May 12, 1995 CONGRESSIONAL RECORD—HOUSE H 4907

did with the different majority is they

increased taxes a record $252 billion

over the 5 years of that budget.

Our conference met and decided that

if we wanted to stimulate job growth

and savings and cap investment in this

country, then we should offset that $252

billion tax increase with some kind of

tax decrease. That is what we did. This

tax decrease is totally paid for out of

spending cuts and it is going to stimulate the economy.

Mr. KINGSTON. Now, as I recall, one

of your statistics was that 87 percent of

the people who benefit from the tax reduction make a combined income of

$75,000 or less, 87 percent of the American people. Is that true?

Mr. SMITH of Michigan. Yes, that is

true. I wonder if this is not good. I

mean, probably people do not understand, the other side, when they say

this is tax cuts for the rich. But see,

what they are saying is by taking a

$500 tax credit per child, the person

that is making the $50,000 or the

$100,000 or the $150,000 is in a higher tax

bracket, therefore that $500 tax credit

is worth more, therefore these are tax

credits for the rich.

Everybody should understand where

this rhetoric comes from when they

say tax breaks for the rich. Some people say well, we are reducing the taxes

that corporations pay because we are

allowing them to deduct the cost of

buying new machinery and equipment

to put better tools in the hands of our

workers to be more competitive.

b 1400

You can call that tax breaks for the

rich but what it is trying to do is encourage capital investment and job formation.

Mr. KINGSTON. Is it not true that if

the economic growth is 1 percent over

the projected growth rate of 2.1 percent

over the next 7 years, because of economic growth, we will reduce the deficit $640 billion because of increased

revenues because businesses expand,

they create jobs, more revenue comes

into the Federal budget?

Mr. SMITH of Michigan. You are

such an excellent person to have a colloquy with because you know all the

statistics and all the figures.

Mr. KINGSTON. Is the gentleman

suggesting some of these questions are

staged? I am highly offended.

Mr. SMITH of Michigan. It is interesting to note that when CBO comes up

with their cost figures, when we have

anything to stimulate the economy

and job growth, they do not take that

into consideration in deciding how

much it is going to cost. So if it is a

tax decrease, regardless of how business and industry and jobs react to

that to bring in ultimately more revenues, they consider it flat. It is a

nondynamic scoring.

But you are so correct, if something

we do encourages businesses to be a little more competitive and to allow

them to expand, then it is going to

bring in so much more revenues to totally offset everything and balance our

budget much quicker.

fMEDICARE

The SPEAKER pro tempore (Mr. FOX

of Pennsylvania). Under the Speaker’s

announced policy of January 4, 1995,

the gentleman from New Jersey [Mr.

PALLONE] is recognized for 60 minutes

as the designee of the minority leader.

Mr. PALLONE. Mr. Speaker, I would

like to spend my time today talking

about Medicare. In light of what some

of the previous speakers said today, I

would point out that I am not really

interested in the issue of whether or

not we call the changes that the Republicans have talked about in their

budget as cuts or modifications or

whatever. I am satisfied to call them

changes.

The bottom line is, the Republicans

in their budget proposals, both in the

Senate as well as in this House, have

suggested some major changes that are

going to have major impacts on the

Medicare program. Some of the previous speakers suggested today that

perhaps seniors are not worried about

it or that perhaps Democrats are making them worried unnecessarily.

Let me tell you the reality is seniors

are worried, and they are not worried

because of anything that the Democrats have said to them. They are worried because they hear that some of

these changes that are coming in the

proposed Republican budget are going

to have a major impact on Medicare,

on Medicaid, which is also of importance to seniors, as well as on Social

Security, which as you know was previously said to be off the table.

I guess I was a little concerned when

I heard the previous speaker, the gentleman from Georgia [Mr. KINGSTON],

mention his mom. I guess it is that we

are getting close to Mother’s Day now.

Different speakers talked about their

moms. The gentleman from Georgia

specifically said that in his case his

mother or his family, I guess, was not

really that worried about the Federal

Government and Federal programs,

that he felt that it was increasingly

important for us to sort of not depend

on Federal programs or forget about

these Federal programs.

The bottom line is, when you talk

about these three Federal programs

that I mentioned, Medicare, Medicaid,

and Social Security, these are Federal

programs that a lot of people in this

country do depend on. They are watching very carefully, in my opinion, what

we do here in the next few weeks or the

next few months that might impact on

those programs.

If I could just use my own mom for

an example, and I do not usually do

that but, since it has already been stated by some of the others, she called me

up just a couple of days ago and she

was very worried. She just turned 65 a

few weeks ago, is now eligible for Medicare for the first time, relied on the

fact that when she became of age that

she was going to have the benefits of

Medicare. And now all of a sudden,

when she first feels that she can take

advantage of the program that she and

my dad have been paying into all these

years, realizes that there may be some

major changes and she will not be able

to benefit from what she expected in

the program.

This is of major concern to seniors.

This is not something that is abstract.

This is something that the average person is concerned about.

In my district, when we held a number of forums for senior citizens during

the April 3 weeks that were in the district, when we were not voting in

Washington, I heard over and over

again from senior citizens in my district, which is not a very poor district.

I consider my congressional district

very much the average. I have some

wealthy seniors. I have poor seniors

and most of my seniors are simply middle class. But they are very scared.

When they hear about the changes in

Medicare that might make them have

to pay more out of their pocket for a

copayment or a higher deductible before they get benefits or changes that

might limit their options in terms of

whether or not they go to a particular

doctor or hospital, these are things

they are concerned about.

When they hear about Medicaid

changes that might impact their ability to get long-term care, they are very

concerned. And they are particularly

concerned about what they consider a

broken promise on the part of the Republicans when the budget, when the

House Republican budget proposals

talk about a change in the Consumer

Price Index that will actually lower

the COLA. Seniors worry about that

COLA, that cost-of-living adjustment.

Mr. Speaker, many of them budget,

and their budget depends on every dollar that they receive on a monthly

basis from Social Security. And when

you talk about changing the Consumer

Price Index so that the amount of the

COLA is reduced, that extra few dollars

a month or annually that they receive

makes a big difference to them.

What I wanted to do today was to basically go through some of the suggested changes that are being discussed

by the Republicans in the budget that

affect Medicare. I think many have

heard the last few days that the Senate

Republican plan would pare about $250

billion from projected spending on

Medicare and that the House plan ups

that ante, if you will, to $270 billion.

What does all this mean? What do

these cuts or changes or modifications

mean? How do the Republicans propose

to go about implementing that? What

does it mean for the average person?

Well, we heard today, or at least I

heard for the first time today that

there was some detailed recommendations, about three dozen recommendations that were made on the House side

by Republicans on the House Committee on the Budget to slow the growth of

Federal Medicare cost; in other words,
H 4908 CONGRESSIONAL RECORD—HOUSE May 12, 1995

to implement these so-called cuts or

changes. And those proposals, I understand, have been put forward by a task

force from some of the Republican

Members, which was made available

today, that was actually sent to the

chairman of my Subcommittee on

Health and Environment of the Committee on Commerce.

I would like to go through some of

those proposals by reference to an article that was in the New York Times

today that sort of summarized some of

them. If I could read from the New

York Times article, it says that Republicans on the House Committee on the

Budget recommended three dozen ways

to slow the growth of federal Medicare

costs. They include higher premium

deductibles and copayment for beneficiaries and strong new incentives for

them to join health maintenance organizations—we call them HMO’s—which

provide comprehensive care in return

for a fixed monthly fee.

The gentleman from Ohio [Mr. KASICH], the chairman of the Committee

on the Budget, said the Republican proposals would expand health care

choices for the elderly. But a Mr.

Corey, who is the director of Federal

affairs for the AARP, the American Association of Retired Persons, said the

Republicans were creating a coercive

environment in which Medicare beneficiaries will be herded into managed

care and out of traditional fee-for-service arrangements.

Under one of the leading options,

Medicare beneficiaries would receive

Federal vouchers worth a fixed

amount, around $5,100 a year, to enroll

in an HMO or other private health

plan. They would have to use their own

money to make up the difference if the

cost exceeded the amount of vouchers,

but they could keep most of the savings if they chose less expensive plans.

Now, this voucher proposal is just

one of the proposals that has been put

forth by Republicans on the House

Committee on the Budget to try to cut

back, if you will, on Medicare.

I would like to go through some of

this and some of the others that are

mentioned. When you talk about a

voucher worth $5,100 to enroll in an

HMO or other private health care plan,

again, you have to make up your own

money for the difference.

One of the things that a lot of seniors

are worried about is that right now

Medicare is largely a fee-for-service

program, which means that you can go

out to the doctor of your choice or to

the hospital of your choice, if you happen to live in an area where there are

a number of hospitals, and that doctor

or hospital performs a service and then

they send a bill and Medicare pays for

it on what we call a fee-for-service

basis. The idea is choice. You have

your own choice of doctors.

Seniors traditionally had their

choice of doctors both when they were

working and now as part of the Medicare Program. In many parts of the

country, including my own, the seniors

do not feel that the HMO’s or managed

care systems are as good or do not include some of the physicians or hospitals that they may want to go to. But

now all of a sudden under this proposal,

if it is implemented, they would not

have a choice. They basically get a

voucher for $5,100 and they can find an

HMO that will take them, or they can

find another private health plan that

operates on the traditional fee-forservice basis.

But think about it a minute. Most of

these managed care systems or other

private health care plans that operate

on a fee-for-service basis are not going

to be particularly interested in someone who is older, who might have disabilities, who might have some previous condition that is going to make

them a high risk individual. How likely

is it that they are going to be able to

find a plan that satisfies them for that

$5,100?

Ultimately, many of them are going

to have to basically take that additional money out of their pocket if

they have it to pay for a plan. And I

have to tell you, and I think most people understand that a lot of seniors

simply do not have the money. So this

idea of the voucher is a serious change,

that is being talked about, that would

have a major implication and for many

seniors might result in them not having health care at all.

The next proposal that comes from

the Republicans on the Committee on

the Budget, and again reading now

from the New York Times summary,

the Republicans also recommend a stiff

financial penalty for new Medicare

beneficiaries who refuse to join HMO’s.

Beginning in 1999, all new enrollees

choosing Medicare fee for service would

pay a premium $20 higher than that of

current Medicare beneficiaries one of

the Republican recommendations says.

The premium is now $46 a month.

So basically what they are saying is

that if you enter, for example—this is

not until 1999, but I will use my mom

as an example again; she just entered

the system within the last month. But

let us say she was entering in 1999. If

she basically decides that she does not

want to go to an HMO or managed care

system that limits the doctors or the

hospitals, then she has to pay more to

continue in a fee-for-service system

out of her own pocket.

The amount that they are talking

about here, $20 higher than that of the

current beneficiaries, which is now $46

a month, is significant. But I would

maintain that as time goes on, that

differential between what the senior is

going to be charged if they enter the

managed care system versus the feefor-service system will grow. And the

greatest fear that many of the seniors

have in my district, the greatest fear

that they have is that ultimately, if

they are given a choice, which is not

really a choice, between a managed

care HMO and a fee-for-service system,

that if the cost of the fee for service becomes so prohibitive that they cannot

pay for it, they are essentially forced

into an HMO or managed care system.

That is what we are talking about here

with this second Republican recommendation.

Ultimately the cost of the fee-forservice system would be so expensive

that seniors would be forced into an

HMO where they would not, given the

choice, have their choice of doctors or

even hospitals in many cases.

The third proposal that comes from

the House Republican budget group

task force is they would reduce payments to doctors and hospitals, especially teaching hospitals and those

that serve large numbers of low-income

patients. Well, this is what I would call

a reduction in the reimbursement rate.

Many of you know that in terms of

Medicare, a rate is established to pay

for doctors or hospitals by Medicare,

and that is what they get reimbursed

for the different services that are provided.

Some people and some of you, my

own seniors, have said to me: So what,

the doctors get a lot of money. The

hospitals make too much money. So

you reduce their reimbursement rate.

What do I care, maybe it is good.

The bottom line is maybe it is not

good, because many hospitals, particularly those who have a high number of

seniors, as is the case with my district

in New Jersey, are basically dependent

on Medicare reimbursement and are

just basically managing with the budget they have, because they have so

many senior citizens or they have so

many poor people.

If you reduce the reimbursement rate

to hospitals, some hospitals will simply

close. Others will not be able to provide

the level of service or the quality of

service that they are providing now.

What happens if you reduce the reimbursement rate to doctors? Some may

say ‘‘So what, the doctors make too

much money’’. The reality is that doctors do not have to take Medicare patients. If the reimbursement rate becomes significantly lower or does not

increase as much as it should to keep

up with inflation, then a lot of doctors

will just say ‘‘I’m not going to take

Medicare patients.’’ Seniors have already complained to me about how, in

many cases, they cannot find a doctor

who will take Medicare. If more doctors do not take Medicare, fewer doctors are going to be available to senior

citizens.

‘‘The fourth thing that was recommended by the Republicans on the

House Committee on the Budget,’’ and

again I am reading from the New York

Times article, ‘‘was to double the

amount that beneficiaries must pay for

doctors’ services before Medicare coverage begins. This is the deductible.’’

The annual deductible, now $100,

would be raised to $200 and then increased automatically to keep pace

with the growth of the program. The

deductible has been raised only three

times in the 30-year history of Medicare.
May 12, 1995 CONGRESSIONAL RECORD—HOUSE H 4909

Here we get to the real nub of the

question. This option increased the deductible. Of course, everyone knows

what that means. The deductible goes

up, the senior has to pay more out of

pocket before they are actually able to

take advantage of Medicare. It may

sound nice, but most or many seniors

simply cannot afford it. What they will

do is they will simply forego care, because they know that that care will be

less than the deductible that they have

to pay out, the last thing in the world

that we could possibly want.

The fifth thing that was mentioned

by this Republican Committee on the

Budget, or by Members recommending

how to deal with Medicare, is to ‘‘increase the monthly $46 premium by $5

in each of the next 4 years, and then by

$6 in 2000 and in each of the following

2 years.’’ I assume that what we are

talking about here probably is the part

B premium that seniors pay for doctors, so again, we are talking about an

increased amount of money out of seniors’ pockets if they can afford it.

There are two more options that I

wanted to talk about today that have

been suggested by the Republicans on

the Committee on the Budget to deal

with these changes they have suggested in Medicare. This next one says

that ‘‘They would charge higher premiums for beneficiaries with incomes

exceeding $70,000 a year. The premium

would more than triple, to $164 a

month for individuals with more than

$95,000 a year, and couples with more

than $115,000.’’

Here we are talking about means

testing. I think many of you know that

historically, and certainly when the

Medicare program was started under

President Lyndon Johnson, that Medicare was not going to be income-based.

You paid into it. When you reached the

age of 65, you took advantage of it. It

did not matter what your income was,

it was not meant to be a welfare program. It was for all senior citizens.

Now we are talking, under this proposal, of turning Medicare basically

into an income-based program, I will

call it a welfare program, and basically

reneging on the contract that was

made with those Americans, that was

made 30 years ago by the President

then and this Congress, that this was

not going to be an income-based program.

Some may say ‘‘So what? Changing

times, we have to change the reality of

things.’’ Let me assure you that in

those States, and I will use my State

as an example, which have a very high

cost of living, some of these income

categories that are being used, for example, $70,000 a year, I would maintain

that as time goes on we will see that

level be reduced. If it is now 70, it will

go to 60, then to 50, then to 30.

Think about people who live in

States where the cost of living is very

high. These arbitrary numbers that are

going to be used, in my opinion, are

going to make a lot of people who can

really ill afford it, based on this means

testing plan, have to pay out of their

pocket more money for their health

care, when they happen to be senior

citizens. It goes against the contract

that was made with seniors by this

original enacting legislation, and ultimately, I think it will have more and

more impact on middle-class seniors.

The last thing, and there are many

others, I am only citing 6 but I think

there are something like 35 recommendations that were put forward

by these 4 members of the Committee

on the Budget in the letter they sent to

the chairman of my Subcommittee on

Health and Commerce, but the seventh

and last one that I want to mention

says ‘‘They will charge patients for a

portion of the cost of home health care

provided to elderly people residing in

their homes. Republicans said such a

change would discourage overuse of

home health services.’’

Again, one of the most serious problems we face now is the need for longterm care for seniors. I think everyone

knows that if you can provide seniors

with home-based health care, where

someone comes into the home to help

them get out of bed, to help them clean

up, or to help them with the various

disabilities that they have, that is a

very cheap, preventive way of dealing

with health care problems that face the

elderly, much better than having to go

to the hospital and the costs entailed

with a hospital, or a nursing home, or

other kinds of institutions.

Why in the world would we want to

discourage home health care or build in

an extra charge for home health care?

All that is going to do is discourage

seniors from using home health care,

or not use it at all if they cannot afford

it, and the ultimate cost of that is that

people become institutionalized and it

costs even more money to the Federal

Government.

Mr. Speaker, the point I am trying to

make here today is very simple.

Whether we call it a cut, whether we

call it a modification, whatever we call

it, of the changes that are being discussed by the House Republicans on

the Committee on the Budget, and they

are going to be coming before this Congress, this House, next week, they are

major changes in the Medicare Program. They have a direct impact on

seniors.

The bottom line is that they are

probably going to result in a lot more

money that seniors are going to have

to pay out of their pocket, and if they

cannot afford it, which many cannot,

they are simply not going to have the

quality and level of services, or in some

cases, may not have any health care at

all.

I do not think, Mr. Speaker, that the

costs of balancing the budget should be

so heavily forced on the elderly within

this country. We all know that we have

to balance the budget, and I certainly

advocate that, but this budget, this

budget resolution that is being proposed depends too much on hurting and

making it more difficult for seniors,

particularly with regard to their

health care needs. That is not the way

to go about balancing the budget.

Mr. Speaker, I wanted to talk a little

bit about some of the Medicaid cuts

and respond a little bit to some of the

statements that were made about

President Clinton’s health care proposal.

Mr. Speaker, I talked initially about

the Medicare program. I want to also

talk a little bit about the Medicaid

cuts or changes that are being discussed. Before I do that, though, I want

just to take 5 minutes or less to just

give some statements that have been

made by some of the associations that

deal with senior citizens about what

these Medicare and Medicaid cuts or

changes are going to mean for the elderly.

I just want to highlight a few of

these things, because sometimes I feel

if I make a statement, maybe some

people will believe it, but it comes

from some of the associations that represent senior citizens, perhaps it will

be more believable.

The American Association of Retired

Persons, which, of course, has been, I

guess, the leading opponent of some of

these changes, they have said that

Medicare was hardly discussed in the

last election, and there was certainly

no mandate from the electorate to

change the system. I think that is obvious. This is not something that was

part of any political discussion that I

know of in terms of anyone running for

office last year.

‘‘Medicare cuts would mean that over

the next 5 years, older Americans

would pay at least $2,000 more out of

pocket than they would pay under current law, and over the next 7 years

they would pay $3,489 more out of pocket. The total number of Medicaid beneficiaries who would use long-term care

services could reach $1.7 million in the

year 2000.’’ That is from the AARP.

The National Council of Senior Citizens says ‘‘The levels of the cuts in

Medicare contemplated by the Senate

and House Budget Committees will not

just devastate the finances of millions

of older citizens, but more importantly, they will devastate the hopes

for a secure and healthy old age for all

Americans.’’

The Older Women’s League says:

We receive hundreds of letters from women

who are already forced to choose between

paying for food and rent and buying much

needed medicine that is not covered by their

Medicare. Substantial cuts in Medicare will

literally take food out of the mouths of these

older women.

I could not agree with that more.

When I have my forums in my district,

the overwhelming majority of the seniors who show up are women. Most of

the people that are particularly scared

are women. Many of them are just

making ends meet. If you talk about

additional deductibles or copayments

or out-of-pocket expenses, they are
H 4910 CONGRESSIONAL RECORD—HOUSE May 12, 1995

making choices between food and rent

and needed medical care.

Last, Mr. Speaker, and I mention it

because I happen to be a Roman Catholic, the Catholic Health Association

says that ‘‘Budget cuts of such magnitude in Medicare and Medicaid would

attack the very fiber of these programs, and in fact, decimate them.’’ As

I think many know, Catholic Charities

is one of many nonprofits that provides

medical care to people who do not otherwise have it, and anyone who has visited a Catholic Charities knows that a

lot of the people, really significant

numbers of the people that are serviced

by them are senior citizens, as well as

children.

I would like to now go into Medicaid,

which I guess has not gotten as much

attention as the proposed changes in

Medicare, but the Medicaid program,

which is the program for poor people in

this country, mostly people who are receiving some sort of welfare of assistance, is also severely cut, some would

say more severely challenged, in terms

of the amount of money that is going

to be available over their next few

years than Medicare under this Republican budget proposal.

A lot of people think that Medicaid is

just, you know, a program for people

under 65, and that somehow seniors do

not take advantage of Medicaid because they are covered by Medicare.

The reality is that for many seniors

who do not have the assets to pay for

long-term health care, if they are poor

enough, or if they become poor because

they have to spend money on health

care, Medicaid ends up financing much

of their long-term care, particularly

nursing home care, as well as home

health care, because that is not provided or covered by Medicare.

The cuts in Medicaid will also severely impact seniors who need longterm care. I don’t think anybody needs

to be reminded of the nursing home crisis we have in this country. Again, if

you significantly cut back on the

amount of money that is available, I

would argue that the quality of care is

certainly going to decrease.

Medicaid is basically a combined

Federal-State health insurance program, primarily for poor women and

children, the blind, and the disabled. It

is the largest provider of long-term

care coverage for the elderly and the

disabled. Two-thirds of the costs of the

Medicaid Program go to provide both

acute and long-term care to the blind,

the disabled, and the elderly.

Most Medicaid beneficiaries are children, and children have the lowest rate

of health insurance in the country. so

therefore, being without Medicaid insurance among children would be catastrophic. The cuts proposed in the Medicaid Program are massive. They are

substantially larger than the total annual Federal costs of the Medicaid Program. The elderly and disabled will

bear the brunt of these cuts, because

that is where most of the money is

spent.

Many senior citizens who have spent

their life savings on long-term care are

enrolled in the Medicaid Program,

which assures that their long-term

care can continue. With the proposed

Medicaid cuts, these seniors will either

be forced out of absolutely vital longterm care, or their families will have

to pick up the costs of maintaining

care. These cuts amount to a huge hidden tax increase on the families of

those who need or may need long-term

care.

Where are we shifting these costs?

We are shifting these costs to the families that have to care, in many cases,

for the elderly. We are going to shift

these costs to the States, because some

States will decide that they cannot let

people just go without health care, particularly seniors, so they will have to

kick in their tax dollars, ultimately resulting in higher costs and taxes on the

State level, or ultimately, also, the

burden goes to the local communities

and the local property taxpayers. Because Medicaid costs are shared with

the States, cuts of the magnitude that

are being talked about here will force

States to bear even larger Medicaid

costs, leading to substantial increases

in State taxes. If States are unable to

meet that, people will lose coverage.

The uninsurance rate, particularly

among children, will explode, forcing

up costs for everyone else. Cost shifting will get much worse.

I think we have to understand that

the Medicaid Program has basically

brought primary and preventive care to

people who would not otherwise get

health care, and without the Medicaid

Program, or with some of the changes

that are being proposed, we are going

to see a lot of people who are poor simply not getting coverage.

Mr. WISE. Mr. Speaker, will the gentleman yield?

Mr. PALLONE. I am happy to yield

to the gentleman from West Virginia.

Mr. WISE. I just want to thank the

gentleman, not only for the special

order, but making the point on Medicaid, because so much is focused, and

rightly so, on the cuts in Medicare,

which is basically health care for the

senior citizen. Medicaid, 50 percent of

Medicaid dollars go to senior citizens,

basically for nursing homes.

I do not think that a lot of people appreciate the fact that there is no nursing home care under Medicare. Medicare does not provide for the long-term

nursing home care that so many families require, so they have to turn, instead, middle-income families, turn instead to Medicaid.

b 1430

The average family, this was a few

years ago, but the statistic was that if

somebody had to pay the cost out of

pocket of a nursing home for their

loved one, the average family would be

impoverished in 13 weeks.

Medicaid is what has kept many,

many middle-income families able first

to meet the responsibility to their

loved one and at the same time to

avoid bankruptcy.

Cutting back on this program, as

well, goes right at the heart of not only

providing health care but I think also

middle-income families.

Mr. PALLONE. I appreciate what the

gentleman from West Virginia said and

it is very true.

The average cost of a nursing home

now, the last I looked, was something

like $30,000 to $40,000 a year, at least in

my area. It might be less elsewhere.

How many middle-income people can

afford that?

Essentially what they do as you described is that they will pay private

maybe for a year or two, depending on

how much money they have, and then

will go on Medicaid because they won’t

have any money left. They will end up

being in a nursing home paid for by

Medicaid a lot longer than that year or

two that they happen to be paying out

of their pocket.

I don’t particularly like that spenddown system that exists right now, but

the bottom line is it depends heavily

on Medicaid.

From the information that I actually

had here before me, the bottom line is

that most of the Medicaid dollars actually are going to pay for programs like

that for the elderly.

We are talking about middle-income

people, if you will, that become impoverished because of the cost of nursing

home care. I appreciate those comments.

The last thing that I wanted to talk

about today, and again this is partially

in response to some of my Republican

colleagues who spoke earlier today,

and were somewhat critical, I thought,

of President Clinton and his response

to the issue of changes in Medicare

that have been proposed by the Republicans on the budget committees.

The reason that I have to take issue

with some of the statements that were

made is because the President’s position has been very clear for several

years now. It is essentially that

changes in Medicare and any savings

that could be achieved in Medicare

costs basically should only be made in

the context of an overall health care

reform.

I totally agree with that premise

that the President has put forth. The

idea is, and he basically expounded on

it the last year or two when he put

forth his health care reform proposals,

is that in the overall context of health

care reform, we could probably save

some money on Medicare costs, but at

the same time we would expand Medicare to provide more services.

The President actually talked about

expanding Medicare to cover prescription drugs, to cover certain long-term

care in certain circumstances.

His idea was not to cut or modify

Medicare and take that money and use

it for other things. His idea was that

the Medicare dollars that are saved

would be used to expand Medicare, particularly for preventative services like
May 12, 1995 CONGRESSIONAL RECORD—HOUSE H 4911

prescription drugs, like long-term care

for the elderly, and to try to basically

save some money as part of the overall

reform that he was making for all

Americans.

I think it is very, very unfair for

some of the Republicans to suggest

that somehow the President is not

being responsive on the Medicare issue.

He has been, he was, and when he was,

he did not receive cooperation from the

Republicans.

I just wanted to highlight that if I

could by a letter that was sent to

Speaker GINGRICH I believe last week

from Leon Panetta, the Chief of Staff

for President Clinton, and just to read

a couple of paragraphs if I could:

Last year, the President spoke directly to

the nation about the need to reform our

health care system and made clear that further federal health savings needed to take

place in the context of serious health care

reform. In December 1994, the President

wrote the Congressional leadership and made

clear that he would work with Republicans

to control Health care spending in the context of serious health care reform. The President repeated this offer in his 1995 State of

the Union speech.

The President has long stated that making

significant cuts in Medicare and Medicaid

outside the context of health care reform

will not work. Such dramatic cuts could lead

to less coverage and lower quality, much

higher costs to poor and middle income Medicare recipients who cannot afford them, a

coercive Medicare program, and cost-shifting

that could lead to a hidden tax on the health

premiums of average Americans. That is why

it is essential to deal with the Medicare

Trust Fund in the context of health care reform that protects the integrity of the program, expands not reduces coverage, and protects choice as well as quality and affordability.

I could not agree more with what the

President suggests, that whenever

changes we make and whatever costs

are saved in Medicare have to be

looked at in the context of overall

health care reform.

Incidentally and importantly for me

because I happen to live in the State of

New Jersey and represent part of New

Jersey, there was an editorial in the

Star Ledger, New Jersey’s largest

daily, on May 3 that basically criticized the Republican budget proposals

and was critical of the fact that the

Republicans did not want to deal with

Medicare in the context of overall

health care reform.

Mr. Speaker, if I could just read parts

of this because I think it is so telling

in terms of the debate we are about to

engage in:

The editorial is entitled, ‘‘Messin’

With Medicare.’’ About halfway down

it says:

The Republicans say President Clinton

wants to hold Medicare reform ‘‘hostage’’ to

a broader plan for national health care reform.

Which would be the wise thing to do.

You can’t mess with Medicare without affecting other parts of health care and spending, certainly not in New Jersey where Medicare spends $5.2 billion a year on 1.1 million

beneficiaries, ninth highest in both categories. Consider the proposal to raise the

age of eligibility for Medicare to 70 so the

program can save about five years on each

persons’ medical bills.

I did not even mention that. That is

another option, I suppose, that you just

raise the age before you get Medicare

benefits.

That means shifting some of the $5.2 billion to employer-paid health plans to cover

all the years Medicare doesn’t. If not, retirees will either have to pay their own way or

go without coverage and care as they enter

the stage of life when they are likely to need

both most. Think of how many would come

of age for Medicare just in time for the program to pay the consequences of years of

government neglect of problems they’ve had

since they were young but which went untreated for lack of health care insurance.

Hospitals and doctors can treat them during those years and try to recover their own

cost by dropping it into everybody else’s bill.

If I could just interject. What the

Star Ledger editorial is saying, that if

you make these changes, cost shiftings

are going to occur essentially for everyone else in the private sector.

Private insurance is switching to managed

care. Health maintenance organizations and

other insurance plans send their members to

the doctors and hospitals which give big discounts, discounts that leave no margin to

cover what Medicare does not.

Shifting senior citizens into managed care

is another reform proposal. The HMOs say

they can do more for less because they hunt

for discounts and manage how many tests

and procedures and hospitalizations are ordered.

If the U.S. government doesn’t have

enough muscle to force prices down through

Medicare, it’s hard to imagine a private plan

that would at least not without cutting benefits drastically.

We face the prospect that Washington may

give seniors the ‘‘choice’’ of switching to illdefined managed care or staying with traditional Medicare at an increased out-of-pocket cost too onerous to make it a real choice.

That is really what my seniors are

most afraid of which is, are they going

to be given the option of some kind of

managed care system which basically

is ill-defined and which does not provide the coverage that they need, or,

which is more likely, they are going to

be staying in Medicare and paying

more and more out of their own pocket

in order to continue as part of the program.

Of course that really begs the ultimate question, which is, if you are not

in a position because you are too poor

or lower middle class that you simply

can’t pay those additional out-of-pocket costs that are the consequence of

these Republicans proposals, you are

going to go without medical care or

preventative care, get sicker and not

be cared for. That, I think, is the ultimate result of these Republican proposals.

I hope that as we go into the debate

over the next week or so that this

comes out and that the American public is able to realize what these

changes, if you will, in the Medicare

program that the Republicans are talking about really mean. I think the

changes are major and I think we have

to do whatever we can in this House to

prevent them from becoming law.

THE FEDERAL BUDGET

The SPEAKER pro tempore (Mr. FOX

of Pennsylvania). Under a previous

order of the House, the gentleman from

West Virginia [Mr. WISE] is recognized

for 60 minutes.

Mr. WISE. Mr. Speaker, special orders are kind of interesting. What are

they about? I am sure the public looks

and they see that there is an empty

hall.

The benefit of special orders, that is

what we are in right now, is it gives

Members on both sides of the aisle, the

aisle being the central aisle down the

middle, it gives Members, Republican

and Democrat, on both sides of the

aisle a chance to lay out a little more

in detail, to expound more fully on

what they think is important, just as

Mr. PALLONE before me laid out some

of his concerns about some of the budget proposals that have come forward.

Often on the floor of the House,

where we are limited by how long we

can speak, whether it is 3 minutes or 5

minutes, where there is the hurly-burly

of debate, it is difficult to get out in a

reasoned way what it is that you really

want to say. That is why many on both

sides of the aisle take this opportunity.

I take this opportunity because I

want to speak about the budget. I want

to speak about what I think ought to

be in the budget. I want to respectfully

disagree with the budget that has been

presented by the Republican side, but

also lay out an alternative, to lay out

my budget, and I want to say this is

my budget, not endorsed necessarily by

anyone.

I think some important points need

to be made. In developing a budget, and

particularly a balanced budget, and everyone agrees on the need for balance

in the budget. We balance a budget in

our families, in our homes, in our businesses, in State and local governments.

But in balancing a budget, what is

the goal? The goal I think for the country is not simply to be able to point

with pride and say we have got a balanced budget. It is to be able to say we

have a balanced budget in the context

of a healthy economy because we take

the steps necessary for a healthy economy.

Yes, we believe that most of the time

that means there is a balanced budget.

But there are times in the Federal Government, not true necessarily in other

budgets, but there are times in the

Federal Government where it is necessary to run an imbalance, in times of

recession when people are being laid

off.

As businesses balance their budgets

by laying off, that is the time when the

Federal Government must come in and

pick up the slack. Otherwise, the recession only worsens.

A balanced budget is important, yes;

healthy economy, though, is the goal.

Let’s talk about it in terms of healthy

economy.

My concern is that if we adhere to a

7-year proposal, that is, ‘‘Thou shalt