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[Congressional Record Volume 141, Number 85 (Monday, May 22, 1995)]
[Senate]
[Pages S7071-S7078]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

               REPUBLICAN BUDGET PLANS AND MEDICARE CUTS

  Mr. LEAHY. Mr. President, I believe the current debate in Congress on 
the budget is the most important action Congress will take this year. 
The Republican budget proposals are indeed monumental. The debate over 
how we balance our Federal budget will have repercussions to State and 
local governments for years to come.
  I agree with several things in the Republican budget plans. I agree 
we need to continue to reduce the deficit and achieve a balanced 
budget. The Federal deficit and its resulting interest payments on the 
growing national debt put a heavy drag on our economy. In 1990 and 
1993, I cast politically unpopular votes that cut about $1 trillion 
from the projected deficit. Since 1992, the deficit has been reduced 
from $290 to $176 billion this year--a drop of one-third. And more 
savings must be made.
  But as Ross Perot would say: ``The devil is in the details.'' How we 
balance the Federal budget is just as important as balancing it.
  I am extremely disappointed that the Republican budget would reduce 
Medicare spending by the largest amount in history--$256 billion in the 
Senate version and $288 billion in the House.
  These numbers are big, but what do they really mean to Vermonters? 
Under the Senate Republican budget proposal, the average Medicare 
spending per Vermont beneficiary would be reduced from today's level by 
over $4,000 over the next 7 years.
  Over the next 7 years, Vermont will lose $339 million in Medicare 
funding, $79 million in the year 2002 alone. If this loss of funds is 
split 50-50 between Medicare recipients and providers, in the year 2002 
Medicare beneficiaries will be paying about $500 in increased 
copayments, premiums, and deductibles. Hospitals, doctors, and other 
health care provides will be receiving $500 less from each Medicare 
recipient.
  These reductions result from slowing the projected growth of Medicare 
to 7 percent a year instead of the projected increase of 10 percent a 
year. Some claim that these reductions are not really cuts. I fail to 
understand that logic.
  For the 83,000 Vermonters on Medicare and in particular the 12 
percent of Vermont seniors who live below the poverty level, does it 
make any difference what we call these reductions? Over the next 7 
years, Vermont seniors, or the hospital, or the doctor will have to 
come up with over $4,000 to maintain their current level of benefits.
  Ask the elderly couple that is retired and living on a fixed income 
if they can afford this slowing of growth? Ask the family down the road 
that has a grandparent who was just diagnosed with Alzehiemers whether 
they will be able to afford this slowing of growth? Ask the rural 
doctor who is already having trouble covering costs whether he or she 
can afford this slowing of growth?
  Ask the typical rural hospital that currently receives only 91.5 
cents on the dollar for the cost of each Medicare participant whether 
it can afford this slowing of growth. Ask the Vermonter with private 
health insurance that is currently paying that remaining 8.5 cents on 
every dollar on hospital costs alone due to cost shifting whether they 
can afford this slowing of growth?
  The scariest part about the Senate Republican budget resolution is 
that it ignores the fact that it is not just Medicare costs that are 
rising. All health care costs are rising. And by just cutting 
Medicare--and Medicaid for that matter--a huge cost-shift of medical 
expenses will result and make sure that all Vermonters pay more for 
health care.
  Vermonters need to realize that the magic number of $256 billion in 
the Senate and $288 billion in the House will do nothing for the long-
term solvency of the Medicare trust fund. It extends the trust fund's 
life another 3 years from the current projection of it going broke in 
2002. Since the first trustees' report in 1970, there always has been a 
date certain for the trust fund's insolvency. It is interesting to note 
that last year the insolvency date was projected at 2001, yet 
Republicans at that time saw no such urgency in shoring up the trust 
fund or dealing with the real problem of overall health care costs.
  The Republican Medicare cuts are short-sighted. Simply cutting 
Medicare does not make its problems go away. To reduce Medicare costs, 
we must reduce health care costs throughout the system, which can only 
be achieved by true health care reform. But the Republicans have no 
plan to curb Medicare costs except to cut the program.
  I hope in the coming months that Members from both sides of the aisle 
hammer out a plan to deal with the issue of comprehensive health care 
reform. But in the meantime, simply cutting Medicare is not the answer.
  Mr. BIDEN. Mr. President, this Republican budget sets the wrong 
priorities. The goal is right--steady movement toward a balanced 
budget--but how the Republicans propose to get there is wrong. More 
than half of all the cuts in this budget come from just two programs--
Medicare and Medicaid. Specifically, the Republican budget would cut 
$256 billion from Medicare over the next 7 years and another $175 
billion from Medicaid, about $58 billion of which would come from long-
term care for the elderly. This would be, without a doubt, the largest 
Medicare cut in history--three times larger than any previous cut.
  This was not part of the Republican Contract With America. In fact, 
some have forgotten about an earlier contract--the contract we made 
with the senior citizens of America--those who worked hard and played 
by the rules. Cutting health care for those who are at an age when they 
need health care the most is simply wrong. To cut Medicare as much as 
the Republicans are proposing violates the long-standing contract with 
America's seniors.
  And, why? So that the wealthy can be guaranteed a tax cut and so that 
rich billionaires can continue to renounce their U.S. citizenship in 
order to avoid paying taxes.
  I believe we should have a tax cut--one that is targeted to middle-
class families for the cost of education. And, I will discuss that 
issue in more detail later. But, the Republicans in the House have 
already passed their tax cut. Families making less than $30,000 would 
get a tax cut of $124--less than 50 cents a day--while families making 
over $200,000 would get a tax cut of over $11,000.
  I am not saying we should raise taxes on the wealthy. And I am not 
saying that we should give a tax cut to everyone but the wealthy. But, 
Mr. President, do our richest 1 percent, or 5 percent, need a tax cut 
more than our retirees on a fixed income need protection against 
skyrocketing health care costs. I do not think so. I do not think we 
should provide a tax cut for guys like me--and I am the poorest one 
around this place--while we are increasing my mother's health care 
costs. And, I certainly do not believe that billionaires who renounce 
their American citizenship should have priority over the seniors who 
gave so much to this country.
  I know what the Republicans are saying. They are claiming that they 
are not cutting Medicare and Medicaid--only reducing the rate of 
increase. Technically, true. But, for those seniors whose costs go up 
because Medicare pays for less, is that not a cut? For those seniors 
who have less access to health care services because Medicare providers 
refuse to take new Medicare patients, is that not a cut? For those 
seniors who may no longer qualify for Medicaid nursing home care 
because Medicaid payments
 to States are restricted, is that not a cut? Call it what you want. 
The fact is, seniors will pay more--much, much more.

  Assuming that half of the Medicare cuts will come from seniors 
themselves, this Republican budget means that the average senior 
citizen will pay between $800 and $900 more in out-of-pocket costs--
premiums, deductibles, and copayments--in 2002 than they would 
otherwise pay. Over the course of the next 7 years, the elderly would 
[[Page S7072]] have to pay a total of about $3,200 more in out-of-
pocket costs. That is on top of the average senior already expecting to 
pay about $25,000 in premiums, copayments, and deductibles for Medicare 
between now and 2002. The Republican budget would result in a 13-
percent increase in out-of-pocket Medicare payments by America's 
seniors. And, on average, seniors already pay 21 percent of their 
income on health costs.
  I know what else the Republicans are saying. They are claiming that 
we need to cut Medicare in order to save it. They argue that Medicare 
will go bankrupt in 2002, and they just want to protect the program for 
posterity. Mr. President, this budget does not reform Medicare; it cuts 
Medicare. Not one single proposal has been offered to save Medicare. 
Instead, the budget establishes an arbitrary number of $256 billion and 
says that is how much is going to be cut regardless of the actual cost 
of medical services or the total number of people who qualify. Between 
now and the year 2002, the number of seniors eligible for Medicare will 
increase by 4 million--15,000 in my State of Delaware. The Medicare 
funds will not keep pace. Someone gets cut.
  If the Republicans were interested in saving Medicare, they would 
attack the causes of why Medicare is going bankrupt. But, they do not. 
If the Republicans were interested in saving Medicare, they would come 
to the table with the goal of saving Medicare. Instead, they want 
Democrats to come to the table after they have pulled an arbitrary 
number out of thin air.
  And, where have the Republicans been? We have known since 1985 that 
the Medicare trust fund would become insolvent near the turn of the 
century. And, yet, for 7 years, Republican Presidents Reagan and Bush 
never proposed saving Medicare from bankruptcy. In 1993, not one single 
Republican in either the House or the Senate voted for President 
Clinton's proposal to shore up the Medicare trust fund. And, last fall, 
Republicans were so concerned about saving Medicare that they forgot to 
include it as part of the Contract With America.
  Let us stop the charade. Republicans are cutting Medicare to balance 
the budget and to provide tax cuts to the wealthy. That is their 
priority. They are wrong. Democrats have alternatives that will achieve 
the same goal--a balanced budget in 2002--without taking this much from 
Medicare. For example, Senators Rockefeller and Lautenberg have an 
amendment to return part of any economic dividend that results from a 
balanced budget back to the Medicare and Medicaid Programs. We ought to 
adopt the Democratic amendments and fulfill the original Contract With 
America--the contract with America's seniors.
  Mr. BINGAMAN. Mr. President, I rise in support of the amendment 
offered by my distinguished colleague from West Virginia, Senator 
Rockefeller, to restore $100 billion of the $426 billion proposed cuts 
in the Medicare and Medicaid programs over the next 7 years.
  Mr. President, virtually everyone--Members of Congress, the 
President, program administrators and even current beneficiaries of the 
Medicare and Medicaid Programs--agree that changes, including slower 
spending, need to be made to the current system. The cost of health 
care is growing too fast and too high. Medicare, for example, currently 
is expanding by more than 10 percent per year, or three times CPI. 
These escalating costs simply are unsustainable.
  President Clinton and many of us here in Congress spent 2 years 
trying to deal with this problem in a responsible, comprehensive way. 
Had we been successful, the Medicare Program would be more secure and 
access to affordable health care would have been a reality for all 
Americans, young and old alike. But at the time, my colleagues on the 
other side of the aisle were not interested in working with us to help 
make the Medicare Program secure. We heard repeatedly that there was no 
crisis, no need for Congress to act.
  So here we are, with the Medicare Program in real trouble and the 
chairman of the Senate Budget Committee proposing to save it by cutting 
the program $256 billion over 7 years. Along with the Medicare cuts are 
$170 billion in cuts to the Medicaid program, which often serves as a 
long-term care safety net for seniors and the disabled.
  My first question is ``What do cuts of this magnitude mean to my 
homestate of New Mexico?'' Unfortunately, Mr. President, States like 
New Mexico are going to be hit especially hard. This is due to a 
combination of factors:
  First, New Mexico has a growing senior population.
  Second, New Mexico has a high poverty rate; a high rate of seniors 
living in or near poverty; and low per capita income level.
  Third, New Mexico's hospitals and providers are heavily dependent on 
Medicare and Medicaid revenue, more so than most other States.

               senior population--dependency on medicare

  In New Mexico, more than 212,000 seniors, disabled children, and 
disabled adults currently depend on Medicare. By 2002, more than 
257,000 New Mexicans are anticipated to be eligible for the program. 
Looking at seniors alone, New Mexico's over-65 population grew by 37.8 
percent between 1980 and 1990. The senior population is expected to 
grow by another 11 percent by 2000--to 204,000--and by more than 21 
percent by 2010--to 247,000. Our over-65 growth rate, which is 
currently at 11 percent, is one of the highest in the country.
  What do the proposed cuts mean to these seniors? According to an AARP 
study, to the average Medicare beneficiary in New Mexico it means 
$3,237 more in out-of-pocket expenses over the next 7 years, or $462 
per person per year. This is $462 per person more in higher premiums, 
higher deductibles, higher copays, and more services not covered.

         seniors in poverty--tie between medicare and medicaid

  A cost shift of this type is especially tough on New Mexico's seniors 
and their families because so many in my State are living at or near 
poverty. In fact, at 22.4 percent, New Mexico has one of the highest 
poverty rates in the country. One in every five New Mexicans--including 
about 26,000 seniors--lives in poverty.
  Mr. President, the majority of my constituents are barely making ends 
meet today. And then along comes the majority in Congress with an 
significant increase in the obligation of beneficiaries--all 
beneficiaries, regardless of income level--to pay more out-of-pocket 
for their health care. How can poor, elder New Mexicans possibly come 
up with an additional $3,200 for their health care? The simple answer 
is that they will not be able to.
  Through the Medicaid Program, the State typically would pick up the 
extra cost. But to do so, the State must raise additional revenue, 
either by cutting services elsewhere or by raising taxes. Under the 
budget plan before us today, the situation is even more grim for the 
States: before even beginning to address the new costs they will face, 
States must first come up with revenue to cover the initial shortfall 
they will face from the $170 billion in proposed cuts to the Medicaid 
Program itself.
  If New Mexico or any other State will not or cannot raise the revenue 
needed to keep the safety net in place without Federal assistance, the 
results will be tragically clear: hundreds of seniors will have to go 
without health care; and hundreds of families will be forced to 
shoulder even more of the costs and burdens of providing long-term care 
for an elderly parent or relative. Those least able to afford it and 
most vulnerable among us--the very poor, frail elderly--will be hurt 
most.
  The very bad news does not end there, however. I want to turn for a 
moment to the situation facing seniors with income levels above the 
poverty line. In New Mexico, our per capita income is $14,709, or more 
than $5,000 below the national average. Per capita income for New 
Mexico's seniors is even lower, estimated at around $12,000 per year by 
AARP, with between 20-25 percent being spent on health care.
  If Senator Rockefeller's amendment does not pass, the message to New 
Mexico's seniors will be that they will have to spend even more on 
their health care. The Senate will be telling New Mexico's seniors that 
they must spend more of their $12,000 to $14,000 annual income on 
health care. To many, this will simply be impossible.
  I have just described the impact of the proposed Medicare cuts on New 
Mexico's Medicare beneficiaries. The adverse impact on our State does 
not stop there. Just as the cuts hurt New [[Page S7073]] Mexico seniors 
more than seniors in many other States--because many of our seniors are 
living at or near poverty and our per capita income level is low--the 
cuts will also hit New Mexico's hospitals and health care providers 
harder than hospitals and providers in other States.

                  new mexico's hospitals and providers

  The proposed Medicare and Medicaid cuts will be tough on our 
hospitals and providers, particularly in rural areas, because they are 
disproportionately dependent on Medicare and Medicaid for their 
revenue. Most NM hospitals/providers depend on the programs for 70 to 
80 percent or more of their revenue. Nationally, 60 percent or less of 
all revenue comes from Medicare and Medicaid.
  A hospital with a 60 percent or lower Medicare revenue share can 
compensate for lost Medicare-Medicaid dollars by cost-shifting to 
private insurers. NM hospitals and providers cannot. They depend on 
reimbursement from Medicare and Medicaid. Even a slight cut to rural 
providers could represent a serious financial threat to the providers 
and a very real threat to health care for rural New Mexicans.
  Mr. President, I believe we can find a more equitable way to achieve 
the kind of savings and fiscal accountability we need. We can agree, 
for example, that we can develop ways for fairly changing many 
variables contributing to higher health care costs. Fraud, waste, and 
inefficiency can all be identified, targeted, and changed. We can 
improve case management, increase use of cost-effective, quality 
managed care where appropriate, and focus more on prevention and early 
detection.
  I believe the amendment put forth by Senator Rockefeller represents a 
more equitable, more reasonable approach to the challenges we face. I 
will support it, and I urge my colleagues to do likewise.
  Mr. KENNEDY. Mr. President, in crafting this budget resolution, the 
Republican majority has made a great show of its pledge to protect 
Social Security. But when the American people look behind the rhetoric, 
they will find that the Republican budget plan is a sneak attack on 
Social Security, and a violation of our Government's compact with its 
citizens.
  As every senior citizen knows, the Medicare part B premium is 
deducted directly from their Social Security check. When that premium 
goes up, Social Security benefits go down. The Republican budget will 
raise those premiums and reduce Social Security checks by more than 
$1,750 per senior over the life of this budget plan. For an elderly 
couple, the reduction in the Social Security check will be $3,500. Next 
year alone, as a result of this Republican budget, seniors will see a 
premium increase of $134 compared to current law. In effect, that will 
eliminate more than half the average COLA increase of $237. Lower 
income seniors will lose 83 percent of their COLA.
  Senior citizens rely on their annual cost of living adjustments to 
pay for the increased costs of food, housing, fuel, and clothing that 
they face every year. But under this Republican budget, the majority of 
that COLA will be stolen to pay for tax cuts for the wealthy. The last 
time the Republicans tried to cut the Social Security COLA they were 
forced to back down. Now they are trying to do it by stealth--but it is 
not going to work.
  It is not only through the increase in the Medicare premium that the 
Republicans are attacking Social Security. In the House budget, the 
Republicans have arbitrarily assumed an unprecedented, unilateral 
reduction of the CPI of .6 percent. That change is designed to cut 
Social Security COLA's by another $23 billion over the next 7 years.
  At the most basic level, the harsh cuts in Medicare contained in this 
budget resolution are a repudiation of our historic commitment to 
Social Security, because the distinction between Medicare and Social 
Security is a false one. Medicare is part of the same compact between 
the Government and the people as Social Security. That compact says 
``Contribute during your working years, and we will guarantee basic 
income and health security in your retirement years.''
  Any senior citizen who has been hospitalized or who suffers from a 
serious chronic illness knows that there is no retirement security 
without Medicare; the cost of illness is too high. A week in an 
intensive care unit can cost more than the total yearly income of many 
senior citizens.
  It is the low- and moderate-income elderly who will suffer most from 
these Medicare cuts. Eighty-three percent of all Medicare spending is 
for older Americans with annual incomes below $25,000; two-thirds is 
for those with incomes below $15,000.
  How can any budget plan that purports to be part of a Contract With 
America break America's contract with the elderly? It is bad enough to 
propose these deep cuts in Medicare at all. It is even worse to make 
these cuts in order to pay for an undeserved and unneeded tax cut for 
the wealthiest Americans.
  The cuts in Medicare are unprecedented--$256 billion over the next 7 
years. By the time the plan is fully phased in, the average senior 
citizen is likely to pay $900 more a year in Medicare premiums and out-
of-pocket costs. An elderly couple would have to pay $1,800. Over the 
life of this budget, they have to pay $6,400 in additional costs.
  The part B deductible could double under this Republican plan, 
raising the amount a senior citizen would have to pay before they can 
see a doctor by an additional $100.
  A typical senior citizen needing home health services could have to 
pay an additional $1,200. Anyone who is sick enough to need the full 
home care benefit could have to pay $3,200.
  Seniors could lose the freedom to select their own doctor, or face 
unaffordable costs if they refuse to give up their family physician.
  The fundamental unfairness of this proposal is plain. Because of gaps 
in Medicare, senior citizens already pay too much for the health care 
they need. Average elderly Americans pay an astounding one-fifth of 
their income to purchase health care--more than they paid before 
Medicare was even enacted 30 years ago. And the reason we enacted 
Medicare then was because the elderly faced a health care crisis then.
  Lower income, older seniors pay even more than a fifth of their 
income for health care. Medicare doesn't cover prescription drugs. Its 
coverage of home health care and nursing home care is limited.
  Unlike private insurance policies, Medicare doesn't have a cap on 
out-of-pocket costs. It doesn't cover eye care or foot care or dental 
care. Yet this budget plan piles additional medical costs on every 
senior citizen--while the Republican tax bill that has already passed 
the House gives a tax break of $20,000 to people making more than 
$350,000 a year.
  It is interesting to compare the generous benefits that the authors 
of this resolution enjoy under the FEHBP plan available to every Member 
of Congress to the much less adequate benefits provided by Medicare to 
senior citizens. Medicare has no coverage at all for outpatient 
prescription drugs, but they are fully covered under Blue Cross-Blue 
Shield Standard, the most popular FEHBP plan. The combined deductible 
for doctor and hospital services under Blue Cross/Blue Shield is $350. 
For Medicare, the combined deductible is $816. Blue Cross/Blue Shield 
covers unlimited hospital days with no co-payments. Under Medicare, 
seniors face a $179 per day copayment after 60 days and $358 after 90 
days. After 150 days, Medicare pays nothing at all. Medicare covers a 
few preventive services, but it does not cover screening for heart 
disease, colorectal cancer, and prostate cancer--all FEHBP benefits. 
Dental services are covered for Members of Congress--but not for senior 
citizens. Members of Congress are protected against skyrocketing out-
of-pocket costs by a cap on their total liability, but there is no cap 
on how much a senior citizen has to pay for Medicare co-payments on 
deductibles.
  Members of Congress earn $133,600 a year. The average senior's income 
is $17,750. For the limited Medicare benefits they receive, seniors pay 
$46.10 a month, but for their comprehensive insurance coverage Members 
of Congress pay a grand total of $44.05 a month--$2.00 less than 
seniors must pay out of incomes one-eighth as large.
  The Republican sponsors of this resolution do not seem to understand 
that the average senior citizen has an income of only $17,750 a year. 
Because of this budget, millions of elderly Americans will be forced to 
go without the health care they need. Millions more will have to choose 
between food on the [[Page S7074]] table, adequate heat in the winter, 
paying the rent, and paying for medical care. These proposals are 
cruel--and they are unjust. Senior citizens have earned their Medicare 
benefits, they have paid for them, and they deserve them. Yet our 
Republican friends would deny them.
  How do they explain this to senior citizens? This is a budget that 
Marie Antoinette would love--let them eat cake.
  The Medicare cuts in this resolution harm more than senior citizens. 
These proposals will strike a severe blow to the quality of American 
medicine, by damaging hospitals and other health care institutions that 
depend heavily on Medicare.
  These institutions provide essential health care for Americans of all 
ages, not just senior citizens. Progress in medical research and 
training of health professionals depend on the financial stability of 
these institutions. Academic health centers, public hospitals, and 
rural hospitals will bear an especially heavy burden. As 
representatives of the academic health centers that guarantee our 
world-renowned excellence in health care said of this budget, ``Every 
American's quality of life will suffer as a result.'' Health care 
providers from the American Hospital Association, to the American 
Medical Association, to the Catholic Health Association have warned of 
the devastating effects of these cuts on the quality of care.
  In addition, these massive cuts will inevitably impose a hidden tax 
on workers and businesses, as the National Association of Manufacturers 
has warned. The private sector will face increased costs and higher 
insurance premiums, as physicians and hospitals shift even more costs 
to the non-elderly. According to recent statistics, Medicare now pays 
only 68 percent of what the private sector pays for comparable 
physicians' services; for hospital care, the figure is 69 percent. The 
proposed Republican cuts will widen this already ominous gap.
  During the course of this debate we have heard a number of arguments 
that attempt to defend this fundamentally indefensible proposal. We 
heard them over and over again during the course of this debate--as if 
repetition would somehow make them right.
  The first argument is that deep cuts are needed to save Medicare from 
bankruptcy. The hypocrisy of this claim is astonishing. Just a few 
weeks ago--before they began to feel the political heat on Medicare 
cuts--the Republicans passed a tax bill through the House that took 
almost $90 billion in revenues out of the Medicare hospital insurance 
trust fund over the next 10 years--and brought it that much closer to 
insolvency. We did not hear a word then about the impending bankruptcy 
of Medicare.
  We also did not hear about it when last year's Medicare trustee's 
report was issued. Republicans were too busy last year blocking health 
reform and pretending there was no health care crises at all.
  This year's trustees report actually shows the Medicare trust fund to 
be in a stronger financial position than last year. The newfound 
Republican concern for the solvency of the Medicare trust fund is a 
sham--a convenient pretext to rob Medicare to pay for tax breaks for 
tycoons. Medicare is nowhere near as bankrupt as Republican priorities.
  It is true that the April 3 report of the Medicare Trustees projects 
that the Medicare Hospital Insurance Trust Fund will run out of money 
by 2002. But few if any Republicans would be talking about Medicare 
cuts of this magnitude, absent the need to finance their tax cuts for 
the wealthy. As the Medicare Trustees themselves noted in their report, 
modest adjustments can keep Medicare solvent for an additional decade--
plenty of time to find fair solutions for the longer term.
  Similar projections of Medicare insolvency have been made numerous 
times in the past, but adjustments enacted by Congress were able to 
deal with the problem without jeopardizing beneficiaries. Now is no 
different. For example, an estimated 20 percent of all Medicare 
hospitalizations could be avoided with better preventive services and 
more timely primary and outpatient care. As much as 10 percent of all 
Medicare expenditures may be due to fraud, and could be reduced or 
eliminated by better oversight. A simple technical change that would 
shift primary responsibility for home health services from the Hospital 
Insurance Trust Fund to the Supplementary Insurance Fund would keep the 
Hospital Insurance Fund solvent until 2008, without reducing benefits 
or increasing Government costs. This single adjustment would actually 
keep the Trust Fund solvent a year longer than all the draconian 
Republican cuts put together.
  Some Republicans have accused Democrats of attempting to scare 
America's senior citizens. Senior citizens do have reason to fear what 
this budget resolution will do to their Medicare benefits. But the real 
fear-mongers are those who attempt to cloak their unfair, misguided 
budget in phony dire warnings about the bankruptcy of Medicare.
  We don't have to destroy Medicare in order to save it. Congress will 
never allow the Medicare Trust Fund to become bankrupt. I know it. The 
Members on the other side of the aisle know it. And the American people 
know it.
  Another false Republican argument in defense of Medicare cuts is that 
they are not really a cut, because the total amount of Medicare 
spending will continue to grow. The fact is that the Republican plan 
calls for spending $250 billion less on Medicare that the Congressional 
Budget Office says is necessary to maintain the current level of 
services to the elderly.
  Every household in America knows that if the cost of your rent, the 
cost of your utilities, and the cost of your food go up--and your 
income stays the same--you have taken a real cut in your living 
standard.
  Only in Washington could someone contend with a straight face that 
making senior citizens pay $900 a year more for their medical needs is 
not a cut in their benefits. Every senior citizen understands that.
  Republicans speak of a cut in defense, even though defense spending 
has stayed stable. Apparently, the same Republican logic doesn't apply 
to senior citizens that applies to spending on guns and tanks. Well, I 
say to them--a cut is a cut is a cut--whether it's in Medicare or 
Social Security or national defense.
  To try to defend their no cut argument the Republicans have even 
resorted to quoting President Clinton speaking in favor of his health 
reform plan. This plan included a reduction in Medicare growth as part 
of an overall reform that slowed cost growth throughout the system. 
What they have conveniently ignored is that the Clinton plan put every 
dollar taken out of Medicare back into expanded benefits to senior 
citizens. This Republican budget takes money from senior citizens to 
fund tax cuts for the wealthy. And under the Republican budget, the 
already dangerous gap between what Medicare pays and the private sector 
pays for comparable services will continue to widen, while under the 
Clinton plan total Medicare spending would actually have increased at a 
faster rate than private sector spending.
  The third specious Republican argument is that Medicare costs can be 
cut by encouraging senior citizens to join managed care. True, such 
care may help bring Medicare costs under control--in the long run. 
Enrollment by senior citizens in managed care is already increasing 
rapidly. it is up 75 percent since 1990. But no serious analyst 
believes that increased enrollment in managed care will substantially 
reduce Medicare expenditures in the time frame of the proposed 
Republican cuts.
  In fact, according to the General Accounting Office, Medicare now 
actually loses money on managed care, because the healthiest senior 
citizens tend to enroll in managed care and the payment formula is too 
generous. This kind of problem can easily be worked out, and will help 
to restore the fiscal stability of the program. But the only way to 
save serious money in the short-term on managed care is to penalize 
those who refuse to join. This option has already been suggested by the 
Republican health task force in the House of Representatives.
  But I say right now to my Republican colleagues--it is wrong to force 
senior citizens to give up their freedom to choose their own doctors 
and hospitals. It is wrong to penalize them financially if they refuse 
to enroll in managed care. [[Page S7075]] 
  The American people will never accept a policy that tells senior 
citizens they have no right to go to the hospital and doctor of their 
choice, or that puts unfair financial pressure on senior citizens to 
give up that right.
  The fourth Republican argument is that deep cuts in Medicare are 
necessary to balance the budget. That argument refutes itself. All it 
proves is that Republican priorities are wrong. Democrats favor a 
balanced budget, and under President Clinton, we had been making real 
progress toward that goal. There is a right way to balance the budget, 
and a far-right way. And unfortunately, the Republicans have picked the 
latter.
  It is true that we need to bring health care spending under control. 
But that applies to all health spending, not just Medicare and 
Medicaid. As President Clinton told the White House Conference on Aging 
last week, 40 percent of the projected increase in Federal spending in 
coming years will be caused by escalating health costs.
  But what this Republican budget fails to recognize is that the 
current growth in Medicare spending is a symptom of the underlying 
problems in the entire health care system--not a defect in Medicare.
  In fact, Medicare has done a better job than the private sector in 
restraining costs in recent years. Since 1984, Medicare costs have 
risen at an annual rate that is 24 percent lower than comparable 
private sector health spending. As a result, Medicare now pays only 68 
percent of what the private sector charges for comparable physicians' 
services; for hospital care, the figure is 69 percent.
  Slashing Medicare unilaterally is no way to balance the budget. It 
will simply shift costs from the budget of the Federal Government to 
the budgets of senior citizens, their children, and their 
grandchildren. That is not a real saving.
  Moreover, senior citizens will also face greater discrimination from 
physicians and hospitals less willing to accept them as patients, 
because Medicare reimbursements are already much lower than the 
reimbursements available under private insurance. Previous cuts in 
Medicare have already led to serious cost shifting, as physicians and 
hospitals seek to make up their reduced income from Medicare patients 
by charging higher fees to other patients. The result has been higher 
health costs and health insurance premiums for everyone, as cost 
shifting becomes a significant hidden tax on individuals and 
businesses.
  The right way to slow rising Medicare costs in the context of broader 
health reforms that will slow health cost inflation in the economy as a 
whole. That is the way to bring Federal health costs under control, 
without cutting benefits of shifting costs to working families. In the 
context of broader reform, the needs of academic health centers, rural 
hospitals, and inner city hospitals can also be met. Unilateral 
Medicare cuts alone, by contrast, could reduce the availability and 
quality of care for young and old alike.
  The President has said that he is willing to work for bipartisan 
reform of the overall health care system, but the Republicans have said 
no. The only bipartisanship they seem to be interested in is the kind 
that says, ``Join us in slashing Medicare.'' That is not the 
bipartisanship the American people want or the elderly deserve.
  The cuts in Medicaid proposed in this budget are equally unfair--a 
total of $175 billion over 7 years--a devastating 30-percent reduction 
from the current spending levels. The double whammy of huge Medicare 
cuts and huge Medicaid cuts will hit hospitals and other health care 
providers even harder than Medicare cuts alone. Struggling State 
governments and State and local taxpayers will also face heavy burdens. 
Massachusetts would lose $4.4 billion in Federal matching funds over 
the next 7 years. By the year 2002, we would need to increase State 
spending by 26 percent to maintain current program levels.
  Other States with higher Federal matching rates would be hit even 
harder. New Mexico would lose $1.3 billion, and would have to increase 
program spending by a massive 87 percent. Nationally, State and local 
taxpayers would have to increase program spending by 35 percent by the 
year 2002 to maintain program levels.
  States cannot afford these huge increases. And the impact of these 
arbitrary cuts on real people is even more disturbing. Medicaid is a 
key part of the safety net for senior citizens, the disabled, and 
children. Two-thirds of all Medicaid spending is for senior citizens 
and the disabled. If an elderly American becomes sick enough to need 
long-term nursing home care, Medicaid is the only source of funding 
after personal savings are exhausted. Cuts in Medicaid will mean that 
needed care for senior citizens is denied. Heavy additional burdens 
will be imposed on their children and grandchildren.
  Children also depend on Medicaid. Eighteen million children--more 
than a quarter of all children in our country--receive health care 
under Medicaid. More than half of these children are members of working 
families. Their parents work hard--most of them 8 hours a day, 40 hours 
a week, 52 weeks a year. Without Medicaid's help, all their hard work 
will not buy their children the health care they need.
  We often hear that the reason to balance the budget is for America's 
children. A budget that denies health care to millions of children is 
the wrong way to express concern for their future.
  The recent V-E Day ceremonies reminded us that today's senior 
citizens have stood by America in war and peace. America must stand by 
them now. Senior citizens have worked hard. They've played by the 
rules. They contributed to Medicare. They have earned their Medicare 
benefits, and they deserve to have them. Yet this Republican budget 
proposes to take those benefits away.
  The amendment we are offering will restore a large part of these 
unfair cuts. I urge the Senate to adopt it.
  Mr. DODD. Mr. President, I hope all of my colleagues will take a step 
back from this debate and examine what these cuts in Medicare and long-
term care would mean in real terms for real people. I believe that 
these reductions are simply wrong. They violate our American values of 
fairness.
  These are not just numbers on a page. We are talking about injecting 
fear into the lives of people who deserve to spend their retirement 
years in peace. The cuts seem all the more callous given that they are 
being made to finance tax cuts for the most affluent Americans.
  Let us talk about people, not programs, for a moment. The people we 
are discussing fought the wars, paid the taxes and built the wealth 
that all of us here have enjoyed. We just marked the 50-year 
anniversary of V-E Day. Many of the people who won that war for us are 
now on Medicare. The least they deserve is to live their last years in 
dignity. In their twilight years, they deserve better than this budget 
gives them.
  There is no way these cuts would not hit people of modest means. 
Medicare is not a program for the rich. Today, Medicare serves 35 
million seniors, who have a median income of $17,000. Seventy-eight 
percent earn less than $25,000 a year. The typical senior already 
spends 21 percent of his or her income on out-of-pocket health costs. 
That compares to 8 percent for non-seniors. Should we really be jacking 
up those out-of-pocket costs to pay for a $20,000 tax cut for people 
making over $350,000 a year?

                         Cuts Would Be Painful

  Despite all the rhetoric on the other side of the aisle, these cuts 
would be painful. This is what Robert Reischauer, the highly respected 
former director of the CBO, had to say about the reductions:

       There's no way to do this without imposing real sacrifice 
     and real pain, and both beneficiaries and providers will feel 
     it. The notion that this can be squeezed out of the system 
     with greater efficiencies is wishful thinking.

  Taking a hacksaw to medicare, as this budget proposes, would be 
devastating. Recipients of care would pay $3200 more over the next 
seven years. That is an enormous hardship for seniors living on modest, 
fixed incomes.
  Businesses and workers who have private insurance would be hurt, too. 
Without overall reform, cutting medicare would not necessarily cut the 
actual cost of visiting a doctor or hospital. So doctors and hospitals 
would in all likelihood try to shift costs of $40 to $50 billion from 
medicare patients to privately insured businesses and workers. That is 
nothing but a hidden tax [[Page S7076]] that private businesses and 
their employees neither deserve nor can afford.

                             Long-Term Care

  The cuts in this budget resolution would also decimate the long-term 
care protection that Medicaid provides seniors. Working families with a 
parent who needs long-term care would face nursing home bills of an 
average of $38,000 a year without Medicaid's long-term care protection. 
Where will our seniors who have spent down all their savings and now 
rely on Medicaid to pay for their nursing home care go without such 
protection?

                          Impact On Hospitals

  These cuts would particularly hit rural and innercity hospitals with 
large concentrations of elderly and low-income patients. In my own 
state of Connecticut, home to many urban hospitals, Medicare makes up 
40 percent of all hospital revenue. Half of the hospitals in 
Connecticut are teaching hospitals, which rely heavily on Medicare to 
train tomorrow's physicians.
  Many of these hospitals already operate on the edge: some may have to 
close their doors if such an important source of financing is slashed. 
Nearly 10 million Medicare recipients live in rural America, where 
there is often only one hospital serving a county. Draconian Medicare 
cuts like those proposed by the Republicans could force many of those 
rural hospitals out of business.

                           A Different Course

  We must do something to control Medicare spending, but we cannot do 
it in isolation. The problems of Medicare are the same problems facing 
the entire health care system. To focus only on Medicare puts its 
recipients at risk and would have unintended consequences for the rest 
of the health care system.
  We need honest, thorough health care reform, and I invite our 
Republican colleagues to begin a dialogue with us on this important 
subject. But I also ask them to step back from the draconian cuts in 
Medicare and long-term care. I hope my colleagues will support the 
pending amendment.
  Mr. BRADLEY. Mr. President, I come to the floor today to express my 
very serious concerns about the cuts to Medicare and Medicaid which are 
contained in the budget resolution.
  Mr. President, my colleagues across the aisle have stated repeatedly 
that they are not touching Social Security. But at the same time over a 
third of the cuts which they have proposed, including over 40 percent 
of the cuts in the year 2002, come from Medicare and Medicaid. Mr. 
President, I would like to spend a few minutes discussing what the 
proposed Medicare and Medicaid cuts will mean to our most vulnerable 
citizens. As I discuss these impacts, I would like my colleagues to ask 
themselves how they can credibly claim that this budget does not reduce 
these people's security.
  Let me start with Medicare. This budget cuts spending for the 
Medicare program by $256 billion over 7 years. I would like to spend a 
minute discussing what these numbers mean in human terms. They mean 
that seniors will have to find an average of $3,447 more to pay for 
their health care over the next 7 years. In my home State of New 
Jersey, seniors will have to come up with an additional $932 in the 
year 2002 alone just to pay for the additional Medicare costs which 
this budget imposes on them. For many seniors across the country, these 
new costs will be extremely difficult to bear. In 1992, the median 
income of seniors in this country was only about $17,000 a year, and 
about a quarter of elderly households had incomes under $10,000. Of 
these incomes, seniors already spend more than one of every five 
dollars on medical costs. For the millions of seniors across the 
country who live on fixed incomes, finding an additional $3,447 over 7 
years will mean having to give up something else which is important to 
them. It is estimated that there are already nearly 8 million seniors 
nationwide who are forced to choose each month between paying for their 
medications and paying for food. I can't help wondering how many 
millions more seniors will be faced with this horrible choice once the 
proposed cuts go into place.
  An increased financial burden on seniors is only one of the negative 
consequences which will result from the proposed Medicare cuts. Along 
with having to pay more, seniors will likely find that their ability to 
choose their own doctor is restricted--perhaps not explicitly, but 
because financial limitations leave them with no choice but to join a 
managed care plan. Also, doctors, hospitals, and others providers are 
all likely to face reduced payments. They already receive far lower 
payments from Medicare than from private insurers, and if
 Medicare rates are reduced much further some may find that they can no 
longer afford to take Medicare patients. Those who do keep accepting 
Medicare will be forced to shift even more costs onto their privately 
insured patients, creating a hidden tax on employers and individuals.

  And that's just Medicare. In addition, this budget cuts Medicaid by 
$175 billion. That's an 18 percent cut, relative to what spending would 
be if there were no change in law. I think it is very important that we 
all understand exactly who these cuts will affect. Medicaid now insures 
about one of every four American children. It pays for roughly one of 
every three births in this country. And it pays for over three-fifths 
of the people who need long-term care services, either in nursing homes 
or at home. Over half of Medicaid funds go for persons who are either 
elderly, blind, or disabled. Most elderly recipients of Medicaid are 
people who spent their whole lives as members of the middleclass. But 
when faced with nursing home costs averaging almost $40,000 a year, it 
doesn't take long for their entire life savings to disappear. Once they 
reach this point, these people have nowhere else to turn. Thank 
goodness Medicaid has been there to provide a safety net for them.
  This resolution caps Federal Medicaid spending at an average annual 
growth rate of 5 percent. We all know that Medicaid spending is 
expected to grow much faster than that in the future. By setting a 5 
percent cap, the Federal Government is essentially saying to the 
States: ``It's all your problem now. We can't figure out how to deal 
with the growing number of uninsured and the rising costs of health 
care, so you do it. We wash our hands of any responsibility to help you 
deal with these critical needs.'' But, if we are honest with ourselves, 
we must admit that States can't cope with these problems alone.
  So, Mr. President, let me tell you what is expected to happen once 
these proposed Medicaid cuts go into effect. By the year 2002, the 
number of uninsured children in American is predicted to rise by more 
than 6 million. By that same year, there will be an additional 3 
million persons who need--but can not get assistance with--the costs of 
long-term care. These will be people who will be required to leave 
nursing homes, or will never be able to enter one, despite the fact 
that they need more care than their family and friends are able to 
provide, either financially or physically. As I stated earlier, many of 
these people are now members of the middle-class, but the astronomical 
costs of long-term care will impoverish them rapidly. For those persons 
who are able to enter and remain in nursing homes the picture is not 
much brighter. Medicaid now pays significantly less than the private 
sector for long-term care. When Medicaid cuts these payments even 
further--as it will have to do in response to the budget cuts--nursing 
homes will have to do even more with less. This means that staff will 
be stretched even thinner, and each resident will receive even less 
personal attention. The proposed cuts will mean that the quality of 
life of nursing home residents will deteriorate even further.
  Mr. President, I hope that my remarks have helped put a human face on 
all the numbers which have been floating around the floor of this 
chamber the last few days. I recognize that reducing the deficit will 
require painful choices. But in making these choices, we can not ignore 
how these decisions, will impact the persons whom we have been elected 
to represent. My colleagues across the aisle claim that they are 
concerned about the impact of deficit reduction on our oldest and most 
vulnerable citizens. They have stated repeatedly that Social Security 
is ``off the table'' -- that it has not been cut. To them I respond: 
Medicare and Medicaid are vital parts of our social security system. 
They provide security at a time when people are most vulnerable--when 
they are sick. To [[Page S7077]] take over a third of your proposed 
cuts out of Medicare and Medicaid is to deny security when it is most 
needed.
  Mr. SARBANES. Mr. President, I rise to express my strong support for 
the amendment offered by my colleagues, Senators Rockefeller and 
Lautenberg, to restore critical funding to the Medicare Program.
  In order to provide a significant tax cut to the very wealthy, Senate 
Republicans have proposed a budget resolution which includes draconian 
cuts in many important programs, including a substantial cut in 
Medicare. In my view, drastic cuts on the spending side, in order to 
create room for a tax cut, are not appropriate and do not reflect the 
priorities of this Senator. I oppose the Senate Republican budget 
proposal and feel very strongly that the resolution before us directly 
threatens the health and well-being of our Nation's seniors citizens.
  Over half the people who receive Medicare are older Americans with 
incomes below $15,000 a year. The Republican budget with its deep 
Medicare cuts lay the basis for tax cuts for the very wealthy. This is 
the situation before us.
  The proposed Senate Republican budget resolution would cut Medicare 
by $256 billion over the next 7 years. I know it is asserted that the 
actual dollar amounts for Medicare will not drop, but rather will 
increase gradually over the next 7 years. However, if the proposed 
dollar increases are not proportional to increases in Medicare 
enrollees and increases in the costs of medical care, the end result is 
massive cost shifting and cuts in services for beneficiaries.
  Mr. President, in my view, it is essential that we recognize that 
Medicare is not a system unto itself. The Medicare Program is, instead, 
a large component of our Nation's health care system and it is 
illogical to assume that isolated cuts in Medicare will not adversely 
effect all Americans.
  First and foremost, these ill-conceived cuts would harm our senior 
citizens. The Health Care Finance Administration [HCFA] estimates that 
Medicare payments account for 45 percent of health care spending by our 
Nation's elderly. Under the GOP budget plan, out-of-pocket costs to 
seniors are expected to increase by an average of $900 per person per 
year by the year 2002. Over a 7-year period, the typical beneficiary 
would pay an estimated $3,200 in additional out-of-pocket costs. While 
this might not sound like much to some, these numbers become more 
significant when you factor in statistics which indicate that 60 
percent of program spending was incurred on behalf of those with 
incomes less than twice the poverty level, and 83 percent of program 
spending was on behalf of those with annual incomes of less than 
$25,000.
  Clearly, when we talk about Medicare recipients, we are not talking 
about our Nation's wealthiest citizens. Many seniors live on fixed 
incomes. In fact, a large number of Medicare recipients depend on 
Social Security benefits for much of their income. According to HCFA, 
about 60 percent of the elderly rely on Social Security benefits for 50 
percent or more of their income and 32 percent of the elderly rely on 
Social Security for 80 percent or more of their income. It is also 
estimated that as many as 2 million seniors can expect to see the value 
of their Social Security COLA's decline as increased Medicare costs 
consume 40 to 50 percent of Social Security COLA's by 2002. Requiring 
these individuals to pay more for their health care will directly 
undercut their standard of living. In my view, it is simply 
unacceptable to create a situation where more and more seniors will see 
their resources stretched to the degree that they will have to choose 
between food and health care.
  As a result of the proposed cuts in the Republican budget resolution, 
seniors may also end up paying more for the services they currently 
receive. The number of Medicare recipients is expected to increase over 
the next several decades just as the baby boomer generation reaches 
retirement age. The Republican budget proposal fails to account for 
this projected growth. Therefore, in order to make ends meet, hospitals 
and other health care centers will have to shift costs to other payers 
or cut valuable services which are supported, in part, by Medicare 
reimbursements. According to the American Hospital Association, costly 
but crucial services like trauma care units, burn units and intensive 
care units would have to be closed in many hospitals. Teaching 
hospitals, which receive a higher rate of reimbursement for Medicare 
patients than nonteaching hospitals, will suffer losses in revenue 
certain to impact the fiscal integrity of these institutions. 
Reductions in funding to such institutions will result in less support 
for services, research, and education. Such consequences impact us all 
and illustrate clearly the danger of arbitrarily cutting this critical 
program.
  In addition, businesses and working Americans could see increased 
health care costs and higher premiums as health care providers and 
institutions shift a larger portion of costs to the nonelderly in an 
attempt to cover rising medical costs and provide quality services with 
limited resources. Communities could also see increases in State and 
local taxes in order to assist financially strapped hospitals and 
health care providers.
  Mr. President, the Medicare Program does not operate in a vacuum. 
Cuts of the magnitude being proposed by the Republicans will impact us 
all. I am not suggesting that the Medicare system does not need to be 
reformed. What I am suggesting is that there is a right way and a wrong 
way to make changes in the system and how we go about doing so provides 
a clear picture of what kind of society we are going to be.
  In his 1941 message to Congress, Franklin Roosevelt articulated a 
second bill of rights which established a basic standard of security 
and prosperity for all Americans. Among these rights is ``the right to 
adequate medical care and the opportunity to achieve and enjoy good 
health.'' The proposed Republican budget resolution seriously threatens 
this basic standard and I urge my colleagues to join me in support of 
the Rockefeller-Lautenberg amendment.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  Are the yeas and nays requested?
  Mr. DOMENICI. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
1112. The yeas and nays have been ordered. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. LOTT. I announce that the Senator from North Carolina [Mr. 
Faircloth] and the Senator from Texas [Mr. Gramm] are necessarily 
absent.
  I also announce that the Senator from North Carolina [Mr. Faircloth] 
would vote ``nay.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
who desire to vote?
  The result was announced--yeas 46, nays 52, as follows:

                      [Rollcall Vote No. 173 Leg.]

                                YEAS--46

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Byrd
     Conrad
     Daschle
     Dodd
     Dorgan
     Exon
     Feingold
     Feinstein
     Ford
     Glenn
     Graham
     Harkin
     Heflin
     Hollings
     Inouye
     Jeffords
     Johnston
     Kennedy
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Moseley-Braun
     Moynihan
     Murray
     Nunn
     Pell
     Pryor
     Reid
     Robb
     Rockefeller
     Sarbanes
     Simon
     Wellstone

                                NAYS--52

     Abraham
     Ashcroft
     Bennett
     Bond
     Brown
     Burns
     Campbell
     Chafee
     Coats
     Cochran
     Cohen
     Coverdell
     Craig
     D'Amato
     DeWine
     Dole
     Domenici
     Frist
     Gorton
     Grams
     Grassley
     Gregg
     Hatch
     Hatfield
     Helms
     Hutchison
     Inhofe
     Kassebaum
     Kempthorne
     Kerrey
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Packwood
     Pressler
     Roth
     Santorum
     Shelby
     Simpson
     Smith
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                             NOT VOTING--2

     Faircloth
     Gramm
       
  So the amendment (No. 1112) was rejected.

[[Page S7078]]

  Mr. DOLE. Mr. President, I move to reconsider the vote by which the 
amendment was rejected.
  Mr. DOMENICI. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

                          ____________________
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