Jim McCrery

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I thank the gentleman for yielding me the time. Mr. Speaker, before I address the remarks of the last speaker on the minority side, let me just go over the numbers here so everybody has a clear understanding of what we are talking about. There has been some misstatements made in several quarters about the amount of money in this Medicare package for HMOs or Medicare+Choice program. Here we see the numbers laid out by the CBO for each category in this package. For hospitals there is $11 billion, 34.9 percent of the total package. Beneficiary assistance and preventive benefits, $6.7 billion dollars, 21.3 percent of the total package. And then we get to Medicare+Choice, the Medicare HMOs. There is $6.3 billion in this package for Medicare HMOs, and that is 20 percent of the total package. Now, I really believe that both sides on this issue are well- intentioned. I agree with the gentleman from New York (Mr. Ackerman). I think it is terrible that we have Medicare HMOs leaving certain parts of our country and, therefore, leaving those seniors with no coverage for things like prescription drugs, in some cases their deductibles, their copays, because those Medicare HMOs, those Medicare+Choice programs often provide those benefits. I know in my district I had one Medicare HMO; and they left last year, the only one. I heard from hundreds of seniors in my district about that plan leaving. They wanted it back. They said that is the greatest thing we have ever had in Medicare, and we want it back. So I agree with the gentleman that we ought to try to encourage those plans to come to a locale and stay there. But encourage is one thing; mandate is another. And in my opinion, I just have an honest disagreement with the gentleman as to how the market works. I think that if we mandate that a plan stays in a locale for 3 years, we will have fewer and fewer plans locating in those marginal locales where the reimbursement rate is at the margin for them to make a profit. So it is an honest disagreement, but I think the gentleman who has offered the motion to instruct is just wrong about the effects of his motion if it were to become law. And so for that reason, I would urge all Members on both sides of the aisle who are interested in having their seniors have access to these type Medicare plans to vote no on this motion to instruct.

Mr. McCRERY. Mr. Speaker, reclaiming my time, but the gentleman is not suggesting that we should not be raising the reimbursement rate to hospitals and other providers?

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, as the 106th Congress draws to a close, I would like to join my colleagues in paying tribute to Mr. Ron Haskins, the Staff Director of the Ways and Means Subcommittee on Human Resources. Much to my regret, Ron will be leaving the Subcommittee at the end of the year. I know he will be sorely missed by this Member, and by the many other Members and staff who have had the opportunity to work with him during his time on Capitol Hill. Over the years, Ron has been a key asset on the Ways and Means Committee. As a member of the Human Resources Subcommittee, I have had the honor of working closely with Ron on some of the major social policy issues affecting our country. His in-depth understanding of the issues, combined with his keen ability to digest the diverse perspectives of Committee Members, have allowed him to help identify areas of compromise and agreement on difficult issues. As the Subcommittee's new Staff Director in 1995, Ron immediately employed his strong grasp of the nation's welfare system by working with then-Chairman Clay Shaw, and other Members of the Committee, to craft the 1996 Welfare Reform Act--the most significant change in social policy in this country in the last 60 years. Thanks to Ron's tireless efforts, millions of American families are breaking a cycle of dependency and are working and gaining independence in our nation's economy. As Ron moves on to other opportunities in his life, I join my colleagues in thanking Ron for his service to the Committee and to the country, for his good counsel, and for his energetic presence. I wish him all the best in his future endeavors.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I am pleased to take this opportunity to pay tribute to a fellow Louisianan, Major General Charles W. Thomas, who is retiring after more than 32 years of service to the Nation in the United States Army. General Thomas served the past two years as the Chief of Staff, U.S. Army Training Doctrine Command (TRADOC), responsible for managing the day-to-day operations of this major Army element and its 15 installations, 27 Army schools, and 67 thousand military and civilian personnel located throughout the United States. TRADOC's mission is to prepare the U.S. Army for war and is the architect of the future Army. In the fast paced world of change we have witnessed at a national and international level over the past three decades, General Thomas has been instrumental in steering the U.S. Army on a path to meet current and future threats to our national security. Equally important, he has contributed significantly to the readiness of the Army by ensuring the men and women in uniform were well trained and well equipped for their missions during peace and war. His leadership and mentoring played a major role in the development of an Army in which the citizens of our great nation can be justifiably proud. Serving under such daunting responsibilities has been a pattern in General Thomas' military career, a career which began in October 1968 and saw him serve in the Military Intelligence Corps at such diverse locations as Turkey, Thailand, Germany, and in Saudi Arabia during Operation DESERT STORM. These tours of duty and a variety of other command and staff assignments have taken this alumnus of Northwestern State University in Louisiana with undergraduate and graduate degrees in Zoology across the seas and around the United States with duty in Georgia, Arizona, Hawaii, and Virginia, among other states. But his home has always been Natchitoches, Louisiana, where his parents, Dr. and Mrs. Charles and Sadie Thomas, still reside today. Mr. Speaker, I am proud to recognize this respected Army leader. I wish General Thomas and his wife Sharon all the best, and am certain that Members of the House will join me in tribute to this outstanding American.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I thank the gentleman for yielding me time. Mr. Speaker, there are a lot of good things in this package, many of which were, in fact, put together with bipartisan work and support. I was in on a lot of the meetings on the Medicare provisions with Democrats talking about how to best put this together. I was in on some meetings with some Democrats on some tax provisions. One of the largest sections of the tax bill that is included in this bill was put together by the gentleman from Ohio (Mr. Portman) and the gentleman from Maryland (Mr. Cardin), the last speaker, working together, bipartisan. So, please, do not try to make it look like this is something that is one-sided, put together only by Republicans. It is not. Let me just say something about the Medicare+Choice. First of all, it is not half of the spending in this bill, it is about 25 percent of the spending in this bill. With the interactions it gets up close to one- third. But if you go back, Republican or Democrat, look at your mail, what do your seniors want? They want the Medicare HMOs to give them prescription drugs, to give them choices. It is no surprise we put money into that program to help them out.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I rise today to memorialize the life and work of the late Vince Zanca. Mr. Zanca was a nationally recognized expert on the unemployment insurance program, the safety net for workers who lose their jobs. Mr. Zanca was a tireless advocate for maintaining a strong unemployment insurance system in Louisiana and across the nation. He was active in national and state business organizations involved in unemployment insurance issues, including the Louisiana Association of Business and Industry (LABI), the U.S. Chamber of Commerce, and UWC-- Strategic Services on Unemployment and Workers' Compensation. For many years, Mr. Zanca served on the U.S. Chamber's UI Task Force. He was a member of the Council of State Chambers' UI Task Force, where he coauthored its employer unemployment compensation handbook, Issues and Answers. Mr. Zanca also chaired LABI's UI Task Force, where he coauthored LABI's employer unemployment compensation handbook, In Plain Dollars and Sense. In addition, he served on the Louisiana Unemployment Insurance Advisory Council under three governors. In recognition of his many achievements and for his leadership on behalf of a sound unemployment insurance program, Mr. Zanca received UWC's Quarterback award in 1998. In addition to his deep involvement in UI issues, Mr. Zanca served our country during World War II in the U.S. Army Transport Service, and was a 55-year veteran of the Boy Scouts of America. Mr. Speaker, as someone involved in efforts to reform our current unemployment insurance system for our nation's workers and businesses, I would like to recognize the contributions of Mr. Zanca. His devoted efforts on this issue are greatly appreciated and will be sorely missed by our state and the nation. Mr. Zanca is survived by his loving wife, Noni; his three children, Roy, Rhonda, and Regina; his two grandchildren, Robin and Ryan; and, his three siblings, Gloria Chaplain, Virginia Burke, and John Zanca.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I am glad the gentleman brought that up, as we have to conclude our discussion here. I am glad the gentleman brought up the issue of saving Medicare, because, indeed, if no changes are made to the Medicare system, we all know that it is not actuarially sound, and it will meet its demise. The program itself will meet its demise within about 20 or 25 years. And when my generation, the baby boom generation, reaches retirement age, the Medicare program will not be able to provide benefits to my generation. So the gentleman makes an excellent point. The gentlewoman from Connecticut (Mrs. Johnson) also mentioned some of the reforms that we include, reforms of Medicare that we include in our prescription drug plan, which will facilitate the transition from the current Medicare system to a Medicare system that will be stronger, that will rely on competition in the private sector to drive down costs in the Medicare system and save Medicare for the long hall so that my generation and generations following mine will have the benefit of this program. I appreciate the gentleman for yielding to me and saying that our plan does that, but the Vice President's does not.

Mr. McCRERY. Mr. Speaker, I thank the gentleman from California (Mr. Thomas) for convening this special order to talk about prescription drugs, and I thank the gentlewoman from Connecticut (Mrs. Johnson) for bringing up the element of our prescription drug bill that does not get highlighted too much, which is the elements of price and price discounts. And she is exactly right. The Republican prescription drug bill that we passed through this House, on average, would give seniors a 25 percent reduction in the cost of their prescription drugs, that is every senior, not just low-income seniors, as some Democrats have tried to characterize our bill. Every senior gets that reduction in the cost of the prescription drugs. Another element that is overlooked sometimes in the Democrats' characterization of our bill as one that leaves out millions of senior citizens is the element of the catastrophic coverage. That is available for every senior, not just low-income seniors, not just some seniors; but every senior who voluntarily subscribes to this prescription drug program would have the benefit of that protection, protection against those soaring drug costs that can afflict somebody with a range of illnesses, some catastrophic disease should that strike that person. That senior will be protected no matter his income, no matter his status. If he opts to get into this voluntary program that we will have created through this legislation, he will receive that protection. So I think it is important for us to explain to the American public that the bill we passed through this House of Representatives is not just a bill for low-income seniors. It does not leave millions of seniors out; it protects all seniors who voluntarily choose to subscribe to the program, and it is available for every senior without regard to the health status of the senior. In other words, if the senior citizen already is on the 12 prescription drugs that the gentleman from California (Mr. Thomas) discovered one of his constituents was on, she is eligible for our program, just like the senior citizen who is not on any prescription drugs. So, unfortunately, in some of the House races around the country, our prescription drug bill has been mischaracterized by Democrat opponents; and that is unfortunate, because what we passed through this House, I believe, is the best solution for guaranteeing a prescription drug benefit to the seniors in this country. It is the solution that involves the private sector in this country which has been so dynamic in delivering high-quality health care, unlike countries that have gone to government control of health care, dumb down basically the health care system, dumb down innovation in our health care system. Our country, thank goodness, has continued to rely on the private sector to deliver that health care innovation. We want to do the same thing with prescription drugs, not fall back on a government solution that involves hundreds of mandates like the Democrat solution, the Gore solution. That would be catastrophic for this country if we were to let the Government take over prescription drugs in this land of ours. I appreciate the gentleman allowing me a few minutes to talk about the fact that our prescription drug plan is for all seniors, not just for some, and it delivers high quality benefits to all seniors, not just some.

Mr. McCRERY. It is ironic that our plan has been attacked by the Democrats because we rely on the private sector to manage the benefit. They say, ``Oh, gosh, you know, we just don't believe the private sector will do a good job of managing this benefit under Medicare. We should let HCFA, the Health Care Finance Administration which administers Medicare, also administer this prescription drug benefit.'' What they do not tell you is that HCFA, the Health Care Finance Administration, would rely, would hire, a private sector entity to manage their business. Just as under our bill we would have private sector entities called PBMs, or pharmaceutical benefits managers, to provide this benefit around the country, only we would have multiple PBMs, not just one, the Health Care Finance Administration would hire under the Democrats' vision one single pharmaceutical benefits manager to manage this benefit. Well, if our plan is flawed because we are going to have a private sector entity, in fact a number of private sector entities, PBMs, manage the benefit, then theirs is flawed as well because HCFA relies on a private sector entity, a PBM, a single PBM to manage theirs. They say, ``Oh, well, gosh, if that happens, if we can't get a PBM to manage the benefit under our plan, well, we'll just let HCFA, the Health Care Finance Administration, manage the benefit.'' Well, that sounds good, I guess, but then when you examine the kind of job that HCFA is doing now with Medicare, managing Medicare, never mind prescription drugs because that is not part of Medicare, just managing Medicare, you see that maybe that is not such a good idea after all. For example, in an effort to help senior citizens, this Republican- majority Congress just in the last couple of years passed a change to Medicare to benefit senior citizens with their copayments, with their coinsurance under Medicare, trying to reduce the amount of out-of- pocket costs to seniors. Well, in order to effect that, HCFA, the Health Care Finance Administration, has to create an outpatient prospective payment system to make that happen, to save those seniors those out-of-pocket costs. Guess what? They have not been able to do that yet. How many years have they had now, HCFA, to put this in place? How long has it been since we have directed them to do that, to save seniors money and they have not been able to put it in place?

Mr. McCRERY. So 7 years for that, 3 years for the one I am talking about that would benefit the pocketbooks of seniors that we passed in an effort to help seniors, and the very administration, the Health Care Finance Administration, that the Democrats want to rely on to deliver this new benefit, prescription drugs, has not been able in 3 years to perfect this mechanism to save seniors out-of-pocket costs. That to me is not much to rely on. To me, it is much safer to rely on the private sector, a robust private sector that is innovative and wants to get in the business of delivering prescription drugs to seniors and in fact is doing so in a number of group plans around the country.

Mr. McCRERY. As the gentleman knows, one of the criticisms that Democrats have leveled at our plan is that the private sector insurance companies, the private sector pharmaceutical benefit managers will not participate in our plan. They will not offer a plan; therefore, we are not really offering seniors any choices. Well, the same criticisms were leveled in the State of Nevada, when Nevada's Republican Governor came up with a similar plan to provide prescription drugs in the State of Nevada. And if I am not mistaken, and please correct me if I am wrong, but just recently the deadline came for submission of plans from the private sector or bids to participate in the Nevada State program and not only did the private sector step up to the plate and say yes, we will participate, but I believe Nevada had a choice from among at least five different plans.

Mr. McCRERY. Mr. Speaker, we will play in this game. We want to provide this benefit to your citizens in Nevada, so even though that same criticism was leveled at Nevada, the private sector will not participate. They do not like this plan. We found at least there that that criticism was not warranted, and Nevada now has the luxury of choosing from among five different bids from the private sector to manage their prescription drug benefit in their State. I predict, if our bill were to become law, we would experience the same thing. The private sector would step up to the plate and seniors would have multiple choices of plans as we have described.

Mr. McCRERY. We passed it in a responsible way. I would admit.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I would like to express my strong support for H.R. 4318, the Red River National Wildlife Refuge Act. This measure, which I introduced, establishes the Red River National Wildlife Refuge in Caddo, Bossier, Red River, Natchitoches, and DeSoto Parishes in the Fourth Congressional District of Louisiana. At present, there are 20 national wildlife refuges in the State of Louisiana which host over 1.4 million visitors annually. However, not a single national wildlife refuge exists in Northwest Louisiana to meet a demonstrated environmental need in the Red River Alluvial Valley. The Red River Alluvial Valley is an internationally significant environmental resource that has been neglected and requires active restoration and management to protect and enhance the value of the region as habitat for fish and wildlife. The Red River Valley is part of a major continental migration corridor for migratory birds funneling through North America from as far north as the Arctic Circle to as far south as Tierra del Fuego in South America. This valley is of critical environmental importance to over 350 species of birds (including migratory and resident waterfowl, shore birds, and neotropical migratory birds), aquatic life, and a wide array of other species associated with river basin ecosystems. However, since the 1820s, the Red River Valley has been almost totally cleared of its forest cover, primarily due to agricultural production. The recent completion of the Red River Waterway project in Louisiana and the land-use changes away from agricultural production in the area have enhanced opportunities for environmental restoration and management of fish and wildlife in the Red River Valley. H.R. 4318 authorizes the acquisition of up to 50,000 acres of land, waters, or interests therein in Caddo, Bossier, Red River, DeSoto, and Natchitoches Parishes for inclusion in the Red River National Wildlife Refuge. The refuge is envisioned to take the form of several large tracts of refuge lands comprising several thousand acres apiece, managed as a system to restore and preserve fish and wildlife habitat. The Red River National Wildlife Refuge, authorized in this Act, represents the federal share of a unique federal, state, local and private partnership being proposed by local conservationists, including Paul and Skipper Dickson and other members of the Friends of the Red River Refuges, to restore and manage approximately ten percent of the 800,000-acre Red River Alluvial Valley in Louisiana. Funding for land acquisition would come from the Migratory Bird Fund and the Land and Water Conservation Fund. H.R. 4318 calls for significant local public involvement in the delineation of refuge boundaries and the formulation of a refuge management plan. The bill also encourages public use of refuge lands and environmental outreach programs and facilities, including the authorization of wildlife interpretation and education center associated with the refuge. I would like to thank House Resources Committee Chairman Don Young, Fisheries Conservation, Wildlife and Oceans Subcommittee Chairman Jim Saxton, and the other members of the Resources Committee for their support for this proposal. I urge members of the House to vote in favor of this legislation so we may undertake this important conservation and restoration project as soon as possible.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I thank the gentleman for yielding me this time. In response to the previous speaker, let me just say that those on this side of the aisle are aware that a great deal of the benefits of this tax bill, this tax cut go to married couples that do not incur the marriage penalty. We think that is swell. We think that married couples with kids that are trying to make it need a tax cut. We think married couples without kids that are struggling to get a new car or get enough toward a down payment on a house need a tax cut. Look, we have passed several tax cuts since the Republicans have been in the majority in this House, since January of 1995. The President has signed those, even with all of those tax cuts that we have passed and the President has signed, the American people are still paying more in taxes to the Federal Government as a percent of our national income than they ever have. Our total tax burden in this country is as high as it has ever been. We would like to reduce that, my colleagues on the other side are right, not only for couples that are incurring a marriage penalty, which we all admit is wrong in the Tax Code, but yes, even for those married couples that are not incurring the marriage penalty. I do not make any apology for that. Let us talk about this marriage penalty. Let me just explain it real quickly so everybody knows what it is in the Tax Code. A marriage tax penalty occurs when a married couple pays more taxes by filing jointly than they would if each spouse could file as a single person. In other words, they pay more in taxes as a married couple than they would if they were not married and just living together. Now, is that the kind of social policy we should encourage through the Tax Code? Surely, we do not think so. The most common marriage tax penalty happens because the standard deduction for couples is $1,450, less than double the standard deduction for singles. For example, an individual earning $25,500 would be taxed at 15 percent, while a married couple with incomes of $25,500 each are taxed at 28 percent on a portion of their income. That is wrong, and this bill fixes that.

Mr. McCRERY

Mr. McCRERY. I am glad to yield to the gentleman from Vermont.

Mr. McCRERY. Mr. Speaker, reclaiming my time, if the gentleman from Vermont would allow me to reiterate that this bill does provide for accounting disclosure of every parcel of those plans so that those employees will have access to the information that they have not had access to in some of those situations that the gentleman from Vermont presents. So while this bill may not do everything the gentleman wants, it certainly improves the situation, and he should support that. But the gentleman from Vermont certainly should take some solace in the provisions that are in this bill. The substitute, on the other hand, is something that this House should not support for a couple of reasons. Number one, it has not been properly vetted. It was sprung on the Committee on Ways and Means for the first time last week, and today we have an even different version from that that was sprung on the Committee on Ways and Means just last week. It doubles the cost of the underlying bill, the new substitute does. The version that was sprung on us last week actually increased the cost by four or five times. Today's version only doubles the cost of the underlying bill. The substitute is patterned after the earned income tax credit. Now, while I support the EIC, we should know that, before we create yet another program based upon that concept, that the Taxpayer Advocate's 1999 Annual Report to Congress identified the refundable earned income credit as one of the most serious problems facing taxpayers and the Internal Revenue Service in terms of its complexity, compliance, and litigation associated with it. Surely we do not want to double the problems with the IRS by creating a new program based on that concept. Number two, this proposal would give refundable tax credits only to people who cannot afford now to put part of their salaries forward. So it really would have no effect. It would not help those folks at all. This substitute, while well-intentioned is wrong headed. They came up with it very quickly to try to obfuscate the issue, try to detract attention from the fact that this is a bipartisan proposal. If the President wants to veto this, shame on him. We are finally doing what he asked us to do in a bipartisan way. He ought to sign it.

Mr. McCRERY. Mr. Speaker, I thank the gentleman from Ohio for yielding me this time, and I commend him on his efforts as well as those of the gentleman from Maryland (Mr. Cardin) in a bipartisan effort to improve pensions in this country. The gentleman from Vermont (Mr. Sanders) spoke about the cash balance programs, and it just so happens that the gentleman from Maryland (Mr. Cardin) and the gentleman from Ohio (Mr. Portman) recognize that there are some problems with those, and they call for full disclosure and transparency in those programs. The gentleman from Vermont ought to be supporting this bill.

Mr. McCRERY

Mr. McCRERY. Mr. Speaker, I thank the gentleman for yielding me this time. Several Members in support of the Rangel substitute, Mr. Speaker, have begged us to adopt the Rangel substitute because their farmers need help now. Well, I find it curious that the Farm Bureau has endorsed not the Rangel substitute but the underlying bill, which I hope will pass this House today. That is real relief to farmers, not the Rangel substitute. Let me talk about why that is. Three years ago, in 1997, I was the author of a bill to do what the Rangel substitute attempts to do today; that is to give a higher exemption, so to speak, to family farms, family businesses from the estate tax. I pursued that course for two reasons. Number one, in 1997, we were not expecting the huge surpluses at the Federal level that we are today. We had very much more limited revenue over expenditures to work with for any tax cuts. So I chose a route to try to do the most good with the estate tax that I could with the limited dollars that we had to spend. And the route I chose was to try to direct the relief at family farms and family-held businesses. We got a lot of support for that route. We finally got some of my bill into the tax bill that was signed by the President in 1997, and that became law. And since then, those family farms and family businesses have been eligible for a higher exemption from the estate tax than everybody else. Unfortunately, I was wrong in 1997. That relief that we tried to give family businesses and family farms has not taken place. Why? The Committee on Ways and Means heard testimony last year from tax experts and, indeed, from the National Federation of Independent Businesses, who had backed my proposal in 1997, and they told us that that attempt to exempt family farms and businesses from part of the estate tax has not worked because it is too complex. There is no way to ensure that a family looking forward can comply with all of the requirements that are necessary to qualify for that exemption. As a consequence, we just have not been able to bring those family farms and businesses under this exemption. It was well- intentioned, I was well-intentioned in 1997, I think it is well- intentioned today, but it will not work. So I will ask my colleagues in this House to reject the attempt of the gentleman from New York (Mr. Rangel) to simply expand on the failed attempt that I made in 1997 to help family farms and businesses and, instead, to go with the Archer bill today that repeals the estate tax once and for all. We phase it in over 10 years. It is a responsible plan. We have the revenue to do it, and there is no reason to continue this extremely unfair, I would submit the most unfair, part of our Tax Code.

Mr. McCRERY

Mr. McCRERY. That is right, Mr. Speaker. I want to be honest here. We have come up with a conceptional plan that does the things that the gentleman from Pennsylvania and I have talked about. We have not had the numbers crunched by the Congressional Budget Office. That is in the process of being done. We have worked with some actuaries who think we can do what we have described within the budgetary confines that we are working in, which is $40 billion over 5 years. But we do not know yet to what extent we can protect those seniors from those high costs. We have to wait until we get those numbers from the CBO. But I believe that any plan that we include in Medicare ought to provide not only a basic benefit for low-income seniors and other seniors but also must include a stop-loss provision which protects that senior citizen from skyrocketing out-of-pocket costs that could bleed his lifetime savings. So we have got to wait and see what the numbers show. But I think, from a conceptional standpoint, we ought to agree that we are going to provide a basic benefit which both our plan and the President's plan does, and that is protection against those very, very high drug costs. If it ends up costing more, then we have got to figure out a way to finance that. But from a conceptional standpoint, I think any drug benefit that we include must have those two elements, a basic benefit for everybody, including low-income seniors and protection against those extraordinarily high drug costs that some seniors, a few seniors run into.

Mr. McCRERY. Mr. Speaker, unfortunately, I have been in another meeting on another health care subject and not been able to hear the discussion so I do not know what has been said so far. But I do want to compliment the President on coming forward with a plan. I do not want anything that I say here to say that I am not appreciative of the President getting in the mix and trying to put forward a prescription drug plan, because I think it is important that he be part of the process. All of us, the President, the gentleman from Pennsylvania (Mr. Greenwood), I, Republicans, Democrats, I think, agree that, in order to have a modern Medicare program, we have got to have a prescription drug benefit. Thirty-five years ago when Medicare was created, prescription drugs were a very small part of the health care regimen of a senior citizen. So we took care of their hospital needs and their doctor needs, Part A and Part B, and that was fine for most seniors. Today that has changed. Now if one takes care of the hospital bill and the doctor bill, in many cases, there is a third item, prescription drugs that constitutes a very large portion of that senior's health care needs, the health care regimen of that senior. So we all agree, and I think it is appropriate for all of us to be discussing how we best do this, including the President, Republicans, and Democrats. So I appreciate the President putting out a plan. I think the President's plan is insufficient. In his defense, he was trying to craft a plan that would meet certain budgetary guidelines. His plan spends about $34.5 billion over 5 years. He decided to put the bulk of that money into a benefit for low-income seniors and giving every senior a very minimal benefit. Let me tell my colleagues what I mean when I say ``minimal.'' Based on the figures provided by the White House for the premiums that a senior will have to pay, the level of the benefit, which is $2,000, once one reaches $2,000 of expenditures for prescription drugs, one's benefit is over under the President's plan. So when one adds up the premium that a senior has to pay for the plan and the co-insurance requirement, which is 50 percent, basically a senior will pay $1,750 for $2,000 worth of drugs. Not a great deal. But, again, in the President's defense, if one only has a limited amount of money to spend, in his case $34.5 billion over 5 years, and one provides 100 percent of the benefit to low-income seniors, there is not a lot left to give the average senior a benefit. So I think the President's plan, while it is a good start, is insufficient. The glaring insufficiency in the President's plan is that he does not give any protection to extraordinarily high costs that seniors may have. So that if one has got a senior citizen who has done everything right his whole life, he worked hard, he paid his taxes, he saved for retirement, and then after he is 65 years old, he contracts some chronic disease that requires a very high level of drug maintenance, he bleeds those savings. Those savings are just gone. That is not right. We ought to give seniors some protection against just financial ruin because of bad luck in health care and having very high prescription drug costs. Our Republican plan does that. That is why I think that we need to work with the White House, the White House needs to work with us. We need to get a plan in law that gives seniors, not only low-income seniors, that basic benefit that both our plan and the President's plan does, but also some protection against those very high drug costs that are killing some of our seniors, not killing, they are staying alive because of those drugs, but it is bleeding their savings; and that is not right.

Mr. McCRERY. That is not the case, Mr. Speaker.

Mr. McCRERY. I agree. And I thank the gentleman for allowing me to participate in the discussion on the prescription drug plan for seniors. Our good friend and colleague, the gentleman from California (Mr. Thomas), the chairman of the Subcommittee on Health of the Committee on Ways and Means, has joined us. So with the gentleman's permission, I am going to go back to my other health care meeting and turn it over to the gentleman from California.

Mr. McCRERY. That cap that the gentleman is talking about, though, is an after-the-fact determination according to the actual costs in the industry. So at the end of a year, what we do is we go back and look at the cost for drugs for all seniors, and then we determine above what level constitutes the top 2.5 percent of expenditures. It might be $10,000; it might be $12,000; it might be $15,000; it might be $7,000. Somewhere, though, we will reach a point where all expenditures above that by all seniors constitutes the top 2.5 percent of expenditures. So a plan knows very quickly how many seniors it has with expenditures over that $10,000 level or $12,000 level. They report that to the Federal Government. The Federal Government ships them a check basically for those seniors and the costs for those seniors above that level. It is doable. It is kind of an after-the-fact risk adjustment that we can do, and we are hopeful that the insurance industry will be comfortable with that kind of risk adjustment mechanism and will write products in the marketplace that will give seniors a choice of products and give the basic benefits that we have talked about.

Mr. McCRERY. Mr. Speaker, it is fairly easy to explain, but not easily understood. Let me take a shot at it. It is really different from a stop-loss provision that I have talked about for an individual senior. That is a stop the loss out of his pocket. What the gentleman from Pennsylvania is talking about is the Federal Government telling the insurance industry we will stop your losses for any seniors in, say, the top 2\1/2\ percent of expenditures for drugs. We know that that top 2\1/2\ percent of seniors in terms of their drug cost constitutes about 25 percent of the total drug expenditures for the senior population. So if we give the insurance industry some reinsurance protection, so to speak, against those extraordinarily high-cost seniors, then they will be able to write a product, produce a product in the marketplace at a premium that will be substantially lower, perhaps as much as 25 percent lower than they could if we gave them no protection in a reinsurance way against those extraordinarily high-cost seniors. So the gentleman is exactly right. By basically buying down the tail of those high cost seniors for the insurance industry, we allow them to write a product that is fairly predictable in terms of their cost, and we allow them to write those products at a premium that would be substantially lower than they could if we gave them no such stop-loss protection for the insurance industry.