Arlen Specter

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to describe legislation I have introduced that will help businesses, sustain and create jobs, spur economic development for a struggling industry and benefit the environment. The locomotive industry in the U.S. directly employs over 125,000 people and supports a wide-range of secondary industries which contribute to the locomotive manufacturing process through operations located around the country. This vital industry has experienced a significant decline in business over the past several years, which has regrettably resulted in furloughs and layoffs. It is my understanding, though, that these circumstances are not due to a lack of demand for new locomotives, but rather, yet another symptom of our Nation's weak economy and insufficient capital among potential customers. Accordingly, I along with my colleague Senator Bob Casey, have introduced the Locomotive Fleet Investment and Tax Credit Act of 2009. This legislation will provide a tax credit for the acquisition of new and newly remanufactured locomotives, including freight, long-haul, passenger, and switch locomotives. The tax credit we have proposed is substantial but time-limited, so as to have the maximum impact in short order. The bill provides a tax credit of 30 percent of the purchase cost of a new or newly manufactured locomotive, but stipulates that the new locomotives must be placed in service before December 31, 2013, to qualify for the credit. In addition to the economic impact, the Locomotive Fleet Investment and Tax Credit Act will also benefit the environment, as new and newly manufactured locomotives are typically more fuel efficient and emit fewer harmful pollutants. Moreover, new locomotive models are often more reliable and have better safety records. In short, it is in the best interest of operators, manufacturers and the general public to remove from the rails as many old, outdated rail cars as possible and replace them with new locomotives. Our economy has suffered through a crisis of historic proportions, and though there are early signs of recovery, conditions are still grim. On October 2, 2009, the Department of Labor reported that national unemployment had risen to 9.8 percent, with the loss of 260,000 jobs in September and the total loss of 7.2 million jobs since the recession began. The rail industry and America's manufacturing base has been hard hit by the economic downturn and the Federal Government ought to help foster an environment in which these businesses can rebound and thrive once again. I am confident that our economy will indeed improve, and when it does, it is important that our country still has a robust capacity to manufacture locomotives domestically. The Locomotive Fleet Investment and Tax Credit Act of 2009 will provide a much-needed boost to locomotive manufacturers, sustain and create jobs and help establish a safer, environmentally friendlier and more reliable rail industry.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to describe legislation I have introduced that will help businesses, sustain and create jobs, spur economic development for a struggling industry and benefit the environment. The locomotive industry in the U.S. directly employs over 125,000 people and supports a wide-range of secondary industries which contribute to the locomotive manufacturing process through operations located around the country. This vital industry has experienced a significant decline in business over the past several years, which has regrettably resulted in furloughs and layoffs. It is my understanding, though, that these circumstances are not due to a lack of demand for new locomotives, but rather, yet another symptom of our Nation's weak economy and insufficient capital among potential customers. Accordingly, I along with my colleague Senator Bob Casey, have introduced the Locomotive Fleet Investment and Tax Credit Act of 2009. This legislation will provide a tax credit for the acquisition of new and newly remanufactured locomotives, including freight, long-haul, passenger, and switch locomotives. The tax credit we have proposed is substantial but time-limited, so as to have the maximum impact in short order. The bill provides a tax credit of 30 percent of the purchase cost of a new or newly manufactured locomotive, but stipulates that the new locomotives must be placed in service before December 31, 2013, to qualify for the credit. In addition to the economic impact, the Locomotive Fleet Investment and Tax Credit Act will also benefit the environment, as new and newly manufactured locomotives are typically more fuel efficient and emit fewer harmful pollutants. Moreover, new locomotive models are often more reliable and have better safety records. In short, it is in the best interest of operators, manufacturers and the general public to remove from the rails as many old, outdated rail cars as possible and replace them with new locomotives. Our economy has suffered through a crisis of historic proportions, and though there are early signs of recovery, conditions are still grim. On October 2, 2009, the Department of Labor reported that national unemployment had risen to 9.8 percent, with the loss of 260,000 jobs in September and the total loss of 7.2 million jobs since the recession began. The rail industry and America's manufacturing base has been hard hit by the economic downturn and the Federal Government ought to help foster an environment in which these businesses can rebound and thrive once again. I am confident that our economy will indeed improve, and when it does, it is important that our country still has a robust capacity to manufacture locomotives domestically. The Locomotive Fleet Investment and Tax Credit Act of 2009 will provide a much-needed boost to locomotive manufacturers, sustain and create jobs and help establish a safer, environmentally friendlier and more reliable rail industry.

Mr. SPECTER

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

Mr. SPECTER

Mr. SPECTER. Madam President, I have sought recognition, briefly, to talk about the legislation on hate crimes, which was passed last Thursday as part of the Defense authorization bill, and to note the very different attitude which is present today than was present in 1997, when Senator Kennedy first took the lead in introducing hate crimes legislation, which I cosponsored with him at that time as well as Senators John Chaffee, James Jeffords and Alfonse D'Amato, the only Republicans who appeared on the bill at that time. There was some substantial opposition, very little appreciation of the effort to expand hate crimes to include sexual orientation and also disability. Even the Washington Post had an editorial on November 17 raising questions about the wisdom of the legislation which we had introduced. One of the concerns raised by the Post was that: A victim of a biased-motivated stabbing is no more dead than someone stabbed during a mugging. It seems to me, that missed the point. But even the Washington Post, at that time, challenged the rationale for expanding hate crimes. The Post also raised a comment about the disturbing aspect of the legislation is the lower threshold for Federal involvement, in any case. Having had some experience as a district attorney, and knowing the practices of district attorneys having jurisdiction over a county--for example, my job was both the city and county of Philadelphia--that DAs do not have, in some areas, a very broad perspective. Where the climate for a district attorney, an elected position, is not conducive to pursuing someone who has undertaken something which has a racial bias, a racial motivation or a motivation for a difference in sexual orientation, the cases are not brought. That is precisely the kind of an area which warrants hate crimes legislation on the Federal level. But it has been a long battle, and the issue went through quite a few conferences. Thanks to the leadership of our distinguished majority leader, Senator Harry Reid, we have persisted. Senator Reid has kept this issue front and center in the Senate, and Senator Leahy, as chairman of the Judiciary Committee, and I in the past, in 2005-2006 in the 109th Congress, were pushing ahead on hate crimes legislation. Senator Levin, as chairman of the Armed Services Committee, is to be commended for fighting it through and finally getting it through the conference. So it is quite a landmark move that the Congress has finally acted on it as we did last Thursday. There is a recognition that the Post was off base when it said: A victim of bias-motivated stabbing is no more dead than someone stabbed during a mugging. That suggests a misunderstanding of hate crimes, as Senator Kennedy and I wrote in an op-ed that: Random street crimes don't provoke riots; hate crimes can and sometimes do. A hate crime is broader than simply an attack against a victim, against the African American who was dragged through the streets in a small town in Texas which gave rise to the impetus for hate crimes legislation or the brutal attack on Matthew Shepherd in Wyoming. So this legislation is highly significant. I ask unanimous consent that the text of the Washington Post editorial of November 17, 1997, and the reply op-ed piece by Senator Kennedy and myself, dated December 1, 1997, be printed in the Record.

Mr. SPECTER. An additional comment or two. We have seen times change with respect to don't ask, don't tell. When this was put into operation, it seemed to me at the time--and I have said repeatedly in the intervening decade-plus that don't ask, don't tell has been in effect--that it has outlived its usefulness, its utility. I do not know that it ever had utility, but, if so, it certainly ought to be changed now. There are men and women, regardless of sexual orientation, who serve with bravery and distinction in the military. Don't ask, don't tell ought to be repealed. There are limits as to what the President may be able to do through an executive order. So where congressional action is warranted, let it be enacted. On a somewhat similar tone, times have changed with the Defense of Marriage Act since it was enacted back in 1996. Now we have seen the States of Connecticut, Iowa, and Massachusetts have legalized same-sex marriage. It is an issue where attitudes have changed very considerably. I think, just as we were finally able to get hate crimes legislation through, just as it is time to move ahead and move beyond don't ask don't tell, it is time to repeal the Defense of Marriage Act. In the absence of any other Senator right now seeking recognition, I suggest the absence of a quorum.

Mr. SPECTER

Mr. SPECTER. Before commenting further on the article in the New York Times, some of the things the distinguished chairman of the HELP Committee has said, it would be my hope that we would proceed, as Senator Harkin related. I got hold of him yesterday morning after noting the Sunday Times, and then we proceeded to talk about a hearing which I hope we can do promptly. One of the witnesses whom I would like to see called, subject to the approval of the chairman, is Walter Rowen of the Susquehanna Glass Company in Columbia, PA who sought to renew his company's coverage for 2,000 employees and found out that the premiums had gone up by 160 percent. I talked to Mr. Rowen this afternoon and got more of the details of his situation. As Senator Harkin has commented, this is typical of a great many. Right in the middle of where we are now on this debate on the public option, I believe the case for the public option, a robust public option, would be strengthened materially to document what the New York Times has said. Right now it is a newspaper article. It is a little different when there is a Senate hearing on the subject and you bring in people such as Walter Rowen who have demand for a 160-percent increase, and you question the insurance companies on what they are doing. If the New York Times is accurate, that small businesses will be asked to pay about a 15-percent increase for the next year--and this is substantially higher, and in a moment or two I will go through some of the specific quotations--and that they are responding to Wall Street because Wall Street is demanding more profits from their investors-- that is specified in the article, and I will take it up in detail--and the comment is that the insurance companies are more frightened about Wall Street than they are about Congress. I suppose that was surprising to me that in the context of the times, the way Congress is moving ahead on comprehensive health care reform, insurance reform, that they at this point should be more concerned about Wall Street than Congress. I think Wall Street ought to be more concerned about Congress than insurance companies. I think Congress is finally going to act on quite a number of the abuses in so many lives. But if we are seeing here action by Wall Street pressuring the insurance companies to raise their profits before Congress acts, then we ought to find out. If there is any justification for insurance companies to raise their premiums, let's have them tell us. Let's bring in the insurance companies. There are a lot of these famous pictures of a half a dozen corporate executives standing in front of a congressional hearing room, raising their right hands and swearing to tell the truth. And then we have some questions for them. I have questions for them. Why the increase? Is there an increase because health care costs have gone up? One of the experts quoted in the New York Times article says 23 percent. Mr. Rowen faces 160 percent. Is there any justification except profiteering and acting ahead of congressional action? I hope Senator Harkin will have the hearing promptly. It will bolster the case for the public option. It will bolster the case to have alternatives to the private sector. What is often misunderstood is that the public option does not eliminate the private sector. The public option is what it says. It is an option, another course, another thing one can choose. It is precisely this kind of response to Wall Street-- and I will not prejudge it until we hear the witnesses and have them sworn in and take their testimony--if it is true, that reemphasizes the need to have some competition, to have competition which will not knuckle to Wall Street. A public option will not knuckle to Wall Street. We have talked informally. It is not easy to get a hearing organized fast, but Senator Harkin and I, as is well known, passed the gavel on the chairmanship of the Subcommittee on Labor, Health and Human Services, and Education. We can proceed. I submit that now is the time to do so.

Mr. SPECTER. Madam President, I have seen Senator Harkin cross- examine, and it is a sight to see.

Mr. SPECTER. Madam President, I thank the chairman for that statement. Next week would be about right because it would come right as we are considering this legislation. I think it would shed a lot of light on the legislation and be a big boost for the public option. I thank my colleague.

Mr. SPECTER. Madam President, I refer to some of the specifics in the New York Times article. Again, I cite this as a newspaper article. It is hearsay in an article, but we will have the hearings to find out the facts. But this is what some of the details in the article say: that small businesses ``are seeing premiums go up an average of about 15 percent for the coming year--double the rate of last year's increase''; big employers ``have more negotiating clout.'' ``[S]ome experts say they think the insurance industry'' is ``under pressure from Wall Street'' to raise its ``premiums to get ahead of any legislative changes that might reduce their profits.'' Well, if that is so, we ought to find out about it. And if they have a justification for the price increases, let them tell us what it is. Let them produce their books and records if they have a justifiable basis for their increase. The New York Times article goes on to point out that ``Edward Kaplan, a consultant with the Segal Company, said his clients were seeing renewals for coverage at prices 15 to 23 percent higher this year,'' where ``they typically faced increases'' in the past ``of 7 to 12 percent.'' Joshua Miley, a consultant with HighRoads, which analyzes benefit information for employers, said the ``undercurrent of health reform is driving part of the renewal increases.'' The article goes on to point out: There is no question that insurers are under pressure from Wall Street . . . they have heard from angry investors disappointed by the companies' earnings. The article further states: While the industry is particularly vulnerable now in Washington, she said-- ``She,'' meaning Sheryl Skolnick, an analyst for Pali Capital, referring to the insurance companies-- ``it seems like they're more afraid of Wall Street.'' The article goes on to point out that: In August, when Walter Rowen, who owns Susquehanna Glass [Company] in Columbia, Pa., sought to renew his company's coverage for two dozen employees, he said his insurer demanded a 160 percent rate increase. I called Mr. Rowen today and found out that he has had a family business since 1910, and they have had health insurance for about 20 years, and they cover 50 percent of the premiums for their employees. As prices have risen, they have sought deductibles to lower the rate, and then they paid the deductibles for their employees. It is cheaper to have deductibles, have the company pay them, than to pay the increase in costs. That is another factor which we ought to analyze. That ought not to be so. His policy expired in October--this month--and he corroborated the New York Times story that he was told there would be 160 percent more. He has found other insurance, but he is paying $22,000 annually. He hires invariably in the 28 to 32 category for small business, and between 20 and 24 of them are covered. Now he has been forced to go to the point where the employees are going to have to pay the deductible. If they do not have an illness, then there is no problem. If they do, then the deductible is obviously very, very expensive. I join my colleague, the senior Senator from Iowa, in congratulating the--now he is the junior Senator from Iowa, pardon me, but close--he has been here since the election of 1984, a long time. I join Senator Harkin in congratulating the majority leader for moving ahead with a public option in the legislation which he has melded together. I again thank Senator Harkin for his initiative and willingness to move ahead and have a hearing. Madam President, I have an excellent floor statement which I will not take the time to read, prepared by my expert in the field, John Myers, which I ask unanimous consent that the full text of the statement be printed in the Congressional Record, and I ask that the full explanation which I am giving now be included. Sometimes the written statement just follows the oral extemporaneous statement and people reading the Congressional Record wonder why the Senator has repeated himself. Well, let it be understood what I have said is an extemporaneous statement, and this is the text prepared by my able staff assistant, and would ask that these comments be the preface to be included in the Record in full.

Mr. SPECTER. Mr. President, yesterday the New York Times ran a front page article describing the difficulties faced by small businesses in the face of rising health costs [Small Business Faces Sharp Rise in Costs of Health Care; October 25, 2009]. Small business is the backbone of our economy and in today's economy we must ensure that small business has every opportunity to succeed. The article highlights the plight of Walter Rowen, a constituent of mine. Mr. Rowen is the owner of Susquehanna Glass in Columbia, Pennsylvania. In August, when he sought to renew his company's coverage for his two dozen employees, his insurer demanded a 160 percent rate increase. He was told his work force was ``getting too old and very expensive''. He also found that any other health plan was likely to charge 30 to 50 percent more than he paid last year. Left with few options, Walter chose a less generous plan from a different carrier for 44 percent more. Unfortunately, Mr. Rowen's story is not unique. Steep rises in insurance premiums are affecting small businesses across the nation. Small businesses are seeing renewal prices 15-23 percent higher compared to last year, according to Edward Kaplan, a benefits consultant with the Segal Company. As increases from 2008 to 2009 were considerably lower at 7-12 percent, it is hard to believe that a doubling of the rate of renewal costs in 1 year could be linked to medical costs alone. In the article Joshua Miley, a consultant who analyzes benefit information for employers, states that the undercurrent of health reform is driving part of the renewal increases. The idea that health insurance companies would increase rates to beneficiaries based on pending health care reform is disturbing. Michael A. Turpin, a former senior executive for United Health, and now a top official at USI holdings, an insurance brokerage firm, echoes Mr. Wiley's hypothesis: insurance companies are ``under so much pressure to post earnings, they're going to make hay while the sun is shining.'' Clearly the primary concern of health insurers is not whether their customers receive the best possible health care for their money; it is how much money can be generated for the insurers' investors. This objectionable action illustrates why there is a need for a public option as part of health care reform. Currently, there is a lack of competition in the health insurance market. Instead of individuals or businesses having the freedom to shop for coverage that works for them, they have to take what insurance companies offer. This translates to higher prices, preexisting condition exclusions and denials when insurance is most needed. A public option can help by introducing competition across the country. This plan could constrain costs and make the insurers think twice about passing down double-digit rate increases to customers. The American people deserve a choice in health insurance to keep the private insurers honest. Without competition from a public plan, health insurance costs have skyrocketed. As health reform moves forward, I encourage Majority Leader Reid to include a public option to bring affordability and competition back to the market. A recent survey conducted by Intuit Inc. revealed that 44 percent of small business owners intended to hire new employees in the next year, an encouraging indicator in our economic recovery. This survey also noted that nearly 90 percent of those small business owners surveyed said that health insurance benefits are integral to attracting good workers. However, 58 percent of those small employers do not offer health insurance, with nearly 50 percent stating that they can't afford it. This is a sobering statistic and one we should do everything in our power to address. I commend the efforts of Chairmen Harkin and Baucus to combat this issue. Proposed health reform legislation will include a tax credit for small businesses that provide health insurance to their employees. The HELP Committee bill provides a tax credit for small businesses of up to $2,000 for a family or $1,000 for an individual. The legislation will allow small businesses to join health insurance exchanges so that they can group together and gain the same market power as larger companies currently enjoy. Currently, perhaps most importantly, small businesses pay up to 18 percent more than large employers. These exchanges will help relieve the problem of small risk pools, which due to their size can see their costs grow significantly if one employee suffers an illness such as cancer. By increasing the size of these risk pools, costs will become more predictable and more affordable for small businesses. Proposed legislation will also tighten insurance ratings to prevent costs from being disproportionately placed on older workers. This is of particular importance for small businesses that might employ older individuals, an important part of our Nation's workforce. There is an undeniable need to address the health care problems we suffer from today. The inequities of the current system must be fixed, especially for the 70 million people that are employed by or operate a small business. The decisions of health insurers to drastically increase health insurance prices before health reform is enacted demonstrates the need to promptly move forward with legislation that includes a public option.

Mr. SPECTER. Madam President, I thank the Chair.

Mr. SPECTER

Mr. SPECTER. Madam President, on behalf of our distinguished majority leader, I have been asked to do what is called wrap-up. As in executive session, I ask unanimous consent that on Tuesday, October 27, the vote on confirmation of Executive Calendar No. 470 occur at 2:20 p.m., and that the 5 minutes immediately prior to the vote be available to Senator Byrd; further, that the other provisions of the previous order remain in effect; that upon confirmation and the Senate resuming legislative session, the Senate then proceed to a period of morning business until 5:30 p.m., with Senators permitted to speak therein for up to 10 minutes, and that the time be equally divided and controlled between the leaders or their designees; that at 5:30 p.m. there be 30 minutes of debate prior to a vote on the motion to invoke cloture on the motion to proceed to H.R. 3548, with the time equally divided and controlled between the leaders or their designees; that at 6 p.m. the Senate proceed to vote on the motion to invoke cloture.

Mr. SPECTER

Mr. SPECTER. Madam President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. 1929, introduced earlier today.

Mr. SPECTER. Madam President, I ask unanimous consent that the bill be read three times and passed, the motion to reconsider be laid upon the table, with no intervening action or debate, and any statements related to the bill be printed in the Record.

Mr. SPECTER

Mr. SPECTER. Madam President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 321, which was submitted earlier today.

Mr. SPECTER. Madam President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening action or debate, and any statements related to this matter be printed in the Record.

Mr. SPECTER

Mr. SPECTER. Madam President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 10 a.m. tomorrow, Tuesday, October 27; that following the prayer and the pledge, the Journal of proceedings be approved to date, the morning hour be deemed to have expired, the time for the two leaders be reserved for their use later in the day and there be a period of morning business for 1 hour, with Senators permitted to speak therein for up to 10 minutes each, with the time equally divided and controlled between the two leaders or their designees, with the Republicans controlling the first half and the majority controlling the second half; that following morning business, the Senate proceed to executive session to consider the nomination of Irene Berger of West Virginia to be U.S. District Court Judge for the Southern District of West Virginia, as provided under the previous order. Finally, I ask that the Senate recess from 12:30 until 2:15 p.m. to allow for the weekly caucus luncheons.

Mr. SPECTER

Mr. SPECTER. Madam President, under a previous order, tomorrow, at 2:20 p.m., the Senate will proceed to vote on the confirmation of the Berger nomination. Following the vote, the Senate will turn to a period of morning business until 5:30 p.m. The Senate will then resume the motion to proceed to H.R. 3548, and at 6 p.m. proceed to a cloture vote on the motion to proceed to H.R. 3548, the Unemployment Compensation Extension Act.

Mr. SPECTER

Mr. SPECTER. Madam President, if there is no further business to come before the Senate, I ask unanimous consent that it adjourn under the previous order.

Mr. SPECTER

Mr. SPECTER. Madam President, I understand that S. 1927, introduced earlier today by Senator Dodd, is at the desk, and I ask for its first reading.

Mr. SPECTER. I now ask for its second reading and object to my own request.

Mr. SPECTER. Madam President, for anybody watching C-SPAN2--if anybody is watching--a word of explanation might be somewhat helpful. This is a procedure to set this particular resolution, S. Res. 1927, in procedural posture so that when I, as the leader, ask for its second reading, and then say ``I object to my own request,'' it is procedural, not a reversal of position.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to speak about the Strengthening Enforcement for Health Care Fraud Crimes Act of 2009, which I am introducing today with Senator Graham. At a time when Congress is poised to pass historic health care reform legislation to protect the health of Americans, it is imperative that we do all that we can to eliminate waste, fraud and abuse in America's health care systems. We must do all that we can to prevent, detect and vigorously prosecute health care fraud. Health care fraud costs tax payers billions of dollars each year. National health care spending in the United States exceeded $2.2 trillion and represented 16 percent of the Nation's Gross Domestic Product in 2007. The National Health Care Anti-Fraud Association, NHCAA, conservatively estimates that 3 percent of all health care spending--or more than $60 billion--is lost to health care fraud perpetrated against both public and private health plans. Other estimates by government and law enforcement agencies suggest losses from fraud as high as 10 percent--or $220 billion annually. Fraud committed against both public and private plans by health care providers, medical equipment suppliers, drug companies, and also by fraudulent plan operators and brokers, undermines public trust in our health care system. More importantly, the costs of health care fraud are borne by all Americans. It does not matter if you have health insurance sponsored by your employer, if you purchase privately your own insurance policy, or pay taxes to fund government health care programs. Health care fraud results in reduced benefits and coverage, and higher premiums and costs. It can mean higher taxes and increased budgetary challenges. Health care fraud often targets the most vulnerable in our society-- the elderly, the poor, and the infirm. Criminals involved in health care fraud falsify patients' medical records and steal patients' personal and insurance information to submit fraudulent claims. Health care fraud subjects patients to unnecessary and dangerous medical procedures. According to the FBI: One of the most significant trends observed in recent health care fraud cases includes the willingness of medical professionals to risk patient harm in their schemes. FBI investigations in several offices are focusing on subjects who conduct unnecessary surgeries, prescribe dangerous drugs without medical necessity, and engage in abusive or sub- standard care practices. FBI Financial Crimes Report to the Public, Fiscal year 2007. Criminologists have long reported that criminals look at three factors in performing their own cost benefit analysis: the risk of getting caught; the probability of being convicted; and the severity of the punishment. The bill I am introducing today addresses the third factor--and sends the message loud and clear to those who would contemplate committing health care fraud. If caught stealing $100,000 or more you will go to jail--no ifs, ands or buts. The bill provides a sentence of at least 6 months incarceration for committing health care fraud with losses of $100,000 or more. You may even get more jail--under the discretionary guidelines--but no one will get less than 6 months for schemes of this size. Since the Supreme Court decided United States v. Booker in January 2005 and made the Sentencing Guidelines advisory, sentencing judges have wide discretion to impose sentences on criminal defendants unless mandatory minimum sentences are applicable. Except for aggravated identity theft crimes, defendants do not face mandatory imprisonment for white collar crimes. Given the importance and necessity to vigorously prosecute and punish serious health care fraud crimes, I urge the Senate to pass this bill. Without it, there will be no certainty of punishment nor effective deterrence for serious health care fraud crimes.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to speak about the Strengthening Enforcement for Health Care Fraud Crimes Act of 2009, which I am introducing today with Senator Graham. At a time when Congress is poised to pass historic health care reform legislation to protect the health of Americans, it is imperative that we do all that we can to eliminate waste, fraud and abuse in America's health care systems. We must do all that we can to prevent, detect and vigorously prosecute health care fraud. Health care fraud costs tax payers billions of dollars each year. National health care spending in the United States exceeded $2.2 trillion and represented 16 percent of the Nation's Gross Domestic Product in 2007. The National Health Care Anti-Fraud Association, NHCAA, conservatively estimates that 3 percent of all health care spending--or more than $60 billion--is lost to health care fraud perpetrated against both public and private health plans. Other estimates by government and law enforcement agencies suggest losses from fraud as high as 10 percent--or $220 billion annually. Fraud committed against both public and private plans by health care providers, medical equipment suppliers, drug companies, and also by fraudulent plan operators and brokers, undermines public trust in our health care system. More importantly, the costs of health care fraud are borne by all Americans. It does not matter if you have health insurance sponsored by your employer, if you purchase privately your own insurance policy, or pay taxes to fund government health care programs. Health care fraud results in reduced benefits and coverage, and higher premiums and costs. It can mean higher taxes and increased budgetary challenges. Health care fraud often targets the most vulnerable in our society-- the elderly, the poor, and the infirm. Criminals involved in health care fraud falsify patients' medical records and steal patients' personal and insurance information to submit fraudulent claims. Health care fraud subjects patients to unnecessary and dangerous medical procedures. According to the FBI: One of the most significant trends observed in recent health care fraud cases includes the willingness of medical professionals to risk patient harm in their schemes. FBI investigations in several offices are focusing on subjects who conduct unnecessary surgeries, prescribe dangerous drugs without medical necessity, and engage in abusive or sub- standard care practices. FBI Financial Crimes Report to the Public, Fiscal year 2007. Criminologists have long reported that criminals look at three factors in performing their own cost benefit analysis: the risk of getting caught; the probability of being convicted; and the severity of the punishment. The bill I am introducing today addresses the third factor--and sends the message loud and clear to those who would contemplate committing health care fraud. If caught stealing $100,000 or more you will go to jail--no ifs, ands or buts. The bill provides a sentence of at least 6 months incarceration for committing health care fraud with losses of $100,000 or more. You may even get more jail--under the discretionary guidelines--but no one will get less than 6 months for schemes of this size. Since the Supreme Court decided United States v. Booker in January 2005 and made the Sentencing Guidelines advisory, sentencing judges have wide discretion to impose sentences on criminal defendants unless mandatory minimum sentences are applicable. Except for aggravated identity theft crimes, defendants do not face mandatory imprisonment for white collar crimes. Given the importance and necessity to vigorously prosecute and punish serious health care fraud crimes, I urge the Senate to pass this bill. Without it, there will be no certainty of punishment nor effective deterrence for serious health care fraud crimes.

Mr. SPECTER

Mr. SPECTER. Mr. President. I have sought recognition to urge support for the legislation introduced today by Senator Durbin to completely eliminate the unfair and unwarranted sentencing disparity between crack and powder cocaine. I am an original co-sponsor of this bill. Since the passage of the Anti-Drug Abuse Act of 1986, which established the basic framework of mandatory minimum penalties currently applicable to Federal drug trafficking offenses, there exists a 100-to-1 ratio between crack and powder cocaine. That means it takes 100 times as much powder cocaine as crack to trigger the same 5-year and 10-year mandatory minimum penalties. On April 29, 2009, 6 witnesses testified before the Senate Judiciary Subcommittee on Crime and Drugs regarding the sentencing disparity between crack and powder cocaine, including the Assistant Attorney General for the Criminal Division at the Department of Justice, the Acting Chair of the U.S. Sentencing Commission, a U.S. District Court Judge representing the Judicial Conference of the U.S. Courts, and a Police Commissioner from a major urban city. All six witnesses testified in favor of an immediate reduction or elimination of this disparity. At the time Congress established the crack-powder disparity in 1986, it did so because it was believed that crack was uniquely addictive and was associated with greater levels of violence than powder cocaine. Today, more than 20 years later, research has shown that the addictive qualities of crack have more to do with its mode of administration--smoking compared to inhaling--rather than its chemical structure. Moreover, recent studies suggest that levels of violence associated with crack are stable or even declining. Last year, 80.6 percent of crack offenders were African Americans, while only 10.2 percent were white. Compare that with powder cocaine prosecutions. For that same year, 30.25 percent of powder cocaine offenders were African Americans, 52.5 percent were Hispanic, and 16.4 percent were white. The average sentence for crack offenders is 2 years longer than the average sentence for powder cocaine. Let me repeat that. African Americans, who make up approximately 12.3 percent of the population in the U.S., comprise 80.6 percent of the Federal crack offenders. It takes about $14,000 worth of powder cocaine compared to only about $150 of crack to trigger the 5-year mandatory minimum penalty. Given that crack and cocaine powder are the same drug--just in different forms--why should we impose the same 5-year sentence for the $150 drug deal as for the $14,000 drug deal? These sentencing disparities undermine the confidence in the criminal justice system. Our courts and our laws must be fundamentally fair; just as importantly, they must be perceived as fair by the public. I do not believe that the 1986 Act was intended to have a disparate impact on minorities but the reality is that it does. The White House and the Department of Justice have asked Congress to eliminate this unfair sentencing disparity. It is time to correct this injustice.