family had to resort to asking their neighbors to pay for their son's medical bill. story after story after story about medical insurance denials convinced me that the affordable care act will make a difference in reforming health care coverage practices by the insurance companies as well as enabling families to avoid the financial travails of bankruptcy. let me say finally, connecticut has been a leader in insurance markets with many leader insurers headquartered in my home state. i am proud that connecticut has been that leader, that it's home to many insurance companies, and that access health connecticut, the individual marketplace in connecticut has been working tirelessly and successfully with these insurance firms to put together a groundbreaking exchange. the kaiser foundation recently found that the likely cost for a family of four in hartford, connecticut, earning $60,000 a year would be $122 a month. that's a cost of about a starbucks coffee every day. the products being offered through the exchanges are high quality and they are available even to people who have a preexisting condition, in fact, the affordable care act enables health care insurance for all people with a preexisting condition. no longer will people have to confront their insurance companies as regularly and frequently as they did. no longer will insurance companies be permitted to engage in the egregious practices they did and hopefully no longer will the services of my office such as i did when i was attorney general and now as senator be necessary as often. shutting down the government is a movie we've seen before. it ends badly. it ends with undercutting investment, undermining job creation and economic growth, it's a disservice to our nation. hopefully with bipartisan cooperation and compromise we can afford it and proudly go on with the work of this body and of the federal government. thank you, mr. president. i yield the floor. the presiding officer: the majority leader. mr. reid: mr. president, i know of no further debate on the motion to proceed. the presiding officer: is there further debate? if there's no further debate, the question is on the adoption of the motion. all in favor say aye. those opposed. the ayes appear to have it. the ayes have it. the motion is agreed to. the clerk will report. the clerk: calendar number 195, h.j. res. 59, making continuing appropriations for fiscal year 2014 and for other purposes. mr. reid: i have an amendment at the desk. the presiding officer: the clerk will report the amendment. the clerk: the senator from nevada, mr. reid, proposes an amendment numbered 1974. mr. reid: on the amendment juts reported i ask i ask for the yed nays. the presiding officer: is there a sufficient second? there appears to be. the yeas and nays are ordered. mr. reid: i have a second-degree amendment at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid, proposes an amendment numbered 1975 to amendment numbered 1974. mr. reid: mr. president, in relation to that i have a motion to recommit -- a motion to commit h.j. res. 59 and that has instructions at the desk. the presiding officer: the clerk will report the motion. the clerk: the senator from nevada, mr. reid, moves to commit the bill to the committee on appropriations with instructions to report back forthwith an amendment numbered 1976. employed on that i ask for the yeas and nays. the presiding officer: is there a sufficient second? there appears to be. mr. reid: i have an amendment to the instructions. the presiding officer: the clerk will report the amendment. the clerk: the senator from nevada, mr. reid, proposes an amendment numbered 1977 to the instructions of the motion to commit h.j. res. 59. mr. reid: on that i ask for the yeas and nays. the presiding officer: is there a sufficient second? there appears to be. the yeas and are ordered. mr. reid: i have a second-degree amendment at the desk. the presiding officer: the clerk will report the amendment. the clerk: the senator from nevada proposes amendment number 1978 to amendment numbered 1977. mr. reid: i have a cloture motion at the desk. i ask the clerk to report if the chair so advise. the presiding officer: clert the cloture motion. the clerk: cloture motion in accordance to rule 22 of the standing rules of the senate hereby move to bring to a close the debate on h.j. res. 59 a joint resolution making continuing appropriations for fiscal year 12014 and for other purposes signed by 17 senators as follows. reid of nevada, mikulski, donnelly, durbin, whitehouse, bennet, leahy, heitkamp, schumer, warner, heinrich, kaine, baldwin, coons, king. mr. reid: i ask unanimous consent that the mandatory quorum required under rule 22 be waived. the presiding officer: without objection. mr. reid: mr. president, i now ask unanimous consent the senate proceed to a period of morning business, senators permitted to speak therein for ten minutes each. the presiding officer: without objection. mr. reid: i ask unanimous consent that the senate proceed to executive session to consider the nominations on the seetary's desk in the air army, ny,hat thenominations ben bloc, the motion to reconsider made and laid on the table with no intervening action or debate, that no further motion be in order to any of the nominations, any related statements are printed in the record and president obama immediately notified of the senate's action and the senate resume legislative session. the presiding officer: without objection. mr. reid: i ask unanimous consent the senate proceed to calendar number 13, s. 252. the presiding officer: the clerk will report. the clerk: calendar number 13, s. 252, a bill to reduce preterm labor and delivery and the risk of pretty pregnancy-red deaths and so forth. the presiding officer: is there objection to proceeding to the measure? without objection, the senate will proceed. mr. reid: i ask unanimous consent the alexander amendment at the desk be agreed to. the presiding officer: without objection. mr. reid: mr. president, i know of no further debate on this measure. the presiding officer: is there further debate? if not, all in tbaifer say aye. -- in favor say aye. those opposed. the ayes have it. the bill as amended is passed. mr. reid: i ask unanimous consent the motion to reconsider be considered made and laid on the table. the presiding officer: without objection. mr. reid: i ask to lay before the senate the message from the house on s. -- s. 793. the presiding officer: the chair lays before the senate the following message from the house. the clerk: resolves that the bill from the senate s. 793 an act to support revitalization and reform of an organization of american states and for other purposes do pass with an amendment. mr. reid: mr. president, i ask that the senate concur in in the house amendment and the motion to reconsider made and laid on theable, with no intervening action or debate. the presiding officer: without objection, so ordered. mr. reid: i ask unanimous consent the senate proceed to the consideration of s. res. 255, 256, 257, 258, 29, and 260. the presiding officer: without objection, the senate will proceed to those measures en bloc. mr. reid: i ask unanimous consent the resolutions be agreed to, the preambles be agreed to, the motions to reconsider be laid on the table en bloc, there be no intervening action or debate. the presiding officer: without objection. mr. reid: finally, mr. president, i ask unanimous consent that question when the senate completes its business it adjourn until 10:00 a.m. on thursday, september 26, and that following the prayer and pledge, the morning business be deemed expired, the time for the two leaders reserved for use later this day, following any leader remarks the senate resume consideration of h.j. res. 59 the continuing resolution with the time beginning at 10:30 a.m. and that be controlled in one-hour increments with the majority controlling the first hour and alternating thereafter. the presiding officer: without objection. mr. reid: mr. president, staff has worked so hard the last couple of days and i want to acknowledge that. everyone has worked hard. we've tried to space it out and staff has done a remarkably good job, but some people spent the night here. and one group that worked so very, very hard, we only have four reporters that can cover all the proceedings here. so think about what they've had to go through. they have to prepare these -- their notes immediately and they've been working, as i said, for two days. i'm confident that they are exhausted. i hope they rest well, i hope everyone rests well tonight and we'll be back tomorrow hoping that we can even speed things up a little more than what the rules require. i'd like, as i said before, to move this as quickly as i could, we could. the cloture vote will occur you exush one hour, the filing deadline would be 1:00 p.m. on h.j. res. 5959. if there is no further business to come before the senate i ask that it adjourn under the previous order. the presiding officer: the senate stands adjourned until senate stands adjourned until texas senator ted cruz spoke on the floor of the eos senate for over 21 hours in his fight to get the senate to defund a health care law finishing up at noon today. senators mccain durbin and schumer came to the floor later to respond to comments made by senator cruz. this is 20 minutes. sneed madam president i won't take a lot of time here on the floor. the floor has been well used over the last day or so. i would like to make sure that my colleagues and especially those who were not here in 2009 understand that there are many of us who are opposed to obamacare as it is called, the affordable care act, and the opposition that we mounted in 2009. it's a matter of record that the senate to start with the senate finance committee considered the affordable care act over several weeks and approved the bill in october 13 of 2009. at that time members of the finance committee submitted 564 amendments, 135 amendments were considered and 79 roll call votes taken. 49 amendments were adopted and then the senate health education labor and pensions committee approved the affordable care act by 13-10 after a month-long debate. 500 amendments were considered and more than 160 republican amendments were accepted and then it came to the floor of the senate. the affordable care act was on the floor for 25 straight days including weekends between thanksgiving and christmas of 2009. 506th amendments were filed, 228 of which were republican 34 roll call votes were held. most roll call vote resulted in partyline votes including emotion which i had to commit the bill to the finance committee for a rewrite. final passage of the bill because of our insistence in exercising every reasonable parliamentary procedure we could take place on christmas eve of 2009 much to the discomfort of many of my colleagues. but we fought as hard as we could and in a fair and honest manner and we lost. we lost one of the reasons is because we were in the minority and in democracies almost always the majority governs and passes legislation but i was extremely proud of the effort that we on this side of the aisle made to attempt to defeat what we thought was a measure that was not good for america and it was an interesting debate. i think an educational one. we had a lot of us this and my friend from illinois on several occasions he and i basically had debates on the floor of the senate which of course i won every one but the fact is, the fact is that this legislation was hard fought -- it was the legislative process. i didn't like the end of it but i'm proud of the effort that we made and frankly the other side of the aisle allow the debate to take place. and again, we finally finished up on december 24 of 2009 at 7:05 a.m.. so to somehow allege that many of us haven't thought hard enough i think does not comport with the actual action that took place on the floor of the senate now many of those who are in opposition right now were not here at the time and did not take part in that debate. i respect that but i would like to remind them that the record is very clear one of the most hard-fought fair in my view, debates that has taken place on the floor of the senate since the time i have been here. and then i would remind my colleagues that in the 2012 election obamacare as it is called and i will be more polite polite -- aca was a subject that was a major issue through the campaign. i campaigned all over america for two months everywhere i could and in every single campaign rally i said we have to repeal and replace obamacare. well the people spoke. they spoke much to my dismay, could they spoke and they reelected the president of the united states. that doesn't mean that we give up our efforts to try to replace and repair obamacare but it does mean that elections have consequences and those elections were clear in a significant majority that the majority of the american people supported the president of the united states and renewed his stewardship of this country. i don't like it. it's not something that i wanted the outcome to be but i think all of us should respect the outcome of elections which reflects the will of the people. so we just went through a long, many our discussion -- i can't call it a filibuster because they filibuster is intended to delay passage of legislation. there was no doubt that there was a time certain that the time on the floor would have to expire so i guess the thing i can say is extended oratory that took place for many hours on the floor of the senate which is the right of the senate -- and a senator to do. i respect that right and obviously the longevity of the discussion was something that was certainly admirable. but during the course of that discussion conducted by my friend from texas compound he said quote if you go back to the nine teen 40s in nazi germany look we saw in britain apple chamberlain who told the british people accept the nazis. yes they will dominate the con-ed of europe but it's not our problem. let's appease them. why? because we can't possibly stand against them and then he went on to say i suspect those same pundits who say defining obamacare can't be done. if it had been in the 1940s we would have been listening to them. they would have been saying we cannot defeat the germans are you irish sounding labored check that allegation. that allegation in my view does a great disservice, a great disservice to those brave americans and those who stood up and said what's happening in europe cannot stand. when the ship was turned back and the passengers on that ship were sent directly to the gas chambers, when czechoslovakia failed and the slaughter continued. there were many who raised their voices. and then there were those who went to war because of the barbaric and the great threat to civilization and everything we stand for, amongst them were my father and grandfathers. i do not agree with that comparison. i think it's wrong and i think it's a disservice to those who stood up and shouted at the top of their lungs that we cannot appease, that we must act and we did act and it's a disservice to those who did act. i spoke to senator cruz about my dissatisfaction about his use of this language and he said he only intended it to be applied to pundits and not to members of the senate. i find that a difference without a distinction. i find that something that i think i had to respond to. i do not begrudge senator cruz or any other senator who wants to come talk, as long as they want to and as long as they can depending on the rules of the senate but i do disagree strongly to a ledge that there are people today who are like those who prior to world war ii didn't stand up and oppose the atrocities that were taking place in europe. because i have an open and honest disagreement with the process of not agreeing to move forward legislation which i agree with, which was passed through the house of representatives and comparing it to those who appease with the appeasers as senator cruz described them is an inappropriate place for debate on the floor of the united states senate. i think i colleagues. >> and president? >> the senator from illinois. >> would you be kind enough to tell us the state of time remaining? >> there are 15 minutes remaining for the majority. no time limits for the minority. >> senator schumer is going to come to the floor shortly and as soon as he does i'm going to yield to him but i would just like to say in response to senator mccain senator mccain whose father father and his son as well as other family members who had made extraordinary contributions to this country, i am proud to come as a friend and colleague in the united states senate and we have come to at least a draw on several occasions and i respect him very much even when we disagree. i know that his statements were heartfelt. we started in congress with senator reid and senator mccain and i together in the house in 1982 and i hope that his statement is taken for face value that we respect very much all of those who have stood up and fought for america and though we may have many differences politically on the floor on issues we will never question those who have risked and given their lives in defense of this great nation. madam president at the risk of taking more time than i should i do want to say a word though that at the conclusion of this debate we will have an important vote here on the floor of the senate. it's a vote on cloture on the motion to proceed and basically what it says is this, shall we proceed to consider the bill that was sent to us by the house of representatives quits the bill that was sent to us was not one that i agree with. i hope we can change it but i certainly believe it would be a serious mistake for us not to give the 60 votes necessary to proceed to debate on this bill. that would literally bring us to the point where the government faces a shutdown. i don't want that to occur. whatever one's position on the affordable care after any precision we have a bipartisan vote to proceed to debate. rarity hours after that we can but on the motion to proceed and that we will talk about bringing this bill to a close. senator reid has declared that he wants to move this through as quickly as possible in an orderly fashion so everyone has a chance to state their positions on the important issues that are before us. the way i feel about it is very basic. first we have a responsibility to fund this government. one of my assignments here is chairman of the defense appropriations subcommittee -- it's an awesome assignment. almost 60% of all domestic discretionary spending of the united states government goes through this one subcommittee. funds our intelligence agencies and department and defense in any failure or reduction or delay we have in bringing this matter forward can jeopardize the important activities in securing the safety of our nation. i see that that my colleague senator schumer has returned and i yield the floor. >> thank you and first i think i colleague from illinois. >> the senator from new york. >> thank you madam president. i think my colleague from illinois for his courtesy and i think the senator from arizona for his outstanding remarks as usual. now, for 21 hours madam president we have heard the senator from texas hold forth. what has he accomplished? >> he has alienated many of his own colleagues. he has taken 21 hours unnecessarily although he is entitled to speak when he wants because the vote would have occurred whether he said 10,000 words, one word or no words so as leader reid said it's not a filibuster but most of all he has shown the american people what he is willing to do. we all know the senator from texas has very strong views about obamacare. fair enough. that is why we have the senate. there is a time and a place to debate them but he in his view that he is right and everyone else is wrong is willing not only to hold forth on the senate floor a meaningless exercise but more importantly urged his colleagues to hold the american people hostage until everyone agrees with his view. he wants to hold the cancer patient hostage who won't get nih treatments of the government shuts down. he wants to throw the construction worker out of work who is doing the job that is federally funded and won't be funded if the government shuts down. he wants to tell the recipient of social security that they may not get their checks if there aren't enough people at the centers to send those checks to make sure they get to the right place. because he wants to shut the government down. the senator from texas has passionate views. fair enough but when the senator from texas thinks he is so right that he can trample on the rights not only of his own colleagues here who are in a bit of a tizzy about what he has done, but far more importantly on the needs of the american people something is wrong. you no madam president in this country -- ideologues people who are so sure that they are right that they don't listen to anyone else they don't care about anyone else and they don't care about the damage they cause as they pursue their goal. that seems to be what the senator from texas is doing. i was appalled last night when he tried to make the analogy to world war ii and hitler as someone who lost relatives in the holocausholocaus t. to compare the two was absurd and i know my colleague from arizona mentioned that as well. i was also surprised that he used the book green eggs and ham as he read to his daughters because anyone who knows that look knows that the moral of that book is try something before you condemn it. you might actually like it. the main character in green eggs and ham resisted even green eggs and ham. maybe if he were a senator he would speak on the floor for 21 hours and then when he tasted the green eggs and ham he actually would like them. maybe senator cruz as the president's health care bill goes into effect you may actually find that you and your constituents actually like it. the bottom-line modern president is very simple. there there's a time and a place as the scripture said. we will certainly debate in the 2014 elections obamacare. i would note that we did in the 2012 elections and not a single democrat who voted for obamacare in the senate lost. every single person who was up for office had voted for obamacare and was not defeated even though that issue was used against them over and over again. we will have that election again in 2014 fine we welcome it and by the way senator we will commit in 2016 as well. if you want to have a debate on the floor of the senate about obamacare,'s fine. but don't, don't hold not just his body because your exercise was meaningless -- don't hold the american people hostage simply because you are so sure that you are right and everyone else is wrong. don't hold the social security recipient hostage. don't hold the road worker hostage. don't hold the person who depends on inspectors to inspect our food or control our borders hostage. debate obamacare all you want but please don't threaten to shut down the government because you can't get your way. i yield the floor. >> senate republican leader mitch mcconnell and fellow kentuckian senator rand paul came to the floor to discuss the health care law and why they feel it should be defunded. this is 20 minutes. >> mr. president i would say to my friend from kentucky i have had over 50 hospital town hall meetings in our state over -- you and i have done a couple of these together and as a health care professional yourself looking at it from a hospital health care provider point of view which you and i both had either you and your profession or by me being in these hospitals a lot over the last couple of years earned a good bit. what do you think is the most devastating impact of obamacare on the provider world? >> you know i have talked to a lot of doctors and i have been in town halls with you at different hospitals. the hospitals are concerned that if everybody is on medicaid they will go out of business. many hospitals bottom line is they can take care of the poor for medicaid but they rely on private insurance to make a profit and hospitals in most communities have to make a profit to stay in business of the rural hospitals particularly in small areas some of them have already gone bankrupt in kentucky. they are very concerned about people being shifted from private insurance to public assistance to the president says ocoee it will be free but it has a cost. we all pay for it through higher taxes and the other way we pay for it is we have to ration care or ration what we pay for care so we have to limit what we pay hospitals. hospitals are being forced and have been for a while and the same with doctors. how do doctors respond? >> are we going to see a couple of medicaid patients or no medicaid patients and when everyone is on medicaid they will be waiting in line to get to see a doctor met. >> speaking of medicaid i remember reading our governor got teared up when he announced he had decided to accept the additional medicaid mandate which the supreme court actually had said was optional. i remember having a teared up feeling too but for a different reason because i gather what will happen in our state it's going to be between 30,400,000 people with free health care cards rushing towards the emergency rooms. what i heard in a number of my town hall meetings as they can't handle the medicaid low that they have now not to mention all of these new people who are headed their way coupled with the $750 billion in health care provider cuts over the next 10 years to help provide subsidies for people who are not old. it's coming out of medicare to provide subsidies for people who are not old. what's your take on where this heads? >> when we look at the big picture when we say we want to provide health insurance which i think is a noble cause but when you look at what we have conquered the government provides for medicare for people over 65 and medicare is 35 to $40 trillion short. why? it's nobody's fault. we are living longer and a lot of people are retiring so we have a big baby boomer generation but medicare's $35 billion short so we had to tooting a new -- brand-new entitlement. we are going to pay for it by shifting money from medicare that is short. the other thing that should give people pause is we can't get people to sign up for this free program. the president has spent tens of millions of dollars on tv promoting it. you know something is disorganized if people won't take something that is free. >> this bill has also doing something about health care costs and i was just noticing that hhs's own actuaries revise their projections just last week to say that obamacare what actually increased health costs by $621 billion out of the economy. is there any anyway i would say to my colleague dr. rand paul how this could possibly hold down costs? >> no end in in fact i think there were problems in health care but as a physician for 20 years what i heard most was the cost of health care. people came to you and said they were so expensive and if they were small business owner that was their main complaint. this does nothing to control costs and in fact obamacare does the opposite. obamacare is a collection of mandates. i was talking earlier is the difference between freedom and coercion. it will coercion insurance companies and customers to buy only certain kinds of insurance and people say well my kids will be covered when they are in college. it's good but it's not free. it's going to cost you more money so if you are the working class or the working poor you are struggling to buy insurance is going to cost you more. the middle class are going to pay more for their insurance. they are to have insurance and they are going to pay more across-the-board. there are a lot of problems in this bill does nothing to control costs. >> one of our constituents and i was going to mention in your letter. you probably got it from the same constituent that i did. underscoring how the rising costs is impacting people outside of the health care world regular pieces -- people in business. this is from a fellow constituent of ours who writes my father began his kentucky fried chicken business with the colonel himself and with the colonel's family. we proudly serve colonel sanders original recipe for 40 years and it saddens me however well-intentioned this love will will -- undermine my ability to provide employment and deplete resources that could otherwise be used to grow my business. you and i both have heard from a lot of a lot of kentucky businesspeople indicating as this kfc franchisee underscores the impact of those on the private sector. >> i met with a group today and i have 60,000 american senior citizens who signed a petition from conservative 50 plus alliance. they want to delay it dismantle its a fund it do anything just try to slow down this monstrosity. we also heard both you and i from folks who work for ups one of our biggest employers in louisville and kentucky. 15,000 spouses losing their insurance coverage from ups. it was great coverage. ups is a great company with great benefits but they are forced to cut back because of obamacare. we hear from individuals throughout the state. we have gotten thousands and thousands of letters. one couple i met recently that was profiled on "fox news" where they said look we have to buy our insurance. we are self-employed and we do consulting work. we were paying $300 a month and we are going to $900 a month. this is exactly the opposite and one of the real things we had that was working in our health care that should be expanded if we were in charge is health savings accounts. people could say for things that weren't covered by the insurance. straightening their kids teeth cosmetic surgery your deductible meeting a lot of things through a tax-free account. we have made it to correct that over time. obamacare makes it smaller. if you have a kid with autism were spina bifida or special needs unique special needs you need to save that money tax-free so you can help the child with all the extra stuff you need to do for your child. the president has narrowed that. also health savings accounts help keep prices down because many of a higher deductible you call up your doctor and asked the pharmacist how much does that cost? set simple question you are asking how much something costs is the concern on the part of the consumer that drives prices down. we got rid of that. >> you know the other thing that is clearly happening here is that all indications are we have a record number of part-time employees in our country now. employers are downsizing in order to try to get below the 50 employee threshold and of course even as they do that they are not necessarily unaffected by the rise -- rising cost of health insurance premiums but looking around at some way to try to prevent the worst case scenario here. all of this disruption in our economy is actually the reason we have so many part-time workers, is it not? >> yeah in the thing is there was a french philosopher who talked about the scene of the unseen. you may be able to and i'm sure the president will show us a person a gets insurance. that is the scene and that will be the great effectiveness in the unseen will be the first it doesn't get the job. the person i was going to be the 51st employee or the 52nd employee or the part-time worker that had 34 hours going to 29 workers. it's the unseen and i don't question the motives of the president or their syprett i think they want to help people but they didn't think this thing through. even their site is questioning it. authors of the bill are calling it a train wreck. we didn't know we had to pay these taxes on our health insurance. warren buffett and former president clinton all these people questioning, this is going to hurt some of the people you tried to help. that is one of my concerns and mail there has been a lot of talk about procedure. we ought to have an ability to amend this and to make it less less -- make this bill was bad for the american people. the other side has spent a lot of time talking on their side. are they willing to fix obamacare and making it less bad for the american people? >> you were not here yet but you are fully aware of how this bill passed in the first place. not a single member of our party either in the house or senate voted for it. they brought us into session the day after thanksgiving in 2009 and we were not allowed to leave for a month. we were here seven days a week for a month. we managed to eke it out and 60 democrats over 40 republicans eke it out with not a vote to spare on christmas eve. as a result of things like the cornhusker kick back and special deal for nebraska for louisiana purchase a special deal for louisiana come for a special deal for florida. all while the president and vice president and former president clinton were up here telling us to leave me they are going to let that by the fall. here we are four years later and it's more unpopular today i would say to my friend from kentucky than it was on the day it was passed and they think isn't it reasonable to conclude that is because of what it does? >> absolutely. it's a content but it's also because there has been no input at obamacare is 100% the president's bill 100% the work of the democrats with no input from our side. i think people do -- they go home and they want us to have dialogue and they want us to work together a little bit. there has been no working together on obamacare. it's theirs and the president i think i did exactly wrong the other day. it's bad to misinform the people this way. he said republicans want 100% of what they want or they will shut down the government. i think it's the opposite. he wants 100% of what he wants. he doesn't want any compromise. we have a bill before us. there is a discussion about obamacare. 80% of us voted and said the medical devices taxes going to be a disaster for an ovation in the medical industry. it's a bad bill. we should repeal it. why not have a vote on that but to my understanding there will be no food on any of them is to make obamacare and better. >> you know the president himself seems to be kind of conceding that some things aren't working out well. he decided to delay the employer mandate for a year. apparently he has been meeting with some of his union allies to figure out what he can try to do for them. i believe the 100% view of republicans is if we are going to delay for business why not have a delay for everybody? obviously we would like to defund a lot entirely. there is a math problem on that in the senate. there are 54 democrats and 46 republicans. but couldn't we all agree on just delaying this train wreck? i train wreck of the way was at the democratic chairman of the finance committee and the senate one of the authors of the bill called it. >> i think there's also something important about how we change obamacare. if a law has problems and we incorrectly passed a law that has to say the least blemishes it should come back and we should read debate and fix fix r try to make it less bad is the best way to put it but the thing is that it is illegal and it is unconstitutional and it is unprecedented for a president to do this on his own. to my mind win or lose this week this is an important philosophical battle bigger than obamacare. it's as his big and broad as the country is. whether or not congress russell on the president executes the law. if the president gets to vote and execute that's a type of tyranny. montesquieu talked about the separation of powers. when the legislative power becomes executive power that is the time of tyranny. we have to do something this is to the president this is why he needs to be pursued out be pursued over to the supreme court embrey the president says you are not a king. you are the president of legislation comes from congress not from you. >> we have an example that affects our state. the president when he had 40 votes in the house and 60 votes in the senate couldn't get cap-and-trade through the congress. yet last friday he has announced he is going to do it anyway and all indications are there won't be another coal-fired plant built -- a perfect example of what you're talking about the executive arrogance that if i can't give what i want to congress that will just do it on my own and see you in court or whatever limited options we have left. if he really believes he has got the power to delay obamacare why not delay it for everyone, not just businessmen and? >> i think that is what people see is unseemly. gosh if there are problems is it right for him to give exceptions to his friends and you see a line lot of people going to the white house who are big contributors of his and it's like can you really buy access to goodlatte quick scan of president change the law only for people who gave him money quakes can you give out grants and loans to his contributors? i think that belies the scale when he says for the middle class. i don't see the middle see the middle-class. don't see my neighbors are any of my friends getting any special deals at the white house. in fact i see them bearing the brunt of people who do get special deals. i don't like if you have good health insurance placing a tax on you. many unions will get that. i will stand here and fights tooth and nail not to have a special tax on the unions. some might be surprised by that is it's not for me at union or nonunion thing. it's about as a good for americans? should we have a special tax on something good? it seems like the right thing to do. >> regardless of the differences of opinion what is likely to happen here is some point as we are going to have a 51 vote vote on defunding obamacare. something we have not been able to achieve in the last four years and four democrats who had second thoughts, who had an opportunity to take a look at the carnage over the last four years could actually pass a bill that defund defines obamacare. i remember i say to my friend and colleague standing at this very chair four years ago looking at the other side and saying just wanted you, just one would come with us this bill wouldn't pass. i also said however if none of you do every single one of you is responsible for its passage. any democrat on the other side any one of them said this is a bridge too far and are not going to do it would not pass. consequently every single one of them were responsible for its passage but they have a second chance now. an opportunity for a do-over at some point here this week. they will have the chance to cast a real vote on an up or down basis to say look, i have watched this for four years and i don't really think we ought to go forward. it will be interesting to see if party loyalty will be so great that none of these folks will bring themselves to -- that they made a mistake four years ago. >> one of the disappointing things about the debate of then and now is we are talking about something that all americans want. they want affordable health care and they want those people to have insurance. they want everyone to have insurance but we made it a partisan battle -- not weep at the congress and the deliberate process has become very partisan. in reality they are probably things we could agree and even the problems with obamacare i think half of the other side agrees there are problems than they ought to be fixed but because of some kind of stubbornness we are getting 100% of what we want gore we are willing to risk shutting down the government that is we get from the other side. it's their way or the highway. they want all of obamacare or they want the government to shut down. i think really in reality there is a lot of good things that we could actually come together and work on because really obamacare never addressed the price. 85% of the public had insurance and the prices going up so we do need to get together and talk about how we try to bring cheaper health care to our country. >> you know they tragedy of all this and correct me if i'm wrong but we passed a 2700 page bill on it totally partisan basis, it got 20,000 pages of regulations now issued. i used it in his speech recently that they were 7 feet tall and we had to put it on a dolly to get it out to the podium. i would ask my friend and colleague from kentucky didn't i read the other day that even after we do all of this the 2700 page bill and the 20,000 pages of regulations there still may be 25 for 30 million people uninsured. >> i don't think it's fixing the problem. i think we were at 45 so i don't think it's fixed half of the problem. the other interesting thing is that people who didn't have health insurance a third of the people without health insurance for young and healthy and made more than $50,000 a year. they weren't getting health insurance because it was too expensive so what did we do to help them? we made health care affordable. >> well look, i think this law has no chance of working. i don't believe that even if we are unable to defunded here in the next few days that we are necessarily stuck with it. i have been here a a while and you have been a longtime observer through your father's career and your own and i think it's safe to conclude the things that can't work don't stick, don't last because we are after all representing a democracy of people to complain and discuss and tell us how they feel. i don't think this law can possibly stand. it's pretty hard to predict exactly the day upon which it ends but it's cracking. you have jimmy hoffa that president of the teamsters union saying it is destroying the 40-hour workweek and their cadillac health care plan, don't you think this thing can't possibly work? >> no, and i think once the bills come due at the state level you're going to have a real upper on your hands because there's a printing press in washington that runs 24 hours a day printing money in the state capitol the state capitol said on of the printing press. they are limited to a certain extent o their borrowing. when the medicaid bills come due in kentucky are state and other states and i think there'll be another war over obamacare and the question then will be can we throw out the governor who increased their medicaid by 50% and bankrupted our state in the process? >> i thank my colleague from kentucky for the opportunity to change some views here and think about the impact of this on our state and our country and mr. president i yield. >> democratic senators max baucus and barbara mikulski came to the floor to discuss the continuing resolution and while they are in favor of the health care law. senator mikulski discussed an amendment that she and majority leader we we will introduce that strips the health care language after the house passed -- this is about 30 minutes. see the senator from montana. >> mr. president i ask consent that i finish speaking the senator mikulski be granted the floor for 15 minutes and on the completion of senator mikulski senator -- be able to take the floor for 20 minutes. >> without objection. >> mr. president the conservative leaders speaking out about the new health care law. he said and i quote we are against forcing all citizens regardless into a compulsory government program. he went on. he called the pending legislation socialism and went on to say quote are natural unalienable rights are considered to be a dispensation of government and freedom has never been so fragile so close to slipping from our grasp as it is at this moment end quote. those are frightening words mr. president. when were they spoke in? not spoken in 2010 or 2011. not spoken in 2012 or 2013. rather, these words were spoken in 1964 and who do you suppose spoke them? ronald reagan. president reagan speaking out against medicare which became law the following year. fast-forward 20 years when things were quite different. president reg and said in 1984 quote millions of americans depend on the medicare program to help meet health care costs end quote. and it continued and i'm quoting we must ensure the long-term solvency of the medicare program and i'm confident we can find the right solutions in a bipartisan manner. end quote. what do you suppose happened in that 20 of period to change president reagan's mind? well the hysterics ended. people gave the new program room to breathe and it worked. medicare gave american seniors access to health health health e they had never had before. the same pattern emerges when you look further back into history. social security. in 19351 senators said the social security would quote go a long way toward destroying the american initiative. i another member of congress say quote the last -- lash of the dictator is felt and quote. these are criticisms of landmark legislation monumental loss that are now vital to every health and welfare of our nation. while it criticizecriticized in the conception social security and medicare are now considered the most successful large-scale federal programs in the nations history. i am confident history will treat the affordable care act in a similar fashion. i am confident the complaints of those that have gone so far as to call the affordable care act a crime against democracy or a centralizcentraliz ed health dictatorship will soon be drawn out by the voices of the american people whose lives are better off because of the health care act. already the aca has done any more law to expand health care. in the past three years the aca has provided 71 million americans with free preventive services. more than 6 billion seniors have received discounts for vital prescription drugs. more than 3 million young people have peace of mind knowing they are allowed to stay on their parents help plants until they turn 26. and i'm especially proud of the fact that now no child, no child can ever be denied health coverage because of a pre-existing health condition. all that and the full benefits of the law have not yet taken effect. the american health care act -- the affordable health care act is not a perfect love but neither was social security or medicare when they passed congress. and adjustments may need to be made to prove the aca is stronger and better. it would be easier to make improvements as everyone participated. we are not yet -- instead opponents are making every effort to destroy the affordable care act fighting to take away its many benefits from american families and businesses. last week the house passed a continuing resolution to pay the government through the remainder of the year but that will included of minimus to eliminate all funding to implement the affordable care act. i want to be very clear here. we are not going to let that happen. we are not going to go back to the status quo. we are not going back to a broken system where more than 50 billion americans lacked health insurance. we are not going to a system that allows the cost of medical care to aroma family and force them into bankruptcy. we are not going back to a system that allows a simple lack of insurance to contribute to the death of thousands of americans each year. we are not going back to return to the status quo. no, we are not going to do that. rather we are false but go ahead of him implementing the affordable care act. in just six days health exchanges and marketplamarketpla ces will open for business and the affordable air care act will take effect. what does that mean? were the majority of americans nothing really. despite all the scare tactics and despite all the rhetoric nothing will change for the millions of americans who are to get health from their employers or who get medicare or medicaid. but for those almost 50 million americans who don't have health insurance they will now have access to affordable care and peace of mind. .. or pleat the household budgets. past presidents, congresses, and other policy makers have tried to fix the problem time and again. we sit here today with a solution. the affordable care act. for the first time, every american will be guaranteed health coverage. you'll no longer be legal for health insurance to deny someone for preconditioning condition like breast cancer and pregnancy. before affordable care act being pregnant was a preexist -- existing condition. it's just wrong. pregnancy is not a preexisting condition or a basis to deny health insurance. the house wants to stop this continued consumer protection to access to affordable care act. the acl -- wellness visits and mammograms. 71 million americans have received preventive benefits like these for free. the house wants to take it away. under the aca insurers can no longer impose lifetime. they no longer have a cap or a limit. no longer can insurances say no more. the house wants to take it away too. 3.1 million young adults have gained coverage through aca provision. allowed to stay on the insurance plan until 26. we have heard so much favorable conditions about this. no, the house wants to take away as well. i'm concerned about the effect of the house continuing resolution. not only on health care reform but seniors and medicare. leader reid and i wrote a letter to health and human service and asked her what impact the house cr would have on the operation of medicare. we asked how cr effect beneficiary access to care. last friday, sweffed a response that confirmed our fears. the house bill would much broader and more harmful implications for the medicare program and seniors. in the letter she said the cr would, quote, severely impact the medicare program, end quote. she was -- it would eliminate funding for medicare prescription drug coverage. forcing seniors to pay more for the prescriptions. secretary said the house cr would disrupt payments to doctors and cut off annual wellness visit forcing them to pay out of pocket for preventive services. in addition, medicare beneficiary may be forced to drop the medicare advantage program in a role of fee-for-service. it's clear that the house cr would have dire con quinces for the more than 46 million americans who rely on medicare everyday. in her letter, she stressed the severe the impact house cr would have on children and working families. the most vulnerable. the aca expanded medicaid allowing states to cover low-income for the first time. house cr would end the coverage sending the population back to the emergency room for treatments and freeing hospital of providing care. the aca also expanded access to for services with people of disability and long-term care need. the cr would put immediate stop to the program. send people with disabilities back to the nursing home. affordable care act extended the children health insurance program for additional two years. the house cr, you guessed it, back to prior law ending funding for the program for the end of the month. they leave 6 billion kids without access of coverage. no doctor's appointment, no prescription, no cast to heal out carol -- occasional broken arm. for three years they wasted taxpayer money, time and resources trying to stop the act. over and over again tried to repeal the law 40 times. they took the argument to the supreme court. we know what they said. they said affordable care act is a law of the land. supreme court uptheld as the law. people fear what they don't know. i understand that. let take a deep breath. as one republican said recently noted, it is quote, not rash tell me to think the senate will vote to repeal defund the aca. you know what? he's right. this is complex legislation. i'm open to strengthening the law to better serve the american people just as the congress did with social security and medicare. wouldn't it be party if both parties work together to improve the law. it's not going to be repealed. let work to improve it. that's what the american people expect of us. they don't want the government to shut down. they don't america to default on the debt over the aca. a recent poll a vast majority of americans, 59% oppose defunding affordable care act as it a cost of government shut down or debt default. almost 60% say don't do it. it's we have a responsibility to lead. affordable care act is a law of the land. we need to work together make it work for families and businesses that depend on it. instead of using it as a political football. enough is enough. it's time for it to extend. people need to get the aca room to breathe. a chance to succeed. as we do so, i'm confident america is better for it. and we be on the right side of history. thank you, mr. president. i yield the floor. >> mr. president, i have one request. i asked the senate request the following staff be allowed to the senate floor for the 113th session. kevin mcneilous, matthew, craig, lewis, danielle, and robert. >> without objection. >> mr. president. >> senator from maryland. >> mr. president, i rise to speak about obamacare. and i do call it obamacare. when we passed the law, it was called the affordable care act, and before he reached the floor. i would like to compliment the senator in montana for the important and crucial role he played in passing the affordable care act, and it was his absolute stewardship in the finance committee where we could expand access to health care, modernize the way we do it to go from volume medicine to value-based medicine, and to be able to expand our access in a way that al was fiscally prudent. he lead the way in expanding the children's health initiative. so i i know later what he's planning in life a new future for himself. i want you to know while he's thinking about how he will be living a different life. he impacted the lives of many people. i stand here today to thank them personally in a heart felt way. and the way he has improved the lives of people, and particularly the lives of children and women in this country. why. >> senior senator from montana. >> i deeply thank humbled by the statement by the senior senator from maryland. coming from her, that's a high compliment. i deeply appreciate it. >> mr. president, here we are. we are having a national debate on the senate floor about should we provide access to health care to all americans. and be able to do away that is fiscally prudent and modernizes the way we deliver health care to emphasize value health care over volume health care. we having the debate even though we passed the legislation in 2010. now, i thought when you passed a bill, and it was signed in to law, it was the law of the land. oh, no, here we go again. we are trying to take legislation that was passed and undo it by defunding it. i don't know what we're doing here. first there was an attempt to delegitimize president obama. he won two elections. the american people said we want barack obama to be our president. when -- we passed the health care initiative. that was another of a of a make that it was public support for the bill. here we are on the eve of the fnding for fiscal year 23 exing. there's a manufactured crisis bringing the government to a brink of a shut down because the other party, in a few in it, are sore losers. they lost the election, they lost the battle to get the votes when they had the opportunity vote and amend and change the affordable care act. here we are -- we need to be able to move on with the serious business governing our country. i worry about unemployment in our country. i worry about the fact our children are no longer achieving the best in the world. i worry about my small to mid-sized business have access to capital. i know, that many here have called this bill a job killer. you know what is a job killer? our behavior here in the senate. this gridlock, deadlock hammer lock for the united states senate means we cannot do the business of the country in an orderly and predictable way; therefore, what businesses want to plan what are the rules of the game coming out of the united states government, they're not going know. if they're planning what they should do about their business, should they expand, what should they do? they need certainty. as long as we play brinkmanship politic you cannot have certainty. so one thing is certain, though, that we definitely should keep the obamacare. i'm happy to call it obamacare because i think obama does care. but i think all of us here who are democrats serving in the senate in many on the other side of the aisle also support the fact that we want to increase universal access. so let's go to what the legislation meant. where we passed the affordable care act, number one, it provided access to more people for health care. when we pasta bill, 42 million americans did not have access to health care. so that means here in the united states of america, if you needed a doctor, that doesn't mean you would have one. if you needed a prescription drug, it doesn't mean you could afford to buy one. in many instans -- instances it was hardship on many families. but also, the affordable care act also did ended abuses of health insurance companies. when we passed the legislation, people were denied health care on the basis of a preexisting condition. that often meant for children in the united states of america if they had juvenile diabetes, if they had -- they gont get health insurance because the children had a preexisting condition. it you were a woman, it was even worse that maternity -- the pregnancy was considered a preexisting condition. that in some instances, where you had a premature birth and a c-section. you were denied health care because that was considered a preexisting condition. eight states with football you were a -- in eight states, if you were a victim of domestic violence. it was counted as a preexisting condition. you couldn't have access to health care bhap is that? so when the affordable care act we changed that law so we created the opportunity that punitive practice of insurance company wouldn't be a barrier to be able to get health insurance. then there was another issue of lifetime caps that means if you had a condition, and you hit a lifetime cap, then tough luck for you. what happens if you have a child with hemophilia. that's a hard thing for the child to face the rest of his life or her life and for the family. don't you think there should be an -- there should be no caps would have benefit. >> what happens if you are struggling with cancer and you hit a cap. it doesn't mean that your need for treatment ends. it just means your insurance won't pay for it. we look at the annual lifetime cap. for we women, the double insult are simply brought -- was repealed. in the health care affordable care act, there is no gender -- discrimination free checkup where you can go and we get an identification of those killers, those silent killers early on. so if you have high blood pressure, if you have high blood sugar. we failed those early and can intervene before they either move to a deadly situation or worse. we know that high blood pressure undetected can lead to a stroke or to death. there was something called the doughnut hole. it was hard to swallow. it meant once a senior's drug cost exceeded a certain amount, nay went no to not a doughnut hole but a dark hole. they had to pay for the full cost until they reached a catastrophic threshold. now, mr. president, for many people with chronic conditions, not only those dramatic things like cancer, but a chronic condition like diabetes, you can reach that doughnut hole pretty quick, but that's exactly what enables you to manage your blew sugar. working with your doctor, following a program of diet and exercise, you still need a medication to help control that blood sugar. you don't get that medication, you can be heading for worse problems relating to diabetic neurorope think, to vision loss, to newed -- need for die am sis. you need to be in a program you can follow and afford. it's like hotsing the doughnut hole. it saves lives and money. i could go on to other examples about what the affordable care act. there are many were advances in term of women and children. but i want people to know -- i'm getting a lot of tweets that somehow or another maryland isn't being served. when i look at at data from our own state's health commissioner. 4800 kids were to be go on their parent's plan and have health insurance while they look for a job or finish their education. also, 4400 able to participate in the eliminating doughnut hole. it saved an average of $700 a year or aet total of 51 million that was put back to the maryland economy to do other things and create job for other people. whether they say they want to defund obamacare bhap is it they want to replace it with? do they want to go back to big insurance in their punitive practices of designed coverage for a child with preexisting condition? let them call the child and the parent, or the juvenile diabetic . want to defend the part where young people can't stay or their parents until 26. do they want to make that phone call? we know you are working hard to find a job or finish your education. no. do they want to eliminate the cap so it benefits? eliminate closing the doughnut hole. no, they say they want to eliminate it. i want to eliminate this from the cr. let me tell you where i come in as the chair of the committee. i -- in a short time, the democratic leader, the majority leader will offer an amendment to the cr sent over by the house. i would get rid of the brinkmanship slap down politic. the amendment we will be offering will strike the provision to defund obamacare. it will strike the provision that was nut or for debt ceiling which mean the way they want to structure it the house sent over is pay china first then americans at the end of the line. i then want to set in to motion working with their democrats. it's not we democrats want to have a cr -- you're holding your finger up. i want to have an amendment so strike both the defunding of bach, strike the language on the debt limit. move the date for the next -- the continuing resolution from december 15th to november 15th. so that we can get to a situation where we focus on completing our budget, getting the -- [inaudible] and eliminating sequester for two years. i want to get rid of the though at call politics and get in the business much governing america that provides jobs, economic opportunity, and insure our national security. mr. president, i yield the floor. >> senator's time is expired. the end of wednesday's senate session leader reid found cloture on the government funding bill that keep the government running past october 1st and fell defund the law. coming up on c-span2 they imam retirement facing baby boomers. and virginia's governor's race. that's followed by senator mccain, schumer reacting to remarking by senator ted cruise in the 21-hour speech. on the next "washington journal." "washington journal" is live every morning at 7:00 eastern on c-span. at wednesday's white house briefing spokesman jay carr knee discuss the republican push to defund the health care law in order to keep the government running past october 1st. you can see the briefing any c-span.org. here is a look. >> the conversation that you read on friday to the president and speeching boehner, leader pelosi have the -- have any other have -- [inaudible] most certainly. fairsly consistent communication with congress at different levels here at the white house. i don't have any specific conversations to read out. i think chief of staff is going up to the hill at some point talk with democrats. but those conversations will continue, as i said. i don't have any meeting or cfg involving the president's preview of the time. i think we have seen of late there's lot of activity that reflect enormous division within the republican party that are hard to influence our focus is, of course, on the need to make decisions to ensure that the government doesn't shut done and insure that the united states is not default for the first anytime its history. [inaudible] >> i have no scheduling updates planned on the books. we intend to go. yes? >> thank you. it's one thing not to engage speaker boehner when it comes to the possibility of government shut down. you talk about reaching the debt ceiling are you -- [inaudible] here is the thing. i'll say a couple of things about that. i don't have the quote in front of me. i know, you remember it was the speaker of the house that said he would never negotiate with the president again. that seemed a little extreme. he has, of course, since then. the president has had conversations with him and enjoyed them as he always does. the there is no negotiating over congress' responsibility ensure we don't default. we saw what happened when that path was traveled in 2011 and the result was terrible. even the flirtation with default. when it became apparent there were members of congress in the republican party who were willing to default as a matter of -- and willing to inflict that harm on the economy and middle class families, the economy reacted badly. markets reacted badly. people suffer. [inaudible conversations] >> respective still on that negotiated. >> i think that's the point i'm making. is that this cannot and should not be a matter of negotiation. we can and should debate our differences and negotiate and reach comprises over our budget priority, absolutely. we cannot have the american economy and the global economy and the american middle class held hostage to an insis ten to a faculty of congress, especially in one house. it achieve the political objective. it cannot be able to achieve otherwise through at the ballot box or which the legislative process played out three years ago or in front of the supreme court whether they declared it the frangt affordable care act was institutional. when we talk about the debt ceiling the one prop significance open the table that republicans have suggested they would threaten default over a provision that would delay implementation of the affordable care act. and if that were carried out, it would add significant throughout deficit. the -- we have seen the whole time about the negotiations that the principle preoccupation of the republican party and the matter in congress is a need to further reduce our deficit and not be irresponsible. they put forward a proposal that is wrong on so many front. but would raise and increase the deficit along with it. >> it seems hard to believe that the president would prepared to breech the ceiling without having house republicans on the issue. >> congress has the power -- [inaudible] [inaudible conversations] >> that is a power -- [inaudible conversations] proudly [inaudible conversations] the president -- there's a default and the president hasn't stepped in to engage them. again, let's be clear. the president has been and has been willing to negotiate over the budget priority and how to make the right choices and make comprises along the way to make sure we grow our economy, create jobs for the middle class, and we bring down our deficit further in the middle and out years. has us been willing to do that. we have been through a process this year where at the insistence of the republicans as parking lot of the last budget deal, the senate lead by democrats passed a budget. that's what the republican insisted had to be done. we had to follow regular order. you covered the hill. you've heard the cry. democrats refuse to follow regular order. the senate passed a budget. that's what the republicans wanted. they passed the ryan budget. 2-0. and what happens then in regular order is conifer rei are appointed and the two houses try to reach an agreement. comprise. republicans in house were so opposed to the idea of comprise, the qualified negotiation, the idea of finding common ground. to this day they refuse to appoint conferree in a process they said was essential. the president demonstrated again and again his willingness to be reasonable and find common ground. he'll continue to do that. when it comes to the debt ceiling. everybody said we ought to raise it. we can't de-- default. it would be wildly irresponsible. the congress should raise it. one side is saying we'll let the economy default unless we get what we want, which is essentially defunding or delaying obamacare. i think it's pretty clear in a lot of republicans steam agree with this that is a irresponsible position to take. there more on thursday. we'll hear from congressional budget office as he testifies before the house u budget democratic national committee about the nation's long-term economic outlook. you can see it live starting at 10:00 a.m. eastern on c-span 3. go c-span.org and go to the video library to watch the new e video going to have most recent. click on what you want to watch and press play. you can search for a specific topic or keyword. you can find a person, type in their name, hit search. and go to people. go to their bio page and scroll downtown appearances. you can share what you're watching and make clip. use the set button or handle tools. add a title and description and click share and send it by e-mail, facebook, twitter, or google+. created by the cable tv industry. 18.5% of americans over the age of 65 were working last year. the highest flat history. next the aging committee look at difficulty many baby boomers face when trying to retire. this is 90 minute. >> good afternoon. we welcome our website. we want to thank you for being here as we discuss the retirement security of senior citizens, particularly baby boomers. the american senior is in some difficulty financial trouble. changes in the retirement system, higher health care costs, and the recent recession all combined to put baby boom on a shakier financial footing than their parents and grandparents. the american dream is work hard, play by the rules, you can be rewarred with a comfortable retirement. for some of our seniors, that's fading away. people today are not only retiring with less money coming in. but more money is going tout pay off expenses like debt or medical bills, and that doesn't even factor in the financial challenges faced by seniors with long-term health care needs. so here in the congress during the midst that we are now as we speak, going through a her rang on the floor about whether or not we are going to pay our bill, whether or not we're going have a continuation of appropriations next tuesday. it's important think about all of that impact on the people who are already living with too little to no disposal income. more than three and five just in my state of florida on social security get at least half of their north carolina from those retirement benefits. one in five residents rely on meds care. and what about the people in our state that who could get medicaid if the state would expand its program for 1.12 million people under the affordable care act if the state would expand it to its eligibility. that would cover health care for 1.2 million floridians that otherwise are between the eligibility levels in the state medicaid and 138% of poverty. so folks between the ages of 50 and 64, are particularly going to be effected if they don't expand medicaid. until they get to the age of 65 for medicare. now we've had all kinds of stories from my state about how shaky finances are in retirement even he is only bringing in $50 more per month than he has to spend so any real expense that come his way could have a real impact on his financial well being. jim of tampa says he is nowhere near where he was a decade ago before the recession. he's been out of work a total of three years. he kept being told he was overqualified for jobs. now both he and his wife are working and between of two of them, they are making what he made by himself 11 years ago. so he too will be working for a long time. and so what can be done stem the tide? what can we do to make sure our seniors have enough money to last them for retirement? that's what we're here convening today in the committee. it's not only in the making, it's made. i hope our witnesses today will shed some light on this. i want to turn to our ranking member, senator colins, for her comments. >> thank you very much, mr. chairman. i also want to thank and welcome our new colleague to the senate senator scott for coming -- >> welcome. >> welcome. >> for coming today. i know, he's eager to play an active role on the committee. it's great to have him as well as senator warren join us as we explore this very important topic. on january 1st, 2011, the first members of america's baby boom generation celebrated their 65th birthday. since that day, more than 10 million american have reached that milestone and 10,000 more will be add to the number every day for the next 17 years. after four daze -- decades in the work force they should be confident to have the resource to enjoy the requirement years without fearing they will rub out of money and fall if in to poverty. yet, far too many american seniors struggle to get by and have real reason to fear they will outlive their savings. nationally one in four wasn't retired americans has no source of income beyond social security. in my state, maine, the number is 1 in 3 and four and ten rely on that vital program for 90% of their retirement income. bear in mind, that social security provides an average benefit of just a little over $12 00 per month. it's hard to imagine stretching the dollars far now have pay the bills, certainly a comfortable retirement appears to be out of the question. the importance of social security to low-income retirees cannot be overstated. social security benefits represent 85% according to a survey, published last year more than half of all americans are worried they will not be able to maintain their standard of living and retirement up sharply from 34% two decades ago. they are right to be concerned projections published in the year 2010 by the employee benefit research institute, show that nearly half of the early boomers, those between ages of 56 and 62 are at risk. they found that the rate of inadequate retirement income has risen across all age groups and income level since the previous study in 2003. early boomers will need to save an additional 3% of compensation each year to cut in half their chances of running out of money in retirement just to make up for the losses they sustained in the 2008/2009 financial crisis. to a great extent, the decline in retirement security is traceable to the severity of the crisis, which wiped out nearly one quarter of the accumulated wealth of all u.s. house hold. seniors were particularly hard hit. while the weak financial recovery restored some of theirs los. many retirees have been forced to accept a lower standard of living that may well be permanent. other factors that have weakened retirement security of today's retirees are rising health care costs, the need for long-term care, and the fact americans are living listening -- longer. the shift from employer-define benefit plan to defined contribution pension plan like 401(k) has also played a role. employees of smaller businesses are much less likely to participate in employer-based retirement plans. according to a recent gao study, more than half of the 42 million americans who work for businesses with fewer than 100 workers who lack access to a work-base plan to save for retirement. proposals to make it easier for small businesses to provide retirement plans for their workers could make a significant difference in financial security for many americans as long as they do not impose costly new mandates that discourage smaller companies from hiring employees in the first place. again, mr. chairman, thank you for calling this important hearing. i look forward to hearing from our witnesses. >> after we hear from our witnesses, i'm going turn over to our committee members' question, and then i'll do a cleanup of remaining questions of you all. we're delighted to have you all today. your written testimony will be entered to the record. i asked you to keep your comments to five minutes so we can get in to the questions. we're going have miss joe any jacobson. she's a senior. she is experiencing some of these difficult yis that we have talked about. dr. oliva mitchell, international found nation of employee benefit plans professor at the wharton school. paula calimafde. close. she is chair of the small business council of america, and richard johnson, dr. richard johnson senior fellow on retirement policy at the urban institute. we welcome you, miss jacobson, we'll start with you. >> thank you, sir. chairman nelson, senators colins, scott. my name is jo ann jacobson. i'm 62 years old. i was born, grew up and lived in massachusetts until i was 56. and i now live in florida whose average age is 67.6. i'm speaking for the other 24,000 people who live there. i have two sons who live in new england, one in montana, and one in massachusetts. i saved money. i supported my sons. i planned for retirement. yet, when i reached what should have been my reat the sametiermt age, the promise i would receive health benefit for the rest of my life was broken and so were my hopes of retiring comfortably in florida. like many baby boomers, battered by recession, i'm still in the work force and probably remain on the job for the foreseeable future. i have worked in some form since i was 15 years old. although i dropped out of college at 20 because my father got sick, i had a good job at the phone company then at&t. i got married, got divorced, raise two sons with no support. i worked at the phone company for 18 years. got my bachelor degree at night. which inabilitied know gate promotion to management. thus i was able to send my sons to college and also return to college and got my master's degree at 50. in january of 2002, i was laid off at age 52 nine months short of full retirement of 30 years. it was a time when thousand of management employee were being laid off and downsizing measures in many industries. during my time at phone company, i did all the things i was supposed to. even though i was enrolled in the company's defined benefit pension plan, i also participated in the company's savings plan. i bought a few stocks. i participated in financial planning offered by the company and i kept track of my promise and retirement earnings benefit. i have saved all of these years, i begin planning my retirement in my 30s. my goal was to retire to florida in my 50s. and i'm a -- all of my financial and planning retirement planning of centered on my employer's promise benefits and pension and retirement health care benefits. all of that was factored in to my budget for retirement. after being laid off, i spent the next few years in three different job before fulfilling one of my retirement dreams which is is moving to florida. i was concerned about what would happen to my pension payments in retirement, given all the turbulence of the company and changing of ownership, i took a lump sum payout and rolled to an ira. i was not in any position to stop working with children in college. however, i took a series of jobs that were unfortunately, adverse i are impacted by the recession. one company went out of business, one government job was eliminated. even finding a job was tough. i suspect i was a victim of age discrimination. but still at the age of 62, i felt confident enough to convert my ira to annuity and enroll in social security benefit. six week after i enrolled in social security, out of the blue, and one day before the affordable care act was ratified. i received a letter from my company that took over the pension plan stating they would no longer provide health care benefits and would even discontinue my life insurance. try buying life insurance after you're 60 years old. for those people, 65 and older, the rescission of the benefit took place almost immediately. within 30 days. for those under 65 me, health care premium increased immediately. my health care premium doubled. all of the company sub i did will stop at the end of this year from affordable care act takes place. i have shopped around for health care plans. they all will be expensive. especially if i want long-term care at my age. i'm back in work as a realtor to pay for health care. my annuity and social security barely cover my basic cost of mortgage, taxes, every escalating insurance, car payment, utility, daily living, business expenses. then i i can't make too much money drawing social security benefits because they'll be taken away. because i'm not hit with full retirement age of 66. a lot i visited my social security office four times in the last year, i did not learn until coming here that the money would not be withheld forever. ly get enhance benefit at age 66. regardless, that doesn't help me now. because living on a limited budget for the last year or so, i've had to charge doctor's visits, dentist visits along with unanticipated expenses to the credit cards. until now, my debt has been manageable and my credit rating near 800. now it's swollen to five figure and the credit rating has been diminished. i lost an opportunity refinance my house because my credit score had dropped. so there's no vacation or cruises or luxury items for me. there will be no thought of ever retiring. i'm going to be working until the unforeseeable future. what we're seeing here is witnessing the demise of the pension system in america and major corporations to vest themselves in the fie if fiduciary responsibilities. they have ignored their obligation to all -- fulfill pension benefits stated in writing as part of the employee and retirement compensation package. i thank you today for inviting me to share my story. i welcome any questions. thank you. >> thank you. interest rates were high enough to secure them a steady income without spending down their nest egg too quickly. they had inflation protected lifetime benefits from social security and medicare. and they held no debt. more over, they had four children they sent to college who were always ready to help them out. by contrast, we boomers face a very different future. we worry that social security and medicare as well as the disability insurance system are fragile. few of us have retiree medical coverage or traditional define benefit pensions. some of us with defined contribution plans have not put enough in. what we put in, we have seen decline. nor are we converted our assets in to lifetime income so we can't run out in old age. interest rates are so low that holding tips is a losing proposition. and with longer lifespan in the -- we very much need protection for long-term care cost but the products simply are not available. and the topic of my discussion today is debt. many more bombers are in debt than ever before. in a recent report, i compared three cohofort people age 56 to 61. in the health and retirement study. this is a study where you can follow cohorts over their lifetime. we have nows can on people age 56 to 61. in 1992, in tbow, and 2008. for each group, rate on the threshold of retirement, we measured total debt as well as the ratio of dote assets. additionally focused on pattern of financial from guilty using the hrs and the fin are a national financial capability study known as nfcf. we came to two major conclusions about older americans debt levels. first, americans today are much more likely to arrive at retirement with debt than in the past. for the earlier group, back in the early 1990s, about 64% held debt over 70% of the boomers now do so. .. >> a key reason that they are facing so much work that is because they spent more on housing than the previous generation. as a result, boomers are much more likely to have very expensive primary residences, some of them declined in value over the last two years and their mortgage values have grown faster than their homes. the median home loans rose from 6% back in the early '90s over 25%. the boomers will need to continue servicing their loans into retirement and they will continue with much more leverage than in the past. we drill down further and we found that in addition to mortgage debt, boomers had extensive financial habits. they use their cards for cash advances, or exceedingly credit card bills. another piece of medical bills could be a part of the financial problems. this is found in at least a quarter of the baby boomers. only about one third said that they thought that they could not come up -- let me say it again. only about one third said that they would likely to be able to come up with $2000 in the next month to pay this unexpected bill. this might be a car repair bill or a moderately priced home though. in the wake of the financial crisis, in the great recession, we know that more can be done to protect americans from these problems. we know in particular that there is a strong targeted link between financial literacy, planning, saving for retirement, and assets into retirement. those who are not financially savvy are much more likely to have debt and lower savings. protective legislation can be useful when people lack the opportunity to make repeated purchases, such as annuities. it can also be better and helpful when americans face potentially sensitive decisions that they do not really understand. such as taking out a mortgage or paying off her car loans. i also think that boomers can do better with financial advice, which could generate important rewards, and they also need the delays of social security benefits. a number of baby boomers have already reached this conclusion on their own. they claimed benefits from 62 years old to 70 years old, and not that everyone should be back, but that will mean an additional 76% more in monthly payments. >> thank you, doctor metro. >> thank you. >> i went to a school where all the teachers knew me by my first name by the end of the first day. so you can call me paula. the small-business legislative council, i appreciate the opportunity to be disseminating this testimony. the spca represents the representatives of privately owned businesses and through our members, we have well over 20,000 of them, this includes the manufacturing and service industries, all of our members provide health insurance and retirement plan benefits for their employees. that is somewhat unusual as a statistic, but that is ours bear out that spca. the sblc is 50 professional associations that share a common commitment to future and small business. again, representing areas as diverse as manufacturing and retailing and professional technical services and instruction in transportation and agriculture. all those different trade associations are hammering out what they think will work with small businesses. i am a member of the board of directors and i am a practicing tax attorney and i practice in the area of retirement employee benefits. i am here as to how important the retirement plans are to america's retirement security, also also to discuss how this coverage can be increased, and finally i want to discuss ways to incentivize employees to keep their savings inside the retirement fund. we have some statistics that are pretty startling. one of these statistics is, and this is done that individuals of all economic levels are more likely to stay inside a retirement plan than outside a retirement plan. the actual statistic is that workers are 14 times more likely to save in a retirement plan offered by their employer then to save through and iraq. those who work with small businesses apply this across the board. so we have next businesses as well. the magic is the table deductions. so you have your paycheck, it is the contribution that you're making to the plan that is automatically taken out of the paycheck. there is nothing that the employee is doing. it is all on automatic pilot. not only did you not have to do anything to get the money into the retirement plan, but it is not in your pocket. so it is much harder to think of spending it because it's not there. now, i think that we all have walked down the street with a dollar in a pocket and we know what happened. the retirement security is intended to rest upon three sources. very often you may have heard this referred to as a three-legged stool. the first is social security. the second is the voluntary private retirement plan system, and the third is individual savings. today we know that social security is a defined benefit system. it is based on annuity framework and we have a few different surveys the you can pick and that is about it. you cannot outlive your payments coming from social security. a qualified voluntary private retirement system is based on a defined contribution system. usually that comes from an ira or a mum son or a combination of one or more of those payments. the voluntary private retirement systems are related by the irs and department of labor. this is so small businesses in mid-businesses are able to create retirement plans that fit their business and employee census the best. and the individual savings is also open-ended. initially was it was thought that this would be done outside of the retirement plan because it really wasn't until a 401k plan that it became clear that this was going to be a major vehicle for americans to save. the social security system, i think we all know, is probably in pretty good shape. i imagine what i don't believe it would be made successful, but i can understand that it can be painfully political to shore it up. the private retirement system is an early good shape, or in large part to a series of laws that were passed in last two two decades by congress that recognize that the system had become too complex and that there was not enough in the system for small business owners to join the system. and this includes the small-business owners, so that an owner could make sense for the company sponsored retirement plan. because this outweighed the cost and benefits in the payroll system. let's just talk about this quickly because we know that it is an easy and painless way to say it. we know that it is done automatically. we know that it is not, it is much harder to spend the money, and the third thing about it is in the 401k area, employees do not have easy access to the money. not only is it taken away automatically, it sort of locked inside. you can get to it by loans and neither of those are easy ways to get your money. the money keeps growing tax-free. i hope by now you are understanding a part of what i am getting killed. and this is encouraging savings inside retirement plan which is a very good thing for us to do and we should be trying to educate all employees, particular -- in particular younger employees to take advantage of this feature in their plan. interestingly what we do know is that if it does not matter if it is a large business or a midsize business or a small business, once a plan is offered to an employee, it is almost the same rate of the employees. so once again we know that it is to the benefit of the retirement security of the americans to promote this plan and encourage formation particularly in the small-business sector. two other things we know are very successful and they are somewhat startling. one is auto enrollment. and it is when an employee is hired they are automatically enrolled in the plan. to get out of the plan you have to take steps to say that i don't want to be in the plan, take me out, so you are automatically enrolled. the other is automatic escalation, which means that you might start off with a 3% contribution being made, meaning the employee is putting 3% of their income, compensation from that employer, into the plan. the next year might be 4% an extra 5% and next year 6%. that is called auto escalation. you would think and i would think when i first started hearing about these, is why is this successful. then we started realizing and thinking about what i know about small-business employees not only from my own business but from the pca members is that inertia is a huge thing going out there with small-business employees, and i'm not sure i know why, but it is easier to be enrolled in stay enrolled than it is to take all the steps to get yourself out of the plan. the same thing. it is easier to let the savings go into the plan than to take the steps to get out of it. so we know that that is also a very effective thing. finally -- on my way over my time? okay, i will stop here. >> thank you mrs. paula calimafde. doctor johnson? >> thank you. chairman nelson, members of the committee, thank you for the opportunity to testify today about the challenges confronting our retirement income system. as you know, this includes how well retirees will fare. we have been tackling this question and using our capabilities to project this for boomers in later generations. today i would like to share the results from the research and some of the conclusions that i drop him now. first a bit of good news. retirements will increase over the next 30 years, even after accounting for inflation because women are earning more than ever, productivity gains will boost average wages in the economy and many people are delaying retirement and working longer. but now the bad news. more americans will see standards fall with retirement because retirement incomes are not subjective if you pace with earnings. it is not clear how much this is necessary for retirees. but a common rule of thumb is about 75% of the pre-retirement earnings, and the thinking here is that they need less money than while working because they don't have to cover employment costs, they don't have to pay payroll taxes, and they don't have to save for retirement. now, we projected over the next 30 years the share of 7-year-olds who can't meet this 75% replacement rate threshold who increased from 25% today to 30%. that is a 5% increase over that 30 years. and this may not be part of a retirement crisis, but a worrying trend. a bigger threat to retirement security is rising health care costs. older americans already devoting substantial portion of their incomes to health care. although medicare covers adults aged 65 years old and older, many end up paying costs out of pocket because the premiums and deductibles and uncovered services. half of all americans aged 65 years old and older now spend more than 20% of their incomes on health care. and those with incomes below 200% of the poverty level have spent more than a fifth of 20% of their incomes. out-of-pocket health care spending is projected to rise sharply in coming decades as health care costs continue to grow. this includes 20% of income. health care spending rose at the intermediate rates assumed by the medicare trustees. in 2040, about 45% of all adults age 65 years old and older will experience burdensome costs. including that 70% of those in the bottom two fifths of the income distribution. perhaps the greatest financial risk for all americans is the prospect of becoming disabled and needing expensive or long-term care. one estimate indicates seven in 10 americans who survived to age 65 will eventually need long-term services and support. one in five will need help for five or more years. most will receive help from family and friends, creating significant financial and emotional burdens. however increasing numbers of older americans will receive help from caregivers come in and middle-aged women who have informal care are now working more than in the past. as many as half of older adults may end up in nursing homes. long-term care costs are prohibitive. the year of nursing home care in some private room now averages about $85,000 nationwide in the average cost as much as 75% higher in certain parts of the country. a frail older adults receiving 60 hours of paid homecare per month, that's the median amount, will incur costs of about $16,000 per year. and standard health insurance plans do not cover long-term care and this, only about 25% of adults, have private insurance, and the signs of the private market is shrinking. as a result, costs can deplete household savings and many recipients, especially those with extended nursing home stays, which requires that beneficiaries surrender all their income and wealth. including much money in retirement as when they were working. but according to our projections, 35% of those born between 1970 and 1974 will not have enough income by age 70 to replace all of their earnings. this congress grapples with these issues, we suggest protecting income and ensure long-term financial health, and adding meaningful minimum benefit. including an increasing asset for the beneficiaries. protect seniors from catastrophic experiences by setting a limit on spending and create a national inventory program to help finance long-term care. thank you. >> thank you, doctor johnson. we are going to get into some questions now. senator collins? >> thank you, mr. chairman. the jacobsen, i want to thank you very much for coming today and sharing your personal experience. it is important that we put a human face on the issue that we are discussing today. you did just that in sharing your personal experience. so i thank you for that. i am curious about your case because it seems like you planned and did everything right, you were frugal, you have a credit rating of 800. that is awfully good. you are paying your bills. >> 77 to be exact. >> there you go. and yet here you find yourself in difficult circumstances beyond your control. so i'm wondering what happened to the pension that you were promised because if a company goes bankrupt, we have the pension benefit guarantee program which premiums are paid that are supposed to step in, including a lower pension. but you would've gotten something. so why didn't that happen in your case? do you know? >> let me clarify that i do have my pension. my pension itself because i took it as a lump sum and rolled it into an ira. because i didn't know what the company was going to be called tomorrow. it is my health care benefits and my life insurance, and all of the benefits that now cost us thousands of dollars a year to come up with. so that has not been factored in to the retirement budget. look for rison is doing now is de- risking and it has sold off its pensions to another company, prudential in this case, to avoid paying the premiums to the pbgc. so now it is not guaranteed to the rest of the employees. i got out and i took the money and left. >> so people after you are in even worse situations? >> those collecting annuities now are not collecting it from the other mother company, they are collecting it from prudential. which does not guarantee it and is not covered by the pbgc. it is called "derisking." >> you were nine months shy of retirement. what would that have given you? >> more dollars for my medical benefits. >> wouldn't have increased the size of your pension? >> yes. >> doctor mitchell, you made an incredibly important point about the potential benefits for some people of delayed claiming benefits under social security. and obviously we see a significant number of seniors collecting social security at age 62 and sometimes for excellent reasons. some of them may be working and physically very demanding jobs. some may need that income. but we know that doctor johnson touched on us. it is extremely low. i have always felt that when we look at social security reform, we need to increase the minimum benefit. that is another issue. my question for you is do you think that seniors understand what a huge difference it makes in their social security lifetime benefits delaying the receipt. i was shocked at the 76% figure that you gave. i follow this fairly closely. selection of the social security administration be doing to make sure that seniors understand that if they choose age 62, they will get far less than if they are able to delay the receipt, sometimes they can't, or there are good reasons not to. >> that is an excellent question. up until very recently, maybe three or four years ago, the social security field agents had a policy of describing this choice want to claim the benefits in terms of the so-called breakeven level. also for example they might say that you get a thousand dollars a month, just to pick a number out of the air. if you work one more year past age 62, you'll get $1127 more a month. but then they would say, do you realize that you would forfeit the $12,000 plus the interest and we would use the word forfeit, if you don't live for sure another 14 years. that obviously gives people the cold chills and they say that we don't want to forfeit anything, so they tend to be encouraged to take it early. i will say that the social security field agents have moved away from that presentation. nonetheless, a financial advisor, two thirds of financial advisers today still use that forfeit breakeven presentation. so absolutely right, we do not inform people well enough of what a good deal it might be if we can afford to delay maybe not until 70, but a year or two, it is the best deal going in terms of lifetime protection, you can't get it anywhere else. >> thank you. finally, very quickly, paula. could you tell us just quickly if you could pick one policy change that you would recommend to us to encourage, not mandate, but encouraged more small businesses to provide retirement plans for their employees, what would it be? >> i think that i'm going to answer that in the negative. the most important thing that congress could do is not cut back on the contribution levels to retirement plans. in the small business world, the owners are making contributions to the plan in effect out of the profits to the company, which if they didn't put it into their retirement plan or put back in the business, they would take that as compensation. so they are making contributions for themselves and for all of their employees. if there is not enough of a benefit in the plan to encourage them to save, it makes sense for them to put this back into the business, and the number one thing is that with all of the policy issues that you are facing what, debt reduction, tax expenditures, the tax expenditure for the retirement plan system is a huge number. if you look at it one way, it's not even an expenditure because it is money, the money the government is forgoing by having people put money into a plan and having it be tax-free, it comes back to this at the time that the people retire and the money comes back. so the real cost is the time value of money and that is what the government is losing. because the weight is being shown in the budget windows, it looks like a lost and never comes back in. so i think that there is a number of proposals trying to cut back on the retirement plan contributions and all of those really hurt. >> senator warren has done quite a bit of research on senior debt as a professor. senator warren? >> thank you very much, mr. chairman. thank you to you and ranking member collins. you show such great leadership every time in getting these issues out here. i think it is fundamental that we all believe that if you work hard, you'll be able to retire with dignity. and yet social security provides just the bare minimum for most people and rising costs for food and health card and drugs. it is really putting the squeeze on families. the chairman mentioned that you are right, i did a lot of research on us. i spent a lot of time talking about working on how families started economically. and among the different studies that i did was one that showed that families from 1991 through 2007, we saw 150% increase in percentage of people over the age of 65 years old who were forced to file for bankruptcy. in bankruptcy because of rising medical costs, out-of-pocket, in bankruptcy because of divorce or the death of a spouse is families break up. in bankruptcy because they lost jobs that they needed to be able to keep their budgets together. i have seen is that i know that it is a terrible problem and i appreciate the work you are doing to bring this to our attention. thank you, ms. jacobson, as ranking member collins said, it is important to have a personal faith and i appreciate your coming here today. i would like to just ask a question about helping people save more for retirement. the idea of how to best take care of themselves, how people can take care of themselves, we know that if there is an employer-sponsored plan, as you said, that we will see more people in that plan. i think he said 14 times as many people. we will get into a retirement plan that we have employer's sponsorship of those plants. yet we know from the employment benefit research institute in about half of all employers offer no retirement plans in kind and that the gao tells us that for companies that have 100 or fewer employees, at the rate at which 72% offer no retirement plans of any kind. as i understand it for small businesses, since his is obviously the problem, fewer small businesses are offering retirement plans and one of the principal reasons we talk about are the high administrative costs. that it's very expensive for small businesses to do this. businesses have pulled together and we have multiple employer plans so that small businesses can work together to try to get benefits for their employees. today i join chairman nelson and senator murray in a letter to the department of treasury encouraging them to go forward with rulemaking and protect small businesses and the multiple employer plans by ensuring that an entire plan will not become disqualified in the event that one particular company breaks the rules, the bad apple problem. why would lik to do is ask him if iould, if you could just speak briefly to the question of how important it is to remove obstacles so that small businesses are more likely to participate in an employer-sponsored pension plan. >> that is critical. but i want to start off with saying that i think that the gao study as far as coverage of the small business sector does is wrong and there was a study done in 2011 by the social security administration that relied on w-2 data rather than serving employees. what they found was -- that was exactly my report. but basically that was for -- if you were looking at a small business, one that employs 25 employees but less than 50, 60% of those businesses offer retirement plans. so the numbers are much better. again, those of us who work in this area are not surprised because employees very often don't even know that they are making 401k contributions to the plan. even strangely more they don't know that the country and train companies making contributions for them. so the world is not as dark as we thought. it is much better than we thought. but that doesn't mean that we shouldn't encourage more formation. because the more formation, and we know that they take this, so the savings of the plan are the way to go. next, i encouraged trying to get rid of the bad apple rule. it's not a fair rule, and you have a group of employees, employers coming together, if one of them has a plan that is disqualified, it disqualifies all the plans. so i think that the goal of them to lower the administrative costs is a good goal. i have a feeling that it would end up like a lowest common denominator type of plan, hopefully like a starter plan. because i have a feeling that the choices, they would not be as good as you'd normally get in a regular brokerage house or insurance company plan. >> one more question on pensions, and then we will have us out here. because i just think it's so important. that is whether we are talking about 40% of the employees of small businesses, or to 70% not having this or still way too many. we are looking at ways to try to get more people into employer-sponsored plans. selecting one more question about that, the gao also found that small businesses pay higher fees than larger employers. that small businesses, because they lack the economies of scale of larger employers, they sometimes are just left out here and that much of the increased cost comes from the lack of expertise of the small businesses in picking these plans and having to deal with these plans. last year the department of labor implemented new 401k employee fee disclosures to try to help small businesses and participants better understand the fees that they are paying. i understand that this is enormously valuable. but the real question i have is when it be more helpful if we just made these rules simpler and encouraged the department of labor to get simply rules out there for the employers and for the employees. doctor mitra, would you like to speak about? >> simplification, being against simplification is un-american. it absolutely. i've been working this area for 30 years. >> would make a real difference? maybe that is the way that i should put it. do you think it would make a real difference? >> the issue is that congress has used tax laws and a number of other tax laws to shape the environment in which we save for retirement. so there is a certain amount that we can put in tax qualified, one that we can take out with a penalty, certain ages. it is complicated. i believe that the research has shown that automatic enrollment works. if you can put in place a pension, people stay in and they know that they should be staying in for retirement. also that you ought to enroll people, what do you put them into in terms of this. i can congress do the right thing and the labor department did the right thing in regards to target date funds. but by and large, it's better than holding your money market funds for the next 70 years. the big question is what happens at retirement. those of us that have defined contribution plans, 401k plans get there with a lump sum and then we are left adrift. how we manage the money so we don't outspend it in retirement? i think that is the crucial issue. how to inform people and make them comfortable helping them through this phase. >> thank you very much, thank you for your indulgence. >> thank you, senator one. senator scott? >> thank you, the insurance business we to call that too much at the end of the month money. unfortunately it isn't often occurrence. ms. paula calimafde, a couple of questions on the simplification process for small businesses that you want to engage in finding plans. i have spent 25 years of my professional life and in the insurance business, as well as accessing and educating to the employers, especially the smaller ones. they were clueless, really. on the number of opportunities in the marketplace for as little as four to $500 per year to get started. my question to you is a question on tax preferences. the plans are pretty simple. you can get an age we did plan one of the major funder companies for a very small fee to get it started. the question really comes to the knowledge, with all the stuff going on in small businesses. the space for making retirement decisions seems to be eliminated because of the lack of profit being made up by five to seven years. now, could you comment on the notion of conditioning small employers to make good decisions under the research so that they know what is available in the marketplace? >> is a great question. i have to applaud those in the insurance industry. they have gotten it that the 32nd soundbite and a single piece of paper with charts on it and colors goes a long way rather than a 10 page legal document. they say that i'm not going to read this today. we do know from the small business administration on behalf of small businesses, many don't make it through the first five years. if you are a business in the first five years, the chances are you sitting around thinking about retirement benefits for yourself or anyone else, probably not. hopefully you're trying to keep the business alive. after 10 years, only a third make it through. that is a pretty sad statistic. the ones that do make it through a very stable. because the owners -- most will not be sold, so they cannot rely on the business for their retirement security. we know that there is the non-qualified deferred compensation rule which is so important in the larger businesses because of the tax code. i would think one of the most important things would be for accountants and insurance people who advises small-business owners. in fact, we often find that it is the accountant was the first person to talk to small-business owners and say that you have some profit this year. you can put in a retirement plan. i agree with you. i think that plans are fairly easy read to be put in and i don't think that they are that expensive for the varied number of brokerage houses that are very good at doing it and insurance companies as well. you know, i have probably missed someone else in the world, but trade associations, the problem isn't the plan. and there is some very good investment advice out there. if you look at a typical 401k plan today from the employee's viewpoint, they can go on the website, they can see the different choices and they can see how much they have saved. they usually have a pie chart that shows them what they have done. if they go into the default, which is almost always a target front, so that the real magic is getting them to the plan. and i really think that the advisors are the key. >> perhaps on the dysfunction of our tax code and how they can send more dysfunction, my next comments will help us. the long-term-care component, which of course is not covered by your health insurance plan, so the whole finance world literacy comment need to infuse into the long-term-care and the activities of daily living that is a trigger to start this. so my question is on the tax preference in the tax code with some kind of tax incentives to purchase long-term care, the impact of that, in my second question as i run out of time and 35 seconds. is a question about simple math. part of the challenge that we face today for seniors that will be repeated, an exasperated over the next couple of years. the 50 or six years ago we had the expiration happened three years later. today we have three working and then 15 years later. we are dealing with a problem of math and i would love to have someone talk about how we changed the contributions that are necessary for us to sustain a system that is based on a formula that is obsolete. the first question is a question about tax preferences as it relates to long-term care and those types of things that would allow for folks to make better decisions because they have the tax incentives to do so. >> long-term care is one of the most fun challenges i think that we really face today. recently my employer decided to offer long-term-care, not as a tax subsidized vehicle but a payroll tax deduction off of my paycheck. i dropped my life insurance and bought the long-term care insurance because i figured that was the next challenge. 2% of employees at most in my experience by long-term-care when it's offered, to active workers. you might think that we can wait until later when we retire. but by that point you may be uninsurable were underwritten. so it's a very big challenge. one of the concerns also is in an environment where we can't predict future medical care costs very well and we can't predict longevity very well, and insurance companies themselves, and i'm sure that you know this from your experience, they don't know what they are insuring. as a consequence, there is a lot of passing the buck going on. people not knowing what they can afford to do when they do have coverage that is more expensive. all i can say is there are other models that may be worth your while to take a look at what they did in japan. they have actually mandated long-term-care insurance, which is privately provided that everybody from the age of 40 has to pay into a pool so you don't get adverse selection, that has not corrected the problem, but does mean that there is more protection. the benefits also mean that it is tested. so if it turns out that you are quite wealthy, you get less than if you don't. >> thank you, senator scott. you know, we have passed the long-term-care act that then we had to backtrack. senator manchin? >> thank you, mr. chairman. if i could ask doctor mitchell, the gao has identified about 15 different agencies. nothing seems to be that the results have been changed. you have recommendations to us about how we could help you streamline the system? >> i have been doing work recently with a fellow of mine. what we have do done is surveyed younger people around the world about the key fundamental simple financial facts that you need to know in order to be able to make smart financial decisions. so we have asked questions, for example, -- we won't make it into a test. >> okay. >> suppose you have $100 in savings account. >> okay, one second. the gao has identified 15 different agencies, spending 60 to $70 million per year. you are watching all this and we are not seeing the results sitting here. if they are giving us this report that there should be consolidation, can you identify for us the overlapping agencies that maybe should be consolidated rather than individuals keeping us alive. >> my answer would be before we decide to consolidate, we should figure out what is the core curriculum and what is it that americans need to know. with that benchmark, we can go out and say, what are these folks providing, what kind of information are they providing. the other issue is the baby boomers and people older are maybe not web family so there is a lot of information. they are much more likely would be trusting their social security field agent than 101 different other providers. so we have to figure out this first, and i think interest is critical and risk diversification is critical. and we have to figure out who is the most trusted conduit of in information and that would be my recommendation. >> i think we are on two different pages. i'm just saying that there are 15. have you evaluated what they are trying to educate my generation on, whether web friendly or not web family? do i have 15 in the same thing, tendering the same thing? can you recommend that this should not happen, that we should maybe have a portal with one or two doing with 15 are doing now? i only have so much time. >> i can give you some recommendations and some useful studies. >> thank you so much. >> doctor johnson? >>e care. it is a great concern of the elderly population. but i just saw the inhumane treatment when a person who has been a breadwinner all their lives have been now a medicaid recipient. something is just not right. when you take something away from a hard-working individual and say now you're going to be awarded to the state. there has to be a better way to do it. have you a look into that, can you give us any recommendations or help on our? i always thought that need-based -- so my mother or father, they can at least feel like they were taken care of and providing for their own care a little bit. now they basically in the two-year period of time, they have to divest all of their assets and worldly possessions in order to get down to the poverty level so medicaid kicks in. 80% of people in nursing homes are on medicaid. i don't know if that affects the national average, but i know it is high because they don't understand the system. >> that is certainly true. the system of financing nursing home care is almost nonexistent. so there are two suggestions, one is to get more people private insurance, either put lots of money away so you can cover this expense when you need it, that is almost impossible to do because the costs are so high. and the other alternative is to put this private insurance and, right now with 12% of seniors that have private insurance and we see that there is very little effective tax incentives and it gives us a little bit but not much. he tried to have a voluntary system which was recently repealed. that doesn't work because we have adverse selection patterns and many people are going to join this program and that means that the program is unsustainable. it seems to me that one solution is to try to include more long-term care costs within medicare. perhaps raising premiums or taxes, raising payroll taxes, having payroll tax contribute and fund some of these future care benefits. that is the way the you would at least avoid this problem that people have been forgoing all their assets. >> i am just saying that the nursing home industry is a great job of taking care of people and we are very pleased with mostly all of the nursing home care that we are giving. including if a person is to me and to the point where they don't have so much money that an agency would think that this is it and the families as well. they could pay a certain percentage of that income system. it would help a lot more with adding dignity and i think the little respect to an elderly person that has made their way and paid their way. i don't know if you have looked at this, but we will talk about that later. but that is what we are trying to find. dignity and pride as we roll over. so we can still pay our way as much as possible. thank you. >> i would like to invite the members of the committee to chime in as i do some cleanup here. please feel free to interrupt. ms. jacobson, you mentioned that you have seen age discrimination in trying to find employment. please tell us about that. >> well, when i was in between jobs i sent over 100 resumes and i had several interviews. i had one company in sarasota and i walked in and there were six people there that were going to interview me simultaneously. they were extremely impressed but not only with my resume but the things i said in a meeting. they were nudging each other saying did you hear that, that was a great idea and etc. the vice president sent me an e-mail and said the next day that -- it was on thursday. he said we have one more candidate that is superficial and we will get back to you on tuesday. you are number one candidate. i have that in a written e-mail. on tuesday and wednesday and thursday, i didn't hear from him. so i sent him an e-mail and he said oh, e-mail, forgot to call you. we hired somebody else. just enough time to do a background check. i was number one on thursday and on tuesday they forgot my name. >> okay. >> bodies and that is? >> due to how old i was. my resume doesn't say how old i am. >> you don't look like that. >> thank you. the numbers are numbers. >> with six people in the room, the vice president and several others. >> and found out how old you are. >> correct. may i make a comment. i know that this is interjecting, but we have all concurred that this is a problem. what we are lacking here is financial education and i have told my sons that this is a do-it-yourself economy. if you don't do it for yourselves, no one else is going to do it for you. but how are they going to learn how to do it for you? we need financial education in high schools and college and a has to be mandatory. you can't let companies default on their pensions promises and you have to do it yourself. if they don't know how to do it, let's have financial education. thank you. and i'm sorry. >> thank you. doctor johnson had noted that the median value of retirement accounts held by households in the age range of 55 to 64 is $100,000. retirement accounts. the median retirement account balance for 55 to 64, for all households, believe it or not we have a study here, $12,000. we have households with savings, 120,000. so that does not go very far, does it, doctor johnson? >> no, it certainly does not. that amount at age 65 today, you would maybe get 500 or $600 per month. so it helps, every little bit helps. but it is not something to live comfortably on. how to get those account balances to be larger. that is why people have been talking about this auto escalation and auto enrollment, to get people into this, a lot of people don't participate at all in it. and then we have those that don't participate in those that don't participate but invest enough. people who deplete some of their assets before they retire. they take loans from this money. they take them out and they change jobs. all kinds of things can go wrong along the way to retirement. and it is a major problem. i think we should also look at that there is a lot of thinking after the benefit. the defined-benefit world is working that way but not for a lot of people. you get a lot of people, if you change jobs frequently, either because the employer went bankrupt or for other reasons you had to move, you didn't make much in that account either. >> we are coming into some tough conclusions. working longer is one conclusion the certainly was not the way it was in the previous generation. would anyone like to offer some hope? >> may i make a comment? >> please. >> we are saying work longer. but social security when it was first formed, the average life expectancy, i believe was 65 or 66. they were putting together a program that had a life expectancy of 10 or 11 months for the average person. today it is too bad that senator scott haslett, but one of the problems that insurance companies are having is the life expectancy is increasing so dramatically that they really don't even know how to put their life insurance policies together. so to say it is a shame, you must work longer, 65 today is not 6530 years ago or 40 years ago. i would submit that it is not even the same as it was 10 years ago. if you are going to live until you're 85 years old or 89 years old or 90, maybe we want people to keep working longer so that they will provide a functioning society. also i would think it would be more interesting for them to keep working longer then all of a sudden, i don't think most of us are set up for 40 or retirement. that sort of know where we are. also i was going to mention that one of the things in the tax code -- >> let me interrupt you there. senator juan? >> pushing back on that notion, i understand people are living longer. but that doesn't necessarily mean that someone can work longer. living until you are 85 your soul does not mean you can still manage a construction job at 65 years old. >> true. >> what you can take care of small children where there is lots of bending and lifting or that you can still work as a nurse. there are so many jobs that require you to be strong that have battered people's bodies. >> i agree, senator. but i just say that there are a lot of jobs out there where people are being put out to pasture at age 65 and that is a very vital person today. i am almost turning it on its head, saying that forced retirement ages are really not -- they don't fit with today and who people are at 65. >> maybe we are just describing different parts of the problem. because i think i would say this the other way around. we don't have forced retirement ages anymore. but what we have are people who are trying to work and who can't get work, or people for whom it is just not possible to continue to work for years to come. the question is how we are going to manage longer retirement. until they are 68, 70, 72 years old, it is just not realistic, and frankly just not right. for those who want to work and can work and who can find the right kinds of jobs, i am all for it. but if we think the solution to dealing with the coming economic crisis around retirement is to expect them to work until they are 72 years old, i just think that's right and i don't think we can do it. i don't think we should be looking at that direction. >> okay. >> i want to raise a very contentious issue. that we are going to face shortly if there is a grand bargain. and who knows in this political environment what is going to happen. but one of the suggested parts of the grand bargain is to make social security more actuarially sound i'm not increasing the tax on higher level and come folks. but rather altering the cpi from the existing ones to what is known as chained cpi, which is still being evaluated. but the essence is that it is a lower cpi than the existing one. therefore seniors monthly payment of social security would be a little bit less. does anyone want to have any comment about the queen of. >> yes, ma'am? >> you are talking like and death. because it can't get any lower. people can't live. >> we are talking to, we are talking even just food. >> i think what the senator might've been saying is let's say that you come to the retirement age and you have done quite well in your life. do you have other people the basic we haven't done quite as well and they need that. that is the substance of a hat. do you think the society, and this is a discussion that goes on, would they be able to have a flexible -- let's say my parents did very well and they may not need this. they may not need this cost of living. and they are about 250% of the poverty guidelines. and it is still 60 or $70,000 a year. but someone who needs it to adjust their rent and utilities and that would get it. but my parents would not be upset, they would not be upset to say this is what you have, and you are all not going to get this. but teresa over here will get this because she didn't do quite as well. they can live with that, but we can't come to grips with agree with that. it is either a chained cpi order there are just some people that have done very well, you're going to get social security because they paid into it that they didn't automatically have to, nor would they demand or think that it's unfair if they didn't get this so we can keep it for the people that really need it. everyone has paid into social security. does that make sense to? >> yes, and i have been paying into it since i was 15 years but at what level? >> i don't know. i'll use 250% of the poverty guidelines. >> take whatever the poverty guideline is in your state. >> correct. >> and then 250% above that. just hypothetically. but this is part of the discussions that we have to go on and it needs to be talked about. a social acceptance, when i know that i have talked to my family members that are older and they would say, as long as they get my social security back, i'm okay. i'm okay, i'm still in pretty good shape. i can tell you that our neighbor over here has to have it. she has to have it. >> i'm a generous person and i feel the same way that you do. but is everyone else going to? preggers constituents going to? >> i don't know, but around here they are afraid that you are guilty by a conversation let alone by association and they are afraid even talk about it. that is why i said it is a contentious issue. interestingly, the flipside is that you could solve the social security actuarial problem, and there is an actuarial problem. you all have described it. we have a lot more people that are coming into the system than are paying into it. a lot more people that are beneficiaries, that is what i mean. now you could on the level of someone's salary, 110,000, you could pose a social security tax on the amount of income above that. i do not know the specific amount of the tax. but you could virtually stalled the actuarial problem for social security without. >> i think again we are talking about is if you make $250,000 per year taken in by 2% participation. should that go up to east with the value of the dollar was when we started that, 181190 today? there has to be a way to do it when no one thinks it's doctored. dunaway where this would've been the natural increments that it should be today. that is where i think the cash flow might take care of itself. but there are people that say that that is just raising the taxes. >> thank you. i just want to point out that when the president proposed moving to a chained cpi, he also proposed to increase the minimum benefit. ..

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