96–309 

108TH CONGRESS REPT. 108–754 " ! HOUSE OF REPRESENTATIVES 2d Session Part 2 

REQUESTING THE PRESIDENT AND DIRECTING THE SECRETARY OF 

HEALTH AND HUMAN SERVICES PROVIDE CERTAIN DOCUMENTS TO 

THE HOUSE OF REPRESENTATIVES RELATING TO ESTIMATES AND 

ANALYSES OF THE COST OF THE MEDICARE PRESCRIPTION DRUG LEGISLATION 

OCTOBER 8, 2004.—Referred to the House Calendar and Ordered to be Printed 

Mr. BARTON of Texas, from the Committee on Energy and 

Commerce, submitted the following 

ADVERSE REPORT 

together with 

DISSENTING VIEWS 

[To accompany H. Res. 776] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Commerce, to whom was referred 

the resolution (H. Res. 776) of inquiry requesting the President and 

directing the Secretary of Health and Human Services provide certain documents to the House of Representatives relating to estimates and analyses of the cost of the Medicare prescription drug 

legislation, having considered the same, report unfavorably thereon 

without amendment and recommend that the resolution not be 

agreed to. 

CONTENTS 

Purpose and Summary ............................................................................................ 2 

Background and Need for Legislation .................................................................... 2 

Hearings ................................................................................................................... 3 

Committee Consideration ........................................................................................ 3 

Committee Votes ...................................................................................................... 3 

Committee Oversight Findings ............................................................................... 5 

Statement of General Performance Goals and Objectives .................................... 5 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 5 

Committee Cost Estimate ....................................................................................... 5 

Congressional Budget Office Estimate ................................................................... 5 

Federal Mandates Statement ................................................................................. 6 

Advisory Committee Statement .............................................................................. 6 

Constitutional Authority Statement ...................................................................... 6 

Applicability to Legislative Branch ........................................................................ 6 

Section-by-Section Analysis of the Legislation ...................................................... 6 

2 

Changes in Existing Law Made by the Bill, as Reported ..................................... 7 

Dissenting Views ..................................................................................................... 8 

PURPOSE AND SUMMARY

H. Res. 776 requests the President of the United States and directs the Secretary of Health and Human Services to provide certain documents to the House of Representatives relating to estimates and analysis of the cost of the Medicare prescription drug 

legislation. 

BACKGROUND AND NEED FOR LEGISLATION

On November 20, 2003 the Congressional Budget Office (CBO) 

completed its cost estimate of H.R. 1, the Medicare modernization 

Act (MMA). The official score for this legislation was $395 billion 

over ten years. 

On November 22, 2003, the House agreed to the conference report on H.R. 1 by a vote of 220 to 215. H.R. 1 was subsequently 

signed into law (P.L. 108–173) on December 8, 2003. 

On December 23, 2003 the Centers for Medicare and Medicaid 

Services Office of the Actuary completed its cost estimate of the 

MMA. The CMS Office of the Actuary scored the bill at $534 billion 

over ten years 

On September 15, 2004, Mr. Rangel (for himself, Mr. Dingell, Mr. 

Stark, and Mr. Brown of Ohio) filed House Resolution 776, which 

requests the President of the United States and directs the Secretary of Health and Human Services to provide certain documents 

to the House of Representatives relating to estimates and analysis 

of the cost of the Medicare prescription drug legislation. Specifically, the information requested is as follows: (1) any estimates and 

any analyses made by the Department of Health and Human Services or the Office of Management and Budget relating to the cost 

of any version of the Medicare prescription drug legislation; (2) any 

communications (whether written or electronic) relating to such 

cost estimates or analyses or their release to Members of Congress 

between employees within the executive branch; (3) any communications (whether written or electronic) relating to such cost estimates or analyses or their release to Members of Congress between 

employees of the executive branch and Members of Congress or 

their staff; and, (4) any communications (whether written or electronic) relating to such cost estimates or analyses or their release 

to Members of Congress between employees of the executive branch 

and persons other than employees of the executive branch or legislative branch. For purposes of this resolution the term ‘any version 

of the Medicare prescription drug legislation’ refers to any version 

of H.R. 1 or S. 1 (108th Congress), including the conference report 

on H.R. 1. 

House Resolution 776 seeks information regarding cost estimates 

on all prior iterations of the Medicare prescription drug legislation 

made by Administration officials. The premise of this resolution 

suggests that this information would somehow have been relevant 

to the legislative process that led to passage of H.R. 1. 

The information sought by the resolution is by definition irrelevant to the legislative process that led to the passage of H.R. 1. 

Furthermore, the substance of the information sought, coupled with 

3 

the timing of the resolution strongly suggests the partisan nature 

and political motivations underlying the request. 

As previously noted, CBO completed its estimate of the costs of 

H.R. 1 on November 20, 2003. They estimated that the total cost 

of the bill was $395 billion over ten years. CBO subsequently reaffirmed their belief that the accuracy of this prior estimate correctly reflects the true costs of H.R. 1. According to House precedents and procedures, CBO estimates are the only binding analysis 

that can be used to determine the cost of legislation. Suggestions 

that the availability of higher Administration cost estimates might 

have been relevant to the sponsors of the resolution is undermined 

by their support of alternative legislative proposals that far exceeded the costs of H.R. 1, including the subsequent Administration estimates. 

The differences between the November 20, 2003 CBO estimate 

and the subsequent analysis released by the CMS Office of the Actuary results from differing actuarial assumptions used by the two 

organizations. These differences have been subsequently well publicized and described in substantial detail in testimony before the 

Ways and Means Committee on March 24, and April 1, 2004. In 

the opinion of the Chief CMS Actuary, CBO’s estimate was both 

competent and performed in good faith. Both sets of actuaries also 

acknowledged that either set of assumptions could be correct and 

that such differences are not uncommon in performing cost estimates on such complicated legislation. 

HEARINGS

The Committee on Energy and Commerce has not held hearings 

on this legislation. 

COMMITTEE CONSIDERATION

On Thursday, September 30, 2004, the Full Committee on Energy and Commerce met in open markup session and ordered H. 

Res. 776 adversely reported to the House, without amendment, by 

a roll call vote of 26 yeas and 21 nays, a quorum being present. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. The following is the 

recorded vote taken on the motion by Mr. Bilirakis to order H. Res. 

776 adversely reported to the House, without amendment, which 

was agreed to by a recorded vote of 26 yeas to 21 nays. 

4 


Insert offset folio 5 here HR754.001
5 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has not held oversight or legislative hearings on this legislation. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

The goal of H. Res. 776 is to seek information from the President 

of the United States and the Secretary of Health and Human Services relating to the estimates and analysis of the cost of the Medicare prescription drug bill. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H. Res. 776, a 

resolution of inquiry requesting the President of the United States 

and directing the Secretary of Health and Human Services to provide certain documents to the House of Representatives relating to 

estimates and analysis of the cost of the Medicare prescription drug 

legislation, would result in no new or increased budget authority, 

entitlement authority, or tax expenditures or revenues. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, October 8, 2004. 

Hon. JOE BARTON, Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H. Res. 776, a resolution of inquiry requesting the President and directing the Secretary of 

Health and Human Services provide certain documents to the 

House of Representatives relating to estimates and analyses of the 

cost of the Medicare prescription drug legislation. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Tom Bradley. 

Sincerely, 

ELIZABETH ROBINSON

(For Douglas Holtz-Eakin, Director). 

Enclosure. 

6 

H. Res. 776—A resolution of inquiry requesting the President and 

directing the Secretary of Health and Human Services provide 

certain documents to the House of Representatives relating to 

estimates and analyses of the cost of the Medicare prescription 

drug legislation 

H. Res. 776 would request the President, and direct the Secretary of Health and Human Services, to furnish the House of Representatives all documents relating to the administration’s’s cost 

estimates or analyses of any version of H.R. 1 or S. 1 (Medicare 

prescription drug legislation), as considered by the 108th Congress. 

CBO estimates that complying with that resolution would not have 

a significant effect on federal spending. Implementation of H. Res. 

776 would not affect direct spending or revenues. 

On September 28, 2004, CBO transmitted a cost estimate for H. 

Res. 776, as ordered reported by the Committee on Ways and 

Means on September 23, 2004. The two versions of the resolution 

are identical, as are CBO’s cost estimates. 

The CBO staff contact for this estimate is Tom Bradley. This estimate was approved by Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional authority for this legislations is provided in Article I, section 8, clause 

3, which grants Congress the power to regulate commerce with foreign nations, among the Several States, and with the Indian tribes. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

H. Res. 776 requests the President of the United States and directs the Secretary of Health and Human Services, to the extent 

possible, to furnish the House of Representatives, not later than 14 

days after the adoption of this resolution, all documents, including 

telephone and electronic mail records, logs and calendars, and 

records of internal discussions in the possession of the Secretary of 

Health and Human Resources, the Director of the Office of Management and Budget, and the Director of the Office of the National 

Economic Council, respectively, relating to the following: (1) any estimates any analyses made by the Department of Health and 

7 

Human Services or the Office of Management and Budget relating 

to the cost of any version of the Medicare prescription drug legislation; (2) any communications (whether written or electronic) relating to such cost estimates or analyses or their release to Members 

of Congress between employees within the executive branch; (3) 

any communications (whether written or electronic) relating to 

such cost estimates or analyses or their release to Members of Congress between employees of the executive branch and Members of 

Congress or their staff; and, (4) any communications (whether written or electronic) relating to such cost estimates or analyses or 

their release to Members of Congress between employees of the executive branch and persons other than employees of the executive 

branch or legislative branch. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

This legislation does not amend any existing Federal statute. 

(8) 

DISSENTING VIEWS 

Once again, this Committee turned its back on its obligation to 

get the facts for the American people. Our Republican colleagues 

rejected a resolution of inquiry that requested President Bush and 

directed the Secretary of Health and Human Services (HHS) to provide certain documents to the House of Representatives relating to 

estimates and analyses of the cost of the Medicare prescription 

drug program. The resolution was reported adversely on a near 

party-line basis. 

This is not routine information that is at issue. The Administration, through Centers for Medicare and Medicaid Service (CMS) 

former Administrator Thomas Scully, hid important cost information that Congress should have seen prior to voting on the Medicare prescription bill in 2003. Mr. Scully threatened the CMS Chief 

Actuary with adverse consequences if he provided requested estimates to Congress, all the while making sure that the White House 

had the real information from the Actuary. Did the White House 

direct this coverup? We do not know. 

Why does this matter? Most immediately, the Medicare bill that 

has since become law will contribute to an increase in Medicare 

premiums of more than 17 percent next year—the largest premium 

increase ever. Fifteen percent of that increase in premiums is because of multi-billion dollar overpayments to big insurance companies and health maintenance organizations (HMOs) that were included in the Medicare bill. These are the very same insurance 

companies that the Government Accountability Office (GAO) found 

receive more taxpayer dollars to treat beneficiaries than is paid 

under traditional Medicare. So millions of seniors are now paying 

billions of dollars—and getting nothing back for that money—to finance the Republican effort to draw seniors away from traditional 

Medicare. 

Moreover, the manner in which the information was withheld 

was specifically forbidden by the Balanced Budget Act of 1997, in 

which the Chief Actuary’s position was established. This provision 

was added because Republicans thought they needed to establish 

in statutory and report language the clear right of Congress to obtain the Actuary’s estimates and analyses of cost of changes in 

Medicare. It specifically forbade the use of an ‘‘internal Administration clearance process’’ to keep this information from Congress. 

And yet, it was exactly such a ‘‘clearance process’’ that kept the Actuary from informing Congress before it voted to pass the Medicare 

bill that the estimated cost would be $500–$600 billion instead of 

the $395 billion the Administration and its Congressional allies 

claimed. 

Congress, and the public, should know what the White House 

and the Department knew when the bill was being considered. We 

have repeatedly asked the Administration to turn over information 

9 

on the cost estimates and have been ignored. We also asked Speaker Hastert and Senate Majority Leader Frist to investigate, and got 

the same treatment. So this resolution of inquiry was our last resort. 

All Administrations, regardless of which party is in the White 

House, prefer not to give embarrassing or controversial information 

to the Congress. But the Committee on Energy and Commerce has 

a long history of obtaining the information it needs to do its work, 

whether it is for investigative or legislative hearings and regardless 

of the party affiliation of the person in the White House. This 

record is now sullied. 

Congressional oversight is only credible if it is consistent regardless of the party in charge of the Executive Branch. Had President 

Clinton’s Administration tried to hide the bill like this, Congressional subpoenas would have flown like confetti. But when the 

Bush Administration hides the ball, all we get from the Republican 

Majority is silence. The public deserves better. 

Efforts to obtain the Medicare Actuary’s estimates of cost of the 

Medicare prescription drug legislation 

In mid-June of 2003, the Minority staff of the House Committee 

on Ways and Means requested that Richard Foster, the CMS Chief 

Actuary, provide them with the cost estimates and analyses of the 

Medicare prescription drug legislation that he had prepared for 

CMS. During that month, this legislation was being considered by 

the Committee on Ways and Means, the Committee on Energy and 

Commerce, and the full House of Representatives. For decades, 

such estimates and analyses had been routinely provided to Congress through an informal, but important, working relationship between the Congress and the Office of the Actuary. Thomas A. 

Scully, then head of CMS, took it upon himself to deny information 

about the Actuary’s projected cost of the bill to the Minority and— 

ultimately—to the full Congress for what he openly admitted were 

political reasons. 

This action by Mr. Scully was at odds with the previous working 

relationship between Congress and the Office of the Actuary and 

Mr. Foster protested. According to testimony given by Mr. Foster 

before the Committee on Ways and Means on March 23, 2004, he 

was ordered by Mr. Scully to withhold the requested information 

from particular Members. Mr. Foster said that he understood from 

Mr. Scully and Mr. Scully’s assistant that he would lose his job if 

he provided the requested estimates and analyses. On June 24, 

2003, Mr. Scully informed a Minority staff member of the Committee on Ways and Means that Mr. Foster would ‘‘be fired so fast 

his head would spin’’ if he provided this information directly to the 

Committee staff. According to a Washington Post article and others, Mr. Foster memorialized the situation on June 26, 2003, and 

‘‘dispatched an e-mail to several senior assistants and private actuaries in which he called the situation ‘nightmarish’ * * * I’m perhaps no longer in grave danger of being fired, but there remains 

a strong likelihood that I will have to resign in protest of withVerDate Aug 04 2004 02:36 Oct 16, 2004 Jkt 039006 PO 00000 Frm 00009 Fmt 6604 Sfmt 6604 E:\HR\OC\HR754P2.XXX HR754P2
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1Official Says He Was Told to Withhold Medicare Data, The Washington Post, March 13, 

2004. A1. 2Medicare’s Chief Actuary Reveals E-Mail Warning, Wall Street Journal, March 18, 2004. 

3See, Official Says He Was Told to Withhold Medicare Data, The Washington Post, March 

13, 2004, A1; Democrats Demand Inquiry Into Charge by Medicare Officer, The New York 

Times, March 14, 2004, A1. 4 ‘‘OMB Says Medicare Drug Law Could Cost Still More,’’ The Washington Post, Sept. 19, 

2004, A4. 5 ‘‘Remarks by: Tommy G. Thompson, Secretary of Health and Human Services,’’ Feb. 2, 2004, 

p. 4. 

holding of important technical information from key policy makers 

for political reasons.’’1

Mr. Foster’s estimates—which consistently set the cost of this legislation at $500–$600 billion—were critically important for consideration of this Medicare prescription drug bill. Congress had set 

a cost ceiling of no more than $400 billion over the next 10 years. 

The Congressional Budget Office had provided an estimate of $395 

billion. Nonetheless, in the House, it took nearly an hour-long roll 

call vote in June of 2003 to persuade enough Republican Members 

to support this bill, which passed by one vote. In July 2003, a number of conservative House members wrote to the Speaker requesting his assurances that the bill not exceed $400 billion, which the 

Administration gave, notwithstanding Mr. Foster’s estimates. The 

Senate passed it only on the Administration’s assurance that it 

would cost no more than $400 billion. In November of 2003, when 

the conference bill returned to the House floor, there was an unprecedented three-hour call vote to allow the Republican leadership 

and Administration, including the Secretary of the Department of 

Health and Human Services Tommy G. Thompson, to change the 

votes of wavering colleagues leading to a virtual party-line vote at 

dawn after members were told once again it would cost $395 billion. As the Wall Street Journal wrote, ‘‘[N]o one doubts that release of the higher cost estimates last fall could have killed the 

measure, which only passed by one vote after hours of arm-twisting 

in the House.’’ 2

Then in January of this year, shortly after President Bush highlighted the Medicare legislation in his State of the Union address 

and just prior to the release of the Administration’s FY 2005 budget submission, the White House announced that the drug program 

would cost $534 billion. On January 30, 2004, White House Press 

Secretary Scott McClellan said that President Bush had learned of 

these higher estimates only in ‘‘the last two weeks.’’ However, 

while the Administration had said their cost estimates were not 

‘‘final’’ until after the bill was signed into law, Mr. Foster confirmed in his testimony before the Committee on Ways and Means 

on March 24, 2004, that he had given Mr. Scully preliminary estimates that were very close to the final estimate weeks before the 

final votes on the Medicare prescription drug bill. News articles reported that Mr. Foster’s estimates had been provided to the Office 

of Management and Budget several months before.3 More recently, 

the cost of this legislation has been projected at $576 billion.4

Mr. Scully and Secretary Thompson have stated on several occasions that some of these estimates were conveyed to Members of 

Congress or their staff. Secretary Thompson said in a press conference in February that conferees and others were made ‘‘aware 

that we expected our final score would be higher.’’5 With the excepVerDate Aug 04 2004 02:36 Oct 16, 2004 Jkt 039006 PO 00000 Frm 00010 Fmt 6604 Sfmt 6602 E:\HR\OC\HR754P2.XXX HR754P2
11 

6Memorandum from Richard S. Foster to Rep. Charles B. Rangel, ‘‘Estimated Impact of H.R. 

1 on Premiums for Fee-for-Service Beneficiaries in 2010 and Later,’’ June 26, 2003. 7See Medicare Agency Withheld Bill’s Cost, St. Paul Pioneer, March 12, 2004. 

8Letter from Dara Corrigan to Rep. John Dingell, July 20, 2004, p. 1–2. 

9 H. Rpt. 105–217, p. 838. 

10 Id. 

tion, however, of a June 26, 2003, memo to Rep. Rangel on the extent to which premiums for traditional Medicare would rise under 

a provision in the legislation,6 none of the complete requested estimates or analyses were provided to the Democratic Members of 

these committees, including those who were officially on the Conference Committee and responsible for negotiating this legislation 

prior to its passage. Subsequent testimony and media reports have 

made it quite clear that the projections were withheld from Congress for a political purpose—so that the Medicare Modernization 

Act would pass. Mr. Scully told a reporter in March of 2004 that 

he had denied the information to Democratic Members because 

they were trying to be ‘‘politically cute’’ on the eve of the first 

House vote.7 Mr. Scully later told an investigator from HHS’s Office of Inspector General that information was not provided because 

it was ‘‘sought solely to defeat the legislation.’’ 8 These actions are 

exactly what the Conferees were trying to prevent in the Balanced 

Budget Act when they stated that there should not be an ‘‘internal 

Administration clearance process’’ because if Congress did not receive this information, its ability to make ‘‘informed decisions based 

on the best available information is compromised.’’ 9 There was no 

exemption to full disclosure of actuarial numbers for Members 

deemed to be ‘‘politically cute,’’ or those who might be attempting 

to defeat legislation. 

Further, Mr. Foster testified before the Committee on Ways and 

Means that this was not an across-the-board policy for all Members. Some responses to Congressional requests for information 

were approved by Mr. Scully, and others were not. Mr. Foster stated that he believed that there was ‘‘a political basis for making 

that decision’’ and said he ‘‘considered that inappropriate and, in 

fact, unethical.’’ 10 Full estimates and analyses to this date still 

have not been shared with the Democratic Members of Congress 

who served on the Medicare conference, and no justification has 

been provided. 

Attempts to obtain information 

There have been numerous written requests made for the cost estimates and analyses that the Administration had as far back as 

June of 2003. On February 3, 2004, Ranking Members Waxman, 

Dingell, and Rangel requested all cost information and analyses for 

the Medicare Prescription Drug bill from Secretary Thompson. On 

February 12, 2004, Ranking Members Rangel and Stark sent a follow-up letter to Secretary Thompson requesting the estimates and 

analyses after Secretary Thompson made a commitment to members of the Committee on Ways and Means at a February 10, 2004, 

hearing that he would restore access to the Office of Chief Actuary. 

On March 2, 2004, Ranking Member Waxman and every Minority 

member of the Committee on Government Reform sent another letter to Secretary Thompson requesting the information that Representatives and others had already requested. On March 15, 2004, 

12 

Ranking Member Dingell sent yet another letter to Secretary 

Thompson requesting the information. Again, on March 17, 2004, 

Ranking Member Waxman sent a letter to Secretary Thompson 

asking for the information. On March 19, 2004, Ranking Members 

Waxman, Rangel, Dingell, Stark, and Brown sent a letter to the 

White House asking for all costs and estimates the White House 

had received. To date, none of these Members has received a complete response to their repeated requests and in most cases have 

received no response at all. In addition, Members of the ‘‘Blue Dog 

coalition’’ sent a letter on March 26, 2004, asking the President to 

look into the matter, noting that they were particularly troubled 

that such information was potentially withheld. 

Similarly, on May 14, 2004, Ranking Member Stark sent a letter 

to Dr. Mark McClellan, the new administrator of CMS, following 

Dr. McClellan’s commitment to provide materials at a subcommittee hearing on May 11, 2004. Dr. McClellan has not provided the requesting Members with complete information. 

Efforts to have Congress investigate 

Mr. Foster testified before the Committee on Ways and Means on 

March 24, 2004. It was his first public appearance and discussion 

on these issues in which he revealed the threats he received from 

Mr. Scully, that his estimates were consistently higher than those 

put forward by the Administration, and that he was pretty close to 

the number released in 2004 weeks before the final vote in 2003. 

Democratic members of that Committee requested an additional 

hearing under Rule XI in order to hear from additional witnesses. 

Chairman Thomas held a hearing on April 1, 2004, pursuant to 

the Rule XI request, to continue discussions on the estimates. Witnesses were CMS Deputy Administrator Leslie Norwalk and CMS 

San Francisco Regional Administrator Jeff Flick (Mr. Scully’s 

former special assistant). Mr. Scully declined to attend, citing fatigue. White House counsel Alberto Gonzalez declined on behalf of 

Presidential aide Doug Badger. At the hearing, Republicans refused to subpoena Mr. Scully and Mr. Badger. 

On June 22, 2004, House and Senate Minority leaders Rep. 

Nancy Polosi and Senator Thomas Daschle and numerous Ranking 

Members and Senators including Reps. Waxman, Dingell, Rangel, 

Stark, Hoyer, and Brown and Senators Kennedy, Graham, 

Lautenburg, Stabenow, and Clinton sent a request to House Speaker Dennis Hastert and Senate Majority Leader Bill Frist. Members 

not only asked for an investigation into the possible withholding of 

Medicare cost estimates but requested that these Congressional 

leaders ask the Administration to provide Members with the cost 

estimates and analyses they had been repeatedly asked for in other 

letters. 

On September 8, 2004, having received no response, these Members sent a follow-up letter to Speaker Hastert and Majority Leader 

Frist requesting an investigation and the estimates and analyses. 

they also cited that by this time the Inspector General’s Office and 

the Government Accountability Office had concluded in independent reports that suppression of information occurred. To date, 

neither the Majority leaders nor the Administration have provided 

13 

11 H. Rpt. 105–217, July 30, 1997, p. 837. 12Secretary Thompson said in a press conference that ‘‘everyone knows that during the legislative process the only number that counts is the CBO score. There can be only one scorecard 

when creating legislation, and that scorecard is CBO’s.’’ ‘‘Remarks by: Tommy G. Thompson, 

Secretary of Health and Human Services,’’ Feb. 2, 2004, p. 4. 

Members with the cost estimates and analyses requested by Members in both houses of Congress. 

On September 23, 2004, the Committee on Ways and Means held 

a markup on the Resolution of Inquiry. After a very short and uneventful series of statements from both the Majority and Minority, 

the Resolution was reported out of Committee unfavorably on a 

party-line vote of 19 to 12. 

The violation of the right of Congress to information from the Chief 

Actuary 

The Chief Actuary’s position for the Centers for Medicare and 

Medicaid Services (CMS) was codified into law by Congress in 1997 

as a highly independent office, specifically so that Congress and its 

committees could have guaranteed access to the Actuary’s assessment of the ‘‘financial condition of the Medicare trust funds and in 

developing estimates of the financial effects of potential legislative 

and administrative changes in the Medicare and Medicaid programs.’’ 11 Ironically, the momentum for this provision came from 

Republican members of the Committee on Ways and Means. The 

Republicans were concerned that they would not get full information from the Chief Actuary since they did not control the White 

House. The following statutory protections were provided: ‘‘The 

Chief Actuary shall exercise such duties as are appropriate for the 

office of the Chief Actuary and in accordance with professional 

standards of actuarial independence. The Chief Actuary may be removed only for cause.’’ (42 U.S.C. 1317(b)(1)) (emphasis added) 

The conferees were very specific about the role and responsibilities of the Chief Actuary in working with Congress. Contrary to 

a statement from HHS Secretary Tommy G. Thompson in February 

of 2004, the conferees believed that the Chief Actuary’s estimates 

were critical to the work of Congress.12 There can be no misunderstanding of their legislative intent. 

The office of the Actuary has a unique role within the 

agency in that it serves both the Administration and the 

Congress. While the Chief Actuary is an official within the 

Administration, this individual and his or her office often 

must work with the committees of jurisdiction in the development of legislation. 

Beginning with the appointment of the first Chief Actuary for Social Security in 1936, through the enactment of 

Medicare and Medicaid in 1965, and through the establishment of the Health Care Financing Administration in 

1977, the tradition has been for a close and confidential 

working relationship between the [Social Security Administration] and HCFA chief actuaries and the committees of 

jurisdiction in the Congress—a relationship which the 

Committees value highly. It is important to emphasize 

that the Senate Committee on Finance, the House Committee on Ways and Means, and the House Committee on 

14 

13 H.Rept. 105, July 30, 1997, pp. 837–838 (emphasis added). 14 Id., p. 838. 15Office of Inspector General, Department of Health and Human Services, ‘‘Summary: Scully 

and Chief Actuary,’’ undated, p. 4. 16Government Accountability Office, ‘‘Department of Health and Human Services—Chief Actuary’s Communications with Congress.’’ Legal Opinion B–302911, September 7, 2004, p. 13. 

Commerce all rely on their ability to seek estimates and 

other technical assistance from the Chief Actuary, especially when developing new legislation. Similarly, the Congressional Budget Office and the Congressional Research 

Service depend heavily on such assistance. Thus, the independence of the Office of the Actuary with respect to providing assistance to the Congress is vital. The process of 

monitoring, updating, and reforming the Medicare and 

Medicaid programs is greatly enhanced by the free flow of 

actuarial information from the Office of the Actuary to this 

committees of jurisdiction in the Congress. 

* * * The Committees rely on the actuaries to provide 

prompt, impartial, authoritative, and confidential information with respect to the effects of legislative proposals. 

When information is delayed or circumscribed by the operation of an internal Administration clearance process or the 

inadequacy of actuarial resources, the Committees’ ability 

to make informed decisions based on the best available information in compromised.13

And in a prescient statement, the conferees concluded that: 

* * * The need for actuarial assistance will be greater 

than ever in the next few years as the Congress and the 

Administration, with advice from the bipartisan commission mandated in this legislation, address the future financial pressures facing the Medicare program as a result of 

the retirement of the post-World War II ‘‘baby boom’’ generation.14

In response to a Congressional request for an investigation, the 

Inspector General of HHS found that Mr. Scully threatened Mr. 

Foster to keep Mr. Foster from communicating with the Congress.15 The GAO determined such actions to be a violation of 2003 

and 2004 appropriations acts, and that no federal monies should 

have been used to pay Mr. Scully’s salary from the date the first 

threats were made until Mr. Scully left in December of 2003.16

HHS has refused to seek reimbursement. 

15 

Conclusion 

This resolution posed a simple question—is Congress going to 

roll over when Executive Branch employees are prevented from 

providing Congress critical information on important and controversial legislation under consideration? Given that Republicans 

run both houses of Congress and the Administration, and given the 

rejection of this resolution of inquiry the answer is yes—politically 

sensitive oversight will not be allowed. That is a disservice to the 

people we represent, and an affront to our constitutional form of 

government. 

JOHN D. DINGELL. 

HENRY A. WAXMAN. 

EDWARD J. MARKEY. 

RICK BOUCHER. 

EDOLPHUS TOWNS. 

FRANK PALLONE, Jr. 

SHERROD BROWN. 

BART GORDON. 

PETER DEUTSCH. 

BOBBY L. RUSH. 

ANNA G. ESHOO. 

BART STUPAK. 

ELIOT L. ENGEL. 

ALBERT R. WYNN. 

GENE GREEN. 

KAREN MCCARTHY. 

TED STRICKLAND. 

DIANA DEGETTE. 

LOIS CAPPS. 

MICHAEL F. DOYLE. 

CHRISTOPHER JOHN. 

TOM ALLEN. 

JIM DAVIS. 

JAN SCHAKOWSKY. 

HILDA L. SOLIS. 

CHARLES A. GONZALEZ. 

Æ