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Service Members Home Ownership Tax Act Of 2009

Floor Speech

By:
Date:
Location: Washington, DC

Service Members Home Ownership Tax Act Of 2009

BREAK IN TRANSCRIPT

Mr. SPECTER. Mr. President, I have sought recognition to speak in opposition to the Ensign amendment. The authoritative statement on attorney's fees has come from the National Association of Insurance Commissioners in a 2008 document entitled ``Countrywide Summary of Medical Malpractice Insurance.'' These are authoritative figures on how much the defense lawyers have taken and how much the plaintiffs' lawyers have taken.

It shows that the plaintiffs' lawyers, on this state of the record, are underpaid--paid less than defense lawyers--hardly the cause for an amendment to lower attorney's fees even more for plaintiffs' lawyers.

These are the statistics by the National Association of Insurance Commissioners as to the attorney's fees. The attorney's fees for defendants were $2.110 billion. The total recovery by plaintiffs was $4.09 billion. Calculating attorney's fees at one-third would mean that the attorney's fees were, for the plaintiffs' attorneys, $1.340 billion, substantially under the $2.110 billion for defense attorneys.

Attorneys who take on cases on a contingent fee do so because, unlike insurance companies which have the funds to retain lawyers on an hourly basis, most plaintiffs are unable to pay attorney's fees, do not have the capital to do so. The arrangement is worked out that the fee will be paid by a share of the recovery. If there is no recovery, there is no fee. Beyond the absence of the fee, the plaintiffs characteristically cannot afford the costs of litigation. When depositions are taken or filings are made or various other costs arise, it is up to the plaintiff's lawyer to pay those fees and those are not reimbursed.

An effort is being made now to have those deductions on an annual basis. The plaintiff's attorney cannot even take them in the year when they are paid. So if you see a situation where, in absolute dollars plaintiffs' lawyers on contingent fees are paid less than defense lawyers, and you have added to that the risk factor that the plaintiff's lawyers may get nothing, there should even be a greater compensation for plaintiffs' lawyers than defense lawyers. As these statistics show, it is less.

Most of my experience in the courtroom has been as a prosecuting attorney, but some experience--I worked for a big law firm, Barnes, Dechert, Price, Myers and Rhoads, representing the Pennsylvania railroads, defendants, representing insurance companies. In the firm practice in that kind of representation, there is frequently a senior lawyer, junior lawyer, associate, paralegal, and multiple tiers running up the costs.

Most plaintiffs' lawyers do not have large firms. Many are single practitioners. To postulate a situation where the fees be cut even further is just not reasonable or not realistic.

When the contention has been made--it was just made by the Republican leader, repeated earlier contentions--that there are Senators who voted in favor of the Kennedy bill on liability reform, it is not so as represented. First of all, Senator Kennedy's bill in 1995 was a much different bill. Second, it was a tabling motion. Those who voted against tabling were willing to consider the issue, not that they agreed with what was in the bill. Procedurally, when there is a motion to table, if it is passed the bill is off the floor. If a motion to table is defeated, then the bill remains on the floor for consideration. But it does not mean that people who want to consider the bill are in agreement the bill ought to be enacted.

The issue of attorney's fees and the issue of malpractice litigation ought to be left to the States in our Federal system. Pennsylvania, my State, is illustrative of the way State governments can handle the issue and deal with it to avoid excesses. In Pennsylvania there was a rule change made to require that before a malpractice suit could be brought, there had to be a certification from a doctor that the case fell below applicable standards of care. A second major change was made which required that the medical malpractice action be brought only in the county where the cause of action took place. That was a move aimed at eliminating so-called venue shopping, to go to a venue where there is likely to be a better result.

As a consequence of these two rule changes, the number of filings in Pennsylvania dropped dramatically. With the comparison of the years 2000 to 2002, it was noted that the rates dropped by more than 37 percent in 2003, continued to decline in every succeeding year, and in 2008 had dropped 41.4 percent.

The improvement in the picture was further illustrated by the fact that the reforms resulted in the reduction of premiums on malpractice insurance. These reductions are in sharp contrast to 2002, when one leading carrier increased its rates an average of 40 percent and a second leading carrier increased its rates by 45 percent. Then the rates have been decreased consistently and in ensuing years.

Other indications in the success of Pennsylvania was the renewed interest of companies that want to sell medical malpractice insurance in Pennsylvania--57 newly licensed entities are now writing medical malpractice coverage since April, 2002. This is illustrative of the way the States can deal with this issue. It ought to be left to the States.

Interestingly, the Senator from Nevada, who has proposed this amendment, has filed legislation this year, S. 45, and in S. 45 he has a different approach. He allocates for some recoveries up to 40 percent. Why there is a difference now, cutting it back to 33 percent, and then down to 25 percent, is unexplained. But when an amendment of this sort is offered on a bill for comprehensive health care reform, it is not germane to the issues before the Senate. The standard of being germane means whether there is any provision in the bill now which relates to this matter.

Had this really been a serious effort to get legislation, the process or recourse to be followed would have been considerably different. The way to get legislation enacted is not merely to come before some bill and offer it without hearings before the committee of jurisdiction, without the consideration of witnesses. There have been no hearings on the amendment offered by the Senator from Nevada. Had there been hearings we would have been in a position to make a determination as to what are the real facts.

Are the fees collected by plaintiffs' attorneys on a contingent basis excessive? What is the reality for the justification, in terms of the time it takes and the expenses involved? But no request was made, to my knowledge, for a hearing before the Judiciary Committee. I do know that no hearing was held. So we do not have a factual basis for making an evaluation of this amendment at this time.

It is my hope that we will move from this amendment and take up the issues which are in dispute. We need to eliminate and reject the false rumors which have been advanced. The contention has been made that there would be death panels as a result of this bill. That has been thoroughly debunked. There has been a context that there would be cuts in Medicare. We argued an amendment a few days ago on the contention that there would be very substantial cuts in Medicare. The AARP opposed that amendment because it was fallacious. It was untrue. AARP is an outstanding guardian of the interests and rights of senior citizens, and AARP opposed that amendment.

The contention has been made that there will be a government takeover of medical care which has also been disputed and pretty well disproved. When the government option is offered, it is just that. I believe America would be well served by having a robust public option. But the option is nothing more or less than what it says. It is one alternative. Private insurers would still be in the picture.

There have been repeated contentions that there will be an increase in the deficit. President Obama is pledged not to sign a bill which will add to the deficit. I am pledged not to vote for a bill which will add to the deficit. When you take a look at what this bill will accomplish, there are very substantial savings in the current cost of medical care, which is $2.4 trillion. I will be specific in what they are. With annual examinations available and incentives for people to take annual examinations, they will be catching what could turn out to be chronic ailments, very disabling, very expensive. Catching a problem with a cardiac issue, with a heart problem, or catching breast cancer at an early stage or catching Hodgkin's at an early stage--I speak with some experience about this issue--will cut down medical expenses tremendously. When there are advance directives, there will also be additional savings. This bill provides for counseling for people who want to know about advance directives. No one should tell anyone else what they ought to do about end-of-life medical care, but it is fair to say consider it, make a decision, have a living will, do not leave it to the last minute when someone is rushed to the hospital and the burden then falls on family members. Estimates range as high as 27 percent of Medicare costs in the last few days, few weeks of a person's life.

There are also very substantial savings available for changes in lifestyle. Safeway has demonstrated lower insurance premiums for people who stop smoking, lower insurance premiums for people who have lower cholesterol. That is another major area of savings.

An additional area of savings would be to change the current approach of having fines imposed for Medicare.

I ask unanimous consent for 30 additional seconds.

The PRESIDING OFFICER (Mr. Bingaman). Without objection, it is so ordered.

Mr. SPECTER. Currently the criminal justice system results most of the time in fines for health care fraud. That is totally ineffective. But if there were jail sentences imposed, that would be a deterrent to others, something I learned years ago as a prosecuting attorney. We can also come to terms on the abortion issue, allowing women to pay for abortion coverage in their medical care. There is no reason they should be denied in maintaining the principles of the Hyde amendment with no federal payment for abortion services.

I thank the Chair and yield the floor.

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