November 21,2009

Grassley Statement on Voting Against Motion to Proceed to Democratic Leader’s Health Care Reform Bill

Senator Chuck Grassley issued the following comment about his opposition to the motionto proceed to H.R. 3590, the legislative vehicle for the Patient Protection and Affordable CareAct of 2009. The text of Senator Grassley’s floor speech is below the comment.“This proposal is another big government spending plan, and after the bailouts for WallStreet and Detroit, a stimulus bill that left us with the highest unemployment in 26 years, and theFed shoveling money out the door without any accountability, people across the country havehad enough.

“Senator Reid’s claim that the cost is $848 billion is the ultimate Washington gimmick, attaxpayers’ expense. To pull off the ruse, the health care changes in Senator Reid’s bill aredelayed until 2014, even while his bill starts collecting new taxes, penalties and feesimmediately. So it’s 10 years of revenue for six years of expenditure. When that accountinggame is over, this bill’s full 10-year implementation cost is $2.5 trillion. This bill will pile ondeficit spending and increase America’s debt far beyond the $1.4 trillion the debt already hasincreased since President Obama took office. This debt will diminish opportunities for the nextgeneration of Americans, our children and grandchildren.

“We ought to be doing everything possible right now to create jobs, and taxes should bedecreased in a recession, not increased. Instead, Senator Reid’s bill raises taxes, penalties andfees immediately, choking off economic recovery. The changes hit small business especiallyhard, and small businesses create 70 percent of new jobs. That’s why the National Federation ofIndependent Business said this bill fails small businesses.

“It’s irresponsible for Democratic leaders to use their filibuster-proof majority in theSenate and their control of the House and the White House to push through such massivelegislation to reshape one-sixth of America’s economy. The unintended consequences in thislegislation could have a destabilizing effect at just the wrong time, as America’s economystruggles to recover and working families are doing everything in their power to hold on.“This bill isn’t what people expected from health care reform. They wanted Congress tolower health care costs that are growing at three times the rate of inflation, but this bill makeshealth insurance premiums go up, not down, and that’s according to the nonpartisanCongressional Budget Office. This bill also hurts seniors with Medicare cuts so extreme thatMedicare’s nonpartisan chief actuary concluded they will jeopardize access to care. And, the billuses those Medicare funds to start yet another unsustainable entitlement program. With the badfiscal shape that Medicare is in, it doesn’t make any sense to make new commitments to newentitlement spending, which this bill does.

“Congress should take steps to improve the health care system. That includes commonsense medical malpractice reform to stop wasting so much money on defensive medicine, endingdiscriminatory practices by health insurance companies, and empowering consumers to have areal choice of plans so that we can lower costs with competition, just like with other services webuy. Congress should make market reforms that help small businesses and the self employedaccess health insurance. These issues can be addressed without upending the entire health caresystem with a bill that really costs $2.5 trillion and means higher taxes, higher insurancepremiums and an unsustainable tax burden for generations to come.”

Floor Statement of U.S. Senator Chuck Grassley
Ranking Member of the Committee on Finance
Saturday, November 21, 2009

On November 10, former President Clinton visited the Democratic Caucus. It has beenwidely reported that his message to the Senate Democrats was that, on health care reform, theworst thing to do is nothing. With all due respect to the former President, that is simply wrong.The worst thing we can do is pass this bill. This is not something I say lightly. There areserious problems with our health care system. There are important steps we need to take to fixthe problems in our system. But the excesses of this bill appear willfully ignorant of what’sgoing on outside health care. Those excesses make this bill far worse than doing nothing.

We are a nation facing very challenging economic times. We have seen the auto industrygo into bankruptcy. We have seen banks shutter their doors. The federal debt has increased by$1.4 trillion since inauguration. This chart shows the growing amount of debt that the federalgovernment is taking on. Just the amount of increased debt added just since the inauguration is$11,535 per household. It now exceeds $12 trillion for the first time in history. Within fiveyears, the Obama administration's policies will more than double the amount of debt held by thepublic, and by 2019, it will more than triple the debt according to the Congressional BudgetOffice (CBO) and the White House Office of Management and Budget. Already, foreignholdings of U.S. Treasuries stand at nearly three and a-half trillion dollars or 46 percent of thefederal debt held by the public. This bill bends the federal spending curve further upward by$160 billion over the next decade.

Americans have rightly lost faith when in the face of the current economic crisis,Congress thinks this two and a-half trillion dollar restructuring of the health care system is agood idea. Perhaps one of the biggest warning signs that this bill will saddle taxpayers withmore spending and debt is that fact that the budget fail-safe mechanism was dropped from thebill. Behind those closed doors where this bill was written, the Grassley budget fail-safemechanism was cut from the bill and lots of budget gimmicks were added. Former CBO directorDouglas Holtz-Eakin wrote in yesterday's Wall Street Journal that the bill is, “fiscally dishonest,”and that it uses, “every budget gimmick and trick in the book . . . [it] leave[s] out inconvenientspending, back-load[s] spending to disguise the true scale, front-load tax revenues, let inflationpush up tax revenues, promise spending cuts to doctors and hospitals that have no record ofmaterializing, and so on.” This bill is simply irresponsible. It’s worse than doing nothing.

Let’s talk about some of the excesses of the bill before us today. It increases the ofthe government by a staggering $2.5 trillion when fully implemented. It imposes half a trilliondollars in new fees and taxes. Imposing these new taxes and fees as the economy is struggling torecover is worse than doing nothing. This half a trillion dollars in new taxes will hurt smallbusiness and destroy job creation. It breaks President Obama’s campaign promise by increasingtaxes on individuals and families making less than $250,000 per year. Adding insult to injury,these fees and taxes will also cause health care premiums to go up beginning next year. Butdon’t take my word for it. Both the nonpartisan Joint Committee on Taxation and the CBO haveconfirmed that these taxes and fee will be passed through to consumers in the form of higherhealth insurance premiums. And these taxes and fees will start increasing premiums four yearsbefore most of the reforms take effect in 2014.

Let's take a look at what happens to Medicare and Medicaid in this bill. Both of thesehealth care entitlement programs are already on perilous financial footing. Both are facingfinancial meltdown. This bill adds to that burden. The Medicare trust fund started going brokelast year. In 2008, the Medicare program began spending more out of the trust fund than it istaking in. The Medicare Trustees have been warning all of us for years that the trust fund isgoing broke. They now predict that it will go broke in right around the corner in 2017. Butrather than work to bridge Medicare's $37 trillion in unfunded liabilities, this bill cuts half atrillion dollars from the Medicare program to fund yet another unsustainable health careentitlement program. And Medicare has a major problem with physician payments that will costmore than $250 billion to fix. But this bill ignores that problem. By pretending it doesn't exist,this bill would leave future Congresses virtually no way to restructure Medicare to fix it. Bydiverting Medicare resources elsewhere and ignoring major problems like that one, this bill doesworse than nothing.

And then there’s Medicaid. The Medicaid program serves 59 million low-incomepregnant women, children and families and people with disabilities. It is our health care safetynet, and it too is on very shaky financial ground. The Government Accountability Office (GAO)has reported to Congress that states are reaching a financial and budgetary crisis with Medicaid.Like Medicare, Medicaid is essentially going broke. The GAO models predict that statespending on Medicaid will grow faster than state revenues for at least the next ten years. Here iswhat GAO has said about the situation: “Since most state and local governments are required tobalance their operating budgets, the declining fiscal conditions shown in our simulations suggestthat, without intervention, these governments would need to make substantial policy changes toavoid growing fiscal imbalances.” Besides this impending financial meltdown, Medicaidrecipients many times can’t find a doctor that will treat them because reimbursement for care isso inadequate. And Medicaid recipients already have worse health care outcomes. States arestruggling to make their budgets balance and that will continue for many years. But this billdoesn't fix this problem either. Here again, this bill makes the problem worse. This bill addsanother $374 billion in spending to the Medicaid program. It adds 15 million people to the rollsof the worst delivery system in health care. It increases state spending by $25 billion. And that'sa hidden tax increase in this bill because states will be forced to raise taxes to pay for thisincreased cost. By dropping the equivalent of a 10,000-pound weight on our frayed Medicaidsafety net, this bill does worse than nothing.

This bill also compounds these long-term entitlement spending problems by creating yetanother new entitlement program called the CLASS Act. This one is a voluntary federalprogram for long-term care insurance. Now I have devoted years of effort to improving longtermcare supports and services for the elderly and the disabled. I understand the issues thatsupporters of the CLASS Act want to address. But the CLASS Act is just simply not viable in itscurrent form. It is almost certain to attract the people who are most likely to need it. This isknown as adverse selection. That will cause premiums to increase and healthier people to dropout of the program. It is the classic “insurance death spiral.” On November 13, theAdministration's own Chief Actuary confirmed this. The Chief Actuary issued a dire warning ina report on the CLASS Act in the House bill which is virtually identical to the Senate version.The Chief Actuary said, “There is a significant risk the problem of adverse selection would makethe CLASS program unsustainable.” For the first ten years, the CLASS Act saves money at thebeginning because it collects premiums before benefits start getting paid out. But sometimeafterwards, it starts to lose money. We all know what happens from there. It will become thetaxpayers' responsibility to rescue the program as it fails. Look at financial struggles of SocialSecurity. Look at Medicare. Look at Medicaid. Now go home and look at your children andgrandchildren. Creating the unsustainable CLASS Act is not responsible. By adding the tickingtime-bomb of yet another unfunded liability to our children and grandchildren through theCLASS Act, this bill again does worse than nothing.

Health care is one-sixth of the economy. The American people don't want a bill thatmakes it worse. The nonpartisan Congressional Budget Office, the Joint Committee onTaxation, and even the Office of the Actuary at the U.S. Department of Health and HumanServices have told us what the American people already knew: these massive partisan healthcare reform bills are going to make the problem worse when it comes to the cost of healthinsurance. According to a September 22nd letter from the Congressional Budget Office toChairman Baucus about the Finance Committee bill, “Premiums in the new insurance exchangeswould tend to be higher than the average premiums in the current-law individual market.” So,after these bills spend a trillion dollars, many of the people struggling to afford their premiumstoday will actually end up paying more if this bill moves forward and is enacted. By increasingcosts when people desperately need Congress to lower costs, this bill does worse than nothing. Itdoesn’t have to be this way.

When the debate began last year, interested legislators of both parties set forthbenchmarks that were no-brainers: Health care reform should lower the cost of premiums. Itshould make health care more affordable for people. It should so without Medicare cuts thatjeopardize access to care for seniors and the disabled. It should do so without overloading theMedicaid safety net until it rips apart. It should do so without adding to our alreadyunsustainableunfunded liabilities by creating yet another unsustainable entitlement program.

Instead, this bill threatens the economic recovery. Its half a trillion in new taxes will hurt smallbusiness and destroy job creation. It calls for an even bigger and more unsustainable federalbudget. It adds to that burden with a massive new government-run health plan. It makes healthcare more unaffordable and lower quality.

I know some people believe we should get on the bill and try to fix it by amendment. Butthis 2,000 page bill has many more problems than can be fixed by amendment on the Senatefloor. If you really want to improve it, it should be stopped right now. Democratic leaders andthe White House have put together one extreme health care plan after another. After the bailoutsfor Wall Street and Detroit, a stimulus bill that’s led to the highest unemployment in 26 years,and the Fed shoveling money out the door without any accountability, their health care reformagenda is the straw that broke the camel’s back this year. What Senate Republicans are sayingwith tonight’s vote is that we don’t support reform just for the sake of reform. Changes to thehealth care system must be responsible and not break the back of the taxpayers and the jobcreatingengine in America, which is small business. It doesn’t make any sense to make majornew unsustainable commitments to entitlement spending. Already, Medicare’s solvency is injeopardy, and the Reid bill would make things worse for Medicare beneficiaries. Seniors are in atough situation already, with the way the economy has hit their retirement savings and security.We have to step back and remember that it's not our money, it's their money. It's the taxpayers’money we are talking about here. Two and a-half trillion dollars of the taxpayers’ dollars over adecade when this bill is fully implemented. Generations of hard working Americans will beforced to pay the costly price for this bill if it moves forward. It’s irresponsible for Democraticleaders to use their filibuster-proof majority in the Senate and their control of the House and theWhite House to push through such massive legislation to reshape one-sixth of America’seconomy. The unintended consequences in this legislation could have a destabilizing effect atjust the wrong time, as America’s economy struggles to recover and working families are doingeverything in their power to hold on. The late Senator Moynihan often warned about the perilsof a majority party pushing through major bills and changes in a partisan way. It’s a wellfoundedwarning that the Democratic Leadership has not heeded. If a bill like this one can’t getsupport more broadly, then something’s wrong with it. Moreover, grassroots America hasspoken out against this legislation. It’s alarming how those voices have been disregarded by theleaders in Congress.

President Andrew Jackson made it clear that our duty is to tune in to the common senseof the people who sent us here. Here’s what he said, “Our government is founded upon theintelligence of the people. I for one do not despair of the republic. I have great confidence in thevirtue of the great majority of the people, and I cannot fear the result.” Friends and colleagues,listen to what President Jackson said. Listen to the concerns of the people. They are telling us tore-consider this massive complicated legislation and take a path that leads to less spending, lesstaxes, and less debt. Instead of continuing to mortgage the future of our children andgrandchildren, we need to get back to the basics. Congress should pass common sense medicalmalpractice reform to stop wasting so much money on defensive medicine. Congress shouldempower consumers to shop around for health care and lower costs with competition, just likewith other services we buy. Congress should make market reforms that help small businessesand the self employed access health insurance. These issues can be addressed without upendingthe entire health care system with the result of higher taxes, higher insurance premiums anddeficits and debts that will get in the way of the opportunities that result from the ingenuity andindustry of the American people. I encourage my colleagues to listen to the American peopleand vote to send this bill back to the drawing board.