Frank Pallone

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, if I could comment on two things that the gentlewoman mentioned. Yesterday when we had the debate on the bill that would protect Members of Congress and Federal employees, the gentleman from Ohio (Mr. Strickland), one of the gentlewoman's colleagues, got up and pointed out that when the Senate passed their drug prescription drug bill before the break, they actually put in an amendment at the initiative, I think, of some Members that said that in no circumstances could Members of Congress get a more generous benefit than the rest of the seniors. And there was a quote in an article that the gentleman from Ohio (Mr. Strickland) brought on the floor where one of the Republican Members was saying that he did not have to worry, that he voted for that amendment because had he a guarantee that that amendment would never survive the conference, and that whatever bill came out of conference that we would finally vote on and go to the President, if there is such a bill, would not have that provision in it. So it was just amazing. The other thing the gentlewoman said, too, is that during the break, and I brought it with me, but I am not going to look for it now, there was an article on the front page of The New York Times that said that with regard to the major employers, the major companies that have negotiated through unions or whatever or maybe just on their own, have given generous prescription drug benefits to their retirees are actually now lobbying Congress in this conference committee when it starts to make sure that those provisions are still in there, because that is exactly what they want to do. A lot of the major corporations want to be able to drop the benefits for their retirees because they say it costs them too much and push them into the Republican Medicare prescription drug plan, which will not provide them with any real benefit. So they are actually lobbying now in the next few weeks to make sure that that provision is preserved so that they can drop the benefits and say, we do not need to provide our retirees with benefits because they are going to be under this new Republican Medicare prescription drug program. Two other things that the gentlewoman mentioned that I thought were so important. She talked about how in the Republican bill that passed here in the House they have this noninterference clause which the gentlewoman was trying to get an amendment to take out, and of course it was denied by the Republicans on the Committee on Rules; that the language specifically says that the Secretary of Health and Human Services, the Medicare Administrator, cannot negotiate price reductions, which, as the gentlewoman points out, would save so much. The reason that I think that is so significant, first of all, there is no question that if we were able to do that, we would probably have 30 or 40 percent reduction in prices from what we have now. I mean, everything I have ever seen shows that. So we say, why are the Republicans not doing this? The gentlewoman kind of hinted at it when she said they are doing the bidding of the drug companies, and the drug companies give them all this money, and so naturally they do not want to put it in. What the Republicans keep saying is that the reason why they are providing a bill that does not have as generous the benefits as what our Democratic substitute had was because they have to fit within this $400 billion budget. If they come up with this money, they say, we have to fit this bill into this $400 billion over a 10-year budget, this pot of money that we have; so we cannot do what the Democrats want because that would cost a lot more, maybe twice as much, to provide a meaningful benefit. But as the gentlewoman pointed out, if we were actually able to get rid of that noninterference clause and have the Secretary negotiate price reductions like they do with the Veterans Administration or with the Department of Defense and the military, we would bring the cost down so much that, in my opinion, the Democratic bill would not even cost any more because we would be saving the money by negotiating the price. But the reason they will not do that is because they are in the pockets of the drug companies, and the drug companies are never going to go for anything like that. The other thing I wanted to say, too, is that we operate, and it is a little bureaucratic, under this scoring system that is done by the Congressional Budget Office that if they have a bill, they send it to CBO, the Congressional Budget Office, and they tell them how much it is going to cost. So the Democratic bill is like $800 billion, and the Republican bill is like $400 billion. Again, I think if we did what the gentlewoman wanted, which is to have the negotiated price reductions, we would probably bring the Democratic bill down to close of what the cost of the Republican bill is. But beyond that I wanted to put out, because I think this is so important, and the gentleman from Washington (Mr. McDermott) has mentioned in the past, is that having people have access to prescription drugs is a preventative measure, and if they can take the prescription drugs and do not have to go to the hospital or the nursing home or have a serious operation, ultimately the Federal Government and the Medicare program are saved so much money that it is incredible. But the bureaucrats and the CBO, and I do not mean to attack them because I like them, but they do not allow us to take that into consideration. So not only could we bring the costs down through negotiated price reductions, but I think personally that if we were able to get all these people to have access to prescription drugs who did not, the Federal Government would save billions in not having to have operations, not having people institutionalized, hospitals, nursing homes. All that is paid for by the Federal Government.

Mr. PALLONE. I yield to the gentlewoman from Ohio.

Mr. PALLONE. Mr. Speaker, I do not expect to use all the time unless I am joined by some of my Democratic colleagues, but the purpose of my being here this evening is to talk about the need for a Medicare prescription drug plan; and as my colleagues know, just before the break, before the July 4 break, we did here in the House pass a Republican Medicare prescription drug proposal and another bill was passed in the other body that was sponsored by the Republican leadership, and I just wanted to say as emphatically as I could this evening that I believe very strongly that neither of these proposals, which would now go to conference, that neither of these proposals accomplish the goal of providing America's seniors with a prescription drug benefit that is worth having. I say that because I think it has to be understood that the effort to provide a prescription drug benefit is basically an effort to, in my opinion, or at least it has been sold as such by the President and the Republican leadership, as an effort to try to get almost all seniors involved on a voluntary basis in a prescription drug program that they would see as meaningful, that covers most of their drug expenses, and if we look at the bills that were passed by the Republican leadership in both Houses of Congress, they do not do that. Essentially what happens is that seniors have to pay out more in terms of premiums than they would get for the most part. If we have a voluntary program that most seniors do not sign up for, which is I believe strongly what would happen if either of these proposals became law, then we would not end up with the universality that is necessary for an insurance program like Medicare where, in the case of the existing Medicare program that pays for your hospital bills and your doctor bills, 99 percent of seniors sign up. If 10 or 15 percent of the seniors sign up for the proposal that has been passed in either House, effectively the program would be a failure because most seniors would not join. You would not have an insurance pool that actually went across the board and covered all seniors, and I am very fearful that that is what would result from either the bill that was passed here in the House, proposed by the Republican leadership, or the bill that was proposed by the Republican leadership in the other body. I see that I have been joined by one of my colleagues, and I just wanted to say before we get into a little dialogue hopefully among the Democrats that the Democrats proposed in the House a substitute bill which most Democrats supported and a few Republicans, I believe, that basically would be along the lines of the existing Medicare program and would be the opposite in the sense that I believe 99 percent of seniors would sign up for the program because it is generous enough to provide prescription drug coverage that most seniors would want to take advantage of. Essentially what we did in our Democratic alternative to the Republican bill was to model the program on the existing Medicare program. Under the existing Medicare program part A, seniors' hospital bills are paid for. Under the existing Medicare program part B, seniors' doctors' bills are paid for, and if I could use that as a model because that is essentially what the Democrats used as a model. Under part B, right now you pay a certain amount which I think is maybe $45 a month premium. You have a $100 deductible so when if you go in January and your doctor bill is a little over $100, that first $100 is not paid for. That is the deductible, but after that, 80 percent of your costs are paid for by the Federal Government, and you have a copayment of 20 percent for your doctor bills. It makes sense to go that route because most seniors, 99 percent, realize that part B is worth having. So they pay the $45 a month, and they get 80 percent of their costs after the $100 deductible paid for by the Federal Government, and it is a good bargain. You are paying so much a month, but you are getting a lot back in terms of value. So we as Democrats said, well, let us do the same thing. This has been a very successful program, part B; 99 percent of the seniors sign up for it. This has been a very successful program when it comes to paying the hospital bills or your doctor bills. Let us follow the same example with regard to prescription drugs, and our Democratic alternative, or substitute, said that seniors would pay $25 a month premium. They would have a $100 deductible, just like part B; and 80 percent of the cost of their prescription drugs would be paid for. There would be a 20 percent copay, up to $2,000. Once a senior expends $2,000 out of pocket for the copay, then 100 percent of the costs are paid for by the Federal Government. I do not understand why this is so difficult to comprehend and why the Republican leadership or the President cannot simply go along with this. It is modeled after a very successful Medicare program. Seniors will quickly understand that it is a good benefit. They will sign up for it. I guarantee 99 percent of the seniors, if not close to 100 percent, would sign up for this type of a program and take advantage of it. Instead, the Republicans say now we cannot do that for various reasons. We can get into that if my colleagues like; but they say, oh, no, no, we cannot do that. They come up with a very complicated, confusing, in my opinion, way of trying to administer a prescription drug benefit that relies on private plans that for the most part says that you have to join an HMO or some kind of managed care program to get any kind of drug benefit, which means that you lose your choice of doctors and possibly your choice of hospitals. They do not provide, as I said before, any kind of meaningful benefit even with the privatization and the fact that you are forced into an HMO. I just wanted to give an example of why I think that these two, both the House version and the Senate Republican version, are unworkable and just briefly. This is the Senate bill which some people feel is better, but I do not really think is. It is maybe slightly better than the House bill, but not anything that anybody would sign up for. Under the Senate bill, a beneficiary would pay $420 a year in premiums, would have a $475 deductible, and after the deductible is met, a beneficiary in Medicare would share the costs. In other words, 50 percent of your drug bills would be paid for by the Federal Government, 50 percent you pay out of pocket, up to $4,500 in total drug expenses, and then there is what we call a doughnut hole. If your drug bills are from $4,500 to $5,800, you pay 100 percent of the costs, and then after that, over $5,800 you pay 10 percent. Now, when I say seniors will not want this, keep in mind what you are talking about here. You are talking about a premium that you have to pay per month. You have not a $100 deductible, but a $275 deductible; but then only 50 percent of your costs are paid for by the Federal Government. You have to pay the other 50 percent and there is this doughnut hole at some point where the Federal Government does not pay anything. Why in the world would you sign up for it? I talked to my seniors during the July 4 break. I met a lot of them. I asked them a lot of the question, would you sign up for that. Most of them said no. The only way you would sign up is if your drug bills were so expensive and you had enough money to not only pay the premium but also to pay the 50 percent copay; and most seniors, unless they are in certain financial circumstances and they have a huge drug bill expense, they would not do it. The House bill is even worse. Under the House bill, there is $420 in premium, $250 deductible; and after the deductible is met, the beneficiary in Medicare would share drug costs 80/20, like I said with the Democratic bill, 80 percent paid for by the Federal Government, but only up to $2,000 in total drug expenses. After that, from $2,000 to $4,000 or to $4,900, the senior pays 100 percent of the costs. Again, why in the world would you sign up for such a thing? Essentially, if you look at the situation in the House version, the majority of seniors fall into the doughnut hole, and most seniors under the House or the Senate bill would end up paying more out of pocket than they would benefit from the Federal Government. So what we have been saying, Democrats, is the Republicans are essentially involved in a sham here. The President says, oh, okay, we are going to provide prescription drug benefits. The House Republicans and the Senate Republicans say we are going to do it, but the benefit is not worth what you pay out. You have to join private plans for the most part, which means an HMO, and you lose your doctor. You might even lose your choice of hospital. Why in the world would you sign up for it? If you do not adopt the type of program like the Democratic substitute, which is modeled after the existing Medicare program, the bottom line is you do not have a program that has any meaning to seniors, and I am just afraid we have this huge hoax that is being played upon us by the Republican leadership and the President. If something actually comes out of the conference and is signed into law, people are not going to know they are getting something that is meaningless. They will not even find out till 2006 what it really means because it does not go into effect for another 3 years; and in the meantime, I guess the President and the Republicans can go around and say we have done something for prescription drugs, but they really would not have done anything at all. I see my colleagues are here; and I would like to yield, first of all, to the gentleman from Washington who is a physician and member of the Committee on Ways and Means and has been a leader on this issue, and I have to say to my friend that I know he has been active for universal health care, and we do not have a majority in this House to pass a universal health care, but I support it because I really believe that ultimately we have to have a health care program that does not just deal with drugs but deals with all health care and that everyone can take advantage of. So I admire his work, and I would like to yield to the gentleman.

Mr. PALLONE. Mr. Speaker, I yield to the gentlewoman from Ohio (Ms. Kaptur), who has been a leader on this issue.

Mr. PALLONE. Mr. Speaker, I thank the gentlewoman from Ohio. I know the hour is late, but I just would like to comment on a few facts that she mentioned because I think they are so important and also relate to what our colleague from Washington said a little earlier. First of all, yesterday when the Republicans, I guess it was the Republicans who represent a lot of Federal workers, the gentleman from Virginia and a couple of others that represent these districts where there are a lot of Federal workers, and I suspect what happened is that they went home during the break and probably got a lot of complaints from the Federal workers in their district that they did not want to leave the Federal program that they had as retirees, which has a very generous prescription drug benefit, and be transferred into this Medicare program that the Republicans are now offering in the House and the Senate. So the first thing they did, as the gentlewoman said, when they came back on Tuesday was to bring up this bill that said that there was no way that any Federal employee, including Members of Congress, of course, would be forced into this new Medicare program; that they would be allowed to keep their generous benefits that they have now. I cannot argue with that. I certainly do not want any Federal employee, because I have some as well, to lose the benefits that they have under the Federal employee plan in order to join what the gentlewoman and I both know is this lousy Medicare program that the Republicans are putting forth, but it is such hypocrisy. Not only in voting for that are Members of Congress protecting themselves, but the Republicans are essentially admitting if they have a significant number of Federal workers that the proposal they put forward for Medicare prescription drugs is a lousy plan, and they want to make sure that the Federal workers do not have to join it. I can understand that. I mean, I agree. But why do they not admit as Republicans that the reason they are proposing this bill is because the plan they proposed for all the other seniors stinks essentially? We tried to get them to admit that, and of course they would not. They just, oh, no. That is a good program. We are proposing a good program for all the other seniors, but the Federal workers should not have to join it just in case maybe it is not a good program. But I agree with the gentlewoman, the hypocrisy of that was just unbelievable. And I mentioned one statistic yesterday that I thought was interesting. It said the most popular plan among Federal workers is the Blue Cross/Blue Shield standard option. And the Congressional Research Service estimates that drug benefits under that plan are worth about 50 percent more than the proposed Republican Medicare drug benefits. So there we go. Why would anybody want to give up their drug plan under Blue Cross/Blue Shield and have it worth 50 percent less?

Mr. PALLONE. I yield to the gentlewoman from Ohio.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I kept hearing my Republican colleagues talk about parity for Federal employees; and I support this billing as well, because I do believe that Federal retirees should have good prescription drug benefits. But it is not an issue of parity. It is an issue of hypocrisy, hypocrisy because the Republicans say that they want to preserve a generous prescription drug benefit for Federal retirees, but at the same time they were not willing to provide it for the other seniors around the country. The bottom line is that the Medicare prescription drug benefit that the Republicans have proposed both in this House and the other House is no real benefit. It is a meaningless benefit. It is not generous enough that anybody would even sign up for it. And they wanted to make sure that the Federal retirees do not get stuck being forced into that Medicare system that they have proposed, which essentially gives an almost worthless prescription drug benefit to most seniors. Well, there is a lot of hypocrisy saying you want to preserve it for the Members of Congress, for the President, and for Federal retirees, but not give it to seniors in general. There was an article in today's New York Times that had a little grid, and it talked about how Federal retirees' drug benefits stacked up with those under the Medicare prescription drug plan the Republicans have proposed for the rest of the seniors. And guess what? Average premium for Federal employees, nothing. No additional premium for drug benefits. But in the Senate bill, $35 a month, or $420 a year; in the House, $35 a month. What about the deductible? For Federal retirees, no deductible. But in the Senate bill, for the rest of the seniors, $275; in the House bill, $250. What about gap in coverage? For Federal retirees, no gap in coverage, but then there are major gaps in the Senate bill, $4,500 to $5,800 a year; in the House bill, $2,000 to $4,900 a year. In fact, there is a statement that for the most popular plan among Federal workers, Blue Cross/Blue Shield, the Congressional Research Service estimates that drug benefits under the plan are worth 50 percent more than the proposed Republican bill. Hypocrisy, not parity. Give the same benefits to the rest of the seniors. That is the fair thing to do.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I ask unanimous consent that my name be removed from the list of cosponsors for H.R. 1063.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise today to laud the accomplishments of Mr. Sharad Shah, and the organization he helped create, The Share and Care Foundation. Share and Care is a unique organization that provides medical equipment, food, basic health care, crisis and disaster relief, youth vocational training, internship programs, scholarships and more to those desperately in need. This forum has been the starting ground for many people, and has provided a much-needed service to lift up underprivileged children and women faced with seemingly insurmountable obstacles, and set them on the road to a productive life. Share and Care, the brainchild of a small group of Indian-Americans, was born in 1982 in New Jersey. More than 50 active volunteers are involved in multifaceted projects and services. The volunteers see themselves as catalysts, promoting low cost, high return programs at grass root levels. Their 100% volunteer organization maximizes the utilization of funds for a deserving cause. In the last twenty years this organization has grown over a hundred fold. Share and Care has offered its services since the Bhopal tragedy in 1984 to the recent Gujarat earthquake in 2001. Share and Care aided in building schools, hospitals, training centers, health camps and blood banks, and sponsored thousands of students seeking an education. This Foundation has directed more than $5 million in cash and kind donations to the victims of the January 2001 earthquake. About 2,500 individuals throughout the United States donated more than $1 million for the effort. Additionally, about 50 corporations and groups collected donations and chose Share and Care to distribute the money in order to deliver relief to the people of Gujarat. This Foundation is a recognized name that people trust with their donations and can rely on for help in the most tragic times. Their numerous community and rehabilitation initiatives have totaled more than $30 million. Mr. Speaker, on this day I rise up to acknowledge a truly remarkable individual and I ask that my colleagues join me in honoring Mr. Shah and his organization for the fine and important work they have done over the past twenty years.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I just do not know how many tricks or hoaxes the Republican leadership is going to play on us tonight and on the American people. It is unbelievable. I listened to the gentleman from Pennsylvania. He said there is going to be Medicare reform tonight. There is not going to be Medicare reform. It is just going to be an effort to kill Medicare and destroy Medicare. And then they say they are going to bring up a prescription drug benefit tonight that really is not any meaningful benefit that forces one into HMOs, that denies them of choices of doctors and hospitals. And now this one, the ultimate trick, which I guess we did not really even know about until today, that basically tries to undercut employer-based health insurance. When does it end? When are the Republicans going to end what they are trying to do to destroy the health care system? Mr. Speaker, although we would like to provide health coverage for those who are uninsured, this bill does little or nothing to help the low-income uninsured. Individuals eligible for the tax credit under the Thomas bill would have to be uninsured or in high deductible plans, but according to the bill, starting in 2004, those individuals could set aside up to $2,000 tax free into a new health savings account to supposedly help pay for health insurance. But the argument that the bill will assist the uninsured is simply not true. Most uninsured have incomes that are too low to owe Federal income tax liability, let alone have $2,000 to set aside for this purpose. In addition, self-employed individuals, the other large segment of the uninsured, may already deduct 100 percent of the health insurance costs. The only consequence of this bill is to undercut the provision of employer-sponsored health care coverage by encouraging employers to raise deductibles or potentially drop their coverage and raise the cost of health care for low income, older and sick workers with higher co- payments and premiums. And, lastly, as many of the speakers on our side have said, this legislation will cost the government over $173 billion, another in a series of fiscally irresponsible tax cuts passed by the House. The entire cost of the bill will be funded by borrowing, increasing the national debt. Where does this end? We have a national debt 4-, $500 billion. Where is it going to end?

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, the only thing that stinks here is the Republican bill, and it stinks for a lot of reasons. First of all, because it is not going to give the seniors any benefit. They are not going to have really any drug benefit whatsoever. It is going to force them into an HMO. They will not have any choice of doctors. And fundamentally, in the end what the Republican bill does is kill Medicare by setting up a voucher system so we do not even have traditional Medicare. I am sick and tired of hearing my Republican colleagues on the other side criticize traditional Medicare. Medicare is not insolvent. Medicare is a good program. Do not tell me that Medicare is broke or Medicare needs to be fixed. And I say to the gentlewoman from Connecticut, do not insult me and say the Democrats are irresponsible, the Democrats are putting us in debt. The Republicans are the ones that are putting us in debt, because you are borrowing from the trust fund so there is no money left in it because you want to kill Medicare. That is what you are all about. These gentlemen over here, these Democrats who have been here for a long time, they are here tonight because they want to save Medicare. They understand that Medicare can be helped by putting on a prescription drug benefit, so they look at the tried and true system, they look at what we do in part B for our doctor bills, and they say, yes, let us just add a benefit like part B. We will have a low premium. We will have a low deductible. We will pay 80 percent of the cost on the Federal Government. We will have a catastrophic at 2,000. Just add the tried and true program, like we have in part B, and add a drug benefit. We do not need HMOs. We do not need all of these other gimmicks that the Republicans come up with. And then these gentlemen, my colleagues, the gentleman from Michigan (Mr. Dingell) and the gentleman from New York (Mr. Rangel), they say, well, we can pay for this very easily by negotiating the price and giving the Secretary the power to lower the prices. That would cut the program in half. That is what our Democratic leader said. That would cut the cost of the program in half so we would not have to go into debt. We would not have to borrow from the trust fund and make it insolvent, which is what my Republican colleagues have been doing here and what they are proposing. Mr. Speaker, do not sell out to the HMOs and the insurance companies. That is what you are doing. You are selling out by saying everybody has got to go into an HMO because you are in bed with the insurance companies. You are selling out to the pharmaceutical industry because you want no price reductions, because you are going to get some benefit from the pharmaceutical industry. And then you come up with: this is complicated. The gentleman from Pennsylvania (Mr. Greenwood) said, oh this is complicated. There is nothing complicated here. It is simple. We have had the program for years. We just add the prescription drug benefit, and we have a negotiated price. It is very simple. Do not give me this chart. I mean, look at this garbage. How could anyone possibly understand it? I cannot even understand it myself, and you expect my mother or somebody's grandmother to understand this thing? You are making it complicated. You are destroying Medicare. Do not insult us as Democrats. We have been out there protecting it for years.

Mr. PALLONE

Mr. PALLONE. Exactly. We are going to have the debate tomorrow, I hope. I just do not understand why something which is so simple is not understood by our Republican colleagues, and I come to the conclusion that they are in the pocket of the special interests, whether it is the insurance companies or the pharmaceutical companies. Otherwise it does not make sense.

Mr. PALLONE. Mr. Speaker, I yield to the gentlewoman from Ohio (Ms. Kaptur).

Mr. PALLONE. I just want to say, they operate on the premise, and they keep saying it over and over again, I have heard it on the other side in the well, on the Republican side, that Medicare is broke, Medicare needs to be fixed, and Medicare does not work. It is not true. They say those things in order to set up Medicare to be changed significantly. The bottom line is my seniors tell me Medicare works. Medicare is good. That is what the gentleman from California (Mr. Thomas) is essentially saying, keep this line up that Medicare is bad and broken, then you can make all these changes because you say you are going to improve. But it is not being improved. It is actually being destroyed by what they are trying to do. Mr. Speaker, I now yield to the gentleman from Connecticut (Mr. Larson).

Mr. PALLONE. Mr. Speaker, I yield to the gentlewoman from Ohio.

Mr. PALLONE. And again, because the gentleman and I feel very strongly about the fact that we feel the Republicans are just catering to the insurance companies and to the prescription drug companies, the very reason why the Republican plan, in my opinion, is so complicated and ultimately, I think, breaks Medicare and destroys Medicare is because they are going out of their way to try to cater to these two special interests. Because to the extent that they feel the necessity of privatizing and having seniors eventually buy private health insurance, they are essentially breaking the system. And in the same way because they refuse to have any kind of negotiated price and bring prices down, they are making the prescription drug program essentially not a generous plan because what they want to do essentially is have more seniors buy drugs at higher prices but not allow them to have a plan that is really something that is going to be meaningful for them and help them. I feel strongly what is going to happen if this Republican plan were to ever become law, and hopefully it does not, but probably what would happen is most seniors would not opt for it because they would find it is not worth having. And just to illustrate that, I think pretty dramatically, the Consumers Union put out a report on June 17, just a week ago, that was entitled ``Skimpy Benefits and Unchecked Expenditures. Medicare prescription drug bills fail to offer adequate protections for seniors and peoples with disabilities.'' And in talking about how skimpy these benefits were and why most seniors probably would not opt for them, they gave some examples which I thought were pretty significant. Specifically, we found, the report says, that the average Medicare beneficiary, without prescription drug coverage, spending $2,318 in this year, 2003, would find that his or her out-of-pocket costs for prescription drugs, including premium deductible copayments and the donut, are higher in 2007 despite the new prescription drug benefit, and would total $2,954 in real 2003 dollars. So what they are saying is for the average Medicare beneficiary, who spends about $2,300 a year in out-of-pocket costs, if they had to pay the premium and they were under the deductible and the copayments in the donut hole that the Republicans here in the House have proposed, they would actually end up spending more money out-of-pocket with the Republican plan than they are spending now. So why in the world would anybody buy it? What is going to happen here is that the senior citizens are going to realize that this is not even worth having, and they are going to vote with their feet. They are not even going to take advantage of the plan because they are going to realize that it is worthless. Here is another example. A Medicare beneficiary with the relatively low expenditures in 2003 of $500, in other words these are the seniors that do not spend much for drugs, maybe a third of the senior population, would find his or her out-of-pocket payments for prescription drugs are $790 in 2007. So, again, if they do not spend much money on prescription drugs, they would have absolutely no reason to opt for this Republican plan. Then they go to a person in the top third of prescription drug spending with costs of $3,000 in 2003 would find his or her out-of- pocket costs reaching $4,000 in 2007. I do not want to go on and on here with this, but the only point I want to make is that it is such a hoax. Because we can talk here all night about why they are privatizing and why that is bad or why they have the donut hole or why they are not doing anything about price, but the bottom line is nobody is even going to want this plan. Why in the world would they even buy it when it is going to cost them more if they have it, for most seniors, than if they do not? That is what all the senior groups are pointing out. This is a huge hoax because most seniors will calculate and figure out it is not even worth having this plan. That, I think, is the worst aspect of all. Because there is all this hype, with the President getting on TV and saying we are going to do this plan and we are going to provide prescription drugs, and it is not anything anybody is even going to want because it is not worth having.

Mr. PALLONE. Absolutely. And I mentioned this noninterference clause, and I will mention it again. Before I do that, just quickly, I know we have spent a lot of time tonight, not only us but our Democratic colleagues earlier this evening, talking about what is wrong with the Republican plan. Maybe we should quickly explain what our alternative is, and the gentleman talked about it in terms of the price. We are saying forget about all this nonsense of changing Medicare and privatizing Medicare. Forget about all this nonsense about having to go to an HMO to get your prescription drugs. Just take the same Medicare program that has been so successful and add a prescription drug benefit in the same way that we added a few years ago a program under part B that pays for your doctor bills. In other words, without getting too complicated, Medicare part A pays for your hospitalization. Medicare part B is a program where you pay a certain amount of money per month for a premium, and when you go to your doctor there is a $100 deductible for the whole year, and 80 percent of the costs of your doctor bill is paid for by the Federal Government and 20 percent is paid for by you. Very simple program. You pay a small premium, 80 percent of the costs by the Federal Government, 20 percent co-pay by you, a $100 deductible which is not much. You might go through that on your first doctor visit. What we are saying is do the same thing with the prescription drug benefit. Add another part to Medicare, charge $25 a month for a premium, have a $100 deductible for the first $100 drug expense you pay in the course of the year; and then after that, 80 percent of the cost of your prescription drugs are paid for by the Federal Government and 20 percent are paid for by you up to a certain level, 3, $4,000 catastrophic when it is all paid for by the Federal Government. But most important, what we put in the Democratic alternative which is what my colleague from Ohio mentioned, is we have mandated that the Secretary of Health and Human Services or the Medicare administrator has to negotiate lower prices because now that person has 40 million seniors that they can negotiate in bulk as the gentlewoman from Ohio (Ms. Kaptur) said and try to get a lower price. Now, if you do that, you save so much money that you can afford to essentially have a program that covers all seniors and gives them a guaranteed benefit and does not have any doughnut hole or time, if you will, when they are not covered. I used this chart during the Committee on Commerce of a dunking doughnut, and I said the GOP is dunking seniors because one out of every two seniors is in the hole. I guess it is a cute way to say that under the House Republican plan one out of two seniors is going to be in a situation where at some point they are going to have to pay 100 percent of their drug costs because the Republicans say that up to $2,000 we will pay a certain percent, but after that we will not, and so for one out of two seniors they will be in a situation where they do not have any coverage during the course of the year.

Mr. PALLONE. Mr. Speaker, I just wanted to explain, if I could just briefly, and then I would ask the gentleman from Ohio (Mr. Brown) to comment on it as well, why I say that what the Republicans are proposing here is basically a boondoggle for the insurance companies as well as for the drug companies, and why, the very fact of the Republicans trying to do their bidding is going to destroy the program. I talked earlier about two things. I said on the one hand, we know that insurance companies, generally speaking, do not want to cover senior citizens because they are older, they are frailer, they are more expensive. So in suggesting in the bill, in mandating, I should say, in the Republican version of the bill, in the House version, that by a certain year seniors will get a voucher and they will have to go out and shop for their insurance privately, we know that no insurance company is going to want to offer that insurance. So what the Republicans do is they subsidize the private insurance companies. Basically, at our Committee on Energy and Commerce Committee markup the other day when we were both there, some questions were asked by the Democrats about how this process is going to work. How is it that you are going to give a voucher to seniors and they are going to go out into the private sector to buy insurance instead of Medicare when we know that insurance companies do not want to offer that coverage because they cannot afford it? The response that came back from the Republicans and the counsel for the Republicans: we will just keep giving them more and more money, higher and higher subsidies, until someone finally provides this type of insurance privately. Now, what does that do? That means that these insurance companies are going to have a windfall, but they are not going to provide the same kind of coverage that seniors have now under the government-run Medicare program, so the seniors are going to get less services and the Federal Government is going to be paying more money. It undermines the very nature of the program and simply lines the pockets of the insurance companies. Talk about that, and then we will go to the drugs.

Mr. PALLONE. Mr. Speaker, in closing, I thank the Members, and we will go onward to the Committee on Rules. Let us hope that they actually meet sometime before midnight. We will certainly carry this forward tomorrow because we are not going to stop until we have the opportunity to have a really good Medicare prescription drug plan.

Mr. PALLONE. Mr. Speaker, I want to say I think all of us feel very strongly that we want to look at this practically. We are not ideologically driven. We are not driven by campaign contributions. We just feel it is time to add a prescription drug benefit to Medicare; and we feel strongly that Medicare works, it is a good program. It is not something that needs to be scrapped because the seniors are not telling us they do not like Medicare. The simple thing the Democrats say is we need a prescription drug benefit. It is time for that. Let us simply add it to the existing Medicare program. Let us set it up like we do with part B and have a low premium and a low deductible and 80 percent of the cost paid for by the Federal Government. And as the gentlewoman from Ohio (Ms. Kaptur) said, we have to have negotiated prices because otherwise the cost of the program is going to become so prohibitive the Federal Government would not be able to pay for it eventually.

Mr. PALLONE. I agree with the gentleman completely. And my only point I am trying to stress here tonight and the gentleman certainly made the same point is because of the fact that the Republicans want to cater to the insurance interests and to the prescription drug pharmaceutical companies' interests, they are essentially going to destroy the Medicare program, in other words, if you look at the insurance aspect. If they keep giving more and more larger subsidies to private insurance companies so they will eventually cover senior citizens, there will be so little money left in the traditional Medicare program that is government run that it will be broke. The government will not be able to pay for it anymore. So essentially by giving all this money to the private insurance companies to get them to try to insure seniors, we will make it much more difficult for the traditional Medicare program to operate. Let us go to the prescription drugs part. We know there are several problems with the Republican plan on prescription drugs. First of all, it is not very generous. In other words, you will have to pay a lot more than out-of-pocket and not get much of a benefit. In the case of the House plan, there is a huge doughnut hole so that if your expenses are over $2,000 until maybe $4,000 or $4,500, you get no benefit. In the case of the Republican plan in the Senate, it only pays for 50 percent of your coverage. So seniors are going to have to pay a lot of money out of pocket, and they are going to have to get very, very little in return. In addition to that, in order to get the plan, they have to join an HMO. So, again, here we go back to the same thing again which is the Republicans are saying if you wanted to get any kind of drug benefit, and it is not even a good benefit, you have to join an HMO; and if no HMO wants to join the drug plan, we will give them more money so eventually they will. But the real problem is we know that unless something is done by the Federal Government to control the price of the drugs, the cost of the drugs is going to rise and the Federal Government will not be able to pay for the program. In other words, I am saying because you do not have any way of controlling prices either through negotiation or some other means, the cost of prescription drugs is going to continue to go up and the drug companies are going to get all of this money. But at the same time, the Federal Government is going to have an increasing problem paying for it. In other words, if you were able to control prices in some way by having the Secretary or the Medicare administrator negotiate prices, you would save money for the program and you would not have to keep shelling out all these dollars or limiting the generosity of the program so that seniors do not get much of a benefit. They are going to kill the whole idea of the drug program by not having some limitation on price.

Mr. PALLONE. Mr. Speaker, many of my Democratic colleagues took to the well this evening to talk about their concerns over the Republican Medicare bill, the Republican Medicare prescription drug bill that we expect to come to the floor here in the House of Representatives tomorrow. But I have to start out this evening by pointing out unfortunately that we do not really know what bill is going to come up tomorrow. We are waiting. Many of us are actually waiting right now to see what the Committee on Rules will do. The Republican bill has not actually been filed yet, and the latest information is it may not be filed until 11 or 12 o'clock and Committee on Rules will then consider the bill an hour after that, which might be one or two o'clock in the morning, and at that time Members, particularly Democratic Members, would be asked to come, review the bill very quickly obviously, and suggest any amendments or changes they might have to the Republican bill. And I would suggest that that is certainly not the way to operate, particularly on a bill that is so important. I think all of us agree that Medicare is one of the most important programs that the Federal Government has ever offered, and to think that most of us will come here tomorrow and will not have even had the opportunity to see the bill and that the Republicans in having this Committee on Rules meet late at night where they would consider amendments would do such so late when most Members will not even be able to offer an amendment, it is just really a travesty of the process; and I have to believe that it is intentional. I do not think there is any question about it. The last vote today in the House of Representatives was about 5 o'clock. Why could all this not begin during the day or just after the session ended? Why does it have to take place at 12 o'clock midnight or even later? It puts a great deal of fear in me, and it is pretty obvious from looking at some of the proposals that have already been considered in the committee, both in the Committee on Energy and Commerce, where I serve, as well as in the Committee on Ways and Means, that what the Republicans have in mind essentially kills Medicare. And I know that is a very severe thing to say. Many of my colleagues have said that this evening, that the Republican Medicare prescription drug proposal actually kills or destroys Medicare, and one might say to oneself how could we make such a statement? What is the basis for our making that statement? And I would say that the real reason we say it is because if we look at the Republican bill here in the House, it essentially privatizes Medicare. What does that mean? The Federal Government operates a Medicare program. It is a Federal program operated by the government. And what the Republicans are proposing in this bill is that rather than have the government run a health care program for seniors and pay out the money for the program to the doctors and the hospitals, that rather they would give seniors a certain amount of money. We call it a voucher. And those seniors would instead under the Republican plan be expected to go out and purchase their health insurance privately just like somebody might who is younger. The problem with that, though, is that historically when Medicare was started back in the 1960s under President Lyndon Johnson, the majority of seniors could not find health insurance. They were unable to buy health insurance because the way insurance works, it is like a pool, and people who are older tend to be frailer, tend to be sick or tend to have to go to the hospital more. Those are not the people that insurance companies want to sell a policy to because they cannot make any money. And most of the insurance companies have told us that effectively they are not going to sell those insurance policies because they still cannot make any money today. Nothing has changed from the 1960s until this year. Seniors are still the most vulnerable and the sickest population, the population that has to go to the hospital and to the doctor most often. Why in the world would anybody want to sell an insurance policy to seniors or at least to a lot of seniors? What we are seeing here is that the Republicans, maybe because of their ideology, maybe because of their being beholden to the insurance companies, whatever reason there is, they essentially want to set up a system whereby the traditional Medicare that we have, which is a government program that guarantees certain benefits, would now essentially be privatized and they would get a certain amount of money and hope that they could go out and buy health insurance in the private market. It is a very vicious, in my opinion, thing to do. It is a wrong thing to do because Medicare has been a very successful program. If we look at Medicare at the time when Lyndon Johnson signed the first bill, the situation for America's seniors has just changed dramatically. Most seniors had no health insurance. Many of them could not afford any kind of significant health care. They had to go to a clinic or they had to go to charity care in order to pay for their health care, but all that has changed. Right now America's seniors have high-quality medical care, and they have protection from the devastating causes of illness because of this Federal program. And each of the 40 million Americans served by America today can attest to the program's stability, its affordability, and universal nature that has touched all seniors as well as disabled people alike. So why do the Republicans want to change that? What possible reason could they have to change it? I would hope that the Republican majority would realize that if they do pass legislation that changes and drastically changes Medicare and privatizes it that they are not really modernizing the program and what they are effectively doing is killing the program. Now, I cannot say that I am optimistic about what the Republicans might do tonight in the Committee on Rules. It just seems like many Republicans, because of their idealogy, want to dismantle Medicare or they want to privatize drug coverage, or they want the prices of prescription drugs to continue to soar. It really gets to my second point which I think was very well made by my colleague, the gentlewoman from Ohio (Ms. Kaptur), just a little earlier this evening. She pointed out, essentially, that not only do the Republicans, in their effort to change Medicare and, I say, essentially destroy Medicare, not only do they not want to continue the traditional government program that we have had so successfully under Medicare, but in putting together what they claim will be a prescription drug program, which is the reason, theoretically now, why they are changing Medicare, is because they want to provide some kind of prescription drug program. However, they are doing it in a way that does not really add a meaningful prescription drug benefit, and that makes seniors pay a lot of money for their prescription drugs and, in some cases, more out-of-pocket than they would have to pay now, even without a benefit program. But, most of all, they do not want to address the issue of price. Mr. Speaker, when I go around to my senior citizens, they tell me they like Medicare but, they say, the only thing they do not like about Medicare is that it does not cover prescription drugs, and the reason they feel that it should cover prescription drugs is because the cost of prescription drugs has gone up so much that they simply cannot afford to pay for those prescription drugs out-of-pocket. Now, one might say to oneself, if the real problem with prescription drugs is the increasing costs, then why do the Republicans not want to do something about it? Why do they not just say in their bill that one of the ways that we are going to help senior citizens is by saying that the Secretary of Health and Human Services, or the Administrator in Washington of the Medicare program, could take the buying power of all of these senior citizens and essentially negotiate lower prices? I mean this is what the HMOs do now, they negotiate lower prices when they buy prescription drugs. This is what the Veterans' Administration does. This is what the military does. They try to negotiate lower prices for prescription drugs, as the gentlewoman from Ohio said, by buying in bulk. But what we find in this Republican bill is that they not only do not want to do that, in the same way that they were concerned about insurance companies, wanting to help them, now they want to help the drug companies by not allowing any mechanism in the bill that would lower drug costs or that would allow the Federal Government to lower drug costs. So what we have, and the gentlewoman from Ohio pointed it out very effectively, we actually have in the Republican prescription drug bill a clause which is entitled the ``Noninterference Clause'' that says, ``In carrying out its duties with respect to the provision of qualified prescription drug coverage to beneficiaries under this title, the Administrator,'' and that refers to the Medicare Administrator, ``may not require a particular formula or institute a price structure for the reimbursement of covered outpatient drugs; interfere in any way with negotiations that are taking place between some of the other elements of the plan; or otherwise interfere with the competitive nature of providing such coverage through such sponsors and organizations.'' This is a little roundabout way of saying that the Administrator of the Medicare program cannot do anything to interfere with price. He cannot negotiate price reductions. He cannot say to the drug companies, well, one of you give me a better price than the other. And the reason for that is because essentially, they do not want the drug companies to have to worry about possibly losing some money or not making as much money because the price goes down. I only mention this by way of introduction, because there are a lot more things that I want to say tonight about the Republican bill that is going to be before us tomorrow, Mr. Speaker. But I only say this because I think that the sort of hallmark of this Republican legislation, and the greatest criticism that I have and that most of my Democratic colleagues have about it, is one, it tries to destroy Medicare by privatizing it, which may be, in some ways, a boon to the insurance companies or a way of helping the insurance companies; and secondly, it does nothing about lowering the price of prescription drugs, which again I think is some significant effort on the part of the Republicans to help the prescription drug companies. So instead of looking at this legislation as a way of trying to help seniors improve Medicare by simply adding a prescription drug benefit, what we see is the Republican Party and the Republican leadership in the House essentially being in bed with the insurance companies and the drug companies to make sure that whatever is offered for Medicare and for prescription drugs does not in any way harm them or their interests. Mr. Speaker, I do not have any problem if an insurance company or a drug company wants to make some money. There are a lot of drug companies in my State of New Jersey, and God bless them, they should make money and they should hire more people. But it is ridiculous that in crafting this legislation that is so important to the future of America's seniors, that the two things that are most important, the two things that are most important to the Republicans is that they do not do anything to hurt the insurance companies or anything to hurt the drug companies. I think that says a lot about where they are coming from with this bill that we expect to be considered tomorrow. Mr. Speaker, I yield to the gentleman from Ohio (Mr. Brown), who is the ranking member on our Subcommittee on Health and who has been here every night talking about the need for a prescription drug benefit, but realizes, as I do, that this Republican bill falls short and, in fact, hurts the Medicare program.

Mr. PALLONE. Well, the gentleman mentioned Glaxo. Down here I guess is line 6, GlaxoSmithKline in the last congressional campaign gave $1.3 million to congressional candidates. Twenty-two percent went to Democrats, 78 percent went to Republicans. And then if you look at all of the PhRMA, which is the prescription drug trade company, they spent $3.1 million, 5 percent for Democrats, 95 percent for Republicans. So those statistics alone give us an idea of where the money is going.

Mr. PALLONE

Mr. PALLONE. I second the motion, Mr. Speaker.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise today to recognize Joseph C. Spicuzzo, a friend and distinguished public servant who has dedicated much of his life to improving the lives of others. Joe is being awarded the Americanism Award by the Anti-Defamation League tonight in New Brunswick, New Jersey not only for his distinguished public service but for his dedication to raising funds for important charitable causes. Joe began his long career of public service with his election as Mayor of Spotswood in 1976 and currently is the Middlesex County Sheriff and the Chairman of the Middlesex County Democratic Organization. Joe was also asked by Governor McGreevey to take on the added responsibility of being the ``Chair of Chairs'', an informal position that allows him direct access to the Governor and his staff to help resolve outstanding issues affecting the individual counties in the State. Joe has demonstrated great success in leadership positions mainly because of the confidence people have in his interpersonal skills, his ability to settle disputes, and his affable manner. In addition to the dedication Joe has illustrated in his public service, he has been a tireless fundraiser for important charitable causes. He has raised funds for the American Heart Association, a cause especially dear to him because of the death of his father at an early age from this silent killer. Joe became a key figure in the annual fundraising drive, Operation Heartbeat, held every February on WCTC radio station. He has been recognized with an American Heart Association Testimonial, the March of Dimes Franklin Award, the Salvation Army OTHERS Award and the B'nai B'rith International Humanitarian Award. He was also named Man of the Year by the George Otlowski Citizens League, the North Brunswick Italian American Club, and awarded the Hubert H. Humphrey Friend of Labor Award in recognition of his friendship and outstanding work. Joe and his wife, the former MaryAnn Longo, and their daughter, JoAnn now reside in South River, New Jersey. Their son, Charlie and his wife, Denise, returned to the Borough of Spotswood to begin their life together. Mr. Speaker, on this day I rise up to acknowledge a truly remarkable individual and I ask that my colleagues join me in honoring the distinguished Joseph C. Spicuzzo for his untiring dedication and devotion to serving his community.