Opening Statement of the Hon. Fortney Pete Stark,
 a Representative in Congress from the State of California

Hearing on the President's Fiscal Year 2003 Budget

February 6, 2002

First I'd like to thank Secretary Thompson for being with us today to help illuminate the details of President Bush's health care priorities since one cannot read the budget documents and ascertain much in that regard.

Unfortunately, this budget is like much of what we've seen out of the Bush Administration with regard to domestic spending priorities: it is long on rhetoric and short on policy and dollars to get the job done.

So much for a Social Security or Medicare lock-box. This budget spends both of these trust funds for the foreseeable future just to run the government. This is hardly sound budgeting. We know we've got an explosion of Social Security and Medicare beneficiaries at the end of the decade - we should be saving for those costs -- not blowing the bank now.

We all know that dedicating $190 billion over 10 years for a Medicare prescription drug benefit doesn't come close to providing the necessary funding. To create a meaningful prescription drug benefit -- one that provides each Medicare beneficiary with even a decent prescription drug benefit - would probably cost at least $500 billion over that timeframe.

We also know that the $190 billion allocated in the President's budget doesn't all go to prescription drug benefit. $77 billion of these funds are optional money to the states should they choose to expand prescription drug benefits in Medicaid to seniors between 100-150% of poverty. There is no requirement that the states spend any of this money and actually provide drug coverage for anyone. The only two other prescription drug proposals highlighted in the President's budget are a waiver program, described as a budget neutral way for states to expand drug coverage, and the President's phony prescription drug discount card. In fact, much of the remaining funds seem to go to Administration efforts to "reform" Medicare by turning it into a voucher system in which government funds are protected and the financial burdens on seniors increase.

The President claims to want to help the uninsured get health insurance. Unfortunately, he has proposed a tax credit which simply won't accomplish that goal.

These tax credits begin phasing out for individuals at $15,000 income and families with $25,000 in annual income. The subsidy level of $1000/$3000 will not cover half the cost of a standard health insurance plan ($2600 individual/$7000 family). For families with incomes below $25,000, they would have to spend some 10-15% of their gross incomes to be able to afford a policy under this proposal - and that is only if they are healthy enough to qualify for coverage. Those costs are too high for a family making decisions about paying the mortgage, or putting dinner on the table, not to mention buying a health insurance policy.

Expanding health insurance for the uninsured is a goal I hope all of us share. I would advocate building on existing government programs as a much more effective method of expanding coverage and urge you to remain open to such alternatives this year.

There are many other components of the President's health care budget which I haven't touched on. But, I think I will close with my belief that the presentation of a budget is really a list of priorities. It is clear from the President's 2003 Budget that providing a prescription drug benefit to seniors ranks far below providing tax breaks to the wealthy. It is obvious that steps for expanding access to health insurance will be small. Clearly, it will be up to Congress to come up with policies in both of these arenas if we are to see real advancements in the near future.

I look forward to hearing from the Secretary with his thoughts on these matters.