S6292 CONGRESSIONAL RECORD — SENATE May 9, 1995

Mr. President, Thomas Jefferson

said, ‘‘The art of government is the art

of being honest.’’ I think that is what

we are faced with. This matter of Medicare and the budget is not a problem of

the Congress, not a problem of those

who are trustees; it is a problem for all

of us who are citizens of this country,

not only for the benefits that it provides, but each of us who must also

pay. We need to be honest with one another as to where we are. The idea of

covering up problems because it is politically expedient, or the idea that you

can shift problems to somebody else

because it is an uncomfortable political position simply does not hold. We

have to be honest, face the problems,

and talk about them. There are clearly

some problems in this area of finance.

Let me talk just a minute about the

chart. We are into charts around here

and it is not a bad idea. It does demonstrate where we are. This particular

chart talks about the Medicare hospital insurance trust fund. It talks

about the fact that if we do nothing, it

will be bankrupt in 7 years. The chart

shows the end-of-year trust fund balances up to 1995, and then projects the

balances for the years up to 2004. This

is not just a chart that is put together

for these kinds of purposes. This is a

chart that is a result of the Social Security and Medicare Board of Trustee

report that was released just a couple

of weeks ago. The trustees being at

least three or four members from the

Cabinet and some public members.

They have indicated this fund will be

bankrupt in the year 2002 unless we do

something. The balance in the health

care insurance trust fund was $133 billion in 1994 and will rise to $136 billion

in 1995.

In 1996, however, the annual deficits

starts to erode the balance of $136 billion and will be broke in 2002. So that

is the problem. It is a solvable problem.

But it is not one that we can brush

under the door, one that we can ignore,

or one to make political issues of. It is

one that we must indeed solve.

The next chart shows the impact this

spending has on the gross domestic

product. The blue being Medicare part

A; and the yellow part is Medicare part

B. Part A is the hospital portion that is

funded by payroll taxes. Part B is that

portion that is funded by general funds

and beneficiary premiums. You can see

how it grows. Here is 1970 and, more

currently, in 1995; here we are in the

year 2020, as a percentage of gross domestic product. This current period is

just below 3 percent, doubling in this

period of time.

So we clearly have an issue we have

to deal with. The alternative is for the

program to go broke. The alternative is

not to have the services and that, of

course, is not acceptable. Unfortunately, the current administration’s

position is to ignore the problem. It is

to say, gee, it is up to the majority to

do something about that. I think that

is too bad. I think it is going to have to

be something that we do collectively,

but we can do something about it.

Why are we where we are? Because

this program has grown at a rate of

about 10 percent per year, and it continues to do so, as opposed to the private sector health care which has been

growing at a more moderate rate of

about 5 percent a year. This year, it

was 4.4 percent and it is on its way

down. Yet the Medicare Program continues to go up. Now, some say—and I

go back to the political thing—‘‘You

Republicans simply want to cut Medicare so you can give tax cuts.’’ That is

not true. That is not where we are. The

issue is to fix Medicare so that we can

continue to have it over a period of

time. There simply is not enough

money to leave it as it is and just simply fund it without changing it. That is

not an alternative. All the money that

we have would be in this program.

So the alternative is to find some

ways to reduce this growth. What we

are talking about doing—and I think

you will see generally in the budget,

which is not out yet—you will see an

effort to reduce it from the 10.5 percent

growth to a growth of maybe 7 percent.

We will see in the newspapers that they

slashed Medicare, cut Medicare. But

what we have done is sought to reduce

the growth of Medicare, and then we

will find some ways to do it more efficiently. There are ways to do that, to

give some options. For example, for

those elderly who choose to continue

as is, that will be an option. For those

who would like to move toward some

kind of medical savings account, perhaps that will be an option and that

would be a choice, and it will be a reduction in the cost of delivering the

same medicine.

The point is that we need to be honest with ourselves in terms of what we

are doing. This is not a political kind

of football or struggle to see who gets

political advantage. The real issue is

how do you continue to provide services to people who need services and do

it in a way that you can, over time,

pay for it. That is the issue. Of course,

it is part of the budget, because the

budget is how much money we can put

out to run Government and what kind

of benefits we can have.

As for Medicare part B, I suspect

there will be an effort to maintain the

contributions that are now there—approximately 31 percent instead of 25

percent of the premium that is required to finance it. We have been moving up at 31 percent. We can go back,

but if we hold it at 31 percent, the program will continue to be preserved. So

there are alternatives. They are not

draconian.

This is where we are on Medicare. I

think it is an excellent example of our

opportunity in this Congress to find

some solutions to share with Americans—all of us—the responsibility of

making collective decisions, to meet

the responsibility of continuing to

have programs where there is need, and

to do it in a responsible financial way.

Mr. President, I hope that we can go

forward with the bona fide discussion

of Medicare and a bona fide discussion

of balancing the budget. I do not think

anybody will suggest that it is going to

be painless. It is not painless in your

family when you find you have to cut

back on the growth of expenditures. It

is not painless in your business when

you discover that it is necessary to

make some changes in order to make it

work. But it is very possible. It is very

possible.

It can be done by continuing to provide those essential services, doing

them in a more efficient way, and we

can collectively do that.

I am pleased that my associates from

the freshman class will be on the floor,

talking about this issue and other issues, urging Members to take advantage of the opportunity and, indeed,

the request, if not demand, from voters

for change. There has been a demand

for change. There will be change. This

is our opportunity to do that.

Mr. President, I yield the floor.

Mr. DASCHLE addressed the Chair.

The PRESIDING OFFICER (Mr.

THOMPSON). The Democratic leader is

recognized for 20 minutes.

COMPROMISE NEAR

fMr. DASCHLE. I wish the President a

good morning. I want to comment

briefly on the series of votes that we

will be taking this morning. As the distinguished acting majority leader indicated, there will be a cloture vote this

morning.

I think in that regard it is important

for people to understand the current

circumstances. Senator DOLE has offered an amendment. Senator ROCKEFELLER and Senator GORTON have also

offered an amendment, a substitute.

We will have the opportunity at some

point to vote on those.

I would hope people will vote against

cloture again this morning simply to

preserve the options that we think are

going to be very important, if indeed

we reach a compromise here. I think

we are getting closer now in the last 48

hours to meaningful compromise.

In that regard, let me specifically

single out the distinguished Senator

from West Virginia for his remarkable

efforts to bring people together, to attempt to find a way to resolve the outstanding differences. He and the distinguished Senator from Washington, Senator GORTON, have done an extraordinary job in the last couple of days in

addressing many of the concerns that

people have raised. I think we are now

beginning to come together in a way

that will accommodate some of the

concerns that have been raised during

the last couple of weeks.

I know that others, as well, have concluded that a compromise is within

reach. My distinguished colleague from

Louisiana, Senator BREAUX, has also

been working on ways to accommodate

some of these concerns and bring all

sides together.
May 9, 1995 CONGRESSIONAL RECORD — SENATE S6293

Senator BREAUX and others have in

the last couple of days talked with people on both sides of the aisle in an effort to try to reach a compromise on

punitive damages, on joint and several

liability, on the statute of repose. I

think we are at a point now where we

may be able to resolve these outstanding issues in a way that will facilitate

a compromise and ultimately bring

Members to a resolution on this issue.

In order to allow the Senator time to

discuss this particular compromise, I

would like to yield the balance of my

leader time to Senator BREAUX. Again,

I commend Senator BREAUX for his effort in this regard. I believe that he

may have found a way with which to

bridge the differences and provide

Members with an opportunity to resolve the many outstanding issues that

still exist. With that, Mr. President, I

yield the balance of my time to Senator BREAUX.

The PRESIDING OFFICER. There

are 171⁄2 minutes remaining.

STANDARD OF FAIRNESS DESIRED

Mr. BREAUX. I thank the distinguished Democratic leader for his comments and his effort in trying to bring

about a compromise that makes sense.

A lot of people have been working very

diligently on this issue of product liability. The Senate and the Congress

has worked on it for a number of years.

We have all struggled with it.

I think the standard that we are all

trying to reach is a standard of fairness, to give neither people who are injured by faulty products an advantage

or people who manufacture those products an unfair advantage. The key I

think is a level playing field. The key

is fairness to everyone. That is something that has been very difficult.

I want to particularly commend the

ranking member of the Commerce

Committee, which I serve, Senator

HOLLINGS, for the great work that he

has done in trying to make sure that

fairness is the standard by which we

operate.

Also, Senator HEFLIN, I think, has

made a great contribution to ensuring

that we do not act in haste, but do this

very, very carefully.

There have been a number of Members on the Republican side—the distinguished occupant of the chair, the

Presiding Officer of the Senate this

morning—has also been very involved

in trying to create a package that is

fair and creates that level playing field

that we are all striving for.

There are a number of other Senators

I have not mentioned that have been

involved in trying to bring all Members

together in doing something that

makes sense. My own preference is that

this is something that the States ought

to do. I am a States righter when it

comes to personal injury and the tort

system, and how the States can handle

this can best be decided by the States.

I think, Mr. President, in trying to

reach an agreement here today I would

urge my colleagues to vote no on the

first cloture motion this morning in

order to allow Members to present to

the Senate what I think is a fair and

reasonable compromise, and tries to

balance those who think that nothing

should be done on the Federal level and

those that think that everything

should be done by the Federal Government here in Washington.

I think that the pending amendment

that is out there that has been talked

about, as a proposed compromise, the

so-called Gorton-Rockefeller, their second proposal, is defective in a number

of ways, and can be improved in order

to reach a fair settlement of this issue,

and put it to rest once and for all.

I think Gorton-Rockefeller is effective in a couple of ways. My substitute,

which I will offer after cloture is not

invoked, will be an amendment to the

Dole-Coverdell substitute, which will

still be pending, tries to address those

defects in the Gorton-Rockefeller in

the following ways: No. 1, on punitive

damages. This has always been something that has been very controversial,

but there is a reason for punitive damages. It says to a manufacturer of defective products, ‘‘Do not do it again.’’

The damages that are awarded have

to be in relation to the ability of the

defendant to pay. Obviously, a

multibillion-dollar corporation is not

going to really be affected by a small

fine of $100,000. They will just say it is

the cost of doing business, and continue to manufacture the defective

product.

So punitive damages serve a purpose.

It says to the manufacturers of products that harm people in this country,

‘‘Do not do it anymore.’’ It has been

very effective. There are products

today that are not on the market because of punitive damages. Companies

have said ‘‘We can’t afford to do this

anymore and we are not going to do it

anymore.’’ There are a number of products that are no longer manufactured—

Dalkon shield, asbestos products, products dealing with breast implants.

Some automobile manufacturers are no

longer producing types of cars, because

they know that if they do they will

cause problems and they will be penalized doing it. So they make a very

practical decision: ‘‘We are not doing it

anymore.’’

The problem with the Gorton-Rockefeller substitute is that, I think, it is

fatally flawed. They try and solve this

problem by saying that small businesses will not be liable for punitive

damages if they have 25 or fewer employees. They make a separate category for small businesses of 25 or

fewer employees.

That is an interesting way of approaching it. What would happen is

that many companies would just structure their operations with 25 or fewer

employees. A trucking company, each

truck could be a separate company. A

cab company, each cab could be a separate company. A boat company, each

one could be a separate company. What

do we do in companies that have 23 employees at the time of the injury, or 25

employees later on during a year?

It is very complicated and it really, I

think, calls for companies to structure

themselves so they can avoid ever having to pay for any punitive damages for

products that would cause problems to

individual people.

In addition, they say that, well, if

the judge thinks that punitive damages

should be awarded more than this cap,

then the judge can do it; but if the defendant does not like what the judge

does, he can ask for another trial. Why

do we have to be so complicated? That

provision just calls for additional litigation, more cost, more expense, additional trials, by directing a very, very,

complicated situation I think is not

necessary.

What my amendment will do is to

take from the suggestions of other

Members who have suggested ideas

that address this problem in a fair way.

Our colleague, Senator DODD from Connecticut, has suggested something that

I think makes sense and is the essence

of my amendment. It says that when a

jury finds that punitive damages are

warranted because of conscious and flagrant violations by the manufacturer

of a product, then the decision on how

much the punitive damages should be

will be decided by the judge. He does it

by looking at that particular defendant, determining their ability to pay,

determining how successful economically that company is, looking at their

intent, how they handle everything,

how long the violations continued, and

then the judge will make a decision on

the amount of the punitive damages

that are necessary to prevent this from

happening again in the future.

Mr. President, and my colleagues, I

think that is a fair way of resolving

this problem. A very complicated

structure that says 25 or less has one

standard, and then the judge can overrule the jury if he wants to, but if the

defendant does not like it they can ask

for another trial, is too complicated,

too time consuming, encourages too

many additional trials, and is not the

way to do it.

I prefer the suggestion of Senator

DODD, which is in my amendment,

which simply says if the jury finds the

defendant was so negligent in a fashion

that deserves punitive damages to be

awarded, then the judge will decide

what is an effective and correct

amount to be awarded.

Second, on the statute of repose, I

think the Gorton-Rockefeller amendment is defective again. Remember

this uniformity argument we talked

about? They kept saying we need to

pass this bill because we want to make

it uniform throughout the United

States. Their bill is defective because

it says the statute of repose will be 25

years unless the State wants to make

it less. That is not uniform. It says we
S6294 CONGRESSIONAL RECORD — SENATE May 9, 1995

can have 50 different States with 50 different statutes of repose and 50 different standards for a person who is injured to have to worry about. That is

not uniformity at all.

The statute of repose, of course, says

that after a product has been in place

for a period of time you can no longer

bring a cause of action against that

product because it is defective. My

amendment says let us make it uniform, 25 years across the country, nationwide; it is the same in every State.

That brings about uniformity both for

the person who manufactured the product and uniformity for the person who

may be injured by a defective product.

I think that makes sense and is the

right way to go.

The third area I think they are defective in, in their suggestion, is on the

question of joint and several liability.

What they are trying to do is address

the problem of a manufacturer or defendant that is just a little bit responsible, just a little bit negligent. Their

argument is if someone is only responsible for 3 percent of the injury he or

she should not be liable for 100 percent

of the damages for noneconomic damages, that is the pain and suffering

type of injuries that a person would receive from a defective product. But the

way they have tried to handle this

problem is say you are not going to

have any joint liability for noneconomic damages and that will take

care of the problem. Yes, that takes

care of the problem. It wipes out the

possibility of an injured person, perhaps, from getting any recovery at all.

What I am going to suggest in my

amendment is simply this—and this is

the language, again, that has been suggested by Senator SPECTER, who has

come up with I think a very good idea

to solve this problem. I picked some

from Democratic colleagues, Senator

DODD, some from our Republican colleagues, Senator SPECTER, and tried to

put them together because that is what

we have been talking about for the last

several days. Senator SPECTER’s suggestion, which I have included in my

suggestion, is simply to say there is a

de minimis standard. If a defendant is

responsible for less than 15 percent of

the injuries that were caused, they

cannot be held jointly liable, they can

only be held liable for that percentage

of the damages that it has been determined they are at fault for, that they

caused. If it is 3 percent they can only

be responsible for 3 percent. But after

that threshold, if they are 20 to 30 to 40

percent responsible, then they can be

held jointly liable. I think that takes

care of the so-called de minimis problem, whereby we should not hold someone responsible for the whole amount

of damages if they only caused a very

small, de minimis, portion of those

damages. But after a certain point,

joint liability should prevail.

We picked up Senator SPECTER’s suggestion, which I think is a very good

one, that says if a person is 15 percent

or more responsible for these losses,

then they can be held jointly liable for

noneconomic losses that they caused.

That defendant, of course, has a cause

of action for anybody else who is liable

for the other portion of the damages.

That is what normally occurs. The defendant then brings in the other party

and they can be held responsible—to

the defendant who has paid the entire

amount—for their portion. So the system works very well. But my suggestion, I think, takes care of the de

minimis concern that has been expressed by many of our colleagues.

I will offer this amendment and will

be able to offer it if the cloture motion

is voted down. I think it would be a big

mistake, when we are so close to coming up with a compromise agreement,

to at this time invoke cloture and prevent the opportunity to offer this

amendment with a chance of it becoming law. This is really an attempt to

try to reach a legitimate compromise.

We can debate this for a long time. We

could continue to prevent cloture from

being invoked.

I think it is time the Senate bring

this measure to a close. What I have

tried to do is pick some of the best

ideas from my colleagues. I continue to

emphasize that many of the things I

have in my legislation are the product

of the suggestions of some of my colleagues—Senator SPECTER in particular

with this de minimis standard, my colleague Senator DODD with the concept

of punitive damages being set by the

judge after a trial has occurred that determines that punitive damages would

be justified. I think that makes good

sense, to try to incorporate Republican

ideas and Democratic ideas, to put together a package which is truly a compromise.

One of the things the advocates of

this so-called tort reform legislation

have advocated is a national standard

when it talks to punitive damages. I

have incorporated their ideas on the

national standard being in fact that

the plaintiff must show a conscious and

flagrant indifference to safety concerns, and the plaintiff must do it and

show it by clear and convincing evidence. That will be a national standard

now for punitive damages in product liability cases. I have incorporated that

suggestion. That is the same as in the

Gorton-Rockefeller legislation.

In fact, much of what this substitute

that I will offer really incorporates is

the better features from the GortonRockefeller language. But it also tries

to address the three major areas in

which I think they were defective, and

those are how punitive damages are

set, how they deal with joint and several liability, and how they deal with

the statute of repose.

So I hope when we come to the floor

to vote on cloture this morning, which

has already been set, our colleagues

will know there is an effort among

many of us who have been involved to

some extent in this legislation to try

to put together a package of amendments that is truly a genuine compromise, that tries to treat people who

are injured by defective products on

the same level playing field that we are

trying to treat defendants who in fact

have manufactured defective products.

It is improper for this body to try to

give advantage to one group over the

other group. If we conclude there

should be some national standards,

then the national standards should

apply both to those who are injured as

well as to those who make the product

that has caused injury, in the same

way. It would be unfair and improper

to say one side is going to get more fair

treatment than the other. I am concerned the provisions that are pending

in the Gorton-Rockefeller substitute in

fact are not fair; in fact they do allow

for more loopholes to be created with

the 25-employee limitation, they do

create some other problems with regard to the establishment of punitive

damages, they encourage more trials,

and they encourage, I think, abuse of

how punitive damages would be set.

We have tried to offer something that

addresses all these problems in a fashion that truly represents a fair and just

compromise. But we do need to ask our

colleagues—who may be trying to figure out the situation as to where we

are—ask them to vote against the cloture motion and allow us to come in

with a compromise that I think for

once and for all will settle this very,

very difficult, very emotional set of issues that we have struggled with for so

many days.

The alternative I will offer, and hope

to be joined by a number of our colleagues, will be something that will

give everybody an opportunity to say

we made some reforms but we did it ultimately and finally in a fashion that

is fair to everyone involved. With that,

Mr. President, is there any time left on

the leader time?

The PRESIDING OFFICER. Thirty

seconds.

Mr. BREAUX. I will just reserve that

30 seconds in case the leader needs it.

Mr. President, I suggest the absence

of a quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. LEVIN. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER (Mrs.

HUTCHISON). Without objection, it is so

ordered.

NRA’S FUNDRAISING LETTER

fMr. LEVIN. Madam President, recently, the National Rifle Association

issued a widely circulated fundraising

letter over the signature of Executive

Vice President Wayne LaPierre and

that letter is full of questionable overheated language. I wish to focus on one

paragraph in particular. The letter

states, and I am quoting exactly:

In Clinton’s administration, if you have a

badge, you have the Government’s go-ahead