Jim McDermott

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I welcome this opportunity to talk today about Medicare. This is a program that we hear lots about in the news and in political campaigns, and people talk about it as though they all understood what they were talking about. I would like to talk a little bit about the program today and then talk about what all the excitement is about, what people are talking about, why they are talking. The first thing that needs to be said about Medicare is that it is a success. People will talk about it: It is about to fail, it is going to collapse, it is the end of the world. But if you were active politically before 1965, the situation was very much different for senior citizens in this country. I put this graph up because I think it is important to remember what it was like before Medicare. In 1965, 54 percent of senior citizens did not have health insurance. Less than half the people in this country had health insurance when they got to be 65. Today, in 1999, 99 percent of senior citizens are covered. Now what that has done for not only the senior citizens, but their children and their grandchildren, has been enormous because it has had an impact on them both from a financial standpoint, but also from the standpoint of the security of knowing that, as a senior citizen, you have health care benefits, and you do not have to go to your kids and have your kids take care of you, and for that reason it has been an enormous success. There are 39 million elderly and disabled people in this country who are on the Medicare program. We spent about $207 billion in 1997, and that is the last year we have good solid figures for; that is about 11 cents out of every Federal dollar goes for taking care of senior citizens in this country, and it amounts to about $1 and 5 of every dollar spent on health care in this whole country. Now let me put up the second one here. Part of the reason why we have so much discussion about Medicare is it is such a big program. If we look at the Federal budget, and we can do a short budget course here, the biggest element of our budget is Social Security which takes 22 cents out of every dollar. Defense takes 15 cents out of every dollar, and then we come to the interest on the debt which is 11 cents on every dollar, and Medicare, 11 cents out of every dollar. So, Mr. Speaker, it is the third largest or fourth largest expenditure in the Federal budget. We spend 6 percent on a program called Medicaid, which is a State program for poor people's health, and all the rest of government is 35 percent. So Medicare is an enormous program that is used by, as I say, 39 million people, both the elderly and the disabled. You hear or read in the newspaper that Medicare is going to go broke, and you say to yourself, well, how could a program that is that valuable to so many people, spends that amount of money, how could it possibly go broke? What is it about this program? I want to explain it, because it is easy when you are watching television and listening to people or reading the newspaper to not really understand what Medicare is. Medicare is actually two programs. The first program is Part A. Now, in 1965, the problem was that they looked out and they said, ``Senior citizens don't have any hospitalization, so we ought to put together a program for hospitalization for seniors.'' So Part A covers inpatient hospitalization, it covers skilled nursing facilities and it covers hospice care; and beneficiaries, senior citizens, pay a deductible and then they pay a certain amount of cost-sharing. They pay 20 percent of the bill when it comes, when they are in the hospital. Now, when they were passing this bill through the House, it started out just as Part A. As it went along, Members of the House said, ``This is dumb. Why are we passing a bill that will pay for senior citizens to go into the hospital, but do absolutely nothing for their doctor bills?'' So somebody said, well, ``Let's add Part B.'' Part B includes the physician's cost, that is the doctor's payment, the laboratory costs, x-rays, outpatient services, mental health services, and Part B is paid for from the beneficiaries. Senior citizens pay a premium. Every senior pays $45.50 a month as part of their cost, and then they also pay the cost-sharing of various parts, 20 percent or whatever. Now, here comes what the real problem is: How do we pay for that? Well, of course, the beneficiaries are paying something, but most of what is paid in by people, in Part A, 89 percent of the money comes from payroll taxes. That means everybody who is working is putting money into Part A. It is called a trust fund. Over the years with that trust fund, we increased the amount. Everybody who is working pays 1.45 percent of your earnings into the trust fund, and the employer pays 1.45 percent of your salary into the trust fund. Those are the payroll taxes that are on your stub. So senior citizens' health care is being paid for by the workers today. It used to be there were four or five workers for every senior citizen. In the future it is going to get down to the point where there are about two people working for every senior citizen drawing benefits out of this program. So when people say that the Medicare is going broke, they are saying that there are not going to be enough workers paying payroll taxes to pay for the benefits for hospitalization. It is only that part, Part A of Medicare, that is going broke or is not going to have enough money. Now, on the other side, on Part B, on this side you remember I said everybody pays a $45.50 premium, so about 22 percent of Part B is paid by the premiums, by senior citizens themselves. They pay for it. Then 76 percent of it comes out of the Treasury of the United States. Now, nobody can tell me that the Treasury of the United States, the richest country on the face of the Earth, is going to go broke. So when people talk about Medicare going broke, they are talking only about this part and not about Part B, because this part is not. There is no way we are not going to pay for the health care of our seniors in this country. Looking at the last slide again, one of the ways in which we have dealt with this problem in the past has been to make adjustments in the Medicare program. We have made adjustments every year since 1965. Every year a group of people called the trustees sit down and say, ``What is the status of the trust fund, Part A?'' They will say, ``Well, it is going to go broke in 2 years,'' or, ``It is going to go broke in 16 years,'' or, ``It is going to go broke in 5 years.'' The Congress then meets every year and makes changes. In 1987 we made a lot of changes. We said one of the things we are going to do to take the pressure off of Part A is move home health care from the payroll tax part over on to the general fund of the United States Government, the General Treasury. We have done that many times in the past. Medicare does some other things which do not show on this chart because they are not related to senior citizens directly. Since this is the major medical program of the Federal Government, anytime we want to do something for senior citizens in this country, or for health care generally, we had a tendency in the past, before I got here in 1988 at least, to stick the program in here. For instance, the financing of medical schools, it is called Graduate Medical Education, GME. We put that into Medicare, and everybody who goes into a hospital has a certain amount of their payment which is for the Graduate Medical Education. It pays for the interns, the residents, all the medical staff in the hospital. We have also a program in there for all the hospitals that take care of people who do not have any health insurance. If someone in this country is sick, they pick them up, they take them to the hospital. The hospital cannot say, ``No, we are not going to take care of you, take them out and leave them in the parking lot.'' They have a responsibility to take care of them, so they take care of them. Then where do they get the money to pay for that? Well, the money to pay for that comes out of something called DISH payments. It is the disproportionate share of people who do not have insurance. So we put that program in. We have loaded up Part A with all these kinds of programs to make sure that we took care of what was a major medical need for the entire country. In this country, for instance, if you have your kidneys fail and you need to have dialysis or a kidney transplant, you are put right into this program. Everybody in this country who has kidney problems or kidney failure ultimately winds up in Medicare. We have about 100,000 people who are covered by this program. If the program did not exist, they would have died. When I came out of medical school in 1963, if your kidneys failed, that was about it for you. Then they developed the dialysis machine and then kidney transplants, and, as those things developed over the course of time, they were added to the Medicare program. So it has been a program that has been adjusted every year for years and years and years, and has functioned very well. It is not a generous program. It certainly is not a program that does not have a problem here and there, but it has raised the life expectancy of our senior citizens. It has taken away their fear about their ability to pay for their health care. It has taken the pressure off their children. Their children, people my age, my mother is 89 and she is on this program. My father, 93, just died a few months ago. People like me, when I had to choose, shall I take care of my mother and father or put my kids through college, I did not have to make that choice, because Medicare took care of my mother and father, and I could pay attention to my kids. Medicare has simply wiped out the responsibility for most of us to take care of our parents or our grandparents, because Medicare has been so successful over the course of the years. Now, the question comes, if there is a problem in Medicare, what should we do? Should we try and modernize the present system and continue to guarantee seniors what every senior citizen in this country has; that is, a list of benefits; or should we make a fundamental restructuring, throw away the old system or ease it out the door, so- to-speak, and bring in a new one, either for universal coverage or to a defined contribution? These are two terms that anybody who is going to discuss Medicare really ought to understand. A defined benefit says that everybody who has the program, every senior citizen, whether they live in South Carolina or Texas or Washington State or New York, everybody gets the same benefits. It does not make any difference where you are. This is an American plan. It says we are going to be fair to everybody; no matter who you are, where you live, what you look like, how much money you have, whatever, you are going to get the same plan. That is why Medicare has been so successful and has so much popular support for it, because people understand it is a fair program that covers everyone. Now, if you are going to make a restructuring and you are going to in any way take away that defined benefit and replace it with simply a defined contribution, that is, then instead of guaranteeing people that they are going to get all the things that they presently get, you say to them, here is a voucher, here is X number of dollars, you take that money and go out and buy yourself a plan. Now, I sat on the Medicare Commission for the last year, and what we talked about for that year was something called a premium support plan. I want to talk a little bit about that, but I see my good friend the gentleman from Texas (Mr. Green) is here, and the gentleman has some ideas. Tell me what you are thinking about.

Mr. McDERMOTT. Mr. Speaker, I see our colleague, the gentleman from Minnesota, is here, and I will bet I know what he is going to talk about. He comes from an area where some of the problems we have already been talking about have really impacted. It is an area where the payments are not high enough for managed care to go in. He also has larger rural areas where there are not managed care programs. Am I close to being right, I would ask the gentleman? I yield to the gentleman from Minnesota (Mr. Minge).

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I rise today to honor and bring the attention of this body to the Nation's outstanding award for journalism, which was given recently to Mr. David Horsey, editorial- page cartoonist for the Seattle Post-Intelligencer. In winning the Pulitzer Prize for editorial cartooning, Mr. Horsey has capped what is turning out to be a remarkable career in the press. I have known and appreciated Mr. Horsey's work for more than 20 years since his graduation from the University of Washington and career at several of the State's daily newspapers, before joining the P-I staff in 1979. As you well know, the job of an editorial cartoonist is not to make politicians feel good about themselves, and I have been a target of Mr. Horsey's journalism from time to time. But he also has the integrity to honor as well as puncture political stands, and cartoons of both types hang on the walls of my offices in Seattle and Washington, DC. The Pulitzer might be the latest and most-recognized, but it hardly is the first journalistic honor to come David's way. He was the National Press Foundation's 1998 Berryman Cartoonist of the Year and won first place in the Society of Professional Journalists' 1996 and 1997 competition for editorial cartooning in the Pacific Northwest. He'd already won 10 SPJ regional awards for cartooning and reporting. He won the 1994 award for Best of the West journalism competition and was the first cartoonist to win the Environmental Media Award. David Horsey does more than draw. He was editor of his college newspaper and has worked as a reporter as well as a cartoonist. In 1986, as a Rotary Foundation Scholar, Mr. Horsey earned a master's degree in international relations from the University of Kent, at Canterbury, England. In 1993, he was one of only 25 Americans chosen to take part in the European Community Visitorship Program in Brussels. He's also a busy husband and parent and is at work on his first novel. Please join me today in honoring this outstanding member of Washington State's public community.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, complicated administrative procedures, difficult and lengthy application forms and even the reluctance to visit a welfare office are keeping millions of low-income seniors from receiving Medicare benefits designed just for people like them, according to a new report from the General Accounting Office. The GAP report I requested with Representative Pete Stark found that 43 percent of the elderly poor are not enrolled in Medicare's programs to assist them with their health-care costs. The federal agency said of the 5.1 million elderly who qualify for the assistance, about 2.2 million were not enrolled. My view is that GAO's findings that the high percentage of Medicare beneficiaries who are eligible, but not actually enrolled in the programs is alarming, and warrants Congressional action. These are people in our society who need help the most. Often they are women, single, living alone, and over 80 years old. We need to adequately take care of our mothers, grandmothers and aunts, rather than force them to endure a gauntlet of administrative forms and long lines at the welfare agency. The GAO report cited a lack of outreach to get people into the program, complex administrative rules, and the reluctance of some seniors to visit a welfare office as part of the reason for lack of enrollment. To correct these problems, Representatives Stark and Berry and I today introduced legislation to automatically enroll eligible beneficiaries into the programs. It's clear that Congress has failed to ensure that we reach out to Medicare beneficiaries eligible for these programs. Section 154 of the Social Security Amendments of 1994 (P.L. 103-432) directed the Secretary of HHS to obtain all information necessary from newly- eligible Medicare beneficiaries to determine their eligibility for these programs and to transmit this information to individual states. Medicare provides health insurance coverage to nearly 39 million Americans. Costs are shared by the government and the individuals. Medicare Part A--hospitalization--is paid through the federal payroll tax. But premiums for Medicare Part B--for doctor's bills--are paid by beneficiaries through a deduction from their Social Security payments. Many seniors also buy so-called Medigap policies to take care of costs not paid by Medicare. The cost of Medicare Part B premiums, which are $45.50 per month this year, can be a burden for low-income elderly. The poorest of the elderly can get help paying their premiums through Medicaid. But many seniors who are not quite at the poverty level still have trouble paying this cost. So Congress established two programs, the Qualified Medicare Beneficiary program, or QMB, and the Specified Low Income Medicare Beneficiary program, (SLMB). QMB began in 1986 and is aimed at Medicare beneficiaries below the federal poverty level. It pays Medicare premiums, deductibles and coinsurance. SLMB, started in 1993, requires state Medicaid programs to pay Part B premiums, but not deductibles or coinsurance. It is aimed at those with incomes below 120 percent of the federal poverty level. We introduced our bill to ensure that qualified and needy seniors can take advantage of these programs. Essentially, what their bill would do is automatically enroll qualifying seniors in the programs. The GAO report also stated that many potential recipients don't even know the programs exist. The report noted, ``The persistence of relatively low enrollment in the QMB and SLMB programs suggests that enhanced outreach or simplified enrollment processes would be helpful in reaching a larger share of eligible low-income Medicare beneficiaries.'' Our legislation would go a step further and ensure that Medicare beneficiaries actually receive the benefits to which they are entitled.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, this budget resolution is what I would call a magician's budget. It has a lockbox in it. We always think of a lockbox, when one sees a magician he puts the box on the table and then the pretty lady climbs inside and then he saws her in half and somehow nothing ever happens to the lady, and you say to yourself those magicians, they are amazing. Know why? Because it has a false bottom in it; it has a trick in the bottom. This budget, I challenge anybody to find a copy of this thing. One can go out there in the Speaker's hall and there are not even printed copies of this thing. So 425 Members are going to vote on this thing and they have never even looked at it, believing there is a lockbox. Now that lockbox works for one year, and the language in it says that we can open the lockbox if there has been any legislation passed that enhances retirement security. If that has happened, then we can take the money out of the box and give it away for tax breaks. Now, what does ``enhances retirement security'' mean? Well, the only bills that I have heard discussed around here come out of Chile. That is, give everybody a little book and let them have their own Social Security. Wipe out Social Security and give everybody their own account. Now, if we call that saving Social Security, well, I guess it fits the definition of enhances retirement security. Everybody will have their little book and they can be out there in the Dow and if the Dow is at 10000 when they retire, great; if it is at 4000, well, that is just the breaks. My colleagues are writing in here the capacity to pass any legislation that the budget chairman describes as enhancing retirement security. If that happens, we open the bottom of the box, all the money comes out and here comes the tax break. Exactly the same language is used with Medicare, anything that strengthens the Medicare program. Now, there is another fraud in here. People are going to talk as though there is a tax break. All the people are out there finishing out their reports for their tax today. In 2000, there is no tax reduction in this budget. All the tax reduction explodes beginning in 2001 and going out to 2015. It is an absolute fraud to tell people there is a tax break for next year, but if one listens they would think it was there. It is all going to come from this phony lockbox. There is another part of this, and that is that we are going to increase the National Institutes of Health. My colleague from South Carolina (Mr. Spratt) already alluded to that. That is also phony. One cannot make those numbers add up. I urge my colleagues to vote no.

Mr. McDERMOTT. Mr. Speaker, I urge my colleagues to vote against the rule and vote against this resolution. A little history needs to be reviewed here. During the Reagan years, we drove the budget deficit to $5 trillion. Now we have a little surplus, and those same neo-Reaganites who were saying that Mr. Reagan was so wonderful in creating that deficit do not want to pay it off. Now, they say they have a lockbox. Let me talk about that particular issue. They say they are going to save Social Security and they are going to save Medicare by putting the money in a lockbox, and that sounds like a good thing. We think of a big, strong box and very tough that we could not get the money out of it. What they have done in this resolution that had exactly 3 hours of consideration before the House committee, and we on the Committee on the Budget never saw it, we had a meeting last night and the chairman from the other body said all this does is deliver sacks of money to the appropriators to split up. But we will hear people say, oh, there is a lockbox. We put all this money in there to save Social Security. What the lockbox has is a great big trapdoor that says exactly this: If the Republicans pass a Pinochet-like privatization of Social Security, then they have reformed Social Security and they can then use the money in the lockbox for whatever they want; namely, a tax cut. The money does not have to go into the Social Security plan. It says, if they reform it, they can use the money for something else. The same way is true for Medicare. If they reform it; that is, give every senior citizen a voucher, take away their guaranteed benefits in Medicare, if they pass that reform out of here, then they can use the money for the tax cut. So this lockbox is about as phony a proposal as I have seen in 30 years. I know this year the Republicans are committed to passing this resolution, because last year they did not do anything. They did not even have a conference committee meeting. So this year they said, by God, we are getting something out of here by the 15th of April even if we do not have a single thing. What they passed out was blank pieces of paper and sent to us, this is the budget. This is how we are going to spend $1.8 trillion of their money. We will not give them one single specific. We will promise them that we are going to increase the National Institutes of Health budget. We will promise them we are going to increase this. We will promise them that. But no specifics, no public hearings, no opportunity for anybody to come before the Committee on the Budget and say what this budget did or did not do or promises. They simply wrote it in a back room yesterday. I mean, I have never been to anything quite as ridiculous as this conference committee that I was at yesterday, where we sat looking at nothing and saying they are going to pass it in the middle of the night, which is what they did. Vote ``no.''

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, as I listened to this discussion, I think maybe we should pass a resolution against dumping irony on this floor. When I hear the chairman of the Committee on the Budget say he does not know what an irresponsible tax cut is, that drips, Mr. Speaker, that drips. There was a time when we had a President named Ronald Reagan who talked about, as my colleagues know, balancing the budget and all that fiscal stuff and then proceeded to drive the deficit higher than it has ever been in the history of this country by giving tax cuts and spending out of the Social Security money. Now it is for that reason we have this motion on the floor. There are some of us who think it is time now to pay down our credit card debt, and the credit card debt is not only in Social Security, but it is in Medicare. Now I sat on the Medicare Commission for a year and watched people try and push the idea of privatizing Medicare, and that was the only solution they could come up with. Meanwhile, the President had a proposal laying on the table to put 15 percent of the deficit into strengthening Medicare, and it was not even considered by the Commission. Now I have been waiting. I sit on the Subcommittee on Health of the Committee on Ways and Means, and I am waiting for the chairman to call a meeting and make a proposal by which he can make any way in saving Medicare. Nothing has happened in this Congress. We are at the 15th of April almost, and everybody is real pleased this year that we have a budget resolution. But nothing is happening on the two biggest issues, and that is why we are concerned, that is why the motion is here, and I think that the gentleman from Ohio has also been very, very careful about the so-called lockbox that he says that he is putting the money into in the Committee on the Budget. That lockbox has a trap door in it that has a key that is possessed by the majority, and they are going to drop that door, and drop the money out and want to give a tax break, and that is the reason we want to make sure that Medicare and Social Security get dealt with before we go and give another tax break like 1986. I have been in my district, and I have not had a single soul come up to me and say, ``When are we going to have a tax break? How big is the tax break?'' They all ask about what is happening to Social Security and what is happening to Medicare, and I think this Congress will make a serious error if we do not deal with those things first before we even have a discussion in the Committee on Ways and Means around the discussion of tax breaks.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Chairman, I yield 2\1/4\ minutes to the gentleman from Texas (Mr. Doggett), a member of the Committee on Ways and Means and a former member of the Committee on the Budget.

Mr. McDERMOTT. Mr. Chairman, I yield 2 minutes to the gentleman from Florida (Mr. Davis), a member of the Committee on the Budget.

Mr. McDERMOTT. Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. Matsui).

Mr. McDERMOTT. Mr. Chairman, I yield myself the balance of my time. Mr. Chairman, I was elected in 1970 and spent 15 years in the State legislature and spent 10 years here, and I have never seen a budget exercise like this one. Last year, we have to remember, the Republicans did not pass a budget. They never got a budget resolution through the United States Congress. This year they said, we are going to do it, but we are going to do it by jamming it past people so fast they can never figure out what is happening. We listened to a wonderful stump speech by the chairman of the committee today, but when he hands the budget to us 4 hours before and gives us two pieces of paper with the numbers on it, that is all we got, two pieces of paper, to spend $1.7 billion, I say this is a smoke and mirrors budget. My colleagues can look at these pieces of paper and say there is anything in here. They can promise the world. They can promise veterans, they can promise old people, they can promise the National Institutes of Health, they can promise anything on these two pieces of paper, because there is no specificity. There were no hearings. It was simply, ram it through. Now we come to the floor. We get 40 minutes on the Committee on the Budget to talk about this issue. Now, is that because we are busy tomorrow? No. People are going home. Could we have more time on this? No, the Committee on Rules said we have to be out tonight. Where are we going? I guess we are just going out for 2 weeks, yet we cannot spend another 1 or 2 hours on this issue. The gentleman from Massachusetts (Mr. Markey) is right. I sat on the Medicare Commission, and the Medicare Commission rightly turned down the proposal being jammed through by the Republicans to privatize Medicare, but they are going to do it here. This budget has no money in it to deal with the problems of Medicare. What they are going to do is they are going to come in with their little voucher program. It is going to be called ``premium support.'' They are going to try to ram that out of the Committee on Ways and Means and run it through here and leave the old people holding the bag. This is a bad budget, and I urge Members to vote against the Republican alternative.

Mr. McDERMOTT. Mr. Chairman, I rise in support of the Spratt amendment. I voted against the Balanced Budget Amendment of 1997 because I knew it was unrealistic. I knew that when we got to this backloaded end of this process, we would be facing absolute impossibilities in meeting the needs of this country. We are there. The gentleman from South Carolina has written a budget within the rules. Those rules are caps on spending that Members are going to find impossible to appropriate within between now and the end of this session. I know everybody on the other side is waiting for the June estimates from CBO, hoping that God will come with billions more dollars to spend and that suddenly we will have some relief. But the fact is that what is happening in this House, and the American people have to understand it, is that those people who want to reduce the size of government are using a very interesting technique. The technique is, erode the tax base so that there is no money and then put social programs and defense head to head. We are headed for some very serious problems. Now, my belief was that all the mistakes that the gentleman from Wisconsin talked about were very real back in the 1980s, but now we have $5 trillion worth of debt. The gentleman from South Carolina says, ``Let's deal with Social Security, let's deal with Medicare, let's pay down the debt.'' The Republican alternative is, ``Let's figure out some way to shuffle it around on a two-page document, smoke and mirrors, and come to the Committee on Ways and Means and give away billions of dollars in taxes again.'' Now, if you will not pay your credit card debt, you deserve to lose your credit card. What is happening in this budgeting process is you have all this credit card debt that you have built up all those years, you now have a surplus, and you say, ``Let's go on another spending spree.'' This budget that the gentleman from South Carolina has says, ``We're going to take care of the essentials.'' What people worry about is their security when they are old, their Social Security, their Medicare. Yes, when the gentleman from California (Mr. Lewis) gets old, he will worry about his Medicare, too, and so will his mother and so will everybody else's mother and uncle and aunt if we do not deal with those issues. The Republican alternative has not one single penny of additional money in the budget for dealing with the problems of Medicare. It should fail. The Spratt amendment should pass.

Mr. McDERMOTT. Mr. Chairman, I yield 2 minutes to the gentleman from Massachusetts (Mr. Markey), a member of the Committee on Commerce and also the Committee on the Budget.

Mr. McDERMOTT. Mr. Chairman, I yield 2 minutes to the gentleman from Rhode Island (Mr. Weygand).

Mr. McDERMOTT. Mr. Chairman, I yield 2 minutes to the gentlewoman from Wisconsin (Ms. Baldwin).

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, I rise today to once again introduce the American Health Security Act. The single payer plan I propose is the only plan before Congress that will guarantee health care universality, affordability, security and choice. While this Congress lacks the political will to enact comprehensive health reform, the underlying needs for reform remain prevalent: health care costs are more unaffordable to more people and the number of people without health insurance continues to rise. These problems are compounded by increasing loss of health care choice and autonomy for those people who have insurance leading to disruptions in care and in relationships with providers. The American Health Security Act I am introducing today embodies the characteristics of a truly American bill. It will give to all Americans the peace of mind--the security--to which all citizens should be entitled. It creates a system of health care delivered by physicians chosen by the patient. No one will have to leave their existing relationships with their doctors or hospitals or other providers. It is federally financed but administered at the state level, so the system is highly decentralized. And it provides new mechanisms to improve the quality of care every American receives. The American Health Security Act (the Bill) provides universal health insurance coverage for all Americans as of January 1, 2000. It severs the link between employment and insurance. The federal government defines the standard benefit package, collects the premium, and distributes the premium funds to the states. The states, through negotiating panels comprised of representatives from business, labor, consumers and the state government, negotiate fees with the providers and the government controls the rate of price increases. The result is health care coverage that never changes when your personal situation does, never requires you to change the way you seek health care, and never causes disruption in your relationships with your providers. The bill provides the coverage under a mechanism of global budgets to achieve controllable and measurable cost containment that will yield scorable savings over the next five years. Unlike other single-payer proposals of the past, it provides for almost exclusive state administration provided the states meet federal budget, benefit package, guarantee of free choice of provider, and quality assurance standards. This bill explicitly preserves free choice of provider by providing a mechanism for fee-for-service delivery to compete effectively with HMOs. It will not force Americans into HMO models. The insurance mechanism of the American Health security Act is easy to use and understand. Quite simply, a patient visits the doctor or other provider. The provider then bills the state for the services provided under the standard benefit package and the state pays the bill on the patient's behalf, just as insurance companies pay medical bills on the patient's behalf now. The difference is that complicated and expensive formulas for patient copayments, coinsurance, and deductibles in addition to premium costs are eliminated. The standard benefit package is in fact extremely generous. It covers all inpatient and outpatient medical services without limits on duration or intensity except as delineated by outcomes research and practice guidelines based on quality standards. It provides for coverage of comprehensive long-term care, dental services, mental health services and prescription drugs. Cosmetic procedures and other ``frill'' benefits such as private rooms and comfort items are not covered. The extent of state discretion is substantial. The federal budget is divided into quality assurance, administrative, operating, and medical education components. The system is financed 86% by the federal government and 14% by the states. That federal pie is then apportioned among the states. For example, states with large elderly populations can be expected to require a larger volume of higher intensity services and will receive a larger federal contribution. However, the states are free to determine how that money is allocated among types of providers and to negotiate those allocations according to the state's individual needs, provided federal standards are met. The ability of HMOs to operate and compete on a capitated basis is preserved. The states must demonstrate the efficacy of their methodologies or federal models will be imposed. However, states are not required to seek waivers in advance. While the federal government will not make separate allocations to states for capital and operating budgets, the states are free to allocate capital separately to assure adequate distribution of resources throughout the state and to develop their own mechanisms for doing so. The financing package reflects the CBO scoring of this bill's predecessor, H.R. 1200, in the 103d Congress. The numbers were provided by the Joint Committee on Taxation (JCT) on the basis of the CBO scoring. Accordingly, the bill is fully financed. In fact, JCT estimates that the American Health Security Act will lead to deficit reduction approximating $100 billion per year by the year 2004. Everyone will contribute to the health insurance system, except the very poor. Employers will pay 8.7% of payroll and individuals will pay 2.2% of their taxable income. A tobacco tax equal to $0.45 per cigarette pack is also imposed. These payroll deductions are lower than current insurance costs for most businesses and individuals, even while providing universal coverage and a more generous benefit package than exists in the private market today. The key is that the money necessary to provide coverage to people who cannot afford it comes from the administrative savings achieved through the elimination of the insurance company middle man. Americans are freed from the hassle of obtaining and keeping their insurance and have a federal guarantee that their health care costs will be paid for, regardless of who their employer is, where they move, or how their personal or family situation changes. In addition to providing realistic and affordable financing, the bill provides quality assurance mechanisms that enhance system-wide quality and truly protect the consumer. It attempts to end the interference between doctor and patient. It establishes a system of profiling practice patterns to identify outliers on a systematic basis. Pre- certification of procedures and hospitalization (getting permission from insurers before your doctor can treat you) is prohibited except for case management of catastrophic cases. Practice guidelines and outcomes research are emphasized as the main quality and utilization control mechanisms which gives physicians latitude to deviate from cookbook medicine where required for individual cases without going through intermediaries. Only if practitioners consistently deviate are they subject to review to ascertain the basis for the pattern of practice. This system includes mechanisms for education and sanctions including case-by-case monitoring when the review indicates serious quality problems with a specific provider. The need for a 1:1 ratio of primary care physicians to specialists is explicitly set forth. Federal funding to graduate medical education is tied to achieving this ratio. Funding to the National Health Service is also provided to achieve this goal. Special grants are provided to meet the needs of underserved areas through enhanced funding to the community health centers, both rural and urban, to enable outreach and other social support mechanisms. In addition, states have discretion to make special payment arrangements to such facilities to improve local access to care. It is anticipated that the revenue streams established for the public health service, community health centers, and education of primary care providers will double the primary care capacity of rural and other underserved areas in this country. In summary, the American Health Security Act will provide all the citizens with the health care they need at a price both they and their country can afford. It is clear that we cannot afford the price of doing nothing.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, yesterday the Medicare Commission finished its work but did not come out with a recommendation. It did not come out with a recommendation because the thrust of the commission was to privatize; that is, to get rid of Medicare as we have known it and move it into the private sector. Now, the people pushing that idea are the very people in this House who have opposed the Patients' Bill of Rights. If we are going to take all the senior citizens in this country, and the disabled, 39 million people, and throw them into the private sector, and will not give them the protections of a Patients' Bill of Rights, there is no justice in that kind of system. The Commission rightly rejected it. The Commission refused to consider the President's addition of 15 percent of the surplus. The Commission refused to consider the President's proposal regarding people between the ages of 55 and 65. This House now has to come to grips with it.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, we're here today because we share a common goal. We all want the peace process in Northern Ireland and the Irish Republic to work. As hard as it is to get folks to sign a peace agreement. It's even harder to make sure that it gets fully implemented. We feel strongly that the best chance we have to ensure the Good Friday Peace Agreement is fully implemented is by creating jobs and economic growth. The legislation we are introducing today is the first comprehensive effort by the United States to create real jobs and real investment in Northern Ireland and the border counties of the Irish Republic. Our legislation uses existing trade and investment tools to stimulate tangible economic assistance to the people of Northern Ireland and the border counties. Faced with continued resistance to the Irish free trade efforts of the past, we concluded that a fresh attempt to fashion legislation that could address European reticence while quickly delivering meaningful trade and investment assistance to Northern Ireland and the border counties was in order. The legislation provides for the creation of a $300 million Overseas Private Investment Corporation (OPIC) equity fund. Such a fund generates private sector focus and interest in Northern Ireland and the Border area and makes sure that women entrepreneurs have meaningful access to that funding. We believe that the multiplier effect from such a fund could generate a total $1.2 billion in new private investment. Our legislation also relies on the Generalized System of Preferences (GSP) to assist Northern Ireland's exporters to grow their economy and job base. For those of you who don't know, the United States Generalized System of Preferences (GSP) provides preferential duty-free entry for approximately 4,500 products from 149 designated beneficiary countries and territories. GSP lowers the tariff rate for goods being imported into the United States. GSP already is in place for portions of the European Union. Because beneficiary designees are not required to change import policies. GSP designation for Northern Ireland and the border counties of the Irish Republic would not require them to seek an amendment from the EU or the Treaty of Rome. Finally, the legislation relies on the International Fund for Ireland to increase funding for projects that will create rapid job growth in the private sector. The bill recommends six projects for funding and support that will provide both immediate and mid-term job generating growth. We feel strongly that now is the time for the U.S. to send a clear, serious and solid signal of support to the parties in Northern Ireland that are struggling to implement the peace agreement. Stimulating real job creation through improving access to our marketplace and encouraging private investment would send a strong signal to everyone that the price of peace could very well be prosperity.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, this is a very curious bill brought out by the Committee on Ways and Means with a recommendation that it do not pass. Now, very seldom does that happen, unless it is a very political bill. And this is nothing but politics. The President has already said he is going to repeal it, and he really does it for several very good reasons. H.R. 975 would impose quotas on steel imports outside our U.S. trade remedy laws and our U.S. obligations in the World Trade Organization. We would simply be running straight into the world trading rules headfirst, knowing it, and knowing that we are out of bounds. Now, that does not make any sense. We heard from Members on the other side, the gentlewoman from Connecticut (Mrs. Johnson) and others, about the problems created by an absolute quota without knowing anything about what the impacts of that are on those people who use the raw product for finished products. When we built the trade center in Seattle, we needed a piece of steel to span the freeway to rest the building on. There was no place to buy that steel except Korea. That is where we bought it. Now, if you want to say to whatever construction project or whatever is going on in this country, if they do not make it in the United States, you cannot do it, this is the bill to support. Because you are not taking into account, and one of the real problems with this debate is, there are lots of questions, none of which are being answered, but what do you do with the supplier or the producer who needs the raw material that is only obtained in another country? Now, there is an additional problem and that one is a much more philosophic problem. We live in a world trading market. If we start this business of trade wars and we put up our barrier against somebody else and they put theirs up against us, we will soon see what Smoot- Hawley did back in the 1920s. We do not want to go back to that. Vote against this bill.

Mr. McDERMOTT

Mr. McDERMOTT. Madam Speaker, the House of Representatives has become like a scene from Alice in Wonderland. Yesterday in the Committee on Ways and Means we were asked to bring out a bill by the Speaker with a recommendation that it do not pass because the Speaker wants it brought to the floor but does not intend to vote for it. Today, even more amazingly, we have a foreign policy issue where the President of the United States and the Secretary of State have asked that it not be voted on now while the peace negotiations in Kosovo are proceeding. Yet the Speaker brings it to the floor intending not to vote for it, and he is third in succession in the United States Government. It is the President, the Vice President and the Speaker of the House; the third most important man in the country is running foreign policy here while we are putting at risk our soldiers in Kosovo. Now I ask you, Mr. Speaker, do not bring this issue to a vote today. It is irresponsible, it should not be done, it puts our soldiers at risk, and those of us who lived through the Vietnam era say do not do this again.

Mr. McDERMOTT

Mr. McDERMOTT. Mr. Speaker, let me set the record straight. The money that comes in here belongs to the American people. But what we fail to deal with is the history. All during the Reagan administration, Democrats and Republicans in this House spent Social Security money and used it like a credit card. We built up a $5 trillion debt for the Cold War. Now, after almost 10 years of work, since I have been in the Congress, since 1988 and under Mr. Clinton for the last few years, we have got a surplus. What does the majority leader offer us? Let us take the surplus and give it away and leave that credit card debt there. No American family, when they receive money in a Christmas bonus or whatever, says, ``Well, we got all this credit card debt; let's go get deeper in debt.'' That would not be a financially prudent family. The United States Congress, acting on behalf of the American people, ought to pay off the credit card debt in Medicare and in Social Security.

Mr. McDERMOTT

Mr. McDERMOTT. But there is another way in which women, if you have individual accounts, not only do they make less but they work less numbers of quarters, for reasons of childbirth and for reasons of staying home and taking care of family members. Generally men do not leave their job and take care of their mother or their father or their in-laws.

Mr. McDERMOTT. I think there is one other thing that the gentlewoman from Florida (Mrs. Thurman) brought up and I think needs to be emphasized, and that is the effect on women. If you have individual accounts and you work and on the basis of your job you put in whatever percentage, most women in this society make less than men do.

Mr. McDERMOTT. I think there is one other thing that I want to emphasize. Sometimes you cannot say something too many times. That is, this whole disability business, because I have got an incident in my own district right now that is right in the middle of my mind. This is the best disability income program in the world. You cannot buy one any better than this. We had a policeman who was injured and subsequently died, 38 years old, a wife, kids 5 and 3. Now, they go into the Social Security system and she is guaranteed a benefit for herself and those children for the rest of her life and for the kids up to the age of 18. Most young people in this country do not know that they are walking around with this insurance policy in their pocket. It is not one you want to collect on but it is like your fire insurance. You buy fire insurance on your house hoping you will never collect on it. The same is true in terms of this. To make this appear that this is just a program for old people is simply to misrepresent what the Social Security system is all about.

Mr. McDERMOTT. Mr. Speaker, the gentleman from Texas (Mr. Doggett) is to be commended for having scheduled this the day that we passed the most irrelevant resolution that I can imagine. It was empty in all its aspects. I would say to the gentleman from Texas, as I sit here and think about this, I was thinking about my grandfather. He was a second generation American who went to the second grade. He could read the newspaper and he could write, basically, but had no assets. But in the investment industry in the 1920s there was a guy named Samuel Insole who had the electrical industry all locked up, and he was selling stock all over the United States. This was the time when we had private retirement. Everybody had their own retirement. There was no Social Security. So someone saved their own money. Well, Insole came down into central Illinois, where my grandfather was, selling this stock. My grandfather, no economist, no great education, said to his wife, if this stuff is so good why are they selling it in the cornfields of Illinois? Why don't they sell it in Chicago? When it crashed and all the old people in this country had nothing, that is when Franklin Delano Roosevelt came with Social Security. Because when people tried to invest their own money in the stock market, some people made it and some people got clobbered. So this has been a system now in place for 70-some years, I guess 60 years, that has basically been protecting senior citizens. When people come here talking about let us privatize it, let us get away from a situation where we all pay into the same pot and we take out as long as we live and we share the risk, all Americans share the risk together, the move in the Committee on Ways and Means now is, let us privatize it and give everybody a little book, and they will put their money in their little book, and they will know how much they have, and they can get rich or they can go in the ditch. That will be their choices. Who knows? The model they use comes out of Chile. People in this country ought to take a very careful look at the Chilean example. First of all, it took a dictator, Augusto Pinochet, to wipe out the system in Chile of a universal system and give everybody individual books. They had to wipe out the labor unions, and they ultimately set this system up. Two years ago, when the stock market was not doing well, the Chilean government said to people, please do not retire because the stock market is down and people will not have enough to live on. My view is that we ought to be creating a solid system that goes into the future and not go back to the 1920s in this country.