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Service Members Home Ownership Tax Act Of 2009

Floor Speech

Location: Washington, DC

Service Members Home Ownership Tax Act Of 2009


Mr. McCAIN. Yes. For those who missed Senator Hatch's important statement last night, which he will add to today, I point out that he was able to take a trip down memory lane. In June 2003, when the Medicare Modernization Act was before the Senate, several of our colleagues, including Senators Schumer and Kerry, offered a bipartisan amendment on the floor to provide additional funding for benefits under the Medicare Advantage Program.

But amnesia is not confined to one side of the aisle around here. I ask my friend from Tennessee--you know this discussion about Medicare Advantage--we have to better understand what is this program and why is it so popular. Is it because it offers seniors a chance to get additional benefits? Maybe the Senator can give a short definition of that. I think the American people may not be totally clear on what we are discussing here and why 11 million Americans--over 300,000 citizens in my own State--have chosen Medicare Advantage, and that has prompted, according to Bloomberg, Senator Casey of Pennsylvania, to say, ``We are not going to be able to say 'if you like what you have, you can keep it.''' ``That basic commitment that a lot of us around here have made will be called into question.''

The title of that is ``Dem Senator Says Medicare Advantage Cuts Break President's Pledge.''

Maybe the Senator from Tennessee can give me a brief outline of what seniors get under Medicare Advantage and why it is so popular with 330,000 senior citizens in my State and 11 million in the country.

Mr. ALEXANDER. I can do that. The Senator is correct. If the Senator from Pennsylvania, Senator Casey, said that, he is merely repeating what the Director of the CBO stated, when he said that fully half of the benefits of Medicare Advantage will be lost.

To answer the Senator's question, Medicare Advantage is an option that 11 million of the 40 million seniors who are on Medicare have chosen. The reason they choose it is because it is a plan offered by private companies, often to people in rural areas, often to minorities----

Mr. McCAIN. Lower income seniors.

Mr. ALEXANDER. Yes, lower income Americans also choose these. They often choose it because the plans generally offer these benefits: dental care, vision care, hearing coverage, reduced hospital deductibles, lower co-payments, lower premiums, coordinated chronic care management, and physical fitness programs.

Mr. McCAIN. I thank my friend. The reason I ask this, he mentioned that Medicare Advantage would allow seniors to have dental care, vision care, hearing care, physical fitness--it is fascinating. This allows our senior citizens to have dental, vision, hearing, and physical fitness care, and that is a little strange because, as was pointed out to me, that is exactly what we have here in the Senate. About 100 paces from here, if I need some doctor care immediately, if I need some vision care, if I need some dental care, I can get it. Next to my office in the Russell Senate Office Building, for the last several months--and I don't know at what cost, but I would like to get entered into the Record how many tens of millions of dollars it is. But they are renovating a gym. So my colleagues yesterday voted against keeping the Medicare Advantage Program, when we have, right here, the best Medicare Advantage Program ever heard of in the world--free hearing, free vision, free dental--and they are expanding a gymnasium in a many-months-long project. I will get the cost of that, although that may be hard to do.

Let me get this straight. Again, the American people should understand this. We voted to cut drastically a program that seniors have taken advantage of, which gives them additional hearing, vision, dental, and physical fitness care, while we practice it here every single day. Every day, there is a physician on duty--more than one--not very far from where I speak, who is ready to give us instant care. If hospitalization is needed, we can get instant transportation to the Bethesda Naval Hospital, where we will get free care. Incredibly, the Senate, on largely partisan lines, yesterday voted against senior citizens in this country, most of whom have paid a lot more into the program than we have. We are going to deprive them of what we have every single day we are members of the Senate.

That is an exercise in hypocrisy. The Senator from Pennsylvania has it right, because the President, time after time, said to the American people: If you like the insurance policy you have today, you can keep it. How many hundreds of times have we heard him say that at townhall meetings? And his administration mouthpieces say the same thing. The Senator from Pennsylvania is right when he says, ``We are not going to be able to say if you like what you have, you can keep it. That basic commitment that a lot of us around here have made will be called into question.''

I will say a couple words, and I will talk more about this later. Every time the Senator from Montana and others are on the floor, they talk about the fact that AARP now supports this blatant transfer of funding from the Medicare Program, which the seniors have earned, into a brandnew entitlement--a $2.5 trillion entitlement program. That is what this bill is all about.

For your information, AARP has received $18 million in stimulus money. There is a job creator for you. AARP, which has given its full-throated support to the Democratic health care legislation, even though seniors remain largely opposed, received an $18 million grant in the economic stimulus package for a job training program that has not created any jobs, according to the Obama administration's Web site. That is astonishing to me because from everything I have ever seen, they have created millions of jobs, including in the ninth congressional district of Arizona, where they said they created thousands of jobs. Unfortunately, we only have eight congressional districts, but that is OK.

In February, Politico reported that AARP was putting pressure on Republican Members of Congress to support the stimulus package. Since then, AARP has moved on to lobbying for passage of health care legislation, even though Democratic proposals have called for several hundred billion dollars in cuts to Medicare--a program that the group typically defends tooth and nail when Republicans propose cutting it. It turns out that AARP is also in a position to benefit financially if the health care legislation passes, because seniors losing benefits as a result of cuts to Medicare Advantage will be forced to buy Medigap policies, which is the main source of AARP revenue. Barry Rand, chief executive of AARP, was a big donor to the Obama campaign and has retained a cozy relationship with the administration. That is shocking news.

So, my friends, also I might add that in 2006, AARP received $18 million from the Federal Government, and we are reserving additional Federal moneys that they get.

The most important thing is this, and let's make it clear: AARP will receive direct benefits because seniors who have cuts in their Medicare Advantage and other Medicare programs can buy--guess what--a Medigap insurance policy from AARP--in other words, to cover the things being cut back under this legislation, and it costs $175 a month. The Medicare Advantage premiums are zero for most seniors or $35 a month. Again, if the Medicare Advantage plans go away, people would have to buy a Medigap plan sold by--you got it--AARP. And some low-income seniors could not afford $175 a month.

That is why the Senator from Tennessee stated that if we drive people out of Medicare Advantage, we are harming low-income seniors all over this country. We are harming them. We are doing them a great disservice. If you think with 17 percent real unemployment in my State that seniors who are unemployed and down on their luck are going to be able to afford the AARP Medigap policy for $175 a month, come and visit my State and I will tell you they can't.

It is interesting, the conversation about high-income seniors, and how we are going to tax people with Cadillac plans and all of those things, when what we are doing is harming the lowest income seniors in rural areas of America.

Mr. KYL. Will my colleague yield for a quick point?

Mr. McCAIN. Yes.

Mr. KYL. The Senator was making the point that you cannot take $120 billion out of the program without hurting folks. Those on the other side of the aisle said we can do that--we can cut it by $120 billion and it still won't hurt anybody. My colleague asked the Senator from Tennessee exactly what some of the benefits were and he repeated them. I went to get the actual statistical number of how much it will actually reduce benefits in terms of actuarial value. According to the Congressional Budget Office, in the year 2019, when fully implemented, here is the statistic: The actuarial value of the reduction in benefits under Medicare Advantage is 64 percent; in dollar terms, it goes from $135 a month down to $49 a month. In other words, the very things my colleague talks about--vision care, dental, all of those things----

Mr. McCAIN. All of the things we routinely use in the Senate. I hope those who voted to harm the seniors in this country and not allow them to have dental, vision, and other health care would unilaterally disavow the use of the physician care and vision care and hearing care available to all of us 24 hours a day right here in the Senate.

Mr. KYL. The last point. I want to say that I hear my colleague loudly and clearly. I hope the American people do too because you cannot call a $120 billion cut something that doesn't hurt people, and especially when the Congressional Budget Office itself says, yes, that reduces these very benefits from a value of $135 a month down to $49 a month. That is a huge cut in the value of the services they receive under Medicare Advantage. That is what we are trying to prevent by this amendment.

Mr. McCAIN. Could I mention one other thing? I will not spend that much more time on AARP. But the reason I do is because every time the Senator from Montana stands up, he talks about AARP endorsing this rip-off of the American people.

Let me quote again from a Bloomberg article entitled ``AARP's Stealth Fees Often Sting Seniors With Costlier Insurance.'' I quote from the Bloomberg article just briefly:

Arthur Laupus joined AARP because he thought the nonprofit senior-citizen-advocacy group would make his retirement years easier. He signed up for an auto insurance policy endorsed by AARP, believing the advertising that said he would save money.

He didn't. When Laupus, 71, compared his car insurance rate with a dozen other companies, he found he was paying twice the average. Why? One reason, he learned, was because AARP was taking a cut out of his premium before sending the money to Hartford Financial Services Group, the provider of the coverage. .....

AARP uses the royalties and fees to fund about half the expenses that pay for activities such as publishing brochures about health care and consumer fraud--as well as for paying down the $200 million bond debt that funded the association's marble and brassstudded Washington headquarters.

In addition, AARP holds clients' insurance premiums for as long as a month and invests the money, which added $40.4 million to its revenue in 2007. .....

During the past decade, royalties and fees have made up an increasing percentage of AARP's income, rising to 43 percent of its $1.17 billion in revenue in 2007 from 11 percent in 1999, according to AARP data.

This is a Bloomberg article. This is not from the Republican Policy Committee.

The point is, who gains? Who gains from this legislation? Who is going to make hundreds of millions of dollars more because they provide the Medigap policies people will be deprived of when we kill off Medicare Advantage? AARP.

Mr. ALEXANDER. Mr. President, I see the Senator from Texas, the Senator from Idaho, and the Senator from Wyoming have all come to the floor, in addition to the sponsor of the motion, Senator Hatch. I am sure they are prepared to reflect on who is hurt by these cuts.

The only thing I would emphasize is what the Senator from Arizona has said is that disproportionately low-income Americans in Texas, Idaho, Tennessee, Wyoming, and Utah are hurt. Only one-third of eligible White seniors who do not have Medicaid or employer-based insurance are enrolled in Medicare Advantage. But the number increases to 40 percent for African Americans and 53 percent for Hispanics.

Mr. McCAIN. May I ask the Senator again, he described the benefits that are provided under the Medicare Advantage program that seniors can have if they want, right? Are those same benefits--dental, vision, hearing, and fitness care--available under regular Medicare today?

Mr. ALEXANDER. My understanding is the answer is no. That it is the reason 11 million Americans choose Medicare Advantage because these benefits are not available under the original Medicare plan.

Mr. McCAIN. In Montana, there are 27,000 enrollees who will see a 24-percent decrease. In Connecticut, there are 94,000 enrollees who will see a 14-percent decrease. By the way, some special deals have been cut for three States I understand--Oregon, New York, and Florida. We are going to try to fix that. There is no reason one State should be shielded any more than another from these draconian measures. We are going to try to fix that situation.

The reason I bring up this issue, present-day Medicare beneficiaries do not have vision, they do not have dental care, they do not have fitness. Yet we in the Senate enjoy it every single day. So yesterday we voted to deprive seniors from the ability to have the same privileges that we enjoy every single day in the Senate. I would argue that is an exercise in hypocrisy.


Mr. McCAIN. May I say it is my understanding that Dr. Barrasso has actually seen Medicare Advantage patients. He and Dr. Coburn are probably the only two. Maybe we could let him give us the benefit of his experience and also not only the benefit of his experience, but I am sure he is going to tell us what the impact is going to be on the low-income seniors from his State.

Mr. BARRASSO. I agree with the Senator from Arizona that people choose to be on Medicare Advantage. Mr. President, 11 million people have chosen to be on Medicare Advantage because it is a wise choice to make because they get better benefits. They get dental care, they get the vision care, they get the hearing aids, they get the fitness thing.

Mr. McCAIN. Just as we do.

Mr. BARRASSO. Just as we do. It works in preventive care and coordinated care.

Mr. McCAIN. I don't think they have as nice a gym, though, as we are going to get.

Mr. BARRASSO. It is also no surprise when people read about this and learn about it that they would want to be on Medicare Advantage. What the Senator from Utah has said, the sponsor of this motion, is that the money that goes into this program is for the benefit of the seniors. It is for services for the seniors on Medicare. To me, this whole bill basically guts Medicare, raids Medicare to start a whole new program.

Today, as the Senator from Arizona has mentioned in these articles, the Associated Press and USA Today said:

Senate Democrats closed ranks Thursday behind $460 billion in politically risky Medicare cuts at the heart of health care legislation. .....

It goes on to say:

Approval would have stripped out money to pay for expanding coverage to tens of millions of uninsured Americans.

So they are going to take $460 billion, it says, away from our seniors who depend on it for their Medicare and start a whole new government program. The Washington Times, front-page story headline, reads: ``Democrats Win $400B in Medicare Cuts. McCain Pushed for Another Way to Pay for It.''

I look at this and say this is not fair to our seniors, not fair to the patients I have taken care of for 25 years in Wyoming, taken care of folks--taken care of folks--when grandmom breaks her hip, what we need to do for our patients. These are choices people have made.

Mr. President, 11 million Americans have chosen Medicare Advantage because there is an advantage to them for the health care they get--the additional services, the coordinated care, the preventive care. Anyone who looks at this and studies it says: I want to sign up.

It has been wonderful in rural areas and big cities. This has helped a lot of people in the country. It is not surprising that one out of four people in the country on Medicare have chosen Medicare Advantage, but yet what we are seeing here is Democrats want to get rid of Medicare Advantage.

Mr. McCAIN. Let me get this straight. Basically, by removing the choices that seniors have as a part of Medicare Advantage--dental, vision, hearing, fitness--we are taking away from them what we ourselves enjoy every single day in the Senate?

Mr. BARRASSO. We are taking it away from seniors and using all that money to start a new government program when we know Medicare is going to go broke by 2017.


Mr. McCAIN. Could the Senator from Texas and I go back to one of the things I mentioned earlier, because in Texas, how many are under Medicare Advantage?

Mrs. HUTCHISON. Five hundred thousand of my constituents are on Medicare Advantage.

Mr. McCAIN. Five hundred thousand in your State, and there is no ``shielding.'' According to this Bloomberg article and according to our knowledge, it says:

Senators Charles Schumer of New York, Bill Nelson of Florida, and Ron Wyden of Oregon are among those who secured special provisions shielding constituents from cuts. Casey--

Referring to Senator Casey of Pennsylvania--

says he wants ``very comparable'' protections for his State--surprisingly enough--where more than one-third of Medicare beneficiaries participate in Medicare Advantage. ``It's the kind of thing that will likely be addressed on the floor,'' he said.

Well, I eagerly look forward to working, on the other side of the aisle, with all the Members from those States, with the exception of New York, Florida, and Oregon, who have earned special shielding from these cuts. I look forward to working with them, and let's fix it for all of us; right, Senator Hatch?

Mr. HATCH. That is right. Go ahead.

Mrs. HUTCHISON. Yes, I would say to the Senator from Arizona, I was wondering if every State could have the same treatment. Why not have every State get this shielding for their Medicare Advantage? That is 11 million people in this country who would then be helped by a fair assessment of this all over the country.

But let me just point out one other provision. The way they have been shielded is through grandfathering. What about people who----

Mr. McCAIN. And was that shielding done on the floor of the Senate, in open debate and in discussion of the issue?

Mrs. HUTCHISON. Oh, no. Now, amazingly----

Mr. McCAIN. It was done in an office over here, where we still await the white smoke.


Mr. McCAIN. I would say this is probably the classic hometown protectionism that we see in earmarking and benefits that we see in the earmarking process.

But also, I would remind the Senator from New Hampshire, as we have all discussed several times, a year ago last October, our then-candidate for President said: It is all going to be on C-SPAN. Well, the C-SPAN cameras are still waiting outside Senator Reid's offices to go in and film these negotiations so that, as President Obama said, all Americans can see who is on the side of the pharmaceutical companies and who is on the side of the American people.

C-SPAN, keep waiting. We are going to try to get you in.

Mr. GREGG. If I could ask one more question because I have been listening to this debate, and I came over because I wanted to participate a little. I think it has been an excellent and informative debate.

I have been looking at the numbers here, and I know the numbers are big--big--in this first 10-year period--almost $500 billion in reductions in Medicare spending. But I think the point we need to make is that it doesn't end there. It doesn't end there. Those Medicare spending reductions go on into the next decade, too, and over the first two decades of this bill, Medicare spending reductions will account for $3 trillion--$3 trillion. How can anybody argue against what the Senator from Idaho said, which is that this translates into real reductions in Medicare benefits?

Mr. McCAIN. Isn't the vitally important point in this discussion that this massive mountain being carved out of Medicare is not being used to save Medicare? It is creating a huge new entitlement program. So here we are with Medicare going broke in 7 years, and we are taking money out of it in order to create a new program. That is the crime that is being committed here.

Mr. GREGG. The Senator is absolutely right. And the new program, by the way, will not be solvent either. So we are compounding the insolvency of the future, and we are passing that on to our children.

Mr. HATCH. We are taking $ 1/2 trillion out of a program that is going to be insolvent before the end of this decade and we are giving it to another program that is already insolvent.

Mr. GREGG. That will be insolvent.

Mr. HATCH. That will be insolvent. It is almost insane what they are doing. And they wonder why the American people are having such a difficult time, why we have 10 percent unemployed, why the underemployment is 17 percent in this country. Those are people who are trying to get part-time jobs because they can't get full-time jobs. So 17 percent is the real number.

This whole program is about helping low-income people and minorities, when you stop and think about it. That is what Medicare Advantage does. As the distinguished Senator from Arizona has said, they can't afford these supplemental policies on which AARP will make a lot of money if they can kill this program. There are a lot of gaps in traditional Medicare benefits, including high cost sharing and no out-of-pocket limits. That is why 89 percent of seniors have some form of supplemental coverage on top of Medicare. For many low-income Americans and minorities, Medicare Advantage is the only way they can afford the supplemental coverage.

I compliment all of my colleagues here on the floor--the distinguished Senator from Arizona; the distinguished Senator from Idaho; the distinguished Senator from Texas; our only doctor on the floor right now and one of only two in the Senate, Senator Barrasso from Wyoming; and, of course, our leader in the Senate, both on the Budget Committee, Senator Gregg and, of course, Senator Alexander. You guys have really summed this up.

Mr. McCAIN. Could I say again that we have had spirited debate and discussion on this floor, but it is clear the majority of the American people do not support the proposal that is before us, and they do not support meeting in private, mostly in secret, closed negotiations.

Again, I renew our offer to the Democrats and to the administration: Let's get together in a room with the C-SPAN cameras and any other outlet, and let's sit down and do some serious negotiations on the areas we can agree on, which there are many, and let's save Medicare, let's fix this system, and let's do it together in the way the American people want us to--in a bipartisan fashion, not behind closed doors, so the American people can see us work together for a change.

I thank all of my colleagues for their many contributions. We are ready to talk. We are ready to talk, but we won't be driven.

Mrs. HUTCHISON. Mr. President, I would like to return to a point that was made earlier about the President promising, and it being understood by everyone, that if you like what you have, you can keep it. On Medicare Advantage, once again, the CMS has estimated--and I would ask the distinguished Senator from Utah to verify this--that enrollment in Medicare Advantage will decrease by 64 percent under this bill.

Mr. HATCH. A lot of seniors are going to be badly hurt by these cuts, no question, and the poor.

Mrs. HUTCHISON. And 8.5 million seniors would be deprived.

Mr. HATCH. And a lot of them are minorities, by the way. This is amazing to me, how we go through all kinds of demagoguing about low-income people and minorities, and yet they are going to take one of the most important benefits away from them. That benefit is mentioned in the Medicare handbook for 2010, yet they act as if it is not part of Medicare. I can't believe some of the arguments that have come from the other side.

Mr. McCAIN. Could I ask the Senator from New Hampshire, the senior member on the Budget Committee, a person who is well-known for his knowledge of the economy, of the budgetary situation in America, what happens if we pass this massive bill? What happens to America's economy?

Mr. GREGG. Well, my view is this: First off, we know a couple of facts--that we grow the government by $2.5 trillion over a 10-year period when this bill is fully implemented. We also know the tax increases during that period will be approximately $1.2 trillion, tax increases and fees, and they are not going to fall on the wealthy, they are going to fall on the small businessperson trying to create the extra job. We also know there will be an entire sea change in the way people get their health care, that the government will be stepping in between you and your doctor and basically making a decision as to what your doctor can tell you you can have for health care, what the provider will tell you you can have for health care.


Mr. McCAIN. Mr. President, I understand the Senator from Pennsylvania, Mr. Casey, filed an amendment designed to spend $2.5 billion to protect Medicare Advantage benefits for Pennsylvanians. What is going on? What is going on here? Why can't we protect every citizen? That is five States that are ``protected'' and spending extra billions of dollars. Let's have an amendment that every State is treated the same. Let's do that. I tell my colleagues, I intend to introduce an amendment that will do so. That will take away the special exceptions that are taken for special States to have special influence around here.


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