Sheldon Whitehouse

Mr. WHITEHOUSE

Mr. WHITEHOUSE. The opt-out plan, as I understand it, would allow States to decide they don't want a public option in their State, so they don't have to have one. Each of us comes here representing a State. My colleague is the very distinguished majority whip, but he is also the Senator from Illinois. Our distinguished friend, Mr. Udall, is the Senator from New Mexico. The health care our constituents get is delivered to them almost entirely in our States. So one would think it would be satisfying to the people on the other side who object to a public option that they could go home and they could say: You know what. This public option is a terrible idea. You know what I have done. I have worked out an opt- out and have protected you from it. It is only these crazies in places such as Rhode Island who want to take advantage of the public option. But I have saved you, and it is their funeral. The way we designed it, as I mentioned earlier, is State to State it has to be solvent. There is no cross-subsidization, that one State has to carry the water for another State. They would not have to pay for Rhode Island's costs if they got out of control, whether they have a public option or they do not. So they are protected. One would think that would be an adequate argument for them. The fact that it is not an adequate argument suggests to me there is a little bit more at stake; that the real party in interest is not the constituents of their own States, it is the private insurance industry.

Mr. WHITEHOUSE. Yes, I am happy to.

Mr. WHITEHOUSE. Madam President, I thank the Senator from New Mexico for organizing this time. What do we mean by a public option? To begin with, I will explain a little what our public option is and why it is so important. Then I have some stories from people in Rhode Island who have contacted me and who are exactly the reason we need to do this. The first thing you will hear is our friends on the other side saying that the public option is a government takeover of the health care system, that it is going to squeeze out private providers and it will be subsidized by taxpayers and all these things. I know something about the public option that came out of the HELP Committee because, along with Sherrod Brown and Kay Hagan, I wrote it. So I know a little bit about what it does. Those things are just not true. The design of the public option is that it exists State by State. In each State, it has to stay solvent. It can't lose money. The government puts up the money any insurance company needs to start with, the initial capital. After that, the public option in each State, from its revenues, the premiums it charges, has to make money and stay solvent. If not, it fails like any other company. Secretary Sebelius of HHS is mandated to make sure each State's operation runs on a solvent basis. So there is no taxpayer bailout. It is head-to-head competition on a level playing field, and the insurance companies, frankly, should not be frightened of it. They are, but the reason they are has a lot to do with their bad practices and very little to do with anything about the design of the public option. One of the reasons we need it, to give a little background on this, you have to remember where our national health expenditures are going. Look at this chart. This is how much we spend on health care. I was born in 1955, when we were spending $12.5 billion a year on health care in this country. We probably spend that much a day now. In 1979, just after I graduated from college, by then we had gone from roughly $12 billion a year to $220 billion a year. In 1987, which was about when my daughter was born, we were over $500 billion or $\1/2\ trillion a year. In 1992, we were at $849 billion a year. In 2009, we are at $2.5 trillion a year. You can see the shape of the curve on the chart. It is not going out and leveling off. It is getting steeper and steeper. Costs are going through the roof, and the private insurance industry is driving that. There are big savings that can be achieved. The President of the United States, President Obama, and his Council of Economic Advisers issued a report in July of this year that said: Efficiency improvements in the U.S. health care system potentially could free up resources equal to 5 percent of the

Mr. WHITEHOUSE. I rise today to join my distinguished colleague from New York, Senator Schumer, to express my strong support for extending unemployment benefits for workers around this country who continue their struggle to find jobs in this weak economy. The problem is especially acute in my home State of Rhode Island, but this is a national problem, and it is creating significant unhappiness, significant distress, and significant woe in families all around the country as they approach the end of their unemployment benefits and cannot find a job. And the end is coming up for so many people. We really need to do something about it. Right now, we are on a motion to proceed to the Unemployment Compensation Extension Act of 2009. We are not actually on the bill yet because our colleagues on the other side of the aisle are using every available form of procedural delay. It is not hard to figure out why they are doing it. There are only so many days in the year. There are only so many days the Senate can be in session. And when they force these votes and when they force delays, what they are doing is burning the work time of the Senate. They would like to burn the work time of the Senate because that inhibits the President, that inhibits us, it inhibits progress, and that presently is their motivation. They are the party of no. And because they do not have the votes for a lot of this stuff, until they can get to it, they are the party of slow. And we have had innumerable--I think the record right now is that we are at 82 efforts--to filibuster or force the majority leader to file cloture. We have had votes forced on judges. Some of the judges went through with huge margins by the time the vote actually came, but they wanted to burn the time. Indeed, as the Presiding Officer, the distinguished Senator from Illinois, may recall, the other day we voted on a judge, and the vote was 100 to 0. Yet they had to force a vote. Why? To burn the time of the Senate to prevent progress. This should be one bill where they would stand down from their mission to be the party of no and the party of slow. Because since October 8--when they first put up the procedural obstacles to this bill--to now, 7,000 Americans a day have lost their coverage. They have come to the end of their unemployment coverage. It has expired, and they have lost their incomes. As the Senator from Illinois, the distinguished Presiding Officer, so distinctly knows, there are millions and millions of families in this country who live paycheck to paycheck and when they lose their jobs, they live unemployment check to unemployment check while they desperately seek work to feed their families and put a roof over their heads. This bill--if we could get to it, and if we could vote on it--would provide a badly needed lifeline to those Americans, and I would hope at some point our Republican colleagues would relent and simply let us make this decision, which is in everyone's best interest. It is inhumane, frankly, to put those families--7,000 a day--through the torment of coming to the end of their income and having to think about losing their houses, losing their cars, not paying for their prescriptions, not paying for their food, worrying about their children--all of that. That is an awfully high price to score political points on this floor and to be the party of slow and the party of no. I would hope their point of view will change. I want to, first, applaud the efforts of my senior Senator from Rhode Island, Jack Reed. He has long been a champion of helping the unemployed, and he has played a critical role in getting this legislation to the floor for the Senate's consideration. Notwithstanding the fact that our Republican colleagues are interfering with allowing us to pass this legislation, Senator Reed's leadership on this issue has been remarkable, has been commendable, and we in Rhode Island are fortunate to have his service. One of the reasons Senator Reed is so concerned about this is because our home State--the State of Rhode Island--has the third highest unemployment rate in the Nation. We broke 13 percent last month. That is the highest level Rhode Island has seen for unemployment since World War II. According to the Bureau of Labor Statistics, over 74,000 Rhode Islanders are currently looking for work. There are 74,000 families with a wage earner out of work in a State with just over 1 million people. At that level, there are very few Rhode Islanders who are not touched in some way by our unemployment crisis. Families are struggling through this recession in every State, but the situation is particularly dire in States such as Rhode Island, Michigan, and Nevada where the unemployment level has hit double digits and is climbing still. People who have worked their entire lives have been unable to find work this year. The economies of the worst hit States are getting worse, and the unemployment benefits continue to run out. I have heard from hundreds of constituents who fear they will be unable to keep their families fed or keep the electricity on or keep up with their prescription drugs when their unemployment benefits expire. My State is in economic crisis, and we need help. One of my constituents, Carole, from Centerdale has degrees in architecture and business, but she has been unable to find work for 18 months. She has two children. They are 12 and 15. Her unemployment benefits have run out. Without more help, she may lose her home. I send out my good wishes to Carole and my thoughts to her for a complete recovery. She has recently suffered a heart attack. She is recovering nicely, and I wish her well in her health. But we could do a lot for her if we could clear this bill so she did not have to look at her 12-year-old and her 15-year-old and, in this market, say: I don't know where our income is coming from now because this government cut off the unemployment benefits. Another constituent is Patricia. She is a 51-year-old woman from Warwick. She has been unemployed for 17 months. She spends over $300 a month for her prescriptions, and she can no longer afford to keep up the COBRA payments that will protect her if she gets seriously ill. Without assistance, she may need to go into bankruptcy. I tell just these two stories, although there are thousands more from those 74,000 Rhode Island families, because the statistics are sobering--13 percent unemployment, the highest level since World War II. That is a deeply distressing statistic. But behind those statistics are these personal stories, over and over again, thousands of examples of human suffering, human courage, that we must not ignore as we quarrel over irrelevant amendments and do not get to the business of helping these people in their hour of need. I am pleased that in addition to the 14 weeks of benefits this legislation would provide to unemployed workers in all States, workers in States with the worst job markets would receive an additional 6 weeks. That additional time is desperately needed by Rhode Islanders, who, day after day, week after week, pore through the want ads looking for the job postings and hoping that the next interview will be the one that puts them back on their feet again. I am confident the economy of Rhode Island and the economy across the country will recover. It always does. But right now it looks as though it will take time. Economists say the stock market tends to be a leading indicator of recovery, while employment numbers are lagging indicators of recovery. This means the recent uptick in the stock market should lead to more jobs being available in the future. But until then, unemployed Rhode Islanders such as Carole and Patricia, unemployed Americans across our country, need their government to help provide the bridge to those better days. I implore my colleagues to join me in supporting swift passage of this urgently needed and--I hope once we cut through the fuss-- ultimately noncontroversial unemployment benefits extension. I thank the Presiding Officer and yield the floor.

Mr. WHITEHOUSE. I ask unanimous consent that the order for the quorum call be rescinded.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Insurance companies have had a long time to do this, but they have not done it. If you want to believe that by passage of this legislation, all of their motivation and their business model, the way they work, is going to spontaneously change, and they will start doing things they have never done before, is one thing to believe. I think prudence and experience and a practical and serious appreciation of how urgent our situation is all counsel against believing a sudden epiphany happening in the halls of the big insurance companies and, instead, put a new entity on the field, which would be easier to start up and bring a new business model in with it. It is not going to have all that tradition and history. You know, you get in a rut. The only way to change the business model in health care is to have a new entrance--a public entrance and a nonprofit entrance and one that has a dispersed interest in the health of the American people rather than the wealth of the insurance company shareholders. Would the Senator from Oregon like to jump in?

Mr. WHITEHOUSE. In Arizona, our wonderful colleague, Senator McCain, with whom I am very proud to serve, is also very antagonistic toward the notion of a public option. But in Arizona, if I recall correctly, their public option has been in the workers' compensation market for 80 years. So the notion that when you have a public option it is going to creep, crawl, and take over and force out competition is proven wrong by the actual facts and history of some of the States of Senators who are here making that very argument.

Mr. WHITEHOUSE. The Republican leader, Senator McConnell, has a public option in his home State of Kentucky that provides workers' compensation insurance in competition with private insurers. It has been doing it for years. It has a significant market share. I don't recall that he has ever criticized that plan. I think it seems to be helpful.

Mr. WHITEHOUSE. Think how many Americans from Oregon or from Ohio or from Rhode Island or from Delaware, the Presiding Officer's home State, have been able to achieve their dreams because they were able to go to a public university in their home State as opposed to private colleges. I have nothing against private colleges and universities. I went to one. I think they are wonderful. But I am very proud of the University of Rhode Island, and for many Rhode Islanders and many people who come to Rhode Island to go to URI, that is a great opportunity for them. The notion that it should not be there because it is government run and government supported and, therefore, makes Brown University noncompetitive is just crazy. The facts belie it. If you look even closer--I know the Senator from Oregon has talked before about the workers' compensation example--half of the States in the country have public options that operate in an insurance market and provide workers' compensation. Indeed, some of the strongest advocates against a public option in health insurance on the other side of the aisle have workers' compensation public plans in their home States.

Mr. WHITEHOUSE. There is an alarm bell. An alarm rings when a market is something called heavily concentrated. The Department of Justice has standards for when a market is heavily concentrated. When a market is heavily concentrated, that means they look particularly closely for anticompetitive conduct. Of course, they don't look at the insurance industry because they are exempted from the antitrust laws. But 94 percent of the major metropolitan areas in America--nearly everyplace-- is heavily concentrated. It is in that uncompetitive danger zone. The public option is not only a useful alternative, but we are dealing with a market where competition is in a very poor state. So it is not as if you are adding an extra competitive element to an already competitive market. You are adding an extra competitive market to a market that is almost virtually certain to be heavily concentrated and to show none of the signs of healthy competition that one looks for in a healthy marketplace.

Mr. WHITEHOUSE. One of the ironies in all this is that whole scheme of the insurance companies is actually increasing the cost of American health care. I think from 2000 to 2006 the administrative costs of insurance companies went up over 100 percent. So they are loading on more and more people whose purpose is to do just what you said, which is to interfere with the doctors, to require more and more prior approvals before you can get treatment, to do more and more claims denial--all of that. And then not only does that add costs to the health care system within the insurance company, but then the doctors have to fight back. In Rhode Island, I go all around to doctors and medical practices and community health centers. The standard number that I hear is that 50 percent of the personnel of a doctor's office or a community health center is not dedicated to providing health care but dedicated to having to fight back against the insurance industry. I visited the Cranston Community Health Center a few months ago, and they said that more than 50 percent of their personnel is devoted not to the health care function but to the ``fighting with the insurance company'' function. Plus they have to spend $300,000 a year that could go to health care for consultants and computer programmers who help them fight with the insurance companies. It is not just half the personnel, it is also a $300,000 consulting expense. You put the two together, and it is a huge cost and a great opportunity for a public option to cut through all of that, to knock off the administrative expense on their side, costs on the doctors' side, and bring costs down. (Mr. KAUFMAN assumed the chair.)

Mr. WHITEHOUSE. Particularly when those two firms aren't subject to the antitrust laws, they are able to price-fix and do things like that. For them to complain about competition after having used government to wall themselves off from the basic law that protects competition, you kind of have to believe the irony department is open late at night at insurance companies.

Mr. WHITEHOUSE. It is a little ironic to have the insurance industry complaining about government entering into the role as a competitor to the insurance industry, which is the best possible way government could enter into this equation, when, for years, they have fought for and protected a government role in the health insurance industry, which is to protect them, the insurance industry, from the antitrust laws. Government has been involved in health insurance for a long time in the worst possible way--protecting these insurance companies from being subject to antitrust laws, like every other business in America except, I guess, Major League Baseball.

Mr. WHITEHOUSE. That is precisely accurate. If you are a for-profit insurance company and your motivation is to make money, and if you assume your customers are going to stay with you--how long does somebody stay with a company before they change jobs or move to a different State? Five to ten years? You put down 100 cents on the dollar of a prevention strategy or a wellness strategy and help that individual, and if it is an illness, it is going to show up 8, 9, or 10 years later and you haven't saved yourself any money. You have done the right thing for the customer but haven't saved yourself any money. So you have a huge built-in bias to underinvest in wellness and prevention. Sure enough, we are a country that underinvests dramatically in wellness and prevention. It is impossible not to connect the dots and see that the reason we are so underinvested in wellness and prevention has to do with the motivation of the for-profit insurance sector. (Mr. UDALL of New Mexico assumed the chair.)

Mr. WHITEHOUSE. It will be willing to take the long view and say: You know what. This is the right thing to do.

Mr. WHITEHOUSE. I am delighted to join the discussion. One other point merits mention about a public option. The current business model for health care in America is not a good one. The insurance companies try to--if you are not healthy--make sure you never get insurance in the first place. If they give you insurance and then you get sick, they will look for loopholes and try to throw you out. Then they will try to control the way you get treated by your doctors. So your doctors have to spend as much as half of their time on the phone trying to fight and get you the treatment they know is right for you, but they have to clear it with the insurance company, which has a vested interest in taking as long as it can and causing as much trouble as it possibly can because some doctors and patients will just give up. On the other side, in terms of the quality of care, with all that stuff going on, we have a country in which the quality of care is far below our competitors by innumerable measures. Part of it has to do with the way the system works. We had an intensive care unit reform that we fought through in Rhode Island that was modeled on the keystone project in Michigan. In Michigan, they went into intensive care units and said: We are going to eliminate hospital-acquired infections, get rid of those. In 15 months, they saved 1,500 lives, $150 million, and 81,000 days that patients would have spent in the hospital with those infections, but they didn't have to because they got out without them. They invested in that. That is the kind of thing a public option can invest in because it will be around, it is not profit motivated, and it wants to do the right thing for people.

Mr. WHITEHOUSE. I have to depart, and I yield the floor to the distinguished Senator from Ohio. But before I go, I want to express my appreciation to him for convening us and for his energetic and constant advocacy on this subject. I think he has been a wonderful leader of our caucus, and I wish I could stay longer, but I have a plane awaiting me. So I yield to the Senator from Ohio.

Mr. WHITEHOUSE. That is what competition is all about.

Mr. WHITEHOUSE. In Wyoming, the workers' compensation system is run entirely by the government. It is a single-payer public plan. As far as I can tell, all of the business community in Wyoming is perfectly comfortable with that plan. One of the concerns people raise about a public plan is that it will give terrible public service, terrible customer service. It has been described as if you take the IRS and a department of motor vehicles and put them together, that is the kind of customer service you will get from a public plan. I doubt very much that the public plan in Wyoming, which is a single-payer, government public plan, gives that kind of terrible public service because if it did, I would expect the Wyoming business community to be up in arms about the way they are being treated by their only choice of workers' compensation insurer. Judging from the track record, it seems they are pretty satisfied with it. I think when you actually go out into the field and look at examples of competition, whether it is the Postal Service, higher education, or these public plans that do workers' compensation in half of our States, we find that a lot of the concerns the people have raised, a lot of the fears that seem to animate this debate actually, in reality, appear not to prove out.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Mr. President, I come to the floor to speak in strong support of the Health Insurance Industry Antitrust Enforcement Act, introduced by the senior Senator from Vermont, the chairman of our Judiciary Committee, Mr. Patrick Leahy. I believe this bill is an important part of health care reform, and I am hopeful it can be included in the final reform bill as it makes its way through this body. Our antitrust laws embody the proud American idea that democracy shapes capitalism and not vice versa; that vigorous economic competition is not an amoral, Hobbesian contest but disciplined by a strong rule of law tradition; and that ours is not a society in which might makes right and only the powerful write the rule book. The great Supreme Court jurist and antitrust crusader William O. Douglas, wrote: Industrial power should be decentralized. It should be scattered into many hands so that the fortunes of the people will not be dependent on the whim or caprice, the political prejudices, the emotional stability of a few self-appointed men. . . . That is the philosophy and the command of the Sherman [Antitrust] Act. The passage of the Sherman Antitrust Act and the Clayton Antitrust Act and the creation of the Federal Trade Commission and the Antitrust Division at the Department of Justice demonstrated a Federal commitment to a level economic playing field. Small businessmen and entrepreneurs, shouldering the enormous task of starting and sustaining a new enterprise, would know that powerful competitors could not collude to keep them out of the market. Consumers could rest assured that prices were not being fixed artificially high by scheming monopolists. Every industry, ever vector of American business, was made subject to these rules of the road--except for one: the insurance industry. In 1944, insurance companies challenged the Federal Government's very ability to enforce antitrust laws against them, and the Supreme Court ruled that the insurance business was subject to antitrust laws just like everybody else. In response, insurance companies came to Congress, where they launched a massive lobbying campaign, pressuring Congress to invalidate the Supreme Court's decision--not unlike the current lobbying barrage they are aiming at killing health care reform. That campaign back in 1944 was successful. In March 1945, the McCarran- Ferguson Act exempted insurance companies entirely from the reach of America's antitrust laws. If that exemption ever made sense, it no longer does, especially when it comes to health insurance coverage. Today, Americans pay ever-higher premiums for less care because a small group of wealthy, powerful companies control the health insurance market. Just consider these numbers: A study by the American Medical Association shows that 94 percent of metropolitan areas--virtually every one--has a health insurance market that is ``highly concentrated,'' as measured by Department of Justice standards. This means that if the Department of Justice's Antitrust Division had enforcement authority over the health insurance industry, it would be carefully scrutinizing this market for signs of anticompetitive conduct that hurts consumers. But due to the antitrust exemption, the Department of Justice cannot do that job. That same study shows that, in 39 States 2 health insurers control at least half of the health insurance market and in 9 States a single insurer controls at least 70 percent of the market. Back in 1945, the insurance industry argued that it should be exempted from the antitrust laws because the market was heavily localized and not concentrated. Well, if that were true then, it is not true now. Overhead for private insurers is an astounding 20 to 27 percent-- charges that consumers pay for in higher premiums. A Commonwealth Fund report indicates that private insurer administrative costs increased 109 percent from 2000 to 2006--109 percent in those 6 years--and the McKinsey Global Institute estimates that Americans spend roughly $150 billion annually on what the report calls ``excess administrative overhead'' in the private health insurance market. Mr. President, $150 billion a year in ``excess administrative overhead.'' Clearly, this is not a competitive market. If it were, companies would be driven to cut these costs in order to compete effectively in the marketplace. Without competition and without economic incentive to avoid massive administrative costs, health insurance premiums have increased 120 percent--more than doubled--in one decade, while insurance industry profits increased 428 percent in the same period--428 percent. Doctors and other health care providers have been hurt as well. For many years, United Health Care, a massive health insurance company, owned and operated a computerized pricing system that was used by almost every other health insurer. The New York attorney general recently found that the system was designed to systematically underpay doctors for their services and that this had been going on for years. United Health paid $400 million to settle lawsuits by the State, but if the Federal Trade Commission or the U.S. Department of Justice had tried to bring suit under the Federal antitrust laws, they would have been blocked by McCarran-Ferguson. Finally, ironically, health insurers threaten and sue doctors all the time under these same antitrust laws while protecting their own exemption from the laws they seek to impose on the providers and the doctors whom they torment. One might ask how this exemption has survived so long. A certain school of political thought holds that the only proper relationship of government to the market is hands off, that any government involvement in the marketplace is unnatural and unwelcome. But with respect to antitrust enforcement, we crossed that Rubicon long ago, and every industry in the country is required to play by rules that support the market by increasing competition, again, except insurance. Experience in those other areas has shown that the government referee on the field of play creates a better environment for competition, and the public wins. Think of the benefits of a competitive health insurance market. Insurers would have to compete on price, lowering premiums for individuals and small businesses purchasing insurance, and work hard to lower those unnecessary administrative costs. New competitors would be able to enter more easily and offer better consumer service, quicker claims processing, streamlined enrollment--competition that is desperately needed in a market where 36 percent of physician overhead is consumed by fighting with the insurance industry over inappropriate denial and delay of health insurance claims. Senator Leahy's Health Insurance Industry Antitrust Enforcement Act would repeal the unique and peculiar exemption for health insurance and medical malpractice insurance companies. The bill ensures that these companies are no longer permitted to engage in the most egregious forms of antitrust violations--price fixing, bid rigging, and market allocations--while preserving insurers' ability to share statistical information with each other in a procompetitive manner, with appropriate approvals. Let me conclude with the words of a distinguished Senator, one of the greatest advocates for the elderly, ill, and disabled this Chamber has seen, Senator Claude Pepper. Senator Pepper, at the time, strongly opposed the McCarran-Ferguson antitrust exemption for the insurance industry, and he warned of the ``carte blanche authority . . . which had been contained in no previous legislation . . . [and] which for the first time gives the States carte blanche to legitimize the very vices against which the Clayton Act and the Sherman Act were directed.'' It appears to me the exemption for the insurance industry was a mistake then, and it is assuredly unwise now. Let's repeal this unfair law and give health insurance consumers the same benefits of free, open, and fair competition that all Americans enjoy. Let me finally add that the state of the health insurance market reinforces the need to which I have spoken, and so many of my colleagues have spoken before, for an efficient, nonprofit public health insurance option. The health insurance industry has been artificially sheltered by government for decades, building huge profit margins, massive market share, and colossal overhead and administrative costs. Now these same companies argue vehemently against the public option on the grounds that it would amount to government interference-- government interference with their government protection from competition. That irony just doesn't pass the laugh test. According to the AMA study I quoted in the beginning of my remarks, Rhode Island is the second most concentrated health insurance market in the country. Just two insurers control 95 percent of the market. My constituents desperately would like the chance to choose a public option and would benefit from a more competitive health insurance market, one in which vigorous competition brings down costs and improves the quality of care and encourages health insurers to treat people decently. Mr. President, I have concluded the remarks on the McCarran-Ferguson exemption. I wish to turn to another topic, but I see the majority whip on the Senate floor, and I would be delighted to yield to him if he wishes to take a moment. I will continue, then. I thank the distinguished majority whip. Bipartisan Campaign Reform Act Mr. President, I wish now to say a few words about the colloquy that took place between Senator McCain and Senator Feingold on the Senate floor a few moments ago over the need to protect our Nation's political system from the influence of corporate money. For more than a decade, Senators McCain and Feingold have been stalwart defenders of the integrity of our political system, and they achieved a hard-fought victory in 2002 with the passage of the Bipartisan Campaign Reform Act, which everybody around here knows as the McCain-Feingold law. As they said in their remarks, we face a real danger that an activist Supreme Court will strike down portions of that law, overturn the will of Congress and the American people, and allow corporations to spend freely in order to elect and defeat candidates and influence public policy to meet their ends. The consequences of such a decision by our Supreme Court could be nightmarish. Federal laws restricting corporate spending on campaigns have a long pedigree. Back in 1907, the Tillman Act restricted corporate spending on political campaigns. While various loopholes have come and gone over the years, the principle embodied in that law that corporations aren't free to spend unlimited dollars to influence political campaigns is a cornerstone of our American system of government. That principle now appears to be at risk as the Supreme Court may be poised to open the floodgates now holding back corporate cash. In September, the Supreme Court heard oral argument in Citizens United v. The Federal Election Commission. Citizens United is an organization that accepts, channels, and funnels corporate funding. It sought to broadcast a documentary attacking our former colleague, Senator Clinton, now Secretary of State Clinton, at the time a candidate for President, on On Demand cable broadcasts. Current law prohibits the broadcast of this kind of corporate advocacy on the eve of an election. Citizens United filed a lawsuit arguing that the law infringed on its first amendment rights. Many observers expected the Court to rule narrowly on the case, perhaps focusing on whether McCain-Feingold applies to On Demand broadcasts. Instead, after hearing oral argument, the Court asked for an additional briefing and a new round of oral argument, something the Supreme Court does very rarely, to consider whether the first amendment bans such restrictions on corporate campaign spending. There is some indication that the activist conservative wing of the Court believes it does. We may be on the verge of another effort by a Roberts court to advance its ideologically charged view of the Constitution. In so doing, the Court would overturn its own longstanding precedents, opinions such as Austin v. Michigan State Chamber of Commerce where Justice Thurgood Marshall warned of ``the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public support for the corporation's political ideas.'' Should the Court upturn so much long-settled law, it would upend our entire political system and we could see a new era of corporate influence over politics not seen in the history of our Republic. Imagine for a moment what our political system would look like if the Court takes the fateful step of allowing corporations to unrestrictedly spend money to influence campaigns. Corporate polluters under investigation by the Department of Justice, running unlimited advertisements for a more sympathetic Presidential candidate; financial services companies spending unlimited money to defeat Members of Congress who have the nerve to want to reform the way things are done on Wall Street; defense contractors overwhelming candidates who dare question a weapons program they build. It would become government of the CEOs, by the CEOs, and for the CEOs. Nothing in the history of the first amendment requires the protection of such activities. To the contrary, Congress long has been understood to hold the power to protect the electoral process from the corrupting flood of corporate money. This is because, as the Supreme Court long has recognized, a corporation holds no inalienable right to participate in an election. Unlike the people from whom the sovereign power of the State is drawn, a corporation is created by and subject to the sovereign power of the State. Indeed, as Chief Justice John Marshall explained in 1809, only 18 years after ratification of the first amendment, a corporation is ``a mere creature of the law, invisible, intangible, and incorporeal and certainly not a citizen.'' In 1906, a century later, the Supreme Court explained that: The corporation is a creature of the state. It is presumed to be incorporated for the benefit of the public. It receives certain special privileges and franchises, and holds them subject to the laws of the state and the limitations of its charter. Its powers are limited by law. Corporations are created by government charter. They are legal fictions, tools for organizing human behavior. Neither logic nor history justifies unleashing them from the bonds of government to master and control the very government that created them--new monsters on the political landscape, bending public wealth to their peculiar private purposes. How might they do that? Well, let's look at one recent case involving Bank of America. All of us remember in September of 2008, Bank of America announced that it would buy Merrill Lynch for $50 billion. In August of this year, the Securities and Exchange Commission filed a civil suit against the Bank of America alleging that it had made a misrepresentation to its shareholders that Merrill Lynch would not pay bonuses to its executives in 2008 when, in fact, Bank of America had agreed that Merrill Lynch could pay up to $5.8 billion in bonuses to its executives. That is the background. Bank of America and the Securities and Exchange Commission submitted a proposed final consent judgment proposing to resolve that case by giving $33 million of shareholder money to the Securities and Exchange Commission. The U.S. District Court in New York took a look at this proposal and threw it out. The judge rightfully rejected it as neither fair nor reasonable nor adequate. The Court said it well; I can't improve on the Court's decision: The parties were proposing that the management of Bank of America--having allegedly hidden from the bank's shareholders that as much as $5.8 billion of their money, shareholder money, would be given as bonuses to the executives of Merrill who had run that company nearly into bankruptcy--would settle the legal consequences of their lying by paying the SEC $33 million more of their shareholders' money. As the Court noted, this was all done ``at the expense not only of the shareholders, but also of the truth.'' That is a pretty stark example of corporate management trying to use shareholder money to serve its own ends, even against shareholder interests. Well, guess whose interests corporate managers would pursue politically if they could open the spigots of shareholder money in elections. Longstanding statutes and judicial precedents that limit corporate involvement in campaigns rests on the well-established and long- accepted recognition that corporations and their corrupting self- interests must be controlled. There is no reason now for a fundamental rethinking of such a plain and well-settled principle. The rightwing of the Supreme Court will be hard pressed to justify departing from such settled understandings of the first amendment, from the century-long tradition of controlling corporate spending, to invent new constitutional rights for corporations against real human beings. In closing, I stand with my colleagues, Senator McCain and Senator Feingold, in readiness to do what it takes to protect our system of campaign finance laws from the danger of corporate corruption. I look forward to working with them and my other colleagues to ensure that our elections remain enlivened by a robust debate among human participants in which CEOs don't have favored princely status because they can direct corporate funds to drown out people's voices. I thank the Presiding Officer, and I yield the floor.

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

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Mr. President, today I congratulate Rajiv Kumar, a medical student at the Warren Alpert Medical School of Brown University, for receiving the Community Health Leaders Award from the Robert Wood Johnson Foundation. Mr. Kumar received this prestigious award for his efforts to reduce obesity among Rhode Island residents. In 2005, he established Shape Up RI--a statewide exercise and weight loss challenge. Since then, over 35,000 Rhode Islanders have participated in the program including my staff and me, and I can personally attest to its fun and effectiveness. I had the pleasure of meeting with Mr. Kumar earlier this month to discuss the great work he has done to encourage personal responsibility in an engaging and innovative new format, and I look forward to the continued growth and success of Shape Up RI.

Mr. WHITEHOUSE

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

Mr. WHITEHOUSE. Madam President, I ask unanimous consent to speak as in morning business for up to 20 minutes.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Madam President, I have spoken many times on this floor about the urgency of the need to reform our broken health care system, to expand access to insurance, to improve below average results, and to bring down costs. In a speech to the joint session of Congress, the President eloquently described the challenge of this moment: I am not the first President to take up this cause, but I am determined to be the last. It has now been nearly a century since Theodore Roosevelt first called for health care reform. And ever since, nearly every President and Congress, whether Democrat or Republican, has attempted to meet this challenge--in some way. . . . Our collective failure to meet this challenge--year after year, decade after decade--has led us to the breaking point. We are at the breaking point for Nancy from Barrington, RI, a single mother and accomplished music teacher who lost her full-time job and currently teaches part time at a local university. Nancy has paid the full cost of health insurance out of pocket so her two children would not go without coverage. But now they have graduated from college, they are no longer eligible to be on her insurance policy, and they work at jobs that don't provide health care benefits. So Nancy is now thinking about selling her home, their childhood home, to prevent her family from going without health insurance. Nancy writes: Between the three of us, we are desperate for a workable solution to our health insurance needs. For the first time in my life I feel utterly disenfranchised by my own society. We are at the breaking point, not just for Nancy but for so many Rhode Islanders who have shared with me their stories--stories of loss, stories of sorrow, stories of frustration, stories of personal and family disasters, in a treacherous health care system that offers all the care you need until you need it. We are also at the breaking point nationally. Our country's economic future may well depend on the reforms and investments we now craft to control costs and wring savings from the system. One measure of the potential savings is the recent report of President Obama's Council on Economic Advisers, comparing the share of America's gross domestic product spent on health care to the share spent by our industrialized international competitors, and evaluating the wide variation in health care expenses region to region within the United States. The report estimates annual excess health care expenditures of about 5 percent of GDP. That translates to over $700 billion a year in excess cost. They are not alone. The New England Health Care Institute reports that as much as $850 billion in excess costs every year ``can be eliminated without reducing the quality of care.'' That is $850 billion. Former Treasury Secretary O'Neill, the Treasury Secretary in the Bush administration, has written recently that the excess cost in our health care system is $1 trillion a year. The Lewin Group, a consulting firm that is well regarded on health care issues, has estimated that excess cost exceeds $1 trillion per year. So is it $700 billion a year? Is it $850 billion a year? Is it $1 trillion a year? Whatever it is, it is a savings target worth an enormous executive and legislative effort, particularly when the evidence is that achieving these savings will actually improve health care for the American people. Where will these savings come from? Well, the savings await us in quality of care. For instance, the Keystone Project in Michigan reduced infections, respiratory complications, and other medical errors in some of Michigan's intensive care units between March 2004 and June 2005, a little over a year. The project saved 1,578 lives, 8,120 days that patients otherwise would have spent in the hospital but did not have to because they did not get the infections or the complications and, as a result, over 165 million health care dollars, just in Michigan, just in intensive care units, just in 1 year, and not all of the intensive care units. In my home State, the Rhode Island Quality Institute has taken this model statewide with every hospital participating. We are already seeing hospital-acquired infections and costs declining. There is a similar opportunity in disease prevention. The Trust for America's Health found that investing $10 per person per year in programs that increase physical activity, improve nutrition, and prevent tobacco use could save the country more than $16 billion annually within 5 years. Out of that $16 billion in savings, Medicare would save more than $5 billion, Medicaid would save more than $1.9 billion, and private payers would save more than $9 billion. So that is quality of care and prevention. A third area for significant efficiencies and savings is the insurance industry's contentious, inefficient billing and approval process. The battle over approvals for treatment and claims for payment creates a colossal burden on our health care system, causing perhaps 10 to 15 percent of the insurance industry's expenditures because the hospitals and the doctors and the providers have to fight back. That 10 to 15 percent of the insurance companies' expenditures casts a cost shadow over the provider community which is probably bigger than the insurance industry spends, because they are less efficient at fighting back than the insurance company is at tormenting them. It all adds no health care value. None. It is pure administrative costs and cost shifting. Rhode Island providers have told me over and over that half of their personnel are absorbed in this battle and not providing health care. They are at the doctor's office, they work there, but they are not providing health care. They are busy fighting with the insurance company. Even the insurance industry estimates that $30 billion per year could be saved through simplifications of the process. That relates to a fourth area, the overall inefficiency and waste that plagues the private insurance market. While administrative costs for Medicare run about 3 to 5 percent, overhead for private insurers is an astounding 20 to 27 percent. A Commonwealth Fund report indicates that private insurer administrative costs have more than doubled in the past 6 years. From 2000 to 2006, they increased 109 percent. The McKinsey Global Institute estimates that Americans spend roughly $128 billion annually--$128 billion annually--on excess administrative overhead in the private health insurance market. A fifth savings area is investments in our infrastructure of health information technology; secure electronic health records, for instance, electronic coordination between your doctor and your specialist and your pharmacy and your hospital and your laboratory. These investments promise big savings as well, $162 billion per year, according to one RAND study, and possibly twice that. Finally, reform of how we pay for health care will yield enormous dividends. At the moment we mostly pay on a piecework basis. The more you do, the more you are paid. No surprise that we do a lot and pay a lot. Since the best care, the best quality care is so often less intrusive but better designed and better coordinated, this payment reform presents another win-win opportunity: better health care and lower cost, hand in hand. There is a problem, though. For many of these reforms, CBO cannot fully score the savings they would yield, and thus their importance has been minimized in our debate. CBO can only estimate health care costs and savings that have historic precedent. For example, on the cost side we have the experience of Medicaid, and the Children's Health Insurance Program. So CBO can estimate how much it will cost to expand the coverage to needy families, as we importantly do in this bill. On the savings side, however, CBO's capability is limited because there is not a lot of information to forecast from. CBO's Director has been refreshingly candid about this. In a recent letter to Senator Conrad, he wrote the following: . . . changes in government policy have the potential to yield large reductions in both federal health expenditures and federal health care spending without harming health. Moreover, many experts agree on some general directions in which the government's health policies should move, typically involving changes in the information and incentives that doctors and patients have when making decisions about health care . . . Yet, many of the specific changes that might ultimately prove most important cannot be foreseen today and could be developed only over time through experimentation and learning. So to summarize: Large reductions in costs are possible. The general direction in which to move to achieve them is agreed. But experimentation and learning are necessary to get there. Even with those analytical limitations, CBO has recognized some cost savings created by several innovative reforms in the Finance Committee's bill. For example, CBO forecasts that an independent nonpartisan commission of experts with authority to determine provider payment rates under Medicare will save the Treasury $22 billion over a 10-year period. It also credits Medicare payment reforms that seek to prevent hospital readmissions with $2.1 billion in savings; incentives that encourage physicians to group together in cost savings organizations with $4.9 billion in savings, and payment reforms aimed at preventing health care-acquired infections with $1.5 billion in savings. But as you have seen, in comparison to the numbers I talked about earlier, those are trivial projections, chump change against the excess cost of our health care system. Americans owe the Congressional Budget Office a particular debt of gratitude for how incredibly hard they have worked these past weeks and months. CBO performs a valuable service. But its professional discipline requires it to score legislation basing its calculations on what it can chronicle has happened in the past. And we have not yet been where we need to go in health care reform. Moreover, getting there will require leadership, creativity, and perseverance in executive administration, with constant adjustments and improvements along the way to achieve our goal. Those factors of executive administration are beyond the capability of CBO to predict. The distinguished Presiding Officer was the Governor of the State of New Hampshire. She knows well, having served as Governor, what a difference executive administration can make in areas where there is intelligent and sustained focus. Well, CBO cannot predict whether intelligent and sustained focus will occur, so they cannot predict the answer to that question. Let me mention one further reform now that we are on the subject of executive administration, a final reform that can bring leadership and creativity toward achieving all of these goals in quality, in prevention, in payment reform, and in information technology. That is the reform that can bring leadership and creativity to pulling all of those reforms together, a public health insurance option, a government- run publicly handled plan that can provide affordable coverage in a market where premiums have increased 128 percent in 8 years. A public option can bring vigorous competition to a market so monopolistic it would make Andrew Carnegie blush, will force private plans to minimize bloated administrative costs which have increased, as I said, 109 percent over those 6 years. The public option can pass along savings to consumers in the form of reduced premiums, and can end the wasteful practice of fighting with doctors and patients over reimbursement. The public option is our best chance for executive implementation of the delivery system innovations and reforms I have described. Skillful executive administration will be required just as for every other element of reform. But public plans across the country, driven not by private motives but by the public good, set new standards of quality and efficiency in a market that has lost its way. The point of this reform must be to turn around a health care system that is now spiraling out of control. We spend 18 percent of our GDP on health care. The next highest spending nation in the world is Switzerland at 11 percent. Even if our success is limited to shaving a few percentage points off our national expenditure on health care, that success will be worth hundreds of billions of dollars a year. Yes, there will need to be an initial investment in health care reform, but the potential savings are multiples larger. CBO's inability to score these savings does not mean they aren't real and achievable. Given the looming threat to America's fiscal security that is now presented by our health care costs, these savings are not only real and achievable, they are essential. They are necessary. We are bound to achieving them, and we must not fail. For that reason, I call on the Obama administration to begin defining a health care savings target from delivery system reform--from health information infrastructure, from quality improvements, from illness prevention, from more transparency and less bureaucracy, from reform of what we pay for in health care and, ideally, all implemented rapidly and fairly by public plans around the country. They need to set a target. If the administration does not set a savings target, there is no way the vast apparatus of the Federal Government will wheel adequately toward achieving this goal. If we fail to achieve those savings, all our dreams--our dreams of universal coverage, our dreams of affordability, our dreams of a public option--will crumble like castles built on sand. Let's take the most conservative number from President Obama's own White House, $700 billion a year in annual excess cost. Let's assume the best we can do is to eliminate less than one-third of that excess cost--not all of it, not even half of it, less than one-third. Let's assume it takes a few years to meet that goal; let's say 4 years. That would still permit reform savings of $200 billion a year by 2014. By then, our annual health care expenditures will have climbed well over $3 trillion. So that $200 billion annual savings would be only one- fifteenth, about 7 percent, of the cost, then, of our bloated health care system, a system now costing twice as much as other developed nations' health care systems that cover everyone. That goal, 7 percent off a system that costs twice as much as in other nations, does not seem unreasonable. I will ask the administration: What is your annual savings target out of that $700 billion to $1 trillion a year in excess cost? What is it, and when will you achieve it? Soon you will have a bill out of this Congress that gives you the tools to achieve these savings. When you have that bill, I will ask for a number and a date. I will urge the administration: Be bold. President Kennedy did not know how to get to the Moon when he promised that we would, but he knew we had the talent and the technology to do it, if we had the President's commitment behind it. Sure enough, it happened. I would also remind the administration of this: We have to achieve these savings anyway. This is not an extra political hurdle the administration would have to clear. This is the bar we must clear if our Nation is to return to fiscal health and if our dreams of universal coverage and affordability and good public health and a humane, efficient health care system are all to be realized. Again, if we don't clear that bar, all those dreams crumble in our hands like dust. Let's step forward now and make a commitment to some hard, firm measure of savings out of our bloated and inefficient delivery system. I thank the Chair. I yield the floor and suggest the absence of a quorum.