Frank Pallone

Mr. PALLONE

Mr. PALLONE. I do not think we are going to find out, to be honest, specifically because he is leaving. But the thing that is most amazing about it is that the time period from when he decided to leave and then he actually left was the very time period when he was negotiating the bill.

Mr. PALLONE. The waiver has not been made public.

Mr. PALLONE. They will not tell us specifically what it is.

Mr. PALLONE. Mr. Speaker, I wanted to point out another example of what you are talking about too. It has also come to light over the Thanksgiving recess, and this is the people within the Department that were drafting the legislation, as you know, the Federal Government official who runs Medicare and was very much involved in drafting the legislation to put this bill in place, Tom Scully, announced during the break, during the Thanksgiving recess that he was leaving the Medicare program to go into the private sector. And there were serious questions about his whole involvement in this because basically he had been looking for a job in the private industry for something like 6 months. There is an article that was in the December 3 New York Times where it said that Mr. Scully, this is the Medicare administrator, had made no secret of the fact that he had been looking for jobs outside the government for more than 6 months even as he spent hundreds of hours in closed sessions with House and Senate negotiators working out countless details of the legislation. Now, again, there are so many conflicts of interest with this administration, it is just unbelievable. This guy, who I do not know him that well, but I understand he is a fairly nice guy, but the idea that 6 months ago he was looking for a job, a job essentially with some of the same law firms that were negotiating on behalf of the drug companies in order to get a favorable bill, the ethics law actually says, and I will read it because it is in the same article in The New York Times, ``The ethics rules issued by the Department of Health and Human Services say that employees who have begun seeking jobs in the private sector must immediately recuse themselves from any official matter that involves the prospective employer.'' Now, this covers legislative initiatives and proposed rules. Now, apparently, what Mr. Scully is saying is that he got a waiver from the Department so he would be allowed to work on matters of general applicability like the Medicare reform bill while he talked to potential employers. We have no information about how this waiver was garnished. The waiver has never been made public. The bottom line is the guy is negotiating this bill basically looking for a job with some of the same lobbying firms that are representing the drug companies. And as soon as the bill is passed, within a few days he announces that he is leaving to go join those same law firms. What possible justification? Mr. Speaker, I yield to the gentleman from Ohio.

Mr. PALLONE. Mr. Speaker, I want to thank the gentleman. He made some great statements there; and we will have to develop a few of those, if the gentleman does not mind. First of all, I wanted to talk a little bit more about what happened that night because, as the gentleman knows, this afternoon, our Democratic leader, the gentlewoman from California (Ms. Pelosi), offered a privileged motion which of course was defeated by the Republicans, and she paid much attention in her privileged motion to what happened that night and how it was very wrong and undemocratic, and I think that the gentleman's analogy about keeping the polls open back at home when we are voting in a congressional or Presidential election is a very good analogy. But if I could just point to the case again with the gentleman from Michigan (Mr. Smith), a lot of commentary has been written about that over the last 2 or 3 days, and I wanted to specifically mention a column by Robert Novak which was in the Chicago Sun Times recently. And he mentions what happened with the gentleman from Michigan (Mr. Smith), and I just wanted to point to that and then I wanted to point out the whole legality of it, because there is a serious question about whether what the Republican leadership did to the gentleman from Michigan (Mr. Smith) was legal. In Novak's column he said that Smith, a self-term-limited Congressman, is leaving Congress; and his lawyer son, Brad, is one of five Republicans seeking to replace him from a GOP district in Michigan's southern tier. On the House floor, Nick Smith was told business interests would give his son $100,000 in return for his father's vote. He of course declined, and then fellow Republican House Members told him they would make sure that Brad Smith, his son, never came to Congress. After Congressman Nick Smith voted ``no'' and the bill passed, Duke Cunningham of California, another Republican Congressman and other Republicans taunted Smith that his son was dead meat. I mean, needless to say, it is outrageous that this would even occur, and certainly no one is suggesting that it did not occur. I have not heard anybody suggest that what Novak said is not true; I mean, it obviously is true. But just earlier this week, there was a watchdog group called the Campaign Legal Center that on December 3 urged the U.S. Department of Justice to investigate whether Members of the U.S. House attempted to bribe a Member of Congress into voting in favor of the recently passed bill. They referenced the gentleman from Michigan (Mr. Smith), and the group urged the House Committee on Ethics to investigate the matter. They sent a letter to the Justice Department, and they referenced a section under title XVIII, section 201 of the U.S. Code where it says, ``A person commits bribery who directly or indirectly, corruptly gives, offers, or promises anything of value to any public official or person who has been selected to be a public official or offers or promises any public official or any person who has been selected to be a public official to give anything of value to any other person or entity with intent to influence any official act such as a vote.'' Now, I am sure courts can interpret this thing however they want, but it seems to me on its face that what happened that night that my colleague from Ohio talked about was bribery, and it is going to be very interesting to see. Of course, we have to kind of assume that the Justice Department is going to be a little biased, because it is Republican appointed, but I do not see how they can get away from the fact that the facts and the circumstances in that case were, in fact, bribery. The thing that really bothers me, I say to the gentleman from Ohio, he talked about the Republican responses when our leader, the gentlewoman from California (Ms. Pelosi), brought this privileged motion up today, I listened carefully to the debate back in my office, and I was amazed to see how some of my Republican colleagues responded. Essentially, if my colleagues listened to what many of them were saying, it was the ends justify the means. They were saying that this vote was so important and the issue of Medicare's future and the prescription drug benefit were so important, that that justified, in some cases they said, leaving the board open as long as it took until they could get the votes to pass the bill. Well, that is the most undemocratic thing I ever heard of. Essentially it means that if I believe that something should pass, and I am in the majority, I am just going to keep the board open until I get my way. That is it. It is the end justifies the means.

Mr. PALLONE. Mr. Speaker, I would like to take to the floor this evening to discuss the Medicare legislation that the President signed today. And needless to say, I am very critical of the legislation which was essentially and primarily sponsored by the Republican leadership, and, obviously, supported by the President of the United States. And I know that the President signed the bill with great fanfare today, but certainly from the reaction that I have been getting in my district and throughout the State, because I was in various locations around the State of New Jersey over the last 2 weeks when we had our Thanksgiving recess, the reaction amongst New Jerseyans has been overwhelmingly against the bill. And I have to say that the concerns that I am hearing from senior citizens in New Jersey, and I am sure this is echoed throughout the country, are primarily concerned that they have been fooled, that the President and the Republican leadership in the Congress are telling them that the Medicare bill is going to accomplish certain things, particularly with regard to prescription drugs, but the reality is that it is very different from what the Republicans are saying about the Medicare legislation. And I just wanted to go through some of the areas where I think that there is an effort on the part of the Republicans to say what this bill will do in a positive way and point out that the reality is very different. First of all, I would say that the Republican Medicare legislation tries to fool the seniors by saying that somehow they are going to get a discount. If we talk to seniors and even the public at large, the biggest concern they have about prescription drugs is not only that they cost too much but that the costs keep rising, actually much more than inflation, and the bottom line is the bill does absolutely nothing to bring the cost of prescription drugs down. In fact, there is a provision in the bill, and I would like to make reference to it, called the noninterference clause that was actually the subject of an editorial in the Los Angeles Times within the last few days, and because of the fact that there is this noninterference clause in the bill, the Medicare Administrator, that is the person at the Federal level who administers the Medicare program, will not be able to negotiate prices and bring down prices, because keep in mind, Mr. Speaker, that in many cases if they represent a lot of people, as in the case of the Medicare Administrator who will represent about 40 million seniors in the Medicare program, because they represent so many people, they can negotiate a lower price for them for particular drugs on a given day or a given week or a given year. But what the Republicans put in the bill at the request of the pharmaceutical companies is this noninterference clause. And if I could read it, it says: ``Noninterference,'' in order to promote competition under this part and in carrying out this part, the Secretary, that is of Health and Human Services, the Medicare Administrator, may not interfere with the negotiations between drug manufacturers and pharmacies and PDP sponsors and may not require particular formulary or institute a price structure for the reimbursement of covered part D drugs. So, essentially, what this clause says is that unlike what we do with the Veterans Administration or what unlike what we do with the military, the Federal Government cannot negotiate, on behalf of all these seniors, lower prices. That is wrong. But more than its being wrong and not making any sense because of the power of the Medicare Administrator to negotiate lower prices, it fools the seniors. It gives the impression to the seniors that the Republicans are giving that somehow there is some cost containment in this bill and in reality there is not any. There is actually a prohibition on any kind of cost containment on the bill with regard to prices for prescription drugs. Now, a second way that the Republicans try to fool the seniors is by saying that Medicare is going broke. I have had so many of my colleagues on the Republican side get down on the floor here in the last 6 months and say, well, we have to make changes and reform Medicare because it is going broke. In fact, Medicare is not going broke. The only reason why there is any problem at all with the Medicare trust fund is because the Republicans have been borrowing from the trust fund in the last 2 years to pay for their tax cuts. So the trust fund has actually lost money because we, the Congress, in basically enacting legislation that would provide for huge tax cuts, primarily for the wealthy or for corporate interests, has not had the money to implement those tax cuts and has been borrowing from the Medicare as well as the Social Security trust funds to pay for those tax cuts. So, again, another effort to try to fool the seniors, to suggest that somehow Medicare is going broke, when in fact the only problem with Medicare stems from Republican fiscal and tax policies. The third thing that the Republicans try to do is fool the seniors by saying they are giving seniors a choice. In other words, the theory is that if you privatize Medicare or if you say that in order to get a prescription drug plan you have to join an HMO or you have to go to some kind of drug-only policy essentially outside of traditional Medicare, that somehow you are given a choice. The reality is the seniors lose their choice, because the most important thing that seniors want is a choice of physicians; and if they have to join an HMO, which is essentially the only way practically speaking you are going to get a prescription drug benefit under this bill, you are going to lose your choice of doctors, you might lose your choice of hospitals, you are certainly going to lose your choice of certain kinds of medical procedures, because the HMOs simply will not cover it. The ultimate irony was this Sunday in the New York Times there was an article on the front page by Robert Pear that pointed to a little-known aspect of this Republican Medicare bill where they forbid the issuance of Medigap supplemental insurance policies once the drug benefit goes into effect in the year 2006. Let me tell you, if the Republicans are saying they are going to give seniors choice, how is there choice when they cannot even choose a Medigap supplemental insurance policy? It is the opposite of choice. What the Republicans have done with that provision is not provide the seniors a choice, but say it is essentially either my way or the highway. You either choose a prescription drug plan under an HMO, or you choose a prescription drug plan under a drug-only private insurance policy. But if you want to stay in traditional Medicare, then not only do you not get the drug benefit, but you cannot even buy supplemental coverage to pay for supplementing the holes, if you will, in your existing Medicare coverage. What the Republicans are doing is everything possible. They say it is choice, but really what they are doing is denying you a choice by making it almost impossible for you to stay within the traditional Medicare program if you want a prescription drug program, or, maybe even if you do not, because you cannot buy Medigap supplemental coverage. Already some of my colleagues on the Republican side are saying, well, that prohibition on Medigap insurance does not take effect until 2006, and sometime between now and then we will get to that and change that. Maybe we will repeal that provision. I think they should repeal the whole thing. Frankly, the whole thing that the President signed today is bad. It is bad for Medicare and seniors. I want to get into a few more areas where I think the President and the Republicans are fooling the seniors. They are not giving them choice; they are denying them choice. But the other way they try to fool the seniors is they say they are getting a benefit, and they suggest it is a very generous drug benefit. The reality is it is not a meaningful drug benefit, and it is hardly generous. It is ultimately going to cost you. If you decide you want to join an HMO and lose your choice of physicians because you want this benefit, this benefit will, nonetheless, cost you so much out-of-pocket compared to what you are going to get back from the Federal Government that I would venture to say that probably less than 10 percent of the seniors would actually opt for this kind of a benefit, because it is such a meaningless benefit. Let me give you an idea what I am talking about, because I do not want to talk in general terms. I want to give examples of why I say even if you wanted this benefit, if you decided to get out of traditional Medicare and join an HMO, why you would not want to do this. Let me give you three examples of a senior with $2,250 in drug costs in a year. In other words, if your prescription drugs are going to cost you $2,250 in a given year, you are going to pay $420 in premiums, that is $35 each month times 12, a $250 deductible and $500 out-of-pocket, which is 25 percent of the drug costs that you have to pay when you first go beyond your deductible of $251 to $2,250. You are actually paying $1,170 for $2,250 in drugs. You might say, well, that is not too bad. I am getting less than 50 percent of my drug costs paid, but maybe it is a good deal. Well, not if you have to lose your doctor and join an HMO. But even with all that, less than 50 percent of your drug costs are being paid for by the Federal Government. But most seniors are not in the category where their drug bills are $2,250 a year. More seniors have drug expenses that are larger than that and fall into the so-called donut hole. This is an area where if you have your drug bills above a certain amount, the Federal Government pays no part of the cost of your drug bills. I want to give you an example of that. Let us talk about a senior whose drug costs fall above $2,250, or in this donut hole where they have to pay 100 percent of the cost. Say a senior has $3,500 in annual drug costs. This does not exceed the $5,100 catastrophic cap, so they would pay $1,170 for the first $2,250, and, as I said before, $1,250, which is 100 percent of the difference between $2,250 and $3,500. So if your drug costs were $3,500, you would be paying $2,420 for those $3,500 in drug costs, or 70 percent of the cost. This is because if your drug costs essentially go between $2,000 and $5,000 before you get to this catastrophic level, you are paying 100 percent of the cost. You are actually going to be in a situation where you are paying premiums every month to the Federal Government for this drug benefit, but getting nothing back, because you are at that point after 6 or 7 months in the year where you have exceeded the $2,250 in costs, but you are not up to $5,000, so you are paying premiums and getting nothing to cover your drugs. You talk about a benefit and you talk about trying to fool the seniors; it is unbelievable how much deceit is essentially involved in this legislation. I just want to get a couple more examples, because I see my colleague from Ohio is here. Let me give you a couple more examples of how they try to fool the seniors. The Republicans say to seniors they will be able to stay in traditional Medicare if they want the prescription drug benefit. As I have said, that is really not true, because they have to join an HMO to get any kind of drug benefit. If they want to buy a drug-only policy, which might be out there, the premiums for that will probably be so high it will not even be available. But the worse aspect of this when they say you can stay in traditional Medicare is for those seniors who are going to be in these demonstration programs throughout the country, where they are essentially going to give you a voucher and say we are going to give you so much amount of money to pay for your health insurance, but you have got to go to the private market and try to find someone to give that voucher to, that set amount of money, to pay for your health insurance. This is not even with the prescription drug plan. This is Medicare in general. The Republican leadership, in the House version of this bill they wanted to essentially privatize all of Medicare by the year 2010, but because the other body, the Senate, would not go along with it, they ended up putting this in certain demonstration programs. One of these demonstration programs is going to be in the southern part of New Jersey, not in my district, but in the southern part of the State. There are about 200,000 seniors in the southern part of New Jersey that are likely to be in this demonstration program, where they are going to be given a voucher and told you go out and buy your health insurance with this set amount of money and you cannot stay in traditional Medicare. If you say you want to stay in traditional Medicare, what they are going to do is say, okay, if you want to stay in traditional Medicare, you have to pay the difference in cost between that voucher and what it costs the Federal Government to provide the traditional Medicare, which could be an extra $500, an extra $1,000, an extra $2,000 per year. Essentially, seniors are going to be forced out of traditional Medicare, just the opposite of what the Republicans were saying. The last thing I want to say, where there is a serious element of deceit, is the Republicans are trying to fool the seniors by saying they are going to get a drug benefit immediately after the bill goes into effect. Practically every Republican who got on the floor the night we debated this bill made that statement in some form or the other, and it is simply not the case, because this drug benefit does not go into effect until the year 2006. What they are going to do over the next 2 or 3 years before it goes into effect is give you some kind of discount drug card. In New Jersey, we see a lot of these because we have a lot of pharmaceutical companies, and most of them give out a discount drug card. You pay a certain amount of money, and you get anywhere from a 5 to 10 to 15 percent discount on your drugs. But since there is no cost containment, it essentially is a ruse, because the drug companies charge whatever they want for the prescription drugs and give you a 5, 10, or sometimes maybe a 15 percent discount. So now the Federal Government, according to the President, over the next 2 or 3 years before the drug benefit comes into play, is going to hand out these drug cards to seniors so they can get the slight discount, which is really no meaningful discount at all. I have to say I was not surprised when I went home over the Thanksgiving recess over the last 2 weeks, all that I heard at the senior centers, even on the street, even at the supermarket, were people coming up to me and being not so much mad as upset in some cases almost to the point of tears over what this Republican bill is going to do to their Medicare. People are saying to me, Are they going to take my Medicare? What are they going to do to my Medicare? People personalize Medicare. It is so important to them, and yet all these changes are going to take effect that are against their interests. I have editorials that are written in my local papers against this. These were not editorials I suggested. These were the newspapers and the local senior groups looking at this Medicare bill and saying how it was going to be detrimental to them and the future of the Medicare program. I see that my colleague, the gentleman from Ohio (Mr. Brown) is here. He is the ranking Democrat on the Subcommittee on Health; and he has been outspoken on this issue, particularly in pointing to the conflicts of interest that exists with the drug companies and the insurance companies who stand to benefit from the changes that are in this Republican bill. I yield to the gentleman.

Mr. PALLONE. Mr. Speaker, the last thing I wanted to mention, because I know we only have a few minutes, was the reimportation. I know that many of us saw the reimportation from Canada or other countries as sort of a last-minute effort to try to have some kind of cost controls put into effect. We would rather have cost containment here rather than have to import drugs from Canada or other countries. But the bottom line is that both Houses, both the House and the Senate had passed a provision that would have provided for an essentially legalized drug reimportation, at least from Canada, if not from some of the other countries in Western Europe that were comparable to the United States. Even though the conference between the House and the Senate had those provisions in both Houses, they ended up essentially eliminating it in the bill. Also, today in the omnibus bill, the appropriations bill that we came back to vote on today, I am sure the gentleman noticed that that was stripped out of that as well. So every effort has been made by the Republican leadership and by the Republican President to do everything possible to make sure that there are no cost controls whatsoever. And I still see, and I go back to what I said in the beginning, Mr. Speaker, I still see my colleagues on the Republican side coming down here and saying there is some kind of cost control or savings that the seniors are going to get from this bill. That is simply untrue. Everything has been taken out. The reimportation language from Canada, specific language that says that you cannot negotiate price. Every effort was made to guarantee that there would be no fiddling whatsoever with the drug companies's ability to simply raise prices as they see fit. That is what we are left to. It is really sad to think that we have come to that. I know the President signed the bill today, and it is over with in that respect; but, hopefully, and I already see it happening, you will get a groundswell from America's seniors throughout the country over the next few months or the next few years that are going to demand that this bill be repealed or significantly altered. I am convinced that is going to happen. It is sad to think that there was this huge missed opportunity when we could have actually passed a good prescription drug benefit and done something to help America's seniors, rather than this cruel hoax that has been foisted upon them today. Mr. Speaker, I want to thank the gentleman from Ohio (Mr. Brown) for all he has done on this issue over the last few years.

Mr. PALLONE. The gentleman described it so well. The amazing thing is when we were in our committee and we were marking up the bill, I remember asking questions about, well, what about the fact that you do not have a set premium? In other words, you can charge whatever you want for this, for the health insurance or for the prescription drug benefit. And what if the HMO's do not want to cover the sicker seniors or certain seniors. And the answer I got back from some of my Republican colleagues is, well, if this does not work, giving them this $12 billion windfall, they can come back in another 2 or 3 years and we will give them more money. It is incredible how they totally violate the idea of competition and, as the gentleman says, a level playing field, and are willing to give the HMOs or the private insurance companies more and more money if they are not willing to cover the seniors. Where does it end? There is no end to it. We saw with MediCare+Choice a few years ago, every year they would come back and ask for more and more money. And now they have this windfall, who knows where it will end. I know our time is almost up. I want to develop one more point that the gentleman raised before we close tonight because I think it is important. The gentleman talked about the fact that if the Democrats or if, on a bipartisan basis, we had been allowed to develop a bill that kept traditional Medicare and just added a prescription drug benefit, which is what most of my seniors, and I think most seniors expected. I mean, if you talk to the seniors about what they expected with a prescription drug benefit, they figured we were just going to have the traditional Medicare, and we were going to add the benefit. I think it is important before we close that we point out that, as Democrats, we developed and offered an alternative as a substitute on the floor of the House, exactly that. Basically, what the Democratic Party in the House and what our leadership proposed and what both the gentleman from Ohio (Mr. Brown) and I supported, was simply adding a prescription drug benefit to traditional Medicare. And we used the Part B, which now pays for seniors' doctors bills, as an example. Under the current Part B, you pay a premium of about $55 a month. You have a $100 deductible. Eighty percent of the costs of your doctor bills are paid for by the Federal Government. Twenty percent by you; that is your copay up to a certain amount catastrophic limit where 100 percent of the cost is paid for by the Federal Government. That is exactly what the Democrats offered as an alternative. We said that for a $25 premium you would have a $100 deductible for your first $100 in drug costs. Eighty percent of your drug bills would be paid for by the Federal Government. Twenty percent copay. And at a certain level, I forget what it was, $3,000 maybe $3,500 catastrophic level, 100 percent of the cost would be paid for by the Federal government. And we had a provision in the bill that specifically said that the Secretary of Health and Human Services, the Medicare Administrator, would negotiate price reductions. I know some of the Republicans said that would have been a very expensive bill. The bottom line is whatever costs to the Federal Government probably would have been outweighed by negotiated prices, that would have brought the cost down considerably. So there was clearly an alternative out there that would have simply done what most seniors expected and simply added a prescription drug benefit to traditional Medicare.

Mr. PALLONE. Mr. Speaker, I wanted to comment, I know the gentleman raised so many good points, and I know we cannot go through them all tonight, but I wanted to talk a little bit about what I call the insurance scam too. We focused a lot of attention on the drug companies and how they are benefiting, but I think we have to talk a little bit also about the insurance companies that you mentioned. I wanted to say in my State the pharmaceutical companies have a huge presence and they spend a lot of money on electing candidates. But he was very proud of the fact that within a couple days after this Medicare bill surfaced, that the largest newspaper in my State, the Star Ledger, issued an editorial which was entitled ``Reject Medicare Legislation.'' And the largest newspaper in my district issued another editorial calling the Medicare plan bad medicine. But I wanted to highlight the Star Ledger article. Again, this is the largest newspaper in the State, which probably has percentage-wise the largest presence of pharmaceutical companies. And they wrote this scathing editorial. They focused attention somewhat on the drug companies but even focused more attention on the insurance companies. I wanted to read just the first couple of paragraphs because I think it says it all about how the insurance companies benefited. It is the editorial from November 18. It says, ``Reject Medicare Legislation. If profit making insurance companies are so much better and cheaper than the Federal Medicare program, why do we have to give them $12 billion to help improve it? That subsidy is built into the Medicare compromise plan heading for Congress and is but one of several excellent reasons the plan should be rejected. After handing the industry a $12 billion gift from the taxpayers, the bill sets up a fixed competition between Medicare and private managed care. They would go head to head in a half dozen communities. Once the games begin, private companies could sign up younger, healthier, cheaper-to-treat seniors and reject the rest. It does not take a genus to predict the result. If Medicare, which must take all comers is left with sicker, more expensive seniors, Medicare will fail. That will give conservatives a chance to settle one of the most successful public programs of all times and replace it with private companies. If we end up with a dead Medicare program and taxpayer subsidized private profits, where is the victory? The insurance industry already can sign up seniors under another Medicare option, that is managed care, but it has never attracted more than a small percentage of Medicare recipients. Year by year it has reduced benefits and dropped hundreds of thousands of policyholders. The companies say the Medicare population costs too much to treat and that government payments are stingy.'' I am reading this, but I wanted to explain it a little. We have had such an experience in New Jersey. We have had something like, I think the figure is 800,000 seniors that joined HMOs, managed care over the last 5 or 10 years who were eventually dropped. And the reason they were dropped, obviously, was because the insurance companies initially took the seniors and then found because of the cost that the seniors incurred in health insurance that they could not make a profit. So they dropped them. Now, what happened then is that the HMOs came before the Congress, they came before our committee, they said we cannot make enough money with the managed care HMO system the way it is. You do not pay us enough money for Medicare to cover for these seniors, so why do you not give us a windfall. That is exactly what is in the bill. They got a $12 billion basic windfall to manage care so they could theoretically now sign up seniors and provide seniors with not only the HMO but the prescription drug coverage. But there is nothing in the bill, just like there was nothing in the previous legislation with Medicare+Choice that says that they have to take whatever senior comes along. So essentially what this Star Ledger article is saying, they are now going to cherry-pick. They realized after being in the Medicare program for a number of years that they could not make a profit because they took all these seniors who were sick and driving up health costs. So now they are going to get this huge $12 billion subsidy, and they will be able to cherry-pick and essentially take whatever seniors they want and offer a health care plan with this big subsidy and leave the traditional Medicare with the sicker people that drives up the cost.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I want to follow up on what my colleague from Ohio said with regard to this Medicare bill that was passed in the middle of the night after the board was held open for 3 hours, even though most Members had voted. I want to say I was back in my district, of course, during the last 2 weeks during the Thanksgiving recess, and my constituents in New Jersey and throughout the State are outraged over this Medicare bill. They see it as nothing more than an effort to privatize Medicare, to change the traditional Medicare program and not to provide them with any kind of meaningful drug benefit. But what is the most amazing, Mr. Speaker, is what we have learned in the 2 weeks since that vote was taken, what we have learned about the arm-twisting that took place to try to influence Members on the Republican side to vote for the bill as opposed to against the bill, and what we have learned about provisions in the bill that many Members were not even aware of that make the legislation even worse. I just wanted to talk about those two things this morning. First of all, there is now an investigation by the Justice Department into the bribery, alleged bribery or undue influence that was placed on Congressman Smith in an effort by the Republican leadership to get him to change his vote against the Medicare bill and in favor of the bill. He ended up voting against the bill, refused to switch; but supposedly he was told that if he did not switch that $100,000 would not be available from the Republican campaign war chest for his son who was running as a successor for him to Congress. He was told that there would not be support for his son running as a Member of Congress if he did not change his vote. Statements were made to that effect on the floor of the House of Representatives that suggest that somehow votes are for sale by the Republican Party on the House floor, here in the House of Representatives in these halls, in this Congress that we so dearly value. Bribery, allegations of bribery, and now the Justice Department is investigating it, in an effort to try to twist arms and get Republicans who wanted to vote against this bill because they knew that was the right thing to do and they were trying to convince them to vote the other way. In addition, those of you who may have read the New York Times yesterday, front-page article talking about how the bill does not allow for seniors to buy MediGap coverage, I knew that this bill was bad and there are a lot of bad provisions in this bill and my colleague from Ohio has pointed out many of them; but many of us were not aware of the fact that the bill precluded MediGap insurance. Do you know why it precludes MediGap insurance? Because it does not want seniors who are in traditional Medicare, the Republican leadership, the President, the Republican President, do not want seniors who are in traditional Medicare to be able to supplement and buy MediGap insurance. Why would that be? That is because they do not want them in traditional Medicare. They want to force them to go into an HMO to get their drug benefit or force them to buy some kind of drug-only policy which is going to be tremendously prohibitive. So seniors who traditionally have purchased MediGap coverage, supplemental insurance to cover the things that are not provided for in Medicare, are now going to be told, you cannot do that anymore. Imagine, you are a senior citizen, you do not want to join an HMO, you are very concerned about the cost of a drug-only policy which may not even be available in your area, but you cannot supplement your traditional Medicare by buying a MediGap policy, perhaps, that would provide for a nice drug benefit or would make it easier for you in the long run not to expend a lot of money out of pocket. They are now precluding you from doing this. It is amazing to me. The Republicans talk about choice, that the reason that they wanted to privatize Medicare and do what they are doing with this bill is because they wanted seniors to have choices; but in effect, what they have done is limit seniors' choices. If seniors cannot even buy supplemental MediGap coverage, what kind of choice is that? No choice of a doctor because in order to get the drug benefit you have to join an HMO; but even if you want to supplement your insurance in traditional Medicare, you cannot do it anymore. They are not going to allow Medigap policies anymore. It is amazing to me when you look at this legislation what went on. A middle-of-the-night vote, twisting arms, bribing Members of Congress, it looks like, allegations are being made at this point, and no choices at all because you are forced essentially into an HMO. And for what? A Medicare prescription drug benefit that is almost completely useless because, as we have said before, you would have to spend so much money out of pocket, probably over $4,000 out of pocket in order to get $5,000 worth of coverage. We do not even know what the premium is going to be. The premium for the drug benefit could be $85, $100 a month for all we know. And you are going to have a $275 deductible or perhaps a higher deductible. You are only going to get coverage up to something like $2,000 or so and after that you are going to have to pay out of pocket even though you are continuing to pay the premiums, up to $5,000. It does not even go into effect until 2006. No cost containment whatsoever. It is just amazing. We have got to continue to point out the bad aspects of this bill.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I have listened to the rhetoric of the Republicans this evening, and it is cynical. They are trying to fool the seniors. I listened to the gentleman from Louisiana say that seniors are going to have a choice. They are not going to have any choice. They are going to lose their choice of doctors because they are going to be forced into an HMO. I listened to the gentleman from Florida say that seniors are going to get a meaningful benefit. Again they are fooling the seniors. There is no meaningful benefit here. They are going to have to shell out more out of pocket than they are going to get back in terms of a drug benefit. I listened to the gentlewoman from Connecticut earlier saying that she is going to give the seniors a discount. What a joke that is. There is no cost containment in this bill. The bill says that the Secretary cannot in any way negotiate price reductions. There is no reimportation in this bill. There is no way you are even going to be able to get discount drugs from other countries. There is no discount. There is no savings. They are just trying to fool the seniors. I heard another speaker say that Medicare is going broke. The only reason it is going broke is because you have taken money away from their trust fund through your tax policies. You are trying to fool the seniors again. And then you are saying that the seniors are going to be able to have traditional Medicare, they can stay in their traditional Medicare. Again you are trying to fool them because they are going to be forced out of traditional Medicare. You are going to limit them to a voucher, a certain amount of money. You have something in the bill that would cap the amount of money that comes from the Federal Government. They are not going to be able to stay in traditional Medicare. They are going to be forced out of it. Then finally you say, oh, they are going to get the drug benefit immediately. You talk about the drug card or whatever it is, the discount card. Again you are fooling the seniors. This bill does not even take effect, there is no drug benefit until the year 2006. I want to tell you, the last thing of all was when I listened to my colleague tonight here from New Jersey (Mr. Ferguson) say that New Jersey is going to benefit from this. There are 1.2 million Medicare beneficiaries in New Jersey; 91,000 of them will lose their employer- based prescription drug benefits; 186,000 of them in South Jersey would be subject to premium support and will lose their traditional Medicare. The list goes on. New Jersey is no different than any other State. You are not going to be able to fool the seniors. You should not try to. You ought to be ashamed of yourselves.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I appreciate that the gentleman from Texas is proud of this legislation, but I want to tell him, I am ashamed of this legislation, and I am ashamed of what we are about to do; and I hope we do not do it. Secondly, he said his constituents are going to be helped. They are not going to be helped; they are going to be hurt. When he says this is a good bill, it is not a good bill; it is a bad bill. My constituents are calling, the gentleman from New York (Mr. Rangel) said his constituents are calling, and they are calling me because they are scared to death about what you are going to do, because they think that Medicare is going to die, to disappear and that they are not going to get any kind of decent prescription drug benefit. Let me tell my colleagues why they are right. There is no question that you are not going to get any kind of drug benefit under this bill unless you go private. You have to join an HMO. If you do not join an HMO and lose your choice of doctor or your choice of hospital, then you are not going to get the drug benefit. They are scared, because they do not want to do that. They do not want to have to trade and lose their doctor in order to get some kind of drug benefit. Secondly, they are upset because there is no benefit here. There is nothing here for them to benefit from. They are going to have to pay more out, shell more out of their pocket than they are going to get back in terms of a prescription drug benefit. If we look at what this bill does, first of all, we do not know what the premium is going to be. You might have a premium of $75, $85 month. You have to pay a deductible of $275 a month. After you pay out $2,200, for the next $3,000 or so, you get no benefit at all, no drug benefit. You have to pay 100 percent out-of-pocket while you continue to pay probably a very high premium. So they figure, I am going to lose my choice of doctor. I may lose my choice of hospital. And at the same time, I am not getting any benefit because of this doughnut hole and what you are causing me to pay out. Then they say, they are expecting there is going to be some kind of controls on the price of prescription drugs, but you have a clause in the bill that says that we cannot even negotiate price. So the costs of prescription drugs will continue to rise, as all of these other terrible things are happening. Then they say, my constituents say to me, Congressman, is it true that this bill does not even take effect until 2006 with the drug benefit? The answer is yes. That is what the bill says. Read the bill: 2006 before the drug benefit kicks in. You know what my constituents say? That is a joke. What kind of a joke is this? You are going to have some election in 2004 and then you are all going to run for election and say what a great thing this is and this is not even going to kick in. They want a prescription drug benefit now. Why can it not start January 1 of 2004? Lastly, the reason they are really scared is because of the privatization. I heard the gentleman from California (Mr. Dreier) say ``privatize'' three times. That is what this is all about: privatizing, not just the prescription drug benefit, but Medicare as a whole. Because even though we are only going to have these demonstration programs in certain parts of the country, the bottom line is they are going to impact the whole country and ultimately, by the year 2010, you are going to force people to take a voucher, try to go out in the private sector and buy their Medicare as a whole, and if they cannot find it or they do not like what they are offering for that voucher, that set amount of money, then they are not going to be able to stay in traditional Medicare, fee-for-service Medicare. Privatize Medicare, privatize the drug benefit, it does not even start until 2006, and you lose your doctor. That is why they are scared to death.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise in support of this tax extension bill. It includes, as has been mentioned, H.R. 528, a bill to extend normal trade relations to Armenia. As co-chair of the Congressional Caucus on Armenian Issues, I introduced this legislation with my fellow co-chair, the gentleman from Michigan (Mr. Knollenberg), and our bipartisan bill has garnered 112 cosponsors during the course of this year; and it has been included in this bill thanks to the gentleman from California (Chairman Thomas), the gentleman from New York (Ranking Member Rangel), and also the gentleman from Michigan (Ranking Member Levin). Mr. Speaker, Armenia has been consistently found in full compliance with Jackson-Vanik since 1997, and the passage of this legislation will go a long way to establishing closer relations between the United States and Armenia. Since the fall of the Soviet Union, the Republic of Armenia has consistently made strides towards a free and open economic system; and like many former Soviet republics in the last decade, Armenia has seen considerable diversity in this last decade. Unlike most, though, Armenia has vigorously pursued free-market reforms within a democratic framework. On February 5, Armenia was acceded to the World Trade Organization, and its recent accession supports its noted progress in adopting and implementing economic and trade reforms. In fact, Armenia is consistently ranked the most economically free nation in the region. It is truly amazing that all this has been achieved considering that Armenia continues to suffer dual blockades by its neighbors to the east and west, both Azerbaijan and Turkey respectively. I wanted to mention the comments that the gentleman from Michigan (Mr. Levin) and the gentleman from Maryland (Mr. Cardin) made about human rights violations and strides towards democracy in Armenia. I know that, although Armenia continues to make great strides in these areas, more needs to be done; and I do acknowledge that. In fact, I do intend when I visit Armenia in 2 weeks, I wanted to mention to my colleagues that I will be talking to the President and the leaders there, and I will indicate to them that while we are very thrilled with the fact that the PNTR legislation has now passed the House that more needs to be done with regard to democracy and human rights. But I want to point out that this will further strengthen our ties and lead to greater strides in these areas.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise today as an original cosponsor of H.R. 1828, the Syria Accountability and Lebanese Sovereignty Restoration Act. I urge all my colleagues to continue their support for this important legislation. The United States must show Syria that there are consequences for supporting terrorism and undermining peace in the region. H.R. 1828 holds Syria accountable for its continued support of terrorism, occupation of Lebanon, and possession and development of weapons of mass destruction. It gives the President the tools he needs to impose penalties on Syria unless Syria corrects its behavior immediately. Syria is listed on the State Department's list of countries who harbor and support terrorism. Syria has proven to be a destabilizing force in the Middle East, continuing to develop and stockpile chemical weapons and the missiles to deliver them and remaining the occupying power in Lebanon. Syria offered support to Iraq even as U.S. and coalition forces were engaged in combat and has turned a blind eye to militants who slip across their borders into Iraq to kill American soldiers. Mr. Speaker, yet Syria is subject to fewer U.S. sanctions than any other country considered a state sponsor of terrorism. I would like to take this opportunity to commend my colleagues, the gentleman from New York (Mr. Engel) and also the gentlewoman from Florida (Ms. Ros-Lehtinen), for introducing this legislation. I just want to urge my colleagues on a bipartisan basis to fully support and pass this bill as amended in the Senate.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I ask unanimous consent to take the time of the gentleman from California (Mr. Schiff).

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise today to draw attention to the continued plight and mistreatment of political prisoners locked in Cuban jails, and obviously joining with my colleagues from Florida, and I thank also my other colleague from New Jersey, specifically paying attention to Dr. Oscar Biscet. I have spoken on numerous occasions here on the House floor of the crushing campaign Castro waged against the Cuban pro-democracy movement earlier this year. Over the course of a few weeks in late March and early April, Castro's regime arrested an array of political opposition leaders and pro-democracy advocates. Inside of a month, the dissidents were arrested, arraigned, tried, and sentenced. Dr. Biscet, already in state custody at the time, was tried in tandem with the other dissidents, and in April was sentenced for 25 years for ``serving as a mercenary to a foreign state.'' Dr. Biscet is a 42-year-old physician. He is President of the Lawton Foundation for Human Rights. He is a well-known follower of Ghandi and Martin Luther King, and is heralded for his religious and civic leadership. Just last week, on November 11, at Prison Kilo Cinco y Medio, Dr. Biscet peacefully protested with six other political prisoners the cruel treatment given by prison authorities to the family of another fellow prisoner during their scheduled visit. Fearing that Dr. Biscet was becoming a leader among the other prisoners, he was transferred the next day to another maximum security prison in the province of Pinar del Rio, called Kilo 8. In Kilo 8, Dr. Biscet has been confined in a punishment cell that he has referred to as a dungeon with another prisoner who has committed 12 violent criminal assaults, a blatant attempt to put Dr. Biscet's life in danger. His wife and parents traveled to Kilo 8 this Monday, November 17, for their assigned family visit. When they arrived, prison authorities informed them that Dr. Biscet was punished for 21 days without family visits. They told his family he is currently being confined in a cell with no sunlight that literally measures four feet by four feet. They told his family that he had been denied food supplies and toiletries and is without writing or reading materials. Upon hearing this news, his mother required medical attention from the prison staff due to a sudden rise in her blood pressure and the horror of her son's living conditions. Mr. Speaker, compelled by circumstances and the persistence of Dr. Biscet's wife, prison authorities allowed his mother to see her son, but only for 10 minutes. Dr. Biscet asked his mother to alert international public opinion, since he had broken no prison rule, and they were forcing him to share a cell with a violent criminal intentionally placing his life in danger. So I join my colleagues here on the House floor to inform Congress and the American public of the inhumane treatment of Dr. Biscet. I ask all my colleagues to join us here on the floor and to demand the unconditional and immediate release of Dr. Oscar Elias Biscet and all those prisoners whose only crime is a desire for basic human rights. We must send a strong message to Castro that his abuse of Cuban political prisoners has not gone unnoticed and will not be allowed to continue.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, reclaiming my time, the reason why the Republicans have carved out this donut hole, which is going to make all these seniors, as my colleague says, pay a premium and get nothing in return is because they save a tremendous amount of money. Here they are worried about saving some money at the expense of the seniors at the Federal Government level, but yet they are going to throw all this money to the HMOs and to private companies to plus up the money that they get, and they do not have to have any kind of cost containment which would bring the costs down to the Federal Government. After all, if we had cost containment, the Federal Government would not have to shell out all this extra money, and we could fill that donut hole. I mean, it is just a way of saving money to the Federal Government, but at the same time, at the expense of the senior citizens.

Mr. PALLONE. Mr. Speaker, I appreciate the gentleman's comments and his insight from the pharmacy business, and I think we have about maybe seven or eight minutes. I would like to yield now to the gentleman from Ohio (Mr. Strickland), my colleague on the Subcommittee on Health.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise today to recognize a program that provides an important service to the men and women serving in our military. With our armed forces deployed for extended tours of duty in both Iraq and Afghanistan, the pressures placed on family members left behind can be enormous. The longer our fighting men and women are stationed abroad, the more these needs continue to escalate. Today, more than 140,000 troops are fighting the war on terrorism in Iraq, in Afghanistan, and around the world. Many of our brave men and women have now been deployed much longer than expected. Some active units served in Afghanistan, returned home for six months, and were immediately re-deployed to Iraq. In many cases, a sole breadwinner is deployed, making it difficult on their family left behind to cope with medical bills or other unexpected expenses. Today, I would like to recognize an effort undertaken by local radio and television stations to help address these issues. The National Association of Broadcasters is leading its local television and radio stations in a partnership with the Armed Forces Relief Trust to raise funds for military families in need. By producing, distributing and airing radio and television Public Service Announcements, the NAB and its radio and television broadcast members are helping raise funds for those military families in need. Last year, the four emergency assistance programs representing the Army, Navy, Air Force, and Marine Corps distributed more than $109 million in interest-free loans and grants to military families. Now that the four programs have combined efforts in one Trust, and more importantly, now that the trust is receiving generous access to the airwaves to get out its message, they will undoubtedly be able to provide even more assistance. Mr. Speaker, all of us count on our service people who are far from home protecting us. Their families are enduring enough hardship in waiting for them to return. It is incumbent upon all of us to ensure their families do not want financially during this most difficult time. I would like to compliment the local radio and television stations that are involved in this effort. As small business people, they are dedicating a valuable resource--airtime--to a timely and important cause. I salute their efforts.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, the gentleman does not think that could be done by next year?

Mr. PALLONE. Right. Reclaiming my time, Mr. Speaker, that is assuming that the benefit is $35.

Mr. PALLONE. Absolutely not.

Mr. PALLONE. Mr. Speaker, I want to thank the gentlewoman for yielding me the time and her remarks. I listened to what the gentleman from Florida said, and I have to say, I know he is well-intentioned. I certainly do not mean to imply that he is not well-intentioned, but the problem is that the ideology of the Republicans is getting in the way of what works practically. I am afraid that the ideology, even though they may not intend it, ultimately, will destroy Medicare. The gentleman from Florida talked about Lyndon Johnson and the origins of Medicare. I do not want to go through all that again, but we must remember that the reason that President Johnson and the Democrats primarily put Medicare into place in the sixties was because the private market did not work. Seniors were not able to go out and get insurance in the private market, and so that is why the government had to set up a program to insure the senior citizens. That is the bottom line. Practically speaking, I do not really have an ideology. I do not care if it is a government program versus a private program, but the bottom line is that the government program, the Medicare program, works and it works because you have this large pool that all the seniors are members of, and the private market has essentially told us in many cases that they are not going to provide the type of health insurance that many of the Republicans have talked about. The gentleman says that Democrats are against HMOs. I do not have a problem with HMOs and managed care. He mentioned my home State of New Jersey. Sure, lots of seniors sign up for HMOs in New Jersey. But the problem is that the HMOs have increasingly dropped the seniors. Something like 80,000 to 100,000 New Jersey seniors in the last few years have been dropped by HMOs. All we are saying, as Democrats, is we do not want seniors to be forced into managed care, forced into HMOs in order to get a drug benefit. That is what the gentleman is doing. That is what the Republicans are doing with this bill. Essentially, the only way practically speaking that you are going to be able to get a drug benefit is if you join an HMO, and then you lose your choice of doctors. That is not fair. If you really cared about Medicare, and you wanted to just expand it and include a prescription drug benefit to deal with preventive care, then all you have to do is what the Democrats have said all along, add the drug benefit to traditional Medicare. We have talked about that. We have said just like you have part B now for your doctor bills, where you pay about a $50 a month premium, you have a $100 deductible for your first doctor's visit and after that the Federal Government pays 80 percent of the cost and you pay 20 percent up to a certain amount when the Federal Government pays the whole thing. We advocated and we voted on a substitute to this awful Republican bill. We had a Democratic substitute that did exactly the same. You paid $25 a month, the first $100 deductible on your drug bills you have to pay, and after that 80 percent is paid for by the Federal Government, 20 percent by you, up to a certain amount, and then the Federal Government pays 100 percent. If you really liked traditional Medicare and wanted to keep it going the way it is, then you would not have any problem doing just that. Take whatever pot of money you have and add a prescription drug benefit to traditional Medicare. But that is not what you do. The Republicans basically want to privatize, and they force people to go into an HMO to get the drug benefit. The gentlewoman's motion here is very simple. Basically, she is saying do not give extra money to the HMOs and the private insurers because we know that they cannot compete with the regular Medicare program. Do not give them the windfall and extra money in order to make them participate in this plan. Take that money and give it, as she said, to the doctors to increase their reimbursement rate. Whether we give it to the doctors or whomever we give it to, the bottom line is that we should not be giving windfall dollars to HMOs and private insurers so that they have extra money to compete with the traditional Medicare fee-for-service. If my colleagues feel that there needs to be competition and that HMOs should be out there as an option, or other private insurance options should be out there, then let them compete in a traditional way. Do not give them all this extra money and say, Here is some extra money, so you come into the market, because then we do not have fair competition. We do not have fair competition at all. We are giving them extra money, and what we are going to ultimately do is to make it impossible for people to stay in traditional Medicare. The thing that really bothers me the most is that they keep mentioning on the Republican side all the different groups that support this Republican Medicare bill. They mention AARP, they mention the AMA, they mention the drug companies, PhARMA or whatever. The reason that all these different groups support this bill is because they are all getting a piece of the action. In other words, the doctors are getting an increased reimbursement rate, so of course they think it is a great bill. AARP is an insurance company. They are going to sell insurance, so they think it is a great idea. And the drug companies love it because they have a clause in here that says that the Secretary of Health and Human Services, the Medicare administrator, cannot negotiate price reductions, so they are happy because they can continue to charge higher price, increasing prices. So all these different special interest groups, they are all very happy; but the Medicare recipient, the senior, is the one that suffers because they are not being given an adequate benefit. Not only are you telling them that they have to join an HMO, but they are going to have to pay more out in their out-of-pocket in order to get any kind of drug benefit. If we look at the way this thing is structured, the deductible is $275, not $100. 275. The cost sharing, basically the Federal Government pays 75 percent of the cost but only up to $2,200 a year. After that there is a doughnut hole and the senior has to pay out of pocket up to $5,044. So what we are going to see here with these seniors is there is no set premium. So the HMO is going to come in and say they are going to charge them, who knows, $75 a month, $80 a month. The sky is the limit. There is no set premium; 275 deductible, between $2,200 and $5,000 out of pocket. They get nothing from the Federal Government. There is no reason for anybody to sign up for this thing because they are not getting a benefit. They have to lose their choice of doctors. They get a lousy benefit that is not even worth having. Meanwhile, all the special interests, the HMOs, get all this windfall in terms of dollars.

Mr. PALLONE. I yield to the gentleman from California.

Mr. PALLONE. Absolutely.