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Public Statements

Addressing the Fiscal Cliff

Floor Speech

Location: Washington, DC


Mr. GARAMENDI. Mr. Speaker and colleagues and the general public, there has been a lot of discussion in the last several days about what to do with the fiscal cliff. Is it a cliff? Is it not a cliff? Is it a slope? Is it the end of America as we know it, or whatever. But in this debate, there are a few things that are absolutely critical--tax policy, the President has laid it out very, very clearly, as did the election. We're going to do tax reform, yes. And it's time for those at the upper end of this wealthy country to pay their fair share. So the President has made it very clear: we're going to raise the rates on those making over $250,000 a year. And by the way, we ought to be very clear understanding what that means. That means 100 percent of Americans get a tax break on the first $250,000 of income. Over that, yes, they'll pay a higher rate, marginal rate, for that over the top.

Hey, but what I really want to talk about today with my colleagues who will be joining me in the next few minutes is another part of this debate, and that is on the reductions in Federal expenditures. What's the best way to do it? How are we going to reduce Federal expenditures? There are those that say take on the entitlements. Make the seniors pay more. End Medicare as we know it. Turn it into a voucher program. Or maybe turn it into a premium support program which, as a former insurance commissioner, I know exactly what that means. That means if you're over 65, hey, you're going to get to go buy insurance from the rapacious health insurance companies. Good luck. Premium support, just another way to end Medicare as we know it. Voucher programs, another way to end Medicare as we know it.

In the last election, this was a central part of the debate here in America. And it was clear: no way, no how are we going that way. There are others who proposed, well, why don't we just raise the age to 67? Interesting, very interesting proposal. Well, it will save Medicare a little bit of money, but what does it do to those people who are 65 to 67 years of age? It denies them the opportunity to get affordable health insurance in the Medicare program and simply throws those people off to the wolves, again, to the rapacious health insurance companies. And by the way, those are exactly the people that the health insurance companies don't want. They're the people who have higher expenditures. They're the ones who are beginning to get health issues, so the health insurance companies don't want them. How are they going to get insurance? They're going to get insurance at a very high cost, if at all.

And, oh, by the way, there are those that want to do away with the Affordable Health Care Act. In the Affordable Health Care Act, there's this thing called the Patients' Bill of Rights. The Patients' Bill of Rights guarantees that insurance companies cannot deny you based upon a preexisting condition. However, they can charge differential rates based upon age. So that notion of somehow saving Medicare by keeping people from getting Medicare is the back way to go, and it is a nonstarter, at least with me and I think many of my colleagues.

There are things that can be done in Medicare, and we're going to talk about those things that we can do here with our colleagues today. We also want to pick up the issue of Social Security. Let's be very clear: the deficit situation faced by the United States is not a Social Security problem. It is not a Social Security problem. Social Security is stand-alone. It is not part of the American deficit. It's an issue that over the years has come back before the American public. The Congresses in the past have dealt with it, extended the viability of Social Security for years and years, and this Congress does not need to deal with this problem this year or even next year in the 113th Congress. Down the road it must be dealt with--and there are numerous ways it can be--but to bring Social Security into the deficit debate is only to cloud this debate and to make it far more difficult for us to find a solution.

Now, my Democratic colleagues and I and the President have made it very clear we understand the necessity of solving this problem and we're willing to compromise. The President has put on the table a very complete, detailed program about how we can deal with the deficit both in the short term and in the years ahead. And we need to proceed with that. Unfortunately, it was just simply dismissed and a new--well, not a new--actually a rebaked, redone, rehashed proposal was put on the table by our Republican colleagues yesterday, one that really doesn't move us toward a compromise. We need to get there. We need to get a compromise under way. So let's see if we can figure out how to do it.

I see several of my colleagues here. I'm not sure

which one was first up, but it looks like it might be Florida.


Mr. GARAMENDI. Well, you're absolutely correct about that. The proposal to cut Medicare benefits is a nonstarter. There are things that can be done in Medicare to reduce the cost, and much has already been done.

I would like to ask my colleague from the great State of Michigan to join us. Mr. Curson is a new Member of Congress, came in a special election about a month ago. Welcome. We are delighted to have you join us.


Mr. GARAMENDI. Mr. Curson, thank you so very much for your thoughtful discussion of the age issue--it's a profoundly important one--and also bringing up the issue of what is the cost of Medicare administration compared to the private health insurance companies. You're quite correct. Medicare is a very efficiently run program, very efficient in collecting the money and paying the bills, far more than you would ever find in the private health insurance sector, perhaps by a factor of 4--3, 4, maybe even 5 in some cases. Also, Medicare has had an extraordinary run of keeping the costs down.

I'd like now to call upon Mr. Joe Courtney of Rhode Island--Connecticut. I've made two mistakes today about my colleagues' locale.

Joe, it's yours.


Mr. GARAMENDI. Mr. Courtney of the great State of Connecticut, thank you very much for bringing this information to us.

Your chart is a dramatic one, when you consider the period of time and the extraordinary reduction in the inflation rate in Medicare. If you had another line on that showing the general inflation in health care for the general population, it would actually be above Medicare, that entire slope all the way down.

And it's significantly above it. So what's happened--in part, I think, you're correct; there may be other forces involved here, but certainly you can see the effect of the Affordable Health Care Act. And you identified very well some of the critical cost savings that are in that. And it's well worth repeating it, which I will do with you. And we ought to go back so the public comes to understand what was in the Affordable Health Care Act.

For those over 65 that are in Medicare, those changes are critically important. First of all, stay healthy. If you want to save money on hospitals and doctors, stay healthy. And so you have an annual wellness visit. I think something like 50, 60 million Americans have been able to take advantage of that free annual visit. You've got high blood pressure? Well, let's take some blood pressure medicine. You're headed for diabetes? Here's a dietary program or exercise program. We can deal with those. You keep people out of the hospitals. The hospital infection rate, the other one you talked about, very powerful. I hear from hospitals in my district, and I'm sure my colleagues do also. They don't want that readmission because that comes right out of the hospital's pocket. And also there's a penalty.

So there are many, many issues here that are involved in the Affordable Health Care Act that have caused that slope downward to continue. Enormous savings to Medicare. Because when you look at the Medicare issue, it's a projection for 10 years. And the projected rate 2 years ago was 5, 6 percent. And where are you, down in the 2 percent range now? Those are multibillion dollars a year the American public will not have to pay in taxes and increases in expenditures. So these things begin to add up. But there are many, many more savings.

I don't want to dominate all this time. I see that other of our colleagues have come and joined us.

Peter Welch from Vermont.


Mr. GARAMENDI. I think it really would add cost. We discussed earlier that the Affordable Health Care Act has a very powerful cost-saving mechanism called Staying Healthy. And that is the prevention programs. If you move that age from 65 to 67, you're going to have a significant population of seniors who will not have access to that preventative medicine program. It's not going to be there for them. So the potential for them to develop long-term, debilitating diseases increases. And when they get to Medicare, they will be much more expensive, to say nothing of what happens to them during that 2-year period when they can't get to Medicare.

You said something earlier on and I'm going to go back to this. You talked about what happened before Medicare--the 50 percent of the population of seniors without medical insurance, the poverty rate. When you said that, my mind flashed back to when I was a young man in the 1950s--actually, not even a teenager--my dad took me to the county hospital. We were ranchers out in the boondocks of California, and nobody had insurance who was in their senior years. The county hospital sticks in my mind as the reason for Medicare. It was beyond horrible. There was just a row of beds, the most horrible odor in that ward--people dying. It was so compelling.

And today, there are issues out there. But we have seen the population of seniors healthy, living longer--20 years longer than they were just 45 years ago--50 years ago now. This is so important to seniors. And it is the Democratic Party that has stood for Medicare all of these decades. And we're not going to let it go. We're not going to let Medicare go. It is a foundation of our humanity and our compassion as Americans for all because all of us want to live long enough to get into Medicare.

Reforms are possible. We've talked about several of them here today. I know that our colleague from Michigan spoke earlier. If you'd like to come back in and talk about this, we'd welcome you. We'll go back here for a little longer.

Mr. Curson.


Mr. GARAMENDI. Well, there are certainly a series of things that we know we can do to reduce the cost of Medicare. Some of those are already in place. They've been brought forward by the Affordable Care Act. Others are yet to be done. The prescription drug issue is out there, enormous savings, $160 billion or $150 billion right there over a 10-year period.

The fraud in the system, some of that was dealt with with the Affordable Care Act, but there's much more that can be done. There are fraudulent billings for durable medical equipment as well as other kinds of services that are provided. Those need to be addressed. The systems that are being put in place, that is, moving away from fee-for-service, will significantly address that.

In the area of hospitalization, again, there are programs that are viable, that are not yet implemented, that are not part of the savings that have already been calculated, for example, programs on the dual eligibles. The dual eligibles are those people that do not have sufficient income, but are already quite ill that may be 20 years of age, and they're getting Medicaid as well as Medicare. There are savings that can be found in the way in which we organize that.

For those seniors that are on Medicare, an organized health care system that keeps them healthy, that is, taking the prevention program a step further, or two or three steps further, so that there is a continuity of care and there is a follow-up, maybe a social worker or simply somebody on the phone saying how are you doing; are you taking your medicine; are you able to get the food that you need so that people can stay healthy. A healthy population significantly reduces cost.

The use of the Affordable Care Act--not just for Medicare, but for the total cost of the system--has a very, very powerful cost reduction in it; and it's called ``insurance.'' Forty million Americans are going to be insured. That means that those people are less likely, far less likely to go to the emergency room to get their care.

The Affordable Care Act also provides for clinics. Where a private doctor may not be available, a clinic would be available. So all of these things provide more care to people and, in doing so, reduce the cost of the extraordinarily expensive care that comes from when people don't get continuing services of health care.

So Medicare is a huge issue before all of us. On the Democratic side, we're saying, yes, there are savings available in Medicare, we should take advantage of those, but we're not going to cut benefits. And we're not going to privatize Medicare or end Medicare as we know it. There are other things that we can do, we're willing to do it; let's compromise on those things that make sense without destroying the Medicare program.

Not on our watch are we going to see the benefit package reduced in such a way as to harm seniors--no way. And no way are we going to end Medicare as we know it. We'll draw a line in the sand; we'll save the money; we'll put that cost curve even on a better trajectory, and that is a very, very formidable and positive trajectory there.

Let's spend just a moment of time, as we come towards the end of our time, on Social Security, which many people--well, not on the Democratic side, but let's talk about Social Security and should it be on the cutting table here, should it be part of the deficit reduction.

Mr. Courtney.


Mr. GARAMENDI. Well, you are certainly well stating my position and I believe the position of our colleagues and I believe of the President. Social Security is not part of the current deficit problem. It is an issue. We'll have to deal with it at any time between now and the next 7, 8 years. And we can. It's been done before.

At least three times in my memory, Social Security has been adjusted. One was discussed earlier with the issue of the COLA. That's been adjusted. There are things that can be done to deal with Social Security, but that is a debate separate and apart from the deficit and the fiscal cliff debate.

The fiscal cliff debate is a tax issue, and it's also a spending issue. Today we focus largely on the issue of what are we going to do about Medicare, a big part of the Federal expenditures. And our argument is this: we're here to protect Medicare for seniors, period. We're not here to cut the benefits for seniors. We're here to see to it that Medicare, which has been a program for seniors since 1964-65, is going to continue to be there for seniors as well as the benefits package that's there. There are reforms and changes that can be made to reduce the cost of Medicare but not to reduce the benefits. We've talked about many of those.

So here's where we're coming. Within that area, there are very, very significant savings that can be made. The prescription drug benefit, $150 billion over 10 years. Other issues having to do with keeping people healthy, to extend their health care, issues having to do with how much we pay for certain services, fraud and abuse. All of those things could add up to the potential savings--not the potential savings--to the savings that the President has called for, which is somewhere in the range of $300 billion over 10 years--additional savings over and above what has already taken place in the Affordable Care Act. And we've seen in this decline in the inflation rate in health care some of the effects of the Affordable Care Act. So there are things that can be done and will be done.

Social Security is not a part of this debate.

But I also want to point out here in the last closing minutes of this a couple of things that I think are very, very important. The President has put forth a very detailed program calling for $1.6 trillion in additional revenue over 10 years; and that is money that is to come from the expiration of the George W. Bush tax cuts for the top 2 percent.

Now I want to make this clear. I said this earlier--yes, it's worth repeating because it's not said very often--every American taxpayer gets a tax reduction. The superwealthy to the very minimum taxpayer in this Nation gets a reduction in what the President is proposing. And that is to continue at the current tax rate for those with under $250,000 adjusted gross income. For those who have income over and above that, they get that tax reduction. And above that, they're going to pay an additional amount up to 3.9 percent in two different tranches. So everyone gets a tax break.

But those superwealthy, the 2 percent, they're going to pay more, and that will amount to a substantial amount of money over 10 years. And, frankly, they've had 12 years of really low, low taxes--the lowest taxes, really, ever since the 1930s.

The President has also proposed something that's very important. We talked about this last week. I want to talk about this again the next time we come here. And that is, how do we grow jobs? How do we put people back to work?

The President has proposed an additional $50 billion. He did this more than a year ago in the American Jobs Act, and he's put it back on the table: $50 billion in infrastructure. Let's build the foundation. That deserves a lot of discussion; and, frankly, it's something we ought to enact here right away and put people back to work.

There are other savings that he's proposed over the course of the next 2 years. We don't have time now. I notice my time has just about expired, if you would like to take a final shot at this, Mr. Curson.

And by the way, this is the first opportunity I have had to spend part of my hour with you. You are a very articulate spokesperson for the working men and women in this Nation. You know the issues of Medicare and Social Security so very, very well. And I know, coming from Michigan and Detroit, you know the need to build the jobs portion of our economy. So why don't you close, and then I will wrap this up.


Mr. GARAMENDI. How about next week? We'll come back to the floor next week, and we'll pick up the issues of infrastructure, of jobs and the like.

This week we need to focus on what has been put on the table by the Republicans and the Democrats on how to deal with the fiscal cliff, dealing with the issue of Social Security and Medicare. Social Security--no, not part of this problem. It is something we'll deal with perhaps in the next Congress or even in the one beyond that because we do have time to deal with Social Security.

Medicare--for those who want to privatize Medicare, end it as we know it with a voucher or a premium support program--no. No way, no how are we going to go there.

For those that want to work on changing the way in which Medicare operates to get savings, such as negotiating drug prices, dealing with fraud and abuse, the various payment systems that are in Medicare, all of which can save money and to continue the work of the Affordable Care Act, and the way it has already brought the inflation rate down from the 4 percent, 5 percent range down into 2, 2.5 percent range, this is an extraordinary savings right here. And that will be calculated in the years ahead. And, frankly, this will add up to hundreds of billions of dollars in the reduction and the projected cost of Medicare in the years ahead.

So we're making progress. We've got work to do, and we're prepared to do it. The Democrats are prepared to put together a compromise. Let's get to work on it. The American public expects us to do that. And we can, and we will.

With that, Mr. Speaker, I yield back the balance of my time.

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