Amy in the News
Klobuchar Speaks on Importance of Protecting Medicare
May 25, 2011
Mr. President, I rise to discuss the budget. I have long believed we need to get serious about the deficit. I have been listening to my colleagues across the aisle, and I believe we have to be responsible in the way we do it. That is why a year ago I was one of a handful of Senators who fought for the creation of the fiscal debt commission. In fact, a number of us came together and said we are going to get this debt commission or we won't vote for the debt ceiling increase. As a result, while we could not get the statutory fiscal debt commission, we got the debt commission. A lot of people thought it would result in a report that would sit on a dusty shelf, but it has been well received, and it is the blueprint for a group of Senators who are negotiating a bipartisan plan for the budget.
Like everybody, I don't agree with every single recommendation in that report. But I have, in fact, supported the bipartisan effort. I think there are a lot of good things in that report and a very strong way to reduce the debt in the long term.
This week, we are scheduled to vote on the Ryan budget. If it wasn't already crystal clear, this vote will show that a comprehensive solution to our fiscal challenges cannot be achieved by drawing ideological lines in the sand.
When the Ryan budget was first rolled out, some hailed it as courageous. But I have to ask how it can be called "courageous" when it protects the $4 billion a year we give to oil companies, it fails to address some of the military defense spending that even Secretary Gates has said could be cut. Instead the House passed its budgets on the backs of the middle class and seniors. In Minnesota, we don't call that courageous.
Before we get into the policy, we should step back and look at the numbers. According to the CBO, our debt is currently projected to reach 67 percent of GDP in 2022, but under the Ryan plan debt would actually reach 70 percent of GDP by 2022.
So despite $4.3 trillion in drastic and painful cuts--two-thirds of which would come on the backs of the middle class--the plan barely reduces deficits at all over the next decade.
Despite the fact that the budget doesn't achieve what it sets out to accomplish in deficit reduction, leaders in the House continue to try to frame the debate in terms of numbers. That is because when you take their plan to the American people and ask them, "Are these your priorities?" and, "are these your values?" the resounding answer is, "no." The American people want a reasonable, bipartisan plan that addresses our serious challenges. That House Ryan budget is not the answer. What this debate boils down to is not where we need to get but how we will get there.
I believe we need to reduce this debt. I believe we can reduce that $4 trillion in the next 10 years. I believe there is a much better way to do it than what we have seen in the Ryan budget.
It may look like this plan to end Medicare that they passed in the House is reducing health care costs, but it only does so by ending Medicare as we know it.
This plan would gradually replace Medicare with a system of vouchers that seniors could use to help buy private health insurance. This would put private companies in control of health benefits and cause seniors to pay more for their health care or get fewer benefits.
Because the voucher will fail to keep pace with increases in the cost of health care, the Congressional Budget Office estimates that seniors and the disabled would pay sharply more for Medicare coverage under the Ryan plan--an average of $6,359 more in the first year, more than double the cost under current law.
Defenders of this plan say it won't affect anyone who is over 55 and that Medicare will be available for them. Unfortunately, this isn't true. The Ryan plan would repeal the part of the health care reform law that closes the Medicare prescription drug "doughnut hole." This is the gap in coverage where seniors have to pay all of the costs of their prescription drugs. Currently, that number is a little over $3,600. This would mean seniors would have to pay much more out of pocket for prescription drugs. In Minnesota, that would cost our seniors $40 million in 2012 in additional drug costs alone.
I believe we must do all we can to rein in health care costs. Minnesota has always been a leader in providing low-cost, high-quality health care, and I believe we can be an example of how we can reduce health care spending, while still delivering excellent care to patients.
For instance, if the spending per patient with chronic diseases everywhere in the country mirrored the efficient level of spending in the Mayo Clinic's home region of Rochester, MN, Medicare could have saved $50 billion over 5 years. Medicare could have saved $50 billion over 5 years by using the Mayo model--some of the highest quality health care in the world. So, yes, there are ways we can better deliver health care not only for less cost but also for better results.
Medicare must continue to institute further reforms including the creation of the accountable care organizations, reductions in payments to hospitals with high readmission rates, bundled payments, and a focus on fraud. These reforms are meant to incentivize doctors and hospitals to provide high-quality, efficient care.
The radical changes to Medicare that are proposed in the Ryan budget are not solutions to our long-term debt. There is a way to get the country on a better fiscal path, one where you are not doing it on the backs of our seniors. You would think that if you were going to take such a drastic step as any Medicare as we know it, you would put most of the savings toward deficit reduction. Instead, the Ryan budget uses its $4.3 trillion in savings for $4.2 trillion in tax breaks that would disproportionately go to the wealthiest Americans. Again, instead of putting that money into deficit savings, it disproportionately puts the money in the pockets of the wealthiest Americans.
At the same time the House Republican budget is disproportionately targeting seniors and the middle class, it leaves the Pentagon--which makes up 20 percent of the budget--virtually untouched. Defense Secretary Gates himself has mapped out several smart cuts and alternatives we can make to the Defense budget to save a net $78 billion over the next 5 years. In the spirit of shared sacrifice, I agree we should include commonsense cuts to defense spending to reduce the Federal budget.
Those are just some of the ideas. This basically comes down to value. Look what we can save. We can save $240 million--$240 million--simply by negotiating prescription drug costs under Medicare Part D--$240 million over 10 years. We can save $4 billion annually--that is $40 billion over 10 years--by taking away the tax breaks of the oil companies. We can save $78 billion with the defense cuts I just discussed. We can bring the tax rates back to the Clinton levels for people making over $1 million. Even if we set it at $1 million, we save $360 million over 10 years. That is real money. That is a budget that is based on values that protect the middle class.
When I talk to the people of my State, they want a plan that has shared sacrifice, that is reasonable, and that is bipartisan. They want a balanced and reasonable approach. They want us to come together on a plan that will strengthen our country. I look forward to continuing to work across the aisle to make this happen. Unfortunately, that is not what this Ryan budget is about.
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