DEFICIT REDUCTION ACT OF 2005--CONFERENCE REPORT
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Mr. COBURN. Mr. President, I come to the floor first to meet those two who were just debating to wish them a Merry Christmas and a happy holiday season. This is a season, a time about giving. When you give something, most often it costs you. It is called sacrifice. It is what our Nation was built on. It is the very heritage that we have as a nation, that we sacrifice to do what is in the best long-term interests of our country.
The chairman outlined the unfunded liability that is facing this Nation between now and 2070. He gave a figure of $51 trillion. That is an underestimate of what the true unfunded liability is for our country. We just added $8.7 trillion with the Medicare Part D Program. But it is such a large number we have a hard time getting our hands on it.
One of the ways to get our hands on it is to think about what it means per individual, and $51 trillion in unfunded liabilities means every man, woman, and child in this country today is responsible for $171,000. Think about that. That is more than the net worth of the country.
Why do I raise that? Because the debate we are having about this bill and movement forward and the comments about how you judge whether somebody is compassionate is based on how you treat those less than you and those who are going to follow you. I believe everybody in the Senate would agree that leaving $171,000 worth of obligation for every man, woman, and child in this country is inappropriate. It belies the heritage of this country.
If you think about the great generations that have come before us--the greatest generation, the World War II generation--those who have sacrificed in this country and those who are sacrificing today in the war on terrorism, it is inconceivable to me that we will not start doing some of the small things we can do, with the bills that are going to be before us today and tomorrow, to assure a Christmas gift to every American.
Some say, How can you do that and still be compassionate? My argument is, if we don't start doing it, we are not going to be able to be compassionate at all.
I would like to put up a couple of charts.
The first is from the Government Accountability Office. It shows where we are going if we freeze discretionary spending in this country. If we absolutely freeze discretionary spending, what will happen is between now and 2040, there is no increase in any discretionary spending whatsoever. You did see how our growth and expenditures take place. You can see that the vast majority of that is Medicare, Medicaid, Social Security, and all other spending, of which the largest proportion in 2040 won't be on any program but will be interest on the national debt.
I am also struck by the inconsistency that I hear in this body when one group of Senators has offered over $400 billion in new spending this year--$400 billion in new spending proposals this year.
If you think about why this is important, this line is represented as a percentage of our gross domestic product. All we have to do is look at the country of Germany today to see where we are going and what is going to happen to us. They have unemployment of 13 percent. Their growth is minimal in terms of their gross domestic product. Why? Because 40 percent of their gross domestic product is taken up by the Government. This only goes to 2040.
At 2050 and 2075, we are at 40 percent of our gross domestic product. That means money that could be invested in new jobs, in capital, in future opportunities for our children, won't be there because we will be consuming.
Now let's look at if we just have the Government grow at the rate of inflation. What do we see? By 2040, we are above 40 percent.
So the questions before this body and the criticisms of the bills on the floor don't make any sense if we are going to give a Christmas gift of a future to our children. This is unsustainable. The Government Accountability Office has said we are on an unsustainable course. It is impossible.
The Senator from North Dakota earlier said he is going to bring a spending reduction bill to the floor. I embrace that. There is no question that I am known in this body to try to restrain our spending. But if we don't, we belie the very heritage this country has stood for since its inception; that is, one generation sacrificing for the next so opportunities and a bright future will be there.
How have we done that? Because we are more interested in the next election than the next generation. We are more interested in making the easy choice, the expedient choice, rather than the difficult choice.
The choice is this. The way things are set up now, there is no way we can keep our obligations to you if you are dependent on the Federal Government. What is compassionate about that? What message do we send to those who truly are dependent upon us if we will not make the hard choices to make sure anybody is in a position to help them in the future?
I will talk about some specific things.
This reconciliation bill didn't go nearly far enough in terms of reducing spending. Let me give you a couple of examples.
The Federal Financial Oversight Subcommittee which I chair had a hearing on inappropriate payments. There is an Improper Payment Act which is law that the Center for Medicare and Medicaid Services has failed to enforce on Medicaid alone. But let us talk about Medicare, and then we will talk about Medicaid.
In Medicare alone, it is estimated that over 10 percent of the payments that are made by Medicare are inappropriate. Of that, 90 percent are overpayments. What do I mean, overpayments? I mean fraud, I mean abuse, I mean cheating the Federal Government. And as a physician, I am talking about some of my peers and others in the health care industry, whether they are in durable medical equipment, in the pharmaceutical industry, or others who are taking advantage of the bureaucracy of the program. But this bill saves a small amount of money over the next 5 years. The total is under 8-point-some billion dollars. Less than half of that comes from Medicare and Medicaid. Think about 90 percent of $21.7 billion. That is $19 billion a year in Medicare fraud, and $19 billion a year times 5 years comes up to $95 billion. This bill doesn't even save $40 billion over the next 5 years.
If we want to be serious about giving a Christmas gift of opportunity and future and making the sacrifices, it starts in this Chamber. That sacrifice is, there is no excuse for us not to rid Medicare of the fraud that is in it today, an estimated $19 billion a year. If, in fact, we rid Medicare of the $19 billion and we rid Medicaid, which is $18 billion worth of fraud--that is estimated because they have not followed the law and reported improper payments.
I ask unanimous consent to have printed in the RECORD an article from New York Times that outlines some of the Medicare fraud issues in New York State.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
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Mr. COBURN. Mr. President, it is estimated that the fraud in New York State is $14 billion a year in Medicaid alone, of which the Federal Government pays two-thirds. In 5 years, solving the Medicaid fraud in New York would pay for every savings we have claimed in this whole bill for the next 5 years.
Examples: St. Barnabas Health Care System agreed to settle $3.9 million in claims it overcharged Medicare; the Premium Health Care Group, $1.6 million for fraudulent wound-care claims; Michael Clemens, FBI special agent--$1 billion in Medicare fraud in south Florida alone.
If you add up what is going on in Medicare and Medicaid, $37.5 billion a year at a minimum is fraud and yet we are trying to save a measly two-tenths of 1 percent in terms of slowing the growth.
We haven't gone far enough. For somebody to reject this bill on the fact that we might not meet our obligations on Medicare and Medicaid--the obligation isn't being met in terms of the oversight of these programs.
I wish to spend a few moments talking about Medicaid fraud because it is important for people to know what a poor job we are doing in terms of oversight.
Investigators estimate that as much as $18 billion worth of fraud occurs every year in New York alone on Medicaid. That is 5 percent of the total national spending on Medicaid in one State. One New York dentist, Dr. Dolly Rosen, claimed to have performed 991 procedures a day in 2003--991 procedures a day. The New York Medicaid Program consumes $44.5 billion. It is the most costly and generous in the Nation. In the article that I mentioned, James Mehmet, the retired chief investigator of Medicaid fraud in New York City, says that at least 10 percent of that was spent on fraudulent claims.
We can, if we will do the oversight, accomplish what we need to in terms of doing the hard work, and the reductions in the expenditures won't have any impact on those who are truly needy for Medicare and Medicaid. What they will have an impact on is the criminals who are defrauding the American taxpayers by billing for services they have not performed.
Other examples: Schering-Plough agreed to pay $335.5 million back to Medicaid this last year on the basis of fraud and an elevated billing process.
The other thing estimated in New York, to build the case a little further, this same James Mehmet estimates as much as 30 percent of the budget--10 percent of it is fraud; 30 percent of it is abuse. If only half of that is inappropriate payments, we are up to 25 percent or up to $12 billion a year. Again, that is in one State. If we did the oversight, changed the rules, increased the punishment, held people accountable, every bit of savings in this bill could be paid for by Medicaid fraud in New York State alone.
The question is, are we going to do what we need to do as a Senate, in the future? This bill is a first good step. It does a lot of things in terms of Medicaid, of creating a new Medicaid task force to go after fraud.
We can do much more. To do less says we do not have the Christmas spirit, the spirit of giving, the spirit of sacrifice.
I close on this one note. Most everyone listening out there has children and grandchildren. When you think about your grandchildren, what do you think? What is it you desire for them? What is it you want for them? When we hear the rhetoric--whether it is from the AARP or other groups--discounting the fact that we are going to slow down the growth in Medicare and Medicaid, and doing it not by taking away benefits for those who are truly needy but by doing the job we should be doing, when we do that, we give a gift to our children and to our grandchildren.
I want opportunity for my grandchildren. I don't want them to be given anything. I want them to be given the gift of having an opportunity to attain it. I want to create an economic environment in the future that is sustainable. We are not sustainable today. I want every grandparent out there to think, do they want something for themselves today that is going to be paid for by their grandchildren 20 years from now?
That is the real issue. That is the whole center of the entire debate in Congress today as we debate these contentious issues on how we spend or do not spend money. It is a simple question. Take now and charge it to your grandchildren. Take now and take away their opportunity for homeownership. Don't do anything now because it might not be politically popular, but undermine any future your children and grandchildren have. That is described as selfishness. That is the exact opposite of the spirit of giving.
America is better than that. America's heritage is better than that. The American people are better than that. The problem is, we do not understand what is before the Senate, the obligations and the great responsibilities before us. We were sent here to make the hard choices. If you are listening today, listen to the rumble, the rumble that is out there in the American public. They want us to do the hard work of trimming the waste, of trimming the fraud, of trimming the abuse. They want us to eliminate our political earmarks to pay for the things that are necessary for this country--not pay for the things that get us reelected. There is a rumble. The rumble is real. The American people are paying attention that we should be doing the hard and heavy lifting of making the tough choices.
This bill is a start. It should go much further. It should be $100 to $200 billion of reduced spending through fraud. If there is truly $35 billion a year in wasteful, fraudulent, improper payments for Medicare and Medicaid, that is $18 billion for Medicaid, $19 billion for Medicare. That is $37 billion a year. In 10 years we can save $370 billion. This chart I had up will show a better future for our children and our grandchildren.
I ask the Members of the Senate to make sure we pass this bill. This is a start. It does not have anything to do with the tax cut. There is not going to be any tax cut unless we get spending under control. To not want to get spending under control means Members do not want to give an opportunity for advancement in the future for our children and grandchildren.
Grandparents, this is about our grandkids. I have four grandchildren. I wish I had 20. But more than that, I wish for them the same opportunities that have been there for us, the same opportunities that the great generation fought for and gave us such wonderful blessings. The same opportunities for every veteran we have had who has fought and died and been injured and the sacrifices they have made--are they in vain if we do not have the same type of courage, the same type of commitment that those who serve our country in our armed services have?
We can do no less than to start down the hard road of making difficult choices. This is the first one. They are going to get harder as we face the economic perils in front of us and the commitments we have made that right now we cannot keep. We either change them or the American people are going to change us.
Mr. McCAIN. Will the Senator yield?
Mr. COBURN. I am happy to yield.
Mr. McCAIN. I applaud the Senator from Oklahoma for not only his statement but also for his continued commitment to fiscal discipline here and in trying to identify much of the wasteful and unnecessary spending.
I wonder if the Senator from Oklahoma has had a chance to look at the Defense appropriations bill we are going to consider tomorrow and see some examples of the interesting earmarks out of a conference report. Is the Senator aware of $500,000 to teach science to grade school students in Pennsylvania or $3.85 million for the Intrepid Sea-Air-Space Foundation or $4.4 million for a Technology Center in Missouri or $1 million to a Civil War Center in Richmond, VA, or $850,000 for an education center and public park in Des Moines, Iowa, or $2 million for a public park in San Francisco or $500,000 for the Arctic Winter Games, an international athletic competition held this year in Alaska?
Museums are popular this year, including $1.5 million for an aviation museum in Seattle, $1.35 million for an aviation museum in Hawaii, $1 million for a museum in Pennsylvania, $3 million for a museum in Fort Belvoir.
There are more, I say to my friend from Oklahoma, and we are at war. I wonder how many MREs, flak vests, or bullets we could buy with all this money.
I appreciate the Senator's support for this budgetary measure, but how do we tell people we are going to cut food stamps and reduce eligibility for welfare while we are taking the money that is for defense, in the tens of millions of dollars on this Defense appropriations bill, put in a conference report that none of us ever saw or read until right now, I ask the Senator from Oklahoma.
Mr. COBURN. I am happy to respond. As the Senator knows, on the conference report I am unable to offer amendments to eliminate those things. As the Senator well knows, also, I have started down a track where I am going to confront earmarks in the Senate or we are going to change that.
With that, I offered on almost every appropriations bill what was called a sunshine amendment. That will be offered again in the House next year, and when we come to conferences, the ability to put in extraneous earmarks has got to be limited.
I would, however, answer the Senator. Having had an oversight hearing on food stamps, we spend $1.6 billion in giving food stamps to people who do not qualify, who have more than the capability to take care of themselves. That is at a rate of 6.9 percent of every person who comes to attest for food stamps.
So I believe the same thing can be said for the Food Stamp Program that we can say about Medicare and Medicaid, that we need to run a bill. We need to have better oversight. We need to check it so the fraud and abuse is out of it.
As the Senator knows, I do not like earmarks because I believe they compromise the operation of good government. I think they buy votes when votes would not be there. I think the Government has grown because of the force of earmarks.
So I am not aware of those specific things. I have not looked at it, to answer the Senator's question. But I am not happy they are there.
Mr. McCAIN. Will the Senator yield for one more question?
Mr. COBURN. I will.
Mr. McCAIN. Not only do we have the earmarks in outrageous and disgraceful pork-barreling on this bill--again, that none of us ever saw until my staff went through this bill--but there is also a great deal of legislation. Remember, this is the Department of Defense appropriations bill. So it is not just the money, it is also policies and major policy decisions.
There are avian flu vaccine limitation of liability provisions. I tell the Senator from Oklahoma, I do not know if that is worthwhile or not, but it has been jammed into a Department of Defense appropriations bill.
There is funding for farm conservation. There is a provision protecting jobs in--guess where--Hawaii and Alaska. And there is a provision that transfers, as a direct lump-sum payment to the University of Alaska, the unobligated and unexpended balances appropriated to the United States-Canada Railroad Commission.
Does the Senator from Oklahoma have a clue what that is all about?
Mr. COBURN. No, I do not.
Mr. McCAIN. Here we are again, I say to my colleague from Oklahoma, when everybody wants to get out of town examining bils that have all kinds of things in them that we never saw or heard of.
In the Statement of Managers, there is $1.6 million for the Lewis and Clark bicentennial activities. The list goes on. There is $7 million for the Alaska Land Mobile Radio.
I ask my friend from Oklahoma, don't you think the American people are fed up with this kind of stuff? And don't you think it is time a group of us, who have been meeting and talking about eliminating some of these practices, get together and make things tough on the floor of this Senate next year to reign in this out-of-control, disgraceful, obscene conduct that goes on on these appropriation bills?
Mr. COBURN. As the Senator knows, I believe we do a disservice to our country in the way we manipulate appropriations. I have been very vocal on that. But I also know it requires courage to stand up. And the American people are expecting that. They are going to see that this next year on the floor of the Senate. They are going to see a process by which every earmark is challenged in the bills that come before us and in the bills that come out of conference.
What I do know--and I will finish my statement with this--is every economist and every elected official in this country, in this body, knows we are on an unsustainable course. Everybody knows that. Everybody is aware of that. Slowing the rate of growth of programs is compassionate. It is not lacking in compassion. If you do not slow the rate of growth, the very people you want to help will not be helped in the future. It is compassionate to keep your obligations. The way to keep your obligations is to change the programs so we pay for them out of the waste, fraud, and abuse that is involved.
Most people who oppose this bill do not have a good alternative. They do not have a good alternative. The plan of never-ending expansion, unsustainable commitments, is the surest way to deny benefits and coverage to the very people we want to help in the long run. It is the only way we are going to be able to do it. We cannot continue to avoid the tough choices, and we cannot continue to avoid prioritizing and to grow government as we like. We cannot do what we have done in the past. The economic conditions will not allow it. The American people are not going to allow it.
It is time, and it starts January first--it starts here with this bill, but it starts in the next session of Congress. It is going to be different. It is going to be difficult. But we are going to make the tough choices.
With that, I yield my time.