U.S. Sen. John Cornyn, a member of the Senate Finance Committee, spoke today on the Senate floor about the health care proposals currently being considered in Congress, and the need for health care reform that empowers individuals, not the government, to make their own health care decisions. Below are his remarks, as delivered on the Senate floor. Sen. Cornyn also spoke about health care reform in an interview with Fox News today. Click here to watch the interview.
As you know, two committees in the Senate are primarily given the responsibility for writing a health care reform bill. ... These two committees, as well as the President of the United States, are considering numerous proposals that deserve the careful attention of the American people and of Congress. Because this legislation, however it turns out, could fundamentally affect the relationship between patients and their doctors, as well as the relationship between the individual and our government.
Two things are becoming increasingly clear so far, and that is it seems like there's less concern in Washington about lowering health care costs than shifting those costs to the taxpayers. And the costs of a Washington takeover of health care just keep going up and up and up and up. You'd think these huge price tags would convince some folks here in Washington that we ought to call a timeout, back up, let's come back with a different idea. You'd think that it would cause Senators and Congressmen and other leaders here in Washington -- Presidents -- to come up with a new approach, to be open to different alternatives that would actually lower costs, not only for the taxpayers but for small businesses and individual consumers. Instead, we see the proposals that are coming out of the White House and the halls of Congress are for more spending and more debt.
Mr. President, health care reform is very much in the news and very much on the agenda of the United States Senate, as the American people know. So far they have learned very little about how Congress plans to address what is broken in our health care system.
As you know, two committees in the Senate are primarily given the responsibility for writing a health care reform bill. Of course, the HELP Committee, the Health, Education, Labor and Pensions Committee, chaired by Senator Kennedy, the Senator from Massachusetts, and the Finance Committee, chaired by Senator Baucus. The Ranking Member, of course, is Senator Chuck Grassley from Iowa.
These two committees, as well as the President of the United States, are considering numerous proposals that deserve the careful attention of the American people and of Congress. Because this legislation, however it turns out, could fundamentally affect the relationship between patients and their doctors, as well as the relationship between the individual and our government.
In the Kennedy bill, which has been proposed and which is pending now before the Health, Education, Labor and Pensions Committee, there are several troublesome provisions. One, a government-run plan, which would compete, allegedly, with the private sector, but as we all know, the government is the 800-pound gorilla and there is no true competition when government is involved. And, in fact, one projection is that as many as almost 120 million people would ultimately find themselves in a single-payer, government-run system because essentially the federal government would undercut those private health plans to the point where individuals would find them themselves with no choice other than to have government direct their health care.
Another troublesome provision is the so-called "pay or play mandate." It goes without saying, almost, but I will say it anyway - that small businesses create the vast majority of jobs in America. Yet this proposal, I think, mistakenly would impose a punitive tax on small businesses that are unable to keep their doors open and provide health insurance for their employees. We want to allow small businesses to provide health care to their employees by bringing down the cost and we have a number of mechanisms to do that. But the idea that we're going to impose a punitive tax on small businesses that do not provide a health care plan for employees will destroy jobs so people will not only be without insurance, they'll be without jobs, period. A bad idea.
Third, the Kennedy bill would provide new federal subsidies to individuals making as much as $110,000 a year. Astonishing. At a time when we're looking at spending and borrowing as far as the eye can see and deficits up to $2 trillion, unfunded liabilities in the tens of trillions of dollars, there's actually a proposal before the HELP Committee that would increase the size of federal entitlement programs and increase the tenuous position of this Medicaid program, which would then fund health insurance for people making up to $110,000 a year.
Fourth, the Kennedy bill would impose a Medical Advisory Council. I always get a kick, Mr. President, out of the innocuous names given to some pretty sinister stuff up here. I would say that it's sort of like calling the former Soviet Union's Politburo an advisory council. In fact, this Medical Advisory Council would dictate decisions over personal health decisions to unelected and unaccountable bureaucrats. I don't know anybody who thinks that's a good idea. Certainly nobody I've talked to.
And this Kennedy proposal, with all due respect to our friend and colleague from Massachusetts, is chockfull of bad care policies. But the worst part is they will not lower health care costs for people who have health insurance now, and in fact they will make our debt burden and the debt burden of our children and grandchildren much, much worse.
Well, Mr. President, the price tag on government programs just keeps growing and growing and growing here in Washington, D.C. In fact, the President's proposal for his budget this year projected a "down payment on health care reform." Well, I've told people that, you know, where I come from, we don't make down payments on something unless we know exactly what it is we're buying - and so far the American people don't know what they're being asked to buy.
And indeed, the other part that just staggers my imagination is that we already spend almost twice as much as the next-closest industrialized nation on health care per capita. We spend roughly 17 percent of our economy, our Gross Domestic Product, on health care. Why does anybody think it is a good idea to spend even more? Now, if we were getting good value for that spending, that would be one thing. But we know this current level of spending is full of fraud and waste and other problems, and why in the world would we just want to make matters worse by spending more money on top of a flawed health care delivery system?
Talking about money -- and I know it's hard to imagine how much we're talking about. It used to be $1 million was a lot of money. Then $1 billion seemed like a lot of money -- and it is. And now we're sort of becoming increasingly sort of immune to these big numbers by people talking about trillions of dollars and more. For example, earlier this month, the proposal that Senator Kennedy has made that's pending now in front of the Health, Education, Labor and Pensions Committee, the Congressional Budget Office that's responsible for giving us good numbers in an impartial, nonpartisan way that we can rely upon in order to make policy decisions, said the Kennedy bill would cost more than $1 trillion over the next 10 years. And the problem is, that was only for part of the bill. In other words, that was not the complete cost of even the bill proposed by our friend and colleague from Massachusetts, Senator Kennedy.
To make matters worse, the Congressional Budget Office said the bill would only cover one-third of the uninsured. And ironically it would ultimately chase millions of people off of the insurance coverage they have right now. So it strikes me as a very bad answer to a very real problem. Last week we also learned that the Congressional Budget Office estimates the cost for the second Senate committee that's dealing with health care -- and that is the Finance Committee on which I'm privileged to serve -- but the Congressional Budget Office -- here again the number crunchers ,the folks with the green eye shade who try to give us -- you know, call them as they see them so we can take that into account in determining policy decisions. They said that the proposal coming out of the Finance Committee would cost $1.6 trillion more over 10 years. So on top of 17 percent of our Gross Domestic Product, we're talking about proposals that would spend $1 trillion to $1.6 trillion of additional money on top of a broken system.
Well, two things are becoming increasingly clear so far, and that is it seems like there's less concern in Washington about lowering health care costs than shifting those costs to the taxpayers. And the costs of a Washington takeover of health care just keep going up and up and up and up. You'd think these huge price tags would convince some folks here in Washington that we ought to call a timeout, back up, let's come back with a different idea. You'd think that it would cause Senators and Congressmen and other leaders here in Washington -- Presidents -- to come up with a new approach, to be open to different alternatives that would actually lower costs, not only for the taxpayers but for small businesses and individual consumers.
Instead, we see the proposals that are coming out of the White House and the halls of Congress are for more spending and more debt. Of course, one thing happens around Washington when people don't like the news being delivered by nonpartisan agencies like the Congressional Budget Office, they try to shoot the messenger.
Last week Speaker Pelosi accused the Congressional Budget Office of providing misleading analyses of health care reform bills. I don't believe that's the case. I believe the professionals at the Congressional Budget Office are doing a very difficult but unpopular work and that is speaking truth to power here in Washington and making the folks who would pass these enormous unfunded bills that impose this huge debt on generations hereafter. I think they're doing an important service by telling us the facts.
Last week I commended the Director of the CBO, Dr. Elmendorf, for saying that CBO will "never adjust our views to make people happy." God bless Dr. Elmendorf for his integrity and commitment to tell the truth. We need how to deal with the truth and not try to remake it or cover it up.
Well, the second part of these proposals that causes me grave concern, Mr. President, is this notion that some have tried to propose that we actually need to spend more money in order to be able to save money in the end. Spend money to save money. Now, I know the distinguished occupant of the chair had a very successful business career, and maybe that's true in the private sector. Sometimes you have to invest money in order to make money or save money later. But I can't think of a single federal government program where that worked. You have to spend more money in order to save money. It just does not happen around here.
So let me cite somebody who is more authoritative than I am, Professor Katherine Baker of Harvard School of Public Health. She said that universal insurance actually will increase, not reduce overall health care spending. She predicted months ago what the Congressional Budget Office has recently concluded. The Congressional Budget Office said, by themselves, insurance expansions would also cause national spending on health care to increase, in part because insured people generally receive somewhat more medical care than uninsured people. The Washington Post recognizes this as well. In an editorial this morning, it said, "It is quite likely that any legislation that emerges will create a hugely expansive health care entitlement, with no guarantee of the upward spiral costs being slowed." The Post also said, "Given the national debt already growing out of control and the risks that health care costs won't be controlled, you may worry about taking on a new burden, $1.6 trillion over ten years."
I think that's exactly right. That's what makes people anxious about what they hear coming out of Washington under the name of health care reform. So, I think it's fair to say that the spend-more-to-save-more thinking is what resulted in the wasteful and counterproductive Stimulus Bill that was passed earlier this year. A bill that we got on our desks, the conference report at 11:00 on a Thursday night and we were required to vote on it less than 24 hours later when virtually no one had a chance to even read it. Now, I was comfortable with that vote because I voted against it for many reasons. But one of which, I didn't know exactly what was in there.
And so we know that the Stimulus Bill was a very partisan bill passed over the nearly unanimous opposition of Congressional Republicans. But we were told sort of along the lines of spend more to save more, that spending was good for its own sake and that borrowing and spending was the quickest route to economic recovery. We were told we had to rush through this binge of spending borrowed money, or else unemployment would rise to over 8 percent.
Well, the results are in, and they're not very good. The national unemployment rate is now 9.4 percent, not 8 percent, and in many states it's well into double digits. A lot of stimulus money has just been simply wasted and the bulk of it is stuck here in Washington. And I think what we ought to do is to take it and to return it to deficit reduction so we can hopefully lower the burden that we've imposed on our children and grandchildren under a ruse -- under the pretense that we were actually going to use that money to get the economy back on track. It just hasn't happened and while we're seeing some so-called green shoots of the economy begin to spring up with improved results on Wall Street, we know that unemployment is very high. We're not out of the woods yet.
We're looking at the prospect of runaway inflation unless the Fed does a very tricky balancing act as it contracts its balance sheet and unwinds a lot of lending that it has done in the past - because one result as the economy improves will be that inflation will be a great risk and, of course, the Fed has got the tough balancing act to play because if they crank up interest rates too soon it may well kill the recovery and we'll be back in the position that we find ourselves in now.
So Mr. President, the bottom line is we can't spend more to save more. It didn't work in the Stimulus Bill, and it's not going to work when it comes to health care. Mr. President, proponents of a so-called public plan or government plan - what I call a government takeover or Washington takeover of health care - argues that it works just as well as Medicare at keeping costs as low.
As a matter of fact, that's the model they started out with. They said, Medicare for all until they realized that wasn't a very good example because of the fiscal unsustainability of Medicare spending that we see now with tens of trillions of dollars in unfunded liabilities. But also the fact that a lot of Medicare beneficiaries, while they have the promise of coverage of Medicare, they can't find a doctor to see them because Medicare rates are so low that many physicians, for example, where I live in Travis County Texas, in Austin, Texas, only 17 percent of physicians will see a new Medicare patient because reimbursement rates are so low.
So Medicare is hardly the model. We need to fix Medicare, yes, but we don't need to take the current broken system and blow it up and make it the system for 300 million people and consider that we've done our job. I mention that the $38 trillion in unfunded liabilities. It's estimated that Medicare will go insolvent in the year 2017 unless we do something about it. In fact, many beneficiaries of Medicare know that it's inadequate alone, so they buy supplemental policies. Medicare forces many providers, as I mentioned, to limit the number of patients they accept because reimbursement rates are so low.
And then here's another part of why Medicare is a bad model. The Washington Post estimates that $60 billion of taxpayer money is stolen or wasted or lost to fraud in Medicare each year. Surely we need to fix that problem. Senator Martinez, the Senator from Florida, and I have introduced legislation we believe will cut that figure down dramatically and make sure more of that money goes to treat Medicare beneficiaries, rather than being stolen or defrauded by some unscrupulous health care providers. Medicaid only works as well as it does because cost-shifts are shifted to people with private insurance.
Economists will tell us cost shifting occurs when a health care provider accepts low government reimbursement rates but can only do so if it anticipates collecting higher rates from those with private insurance. This cost shifting acts like a hidden tax on millions of American families and small businesses. One respected actuary estimates that cost shifting increases the average American family's health care premium by more than 10 percent, or $1,500. That means those listening who have private health insurance, their family will pay $1,500 more each year because of this cost shifting phenomenon because Medicare and Medicaid reimburse at below market rates. So those are hardly a model for what we ought to be doing here.
Adding another new government plan on top of the ones we have, of course, will only increase the costs, and we'll never lower health care costs by putting Medicare for all in place or what some might call Medicare on steroids.
We need new approaches. Mr. President, there are better alternatives. We have a bill proposed by Senators Burr and Coburn on our side of the aisle. Several members on the Finance Committee, including myself, are working on a proposal that will empower patients and consumers, and not the government. It will not get between doctors and patients. It will not rely on denying or delaying access to care in order to keep costs down.
We believe that innovation is one of the things that's made health care in America among the greatest in the world, and that's why we believe that we need to retain and protect and nurture that innovation and that quality health care and to empower patients to use a market that plays by the rules to help lower their costs.
I've seen that as recently as a few weeks ago in Austin, Texas, when I visited with a number of employees of the Whole Foods Company that's headquartered in Austin, a grocery company, where these workers have health savings accounts, or high deductible insurance. They actually call them wellness accounts. I was told that 80 percent of the employees at Whole Foods don't have to pay any money out of pocket for health care. But since they have wellness accounts, or money that they control, they have been empowered to become good, smarter consumers by health care. So they'll call health care providers and say how much are you going to charge me for this? And they'll actually shop and compare different providers to make sure that they're getting the best price for the best quality outcome. I think that kind of thing which imposes market discipline but which requires transparency is one way we can hold down costs and empower individuals rather than just turn it all over to Uncle Sam.
Mr. President, let me just say in conclusion, we keep hearing that we must put health care reform on the fast track here in Washington, D.C., although we do see the schedule slipping because of some of the sticker shock at the huge numbers coming out of the Congressional Budget Office.
I've told folks back home in Texas, I said we know the train is leaving the station, but we do not yet know whether that train will safely arrive with all of its occupants healthy and alive or whether what we're witnessing is in essence a slow-motion train wreck here in Washington, D.C.. The more the American people learn about what's in these bills and how much they cost, they will want us to slow down so we can make better decisions and we can get this right. Mr. President, I think we owe them that.