Jim McDermott

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Chairman, I rise to marvel at the wisdom of Congress. We have done such a wonderful job over these past 2 years that we are ready to take on the awesome task of matchmaking for all citizens of the United States. The legislation we are debating now dictates to them who they can love and spend their lives with in order to benefit from the rights guaranteed by the Constitution and the legal benefits of our laws-- civil laws governing marriage and divorce that have previously been the province of the States. Have we nothing better to do with our time? Marriage is a personal matter. Marriage is about two people coming together to love and support each other. Why should Congress interfere in this very personal decision? It was less than 30 year ago that our courts ruled it unconstitutional for the States to ban marriage between persons of different ethnic backgrounds. Have we learned so little in the last 30 years? This bill has nothing to do with family values or protecting the institution of marriage. It is a political game to obscure the real issues behind the failure of marriages and to divide Americans in an election year. It is an attempt to fan the coals of bigotry and hatred to try to gain a few votes. The institution of marriage will not be saved to strengthened by increasing hate between our citizens. This is not a religious issue. Each of the numerous religions practiced in America is free to perform the rites of marriage in accordance with its tenets. Many marriages between persons of the same gender have been blessed by their religions--in all 50 States. This is purely and simply a civil matter--whether the Federal Government should decide for its citizens which of these unions to recognize and with whom citizens may share their vows of marriage. Nor is this a moral issue. The only moral question before us is whether it is moral to use this legislation to foster prejudice and misinformation among our citizens for political gain. I suggest we turn our attention to creating conditions that foster relationships between people in which they care for each other. To quote Ecclesiastes 4:9-10, ``Two are better than one. If one falls down, his friend can help him up.'' The Reverend Billy Graham used that Biblical quote to justify marriage. Reverend Graham stated, `` Nowhere is this truer than in marriage when sickness or other problems come. One of the reasons God has given marriage to us is for times like this.'' It is with marriage that our society makes it a little easier to survive and obtain fulfillment. Let's turn our efforts to making life a little easier for people by giving them all equal opportunities to love and help each other. Let's also give them the freedom to decide for themselves who they would like for a partner in life. Let's not raise barriers to prevent our citizens from partaking equally in the rights guaranteed by our Constitution and legal benefits granted by our laws. I urge my colleagues to vote against this narrow-minded legislation.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, the Republicans seem to be obsessed with this welfare business but there are some issues that are much bigger than welfare. Clean drinking water in this country is something that everybody needs, whether you are Republican or Democrat. The front page of the Washington Post has a story that you cannot drink the water in Washington, DC. Now, if you look at USA Today they are talking about Washington State and the problems with drinking water there. Yet this House dawdles and does not appoint the conferees to deal with the Safe Drinking Water Act. Now, it is amazing to me that you can sit here and talk about some welfare waiver when, in fact, this city, the capital of the United States, the most powerful country in the world, if you come to my office or come to the Speaker's office or any other office, they will not get you a glass of water from the tap. Every one of us drinks bottled water in this building. You go in those Cloakrooms, both sides, you have bottled water. The American people are entitled to safe drinking water. Appoint the conferees, Mr. Speaker.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I rise today in opposition to House Joint Resolution 182. Businesses succeed in China when they first develop a good relationship with their Chinese counterpart before discussing the details of the transaction. It is time for the United States to do the same. In what is becoming an annual ritual, every summer the House of Representatives has this debate over renewal of China's most-favored- nation trading status. I think everyone's time would be better spent developing a China policy that establishes a constructive framework for dialog and includes permanent extension of MFN. Annual grandstanding and political bickering over this issue does nothing to improve our relations with China. Threatening withdrawal hurts our credibility with the Chinese on other issues, and if carried out, would hurt our economy and turn China into an enemy. Today, MFN trading status is a pillar in the United States trading relationship with China. Without continued MFN, United States firms will be denied opportunities to sell and invest in China and in turn prevented from bringing United States values and United States ways of doing business to China. The involvement of United States businesses in China not only provides numerous benefits for the United States economy, but it has also brought improved health, safety and training standards to the Chinese firms and people with whom American companies do business. My State, Washington, has benefitted enormously from trade with China. Washington State ranks first among the 50 States in exports to China. In 1994, Washington State exports accounted for almost a quarter of total United States exports to China. China is the single most important and exciting market for the Pacific Northwest for the foreseeable future. Trade with China is beneficial not only to large companies located in my State, but also to hundreds of small companies in the State whose China trade accounts for an ever-growing portion of their business. Cutting off China's most-favored-nation status, which will immediately result in Chinese retaliation on American exports, is neither sound nor effective policy. The strategic implications of removing MFN from China and isolating it from the United States are serious and against our interests. Our relationship with China in not perfect. I would like to see improved human rights in China. But isolating China is not the way to achieve our goals. The United States need to take the step which is in the best interests of our country and renew MFN for China.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I rise today to pay tribute to a former Member of both Houses of Congress, Hugh Burnton Mitchell. Mr. Mitchell died on June 10, at age 89, and his family and friends are gathering at Daybreak Star Center in Seattle to remember him today. Hugh Mitchell was a true son of the Northwest, and true Democrat. His belief, that government could help people realize their dreams, was at the core of his public service. He was born in Great Falls, MT in 1907, grew up on a dairy farm, and attended public schools. After graduating from Dartmouth College, he engaged in editorial work at an Everett, WA newspaper. In 1933, he joined the congressional staff of U.S. Representative Monrad Wallgren, and extended his service on the Hill for 12 years, including Wallgren's term in the Senate. When Wallgren was elected Governor of the State of Washington, he appointed Mitchell to serve the balance of his Senate term. Hugh Mitchell was just 37 years old when he was sworn on January 10, 1945-- the second youngest U.S. Senator at the time. He was defeated for election in 1946, but was elected to the House in 1948 and served in the 81st and 82d Congresses. He was not a candidate for renomination in 1952, but mounted an unsuccessful bid for the governorship of Washington in 1952. Mr. Speaker, our country has changed dramatically in the 40 years since Hugh Mitchell graced the floor of this Chamber, but the principle that animated his public service is timeless: that government could and should aid the people he represented. He listened to the people, and tried to put government to work for them. Hugh Mitchell's congressional career began as World War II was ending; the country's agenda then was similar to that which faces it today in the post-cold war era. Mitchell urged conversion of America's war-related industries to peacetime infrastructure-building, both to put people to work, and to prevent a reversion to the hardships of the Depression. America's hard-won superiority in science and technology, he believed, should be used to relieve the tensions and miseries of the war-torn world. He supported the Marshall plan for Europe, but also proposed a similar program of engagement in Asia. Had the Congress heeded his prophetic advice, we might have avoided the disastrous route that took our country into conflicts in Korea and Vietnam. ``We must make allies in Asia,'' he warned, ``or we are doomed to protracted, costly, and indecisive wars.'' His ideas about cultivating constructive cooperative relationships with Pacific Rim countries were part of the long tradition of trade and friendship among the people of the Northwest and their neighbors to the East. Our APEC program today is a culmination of the vision of Washington State advocates such as Warren Magnuson, Henry Jackson, and Hugh B. Mitchell. Mitchell's legislative agenda also included the careful stewardship of the abundant natural resources of the Pacific Northwest. Adoption of his plan for comprehensive management of the Columbia River Valley by the Congress might have averted the ecological crisis we now struggle to overcome. Hugh Mitchell's reputation as a far-sighted intellectual is complemented by his legendary attentiveness to the wisdom of his constituents. His civility of discourse and equanimity in the face of adversity sprang from his faith in the democratic process. His pragmatic vision of government of, by, and for the people is a legacy that enhances this body, Mr. Speaker, and I commend it to you.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, my colleague from Illinois, Mr. Hastert, has talked recently, very briefly, about the fact that there is a health reform act which is before the Congress and which I think in this instance we both agree is important. It has provisions which allow people to take their insurance from one place of employment to another, that is portability. It prohibits the use of preexisting conditions to bar people from insurance, but unfortunately it is probably not going to pass the House of Representatives; and it is about that issue that I would like to talk. The Republican health care bill contains provisions granting substantial tax incentives for medical savings accounts. Despite the fact that there is no public clamor for them, Republicans are obsessed with medical savings accounts. Now, the Republicans in the House want us to believe that MSA's are the way to expand patient choice and to control health care costs, when in my opinion nothing could be further from the truth. The only things that are known for sure about MSA's is that they will provide lavish tax breaks for the healthiest and wealthiest in our society and that this will cause the cost of health care insurance to increase, making it more difficult and less affordable for employers to offer adequate health insurance. I want to start at the beginning, because we talk about MSA's. I am not sure how many Members of the House, how many members of the general public really understand what the proposal really amounts to. MSA's are nothing more than tax-favored savings accounts for health care expenses, coupled with a high deductible health insurance policy. Under the MSA proposal which the House Republicans have advanced, health insurance for qualified employers either directly or through their employers are allowed to contribute yearly tax-exempt amounts to an MSA, a medical savings account, up to a specific ceiling. The ceilings in the House bill are $2,000 for an individual and $4,000 for a family. The first question every American has to ask themselves is, do I have $4,000 that I can put into this medical savings account, money out of my pocket that I am going to put into that savings account. To be qualified to have an MSA, all a taxpayer needs to have beyond that money is to have coverage through a high deductible insurance plan. This way people could use their money in the MSA. They have the high deductible. If they spend up to $10,000 or up to $3,000, whatever the deductibility is, then they would be covered by the insurance. But the first $3,000 or first $10,000, whatever that deductible is, is the responsibility of the individual patient. They have to come up with it. They had this medical savings account that they can put up to $4,000 in. And when they have medical expenses, they can take that money out and pay the medical expenses toward the deductible which would get up to $3,000. The problem with this latest insurance fad is that MSAs will do two things. They will destroy the health insurance market as it currently exists, and they will be an immense drain on the Federal Treasury during a time when Congress is supposed to be focused on reducing the national debt. First, I want to talk about what MSA's are going to do to the current health insurance market and the premiums of those people who are covered by traditional health insurance. The general principle of health insurance is to spread the health care expenses across large groups of people to protect each of us from being bankrupted by unanticipated health care costs. Under today's insurance system, the premiums of younger and healthier workers subsidize the higher health care spending of less healthy, middle aged and older workers. This is a continuous subsidy cycle. We have been doing it for years in this country. The last 50 years with our health insurance, the younger workers have put in, the older workers have used more of it. The younger workers of today will someday be relying on the workers who follow them to continue that process. MSA's destroy that traditional concept of insurance by enabling millions of younger healthy people to opt out of this inadvisable subsidy. With the availability of MSA's younger healthy workers could opt out of the main insurance pool by choosing to take the cheaper catastrophic coverage and keep the unused cash in that MSA as a tax-free savings to be withdrawn at a later date. A study by the Urban Institute estimates that, if just 20 percent of workers switch to MAS's, the premium cost for the those workers who want to keep their present low deductible health insurance, if you have a policy today with a $200 deductible or $300 deductible, that is a low deductible. If you want to keep that and 20 percent of the policy holders go into MSA's, the cost of insurance would rise by 60 percent for those people who stay in traditional coverage. Now, what happens then? Well, it is obvious. Some individuals may no longer be able to afford traditional health insurance and businesses will have two choices: either abandon the low cost, low deductible policy or lower their workers' salaries to pay for it. I brought a couple charts here because it is easy or it is easier to sometimes work with a chart. I want to talk about employer A and employer B. Employer A is a situation that does not exist. You have five employees, one, two, three, four, five, and they all have the same medical experience last year; they each cost $3,000 in health care bills. Total cost, $15,000. The employer who is buying their policy is spending $16,000 to cover them for their health insurance at an average cost of $3,200 per patient or per employee. This is a hypotentical. There is no company where everybody in the company spends the same amount. What is more real is employer B. Nice, young, strong person, no problems, did not spend a dime last year. Next person had a throat infection, had a X-ray, had some penicillin, spent $600. Next person broke their arm. It costs them $1,000. The third person had a complicated pregnancy, and that cost $4,000 in health expenditures, and the last person in the employment had cancer and spent $9,000. Now if you add those figures up, you come to the same $15,000. Now the employer is paying $16,000 for the insurance. It is an average of $3,200 per year. Obviously, the young person's insurance is subsidizing the person who got cancer or the person who had a pregnancy that was complicated or the person that had diabetes or the person that had anyone of a number of things. These people who spent very little are actually subsidizing the other people. That is the idea of insurance. We have the same idea with fire insurance. We all pay property taxes, we put the money into the treasury, they fire firemen, they buy fire engines, they build fire stations, and we hope that our house never burns down. We do not want to spend one single dime on our house. We hope that we do not have a fire and have to have the fire trucks come and put out the fire and spend a lot of money. The idea of insurance is that we do not know what is going to happen to us in life, and we pool our money to take are of those of us who require some kind of care. It is absolutely the way insurance has always worked. Now, with this idea of a MSA, you can see that the person who has spent nothing last year--this person spent nothing last year, so they figure let me put this money that I have got into a medical savings account, it is tax free, and I am not going to need any of it, and some day I could use it tax free. It is tax-free money. It is great for a young person who is healthy and strong and does not figure anything is going to happen to him. The next person spent $600 last year; MSA sounds pretty good to them. They did not spend $3,200. So they go into the MSA, the third person goes into the MSA, and the employer is left only with two people to say: Well, I want the old account, I want to cover my expenditures because we got this complicated pregnancy, and we got now a child with a birth defect, and we are not sure how much this is going to cost, it is going to be a big expenditure, we do not want to be stuck with having to come up with $3,000 or $5,000 or $10,000 a year in that high-cost deductible insurance, we want the present plan. The person with cancer the same way. They say: Hey, look. I have got a big problem. I do not know how this is going to turn out. But I cannot go with--I know this medical savings account; I am going to spend every dime in that thing, and I am going to wind up paying more money out of my pocket. If those three people opt out of the pool, now the employer looks. He has got $13,400 to pay between these two people. He has to buy a policy for $14,000. For two people he is paying $7,000 apiece. And you say, well, what happened to these people here? Well, let me show you what the problem with this whole proposal is. The employer was spending $3,200 on each one of his employees, and he could, if he is the best--this is the best says scenario--if it was the best employer in the world, he would say, well, I spent $3,200 on him one way, I will spend $3,200 on him this way. A high-cost deductible insurance policy with a $3,000 deductible; in other words you, the individual, are responsible for the first $3,000 out of your pocket; that kind of policy costs $2,000 a year. So the employer says: Well, I will buy one of those for everybody. That will cost me $10,000, $2,000 for each one of my employees. Now, I still got $1,200, and I will put that $1,200 into their medical savings account. So now this person says, well, I can put up to $2,000. If I got more money in my pocket, I will put it in there. If I do not have more money, I will try and live off that $1,200 that my boss put in there, and that boss would spend--in effect, he would spend $16,000 just as he spent before. He spends exactly the same amount. Now, why would an employer offer this to an employee? Well, there is no reason to. It is going to cost him the same whether he offers standard insurance as we know it today, with a risk pool with everybody in it, or offering these MSA's. And the gentleman from Illinois [Mr. Hastert] was correct. It is possible for employers to offer MSA's today. Now let us look at why in a worst-case scenario an employer might think it was a good idea to offer a MSA. He has $3,200, and he says to himself, well, I am going to buy him that deductible, that $3,000 deductible, high-deductible plan, that catastrophic insurance. So $2,000 apiece for five of them is $10,000. And then he says, why should I put anything in their medical savings account? Nothing in the House proposal from the Republicans requires him to put in anything; nothing in there, absolutely nothing. So the person who once had a policy that covered everything and had a $200 deductible now has a $3,000 deductible and has to reach into his own pocket for his family and put his own $4,000 in here. The employer who offers this program, this high-deductible plan, is saving $6,000 a year simply by saying: Hey, I will buy everybody a high-deductible plan, and then you can open a medical savings account, and you will then be stuck for everything up to and including that $3,000. Now, if you think about this, you can begin to see why people wonder where this is all going to come out. MSA's are very bad health policy. The extremely high-deductible insurance coverage associated with MSA's of at least $1,500 for an individual and $3,000 for a family will encourage some patients to delay the necessary care and ignore preventive measures. If you put money in a MSA, it is tax free up there, and you say, well, if I spend it, it is my own money; I do not think I will go to the doctor. Now, if you have high blood pressure and you should go to a followup visit to the doctor, you say, well, I do not think I am going to go. So you wind up having a stroke because you did not control your high blood pressure, and at that point you spend $3,000 in deductible plus whatever beyond that under this high-deductible plan. It is bad health care; not only fiscal policy, but bad health care. Now, the opponents of MSA's believe that this will lead to unnecessary acute care and higher overall costs because people do not do prevention because they are trying to keep that money in that account, they do not want to go to the doctor, they can stay away, and they are not going to get prevention at all. In addition, between the amount of money an individual has in their MSA and the level at which the catastrophic policy kicks in could yield tremendous financial difficulties for many unsuspecting families and individuals. If you take this first person--you remember this young person who did not spend any money last year--young people tend to think they are never going to get sick. I got a couple of kids. They think they are going to live forever without trouble, but I got one who is a skier. If you get in a skiing accident, break your leg, and it costs you 10 grand, you suddenly have gone from zero to 1 grand here with nothing in that account to cover it unless you have taken the money out of your own pocket and put it in there. All the deductibles are on you up to $10,000. So, if you break your leg and it costs you $10,000 and you have nothing in your MSA, it is all out of your pocket. And people do not think in those terms, young people, so they would opt for this MSA, get hooked in, and suddenly wind up with a debt they never anticipated. MSA's and high-deductible insurance policies that accompany them often can and will define the medical services differently, making it easy for some individuals to exhaust their money in that MSA on things like vision and dental care that are not counted toward the deductible on the high-deductible plan. So you could have $4,000 in your MSA, spend it on all kinds of medical expenses and then have something bad happen to you and find out that you spent $4,000, but the deductible policy does not count any of that. So then you have to pay another $3,000 in deductible before you are eligible for your insurance plan. There is no connection between what you spend the money from your medical savings account on and what is accepted or counted by the insurance policy. People will have to read the insurance policy when they spend money out of their MSA to see does this count against my deductible or does it not, and if you figure you are healthy and this is no problem, you are not worried about that. But unfortunately, young people get leukemia, young people get Hodgkin's disease, young people have all kinds of things happen to them. In fact, middle-aged people who are in good health--you know, as 45 you are going like a bandit, and all of a sudden something comes, the heart attack, and suddenly you go from being healthy and strong and running a marathon and whatever and winding up in a hospital needing coronary bypass surgery which has cost you $30,000 or $40,000. Suddenly things change dramatically, and you got to remember how much you got in there and how much you paid in your deductible. The connection between those two is not there, and the Republicans are unwilling to write that in as a protection for the consumers, that if you spent this money, it counted against your deductible. They did not want to do that; they wanted to leave that vague so that the insurance companies over here with those high deductibles could define what was covered and what was not. Now, if this happens to individuals, they could be faced with hundreds of thousands of dollars of unreimbursed medical costs for which they are simply unprepared. To make matters worse, there is no requirement in this House proposal that employers deposit any money into these employers' MSA's. There is no requirement. People have to be very careful when their employer comes and says: Hey, would you like an MSA? I am going to buy you a catastrophic plan and then you can put your money in this MSA. That will qualify you. I will buy you this so that will qualify for an MSA. But there is no requirement they put a single dime in there, so all of the $4,000 for a family or the $2,000 for an individual is the responsibility of the employee. They could simply, the employer could simply, pocket the savings, which is what he does in this instance in the worst-case scenario. Most health insurance policies today operate on the principle that the employer buys the policy for the employee and the employee is responsible for all the costs below the deductible that is the $200 or $300 and then any required copays. MSA's are an incentive for employers to offer no-insurance insurance because there is no limit on how high the deductible can be. There is nothing to stop an employer from offering his employees a health care plan with a $10,000 deductible. I am a physician. The American Medical Society sent us out a proposal that is one of these high-deductible plans with a $10,000 limit. Now, maybe doctors can go for that; I mean, maybe they could, but how many of the rest of America could do that? And that is the issue that you have to be careful of in thinking about how great MSA's are. The employer is not required to put a single thin dime into the medical savings account. That is your responsibility. They may put some in if they are really good people, or they may say this is free money, I am putting it back in my pocket, you put it in, Mr. Employee. Now, even if the employer made contributions to his employees' MSA's, there is still a large coverage gap. To compound that lack of coverage, under a high-deductible plan, once an employee meets the new higher deductible, there is no requirement in the House bill that the high-deductible policies be required to cover 100 percent of medical expenses. So you have put your $4,000 into the MSA and you spend it and that pays your deductible; so now your insurance plan kicks in, at what, 70 percent of the cost, 80 percent of the cost? Who knows? The Republicans were not willing to demand that once you had spent this money on your medical savings account, that then the insurance had to cover 100 percent. They gave the insurance companies the latitude to say, well, we will cover you up to 80 percent. So you have now spent $4,000 here, and then you come and your bill is $100,000. If you have a bone marrow transplant at the Hutchinson Cancer Center in Seattle, it will cost you $120,000. So you spend the $4,000. Now your deductible, that is covered, your $3,000 is covered, so then the plan coverage kicks in; $4,000 from $120,000 is $116,000, of which you are going to get 80 percent paid by the insurance company. You pick up 20 percent, or 30 percent, or whatever. There is no consumer protection on these catastrophic plans whatsoever. The Republicans have based their arguments that MSAs will bring more economic efficiency to the health care market on the false premises, and my dear friend, the gentleman from Illinois [Mr. Hastert] said it; he said that patients, individuals will have the tools they need, the ability to bargain shop for health care. Maybe it is because I have been a physician and have seen what kinds of situations bring people into the health care system, but buying health care is not like shopping for groceries. You do not go in there kind of cool and say, shall I have this avocado or this avocado, or shall I buy this breakfast food or that breakfast food, or this steak or that steak, or this loaf of bread. When you are in the ambulance on the way to the hospital, you are in no condition to be shopping for how you are going to spend the money in your medical savings account or anything else that happens to you. When their own money is at stake, some people might not rush to the doctor at the first sign of a cold, so health care spending can be reduced marginally. You can say, well, I am sniffling, I do not think I need to go to the doctor, because I would have to take it out of my medical savings account. You can make some marginal changes. But the fact is, the indisputable fact about medical expenditures is that 70 percent of all health spending is done on 10 percent of Americans who are seriously sick. These Americans have heart attacks, AIDS, cancer, complicated pregnancies, liver disease, diabetes, whatever. Catastrophic insurance will cover their health care costs, so the MSA concept will have no impact whatsoever on 70 percent of the health care spending in this country, because most of the money, 70 percent, is on 10 percent. They blow the roof off the costs. In addition to being an example of an extremely poor health care policy, because it does not encourage people for prevention or follow- up care, MSAs are really a thinly veiled scheme to provide lavish tax breaks for the wealthy. While the lower- and middle-class workers in this country who are worried about their wages, who are worried that their paycheck has not gone up significantly since 1970, they are getting the same amount of buying power today; in fact, less than they had in 1970. They could be hurt by the widespread use of MSAs, as I have already described, because the premiums will go up. If the young and healthy leave, the premiums for the rest of the folks are going to go up, but MSAs will benefit the wealthiest Americans who can afford to pay all of their medical expenses below the high deductibles for catastrophic health plans. If you make $100,000 or $200,000 a year, $3,000 is not very much. Certainly it is a significant amount of money, but if you make $30,000 a year, which is around the average income, $35,000 in this country, $3,000, $4,000 for paying that deductible is 10 percent of your income. Three percent to somebody making $100,000 is 3 percent. That is the difference. Wealthy people have a little extra in their pocket, and they can pay these deductibles. They have money to put in the MSA out of their own pocket. There is no doubt that the promise of these generous tax- sheltered personal savings will draw the healthy and wealthy individuals into MSAs. In fact, in my mind, it would be better to call the MSA ``medical sheltering accounts.'' MSAs offer a number of new tax sheltering opportunities that make it very attractive to people in higher income brackets. Some of these generous tax benefits include an exclusion from income for employer contributions; if your employer is paying for it, I do not have to pay the taxes as an individual; a personal deduction for independent contributions, so as an individual, if I am rich and can put it in, I get a deduction. If you are making $35,000 you might want to put it in, but where are you going to get it? Between paying for rent and a car and buying food for your family and clothes and trying to help one of your kids go to community college, where are you going to get that $3,000? Where are you going to get that deduction for independent contributions? It also allows tax-free accumulation of interest, exclusion from estate taxes, and penalty-free withdrawals from the MSA's at 59\1/2\. The reason this bill is here is to give these tax breaks. That is why it came though the Committee on Ways and Means. Companies can offer this kind of thing today. They can say, hey, look, let us get out of the regular insurance plan. I will buy you the high-cost deductible. I will put some money in the medical savings account for you. They can do it today, but they cannot get these tax breaks today. This bill is a tax-break-for-the-rich bill. It is a medical sheltering account. Contributions to the MSA's are deductible tax purposes when made at the time you put them in, and the amounts in the account accumulate tax-free. If this year you put in $4,000, you do not spend it, next year you put in $4,000, it just keeps accumulating, and all the interest is tax-free. This is similar to the way tax benefits are provided for IRA's, the Individual Retirement Accounts, before the Congress limited the deductibility of IRA contributions. What is interesting about this, it is under the guise of more affordable health care that Republicans are pushing MSA's, which do nothing for health care whatsoever. They destroy the insurance pool, they put people at risk who do not understand how it works, but they are a better sheltering device than individual retirement accounts, really, for the following reasons: IRA's merely provide deferral of your taxes on contributions, but MSA's provide complete tax forgiveness when the amount is used for medical expenses. No. 2, the IRA provisions contain penalty taxes to force withdrawals after age 70 in order to prevent excess accumulations in IRAs. The MSA provisions do not include any penalties, so individuals could indefinitely accumulate monies in their accounts. No. 3, wealthy individuals would have incentives to pay their medical expenses from other sources. Since they have $100,000 or $200,000, they put the $4,000 in there tax-free, why not pay the health care benefits out of something else, because making the payments out of the MSA would reduce the amount of assets receiving the favorable tax treatment. Put the $4,000 in there, forget about it, it goes up and continues to make money, and meanwhile you pay it from other monies that you have. A wealthy individual attempting to maximize their tax advantage would be likely to use other assets to pay their medical expenses. The forth reason is that IRA's are subject to the estate tax. When you die, the government looks at your IRA's and says, we are going to tax a certain amount. MSA's are not. I really find it difficult to think what the rationale for that benefit is. How does exempting funds in an MSA from estate tax relate to encouraging tightly targeted purchase of health care? What is the relationship between exempting from estate tax when you are talking about health care costs? There is clearly no connection except to give a break. There is no medical policy argument for excluding the MSA's from the estates of the holders of these MSA's. People do not need medical self-insurance reserves when they are dead, nor do their surviving spouses need their accumulated reserves free of tax. This estate tax treatment was not inadvertent. It did not just happen. It was elaborately thought out because of the phobia many Republicans have and small business owners have about estate or transfer taxes. The estate tax affirmatively encourages rich people not to use that MSA for medical purposes by giving them roughly a 30 percent advantage for letting the money accumulate in that account. It becomes really an IRA. They are still going to pay their deductible over here out of their pocket, but this money is going to go up tax-free and can be drawn out tax-free. This provision undermines the credibility, in my opinion, of the whole MSA propoal. All of thee new tax sheltering opportunities will result in a drain on our Federal Treasury at a time when the majority in this House says they want to balance the budget. The Joint Tax Committee, House and Senate Joint Tax Committee, controlled by the Republicans, both the House and Senate, says that MSA's will drain the Federal Treasury of more than $2 billion over the next 7 years as the increased savings by the wealthy are placed in MSAs and are therefore sheltered from Federal taxation. What is worse, the Republicans plan to pay for the budget shortfall caused by the MSA's by taking billions of dollars out of Medicare. Here we are, back to our old friend. We have been saying all along that they want to cut $270 billion out of Medicare to pay for their tax breaks. Here is one of them. The MSA costs $2 billion, and it is coming out of the hides of the health care for senior citizens. That is another reason why this medical savings account is not a good idea for the American public. Mr. Speaker, I find using Medicare as a piggybank to pay for those MSA tax schemes is particularly disingenuous, considering the fact that the Speaker and the Republicans continue to claim they want to save Medicare. They are taking money away from Medicare to pay for this kind of scheme. I wash that the Speaker or somebody on the Republican side would come down here and explain how taking money out of Medicare to pay for MSA's helps save Medicare, how taking money away from Medicare is going to make it better. I thought the problem was they were short of dough, and here they are taking another $2 billion out for this kind of scheme that really benefits a very small part of the society. It seems very odd to me that by taking the billions from Medicare to pay for a tax shelter from which most Americans are priced out of, most Americans are not going to be able to put money in that medical savings account, but the Speaker and the Republicans are acting in the best interests, they say, of the American people and Medicare. In addition to robbing Medicare, MSA's will clearly only appeal primarily to the wealthy. The Republican-controlled Joint Tax Committee, again, and this is not some lefty group way out there, or some liberal Democrat group that says this, this is a committee run by the Republicans. It is the Joint Tax Committee. It is one of the most conservative staffs in the whole Congress. They estimate that MSA's will appeal to less than 1 percent of all the people in this country who make $30,000 or less a year, even though those families make up 50 percent of the country. One percent of half the country will be able to take advantage of this, because they do not have $4,000 laying around on the dining room table to put into an MSA. That is ridiculous. Anybody who would stand out here and seriously proclaim this is something that a lot of people can take advantage of simply has never had any kind of difficulties with money. In contrast to the 1 percent below $30,000, 12 percent of those buying MSA's will have incomes over $100,000. Even though those kinds of people in this country only make up 5 percent of the taxpayers, they will have 12 percent of the benefit. Mr. Speaker, all these statistics show that MSA's are biased toward the healthy, the ones who do not expect to ever have to use it, or the wealthy, because thousands of Americans do not have the thousands of dollars to put away each year, and cannot afford to incur the substantial out-of-pocket costs that would be created by this medical savings account and these high deductibility catastrophic plans. On a final note, some consistency needs to be required of politicians. Both the chairman of the House Ways and Means Committee and the Republican majority leader have condemned the current tax structure. They have called for a flat tax: ``We have to get a flat tax. Let's get all these deductions, all these tax shelters, let's get all of that out. We'll charge everybody a flat 15 percent.'' I think the phrase the majority leader used was they want to tear out this present system by its roots so it will never come back. Yet when it comes to MSA's, they are willing to kill this bill that the Senate passed and the House passed by insisting on MSA's because they want to milk the current system in every way possible to benefit their wealthy constituents. If our current tax system is replaced, many of the tax incentives that I just outlined under the MSA's will no longer exist. So 1 minute they are out here saying ``Let's rip out the system and have a flat tax'' and on the next day they are saying, ``We're not going to pass health care reform unless you stick MSA's in because it's got big benefits for our friends.'' The House leadership is holding up the enactment of the health care bill that Senators Kassebaum and Kennedy put together, simply over this issue. The losses that will result from MSA's far exceed the gains. MSA's will drain the health insurance pool of the healthiest and wealthiest. It will cost the Government more than $2 billion at a time when we are supposed to be focusing on balancing the budget. MSA's do nothing, absolutely nothing, to address the problems of affordable health care. Nothing. They are just another way to give a tax break to the wealthy. For the Speaker and the Republicans to threaten the passage of the Kennedy-Kassebaum health care bill by insisting on the inclusion of MSA's is wrong. It is poor leadership, it is bad politics and, worst of all, it is terrible public policy.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Chairman, I rise in support of the Furse amendment to prohibit the Forest Service from spending any fiscal year 1997 funds on the implementation of the timber salvage rider. If passed, Representative Furse's amendment would not limit the amount of green tree or salvage logging on our national forests. The Furse amendment simply would ensure that timber sales in our Nation's forests comply with the Nation's environmental laws. As many of you are well aware, the timber salvage rider passed the House in 1995 under the guise of improving the health of the Nation's forests by harvesting dead and dying trees. Unfortunately, the rider was purposely engineered to circumvent existing environmental standards so as to allow the clearcutting of old-growth trees. By circumventing existing environmental, health, and safety standards, the timber salvage rider jeopardizes the critical habitat areas of endangered wildlife. Other negative impacts resulting from the environmentally negligent rider include the harming of already ailing fisheries and the threatening of the water quality of our Nation's streams and rivers. The timber salvage rider has economic consequences as well. By threatening the health of the forests and the fisheries, the rider is in turn threatening the sports, commercial fishing, and the tourism industries, all of which are economically important to the Pacific Northwest. Since January 1995, this Congress repeatedly has attempted to roll back the Nation's environmental, health, and safety standards. Passage of the Furse amendment will help reverse this destructive trend.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, last night we passed a budget resolution in this House which is predicated on the passage of welfare reform. I sat in the Committee on Ways and Means as we took away the economic security for children and women in this country. I want to use just the example of the State of Washington. If today every one of the 100,000 people on welfare said, ``I am going to quit being shiftless and not caring, and I am going to go down and get a job,'' they would meet the 173,000 people who are on unemployment in our State. If we count all those people, it is about 200,000 people in the State of Washington today that do not have a job. Last year we created people 44,000 jobs. Those 44,000 jobs clearly are not going to take care of the 200,000 people who would be standing in line asking for a job. Their children would have no guarantee of food and no guarantee of health care. That budget resolution was inhuman to kids in this country.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Chairman, I rise in support of H.R. 2754, the Shipbuilding Trade Agreement Act, and in opposition to the Bateman amendment. I think the chairman and the ranking member have made the arguments, but I think it is important to say that this implements under U.S. law an international agreement that sets out the most effective subsidy discipline ever included as part of a multilateral trade agreement. It also creates under U.S. law an unfair pricing remedy similar to our antidumping laws for ships engaged in international trade. Mr. Chairman, this bill is unique. It has bipartisan support both from the Bush and the Clinton administrations and from the Democrats and the Republicans in the House of Representatives. Supporters of this legislation include a diverse coalition of maritime interests in this country, including the Shipbuilders Council whose membership includes 17 companies operating 44 shipyards in 13 States. This agreement will create the necessary conditions for our commercial shipyards to begin to compete once again in the world shipbuilding industry. Foreign subsidies have completely forced U.S. shipbuilders out of the international market to the point that today U.S. yards have less than 1 percent of the world market. The Bateman amendment is inconsistent with the agreement and will kill it and should be rejected. If we do not pass H.R. 2754, we will be back to where we were in the 1980's. Our trading partners will continue their subsidizing ways and we will continue to engage in predatory pricing practices with impunity. Mr. Chairman, I urge my colleagues to reject the Bateman amendment and pass H.R. 2754.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I want to commend my colleagues for bringing this resolution. The gentleman from Ohio [Mr. Sawyer] and I were in the car starting home, and he said to me, ``Should we go and say something?'' And I said yes, because I thought of Dietrich Bonhoffer, who was a Lutheran minister in Nazi Germany, who, when they came, he said: When they came for the trade unionists, I did not speak up; when they came for the Catholics, I did not speak up; when they came for the Jews, I did not speak up. When they came for me, there was nobody left. If we do not speak up for each other, none of us are free in this country.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I think the President has made it pretty clear that if my colleagues on the other side of the aisle put the medical savings accounts in, and this proposal is not some kind of pilot program. The gentleman knows that. It goes for 3 years, then it becomes open to the whole world. My view is that the gentleman is going to continue and----

Mr. McDERMOTT. Mr. Speaker, will the gentleman yield?

Mr. McDERMOTT. Mr. Speaker, I thank the gentleman for giving me an opportunity to respond to that. On our side, we figured out that we have to make compromises to get things through.

Mr. McDERMOTT. Mr. Speaker, will the gentleman yield?

Mr. McDERMOTT. Mr. Speaker, what we are engaged in here today is basically a sham. The Republicans have met by themselves and decided what this bill is going to contain. And much of what the gentleman from Illinois [Mr. Hastert] says is correct. There are a lot of good things in this bill. But, Mr. Speaker, this proposal is designed to be vetoed by the President. Now, if we answer 10 issues and all of them are good, we have portability, and we make it so that preexisting conditions cannot prohibit consumers from getting insurance and so forth, if we had 10 issues that were good and we knew we could get them, but we had one other issue that the President said, ``If you put that in, I am going to veto it,'' why would we put it in except unless we wanted the President to veto it? The Republicans have no intention of passing this bill. They stuck that poison pill of medical savings accounts in simply because they know the President has given his word. He has told them in advance, ``If you put that in, gentleman and ladies, I am going to veto this bill.'' So, they do it anyway. Now, the question then is why, after 2 years of fighting, do they have a secret conference committee make the decisions and put a bill out here on the floor that they know the President is going to veto? Mr. Speaker, my answer is that they have no intention of doing anything to fix the American's problem with health care in this country. There are now 44 million people in this county, and the number is growing every single day, and yet they refuse to make the very small changes of portability and getting rid of preexisting conditions. In fact, Mr. Speaker, they are going to kill the mental health provisions. As a psychiatrist, I know that people who have mental health problems in their family have a very difficult time getting coverage. And this bill that the Senate put together was a good proposal. It ought to be accepted, but, in fact, they have put in a poison pill.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, during rollcall votes No. 222 and 223 on H.R. 3364 and 3400 I was unavoidably detained. Had I been present, I would have voted ``yea.''

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I want to thank the gentleman from New Jersey for coming out here day after day and bringing this issue to the attention of the American people, because I think there is lots of confusion. I was just sitting in the Committee on Ways and Means today, and we had before us the Secretary of the Treasury, Mr. Rubin, and the Secretary of Health and Human Services, Dr. Shalala, to talk about the trustees' report. And everybody is waving the trustees' report around now and talking about that this is the end of health care for senior citizens and everybody should be worried. A little history needs to be brought out, people need to understand. Since the program was started in 1965, there have been 27 trustees' reports. Every year, a trustees' report, that is the job of a trustee, is to say how much money do we have and how long will it last? So each year, they look at the money, they look at what they are spending, and say this is how long it is going to last. At one point we had only 2 years to go, and it would be all gone. At another time, it was 17 years. So there have been all kinds of reports. They never were a crisis until last year when the Republicans took over the House of Representatives and said, we need some money for a tax break. So they grabbed this trustees' report and instead of doing what we had done since 1965, which was to say there is a problem, we are going to have to make some adjustments. And we made them. Every year, no fanfare, nobody ever heard about the trustees' report, nobody ever heard that the sky was falling. On a bipartisan basis, we made changes in the Medicare structure that would have carried it on as we intended to do. In fact, the Democratic members of the Committee on Ways and Means came up with a proposal last year that for $90 billion in adjustments in a variety of different places, without hurting the basic program, we could protect Medicare until the 2005, for 10 years out into the future. Now, the Republicans insisted that it be only their way of adjusting the program or there is going to be nothing. It is sort of their way or the highway. And in insisting on that, we have not done anything. So now we come to the trustees' report that was released yesterday, discussed in the Committee on Ways and Means today; everybody is going around acting as though the Earth is ending, because it is now 1 year less. Instead of 7 years last year, we only have 6 years worth of money in the pot to pay bills to 2001. Now, if they have made the changes last year that we recommended for $90 billion, we could have been out to 2010. But their delay has actually made it worse. It is sort of like if you have a problem in your car, you hear a clanking noise and say, well, it is still running, I am not going to bother checking the oil and you just keep going until finally the motor freezes up, and then you say, oh, my goodness, if we had put the oil in last year, we would have prevented that. They have not done the preventive things that last year they could have done for $90 billion. Now, to make this problem worse, or to make it even more laughable in some ways, last year they wanted $270 billion out of Medicare so that they could have a $245 billion tax break. They needed the money. Some of it was for Medicare, but most of it was to be spent on a big tax break. This year they say, you should be grateful. We are only going to take $176 billion out of Medicare. It is obviously way more than is necessary to do the job. The President has made a proposal of $124 billion in changes. So if you want to talk money, they are still asking for money that they are going to use in the tax break. But the really insidious thing is the kind of changes that you have been talking about in the Medicare Program. If you take a senior citizen, the average senior citizen on Medicare is living on $11,000 a year. Now, there is not a whole lot of slush in $11,000 a year in this society. There are 11 million widows living on less than $8,000 a year. Their husbands have died, they are living on a Social Security check. The minimum is about $8,000. What the Republicans are saying is we are going to give you $4,800 this year to go out and buy a health program. That is about what it costs. This year they could buy exactly what they have had. Next year the inflation by the insurance industry, they expect it to go up by 7 percent. But the Republican proposal says, ``We're only going to give you a 3-percent increase.'' That 4 percent that they do not give them has to come from somewhere. It either has to come out of that widow's $8,000, or she has to turn to her children and say, ``I can't afford to buy the same health care package.'' This argument about whether it is an increase or a cut, yes: they are increasing it 3 percent. But they are not giving you enough to buy it. It would be as though I said to you, ``A quart of milk is 99 cents, here is 99 cents, go buy a quart of milk.'' Next year a quart of milk is $1.10. I say, ``Well, Frank, I'm going to give you $1.05. Go buy a quart of milk.'' You obviously cannot buy a quart of milk if you do not have the amount of money that is necessary to pay for it. The cut is that they are not giving them enough to keep up with inflation. By the end of 5 years, it is going to cost $1,000 more out of pocket. That means grandma has to open her purse and find another $1,000 to put with her Medicare money to buy the same program. That is by the insurance companies' estimates. That is not some wild group out there that is trying to prove the Republicans are wrong. The insurance companies are very tightfisted actuaries who look at that and they say that is what it is, and they are not providing enough money to buy the same package. So now that you have that picture in mind, the Republicans offer them an alternative. They say, ``Why don't you go into an HMO. An HMO will take whatever we give you and then you won't have to pay any more money out of your pocket.'' So they have financially jerked those people around. They have either got to take $1,000 out of their pocket or join an HMO or get it from their kids. Those are their three choices. If you go into an HMO, I do not think everybody has agreed that you are going to be able to choose your own doctor. There is every indication in HMO's that if your doctor is not on the list, you are going to have to quit seeing that doctor. For somebody who is 25 years old, that does not seem like a big deal, because when you were 25, who had a doctor? I did not have one when I was 25. At 45, maybe you see a doctor once in a while. At 55, you see him a little more often. I see him a little more often. When you are 80 or 90 like my father, and he has had a doctor following his heart medication for 20 years, to suddenly say to him, ``Well, Mr. McDermott, you cannot have your doctor, you're in this HMO and your doctor isn't a participating doctor, so choose a new doctor.'' If you are 90 years old, that means you have got to sit down with somebody and tell your whole history and explain it, and what medications have you been on and how did it affect you. All of your past in a doctor's head is lost. That is why being able to choose your own doctor is important. What you want is somebody who knows your history. You do not want to go to somebody who never saw you before when you are 90 years old and have to explain your whole history and what has happened to you. So that financial incentive that says, ``You can stay in the regular Medicare Program, it's going to cost you $1,000 out of your pocket, or go to this HMO and you might not get your own doctor,'' those are the choices that the Republicans are offering senior citizens. My view is that is not necessary. I looked very carefully at the Medicare Program when I put a bill in cutting $90 billion. I am a physician. I would not put together a program that I thought would hurt the quality of health care that people get. But you do not need more than $90 billion in cuts. All the rest of that money is being cut so that they can use it to give away in a tax break. The issue that you were talking about as I came in here is one that I think is even more difficult to understand, and that is this whole question of pharmaceuticals. When you get to be old, you go to old people's houses, you will find on the dining room table a plastic box that has a bunch of little boxes in it. One is for in the morning, one is at lunchtime, one is in the evening and one is at bedtime, and they have their pills in them. If they are like my father and mother, they spend $220 each month at the pharmacy. They have no way except to pay that out of their pocket. They are already paying enormous amounts out of their pocket. That is why this $1,000 coming in out of their pocket to get this same benefit package to pay the doctor, to pay the hospital, to pay the x ray, to pay the blood work in the laboratory and so forth is such an impact. It is not as though they are not paying something now. If your father is paying $200 a month for pharmaceuticals, and then to pay $1,000 more a year, now $1,000 a year, divide that by 12, that is like $80 a month more that they have to reach in their pocket. What does $80 mean? Well, if you make $100,000, $80 is not all that much. You could probably absorb $80. But if you are living on $8,000 a year, like 11,000 widows are in this country, $80 is about 3 bags of groceries. It is a question. Do you want to go to the grocery store and get nutritious food, or are you going to have to send it off to buy your health care plan? Those are the kinds of choices. And the baby boomers in this society, the people in the generation under me, I am 59. So, if you are about 55 or so, below, you are going to have your mother coming to you asking, or maybe not telling you and then you will find it out some other way that she is not going to the doctor, not buying the medication, or she will ask you and you are going to be between the vise of helping your mother and helping your own kid in the community college. I mean, people in their forties, their thirties, forties, fifties are caught between their parents and their children. You care about them both. Which one are you going to help if you can only help one? ``Well, mother, I'm sorry, you're old, you will have to deal with it yourself because I have got to help my kid.'' No; you cannot say that. Then you say to your kid, ``I can't help you through college, you're going to have to make it on your own, good luck, because I have to help my mother.'' That is the vise that this proposal puts middle-class, middle-aged, people in. People in my generation have never spent a dime, I have never had to give my parents one single dime for their health care. Medicare for 30 years has taken that issue right off the table. Along comes this proposal and says we are going to put it back on the table and each family can find it themselves. Now some can find it. My mother and father have four kids, all of whom went to college, all of whom have good jobs. We can find a little extra to help our mother, but what about people that do not have that? Think about that. Think about the guy who is just laid off at 50 and his mother is 80. He cannot help her. So it is this kind of thing, and I think that you are doing a real public service by coming out here and raising these issues, because the trustees' report is simply an annual report and we are going to correct it. We are not going to walk away from this. The Republicans would not dare walk away from this without fixing this program. They have no chance with the American public if they do not step up and fix it. They ought to drop the whole business of cutting taxes and deal with Medicare.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I rise to salute yesterday's U.S. Supreme Court decision prohibiting States from singling out specific classes of citizens for discrimination. And I rise in opposition to recent attempts by this body to restrict the rights of certain groups of citizens. Yesterday's decision is long overdue and cannot be ignored. We have heard much rhetoric about State autonomy in this Congress. Yesterday's ruling affirms that individual States may not deny anyone the exercise of rights guaranteed by the Constitution to all. Many in our society cite religious beliefs as validation for withholding full constitutional rights from gays and lesbians. This is not a religious issue; each religion's practitioners are free to conduct themselves in accordance with their beliefs. This is a civil matter--an issue of whether or not all American citizens are treated equally under civil law. In the last few years, we have witnessed an unprecedented campaign to inject fear and hatred into public discourse. It is time to stop this rhetoric and to withdraw the antigay and anti-lesbian initiatives currently proposed in the Congress. It is time to stop pitting one group of citizens against another. It is time to create a climate of acceptance for the diversity we find among our citizens. Let us focus on bringing people together and fostering relationships in which people care for each other. Let each citizen decide whom he or she loves--not the Federal Government.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, due to circumstances beyond my control, I was unavoidably detained yesterday and missed the following rollcall votes. If I had been here, I would have voted in the following manner: Rollcall vote No. 180--no. Rollcall vote No. 181--yes. Rollcall vote No. 182--no. Rollcall vote No. 183--yes. Thank you for your assistance in this matter.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, today, I am introducing the Medical Privacy in the Age of New Technologies Act. This legislation will ensure that a patient's personal health information will not be disclosed without that patient's consent. For the first time, patients nationwide will have control of their medical records and have the right to deny outsiders access to their private medical information. This sounds like a simple principle with which the medical community should already comply. Unfortunately, current medical privacy guidelines are inadequate and vary from State to State. In fact, the papers are filled with horror stories about insurers, banks, and employers misusing health information to discriminate against individuals. While businesses gain this medical information to the detriment of the rest of us, only 28 States, including Washington currently allow people even to examine their own medical records. The legislation I am introducing today will give individuals the right to know what is being done with their medical information. It will place in the individual's control what is done with that information, who sees it, and why. In addition to being inadequate, today's privacy standards fail to address the impact of new technologies on our medical system. These new technologies deeply affect the privacy of health information. This bill addresses the threats to an individual's health information from new genetic technologies, and from the computerization of medical records. Genetic health information is an especially sensitive part of a patient's medical record. As knowledge increases about the genetic component of many common diseases, so does the possibility that information in an individual's medical file will be used to deny entire families health care coverage. One recent study documented 200 cases of healthy people being denied jobs, insurance, the right to adopt, and educational opportunities because they either had or were suspected to have a genetic predisposition for a disease, even though they did not actually have the disease. Computers have revolutionized the way in which an individual's medical information is collected, stored, and disseminated. Without adequate enforceable standards, this information can easily be misused to breach the privacy rights of patients and lead to several forms of discrimination. Now, I don't want to get into horror stories which already have occurred in the private sector, but I do want to warn you that Congress has yet to realize the importance and consequences of computer technologies in the medical system. Just last month, the House passed Administrative Simplification provisions as part of the Kennedy- Kassebaum health insurance reform bill. These provisions would force doctors to computerize sensitive patient medical records to make it easier for insurance companies to bill patients. Yet, in making it easier for insurance companies to maximize their profits, Congress failed to attach adequate privacy protections. New technologies have the potential to improve the quality of health care, to help doctors effectively treat their patients, and to lower the cost of health care. However, strong medical record privacy protections must be in place to ensure that such technologies are not misused to discriminate against patients and their families. I believe this bill gives patients the right to protect their personal health information from being misused and prevent them from feeling the wrath of discrimination to which the erosion of medical standards could lead.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, we are now probably talking about what we should have started this discussion with, and that is the whole of how the economy is doing. The question we have to ask ourselves, Mr. Chairman, is whether or not anybody believes a Republican and their analysis of the economy. Most of us on our side of the aisle have some doubts, but occasionally the light goes on on the other side, and somebody makes a statement that makes sense. In February 1996, Robert Dole, who just left the Senate because he could not cope with these radicals on the other side of the aisle, said, ``It is true, as some have said, that our economy is the strongest it has been in 30 years.'' If Members do not believe Bob Dole, if they do not believe Bob Dole, Members can listen to what they are now going to say. But the fact is that the economy today is the strongest that it has been in 30 years. The second chart which I will put up here, do Members believe the Congressional Budget Office? We have had a discussion in this House over and over again as to whether or not we can balance the budget in 7 years, according to CBO numbers. Everybody on the other side said that the CBO numbers, they are absolutely correct. Mr. Chairman, when President Clinton took over, if we follow this line, that is what CBO said was going to happen. The deficit was just going to go out of sight. As a result of the policies that the President instituted in 1993 and 1994, we now see that the deficit is coming down, and the President's projected budget will take it down in the course of 7 years to zero. The President has done what has to be done in terms of dealing with deficit reduction. The fact is we still have real problems in this economy. The middle class, their incomes have been stagnant for 20 years. It did not start when President Clinton came in. It started 20 years ago. The lower classes have been drifting down. Their incomes have actually been falling in real money. We have serious problems. We have people out there who are permanent temporary employees: our children whom we sent to college, who accumulated debts, who have come out of those colleges in debt, and cannot find a permanent job. The largest employer in this country is Manpower. People work 40 hours a week, they work 50 weeks a year at $10 and $15 an hour in my own city of Seattle, and they do not have health care benefits, they do not have a pension, they cannot buy a house. If you take a manpower pay stub into a bank and try to get a loan to buy a house, you are laughed out of the place. You simply cannot get a loan if you have a temporary job. There are thousands of people. In my city, in the music industry there are no permanent jobs. Seattle rock music, everybody knows about it. They know about Nirvana, they know about Pearl Jam. They know all those companies. Those people, none of them have permanent jobs. So there are real problems in this country, because we have people with a temporary job trying to pay off school loans. It is no wonder that people are anxious. But the problems are not solved by the policies in the Republican budget. The Republican budget wants to jerk the safety net out from under people. It wants to take away Medicare so that people in their middle years, who are trying to help a kid get through college, are suddenly going to have to help their parents with their health care bills. They want to take away Medicaid, which guarantees nursing home care for senior citizens in this country, and want to throw it back onto the families and say, ``You come up with the $30,000 a year to take care of your mother in the nursing home.'' Mr. Chairman, if you have to do that in the middle class, how are you going to help your kid go to a community college or pay for going to a university? Those are safety net issues. The President said, it was a very interesting thing, he came out to Seattle a few months ago, 2 months ago, and said, There is enough money on the table to balance the budget. We have agreed, there has been enough agreement between the House and Senate and the Presidency on the numbers, but we will not balance the budget if your intention is to destroy the safety net. That is the essence of this budget debate. It is not about numbers. These numbers, we could argue about numbers, $50 billion here and $25 billion there and whatever. The issue is whether or not the Federal Government is going to be able and willing to provide a social safety net for the people in this country, whether we are talking about educational loans or we are talking about Medicaid for nursing homes or Medicare for senior citizens. Whatever we are talking about, it is a question of whether the Government should be involved in providing that safety net and trying to help people make it up. We have done it in the past, we will do it again, but not with the policies that are in this budget. Mr. Chairman, I think that this budget resolution makes no sense. The people of this House ought to reject it and go for a budget that makes some real sense in terms of helping people make it up the ladder, not pull the bottom rungs out from under them. That is what their budget actually does.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I am inserting for the Record a copy of the enclosed letter sent to Mr. John Linder. House of Representatives, Washington, DC, May 9, 1996. Hon. John Linder, House of Representatives, Washington, DC. Dear John: I respect the right of every Member to communicate with colleagues via ``Dear Colleague'' letters, but your letter of May 8, 1996 goes beyond the pale. Your statement that I ``would use [my] position on the Ethics Committee to promote these phony charges after taking money from'' a fundraiser contains the implication, or at least the innuendo, that I committed a crime--a statement that is false and actionable. Of course, as you must know from your own experience, the money contributed at fundraising events does not accrue to me personally but to my campaign, and it did not come from Mr. Jost but rather from campaign contributors--all legally reported under the FECA. Further, your contention that I am obligated to disclose ``these relationships'' when performing my duties on the Ethics Committee is incorrect. The rules governing this subejct (Ethics Committee Rule 7) do not require or even suggest that a Member on the Committee disclose the identify of this fundraiser, or that he recuse himself in instances in which a fundraiser has exercised his First Amendment rights in his personal capacity on a subject within the public domain. I expect the rough and tumble of political outbursts but I will not tolerate disemination of false and defamatory statements such as those that you are circulating. Please be assured that I am fully prepared to take legal action if you do not immediately cease and desist these activities. Sincerely, Jim McDermott.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I am pleased to welcome the Wound, Ostomy and Continence Nurses Society [WOCN] to my congressional district, Seattle, WA, on June 15-19, for their 28th annual conference. The theme of the conference, ``The Future is Ours to Create,'' will focus on future opportunities and challenges relating to the changing and expanding role of enterostomal therapist [ET] nurses and other nurses specializing in wound, ostomy, and continence care. Founded in 1968, the WOCN is the only national organization for nurses who specialize in the prevention of pressure ulcers and the management and rehabilitation of persons with ostomies, wounds, and incontinence. WOCN, an organization of ET nurses, is a professional nursing society which supports its members by promoting educational, clinical, and research opportunities, to advance the practice and guide the delivery of expert health care to individuals with wounds, ostomies, and incontinence. In this age of changing health care services and skyrocketing costs, the WOCN nurse plays an integral role in providing cost-effective care for their patients. This year's Seattle conference will provide a unique opportunity for WOCN participants to learn about the most current issues and trends related to their practice. I am honored that WOCN has chosen Seattle to host its conference and wish them every success.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I include for the Record an editorial from the Seattle Times from April 12, 1996, the title of which is ``A Republican Floor Show Only a Cynic Could Love.'' It is written by a woman named Terry Tang. [From the Seattle Times, Apr. 12, 1996] A Republican Floor Show Only a Cynic Could Love (By Terry Tang) If the House Republicans intended people to tune them out as publicity-mad buffoons, they've done a terrific job. The latest example of their effort is the upcoming vote on a constitutional amendment to require a two-thirds vote of Congress to increase taxes. A floor debate and vote will be staged on Monday, April 15, tax day. Don't be surprised if you've heard nothing about this. Neither have many members of Congress who've been on Easter break for the past two weeks. The House Judiciary subcommittee held a hearing on an earlier version of the Tax Limitation Amendment last month. That version was so preposterously worded--it would have required a supermajority in Congress to alter the tax laws in any way and would have applied even to raising tariffs on foreign products--that the amendment's sponsors decided it had to be reworked. So on March 29, the day before the Easter recess, the House Rules Committee cobbled together and approved a totally new amendment more opaque in meaning than the original. No one expects a serious constitutional debate next Monday. But rest assured, there will be plenty of on-camera time for congressman with sagging poll numbers. Well before Republican leaders had the amendment language in hand, they had decided that April 15 was the perfect time to call a pep rally. How better to resuscitate the Contract with America than with a floor show featuring a spanking new constitutional amendment as prop? As part of the coordinated media blitz, the Gingrichities were told to hold anti-tax town meetings in their home districts. The campaign is as contrived as a Burger King- Pocahontas promo. Rep. Randy Tate of the 9th District, for example, dutifully held two town hall meetings this week with special guest star Grover Norquist, president of Americans for Tax Reform, an anti-tax group that has made the constitutional amendment its top priority. There's no way to separate the fakery from the legislation. But who nowadays seriously expects Congress to place deliberation above crass symbolism? The tax amendment would even obstruct the tax reforms that Republicans have embraced. The GOP leaders apparently are so cynical--about both the fate of the amendment (the Senate is expected to put on the brakes should the House approve the thing) and meaningful tax reform--that they have no trouble promoting two ideas that are pretty much mutually exclusive. The amendment language requires a two-thirds vote of Congress on tax measures unless the act does not ``increase the internal revenue by more than a de minimus amount.'' The hurdle would make routine tax legislation nearly impossible. There is no definition given of ``internal revenue.'' Arguably, the only things not covered by the term are foreign tariffs, all other taxes being internally generated. So increasing user fees based on sound freemarket principles-- such as national park entrance fees or grazing fees--would be subject to the limitation, as would closing loopholes and shutting down tax shelters. But these are minor objections compared to the conundrum that ought to stop supplysiders cold. The amendment would apply to any legislation that increases revenue to the federal government; it does not deal with increases in tax rates per se. Yet, the first principle of Reaganomics (and the rationale at the core of flat-tax schemes) is that cutting taxes--be it capital-gains taxes or income taxes--unleashes entrepreneurial energies that increase economic growth and therefore increase government's total tax receipts. One argument to cut capital-gains tax rates is precisely that a cut would increase revenues in the short run as investors rush to liquidate assets to capture their capital gains. In a perverse twist, such a tax cut would be subject to two-thirds approval of Congress also. The House leadership is well aware that enforcing any supermajority requirement on tax matters is unworkable. On the first day of Congress last year, the House, in a fit of revolutionary fervor, adopted a rule requiring a three-fifth majority on any bill raising federal income-tax rates. The rule has turned out to be only a gimmick. The Republicans publicly touted their anti-tax scheme as a promise kept--and then silently waived the rule whenever it proved inconvenient. The House's Contract with America Tax Act inadvertently raised some tax rates while cutting others, and so needed a waiver. The budget reconciliation bill to cut the deficit raised a few rates, thus requiring another waiver. The House's Medicare bill, by raising premiums on wealthy seniors, needed and got a waiver, as did the new health insurance reform act, which would impose a tax on some withdrawals from medical savings accounts. The income-tax rule has nothing to do with governing, and everything to do with sloganeering. The proposed constitutional amendment is more of the same. When the Republicans were the minority, reducing policy debates to bumper stickers came easily. They've yet to switch out of that mode. If they, as the party in power, don't care about the substance of legislation, who will? Somebody tell these people they're being paid to do more than pose for campaign spots and C-SPAN. I say reading it when I got to my office today and thought somebody has got to talk about this issue. Some weeks ago my son called me. He is in business school in California and asked me about something that was happening here in Washington, DC, and I proceeded to explain to him what I thought would happen. And he said, after I had finished, ``Well, now I know what the cynics think.'' Mr. Speaker, I objected to that. I said, ``No, I am giving you a realistic view of what is going to happen here in the Congress,'' and he said, ``Dad, don't get excited. There were the idealists in Greece who wanted things a certain way, and then there were the cynics who actually looked at things as they really were and dealt with them.'' He said, ``Cynicism has gotten a bad name because it has come to mean that we do one thing and try and create the impression that something is happening when, in fact, something else is happening, and the people then get cynical about what's happened.'' What is going to happen today is the height of political cynicism because of what will be created. In fact, they choose the exact time they are going to start to debate, when folks in California are able to get to their TV's. They are not going to do it here at this time of day when people are at work in California. They are going to wait until later in the day. The vote will be taken at 9 o'clock tonight, 6 o'clock, when everybody is sitting down and eating, in California. This is a timed debate put on simply to make the American people think that we are going to control taxes. Mr. Speaker, nothing could be further from the truth. As my colleague, the gentleman from Virginia, [Mr. Moran], simply pointed out, I am a member of the Committee on Ways and Means. When this House came into session under this leadership, they said we are going to put in a rule that requires a 60-percent vote every time we raise taxes. So, through our Committee on Ways and Means things would come, and we would raise our head and say, ``Hey, how are you going to get the two- thirds vote for this out on the floor?'' And they said, ``Well, we're going to waive the rule.'' Three times, perhaps four times, I am not absolutely sure, they have waived that rule when they have brought things out here on the floor. Now today they are going to come out and say we are going to pass a constitutional amendment that will prevent us from doing exactly what we have done in the last year and 3 months that the Republicans have controlled this House. They have no will to do what they believe. They simply want the people to cynically believe that they want that to happen. But they are never going to do it. Now, cynicism is destructive in this society for one reason. People watching this debate are going to say to themselves why should I go and vote for that bunch of yahoos, whoever he is. I saw a bumper strip coming in from the airport last night that said, ``Reelect nobody.'' Reelect nobody? Consider what that means. That means everybody on the floor of the House is going to be subject to people walking around thinking, well, if they were there under that kind of cynical baloney, I do not want them, and my view is that the American people are made cynical by this kind of behavior. There are some absolute realities that must be faced in this country if we are going to be serious. Now, the first thing that this amendment, if it were to go into place, would say, is that all the cuts, anything that is going to happen in this country, is going to mean we have to reduce spending. We can never raise revenue, we cannot because two-thirds--we did not even get two-thirds on this floor when we were saving Social Security. Two- thirds of the Members did not vote to support Social Security. So all the old people who might be thinking about this, just remember, Mr. Speaker, they got to understand that we could not have saved Social Security on the floor of the House of Representatives in 1983 because there were not two-thirds of the Members who would vote for it. So what we are saying here today is that we are going to cut things, and all the programs that people are now resting on, Social Security, Medicare, Medicaid, aid for student loans, all those things will be subject to a two-thirds vote. No matter what is going on in the world, no matter what the circumstances of our economy, no matter what happens, it will take two-thirds. Now, as you heard the gentleman from Virginia [Mr. Moran] say, that means the Senators from 17 States can block whatever is going on and the majority will no longer rule.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I wish that we were out here voting on the Kennedy-Kassebaum-Roukema bill, but we are not. HIAA, the Health Insurance Association of America, did not want that bill to come to the floor, and so we have this bill we have before us. This bill was written by, or at least for, the insurance industry. The first thing in it is data collection. I mentioned that under the rule, they collect data, they have electronic clearinghouses that can shift that information. There is no privacy protection in this bill whatsoever. This is the first time the Federal Government has gotten into collecting health care data, and there are no privacy protections. But worst about this bill is that it purports to be about portability. Portability means you have insurance, you lose your job, what happens to you? Well, how can you carry your insurance until you get your next job, or what do you do to cover your family? Now, this bill says that, if you were in a company that had 50 people or you had a group insurance and you go out there and you start looking for insurance, the insurance company or the State can decide what they are going to offer you. Mr. Speaker, we are not going to get the same policy we have now. No one listening to this should think that portability means what I have now I will have tomorrow, because it simply is not so. We give the insurance companies the ability to say, we will give you the average actuarial value policy. What does that mean? It has never been done in the United States. This is a pig in a poke. Anybody who thinks that the insurance companies when they do not have to give you insurance are going to give you the same thing, they are going to jack the price. And you are going to get less benefits, particularly if you have any kind of medical problem. They are going to medically underwrite you. If you have cancer or heart attack or anything, diabetes, whatever, you suddenly are going to find out you do not have the same benefits you had under your old group policy. Now, let us say we have a job and we lose it and move to another company. We may get into the next company, but the company that has more than 50 employees has no guarantee that they can go out and buy a policy. There is no guarantee of issue to an employer who has more than 50 people. Mr. Speaker, all of these proposals fit the insurance company's ability to cherry pick and avoid the sick people and make their choices and find ways to make money. Anything that is in this bill could be done now by the insurance companies. The Republicans have put out there essentially what I say is a guarantee that we can buy a Cadillac in this country. Now, we can pass a bill and say everybody can buy a Cadillac. We guarantee that Cadillac dealerships must issue us the keys to a Cadillac. Mr. Speaker, why do people not have Cadillacs? They have not got the money to buy Cadillacs. This bill is a fraud because it says, we get portability. But just like a bill that says we get a Cadillac, we would not get one. Now, if that were not enough, if it were not just the issue of portability, the opportunities for fraud by insurance companies are increased in this bill. We passed a law since I came to Congress that said that insurance companies could not sell a policy to old people for things that are covered by Medicare. We could not duplicate without saying to the old folks: This policy covers what is under your Medicare. Now, any old folk would say to that: Well, that is stupid. Why should I buy that policy? So they quit selling those policies. This bill says that an insurance company can go out selling something all over the place that covers what is covered by Medicare. It is simply an opportunity to legalize their fraud. This is a bad bill. Vote for Dingell, Spratt, and Bentsen.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, as a physician, I am particularly concerned with the section of this bill that many may not have had a chance to study. Buried within the 300-plus pages of this bill is a 29- page section called ``Administrative simplification.'' Now, ``administrative simplification'' has a nice right to it, but let me tell you why everyone concerned with the future of health care in this country should oppose the inclusion of this section in any health care reform bill. First of all, section 1173 on page 222 forces a physician to reveal confidential patient information for billing purposes. The bill says ``The Secretary shall adopt standards for transactions and data elements for such transactions to enable health information to be exchange electronically.'' This bill sets up electronic elearinghouses for all the health care administration information in this country. Now, among the transactions that doctors will be forced to make, on page 223, it says ``Claims or equivalent encounter information.'' This will require doctors to submit not just general information, but personal, private information that patients need to disclose to their doctors. Next, this bill fails to adequately protect the privacy of patient health information, which is vital if you are going to have good quality care in this country. Instead of actual privacy protections, the administrative simplification section provided vague promises to develop privacy standards in the future. The bottom of page 226, part E of section 1173, it says ``Privacy standards for health information.'' It reads, ``The Secretary shall adopt standards with respect to the privacy of individually identifiable health information.'' Now, we do not know what those protections are going to look like, yet we are going to set in place a collection mechanism from all the patients in this country in this bill. We have overridden all States, all insurance commissioners, everybody else in one provision, stuck in a 300-page bill that most people on this floor have never read. When I asked in the Committee on Ways and Means about this section, they said it has been cleared with all the groups. So I called some of the groups, and it has not been cleared with the groups. They understand that this is an invasion of privacy. I cannot understand how Republicans can be putting a bill out here that invades the public privacy for people who say they want privacy, and they want the Government out of their lives, to suddenly say to the insurance industry in a 29-page section buried in this bill, you can gather all the information you want and have a electronic transfer, so any insurance company can type in a name and here it will come printed out somewhere in a computer somewhere. That is what is being set up in this bill, and it is for the insurance industry, and everybody ought to understand it. You are going to come to rue the day that you pass this bill without talking about it.