Subject: Gramm Fights New Socialist Health Care Plan GrammNet Issue 1/12/98.1 Dear Friend of Phil Gramm, Happy New Year! I apologize if you previously requested removal from GrammNet. Due to a computer crash I've had to return to an older list. Although he's not running for president anymore--and therefore not getting much media attention--Phil Gramm hasn't given up the fight to protect your liberty against the latest Clinton proposal for national socialist (fascist) health care. You may recall that at a time when most Republicans were falling all over themselves to accommodate Bill Clinton's first attempt to socialize the American health care system, Phil Gramm stood up and said, "This is socialism and it will pass over my cold, dead, political body." As we know, Gramm's political body is fine, but the first Clinton fascist health care plan is dead. That hasn't stopped Clinton from trying to accomplish piecemeal what he couldn't do in one fell swoop. His latest plan is to socialize health care for Americans aged 62 to 64 by expanding Medicare. Once again, most Republicans seem to lack the courage to stand up to this latest expansion of government power. But as the following interview with Phil Gramm demonstrates, he still has the courage that allowed him to lead the charge that killed the original Clinton fascist health care plan. Sincerely, David B. Levenstam, CPA, MT, MA ------------------- TRANSCRIPT January 11, 1998 U.S. SENATOR PHIL GRAMM (R-TX) INTERVIEWED ON CBS FACE THE NATION (+) SCHIEFFER: Today on FACE THE NATION, the president's plan to expand Medicare -- is it a good deal for you, or will it wreck a system already in trouble? The president startled the Republicans last week with his proposal that will let younger Americans buy into Medicare. Sounds good, but Republican Senator Phil Gramm says the president's just creating another costly entitlement program. He'll square off with Democratic Senator Chris Dodd. Health and Human Services Secretary Donna Shalala will tell us how the president intends to pay for the expansion. We'll also have a spot check on the controversy over human cloning when we talk to presidential adviser Doctor Thomas Murray. Gloria Borger has learned the ``Real Deal'' on a new proposal to settle the Paula Jones lawsuit against the president, and I'll have a final word on the latest Republican dispute over abortion. But first, expanding Medicare on FACE THE NATION. (COMMERCIAL BREAK) SCHIEFFER: And good morning, again. We start in Hartford, Connecticut, with Senator Chris Dodd. Senator Phil Gramm is here in our Washington studio, as is Gloria Borger to join in the questioning. Well, this week the president came forward with his plan to expand Medicare. He wants to open it for the first time to those ages 62 to 65, also to make it available to some people who are out of work, as young as 55. It sounds good. They have to buy into the plan, and the president says that this way it will pay for itself. What's wrong with this plan, Senator Gramm? GRAMM: Well, Bob, let me first tell you my perspective. I'm chairman of the subcommittee that has the difficult task of keeping Medicare afloat, and so the reality check I have to apply is that, first of all, even with the reforms we just adopted, over the next 10 years, the existing Medicare program is going to be a $1 trillion drain on the federal treasury. Number two, a commission, appointed by President Clinton three years ago, the entitlement commission, concluded that at a minimum to keep Medicare afloat under the current system you're going to have to raise the payroll tax over the next 25 years for 2.9 percent to 14.1 percent of payroll. Now, that's the backdrop that I have in looking at this proposal, and as I said earlier in the week, when your momma's on the Titanic and it's sinking, your preoccupation is not with getting more people on board; it's with saving the system for the people who paid into it and for the people who have earned the benefits. Finally, the amazing thing is, in the last 10 years, millions of Americans have opted to go into HMOs and other prepaid systems with their Medicare benefit because Medicare is about 25 percent more expensive than alternative health care. They can get a better benefit package. And now the idea that some how we're going to bring younger people into Medicare and they're going to pay their share, you're going to get the sickest of Americans, and I don't see how $300 per person per month could possibly cover it. That means making the system weaker. SCHIEFFER: Well, that doesn't sound good. Senator Dodd, what's your answer to that? DODD: Well, this is -- first of all, these are all kind of the scare tactic approach. I mean, clearly, we've got a major problem. We now know that between 1989 and 1995, some 10 million otherwise eligible Americans lost their health insurance for a lot of different reasons. One, the cost of premiums went up. Employers decided to drop it. The co-payments were too expensive; employees dropped it. People getting sicker. People retiring earlier. A lot of people were being -- downsized is the euphemism -- being laid-off. And so we find ourselves with a substantial number of people -- some 10 million, about half of whom fall into the age category here of 55 to 65 -- that were without health insurance at a time when they're most vulnerable. And so what the president has proposed here is to give these people a chance to fill in that gap through their own contribution of participating in Medicare. Now, there are about three or four million people who fall into this category. It's estimated that about 300,000 will actually be able to take advantage of it, because as you pointed out, or Phil pointed out, there's a tariff of $300 or $400, depending on which part of the program you're in, per month. That's very expensive. So only about 10 percent of the total number will actually be allowed to participate. But it's at their own cost until they reach the age of 65. What is so outrageous about that? DODD: It seems to me if we can help these people who lose their jobs or who want to start a business on their own to allow them to participate at their own cost, this ought not to be that threatening. Now, you've got to look at it, you've got to weigh it, you've got to analyze the details of it. But we shouldn't be torpedoing this even before the idea has been laid on the table. SCHIEFFER: OK. Let's bring Gloria in. BORGER: Senator Dodd, isn't this then just for the wealthier people who can afford it? And some Democrats are saying you ought to subsidize people so they can afford these high monthly premiums? DODD: Yes, well, Gloria, that's not a bad point. No one's advocating -- the president's not advocating, nor am I, subsidizing because what Phil has pointed out here is accurate. There is going to be a shortfall here we've got to deal with. We came up with $115 billion in this last Congress to deal with the more immediate problem. We've got 10 years to deal with the issue of the cost of Medicare. With an aging population, you've got to deal with that. And obviously you want to look at the details. But I come back to the point here. We've got a real gap. You've got people hurting out here. They've worked all their lives. They've done everything right. And then, all of a sudden, they find themselves downsized, laid-off, without work, without health care coverage right at the moment they need it. Why not try something creative like this, which could be at no cost to the federal government because they're participating? And I'll agree with you -- it's going to be people who can afford to do this. But don't make the perfect the enemy of the good. If 300,000 people get coverage, that's pretty good. BORGER: Let me let Senator Gramm in here. GRAMM: Gloria, first of all, what Chris is leaving out is that the average cost of Medicare now is $5,600 a year. The president's talking about $3,600 a year. But even his own actuaries estimate that two out of three of the people who would take this offer already have private health insurance. BORGER: Is this all politics then? GRAMM: Well, I think it's a lot politics. If you really wanted to help people, you would help them get private health insurance. One of the proposals that The New York Times is talking about is, if you really wanted to help people in this age category, why not let them join the federal health care system where they can buy into that system at cost and where they could choose among 25 programs almost every one of which has better benefits than Medicare and is cheaper. But Medicare is a hospital-based system that was originated in 1965. We're trying to reform it now. The president signed a bill last year to let millions of people opt into private alternatives. And the idea that now you can help people by them buying into Medicare if they have to pay what it costs, nobody's going to be able to afford it. If they don't, it's going to bankrupt the system. SCHIEFFER: Would you say at this point that this proposal could pass the Congress? This is an election year. GRAMM: No, this proposal's not going to pass the Congress. DODD: Well, I doubt that. I think it will. GRAMM: Now there are things we could do to help people. For example, if I'm retired at 63, if my company pays for my health insurance, it's tax-free. If I pay for it, I've got to pay for it with after-tax dollars. I've tried to push the idea of giving people equity whether they buy their health insurance or their company does. If we had a legitimate proposal to help people get private health insurance, I think we'd have a real debate here. But I see this as about 95 percent politics. SCHIEFFER: Do you think it could pass, Senator Dodd? DODD: I do, and no one's excluding other ideas to be put on the table here. But remember this: The average cost of private health insurance for a person age 62 with a pre-existing condition is $1,000 a month. Now $300 a month is expensive. I don't argue with that. But when you compare it to the cost of private insurance for that individual in that area, it's substantially less. But we can look at these other ideas, but don't rule this out as an option here. You can allow people to be brought in. I think, frankly, when this is on the table, I think members will want to help out people in this category. We should be trying to figure out how you cover people in this area rather than excluding them and leaving them vulnerable to the tremendous cost of a health care crisis. SCHIEFFER: Senator Dodd, let me just -- for just a second, I want to ask Senator Gramm before we go about a Republican issue. The Republican National Committee is going to meet this week. They're going to propose to ban funds to Republican candidates who do not support a ban on partial-birth abortions. Is that a good idea? GRAMM: I'm not a litmus test kind of guy. The litmus test applied to me is when people vote in Texas. Nobody's going to tell me how to vote. GRAMM: When I was a Democrat, nobody told me how to vote on balancing the budget. And I ended up resigning from Congress and running as a Republican. I think trying to dictate to elected officials is a very bad policy for any party. And if people want to make policy, run for Congress. Don't run for national committee men if you want to set policy. SCHIEFFER: All right. We are going to leave it there. Thanks to both of you. We will be back in a minute to talk with Health and Human Services Secretary Donna Shalala about this Medicare proposal, child care and some other things. Gentlemen, thank you. GRAMM: Thank you.