Frank Pallone

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, in a few weeks this Congress will begin consideration of reform of the Food and Drug Administration, the FDA. Now the FDA now regulates 25 cents out of every dollar spent on a good or service in this economy, and its impact in our everyday lives runs very deep. It performs several important functions such as protecting public health and safety. Mr. Speaker, on June 29 of this year I added to the debate over the FDA reform, and I introduced a bill called the Food and Dietary Supplement Consumer Information Act of 1995, and this addresses how the FDA regulates food and dietary supplements. I am aware that the issue of dietary supplement regulation was considered in the last Congress and legislation was enacted, but that legislation fell short in a number of areas and also created an unlevel playing field for foods and dietary supplements. More importantly, a recent U.S. Supreme Court decision has raised the issue whether we ought to clarify the law with respect to claims, advertising and important health information to the public on this issue. One key issue that must be resolved, Mr. Speaker, is whether the American public has the right to receive and hear truthful, nonmisleading information concerning the potential and proven health benefits of food and dietary supplements. A recent U.S. Supreme Court decision, Rubin versus the Coors Brewing Company, has provided us with guidance on clarifying the law with respect to claims and health information. The issue of regulation of food and dietary supplements is among the most important to my constituents. We must all eat food daily to stay healthy, that is obvious. Over 100 million Americans are now supplementing their diets on a regular basis. There are three important issues raised by the American people and my [[Page H 10641]] constituents that Congress, I think, must act decisively upon when we talk about this issue: First, the right to receive and hear truthful, nonmisleading information. The American public has been demanding to have access to all the scientific information available about food and dietary supplements, and Americans have realized the power and influence of our health that nutrition plays on our well-being. I think the public policy has to respect these objectives. I want to emphasize the legislation I have introduced does not affect the current statutory and enforcement authority of the FDA to protect the public. The FDA will continue to have its present authority to prosecute and remove mislabeled and fraudulent products. Second, Mr. Speaker, the American public does not want food or dietary supplements turned into drugs. They want unhampered, affordable access to health-promoting food and supplements. One of the ways the FDA uses its power to interfere with our public access to these products is by declaring them to be drugs and forcing their removal from the market. I think there is an important distinction and clarification that should be made. We should enact my legislation to make it clear that food and dietary supplements cannot be drugs. In the context of health care, we have we created a system where, when one classifies something as a drug, a whole new set of regulations befails that product. This system is specifically designed for patentable products for which industry is given the ability to recover the hundreds of millions of dollars required to go through the patent approval process. Unfortunately, the system is poorly designed for foods and dietary supplements which are generally naturally occurring products and are nonpatentable. It also creates the unfortunate consequence on the public health that there is no low cost medicine. Obviously, the best low cost medicine is prevention. Nutrition foods, dietary supplements and an overall healthy lifestyle can be good preventive medicine. It is therefore important that foods and supplements be kept out of the drug category in order to protect their ability to be used economically and affordably in the maintenance and presentation of good health. Third and finally, Mr. Speaker, the American public has the right to make its own health choices. The American people want their health freedom. With a $1 trillion sickness-based health care system, people are looking for prevention and more treatment options. Let us give the people the information and access they want, and let us empower them to make responsibility for their own health. Enactment of this legislation preserves this principle without sacrificing the role of government to be the guardian of the public health. There are some other provisions in my bill which will save money and help to create uniformity among the 50 States. The legislation will ensure uniformity among the States by requiring the same labeling definitions and claims standards for food and dietary supplements. I think we will all agree on the necessity to make it economically efficient for manufacturers and consumers to have uniform standards for labeling definition and claims. The legislation also acts to resolve what is now no longer needed, in my opinion. That is, the Presidential Commission on Dietary Supplement Labels. The Commission is unnecessary and would be a waste of taxpayers' money. I do not believe, and many of my colleagues would agree with me, that we really need another commission to spend the next 2 years and the FDA another 2 years thereafter to figure out how to inform the public. As long as the communicated information is truthful and not misleading, as outlined by Supreme Court decisions, there should be no difficulty in arriving at a cohesive and sensible public policy on labeling. Mr. Speaker I would urge consideration of this bill. Mr. Speaker, in a few weeks, this Congress will begin consideration of reform of the Food and Drug Administration. This Agency now regulates 25 cents out of every dollar spent on a good or service in this economy and its impact in our everyday lives runs deep. It performs several important functions such as protecting public health and safety. Mr. Speaker, on June 29, 1995 I added to this debate and discussion by addressing how the Agency regulates foods and dietary supplements by introducing the Food and Dietary Supplement Consumer Information Act of 1995. I am aware that the issue of the dietary supplement regulation was considered in the last Congress and legislation was enacted. But that legislation fell short in a number of areas and also created an unlevel playing field for foods and dietary supplements. More importantly, a recent U.S. Supreme Court decision has raised the issue whether we ought to clarify the law with respect to claims, advertising, and important health information to the public. One key issue that must be resolved, Mr. Speaker, is whether the American public has the right to receive and hear, truthful, nonmisleading information concerning the potential and proven health benefits of foods and dietary supplements. A recent U.S. Supreme Court decision, Rubin versus Coors Brewing Co. has provided us with guidance on clarifying the law with respect to claims and health information. The issue of regulation of food and dietary supplements is among the most important to our constituents. We all must eat food daily to stay healthy. And over 100 million Americans are now supplementing their diets on a regular basis. There are three important issues raised by the American people that the Congress must act decisively upon: First, the right to receive and hear truthful, nonmisleading information. Mr. Speaker, the American public has been demanding to have access to all the scientific information available about foods and dietary supplements. Americans have recognized the power and influence on our health that nutrition plays in our well being. Public policy must reflect those objectives. When we passed the Nutrition Labeling and Education Act in 1990 [NLEA], we authorized the FDA to pre-clear all health claims, claims that a food or dietary ingredient could prevent a disease or health related condition. Congress wanted the FDA to allow such claims because of the overwhelming scientific evidence between disease and nutritional status. It also was allowed so that industry could better educate its consumers regarding the benefits of their products. The FDA was given the discretion to use a standard that they called ``significant scientific agreement'' to decide whether to approve a health claim. When the NLEA was passed, the FDA was asked to evaluate nine health claims for foods and supplements. It approved only two for supplements; first was that calcium prevents osteoporosis and second, after initially rejecting the claim, that folic acid prevents neural tube birth defects for women of child bearing age. It also approved claims that antioxidant and fiber rich foods like fruits and vegetables could help prevent heart disease and cancer. It refused to approve the same claims for supplements of those dietary ingredients. The case of the folic acid health claim is most illustrative of the problem with the FDA being the censor of truthful, nonmisleading information and the terrible price our country pays for being kept in the dark. When NLEA was passed, the FDA was asked to evaluate a health claim for folic acid preventing certain birth defects. In November of 1991, the FDA denied the health claim, stating that there was no ``significant scientific agreement'' to approve the claim. Subsequently in July of 1992, the U.S. Public Health Service published an advisory asking all women of child bearing age to get adequate folic acid in their diets by foods or supplements to prevent these tragic birth defects. Public and scientific outrage finally forced the FDA to reverse itself in the fall of 1993 and the claim was approved. But what was most outrageous Mr. Speaker, was that the FDA testified in a Senate Labor and Human Resource Committee hearing in October 1993 that it had been aware of scientific data that folic acid could prevent these birth defects for 10 years. They argued that in their opinion, there was no ``significant scientific agreement'' when the Nutrition Labeling and Education Act was first enacted in 1990 until the FDA reversed itself in the fall of 1993. In the interim, the American public was kept in the dark, and an estimated additional 2,000 children were born with birth defects that could have been prevented had the information been allowed to reach women in a responsible manner. For 10 years when the first scientific data started coming in, women were not allowed to be told on food and supplement labels that folic acid might prevent neural tube birth defects. In this period of time, these tragic and irreversible birth defects struck approximately 20,000 babies. If any of my colleagues have ever seen a child born with anencephalopathy or spina bifida, then they know the pain and suffering these children and their parents face. These are children who are disabled, disfigured, and have short life spans. The costs to take care of these children run in the millions. Yet the information [[Page H 10642]] was out there that an adequate amount of folic acid had the potential to avert these birth defects. The risk to women of child bearing age who could have received this information was zero. The benefit potential was thousands of birth defects prevented. Now the same thing is happening with a class of nutrients called antioxidants which scientific research is showing huge potential in reducing or eliminating known risk factors for cancer and cardiovascular disease. When I introduced this legislation, the June 21st edition of the Journal of the American Medical Association published a study on vitamin E which provides compelling evidence that it can reduce the risk of heart disease. This is another study that adds to the overwhelming number of scientific studies that antioxidants have important contributions to make in the fight against degenerative disease that are driving our health care costs into oblivion. And in May, scientists confirmed that a mineral antioxidant, selenium, has the ability to protect the human immune system and minimize damage from viral infections. These studies promise innovation and cost effective treatments for people with viral illnesses. But such information will never reach the consumer in time under current FDA policies. I want to emphasize that this legislation does not affect the current statutory and enforcement authority of the agency to protect the public. The FDA will continue to have its present authority to prosecute and remove mislabeled and fraudulent products. Our desire must be to avail ourselves of this information so that the public can safely and beneficially use these inexpensive nutrients to protect their health. The American people have a right to hear truthful and nonmisleading health information about the foods and supplements they consume. I think the philosophy and public policy objective concerning claims should be guided by the sage words of Justice Stevens who recently wrote in Rubin versus Coors Brewing Co. Any ``interest'' in restricting the flow of accurate information because of the perceived danger of that knowledge is anathema to the First Amendment; more speech and a better- informed citizenry are among the central goals of the Free Speech Clause. Accordingly the Constitution is most skeptical of supposed state interests that seek to keep people in the dark for what the government believes to be for their own good. Over 100 million Americans consume dietary supplements on a regular basis. Americans are getting better educated and familiar about the food they eat by reading improved labels for foods. The payoff we anticipate is that Americans will use the power of nutrition and a healthy lifestyle to prevent or delay chronic disease and achieve optimal health. Second, the American public does not want food or dietary supplements turned into drugs. They want unhampered and affordable access to health promoting foods and supplements. Mr. Speaker, one of the ways the FDA uses its power to interfere with public access to products is by declaring them to be drugs and forcing their removal from the market. I think this is an important distinction and clarification that has to be made. The Senate passed version of S. 784 in the 103d Congress made it clear that dietary supplements could not be classified as drugs. However, this provision was deleted in the House when the final bill was passed. We should enact my legislation to make it clear that foods and dietary supplements cannot be drugs. In the context of health care we have created a system where when one classifies something as a drug a whole new set of regulations befalls that product. This system is specifically designed for patentable products for which industry is given the ability to recover the hundreds of millions of dollars required to go through the approval process. Unfortunately this system is poorly designed for foods and dietary supplements which are generally naturally occurring products and are nonpatentable. It also creates the unfortunate consequence on the public health that there is no low cost medicine. The best low cost medicine is prevention, Mr. Speaker. Nutritious foods, dietary supplements, and an overall healthy lifestyle can be good preventive medicine. It is therefore important that foods and supplements be kept out of the drug category in order to protect their ability to be used economically and affordably in the maintenance and preservation of good health. Third, the American public has the right to make its own health choices. The American people want their health freedom. With a $1 trillion sickness based health care system, people are looking for prevention and more treatment options. Let's give the people the information and access they want and let us empower them to take responsibility for their own health. Enactment of this legislation preserves this principle without sacrificing the role of Government to eve the guardian of the public health. There are some other minor provisions in the bill which will save money and help to create uniformity among the 50 States. The legislation will ensure uniformity among the 50 States by requiring the same labeling, definitions, and claims standards for foods and dietary supplements. I think we all would agree on the necessity to make it economically efficient for manufacturers and consumers to have uniform standards for labeling, definitions, and claims. The legislation also acts to resolve what is now a no longer needed result of Public Law 103-417, the establishment of a Presidential Commission on Dietary Supplement Labels. This Commission is unnecessary and would be a waste of taxpayer money. I don't believe, and many of my colleagues would agree with me, that we really need another Commission to spend the next 2 years and the FDA another 2 years thereafter to figure out how to inform the public. As long as the communication and information is truthful and not misleading as outlined by Supreme Court decisions, there should be no difficulty in arriving at cohesive and sensible public policy on labeling. What the American people asked for in the food and vitamin labeling debate was clear, cohesive, rational, and sensible public policy with the responsible regulatory agency. In the 103d Congress, the U.S. Senate enacted legislation which would have accomplished this. However, the House amended the legislation to defer the most important issue on the information access question. The food and vitamin debate was not fully resolved and outstanding questions still remain. That was what was enacted into law. This debate will linger and smolder unless we act decisively to resolve this issue once and for all now. The U.S. Supreme Court has offered its wisdom to guide us to resolving some of these issues and I am confident that the 104th Congress will act decisively on the subject. I am aware that some in this Congress believe that we ought to wait and see how the FDA regulates foods and supplements. However, the truth is that millions of letters were sent to Congress asking for a definitive solution and reform of this agency's regulatory mission. The public did not get what it asked for. Rather than tolerate anymore delays and foot dragging by this agency in implementing the will of Congress, it is time that we act now. I believe this Congress can deliver comprehensive and all-inclusive FDA reform. Reform of the Food and Drug Administration is one area where Congress can really make a difference to improve the lives of our constituents.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I have been saying for some time on the floor that the Medicare bill which passed the House last week, the Republican-sponsored Medicare bill, would cost seniors a lot more. They would have to pay more in order to get less quality care. I was therefore amazed when I found out that when the bill came up, a rule that was adopted in this House in which the Republican leadership boasted about requiring a three-fifths vote majority to raise any taxes was waived when the Medicare bill came to the floor last week. That was a recognition of the fact that this bill had major tax increases, doubled premiums for part B for physicians' care, eliminated the guarantee that certain low-income seniors have their Medicaid part B paid for and also implemented a means test which required seniors to pay more. There is no question in my mind that what that Medicare bill did was charge a lot more to seniors in order to finance this tax cut that is coming up this week, a $245 billion tax cut that is going to be going mainly to wealthy Americans.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I want to thank the gentlewoman from Connecticut [Ms. DeLauro] for allowing me some time to talk about some of the same subjects, particularly with regard to children. Mr. Speaker, I wanted to start by pointing out that last week when the House passed the Medicare bill it passed the largest tax increase on senior citizens in the history of this Congress through Speaker Gingrich's Medicare plan, while reducing the quality of health care that seniors can expect to receive. Many of us, including the gentlewoman from Connecticut and myself, have continued to talk the last few weeks about how this Medicare plan forces seniors to pay more and essentially get less. But this week Congress will be voting on what we call the budget reconciliation, which will include once again this Medicare package. Mr. Speaker, I hope that New Jersey can count again on most of its Members, as they did last week on the Medicare bill, to stay firm and vote again to oppose this terrible Medicare legislation. The majority of New Jersey Members in the House of Representatives, both Democrat and Republican, ended up voting against the Medicare bill. In addition to incorporating Medicare into this budget package, there are other cuts like the Medicare cuts in Medicaid, which is the health insurance program for poorer people, as well as cuts in nutrition assistance and the school lunch programs. So in a sense what we are seeing is both senior citizens with Medicare and now also children, with Medicaid, nutrition, and school lunches are being cut. Their programs are being cut or raided in order to provide tax cuts for the wealthy, for the wealthiest Americans. Just to give you some statistics, according to the U.S. Treasury, Office of Tax Analysis, and this is with regard to the Senate version of budget reconciliation, income earners who make up to $30,000 per year can expect a $19 to $88 tax increase. In other words, not a tax cut but a tax increase if your income is up to $30,000 a year. Meanwhile the average American who earns over $200,000 a year will receive a $3,416 tax cut. I would ask you, is that fair, particularly when we see who is impacted? Again, mostly senior citizens and children. Now, while many of the Republicans are claiming to be balancing the budget for the future of our children and suggest that somehow this budget plan is actually going to benefit children, their plans actually hurt children. It is just the opposite of what they say. I am sympathetic to this, Mr. Speaker. Right now I have two young children, one is about 8 months old and another is a little over 2 years old. And when I look at them and I think about how difficult it would be for someone earning a lot less than myself to be able to provide for them, particularly with regard to health care, it really makes me wonder where we are going in this Congress with this terrible budget bill. I just wanted to quote from a recent New York Times article that was in the New York Times, Monday October 23. It says, and I quote, The specific spending cuts in the Republican plans would fall very heavily on poor and lower middle income children today, leaving them less able to hold jobs in the years ahead. I think what the New York Times is pointing out is that if we cut these programs for children, then in the long run we are not going to have adults who can really compete and do a good job as Americans in the marketplace. And ultimately we are essentially making it more difficult for these children when they become adults to contribute to society. So it really makes no sense. Mr. Speaker, I think it is totally inappropriate to balance the budget and provide tax cuts for the wealthy on the backs of children. I just wanted to give an example, if I could. To my left here are two kids who really could be my own, in fact in some way they remind me of my own. This is used basically to illustrate the terrible impact of the cuts in Medicaid, which is the health income program for low-income Americans, which provides health care coverage now for one in four American children. It is a statement basically from their mom whose name is Leslie. She is a 26-year-old mother of the two children, ages 6 and 2. And she says she is recently divorced and caring for her children as an at-home mother. Her income is substantially below the poverty line but with careful planning she manages to feed, clothe, and provide shelter for her children. And she says that her finances must be stretched out obviously to cover the budget, which is very strained. Without Medicaid, which again is the health insurance program for poorer children, even the best laid financial plans would surely collapse. The dilemma she would face without Medicaid in place would be basically to decide whether or not to feed her children or to provide shelter for her children. And she just goes on to point out how difficult it would be without Medicaid, again, the health care program for low-income Americans. Childrens hospitals, as we know, receive about 40 to 70 percent of their revenue from Medicaid. So it is not only a question of when you cut Medicaid you hurt low-income children. But you also hurt all children in a way because, for example, the hospitals where oftentimes we go in order to deal with the problems that affect children would be significantly cut back in terms of the type of services that they could provide. Medicaid, as I said, provides health care to about 36 million low-income Americans. But two-thirds of the funding is utilized by the blind, disabled, and the elderly for acute and long-term care. What we are trying to point out here is that a lot of people, disabled people, elderly people, as well as children, are impacted by these cuts in Medicare. And what I would like to ask, and I know the gentlewoman from Connecticut is here, it is incredible to me that we can cut $182 billion out of Medicaid when we spend more for defense in this budget bill. It actually is more money that goes for defense while we are making these cuts in Medicaid. [[Page H 10701]] Why are the Republicans cutting funding for school nutrition programs? School nutrition programs we know work. In my districts there are a lot of children that are able to take advantage of them. We are also cutting or reducing child abuse protections by nearly 20 percent in this bill. And to me it just boggles the mind. The Speaker, Speaker Gingrich, and the Republican leadership, I believe, are destroying the next generation and whacking seniors, who have already made this country great, through Medicaid, Medicare, nutrition program, and other program cuts. All of this just in order to pay for tax cuts for the rich. I think there are other ways to balance the budget. I voted in the past to support balanced budgets, but this budget plan is terrible. I really would urge my colleagues to vote against it. I want to thank the gentlewoman from Connecticut, once again, for organizing this, because I think it is very important to point out that just as these Republican plans last week in Medicare were hurting the elderly, now with this budget reconciliation, we are really hurting severely children.

Mr. PALLONE

Mr. PALLONE. Over the next 10 years, that is right.

Mr. PALLONE. I thank the gentleman. Mr. Speaker, when I left off, I was talking about the letter I had received from the three Republican State legislators at the Jersey shore indicating opposition to the Medicare bill that was passed today, and asking all of our colleagues in New Jersey to vote against it, and to vote for the substitute. I believe that those State legislators and others influenced, as I said, half, four of the eight Republican Members from New Jersey, to vote against the Gingrich Medicare bill today, because they realize it is not in the interests of the State of New Jersey. Mr. Speaker, I also wanted to enter into the Record a letter from the National Conference of State Legislatures, in which they express serious concerns about certain provisions in the House Medicare legislation. Mr. Speaker, I also wanted to point out that one of the reasons New Jersey Members opposed this Medicare bill, essentially on a bipartisan basis today, is because of concerns that were expressed in the State legislature in Trenton earlier this week about how much money the State would have to provide if we wanted to continue making sure that our senior citizens were to receive adequate health care. If I could just read some excerpts from an article which appeared in the Asbury Park Press, which is my hometown daily, wherein the Democratic leaders in the State legislature, on October 18, basically pointed out that the Republican plan to slash Medicare and Medicaid funding ``* * * would force New Jerseyans to pay far more for health care.'' In the attack they made on the GOP proposals, assemble minority leader, Joseph Dorian, and Senate minority leader, John Lynch, Mr. Lynch happens to be from my district, ``* * * insisted that the cuts could force State taxes to soar because of New Jersey's commitment to offer health care for all residents.'' What Senator Lynch is essentially saying here, we have two choices in New Jersey if this bill becomes law. We either provide the services for the seniors at the level of care they have been accustomed to, and we pay more in State taxes to do so, or we do not offer the health care. What Senator Lynch is saying, essentially, is that New Jersey, because of its tradition of wanting to provide quality health care to all its residents, is likely, and hopefully would opt to continue to provide the same level of care, but that is going to cost more in State taxes. If I could just quote from Mr. Doria, the assembly minority leader, he says, ``The cuts as presented are unreasonable and irrational.'' He urged the State's congressional delegation to vote against the gentleman from Georgia, Newt Gingrich, and the madness, to vote against the mean-spiritedness. He even said New Jersey should not become ``Newt's Jersey,'' as I quoted. Obviously, many of my Republican colleagues on the other side today felt strongly they did not want New Jersey to become Newt's Jersey, and thankfully, decided to vote against this very ill-advised piece of legislation. Mr. Speaker, I just wanted to, if I could, in some of the time that I have here, to go over some of the reasons in a little more detail about why the Medicare bill that was passed today, the Republican bill, is so damaging to senior citizens and to the Medicare System, and to the health care system in general, and why the Democratic substitute, which I supported, would have corrected many of those problems that the Republican Medicare bill presents for the future of seniors' health care. The biggest item, of course, and this is one of the things that my colleagues on the Democratic side have continued to stress, is that this leadership proposal, this Republican leadership proposal, essentially cuts $270 billion out of Medicare to pay for a $245 billion tax cut, mostly for the wealthy. I know my colleagues on the other side have said, ``We are not really doing a tax cut. This is not budget-driven.'' It is simply not true. We know that the trustees that the Republican leadership cite often, the Medicare trustees, basically said that there was only a need to save about $90 billion in the Medicare program over the next 10 years in order to keep the Medicare program solvent. The trustees have basically indicated that repeatedly. The substitute that the Democrats had would have saved $90 billion. The rest of the money, the rest of that $270 billion cut, is going for tax cuts, tax cuts mostly for the wealthy. Also, seniors are going to have to pay more under this bill. Essentially, they are going to be paying more to get less. The part B premiums will double without a penny of that increase going back into the part A Medicare hospital trust fund. There are essentially two parts to Medicare: There is the hospital trust fund, which the trustees have said does face problems over the next few years unless something is done, and then there is the part B program, which pays for physicians or doctors' bills, which is not really in any trouble at this point. Here we have the Speaker, the gentleman from Georgia [Mr. Gingrich] and the Republicans redoubling the premiums on part B, which is not facing insolvency. The only reason they are doing that is so they have money left in order to pay for a tax cut. The other thing that is extremely troubling about the bill is that seniors will ultimately be forced into HMO's and other managed-care systems, and that means in many cases they have to give up their own doctors. Again, my Republican colleagues have said, ``We are not telling the seniors they have to go into an HMO or a managed-care system,'' and that is true. The law does not say that they have to choose the HMO, but the reality is that the amount of money that is being cut here is disproportionately hitting the traditional fee-for-service system, where people go to any doctor that they choose and the doctor gets reimbursed. Therefore, this money that is being cut out of the system, this $270 billion, is being distributed in a way over the next 7 years, so that a significant amount of it goes to pay for HMO's and managed care, but less and less of it will go to pay for the traditional Medicare system, where you can choose your own doctor. Therefore, even though the Republicans are not saying that you have to join an HMO, what you will find happening is that less and less seniors will find that their own doctors will stay in the traditional fee-for-service system, because they will not get reimbursed enough for it to be worth their while to continue to operate that way, so fewer [[Page H 10474]] and fewer doctors will be available to seniors, and take Medicare, under the traditional fee-for-service system. The Republican plan also essentially destroys the high quality of care that we have in America's hospitals, because so much of the savings is in cuts to the reimbursement rate for hospitals, hospitals in inner cities, hospitals in suburbia, hospitals in rural areas. It depends to what extent those hospitals are dependent upon Medicare and Medicaid. In other words, if you have a hospital, as you do for most of the hospitals in my part of New Jersey, where the majority of the money that they receive comes from either Medicare or Medicaid, if they are heavily dependent on Medicare and Medicaid and they have to face severe cuts in their reimbursement rates, they are going to be squeezed so much that essentially many of them will close, we estimate about 25 percent, and the others are going to significantly cut back on services. That is how the quality of care will suffer. That is how what probably is, and I would say is, no doubt in my mind, the best health care system in the world, probably the best health care system that has ever existed on this planet, will all of a sudden see significant cutbacks in quality of care. Again, none of this would be necessary if the Speaker was not insisting on this tax break, primarily for wealthy Americans. I wanted to point out, if I could, that the Democratic substitute, which I supported today, which unfortunately did not pass, basically cured these problems, and addressed each of the concerns that I just brought up tonight about the Republican Medicare bill, and still managed to keep Medicare solvent and whole for the next 10 years. Basically, what the Democratic substitute says is that, ``We will cut $90 billion out of the Medicare Program and we will save $90 billion, instead of $270 billion,'' which is exactly the amount that the trustees say is needed to shore up the trust fund for the next 10 years, but a consequence of that is that much of the tax cut for the wealthy is eliminated. The Democratic substitute, which I supported, again, also eliminates the dramatic increases in part B premiums that double under the Republican plan. This is the thing, this is the part of Medicare that is going to hurt seniors on fixed incomes, because they are going to have to pay twice as much as they pay now. Under the Democratic substitute, the premiums for part B will actually increase less than the current law, and so there is an effort to really ease the problem for seniors on fixed incomes.

Mr. PALLONE. Sure, I yield to the gentleman.

Mr. PALLONE. Yes, I wanted to commend the gentleman because I think he has pointed out that this bill has created such a bureaucracy over and above what, you know, what we have already, and I am glad he is pointing it out.

Mr. PALLONE. Yes.

Mr. PALLONE. Mr. Speaker, I wanted to start out this evening by going over and trying to explain a little better some of the statements that were made by my colleagues on the Committee on Commerce with regard to low income seniors who, under current law, under the Medicaid program, are guaranteed that the Medicaid program or the Federal Government will pay the full amount of their part B premium. Part B is that part of Medicare which covers doctors' bills. And in the motion to recommit that we had today on the Medicare bill, the gentleman from Massachusetts [Mr. Markey] addressed the issue and pointed out that there will be no guarantee that widows and other seniors who are low income will receive coverage by the Federal Government of their part B premium in the future because of the repeal of that provision in Medicaid. The Speaker, Speaker Gingrich, later this evening spoke and basically criticized Mr. Markey because he suggested that that was not true, that somehow Medicare under the Republican proposal, under the Gingrich proposal, would continue to cover those recipients. Well, I do not know what the Speaker had in mind, but he clearly was misinformed. He clearly has not read the bill or had not followed what had been happening both in committee as well as in the Committee on Rules as well as on the floor of this House when the bill came up. The reality is that that guarantee for low income seniors, including the widows, was struck from the Medicaid bill in the Republican proposal that came out of the Committee on Commerce as well as out of the Ways and Means Committee. And I had actually proposed an amendment to bring that provision back, to guarantee that those low income seniors would have their part B premium paid. I brought up the amendment not out of the sky but because when I went back to my district in central New Jersey, I had many senior citizens who were what we called qualified Medicaid beneficiaries who received this benefit who came to meetings and forums that I had and were seriously concerned about the fact that this was being repealed. And so I went back to the Commerce Committee and offered that amendment, which was defeated on a partisan line, vote with the Republicans all voting against it. When the Medicare bill came up in the Commerce Committee, my colleague, the gentleman from Illinois [Mr. Rush], offered a similar amendment on Medicare on the theory that if it is no longer going to be covered under Medicaid, let us try to cover these poor seniors, these widows, these elderly under Medicare. And again, on a partisan line vote, that amendment was defeated, defeated by the Republicans, by the majority. Yesterday I went before the Committee on Rules on the Medicare bill. I asked the Committee on Rules to consider an amendment on the floor today that would have guaranteed that those seniors would be covered. I had a dialog with the gentleman from Georgia [Mr. Linder] and perhaps other members of the Committee on Rules where I explained what this was all about. And again, that request was denied. So that in fact when the Medicare bill came up today for consideration, contrary to what the Speaker said, it does not guarantee that those widows and the people, those low income elderly, it does not have to just be widows, it is anyone who is 100 percent of the poverty line whether they are male or female, whatever their marital status, it does not guarantee, the bill that was passed today by the majority, that those poor and elderly people are covered for the part B premium. What does this mean for these senior citizens? Well, essentially it means that they are going to go without physicians coverage. Part B pays for their doctor bills. Now the other side said in committee, ``Well, you shouldn't worry about that, Congressman Pallone, because we have included in the block grant that we are going to now give to the States, even though there is no entitlement, no guarantee that these senior citizens get their part B paid, we are going to send in a block grant to the State under Medicaid, and, as the States want to do that, they can cover them.'' Well, that is very nice, but the reality, as the gentleman from California [Mr. Waxman] said before, is the amount of money that is going to be available pursuant to that block grant is about 85 percent of what is going to be needed. In addition, there is no guarantee or requirement that the State pay that part B premium, so they are going to get 85 percent of what they need, but, if they decide not to spend it, not to even cover those widows and elderly, they do not have to. They can decide to cover 10 percent of them, 50 percent of them, or none of them, and the disincentive for not having the money to do it is certainly going to be there, so it is likelihood that they will not be covered. Another reason why they are not likely to be covered is because that figure about how much is being block-granted to the States is based on the current premium, and, as we know and as the gentleman from Massachusetts [Mr. Markey] pointed out, the premium under the Medicare under the Republican bill that was passed today doubles over the next 7 years, so instead of being 40-something dollars a month, it is going to be $90 a month by the year 2002. So what likelihood is there that those widows and those poor senior citizens are going to have the States covering them for their part B premium when the premium doubles, when the amount they are getting is based on current levels, and when they are getting only 85 percent of essentially what is necessary? I would maintain that the likelihood is almost nil. This, what the Speaker said today, there is no question that he was misunderstood, but I have very little doubt that he intends to do anything to make sure that those people are covered. We are going to do something about it though. We are going to go to the Committee on Rules next week on the Medicaid bill on the reconciliation bill, which the gentleman from Texas [Mr. Armey] said is going to come up next Thursday on the floor, and when the Committee on Rules considers amendments next Tuesday or Wednesday, Mr. Speaker, myself and the others are going to be before it and ask that this amendment be considered to basically make it so that the Speaker has to announce whether he is going to include this provision or not for the widows and for the poor elderly. I doubt that we will see it, but we are certainly going to try. I just wanted to point out again today when I went to the Committee on Rules yesterday many of us, many Members of this body, not only Democrats, but also some Republicans because I was there for a good deal of time, asked that amendments be considered today because they did not like the provisions of the Medicare bill that we considered, and I am sure it was noticed that the reality was that no amendments were considered. The only thing that was allowed was a substitute amendment, one substitute. We also asked for at least a week's debate because, as you know, there have been no hearings on this bill in any committee. The Committee on Ways and Means had one day of hearings on the draft of the bill on a press release, but there were never any hearings on the actual bill that we voted on today, so we asked there be at least a week's worth of debate. What we were given today was 1 hour on the rule, which was a very closed rule, 3 hours' general debate on the bill, and one substitute amendment in which we were allowed 1 hour of debate. I would maintain that the biggest problem, or one of the biggest problems, that exists in this whole Medicare debate and with the whole Republican proposal is that most of my colleagues really do not even know what is in the bill because [[Page H 10472]] there has not been the opportunity to have hearings or to have adequate debate. Now, before I go into my concerns about how this bill is going to essentially eliminate and destroy the Medicare system, I wanted to introduce a few things into the Record, Mr. Speaker, that I did not have the opportunity to do in the Committee of the Whole today the way the rules are. You cannot do that in the Committee of the Whole. The first is a letter that was sent to me by three Republican State legislators in New Jersey from the Jersey shore who previously had sent a letter to all the New Jersey Members of this House indicating their opposition to the Republican leadership Medicare bill that we voted on today and who today, or earlier this week, sent another letter to all of my colleagues in the New Jersey delegation asking them to vote against the Republican Gingrich bill and also to vote for the Democratic substitute instead, and I just wanted to read part of this, or even all of it, because it is not that long, if I could, Mr. Speaker, because I think it says a lot about the debate and backs up what I have been saying today, but in this case this is coming from Republicans, Republican State legislators in New Jersey, and they write to the House Members, and they say: State of New Jersey, October 13, 1995. Re: Medicare. Dear House Members: It is our understanding the House Ways and Means Committee has voted 22-14 to send the Medicare reform package to the House floor next week. Our 9th District Delegation, which represents the largest Senior Citizen population in New Jersey in Ocean, Burlington and Atlantic counties, issued a letter on September 22, 1995 to House Speaker Newt Gingrich and Senate Majority Leader Bob Dole, urging them to scrap this plan. Copies of our correspondence to Speaker Gingrich and Senator Dole were conveyed to New Jersey's Congressional Delegation. For your convenience, a second copy of this appeal is enclosed. Please allow our Delegation this opportunity to reiterate our profound concerns about these cuts in Medicare services for our elderly. As you are aware, alternative proposals have been offered that would maintain the solvency of the Part A and Part B trust funds until 2006. This $90 billion compromise package would provide a decade for Congress and the White House to achieve a well-planned and balanced proposal to resolve Medicare's financial problems. This compromise would also provide the opportunity for a bipartisan consensus. Our Delegation is genuinely sensitive to the difficult decision you face and have had our own feet roasted by the hot coals of Leadership. We feel very strongly that a rush to judgment on this issue is bad public policy. America must never turn its back on our parents and grandparents. We, respectfully, urge New Jersey's House Members to oppose this $270 billion Medicare cut. Your leadership, in targeting Medicare fraud, the staggering costs of health care and in building a bridge to the future with the alternative proposals set forth by Reps Sam Gibbons and Ben Cardin, will provide the chance for Congress to seek a consensus solution to preserve Medicare for our parents and grandparents. Thank you for your thoughtful attention to this appeal on behalf of the Senior Citizens of Ocean, Burlington and Atlantic counties. Sincerely, Leonard T. Connors,Jr. Senator--9th District. Jeffrey W. Moran Assemblyman--9th District. Christopher J. Connors Assemblyman--9th District. Now I point this out, Mr. Speaker, because that is the way I voted today. I voted against this terrible Medicare bill, and I voted for the Democratic substitute sponsored by the gentleman from Florida [Mr. Gibbons] and also the gentleman from Michigan [Mr. Dingell], and it just pleases me to see not only that there are three State legislators at the Jersey shore that agree with that position and clearly understand why my position is accurate, but also that I believe that they and others like them in New Jersey influenced four of my colleagues on the Republican side, half of our New Jersey Republican delegation in Congress, to cast votes against the Gingrich Medicare plan today, and I think that we have worked very hard and essentially the vote today against the Medicare plan, against the Gingrich plan, as far as New Jersey goes, was really on a bipartisan basis. Mr. Speaker, I am very proud of that fact. I hope that in the future we will see more Republican Congressmen coming out against this proposal and also more State legislators coming out against the proposal. I want to yield, if I could, some time to the gentleman from Texas [Mr. Doggett].

Mr. PALLONE. Absolutely not. The way the current law provides, I would estimate that the monthly part B premium by 2002 over 7 years would go up to about $60 a month. It is now about $46, I think. Under the Gingrich plan, it goes to over $90 a month. Under the substitute, it would be less than the $60 under current law, so we would actually be providing for less of an increase in the premium than current law.

Mr. PALLONE. It is very simple. As the gentleman from Texas [Mr. Doggett] has pointed out, and previously, they are using that extra money for a tax cut. It is primarily going to the wealthy Americans.

Mr. PALLONE. Exactly, and not only that, I would point out that the substitute also does not decrease the quality of health care from the point of view of the hospitals, which I talked about before, because even though that $90 billion is coming from the reimbursement rate to hospitals, the reduction in the reimbursement rate is less than half of what the Republican Gingrich bill proposed today. The hospital association and the various hospitals that I have talked to in my area have indicated that they could absorb that level of cut, unlike the level of cut in the Republican proposal.

Mr. PALLONE. I want to thank the gentleman. I think the gentleman also brings up an important point, which is that I think a lot of people think that today was the end of this process. In fact, today is the beginning of the process, because the Medicare bill, the Republican bill, still has to be addressed in the Senate. It will still go to conference. The President has already said that he intends to veto the bill. It will come back to the House, back to the Senate, and we will probably be here for several weeks, if not several months, continuing to debate this issue, and hopefully there will be an opportunity to persuade more Members from the other side of the aisle to either not support this, or change it, consistent with the Democratic substitute. The other thing I wanted to point out about the substitute is that this whole shifting, if you will, of seniors into HMO's or into managed care where they do not have a choice of doctors is basically eliminated. There is no forced choice, because the system under the Democratic substitute is not changed in that there is no discrepancy in the reimbursement rate and the amount of money that is going to go, whether you are in an HMO or you are in the traditional fee-for-service system. So doctors will still be available under the traditional fee- for-service system and will continue to accept Medicare. The other thing that I think is so important about the substitute, which has not really been debated a lot because so much of this debate on the Republican side has been subject-driven, is that the substitute seeks to include more of what I call preventive measures in Medicare. [[Page H 10475]] I was hopeful, maybe I was naive, that when I took up Medicare reform this year that, rather than focus on the budget aspects and have a whole debate be driven by budget dynamics, that we would try to look to include in Medicare preventive measures which ultimately save money, because they prevent senior citizens from having to be hospitalized or institutionalized. Now, just to give you an example, the Democratic substitute today makes a good start in that direction, because it includes programs like prostate screening. The whole idea is, let us do some things, whether it is prostate screening or it is other kinds of tests, so that we can detect problems that seniors might have at an early date so that they can have treatment on an outpatient basis, so that they can stay home and not have to be institutionalized. So much of the cost, not only to the Medicare system but also to the Medicaid system, which we will be dealing with next week comes from having to institutionalize senior citizens in hospitals, nursing homes. Something like 70 percent of the money that the Federal Government spends on Medicaid in the State of New Jersey goes to pay for nursing home care. If we could include preventive measures like this Democratic substitute that unfortunately was defeated today in our Medicare program, we could save a lot of money and come up with a better system without having to make the drastic changes and negative changes that the Republicans have proposed. Mr. Speaker, I just wanted to bring up a couple of other points on the Republican bill today in the time that I have left, because oftentimes, obviously, since debate was limited to only 3 hours today and only half of that was on the Democratic side, there were several points that were made by Republican Members that I just thought were inaccurate or at least did not give a true picture of some of the things that are in this bill that the Republicans passed today. One of the things that I thought needs to be addressed is this whole issue of fraud and abuse. In my committee, the Committee on Commerce, there was at least one day or perhaps several days of hearings not on this bill but just on the problem in general of fraud and abuse; and I know that I attended at least one of those hearings where a lot of attention was paid to the fact that tremendous amounts of money could be saved in the Medicare program and we would not have to cut other aspects of the program if we could weed out the fraud and abuse. But, lo and behold, when the bill came up in the Committee on Commerce, we found that there were some provisions in the bill that, if anything, made it more difficult for the Federal Government, the prosecutors, the investigators, to go after fraud and abuse in the Medicare system. Specifically, we had testimony at an alternative hearing. Since we were not allowed to have a hearing before the Committee on Commerce, some of the Democrats got together and had their own hearing; and we had testimony from the inspector general, June Gibbs Brown of the Department of Health and Human Services, and she pointed out some major flaws in the bill in terms of the effort to weed out fraud and abuse. Mr. Speaker, I just wanted to quote some of the things that she said that I thought were most important. She said that we believe that H.R. 2425 contains several provisions which would seriously erode our ability to address Medicare and Medicaid fraud and abuse. Most notably, these troublesome proposals include the following: One, the bill would make the existing civil monetary penalty and antikickback laws considerably more lenient. Two, the bill would substantially increase the Government's burden of proof in cases under the Medicare-Medicaid antikickback statutes. For the vast majority of present-day kickback schemes the proposed legislation would place an insurmountable burden of proof on the Government. Next, the bill would create new exemptions to the Medicare-Medicaid antikickback statute which would be readily exploited by those who wish to pay rewards or incentives to physicians for the referral of patients. Finally, a fund was created directing moneys recovered from wrongdoers under the bill, but instead of the funding of that money going to fund law enforcement, the moneys could go to private contractors. No funds would be made available to enhance existing government law enforcement activities. I know that on the other side today they tried to, and did, in fact, include some provisions to try to improve on the fraud and abuse, but not every one of these concerns that was addressed by the inspector general was addressed, and so the bill, in my opinion, continues to provide loopholes and make it more difficult for us to enforce fraud and abuse. I think that is totally unconscionable in the context of the fact that we are trying to squeeze so much money out of this Medicare Program in order to achieve a tax cut. Mr. Speaker, the other thing that I wanted to point out is a lot of attention was paid by Republicans today to the medical savings accounts. It was termed by my colleagues on the other side that this was a new and innovative program that was going to sort of be the wave of the future. I forget all of the adjectives that were used to say how wonderful the Medicare savings accounts were going to be. I would point out that there is no question in my mind, first of all, that these medical savings accounts are not going to be available to a lot of senior citizens, but also, that it essentially is going to cost more for the program. In other words, the Medicare savings accounts will not save the Medicare Program money, they are going to cost the program more money. The CBO, the Congressional Budget Office, estimates show that medical savings accounts would essentially rob the program of $2.3 billion over 7 years. In other words, it would cost that much more to the Medicare Program to have these Medicare savings accounts in effect. It says that under the MSA's, as they are called, under the medical savings accounts, the Medicare Plus voucher could be used to buy a catastrophic health insurance policy with a deductible as high as $10,000. Any difference between the cost of that policy and the voucher amount will be placed in a tax-deferred medical savings account. But only the wealthiest and healthiest seniors could afford to gamble with such a high-deductible policy. When these individuals buy MSAs, the average costs of those remaining in Medicare would increase. So what essentially we are saying here is that the people that are going to take advantage of these medical savings accounts are the healthiest and wealthiest seniors, the ones that essentially we are not paying a lot of costs for under the current Medicare law in order to cover. If they are taken out of the system and the system has to pay out money into these medical savings accounts, what is going to happen is that the cost to Medicare is going to be more and not less, because the healthiest people that cost Medicare the least amount of money are the ones that are going to opt for it. Mr. Speaker, the CBO says that. I mean it is not something that I am making up; it is something that is clearly indicated by the Congressional Budget Office. The last thing I wanted to say, Mr. Speaker, because I think my time is almost up, is that there were many suggestions, most notably by Speaker Gingrich this evening when he gave his speech on the floor, that this whole idea that Democrats were saying, and that I say, that this $270 billion in cuts to the Medicare Program is going to be used for a tax break for the wealthy, the Speaker said that that is simply not true. He said that we are not going to do that, that is not our intention, and so forth and so on. Well, my contention, Mr. Speaker, is that if that were not true, if this whole debate was not budget-driven for the purpose of creating these tax cuts, then there was absolutely no reason for this Medicare reform, as it is termed, to be linked with the budget reconciliation, which it will be next week. Next week we are going to take up the budget reconciliation and we are told that the Medicare is going to be clearly linked to that. Although it was voted on separately today, that is essentially a ruse, because it will be included in the budget reconciliation. If the Speaker and the Republican leadership were going to be honest with us and say that they are not going to [[Page H 10476]] use this for a tax cut, then they would have supported some of the amendments that we made in the Committee on Commerce and also tried to get included in the Committee on Rules that would have not allowed the savings to be scored for budgetary purposes. We had such an amendment in the Committee on Commerce, and again, it was defeated along partisan lines with the Republicans voting against it, because they do, indeed, intend to score these Medicare savings of $270 billion to pay for the $245 billion in tax cuts. Those tax cuts, again, will go mostly to wealthy Americans and other corporations. Mr. Speaker, I think it is a very tragic day for America's seniors that this Medicare bill was passed, and that the Democrat substitute was defeated, but hopefully, there will be more debate, if not here, then certainly in America as a whole over the next few weeks and the next few months to bring to light how terrible and devastating this bill, this Republican bill is, and that we will eventually see changes so that it does ultimately make it possible to continue to have a quality health care program for the poor senior citizens in this country. National Conference of State Legislatures, National Association of Insurance Commissioners, October 18, 1995. Hon. Newt Gingrich, Speaker of the House, The Capitol, Washington, DC. Dear Mr. Speaker: On behalf of the National Conference of State Legislatures (NCSL), and the Special Committee on Health Care Reform of the National Association of Insurance Commissioners (NAIC), we are writing to express serious concerns about provisions in the House Medicare reform legislation currently under consideration. In particular, we urge you to reconsider provisions in the bill that exempt provider-based organizations (sometimes called provider- sponsored organizations (PSOs) or provider-sponsored networks (PSNs)) from the requirements of state regulation. The proposal presents significant problems for the states and the current privately-based health insurance market in two fundamental respects. First, consumers could be harmed greatly by the loss of state-level protections resulting from the bill. Secondly, the proposal could eviscerate state regulation of health insurance overall. By preempting state laws that otherwise apply to PSOs, in one fell swoop, the proposed legislation completely blocks the application of state insurance laws to these entities. These laws currently include financial and market conduct requirements, as well as other consumer protections, for many types of health plans which are similar to, if not identical in form and operation to, PSOs. Thus, state requirements-- which have worked effectively for a substantial period of time--would be entirely eradicated for a growing and substantial segment of the health insurance market. In order for the federal government to begin to provide the consumer protections deserved by all health care recipients, it must create a bigger and better Health Care Financing Administration to oversee these new organizations. This would result in bifurcated and potentially duplicative state and federal regulatory system. Further, consumers currently benefit from the necessary protections within current state law. It is highly unlikely that the proposed federal regulatory structure would come close to providing elderly consumers with the ability to lodge complaints currently available for enrollees in state licensed plans. Most significant of all, it is unlikely that a new federal bureaucracy could deal effectively with solvency problems, thus leaving the financial stability of the entire system at risk. Contrary to the assertions of some, the requirements in state law are not a stumbling block to market innovation. Many provider-sponsored entities already operate and compete under the existing state regulatory structure. We question the viability and quality of those entities which could not withstand the test of state regulation. Second, it is perplexing that the 104th Congress, which is to be commended for championing the states in so many respects, would intrude in this instance on states' rights-- particularly in an area where the states clearly have superior expertise and experience: insurance regulation. The proposed legislation exempts association plans, as well as PSOs, from state regulation. Presently, both types of entities are largely subject to state law. You must recognize the threat to the state insurance regulatory mechanism that this provision in the reform legislation presents. The proposed uneven regulatory playing field where PSOs are subject to different, and possibly less stringent, requirements is a discriminatory system. Once created, it will not be easily stopped. Every other type of organization in the health care delivery system will want the same treatment. Importantly, under the terms and definitions of the bill, this will be easy. All entities will reconfigure themselves or form subsidiaries to become PSOs. We urge you to avoid this prospect that could lead to the effective federalization of health insurance regulation. In summary, we strongly object to any provisions in Medicare reform legislation which exempt PSOs from state regulatory authority. All Medicare beneficiaries deserve the same protections afforded other citizens of the states. The erosion of traditional state authority contained in the proposal is simply not justified and could worsen, rather than improve, the health care system. Thank you for your consideration. Please contact us if you have any questions. Sincerely, Bill Pound, Executive Director, NCSL. Lee Douglas, President, NAIC and Chair, Special Committee on Health Care Reform, Commissioner of Insurance, State of Arkansas.

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

Mr. PALLONE. Absolutely, there is no question that not only Secretary Rubin, Secretary of Treasury, but also several other trustees, I think there were four that put out a letter saying that $90 billion was necessary to shore up the trust fund.

Mr. PALLONE

Mr. PALLONE. I appreciate the gentleman yielding. Mr. Speaker, there was obviously confusion in the Speaker's mind, but there really should be no confusion about this issue. Because, as the gentleman knows, I offered this amendment in our Committee on Commerce to make sure that in Medicaid these qualified Medicare beneficiaries were going to have their part B premiums covered. The gentleman from Illinois [Mr. Rush] offered the same amendment on the Medicare bill in the Committee on Commerce, the bad bill that we considered today; and I went before the Committee on Rules yesterday and asked that the amendment be considered as part of the bill today, had a dialogue with the members of the Committee on Rules, including the gentleman from Georgia [Mr. Linder] who was there, and explained that we wanted to make sure that there was a guarantee in the Medicare bill for these widows and these low-income senior citizens for which the Federal Government now pays their part B premium. It is true, it may very well be that the Speaker misunderstood, but there is no excuse for it. Because in fact on three different occasions we have asked for this to be considered, on two occasions in this bill. The Committee on Rules denied the opportunity to have that amendment considered. The bill that we had today did not have the guarantee that those Part B premiums for those low-income seniors would be paid. I think what the gentleman from Massachusetts [Mr. Markey] said is absolutely correct. We should go back to the Committee on Rules next week, ask that it be considered again in concert with the Medicaid bill. But I am really outraged over the fact that the suggestion was made today that somehow this guarantee was in the bill. It is not in the bill; it is not in the Medicaid bill; and we, all of us collectively, have tried very hard to make sure the guarantee was there and it is not there.

Mr. PALLONE

Mr. PALLONE. Mr. Chairman, I want to urge my colleagues to get behind this very rational Democratic substitute that cures the problems that will be created by the Republican Medicare plan. We will be saving Medicare with this $90 billion that the trustees say that is all that is necessary. We do not need the tax cut for the wealthy. We will be eliminating the dramatic increases in the Part B premium, and there will be no forced choices for seniors under this. They do not have to go into HMOs, they can still choose their own doctors. Even more important, it does not hurt the quality of health care. Hospitals will not have to close or cut back considerably. Payments to hospitals are reduced by less than one-half the amount in the Republican bill. Lastly, and just as important, this substitute deals with prevention. If we can have more preventive care, which is provided in this substitute, we can save a lot of money and seniors will not have to be hospitalized, they will not have to be institutionalized. Mr. Chairman, I urge support for the Democratic substitute.

Mr. PALLONE

Mr. PALLONE. Mr. Chairman, I thank the gentleman for yielding time to me. Mr. Chairman, I just wanted to point out that under the Gingrich Medicare plan, the hospitals in and around the district of the gentleman from California, [Mr. Bilbray] will lose $345 million over the next 7 years in order to pay for a tax cut for the rich.

Mr. PALLONE. Mr. Chairman, I wanted to point out that under the Gingrich Medicare plan, the hospitals in and around the district of the gentleman from Ohio [Mr. Oxley] will lose $144 million over the next 7 years.

Mr. PALLONE

Mr. PALLONE. Mr. Chairman, I want to make a plea to my colleagues on the [[Page H 10333]] other side of the aisle to oppose this ill-conceived Medicare plan. The Republican leadership proposal, as we know, will cut $270 billion out of Medicare to pay for $245 billion in tax cuts mostly for the wealthy. It is not necessary to make these cuts in order to keep Medicare solvent. The Medicare trustees have told us that Speaker Gingrich's cuts had three times any estimate of what is needed to make Medicare solvent. Mr. Chairman, seniors are going to be forced to pay more to get less under the Gingrich proposal. Part B premiums will double without a penny of that increase going back into the part A Medicare hospital trust fund. Seniors will ultimately be forced into HMO's and have to give up their own doctors because the Republican proposal puts money into HMO's at the expense of the traditional Medicare system. My colleagues, the Republican plan will destroy America's high quality health care system because hospitals and other health care providers will be so squeezed for Medicare dollars that they will be forced to close or significantly cut back on their services. None of this would be necessary if Speaker Gingrich were not insisting on a big tax break for the wealthy. I know that at least half of my Republican colleagues from the State of New Jersey have already indicated that they are voting no on this terrible bill. I would ask all of my colleagues on the other side to heed the words of three Republican State legislators from the Jersey Shore who wrote to my New Jersey colleagues in the House this week and urged support for the Gibbons-Dingell substitute. They said, and I quote: Alternative proposals have been offered that would maintain the solvency of the part A and part B trust funds until the year 2006. This $90 billion compromise package would provide a decade for Congress and the White House to achieve a well- planned and balanced proposal to resolve Medicare's financial problems. We feel very strongly that a rush to judgment on this issue is bad public policy. America should not turn its back on our parents and grandparents. Mr. Chairman, I include for the Record this letter from my fellow Republican State legislators in New Jersey urging opposition to this. State of New Jersey, 9th District Legislative Offices, Forked River, NJ, October 13, 1995. Re Medicare. To: Hon. Christopher H. Smith, Hon. Robert E. Andrews, Hon. Marge Roukema, Hon. Robert D. Franks, Hon. Robert G. Torricelli, Hon. Rodney P. Frelinghuysen, Hon. Robert Menendez, Hon. H. James Saxton, Hon. Frank A. LoBiondo, Hon. Frank Pallone, Jr., Hon. William J. Martini, Hon. Donald M. Payne, and Hon. Richard A. Zimmer. Dear House Members: It is our understanding the House Ways and Means Committee has voted 22-14 to send the Medicare reform package to the House floor next week. Our 9th District Delegation, which represents the largest Senior Citizen population in New Jersey in Ocean, Burlington and Atlantic counties, issued a letter on September 22, 1995 to House Speaker Newt Gingrich and Senate Majority Leader Bob Dole, urging them to scrap this plan. Copies of our correspondence to Speaker Gingrich and Senator Dole were conveyed to New Jersey's Congressional Delegation. For your convenience, a second copy of this appeal is enclosed. Please allow our Delegation this opportunity to reiterate our profound concerns about these cuts in Medicare services for our elderly. As you are aware, alternative proposals have been offered that would maintain the solvency of the Part A and Part B trust funds until 2006. This $90 billion compromise package would provide a decade for Congress and the While House to achieve a well-planned and balanced proposal to resolve Medicare's financial problems. This compromise would also provide the opportunity for a bipartisan consensus. Our Delegation is genuinely sensitive to the difficult decision you face and have had our own feet roasted by the hot coals of Leadership. We feel very strongly that a rush to judgment on this issue is bad public policy. America must never turn its back on our parents and grandparents. We, respectfully, urge New Jersey's House Members to oppose this $270 billion Medicare cut. Your leadership, in targeting Medicare fraud, the staggering costs of health care and in building a bridge to the future with the alternative proposals set forth by Reps Sam Gibbons that will provide the chance for Congress to seek a consensus solution to preserve Medicare for our parents and grandparents. Thank you for your thoughtful attention to this appeal on behalf of the Senior Citizens of Ocean, Burlington and Atlantic counties. Sincerely, Leonard T. Connors, Jr., Senator--9th District. Jeffrey W. Moran, Assemblyman--9th District. Christopher J. Connors, Assemblyman--9th District.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, let me point out that one of the major trustees, Secretary of Treasury Rubin, when he sent a letter to the gentleman from Missouri [Mr. Gephardt] on September 21, 1995, he said in the letter, simply said, ``No Member of Congress should vote for the $270 billion of Medicare cuts believing that reductions of this size have been recommended by the Medicare trustees or that such reductions are needed now to prevent an imminent funding crisis. Basically what is happening here, and I will say it again, is that this level of cuts, $270 billion, is needed to pay for the $245 billion tax cut for the wealthy that the Republicans are going to propose next week. Our offices and my office has been flooded with calls and letters from senior citizens protesting these cuts. I know one of the previous speakers said that seniors should not be scared. They should be scared because this is going to devastate the Medicare Program, and if I could just point out, I mean I have been getting hundreds, if not thousands, of letters. Here are just some of them from my constituents complaining and concerned about these Medicare cuts the Republicans are proposing. Mr. Speaker, I do not have a lot of time, but I just want to point out one thing that I think is really important here tonight and for tomorrow when we take the vote on this bill. These cuts in the Medicare Program, what they are going to do is squeeze Medicare so much that we will no longer be able to provide quality health care in this country for senior citizens, and the squeeze, the loss of money in the Medicare Program, is going to hurt the health care system across the board in New Jersey. We will see hospitals close. We will see services cut from hospitals and other providers because there is going to be so little money available to the Medicare system. The reason I mention that is because today in the State legislature in the State of New Jersey in Trenton a number of the Democratic legislators took to the floor and pointed out that because of all the cuts that the Republicans are making in Medicare what is going to happen in New Jersey and probably in a lot of other States in this country is that States are going to have to raise taxes to make up for the loss in Medicare funds that we are imposing here, and that is simply not fair. It is simply not fair to the citizens of New Jersey and to a lot of other people around this country when we see this Medicare Program deteriorate and States having to make up for the funding loss.

Mr. PALLONE. Mr. Speaker, I yield to the gentleman from Florida [Mr. Deutsch].

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise today to honor a special man who lives in my district in Highland Park, New Jersey: Mr. Hugo Princz. Hugo is one of a few American survivors of the Holocaust in Nazi Germany. His family was American, living in Slovakia in 1942 when all were arrested by the Nazis. The SS refused to release the Princz family, which should have been done as part of the Red Cross civilian prisoner exchange, instead the family was interned because it was Jewish. Hugo's mother, father, and sister were sent to Treblinka death camp and gassed on arrival. He and his brothers were sent to Auschwitz, and worked as slave laborers. Mr. Princz's job was to stack dead bodies for incineration. While in Auschwitz, Hugo's two brothers were killed. By the war's end, Hugo was in Dachau and selected for extermination. He was fortunately saved by the U.S. Army when our soldiers boarded a train carrying Hugo and other prisoners and saw U.S.A. embroidered on his jersey. After the war, Mr. Princz began what would turn out to be a 50-year struggle with the German Government for reparations--a fight in honor of his family and all of the people who were tortured by the Nazis. In 1955, Germany rejected Mr. Princz's application for its reparations program because his U.S. citizenship made him ineligible under German law. Hugo's struggle continued without success for decades. German legislators refused to accept responsibility for the actions of the Nazis and recognize Mr. Princz and his struggle for survival. Hugo looked to Congress to assist him in his struggle. What he brought to me and the many Members of Congress who supported him was a just and righteous cause. Hugo's lawyers, William Marks from the firm of Powell, Goldstein, Frazer & Murphy, and Steven Perles should be commended for their work on Hugo's behalf. They worked feverishly with Members of Congress, for little reward, to assist Hugo in his efforts. Finally, on September 19, 1995, the roller coaster ride of Hugo's struggle came to a successful conclusion. The German Government recognized his struggle and provided him with the reparations he was owed. Mr. Speaker, Hugo Princz is an inspiration to everyone who knows him or has heard him tell his story. He managed to overcome the worst nightmare humanity has ever created. Yet his strength and determination in the face of such strong adversity will remain in the hearts and minds of all who know him, and that will be his legacy.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I would also like to use my time to talk about Medicare. As we know, the Republican leadership plans to bring up their cuts in Medicare and their program that in my opinion will destroy the Medicare system in the bill this Thursday, without really any significant debate that has occurred so far. I think there are many aspects of this Republican Medicare plan that disturb me greatly, but the one thing I think that has not been stressed enough is how this is going to have such a negative impact on the quality of health care in the United States. There was an article last Friday in the New York Times, an op-ed by Mr. Melvin Connor out of Atlanta. He says essentially what these changes in Medicare as well as Medicaid are going to do is to create a third-world atmosphere, essentially, for health care in the United States. He calls it ``Medicare and the Third Worldization of America.'' The reason he says this essentially is because when you take so much money out of the health care system, out of Medicare and out of Medicaid--and we are talking about $450 billion--the inevitable result is that the system is squeezed so much that the quality of health care suffers. Few people I think realize this. Many of us realize that our country has the best health care system in the world. It is not always evenly distributed. A lot of the poor people or the poor elderly oftentimes do not have the best quality care or access to that best quality care. But the bottom line is that the system as a whole works fairly well right now, and we do have the best quality care in the world. But what this proposal does, what the Republican proposal does, is to basically cap the Medicare Program and limit Medicare spending to specific dollar amounts in the law. These caps--and not the choice that the Republicans talk about, which is not going to be there--these caps on Medicare spending essentially yield the enormous Medicare budget savings that the Republicans keep talking about. But the problem is that the caps on spending bear no relationship whatsoever to the costs of health care. Instead, they were set up to produce the budget savings Republicans need to pay for their tax cut for the wealthy. When inflation and enrollment growth push Medicare costs beyond these arbitrary budget caps, Medicare and the elderly and disabled citizens that are part of the program will be at serious risk. Now, one of the previous speakers this morning talked about the trustees and said well, we have to do something to Medicare; otherwise it is going to go broke. That simply is not true. If you look at the trustees report that comes out this year that estimates that the program has another 7 years, every year over the last 25 or 30 years the trustees have come out with a report. Sometimes they have predicted insolvency in 2 years, sometimes in 7, sometimes in 10. The bottom line is that the trustees are not saying that this kind of a cut, that this magnitude of a cut in the Medicare Program, is what is necessary in order to keep Medicare solvent. In fact, in a letter that I previously quoted from Robert Rubin, the Secretary of the Treasury, dated September 21, to the Speaker, to Speaker Gingrich, he simply said: No Member of Congress should vote for $270 billion in Medicare cuts believing that reductions of this size have been recommended by the Medicare trustees or that such reductions are needed now to prevent an imminent funding crisis. That would be factually incorrect. In fact, the trustees have not said that. The trustees have said that something like $90 billion in savings would do fine in order to keep the Medicare Program solvent well beyond the next 7 years. What we are talking about here is an effort to basically squeeze all this money out of the Medicare Program and provide us essentially with a third world health care system just in order to achieve a tax cut for the wealthy. If anybody doubts that, I would suggest to them that they look at what came out of the House Committee on Commerce, which is the committee that I serve on in Congress. We tried in the Committee on Commerce when we were marking up the Medicare bill last week to make the point that if you really felt that these cuts were not being achieved in order to give a tax break for the wealthy, then why not take the Medicare Program out of this budget reconciliation bill that we are considering in Congress right now? In other words, if the Republicans really believe that they are trying to save Medicare, rather than take this money that they are cutting and using it for a tax cut for the wealthy, then why do they need to deal with Medicare in the context of the budget? Why do they not give us some time, a couple weeks, a couple months, to look at the Medicare Program, to look at all its different aspects, and try to deal with it in a way that tries to come up with a better quality health care system, not a worse one? The answer is very simple. They were not willing to do that. We actually submitted an amendment in the Committee on Commerce to take the bill out of the reconciliation, and it failed along a partisan vote line because the Republicans are not serious. They want to use the money for the tax cut.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise today to pay tribute to the Center for Advanced Food Technology [CAFT] at Rutgers, the State University of New Jersey, on the occasion of its 10th anniversary. CAFT was established by our fine State in 1985. My colleagues and I in the State Senate established CAFT and the other New Jersey Advanced Technology Centers to be administered under the auspices of the State's Commission on Science and Technology to link our State's high technology industries with some of Rutgers University's most prominent departments so as to enhance the State's economy. The resulting impacts are something of which I am particularly proud. Over its 10-year history, the center's unique multidisciplinary approach to research and technology transfer has resulted in the development of cutting edge scientific knowledge and technologies that address the product, process, and manufacturing needs of the food industry. As I am sure you know, the food industry is one of the major employers in our country. The food manufacturing sector is also one of the greatest contributors to our Nation's economy by adding value to our Nation's considerable agricultural commodities sector. By coordinating the research efforts of about 40 faculty members from 10 university departments who are overseeing the research of over 130 graduate and undergraduate students and post doctoral associates, CAFT is supporting the research needs of this important manufacturing sector. CAFT's past achievements are many. Through its development of new equipment and manufacturing technologies for military rations, the Defense Logistics Agency is now better prepared to provide a variety of high quality foods to support the morale of our service men and women. By performing research aimed at understanding and enhancing food quality, these rations will continue to improve. The facilities and equipment used for the military ration studies have been used on a cost recovery basis to assist smaller food companies and entrepreneurs to develop new businesses and to develop new or improve existing products and manufacturing operations. This type of activity is necessary to keep the food industry healthy and to enhance the viability of smaller companies which are the lifeblood of the manufacturing sector. CAFT has also worked with food, pharmaceutical, and chemical companies which have needed highly sophisticated research analysis performed. Several of these companies have been able to bring new products to market partially because of CAFT's expert assistance. Underlying all these efforts are the fundamental research studies through which CAFT has developed its well deserved international recognition. Companies worldwide have benefited from the cutting edge knowledge CAFT has developed. Of this, the center is understandably proud. I am very pleased to let the people of this Nation know about the unique and wonderful research capabilities, such as those at CAFT, that have been established in New Jersey. These centers can serve as models of how industry, universities, and government can work together to make our Nation stronger.