Don Nickles

Mr. NICKLES

Mr. NICKLES. Madam President, I inform my colleague from Maryland that CBO estimates that there will be zero money spent in 2003.

Mr. NICKLES. Madam President, I take this opportunity to inform the members of this distinguished body about S. 1383, the Legislative Branch Appropriations bill for fiscal year 2004, as reported by the Senate Committee on Appropriations. The pending bill provides $3.7 billion in new budget authority and $3.1 billion in new outlays for fiscal year 2004 to fund the operations of the Senate and House of Representatives; the Architect of the Capitol; the U.S. Capitol Police; and the Library of Congress. With outlays from prior years and other completed actions, the Senate bill totals $3.7 billion in budget authority and $3.7 billion in outlays. For discretionary spending, which represents the bulk of the funding in this bill, the Senate bill is $37 million below the subcommittee's 302(b) allocation for budget authority, and it is $43 million in outlays below the 302(b) allocation. The Senate bill is $227 million in BA and $0.9 billion in outlays below the President's budget request. In addition to providing appropriations for fiscal year 2004 for the legislative branch, the committee-reported bill contains various supplemental appropriations for fiscal year 2003. The fiscal year 2004 concurrent resolution on the budget, H. Con. Res. 95, established levels for fiscal year 2003 and provided an allocation (pursuant to section 302(a) of the Congressional Budget Act of 1974) to the Committee on Appropriations for fiscal year 2003 in the joint explanatory statement accompanying the resolution, see page 103 of H. Rpt. 108-71. The committee has designated all the appropriations for fiscal year 2003 as an emergency requirement pursuant to section 502 of H. Con. Res. 95. As a result, these emergency appropriations do not count against the committee's allocation. As a point of information, I would like to call my colleagues' attention to section 302(c) of the Congressional Budget Act. Section 302(c) provides that it is not in order to consider a bill making appropriations for a fiscal year until the Committee on Appropriations has made the sub allocations required by section 302. It appears that the Committee on Appropriations has yet to file 302(b) allocations for 2003. This point of order may be waived, or a ruling of the Chair appealed, with 60 votes. The fiscal year 2003 supplemental funding in this bill includes $1.889 billion requested by the President as an emergency requirement, and an additional $100 million added by the Senate appropriations committee. I am concerned that very little of the President's request or the additional $100 million is worthy of the emergency designation provided for in section 502 of the H. Con. Res. 95, the fiscal year 2004 budget resolution. The criteria for designation as an emergency are that the funding is 1. necessary, essential, or vital (not merely useful or beneficial); 2. sudden, quickly coming into being, and not building up over time; 3. an urgent, pressing, and compelling need requiring immediate action; 4. unforeseen, unpredictable, and unanticipated; and 5. not permanent, temporary in nature. While some of this funding may be necessary, it is not ``sudden'' or ``urgent.'' The President requested and Congress approved a $78.5 billion fiscal year 2003 supplemental just 3 months ago, and there is no reason why these requests could not have been considered at that time. Further, the Congressional Budget Office reports that only $37 million of the $2.0 billion in emergency budget authority in this bill will actually be spent in the 3 months remaining in this fiscal year. All of this $37 million is attributable to the budget authority provided for wildfire suppression and the space shuttle. Thus, the balance of this funding could instead be addressed in the regular fiscal year 2004 spending bills. Therefore, I strongly urge the President and the conferees on this legislation to consider carefully if all of this emergency supplemental funding should be retained in the final version of this bill. I ask unanimous consent that two tables displaying the Budget Committee scoring of the bill be printed in the Record at the conclusion of my remarks.

Mr. NICKLES

Mr. NICKLES. Mr. President, I believe we are in the process of trying to wrap up debate on a few amendments. I believe momentarily Senator Feinstein and Senator Chafee and I will be discussing our amendment. I will make my comments very brief. I know Senator Feinstein wishes to speak on it. I hope we can conclude debate. I think there will only be two more amendments. I urge colleagues to make their comments brief and let's vote and finish action on this bill. I will defer my comments on the amendment because I believe the Senator from California is ready to speak.

Mr. NICKLES. Mr. President, for the information of our colleagues, I am going to make a couple comments on this amendment. There may be an amendment by the Senator from Pennsylvania that will require a vote on or in relation to Senator Corzine's amendment. I think we are close to finishing. I hope we can. I just make those comments. I compliment Senator Feinstein and also Senator Chafee, Senator Alexander, Senator McCain, and others for supporting this amendment. Senator Chafee mentioned we passed the income-related Part B premium several years ago with 70 votes. I believe the majority of people, a strong majority--looking at the people who voted for it--are still here. I hope we vote for it again. Medicare has some big problems long term. The bill before us has a lot of new subsidies but does not have a lot of reform to make it affordable for future generations. Part B right now is subsidized by general revenues 3 to 1 Federal Government and individuals. The amendment before us on Part B says if individuals have income above $100,000, they should pay at least 50 percent. If they have income above $200,000, they should pay it all. For couples, that would be $400,000. A couple could make $400,000 before they pay all their Part B premium. Surely we can do that. Why should we ask our kids and/or our grandkids, who might have incomes of $20,000 or $30,000, to be subsidizing individuals to that degree? I compliment my colleagues for this amendment. I will read from the annual report of the board of trustees of the HI trust fund. It says: Similarly, SMI general revenues in the year 2002 were equivalent to about 7.8 percent of personal and corporate Federal income tax collected in that year. If such tax is to remain at the current level relative to the national economy, then SMI-- That is Part B-- general revenue financing in 2077 would represent roughly 32 percent of total income taxes. That is almost one-third of total income taxes. That is not affordable. That is not sustainable. So I think the amendment we have before us by Senator Feinstein and Senator Chafee and others is a small step in the right direction to try to make this system more affordable for future generations. I compliment my colleagues for this amendment. I urge our colleagues to support this small step toward reform. I yield the floor.

Mr. NICKLES

Mr. NICKLES. I believe our side has 2 minutes remaining. I ask unanimous consent for 4 minutes and yield the Senator from Alabama 2 minutes.

Mr. NICKLES. Mr. President, I wish to compliment Senator Sessions for his leadership. I urge my colleagues to vote in favor of the Sessions amendment to strike out this provision that does not belong in a Medicare bill. This is a Medicaid provision. This is a welfare provision. We are going to reauthorize welfare later this summer. It should be considered at that time. This is part of the reforms that were made in 1996 when we passed the welfare reform act, one of the most successful bills we ever passed. If we are going to undermine that, do it with a little consideration. The administration opposes this because it doesn't belong here, and it is bad policy. This turns immigration policy on its head. Let me read the current law on immigration policy. For a legal immigrant who comes into this country, it is required that the sponsor of that immigrant sign an affidavit of support to the U.S. Department of Justice which states: By signing this form, you, the sponsor, agree to support the intending immigrant and any spouse or children immigrating with him or her, and to reimburse any Government agency or private entity that provides these sponsored immigrants with Federal, State, or local means-tested public benefits. This provision in the underlying bill would turn this law on its head and would basically take hundreds of millions of dollars away from Medicare recipients and give them to immigrants. So this is changing immigration law and Medicaid law. It needs to be dealt with in the Medicaid bill and welfare reform bill. It doesn't belong in this bill. I urge my colleagues to vote in favor of the Sessions amendment.

Mr. NICKLES

Mr. NICKLES. I compliment my colleague from Pennsylvania. Especially this late at night, when a lot of us are thinking about our departed friend and colleague, Senator Thurmond, I appreciate his withdrawing this amendment. For the information of our colleagues, I think we are very close to finishing this bill. We may have one or two rollcall votes. I think we are just about ready to vote on the Feinstein-Chafee amendment and possibly one other amendment, and I think we are very close to be able to vote on final passage, for the information of our colleagues. I yield the floor. I suggest the absence of a quorum.

Mr. NICKLES

Mr. NICKLES. Mr. President, I suggest the absence of a quorum.

Mr. NICKLES

Mr. NICKLES. Mr. President, I believe there is a unanimous consent request that the next amendment be the Grassley-Baucus amendment. I think they are working on that. I ask unanimous consent to make a statement on the bill for not to exceed 20 minutes.

Mr. NICKLES. Mr. President, first I want to make a couple comments on the bill, then talk about a couple amendments we will be working on. I wish to compliment first Senator Frist and Senator Grassley, Senator Baucus for getting us here. I also compliment President Bush because he has been pushing for us to expand Medicare to include prescription drugs. I happen to share that goal so I compliment him because here we are. I believe in the next 24, maybe 28 hours, we will eventually pass a Medicare bill that will provide prescription drugs. That is our objective. That is a good one. I hope we will be successful. I also hope we will pass a bill that is affordable. I am not sure the bill before us now meets that definition. I want to talk about what is in the bill and maybe some of the challenges we have confronting us, but again I want to compliment the chairman of the Finance Committee. This year we did have a markup in the committee, and we did report out a bill. I didn't vote for it. I will explain why I didn't vote for it. But I hope to vote for a bill either on the floor of the Senate or as the bill comes out of conference. At least we had a markup. I am on the Finance Committee. The Democrats were in control of the Senate last year. We didn't have a markup in the Finance Committee. We basically had a markup on the floor of the Senate. We spent some time on it, several weeks, but we didn't pass a bill. It didn't become law. It was very frustrating. We didn't do the normal process. This year I don't quite agree with the final outcome as it came out of committee, but at least we had a chance. We had a bill. We had a markup. We considered dozens of amendments. We reported out a bill. Now, the Senate has been on this bill for 2 weeks. We have considered a lot of amendments. We will consider more both tonight and tomorrow. So my compliments to the leader and to the chairman of the committee for getting the bill to where we are. Let me talk a little bit about the current status of Medicare. Medicare has big challenges confronting it today. It is a very popular program, but it is a program that really can and could and should be improved. It is a very expensive program. The cost of Medicare has more than doubled since 1990. In 1990 we were spending $100 billion. Today we are spending over $200 billion. But that doesn't show the liabilities that we already have in the system. Medicare has a shortfall of $13.3 trillion. By ``shortfall'' I mean benefits that have been promised that are not funded, not paid for. That is an enormous sum of unfunded liability. The total unfunded liability of Social Security is $4.6 trillion. The total debt held by the public is $3.6 trillion. So we are looking at Medicare's shortfall actually exceeding or tripling the total amount of debt held by the public. I heard many colleagues, when we talked about raising the debt limit, say we should not do this. What we are doing on Medicare and the bills we are considering right now will increase the unfunded liability in Medicare probably by $4 or $5 or $6 trillion, greater than the total Social Security shortfall and far greater than the debt held by the public. This is an enormous expansion of benefits we are saying we will pay for. People need to know it. Is it affordable? Just to pay for the Medicare shortfall today according to the 2004 budget of the U.S. Government it says to pay the actuarial deficiency as a percent of discounted payroll tax base--we would have to increase Medicare taxes 5.3 percent on top of the 2.9 we are already paying just to pay for this $13.3 trillion. We would have to more than double the tax. Actually, it would be, in effect, almost tripling the Medicare tax which is presently 2.9 percent on all payroll, not just on the Social Security base of $80,000-some. This is on all payroll. You would have to increase it an additional 5.23 percent, according to Government submissions and budget submissions, to cover the 75-year projections. Social Security would only have to be raised 1.87 percent. So, again, it shows that at least actuarially, Medicare is in much worse shape, about three times worse shape as Social Security. And that is without us passing additional benefits on top of it. So I want my colleagues to be aware of that. This is a very unstable house, and we are getting ready to build another deck on top of it. That is the reason I am raising some of these concerns. I want our colleagues to be aware. Maybe we will do it anyway. Maybe it is the popular thing to do. But at least I don't want it to go without saying: Wait a minute, did anybody not pay attention to the fact that these are enormous liabilities. They are going to be very expensive and somebody is going to have to pay the bill sometime. In the past, we paid for Medicare with the payroll tax. That has had some limiting effect. When trust funds were drawn down, people said: We have to do something. So there would either be a tax increase or there might be some reforms. We passed Medicare reforms in 1997. We spent a lot of the last few years maybe undoing some of those reforms, but it did save money. Now we are getting ready to expand Medicare at a greater percentage than it has ever been expanded since its creation in 1965. Again, I favor making significant improvements in Medicare. I find the system to be very obsolete in the benefits it provides. It has serious shortfalls. Medicare doesn't provide prescription drugs. It should. Medicare doesn't have preventive care, ordinary, routine checkups in many areas. It should. A good health plan certainly would do that. It has a hospital deductible of $840. That is way too high. Then it has a different deductible for doctors. They should be a combined deductible, and it should be much lower than $800 and $900 combined. It is a system that leaves a lot to be desired. It doesn't have catastrophic coverage. So if a person gets really sick and they are in the hospital for a long time, after a certain number of days Medicare doesn't pay it. That doesn't make sense. You really should have insurance to pay for something you can't afford to pay for, and this system doesn't do that. As a matter of fact, a lot of our health care system, in my opinion, is broken because we end up insuring for relatively almost first-dollar costs, and we don't insure in some cases for the really expensive things or at least that is the way Medicare is. That is not a good example. We should change that. You should insure for those events that you can't afford. You shouldn't be insuring for ordinary, routine things that obviously individuals can pay for. I make the analogy to automobiles. You should insure for the accidents, the collisions, for something very serious, something very expensive. You should not insure to fill the car up with gasoline or to change the oil. In health care costs, I am afraid we insure for almost everything, and that greatly increases the cost. My major complaint with the bill before us is that I want to improve and expand and modernize Medicare. I want to improve Medicare. My mother is on Medicare. I want her to have a better health care system. I want her to have a health care system that is comparable to what we have for Federal employees. I would like for senior citizens to have a good base plan and then be able to choose any of a variety of other plans they wish to have--keep what they want or they can choose something better. They can have an integrated benefit system. Unfortunately, I am not sure that is what we are going to pass probably tomorrow night. The bill we have before us--the reason I voted against it in Finance Committee, and I may vote against it on the floor of the Senate, is because I find the bill very expensive and very light on reforms. It doesn't make as many reforms as I would like and it is expensive on the subjects. I have mentioned we would have to increase payroll taxes by 5.23 percent just to make up for the shortfall. That doesn't include the drug benefit. I have been told by tax estimators that you would have to add another .7 or .8 percent to pay for the drug benefit we are adding. I am concerned that the drug benefit we are adding will be much more expensive than anybody estimates. The budget resolution says it was $400 billion. I compliment the chairman and the House, who are staying with the $400 billion estimate, but I would project that many years from now, it will not be a $400 billion expansion; it will be much closer to $800 billion by the end of 10 years. I am making this prediction and I mean it. This is not just a guess. Maybe it is a little more than a guess, but I think ultimately you will see a few things happen, and I will talk about the basic benefit we are offering and why I think the cost will exceed our estimates. In the first place, the subsidies are very large indeed. For people below 160 percent of poverty, the Federal Government is going to pay almost all the drug expense. For individuals in this income category, as estimated by CMS--they estimate usage--drug usage is $3,200 for people below poverty, and then a little less than $3,000 for incremental levels above that. But the beneficiaries at the lower income levels pay very little. The Government pays almost all of it. I have heard some people say, wait a minute, you want to change that. I am questioning, is this affordable? For income levels in this category, the lowest income, the poorest of our seniors, an individual would pay $82 and the Federal Government would pay $3,214. An individual pays 2 percent and the Federal Government pays 97\1/2\ percent. That is a very high ratio. The next level is not much different. The individual would pay 5 percent and the Federal Government pays 95 percent. The next level up-- and this is with an income up to about 150 percent of poverty. For a couple, the income is about $19,576. So the Federal Government would pay 90 percent and the individual would pay 10 percent. Those are very generous subsidies. Looking at the estimate, I would guess that if the Federal Government is going to pay 97 or 95 or 90 percent, you will have drug utilization go up maybe well beyond these figures. These figures come from CMS, and they say those are figures for people with insurance, but I would guess the people who are on this level--Medicaid eligibles, and many States have a lot of restrictions on the number of prescription drugs they can have. In many States you are limited to three a month. If the Government is paying 97\1/2\ percent, and there is not a limitation of three or so many a month and it doesn't have the limitations of the States because the States are requiring cost sharing of 30, 40, or 50 percent, my guess is it will go up dramatically. I think in all levels utilization will go up dramatically. Maybe I am wrong. I am concerned about it at least for these lower income levels, the income levels below 160 percent of poverty. The bill we have before us is probably too generous, but maybe not affordable. I hope I am proven wrong. But I have been in business. I took over management of a company when the company had a health care plan where the company paid 100 percent of health care premiums and costs. That really wasn't sustainable. I think a lot of other businesses found out, wait a minute, that is not affordable. Most businesses started putting in 80/ 20 ratios, where the beneficiary paid 20 percent, or 10 percent. I don't mind lower income people having to pay a smaller copay; I am fine with that. But I think we are starting out so generous that it will encourage overutilization, and costs will explode. Once you start out with a percentage like that, it is hard--I can see starting at 80 percent and maybe going to 90, but I don't see going from 97 percent to 90 percent. A future Congress may be forced to make those decisions. It may not be affordable or sustainable. The demands may be so great that it is not sustainable. Is this a good deal for seniors? Certainly, people on the low end, below the 100 percent of poverty level, with an income of $9,600 and, for a couple, $13,000, the copay is $82 and they will receive almost $3,300. Under present law, according to CMS, they pay $734. So the amount they pay goes down almost 80-some-odd percent. This is a great deal for low- income if we can afford it. The next level would pay $150. Currently, they are paying almost $1,200. Again, they are only paying about one- eighth of what they were paying previously and getting a very nice return. This is 136 to 150 percent of poverty--that would be for individuals with incomes, and for a couple it would be up to $19,500. They would pay only $343. Presently, they are paying $1,300. So it is a big improvement for them, and they are receiving about $3,000 in benefits. So there is a very good and generous benefit--maybe the most generous benefit anybody could propose is for incomes below 160 percent of poverty. Above that, it is not such a good benefit. I have heard some colleagues complain it is not so good for individuals with incomes above 100 percent of poverty, with incomes of about $15,400 or, for a couple, of about $21,000. Above that level, the formula changes. Then they have to pay a premium of $35 a month. Then they have a deductible of $275 a month. Then they receive a drug benefit after they get through the deductible of 50 percent up to $4,500. Then above $4,500, for the next $1,300, they would have to pay 100 percent. Above that level, they get 90 percent. Well, that is not a great drug benefit. It is not great. It is OK, maybe, but it is not as good as a lot of plans. Looking at a lot of plans people now have, at levels like this, an individual for this plan today would be paying, under the new bill, $1,600. The individual today is only paying about $1,162. They would pay about an extra $500 for maybe a similar benefit, and it is estimated they would receive a total of about $3,000. Actually, if you look at the upper income--above $21,000 for a couple--in every category they pay more under the proposal we have before us than they are under current law. So it is not a real good deal for them. It is voluntary. Maybe they will drop out. If they drop out--it depends on the health status, but if they are healthy, it may make things worse for the taxpayers. They may not help subsidize others who are less healthy. It is a very generous benefit for lower income, below 160 percent of poverty, and it is not such a good deal for upper income. A lot of people above 160 percent of poverty have drug coverage. A lot of people below that have health care. Below 160 percent, you cannot beat this deal. Above it, you can beat it. A lot of people have better. You say what do you mean? They might have a union plan. We had amendments to make sure those were made whole. We wanted to subsidize them to make sure they didn't lose a dollar. The CBO estimated that 37 percent of the people who have private health care coverage are going to drop them and go into this Government plan. They have health care through their employer, and their employer is going to say if Uncle Sam is going to do this, why don't you get your health care and drug benefits through Uncle Sam instead of through the employer. A lot of employers are struggling to pay for retirees' health care benefits, so they would welcome this. So you will see a lot of companies dumping or dropping their health care coverage, even though it may well be more generous than what we have proposed before us, the bill before us in the Senate. Likewise, many States have drug programs, many of which may be more generous, not necessarily for low-income, but they have a plan, or some system, or other type of entity that we will be picking up. States were making a contribution, maybe it is a combination of State and Federal, to Medicaid. They are dropping it. Where the States were making a contribution in the past, we will be assuming that contribution. This is a big federalization, frankly, of the benefit that is provided in the public sector and private sector. Seventy-seven percent of seniors today have some type of drug insurance. This is going to preempt most of that and say the Federal Government is going to take it over and, in some cases, not do as good as the private sector has done, maybe not even as good as most of the public sector. Is it affordable? The estimates are it is $400 billion. I already mentioned I am concerned, at least on the levels where the Federal Government subsidies are 97 percent or 95 percent or 90 percent, that utilization will exceed expectations. If the Government is going to pay most of the cost of the drugs, my guess is people are going to say: Give me more of those drugs. There is not a restriction that is going to say you can go to one doctor, go to this specialist for whatever ails you, you can go to another specialist for whatever ails you, and, frankly, if the Government is going to be picking up 95 percent of the drug care costs, people are going to say: Give me some of those. They are going to see the ads on TV. They may see Celebrex--it has a great rhyme to it--or see some other ad that looks good, and they say: Doctor, give me some of that. And if Uncle Sam is going to be paying 97 percent of the cost, why not? That makes your patient happy. Maybe it will work, maybe it will not. My guess is we are going to see, where the third party or Government is paying 90-some-percent of drug care costs, that utilization will soar and that will greatly drive up the cost. I think in the drug benefit formula where we have basically a formula above 160 percent of poverty where the Government says you pay your $35 a month and you pay your deductible of $275 and then Government will match you 50 percent up to the first $4,500, a lot of people who might have a drug annual expense in the neighborhood of $1,200 or $1,300 may say: I do not get my money back until I use or consume $1,300 worth of drugs, and I am paying a monthly premium; therefore, I am going to start taking advantage of it. If Uncle Sam is going to be paying 50 percent, I want more. So their utilization may go up and may go up dramatically. So that could increase costs. Then we have this so-called doughnut amounts above $4,500 to where presently individuals would have to consume or pay for 100 percent up to $5,813. A lot of people are going to say we need to fill that up. I ask unanimous consent for an additional 8 minutes.

Mr. NICKLES. Mr. President, they are going to say we get 50 percent up to $4,500, and then it stops and we go to catastrophic, let's fill that in. The estimates were by some, if you filled that in, it would cost you another $200 billion. My guess is we are not going to do it this year, but we will do it sometime probably in the next 3 or 4 years. That will cost a bunch of money. Then people are going to be complaining: This is really not a good deal. You get 90-percent subsidy over here but 50-percent subsidy over here. We need to make that 60, 70 percent. Frankly, that 60 percent is not high enough. Let's move that category up to 200 percent of poverty. Let's move it up higher. When you make those kinds of incremental changes, and I know many of the advocates want to do that--they stated that. I acknowledge it, and everybody around here should acknowledge that is their desire--I expect they will be successful. There are a lot of people who will say this is not near as good a deal as I have right now, and they are going to lobby Congress: We need a greater share; we need a greater match. Why not go 50/50? Can't we go 60/40, 80/20? Can't we fill in the donut and insure that whole amount? When you make a few of those changes, you have a bill that is not going to cost $400 billion, it is going to cost $800 billion. In that last year, the line will be going straight up. I am concerned about that situation. I am concerned about the expense of it. People say: What do we do to make it more affordable? Did we make some of the changes that would help make it more affordable? Did we make some of the reforms, some of which are not easy? I have been an advocate for increasing the eligibility age, making Medicare the same age as recipients of Social Security. Right now with Social Security, you do not receive Social Security at age 65, you receive full retirement Social Security at 65 and 10 months. By the year 2022, you have to be 67 to receive Social Security. I happen to think because people are living a lot longer and because Medicare has such enormous financial problems, we should make the Medicare-eligibility age concurrent with Social Security. Basically, by the year 2022, one would have to be 67 before receiving Medicare. I know that is not an easy vote, but, frankly, this Senate voted for it just a few years ago. We voted for it, I believe, with 62 votes. We passed it. We can, could, and should pass it again. It will save our kids a lot of Medicare taxes. That is one reform. I doubt we are going to offer that amendment, but it has been proposed and discussed, and I think it should be seriously considered. Another amendment will be offered by Senator Feinstein, myself, and Senator Chafee tomorrow that basically means testing Part B premiums. I will talk about Part B premiums, and it gets too confusing for a lot of people. We subsidize Medicare. Most people think we pay for Medicare just with the payroll tax. The payroll tax, I already mentioned, is very deficient. As a matter of fact, it is 2.9 percent of all income, not capped. If somebody has an income of $1 million a year--Michael Jordan, I think, makes a little more than that--if they make an income of $1 million, they pay $29,000 a year into Medicare. Yet we are still going broke. The actuaries say we have to add another 5.2 percent on top. We have to have 8.1 percent to pay for the liabilities we currently have. That is without a drug benefit. If we add a drug benefit, we would probably need to add 1 percent on top of that. Now we are talking about real money; we are talking about 8 or 9 percent of the liabilities in Medicare. We need to make reforms. One would be to means test Part B premiums. Payroll tax pays a lot of money, but general revenue pays a lot of money into Medicare. To give an example, this year general revenue, not the payroll tax, general revenue coming from all taxpayers in the year 2003 will put in about $81 billion. In the year 2013, it will be $189 billion. So it more than doubles in the next 10 years, and it does not keep up. That general revenue portion is the individual recipient pays one- fourth of Part B. This is what pays the doctors. The recipient pays one-fourth of it, and the taxpayer or the general revenue fund pays three-fourths of it. What that means is we are asking our kids to pay for three-fourths of our doctors visits. At least for those with upper incomes we should not be asking our kids, who are maybe making $20,000 or $15,000 or $30,000, to be paying part of the doctor bills for at least the wealthier seniors. Not all seniors are low income. So the amendment we will be considering probably tomorrow evening says instead of having a 25-percent copay for beneficiaries on Part B, if your income is very high, it will be 50 percent; if it is much higher, it will be 100 percent. I believe the levels are if an individual has an income of $75,000 and $100,000 for a couple, their percentage would increase from 25 percent to 50 percent. Likewise, for a couple, if an individual had an income of $100,000 or the couple had an income of $200,000, they would have to pay 100 percent of the premium. So we would not be subsidizing them. That would take a lot of pressure off the system. The most recent trustee report states that SMI, that is Part B revenues, in 2002 were equivalent to about 7.8 percent of personal Federal income tax collected that year. If such taxes remain at their current level relative to the national economy, then Part B general revenue financing in the year 2077, 75 years from now, would represent roughly 32 percent of total income taxes. Now, that is staggering. About a third of all income taxes would have to be paid just to pay the Part B subsidies that we now have in the system. That is not sustainable. My point is, we have to have a Medicare system that provides better benefits. Yes, I agree. We also have to have a Medicare system that is sustainable for future generations, for our kids and grandkids. We want to have a system they can afford. I mention these as two reforms, and there is one other one I am going to mention. The primary reform that is in the underlying bill provides for a private sector health care plan--most of the time we call it a PPO, preferred provider organization--similar to many of the health care plans that are all across America providing an integrated structural benefit. They do not just provide drugs. They provide all health care benefits. They provide the hospital and the doctor, access to specialists and drugs. That is what is in most people's health care plans today. That is not Medicare. We would like to update and upgrade Medicare to bring it into the 21st century so it has comparable benefits, so it can have an integrated management system, so that individuals who are in the system say, yes, they control your drugs and they control your visit to the hospital and the specialist, and you have really good quality care. We do not have that in Medicare today. The real reform and what many of us are hoping we can do is improve Medicare so people can have preventive health care, so they can have more screenings, catastrophic, and prescription drugs all as one part of a package like Federal employees, like other health care, like a lot of the union plans that are out there today. We do not have that in Medicare today. So we are trying to make that a viable alternative to the present system. So if some individual wants to stay in the present system, they can, but if they would like to choose a better, more modern system, more integrated system, they can do that. I very much hope to see that the PPO model will actually become a reality that is a real viable alternative. CBO estimates that in the underlying bill only 2 percent would participate in the new PPOs. That is a failure. CMS, the Center for Medicare and Medicaid, estimates it might be as high as 42 or 43 percent. I would like for that to be the case. I think that may be overly optimistic. I think we need to work to improve this section of the bill. I know that Senator Grassley and Senator Baucus have an amendment to maybe make a small step in that direction, and I compliment them for it. For the life of me, I think if this is the only reform in the bill that we have, and we do not even have competitive bidding until the year 2009, that is not real reform. I hope to be or expect to be a conferee on this bill, and I am going to work to try and see that we have real competition as a viable alternative to improve quality Medicare for all seniors. They should at least have that option. I do not see it in the bill we have right now, but I want to work to make that happen. That is one key we are hanging on for reform in the bill that is before us. We do not have Part B means testing. We do not have eligibility age. We did not make the tough decisions to help save Medicare and make it more affordable for future generations. What we are doing is basically spending a lot of general revenue money to provide benefits that frankly are long overdue. I hope we would make some of these improvements in conference or maybe on the floor. We are going to try and make one or two of these tomorrow, and I hope that they would pass to make this a better bill. I want to support this package. I want to pass Medicare. I want to improve Medicare for all seniors. I am afraid right now the bill is heavy on subsidies and short on reform, short on improvements, short on making real structural and substantial savings that will save the system for future generations. I want to save it for seniors today, and I want to save it for future generations tomorrow. I will work with my colleagues both in the House and the Senate and the conference to try to achieve that objective. I yield the floor.

Mr. NICKLES

Mr. NICKLES. Mr. President, I am pleased to inform my colleagues in the Senate today that the city of Coweta, in my home State of Oklahoma, is celebrating the centennial of its founding. Coweta has a rich and proud history. From its beginning as a Native American settlement town to being one of the fastest growing cities in one of the fastest growing counties in Oklahoma, Coweta is truly a great place to live, work, and raise a family. It is a place where values like faith, family, and community are lived daily by its residents. The spirit and character of Oklahoma are alive and well in Coweta. It is my honor and privilege of help recognize and celebrate this occasion. Generations of residents have made Coweta a renewable place during its first 100 hundred years. Current and future generations will continue to make Coweta a special place for many years to come. Congratulations to Coweta for celebrating this centennial.

Mr. NICKLES

Mr. NICKLES. I move to lay that motion on the table. The motion to lay on the table was agreed to. Vote on Amendment No. 998

Mr. NICKLES

Mr. NICKLES. Madam President, I rise today to support the Senate's approval of the nomination of Stewart Verdery as the Assistant Secretary for Policy and Planning at the Border and Transportation Directorate of the Department of Homeland Security. I have worked with Stewart since his days as Counsel to the Senate Rules Committee and while he was at the Senate Judiciary Committee. He did an outstanding job in those capacities. As a matter of fact, he did such a great job I hired him to serve as my General Counsel in the Assistant Republican Leader's office. In his position there, he served not only as my counsel, but as a counsel for the entire Senate. We deal with a lot of issues in the U.S. Senate, and Stewart's counsel was invaluable to me and other Senators. I consider Stewart and his wife Jenny to be part of the family. Not only were they married while he was on my staff, but their two children were born as well. I respect him as both a professional and a family man. I have no doubt Stewart will excel in this new position, and it is with great pleasure that I support his nomination as Assistant Secretary for Policy and Planning.

Mr. NICKLES

Mr. NICKLES. Madam President, section 401 of H. Con. Res 95, the FY 2004 Budget Resolution, permits the Chairman of the Senate Budget Committee to make adjustments to the allocation of budget authority and outlays to the Senate Committee on Finance, provided certain conditions are met. Pursuant to section 401, I ask unanimous consent that the following revisions to H. Con. Res. 95 be printed in the Record.

Mr. NICKLES

Mr. NICKLES. Mr. President, over the past few months we have seen the fall of Saddam Hussein's brutal regime coupled with the dawning of a new day for the Iraqi people. With major military combat operations in Iraq over and the security of our homeland bolstered, America and her allies are turning our efforts toward helping the Iraqi people build a free society. Like many Americans, I was thrilled and heartened by the dramatic images of U.S. troops helping Iraqi citizens tear down statues and paintings of Saddam Hussein. The Iraqi people needed our help, our tanks, our troops, and our commitment to topple Saddam Hussein. For the first time in their lives, many Iraqis are tasting freedom, and like people everywhere, they think it is wonderful. I am proud of our military and America's commitment to make the people of the Middle East more free and secure. Our military men and women surely face more difficult days in Iraq, and the Iraqi people will be tested by the responsibilities that come with freedom. The thugs who propped up the previous regime and outside forces with goals of their own will seek to cause problems, stir up trouble, and initiate violence. Freedom is messy--nowhere more so than in a country that has just shaken off a brutal dictatorship. But the journey toward a democratic Iraq has now begun. Like so many nations before it, Iraq now endures the growing pains common to a fledgling democracy. The uncertainty in today's Iraq will soon give way to the promise of a better future for the Iraqi people. As we move closer to this goal, we must remember those who sacrificed for this noble cause. Today, I rise to honor a man who made the ultimate sacrifice one can make for his country and the cause of freedom. Petty Officer 3rd Class Doyle Wayne Bolinger, Jr., 21, of Poteau, died last week in Iraq when an unexploded ordnance accidently detonated in the area where he was working. Bolinger, who joined the Navy shortly after high school, was assigned to the Naval Mobile Construction Battalion 133 based in Gulfport, MS, whose members are commonly known as Seabees. His unit has been in the Middle East since January providing construction support to our Armed Forces during military operations. Everybody liked Bolinger. He was known to always have a smile on his face. People in Poteau, who he often helped out with various jobs, will miss him especially. His family recently issued a statement saying, ``Wayne is a very special young man and is proud to be a Navy Seabee. He died defending his country. He is without a doubt one of America's finest.'' I could not possibly agree more. This young man represents the very best this Nation has to offer. Petty Officer Bolinger did not die in vain. He died so many others could live in security and freedom. For that sacrifice we are forever indebted. Our thoughts and prayers are with him and his family today and with the troops who are putting their lives on the line in Iraq.

Mr. NICKLES

Mr. NICKLES. Mr. President, over the past few months, we've seen the fall of Saddam Hussein's brutal regime coupled with the dawning of a new day for the Iraqi people. With major military combat operations in Iraq over and the security of our homeland bolstered, America and her allies are turning our efforts toward helping the Iraqi people build a free society. Like many Americans, I was thrilled and heartened by the dramatic images of U.S. troops helping Iraqi citizens tear down statues and paintings of Saddam Hussein. The Iraqi people needed our help, our tanks, our troops, and our commitment to topple Saddam Hussein. For the first time in their lives, many Iraqis are tasting freedom, and like people everywhere, they think it's wonderful. I'm proud of our military and America's commitment to make the people of the Middle East more free and secure. Our military men and women surely face more difficult days in Iraq, and the Iraqi people will be tested by the responsibilities that come with freedom. The thugs who propped up the previous regime and outside forces with goals of their own will seek to cause problems, stir up trouble and initiate violence. Freedom is messy--nowhere more so than in a country that has just shaken off a brutal dictatorship. But the journey towards a domestic Iraq has now been embarked upon. Like so many nations before it, Iraq now endures the growing pains common to a fledgling democracy. The uncertainty of today's Iraq, I am hopeful, will soon give way to the promise of a better future for the Iraqi people. And as we move closer to this goal, we must remember those who sacrificed for this noble cause. Today, I rise to honor a man who made the ultimate sacrifice one can make for his country and the cause of freedom. Staff Sergeant Aaron Dean White, 27, died May 19 when the CH-46 transport helicopter he was in crashed into a canal in central Iraq. White was an Oklahoma native. He grew up in Seminole County where he attended school until his junior year in high school. He then graduated from Shawnee High School in 1994 and immediately began his military career. If you ask his mother, she will tell you that he had a ``calling to serve people.'' That call to service was put to good use in our Armed Forces. White was trained in helicopter maintenance, but he could not get enough of flying. His pastor, Reverend Wesley Martin, explained his passion for flight: ``After he got his pilot's license, all he did was fly. He couldn't get enough of it. He loved to fly and he loved life.'' As a result, he volunteered for the gunner position on the helicopter that crashed. ``What a flight that must have been,'' said Martin. ``No equipment necessary--as he flew immediately into the heavens.'' As we watch the dawn of a new day in Iraq, let us never forget that the freedom we enjoy every day in America is bought at a price. Staff Sergeant White did not die in vain. He died so that many others could live in security and freedom. And for that sacrifice, we are forever indebted. Our thoughts and prayers are with him and his family today and with the troops who are putting their lives on the line in Iraq. I yield the floor.

Mr. NICKLES

Mr. NICKLES. Mr. President, I am going to vote against this amendment. I want to state a few things. I would like to correct the Record and state a few facts. I have heard some people say this provision was stripped out of a provision in the tax bill and it therefore left low- income people without any benefits from President Bush's tax cut. That is factually inaccurate. The fact is that in the year 2001 we passed a tax bill, and many of the people who complained mostly about this provision voted against the 2001 bill and the 2003 bill. Now they come back and say: You didn't do enough in this one category. We did a lot for low-income people. We reduced the tax rate from 15 percent to 10 percent. And we did it retroactively, well after we passed the bill. We reduced that rate by a third--15 percent to 10 percent--and did it retroactively. We reduced every other rate on the books by 1 percentage point. I just mention that. We did a lot. We increased the standard deduction by 20 percent. We increased the child tax credit from $500 to $1,000. It was $600. In the 2003 bill which the President just signed, we made it $1,000. That benefits families. It disproportionally benefits low-income people. We took millions of people off the tax rolls. They didn't have to pay taxes as a result of the fact that we reduced rates. And we passed tax credits. After we passed tax credits, millions of people who were taxpayers were no longer taxpayers. Then we get into the issue of refundability. We already have an unearned income tax credit, which is one of the most plagued, inaccurate programs we have in the Federal Government. It is about a $30 billion-a-year program. Its error rate is in the 20-some-odd percent range. About a fourth of it is in error. There is a lot of fraud. There are a lot of inaccuracies. People claim children they don't have so they can get a bigger refund. Maybe some of it was inaccurate and maybe some if it was on purpose. Some people say the Bush tax cut didn't benefit low-income families. That is factually incorrect. Let me give you an example. Before the Bush tax cut, if you had a low-income couple and both made minimum wage with a combined income of $21,000, they had personal exemptions-- talking about, let us say, a family of four--$12,200; a standard deduction of $7,900; their taxable income is $850 at 15 percent tax; their income tax was $128; and for their earned income credit, we would write a check for $2,888. They received a net income tax refund of $2,761. Somebody said they pay payroll taxes. Yes, they could. That is a total of $1,607. So they received $1,154 after they paid income taxes and payroll taxes. That was before President Bush's 2001 or 2003 tax bill passed. After the bills we just passed, they will receive a net refund in excess of income taxes and Social Security taxes of $2,332. That is a 102-percent increase. That is what the Government is writing them a check for. That is the amount left over after they paid income taxes and payroll taxes. The question we are now really debating is, Do we want to have the Federal Government write bigger checks, and have bigger negative income taxes? Do we want to try to make the Income Tax Code more progressive? Usually when they say that, they mean lower income people pay a greater percentage. Under present law, the upper 5 percent of the income tax bracket pay 50 percent of the tax; the lower 50 percent of the income tax bracket pay 5 percent of the tax. Yet some people say that is not progressive enough; that we need to have Uncle Sam write bigger checks to people even in multiples of their payroll taxes and income taxes combined--not equal to, not balancing out payroll taxes, but we want to write them in multiples. Part of this amendment says let us increase the refundability far in excess of payroll and income taxes. I don't support that theory. That was in fact in the 2001 bill. Part of the tax bill we agreed to said we would have a percentage. The child tax credit would be refundable--10 percent. And, oh yes, in the year 2005, we would make that 15 percent. The amendment on which we are going to vote would accelerate that reduction to 15 percent immediately. That would probably happen. It could have happened. It actually passed the Finance Committee and passed the floor of the Senate. Had we had greater support for the bill, it could have been in the conference report. I hope before final passage, we can make the child credit permanent. I hope when the bill comes back from conference, we will make permanent a $1,000 tax credit for all individuals. Then we can make this change in addition. I ask unanimous consent that the information titled ``Family of Four With Two Minimum Wage Workers'' be printed in the Record, along with the ``Child Credit/EIC Effect on Tax Burden'' information.

Mr. NICKLES. I yield the Senator from Texas 2 minutes.

Mr. NICKLES

Mr. NICKLES. Mr. President, over the past few months we've seen the fall of Saddam Hussein's brutal regime coupled with the dawning of a new day for the Iraqi people. With major military combat operations in Iraq over and the security of our homeland bolstered, America and her allies are turning our efforts toward helping the Iraqi people build a free society. Like many Americans, I was thrilled and heartened by the dramatic images of U.S. troops helping Iraqi citizens tear down statues and paintings of Saddam Hussein. The Iraqi people needed our help, our tanks, our troops, and our commitment to topple Saddam Hussein. For the first time in their lives, many Iraqis are tasting freedom, and like people everywhere, they think it's wonderful. I'm proud of our military and America's commitment to make the people of the Middle East more free and secure. Our military men and women surely face more difficult days in Iraq, and the Iraqi people will be tested by the responsibilities that come with freedom. The thugs who propped up the previous regime and outside forces with goals of their own will seek to cause problems, stir up trouble and initiate violence. Freedom is messy--nowhere more so than in a country that has just shaken off a brutal dictatorship. But the journey towards a democratic Iraq has now been embarked upon. Like so many nations before it, Iraq now endures the growing pains common to a fledgling democracy. The uncertainty of today's Iraq, I am hopeful, will soon give way to the promise of a better future for the Iraqi people. And as we move closer to this goal, we must remember those who sacrificed for this noble cause. Today, I rise to honor a man who made the ultimate sacrifice one can make for his country and the cause of freedom. Specialist Jose A. Perez III was killed last week when his convoy was ambushed near Baghdad. Perez's convoy received fire from a rocket- propelled grenade while on a main supply route. This San Diego, TX, native was stationed in Fort Sill. He came from a family with a proud military tradition who knows all to well the pain of losing a loved one. His uncle, Baldemar ``Billy'' Benavides, Jr. died in the Persian Gulf in 1992. My heart breaks for this family that has given so much to our great Nation. Of his older brother, 9-year-old Joshua said, ``He was a very good hero, and he died for our freedom. I will never forget him.'' A good hero indeed. As we watch the dawn of a new day in Iraq, let us never forget that the freedom we enjoy every day in America is bought at a price. Specialist Perez did not die in vain. He died so that many others could live in security and freedom. And for that sacrifice, we are forever indebted. Our thoughts and prayers are with him and his family today and with the troops who are putting their lives on the line in Iraq. I yield the floor.

Mr. NICKLES

Mr. NICKLES. Mr. President, I hereby submit to the Senate the budget scorekeeping report prepared by the Congressional Budget Office under Section 308(b) and in aid of Section 311 of the Congressional Budget Act of 1974, as amended. This report meets the requirements for Senate scorekeeping of Section 5 of S. Con. Res. 32, the First Concurrent Resolution on the Budget for 1986. This report shows the effects of congressional action on the 2004 budget through June 2, 2003. The estimates of budget authority, outlays, and revenues are consistent with the technical and economic assumptions of the 2004 Concurrent Resolution on the budget, H. Con. Res. 95, as adjusted. The estimates show that current level spending is above the budget resolution by $1.769 billion in budget authority and by $2.959 billion in outlays in 2003. Current level is at the revenue floor in 2003. I ask unanimous consent to print my first report for 2003 in the Record.

Mr. NICKLES

Mr. NICKLES. I suggest the absence of a quorum.

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

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

Mr. NICKLES. Regular order.