Christopher Shays

Mr. SHAYS

Mr. SHAYS. Mr. Speaker, I thank the gentleman for yielding me time, and I just wanted to say that I oppose the Medicare bill described by the Democrats. It is an outrageous bill as described by the Democrats, but that is not our bill. Democrats are saying, regretfully, we want copayments. We do not want copayments. There are no copayments. They say we want deductibles. There are no increases in deductibles. They say we increased the premium, and the premium stays at 31\1/2\ percent. The taxpayer will continue to pay 68\1/2\ percent. Mr. Speaker, we have three main goals as this Republican majority. We want to get the financial house in order and balance our budget. We want to save our trust funds. We want to protect, preserve, and strengthen them. And we want to transform this social corporate farming welfare state into an opportunity society. We are going to do that, but we must save our trust fund, it is going bankrupt, and we will. How do we do it? No new taxes. We do not affect beneficiaries. We affect providers and we change the system. We are transforming the system, allowing people to keep what they have or we are allowing them to get into private care. We are giving them choice. We are allowing them to have the same kind of health care that we as Federal employees have. We are giving them the choice they asked for. Mr. Speaker, we are doing it without cutting the program. We are increasing it. We are going to spend $600 billion more of new money. Not $300 billion, $600 billion more. It will go from $4800 per beneficiary to $6700 per beneficiary. Only in Washington when we spend 50 percent more do people call it a cut.

Mr. SHAYS

Mr. SHAYS. Mr. Chairman, I was asking some of my colleagues how are we doing. They said we are doing well, but it is tough when people are just throwing charges that are not true, and it is tough when the charges are not true, and they are not true. But it is easy when we have a bill like this to defend. Republicans, be proud of what has been done. Be proud of the fact that there are no increases in copayments. Be proud of the fact that there are no increases in deductibles. Be proud of the fact that you have not increased premiums. They will stay at 31\1/2\ percent. In fact, be proud of the fact that in one case we did increase [[Page H 10455]] premiums for the most wealthy. The most wealthy are going to have to pay more for Medicare part B. If someone is single and making $100,000, they will have to pay more for Medicare part B. If someone is married and makes over $150,000, they will have to pay more for Medicare part B. We are telling the most affluent that they have a rule to play in this. Mr. Chairman, their bill lets the wealthy get all the benefits the poor get. Give me a break. When I look at this bill, I know we have three major goals. We are going to get our financial house in order. We are going to do that and balance our budget. We are going to save our trust funds. We are going to protect them, and we are going to preserve them, and we are going to strengthen them, and we are also going to change this social, and corporate, and farming welfare state into an opportunity society. but we are going to save our Medicare trust fund, and how are we going to save it? In part because of a strong criminal fraud that we have in our bill. When my colleagues voted against the rule, they voted against making crime in health care a Federal offense because in our rule we make health care fraud a Federal offense. We make it a Federal offense not just in Government programs, but in private programs as well. Theft and embezzlement, a federal offense. False statements, a federal offense. Bribe and graft, a Federal offense. Illegal enumerations, Federal offense. Obstruction of justice, a Federal offense. My colleagues voted against it when they voted against the rule. In our bill, contrary to what the previous speaker said, we have injunctive relief, we have subpoena power, we have grand jury disclosure. It is in our bill. Read it. My colleagues and continually distorting the facts, and, when the American people know what we have done, they are going to like it, and when I speak to the American people and my constituents, they say why would I object to a plan that does not increase copayments, does not increase deductible, does not increase my premium, allows me to have private care? My colleagues are into the old system. They are not giving their constituents choice. We are going what the gentleman from Missouri [Mr. Gephardt] did in 1980. He said we should allow people in Medicare to get into a private-sector plan. The problem is he is 20 years later not in step.

Mr. SHAYS

Mr. SHAYS. I thank the gentleman for yielding and want to say that I have seen our conference work on this legislation for well over a year, because we started, in fact, when we were in the minority to deal with this very serious problem of reforming our health care system and making it a better system for all. One of the first fallacies, and there are going to be a lot of fallacies that we have to deal with, is this whole concept that we are in fact cutting Medicare. You can look at it in three different ways. Each way it is a significant increase. In the last 7 years, we spent $926 billion on Medicare. We expect to spend in the next 7 years $1.6 trillion. It is about a $675 billion increase in new money over the next 7 years. We are going to spend 73 percent more money in the next 7 years than we spent in the last 7 years. Only in this place, in Congress and in Washington, when you spend 73 percent more during the next 7 years do people call it a cut. We could look at it in terms of how much we spend today on Medicare. We spend $178 billion. In the 7th year we are going to spend $274 billion, estimated. That is a 54 percent increase in the 7th year. So we are going to spend in the 7th year 54 percent more than we spend today. Only in Washington when you spend 54 percent more would people call it a cut. But then people said, Well, wait a second. There are a lot more beneficiaries. So we said, Yeah, let us see the impact on each individual beneficiary. We put aside for every senior approximately $4,800 per beneficiary, per senior. In the 7th year, that is going to go up to $6,700. That is a 40 percent increase per beneficiary in the kind of money we are putting into the system.

Mr. SHAYS. Per beneficiary. We are putting in 73 percent more money in the next 7 years over the past 7 years. We are spending 54 percent more in the 7th year than we are spending today. Any way you look at it, we are spending a colossal amount of increased funds in this program.

Mr. SHAYS. If the gentleman would yield, the President came in with this 10-year plan. In this 10-year plan, he said we needed to reduce the growth, which is the proper term, of Medicare, $127 billion. And what he did not acknowledge, though, that was scored by OMB. The President, in fact, I just want to add weight to it, was suggesting by reducing $190 billion the growth in Medicare.

Mr. SHAYS. Thank goodness it is not going up as much

Mr. SHAYS. If the gentleman would yield, what we are really going to do is we are going to just take each of the points that were made by our colleagues on the other side of the aisle and just talk about how valid they were, if they had any validity. I just make this point. Of the $270 billion of savings to the growth, $133 billion are going to go into the Medicare part A trust fund. That is the trust fund that individuals pay in their payroll tax, the 2.9- percent if you are self-employed, 1.45 percent that you pay if you have an employer; and the other $137 billion are going into the Medicare Part B trust fund. That is the fund that funds all the health services. My colleague just brought up the issue of taxes; and since I serve on the Committee on the Budget, I would just like to respond to this issue and deal with this other issue that somehow they are linked. They are not linked at all. When the tax cut passed, and this is a plan that I voted for, we paid for it through the fiscal dividend of getting our financial house in order. The Congressional Budget Office said we had a fiscal dividend of $170 billion by immediately getting our financial house in order. We saved the taxpayers $170 billion on unnecessary interest payments and so on.

Mr. SHAYS. That is the point I want to make. I want to say that before we even took up Medicare, we paid for each part of those tax cuts. We paid for them in cuts in discretionary spending, in slowing the growth of our entitlement programs that we specified and through our fiscal dividend. So it was paid for through very serious and in some cases difficult votes. Our logic was, why have a program, for instance, a government program that is supposedly helping a family when 20 to 30 percent get taken off by the bureaucracy before it gets to the family, with all the bureaucratic requirements of the government program, and why not just get that family the money? A major part of it is the $500 tax credit, $500 for each child.

Mr. SHAYS. Anybody can just ask themselves, if you have a child that is under 18, you would get a $500 tax credit. If you are listening today and you feel you are rich, then you would qualify under their definition. And the Senate, on this $500 tax credit, has said it should only go, Republicans in the Senate said it should only go to families under $75,000. But 75 percent of all families make less than $75,000. So the biggest part of our tax cut will go to individuals with families with children. If they have three children, they get $1,500. If they have four, they get $2,000. I just would love to make this point, if I could. I would like to make the point that when my parents were raising me and my older brothers, they were able to take a deduction in today's dollars off their income of $8,000, and they could reduce their income. My family, in today's dollars, could reduce $32,000 from their income and not pay tax on that $32,000. You have seen what was then equated to today. And my family, when they were having to, my mom and dad were raising us, they had to pay less than 20 percent in taxes to Federal, State, and local governments. A family today pays approximately 40 percent in Federal, State, and local. So what we are trying to do is focus the bulk of that tax on families and families that need it.

Mr. SHAYS. Even taking into account the capital gains exemption, which we have to score as a loss in revenue, which most economists say will actually generate revenue, this is how Democrats equate it to a wealthy man. If you make $40,000 and you have a one-time capital gain of say 100,000 on the sale of a home or something else and you, therefore, have earned $40,000 in income and then you have this capital gains of 100,000, they say, see, you are a wealthy person, you made $140,000. And they put you on that equation of $140,000. [[Page H 10479]]

Mr. SHAYS. I just would love to make sure that we just establish the arguments that are being made and whether they are credible. First, we are not cutting Medicare. We are allowing it to grow significantly per beneficiary over 40 percent a year. The second argument is that somehow the tax cut is related to what we are looking to do to save, strengthen Medicare. There is absolutely no relationship. The next argument they make is they say we are increasingly co- payments, which simply is not true. Co-payments remain the same. They say we increased deductibles. That simply is not true. The deductible remains the same. Then their argument is that we increase premiums. We are keeping premiums in fact at 31.5 percent, and 7 years from now they will stay at 31.5 percent. As health care costs grow, that 31.5 percent will cost slightly more as it has during the last 7 years. There has been that growth. So what gets us into this is the exciting fact that we have an option beyond, you can say, in this fee-for-service program. You are not being forced out. No new co-payment, no new deductible, no increase in premium, no relationship between our effort to slow the growth in spending in the tax cut. In fact, no cut in this program, an increase. And it gets into this extraordinary opportunity we have with Medicare- plus.

Mr. SHAYS. Is it true that you will be forced to get out of your fee- for-service program?

Mr. SHAYS. But they do not have to.

Mr. SHAYS. The distinguished gentlewoman from Connecticut is an expert on this issue.

Mr. SHAYS. If the gentlewoman would yield, I would just love to emphasize again because we just continually, I think, need to based on what was said on the other side of the aisle. Any senior who wants to can stay in their traditional fee-for-service and have the same doctors they have presently, and I want to continue to make the point that they are never taken out unless they choose to be transferred to a private plan. Now I just think there is one cautionary element that we need to make, especially coming from our area. It is probably going to be easier for people in the Boston, and New York, and Miami area to see greater opportunities in private health care plans. I suspect in an area like Oklahoma they may not see all the same ability to get some of those plans because we are dealing with high-cost areas and low-cost areas, and we have not yet fully resolved that issue, but I think we are on the way to doing that.

Mr. SHAYS. What I think is exciting is that, you know, we are affecting the hospitals and doctors, and we are asking them to deal with lesser payments in some instances, but on the other hand we are also allowing them to compete directly with HMO's, directly with insurance companies, and provide their own organization of health care, and I have heard from so many doctors and hospitals that they feel they can reduce costs significantly and provide extra benefits to attract people into that system, and I think it is very exciting that we are allowing that to happen.

Mr. SHAYS. If the gentleman will yield, and then I would like to yield to the expert on this very issue, my committee and the Committee on Government Reform and Oversight, the Subcommittee on Human Resources and Intergovernmental Relations, has conducted a number of hearings on health care fraud. We have learned incredible misuses, finding people who have been kicked out of the system, but they continue to be able to do business with the government. We know of agencies that have been fined $150 million because they have been so crooked, different organizations, but they are still allowed to participate. That is one of the things we are pressing our government to start to put an end to. More importantly, we are learning the incredible fraud that exists and the failure to really get at it with some strong laws. One of our efforts has been that the gentleman from New Mexico [Mr. Schiff] and I have introduced legislation that was incorporated into our Medicare bill. I thought the gentleman from New Mexico could describe that a bit.

Mr. SHAYS. I think the gentleman really needs to get into the whole criminal side. We have only about 5 minutes left before we lose our time.

Mr. SHAYS. That is $50 billion of your 270. I would love just to weigh in and say that we as a Republican majority have three basic desires to accomplish during the course of the next 2 years: We want to get our financial house in order and balance the budget. We want to save our trust funds, particularly Medicare, and we want to transform the social and corporate welfare state into an opportunity society. Today, we began that journey very significantly in our effort to save and strengthen and preserve our Medicare trust fund, and we did it by allowing this program to continue to grow. We are going to put $1.6 trillion in in the next 7 years, and spend $73 billion more than in the past 7 years. I will turn to my colleague, if he could just conclude.

Mr. SHAYS

Mr. SHAYS. Mr. Speaker, we all feel very strongly about this issue, whether you are Republicans or Democrats, and we have our disagreements. We, as Republicans, have 3 general goals that we intend to pursue during the course of this year and next. One is, we want to get our financial house in order and balance our Federal budget. Our second is, we want to save our trust funds, particularly Medicare. And our third is that we want to transform and change our social, corporate and farming welfare state into an opportunity society. That is what we want to do. Addressing primarily the need to save our trust funds, our trust fund is going bankrupt in 7 years. It starts to become insolvent next year. I know this has happened in the past. When it has happened in the past, we have sought to do it by increasing taxes, primarily in Medicare part A. It is the payroll tax. The last time around, we increased the Social Security tax from 50 percent to 80 percent of income, and that money, $29 billion over the next 7 years, is going into the Medicare part A trust fund. We have four ways to save the trust fund. We can increase taxes. That is simply not going to happen. We can affect beneficiaries, we can affect providers or we can change this system. We are primarily saving this trust fund by affecting the providers and changing the system. My colleagues on the other side of the aisle have made up a plan that does not exist which we then have to defend ourselves against and clarify to our constituents. Our colleagues on the other side say there are increased co-payments, in fact new co-payments. That is simply not true. Our colleagues on the other side of the aisle say we have invented new deductibles and increased the existing deductibles. That is simply not true. Our colleagues on the other side of the aisle say that we have increased premiums. We are going to keep premiums at 31.5 percent. The taxpayers will continue to pay 68.5 percent. We have made one change to the premium. It is surprising that my colleagues on the other side of the aisle do not agree this makes sense. We think the wealthiest should pay more, so we have an affluence test. If you are single, you start to pay more for Medicare part B. From $75,000 to $100,000 you pay all of Medicare part B premium. If you are married, from $125,000 to $150,000, you start to pay more. At $150,000, you and your spouse will pay the full Medicare part B premium. That is an increase in the premium only to those who are most wealthy. I have to tell you, I represent one of the wealthiest parts of the entire country. I have gone to my constituents and said, if you have this kind of income I think you should be paying an increase in the premium. But it is only the wealthy. So when I hear my colleagues on the other side of the aisle talk about how we want to have tax cuts for the wealthy, somehow they do not want to have the [[Page H 10304]] wealthy paying more for Medicare part B. I think they should. We are not affecting beneficiaries. We are changing the system. How are we changing the system? We are allowing Medicare Plus, we are allowing people to stay in Medicare as they want it now, that typical program, or they can go into any other host of other new programs. They can go into the private sector. And they can choose to if they want to, but if they do not want to, if they are silent, they do not ask to go into the private sector. They simply remain on Medicare as it exists today, a 1960's system, inefficient, you can choose your own doctor, you can stay there, or you can be attracted over into the private sector and possibly have your premiums reduced, your co-payments reduced, your deductibles reduced and possibly eye care, dental care or prescription drugs. All of those may attract you to leave what you have now. But you can stay. But if you want to pay less, you can get into the private system. I have heard the reference of saving $270 billion. On Medicare in the next 7 years, we are going to spend $1.6 trillion, as opposed to the last 7 years where we spent $900 billion. We are going to spend over $600 billion more in the next 7 years than we spent in the last 7 years. That is going to doctors. It is going to hospitals. It is going to, candidly, those who run the systems. It will go to a whole host of different people. We are going to put 54 percent more into the system. We are going to have the individual payment per beneficiary go from $4,800 to $6,700. Only when you spend more and only in Washington when you spend more do people call it a cut. It is not a cut. It is a significant increase. I just make this last point. As it relates to Medicaid, our colleagues on the other side of the aisle have pointed we need to deal with spousal impoverishment, and we are in our bill. The gentleman from New Mexico [Mr. Schiff] has put forward an amendment with me that deals with the criminal statutes. We are going to make it a Federal offense. It is in the rule, a self-enacting rule, and the bill of the gentleman from New Mexico [Mr. Schiff] and my amendment will pass, if the rule passes, that will make health care fraud a criminal Federal offense.

Mr. SHAYS

Mr. SHAYS. I would love to just emphasize that point. I had more constituents who said, I want the same kind of choices you have, Mr. Congressman, hopefully they call me Chris, but the bottom line is, they are saying as a Federal employee I get to choose a wide range of programs. I have to pay 28 percent of health care costs. But I can choose any kind of program. I can choose one that is more expensive, less expensive and so on. I just want to emphasize, the gentleman from Florida is right on target. We are doing what our constituents have asked: Give us the same kind of choices you have.

Mr. SHAYS. I would just like to say, if I could, I compliment the President on one issue. He said to the American people, we need to deal with health care. It was a big wake-up call for a lot of Members of Congress. And what the President did is set in motion a number of us, if not all of us, giving this our number one priority and studying this issue tremendously. And so for that, it has been extraordinarily helpful because this is not something we just started working on. You started and others and my colleagues started well before the President asked, but the general bottom line is that we have been working on this health care issue for over 3 years now and we think we have come to a plan that the American people really will find is what they want.

Mr. SHAYS. Let me get this straight. So if a private plan, when the private plan steps forward, they have to tell and make sure that their health care plan covers everything that Medicare presently does plus. I do not know if the gentleman from Florida was the one who had thought of the name of Medicare plus, but it is such an apt description of what our health care plan does. It allows them to have their existing health care plan plus.

Mr. SHAYS. I wonder if the gentleman would yield again. I want to point out that we are a family in this place, in terms of our desire to take on some very tough issues. I have been here 8 years, and this is the first time we have had an honest dialog with our constituents about the need to deal with entitlements and control their growth. Slow the growth. Allow them to grow faster than any other part of the Government, but to slow the growth and to make some very necessary spending reductions in domestic spending. We have been very honest to say that we have to get our financial house in order and balance the budget. That is our first task. Our second task is to save our trust funds, particularly Medicare, which the gentleman from Florida [Mr. Miller] has focused so eloquently on. And our third task is to change the social corporate welfare state into an opportunity society. We are going to do our best to save this American civilization and have a society where people can prosper.

Mr. SHAYS. I wonder if the gentleman would continue to yield, so that I can point out and use real numbers. One of the points I want to make, and the gentleman from Florida, I think, represents an extraordinary number of senior citizens and your input, as in my work, as we have worked together on the Committee on the Budget on Medicare and Medicaid, has helped shape this plan, and that plan has been shaped by what we have been hearing. My constituents have said, I have to keep my own doctor. Done. I have had other constituents say I want some choice. Done. I have had other constituents say I would like the opportunity for plans to give me eyeglass care or dental care. Done. Or prescription drug care. Done. I have had other constituents who have said I want the opportunity to have a medical savings account and to buy only catastrophic care. Done. I mean we have been listening. That is not the way our plan started out. It has been shaped by the constituents we represent. Now, I have had a number of constituents, I have had, candidly, I went to a funeral last night, where the member who passed away was a member of the Republican town committee. And I had one of my best supporters walk down the stairs and say, ``Don't you dare. Don't you dare make any change in my Medicare plan.'' I said, ``Tell me what are you concerned about.'' She said, ``I am concerned you are cutting my medicare plan.'' I said, ``Well. We are allowing it to grow at 6.3 percent.'' ``No, I heard you were cutting. I heard this from the AARP.'' I said, ``We are [[Page H 10133]] slowing the growth.'' Then she said, ``Well, AARP told me I cannot have my own doctors.'' I said, ``Well, that is not accurate.'' I said, ``Hold it.'' We just went through the entire plan. And she said, ``If that is the plan, I support it.'' My conviction is that there are a lot of people right now who are being told a lot of things. I have had some of my colleagues go to nursing homes saying nursing homes will be closed next year. I have had some of my colleagues having press conferences with doctors saying they will not be able to have their doctor anymore. None of that is true. Now, what is my conviction in voting for this plan? We have worked on it for an extraordinarily long period of time. We have had the input of so many different people who have told us what they want in the plan, and that is what we are doing. I am absolutely convinced that next year, when people see this plan unfold, and, candidly, that is when I have to face the electorate. I would not want to be so stupid as to do a plan that is unfolded and then does not work. That does not make sense for our country and it certainly does not make sense for anyone that has to go back to the electorate. I am proud to defend and promote this bill when we debate it on Thursday, and I will be proud to defend it and promote it during the course of all next year. And I predict that people next year will say ``What a great plan, and thank you for making sure that I could keep my existing health care, and if I want, I can change it and get other kinds of health care that meet more of my personal needs.''