John Thune

Mr. THUNE

Mr. THUNE. Let me, if I might, enter into a discussion with the Senator from Wyoming because, as he said, his State and my State are not unlike in terms of the composition of population. We have big geographies in Wyoming and in South Dakota and in the West and a lot of rural health care delivery. The primary job creator in places such as Wyoming and South Dakota is small business. Small businesses are the economic engine that creates jobs. As the Senator from Wyoming mentioned, according to many of the analyses that have been done of this legislation, it would be a job killer. It has been suggested by the National Federation of Independent Business that 1.6 million jobs would be lost. What is ironic about that is I have heard our colleagues on the other side repeatedly say this is going to be great for jobs. This is going to be good for the economy. If that is true, then why are all of these business organizations coming out and saying it would increase the cost of doing business and it would increase health care costs? We have that now validated by the Congressional Budget Office, by the CMS Chief Actuary at Health and Human Services saying overall health care costs under this legislation are going to go up, not down, both as a percentage of the gross domestic product as well as for individuals who are going to see it in the form of higher health insurance premiums. I say to my friend from Wyoming, because he and I represent similar constituencies and the economies are similar, although he has--we wish we had more oil and gas in South Dakota along the lines of what they have in Wyoming--but the small business sector is what creates jobs. He mentioned the National Federation of Independent Business. I wish to mention one other letter we received from an organization called the Small Business Coalition for Affordable Health Care. In it they state that these reforms fall short of long-term, meaningful relief for small business. Any potential savings from these reforms are more than outweighed by the new taxes, new mandates, and expensive new government programs included in the bill. This is signed by 50 small business organizations, one of which, by the way, is the American Farm Bureau Association, which is a big presence in my State, represents a lot of farmers and ranchers, small business people, and I am sure represents a lot of members in the State of Wyoming as well as in the State of Texas. I think what they are saying is, what all of these business groups are saying, and that is we don't find anything in this--there may be some good things in it, but we find the overall core elements of this bill to be a detriment to job creation, will kill jobs, and will drive up the cost of doing business in this country. It is hard for me to believe that some of the statements made by the other side--and I assume they are making them with the greatest sincerity, but they are factually wrong. If they weren't, we wouldn't have every business organization in this country coming out and saying we are opposed to this because it is going to increase the cost of doing business, it is going to kill jobs, and it is going to increase the cost of health care. So to our colleague from Texas I would say I suspect she has a lot of small businesses in her State, not unlike Wyoming and South Dakota, that share that view.

Mr. THUNE. I would say to my friend from Texas, it is kind of the same old Washington game, the same old Washington gimmick, the same old backroom deal that has been cut basically that, of course, we have had no input into. Incidentally, there is another now, the latest permutation of this discussion, going on right now behind closed doors, which is the Medicare expansion, which is a subject for a whole other day. But I think the American people are looking at this and saying: How does this impact me? More than anything else, they are watching this big debate in Washington, DC, and saying: How does this impact me? I think what they are concluding is that 90 percent of the American public, according to the Congressional Budget Office, would see their premiums stay the same at best or at worst go up, and when I say ``stay the same,'' that means double the rate of inflation annual increases in their health insurance premiums. So the best you can hope for, if you are an American today, is the status quo when it comes to your health insurance premiums. If you buy in the individual marketplace, your premiums are going to go up 10 to 13 percent above the annual, double the rate of inflation increases that we are currently seeing. So that is what happens to the American public, the average person out there, in terms of their health insurance premiums. If you are a small business, you are looking at tax increases. You are looking at a whole new raft of tax increases that you are going to end up having to pay, which is why all of the small business organizations--the Senator from Texas pointed out the letter from the National Federation of Independent Business, which says this is going to drive the cost of doing business up. This is going to increase the cost of health care, not lower it. What they want to see in reform--small businesses that are the economic engine that creates jobs in this economy--is they want to see health care reforms put in place that drive health care costs down. We know from every estimate that has been done, such as from the Congressional Budget Office--we have some data now from the CMS actuary that just came out yesterday that says overall health care expenditures are going to go up, health insurance premiums are going to go up. So small businesses are looking at higher taxes. If you are a senior citizen in America, and one of the 11 million people who get Medicare Advantage, your benefits are going to be cut. So you have higher premiums, increased taxes on small businesses, Medicare benefit cuts to senior citizens across this country, and cuts to providers, and if you are a young American, you are faced with a $2.5 trillion new entitlement program that you are going to have to pay for. That is what the American people, as they are observing this debate, can expect to come out of this, if the bill that has been proposed by the majority is enacted. That is why we are working so hard to defeat that and put in place some commonsense reforms that actually make sense to the American people. I know the Senator from Wyoming, who is a physician, knows full well the impact of many of these policies from being on the front line. He is someone who has had to deliver health care services in a rural State. So I would ask him to give us his thoughts about what these tax increases and Medicare cuts are going to mean to health care delivery in places such as Wyoming.

Mr. THUNE. That is what our motion would do: Synchronize the tax increases with the benefits. I yield the floor.

Mr. THUNE

Mr. THUNE. Mr. President, the Republican leader has just arrived. I reserve any statement for him.

Mr. THUNE

Mr. THUNE. I say to my colleague and friend from Arizona, that is a 12-percent year-over-year increase and the five bills that have already passed had increases that were in the teens in terms of the year-over- year increases too. I do not know how, when you pass a $1 trillion stimulus bill, much of which was distributed to Federal agencies that are also going to get these year-over-year 12-percent, 14-percent, 15- percent increases in spending, we can justify that to the American taxpayer or to hard-working Americans who are struggling right now to make ends meet and have to balance their family budgets. States are struggling to balance their budgets. But here in Washington, it seems as though it is spend, spend, spend.

Mr. THUNE. There is no question. The one thing that I guess is bothersome is most generations of Americans--your generation, obviously--worked hard, sacrificed so the next generation could have a better life. What we are basically doing is borrowing from the next generation because we have not been able to live within our means. That turns on its head one of the great ethics of America that has served this country so well for generations. Washington, DC, has not learned the lesson that when you borrow money, it has to be paid back, and that you cannot spend more than you take in. Forty-three cents out of every dollar last year was borrowed--all to be put on the bills of our children and grandchildren.

Mr. THUNE. I say to the Senator, one final point I would make is, of all that spending the Senator mentioned--and again the $1 trillion in stimulus money was all borrowed money; that was all added to the debt, will be added to the debt, and is going to be paid for by our children and grandchildren, but the $1.4 trillion the Senator mentioned that last year constituted the Federal deficit means that out of every dollar the Federal Government spent last year, 43 cents was borrowed.

Mr. THUNE. If the Senator will yield for another question, do any of these numbers the Senator is talking about--this 12-percent increase in spending in these seven appropriations bills over the previous year, at a time when families across this country are being asked to tighten their belts, small businesses are tightening their belts; as the Senator said, we have record unemployment--do these numbers include the almost $1 trillion that was spent earlier this year in the stimulus bill?

Mr. THUNE. The Senator mentioned that for these seven bills, the year-over-year increase in spending is 12 percent. Does the Senator from Arizona know what the CPI this last year was?

Mr. THUNE. Will the Senator yield for a question?

Mr. THUNE

Mr. THUNE. I yield back my 5 seconds. I don't have enough time to distribute equally. It would not be fair.

Mr. THUNE. I say to my colleague from Idaho that I support his motion. I hope we get a chance to vote on it. I know right now they are scrambling to find an alternative to put up so they can have something on which to give their side political cover because they know the reason they are trying so hard is because they know this raises taxes. To say with a straight face this does not raise taxes--the American people get this. I think the gig is up. They figured out there are huge Medicare cuts in this bill, huge tax increases in this bill. And as the Senator from Idaho pointed out, when they say these refundable tax credits are going to go back in the form of premium subsidies and there are not that many people who are going to pay, as he pointed out, 73 percent of the people who will get those premium subsidies are people who do not have an income tax liability already. Therefore, it is hard to say you are going to reduce taxes on somebody who does not have an income tax liability. More important than that, there are still 42 million Americans with incomes under $200,000 a year, according to the Joint Tax Committee, who are going to see their taxes go up under this bill. So you literally have millions and millions of Americans under $200,000 a year. And as the Senator from Idaho mentioned, the President's promise was he would not raise taxes on anybody earning under $250,000 a year. This flatly contradicts that, flatly violates that pledge. I cannot fathom anybody coming here with a straight face and saying: Oh, yes, this doesn't raise taxes. Of course it raises taxes. What the Senator from Texas and I intend to do on our motion--and I hope we have a chance to vote on it and the Senator's motion--we will go back to the committee and figure this out. We want to offer a motion that we think makes sense because it aligns and synchronizes the dates of all this. What has happened here, I would say, in a very deceptive way, is they understated the costs of the bill. My colleagues on the floor already alluded to this. They tried to get it under $1 trillion, and in attempt to get it under $1 trillion, they had to come up with budget gimmicks. To illustrate that with a bar chart, we can see in the first 10 years of this bill--starting today and going to 2019--the spending in the early years does not show up much. That is because most of the spending gets put off until January 1, 2014. So if we look at that first 10-year period, the spending under the bill is less than it will be when the bill is fully implemented. When the bill is fully implemented, looking at the years 2014 to 2023, it explodes the spending in the bill from about $1 trillion over the first 10 years to $2.5 trillion over the 10 years when it is fully implemented. The reason they were able to do that is because of this sort of smoke-and-mirrors way of enacting the tax increases immediately and delaying the spending. The American people are going to end up spending $71 billion in tax increases out of their pockets, out of the American taxpayers' pockets, about $600 per taxpayer, before they ever see a benefit under this bill. What the Senator from Texas, Mrs. Hutchison, and I are offering is a motion that would delay the tax increases until such time as the benefits begin. That, to me, seems to be a fair way to go about making public policy. What they have done, in an effort to obscure the overall cost of this bill, is to say that 22 days from now, we are going to raise your taxes. On January 1 of this year is when most of these taxes--the taxes on prescription drugs, taxes on medical devices, taxes on health plans--all the taxes in the bill begin to take effect January 1 of next year. For 4 years, people will be paying taxes out of their pockets. I might add, because of the taxes that are going to go on all the device manufacturers, prescription drugs, and health plans, they will get passed on in the form of higher premiums. They are going to see tax increases and premium increases before they ever see a dollar of benefits. It is 1,483 days until the benefits under this bill kick in. That is unfair. It is unfair to the American taxpayer, it is unfair to the American people, and it is unfair to try to obscure and mask the total cost of this bill and say we are only spending $1 trillion on this bill when we know full well when it is fully implemented, the total cost of that is $2.5 trillion. I appreciate the discussion that is being held here in pointing out the smoke and mirrors, the sort of underhanded way to try to shield the cost of this bill but also to support the Senator from Idaho with his motion that would commit this bill and get these tax increases out of here because the one thing small businesses are saying right now is we want to invest, we want to create jobs. But you cannot raise taxes on small businesses when you want them to create jobs. That is what this bill does. The National Federation of Independent Business, the Chamber of Commerce, the National Association of Wholesalers and Distributors--all the major business organizations--have come out opposed to this bill. The National Federation of Independent Business in a letter yesterday said: We do not support policies that increase the cost of doing business and that raise taxes. Clearly, that is what this bill does. Our motion is very simple; that is, it simply delays tax increases until such time as the benefits begin.

Mr. THUNE. I ask my colleague from Arizona if this is what happens when you end up with one-party rule, one party trying to go this on their own. This seems to be a model of dysfunction in how to come up with a solution to one of the major problems facing the American people, dysfunctional by Washington's twisted standards. They seem to be desperately throwing things at the wall, hoping something will stick. Surely, there has to be a better suggestion coming from the other side than to expand a program that is destined to be bankrupt in the year 2017. It is the equivalent of a ship that is sinking. It is similar to the Titanic. You will put more people on the deck of a sinking ship. Clearly, the overall objective, at least among some, and I think some have been very transparent about it--someone quoted earlier today the Congressman from New York in the other body who said this is the mother of all public options. He went on to say: Never mind the camel's nose. We have his head and neck in the tent on the way to a single-payer system. Obviously, there are people here who want to see a single-payer system, who want to see government-run health care. We don't happen to believe that is the best solution for America's health care system, but the amazing thing about this proposal is, it takes a program that is destined to be bankrupt in a few short years, cuts $1 trillion out of it over 10 years, when fully implemented, and then adds millions of new people into that program. It is hard to come up with any rational explanation for what is going on here, other than that they are left with, in desperation, trying to throw something at the wall, hoping it will stick. Is this typically what happens around here when one party tries to go on its own on something that is this consequential to America? One-sixth of our economy is represented by health care. Essentially, what they are saying is, we want to expand that part of the economy that isn't working today, that is headed for bankruptcy, that underreimburses doctors and hospitals, put more money into that failed system, exacerbate the cost-shift problem by forcing people in the private-payer market to pay higher premiums. It seems like this creates all sorts of problems that make matters even worse. I appreciate my colleague's leadership on this issue of pointing out what inevitably is going to happen. When you have the Washington Post editorial this morning even acknowledging the terrible problems this creates for health care and the way this is being conducted, sausage being made here in Washington, DC. Even by Washington's twisted standards, this process has become so dysfunctional, I don't know how they can recover. One thing they could do is decide to sit down with Republicans and actually figure out some things we could do that would drive health care costs down, rather than making them go up.

Mr. THUNE

Mr. THUNE. Madam President, I wish to speak to a couple issues this evening. The first one has to do with what we understand to be the evolving so-called deal that is being worked out by the other side on the public option/government plan and the attempt to try and reach 60 votes on the other side, in what appears to be a process that continues to unravel and break down because every single day there is a new story about some new gimmick thrown out there to attract the requisite number of Senators to get to that threshold of 60. The most recent one--and, of course, as I said, I cannot verify all of this because we have not been privy or included in any of the discussions that have occurred behind closed doors. In fact, one of those meetings just occurred earlier this evening. We read from press reports that one of the proposals contemplated by the majority to get that requisite number of votes is the expansion of the Medicare Program. What is interesting about that is that has engaged organizations that prior to this time had essentially been at the table and negotiated their own kind of agreement. But that has gotten the interest level up of the American Hospital Association, the Federation of American Hospitals, the AMA, the physician group, and I even have something here from the Mayo Clinic. It is interesting that would be considered now as an alternative to what previously had been discussed in terms of a public option. Here is why. Medicare, as we all know, is destined to be bankrupt in the year 2017. It is a very large program that benefits a lot of seniors across the country. We all support reforming it, making it more sustainable, putting it on a pathway to where it will be solvent well beyond that date and extending its lifespan. What this would appear to do is allow people younger than 65 or 62, down to 55, to buy into Medicare. Essentially, you would allow more people to participate in a program that, as I said before, is destined to be bankrupt in the year 2017. So what you are doing with this proposal--because we all know the underlying bill cuts Medicare reimbursements to hospitals, nursing homes, hospices, home health agencies, and to Medicare Advantage beneficiaries by about $1 trillion over 10 years, when it is fully implemented--you are going to take $1 trillion of revenue out of Medicare--remember, this is a program that is already destined to be bankrupt in 2017--you are going to take $1 trillion of revenue out of it over the 10-year period, when it is fully implemented, and expand and add the number of people who are going to be on it. It is equivalent to putting more people on a sinking ship. In fact, that is what has gotten the attention of provider groups around the country. Hospitals, as we know, cannot recover their costs with the reimbursements they are currently receiving under Medicare. In most States, it varies a little bit--80 to 90 cents on the dollar. So hospitals, every time they serve a Medicare patient, shift that cost over to the private payers and increase costs for everybody who is receiving insurance in the private market. Essentially, what you will be doing is expanding the government-run Medicare Program which underreimburses hospitals, physicians and other health care providers and forcing even more of a cost shift. You are exacerbating the cost shift already occurring, making it worse and getting all the provider hospital groups--the American Hospital Association, the American Medical Association--engaged in this debate because they see what a train wreck it would be for them. Frankly, what that means is you would have a lot of providers that would not be able to make ends meet. They would have to shut their doors and go out of business because many of them are very dependent on Medicare patients. In my State of South Dakota, most of our hospitals, especially in rural areas, are heavily dependent--70 percent or thereabouts--between Medicare and Medicaid. If they are not a critical access hospital and still getting reimbursed under the traditional Medicare Program, they are going to have a very hard time making ends meet because right now what they do is what all hospitals do. They shift costs over to the private payers. Here is what AMA said about the proposal: AMA has a longstanding policy of opposing expansion of Medicare given the projections for the future. That is what the doctors group said. The American Hospital Association urged all Senators to reject expansion of Medicare and Medicaid as part of the public option, saying Medicare pays hospitals just 91 cents of each dollar of care provided. This again would expand the number of people they would have to cover and shrink the private-payer market and lump more and more of the costs on those so everybody else's premiums would go up. The Federation of American Hospitals, which is the private hospitals across the country, said any Medicare buy-in would invariably lead to crowdout of the private health insurance market, placing more people into Medicare. Such a policy will further negatively impact hospitals after we have already agreed to contribute a maximum level to sustainable reductions in the deal they struck earlier. It seems to me these deals have fallen off the table. This latest proposal--if, in fact, what we are reading is true--I think they recognize would be a disaster. Here is what the Mayo Clinic in their letter said: Any plan to expand Medicare, which is the government's largest public plan, beyond its current scope does not solve the nation's health care crisis, but compounds it. They go on to say: Expanding the system to persons 55 to 64 years old would ultimately hurt patients by accelerating the financial ruin of hospitals and doctors across the country. A majority of Medicare providers currently suffer great financial loss under the program. Mayo Clinic alone lost $840 million last year under Medicare. As a result of these types of losses, a growing number of providers have begun to limit the number of Medicare patients in their practices. That is what we are talking about. If you expand this program and you have a reimbursement system that currently does not cover the cost of hospitals, they are going to cease covering Medicare patients in the same way they currently are not covering Medicaid patients. They say about 50 percent of physicians today have chosen not to accept Medicaid patients. So you compound the access problem that many people in rural areas already experience. There are big problems with this proposal. I have to come back to what Congressman Anthony Weiner said about this issue: Extending this successful program to those between 55 and 64, a plan I proposed in July, would be the largest expansion of Medicare in 44 years and would perhaps get us on the path to a single payer model. Therein, I think, lies the ultimate goal, and that is to expand Medicare to where we have a whole government-run health care system in this country on the way to single-payer status. That is precisely what many of our colleagues on the other side want to see happen. Ironically, there are some who have expressed concern about this. Our colleague from North Dakota, the chairman of the Senate Budget Committee, Senator Conrad, said when asked about this proposal: It's got many of the same problems I have with previous versions of the public option. That then ties you to Medicare levels of reimbursements for a whole new population. He contended that the hospitals in his State would go bankrupt. His State of North Dakota is not unlike my State of South Dakota. Hospitals are not going to be able to make it if these reimbursement levels that are currently afforded them under Medicare are extended to a whole new population. I hope this is a bad idea that is just being thrown out as one of these things that is being thrown at a wall and hoping it sticks in a desperate effort to get to 60 on the other side because this is a bad idea and the provider groups are weighing in heavily against it. It is pretty clear it would be a disaster for health care delivery in rural areas of the country and, for that matter, Mayo Clinic and many of the providers that weighed in on this. It would literally make it more difficult for people to have access to health care and exacerbating the cost-shifting issue that already exists with regard to the private-payer market and make their costs and everybody else's costs go up more. I want to shift gears for a moment because tomorrow Senator Hutchison and I will be offering a motion to commit. Basically, what it deals with is the whole tax component of this health care reform bill. In very simple terms--and I will demonstrate exactly why this is a relevant issue--if you look at the cost of this health care proposal, the Reid proposal before us, you can see what the costs are in the early years and then you can see how the costs explode in the outyears. There is a reason for that. The revenues kick in right away. The tax increases start coming in right away, but the spending proposals and many of the benefits that will go out under this bill don't occur until much later. So what we have is a 10-year budgetary picture and cost for this program that completely understates what the true cost of the program is. If you look at this particular chart, look at the years 2010 to 2019, you can see how, particularly in the early years, it doesn't look like there is that much spending. In fact, the number in the first 10 years is $1.2 trillion in spending. However, if you look at the cost of this when it is fully implemented--take the year 2014 and extend it through the year 2023--you can see how the costs explode, and the total fully implemented cost over a 10-year period is $2.5 trillion. There is a reason for that, as I said. A lot of budgetary gimmicks were used to understate the cost, particularly in the first 10 years, so people could say it costs only $1 trillion. In fact, as you can see, when it is fully implemented, it is $2.5 trillion. One of the major reasons for that is because the tax increases in the bill take effect 23 days from now--January 1 of the year 2010. That is when many of the tax increases in this legislation go into effect. But the spending and the benefits that are going to be distributed--the exchanges and the premiums, the premium subsidies, and that sort of thing, the tax credits--don't begin to kick in until the year 2014 or 1,484 days later. So for those 1,484 days--well, back out the 23 days from that-- so for those 1,461 days, taxes are going to be assessed and levied against people in this country--on small businesses, families, and individuals--but you will not see any benefits for over 1,000 days, almost 1,500 days. What the Hutchison-Thune motion to commit does is it aligns the tax increases, the fees--the taxes included in this proposal--with the benefits in terms of timeline so that the tax increases and the benefits occur at the same time. In other words, we would delay the tax increases in this bill until such time as the benefits package and structure would kick in so that they are in sync. Right now, there is essentially 4 years--at least 4 years--of tax revenues coming in, tax increases being borne by people all across this country, including businesses. Incidentally, there is a lot of discussion now about job creation and the need to grow the economy. The worst thing you can do to small businesses, when you are trying to create jobs, is to levy new taxes on them. But that is what this bill does. And, by the way, in that first 4 years, almost $72 billion of taxes will be collected. I say the first 4 years, I think that is through the year 2014. But you have all these taxes that kick in on January 1 of 2010--less than 23 days from now--and then actually you have this amount of time--as I said, almost 1,500 days--before the benefits begin to pay out. So all we are saying in our motion to commit is let's align the tax increases and the benefits structure so you don't have this period of 4 years where people are paying taxes and receiving literally no benefits under this health care reform bill. The advantage that has is that it accurately reflects the cost of this program in the first 10 years, rather than understating it because of the revenues that kick in immediately and the benefits that don't kick in until much later. It is very straightforward, very simple, very understandable. Tax increases that are designed to kick in on January 1 of this next year would not kick in until such time as the benefits kick in. So the fees, the taxes, and the tax increases in this bill are all aligned and sync'd up, so to speak, with when the spending under the bill begins. Of course, what that does is give us a more accurate reflection of the overall cost of the bill. And many of these tax increases which will kick in 3 weeks from now, or a little over 3 weeks from now, on January 1 of next year, are going to be distributed across a wide range of businesses, but most will be passed on to consumers across this country. In fact, the CBO, in a letter to Senator Evan Bayh on November 30 of this year, said essentially that all these fees and taxes in the bill--and there are fees on medical devices, there are fees on prescription drugs, there are fees on health care plans--all these fees would tend to raise insurance premiums. In testimony in front of the Finance Committee, the CBO, when this question was posed during the deliberations at the Finance Committee level as to what all these fees would do to insurance premiums, they said, roughly, it would increase premiums dollar for dollar. So we have the taxes and fees that will kick in immediately, and that will have an upward impact on premiums so that people across the country will begin to see those premium increases take effect. The tax increases, of course, are taking effect on medical device manufacturers and on prescription drugs, and there is a whole other range of taxes in here--there is the tax on high-cost insurance plans, there is a health insurer fee, there is a Botox tax, which starts January 1 of 2010, and you can kind of go down the list. There are limits on FSAs, flexible spending accounts, which is something people use to put aside money so they can buy a high-deductible plan and have dollars available to deal with the incidental health care costs they have. So the taxes are going to go up on those. You can go through this whole list of taxes, all of which, as I said, are going to go into effect in the near term, but none of the benefits kick in until many years later. Unfortunately for the American public, they are going to see the premium increases that will come as these taxes are imposed on all these various sectors of the health care economy and which will all be passed on to consumers in the form of higher premiums. So the American consumer--the American public, the taxpayers of this country--are going to see the costs immediately and won't see the benefits for 5 years. That is not fair. It is not the right way to set policy here in Washington, DC. It is much more transparent if we have these dates of the tax increases and the fees and the taxes in this bill sync'd up-- synchronized, aligned--with the benefits when they begin so that everything starts at the same time. So the motion to commit is, again, simply a motion to commit this back to the Finance Committee, and to create a level playing field where the revenues that are raised under the bill don't begin to kick in until the benefits start to kick in and the spending starts to kick in. That will give us the true picture, the actual picture of the cost which, as I said before, is $2.5 trillion over 10 years when it is fully implemented, and not the $1 trillion, or under $1 trillion that is being used by the other side. You have to look at the full picture over a 10-year period, when it is fully implemented. Obviously, that gives you a very different perspective about the overall true cost of this particular proposal. The basic contours of this bill we have in front of us have not changed, nor do we expect them to change. They will tweak around with this government plan. There was already a vote on the issue of abortion, which I happen to believe taxpayer funds should not be used to finance. We have had that vote. There will be some other votes on individual aspects. But some of those things are not going to affect the fundamental core elements of this plan, which have stayed the same throughout the entire process. And those core elements are a massive expansion of Federal spending--$2.5 trillion over 10 years when it is fully implemented--massive cuts to Medicare--about $1 trillion over 10 years, when fully implemented, affecting hospitals, nursing homes, home health agencies, hospices, and beneficiaries of Medicare Advantage, of which there are about 11 million across the country--and it is also financed with increases in taxes, which I have mentioned. Those are the basic components of this bill. Seventy new government programs are called for. All the new spending, all the new bureaucracy, all the new taxes, and all the Medicare cuts, those things have not changed since this bill first started being debated several months ago. That is where we are today. That is why I believe this is such a bad proposal for the future of this country. Because even after all that, if you look at the impact it has on premiums, according to the Congressional Budget Office, 90 percent of Americans end up the same or worse off. When I say the same, I mean year over year increases in their insurance premiums that are double the rate of inflation. So if you are buying in the small-group market today, or the large-group market, according to the Congressional Budget Office, you are going to see your insurance premiums continue to go up over time. If you buy in the individual market, you are going to see them continue to go up, but way more--a 10- to 13-percent increase in premiums for people who buy in the individual marketplace, above and beyond the rate of inflation that will impact people in the large- and small-group markets. So the bottom line is, if you are looking for reform, if you are the average American citizen out there, the person I represent in South Dakota, who is hearing about health care reform, to them it means a couple of things. It means affordable access to health insurance for people across this country; and something that most of us--at least here on our side--think ought to be a part of this, and that is measures or proposals that actually bend the cost curve down rather than up. But what we have seen consistently throughout the course of this debate, with all the spending and all the tax increases and all the Medicare cuts, is no positive impact on premiums. The best that 90 percent of Americans can hope for is to maintain the status quo--stay where you are--which is double your increases year over year, double the rate of inflation in your health insurance premiums or, worse yet, increases of 10 to 13 percent above and beyond that. That is what 90 percent of Americans are looking at as a result of the health care reform proposal that is currently before the Senate. There is a better way, and we believe the way to get this right is to start over and to actually focus on solutions that will drive down the cost of health insurance, that will bend that cost curve down, such as interstate competition, allowing pooling for small businesses, medical malpractice reform. We have a whole series of things that we think represent the consensus view of the people in this country. There is common ground we can all stand on. But regrettably, we have not been included in any of the discussions, nor have any of our ideas been a part of those discussions. Rather, they have chosen to pursue this course of a big spending program, with the higher taxes, and the Medicare cuts and the higher premiums. I truly hope there will be support, as this process moves forward and we get onto the critical votes ahead of us, for a more rational step- by-step approach, doing this right, getting away from this huge massive expansion of the Federal Government here in Washington, DC, and seriously focusing on solutions that actually do bend the cost curve down, that don't rely on these huge cuts to Medicare, that don't rely on these huge tax increases, but that actually find savings. And they can be achieved in the market by putting policies in place that will constrain costs and put downward pressure on the prices most people pay for health insurance in this country. It can be done. But it is going to require some boldness on the part of some of our colleagues on the other side. I think our side is pretty well united. This is a bad policy, a bad prescription, if you will, for America's future. But we are going to need some help from a courageous Democrat or two to make sure this massive expansion of the Federal Government is defeated and that we can go back, start over, do this in a step-by-step way--the right way--and in a way that actually does lower costs for people in this country. I certainly think that is what my constituents in South Dakota expect, and I think that is what most Americans expect. They deserve to have health care reform that gives them that outcome--lower cost and access to affordable health care. Mr. President, I yield the floor, and I suggest the absence of a quorum.

Mr. THUNE

Mr. THUNE. Mr. President, today I recognize Kenneth Christopher Satterlee, an intern in my Washington DC, office, for all of the hard work he has done for me, my staff, and the State of South Dakota over the past several months. Kenny is a graduate of La Jolla High School in San Diego, CA. Currently he is attending the American University, where he is majoring in history. He is a hard worker who has been dedicated to getting the most out of his internship experience. I would like to extend my sincere thanks and appreciation to Kenny for all of the fine work he has done and wish him continued success in the years to come.

Mr. THUNE

Mr. THUNE. If the Senator will yield----

Mr. THUNE. That is what Stupak and other Members of the House of Representatives saw; that this created tremendous ambiguity and they sought to tighten it up and reinstate the longstanding policy regarding Federal funds and their use to finance abortions since 1977, the Hyde language. The Stupak amendment to the House bill passed with 240 votes. There was a sizable, decisive majority of Members in the House of Representatives who saw through what the ambiguity was that exists regarding the House bill and now the Senate bill. This is intentionally ambiguous for the reasons you mentioned. This simply clarifies, once and for all, what has been standard policy at the Federal level going back to 1977. As the Senator stated earlier, I believe it represents the consensus view in America of both Republicans and Democrats who believe this is ground we can all stand on, irrespective of where people come down on this issue; that the idea that somehow Federal taxpayer funds ought to finance abortions is something most Americans disagree with. That is why there has been such broad, bipartisan support for this particular policy, and that is why it should be extended into the future. As the Senator from Utah said, 61 percent are against funding abortions. But I have seen polls that suggest it is much higher than that. I know it is much higher in my State of South Dakota. I commend the Senator for seeing his way to offer an amendment that clarifies and removes all this ambiguity and what, to me, is clearly an intentional ambiguity regarding this issue and the underlying bill.

Mr. THUNE. Before the Senator leaves, I wish to put one fine point on something the Senator said in response to the question from the Senator from Pennsylvania about the use of Medicaid funds in the States. There are a number of States that do provide programs that have abortion funding, but I think there is a very clear distinction that needs to be made in Medicaid funds which are matching funds, and none of those funds can be used to fund abortions. You said that in response to his question, but I think that point needs to be made very clearly because the Senator from Pennsylvania was implying that somehow, since States have created programs to fund abortions and since Medicaid is a Federal and State program, that somehow those two are being mixed, and that this idea that because they are calling for ``segregation,'' that really doesn't exist in the Medicaid Program. The Medicaid Program--those are matching funds--is a Federal-State program. The Federal dollars that go into the Medicaid Program--the prohibition that exists on Federal funding of abortions applies to Medicaid dollars that go to the States, to the degree that States have adopted programs that fund abortion. Those are State funds and not Medicaid funds, which are matching funds.

Mr. THUNE

Mr. THUNE. It strikes me that the Senator's amendment is very straightforward, very simple, and very clear; that is, any savings that come out of the Medicare Program cannot be used to fund a new entitlement program.

Mr. THUNE. Will the Senator yield for a question?

Mr. THUNE. The Senator from Wyoming is correct. This is where the real rub in this bill comes into play because what we were told and the promises that were made--of course, many promises were made throughout the course of the campaign, many of which will never be realized with this legislation. There was also a promise made that taxes wouldn't go up for people making less than $250,000 a year--not payroll taxes, not income taxes, not any kind of taxes. In fact, we now know that 38 percent of the people who make under $200,000 a year are going to see their taxes go up under this legislation. So promises made during a campaign season tend not to necessarily be adhered to when it comes time to legislate and actually follow through, and I think that is clearly the case here. With regard to the question of the Senator from Wyoming, the whole purpose of health care reform, at least as I understand it--and I think, for the most part, as the people of South Dakota whom I represent understand it--is to lower cost. Because everybody complains--the thing you hear the most when you go home--and the Senator from Georgia is here. If you go to Georgia, Wyoming, South Dakota, I think the sentiment you hear most frequently from people in our States is: Do something about the cost of health care. We have these year-over-year, double-digit increases or increases that are twice the rate of inflation, and we are dealing with this. Small businesses are dealing with it. More and more people--families are struggling with the high cost of health care. Nobody argues that. We all, basically, accept the premise that health care costs have been going up and health care reform ought to be focused directly on trying to get those costs under control. The irony in all this is, after cutting $\1/2\ trillion from Medicare in the first 10 years, and if you go into the fully implemented time period it is about $1 trillion, and $\1/2\ trillion in tax increases, what happens with premiums? Well, according to the Congressional Budget Office, 90 percent of Americans would be the same or worse off. In other words, 90 percent of Americans would see no improvement in their health insurance premiums. In fact, if you buy in a small group market, if you buy in a large group market, your premiums go up by about 6 percent a year, year over year. In fact, a family of four--let's put it in a perspective that an American family can understand. If you are a family of four--this is according to the Congressional Budget Office-- that is paying $13,900 for insurance this year and you are getting your insurance in a large group market because you work for a large employer, in 2016, your insurance cost is going to be over $20,000 a year. In other words, your insurance is going to go up about--a little under $14,000 to over $20,000 a year in that time period. So what American in their right mind is going to say that is reform? I think most Americans are going to say: What are you doing? You are spending $2.5 trillion, you are raising my taxes, and cutting my parents' or my grandparents' Medicare benefits, for what? So my premiums can stay the same or go up? If you buy your insurance in the individual marketplace, your insurance premiums, according, again, to the Congressional Budget Office, are going to go up anywhere from 10 to 13 percent a year. So you get Medicare cuts, you get tax increases, and for 90 percent of Americans, you stay the same or are worse off. In other words, your insurance premiums are now going to be impacted, you have achieved the status quo or, worse yet, your insurance premiums are going to go up 10 to 13 percent if you are buying in the individual market. That is according to the Congressional Budget Office. So I would say to my friend from Wyoming, the point he made is exactly right. In doing all this, the exercise ought to be about reducing costs. Clearly, that is not the case with this legislation.

Mr. THUNE. If the Senator will yield, the Senator, of course, is one of only two physicians in the Senate and has great experience and great depth on this issue and knows what it is like to serve and provide health care services to people in rural areas, such Wyoming and South Dakota and some areas of Georgia. I think it is interesting too--and the Senator from Georgia was here, as was I; I don't think the Senator from Wyoming was here at the time. But in 2005, we had a debate about Medicare, and the Senator from New Hampshire proposed cutting $10 billion in Medicare, taking $10 billion over a 5-year period or about $2 billion a year, and paid for it by income testing the Part D benefit that people got. In other words, the premiums that are paid, those who are in the higher income categories would have to pay a higher premium for their Part B drug benefit than would those in lower income categories. You would have thought that the apocalyptic pronouncements and predictions around here about what that was going to do for Medicare: $2 billion a year or $10 billion over 5 and you heard the other side describe it as immoral, it was cruel, it was a disaster of monumental proportions. That was some of the terminology that was used around here at the time. That was for $10 billion over 5 years, and that basically was to say to people who have higher incomes, the Warren Buffetts of the world ought to pay a little bit more for their prescription drug benefit under Medicare than those in lower income categories, and people on the other side went nuts about that. Now here we are talking about cutting $465 billion over a 10-year period, $1 trillion over 10 years, when it is fully implemented, and it seems to me, I would say to my colleagues, the other side is going to have a lot of explaining to do to the American people about why $10 billion in reductions was immoral, cruel, and a disaster of monumental proportions, but cutting $\1/2\ trillion out of home health care and nursing homes and hospitals and everything else to pay for an entirely new entitlement program, a $2.5 trillion expansion, somehow makes sense.

Mr. THUNE. So if a Senator on either side of the aisle, a Republican on this side or a Democrat, was serious about protecting Medicare, ensuring that Medicare's solvency is protected and that these funds are not going to be reallocated to create some new entitlement program or spend money on some new, clearly, $2\1/2\ trillion expansion of government, which we know is going to require enormous amounts of revenue which seems to me has to come from somewhere--what the Senator's amendment would do is simply force the other side to put up or shut up with regard to this argument they have, which is that they are, in fact, supporting Medicare; the Senator's amendment would essentially say, very clearly, in a very straightforward way, that funds that come in out of savings from Medicare have to be retained in the Medicare account.

Mr. THUNE. Correct. And it seems to me, at least, that the amendment gets at what some on the other side have argued, with their amendments, they are trying to accomplish. Could the Senator from New Hampshire describe how the effect, the legal effect, of his amendment differs from, say, for example, the votes we have had, where it was a 100-to-0 vote the other day on a Bennet amendment, what the impact the amendment of the Senator from New Hampshire would be relative to some of the previous votes we have had, which it appears to me, at least, were completely meaningless, sort of cover votes, to try and give people on the other side the opportunity to say: We voted to protect Medicare, when, in fact, they did not? How is the amendment of the Senator from New Hampshire distinguished from those that have been voted on previously?

Mr. THUNE

Mr. THUNE. I think the reason we are here today is that the Ensign and Gregg amendments strike at the very crux and the very core and the very heart of what this is all about. The Democratic majority was unwilling to take on the trial lawyers, unwilling to do things that actually bend the cost curve down, such as capping contingency fees, and so now we are faced with voting on the Ensign amendment, which would do that, but we are also voting on the Gregg amendment because they weren't willing to put actual measures in this bill that would bend the cost curve down. What they have had to resort to is cutting Medicare to pay for it. A $2.5 trillion expansion of the Federal Government has to be financed somehow, because there aren't any real cost-saving measures in here. I point out to my colleagues that in spite of all that, this is where we are. The Congressional Budget Office says that even with the all of the Medicare cuts and all the tax increases that are in here, we actually still increase spending in this country on health care. The cost curve goes up. The blue line on this chart represents the existing cost curve if nothing is done. If we did nothing today, that is what would happen. That is the blue line. The red line represents what happens under this bill. We actually raise the cost curve even more. Costs for health care in this country under this legislation go up $160 billion. How does that affect the individual family? I want to show you exactly what this means in terms that I think most Americans can understand. This is the example of a family of four who today is paying $13,000, a little over $13,000 for their health insurance. Under this bill, their life doesn't get any better. In the year 2016, they are going to be paying over $20,000 a year in health insurance. So what happens is they have locked in the status quo. And that status quo is year over year increases, double the rate of inflation, all because they were unwilling to put measures in this bill that actually do control costs. If we did something along the lines of the Ensign amendment, that actually would get these contingency fees under control. We all have seen the statistics. The CBO has said that would bend the cost curve down. We have all talked to physicians in our own States. I talked last week to a physician from my State who, unsolicited, said that 50 percent of the tests he does are to avoid being sued. Fifty percent of the tests he conducts are due to defensive medicine. That drives the cost of health care up for everybody. That is why the Ensign amendment is so important. Unfortunately, why we have to vote on the Gregg amendment is because the Gregg amendment forces the Democrats to put their money where their mouth is and to see if they mean what they say--that they want all these savings in Medicare to go into Medicare. We all know that is not true. To pay for a $2.5 trillion expansion of the Federal Government and create an entirely new entitlement, you have to take the cuts from Medicare and put them into this new entitlement program. So we are voting on a couple of amendments today that will ensure seniors in this country are not going to be faced with cuts to their benefits--home health care, nursing homes, hospitals, all those that receive cuts in this bill--and actually try to substitute something in there that would get costs under control, and would--according to the CBO--drive the cost curve down; would do something about this year over year double the rate of inflation that the average American family is seeing. This is what the CBO said would happen to the average American family of four if this bill passes. Today they are paying $13,000 a year--a family of four--and in the year 2016, they will be paying $20,000 a year. Tell me, how is that reform? How can anybody go to an average American family with a straight face and say they are reforming health care when all they are doing is locking in permanently year-over-year increases that are double the rate of inflation, and in some cases even going up beyond that if you have to buy your insurance in the individual market? I am glad the Senator from Nevada has offered this amendment. I am anxious to see how the other side votes on the amendment the Senator from New Hampshire has offered which would guarantee these Medicare savings would go back into Medicare and not be used to pay for a new government entitlement program at a cost of $2.5 trillion to the American taxpayer.