Amendments would expedite cases and protect victims of rape, reaffirm Constitutional rights

Dr. Coburn filed the following amendments to the Violence Against Women Act, S.47.

Amendment #13 – This amendment would reaffirm the inalienable rights of every American citizen guaranteed by the Constitution of the United States by removing a provision of the bill that allows for tribal courts to have jurisdiction over non-Native Americans who commit a domestic violence crime in Native American countries or against a Native Americans.

Additional information here.

Amendment #15 – This amendment would more quickly resolve rape cases by reducing unnecessary duplication and overlap within the Department of Justice (DOJ) and the Department of Health and Human Services (HHS).  This amendment will provide at least $600 million to support solving sexual crimes from the savings reached by consolidating and streamlining federal programs. 

Additional information here.

Amendment #16 – This amendment would better protect rape victims from HIV/AIDS and other sexually transmitted diseases (STDs) by allowing for the testing of assailants and providing treatment to survivors who are at risk or infected. 

Additional information here.

Letter from Concerned Women for America supporting amendment #15 here.   

(WASHINGTON, D.C.) – Dr. Coburn released the following statement today regarding President Obama’s remarks on sequestration:

President Obama is right that targeted spending cuts are a better way to reduce the deficit than across-the-board cuts. I’m relieved he disagrees with some on his side who say cutting any spending, including wasteful spending, is austerity.

However, I’m disappointed the president today attempted to unilaterally change the terms of the debate on tax reform. Tax reform does not mean closing loopholes to solely pay down the deficit. Tax reform means closing loopholes to primarily lower rates for working families in order to promote economic growth, which has the effect of increasing tax revenues for the federal government. That is the balanced approach embraced by conservatives and liberals on his own Simpson-Bowles debt commission, and that understanding was the basis of President Reagan and Speaker O’Neill’s historic tax reform deal in 1986.

The balanced tax reform proposal in Simpson-Bowles proposed to use the savings from eliminating loopholes and breaks for the wealthy by primarily reducing tax rates for lower income families from 15 percent to as low as 8 percent. The president’s statement today suggests lower income families should keep paying higher rates. Ironically, the very tax earmarks the administration slipped into the fiscal cliff deal for special interests such as Hollywood movie producers, the wind industry and NASCAR, kept rates artificially high for lower income and middle class families. That’s not economic justice, and that’s a terrible way to grow our economy.

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(WASHINGTON, D.C.) – Today, U.S. Senators Tom Coburn, M.D. (R-OK) and Mark Udall (D-CO) will introduce a bill that would prohibit the use of Presidential Election Campaign Funds (PECF) for future political party nominating conventions.

During the 112^th Congress, Dr. Coburn and Sen. Udall introduced similar legislation (S. 3257) to abolish taxpayer money from being used for conventions. The legislation passed with a vote of 95 to 4 in the Senate as an amendment to the Agriculture Reform, Food, and Jobs Act of 2012 (S. 3240). Similarly, the House of Representatives passed H.R. 5912 in the 112^th Congress, a bill approved by a vote of 310-95 to end future federal funding of political conventions. However, neither piece of legislation was signed into law by the end of the 112^th Congress.

“Congress has tough decisions on deck that must be made in order to rein in our unsustainable debt and deficit, and this is one bipartisan step forward in right direction. Taxpayers should not foot the bill for events that are solely parties for polarized partisanship,” Dr. Coburn said. “With this common-sense legislation receiving previous bipartisan support and passage in both houses of Congress, I am hopeful members will act again to ensure the practice of subsidizing extravagant party conventions with taxpayer dollars is ended in the new Congress.”

"Over the past several decades, political party nominating conventions have become lavish and elaborate celebrations devoted to partisanship. At a time when we’re working to trim all unnecessary spending, it is a no-brainer for taxpayers to stop footing part of the bill for these large, expensive events, " Udall said. "The Senate passed this common-sense legislation by a broad bipartisan margin last year and the House of Representatives passed a similar bill, too, last year. This legislation is but one down payment on some of the larger decisions Congress will have to make to show that it is serious about fiscal discipline."

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Supporting documents

• View text of the legislation, here.

• Congressional Research Service report on public funding for Presidential Nominating Conventions.

• Examples of spending by-the-numbers: 2008 Republican National Convention Committee.

• Examples of spending by-the-numbers: 2008 Democratic National Convention Committee.

• Dr. Coburn called for the elimination of taxpayer subsidies for party conventions in his 2011 Wastebook report, citing this report from the Congressional Research Service on federal funding for 2012 Presidential nominating conventions.

• Additional explanation of how the Presidential Election Campaign Fund (PECF) operates.

• Background on other efforts from the Republican Study Caucus (RSC) to eliminate funding for conventions in 2009: here.

The Foreign Assistance Transparency and Accountability Act passed the House 390-0 earlier this month.

The Act directs the Obama administration to develop performance measures and metrics for foreign assistance programs and to report back to Congress in a year on the results. It also requires within two years the establishment of a website for information on foreign assistance.

However, there is already a website (www.foreignassistance.gov) that isn’t populated with information from the State Department or USAID. This bill makes no mention of the existing website which duplicates usaspending.gov mandated by the law that Dr. Coburn and then-Senator Obama sponsored called the Federal Funding Accountability and Transparency Act. This bill effectively requires the President to create a website in two years for something that already exists.

Regarding metrics and performance benchmarks, the bill’s intention is to enhance transparency and accountability within the federal government. However, the bill allows the federal government to develop its own grading system. Since the government has failed at metrics development in the past, this bill would provide little enhanced transparency since it essentially allows the federal government to develop, write, and then grade their own metrics test.

Under former President George W. Bush’s Administration, each program was given the following grades when looking at performance by the Office of Management and Budget (OMB): Effective, Not effective, or Results not demonstrated.

Using this previous standard, several commonsense questions can be raised about any program. For example, a simple set of metrics for foreign assistance would be: If the project is a road project, how many miles of road were built? What was the cost of dollars per mile?  Was it effective - did traffic and trade increase?  If it is a clean water program, how many people received clean water? What was the cost of dollars per gallon?  Was it effective - did disease rates go down? If it is a child literacy program, how many kids learned to read? Was it effective - did literacy rates go up? This is not a complicated process that requires years of study.

Unfortunately, there are no consequences in this legislation for the administration failing to follow existing law. Giving the administration until 2015 to use a website that exists today or to write up a report on metrics without instituting a single one of them is not reform and will harm the cause of transparency and accountability rather than help it.

Acting HHS General Counsel Bill Schultz's responses to Dr. Coburn's questions from December 20, 2012, nomination hearing available here.  Schultz has been nominated for the General Counsel position. 

Some in Washington want to simply raise tax rates without addressing the underlying waste, spending and corporate giveaways embedded in the tax code. While Congress continues to delay real tax reform Dr. Coburn exposes ten expenditures that could be immediately eliminated or reformed to reduce the deficit by more than $130 billion over the next ten years, including tax breaks for millionaires, the NFL, Hollywood, and NASCAR. Masquerading as tax cuts, many of these programs are no different from any other federal program that spends taxpayer money. Cleaning up the code by eliminating the most egregious tax giveaways will not only generate revenue, but also pave the way for reducing tax rates for all Americans and small businesses. Full overview available here.

Two new studies largely confirm the nature of concerns Sens. Thune, Burr, Roberts, and recently raised about the management and outcomes of the Administration’s electronic health record program. In their letter, the Senators asked the Administration four questions, including (1) whether “the use of taxpayer-subsidized electronic health records (EHRs), in some circumstances, actually increase[s] the utilization of diagnostic tests rather than reduce[s] them,” and (2) if “some health care providers received federal subsidies for EHR systems they already had in place prior to the adoption of federal standards and mandates.”

A new study reported in the Journal of the American Medical Association (JAMA) shed additional light on the first concern. The study concluded that “having online access to medical records and clinicians was associated with increased use of clinical services compared with group members who did not have online access.” This largely confirms the Senators concerns that federal health IT policy could lead to increased utilization and costs.

Second, a new report coming out today from the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services (attached) offers “an early assessment of CMS’s oversight of the Medicare electronic health record (EHR) incentive program, for which CMS estimates it will pay $6.6 billion in incentive payments between 2011 and 2016.” The OIG found that “CMS faces obstacles to overseeing the Medicare EHR incentive program that leave the program vulnerable to paying incentives to professionals and hospitals that do not fully meet the meaningful use requirements.” As the OIG explained, CMS currently “has not implemented strong prepayment safeguards, and its ability to safeguard incentive payments post payment is also limited.”

This largely confirms the Senators concerns that CMS and ONC may not have appropriate safeguards in place to ensure the appropriate use of taxpayer dollars. In fact, the OIG warned that “ONC requirements for EHR reports may contribute to CMS’s oversight obstacles.” Troublingly, CMS did not agree with the OIG’s recommendation that CMS first “obtain and review supporting documentation from selected professionals and hospitals prior to payment to verify the accuracy of their self reported information.”

Given the nature of the concerns, additional Congressional oversight is likely expected.

Dr. Coburn filed the following amendments to S. 3525, the Sportsmen’s Act of 2012.

Coburn amendment #2914 – This amendment would require all veterans who are considered mentally incompetent for purposes of assigning benefit payments, not be considered “adjudicated as a mental defective” unless they have been found by a judicial authority to be a danger to themselves or to others. Additional background, here.

Coburn amendment #2915 - This amendment would prioritize federal funds by directing half of the receipts from land sales through FLTFA towards deficit reduction and half towards fixing crumbling structures and roads on federal lands. Additional background, here.

Coburn amendment #2916 –This amendment would strike the mandate that 75 percent of funds from the Neotropical Migratory Bird Program are expended on projects located outside of the United States. Additional background, here.

Coburn amendment #2917 – This amendment would strike the section codifying the duplicative National Fish Habitat Conservation Fund. Additional background, here.

Coburn amendment #2918 – This amendment would protect the 2nd Amendment rights of individuals on lands managed by the Army Corps of Engineers. Additional background, here.

Thank you for that kind introduction. It’s an honor to be with you tonight as we celebrate the American Spectator’s 45th anniversary. I especially want to thank Bob Tyrrell who has been with the Spectator since the very beginning. Bob, I want thank you and honor you for your commitment to telling the truth, and for reminding us to laugh, which is especially important in times like this.

Like most of you I wish we had a different outcome last week. But it’s important to talk honestly about what happened, and what we can do to get our nation back on track.

This election, I believe, is a seminal moment in history. We may have passed a tipping point. I woke up on Tuesday believing we were a center-right country and went to bed realizing we may simply be a divided country.

Fifty percent of American households now receive at least $2,500 in benefits from the federal government. And president Obama wants to expand that number. At the same time, median income is going down while the jobless rate is still far too high.

The hard reality is this: When the majority of Americans reward the politics of bailouts and benefits ahead of the promise of hard work, freedom and opportunity we have to question not just the viability of our message; but the viability of our country.

Our history, however, is a series of defining moments. And since our beginning, we have been a nation that has cheated history.

One of those moments happened back in the winter of 1777 at a place called Valley Forge. Many of us know the story – the American Spectator was there. The Continental Army under General Washington was on the ropes after a string of defeats. They were hungry, weary and ill-equipped. The conditions were brutal: 2,500 men – about ten percent of his army – perished that winter. Washington didn’t know how many would survive, and of those that did, he didn’t know if enough would re-enlist to carry on the struggle. But Washington refused to give up. He chose to lead. He decided to take action. He wasn’t content to just survive and keep warm. Braving the wind and cold, he drilled his men daily. He honed his tactics and forged an army in a crucible of adversity.

For us, this is a Valley Forge moment. This is a time for leadership that calls on us to re-enlist in the struggle to preserve freedom, and a leadership that drills us in the principles that made us great.

To get back on track I would suggest we focus on a few simple points: truth, oversight, action and accountability.

One of the lessons from last Tuesday is that we’ve failed to tell the American people – particularly young voters – the truth about where we are.

The truth is, on our present course, the average young person in this country is going to inherit a lower standard of living than their parents. That is unacceptable.

America is already bankrupt. We may not believe it. We may not yet feel its full effects. But we are effectively bankrupt. Our debt, which is 103 percent of our GDP, now exceeds the size of our entire economy.

The crisis is imminent. Today, we’re on the cusp of another downgrade. If interest rates go up one point, we add at least another $160 billion to our deficit every year. If rates return to historic averages, we’ll add about $640 billion to our deficit every year – which is more than our defense budget.

In two years, the Social Security disability trust fund goes bankrupt. In five years, Medicare Part A – the hospital insurance trust fund – may be bankrupt. And in ten years the costs of entitlements and interest on the debt alone will consume all available tax revenues. That means our entire military and discretionary budget will be financed entirely on borrowed – or printed – money.

The truth is we’ll never get to the point of running DOD on money borrowed from China and elsewhere. Eventually, the rest of the world will decide we can’t pay what we owe and they’ll stop lending us money. As I describe in my book, The Debt Bomb, that’s when the party is over.

That isn’t just my opinion. In 2011 Federal Reserve Ben Bernanke told Congress that these unsustainable spending levels can’t continue “because creditors would never be willing to lend to a government whose debt, relative to national income, is rising without limit.”

Here’s why this is important in the context of what happened last Tuesday.

We’ve heard a lot of talk about the left’s so-called demographic advantage and the president’s electoral firewall, and whether that firewall will hold in future elections. Let me tell you some good news. Those of us who believe in the Constitution and limited government have a much more potent firewall working in our favor: it is a mathematical and budgetary firewall. It is a firewall that tells us – in very stark terms – that we can’t afford the status quo. We don’t have the money. Sooner rather than later, the other side will have to accept reforms that are a lot closer to our principles than theirs.

The demographic advantage – at least among younger voters – is a bubble of inflated expectations that can’t be met. Where the left sees a demographic advantage I see a generation of Americans about to be drowned in debt. When that happens, our solutions will be like an ark in the storm.

Hopefully we won’t have to live through such a crisis. If we tell the truth effectively we may not have to.

So, our first task is to tell the truth. The second is oversight, which has to happen before you set priorities and get spending under control.

Oversight isn’t very popular in Washington because politicians on both sides prefer to create new programs instead of looking at whether the programs we’ve already created are working. But, I believe, oversight resonates with families because that’s how they live their lives every day. In the real world, people look their budgets and make choices. In Washington, we make excuses, and defer choices to future generations.

Oversight is about methodically and relentlessly building the case for limited government. And it’s about recognizing that big changes often happen in small steps. That’s why I release reports on all areas of the government. In my latest annual Wastebook report we found federal funding from everything from robotic squirrels to climate change musicals to caviar promotion.

Here are a few more. You can’t make this stuff up. We found:

• $27 million for Moroccan pottery classes

• $505,000 for the promotion of specialty shampoo and other beauty products for cats and dogs

• $1.3 million in corporate welfare for the world’s largest snack food producer, PepsiCo Inc.

• $350,000 for a government-funded study on how golfers might benefit from using their imagination to envision the hole to be bigger than it actually is. Really? Maybe we should have studied how to help politicians imagine a smaller hole in the budget.

The list goes on and on. And I’m adding to the list tomorrow when I’ll release a report that details more than $60 billion in non-defense spending at the Pentagon.

The point of these reports is to help the public have an understanding of government that reflects reality. And the reality is we could reduce the size of government by one-third today and no one outside of Washington would be able to tell the difference.

Oversight, again, isn’t just the responsibility of those of us in elected office. It’s the media’s responsibility as well. Many of you in this room are doing that and I salute you.

So, task number two is oversight. The last two – action and accountability – go together.

Perhaps the greatest problem I’ve seen in the Republican Party since being elected in the Class of 1994 is the gap between our words and actions. We have two forms of conservatism in Washington. One is cheap or complacent conservatism; the other is costly or courageous conservatism. One is common, the other is rare.

Cheap or complacent conservatism is the conservatism of rhetoric, pledges and pandering. Costly and courageous conservatism is a conservatism of action, solutions and sacrifice. Cheap conservatism looks for scapegoats to compensate for its failure to communicate and implement a limited government agenda. Costly conservatism is brimming with optimism and compelling solutions. Cheap conservatism treats particular areas of the budget as sacred based on political expediency. Costly conservatism treats every tax dollar as sacred based on the principles of liberty and self-government.

Whether we have cheap or costly conservatism really is up to all of us in this room, particularly those of you who are leaders in the media and interest groups. My challenge to you is don’t elevate the politicians who tell you what you want to hear; elevate the leaders who are willing to take us where we need to go.

Let me make a final point about accountability. Many want to blame our setbacks in the Senate, in particular, on the Tea Party. I agree we need to do a much, much better job of candidate recruitment. But the problem in Republican politics isn’t the challengers: it’s the incumbents: it’s the career politicians who say they are for limited government and lower taxes but make decisions that give us bigger government and higher taxes.

Voters will forgive us for trying and failing, but they won’t – nor should they – forgive us for not trying. If we align our actions with our words and primary ourselves with term limits we’ll create the kind of leadership America needs.

As we think about the basics, we do have recent models of success to draw from. In the earmark battle, for instance, no one thought we would succeed. Our initial raid against the Bridge to Nowhere failed 82 to 15. But we never gave up. We were specific, methodical and relentless. We exposed excess, took action, and voters held politicians accountable. Eventually, we ended a practice that was a terrible distraction and disgrace to our party.

The task before us is simple. Telling the truth, conducting oversight, taking action and holding politicians accountable will lead us out of our Valley Forge and on to victory.

President Obama closed with campaign with the slogan “Forward.” They later modified it with an exclamation mark so it read “Forward!” I wish we could change it to read “Fast-Forward.” But I want to leave you with a different word: “Forever.”

Our vision is not based on a sentimental optimism that is blissfully ignorant of history, and math. Our vision is a serious optimism based on enduring principles that have stood the test of time because they stand outside of time: principles that come from nature and nature’s God: principles of self-reliance, sacrificial leadership and most of all, the dignity of each person regardless of race or creed.

If we want to communicate our values clearly we need to go back to those enduring “forever” principles that built our country, and avoid the short-term politics of pandering. Doing so will address each challenge we face.

And, like our founders, we can look back at history and draw from the wisdom of those who lived through perilous times in the past. After Rome was sacked the great writer and thinker Augustine looked at a world that seemed to be coming to an end and wrote a book called the City of God in which he contrasted that eternal city with the City of Man.

It is in the eternal city we learn there is no black or white, Asian or Hispanic, male or female, and born or unborn. Though we are all imperfect and flawed, we are all children of God. And, once we choose to enter, we are all immigrants welcomed by grace.

You see, our vision welcomes all people because it is based on a view of freedom, liberty and dignity that comes from a Creator, not from the state, the King, or a board of unelected bureaucrats in Washington.

We offer a vision of shared prosperity through what Arthur Brooks calls earned success. Their vision offers shared misery through the redistribution of wealth and class envy. We uphold the dignity of all people. Their ideas diminish the dignity of all people through debt and dependency. Their vision is unsustainable, ours is sustainable. Where they offer a rendezvous with debt, we still offer a rendezvous with destiny.

From low points like Valley Forge to the debacle of Watergate, the answer is never to abandon our values. Instead, we should follow Ronald Reagan’s advice from 1975: “Our people look for a cause to believe in. Is it a third party we need, or is it a new and revitalized second party, raising a banner of no pale pastels, but bold colors which make it unmistakably clear where we stand on all of the issues troubling the people?”

As we continue to reflect, and debate, I would encourage you to face the future not with fear but faith and optimism. America is a nation – and an idea – that has cheated history many times in the past and can do so again.

Thank you. And may God bless you and our great country.

This week, Dr. Coburn asked USDA Secretary Thomas Vilsack to address concerns raised by local education officials, parents, teachers, and students regarding the Department's regulations on school lunches.  To view the letter click here.   

Today, at a hearing on Social Security Disability Programs, the Permanent Subcommittee on Investigations, Ranking Member U.S. Senator Tom Coburn, M.D. (R-OK) released the findings of an 18-month investigation exposing flawed methods used by the Social Security Administration to award disability benefits. The investigation found that more than a quarter of 300 randomly selected case files were awarded benefits without properly addressing insufficient, contradictory and incomplete evidence.

To read the full investigative report, "Social Security Disability Programs: Improving the Quality of Benefit Award Decisions", click here.

To read Dr. Coburn's opening statement, click here.

Key findings of the investigation

1. More than a quarter of 300 randomly selected disability case files were awarded benefits without properly addressing insufficient, contradictory and incomplete evidence. This corroborated an internal 2011 review by SSA that found that administrative law judges (ALJs) got decisions wrong or had significant errors 23-26% of the time in the areas examined by the Subcommittee.

2. Every time benefits are wrongly awarded, the cost to taxpayers is at least $300,000. The average lifetime cost of a disability award is $300,000.

3. A single judge in Oklahoma City, Howard O’Bryan, awarded more than $1.6 billion in lifetime benefits in just three years. He decided more than 5,400 cases from 2007-2009 with an approval rate over 90 percent, most of them held “on-the-record” without hearings.

4. ALJs “cut and paste” images of medical records into favorable award decisions instead of including written analysis. Judge O’Bryan had to be told numerous times to stop.

5. SSA relied on insufficient and contradictory medical evidence at every level in the application process. While the most significant problems were found at the ALJ level, problems were also found with decisions made at the state-based Disability Determination Services (DDS).

6. ALJs often gave most weight to medical records from attorneys and least weight to independent DDS doctors. Attorneys often submitted one or two page forms in which a doctor found a person totally disabled. Some ALJs called these “dead man’s reports” and “store bought opinions.”

7. ALJs failed to hold proper hearings, preventing them from collecting objective and useful information. Some hearings were less than 5 minutes long; at some hearings a claimant did not speak; and at some hearings questions were asked only by attorneys, with none from ALJs.

8. ALJs admitted late-arriving evidence to override all other medical evidence. Claimant attorneys would submit evidence days – in some cases hours – prior to an ALJ hearing. Senior SSA officials said this was strongly discouraged because it too little time was left for analysis.

9. SSA relied heavily on the vocational “grids” to find claimants disabled on their 50th or 55th birthdays. SSA finds claimants disabled using the grids four times more frequently than for meeting medical listings – a reversal of past practice.

10. SSA uses an outdated Dictionary of Occupational Titles from the 1970’s to find jobs. This relic fails, for example, to capture current labor market trends. For example, it does not contain any computer-related jobs a person could do, but includes “sorter,” “cuff folder,” and “battery stacker.”

11. “Drug and Alcohol Abuse” was deemed “not material” in 24 cases in which a claimant was awarded benefits. A 2011 SSA review, however, found that failure to explain why the significance of drug and alcohol abuse was a top reason for errors in ALJ decisions.

Examples of Flawed Disability Cases

Alabama 69. Judge Intoccia awarded disability benefits solely on a one-page document filled out the day before the hearing by the claimant's doctor at the request of the claimant's attorney.

Oklahoma Case 153. Judge Falkenstein said a woman was disabled as of April 2007 for carpal tunnel syndrome, but in July 2007 her records show her working as a bartender.

Oklahoma Case 151. Judge Keltch coached a claimant how to get higher benefits by possibly lying about a "rental agreement" with his roommate.

Virginia Case 249. A woman applied for benefits based on COPD - a breathing disorder - but was sent by her attorney to a doctor who diagnosed her with "mental retardation." Judge Erwin, testifying tomorrow, said this doctor in particular had a history doing this for attorneys. 

Oklahoma Case 181. Judge Hiltbrand awarded benefits to a child based on ADHD whose teachers described him as doing well. The judge indicated at the hearing he was gonig to apply the medical standards more loosely and award benefits in part because he "didn't want to penalize a good parent."

Oklahoma Case 109. Judge Hiltbrand awarded benefits to a woman who claimed a severe arm injury that kept her from moving it. Her doctor saw her in the parking lot unlock her truck, place her bag on the passenger seat, and steer the wheel of her vehicle - all with her right arm.

Oklahoma Case 111. Judge Howard O'Bryan awarded disability benefits to a former truck driver, whose case file contained notes from several doctors stating he could return to work with "no restrictions."

Virginia Case 257. Judge Peters held a four-minute hearing and instead of asking any questions, changes the claimant's date of disability to her 50th birthday and "gridded" her. 

Today, Health Resources and Services Administration (HRSA) Administrator Mary Wakefield, responded to a letter sent by Senators Tom Coburn, M.D. (R-OK), Michael Enzi (R-WY) and Richard Burr (R-NC) asking HRSA for a management plan to address the deficiencies and concerns outlined by two GAO reports.  

Text of the letter from HRSA, here.

On February 1, 2012, Dr. Coburn sent this letter to Senate Minority Leader Mitch McConnell regarding the National September 11 Memorial and Museum Act of 2011 (S. 1537) a bill authorizing $20 million annually for the memorial and museum. 

The group, 9/11 Parents & Families of Firefighters and WTC Victims, sent a letter supporting Dr. Coburn and a second letter expressing their opposition to S. 1537. 

Click here to read the first letter. Click here for the second letter. 

Click here to read Dr. Coburn's letter responding to concerns from the group, 9/11 Families for a Safe and Strong America, opposing his hold letter and his questioning the $20 million annual earmark. Click here to read their letter. 

On February 16th, Dr. Coburn sent this letter to Senator Schumer (D-NY) and this letter to Senator Gillibrand (D-NY), responding to a letter he received from the two senators asking him to work with them to pass S. 1537 by proposing placing a tariff on imported American flags as one potential way to pay for the bill. 

Read the letter from Senators Gillibrand and Schumer, here. 

In March, Senator Coburn sent this letter to Senator Inouye (D-HI), Chairman of the Senate Appropriations Committee, requesting clarification about the information his office provided regarding the budgetary projections of the memorial. Senator Inouye's responded with this letter. 

Dr. Coburn filed the following amendments to the Small Business Jobs and Tax Relief Act, S. 2237.

 

#2536__Prohibiting tax evaders from receiving government assistance, including tax credits, grants, contracts, and loans.  For additional background on this amendment, click here.

#2534__Prohibiting millionaires from receiving certain tax breaks.  As exposed in Senator Coburns report,Subsidies of the Rich and Famous, the average amount of tax breaks claimed by millionaires is $28.5 billion every year.  This amendment would pay for the $28 billion cost of S. 2230 by eliminating the following tax breaks for millionaires:  the mortgage interest deduction, rental expenses deduction, gambling loss deduction, cancelled debt deduction, electric vehicle credit, childcare tax credit, and the renewable energy credit.  For additional background on this amendment, click here.

#2535__Requiring Higher Income Americans to Pay More for their Share of Medicare Parts B&D.  For additional background on this amendment, click here.

#2537__Repealing the Obamacare Health Insurance Tax, which will increase premiums by $500 per family.  For additional background on this amendment, click here.

Coburn-Durbin amendment #2439 - Senators Coburn and Majority Whip Dick Durbin (D-IL) filed this amendment that would reduce the level of federal premium support for crop insurance participants with an Adjusted Gross Income (AGI) over $750,000 by 15 percentage points for all buy-up policies beyond catastrophic coverage. 

The Congressional Budget Office (CBO) estimates this amendment would save more than $1.2 billion dollars over ten years. Earlier this year, Senators Coburn and Durbin sent this letter to the Senate Agriculture Committee regarding their recommendations for reforming the federal crop insurance program. Additional background on the amendment, here.

Coburn amendment #2214 - This amendment would prohibit the use of public funds for political party conventions and to provide the return of previously distributed funds to the Treasury for deficit reduction. Earlier this week, Dr. Coburn introduced this legislation as a stand alone bill, S. 3257. 

Supporting documents

• View text of the legislation, here. 
• Dr. Coburn's Statement for the Congressional Record, here.
• Congressional Research Service report on 2008 Democratic and Republican national convention spending and data provided by the Federal Election Commission (FEC) on PECF expenditures used for party conventions. 
• Examples of spending by-the-numbers: Republican National Convention Committee. 
• Examples of spending by-the-numbers: Democratic National Convention Committee.
• Dr. Coburn called for the elimination of taxpayer subsidies for party conventions in his 2011 Wastebookreport, citing this report from the Congressional Research Service on federal funding for 2012 Presidential nominating conventions.
• Additional explanation of how the Presidential Election Campaign Fund (PECF) operates. 

In May, 2012, Dr. Coburn urged the Republican National Committee and Democratic National Committee to reject public financing for their respective party conventions. Read the letter sent to both the RNC and DNC and additional background on other efforts from the Republican Study Caucus (RSC) to eliminate funding for conventions in 2009: here.

Coburn amendment #2225 — To prohibit federal tax cheats from receiving federal farm subsidies. This amendment would prohibit any federal farm assistance, including farm subsidies, loans, grants and other forms of assistance from being provided to individuals and entities that are seriously delinquent in their tax debt to the United States Treasury. Additional background, here.

Coburn amendment #2288 - To establish new eligibility criteria for participation in Rural Development programs. Additional background, here.

Coburn amendment #2289 - To reduce the Market Access Program (MAP) by 20 percent. Additional background, here.

Coburn amendment #2290 - To reduce funding for USDA’s Rural Development agency by $1 billion and let the agency prioritize remaining funds. Additional background, here.

Coburn amendment #2291 - To eliminate International Forestry Programs at the U.S. Forest Service. Additional background, here.

Coburn amendment #2292 - To eliminate the Urban and Community Forestry (U & CF) program. Additional background, here. 

Coburn amendment #2293 - To limit subsidies to millionaires. Additional background, here.

Coburn amendment #2353 - To eliminate two “working lands” conservation programs: (1) the Environmental Quality Incentives Program (EQIP) and (2) the Conservation Stewardship Program (CSP). Additional background, here.

Today, Dr. Coburn agreed to pass a bill to extend the National Flood Insurance Program (NFIP) for 60 days after the Senate accepted his provision to phase out subsidized premium rates for vacation homes and second homes. Dr. Coburn's amendment will save the program - and taxpayers - $2.7 billion over the next 10 years. 

For text of the agreement, click here.

(WASHINGTON, DC) –Today the GAO released a letter report on the Small Employer Health Insurance Tax Credit in Obamacare. GAO found that “fewer small employers claimed the [tax credit] in 2010 than were estimated to be eligible.” While 170,300 small employers claimed the tax credit, GAO said “estimates of the eligible pool by government agencies and small business advocacy groups ranged from 1.4 million to 4 million” and noted the cost of credits claimed was $468 million. According to GAO, “employer representatives, tax preparers, and insurance brokers that GAO met with, the credit was not large enough to incentivize employers to begin offering insurance.” Complex rules on FTEs and average wages also limited use, according to GAO’s research.

The GAO report confirms several warnings Senators Tom Coburn, M.D. and John Barrasso, M.D., made in chapter 9 of Grim Diagnosis, their October 2010 oversight report on Obamacare. In their 2010 report, the Senators noted that business leaders were “learning that new small business tax credits in the law actually do very little and do not prevent health care costs for businesses from climbing higher.” This was one large reason they found that “few businesses appear interested in the credit.”

The Senators noted that, “rather than lowering health costs for all businesses and workers, the new law only offers a temporary credit from which one percent of individuals in America will actually benefit.” They concluded because Obamacare “headed the wrong direction,” so Congress needs to repeal the law and replace it with “policies which will spur business expansion and job growth – not policies that will increase health care costs for businesses and employees.”

Overview of Duplication & Overlap

The Department of Justice (DOJ): 253 Duplicative Programs costing $1.9 billion a year. DOJ administers 253 grants for crime prevention, law enforcement, and crime victim services through the Office of Justice Programs, the Office on Violence Against Women, and the Community Oriented Policing Services Office. These three offices awarded over 11,000 grant awards in 2010, but GAO reported that DOJ officials do not track the flow of grants to subgrantees and do not know for what purposes and activities the subgrantees are using the money. DOJ officials even told GAO that they encourage applicants to apply for as many DOJ grants as possible. The DOJ gave out $3.9 billion in grants in 2010, and since 2005, the DOJ has been given $30 billion for grants. One grant recipient told GAO that they had received so much money from the DOJ that they planned on returning some of the money because it was more than they needed.

Diesel Emissions Programs: 14 different programs costing billions each year are administered through the Department of Energy, Department of Transportation, and the Environmental Protection Agency, to reduce diesel emissions. 13 of the programs provide grants and one program provides loans for this purpose. GAO reports that each program overlaps with at least one other program “in the specific activities they fund, the program goals, or the eligible recipients of funding.” Cost: From 2007 to 2011, these diesel emissions programs cost at least $1.4 billion and at least $510 million in forgone tax revenue in FY 2010.

Early Learning and Child Care: 45 different programs costing at least $13.3 billion a year. The federal government operates 45 programs, and five tax provisions to encourage early learning and child care for children under the age of five. Cost: Federal programs for early learning and child care received at least $13.3 billion in FY2010. The five tax provisions “accounted for at least $3.1 billion of forgone tax revenue” in FY2010. Head Start, the largest program, spent $7.2 billion in FY 2010.

Employment for People with Disabilities: 50 overlapping and duplicative Programs costing approximately $3.5 billion a year. GAO reported finding 50 different programs supporting employment for people with disabilities. These 50 programs are operated by nine federal agencies and are overseen by an even greater number of congressional committees. 18 programs are specifically for veterans and service members, and 6 are for students and young adults, five of which all provide employment counseling, assessment, and case management. 22 of the 50 programs reported that they did not track or monitor any outcome measures.

Financial Literacy: 56 duplicative programs costing $30.7 million a year. GAO found 15 financial literacy programs operated by 13 different federal agencies. However, a 2011 survey conducted by the Departments of Treasury and Education found 56 financial literacy programs operated by 20 different federal agencies.

Green Building: 94 duplicative programs. GAO reported finding 94 initiatives, operated through 11 agencies, promoting green building. The Department of Housing and Urban Development (HUD), Environmental Protection Agency (EPA), and the Department of Energy operate two-thirds of the green building programs. Forty-seven of the programs are grants, nine programs provide loans, five offer tax credits, three offer tax deductions, and forty-five initiatives offer technical assistance. *Annual cost unknown because the agencies running these programs do not keep track of green building funds.

Housing Assistance: Over 160 duplicative programs costing $170 billion a year. Since the 1930s, the federal government has been involved in supporting affordable housing through the establishment of the Federal Housing Administration (FHA), and Fannie Mae and Freddie Mac. Without proper oversight, the federal government’s involvement has ballooned into a puzzle of 160 overlapping and duplicative programs, administered through 20 agencies, intended to encourage homeownership and provide affordable rental housing for low-income families.

Information Technology Investment Management: The Department of Defense (DOD) made 2,383 investments and the Department of Energy made 876 information technology investments in FY2011 for a total cost of $79 billion. Additionally, GAO found 37 investments, from a sample of investments that were duplicative between the DOD and the Department of Energy, costing $1.2 billion.

Science, Technology, Engineering, and Math (STEM) Education: 209 federal STEM programs costing approximately $3.1 billion a year. GAO found a total of 209 federal programs designed to support science, technology, engineering, and math (STEM) education. 170 programs serve postsecondary students, 75 programs served K-12 students, and 70 programs served K-12 teachers.

Support for Entrepreneurs: 53 different programs costing $2.6 billion a year. Four different agencies and departments operate 53 programs to help entrepreneurs. GAO reported that these programs, run by the Departments of Commerce, Housing and Urban Development (HUD), and Agriculture (USDA), and the Small Business Administration (SBA), overlap in their purpose resulting in inefficiency and compromising their effectiveness.

Surface Freight Transportation, Under Department of Transportation: No clearly defined role for the federal government or strategy for surface freight transportation resulting in dozens of programs with overlapping and duplicative roles in promoting passenger and freight mobility. According to GAO, “this fragmented structure makes it difficult to determine the types of freight projects that are funded and their impact on overall freight mobility.”

Unmanned Aircraft Programs: 15 Overlapping Programs estimated to cost approximately $37.5 billion between FY2012 and FY2016. GAO found 15 unmanned aircraft programs within five categories based on weight, altitude, and speed. GAO found overlap between group four and five and it is expected that another $32.4 billion will be spent to complete these programs.

This week, the Senate unanimously passed Coburn amendment #2060 limiting spending on government conferences. Summary and background here.

Dr. Coburn believes the problem with conference spending is Congress, not the GSA or any other agency. Congress has fostered a spring-break mentality at agencies by looking the other way. Too often members would rather grow government than shrink government, particularly if a parochial interest is at stake. This amendment will send a long-overdue signal that Congress is listening to the American people and taking its oversight responsibilities seriously.

Summary of the Coburn #2060 amendment:

Provides a first step in comprehensive conference spending and transparency reform by scaling back overall conference spending, establishing attendance limitations to protect from excessive and unnecessary travel, and require full online transparency of all conference spending. These reforms could save more than $65 million every year.

Establishes a basic set of requirements for conference spending, including the following:

• Reduces the amount an agency can spend on conferences to 80 percent of the amount spent in 2010.

• Caps amount that can be spent on a single conference at $500,000 (unless the agency is the primary sponsor).

• Allows non-federal foundations and sources to provide financial support for a conference, but requires a listing of such sponsors and a certification that there is no conflict of interest resulting from support received from each.

• Prohibits sponsoring more than one conference per year per organization.

• Limits to 50 the number of employees from a single agency traveling to an international conference.

Requires a quarterly summary posted on the agency’s website of each conference supported or attended by an agency in the preceding 3 months, including:

• An explanation how the conference advanced the mission of the agency;

• Total cost of attendance and support for the conference;

• Primary sponsor of the conference;

• Location of the conference;

• A justification of the location including cost efficiency of the location;

• The dates; and

• The number and a listing by title of agency and non-federal employees whose attendance at the conference was paid for by the agency.

Dr. Coburn's past efforts to make conference spending transparent by holding Congress, and federal agencies, accountable:

"Throughout our history, presidents and lawmakers cut back non-defense spending during times of war. Today, Congress must follow that precedent and begin to curb the increase in spending on nonessential activities.” --Senator Tom Coburn, 9/14/06

In the summer 2005, as Chairman of the Senate Homeland Security's Subcommittee on Federal Financial Management, Senator Coburn first launched a government wide inquiry into travel spending and asked federal agencies to report conference sponsorship and participation since 2001 and found that the government had spent over $1.4 billion sending people to meetings and conferences the last five years. The data revealed that such spending had increased 70%. When fiscal year 2006 spending is totaled, these numbers are expected to grow.

The investigation uncovered hundreds of millions of dollars wasted on sending employees to conferences of questionable value. In addition to excessive spending on airfare, hotel rooms and per diems, the Subcommittee found excessive attendance levels, where agencies were sending dozens and even hundreds of employees to the same out-of-town meeting, sometimes overseas. The Subcommittee concluded that much travel to conferences is unnecessary given the fact that videoconferencing and the Internet allow the same information to be shared and exchanged.

During his time as Chairman, Senator Coburn held two hearings on this subject at which he called 14 government witnesses to defend their agency’s travel spending records. The Subcommittee also heard testimony from a former government official who discussed a “spring break” mentality on the conference circuit and characterized most conferences as “a waste of time and money.”

The investigation also revealed that government employees traveling to lavish locales including Crete, Australia, South Africa and Hawaii will often take annual leave before or after the conference, essentially charging taxpayers the cost of a plane ticket for their personal vacations, begging the question – would the conference have been attended if the employee hadn’t been able to combine with his vacation?

Every conference attended by Federal employees should be able to stand up to the following questions:

1. Does the conference help further the Department’s mission?
2. Could the information provided at the conference be disseminated instead through a teleconference, the Internet or scholarly publication subsequent to the conference?
3. Is the location appropriate and justified?
4. Is the number of employees attending justified, and could one employee attend instead of many, and provide detailed briefings to other employees afterward?
5. Is this a wise use of tax dollars when we have an over $9 trillion national debt?
6. Could the amount spent on the conference have been better spent on a higher priority, or not spent at all?
7. This is an area the Subcommittee will continue to watch. Check back for updates.

Reports on conference spending:

• “For the Farmers or For the Fun?” - 2008 USDA report: USDA tripled conference expenditures since 2000, to $19.4 million in 2006. USDA saw a 191 percent increase in conference spending since 2000.

• “Party at the DOJ” - 2010 Department of Interior IG report: found DOI could save more than $20 million in travel costs each year by utilizing teleconferencing technology. According to the report, the Department owns $5 million worth of such equipment, but fails to fully use it, meanwhile spending millions on travel.

• “Justice Denied” - 2008 DOJ report: spent more than $312 million over 7 years on conferences. Includes $4 Meatballs, Congressional Training Sessions in Hawaii, and a Gang Prevention Event at a Palm Springs, Waldorf-Astoria Resort.

• 2008 report on HIV/AIDS conference cost taxpayers half a million dollars ($473,095), to send federal employees to Mexico.

Dr. Coburn's previous amendments on conference spending:

S. AMDT. 4787 to H.R.5631 would cap at $70 million the amount the Defense Department could spend on conferences and conference-related travel. In 2005, the Pentagon spent more than $79 million on conferences. The amendment was agreed to by voice vote on August 3, 2006 after the Senate rejected a motion to table, or kill, this amendment by a vote of 36 to 60. Roll call vote (a YEA vote is to kill the amendment and allow unlimited conference spending and a NAY vote is to support the amendment). Estimated savings: At least $9 million.

S. AMDT. 2230 to H.R. 3010 to limit reduce the Department of Health and Human Services’ funding for travel and conferences by $15 million. In 2005 alone, HHS spent $68.5 million on conferences. This amendment was agreed to by unanimous consent Oct. 27, 2005. Savings: $15 million.

S. AMDT. 2087 to H.R. 3058 limits Department of Housing and Urban Development (HUD) funding for conferences to $3 million. In 2005 alone, HUD spent $13.9 million on conferences. The agency planned to spend $12,360,010 on conferences in 2006. This amendment was agreed to by voice vote on Oct. 20, 2005. Savings: $9.36 million.

S. AMDT. 3318 to H.R. 3093 would require NASA to post details of all conferences it will sponsor during fiscal year 2008. Specifically the amendment requires NASA to post on its public Web site: the itemized expenses paid by the agency, including travel expenses and any agency expenditure to otherwise support the conference; the primary sponsor of the conference; and the location of the conference. In the case of a conference for which the agency was the primary sponsor, the agency must include a statement that: justifies the location selected; demonstrates the cost efficiency of the location; the date of the conference; a brief explanation how the conference advanced the mission of the agency; and the total number of individuals who travel or attendance at the conference was paid for in part or full by the agency. This amendment was accepted by voice vote October 15, 2007. 

With CMS' newly released Medicare hospital inpatient prospective payment system for FY2013, a new Medicare rule highlighting the Massachusetts rural floor discussion affirms the "Bay State Bailout" Dr. Coburn warned about earlier this year. 

According to the CMS rule, the following section highlights the rural floor discussion:

"...There was one urban IPPS hospital that was reclassified to rural Massachusetts (under section 1886(d)(8)(E) of the Act) which established the Massachusetts rural floor, but the wage index resulting from that hospital’s data was not high enough for any urban hospital to benefit from the rural floor policy. However, beginning with the FY 2012 wage index, the rural floor for the State is established by the conversion of a CAH to an IPPS hospital that is geographically located in rural Massachusetts. We estimate that Massachusetts hospitals will receive approximately a 5.5 percent increase in IPPS payments due to the application of rural floor."

Earlier this year in a Senate Finance Committee hearing, Dr. Coburn questioned HHS Secretary Sebelius on this special deal for Massachusetts asking about this provision under the PPACA and specifically - why HHS did not warn Congress of the manipulative provision benefitting Massachusetts but costing other states a total of $4 billion.

Read more about about the "Bay State Bailout" and Dr. Coburn's warning here.

Dr. Coburn filed the following amendments to S. 1789, the Postal Reform bill being debated in Senate this week:

Amendment #2059 - To Allow the USPS to make decisions about Post Office and facility closures. Additional background: here.

Amendment #2058— To Amend the Service Standard Requirement to Encourage the Co-Location of Post Offices in Businesses. Additional background: here.

Amendment #2060: To provide transparency, accountability, and limitations of government sponsored conferences. Additional background: here.

Amendment #2061: To require retirement-eligible USPS employees to retire. Additional background: here.

Today, Dr. Coburn filed the following four amendments to S.2204, a bill to repeal tax subsidies for big oil companies. 

Amendment 1980 - To stop corporate welfare by prohibiting large corporations from receiving federal funding from the Advanced Research Projects Agency - Energy. Additional background: here.

Amendment 1981 - To prohibit millionaires from receiving the residential energy efficient property tax credit. Additional background: here.

Amendment 1982 - To save at least $2 billion annually by reducing unnecessary, duplicative, and overlapping government energy programs. Additional background: here.

Amendment 1983 - To prohibit the use of funds for the Office of Fossil Energy's Research and Development activities. Additional background: here.

This week, Senators Coburn, Enzi, McCain, Alexander, and Burr sent this letter to Health & Human Services Secretary Sebelius requesting HHS release the results of a study on the Head Start program. The results of the Head Start "Third Grade Follow-Up Study", scheduled to be completed in September 2011, has been delayed until September 2012 without explanation. Dr. Coburn and others request an explanation.

Excerpts...

"Congress and the American people deserve the opportunity to review the evidence about whether the Head Start program is benefiting the children that it serves."

"Four years seems to be a sufficient period of time for the Department and the researchers that conducted the data collection to analyze the results."

"The American people-including the families of the estimated 904,000 children currently enrolled-deserve to understand how this program is affecting the children it serves."

Today, the Government Accountability Office (GAO) released its annual report addressing duplication and areas for costs savings throughout the federal government. Read the full report by clicking here.

Supporting documents

• Dr. Coburn's prepared testimony at the House Committee on Oversight and Government Reform: here. Highlights of the testimony: here.
• An appendix of the testimony: here.
• An Executive Summary of the 2012 GAO report: here.
• Executive Summary of the Report Card on 2011 GAO duplication report: here.
• Chart detailing 2012 GAO report cost savings: here.
• A 1966 article highlighting the proliferation of duplicative federal programs titled, "Government by Totem Pole: As federal programs proliferate and duplicate we're fast becoming The Overlapped Society".

The report reviews 51 areas of government spending, including 32 areas of extensive federal duplication, fragmentation and overlap, and 19 additional areas of opportunities for large cost savings.

Like last year’s report, which identified more than $100 billion in savings by eliminating duplicative programs, today’s findings are a testament to failed congressional efforts of oversight and a reminder Congress continues to shirk its duty to address even blatant areas of waste and mismanagement of taxpayer funding.

According to GAO Director Dodaro, “This report identifies government duplication, overlap, and fragmentation as well as other cost savings and revenue enhancement opportunities. Its findings involve a wide range of government missions and touch virtually all major federal departments and agencies.”

EXAMPLES FROM THE 2012 GAO DUPLICATION REPORT:

Science, Technology, Engineering, and Mathematics (STEM) Education. 

There are 209 federal STEM education programs, administered by 13 different federal agencies, costing taxpayers more than $3 billion annually.

Department of Justice Grants

Since 2005, Congress has spent $30 billion in overlapping Department of Justice grants for crime prevention police and victims services from more than 200 DOJ grant programs, and $3.9 billion in grants just in 2010.

Housing Assistance

GAO exposes there are “20 different entities administer 160 programs, tax expenditures, and other tools,” that support homeowners and renters.” In addition, there are 39 programs, tax expenditures, and other tools provide assistance for buying, selling or financing a home, and eight programs and tax expenditures provide assistance for rental property owners.

Support to Private Sector on Green Buildings

There are 94 federal initiatives to encourage “green building” in the private sector, run by 11 federal agencies.

Diesel Emissions

There are 14 programs and three tax expenditures that sole or joint purpose is to reduce diesel emissions.

GAO’S REPORT CARD ON WASHINGTON

Today GAO also released a report card on Washington, detailing action taken and not taken by Congress and the Executive Branch, on the recommendations included in last year’s first annual GAO duplication report.

The GAO found Congress has refused to enact 60 percent of the recommendations it was given by GAO, while the Executive Branch has not addressed 63 percent of the recommendations GAO directed to it. Meanwhile, Congress has only fully implemented 4 (13%) of the recommendations it was given by GAO, and the Executive Branch fully addressed 19 (13%) of its recommendations.

Combined, Washington fully addressed only four of the 81 areas identified by GAO, representing a mere five percent. Meanwhile, Congress and the Executive Branch completely ignored 21 percent of the areas in desperate need of reform, as outlined by GAO.

Areas “partially addressed” in truth, have not been fixed at all and taxpayers have realized little to no savings from these beginning steps. In short, 153 specific recommendations, 87 percent, made by GAO last year have not been fully implemented.

GAO's findings reinforce the fact that more government is not always the solution and gives us a picture of what happens to the federal budget when the government continues to grow, and spend, out of control.

As part of my own efforts to address duplication throughout the federal budget, in July 2011, I released Back in Black, a comprehensive deficit reduction plan scrutinizing every corner of the federal budget for savings. Back in Black listed hundreds of specific proposals which together would eliminate more than $9 trillion of deficit spending over ten years.

Today, Senators Coburn and Burr (R-NC) unveiled the Seniors’ Choice Act, a legislative proposal to help America’s seniors by building a stronger, more sustainable Medicare program through immediate and longer-term reforms, many rooted in long-standing, bipartisan ideas. Non-partisan experts have warned the current Medicare program is facing insolvency due to unsustainable growth, and the Seniors’ Choice Act would fix its shortcomings so that it remains a viable option for seniors participating in the program now and for future enrollees.

The Seniors’ Choice Act blends many of the short term Medicare reforms proposed by Senators Coburn and Lieberman (I-CT) with the longer-term reforms that build on ideas put forward by Alice Rivlin, former director of the independent Congressional Budget Office, and former Senator Pete Domenici (R-NM), as well as the bipartisan Medicare Commission led by former Senator John Breaux (D-LA) and former Congressman Bill Thomas (R-CA). By incorporating thoughtful elements from these proposals into its framework, the Seniors’ Choice Act can help move the debate forward about how to craft Medicare reform to ensure the program remains strong for seniors today and in the future.

Beginning in 2014, the Seniors’ Choice Act would give patients in traditional Medicare a new benefit. For the first time, seniors would have the peace of mind that they are protected against high out-of-pocket medical costs and will have targeted and coordinated care when they need it. This policy proposal builds on recommendations of President Obama’s bipartisan Fiscal Commission and the bipartisan Lieberman-Coburn Medicare Reform proposal.

The Seniors’ Choice Act outlines other commonsense reforms that may also be implemented as soon as 2014. These include providing seniors with a unified deductible and predictable cost-sharing, gradually increasing the eligibility age and modestly increasing premiums.

Immediate Reforms: Better Benefits

The Seniors’ Choice Act gives seniors new, strengthened benefits:

• Seniors in traditional Medicare will have peace of mind that they are protected from unexpected, high medical costs by limiting their maximum out-of-pocket medical expenses under Medicare Parts A and B.

• Seniors in traditional Medicare who would otherwise be at risk because of their health care needs will be able to benefit from targeted care coordination when they need it.

• Many seniors will save money. Modernizing Medigap and rationalizing cost-sharing will offer many seniors the chance to save money each month.

The longer-term framework of the Seniors’ Choice Act, which would bring competition and choice to Medicare, would be adopted in 2016. Premium support would strengthen Medicare by giving seniors the right to choose the Medicare plan that best meets their needs. Traditional Medicare Fee-For-Service (FFS) and private plans would be forced to compete head-to-head. Under the Seniors’ Choice Act, seniors will have similar types of choices as Members of Congress currently enjoy. They may choose to either keep their traditional FFS, or they may switch to a more affordable, better coordinated plan that meets their health care needs.

Longer-Term Reforms: Better Choices

• Premium support is a patient-centered approach to strengthening Medicare. Instead of a one-size-fits-all approach to Medicare, seniors will have the choice of a better benefit that meets their individual health care needs. 

• Premium support puts patients and doctors back in charge of their health care decisions, instead of the President’s unelected, unaccountable board of bureaucrats—the Independent Payment Advisory Board—with the power to cut Medicare payments to doctors, which will threaten patients’ access to care. 

• Medicare will compete for patients and be forced to give seniors and taxpayers the best deal for their dollar. 

• Seniors have benefited from choice and competition in Medicare Part D, which has enabled seniors to have an affordable prescription drug benefit. Seniors should benefit from the same kinds of choices and competition for their entire Medicare benefit.

• Premium support will strengthen Medicare for seniors by giving them the ability to choose the Medicare plan that will best work for them, just like they do with their Medicare prescription drug coverage today.

 

You may read more about the Seniors’ Choice Act by following the links below: 

The Seniors’ Choice Act: Full Report

Seniors’ Choice Act: Better Benefit for Seniors 

Seniors’ Choice Act: Questions & Answers

Seniors’ Choice Act: Illustrative Patient Scenarios

Medicare by the Numbers

MCPA vs. IPAB 

How Seniors’ Choice Act Builds on Bipartisan Proposals

Dr. Coburn filed the following amendments to the STOCK Act (S. 2038), a bill which would prohibit Members of Congress and staff from using nonpublic information derived from their official positions for personal benefit. 

Amendment 1473: to require that all legislation be reviewed by CRS before it is considered by the Senate to determine whether new duplicative and overlapping Federal programs are being created. Background information: here.

Amendment 1474: to require legislation to be posted online for 72-hours before a vote in congress. Background information: here.

Amendment 1475: to establish a permanent earmark ban. Background information: here.

Amendment 1476: Substitute (Certification Amendment).

Citizens Against Government Waste letter supporting all of Dr. Coburn's amendments to the STOCK Act.

National Taxpayers Union vote alert supporting Amendment #1473.

In response to a Wall Street Journal article out this week exposing potentially fraudulent practices by the law firm of Binder & Binder for its handling of disability cases, Dr. Coburn requests the Social Security Administration Commissioner Michael Astrue to review the disability claims of individuals represented by this law firm. Today, the Wall Street Journal reports Dr. Coburn's request. 

PDF of the letter to SSA Commissioner Michael Astrue: here

Dr. Coburn also sent a letter to Senators Baucus and Hatch the Chairman and Ranking Member of the Senate Finance Committee today, regarding the need for an attorney for the federal government at Administrative Law Judge disability hearings.

PDF of the letter to the Senate Finance Committee: here

Today, Senators Coburn and Feinstein circulated a letter to their colleagues in the Senate regarding the ethanol subsidies set to expire on December 31, 2011 and cautioning against including the ethanol blenders credit (VEETC) in the end-of-the-year spending bill. 

PDF of the letter: here

Today, Dr. Coburn has asked Senate leadership for a roll call vote on the following amendment to S. 1867, the Department of Defense Authorization Bill.

Coburn Amendment 1369 - Provide Funding for Students and Local Schools by closing unnecessary Defense Department schools

• DoD operates 64 schools on 16 military installations in the U.S called the Domestic Dependent Elementary and Secondary Schools (DDESS). Today 26,000 students are taught by 2,300 teachers who are DoD employees.

• A number of schools were originally justified because the post-World War II military was racially integrated while some of the local schools where military bases were located were still segregated. DDESS was initially established when schools in the South were segregated, however it is no longer clear why the system is still necessary, or why the Defense Department plans to spend $1.2 billion for FY 2011-FY 2015 to rebuild these schools, raising the cost per student from $51,000 in FY 2011 to $81,000 in FY 2015. [1] [3]

Despite generous funding, a recent report by the Center for Public Integrity noted:

“Conditions are so bad [on military-run schools] that some educators at base schools envy the civilian public schools off base, which admittedly have their own challenges. Also, some of the new schools in town make our schools look like a prison,” says David C. Primer, who uses a trailer as a classroom to teach students German at the vaunted Marine headquarters in Quantico, Va., just 30 miles south of the nation‘s capital, in one of the country‘s most affluent suburbs.[2]

• DoD must provide quality educational opportunities for the children of our men and women in uniform serving overseas where English-speaking schools are not available and the overseas schools appear to be meeting that goal. This amendment would not affect any schools outside the United States such as the DDESS schools in Cuba or Puerto Rico.

• This amendment would adopt a recommendation from the National Commission on Fiscal Responsibility and Reform who also recommended closing DDESS and allowing those students to attend local schools just as students of military parents do elsewhere in the country.[3]

• This amendment would allow the Secretary of Defense to transfer up to $12,000 per student per year to any schools affected by this closure. This amendment would allow nearly four years for DOD to close the domestic DDESS.

• This amendment would only affect schools in the DDESS system (except for Cuba and Puerto Rico). The full list of schools and installations can be found here: http://www.am.dodea.edu/ddessasc/districts/communitylocations.html.

[1] “Domestic Dependent Elementary and Secondary Schools, ?DDESS/DODDS – Cuba History,” http://www.am.dodea.edu/ddessasc/aboutddess/description_history.html, Accessed May 12, 2011.

[2] Lombardi, Kristen, ?Daddy, Why is My School Falling Down?? Newsweek, June 27, 2011, http://www.newsweek.com/2011/06/26/military-children-s-schools-in-disrepair.html.

[3] National Commission on Fiscal Responsibility, “The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform,” Dec. 1,2010, http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf

As members of the Senate Finance Committee with jurisdiction over the Medicare program, Senators Coburn and Hatch send this letter to Secretary Sebelius today detailing their concerns regarding the lack of program enforcement by the Centers for Medicare & Medicaid Services (CMS) and the risk this inaction poses to Medicare beneficiaries and the Medicare Trust Funds. 

On September 27th, Dr. Coburn and Senator Hatch sent this letter to CMS expressing initial concerns to which CMS Administrator, Dr. Donald Berwick, responded on November 9th with this.

In the controversial health care law the White House and Democrats on Capitol Hill rammed through Congress in 2010—The Patient Protection and Affordable Care Act (PPACA)— the authors of the bills included dozens and dozens of mandates and deadlines for federal agencies implementing the health law.

On October 4, 2010, Senator Coburn’s office released a report from the Congressional Research Service showing the number of deadlines mandated by the Patient Protection and Affordable Care Act (PPACA) that the U.S. Department of Health and Human Services (HHS) had missed. The analysis by the nonpartisan CRS found that HHS failed to fulfill its requirements in seven of 22 deadlines before September 23, 2010, which was the six-month mark of the law being enacted.

On November 1, 2011, in a second report to Dr. Coburn, the non-partisan Congressional Research Service compiled a list of deadlines mandated in the new health care law, that the Department of Health & Human Services has failed to meet. Out of the 30 deadlines included in the report that passed since the prior report, HHS has gets a "late" or "incomplete" on 18 (or more than half) of these deadlines under the law. The report also provides:

• updated information on a number of deadlines that were included in the earlier memo for which no or only partial implementation action had been taken through April 1, 2011.

• summaries of the PPACA provisions requiring the HHS Secretary or another federal entity to take a specific action by a specific date during the period of March 24, 2011, through October 15, 2011.

The effect of the two reports means that today, over a year and a half since the enactment of PPACA, HHS has cumulatively missed over one-third of the deadlines mandated by PPACA – missing 38 of 101 mandated deadlines. Some of these deadlines were missed by months, while other deadlines have failed to produce any action at all. HHS has also missed several deadlines to report to Congress on specific policy considerations and possible methods of enhancing health care decision making.

Ironically, while HHS is failing to comply with federal law, the administration is rushing to implement a failed health law that will force all American families, physicians, and businesses to comply with a dizzying array of federal mandates, regulations, and requirements. To protect the quality health care that Americans have and to actually fix the problems in our health care system, Congress must repeal this law and replace it with patient-centered reforms that improve quality and access while reducing costs, and put federal spending on a more sustainable path.

For a full table listing the missed deadlines, click here.

Today, Senators Coburn and Barbara Boxer sent the following letter to the Department of Education’s Inspector General asking for an examination of American law schools. Specifically, they asked the Department to provide information about key law school job placement, bar passage and loan debt metrics in light of serious concerns that have been raised about the accuracy and transparency of information being provided to prospective law school students. 

See below for the full text of the letter below or click here for a PDF version:

October 14, 2011

Ms. Kathleen Tighe

Inspector General

U.S. Department of Education

400 Maryland Ave., S.W.

Washington, DC 20202-1500

To help better inform Congress as it prepares to reform the Higher Education Act, we write to request an examination of American law schools that focuses on the confluence of growing enrollments, steadily increasing tuition rates and allegedly sluggish job placement.

Recent media stories reveal concerning challenges for students and graduates of such schools. For example, The New York Times reported on a law school that “increased the size of the class arriving in the fall of 2009 by an astounding 30 percent, even as hiring in the legal profession imploded.” The New York Times found the same school is ranked in the bottom third of all law schools in the country and has tuition and fees set at $47,800 a year but reported to prospective students median starting salaries rivaling graduates of the best schools in the nation “even though most of its graduates, in fact, find work at less than half that amount.”

Other reports question whether or not law schools are properly disclosing their graduation rates to prospective students. Inside Higher Ed recently highlighted several pending lawsuits which “argue that students were essentially robbed of the ability to make good decisions about whether to pay tuition (and to take out student loans) by being forced to rely on incomplete and inaccurate job placement information. Specifically, the suits charge the law schools in question (and many of their peers) mix together different kinds of employment (including jobs for which a J.D. is not needed) to inflate employment rates.”

Media exposes also reveal possible concerns about whether tuition and fees charged by law schools are used directly for legal education, or for purposes unrelated to legal education. For example, The New York Times reports “law schools toss off so much cash they are sometimes required to hand over as much as 30 percent of their revenue to universities, to subsidize less profitable fields.” The Baltimore Sun recently reported on the resignation of the Dean of the University of Baltimore (UB) Law School, who said he resigned, in part, over his frustration that the law school’s revenue was not being retained to serve students at the school. In his resignation letter, UB’s Dean noted: “The financial data [of the school] demonstrates that the amount and percentage of the law school revenue retained by the university has increased, particularly over the last two years. For the most recent academic year (AY 10-11), our tuition increase generated $1,455,650 in additional revenue. Of that amount, the School of Law budget increased by only $80,744.”

To better understand trends related to law schools over the most recent ten-year window, we request your office provide the following information:

1. The current enrollments, as well as the historical growth of enrollments, at American law schools – in the aggregate, and also by sector (i.e., private, public, for-profit).

2. Current tuition and fee rates, as well as the historical growth of tuition and fees, at American law schools – in the aggregate, and also by sector (i.e., private, public, for-profit).

3. The percentage of law school revenue generated that is retained to administer legal education, operate law school facilities, and the percentage and dollar amount used for other, non-legal educational purposes by the broader university system. If possible, please provide specific examples of what activities and expenses law school revenues are being used to support if such revenue does not support legal education directly.

4. The amount of federal and private educational loan debt legal students carried upon graduation, again in the aggregate and across sectors.

5. The current bar passage rates and graduation rates of students at American law schools, again in the aggregate and across sectors.

6. The job placement rates of American law school graduates; indicating whether such jobs are full- or part-time positions, whether they require a law degree, and whether they were maintained a year after employment.

In your final analysis, please include a description of the methodology the IG employed to acquire and analyze information for the report. Please also note any obstacles to acquiring pertinent information the agency may encounter.

We thank you in advance for your time and attention to this matter. Please feel free to contact us if you have any questions concerning this request.

Sincerely,

Tom A. Coburn, M.D. Barbara Boxer

U.S. Senator, Oklahoma U.S. Senator, California

(Articles enclosed)

Inside Higher Ed

Suing Over Jobs

August 11, 2011

For the last year, the Education Department and Congress have debated measures of "gainful employment" for graduates of for-profit vocational programs. And media outlets have competed for the best stories about unemployed liberal-arts graduates. But the question of whether higher education can be held responsible for failing to warn would-be students about the poor job prospects of graduates may really be taking off with regard to law schools.

On Wednesday, a New York City law firm filed class actions against two law schools -- New York Law School and Thomas M. Cooley Law School -- charging that the job placement information they released to potential students was sufficiently inaccurate as to constitute fraud. Those suits follow a similar one filed in May against Thomas Jefferson School of Law. All of the suits argue that students were essentially robbed of the ability to make good decisions about whether to pay tuition (and to take out student loans) by being forced to rely on incomplete and inaccurate job placement information. Specifically, the suits charge that the law schools in question (and many of their peers) mix together different kinds of employment (including jobs for which a J.D. is not needed) to inflate employment rates.

All three law schools deny the charges. And Cooley has already filed a defamation suit against the lawyers suing it. But the litigation comes amid a broader debate over whether the American Bar Association and others are doing enough to promote the release of accurate information, and whether there are too many law schools for the current job market.

While legal experts were still examining the lawsuits and were generally not ready to weigh in on whether or not they will succeed, several said that the litigation points to longstanding problems with how job placement has been tracked, and that changes currently under consideration are overdue.

"The fact that you have some serious class action law firms filing suit should give anybody pause," said William D. Henderson, a professor of law and director of the Center on the Global Legal Profession at Indiana University, and a frequent author on job placement issues. "The whole industry hasn't released useful numbers for consumers," he said.

Henderson said that he strongly backed current moves by the American Bar Association (likely to then be adopted by U.S. News & World Report for its rankings) to shift from a standard of being employed nine months after graduation to being employed in a job for which a J.D. is needed. Those suing today (and those in recent years who were disappointed by their success at finding jobs) relied on statistics that didn't exclude those whose "jobs" were fellowships paid for by their law schools, who were in part-time or temporary jobs, or who were in jobs they could have gotten before they went to law school, he said.

Several years ago, Henderson started noticing and writing about the seeming oddity that bar passage rates were declining at a time when law schools were reporting increases in employment of graduates. For this to be true, he speculated, more people were getting jobs that didn't require them to go to law school. "You are counting people who are selling insurance," he said. "Anybody can find a job to pay the rent."

The New Lawsuits

The new lawsuits are class actions on behalf of three graduates of New York Law School and four from Thomas Cooley. (Both are freestanding law schools.)

Jesse Strauss, one of the lawyers bringing the suits, said in a briefing for reporters Wednesday that he was not denigrating the quality of the legal education provided by the law schools, and that he knew good lawyers who were graduates of each institution. But he said that the information about job placement rates was deceptive. "This is more like a false advertising claim than a product liability claim," he said.

Strauss said that the deceptive information about job placement rates is "distorting the market." With better information, he said, some students wouldn't go to law school, and the population of new lawyers would shrink.

The lawsuit charges that the schools' methods of reporting their placement rates gave would-be students an inaccurate view of their likely outcomes.

"[T]he school during the class period claims that a substantial majority of its graduates -- roughly between 75 and 80 percent -- secure employment within nine months of graduation. However, the reality of the situation is that these seemingly robust numbers include any type of employment, including jobs that have absolutely nothing to do with the legal industry, do not require a J.D. degree or are temporary or part-time in nature," the suit against Thomas Cooley says. "Rather, if Thomas Cooley was to disclose the more pertinent employment statistic -- i.e., those graduates who have secured full-time, permanent positions for which a J.D. degree is required or preferred -- the numbers would drop dramatically, and could be well below 30 percent, if not even lower."

The suit against New York Law School states that it "blatantly manipulates" its placement statistics (which suggest that 92 percent of last year's class is employed). The suit says that the law school engages in numerous efforts to "pretty up" its statistics, such as including part-time work, and including the 5.6 percent of its employed graduates who are in temporary fellowships funded by the law school -- not in real jobs.

The law schools released statements that did not offer point-by-point rebuttals of the suits, but defended the integrity of their statistics. "To the extent the lawsuit challenges our post-graduation employment and salary statistics, we stand by our reporting to the National Association for Law Placement, and any claims that prospective students or our graduates have been misled or legally harmed by our reporting are simply baseless," said the statement from Thomas Cooley. (Even as the law school is being questioned over its job placement record, Thomas Cooley is expanding -- and this week announced plans to open a campus in Florida.)

A statement from New York Law School said: "These claims are without merit and we will vigorously defend against them in court."

The Broader Debate?

What's next in the debate over law placement and these legal cases is the subject of much debate. Officials from the ABA, the Association of American Law Schools and NALP: The Association for Legal Career Professionals did not respond to requests for comment on Wednesday. Privately, two law school officials expressed doubts about whether the class actions would succeed in court, but indicated that defending against them might be embarrassing for the law schools involved and for legal education generally.

For an example of the potential public relations challenges, consider the response of Thomas Jefferson to its class action. As reported in the blog Above the Law, Thomas Jefferson defended itself by noting that the U.S. News job placement figures on which the plaintiff relied were adjacent to figures in the magazine for the law school's bar passage rate. The law school's bar passage rate was lower and Thomas Jefferson's rate many years was "significantly lower" than the employment rate, the law school argues in its brief. So "any reasonable reader" would know that meaningful numbers of the law school's graduating classes were not working as lawyers. The blog's headline for the post: "Is the Answer Worse Than the Allegations?"

While the three law schools that have been sued are not among the nation's most prestigious, the lawyers who sued on Wednesday stressed that they saw the issue as going well beyond those institutions. At the news conference, they pointed to a recent article in The New Republic that analyzed data from an unnamed "top 50" law school, suggesting that one-third of graduates reporting themselves employed are in part-time positions -- meaning that well under half of graduates of a recent class are employed in full-time permanent positions, not the healthy majority that the official statistics would suggest.

Kyle McEntee, executive director of Law School Transparency, a group that has critiqued job placement rates at many law schools, said he was not surprised by the lawsuits. "I think we are going to see more of them," he said.

He said that the moves by the ABA are in the right direction, but that his group wants to see even more information. Law School Transparency urges law schools to release, graduate by graduate, exactly what happens to each new lawyer (without their names). That way prospective students won't get deceived by averages that may be skewed by a few well-compensated lawyers, and will be able to distinguish between true stepping-stone positions (judicial clerkships, for example) and volunteer work that doesn't put someone on the fast track.

Will the ABA Reforms Work?

The proposed ABA surveys on employment deal with many of the criticisms that have been made of past data. For instance, they would ask specifically about whether positions are funded by the law school, whether positions are long term or short term, etc.

But there is controversy over whether these efforts will work. NALP, which has been the primary source of law school placement data, has expressed fears that law schools will no longer collect data for its surveys, and that it is better able than the ABA to analyze the data. (A limitation of NALP's data is that they are not available institution-by-institution, which is why U.S. News's rankings, which include institutional data, have become so valued by law school applicants and so important to law schools.)

Henderson, of Indiana University, said that the ABA may unintentionally supplant NALP, and leave the law school world without anyone capable of truly analyzing the data. The ABA, he wrote in a recent column for The National Law Journal, "has a long track record of releasing mountains of data in a format that makes it very difficult to analyze the industry or make meaningful school-to-school comparisons."

With truly good data, he predicted, the law school market would change, with some law schools forced to improve their programs and with others disappearing.

But Henderson added that he's not certain that -- even with better data -- there won't be disappointed (and impoverished) law school grads in the years ahead. "You've got 22- and 23-year-olds who have an image of lawyers made by popular culture," he said. "They've never bought a house before, and now they can get a loan of over $100,000 to go to law school. This is not a group of people who are going to do rigorous due diligence on the decision to borrow."

— Scott Jaschik

New York Times

July 16, 2011

Law School Economics: Ka-Ching!

By DAVID SEGAL

WITH apologies to show business, there’s no business like the business of law school.

The basic rules of a market economy — even golden oldies, like a link between supply and demand — just don’t apply.

Legal diplomas have such allure that law schools have been able to jack up tuition four times faster than the soaring cost of college. And many law schools have added students to their incoming classes — a step that, for them, means almost pure profits — even during the worst recession in the legal profession’s history.

It is one of the academy’s open secrets: law schools toss off so much cash they are sometimes required to hand over as much as 30 percent of their revenue to universities, to subsidize less profitable fields.

In short, law schools have the power to raise prices and expand in ways that would make any company drool. And when a business has that power, it is apparently difficult to resist.

How difficult? For a sense, take a look at the strange case of New York Law School and its dean, Richard A. Matasar. For more than a decade, Mr. Matasar has been one of the legal academy’s most dogged and scolding critics, and he has repeatedly urged professors and fellow deans to rethink the basics of the law school business model and put the interests of students first.

“What I’ve said to people in giving talks like this in the past is, we should be ashamed of ourselves,” Mr. Matasar said at a 2009 meeting of the Association of American Law Schools. He ended with a challenge: If a law school can’t help its students achieve their goals, “we should shut the damn place down.”

Given his scathing critiques, you might expect that during Mr. Matasar’s 11 years as dean, he has reshaped New York Law School to conform with his reformist agenda. But he hasn’t. Instead, the school seems to be benefitting from many of legal education’s assorted perversities.

N.Y.L.S. is ranked in the bottom third of all law schools in the country, but with tuition and fees now set at $47,800 a year, it charges more than Harvard. It increased the size of the class that arrived in the fall of 2009 by an astounding 30 percent, even as hiring in the legal profession imploded. It reported in the most recent US News & World Report rankings that the median starting salary of its graduates was the same as for those of the best schools in the nation — even though most of its graduates, in fact, find work at less than half that amount.

Mr. Matasar declined to be interviewed for this article, though he agreed to answer questions e-mailed through a public relations representative.

Asked if there was a contradiction between his stand against expanding class sizes and the growth of the student population at N.Y.L.S., Mr. Matasar wrote: “The answer is that we exist in a market. When there is demand for education, we, like other law schools, respond.”

This is a story about the law school market, a singular creature of American capitalism, one that is so durable it seems utterly impervious to change. Why? The career of Richard Matasar offers some answers. His long-time and seemingly sincere ambition is to “radically disrupt our traditional approach to legal education,” as it says on his N.Y.L.S. Web page. But even he, it seems, is engaged in the same competition for dollars and students that consumes just about everyone with a financial and reputational stake in this business.

“The broken economic model Matasar describes appears to be his own template,” wrote Brian Z. Tamanaha, a professor at Washington University Law School in St. Louis, in a blog posting about Mr. Matasar last year. “Are his increasingly vocal criticisms of legal academia an unspoken mea culpa?”

A PRIVATE, stand-alone institution located in the TriBeCa neighborhood of downtown Manhattan, New York Law School was founded in 1891 and counts Justice John Marshall Harlan among its most famous graduates. The school — which is not to be confused with New York University School of Law — is housed in a gleaming new 235,000-square-foot building at the corner of West Broadway and Leonard Street.

That building puts N.Y.L.S. in the middle of a nationwide trend: the law school construction boom. As other industries close offices and downsize plants, the manufacturing base behind the doctor of jurisprudence keeps growing. Fordham Law School in New York recently broke ground on a $250 million, 22-story building. The University of Baltimore School of Law and the University of Michigan Law School are both working on buildings that cost more that $100 million. Marquette University Law School in Wisconsin has just finished its own $85 million project. A bunch of other schools have built multimillion dollar additions.

N.Y.L.S. has participated in another national law school trend: the growth in the number of enrollees. Last year, law schools across the country matriculated 49,700 students, according to the Law School Admission Council, the largest number in history, and 7,000 more students than in 2001. N.Y.L.S. grew at an even faster clip. In 2000, the year Mr. Matasar took over, the school had a total of 1,326 full- and-part-time students. By 2009, the figure had risen to 1,596.

The jump seems to contradict one of Mr. Matasar’s core tenets.

“Can class size be increased without damaging quality?” he asked in a 1996 Florida Law Review article. “Can class size be increased without assurances that jobs will be available for the increased number of graduates? Can class size be increased without also providing more staff, faculty, books and service? Increase class size? No!”

Did Mr. Matasar change his mind? In an e-mail, he cited the unpredictability of yield rates, which is the percent of students who accept an offer of admission. There was more than one year of yield surprises under Mr. Matasar, the largest of which came in 2009, when the incoming class leapt by 171 students.

It was a very profitable surprise, worth about $6.7 million in gross revenue. Mr. Matasar would not discuss the added costs of teaching what became known at the school as “the bulge class.” But faculty members, some of whom were offered the chance to take on additional courses, estimate that, at most, the school had to spend about $500,000 more that year on teaching.

This windfall, it turns out, was perfectly timed. Because as all those students were signing up for their first year at N.Y.L.S., a little-noticed drama was unfolding that involved the financing for that brand-new building.

THREE years earlier, in 2006, the school had floated $135 million worth of bonds to finance construction of the new building, at 185 West Broadway. At the time, Moody’s rated the bonds A3, placing them squarely in the “come and get ’em” category for investors. The rating reflected N.Y.L.S.’s strong balance sheet and the quality of its management, Moody’s said.

Equally important, N.Y.L.S. was — and is — in a very lucrative business. Like business schools and some high-profile athletic programs, law schools subsidize other fields in universities that can’t pay their own way.

“If my president were to say ‘We’ll never take more than 10 percent of your revenue,’ I’d say ‘God bless you,’ and we’d never have to talk again,” says Lawrence E. Mitchell, the incoming dean of the Case Western Reserve University School of Law in Cleveland. “But having just come from a two-day meeting of new and current deans organized by the American Bar Association, I can tell you that some law schools pay 25 or even 30 percent.”

Among deans, the money surrendered to the administration is known informally as “the tax.” Even in the midst of a merciless legal downturn, the tax still pumps huge sums into universities, in part because the price of a law degree continues to climb.

From 1989 to 2009, when college tuition rose by 71 percent, law school tuition shot up 317 percent.

There are many reasons for this ever-climbing sticker price, but the most bizarre comes courtesy of the highly influential US News rankings. Part of the US News algorithm is a figure called expenditures per student, which is essentially the sum that a school spends on teacher salaries, libraries and other education expenses, divided by the number of students.

Though it accounts for just 9.75 percent of the algorithm, it gives law schools a strong incentive to keep prices high. Forget about looking for cost efficiencies. The more that law schools charge their students, and the more they spend to educate them, the better they fare in the US News rankings.

“I once joked with my dean that there is a certain amount of money that we could drag into the middle of the school’s quadrangle and burn,” said John F. Duffy, a George Washington School of Law professor, “and when the flames died down, we’d be a Top 10 school. As long as the point of the bonfire was to teach our students. Perhaps what we could teach them is the idiocy in the US News rankings.”

For years, it made economic sense for smart, ambitious 22-year-olds to pay the escalating price for a legal diploma. Law schools have had a monopolist’s hold on the keys to corporate lawyerdom, which pays graduates six-figure salaries.

But borrowing $150,000 or more is now a vastly riskier proposition given the scarcity of Big Law jobs. Of course, that scarcity hasn’t been priced into the cost of law school. How come? In part, it’s because schools have managed to convey the impression that those jobs aren’t very scarce.

For instance, although N.Y.L.S. is ranked No. 135 out of the roughly 200 schools in the US News survey, it asserts in figures provided to the publisher that nine months after graduation, the median private-sector salary of alums who graduated in 2009 — which is the class featured in the most recent US News annual law school issue — was $160,000. That is exactly the same figure cited by Yale and Harvard, the top law schools in the country.

Mr. Matasar stood by that number, but acknowledged that it did not give a complete picture of the prospects for N.Y.L.S. grads. He noted that the school takes the over-and-above step of posting more granular salary data on its Web site.

“In these materials and in our conversations with students and applicants,” he wrote, “we explicitly tell them that most graduates find work in small to medium firms at salaries between $35,000 and $75,000.”

Determining exactly how many graduates make even those relatively modest salaries isn’t easy. The information posted online by N.Y.L.S. about the class of 2010 says that only 26 percent of those employed reported their salaries. The nearly 300 students who reported being employed but said nothing about their salaries — who knows?

Like all other law schools, N.Y.L.S. collects this job information without anyone else looking at the raw data or double checking the math. Which gets to another dimension of the law school business that other companies might envy: a lack of independent auditing, at least when it comes to these crucial employment stats. It’s kind of like makers of breakfast cereal reporting the nutrition levels of their products, without worrying that anyone will actually count the calories.

THOUGH astoundingly resilient as businesses, law schools have always had a glaring liability: they generally sell just one product, legal diplomas. This lack of diversification means that if enrollment drops, a school’s balance sheet will suffer.

Like all stand-alone institutions, N.Y.L.S. is even more dependent on student tuition than those attached to universities, and Moody’s highlighted this fact in its 2006 appraisal of the school’s bonds. Under a section about potential “challenges” that could lead to a downgrade, Moody’s cited “significant and sustained deterioration of student market position.”

A downgrade would be expensive for the school because it would mark the bonds as riskier, which would force the school to pay higher interest rates in the future.

In May of 2009, a month before the official end of the recession, Moody’s issued a new report and suddenly, a downgrade seemed like a real possibility. One problem was that applications to the school for the upcoming class of 2009, Moody’s reported, were down 28 percent compared with the volume the year before. The rating agency changed its outlook on the bonds from “stable” to “negative,” which is bond-speak for “If current trends continue, a downgrade is coming.”

But just three months later, the enrollment scare was over. In the fall of 2009, the incoming class was N.Y.L.S.’s largest ever — 736 students. (Only one law school in the country, Thomas M. Cooley in Michigan, matriculated a greater number.)

Some faculty members were happy to enhance their salaries by teaching another course. Others were appalled at what the super-sized class would mean for students.

“At a school like New York Law, which is toward the bottom of the pecking order, it’s long been difficult for our students to find high-paying jobs,” said Randolph N. Jonakait, a professor at N.Y.L.S. and a frequent critic of Mr. Matasar’s. “Adding more than 100 students to an incoming class harms their employments prospects. It’s always been tough for our graduates. Now it’s tougher.”

Was Mr. Matasar more worried about bond ratings than the fortunes of his new students? Several faculty members said, and he confirmed, that the bonds were part of discussions about the financial health of the school in 2009.

“However,” Mr. Matasar wrote, “N.Y.L.S. never promised (nor needed to promise) anyone that it would increase enrollment to meet debt service obligations.” The size of the 2009 class, he went on, was “unplanned,” again referring to a surprise in yield.

But given that interest in graduate school typically spikes during economic slumps, wasn’t a sharp rise in yield foreseeable? It was to N.Y.L.S.’s rivals. There are about 40 other schools in what US News has long categorized as its third tier, and the average increase in class size at those schools in 2009 was just 6 percent. (At 10 of those schools, enrollment declined.) That is dwarfed by the 30 percent uptick at N.Y.L.S.

Whether Mr. Matasar had bond ratings in mind at the time, Moody’s liked what it saw. In August of 2010, the company issued a new report that included news of the 736-student class, which was described, in the classic understated style of bond reporting, as “particularly large.” The Moody’s outlook for the N.Y.L.S. bonds changed once again — this time from negative to stable.

THE incoming class of 2009 won’t hit the job market until next year, but if the experience of recent N.Y.L.S. graduates is an indication, many of them are in for a lengthy hunt. Mr. Matasar offered an inventory of N.Y.L.S.’s career services office, which he says includes 15 employees and provides development and mentoring programs and oversees a series of networking events.

There are those, he wrote, “who rave about the career services office.” But he added that a recent poll of law schools found that a little more than half of third-year students were unsatisfied with the job search help. “We have a similar experience,” he wrote.

Among the unsatisfied is Katherine Greenier, of N.Y.L.S.’s class of 2010. As she neared graduation, she organized an informational meeting for students interested in public-interest law, the kind of get-together she thought the career services office should have offered. To her amazement, a rep from that office showed up, took a seat and asked questions.

“She was asking about the process, like how you go about applying for public-interest fellowships,” Ms. Greenier says. “Things that you would have hoped she already knew.”

Ms. Greenier, who wound up with a job at the American Civil Liberties Union in Richmond, Va., ultimately decided that the school had what she called a “factory feel.”

The size of the incoming class of 2009 only sharpened that conclusion.

“There were people wondering, why did the school take on this many people in a job market this terrible?” she asked. “How many of these folks are going to find jobs? And what does it say about the school?”

IN April, Mr. Matasar stood in a lecture hall on the third floor at N.Y.L.S. and delivered the keynote at Future Ed, the third of three conferences about legal education that he’d helped organize, in partnership with Harvard Law School. A few dozen professors and deans were in attendance as he argued for a more student-centric approach to education.

“The focus shifts from us — we the faculty, we the administration, we the permanent employees of the school — to those we serve, our students,” he said. “Things are seen through a lens that says ‘What will this do for the students?’ ”

Nearly all the people who have worked with Mr. Matasar say he means what he says about reforming legal education. N.Y.L.S. professors recall meetings where he urged the faculty to be more responsive to students — to return calls faster, meet more often, whatever would help.

“He put a huge, beautiful student dining area in the top floor of that new building,” says Tanina Rostain, a former N.Y.L.S. professor, now at Georgetown University Law Center. “But it doesn’t have a faculty lounge. We were a little nonplussed, but it was clear that the students were Rick’s priority.”

How does one square that priority with the inexorable rise of N.Y.L.S.’s tuition, its population growth, its eyebrow-arching job data?

The question has puzzled more than a few academics and has produced a variety of theories. Perhaps the most compelling is that as both a crusader and a dean, Mr. Matasar has conflicting, even incompatible missions. The crusader thinks that law school costs too much. The dean has to raise the price of tuition or get murdered in the US News rankings. The crusader worries about the future of all those unemployed graduates. The dean has interest payments to make on a gorgeous new building.

“I’m 100 percent convinced that Matasar believes in his reformist agenda,” says Paul F. Campos, a professor at the University of Colorado at Boulder School of Law and a Future Ed attendee. “But all reformers discover that they can’t change a system by themselves. And by trying to survive in the current structure, he has ended up participating in the perpetuation of its most indefensible elements.”

The tale of Mr. Matasar’s career is not primarily about a gap between words and actions. Rather, it is a measure of how all-consuming competition in the legal academy has become, and how unlikely it is that the system will be reformed from within.

To be clear, there is little about the way N.Y.L.S. operates that is drastically different from other American law schools. What’s happened there is, for the most part, standard operating procedure. What sets N.Y.L.S. apart is that it is managed by a man who has criticized many of the standards and much of the procedure.

In fact, Mr. Matasar has been quoted about wanting to upend legal education for so long it is impossible to believe he is doesn’t mean it. But he can’t act unilaterally. And what industry has ever decided that for the good of its customers, it ought to charge less money, or shrink?

“My salary,” Mr. Campos said, “is paid by the current structure, which is in many ways deceptive and unjust to a point that verges on fraud. But as a law professor, I understand that what is good for me is that the structure stay the way it is.”

DECRYING a business and benefitting from it at the same time — it puts you in a tough spot, Mr. Campos said, and one he speculated is even tougher for a dean. But it is not a spot that Mr. Matasar will be in for much longer.

Several weeks ago, Mr. Matasar sent an e-mail to his faculty stating that he would step down in the next academic year. He was considering a few different job options, he explained, all of them “outside of legal education.”

Baltimore Sun

Read the UB dean's letter to the law school community

July 29, 2011

To the School of Law Community:

At a meeting at 4 o'clock on July 28, University President Robert Bogomolny asked for my resignation as Dean of the School of Law. As of today's date, I have resigned my position as Dean. I truly appreciate the support I have received from the faculty, staff, students and alumni of the School of Law. I write this decanal farewell in order to provide a brief explanation of why I am no longer Dean and to express my gratitude to all of you who welcomed me so warmly to Baltimore.

In the last two years, tensions have been increasing between the University administration and me regarding the financial relationship between the University and the School of Law. When I was a candidate for the Deanship, I was aware that, historically, the University retained a high percentage of the revenue generated by the law school. I was assured by the President at that time that he was aware of the problem and would work with me to remedy it over time. As I began my deanship, I realized that the law school did not possess accurate data in many areas, including its financial situation. Obtaining accurate financial data regarding the School of Law has not been an easy task. After much research and discussion, the University Finance Office and the School of Law agreed this past year on the amount of law school revenue generated by tuition, fees and state subsidy. I obviously always knew our School of Law budget. I have not yet received the critical data regarding the amount of direct and indirect University costs properly attributable to the School of Law. My insistence on having accurate data has exacerbated the difficulties between the University and me.

Every seven years, the ABA inspects law schools for renewal of their accreditation. The law faculty drafted a self study in the spring of 2010 as part of our ABA reinspection process. The percentage of law revenue retained by the University was emphasized as a significant concern of the faculty in that document. I believe a law school dean has a continuing responsibility to share accurate data regarding the law school and its operations. In the past year, I distributed the financial data I had to the faculty and the Dean's Advisory Board in order to inform them about the increasing scope of the problem. Both bodies were concerned about the continued ability of the law school to reach its potential without sufficient funding and the inequity of charging law students increasingly high tuition and fees if a significant percentage of those funds were not directly benefitting the law school. Both the faculty and the alumni insisted that I continue in my efforts to obtain more financial data and a University agreement to decrease its retention percentage over time. I was criticized by the central administration for sharing the financial data with the faculty and my advisory board. University officials also stated that providing funding for the continued improvement of the School of Law was not a high priority for the University.

The financial data demonstrates that the amount and percentage of the law school revenue retained by the University has increased, particularly over the last two years. For the most recent academic year (AY 10-11), our tuition increase generated $1,455,650 in additional revenue. Of that amount, the School of Law budget increased by only $80,774. I do not know of any law school in the country receiving such a small percentage of its generated tuition revenue. A recent article in The New York Times noted that a 25-30% revenue retention by a university was considered high by national standards. As of academic year 2010-11, the University retained approximately 45% of the revenue generated by law tuition, fees and state subsidy. Using any reasonable calculation of the direct and indirect University costs, the University was still diverting millions of dollars in law school revenue to non-law University functions.

Baltimore Sun

Read the letter from the UB president

August 01, 2011

To UB Law Faculty and Staff,

This e-mail is in response to the major issues raised in relation to the resignation of University of Baltimore School of Law Dean Philip Closius. I welcome the opportunity to clarify the misleading and incomplete characterization of the University's relationship to the School of Law that unfortunately resulted from Mr. Closius' public statements.

The decision to seek new leadership for the UB School of Law involved considerable thought around multiple issues during an extended period of time. The ultimate decision was not about financial matters. Although management of University finances was one area of conflict between Mr. Closius and the University, it was not the only area of conflict. I am unable to discuss confidential personnel matters, and unfortunately I cannot provide full details concerning this matter. I can assure you that, based upon many conversations during the past few months, including conversations the provost and I had with approximately a dozen senior law faculty members, select alumni and UB Foundation officials, the overwhelming conclusion was that a change in leadership was in the best interests of the School of Law and the University of Baltimore..

Mr. Closius raised a number of issues in his e-mail to law faculty, staff and students, which he also chose to release to the local and national press. I will address the major, substantive issues below. Please know that I welcome the opportunity to discuss these issues with the law faculty and staff to answer any questions that may remain.

University and Law School Finances

Mr. Closius' central complaint is that the University withheld 45 percent of the School of Law's revenue in the past academic year. In fact, in 2010, the year cited in the recent ABA site visit report, the University retained 13.7 percent of law revenue centrally, after allocating costs related to the law school's regular operation.

Using the 2010 data referenced in the ABA report, 42 percent of law school revenue was retained centrally in 2010 prior to the allocation of general operating costs. The law school's operating costs for 2010 – all expenses attributable to the School's operation that are routinely absorbed centrally, including those related to basic functions such as human resources, technology, heat, light, security, etc. – amounted to approximately $9.97 million. After these costs are allocated for 2010, the School of Law had 13.7 percent of its revenues retained centrally. UB's 13.7 percentage is well below the 20–25 percent national law school average cited in the School of Law's 2010 self-study report, is considerably below the 25–30 percent referenced by Mr. Closius from a recent New York Times article, and represents the lowest percentage among UB's schools and colleges.

Mr. Closius asserts that the UB administration did not provide accurate, transparent financial data regarding central University budgets and the law school allocation. All University budgets are matters of public record and are reported in the state's budget book. The University's internal budget process is open and participatory, with allocations published on the community's Web portal.

To address Mr. Closius' continued requests for budget clarification, I held an open meeting for law faculty early in the spring 2011 semester, accompanied by the provost and the senior vice president of Administration and Finance. At this meeting, I specifically stated that Mr. Closius' assertion that the University withheld more than 40 percent of the law school's revenue was incomplete and misleading because it did not take into account the School's indirect costs, expenses necessary to operate a law school.

Baltimore Sun

University of Baltimore president responds to ousted law dean

Bogomolny says change of leadership will serve best interest of law school, disputes Closius' budget facts

August 01, 2011|By Childs Walker, The Baltimore Sun

The University of Baltimore's president issued a sharp response Monday to allegations aired by the university's former law dean after he was forced to resign last week.

In an e-mail to faculty and staff, President Robert L. Bogomolny disputed financial arguments used by former dean Phillip Closius to portray a university taking advantage of its law school to support other programs. Bogomolny said he had met with key alumni and faculty members and that "the overwhelming conclusion was that a change in leadership was in the best interests of the School of Law and the University of Baltimore."

That message ran counter to an outpouring of criticism last week from students and alumni who praised Closius as a dynamic and caring leader. Students have planned an all-day rally on Tuesday to protest the dean's removal.

The president's e-mail continued an unusual bout of public sparring that has laid bare internal disputes at a university known for producing some of Baltimore's top attorneys. The debate touches on a broader issue in legal education, with law deans around the country claiming that their schools are exploited to support less popular programs.

In his e-mail, Bogomolny rejected the notion that that is occurring at UB and argued that Closius, whom he hired, was off base in saying the law school was not a funding priority.

"This stands in stark contrast to the facts of the School of Law's recent growth and development," Bogomolny wrote. "During my presidency, faculty has grown by more than 30 percent, while scholarships for law students have increased by more than 325 percent in the last five years alone."

He defended recent tuition increases, saying they were necessary to support "transformative growth."

The president disputed Closius' claim that the university seized 45 percent of law school revenues in 2010-2011. Instead, Bogomolny used figures from 2009-2010 to show that of the 42 percent of law school revenues taken by the university, all but 13.7 percent was used to pay for law school operations. The president said the figure represented the "lowest percentage among UB's schools and colleges."

Bogomolny said he held an open meeting with law faculty during the spring semester to dispute Closius' interpretation of the numbers.

"After this presentation, Mr. Closius continued to assert that there has been no rationale or explanation of internal allocations," the president wrote.

He said Closius' complaints led an accreditation panel from the American Bar Association to request a report on the university's budget rationale. "I look forward to submitting that report, as I am confident that it will address this issue definitively and satisfactorily," Bogomolny wrote.

Closius said Monday afternoon that he did not want to continue the back-and-forth with Bogomolny, but he defended his presentation of the numbers as consistent with the way the figures are discussed nationally. "I disagree," he said of Bogomolny's interpretation, "and I'm pretty sure I'm right."

Bogomolny's words did not allay the concerns of law professor Garrett Epps, who said he was "gob smacked" by Closius' forced resignation.

"We all know that every law school is something of a cash cow," Epps said. "As near as we can tell, the University of Baltimore is the biggest cash cow in the country."

Epps credited Closius with improving the quality of the school's students and junior faculty members during his four years as dean. "He had very deep support in the faculty," Epps said. "I am completely mystified by the abruptness of his resignation."

Asked about Bogomolny's statement that he had vetted the leadership change with select faculty leaders, Epps said, "He certainly didn't talk to me."

In his e-mail, Bogomolny also disputed Closius' version of a blow-up regarding naming rights for the law school. Closius said he had negotiated a deal for $10 million with local litigator and alumnus Stephen L. Snyder, only for Bogomolny to reject the deal and raise the price to $20 million. Snyder then declined to meet that price.

The president said he decided $10 million was "substantially inadequate" after reviewing the market for naming rights with university system officials and an outside consultant. He said his judgment was recently validated when the University of Maryland received $30 million from the W.P. Carey Foundation for naming rights at its law school.

Bogomolny concluded that the law school "continues to make considerable progress in terms of faculty quality and student success. … As we strengthen our leadership moving forward, I am confident that this momentum will continue."

According to the university and Closius, the former dean will be part of that future; he said Monday that he still plans to return as a regular faculty member after a yearlong sabbatical.

childs.walker@baltsun.com

Inside Higher Ed

Suing Over Jobs

August 11, 2011

For the last year, the Education Department and Congress have debated measures of "gainful employment" for graduates of for-profit vocational programs. And media outlets have competed for the best stories about unemployed liberal-arts graduates. But the question of whether higher education can be held responsible for failing to warn would-be students about the poor job prospects of graduates may really be taking off with regard to law schools.

On Wednesday, a New York City law firm filed class actions against two law schools -- New York Law School and Thomas M. Cooley Law School -- charging that the job placement information they released to potential students was sufficiently inaccurate as to constitute fraud. Those suits follow a similar one filed in May against Thomas Jefferson School of Law. All of the suits argue that students were essentially robbed of the ability to make good decisions about whether to pay tuition (and to take out student loans) by being forced to rely on incomplete and inaccurate job placement information. Specifically, the suits charge that the law schools in question (and many of their peers) mix together different kinds of employment (including jobs for which a J.D. is not needed) to inflate employment rates.

All three law schools deny the charges. And Cooley has already filed a defamation suit against the lawyers suing it. But the litigation comes amid a broader debate over whether the American Bar Association and others are doing enough to promote the release of accurate information, and whether there are too many law schools for the current job market.

While legal experts were still examining the lawsuits and were generally not ready to weigh in on whether or not they will succeed, several said that the litigation points to longstanding problems with how job placement has been tracked, and that changes currently under consideration are overdue.

"The fact that you have some serious class action law firms filing suit should give anybody pause," said William D. Henderson, a professor of law and director of the Center on the Global Legal Profession at Indiana University, and a frequent author on job placement issues. "The whole industry hasn't released useful numbers for consumers," he said.

Henderson said that he strongly backed current moves by the American Bar Association (likely to then be adopted by U.S. News & World Report for its rankings) to shift from a standard of being employed nine months after graduation to being employed in a job for which a J.D. is needed. Those suing today (and those in recent years who were disappointed by their success at finding jobs) relied on statistics that didn't exclude those whose "jobs" were fellowships paid for by their law schools, who were in part-time or temporary jobs, or who were in jobs they could have gotten before they went to law school, he said.

Several years ago, Henderson started noticing and writing about the seeming oddity that bar passage rates were declining at a time when law schools were reporting increases in employment of graduates. For this to be true, he speculated, more people were getting jobs that didn't require them to go to law school. "You are counting people who are selling insurance," he said. "Anybody can find a job to pay the rent."

The New Lawsuits

The new lawsuits are class actions on behalf of three graduates of New York Law School and four from Thomas Cooley. (Both are freestanding law schools.)

Jesse Strauss, one of the lawyers bringing the suits, said in a briefing for reporters Wednesday that he was not denigrating the quality of the legal education provided by the law schools, and that he knew good lawyers who were graduates of each institution. But he said that the information about job placement rates was deceptive. "This is more like a false advertising claim than a product liability claim," he said.

Strauss said that the deceptive information about job placement rates is "distorting the market." With better information, he said, some students wouldn't go to law school, and the population of new lawyers would shrink.

The lawsuit charges that the schools' methods of reporting their placement rates gave would-be students an inaccurate view of their likely outcomes.

"[T]he school during the class period claims that a substantial majority of its graduates -- roughly between 75 and 80 percent -- secure employment within nine months of graduation. However, the reality of the situation is that these seemingly robust numbers include any type of employment, including jobs that have absolutely nothing to do with the legal industry, do not require a J.D. degree or are temporary or part-time in nature," the suit against Thomas Cooley says. "Rather, if Thomas Cooley was to disclose the more pertinent employment statistic -- i.e., those graduates who have secured full-time, permanent positions for which a J.D. degree is required or preferred -- the numbers would drop dramatically, and could be well below 30 percent, if not even lower."

The suit against New York Law School states that it "blatantly manipulates" its placement statistics (which suggest that 92 percent of last year's class is employed). The suit says that the law school engages in numerous efforts to "pretty up" its statistics, such as including part-time work, and including the 5.6 percent of its employed graduates who are in temporary fellowships funded by the law school -- not in real jobs.

The law schools released statements that did not offer point-by-point rebuttals of the suits, but defended the integrity of their statistics. "To the extent the lawsuit challenges our post-graduation employment and salary statistics, we stand by our reporting to the National Association for Law Placement, and any claims that prospective students or our graduates have been misled or legally harmed by our reporting are simply baseless," said the statement from Thomas Cooley. (Even as the law school is being questioned over its job placement record, Thomas Cooley is expanding -- and this week announced plans to open a campus in Florida.)

A statement from New York Law School said: "These claims are without merit and we will vigorously defend against them in court."

The Broader Debate?

What's next in the debate over law placement and these legal cases is the subject of much debate. Officials from the ABA, the Association of American Law Schools and NALP: The Association for Legal Career Professionals did not respond to requests for comment on Wednesday. Privately, two law school officials expressed doubts about whether the class actions would succeed in court, but indicated that defending against them might be embarrassing for the law schools involved and for legal education generally.

For an example of the potential public relations challenges, consider the response of Thomas Jefferson to its class action. As reported in the blog Above the Law, Thomas Jefferson defended itself by noting that the U.S. News job placement figures on which the plaintiff relied were adjacent to figures in the magazine for the law school's bar passage rate. The law school's bar passage rate was lower and Thomas Jefferson's rate many years was "significantly lower" than the employment rate, the law school argues in its brief. So "any reasonable reader" would know that meaningful numbers of the law school's graduating classes were not working as lawyers. The blog's headline for the post: "Is the Answer Worse Than the Allegations?"

While the three law schools that have been sued are not among the nation's most prestigious, the lawyers who sued on Wednesday stressed that they saw the issue as going well beyond those institutions. At the news conference, they pointed to a recent article in The New Republic that analyzed data from an unnamed "top 50" law school, suggesting that one-third of graduates reporting themselves employed are in part-time positions -- meaning that well under half of graduates of a recent class are employed in full-time permanent positions, not the healthy majority that the official statistics would suggest.

Kyle McEntee, executive director of Law School Transparency, a group that has critiqued job placement rates at many law schools, said he was not surprised by the lawsuits. "I think we are going to see more of them," he said.

He said that the moves by the ABA are in the right direction, but that his group wants to see even more information. Law School Transparency urges law schools to release, graduate by graduate, exactly what happens to each new lawyer (without their names). That way prospective students won't get deceived by averages that may be skewed by a few well-compensated lawyers, and will be able to distinguish between true stepping-stone positions (judicial clerkships, for example) and volunteer work that doesn't put someone on the fast track.

Will the ABA Reforms Work?

The proposed ABA surveys on employment deal with many of the criticisms that have been made of past data. For instance, they would ask specifically about whether positions are funded by the law school, whether positions are long term or short term, etc.

But there is controversy over whether these efforts will work. NALP, which has been the primary source of law school placement data, has expressed fears that law schools will no longer collect data for its surveys, and that it is better able than the ABA to analyze the data. (A limitation of NALP's data is that they are not available institution-by-institution, which is why U.S. News's rankings, which include institutional data, have become so valued by law school applicants and so important to law schools.)

Henderson, of Indiana University, said that the ABA may unintentionally supplant NALP, and leave the law school world without anyone capable of truly analyzing the data. The ABA, he wrote in a recent column for The National Law Journal, "has a long track record of releasing mountains of data in a format that makes it very difficult to analyze the industry or make meaningful school-to-school comparisons."

With truly good data, he predicted, the law school market would change, with some law schools forced to improve their programs and with others disappearing.

But Henderson added that he's not certain that -- even with better data -- there won't be disappointed (and impoverished) law school grads in the years ahead. "You've got 22- and 23-year-olds who have an image of lawyers made by popular culture," he said. "They've never bought a house before, and now they can get a loan of over $100,000 to go to law school. This is not a group of people who are going to do rigorous due diligence on the decision to borrow."

— Scott Jaschik

Inside Higher Ed

Hostile Witness

August 9, 2011

These days there are enough blogs on the theme that law school is a scam that there are multiple blogrolls on the subject, where readers can pick among First Tier Toilet!, Fluster Cucked, Subprime JD, Tales of a Fourth-Tier Nothing and more. Most of these blogs are run by law students or recent graduates frustrated by a lousy job market, student loan debt and a feeling that they were ripped off by their law schools.

Another unemployed lawyer blog probably wouldn't attract much attention, but these "scam" bloggers have been abuzz about the latest arrival on their blogrolls: a blog sharing many of their points of view, but written by a tenured law professor.

"I can no longer ignore that, for a very large proportion of my students, law school has become something very much like a scam," says the introductory post of the blog, Inside the Law School Scam. "Yet there is no such thing as a 'law school' that scams its students -- law schools are abstract social institutions, not concrete moral agents. When people say 'law school is a scam,' what that really means, at the level of actual moral responsibility, is that law professors are scamming their students."

The professor has gone on in subsequent posts to describe his law faculty colleagues as overpaid, and as inadequate teachers. "The typical professor teaches the same classes year after year. Not only that -- he uses the same materials year after year. I’m not going to bother to count -- this is law school after all, and we don’t do empirical research -- but I bet that more than half the cases I teach in my required first-year course were cases I first read as a 1L 25 years ago. After all I use the same casebook my professor used. I even repeat some of his better jokes (thanks Bill)," says one post.

And that was followed by another criticizing the gradual decline in teaching loads of professors at law schools (a trend that has been documented elsewhere), and arguing that students are paying quite a bit for minimal teaching time and effort. Of his fellow law professors, he writes: "They are like the most burnt out teachers at your high school, if you went, as I did, to a middling-quality public school. But with this difference: the most burnt-out teachers at your high school still had to show up for work for seven hours a day. Also, they didn't get paid $200,000 (or even quite a bit more) per year. And you didn't pay $50,000 a year for the benefit of their talents."

And LawProf says he's just getting started.

The author identifies himself only as "a tenured mid-career faculty member at a Tier One school." He agreed to reveal his identity to Inside Higher Ed, and his description is accurate. He teaches at a law school that doesn't make the "top 10" lists, but that is generally considered the best in its state and is well regarded nationally. His C.V. shows plenty of scholarship and professional involvement. And while "LawProf" (as he calls himself) is disdainful of the prestige hierarchy of American law schools, he said in the interview that it was important for the law school world to hear from someone "at a better law school," because so many law professors write off the current complaints from new graduates "as the concerns of third-tier law schools, which don't matter."

The reality, LawProf said, is that while students at top law schools fare much better, the issues are present everywhere. "Students are unable to get the kinds of jobs they want, and they are having to go for jobs they didn't envision before, and they are feeling ripped off," he said.

"A lot of people are going to get mad at me," especially if they ever figure out who he is, which he expects will happen, LawProf said. And while he has tenure, he said he believed there would be repercussions for speaking out as he is. "It's breaking a wall of silence," LawProf said. And he said that he believes he will be more frank by writing anonymously.

In terms of reforming legal education, LawProf said it could be much less expensive, which in turn would result in less of a need for students to borrow, and change the current dynamic in which new graduates face massive debts without good jobs.

A plan for change, he said, would be to ignore the rankings (which encourage the wrong kinds of behavior), to stop spending so much on "luxury" facilities for law schools "that have nothing to do with education," to cut the number of administrators, and to offer fewer legal clinics (which he said are expensive and hide the poor job law schools do of training people to be lawyers).

And in a reflection of how unpopular he would be with his colleagues if he went public, LawProf called for law professors to be paid much, much less. Law professors (along with those in fields such as medicine and business) typically earn much more than their faculty colleagues in other disciplines. LawProf said he earned about $170,000 last year -- nowhere near the top of the heap at his law school, but double what most tenured professors outside the law school earn at his institution.

The traditional argument made in defense of such salary levels is that law schools would lose their best talent to law firms. But LawProf said that was "a bunch of bullshit." He said that law schools regularly employ a limited number of top lawyers (at a fraction of their billable hour rates) to teach single courses, and could do more of this and thereby bring more real-world experience into law schools.

And as for the full-time academics, LawProf said that they enjoy benefits of not working in law firms: shorter hours, less pressure, the ability to pick their areas of interest -- all of which should make typical academic salaries appropriate. Law professors, he said, do things they like 95 percent of the time, and law firm lawyers do that 5 percent of the time. That is a choice of value, he said. "Why are we paying these academics twice as much as other academics?" he asked.

Michael A. Olivas, a law professor at the University of Houston who is president of the Association of American Law Schools (but who stressed that he was speaking for himself, not the organization), said that LawProf is welcome to return half of his salary if he is guilt-ridden.

Olivas said that "there is a small grain of truth in most of what he says," but that his portrayal of law professors is unfair and inaccurate. Olivas said that good law professors prepare for every meeting of every course, paying attention to changes in the law. He said that they routinely help not only current students, but alumni. And he said legal scholarship is valuable to academe and society. "It's unprincipled to walk into class unprepared," he said. "I would never do that. Most people would never do that."

The vision of law school presented by LawProf neglects the extent to which American legal education is seen as a model in the rest of the world, Olivas said. Models that are based on maximum efficiency in other countries lead to large classes, minimal professor-student contact, and no scholarship, he added, wondering whether LawProf would like such a set-up in the United States.

Olivas also criticized LawProf for writing anonymously. "To hide behind an anonymous blog is to create hearsay that doesn't even round up to gossip," he said. Making such criticisms in public, Olivas said, would create an opportunity for meaningful debate, including exploring whether LawProf's experiences at his law school are typical of the faculty members there, or of law professors in general.

LawProf said that the realities of legal education today require a "whistle-blowing approach" such as the one he is taking. Other professions -- such as medicine -- may be guilty of restricting entry and making training quite expensive, but they tend to produce solid careers for those who graduate from medical school. "The cartel of legal education is not good at all at protecting law graduates, but it's very good at protecting the economic privileges of legal academia," he said. The reason he has joined the "scam bloggers" is that "they have figured out that we have a cartel that screws them and the public."

— Scott Jaschik

President Obama promised that Americans who like their current coverage can keep it on more than 45 separate occasions. However, according to Department of Health and Human Services’ (HHS) 2010 rule on grandfathered health plans under the Patient Protection and Affordable Care Act (PPACA), between 39 and 69 percent of businesses will lose their status as “grandfathered health plans.” The picture is even worse for small businesses – HHS estimates by 2013, up to 80 percent of small businesses will lose their grandfather status.

Unfortunately, an accumulating mountain of evidence paints an even more dire picture. Two former Democrat Governors have predicted employers will drop health coverage. Former Tennessee Governor Phil Bredesen wrote in the Wall Street Journal about the incentives for the state of Tennessee to drop state employee insurance. According to Governor Bredesen, Tennessee could pay the $2,000 dollar fine on each employee not covered, give cash raises, and still come out $146 million ahead.

Click here to keep reading...

Dr. Coburn, along with Sens. Ron Johnson (R-WI), Claire McCaskill (D-MO), John McCain (R-AZ), and Scott Brown (R-MA), today sent this letter to the members of the Senate Committee on Appropriations concerning the budget of the nonpartisan Government Accountability Office (GAO) being subjected to unfair and excessive cuts. While they agree GAO must face the same harsh fiscal realities being applied to every other federal agency and program, the cut to the agency’s budget represents more than ten percent of the entire reduction proposed within legislative branch spending.

Excerpts:

• "We are concerned that the Government Accountability Office (GAO) is being unfairly singled out with both excessively deep cuts and overly burdensome new mandates that will consume the agency’s more limited resources for no apparent benefit"

• "While GAO’s budget is being slashed, the bill provides a spending increase for the John C. Stennis Center for Public Service Training and Development and Senators Official Personnel and Office Expenses escape serious cuts with a shave of just 3.17 percent"

• "While GAO has stepped up efforts to meet congressional demands, the oversight conducted by Congress itself has declined dramatically. Congressional committees, for example, held 318 fewer hearings in the 111th Congress than in the 110th Congress. There is no question oversight of the federal government, a primary function of the legislative branch, will suffer as a result of this dramatic cut to GAO funding"

• "As we seek solutions to our nation’s fiscal crisis, GAO’s nonpartisan expertise has never been more valuable. In fiscal year 2009, GAO documented about $43 billion in financial benefits—a return of $80 for every dollar spent by GAO. The $41.7 million cut to GAO’s budget could, therefore, result in $3.3 billion in federal funds that will be lost to waste, fraud, abuse, and inefficiency. We cannot afford that possibility, especially at this time"

Full text of the letter: here

Today, Dr. Coburn sent this letter to members of the Joint Select Committee on Deficit Reduction outlining more than $300 billion in deficit reduction from eliminating or reforming 12 expenditures in the tax code.

Senators DeMint, Coburn, Lee, and Johnson urge their colleagues to address concerns related to the Combating Autism Reauthorization Act and request modifications to the bill that would prioritize taxpayer dollars by ending programs that the Government Accountability Office has shown to be wasteful, duplicative, and inefficient. 

Read the letter from Senators DeMint, Lee, Coburn, and Johnson to Senator Menendez here. Text of their amendment to provide the Secretary with discretion to conduct the programs reauthorized under the Combating Autism Reauthorization Act using existing funds here.

Today,  Dr. Coburn urged Majority Leader Reid to include his amendment that would repeal the federal mandate that requires states to spend 10 percent of funding provided from the surface transportation program (STP) for transportation enhancement (TE) activities.  TE includes transportation museums, pedestrian walkways, bicycle paths, landscaping and scenic beautification, and has even included a squirrel sanctuary and a turtle tunnel.

If states do not comply with this federal mandate, the federal government “will withhold future” STP funding from states not in compliance with this mandate.

 This amendment repeals the federal mandate forcing states to spend 10 percent of STP funds on niceties rather than transportation needs.  This will provide states and communities the flexibility to enhance safety rather than beautification and to meet local needs rather than the whims of Washington politicians, bureaucrats and special interest groups. 

Additional background on the amendment: here.

“Now, I realize there are some in my party who don’t think we should make any changes at all to Medicare and Medicaid, and I understand their concerns. But here’s the truth: Millions of Americans rely on Medicare in their retirement. And millions more will do so in the future. They pay for this benefit during their working years. They earn it. But with an aging population and rising health care costs, we are spending too fast to sustain the program. And if we don’t gradually reform the system while protecting current beneficiaries, it won’t be there when future retirees need it. We have to reform Medicare to strengthen it.” —President Barack Obama, September 8, 2011, Address to a Joint Session of Congress

Claim: “They pay for this benefit during their working years. They earn it.”

Fact: Actually, current taxpayers, not the seniors who contributed during their working years, are primarily paying for Medicare benefits. A single woman who retired in 1980, after earning average wages throughout her career, could expect to receive medical care worth about $74,800 over the rest of her lifetime. A comparable woman retiring in 2010 can expect services worth $181,000 (adjusted for inflation). These estimates, by economists Eugene Steuerle and Stephanie Rennane of the Urban Institute, illustrate the huge disconnect between widely-held perceptions and the numbers behind Medicare's shaky financing. Consider an average two-earner couple who together earn $89,000 a year. Upon retiring in 2011, they would have paid $114,000 in Medicare payroll taxes during their careers. But they can expect to receive medical services – from prescriptions to hospital care – worth $355,000, or about three times what they paid into the program during their career.

—

Claim: “But with an aging population and rising health care costs, we are spending too fast to sustain the program.”

Fact: This is true, but other factors are also at work. When Medicare was created in 1965, the average life expectancy was just above 70 years old. At that time, roughly 4.6 workers supporting each beneficiary receiving benefits. However, because of improvements in medical innovation and public health, today life expectancy is above 80 years old, and there are an average of 3.8 workers per beneficiary. With current trends and a wave of retiring baby boomers, in 2050 the program is only expected to have about 2.2 workers per beneficiary.

—

Claim: “If we don’t gradually reform the system while protecting current beneficiaries, it won’t be there when future retirees need it.

Fact: Actually, current retirees who depend on Medicare are already threatened by a broken Medicare system. The 2011 report of the Medicare Board of Trustees estimates that under a best-case scenario, by the time a 65-year-old today is 78, the program will be insolvent. Troublingly however, the program’s actuary recently said that in a worst-case scenario, Medicare’s hospital insurance program could be exhausted in 2016.

—

Claim: “We have to reform Medicare to strengthen it.

Fact: Yes, one thing that Democrats and Republicans should be able to agree on: we have to reform Medicare to strengthen and save it. It’s not a matter of personal opinion, it’s basic math. The nonpartisan CBO estimates that the program is just nine years away (2020) from not being able to pay out current benefits. The Medicare Actuary’s official estimate of the date of insolvency is 2024, though a more realistic assessment from the Actuary’s office suggests the program could be insolvent as soon as 2016.

# # #

Dr. Coburn's amendment #599 to H.R. 1249, the Patent Reform bill would provide an immediate solution to the financial crisis at the Patent & Trademark Office (PTO). The amendment creates a lockbox—a new revolving fund at the Treasury—where user fees that are paid to the PTO for a patent or a trademark go directly into the revolving fund for the PTO to use to cover its operating expenses. Congress would not have the ability to take those fees and divert them to other general revenue purposes.

Coburn amendment #599 bill text here. Additional background here. 

Dr. Coburn's op-ed on ending patent fee diversion here.

While members of Congress have at times been accused of receiving excessive retirement payments while being exempt from contributing to Social Security and the congressional pension fund themselves, this is not in fact true.

A report by the non-partisan Congressional Research Service provides a summary of why, contrary to popular belief, members of Congress are currently required to participate in Social Security and have been since January 1984.

Key facts about retirement benefits for Members of Congress:

• Members of Congress first elected in 1984 or later are covered automatically under the Federal Employees' Retirement System (FERS) and required to participate in Social Security.
• Members of Congress also have the option of participating in the Thrift Savings Plan (TSP) which is akin to a 401K plan.
• Congressional pensions are financed through a combination of employee and employer contributions, this includes Members of Congress.
• The amount of the congressional pension depends on years of service and the average of the highest three years of salary. By law, the starting amount of a Member's retirement annuity may not exceed 80% of his or her final salary.

Read the full CRS report here.

On July 29, 2011, a committee of the Institute of Medicine (IOM) released its report reviewing the FDA’s 510(k) process for approving medical devices. The FDA spent $1.3 million taxpayer dollars tasking the IOM committee to answer two basic questions. However, based on a review of the IOM committee’s membership, process, and funding, it is not at all clear if taxpayers were well served by the report.

Membership

• The membership of the IOM Committee was quite distinguished, but according to the FDA’s response to questions for the record before the House Energy and Commerce Committee, “no member of the committee [was] an entrepreneur or an investment capitalist,” and “no member of the committee [was] employed or otherwise works with a patient advocacy group related to medical devices.” Furthermore, it is not clear how many, if any, of the physician members of the panel currently practice medicine and use medical devices in a clinical practice. It would have been more prudent to include individuals with direct experience in the industry and process being evaluated. Omissions to the contrary are an unfortunate oversight.

Process

• It is not entirely clear that the IOM process was sufficiently through in a manner that engaged the necessary stakeholders. In response to questions for the record before the House Energy and Commerce Committee, the FDA noted that the IOM committee only held three public meetings – a public meeting and two public workshops – to discuss an issue of such great significance to patients and industry.

• The FDA tasked the IOM Committee to answer two basic questions:

1. Does the current 510(k) process protect patients optimally and promote innovation in support of public health?

2. If not, what legislative, regulatory, or administrative changes are recommended to achieve the goals of the 510(k) process optimally

• However, despite this important and simple charge, the IOM Committee largely punted on answering these questions in specificity. The committee recommended effectively scrapping the entire 510(k) process – a process that has been relatively widely praised by patients, consumers, innovators, and manufacturers.

• If committee’s report were merely the product of a private entity, it would be disappointing, but less concerning. However, the IOM committee’s methodology and results not only may have wasted $1.3 million taxpayer dollars, but points to a larger troubling trend.

Funding

• An examination of the data reveals that taxpayers may be disproportionately subsidizing the IOM.

• Based on a review of IOM’s federal funding from FY2001 through FY2011, taxpayers gave IOM $307.2 million over that timeframe.

• This is not only a lot of money, but it appears that, at least in some years, taxpayers funded more than half of IOM’s entire budget. For example, funding levels for 2009 are available in the "President’s Report Supplement Program Listing and View of IOM Finances, 2009 Edition." According to that report, “the program budget of the IOM in 2009 grew by more than 19 percent over the previous year. The trend toward an increasing fraction of support from non-government sources continued this year, with more than 40 percent of our total program budget in 2009 derived from private sources....” So was the remaining 60% was governmental? Yes, that’s roughly accurate. Page 53 of the report supplement has a figure showing that 55% of IOM program funding came from federal sources. The 55% is broken down as follows:

HHS 29%

VA 11%

DHS 4%

AID 2%

EPA 2%

USDA 2%

Other federal 5%

Total federal 55%

Conclusion

• While many well-intended professionals may make important contributions to their respective fields through work at IOM, in this case, based on a review of the IOM committee’s membership, process, and funding, it concerning that $1.3 million taxpayer dollars were spent on the IOM reviewing the FDA’s 510(k) process.

• There are further concerns that many of IOM’s taxpayer-funded projects and reports duplicate the capabilities of other organizations in and outside of government. For example, virtually all Departments within the federal government have employees who serve as policy analysts, budget crunchers, and issue experts that could be utilized in-house to produce reports or conduct research, at no extra cost to taxpayers.

• There are many intellectually interesting questions in life, and some are truly scientifically significant, but important questions deserve a rigorous, careful, transparent, and accountable process to produce constructive, concrete, and detailed answers for all Americans. Certainly in this case, Americans are right to ask if they got their money's worth.

Washington Journal host Susan Swain interviewed Dr. Coburn this morning about the latest debt limit negotiations and various proposals to put our nation's economy back on a sustainable course. 

Highlights..

“We have seen the Republicans offering multiple things. We have a bill on the senate they are going to table that actually fixes the problem, raises the debt limit, and they don't want to vote on it, so we're going to table it. So I think it is all political posturing”

“The root for us, as every American, is if we don't get a deal done, I think it will cost us a half of one percent. Even if we got a deal done 10 days later, I think it costs us a half of one percent. The problem isn't the negotiation between the republicans and democrats, it is not between the president and the speaker. The problem is for us to maintain our debt rating we have to have a program that cuts about $4 trillion at a minimum over the next 10 years”

“Washington doesn't cut because Washington cares more about being re-elected than they do about the public. It comes from a lack of courage to stand up and do the best right thing for our country”

“I would rather fix our country and lose a battle with Grover Norquist then send our country down the tubes and raise a point of view that is suicide”

“I think there are tons of tax credits and things in the tax codes that are unfair that we ought to eliminate. Anybody that gets something out of the tax code today in terms of the tax credit and the tax spend tour, you are paying for it if you didn't get one”

“We have to get $4 trillion. That doesn't go away no matter what anybody says. The President didn't have a deficit plan. The President's commission had a deficit plan. He never embraced it”

Today, Dr. Coburn filed amendment #500 to S.679, the Nominations Process Reform Bill that would require all legislation to be reviewed before it is considered by the Senate to determine whether new duplicative and overlapping programs are being created. 

Specifically, this amendment would require committee reports accompanying every bill to provide:

(1) an analysis by the Congressional Research Service to determine if the bill creates any new federal program, office, or initiative that would duplicate or overlap any existing federal program, office, or initiative with similar mission, purpose, goals, or activities along with a listing of all of the overlapping or duplicative federal program or programs, office or offices, or initiative or initiatives; and 

(2) an explanation provided by the committee as to why the creation of each new program, office, or initiative is necessary if a similar program or programs, office or offices, or initiative or initiatives already exist.

Text of the amendment HERE. Additional background HERE.

Today, the Council for Citizens Against Government Waste (CCAGW) and Americans For Prosperity offered their endorsement of the Medicaid Improvement and State Empowerment Act (S. 1031), urging Congress to pass this legislation that frees states from bureaucratic red tape and empowers them to make immediate reforms that will improve care for patients. CCAGW letter here. AFP letter here.

"Coburn’s S. 1031 introduces even better incentives, from which all states and taxpayers will benefit. It gives states more control over their program dollars to get rid of waste, fraud and abuse...It is long past time to introduce similar reforms to Medicaid. The current stalemate on the debt limit should not prevent Congress from taking up S. 1031 at the earliest convenience" - The San Francisco Examiner

"Their “Medicaid Improvement and State Empowerment Act” would give “health grants” to states to provide coverage for low-income Americans and give states more flexibility to provide care that suits the needs and resources of their states and not the dictates of Washington bureaucrats" - Daily Caller

"Rather than increasing Medicaid spending dramatically...Republicans have proposed giving states a specified amount of federal Medicaid funding that they could then use to tailor their Medicaid programs to the specific needs of their residents — something that governors have long been requesting" - The Weekly Standard

Last week, the Congressional Research Service (CRS) released data requested by Dr. Coburn on presidential appointments and nominations during the 111th and 112th Congress to date.

Specifically, the report found that of the 118 nominees awaiting confirmation as of May 6, 2011, only 87 were in just three committees Foreign Relations, Judiciary, and Health, Education, Labor, and Pensions. During the 111th Congress, the President submitted 964 distinct nominations to executive branch positions and as of May 6, he submitted 174 nominations to executive branch positions in the 112th Congress.

Read the full report here.

Today the Medicare Trustees released their annual report on the health of the Medicare program. The headlines will probably be filled with the news that report says that Medicare’s Hospital Insurance (HI) Trust Fund is now projected to be insolvent in 2024, which is five years sooner than the 2029 estimate in last year’s report. This is an important piece of the story, but don’t miss the key caveats offered by Medicare’s Chief Actuary on the very last page (p. 265) of the report, under “Statement of Actuarial Opinion.” A summary is below.

These “Projections” Are “Not Reasonable As An Indication of Actual Future Costs.”

• “While the Part B projections in this report are reasonable in their portrayal of future costs under current law, they are not reasonable as an indication of actual future costs. Current law would require a physician fee reduction of an estimated 29.4 percent on January 1, 2012—an implausible expectation.” The Congressional Budget Office has estimated maintaining the current level of physician reimbursements under Part B will cost taxpayers roughly $300 B.”

The Budget Gimmicks in Congress’ Controversial Health Law Anticipate Medicare Prices Will Be “Considerably Below” Current Medicaid Prices, “Far Below” Private Insurance Levels.

• “Further, while the Affordable Care Act ….there is a strong likelihood that certain of these changes will not be viable in the long range. Specifically, the annual price updates for most categories of non-physician health services will be adjusted downward each year by the growth in economy-wide productivity. The best available evidence indicates that most health care providers cannot improve their productivity to this degree—or even approach such a level—as a result of the labor-intensive nature of these services. Without major changes in health care delivery systems, the prices paid by Medicare for health services are very likely to fall increasingly short of the costs of providing these services. By the end of the long-range projection period, Medicare prices for hospital, skilled nursing facility, home health, hospice, ambulatory surgical center, diagnostic laboratory, and many other services would be less than half of their level under the prior law. Medicare prices would be considerably below the current relative level of Medicaid prices, which have already led to access problems for Medicaid enrollees, and far below the levels paid by private health insurance.”

These Budget Gimmicks Mean Congress Will Have to Spend More To Prevent “Severe Problems With Beneficiary Access to Care,” Which “Would Lead to Far Higher Costs for Medicare.”

• “Well before that point, Congress would have to intervene to prevent the withdrawal of providers from the Medicare market and the severe problems with beneficiary access to care that would result. Overriding the productivity adjustments, as Congress has done repeatedly in the case of physician payment rates, would lead to far higher costs for Medicare in the long range than those projected under current law.”

This Report Is Not a “Reasonable Expectation for Actual Program Operations” in the Short or Long Term.

• “For these reasons, the financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range (as a result of the unsustainable reductions in physician payment rates) or the long range (because of the strong likelihood that the statutory reductions in price updates for most categories of Medicare provider services will not be viable).”

Medicare’s Chief Actuary Gives Americans Recommended Reading for Medicare, Since Current Projections are “Poor Indicators” of the “Likely Future Financial Status of Medicare.”

• “I encourage readers to review the “illustrative alternative” projections that are based on more sustainable assumptions for physician and other Medicare price updates. These projections are available at http://www.cms.gov/ActuarialStudies/Downloads/2011TRAlternativeScenario.pdf. The Board of Trustees has convened an independent panel of expert actuaries and economists to consider these issues further and to make recommendations to the Board regarding the most appropriate long range growth assumptions for Medicare projections. To date the panel has concluded that the long-range Medicare cost growth assumptions underlying the projections in the 2010 Trustees Report (and used again in this year’s report) are not unreasonable. The panel further recommended continued use of a supplemental analysis, such as the illustrative alternative projections, for the purpose of illustrating the higher Medicare costs that would result if the physician payment reductions continued to be overridden by Congress and the productivity adjustments to most other provider payment updates were phased out. The panel’s ongoing work should help both to inform the selection of assumptions for the 2012 and later reports and to assess the sustainability of the Medicare price adjustments under current law. Although the current-law projections are poor indicators of the likely future financial status of Medicare, they serve the useful purpose of illustrating the exceptional improvement that would result if viable means can be found to permanently slow the growth in health care expenditures.”

Congress’ Controversial “Health Reform” Was Not Entitlement Reform.

• “The projections in this year’s annual report provide an unequivocal incentive to vigorously pursue the development of effective and sustainable new approaches, with the potential to make quality health care much more affordable.”

If the Economy Continues to Be Soft, Insolvency Could Occur Even Sooner.

• “Finally, the economic outlook remains more uncertain than usual. Due to the sensitivity of HI trust fund operations to wage increases and unemployment, the current slow recovery from the recent recession adds a significant further element of uncertainty to thetrust fund projections.”

 

Dr. Coburn is proposing to cut spending by $20 billion as the Senate debates the small business bill. He has filed the following eight amendments to S. 493 and looks forward to their adoption. Targets include ethanol, funding for PBS and duplications identified by GAO.

1. Eliminate funding for the ethanol subsidy: $4 billion. Background here (Amendment #220)

2. Eliminate funds for leftover earmarks: $4.8 billion. Background here (Amendment #218)

3. Eliminate program duplications identified by GAO: $5 billion. Background here (Amendment #273)

4. Eliminate unemployment payments to millionaires: $20 million. Background here (Amendment #281)

5. Reduce new car purchases by the government: $900 million. Background here (Amendment #221)

6. Eliminate funds for ‘covered bridges’ program: $8.5 million. Background here (Amendment #217)

7. Eliminate taxpayer subsidies for CPB: $550 million. Background here (Amendment #222)

8. Identifies, discloses, and describes every federal program. (Amendment #184)

9. Prohibits federal funds from being used to pay off TARP obligations. Background here (Amendment #279)

March 24th - the Council for Citizens Against Government Waste President Thomas Schatz sent a letter of support for S. 520, the Volumetric Ethanol Excise Tax Credit (VEETC) Repeal Act, a bill recently introduced by Senators Coburn and Cardin that would eliminate the $6 billion provided annually to subsidize blenders of ethanol. Read the letter from CCAGW here.

March 29th - Taxpayers for Commonsense circulated a letter urging members of Congress to support the Coburn-Cardin amendment to eliminate the ethanol tax credit and save taxpayers $6 billion in this year alone. Read the letter from Taxpayers for Commonsense here.

March 30th - President of the National Petrochemical and Refiners Association (NPRA), Charles Drevna, sent a letter of support for the Coburn-Cardin bill (S. 520) and the Coburn amendment (#220) to end the ethanol tax credit. Read the letter from NPRA here.

Congress’ controversial health care overhaul created the Independent Payment Advisory Board (IPAB) –a panel of unelected bureaucrats who will be politically-appointed and charged with developing proposals to "reduce the per capita rate of growth in Medicare spending." Under the law, HHS is forced to implement the panel’s proposals automatically unless Congress intervenes with similar cuts.

There are virtually no checks on the panel, since its members are not answerable to voters and its recommendations cannot be challenged in court. Because the panel is barred from examining common-sense changes like Medicare beneficiary premiums, cost-sharing, or benefit design, many expect that in efforts to control spending, the panel will limit patient access to medical care.

While the law does not provide a date by which the panel of bureaucrats will begin its operations, funding for the Board is authorized as soon as this fall (FY2012). Medicare’s Chief Actuary makes its first determination in 2013 which could set up the trigger and the panel’s recommendations.

Now there is troubling new news: the White House could bypass Congress and its role to confirm members by recess appointing members of this highly controversial panel. When nonpartisan experts at the Congressional Research Service were asked if it is possible for the President to recess appoint a working majority of the IPAB that are only of his political party, and then for those appointees to begin issuing recommendations, they confirmed it was possible. “We do not see why,” CRS staff said, “should the normal conditions for a recess appointment occur, the President could not recess appoint a majority of the 15-member Board with individuals of his choosing as long as those appointments complied with the other limitations established that section — that is, that the appointments include doctors and other health care professionals, that a majority of the board be non-providers, etc.”

This means the White House could nominate political allies, bypass the Senate’s constitutional role to confirm Presidential appointees, and effectively dictate policies through unelected Medicare czars. Since this Administration has already recess-appointed the highly controversial Don Berwick, what’s to stop the White House from pursuing this path?

Key excerpts from the report:

Could the President appoint members of the IPAB using his recess appointment authority?

• “There is no constitutional or statutory qualification on the President’s ‘Power to fill up all Vacancies ....’ Because the President’s recess appointment authority is unqualified, it appears that he could fill member positions on the IPAB by recess appointment during any period when he could otherwise make such appointments.”

If so, could he recess appoint enough members of his own political party to give the board a working majority without appointing any members of a party other than his own?

• “Were the President to make recess appointments to the IPAB, he could fill whichever positions on the board he chose to, consistent with the statutory requirements described above with regard to consultation, qualifications, and term specifications. He need not ensure that the result of his appointments is a politically balanced board. It is possible that he could, in fact, make recess appointments only to those membership slots that are likely to be filled by members of his own party: the three filled in consultation with the Senate majority leader, the three filled in consultation with the House minority leader, and the three filled without consultation. If the President were to make such recess appointments, 9 of the 15 member positions would be filled, and this number would be, as noted above, sufficient to provide a quorum for the board to conduct business. In addition, he could use his recess appointment power to appoint one of these nine members as chair. Inasmuch as the chair is empowered to ‘exercise all of the executive and administrative functions of the Board,’ this act would facilitate the managerial activities, such as the hiring of personnel and expenditure of funds, that would be necessary to start up the agency.”

What authority does the President have to remove IPAB members?

• “Regarding grounds for removal, it should be noted that there is no clear standard clarifying these statutory terms. Congress has stated, however, that a removal for good cause must be based on ‘some type of misconduct,’ as opposed to the refusal to carry out a presidential order….. As a matter of tradition and case law, members of other regulatory and quasijudicial boards and commissions are generally thought to enjoy protection from removal, even where the enabling statute is silent on such matters.”

Read the full report here.

Ads to Educate Seniors About Medicare Fraud: $165,000. HHS has announced a national media campaign to target Medicare fraud. This television and radio campaign is meant to educate consumers, specifically seniors, about fraud. It will emphasize the importance of protecting sensitive personal information (like Medicare ID numbers). It will run nationally, but focus on the fraud “hot spots” around the country. Specifically, the Administration on Aging has contracted to develop Public Service Announcements (PSA) to increase awareness of the Senior Medicare Patrols (SMP) fraud prevention message and provide a "call to action" for seniors to help fight fraud by becoming an SMP volunteer. The contract, for $165K, includes development of 60,30 and 15 second PSAs in Spanish and English for both radio and TV, development of a media campaign toolkit and distribution of PSAs to media outlets nationwide.

Ads to Persuade Seniors About PPACA’s $530 Billion Medicare Cuts: $700,000+. In responding to a letter from Sens. Coburn, Barrasso, McCain and Thune on HHS’s controversial ads about Medicare featuring Andy Griffith, Secretary Sebelius submitted information from CMS that said the Administration spent at least $700,000 “to produce and run [the] first spot of the open enrollment campaign” that featured Andy Griffith. A second letter from Secretary Sebelius (attached) further outlined the full costs.

 

March 10, 2011

The Honorable Kathleen Sebelius

Secretary

Department of Health and Human Services

200 Independence Avenue, S.W.

Washington, D.C. 20201

Dear Secretary Sebelius:

As Chairman of the House Committee on Ways and Means Subcommittee on Oversight and Ranking Member of the Senate Permanent Subcommittee on Investigations, we write to express our concerns regarding the findings of Ernst & Young’s recent independent audit of the Department of Health and Human Services (HHS or Department) FY 2010 financial statements. This audit, contracted through the HHS Office of Inspector General, revealed significant and worrying shortcomings throughout your Department. We are deeply troubled by shortcomings that point to apparent mishandling of taxpayer dollars and seek to better understand what the Department is doing to correct the identified problems.

At a time of unprecedented departmental spending and additional responsibilities under the Stimulus and Democrats’ controversial health care overhaul, the audit suggests that the Department’s internal financial controls are in disarray. Despite federal laws requiring HHS to establish an integrated financial management system, the Department’s “accounting systems lack integration and do not conform to the requirements” of the Federal Financial Management Improvement Act, according to Ernst & Young. To remedy this lack of compliance, the Department has reportedly purchased a “commercial web-based off-the-shelf product,” though it is not expected to be fully integrated until as late as 2013.

The specific areas in need of improvement are too numerous to list here, but the following illustrative examples are particularly concerning:

• Nearly $2 Billion Taxpayer Dollars in Limbo: As of September 30, 2010, the audit found approximately 102,500 transactions representing “travel, grants, and contracts awaiting close-out,” totaling $1.8 billion that were open without any activity for more than two years. These represent transactions where the Department is owed or owes money but no action has taken place to close the transaction since the end of 2008. The audit also noted 1,750 grants totaling $165 million that have remained open since FY 2004.

• $794 Million in Mystery Money: Accurate budgetary monitoring is essential to the identification of cost overruns and material budgetary misstatements. As the auditors compared balances in HHS Budget Accounts to their related proprietary accounts, the audit found differences of $794 million “that could not be explained.”

• An Additional $400 Million in Mystery Money: Federal entities are required to reconcile their financial records with the Department of the Treasury (Treasury) on a monthly basis. Failing to do so can lead to inaccurate financial reports and undetected fraud. Because of a failure to comply with Treasury regulations, and a backlog of financial records dating back to 2004, HHS’s records differed with Treasury’s by an initial amount of $3 billion. Through additional work performed during the audit timeframe, this backlog was reduced to $400 million, which remains a very concerning amount.

• HHS Processes Date Back to 1980’s, Calling Into Question HHS’s Ability to Effectively Implement Current Law: A number of policies and procedures, including accounting practices, have “not been updated since the mid-1980s.” The audit noted that “the implementation of the [health care overhaul]… will have significant impacts with financial activity totaling in the billions to the Department over the next several years,” and additional financial systems training and procedure updating will be necessary to ensure correct accounting of these programs.

• Centers for Medicare & Medicaid Services (CMS) Data Vulnerable to Improper Access: Auditors identified a number of vulnerabilities that could result in inappropriate access to Medicare information and networks. At one contractor site, auditors observed unauthorized wireless access to the Medicare networks. To make matters worse, CMS did not require all Medicare contractors to review user access to sensitive Medicare data.

These are just a sample of a long list of troubling findings. The Ernst & Young audit, which was completed at the end of FY 2010, also included a number of recommendations that would move the Department into fuller compliance with its obligations. By Thursday, March 31, 2011, please provide the Department’s detailed corrective action plan and an update of any corrective actions that have taken place since the audit was issued.

In addition, in reference to the “Nearly $2 Billion Taxpayer Dollars in Limbo” described above, please provide details for any transactions that have remained open without activity for more than two years, including information detailing the parties to the transaction, the amount of the transaction, and a description of the subject of the transaction.

Finally, please detail the actions the Department will take to update CMS’ mainframe systems and software used to process Medicare and Medicaid data that the audit noted “will become more difficult to maintain and modify when integrating future changes in the Medicare program.”

We know you share our determination to better protect taxpayer dollars, ensure the efficient management of government, and prevent the unauthorized access of Medicare beneficiary information. We look forward to receiving your response and thank you in advance for your assistance as we fulfill our Constitutional oversight responsibilities. If your staff should have any questions, they should contact Chris Armstrong with the Ways and Means Subcommittee on Oversight at (202) 225-5522, or Josh Trent with the Senate Permanent Subcommittee on Investigations at (202) 224-5754.

Sincerely,

Charles Boustany, MD

Tom Coburn, MD

PDF version of the letter here.

Proposed discretionary program reductions and terminations for FY2012 HERE.

Summary of each program termination outlined in the President's budget HERE.

Dr. Coburn's bill to enact President Obama's program terminations, text HERE.

Table of contents from President Obama's budget section on "Terminations, Reductions, and Savings" for Fiscal Year 2012 budget HERE.

Read the original letter HERE.

Dear Colleague,

With our national debt poised to reach its $14.3 trillion limit within the very near future, taxpayers expect we will work together to reduce wasteful and unnecessary spending and be more vigilant about how we spend public funds. As stewards of our nation’s finances, we must ensure our good intentions today are not paid for at the expense of future generations. This means no longer spending money we do not have to pay for programs we do not need.

The House of Representatives has enacted a number of requirements to ensure any bill considered by the chamber does not grow the size or cost of the government or increase our national debt. We believe the Senate should apply these and other commonsense practices to restore fiscal responsibility and increase accountability and transparency to the legislative process.

We, therefore, are notifying you of our intention to object to the consideration of any legislation that fails to meet any of the following standards:

• All New Spending Must Be Offset with Cuts to Lower Priority Spending: Congress authorizes billions of dollars in new spending every year to create new or expand existing government programs. Yet, few bills are passed to eliminate outdated, duplicative, unnecessary, inefficient, wasteful, or low priority programs. To make government more efficient, any legislation authorizing new spending or creating a new agency, office, program, activity, or benefit or increasing the authorization of an existing function must offset the cost of this expansion by eliminating an existing program or function or reducing the authorized funding level of ongoing spending.

• Government Programs Must Be Periodically Reviewed and Renewed: Never ending government programs must end. Congress should periodically determine whether or not every government program is working as intended, is still needed, or is worthy of continued taxpayer support. To ensure this happens, any legislation establishing or continuing an agency, office, or program must also include a “sunset” date at which point Congress must decide whether or not to update or extend the life of the program.

• The Cost and Text of Bills Must Be Available Prior to Passage: Too many bills costing billions of dollars with far reaching implications are approved by the Senate with little debate, few if any amendments, and not even time to read the actual text of the legislation. To guarantee taxpayers and senators have sufficient time to read bills and information to understand their cost and impact, all legislation must be publicly available in an electronic format for at least three full days along with a cost estimate completed by the Congressional Budget Office (CBO) prior to being passed.

• Duplicative Government Programs Must Be Consolidated or Eliminated: Despite the existence of hundreds of duplicative federal programs costing billions of dollars, Congress continues to create new programs with similar missions, goals, and purposes. To reduce redundancy, any bill creating a new program that replicates a current government mission must consolidate overlapping activities or eliminate the existing programs.

• Congress Must Not Infringe Upon the Constitutional Rights of the People: Article I, Section 8 of the Constitution grants Congress a very limited set of enumerated powers. Far too often, Congress infringes upon the rights and liberties reserved for the people and the states provided elsewhere in the Constitution. These overreaches are no more than an afterthought when most bills are debated. To restore the intended balance of powers between the states and the federal government and to preserve the freedoms guaranteed by the Constitution, all bills must have a clear and obvious basis connected to one of the enumerated powers and must not infringe upon any of the rights guaranteed to the people.

By making clear these expectations now, it is our hope we can work together earlier in the legislative process to resolve any differences that could otherwise delay or stop the passage of your legislative priorities. And while we expect all of these standards to be met for each bill the Senate considers, this is not an exhaustive list of all the reasons we may individually object to a particular bill or unanimous consent request.

Sincerely,

Tom Coburn, M.D.

John McCain

Jim DeMint

Rand Paul

Kelly Ayotte

John Ensign

Michael Lee

Ron Johnson

Today CBO released a full score of repealing the Democrats’ health overhaul.  Here are some highlights.

• Repeal saves taxpayers $1.39 trillion from expenditures in Medicaid, Children’s Health Insurance Program (CHIP), and tax credits for certain small employers from 2012 to 2021. (p.4)

 

• In total, CBO and JCT estimate that repeal would reduce outlays by about $604 billion and reduce revenues by about $813 billion over the 2012-2021 period. (p.4)

 

• Repeal would mean about 33 million fewer nonelderly people would have health insurance in 2021, leaving a total of about 57 million nonelderly people uninsured. (p. 7)  Note that the 2010 Census found there are currently 50 million Americans without health insurance.

 

• CBO estimates about 2 million more Americans would have health coverage from their employer (p. 10).

 

• CBO estimates repeal would reduce state government’s spending for Medicaid and CHIP by about $60 billion over the 2012-2021 period. (p.11)

 

• CBO projects that enacting H.R. 2 would reduce the “federal budgetary commitment to health care” by $464 billion over the 2012–2021 period. (p. 18)

 

• Repeal means “premiums for health insurance in the individual market would be somewhat lower than under current law.” (p.19)

In 2009, the Internal Revenue Service (IRS) found nearly 100,000 civilian federal employees were delinquent on their federal income taxes, owing over $1 billion in unpaid federal income taxes. When considering retirees and military, more than 282,000 federal employees owed $3.3 billion in taxes.

This legislation will save taxpayers at least $1 billion by requiring the Internal Revenue Service (IRS) to collect unpaid federal income taxes from civilian federal employees.

The bill requires all federal employees to be current on their federal income taxes or be fired from their jobs. This is a common sense bill that most Americans would believe is reasonable, necessary, and likely surprised that it is not already the standard throughout the federal government.

Click here for the bill's text.

Click here for additional background information.

 

Dr. Coburn has filed five amendments to the FAA reauthorization bill (S.233) that address his primary concerns with the bill. Highlighted areas of concern include the following points:

• The Airport and Airway Trust Fund Has Been Drained,
• NextGen Development Has Been Slow,
• Wasteful Spending and Duplicative Spending Must Be Eliminated

Passing an FAA reauthorization bill is a national priority and one Congress has failed to address over the last three years. There are many good things included in the underlying bill the Senate is considering, including the creation of a new funding account for NextGen technology development, additional passenger rights protection, and numerous provisions ensuring NextGen development is prioritized and more effectively implemented by FAA.

Unfortunately, this bill also reauthorizes and increases spending for programs of questionable merit and federal policies that have helped drain the Airport and Airway Trust Fund (AATF) while increasing General Fund revenues for aviation projects and, consequently, our national debt.

While this bill increases taxes on smaller non-commercial air planes, it must also cut wasteful and duplicative spending to ensure national aviation priorities are adequately funded and our debt does not continue to increase. Unfortunately, there hasn’t been a strong emphasis by the Senate to find ways to reduce waste and duplication as well.

Amendment #91: to decrease the federal share of project costs under the airport improvement program for non-primary airports. For additional background on this amendment, click here.

Amendment #64: to rescind unused earmarks. For additional background on this amendment, click here.

Amendment #80: to limit essential air space to locations that are 100 miles or more away from the nearest medium or large hub airport. For additional background on this amendment, click here.

Amendment #81: to limit essential air service to locations that average 10 or more enplanements per day. For additional background on this amendment, click here.

Amendment #82: to repeal the small community air service development program. For additional background on this amendment, click here.

Click HERE for a list of airports that would be affected by these amendments.

In a letter sent to all four military Chiefs of Staff, Dr. Coburn expresses the serious need for the Department of Defense to be committed to improving its financial management, as well as to consider the recommendations outlined in the report offered by the National Commission on Fiscal Responsibility and Reform, and to develop auditable financial statements.

Read the letter sent to the Military's Joint Chiefs of Staff: here

On January 6th, the Congressional Budget Office (CBO) released a preliminary analysis of H.R. 2—a bill to repeal the Patient Protection and Affordable Care Act (1). Democrats are using that analysis to say that repealing the law will increase the deficit by $230 billion dollars. But a closer look shows the the federal health care law could add nearly $700 billion to the deficit in the first ten years alone.

Response

• Only in Washington would people believe that deciding NOT to spend $2.6 trillion dollars over a decade, and NOT massively expand the federal government can be spun as being somehow fiscally irresponsible.

 

• The problem is not the Congressional Budget Office. CBO is full of dedicated, nonpartisan budget professionals.

 

• The problem is that Democrats used budget gimmicks to manipulate the CBO score of the health care law. Those gimmicks make the law appear one way, but the truth is the federal health care law could add nearly $700 billion to the deficit in the first ten years alone.

Look At What CBO Really Said About Repeal

• In their cost analysis of repealing the law, CBO acknowledged they had to accept budget gimmicks and score the bill as it was written.
  • “As with all of CBO’s cost estimates, [our] estimates reflect an assumption that the provisions of current law would otherwise remain unchanged throughout the projection period and that the legislation being considered would be enacted and implemented in its current form. CBO’s responsibility to the Congress is to estimate the effects of proposals as written and not to forecast future legislation.” (2)

 

• CBO admitted the bill’s actual costs of the health overhaul could be much higher.
  • “Projections of the bill’s budgetary impact are quite uncertain…..CBO believes that its estimates of the net budgetary effects of health care legislation have a roughly equal chance of turning out to be too high or too low.”

 

• In fact, CBO acknowledged that some key provisions “might be difficult to sustain over a long period of time” at which point, the “budgetary effects of repealing [the health care law] could be quite different” – in other words, it could cost a lot more.
  • “The budgetary impact of repealing [the health care law] could be quite different if key provisions of that original legislation would have subsequently been changed or not fully implemented….. Current law now includes a number of policies that might be difficult to sustain over a long period of time….If those provisions would have subsequently been modified or implemented incompletely, then the budgetary effects of repealing PPACA and the relevant provisions of the Reconciliation Act could be quite different—but CBO cannot forecast future changes in law or assume such changes in its estimates.”

CBO Did Say Repealing the Law Would Decrease Costs for Families and Taxpayers

• Repeal Reduces Health Insurance Costs for Americans. CBO: "In particular, if H.R. 2 was enacted, premiums for health insurance in the individual market would be somewhat lower than under current law…”

 

• Repeal Reduces Federal Spending on Health Care. “Last March, CBO estimated that enacting PPACA and the relevant provisions of the Reconciliation Act would increase the ‘federal budgetary commitment to health care’ by about $400 billion over the 2010–2019 period; CBO uses that term to describe the sum of net federal outlays for health programs and tax preferences for health care.7 In contrast, CBO estimated that enacting that legislation would reduce the federal budgetary commitment to health care during the decade after 2019.”

Democrats Used At Least Seven Budget Gimmicks to Game the CBO Scoring Process (3):

1. Counting a full ten years of tax increases to pay for only six years of new health care spending. This means imaginary savings from CBO, but deficits in the real world.

2. Double-counting $398 billion in Medicare cuts. Democrats count it both as money to extend the life of Medicare and as money to pay for a new health care entitlement. So that is $2 spent for every $1 “saved.”

3. Concealing the cost of the so-called doc fix, which prevents cuts in Medicare payments to physicians—totaling $208 billion over ten years. This cheats the doctors or it cheats the taxpayers.

4. Spending $29 billion in Social Security payroll taxes, even though those dollars should be used for Social Security benefits. This is a fiscal shell game.

5. Ignoring $115 billion in costs to implement the bill, including new personnel. CBO doesn’t count the cost of new bureaucrats to implement the law, but you’ll still be picking up the tab.

6. Counting $19 billion in savings from unrelated student loan reforms as health care savings. One more way to mask the massive law’s true cost.

7. Counting $70 billion of premiums from a new long-term care program that the even the Democratic Chairman of the Budget Committee called a “ponzi scheme.” According to the CBO, this program could “add to budget deficits …. in succeeding decades – by amounts on the order of tens of billions of dollars for each 10-year period.”(4)

Download PDF version here

Sources:

1. Legislative Information System, H.R. 2, 112th Congress, http://www.congress.gov/cgi-lis/bdquery/D?d112,d111:1:./temp/~bdeHF1:dbs=y:|/billsumm/billsumm.php|

2. This and all quotes from CBO taken from the January 6th letter to Speaker Boehner, http://www.cbo.gov/ftpdocs/120xx/doc12040/01-06-PPACA_Repeal.pdf

3. First six gimmicks taken from Senate GOP Budget staff document, http://budget.senate.gov/republican/pressarchive/2011-01-19Obamacare&Deficit.pdf.

Summary of CLASS program, page 18 here, http://coburn.senate.gov/public//index.cfm?a=Files.Serve&File_id=0d0b33ae-292e-42ba-ba94-43ff234961a2

4. Congressional Budget Office, “Letter to The Honorable Tom Harkin, Chairman of the U.S. Senate Committee on Health, Education, Labor, and Pensions,” November 25, 2009. http://www.cbo.gov/ftpdocs/108xx/doc10823/CLASS_Additional_Information_Harkin_Letter.pdf

Today the Congressional Budget Office (CBO) released its preliminary analysis of H.R. 2—a bill to repeal health care law—that will is expected to pass the House when it receives a vote on January 12th.

While some news headlines focus on the projected deficit increase from repealing PPACA and HCERA in this particular analysis, CBO did not account for the budgetary impact of the CLASS Act, untenable Medicare cuts, or other provisions widely critiqued by nonpartisan experts as unsustainable. CBO has commented about some such provisions here. Dr. Coburn has produced an analysis of the CLASS Act on page 18 here.

Beyond the headlines, it’s important to look at what CBO actually said…..

• Repeal Reduces Health Insurance Costs for Americans. "In particular, if H.R. 2 was enacted, premiums for health insurance in the individual market would be somewhat lower than under current law…”

• Repeal Reduces Federal Spending on Health Care. “Last March, CBO estimated that enacting PPACA and the relevant provisions of the Reconciliation Act would increase the “federal budgetary commitment to health care” by about $400 billion over the 2010–2019 period; CBO uses that term to describe the sum of net federal outlays for health programs and tax preferences for health care.7 In contrast, CBO estimated that enacting that legislation would reduce the federal budgetary commitment to health care during the decade after 2019.”

• CBO Reviewed the Repeal Bill, But a Detailed Analysis is Still Forthcoming. “The Congressional Budget Office (CBO) has reviewed H.R. 2, the Repealing the Job-Killing Health Care Law Act, as introduced on January 5, 2011. That bill would repeal the Patient Protection and Affordable Care Act (PPACA, Public Law 111-148) and the provisions of the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) that are related to health care….. CBO has not yet developed a detailed estimate of the budgetary impact of repealing that legislation, although it is working with the staff of the Joint Committee on Taxation (JCT) to complete such an estimate in the near future. Because Congressional deliberations on H.R. 2 could begin very soon, CBO is providing in this letter a less-detailed preliminary analysis of that legislation.”

• The Promised Deficit Reduction From the Overhaul Has Changed Slightly. “The projected increase in deficits will not be exactly the same as the reduction in deficits that was originally estimated to result from the enacted legislation….[because] the economic outlook is now somewhat different…. Some of the funding provided by the legislation enacted last March has been obligated or spent… Subsequent legislation has already modified the laws enacted last March.”

• Now Repeal “Costs” $145 Billion. “CBO expects that enacting H.R. 2 would probably increase federal budget deficits over the 2012–2019 period by a total of roughly $145 billion..”

• But CBO Was Forced To Score the Initial Bill –Full of Smoke and Mirrors – as it Was Written. “As with all of CBO’s cost estimates, those estimates reflect an assumption that the provisions of current law would otherwise remain unchanged throughout the projection period and that the legislation being considered would be enacted and implemented in its current form. CBO’s responsibility to the Congress is to estimate the effects of proposals as written and not to forecast future legislation.”

• CBO Admits Actual Costs of the Overhaul Could Be Much Higher. “Projections of the bill’s budgetary impact are quite uncertain…..However, CBO’s staff, in consultation with outside experts, has devoted a great deal of care and effort to the analysis of health care legislation in the past few years, and the agency strives to develop estimates that are in the middle of the distribution of possible outcomes. As a result, CBO believes that its estimates of the net budgetary effects of health care legislation have a roughly equal chance of turning out to be too high or too low.”

• So, if the Current Law Were Changed Significantly (As Many Experts Anticipate), Repealing the Overhaul Could Reduce the Deficit.

“The budgetary impact of repealing PPACA and the provisions of the Reconciliation Act related to health care could be quite different if key provisions of that original legislation would have subsequently been changed or not fully implemented….. Current law now includes a number of policies that might be difficult to sustain over a long period of time. For example, PPACA and the Reconciliation Act reduced payments to many Medicare providers relative to what the government would have paid under prior law. On the basis of those cuts in payment rates and the existing “sustainable growth rate” mechanism that governs Medicare’s payments to physicians, CBO projects that Medicare spending (per beneficiary, adjusted for overall inflation) will increase significantly more slowly during the next two decades than it has increased during the past two decades. If those provisions would have subsequently been modified or implemented incompletely, then the budgetary effects of repealing PPACA and the relevant provisions of the Reconciliation Act could be quite different—but CBO cannot forecast future changes in law or assume such changes in its estimates.”

Click here for a detailed outline of Dr. Coburn's position on the The James Zadroga 9/11 Health and Compensation Act of 2010.

Amendment #4764 and #4765 would pay for the costs of extending unemployment insurance payments by reducing unnecessary and duplicative spending.

Click here for amendment #4764 text.

Click here for amendment #4765 text. Click here for additional background.

Overview of amendment #4765 —To offset some of the costs of the bill by cutting wasteful spending, eliminating unnecessary programs, and consolidating duplicative programs.

Every member of the Senate claims they want some portion of this bill to be paid for. This amendment would provide an opportunity to do so.

According to the Congressional Budget Office (CBO), the total increase to the deficit resulting from both the revenue and spending provisions contained within the tax/unemployment insurance (UI) extension bill will be $857.8 billion. Specifically, the bill will increase spending by $136.4 billion.

The bill is written to exempt itself from PAYGO rules which require legislation increasing spending or reducing revenues to be offsets to prevent deficit spending.

This amendment provides $46 billion in savings this year and $156 billion over five years, thereby allowing the Senate to pay for a portion of the bill’s total cost.

The national debt now exceeds $13.8 trillion and the U.S. is expected to reach its debt limit of $14.3 trillion within the next couple months. Congress will then be faced with approving more borrowing or imposing dramatic spending cuts or tax increases. To prevent or reduce the severity of these options, Congress needs to at the very least stop adding to the deficit now.

The U.S. government has run a deficit for 26 straight months. The fiscal year 2010 deficit was nearly $1.3 trillion and the 2009 deficit was $1.4 trillion, the two largest budget shortfalls in history. The deficit for this fiscal year, which just began on October 1, is already more than $290.8 billion and is likely to set a new record high. Unless Congress takes action, $1 trillion annual deficits are projected every year for the foreseeable future, which is clearly an unsustainable amount of borrowing.

Senators cannot say they are concerned about the cost of new spending or the loss of revenues resulting from not increasing taxes while at the same time refusing to provide any suggestions for offsets or rejecting those others are offering.

This amendment provides tens of billions of dollars of savings by eliminating wasteful spending, consolidating duplicative programs, and requiring greater efficiency by all federal agencies. It includes ideas proposed by both Republicans and Democrats. It includes suggestions from President Obama’s bipartisan deficit reduction as well as ideas to terminate programs proposed by both Presidents George W. Bush and Barack Obama.

Among the savings proposed by this amendment:

• A congressional pay freeze and a 15 percent reduction in Congress’ budget;

• A freeze on how much can be spent on the salaries for federal employees and a reduction in the number of government bureaucrats;

• Limiting the amount that the government can spend on printing, travel, and new vehicles;

• Selling unneeded and excess federal property;

• Stopping unemployment benefit payments to jobless millionaires;

• Collecting unpaid taxes owed by federal employees and members of Congress;

• Consolidating duplicative government programs;

• Preventing fraud within federal health care programs;

• Streamlining Defense spending and reducing foreign aid, including voluntary contributions to the United Nations.

This bill is not paid for and the Majority Leader is blocking amendments to pay for the bill’s costs. A vote to suspend the rules to allow consideration of this amendment would allow the Senate to debate the merits of paying for the spending in the underlying bill rather than simply adding billions of dollars to the national debt.

Dr. Coburn has filed the following substitute amendment to S.510, FDA Food Safety Modernization Act:

The Ensuring Greater Food Safety Act of 2010 would modernize Federal food safety efforts without placing unnecessary burdens on food producers, increasing food prices, or saddling taxpayers with additional debt.

Click here for the text of Dr. Coburn's amendment; the Ensuring Greater Food Safety Act of 2010.

Click here for a section-by-section outline of the Ensuring Greater Food Safety Act.

Click here for a two page summary of the Ensuring Greater Food Safety Act.

An amendment to establish an earmark moratorium for fiscal years 2011, 2012, and 2013.

Click here for the text of the amendment.

Click here for additional background.

U.S. Senators and physicians Tom Coburn and John Barrasso released a new oversight report on the federal health law, detailing how many of the economic and financial consequences of the new law are worse than anticipated.

Click HERE to see what others are saying about Grim Diagnosis…

Outgoing Democratic Governor of Tennessee, Phil Bredesen, provides many paralleled critiques of the new health care law in his new book, Fresh Medicine.

Summary of Governor Bredesen’s “Fresh Medicine” below:

DEMOCRATIC GOVERNOR SAYS HEALTH CARE LAW MADE PROBLEMS “WORSE”

Governor Phil Bredesen (D-TN) Offers Scathing Critique of Health Care Law

“Congress and the Obama Administration have just added over thirty million people

into an obsolete and broken system and done little to address the underlying problems;

in multiple ways, they’ve made them worse.” (introduction)

Deficits Will Soar Higher

• “We talk about ‘not increasing the deficit,’ which is Washington speak. The structural deficit is expanding and will continue to expand at a dangerous rate.” (p. 27)

• “The passage of the Affordable Care Act was made politically acceptable by setting up a straw man: would it reduce the deficit or not? When CBO announced that the legislation would indeed reduce it, the political path to passage was cleared. But if we make even the most obvious and sensible real-world adjustments to their analysis, the answer is different. Take out the CLASS Act funds—no insurance company in America would be allowed to do what the CBO rules permitted. Add an estimate of the real cost of appropriations that were made for one year but clearly intended to be continued, and include an estimate of the new administrative costs in HHS and the IRS. In May, well after Affordable Care Act’s passage, the CBO added an additional $115 billion to the cost of the legislation to reflect these. Add an estimate for the appropriations for which there were no numbers, only ‘sum sufficient’ language. These are not esoteric adjustments, just commonsense ones. But when they’re made, the legislation no longer ‘reduces the deficit,’ it adds to it. If you don’t believe the Medicare rate reductions will actually happen, it adds even more.” (p. 38)

Costs Will Continue Increasing

• “This year’s reform presented a fine opportunity to make some progress in containing the costs of our health care and we passed it up… Its attention to controlling costs is limited, in the future, and has an air of wishful thinking about it.” (p. 26)

• “We failed to use the opportunity to address the cost issue substantively. Worse yet, we also did some things likely to make our health care obligations even more expensive in the years ahead.” (p. 30)

• “Let me make a prediction here: subsidized, Individual Exchange-based health insurance is an open-ended entitlement that will ultimately, and perhaps quite quickly, create extremely large and unbudgeted costs for our federal government.” (p. 32-33)

• “Even associates of mine who strongly support the Affordable Care Act acknowledge privately that its main purpose has been expanding coverage. Their argument is that we need to do the expansions now and we’ll revisit costs once the new coverage is in place. But this is a terrible strategy.” (p. 35)

• “[W]hen you’re in a boat that is taking on water fast and may sink, you don’t try to ‘bend the curve’ of how much water is coming in; you try to plug the hole and start bailing. The cost control provisions of the Affordable Care Act don’t plug the hole we already have, punch a few new ones for good measure, and bail with a paper cup.” (p. 35)

Reform Makes Current Health Care Problems Worse

• “What a stunning disappointment. The health care “reform” we finally wrote into law isn’t transformational. It provides health insurance for a great many more people, but doesn’t directly attack any of the deep structural problems of health care.” (p.12)

• “Even seen through [a] practical filter, what we finally accomplished is still a deep disappointment.” (p.12)

• “It’s as if we had inherited a proud old house that had deteriorated over the years. Now it’s in disrepair- sagging floors, rusty pipes, and costing a fortune to maintain. Bur rather than rolling up our sleeves….we choose to tack a cobbled-together addition on the back, slap a coat of paint on everything, and pronounce it fixed.” (p. 12)

• “[T]he president left the design of his reform to the most partisan body in America. Democrats were firmly in the majority and wrote the legislation, and the dream of beginning a new post-partisan era came down to the chairman of the Senate Finance Committee trying to find a few tweaks that might dress up the final vote with a Republican senator or two.” (p. 39-40)

Employers Will Drop Coverage

• “[The discrepancy between a fine of a few thousand dollars and the much higher cost of contributions to employees’ health policies] isn’t going to be a small effect. Employers with tens of millions of employees in their organizations are going to take a hard look at this. It represents a genuine design flaw in the Exchange system—setting up the economic incentives to favor exactly what you don’t want: employers dumping into the federal system. Perhaps it’s an oversight by the designers who aren’t really attached to the world where nickels and dimes count. Or it may be just what they’re counting on, as a back-door approach to a government-run system.” (p. 32)

• “[S]ubsidized Exchange health insurance is structured to be so much more attractive than other alternatives that I believe it’s likely to grow, and with it the federal entitlement subsidies, far beyond the scope that was originally anticipated. What will make it grow is a third group that can potentially enter—those who now have group insurance. There are a lot of businesses—small, medium, and large—in America that, when they do the numbers, are going to discover that dropping the health insurance coverage they now offer and moving their employees into the Individual Exchange program is better for them….” (pp. 30-31)

• “For a great many employers, when they compare the total costs of dropping coverage with those of keeping it, dropping it will make good financial sense. Even today, there’s already significant erosion of group health insurance as firms face economic pressure. Once there’s a clear path that doesn’t hurt their employees; dropping coverage will be a very attractive option.” (p. 31)

• “I’m confident that many employers are looking hard at these options now, and by 2014 there will be a mini-industry of consultants to show them how to do it and what they can save.” (p. 31)

• “If someone were starting a company in 2014, it would be a perfectly sensible business decision for them to decide right at the start to permanently stay out of the business of offering health insurance.” (p. 32)

• “As these small businesses grow, some will reach a size where fines would start to apply, but a fine of two or three thousand dollars will look very attractive as an alternative to a contribution of $15,000 or more for an employer-sponsored family policy.” (p. 32)

Taxpayers Could Face Bailout of CLASS Program

• “[T]he CLASS Act (that’s the Community Living Assistance Services and Supports program)… creates an entirely new entitlement apart from the coverage expansion for the uninsured… But its terms quite obviously open it to strong adverse selection—signing up a disproportionate number of sick people. The ink was hardly dry on the Affordable Care Act before the CMS actuary stated that the CLASS Act would be out of money by about 2025. At that point, we will have been taking our citizens’ good faith premium for ten years. We’re not going to fail to honor our obligations and we can expect to be subsidizing this entitlement in growing amounts in the years ahead.” (p. 34)

• “But [CBO] work[s] within the framework of a set of rules that sometimes conceal the underlying realities. In their ‘scoring’ of the Affordable Care Act, for example, one of the significant ways of paying for expanding health insurance coverage was the use of premiums from the new CLASS Act entitlement that was established. The legislation begins collecting premiums for this insurance in 2015, but doesn’t begin paying out benefits until 2020 (conveniently, here in 2010, just outside of the CBO ten-year time horizon). The CBO ‘scoring’ of the legislation takes those first five years of premiums and diverts them to paying for its expansion of coverage. This diversion represents $70 billion of the offsets to the cost of the legislation. It assumes that when it becomes necessary to begin paying benefits in 2020, there will be other premiums from other Americans to cover the cost. When an insurance company in Tennessee …occasionally does this—collects insurance premiums and diverts them elsewhere, planning to pay claims later with other premiums—we shut them down.” (p. 37)

State Costs Increase, In “Worse” Financial Shape

• “States are being put in a box. Most are prohibited from borrowing money to balance budgets and Medicaid increasingly shoulders aside investments in other areas such as education and infrastructure. In Tennessee, Medicaid didn’t exist in 1965, and in 1981 its budget was about half of what we spent on K-12 education, it surpassed spending on K-12 in 1992, and by 2004 it was 2.25 times our K-12 budget. With the Affordable Care Act, it will get worse.” (p. 26)

Consolidation Will Increase Costs

• “As the dominance of a few large insurers in a market diminishes, more economic power accrues to providers, and especially large providers. Their ability to dictate rates and terms grows. Forcing competition and fragmentation among those paying for care while simultaneously encouraging cooperation and consolidation among providers will cause medical costs to go up, not down. Moreover, new constraints placed on the insurance industry in the name of reform hinder the insurers’ ability and incentive to innovate.” (p. 33)

• “The Affordable Care Act pushes the consolidation of hospitals and provider groups while disarming the purchasers. As this market power disparity between purchasers and providers grows, we can expect medical costs in many markets to go up at rates in excess of even the already high rate of health care inflation. This won’t be due to health care’s usual suspects of technology or overutilization, but just because of good old-fashioned monopoly market power.” (p. 34)

Government Will Grow

• “Government loves complexity, rules, and red tape, but we may have outdone ourselves this time. Reform offered a chance to clean up the baroque system we have created over the years, reduce bureaucracy, lower administrative cost, and give clarity and focus to a major part of where we spend our taxpayer’s money. Instead, we created yet more complexity, more regulations, and the need for more bureaucracy.” (p. 35)

(Washington, DC) -- A new analysis by the nonpartisan Congressional Research Service (CRS)[1] found that the Secretary of the U.S. Department of Health and Human Services (HHS) failed to meet one-third of the deadlines mandated by the new federal health care law, the Patient Protection and Affordable Care Act. The memo, requested by Republican Senators Coburn, Hatch, and Cornyn, revealed that HHS failed to fulfill its requirements in seven of 22 deadlines before September 23, 2010, which was the six-month mark of the law being enacted.

In addition to the seven missed deadlines, the CRS memo also noted four deadlines which for which there was insufficient public information available to draw a conclusion. Republican health staff pointed out that HHS may have failed to meet these four deadlines as well.

During the height of the health care debate in Congress last year, Senators Coburn, Hatch, and Cornyn warned the American people about the pitfalls of health care legislation that would empower the Secretary of HHS with unprecedented new authorities. Senate staffers totaled more than 1,700 places in the law where the Secretary is given new abilities to write rules, establish programs, and mandate requirements. Now, nonpartisan analysis shows that HHS has failed to even meet 22 mandatory deadlines required by law during the first six months of the law being enacted.

Future months are unlikely to see HHS improve its record of compliance. The Department failed to meet one-third of 22 deadlines in six months, yet now the Department has less than three months to meet another 29 requirements required by law.

The CRS analysis did not include deadlines imposed upon individuals or organizations other than the Secretary of HHS, nor did it include any provisions that did not require the Secretary to take a specific action by a specific date. CRS’ analysis was “based on information from official publicly available sources such as the Federal Register and agency websites.” The analysis was finalized on the six-month mark – September 23, 2010– so only actions taken the Secretary of HHS by that date were analyzed.

Click here for a table of missed deadlines.

Click here for the CRS analysis on HHS failure to meet deadlines.

As the Senate rushes to adjourn, Senator Tom Coburn will seek this afternoon to pass a number of bills that have been blocked by the Majority that would address many of the real concerns of the nation. These include a balanced budget requirement, an extension of tax cuts and requirements for federal employees—including members of Congress—to pay their taxes. Senator Coburn will ask the Senate to pass these bills by unanimous consent (UC) this afternoon around 4:45 p.m. If no Senator objects at that time, the bills will be approved by the Senate.

Click here for more information about the competing priorities of the Senate.

Click here to read Senator Coburn's letter to Senator McConnell, reserving the right to object to proceeding to unanimous consent on the bills offered by Majority Leader Reid.   

Althought these bills are well-intentioned, they are clearly not immediate priorities and spend money that we do not have. On the Senate floor this morning Dr. Coburn responded to Majority Leader Reid’s proposed legislation including a bill to protect shark fins, marine mammals rescue assistance legislation, and the Great Cats and Rare Canids Act, by stating his position. “The problems that are facing this country are so big and so massive that our attention ought to be focused on those large problems, not on five separate bills that have been proffered for special interest groups.”

Below is a list of some of the bills Senator Coburn may seek to pass by UC:

1) Balanced Budget Amendment to the Constitution of the United States (S. J. Res. 38): A joint resolution proposing a balanced budget amendment to the Constitution of the United States.

2) Tax Hike Prevention Act of 2010 (S. 3773): A bill to permanently extend the 2001 and 2003 tax relief provisions and to provide permanent AMT relief and estate tax relief, and for other purposes.

3) Tax cheats bill for members of Congress: A bill to require Members of Congress to disclose delinquent tax liability, require an ethics inquiry, and garnish the wages of a Member with Federal tax liability.

4) Tax cheats bill for federal employees (S. 3790): A bill to amend title 5, United States Code, to provide that persons having seriously delinquent tax debts shall be ineligible for Federal employment

5) The Earmark Transparency Act (S. 3335): a bill that meets President Obama’s call for Congress to create a single, searchable database of all congressional earmark requests. Click here for additional background on S.3335.

6) Stop Secret Spending (S.RES.622): bill would prohibit legislation from passing through the “hotline” process until members have been given 72 hours to review the bill and its costs. Billions of dollars of secret spending are authorized every year using the “hotline” process. If a Senator is going to faithfully execute his or her duties, enough time must be available to review the legislation as well as a score of the bill’s costs.

7) Excluding Abortion Coverage from Health Reform Act (S. 3723): Amends the Patient Protection and Affordable Care Act to prohibit federal funds from being to be used to cover any part of the costs of any health plan that includes coverage of abortion services.

8) The Firearms Fairness and Affordability Act (S. 632): Amends the Internal Revenue Code to require excise taxes on recreational equipment to be due and payable on the date for filing the return for such taxes.

9) Veterans 2nd Amendment Protection Act (S. 669): Prohibits, in any case arising out of the administration of laws and benefits by the Secretary of Veterans Affairs (VA), considering any person who is mentally incapacitated, deemed mentally incompetent, or experiencing an extended loss of consciousness from being considered adjudicated as a mental defective for purposes of the right to receive or transport firearms without the order or finding of a judge, magistrate, or other judicial authority of competent jurisdiction that such person is a danger to himself or herself or others.

Today, Dr. Coburn introduced the Long-Term Care Bailout Prevention Act (S. 3829) with Sens. Graham, Chambliss, McCain and Cornyn. This bill would strike the CLASS Act (long-term care) provision from the recently passed federal health care overhaul (Patient Protection and Affordable Care Act, Public Law Number 111-148). Dr. Coburn’s support for repealing the damaging CLASS provision is part of his fundamental support for repealing the health care overhaul in its entirety. (Although the bill as it stands now does not include funding that is offset, Dr. Coburn is committed to working with the sponsors of S.3829 to ensure the bill is paid for in its entirety.)

While Dr. Coburn supports improvements to long-term care, the CLASS Act provisions must be repealed in their entirety. While the CLASS program is projected to create an initial surplus that is used to pay for the programs created by the Patient Protection and Affordable Care Act, the Chief Actuary of the Centers for Medicare & Medicaid Services (CMS) has stated that by 2025, benefit payments will exceed premium revenues and the CLASS program will run deficits. The CMS Chief Actuary has said, ‘‘In general, voluntary, unsubsidized, and non-underwritten insurance programs such as CLASS face a significant risk of failure as a result of adverse selection by participants.’’ According to an August 2010 survey by the National Business Group on Health, only 3 percent 10 of employers would participate in the CLASS program. Because of the downward spiral created by adverse selection, the program could go bankrupt and the Secretary of Health and Human Services could be forced to drastically increase premiums to unaffordable levels or taxpayers could be asked to bailout the CLASS program. A Democratic Senator even referred to the CLASS’s financing structure as a “Ponzi scheme.”

Click here for the bill text of the Long-Term Care Bailout Prevention Act (S.3829).

Click here for PDF version

 

JULY 2009 – KENNEDY-DODD HELP COMMITTEE BILL

The Affordable Health Choices Act was voted out of Committee on July 15^th and introduced in the Senate on September 17^th, 2009 as S. 1679.

Below are quoted excerpts of the bill text and the Congressional Research Service’s analysis of the individual mandate and reporting of health insurance coverage. While there was clear consideration given to reporting of compliance with the mandate, there was no explicit mention in the bill of civil or criminal penalties associated with non-compliance. The excerpts have been abbreviated to consolidate the most relevant content. 

• “[The bill] includes a mandate for most individuals to have health insurance, with penalties for noncompliance.
• Most individuals who do not maintain qualifying coverage for themselves and their dependents could be required to pay an annual amount established by the Secretary of Labor of no more than $750 per person (with a limit of no more than four times the penalty in total for the taxpayer and any dependents), adjusted for inflation beginning with taxable years after 2011.
• Individuals would be required to maintain qualifying coverage, defined as coverage under a group health plan or health insurance coverage that an individual is enrolled in on the date of enactment or coverage that meets or exceeds the criteria for minimum qualifying coverage, Parts A and B of Medicare, Medicare Advantage, Medicaid, CHIP, Tricare, certain veteran's health care program coverage, Federal Employees Health Benefits Program (FEHBP), state health benefits high-risk pools….
• The individual mandate requirements would be effective beginning in tax years after December 31, 2011.
• Every person who provides health insurance that is qualifying coverage would be required to make a return, in such form as prescribed by the Secretary that
  • (1) contained the name, address, and taxpayer identification number of each individual who is covered under the health insurance that is qualifying coverage provided by such person
  • (2) the number of months during the calendar year during which each such individual was covered under the qualifying health insurance plan
  • (3) other information as prescribed by the Secretary.  
• Every person required to make a return described above, would also be required to provide, in writing, to each individual whose name was required on that return, the following information 
  • (1)  the name, address and phone number of the person required to make such return
  • (2) the number of months during the calendar year that such individual was covered under qualifying health insurance provided by such person. 
• No later than June 30 of each year, the Secretary of the Treasury, acting through the Internal Revenue Service, in consultation with the Secretary of HHS, would send a notification to each individual who files an individual income tax return and who was not enrolled in qualifying coverage with information on the services available through the Gateway operating the State in which the individual resides.”

SEPTEMBER-OCTOBER 2009 – BAUCUS SENATE FINANCE COMMITTEE BILL

The Baucus Senate Finance bill was voted out of Committee in the fall of 2009 and introduced in the Senate on October 19, 2009 as S. 1796, America’s Healthy Future Act. 

The consideration of the provisions in this bill related to the individual mandate and penalty generated significant media attention and contributed directly to the modification of these provisions.   On September 24, 2009, Sen. John Ensign (R-Nev.) received a handwritten note from Joint Committee on Taxation Chief of Staff Tom Barthold confirming the penalty for failing to pay the up to $1,900 fee for not buying health insurance. Violators could be charged with a misdemeanor and could face up to a year in jail or a $25,000 penalty, Barthold wrote on JCT letterhead. The note was a follow-up to Ensign's questioning at the markup. Largely as a result of this exchange and the media attention it generated, the penalty was changed.

Below are quoted excerpts of the Committee’s report of the finalized Baucus Senate Finance Committee Bill (as introduced in the Senate) regarding the individual mandate, reporting of health insurance coverage, and penalties for noncompliance. The excerpts have been abbreviated to consolidate the most relevant content. 

• “Beginning July 1, 2013, all U.S. citizens and legal residents are required to maintain health insurance coverage….
• In order to ensure compliance, individuals are required to report on their Federal income tax return the months for which they maintain the required minimum health coverage for themselves and all dependents under age 18.
• In addition, insurers (including employers who self-insure), must report information on health insurance coverage to both the covered individual and to the IRS.
• Insurers will be required to identify the primary insured individual and any other individuals covered by the policy, as well as the dates during which the individual maintained coverage during the tax year.
• A similar reporting requirement applies to employers with respect to individuals enrolled in public health insurance plans or group health plans if the reporting is not provided by the insurer (e.g. in the case of self-insured plans).
• Individuals who fail to maintain essential health benefits coverage are subject to a penalty of $750 per adult in the household, with a maximum of two adults per household. This per adult penalty is phased in as follows: $0 for 2013; $200 for 2014; $400 for 2015; $600 in 2016, $750 in 2017 and indexed to CPI-U beginning in 2018 and thereafter.
• The penalty applies to any period during which the individual is not covered by a health insurance plan with the minimum required benefit but is prorated for partial years of noncompliance. No penalty is assessed for individuals not maintaining health insurance for a period less than or equal to three months in the tax year. However, penalties are assessed for those not insured for more than three months during the tax year.
• The penalty is assessed through the Code and accounted for as an additional amount of Federal tax owed. However, it is not subject to the enforcement provisions of subtitle F of the tax code. Instead, in cases in which payment is not forthcoming following the initial notice and demand for payment, collection is limited to withholding of Federal payments otherwise due to the uninsured individual. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty.
• Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner.”

 

DECEMBER 2009 TO MARCH 2010 – REID SENATE BILL

Below are quoted excerpts of the Congressional Research Service’s analysis of the individual mandate and reporting of health insurance coverage in H.R. 3590, the Patient Protection and Affordable Care Act, as amended and passed by the Senate on December 24, 2009. H.R. 3590 reflects the merged Senate health reform bills, S. 1679, the Affordable Health Choices Act (as ordered reported by the Senate Committee on Health, Education, Labor and Pensions on July 15, 2009), and S. 1796, America's Healthy Future Act of 2009 (as ordered reported by the Senate Committee on Finance on October 19, 2009). The excerpts have been abbreviated to consolidate the most relevant content. 

• “Beginning in 2014, [the bill] would include a mandate for most individuals to have health insurance, or to pay a penalty for noncompliance.³¹
• Individuals would be required to maintain minimum essential coverage for themselves and their dependents. Those who did not would be required to pay a penalty for each month of noncompliance.
• The penalty would be calculated as the greater of either (1) a percentage of household income or (2) a flat dollar amount. The penalty amount based on household income would be 0.5% in 2014, 1.0% in 2015, and 2% thereafter. The annual flat dollar amount would be phased-in—$95 in 2014, $495 in 2015, $750 in 2016 (adjusted for inflation thereafter), assessed for each taxpayer and any dependents. The flat dollar amount would be reduced by one-half for dependents under the age of 18. Furthermore, regardless of family size, a family's penalty would be capped at three times (300%) the flat dollar amount. Finally, the penalty for noncompliance could not exceed the national average premium for bronze level qualified health plans offered through an exchanges (for the relevant family size).
• No penalty would be imposed on those without coverage for less than 90 days (with only one period of 90 days allowed in a year)…..
• Taxpayers who were required to pay a penalty, but failed to do so, would not be subject to any criminal prosecution or penalty for such failure. The Secretary could not file notice of lien or levy on any property, for a taxpayer who does not pay the penalty.

 

MARCH 2010 – DEMOCRATS’ RECONCILIATION BILL

On March 23, 2010, the President signed into law H.R. 3590, the Patient Protection and Affordable Care Act (PPACA) as passed by the Senate on December 24, 2009, and the House on March 21, 2010. The new law, among other changes, makes statutory changes affecting the regulation of and payment for certain types of private health insurance.

On March 21, 2010, the House passed an amendment in the nature of a substitute to H.R. 4872, the Health Care and Education Reconciliation Act of 2010 (hereafter referred to as the reconciliation bill). The Senate passed the reconciliation bill and the President signed it into law.

Below are quoted excerpts of the Congressional Research Service’s analysis of the reconciliation bill. The excerpts have been abbreviated to consolidate the most relevant content.

• Under H.R. 3590, “A person who is not in compliance with the individual mandate may be subject to a financial penalty based on either a percentage of household income or a flat dollar amount, whichever is greater. The penalty amount based on household income would be the product of household income multiplied by 0.5% in 2014, 1.0% in 2015, and 2% for each year thereafter. The annual flat dollar amount would be phased in—$95 in 2014, $495 in 2015, $750 in 2016 (adjusted for inflation thereafter), assessed for each taxpayer and any dependents. Other penalty rules would apply in the case of any dependents under the age of 18, and a family’s penalty would be capped as specified in the bill. No penalty would be imposed on certain individuals if they meet specified criteria. One such individual would be a person whose household income does not exceed the federal poverty level (FPL).
• The reconciliation bill would make certain changes to the calculation of the penalties imposed on persons who are not in compliance with the individual mandate, and would modify a rule regarding the exemption from the individual mandate.
• For the non-compliance penalty based on percentage of income, the reconciliation bill would change the base income amount and percentages depending on the year. The base income amount would be the amount of household income that exceeds the personal exemption amount for the applicable tax year. The applicable percentages would be 1% in 2014, 2% in 2015, and 2.5% for each year thereafter.
• For the non-compliance penalty based on a flat dollar amount, the reconciliation bill changes the penalty amounts for 2015 and 2016: $325 and $695, respectively. This penalty would be adjusted for inflation (based on the 2016 amount) thereafter.
• The reconciliation bill would strike the exception to the non-compliance penalty for persons with income below the poverty line included in H.R. 3590. Instead, the reconciliation bill would except from the non-compliance penalty individuals whose household income is less than the personal exemption amount for the applicable tax year.”
• Now, under law, the final tax penalties for non-compliance with the individual mandate will be $695 or 2.5% of adjusted gross income.

On August 3rd, Senators Coburn, Barrasso, Burr, McCain, and Thune wrote to Secretary Sebelius expressing their concern over the Andy Griffith Medicare ad that cost taxpayers $700,000. The Senators asked Secretary Sebelius several questions and requested she respond to their concerns in two days.

Fifteen days later the Senators received a reply from Secretary Sebelius. However, her reply only partially addressed their concerns and ignored at least one of their requests entirely.

Accordingly, today Dr. Coburn sent Secretary Sebelius another letter asking HHS for further information and expressing his concern that “American taxpayers have an open and transparent accounting of how their tax dollars are being spent.” The original letters are attached, and the text of today’s letter is pasted below.

Click here for the letter sent on August 3rd to HHS Secretary Sebelius from Sens. Coburn, Barrasso, McCain and Thune on the CMS ad.

Click here for Secretary Sebelius' response sent on August 18th.

Click here for a PDF version of Senator Coburn's letter responding to Secretary Sebelius' response sent on August 25th.

Click here for Secretary Sebelius' letter sent on January 26, 2011.

August 25, 2010

The Honorable Kathleen Sebelius

U.S. Department of Health and Human Services

200 Independence Avenue, SW

Washington, DC 20201

Dear Secretary Sebelius,

Thank you for your August 18th reply to my recent letter. As you know, Senators Barrasso, Burr, McCain, Thune and I previously wrote you on August 3rd expressing our profound concern regarding the U.S. Department of Health and Human Services’ (HHS) ad campaign with Andy Griffith touting the benefits of the new health care law for seniors.

In your reply, you said you took seriously the “duty to educate beneficiaries and get them then factual information they need.” However, the “factual information” regarding Medicare is troubling: The Affordable Care Act cuts nearly $530 billion dollars from the Medicare program to fund new entitlement programs. As a result of the new law, as the August 5th memo from the Chief Actuary of the Centers for Medicare and Medicaid Services (CMS) makes clear, seniors’ care will effectively be jeopardized unless Congress intervenes to prevent pending cuts.

I remain concerned that the small benefits highlighted in the Andy Griffith ad campaign ignore the much larger issue of Medicare’s unfunded liabilities and the looming Damocles sword of reduced physician reimbursements and provider payments. Seniors and the American people deserve to know all the facts about the $2.3 trillion federal takeover of one-sixth of our economy – not merely the “facts” that fit in a 31-second promotional ad.

Your reply also omitted any response to our initial request that HHS provide documentation outlining from which HHS account the funds were drawn from to produce and distribute the ad. Accordingly, I am following up on our outstanding request. When will the requested documentation be supplied?

In response to our request that you “cease the ad campaign immediately and reimburse the U.S. Treasury for any expenditure of taxpayer funds related to this effort,” you provided me with a two-page memo from CMS about the Andy Griffith ad. The memo notes that “the costs of standard open enrollment campaigns have historically run in the millions of dollars.” The CMS memo further notes that “to date, [HHS has] spent $700,000 to produce and run the first post of the open enrollment campaign….” How much more taxpayer money is HHS planning to spend this open enrollment season to promote the changes to Medicare under the new health care law?

Please provide documentation listing the costs of annual open enrollment costs last year and this year. Such documentation should capture the number of “different outreach tools” identified in the CMS memo, including but not limited to: “the Medicare & You handbook, news releases, public service announcements (PSAs), and local activities like town hall meetings and health fairs.” Please include in this total sum — approximately $18 million according to press reports — spent to produce and mail the slanted and misleading Medicare brochure earlier this year. Please also provide the total budget this fiscal year and last fiscal year for Medicare beneficiary information and outreach, if calculated separately from the annual open enrollment costs.

Thank you for your response that will help ensure American taxpayers have an open and transparent accounting of how their tax dollars are being spent. I look forward to your reply.

Sincerely,

 

Tom Coburn, M.D.

U.S. Senator

A recent study from physicians at the University of Virginia analyzed the mortality rates of patients after major surgery. The study was designed to assess outcomes, based on whether patients were insured, uninsured, or had Medicare or Medicaid coverage.

Even “after controlling for age, gender, income, geographic region, operation, and 30 comorbid conditions,” the study’s authors found Medicaid patients had “the longest length of stay and highest total costs.” The authors speculate that explanations for these findings “include delays in access to care or disparate differences in health maintenance” that patients experience in the Medicaid program.

One health policy analyst who analyzed this study did the math from the study’s numbers to draw some troubling conclusions: “Surgical patients on Medicaid are 13% more likely to die than those with no insurance at all, and 97% more likely to die than those with private insurance.” And not only are Medicaid patients almost twice as likely to die as those with private insurance, but “their hospital stays were 42% longer, and cost 26% more.”

Unfortunately, these conclusions mirror data Dr. Barrasso and I highlighted in Bad Medicine. The Medicaid program denies patients access to 40 percent of physicians, yields poorer health outcomes, and higher rates of infant mortality.

Sadly, the new health law enrolls 16 to 18 million Americans into Medicaid. Surely this is not the reform the American people want.

# # #

The 289-page 2010 Medicare Trustees Report was released mid-morning today (here). While reaction to this significant report will continue in the days ahead, readers should immediately note some of important caveats from the Trustees report.

First Findings From Medicare Trustees Report

Proponents of The New Health Law Will Tout The Finding That Medicare’s Trust Fund Appears to Be Extended 12 Years

• “The financial status of the HI trust fund is substantially improved by the lower expenditures and additional tax revenues instituted by the Affordable Care Act. These changes are estimated to postpone the exhaustion of HI trust fund assets from 2017 under the prior law to 2029 under current law and to 2028 under the alternative scenario.”

However, The Trustees’ Caveats Effectively Undermine Proponents’ Optimism About Claims of Extended Medicare Solvency

• Medicare Is Still Not Funded Sufficiently. “Despite this significant improvement, however, the fund is still not adequately financed over the next 10 years. HI expenditures have exceeded income annually since 2008 and are projected to continue doing so under current law through 2013. Beginning in 2014, trust fund surpluses are estimated to occur throughout the short-range projection period and for several years thereafter.”

• It is “Implausible” to Assume No SGR "Doc-Fix". “Current law would require physician fee reductions totaling an estimated 30 percent over the next 3 years—an implausible result.”

• Projected Savings Likely to Not Materialize, Because the Cuts to Medicare Providers “Will Not Be Viable in The Long Range.” “Further, while the Patient Protection and Affordable Care Act, as amended, makes important changes to the Medicare program and substantially improves its financial outlook, there is a strong likelihood that certain of these changes will not be viable in the long range. Specifically, the annual price updates for most categories of non-physician health services will be adjusted downward each year by the growth in economy-wide productivity. The best available evidence indicates that most health care providers cannot improve their productivity to this degree—or even approach such a level—as a result of the labor-intensive nature of these services.”

• If Medicare Reimbursement Cuts Were Implemented, There Are Difficult Choices: Either Providers Drop Out of Medicare And Jeopardize Access For Seniors, or Congress Intervenes and Costs Soar.

“By the end of the long-range projection period, Medicare prices for hospital, skilled nursing facility, home health, hospice, ambulatory surgical center, diagnostic laboratory, and many other services would be less than half of their level under the prior law. Medicare prices would be considerably below the current relative level of Medicaid prices, which have already led to access problems for Medicaid enrollees, and far below the levels paid by private health insurance. Well before that point, Congress would have to intervene to prevent the withdrawal of providers from the Medicare market and the severe problems with beneficiary access to care that would result. Overriding the productivity adjustments, as Congress has done repeatedly in the case of physician payment rates, would lead to far higher costs for Medicare in the long range than those projected under current law.”

• The “Savings” in the New Health Law Are Budget Gimmicks. “The financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range (as a result of the unsustainable reductions in physician payment rates) or the long range (because of the strong likelihood that the statutory reductions in price updates for most categories of Medicare provider services will not be viable). I encourage readers to review the “illustrative alternative” projections that are based on more sustainable assumptions for physician and other Medicare price updates.”

• Financial Projections Are Subject To “Uncertainty.” “Finally, as the Chairman of the Federal Reserve recently noted, “the economic outlook remains unusually uncertain.” Due to the sensitivity of HI trust fund operations to wage increases and unemployment, the recession adds a significant further element of uncertainty to the trust fund projections.”

Senators Coburn, Barrasso, Burr, McCain and Thune sent the following letter to Secretary Sebelius today expressing their concern regarding the U.S. Department of Health and Human Services’ (HHS) television ad campaign touting the benefits of the new health care law for senior.

To read the letter to Secretary Sebelius, click here.

 

Excerpts:

"We request that you cease the ad campaign immediately and reimburse the U.S. Treasury for any expenditure of taxpayer funds related to this effort. We also request you provide documentation outlining which HHS account these funds came from.

"We believe this ad is a clear violation of the spirit of federal laws that prohibit the use of taxpayer dollars for campaign purposes … We can debate the relative merits of the new law, but co-opting public funds during a recession, to make a political, poll-tested argument about the new law, is wrong.

The job of the Executive Branch, quite simply, is to execute and implement the law, not re-litigate a political debate. Using the power of the state and the Treasury to advance the agenda of one political party is an abuse that should not be tolerated, regardless of which party is in power."

Senator Reid used cloture once again to cut off debate and prevent any amendments to pay for the $34 billion price tag of the latest bill to extend unemployment benefits.

To circumvent Senator Reid’s legislative blockade, Senator Tom Coburn has filed two motions to suspend the rules and require the bill to be paid for and to publicly disclose the Senate’s failure to adhere to its own PAYGO rules which were passed with much fanfare earlier this year.

PAYGO MOTION: The first Coburn motion would suspend the rules to amend the bill to require the Senate website to disclose to taxpayers the total amount the Senate has voted to borrow in spend since the PAYGO was signed into law.

Click here for additional background on PAYGO amendment 4493. Click here for a chronological poster outlining the Senate abusing PAYGO by borrowing $266 billion since its enactment in February of this year.

Dr. Coburn's first motion to suspend the rules and statement for the record:

Mr. COBURN. Mr. President, I submit the following notice in writing: In accordance with rule V of the Standing Rules of the Senate, I hereby give notice in writing that it is my intention to move to suspend rule XXII for the purpose of proposing and considering the following amendment to amendment No. 4425 to the House amendment to the Senate amendment to H.R. 4213, including germaneness requirements:

At the appropriate place, insert the following:

SEC.__. SENATE SPENDING DISCLOSURE.

(a) IN GENERAL.--The Secretary of the Senate shall post prominently on the front page of the public website of the Senate (http://www.senate.gov/) the following information:

(1) The total amount of discretionary and direct spending passed by the Senate that has not been paid for, including emergency designated spending or spending otherwise exempted from PAYGO requirements.

(2) The total amount of net spending authorized in legislation passed by the Senate, as scored by CBO.

(3) The number of new government programs created in legislation passed by the Senate.

(4) The totals for paragraphs (1) through (3) as passed by both Houses of Congress and signed into law by the President.

(b) DISPLAY.--The information tallies required by subsection (a) shall be itemized by bill and date, updated weekly, and archived by calendar year.

(c) EFFECTIVE DATE.--The PAYGO tally required by subsection (a)(1) shall begin with the date of enactment of the Statutory Pay-As-You-Go Act of 2010 and the authorization tally required by subsection (a)(2) shall apply to all legislation passed beginning January 1, 2010.

PAYFOR MOTION: The second Coburn motion would suspend the rules to require the bill to be paid for with $40 billion in cuts (reducing unneeded government printing, cutting non-essential government travel, and eliminating bogus government bonuses)and revenue raisers (selling unneeded government property and collecting unpaid taxes from federal employees). This motion also includes the PAYGO disclosure requirement.

Click here for additional information on the PAYFOR amendment.

Dr. Coburn's second motion to suspend the rules and statement for the record:

Mr. COBURN. Mr. President, I submit the following notice in writing: In accordance with rule V of the Standing Rules of the Senate, I hereby give notice in writing that it is my intention to move to suspend rule XXII for the purpose of proposing and considering the following motion to recommit with instructions of H.R. 4213:

The Senator from Oklahoma [Mr. Coburn] moves to recommit H.R. 4213 to the Committee on Finance with instructions to report the same back to the Senate with changes to include:

(A) a reduction in unnecessary government printing and publishing costs to save $4.6 billion over ten years;

(B) a requirement to sell off $15 billion worth of unused and unneeded federal real property;

(C) a requirement for the Internal Revenue Service to collect any unpaid taxes from federal employees, which would bring in $3 billion, including nearly $2.5 million owed by employees of the U.S. Senate;

(D) a prohibition on bogus bonuses for government contractors whose projects are over budget, behind schedule, or do not meet basic performance standards, saving more than $8 billion over ten years;

(E) a prohibition on nonessential travel by government employees to save $10 billion over ten years; and

(F) a requirement the Secretary of the Senate post on the Senate's public website the total dollar amount of new borrowing and spending and other violations of PAYGO approved by the Senate since the PAYGO law was signed into law.

 

Today, Drs. Coburn and Barrasso released a report uncovering the negative effects of the new health care law hidden in the 3,000 pages of the recently passed legislation, and its failure to address the top health care concerns of the American people.

Click here for the full report "Bad Medicine: check-up on the new federal health law" by Drs. Coburn and Barrasso.

Dr. Coburn asks SCOTUS nominee Elena Kagan if she believes the economic vs. non-economic test on the Commerce Clause superceeds the original intent of the Constitution.

Kagan's response:

"The point of precedent is to restrain judges and to remind judges that they don't know everything and that they should rely on the wisdom of the courts and other judges over time."

Dr. Coburn also asked Elena Kagan if there was also asked if there was there any time you were asked to express your opinions on the health care bill and Kagan's responded that she had not.

Sens. Coburn, Cornyn, Thune, McCain, and LeMieux HHS’ Inspector General to express “serious concern about the potential abuse of taxpayer dollars under the new health reform law…” The new federal health law dramatically expands Medicaid, significantly changes Medicare, creates substantial new mandates and regulations, and will send hundreds of billions of dollars to insurance companies. The Senators are concerned that this dramatic expansion of government spending will create significant vulnerabilities to waste, fraud, and abuse.

Furthermore, they are concerned that the fraud and waste provisions in the new law fail to address these vulnerabilities. In fact, the independent nonpartisan Congressional Budget Office estimated that over the next decade under the new law, only $6.7 billion dollars will be saved from fraud in Medicaid and Medicare.[1] We are very concerned that, under the new reform law, taxpayers and patients will continue to lose out to criminals who commit fraud.

Read the entire letter here.

Supporters of the new health law will argue that the new law extends Medicare’s solvency and point to CBO’s estimate of the legislation as proof. Unfortunately however, claims about extending Medicare’s solvency are inaccurate. CBO Director Doug Elmendorf explained in a December 2009 letter to Senator Sessions, that the appearance of savings to Medicare program was because the Medicare trust fund is “essentially an accounting mechanism.” So the cuts to Medicare are effectively double-counted, giving the appearance of extending Medicare’s solvency while actually being used to pay for the cost of the new law. Media coverage highlighted CBO’s clarification, saying the “budget office challenges [Democrat] claims of Medicare savings.” But the clarification from CBO not only challenged claims of Medicare savings – it largely undermined them. Here’s what CBO said:

“The savings to the HI trust fund under [the new health law] would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs.” CBO goes on: “To describe the full amount of [Medicare] trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government’s fiscal position.”

The conclusion from the Director of CBO is that the cuts to Medicare cannot “pay for future Medicare spending [and therefore increase its solvency] and, at the same time, pay for current spending on other parts of the legislation…” Other official experts arrive at the same conclusion. The CMS Chief Actuary echoed CBO, stating plainly that the reduced spending resulting from the significant Medicare cuts in the new health care law, "cannot be simultaneously used to finance other Federal outlays (such as coverage expansions) and to extend the trust fund.” Both the CBO Director and CMS Actuary are in agreement: it is not possible double count savings from Medicare. So, this means that the appearance of Medicare’s extended solvency is actually only a mirage.

It is deeply troubling that the new health law uses Medicare dollars to pay for new subsidies for Americans who are forced to buy federally-mandated health insurance. The Medicare program is already in dire condition. Medicare faces an unfunded liability of $38 trillion dollars, which is the cost of providing benefits for Americans currently paying into the Medicare system. It is no wonder that, according to the 2009 Trustees’ report on Social Security and Medicare, the Medicare trust fund will be exhausted in 2017. We support common-sense steps to empower seniors and strengthen Medicare. But the new health care law threatens seniors’ access to care and uses Medicare as a piggy bank to fund a new entitlement program. Tragically, this approach breaks the President’s pledge not to cut Medicare benefits, and fails to meet his commitment from September 9, 2009 to “protect Medicare.”

For a summary of Medicare cuts in the Reconciliation health care bill, click here.

 

Senator Coburn (R-OK), along with Senators John McCain (R-AZ), Russ Feingold (D-WI), and Kirsten Gillibrand (D-NY) have introduced S.3335, the “Earmark Transparency Act of 2010,” a bill that meets President Obama’s call for Congress to create a single, searchable database of all congressional earmark requests.

In his January 27, 2010 State of the Union address President Obama said, “Tonight, I'm calling on Congress to publish all earmark requests on a single Web site before there's a vote, so that the American people can see how their money is being spent.”

While Congress has taken some steps to make the earmark process more transparent, some members and special interest groups still prefer to keep the process a secret. The American people should not have to obtain search warrants to understand how Congress is spending their money.

The Earmark Transparency Act of 2010 would do the following:

• Create a user-friendly, online database – it would allow citizens to sort, search and download earmark data;

• Provide details on projects that are not currently available – it would include all relevant information, including the amount of initial request, amount approved by the committee, amount approved in final legislation, sponsor name, sponsor state or district, project name, and other relevant information;

• Allow the public to see what Congress sees – The bill would require the website to include the earmark request letter written by a member of Congress and any documents supporting the request that is sent to a congressional committee; and

• Make information available quicker – it would, consistent with the President’s speech, require all requested earmarks that are approved to be made public before a vote.

To view the text of S.3335, please click here.

For an executive summary of the legislation, please click here.

To view a section by section summary of the bill, please click here.

To read Dr. Coburn's introductory statement, please click here.

Organizations offer their support for S.3335. To view the endorsement letter from Americans for Tax Reform, please click here. For the endorsement letter from the National Taxpayers Union (NTU), please click here.

According to the Joint Committee on Taxation, ONLY about 7% of Americans – or close to 13 million individuals, families, and single parents – would actually receive the government subsidy for health insurance in 2019, when the new health law is in full effect. The remaining 93% of Americans – or roughly 163 million individuals, families, and single parents – would receive NO tax benefit under the bill.

See chart here

See subsidy table here

See projected number of returns here

Click here for "Washington: Party of NO" floor chart. Click here for additional background.

Click here for "Washington: Party of YES" floor chart. Click here for additional background.

(WASHINGTON, D.C.) – U.S. Senator Tom Coburn, M.D. (R-OK) released the following statement today after the Senate rejected two amendments offered by Senators Coburn and John McCain (R-AZ) that would have paid for the $60 billion supplemental bill by reducing spending by the same amount. Coburn/McCain amendment #4231 failed by a vote of 45 to 53, while amendment #4232 failed by a vote of 47 to 50.

“By refusing to pay for this bill the Senate is undermining our troops, our country and our future. Our national debt, which just hit $13 trillion, is the real emergency and Congress just made that problem worse,” Dr. Coburn said. “Military operations that began in 2001 can hardly be called unforeseen emergencies. Using budget gimmicks to hide the costs of this bill has nothing to do with serving our troops and everything to do with serving career politicians who want taxpayers to subsidize their addiction to spending.”

“The Senate could have easily come up with $60 billion to pay for this bill in our $3.5 trillion budget, at least ten percent of which is pure waste. A vote against this amendment was a vote to continue the vast amount of waste, inefficiency and sheer stupidity in the defense budget, in particular. The Pentagon’s finances are so poorly managed they can’t be audited. The reason they can’t be audited is because Congress doesn’t care to hold the Pentagon, or anyone else, accountable. This vote will further institutionalize the vast amount waste and inefficiency within the Pentagon and across the federal government,” Dr. Coburn said.

“I was disappointed that instead of doing the hard work of setting priorities many of my colleagues defended their position with partisan rhetoric and tired campaign slogans. George Bush didn’t force a single senator to borrow $60 billion to pay this bill, the vast majority of which is not a true emergency. The American people are sick and tired of these excuses. There is nothing patriotic about wasting other people’s money, especially when it’s rationalized as being for the troops,” Dr. Coburn said.

                                                     ###

A letter sent by Dr. Coburn to Chairmen of the National Commission on Fiscal Responsibility and Reform, includes a memorandum illustrating what he believes to be serious problems in our defense budget needing immediate attention.

To view the letter to Chairmen Alan Simpson & Erskine Bowles, please click here.

The upcoming "emergency" spending bill that will include supplemental war appropriations and other items, could cost as much as $60 billion, none of which is paid for. In a letter to his colleagues, Dr. Coburn urges Congress to act responsibly by offsetting the cost of the bill with cuts to lower-priority federal spending.

While the needs of our military men and women must be fully met, providing the necessary equipment and supplies needed for a safe return home, continuing to spend money we do not have will only lead us further down an unsustainable course. As a result of Congress' inability to make tough decisions, billions of taxpayer dollars continue to fund wasteful, inefficient and politically-motivated projects within the Department of Defense that provide very little value to our troops.

To read Dr. Coburn's "Dear Colleague" letter, please click here. For additional information on waste, fraud, and abuse within the Department of Defense and State, please click here.

Senator Coburn (R-OK), along with Senators John McCain (R-AZ), Russ Feingold (D-WI), and Kirsten Gillibrand (D-NY) have introduced S.3335, the “Earmark Transparency Act of 2010,” a bill that meets President Obama’s call for Congress to create a single, searchable database of all congressional earmark requests.

In his January 27, 2010 State of the Union address President Obama said, “Tonight, I'm calling on Congress to publish all earmark requests on a single Web site before there's a vote, so that the American people can see how their money is being spent.”

While Congress has taken some steps to make the earmark process more transparent, some members and special interest groups still prefer to keep the process a secret. The American people should not have to obtain search warrants to understand how Congress is spending their money.

The Earmark Transparency Act of 2010 would do the following:

 • Create a user-friendly, online database – it would allow citizens to sort, search and download earmark data;

• Provide details on projects that are not currently available – it would include all relevant information, including the amount of initial request, amount approved by the committee, amount approved in final legislation, sponsor name, sponsor state or district, project name, and other relevant information;

• Allow the public to see what Congress sees – The bill would require the website to include the earmark request letter written by a member of Congress and any documents supporting the request that is sent to a congressional committee; and

• Make information available quicker – it would, consistent with the President’s speech, require all requested earmarks that are approved to be made public before a vote.

To view the text of S.3335, please click here.
For an executive summary of the legislation, please click here.
To view a section by section summary of the bill, please click here.
To read Dr. Coburn's introductory statement, please click here.

Organizations offer their support for S.3335. To view the endorsement letter from Americans for Tax Reform, please click here. For the endorsement letter from the National Taxpayers Union (NTU), please click here.

Attached is an interesting new memo from the Congressional Research Service (CRS) analyzing the IRS’s enforcement abilities for penalties of noncompliance with the individual mandate in the new health law. The memo confirms the assertion in last Thursday’s USA Today story that, with respect to the enforcement of penalties, “the IRS’ hands are tied, to a considerable extent.”

According to the memo, under the new law, the IRS will enforce the mandate like a tax, but without the usual tax-like penalties for noncompliance. As the details of the memo confirm, under the new federal health law, relatively low-cost penalties and anemic enforcement will create a perverse incentive for millions of Americans to game the system and only buy health insurance when they are sick.

This gaming of the system should surprise no one. It does not take a PhD in economics to understand that, absent a stiff penalty, there is no incentive for healthy Americans to comply with the mandate to buy government-approved insurance, at least not until they are sick. In fact, the nonpartisan Congressional Budget Office projects that about 4 million Americans will not buy expensive, government-dictated health insurance, since the penalties for noncompliance will average a about $1,000 apiece in 2016 while the cost of the insurance will be many times higher. This gaming of the system will skew the risk pool and increase premiums for other Americans with health insurance.

To see a clear example of what this will look like, one only need consider what is happening in Massachusetts. As the Boston Globe reported recently, “thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses.”

Unfortunately though, there is good reason to expect the system-gaming under the new federal health care law to be even worse than it is in Massachusetts. Under the Massachusetts law, the state has significant, stringent enforcement powers (including the powers of imprisonment) it can use to force citizens to buy insurance. But as the CRS memo makes clear, such beefy enforcement powers are not available to the IRS under the new law.

All this means that while IRS may still harass millions of Americans, the individual mandate will largely be ineffective in broadening the risk pool. We can expect millions of Americans to game the system and premiums to increase. This is what happens when politicians attempt to use bureaucracies to force Americans to buy health insurance, and this is why the IRS’ enforcement of penalties is destined for failure. 

For the full CRS memo, click here.  

For a summary of the CRS memo, click here.

For CMS Actuary report "Estimated Financial Effects of the 'Patient Protection and Affordable Care Act' as amended, click here.

I want to thank Sen. Levin for holding this fourth and final hearing into the financial crisis and the role of investment banks. I also want to thank the witnesses for making themselves available to answer our questions.

This hearing is particularly important because this week the Senate is considering major financial reform legislation that could have profound effects on our economy. In recent months, Congress and the American people have been debating the causes of our financial crisis and looking for solutions. Mr. Chairman, I commend you advancing this discussion with our examination of institutions like Washington Mutual and federal regulators, particularly the Office of Thrift Supervision.

What we have learned is that there are no easy answers. This is important to keep in mind when Congress debates major legislation. I certainly have my own views about what caused the financial crisis but most honest observers would acknowledge that the roads of responsibility lead to places like Washington and Wall Street. We also can’t forget there were numerous causes to the financial crisis. In truth, we all took turns inflating the housing bubble.

Today, we are looking at the role of one investment bank: Goldman Sachs.

My goal is simply to uncover the truth of what happened in several of these transactions.

If we can understand this piece of the puzzle we’ll be in a much better position to craft responsible legislation that addresses the real problem. And, more importantly, the American people will be better informed and more equipped to hold us accountable.

The investigation into Goldman Sachs has given the subcommittee an opportunity to dive into the firm’s decisions regarding mortgage investments. Even though Goldman Sachs is the focus, I would suggest the questions we are going to ask the witnesses today also should be asked other leading investment banks. Congress has a responsibility to understand how widespread some of these complex financial transactions may be.

The key question before us, I believe, is whether Goldman Sachs was making proprietary trades that were contrary to the financial interests of their clients and customers. Sorting out these potential conflicts is central to understanding how we move forward with financial reform.

Several instances seemed to show bankers and traders were focused on doing what was right for the firm, rather than what was in the best interests of clients. In an exchange over the Abacus deal, one employee remarked: “The way I look at it, the easiest managers to work with should be used for our own [priorities]. Managers that are a bit more difficult should be used for trades like Paulson . . .”

Goldman employees knew that such tactics could hurt their reputation if they were ever uncovered.

Markets can be complex, but they are built on three simple concepts: truth, trust and transparency. Without them, the cost of doing business is too high, and markets cannot function properly.

I have several questions about these deliberations within Goldman Sachs. While I am committed to withholding final judgment until all of our hearings are complete, some of what we uncovered paints a dark picture of what was going on inside investment banks. To the witnesses I would say this is your opportunity to explain to us and the American people what happened.

Again, I thank you for being here and I look forward to your testimony.

The following Congressional Resource Service reports have been released addressing key questions and concerns with the enactment of the Patient Protection and Affordable Care Act (PPACA). The reports provide an in-depth look into how Americans currently covered under private insurance plans will be affected by the recently passed health care reform legislation.

For the CRS report addressing the effect of PPACA on individuals covered under grandfathered health plans under, click here.

For the CRS report addressing provisions in PPACA to raise revenues to pay for expanded health insurance coverage by imposing excise taxes and fees on the private health care industry, and other health-related revenue provisions, click here.

For the CRS report addressing the unprecedented amount of regulatory responsibility and authority in the area of health care that PPACA gives to federal agencies, click here.

For the CRS report summarizing the key provisions in PPACA affecting the private health insurance market, including individuals and employers, click here.

For the CRS report summarizing the changes made to PPACA by H.R.4872, the Health Care and Education Reconciliation Act of 2010 (referred to as the reconciliation bill), click here.

For the CRS report summarizing the Medicare related provisions and statutory changes to the Medicare program in PPACA, click here.

For the CRS report summarizing the changes made to Medicare by the Reconciliation Bill as issued to the Senate-passed H.R.3590 the Patient Protection and Affordable Care Act, click here.

For the CRS report summarizing the changes made to Medicaid by the Reconciliation Act to the Senate-passed Patient Protection and Affordable Care Act (H.R.3590), click here.

For the CRS report summarizing changes made to health-related revenue provisions by the Reconciliation Act to Senate-passed H.R.3590, click here.

For a CRS report of the chronology of major effective dates for private health insurance reforms in the PPACA and proposed changes in the Reconciliation Bill, click here.

For the CRS report of health insurance premium credits under PPACA, click here.

For the CRS report summarizing potential employer penalties under PPACA, click here.

For the CRS report summarizing small business health insurance tax credit under PPACA, click here.

For the CRS release of news articles on federal coverage of ED drugs for sex offenders, click here.

For the CRS report of coverage under a qualified health plan for ED drugs prescribed to convicted rapists, child molesters, and other sex offenders, click here.

This week Dr. Coburn will be talking on the continuing extensions bill and his amendments to the bill.

At a cost of at least $18.1 billion to taxpayers, H.R. 4851 would extend the following federal benefits for one month, through the end of April:
• Unemployment insurance coverage;
• COBRA Assistance;
• Medicare subsidy payment rates for physicians;
• Poverty Guidelines; and
• National Flood Insurance Program.

The legislation would also provide compensation for federal employees furloughed during March 1st and 2nd as the result of Congress not being able to pass an extension in time ($1 million transfer from the Highway Trust Fund) and clarify that certain doctors in outpatient facilities are eligible for health IT payments under Medicare and Medicaid (unknown cost).

According to CBO, the cost of this bill to taxpayers would be at least $18.1 billion over ten years. Instead of including spending cuts to offset the cost of this bill, the spending is designated as “emergency” in order to allow Congress to usurp the PAYGO rules we put in place earlier this year. As such, this legislation will add another $18 billion to the current trillion-dollar deficit, despite promises to pay for all new spending this year and not add even a dime to the debt.

If Congress continues to pass extensions every 60 days, costing taxpayers $18 billion, by December we will have added another $81 billion to the deficit, and still have failed to truly address the long term problem of how to pay for providing reasonable benefits to those who need our help, so we do not continue to spend beyond our means, burdening the next generations and placing our country at a national security risk because of the large debts owed other countries.

Congress has for too long failed to prioritize national needs and instead has elected to saddle future generations of Americans with a national debt that is now greater than $12.6 trillion. The 2010 deficit is projected to amount to $1.3 trillion and we are borrowing 43 cents on every dollar; yet, Congress continues to increase spending without any correlating spending cuts.

Dr. Coburn’s amendments would offer various ways to pay for extending these important benefits to those in need without also extending an even larger burdent of debt to the next generation.

Amendment 3726— Finance Tax Offset Provisions and Rescission of Unobligated Balances 
This amendment is a compilation of 8 provisions that the finance committee provided before Easter recess to offset the short term UI extension package. This offset contains a diverse and bi-partisan backed package of revenue raisers. These offsets constituted the universe from which Senate Republicans and Democrats reached a tentative agreement to offset a short term UI extension, only to have it scuttled by Speaker Pelosi and House Democrats. In addition, this amendment would rescind $10 billion unspent, unobligated federal funding.

Click here for additional background.

Amendment 3723— Rescinding $20 Billion in Unobligated Balances
This amendment would rescind $20 billion in unobligated federal funding to fully pay for the 30 day extension of federal benefits and payments provided by H.R.4851, the Continuing Extension Act of 2010. Federal agencies ended Fiscal Year 2009 with nearly $1 trillion of unobligated funds, according to the OMB. In FY 2009, the federal government held $921.8 billion in unspent funds and OMB estimates that this amount will exceed $600 billion in FY 2010 and 2011. Simply put, Congress is approving increases in government funding faster than bureaucrats can spend it!

Click here for additional background. Click here for amendment text.

Amendment 3727— Spending Reductions Offset
This amendment fully offset the cost of H.R. 4851 by rescinding spending, repealing less important programs, and enacting good government reforms. This amendment contains 14 different spending offset and an additional 8 finance offsets that, in total, pay for the entire cost of this extension bill.

Click here for additional information. Click here for amendment text.

Other info:

This is its fifth short-term extension in the last sixth months

 • H.R. 4851: Currently before the Senate, a one-month extension of Unemployment Insurance, Cobra, Physician payments, and other subsidies. Total cost: $9.2 billion
• A message to H.R. 2847: On March 18, 2010, the President signed the Hire Act, which included a 9 month extension for transportation. Total cost of this extension: $47 billion
• H.R. 4691: On March 2, 2010, the President signed a similar one-month extension of Unemployment Insurance, Cobra, Physician payments, and other subsidies. Total cost: $10.3 billion
• H.R. 3326, Division B: On December 19, 2009, the President signed a two-month extension included in the Department of Defense Appropriations Bill which covers all the programs extended in H.R. 4851 and surface transportation. Total cost: $18.57 billion
• H.R. 3357: On August 7, 2009, the President signed a bill transferring $7 billion to the Highway Trust Fund to cover a shortfall and $7.9 billion for Unemployment insurance. Total cost of these provisions: $14.9 billion
• Congress also passed two continuing resolutions (H.R. 2918 and H.R. 2996) which did not include additional spending beyond the Budget Resolution levels.

Pay-Go Has Been Ignored

On February 12, 2010, President Obama signed into law the Statutory Pay-As-You-Go Act of 2010.[1] The basic principle of PAYGO is that any new spending or tax relief should be offset with equal reductions in spending or increases in taxes in order to not increase the deficit.

Yet, in the less than two months since then, the Senate has ignored its own budget rules four times and spent $120 billion, which was not paid for, violating the spirit of PAYGO.
• On February 24, 2010 – The Senate voted to waive budget point of order against “jobs” bill.
• On March 17, 2010 – The same bill was considered slightly altered on March 17th, 2010, and the Senate voted 64-34 to waive another budget point order.
• On March 2, 2010, the Senate failed to comply with PAYGO when it approved H.R. 4691.
• On March 3, 2010, the Senate voted 60-37 to waive PAYGO on the tax extenders bill (H.R. 4213), and add nearly $100 billion to the deficit over the next ten years.

In the last two years, the Senate has passed three “emergency” bills costing a total of $62 billion to extend the Highway Trust Fund and three bills to extend emergency unemployment benefits at a total cost of more than $28 billion. None of these funds are offset.

Congress Can Offset Spending if It Wants To

House Appropriations Committee Chairman David Obey and House Democrats almost unanimously voted to use stimulus funds to offset $600 million for “summer employment programs for youth” and $60 million for small business initiatives already offset in other legislation passed by the Senate.

The Senate and House already passed an offset for the small business programs using funds identified by the Small Business Administration as available within their budget and for the Cash-for-Clunkers extension, the Democrats found $2 billion in unused Stimulus Funds for the Innovative Technology Loan Guarantee Program to pay for the extension.

If Congress can vote to offset a $600 million appropriation for “summer employment programs for youth,” they can certainly offset $9 billion for un- and underemployed Americans in need of assistance.

Members of Congress and their staff currently enjoy participation in the Federal Employee Health Benefits Program (FEHBP). This program covers about 8 million federal employees and provides its enrollees a range of coverage options from private insurance companies. FEHBP is administered by the Office of Personnel Management (OPM) which negotiates with health insurance companies, approves qualified health plans for participation in FEHBP, and contracts with insurance carriers.

The new law makes clear that Members of Congress and their staff should no longer be allowed to participate in the Federal Employees Health Benefits Program. Section 1312 of the law says: “the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are, (1) created under this act; or (2) offered through an exchange established under this act.” Since FEHBP existed before the passage of the new law, and because the law does not allow it to be offered through an exchange—exchanges are the new health insurance bureaucracies that will be established in every state by 2014—the clear reading of the law shows Members of Congress and their staff should no longer be participating in the Federal Employee Health Benefits Program.

In fact, an April 2010 memo from the nonpartisan Congressional Research Service (CRS) confirms this conclusion. “As drafted, Sec. 1312(d)(3)(D) appears to remove Members of Congress and congressional staff, as defined by the subsection, from FEHBP and, therefore, arguably from any health insurance provider under the rules, administration, and guidance of OPM.”

A regular interpretation of law would lead one to conclude that provisions without specified enactment dates become effective when a bill becomes law. The CRS memo concludes the same, saying, “… the Supreme Court has articulated, ‘absent a clear direction by Congress to the contrary, a law takes effect on the date of its enactment.’” The same memo goes on to say that while the language could be clearer, there is no reason to expect the provision is not effective. “… reference to, but lack of, a specific effective date for this provision creates uncertainty…[but] no ‘clear direction’ from Congress exists to delay this provision from becoming effective.”

Reporting on the findings of this CRS memo, the New York Times wrote “…the report says, the men and women who wrote the law may find that the guarantee of stability does not apply to them.” So, Congressional leaders and staff who drafted the law find themselves subjected to the disruption in coverage the law creates. As the Times noted, “These seemingly technical questions will affect 535 members of Congress and thousands of Congressional employees. But the issue also has immense symbolic and political importance. Lawmakers of both parties have repeatedly said their goal is to provide all Americans with access to health insurance as good as what Congress has.”

According to the clear reading of the language of the law, Members of Congress and their staff should have been removed from the Federal Employee Health Benefits Program upon enactment of the new health care law. But they were not. And, on April 16, 2010, President Obama’s appointee to head the Office of Personnel Management, John Berry, wrote to House Speaker Nancy Pelosi regarding Section 1312 of the new law. In direct contradiction to the findings of the to the CRS memo, he arbitrarily said that that Section 1312 “is not effective until the state exchanges…become operational.”

This certainly looks like an unelected Administration official is abusing his authority to misinterpret and misapply the law, despite the clear reading of the law and the findings of the Congressional Research Service. This decision is troubling because it appears an unelected official is colluding with the powerful to exempt them from the law. Americans expect leaders in Congress and the Administration to hold themselves to the same standards as other Americans, not give themselves special treatment.

Unfortunately, this decision reveals the double-speak coming from the majority in Congress. In their rhetoric, the majority says say they want Americans to have health insurance like Members of Congress, but in reality they continue to treat themselves better than other Americans. Nationally, the Federal Employee Health Benefits Program offers over 280 private plans in total, so Members of Congress and their staff easily have a dozen health care plans to choose from, with a wide range in benefits, premiums, and cost-sharing.

But the bill they shoved through Congress on party lines does not give Americans FEHBP-like insurance. Rather, it includes heavy-handed federal mandates that increase the cost of health insurance for millions of Americans. Furthermore, repeatedly during the health reform debate, Congressional lawmakers refused to give up their health benefits to experience the same health care as millions of Americans. Democrats in Congress rejected Republican amendments that would have enrolled Members in Congress and political staff in Congress and the Administration in the Exchange. They also rejected amendments that would enroll Congress in Medicaid, despite that half of the uninsured coverage numbers in the law come by enrolling low-income Americans in Medicaid.[1]

No politician the law, and no politician or politically-appointed staffer should get special treatment. Tragically however, this one example of an unelected bureaucrat at OPM issuing a ruling on Section 1312 is an example of precisely the kind of special treatment and insider dealing the American people reject. Though Dr. Coburn opposed the new health law when it was debated in Congress, he expects Congress to live under the laws it passes.

Click here to read the CRS full report.

Protects the Second Amendment rights of veterans (Amendment 3687) - This bill protects veterans from being denied their Second Amendment rights without due process. 

Click here to view amendment text. Click here for additional background.

Prohibits Members of Congress from receiving a pay increase until the budget is balanced (Amendment 3689) - This amendment freezes the pay of Members of Congress until they balance the U.S. government’s budget. This would block this automatic congressional pay raise until Congress stops borrowing money to pay for its excessive spending.

Click here to view amendment text. Click here to view additional background.

The Following Amendment Has Been Killed by a Vote of 57 to 42: Roll Call vote.

No Erectile Dysfunction Drugs To Sex Offenders (Amendment 3556) – This amendment would enact recommendations from the Government Accountability Office to stop fraudulent payments for prescription drugs prescribed by dead providers or, to dead patients. It also prohibits coverage of Viagra and other ED medications to convicted child molesters, rapists, and sex offenders, and prohibits coverage of abortion drugs.

Click here to view the amendment text and click here for additional background.

This amendment was tabled, or killed, by a vote of 57 to 42: Roll Call vote. A “YEA” is a vote to kill the amendment and to allow child molesters and rapists to access Viagra under the new health care exchanges and “NAY” vote is a vote to support consider of the amendment and to prohibit Viagra for sex offenders.  

Transcript:

SEN. TOM COBURN (R), OKLAHOMA: I want to send a couple of messages to my colleagues in the House.

If you voted no and you vote yes, and you lose your election, and you think any nomination to a federal position isn't going to be held in the Senate, I've got news for you. It's going to be held.

Number two is, if you get a deal, a parochial deal for you or your district, I've already instructed my staff and the staff of seven other senators that we will look at every appropriations bill, at every level, at every instance, and we will outline it by district, and we will associate that with the buying of your vote. So, if you think you can cut a deal now, and it not come out until after the election, I want to tell you that isn't going to happen. And be prepared to defend selling your vote in the House.


Click here to view video.

As early as Tuesday the Senate is expected to vote on Dr. Coburn’s amendment that would require the Senate to be truthful about how it is violating the spirit of PAYGO.

Amendment 3358 –– Requires the Senate to be truthful with taxpayers about its out of control spending and post on its website the total spending approved this year that adds to our deficit and was not paid for by a reduction in spending elsewhere.

On February 12, 2010, President Obama signed into law the Statutory Pay-As-You-Go Act of 2010. The basic principle of PAYGO is any new spending or tax relief should be offset with equal reductions in spending or increases in taxes in order to not increase the deficit. In less than two weeks, the Senate has spent $22 billion, which was not paid for, violating the spirit of PAYGO.

This amendment would expose PAYGO gimmicks and encourage transparency and accountability in Senate spending by requiring the Secretary of the Senate to post on its website the following:

• The total amount of spending, both discretionary and mandatory, passed by the Senate that has not been paid for;

• The total amount of spending authorized in legislation passed by the Senate, as scored by CBO; and

• The number of new government programs created in legislation passed by the Senate.

Click here to view NTU letter.

Click here to view CAGW letter.

Click here to view the Center for Fiscal Accountability letter.

Click here to view the ACU letter.