[Pages S17315-S17330]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

THE 7-YEAR BALANCED BUDGET RECONCILIATION ACT OF 1995--CONFERENCE
REPORT

The PRESIDING OFFICER. The Chair announces that the Senate has
received the conference report from the House, and the clerk will now
state the report.
The assisted legislative clerk read as follows:

The committee on conference on the disagreeing votes of the
two Houses on the amendment of the Senate to the bill (H.R.
2491) to provide for reconciliation pursuant to section 105
of the concurrent resolution on the budget for fiscal year
1996, having met, after full and free conference, have agreed
to recommend and do recommend to their respective Houses this
report, signed by a majority of the conferees.

Thereupon, the Senate proceeded to consider the conference report.
(The conference report is printed in the House proceedings of the
Record of November 16, 1995.)
The PRESIDING OFFICER. The Senator from Nebraska.

point of order

Mr. EXON. Mr. President, I raise a point of order that the sections
designated on the list that I now send to the desk violate the Byrd
rule, sections 313(b)(1)(A) and (D) of the Congressional Budget Act.
The list follows:

EXTRANEOUS PROVISIONS IN H.R. 2491
----------------------------------------------------------------------------------------------------------------
Subtitle and section Subject Budget act violation Explanation
----------------------------------------------------------------------------------------------------------------
Subtitle M Sec. 13301................ Exemption of physician 313(b)(1)(A)........... No deficit impact
office laboratories.
Sec. 1853(f) of the Social Security Application of 313(b)(1)(A)........... No deficit impact
Act as added by Section 8001 of the antitrust rule of 313(b)(1)(D)........... Merely incidental
bill. reason to provider-
sponsored organization.
----------------------------------------------------------------------------------------------------------------

Mr. ABRAHAM. Mr. President, pursuant to section 904 of the
Congressional Budget Act, I move to waive the point of order for
consideration of the antitrust provisions that have been raised in this
point of order.
The PRESIDING OFFICER. Under the Budget Act, there is now debate on
the motion. Who yields time? The Senator from New Mexico.
Mr. DOMENICI. On behalf of the majority leader, I ask unanimous
consent

[[Page S 17316]]
that at 8:15, the Senate proceed to a vote on the motion to waive,
without any further action or debate, and that the time be equally
divided between now and 8:15 between the proponents of the point of
order and the proponents of the waiver.
The PRESIDING OFFICER. Is there objection?
Mr. KYL. I object.
Mr. BRADLEY. Reserving the right to object.
The PRESIDING OFFICER. Objection has been heard. Who yields time?
Mr. KYL. If the Senator from New Jersey wishes to speak, I will
reserve the right, but I intend to object until Senator Hatch arrives.
The PRESIDING OFFICER. There is an hour for debate. Who yields time?
Mr. EXON. Mr. President, was there an objection?
The PRESIDING OFFICER. The Chair heard an objection from the Senator
from Arizona.
Mr. DOMENICI. Mr. President, I would like to assign, from the
standpoint of the majority, the privilege of debating the opposition to
the point of order to be led by Senator Kyl, and he can direct the time
to whomever he desires in reference to our time on this side. If he
will reserve me a minute or two, I would like to join him in the
argument.
Mr. BUMPERS. Parliamentary inquiry.
The PRESIDING OFFICER. Who yields time?
Mr. EXON. He has requested a parliamentary inquiry, which I do not
think requires a yielding of time.
Mr. BUMPERS. Parliamentary inquiry. Is this a point of order? Are we
going to be voting on a motion to waive the point of order and will
that require 60 votes, Mr. President?
The PRESIDING OFFICER. The vote does require 60 votes. Who yields
time?
Mr. EXON addressed the Chair.
The PRESIDING OFFICER. The Senator from Nebraska.
Mr. EXON. Mr. President, I yield myself 5 minutes off the time that I
have under my control, and will the Chair advise me how much time the
Senator from Nebraska controls?
The PRESIDING OFFICER. The Senator from Nebraska controls 30 minutes.
Mr. EXON. Mr. President, I have been fascinated and horrified by the
press reports about the horse trading that went on to win the support
for the Republican budget. I am not speaking about wooing recalcitrant
Republicans who strayed from the party line. No, I am looking at some
of the sweeteners that were loaded into this bill to keep the medical
establishment at bay and to pay the American Medical Association for
their support of the Republican budget.
This conference report is groaning with extraneous giveaways to the
medical establishment. They do not only violate the Byrd rule, but they
violate every sense of decency and fair play. The conference report
exempts physicians' offices and laboratories from the Clinical
Laboratory and Improvement Act of 1988.
It is clear that this is a violation of the Budget Act. It is
extraneous, in addition to being bad policy. Antitrust regulations are
turned on their heads in this conference report just to boost
physicians' salaries. The conference report exempts certain groups of
health care providers from the most basic antitrust violations against
price fixing. This is also a violation of the Budget Act and is likely
to impair competition and raise costs for non-Medicare health care
purchasers.
It is appalling that when our seniors, our poor, our disabled, and
our children are being asked to sacrifice basic health care, the
Republicans are trying to enlarge special interest giveaways to the
Nation's physicians.
The provisions do not belong in this fast-track reconciliation bill
and are a violation of the Byrd rule. I urge my colleagues to vote
against the motion to waive this well-founded point of order.
Madam President, at this time, I ask for the yeas and nays.
The PRESIDING OFFICER (Mrs. Hutchison). Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
Mr. EXON. Madam President, I reserve the remainder of my time.
The PRESIDING OFFICER. Who yields time?
Mr. EXON. Madam President, since there are no other Members seeking
recognition at this time, I yield 5 minutes of my time to the Senator
from Arkansas.
The PRESIDING OFFICER. The Senator from Arkansas is recognized for 5
minutes.
Mr. BUMPERS. Madam President, it is not unusual when I go home and
visit with some of my wealthy friends--and I do have some wealthy
friends--they say, ``The only objection I have to you Democrats is you
are constantly engaging in class warfare. You are always talking about
the wealthy.''
I repudiate that idea, but I would like for my colleagues to look at
this chart for just a minute. This is a quote from David Gergen--one of
Ronald Reagan's right-hand men when he was President--from an op-ed
piece that he wrote in this week's U.S. News and World Report. Without
straining your eyes, I will tell you what he said about this bill we
are debating tonight. Eighty percent of the tax breaks in this bill go
to the wealthiest 20 percent of Americans. Eighty percent of the
spending cut burden goes to the poorest 20 percent. Now, you talk about
class warfare. There is class warfare. It violates every principle I
ever learned as a Methodist Sunday school boy. It violates every
principle I have ever held dear, and the very reason I came to the U.S.
Senate. Madam President, let me say something about the wealthy people
of this country. They do not like this. Seventy percent of the people
of this country say they do not want a tax cut until the budget is
balanced. Why are we going against what 70 percent of the people say?
Last fall, when people were voting, Madam President, most did not
have a clue what was in the Contract With America. And I can assure you
they were not voting for this. They were not voting to penalize the
poorest 20 percent of the people in America. They were not in favor of
depriving a million children in this country of an education. They were
not voting to put another million people in poverty, which this bill
does. They were not voting to cut school lunches, which is the only
decent meal an awful lot of children in this country get. They were not
voting to savage Medicare and make the elderly people of this country
pay it. They were not voting to savage Medicaid. In my State, Medicaid
will be cut 33 percent, Madam President. We will not have a Medicaid
program.
The people of America were not voting to slash the Earned Income Tax
Credit for people who are trying to work and stay off welfare. What are
we doing? We are cutting that $32 billion.
So I remind my colleagues on the other side of the aisle, when the
American family gathers around the dinner table in the evening, what do
they talk about? What do they say they love? Not the Mercedes in the
driveway. Not that posh office downtown or that magnificent farm out
back. They love their children. That is who they want us to protect.
What are we doing? We are savaging the children of this country. For
what? So that the biggest corporations in America get a break. I yield
the floor.
Mr. HATCH. Madam President, we are trying to accommodate Members
around here. And there is no use kidding, I am very upset about this
point of order. This is not going to be the last time we mention it
either. But I want to accommodate everybody around here. We ought to
have at least a 2-hour debate on the thing because it is not easy to
explain, but it is easy to understand. I have to tell you that I think
even my colleagues on the other side might understand. But the fact of
the matter is that this point of order is wrong. I personally feel very
badly about it because what we are doing here is we are allowing the
rule of reason in some areas and not allowing it in others. It is very
unfair, it does not work right. We are happy to enhance bureaucracy but
we are not happy to enhance individuality. I think we can clarify it
for anybody in just a few minutes. But we want to accommodate those who
want to get out of here and, frankly, I think we can put a lot of what
we have to say into the Record.
Let me address this point of order against antitrust rules relating
to provider-sponsored organizations--PSO's, if you will--and health
care groups

[[Page S 17317]]
that contract with them to provide Medicare services. These provisions
would grant antitrust relief to these two different entities by
subjecting their conduct to the rule of reason, rather than the per se
illegal rule.
Let me be clear about what this language would do. This is not an
antitrust exemption. Under the rule of reason, the conduct of the PSO's
and their subcontracting health care groups will not be legal if it is
designed to fix prices, divide markets, or exclude competitors.
Instead, their conduct will be illegal if it is anticompetitive, but if
it is competitive, leads to efficiency, and produces lower prices for
health care, it will survive antitrust challenge, as it should.
This provision that we are about to strike out of here is one of the
few that really saves an awful lot of money in health care and flies in
the face of bureaucratizing the process, which I thought we defeated
last year. We believe that this reform--which is necessary only because
the Department of Justice and the Federal Trade Commission have
overzealously enforced the antitrust laws--is central to the savings we
anticipate in our Medicare reforms. Right now, because of these
enforcement policies, groups of doctors cannot form, decide on a fee
schedule, and negotiate with anyone over providing health care
services, if this is knocked out. This knocks out of the market a
potentially new class of competitors with low overhead and little or no
bureaucracy, who can make these other groups bring prices down.
The Congressional Budget Office scored the savings to be generated by
the House and Senate Medicare reform bills at between $34.2 billion and
$50.4 billion over 7 years.
CBO did not break out how much of this savings was attributable to
the creation of health care provider groups that could contract with
PSO's, and the importance of the antitrust reform needed to encourage
the groups to form. The CBO noted the creation of PSO's in these groups
would have an impact on Medicare outlays and that is all that is needed
to meet the express language of the Byrd rule.
Further, since this bill is creating two whole new classes of
competitors in the Medicare market, and the antitrust provisions are
critical to encouraging their formation, it is clear that these
provisions are critical to producing the billions of dollars in savings
we are counting on for innovation and competition. I do not think that
anyone can seriously contend that these provisions have no budgetary
impact.
The second argument that one might raise against these provisions is
that they are somehow incidental to reconciliation. This aspect of the
Byrd rule is designed to prevent the addition of provisions that have
nothing to do with the budget. The antitrust provisions clearly satisfy
the Byrd rule. The rule has nothing to do with the larger changes in
all antitrust law.
In fact, it does not change antitrust law at all, only the
administration's enforcement. More importantly, the antitrust
provisions are expressly limited only to conduct that is necessary to
provide health care services under Medicare contract or plan. It has no
application outside of the Medicare context, and any attempt to use
information gained in Medicare context beyond the limits of that
program--what some people call a leakage or seepage problem--would be
illegal. Any conduct occurring in the Medicare context that is just a
sham for price fixing or boycotting would still be illegal under the
rule of reason.
I suggest that those who would use the Byrd rule to stop these
provisions are not concerned, Madam President, about budgetary impact
or incidental provisions. Instead, they are interested in suppressing
competition in the health care market and reducing Medicare costs.
We should be frank. The status quo helps large hospitals and
insurance companies and HMO's. These antitrust provisions that are in
this bill that they are trying to rule out of order may cut down on
their profit margins by introducing whole new classes of health care
providers into the marketplace. New market actors will spur competition
efficiency and lower costs.
When we are fighting to find ways to reduce Government costs and the
Government's tax burden, why turn away an attractive mechanism to make
the markets work better and to reduce the budget?

The fact is per se illegal activity will still be illegal. These
entities would have to live within the rule of reason. If they do not
and they do not increase competition, increase efficiency, and reduce
costs, then they are not going to be able to function, and they should
not be.
The fact of the matter is that this point of order is wrong, and I
hope that we will vote to waive the point of order.
Mr. EXON. Mr. President, I yield 3 minutes to the Senator from
Florida.
Mr. GRAHAM. Thank you, Madam President.
As I read the front cover of the document which has just been
presented to us, Balanced Budget Act of 1995, Part 1 of 2--Part 2
apparently has not yet arrived--the question arises, why will I vote
against this proposition?
It is not, Madam President, because I am opposed to a balanced
budget. I am, in fact, strongly supportive of a balanced budget, and
every occasion I have had an opportunity to advance that cause I have
done so.
I frankly commend the Republicans for having presented us an
alternative which purports to achieve that goal of balanced budget
because it will provide a significant point of debate and dialog as to
how to achieve that goal.
However, Madam President, I do not feel that this legislation
presented tonight will accomplish the objective of balanced budget for
two primary reasons. One, just as in foreign policy, I do not believe
this Nation can achieve an important long-term domestic policy goal
unless that goal is broadly shared, unless there is bipartisan support.
The fact is, there is no bipartisan support for this provision. There
has been no attempt to secure bipartisan support. No Democrats were
sanctioned into the conferences which led to the production of this
legislation. No Democratic ideas were solicited for inclusion.
Second, this will not achieve the goal of a balanced budget over the
next 7 years because it is fundamentally unfair and will soon be seen
to be unfair by the American people and rejected.
I am going to concentrate my comments on fairness on only one section
of this multihundred-page bill, Part 1 of 2, goes to 966 pages. That is
the sections that relate to Medicaid.
First, the statement is made that this legislation reduces Medicaid
spending by $163 billion over the next 7 years. Madam President, that
is not true. In fact, this legislation reduces Medicaid spending by
almost $400 billion over the next 7 years.
What is the difference? The difference is because this legislation
removes virtually all of the current requirements on States to make a
significant contribution towards the health of their poor, their
disabled and their frail elderly.
Second, this allows for future manipulation of the Medicaid Program.
We worked hard in this Senate to eliminate the abuses that had become
so rampant in the disproportionate share hospital program. This
legislation allows all those abuses to return. This legislation, in
fact, rewards those very States that have been the principal abusers of
the disproportionate share program.
Madam President, for those and many other reasons that we will find
in these 966 pages, this proposal fails to meet the duel test of
bipartisanship and fairness necessary for its sustained achievement of
the goal of the balanced budget.
Madam President, we are here debating a bill that nobody has
received. Even for those who may have a copy, it would be impossible
for them to have possibly read the legislation from cover to cover.
And yet, this is one of the most significant bills to come before the
Congress. This is a bill that makes up to $1 trillion in reductions to
our Nation's budget--including $256 billion in Medicare reductions and
$163.5 billion in Medicaid reductions--over the next 7 years.
I rise today to speak to the best of my knowledge about some of the
provisions in this bill. Of course, the ``best of my knowledge'' is
limited by the amount of information we have managed to obtain, some of
which our office has had to get from lobbyists who always seem to get
such materials before the rest of the Congress.

[[Page S 17318]]

Due to time limitations, I will focus on the massive reductions or
$420 billion in Federal cuts that will be made in this bill to our
Nation's Medicare and Medicaid programs which are integral parts of our
Nation's health infrastructure.

medicaid cuts even higher due to state-federal combination

The first point that has been neglected about this budget deal are
that the real Medicaid reductions are more in the neighborhood of $400
billion over the next 7 years. Part of this figure comes from the
$163.5 billion in Federal reductions to Medicaid. However, an often
overlooked but just as significant provision is the language in the
bill that guts the matching rate requirements of States.
This reduction will have the effect of reducing another $200-plus
billion in State funding over the next 7 years to the Medicaid program.
How does this work? At present, States such as New York have to match
a Federal Medicaid dollar with a State Medicaid dollar. No longer.
According to the revised State matching requirements, New York would be
allowed to match a Federal Medicaid dollar with just 67 cents--a 33-
percent reduction.
The effect of the change to the matching rates across the Nation will
be a $200-plus billion reduction in State funding to Medicaid.
Moreover, the conference agreement eliminates two provisions in the
Senate bill that were agreed to unanimously in the Senate Finance
Committee. These amendments would have continued to prohibit the gaming
of the Medicaid System through the use of provider taxes and prohibited
States from supplanting current State health expenditures with Medicaid
dollars.
The conference committee agreement encourages States to go back to
the days of fictitious accounting and gaming that in the past
effectively raided the Medicaid Program.
The effect of this policy under a block grant is not to raid the
Federal treasury but to make the State matching rate illusory at best.
In fact, the conference report effectively makes Medicaid a general
revenue sharing program.
It is no wonder that some of our Nation's Governors are clamoring and
cheerleading the destruction of the Medicaid Program. I have a warning
for them, or more accurately, a proverb for them. The proverb goes as
follows: ``Fish see the worm not the hook.''
The Governors who are anxious to gobble up these block grants and
illusory matching rates will feel took in the future when their
economies stumble, when an epidemic strikes, when a nature disaster
hits, when inflation creeps up again, or when their populations grow.

Nation's Low-Income Elderly At Risk

Another often misunderstood provision of this legislation is the
impact that it will have on our Nation's low-income elderly.
Let me emphasize that the Republican bill repeals the current law
guarantee of payment of the Medicare Part B premiums on behalf of
elderly Americans with income below the poverty level--$622 per month
for an individual.
Although the Speaker of the House claims the bill ``provides that
senior citizens at the poverty level and below have all of their Part B
premium paid for by the taxpayers--100 percent,'' the fact is that, no
poor senior citizen has a guarantee to any coverage or assistance
whatsoever.
States would be asked to set aside a certain percentage of their
program spending each year to pay for Medicare premiums, deductibles,
and coinsurance on behalf of low-income elderly. However, this set-
aside will be sufficient to cover only about 44 percent of the costs of
Part B premiums for those now eligible by the year 2002.

Nursing Home--Liens of Family Homes

Another provision that was unanimously agreed to in the Senate
Finance Committee was a provision that protected spouses having liens
placed against their home or family farm. Incredibly, this provision
was also dropped by the conference committee.
As a result, the conference agreement repeals current law protections
against the use of liens and expressly authorizes States to impose
liens on the home or family farm of a beneficiary, even when the spouse
is still living in it.

unfairness of medicaid cuts and formula

Finally, I want to raise some policy questions that the bill creates.
First what is the policy justification for $163.5 billion in Medicaid
reductions? This provides for just a 1.9 percent increase in Medicaid
spending per person over the seven year period and is far less than the
7.1 percent the Congressional Budget Office projects private sector
spending to increase.
Second, what is the policy justification for arriving at the Medicaid
formula in the bill? Can anybody possibly explain how the fiscal year
1996 State-by-State allocations are arrived at? Dollar figures are
stated in law. How were those numbers arrived at?
Clearly, one impact is to reward those States that have extremely
high share of disproportionate share in the past. Some of those States
abused the Medicaid Program and will be rewarded for that abuse in the
new Medicaid formula.
At one point, the Senate Finance Committee staff had proposed that
States with excessive disproportionate share payments would lose those
excess payments. The Senate Finance Committee voted to cap those
payments at 12 percent.
That provision was deleted, and instead, States are now rewarded for
their excesses and--in some cases--their abuse.
These States will have those funds permanently cemented in their base
allocation and allowed to increase them well into the future. What is
the policy rationale for this?
Whatever the rationale, the effect is to apportion funding in a
manner that is fundamentally unfair to those States that did not scam
the Medicaid disproportionate share program, those States that are
growing and those States that have been efficient in the past.
In Florida's case, we have a larger population than either
Pennsylvania and Ohio and an elderly population that is 40.7 percent
greater than Pennsylvania and 79.2 percent greater than Ohio, yet will
receive less money over the next 7 years from Medicaid than either of
those two States.
Florida has 5.4 percent of the Nation's population, 8 percent of the
Nation's elderly population but will receive just 4.2 percent of the
overall Federal Medicaid allocation between fiscal year 1996 and 2002.
If Florida were to just receive its population share of money, it
would receive $42.7 billion instead of the $33.0 billion allowed in
this bill, a $9.7 billion disparity or loss to Florida over the 7-year
period.

other problems

For all these reasons and for numerous others--such as the conference
committee's level of Medicare cuts on our Nation's elderly and the
danger and exposure that Medicare beneficiaries will be subjected to
due to watered down emergency care managed care standards, I cannot and
will not support this legislation.
I would like to turn the Senate's attention from Medicaid and
Medicare for a moment to another important issue before the Senate
tonight.
Madam President, when the Senate votes on the reconciliation bill
shortly, there will be one important issue which risks being lost in
the enormity of the Medicare cutting, Medicaid gutting, tax cutting,
and budget balancing package.
That issue is welfare reform.
The effrontery of burying such a monumentally important matter in the
middle of a massive Medicare, Medicaid, Tax Code, and budget overhaul
speaks for itself.
The welfare reform component of this reconciliation bill deserves
strict scrutiny instead of token consideration.
My support for sweeping change in our Nation's welfare system is a
matter of record, and as recently as September 19, 1995, I joined with
86 of my colleagues in supporting the Work Opportunity Act of 1995,
Senate bill 1120.
I voted in support of this bill, even though I had serious
reservations, in order to keep the welfare reform effort in this
Congress alive.
Unfortunately, the conference agreement moves welfare reform in the
opposite direction. The pending legislation is worse than what we had
to consider 2 months ago.
Madam President, I support welfare reform. I want to see Congress
pass a welfare reform measure, and I want to

[[Page S 17319]]
see the President sign welfare reform legislation. But this bill
deserves neither.
Welfare reform, when it is done well, works and works well.
Florida boasts of two very successful welfare pilot projects, the
largest in America in instituting a ``time limited benefit.'' Florida,
in fact, has been one of the pioneers in the ``two years and you are
out'' approach that is mirrored in the pending legislation.
But, Madam President, these pilots are succeeding because there is a
front-end investment in the lives of those affected by the program
change.
Whether it is day care, job training, temporary transportation
assistance, or health care, the welfare recipient is given a hand up
instead of a hand out.
I visited the program in Pensacola, FL. Earlier this year President
Clinton met some of the participants that I met, and he touted the
program.
Madam President, the conference agreement before the Senate, as it
pertains to welfare reform, is a mixture of good news and bad news.
The good news is that the conference agreement no longer treat
education as welfare. We have Congressman Clay Shaw and others to thank
for that improvement.
Thankfully, the welfare reform legislation no longer kicks legal
immigrants who pay taxes and are eligible for Federal student loans or
grants, out of school.
This change assures 21,000 students in universities, colleges, and
community colleges in Florida that they can continue to study and train
in order to provide for their families and enhance our Nation's
productivity.
Further, the conference agreement renounces the previous position of
the Senate where deeming would occur past the date of citizenship. That
provision appeared unconstitutional on its face, and fortunately, it
was dropped.
But, Madam President, I am sorry to report that there is an
overwhelming amount of bad news emerging from the conference on welfare
reform.
First, the formula to allocate funds to the States continues welfare
as we knew it. It treats poor children differently, depending upon
which State they live in.

The conference formula says that if your State spent a lot in the old
days, and thus built incentives to keep people on welfare, you will be
given a leg up on every other State under block grants.
That is how it is possible, for example, that the State of Michigan
would be given $217 million more, each year, than the State of Florida,
which has a population that is 4.5 million greater than Michigan's
population.
The conclusion is simple: the formula adopted by the conferees is
flawed, if not rigged.
The conferees had an option: adopt a fair share allocation which
treats children the same regardless of their ZIP codes. I offered such
an amendment 2 months ago.
Instead, the conferees chose to reward the big spenders who got us in
this mess in the first place.
If parents rewarded bad behavior of their children like this, we
would be a nation of reform schools.
Madam President, another glaring disappointment in the conference
agreement before the Senate is the retreat on a commitment to funding
child care.
The Senate voted for a $3 billion increase over 5 years and now we
see that the conference agreement proposes $3 billion over 7 years.
That may sound like an innocuous accounting change until you look at
the impact on the States.
That change means for Florida less child care money next year, I
repeat, less money next year, than it had this year.
Keep in mind that Florida is expected to more than double in one year
its population of welfare recipients in the work force.
The conference agreement short-changes Florida $18 million in child
care funds from the amount that passed the Senate in September. That is
movement backward, not forward.
When you take the faulty funding formula for the block grants, and
combine them with the paltry child care allocations, you get the
growing sense that Florida has been set up to fail.
Madam President, it did not have to be this way. If government were
run like a business, you would have had by now a debate about a
business plan.
In effect, you would have identified outcomes to be achieved, and
then identified the means necessary to achieve those outcomes.
Just in the area of child care alone, in order to meet the job
requirements of the conference agreement for the first 5 years after
enactment, Florida would need approximately $800 million in child care
funding. The conference agreement gives Florida $509 million.
That $291 million shortfall means that tens of thousands of children
can not get child care, and therefore, their mothers or fathers can't
go to work.
But the Congress wasn't interested in outcome and resource analysis.
The Congress didn't want to do a business plan.
The Congress wanted to cut tens of billions of dollars out of welfare
and shift those burdens to the States.
I will highlight a few more disappointments.
The Senate placed $878 million in a growth fund to assist States
which experience caseload increases, and thus, cost increases. The
conference agreement reduces that about 10 percent.
I mentioned earlier that there was good news in the conference
agreement as it pertains to legal immigrants and access to Federal
assistance to higher educational programs.
But even that good news has a new catch. The conferees have set up a
new class system now in the Stafford loans program. Now legal immigrant
applicants must have a sponsor or other citizen cosign the loans.

No debate on this change. No hearings. A brand new provision written
in conference.
So I am left to believe that the conferees felt that only the better
off of the legal immigrant communities are eligible for a Federal loan
program, even though they all pay taxes like citizens pay taxes. So
much for the American dream.
The city of Miami had more legal immigrants admitted last year than
20 States combined did. Thus the prohibitions and timetables on certain
benefits will shift to Miami costs that once were shared or born by the
Federal Government.
The State of Florida does not set immigration policy. The State of
Florida did not negotiate a 20,000 legal immigrants per year agreement
between Cuba and the United States.
But the State of Florida is now being told the following: first, we
are going to cheat you on the block grant, and give States like New
York more than four times what you get.
Second, we are going to cut child care for your State, and leave you
$300 million below what you need to achieve the work participation
rates that we intend to grade you on.
Finally, we are going to stick you with hundreds of millions of
dollars in costs for legal and illegal immigration, even though you
have no control over those policies.
How is that for fairness? How is that for reasonableness?
Madam President, I am disappointed with the direction the welfare
reform measure went after it left the Senate. It has taken a turn for
the worse. For the State of Florida, a State which did not have a high
welfare benefit check and thus did not contribute as greatly to the
welfare culture as those States who now reap windfalls for having
created the problem, the conference agreement is not acceptable.
I urge the President to veto this bill and for both sides to begin to
work together immediately toward reaching a consensus plan on balancing
the Nation's budget. There is another way.
Mr. KYL. Madam President, let me get back to the issue before us,
which is the objection to the point of order that has been made to
certain provisions of this bill.
Madam President, we ought not to waive this provision. We should not
have to waive the provision because there is nothing violative of the
Byrd rule in the antitrust provisions of the Medicare part of the
Balanced Budget Act of 1995.
Let me go back a little bit to set the stage here. The whole theory
of our Medicare reform, how we are beginning to strengthen Medicare and
save it from bankruptcy, is to create more choices in the marketplace
so that competition will drive costs down while also ensuring quality
of care.
Now, in order to create those choices, we allowed for the creation of
a couple

[[Page S 17320]]
of new products in this legislation. One of the products is the medical
savings account whereby people would have an incentive not to spend all
of the deductible amount that they did not have to spend, and we
provided that tax free.
As a result of a Byrd problem on that provision, the inside buildup--
that is to say, the part that you do not spend--is now going to be
taxed.
One of the products is not going to be nearly as attractive as it was
when we wrote our bill.
The other new product is the hospital and physician organization, a
new type of entity, somewhat similar to an HMO, but not really the same
because here instead of having an insurance company or some kind of
administrative organization that runs the whole program you simply have
physicians and hospitals in a community getting together to offer their
services on a capitated basis for the people who would be eligible for
Medicare benefits.
It is believed the creation of these organizations by cutting out the
middleman and creating a new product would, in fact, create that kind
of choice and therefore the competition in the marketplace would cause
costs to be reduced.
The two products, together, along with existing Medicare and the HMO
option that currently exists would therefore create lower costs, thus
allowing us to save the $270 billion over the 7 years that is needed in
order to prevent the bankruptcy of the system.
Madam President, as I said, the medical savings account part of this
is now jeopardized because of the Byrd rule. If we also cripple the
physician-hospital organizations because of the Byrd rule, we will have
largely failed to create the two new products and therefore the
competition, the choice, and the competition in this, and I fear, Madam
President, that our entire Medicare reform will fail. And the
commitment that we have made to our seniors, as a result of the
Democrats raising the objection here, will cause our Medicare reform to
fail.

Madam President, I will say this as clearly as I can. If and when
that happens, the American people, and in particular the seniors of
this country, ought to know precisely where the blame lies. Because we
have an opportunity this evening to save the Medicare system. But if
people do not vote down this point of order, it is in serious jeopardy
of going bankrupt because our system will not have within it the two
key products that would be created to create this competition and
choice.
What exactly happens here? Why are we so concerned about this? For
the doctors and the hospitals to get together to create this kind of
organization, they have to talk to each other and they have to talk
about prices and how they are going to treat patients. When that
happens, lawyers are going to say, you are violating the antitrust
laws. Under a per se rule, which means ``in and of itself,'' that would
be true. The mere fact that you sit down and talk about it violates the
law.
So we have said in here, let us substitute the rule of reason, a rule
of antitrust law that says we will consider it under the circumstances.
If what they did is really wrong and violative of the antitrust laws,
then we are still going to prosecute them. But if, under the
circumstances of creating this new product, and only for the purpose of
contracting with Medicare, they get together and talk about these
things, things such as prices, then it would be OK. But the Justice
Department, FTC, still would look at this under a rule of reason, as
Senator Hatch pointed out.
There are two main points, and this is what I will close on. The CBO
allegedly has not scored this--excuse me, has said it would have no
budgetary effect. That is not true. The CBO has never said that, so
that basis for a parliamentary ruling would simply be in error. Quite
the opposite is true with respect to the physician-hospital networks.
Second, the conclusion is that the antitrust provisions are merely
incidental. In this regard, two contradictory arguments are made. One,
that this is such a big deal that all kinds of doctors are going to get
together and fix prices and it is going to affect the market far beyond
the Medicare market. The other is that it is merely incidental.
Both cannot be true. The fact of the matter is, the antitrust
provisions are critical to the creation of this product. It is going to
be very hard for them to work without the antitrust exemption. So it is
not merely incidental. It is there for the sole purpose of enabling
these organizations to operate.
If they cannot operate, then the cost savings are not there because
they cannot compete in the marketplace, and our system is destined to
fail. It is only for Medicare contracts.
Madam President, I will conclude it this way. If this provision comes
out, if these antitrust modifications, just to the rule of reason, come
out of the bill, then I am going to predict that this could easily
fail. If it does, the people who vote against this this evening are the
ones who should be held responsible.
I hope that Democrats and Republicans alike will join us in defeating
this objection and in sustaining the waiver to the budget point of
order.
Ms. MIKULSKI. Mr. President, I rise to support Senator Exxon's Point
of Order that the Clinical Laboratory Improvement Amendments [CLIA]
repealed in this budget reconciliation bill violates the Byrd Rule.
The Senate Parliamentarian has ruled that repealing CLIA violates the
Byrd Rule because it produces changes or outlays that are merely
incidental to the nonbudgetary components of the provision. That is a
violation of the Byrd Rule.
Let me explain briefly to my colleagues what CLIA is, and why it is
so important to me and to millions of Americans.
CLIA `88 set for the first time uniform quality standards for all
clinical labs. I am proud that this law, which I authored, was passed
with broad bipartisan support.
CLIA was passed in 1988 and implemented in 1992 to address serious
and life-threatening conditions in clinical labs.
To now even suggest we turn back the clock to pre-1988 will have
devastating results. Do we really want to:
Turn back to a time when tests were misread and diseases
misdiagnosed.
Turn back to the bad old days of misdiagnosis of the HIV/AIDS virus.
When doctors were using inferior methods of reading slides.
When people with the virus went undetected because the virus was
mutating and was recognized by physicians.
Or turn back to a time when the lab technicians were overworked and
undersupervised.
When slides were taken home.
When dirty labs were tolerated.
When lab technicians had little or no formal training, resulting in
many diseases going undetected.
My colleagues, CLIA works, CLIA saves lives. Reconciliation is not
the place to make such changes. I urge you to sustain this point of
order.
Mr. BIDEN. Mr. President, we are being asked to vote on the antitrust
provisions of this conference report. As I understand it, these
provisions would allow doctors to form Medicare provider networks--
similar to existing managed care networks that are run by insurance
companies--without running afoul of the per se standards of anti-trust
law.
This provision violates the Byrd law. It is extraneous. It has no
effect on the deficit, and therefore it does not belong in the budget
reconciliation bill.
Furthermore, Madam President, this issue has just now been brought
before the Senate. There was no similar provision in the Senate version
of the reconciliation bill. There have not been hearings before the
Judiciary Committee. And, we have not had a chance to examine the
effects of this change in anti-trust law.
But, let me say that as ranking member of the Judiciary Committee, I
would be happy to give this matter full consideration. We should find
out whether the change proposed here would really create more
competition in the health care sector of the economy--and we should
examine whether this would be a benefit to rural areas of the country.
And, frankly, in this new health care climate, with the emphasis on
big insurance companies running managed care plans like HMO's, doctors
need some protection. I have told physicians in Delaware that I am
willing to help find ways to ensure that doctors can be doctors. I
think that if doctors ran the managed care networks, we might all be
better off. If that means that we

[[Page S 17321]]
must provide anti-trust relief, then I am willing to look closely at
it.
But, I cannot support doing it here--doing it now--on a bill that is
supposed to reduce the deficit. Therefore, I will support stripping
this provision from the bill, and I will vote against the motion to
waive the rules for physician anti-trust relief.
I hope, however, that we will look at this more closely, in a more
rational way, on another day.
Mr. EXON. I yield 8 minutes to the Senator from Vermont.
Mr. LEAHY. Madam President, the argument we have heard,
unfortunately, is somewhat like the trial in ``Alice in Wonderland.''
First you have the sentence and then you have the trial afterward. In
this case--and this shows the very reason for the Byrd rule--we have
special antitrust rules that are embedded in the reconciliation bill on
behalf of the doctors' lobby. They are significant matters. They
propose changes in antitrust law, in the policy that competition
provides the best protection for consumers. I have said when you have
the sentence first and you have the trial after: You would think that
if you were going to make these major antitrust rules changes--I do not
know, Madam President, if I am disturbing this conversation in front of
me or not.
The PRESIDING OFFICER. The Senator is correct.
Mr. LEAHY. It is a fascinating conversation, and I will probably
pause long enough to listen to it myself.
The PRESIDING OFFICER. If the Senators will come to order, so we can
hear the Senator from Vermont.
Mr. LEAHY. As I was saying, we are being required to make these major
antitrust changes without any proceedings, hearings or debate. We are
being required to do it without any vote. All we hear from is,
apparently, the back room somewhere. Here some highly-paid lobby comes
in and says, ``Whisper, whisper, whisper,'' and what comes out of that?
We end up with a special provision in a budget reconciliation bill. We
have a reconciliation bill and tucked in there are major changes in the
antitrust law.
Mr. KYL. Will the Senator yield a moment?
Mr. LEAHY. I tried not to interrupt the Senator from Arizona before.
Let me finish, and then I will be happy to yield for a question.
Mr. KYL. Thank you.
Mr. LEAHY. The Senate budget reconciliation bill that the Senate
passed contained no such provision of which I am aware. The House
originally had two. Then they end up with one. An unnecessary and
dangerous antitrust law change is in the conference report on budget
reconciliation.
Again, I do not know where it came from. It did not come from
hearings or debate, and it certainly did not come from any votes on the
Senate floor. I am not aware that it came from any votes on the House
floor.
Yet in proposed new subsection (f), of proposed new section 1853 to
the Social Security Act, as contained in section 8001 of title 8 of the
Budget Reconciliation Conference Report, in a special antitrust rule
and change in our antitrust policy.
What it does is this: It exempts certain groups of doctors and other
health care providers from the so-called per se rule against price
fixing in our antitrust laws.
The conference report does omit the heading ``Special Antitrust Rule
For Provider Service Networks''--originally the House-passed bill
actually had a heading and flagged the change --they took the heading
out, but they left a rewrite of the section in. Maybe because this
reconciliation bill is so long and filled with so many special interest
gimmicks and gimmies and giveaways, maybe they thought that if you take
the headings off, people will not know they are there. But it is still
there as a subsection.
It attempts to enact a special antitrust rule for groups of health
care providers. It provides that the conduct of members of a group of
health care providers, such as doctors, in ``negotiating, making, and
performing a contract--including the establishment and modification of
fee schedule--'' with a provider-sponsored organization for services
under a MedicarePlus plan cannot be subject to the per se rule against
price fixing.
Basically, it says, go ahead and agree on whatever you want because
we will make it harder for anyone to prove that you are violating the
antitrust laws. You are on your own.
Instead of the per se rule that is usually applied to stop price
fixing, the only antitrust rule that can be applied is to consider and
test the conduct based on its ``reasonableness, taking into account all
relevant factors affecting competition, in properly defined markets''.
This is changing one of the most basic rules of antitrust law,
changing it in a little special gimmie or giveaway provision, tucked in
the reconciliation bill for whatever special interest wrote it. It
changes the rule from the one that applies to competitors throughout
the rest of the economy and that works to protect competition and
consumers.
The antitrust law treats a very limited category of conduct as per se
unlawful. That is reserved for naked restraints, that is, those that
are inherently harmful to competition without conferring offsetting
benefits. The classic example, Madam President, I say to my colleagues,
is an agreement among competitors to fix the price of the products or
services they sell when the agreement is not reasonably necessary to
the operation of an efficiency-enhancing joint venture.
In fact, seeing my friend from Arizona on the floor, I would refer to
the Supreme Court decision Arizona v. Maricopa County Medical Society,
457 U.S. 332 (1982). In that case, the Supreme Court held that a group
of competing doctors who agreed on the maximum price at which they
would sell their services to insurers without substantially
integrating, that is, without becoming partners or joint venturers that
share financial risk, was engaged in per se illegal price fixing.
Madam President, I am advised the leadership would like to make an
unanimous consent request, and I yield for that.
The PRESIDING OFFICER. The Senator from Arizona.

Unanimous-Consent Agreement

Mr. KYL. Madam President, I ask unanimous consent that Senator
Domenici have 30 seconds to close, and the Senate then proceed to vote
on the motion to waive without further action or debate.
The PRESIDING OFFICER. Is there objection?
Mr. LEAHY. Reserving the right to object, 30 seconds to close after I
finish or right now?
Mr. KYL. Right now.
I am sorry----
Mr. DASCHLE. I understand Senator Leahy was going to complete his
speech and then that would take place.
Mr. KYL. At the conclusion of his remarks.
Mr. LEAHY. Instead of giving the full amount, I will take about
another half minute, and then I have no objection. I enjoy hearing----
Mr. KYL. I amend the unanimous consent request.
The PRESIDING OFFICER. If the Senator from Arizona would finish his
request?
Mr. KYL. The request is that at the conclusion of Senator Leahy's
remarks, Senator Domenici have 30 seconds to close and we then proceed
without any further debate to a vote on the motion to waive.
Mr. GRAHAM. Madam President, I object.
The PRESIDING OFFICER. Objection is heard.
Mr. LEAHY. Madam President, I understand Members may be trying to
restate the question by the Senator from Arizona. I will assure the
Senator from Arizona and the Democratic leader that when they are
getting close to that I will yield immediately for them to make the
request again.
Basically the point is a very serious point. I do not want to make
motions on this or other reconciliation bills. I do so only
reluctantly. But this is such a major change in the antitrust law to be
tucked in here absent hearings, absent debate, and absent votes. I
think is wrong.
For those Members of the Senate who are here, when we talked about
the Byrd rule in the first place, it was specifically for this. We are
talking about a reconciliation bill that goes past the normal debate
rules of the Senate. I see the distinguished senior Senator from West
Virginia on the floor. I think he would be the first to agree regarding
this reconciliation.

[[Page S 17322]]

The budget reconciliation conference report would cast aside the per
se rule, and override the Maricopa decision for provider groups and
provider-sponsored organizations or PSOs. Members of provider groups,
such as doctors, would not be required to share financial risk in order
to avoid per se treatment when they collectively set fees at which they
provide services. Instead, these loose-knit groups would merely have to
meet a checklist of criteria to qualify for the special treatment.
None of the group requirements is a substitute for the antitrust
law's requirement of meaningful, shared risk. Under the language of the
conference report the members need only be part of a group that ``is
funded in part by capital contributions made by the members.'' This is
no substitute for the shared risk required of a joint venture under
antitrust law.
Nor would members of PSOs be required to share financial risk under
currently governing law in order to avoid per se treatment under
traditional analysis. Instead, they are provided their own special
antitrust rule in subsection (e) by which ``affiliated'' providers need
share, ``directly or indirectly,'' barely a majority financial interest
in the PSO. So long as the providers, who would otherwise be
competitors, meet the indirect affiliation provisions of the bill, they
will be allowed to exchange information ``relating to costs, sales,
profitability, marketing, prices, or fees for any health care product
or service.''
These provisions each require the antitrust enforcement agencies to
conduct a resource-intensive analysis of the ``properly defined
market'' in order to challenge conduct that normally would be swiftly
condemned as price fixing. Given limited enforcement resources, this
change in law inevitably would mean that some anticompetitive
activities will go unprosecuted. Could it be that this explains the
doctors' lobby's insistence on inclusion of this provision in the
conference report?
The provisions regarding the provider groups admittedly have to
revenue or savings effect for deficit reduction purposes. The
provisions regarding the PSOs did not have a score until, miraculously,
just before this debate was about to being.
Neither set of special rules is integral to Medicare reform. Although
defended as a means to encourage provider-sponsored health plans as an
alternative to insurers, no such special antitrust treatment is needed
to promote Medicare reform.
Provider networks already exist without any special antitrust rule.
According to industry statistics, 20 percent of all PPOs and 15 percent
of all HMOs are provider-owned. A survey by Modern Healthcare showed
that in 1994, without a special antitrust rule, over 9 million people
were enrolled in provider-owned PPOs. In addition, many other provider-
sponsored managed care plans are being developed or planned without the
enactment of a special antitrust rule. The Physician Payment Review
Commission concluded in its 1995 Report to Congress that the available
information did not indicate a significant problem of antitrust laws
impeding the development of provider-sponsored managed care plans. The
PPRC Report noted press accounts indicating that many physician-
sponsored networks are in the process or formation and that ``three-
fourths of state medical societies are either contemplating or are
actually in the process of establishing physician-sponsored networks.''
Finally, in the past 2 years the Federal Trade Commission and the
Department of Justice have issued literally dozens of staff advisory
opinions approving the proposed development of provider-sponsored
networks.
The Senate bill contains no such provisions. In debate on our bill,
Senator Frist expressly noted the absence of a Senate provision like
proposed section 1853(f). Senator Hatch spoke to the ``creative
tension'' in the health care delivery system involving providers and
insurers, and noted Senate consideration of the `` antitrust
requirements in current law.'' He concluded that the Senate bill, which
had no such special antitrust rule, met the goals of providing real
health care choices while making sure that there is accountability.
Thus, no special antitrust rule was considered necessary when the
Senate debated its Medicare reform package in its budget reconciliation
bill a short time ago.
These provisions threaten significant injury to competition outside
the Medicare program. By allowing competing providers to share
information about ``costs, sales, profitability, marketing, prices, or
fees'' and to agree on prices in the context of MedicarePlus, the
exemption is likely to have the effect of dampening competition among
those same providers for non-MedicarePlus business. For this reason
among others, special antitrust rules of this type are opposed by the
U.S. Chamber of Commerce, the National Business Coalition on Health,
the National Manufacturers Association, the ERISA Industry Committee,
the Business Roundtable, the APPWP--The Benefits Association, and the
National Association of Attorneys General.
No language--and certainly not the fig leaf provided in proposed
section 1853(f)(1)(B)(ii), which purports to limit the information
exchanged among providers affiliated with a PSO to having not been used
for any other purpose than to establish the PSO--can effectively
prevent against this spillover effect.
Once putative competitors are authorized by statute to share
information about ``costs, sales, profitability, marketing, prices''
and fees and to agree on prices for MedicarePlus, they cannot and will
not be able to ignore that knowledge they already possess when it comes
to setting their prices for others.
Providers who agree on prices to be demanded from PSOs or as PSOs may
implicitly agree to adhere to similar prices with respect to other
activities or moderate their competitive behavior based on the
knowledge gained thereby. Once competing providers have met to
negotiate their fees, the information they have exchanged and the
understandings they have reached would likely spill over into their
other dealings and into non-MedicarePlus areas in which health care
services ought to be governed by competitive forces.
Thus, Gail R. Wilensky, Ph.D., the Chair of the Physician Payment
Review Commission, recently testified on September 22, 1995, before the
House Ways and Means Committee on Medicare Reform that ``even if a
change (in the antitrust laws) applies only to the Medicare market, it
may be difficult to keep potentially anticompetitive practices from
spilling into other markets served by the networks.''
We do not need to enact such provisions and certainly should not do
so as part of budget reconciliation. I object and trust my colleagues
will not approve such changes in our antitrust laws without proper
analysis, justification, study or debate.
Mr. DASCHLE. Madam President, will the Senator from Vermont yield?
Mr. LEAHY. Certainly.
Mr. DASCHLE. I apologize for the second time for interrupting the
distinguished Senator from Vermont. We want to accommodate a number of
schedules, and the clock is ticking. I am trying to see if we can
accommodate all Senators and arrive at a unanimous consent agreement
that will allow us to vote. The distinguished Senator from Florida had
some questions.
If we could have the unanimous consent request again propounded with
the understanding that, in addition to the 30 seconds for the Senator
from New Mexico, the Senator from Florida could have 1 minute to ask
some questions, and I would ask unanimous consent that be included, and
pose the motion at this time.
The PRESIDING OFFICER. Is there objection? If not, the Chair
understands that there will be 30 seconds for the Senator from New
Mexico, and the Senator from Vermont would have 30 seconds.
Mr. LEAHY. No, the Senator from Vermont would complete his statement
at which point I understand that the Senator from Florida would have a
minute, the Senator from New Mexico would have 30 seconds, and then we
would have the vote that was discussed before.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. KYL. Madam President, I further ask unanimous consent that, if
the motion to waive is not agreed to and the point of order is
sustained, that the

[[Page S 17323]]
Senate proceed immediately to vote on the motion to concur with the
Senate amendment to the House amendment with no further action or
debate, other than 5 minutes for each leader or manager, and that the
vote be limited to 10 minutes.
The PRESIDING OFFICER. Is there objection?
Mr. DOMENICI. Reserving the right to object, I thought I was going to
get 5 minutes also.
Mr. KYL. For each leader and manager, I will amend the request. I am
sorry. I misread that--each leader and manager.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. LEAHY. Madam President, to accommodate those Senators who have
schedules and other debates, I will wrap up with this.
The Byrd rule was put here by the distinguished senior Senator from
West Virginia because this reconciliation process changes the normal
procedures of the Senate. It changes the normal unlimited debate. It
was done to handle these fiscal matters, and not to allow a whole lot
of things to come in without the debate.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. LEAHY. No. Madam President. That was not the unanimous consent
request, I say to the Chair. The unanimous consent request was that at
the conclusion of my time we would have a minute for the Senator from
Florida, and 30 seconds for the Senator from New Mexico.
The PRESIDING OFFICER. The time of the Senator from Vermont has
expired. He had 8 minutes, and the time has expired.
Mr. LEAHY. The Chair is correct in that.
I ask unanimous consent that the material of the Chamber of Commerce,
the National Business Coalition, Health, the National Association of
Attorneys General and others, who objected to this provision be printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Federal Trade Commission,

Department of Justice,

Washington, DC, October 31, 1995.
Hon. Patrick J. Leahy,
U.S. Senate, Washington, DC.
Dear Senator Leahy: The Federal Trade Commission and the
Department of Justice (the ``Agencies'') are writing in
response to your letters of October 26, 1995, requesting the
Agencies' comments on two antitrust provisions in H.R. 2425,
the Medicare Preservation Act of 1995. The Administration
supports the increased availability of provider networks to
promote competition and expand competitive choices for
consumers. Further, the Administration believes that
legislative reforms, which include appropriate consumer
protection safeguards, are necessary to achieve this goal.
The Federal Trade Commission has taken no position on aspects
of Medicare reform other than the comments in this letter on
the two antitrust provisions of H.R. 2425.
However, the two antitrust provisions of H.R. 2425--one a
broad exemption for medical self-regulatory entities and the
other a relaxation of antitrust rules for provider service
networks--are unnecessary and could seriously undermine the
cost containment goals of Medicare reform efforts. Moreover,
these provisions would deprive all consumers--not only
Medicare beneficiaries--of the benefits of competition in
health care markets. The Agencies urge that Congress not
enact these provisions.

antitrust exemption for medical self-regulatory entities

Section 15221 of H.R. 2425, ``Exemptions from Antitrust
Laws for Certain Activities of Medical Self-Regulatory
Entities,'' would create a special antitrust exemption for
medical groups' setting or enforcing of ``standards'' that
are ``designed to promote quality of health care services.''
If enacted, it would provide broad antitrust immunity for
anticompetitive activities that purport to improve the
quality of care, but in fact raise health care costs and
deprive consumers of choices in the marketplace, by
anticompetitively excluding other economic participants from
health care markets.
Antitrust enforcement actions have stopped physicians,
acting through medical societies and hospital medical staffs
under the guise of quality concerns, from engaging in
boycotts, price fixing, and other conduct harmful to
consumers. These enforcement actions have been instrumental
in enabling competitive alternatives to traditional fee-for-
service medicine to enter health care markets in the face of
provider opposition. For example, the Agencies enforcement
actions have challenged: medical societies' standards that
banned procompetitive alternatives to traditional fee-for-
service medicine--including physicians' employment by HMOs
and affiliation with non-physicians; hospital medical staff
boycotts, coercion of hospitals, and abuse of the
credentialling process, to block the development of
innovative forms of health care delivery, such as health
maintenance organizations; and medical societies' boycotts of
insurers to force them to pay higher fees to the societies'
members.
The unfortunate fact is that self-regulatory bodies
sometimes act to obstruct competition, and when they do so
their actions are often couched in quality-of-care terms.
This kind of conduct is not a thing of the past. Continued
antitrust enforcement against such anticompetitive activities
is essential if competitive forces are to play a role in
containing health care costs.
Encouraging industry self-regulation that is aimed at
improving quality is a laudable goal, but legitimate self-
regulatory activity is already permitted under current
antitrust law. The Federal Trade Commission and the
Department of Justice have not brought suits against such
legitimate conduct. In fact, they have repeatedly spread the
message that such conduct is lawful.
The Report of the House Committee on Ways and Means on H.R.
2425 indicates that the exemption for medical self-regulation
is intended to address concerns about private lawsuits
challenging peer review. The Report states that the Health
Care Quality Improvement Act of 1986, 42 U.S.C. Sec. 11101,
which eliminated private damage actions for good faith peer
review that is undertaken with certain procedural safeguards,
has been beneficial, but that antitrust suits have continued.
Even if some unjustified suits continue to be brought,
concerns about possible imperfections in that statute's
limitations on private damage actions would not justify H.R.
2425's broad exemption from all antitrust enforcement,
particularly including actions by the government.
The potential harm from the broadly worded exemption is not
significantly limited by Section 15221(b)(2)'s exclusion from
immunity where conduct is undertaken ``for purposes
of financial gain.'' As noted above, quality of care is
typically offered as a justification for anticompetitive
conduct by health care providers, sometimes based on the
sincere--but erroneous--belief that competition is
inappropriate in the health care industry. Moreover,
making the availability of immunity turn on defendants'
intent, rather than on the objective market consequences
of the challenged behavior, offers no real protection for
consumers. The absence of a motive for personal financial
gain does not lessen the injury to consumers that occurs
when competitors engage in conduct that is unreasonably
anticompetitive.
The Congressional Budget Office concluded that this
provision would increase federal spending, rather than
promote the cost containment goals of H.R. 2425. And the
impact would not be limited to the Medicare program. Granting
private medical organizations the power to adopt and enforce
standards without the check against abuses that antitrust law
provides is likely to stifle innovation, unnecessarily limit
consumer choice, and frustrate health care cost containment
efforts.

special antitrust treatment for provider service networks

Section 15021 of Subtitle A of H.R. 2425, ``Special
Antitrust Rule for Provider Service Networks,'' would exempt
certain groups of health care providers from the per se rule
against price-fixing that applies throughout the rest of the
economy. This provision is not necessary for the development
of the provider-sponsored entities that the Medicare reform
bills seek to encourage. It could, however, both undercut
H.R. 2425's reliance on competition to provide more cost-
effective services to Medicare beneficiaries, and impair non-
Medicare competition as well.
Like the Senate Medicare bill, H.R. 2425 would permit
certain provider organizations to contract directly with the
Medicare program to provide all covered services in return
for a monthly capitation payment. These organizations are
called ``provider service networks'' in the Senate bill and
``provider-sponsored organizations'' (PSOs) in H.R. 2425.
``Provider service networks'' (PSNs) under H.R. 2425 are
groups of providers that may contract with a PSO--in essence
as subcontractors--to provide services to Medicare
beneficiaries.
Section 15021(a) provides that the conduct of a PSN or its
members in fixing prices would be evaluated only under the
``rule of reason'' antitrust analysis, rather than under the
``per se'' rule usually applicable to price fixing by
competitors. Legitimate provider joint ventures already
receive ``rule of reason'' treatment, for example, where
their members share substantial financial risk. This is
because risk-sharing among members of such a group gives each
member the incentive to assure that the group as a whole
provides services in a cost-effective manner, achieving
efficiencies and cost-savings that competition is intended to
secure. Under Section 15021(a), however, members of a PSN who
do not share any financial risk, and thus do not have those
same incentives for cost-savings, would be able to set fees
collectively for services provided through a PSO without
regard to the usual ``per se'' rule against price fixing.
No special antitrust rule is necessary to allow providers
to form groups or networks, develop fee schedules for
participating providers, or set up providers panels, so long
as the providers share financial risk. In fact,

[[Page S 17324]]
risk-sharing among providers in a group appears integral to the
purposes of the legislation: PSOs and other entities offering
Medicare products are required to assume full financial risk
for the provision of all covered services, in exchange for a
predetermined capitation payment. Under existing antitrust
law, such groups already receive rule of reason treatment,
and any other provider group that similarly shares financial
risks would receive the same antitrust treatment. H.R. 2425
would allow PSNs that do not involve risk-sharing to qualify
for special antitrust treatment by meeting certain criteria.
However, none of these criteria is a substitute for the
incentives created by substantial financial risk-sharing.
The goal of promoting more cost-effective delivery of
Medicare services would not be furthered by allowing groups
of competing providers in a PSN to agree on the prices they
would demand from the PSO for treating patients under a
Medicare PSO contract, bargain collectively with the PSO, and
threaten a boycott if the PSO did not accept the providers'
terms. In such a case, even though the anticompetitive effect
of the conduct is clear and no countervailing efficiencies
are produced, the bill would require the antitrust agencies
to conduct a resource-intensive analysis of the market under
the rule of reason. Given the constraints on federal
antitrust enforcement resources, this can only mean that some
plainly anticompetitive activities will go unprosecuted.
The impact of the exemption could also extend beyond PSOs
to all managed care organizations operating in a particular
market. By allowing competing providers to agree on prices in
the context of bargaining to provide services to a Medicare
PSO, the exemption could have the unintended effect of
dampening competition among those same providers for non-PSO
business. Providers who agree on prices to be demanded of
PSOs may implicitly agree to adhere to similar demands when
dealing with other plans. Even absent bad intentions, once
competing providers have met to negotiate their fees for PSO
business, the information they have exchanged and the
understandings they have reached would likely spill over into
their dealings not only with other MedicarePlus
organizations, but also with the various organizations that
provide health care benefits to non-Medicare patients.
In sum, the antitrust provision in H.R. 2425 would harm
consumers and would run counter to the cost-reduction goals
of Medicare reform efforts.
The Department of Justice has be advised by the Office of
Management and Budget that there is no objection to the
submission of this letter from the standpoint of the
Administration's program.
Sincerely,
Anne K. Bingaman,
Assistant Attorney General.
By direction of the Commission.
Robert Pitofsky,
Chairman.
____

September 26, 1995.
Hon. William V. Roth, Jr.,
Chairman, Committee on Finance
Washington, DC.
Dear Mr. Chairman: We are a coalition of physician group
practices, non-physician providers, employers, managed care
networks and insurers who are opposed to including special
antitrust preferences for physicians as part of Medicare
reform legislation.
Physicians are not alone in feeling the pressure of
increased competition. All of us doing business in the health
care market are facing increased competition. Yet, we do not
believe that competitive pressures warrant special antitrust
preferences for physicians or any other provider. Such
preferences are unnecessary and harmful to competition and
consumer choice in the marketplace. If the goal is to apply
the successes of the private health care market to reforming
the Medicare program, then weakening the antitrust laws for
physicians is truly misguided. Senior citizens and all
consumers should have health plan choices--but choices that
are indeed competitive.
The attached Washington Post article underscores the need
to maintain strong antitrust enforcement in order to ensure
that consumers, not competitors, determine the range and
prices of goods and services offered in the health care
marketplace.
Unfortunately, the American Medical Association (AMA) is
seeking special treatment under the antitrust laws. Under the
AMA's proposal, physicians would be allowed to agree on the
prices they will charge and collectively negotiate with
lawyers while essentially remaining individual competitors.
In other words, little substantial risk-sharing on the part
of physicians would be required, effectively reducing
incentives to compete on cost, quality and efficiency. In
addition, physician networks would be subject to more lenient
enforcement of the law than all other providers.
Advocates of changes to the law contend that current
antitrust laws and enforcement must be relaxed to allow
physicians to compete on a ``level playing field'' with other
network organizers such as hospitals. HMOs and insurers.
While this argument may appear reasonable at a glance, a
closer examination of the issue reveals quite the opposite.
The antitrust changes that the AMA seeks to include as part
of Medicare reform are little more than well-disguised
attempts to side-step the strong free market protections
afforded by current law.
The following briefing paper tells the real story.
Sincerely,
American Group Practice Association, American Association
of Nurse Anesthetists, Academy of Nurse Practitioners,
American Nurses Association, AETNA, American Managed
Care and Review Association, American College of Nurse
Mid-wives, Association of Private Pension and Welfare
Plans, American Speech-Language-Hearing Association,
Blue Cross & Blue Shield Association, CIGNA, FHP Health
Care, Group Health Association of America, Health Care
Compare, Corp., Health Insurance Association of
America, Kaiser Permanente, Kansas City Blue Cross &
Blue Shield, Metrahealth, National Association of
Manufacturers, National Capital PPO, Nat's Assoc. of
Nurse Practitioners in Reproductive Health, Opticians
Association of America, Sierra Health Services, The
Erisa Industry Committee, The Principal Financial
Group, The Prudential, U.S. Healthcare, Inc., Wausau
Insurance Companies.
____

[From the Washington Post, Sept. 14, 1995]

Doctors, Hospitals Sued on Monopoly Charges

The Justice Department yesterday charged doctors and
hospitals in two states with using monopoly power to block
lower-priced managed health care systems from competing--in
one case for almost a decade.
It was the first time the agency's anti-trust division
filed price-fixing lawsuits accusing hospitals of scheming
with doctors to ensure their own higher profits while health
care costs rise.
Both groups--in Danbury, Conn., and St. Joseph, Mo--denied
the charges. But both also agreed to consent decrees in which
they promised to change the way they do business.
The complaint said that beginning in May 1994 and
continuing through August, Danbury Hospital, the only
acutecare facility in the area, forced patients to use its
outpatient facilities, joined with ``virtually all of the
doctors on its medical staff' to raise fees, and purposely
limited the size and mix of its medical staff to reduce
competition among local doctors.
In Missouri, the Justice Department said, the price-fixing
conspiracy occurred from April 1986 through June 1995. The
complaint said about 85 percent of the doctors in Buchanan
County formed a group in 1986 ``to prevent or delay the
development of managed care in the area.''
In 1990, the group then joined with the only local
hospital, Heartland, to form Health Choice to further lock up
the medical services and profits in the area, the lawsuit
said.

Special Antitrust Preferences for Physicians Limit Competition, Choice
and Innovation in the Health Care Market

Current antitrust law does allow for the formation of
physician-sponsored networks.
Physicians can join together and agree on price and other
terms of business so long as they ``integrate'' by sharing
financial risk. Risk-sharing can be achieved in a variety of
ways and is critical to ensure that physicians do not come
together to simply fix prices while remaining separate
competitors. Numerous physician networks have successfully
``integrated'' and are now competing in virtually every
market in the country. Some of the most notable examples are
the Mayo Clinic in Minnesota and the Cleveland Clinic in
Ohio. These multi-specialty physician group practices were
formed under existing antitrust laws, without special
preferences.
Alternatively physicians can also join together to form
Preferred Provider Organizations (PPOs) and negotiate fees
with HMOs and other third-party payers without integrating
their practices. These more loosely organized groups can
perform many of the same functions as their fully integrated
counterparts, including quality assurance, utilization
review, and administrative services. Guidelines issued by the
Department of Justice (DOJ) and the Federal Trade Commission
(FTC) make this clear.
Loosening integration requirements is harmful to consumers
because it reduces the incentive for providers to compete.
Current integration requirements are not barriers to the
formation physician-sponsored plans. They are barriers to
price-fixing, boycotts and other forms of anti-market
activities. Ultimately, substantial financial integration is
what drives competition on quality, efficiency and cost.
Physicians are not disadvantaged with respect to other
providers under the antitrust laws.
The purpose of strong antitrust enforcement policies is to
protect consumers, not competitors. The notion that
physicians need special antitrust preferences because the
antitrust laws are biased against physicians is inaccurate
and misleading. Joint ventures arranged by like competitors
in every other industry are subject to essentially the same
level of scrutiny as physician-sponsored networks.
Similarly, insurers and other providers are not exempt from
antitrust enforcement. If insurers either agreed among
themselves on payment levels or tried to wield market power
by driving prices down, they too would run afoul of the
antitrust laws.
In its 1995 Report to Congress, the Physician Payment
Review Commission (PPRC)

[[Page S 17325]]
concluded that ``the available evidence of problems is not sufficient
to warrant creating safe harbors or other exemptions from the
antitrust laws for physician-sponsored networks at this time.
Amending the antitrust laws is a serious step that should be
undertaken only in the face of compelling evidence that
change is required. The limited available factual evidence,
however, does not currently suggest the widespread existence
of problems.''
Consequently, what the AMA is really asking for is the
ability to compete outside the free market principles that
every other competitor must abide by.
Special antitrust treatment for physicians, such as loose
integration requirements and substitution of the rule of
reason for the per se rule would diminish consumer power in
the marketplace.
A number of changes to the antitrust laws have been
advocated by the AMA, ranging from outright exemptions to
relaxing risk-sharing requirements and elimination of the per
se rule. The per se rule has allowed the courts and
enforcement agencies to efficiently call a halt to activities
that are blatantly harmful to consumers. It reflects a
determination that some conduct--such as price-fixing and
group boycotts--is so likely to harm consumers that it should
be found unlawful in all circumstances. It is a rule that
applies to all providers and all industries.
The rule of reason, in contrast, requires a balancing of
the competitive harm arising from particular conduct against
the possible economic benefits it produces. However, it is
also more difficult under this rule to challenge
anticompetitive conduct because many more creative defenses
and justifications can be raised. If antitrust enforcement
agencies could only prosecute antitrust violations by
provider physician-sponsored networks under the rule of
reason, they would be forced to utilize greater resources and
face a reduced likelihood of success. If rule of reason
treatment was extended to provider-sponsored networks, but
not to other types of health care networks, provider
organizations would enjoy distinct advantages that would not
be shared by other health plans. This would put those plans
at a competitive disadvantage.
History is replete with examples of physician group
boycotts and efforts to keep other physician group practices
and non-physicians, such as nurse mid-wives and nurse
anesthetists, from offering consumers choice. One of the best
examples of this is the experience of the physician-owned
Cleveland Clinic. In 1991, the Federal Trade Commission (FTC)
put a halt to physician boycotts aimed at preventing
Cleveland Clinic doctors from establishing a practice in
Florida. This case was brought under the per se rule--the
very rule from which AMA seeks an exemption. Similarly, prior
to 1979, the AMA bound its members to rules that prevented
physicians from contracting with HMOs. These rules
effectively prevented price competition among doctors and
hindered the development of new, innovative health care
delivery systems, such as HMOs and PPOs. The Supreme Court
agreed and forced the AMA to drop its anticompetitive rules.
The DOJ and FTC have provided substantial guidance to
health care providers to address their concerns.
In response to concerns raised by providers, the Department
of Justice (DOJ) and the Federal Trade Commission (FTC)
jointly issued the Statements of Antitrust Enforcement Policy
in the Health Care Area. These statements, or guidelines,
provide a detailed road map of the analysis that the federal
enforcement agencies will apply to the most significant
issues facing the health care industry. The guidelines
include ``safety zones'' clarifying what types of mergers,
joint ventures, and other activities would be considered
lawful. The DOJ/FTC have made a special effort to address
physician networks and rural health care markets.
For physicians and other providers who have questions about
forming integrated networks, the agencies offer opportunities
for more specific advice through their business review and
advisory opinion letter process. The agencies' business
review and advisory opinion procedures allow parties to
obtain a statement of the agencies' enforcement intentions
before the transaction is implemented. The agencies have
committed to providing expedited 90-day reviews. The agencies
have also committed to continued monitoring of evolving
health care markets so they can respond to changes on an on-
going basis. To date, virtually every physician-sponsored
network has been approved.
The health care industry has responded enthusiastically to
these initiatives. According to a January 1995 Bureau of
National Affairs (BNA) survey of counselors advising
providers, the ``almost blanket clearances by the Justice
Department and FTC of proposals to create managed care
networks is assuaging health care industry concerns about the
impact of antitrust law . . .''
____

Business for Medicare Reform: APPWP--The Benefits
Association; The Business Roundtable; The ERISA
Industry Committee; National Association of
Manufacturers; National Business Coalition on Health;
U.S. Chamber of Commerce,
October 17, 1995.
Hon. Newt Gingrich,
Hon. William Archer,
Hon. Michael Bilirakis,
Hon. Thomas Bliley,
Hon. Dennis Hastert,
Hon. Gerald Solomon,
Hon. William Thomas.
Dear Representatives: We are writing as representatives of
small and large businesses who have been supportive of your
efforts to save Medicare by passing the Medicare Preservation
Act. We have been gratified by the commitment you have made
to fundamentally restructuring Medicare by drawing on the
successful health care reform strategies pioneered by private
employers. Moreover, employers have been willing to accept
considerable costs in order to save Medicare.
Just a very few years ago, most health care policymakers
and analysts believed that the private sector could not
contain health care costs. Employers have proved this wrong,
by using their purchasing power to create more competitive
markets and demanding better care at lower cost. Based on our
knowledge of what it took to get this job done, we have
important reservations about a limited number of the Medicare
Preservation Act's provisions. We are concerned that these
provisions would undermine the very strategies that (a)
employers have used to control costs and improve quality and
(b) the Act uses as the foundation for a new and sustainable
Medicare program. We urge you to reconsider these provisions.
Our most important concerns are as follows:
Antitrust Changes for Health Care Providers. We are
extremely concerned by the antitrust law changes included in
Sections 15021 and 15221 of the Act, which would affect
employer-sponsored health plans as well as MedicarePlus
plans. We ask that they be stricken.
Unfortunately, organized medicine has a long history of
attempting to suppress alternative health care delivery
systems. Antitrust enforcement has been an important tool in
overcoming this opposition to innovative ways of delivering
higher quality care at lower cost. Section 15221's changes to
antitrust law would allow organized medicine to engage in a
much higher level of anticompetitive activity, thereby
increasing costs and reducing the quality of care. In
contrast, employers have created the new, competitive health
care market and better ways to measure and improve quality
under current antitrust law, which also leaves broad
leeway for health care providers to collaborate in
legitimate self-regulatory activity.
Employers have been able to control costs and improve
quality by using their purchasing power to create competitive
health care markets. The antitrust law changes in Section
15021 would shift the balance between health care providers
and purchasers in favor of providers, undermining employers'
ability to be effective purchasers and jeopardizing their
hard won victories over health care cost inflation and poor
quality care. Putting purchasers at a disadvantage by
changing antitrust law risks a return to health care
hyperinflation and unaccountability for quality.
Medical Liability Reforms. Employers have long supported
medical liability reform, including changes to the collateral
source rule. However, the version of collateral source rule
reform in the Act eliminates employers' right of subrogation.
This shifts the cost of treating injuries caused by a
negligent provider from the provider who caused the injury to
employers. We urge that you revise the Act to provide for a
different version of collateral source rule reform that
appropriately prevents double recovery by plaintiffs without
inappropriately shifting responsibility for injuries caused
by negligent providers to employers.
Medicare Secondary Payer Expansions. The Act expands
employers' Medicare secondary payer liability. This does
nothing to improve health care efficiency or quality. Rather,
it simply shifts costs to private sector payers. Small
employers in particular are vulnerable to this kind of cost-
shifting. We urge that the expansions of Medicare secondary
payer liability be eliminated.
As you know, managed care plans able to efficiently deliver
high quality care have played a key role in employers'
market-based health reform strategy. No aspect of the
Medicare Preservation Act is more important to employers than
its treatment of managed care plans. We are gratified that
the Act as introduced by Chairman Archer and Chairman Bliley
did not include antimanaged care rules. Including antimanaged
care rules in the Act would increase costs and reduce
quality. Moreover, including antimanaged care rules would
directly and adversely affect employer-sponsored health plans
as well as MedicarePlus plans, since the same networks will
serve Medicare beneficiaries and employer-sponsored plans.
It is our understanding that most of the antimanaged care
rules adopted in committee as amendments to the Act have been
stricken. (These amendments included restrictions on (1) the
criteria health plans may use when selecting providers, (2)
efforts to eliminate medically inappropriate emergency room
treatment and (3) denial of care that is not medically
necessary.) We applaud this result. We urge you to strike the
remaining antimanaged care amendment (restricting permissible
contractual relationships between health plans and providers)
and to continue adhering to the policy of avoiding
antimanaged care rules as the Medicare Preservation Act moves
through the legislative process.

[[Page S 17326]]

It also is our understanding that a technical error in the
medical liability reforms that would have inadvertently
expanded employers' liability by interfering with current
grievance procedures provided for under the Employee
Retirement Income Security Act has been resolved. We
appreciate your efforts to resolve this matter, which is
vitally important to employers who voluntarily sponsor health
benefits for their employees.
Again, we strongly support your efforts to save Medicare.
It is essential that they succeed. However, as
representatives of the businesses that originated the
strategies that the Medicare Preservation Act is built on, we
urge adoption of a few technical changes that would greatly
strengthen the Act's ability to achieve its goals. These
changes also would eliminate our concerns about the Act's
effects on businesses that voluntarily offer health benefits
to their employees.
We would be pleased to further discuss these issues with
you at your convenience.
____

U.S. Chamber of Commerce,

Business for Medicare Reform,

October 23, 1995.
Hon. William V. Roth, Jr.,
Chairman, Finance Committee,
Washington, DC.
Dear Chairman Roth. We are writing as representatives of
small and large businesses that are working hard to control
health care costs and improve quality. We have been gratified
by the Finance Committee's decision to fundamentally improve
Medicare by drawing on the successful health reform
strategies pioneered by private employers.
Just a few years ago, most health care policymakers
believed that the private sector could not contain health
care costs. Employers have proved this wrong, by using their
purchasing power to create more competitive markets,
demanding better care at lower costs, measuring outcomes and
consumer satisfaction, and developing networks through
selective contracting with the best providers. Based on our
knowledge of what it took to get this job done, we are
concerned that potential floor amendments to the Finance
Committee bill would undermine the very strategies that (a)
employers have used to control costs and improve quality and
(b) the bill uses as the foundation for a new and sustainable
Medicare program. These potential amendments include
antitrust exemptions for health care providers and mandated
point-of-service coverage by network-based plans. We strongly
oppose these potential amendments to the Finance Committee
bill.
The damage that would be caused by adding these amendments
to Medicare reform legislation would not be limited to higher
Medicare costs and lower quality. Because Medicare is such a
large factors in health care markets and because Medicare and
employer-sponsored health plans will use the same provider
networks, antitrust exceptions for providers and antimanaged
care rules would directly harm employer-sponsored plans.
Working Americans and their families would face higher costs,
reduced coverage and lower quality.

opposition to antitrust exemptions

One potential amendment would grant an antitrust exemption
to medical self-regulatory organizations. Unfortunately,
organized medicine has a long history of attempting to
suppress coordinated health care delivery systems. Antitrust
enforcement has been an important tool in overcoming this
opposition to innovative ways of delivering higher quality
care at lower cost. An antitrust exemption for medical self-
regulatory organizations would allow organized medicine to
engage in a much higher level of anticompetitive activity,
thereby increasing costs and reducing the quality of care.
Notably, current antitrust law leaves broad leeway for health
care providers to collaborate in legitimate self-regulatory
activity.
Employer-led efforts to improve accountability and quality
in the health care system by making data available to health
care consumers has been a leading cause of the positive
changes in the health care market. This data has become
available--often in the face of provider resistance--only
because private employees took the initiative to develop it
and demand that providers supply it. Granting providers an
antitrust exemption, thereby permitting them to monopolize
the quality standard-setting process, will seriously erode
accountability for quality and value.
Another potential antitrust amendment would grant an
exemption to provider-sponsored organizations. Employers have
been able to control costs and improve quality by using their
purchasing power to create competitive health care markets.
An antitrust exemption for provider-sponsored organizations
would shift the balance between health care providers and
purchasers in favor of providers, undermining employers'
ability to be effective purchasers. Putting purchasers at a
disadvantage by changing antitrust law risks a return to
health care hyperinflation and unaccountability for quality.

opposition to point-of-service mandate

A recent Lewin-VHI study found that a point-of-service
mandate would add even more to the nation's health care bill
than an ``any willing provider'' mandate. Experience confirms
a point-of-service mandate's high cost. A study of Florida
employers' 1993 health crisis found that point-of-service
plans cost over 20 percent more than HMOs. Prohibiting
closed-panel plans from participating in Medicare would force
even those Medicare beneficiaries who want to enroll in a
closed-panel plan--such as the 3 million seniors who already
have chosen such plans over the traditional Medicare system--
to pay higher premiums.
A point-of-service mandate undermines the entire purpose of
Medicare reform. Because the traditional Medicare program is
unsustainable, the Finance Committee bill encourages
beneficiaries to shift to private health plans. A point-of-
service mandate would drive up private plans' costs,
encouraging continued enrollment in the government-run
system. As a result, Medicare reform would fail to produce a
modernized, more efficient Medicare.
Both point-of-service plans and closed panel plans have
earned an important place in the market--based on consumers'
choices, not government mandates. In fact, employers have
found that employee enrollment in closed panel HMOs increased
at the same time that point-of-service plan availability and
enrollment increased. Market forces rather than government
microregulation should determine point-of-service plans' role
in Medicare. Certainly, the federal government should not
deny consumers the freedom to choose and the savings of
private health plans that only contract with selected
providers. Moreover, the Finance Committee bill requires all
plans that only contract with selected providers, like every
other private plan (but not the traditional government-run
Medicare program), to meet quality standards.
The Finance Committee made the right choice by keeping
antitrust exemptions for organized medicine and a point-of-
service mandate out of its Medicare reform bill. We urge you
to oppose any floor amendments that would add these
provisions, or any other antimanaged care rules, to the
Finance Committee's Medicare bill.
____

National Association of

Attorneys General,

Washington, DC, October 26, 1995.
Hon. Newt Gingrich,
Speaker of the House, House of Representatives,
Washington, DC.
Dear Speaker Gingrich: As Chair and Vice-Chair of the
Antitrust Committee and Chair and Vice-Chair of the Health
Care Task Force of the National Association of Attorneys
General (NAAG), we are writing to express our concern about
two antitrust provisions included in H.R. 2425, the Medicare
Preservation Act of 1995. These provisions, sections 15021
and 15221 of the Act, are unnecessary and could frustrate the
cost-containment goals of the Medicare legislation. We urge
that these provisions not be included in the final Medicare
reform package.
The Attorneys General, as chief law officers of their
states, are the primary enforcers of the states' antitrust
law, and also represent their states and the citizens of
their states in federal antitrust litigation. As chief legal
officers, the Attorneys General have had and continue to have
an important role in the development of national competition
policy. We know first-hand that the antitrust laws benefit
consumers by protecting competition and promoting efficiency,
innovation, low prices, better management and greater
consumer choice. Although the Attorneys General as a group
have not had an opportunity to consider this legislation,
past NAAG policy positions have consistently opposed both new
antitrust exemptions and the weakening of antitrust
enforcement standards for specific industries.
Section 15221 of the Act provides an exemption from both
state and federal antitrust laws for activity relating to
medical self-regulation. We believe that inclusion of this
provision is inadvisable. Unfortunately, state Attorneys
General have had experience with physicians and other health
care providers who have engaged in anticompetitive
activities, including physicians' attempts to eliminate
competition from HMOs, PPOs and allied health care
professionals. For this reason, in a 1993 Resolution, the
Attorneys General stated their belief that exempting health
care providers from the antitrust laws is undesirable. Nor is
the exemption contained in section 15221 necessary. Current
antitrust law permits collaborative activities, including
standard-setting activities, that benefit the public and do
not injure competition.
Section 15021 of the Act provides that certain actions of a
provider service network or an individual member of that
network shall not be deemed illegal per se under either
federal or state antitrust law, but shall instead be judged
under the ``rule of reason.'' We are concerned that this
relaxation of antitrust standards could lead to higher
prices and fewer choices for consumers. Under current law,
per se treatment is reserved for the most anticompetitive
conduct, including horizontal price-fixing. As stated in a
1986 NAAG Resolution, the Attorneys General oppose new
industry-specific antitrust standards because present
antitrust standards adequately protect the interests of
businesses, as well as consumers, by preventing activities
that have no pro-competitive justification. More
specifically, in the health care area, the Attorneys
General believe that competition promotes more affordable
health care, development of innovative new delivery
systems, and increased information for health care
consumers.
Finally, we are concerned about the broad preemption of
state antitrust enforcement, particularly in section 15221,
which is not limited to protection of activities within the
Medicare program. In a 1994 Resolution, the

[[Page S 17327]]
Attorneys General opposed preemption of state antitrust enforcement in
the health care area because such preemption crodes state
sovereignty and threatens the system of federalism
established by the Constitution. Health care is predominately
a local industry that varies significantly from state to
state. The Attorneys General, as chief law enforcement
officers, should continue to be able to prevent
anticompetitive behavior within each state.
If you have any questions about our views, please feel free
to contact us or Emily Myers, NAAG Counsel for Antitrust and
Health at (202) 434-8015.
Very truly yours,
J. Joseph Curran, Jr.,
Attorney General of Maryland, Chair, NAAG Antitrust
Committee.
Tom Miller,
Attorney General of Iowa, Vice-Chair, NAAG Antitrust
Committee.
Pamela Fanning Carter,
Attorney General of Indiana, Chair, NAAG Health Care Task
Force.
Jeffrey L. Amestoy,
Attorney General of Vermont, Vice-Chair, NAAG Health Care
Task Force.
____

November 17, 1995.
Dear Senator. It is our understanding that the
reconciliation bill before the Senate includes a number of
anti-consumer provisions which may violate the Byrd rule.
Those provisions include antitrust exemptions for provider
service networks, elimination of laboratory testing standards
for most tests performed in physician offices, preemption of
state authority to implement consumer protection standards
for managed care plans and physician self-referral.
On behalf of the following organizations, we strongly ask
that you support every effort to remove these harmful
provisions from the reconciliation bill. Inclusion of the
items listed above will drive up costs, threaten patient
safety and reduce the quality of health care for all
Americans.
Sincerely,
AIDS Action Council, American Public Health Association,
Church Women United, Citizen Action, Consumer
Federation of America, Consumers Union, National
Association of Social Workers, National Farmers Union,
National Council of Senior Citizens, Neighbor To
Neighbor, Public Citizen's Congress Watch, Service
Employees International Union.

The PRESIDING OFFICER. The Senator from Florida is recognized for a
minute.
Mr. GRAHAM. Madam President, I would like to ask if the Senator from
Arizona would please respond to a question. I hope they could be
answered ``yes'' or ``no''.
Mr. KYL. If I can.
Mr. GRAHAM. Does this provision relate exclusively to the Federal, or
does it apply to State antitrust law?
Mr. KYL. My understanding is that it applies to both Federal and
State.
Mr. GRAHAM. Please refer to the bottom line, page 17, No. 2. Does
this provision relate exclusively to Medicaid, or does it apply to
other forms of health care?
Mr. KYL. It refers only to the Medicare contracts, and the
organizations pursuant to obtaining the Medicare contract.
Mr. GRAHAM. I would ask the Senator to refer to 318, paragraph B.
Thank you, Madam President.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, the Byrd rule was put into effect--not
that it would rule all the time but that it would be waived.
I submit that anybody in this body that wants the Medicare law to
work in rural areas, if you talked to anybody in rural areas, they will
tell you one of the most important things pending before us, to see
that we get delivery in rural areas, is this provision which is being
dropped, if we make it subject to the Byrd rule. Because, without it in
rural areas there will be no ability for doctors and hospitals in the
rural areas to get together and have new units to deliver health care.
There will be no competition and no service except for monster HMOs in
the rural areas.
We really ought to waive the Byrd rule in this instance.
I yield the floor.
The PRESIDING OFFICER. All time has expired. The question is on
agreeing to the motion to waive the Congressional Budget Act with
respect to the antitrust provision. On this question, the yeas and nays
have been ordered, and the clerk will call the roll.
The legislative clerk called the roll.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
who desire to vote?
The yeas and nays resulted--yeas 54, nays 45, as follows:

[Rollcall Vote No. 583 Leg.]

YEAS--54

Abraham
Ashcroft
Baucus
Bennett
Bond
Breaux
Brown
Burns
Campbell
Coats
Cochran
Cohen
Coverdell
Craig
D'Amato
DeWine
Dole
Domenici
Faircloth
Frist
Gorton
Gramm
Grams
Grassley
Gregg
Hatch
Hatfield
Helms
Hutchison
Inhofe
Jeffords
Kassebaum
Kempthorne
Kyl
Lott
Lugar
Mack
McCain
McConnell
Murkowski
Nickles
Nunn
Pressler
Roth
Santorum
Shelby
Simpson
Smith
Snowe
Stevens
Thomas
Thompson
Thurmond
Warner

NAYS--45

Akaka
Biden
Bingaman
Boxer
Bradley
Bryan
Bumpers
Byrd
Chafee
Conrad
Daschle
Dodd
Dorgan
Exon
Feingold
Feinstein
Ford
Glenn
Graham
Harkin
Heflin
Hollings
Inouye
Johnston
Kennedy
Kerrey
Kerry
Kohl
Lautenberg
Leahy
Levin
Lieberman
Mikulski
Moseley-Braun
Moynihan
Murray
Pell
Pryor
Reid
Robb
Rockefeller
Sarbanes
Simon
Specter
Wellstone
The PRESIDING OFFICER. On this vote, the yeas are 54, the nays are
45. Three-fifths of the Senators duly chosen and sworn not having voted
in the affirmative, the motion is not agreed to.
The Chair is prepared to rule on the points of order made by the
Senator from Nebraska.
The Chair sustains both points of order.
The question before the Senate is whether the Senate shall recede
from its amendment to H.R. 2491 and concur therein with a further
amendment. Pursuant to the Budget Act, that amendment is the text of
the conference report (House Report 104-350) excluding the provisions
stricken on the points of order.
According to the previous order, each leader and each manager have 5
minutes for debate.
Who seeks recognition? Who seeks recognition under the previous
order? Under the previous order, each leader and each manager has 5
minutes.
The Senator from Nebraska is recognized for 5 minutes.
(Mr. GORTON assumed the chair.)
Mr. EXON. Mr. President, in a few minutes, the Senate will
unfortunately adopt this conference report to the reconciliation bill.
Although I will not vote for the legislation, I certainly want to
congratulate Chairman Domenici for his leadership and for the many
months of yeoman labor that he put in on this piece of legislation. He
made the hard choices, some good and, in my opinion, many bad, but he
was a true leader of great merit, and I congratulate him.
Mr. President, my colleagues on the other side of the aisle will
savor their victory, but I must also say to all Senators that it is
time to move on. With victory short lived and the fate of this bill
certain, it will soon take its place in veto history.
Mr. President, where do we go from here? In my 17 years in the
Senate, I have never seen such a poisonous atmosphere as the one that
hangs thick over the Nation's Capitol. The nervous truce that existed
in January has collapsed. We are, in the words of President Lincoln,
``a house divided against itself.'' I still nurture the hope that we
will find a way out of this morass and that our leaders--especially
those in the other body--will set aside pettiness, vanity, and rigid
ideology for the good of the Nation. There is no honor in the dishonor
that has been brought about by the actions of the last few days and the
last few hours.
I firmly believe, with every fiber in my body, that we should balance
the budget. So do the American people. It is the stark route that the
Republican majority took, however, that cleaves our ranks.
I tell my Republican friends that if we ever can come to an agreement
on a balanced budget, we cannot adhere to the current formulas that
exist in the conference report. It hobbles any hope that we can redeem
our differences in a constructive alliance to balance the budget. But
we must keep trying.
I yield my remaining time.

[[Page S 17328]]

The PRESIDING OFFICER. Under the previous order, the Senator from New
Mexico is recognized.
Mr. DOMENICI. Mr. President, fellow Senators, I have a lot of people
to thank for this evening. While the Senators on that side do not think
it is a very joyous or auspicious occasion, Senators on this side do,
and I do. I have waited a long time, as a U.S. Senator, to see this
evening arrive. It is truly a historic opportunity for politicians
because, as I see it, this was the one chance we have to vote for the
future. We have an opportunity every day to vote for something for
today, a program for today, something to give to people today. But,
essentially, what we are voting on this evening is a vote for the
future of this country and for children not yet born and for those who
are not yet receiving anything from the Federal Government, but who
want an opportunity and have a dream.
We are saying the one thing that makes that more and more difficult
is 25 years of fiscal policy that has the United States borrowing as if
no one else needed any money, as if those that work, those that need
investment did not need money, just the Federal Government needed it.
And it was like we were a money tree, America was a money tree, and the
money all went to Washington. And when we did not have enough, we
borrowed it from foreigners--from Japan, from our banks, from our
people. The question is: Who will pay the piper?
We have decided here tonight that the piper will not be our children
and grandchildren, but rather in due course, the adults who live today
will pay for what we give to our people today and provide a future for
our children and grandchildren.
Now, I understand that the President is going to veto this bill, and
I have a word for the President. Since he has told us in advance, I
would like to tell him in advance. As he sits down with his veto pen, I
hope he feels heavy, because on his shoulders is our future and our
children's future. As he signs with that left hand of his, he better
have something pretty good in mind for our children in the future,
because he is throwing away a real legacy of opportunity, and he better
be prepared to tell us and tell the American people and tell our senior
citizens what he has in mind, because I have not seen anything yet that
he has in mind that comes anywhere close to what we are giving to our
children and grandchildren here tonight when we vote ``aye'' on this
measure.
For those who have voted these many times--58 votes on the budget
resolution, and I do not know how many different times--I say to each
one of them, your vote was not in vain. And if those on the other side
and in the White House think they will use this against us, just think
what we are going to use against them if this President vetoes this and
we end up with nothing.
For those who are against that, there is a real chance that we will
get nothing, except $200 billion in deficits for as far as the eye can
see. I also say to those who voted for it, and will vote for it again
tonight, you have changed the course of fiscal policy and the way we
spend our people's money forever, because no longer will a Budget
Committee in the future have its hearings and hear ``there is no way we
can cut spending, and we cannot do this and we cannot cut that.''
Well, we have shown that, in a very fair way, we can do what is
necessary to get a balanced budget. So we have changed forever the
profligacy of a great Nation, and we ought to be proud of it and
thankful for it.
To all the chairmen who worked so hard, thank you. I want to close
and say to our leader, Senator Dole, thank you for all the confidence
you placed in me. When I had to get things done, you told me ``do
them.'' When I needed tough decisions and I could not get the votes,
you said, ``Bring them in my office.'' And last, I thank the
budgeteers. You have a tough job; you do not get to pass anything
except this crazy resolution that cuts everything, but I thank you for
your unity and your support. It has been a privilege being your
chairman. Thank you very much.
The PRESIDING OFFICER. Under the previous order, the Democratic
leader is recognized for a period of not to exceed 5 minutes.
Mr. DASCHLE. Mr. President, I yield 2 minutes to the Senator from New
Jersey.
Mr. BRADLEY. Mr. President, this reconciliation bill, from top to
bottom, is intoxicated with the fantasy that it is abandoning the
welfare state. Mr. President, we do not have a welfare state, we have a
safety net for a few poor people. This drives big holes in that safety
net. Welfare reform--block grants replace welfare. What it does is take
money from Federal pols and give it to State pols. The theory is, if
you do not like Washington, you are going to love Lansing, or Trenton,
or the State capital. Hardly. What this does is, in the Federal
commitment to poor children, 1.2 million more children will be plunged
into poverty because of this. The Medicaid block grant. Send it all
back to the States. Do not say who is eligible, and do not say what the
benefits will be, or how the providers will provide the benefits. Just
send the money back.
The only thing we know is that when we pass this bill, 12 million
Americans will be uninsured. Uninsured. I predict that, 5 years from
now, there will be Medicaid scandals in States where Governors are
putting in a health care program that will help their constituencies.
Why are State governments different? They are not. For what purpose?
The purpose is that we are giving a gigantic break to wealthy
Americans. On the other side, they say, ``Oh, no, only 35 percent of
the cut goes to people above $75,000.'' Yes, but they only represent 13
percent of the people. And embedded in this bill for estates of $2.5
million is an $800,000 tax cut. At the same time, we are ripping holes
in the safety net, we are giving estates of $2.5 million an $800,000
tax cut. We should say ``no.''
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. DASCHLE. Mr. President, I want to commend the distinguished
ranking member for the excellent job he has done in representing our
caucus and commend all of the Members who have played a role in on our
side, as we have debated this bill.
I believe that this is the most dangerous document in America. I
believe it is one of the most extreme documents that we have had before
this Congress in the time that I have served here. When the lowest 20
percent of the people in this country lose more than all the other 80
percent combined, that is extreme. When the upper 20 percent gain more
than all the other 80 percent combined, that is extreme.
When you see the biggest shift in income from the middle class to the
top brackets in history--Mr. President, there is no other word to
describe it but extreme. When it represents the biggest cut in health
care benefits in history, Mr. President, this document belongs in the
Guinness Book of World Records.
The American people did not vote to see the kind of change this
document represents. No one in this country voted to gut Medicare $270
billion to provide tax breaks for those who do not need them. No one
voted to cut Medicaid $163 billion to provide tax breaks for those who
do not need them.
The distinguished Senator from New Mexico talked about protecting our
children. How in Heaven's name do we protect our children when we cut
the legs out from under them in education, in student loans, in
nutrition programs, in housing, in virtually every single area of
opportunity this country has provided them--how do we do that? How in
the name of children can we stand up and support this document?
Mr. President, we can do better than this. The American people now by
more than a 2 to 1 margin believe--demand--we do better than this. The
President will veto it, and he has good reason to veto it.
We need to sit down together and take the extreme measures out of
this document. We need to work to govern better. We need to send a
better message to the American people.
We will not gut the investments in people that we have committed to
for a long, long time. The most dangerous document in America needs to
be vetoed and, indeed, it will be.
The PRESIDING OFFICER. Under the previous order the majority leader
is recognized for 5 minutes.
Mr. DOLE. Mr. President, I think probably the most extreme thing that
has happened in the last 2 or 3 years is

[[Page S 17329]]
the $265 billion tax increase passed by this Congress without a single
Republican vote. You talk about extremism--that is a good example,
particularly when the initiator confesses that he raised taxes too
much, the President of the United States.
I believe we have a good package here. We have had a lot of work, and
I want to thank, first of all, Senator Domenici and the entire Budget
Committee, but everyone else on this side of the aisle who have been
working the past several weeks to bring us to this moment.
I really believe, and I am sitting here thinking I have cast a lot of
votes in the U.S. Senate. I think this is probably the most important
one that I will cast, knowing it is not bipartisan. I would like to
have it bipartisan. But it is a very important vote. It is a
fundamental change in America. It is a fundamental change in direction
in this country. I think it is probably the most important vote I have
cast in my years in the Senate.
I have never been so certain that we are doing something right--yes,
right--for our children, as the Senator from New Mexico pointed out,
for our grandchildren, and for everybody else.
It is right for States. Yes, we are giving some power back to the
Governors. We are following the admonition of the 10th amendment of the
Constitution, part of the Bill of Rights, 28 words in length, that
says, in effect, if the power is not reserved to the Federal Government
it belongs to the States and to the people. We believe when the people
gave us a majority last November, they wanted us to give power back to
the States and back to the people.

This bill is right for senior citizens. We will save, preserve, and
strengthen Medicare. It will still grow at a rate of 6.4 percent. We
believe that is a step in the right direction.
But looking at other beneficiaries, somebody who buys a home will
save a lot of money because interest rates will come down. If you buy a
car, if you are going to buy farm machinery, if you take out a loan to
send your child to college, or if you are trapped in a failed welfare
system--not anyone in this body would say we do not have a failed
welfare system.
It seems to me that if we are going to promise to end business as
usual, we have to start putting up or shutting up. We cannot do all of
the things that my colleagues on the other side say--keep spending more
money, spending more money, more taxes, more regulations, more
government--and ever make a fundamental shift in America.
I hope, again, knowing the bill is going to be vetoed, but I hope the
American people know that we are not going to mortgage their future
with this bill; that we are going to cut taxes for families with
children; we are going to encourage savings and investment and economic
growth. We have kept our promise. We kept our promise to shift power
out of Washington, DC, to the States, and we have kept our promise
there.
I just conclude, because I know there are some of us going to another
debate, and some are getting nervous, which is all right with me, but I
simply ask the President of the United States to take another look at
this product. This is a good product, Mr. President. You ought to sign
it. You ought to make up for all the things you have done wrong in the
past 3 years and sign this bill. Then you would be right on target
again. You would be that new Democrat you wanted to be or thought you
were or might have been.
Mr. President, we are doing the right thing. We are doing it because
we stuck together, because we kept our promise, and because we love
America.
Mr. President, soon after my election to the Kansas State House of
Representatives, a reporter asked me whether I had a legislative
agenda. And I replied that my agenda was simple--it was to stand up for
what I thought was right.
And I have tried to follow that philosophy throughout my career.
In just a few minutes I will vote to approve the Balanced Budget Act
of 1995.
I believe the vote is one of the most historic votes ever taken in
this Chamber--and certainly the most important one I have cast in my
years in the Senate.
And as I cast my vote to approve this landmark legislation, I can say
that I have never been so certain that I am standing up for what's
right.
I have never been so certain that the U.S. Senate is standing up for
what is right.
Mr. President, the Balanced Budget Amendment Act of 1995 is right for
America's future.
It is right for the American people.
It is right for our children and grandchildren.
It is right for our States, our cities, and our neighborhoods.
It is right for our senior citizens.
It is right for every American who is saving to buy a home.
It is right for every American who is buying a car.
It is right for every American who takes out a loan to send a child
to college.
It is right for those trapped in our failed welfare system.
Mr. President, last fall, Republicans asked voters to give us a
majority on Capitol Hill. And we left absolutely no doubt about what we
would do if we got that majority.
We promised we would put an end to business as usual. Tonight,
Americans know that we have kept our promise.
We promised to stop the mortgaging of our children's and
grandchildren's future, and to put America on a path to a balanced
budget. Tonight, Americans know that we have kept our promise.
We promised to replace our failed welfare system with one based on
the principles of work, family, and personal responsibility. Tonight,
Americans know that we have kept our promise.
We promised to cut taxes for America's families, and to encourage
savings, investment, and economic growth. Tonight, Americans know that
we have kept our promise.
We promised to shift power out of Washington, DC, and to return it to
where it belongs--our States, our cities, and our people. And tonight
Americans know that we have kept our promise.
A balanced budget. True welfare reform. Lower taxes. More freedom and
power for our States, our cities, and our people. That's what
Republicans are all about. And that's what this bill is all about.
President Clinton has said that he will veto this bill. He will, as
is his habit, stand in the way of change. And I would simply say to the
President to take another look at this bill.
We are told that the President's pollsters are advising him that the
American people have concluded that his actions don't match his words.
By signing this bill, President Clinton would prove that his actions do
match his words on a number of issues.
President Clinton has told the American people many, many times that
he is for a balanced budget.
He said on June 4, 1992 he would balance the budget in 5 years.
He said on May 20, 1995, he could balance the budget in less than 10
years.
He said on June 13, 1995, he would take 10 years.
And on October 19, 1995 he said he could balance it in either 7
years, 8 years, or 9 years.
Despite these claims, President Clinton did everything he could to
defeat a balanced budget amendment, and the Congressional Budget
Office-- which the President has previously endorsed as an honest
scorekeeper--has said that the budgets the President did propose left
us with $200 million in deficits far into the next century.
President Clinton said in 1992 that he would end welfare as we know
it. Yet, he admitted recently that the only welfare bill he proposed
was a disappointment.
The President promised in 1992 that he would give middle-class
Americans a tax cut. Yet, in 1993 he gave America the largest tax
increase in history.
The President said that he wants to prevent Medicare from going
bankrupt, as three of his Cabinet members have projected it will do
within 7 years. Yet, he has refused to work in a bi-partisan manner
with Republicans to save Medicare. Instead, according to a remarkable
editorial in the Washington Post, the President has ``shamelessly used
the Medicare issue * * * demagogued on it * * * and taken to the
airwaves with a slick scare program.''
So, Americans have every reason to be confused. Just where does the
President stand on balancing the budget? Where does he stand on
reforming welfare? Where does he stand on cutting

[[Page S 17330]]
taxes for America's families? Where does he stand on saving Medicare?
The President's decision on this bill will, once and for all, clear
up all confusion. Because by signing this bill, the President will
finally allow his actions to match his words. But by vetoing it, he
will make very clear that he is against a balanced budget, and the
benefits it will bring. He is against welfare reform. He is against tax
reduction. He is against saving Medicare.
And by vetoing this bill, the President will be against many other
provisions. He will be against a capital gains tax cut. He will be
against putting an end to the marriage penalty tax. He will be against
medical savings accounts. He will be against adoption tax credits. He
will be against helping Americans who provide care to their parents.
Now, when President Clinton vetoes this bill, he will shake his head,
and he will say what many of his liberal allies have said today. He
will say that he would like to sign this bill, but it's just too harsh.
He will say that we are cutting spending on programs for the less
fortunate among us. He will say we are cutting Medicare. He will say
our tax cuts favor the business community.
He will say all that again and again. And he will be wrong every time
he says it.
He will be wrong because this bill does not cut overall Federal
spending--it allows it to grow by 22 percent over the next 7 years.
He will be wrong because this bill does not cut Medicare. In fact,
Medicare will continue to grow at a rate of 7.7 percent a year.
He will be wrong because this bill does not cut programs to the
needy--it allows 34 percent growth over the next 7 years.
He will be wrong because total funding for student loans will be
increased by nearly 50 percent over the next 7 years.
He will be wrong because 73 percent of the tax cuts in this bill will
help families throughout their lives.
Those are the facts. The President will try his best to obscure these
facts with emotional rhetoric. In fact, the Democrat National Committee
already has a television commercial on the air trumpeting the
President's so-called balanced budget proposal, and saying that the
Republican plan will cut Medicare.
It's a nice commercial with catchy music, but not a word of it is
true. As I have said, the President has never submitted a budget
anywhere near balance. And the Republican plan increases Medicare
spending.
Mr. President, I'm from a farm State, and I want to say to the
farmers of Kansas and the farmers of America that this bill is also
important to them.
Since the days of Franklin Roosevelt, the Government has been in the
business of telling farmers how to farm. Under this bill, that will
end, and beginning in 1996, farmers will be planting for the market
place.
Under this bill, farmers will have full planting flexibility,
elimination of set-asides, program simplicity, and a farm policy that
transitions farmers into the next century without disrupting the farm
economy or land values.
While I am concerned about farmers receiving payments in good years,
I am pleased we were able to cap the entitlement spending of
agriculture programs. We accomplish this goal through a declining
transition payment which is guaranteed to the farmer. In exchange,
farmers will be required to maintain their land conservation efforts in
both good and bad years. And this bill also protects family farms by
providing some much needed estate tax relief.
Mr. President, let me conclude by saying that I know that the
American people have wondered about the events taking place in
Washington this week. They have wondered why the Government was shut
down. They have wondered why Congress and the White House aren't
talking to each other.
Well, as I have said many times this week, I wonder why we haven't
spent more time talking to each other. And I remain ready to talk with
the President any time to put all Federal employees back to work.
But I also would tell Americans that if ever there was a debate you
wanted your elected Representatives to have, this is it. This is it.
Because we are debating your future. We are debating the future of your
children and grandchildren. We are debating the future of America.
I speak for all Republicans in saying that, as we approach
Thanksgiving, we are thankful to have the opportunity to stand for
something.
We are thankful to have the opportunity to stand for fundamental
change.
We are thankful to have the opportunity to stand for a better future
for the next generation of Americans.
And let me close by saying--and I know I speak for all Members of the
Senate--that we are thankful that we have the opportunity to serve with
a Senator as courageous and committed as Pete Domenici, and I salute
him for his many years of leadership in support of a balanced budget.
Mr. President, let's do the right thing for America's future. Let's
pass the Balanced Budget Act of 1995.
The PRESIDING OFFICER. The majority leader is informed the yeas and
nays have not been ordered.
Mr. DOLE. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The question is on agreeing to the motion to
recede from the Senate amendment to H.R. 2491 and concur thereto with
an amendment.
The yeas and nays have been ordered.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 52, nays 47, as follows:

[Rollcall Vote No. 584 Leg.]

YEAS--52

Abraham
Ashcroft
Bennett
Bond
Brown
Burns
Campbell
Chafee
Coats
Cochran
Coverdell
Craig
D'Amato
DeWine
Dole
Domenici
Faircloth
Frist
Gorton
Gramm
Grams
Grassley
Gregg
Hatch
Hatfield
Helms
Hutchison
Inhofe
Jeffords
Kassebaum
Kempthorne
Kyl
Lott
Lugar
Mack
McCain
McConnell
Murkowski
Nickles
Pressler
Roth
Santorum
Shelby
Simpson
Smith
Snowe
Specter
Stevens
Thomas
Thompson
Thurmond
Warner

NAYS--47

Akaka
Baucus
Biden
Bingaman
Boxer
Bradley
Breaux
Bryan
Bumpers
Byrd
Cohen
Conrad
Daschle
Dodd
Dorgan
Exon
Feingold
Feinstein
Ford
Glenn
Graham
Harkin
Heflin
Hollings
Inouye
Johnston
Kennedy
Kerrey
Kerry
Kohl
Lautenberg
Leahy
Levin
Lieberman
Mikulski
Moseley-Braun
Moynihan
Murray
Nunn
Pell
Pryor
Reid
Robb
Rockefeller
Sarbanes
Simon
Wellstone
So the motion was agreed to.
Mr. COATS. Mr. President, I move to reconsider the vote.
Mr. KEMPTHORNE. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mrs. BOXER addressed the Chair.
The PRESIDING OFFICER. The Senator from California.
Mrs. BOXER Mr. President, I will make a unanimous-consent request to
the Republican side. I anticipate, as they did last night, they will
once more object.
I would ask that there be order in the Chamber?
The PRESIDING OFFICER. The Senate will be in order. The Senator from
California was propounding a unanimous-consent request but no one could
hear.
The Senator from California.
Mrs. BOXER. Mr. President, in about 3 minutes I will offer my
unanimous-consent request. But I do appreciate your getting order in
the Chamber so that I can make a comment very briefly for a minute on
another matter, and then talk about my unanimous-consent request.

____________________