary, Richard S. Foster, of the Centers for Medicare and Medicaid Services, issued a report about the effect of the Reid legislation on health care as it pertains to a whole variety of things--the cost of the legislation, the effect it is going to have on taxes, on premiums, on benefits, the cost with respect to Medicare and the kinds of things that will occur to beneficiaries in Medicare, and so on. It is a complete report by a person who I think all would agree is not only qualified to speak to these things but also quite objective, as the chief actuary of CMS. He reached a number of very interesting conclusions, and I want to briefly discuss eight of them. The first thing is that he noted his estimates were actually not a full 10-year estimate, and I will quote what he said here. Because of these transition effects and the fact that most of the coverage provisions would be in effect for only 6 of the 10 years of the budget period, the cost estimates shown in this memorandum do not represent a full 10-year cost for the proposed legislation. The reason that is important is we have been saying here for quite a long time that you can't just look at the first 10 years in order to see the full impact of this legislation because for the first 4 years most of the benefits don't exist. They are simply collecting taxes and fees and revenues, and then is when the benefits kick in, as a result of which, when they say it is all in balance, it is in balance because they are collecting money for 10 years but they only have to pay for benefits for 6 of those 10 years. So the real question is: What does it cost over the first full 10 years of implementation? And it turns out that is about $2.5 trillion. We have known this, and we have made the point. I think even the chairman of the Finance Committee has acknowledged the $2.5 trillion if you take the first 10 years of implementation. But I think it is good to actually have that confirmed now by the Chief Actuary of CMS. Secondly, a point I have been making all along is that when the President said repeatedly: If you like your insurance, you get to keep it, that is not true; and it is not true for a variety of reasons under the bill, and again this report confirms what we have been saying is in fact true; namely, that a number of workers who currently have employer-sponsored insurance would lose their coverage. In addition to that, seniors who are enrolled in private Medicare plans, which are known as the Medicare Advantage plans, would lose benefits, and many of them would no longer be covered. Let me read two quotations, first relative to employer-sponsored insurance; and, second, people who are on Medicare Advantage plans. I am quoting now. Some smaller employers would be inclined to terminate their existing coverage, and companies with low average salaries might find it to their and their employees' advantage to end their plans. The per-worker penalties assessed on nonparticipating employers are very low compared to prevailing health insurance costs. As a result, the penalties would not be a significant deterrent to dropping or forgoing coverage. What does that mean? The employer under this bill has an obligation to provide insurance to his or her employees. If they don't do that, then they pay a penalty. The problem is that the penalty is much less than the cost of buying the insurance. So what we have been saying all along, and what the CMS actuary confirms here, is that in a lot of cases, small employers--and particularly companies with low average salaries--will find it to their advantage to drop the insurance coverage and have their folks go into the so-called exchange programs. The penalty these employers pay will be much less than what they are paying now to provide insurance. So these folks who are very happy with the insurance they have right now are not going to be very happy when they get something substantially less than that through the so-called exchange. They may like the coverage they have now, but, unfortunately, what the President promised, that they would get to keep it, is not true. And this is confirmed by what I read to you. What about folks on Medicare Advantage? These are senior citizens above 65 who are on Medicare, and what they have chosen to participate in is the private insurance coverage component of Medicare called Medicare Advantage. Here is the quotation. Lower benchmarks would reduce Medicare Advantage rebates to plans and thereby result in less generous benefit packages. We estimate that in 2015, when the competitive benchmarks would be fully phased in, enrollment in Medicare Advantage plans would decrease by about 33 percent. Everybody has acknowledged there would be a reduction, but there has been little debate about how much it would be. Our initial projections are borne out by the CMS actuary--a decrease in enrollment in Medicare Advantage by about 33 percent. That is a third. This is important to me because 337,000 Arizonans participate in Medicare Advantage--almost 40 percent of all our seniors. And a third of them, if this works across the board, are going to lose their plan because of this. In any event, they are all going to lose benefits because of ``the result in less generous benefit packages.'' This hasn't been much in dispute, because the Congressional Budget Office itself has described precisely how much the benefit packages will be reduced by, and it is 90-some dollars. It is from 130-some dollars in actuarial value down to 40-some dollars in actuarial value, which is a huge reduction, obviously. So reduction in benefits; a third of the people no longer on Medicare Advantage. The bottom line, whether you are privately insured through your employer or you are a senior citizen in Medicare Advantage, you are not going to be able to keep the benefits and the plan you like and have, notwithstanding the President's commitment to the contrary. Third, Medicare cuts. We have been talking a lot about Medicare cuts, and my colleagues on the other side say: Well, we don't think that the Medicare cuts are the way you describe them. Seniors are still going to have access to doctors and so on. This report is devastating in blowing a hole in that argument. Let me quote a couple of the things they say. Providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries). This is what we have been predicting. If you impose extra costs and mandates on the people who are providing the care--whether it be the hospitals, the physicians, home health care, or if you are taxing something such as medical devices--all of those impose costs on the people who are providing these medical benefits. What the CMS actuary is saying here is that the combination of those things would potentially jeopardize access to care for the beneficiaries. There aren't going to be as many of these people in business to provide care for an increasing number of people. Let me go on with the quotation that I think will make this clear: Simulations by the Office of the Actuary suggest that roughly 20 percent of Part A providers [hospitals, nursing homes, home health] would become unprofitable within the 10 year projection period as a result of the productivity adjustments. In other words, 20 percent of the hospitals, home health care folks and others are not going to be profitable anymore. They are going to be out of business because of the burdens that are being placed upon them in this legislation. What happens when you have the baby boomers going into the Medicare Program? Under the latest idea from the other side of the aisle, we are even going to have 30 million potentially being able to join Medicare--the folks from 55 up to 65--but you are going to reduce by 20 percent the number of folks to take care of them--the hospitals and home health care and so on. Obviously, you have a big problem. Access will be jeopardized, as the actuary says. This is where rationing, in effect, comes in. There simply aren't enough doctors, hospitals, and others to care for the number of patients who want to see them. This is how it starts. First, long delays, long lines, long waiting periods before you can get your appointment, and eventually denial of care because there is simply nobody to take care of you. This is exacerbated by something else in the legislation, which is the fourth point here. The actuary talks about the independent Medicare advisory board. What is happening is that Medicare is being cut in three different ways: one, Medicare Advantage, which I mentioned; two, the providers are being slashed in the reimbursements that they are receiving; and three, this legislation creates an independent Medicare advisory board that is supposed to make recommendations on how to effect huge reductions in the cost of Medicare, and the primary way they will do that is by reducing the amount of money paid to doctors, to hospitals, to others who take care of patients. That, obviously, will also result in less care for the senior citizens. If the cuts are so drastic that Congress says no, we are not going to do them, then you don't have the savings the bill relies upon to pay for the new entitlement. So one of two things happens, and they are both disastrous: Either you have these huge cuts, which are devastating for access to care or the cuts are so unrealistic they do not go into effect, in which case the legislation can't be paid for. And then I guess you are going to have to raise taxes on the American people because you aren't able to effect the savings from Medicare. Here is what the actuary says: In general, limiting cost growth to a level below medical price inflation alone would represent an exceedingly difficult challenge. That is the challenge being put before them here--an exceedingly difficult challenge. Actual Medicare cost growth per beneficiary was below the target level in only 4 of the last 25 years, with 3 of those years immediately following the Balanced Budget Act of 1997; the impact of the BBA prompted Congress to pass legislation in 1999 and 2000 moderating many of the BBA provisions. What does that mean? In 1997, Congress passed the Balanced Budget Act, which drastically reduced the payments to these providers in order to cut the cost of Medicare. Three out of the four years in which the costs were reduced, it was immediately following that legislation. But starting in 1999 and into the year 2000, Congress realized those cuts were too deep; you were not going to get doctors and hospitals to continue to take care of patients if we continued to cut what they were paid for their services. So the cuts were ameliorated and, as a result, the savings were not achieved. What the actuary is saying here is if that same thing happens again, if these cuts are so drastic we actually don't let them go into effect because they would be self-defeating, then you will not have the savings that have been promised and scored here as enabling this legislation to be so-called ``budget neutral.'' It won't be budget neutral. So as I said, one of two things will happen, and both are bad. Either you have the cuts, which are devastating for seniors or you don't have them and they are devastating to taxpayers. Five is Medicare expansion. I think all of us agree on both sides of the aisle that Medicaid is a very vexing problem because the States have to pay for a percentage of the Medicaid patients and the States are generally in very poor financial shape and they do not need more people added to the Medicaid rolls that can't pay for them. My Governor was in town earlier this week, and she said: Please, please, don't add people to the Medicaid rolls and expect the States are going to be able to pay for them. Let me read a couple of the quotes from this actuarial report. Providers might tend to accept more patients who have private insurance (with relatively attractive payment rates) and fewer Medicare or Medicaid patients, exacerbating existing access problems for the latter group. That latter group, of course, is the Medicaid group. The problem is that reimbursement is so low for Medicaid, frankly, they are the last patients a doctor sees, and their care is not the best. If we are going to provide care for a group of people, we need to do it right. Unfortunately, this is how rationing begins if you don't have enough money to do it right. Then let me conclude with this quotation. [This] possibly is especially likely in the case of the substantially higher volume of Medicaid services, where provider payment rates are well below average. And that is my point. Therefore, it is reasonable to expect that a significant portion of the increased demand for Medicaid would be difficult to meet, particularly over the first few years. What they are saying is that there aren't going to be the physicians and the other people to care for the Medicaid patients here and, as a result, the promise we have made to these people we are not going to be able to keep. Enrolling in Medicaid does not guarantee access to care by a long shot. No. 6. Again, this is something we have been saying. This is not really too controversial because the Congressional Budget Office has said the same thing that the Actuary here says. But it is always good to have a backup opinion. This is the tax on drugs, on devices, and on insurance plans. We have all been saying of course those costs are passed on to the consumer in the form of higher premiums or, in a couple of cases, higher taxes. That is what is demonstrated: Consumers will face even higher costs as a result of the new taxes on the health care sector. I might just say before I read the quotation here, it doesn't make any sense to me why, in order to pay for this new entitlement, you would tax the very people you want to take care of. Tax the doctors, insurance companies, device manufacturers that make the diabetes pump or the stent for a heart patient or some other device that improves our health care these days? Let's tax them? I am saying maybe you want to tax liquor or tobacco or something, but why tax the things that make people healthier? Go figure. That is what the bill does. Here is what the Actuary says: We anticipate that such fees would generally be passed through to the health consumers in the form of higher drug and device prices and higher insurance premiums, with an associated increase of approximately $11 billion per year in overall national health expenditures, beginning in 2011. Remember how we were going to drive costs down with this bill? We weren't going to be paying as much? The Actuary says: We anticipate such fees would be generally passed through to the consumers in the form of higher drug and device prices and higher insurance premiums, with an associated increase of $11 billion a year. This is going backward, not forward. The whole idea was to reduce costs and premiums. Instead, they are going up. No. 7. Here is another tax. We are going to tax the higher premium plans. In response--this is a 40-percent tax on these plans. What will employers do? According to the Actuary: . . . employers will reduce employees' health care benefits. That makes sense. If you are going to tax an insurance plan that has a lot of good benefits in it, then the employer is going to say: Rather than paying that tax, I will reduce the benefits--precisely what CMS says. This is another case in which if you like what you have, sorry, you are not going to get to keep it. We are going to tax it. Then the employer is going to reduce the benefits. Here is the quotation from CMS: In reaction to the excise tax, many employers would reduce the scope of their health benefits. This is exactly what we have been saying. Here are seven specific ways in which the CMS Actuary, working for the Obama administration Department of Health and Human Services, has verified the complaints Republicans have been making about this legislation for weeks--that it will raise premiums, it will raise taxes, it will raise costs. It will raise the cost of health care. It will raise the cost to the government. It will provide fewer benefits. It will result in the transition of people from private insurance to the exchange which is created in here and will result in less access to care because there will be fewer providers to take care of more people. What a wonderful reform. This is why, when I talk about this legislation, I do not talk of health care reform. I am reminded of the line from a novel in which the individual says: Reform, sir? Don't talk of reform. Things are bad enough already. Indeed, they are. We do have problems. One of those problems is premium costs going up. I note that my colleagues in the House of Representatives on the Republican side offered an amendment which, according to calculations of the Congressional Budget Office and according to the House Republicans, would have actually reduced premiums by $3,000 a year for the average family rather than increasing them. Republicans have good ideas about attacking the specific problems we face today. What we do not need is something under the guise of reform which is so massive, so intrusive into our lives and, with all due respect, not well thought out in terms of its long-range implications. What you end up with at the end of the day, according to CMS now, according to the Actuary of the U.S. Government Health and Human Services, CMS, it raises premiums, raises taxes, reduces access to care, increases the cost, and provides fewer benefits. I cannot imagine how we could go home at Christmastime and say to our constituents: This is what we are giving you for Christmas this year.

Mr. KYL

Mr. KYL. Mr. President, I wish to say a few words about the legislation which is pending before us, which is the Omnibus appropriations bill. It is a bill that will substantially add to our national debt and substantially increase spending and I think it is worthwhile to point out some of the features of this bill, since presumably we will be voting on it sometime this weekend. I would start by pointing out that our national deficit for the past fiscal year now stands at $1.4 trillion. So the fiscal year which just concluded added $1.4 trillion to the national debt. That is the largest deficit we have ever had, by far. It is about three times as much as the largest deficit under the Bush administration. Our current unemployment level is at 10 percent, despite the administration's insistence earlier this year that Congress pass a $1 trillion-plus stimulus package that was supposed to reduce unemployment. The Senate is currently in the middle of a debate on a health care bill that has a 10-year implementation cost of $2.5 trillion. Sometime in the next month we will be forced to raise the Nation's debt ceiling for the second time this year to a level that exceeds the current ceiling of $12.1 trillion. If all that were not enough, we are now presented with this Omnibus appropriations bill that costs nearly $500 billion more; to be exact, $446.8 billion. This is simply irresponsible. When is it going to end? We are piling spending bill on spending bill and debt on debt. At a time when many Americans are being forced to get by on less, the majority has crafted a bill that uses the government's credit card to increase spending on the six appropriations bills that make up this package--by how much? By 12 percent total. For perspective, according to the Bureau of Labor Statistics, the consumer price index, the CPI, the measurement of inflation over the past 12 months, was .2 percent. So the cost of living is going up by .2 percent. Yet we are giving these government agencies 12 percent more money for next year. Let me give some examples. The Transportation-HUD bill receives a 23-percent increase over last year. Has anybody had their income go up by 23 percent over last year? Well, if you are in the Federal Government, you can make it happen. That is not responsible. How about the State-Foreign Operations bill, a 33-percent increase, a third over last year--a 33-percent increase. Included in that is a 24- percent increase for the State Department's salaries and operations account. That is not responsible. The Commerce, Justice, and Science bill receives a 12-percent increase over last year. At least that is the average of the six bills in total. How about earmarks? Well, they are in here, big time. According to Taxpayers for Common Sense, this bill is larded up with 5,224 earmarks--5,224 earmarks--that total $3.8 billion. That is not responsible. Some examples include $600,000 for a streetscape beautification in California and $300,000 for Carnegie Hall music and education programs in New York City. In the current economic environment, that doesn't seem to be the most responsible use of Federal taxpayer dollars. If the irresponsible levels of spending were not bad enough, the bill makes a number of significant policy changes as well. Ordinarily, we are not supposed to have policy changes in an appropriations bill, but when you lump them all together in a take-it-or-leave-it form, such as this omnibus, well, if you are the majority, you think you can get away with it. Here are 134 examples. With respect to the fairness doctrine, this omnibus does not include the fiscal year 2008 ban on Federal funds being used to enforce or implement the so-called fairness doctrine--so nothing to implement or enforce the so-called fairness doctrine. The bill makes some changes to several longstanding policy provisions contained in the financial services bill and specifically the District of Columbia section dealing with abortion, medical marijuana, needle exchange, domestic partners, and the DC Opportunity Scholarship Program. That program has been enormously popular and enormously successful. Yet this bill provides only enough money--$13.2 million--to allow the currently enrolled students in this popular program, the DC Opportunity Scholarship Program, ultimately leading to the termination of the program. I have met with some of these students and their parents. They are doing very well because of the environment in which they are finally able to study and learn and be safe. This program is so popular that people have lined up in long queues to take advantage of it. Yet we are going to terminate the program as a result of language in this bill. Well, it is a cross between irresponsible policy and spending. The bill reduces funding for the Office of Labor Management standards at the Department of Labor by 10 percent. This is the office that investigates union activity and the use of membership dues. Since fiscal year 1998, it has secured 1,400 convictions, resulting in the return of $106 million in embezzled funds to union workers. So where are our priorities? The only place where we see cuts in this bill are in areas where, in this case, the Department of Labor has been enforcing labor law and getting convictions for embezzlement of workers' funds. This is not an area where we want to cut, unless, of course, you are trying to do the bidding of the labor unions who don't like to be called to account for embezzlement of trust fund moneys of their members. Well, what is missing from this bill? Despite spending nearly $500 billion and covering 6 of the 10 appropriations bills, this bill is significant for what it does not include: The fiscal year 2010 Defense appropriations bill, arguably the most important bill yet to be acted upon. Just shortly after President Obama announced his surge strategy for Afghanistan, the majority has decided to play politics on the backs of our troops. The majority is holding the Defense bill back from this package so it can be used as a vehicle for other purposes; for example, to increase our Nation's debt ceiling and potentially push through a number of other bills that likely don't have the votes to pass on their own. That is wrong. While our commanders in the field and civilians at the Pentagon wait, our other less-urgent appropriations priorities will receive double-digit spending increases. That is not responsible and it is not right. Given what I know about this bill--and I haven't had a chance to read it all yet--I would echo my friend in the House, Republican leader John Boehner, who requested the President uphold his campaign promise to go through the budget, line by line, and eliminate irresponsible and wasteful spending. I can assure my colleagues, we will go through this and we will identify those earmarks and we will bring them to the attention of our colleagues, and we will, undoubtedly, because of these spending increases and earmarks and bad policy, attempt to defeat this legislation. Finally, I wish to make reference to some comments I saw delivered by Dr. Christina Romer, Chair of the White House Council of Economic Advisers, as I was drinking my coffee and watching TV a couple days ago. This was on CNN's ``American Morning'' program on December 8. I was rather startled because she said she was getting rid of the jobs deficit and dealing with the budget deficit, two big problems we inherited and absolutely have to deal with. Well, it is true, on January 20 of this year when President Obama took office, we had a deficit and we also had a problem with unemployment. The problem is in inferring they are doing something about it, whereas the Bush administration created the problem, I think they create a misimpression. So I asked my staff to get just two numbers. What was the national debt the last day of President Bush's second term and what is it today--or actually December 7 is the date we got the number for, the 322nd day of President Obama's term. In other words, Dr. Christina Romer was saying these are big problems we inherited and we have to deal with them. So how have they dealt with them? Well, it turns out the national debt the last day of President Bush's second term was $10.6 trillion. What is it today, 322 days later? It is $12 trillion. That is some way to fix that problem. If they are going to complain about the national debt, then get it reduced instead of increased in less than a year--it has gone from $10.6 trillion to $12 trillion; that is $4.5 billion in new debt every single day. These are not my numbers, these are the official statistics of the Bureau of the Public Debt. The other statistic was unemployment. ``We inherited unemployment.'' That is true. I don't know the average, but I think it is somewhere around 4 or 5 percent in our country. On the last day President Bush was in office, unemployment stood at 7.6 percent. I thought, given the stimulus package, surely we have reduced unemployment. What is the unemployment number today? It is 10 percent--after nearly a year of President Obama's failed $1 trillion stimulus experience. When Dr. Romer said ``we inherited this problem,'' my immediate reaction is that the President has been in office for a year. What has he done about it? Answer: It has gotten worse. We have added well over $1 trillion to the national debt, and unemployment is now up to 10 percent from 7.6 percent under President Bush. Some fixing of the problem. I suggest that President Obama and his White House officials and staff stop trying to blame President Bush for everything. If the President has been in office long enough to get the Nobel Peace Prize, presumably he has been in office long enough to do something about the public debt or unemployment. He has done something about it all right: Unemployment is up from 7.6 percent to 10 percent, and the national debt is up from $10.6 trillion to $12 trillion. In view of these facts, it doesn't make sense to me to pass a nearly $500 billion omnibus appropriations bill, with departments of this government receiving 26, 30, and 33 percent increases in their budget, when the CPI has only gone up .2 percent this year, and when Americans are scrimping and saving and trying to get by with less. It makes no sense at all. I hope my colleagues, as we consider this omnibus appropriations bill before us right now, will take these things into consideration before we vote to pile yet more debt on the backs of our taxpaying constituents.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that the following letter, which consists of my May 19, 2008, comments on proposed Federal regulations governing the collection of DNA samples from Federal arrestees and illegal-immigrant deportees, be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I believe if I am to speak for more than 10 minutes I need to ask unanimous consent. If that is correct, I ask unanimous consent to speak for 15 minutes.

Mr. KYL. Mr. President, I wish to speak to the Crapo motion--an amendment that, hopefully, we will be voting on a little later today-- and I urge my colleagues to support the motion of the Senator from Idaho. This is about jobs and it is about taxes. I think one thing Americans don't expect out of this legislation is that they are going to have a pay a lot of taxes and that jobs are going to be killed rather than created. The President is talking about creating more jobs. Everyone in America is focused on putting people back to work, ending this recession, and bringing unemployment down so we can get jobs and go back to work. One of the problems with this bill is it kills jobs. It kills job creation. One of the ways it does that is through the many new taxes and mandates it imposes. Naturally, we want to be sure that whatever we do, we don't harm our economy or job creation, but this $2.5 trillion legislation is filled with new taxes and mandates that will ultimately be borne by small businesses and the American workers. I will talk about just three. First, a new employer mandate that says that employers have to provide insurance to their employees or face a penalty. This would hurt low-income workers especially, according to a Harvard economist, and I will be talking about that. Second, there is a new Medicare payroll tax. Incidentally, the revenue raised doesn't go back to Medicare. It would be nice if we could help with the Medicare solvency, but this too threatens the creation of jobs, particularly in small businesses, because it is a direct tax on hiring more people. Finally, new taxes on the health care industry could undermine its ongoing job creation gains. By the way, it is the only industry to have gained jobs since the start of the recession and this legislation will actually cause job losses. I will describe all three of these. First, the employer mandate. The bill imposes a requirement--a costly new mandate--on employers that will have the perverse impact of actually hurting employees, especially low-cost employees. How so? Any employer with more than 50 employees who does not offer health care coverage would be required to pay an assessment for each employee who receives a tax credit for purchasing coverage through a newly created exchange. Those are folks in the lower income brackets who qualify for tax credits. So this becomes a direct tax on hiring people. According to the Center on Budget and Policy Priorities, . . . the particular employee provision in the Finance Committee bill would pose significant problems by imposing a tax on employers for hiring people from low- and moderate- income families who would qualify for subsidies in the new health insurance exchanges, it would discourage firms from hiring such individuals, and would favor the hiring--for the same jobs--of people who don't qualify for the subsidies (primarily people from families at higher income levels.) To conclude: It would [also] provide an incentive for employers to convert full-time workers (i.e., workers employed at least 30 hours per week) to part-time workers. So here you have it--a mandate in the bill that would directly impact the hiring of low-income workers--precisely the opposite of what we want to be doing these days. Harvard economist Kate Baicker examined the effect of an employer mandate similar to the one in the Reid bill. She estimated the cost of hiring a low-wage worker would rise by 33 percent--or $2 per hour on a worker earning $6 per hour. Think about that. She concluded that 224,000 workers would lose their jobs as a result of a mandate with these costs. In addition to all the other problems we have with growing unemployment, here is another one-quarter million people who would lose their jobs because of this bill. It makes no sense. There was a recent letter sent to the two Senate leaders from the National Federation of Independent Businesses which states: Mandates destroy job creation opportunities for employees. The job loss, whether through lost hiring or greater reliance on part-time employees, harms low-wage or entry-level workers the most. That is exactly what the other study said. By the way, the NFIB is a nonprofit, non-partisan organization, defining itself as the voice of small business. We are all familiar with the good work it does. I think it would know what is best for American business and workers. The second way this bill imposes taxes and hurts workers is it actually creates a payroll tax; in other words, a tax on hiring people or keeping them on your payroll. It raises the Medicare payroll tax by 0.5 percent on small businesses with taxable receipts of $200,000 a year or $250,000 or more, if the small business employer filer is married. Because many small businesses pay taxes at the individual level, imposing higher individual income taxes hurts these engines of job creation. The Joint Committee on Taxation recently estimated that one- third of the income that would be taxed under a similar House proposal comes from small businesses. Let us remember, as President Obama reminded us earlier this week, small businesses generated 65 percent of the job growth between 1993 and 2008 and represent about half the private sector employment of the United States. So this huge potential engine for job creation is going to get whacked by the imposition of a new tax, which is a direct tax on the hiring or retaining of employees. The Joint Committee estimates that this increase in the Medicare tax would raise $54 billion over the next 10 years. That is $54 billion of resources that could have better been used in the private economy, in these small businesses, to expand job creation. Each new tax dollar paid by these small businesses is one less dollar that could go toward the hiring of new employees or, for that matter, preventing layoffs or even giving raises to their existing employees. A group of organizations recently told us in a letter--by the way, these are all organizations that represent small businesses in their communities--they oppose this bill because of what it would do to these small businesses. I wish to read the names of the groups that represent these folks: the Associated Builders and Contractors, the Associated General Contractors, the International Food Service Distributors Association, the National Association of Manufacturers, the National Association of Wholesaler-Distributors, the National Retail Federation, the Small Business and Entrepreneurship Council, and the U.S. Chamber of Commerce. Here is a telling quotation from their letter: In order to finance part of its $2.5 trillion price tag, H.R. 3590 imposes new taxes, fees, and penalties totaling nearly half a trillion dollars. This financial burden falls disproportionately on the backs of small business. Small firms are in desperate need of this precious capital for job creation, investment, and business. That is exactly what President Obama said yesterday. We have to get more capital into the hands of these small businesses so they can either continue their businesses with their employees or, potentially at least, soon begin hiring more. Yet as this letter points out, this bill imposes taxes with a burden that falls disproportionately on the very firms we are trying to help. In a November 19 statement, the National Federation of Independent Businesses said of the bill's impact on small businesses: We oppose [the Reid bill] due to the amount of new taxes, the creation of new mandates, and the establishment of new entitlement programs. There is no doubt all these burdens will be paid for on the backs of small business. It is clear to us that, at the end of the day, the costs to small business more than outweigh the benefits they may have realized. They go on: The impact from these new taxes, a rich benefit package that is more costly than what they can afford today, a new government entitlement program, and a hard employer mandate equals disaster for small business. They know what they are talking about. These are the folks whom we are depending upon to create jobs and we are punching them right in the stomach, right where it hurts, with respect to their ability to create these new jobs with the new taxes and mandates imposed in this bill. Let me share a brief letter from one of my constituents. He is a small business owner in Tempe, AZ. His name is Justin Page. He would like to be able to grow his business, but the burdensome new taxes in this bill would force him to lay off workers and cut hours from his payroll. Here is what he says: Dear Senator Kyl, As a long time Tempe and Arizona resident, who has been operating a small business for the past 19 years, I urge you to not vote for the healthcare bill as it is currently proposed and as recently passed by the House of Representatives. My business has taken a severe financial hit in the past 18 months with several employee layoffs, reduced hours for current employees, heavier workloads, et cetera. My answer to increased health care costs and additional small business taxes is to lay more people off . . . not good for [my employees], and not good for me! But survival is my primary goal right now! Reform is necessary, but please do it in a bipartisan manner and within a timetable that allows for constructive debate. This is too important. So small businesses have some very real concerns about this legislation and good reason to worry that they will be victims of its destructive policies. Obviously, it is not the kind of legislation small business owners or the American worker wants and, of course, not particularly in times of double-digit unemployment. We need to listen to the people out there who are actually creating jobs, who have to meet a payroll, balance a budget, and know what is necessary to run a successful small business. They are not happy with this legislation. The third and final point is the new taxes on the health care industry, which of course get passed through to the people who ultimately have to buy insurance. Let me just discuss one--the medical device tax. This medical device tax is a tax on things that are used to treat us, to give us health care every day. The $110 billion in new taxes on industries such as this--the pharmaceutical, the insurance, and medical device industries--is a direct passthrough in terms of what we will end up having to pay in insurance premiums. For example, this medical device tax will be assessed against thousands of products, such as contact lenses, stethoscopes, hospital beds, artificial heart valves, and advanced diagnostic equipment. Why would you impose a tax on these things that help us? I could maybe see a tax against liquor or a tax against tobacco but a tax on things such as this--these advanced technologies that help us? Why do we want to make them more expensive? These have been invented so we can have an extension of our lives; so our families can have better health care. We all know when you tax something, you get less of it. In fact, a UBS Investment Research paper recently confirmed: If the plan passes as proposed and our estimates are correct, the initial years would be a financial challenge for medical device manufacturers, as the full industry fee becomes due before newly covered patients impact volumes. What they are saying here is, first, before they can even begin to pass these costs on, it could kill this particular industry. These taxes will hit smaller firms particularly hard since some of the smaller companies don't start out with a lot of profits. They rely almost entirely for domestic sales on their revenues. I note my colleagues on the other side of the aisle, Senators Klobuchar, Bayh, Franken, and in addition Senator Lugar from this side of the aisle, recently sent a letter in which they said: Independent estimates indicate that this tax could translate into an annual income tax surcharge of between 10 and 30 percent on medical device manufacturers. Think about that, a 10- to 30-percent tax on folks who are inventing these kinds of things to help us. These Senators go on in their letter: This provision would harm economic development and health care innovation nationwide. This was a letter to the chairman of the Finance Committee. I know there some who argue that lost jobs in the private health care sector will be made up with new jobs in the government with health care bureaucrats here in Washington. Wonderful, I say. That is not a good thing. We need jobs in the private sector. That should be our primary goal and that certainly is what President Obama was talking about yesterday when he talked about creating more jobs in the private sector. In conclusion, I have described three ways in which this legislation through its mandates and its new taxes will cripple our ability to come back out of this recession. It will make it very difficult for us to retain, let alone hire, new employees. All of us here in the Senate I know want to do what we can to bring down the current very high unemployment. It is obvious that this health care bill makes things worse, not better. At every turn its new taxes and mandates put us on the wrong course. I think it is very hard to justify support for this legislation that threatens job creation, especially job creation for low-income workers. I urge my colleagues, when we vote on the Crapo motion here pretty soon, to consider its impact. It will enable at least people in the lower income levels to avoid the kind of taxes that are imposed here, one of which, for example, is the tax that IRS will enforce if you do not buy the insurance policy that the government, under this bill, will mandate that you buy. If you cannot afford the insurance the Government has, you have to buy it anyway. If you do not, we will impose a new tax on you, enforced by the IRS. The Crapo motion would say no, not so fast, IRS, we are going to protect folks from that new tax. That is why it is important to support the Crapo motion. I urge my colleagues, even though I know we have had a lot of votes here where very few Democrats have supported Republican amendments, this is one which I hope all of us could support.

Mr. KYL

Mr. KYL. Mr. President, America's seniors have made clear they value the Medicare Advantage Program. They like their access to private plans, plan choices, lower cost sharing, and all the extra benefits not included in traditional Medicare, such as vision, dental, hearing, and the wellness programs that help them stay fit. Before the Medicare Modernization Act of 2003, seniors had been decrying their lack of choices. We made sure, under the Medicare Modernization Act, that seniors would be assured health care choices, just as all of us here in the Congress enjoy. Now that they have access to private coverage and enjoy more benefits and choices, seniors want us to make sure Medicare Advantage stays viable, and they are not happy about the proposed cuts in the majority leader's bill. I have received more than 500 phone calls since November 1 from constituents who oppose the $120 billion Medicare Advantage cuts proposed by the majority's bill. They know you cannot cut $120 billion from a program without cutting its benefits. A lot of seniors in Arizona are asking, What happened to the President's repeated promise that if you like your insurance, you get to keep what you have? They do not like the idea that under this bill their benefits would be slashed by 64 percent, from $135 of value per month to $49 of value per month, which is exactly what the Congressional Budget Office projects would happen. They do not want the money they paid into Medicare going to fund a new government entitlement program for nonseniors. They are not satisfied with the majority's promise to protect ``guaranteed'' benefits. They want Members of Congress to be straight about our intentions and not engage in semantics. They want an unequivocal promise they will be able to keep exactly what they have now, just as the President promised. Here is the problem. There is an earmark buried on page 894 of the legislation before us that suggests that senior citizens in Florida must have insisted on this exact kind of protection for their Medicare Advantage as well. This provision, in section 3201(g), was specifically drafted at the request of the senior Senator from Florida to protect the benefits for at least 363,000 Medicare Advantage beneficiaries in Florida but very few anywhere else. Nothing in the bill grants the same protection that is granted to these senior citizens to those in my State or in the other States in which there are a lot of seniors who have the Medicare Advantage Program. That is why I support the motion of my colleague, Senator McCain, to commit this bill to the committee and return it without these-- actually, what his bill does is to ensure that all seniors, whatever State they are in, enjoy the same grandfathering status as the senior citizens in Florida would have under the Nelson proposal. The McCain motion to commit is straightforward. First of all, it would help the President keep his commitment that seniors get to keep their insurance if they like it. And it applies to all of America's seniors the same protection granted to Floridians, as I said. Isn't that what all seniors deserve, the security of knowing their current benefits are safe? If our Democratic colleagues are not willing to extend this protection to every Medicare Advantage beneficiary, then I cannot imagine how they can claim to be in favor of protecting Medicare. I have been sharing letters that I have received from Arizona constituents describing what the Medicare Advantage Program means to them. I thought today I would share some excerpts from a few more of these letters. A constituent in Surprise, AZ--I hope the Presiding Officer likes the name of that town: Surprise, AZ--just west of Phoenix, says: I truly hope you will consider keeping the Medicare Advantage plans for seniors. I find the savings a must on my fixed income. I appreciate the [high quality] doctor care on my MediSun Advantage plan. Prescriptions are included in the cost of my plan, providing further savings for me. Medicare Advantage has made a real difference in my life. Please don't let anything happen to this important program. A constituent from Fountain Hills, AZ, writes: I suffer from a specific type of amyotrophic lateral sclerosis, and rely on Medicare Advantage for all of my medical needs. I am asking that you do all that is in your power to protect and provide for the continued funding of this program. In Arizona, we have over 329,000 people who count on Medicare Advantage. Our lives would be devastated without it. A constituent from Wickenburg, AZ, says: Please don't let anything happen to my Medicare Advantage. I like my Medicare Advantage plan because I can choose my own doctor in my own town and also choose a specialist if I need one. I can also get regular check-ups and don't have trouble getting to see the doctor. So, I ask that you don't let the government cut my Medicare Advantage. A constituent from Mesa, AZ, says: I am a senior citizen. I am becoming more and more concerned about President Obama's healthcare plans, and I am writing to tell you that I am happy with my Medicare Advantage plan. I request that you do all you can not to cut my benefits. I have a fairly wide choice of doctors and specialists, who have always treated me with respect, given me the time I feel I need, and have given me excellent care. I have a fitness benefit, which entitles me to the Silver Sneakers program at our local YMCA; two choices of a dental plan; a vision plan; plus many other options to maintain my level of health or to try to improve it. Please, I beg you, do whatever you can to maintain our Medicare Advantage plan. Do NOT cut any of our benefits. We know there are millions of seniors out there who absolutely depend on Medicare Advantage. Many have stories to tell about how this program has improved the quality of their life and their health. I urge my colleagues to support the McCain motion to commit to ensure that all of America's seniors, not just those in certain preferred counties, primarily located in the State of Florida, are grandfathered in these benefits. Again, to make it very clear, Medicare Advantage benefits are cut by the $120 billion reduction in Medicare under the bill. The Senator from Florida found a way to grandfather the Medicare Advantage benefits for many of his constituents. What the McCain motion to commit does is to apply that same grandfathering to all seniors in all States so that none of the seniors who have Medicare Advantage today would lose any of the benefits they enjoy today. It seems to me what is good for our senior citizens in Florida ought to be good for our senior citizens in Arizona or any other State in which they reside. I urge my colleagues to consider and to support the McCain motion to commit.

Mr. KYL

Mr. KYL. I thank my colleague from Nevada. I had the opportunity, which we don't have very much anymore, to preside for a half hour, watching over a dozen of my Republican colleagues engaging in a very informative debate for the American people. It occurred to me, as my colleague from Nevada was talking about his amendment, which would actually reduce the cost of medicine, would reduce the defensive medicine practiced by physicians and, therefore, have a tendency to reduce health care costs, that he was doing that by actually attacking another problem we have been talking about; that is, these runaway lawsuits or these junk lawsuits that have been talked about. As a person who used to practice law, as I was listening to the Senator, it occurred to me that maybe I should take the microphone and defend the trial lawyers. So I wish to make sure I have the math right. Under the amendment of my colleague, there would be a cap on the amount of attorney's fees these lawyers could get, depending upon how much money they recovered for their plaintiff client; is that correct?