Mr. BAUCUS. Mr. President, the Senate returns today to creating jobs. Today, we return to the HIRE Act.
This bill provides incentives for businesses to hire new employees, and it encourages businesses to invest in building their operations.
It has a payroll tax exemption for newly hired employees. It provides continued funding for the vital Federal highway program. It expands the successful Build America Bonds program. And it extends the tax incentive in section 179 of the Tax Code, which allows small businesses to expense capital expenditures, instead of depreciating them over time.
These proposals will help to get Americans back to work.
The Senate passed the HIRE Act last month, with strong bipartisan support.
Since then, the House of Representatives considered the legislation and returned it to the Senate with some modifications.
The HIRE Act includes the Schumer-Hatch payroll tax exemption for newly hired employees. This is a straightforward tax cut: If you hire a person who has been unemployed for 60 days, you don't have to pay your share of the Social Security payroll taxes for that person for the rest of the year.
And if you keep the newly hired person employed for 1 year, you get an additional income tax credit.
The House modified the Schumer-Hatch payroll tax exemption to allow employers to receive the exemption if they pay the railroad retirement tax instead of the Social Security payroll tax.
The House also included modifications to ease implementation of the payroll tax exemption.
This payroll tax exemption provides a simple and immediate tax incentive for businesses to employ new workers, right away. A business can use the cash that it saves from the payroll tax cut to help pay the wages of the new employee. Or it can invest in equipment. Either way, the incentive will help boost hiring and help businesses.
The HIRE Act will also create jobs in the transportation sector, by extending the 2009 highway funding level through the end of 2010.
Highway construction plays a vital role in our economy. The Department of Transportation estimates that every $1 billion in Federal highway spending--when coupled with the State or local matching share--creates or sustains 34,500 jobs. These are jobs in construction, engineering, manufacturing and other sectors hard-hit by the recession.
The HIRE Act keeps the program working.
The HIRE Act also expands the successful Build America Bonds program. Last month, Treasury Secretary Geithner testified before the Finance Committee that the Build America Bonds program is the most successful [Page: S1501]
stimulus program based on jobs per dollar.
And the HIRE Act extends the enhanced expensing provision in section 179 of the Tax Code. This valuable tax incentive allows small business taxpayers to write off up to $250,000 of certain capital expenditures in 2010, instead of depreciating those costs over time.
This helps small businesses to pay less in taxes now, and thus meet their needs for cash in this difficult time.
The American economy has lost more than 7 million jobs. And the unemployment rate is near 10 percent.
We need to help people to get jobs. We need to do more to help businesses to hire more workers. The HIRE Act does just that.
And so, let us help America's businesses to create more jobs. Let us complete our work on this commonsense legislation. And let us send the HIRE Act to the President, so that this law can start creating jobs right away.
Mr. REID. Mr. President, we are now postcloture. It is my understanding that my Republican colleagues wanted some opportunity to talk about this bill. We certainly have no problem with doing that.
I ask, however, that we have a definite time to vote on this legislation. I hope we could do it before our caucuses tomorrow. I ask my distinguished friend, the Republican leader, to comment on when he expects being able to vote on this legislation.
Mr. McCONNELL. Mr. President, my members are here and ready to talk. We are going to be talking about health care, which is the most important issue in the country. We are fully prepared to discuss it throughout.
Mr. REID. I appreciate very much my friend being candid in that regard. I ask unanimous consent that we have the vote on this matter by 12 o'clock noon tomorrow.
Mr. McCONNELL. Mr. President, as I just indicated, we are here. We have been notified by the other side that they wish to have a lengthy discussion. We are here and prepared to do that and fully intend to talk about what we view as the flaws in the health care proposal that will be voted on in the House apparently sometime later this week. Therefore, I object.
Mr. REID. Mr. President, we in America today have a major problem, and that is jobs. I appreciate the bipartisan support of this bill; it has been bipartisan, but we need to get to this bill and pass it so we can start having small businesses take the tax credits that are going to be available in this legislation to allow the Build America bonds to be replenished. We need to make sure that the highway budgets go forward as quickly as possible.
I understand the efforts to divert attention from the issue at hand, but there is going to be plenty of time to talk about health care. Let's get this done. The bill we are on now--when we finish this bill, there is the FAA bill. There are amendments in that regard that have been offered. As we know, Senators can speak about any subject they want. But let's get off health care for a few hours and get jobs. This bill should go to the President tomorrow so people can start being hired.
For example, I have a provision in this bill that will allow $45 million that [Page: S1502]
has already been appropriated, to be reprogrammed--in fact, I use that term, but it will be directed by this bill--it will go to the transportation departments of Nevada, $45 million. The highway departments in Nevada will build things to create jobs. That is what we need to do.
We understand the concern people have with health care, but this is a jobs bill. I hope that tonight if my Republican colleagues want to talk about health care they will take a little consideration and understand that this is a jobs bill. But the jobs before us are dealing with this beautiful bill that has passed--bipartisan, a bill that will allow small businesses to take a tax credit if they hire somebody who has been out of work 60 days.
It will allow someone who has a small business who wants to buy a new machine, a new desk, new office equipment to write that off--not depreciate it but write it off. Of course, saving 1 million jobs with the highway bill and the Build America Bonds.
Mr. SCHUMER. Is it not true, Mr. Leader, by the rules of the Senate, that the minority could spend time talking about health care tonight, without holding up the jobs bill; that they could let the jobs bill go forward and then talk about health care all they wanted?
Mr. REID. The answer is yes. I say to my friend from New York, we would be happy to give consent, if they want to talk all night on health care or whatever they want. That is fine--and we would be able to respond to that, of course--but let us get this done. There are people waiting to buy things. Not only does this help small business and help them purchase items, but the businesses are going to buy them--up to $250,000. In Reno or Las Vegas, this is big-time stuff, and I would think the same
is true all over the State of New York.
Mr. McCONNELL. My good friend, the majority leader, left out one thing, which is this is the second time he has done what is called filling the tree. What that means to the constituents we represent on this side of the aisle is, we got to offer no amendments, no amendments whatsoever, to this bill. This is the second time and the 27th time the majority leader has filled the tree, thereby denying to the minority an opportunity to offer any amendments at all.
We can argue, I guess, about the relative merits of this bill. What we do know for sure is that $47 billion of it is not paid for. So it adds that much additional money to the deficit. We also note, for sure, the one kind of jobs this administration has been able to produce is government jobs.
As a result of the spending binge we have been on for the last year, we have added 120,000 government jobs. In America, if you work for the government, you make an average of $70,000 a year. If you work in the private sector, you make an average of $40,000 a year. We have had a job boon all right--with the government. Of course, the stimulus package principally benefitted State governments, which were very happy to have the money so they did not have to pare back their employment.
So we are interested in talking about jobs all right, but health care is what the majority has been trying to ram through the Congress over the last year. It is the big issue this week. I am sure Members on my side of the aisle who will speak tonight will indeed talk about jobs, but we also fully intend to talk about the health care bill that will be voted on over in the House that cuts Medicare by $ 1/2 trillion, that raises $ 1/2 trillion in new taxes, and is replete with special deals. We
now understand the fix-it bill--the second bill that will come after the health care bill--will not fix all the special deals; maybe only one of the special deals. So we will have on opportunity----
Mr. McCONNELL. We will have an opportunity to discuss all these things, and what I would suggest to the majority leader, if he wants to maximize the time, we could simply agree to vote on this bill at 9 a.m. on Wednesday and then go back to the FAA bill, upon which we have made substantial progress. That would be another way to advance the ball, which I would suggest.
Mr. REID. Mr. President, my friend from Kentucky said it all in the last statement. He would be willing to agree to have a vote at 9 a.m. on Wednesday morning. Why in the world would we want to waste American taxpayer dollars sitting around here not sending a bill to the President? This is a bipartisan bill. It is a bill that has been widely acknowledged to be approved by groups such as the liberal-minded Chamber of Commerce, the National Chamber of Commerce, and other such groups. It is a bill
that is so badly needed in this country.
I would also suggest to my friend, I don't know of a single government job that would be produced with our HIRE bill. I don't know of a single job because everything we have done in the four provisions will create jobs in the private sector--thousands and thousands of jobs, new jobs, in the private sector.
Mr. SCHUMER. Again, first, there are four provisions in this bill: One is the highway bill, which as I understand it hires private sector people to build highways; is that correct?
Mr. REID. I would also say, Mr. President, the State of Kentucky and the State of Nevada have been having tremendous problems with a number of programs, one of which is Medicaid. One of the things we did in our recovery package was to give all 50 States--Nevada and Kentucky, all 50 States--some help with their Medicaid. The cost of health care is wreaking havoc with our States. There is nothing wrong with doing that. We have an obligation. Medicaid was a program we started back here. To talk
about the States getting some kind of a big benefit they do not deserve I don't think is right.
I met 2 weeks ago tonight in Room 219 with 12 Governors. They handed me a letter signed by 48 Governors all saying: We need some help, and one of the places we need help is with Medicaid. These health care costs are skyrocketing. Even though we have given help, there are very few States in the Union that haven't had massive layoffs.
Again, I would hope we could get this out of the way and have a discussion on health care at some subsequent point. There is another bill that this is holding up. This bill is going to pass, and I appreciate very much my Republican colleagues voting for this legislation, but let's not waste 30 hours because we are not only holding up sending this bill to the President but we are holding up finishing work on the Federal Aviation Administration bill.
My friend has wanted to offer amendments. Amendments are being offered [Page: S1503]
on this legislation as we do on most everything. I have been very nonrestrictive in how I have handled the floor. Of course, there have been occasions when we have done what has been done here for generations; that is to say, at this time, we are not going to have, on a bill dealing with jobs, an abortion amendment, we are not going to have an amendment on gay marriage or on income
tax. On things such as that, there comes a time.
On this FAA bill, the first year--the first year--the
experts tell us will create 150,000 jobs, but not only that, it will make air travel safer. We will have the air travelers' bill of rights. We will have, for the first time in the history of this country, a GPS system for our aircraft which will allow us to do more flights into airports and to make it safer.
I would hope we don't waste this time. It is Monday night, it is 10 after 6. Let's not waste tonight and tomorrow and into Wednesday. Let's get off this, get to FAA, and if somebody wants to give a health care speech and beat up on Obama, let them do it on the FAA bill.
Mr. McCONNELL. As you can see, we are all in the mood for a spirited debate, and I know the junior Senator from Florida is on the floor and anxious to begin the discussion.
Mr. REID. Before my friend leaves, if I could just say this. I think we could probably accomplish what we both should want by saying: OK, let's vote at a reasonable time Wednesday morning on this jobs bill, but in the meantime--in the meantime, all day tomorrow--let's work on the FAA bill. That way we would accomplish two very important things.
I would hope my friend would consider that. That way we could not only have a time certain where we are going to pass this bill--the HIRE bill--but we could also work on FAA. We have Senators waiting to do work on the FAA bill.
Mr. McCONNELL. Mr. President, if I could respond to the majority leader's suggestion, it may very well be worth talking about. As I understand the suggestion, it is that we lock in a time for a vote certain, such as the one I suggested, at 9 a.m. on this bill, and we resume consideration of the FAA bill between now--tomorrow--and then.
Mr. McCONNELL. I think that is a matter worth talking about. Why don't we put in a quorum call and have that discussion.
Mr. WYDEN. Mr. President, we are going to have the leadership discuss the process for moving forward, but I wish to take a minute and talk about one of the important bipartisan provisions in the jobs bill. I think colleagues know it is never hard to get me to focus on the health reform issue, and we are certainly going to be doing a lot of that in the days ahead, but our constituents want us to focus on jobs as well and particularly a jobs effort that is going to work. We have that in the Build
America Bonds program. I say to colleagues, the Build America Bonds program has far exceeded even the optimistic projections some of us had for this program.
I have been involved in the development of this program now for 6 years. Senator Thune, on the other side of the aisle, has worked very closely with me. When we started our work on the Build America Bonds program, our hope was that perhaps $4 billion or $5 billion worth of these Build America Bonds would be let. What we have seen is that now close to $80 billion worth of these bonds have been issued. They are literally selling like hotcakes. They have revolutionized municipal finance,
and some have projected that perhaps this year $150 billion worth of these Build America Bonds will be sold.
So Build America Bonds work, and they put people in the private sector to work as well. In my home State of Oregon, it has been proven, time and time again, that private investment follows well-targeted public investment. That is what we are seeing with this bipartisan program, and that is why colleagues on both sides of the aisle have proposed expanding it.
I note my good friend, Senator Thune, on the other side of the aisle, is here. He and I have worked hand in hand on this effort because we wanted to have something that would create jobs in our country that was nonpartisan.
The reason Senator Thune and I have worked on this effort in a bipartisan way is we wanted to have something that is common sense, we wanted to have a jobs creation effort that responded to basic needs of our country, and we wanted to see it part of an effort where the private sector takes the lead.
I am particularly appreciative the chairman of the Senate Finance Committee is here, Chairman Baucus. I wish to express my appreciation to him and his staff for their help in this effort. We saw in the Senate Finance Committee--Chairman Baucus is here, he remembers our discussions--our projections for Build America Bonds were pretty modest. The reality blew past those projections almost overnight. The projections for Build America Bonds were a few billion dollars, and we blew
past those projections like a bullet train.
Build America Bonds are getting desperately needed funding flowing into local communities, they are creating jobs, and they are helping to strengthen America's infrastructure. Almost $80 billion has been generated. This is in addition to the $80 billion of direct Federal infrastructure spending that has been included in the Recovery Act.
I note that in the HIRE bill there is going to be an effort once again to ensure there is direct support for infrastructure, and we also have this very promising opportunity with the private sector that we have been able to secure with Build America Bonds.
When a project is funded with Build America Bonds, the Federal Government pays a portion of the finance costs. It equals a very small percentage, perhaps a single-digit percentage of the total project cost. The city or State pays almost the entire cost of the project over time.
A project that is funded with direct spending will often have the Federal Government pay 50 percent or 75 percent of the project costs. Some communities need that kind of help to get needed projects off the ground. But when some argued that projects should only be funded with direct spending, I thought it was important to look for other opportunities. That is why Build America Bonds came into existence. It is not possible, given the enormous needs for infrastructure improvements, for roads and
bridges and transportation systems, to rely just on direct spending or rely just on bonds. What we ought to do is what we have done here in the Senate on a bipartisan basis; that is, put more options in the tool box for funding infrastructure. Of course, direct spending will be important. What we have seen is Build America Bonds take off as an additional tool.
In my home State, in the Dayton School District, they are using Build America Bonds to employ up to 150 people building and remodeling classrooms. By using Build America Bonds, this small school district in my home State saved an estimated $1.2 million in interest costs.
Up in Washington State, in Grand Coulee, the Coulee Medical Center was able to finance a new hospital building with Build America Bonds, saving more than $7 million in finance costs. They were able to start construction immediately. We had discussion on the floor earlier--are these government jobs? What that project did was put people in the private sector to work--construction workers, plumbers, electricians, tradesmen. Once the building, of course, is completed at the end of the year, doctors
and nurses, clerks and [Page: S1504]
support staff get to work in the new hospital.
Recently, a joint Congressional Budget Office-Joint Tax Committee report highlighted other benefits flowing from Build America Bonds. As my friend Senator Thune, who is in the Chamber, knows about Build America Bonds, this report shows that tax-credit bonds, such as Build America Bonds, can be more effective than tax-exempt bonds. The report also concluded that because the bonds are more attractive to investors, they are more efficient at raising capital.
Once again, Democrats and Republicans have been able to come together in the Senate to advance a fresh approach that saves municipalities time and money and effort that can otherwise be devoted to other priorities.
Aside from the fact that the funds are raised efficiently, they are answering a cry we hear again and again; that is, get the job done quickly. People are frustrated that sometimes it takes eons for government to work out the particular project, particularly in the transportation area. Bond funds need to be spent within 2 years of the date the bond is issued. What that means is money is not just flowing into projects, it is being spent in the short term. People get back to work quickly. You get
more bang for your dollar, and that obviously is what Americans are asking for, and Build America Bonds deliver.
Back in the days before these bonds were issued, the market for the traditional, normal municipal bond was just about frozen. It was hard to sell them. Now Build America Bonds have changed that. The private sector is strongly supporting this program. Groups such as the Chamber of Commerce and the National Association of Manufacturers and businesses across the country are saying they need a fresh approach to build infrastructure. Particularly with Build America Bonds, we are now seeing businesses
say this is an approach that gives them a long-term boost to what they know they can count on. They can plan new avenues for their businesses when they know there is going to be infrastructure there to support it.
It is not, however, just businesses that are buying Build America Bonds. Nonprofits such as pension funds are finding these bonds are an attractive investment. Nonprofits cannot benefit from the tax credits, but bond issuers can pass on the value of the tax credits in the form of a higher interest rate for Build America Bonds than other types of bonds. By contrast, traditional tax-exempt municipal bonds have not been a good investment for pension funds and other institutional investors that do
not pay taxes. What Build America Bonds have been able to do is provide a way for nonprofits to invest in American infrastructure that traditional tax-exempt bonds don't provide.
We are not surprised that Build America Bonds are reinventing the municipal bond market. We were told by people in the private sector, in the States, in the finance community, all across the country, that they thought this was a chance to, in effect, unfreeze the municipal bond market that had been frozen in Illinois, in Oregon, in South Dakota, and across the country. In some cases, these bonds are going to make the difference between whether the infrastructure projects come to fruition. In
other cases, they are going to lower the cost of the projects and allow the community to reinvest the savings in other projects.
By any scenario, the Build America Bonds program helps local government, local businesses, and those who rely on them for jobs and dependable infrastructure. In my view, that is exactly what the American people are looking for from their elected officials--something that works, something that is common sense, something that is bipartisan, something with a proven track record. That is, in fact, the Build America Bonds program.
Let me close with one last point. There have been discussions--and we have been in consultation with Chairman Baucus and the Senate Finance Committee staff on this--about financial institutions and whether the fees they are charging are appropriate for the issuance of Build America Bonds. First of all, it has been the position of Chairman Baucus, myself, and others that anybody who tries to take advantage of State and municipal issuers needs to understand that the Senate Finance
Committee is going to have a zero tolerance policy--zero tolerance policy--for ripping off the taxpayers. This program is designed to create jobs and make infrastructure funding more efficient and certainly not create any opportunities for somebody to try to skate around the rules and to take advantage of taxpayers.
In the Senate Finance Committee--and I am very appreciative of Chairman Baucus taking this approach. The Congress included a 2-percent limit on the amount of fees issuers of Build America Bonds can charge. In practice, the typical fee, in fact, has been far less than the statutory maximum fee that is allowed.
As the market for Build America Bonds has grown--and I
pointed out that it has mushroomed far beyond projections--the fees have kept coming down. They have come down close to the levels currently charged for tax-exempt bonds. With Build America Bonds having become well established--in fact, they now represent 20 percent of the municipal bond market--in our view, there simply is no longer a justification for charging a higher fee.
As the expiration of the Build America Bonds program approaches at the end of the year--and I am very glad the administration has proposed making the program permanent--I intend to keep monitoring the fees charged for issuing the bonds. If some can present the case that it is appropriate to further reduce the statutory cap on fees, I am certainly open to listening to it. I want to make sure every single dime of taxpayer money goes to these bondholders.
I am open to listening to any suggestions and any ideas to make a program that works, a program that Senator Thune and I have worked on together for many months that is working--we are certainly open to ideas for improving on it.
I see my friend from Florida is anxious to speak. I appreciate his desire to talk tonight.
Let's keep focusing--whether it is health care, whether it is transportation, whether it is tax reform--on ideas that bring the Senate together. I wanted to take a few minutes to talk about Build America Bonds specifically tonight. Again, the chairman of the Finance Committee is in the Chamber. I am very appreciative of his support and Senator Grassley's support. As the majority leader, Senator Reid, noted earlier tonight, we have to zero in on jobs. There is no economic multiplier
out there like jobs. If you put people to work, as I outlined--construction workers, electricians, plumbers--restaurants make the sandwiches to feed all the men and women who are doing the work. Let's keep coming back to approaches that bring both sides together. I have tried to do that in health care, in tax reform, and certainly in transportation,
where Senator Thune and I have been able to team up on something that works and is being used around the country. Let's remember that is what is needed right now when our folks are hurting. When they are looking for approaches that are common sense, that are nonpartisan, we can give them one specifically with the Build America Bonds program.
I yield the floor.
Mr. LeMIEUX. So you are not going to be able to keep your health insurance, for a lot of Americans, if you like it, and the cost of health insurance is not going to go down. Those two myths have been busted.
Myth No. 3: This plan, the Democratic plan, will lower costs, lower the cost of health care overall. We have all heard about--and I said before the rising cost of health care, 130 percent in the past 10 years. There is an expression, ``bending the cost curve down,'' making sure that we can get control of costs. This plan is not going to do that. This plan does not have mechanisms, true mechanisms in it to really control costs.
In today's Washington Post, Robert Samuelson takes on the President's claim that his plan will control costs.
In this article, he talks about the fact that when people get insurance they use more health services; that spending rises and by the government's latest forecast health spending goes from 17 percent of the economy in 2009 to 19 percent in 2019.
According to the CMS Actuary, he estimates overall national health expenditures under this bill will increase by an estimated total of $222 billion during 2010 to 2019.
It is also going to increase the government's share of health care spending. According to the CBO, under the legislation, national outlays for health care would increase by $210 billion over the next 10 years. So we are just chasing our tails. We are going to put a lot more money into health care, but we are not going to reduce costs.
How could we reduce costs? How do we get at the problem of increased health care? Well, we could try to foster more competition among health insurance companies instead of creating these subsidies, which is going to plow more money into the insurance companies.
We could make the insurance companies compete across State lines. That is one of the ideas the Republicans have brought forward. We also could go after meaningful lawsuit reform. There is one estimate we would save more than $50 billion a year if we had meaningful lawsuit reform.
My colleague, Senator Coburn from Oklahoma, talks about the fact, being a practicing physician, that doctors are engaged in defensive medicine, and when thousands of kids across this country this year get hit in the nose with a baseball they are going to show up at the emergency room. Instead of just watching the patient and making sure the kid is going to be OK, they are going to order a CT scan even if one is not necessary because that has become the standard operating procedure in
order to protect the doctor from lawsuits.
The CBO says if we had real medical malpractice reform, we could save as much as $54 billion over the next decade. We also do not have transparency. Here is the essential problem with health care costs. We do not know what anything costs.
In the next couple of days my wife and I are going to be fortunate enough to have our fourth child. She is due any day now. When we go to the hospital, we are going to get back--after that baby is born, just like we have done with the last three kids, we are going to get back a bill. It is going to be page after page after page of things that we cannot understand.
At the bottom of the bill, we will pay some small fraction because we have good health insurance in the Senate. We will pay some small fraction of the total bill, and we will never question the pages and pages and pages of line items of information we do not understand.
We will not because we do not have to pay for it, and we, as consumers, have been removed from the transaction in health insurance because of third-party payers, whether it be Medicare, Medicaid, or insurance companies. We are not involved in that transaction.
Now, let me give you a different example. If we had to look at that bill because we were responsible for a portion of it because we were given, say, a tax credit to go out and buy insurance, and we were trying to get the most bang for the buck, and they tried to add $75 for a bedpan or gauze or for Band-Aids, Mrs. LeMieux would not pay for that. Mrs. LeMieux would be in there saying: Wait a minute. I can go to Target and I can get Band-Aids for $1.50, not $75.
I guarantee you that the men and women of this country, if they really had to look at those bills because they really had to pay them, we would not have these exploding costs. We also would not have all of the cost shifting that is going around.
The dirty secret about health care is that if I have insurance, my full payment on insurance or close to the full payment is going to pay for the Medicare patient and the Medicaid patient because Medicare and Medicaid do not pay enough for the services they render.
The hospitals cost shift all the money around. At the end of the day, we don't have a transparent system or a market-driven system. What we should do is give every American who needs it a tax credit to buy health insurance on their own. If they were out in the marketplace, that would lower cost, because competition would reign and they would insist on bang for their buck. But that is not in this bill. We know now that, one, you will not be able to keep, in a lot of cases, your health insurance,
if you like it. We know, two, it is not going to reduce your cost of health care. And we know, three, it will not lower the cost of health care in general. Those myths have been busted.
Let me go to the next one, myth No. 4: The Democrats' plan will reduce the deficit. We have heard this estimate that over $100 billion is going to be saved over the next 10 years. Not true. The way this is scored or evaluated by the CBO is that whatever you send them, they have to give you an answer back on the confines and the specifications of what you sent. So the Democrats' bill has 6 years of spending or benefits and 10 years of taxes. If they have 10 years of taxes and only 6 years of spending,
then they can get to a situation where the CBO will come back and say: It is going to reduce the deficit. But if you compare apples to apples, spending to deficit, if you compare spending to taxes, we know it is going to run a deficit. You cannot create a new
entitlement program and not run a deficit. It is going to cost us, by some estimates, more than $400 billion over a 10-year period, in the first 10 years, and $1.4 trillion in the next 10 years. We know that myth is busted. It is not going to reduce the deficit.
Let me also say this is going to be a budget buster for States. The States, unlike the Federal Government, have to make ends meet. The States have balanced budget requirements. As we increase the requirements of Medicaid, which this bill does, then we will be putting increased burdens upon our States. Our States are going to have to find more money to put into Medicaid. They can't print money like the Federal Government. They can't spend more than they take in. What is going to happen? They are
going to have to cut other programs, or they will have to raise taxes. What is going to get hurt? I can cite the example of Florida where they are suffering under a huge and emerging Medicaid problem. Medicaid and Health and Human Services is the No. 1 portion of the budget of the
State of Florida. It grows every year. So what loses out? Education, money for teachers and schools, law enforcement, protecting the environment, and economic stimulus. Florida has to live [Page: S1507]
within its means, unlike the Federal Government.
This is not a Republican or Democratic issue. Governors of both sides of the aisle are very concerned about the increased mandates placed upon States. Governor Phil Bredesen of Tennessee called this bill the mother of all unfunded mandates. The head of Washington State's Medicaid Program believes that States facing severe financial distress may say they have to get out of the Medicaid Program altogether.
CBO released its first estimate of expected discretionary spending under this bill, confirming that $10 to $20 billion in discretionary spending over the next decade will be used to implement this legislation. We are going to spend $10 to $20 billion to implement this bill; $5 to $10 billion to the IRS and to Health and Human Services. Also in terms of this topic, of looking at how the plan will reduce the deficit, which it will not, we know this is going to be a $1 trillion program over time.
With rare exception, when this Congress creates a program, especially an entitlement program, it does not stay within its estimates. It grows and grows.
We have a debt. When I first came to the Senate and had the privilege to serve here back in September of last year, we were at something like $11.6 or $11.7 trillion. Now we are already at $12.4 trillion. It is unsustainable.
The fifth myth: Medicare cuts won't affect seniors. This bill cuts half of a trillion dollars out of Medicare. Some say this is savings. The money that is going to be saved is not going back into Medicare to prolong the life of Medicare. We had an amendment from my colleague Senator Gregg who said that any savings would have to go into Medicare. The majority party defeated that amendment.
It makes no sense to me that we would take half a trillion dollars out of Medicare to create a new entitlement program. I can't go back to my seniors in Florida, more than 3 million of them, and say: Your Medicare Program is already facing insolvency in about 7 years, but we are going to take a half a trillion dollars out of it now to create a new health care program.
This could not be good for seniors. On its effect on Medicare, there was a letter from the CBO Director to the majority leader, Senator Reid. He warned that while the effects of the cuts to Medicare remain unclear, they could reduce access to care or diminish the quality of care. Let's go through the cuts: $135 billion from hospitals; $120 billion from Medicare Advantage; nearly $15 billion from nursing homes; $40 billion from home health agencies, $7 billion from hospice. The CMS Actuary
says that many of the Medicare cuts are unrelated to the providers' cost of furnishing services to beneficiaries. That means it is not about savings. That means the money is being taken from Medicare, robbing Peter to pay Paul. He concludes it is doubtful that providers could reduce
cost to keep up with these cuts. The CMS Actuary also finds that because of the bill's severe cuts to Medicare, providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and might end their participation in the program.
What does this mean in plain language? We are not paying these health care providers enough under Medicare, but we are going to take out still more money, and they will not be Medicare providers anymore. They will not provide health care for seniors. If you want to see the future of this, look at Medicaid. Medicaid is even one step worse in trouble than Medicare is. We know now that folks who are entering into the Medicaid system who are trying to find a specialist in a metropolitan area, half
of them can't find a specialist. We know in Medicare, according to a June 2008 Medicare Payment Advisory Commission Report, that 29 percent of the Medicare beneficiaries it surveyed had trouble finding a primary care doctor. That is up from 24 percent in 2007. If the doctor is not in, it is not health care reform.
How can I go back to my seniors in Florida and say: We are creating a new program by taking money out of your program, and you may not be able to find a doctor who is going to see you anymore? That is not conscionable.
Florida will be disproportionately affected by these cuts. It has the second highest population of seniors and highest concentration of seniors in the Nation at 19 percent. Let me tell you how it will specifically hurt one portion of health care for seniors, home health care. I talked to Ron Malone, vice president of Gentiva Health Services, one of the largest providers of home health services in Florida. He said: Look, it is not going to hurt us so much. We are a big company. We can spread costs.
We will get more market share. But it is going to hurt the smaller companies, and a lot of the smaller companies are going to go out of business.
How is that health care reform? Who do we owe an obligation to provide health care more than to our seniors?
I recently visited with the president of the Florida Medical Association, which is the largest physician association in Florida, with 20,000 members. They say:
..... this legislation does not adequately fix what's wrong with our current system. It contains many provisions that would allow government bureaucrats to interfere with patient care decisions and actually raises the cost of health insurance unnecessarily.
This is from the doctors association in Florida. They say it is going to interfere with the doctor-patient relationship and increase costs. Why are we doing this?
The sixth myth I want to tackle is this idea that emergency rooms are going to be less burdened. You hear this justification. People now are uninsured. They go to the emergency room to get health care. If we give folks insurance or they have the ability to purchase insurance at a subsidized rate, they will stop going to the emergency room, and that will lower the cost of health care because emergency room procedures are expensive. It will free up the emergency room for its intended purpose, for
people who really have an emergency. But according to the Urban Institute, after Massachusetts adopted a somewhat similar plan, emergency use remained higher than the national average. More than two-fifths of the visits in these emergency rooms were nonemergencies and, of these, the majority of adult respondents said it was more convenient to check into the ER. More convenient?
We know we are going to be paying health care providers less. What does that mean? There is going to be less of them providing health care. That means your lines at the doctor's office, which are already too long, are going to get longer. So what are folks going to still do? They are going to still show up at the emergency room. If we look at the Massachusetts model, that has happened. We also know that ultimately we are going to have a severe doctor shortage. We have not prepared, nor does this
bill prepare, to make sure we will have sufficient health care providers to meet new demands.
Seventh myth: The Democrats' plan takes on the insurance companies. You have heard the President say we are going to fight against the insurance companies; we are going to make sure that we are putting the patient first. Basically what we are going to do, in reality, is create a lot of new business for the insurance companies. This subsidy plan is going to force a lot of new people into health care with an insurance company. That is why the insurance companies are for it. What we need to do is
empower individuals. What we need to do is give individuals money that is in their own pocket and let them go out and be consumers. If they were consumers, it would lower the cost of health care. What we need to do is let insurance companies compete across State lines so we as consumers have more choices. Look at auto insurance. It is so easy a caveman can do it. In 15 minutes, you can save 15 percent on your auto insurance. These folks are out there competing. We need that in
health care. Why do I only get to pick from the insurance companies that are in Florida? If there is an enterprising insurance company from South Carolina that wants to come into my State and offer cheaper prices, why should I not have that opportunity as a consumer? There are commonsense things we can do, market-driven things we can do that will lower the cost of health insurance and, by doing so, when it is less expensive, more people can afford it and you have more access.
The eighth myth: It has been said that this bill takes an unprecedented step to fight health care fraud. It is [Page: S1508]
going to go after waste, fraud, and abuse, and we will save billions of dollars. In fact, the $500 billion being cut from Medicare is often described as an elimination of waste, fraud, and abuse. It is not. It is just taking money out of that program and putting it in this program. To be fair, there are some provisions of this bill that go after
health care fraud. They are good, but they go around the margins. They are going to save a billion or two, which is a lot of money, I will grant you that, but it is not the kind of money we need to save. We believe there are $60 to $100 billion of fraud in
Medicare every year alone, not talking about Medicaid, not talking about veterans health care, just Medicare, $60 to $100 billion, $1 out of every $7 spent. What we need to do is implement a plan that is going to stop the health care fraud before it starts.
I have a bill, S. 2128, that has bipartisan support, has more than a dozen Senators who sponsor it. It would do three things. One, it would create a person at HHS who would be the No. 2 person at the agency for Health and Human Services, appointed by the President to be the chief health care fraud prevention officer of this country. No other job, not focused on worrying about H1N1, not focused on anything else that should be done in health, focused on stopping health care fraud, someone we could
measure against performance to make sure we are doing everything we can to stop wasting the people's money. The second thing it does is it takes a page from another business that exists in the marketplace that does an excellent job at stopping fraud. There is another business that is about the same size as health care,
about $2 trillion a year. That business, instead of having a $1-in-$7 fraud ratio, has a ratio of 7 cents out of every $100. That is the credit card industry. We have all had this experience. You go somewhere to use your credit card and you get a phone call or an e-mail that says: Did you mean to make that purchase?
If you do not say yes, they do not pay.
What we do in health care is we pay, and then if we think something is fraudulent, we chase. When we chase, the money is gone. The credit cards stop the fraud before it starts.
Now, why couldn't we implement that kind of computer technology? In health care, it is called predictive modeling. So when someone tries to sell a wheelchair 100 times in an hour, the bells go off, the phone call is made, and if it is not verified, we do not pay.
We have people--unfortunately, a lot of them in my home State of Florida--who are bilking the system for tens of millions of dollars a year because it is much easier to steal from Uncle Sam than it is to steal from anybody else because nobody is watching.
One group in town that has evaluated my bill with this predictive modeling system, where we would set up a computer program to stop the fraud before it starts and make people verify when there is a questionable transaction, has said it will save $20 billion a year.
During the health care debate we had last December, I asked to amend my bill on to the main health care bill, and my colleagues on the other side of the aisle objected. Why we wouldn't implement real waste, fraud, and abuse reform is beyond me. But this bill we are talking about does not have it. That myth I, too, believe is busted.
The third part of my bill is, it will require background checks for all health care providers. Can you believe we do not do background checks on people who bill Medicare and Medicaid in this country? We have folks who are convicted felons who are billing alleged ``health care'' providers. It is so bad that in reimbursements for AIDS treatment under Medicare, while south Florida only has 7 percent of the AIDS population, they bill 78 percent of the treatment--only 7 percent of the population and
they bill 78 percent of the treatment. It is just fraud, and it should stop today.
The ninth myth I want to tackle is that this Democratic health care reform bill will not impact the doctor-patient relationship. In fact, it will. I agree with my colleague, Dr. Barrasso, who supports a patient-centered approach. Real health care reform should ensure a doctor and a patient can work together to the best efforts in the health of the patient. As I said before, we are still going to have third-party payers. We have to put the patient back in charge of their health care.
That is the only way we are going to reduce costs.
There is a common thread throughout our governmental programs that has led entitlements to expand and expand and expand; that is, people do not have what is called skin in the game. If I am not paying, I do not care. But if I have to go out as a consumer, if the government would give me a tax credit to go buy health insurance, all of a sudden I am in the game. If I have a reasonable deductible where I have to pay a little when I go to the doctor, all of a sudden I am in the game and I am not
going to ask for a procedure I do not need. I am going to sit there and talk with my health care provider about whether this is something I really need. Now, if you tell me it is free, I will take it. And if you advertise to me on television every drug in the world, I will go to my doctor
and say: Sign me up for that because I get it for free. We have to change the whole structure of how we do health care because this will just continue to expand. Medicare will continue to expand. Medicaid will continue to expand. If this program passes, it will continue to expand.
While it might be great to throw all this money into these programs, we cannot afford it. We cannot afford the programs we have, let alone the programs the majority in this Chamber want.
The tenth and final myth I want to tackle tonight is that taxes will not go up. This is a jobs bill for the tax collector. We already said there is going to be $5 billion to $10 billion to the IRS and HHS to implement this bill. Remember, if you do not buy health insurance for yourself, you are going to have to pay a tax, a fine, a penalty to the IRS--$750 a person. Small businesses that do not provide certain levels of health insurance will be fined. And what do you think they are going to do?
Pay that fine or drop to under 50 employees so they do not have to pay the fine anymore, which will cause more people to be out of work.
Can you believe that in the United States of America, we are going to tax you if you do not buy health insurance for yourself because the government cares more about you than you care about you? If the government can tax you for not buying health insurance, what else can they tax you for not doing? Not working out? Not eating your spinach? That cannot be what our Founders intended.
Remember, we give up our rights to the government. Our institution was created that it governs with the consent of the governed, that we have the inalienable rights. In our social contract, we give those rights up to the government. It is not the other way around. How is it the government can fine me for not doing something?
So at the end of the day, when this entitlement program increases beyond its means, when it is more than we can afford, and when the $500 billion we take out of Medicare starts to put Medicare in insolvency even quicker, what is going to happen? Is the majority in this Chamber really going to cut Medicare? Probably not. So what are they going to do to help pay for this new program without their cuts? They are going to raise your taxes--raise your taxes to levels that are going to be hard to imagine
when you factor in what we are going to have to do for all the other entitlement programs we cannot afford, when you factor in what we are going to have to do with our $12 trillion debt that is estimated to be $10 trillion higher by 2020.
That is why the National Federation of Independent Businesses has said:
When evaluating health care reform options, small business owners ask themselves two specific questions. First, will the bill lower insurance costs?
We know the answer to that is no.
Second, will the bill increase the overall cost of doing business?
The answer to that is yes.
In both cases, the Patient Protection and Affordable Care Act fails the small business test and, therefore, fails small business.
It has been my goal tonight to present facts. I know others have a differing view.
As a Senator from Florida with more than 3 million folks in Medicare, as a Senator who cares about health care reform and wants to create more access but also wants to lower the cost of health care, I cannot support this bill. [Page: S1509]
I hope my colleagues in the House who are being faced with this option of voting for this bill and then passing something on reconciliation will do the right thing. I hope they will not be pressured politically to change their votes from ``no'' votes to ``yes'' votes. I hope they will stand for the people of their State and for the American people.
We could get this right. We could work together on a bipartisan way, as all of the other big, important bills over time have been done, with 70 or 80 Senators working together to do the right thing for the American people. I sign up for that. I am standing ready to do that if that opportunity presents itself. But I cannot vote for this bill that will not lower the cost of health insurance for most Americans, nor will it put us in a situation financially that is tenable going forward.
With that, Mr. President, I yield the floor.
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Mr. BURRIS. Mr. President, I wish to commend my senior Senator from Illinois for his comments on health care and what we must do in this body to pass health care. It is long overdue. It is time for us to work with our colleagues in the House of Representatives to make sure we cover those 50 million Americans who are uninsured.
URBAN PREP ACADEMY
I wish to do a little presentation here for some young men from Chicago. In 2006, a brandnew school opened its doors to the community of Englewood on the south side of Chicago. This school is called the Urban Prep Charter Academy for Young Men. It was designed to provide quality education to an area desperately in need of a new approach.
Local schools were failing. Last year, 93 percent of the public high school students in the neighborhood were classified as low income. The public school attendance rate was around 60 percent. The local high school ranked 81st out of 98 Chicago public schools in terms of preparing students to succeed on college entrance exams such as the ACT.
Until 2006, there were few places to turn. Most residents were unable to afford to send their sons or daughters to expensive private schools. It seemed inevitable that these young people would face an uphill fight to graduate from high school, let alone move on to get a college education and find a good career. It seemed as though there was no alternative and no way to break the cycle.
But then, in 2002, a group of African-American business persons, educators, and civic leaders came together under the leadership of a young man by the name of Tim King, and they decided to find a solution. They started a nonprofit organization designed to give local residents the tools to succeed in college and to build a better future for themselves. They saw beyond the low-income level and the stereotypes and the destructive cycle that kept the neighborhood schools from succeeding. So, in 2006,
the Englewood campus of Urban Prep Charter Academy admitted its first class of students.
Many charter schools are able to cherry-pick their students, selecting from the cream of the crop to ensure a high success rate, but the founders of Urban Prep rejected this idea. They looked at the kids in the Englewood public schools and they saw that every one of them had the potential for success, if given the opportunity. So they selected students based on a lottery system rather than strictly by the numbers. Some 400 names went into the barrel and the names were drawn from the barrel.
Today, the very first class of Urban Prep students is preparing for their graduation date. While other local schools have had attendance rates of only 60 percent, Urban Prep maintained an attendance rate of 91 percent. The local public school ranked 81st at preparing their students for the ACT with an average score of 13.4, but Urban Prep is ranked third, with an average ACT score of 16.5.
When the class of 2010 enrolled in Urban Prep in 2006, only 4 percent of these students were reading at grade level. But today, as their commencement date draws near, I am proud to say that every one of them--100 percent of the first-year class--has been accepted to a 4-year college. Not only that, they were accepted with scholarships, 4-year scholarships.
This is an extraordinary success story. This is a testament to the vision of Tim King and the faculty and staff that he and other local leaders have assembled. I applaud them for their dedication and I congratulate them on this outstanding achievement. Most of all, though, this is a testament to the students of Englewood and to all of the other communities in Chicago--the students who broke the cycle and proved they do have the talent, the skill, and the drive to succeed, if only they were presented
with the opportunity. Thanks to Urban Prep and the leadership of those who founded this organization, these students got that chance.
But the story doesn't end here. In August of 2009, a second Urban Prep campus opened its doors in East Garfield Park, and later this year a third school will open in South Shore, extending the reach of this great organization and expanding the opportunity for Chicago students to realize their dreams.
So in the coming months, as my colleagues and I take up President Obama's update on No Child Left Behind, I urge them to remember success stories such as this one. As we reexamine our educational priorities, I hope we can move in a direction that will provide investment in public schools that need assistance as well as organizations such as Urban Prep. Organizations that grow out of local communities demonstrate a shared interest in seizing the best future for our children. We need to invest
in communities such as Englewood and East Garfield Park and South Shore and dozens of others in Chicago and across the country. We need to make sure more and more students have the opportunity to succeed so they can go to college, find a career, and become productive members of our society and, as I always say, become an asset to society and not a liability to society.
It really does take a village to educate these young people. It takes a [Page: S1513]
steadfast commitment to education and a vision such as the one Tim King shared with others in his community back in 2002. As a member of Sigma Pi Phi fraternity, we played a minor role in assisting Urban Prep with our fund-raising efforts to contribute to the purchase of a uniform for these young men. We also make ourselves available to go there and work with them during career day
to point out our successes and opportunities to challenge them to do no less than what we were able to do. So the men of Sigma Pi Phi worked with these young men at Urban Prep and we made sure that we made a similar contribution to the overall efforts.
Let us renew our investment in America's education system. Let us affirm our priorities for young people today and make sure every one of them has a chance to get the education they deserve. Together, we can build more success stories such as Urban Prep, and that is what we must do. Urban Prep is a public school so, therefore, we do not have to be dedicating all of the resources commitment to the private schools. We can educate our young people in the public system.
I thank you, Mr. President. I yield the floor.
Mr. DURBIN. Mr. President, I ask unanimous consent that notwithstanding rule XXII, the Senate resume consideration of H.R. 1586 at 2:15 p.m., Tuesday, March 16; further, that during any recess, adjournment or period of morning business, postcloture time continue to run; and that after the convening of the Senate at 9:30 a.m., Wednesday, the Senate resume consideration of the House message with respect to H.R. 2847, and all postcloture time be considered expired, the motion to concur with an amendment
be withdrawn, and no further amendments or motions be in order, except as provided in the DeMint motion to suspend; that it be in order for Senator DeMint to offer a motion to suspend the rules in order to offer an amendment, and that if the motion is offered,
Senator DeMint be recognized for up to 10 minutes; that upon disposition of the DeMint motion, the Senate then vote on the motion to concur in the House amendments to the Senate amendment to the House amendment to the Senate amendment to the bill.