Jim McDermott

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, the following speech delivered at the White House Conference on Mental Health by the President of the Special Olympics, Mrs. Shriver, does an excellent job in describing the challenges faced by individuals that suffer from both psychiatric disorders and mental retardation. I urge my colleagues to take the time to read this particularly informative speech. Mrs. Shriver's Statement for the White House Conference on Mental Health It has been known for at least the last 25 years that individuals with mental retardation suffer from the full spectrum of psychiatric disorders--depression, schizophrenia, anxiety states and more. In fact, it is now estimated that as many as 30% of the individuals with mental retardation also have a coexisting mental illness, yet they remain one of the most underserved populations in the United States. These undiagnosed and untreated disorders prevent millions of people with mental retardation from leading productive lives. Clinicians tell me that often emotional or aggressive outbursts are labeled normal behaviors for those with mental retardation when serious depression or other psychiatric disorders may be present. Too often in these situations psychotropic medicines in large doses may be administered with unnecessary toxic side affects. Let me tell one short story that exemplifies this unfortunate situation. A forty-year-old woman with moderate mental retardation in an institution in a state not far from here was very heavily sedated because of severe aggressive behavior. Because of one well-trained clinician this woman's life was completely turned around. he diagnosed her as having a bi-polar affective disorder and treated here with Lithium. Shortly thereafter, she returned to here community, obtained a job and is now a productive member of society in contact with family and friends. Another unfortunate example is when a non-retarded child is hyperactive he is often diagnosed as having an attention deficit disorder and treated properly. but when a child with mental retardation is hyperactive that behavior is typically attributed to his mental retardation and not adequately diagnosed or treated. We do know that children with attention deficit were very very rarely included into ``Federal studies'' on attention deficit disorder. What can we do to improve these dreadful situation? First, all psychiatric training should include exposure to children and adults with mental retardation and the American Board of Psychiatry and Neurology should require such experiences for certification. Secondly, most of us agree that the earlier treatment is started, the more effective it is. Therefore, when a young child with mental retardation attends primary grades and acts up that shouldn't be automatically attributed to his mental retardation. The child should be referred to the school psychologist for proper diagnosis and treatment. To accomplish all these goals, basic and clinical research that can benefit people with mental retardation and mental illness should be a priority at the National Institute of Mental Health working cooperatively with the National Institute of Child Health and Human Development and mentally retarded must be included in new research. Finally, we must remember that persons with mental retardation are finding their own voice, telling their own stories, reminding the world that they are not to be pitied nor neglected, but rather individuals with ideas and feelings and dreams for their future. They stand with us today announcing their abilities and proclaiming that their time has come. From the Special Olympics Movement I have seen over and over again their promise, their potential and their unbridled human spirit. I am confident that this conference and Mrs. Gore's leadership will forcefully move us into the next millennium where the mental health needs of those with mental retardation will be fully studied and addressed. I look forward to hearing others' thoughts and comments on this critical issue. I thank you for this opportunity to talk on behalf of these wonderful human beings.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Chairman, in the earlier debate I did not say something that I think needs to be said out here. We hear all these polls, that the American people do not like abortion and all this stuff. But I would tell you, in the election of 1998 in the State of Washington, the issue of partial-birth abortion was on the ballot, and the people turned it down. Now, you can tell me all you want about polls but the only poll that really matters is when people actually come out and vote. I believe that the gentlewoman from the District of Columbia (Ms. Norton) has really put her finger on the whole issue. Because if you open up a cause of action against every pharmaceutical company that brings anything to the market or to the FDA for approval that might cause an abortion, you are going to chill the pharmaceutical industry, which is exactly the reverse of what I see in the appropriations process. We put all this money into the National Institutes of Health because we treasure our health care system, including the pharmaceutical industry. It is a bad amendment.

Mr. McDERMOTT. Mr. Chairman, I think, as a physician, I listen to this debate and it is very interesting to watch us practice medicine out here on the floor of the House of Representatives. It is pretty clear that if the gentleman from Oklahoma (Mr. Coburn) wanted to ban RU-486, that is what he would have put in this amendment. But it is very clear that this is not what the intention is. The intention is to get a law out there that they can then get involved in lawsuits. It is a very well-known political strategy over the last 10 years to start something and get involved in the courts and tie it up forever. Now, if they have pharmaceutical companies, and the gentleman from Oklahoma (Mr. Coburn) knows this, they screen all kinds of drugs. Right now, I heard thalidomide mentioned here on the floor. And it became a very bad drug because of its effects on newborn babies and causing defects. It is now being used for another illness. And when pharmaceutical companies screen, they do not know exactly what it is going to be used for. And what they are essentially doing here is opening the door for a lawsuit against the pharmaceutical company who comes to the FDA, having spent $20 or $40 or $100 million developing a drug, and if somebody says, this causes abortion, therefore, we have a cause of action against them and we stop it, they are interfering in a process that is presently legal. A woman has a right to an abortion, and pharmaceutical companies have a right to develop drugs to do that in a very safe way. And for us to get into that position, the logical slope that they are headed down here, has already been mentioned. The next thing will be, when the sperm meets the egg, if that is a baby, then the next thing is going to be we must ban all birth control. We already have difficulty getting birth control paid for by the Federal Employees Health Benefit Program. And so we know what is in their minds. But beyond that, the next thing will be an amendment out here on maybe the HHS appropriation to prevent any money from being used for medical school training of any school that trains anybody to do abortions. Because if we go back and back and back up the stream, why should we waste money training physicians, obstetricians, in the skill of doing a safe abortion? We should not because they are ending the life of a child, and we get into all this inflammatory rhetoric. Now, everybody knows that is wrong. And this amendment is just the beginning of it. It is designed to do that and it is designed to hide what it is up to.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, the bill that the Senate had would have shut down the government if it had been passed. That is why there was a veto threat. It makes no sense to pass that kind of legislation. If my colleagues do not want any Social Security checks to go out and they want to shut the government down, then pass what the Senate is proposing. We are never going to get this issue done this way. We have a good proposal from the President to take the money and buy down the public debt, actually reducing the public debt.

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

Mr. McDERMOTT. Mr. Speaker, when discussing the issue of expected budget surpluses, we need to ask two questions. First, will we stick to the budget caps on which the budget surpluses are based; and, second, will Congress actually use the projected surpluses to strengthen Medicare and Social Security? Unfortunately, this bill is a sham as an answer to those two questions. The so-called lockbox is of no value beyond making sure Members of Congress have a press release to show their constituents when they go home this weekend. The budget caps I did not vote for, but I am willing to stick to them if the money will be used for Social Security and Medicare. But the fact is the track record in here is that it is not going to happen. Just a few weeks ago, this Congress passed a spending bill that grew from $5 billion to $15 billion in a matter of days, three times what the President asked. So we are on our way to blowing the budget caps, and the result is going to be, there is no surplus. This bill claims to prevent the use of budget surplus dollars for Social Security. It makes this claim by mumbo-jumbo legislative ``magic language'' that says we cannot create budget deficits. However, it gives any chairman in this Congress the right to ignore everything as long as they say they have self-designated this as reform. That raises my question, what is reform? The gentleman from California (Mr. Thomas) says he has a bill to reform Medicare, a voucher plan that would raise the premium on every senior to $400 a year. Is that reform? It would make it impossible for one to get Medicare until one is 67. Is that reform? It would extend the budget amendments of 1997 for 5 years. Do our hospitals and our home health agencies think that is reform? Any of these examples would open the lockbox, the trap door. The money would fall out and, presto, we have money for a tax cut. If shifting the cost onto Medicare beneficiaries and providers is not what is meant by reform, then we need to have an amendment process. We were denied a hearing in the House, not one single hearing. On this floor, we are denied even one single amendment. There is no intention to improve this bill. This is a PR gimmick. That is all it is. This has been on the docket for 2 months, and the American people expect us to do something about Medicare and Social Security. This bill does not do it. I urge the Members to vote against this rule.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Chairman, during rollcall vote No. 134, I was unavoidably detained. Had I been present, I would have voted ``yes.'' Announcement by the Chairman Pro Tempore

Mr. McDERMOTT. Mr. Chairman, during rollcall vote No. 135, I was unavoidably detained. Had I been present, I would have voted ``no.'' Amendment No. 5 Offered by Mr. Roemer

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, today I want to talk about competition. In this Chamber the word ``competition'' is often used in the context of the phrase ``making government run more like a business.'' Together these two words are used repeatedly and loosely because they sound good. But the fact is that no one who uses these phrases really ever knows what it actually means. ``Competition'' and the term ``making government work more like a private industry'' is not only the mantra for some politicians, it also comes from the mouths of representatives of private industry that usually want something. For example, earlier this year, the National Commission on the Future of Medicare, on which I sat, failed to recommend a proposal to strengthen the long-term solvency of the Medicare program. However, some members of the Commission advocated a radical proposal called, quote, premium support, which is really just a euphemism for a voucher program; that is, its proponents say it would bring competition to the Medicare program so that it could run like a business. Many observers from the health care industry agree. They, too, say they want to bring competition to Medicare so that it will run more like a business. The irony of all this, of course, is that Congress has already passed laws that establish demonstration projects for both traditional Medicare and Medicare plus choice; that is, those plans that have managed care in them that would inject some competition into the Medicare bidding process. The Health Care Financing Administration, we call it HCFA around here, the agency that runs Medicare dutifully, is attempting to implement these demonstration projects because it will help Congress understand what competition in Medicare really means. So when it comes time to be serious about Medicare reform, we will know what works and what does not work. Unfortunately, none of these demonstration projects have been fully implemented due to both legal and political challenges. What is appalling to me is that the same people who say they want to bring the magic word ``competition'' to Medicare are the same people who are desperately trying to kill any attempt to determine what Medicare competition really means. Last Friday, Laurie McGinley of the Wall Street Journal wrote an article, an excellent article, detailing how the industry working with Federal law matters is seeking to prevent Medicare competition in Phoenix, Arizona. She also notes that similar demonstration projects were stopped by the health care industry in Denver and Baltimore, most likely with help from Members in Congress, before HCFA got close to getting started. In addition to the attempts by the industry to prevent Medicare competition reported by the Wall Street Journal, just yesterday the Kansas City Business Journal reported that industry representatives in Kansas City also are seeking to derail Medicare competition because they fear it will disrupt the ability of Medicare beneficiaries to receive care. So why is the health care industry afraid of Medicare competition? The answer: because it will cost them money. For years now, HMOs in most areas have been living off overpayments from the Federal Government. It has been estimated by HCFA that they overpay private health plans by 6 percent a year, an overpayment of roughly $2 billion to $3 billion in subsidies to the HMO industry. Earlier this year, in fact, the industry successfully lobbied the administration to delay the implementation of risk adjustment. Now, if an HMO takes a patient and they do not cost them very much, they get a benefit because they got a lot of money, but they did not have to pay anything. If they get a sick patient, then they have to put out a lot of money or they just get a little bit and they spend a lot more. So the industry said we want to have risk adjustment. If we take sick patients, we should get more money. If we take healthier patients, we should get less money. But when the Congress passed the law and said we want to do this and HCFA began to try and implement it, the industry successfully lobbied the administration to delay the implementation of risk adjustment, the variation of reimbursements to reflect the amount of care given that was mandated by the Congress in 1997. They did not want the very thing they asked for. This delay will cost the taxpayers $5 billion over the next 5 years, and some in Congress want to delay risk adjustment altogether, a giveaway to the health care industry of over $11 billion. So the moral of this story without morals is that ``competition,'' unless it's done in a way the industry wants it to be done; where it protects their overpayments and protects their ability to ``cherry pick'' healthy beneficiaries and leave the sick to be treated by the government, would mean plans get less, not more, money. So, that is the irony. On the one hand, industry and politicians say they want to bring ``competition'' to Medicare so that it can ``run more like private industry.'' On the other hand, the same industry and those same politicians are fighting tooth and nail to derail any attempt to ensure that plans get paid for the care they actually provide. Either you want competition and you want Medicare to run more like a business or you don't. But, what is simply dishonest, disingenuous, an disconcerting, is the hypocrisy of the for-profit HMO industry and their protectors in Congress to continue to speak from both sides of their mouths. Let's give HCFA a chance to do their job. Let's see what Medicare ``competition'' really means. Until then, I would caution members to think twice before they rant about bringing so-called ``competition'' to Medicare. Mr. Speaker, I think everybody ought to think about competition. Mr. Speaker, I include for the Record the two articles which I recommended my colleagues to read, as follows: [From the Kansas City Business Journal, May 17, 1999] Business Group Suspends Local Medicare Coverage Project (By Bonar Menninger) A local group charged with overseeing a controversial Medicare pilot program voted unanimously this week to seek an indefinite suspension in the project's timetable until safeguards are established to limit widespread disruptions in Medicare HMO services for approximately 50,000 area residents. The vote represents a significant setback for the Health Care Financing Administration, which is relying on the Area Advisory Committee for assistance in implementing the project, called the Competitive Pricing Demonstration Project, by Jan. 1, 2000. Although work on the project's components will continue, it remains unclear whether the fast-track deadline will be met. Wednesday's vote was prompted by mounting concerns among committee members about the program's potential impact on beneficiaries. On a separate front, the head of the American Association of Health Plans was in Kansas City this week to warn that the local Medicare HMO market--already weakened by federal budget cuts--could deteriorate rapidly if the pilot project goes forward. Kansas City and Phoenix are test sites for an experimental process that will, for the first time, use a competitive bidding mechanism to set the HMO reimbursement rate. HCFA, overseer of the Medicare program, contends the approach will increase health care options for beneficiaries while reducing federal expenditures. But committee members apparently are increasingly skeptical that the former goal can be achieved through the proposed benefits package developed for the demonstration project within the constraints of HCFA's specifications. ``With the proposed benefit package, beneficiaries are going to see less benefits and higher costs than virtually every plan in the market right now,'' said Kathleen Sebelius, Kansas Insurance Commissioner and member of the AAC. ``That's 100 percent negative disruption, and I'm not very comfortable with that. I think we're making a step back, not forward.'' Following a recommendation by committee member Dick Brown, president and chief executive officer of Health Midwest, the AAC voted to recommend that HCFA suspend the implementation timetable until it can be determined at what level disruptions caused by the project will become untenable for enrollees. That process will be undertaken by the AAC, HCFA and Competitive Pricing Committee, the HCFA advisory body that developed the Kansas City and Phoenix projects. Separately, Karen Ignagni, president and chief executive officer of the Washington-based American Association of Health Plans, said this week that the experiment likely will exacerbate financial pressures many area Medicare HMOs already face as the result of payment cuts triggered by the Balanced Budget Act of 1997. Ultimately, Ignagni said, this reimbursement squeeze could lead to disruptions in retiree benefit plans, higher costs and fewer benefits for enrollees, and a retreat from the Medicare marketplace by managed care firms. Ignagni was in Kansas City as part of a multicity tour aimed at drawing attention to the growing problems in the Medicare HMO marketplace nationwide. ``There is a fundamental design flaw in (the Kansas City demonstration project), and I think it ought to be fixed before we roll it out in any community,'' Ignagni said. ``People need to think very carefully about what the inadvertent consequences of this policy will be.'' Ignagni said the demonstration projects in both Kansas City and Phoenix, along with the ratcheting-down of Medicare HMO reimbursement rates nationwide, inadvertently will undermine the one portion of the Medicare program that has produced the greatest savings and benefit enhancements in recent years. At the same time, she said, no significant efforts are being made to rein in the traditional fee-for-service side of Medicare, which accounts for approximately 87 percent of enrollees nationwide and the vast proportion of Medicare's $220 billion annual budget. ``We don't mind competition, but we want a level playing field,'' Ignagni said. ``If you want cost reductions and you want to test competitive bidding, then fee-for-service should be part of it.'' The Balanced Budget Act does mandate some reductions in Medicare fee-for-service reimbursements, but the cuts on the managed care side are considerably deeper, Ignagni said. The resulting disparity between the amount paid for HMO service and the amount paid for fee-for-service will widen to $1,200 per person in Kansas City by 2004, according to statistics compiled by the American Association of Health Plans. ``At that rate, it becomes extremely difficult to retain the best doctors, to retain the best hospitals and to remain competitive,'' Ignagni said. ``And the beneficiaries will be the losers.'' Nationwide, more than 100 managed care firms have downsized, adjusted or withdrawn their Medicare HMOs from the market in response to the first wave of reimbursement reductions triggered by the Balanced Budget Act, Ignagni said. Approximately 450,000 beneficiaries have been affected.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, today's vote on the supplemental budget for Kosovo has so little to do with Serbia and Kosovo that it no longer makes any sense. Members are being asked to approve a cornucopia of projects much beyond the amount that President Clinton asked. There are so many outrages in this bill that it is kind of hard to pick one out, but let me pick one out. It is the antienvironmental rider, sponsored by the senior Senator from Washington State, and the well-financed mining lobby, which will trade American foreign policy, the safety of millions of Kosovars, and the welfare of hurricane victims in Central America for the right to strip-mine a sensitive and scenic area in north central Washington. This rider will grant a Texas company the right to operate a strip- mine in Okanogan County. This mine will operate a cyanide leaching pit mine to spread its waste over hundreds of acres of public land, threaten the county's water supply, and threaten tribal lands. It orders the Interior Department not to enforce the 1872 mining law. There is no doubt that that mining law needs to be reformed. It is much too generous to the mining companies. However, the solution is comprehensive reform of the law. It is clearly wrong to suspend part of the law to allow more dumping of wastes, and the mechanism is hardly an emergency appropriations bill. The only opportunity that Members of this House will have to vote against this is to vote on the motion to recommit. And I urge all of them to vote ``yes'' on the motion to recommit and ``no'' on the bill.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, today I rise to share with you some ideas that both Representative Rogan and I have about how to begin addressing the issue of the uninsured. Many of us are stymied by the health care paradox of a booming economy. Our economy is booming. Unfortunately, parallel to this economic growth is the growing number of uninsured. There are now almost 44 million uninsured people in this country--an increase of more than 5 million since 1993. Today, we are introducing legislation to help stop the increase by targeting a 30% health insurance tax credit to the working uninsured. To qualify for our partially refundable credit, taxpayers must not currently be offered health insurance through their employer and they must have an individual income below $30,000/yr or a joint income of less than $50,000/yr. To ease administration, these income limits have been designed to match those of traditional IRAs. When the General Accounting Office evaluated a similar proposal last June, it found that almost 36 million individuals without employer- based coverage--roughly 75% of the uninsured--would be eligible for the full credit on the basis of their adjusted gross income. Additionally, under our proposal, the self-employed would have the opportunity to choose between our proposed credit or the 60% deduction allowed by current law. The benefits of this proposal are not only that it provides a tax benefit for those who need it most, it also would encourage health care consumers to be cost-conscious when choosing their health insurance loans so that they could maximize the value of the credit. As you consider our proposal, keep in mind three questions: (1) who the uninsured are, (2) how has the tax code impacted health insurance in this country, and (3) most importantly, what can the 106th Congress realistically do to address this important social policy issue. First, who are the uninsured? Contrary to what many people might think, roughly 75% of the uninsured work full or part-time. The remaining 25% are split evenly between those who are unemployed and those who are not in the labor force. There isn't enough time today to talk at length about the demographics of the working uninsured. If we did, we'd find that most of them are age 18-34, that a disproportionate number of them are minority, that working poor parents are twice as likely to be uninsured as poor parents who are unemployed, and that the highest rate of uninsurance impacts pre-seniors between the age of 62-64. Second, how has the tax code impacted health insurance in this country? Since WW II, America has relied on employers to provide health insurance and has rewarded them accordingly through the tax code. But, a growing number of workers lack employer-based insurance which policy- makers once took for granted. Let me give a practical example of how the working uninsured fall through the cracks of our current employer based system. It you make $6.50 an hour your after tax income is $11,500. If you tried to purchase an average health insurance plan it would cost you about $3000. It is obvious that if the working poor are going to get health insurance we are going to have to come up with a way to help them. I think we should all find it unacceptable for a person who works full time in this country not to be able to afford health insurance. Third question, how do we in the 106th Congress address the issue of the working uninsured? As you all know, I am a strong believer in universal health insurance and that the most efficient way of providing it is through a single payer financing system. A system that would lift the prohibitive burden of health insurance administration from employers and replace it with a public premium that shares responsibility throughout society. But, if there is a way for us to guarantee universal coverage without single payer--through a plan based on tax credits, Clinton-care, or Medicare for all--I am willing to look at the proposal, as long as the plan guarantees access to quality care that's affordable. My bottom line is quality care at an affordable price. Unfortunately, just because something is efficient--such as a single payer system--doesn't always mean that it will pass anytime soon. The reality is that the political climate to have an honest debate about universal coverage was destroyed by partisan bickering in 1994. As a policymaker, the next question for me then becomes, what can we do in the near term to help folks who need health insurance today. The tax code is a good place to look. After all it is the foundation of our employer-based health insurance system. For a number of years now, this issue for me has been about simple tax fairness. As many may know, Congress recently made matters worse by passing legislation to allow the self-employed to deduct 100 percent of the cost of health insurance from their taxes. Since 1995, I have attempted to equalize the tax treatment of health insurance benefits by offering amendments on the House floor and in the Ways and Means Committee, and by introducing H.R. 539 in the last Congress. My rallying cry--which I am glad to see is starting to take hold--has been the rhetorical question: Why should a doctor or attorney who is self-employed be able to deduct a portion of the cost of his/her health insurance, while a secretary, who must buy his/her own health insurance policy, not be able to deduct one cent of the cost! So as a simple matter of fairness, this inequity in the tax code needs to be fixed. According to the DC-based Lewin Group, the average federal health benefits tax expenditure is $918 per family. That sounds pretty good until you realize that a family whose income is below $40,000 receives an average of $766 in tax benefits, a $30,000 family receives just $500 in tax subsidies--and the numbers get more depressing if I continue down the income scale. The bulk of the tax subsidy is going to those who need it the least. If you make $100,000 or more, the tax code subsidizes your health insurance each year by more than $2,000. So it seems to me that if Congress wanted to address the issue of tax fairness and assist a group of people who are in most need of health insurance, it would look at our proposal for a 30% credit. Our proposal is a reasonable and prudent approach to helping people who the system has forgotten about. We are initiating the debate with a less is more approach. Our legislation will be less than 6 pages long. I am hopeful that the sudden interest in tax code equalization will allow for thoughtful discussions and critiques of the wide range of proposals that will be offered this year. In particular, as policymakers put forward proposals, they need to consider what the ``take up rate'' will be (will people use the credit if they are eligible), how does it impact existing employer health care contributions, and how much does the proposal cost. I don't want to leave you with the impression that our limited proposal is the ultimate answer. I view it as a first step toward finding a solution for the uninsured. I am proud of the fact that it is a moderate proposal because there are so many uncertainties about how it would work. For example, we completely avoid the issue of market reforms because going down that route creates more divisions among political parties that can be realistically addressed in this Congress. By gently impacting the individual marketplace, I am hopeful that state legislatures will take steps to rationalize their individual markets and Congress can learn from both their successes and mistakes. Conversely, more costly proposals that hope to dramatically influence the marketplace must include meaningful market reforms. Otherwise, such proposals will just be throwing large amounts of federal tax expenditures at an individual marketplace that is already overpriced. But there is no consensus around market reforms to be found. I would also be especially cautious about more ambitious tax credit proposals because they run into serious financing problems. How do you pay for it without running a deficit? Even in this era of expected budget surpluses, a hefty price tag simply is prohibitive given our other national policy priorities. More importantly, current comprehensive tax credit proposals may not be such a good deal for either the insured or the uninsured. If they appear too generous, employers will drop coverage and allow for their existing costs to be replaced with an inadequate government voucher, a voucher that would not come close to equaling their existing coverage. Letting employers off the hook while increasing government and beneficiary costs would make the problem worse. I am the first one to say that our credit should not replace the current system. If it did, it would be inadequate. That is not to say, however, that most of us in this room would not like to see the current system totally overhauled. I view our proposal as a targeted effort to stop the current health insurance hemorrhaging, to induce some additional people to purchase health insurance before they get sick, as an achievable goal in a very divided Congress, and a stimulant of the necessary discussion we need to have about how this country can create an efficient means of providing universal health care coverage. Chairman Archer has said he would like to mark-up tax legislation later this spring. Jim and I already have written him and Mr. Thomas asking them to look closely at our proposal for its immediate benefits. We have also asked the White House to look at our proposal and I hope that they too will once again show leadership by joining us in attempting to tackle this difficult issue of the uninsured. By bringing people together, I am confident that we can build momentum within the Congress to generate bipartisan support behind proposals that begin to address the needs of the uninsured. Passage of our credit would be a first step toward enlightening that discussion. I urge my colleagues to join us in our bipartisan effort. Average Federal health benefits tax expenditure by income level in 1996 Average Per Family $918: Less than $15,000...............................................$63 $15,000 to $19,999..............................................288 $20,000 to $29,999..............................................497 $30,000 to $39,999..............................................766 $40,000 to $49,999............................................1,177 $50,000 to $74,999............................................1,558 $75,000 to $99,999............................................1,767 $100,000 or more..............................................2,059 Source: Lewin Group estimates using the Health Benefits Simulation Model (HBSM).

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Chairman, I missed the vote today (rollcall No. 129) on the Sanders amendment to freeze all Intelligence spending at the FY 1999 level because I was in a meeting with the President. If I had been here, I would have voted against it.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, today I am introducing legislation which supports important regional and national interests. My home, the 7th Congressional District of Washington, is also the home of the K2 Corp., the last remaining major U.S. manufacturer of skis and one of three major makers of snowboards in the United States. K2 conducts all significant manufacturing operations for skis and snowboards at its Vashon Island, Washington facility. In fact, all K2 snowboards and virtually all K2 and Olin-brand skis sold throughout the world are individually crafted by technicians on Vashon Island. Moreover, K2 sources almost all of the components for its skis and snowboards in the U.S. stimulating the U.S. economy through its purchases of raw materials from U.S. suppliers, especially in the Pacific Northwest region of the country. However, for a key ski and snowboard component--polyethylene base materials--K2 has been unable to find a supplier of these products in the U.S. that can meet its needs. Therefore, K2 has been forced to import this product, which is subject to U.S. customs duties upon importation. This legislation provides for a temporary suspension of customs duty on the raw material which is vital to the U.S. production of skis and snowboards and which are unavailable from domestic producers. K2 is working hard to remain viable in the highly competitive international market for skis and snowboards. In fact, K2 has endured as a U.S. ski manufacturer in the face of fierce price competition, while several other major ski companies no longer manufacture skis in the U.S. This temporary duty suspension legislation would support jobs in the region, as well as K2's ability to continue developing innovative, fine quality products. Equally important, a temporary duty suspension would help K2 preserve and increase its competitiveness in the global marketplace. K2 is the only major exporter of skis made in the U.S. In addition, K2 is one of three principal exporters of U.S. made snowboards. Thus, K2's exports of U.S. manufactured skis and snowboards represent a substantial percentage of U.S. skis and snowboards sold worldwide. If K2 is unable to remain competitive in global and domestic markets, skis manufactured in the U.S. may disappear from the global marketplace. The temporary duty suspension proposed by this legislation would help prevent the shutdown of the only remaining U.S. producer of skis.

Mr. McDERMOTT

Mr. McDERMOTT. Madam Speaker, yesterday, as I listened to that debate, I thought of my time in the Vietnam war when I listened to soldiers and sailors and marines talk about what it was like fighting a war when the American people did not support them. I got to wonder what people think sitting on the flight line in Aviano in Italy today, asking themselves: Where is the Congress? Are we going out there risking our lives, and they do not support us? Now I watched last night when the leadership of this House stood by that back retail and did not turn a single vote around. Amazing. One can be the leader of this House, and they cannot change a single vote. They do not even speak to anybody to change a vote. Now next week we will see it all different. Then we will have an appropriations act out here, and we will want to give money to an effort that we do not support. Madam Speaker, Lewis Carroll must be writing the script because this place is getting curiouser and curiouser.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, in 1968 to 1970 I was a physician in the Vietnam War and dealt with the casualties from that war. That war was started on this floor by a voice vote. If we think about the fact that we committed 500,000 people, 50,000 of whom are dead and on a memorial not very far from this building, on the basis of a voice vote, it seems to me that the United States Congress can spend more than 1 hour deciding whether or not we are going to go into this issue. Mr. Speaker, yesterday we had a debate for a few minutes and got out of here at 4 o'clock. Last week we came back here. One day we gave a gold medal to Rosa Parks. That is all we did that day. What have we got on our calendar that prevents us from spending the time to give the Members of this House the opportunity to speak about something, where we are potentially sending our young men and women to die? I think this rule should be defeated.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, today I have introduced a proposal that encompasses three principles--fair play, equity and de-politicization. The United States must do whatever possible to assure patent integrity, so we can continue to receive the desired public benefits from pharmaceutical research. Creating a fair and impartial process where an independent body can determine whether or not to restore lost patent life is a matter of fairness. It also is a matter of ensuring adequate incentives for research and development in the future. In this case, several drugs were caught in a review process that took significantly longer than Congress anticipated. Thus, the patent life of certain of these ``pipeline'' drugs was reduced by an unintended consequence that had nothing to do with their medical safety. There are two important questions: What type of process can we put in place to guarantee a fair and reasonable evaluation of the issues? And, what types of assurances should be embedded in this process to make sure it is equitable and removed from politics? Our bill answers these questions. Our bill establishes a process that is fair, equitable, independent, separated from politics, and fully open to the public, and subject to judicial review. Let me expand on these features. The bill establishes an independent and public review process within the U.S. Patent and Trademark Office. This would be a new administrative procedure--one that is fair and impartial. The experts at the Patent and Trademark Office are the right experts to hold a hearing about these issues, because these issues involve questions not of medical research, but legal issues involving patent life. Within the office, a procedure would be established to review claims for patent term restoration to compensate for unanticipated lengthy regulatory review of ten years or more in the FDA's New Drug Approval proceeding. The process established by this legislation would be akin to a court hearing. Any company that believed its product was unintentionally deprived of patent protection would have the opportunity to present its case. Any other interested party would also be free to make its case. Both sides would be treated equally. Everything would occur in the open. The review board would be bound by objective criteria. By turning over the issues to an independent panel of experts, the process would be driven by public policy objectives--not politics. This is an important point. Our bill is driven by the principle that it is best to take politics out of the equation, to de-politicize the process, to take Congress out of the job of deciding individual patent issues. Finally, fairness and equity are assured by another provision. The decision would be subject to judicial review. Another way to describe the legislation is to outline what it does not involve. There is no preferential treatment for any affected pipeline drug. There are no arbitrary decisions. There are no guarantees. Our bill is about process, not about answering a predetermined outcome. We are convinced this is the right solution. As a medical doctor and psychiatrist, I have seen the benefits of breakthrough drugs and innovations. They truly can make people's lives better, and there is more to do.

Mr. McDERMOTT

Mr. McDERMOTT. Yes.

Mr. McDERMOTT. I had an experience myself with this whole issue of prescription drugs. The gentleman reminds me of it. I had an ear problem, and I went to see the doctor and he gave me a prescription, as you get when you go to the doctor. I went down to the pharmacist, and I know him, and he said to me, Jim, sit down. So I sat down, and I said, why are you asking me to sit down? He said, well, this prescription that is for 2 weeks, medication for your ear, costs $385. Now, for most people $385 is a lot of money, and if you are one of these widows we are talking about, or the average senior citizen who lives on less than $15,000 in income, $385 is a lot of money. He said, people come in here all the time, and they will stand there and they will say, well, why do you not give me half the prescription? Now, that means what they are doing is going home and taking half of the medication that has been prescribed for them. If they do not get better, they wind up having to go back to the doctor. And the doctor says, did you take the medication? They say, well, yes. But in fact they are not telling the doctor that they only took half of the prescription because that is all the money they had in their bank account or in their pocket or whatever, or they had to pay their rent or something else with the money that they did have. This kind of dilemma for senior citizens is absolutely unacceptable, and it is why the President has taken the position that in modernizing the system as the President wants to do, first of all, he wants to put 15 percent into the program from the surplus, and secondly, he wants to have a prescription benefit. Now, my colleague, the gentleman from New Jersey (Mr. Pallone) raised the issue of how prescription drugs have increased in usage in medicine. When I got out of medical school in 1963, which was a couple of years before Medicare started, usually when people went to the hospital they would stay 3, 4, 5, 6 days, and if you had a hernia or you had a baby or most anything, it was not uncommon to stay in the hospital 3, 4, 5 days. Today if you get to stay overnight you have got something pretty serious, because most things are done in 1 or 2 days in the hospital. In fact, the reason we passed a bill out here on the Floor making it absolutely the doctor and the mother's decision was that many of the HMOs had said that if a woman delivered a baby at 8 o'clock in the morning, she ought to go home at 6 o'clock at night with the baby under her arm. She was not even given one night in the hospital. That pushing people out of the hospital has created two of the problems that we are now struggling with in Medicare. One is that prescription drugs, that is, people get pain medication and they get a variety of drugs, and they are supposed to go home and take care of it, sort of medicating themselves. And the second thing is that we wind up with lots of home health care. Mr. Speaker, the home health care program is there because we do not keep people in the hospital. If one keeps somebody in the hospital, my father was 90 years old when he had his gallbladder taken out. When it was taken out, he was sent home 3 days later. Now, there is my mother, she is 89 years old, and she is supposed to take care of a 90-year-old man who has just had a major surgery. That is obviously not reasonable. So we have designed a system in this country of home health visits. We have visiting nurses who come into the home and see people, maybe once, sometimes twice a day, to be sure that the bandage is changed or that the blood pressure is taken or whatever is necessary to make it possible for somebody to recuperate at home. If we did not do that, they would wind up back in the hospital at $600 or $700 or $800 a day. So there is a savings in putting people out in their home. It is more comfortable. It is more pleasant to be in our own home surroundings, but we may need some additional help. Now, that program has been used all over this country in different ways. In the State of Washington and the State of Minnesota the average number of visits for any case is about 35 visits. In the State of Louisiana it is 170 visits. Now, we may ask ourselves, well, what is different with people in Louisiana from people in Washington or Minnesota? Well, the fact is that in those States where they have these long and large number of visits, they have been using the program to keep people from having to go into nursing homes. They have been delivering long-term care in the home, using the Visiting Nurse Service. So the Congress gets all excited that here is this cost going out of sight within home health care and they say, well, we have to stop this. So what do they do in this defined contribution program; one of the ways they save money? They slap a 10 percent copay on anybody who has a visit at home. Right now there is no copay for a home health care visit. What they are saying is, if the hospital throws someone out as quickly as they can, gets them home, then we will start taking 10 percent out of their pocket rather than the government paying for it. So what is happening here in this defined contribution is that we are giving only so much and everything else comes out of the individual's pocket. And if that individual does not have it in their pocket, well, that is tough. And we are going to have lots of people in this country who are not going to have the capability to take care of this additional cost to them as individuals. Now, the Congress passed some years ago a bill to give people some help if they could not afford to pay the deductibles. It is called SLIMBY. That is just another one of the alphabet soup names for a program for old people, who do not have enough money, can go and get some help. But guess where they put that program to make it easy for old people? They put it down at the welfare office. They say to old people that all they have to do is go down to the welfare office and ask for some help. Now, old people have got pride. Old people have worked hard all their life, they have taken care of themselves, they have paid their bills, they have raised their kids, they have paid their taxes and, at the end of life, when they cannot pay the deductibles on this program, they have to go down to the welfare office and ask for some help to pay for that. Now, I proposed in the Medicare Commission something that I have been proposing before in the Committee on Ways and Means; that when someone registers for Social Security, and their income is known at that point, that when they are 65, if they do not have enough income to pay those deductibles, then they should be registered immediately in the program for help to pay for their deductibles. That was resisted in the commission. They left it down there in the welfare office. And I know senior citizens in my district who will not go down there because it makes them feel ashamed of themselves to have to go down and beg at the welfare office. So if we are going to modernize this program and we are going to raise the deductibles and so forth, we have to make it user friendly for senior citizens who are living on less than $15,000 a year. We cannot expect them to say, well, I think I will go down to the welfare office and get some help. We teach people in this country to be independent, to take care of themselves. We value that as a country. And the people who we are talking about right now are the people who lived through the Depression. They brought this country back from the Depression. They took us through the Second World War and they took us through the Korean War. Now we are saying to them that they did not do enough then and so we are going to make them go and beg for some more help just because they do not have anything more than their Social Security. From my point of view that is not a good system. And when we modernize it, we have to make this an automatic benefit for people who are not capable of paying for it. Now, there is an issue that the gentleman from New Jersey (Mr. Pallone) raised, and that is this whole business of so-called means testing. ``Means'' means how much money we have. When we say somebody is a person of ``means'', it means he has money. So what some people say about Medicare is that what we ought to do is put a means test. Everybody, let us say above a certain point, should not get Medicare. They should just buy their own health insurance because they have enough money. Now, we can say to ourselves, yes, that makes sense; why do we not do that? Well, where do we want to put that? Do we want to say that everybody who has $100,000 in income when they are 65, that they should buy their own insurance? Well, $100,000 is a lot of money; right? They ought to be able to handle it. Well, maybe we are a little short on dough here in the Congress so we lower the means test down to, say, 75,000; and the next year we are a little short on money and we say, well, let us take it down to 50,000; and the next year we are a little shorter and we get it lower. The problem with the means test is that what it does, it creates two groups of people in this country, those people who get the benefit and those people who do not. I personally oppose a means test. I think if we come into this country and we pay our taxes and we participate to the best of our ability, we ought to get the program. I feel the same way about Social Security. I do not care how much anybody has. If they paid into the Social Security system, they ought to get their money out. They ought to get their fair share out. The reason is, and this is a principle of both Medicare and Social Security, they are social insurance programs. Just like our fire insurance we have in this country. We made the decision, I think it was in 1759, in Philadelphia, to have the first fire department. We said, we cannot save our own homes, so let us all, all of us in Philadelphia, get ourselves together, get a horse and wagon and some barrels, some water and some ladders, and if a house catches on fire, we will go put it out. That is a social insurance system. That is what fire insurance is. Nobody wants to take advantage of that. Nobody says, well, gee, I hope my house catches on fire so I can get back some of the money that I have paid in in taxes to the fire department or to my fire insurance plan. Nobody wants to get their money back, but we have it there so that if a disaster strikes us, we have coverage. If anybody stood up on the floor of the House here and said, I think if an individual's house has not caught on fire in the last 5 years they should not have to have fire insurance or pay any taxes for a fire department, we would think they were crazy. We would think they had lost their mind, because we know that nobody knows whose house is going to catch on fire and that is why we have this social insurance fire policy in our pocket. Same thing is true about roads. We figured out we could not do roads by ourselves, that we had to do them as a national program. That is what Dwight Eisenhower did back in the 1950's, was to establish a national interstate system. And so we collect all the gasoline tax and we put it out there and we take care of the highways in this country. We do the same thing with schools. We realized that in order to have a democracy, we needed to have an educated electorate, and so we have a system of schools. Well, the same thing happened in the 1930's, when there was no money for people to live on and there were a lot of old people who had no pensions. We said we have to have a Social Security System, and Franklin Delano Roosevelt came in this room and said, we ought to have everybody have an account, and so everybody has a number. 000-00-0000 is my number. And everybody has an account. We put in our money every month, and when we get to be 65, there it is for us. None of us knows how rich or how poor we are going to be when we get to be 65. We all hope that we will be very successful and be able to take care of ourselves without that Social Security money. But when we look at senior citizens and realize that 50 percent of senior citizens live on $15,000 or less, which is about the Social Security benefit in this country, we realize that for half the senior citizens, when they get to the end of life, that is all they have. They did not know that when they were 15 or 20 or 25 or 40 or whatever. But they put their money in, and when they got there, they had it. The same is true about Medicare. That is why this is such an important program. There is a fascinating fact about this whole program which I think really drives it home to me as a physician, and I have seen it. We spend 70 percent of the money on 10 percent of the people, 10 percent of the senior citizens in the Medicare program. And none of us knows whether we are going to be a part of that 10 percent. That is why we have to protect the Medicare program with a defined benefit for everyone.

Mr. McDERMOTT. The gentleman is welcome. I think that it is--I appreciate the gentleman's coming down and sharing his thoughts with us today, and I think that what people have to begin to look at is the specifics. When somebody says premium support is a good idea, that sounds as if, as the gentleman says, it is a very attractive idea. Everybody gets the same amount of money all over the country. But as we know around here, the devil is always in the details, and the details of this program are, I think, the reason I wanted to come out here and talk about it, because sometimes issues go through the House of Representatives and they are sort of like bumper strips: If we can make a good slogan, then we think we understand. But if we actually look at what this program does and what they are talking about, we realize that it is not so good. For instance, let me give one example. A senior citizen in Part B, that is the doctor's part, the doctor payments, pays a $100 deductible. So if he goes to the doctor the first time, whatever it costs he has to pay it himself until he gets the $100 deductible paid for, and then Medicare kicks in and covers the rest of the time. If he goes all year and never goes to the hospital, all he would have to pay is that $100 deductible. Now, if he happens to get sick and goes in the hospital, the first day he is in the hospital he has to pay for, $746. So if somebody goes and sees the doctor during the year and has 1 day in the hospital, their deductible for the whole year would be $864. Part of this defined contribution plan, this premium support idea is, well, that is too much, $746. Let us cut it down to $400. That sounds like a good idea until we figure if we never go into the hospital, suddenly our deductible has gone from $100 to $400, because we are going to have to pay every penny of our doctor's bills until we get up to $400. I do not think that is a very good deal for a lot of old people. It would be a good deal if they wind up being sick and have to go into the hospital, but if they do not, if they just go and see the doctor, they are going to wind up paying $300 more. Now, to figure what $300 is, that is about 10 bags of groceries, which, remember, we are talking about old people who are living on $8,000 a year, and we are saying they have to pay $300 more in premiums. How can that be a good deal? That is why what I do not like about the Breaux-Thomas program is that two-thirds of the new money comes out of the pockets of the beneficiaries. It does not come from savings in efficiency in health care delivery, but rather, it comes right straight out of the beneficiaries.

Mr. McDERMOTT. Mr. Speaker, the gentleman from New Jersey raises an interesting question. The Breaux-Thomas plan, when they figured out the finances of it in the Medicare Commission, only extended the life of the plan 2 years. The President, when he said we should put 15 percent of the surplus into the Medicare program, extended the life of the plan by 10 years. So the savings from this so-called defined contribution program, premium support, are really quite small, and the disruption is I think what people really do not understand.

Mr. McDERMOTT. Mr. Speaker, one of the interesting things the gentleman is talking about is how much money senior citizens pay out- of-pocket. The average senior citizen spends $2,500 out-of-pocket. Now, if we think about that, $2,500, that is a lot of money, but for those of us who are working it may not seem like very much. But if we think about it, almost half the seniors in this country have incomes less than $15,000, and there are almost 10 million widows in this country who live on less than $8,000 a year. So if someone is a widow and their husband had a job, and they were living on Social Security and the husband died and they get the residual benefit, that person is therefore making about $8,000; if that person has to take $2,500 out- of-pocket today, that leaves that person with $5,500 to live on. Now, if we think it about, how in the world, I do not know what it is like in the gentleman's city, but I will tell my colleagues in my city $5,500 does not go very far when one has to get a house to live in and some food and pay for lights and telephone and maybe some clothes. So we are talking about a very hard life for these people if we say we are going to have to get more money out of them, which is what really this premium support program does. Mr. Speaker, two-thirds of the savings from the Breaux-Thomas proposal was additional money taken from the beneficiaries. We are talking about half the senior citizens living on less than $15,000 a year. So that is why it is very important to talk about who senior citizens really are, as though somehow we get the idea that they have this free ride on health care and they are just rolling in dough somewhere, that is not true. The facts simply are not there, particularly when Medicare does not cover prescription drugs. Anybody who looks at our program, or the program of most employers covers prescription drugs, but Medicare does not. That is why the President said, that is one of the benefits that ought to be added. If we are going to modernize the current system the way we do it, at least we have to put in prescription drugs. So I appreciate the gentleman coming down. I see another one of my colleagues, the gentleman from New Jersey (Mr. Pallone).

Mr. McDERMOTT. That should not be the result of what we do when we reform Medicare, is wind up with senior citizens being forced to either turn to their kids or do without, because not everyone has kids. My mother has four kids. We all live in Seattle. Everybody has a job, everybody is working. So my mother would be able to turn to us and we would gladly give her some extra money, but not everybody has four kids who are working, who can give them money. Or they may have four kids who are working, but they are trying to help their kid go to community college or whatever, and they do not have it to spare. So the middle class, the middle age person is going to wind up saying to themselves, should I help mother or should I help my kid?

Mr. McDERMOTT. Mr. Speaker, they never even gave us the figures on the Medicare Commission. We said, let us figure what impact would this have on the program, if we adopted the President's proposal of taking 15 percent of the surplus over the next few years and putting it into Medicare, and they would never have the staff even figure it out, because they were determined to move away from the present system and go to this premium support system where they just simply handed vouchers to everybody and then they have to make up the difference. If we think about old people and we say well, if they have a voucher and they cannot buy what they need because of where they live is a high-cost area, where do they get the extra money? If they cannot take it out of their own pocket, they turn to their children or they do without.

Mr. McDERMOTT. It is part of alphabet soup. It stands for average annual per capita cost of health care.

Mr. McDERMOTT. As we see, I say to the gentleman from Minnesota, this is exactly the point. They did not have any reason to look at it. They did not care. They said, we are going to give a defined contribution. We are going to give the same amount of money to everybody in the country. If they can buy a lot of things in one place with it, they can get prescription drugs and eyeglasses, that is fine. Wonderful. If over here they cannot, well, that is the luck. If someone happens to live in a poor county, we do not care. That is what is wrong with the defined contribution. That is why we have to stay with a defined benefit. We should define a program where if we are going to give prescription drug payments, it should not make any difference where one lives in Windom, Minnesota, or in Los Angeles, California, or Miami, Florida, or New York City, but someone should have the same set of benefits, no matter where they are. Anything less than that is not fair. But the defined contribution just closes our eyes. It just says, I do not care. I do not see the differences. I am giving you all the same amount of money, so what are you complaining about?