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Transcription of Senator Grassley's Capitol Hill Report


Location: Unknown

WOLF: Senator, you're in the midst of working on the national
health care reform bill, and I've read that hospitals are giving up --
I believe, is it $15 billion in payments over 10 years?

GRASSLEY: $155 billion, I think.

WOLF: $155 billion in payments over -- over 10 years. What are
the hospitals receiving in return for that?

GRASSLEY: Well, you brought up one of the basic things within
our whole discussion of health care reform. And before I answer your
question, I would like to say to you that I've -- I -- even though I'm
a negotiator for Republicans on health care reform, I have not entered
into any of the negotiations that you've read about, about
pharmaceutical companies and about health -- hospitals and other
health care providers, because I am in a very tenuous position between
national health care reform and the fact that Iowa does not receive
fair reimbursement under Medicare.

And -- and so I'm -- prior to -- when I learned about the White
House negotiating this with the three hospitals associations --
Catholic, Federated, and the American Hospital Association -- I called
the Iowa Hospital Association, and they have not signed off on this.
So I'm not going to do anything in regard to this until I hear that
it's not going to be harmful to Iowa hospitals.

So let's go back to answering your question. Here's the way this
works, and I think it works in an intellectually honest way, that if
you have 49 million people that don't have health insurance today, and
a lot of them are charitable care at hospitals, then, of course,
that's no revenue coming into the hospitals, so they need what we call
cost-shifting from private health insurance and from Medicare to pay
for that charitable care. And then they also have nonprofit status,
which means they don't have to pay taxes, so that's another way of
helping charitable care.

OK, then the hospitals down the road, just as soon as we get
these 49 million people covered -- and for lower-income people,
there's going to be help to do that -- then, 49 million people having
health insurance going to the hospitals, the insurance program is
going to pay for it.

So then, at that point, what hospitals need for charitable care
and the part of it that comes from Medicare and things of that nature
would be loosened up to help pay for the cost of starting this health
care reform.

WOLF: Would this pay for all of the health care reform or...


WOLF: ... other -- other...

GRASSLEY: We're talking about a shift of probably $1 trillion
within the $2.3 trillion of health care we have. And -- and that
shift is going to come over a period of years, but let's say that that
shift is about $1 trillion. And I don't mean $1 trillion of new
spending. There might be some new spending and a lot more new
spending up front with savings down the road, but I would say this
$155 billion is probably about 8 percent or 9 percent of the total
cost that we're talking about.

WOLF: Has there been any talk about sweeping cuts to Medicare or
cuts to Medicare of any kind or increased taxes to help pay for the
health care reform?

GRASSLEY: Yes, there has been. In fact, I just came from a
meeting that was going over changes in tax law that might bring
revenue in for this. So I would say about half of it would be revenue
and half of it would be savings.

WOLF: Does the fact that just three hospital groups were
involved in the negotiations or agreements -- does that -- has that
damaged the credibility of the work?

GRASSLEY: No, because there's only three hospital associations
in the United States, so they're all at the table.

WOLF: OK. Shifting gears to cap and trade, where's that process

GRASSLEY: Well, it's passed the House a week ago, barely passed
the House, so it's highly controversial. It's going to be more
controversial in the Senate. And Senator Reid says it probably won't
come up very soon. I don't even expect it to come up this year,
because we take a summer break for the month of August, we take a
couple weeks off for Christmas, a short period of time for
Thanksgiving, and I doubt if there's more than 17, 18 weeks of session
yet this year. I don't see it coming up.

Now, it could come up, but I see that it's going to be highly
controversial, particularly for Midwestern senators, both Republicans
and Democrats, because it's like a big utility tax every time you turn
on your -- your light switch.

The term cap and trade need to be effectively called a cap-and-
trade tax. Or you can call it a carbon tax, whatever you want to call
it. But particularly in those parts of the country where they don't
have a lot of hydro or natural gas or nuclear, like in the Midwest --
85 percent of our electricity comes from coal -- it's going to be an
extremely high tax every time you turn on your light switch.

GRASSLEY: And then just consider the great amount of electricity
and energy that's involved in the manufacturing process. Every step
through that manufacturing process is going to make things that are
manufactured you buy much more expensive.

I've seen figures of $160 billion a year, as an example, and
consumers are going to end up paying for all that. Now, if we
actually were reducing CO-2, that might be a good investment. But
this is just a bill affecting the United States.

Even Lisa Jackson, the new EPA director, testified before
Congress that if we don't include China and India, the United States
by itself isn't going to make hardly a dent in the reduction of CO-2
and help global warming. So that's why I've been arguing we need an
international treaty if -- and that includes China and India and a lot
of other countries -- if we're actually going to take care of the
global warming problem.

WOLF: Any hope that there wouldn't be 100 percent auctioning of
emission allowances? I've read from some utility groups they would
certainly prefer that, and...

GRASSLEY: Instead of the 80 percent that's in the bill?

WOLF: It's 80 percent, OK.

GRASSLEY: Or 85 percent, I think.

WOLF: Right.

GRASSLEY: So you're saying -- well, then I suppose you get back
to, what are you really doing? I mean -- and I'm questioning what
they're doing, so I'm not speaking in favor of it. But if you agreed
that what they want done -- and you were going to have 100 percent
tax-free emitting allowances, then you don't accomplish anything.


GRASSLEY: So then they -- then the other argument would be,
well, you ought to have a flat-out carbon tax, so much -- so many
cents per BTU of carbon tax. But just think of what that's going to
do to the economy, as well, if -- if other countries don't have that
same tax. We're going to be hurting America's economy and helping the
economy of China.

WOLF: Do you -- do you believe a cap and trade -- some sort of
cap and trade is necessary?

GRASSLEY: If it is -- you're asking me if I think it is?

WOLF: Right.

GRASSLEY: I think that there's disputes among scientists. And
-- and I haven't drawn a scientific conclusion on that point. But
there's not a consensus among scientists on it.

And there is a consensus of global warming.

WOLF: Right.

GRASSLEY: But there's also -- hasn't been global warming in the
last nine years. You know, it leveled off '98 to the year 2001. So,
you know, what kind of a natural cycle are we in? I don't have an
answer to that, but scientists are saying we're in a cycle that's
going to be cooling for maybe a couple decades. So, you know, this is
all kind of natural.

Then you've got Al Gore and all of his stream of scientists
that are saying unquestionably the globe's going to continue to warm
several degrees in the next century.

So, first of all, the jury's out, as far as I'm concerned, on
natural versus manmade. Once -- if that were determined to be manmade
and we can do something about it, then it's got to be done on a global
basis, not just by the United States, because our own EPA director
said it's not going to make a dent.

WOLF: Switching gears back again to health care reform, is there
any hope that some geographical equity in Medicare reimbursement can
be part of the bill, where, say, for example, Iowa is incentivized or
rewarded for having high quality, rather than high volume of care?

GRASSLEY: Yes, right now, the word ought to be incentive,
rewarded, because we don't need incentives for quality, because we're
fourth or fifth in the nation on quality. We need to be rewarded for
it, and that's just exactly the point that the director of the Iowa
Hospital Association made to me, why they weren't backing this effort
yet, because they want to make sure that this geographical inequity is
taken care of.

Thank you, Gordon, for participating in today's public affairs
program. This has been Senator Chuck Grassley reporting to the people
of Iowa.

Thank you very much. You had a lot of good questions.

WOLF: Thank you. Thank you for your time.

GRASSLEY: Goodbye.

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