Ron Wyden

Mr. WYDEN

Mr. WYDEN. Mr. President, tonight the United States Senate accepted an amendment that I wrote with the distinguished senior Senator from West Virginia, Mr. Byrd, to require accountability and independent oversight on the ``contracts for reconstruction and other services in Iraq that are funded in whole or in part with funds that are made available by the Department of Defense.'' This requirement is long overdue. Too much money is moving right now out of public coffers into private hands without adequate assurance that those hands have won the contracts fairly. Suffice it to say, the sums of money involved are staggering. The latest issue of Newsweek magazine says: $1 billion a week, and that's the lowside. So much for ``self-sustaining'' reconstruction. The head of Iraq's State oil marketing organization thinks ``the United States is dreaming if it believes it will be able to finance the reconstruction with oil money alone.'' I was particularly troubled several weeks ago because, in the New York Times magazine, there was a feature length article describing the letting of a multibillion-dollar oil field contract to Kellogg, Brown and Root. That contract was sole source, meaning that Kellogg, Brown won it without having to compete at all. But now it appears that Kellogg, Brown and Root actually developed the Army's plan for the oil field restoration effort, and then was awarded the contract to carry out the plan, almost automatically. I think it is important to be clear. This process essentially allowed an incumbent contractor to identify the criteria for a multibillion- dollar contract and virtually ensured that it would be awarded the contract without competition. The inside track doesn't peter out there. Under the auspices of an even larger, incredibly lucrative contract with the Army, Kellogg, Brown seems to have written the Army's so- called contingency plan for rebuilding Iraq. If the news reports are correct, then the potential for sole-source custom-crafted contracts is practically guaranteed by Kellogg, Brown's agreement. The Department of Defense recently announced that it is going to go back and solicit bidding for the oil field contracts. So, in a sense, that ends the original controversy, the original contract that I was so concerned about with Kellogg, Brown and Root. But the American people deserve to know whether, in reletting this contract, the Department of Defense has finally acknowledged a problem with the original agreement and the contract processes that are being used today. The American people deserve to know whether the Department of Defense, on a regular basis, is letting other contracts to other companies in this fashion. The American people deserve to know whether the Department of Defense intends to continue this practice where it has not yet been discovered. If individual contractors are customarily setting the criteria for the work they plan to pursue, it seems to me there are serious conflict-of-interest issues that the Department of Defense should be working immediately to root out. When you consider the Kellogg, Brown and Root contracts are so-called cost-plus contracts, this arrangement becomes even more unacceptable. Cost-plus lets companies spend what they think is necessary, and after that they get to tack on a percentage fee to make a profit. The more taxpayer dollars the company spends, the more profit they bring home. In effect, these contracts send out a message that the Treasury is open. If you are wasteful and inefficient, don't sweat it because the taxpayer is just going to pick up the bills. A number of Iraqi reconstruction contracts, not just the Kellogg, Brown contract, have been designed in this way. If the Defense Department is going to spend my constituents' money in this manner without asking for a competitive bid, my constituents deserve to know why. I have just been having community, townhall meetings in a number of our small, rural communities. I was recently in Gold Beach, OR, at a townhall meeting. Folks there were talking about the difficulty they face getting money for dredging, which is critically important. It is the lifeblood of these small, rural communities on the Oregon coast. They have to battle for every dime in order to get the funds for dredging. I can tell you my constituents in Gold Beach, Coos Bay, Pendleton, and Portland--across the State of Oregon--are saying there is no place for waste. With respect to these Iraqi reconstruction contracts and various other contracts with Iraq, they want to make sure that not only is there no waste, but there should not be any possibility for impropriety. I understand that in some cases, there may be valid reasons for the awarding of contracts that seem suspect to the untrained eye. One explanation I have heard repeatedly is the need to award some contracts quickly. Another is the need for security clearances. But I cannot imagine that the need to move quickly is a valid justification for ignoring experience as a criterion, nor does a security clearance seem necessary for rebuilding a sewer system. As a Member of the Intelligence Committee, I had thought these arguments were pretty shaky before. I said then, and I will repeat it tonight. I believe the Department of Defense and other agencies involved in reconstruction would have a more open process and greater credibility if they knew they had to face the public on these important issues. The fact is: The Pentagon has kept the American taxpayer in the dark. The American people at present do not know how the select group of contractors was chosen, how much the reconstruction of Iraq will cost or how long it will take. Tonight, with the adoption of the legislation authored with Senator Byrd, we are going to be in a position to finally get on top of those issues. I want to express my appreciation to a number of the Senators on the Appropriations Committee, particularly Senator Stevens, the distinguished chairman of the full committee, and Senator Byrd, the ranking member of the Defense Appropriations Committee, and the distinguished subcommittee chair of that committee, for working closely with me and my colleagues on this legislation. Recently, the New York Times reported the current supply of about $7 billion for rebuilding Iraq includes $1.7 billion for Iraqi assets frozen in U.S. banks, $900 million found hiding in Iraq, and about $1.6 billion from Iraqi oil sold before the war. The United Nations is holding about $1 billion for development, and Congress has already appropriated $2.4 billion for reconstruction contracts. The occupation administrator is reportedly seeking about $6 billion for the remainder of this year, and ``the amount for 2004 will be considerably higher.'' Independent sources familiar with Iraq have put the price tag at upwards of $100 billion. The Pentagon just last week informed Congress that the monthly cost of military operations is really twice what they predicted in April, or nearly $4 billion. Secretary of Defense Rumsfeld called this a ``burn rate'' of $1 billion a week. My question then becomes, Will the administration have to effect a similar doubling of the projected reconstruction costs? What sort of a ``burn rate'' can the American people expect on the reconstruction side of the ledger? We have seen the costs go up and up with respect to military operations. Suffice it to say, I think there is every reason to believe that will be the case with respect to reconstruction contracts as well. What Senator Byrd and I have said--and we are very pleased the Senate on a bipartisan basis has accepted our amendment--is it is time for some accountability, and it is time for real and independent oversight with respect to these contracts. What is needed are clear processes and standards for designing and awarding contracts. What is needed are clear criteria for justifying sole-source contracts. What is needed are mechanisms to provide independent oversight over contractors. What is needed are policies to prevent conflicts of interest. What is needed are policies to prevent waste, fraud, and abuse. What is needed are ways to assure the percentage of profits is determined for cost-fixed-fee contracts in a way that protects our taxpayers. Finally, what is needed is a list of all contracts for reconstruction and other services in Iraq and their overall expected costs and duration. This week the civil administrator Paul Bremer said that just over the next 6 months Iraqi oil revenues will be $2 billion short of what will be needed to finance occupation and reconstruction. He admitted that reconstruction of Iraq is ``not going to be self-financing.'' Newsweek magazine called these numbers ``misleading.'' What this means, in plain English, is that U.S. taxpayers are going to get stuck funding the difference for a number of months and for the foreseeable future. We believe the pattern of secretive and closed bidding for these construction contracts is unacceptable. It seems to me the American people have a right to hear if there are reasons for sole-source and invitation-only contracts for these projects. If something is amiss in the Iraqi reconstruction contracting process, then the oversight and the accountability--as Senator Byrd and I have called for in the legislation accepted tonight--is going to bring that to light. It is high time Congress and the American people arrive at fair judgments about these difficult issues with respect to funding the reconstruction of Iraq. The American people deserve real accountability at a time when we need the money here at home for our schools, for our health care facilities, for our roads, and for the critical needs of strengthening our economy. I think it is a significant step the Senate has taken. It assures this will now be an effort to establish true oversight and accountability over the billions of dollars that are being spent now and that will be spent with respect to reconstructing Iraq and other services in that country. I thank Senator Byrd for his patience and assistance in this legislation. Again, I express my appreciation to Chairman Stevens for helping us to draft this in a way that will win bipartisan support. I yield the floor.

Mr. WYDEN

Mr. WYDEN. Mr. President, under the earlier unanimous consent request I was given 5 minutes and Senator Clinton was given 5 minutes to address the matter of competitive bidding for Iraqi reconstruction contracts. I ask unanimous consent I be allowed that full 10 minutes.

Mr. WYDEN. Mr. President, the reason that article is so important is because it indicates Kellogg Brown & Root essentially wrote the specs for the U.S. Government with respect to an oil field restoration effort. What that article shows is that the process basically allowed an incumbent contractor to identify the criteria for a multibillion dollar contract and virtually ensured that company would be awarded the contract without competition. If the news reports are correct, the potential for sole-source, custom-crafted contracts is basically guaranteed now by the Kellogg-Brown agreement. Senator Clinton and I have asked the Defense Department to provide within 30 days answers to some of the serious questions that involve contracting processes that seem to be used as of today. The Department of Defense recently announced, for example, that they had some concerns about the original agreement. That is fine, but we want to know whether there are other contracts that are being let in this fashion. We want to know whether the Department of Defense intends to continue the practice where it has not been discovered by the news media. The reason we are so concerned is if individual contractors are customarily setting the criteria for the work they plan to pursue, there are conflict-of-interest issues that ought to be resolved by our Government today. When you consider the Kellogg Brown & Root contracts are so-called cost-plus contracts, this arrangement becomes even less acceptable. Cost-plus contracts let the companies spend what they think is necessary, and then on top of it they tack on a percentage fee to make a profit. The more taxpayer dollars the company spends, the more profit they are able to bring home. A number of Iraqi reconstruction contracts, not just Kellogg-Brown's, have been designed in this way. My view is, if the Federal Government is going to spend my constituents' money in this way, my constituents deserve an explanation. I was at a town meeting in a small Oregon community on the Oregon coast this last weekend, where they could not afford money to have their port dredged. It may take upwards of $100 billion under some of these plans to rebuild Iraq. When our country can't afford the money to make sure our small ports get help quickly, there is no place for waste in these reconstruction matters. Finally, to just highlight the immediacy of this concern, questions have been raised as to how MCI, a company that does no wireless service in the U.S. and never has, could end up winning the contract from the Defense Department to set up a wireless telecommunications network in Iraq. That is the kind of question we want to see answered. That is why we are sending these letters today, calling for immediate public disclosure of these contracts so we can see whether the American people are getting their money's worth. We come to the Senate floor today because these are new concerns that have come to light. Chairman Warner, Senator Collins, and others have worked with us in a very constructive way with bipartisan legislation that I hope will be passed quickly. But I don't think we ought to allow the outsourcing of accountability over billions of dollars of contracts for Iraq to continue one day longer. That is why I come to the floor today to announce this effort, to try to bring some sunshine to Iraqi contracting. I have always felt sunshine is the best disinfectant. It sure looks like we need some of that right now. I yield the floor.

Mr. WYDEN. Mr. President, for some time now a bipartisan group of Senators expressed concern about the letting of billions of dollars in Iraqi reconstruction contracts without competitive bidding. We have worked very closely with the chair of the Armed Services Committee, Chairman Warner, and with Senator Collins, who chairs the Governmental Affairs Committee. We have been able to attach an amendment to the Defense authorization bill requiring the disclosure of awards that involve closed-bid or no-bid accounts. But the fact is, as the legislative process goes forward, too much money is now moving out of public coffers into private hands with too little assurance that those hands have won their contracts fairly. As a result, today Senator Clinton and I are requesting the immediate public disclosure of all documents relating to USAID's decision to exempt Iraqi contracting from full and competitive bidding. In addition, Senator Clinton and myself are asking Defense Secretary Rumsfeld for explanations regarding particularly troubling contracts that have recently come to light and have been awarded by his Department. Recently, a number of Senators have returned from Iraq. Every one of them I have heard discussing their trip, Democrats and Republicans alike, have concluded that the U.S. military will be spending more time in that country than originally calculated. The work to rebuild that ravaged nation will be more difficult rather than less so. Certainly, the billions of dollars of costs to the American people seem only to be going up. This week, Civil Administrator Paul Bremmer said that just over the next 6 months, Iraqi oil revenues will be $2 billion short of what will be needed to finance occupation and reconstruction. U.S. taxpayers are being asked to fund the difference. They are being asked to fund the difference for the 6 months and presumably for the foreseeable future. Yet the rationale behind much of this cost remains unknown to the American people and even to the Congress. Companies have been given contracts for work in Iraq with little or no competition and no explanation. The history of this, documented by the General Accounting Office, is such that this is a very unwise approach. The General Accounting Office has repeatedly said sole source or limited source contracts are not the best buy. They found that military leaders have often simply accepted the level of services given by a contractor without once asking if it could be done more efficiently or at a lower cost. Yet these noncompetitive contracts now seem to be the rule rather than the exception when it comes to Iraqi reconstruction. In my view, when Federal agencies employ a process that may expose taxpayers to additional costs, the need for explanation increases manifold. There is a crying need for transparency in how these billions of dollars are being spent. On April 19 of this year, a $50 million policing contract was awarded through closed bidding. On the same day it was reported that an $8 million contract for personnel services had been awarded nearly a month before the war began. Think about that--awards actually before the conflict began. By the time the end of hostilities was officially declared in May, billions of dollars of contracts had already been awarded. Fortunately, the news media has helped to get out the word about some of these issues. Right now the media is the American people's only source, apparently, for insight into these contracts. The more we learn about this, the more troubling the pattern is. Just recently the New York Times ran a feature-length article describing the letting of a multimillion dollar oil field contract to Kellogg Brown & Root. I ask unanimous consent that important article be printed in the Record.

Mr. WYDEN

Mr. WYDEN. If my colleague will yield further, my understanding is you have already indicated you are open to working with others in the Senate, colleagues on the other side of the aisle, to try to find a bipartisan solution. I am particularly interested. Senator Hatch and I were able to do this a number of years ago for the community health centers that were being priced out of their malpractice coverage. We were able to come up with a solution that has made it possible for thousands and thousands of poor people across the country to get their care and have these clinics covered without extra cost to the taxpayers, simply by working in a bipartisan way. My sense is to get out beyond the blame game, saying it is this interest group's fault or that interest group's fault, and to try to find some common ground here between Democrats and Republicans so we can really deal with a problem that is affecting many of our physicians and affecting our vulnerable patients. My understanding is my colleague from Illinois is open to that kind of bipartisan approach and may even have some ideas he will offer this week. I wanted to come to the floor because I think this is a real problem. I so often go to meetings and one group says it is the insurance companies' fault and the other group says it is the trial lawyers' fault. I have heard the distinguished Senator from Illinois say he wants to get beyond that and find a solution to a real problem. Perhaps he could address that in whatever time is remaining.

Mr. WYDEN. I ask, is there any reason why we couldn't begin such a bipartisan effort immediately? That is something I would like to do. I cited a specific example with Senator Hatch where we were able to make a real difference by working in a bipartisan way. It is making a difference in community health centers for their liability coverage. Is there any reason why efforts to come up with creative solutions that are bipartisan could not begin right now, rather than going this route that is going to polarize the Senate once again?

Mr. WYDEN. I thank my colleague.

Mr. WYDEN. I thank my colleague. I had a couple of questions, having listened to the statement. First, my sense is that many physicians in our country--I am seeing this across Oregon and rural Oregon--are having a real problem out there paying their malpractice premiums. We are seeing physicians leave the profession. This has resulted in patients not having the access to care they deserve. My understanding is that the distinguished Senator from Illinois agrees with that and that the Senator has already discussed that a bit this afternoon; is that correct?

Mr. WYDEN. If my colleague will yield for one last question----

Mr. WYDEN

Mr. WYDEN. Mr. President: Today, I introduce, for myself and Mrs. Feinstein, the Community and Forest Protection Act. I ask unanimous consent that the text of the bill to be printed in the Record.

Mr. WYDEN

Mr. WYDEN. Mr. President, on June 12, 2003, I published a notice in the Congressional Record of my intent to object to moving to H.R. 2350, a bill to extend the Temporary Assistance for Needy Families, or ``TANF,'' our Nation's welfare program. My good friend from Oregon, Senator Smith, joined in this effort because the legislation does not contain a provision critical to Oregon's welfare program: a waiver of certain provisions that gives Oregon flexibility to operate a successful welfare program. Because of its waiver, which expires on June 30, 2003, Oregon has reduced its welfare rolls nearly 60 percent since 1994. It is clear that the waiver has allowed Oregon to meet local needs and craft what has been heralded as one of the best welfare programs in the country. Since Senator Smith and I announced our public holds, the distinguished chairman of the Finance Committee, Senator Grassley, and the ranking member, Senator Baucus, have worked closely with us to find a way so that Oregon can continue to operate under its waiver until TANF is fully reauthorized. They have helped obtain a letter from Department of Health & Human Services Secretary Tommy Thompson to Oregon Governor Ted Kulongoski, myself and Senator Smith assuring us that Oregon can continue to operate without penalty under its waiver. I believe this letter provides Oregon the assurances necessary to continue to operate as if the waiver were still in place, and ask unanimous consent to insert the letter in the Record.

Mr. WYDEN

Mr. WYDEN. Mr. President: Today, I introduce, for myself and Mrs. Feinstein, the Community and Forest Protection Act. I ask unanimous consent that the text of the bill to be printed in the Record.

Mr. WYDEN

Mr. WYDEN. Mr. President, I rise today to introduce the Savage Rapids Dam Act of 2003, for myself and my friend and colleague from Oregon, Senator Gordon Smith. This legislation is another good example of the Oregon way: bringing together varied interests to get win-win results for all stakeholders. Born out of controversy concerning the detrimental effects of the Savage Rapids Dam on fish passage and survival, this legislation is now supported by the Grants Pass Irrigation District, Waterwatch, Oregon's Governor, Trout Unlimited, and various Oregon river guide and sport fishing concerns. This legislation simply authorizes the Secretary of Interior, acting through the Bureau of Reclamation, and the Secretary of Commerce, acting through National Oceanic and Atmospheric Administration Fisheries, to undertake activities identified for Federal implementation, including construction, in accordance with U.S. District Court Consent Decree ``United States, et al., v. Grants Pass Irrigation District, Civil No. 98-3034-HO'', August 27, 2001. This legislation has been years in the making. Senator Smith and I introduced a related measure in the 106th Congress. As we return to this legislation in the 108th Congress, I look forward to working with my colleagues in the Senate and the stakeholders at home to make this legislation and this process work for the Grants Pass Irrigation District and the environment. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. WYDEN

Mr. WYDEN. Mr. President, I rise today to introduce the Savage Rapids Dam Act of 2003, for myself and my friend and colleague from Oregon, Senator Gordon Smith. This legislation is another good example of the Oregon way: bringing together varied interests to get win-win results for all stakeholders. Born out of controversy concerning the detrimental effects of the Savage Rapids Dam on fish passage and survival, this legislation is now supported by the Grants Pass Irrigation District, Waterwatch, Oregon's Governor, Trout Unlimited, and various Oregon river guide and sport fishing concerns. This legislation simply authorizes the Secretary of Interior, acting through the Bureau of Reclamation, and the Secretary of Commerce, acting through National Oceanic and Atmospheric Administration Fisheries, to undertake activities identified for Federal implementation, including construction, in accordance with U.S. District Court Consent Decree ``United States, et al., v. Grants Pass Irrigation District, Civil No. 98-3034-HO'', August 27, 2001. This legislation has been years in the making. Senator Smith and I introduced a related measure in the 106th Congress. As we return to this legislation in the 108th Congress, I look forward to working with my colleagues in the Senate and the stakeholders at home to make this legislation and this process work for the Grants Pass Irrigation District and the environment. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. WYDEN

Mr. WYDEN. If I could pose a question to the Senator from New Hampshire and the Senator from New York, who has been very gracious in indicating that he has been in support of what I want to do. Last week I made public a report from the General Accounting Office involving Taxil, which is the biggest selling cancer drug in history. This drug was developed largely by the taxpayers, with everything for support from the Pacific yew tree, which grows in my home State of Oregon, all the way to the work done at the National Cancer Institutes by Federal researchers, and has produced $9 billion in sales for Bristol-Myers with the Federal Government getting a return of about $35 million, about one half of 1 percent on the biggest selling cancer drug in history. In this report, the General Accounting Office documents that the Federal Government basically dropped the ball. Without going to price controls and regulations and things of this nature, with some modest steps, the Federal Government could have stood up for the taxpayers and the patients who cannot afford the medicine and gotten the drug to market quickly and also taken steps to make it affordable and to protect the taxpayers. It is my desire, as somebody who has worked on these issues often with the Senator from New Hampshire for many years, to work out a bipartisan agreement where the National Institutes of Health would simply consider affordability when it enters into these agreements. It would not have to do anything prescriptive but would also have to look at affordability. I do not want in any way to hold up the work of the Senator. I think what he and the Senator from New York have done is very helpful, but I would have to object now if we could not get an agreement to at least at some point in this take a very modest step and ask that the question of affordability be considered when the National Institutes of Health enters these agreements, given the fact that basically patients on this particular drug, which has been the biggest selling cancer drug in history, cannot afford it and taxpayers got very little in return. Would that be acceptable to the Senator from New Hampshire? If I did not object at this point, would the Senator from New Hampshire work with me so at some point later in this discussion we could get a bipartisan agreement on a very modest step that affordability be considered in these agreements? Is that acceptable to the Senator from New Hampshire?

Mr. WYDEN. Mr. President, the Senator from New Hampshire is being very gracious. On the basis of his statement that he would work with me on it--what the Senator from New Hampshire and Senator Schumer have accomplished is very important. I reiterate how important it be done at this time. It is one thing when drugs are developed with private sector money. It is a free enterprise system. Fortunately, investors take risks. There are some gushers, some that are not profitable. It is a different story when the drugs get to market with taxpayer money. Here we have the largest selling cancer drug in history. It is imperative over the next day or so we work in a bipartisan way. The National Institutes of Health does phenomenal work. I don't want to do anything to impede their mission in getting drugs to market quickly. That is their first and foremost obligation. But let us also make sure when they sit down and enter into these agreements, they also try to make sure the drugs are affordable. It is one thing to get the drugs on the shelf, and it is another to not have the patients able to afford them. On the basis of the pledge of the Senator from New Hampshire to try to work this out with me in the next day or so in an agreeable fashion, I do not intend to object. I want to see the amendment of the Senator from New Hampshire and the Senator from New York go forward. I will work with the Senator from New Hampshire when he completes this important amendment. I yield the floor.

Mr. WYDEN

Mr. WYDEN. Mr. President, before he leaves the floor, I just want to commend the distinguished Senator from Utah on all his extraordinary work in the health care field. If you look at what the Senator from Utah has achieved in the S-CHIP area, his work that led to the Hatch- Waxman legislation, and what he has done on a whole host of health care issues, the senior Senator from Utah has made an extraordinary contribution. As we begin this discussion on Medicare reform, I commend the Senator from Utah on an excellent statement. I think the Senate will have another success over the next few weeks. After the Senator's success on S-CHIP, Hatch-Waxman, community health centers, and other areas, there will be yet another significant milestone the Senator from Utah will have helped to achieve in the health care area. He and I are working on a variety of initiatives now. I commend the Senator on an excellent statement and wish to associate myself with his remarks.

Mr. WYDEN. Mr. President, a Congress that can find hundreds of billions of dollars in money for tax cuts and the money to rebuild a foreign country must find a way to make Medicare work better for the Nation's vulnerable senior citizens. That is what the next two weeks are all about, and they are historic weeks for the Senate. Updating Medicare is an issue I have felt very strongly about for several decades because my public service career began in the early 1970s, when I served as codirector of the Oregon Gray Panthers and ran the Oregon Legal Services Program for the elderly. Back then, the old saw was that Medicare was just half a loaf. Of course, from its beginning, Medicare did not cover eyeglasses, hearing aids, dental care, and a host of services that are so important to vulnerable older people. But of particular concern, even then, was the fact that medicine, in so many instances, was both unaffordable and inaccessible. Now the Senate has an opportunity to do something about that in providing a real measure of relief for the Nation's older people. I believe over the next couple of weeks what the country is going to ask is not what a particular philosophical approach of a Senator was, but whether that Senator was part of an effort to find the common ground in finally getting real results for the Nation's older people. Senator Olympia Snowe and I offered the first bipartisan amendment to the budget resolution to fund a Medicare prescription drug program back in 1999. We followed that action up by introducing the first bipartisan proposal called SPICE, the Senior Prescription Insurance Coverage Equity Act. I am very proud to be able to stand on the floor today and say that because of the dedication of members of the Finance Committee, the leadership of both sides, many of the provisions Senator Snowe and I have been advocating for a number of years have been included in the legislation the Senate will vote on over the next couple of weeks. We were concerned then that traditional Medicare not be skimpy, that it be a good benefit package, and that it would be affordable for older people. Suffice it to say, under the legislation the Senate will be considering, traditional Medicare will survive. The millions of seniors who want to take that program will be able to do so. Traditional Medicare will not wither. It will not vanish as a result of being underfunded or having provisions that would make it less attractive for seniors to choose. A number of important consumer protection provisions are included in this legislation, something I think is absolutely critical if you are going to allow private plans to play a bigger role in delivering this benefit. I have had a great interest in this area since the distinguished minority leader, Senator Daschle, and I wrote a Medigap law a number of years ago which eliminated a lot of the unscrupulous practices that were taking place in the insurance market designed to supplement Medicare. Now there are standardized benefit packages for these Medigap supplements, and a lot of the abusive activity that used to go on, that used to exploit older people, has been eliminated. Many of the consumer protections in this legislation have been borrowed from the Medicare Choice Program, really building on what Senator Daschle and I wrote into the Medigap law years ago, and are a significant step in the right direction. I think there are also important steps included in this legislation to make medicine more affordable to the Nation's older people. It seems to me by giving seniors more choices, you make it possible for seniors to have the opportunity to get medicine that is more affordable because for a private plan to attract a senior subscriber, that private plan is going to have deliver medicine in an affordable way. So there will be a concrete incentive to actually hold down the cost of medicine because those private plans will not be in a position to make money, they will not be in a position to be profitable if they cannot attract seniors by keeping down the cost of medicine. So it is important that this legislation be enacted. I have always felt Government really comes down to people, and it comes down to those who tell us exactly what their experience has been with health care and various other areas of Government. What has really colored my judgment on this issue are the accounts I have heard from seniors, many of them going back to my days with the Gray Panthers. Not long ago a woman from my hometown of Portland, with $806 in monthly income, had prescription drug bills totaling $150 a month, and she got no help from Medicare whatsoever. My staff and I inquired about how she was able to get by, and her answer was just heartbreaking. She said: I just do without, and I pray. I do not think that is good enough. As I said earlier, I think a country and a Congress that can find hundreds of billions of dollars for tax cuts and a hundred billion dollars or so to rebuild a foreign country can do better by seniors on Medicare. So this legislation provides an opportunity to do that. I think there are a number of important issues for the Senate to zero in on as we begin this debate, the first of which is the cost. A number of Senators have said this legislation is costly and it will be difficult to finance in the years ahead. What I would say, Mr. President and colleagues, is this country cannot afford not to cover this vital service for older people. Not very long ago a physician in Hillsboro, OR, wrote me and said he put a senior citizen in the hospital for something like six weeks because that person could not afford their medicine on an outpatient basis. That is pretty bizarre by anybody's standards. If a senior is hospitalized, they get their medicine covered under part A of the Medicare program. But, of course, if the senior faces a serious health problem and is not hospitalized, they have to resort to outpatient services, and Medicare part B historically has not picked up the bill for drugs. So what we saw in Hillsboro, OR, not long ago is that it costs thousands and thousands of dollars for a senior to be hospitalized in order to get the Medicare benefit. It would have cost a small fraction of that if the drugs were covered on an outpatient basis. When seniors and others wonder about the cost of this benefit, and for Senators who are asking if the Nation can afford prescription drug relief for older people, my message is, America cannot afford not to do this. America cannot afford inaction and having older people hospitalized, facing serious health problems simply because they are not able to get medicine in a cost-effective kind of way. Second, as we look at this issue, we ought to understand that older people are getting hit by a double whammy when they try to afford their medicine. First, Medicare does not cover their purchases. But secondly, the older people of this Nation are subsidizing those who do have bargaining power, the health plans and big buyers who are using bargaining power to knock the price down. What we have been trying to do, going back to the days when Senator Snowe and I introduced the SPICE legislation, is give seniors some bargaining power, a chance to be on a level playing field with the big buyers, with the HMOs, with those who have bargaining clout. This legislation puts seniors on a more level playing field so that they are able to better afford their medicine and that is a step in the right direction. There are going to be a number of issues that will come up in the course of the debate. One that my State feels very strongly about is the fact that Medicare's payment system penalizes those who have been efficient. Historically, States such as Oregon that have been innovative in the health care area have taken concrete steps to hold costs down. You would think the Federal Government would reward them. You would think the Federal Government would give them a break for stressing cost containment. The reality has been just the opposite. The Medicare Program has penalized States for holding costs down. This legislation doesn't do as much as I would like it to do to remove the penalties against those who have been efficient, and I am hopeful that as we consider the legislation more can be done in that area. It does take significant steps to address the question of rural health care, something that has been particularly important to me. Senator Smith and I have included it in our bipartisan agenda for the State of Oregon. All who represent States like ours know that States that are largely rural find it extremely hard for seniors to get the care they need. Very often they don't have hospitals or doctors in close proximity and clearly need extra help in order to ensure that our rural communities survive. The fact is, without rural health care, you cannot have rural life. I am not prepared to sit by and let rural communities become sacrifice zones. That is why the provisions in this legislation to provide better reimbursement for rural health care are heartening. The provisions in the legislation for rural health take strong steps forward. It would adjust hospital payments to account for the higher costs associated with low-volume hospitals. It makes changes to what is known as the ``swing bed concept'' which will help critical-access hospitals, and it creates a floor for geographic payments for physicians and offers improvements for rural health clinic reimbursement. More needs to be done to assure that provider reimbursement is adequate. Better reimbursements obviously keep more qualified doctors and other providers in the Medicare system. That, of course, provides more choice and better care for the Nation's older people. I have been involved in a number of efforts with respect to trying to help seniors with their prescription drugs over the years. I have been involved in measures to expand access for generic drug coverage. I have been involved in efforts to give more bargaining power to public programs, particularly the Medicaid Program, and the program for the Veterans Administration. I have believed, even most recently with the drug Taxol, which is the largest and biggest selling cancer drug in history, that the Government has to do a better job of striking a balance between the need to get drugs to market quickly and be sensitive to making sure that medicine is affordable and that the interests of taxpayers are protected. But all of those steps together, which have been of some help in terms of making medicine more affordable for older people, do not rival what the Congress is facing now in terms of modernizing the Medicare Program and providing concrete relief to the millions of the country's elderly who are watching now and urging the Congress, after years of partisan action, to actually produce results and address their drug costs. The fact is, Medicare reform isn't easy. No Senator walks away with everything he or she wants. But there is a chance now to make sure seniors don't walk away empty handed. It is not going to be inexpensive. There will be some who want to spend more. Certainly, I have believed the key issue for all these years has been to try to find the common ground, to act on a bipartisan basis--Senators Baucus and Grassley have done that--and we must not let this legislation go by the wayside once more. For my part, I will do anything over the next couple weeks to build the bridges that are necessary to make health care more accessible and more affordable for the Nation's older people. This is the issue I care the most about, the question of making health care more affordable and more accessible. We have the most talented, dedicated, and caring health care providers on Earth. They deserve a Congress that does a better job of setting in place the governmental policies that allow them to deliver the best and most affordable health care that is possible. This has been my goal since I came to the Congress. This is the issue that has been most important to me throughout my years in public service. More than 25 years ago, when I was codirector of the Oregon Grey Panthers, we were talking then about what it would take to modernize the program, to turn that program that began as just half a loaf into a program that would deliver the best possible services to the Nation's older people. You cannot do that without covering prescription drugs for vulnerable elderly. This is an opportunity, if not to do everything that needs to be done, to take substantial steps in the right direction. I urge my colleagues over the next couple of weeks to work together on a bipartisan basis to finally accomplish the reforms that are necessary. I yield the floor.

Mr. WYDEN

Mr. WYDEN. Mr. President, I ask unanimous consent that Thad Kousser, a legislative fellow in my office, be granted floor privileges for the duration of the debate on Medicare reform.

Mr. WYDEN

Mr. WYDEN. I want to be accommodating to the distinguished chairman of the committee. Let me spend a couple of minutes looking into it.

Mr. WYDEN. Mr. President, as we move to the vote, basically all the arguments made against the Wyden-Sununu-Snowe-Ensign-Binga- man amendment, all of the arguments made against us were made for the WPPSS facilities which resulted in the biggest municipal bond failure in history. Back then they said it wouldn't be unduly risky. They said there wouldn't be any questions with respect to exposure to those who were financing it. Look at what happened. Four out of those five facilities did not get built. I say to my colleagues, those who are pronuclear, those who are antinuclear, this is not about your position with respect to nuclear power pro or con. It is about whether or not you are going to be protaxpayer. The Congressional Research Service says the taxpayers are on the hook for $14 to $16 billion. The Congressional Budget Office says there is upwards of a 50-percent likelihood of default. Under this provision, the loan guarantees provide opportunities to construct nuclear facilities that no one else is getting. Other people don't get the break unless they produce something. Here you get the break even if you produce no nuclear power whatsoever and you get it directly out of the taxpayer's pocket. It is unwise. I hope my colleagues will vote with three Democratic Senators, three Republican Senators, and an Independent for this amendment. I yield the floor.

Mr. WYDEN. Mr. President, then I would like to accommodate the Senator from South Carolina. I have a couple of minutes to go.

Mr. WYDEN. Mr. President, I ask unanimous consent that the Senator from South Carolina have 2 additional minutes and if I could have 3 additional minutes after he is done speaking.

Mr. WYDEN. I am happy to accommodate the Senator from South Carolina. How much additional time do I have?

Mr. WYDEN. Would the distinguished Senator yield?